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 20, 2008, Vol. 12, No. 43 Headlines ACG HOLDINGS: Dec. 31 Balance Sheet Upside-Down by $269.9 Million ACIES CORP: December 31 Balance Sheet Upside-Down by $1 Million ADVANCED MEDICAL: To Reduce Workforce by 150 Positions AMBAC FINANCIAL: Selling Shares at Discount to Raise $2 Billion AMERICAN MEDIA: Posts $14.0 Mil. Net Loss for 2008 Third Quarter ANGIOTECH PHARMA: Posts $21.2 Mil. Net Loss for 2007 Fourth Qtr. ALLIS-CHALMERS: Expects to Report Net Income of $50.3 Mil. in 2007 APPROVED AUTO: Case Summary & 25 Largest Unsecured Creditors ATARI INC: Dec. 31 Balance Sheet Upside-Down by $16.8 Million BALLY TECH: Earns $24.4 Million in Quarter Ended December 31 BARNHILL'S BUFFET: Court Okays MGLAW PLLC as Committee's Counsel BEAR STEARNS: Investigation Focuses on Conference Call "Fraud" BLUE WATER: Seeks Permission to Hire Foley & Lardner as Counsel BLUE WATER: Seeks Permission to Hire Administar as Notice Agent BRAIN MATTERS: Case Summary & 14 Largest Unsecured Creditors BUCYRUS INT'L: Earns $61.9 Mil. for 2007 Fourth Qtr. Ended Dec.31 BUFFETS HOLDINGS: Court Approves Sale of Four Properties BUFFETS HOLDINGS: Court OKs Miscellaneous Asset Sale Procedures BUFFETS HOLDINGS: Committee Taps Otterbourg Steindler as Counsel BUFFETS HOLDINGS: Committee Taps Pachulski Stang as Co-Counsel BURGER KING: Earns $49 Million in Fiscal 2008 Second Quarter CANADIAN STAGE: Axes Jobs and Suspends Play Development Program CAPITALSOURCE INC: Board Lets CEO Decide Fate of TierOne Merger CELESTICA INC: To Hold Annual Gen. Shareholders' Meeting April 24 CENTURY ALUMINUM: Posts $112.3MM Net Loss for 2007 Fourth Quarter CHOICE HOTELS: Board Elects Scott A. Renschler as Director CHRYSLER LLC: Exceeds Recovery Plan on Key Metrics, Cerberus Says CHRYSLER LLC: Denied by Court to Pull Out Tooling Equipment CITY OF VALLEJO: Faces $10MM Shortfall, On Brink of Bankruptcy CLEAR CHANNEL: Earns $320 Million in Quarter Ended December 31 COUNTRYWIDE FINANCIAL: Delinquency & Foreclosure Rates Soar DAVITA INC: Earns $85.7 Million in 2007 Fourth Quarter DAYTON SUPERIOR: Net Loss Down to $3MM in Qtr. Ended December 31 DEAN FOODS: Earns $32.6 Million in 2007 Fourth Quarter DELTA AIR: Reports Traffic Results for January 2008 DELTA FINANCIAL: Court Approves Sale of Non-Performing Loans DELTA FINANCIAL: Wants Insurers to Pay for D&O Legal Costs DELTA FINANCIAL: Pabrai Has 3.8% Equity Stake in Company DIVERSIFIED GRAPHICS: Involuntary Chapter 11 Case Summary DOMTAR CORP: Reports $26 Million Net Loss For 2007 Fourth Quarter EMERSON HOSPITAL: Hires FTI Consulting to Review Financial Reports EMPIRE RESORTS: Bill Entitling Company to 42% Vendor Fee Passed FAMILY ROOM: Dec. 31 Balance Sheet Upside-Down by $3 Million FEDDERS CORP: Allowed to Reject Mr. Giordano's Employment Contract FIRST MAGNUS: Judge Marlar Says Plan of Liquidation is Confirmable FIRST MAGNUS: Case Summary & Nine Largest Unsecured Creditors FIRST NLC: Section 341(a) Meeting Scheduled for Feb. 29 FIRST NLC: Files Schedules of Assets and Liabilities FORTUNOFF: Public Sale of Assets Scheduled for February 26 FORTUNOFF: Court Approves Expense Reimbursement Under Sale Pact GAMESTOP CORP: Raises Earnings Guidance After Strong Jan. Result GENTIVA HEALTH: Earns $8.8 Million for Quarter Ended Dec. 31, 2007 GEORGIA GULF: Names Paul Carrico as Chief Exec. Officer and Pres. GEORGIA GULF: Reports $227.3 Mil. Net Loss for 2007 Fourth Quarter GMAC LLC: To Shut Down 75% of Auto Credit Offices in North America HARRIS CONCRETE: Case Summary & 20 Largest Unsecured Creditors HEARTLAND AUTO: U.S. Trustee Adds Two Members to Creditors Panel HEMOSOL CORP: Court Extends CCAA Stay of Proceedings to May 30 HERCULES OFFSHORE: Buying Transocean Inc.'s Drilling for $320 Mil. HERITAGE WORLDWIDE: Net Loss Down in Qtr. Ended Dec. 31 HOLLEY PERFORMANCE: Wants Pepper Hamilton as Bankruptcy Counsel HOLOGIC INC: Board Approves Two-For-One Stock Split IDEAEDGE INC: Posts $748,544 Net Loss in 1st Quarter Ended Dec. 31 INFORM WORLDWIDE: Dec. 31 Balance Sheet Upside-Down by $698,484 INTERPHARM HOLDINGS: Dec. 31 Balance Sheet Upside-Down by $5.3 M. JARDEN CORP: Reports $11.2 Mil. Net Loss for 2007 Fourth Quarter JAYS FOODS: Exclusive Plan Filing Period Extended Until April 8 JED OIL: Redemption of $40M Convertible Notes Extended to March 18 KALIL FRESH: Fourth Quarter 2007 Woes Ends in Chapter 7 Filing KANSAS CITY: Earns $55 Million in Fourth Quarter Ended December 31 KAREN DELANEY: Case Summary & 17 Largest Unsecured Creditors KIMBALL HILL: Posts $46.4 Million Net Loss in Qtr. Ended Dec. 31 KINGSWAY FINANCIAL: Posts $103.5 Net Loss for 2007 Fourth Quarter LAS VEGAS: Reports Change in Beneficial Ownership of Common Shares LEVITT AND SONS: Court Gives Final Nod on Wachovia DIP Financing LINDA LUNDSTROM: Goes Bankrupt, Commences Liquidation of Assets MACKLOWE PROPERTIES: Gets Offers to Buy GM Building for $3+ Bil. MAFM LLC: Case Summary & Three Largest Unsecured Creditors MAGNA ENT: Gets Nasdaq Deficiency Notice for Class A Stock MEDCOMSOFT INC: Dec. 31 Balance Sheet Upside Down by $90T MGM MIRAGE: Infinity Joint Offer Gets 109.4 Mil. of Share Tenders MOHAWK VALLEY: Case Summary & 20 Largest Unsecured Creditors MOVIE GALLERY: Files Second Amended Plan of Reorganization MOVIE GALLERY: Wants $4.7 Million Employee Incentive Plan Approved NETWOLVES CORP: Dec. 31 Balance Sheet Upside-Down by $1M NEXTPHASE WIRELESS: Dec. 31 Balance Sheet Upside-Down by $3.2 Mil. NICHOLS BROTHERS: Completes Sale of Assets to Ice Floe NORTH AMERICAN: Earns $CDN25.4 Million for Quarter Ended Dec. 31 NORTHWEST BITUMINOUS: Case Summary & 19 Largest Unsec. Creditors OMEGA HEALTHCARE: Reports $17.3 Mil. Earnings for 2007 Fourth Qtr. OTTO E. BEYER: Ask Court's Approval to Use Cash Collateral PATRIOT'S POINTE: Can Use Lender's Cash Collateral Through Feb. 26 PATRIOT'S POINTE: Court Names John Peterson as Financial Analyst PIERRE FOODS: Cynthia Hughes is New Vice President and CFO PIPER RESOURCES: Obtains Creditor Protection Under CCAA PKAM LLC: Case Summary & 20 Largest Unsecured Creditors PLASTECH ENGINEERED: Court Says No to Chrysler's Tooling Request PREMIUM PORK: Case Summary & Seven Largest Unsecured Creditors PRINCETON LAUNDRY: Case Summary & XX Largest Unsecured Creditors ROGER SCHAEFER: Case Summary & 14 Largest Unsecured Creditors SAXON FUNDING: Fitch Junks Ratings on Three Certificate Classes SEA CONTAINERS: Formally Seeks Court Approval for Pensions Pact SHARPER IMAGE: Hires Crisis Consultant as CEO Hinting Biz Changes STRATOS GLOBAL: Earns $2.0 Mil. for 2007 Fiscal Year Ended Dec. 31 STRATUS SERVICES: Dec. 31 Balance Sheet Upside-Down by $7.9 Mil. STUDENT FINANCE: Royal Wants Stay Lifted to Reclaim $10 Mil. Bond SUNCOM WIRELESS: Gets $686.5MM Consents for 8-1/2% Senior Notes TAYLOR CAPITAL: Elects Mark A. Hoppe to Board of Directors TEEVEE TOONS: Files for Chapter 11 Bankruptcy in Manhattan TEEVEE TOONS: Case Summary & 20 Largest Unsecured Creditors THORNBURG MORTGAGE: Fitch Affirms 'B' Rating on Class B-5 Certs. TWL CORP: Dec. 31 Balance Sheet Upside-Down by $26.3 Million UTIX GROUP: Board Opts to Liquidate After Failing to Get Financing VICTOR PLASTICS: Section 341(a) Meeting Scheduled for March 11 VOIP INC: Lowers Exercise Rates of Certain Convertible Securities WESTSHORE GLASS: Gets Interim Approval to Use Cash Collateral WINNER LLC: Case Summary & Largest Unsecured Creditor ZIM CORP: Earns $155,758 for Third Quarter Ended Dec. 31, 2007 * FTC, Local Governments to Combat Foreclosure "Rescue" Fraud * Gersten Savage Names Peter Gennuso as Corporate Law Partner * Upcoming Meetings, Conferences and Seminars ********* ACG HOLDINGS: Dec. 31 Balance Sheet Upside-Down by $269.9 Million ----------------------------------------------------------------- ACG Holdings Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $224.1 million in total assets and $494.0 million in total liabilities, resulting in a $269.9 million total stockholders' deficit. At Dec. