/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080213.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, February 13, 2008, Vol. 12, No. 37 Headlines ACE AVIATION: Earns $1.13 Billion in Quarter Ended December 31 ADAM AIRCRAFT: Suspends Colorado Biz Over Failure to Secure Funds ALLEGHENY TECH: S&P Upgrades Corporate Credit Rating From 'BB+' AMC ENT: Posts $11.2 Mil. Net Loss in 3rd Quarter Ended Dec. 27 AMERICAN HOME: Court Sets February 26 as Loan Sale Bid Deadline AMERICAN TECHNOLOGIES: Inks Agreement with Laurus on Note Default ARAMARK CORP: S&P Keeps 'B+' Corp. Rating on High Leverage Profile ASARCO LLC: U.S. Government Wants Late-Filed EPA Claim Allowed ASARCO LLC: Can Employ Filardi as Local Counsel ASARCO LLC: Can Hire Paul Ruh at A&M LLC as Bankruptcy Controller BALLANTYNE RE: Losses Cue S&P to Junk Ratings on Two Sub Debts BEAR STEARNS: S&P Chips Rating on Class B Certs. to BB From BBB BLOUNT INT'L: Sept. 30 Balance Sheet Upside-Down by $78.1 Million BOHUMIR MARIK: Voluntary Chapter 11 Case Summary BOISE CASCADE: Aldabra 2 Stockholders Approve Merger Deal BOISE CASCADE: S&P Designates 'BB' Rating on Negative CreditWatch BON-TON STORES: Moody's Cuts Corp. Rating to B2 on 2007 Weak Sales CAMPBELL RESOURCES: Nuinsco Provides $1.5 Mil. Revolving Facility CATALYST PAPER: Inks Sale of Snowflake Mill With AbitibiBowater CATALYST PAPER: S&P Ratings Unaffected by $161 Million Merger Deal COHR HOLDINGS: Moody's Alters Outlook to Negative; Holds B2 Rating COMMERCIAL MORTGAGE: Stable Performance Cues Fitch to Hold Ratings DELPHI CORP: Lenders Have Problems Syndicating $6.1 Billion Loan DELTA FINANCIAL: Committee Taps Landis Rath as Delaware Counsel DELTA FINANCIAL: Committee Taps Weiser LLP as Financial Advisor DOMAIN INC: To Hold Bankruptcy Liquidation Sale DOMAIN INC: Taps Dreier LLP as General Bankruptcy Counsel DOMAIN INC: Taps Saul Ewing as Delaware Bankruptcy Counsel DOMAIN INC: U.S. Trustee Appoints 7-Member Creditors Committee DOMAIN INC: Section 341(a) Creditors' Meeting Set for Feb. 26 DURANT CDO: Moody's Gives Junk Ratings on Four Classes of Notes ENCORE ACQUISITION: Completes Sale of Oil Properties to OLLC ENESCO GROUP: Plan Confirmation Hearing Deferred to February 13 ETHANEX ENERGY: Inks $220 Mil. Purchase Deal w/ Midwest Renewable FINLAY ENTERPRISES: 94 Stores Closes Due to Macy's Restructuring FINLAY ENTERPRISES: Quarter Sales Increase 24.1% to $383.4 Mil. FINLAY ENT: Closure of 94 Stores Won't Affect S&P's 'B-' Rating FIRSTLINE SECURITY: Section 341(a) Meeting Slated for February 28 FIRST MAGNUS: Arizona Bank Wants WNS Subpoena Quashed FIRST MAGNUS: Executives Plan New Mortgage Company FIRST MAGNUS: Inks Settlement to Countrywide's Objection to Plan FIRST MAGNUS: Wants All Plan Confirmation Objections Overruled FORD MOTOR: Plans to Offer Buyout Packages to 9,000 Workers FOREST LAKE: Case Summary & 20 Largest Unsecured Creditors GENERAL MOTORS: May Have to Fund Delphi's Exit, Investors Say GENERAL MOTORS: Reaches Agreement with UAW on Attrition Program GENERAL MOTORS: Posts Net Loss of $38.7 Billion in 2007 GENERAL MOTORS: Inviting Ex-Guide Corp. Workers to Apply at Plants GLOBAL MOTORSPORT: Files Schedules of Assets and Liabilities GLOBAL MOTORSPORTS: U.S. Trustee Balks at Terms of Asset Sale GRANT WILLIAMS: Case Summary & Four Largest Unsecured Creditors HAVEN HEALTHCARE: Court Extends Filing of Schedules Until Friday HDB LLC: U.S. Trustee to Convene Section 341(a) Meeting on March 5 IDEARC INC: S&P Changes Outlook to Negative; Holds BB Rating IMAC CDO: Moody's Junk Ratings of Six Classes of Notes INNOVATIVE DESIGNS: Louis Plung & C Expresses Going Concern Doubt INPHONIC INC: Court Sets March 21, 2008 as Claims Bar Date IAC/INTERACTIVECORP: Improved HSN Might End Liberty Media Feud JAI BHOLA: Case Summary & 10 Largest Unsecured Creditors JETBLUE AIRWAYS: Elects Christoph Franz to Board of Directors JOHNSON RUBBER: U.S. Trustee Adds RCMA Americas Into Committee JOSE LUZ: Case Summary & 10 Largest Unsecured Creditors LEVITT AND SONS: Abandons Interest in 8 Homeowners Associations LEVITT AND SONS: Depositors Want Claims Bar Date Fixed at March 11 LEVITT AND SONS: River Hall Panel Wants to File $10MM in Claims LIBERTY TAX II: Dec. 31 Balance Sheet Upside-Down by $11.1 Million LITHIUM TECH: Amper Politziner Expresses Going Concern Doubt MANIS LUMBER: Case Summary & 46 Largest Unsecured Creditors MARK MILLER: Defaults on $12.4 Million Loan from Wachovia Bank MATTRES GALLERY: Can Access OMG DIP Facility on Final Basis MAXJET AIRWAYS: Taps Morten Beyer as Expert Valuation Consultants MOHEGAN TRIBAL: Moody's Reviews Low-B Ratings for Likely Cut OAK MESA: Section 341(a) Meeting Slated for February 20 OCEAN SPRAY: Moody's Reviews Low-B Ratings for Possible Upgrades OTTO BEYER: Section 341(a) Meeting Slated for February 25 PARMALAT SPA: Milan Court Starts Trial Against Banks, et al. PARMALAT: Former Auditor Says He Warned of EUR170-Mil. Debt PIKE NURSERY: Judge Diehl Approves KPMG as Real Estate Advisor PLASTECH ENGINEERED: Court Okays Donlin Recano as Claims Agent PLASTECH ENGINEERED: Court Okays Donlin Recano as Claims Agent PLASTECH ENGINEERED: Lenders Want to Intervene in Chrysler Suit QUALITY HOME: Chapter 11 Trustee Taps Irell as Special Counsel QUALITY HOME: Trustee Taps Stanley Shure as Insurance Counsel QUEBECOR WORLD: Moody's Assigns 'Ba2' Rating on $400 Mil. Sr. Loan REFCO INC: Court Moves Claim Objection Deadline to April 30 REFCO INC: Sale of 35% Equity Stake in FXCM Consummated REFCO INC: SPhinX Liquidators Want Protective Order Eased RANCHO DEL SOL BRILLANTE: Voluntary Chapter 11 Case Summary REMINGTON ARMS: Theodore Torbeck Named Chief Operating Officer RH DONNELLEY: S&P Changes Outlook to Negative; Holds 'BB-' Rating RH DONNELLEY: Fitch Assigns 'B+' Issuer Default Rating RICHARD RANDALL: Case Summary & 10 Largest Unsecured Creditors ROTECH HEALTHCARE: Requests Transfer to NASDAQ Capital Market SANTA FE ENERGY: Trustee Seeks NYSE Delisting, Distributes Funds SANTA ROSA BAY: Fitch Puts 'BB-' Bonds Rating Under Neg. Watch SCO GROUP: Reduces Workforce by 30 Positions to Reduce Expenses SOUTHERN UNION: Citrus Corp. Inks $500 Million Loan with FPL Group SPECTRUM BRANDS: Dec. 30 Balance Sheet Upside-Down by $141.2 Mil. STRADA 315: Case Summary & 20 Largest Unsecured Creditors TOUSA INC: Wants to Hire Greenberg Traurig as Special Counsel TOUSA INC: Gets Interim OK on Lazard Freres as Investment Banker TOUSA INC: Seeks Approval of KZC Services Agreement TP EMERALD: Section 341(a) Creditors Meeting Set for March 4 USA INVESTMENT: Court Confirms Chapter 11 Plan of Liquidation US ENERGY SYSTEMS: Chancery Ct. Moved Special Meeting to Feb. 19 US SHIPPING: Reports $1.4 Mil. Net Loss for Quarter Ended Dec. 31 VICTORY MEMORIAL: Wants Court to Approve Asset Sale Procedure VISAGE CDO: Event of Default Cues Fitch to Junk, Withdraw Ratings VONAGE HOLDINGS: Sharon O'Leary Resigns as EVP Effective March 31 WATERFORD GAMING: Moody's Reviews Low-B Ratings for Possible Cuts WESTSHORE GLASS: Section 341(a) Creditors Meeting Set for Feb. 29 WHERIFY WIRELESS: Inks Forbearance Pact with Yorkville Advisors WIN WIN GAMING: Section 341(a) Creditors Meeting Set for March 5 * S&P Downgrades 67 Tranches' Ratings From 10 Cash Flows and CDOs * S&P Downgrades Ratings on Seven Classes From Six NIMS RMBS * S&P Downgrades Ratings on 21 Classes of Certs. From Eight RMBS * Fitch Says Weakening Economy Will Challenge Restaurant Industry * Fitch Updates Credit Card Indices for the Month of January * Pres. Bush Slashes Budget for Children's Federal Health Programs * Six Banks Join Alliance to Grant 30-Day "Pause" on Foreclosures * Focus Management's Naglewski Named as Finalist by M&A Advisor * Upcoming Meetings, Conferences and Seminars ********* ACE AVIATION: Earns $1.13 Billion in Quarter Ended December 31 -------------------------------------------------------------- ACE Aviation Holdings Inc. reported net income of $1.13 billion in quarter ended Dec. 31, 2007. The company reported net income of $1.4 billion for the full year 2007. Net income included $1.37 billion pre-tax gains mainly from the sale of ACTS and from the secondary offerings of Aeroplan and Jazz. "I am pleased with our strong progress during 2007 with the implementation of ACE's business strategy," Robert Milton, chairman, president and chief executive officer, ACE Aviation Holdings Inc., said. "We have delivered strong financial results for the year and we've also made excellent progress in delivering shareholder value." "In the first six months of 2007, we returned $2 billion of capital, under a Plan of Arrangement approved in 2006, to our shareholders through distributions of units in Aeroplan and Jazz," Mr. Milton added. "We completed the monetization of ACTS during the fourth quarter with net cash proceeds to ACE on closing of $723 million, and received the remaining proceeds of $40 million in January 2008 which had been held in escrow. ACE also retains a 23 per cent holding in ACTS post-monetization. "In the fourth quarter, we also raised $726 million through secondary offerings of Aeroplan and Jazz, reducing our shareholdings in both to 20.1 per cent," Mr. Milton continued. "In January 2008, ACE further reduced its holding in Jazz to 9.5% by way of an exempt trade. In December 2007, we launched a $1.5 billion substantial issuer bid which was completed in January 2008." At Dec. 31, 2007, the company's balance sheet showed total assets of CDN$13.77 billion, total liabilities of CDN$10.55 billion and total shareholders' equity of $CDN3.22 billion. About ACE Aviation Headquartered in Montreal, Canada, ACE Aviation Holdings Inc. (Toronto: ACE-A.TO) -- http://www.aceaviation.com/-- is the parent holding company of Air Canada, Aeroplan, Jazz, Air Canada Technical Services, Air Canada Vacations, Air Canada Cargo, and Air Canada Ground Handling Services. * * * ACE Aviation Holdings continues to carry Dominion Bond Rating Service's 'B+' long-term local and foreign issuer credit ratings, which were placed on April 2006. ADAM AIRCRAFT: Suspends Colorado Biz Over Failure to Secure Funds ----------------------------------------------------------------- Adam Aircraft Inc. said on its Web site that it suspended operations Monday at its facilities in Colorado. Adam Aircraft said the move was "difficult but necessary." This measure, according to the company, was required due to its inability to come to terms with their lender for funding necessary to maintain business operations. The company is currently exploring all of its alternatives and will provide further guidance when decisions are made, which is expected to be later this week. Adam Needs To Secure Financing As reported in the Troubled Company Reporter on Jan. 25, 2008, Adam Aircraft Industries must secure two financing transactions otherwise it will be forced to liquidate, as stated in a letter by CEO John Wolf to stockholders. Although the company had already secured $5.5 million in December 2007, it needed to obtain $30.5 million by the end of January. According to the letter, the company must successfully complete the $30.5 million transaction in order for the company to obtain at least a $100 million equity financing led by Citibank sometime in May 2008. At that time, the company warned that if it is unable to complete its first financing by the end of January, the company could undergo liquidation in order to pay its obligations to its lenders. Then, the letter stated, stockholders will have little or no recovery for their investments. The company had offered parties who invest for the January financing a 49.9% equity interest in a newly formed subsidiary. About Adam Aircraft Adam Aircraft Industries -- http://www.adamaircraft.com/-- designs and manufactures advanced aircraft for civil and government markets. The A500 twin-engine piston aircraft has been Type Certified by the FAA, and the A700, which is currently undergoing flight test and development. ALLEGHENY TECH: S&P Upgrades Corporate Credit Rating From 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and other ratings on Allegheny Technologies Inc. to 'BBB-' from 'BB+'. The outlook is stable. "The upgrade reflects the company's meaningful improvement in operating and financial performance due to strong demand in its key end markets, its shift away from commodity-based products and pricing, and its improved cost structure," said Standard & Poor's credit analyst Marie Shmaruk. "Although visibility through the first half is unclear because of an uncertain economy and delays in the Boeing 787 Dreamliner, the outlook for the company's major end markets are favorable for at least the next few years and we expect ,that Allegheny's solid performance will reflect that favorable outlook." Ms. Shmaruk added, "We could change the outlook to positive or upgrade the ratings further if the company's end markets remain strong, the company completes its aggressive growth plans without increasing debt, and financial policies remain conservative. Conversely, material weakness in Allegheny's markets and performance could pressure ratings, as would a significant increase in the company's debt leverage to fund growth or shareholder-friendly actions." Pittsburgh-based Allegheny is a diversified specialty material producer. AMC ENT: Posts $11.2 Mil. Net Loss in 3rd Quarter Ended Dec. 27 --------------------------------------------------------------- AMC Entertainment Inc. reported a net loss of $11.2 million on total revenues of $559.0 million for the third quarter ended Dec. 27, 2007, compared with a net loss of $6.5 million on total revenues of $596.4 million in the same period last year. U.S. and Canada theatrical exhibition revenues decreased 6.9%, or $38.5 million during the thirteen weeks ended Dec. 27, 2007, compared to the thirteen weeks ended Dec. 28, 2006. Admissions revenues decreased 5.6%, or $21.1 million due to a 10.7% decrease in attendance partially offset by a 5.7% increase in average ticket prices. Concessions revenues decreased 6.6%, or $9.8 million, due to the decrease in attendance partially offset by a 4.7% increase in average concessions per patron related primarily to price increases. Other theatre revenues decreased 29.2%, or $7.6 million, primarily due to decreases in on-screen advertising revenues as a result of the new Exhibitor Services Agreement with NCM. International theatrical exhibition revenues increased 2.6%, or $1.1 million during the thirteen weeks ended Dec. 27, 2007, compared to the thirteen weeks ended Dec. 28, 2006. Thirty-Nine Weeks Ended December 27 Total revenues increased 0.5%, or $9.1 million, to $1.88 billion during the thirty-nine weeks ended Dec. 27, 2007, compared to $1.87 billion thirty-nine weeks ended Dec. 28, 2006. Net earnings were $47.9 million and a loss of $25.4 million for the thirty-nine weeks ended Dec. 27, 2007, and Dec. 28, 2006, respectively. Cash Flow from Operations Cash flows provided by operating activities were $227.4 million and $205.2 million during the thirty-nine weeks ended Dec. 27, 2007, and Dec. 28, 2006, respectively. The increase in operating cash flows during the thirty-nine weeks ended Dec. 27, 2007, is primarily due to the increase in net earnings. The company had approximately $182.5 million and $177.5 million available on its credit facility to meet obligations as they come due for the periods ended Dec. 27, 2007, and March 29, 2007, respectively. Balance Sheet At Dec. 27, 2007, the company's consolidated balance sheet showed $3.91 billion in total assets, $2.76 billion in total liabilities, and $1.15 billion in total stockholders' equity. The company's consolidated balance sheet at Dec. 27, 2007, also showed strained liquidity with $308.8 million in total current assets available to pay $491.1 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended Dec. 27, 2007, are available for free at http://researcharchives.com/t/s?27ed About AMC Entertainment Based in Kansas City, Missouri, AMC Entertainment Inc. -- http://www.amctheatres.com/-- is one of the world's largest theatrical exhibition companies. The serves more than 230 million guests annually through interests in 358 theatres with 5,128 screens in six countries. * * * To date, AMC Entertainment Inc. still carries Moody's Investors Service's Ba1 bank loan debt and B2 senior subordinate ratings. Outlook is Negative. AMERICAN HOME: Court Sets February 26 as Loan Sale Bid Deadline --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has set 4:00 p.m., Eastern Time, on Feb. 26, 2008, as the final deadline for parties to submit a bid on American Home Mortgage Holdings Inc.'s sale of certain non-performing loans. On Feb. 1, 2008, the Court authorized the sale of non-performing loans, subject to higher and better offers for each pool of non- performing loans. The Debtors relate that they will post the highest indicative bid on their intralinks Web site on or before 12:00 n.n., Eastern Time on Feb. 27, 2008. Additionally, the Court disclosed that a hearing to confirm the auction will be held before the Hon. Christopher S. Sontchi on 11:00 a.m., Eastern Time, Feb. 28, 2007, at the 5th Floor, 824 North Market Street, Wilmington, Delaware. Parties who wishes to object on the sale of these non-performing loans has until Feb. 21, 2008, to submit their objections. 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 expired Dec. 21, 2007. AMERICAN TECHNOLOGIES: Inks Agreement with Laurus on Note Default ----------------------------------------------------------------- American Technologies Group Inc. reached an agreement with Laurus Master Fund, Ltd. granting Laurus a first priority security interest in the common stock of each of its subsidiaries in connection with its failure to timely pay its current obligations due to Laurus under its $2 million secured convertible term B note. ATG also executed a security agreement that granted Laurus a first priority security interest in all the respective goods, inventory, contractual rights and general intangibles, receivables, documents, instruments, chattel paper, intellectual property owned by ATG and each of its subsidiaries. On Jan. 31, 2008, ATG received notification from Laurus that certain events of default had occurred and are continuing beyond any applicable cure or grace period with respect to all of its secured obligations due to Laurus. ATG also received a letter from LV Administrative Services, Inc., acting in the capacity of administrative and collateral agent for Laurus, that demands the immediate payment of all past due amounts owed to Laurus by Feb. 1, 2008. The amounts demanded totaled $13,580,810 -- $10,350,000 in principal amortization, $96,777 in accrued interest, and $3,134,033 in Default Fees. ATG did not make the payments, and, accordingly, Laurus took all steps it deemed necessary to protect its interests, including the enforcement and exercise of any and all of its rights, remedies, liens and security interests available to it. The security agreement and stock pledge agreement state that if an "event of default" occurs under any agreement with Laurus, it has the right to take possession of the collateral, to operate its business using the collateral, and has the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the collateral, at public or private sale or otherwise to satisfy its obligations under these agreements. As a consequence of its default, Laurus has the right to pursue any of the remedies set forth in the pledge and security agreements. Prior to the receipt of notice of default, and continuing through the date of this filing, ATG have been in ongoing negotiations with Laurus concerning its obligations to them. These negotiations resulted ATG's receipt of nonbinding term sheets from Laurus outlining a transaction which would result in the satisfaction of its obligations to Laurus. The transaction outlined in the term sheets has been approved in principal by ATG's Board of Directors and ATG expects to close the transaction after finalization and execution of definitive documents and shareholder approval. It is anticipated that the transaction would close in the month of March. Although ATG are hopeful that these negotiations will result in an agreement that is beneficial to the company, ATG has no commitments or assurances that it will be successful or that Laurus will not pursue any or all of the remedies available to it in light of ATG's default. Going Concern Doubt RBSM LLP, in New York, expressed substantial doubt about American Technologies Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended July 31, 2007. The auditing firm reported that the the company has suffered recurring losses and is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. About American Technologies Based in Fort Worth, Texas, American Technologies Group Inc. (NASDAQ: ATEG) -- was prior to 2001, engaged in the development, commercialization and sale of products and systems using patented and proprietary technologies including catalyst technology and water purification. The company ceased operations during 2001 and began focusing efforts on restructuring and refinancing. In September 2005, the company entered into various financing transactions and acquired North Texas Steel Company Inc., an AISC Certified structural steel fabrication company based in Fort Worth, Texas. On April 25, 2006, the company purchased certain assets of Whitco Company LP, a business conducting the sale and distribution of steel and aluminum lighting poles. The Whitco assets are held in a separate subsidiary called Whitco Poles Inc. ARAMARK CORP: S&P Keeps 'B+' Corp. Rating on High Leverage Profile ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on ARAMARK Corp. At the same time, Standard & Poor's raised its rating on ARAMARK's senior secured debt to 'BB' (two notches above the corporate credit rating on ARAMARK), from 'BB-'. The recovery rating was changed to a '1', indicating the expectation for very high (90%-100%) recovery in the event of a payment default, from '2'. The outlook is stable. ARAMARK had approximately $5.9 billion of debt outstanding as of Dec. 28, 2007. "The rating actions reflect improved recovery prospects on the credit facilities following ARAMARK's approximately $400 million in voluntary prepayments during fiscal 2007," said Standard & Poor's credit analyst Jean C. Stout. The ratings on Philadelphia-based ARAMARK continue to reflect its highly leveraged financial profile and significant cash flow requirements to fund interest and capital expenditures. These factors are somewhat mitigated by ARAMARK's good position in the competitive, fragmented markets for food and support services and uniform and career apparel. These positions translate into a sizable stream of recurring revenues and healthy cash flow generation. ASARCO LLC: U.S. Government Wants Late-Filed EPA Claim Allowed -------------------------------------------------------------- The U.S. Government seeks leave from the U.S. Bankruptcy Court for the Southern District of Texas to file a supplemental proof of claim against ASARCO LLC and its debtor-affiliates on behalf of the Environmental Protection Agency for response costs it incurred and to be incurred under the Comprehensive Environmental Response, Compensation, and Liability Act with respect to ASARCO's Terrible Mine Site in Custer County, Colorado. Alan Tenenbaum, Esq., in Washington, D.C., asserts that the Government's failure to timely file a claim relating to the Terrible Mine Site is due to excusable neglect. Mr. Tenenbaum relates that the EPA first discovered that ASARCO had some involvement in the pollution in the Terrible Mine Site when it concluded its investigation in August 2007. After receiving a report on the investigation, the EPA began evaluating the evidence and compiling the additional information it needed to confirm the existence of its claim against ASARCO, Mr. Tenenbaum adds. The EPA notified ASARCO of the liability in December 2007, he says. Mr. Tenenbaum asserts that ASARCO will not be prejudiced by the filing of the claim because it knew of the liability at the same time as mediation proceedings on its plan of reorganization were still ongoing. The Government, however, did not disclose with the Court the amount of its claim relating to the Terrible Mine Site. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News Issue No. 66; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Can Employ Filardi as Local Counsel ----------------------------------------------- ASARCO LLC and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ The Filardi Law Offices LLC as their local counsel, nunc pro tunc to Jan. 3, 2008, to represent them in L. Tersigni Consulting, P.C.'s bankruptcy case. As reported in the Troubled Company Reporter, L. Tersigni Consulting, P.C., the financial advisor retained by the Official Committee of Unsecured Creditors for the Asbestos Subsidiary Debtors, filed a Chapter 11 case in the U.S. Bankruptcy Court in the District of Connecticut, Bridgeport Division, in November 2007. An investigation into alleged overbillings done by the Tersigni firm's deceased owner, Loreto Tersigni, is ongoing in the Connecticut Court. The Debtors want to appear in the Tersigni bankruptcy case to monitor the case's progress and developments, to pursue any potential claims against the firm, and to otherwise protect their interests. As local counsel, Filardi will: (a) represent the Debtors at any proceeding or hearing before the Connecticut Court; (b) prepare any pleadings, motions, answers, notices, orders, and reports required for the Debtors in the Tersigni bankruptcy case; (c) advise, consult with, and assist the Debtors in their investigation of the acts, conduct, assets, liabilities and financial condition of Tersigni, the operation of Tersigni's business, and the desirability of the continuance of its business; and (d) assist the Debtors in the negotiation of or opposition to or support of a plan or plans of reorganization in the Tersigni case. The Debtors will pay $395 per hour for Charles J. Filardi, Jr., Esq., who will take the lead in representing the Debtors in the Tersigni case, and $150 per hour for paralegal work. Payment for the services to be rendered by Filardi will be taken from either the Wells Fargo Escrow Account or the London market insurers escrow account. Charles J. Filardi, Jr., Esq., principal at Filardi, assured the Court that his firm does not represent any interest adverse to the Debtors and their estate, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News Issue No. 66; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Can Hire Paul Ruh at A&M LLC as Bankruptcy Controller ----------------------------------------------------------------- ASARCO LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of Texas to further expand the employment agreement it entered into with Alvarez & Marsal, LLC, its financial and restructuring advisors, to include the employment of Paul Ruh as bankruptcy controller, effective as of Dec. 1, 2007. As bankruptcy controller, Mr. Ruh is expected to provide accounting and consulting services for ASARCO, including, without limitation: (a) assisting and supporting ASARCO with respect to its external audits; (b) providing accounting support for matters relating to ASARCO's tracking and reporting of liabilities; and (c) providing data and support for use in ASARCO's Disclosure Statement and Plan of Reorganization. ASARCO will pay Mr. Ruh a $60,000 flat fee per month from Dec. 1, 2007, until the effective date of a Chapter 11 reorganization plan. James R. Prince, Esq., at Baker Botts, L.L.P., in Dallas, Texas, told the Court that Alvarez & Marsal has substantially completed its prior projects for ASARCO. The remaining duties of the Bankruptcy Controller are the only projects with which Alvarez & Marsal is assisting ASARCO at this time, he added. ASARCO believes that Mr. Ruh is uniquely qualified to fill the position of Bankruptcy Controller, as he has extensive experience performing services for ASARCO and has deep personal knowledge of the company's business practices. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News Issue No. 66; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). BALLANTYNE RE: Losses Cue S&P to Junk Ratings on Two Sub Debts -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its subordinated debt ratings on Ballantyne Re plc's Class B-1 and B-2 notes to 'CCC-' from 'B-'. The notes will remain on CreditWatch with negative implications where they were placed on Sept. 14, 2007. At the same time, Standard & Poor's said that its Class A-1 notes on Ballantyne Re will remain on CreditWatch with negative implications, where they were placed on Nov. 21, 2007. "We took these actions in response to the continuing mark-to- market losses experienced on the assets in the underlying collateral accounts," said Standard & Poor's credit analyst Gary Martucci. "Since Nov. 21, mark-to-market losses have increased, putting additional strain on the structure. Interest on the Class B notes continues to accrue but has remained unpaid since Sept. 4, 2007, and market value declines, if realized, will put these notes at an increasing likelihood of having losses sometime in the future." For interest to be paid on the Class A-1 notes, the transaction requires the fair market value of the combined assets in the surplus and prefunded account to be equal to or greater than 100% of the company action level risk-based capital. This difference between the fair market value of assets available to make interest payments on the Class A-1 notes and 100% CALRBC has been narrowed since the November ratings action. Although the Class A-1 notes have continued to receive interest payments, the concern is that the continued decline in the underlying asset values will result in an interest payment limitation trigger being breached. Standard & Poor's will monitor the developments in the assets values in the accounts and determine if any future ratings actions are warranted on any notes issued by Ballantyne Re. BEAR STEARNS: S&P Chips Rating on Class B Certs. to BB From BBB --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B asset-backed certificates from Bear Stearns Asset Backed Securities Trust 2003-2 to 'BB' from 'BBB'. Concurrently, S&P affirmed its ratings on the asset-backed certificates from nine Bear Stearns Asset Backed Securities Trust transactions, including series 2003-2. The downgrade of class B from series 2003-2 reflects adverse collateral performance that has caused monthly losses to exceed excess interest. The affirmations are based on loss coverage percentages that are sufficient to maintain the current ratings. The information below highlights the performance data for the nine series as of the January 2008 remittance period. Performance Data Cum. realized Severe Series losses (i) delinq. (ii) ------ ------------- ------------ 2003-2 1.96% 8.36% 2003-3 3.46% 10.00% 2003-SD1 0.86% 3.27% 2003-SD2 0.79% 5.40% 2004-SD1 0.53% 3.30% 2004-SD2 0.97% 3.99% 2004-SD3 1.11% 5.64% 2004-SD4 0.74% 7.06% 2006-SD4, collat1 0.05% 8.65% 2006-SD4, collat2 0.17% 2.73% 2006-SD4, collat3 0.00% 17.12% (i) As a percentage of original pool balance. (ii) As a percentage of current pool balance. Current pool balance Months Series (orig. pool balance) seasoned ------ -------------------- -------- 2003-2 19.86 53 2003-3 23.45 51 2003-SD1 29.52 52 2003-SD2 19.45 50 2004-SD1 43.16 45 2004-SD2 26.55 44 2004-SD3 44.40 39 2004-SD4 30.60 37 2006-SD4, collat1 75.86 13 2006-SD4, collat2 87.39 13 2006-SD4, collat3 82.17 13 The negative collateral performance trend within series 2003-2 has led to the deterioration of overcollateralization (O/C) and credit support from subordination. Monthly losses for this transaction have been outpacing monthly excess interest in recent months, causing overcollateralization to decline to $3,362,510, or 0.65% of the original pool balance, which is below its target of 0.70% of the original pool balance. As of the January 2008 remittance period, monthly losses for the past three months averaged $335,459, while monthly excess interest for the past three months averaged $168,133. S&P affirmed its ratings on the remaining classes from series 2003-2 and from the other eight series based on loss coverage percentages that are sufficient to maintain the current ratings. Subordination provides credit support for series 2003-SD2, 2004- SD2, and 2006-SD4. Subordination, O/C, and excess spread provide credit support for the other transactions. The collateral for these transactions primarily consists of reperforming, fixed- and/or adjustable-rate first- and second-lien mortgage loans secured by one- to four-family residential properties. Rating Lowered Bear Stearns Asset Backed Securities Trust Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2003-2 B BB BBB Ratings Affirmed Bear Stearns Asset Backed Securities Trust Asset-backed certificates Series Class Rating ------ ----- ------ 2003-2 A-1, A-2, A-3 AAA 2003-2 M-1 AA 2003-2 M-2 A 2003-3 A-IO, A-2 AAA 2003-3 M-1 AA 2003-3 M-2 A 2003-3 B BBB 2003-SD1 A AAA 2003-SD1 M-1 AA 2003-SD1 M-2 A 2003-SD1 B BBB 2003-SD2 I-A, II-A, III-A AAA 2003-SD2 B-1 AA+ 2003-SD2 B-2 A+ 2003-SD2 B-3 BBB 2003-SD2 B-4 BB 2003-SD2 B-5 B 2004-SD1 A-1, A-2 AAA 2004-SD1 M-1 AA 2004-SD1 M-2 A 2004-SD1 M-3 BBB 2004-SD1 B BBB- 2004-SD2 I-A, II-A, III-A AAA 2004-SD2 IV-A AAA 2004-SD2 B-1 AA 2004-SD2 B-2 A 2004-SD2 B-3 BBB 2004-SD2 B-4 BB 2004-SD2 B-5 B 2004-SD3 A-2, A-3, A-4 AAA 2004-SD3 M-1 AA 2004-SD3 M-2 A 2004-SD3 M-3 BBB 2004-SD3 B BBB- 2004-SD4 A-1, A-2 AAA 2004-SD4 M-1 AA 2004-SD4 M-2 A 2004-SD4 B BBB 2006-SD4 1A-1, 1A-2, 1A-3 AAA 2006-SD4 2A-1, 2A-2 AAA 2006-SD4 3A-1, 3A-2 AAA 2006-SD4 X-1, X-2 AAA 2006-SD4 B-1 AA 2006-SD4 B-2 A 2006-SD4 B-3 BBB 2006-SD4 B-4 BB 2006-SD4 B-5 B BLOUNT INT'L: Sept. 30 Balance Sheet Upside-Down by $78.1 Million ----------------------------------------------------------------- Blount International Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $472.4 million in total assets and $550.5 million in total liabilities, and $78.1 million in total stockholders' deficit. The company reported net income of $9.4 million for the third quarter ended Sept. 30, 2007, compared with net income of $15.1 million in the same period of 2006. Sales for the company for the third quarter increased to $166.9 million or 1.7% from last year's third quarter. Sales for the company's Outdoor Products segment increased by 9.5% from last year's third quarter to more than offset a 14.7% decline in the Industrial and Power Equipment Segment. Operating income was $22.6 million in this year's third quarter compared to $18.7 million last year. Last year's third quarter operating income included non-recurring charges of $4.8 million related to the redesign of the company's retirement plans and the closure of a manufacturing facility. Income from continuing operations in this year's third quarter was $9.4 million, compared to $10.1 million in the comparable period last year. This year's income from continuing operations includes income tax expense of $5.7 million compared to an income tax benefit of $640,000 last year, when the company recognized the impact of certain tax planning strategies. Commenting on the company's results, James S. Osterman, chairman and chief executive officer, stated: "Third quarter sales for our Outdoor Products segment increased solidly from last year as we experienced strong growth in key international markets. This top line growth resulted in a slight improvement to segment contribution despite continued margin pressure caused by a further strengthening of the Canadian and Brazilian currencies. We ended the third quarter with a good order backlog in the Outdoor Products segment and expect to continue to experience year over year sales growth through the fourth quarter." Total Debt Total debt at Sept. 30, 2007, was $355.0 million compared to $350.9 million at Dec. 31, 2006. As of Sept. 30, 2007, outstanding debt consisted of a revolving credit facility balance of $32.3 million, a term loan of $147.8 million and senior subordinated notes of $175.0 million. 