T R O U B L E D C O M P A N Y R E P O R T E R Monday, February 25, 2008, Vol. 12, No. 47 Headlines ABITIBIBOWATER INC: Mounting Pressures Cue Fitch to Junk Ratings AEGIS MORTGAGE: Equity Title Contests Wells Fargo's Dismissal Plea AINSWORTH HOMES: Case Summary & Two Largest Unsecured Creditors AINSWORTH LUMBER: Exchange Offer Spurs Moody's Rating Cut to 'Ca' AMAC CDO: Fitch Holds 'BB' Rating on $12 Million Class F Notes AMBAC FINANCIAL: $3 Billion Rescue Deal Draws Near AMERICAN CASINO: S&P Withdraws 'B+' Rating After Note Redemption AMERICAN DENTAL: Amends $175MM Credit Facilities to Waive Defaults ARVINMERITOR INC: DBRS Confirms 'BB(low)' Ratings on Unsec. Notes ATLANTIC WINE: Posts $197T Net Loss in 3rd Qtr. Ended Dec. 31 AURIGA LABS: Obtains $750,000 Secured Loan from Prospector Capital BALLY TOTAL: Latham & Watkins Withdraws as Bankruptcy Counsel BASTILLE DEVELOPMENT: Voluntary Chapter 11 Case Summary BEAR STEARNS: Fitch Junks Ratings on Ten Certificate Classes BELLINGHAM SHOPPING: Voluntary Chapter 11 Case Summary BLUE WATER: Gets Court Permission to Use Cash Collateral BLUE WATER: Wants Deadline to File Schedules Moved to March 28 BLUE WATER: Creditors Panel Wants to Hire Schafer as Counsel CENTRAL GARDEN: S&P Holds 'B' Rating on Improved Covenant Cushion CENTRO NP: Signs Agreement Extending $350 Million Credit Facility CHC HELICOPTER: Inks CN$3.7 Bil. Merger Deal With First Reserve CHC HELICOPTER: Moody's Reviews Ba3 Rating For Likely Downgrade CHC HELICOPTER: S&P Assigns 'BB-' Rating on Developing CreditWatch CHINA AOXING: Posts $1.1M Net Loss in 2nd Qtr. Ended Dec. 31 CKE RESTAURANTS: Moody's Keeps All Ratings; Assigns Neg Outlook COGNIGEN NETWORKS: Dec. 31 Balance Sheet Upside-Down by $638T COLUMBIA AIRCRAFT: Files Disclosure Statement in Oregon Court COLUMBIA AIRCRAFT: Disclosure Statement Hearing Set For March 18 CONSOL ENERGY: DBRS Confirms 'BB' Rating with Stable Trend CROSS ATLANTIC: Bankruptcy Won't Affect Tamarack's Operations DANA CORPORATION: Inks $2,080,000,000 Exit Facility Agreements DAVE & BUSTER'S: Explores Possible Sale; Decides to Cut Debt DAVE & BUSTER'S: S&P Ratings Unmoved by Jefferies & Co. Retention DELTA AIR: Earns $1,600,000 in Full-Year Ended December 31 DELTA AIR: Awards Workers with $158,000,000 for Profit-Sharing DELTA AIR: FMR LLC and Lord Abbett Declare Stake Ownership FCDC COAL: Petitioners Wants Chapter 11 Trustee Appointed DISTRIBUTED ENERGY: Transfer to Nasdaq Capital Market Approved ELECTRO-CHEMICAL: Case Summary & 20 Largest Unsecured Creditors ENERGY PARTNERS: Inks Plea Agreement with DOJ; Pays $100,000 Fine EPICOR SOFTWARE: Moody's Withdraws All Ratings EVRAZ GROUP: Delong Holdings Deal Cues Fitch to Hold 'BB' Ratings FALCON RIDGE: Dec. 31 Balance Sheet Upside-Down by $503T FINLAY FINE: Moody's Junks Corporate Rating on 94 Door Closings FORTUNOFF: Verstandig Wants Diamonds Excluded from Buyout GLOBAL MOTORSPORT: Committee Opposes $3.5 Million DIP Financing GLOBAL MOTORSPORT: Obtains $3.5 Million DIP Loan on Final Basis GLOBAL POWER: Moody's Assigns Low-B Ratings, Stable Outlook GMAC COMMERCIAL: Fitch Holds 'B-' Rating on $3.2MM Class N Certs. GMAC COMMERCIAL: Fitch Junks Ratings on $39.9 Million Loans GMAC LLC: Weak Operating Environment Cues S&P's Rating Downgrades GOLDEN PHOENIX: Case Summary & Seven Largest Unsecured Creditors GS MORTGAGE: Fitch Lowers Ratings on $398.9 Million Certificates HALLMARK MEAT: USDA Provides Briefing and Updates on Meat Recall HALLMARK MEAT: To Cease Operations Permanently After Meat Recall ICAHN ENTERPRISES: Completes Acquisition of Nevada Casinos IGNIS PETROLEUM: Dec. 31 Balance Sheet Upside-Down by $2.7M KINDER MORGAN: S&P Upgrades Rating on $10 Million Certs. to 'BB' KNIGHT INC: Offers to Pay $1.6BB for Portion of Debt Securities KOPPERS INC: S&P Lifts Rating on $320 Mil. Senior Notes at 'B+' KW MUTH: Gentex Says $2.55MM Settlement May Speed Up Ch. 11 Exit LAKE SHORE: CFTC Says Firm Misappropriated $11MM in Investments LB COMMERCIAL: Fitch Cuts Rating on Higher than Expected Losses LBREP/L SUNCAL: Moody's Withdraws Junk Ratings LONGBRANCH SALOON: Unpaid Rent Triggers Filing for Bankruptcy LONGSHORE CDO: Four Classes of Notes Acquire Moody's Junk Ratings MACKLOWE PROPERTIES: Obtains $330 Million Construction Loan MANCHESTER INC: Ch. 11 Trustee Appointment Hearing Set for Mar. 18 MBIA INC: Disagrees with AFGI on Outlook; Leaves Insurers' Group MBS MANAGEMENT: Unit Proposes to Pay Unsecured Claims in Full METRO COUNTRY: Fitch Withdraws 'B-' Rating on Sr. Secured Notes MGM MIRAGE: Earns $1.6 Billion in Year Ended December 31, 2007 MOBILE MINI: To Merge with Mobile Storage in $701.5 Million Deal MOBILE MINI: Moody's Puts 'Ba3' Rating on Review for Possible Cut MOBILE MINI: S&P Puts BB Rating on Neg. Watch on Mobile Mini Deal MOBILE STORAGE: Inks $701.5 Million Merger Deal with Mobile Mini MOBILE STORAGE: S&P Assigns 'B+' Rating on Positive CreditWatch NAVISTAR INT'L: S&P Removes 'BB-' Rating From CreditWatch Negative NEPTUNE INDUSTRIES: Dec. 31 Balance Sheet Upside-Down by $1.5 Mil. NEW CENTURY: Court to Hold Disclosure Statement Hearing March 5 NEW CENTURY: Can Hire IP Recovery to Sell Internet Domain Names NEW CENTURY: Barred by Court From Seeking IRS Tax Refund NEWTON RE: A.M. Best Assigns 'bb' Debt Rating to $150M Notes NORSTAR HOLDINGS: Case Summary & Five Largest Unsecured Creditors NOVA CHEMICALS: Fitch Affirms 'BB-' Issuer Default Rating OMAHA 2008: Moody's Assigns 'Ba2' Rating on $8.524M Certificates OPTION ONE: Fitch Downgrades Ratings on Ten Certificate Classes OTZER CAPITAL: Case Summary & 20 Largest Unsecured Creditors PACIFIC MARKETING: Case Summary & 20 Largest Unsecured Creditors PETROLEUM PRODUCTS: Case Summary & 20 Largest Unsecured Creditors PLASTECH ENGINEERED: Court Extends DIP Financing to February 27 PLASTECH ENGINEERED: Can Sell Inventory to Johnson Controls PLASTECH ENGINEERED: Wants Repudiating Vendor Protocol Implemented PRC LLC: Files Chapter 11 Plan of Reorganization PRC LLC: Wants to File Disclosure Statement by March 13 PRC LLC: Wants Court to Fix May 1 as General Claims Bar Date PRONTO 41ST: Files Voluntary Chapter 11 Case Summary QUEBECOR WORLD: Ernst & Young Submits Updates on CCAA Proceedings QUEBECOR WORLD: Loses $210 Million Rogers Deal to Transcontinental QUEBECOR WORLD: Suppliers Balk at Proposed Reclamation Procedures RESIDENTIAL CAPITAL: S&P Cuts Ratings on Continuing Challenges RG GLOBAL: Dec. 31 Balance Sheet Upside-Down by $1.09M RIVER OAKS: Involuntary Chapter 11 Case Summary ROBINDALE VILLAS: Voluntary Chapter 11 Case Summary SACO I: Weak Performance Cues S&P's Rating Cuts on Eight Classes SALOMON BROTHERS: Fitch Junks Rating on $5.9MM Class K Loans SALOMON BROTHERS: Fitch Holds Low-B Ratings on Six Cert. Classes SEAMLESS WI-FI: Posts $428T Net Loss in 2nd Qtr. Ended Dec. 31 SEARS HOLDINGS: Ex-Dell President and CEO Joins Board of Directors SIRVA INC: Asks Court to Extend Schedules Filing Deadline SOVEREIGN BANCORP: Names Kirk Walters as Chief Financial Officer STATS CHIPPAC: Seeks Shareholder Approval of Capital Reduction STRADA 315: Regions Bank's Refusal to $34.8MM Fund Cues Bankruptcy STRUCTURED ASSET: Fitch Chips Ratings on Nine Certificate Classes SUMMIT GLOBAL: Court Defers $5MM DIP Facility Hearing to March 4 SUMMIT GLOBAL: Court Vacates Ruling on Lowenstein's4 Employment TAMARACK RESORTS: Says Business Unaffected by Owners' Bankruptcies THOMPSON PRODUCTS: Case Summary & 20 Largest Unsecured Creditors TRW AUTOMOTIVE: Earns $56MM for 2007 Fourth Quarter Ended Dec. 31 UNITEDHEALTH GROUP: Board Okays Annual Dividend for Shareholders US CONCRETE: S&P Changes Outlook to Stable; Retains 'B+' Rating U.S. DRYCLEANING: Posts $1.9M Net Loss in Qtr. Ended Dec. 31 VALASSIS COMMS: Reports $20.6 Mil. Earnings For 2007 Fourth Qtr. VALLEJO CITY: Labor Union Accord Crucial to Averting Bankruptcy VICTORY MEMORIAL: Gets 2nd Bridge Order Extending Excl. Periods VPG INVESTMENTS: Bankruptcy Won't Affect Tamarack's Operations WABTEC CORP: To Buy Back $100,000,000 of Existing Shares WACHOVIA BANK: S&P Cuts Ratings on Six Classes to Low-B WELLMAN INC: Files for Chapter 11 Bankr. Protection in New York WELLMAN INC: Case Summary & 30 Largest Unsecured Creditors WESTLAND MEAT: USDA Provides Briefing and Updates on Meat Recall WESTLAND MEAT: To Cease Operations Permanently After Meat Recall WHITE MOUNTAINS: A.M. Best Holds 'bb' PS Rating on $250MM Shares WICKES FURNITURE: Auction of Assets Today at 9:00 A.M. WICKES FURNITURE: Taps McDonald Hopkins as Conflicts Counsel WICKES FURNITURE: Taps ADA LLC as Asset Disposition Advisor WILSON AUTO: Canada Court OKs Sale of Operations to BBB Industries YANCYJAZZ LLP: Files For Bankruptcy Over Lease Contract Dispute YRC WORLDWIDE: S&P Cuts Rating to BB on Refinancing Risk Concerns * S&P Downgrades 74 Tranches' Ratings From 12 Cash Flows and CDOs * Market Deal Flow for Low-grade Bonds Remain Tepid, S&P Says * Fitch Says Insurers' Exposure to Risky Collateral is Manageable * Credit Default Swap Market in for a Wild Ride as Economy Slows * BTS Releases December Passenger Airline Employment Data * Eight Bankruptcy Lawyers Join DLA Piper's Chicago Office * BOND PRICING: For the Week of Feb. 18 - Feb. 22, 2008 ********* ABITIBIBOWATER INC: Mounting Pressures Cue Fitch to Junk Ratings ---------------------------------------------------------------- Fitch Ratings downgraded AbitibiBowater Inc. and subsidiaries as: Abitibi-Consolidated Inc. -- IDR to 'CCC' from 'B-'; -- Senior unsecured debt to 'CCC/RR4 from 'B-/RR4'; -- Secured revolver to 'CCC+/RR3' from 'B/RR3'. Bowater Incorporated -- IDR to 'CCC' from 'B-'; -- Senior unsecured debt to 'CCC/RR4' from 'B-/RR4'; -- Secured revolver to 'B/RR1' from 'BB-/RR1'. Bowater Canadian Forest Products Inc. -- IDR to 'CCC' from 'B-'; -- Senior unsecured debt to 'B-/RR2' from 'B+/RR2; -- Secured revolver to 'B/RR1' from 'BB-/RR1'. All ratings have been placed on Rating Watch Negative. Fitch has also assigned a 'CCC' IDR to ABH. Behind the downgrades of ABY, BOW and BCFP are the mounting pressures that the ABH family of companies is facing in its centerpiece industry, newsprint, and in its lumber business. The decline in North American demand for newsprint, approaching 12% in 2007, continues to outpace ABH's capacity closures and curtailments, and there seems to be no foreseeable bottom to newsprint demand in the near future. The success that ABH and other industry members are having in raising newsprint and other paper grade prices will benefit operating margins and needed cash flow in quarters to come, as will the implementation of 'best practices' and further improvements in ABH's mill system. However, these efforts cannot compete with the long-term structural shift from printed to electronic media for advertising and entertainment and the loss of newsprint volumes and consequent cash flow. Also testing the limits of ABH's financial resources has been the very weak U.S. housing market, which has sent lumber prices to historical lows, and government export duties, which in concert with a weak U.S. dollar is