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $62.6 million in total current assets available to pay $439.0 million in total current liabilities. The company reported a net loss of $7.2 million on sales of $118.9 million for the third quarter ended Dec. 31, 2007, compared with a net loss of $4.5 million on sales of $120.1 million in the same period in the third quarter ended Dec. 31, 2006. Print sales decreased $700,000 to $107.6 million from $108.3 million in the third quarter ended Dec. 31, 2007. The decrease in print sales includes a decrease in print production volume of approximately 3.8% and decreased paper prices. The volume decline is largely attributable to a weakening retail environment, certain changes in customer requirements and competitive losses driven by price and merger activity. EBITDA for the print business decreased to $10.0 million in the 2007 three-month period from $10.2 million in the 2006 three-month period. Premedia services sales decreased approximately $400,000 to $11.3 million from $11.7 million in the 2006 three-month period. The decrease is primarily related to decreased premedia production volume. Premedia services' EBITDA remained unchanged at $1.7 million in both the 2007 and 2006 three-month periods. In the 2007 three-month period, interest expense, net increased to $11.4 million from $10.2 million in the 2006 three-month period. This increase is the result of both higher levels of indebtedness and increased borrowing costs. In the 2007 three-month period, income tax expense decreased to $48,000 from expense of $138,000 in the 2006 three-month period. Cash Interest on 10% Notes Deferred to March 15 At Dec. 31, 2007, the company was in compliance with the covenant requirements set forth in the 2005 Credit Agreement and the Receivables Facility, as amended, and the 10% Notes indenture. On Nov. 14, 2007, holders of in excess of 90% of the aggregate principal amount of the 10% Notes agreed with the company to (a) defer to March 15, 2008, the semi-annual payment of cash interest on the 10% Notes held by such holders, which would otherwise have been due on Dec. 15, 2007, and (b) amend certain covenants in the 10% Notes indenture. In consideration thereof, the company issued to each such holder a senior second secured noninterest-bearing promissory note due March 15, 2008, of Graphics with a principal amount equal to the sum of the amount of the cash interest payment deferred on the 10% Notes held by such holder and a consent fee equal to 1% of the principal amount of the 10% Notes held by such holder. Such 2007 Promissory Notes are fully and unconditionally guaranteed by Holdings. Full-text copies of the company's consolidated financial statements for the third quarter ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?281f About ACG Holdings Based in Brentwood, Tenn., ACG Holdings Inc. has no operations or significant assets other than its investment in American Color Graphics Inc. -- http://www.americancolor.com/-- Holdings owns 100% of the outstanding voting shares of Graphics. The two business segments of the commercial printing industry in which the company operates are (i) print and (ii) premedia services. ACIES CORP: December 31 Balance Sheet Upside-Down by $1 Million --------------------------------------------------------------- Acies Corporation's balance sheet at Dec. 31, 2007, showed total assets of $1.56 million and total liabilities of $2.57 million, resulting to a total shareholders' deficit of $1.01 million. The company also reported its fiscal third quarter results for the three and nine months ended Dec. 31, 2007. For the three months ended Dec. 31, 2007, net loss improved to $71,765 from $405,021 as the increased gross margin and decreased G&A expense were partially offset by a $34,000 increase in interest expense. For the nine months ended Dec. 31, 2007, net loss improved to $487,690 compared to a net loss of $813,971 as the increased gross margin and decreased G&A expense were partially offset by a $102,000 increase in interest expense. "We are pleased to be heading toward our primary goal of becoming profitable in the near future," Oleg Firer, president and chief executive officer of Acies, said. "As our revenues and margins continue to grow, and with controlled G&A costs which continue to decrease, I am confident that sustained profitability and positive cash flow are on the very real and visible horizon for Acies." "Our flexible sales strategy and operations infrastructure have enabled us to 'roll with the punches' in our ever-changing competitive landscape," Mr. Firer added. "We are able to overcome challenges in the short-run to remain focused on maximizing shareholder value over the long run." About Acies Corporation Headquartered in New York City, Acies Corporation (OTC:ACIE) -- http://www.aciesinc.com/--is a business services company that, through its wholly owned subsidiary, Acies Inc., specializes in providing payment processing services primarily to small- to medium-sized merchants across the United States. Acies' payment processing services enable merchants to process Credit, Debit, Electronic Benefit Transfer, Check Conversion, and Gift & Loyalty transactions. Acies also offers traditional and next-generation point-of-sale terminals, which enable merchants to utilize Acies' payment processing services. For more information, visit. ADVANCED MEDICAL: To Reduce Workforce by 150 Positions ------------------------------------------------------ To further enhance its global competitiveness, operating leverage and cash flow, the Board of Directors of Advanced Medical Optics Inc. on Feb. 12, 2008, committed to an additional plan to reduce its fixed costs. The additional plan includes a net workforce reduction of approximately 150 positions, or about 4% of the company's global workforce. In addition, AMO plans to consolidate certain operations, including the relocation of all activities at the Irvine plant, to improve its overall facility utilization. This additional plan includes workforce reductions and related expenses, outplacement assistance, facilities-related costs and accelerated amortization of certain long-lived assets. AMO expects to complete these additional activities in 2008 and estimates the total non-recurring pre-tax charges resulting from the additional plan to be in the range of $25.0 million to $30.0 million, substantially all of which will be incurred in 2008. The significant majority are expected to be cash expenditures. On Dec. 18, 2007, the company disclosed that it would relocate its femtosecond laser manufacturing operations from the Irvine plant to its excimer laser and phacoemulsification manufacturing facility in Milpitas, California, as well as the the assembly of IntraLase disposable patient interfaces from the Irvine plant to AMO's facility in Puerto Rico. About Advanced Medical Headquartered in Santa Ana, Calif., Advanced Medical Optics -- http://www.amo-inc.com/-- develops, manufactures and markets ophthalmic surgical and contact lens care products. AMO employs employs approximately 4,200 worldwide. The company has operations in 24 countries and markets products in approximately 60 countries. * * * As reported in the Troubled Company Reporter on Oct. 12, 2007, Moody's Investors Service downgraded Advanced Medical Optics, Inc.'s Corporate Family Rating and Probability of Default Rating to B2 from B1. The rating outlook was revised to stable. Ratings hold to date. AMBAC FINANCIAL: Selling Shares at Discount to Raise $2 Billion --------------------------------------------------------------- Ambac Financial Group Inc. intends to sell shares at a markdown price to hold down its top credit rating, The Wall Street Journal reports citing people familiar with the matter. Ambac Financial's complex spin-off plan has prompted the stock offering, so the company can raise $2 billion in capital immediately as required by rating agencies. As reported in the Troubled Company Reporter on Feb. 18, 2008, Ambac Financial and FGIC Corp. are considering splitting their operations to ensure municipal bonds backed by both insurers retain high credit ratings. The idea would be to create a new unit that insures municipal debt, and another to keep responsibility for riskier debt securities already insured, like those tied to the housing market. A halving of Ambac would create one unit that insures municipal debt and one that would cover rapidly diminishing securities tied to the mortgages in a structure that effectively creates a so- called "good bank" and "bad bank." Ambac is mum on the issue. Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. * * * On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. As reported Troubled Company Reporter on Jan. 17, 2008, Moody's Investors Service placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. AMERICAN MEDIA: Posts $14.0 Mil. Net Loss for 2008 Third Quarter ---------------------------------------------------------------- American Media Inc.'s subsidiary, American Media Operations Inc., reported financial results for the 2008 third quarter ended Dec. 31, 2007. For the three months ended Dec. 31, 2007, the company incurred a net loss of $14.0 million compared to the net loss for the three months ended Dec. 31, 2006 at $306.9 million. For the nine months ended Dec. 31, 2007, the company reported a net loss of $31.8 million, in comparison with $338.7 million net loss for the same period of the previous year. Revenue for the third quarter of fiscal year 2008 was $115 million, as compared to $107 million in the third quarter of fiscal year 2007, representing a 7% increase. For the nine months ended December 31, 2007, revenues were $368 million, as compared to $346 million in the prior-year period, representing a 6% increase. The increases in revenue during both the quarter and nine-month periods were primarily attributable to favorable results in advertising and newsstand revenue. The company's Shape, Star and Men's Fitness magazines all delivered strong performances in calendar year 2007 versus calendar year 2006. As measured by Publishers Information Bureau, an independent organization that tracks advertising carried by consumer magazines, Shape ad pages were up 13%, Star ad pages were up 25% and Men's Fitness ad pages were up 25%. All three leading AMI titles outperformed their respective categories during calendar year 2007. As compiled by PIB, the category in which Shape is ranked increased 10%; the category in which Star is ranked grew 6%; and, the category in which Men's Fitness is ranked increased 11%. Operating income for the third quarter of fiscal year 2008 was $17 million, as compared to a loss of $302 million in the third quarter of fiscal year 2007. For the nine months ended Dec. 31, 2007, operating income was $75 million, as compared to a loss of $275 million in the prior- year period. "In our third quarter of fiscal year 2008, AMOI saw continued strong revenue growth driven by both advertising and circulation gains from our major titles Shape, Star and Men's Fitness, each of which is experiencing a record advertising year," AMOI chairman and chief executive officer David Pecker, said. "Over the first three quarters of fiscal year 2008, we made excellent progress towards the cost-reduction and revenue- enhancement goals we outlined in our management action plan in February 2007," Dean Durbin, AMOI executive vice president and chief financial officer, said. "This contributed to a 7% decrease in expenses in the third quarter and a 7% decrease in expenses in the first nine months of fiscal year 2008 when the non-cash provision for impairment is excluded." "Based on our performance to date, as well as on our projections for the fourth fiscal quarter, we fully expect to achieve the $36 million target contemplated under our management action plan," Mr. Durbin continued. "Looking ahead, we believe AMI is well positioned, despite an increasingly challenging environment," Mr. Pecker concluded. "We have the leading titles in two of the strongest publishing categories today, health & fitness and celebrity, and their performance continues to be solid in the current quarter." About American Media Operations Heasdquartered in Boca Raton, Florida. American Media Operations Inc. -- http://www.americanmediainc.com/-- is a publisher in the field of celebrity journalism, and health and fitness magazines. The company's publications include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, Muscle & Fitness, Muscle & Fitness Hers, Flex, National Enquirer, Globe, Country Weekly, Mira!, Sun, National Examiner and other publications. The company has aggregated its business into five segments: celebrity publications, newspaper publications, women's health and fitness publications, distribution services and corporate/other. Distribution Services Inc., a wholly owned subsidiary, arranges for the placement of its publications and third-party publications with retailers. DSI coordinates the racking of magazine fixtures for selected retailers. In addition, DSI provides sales of marketing, merchandising and information gathering services for third parties including non-magazine clients. The company is a wholly owned subsidiary of American Media Inc. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit rating on American Media Operations Inc. and raised the rating on the company's senior secured bank loan to 'B' from 'B-'. At the same time, S&P removed the ratings from CreditWatch with negative implications, where they were placed on Feb. 21, 2006, based on the company's delay in filing its financial statements. The outlook is developing. ANGIOTECH PHARMA: Posts $21.2 Mil. Net Loss for 2007 Fourth Qtr. ---------------------------------------------------------------- Angiotech Pharmaceuticals Inc. reported $21.2 million in net loss for the fourth quarter of 2007 ended Dec. 31, 2007, compared to $11.7 million net loss in the same period for the previous year. For the full fiscal year ended Dec. 31, 2007, the company incurred a net loss of $59.3 million compared to $4.6 million net income for fiscal 2006. Total revenues generated for the 2007 fourth quarter are $71.3 million compared to the revenues generated for the 2006 fourth quarter at $$93.21 million. For the fiscal year 2007, total revenues are $287.7 million, in comparison with $$315.1 million total revenues for fiscal 2006. As of Dec. 31, 2007, the company's balance sheet reflected total assets of $1.15 billion, total debts of $0.7 billion, and a total stockholder's equity of $0.4 billion. "Throughout 2007, we continued to build our business with the launch of new products, the receipt of regulatory approvals, and the establishment of new partnerships," Dr. William Hunter, president and chief executive officer of Angiotech, said. "We expect our new product pipeline and our portfolio of innovative currently marketed products to provide growth and opportunity in 2008 and beyond." "With our expanded sales and marketing team in place and many of our reorganization activities completed, we believe that we are well positioned to achieve our targets for sales growth and gross margin improvements in the coming year," Tom Bailey, chief financial officer of Angiotech, said. "We are confident that during 2008 we will begin to realize returns on the various investments we have made in our business over the last two years." About Angiotech Based in Vancouver, British Ccolumbia, Angiotech Pharmaceuticals Inc. (NASDAQ: ANPI, TSX: ANP)-- http://www.angiotech.com/-- is a pharmaceutical and medical device company with over 1,500 dedicated employees. Angiotech discovers, develops and markets innovative treatment solutions for diseases or complications associated with medical device implants, surgical interventions and acute injury. As reported in the Troubled Company Reporter on Jan. 3, 2008, Standard & Poor's Ratings Services affirmed the ratings, including the 'B-' long-term corporate credit rating, on Vancouver-based Angiotech Pharmaceuticals Inc. and removed them from CreditWatch with negative implications, where they were placed Oct. 22, 2007. The outlook is negative. ALLIS-CHALMERS: Expects to Report Net Income of $50.3 Mil. in 2007 ------------------------------------------------------------------ Allis-Chalmers Energy Inc. disclosed that for the full year 2007 it expects to report revenues of $574.0 million, operating income of $125.0 million and net income of approximately $50.3 million. For the fourth quarter 2007 it expects to report revenues of approximately $147.0 million, operating income of $21.0 million and net income of approximately $5.6 million. Adjusted EBITDA is expected to be $185.4 million and $38.6 million for the full year and fourth quarter of 2007, respectively. Operating results in the fourth quarter of 2007 were primarily impacted by: -- weakness in demand for drill pipe in the Gulf of Mexico due to the hurricane season and the departure of rigs to the international market. -- severe flooding in Villahermosa, the largest operating yard in the company's Mexican tubular services operation. -- labor strikes in Argentina for 15 days, because of the October presidential elections, affecting the company's International Drilling segment. Additionally, the new Argentine government imposed a corporate tax on all employees. -- start up costs and low utilization for our coil tubing units. Investment in BCH Ltd. Allis-Chalmers also disclosed nced that it has entered into an agreement with BCH Ltd. to invest $40.0 million in cash in BCH in the form of a 15% Convertible Subordinated Secured debenture. The debenture is convertible, at any time, at the option of Allis- Chalmers into 49.0% of the common equity of BCH. At the end of two years, Allis-Chalmers has the option to acquire the remaining 51.0% of BCH from its parent, BrazAlta Resources Corp., based on an independent valuation from a mutually acceptable investment bank. BrazAlta is a publicly traded Canadian-based international oil and gas corporation with operations in Brazil, Northern Ireland, and Canada (TSX.V:BRX). BCH is a Canadian-based oilfield services company engaged in contract drilling operations exclusively in Brazil. BCH has five drilling rigs under two to three year contracts with Petroleo Brasileiro S.A., and its partners, and contracts for two additional drilling rigs and one service rig with BrazAlta for a term of three years. Allis-Chalmers expects that these contracts have the potential to generate revenues of approximately $125.0 million to BCH over the next three years. Micki Hidayatallah, Allis-Chalmers' chairman and chief executive officer, stated, "We are very excited about the opportunity to make an investment in the drilling and completion market in Brazil, the most advanced economy in South America. We could not have found an investment in this market with a more predictable, stable and profitable business model. As capital expenditures by Petrobras and BrazAlta continue to increase, we look forward to increasing our assets in Brazil by working with BCH's management team in exploring potential markets for our rental inventory, directional drilling, underbalanced drilling, coil tubing and casing and tubing installation services. We also believe that the very capable management team at BCH will quickly seize the opportunity to expand its drilling and completion services with its principal customers, Petrobras and BrazAlta. About Allis-Chalmers Energy Headquartered in Houston, Texas, Allis-Chalmers Energy Inc. (NYSE: ALY) -- http://www.alchenergy.com-- is an oilfield services company. It provides services and equipment to oil and natural gas exploration and production companies, domestically primarily in Texas, Louisiana, New Mexico, Colorado, Oklahoma, Mississippi, Wyoming, Arkansas, West Virginia, offshore in the Gulf of Mexico, and internationally primarily in Argentina and Mexico. Allis-Chalmers provides rental services, international drilling, directional drilling, tubular services, underbalanced drilling, and production services. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services revised its outlook on Allis- Chalmers Energy Inc. to positive from stable and affirmed its 'B' corporate credit rating on the company. APPROVED AUTO: Case Summary & 25 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Approved Auto Investments, L.L.C. dba Approved Auto 402 South Kingshighway Cape Girardeau, MO 63703 Bankruptcy Case No.: 08-10129 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- Brenda Kay Newbern 08-10128 Newbern and Proffer Investments, L.L.C. 08-10130 Chapter 11 Petition Date: February 18, 2008 Court: Eastern District of Missouri (Cape Girardeau) Debtors' Counsel: Erica Dawn Koetting, Esq. (ericak@oloughlinlawfirm.com) O'Loughlin, O'Loughlin & Koett, L.C. 1736 North Kingshighway Cape Girardeau, MO 63701 Tel: (573) 334-9104 Fax: (573) 334-5256 http://oloughlinlawfirm.com/ Approved Auto Investments, LLC's Financial Condition: Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million A. Approved Auto Investments, LLC's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alliance Bank 402 South $894,361 P.O. Box 1458 Kingshighway; Cape Girardeau, MO 63702 4240 State Highway 74; inventory and accounts All inventory, $508,593 accounts and equipment Debtor guaranteed $289,449 debts of Newbern & Proffer Investments, L.L.C. Debtor guaranteed $184,370 the indebtedness of Newbern & Proffer Investments, L.L.C. Roscoe Newbern Roscoe loaned $100,000 3016 Mintue Men Way money to the lot to Cape Girardeau, MO 63701 keep the business operating Internal Revenue Service Withholding taxes $90,000 Cincinnati, OH 45999 from tax previous years before current management took over W.J.N. Enterprises $32,000 B. Brenda Kay Newbern's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alliance Bank Debtor guaranteed the $1,876,773 P.O. Box 1458 debts of Newbern Cape Girardeau, MO 63702 & Proffer, L.L.C. 513 South Frederick, $34,000 Cape Girardeau, Missouri Rental real estate; value of security: $32,000 G.M.A.C. automobile; value of $45,000 P.O. Box 78252 security: $34,000 Phoenix, AZ 85062 Internal Revenue Service income tax for 2001 $20,243 Cincinnati, OH 45999 and 2002 Wells Fargo business expenses $5,842 Bank of America M.B.N.A. credit card purchases $3,574 Merrick Bank $2,853 J.C. Penney credit card purchases $1,631 B.P. Card Member credit card purchases $1,167 Capitol One $1,099 Metropolitan Bureau $699 C. Newbern and Proffer Investments, LLC's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alliance Bank Debtor guaranteed the $724,471 P.O. Box 1458 debts of Approved Cape Girardeau, MO 63702 Auto Investments, L.L.C. Debtor secured the $508,593 loans of Approved Auto Investments, L.L.C. Inventory, accounts $289,449 and equipment Inventory, accounts $205,137 and equipment, lien on overage account Lien on debtor's $168,890 overage account with Alliance Bank Debtor guaranteed $168,890 the debts of Approved Auto Investments, L.L.C. Melinda Proffer Melinda advanced $89,250 402 S. Kingshighway money to the Cape Girardeau, MO 63703 business from her divorce settlement to keep the business afloat Melinda has not $15,778 received her ordinary monthly income since September 29, 2007 Roscoe H. Shanks Newbern & Proffer $58,000 P.O. Box 73 borrowed money Marble Hill, MO 63764 against his home with Alliance Bank Roscoe has made $25,000 loans to the business from time to time and pays operating expenses on a regular basis to keep the business operating Roscoe's weekly $15,778 wages from September 29, 2007 through the present Internal Revenue Service Withholding taxes $20,000 Auto Zone Auto parts $3,918 purchases V.S.I. $2,300 O'Reily's Auto Parts $2,000 A.D.P. $1,195 Campus $784 Fishers $775 Illinois Deparment of Revenue $636 ATARI INC: Dec. 31 Balance Sheet Upside-Down by $16.8 Million ------------------------------------------------------------- Atari Inc. disclosed Tuesday results for the third quarter of fiscal 2008 ended Dec. 31, 2007. At Dec. 31, 2007, the company's consolidated balance sheet showed $43.5 million in total assets and $60.3 million in total liabilities, resulting in a $16.8 million total stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $34.9 million in total current assets available to pay $45.2 million in total current liabilities. Net loss for the third quarter ended Dec. 31, 2007, was $348,000, compared to net loss of $644,000 in the year-earlier period. Without restructuring charges of $3.7 million, the loss for the third quarter ended Dec. 31, 2007 would have been income of $3.4 million. Net revenue for the third quarter ended Dec. 31, 2007, was $41.1 million versus $47.3 million in the comparable year-earlier period. Publishing net revenue was $35.2 million, versus $46.0 million in the prior year, while distribution revenue was $5.9 million, versus $1.3 million in the comparable year-earlier period. Net revenue for the nine months ended Dec. 31, 2007, was $64.8 million versus $95.3 million in the comparable year-earlier period. Publishing net revenue was $56.2 million, versus $78.8 million in the prior year's nine month period, while distribution revenue was $8.6 million, versus $16.5 million in the comparable year-earlier period. Net loss for the nine months ended Dec. 31, 2007, was $20.0 million, compared to net loss of $8.0 million in the year- earlier period. 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?280b Going Concern Doubt New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. As of Dec. 31, 2007, and through Feb. 12, 2008, Atari Inc. was in violation of its financial covenants. BlueBay High Yield Investments (Luxembourg) S.A.R.L., Atari Inc.'s lender and a majority shareholder of Infogrames Entertainment S.A., has not waived this violation and has entered into a forbearance agreement with Atari Inc. which states that BlueBay will not exercise its rights on its facility until the earlier of (i) March 3, 2008, (ii) additional covenant defaults except for the ones existing as of Feb. 12, 2008, or (iii) if any action transpires which is viewed to be adverse to the position of the lender. About Atari Inc. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -- http://www.atari.com/-- publishes and distributes interactive entertainment software in the U.S. The company's 1,000+ published titles distributed by the company include hard-core, genre- defining franchises such as Test Drive(R); and mass-market and children's franchises such Dragon Ball Z(R). Atari Inc. is a majority-owned subsidiary of France- based Infogrames Entertainment SA, an interactive games publisher in Europe. BALLY TECH: Earns $24.4 Million in Quarter Ended December 31 ------------------------------------------------------------ Bally Technologies Inc. disclosed results for the three months and six months ended Dec. 31, 2007. "We are very pleased to report record quarterly results for our second quarter," said Chief Executive Officer, Richard M. Haddril. "Our great game performance and continued system success is reflected in record quarterly revenues in each of our game sales, gaming operations and systems businesses." Second Quarter Fiscal 2008 Highlights Three Months Ended Dec. 31, 2007 Vs. Three Months Ended Dec. 31, 2006 -- Total revenues increased 53% to $230.7 million as compared with $150.9 million in the same period last year. -- Operating income increased by $41.1 million to $46.8 million, as compared with $5.7 million in the same period last year; operating margin was 20% in the three months ended Dec. 31, 2007. -- Net income increased by $26.9 million to $24.4 million, as compared with a loss of $2.5 million in the same period last year, primarily as a result of improved margin and cost leverage. -- Adjusted EBITDA was $63.9 million, a 172% increase as compared with the same period last year. -- Selling, general and administrative expenses declined to 26% of total revenue from 33% as compared with the same period last year. Six Months Ended Dec. 2007, Vs. Six Months Ended Dec. 2006 -- Total revenues increased 38% to $419.7 million as compared with $304.7 million in the same period last year. -- Operating income increased by $74 million to $88 million, as compared with $14 million in the same period last year; operating margin was 21% in the six months ended Dec. 31, 2007. -- Net income increased by $48.4 million to $45.7 million, as compared with a loss of US$2.7 million in the same period last year, primarily as a result of improved margin and cost leverage. -- Adjusted EBITDA was $122.4 million, a 146% increase as compared with the same period last year. -- Selling, general and administrative expenses declined to 27% of total revenue from 33% as compared with the same period last year. "We are again pleased with our operating leverage this quarter," said Chief Financial Officer, Robert C. Caller. "Our SG&A in the current quarter compared with the September 2007 quarter increased by US$8.7 million primarily due to higher professional and accounting fees, Global Gaming Expo trade-show expenses, and commission and bad-debt expenses associated with higher revenue. However, as a% of revenue, SG&A decreased to 26% from 28% in the September 2007 quarter." Fiscal 2008 Business Update The company expects revenues in fiscal 2008 to exceed $875 million with continued year-over-year growth in each of game sales, gaming operations and system revenues. The company continues to forecast an increase in the placement of premium daily-fee games and an increase in the number of gaming devices sold, and also expects margins on game sales and operations to continue to improve in fiscal 2008 as compared with fiscal 2007. The company also continues to expect its selling, general and administrative expenses as average of revenue to be lower in fiscal 2008 as compared with fiscal 2007. The company expects its effective tax rate for fiscal 2008 will be between 37% and 38%. The company has provided this broad range of earnings guidance to give investors general information on the overall direction of its business. The guidance provided is subject to numerous uncertainties, including, among others, overall economic conditions, the market for gaming devices and systems, competitive product introductions, complex revenue recognition rules related to the company's business, and assumptions about the company's new product introductions and regulatory approvals. The company may update this fiscal 2008 guidance from time to time as the year progresses. Headquartered in Las Vegas, Nevada, Bally Technologies Inc. (NYSE:BYI) - http://www.ballytech.com/-- is engaged in the design, manufacture, assembly and distribution of technology based products to commercial gaming markets. The company's business consists of two business units: the Bally Gaming and Systems business unit and the Rainbow Casino (Rainbow) business unit. The Bally Gaming and Systems unit consists of three primary sub- groups: Gaming Equipment, which includes the sale of gaming devices; Gaming Operations, which includes the rent and lease of gaming devices, and Systems, which includes the sale and support of gaming systems. It also owns and operates the Rainbow Casino in Vicksburg, Mississippi. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings upgraded Bally Technologies' Issuer Default Rating and senior secured bank debt ratings as: IDR to 'B' from 'B-' and Secured bank credit facilities to 'BB/RR1' from 'B/RR3'. BARNHILL'S BUFFET: Court Okays MGLAW PLLC as Committee's Counsel ---------------------------------------------------------------- The United States Bankruptcy Court for the Middle District of Tennessee gave the Official Committee of Unsecured Creditors of Barnhill's Buffet Inc.'s cases permission to retain MGLAW PLLC as its counsel. The Creditors' Committee members are: -- The Lamar Companies; -- Performance Food Group; and -- Top Choice Poultry Inc. MGLAW is expected to: a) render legal advice with respect to the rights, powers and duties of the Committee; b) assist and advise the Committee in its consultation with the Debtor relative to the administration of this Chapter 11 case; c) investigate the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtor's business and any other matter relevant to the case or to the formulation of a plan of reorganization, and the preparation of any disclosure statement or other pleadings filed in this case; d) assist the Committee in the review, analysis and negotiation of any financing or sale agreements; e) take all necessary actions to protect and preserve the interests of the Committee, including the prosecution of actions on its behalf, negotiations concerning all litigation in which the Debtor is involved, and review and analysis of all claims filed against the Debtor's estate; f) assist the Committee in requesting the appointment of a trustee or examiner, should such action become necessary; g) represent the Committee in any forum as may be necessary to protect the interests of the Committee, including preparation of any necessary pleadings or other documents related thereto; h) attend meetings and negotiate with representatives of the Debtor and representatives of other parties in this Chapter 11 case; i) facilitate filings and other activities in Nashville, and to advise the Committee regarding the practices and procedures of this Court; and j) perform all other legal services that may be necessary and appropriate in the interest of the Committee. The firm's professionals and their compensation rates are: Designation Hourly Rate ----------- ----------- Members $265-$375 Associates $155-$245 Paralegals $125 To the best of the Committee's knowledge the firm does not hold any interest adverse to the Debtor's estate and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Barnhill's Buffet Madison, Tennessee-based Barnhill's Buffet Inc., aka Barnhill's Buffet of Tennessee Inc., -- http://www.barnhills.com/-- operates a chain of restaurants, a total of 29 stores located in six states. Its parent company is Dynamic Acquisition Group LLC. It filed for chapter 11 bankruptcy on Dec. 3, 2007 (Bankr. M.D. Tenn. Case No. 07-08948) after it continued to suffer operating losses. William Caldwell Hancock, Esq., at The Hancock Law Firm represents the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in this case. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $50 million. BEAR STEARNS: Investigation Focuses on Conference Call "Fraud" -------------------------------------------------------------- Investigators are now looking into the possibility of "fraud" allegedly committed by some of Bear Stearns Cos. Inc.'s managers in a certain investor conference call, Kate Kelly at The Wall Street Journal reports, citing sources who know about the issue. Prosecutors from the New York Attorney General's office are primarily looking into Ralph Cioffi, a fund manager at Bear Stearns. The probe alleges that Mr. Cioffi defrauded investors by presenting a well-performing image of the company in contrast with the reality of the company's troubled funds, WSJ relates. Mr. Cioffi, according to these sources, said he was "optimistic", albeit cautiously, about the company's ability in hedging its subprime securities, during a conference call with investors. However, internal E-mail messages reveal the doubtfulness among Mr. Cioffi and his colleagues concerning the deterioration of securities and its effect on their funds, says WSJ, citing these sources familiar with the matter. Additionally, these people say, Mr. Cioffi transferred his personal funds of around $2 million from the company's troubled funds to a stable one. As reported in the Troubled Company Reporter on Dec. 17, 2007, New York Attorney General Andrew Cuomo sent subpoenas to Bear Stearns, Merrill Lynch & Co., and Deutsche Bank AG, seeking information related to the packaging and selling of debt tied to "high-risk mortgages". The investigation examines how investment banks adequately reviewed the quality of mortgages before packaging them into products that were then sold to investors. The subpoenas also asked information about how the debt was pooled into securities, including the investment firms' relationship with credit-rating firms. Mr. Cuomo stated last October that he had subpoenaed the investment banks in relation to his probe into the United States mortgage loan market. Mr. Cioffi and others, however, have not been compelled by a federal court to give private testimony to a jury, WSJ reports. Two of Bear Stearns Cos.' units, Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund, Ltd., are undergoing winding up proceedings in the Cayman Islands. The Cayman Island hedge funds invested in collateralized debt obligations related to U.S. subprime mortgage loans. About Bear Stearns Companies New York-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BLUE WATER: Seeks Permission to Hire Foley & Lardner as Counsel --------------------------------------------------------------- Blue Water Automotive Systems, Inc. and its debtor-affiliates seek permission from the United States Bankruptcy Court for the Eastern District of Michigan to employ Foley & Lardner, LLP, as their bankruptcy counsel. The Debtors relate that prior to their bankruptcy filing, Foley & Lardner rendered to them legal services in matters related to general corporate, commercial, financing, supplier and customer, employment, and litigation. As a result of that prepetition engagement, the Debtors believe that Foley & Lardner has become intimately familiar and knowledgeable with their industry, business operations, finances, trade and customer relationships and restructuring options and strategy. The Debtors add that Foley & Lardner's accumulated knowledge of their affairs, finances and restructuring options will be crucial to the success of their reorganization. As the Debtors' bankruptcy counsel, Foley & Lardner will: (a) analyze the Debtors' current financial and legal situation; (b) prepare and file, on behalf of the Debtors, all necessary and appropriate petitions, applications, motions, pleadings, draft orders, notices and other documents, including their amendments, and reviewing all financial and other reports to be filed in their Chapter 11 cases; (c) advise the Debtors concerning their powers and duties as debtors-in-possession in the continued operation of their businesses and management of their property; (d) advise the Debtors concerning, and assist in the negotiation and documentation of, financing agreements, debt restructurings, cash collateral arrangements and related transactions; (e) advise the Debtors with regard to their relationships with secured and unsecured creditors and equity security holders, past, present and future, negotiating with those creditors and security holders, and their representatives and legal counsel, as necessary, and taking legal actions as may be necessary or advisable in the best interests of the Debtors; (f) review the nature and validity of liens asserted against the property of the Debtors and advise the Debtors concerning the enforceability of those liens; (g) negotiate and assist in the drafting and preparation of leases, security instruments, and other contracts as may be in the best interests of the Debtors; (h) represent the Debtors at the meeting of creditors, confirmation hearing, and other hearings as may occur; (i) advise the Debtors concerning the actions that it might take to collect and to recover property for the benefit of the Debtors' estates; (j) assist and counsel the Debtors in connection with the formulation, negotiation, preparation, acceptance, confirmation, and implementation of a plan of reorganization in their Chapter 11 proceedings; (k) prepare, on behalf of the Debtors, a disclosure statement, and assist the Debtors in soliciting acceptances of a reorganization plan; (l) advise the Debtors concerning, and preparing responses to, applications, motions, pleadings, notices, and other papers that may be filed and served in their Chapter 11 cases; (m) represent the Debtors in adversary proceedings and other contested matters; and (n) perform all other legal services for or on behalf of the Debtors that may be necessary in the administration of their Chapter 11 cases and the reorganization of their businesses, including advising and assisting with respect to debt restructurings, stock or asset dispositions, claims analysis and disputes, and legal issues involving general corporate, bankruptcy, labor, employee benefits, tax, finance, real estate, and litigation matters, and utilizing paraprofessionals, law clerks, associates, and partners of the firm of Foley & Lardner LLP as may be economical under the circumstances. The Debtors will pay Foley & Lardner according to the firm's customary hourly rates and will reimburse the firm for any necessary out-of-pocket expenses. The Debtors expect six Foley & Lardner professionals to take primary responsibility in providing legal services to them: Professional Position Hourly Rate ------------ -------- ----------- Judy O'Neill, Esq. Partner $635 Frank DiCastri, Esq. Partner $495 John Simon, Esq. Senior Counsel $495 Derek Wright, Esq. Senior Counsel $475 Joanne Lee, Esq. Associate $395 Veronica Crabtree Paralegal $180 Frank W. DiCastri, Esq., a partner at Foley & Lardner, tells the Court that the Debtors paid his firm a $100,000 retainer, which was applied as payment for services rendered and disbursements incurred in connection with preparation for filing the Debtors' Chapter 11 petitions and related documentations. Of the $100,000 Retainer, about $883 was not applied to the firm's fees with respect to the Chapter 11 filing due to the lag time between the capture of reported time and the application of the retainer. Mr. DiCastri states that as a result of the urgent need to file the petitions and the lag time between the reporting of time and expenses, Foley & Lardner incurred $37,078 in fees and expenses in connection with preparing the bankruptcy filing and the restructuring through February 11, 2008. Mr. DiCastri also relates that Foley & Lardner has conducted an investigation of its client database to determine whether it represents any interest that conflict with that of the Debtors. Upon review, Mr. DiCastri assures the Court that his firm does not represent any interest adverse to the Debtors and their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Foley & Lardner though currently represents Visteon Corp., Automotive Component Holdings, Behr, AON, Metzeler, Cooper- Standard, LaSalle Bank, and KPS Special Situations Fund I, L.P., in matters wholly unrelated to the Debtors or their Chapter 11 cases, Mr. Di Castri discloses. Foley & Lardner states that it has obtained and will seek to obtain conflict waivers from those clients who are customers and secured lenders of the Debtors or where otherwise required by the rules of professional responsibility. Mr. DiCastri further discloses that Foley & Lardner has provided, or may provide, services for certain of the Debtors' subsidiaries and affiliates, some of which are creditors of certain Debtors, as a result of intercompany loans or transactions. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately $200 million. The company's headquarters and technology center is located in Marysville, Mich. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection February 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. (Blue Water Automotive Bankruptcy News Issue No. 3, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BLUE WATER: Seeks Permission to Hire Administar as Notice Agent --------------------------------------------------------------- Blue Water Automotive Systems, Inc. and its debtor-affiliates currently have thousands of entities or persons to which notice must be given for various purposes. In light of this, the Debtors determine that they require the services of an outside claims and noticing agent in their Chapter 11 cases. In addition, the noticing, receiving, docketing, and maintaining proofs of claim would impose heavy administrative and other burdens on the Court and the Office of the Clerk of the U.S. Bankruptcy Court for the Eastern District of Michigan, relates Judy A. O'Neill, Esq., at Foley & Lardner, L.L.P., in Detroit, Michigan, the Debtors' proposed counsel. Ms. O'Neill avers that preparing and serving the notices to all of the Debtors' creditors and parties-in-interest and docketing and maintaining the large number of proofs of claim that may be filed in their bankruptcy cases would also strain the resources of the Clerk's Office. Accordingly, the Debtors seek the Court's authority to employ Administar Services Group LLC, as their claims, noticing, and balloting agent. Administar Services is a firm that specializes in providing data processing services to Chapter 11 debtors in connection with administration and reconciliation of claims, as well as administration of plan balloting. The Debtors maintain that Administar is well qualified to provide them services because of the firm's experience in providing claims, noticing, and balloting services in many other chapter 11 cases in various jurisdictions. As the Debtors' claims, noticing and balloting agent, Administar Services will, among other things: (a) prepare and serve required notices in the Debtors' Chapter 11 cases, including: * notice of the commencement of the Debtors' Chapter 11 cases and the initial meeting of creditors pursuant to Section 341(a) of the Bankruptcy Code; * notice of the claims bar date, if any; * notice of objections to claims; * notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; and * other miscellaneous notices to any entities, as the Debtors' may deem necessary for an orderly administration of their Chapter 11 cases; (b) after the mailing of a particular notice, prepare for filing with the Court a certificate or affidavit of service that includes a copy of the notice involved, an alphabetical list of persons to whom the notice was mailed, and the date and manner of mailing; (c) assist the Debtors in preparing the Schedules of Assets and Liabilities and Statements of Financial Affairs; (d) receive and record proofs of claim and proofs of interest filed; (e) create and maintain official claims registers, with each proof of claim or proof of interest including, among other things, * the name and address of the claimant and any agent for that claimant, if the proof of claim or proof of interest was filed by an agent, and the entity or entities against which that claim was filed; * the date received and the claim number assigned; * the asserted amount and classification of the claim; * implement necessary security measures to ensure the completeness and integrity of the claims registers; and * transmit to the Clerk's Office a copy of the claims registers upon request and at agreed upon intervals; (f) perform balloting services in the Debtors' Chapter 11 cases, including: * print ballots including the printing of color-coded, creditor- and shareholder-specific ballots; * prepare voting reports by plan class, creditor or shareholder and amount for review and approval by the the Debtors and their counsel; * coordinate mailing of ballots, disclosure statement and plan of reorganization or other appropriate materials to all voting and non-voting parties and provide affidavit of service; * establish a telephone contact number to receive questions regarding voting on the plan; and * receive and tabulate ballots, inspect ballots for conformity to voting procedures, date stamp and number ballots consecutively, provide computerized balloting database services and certify the tabulation results; (g) maintain an up-to-date mailing list for all entities that have filed a proof of claim or proof of interest, in which the list will be available upon request of a party-in- interest or the Clerk's Office; (h) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours; (i) record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and provide notice of those transfers as required by Bankruptcy Rule 3001(e); (j) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders and other requirements; (k) assist the Debtors and provide temporary employees to process, reconcile and resolve claims, as necessary; (l) comply with other conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and (m) perform other administrative and support services related to noticing, claims, docketing, solicitation and distribution as the Debtors may request and which Administar Services may agree to perform, including providing administrative support services with respect to the Debtors' information assembly and dissemination and distribution functions. The Debtors will compensate and reimburse Administar Services for services rendered and expenses incurred in connection with their Chapter 11 cases pursuant to the terms and conditions of a Services Agreement between the parties dated February 11, 2008. Administar Services' hourly rates for its professionals are: Professional Hourly Rate ------------ ----------- Vice President/Senior Vice President $150 to $185 Bankruptcy Consultant $90 to $150 /Senior Bankruptcy Consultant Bankruptcy Analyst/Senior Analyst $55 to $85 Administrative/Operations $25 to $45 /Call Center Attendant Jeffrey L. Pirrung, senior vice president of Administar Services, assures 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. He maintains taht Administar Services is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately $200 million. The company's headquarters and technology center is located in Marysville, Mich. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection February 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. (Blue Water Automotive Bankruptcy News Issue No. 2, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BRAIN MATTERS: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Brain Matters, Inc. 3773 Cherry Creek Drive North, Suite 615E Denver, CO 80209 Bankruptcy Case No.: 08-11721 Type of Business: The Debtor offers brain SPECT imaging. Chapter 11 Petition Date: February 15, 2008 Court: District of Colorado (Denver) Judge: Howard R. Tallman Debtors' Counsel: Lee M. Kutner, Esq. (lmk@kutnerlaw.com) 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 http://www.kutnerlaw.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million Consolidated Debtor's List of 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John F. Shega, M.D. $352,931 Defined Benefit Plan 2710 Health San Diego, CA 92123 Dianna Keeler $336,902 10682 Sperry Street Northglenn, CO 80234 Bishop's $324,175 Mad River Holdings $319,250 Blank Rome LLP $272,040 Tyler Belnap $255,753 Vanguard Strategies $214,739 Pacific Gateway/LA $192,063 Pamela Levine, LLC $158,204 MerriBeth Adams $155,824 CIT Technology Financial Services $139,645 E Clinical $130,885 Line of Business Technologies $102,655 Single Bond Holdings $83,637 BUCYRUS INT'L: Earns $61.9 Mil. for 2007 Fourth Qtr. Ended Dec.31 ----------------------------------------------------------------- Bucyrus International Inc. reported net earnings for the fourth quarter of 2007 at $61.9 million, compared with $17.5 million for the fourth quarter of 2006. Net earnings for the year ended Dec. 31, 2007 were $136.1 million compared with $70.3 million for the year ended Dec. 31, 2006. Net earnings were reduced by amortization of purchase accounting adjustments related to the acquisition of DBT GmbH on May 4, 2007. Total sales for the quarter ended Dec. 31, 2007 are $547.9 million, compared with the total sales during the same quarter of 2006 at $205.6 million. For 2007 fiscal year, sales were $1.6 billion, in comparison to the total sales in fiscal 2006 at $0.7 billion. As of Dec. 31, 2007, the company's balance sheet showed total assets of $2.1 billion, total liabilities of $1.3 billion resulting to common stockholder's investment of $0.8 billion. The overall increase in surface mining sales reflected the ongoing global demand for Bucyrus' products and services, which continues to be driven by the sustained strength in markets for commodities mined by Bucyrus machines. Capacity constraints continue to have an impact on surface mining sales, and the ongoing expansion of Bucyrus' South Milwaukee facilities is expected to be completed by the end of the first quarter of 2008. Gross profit for the fourth quarter of 2007 was $136.3 million compared with $51.1 million for the fourth quarter of 2006. Gross profit for the year ended Dec. 31, 2007 was $408.3 million compared with $186.8 million for the year ended Dec. 31, 2006. Gross profit for the fourth quarter and year ended Dec. 31, 2007 was reduced by $7.1 million and $22.2 million, respectively, of amortization of purchase accounting adjustments as a result of the