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?27f2 About Blount International Blount International Inc. (NYSE: BLT) -- http://www.blount.com/-- is a diversified international company operating in two principal business segments: Outdoor Products and Industrial and Power Equipment. The company's Outdoor Products segment provides chain, bars and sprockets to the chainsaw industry, accessories to the lawn care industry and concrete cutting saws. BOHUMIR MARIK: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Bohumir Marik 350 North Pacific Coast Highway Redondo Beach, CA 90277 Bankruptcy Case No.: 08-11715 Chapter 11 Petition Date: February 10, 2008 Court: Central District Of California (Los Angeles) Debtor's Counsel: John Saba, Esq. 13902 Gershon Pl Santa Ana, CA 92705 Tel: (714) 544-1276 Fax: (714) 544-2307 Total Assets: $2,206,450 Total Debts: $2,247,840 The Debtor does not have any unsecured creditors who are not insiders. BOISE CASCADE: Aldabra 2 Stockholders Approve Merger Deal --------------------------------------------------------- Aldabra 2 Acquisition Corp.'s stockholders approved an acquisition of Boise Cascade LLCs packaging and paper manufacturing businesses. The vote to approve the merger took place at Aldabra's special meeting of stockholders. Aldabra anticipates the transaction to close during the last week of February 2008. Aldabra plans to change its name to Boise Inc. and list its common stock and warrants for trading on the New York Stock Exchange under the new symbols BZ and BZ.WS, respectively, upon the consummation of the acquisition. The acquisition is subject to customary closing conditions and the completion of Aldabra's previously announced financing being arranged by Goldman Sachs Credit Partners LP and Lehman Brothers. "We are happy with the performance of the company and the growth prospects of Boise Inc. as a standalone public company," Alexander Toeldte, the designated chief executive officer of Boise Inc., said. "The paper market dynamics remain positive, and our business continues to perform very well." "Additionally, we are beginning to see positive results from the acquisitions and investments we have made over the past 24 months," Mr. Toeldte added. "We are pleased with the momentum we have in the business as we enter the public company arena." About Boise Cascade Based in Boise, Idaho, Boise Cascade Holdings -- http://www.bc.com -- maintains wood and paper products. It manufactures and distributes lumber, plywood, particleboard, and engineered products such as wood I-joists and laminated lumber. It operates nearly 30 wholesale building material distribution centers throughout the US. Boise Cascade also makes and sells office papers, uncoated free sheet papers, envelopes, forms bond, and printing papers, as well as newsprint, market pulp, containerboard, and corrugated containers. It has sold its timberland assets. Formerly part of Boise Cascade Corporation, the company is controlled by private investment firm Madison Dearborn Partners through Forest Products Holdings, LLC. About Aldabra Headquartered in New York, New York, Aldabra 2 Acquisition Corp. (AMEX:AII.U) -- http://www.aldabracorp2.com/-- is a blank check company. The company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition or other similar business combination with an operating business. As of March 19, 2007, Aldabra 2 Acquisition Corp did not have any specific business combination under consideration. BOISE CASCADE: S&P Designates 'BB' Rating on Negative CreditWatch ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its CreditWatch implications on Boise Cascade LLC, including its 'BB' corporate credit rating, to negative from developing. BC's ratings were initially placed on CreditWatch on Sept. 7, 2007, following the company's announcement that it was selling its paper, packaging and newsprint businesses to unrated Aldabra 2 Acquisition Corp. for $1.63 billion. "We have concluded that if the transaction is completed as currently proposed, we would lower BC's corporate credit rating by one notch to 'BB-'," said Standard & Poor's credit analyst Pamela Rice. "The outlook would be negative. The anticipated downgrade reflects our assessment that the legacy BC will have a weaker business risk profile following the transaction, because it will be substantially less diversified." Although BC expects to use the majority of the $1.3 billion of cash it receives to pay down debt, its wood products manufacturing and building products distribution businesses will subject the company to much greater earnings and cash flow volatility. The lower rating would incorporate BC's remaining ownership, which is expected to be 40% to 49%, in Boise Paper Holdings LLC (BB- /Stable/--); however, S&P is not factoring in any cash distributions from Boise Paper in the next year or two. The anticipated negative outlook reflects continuing uncertainties about the depth and duration of the current housing downturn. BC had debt, including debt-like obligations, of $1.4 billion at Sept. 30, 2007. The ratings will remain on CreditWatch until the transaction closes, which is expected by the end of February. If the sale is completed in the manner proposed and proceeds are used as S&P expects, the 'BB+' rating on the $1.18 billion senior secured credit facilities will be withdrawn, and the rating on the company's remaining subordinated notes will be lowered to 'B' from 'B+'. BON-TON STORES: Moody's Cuts Corp. Rating to B2 on 2007 Weak Sales ------------------------------------------------------------------ Moody's Investors Service downgraded the corporate family rating of Bon-Ton Stores Inc. to B2 from B1, downgraded the probability of default rating to B2 from B1, and downgraded the rating on the $510 million senior unsecured notes to Caa1 (LGD 5, 78%) from B3 (LGD 5, 83%). The company's speculative grade liquidity rating of SGL-3 was affirmed. The outlook on all ratings is stable. The downgrade was prompted by Bon-Ton's weak December 2007 sales results, continuing negative comparable store sales trend, and the company's downward EBITDA guidance revision for the fiscal 2007. The company's weaker-than-expected results will result in deterioration of the company's key credit metrics, notably in interest coverage and leverage. This concludes the review for possible downgrade that was initiated on Nov. 19, 2007. These ratings are downgraded: -- Corporate family rating to B2 from B1 -- Probability of default rating to B2 from B1 -- $510 million senior unsecured notes to Caa1 (LGD 5, 78%) from B3 (LGD 5, 83%). These ratings are affirmed: -- Speculative grade liquidity at SGL-3 -- Outlook: Stable Bon-Ton's B2 corporate family rating reflects the company's moderate size, strong presence in secondary markets, and adequate liquidity. However, the ratings are constrained by the company's profit margin levels that are below its industry peer group average and its relatively weak competitive position in the department store industry. Bon-Ton competes with larger and better capitalized retail companies that are reverting to aggressive promotions and clearances in order to shed fall and holiday inventory, gain foot traffic, and maintain appropriate margin levels. Moody's believes that Bon-Ton does not have the scale and market strength to effectively withstand these price wars and maintain credit metrics that are appropriate for its previous rating. Bon-Ton maps to a B1 rating utilizing the rating factors mapped in Moody's Global Retail Rating Methodology - one notch higher than its actual B2 corporate family rating. The one notch variance reflects company's relatively weak competitive position and key credit metrics that are indicative of a B2 rating category. The Bon-Ton Stores, Inc. is a regional department store chain, headquartered in York, Pennsylvania. The company operates 280 stores in 23 Northeastern, Midwestern, and upper Great Plains states under Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, under the Parisian nameplate, stores in the Detroit, Michigan area. Revenues for the last twelve months ended Nov. 3, 2007 were approximately $3.6 billion. CAMPBELL RESOURCES: Nuinsco Provides $1.5 Mil. Revolving Facility ----------------------------------------------------------------- Nuinsco Resources Limited has provided Campbell Resources Inc. with a secured revolving credit facility to a maximum aggregate amount of $1.5 million. Nuinsco has also agreed to purchase and subscribe for 6,000,000 common shares of Campbell, at a price of $0.10 per share, for gross proceeds of $0.6 million. The proceeds of the credit facility and the Campbell Financing will be used by Campbell to fund further development of Campbell's operations in Chibougamau, Quebec, and for working capital purposes. Prior to closing the Campbell Financing, Nuinsco owns 42,250,000 common shares of Campbell, representing 9.77% of the outstanding common shares of Campbell. Nuinsco also currently holds a total of 63,807,429 warrants to purchase common shares of Campbell at $0.10 per share, expiring on Jan. 18, 2009, warrants entitling it to purchase 15,625,000 common shares at $0.15 per share, and a convertible debenture in the principal amount of $2,000,000. The debenture is convertible into units of Campbell at a price of $0.13 per unit. Each unit is exercisable into one common share of Campbell for no additional consideration, and one-half of one common share purchase warrant. Each unit warrant entitles the holder to purchase one common share of Campbell at a price of $0.16 per common share until July 20, 2009. The maximum number of common shares of Campbell issuable to Nuinsco on conversion of the debenture and exercise of its unit warrants is 23,076,922 common shares. If Nuinsco were to exercise all of its convertible securities in Campbell, including full conversion of the debenture into units and exercise of all of the underlying unit warrants, Nuinsco would hold approximately 144,759,351 common shares of Campbell, representing approximately 27.05% of the outstanding common shares of Campbell, calculated on a partially diluted basis assuming the exercise of all of the convertible securities held by Nuinsco only. After giving effect to the Campbell Financing, which is expected to close on or about Feb. 15, 2008, Nuinsco will own 48,250,000 common shares of Campbell, representing approximately 11.0% of the outstanding common shares of Campbell, and convertible securities entitling it to purchase an additional 102,509,351 common shares of Campbell. If, after the closing of the Campbell Financing, Nuinsco were to fully convert the debenture into units and exercise all of the outstanding common share purchase warrants of Campbell then held by it, Nuinsco would own an aggregate of 150,759,351 common shares of Campbell, representing approximately 27.86% of the outstanding common shares of Campbell, calculated on a partially diluted basis assuming the exercise of all of the convertible securities held by Nuinsco only. The Campbell securities held by Nuinsco were acquired for investment purposes. Nuinsco may from time to time acquire additional securities of Campbell, dispose of some or all of the existing or additional securities it holds or will hold, or may continue to hold its current position. In addition to its equity interest in Campbell, Nuinsco owns a 50% carried interest in the high-grade Corner Bay copper project near Campbell's Copper Rand mine and mill in Chibougamau, Quebec. Corner Bay is currently being developed by Campbell. About Campbell Resources Headquartered in Montreal, Quebec, Campbell Resources Inc. (TSX: CCH, OTC BB: CBLRF) -- http://www.ressourcescampbell.com/-- is a mining company focusing mainly in the Chibougamau region of Quebec, holding interests in gold and gold-copper exploration and mining properties. The Superior Court of Quebec (Commercial District) granted the company protection under the CCAA on June 30, 2005. The plans of arrangement presented to the creditors of Campbell Resources Inc., Meston Resources Inc. and MSV Resources Inc., under the Companies' Creditors Arrangement Act, received the required approvals on June 27, 2006, in Chibougamau. The main assets of the company are the Joe Mann Mine, an underground gold mine owned by Meston Resources Inc., a wholly owned subsidiary of the company, the Copper Rand Mine, an underground gold and copper mine owned by MSV Resources Inc., a wholly owned subsidiary of the company, and the Corner Bay Property, located near the Chibougamau Lake in the townships of Lemoine and Obalski, a total of 16 claims, which are held by MSV. The company's properties include Pitt Gold, Berthiaume Syndicate, Chevrier, Gwillim, Joe Mann Mine, Cedar Bay, Copper Rand Mine, Corner Bay, Eastmain and Lac Harbour. The activities of GeoNova Explorations Inc. consist mainly in the acquisition, exploration and development of mining properties. It focuses on exploration in the Province of Quebec and more specifically, in the Abitibi region. About Nuinsco Headquartered in Toronto, Ontario, Nuinsco Resources Limited (TSE:NWI) -- http://www.nuinsco.ca-- is a natural resource company engaged in the acquisition, exploration and development of precious and base metal deposits. Its exploration projects/properties are located in Canada and Turkey. As of March 2007, its interests included a 70% interest in the Diabase Peninsula property located in the Athabasca Basin of northern Saskatchewan; a 100% interest in the Prairie Lake complex located in northwestern Ontario; a 50% interest in the Berta project located in northeastern Turkey; a 100% interest in the Elmalaan property in northeastern Turkey; a 99% interest in the Cameron Lake project located in northwestern Ontario, and an entitlement to a 50% carried interest in the Corner Bay Deposit located in Chibougamau, Quebec. Effective Feb. 1, 2007, Nuinsco spun off its Minago, Mel and Lac Rocher nickel projects to create Victory Nickel Inc. Nuinsco holds an approximate 23% equity interest in Victory Nickel. CATALYST PAPER: Inks Sale of Snowflake Mill With AbitibiBowater --------------------------------------------------------------- AbitibiBowater has signed a definitive agreement with Catalyst Paper Corporation for the sale of its Snowflake, Arizona, assets for cash consideration of $161 million, excluding working capital of approximately $19 million retained by AbitibiBowater. The facility has an annual production capacity of approximately 375,000 tonnes of newsprint. The closing of this transaction is required to comply with the requirements set by the U.S. Department of Justice in October 2007 for approval of the Abitibi-Consolidated/Bowater combination. AbitibiBowater plans to use the proceeds from this sale to repay debt and for general corporate purposes. The sale of the Snowflake mill is subject to customary closing conditions, including a financing contingency which is expected to be satisfied in part by a fully backstopped rights offering. The sale is expected to close in the second quarter. About Catalyst Paper Headquartered in Richmond, Canada, Catalyst Paper Corporation (TSX: CTL) -- http://www.catalystpaper.com-- is a newsprint and specialty ground wood paper producer in North America. The company operates four manufacturing divisions, and one paper recycling division in British Columbia, Canada. The company operates in three business segments: specialty papers, engaged in the manufacture and sale of ground wood specialty printing paper; newsprint, engaged in the manufacture and sale of newsprint, and pulp, engaged in the manufacture and sale of long and short fiber pulp and containerboard. The primary market for the company's paper products is North America. The primary markets for the company's pulp products are Asia, Australasia and Europe. About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH) -- http://www.abitibibowater.com/-- was formed as a result of the combination of Abitibi-Consolidated Inc. and Bowater Incorporated. Pursuant to the transaction, Abitibi-Consolidated Inc. and Bowater Incorporated became subsidiaries of AbitibiBowater. The company produces forest products marketed in more than 80 countries around the world. The company's customers include publishers, commercial printers, retailers, consumer products companies and building supply outlets. AbitibiBowater is also a recycler of newspapers and magazines. The company owns or operates 32 pulp and paper mills and 35 wood products facilities in North America and offshore. The company manages its business in five segments: coated papers, specialty papers, newsprint, market pulp and lumber. CATALYST PAPER: S&P Ratings Unaffected by $161 Million Merger Deal ------------------------------------------------------------------ Standard & Poor's Ratings Services said that the ratings on Catalyst Paper Corp. (B/Negative/--) are unaffected by the acquisition of the Snowflake, Arizona, mill from AbitibiBowater Inc. for $161 million (the merged entities Abitibi-Consolidated Inc. and Bowater Inc. are both rated B/Negative/--). The acquisition improves Catalyst's business risk profile because it will lower newsprint production costs, diversify operations, and reduce the company's exposure to a strong Canadian dollar. All of Catalyst's mills are in B.C. The acquisition should improve leverage modestly as it will be financed by 78% equity and 22% debt. However, it will reduce liquidity under Catalyst's credit facility by CDN$36 million. As of Sept. 30, 2007, the company had CDN$239 million available under its credit facility and no cash on hand. COHR HOLDINGS: Moody's Alters Outlook to Negative; Holds B2 Rating ------------------------------------------------------------------ Moody's Investors Service revised Cohr Holdings, Inc.'s ratings outlook to negative from stable. Concurrently, Cohr's existing ratings, including the B2 Corporate Family Rating, were affirmed. The change of the company's ratings outlook to negative from stable reflects the negative variance from original expectations for operating performance which were set when the ratings were first assigned in February 2007. Sidney Matti, Analyst, stated that, "Cohr's weaker than projected operating performance resulted from lower than anticipated revenues coupled with higher than expected expenses." As a result, the company's credit metrics are weak relative to the B2 rating category. Ratings could experience a downgrade if the metrics were to continue to remain weak resulting from a loss of a major customer and/or continued sluggishness in Cohr's operating performance. The affirmation of the B2 Corporate Family Rating considers the company's highly leveraged position, weak interest coverage, modest size, significant customer concentration, and highly competitive environment. Additionally, the Corporate Family Rating reflects the company's stable free cash flow, high customer retention rate and the lack of direct government reimbursement risk. The ratings outlook was revised to negative from stable. These ratings were affirmed: -- B2 Corporate Family Rating; -- B2 Probability of Default Rating; -- B1 (to LGD3/38% from LGD3/35%) rating on the $20 million Senior Secured Revolver; and -- B1 (to LGD3/38% from LGD3/35%) rating on the $140 million Senior Secured Term Loan. Headquartered in Chatsworth, California, Cohr Holdings, Inc. is a leading independent service organization in the diagnostic imaging and biomedical equipment maintenance and repair services industry. COMMERCIAL MORTGAGE: Stable Performance Cues Fitch to Hold Ratings ------------------------------------------------------------------ Fitch Ratings has affirmed Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 2000-CF1, as: -- $550.5 million class A-1B at 'AAA'; -- Interest-only class S at 'AAA'; -- $44.3 million class A-2 at 'AAA'; -- $37.7 million class A-3 at 'AAA'; -- $13.3 million class A-4 at 'AAA'; -- $31 million class B-1 at 'AAA'; -- $11.1 million class B-2 at 'AAA'; -- $31 million class B-3 at 'A'; -- $8.9 million class B-4 at 'BBB+'; -- $2.2 million class B-5 at 'BBB'; -- $6.6 million class B-6 at 'BBB-'; -- $8.9 million class B-7 at 'B+'; -- $8.9 million class B-8 at 'B-'. Class A-1A has paid in full. Fitch does not rate the $4.7 million class C certificates. Class D has been reduced to zero due to realized losses. The affirmations reflect stable performance since Fitch's last rating action. In total, 46 loans (52.9%) have defeased, including the largest loan (6.8%) and six additional top 10 loans (24%). As of the January 2008 distribution date, the pool has paid down 14.4% to $759 million from $886.2 million at issuance. The weighted average loan size of the 67 remaining non-defeased loans is $5.4 million. In addition, the weighted average loan rate of the non-defeased loans is 8.42%. Finally, 7.5% of the non-defeased loans mature in 2009 while a further 27.4% mature in 2010. Fitch has identified 17 loans (9.5%) as Fitch Loans of Concern. This includes one loan (0.2%) which was transferred to the special servicer in February 2008. Fitch LOC includes specially serviced loans, loans with low debt service coverage ratios and other performance issues. The weighted average interest rate of these LOC is 8.65%. DELPHI CORP: Lenders Have Problems Syndicating $6.1 Billion Loan ---------------------------------------------------------------- Delphi Corp.'s plan to secure $6.1 billion in financing for its exit from Chapter 11 bankruptcy protection is in jeopardy as bank lenders tried to cope with credit markets that remain virtually shut, The Wall Street Journal says, citing people familiar with the matter. J.P. Morgan Chase & Co. and Citigroup Global Markets, which agreed to arrange funding for Delphi, are having difficulties syndicating the loan to other lenders, the Journal's source said. The Journal's Jeffrey McCracken and John D. Stoll relate that hedge funds and other investors dislike the borrowing terms, saying that they aren't priced appropriately for the risk involved. Investors and others involved in the matter say Delphi's former parent, General Motors Corp., may have to step in and provide financing to fill the gap, the Journal relates. Yet too much GM involvement might spook stock investors, who don't want Delphi too beholden to GM and its price-cutting demands, the Journal says. Fritz Henderson, GM's chief financial officer, has said GM is exploring alternatives in the event Delphi cannot obtain the Chapter 11 exit financing it planned, Dow Jones Newswires say. Mr. Henderson, however, didn't give any details on what kind of alternatives GM was exploring with Delphi and its investor group, Dow Jones notes. "Our objective is to have Delphi exit," Mr. Henderson said in an interview, WSJ notes. "What we've tried to do is be constructive with Delphi and the plan-investors as to how we play a role." GM yesterday reported a $722 million fourth-quarter loss, to end the year a staggering $38.7 billion in the red -- believed to be the largest annual loss ever by an auto maker, the Journal's John Stoll reports. GM recorded a $622 million charge associated with its support of Delphi's restructuring efforts as well as $552 million charge for pension benefits provided to Delphi employees and retirees. KeyBanc analyst Brett Hoselton said in a note to investors Tuesday that GM may have to provide financing itself, Dow Jones reports. Delphi could consider trying to get a smaller exit-financing package, but falling U.S. auto sales and lowered forecasts for GM sales in 2008 "probably mean Delphi needs more money, not less," WSJ quotes a person familiar with Delphi's talks with their lenders. "Any logical person would look at the situation in the U.S. economy and say Delphi needs more," that source told WSJ. As reported in the Troubled Company Reporter on Feb. 4, 2008, Delphi and its debtor-affiliates expect to consummate their First Amended Joint Plan of Reorganization on or before March 31, 2008, Delphi Corp. Vice President and Chief Restructuring Officer John D. Sheehan said in a regulatory filing with the U.S. Securities and Exchange Commission. 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. The TCR reported Jan. 30, 2008, that 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 Delphi's bankruptcy cases to participate in any syndicate of lenders assembled to provide exit financing facilities for the Debtors' emergence from Chapter 11. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. 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; 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: Committee Taps Landis Rath as Delaware Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Delta Financial Corp. and its debtor-affiliates' Chapter 11 cases seeks permission from the U.S. Bankruptcy Court for the District of Delaware to retain Landis Rath & Cobb LLP as its Delaware counsel. As Delaware counsel, LRC will: * render legal advice with respect to the powers and duties of the Creditors Committee and the other participants in the Debtors' Chapter 11 cases; * assist the Creditors Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors; the operation of the Debtors' businesses and any other matter relevant to the bankruptcy cases, as and to the extent the matters may affect the Debtors' creditors; * participate in negotiations with parties-in-interest with respect to any disposition of the Debtors' assets, plan of reorganization and disclosure statement in connection with the plan; * prepare all necessary applications, motions, answers, orders, reports and papers on behalf of the Creditors Committee, and appear on behalf of the Creditors Committee at hearings as necessary and appropriate in connection with the bankruptcy cases; * render legal advice and perform all other necessary legal services; and * perform all other legal services in connection with the bankruptcy cases, as may be requested by the Creditors Committee. LRC will be paid according to its customary hourly rates. Two LRC professionals are expected to take a lead role in representing the Creditors Committee in the Debtors' bankruptcy cases: Professional Hourly Rate ------------ ----------- Richard S. Cobb, Esq. partner $475 John H. Strock, Esq. associate $240 LRC will also be reimbursed for any necessary out-of-pocket expenses it incurs while providing legal services to the Creditors Committee. Richard S. Cobb, Esq., at Landis Rath and Cobb LLP, in Wilmington, Delaware, assures the Court that the firm does not represent any interest adverse to the Creditors Committee or the Debtors' estates, and is a "disinterested person" within the meaning of Sections 101(14) and 1103 of the Bankruptcy Code. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The company filed a chapter 11 petition on December 17, 2007 (Bankr. D. Del. Lead Case No. 07-11880). On the same day, three affiliates filed separate chapter 11 petitions -- Delta Funding Corp., Renaissance Mortgage Acceptance Corp., and Renaissance R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to 07-11883). The Debtors selected 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. 7; Bankruptcy Creditors' Service Inc.http://bankrupt.com/newsstand/or 215/945-7000). DELTA FINANCIAL: Committee Taps Weiser LLP as Financial Advisor --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Delta Financial Corp. and its debtor-affiliates' Chapter 11 cases seeks permission from the U.S. Bankruptcy Court for the District of Delaware to retain Weiser LLP as its financial advisor, effective as of Jan. 8, 2008. Silvia L. Spear, managing director of Deutsche Bank Trust Company Americas and chairperson of the Creditors Committee, relates that Weiser has substantial experience in accounting and financial consulting, including turnarounds and bankruptcy; and has participated in numerous Chapter 11 proceedings before the U.S. Bankruptcy Court for the District of Delaware. As financial advisor, Weiser will: (a) review all financial information prepared by the Debtors or its consultants as sought by the Creditors Committee including, but not limited to, a review of Debtors' financial statements as of the filing of the petition, showing in detail all assets and liabilities and priority and secured creditors; (b) monitor the Debtors' activities regarding cash expenditures, receivable collections, asset sales and projected cash requirements; (c) attend meetings including the Creditors Committee, the Debtors, creditors, their attorneys and consultants, and federal and state authorities, if required; (d) review the Debtors' periodic operating and cash flow statements; (e) review the Debtors' books and records for related party transactions, potential preferences, fraudulent conveyances and other potential prepetition investigations; (f) undertake any investigation with respect to the prepetition acts, conduct, property, liabilities and financial condition of the Debtors, their management, creditors including the operation of their business, and as appropriate avoidance actions; (g) review and analyze proposed transactions for which the Debtors seek the Court's approval; (h) assist in a sale process of the Debtors collectively or in segments, parts or other delineations, if any; (i) assist the Creditors Committee in developing, evaluation, structuring and negotiating the terms and conditions of all potential Chapter 11 plans of reorganization, including preparation of a liquidation analysis; (j) analyze claims filed; (k) estimate the value of the securities, if any, that may be issued to unsecured creditors under any plan; (l) provide expert testimony on the results of the firms findings; (m) assist the Creditors Committee in developing alternative reorganization plans, including contacting potential plan sponsors if appropriate; and (n) provide the creditors Committee with other and further financial advisory services with respect to the Debtors, including valuation, general restructuring and advice with respect to financial, business and economic issues, as may arise during the course of the restructuring as sought by the Committee. Weiser will be paid according to their customary hourly rates: Professional Hourly Rate ------------ ----------- Partners & Directors $375 to $540 Managers $275 to $375 Supervisors $225 to $250 Assistants $125 to $225 Paraprofessionals $72 to $132 Weiser will also be reimbursed of the actual and necessary expenses, charges and disbursements it incurs in connection with the services it provides to the Creditors Committee. James Horgan, a partner at Weiser, assures the Court that the firm does not represent any interest adverse to the Creditors Committee or the Debtors' estate, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Delta Financial Founded in 1982, Delta Financial Corporation (NASDAQ: DFC) -- http://www.deltafinancial.com/-- is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. The company filed a chapter 11 petition on December 17, 2007 (Bankr. D. Del. Lead Case No. 07-11880). On the same day, three affiliates filed separate chapter 11 petitions -- Delta Funding Corp., Renaissance Mortgage Acceptance Corp., and Renaissance R.E.I.T. Investment Corp. -- (Bankr. D. Del. Case Nos. 07-11881 to 07-11883). The Debtors selected 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. 7; Bankruptcy Creditors' Service Inc.http://bankrupt.com/newsstand/or 215/945-7000). DOMAIN INC: To Hold Bankruptcy Liquidation Sale ------------------------------------------------ Domain, Inc., dba Domain Home Furnishings will conduct a court- ordered bankruptcy liquidation sale beginning February 13, 2008. The sale was ordered by the U.S. Bankruptcy Court for the District of Delaware as a result of Domain's recent Chapter 11 filing. The value of the inventory to be liquidated is approximately $20 million. The Domain liquidation is being managed jointly by two leading national retail liquidation firms: Hudson Capital Partners, of Newton, Mass., and Great American Group, of Los Angeles. "Domain has been a landmark for consumers who appreciate high quality home design, and the liquidation sale provides a final opportunity to take advantage of this incredible home furnishing resource," noted Hudson Capital Partners co-founder Jim Schaye. The Domain merchandise to be liquidated will include furniture, accessories, decor items, lighting, rugs and other designer products. The sale will involve all Domain store locations in Massachusetts, Connecticut, New Jersey, New York, Pennsylvania, Maryland and Virginia. Following the liquidation sale, which is expected to take several weeks, all of the Domain retail locations will be closed. As reported in the Troubled Company Reporter Feb. 7, 2008, Domain held an auction last week to sell substantially all of its assets. The Boston Globe reported that Domain named Great American Group LLC as lead bidder. Great American offered $5.2 million to buy Domain Home's inventory and liquidate the furniture chain, Boston Globe said. Boston Globe also reported Hudson Capital Partners LLC, was considering bidding for Domain. Hudson Capital chief executive James Schaye has a minority stake in Domain under another company known as Golden Acquisition, where he serves as managing partner, Boston Globe said. Great American would get a $120,000 break-up fee if Domain ultimately sell its assets to another party, according to Boston Globe. Great American would pay about 64 cents on the dollar-cost value of the Debtors' inventory, estimated at $8.5 million, and pay a minimum of $75,000 to bring in additional goods to sell during the liquidation and pay the ongoing cost to run the stores, Boston Globe said, citing Maura Russell, Esq., Dreier LLP, Domain's counsel. Certain owners or operators of regional retail shopping centers leased by the Debtors have objected to the proposed sale of the Debtors' assets. The Taubman landlords want the Debtors to comply with the use clause provision of their leases. They point out that the lease provisions preclude the Debtors from conducting any auction, liquidation, going out of business, fire or bankruptcy sales in the leased premises. They also want the Debtors to cure any existing defaults under the lease, as well as provide proof that any assignee of the lease can adequately perform under the contract and will not disrupt tenant mix. About Hudson Capital Partners, LLC Hudson Capital Partners, LLC offers an extensive array of professional solutions to the challenges retailers face today, including management of excess, obsolete and discontinued inventory, changing geographic and demographic circumstances, unproductive store sites, and real estate and liquidity issues. The firm's diversified staff is experienced at performing strategic store closings and relocations, fixed asset dispositions, wholesale inventory buyouts and lease mitigations. To learn more about Hudson Capital Partners, please visit the firm's Web site at http://www.hudsoncpl.com/ About Great American Group With offices in Los Angeles, Chicago, Boston, New York, Philadelphia, and Atlanta, Great American Group is known for its dominant presence in the asset conversion business. The firm has expertise in the disposition of assets across a diverse range of industries. Additional information is available at http://www.greatamerican.com/ About Domain Inc. Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com -- http://www.domain-home.com/-- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. The Debtor and its affiliate, Domain Home Holding Co., LLC, filed for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case Nos. 08-10132 and 08-10133). J. Kate Stickles, Esq., and Mark Minuti, Esq., at Saul Ewing LLP represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets and debts between $10 million and $50 million. The Debtors have disclosed that $4,900,000 was outstanding on a secured revolving credit loan. DOMAIN INC: Taps Dreier LLP as General Bankruptcy Counsel --------------------------------------------------------- Domain Inc. and its debtor-affiliate ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Dreier LLP as their general counsel, nunc pro tunc to Jan. 18, 2008. As the Debtors' general counsel, Dreier LLP will: a) provide legal advice with respect to their powers and duties as debtors-in-possession in the continued operation of their businesses; b) prepare and pursue confirmation of a plan of reorganization or liquidation and aproval of a disclosure statement; c) prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports and oher legal papers; d) appear in Court to represent and protect the interests of the Debtors; e) provide assistance, advice and representation concerning any further investigation of the assets, liabilities and financial condition of the Debtors that may be required; f) advise the Debtors with respect to procedures for the liquidation and wind-down of the business in a manner designed to maximize the value of the Debtors' assets, and implementing such procedures with the approval of the Court. g) represent the Debtors in any adversary proceeding; and h) perform all other legal services for the Debtors that may be necessary and appropriate for the efficient and economical administration of these chapter 11 cases. The firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $525 - $750 Associates $265 - $360 Paraprofessionals $150 - $200 Prior to Jan. 18, 2008, Dreier received $316,250 from the Debtors in connection with the preparation of the Debtors' bankruptcy filing. A part of this payment, estimated at $150,000, has been applied to outstanding balances. The remainder will constitute a general retainer. Steven E.Fox, Esq., a member of Dreier LLP, assures the Court that the firm does not represent any interest adverse to the Debtor or its estate, and that the firm is a "disinterested" person as that term is defined in section 101(14) of the Bankruptcy Code. Mr. Fox can be contacted at: Steven E. Fox, Esq. Dreier LLP 499 Park Avenue New York, New York 10022 Tel: (212) 328-6100 Fax: (212) 328-6101 http://www.dreierllp.com/ About Domain Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com, -- http://www.domain-home.com/ -- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. The Debtor and its affiliate, Domain Home Holding Co., LLC, filed for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case Nos. 08-10132 and 08-10133). J. Kate Stickles, Esq., and Mark Minuti, Esq., at Saul Ewing LLP, are the Debtors proposed local counsel. When the Debtors filed for bankruptcy, they listed assets and debts between $10 million and $50 million. DOMAIN INC: Taps Saul Ewing as Delaware Bankruptcy Counsel ---------------------------------------------------------- Domain Inc. and its debtor-affiliate ask permission from the U.S. Bankruptcy Court for the District of Delaware to employ Saul Ewing LLP as their Delaware bankruptcy counsel, nunc pro tunc to Jan. 18, 2008. As the Debtors' Delaware counsel, Saul Ewing will: a) provide legal advice with respect to the Debtors' powers and duties as debtors-in-possession in the continued operation of their business; b) prepare and pursue confirmation of a plan of reorganization or liquidation and approval of a disclosure statement; c) prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports and other legal papers; d) appear in Court to represent and protect the interests of the Debtors; e) provide assistance, advice and representation concerning any further investigation of the assets, liabilities and financial condition of the Debtors that may be required; f) advise the Debtors with respect to procedures for the liquidation and wind-down of the business in a manner designed to maximize the value of the Debtors' assets, and implement such procedures with the approval of the Court; g) represent the Debtors in any adversary proceeding; and h) perform all other legal services for the Debtors that may be necessary and appropriate for the efficient and economical administration of these chapter 11 cases. Mark Minuti, Esq., a partner at Saul Ewing LLP, tells the Court that the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $335 - $750 Special Counsel $250 - $440 Associates $195 - $360 Paraprofessionals $100 - $215 Prior to Jan. 18, 2008, Saul Ewing received a retainer in the amount of $62,500 for the preparation of the Debtors' bankruptcy cases. Of this amount $22,563 was applied to outstanding prepetion balances, including $2,078 for the petition filing fees. The balance of the retainer will be applied against post-petition services rendered, subject to Court approval. Mr. Minuti assures the Court that Saul Ewing does not represent any interest adverse to the Debtor or its estate, and that the firm is a "disinterested" person as that term is defined in section 101(14) of the Bankruptcy Code. Mr. Minuti can be contacted at: Mark Minuti, Esq. Saul Ewing LLP 222 Delaware Avenue Suite 1200 P.O. Box 1266 Wilmington DE 19899 Tel: (302) 421-6800 Fax: (302) 421-6813 http://www.saul.com/ About Domain Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com, -- http://www.domain-home.com/ -- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. The Debtor and its affiliate, Domain Home Holding Co., LLC, filed for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case Nos. 08-10132 and 08-10133). Dreier LLP is the Debtors' proposed general counsel. When the Debtors filed for bankruptcy, they listed assets and debts between $10 million and $50 million. DOMAIN INC: U.S. Trustee Appoints 7-Member Creditors Committee -------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, appoints seven members to the Official Committee of Unsecured Creditors in Domain Inc. and its debtor-affiliates' bankruptcy cases. The Creditors Committee members are: 1. McCreary Modern Inc. Attn: Rickie Eugene Coffey P.O. Box 130 2564 Hwy. 321 S., Newton NC 28658 Tel. No.: (828) 464-6465 Fax. No.: (828) 464-6468 2. Artistica Metal Designs Inc. Attn: Beverly Gucciard 3200 Golf Course Drive Ventura CA 93003 Tel. No.: (805) 850-1111 Fax. No.: (805) 850-1112 3. Southern Furniture of Conover Attn: Phillip Webster Wilson P.O. Box 307 Conover NC 28613 Tel. No. (828) 464-0311 Fax. No. (828) 464-0460 4. Nourison Rug Corp. Attn: Jonathan Stern 5 Sampson Street Saddle Brook NJ 07663 Tel. No. (201) 368-6900 ext. 246 Fax. No. (201) 226-7272 5. Concord Litho Group Inc. Attn: Peter E. Cook 92 Old Turnpike Road Concord NH 03301 Tel. No. (603) 225-3328 Fax. No. (603) 224-1211 6. The Taubman Company LLC Attn: Andrew S. Conway Vice President, Senior Counsel 200 East Long Lake Road Suite 300 Bloomfield Hills MI 48304 Tel. No. (248) 258-7427 Fax. No. (248) 258-7586 7. General Growth Properties Inc. Attn: Julie Minnick Bowden 110 N. Wacker Drive Chicago IL 60606 Tel. No. (312) 960-2707 Fax. No. (312) 442-6374 About Domain Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com, -- http://www.domain-home.com/ -- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. About Domain Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com, -- http://www.domain-home.com/ -- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. The Debtor and its affiliate, Domain Home Holding Co., LLC, filed for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case Nos. 08-10132 and 08-10133). Dreier LLP is the Debtors' proposed general counsel. J. Kate Stickles, Esq., and Mark Minuti, Esq., at Saul Ewing LLP are the Debtors proposed local counsel. When the Debtors filed for bankruptcy, they listed assets and debts between $10 million and $50 million. DOMAIN INC: Section 341(a) Creditors' Meeting Set for Feb. 26 ------------------------------------------------------------- The United States Trustee for Region 3 will convene a meeting of Domain Inc.'s creditors at 10:00 a.m., on Feb. 26, 2008, at the office of the United States Trustee at: 833 Chestnut Street Suite 500 Philadelphia, PA 19107 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. About Domain Norwood, Massachussetts-based Domain Inc., dba Domain Home/Domain Home Furnishings/Domain-Home.com, -- http://www.domain-home.com/ -- operate a chain of 27 home furnishing stores across seven states in the Northeast and Mid-Atlantic regions of the US, including suburbs of major metropolitan markets such as Boston, New York, Philadelphia and Washington, D.C. The Debtor and its affiliate, Domain Home Holding Co., LLC, filed for chapter 11 bankruptcy on Jan. 18, 2008 (Bankr. D. Del. Case Nos. 08-10132 and 08-10133). Dreier LLP is the Debtors proposed general counsel. J. Kate Stickles, Esq., and Mark Minuti, Esq., at Saul Ewing LLP, are the Debtors' proposed local counsel. When the Debtors filed for bankruptcy, they listed assets and debts between $10 million and $50 million. DURANT CDO: Moody's Gives Junk Ratings on Four Classes of Notes --------------------------------------------------------------- Moody's Investors Service downgraded ratings of five classes of notes issued by Durant CDO 2007-1, Ltd., and left on review for possible further downgrade ratings of one of these classes of notes. The notes affected by this rating action are: Class Description: $280,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $48,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $36,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $5,000,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $25,000,000 Class D Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2052 -- Prior Rating: B3, 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 the Class A Overcollateralization Ratio falling below 100% pursuant to Section 5.1(i) of the Indenture dated June 7, 2007. This event of default is still continuing. Durant CDO 2007-1, Ltd. is a collateralized debt obligation backed primarily by a portfolio of CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard the Trustee reports that a majority of the Controlling Class has declared the principal of and accrued an unpaid interest and Commitment Fee on all of the Notes to be immediately due and payable. Furthermore, according to the Trustee a majority of the Class A Notes (voting as a single class) has directed the Trustee to commence the process of the sale and liquidation of the Collateral in accordance with relevant provisions of the transaction documents. 