draining ABH's cash resources at a critical time. Fitch believes alternate solutions for ABH's business mix would be costly and would likely put additional stress on the company's finances. Liquidity is becoming an increasing concern for ABY. The company's principal revolving credit agreement and accounts receivable securitization programs mature in the fourth quarter of 2008 (over $1.1 billion) in addition to earlier maturities of the company's 6.95% notes ($200 million in April 2008) and 5.25% notes ($150 million in June 2008). ABY also has to contend with an expiring waiver of a financial test in its bank agreement which by the end of the second quarter 2008. Fitch believes ABY's ability to refinance all or a portion of these obligations under presently tight credit market conditions would be difficult and is the key reason for the Rating Watch Negative. ABY and BOW combined produce around 5.7 million tonnes of newsprint per year as well as supercalendered and specialty papers, light-weight coated papers, pulp and lumber plus other wood products from some 32 pulp and paper mills and 35 sawmill and wood products facilities. Combined pro forma revenues from ABY and BOW last year totaled $7.7 billion. AEGIS MORTGAGE: Equity Title Contests Wells Fargo's Dismissal Plea ------------------------------------------------------------------ Equity Title of Nevada asks the U.S. Bankruptcy Court for the District of Delaware to deny Wells Fargo Bank, N.A.'s request to dismiss its declaratory judgment motion in its entirety. Michael G. Busenkell, Esq., at Eckert Seamans Cherin & Mellott, LLC, in Wilmington, Delaware, says that Equity Title's request for declaratory judgment should be allowed as property of the estate may involve Wells Fargo. "Wells Fargo argues that the complaint should be dismissed because it did not receive any money directly from Aegis Wholesale Corporation, only from Equity Title. However, if this transaction is determined to be void, the Court will have jurisdiction over Wells Fargo," Mr. Busenkell says. According to him, if the entire transaction is rescinded, Wells Fargo will be required to return the proceeds from the disbursement made by Equity Title to the Court for further disbursement. "The Court has the jurisdiction to enter an order invalidating the entire transaction, including the portion of the transaction involving Wells Fargo," Mr. Busenkell points out. "Therefore, the Court should not dismiss the complaint with respect to Wells Fargo or the disbursement made to Wells Fargo." Mr. Busenkell further says that rescission of the contract should also be allowed to proceed against Wells Fargo. "The argument that Equity Title is not a party to the real estate transaction and therefore does not have the ability to ask for rescission of the contract is disingenuous," Mr. Busenkell states. He points out that this also runs counter to the existing law and, since the real property is located in Nevada, the law governing rescission in that state will apply. According to Mr. Busenkell, the complexity of the transaction and the need to disgorge the respondents of their gains are enough reasons to grant the rescission. "If the transaction is allowed to go through as [Equity Title] wants, a number of state court and adversary proceedings are going to develop out of this one transaction," Mr. Busenkell points out. Mr. Busenkell relates that it will be necessary for Equity Title to file state court cases against both the seller to try to recover money paid. He adds that state court cases will also be filed against Wells Fargo and its co-defendant Community One Federal Credit Union, which is likely to lead to adversary proceedings being filed by Wells Fargo and Community One against the Debtor. "It is easier to rescind the transaction, put the parties back into the positions they were in before the transaction, then allow the parties to go through with a proper transaction with a mortgage that will be completely funded by a mortgage company that is able to fund a mortgage," Mr. Busenkell asserts. Mr. Busenkell further contends that Equity Title did not assume the risk in the transaction contrary to Wells Fargo's allegation, saying that Wells Fargo attempts to contort contract terms to meet its limited needs. "There is no evidence that Equity Title went into the transaction with only limited knowledge that was deemed by Equity Title to be sufficient. In reality, Equity Title had no knowledge, warning or any way to obtain the knowledge that the Debtor was about to file bankruptcy," Mr. Busenkell points out, adding that Equity Title would have never entered into the transaction if it had known that the check issued by the Debtor was going to be returned for non-sufficient funds. Equity Title Lawsuit Equity Title sued Aegis Wholesale Corporation in September 2007 to recover certain payments Equity Title made before the Debtors filed for bankruptcy. Equity Title acted as agent for a sale transaction between Bernard and Gloria Rubins, and Joseph and Evelyn Reyeses in Nevada. The Reyeses intended to buy from the Rubinses certain real estate property. Aegis Wholesale acted as lender in the transaction and established a $199,000 loan. The Debtor allegedly provided the Reyeses a check for $199,954 to fund the loan. At the time of the transaction, Wells Fargo Home Mortgage, Inc. and Community One Federal Credit Union maintained secured loans with respect to the property, which amount to $58,481 and $94,287. Pursuant to the transaction, a promissory note naming the Debtor as payee, and a Deed of Trust with the Debtor as beneficiary, were executed and recorded. On August 1, 2007, Equity Title deposited the funding check into its trust account so that it could disburse the funds. The loan was used to pay the balances with Wells Fargo and Community One, and to pay certain closing costs. The Rubinses were paid the balance of the funds, which amounts to $20,681. Equity Title said it wasn't aware at that time that the Debtor has ceased all mortgage activity, closed its business and terminated its employees. After Equity Title disbursed the loan as it was required to do under the transaction, the funding check was returned for insufficient funds. Prior to the bankruptcy filing, the funding check was dishonored by the Debtor's bank. Consequently, the Loan was never funded by the Debtor. The Debtor refused Equity Title's requests to fund the loan or acknowledge that it does not own the loan due to its failure to provide funding. Wells Fargo and Community One, Equity Title says, refused to return the amounts paid to them pursuant to the transaction despite their knowledge that the loan was not funded by the Debtor. Aegis Wholesale has argued that the loan is a property of its bankruptcy estate despite the fact that there was no consideration for the loan. In its complaint, Equity Title asked the Court to declare that the loan and its proceeds are not property of Aegis Wholesale's estate, and that the loan and the transaction are invalid because the Debtor failed to provide consideration for the loan. Bernard and Gloria Rubin's Statement Bernard and Gloria Rubin tell the Court that they have no interest or responsibility in the lawsuit filed by Equity Title. They assert that they retained the services of Equity Title to protect their interests in the transaction in good faith, and that they should not be named a a party to the lawsuit. About Aegis Mortgage Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan of reorganization expires on April 9, 2008. (Aegis Bankruptcy News, Issue No. 117 Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AINSWORTH HOMES: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ainsworth Homes LLC 625 Shadow View Drive South Hernando, MS 38632 Bankruptcy Case No.: 08-10673 Chapter 11 Petition Date: February 21, 2008 Court: Northern District of Mississippi (Aberdeen) Debtors' Counsel: Craig M. Geno, Esq. (cmgeno@harrisgeno.com) Harris Jernigan & Geno, PLLC P.O. Box 3380 Ridgeland, MS 39158-3380 Tel: (601) 427-0048 http://www.harrisgeno.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Consolidated Debtors' List of Two Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Todd Ainsworth $27,845 625 Shadow View Drive South Hernando, MS 38632 Capital One $6,737 P.O. Box 650010 Dallas, TX 75265 AINSWORTH LUMBER: Exchange Offer Spurs Moody's Rating Cut to 'Ca' ----------------------------------------------------------------- Moody's Investors Service downgraded Ainsworth Lumber Co. Ltd.'s corporate family rating to Ca from Caa1. The downgrade was prompted by the company's announcement of an exchange offer to replace its existing unsecured notes with new notes, an offer that Moody's considers to be occurring under distressed circumstances and at a significant discount to the face value of the existing notes. At the same time, the ratings on Ainsworth's senior unsecured notes were downgraded to Ca from Caa1 and the rating on the company's secured term loan was downgraded to Caa2 from B2. The downgrade also reflects the company's continued deteriorating financial performance, weakened credit protection metrics and weakened liquidity position. The severe downturn in new residential construction, the reduction in home repairs and remodeling activities, and the recent and anticipated oriented strand board capacity additions continue to create a low pricing environment for the company's principal products. The outlook is stable. Under the announced exchange offer, holders of existing notes with total principal value totaling $823.2 million may exchange their notes for new $596 million senior secured second lien notes due in 2014. The new notes have the ability to pay interest by issuing additional notes for up to 3 years and will be secured by a second priority lien on fixed assets and a third priority lien on the inventory and accounts receivable. The exchange offer is conditional upon holders of at least 50.1% of the existing notes tendering to the exchange offer as well as the majority of each of the existing note issues. The exchange offer will expire on March 14, 2008. The company has said that approximately 33% of the existing note holders have already agreed to the note exchange. Concurrent with the exchange offer the company expects to raise through a private placement an additional $50 million of senior secured first lien notes due 2014 to supplement its liquidity. Also in connection with the exchange offer, the company is also soliciting consents to remove substantially all of the restrictive covenants from the existing notes. While the additional liquidity, the extension of debt maturities and the ability to issue PIK notes are credit positives if the company is able to execute the note exchange, Moody's continues to believe that Ainsworth's large debt burden will remain difficult to sustain under the currently challenging industry conditions. OSB markets have been depressed since late 2006 as US housing starts are in the midst of one of their most precipitous declines. OSB