acquisition of DBT, which had the effect of reducing the gross profit percentage for the fourth quarter and year ended Dec. 31, 2007 by 1.3% and 1.4%, respectively. The increases in gross profit were primarily due to the acquisition of DBT and increased surface mining sales, as well as improved gross margins on both surface mining original equipment and aftermarket parts and services. Gross profit on underground mining equipment was down slightly for the fourth quarter of 2007 partially as a result of increased manufacturing absorption losses. Selling, general and administrative expenses for the fourth quarter of 2007 were $67.0 million compared with $20.9 million for the fourth quarter of 2006. Selling, general and administrative expenses for the year ended Dec. 31, 2007 were $185.6 million compared with $73.0 million for the year ended Dec. 31, 2006. Operating earnings for underground mining operations were reduced by purchase accounting adjustments related to the acquisition of DBT of $18.3 million and $49.1 million for the fourth quarter and year ended Dec. 31, 2007, respectively. Interest expense for the fourth quarter of 2007 was $9.6 million compared with $1.6 million for the fourth quarter of 2006. Interest expense for the year ended Dec. 31, 2007 was $27.7 million compared with $3.7 million for the year ended Dec. 31, 2006. Income tax benefit for the fourth quarter of 2007 was $22.6 million compared with expense of $7.0 million for the fourth quarter of 2006. Income tax expense for the year ended Dec. 31, 2007 was $10.4 million compared with $26.9 million for the year ended Dec. 31, 2006. The effective tax rate for the fourth quarter was impacted by significant one-time benefits related to the underground mining operations. These include a $12.2 million deferred tax benefit resulting from a reduction in the German statutory tax rate and a $14.0 million foreign tax credit benefit resulting from repatriation of German earnings. Earnings in lower taxed jurisdictions resulted in $4.7 million of benefits and various other items resulted in an additional $4.7 million of benefits. About Bucyrus International Headquartered in South Milwaukee, Wisconsin, Bucyrus International Inc. (Nasdaq: BUCY) -- http://www.bucyrus.com/-- is a global manufacturer of electric mining shovels, walking draglines and rotary blasthole drills and provides aftermarket replacement parts and services for these machines. In 2006, it had sales of $738 million. * * * Moody's Investor Service placed the company's long-term corporate family rating at 'Ba3' in April 2007. The rating still holds to date with a stable outlook. BUFFETS HOLDINGS: Court Approves Sale of Four Properties ------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware issued an order authorizing Buffets Holdings Inc. and its debtor- affiliates to sell certain properties, along with the Debtors' rights, title and interest, free and clear of encumbrances, pursuant sale contracts with different purchasers. Before the Petition Date, the Debtors determined that some of their restaurants were not performing adequately and should be closed and the underlying properties sold. Accordingly, the Debtors retained Huntley Mullaney Spargo & Sullivan LLC to develop a marketing plan for the Properties. After coordinating with local estate brokers, Huntley Mullaney's efforts resulted in the Debtors executing purchase agreements for each of the Properties before the Petition Date. The Properties and their purchasers are: Property Price Purchaser -------- ----- --------- 6633 West Kellogg Drive $990,000 Meridian Investments Wichita, Kansas LLC 1207 South Main Street 2,000,000 Andy Yang, Wan B. Sikeston, Missouri Liu, Yong Eric Wang 2623 Wards Road 1,000,000 Lucky Property LLC Lynchburg, Virginia 40 Cavalier Blvd. 995,000 Value Place Real Florence, Kentucky. Estate Services LLC The Debtors' counsel, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, explains that the Properties were marketed by skilled brokers; are not core components of the Debtors' long-range business strategy; and are an economic burden. "The elimination of liabilities associated with the Properties, in addition to the value to be realized by the estates through the sale of the Properties, is beneficial to the Debtors, estates, and creditors," Ms. Morgan says. Ms. Morgan also contends that an auction is not necessary because it would be costly and impractical given the value to be received. "The proposed sales involve Buyers that are ready, willing and able to close," Ms. Morgan argues. Ms. Morgan notes that the Properties are clear of all liens; satisfies Section 363(f) of the Bankruptcy Code; and are being sold in "good faith" under Section 363(m). Additionally, the Debtors seek authorization from the Court to pay the local brokers their commissions aggregating $209,500. Ms. Morgan maintains that the Local Brokers' fee commissions are well within the range customarily found in similar real estate transactions. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. (Buffets Holdings Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BUFFETS HOLDINGS: Court OKs Miscellaneous Asset Sale Procedures --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware established procedures for the sale of certain miscellaneous assets of Buffets Holdings Inc. and its debtor-affiliates outside the ordinary course of business, free and clear of all liens pursuant to Section 363 of the Bankruptcy Code. In the ordinary course of the Debtors' business, the Debtors accumulated assets like restaurant equipment, tables, chairs, cabinets, and fixtures that the Debtors no longer use or need and are located in restaurant locations that the Debtors have closed or desire to close during the pendency of their Chapter 11 cases. According to the Debtors' counsel, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, most of the assets are obsolete and have been replaced by new equipment. Thus, the Debtors seek to sell the Assets to reduce costs, free up space in their facilities, and raise funds for the estates. The Debtors determined that the prompt sale of the Assets without individual Court approval will be in the best interest of their creditors and the estate, Ms. Morgan says. She adds that establishing procedures for the sale of the Assets enable the Debtors to maximize the Assets' potential recovery. Ms. Morgan notes that the Assets have a relatively modest aggregate value and establishing procedures for the sale of Assets below a certain threshold of value will conserve the Debtors' and Court's resources by avoiding serial motions to approve relatively small sales. In connection with the sale of the Assets, the Debtors propose to sell the Assets on a per-location basis and does not exceed $150,000, unless the sale is to an insider. If the sale consideration from a purchaser exceeds $150,000 but is less than $250,000, or if the sale is to an insider for an amount less than $250,000, the Debtors will provide written notice to: (a) the U.S. Trustee; (b) the proposed counsel to the Official Committee of Unsecured Creditors; (c) counsel to the administrative agent for the Debtors' postpetition lenders; and (d) any party having a known interest in the Assets to be sold. The Notice Parties will then have five business days to object to any proposed sale. If there are no objections, the Debtors may consummate the sale. If an objection is timely made, the Debtors will not proceed with the sale unless (i) the objection is withdrawn or resolved; or (ii) the Court approves the sale by order with not less than five days notice to the objecting party. After any sale of the Assets, the Debtors will file a report of the sale in accordance with Rule 6004(f)(1) of the Federal Rules of Bankruptcy Procedure. Ms. Morgan tells the Court that the Debtors' proposed sale of the Assets is in "good faith" and that no insider will gain an unfair advantage from any proposed sale since full disclosure will be made with respect to any insider sales. Moreover, the Debtors will provide the Notice Parties with a reasonable opportunity to review the adequacy of the price if sales exceed $150,000, but less than $250,000. Additionally, Ms. Morgan tells the Court that the proposed disposition of the Assets should be approved "free and clear" of any liens or claims, since the requirements of Section 363(f) are met because any liens will attach to the proceeds of the sale. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. (Buffets Holdings Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000) BUFFETS HOLDINGS: Committee Taps Otterbourg Steindler as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Buffets Holdings In