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 outcome of the liquidation. Because of this uncertainty, the ratings assigned to the Class A-1 Notes remain on review for possible further action. ENCORE ACQUISITION: Completes Sale of Oil Properties to OLLC ------------------------------------------------------------ Encore Acquisition Company disclosed in a regulatory filing on Feb. 7, 2008, that Encore Operating has completed the sale of oil and natural gas producing properties in the Permian and Williston Basins to Encore Energy Partners Operating LLC, a wholly owned subsidiary of Encore Energy Partners LP, pursuant to the terms and conditions of a Purchase and Investment Agreement among OLLC, Encore Energy Partners LP and Encore Operating. As reported in the Troubled Company Reporter on Jan. 7, 2008, the purchase price for the properties was approximately $250 million, consisting of approximately $125.4 million in cash and approximately 6.88 million common units representing limited partner interests in Encore Energy Partners LP. OLLC financed the cash portion of the purchase price through additional borrowings under its revolving credit facility. The common units were issued pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. Each of the parties to the Purchase Agreement is a direct or indirect subsidiary of Encore Acquisition Company. As a result, certain officers of EAC serve as officers and/or directors of more than one of such entities. After the transaction, EAC and its affiliates, including Encore Operating, own approximately 20.92 million of Encore Energy Partners LP's outstanding common units, or approximately 67% of common units outstanding. EAC, through its indirect ownership of Encore Energy Partners LP's general partner, also holds 504,851 general partner units in Encore Energy Partners LP. About Encore Energy Partners With principal executive offices in Fort Worth, Texas, Encore Energy Partners LP was recently formed by Encore Acquisition Company to acquire, exploit and develop oil and natural gas properties and to acquire, own and operate related assets. Encore Energy Partners' assets consist primarily of producing and non- producing oil and natural gas properties in the Elk Basin of Wyoming and Montana and the Permian Basin of West Texas. About Encore Acquisition Headquartered in Fort Worth, Texas, Encore Acquisition Company (NYSE: EAC) -- http://www.encoreacq.com/-- is an independent energy company engaged in the acquisition, development and exploitation of North American oil and natural gas reserves. Organized in 1998, Encore's oil and natural gas reserves are in four core areas: the Cedar Creek Anticline of Montana and North Dakota; the Permian Basin of West Texas and Southeastern New Mexico; the Mid Continent area, which includes the Arkoma and Anadarko Basins of Oklahoma, the North Louisiana Salt Basin, the East Texas Basin and the Barnett Shale; and the Rocky Mountains. * * * Moody's Investors Service confirmed Encore Acquisition Co.'s Ba3 corporate family rating, Ba3 probability of default rating, and B1 senior subordinated note rating in June 2007. The rating still holds to date. ENESCO GROUP: Plan Confirmation Hearing Deferred to February 13 --------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Illinois continued to Feb. 13, 2008, at 10:00 a.m. the hearing to consider confirmation of Enesco Group, Inc. and its debtor- affiliates' Second Amended Chapter 11 Plan of Liquidation. The hearing will be held at 219 South Dearborn, Courtroom 613 in Chicago, Illinois. As reported in the Troubled Company Reporter on Jan. 23, 2008, the Court previously set Jan. 30, 2008, to consider confirmation of the Debtors' amended Chapter 11 plan. Overview of the Plan The Debtors related that the Plan proposes to liquidate the remaining assets of the Debtors and distribute the proceeds to the holders of the allowed claims. The principal source of the distributions will be: a) cash on hand as of the effective date of the Plan; b) proceeds from the Debtors' lender settlement; c) proceeds and tax refunds arising out of the resolution of the Hong Kong Tax Dispute; d) proceeds from the Contingency Litigation Agreement; and e) Litigation Trust Proceeds. Summary Treatment of Claims Under The Plan The Plan proposes that all holders of allowed administrative claims, allowed priority claims, other than the Internal Revenue Service, and the allowed non-tax priority claims will have their allowed claims paid in full on or about the effective date of the plan from the proceeds of the Lender Settlement. In addition, within 60 days of the effective date, general unsecured creditors will receive their pro-rate share of $480,000 from the proceeds of the Lender Settlement. The Debtors say that general unsecured creditors are expected to receive 27% of their claims. Unsecured creditors will further be entitled to receive additional future distribution. Within the same time frame, the Internal Revenue Service will receive $650,000 from the proceeds of the Lender Settlement and will be entitled to receive additional future distribution. Additional contributions, the Debtors say, are however, contingent on future recoveries by the Debtors and are not guaranteed. The Contingency Litigation Trust, the Debtors add, are also not guaranteed. Summary Creditor Treatment if Plan is Not Confirmed The Debtors tell the Court that if the Plan is not confirmed, then they are not substantively consolidated for purposes of the Plan or their cases are converted to ones under Chapter 7 of the Bankruptcy Code. At the conclusion of the Chapter 7 cases, administrative claims will still be paid in full. However, tax priority claims holders will only receive 4.9% of their claims. General Unsecured Creditors on the other hand, will receive nothing. The Debtors reveal that the primary reasons for the significantly smaller distributions under this scenario are: 1) the proceeds and other benefits from the: -- Lender Settlement; -- the Contingency Litigation Agreement; and -- the resolution of the Hong Kong Tax Dispute, will be substantially compromised or lost, resulting in a significantly smaller recovery by the Debtors' estates; and 2) there will be additional administrative costs if the Plan is not confirmed. About Enesco Group Based in Itasca, Illinois, Enesco Group, Inc. -- http://www.enesco.com/-- is a producer of giftware, and home and garden decor products. Enesco's product lines include some of the world's most recognizable brands, including Disney, Heartwood Creek, Nickelodeon, Cherished Teddies, Lilliput Lane, Border Fine Arts, among others. Enesco distributes products to a wide array of specialty gift retailers, home decor boutiques and direct mail retailers, as well as mass-market chains. The company serves markets operating in Europe, particularly in the United Kingdom and France, as well in the Asia Pacific in Australia and Hong Kong. The company also has Latin-American operations in Mexico. Enesco Group and its two affiliates, Enesco International Ltd. and Gregg Manufacturing, Inc., filed for chapter 11 protection on Jan. 12, 2007 (Bankr. N.D. Ill. Lead Case No. 07-00565). Shaw Gussis Fishman Glantz Wolfson & Tow and Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors. Epiq Bankruptcy Solutions, LLC, acts as the Debtors' claims and noticing agent. Adelman & Gettleman Ltd. represents the Official Committee of Unsecured Creditors as bankruptcy counsel. In schedules of assets and debts filed with the Court, Enesco disclosed total assets of $61,879,068 and total debts of $231,510,180. ETHANEX ENERGY: Inks $220 Mil. Purchase Deal w/ Midwest Renewable ----------------------------------------------------------------- Ethanex Energy Inc. has signed a definitive asset purchase agreement with Midwest Renewable Energy LLC to acquire Midwest's ethanol plant, located in Sutherland, Nebraska, for $220 million in cash and Ethanex stock, subject to various adjustments as specified in the agreement. Ethanex and Midwest entered into a non-binding letter of intent for this transaction in late November 2007. Under the agreement, several newly formed, subsidiaries of Ethanex will acquire substantially all of the assets, and assume certain liabilities, of Midwest in a series of three transactions. At a first closing, Ethanex will acquire the existing ethanol plant for $50 million in cash. The existing plant, which has a production capacity of 26 million gallons per year, is undergoing a two-phase expansion. Each expansion phase is designed to add an additional 42.5MGY of production capacity, for a total projected plant capacity of 111MGY. At each of the three closings Ethanex will receive $2 million of inventory which is included in the purchase price. Ethanex will build and add its integrated fractionation platform, developed in collaboration with Buhler Inc., to the plant. The agreement contemplates that the fractionation platform will commence operation at the time Ethanex acquires the first expansion phase of the Sutherland plant, estimated to occur during the last quarter of 2008. Ethanex estimates that the fractionation platform will enable total plant capacity to be approximately 132MGY upon completion of the project. Co-products will include high-protein distiller's grains, food-grade crude corn oil well as corn gluten feed. After the initial closing, Midwest will be responsible for continuing and completing the two-phase plant expansion. In two subsequent closings, Ethanex will acquire each of the expansion phases. The second and third closings are subject to testing and certification of the plant expansions in accordance with construction and performance specifications contained in the Agreement that were established by Ethanex and agreed to by Midwest. Ethanex will pay Midwest $60 million in cash and $25 million in Ethanex common stock at each of the second and third closings. If Midwest fails to complete the plant expansions for any reason, Ethanex has the option to do so at its cost, in which case the amount payable to Midwest under the Agreement will be reduced by Ethanex's completion costs plus a penalty to Midwest of 5-10% of those costs. It is estimated that the final closing will occur in the first quarter of 2009. Ethanex's ability to consummate the acquisition is subject to its receipt of bridge financing sufficient to permit it to continue operating through the first closing under the agreement, which is expected to occur early in the second quarter of 2008. Ethanex estimates that it will need at least $1.5 million of interim financing to continue operating into the second quarter. Additional funding would be needed if the first closing is delayed. Although Ethanex is in discussions with several parties regarding such interim financing, it has no commitments and cannot assure that it will be able to obtain the needed financing on reasonable terms or at all. The agreement is terminable after March 5, 2008, by either Ethanex or Midwest if Ethanex has not obtained bridge financing of at least $1.5 million by that date. If Ethanex is unable to obtain interim financing by March 5, 2008, it anticipates that it will be unable to proceed with the transaction, will need to cease operations and will be required to file for bankruptcy protection. Each of the three closings is subject to various closing conditions, including receipt by Ethanex of financing for the cash portion of the purchase price payable at each closing and for construction of the fractionation platform, well as other customary conditions. Ethanex does not presently have commitments for the required financing, and there is no assurance that Ethanex will be able to secure any or all of such financing. Ethanex estimates that total financing needs for these transactions, including a $20 million working capital line, will be approximately $263 million. The initial closing also is subject to approval of Ethanex's stockholders of an amendment to Ethanex's certificate of incorporation to increase the number of authorized shares of capital stock of Ethanex, well as receipt of regulatory approvals and other third-party consents. Under the terms of the Agreement, if Ethanex is unable to obtain sufficient financing for either the second or the third closings, assuming all other conditions to closing are then satisfied, Midwest and Ethanex will operate the plant through a joint venture, under terms specified in the Agreement. Ownership of the joint venture will be in proportion to the parties' respective investments in the project, with Ethanex's investment being discounted by 10% for failure to obtain sufficient financing, subject to certain adjustments specified in agreement. About Midwest Renewable Energy LLC Headquartered in Sutherland, Nebraska, Midwest Renewable Energy LLC -- http://www.mreethanol.com/-- operates a dry-mill ethanol plant. The plant generates fuel-grade ethanol via natural fermentation and distillation of corn, primarily for blending with gasoline and other motor fuels. The facility, approximately one mile east of Sutherland, was originally constructed in 1991 by Nebraska Nutrients Inc. Nebraska Nutrients utilized a modified wet milling concept as the basis for its process technology. The plant never operated to expectations. About Ethanex Energy Headquartered Basehor, Kansas, Ethanex Energy (OTCBB: EHNX) -- http://www.ethanexenergy.com-- is a renewable energy company whose mission is to be the lowest cost producer of renewable energy by employing advanced technology in design, construction and operation of ethanol plants. The company expects to achieve this industry position through the application of next-generation feedstock technologies and use of alternative energy sources. Ethanex Energy is currently developing two ethanol production facilities located in the mid-west, with a combined production capacity of approximately 264 million gallons of ethanol per year. Ethanex Energy is concentrating its geographic focus in areas that allow access to abundant supplies of corn, alternative energy sources, transportation infrastructure and the potential for expedited permitting. Ethanex Energys acquisition and brownfield development strategies afford it rapid capacity development with significant operating cost advantages. Ethanex Energy has offices in Santa Rosa, California and Charleston, South Carolina. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 29, 2007, Bagell, Josephs, Levine & Company LLC in Gibbsboro, New Jersey, expressed substantial doubt about Ethanex Energy's ability to continue as a going concern after auditing the company's financial statements for the year ended July 31, 2006. The auditors noted that the company incurred losses since inception and further losses are anticipated in the development of its business. FINLAY ENTERPRISES: 94 Stores Closes Due to Macy's Restructuring ---------------------------------------------------------------- Finlay Enterprises, Inc. reported that 94 of its total 316 Macy's, Inc. locations will not be renewed upon expiration of the license agreements on Jan. 31, 2009. This development results from the corporate restructuring initiatives of Macy's, Inc. disclosed on Feb. 6, 2008. Macy's, Inc. related that three divisional changes including the consolidation of Macy's North into Macy's East, Macy's Northwest into Macy's West, and Macy's Midwest into Macy's South. The consolidation of Macy's North as well as that of Macy's Northwest, will result in the non-renewal of license agreements with Finlay and the loss of 57 doors and 37 doors, respectively. Macy's has notified Finlay of its intent to renew the license agreements for the newly-merged division of Macy's Midwest and Macy's South which consists of 222 doors. In fiscal 2007, the Macy's North and Macy's Northwest locations generated approximately $120 million in combined revenue for Finlay. The total revenue generated from all of the Macy's locations in fiscal 2007 was approximately $338 million. Finlay is currently evaluating the impact of the expected closings on its financial results for fiscal 2008 and beyond. "While we are disappointed with the prospect of losing a portion of our Macy's business in January 2009, we will retain 222 Macy's locations and all of our Bloomingdales locations," Arthur E. Reiner, Chairman and Chief Executive Officer of Finlay Enterprises, Inc. commented. "We have been able to diversify our business over the last three years by entering into the luxury free-standing specialty jewelry sector. The luxury market continues to be one of the most attractive segments of the jewelry industry despite ongoing challenges in the macro economy. We will continue to focus on expanding in this area, while concentrating on maximizing the return of our existing lease business." Headquartered in New York City, Finlay Enterprises Inc. (Nasdaq: FNLY) -- http://www.finlayenterprises.com/-- through its wholly- owned subsidiary, Finlay Fine Jewelry Corporation, retails fine jewelry and operates luxury stand-alone specialty jewelry stores primarily located in the southeastern United States and licensed fine jewelry departments in department stores throughout the United States. The number of locations at the end of fiscal 2007 totaled 794, including 69 Bailey Banks & Biddle, 32 Carlyle and five Congress specialty jewelry stores. FINLAY ENTERPRISES: Quarter Sales Increase 24.1% to $383.4 Mil. --------------------------------------------------------------- Finlay Enterprises, Inc. disclosed its fourth quarter and full year sales results for the fiscal year ended Feb. 2, 2008. The sales for the fourth quarter of 2006 include an extra week resulting in a fifty-three week fiscal year. Sales for the fourth quarter increased 24.1% to $383.4 million compared to $309.0 million in the comparable period of 2006. The sales results are on a continuing operations basis, which excludes sales from discontinued Macy's, Belk's and Parisian stores. Specialty jewelry stores consisting of Carlyle, Congress, and Bailey Banks & Biddle, which was acquired in November 2007, contributed sales of $146.1 million for the fourth quarter, as compared to $51.6 million for the same period last year. Comparable store sales (stores open for the same months during the comparable period) for the fourth quarter decreased 6.4% on a continuing operations basis. On a continuing operations basis, fiscal 2007 sales increased 13.1% to $836.2 million compared to $739.0 in fiscal 2006. Specialty jewelry stores contributed sales of $223.9 million in 2007 as compared to $108.1 million in 2006. Comparable store sales in 2007 decreased 1.4% on a continuing operations basis. Including discontinued stores, comparable store sales in 2007 decreased 1.0%. The company currently expects to report full financial results on March 20, 2008. Headquartered in New York City, Finlay Enterprises Inc. (Nasdaq: FNLY) -- http://www.finlayenterprises.com/-- through its wholly- owned subsidiary, Finlay Fine Jewelry Corporation, retails fine jewelry and operates luxury stand-alone specialty jewelry stores primarily located in the southeastern United States and licensed fine jewelry departments in department stores throughout the United States. The number of locations at the end of fiscal 2007 totaled 794, including 69 Bailey Banks & Biddle, 32 Carlyle and five Congress specialty jewelry stores. FINLAY ENT: Closure of 94 Stores Won't Affect S&P's 'B-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that the closure of 94 stores due to the consolidation of Macy's divisions will have no immediate impact on Finlay Enterprises' (Finlay; B-/Negative/--) rating or outlook. Pro forma the closure, S&P estimates the EBITDA loss to be approximately $4 million and that interest coverage will be less than 1x. Finlay entered into a new $500 million revolving credit facility in November 2007 with the only financial covenant that the company maintains a minimum availability of $30 million. S&P expects the company to maintain liquidity through borrowings under its revolver, a reduction in its capital expenditures, and liquidation of excess inventory from these 94 doors. S&P believes that sufficient liquidity exists for Finlay over the next 12 months; however, the loss of additional doors or a severe downturn in operations could significantly impair the company's liquidity position. FIRSTLINE SECURITY: Section 341(a) Meeting Slated for February 28 ----------------------------------------------------------------- The U.S. Trustee for Region 19 will convene a meeting of creditors in Firstline Security Inc.'s Chapter 11 case, on Feb. 28, 2008, at 9:00 a.m., at 405 South Main, Salt Lake City, Utah. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Orem, Utah, Firstline Security Inc. -- http://www.getfirstline.com/-- aka First Line Security and 1st- Line Security provides telecommunications services. The Debtor filed for Chapter 11 protection on Jan. 25, 2008, (Bankr. D. Utah Case No.: 08-20418.) Adam S. Affleck, Esq. of Prince Yeates & Geldzahler represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $10 million to $50 million. FIRST MAGNUS: Arizona Bank Wants WNS Subpoena Quashed ----------------------------------------------------- The National Bank of Arizona asks the U.S. Bankruptcy Court for the District of Arizona to quash the subpoena served by WNS North America Inc., and to issue a protective order denying discovery from the bank. The National Bank of Arizona tells the Court that WNS failed to explain the relevance of the information WNS requested. "WNS failed to describe the relationship of the interrogatories to plan confirmation or the administration of the bankruptcy case. In addition, the discovery seeks privileged information which is not subject to discovery," says Sally M. Darcy, Esq., at McEvoy, Daniels & Darcy PC, in Tucson, Arizona. According to Ms. Darcy, the National Bank of Arizona could easily and readily obtained from the Debtor and its officers and directors most of the information requested by WNS, pointing out that Debtor knows who it did business with the National Bank of Arizona, and its officers can testify about who they know at the bank. "In fact, this was the bank's suggestion to WNS before it commenced taking the depositions of the Debtor's officers and the proposed Litigation and Liquidation Trustees," Ms. Darcy points out. She adds that WNS has failed to identify specific officers of the bank or a time frame for any personal, social or business relationships, or the relevance of these relationships to date. WNS' Objection to Plan As reported in the Troubled Company Reporter on Feb. 11, 2008, various parties balked at confirmation of First Magnus' chapter 11 plan of liquidation, including WNS. WNS North America Inc., tells the Court that First Magnus' chapter 11 plan of liquidation does not qualify for confirmation of Section 1129 of the Bankruptcy Code. Nancy J. March, Esq., at DeConcini McDonald Yetwin & Lacy PC, in Tucson, Arizona, says that the classification of Rejection Damages Claims (Class 4) separate and distinct from other general Unsecured Claims, and the creation of Class 8 under the Debtor's Plan violate Section 1122(a) and Section 1122(b). Accordingly, WNS asks the Court to determine that the plan does not qualify for confirmation, and to convert the case to one under chapter 7. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan commenced on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Executives Plan New Mortgage Company -------------------------------------------------- Executives from First Magnus Financial Corporation are starting a new mortgage company, according to a report by the Arizona Daily Star. Arizona Daily Star reported that based on Online records for the Arizona Corporation Commission, the commission approved a certain company, Stonewater Mortgage Corp., and three related corporations on Jan. 31, 2008, and Feb. 1, 2008, some of which have ties to a Delaware holding company, and one lists the name of Karl F.W. Young, former chief operating officer of the Debtor. A domain-registry database also shows the Web address http://www.Stonewatermortgage.com/has been reserved by Gforce-1, a partnership formed by President and Chief Executive Officer Gurpreet S. Jaggi, and Mr. Young, Arizona Daily Star further reported. At a bankruptcy hearing on Feb. 7, 2008, Mr. Jaggi said that it is too early to discuss the plans for new companies. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan commenced on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Inks Settlement to Countrywide's Objection to Plan ---------------------------------------------------------------- First Magnus Financial Corporation, Countrywide Warehouse Lending, and Countrywide Home Loans, Inc., entered into a stipulation resolving any objection by Countrywide to the confirmation of the Debtor's Chapter 11 Plan of Liquidation. The Parties have agreed that by entering into the stipulation, Countrywide changes its votes on the Plan from "reject" to "accept" and agrees to support confirmation of the Plan. The stipulation, entered into on Feb. 6, 2008, specifically provides that: (1) No later than March 1, 2008, the Debtor will remit to CWL all Warehouse Loan Funds then held by the Debtor. All Warehouse Loan Funds remitted will remain subject to disgorgement by CWL pending a determination of the Allowed amount of the CWL Claim for $28,995,462. (2) From March 1, 2008 until the Allowed the Allowed amount of the CWL Claim has been determined and paid in full, The Debtor will remit to CWL all Warehouse Loan Funds, as and when received by the Debtor. All Warehouse Loan Funds remitted to CWL will remain subject to disgorgement by CWL pending a determination of the Allowed amount of the CWL Claim. (3) Until April 1, 2008, the Debtor should continue to perform all Servicing functions for the Warehouse Loans other than the Warehouse Loans transferred to CWL before April 1, 2008. From this date, the Debtor will transfer the Servicing of the remaining Warehouse Loans to CWL pending the liquidation or other commercially reasonable disposition of the Warehouse Loans by the Debtor or CWL in accordance with the Stipulation. All Warehouse Loan Funds received by CWL in connection with the Servicing of the Warehouse Loans should be applied by CWL toward the payment of the CWL Claim upon allowance. All Warehouse Loan Funds received by CWL should remain subject to disgorgement by CWL pending a determination of the Allowed amount of the CWL Claim. (4) For a period of six months from Feb. 6, 2008, the Debtor will sell or otherwise dispose of the Warehouse Loans in a commercially reasonable manner for prices at or above the then prevailing market rates for the assets. (5) Starting March 1, 2008, the Debtor and CWL will confer to which of the remaining Warehouse Loans, by mutual agreement, the Debtor does not have a reasonable prospect of selling or otherwise disposing of prior to the end of the six-month period. The Debtor will transfer all the Warehouse Loans to CWL , with transfer to occur within 21 days of the date of the mutual agreement, to be liquidated by CWL. (6) After the transfer of the Warehouse Loans to CWL, the Debtor will have no further obligation to contact borrowers under the Warehouse Loans regarding "work out" efforts related to the Warehouse Loans, unless CWL specifically requests the assistance from the Debtor, and all parties agree on acceptable terms under which the assistance would be provided. (7) Upon the transfer of any Warehouse Loan, CWL will have the right to exercise its rights and remedies pursuant to the Warehouse Agreement to liquidate or dispose of the Warehouse Loan. (8) From and after Feb. 6, 2008, CWL will continue to hold all of the Debtor's Magnus' funds in the Over/Under Account pending the determination of the Allowed amount of the CWL Claim and the CHL Claim, and the disposition of the Debtor's funds in the Over/Under Account. The parties reserve all of their respective rights, remedies, claims and objections with respect to the disposition of all of the Debtor's funds in the Over/Under Account. (9) The Debtor and its successors reserve all of their rights, remedies, claims, and defenses against CWL and CHI. (10) After the sale or other disposition of all of the Warehouse Loans and the determination of the Allowed amount of the CWL Claim, CWL will remit any excess Warehouse Loan Funds to the Debtor within three days in cash or readily available certified funds. If the amount of Warehouse Loan Funds received by CWL is less than the Allowed amount of the CWL Claim, CWL reserves the right to pursue payment of the amount from any other collateral securing the CWL Claim. (11) On March 1, 2008 and thereafter, the Debtor will remit to CHI, any and all payment, payoffs or other proceeds received by the Debtor on and after the bankruptcy filing on account of loans previously purchased by CHL under the Loan Purchase Agreement or the EPP Addendum. The Debtor asserts that the current balance owed under the Loan Purchase Agreement and the EPP Addendum is zero and that it currently is not holding any payments received after the bankruptcy filing on account of loans previously purchased by CHI under the Loan Purchase Agreement or the EPP Addendum. (12) The parties reserve all rights and remedies related to the Warehouse Agreement, the Loan Purchase Agreement, the EPP Addendum, all claims and causes of action against each other, and all other, and that nothing in the Stipulation is deemed a waiver of any rights of the parties in any other property that secures repayment of the amounts due and owing to either of them. Countrywide Wants Plan Examined As reported in the Troubled Company Reporter on Jan. 17, 2008, Countrywide Warehouse Lending and Countrywide Home Loans Inc., sought the Court's authority to examine First Magnus pursuant to Rule 2004(d) of the Federal Rules of Bankruptcy Procedures. At that time, Countrywide also wanted the Debtor to produce (i) reports to provide testimony in connection with the confirmation of its chapter 11 plan of liquidation; and (ii) the documents and the identity of witnesses, to be used in the deposition or hearing in connection with Plan's confirmation. Countrywide asked the Court to direct the Debtor, by and through its designee, to appear for deposition regarding the materials and documents requested. Countrywide had proposed that the Rule 2004 examination be conducted at the law office of Bryan Cave LLP, in Phoenix, Arizona, on Jan. 24, 2008, or as agreed upon by the parties. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan commenced on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FIRST MAGNUS: Wants All Plan Confirmation Objections Overruled -------------------------------------------------------------- First Magnus Financial Corporation asks the U.S. Bankruptcy Court for the District of Arizona to overrule all remaining objections to the proposed confirmation of its Chapter 11 Plan of Liquidation. The creditors that objected to the Plan confirmation include WNS North America Inc., WC Partner, Wells Fargo Funding Inc., the Pima County Treasurer, the Maricopa County Treasurer and certain Claimants under the Worker Adjustment and Retraining Notification (WARN) Act. With respect to WNS' allegation that the Plan improperly discriminates against the holders of disputed claims, Todd A. Burgess, Esq., at Greenberg Traurig LLP, in Tucson, Arizona points out that the disputed claims, if ever they're allowed, will be paid from the appropriate reserves in the Dividend Fund to be created by the Liquidating Trustee. "The Debtor has agreed to amend the definition of disputed claim under the Plan so that the undisputed portion of the claim will be treated as an allowed claim," Mr. Burgess states. Mr. Burgess also dismisses the allegation by WNS that the Debtor attempted to gerrymander votes in favor of the Plan by separating the unsecured rejection claims (Class 4) from the general unsecured claims (Class 3), saying that the rejection claims should be classified separately since the Debtor anticipated substantial litigation regarding the claims. "Whether or not the votes in Classes 3 and 4 of the Plan are tallied separately or together, the Plan has been accepted overwhelmingly by the creditors. Because the treatment of Claims in Classes 3 and 4 is identical, the Plan does not discriminate against claims in either Class," Mr. Burgess argues. Mr. Burgess further says that the selection of the proposed Liquidating and Litigation Trustees, and Advisory Board members was consistent with the interests of creditors and the provisions of the Bankruptcy Code. "The evidence will show, among other things, that the Plan was proposed in good faith, is feasible, does not discriminate unfairly against any creditor or Class of creditors, is fair and equitable, and is in the best interests of creditors," Mr. Burgess points out. Meanwhile, to answer WC Partner's allegations, the Debtor will clarify through the confirmation order that (i) all its assets existing on the Effective Date will be transferred to the Liquidating Trust; (ii) there is no need for the creditor to file a second proof of claim to the extent a creditor already has filed a proof of claim with respect to an executory contract or unexpired lease rejected before the Confirmation Date; and (iii) nothing in the Plan results in a discharge of the Debtor or any other person for claims arising prepetition. "The evidence, including the liquidation analysis, will show that the Debtor does not have a positive net worth or sufficient assets to pay all the creditor's claims in full, Mr. Burgess says, in response to WC Partner's contention that the Debtor has a positive net worth or that all of its assets are not being liquidated under the Plan. He adds that there is no merit to the suggestion that less than all of the Debtor's assets are being liquidated and distributed to creditors under the Plan. Meanwhile, the Debtor disputes liability to any existing or future claimants under the WARN Act. The Debtor says, however, that pending the adjudication of their alleged claims, it is anticipated that the Liquidating Trustee will reserve an appropriate amount to pay the disputed claims if ever they become allowed claims. As regards the objections filed by the two Treasurers and Wells Fargo, the Debtor says that it has resolved the objections by agreeing to: (a) clarify through the confirmation order that the Debtor will not receive a discharge upon entry of the confirmation order, and that nothing in the Plan, will result in a discharge of any other person for claims arising prepetition; (b) amend the Plan, through the confirmation order, to provide that the holders of Allowed Priority Tax Claims and Secured Tax Claims under Sections 4.2 and 5.1 of the Plan will receive interest; and (c) clarify through the confirmation order that funds in the Hold Account will not be used to pay Allowed Claims until the Court determines the interests, if any, of Secured Creditors, Repo Participants, and other parties in interest to cash in the Hold Account pursuant to Section 9.3.6 of the Plan. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No.: 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. The Debtor's exclusive period to file a plan expired on Dec. 19, 2007. The confirmation hearing on the Debtor's liquidation plan commenced on Feb. 7, 2008. (First Magnus Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). FORD MOTOR: Plans to Offer Buyout Packages to 9,000 Workers ----------------------------------------------------------- Ford Motor Co. intends to offer another round of buyout packages to 14% of its entire plant workforce in North America to restore profitability, Bloomberg News reports citing a source familiar with the matter. Roughly 9,000 workers will be displaced in addition to 33,000 employees who availed the compensation packages in 2006 and 2007. Last month, United Auto Workers union representatives and the automaker agreed to compensation offers higher than those offered in 2006, including an education package, health benefits and a lump sum payment, according to Bryce G. Hoffman of the Detroit News. Pursuant to the agreement, an additional $35,000 will be given to qualified retirees as they leave, the payout totaling $70,000. As reported in the Troubled Company Reporter on Feb. 5, 2008, total Ford sales in January, including Jaguar, Land Rover, and Volvo, were 159,914, down 4%. "It's not going to get any easier -- at least for awhile," Jim Farley, Ford's group vice president, Marketing and Communications, said. "Recent monetary actions and the proposed stimulus package may help the economy later this year, but we're not pinning our hopes on that. Our plan is based on restructuring our business to be profitable at lower demand and changed mix while also accelerating the development of new products people want to buy." Based 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. FOREST LAKE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Forest Lake Ford, Inc. dba Forest Ford inc. 231 - 19th Street Southwest Forest Lake, MN 55025 Bankruptcy Case No.: 08-30573 Type of Business: The Debtor is Ford car dealer. Chapter 11 Petition Date: February 11, 2008 Court: District of Minnesota (St Paul) Judge: Robert J. Kressel Debtor's Counsel: Michael L. Meyer, Esq. Ravich Meyer Kirkman McGrath Nauman 4545 IDS Center 80 South Eighth Street Mineapolis, MN 55402 Tel: (612) 317-4745 Fax: (612) 332-8302 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------ --------- American Express Credit Card Debt $3,836,200 Glenn P. Berger, Esq. 600 Third Avenue New York, NY 10016 WIPLI Accounting services $24,500 P.O. Box 8010 Wausau, WI 54402 Walden Properties Real estate lease $22,500 500 Ford Road Minneapolis, MN 55426 Ford Motor Company Goods and Services $12,037 Nelson, Lowell E. Rent $8,000 Washington County Commercial Property $7,933 Taxes Parts Midwest Inc Goods and Services $6,828 ADP Dealer Services Goods and Services $6,228 Connexus Energy Utilities $5,037 ECM Publishing Goods and Services $4,980 Sentry Insurance Property Insurance $3,900 Cox Auto Trader Goods and Services $3,000 Novaks GM Center Rent $2,850 US Bank Lease $2,717 Holiday Goods and Services $2,175 American Tire Goods and Services $1,781 ROC Inc Goods and Services $1,699 ADP Commercial Leasing Equipment Lease $1,265 Aramark Uniform Goods and Services $1,198 Hitch-It Inc Goods and Services $1,095 GENERAL MOTORS: May Have to Fund Delphi's Exit, Investors Say ------------------------------------------------------------- Delphi Corp.'s plan to secure $6.1 billion in financing for its exit from Chapter 11 bankruptcy protection is in jeopardy as bank lenders tried to cope with credit markets that remain virtually shut, The Wall Street Journal says, citing people familiar with the matter. J.P. Morgan Chase & Co. and Citigroup Global Markets, which agreed to arrange funding for Delphi, are having difficulties syndicating the loan to other lenders, the Journal's source said. The Journal's Jeffrey McCracken and John D. Stoll relate that hedge funds and other investors dislike the borrowing terms, saying that they aren't priced appropriately for the risk involved. Investors and others involved in the matter say Delphi's former parent, General Motors Corp., may have to step in and provide financing to fill the gap, the Journal relates. Yet too much GM involvement might spook stock investors, who don't want Delphi too beholden to GM and its price-cutting demands, the Journal says. Fritz Henderson, GM's chief financial officer, has said GM is exploring alternatives in the event Delphi cannot obtain the Chapter 11 exit financing it planned, Dow Jones Newswires say. Mr. Henderson, however, didn't give any details on what kind of alternatives GM was exploring with Delphi and its investor group, Dow Jones notes. "Our objective is to have Delphi exit," Mr. Henderson said in an interview, WSJ notes. "What we've tried to do is be constructive with Delphi and the plan-investors as to how we play a role." GM yesterday reported a $722 million fourth-quarter loss, to end the year a staggering $38.7 billion in the red -- believed to be the largest annual loss ever by an auto maker, the Journal's John Stoll reports. GM recorded a $622 million charge associated with its support of Delphi's restructuring efforts as well as $552 million charge for pension benefits provided to Delphi employees and retirees. KeyBanc analyst Brett Hoselton said in a note to investors Tuesday that GM may have to provide financing itself, Dow Jones reports. Delphi could consider trying to get a smaller exit-financing package, but falling U.S. auto sales and lowered forecasts for GM sales in 2008 "probably mean Delphi needs more money, not less," WSJ quotes a person familiar with Delphi's talks with their lenders. "Any logical person would look at the situation in the U.S. economy and say Delphi needs more," that source told WSJ. As reported in the Troubled Company Reporter on Feb. 4, 2008, Delphi and its debtor-affiliates expect to consummate their First Amended Joint Plan of Reorganization on or before March 31, 2008, Delphi Corp. Vice President and Chief Restructuring Officer John D. Sheehan said in a regulatory filing with the U.S. Securities and Exchange Commission. 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. The TCR reported Jan. 30, 2008, that 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 Delphi's bankruptcy cases to participate in any syndicate of lenders assembled to provide exit financing facilities for the Debtors' emergence from Chapter 11. 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; 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. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: Reaches Agreement with UAW on Attrition Program --------------------------------------------------------------- General Motors Corporation disclosed in a regulatory filing with the Securities and Exchange Commission dated Feb. 12, 2008, that the company and the United Auto Workers union have reached an agreement on a comprehensive special attrition program that will be offered to all of GM's 74,000 UAW-represented employees. The special attrition program offers employees a choice of several pension and buyout incentives. GM is offering retirement pension incentives of $45,000 for production employees or $62,500 for skilled trades. Eligible employees can select from a variety of ways to receive their incentive: -- One time, lump-sum cash payment -- Direct rollover into their GM 401(k) or into an Individual Retirement Account (IRA) -- Monthly annuity -- Combination of partial lump-sum payment and direct rollover into their GM 401(k) or an IRA The other retirement and buyout options available are similar to those offered to employees in 2006. These options include: -- Mutually Satisfactory Retirement (MSR) for employees who are at least 50 years old with 10 or more years of service. This option provides a pension payment with full benefits. -- Pre-Retirement Program in which employees with 26, 27, 28 or 29 years of service can grow into a full "30 and out" retirement. Until they reach 30 years of credited service, participating employees would receive fixed monthly payment with full benefits. -- Cash Buyout for employees who agree to voluntarily quit and sever all ties with GM. A $140,000 buyout incentive is offered to employees with 10 or more years of credited service or seniority, while a $70,000 buyout incentive is offered to employees with less than 10 years of credited service or seniority. In December 2007, GM and the UAW reached an agreement on what the company was calling the first phase of a comprehensive special attrition program. Details of this program were rolled out to employees at select locations last month. Those employees are now eligible for the enhanced provisions of this new agreement. "We've worked with our UAW partners to ensure our employees have a variety of options to consider," said Rick Wagoner, GM chairman and chief executive officer. "The special attrition program is an important tool that will help us transform the workforce." About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: Posts Net Loss of $38.7 Billion in 2007 ------------------------------------------------------- General Motors Corp. reported a 2007 calendar-year adjusted net loss, excluding special items, of $23.0 million. This compares to adjusted net income of $2.2 billion in 2006, as significantly improved automotive performance was offset by large losses at GMAC. Including special items, the company reported a loss of $38.7 billion for the year, compared to a reported loss of $2.0 billion in 2006. The loss is almost entirely attributable to the non-cash $38.3 billion special charge in the third quarter related to the valuation allowance against deferred tax assets. The loss is believed to be the largest annual loss ever by an auto maker, The Wall Street Journal's John D. Stoll says. In the fourth quarter 2007, GM posted adjusted net income of $46.0 million, compared to adjusted net income of $180.0 million in the year-ago period. Including special items, the company reported a net loss of $722.0 million in the fourth quarter 2007, compared to net income of $950.0 million in the year-ago period. GM's core automotive business generated record revenue of $178.0 billion in 2007, a $7.0 billion improvement over 2006, aided by explosive growth in emerging markets and favorable foreign exchange against a weaker U.S. dollar. In total, GM generated $181.0 billion in revenue in 2007, compared with $206.0 billion in 2006. The decrease versus last year is due to the non-consolidation of GMAC revenue, following GM's sale of 51.0% of GMAC in November of 2006. "2007 was another year of important progress for GM, as we implemented further significant structural cost reductions in North America, grew aggressively in emerging markets, negotiated an historic labor contract with our UAW partners in the U.S., advanced development of a broad range of advanced propulsion technologies and most importantly, introduced a series of breakthrough cars and trucks around the world," GM chairman and chief executive officer Rick Wagoner said. "We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," Wagoner added. The fourth quarter results reflect a $1.6 billion tax benefit in continuing operations related to SFAS No. 109 guidelines for intra-period tax allocations between continuing operations, other comprehensive income and discontinued operations. Special charges recorded in the fourth quarter totaled $768.0 million, including an $805.0 million adjustment principally related to a favorable tax item related to the gain on the sale of Allison Transmission, which was offset by $622.0 million in charges associated with GM's support of Delphi's restructuring efforts, $552.0 million for pension benefits provided to Delphi employees and retirees and $290.0 million in other restructuring- related charges. GM reported revenue of $47.1 billion in the fourth quarter versus $50.8 billion in the year ago period, with the decline more than accounted for by the exclusion of GMAC revenue starting Dec. 1, 2006. Revenue from automotive operations totaled $46.7 billion in the quarter, a $3.0 billion increase over the prior year and a new quarterly revenue record, reflecting strong growth in Latin America, Asia Pacific and Eastern Europe. GM Automotive Operations GM's global automotive operations posted adjusted earnings before tax of $553.0 million in 2007, compared to an adjusted loss before tax of $339.0 million in 2006. In the fourth quarter 2007, GM's automotive operations had an adjusted loss before tax of $803.0 million, compared to adjusted earnings before tax of $8.0 million in the year-ago quarter. GM's worldwide vehicle sales increased 3.0%, or 277,000 units, to 9.4 million vehicles in 2007, marking the second best year in units sold in the company's 100-year history. For the third consecutive year, a majority of the company's sales -- almost 60.0% -- were outside of the U.S. Record sales performance was achieved in key growth markets throughout Eastern Europe, Latin America and the Asia Pacific. GM North America posted an adjusted loss before tax of $1.5 billion for 2007, compared to a loss before tax of $1.6 billion in the year-ago period, excluding special items. GM North America had an adjusted loss before tax of $1.1 billion in the fourth quarter, compared to an adjusted loss before tax of $129.0 million in the fourth quarter 2006. Losses for the year in GM North America were largely attributable to a softer U.S. market, and the strategic actions to reduce dealer inventory by approximately 150,000 units and lower sales of daily rental vehicles by about 110,000 vehicles in the U.S. High commodity prices, unfavorable foreign exchange and lower unit sales exerted pressure on profitability, but were more than offset by better product mix, stronger pricing, and significantly reduced manufacturing and legacy costs. GM North America also incurred higher engineering costs to support continuing product and technology development activities. "Our North America turnaround remains on track despite the weak U.S. economy and continued high commodity prices," Wagoner said. "The actions we've taken to further reduce structural costs and strengthen our product lineup with great new vehicles like the award-winning Chevrolet Malibu and Cadillac CTS are fundamentally improving our ability to compete in the U.S. and around the world. We're building a solid foundation for continued growth and improved operating results," Wagoner added. GM reached its structural cost reduction target of $9.0 billion in North America in 2007 versus 2005, a key part of reducing global automotive structural cost as a percent of revenue from 34.0% in 2005 to 29.7% in 2007. GM expects to derive additional structural cost savings of $4.0 billion to $5.0 billion by 2010 in the U.S. as it fully implements the 2007 GM-UAW contract, including the independent healthcare trust. These savings will help GM reach its goal to reduce structural cost as a percent of revenue to 25.0% of revenue by 2010, and further to 23.0% of revenue by 2012. GM Europe posted its second consecutive year of adjusted profitability in 2007 with earnings before tax of $55.0 million, down from earnings before tax of $357.0 million in 2006, excluding special items. For the fourth quarter GM Europe posted an adjusted loss before tax of $215.0 million versus an adjusted loss before tax of $12.0 million in the year ago period. The decline in calendar year and fourth quarter earnings were attributable primarily to a markedly softer German market as well as unfavorable foreign exchange rates. Other key areas of GM Europe's business performed relatively well, including strong sales outside Germany, increases in net pricing, and improvements in structural and material cost performance. GM Europe sales were up 8.9% in 2007 to a record 2.2 million units, led by Chevrolet, up 34.0%, Opel/Vauxhall, up 4.3% nd Cadillac up 31.0%. Strong demand for GM vehicles in the United Kingdom, Ukraine, Italy, Greece and Russia -- where sales doubled to 260,000 units -- made the company the fastest growing major automobile manufacturer in Europe in 2007. Financial results generated from the rapidly growing sales of GM Daewoo-built Chevrolet vehicles in Europe are consolidated in Korea and reflected in GM Asia Pacific results. With a 19.0% increase in sales to a record 1.2 million units in 2007, GM Latin America, Africa, Middle East (GMLAAM) achieved a record $1.3 billion in adjusted earnings before tax for the year, up 140.0% over 2006 adjusted earnings of $561.0 million. GMLAAM also set a sales record in the fourth quarter with 341,000 units, up 18.0% year over year, generating $424.0 million in adjusted earnings before tax, up from $76.0 million in the fourth quarter of 2006. Robust sales in the GMLAAM region resulted in record revenue of $18.9 billion for the calendar year and $6.0 billion in the fourth quarter. The year-over-year gain in GMLAAM pre-tax earnings was largely driven by strong volume growth, which outpaced industry growth, as well as favorable price and mix. Robust sales contributed to record GM sales in Argentina, Brazil, Chile, Colombia, Egypt and Venezuela in 2007. Continued strong sales of the Chevrolet Corsa, Aveo and Celta throughout the region were complemented by the successful launch of several new entries, including the Chevrolet Captiva in Latin America and Chevrolet Suburban and Cadillac Escalade in the Middle East. Chevrolet sales in the region were up 23.0% for the calendar year, and accounted for 90.0% of units sold in GMLAAM in 2007. GMAP posted adjusted earnings before tax of $744.0 million in 2007 compared to $403 million for 2006. GMAP adjusted earnings before tax for the fourth quarter were $72.0 million, compared to $105.0 million in fourth quarter of 2006. The calendar year earnings gain was driven by favorable volume and mix, increased equity income from GM's China joint ventures and improved operating performance at Holden. The results were partially offset by increased structural cost increases associated with continued investment in high growth markets and lower Suzuki equity income resulting from the sale of a majority of GM's equity in 2006. GMAP had continued strong performance in China, where domestic sales grew 18.5% in 2007 and GM, with its local partners, became the first global automotive manufacturer to sell more than 1 million vehicles. In addition, GM sales in India rose 74.0%, and export sales of the GM Daewoo products built in Korea increased by 30.0% to 870,000 vehicles. GMAC Posts $2.3BB Net Loss in 2007 On a standalone basis, GMAC Financial Services reported a net loss of $2.3 billion in 2007, compared with net income of $2.1 billion in 2006. Profitable results in the global automotive and insurance businesses were more than offset by the significant loss at Residential Capital LLC. In the fourth quarter, GMAC reported a net loss of $724.0 million, compared to net income of $1.0 billion in the fourth quarter of 2006. The effect on ResCap of the continued disruption in the mortgage, housing and capital markets was the primary driver of adverse performance. GM reported a $1.1 billion net loss attributable to GMAC, as a result of its 49.0% equity interest and preferred dividends received for the full year 2007, and a $394.0 million reported net loss for the fourth quarter. While market conditions remain uncertain, GMAC has taken aggressive actions in 2007 across all its businesses in an effort to mitigate future risk, rationalize the cost structure and position the company for growth. As a result, GMAC currently expects to be profitable in 2008. GMAC's liquidity position is at relatively high historical levels and GM believes that GMAC remains adequately capitalized. Cash and Liquidity Cash, marketable securities and readily available assets of the Voluntary Employees Beneficiary Association trust totaled $27.3 billion as of Dec. 31, 2007, up from $26.4 billion as of Dec. 31, 2006. GM ended the 2007 calendar year with negative adjusted automotive operating cash flow of $2.4 billion, a significant $2.0 billion improvement compared to 2006. It marks the second consecutive year-over-year improvement in operating cash flow for all four of GM's operating regions. Consistent with past years, GM withdrew $2.7 billion from the VEBA in December, leaving a balance of $16.3 billion at 2007 year-end, of which the UAW related portion is estimated at $14.5 billion. In negotiations with the UAW and UAW retiree class counsel on a Settlement Agreement involving the healthcare MOU that will shortly be filed with the court, the parties have agreed in principle that of the $18.5 billion that was agreed to be set aside upfront for future retiree healthcare claims, the difference of approximately $4.0 billion will be funded with a short term note maturing January 2010 with interest at 9.0%. This will enhance interim liquidity for GM and provide the UAW and plan participants a 9.0% return. The parties have also agreed in principle, as part of the overall Settlement Agreement, to execute a series of derivatives that would effectively reduce the conversion price of the convertible note from $40 to $36, and would entitle GM to recover the additional economic value provided if the GM stock price appreciates to between $63.48 and $70.53 per share. Future Outlook Despite the uncertainty in the U.S. market, the company disclosed that it expects improved pre-tax automotive earnings in 2008 versus 2007, largely driven by continued strong performance in emerging markets. GM expects improvements in automotive revenue, favorable pricing, favorable material cost performance and continued reductions in structural cost as a percentage of revenue in the 2008 calendar year. Operating cash flow is expected to be relatively flat in 2008 versus 2007, despite planned increases in capital spending to about $8.0 billion, up from $7.5 billion in 2007. GM remains confident in the 2010-2011 opportunities to further improve earnings and cash flow. Most notable is the potential to realize the full impact of the GM-UAW labor agreement which is expected to provide significantly greater flexibility and yield additional savings of $4.0 billion to $5.0 billion. In addition, GM estimates that if the U.S. market volume returns to trend levels in 2009 and beyond, which would be an increase of 1 million units, the change would generate additional pre-tax income to GM in the range of approximately $1.0 billion to $1.5 billion annually. GM also expects to reduce a substantial portion of the cost premiums it has historically paid to Delphi for systems and components over the next three to five years. The savings will be offset by various labor and transitional subsidies of $300-400 million per year under Delphi's plan of reorganization, however GM expects to achieve annual net savings over the mid-term of approximately $500.0 million. In addition, significant additional opportunities to further improve GM earnings and cash flow by 2010-2011 include improved pricing driven by a host of new products, continued strong growth in revenue and profitability in emerging markets, and improved performance at GMAC. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $148.9 billion in total assets, $184.4 billion in total liabilities, and $1.6 billion in commitments and contingencies Minority interests, resulting in a $37.1 billion total stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $59.2 billion in total assets available to pay $70.8 billion in total current liabilities. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GENERAL MOTORS: Inviting Ex-Guide Corp. Workers to Apply at Plants ------------------------------------------------------------------ The Associated Press reports that 400 employees from the shuttered Guide Corp. plant in Anderson, Indiana, were told by letter that they were qualified to apply at a General Motors Corp. assembly plant in Fairfax, Kansas by Friday, Jan. 15, 2008. The GM plant has 300 vacancies. Headquartered in Southfield, Michigan, Guide Corporation is a North American supplier of exterior automotive lighting systems, including both forward and signal lighting. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 280,000 people around the world and manufactures cars and trucks in 33 countries, including the United Kingdom, Germany, France, Russia, Brazil and India. In 2006, nearly 9.1 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn and Vauxhall. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GLOBAL MOTORSPORT: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Global Motorsport Group, Inc. and its debtor-affiliates filed with the U.S. Bankruptcy Court for the District of Delaware its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ------ ----------- A. Real Property B. Personal Property $27,181,183 C. Property Claimed as Exempt D. Creditors Holding Secured claims $138,400,000 E. Creditors Holding Unsecured Priority Claims $886,504 F. Creditors Holding Unsecured Nonpriority Claims $16,459,050 ----------- ------------ TOTAL $27,181,183 $155,745,555 Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/home.shtml-- are dealers of European model sports cars. The company is also known as Global Motorsport Parts Inc. The company and three of its affiliates filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). The Debtors selected Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, as counsel. The U.S. Trustee for Region 3 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors in these cases. GLOBAL MOTORSPORTS: U.S. Trustee Balks at Terms of Asset Sale ------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, asks the U.S. Bankruptcy Court for the District of Delaware to deny approval of Global Motorsport Group Inc. and Custom Chrome Europe Ltd.'s request to publicly sell its assets. The U.S. Trustee objects to the Debtors' request for authority to offer certain bid protections to the proposed stalking horse purchaser. Expense Reimbursement is Excessive The U.S. Trustee tells the Court that the Debtors have agreed to pay to the buyer up to $300,000 to reimburse the buyer for its "actual out-of-pocket costs and expenses." Generally, courts in the District have approved a request for authorization to reimburse a stalking horse bidder for its "reasonable" expenses in an amount up to 1% of cash portion of the proposed purchase price. The proposed expense reimbursement appears to be closer to 2% of the cash portion of the purchase price and does not appear to be qualified such that it only includes reasonable expenses, the U.S. Trustee asserts. The U.S. Trustee adds that at a minimum, the Debtors should only be authorized to reimburse the Buyer for its reasonable expenses subject to review by the Debtors and the Committee. Break-Up Fee and Reimbursement are Inappropriate The U.S. Trustee does not object to the Debtors' payment of a break-up fee to the buyer if it is the losing bidder in a competitive auction process. However, the proposed bid protections go beyond the structure. Unless the assets are subsequently sold in a competitive bidding process, the payment of the break-up fee or the expense reimbursement does not provide a demonstrable benefit to the estate, the U.S. Trustee contests. If the Debtors abandon the sale process and decide to pursue a plan of reorganization or a refinancing, the buyer will have provided no value to the estate. It is impossible to discern what benefit the buyer will have provided to the estate if the agreement is terminated because the sale fails to close by March 12, 2008. Superpriority Status is Inappropriate The U.S. Trustee relates that the Debtors' motion to set sale procedures seek authority to grant superpriority administrative status to the break-up fee and expense reimbursement. However, the proposed stalking horse is not extending credit to the Debtors but simply seeking to purchase the Debtors' assets. William K. Harrington, Esq., represents the U.S. Trustee in this case. Motion to Sell Assets to Dae-Il As reported in the Troubled Company Reporter on Feb. 6, 2008, Global Motorsport and its debtor-affiliates asked the Court to approve the proposed bidding procedure for the sale of substantially all of their assets to Dae-Il, subject to higher and better offers. Dae-Il was named "stalking horse" bidder under the sale request. The Debtors told the Court that they agreed to sell all their assets for $16 million as stated in the asset purchase agreement dated Jan. 28, 2008, that they entered into with Dae-Il. Dae-Il has deposited $1 million with Wilmington Trust Company pursuant to the terms of the agreement, according to the Debtors. To participate in the public auction, each qualified bidder must submit a good faith deposit of at least $1 million before Feb. 27, 2008. About Global Motorsport Headquartered in Morgan Hill, California, Global Motorsport Group Inc. -- http://www.gmgracing.com/home.shtml-- are dealers of European model sports cars. The company is also known as Global Motorsport Parts Inc. The company and three of its affiliates filed for protection on Jan. 31, 2008 (Bankr. D. Del. Lead Case No. 08-10192). The Debtors selected Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, as counsel. The U.S. Trustee for Region 3 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors in these cases. The date and time for the meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code is yet to be established by the U.S. Trustee. Epiq Bankruptcy Solutions LLC is the Debtors' noticing claims and balloting agent. Global Motorsport reported $27,181,183 in total assets and $155,745,555 in total debts in its schedules of assets and debts filed in Court. GRANT WILLIAMS: Case Summary & Four Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Grant Parrish Williams dba Life Balance Center 560 Barker Pass Road Santa Barbara, CA 93108 Bankruptcy Case No.: 08-10249 Type of Business: The Debtor operates a healthcare business. Chapter 11 Petition Date: February 11, 2008 Court: Central District Of California (Santa Barbara) Judge: Robin Riblet Debtor's Counsel: Jay L. Michaelson, Esq. Michaelson, Susi & Michaelson 7 West Figueroa Street, 2nd Floor Santa Barbara, CA 93101-31918 Tel: (805) 965-1011 Fax: (805) 965-7351 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's list of its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ ------------ --------- Business First Bank Unsecured business $200,000 1035 State Street loan Santa Barbara, CA 93101 Sallie Mae Student loan $14,000 P.O. Box 9500 Wilkes Barre, PA 18773-9500 ACS Student loan $13,000 P.O. Box 7051 Utica, NY 13504 Sansum Clinic Lab Lab services $5,801 HAVEN HEALTHCARE: Court Extends Filing of Schedules Until Friday ---------------------------------------------------------------- The Hon. Albert S. Dabrowski of the United States Bankruptcy Court for the District of Connecticut gave Haven Healthcare Management LLC and its debtor-affiliates until Feb. 15, 2008, to submit their schedules of assets and liabilities and statement of financial affairs. The Court says the Debtors needed the extension for the orderly administration of their assets. Headquartered in Middletown, Connecticut, Haven Healthcare Management LLC -- http://www.havenhealthcare.com/-- provide nursing care to the elderly in New England, Connecticut. The company operates health centers and assisted living facilities. In addition, the company specializes in short-term rehabilitative care and long-term care. The company and 46 of its affiliates filed for Chapter 11 protection on November 22, 2007 (Bankr. D. Conn. Lead Case No. 07- 32719). Moses and Singer LLP serves as the Debtors' counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors to serve on an Official Committee of Unsecured Creditors in this case. Pepper Hamilton LLP is counsel and Neubert Pepe & Monteith P.C. as its co-counsel to the Creditors Committee. When the Debtors sought protection from their creditors, they listed assets and debts between $1 million to $100 million. The Debtors' consolidated list of 50 largest unsecured creditors showed total claims of more than $20 million. HDB LLC: U.S. Trustee to Convene Section 341(a) Meeting on March 5 ------------------------------------------------------------------ The U.S. Trustee for Region 17 will convene a meeting of creditors in HDB LLC's Chapter 11 case, on March 5, 2008, 1:00 p.m., at Room 1500, 300 Las Vegas Boulevard, South, Las Vegas, Nevada. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Las Vegas, Nevada, HDB LLC filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Nev. Case No.: 08-10685.) Brett A. Axelrod, Esq. of Lewis and Roca LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it has estimated assets and debts of $50 million to $100 million. IDEARC INC: S&P Changes Outlook to Negative; Holds BB Rating ------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Idearc Inc. to negative from stable. Ratings on the company, including the 'BB' corporate credit rating, were affirmed. "The outlook revision reflects our concerns that the slowing economy's negative impact on revenue and EBITDA at Idearc will persist into 2008," said Standard & Poor's credit analyst Emile Courtney. Revenue and EBITDA declined 1.8% and 6.9%, respectively, in the December 2007 quarter, and 0.8% and 2.7%, respectively, in 2007. This comes at a time when Idearc has limited flexibility in its leverage profile, with total debt (adjusted for operating leases and expected pension and postretirement liabilities) to EBITDA of about 6x at December 2007--the upper end of S&P's target for leverage at the current rating. Idearc did not reduce leverage in 2007, as cash flow from operations was exceeded by the $225 million acquisition of Switchboard.com (an online directory business) in the December 2007 quarter, capital expenditures, and the company's dividend. The rating on Dallas, Texas-based Idearc reflects the company's highly leveraged financial profile, the mature nature of its incumbent markets, and a growth strategy that includes acquisitions. These factors are tempered by Idearc's strong business profile as the second-largest directory publisher in the U.S., with leading incumbent positions in many markets. They're also partially mitigated by the company's longstanding relationships with a large base of small and midsize advertisers (many of which rely on directories for their sole form of advertising), high cash flow generation, the low capital intensity inherent in the directory publishing business, customer diversity, and operational scale. In addition, Idearc has an exclusive 30-year license to publish Verizon-branded directories in the company's served markets. IMAC CDO: Moody's Junk Ratings of Six Classes of Notes ------------------------------------------------------ Moody's Investors Service downgraded ratings of nine classes of notes issued by IMAC CDO 2007-2, Ltd., and left on review for possible further downgrade ratings of three of these classes of notes. The notes affected by this rating action are: Class Description: $150,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2050; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $150,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2050; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $29,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2050; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $83,750,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due 2050; -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $18,750,000 Class C Fifth Priority Senior Secured Floating Rate Notes Due 2050; -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ca Class Description: $11,000,000 Class D Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2050; -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $25,000,000 Class E Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2050 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C Class Description: $7,500,000 Class F Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2050 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: C Class Description: $13,000,000 Class G Ninth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2050 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on January 18, of an event of default caused by a failure of the Class A/B/C Overcollateralization Ratio to be greater than or equal to 100 per cent, pursuant Section 5.1 of the Terms Supplement to the Indenture dated April 12, 2007. IMAC CDO 2007-2, Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. As provided in Article 5 of the Indenture and the Terms Supplement to 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-1, Class A-2 and the Class A-3 Notes remain on review for possible further action. INNOVATIVE DESIGNS: Louis Plung & C Expresses Going Concern Doubt ---------------------------------------------------------------- Louis Plung & Company, LLP, in Pittsburgh, Pa., raised substantial doubt about the ability of Innovative Designs, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Oct. 31, 2007. The auditor pointed to the company's significant losses from operations and working capital and stockholders deficits. The company posted a net income of $53,093 on total revenues of $674,541 for the year ended Oct. 31, 2007, as compared with a net loss of $4,200,640 on total revenues of $78,013 in the prior year. At Oct. 31, 2007, the company's balance sheet showed $1,275,397 in total assetsa nd $5,404,673 in total liabilities, resulting in $4,129,276 stockholders' deficit. The company's consolidated balance sheet at Oct. 31, 2007, also showed strained liquidity with $1,261,645 in total current assets available to pay $4,993,247 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?27f4 About Innovative Designs Headquartered in Bradenton, Florida, Innovative Designs Inc. (OTCBB: IVDNQ) -- http://www.idigear.com/-- manufactures the Arctic Armor(TM) Line, hunting apparel, swimwear, wind shirts, jackets, sleeping bags, and the multi-function "All in One" under the "i.d.i.gear" label featuring INSULTEX(TM). INPHONIC INC: Court Sets March 21, 2008 as Claims Bar Date ---------------------------------------------------------- The Honorable Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware established March 21, 2008, at 4:00 p.m. as the deadline for InPhonic Inc. nka SN Liquidations Inc. and its debtor-affiliates' creditors to file proofs of claim. The Court also set May 6, 2008 as bar date for governmental units. Proofs of claim are to be sent to: SN Liquidations Inc. fka Inphonic Inc. 1010 Wisconsin Avenue Suite 600 Washington, DC 20007 Headquartered in Washington, D.C., SN Liquidations Inc fka InPhonic Inc. (NASDAQ: INPC) -- http://www.inphonic.com/-- is an online seller of wireless services in the United States. The company operates its business through three business segments: wireless activation and services; mobile virtual network enabler services, and data services. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Mary E. Augustine, Esq., and Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington, Delaware, represent the Debtors. The Debtors selected BMC Group Inc. as their claims, noticing and balloting agent. The United States Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Reed Smith LLP. InPhonic Inc. reported $97,046,330 in total assets and $188,040,889 in total debts in its schedules of assets and debts filed with the Court. IAC/INTERACTIVECORP: Improved HSN Might End Liberty Media Feud -------------------------------------------------------------- The favorable returns from IAC/InterActiveCorp's HSN segment may help the company resolve disputes with Liberty Media Corporation, Jessica E. Vascellaro writes for The Wall Street Journal. WSJ reported yesterday that IAC could initiate talks with Liberty Media and convince Liberty Media to take HSN instead of IAC's stake. According to WSJ, Barry Diller at IAC and John Malone at Liberty Media haven't finalized a previous plan to swap Liberty Media's IAC stake for HSN because of HSN's poor performance. Scott Devitt at Stifel, Nicolaus & Co. told WSJ that with HSN's improved performance, Liberty Media might become interested with the past deal again. HSN's improved performance was cued by hiring Mindy Grossman, a former Nike Inc. staff, sometime in April 2006, WSJ notes. Mr. Grossman, WSJ relates, was quick to overhaul HSN's merchandise and management team. HSN's Financial Performance When IAC released its results for the full-year and fourth quarter 2007, it said that revenue reflected increased contributions from HSN Retailing, catalogs and Shoebuy. IAC reported that HSN grew revenue 8% excluding America's Store, which ceased operations on April 3, 2007. Online sales continued to grow at a double digit rate in the fourth quarter. At that time, Chairman and CEO Mr. Diller, commented that, ". . . On the good side, our revenue gains this quarter include the very promising news of the continued turnaround at HSN. . . . " About IAC IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates a portfolio of specialized and global brands in the sectors: Retailing, which includes the United States and International segments; Services, which includes the Ticketing, Lending, Real Estate, Teleservices and Home Services reporting segments; Media & Advertising, and Membership & Subscriptions, which includes the Vacations, Personals and Discounts reporting segments. * * * As reported in the Troubled Company Reporter on Feb. 1, 2008, Standard & Poor's Rating Services said its ratings on IAC/InterActiveCorp, including the 'BB' corporate credit rating, remain on CreditWatch with negative implications, where they were initially placed on Nov. 5, 2007, following IAC's announcement that it plans to divide itself into five publicly traded companies. JAI BHOLA: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Jai Bhola Shankar Inc. dba Budget Inn 771 Hartford Pike Dayville, Connecticut 06241-1715 Bankruptcy Case No.: 08-20218 Type of Business: Hotel Chapter 11 Petition Date: February 11, 2008 Court: District of Connecticut (Hartford) Debtor's Counsel: Gary J. Greene, Esq. Gary Joseph Greene P.C. P.O. Box 408 30 Avon Meadow Lane Avon, Connecticut 06001 Tel: (860) 676-1336 Fax : 860-676-2250 Total Assets: $587,750 Total Debts: $2,751,119 Debtor's list of its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Ocean Bank, FSB $2,000,000 nka Home Loan Investment Bank 224 Weybossett Street Warwick, RI 02903 Northeast Utilities utility services $28,400 P.O Box 2957 Hartford, CT 06104-2960 Bank of America credit card $10,886 P.O. Box 15710 Wilmington, DE 19886-5710 Chokshi, Mund & accounting $9,589 Raczkowski, PC Services Saveway trade debt $5,465 BMW Financial Services bank loan $2,994 Yellow Book USA trade debt $1,852 Harris & K Realty LLC trade debt $1,003 AT&T trade debt $500 Crystal Water Company utility $428 JETBLUE AIRWAYS: Elects Christoph Franz to Board of Directors ------------------------------------------------------------- JetBlue Airways Corporation appointed Christoph Franz, chief executive of Swiss International Air Lines Ltd, to its board of directors effective immediately. Dr. Franz represents the Deutsche Lufthansa Group, whose $300 million investment in JetBlue was completed. "On behalf of the board of directors, I heartily welcome Christoph to JetBlue," Dave Barger, JetBlue's CEO, said. "Our partnership with Lufthansa and its world-renowned leadership team will help strengthen our airline as we continue to build momentum with our award-winning service and strong financial position. Christoph, as the leader of Swiss International Air Lines, brings tremendous knowledge and understanding of the airline industry to JetBlue and we believe he will be an asset to us in many ways." Mr. Franz, age 49, is Swiss International Air Line's chief executive officer and has served in that capacity since 2004. Prior to that, Mr. Franz spent nine years in top management positions with Deutsche Bahn AG, the German national railway, ending as a member of the executive board in charge of Passenger Transportation. He holds a doctorate in Business Administration at the Technische Universitat Darmstadt. "I am honored to represent Deutsche Lufthansa's investment in JetBlue as a member of the Board of Directors," Dr. Franz said. "JetBlue has proven that a North American airline can create a new and successful business model, based on value and low cost. I look forward to contributing to JetBlue's future success in this role." About JetBlue Airways Corporation Based in Forest Hills, New York, JetBlue Airways Corporation (Nasdaq:JBLU) -- http://www.jetblue.com/-- is a passenger airline that provides customer service on point-to-point routes. As of Feb. 14, 2007, JetBlue operated approximately 502 daily flights. The company serves 50 destinations in 21 states, Puerto Rico, Mexico and the Caribbean. The company operates a fleet of 98 Airbus A320 and 23 Embraer 190 aircrafts. The company's operations primarily consists of transporting passengers on its aircraft, with domestic United States operations, including Puerto Rico, accounting for approximately 97.1% of its capacity during the year ended Dec. 31, 2006. * * * Moody's Investor Service placed JetBlue Airways Corporation's long term corporate family and probability rating at 'B3' and its senior unsecured debt rating at 'Caa2' in May 2007. The ratings still hold to date with a negative outlook. JOHNSON RUBBER: U.S. Trustee Adds RCMA Americas Into Committee -------------------------------------------------------------- Habbo G. Fokkena, the U.S. Trustee for Region 9, amended the Official Committee of Unsecured Creditors of Johnson Rubber Company and its debtor-affiliates' Chapter 11 bankruptcy cases. The Trustee tells the Court that it added: RCMA Americas, Inc. c/o Petrene Pearce 115 College Place Norfolk, VA 28452 Tel: (757) 627-4000 Fax: (757) 627-0651 As reported in the Troubled Company Reporter on Jan. 2, 2008, the Committee members were: 1) Lanxess Corporation et. al. c/o Bruce R. Davis 111 RIDC Park West Drive Pittsburgh, PA 15275-1112 Tel: (412) 809-1544 Fax: (412) 809-1561 2) DuPont Performance Elastomers, LLC c/o Betty K. Ingram 300 Bellevue Parkway Wilmington, DE 19809 Tel: (302) 792-4244 Fax: (302) 792-4450 3) ISP Elastomers c/o Gordon E. Miller 1361 Alps Road Wayne, NJ 07470 Tel: (973) 628-3700 Fax: (973) 628-4079 4) The MF Cachat Company c/o Robin C. Schade 14600 Detroit Avenue #600 Lakewood, OH 44107 Phone: (216) 228-8900 ext. 262 Fax: (216) 228-2196 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Johnson Rubber Headquartered in Middlefield, Ohio, Johnson Rubber Company Inc. -- http://www.johnsonrubber.com/-- designs, develops and manufactures polymer components. The company and its parent, JR Holding Corp., filed for Chapter 11 protection on December 11, 2007 (Bankr. N.D. Ohio, Lead Case No. 07-19391). William I Kohn, Esq., at Benesch Friedlander Coplan & Aronoff LLP, represents the Debtors in its restructuring efforts. The Debtors selected Donlin Recano as claims, noticing and balloting agent. The United States Trustee for Region 9 appointed four creditors to serve on an Official Committee of Unsecured Creditors in this cases. McGuireWoods LLP represents the Committee in this cases. When the Debtors filed for chapter 11 protection against their creditors, they listed $15,346,607 in total assets and $19,869,931 in total debts. JOSE LUZ: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Jose Luz Chiquito aka J. Luz Chiquito 720 Cottonwood Ct. Salinas, California 93905 Bankruptcy Case No.: 08-50549 Chapter 11 Petition Date: February 11, 2008 Court: North District of California Judge: Marilyn Morgan Debtor's Counsel: Charles B. Greene, Esq. Law Offices of Charles B. Greene 84 W. Santa Clara Street #770 San Jose, California 95113 Tel: (408) 279-3518 Total Assets: $2,616,225 Total Debts: $2,967,597 Debtor's list of its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Countrywide Home Loans real estate; $1,058,759 P.O. Box 10219 value of Van Nuys, CA security: $1,549,000; value of senior lien: $661455 Central Mortgage Co. real estate; $499,865 801 John Barrow #1 value of Little Rock, AR 72205 security: $500,000; value of senior lien: $8,272 Specialized Loan Servicing real estate; $98,471 P.O. Box 105219 value of Atlanta, GA 30348 security: $500,000; value of senior lien: $508,137 Countrywide Home Loans real estate; $73,880 value of security: $600,000; value of senior lien: $638,479 Ford Credit automobile; $73,656 value of security: $54,000 Beneficial Finance credit purchases $13,429 Wells Fargo purchases of $5,684 personal family items Carpeteria carpet for 732 $4,135 Yucatan Way Target National Bank purchases of $2,202 personal family items Wells Fargo Financial Bank carpet for 720 $2,510 Cottonwood LEVITT AND SONS: Abandons Interest in 8 Homeowners Associations --------------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates inform the U.S. Bankruptcy Court for the Southern District of Florida that they intend to abandon their right, title and interest in eight homeowners' associations: (a) Jesup's Reserve Townhomes Owners' Association, Inc. (b) San Simeon Phase I Residents' Association, Inc. (c) Seasons at Tradition Residents' Association Inc. (d) Cascades at Southern Hills Residents' Association, Inc. (e) Turtle Creek Residents' Association, Inc. (f) Cascades at Groveland Homeowners' Association, Inc, (g) Cascades at River Hall Residents' Association, Inc. (h) Rio Mar at Sarasota Residents' Association, Inc. According to Jordi Guso, Esq., at Berger Singerman, P.A., in Miami, Florida, the Homeowners' Associations relate to properties which have been abandoned by the Debtors pursuant to certain Court orders. The Debtors believe that the Homeowners' Associations are of inconsequential value and of benefit to their estates. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. The Debtors' exclusive plan filing period expires on March 8, 2008. (Levitt and Sons Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Depositors Want Claims Bar Date Fixed at March 11 ------------------------------------------------------------------ A deposit holders committee in Levitt and Sons LLC and its debtor- affiliates' Chapter 11 cases asks the U.S. Bankruptcy Court for the Southern District of Florida to extend, until March 11, 2008, the deadline wherein it must file proofs of claim. The Home Purchase Deposit Creditors Deposit Holders' Committee, which hold unsecured claims, relates that Kurtzman, Carson Consultants, L.L.C., the Debtors' claims agent, has transmitted proofs of claim to them as creditors of the Debtors. The Deposit Holders Committee relates that the proofs of claim it received were already completed, with a notation that if the creditor did not agree with the manner in which the proof of claim was completed, the claimant could change the amounts to reflect the amount due and owing, as asserted by the claimant. The Depositors Committee says that it realized that the Debtors and KCC were merely trying to facilitate the claims process by completing the proofs of claim. However, the procedure has created confusion among the Deposit Holders, Robert Charbonneau, Esq., at Ehrenstein Charbonneau Calderin, in Miami, Florida, proposed counsel for the Depositors Committee, notes. The Deposit Holders may wish to assert damage claims for breach of contract over and above certain statutory claims, he points out. KCC has been advising callers inquiring about the status of their claims that the firm is around 10 days behind in posting filed claims to its Web site, due to the large volume of claims being received. Mr. Charbonneau says that this has caused additional confusion and anxiety to the Deposit Holders who have timely filed claims, and concern that perhaps their claims have been lost or not received. The Depositors Committee tells the Court that its request applies only to Deposit Holders whose contracts have been rejected, as holders of purchase contracts that are not yet rejected would have an additional time to file claims as directed by the Court pursuant to Rule 3002(c)(4) of the Federal Rules of Bankruptcy Procedure. Mr. Charbonneau assures the Court that the Depositors Committee's request will not materially nor adversely affect the Debtors' estate. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. The Debtors' exclusive plan filing period expires on March 8, 2008. (Levitt and Sons Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: River Hall Panel Wants to File $10MM in Claims --------------------------------------------------------------- The Ad Hoc Committee for the Cascades at River Hall Residents' Association Inc., a community developed by Levitt and Sons LLC and its debtor-affiliates, asks the U.S. Bankruptcy Court for the Southern District of Florida to: (a) require the Debtors to file proofs of claim on behalf of the Cascades at River Hall Residents' Association, Inc.; or (b) in the alternative, authorize the Ad Hoc River Hall Committee to do so, and prosecute the Claims on the River Hall Association's behalf. The Ad Hoc River Hall Committee comprises Steven Reznitsky, Paul Rankin, Betsy Seligman, Howard Gottlieb, Joseph Metcalfe, Elizabeth Bryda, Bruce Peterson, and Russell A. Arent. The committee members are all homeowners at the Cascades of River Hall planned unit development in Alva, Florida, developed by Levitt and Sons, LLC, and Levitt and Sons at Hawks Haven, LLC. The River Hall Association owns the common areas and facilities of the Cascades of River Hall development and is charged with the maintenance, repair and upkeep of the Cascades of River Hall development on behalf of and for the benefit of the homeowners of Cascades of River Hall. The homeowners of Cascades of River Hall pay their proportionate share of maintenance fees on a periodic basis to the River Hall Association. Only 89 homes have closed at the Cascades of River Hall development. Thus, the River Hall Association is still under LAS Hawks Haven's control. The Ad Hoc River Hall Committee is concerned that the River Hall Association will not file and preserve the claims that the River Hall Association has against the Debtors that control it by the February 11, 2008 Claims Bar Date and thus, would allow the claims to be barred, lapse and compromised. Ivan J. Reich, Esq., at Becker & Poliakoff, P.A., in Fort Lauderdale, Florida, argues that if a claim is not filed in the Debtors' bankruptcy by the River Hall Association and those claims are lost, the homeowners will have to bear: -- the proportionate share of the expense for the Developers' share of contribution to the maintenance and upkeep of the community; -- the completion of unfinished or "unstarted" common elements and facilities; -- the fixing of defectively completed common elements and facilities; and -- the payment of clubhouse memberships for the homeowners. The Ad Hoc River Hall Committee believes that there are substantial claims aggregating $10,056,955, that the River Hall Association has, and should, assert against the Debtors. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. The Debtors' exclusive plan filing period expires on March 8, 2008. (Levitt and Sons Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LIBERTY TAX II: Dec. 31 Balance Sheet Upside-Down by $11.1 Million ------------------------------------------------------------------ Liberty Tax Credit Plus II L.P.'s consolidated balance sheet at Dec. 31, 2007, showed $29.0 million in total assets, $40.1 million in total liabilities, and ($8,095) in minority interests, resulting in a $11.1 million total partners' deficit. The company reported a net loss of $855,511 on total revenues of $1.6 million for the third quarter ended Dec. 31, 2007, compared with a net loss of $5.0 million on total revenues of $1.7 million for the corresponding period of 2006. Excluding discontinued operations, the company reported loss from operations of $848,448 for the third quarter of 2007, versus loss from operations of $828,848 for the third quarter of 2006. Rental income decreased approximately 8% for the three months ended Dec. 31, 2007, as compared to the corresponding period in 2006, primarily due to a decrease in occupancy at one Local Partnership affected by fire in 2006, partially offset by a decrease in vacancies at a second Local Partnership. Other income increased approximately $21,000 for the three months ended Dec. 31, 2007, as compared to the corresponding period in 2006, primarily due to an increase in interest income earned on sales proceeds being invested at the Partnership level and increases in miscellaneous tenants' charges and interest income due to higher cash balances at two Local Partnerships. Liquidity and Capital Resources The partnership's capital was originally invested in twenty-seven Local Partnerships. As of Dec. 31, 2007, the properties and the related assets and liabilities of fourteen Local Partnerships and the limited partnership interest in eight Local Partnerships were sold. In addition, as of Dec. 31, 2007, one Local Partnership has entered into an agreement to sell its property and the related assets and liabilities. Full text copies of the company's consolidated financial statements for the quarter ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?27f5 About Liberty Tax Liberty Tax Credit Plus II L.P. invests in other limited partnerships owning leveraged low-income multifamily residential complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, and to a lesser extent in Local Partnerships owning properties that are eligible for the historic rehabilitation tax credit. LITHIUM TECH: Amper Politziner Expresses Going Concern Doubt ------------------------------------------------------------- Amper, Politziner & Mattia, P.C. raised substantial doubt about the ability of Lithium Technology Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations since inception and working capital deficit. The company was in the development stage from Feb. 12, 1999, through Dec. 31, 2005. The year 2006 is the first year for which the company is considered an operating company and is no longer in a development stage. The company also has not filed its quarterly reports on Form 10-QSB for the fiscal quarters ended March 31, 2006, June 30, 2006 and September 30, 2006. These reports were delayed as a result of the restatement of its consolidated financial statements and change of auditors. The company posted a net loss of $20,289,000 on total sales of $2,799,000 for the year ended Dec. 31, 2006, as compared with a net loss of $10,582,000 on total sales of $1,803,000 in the prior year. At Dec. 31, 2006, the company's cash and cash equivalents were $1,976,000. Total liabilities as of Dec. 31, 2006, consist of current liabilities in the aggregate amount of $31,758,000. At Dec. 31, 2006, assets included $1,882,000 in inventories, property and equipment, net of depreciation, of $5,844,000, net intangibles of $140,000, prepaid expenses and other assets of $460,000 and debt issuance cost of $0. As of Dec. 31, 2006, its working capital deficit was $27,012,000 as compared to $22,299,000 at Dec. 31, 2005. The company expects to incur substantial operating losses as it continues its commercialization efforts. At Dec. 31, 2006, the company's balance sheet showed $10,750,000 in total assets and $31,758,000 in total liabilities, resulting in $21,008,000 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?27f3 About Lithium Technology Lithium Technology Corporation (OTC: LTHU) -- http://www.lithiumtech.com-- produces unique large-format rechargeable batteries under the GAIA brand name and trademark. The Company supplies a variety of military, transportation and back-up power customers in the U.S. and Europe from its two operating locations in Plymouth Meeting, Pennsylvania and Nordhausen, Germany. MANIS LUMBER: Case Summary & 46 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Manis Lumber Co. dba Wheeler's 2 Riverside Industrial Park Northeast Rome, GA 30161-7301 Bankruptcy Case No.: 08-40398 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Manis Lumber Co. 08-40398 Austell Builders Supply, Inc. 08-40399 Carl Building Supply, Inc. 08-40400 Landhaven, Inc. 08-40401 Madison Builders' Supply, Inc. 08-40402 Manis Building Center of Dalton, Inc. 08-40403 Subligna Wholesale Distribution, Inc. 08-40404 Manis Building Centers, Inc. 08-40405 Manis Wholesale Co. 08-40406 Pickens County Building Supply, Inc. 08-40407 Wheeler's, Inc. 08-40408 Sucia, Inc. 08-40409 Wheeler's of Carrollton, Inc. 08-40410 Wheeler's of Cartersville, Inc. 08-40411 Wheeler's of Cleveland, Inc. 08-40412 Wheeler's-Marietta, Inc. 08-40413 Wheeler's of Newnan, Inc. 08-40414 Rome Builder's Supply, Inc. 08-40415 North Metro Millwork Distributors, Inc. 08-40416 Waldron, Inc. 08-40417 Type of Business: The Debtors manufacture and distribute building materials to professional home builders in from about 20 locations in Georgia, Alabama, and North Carolina. Materials distributed include engineered, framing, and pressure-treated lumber, hardware, roofing, and stair parts. They also make trusses and wall panels, and provide door and window assembly, as well as installed sales. Chapter 11 Petition Date: February 11, 2008 Court: Northern District of Georgia (Rome) Judge: Paul W. Bonapfel Debtor's Counsel: G. Frank Nason, IV, Esq. Lamberth, Cifelli, Stokes, Ellis & Nason, P.A. 3343 Peachtree Road Northeast, Suite 550 Atlanta, GA 30326 Tel: (404) 262-7373 Manis Lumber Co's Financial Condition: Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million A. Manis Lumber Co's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bluelinx Corp. $957,474 4300 Wildwood Parkway Atlanta, GA 30339 Dairyman's Supply Co. $933,874 P.O. Box 2038 Gadsden, AL 35903 Guardian Building Products Superior Court, $837,738 979 Batesville Road Floyd County, GA; Greer, SC 29651 Case No. 07cv04697jfl001 Boise Cascade Building $758,542 Materials 1800 D. Montreal Station Tucker, GA 30084 Wachovia/Great Southern $619,493 Wood P. P.O. Box 934412 Atlanta, Ga 31143-4412 U.S. Lumber Group, Inc. $596,739 2160 Satellite Boulevard, Suite 450 Duluth, GA 30097 Moulding & Millwork, Inc. $420,032 (Carruth) 40 Hopson Road Southeast Acworth, GA 30102 Klumb Forest Products $315,485 23210 Highway 98, Suite B-1 Fairhope, AL 36532 Dixie Plywood Co. $287,443 2803 Pleasenthill Road Duluth, GA 30096 Primesource (GA) Receivables $271,713 2115 East Beltline Road Carollton, TX 75006 Masonite $262,563 1 North Dale Mabry Highway, Suite 950 Tampa, FL 33609 American Lumber Distributors Civil Court, $235,920 Jefferson County, AL; Case No. 01-cv-2007-902926 Huber Engineered Woods, L.L.C. $233,946 Sitka Forest Products $231,971 Howard Lumber Sales, Inc. $227,762 Welco Lumber Corp. $227,316 Owens-Corning Fiberglass $181,847 Norbord Industries, Inc. $171,160 Universal Stair Parts $165,461 Weyerhaeuser Co. $165,379 B. Austell Builders Supply, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Lumber Distributors Civil Court, $245,743 2405 republic blvd Jefferson County, Birmingham, AL 35201 AL; case no. 01- cv-2007-902926 C. Carl Building Supply, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Stanley D. Tabor landlord unknown 205 Faison Road Chapel Hill, NC 27517 D. Landhaven, Inc. does not have any creditors who are not insiders. E. Madison Builders' Supply, Inc. does not have any creditors who are not insiders. F. Manis Building Center of Dalton, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Lumber Distributors Civil Court, $245,743 2405 republic blvd Jefferson County, Birmingham, AL 35201 AL; case no. 01- cv-2007-902926 G. Subligna Wholesale Distribution, Inc. does not have any creditors who are not insiders. H. Manis Building Centers, Inc. does not have any creditors who are not insiders. I. Manis Wholesale Co's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Lumber Distributors Civil Court, $245,743 2405 republic blvd Jefferson County, Birmingham, AL 35201 AL; case no. 01- cv-2007-902926 Weyerhaeuser Co. Superior Court, $184,774 33663 Weyerhaeuser Way South Floyd County, GA; Federal Way, WA 98003 case no. 07cv05148jfl004 Idaho Timber Superior Court, $92,973 Drawer 100792 Floyd County, GA; Atlanta, GA 30384-0792 case no. 08cv000334jfl002 J. Pickens County Building Supply, Inc. does not have any creditors who are not insiders. K. Wheeler's, Inc's Eight Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Guardian Building Products $900,081 P.O. Box 207 Greenville, SC 29602 American Lumber Distributors Civil Court, $245,743 2405 republic blvd Jefferson County, Birmingham, AL 35201 AL; case no. 01- cv-2007-902926 Universal Star Parts $160,856 P.O. Box 429 Ballground, GA 30107-0429 Jeld-Wen Windows/Door $145,784 Randall Brothers, Inc. $79,969 Southern Forest Products, Inc. Superior court, $22,967 Lincoln County, NC; case no. 07cvs1981 Robert West/West $11,962 Rock and Angela Harden unknown L. Sucia, Inc. does not have any creditors who are not insiders. M. Wheeler's of Carrollton, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Southern Forest Products, Inc. Superior Court, $22,967 P.O. Box 890896 Lincoln County, Charlotte, NC 28289-0896 NC; case no. 07cvs1981 N. Wheeler's of Cartersville, Inc's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Lumber Distributors Civil Court, $245,743 2405 republic blvd Jefferson County, Birmingham, AL 35201 AL; case no. 01- cv-2007-902926 Southern Forest Products, Inc. Superior Court, $22,967 P.O. Box 890896 Lincoln County, Charlotte, NC 28289-0896 NC; case no. 07cvs1981 Howren Brothers Properties landlord unknown P.O. Box 200483 Cartersville, GA 30120 Morris Gentry landlord unknown O. Wheeler's of Cleveland, Inc. does not have any creditors who are not insiders. P. Wheeler's-Marietta, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Southern Forest Products, Inc. Superior Court, $22,967 P.O. Box 890896 Lincoln County, Charlotte, NC 28289-0896 NC; case no. 07cvs1981 Q. Wheeler's of Newnan, Inc's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Lumber Distributors Civil Court, $245,743 2405 republic blvd Jefferson County, Birmingham, AL 35201 AL; case no. 01- cv-2007-902926 Southern Forest Products, Inc. Superior Court, $22,967 P.O. Box 890896 Lincoln County, Charlotte, NC 28289-0896 NC; case no. 07cvs1981 R. Rome Builder's Supply, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Lumber Distributors Civil Court, $245,743 2405 republic blvd Jefferson County, Birmingham, AL 35201 AL; case no. 01- cv-2007-902926 S. North Metro Millwork Distributors, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Duke Realty L.P. landlord $0 3950 Shackleford Road, Suite #300 Duluth, GA 30096 T. Waldron, Inc's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mark Wilenkin landlord $0 Erwin Properties, L.L.C. 2175 Union Boulevard Bay Shore, NY 11706 MARK MILLER: Defaults on $12.4 Million Loan from Wachovia Bank -------------------------------------------------------------- Mark Miller, known for his Burns Court Villas, defaulted on his interest installments on a $12.4 million bank loan, Michael Braga writes for The Herald Tribune. The loan was spent on a 189-unit condominium project located on Beneva Road, the former spot of Old Forest Lakes golf course, Herald Tribune relates. According to Herald Tribune, Mr. Miller commenced construction on the condo in 2006, funded by Wachovia Bank's $47 million revolving credit. Mr. Miller had intended to put a golf course and the condo next to the property, Herald Tribune says. Mr. Miller is one of those who are adversely affected by the crisis in the housing industry. Wachovia asserted that Mr. Miller failed to sell 25 units by December 2006 and missed interest payments in November 2007, Herald Tribune relates. In addition, Mr. Miller was in default in November 2007 on a $3.96 million loan from M&I Bank used in Mr. Miiller's Enclave at Bay Isles project on Longboat Key, in Florida, Herald Tribune reveals. Herald Tribune says that the commercial values of the houses nearby has gone down owed to the development at Forest Lakes. People living near the area have been complaining about the dust and dirt from the old golf course coming into their pools and homes, Herald Tribune adds. Re/Max agent Wanda Kerr; Carl Taylor; and Sarasota Realty Inc. broker Mary Cole told Herald Tribune in an interview that it is hard to sell houses in the area unless the "pile of dirt" will "become a golf course again." However, Ms. Cole said that it is already a given that golf courses don't make money and will eventually close down, Herald Tribune says. She predicted that once the housing market becomes profitable again, a new developer will put up the condos in the area, Herald Tribune relates. But despite the adversities, Mr. Miller told Herald Tribune he can still finish the project, which is about 60% complete. He said that he has been negotiating with another investor and expressed his confidence on it, Herald Tribune adds. In March 2004, Mr. Miller bought the lot for $4.2 million, Herald Tribune reports. MATTRES GALLERY: Can Access OMG DIP Facility on Final Basis ----------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized Gallery Corp. dba Mattress Gallery to access up to $1,925,000, on an final basis, from the debtor-in-possession financing provided by OMG Acquisition Corporation. As reported in the Troubled Company Reporter on Nov. 14, 2007, the Debtor told the Court that it needs the DIP funds to, among others: -- satisfy working capital and operation needs; -- maintain relationships with vendors, suppliers and customers; and -- continue to fund payroll and capital expenditures. As adequate protection, the Debtor granted OMG: i) first priority liens on and security interests in (a) all of the Debtor's leasehold interests, (b) other prepetition assets that are unencumbered by the first priority lien of Kimco Securities Corporation, the Debtor's prepetition secured lender and (c) postpetition assets other than avoidance actions; ii) fully perfected liens on and security interests in all of the Debtor's assets that are subject to Kimco's first priority lien, which liens and security interests will be junior to Kimco's first priority lien but senior to all other liens and security interests; and iii) a superpriority administrative expense claim status pursuant to Sec. 364(c)(1) of the Bankruptcy Code. Kimco holds a $4.1 million claim against the Debtor, secured by a perfected first priority lien on the Debtor's accounts receivable, inventory, intangibles and other prepetition assets. Pursuant to the OMG Financing, the Debtor granted Kimco a replacement lien on all of Kimco's prepetition collateral as adequate protection. The Debtor also grants Kimco a second priority lien on the Debtor's leasehold interests, as adequate protection, behind OMG's first priority lien on such interests. About Mattress Gallery Headquartered in Commerce, California, Gallery Corp. dba Mattress Gallery filed for Chapter 11 protection on Nov. 1, 2007 (Bankr. D. Del. Case No. 07-11628). Donald J. Detweiler, Esq., and Sandra G.M. Selzer, Esq., at Greenberg Traurig, LLP, represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants as its claim agent. The U.S. Trustee for Region 3 have appointed creditors to serve on an Official Committee of Unsecured Creditor in this case. The Committee selects Klehr, Harrison, Harvey, Branzburg & Ellers LLP as counsel When the Debtor filed for protection from its creditors, it listed total assets and debts between $1 million and $100 million. MAXJET AIRWAYS: Taps Morten Beyer as Expert Valuation Consultants ----------------------------------------------------------------- MAXjet Airways Inc. asks the U.S. Bankruptcy Court for the District of Delaware for authority to employ Morten Beyer & Agnew as its expert valuation consultants nunc pro tunc Jan. 11, 2008. Morten Beyer will work closely with the Debtor and its professionals in providing advise with regard to a valuation of the Debtor's aviation assets. The firm is also expected to provide: a) maintenance adjusted appraisal of aircraft and engines at varying values with market commentary by aircraft type; b) line-by-line appraisal of rotable, repairable, and expendable parts with value type; c) industry analysis on a project-by-project basis, and d) expert witness and advisory support. Morten Beyer will bill the Debtor according to these fixed rates on a per item or per report basis: Project Rate ------- ---- Aircraft Appraisal $1,353 for the first aircraft of each type and $270 for each additional aircraft of the same type in the same report Engine Appraisal $541 for the first engine of each type and $270 for each additional engine of the same type in the same report Spare Part Appraisal $4,000 minimum, total cost depending on the number of items and detail of data provided Industry Analysis Quoted by specific assignment General Consulting Principals $400/hour EVP/SVP/Chief $350/hour MD/VP/Sr. Associate $275/hour Director/Associate $200/hour Manager/Associate $160/hour Analyst $115/hour Administrative $88/hour Expert Witness Consulting Principals/EVP/Chief $450/hour SVP/VP/MD $400/hour Other Staff $325/hour To the best of the Debtor's knowledge, the firm holds no interest adverse to the Debtor and its estates and is "disinterested" as that term defined in Section 101(14) of the Bankruptcy Code. Dulles, Virginia-based MAXjet Airways Inc. -- http://www.maxjet.com/-- is an all-business class, long-haul airline company. It has introduced scheduled services with flights from London Stansted Airport to New York. As of December, 2006, it leased five B767 aircraft. Its customers are both business and leisure travelers. At the airport, its product features check-in facilities located in primary terminals, security and a business class departure lounge and arrivals facility. Its flights features deep-recline seats (170 degree) spaced at a 60 inch pitch, portable entertainment systems, stowage space and business class catering. The Debtor filed for chapter 11 protection on Dec. 24, 2007 (Bankr. D. Del. Case No. 07-11912). The Debtor selected Pachulski Stang Ziehl & Jones LLP and Pillsbury Winthrop Shaw Pittman LLP as its bankruptcy counsels. Arent Fox LLP represents the Official Committee of Unsecured Creditors. The Debtor listed assets between $10 million and $50 million and debts between $50 million and $100 million when it filed for bankruptcy. MOHEGAN TRIBAL: Moody's Reviews Low-B Ratings for Likely Cut ------------------------------------------------------------ Moody's Investors Service placed Mohegan Tribal Gaming Authority's ratings on review for possible downgrade. Ratings affected include MTGA's Ba1 Corporate Family and Probability of Default ratings, Baa3 senior note rating, and Ba2 senior subordinated note ratings. The review for downgrade is in response to MTGA's recent announcement that its fiscal 2008 first quarter EBITDA was approximately 19% lower than the comparable prior year period. "This lower-than-expected EBITDA along with increased competition in the Northeast US, $1.1 billion of planned development activity in Pennsylvania and Connecticut combined, and a possible consumer- based recession, could make it more difficult for MTGA to achieve the post development debt/EBITDA target needed to maintain its current ratings, about 4.0 times", stated Keith Foley, Senior Credit Officer at Moody's. The EBITDA decline will also likely require that MTGA seek covenant waivers and/or amendments from its bank lending group. MTGA's debt/EBITDA for the latest 12-months ended Dec. 31, 2007 was 4.1 times, but is expected to increase further in the near- term as a result of expansion and development activity through the end of 2010. Moody's review will focus on the company's ability to achieve the post-development debt/EBITDA target of 4.0 times in light of the above mentioned challenges. Any downgrade would likely be limited to one-notch. MTGA owns and operates a gaming and entertainment complex located near Uncasville, Connecticut, known as Mohegan Sun, and a gaming and entertainment facility offering slot machines and harness racing in Plains Township, Pennsylvania, known as Mohegan Sun at Pocono Downs. MTGA reported net revenues of $1.6 billion for the latest 12-month period ended Dec. 31, 2007. OAK MESA: Section 341(a) Meeting Slated for February 20 ------------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of creditors in Oak Mesa Investors LLC's Chapter 11 case, on Feb. 20, 2008, at 2:00 p.m., at Room 1500, 300 Las Vegas Boulevard, South, Las Vegas, Nevada. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Corona, California, Oak Mesa Investors LLC and its Debtor-affiliates filed separate Chapter 11 protection from their creditors on Jan. 16, 2008, (Bankr. D. Nev. Case No.: 08- 10397.) Richard F. Holley, Esq. represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they had estimated assets and debts of $10 million to $50 million. OCEAN SPRAY: Moody's Reviews Low-B Ratings for Possible Upgrades ---------------------------------------------------------------- Moody's Investors Service placed under review for possible upgrade the ratings of Ocean Spray Cranberries, Inc., including the cooperative's Ba1 corporate family rating and Ba1 probability of default rating. LGD assessments are also subject to adjustment. Ratings under review for possible upgrade: -- Corporate family rating at Ba1 -- Probability of default rating at Ba1 -- Series A preferred stock rating at Ba3 (LGD6,100%) Ocean Spray's performance has strengthened over the past several years as management has reduced costs, invested in infrastructure and marketing, and nurtured products with growth potential such as CRAISINS sweetened dried cranberries. As a result, sales increased in the low double digits in fiscal 2006 and 2007, and reported EBIT margin (excluding costs for fruit acquisition) grew in the last fiscal year. Debt (including 75% of the cooperative's Series A preferred stock) has been stable for the past five fiscal years, despite higher capital expenditures in fiscal 2007 to expand capacity. Moody's review will focus on Ocean Spray's initiatives to maintain sales momentum; efforts to further boost margins in the face of rising input costs; capital expenditure programs; and treasury and financial policies, especially regarding cash investments, capital structure and payments to members. Ocean Spray Cranberries, Inc. based in Lakeville-Middleboro, Massachusetts, is an agricultural cooperative focusing on cranberry products including juice drinks, fresh cranberries and packaged cranberry food products such as CRAISINS sweetened dried cranberries. Revenues for the twelve months ended Nov. 30, 2007 were approximately $1.37 billion. OTTO BEYER: Section 341(a) Meeting Slated for February 25 --------------------------------------------------------- The U.S. Trustee for Region 21, will convene a meeting of creditors in Otto E. Beyer Enterprises Inc.'s Chapter 11 case, on Feb. 25, 2008, at 1:00 p.m., at Suite 600, 6th Floor, 135 West Central Blvd., Orlando, Florida. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Altoona, Florida, Otto E. Beyer Enterprises Inc. -- http://ottoebeyer.com/-- purchases and rehabilitates distressed homes for resale. The Debtor and its Debtor-affiliates filed for separate Chapter 11 protection on Jan. 28, 2008, (Bankr. M.D. Calif. Case No.: 08-00573.) Frank M. Wolff, Esq. of Wolff Hill McFarlin & Herron P.A. represents the Debtor in their restructuring efforts. Otto E. Beyer Enterprises Inc.'s disclosed financial condition showed total assets and debts of $10 million to $50 million. PARMALAT SPA: Milan Court Starts Trial Against Banks, et al. ------------------------------------------------------------ A court in Milan, Italy, has commenced trial against Citigroup Inc., UBS AG, Deutsche Bank AG, Morgan Stanley and nine individuals on charges of market rigging that led to Parmalat S.p.A.'s bankruptcy in December 2003, published reports say. Lawyers for the banks rejected claims that the concerned firms, as well as their current and former managers, withheld information on Parmalat's true financial situation prior to its collapse, Bloomberg News reports. Milan prosecutors accused the banks of disguising the terms of Parmalat bond sales and other financing from investors, thus helping Parmalat conceal its financial situation. Giuseppe Bana, a lawyer for UBS, said the bank had "absolutely nothing to do" with Parmalat's breakdown, Bloomberg News says. "Neither Citigroup nor its employees did anything wrong," Nerio Dioda, was quoted by Bloomberg News as saying. "Why would the bank have lent US$500 million to Parmalat if it thought it was in trouble?" In a statement, Citigroup said it is "convinced that the trial will finally prove that Citi and its employee are wholly innocent of the charges being brought and that, instead, it is the largest victim of the worst fraud in the history of modern Italy." Ten executives at Citibank, a unit of Citigroup, might face trial for abetting Parmalat S.p.A.'s financial collapse in December 2003. Bondholders Join Case Meanwhile, more than 40,000 bondholders asked to join the case as civil parties, seeking damages on top of provision for restitution if the banks are convicted, Dow Jones says. According to Reuters, market-rigging cases permit third parties to join and make a claim for damages. "Let's hope we'll see some results," Carlo Federico Grosso, who represents around 36,000 bondholders, told Bloomberg News. Judge Gabriella Manfrin reset the hearing to March 7, 2008, to allow more time to review the civil claims. "It will finally be proven in court that Citi is in fact a victim of this fraud," Citigroup said. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court Granted Parmalat Permanent Injunction. (Parmalat Bankruptcy News, Issue No. 97; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PARMALAT: Former Auditor Says He Warned of EUR170-Mil. Debt ----------------------------------------------------------- Maurizio Bianchi, a former employee of Grant Thornton, Parmalat SpA's auditor, testified in trial before a court in Milan, Italy, that he was aware of a EUR170,000,000 "accounting hole" six years before it filed for bankruptcy, the Associated Press reported. According to the AP, Mr. Bianchi said he reported his findings to Fausto Tonna, former chief financial officer of Parmalat. "But he told me to go ahead, and that the hole would have been filled in three years. That was also my hope," Mr. Bianchi told prosecutors. In Milan, Mr. Bianchi is charged with market rigging, obstructing Italy's market regulator and falsifying audits, together with Calisto Tanzi, Parmalat's founder, and other former auditors and bankers, the AP said. Mr. Bianchi has previously been sentenced to nine years in prison for fraudulent bankruptcy in another fast-track proceeding in Parma, Italy, the AP added. About Parmalat S.p.A. Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than $200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. The Parma Court has declared the units insolvent. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Parmalat has three financing arms: Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. Dairy Holdings and Food Holdings are Cayman Island special-purpose vehicles established by Parmalat S.p.A. The Finance Companies are under separate winding up petitions before the Grand Court of the Cayman Islands. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as Joint Provisional Liquidators in the cases. On Jan. 20, 2004, the Liquidators filed Sec. 304 petition, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York. In May 2006, the Cayman Island Court appointed Messrs. MacRae and Cleaver as Joint Official Liquidators. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court Granted Parmalat Permanent Injunction. (Parmalat Bankruptcy News, Issue No. 97; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). PIKE NURSERY: Judge Diehl Approves KPMG as Real Estate Advisor -------------------------------------------------------------- The Hon. Mary Grace Diehl of the United States Bankruptcy Court for the Northern District of Georgia authorized the Official Committee of Unsecured Creditors of Pike Nursery Holding LLC to retain Keen Consultants, the Real Estate Division of KPMG Corporate Finance LLC, and KPMG CF Realty LLC as its special real estate advisor. The firms are expected to: a) provide assistance in seeking and obtaining Court approval of the agreement including testimony and Court time related thereto; and b) provide assistance in obtaining Court approval for the sale of a property, which assistance may include responding to requests for information and preparing for an testifying in Court so long as testimony and Court appearance, per disposition property, begins and ends in one business day. The Committee tells the Court that the Debtor will pay the firms $14,000 retainer and the firms will return any portion of the retainer not attributed to fees and expenses, upon completion of the assignment. The firms' professionals and their compensation rates are: Designation Hourly Rate ----------- ----------- Managing Directors $700 Directors $600 Vice Presidents $500 Associates $375 Analysts $275 To the best of the Committee's knowledge the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Pike Nursery 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. As reported in the Troubled Company Reporter on Jan. 30, 2008, the Debtor's summary of schedules show assets of $32,825,851 and debts of $31,562,277. PLASTECH ENGINEERED: Court Okays Donlin Recano as Claims Agent -------------------------------------------------------------- Plastech Engineered Products, Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Donlin Recano & Company, Inc., as their claims, noticing and balloting agent. As reported in the Troubled Company Reporter on Feb. 11, 2008, the Debtors told the Court that the most effective and efficient manner by which to give notice and provide solicitation services, in light of the Debtor's huge creditor body, is to engage an independent third party to act as an agent of the Court. Donlin Recano is expected to, among other things: (a) assist the Debtors in the preparation and filing of the Debtors' schedules of assets and liabilities and statement of financial affairs; (b) prepare and serve required notices in the Debtors' Chapter 11 cases, including: * a notice of commencement of the Chapter 11 cases and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; * notice of the claims bar date; * notices of objections to claims; * notices of any hearings on a disclosure statement and confirmation of a plan of reorganization; * other miscellaneous notices as the Debtors or the Court may deem necessary for an orderly administration of the Debtors' Chapter 11 cases; and * assist in the publication of required notices, as necessary; (c) within five days after the service of a particular notice, prepare for filing with the Clerk's Office an affidavit of service that includes (i) a copy of the notice served, (ii) an alphabetical list of persons on whom the notice was served along with their addresses, and (iii) the date and manner of service; (d) maintain copies of all proofs of claim and proofs of interest filed in these cases; (e) maintain official claims registers by docketing all proofs of claim and proofs of interest in a claims database that includes information for each claim or interest asserted: * the name and address of the claimant or interest holder and any agent if the proof of claim or interest was filed by an agent; * the date the proof of claim or interest was received by Donlin Recano or the Court; * the claim number assigned to the proof of claim or proof of interest; and * the asserted amount and classification of the claim; (f) implement necessary security measures to ensure the completeness and integrity of the claims registers; (g) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; (h) maintain a current mailing list for all entities that have filed proofs of claim or interest and make that list available to the Clerk's Office or any party in interest upon request; (i) provide access to the public for examination of copies of the proofs of claim or interest filed in the Debtors' Chapter 11 cases without charge during regular business hours; (j) create and maintain a public access Web site setting the pertinent case information and allowing access to electronic copies of proofs of claim or interest; (k) record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and give notice of those transfers as required by Rule 3001(e); (l) assist the Debtors in the reconciliation and resolution of claims; (m) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; (n) assign temporary employees to process claims, as necessary; (o) comply with other conditions and requirements as the Clerk's Office or the Court may at any time prescribe; (p) provide balloting and solicitation services, including preparing ballots, producing personalized ballots and tabulating creditor ballots on a daily basis; and (q) provide other claims processing, noticing, balloting and related administrative services as may be requested from time to time by the Debtors. The Debtors will compensate and reimburse Donlin Recano for services rendered and expenses incurred in connection with their Chapter 11 cases pursuant to the terms and conditions of the Standard Claims Administration and Noticing Agreement dated Feb, 1, 2008. Donlin Recano's hourly rates for its professionals are: Designation Hourly Rate ----------- ----------- Senior Bankruptcy Consultant $200 Case Manager $180 - $200 Technology/Programming Consultant $115 - $195 Senior Analyst $115 - $175 Jr. Analyst $70 - $110 Clerical Staff $40 - $65 Louis A. Recano, president of Donlin Recano, assured the Court that neither the firm, nor any of its employees, is connected with the Debtors, their creditors, other parties-in-interest or the United States Trustee or any person employed by the Office of the U.S. Trustee. Donlin Recano is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Plastech Engineered Products Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtor's case. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Court Okays Donlin Recano as Claims Agent -------------------------------------------------------------- Plastech Engineered Products, Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Donlin Recano & Company, Inc., as their claims, noticing and balloting agent. As reported in the Troubled Company Reporter on Feb. 11, 2008, the Debtors told the Court that the most effective and efficient manner by which to give notice and provide solicitation services, in light of the Debtor's huge creditor body, is to engage an independent third party to act as an agent of the Court. Donlin Recano is expected to, among other things: (a) assist the Debtors in the preparation and filing of the Debtors' schedules of assets and liabilities and statement of financial affairs; (b) prepare and serve required notices in the Debtors' Chapter 11 cases, including: * a notice of commencement of the Chapter 11 cases and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; * notice of the claims bar date; * notices of objections to claims; * notices of any hearings on a disclosure statement and confirmation of a plan of reorganization; * other miscellaneous notices as the Debtors or the Court may deem necessary for an orderly administration of the Debtors' Chapter 11 cases; and * assist in the publication of required notices, as necessary; (c) within five days after the service of a particular notice, prepare for filing with the Clerk's Office an affidavit of service that includes (i) a copy of the notice served, (ii) an alphabetical list of persons on whom the notice was served along with their addresses, and (iii) the date and manner of service; (d) maintain copies of all proofs of claim and proofs of interest filed in these cases; (e) maintain official claims registers by docketing all proofs of claim and proofs of interest in a claims database that includes information for each claim or interest asserted: * the name and address of the claimant or interest holder and any agent if the proof of claim or interest was filed by an agent; * the date the proof of claim or interest was received by Donlin Recano or the Court; * the claim number assigned to the proof of claim or proof of interest; and * the asserted amount and classification of the claim; (f) implement necessary security measures to ensure the completeness and integrity of the claims registers; (g) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; (h) maintain a current mailing list for all entities that have filed proofs of claim or interest and make that list available to the Clerk's Office or any party in interest upon request; (i) provide access to the public for examination of copies of the proofs of claim or interest filed in the Debtors' Chapter 11 cases without charge during regular business hours; (j) create and maintain a public access Web site setting the pertinent case information and allowing access to electronic copies of proofs of claim or interest; (k) record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and give notice of those transfers as required by Rule 3001(e); (l) assist the Debtors in the reconciliation and resolution of claims; (m) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; (n) assign temporary employees to process claims, as necessary; (o) comply with other conditions and requirements as the Clerk's Office or the Court may at any time prescribe; (p) provide balloting and solicitation services, including preparing ballots, producing personalized ballots and tabulating creditor ballots on a daily basis; and (q) provide other claims processing, noticing, balloting and related administrative services as may be requested from time to time by the Debtors. The Debtors will compensate and reimburse Donlin Recano for services rendered and expenses incurred in connection with their Chapter 11 cases pursuant to the terms and conditions of the Standard Claims Administration and Noticing Agreement dated Feb, 1, 2008. Donlin Recano's hourly rates for its professionals are: Designation Hourly Rate ----------- ----------- Senior Bankruptcy Consultant $200 Case Manager $180 - $200 Technology/Programming Consultant $115 - $195 Senior Analyst $115 - $175 Jr. Analyst $70 - $110 Clerical Staff $40 - $65 Louis A. Recano, president of Donlin Recano, assured the Court that neither the firm, nor any of its employees, is connected with the Debtors, their creditors, other parties-in-interest or the United States Trustee or any person employed by the Office of the U.S. Trustee. Donlin Recano is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Plastech Engineered Products Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtor's case. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Lenders Want to Intervene in Chrysler Suit --------------------------------------------------------------- The Steering Committee of First Lien Term Loan Lenders in Plastech Engineered Products Inc. and its debtor-affiliates' Chapter 11 cases seeks authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to intervene in the Debtors' adversary proceeding against Chrysler LLC. Plastech Engineered is the borrower under a $265,000,000 Secured First Lien Term Loan Facility, which is guaranteed by certain of Plastech's subsidiaries. The Steering Committee consists of the beneficial holders of a majority in principal amount of the First Lien Term Loans, which are secured by substantially all of the assets of the Debtors. Goldman Sachs Credit Partners, L.P. -- as lead arranger, syndication agent, administrative agent, and collateral agent -- for the benefit of the First Lien Term Loan Lenders, holds a fully perfected first-priority lien on certain Fixed Collateral, which includes all equipment of Plastech and its Subsidiary Guarantors. Louis P. Rochkind, Esq., at Jaffe Raitt Heuer & Weiss, P.C., in Southfield, Michigan, notes that Section 1109(b) Bankruptcy Code, and Rule 7024(a)(1) and (2) of the Federal Rules of Bankruptcy Procedure, among others, allow the Steering Committee to intervene in the Adversary Proceeding as a matter of right. Mr. Rochkind asserts that because Chrysler LLC seeks to take possession of tooling regardless of any property interest of the Debtors or any lien of Goldman Sachs, disposing of this action may impair or impede the Steering Committee's ability to protect its interests. No other party adequately represents these interests, since the security interest of Goldman Sachs for the benefit of the First Lien Term Loan Lenders has priority over the equity interest, if any, in the Debtors' tooling and equipment, he avers. More Objections 1. BofA Bank of America, N.A., as prepetition revolver administrative agent, does not object (i) to Chrysler LLC resourcing its business, if the Court determines that Chrysler is allowed to do so under its contracts with the Debtors, and (ii) to Chrysler taking those assets it owns and for which it has paid in full. BofA, however, asks the Court to condition any lift stay order on Chrysler paying all accounts receivable owing to the Debtors issued in connection with the tools Chrysler seeks to repossess, and on Chryler purchasing all of the inventory it seeks to repossess. Rufus Thomas Dorsey, IV, Esq., at Parker, Hudson, Rainer & Dobbs, LLP, in Atlanta, Georgia, relates that Chrysler's accounts receivable and inventory, which totals more than $10,000,000, are part of the Prepetition Revolver Collateral on which BofA has a first priority perfected security interest. The Debtors also have a lien on the Tooling to secure payment of the amounts by Chrysler, Mr. Dorsey adds. Mr. Dorsey asserts that to the extent Chrysler has not paid the Accounts Receivable related to tooling purchase orders it issued, the Tooling remains inventory subject to the lien of the Prepetition Revolver Lenders. 2. GE Capital General Electric Capital Corporation asks the Court not to authorize Chrysler to take possession of the Equipment or to remove the Equipment from the Debtors' facilities. GECC relates that it has leased hundreds of pieces of equipment to the Debtors pursuant to prepetition lease agreements. GECC, according to Daniel G. Kielczewski, Esq., at Abbott Nicholson Quilter Esshaki & Youngblood, P.C., is in the process of determining whether any of the tools it leased to the Debtors are attached or fixed to any of the Debtors' equipment. Mr. Kielczewski says GECC may not be able to complete its determination before Chryler takes any Court-approved action with respect to the Tools. 3. Second Lien Debtholders Certain holders of approximately $75,000,000 of second lien claims assert that Chrylser has not property terminated its supply agreements with the Debtors. The 2nd Lien Debtholders note that Chrysler never gave the Debtors proper notice of the alleged defaults and termination of the agreements. The 2nd Lien Debtholders further assert that, to the extent the Chrysler Supply Agreements are executory contracts, the Debtors are entitled to the benefit of Chrysler's continued performance under those agreements, including the right to assume them pursuant to Section 365 of the Bankruptcy Code. The 2nd Lien Debtholders also argue that, to the extent that the Supply Agreements are something other than an executory contract, the Agreements are assets of the estate entitled to protection by the automatic stay and the Debtors are entitled to cure and reinstate them under a plan of reorganization. 4. Roush Manufacturing Roush Manufacturing, which made some of the tools Chrysler, seeks to recover, asks the Court not to lift the automatic stay to allow Chrysler to repossess the tools because Roush has not yet been fully paid for the tools it made. Roush has a perfected lien on the tools. About Plastech Engineered Products Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtor's case. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUALITY HOME: Chapter 11 Trustee Taps Irell as Special Counsel -------------------------------------------------------------- David Gould, the appointed Chapter 11 Trustee for Quality Home Loan's bankruptcy case, asks the United States Bankruptcy Court for the Central District of California for permission to employ Irell & Manella LLP as his special counsel. Irell & Manella will: a) complete the WARN Act Litigation and treatment of terminated employees; and b) perform other and further services as requested by the Trustee, which services are primarily intended to be in assistance to the Trustee in the first two months of transitioning the case from a debtor-in-possession, to the Trustee. The Trustee tells the Court that William N. Lobel, a partner of the firm, charges $895 per hour for this engagement. The firm's other professionals and their compensation rates are: Designation Hourly Rate ----------- ----------- Counsel $545-$790 Senior Counsel $545-$790 Partners $535-$790 Associates $275-$565 Legal Assistant $145-$380 Mr. Lobel assures the Court that the firm does not hold any interests adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Lobel can be reached at: William N. Lobel Irell & Manella LLP 840 Newport Center Drive, Suite 400 Newport Beach, California 92660-6324 Tel: (949) 760-0991 Fax: (949) 760-5200 http://www.irell.com/ Based in Agoura Hills, California, Quality Home Loans -- http://www.qualityhomeloans.com/-- is a residential hard money lender. The company does business as Clear Credit Capital, Last Chance Home Loans, Last Option Lending, and Q.H.L. Investments. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos. 07- 13003 through 07-13006). William N. Nobel, Esq. and Mike D. Neue, Esq. at Irell & Manella LLP represent the Debtors in their restructuring efforts. Eric. E. Sagerman, Esq. and David L. Wilson III, Esq. at Winston & Strawn LLP act as counsels to the Official Committee of Unsecured Creditors. David Gould, Chapter 11 Trustee, is represented by Lewis R Landau, Esq., at Lewis R Landau Attorney at Law. The Debtors' schedules disclose total assets of $130,319,336 and total debts of $177,043,476. QUALITY HOME: Trustee Taps Stanley Shure as Insurance Counsel ------------------------------------------------------------- David Gould, the appointed Chapter 11 Trustee for Quality Home Loans' bankruptcy case, asks the United States Bankruptcy Court for the Central District of California to employ the Law Offices of Stanley H. Shure as his special insurance coverage counsel. As the Trustee's special insurance counsel, Stanley Shure will assist him in identifying, maintaining and preserving insurance coverage that may be available to satisfy claims in the estate. The Trustee tells the Court that Stanley Shure will bill $350 per hour for this engagement. To the best of the Trustee's knowledge Stanley Shure does not hold any interests adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Mr. Shure can be reached at: Stanley H. Shure, Esq. Law Offices of Stanley H. Shure 2355 Westwood Boulevard, #375 Los Angeles, CA 90064 Tel: (310) 984-6945 Based in Agoura Hills, California, Quality Home Loans -- http://www.qualityhomeloans.com/-- is a residential hard money lender. The company does business as Clear Credit Capital, Last Chance Home Loans, Last Option Lending, and Q.H.L. Investments. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 21, 2007 (Bankr. C.D. Calif. Case Nos. 07- 13003 through 07-13006). William N. Nobel, Esq. and Mike D. Neue, Esq. at Irell & Manella LLP represent the Debtors in their restructuring efforts. Eric. E. Sagerman, Esq. and David L. Wilson III, Esq. at Winston & Strawn LLP act as counsels to the Official Committee of Unsecured Creditors. David Gould, Chapter 11 Trustee, is represented by Lewis R Landau, Esq., at Lewis R Landau Attorney at Law. The Debtors' schedules disclose total assets of $130,319,336 and total debts of $177,043,476. QUEBECOR WORLD: Moody's Assigns 'Ba2' Rating on $400 Mil. Sr. Loan ------------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. Overall, the ratings are a function of the facility's aggregate size relative to estimated coverage in either a going concern or wind-up scenario, the fact there is only $170 million of prior-ranking obligations, expectations that QWI will be cash flow positive over the expected life of the credit facilities, and expectations that the company will continue operations subsequent to creditor protection. This is balanced against execution risks stemming from concerns that creditors may not support a restructuring proposal sponsored by the same management/board that put the company in a position requiring creditor protection. The DIP facilities were sanctioned by court orders in both Canada and the United States. The rating action assumes that the terms of the Initial Order dated Jan. 21, 2008, and the Interim Order dated January 23 will be continued by way of permanent orders such that all pre-petition obligations will continue to be stayed for a substantial period beyond the existing expiry of Feb. 20, 2008. No affiliates outside of North America were included in the company's filing for creditor protection. Moody's had previously withdrawn ratings for all of the company's pre-petition obligations. The new ratings are assigned on a point-in-time basis, will not be monitored going forward, and therefore do not have an associated ratings outlook. Ratings assigned: Issuer: Quebecor World Inc., as Debtor-in-possession -- $400 million super priority Sr Sec Revolving Term Loan, rated Ba2 -- $600 million super priority Sr Sec Tern Loan, rated Ba3 QWI is the second largest commercial printer in the world. While the market is quite fragmented and no single company commands a significant market share, the company's stature suggests there is a market need for it to continue in some form. Consequently, while the company has not yet formulated definitive restructuring plans, there is a good probability of QWI's operations continuing subsequent to creditor protection. This perspective is reinforced by the background to the company's filing for creditor protection. While operating cash flow was weak, it was expected to be modestly positive in 2008 and 2009. The company's failure to appropriately manage its debt maturities and other liquidity needs during a period of elevated capital spending were key factors that led to the decision to file for creditor protection. The ratings assigned to the DIP facilities assume that, given an appropriate capital structure and financing arrangements and given the potential of creditor protection being used to facilitate permanent cost reductions, the company will be cash flow self- sufficient over the near term. Consequently, presuming a restructuring plan is accepted by the various constituents, the DIP facility is expected to be covered, even with a conservative EBITDA estimate of $400 million and a tepid valuation multiple of 4x. Recall as well that only the $600 million term loan portion of the DIP facility is initially drawn and that QWI spent significant amounts to re-tool its plants over the past three years. With a significantly reduced interest burden, lower capital expenditures, and minimal income tax leakage, QWI needs to generate only $250 million of EBITDA to cover estimated interest expense, income tax, and capital expenditures. With 2008 and 2009 EBITDA estimated to be well in excess of these cash requirements, with all other debts being stayed, and with the court-appointed Monitor acting to ensure that cash flow is not deployed on non-essential matters, it is not likely that the revolving DIP facility will feature significant usage. This implies that coverage calculations based on the $1.0 billion aggregate facility limit may be conservative relative to what actual refinancing requirements will be. At the same time, while the above analysis suggests there should be enough value to cover the DIP facilities, given the incumbent board's and management's role in the events leading up to the company's filing, there is the potential that some constituents will insist on material governance changes before agreeing to a restructuring proposal. This could lead to negotiation delays and, potentially, value erosion. This factor complicates the risk assessment and weighs on the rating. In addition to the probability that QWI will remain a going concern and successfully reorganize and emerge from bankruptcy, the DIP facility ratings also consider the extent of protection provided to DIP lenders by the liquidation value and character of the collateral. While asset liquidation values are not likely to provide the same coverage as the enterprise's going concern value, the DIP facility appears to be covered even in this scenario. As background, QWI competes in an industry plagued by over- capacity and low profitability. North American utilization rates are in the 70% range. Given QWI's poor profitability in Europe, it is likely that a similar situation exists there as well. With fears of a U.S. recession looming, and with 80% of QWI's operating assets based in North America, industry conditions could worsen during this important period. This suggests that even with a relatively new asset base, a significant discount to book value would likely be required in order to sell the relevant assets. In addition, 20% of QWI's assets are located in Europe and Latin America where laws regulating the conveyance and realization of security are not nearly as creditor friendly as is the case in North America. Even for seemingly liquid receivables and inventory, realization values may be at a significant discount to book. While the aggregate of these influences may cause creditors to be more willing to support a restructuring plan, in the event this is not the case, recovery values may be only nominally in excess of the security arrangements sanctioned by the courts. Assuming a 40% recovery on $200 million of inventory, 60% recovery on $925 million of accounts receivable and a 30% recovery on $2.1 billion of net PP&E, there would be only approximately $1.2 billion of liquidation proceeds. After applying the initial $170 million of proceeds against prior ranking claims, there would be enough value to cover the DIP facility (were it fully drawn). Note however, that there are two classes of lenders under the DIP credit agreement, and that each has its own collateral pool. Based on the above estimates, coverage of the RTL is superior to that of the TL. The TL is rated Ba3 and the RTL is rated one notch higher at Ba2. The courts identified three super priority claims: i) $170 million of claims relating to the company's pre- petition bank credit facility; ii) the $1.0 billion DIP facility; and iii) up to C$32 million for potential director and officer related matters. All pre-petition claims were stayed. Otherwise, this is the same company, with the same assets, operations, and management as it had prior to seeking creditor protection. Since the company has not outlined a definitive restructuring plan, it is assumed that it has the same general operating plan. Consequently, the only significant changes to pre-petition financial forecasts are that interest expenses are reduced by approximately $150 million per year. Based on this assumption, and with capital expenditures contractually limited by the DIP facility to less than $150 million per year, it is expected that QWI will be cash flow positive over the near term. Proceeds of the $600 million DIP term loan were used to refinance approximately $418 million of accounts receivable funding, to fund strategic payments, and to pay certain fees and expenses. The $400 million DIP revolving credit facility is available to support working capital requirements and for general corporate purposes. Until the Final Order is delivered by the court, only $150 million of the facility is available; the full $400 million limit is available upon a Final Order being rendered. In any case, the revolving credit facility is governed by a borrowing base consisting of: i) 85% of eligible accounts receivables, plus ii) the lesser of 85% of orderly liquidation value of eligible inventory or 65% of eligible inventory, net of reserves, and (subject to the security pledged to the $170 million pre-petition bank credit facility) benefits from a first charge on North American accounts receivable and inventory and a second charge on North American fixed assets. The term loan benefits from a first charge on North American fixed assets and a second charge on North American accounts receivable and inventory (also subject to the security pledged to the $170 million pre-petition bank credit facility). In addition, the DIP facilities are guaranteed by substantially all of QWI's direct and indirect subsidiaries; the guarantees are supported by share pledges. The facility matures at the earlier of 18 months from the date of the interim order (i.e. July 23, 2009) or the date of substantial consummation of a Plan of Reorganization. Key covenants include the above-noted $150 million limitation on annual Capital Expenditures. As well, QWI will be required to maintain a minimum level of EBITDAR (EBITDA as defined with adjustments for restructuring expenses, bankruptcy administration costs as well as certain other non-recurring costs) as per a set schedule, on a global basis. QWI will also be required to maintain a minimum liquidity availability of at least $50 million on any business day. With these conditions and with oversight provided by the court-appointed Monitor, QWI will not be able to deviate materially from the status quo while it is protected from creditors. This should act to preserve value for all constituents. Headquartered in Montreal, Quebec, Canada, Quebecor World Inc. as a Debtor in Possession is one of the world's largest commercial printers. REFCO INC: Court Moves Claim Objection Deadline to April 30 ----------------------------------------------------------- RJM, LLC, the plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner, the plan administrator to Refco Capital Markets, Ltd., obtained an April 30, 2008 extension of their deadline to object to requests for payment of administrative expense claims and prepetition claims. Steven Wilamowsky, Esq., at Bingham McCutchen, LLP, in New York, relates that, since Refco's bankruptcy filing in October 2005, 14,400 filed claims and 8,300 unfiled claims have been addressed by the U.S. Bankruptcy Court for the Southern District of New York. The Plan Administrators currently have 200 claims subject to objections, and 100 claims for additional claims resolution. Mr. Wilamowsky says roughly 225 claims were asserted as administrative claims against either RCM or the Reorganized Debtors. The Plan Administrators have fully administered and resolved 215 of the 225 claims. According to Mr. Wilamowsky, the extension is appropriate to complete the claims reconciliation process and will ensure that all non-meritorious claims are properly challenged. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: Sale of 35% Equity Stake in FXCM Consummated ------------------------------------------------------- RJM, LLC, the plan administrator to reorganized Refco, Inc. and its affiliates, and Marc S. Kirschner, the plan administrator to Refco Capital Markets, Ltd., notified the U.S. Bankruptcy Court for the Southern District of New York that the sale of Refco Group Ltd.'s 35% equity interest in Forex Capital Markets, LLC, has been consummated. The names of the purchasers had been withheld for confidentiality purposes, according to Steven Wilamowsky, Esq., at Bingham McCutchen LLP, in New York. As reported in the Troubled Company Reporter on November 29, 2007, the Plan Administrators asked the Court to approve their settlement agreement with Forex Capital Markets, LLC, Forex Trading LLC, FXCM Canada Ltd., FXCM LLC, David Sakhai, William Ahdout, Kenneth Grossman, Michael Romersa, and Edward Yusupov. Reorganized Refco Group Ltd. holds a 35% equity interest in Forex Capital Markets, LLC. Pursuant to Refco's confirmed Chapter 11 Plan, RJM has authority to exercise Refco's rights in respect of RGL's 35% interest in FXCM, including all rights related to its liquidation or disposition. The sale of RGL's interest is subject to the requirement that certain claims against the Refco parties and RCM be resolved. The Settlement Agreement provides that: a. The Plan Administrators will seek Court approval allowing the claims filed by the FXCM Parties: 1. Claim No. 9140, to be allowed as a Class 6 FXA Convenience Class Claim for $3,290.87 under the Plan; 2. Claim No. 9870, to be allowed as a Class 5(a) FXA General Unsecured Claim for $8,281,529.63; 3. Claim No. 9871, to be allowed as a Contributing Debtor Class 5(a) General Unsecured Claim for $8,281,529.63. b. The Plan Administrators ask Court to expunge FXCM Parties' 31 other claims -- Claim Nos. 6629, 6630, 6631, 6632, 6633, 6634, 6635, 6636, 6637, 7564, 7566, 7568, 7569, 7570, 7571, 7572, 14268, 14269, 14270, 14271, 14272, 14273, 14274, 14275, 14276, 14427, 14428, 14429, 14430, 14431, 14432. Jeffrey M. Olinsky, Esq., at Bingham McCutchen LLP, in New York, told the Court the Plan Administrators have carefully reviewed the claims filed by the FXCM Parties, as well as the books and records of the Reorganized Debtors and RCM as they relate to the claims. The Plan Administrators believe that Claim Nos. 9140, 9870 and 9871 are properly allowable at the amounts set, and the rest of the FXCM Parties' claims should be expunged. Mr. Olinsky said the FXCM Parties agree that the 31 other claims should be expunged. "Expunging these other claims will eliminate 31 claims against the Reorganized Debtors' and RCM's estates that seek damages based on alleged fraudulent conduct of the Debtors," he said. Mr. Olinsky noted the Agreement would result in proceeds from the sale of RGL's 35% equity interest in FXCM becoming available for distribution to creditors of the Contributing Debtors. The Court approved the Settlement Agreement in December. A full-text copy of the FXCM Settlement Agreement is available for free at http://bankrupt.com/misc/FXCMsettlementAgreement.pdf About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News, Issue No. 76 Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). REFCO INC: SPhinX Liquidators Want Protective Order Eased ---------------------------------------------------------- Kenneth M. Krys and Christopher Stride, in their capacity as the Joint Official Liquidators of SPhinX, Ltd., SPhinX Macro Fund, SPhinX Managed Futures Fund SPC, et al., ask the U.S. Bankruptcy Court for the Southern District of New York to modify a protective order dated April 26, 2006, and amended on March 19, 2007, governing the use of certain confidential material. SPhinX seeks to allow Marc S. Kirschner, as Plan Administrator for Refco Capital Markets, Ltd., and at the same time, as Refco Litigation Trustee, to produce certain documents. On behalf of the SPhinX Liquidators, David J. Molton, Esq., at Brown Rudnick Berlack Israels LLP, in New York, relates that the Protective Order was issued with respect to the documents gathered at the Refco examiner's investigation of the Debtors' Chapter 11 cases. The Protective Order allows disclosure of confidential documents if the producing party consents, or if the Court issues an order. According to Mr. Molton, certain parties transferred hundreds of millions of dollars in SPhinX assets from Refco, LLC, to RCM, where it comingled with the assets RCM and its other customers. A discovery is being held at the Grand Court of the Cayman Islands investigating the facts, circumstances, and events that led to the collapse of SPhinX, Mr. Molton says. Under a Court- approved settlement agreement between the parties, Mr. Kirschner will "not oppose any attempt by the Joint Official Liquidators to obtain relief from any confidentiality restrictions." Mr. Molton maintains that the information sought by SPhinX is critical to the Cayman Court investigation of the assets, liabilities and financial affairs of the SPhinX Funds. Ernst & Young, et al., Object Seven objecting parties separately ask U.S. Bankruptcy Judge Robert D. Drain to refrain from amending the protective order governing the use of certain confidential materials. The parties are: -- Ernst & Young LLP; -- Credit Suisse Securities (USA) LLC, formerly known as Credit Suisse First Boston LLC), Banc of America Securities LLC, Deutsche Bank Securities Inc., Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc., Sandler O'Neill & Partners, L.P. and HSBC Securities (USA) Inc.; -- Thomas H. Lee Partners, L.P.; -- Grant Thornton LLP; -- PricewaterhouseCoopers; -- Arthur Andersen LLP; and -- Bank fur Arbeit und Wirtschaft und Osterreichische Postparkasse Aktiengesellschaf. According to the Objecting Parties, the SPhinX Liquidators are seeking to obtain pre-litigation discovery that Bankruptcy Judge James M. Peck has already denied other Sphinx Funds representatives in In re PlusFunds Group, Inc. The Objecting Parties assert that the SPhinX Liquidators are pursuing effectively the same request, for the same stated reasons, and through the same counsel, which the Sphinx Trust asserted and lost in the PlusFunds bankruptcy case. Ernst & Young tells Judge Drain that it has no direct connection to SPhinX or their estates, except for the tax work Ernst & Young performed for certain Debtors in the tax year 2002. Ernst & Young adds that the SPhinX Liquidators did not explain how its preparation of the Debtors' tax returns could have affected SPhinX Funds. The SPhinX Liquidators seek pre-litigation access to confidential documents in which they are fundamentally disinterested, Ernst & Young contends. He also notes that that the extensive existing record of Refco Inc. examiner's investigation are publicly available, enabling the SPhinX Liquidators to evaluate their potential claims. Furthermore, the Underwriters, Credit Suisse et al., argue that the Motion exceeds the scope of Rule 2004 of the Federal Rules of Bankruptcy Procedure and Section 1521 of the Bankruptcy Code. Rule 2004 limits any examination only to the acts, conduct, or property or to the liabilities and financial condition of the debtor, or to any matter which may affect the administration of the debtor's estate, or to the debtor's right to a discharge. Section 1521(a)(4) provides for discovery concerning the debtor's assets, affairs, rights, obligations or liabilities. The Underwriters, together with TH Lee, Grant Thornton, Arthur Andersen, and PwC, argue that the Foreign Representatives seek information that has nothing to do with the Sphinx Funds' assets, affairs, rights, obligations or liabilities. They further stated that Judge Peck had found, in the PlusFunds proceeding, that the Sphinx Trustee did not need any further document production to determine any causes of action against third parties, and that any additional document discovery should occur pursuant to the Federal Rules. Grant Thornton also states that it opposes the Motion, but if the Court permits Marc S. Kirschner, as Refco Capital Markets, Ltd. Plan Administrator and Refco Litigation Trustee, to produce any documents, the SPhinX Liquidators should be subject to the same confidentiality restrictions as applied to Mr. Kirschner and the Refco Examiner. Meanwhile, Arthur Andersen LLP tells Judge Drain that its work for Refco predates SPhinX Funds' existence. BAWAG argues that it is inappropriate to lift the protections afforded to the producing parties to SPhinX Funds, a non-estate, non-fiduciary party, simply because it alleges possible claims against parties in Refco's bankruptcy case. Additionally, BAWAG maintains that the relief requested has no direct connection to the proceedings in the Grand Court of the Cayman Islands. SPhinX Liquidators Talk Back The SPhinX Liquidators tell Judge Drain that the information they seek regarding SphinX's funds at RCM, and the redemptions of investments in SPhinX Funds through Refco's related entities during 2005 and 2006, is "absolutely critical" to the investigation of the SPhinX Funds assets, liabilities and financial affairs, and the determination of the rights and remedies that they may pursue on behalf of the SPhinX Funds. The SPhinX Liquidators state that the Objections contain two common threads: -- the discovery exceeds the proper scope of discovery under Rule 2004 and Section 1521; and -- the discovery was previously determined to be improper by Judge Peck in PlusFunds' bankruptcy case. With regard to scope, the SPhinX Liquidators insist that they are acting in accordance with a Settlement Agreement with Mr. Kirschner, allowing them to seek the proposed discovery. Moreover, the SPhinX Liquidators assert that the proposed discovery is closely related to SPhinX Funds' affairs, as impacted by the unlawful transfer of SPhinX assets to non- segregated accounts with RCM. The SPhinX Liquidators maintain that close relationship between SPhinX Funds claims, the Objecting Parties, and other Refco- related entities, demonstrates that Judge Peck's holding in the PlusFunds case are inapplicable to the SphinX Funds case, since the PlusFunds claims are distinct from the SphinX Funds claims. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity's exclusive period to file a chapter 11 plan expired on Feb. 13, 2007. (Refco Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). RANCHO DEL SOL BRILLANTE: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Rancho Del Sol Brillante, L.L.C. 2141 East Highland, Suite 160 Phoenix, AZ 85016 Bankruptcy Case No.: 08-01321 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: February 12, 2008 Court: District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: David W.M. Engelman, Esq. Engelman Berger, P.C. 3636 North Central Avenue, Suite 700 Phoenix, AZ 85012 Tel: (602) 271-9090 Fax: (602) 222-4999 Estimated Assets: $50 Million to $100 Million Estimated Debts: $10 Million to $50 Million The Debtor did not file a list of its largest unsecured creditors. REMINGTON ARMS: Theodore Torbeck Named Chief Operating Officer -------------------------------------------------------------- Remington Arms Company Inc. disclosed, in a regulatory filing that Theodore H. Torbeck has joined the company as chief operating officer. Prior to his employment with Remington, Mr. Torbeck, age 51, had been an employee of General Electric Company since 1978, serving in various positions, including the vice president operations of GE Industrial from 2006 to 2008, president and chief executive officer of GE Rail Services from 2003 to 2006, and vice president and general manager - Global Supply Chain of GE Aircraft Engines from 2000 to 2003. The company also disclosed that on Feb. 4, 2008, John DeSantis ceased to serve as president, Firearms Operations for the company. Mr. DeSantis assumed a position as Remington's chief technology officer. About Remington Arms Headquartered in Madison, North Carolina, Remington Arms Company Inc. -- http://www.remington.com/-- designs, produces and sells sporting goods products for the hunting and shooting sports markets, as well as solutions to the military, government and law enforcement markets. Founded in 1816 in upstate New York, the company is one of the nation's oldest continuously operating manufacturers. The company is the only U.S. manufacturer of both firearms and ammunition products and one of the largest domestic producers of shotguns and rifles. The Company distributes its products throughout the U.S. and in over 55 foreign countries. * * * Moody's Investor Service placed Remington Arms Company Inc.'s long-term corporate family and probability of default ratings at 'B2' in May 2007. The ratings still hold to date with a stable outlook. RH DONNELLEY: S&P Changes Outlook to Negative; Holds 'BB-' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on R.H. Donnelley Corp. to negative from stable. Ratings on the company, including the 'BB-' corporate credit rating, were affirmed. The outlook revision reflects S&P's concerns that the slowing economy could negatively impact 2008 operating performance at a time when RHD has limited flexibility in its leverage profile. Total debt (adjusted for operating leases and expected pension and postretirement liabilities) to EBITDA (adjusted for the effects of purchase accounting rules, operating leases, and stock-based compensation) was about 7x at September 2007--the upper end of S&P's target leverage for the current rating. S&P believes that RHD has not reduced leverage in 2007, as S&P expects that EBITDA declined year over year. Also, cash flow from operations was mostly absorbed by the $345 million acquisition of Business.com (a business search engine and directory, and pay-per-click advertising network) and capital expenditures. Still, the company generates significant free cash flow and has a meaningful ability to repay debt. Moderately offsetting this capability is the company's November 2007 announcement that it would repurchase up to $100 million in share repurchases over the subsequent 12 months, and the October 2007 announcement that it would pay a cash common dividend of approximately 25% of free cash flow (or about $155 million based on the current forecast of about $620 million in free cash flow in 2008) concurrent with its first-quarter 2008 earnings release in April 2008. "We anticipate that the dividend and share repurchases will reduce the pace of de-leveraging this year," said Standard & Poor's credit analyst Emile Courtney. The rating on Cary, North Carolina-based RHD reflects the company's substantial consolidated debt levels (relative to cash flow) resulting from major acquisitions over the past several years. RHD's incumbent market positions, stable cash flow generation, and geographic and customer diversity somewhat mitigate this. RH DONNELLEY: Fitch Assigns 'B+' Issuer Default Rating ------------------------------------------------------ Fitch has published a full report on R.H. Donnelley Corp. and subsidiaries R.H. Donnelley, Inc., Dex Media, Inc., Dex Media East and Dex Media West. Given weakness in the company's stock price, Fitch believes management will continue to balance debt repayment with returns of capital to shareholders, including the recently instituted dividend and stock buyback. Fitch also expects leverage levels will remain above management's stated target of 5.5 times-6x for the next three to five years. There has been and remains moderate capacity for some sustained top line revenue softness and modest additional shareholder friendly actions incorporated into the Issuer Default Rating. The Rating Outlook remains Stable. Fitch currently rates RHD and its subsidiaries as: R.H. Donnelley Corp. (RHD Holding Company) -- Issuer Default Rating 'B+'; -- Senior unsecured 'B/RR5'. R.H. Donnelley Inc. (Operating Company; subsidiary of RHD) -- IDR 'B+'; -- Bank facility 'BB+/RR1'. Dex Media, Inc. (Dex Holding Company; subsidiary of RHD) -- IDR 'B+'; -- Senior unsecured 'B/RR5'. Dex Media East, Inc. (Operating Company; subsidiary of Dex) -- IDR 'B+'; -- Bank facility 'BB+/RR1'. Dex Media West, Inc. (Operating Company; subsidiary of Dex) -- IDR 'B+'; -- Bank facility affirmed at 'BB+/RR1'; -- Senior unsecured 'BB+/RR1'; -- Senior subordinated 'B/RR5'. RICHARD RANDALL: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Richard J. Randall III 6013 Niagara Drive Elkridge, Maryland Bankruptcy Case No.: 08-11912 Chapter 11 Petition Date: February 11, 2008 Court: District of Maryland Judge: Debtor's Counsel: Jeffrey M. Sirody, Esq. Sirody Freiman & Feldman 1777 Reisterstown Road Suite 360 E Baltimore, Maryland 21208 Tel: 410-415-0445 Fax: 410-415-0744 Estimated Assets: less than $50,000 Estimated Debts: $1,000,001 to $10 million Debtor's list of its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ The Washington Savings Bank real estate $203,000 4201 Mitchellville Road Suite 100 Bowie, MD 20716 Green Point Savings 4106 Eierman $45,000 4160 Main Street Flushing, NY 11355 Bank of America Credit card $5,500 PO Box 27025 purchases Richmond, VA 23261 Provident Bank Loan $4,919 Fair Finance Collection $2,476 account charge off Arrow Financial Service A.F.S. Assignee $2,476 of Household B Bradford Bank Foreclosed $1,000 Property Deficiency Sprint services $534 Suntrust Bank services $355 The Home Depot Credit card $92 purchases ROTECH HEALTHCARE: Requests Transfer to NASDAQ Capital Market ------------------------------------------------------------- Rotech Healthcare Inc. has disclosed to the U.S. Securities and Exchange Commission that, as authorized by its board of directors, the company submitted on Feb. 8, 2008, a transfer application to NASDAQ to transfer its common stock listing from the NASDAQ Global Market to the NASDAQ Capital Market. On Nov. 16, 2007, the NASDAQ Stock Market notified the company that its common stock has not maintained the minimum market value of publicly held shares of $15.0 million required for continued listing on the NASDAQ Global Market pursuant to Marketplace Rule 4450(b)(3). In accordance with Marketplace Rule 4450(e)(1), the company was provided with ninety (90) calendar days, or until Feb. 14, 2008, to regain compliance. If compliance with Rule 4450(b)(3) could not be demonstrated by Feb. 14, 2008, then NASDAQ would provide written notification to the company that its securities will be delisted. At that time, the company would be permitted to appeal NASDAQ's determination to a Listings Qualification Panel. In the alternative, the company could seek to transfer its listed securities to the NASDAQ Capital Market with its less restrictive continued listing requirements by submitting a transfer application to NASDAQ by Feb. 14, 2008. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. * * * To date, Rotech Healthcare Inc. still carries Standard & Poor's 'B-' corporate credit rating assigned on March 29, 2007. Outlook is Negative. SANTA FE ENERGY: Trustee Seeks NYSE Delisting, Distributes Funds ---------------------------------------------------------------- The Bank of New York Trust Company, N.A., as trustee of Santa Fe Energy Trust, notified the New York Stock Exchange that it is requesting the delisting of the Trust on February 15, 2008. The Trustee expects that transfer of the Trust's units will be halted at the close of business on February 14, 2008. The Trustee intends to distribute the net proceeds of the sale of the Trust's assets -- after deducting amounts necessary to pay all fees, expenses, liabilities and other obligations of the Trust, and after setting aside any amounts the Trustee determines to hold in reserve, and subject to any post-closing adjustments under the purchase agreement -- on February 29, 2008 to unitholders of record at the close of business on February 14, 2008. The distribution will be made concurrently with the Trust's distribution for the quarter ending December 31, 2007. The United States Treasury book-entry securities representing stripped-interest coupons held by The Bank of New York Trust Company, N.A. as Custodian mature on February 15, 2008. The cash proceeds from the matured Treasury Obligations on deposit with the Custodian will be distributed as promptly as practicable. Unitholders of record will be required to deliver their Secure Principal Energy Receipts in exchange for the payment. The Trustee will mail each unitholder of record instructions for submitting SPER Certificates to Bondholder Communications. The instructions will include a letter of transmittal for submitting a unitholder's SPER Certificates to the Processing Agent in exchange for cash proceeds from the matured Treasury Obligations. Unitholders should not destroy any SPER Certificates and should not submit any SPER Certificates to the Trustee or the Processing Agent until they receive instructions and the letter of transmittal, the Trustee said. Surrender of a unitholder's SPER Certificates along with the letter of transmittal will be required unless the unitholder's SPER Certificates have been lost, stolen, misplaced or mutilated. Unitholders whose SPER Certificates have been lost, stolen, misplaced or mutilated should follow the instructions from the Trustee or contact the Processing Agent at 1-800-275-2048. If a unitholder's Trust units are held in a brokerage account, the unitholder will not receive a letter of transmittal, but should contact the broker for instructions. After the liquidation of the Trust, the Trustee will continue to act as trustee of the trust estate until the trust estate has been finally distributed and the affairs of the Trust have been wound up. On February 5, the Trust announced the Trust income distribution for the operating quarter ended December 31, 2007, wherein unitholders will receive a distribution amounting to $4,311,544 or $0.68437 per unit. The Trust sold its assets on December 18, 2007. SANTA ROSA BAY: Fitch Puts 'BB-' Bonds Rating Under Neg. Watch -------------------------------------------------------------- Fitch Ratings places the 'BB-' underlying rating on approximately $116 million in outstanding Santa Rosa Bay Bridge Authority's, Florida, revenue bonds, series 1996 on Rating Watch Negative. The authority's revenue generating asset is the Garcon Point Bridge, which traverses the Pensacola Bay from Garcon Point on the mainland to the Gulf Breeze Peninsula to the south. The Negative Watch reflects recent year-over-year traffic declines that have grown larger since the implementation of a 17% toll increase in July 2007, resulting in approximately a 10% decline in traffic and limited revenue growth. To the extent traffic continues on its current pattern and management does not act to enhance revenue, the current profile is inconsistent with the 'BB-' rating. Recent traffic declines may cause the reserve to be drawn down at a greater rate than was previously expected. Management's willingness to raise tolls in the past is seen as a positive, but with decline in traffic and rapidly depleting debt service reserve funds, a plan to increase the toll beyond rate of inflation is needed. The 'BB-' rating reflects the poor traffic and revenue performance relative to forecast and the weak financial profile of the Garcon Point Bridge. The rating also reflects limited rate-making flexibility and approximately $6.8 million in the debt service reserve fund that offers the potential to bridge the gap between the facility's short-term deficits and its long-term economic viability. The rating recognizes the escalating debt service schedule and the fact that the State of Florida, through deeply subordinated advances by FDOT, provides considerable operating and financial support. Overall toll traffic over the bridge has been considerably lower than initially forecasted since its opening in May 1999, but growth has been evident in recent years. The authority's initial 1996 forecast called for 3.1 million transactions in fiscal 2007 versus actual performance of 1.6 million, approximately 51% of originally forecasted levels. However, traffic volumes in fiscals 2004 to 2006 demonstrate marked improvement over prior years. Traffic increased 16% in fiscal 2004 over 2003, 1.2% in 2005 over 2004 and 9.7% in 2006 over 2005. The small increase for fiscal 2005 reflects the negative impact on traffic of Hurricane Ivan in August 2004, and the small drop in demand attributable to a $0.50 July 2004 toll rate increase. Despite the small growth in traffic for fiscal 2005, revenues increased $28,000, demonstrating a sizeable degree of rate-making flexibility. Fiscal 2006 and 2007 marked the first few years that the authority has not needed to use its debt service reserve fund to pay current debt service. Operating revenues in conjunction with investment earnings provided approximately 1.00 times coverage of debt service. The authority has needed to use its debt service reserve fund to cover its debt service obligations in three of the last five fiscal years as available revenues covered only 75%-90% of debt service. Approximately $2.4 million was drawn down in fiscals 2002 through 2007, reducing the reserve fund to $6.8 million as of fiscal 2007 from $9.2 million in fiscal 1998. Fitch believes that traffic and revenue data for first six months of fiscal 2008 reflect the recent toll increase and reopening of I-10 bridge. However, the accelerated decline in traffic is a concern. Current projections reflect the uneven growth rates over the past few years and the planned toll rate increases in fiscals 2008, 2011, 2014 and 2017. Fitch's analysis suggests that stability in the authority's rating could be achieved with future traffic growth and higher toll rates. Based on Fitch's current projections, the authority will deplete the reserve funds completely by 2013 in a base case scenario and 2012 in stress case. Under a lease purchase agreement with the authority, FDOT pays operating and maintenance expenses for the bridge and remits all tolls collected to the authority as lease payments. The term of the lease runs through the life of the bonds and terminates in 2028, at which point FDOT will own the bridge. Though the current agreement states that FDOT is to be reimbursed annually from toll revenues for payment of O&M, these reimbursements are deeply subordinated to debt service and roll over the to the following year should sufficient revenues be unavailable. FDOT has paid O&M expenses since the project's inception and is expected to do so for the foreseeable future. The authority's total liability to FDOT to date includes O&M advances of $9.3 million accrued as long-term debt and $7.9 million from non-interest-bearing Toll Facility Revolving Trust Fund loans made to the authority to cover initial bridge design costs. SCO GROUP: Reduces Workforce by 30 Positions to Reduce Expenses --------------------------------------------------------------- The SCO Group Inc. disclosed Friday that the company has implemented a reduction of its workforce, in an effort to reduce ongoing operating expenses. The company anticipates that it will reduce its workforce by approximately 30 positions, a reduction of approximately 26% of its total workforce. The Company instituted this reduction in force to continue to focus on and serve its UNIX customer base and to deliver on key opportunities with its mobile products and services. About SCO Group Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX) fka Caldera International Inc. -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company has office locations in Australia, Austria, Argentina, Brazil, China, Japan, Poland, Russia, the United Kingdom, among others. The company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead Case No. 07-11337). Epiq Bankruptcy Solutions, LLC, acts as the Debtors' claims and noticing agent. The United States Trustee failed to form an Official Committee of Unsecured Creditors in these cases due to insufficient response from creditors. The Debtors' exclusive period to file a chapter 11 plan expires on March 12, 2008. The Debtors' schedules of assets and liabilities showed total assets of $9,549,519 and total liabilities of $3,018,489. * * * As reported in the Troubled Company Reporter on Feb. 1, 2008, Tanner LC in Salt Lake City, Utah, expressed substantial doubt about The SCO Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Oct. 31, 2007. The auditing firm reported that the company is a debtor-in-possession under Chapter 11 of the U.S. Bankruptcy Code, has experienced significant and continuing net losses, and is faced with substantial contingent liabilities as a result of certain adverse legal rulings. SOUTHERN UNION: Citrus Corp. Inks $500 Million Loan with FPL Group ------------------------------------------------------------------ Southern Union Company disclosed in a regulatory filing last week that Citrus Corp., an entity owned 50% by a subsidiary of Southern Union Company and 50% by a subsidiary of El Paso Corporation, entered into a $500 million unsecured construction and term loan agreement with a wholly owned subsidiary of FPL Group Capital Inc., which is a wholly owned subsidiary of FPL Group Inc. Citrus will contribute the proceeds of this loan to its wholly owned subsidiary, Florida Gas Transmission Company LLC, in order to finance the Phase VIII Expansion of FGT's existing pipeline system in order to deliver additional capacity to Florida. The Credit Agreement provides for a single $500 million draw after FGT's receipt of a certificate from the Federal Energy Regulatory Commission authorizing construction of the Phase VIII Expansion, which is expected in late 2009, and Citrus' satisfaction of customary conditions precedent. On or before the Phase VIII Expansion in-service date, expected to occur in the spring of 2011, the construction loan will convert to an amortizing 20-year term loan with a $300 million balloon payment at maturity. The loan requires semi-annual payments of principal beginning five years and six months after the conversion to a term loan. A full-text copy of the Credit Agreement is available for free at: http://researcharchives.com/t/s?27f0 El Paso Corporation -- http://www.elpaso.com/-- provides natural gas and related energy products. The company owns North America's largest interstate natural gas pipeline system and one of North America's largest independent natural gas producers. About Southern Union Headquartered in Houston, Texas, Southern Union Co. (NYSE: SUG) -- http://www.southernunionco.com/-- is a diversified natural gas company, engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates one of the nation's largest natural gas pipeline systems with approximately 20,000 miles of gathering and transportation pipelines and North America's largest liquefied natural gas import terminal. * * * To date, Southern Union Co. still carries Moody's Investors Service Ba1 JR Subordinated Debt and Ba2 Preferred Stock ratings. Outlook is Negative. SPECTRUM BRANDS: Dec. 30 Balance Sheet Upside-Down by $141.2 Mil. ----------------------------------------------------------------- Spectrum Brands Inc.'s consolidated balance sheet at Dec. 30, 2007, showed $3.27 billion in total assets and $3.41 billion in total liabilities, resulting in a $141.2 million total stockholders' deficit. The company reported a net loss of $43.4 million on net sales of $560.5 million for the first quarter of fiscal 2008 ended Dec. 30, 2007, compared with a net loss of $18.8 million on net sales of $564.6 million in the first quarter of fiscal 2007. Spectrum Brands' net sales of $560.5 million represented a slight decline of one percent from the prior year. Sales in the quarter were negatively impacted by customer requests for earlier than normal shipments of holiday related merchandise, resulting in a timing shift of approximately $15.0 million in battery and personal care sales from the fiscal first quarter of 2008 to the fiscal fourth quarter of 2007. In addition, the company's continued deliberate exiting of unprofitable or marginally profitable private label battery sales in Europe was a contributor to the year over year decline. Foreign currency exchange had a favorable impact of $31.0 million. Ooperating income for the fiscal 2008 quarter increased to $51.8 million, or 9.3% of net sales from $37.6 million, or 6.7% of net sales in the fiscal 2007 quarter, primarily due to the savings associated with the decrease in advertising and marketing expenses coupled with the impact of the company's global realignment savings in the fiscal 2008 quarter. Interest expense in the fiscal 2008 quarter increased to $45.7 million from $31.7 million in the fiscal 2007 quarter due to higher interest rates and higher average debt balances. The company's effective tax rate on income from continuing operations is approximately 260% for the fiscal 2008 quarter. The effective tax rate on income from continuing operations was approximately 30% for the fiscal 2007 quarter. The increase in effective income tax rate for the fiscal 2008 quarter is a result of the company's decision to no longer benefit its net operating losses generated in the U.S., while at the same time being subject to tax on its income generated outside of the U.S. The fiscal 2008 quarter reflects a loss from the discontinued operations of its home and garden business of $33.3 million, net of tax, which includes a loss on disposal of Nu-Gro of $1.0 million, net of tax benefit. The fiscal 2007 quarter reflects a loss from discontinued operations of approximately $22.2 million, net of tax. The increase in the loss from discontinued operations is primarily due to the impact of income taxes. Senior Credit Facilities At Dec. 30, 2007, the aggregate amount outstanding under the company's Senior Credit Facilities totaled a U.S. Dollar equivalent of $1.52 billion, including principal amounts of $986.0 million under the U.S. Dollar Term B Loan, EUR258.0 million under the Euro Facility ($378.0 million at Dec. 30, 2007), $105.0 million under the ABL Facility as well as $47.0 million outstanding in letters of credit under the L/C Facility. Senior Subordinated Notes At Dec. 30, 2007, the company had outstanding principal of $700.0 million under its 7 3/8% Senior Subordinated Notes due 2015, outstanding principal of $3.0 million under its 8 1/2% Senior Subordinated Notes due 2013, and outstanding principal of $347.0 million under its Variable Rate Toggle Senior Subordinated Notes due 2013. Full-text copies of the company's consolidated financial statements for the quarter ended Dec. 30, 2007, are available for free at http://researcharchives.com/t/s?27f1 About Spectrum Brands Inc. Headquartered in Atlanta, Georgia, Spectrum Brands Inc. (NYSE: SPC) -- http://www.spectrumbrands.com/-- is a supplier of batteries, portable lighting, lawn and garden products, household insect control, shaving and grooming products, personal care products and specialty pet supplies. STRADA 315: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Strada 315, L.L.C. 185 Northeast 4 Avenue, Suite 104 Delray Beach, FL 33483 Bankruptcy Case No.: 08-11574 Type of Business: The Debtor owns and manages luxury condominiums. Chapter 11 Petition Date: February 11, 2008 Court: Southern District of Florida (Fort Lauderdale) Debtor's Counsel: Scott A Underwood, Esq. 200 East Broward Boulevard, Suite 1110 Fort Lauderdale, FL 33301 Tel: (954) 453-8019 Fax: (954) 453-8010 Total Assets: $10 Million to $50 Million Total Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Associated Steel & Aluminium $561,578 1925 Northwest 15th Street Pompano Beach, FL 33069 Coleman Floor Co. $299,592 1930 North Thoreau Drive, Suite 100 Schaumburg, IL 60193 Y.&T. Plumbing Corp. $298,833 13170 Southwest 134th Street Miami, FL 33186 Precision Drywall, Inc. $176,811 Interiors by Steven G. $151,460 Priority Fire Co. $122,593 Krieger Kitchens $109,069 Vila & Sons Landscaping $103,595 Statewide Electrical $102,536 Ruden McClosky $84,853 Cable Wiring Specialist $83,912 Ready Windows $79,832 Thyssen Krupp Elevator $75,459 Tem* Systems, Inc. $73,283 Strada 315 Condo Association $70,000 Metro Caulking & Waterproofing $62,376 Amquip Crane Rental $60,093 Elizabeth & Lee Hyder $49,096 Falkanger, Snyder, Martineau & $47,438 Yates Archetects Ryan Sales & Service, Inc. $43,061 TOUSA INC: Wants to Hire Greenberg Traurig as Special Counsel ------------------------------------------------------------- TOUSA Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Greenberg Traurig P.A., as their special counsel nunc pro tunc to the bankruptcy filing. The Debtors selected Greenberg Traurig because the firm has represented them for 18 years in the areas of general corporate, acquisitions and divestitures, real estate, tax, employee benefits, labor and employment, construction, litigation, intellectual property, environmental, insurance, and real estate. Therefore, Greenberg Traurig has considerable knowledge concerning the Debtors' operations and is already familiar with their business affairs. The Debtors will also require that the services to be provided by Greenberg Traurig will be complementary and not duplicate the services to be performed by their primary bankruptcy and reorganization counsel. As special counsel, Greenberg Traurig will: -- advise the Debtors in connection with labor and employment, employee benefits, executive compensation, Employee Retirement Income Security Act and tax matters; -- advise and assist the Debtors' bankruptcy and reorganization counsel in connection with certain purchases or sales of assets or business entities that will arise from time to time and are assigned by the Debtors to Greenberg Traurig provided that Debtors' bankruptcy and reorganization counsel will be responsible for selecting the assets or business entities for sale and determining the timing and context of their sale, and Greenberg will play no role in those decisions except to provide requested information; -- provide non-bankruptcy advice to the Debtors in coordination with their bankruptcy and reorganization counsel and at the request of the Debtors, with respect to legal matters arising in or relating to the their business, including intellectual property, environmental, insurance, project contract, regulatory and real estate matters; and -- represent the Debtors in any litigation, arbitration, or third party insolvency matters in which Greenberg Traurig has appeared as of the Petition Date, and other matters that will arise from time to time assigned by the Debtors to Greenberg Traurig, including appearing before state or federal courts and agencies with respect to those matters. The Debtors propose to pay Greenberg Traurig on an hourly basis: Professional Hourly Rate ------------ ----------- Partners $335 to $950 Of Counsel $320 to $800 Associates $200 to $585 Paraprofessionals $35 to $300 Mark F. Bideau, Esq., a shareholder at Greenberg Traurig, 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). U.S. Trustee Responds Donald F. Walton, Acting U.S. Trustee for Region 21, asserts that the Debtors' request was filed before the formation of a creditors committee, and includes materials the Court and parties in interest need to review and evaluate. Thus, the U.S. Trustee asks the Court to deny the Debtors' request or reschedule the hearing on the request until a creditors committee, if appointed, and other parties in interest have had the time to evaluate and object, if necessary. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. 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. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq. of Kirkland & Ellis LLP and Paul Steven Singerman, Esq. of Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Gets Interim OK on Lazard Freres as Investment Banker ---------------------------------------------------------------- TOUSA Inc. and its debtor-affiliates obtained authority, on an interim basis, from the U.S. Bankruptcy Court for the Southern District of Florida to employ Lazard Freres & Co. LLC, as their investment banker and financial advisor, nunc pro tunc to the Petition Date. Lazard is the United States operating subsidiary of an international financial advisory and asset management firm. According to Tommy L. McAden, the Debtors' executive vice president and chief financial officer, Lazard has "extensive experience" and an "excellent reputation" in providing high quality financial advisory and investment banking services to debtors and creditors in bankruptcy reorganizations and other restructurings. Lazard has been retained as financial advisor and investment banker in a number of troubled company situations, including In re New Century TRS Holdings Inc., No. 07-10416 (Bankr. D. De. Apr. 25, 2007), and in re Northwest Airlines Inc., No. 05-17930 (Bankr. S.D.N.Y. July 20, 2006). Mr. McAden told the Court that, having performed prepetition work for the Debtors, Lazard has acquired knowledge of the Debtors and their businesses and is now familiar with the Debtors' financial affairs, debt structure, operations and related matters. Consistent with a certain engagement letter, dated Sept. 26, 2007, as amended, Lazard is expected to: (a) review and analyze the Debtors' business, operations and financial projections; (b) evaluate the Debtors' potential debt capacity in light of its projected cash flows; (c) assist in the determination of a capital structure for the Debtors; (d) assist in the determination of a range of values for the Debtors on a going concern basis; (e) advise the Debtors on tactics and strategies for negotiating with the stakeholders; and (f) provide the Debtors with other financial restructuring advice. The Debtors will pay Lazard a monthly fee of $200,000, and other fees, including a $6,000,000 completion fee payable upon the consummation of a restructuring or sale transaction. Lazard will also be reimbursed of its necessary and actual expenses. Mr. McAden informed the Court that the Debtors paid Lazard $3,900,000 before the Petition Date for fees, and reimbursed the firm roughly $82,200 in expenses. As of the Petition Date, the firm does not hold a prepetition claim against the Debtors for services rendered. The Debtors have also agreed to indemnify, hold harmless and defend Lazard, its affiliates, and related parties under certain circumstances. David S. Kurtz, managing director at Lazard, assures the Court that none of the principals or employees of Lazard working on or connected to the firm's engagement on the Debtors' behalf has had, or will have in the future, direct contact concerning the Debtors' Chapter 11 cases with potential parties-in-interest, the U.S. Trustee for the Southern District of Florida, or anyone employed in the U.S. Trustee's Office, other than in connection with Lazard's engagement for the Debtors. The firm has in place compliance procedures to ensure that no confidential or non-public information concerning the Debtors has been or will be available to employees of Lazard's asset management affiliate, Lazard Asset Management LLC. LAM may act as investment advisor for or trade securities, including on behalf of creditors, equity holders or other interested parties. Mr. Kurtz disclosed that Lazard represents certain interested parties in matters unrelated to the Debtors' bankruptcy cases, including Citigroup, Wachovia Corp., JPMorgan Chase Bank, Morgan Stanley, and Bank of America. Mr. Kurtz asserts that Lazard is a disinterested person as the term is defined under Section 101(14) of the Bankruptcy Code. A final hearing on the Debtors' request is scheduled for Feb. 28, 2008. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. 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. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq. of Kirkland & Ellis LLP and Paul Steven Singerman, Esq. of Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Seeks Approval of KZC Services Agreement --------------------------------------------------- TOUSA Inc. and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Southern District of Florida to approve the Standard Services Agreement with KZC Services LLC and John R. Boken, one of the officers of KZC Services. KZC Services LLC, is a financial advisory, interim management, litigation support and forensic accounting firm specializing in advising debtors, creditors, investors and court-appointed officials in bankruptcy proceedings and out-of-court workouts. TOUSA Inc. executive vice president and chief financial officer Tommy L. McAden relates that the Debtors have entered into a standard services agreement dated Jan. 28, 2008, with KCZ Services and Mr. Boken. The Agreement will govern the terms and conditions of the services to be provided by KCZ to the Debtors and the appointment of Mr. Boken as chief restructuring officer to the Debtors. Under the Services Agreement, KZC and Mr. Boken will be authorized to make decisions with respect to all aspects of the management and operation of the Debtors' businesses, including organization and human resources, marketing and sales, logistics, finance and administration, and other areas that Mr. Boken may identify as applicable. KZC will assign Mr. Boken to serve as the Debtors' chief restructuring officer and the firm will assign an Associate Directors of Restructuring to perform other related services. Mr. McAden asserts that the services to be provided by KZC and Mr. Boken to the Debtors are vital to the success of the Debtors' Chapter 11 cases. The Debtors will pay KZC's professionals according to these hourly rates: Professional Hourly Rates ------------ ------------ Managing Directors $695 to $775 Professional Staff $200 to $665 Support Personnel $45 to $225 In addition, if the Debtors succeed in obtaining a consensual restructuring, compromise or extinguishment of a substantial amount of their existing indebtedness, or a final order approving a plan of reorganization, or a sale of substantially all of the Debtors' assets that is completed, KZC will be entitled to a $3,500,000 Consummation Fee. KZC Services has received a $500,000 prepetition retainer and a $250,000 initial advance payment from the Debtors, plus biweekly advances in which certain prepetition amounts have been applied. >From time to time, KZC and Mr. Boken will utilize employees of KZC's parent, Kroll Inc., and its other subsidiaries. The Debtors will indemnify KZC, Mr. Boken and other KZC employees serving as officers of the Debtors. U.S. Trustee Responds Donald F. Walton, Acting U.S. Trustee for Region 21, asserts that the Debtors' request was filed before the formation of a creditors committee, and includes materials the Court and parties in interest need to review and evaluate. Thus, the U.S. Trustee asks the Court to deny the Debtors' request or reschedule the hearing on the request until a creditors committee, if appointed, and other parties in interest have had the time to evaluate and object, if necessary. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. 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. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq. of Kirkland & Ellis LLP and Paul Steven Singerman, Esq. of Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. ( TOUSA Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service Inc. http://bankrupt.com/newsstand/or 215/945-7000). TP EMERALD: Section 341(a) Creditors Meeting Set for March 4 ------------------------------------------------------------ Travis M. Bedsoles, Jr., the Bankruptcy Administrator for the Southern District of Alabama, will convene a meeting for T.P. Emerald Shores Development, LLC's creditors at 2:00 p.m., on March 4, 2008, at Bankruptcy Meeting Room -- 182 St. Francis Street, 3rd Floor, in Mobile, Alabama. 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 Huntsville, Alabama, T.P. Emerald Shores Development, LLC -- is a condominium developer. The company filed for chapter 11 on Jan. 30, 2008 (Bank. S.D. Ala. Case No. 08-10294). Stuart M. Maples, Esq., at Johnston, Moore, Maples & Thompson represents the Debtor in its restructuring efforts. When the Debtor file for protection from its creditors its listed total assets of $16,570,108 and total debts of $30,287,078. USA INVESTMENT: Court Confirms Chapter 11 Plan of Liquidation ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada confirmed U.S.A. Investment Partners LLC's Chapter 11 plan of liquidation, Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on Feb. 1, 2008, under the plan, 150 short-term, secured investors of the hotel will get all of the principal and interest they were owed at $22.4 million. Payment to unsecured creditors is contingent with the amount of claims to secured creditors, Mr. Rochelle discloses. The higher the secured claims, the less of a guarantee that unsecured claims will be paid. If the secured claims is of a lower amount, unsecured creditors with $27 million in claims will recover 30% of their claims. Although the former owner of Hotel Zoso told the Court that it owed secured creditors $19.1 million, secured creditors insisted that they lent a total of $24.4 million to USA Investment. Hotel Zoso, a luxury, boutique hotel in Palm Springs, California, was operated by the Debtor's Chapter 11 trustee and was sold in November for $25.1 million to American Property Hospitality Management LLC. U.S.A. Investment Partners, LLC, invests and develops real estate. On April 4, 2007, creditors filed an involuntary chapter 11 petition against the company (Bankr. D. Nev. Case No. 07-11821). Lisa M. Poulin was appointed as interim chapter 11 trustee. Brigid M. Higgins, Esq., Eric Van, Esq., Gerald M. Gordon, Esq., Gregory E. Garman, Esq., and Talitha B. Gray, Esq., at Gordon & Silver, Ltd., represents the chapter 11 trustee. US ENERGY SYSTEMS: Chancery Ct. Moved Special Meeting to Feb. 19 ---------------------------------------------------------------- The special meeting of U.S. Energy Systems Inc.'s stockholders has been adjourned until Tuesday, Feb. 19, 2008, by order of the Delaware Chancery Court, according to the company regulatory filing with the U.S. Securities and Exchange Commission. U.S. Energy says that the parties to the litigation have requested an additional one-week adjournment so that they can continue to pursue discussions to try to achieve a settlement. U.S Energy further says that it would continue to update stockholders about certain developments regarding that meeting. The Court has previously scheduled the special meeting to take place on Jan. 29, 2008, and, later, deferred it to Feb. 12, 2008. About U.S. Energy Based in Avon, Connecticut, U.S. Energy Systems Inc. (Pink Sheets: USEY) -- http://www.usenergysystems.com/-- owns green power and clean energy and resources. USEY owns and operates energy projects in the United States and United Kingdom that generate electricity, thermal energy and gas production. The company filed for Chapter 11 protection on Jan. 9, 2008 (Bank. S.D.N.Y. Case No. 08-10054). There are 34 affiliates who filed for separate Chapter 11 petitions. The Debtors selected Peter S. Partee, Esq., at Hunton & Williams, L.L.P., as counsel. The Debtor also selected Epiq Bankruptcy Solutions LLC as noticing, claims and balloting agent. When the Debtors filed for protection from their creditors, they listed total assets of $258,200,000 and total debts of $175,300,000. US SHIPPING: Reports $1.4 Mil. Net Loss for Quarter Ended Dec. 31 ----------------------------------------------------------------- U.S. Shipping Partners L.P. incurred a net loss of $1.4 million for the fourth quarter ended Dec. 31, 2007 compared to the net loss for the same period in 2006 of $0.9 million. The partnership had voyage revenue of $43.5 million and operating income of $4.9 million for the three months ended Dec. 31, 2007 compared to voyage revenue of $36.8 million and operating income of $3.3 million for the same period in 2006. Voyage revenues showed an increase of $6.7 million for 2007 fourth quarter. The increase in voyage revenues and operating income was due primarily to the addition of the ATB Freeport, which was placed in service in July 2007 and contributed $4.5 million in voyage revenues in the fourth quarter of 2007. Additionally, an increase in charter rates and the number of days worked, due to a lower number of drydocks in 2007, contributed an additional $2.2 million of voyage revenues in the three months ended Dec. 31, 2007, compared to the same period in 2006. Voyage expenses increased $2.0 million during the three months ended Dec. 31, 2007 and vessel operating expenses increased $1.5 million. The addition of the ATB Freeport accounted for additional voyage expenses of $1.2 million and an increase in fuel charges for the remaining fleet increased voyage expenses by $1.1 million; these increases were offset by lower port charges and commission expenses aggregating $0.3 million. The increase in vessel operating expenses is due to the addition of the ATB Freeport, which increased vessel operating expenses by $1.4 million. Additionally, repairs and maintenance expense and crew wages and benefits each increased by $0.6 million. For the year ended Dec. 31, 2007, the partnership had voyage revenue of $176.7 million, operating income of $25.4 million and net income of $4.8 million, as compared to voyage revenue of $150.1 million, operating income of $18.3 million and net income of $5.9 million for the year ended Dec. 31, 2006. The increase in net voyage revenues in fiscal 2007 was principally the result of the sea venture being in service for a full year compared to six months in 2006, the addition of the ATB Freeport to the fleet in July 2007, as well as increased charter rates and days worked due to fewer drydocks in 2007, partially offset by increased voyage expenses due to higher fuel prices. At Dec. 31, 2007, total deferred costs for this voyage were approximately $1.4 million. "Operationally, the Partnership had a good fourth quarter and year," Paul Gridley, chief executive officer of U.S. Shipping Partners, said. "We have taken steps to buttress our liquidity in light of the uncertain economic and market conditions we and our industry face." "As a result of our projected utilization and charter rates for our fleet in 2008, including the expected on-time and on-budget delivery in 2008 of our two ATBs currently under construction, along with the cash we will preserve by not paying distributions on our subordinated and general partner units, we are confident that we will have sufficient liquidity in 2008 to continue to pay the minimum $0.45 quarterly distribution on our common units and be in compliance with all financial covenants under our credit facilities," Mr. Gridley added. Distributable Cash Flow Distributable cash flow for the year ended Dec. 31, 2007 was $42.0 million, or 1.39 times the cash distribution of $30.2 million actually declared in respect of the year. For the quarter ended Dec. 31, 2007, DCF was $8.2 million, or 1.62 times the cash distribution of $5.1 million declared in respect of the period. Financial Position and Liquidity Based on the partnership's projected utilization and charter rates for its fleet in 2008 in light of expected increases in the number of vessels operating in the spot market, the projected delivery of two articulated tug barges currently under construction on-time and on-budget in the second half of 2008, and current economic and market conditions, management currently anticipates that in 2008 the partnership will continue to pay the minimum $0.45 quarterly distribution on the common units and will remain in compliance with all financial covenants under its credit facility. About U.S. Shipping Partners Based in Edison, New Jersey, U.S. Shipping Partners L.P. (NYSE:USS) -- http://www.usslp.com/-- provides long-haul marine transportation services, principally for refined petroleum products, in the United States domestic coastwise trade. The company is also involved in the coastwise transportation of petrochemical and commodity chemical products, as measured by fleet capacity. U.S. Shipping's fleet consists of 10 tank vessels: six integrated tug barge units; one product tanker, and three chemical parcel tankers. The company's primary customers are oil and chemical companies. * * * As reported in the Troubled Company Reporter on Dec. 20, 2007, Standard & Poor's Ratings Services lowered its ratings on U.S. Shipping Partners L.P., including its corporate credit rating to 'B-' from 'B+'. At the same time, S&P removed the ratings from CreditWatch, where they were placed with negative implications on Aug. 10, 2007. The outlook is negative. The Edison, New Jersey- based shipping company has about $441 million of lease-adjusted debt. VICTORY MEMORIAL: Wants Court to Approve Asset Sale Procedure ------------------------------------------------------------- Victory Memorial Hospital and its debtor-affiliates ask the United States Bankruptcy Court for the Eastern District of New York to approve a bidding procedure for the sale of certain assets, clear of all liens and interests, subject to higher and better offer. The Debtors tell the Court that on Jan. 30, 2008, they selected a New York not-for-profit corporation St. Jerome Health Services Corporation dba Holy Family Home to serve as the stalking horse bidder. Under a certain asset purchase agreement, St. Jerome agreed to purchase the assets for $40 million in cash. The agreement requires St. Jerome to make a cash deposit of $1,500,000, which will held in escrow. The Debtors say that the purchased assets, includes, among others: a) real property in Tax Block 6094 Lot 1 in Brooklyn, New York, also known as main campus; b) Victory Memorial Hospital's 150-bed Skilled Nursing Facility (SNF), including all licenses and certificates; c) Victory Memorial Hospital Long Term Home Health Care (LTHHCP)program, including also licenses and certificates; d) all equipments and assets for the SNF and LTHHCP. All excluded assets will be retained by the Debtors, including, among others, the existing $25 million HEAL award and any causes of action of the Debtors. Pursuant to the terms and conditions of the agreement, the Debtors have agreed to provide a $400,000 break-up fee. Sale Protocol Qualified bidders must submit their offers no later than March 10, 2008, at 12:00 p.m.,(Eastern Time) and deliver a written copies of that bid at: a) DLA Piper US LLP Attn: Timothy W. Walsh, Esq. 1251 Avenue of the Americas New York, NY 10020 b) Alston & Bird LLP Attn: Martin G. Bunin, Esq. 90 Park Avenue New York, NY 10016 c) CIT Capital USA Inc. Attn: Natalie Wilensky 11 West 42nd Street, 7th floor New York, NY 10036 Each bid must be accompanied by a "good faith deposit" of $1,500,000 in bank or certified check. The initial overbid must be equal or exceed the purchase price plus $500,000. An auction will be held on March 13, 2008, at 10:00 a.m., at the offices of DLA Piper US LLP by CIT Capital. All qualified bidder will be notified before March 12, 2008. A hearing has been set on Feb. 21, 2008, at 2:00 p.m., to consider approval of the Debtors' request. About Victory Memorial Based in Brooklyn, New York, Victory Memorial Hospital is a non-profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. Craig E. Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $1 million and $100 million. VISAGE CDO: Event of Default Cues Fitch to Junk, Withdraw Ratings ----------------------------------------------------------------- Fitch Ratings has downgraded and simultaneously withdrawn its ratings on seven classes of notes issued by Visage CDO II, Ltd. These rating actions are effective immediately: -- $100,000,000 Class A-2 notes downgraded to 'C/DR6' from 'B' and withdrawn; -- $60,000,000 Class B notes downgraded to 'C/DR6' from 'B-' and withdrawn; -- $36,000,000 Class C notes downgraded to 'C/DR6' from 'CCC' and withdrawn; -- $26,000,000 Class D notes downgraded to 'C/DR6' from 'CCC' and withdrawn; -- $18,513,290.99 Class E notes downgraded to 'C/DR6' from 'CC' and withdrawn; -- $15,283,619.50 Class F notes downgraded to 'C/DR6' from 'CC' and withdrawn; -- $13,204,822.41 Class G notes downgraded to 'C/DR6' from 'CC' and withdrawn. Visage II is a hybrid collateralized debt obligation referencing a static portfolio of mezzanine, high grade and commercial real estate ABS CDOs, and residential mortgage-backed securities. The initial portfolio was selected by TCW Investment Management Company. Visage II entered into a total return swap with Credit Suisse International, the TRS counterparty, wherein CSI made total return payments to Visage II in exchange for credit protection on the reference portfolio. These rating actions reflect an Event of Default under Condition 11 of the Notes and subsequent collateral enforcement by the trustee in accordance with Condition 12 of the Notes, as requested by the Total Return Swap Counterparty in its capacity as the Controlling Class. According to the revised Note Valuation Report dated Jan. 22, 2008, following the Post-Enforcement Priority of Payments, no amounts were available to pay any distributions due under any of Fitch-rated Notes. VONAGE HOLDINGS: Sharon O'Leary Resigns as EVP Effective March 31 ----------------------------------------------------------------- Vonage Holdings Corp. disclosed on Feb. 4, 2008, that Executive vice president and chief legal officer, Sharon A. O'Leary will be departing the company at the end of the first quarter of 2008. About Vonage Holdings Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with over 2.5 million subscriber lines. The company's technology enables anyone to make and receive phone calls with a touch tone telephone almost anywhere a broadband Internet connection is available. The company's Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and features like call waiting, call forwarding and voicemail - for one low, flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. * * * At Sept. 30, 2007, Vonage Holdings Corp.'s consolidated balance sheet showed $665.8 million in total assets and $728.7 million in total liabilities, resulting in a $62.9 million total shareholders' deficit. WATERFORD GAMING: Moody's Reviews Low-B Ratings for Possible Cuts ----------------------------------------------------------------- Moody's Investors Service placed Waterford Gaming, LLC and its wholly-owned subsidiary and co-issuer, Waterford Gaming Finance Corp., on review for possible downgrade. Ratings affected include Waterford's Ba3 corporate family and Ba2 probability of default ratings as well as Ba3 ratings to the senior unsecured notes due 2012 and senior unsecured notes due 2014. The action follows the placement by Moody's of Mohegan Tribal Gaming Authority's ratings under review for possible downgrade, after MTGA's recent announcement that its fiscal 2008 first quarter EBITDA was approximately 19% lower than the comparable prior year period, partly due to a decline in gross slot revenues at the Mohegan Sun Casino. Waterford derives substantially all of its revenues from its partnership interest in Trading Cove Associates, which itself receives a revenue-based relinquishment fee equal to 5% of the gross revenues of the Mohegan Sun casino owned by MTGA. As these fee payments are the only source of cash used to service Waterford's outstanding debt, should a continuous deterioration of operating trends at MTGA occur, Waterford's ability to de-lever its balance sheet could be materially constrained. Any downgrade is likely to be limited to one notch, considering Moody's current view on MTGA's operating performance and Waterford's current leverage of less than 4 times. Waterford is a special purpose company formed solely for the purpose of holding its 50% partnership interest, as a general partner, in TCA, a Connecticut general partnership and the manager (until Jan. 1, 2000) and developer of the Mohegan Sun casino located in Uncasville, Connecticut. The Mohegan Sun casino is owned and operated by MTGA. WESTSHORE GLASS: Section 341(a) Creditors Meeting Set for Feb. 29 ----------------------------------------------------------------- The United States Trustee for Region 21 will convene a meeting of Westshore Glass Corp.'s creditors on Feb. 29, 2008, at 1:30 p.m., in Room 100-A, 501 East Polk Street (Timberlake Annex), in Tampa, Florida. 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 Tampa, Florida, Westshore Glass Corp. -- http://www.westshoreglass.com/-- is a full-line distributor of all types of glass and related materials. The company filed for chapter 11 protection on Jan. 30, 2008 (Bank. M.D. Fla. Case No. 08-01194). Stephenie Biernacki Anthony, Esq., at GrayRobinson, P.A. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors its listed total assets of $10,169,034 and total liabilities of $14,911,342. WHERIFY WIRELESS: Inks Forbearance Pact with Yorkville Advisors --------------------------------------------------------------- Wherify Wireless Inc. disclosed that Yorkville Advisors LLC has agreed to forbear from exercising its rights and remedies under certain debentures in respect of Wherify's default under the debenture terms until March 6, 2008. On Feb. 1, 2008, the company received a Notice of Default from Yorkville Advisors LLC. The Notice of Default relates to convertible debentures entered into on March 10, 2006, and March 14, 2006, and subsequent amendments thereto between Wherify and Cornell Capital Partners L.P. The notice of default was triggered by Wherify's failure to pay the most recent payments on the debentures to YA Global Investments L.P. (f/k/a Cornell Capital Partners L.P.) when due. As of Feb. 1, 2008, the debentures have an outstanding balance of approximately $4,875,000 in principal and $611,054 in interest. About Wherify Wireless Inc. Based in Redwood Shores, California, Wherify Wireless Inc. (OTC BB: WFYW) -- http://www.wherifywireless.com/-- develops patented wireless location products and services for family safety and business communications. Going Concern Doubt Malone & Bailey, PC, in Houston, expressed substantial doubt about Wherify Wireless Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's recurring losses from operations and working capital deficiency. As reported in the Troubled Company Reporter on Nov. 29, 2007, Wherify Wireless Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $4.5 million in total assets and $18.3 million in total liabilities, resulting in a $13.8 million total shareholders' deficit. WIN WIN GAMING: Section 341(a) Creditors Meeting Set for March 5 ---------------------------------------------------------------- The United States Trustee for Region 17 will convene a meeting of Win Win Gaming Inc.'s creditors at 2:00 p.m., on March 5, 2008, at 341s - Foley Building, Room 1500 in Las Vegas, Nevada. 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 Las Vegas, Nevada, Win Win Gaming Inc. (WNWN.PK) -- http://www.winwininc.com/-- is a multimedia developer and publisher of sports, lottery and other games. It has two business segments: Wireless Game and 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. The company filed for chapter 11 protection on Jan. 29, 2008 (Bank. D. Nev. Case No. 08-10701). Nancy L. Allf, Esq., at Gonzalez, Saggio & Harlan, LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors its listed total assets of $10,645,156 and total debts of $6,577,719. * S&P Downgrades 67 Tranches' Ratings From 10 Cash Flows and CDOs ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 67 tranches from 10 U.S. cash flow and hybrid collateralized debt obligation transactions. The downgraded tranches have a total issuance amount of $7.647 billion. Nine of the affected transactions are mezzanine structured finance CDOs of asset-backed securities, which are CDOs of ABS collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other SF securities, and one is a high-grade SF CDO of ABS, which S&P defines as a CDO of ABS backed at origination predominantly by 'AAA' and 'AA' rated tranches of RMBS and other SF assets. The transactions listed below are, S&P believes, among the CDOs that are most affected by recent rating actions on U.S. RMBS. As such, the rating actions on these deals may not necessarily be indicative of the outcomes S&P expects for all of the remaining CDOs of ABS with ratings currently on CreditWatch negative. The CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on subprime RMBS securities. To date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 1,509 tranches from 430 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 2,441 ratings from 608 transactions are currently on CreditWatch negative for the same reasons. In all, the affected CDO tranches represent an issuance amount of $343.893 billion. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Rating and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Anderson Mezzanine Funding 2007-1 A-1a B AAA/Watch Neg Anderson Mezzanine Funding 2007-1 A-1b B AAA/Watch Neg Anderson Mezzanine Funding 2007-1 A-2 CCC- A+/Watch Neg Anderson Mezzanine Funding 2007-1 B CC BBB-/Watch Neg Anderson Mezzanine Funding 2007-1 C CC CCC/Watch Neg Anderson Mezzanine Funding 2007-1 D CC CCC-/Watch Neg Anderson Mezzanine Funding 2007-1 S AA AAA/Watch Neg Caldecott CDO 1 Ltd. A-1 BBB+ AAA/Watch Neg Caldecott CDO 1 Ltd. A-2 B- AA/Watch Neg Caldecott CDO 1 Ltd. A-3 CCC BBB-/Watch Neg Caldecott CDO 1 Ltd. B CC CCC+/Watch Neg Duke Funding VI A1J BBB+ AAA/Watch Neg Duke Funding VI A1S AA+ AAA/Watch Neg Duke Funding VI A2 BB+ A+/Watch Neg Duke Funding VI A3 B+ BB/Watch Neg Duke Funding VI BF CCC CCC+/Watch Neg Duke Funding VI BV CCC CCC+/Watch Neg Duke Funding VI Comp l CC CCC-/Watch Neg Duke Funding XIII Ltd. 2 combo CC A/Watch Neg Duke Funding XIII Ltd. A1J CCC AA+/Watch Neg Duke Funding XIII Ltd. A1S VFN B- AAA/Watch Neg Duke Funding XIII Ltd. A2J CCC- A+/Watch Neg Duke Funding XIII Ltd. A2S CCC- AA-/Watch Neg Duke Funding XIII Ltd. A3 CC BBB/Watch Neg Duke Funding XIII Ltd. B1 CC BBB-/Watch Neg Duke Funding XIII Ltd. B2 CC BB+/Watch Neg Duke Funding XIII Ltd. I combo AAA AAA/Watch Neg Duke Funding XIII Ltd. X AAA AAA/Watch Neg Hamilton Gardens CDO II Ltd. A-1a BBB+ AAA/Watch Neg Hamilton Gardens CDO II Ltd. A-1b B+ AAA/Watch Neg Hamilton Gardens CDO II Ltd. A-1c B- AAA/Watch Neg Hamilton Gardens CDO II Ltd. A-2 CCC AAA/Watch Neg Hamilton Gardens CDO II Ltd. B CCC- AA/Watch Neg Hamilton Gardens CDO II Ltd. C CCC- A/Watch Neg Hamilton Gardens CDO II Ltd. D CC BBB/Watch Neg Longshore CDO Funding 2006-2 Ltd. A-1 BB+ AAA/Watch Neg Longshore CDO Funding 2006-2 Ltd. A-2 B AAA/Watch Neg Longshore CDO Funding 2006-2 Ltd. B CCC+ AA/Watch Neg Longshore CDO Funding 2006-2 Ltd. C-1 CCC A/Watch Neg Longshore CDO Funding 2006-2 Ltd. C-2 CCC A-/Watch Neg Longshore CDO Funding 2006-2 Ltd. D CCC- BBB-/Watch Neg NovaStar ABS CDO I Ltd. A-1 BB- AAA/Watch Neg NovaStar ABS CDO I Ltd. A-2 B AA+/Watch Neg NovaStar ABS CDO I Ltd. B CCC+ A+/Watch Neg NovaStar ABS CDO I Ltd. C CCC BBB/Watch Neg NovaStar ABS CDO I Ltd. D CC BB/Watch Neg Stack 2007-1 Ltd. A-1A AA- AAA/Watch Neg Stack 2007-1 Ltd. A-1B BBB- AAA/Watch Neg Stack 2007-1 Ltd. A-2 B AAA/Watch Neg Stack 2007-1 Ltd. A-3 CCC AA+/Watch Neg Stack 2007-1 Ltd. A-4 CCC- AA-/Watch Neg Stack 2007-1 Ltd. B CC BBB+/Watch Neg Stack 2007-1 Ltd. C CC BBB-/Watch Neg Stack 2007-1 Ltd. D CC B+/Watch Neg Stack 2007-1 Ltd. E CC B/Watch Neg Stone Tower CDO III Ltd. A-1LA B+srp AAAsrp/Watch Neg Stone Tower CDO III Ltd. A-1LB B AAA/Watch Neg Stone Tower CDO III Ltd. A-2L B- AA/Watch Neg Stone Tower CDO III Ltd. A-3L CCC+ AA/Watch Neg Stone Tower CDO III Ltd. A-4L CCC AA/Watch Neg Stone Tower CDO III Ltd. B-1L CC BBB/Watch Neg Stone Tower CDO III Ltd. B-2L CC BBB-/Watch Neg Stone Tower CDO III Ltd. X BB+ AAA/Watch Neg Topanga CDO II Ltd. A-1 B AA+/Watch Neg Topanga CDO II Ltd. A-2 B- AA-/Watch Neg Topanga CDO II Ltd. B CCC BBB/Watch Neg Topanga CDO II Ltd. C CC CCC+/Watch Neg Topanga CDO II Ltd. D CC CCC/Watch Neg Topanga CDO II Ltd. S BB AAA/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Caldecott CDO 1 Ltd. C CC Caldecott CDO 1 Ltd. D CC Caldecott CDO 1 Ltd. E CC Caldecott CDO 1 Ltd. F CC * S&P Downgrades Ratings on Seven Classes From Six NIMS RMBS ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on seven classes from six U.S. net interest margin securities (NIMS) residential mortgage-backed securities (RMBS) transactions backed mostly by subprime U.S. mortgage collateral issued in 2004. Concurrently, S&P affirmed its ratings on three classes from three U.S. NIMS RMBS transactions backed mostly by subprime U.S. mortgage collateral also issued in 2004. Additionally, S&P withdrew its ratings on Chase Funding NIM Trust's series 2004-OPT1 and Countrywide Home Loan Trust's series 2004-14N after they paid off. The seven downgraded classes from the six U.S. NIMS RMBS transactions had an original total principal balance of approximately $126.34 million, which represents 0.79% of the roughly $15.94 billion in U.S. NIMS RMBS that Standard & Poor's rated in 2004. The seven downgraded classes have an outstanding principal balance of approximately $20.08 million, or roughly 15.90% of their original principal amount. The total balance of Standard & Poor's rated U.S. RMBS securities backed by all types of residential mortgage loans issued in the non-agency market in 2004 was more than $712 billion. Standard & Poor's rated a total of 278 U.S. NIMS RMBS transactions in 2004. The transactions affected by this rating actions follow the Jan. 22, 2008, downgrade of 85 NIMS classes from the 2004 vintage. On Jan. 22, 2008, S&P indicated that it would run additional cash flow stresses for the 11 transactions included in this release after the January 2008 distribution period, at which point the overcollateralization for all of the underlying transactions should have stepped down. S&P is downgrading approximately 63.33% of the $126.34 million original principal balance of U.S. NIMS RMBS classes that were rated 'BBB' or lower before the downgrades. The resulting ratings associated with the downgraded classes, as a percentage of the total $126.34 million original class principal balance of the downgraded classes, are: Rating Percentage ------ ---------- B 46.72% CCC 40.75% CC 12.52% These six NIMS transactions are, on average, 41 months seasoned. Although the cash flow projections at the time S&P assigned the original ratings to these transactions estimated that the deals should have already paid off, these NIMS transactions did not receive the cash flow S&P originally projected because of the performance of the underlying assets and because of higher-than- projected losses and prepayment speeds. As a result, approximately 23% of the original principal balance of these NIMS transactions remains outstanding, on average, whereas approximately 22% of the original pool balances of the underlying transactions is outstanding. S&P affirming its ratings on 83.61% of the $30.53 million original principal balance of U.S. NIMS RMBS classes that were rated 'BBB' or lower before the affirmations. The resulting ratings associated with the classes with affirmed ratings, as a percentage of the total $30.53 million original class principal balance of these securities, are: Rating Percentage ------ ---------- BBB+ 16.38 BBB 55.77 BB 27.85 The three NIMS transactions with affirmed ratings are, on average, 41 months seasoned. Notwithstanding the fact that 3.65% of the original principal balance of these NIMS transactions remains outstanding, on average, whereas approximately 21% of the original pool balances of the underlying transactions is outstanding, S&P's analysis indicates that these transactions are likely to pay in full in the near future. S&P's Surveillance Assumptions S&P evaluated a number of performance measures for each U.S. NIMS RMBS transaction, including the results of the cash flow analysis. These performance measures include the amount and type of cash (excess interest, prepayment penalty fees, and cap payments) received from the underlying transaction(s); the rate at which the NIMS are repaying relative to original projections; whether or not the NIMS have incurred an actual interest shortfall; and the outstanding principal balance relative to the amount of cash being received from its underlying transaction(s). The cash flow projections include the residual cash flows (excess interest and prepayment penalty fees) from each underlying U.S. RMBS transaction's cash flow stress run, as well as the projected proceeds from any cap contract, if applicable. The NIMS cash flow projections determined whether or not each NIMS class is expected to pay off and whether or not interest shortfalls will occur. S&P lowered its rating on a NIMS class to the 'B' rating category if the class is currently projected to pay off in one year. S&P lowered its rating on a NIMS class to 'CCC' if the class had not yet incurred an interest shortfall and the outstanding class balance was small relative to the cash flow. S&P lowered its rating on a NIMS class to 'CC' if the class failed S&P's cash flow runs or if it had incurred an interest shortfall, did not receive any cash flows from the underlying deal, and the overcollateralization of the underlying deal was below its target or below its floor, or if the difference between the current overcollateralization and the floor was less than the outstanding class balance. Ratings Lowered Aegis Asset Backed Securities Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-6 N CCC BBB CMO Holdings II Ltd. Rating ------ Series Class To From ------ ----- -- ---- 2004-2 A-2 CC BBB- 2004-2 A-3 CC BB CMO Holdings II Ltd. Rating ------ Series Class To From ------ ----- -- ---- 2004-HE9 A-3 B BB Countrywide Alternative Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-J13N Notes B BBB CSFB NIMs Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-FRE1 NIM 29 A B BBB- CWABS 2004-BC4N Ltd. Rating ------ Series Class To From ------ ----- -- ---- 2004-BC4N A-4 CC BB Ratings Affirmed Cayman ABSC NIMs Series Class Rating ------ ----- ------ 2004-HE6 A2 BBB+ CMO Holdings II Ltd. Series Class Rating ------ ----- ------ 2004-FR3 A-4 BB Sharps SP I LLC Net Interest Margin Trust Series Class Rating ------ ----- ------ 2004-2N Notes BBB Ratings Withdrawn Chase Funding NIM Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-OP1 Notes NR BBB- Countrywide Home Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-14N Notes NR BBB * S&P Downgrades Ratings on 21 Classes of Certs. From Eight RMBS ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 21 classes of mortgage pass-through certificates from eight different U.S. subprime residential mortgage-backed securities transactions from six issuers. Of the 21 lowered ratings, S&P removed one from CreditWatch with negative implications. In addition, S&P affirmed its ratings on the remaining 34 classes of certificates from these transactions. The eight transactions S&P reviewed were issued between 2003 and 2004. The negative rating actions reflect the performance of the individual pools as of the January 2008 remittance period. Current or projected credit support levels were not sufficient to support the previous ratings on the downgraded classes. The seasoning of the pools ranges from 38 to 58 months. While the remaining pool factor for each deal is below 19%, overcollateralization (O/C) is below target for all eight transactions. Serious delinquencies (90-plus days, foreclosures, and REOs) ranged from 7.34% (Terwin Mortgage Trust 2004-1HE) to 25.94% (Home Equity Asset Trust 2003-6) of the current principal balances. Cumulative losses ranged from 0.75% (GSAMP Trust 2003- FM1) to 2.86% (Home Equity Asset Trust 2003-6) of the original principal balances. The affirmations of the ratings on various classes from these deals reflect sufficient credit support for the current ratings as of the January 2008 remittance period. A combination of subordination, excess spread, and O/C provides credit support for these transactions. The underlying collateral for all of the affected transactions in this review consists of subprime mortgage loans. Ratings Lowered Aegis Asset Backed Securities Trust 2004-2 Rating ------ Class To From ----- -- ---- M3 BB+ A- B1 B BBB+ B2 CCC BB B3 CCC B- Citigroup Mortgage Loan Trust Series 2004-CB3 Rating ------ Class To From ----- -- ---- B-2 BB BBB B-3 CCC BBB- B-4 CCC BB+ Fremont Home Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2004-B M-9 B BB 2004-D M8 BB BBB 2004-D M9 B BBB- 2004-D M10 CCC BB+ GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-FM1 B-1 BB+ BBB+ 2003-FM1 B-2 BB BBB- 2003-HE1 M-3 BB+ BBB+ 2003-HE1 B-1 B BBB Home Equity Asset Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-6 M-2 B+ A 2003-6 M-3 B A- 2003-6 B-1 CCC BB 2003-6 B-2 D B Terwin Mortgage Trust 2004-1HE Rating ------ Series Class To From ------ ----- -- ---- 2004-1HE B-3 B BBB- Rating Lowered and Removed From CreditWatch GSAMP Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-HE1 B-2 CCC BB/Watch Neg Ratings Affirmed Aegis Asset Backed Securities Trust Series Class Rating ------ ----- ------ 2004-2 A1, A3, A5 AAA 2004-2 M1 AA 2004-2 M2 A Citigroup Mortgage Loan Trust Series 2004-CB3 Class Rating ----- ------ M-1 AA M-2 A M-3 A- B-1 BBB+ Fremont Home Loan Trust Series Class Rating ------ ----- ------ 2004-B M-1 AA+ 2004-B M-2 AA 2004-B M-3 AA- 2004-B M-4 A+ 2004-B M-5 A 2004-B M-6 A- 2004-B M-7 BBB+ 2004-B M-8 BBB 2004-D M1 AA+ 2004-D M2 AA 2004-D M3 AA- 2004-D M4 A+ 2004-D M5 A 2004-D M6 A- 2004-D M7 BBB+ GSAMP Trust Series Class Rating ------ ----- ------ 2003-FM1 M-1 AA+ 2003-FM1 M-2 A 2003-HE1 M-1 AA+ 2003-HE1 M-2 A Home Equity Asset Trust 2003-6 Class Rating ----- ------ M-1 AA Terwin Mortgage Trust 2004-1HE Class Rating ----- ------ M-1 AA M-2 A M-3 A- B-1 BBB+ B-2 BBB * Fitch Says Weakening Economy Will Challenge Restaurant Industry ----------------------------------------------------------------- The weakening economy, growing pressure on discretionary income and rising food and labor costs will challenge the entire U.S. restaurant industry in 2008, according to Fitch Ratings. "While some element of optimism remains, revenue expectations have been tempered by most of the major restaurant chains that have reported", according to Carla Norfleet Taylor, Director, Fitch Ratings. Darden Restaurants, Inc. is projecting its combined same- restaurant sales growth to be 2%-3% for fiscal 2008, down modestly from its previous guidance of 2%-4%. Brinker International, Inc. expects SRS to remain slightly negative over the next couple of quarters. According to the report, Fitch expects the casual dining segment to continue to experience average SRS declines in the low to mid-single-digit range during 2008. McDonald's Corporation estimates that the weak economy will trim 1%-2% off its U.S. SRS; implying approximately 2.5%-3.5% growth in 2008. After showing improvement during the December quarter, YUM! Brands, Inc. believes it can achieve blended U.S. SRS comparisons of 2%-3% in 2008. Burger King Corporation maintained its 6%-7% revenue growth projection for fiscal 2008 stating that it has not seen any slow down in SRS growth. The company's projection assumes world-wide SRS growth of 2%-3%. Fitch views some of these expectations as still somewhat optimistic but does anticipate U.S. SRS growth in the quick-service segment to remain positive. Inflationary pressure will also continue to be a concern for the industry as labor and commodity costs rise to levels above historical averages. This is in part due to the phasing in of a higher minimum wage and mid-single digit increases in commodity meat costs. "Due to greater competition for fewer dollars, many restaurants will be less aggressive with pricing", said Taylor. "The margins of restaurants with a higher mix of franchised units will be less directly affected by rising operating costs." "Strong investment grade companies are generally better positioned to withstand the downturn", said Taylor. Management teams should focus more on navigating through the difficult operating environment and less on shareholder-friendly actions in 2008. Highly leveraged restaurants will be more vulnerable to the economic slowdown given the magnitude of their fixed obligation commitments. * Fitch Updates Credit Card Indices for the Month of January ------------------------------------------------------------ Fitch Ratings updated on Monday its U.S. credit card ABS Prime, Subprime, and Retail Indices for the month of January. As Fitch had been expecting, charge-offs continued to rise across the credit card sector. Fitch continues to expect that credit card gross charge-offs may climb about 7%, an increase of at least 35% throughout 2008. In the Prime Index, there was mild excess spread compression as charge-offs continued to creep upwards by 0.15% to 5.36%. Gross yield dipped down this month to 19.99% from the high point of 19.92% last month. As a result, one month excess spread saw a decrease of 0.58%. The Subprime Index experienced a gross yield of 24.67%, an increase of 0.96% over last month. 60+ day delinquencies also increased from 4.88% to 5.38% this month. Additionally, one month excess spread exhibited a year over year decrease of 1.76%, however it remains healthy at 7.69%. Movements in the Retail Index also exhibited the same trends found in the Prime and Subprime Indices for charge-offs and one month excess spread. Charge-offs had another significant increase this month of 23bps to 7.29%, coming on top of last month's 60bps increase. These higher losses, coupled with a 19bps decrease in gross yield, caused a decrease in one month excess spread to 9.98%. * Pres. Bush Slashes Budget for Children's Federal Health Programs ------------------------------------------------------------------ President Bush's Fiscal Year 2009 budget cuts federal health programs vital to the future of health and health care for all children. On top of an $18.2 billion cut in Medicaid, the nation's single largest payer of children's health care for working families, the President's budget also cuts $700 million from discretionary health programs that children depend on, ranging from poison control hotlines to funding for training children's doctors. These are examples of the many programs targeted in the President's budget for reductions. -- Cut: In the face of an economic downturn, the budget would cut federal Medicaid's $18.2 billion funding in ways that will negatively impact children's eligibility for coverage and access to health care, well as the providers that serve them. Medicaid, pays for the care of more than 29 million children; -- Eliminate: The budget would kill the $301 million worth of Children's Hospitals Graduate Medical Education program that enables children's hospitals to train more than one-third of all pediatricians, half of all pediatric subspecialists, and the majority of all pediatric research scientists devoted to biomedical advancements in children's health care; -- Eliminate: The budget would eliminate the $19 million Emergency Medical Services for Children program that funds emergency services to assure their capacity to provide a high standard of pediatric emergency medical care; -- Cut: The budget would cut Poison Control Centers by 37% or $10 million, jeopardizing the statewide and regional poison control hotlines that parents rely on to save the lives of their children, who account for more than 60% of all calls to these centers; and -- Level fund: The Maternal and Child Health Block Grant that serves 27.5 million children would be frozen $666 million which is $43 million less than its FY 2000 funding level. "This is a tragedy, because 2009 marks yet another year where the President has failed to make children a priority in his federal budget," Bruce Lesley, First Focus President, said. "This is unquestionably a threat to the long-term health and future productivity of the nation, the exact opposite of the kind of investment-oriented budget the nation needs." The FY 2009 budget includes 22 legislative proposals to Medicaid totaling $17.4 billion over five years and three administrative proposals totaling $800 million over five years. According to First Focus and the National Association of Children's Hospitals, particularly troubling is the proposal to eliminate the law protecting children with special health care needs from being enrolled in managed care without regard to public oversight and federal assurance they would have access to the providers they need. The President's budget reductions for Medicaid are in addition to 11 Medicaid and State Children's Health Insurance Program policy changes released in 2007. The 2007 policy changes would decrease Medicaid spending by at least $12 billion. "If Congress doesn't block nearly a dozen pending Medicaid and SCHIP rules, well as the more $19 billion in new proposed cuts, programs important to children will have been cut by more than $31 billion. The bottom line is - such enormous cuts would represent a frontal assault on health care programs that benefit children," Lawrence McAndrews, president and CEO of the National Association of Children's Hospitals, said. ""Sadly, it's not clear to us that the Administration even understands the effect its combined cuts would have on children's health, much less children's readiness to learn and grow up to become productive members of society." The President's budget does include an increase of $19.7 billion over five years for SCHIP, the State Children's Health Insurance Program. However, according to the Center on Budget and Policy Priorities, states need an increase of approximately $21.5 billion over the next five years simply to maintain their current programs. Under the Administration's proposal, many states would have to scale back their SCHIP programs." "Don't be fooled by the President's proposed SCHIP increase," said Mr. Lesley. "It comes at the expense of Medicaid and limits eligibility in SCHIP to children in families at or below 200 percent of poverty." "The nation desperately needs to invest in the health of children -- our most precious national resource," Mr. Lesley said. "This budget simply doesn't cut it." "Children's hospitals look forward to working with our child health allies in Congress to ensure these many proposals harmful to children will be rejected," Mr. McAndrews added. First Focus is a bipartisan advocacy organization launched by America's Promise Alliance that is committed to making children and their families a priority in federal policy and budget decisions. The National Association of Children's Hospitals represents more than 135 children's hospitals across the country, including independent acute care children's hospitals, children's specialty hospitals, and children's hospitals that operate within larger institutions. * Six Banks Join Alliance to Grant 30-Day "Pause" on Foreclosures ----------------------------------------------------------------- Appearing with U.S. Treasury secretary Hank Paulson and U.S. Housing and Urban Development secretary Alphonso Jackson, Bank of America Consumer Real Estate and Insurance Services Group president Floyd Robinson spoke in support of a new initiative that will broaden and improve outreach efforts to distressed borrowers. Robinson conveyed Bank of America's support for Project Lifeline, which will target severely delinquent borrowers to encourage them to respond to their mortgage servicer and pursue loan modification options. Project Lifeline continues Hope Now's original focus and expands its outreach to severely delinquent mortgage and home equity borrowers. In addition to Bank of America, Project Lifeline is supported directly by Citigroup Inc., Countrywide Financial Corp., JP Morgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co. All six servicers are part of the Hope Now Alliance, which includes 25 servicers across the nation. The Wall Street Journal reported yesterday, citing Reuters, that under the Project Lifeline, the banks are to connect with "seriously delinquent" homeowners who have at least 90 days lapse in their mortgage payments. The banks, WSJ related, will then afford some of the homeowners a 30-day "pause" on foreclosures and will try to make the defaulted loans "affordable." "The foreclosure crisis is having a serious economic and social impact on communities across the United States," Mr. Robinson said. "Bank of America strongly supports this private enterprise initiative to build upon the efforts of Hope Now's previous success in preventing foreclosures." "We want homeowners facing foreclosure to take the urgently required first step and reach out to their servicer, or housing counselor, and get started on a recovery plan," Mr. Robinson added. "Project Lifeline represents a broad, national approach to looking at each homeowner's situation individually - making sure that we stop the clock on foreclosure long enough to complete the loan modification process in those cases where it's possible to do so." The Hope Now Alliance urges people who may be having difficulty paying their mortgage to call their servicer or the Homeowner's Hope Hotline, 1-888-995-HOPE. The Hope Hotline is provided by the Homeownership Preservation Foundation. About Bank of America Headquartered in Charlotte, North Carolina, Bank of America Corp. (NYSE:BAC) -- http://www.bankofamerica.com-- is a bank holding company. Bank of America provides banking and non-banking financial services and products through three business segments: global consumer and small business banking, global corporate and investment banking, and global wealth and investment management. In December 2006, the company sold its retail and commercial business in Hong Kong and Macau to China Construction Bank. In October 2006, BentleyForbes, a commercial real estate investment and operations company, acquired Bank of America plaza in Atlanta from CSC Associates, a partnership of Cousins Properties Incorporated and the company. In June 2007, the company acquired the reverse mortgage business of Seattle Mortgage Company, an indirect subsidiary of Seattle Financial Group Inc. In October 2007, ABN AMRO Holding N.V. completed the sale of its United States subsidiary, LaSalle Bank Corporation, to Bank of America. About Citigroup Inc. New York-based Citigroup Inc. (NYSE: C) -- http://www.citigroup.com/-- is a diversified global financial services holding company whose businesses provide a range of financial services to consumer and corporate customers. The company is a bank holding company. Its segments include Global Consumer Group, Corporate and Investment Banking (CIB), Global Wealth Management and Alternative Investments (AI). Citigroup has more than 200 million customer accounts and does business in more than 100 countries. 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. About JP Morgan Chase JP Morgan Chase -- http://www.jpmorgan.com/-- is a financial services giant, with J.P. Morgan Securities as its primary nonbank subsidiary. The JP Morgan companies engage in investment banking activities in the US. Their services include debt and equity underwriting, advice on mergers and acquisitions and restructuring, securities dealing and brokerage, and trade execution services, such as market making, equity derivatives, and structured investments, for institutional clients. They also offer a broad array of economic and equity research. About Washington Mutual Headquartered in Seattle, Washington Mutual Inc. (NYSE:WM) -- http://newsroom.wamu.com/-- is a group of consumer and small business banks. At June 30, 2007, WaMu and its subsidiaries reported total assets of $312.22 billion. The company's subsidiary banks currently operate approximately 2,700 consumer and small business banking stores throughout the United States. About Wells Fargo Wells Fargo & Company (NYSE: WFC) -- https://www.wellsfargo.com/ -- is a financial holding company and a bank holding company. The company provides retail, commercial and corporate banking services through banking stores located in 23 states. It provides other financial services through subsidiaries engaged in various businesses. The company operates in three business segments: Community Banking, Wholesale Banking and Wells Fargo Financial. In April 2007, First Data Corporation acquired the Instant Cash Services business, from Wells Fargo Bank, N.A., a subsidiary of the company. In October 2007, Greater Bay Bancorp completed its merger with the company. * Focus Management's Naglewski Named as Finalist by M&A Advisor --------------------------------------------------------------- Focus Management Group has been selected as finalist for the Turnaround Consulting Firm of the Year award for the Second Annual M&A Advisor Turnarounds Awards. Ken Naglewski, a managing director of Focus, was also selected as a finalist in the Turnaround Consultant of the Year category. The M&A Advisor's awards program recognizes firms and professionals for their accomplishments completed in 2007 in the areas of turnarounds, reorganizations and bankruptcy restructuring. "Focus experienced strong growth in 2007 by supporting a record number of clients in diverse engagements throughout the country," said J. Tim Pruban, President of Focus Management Group. "We are honored that the M&A Advisor has chosen to recognize our firm, as well as Ken Naglewski, one of our senior team members, for our accomplishments in 2007. Our growth has been driven by a seasoned professional team dedicated to delivering outstanding professional services to our clients." Mr. Naglewski has extensive experience in financial restructuring, operational turnarounds, Chapter 11 reorganizations and distressed business sales at both Fortune 500 and middle market companies. About Focus Management Focus Management Group offers nationwide capabilities in turnaround management, business restructuring and asset recovery. Headquartered in Tampa, FL, with offices in Atlanta, Chicago, Greenwich, Los Angeles and Nashville, Focus Management Group provides turn-key support to stakeholders including secured lenders and equity sponsors. The Company provides a comprehensive array of services including turnaround management, interim management, operational analysis and process improvement, case management services, bank and creditor negotiation, asset recovery, recapitalization services and special situation investment banking for distressed companies. Focus Management Group has significant expertise in the insolvency arena. FOCUS Professionals have served debtors, creditors, and unsecured stakeholders in their efforts to accomplish the best outcome. Over the past decade, Focus Management Group has successfully assisted hundreds of clients operating in diverse industries, guiding them to maximize performance or asset recovery. Adverse situations are Focus Management Group's forte - finding winning compromises in a timely manner when faced with the most discouraging of circumstances is what separates Focus Management Group from the competition. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- 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, 2008 BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Contact: 240-629-3300; http://www.beardaudioconferences.com Feb. 28, 2008 BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Contact: 240-629-3300; http://www.beardaudioconferences.com 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 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. 10-11, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Healthcare -24-24Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ 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 15-16, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ 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 & 20, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Corporate Reorganizations Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ June 24, 2008 TURNAROUND MANAGEMENT ASSOCIATION Fraud Panel Citrus Club, Orlando, Florida Contact: 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://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://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/ Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ 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 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: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording 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 Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings 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 New 'Red Flag' Identity Theft Rules 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 Corporate Restructuring 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 Audio Conference Recording 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/ * * * Featured Conferences Beard Conferences presents: April 10-11, 2008 Ninth Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Brochure available soon! May 15-16, 2008 Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Brochure available soon! * * * Beard Audio Conferences presents: Feb. 27, 2008 Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Speaker: Thomas J. Salerno For more information, visit: http://www.beardaudioconferences.com/bin/conference_details?code=B R-046 * * * 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. Joseph Medel C. Martirez, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Ma. Cristina I. Canson, Christopher G. Patalinghug, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***