pricing remains volatile and continues to drop below cash costs. Near term improvements in the OSB market are not expected as new OSB plants continue to come on-line and tighter home mortgage standards are further depressing housing starts. Ainsworth's cash flow generation is further challenged by the strong Canadian dollar. Although the company has significantly reduced capital expenditures and has taken other measures to preserve cash, the ongoing cash drain continues to deplete the company's liquidity. Downgrades: Issuer: Ainsworth Lumber Co. Ltd. -- Probability of Default Rating, Downgraded to Ca from Caa1 -- Corporate Family Rating, Downgraded to Ca from Caa1 -- Senior Secured Bank Credit Facility, Downgraded to Caa2 from B2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ca from Caa1 Upgrades: Issuer: Ainsworth Lumber Co. Ltd. -- Senior Secured Bank Credit Facility, Upgraded to 23 - LGD2 from 24 - LGD2 -- Senior Unsecured Regular Bond/Debenture, Upgraded to 55 - LGD4 from 56 - LGD4 Outlook Actions: Issuer: Ainsworth Lumber Co. Ltd. -- Outlook, Changed To Stable From Negative Moody's last rating action on Ainsworth was in November 2007 when the long term ratings were downgraded to Caa1 from B2. Ainsworth Lumber Co., Ltd., headquartered in Vancouver, British Columbia, Canada, is a publicly traded integrated producer of OSB and specialty overlaid plywood. AMAC CDO: Fitch Holds 'BB' Rating on $12 Million Class F Notes -------------------------------------------------------------- Fitch Ratings affirmed all classes of AMAC CDO Funding I as: -- $254,000,000 class A-1 floating-rate at 'AAA'; -- $50,000,000 class A-2 floating-rate at 'AAA'; -- $20,000,000 class B floating-rate at 'AA'; -- $15,000,000 class C floating-rate at 'A'; -- $12,000,000 class D-1 floating-rate at 'BBB'; -- $5,000,000 class D-2 fixed-rate at 'BBB'; -- $6,000,000 class E floating-rate at 'BBB-'; -- $12,000,000 class F fixed-rate at 'BB'. AMAC CDO I is a revolving commercial real estate cash flow collateralized debt obligation that closed on Nov. 16, 2006. It was incorporated to issue $400,000,000 of fixed-rate and floating- rate notes and preferred shares. As of the Jan. 17, 2008 trustee report and based on Fitch categorizations, the CDO was substantially as: commercial mortgage whole loans/A-notes (92.7%), B-notes (2.2%), CRE mezzanine loans (4.6%), and uninvested proceeds (0.5%). The portfolio is selected and monitored by Centerline REIT Inc. AMAC CDO I has a five-year reinvestment period during which, if all reinvestment criteria are satisfied, principal proceeds may be used to invest in substitute collateral. The reinvestment period ends in March 2012. Asset Manager: Centerline Capital Group, a subsidiary of Centerline Holding Company, is a real estate finance and investment company. In April 2007, CCG announced its name change from CharterMac, bringing all of its subsidiaries together to operate under one name. Through several major transactions, including the acquisition of ARCap REIT, Inc. in August 2006, CCG transformed from a company focused on affordable and multifamily housing to a full-service real estate finance and investment company. Centerline REIT Inc., the unit responsible for managing CCG's commercial real estate CDOs collateralized by CMBS collateral, recently assumed responsibilities for managing CCG's CDO transactions collateralized by commercial real estate loans. Performance Summary: As of the January 2008 trustee report, the as-is poolwide expected loss has increased slightly to 17.75% from 17.5% at the effective date. The CDO has a current reinvestment cushion to its PEL covenant of 4.875%. The main driver for the increase in the as-is PEL is a change in Fitch's view of the expected loss on one whole loan (5.0% of the pool). This loan is secured by a single- tenanted office building in Long Island, New York. The tenant is delinquent in its rent and tax payments. The increase in as-is PEL due to this loan is partially offset by the defeasance of one loan (0.5% of the pool) and the realization of sponsor business plans on several other loans. Although the cushion is below average for CREL CDOs, it is considered sufficient in this case due to the CDO's longer weighted average life of assets as well as its high concentration of more traditional asset types. As of the January 2008 trustee report, the CDO had a weighted average life of 8.3 years, which suggests lower collateral rollover and reinvestment risk during the five-year reinvestment period. The CDO is in compliance with all its reinvestment covenants. The weighted average spread is 3.95%, which is above the covenant of 1.50%. This WAS is unchanged from the effective date. The weighted average coupon has decreased slightly to 6.42% from 6.44% at the effective date, and remains above the 6.15% covenant. Additionally, the overcollateralization and interest coverage ratios of all classes have remained above their covenants, as of the Jan. 17, 2008 trustee report. Collateral Analysis: Since the effective date, the pool's composition has remained substantially the same with no new loans added to the pool. One loan, representing 0.4% of the pool has paid off, and one loan, representing 0.5% of the pool, has defeased. The portfolio's largest asset type exposure continues to be multifamily, which has decreased slightly to 71.2% from 71.6% at the effective date. The second largest asset type exposure is office at 11.7%. All property type concentrations are within the covenants. The CDO is well within all of its geographic location covenants with the largest exposure (23.4%) located in California. The pool has below average loan diversity relative to other CRE CDOs. The pool currently consists of 37 loans and the Fitch Loan Diversity Index score is 444, compared to the covenant of 500. No single obligor may represent more than 10% of the pool. Rating Definitions: The ratings of the class A-1, A-2 and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C, D-1, D-2, E and F, notes address the likelihood that investors will receive ultimate interest and deferred interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. Upgrades during the reinvestment period are unlikely given the pool could still migrate to the PEL covenant. The Fitch PEL is a measure of the hypothetical loss inherent in the pool at the 'AA' stress environment before taking into account the structural features of the CDO liabilities. Fitch PEL encompasses all loan, property, and poolwide characteristics modeled by Fitch. AMBAC FINANCIAL: $3 Billion Rescue Deal Draws Near -------------------------------------------------- Ambac Financial Group, Inc. is anticipating the consummation of a proposed $3 billion financing deal offered by various banks, today or for the next few days, Carrick Mollenkamp at The Wall Street Journal reports, citing sources who know about the issue. WSJ relates that people who are familiar with the matter still caution that the deal may not push through. The credit and bond markets reflected positive responses when a group of banks approved a $3 billion rescue deal for Ambac, says WSJ. The deal, endorsed and largely drafted by New York insurance regulating chief Eric Dinallo, proposes to raise equity of $2.5 billion and issue debt of $500 million. However, sources told WSJ that it still wasn't clear if Ambac was planning to split its municipal bond business from the riskier and more complicated subprime mortgage-backed securities, just like what fellow bond insurer Financial Guaranty Insurance Co. has been contemplating. WSJ observes, however, that raising more capital is seen as a faster cure to Ambac's troubled state. As reported in the Troubled Company Reporter on Feb. 18, 2008, FGIC's general counsel, Ed Turi, notified Mr. Dinallo of FGIC's intent "to begin the process" of creating a new bond insurance company in New York, which would require the department to issue a license. If it gets a license, the new insurer will support public bonds previously insured by FGIC and seek new municipal- bond business, the company said. Ambac, together with FGIC and MBIA Inc., was previously offered a deal by billionaire-investor Warren Buffett to reinsure $800 million of their municipal bonds portfolios. Mr. Buffett's move to reinsure the municipal bonds and take on $5 billion in liabilities curbed fears among investors that the rating agencies' downgrades of insurers could force the insurers to scramble selling their municipal bonds. The bonds in this market have recently been plummeting in value. As reported in the Troubled Company Reporter on Feb. 15, 2008, Ambac rejected the offer. The acceptance of the offer would mean a sign of desperation on their part, company representatives said. About FGIC FGIC Corporation is a holding company whose primary operating subsidiaries, Financial Guaranty Insurance Corporation and FGIC UK Limited, provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. For the nine months ended Sept. 30, 2007, FGIC reported net operating income available to common shareholders of $62.4 million. As of Sept. 30, 2007, FGIC had shareholders' equity of approximately $2.4 billion. FGIC guaranteed about $315 billion of debt as of September 2007. Financial Guaranty Insurance Co. -- http://www.fgic.com/-- has enjoyed a reputation for financial strength, underwriting discipline and superior client service. As a leading financial guaranty insurance company, FGIC provides credit enhancement on infrastructure finance and structured finance securities worldwide, enabling bond issuers to obtain capital cost effectively and enhancing their access to the capital markets. * * * Financial Guaranty Insurance Company has lost its premium "AAA" rating from all three ratings firms. As reported in the Troubled Company Reporter on Feb. 11, 2008, Fitch Ratings downgraded its ratings of FGIC's insurer financial strength to 'AA' from 'AAA', on Jan. 30, 2008. This rating remains on Rating Watch Negative. Standard & Poor's stripped FGIC of its key AAA rating on Jan. 31, saying FGIC may fail to raise the capital needed to cushion possible losses on complex securities that have plunged in value. As reported in the Troubled Company Reporter on Feb. 15, 2008, Moody's Investors Service downgraded to A3 the insurance financial strength ratings of FGIC's operating subsidiaries, including Financial Guaranty Insurance Company and FGIC UK Limited. Moody's also downgraded FGIC's senior debt rating to Ba1 from Aa2, and the contingent capital securities ratings of Grand Central Capital Trusts I-VI to Baa3 from Aa2. About Ambac Financial Based in New York City, Ambac Financial Group, Inc. 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 CASINO: S&P Withdraws 'B+' Rating After Note Redemption ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Las Vegas-based American Casino & Entertainment Properties LLC, including the 'B+' corporate credit rating. The withdrawal follows the redemption of the company's outstanding $215 million senior secured notes in conjunction with the close of the sale of ACEP to W2007/ACEP Holdings LLC, an affiliate of Whitehall Street Real Estate Funds. Ratings List American Casino & Entertainment Properties LLC To From -- ---- Corporate Credit Rating NR B+/Watch Neg/-- Senior Secured Notes NR B+/Watch Neg AMERICAN DENTAL: Amends $175MM Credit Facilities to Waive Defaults ------------------------------------------------------------------ American Dental Partners, Inc., entered into agreements to amend its credit facilities with its existing lenders. The agreements will replace a forbearance agreements and waive the defaults under the existing revolving credit facility and term loan facility. Pursuant to the agreements, the revolving credit facility will have a capacity of $75,000,000 with $45,474,000 drawn, including outstanding letters of credit, at Feb. 21, 2008 and the term loan facility has $100,000,000 outstanding. Both facilities will mature on June 30, 2009, and at current leverage levels, the company will borrow on both facilities at the Eurodollar rate plus 250 basis points. The amended facilities will permit the company to borrow up to $15,000,000 annually for capital expenditures, $15,000,000 annually for acquisitions and up to $13,000,000 for earnout and contingent payments on completed acquisitions, subject to a maximum debt to earnings before interest, taxes, depreciation and amortization leverage ratio of 3.75x. The amendments to the revolving credit facility and term loan facility will become effective upon completion of the transactions contemplated by a settlement of litigation among PDG, P.A., PDHC, Ltd., one of the company's Minnesota subsidiaries, and the Company. The company continues to negotiate definitive agreements with PDG under the Settlement Agreement. If the transactions contemplated by the settlement are not completed on or before Feb. 29, 2008, the amendments will not take effect. "We are pleased that we have been able to enter into agreements with our existing lenders that will eliminate the uncertainty created by the forbearance situation and provide us with long-term bank financing," Gregory A. Serrao, Chairman, Chief Executive Officer and President of the company stated. "We believe that the amended terms of the revolving credit facility will provide sufficient borrowing capacity along with internally generated cash flow to allow us to continue to reinvest in our business, including capital expenditures and affiliations, and also meet our obligations for earnouts and contingent payments on previously completed affiliations." The amended revolving credit facility was arranged by Key Bank and other participating banks include JPMorgan, RBS Citizens Bank and TD Banknorth. The amended term loan was arranged by Key Bank and includes RBS Citizens Bank as a participant. Based in Wakefield, Massachussetts, American Dental Partners Inc. (NASDAQ:ADPI) -- http://www.amdpi.com/-- provides business services to multidisciplinary dental group practices in selected markets throughout the United States. It provides or assists with organizational planning and development, recruiting, retention and training programs, quality assurance initiatives, facilities development and management, employee benefits administration, procurement, information systems and practice technology, marketing and payor relations, and financial planning, reporting and analysis. The company is affiliated with 26 dental group practices which have 261 dental facilities with approximately 2,301 operatories located in 18 states. ARVINMERITOR INC: DBRS Confirms 'BB(low)' Ratings on Unsec. Notes ----------------------------------------------------------------- DBRS confirmed the ratings for the Senior Unsecured Notes and Convertible Senior Unsecured Notes of ArvinMeritor Inc. The trends have been changed from Stable to Negative, reflecting ARM’s recent losses and extensive working capital usage, with limited prospects for debt reduction in the near term given adverse industry conditions and the Company’s ongoing expansion and restructuring activities. However, ARM’s earnings should improve over the medium term in line with an expected spike in Class 8 truck demand in 2009 in North America, with the Company also slated to reap eventual rewards from its restructuring efforts. In 2007, ARM completed the divestitures of its light vehicle aftermarket and emissions technology businesses, with proceeds being applied toward debt reduction and pension contributions. While the divestitures effectively remove two lower-margin businesses and have resulted in a reduction in debt levels, in DBRS’s opinion this is partly offset by ARM’s increased exposure to the highly volatile commercial vehicle industry, with the commercial vehicle systems segment now accounting for approximately two-thirds of total revenues. Accordingly, F2007 earnings deteriorated significantly year-over- year given the sharp drop (30%) in Class 8 truck production following extensive pre-buying activity in 2006 in advance of new emissions regulations. This has been compounded by economic concerns in the United States that have considerably delayed the rebound in demand/production, with this trend expected to continue well into 2008. While ARM’s light vehicle systems segment generated modestly higher earnings in F2007, margins will remain pressured in F2008 given ongoing pricing cutbacks demanded by OEMs, combined with more aggressive production declines of the Detroit 3 given their increased flexibility in this regard as a result of their revised agreements with the United Auto Workers. In response to the challenging environment, ARM has persisted with restructuring activities and launched Performance Plus in 2007, which aims to improve the Company’s global footprint and cost competitiveness through various measures including the elimination of up to 2,800 positions in North America and Europe. ARM is also expanding its presence in low-cost countries and seeking to benefit from growth prospects in Asia as it presently has numerous investments underway in China and India with the goal of achieving $1.6 billion in regional sales by F2012, (almost triple the level of F2007 regional sales). Additionally, the Company recently improved its liquidity through the December 2007 renegotiation of its senior secured revolving credit facility. The availability of the former facility was somewhat compromised due to covenants; the new facility (although reduced in size from $900 million to $700 million) has an amended covenant package that significantly enhances availability. Over the medium term, as the North American Class 8 truck market rebounds and ARM’s cost position improves, firmer margins should result. DBRS expects only modest earnings improvement over the near term, with debt levels remaining constant. However, in the event that working capital requirements or persistent losses result in further deterioration of the financial profile, a ratings downgrade would be considered. Debt Rating Issuer Rated Action Rating ------ ----- ------- ------ ArvinMeritor Inc. Conv. Sr. Trend Change BB (low)Neg Unsec. Notes ArvinMeritor Inc. Sr. Unsec. Trend Change BB (low)Neg Notes ATLANTIC WINE: Posts $197T Net Loss in 3rd Qtr. Ended Dec. 31 ------------------------------------------------------------- Atlantic Wine Agencies Inc. reported a net loss of $197,191 on net sales of $54,842 for the third quarter ended Dec. 31, 2007, compared with a net loss of $186,537 on net sales of $29,577 in the same period ended Dec. 31, 2006. Operating costs for the three-months ended Dec. 31, 2007, aggregated $252,416 as compared to $207,114 for the three-months ended Dec. 31, 2006. At Dec. 31, 2007, the company's consolidated balance sheet showed $2,810,799 in total assets, $2,772,074 in total liabilities, and $38,725 in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $234,660 in total current assets available to pay $2,772,074 in total current 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?2852 Going Concern Doubt Meyler & Company LLC, in Middletown, N.J., expressed substantial doubt about Atlantic Wine Agencies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm reported that the company has incurred cumulative losses of $7,749,230 since inception, has negative working capital of $1,912,728, and there are existing uncertain conditions the company faces relative to its ability to obtain capital and operate successfully. About Atlantic Wine Based in Somerset West, South Africa, Atlantic Wine Agencies Inc. (OTC BB: AWNA.OB) -- http://www.atlanticwineagencies.com/-- was incorporated in the State of Florida as New England Acquisitions Inc. on April 8, 2001. On Jan. 13, 2004, the company changed its name to Atlantic Wine Agencies. The company through its two wholly owned subsidiaries, Mount Rozier Estates (Pty) Limited and Mount Rozier Properties (Pty) Limited, owns a vineyard in the Stellenbosch region of Western Cape, South Africa. The vineyard and surrounding properties consist of 80.9 hectares of arable land for viticultural as well as residential and commercial purposes. AURIGA LABS: Obtains $750,000 Secured Loan from Prospector Capital ------------------------------------------------------------------ On Feb. 13, 2008, Auriga Laboratories Inc. issued to Prospector Capital Partners LLC, a Delaware limited liability company, a non- interest bearing Senior Secured Promissory Note in the principal amount of $750,000. The Note matures on Jan. 31, 2009. As consideration for the Note, the company entered into a Royalty Participation Agreement with the lender. Under the Royalty Agreement, the company shall make royalty payments to the lender consisting of 7.5% of "net sales" of its dextroamphetamine sulfate oral solution and acetaminophen/codeine products. As additional consideration for the Note, the company issued to the lender a 30-month warrant to acquire up to 500,000 shares of the company's common stock at an exercise price of $0.039 per share. The company is obligated to make such royalty payments to the lender until total royalty payments equal $6,000,000. Going Concern Doubt As reported in the Troubled Company Reporter on April 3, 2007, Williams & Webster P.S., in Spokane, Wash., raised substantial doubt about Auriga Laboratories Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditor pointed to the company's substantial operating losses since inception, negative working capital, and limited cash resources. About Auriga Laboratories Based in Norcross, Georgia, Auriga Laboratories Inc. (OTC BB: ARGA) -- http://www.aurigalabs.com/-- is a specialty pharmaceutical company building an industry changing commission- based sales model targeting over 2000 filled territories by 2009. The company's high-growth business model combines driving revenues through a variable cost commission-based sales structure, acquisition and development of FDA approved products, all of which are designed to enhance its growing direct relationships with physicians nationwide. Auriga's current product portfolio includes 27 marketed products and 6 products in development covering various therapeutic categories. BALLY TOTAL: Latham & Watkins Withdraws as Bankruptcy Counsel ------------------------------------------------------------- Latham & Watkins LLP obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to withdraw as counsel for Bally Total Fitness Holding Corp. and its debtor- affiliates, for good cause shown. David S. Heller, Esq., a partner at the firm, told the Court that new investors Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund L.P., as sole owners of the Reorganized Bally Total Fitness Holding Corp., are transitioning legal services to Kasowitz, Benson, Torres & Friedman LLP, the legal counsel the New Investors have used historically in restructuring matters. The New Investors' decision to retain new counsel constitutes good cause for Latham & Watkins to withdraw as counsel to the Debtors, pursuant to requirements of Local Rule 2090-1 for the Southern District of New York, Adam L. Shiff, Esq., at Kasowitz Benson, noted. Mr. Shiff informed the Court that Latham & Watkins will coordinate with Kasowitz on the transition of the legal services in order to provide as seamless a transition as possible. In a separate filing, Kasowitz Benson advised the Court that that it has been substituted as counsel for the Reorganized Debtors in place of Latham & Watkins. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre-packaged chapter 11 plan. Joseph Furst, III, Esq., at Latham & Watkins, L.L.P. represented the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had $408,546,205 in total assets and $1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. On Aug. 13, 2007, they filed an Amended Joint Prepackaged Plan and on Aug. 17 filed a Modified Amended Prepackaged Plan. BASTILLE DEVELOPMENT: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Bastille Development Corp. 524 Decatur Street Brooklyn, NY 11233 Bankruptcy Case No.: 08-40945 Chapter 11 Petition Date: February 20, 2008 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Miriam Lazofsky, Esq. 103-14 Avenue M Brooklyn, NY 11236-4510 Tel: (718) 531-1478 Fax: (718) 251-2155 mlazofsky@verizon.net Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20 largest unsecured creditors. BEAR STEARNS: Fitch Junks Ratings on Ten Certificate Classes ------------------------------------------------------------ Fitch Ratings has taken rating actions on Bear Stearns Asset Backed Securities I Trust 2006-HE7 Group 1 mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are now removed. Downgrades total $95.5 million. Additionally, $45 million remains on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Bear Stearns Asset Backed Securities I Trust 2006-HE7 Group 1 -- $45 million class 1-A-1 rated 'AAA', remains on Rating Watch Negative (BL: 61.69, LCR: 1.83); -- $46.3 million class 1-A-2 downgraded to 'A' from 'AAA' (BL: 45.34, LCR: 1.34); -- $6.8 million class 1-A-3 downgraded to 'A' from 'AAA' (BL: 43.95, LCR: 1.3); -- $8.1 million class 1-M-1 downgraded to 'B' from 'AA+' (BL: 38.26, LCR: 1.13); -- $7.6 million class 1-M-2 downgraded to 'CCC' from 'AA' (BL: 32.96, LCR: 0.98); -- $4.4 million class 1-M-3 downgraded to 'CCC' from 'AA-' (BL: 29.86, LCR: 0.88); -- $3.8 million class 1-M-4 downgraded to 'CCC' from 'A+' (BL: 27.14, LCR: 0.80); -- $3.6 million class 1-M-5 downgraded to 'CC' from 'A' (BL: 24.52, LCR: 0.73); -- $3.4 million class 1-M-6 downgraded to 'CC' from 'BBB+' (BL: 22.03, LCR: 0.65); -- $3.2 million class 1-M-7 downgraded to 'CC' from 'BBB' (BL: 19.39, LCR: 0.57); -- $2.7 million class 1-M-8 downgraded to 'CC' from 'BB+' (BL: 16.92, LCR: 0.50); -- $2.2 million class 1-M-9 downgraded to 'C' from 'BB-' (BL: 14.93, LCR: 0.44); -- $1.7 million class 1-M-10 downgraded to 'C' from 'B' (BL: 13.50, LCR: 0.40); -- $1.8 million class 1-M-11 downgraded to 'C' from 'CCC' (BL: 12.23, LCR: 0.36); Deal Summary -- Originators: Various; -- 60+ day Delinquency: 29.12%; -- Realized Losses to date (% of Original Balance): 1.96%; -- Expected Remaining Losses (% of Current balance): 33.79%; -- Cumulative Expected Losses (% of Original Balance): 27.91%. The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and late 2005 with regard to continued poor loan performance and home price weakness. BELLINGHAM SHOPPING: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Bellingham Shopping Center, L.L.C. 799 South Main Street Unit 17D Bellingham, MA 02019 Bankruptcy Case No.: 08-11161 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Lorusso Construction Co., Inc. 08-11162 Chapter 11 Petition Date: February 21, 2008 Court: District of Massachusetts (Boston) Judge: Joan N. Feeney Debtor's Counsel: AnDre' D. Summers, Esq. (Summerslaw@Hotmail.Com) P.O. Box 306 9 East Central Street Franklin, MA 02038 Tel: (508) 528-8444 Bellingham Shopping Center, LLC's Financial Condition: Total Assets: $1 Million to $10 Million Total Debts: $1 Million to $10 Million The Debtors did not file lists of their largest unsecured creditors. BLUE WATER: Gets Court Permission to Use Cash Collateral -------------------------------------------------------- Judge Marci B. McIvor of the United States Bankruptcy Court for the Eastern District of Michigan authorized Blue Water Automotive Systems, Inc., and its debtor-affiliates to use not more than $10,000,000 of their operating cash through February 25, 2008, for purposes provided under a proposed nine-week budget commencing February 20. The Operating Cash includes (i) collections, if any, on prepetition and postpetition receivables from participating customers Ford Motor Company, General Motors Corporation, and Chrysler, LLC, (ii) collections on prepetition and postpetition receivables from other customers, and (iii) the $2,760,000 in financial accommodations provided by the Participating Customers. A copy of the Nine-Week Proposed Budget is available for free at: http://bankrupt.com/misc/bluewater_9WeekBudget.pdf The Participating Customers will provide financial accommodations of up to $2,762,000 to the Debtors during the Interim Period: Customer Cash Payment -------- ------------ Ford $1,890,000 GM 510,000 Chrysler 362,000 The amount, purposes and period may be extended by agreement among the Debtors, lenders under the Amended and Restated Loan and Security Agreement dated as of July 28, 2006, and the Participating Customers, with notice to the Official Committee of Unsecured Creditors. Judge McIvor will convene a hearing on February 25 to consider further extension of the use of the Operating Cash. As adequate protection, The CIT Group/Business Credit, Inc., as agent for the Prepetition Lenders, will: (a) be granted a replacement lien in the Debtors' assets in the same amount as the Operating Cash used in the Interim Period; (b) receive an amount equal to 55% of the sale price of finished goods sold during the Interim Period. The CIT Replacement Lien will not include any causes of action under Chapter 5 of the Bankruptcy Code or their proceeds. The CIT Replacement Lien will be senior to all other liens, security interests and claims, and will be subject only to valid and unavoidable prepetition liens, including liens, which may relate back pursuant to Section 1146(a) of the Bankruptcy Code. The Participating Customers and two other of the Debtors' customers, Automotive Component Holding, Inc., and AutoAlliance International, Inc., agree to waive all rights of set-off and recoupment on receivables generated during the Interim Period, except for ordinary course set-offs and recoupments permitted pursuant to their contracts, not to exceed 10% per invoice. The Participating Customers will have a second priority, junior lien in the categories of assets that are subject to the CIT Replacement Lien, subordinate and junior in all respects to the CIT Replacement Lien, to extent of each Participating Customers' financial accommodation. The Debtors will pay, no later than February 20, 2008, all amounts due through February 19, 2008. Judge McIvor will convene a hearing on March 12 to consider final approval of the cash collateral request. Objections to the 2nd Interim Order must be received by March 10. 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. 4, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BLUE WATER: Wants Deadline to File Schedules Moved to March 28 -------------------------------------------------------------- Blue Water Automotive Systems, Inc., and its debtor-affiliates ask Judge Marci B. McIvor of the United States Bankruptcy Court for the Eastern District of Michigan to extend until March 28, 2008, their deadline to file schedules of assets and liabilities, and statements of financial affairs. The Debtors' proposed counsel, Judy A. O'Neill, Esq., at Foley & Lardner, LLP, in Detroit, Michigan, tells the Court that the Debtors cannot complete their Schedules and Statements within the 15-day period alloted under Rule 1007(c) of the Federal Rules of Bankruptcy Procedure due to the complexity of their businesses and the critical restructuring issues that have consumed the attention of their key personnel and professionals. Ms. O'Neill adds that the Debtors have not had a sufficient opportunity to gather the necessary information to prepare and file their Schedules and Statements given the size and complexity of their business operations and the fact that certain prepetition invoices have not yet been received and entered into their books and records. Ms. O'Neill relates that the Debtors have already commenced the extensive process of gathering the necessary information to prepare and finalize what will be voluminous Schedules and Statements, but believe that the 15-day automatic extension to file the Schedules and Statements will not be sufficient to permit completion of the Schedules and Statements. The Debtors estimate that the additional 30 days is enough for them to complete and file the Schedules and Statements. 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. 4, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BLUE WATER: Creditors Panel Wants to Hire Schafer as Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Blue Water Automotive Systems, Inc., and its debtor-affiliates seeks authority from Judge Marci B. McIvor of the United States Bankruptcy Court for the Eastern District of Michigan to retain Schafer and Weiner, PLLC, as its bankruptcy counsel. As counsel, Schafer will represent and assist the Creditors Committee with all aspects of its role in the Debtors' bankruptcy cases, as provided under Section 1103 of the Bankruptcy Code. Schafer will be paid according to its hourly rates and reimbursed for any necessary out-of-pocket expenses: Professionals Hourly Rates ------------- ------------ Senior Members $295 - $395 Junior Members $230 - $295 Associate $260 - $145 Legal Assistant $120 Michael E. Baum, Esq., a member at Schafer & Weiner, PLLC, in Bloomfield Hills, Michigan, assures the Court that his firm does not represent any interest adverse to the Creditors Committee and the Debtors' estate. He adds that his firm is a "disinterested person" as the term is defined in Section 101(14). Mr. Baum, however, discloses that Schafer has represented certain of the Debtors' creditors in matters wholly unrelated to the bankruptcy cases. Those creditors include: * Sundance Products Group, LLC, * Rhetech, Inc., * Active Burgess Mould & Design, * Innovative Mold, Inc., * Sejasmi Industries, Inc., and * Braidco Tool and Mold, Inc. 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. 4, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CENTRAL GARDEN: S&P Holds 'B' Rating on Improved Covenant Cushion ----------------------------------------------------------------- Standard & Poor's Ratings Service affirmed its 'B' corporate credit, 'B+' senior secured debt, and 'CCC+' senior subordinated debt ratings on Central Garden & Pet Co. At the same time, Standard & Poor's removed these ratings from CreditWatch, where they were originally placed with negative implications on June 7, 2007. Additionally, Standard & Poor's revised the recovery rating on Central Garden's bank facility to '2', indicating an expectation of substantial (70% to 90%) recovery in the event of a default, from '1'. The outlook is negative. "The ratings affirmation and removal from CreditWatch is based on the company's improved covenant cushion under its bank facility in the first quarter of fiscal 2008," said Standard & Poor's credit analyst Patrick Jeffrey. However, the company continues to face significant operating challenges that have negatively impacted key credit protection measures and liquidity. "The company will need to continue to maintain adequate liquidity in the near term, particularly as it enters its peak borrowing period to fund working capital in the second quarter of fiscal 2008," added Mr. Jeffrey. The ratings on Walnut Creek, California-based Central Garden reflect its significant operating difficulties in fiscal 2007, lower operating margins compared with competitors, its historical acquisition-oriented growth strategy, and seasonality in the lawn and garden business. These risks are partly mitigated by the company's broad product portfolio. CENTRO NP: Signs Agreement Extending $350 Million Credit Facility ----------------------------------------------------------------- On Feb. 14, 2008, Centro NP LLC entered into a letter of agreement amending its $350.0 million unsecured revolving credit facility with Bank of America N.A., as administrative agent. Under the letter agreement, the maturity date of the credit facility has been extended from from Feb. 15, 2008, to the earlier of (i) Sept. 30, 2008, and (ii) the date on which any Trigger Event occurs. The Letter Agreement also amends the applicable margin of the interest rate of the loans under the Revolving Credit Facility to 1.75%. The loans under the Revolving Credit Facility bear interest at a rate per annum equal to, at the company's option, (i) a base rate equal to the prime rate plus the Applicable Margin or (ii) the LIBOR rate plus the Applicable Margin. The Letter Agreement also provides that the company may not request, and the lenders under the Revolving Credit Facility will have no obligation, to make any extensions of credit under the Revolving Credit Facility. A full-text copy of the Letter Agreement dated as of Feb. 14, 2008, is available for free at: http://researcharchives.com/t/s?2856 About Centro NP LLC Headquartered in Lexington, New York, Centro NP LLC was formed in February 2007 to succeed the operations of New Plan Excel Realty Trust Inc. The principal business of the company is the ownership and management of community and neighborhood shopping centers throughout the United States. * * * As reported in the Troubled Company Reporter on Feb. 19, 2008, Moody's Investors Service stated that the affirmation of the B3 senior unsecured debt ratings of Centro NP LLC, formerly New Plan Excel Realty Trust Inc., reflects the company's announcement that it has been granted an extension until Sept. 30, 2008, and its parent, Centro Properties Group, was granted an extension until April 30, 2008, on its Feb. 15, 2008 refinancing deadlines. The ratings are under review with direction uncertain. CHC HELICOPTER: Inks CN$3.7 Bil. Merger Deal With First Reserve --------------------------------------------------------------- CHC Helicopter Corporation disclosed that First Reserve Corp. has entered into an agreement to acquire CHC'. CHC and First Reserve believe that the all-cash transaction, which values the company at an adjusted enterprise value of CN$3.7 billion, is the largest-ever buyout in the oilfield services industry. "I'm glad to see that First Reserve recognized the value that was created in CHC over the years, and was able to translate that value into a fair offer for all shareholders," Mark Dobbin, CHC's chairman of the board, commented. "I'm also very pleased to see that First Reserve will carry on CHC's legacy of entrepreneurship, as it builds upon CHC's position as a world class helicopter company." "This partnership will help us realize our growth potential," Sylvain Allard, president and chief executive officer of CHC, said. "First Reserve is an investment company with deep knowledge of the energy industry and views CHC as a great investment platform." "First Reserve has strong conviction in the merits of the strategy that has led to CHC's success and will work in partnership with us to continue to execute that same plan and achieve our long-term objectives," Mr. Alard continued. "CHC is an extraordinary company," Mark McComiskey, managing director of First Reserve Corporation, added. "The European and global leader in oil and gas and search and rescue helicopter services, with the world's largest independent helicopter support business, CHC has a worldwide footprint, the best safety record in the industry and a dynamic management team executing an exciting growth strategy." Under the terms of the transaction, an affiliate of the First Reserve fund will acquire all outstanding class A subordinate voting shares and all of the outstanding class B multiple voting shares of CHC for CN$32.68 per class A share and class B share for an aggregate consideration of approximately CN$1.5 billion. After completion of the transaction CHC's class A shares and class B shares will be de-listed and no longer traded publicly. CHC's headquarters will remain in Vancouver, Canada. The board of directors of CHC has unanimously approved the entry by CHC into the agreement and recommends that shareholders vote in favor of the transaction. Merrill Lynch Canada Inc. and Scotia Capital are financial advisors to CHC. Ogilvy Renault LLP and DLA Piper USA LLP are legal counsel to CHC. Simpson Thacher & Bartlett LLP, Blake, Cassels & Graydon LLP and Slaughter and May are legal counsel to the First Reserve fund. About CHC Helicopter Corporation Headquartered in Richmond, British Columbia, in Canada, CHC Helicopter Corporation (TSE:FLY.A)V7B - http://www.chc.ca/-- is a commercial helicopter operator. The company, through its subsidiaries, operates in over 30 countries, on all seven continents and in most of the offshore oil and gas producing regions of the world. The company's operating units are based in the United Kingdom, Norway, the Netherlands, South Africa, Australia and Canada. It provides helicopter transportation services to the oil and gas industry for production and exploration activities through its European and global operations segments. It also provides helicopter transportation services for emergency medical services and search and rescue activities and ancillary services, such as flight training. The company's Heli- One segment is a non-original equipment manufacturer helicopter support company, providing repair and overhaul services, aircraft leasing, integrated logistics support, helicopter parts sales and distribution and other related services. CHC HELICOPTER: Moody's Reviews Ba3 Rating For Likely Downgrade --------------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade the Ba3 corporate family rating and probability of default rating for CHC Helicopter Corporation. The review will also cover the B1 (LGD 5, 72%) rating on CHC's $400 million senior subordinated notes. These actions follow the announcement that a fund managed by First Reserve Corporation has entered into an agreement to acquire CHC. "Our review of CHC will focus on obtaining more clarity regarding the transaction's financing structure and also on First Reserve's growth strategy and financial policies for CHC following the acquisition," commented Pete Speer, Moody's Vice-President/Senior Analyst. In January 2008, Moody's changed CHC's rating outlook to negative due to the company's substantial increase in leverage to fund its major fleet expansion and its future commitments to purchase 85 more helicopters for delivery through 2012. In addition to the transaction's potential effect on the company's capital structure, Moody's is concerned that CHC's fleet expansion might be further accelerated while continuing to be substantially all debt funded. As part of Moody's review, it will discuss with First Reserve and CHC management their post acquisition plans including their operating philosophy, growth objectives and financial policies. First Reserve has agreed to acquire all of CHC's outstanding equity shares for approximately CN$1.5 billion. The overall transaction will be financed through a combination of equity which has been committed by the First Reserve Fund and debt financing that has been committed by Morgan Stanley International and affiliates, in each case subject to the terms of those commitments. The closing of the transaction will take place after satisfaction or waiver of all conditions, including the approvals and confirmations from aviation regulatory authorities. CHC currently expects the transaction to close in the second calendar quarter of 2008, subject to the terms of the agreement. CHC's 7-3/8% senior subordinated notes due 2014 contain a change of control provision. Within 30 days of the completion of the First Reserve acquisition, CHC will be required to offer to purchase all of the remaining notes outstanding at a price equal to 101% of the principal amount and accrued interest. About CHC Helicopter Corporation Headquartered in Richmond, British Columbia, in Canada, CHC Helicopter Corporation (TSE:FLY.A)V7B - http://www.chc.ca/-- is a commercial helicopter operator. It is one of the world's largest providers of helicopter services to the offshore exploration and production industry, according to Moody's Investors Service. The company, through its subsidiaries, operates in over 30 countries, on all seven continents and in most of the offshore oil and gas producing regions of the world. The company's operating units are based in the United Kingdom, Norway, the Netherlands, South Africa, Australia and Canada. It provides helicopter transportation services to the oil and gas industry for production and exploration activities through its European and global operations segments. It also provides helicopter transportation services for emergency medical services and search and rescue activities and ancillary services, such as flight training. The company's Heli-One segment is a non-original equipment manufacturer helicopter support company, providing repair and overhaul services, aircraft leasing, integrated logistics support, helicopter parts sales and distribution and other related services. CHC HELICOPTER: S&P Assigns 'BB-' Rating on Developing CreditWatch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB-' long-term corporate credit and 'B' subordinated debt ratings on Vancouver- based CHC Helicopter Corp., on CreditWatch with developing implications, following the announcement that a fund managed by First Reserve Corp. has entered into an agreement to acquire CHC. "The developing CreditWatch placement reflects the uncertainty regarding the ultimate composition of CHC's prospective capital structure, following completion of the acquisition. The buyout will be financed through a combination of equity committed by the First Reserve Fund and debt financing committed by Morgan Stanley International and affiliates," said Standard & Poor's credit analyst Jamie Koutsoukis. "The rated senior subordinated notes will presumably be redeemed, as provisions within the indenture require CHC to offer to purchase the remaining notes issued and outstanding," Ms. Koutsoukis added. S&P does not expect to resolve the CreditWatch placement until the transaction closes and S&P is able to consult with CHC's management and have greater certainty regarding the new capital structure of the company. About CHC Helicopter Corporation Headquartered in Richmond, British Columbia, in Canada, CHC Helicopter Corporation (TSE:FLY.A)V7B - http://www.chc.ca/-- is a commercial helicopter operator. It is one of the world's largest providers of helicopter services to the offshore exploration and production industry, according to Moody's Investors Service. The company, through its subsidiaries, operates in over 30 countries, on all seven continents and in most of the offshore oil and gas producing regions of the world. The company's operating units are based in the United Kingdom, Norway, the Netherlands, South Africa, Australia and Canada. It provides helicopter transportation services to the oil and gas industry for production and exploration activities through its European and global operations segments. It also provides helicopter transportation services for emergency medical services and search and rescue activities and ancillary services, such as flight training. The company's Heli-One segment is a non-original equipment manufacturer helicopter support company, providing repair and overhaul services, aircraft leasing, integrated logistics support, helicopter parts sales and distribution and other related services. CHINA AOXING: Posts $1.1M Net Loss in 2nd Qtr. Ended Dec. 31 ------------------------------------------------------------ China Aoxing Pharmaceutical Co. Inc. reported a net loss of $1,149,132 on revenues of $863,877 for the second quarter ended Dec. 31, 2007, compared with a net loss of $716,239 on revenues of $345,907 in the same period ended Dec. 31, 2006. General and administrative expenses increased to $949,138 in the three months ended Dec. 31, 2007, from the $262,729 in general and administration expense incurred in the three months ended Dec. 31, 2006. The company incurred interest expense of $426,133 during the quarter ended Dec. 31, 2007, compared to interest expense of $589,646 in the three months ended Dec. 31, 2006. At Dec. 31, 2007, the company had over $13.0 million in debt, long and short- term, that the company incurred to build its facilities and develop its product line. Default Hebei Aoxing Pharmaceutical Group Inc., the operating subsidiary of China Aoxing, is in default in its obligation to satisfy a debt of $3,212,830 and $3,964,944 due to the Bank of China in Dec 31, 2006, and Dec. 31, 2007. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $21,276,095 in total assets, $16,674,243 in total liabilities, $1,798,316 in convertible debentures, and $2,803,536 in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $1,596,694 in total current assets available to pay $16,674,243 in total current 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?2857 Going Concern Doubt Paritz & Company P.A., in Hackensack, New Jersey, expressed substantial doubt about China Aoxing Pharmaceutical Co. Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended June 30, 2007 and 2006. The auditing firm said that the company's current liabilities substantially exceeded its current assets. About China Aoxing Incorporated in the State of Florida and headquartered in Jersey City, New Jersey, China Aoxing Pharmaceutical Company Inc. (OTC BB: CAXG) is a pharmaceutical company engaged in research, development, manufacturing and marketing of a range of narcotics and pain management pharmaceutical products in generic and formulations. The company's operating subsidiary, Hebei Aoxing Pharmaceutical Co. Inc. is a corporation organized under the laws of the People's Republic of China. CKE RESTAURANTS: Moody's Keeps All Ratings; Assigns Neg Outlook --------------------------------------------------------------- Moody's Investors Service affirmed all ratings of CKE Restaurants, Inc. and changed the ratings outlook to negative from stable. Affirmation of the Ba3 corporate family rating reflects CKE's relatively good operating performance, reasonable scale, multiple concepts, and diversified day part. However, the use of additional debt to support an increasing focus on shareholder based initiatives, such as share repurchases and higher dividends, combined with higher operating costs and weaker operating metrics has resulted in debt protection metrics which weakly position the company within its current rating category. The change in outlook to negative reflects CKE's weaker-than- expected operating performance, as well as Moody's view that the weak consumer environment and historically high operating costs will likely persist. When this weaker performance is combined with management's financial policy, which has included increased share repurchases and dividends, it will make it challenging for the company to maintain debt protection metrics over the intermediate term at levels appropriate for its rating. Ratings affirmed are: -- Corporate family rating rated at Ba3 -- Probability of default rating rated at Ba3 -- $200 million guaranteed first lien senior secured revolver, due March 2012, rated Ba2 (LGD 3, 38%), previously Ba2 (LGD 3, 31%) -- $270 million guaranteed first lien term loan B, due 2013, rated Ba2 (LGD 3, 38%), previously Ba2 (LGD 3, 31%) -- $105 million, 4.0% convertible senior subordinated notes, due Oct. 1, 2023, rated B2 (LGD 6, 96%) The outlook for the ratings is negative. CKE Restaurants, Inc., headquartered in Carpinteria California, owns, operates, and franchises, approximately 3,052 quick-service and fast casual restaurants under the brand names Carl's Jr. , Hardees, Green Burrito, and Red Burrito. For the last twelve month period ending November 2007, the company generated revenues of about $1.57 billion and operating profit of approximately $84 million. COGNIGEN NETWORKS: Dec. 31 Balance Sheet Upside-Down by $638T ------------------------------------------------------------- Cognigen Networks Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $1,549,250 in total assets and $2,187,353 in total liabilities, resulting in a $638,103 total stockholders' deficit. At Dec. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $723,782 in total current assets available to pay $2,187,353 in total current liabilities. The company reported a net loss of $1,563,188 on revenue of $1,073,692 for the second quarter ended Dec. 31, 2007, compared with net income of $92,402 on revenue of $1,587,902 in the same period ended Dec. 31, 2006. The decrease in revenue primarily reflects a significant reduction in the company's sales of long distance products and cell phones. Selling, general and administrative expenses increased $1,416,088, or 411.0%, for the three months ended Dec. 31, 2007, compared to the corresponding period of 2006. This increase was largely attributable to the issuances of shares of common stock to officers, directors and consultants of the company, in exchange for services and subject to restricted stock agreements. Interest expense for the three months ended Dec. 31, 2007, of $159,020 was higher than the $31,795 for corresponding period of 2006, due primarily to higher than average outstanding receivables financing balances, the increase in short term funding, and a beneficial conversion feature of $100,000 related to the promissory note from BayHill Capital issued in November 2007. 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?2858 About Cognigen Networks Based in Mountlake Terrace, Washington, Cognigen Networks Inc. (OTC BB: CGNW.OB) markets and sells services and products through commission-based marketing agents who use the Internet as a platform to provide customers and subscribers with a variety of telecommunications and technology-based products and services. COLUMBIA AIRCRAFT: Files Disclosure Statement in Oregon Court ------------------------------------------------------------- Columbia Aircraft Manufacturing Corporation delivered to the United States Bankruptcy for the District of Oregon a Disclosure Statement dated Jan. 22, 2008, explaining its Chapter 11 Plan of Liquidation. According to the Plan, the Debtor will liquidate all of its remaining assets and distribute the net proceeds to creditors as required by the Bankruptcy Code. During the Chapter 11 case, the Debtor sold its operating assets to Cessna Aircraft Company. Cessna paid the Debtor $13,630,459 in cash at closing. >From the proceeds of the sale, the Debtor paid: -- $1,626,958 to Composite Technologies Research Malaysia as payment on the debtor-in-possession loan; -- $4,292,739 to the Government of Malaysia, Ministry of Finance (Incorporated) on its secured loan; -- $332,3029 to Battle Creek State Bank on its secured debt; $645,195.33 to 1st Source Bank on behalf of its secured debt; and -- 400,000 to Lima Development Inc. in payment of the agreed upon settlement amount. As of Dec. 30, 2007, the Debtor has $8,461,000 cash on hand and $275,590 account receivables. Treatment of Claims Under the Plan, holders of these unimpaired claims will be paid in full: -- administrative claims; -- other priority claims; -- 1st Source Bank; -- Battle Creek State Bank; -- Government of Malaysia, Minister of Finance (Incorporated); and -- Garmin International Inc. Each holder of a claim against E-VADE De-Icing System will have a claim against Cessna for any liability arising out of or related to the sales or installation of an E-VADE de-icing system on aircraft sold by the Debtor prior to December 4, 2007. Each Holder of Small Unsecured Claims will receive cash equal to 12.5% of the allowed amount of their claims, while the General Unsecured Claim holders will get, from time to time, pro rata distribution from the available cash in full. Equity Interests will be retained but the holder will not receive any distribution after all valid claims are paid. A full-text copy of Columbia's Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?2860 About Columbia Aircraft Based in Bend, Oregon, Columbia Aircraft Manufacturing Corporation -- http://www.flycolumbia.com/-- manufactures a variety of all- composite aircraft, including the Columbia 400 and employs approximately 440 people. The company filed for Chapter 11 protection on Sept. 24, 2007 (Bankr. D. Ore. Case No. 07-33850). Leon Simson, Esq., Albert N. Kennedy, Esq., and Timothy J. Conway, Esq., at Tonkon Torp LLP represent the Debtor in its restructuring efforts. James Ray Streinz, Esq., and Johnston A. Mitchell, Esq., at McEwen Gisvold LLP, serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and liabilities of $1 million to $100 million. The Debtor's list of its 20 largest unsecured creditors showed total aggregate claims of more than $50 million. COLUMBIA AIRCRAFT: Disclosure Statement Hearing Set For March 18 ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Oregon will hold a hearing March 18, 2008, at 10:30 a.m., at Courtroom #1, 1001 S.W. 5th Avenue, 7th floor in Portland Oregon, to consider the adequacy of Columbia Aircraft Manufacturing Corporation's Disclosure Statement describing its Chapter 11 Plan of Liquidation. All objections, if any, to the approval of the Disclosure Statement must be served on or before March 11, 2008. About Columbia Aircraft Based in Bend, Oregon, Columbia Aircraft Manufacturing Corporation -- http://www.flycolumbia.com/-- manufactures a variety of all- composite aircraft, including the Columbia 400 and employs approximately 440 people. The company filed for Chapter 11 protection on Sept. 24, 2007 (Bankr. D. Ore. Case No. 07-33850). Leon Simson, Esq., Albert N. Kennedy, Esq., and Timothy J. Conway, Esq., at Tonkon Torp LLP represent the Debtor in its restructuring efforts. James Ray Streinz, Esq., and Johnston A. Mitchell, Esq., at McEwen Gisvold LLP serve as counsel to the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed estimated assets and liabilities of $1 million to $100 million. The Debtor's list of its 20 largest unsecured creditors showed total aggregate claims of more than $50 million. CONSOL ENERGY: DBRS Confirms 'BB' Rating with Stable Trend ---------------------------------------------------------- DBRS confirmed the rating for CONSOL Energy Inc. at BB with a Stable trend. The Company’s business profile and financial profile are still commensurate with the assigned rating, despite the fact that its 2007 financial performance was slightly weaker than expected and its balance sheet is anticipated to weaken in the near term due to high capex spending. Although Consol’s earnings in 2007 were lower than in the same period last year, earnings are still above historical norms. Earnings were primarily impacted by (1) lower production volumes and high costs due to the roof collapse in the Buchanan mine (resulting in temporary closure since July 2007), and (2) higher labour, maintenance and supply costs. DBRS notes that the impact on earnings was partially offset by higher coal and gas prices. DBRS expects earnings to improve in the near to medium term. Volumes are expected to increase with the 2007 purchase of additional coal reserves via the acquisition of AMVEST Corporation and with the Buchanan mine restart (expected in March 2008). The financial impact of the roof collapse may be further reduced through additional potential insurance payments during 2008. Coal and gas prices are expected stay strong and even increase on the back of strong supply and demand fundamentals and as such, Consol should benefit from these prices with respect to its unpriced volumes in 2009 and 2010. In the near to medium term, profitability should be enhanced as greater efficiencies are realized from capex expenditures. The Company experienced negative free cash flows during 2007 due to high capex spending related to operation expansions and efficiency improvements. DBRS expects this trend to continue in the near term in light of the proposed capex program of $1 billion in 2008. To fund negative free cash flows, Consol will most likely raise additional debt; this may be tempered by the sale of non-core assets. DBRS notes that the increase in debt levels will still be in line with the rating. During 2007, Consol sold assets for a realized gain of $100 million. Consol has strong credit metrics (its debt-to-capital ratio is at 41%, cash flow-to-total debt at 0.56 and EBITDA interest coverage greater than 14 times at December 31, 2007). Despite this, DBRS is concerned that the Company has generated negative gross free cash flows during 2007 and is expected to continue to do so in the near term due to high capex requirements. In addition, there are concerns related to operational difficulties that Consol has experienced – for example, there have been significant issues related to the Buchanan mine in both 2007 and 2005. DBRS does expect that in the medium to long-term Consol will generate positive gross free cash flows as earnings grow and capex requirements moderate, once expansion plans are completed. Supporting the rating is Consol’s solid business profile as the third largest coal producer in the United States, behind Peabody Energy Corporation and Arch Coal Inc., with coal reserves sufficient for over 50 years of production at current rates. CROSS ATLANTIC: Bankruptcy Won't Affect Tamarack's Operations ------------------------------------------------------------- The bankruptcy filings of VPG Investments Inc. and Cross Atlantic Real Estate LLC, major stakeholders of Tamarack Resort LLC in Idaho, will not interfere with the daily operations of the resort, Matthew Frank at New West quotes Tamarack CEO Jean-Pierre Boespflug as saying. According to the report, VPG Investments has a 27% shares and Cross Atlantic has a 48% shares in the resort. Mr. Boespflug told New West that Tamarack failed to secure a loan from Societe Generale worth $118 million by Feb. 15, 2008, after the bank suffered a $7 billion loss related to a fraud. Also, banks are tightening credit standards all over the world, New West relates, citing Mr. Boespflug. He added that VPG Investments and Cross Atlantic tried to stave off a foreclosure by Credit Suisse Cayman Islands through filing separate bankruptcy petitions, Miami Herald reports. VPG Investments owes $262 million and Cross Atlantic owes an undisclosed amount to Credit Suisse. Both loans are secured by their stakes at Tamarack Resort. Without the bankruptcy filings, Credit Suisse will gain 75% interest in the resort and the power to sell it to "whoever it wants," Miami Herald quotes Mr. Boespflug as saying. Summaries of the bankruptcy petitions of VPG Investments and Cross Atlantic were released in the Feb. 19, 2008 issue of the Troubled Company Reporter. According to Miami Herald, Mr. Boespflug told the public in a statement last week that they are going through an "extraordinarily difficult" times but never talked about a possible bankruptcy filing. He revealed that the resort is trying to secure another loan to fund its development projects, Miami Herald adds. About Credit Suisse Credit Suisse -- http://www.credit-suisse.com/-- provides its clients with investment banking, private banking and asset management services worldwide. Credit Suisse offers advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as retail clients in Switzerland. Credit Suisse is active in over 50 countries and employs approximately 40,000 people. Credit Suisse's parent company, Credit Suisse Group, is a leading global financial services company headquartered in Zurich. Credit Suisse Group's registered shares are listed in Switzerland and, in the form of American Depositary Shares, in New York. About Tamarack Resort Tamarack Resort LLC -- http://www.tamarackidaho.com/-- is the first all-season resort to open in the U.S. in 24 years and has received national attention for its world-class mountain for skiing, hiking and mountain biking; Osprey Meadows, a Robert Trent Jones, Jr., signature golf course; and beautiful Lake Cascade, suitable for swimming, sailing, fishing, sea kayaking, and boating. A key element of the Tamarack community is The Club at Tamarack for homeowners, their families and guests. Nestled in Idaho's Payette River Mountains, Tamarack is a luxury boutique resort with a variety of lodging options all within walking distance of the four-season amenities. It opened in 2004 after Alfredo Miguel Afif and Jean-Pierre Boespflug took over a controversial and long-stalled ski resort project. Tamarack said in June 2006 that its managers can access up to $250 million from a senior credit facility arranged by Credit Suisse. Credit Suisse raised the $250 million credit facility through a broad syndication to institutional investors. About VPG Investments Beverly Hills, California-based VPG Investments Inc. owns 27% of Tamarach Resorts LLC. It filed for chapter 11 protection on Feb. 15, 2008 (Bankr. D. Idaho Case No. 08-00253). Joseph M. Meier, Esq., at Cosho Humphrey LLP serves as the Debtor's counsel. It listed assets of $29,214,653 and debts of $301,407,518 when it filed for bankruptcy. Alfredo Miguel Afif, a Mexican businessman, owns VP Investments. About Cross Atlantic Tamarack, Idaho-based Cross Atlantic Real Estate LLC owns 48% stake in and manages ski resort & land developer, Tamarack Resorts LLC. It filed for chapter 11 protection on Feb. 15, 2008 (Bankr. D. Idaho Case No. 08-00249). Thomas James Angstman, Esq., represents the Debtor in its restructuring efforts. It disclosed total assets of $44,190,000 and total debts of $0 when it filed for bankruptcy. Jean-Pierre Boespflug owns Cross Atlantic Real Estate. DANA CORPORATION: Inks $2,080,000,000 Exit Facility Agreements -------------------------------------------------------------- Dana Holding Corporation, successor to Dana Corporation, said in a filing with the U.S. Securities and Exchange Commission that on Jan. 31, 2008, the effective date of the Third Amended Joint and Consolidated Plan of Reorganization of Dana and its debtor- subsidiaries, the company entered into exit facility agreements with Citicorp USA, Inc., Lehman Brothers Inc., and Barclays Capital, for post-bankruptcy financing of up to $2,080,000,000. The exit facility consists of: Loan Type Loan Amount --------- -------------- Term Loan $1,430,000,000 Revolving Loan 650,000,000 According to Marc S. Levin, Dana's general counsel and secretary, the company has drawn $1,350,000,000 from the Term Facility on the Effective Date, and $80,000,000 on Feb. 1, 2008. Mr. Levin says there were no borrowings under the Revolving Facility but $200,000,000 was utilized for existing letters of credit. Term Loan Agreement Amounts outstanding under the Term Loan will be payable in equal quarterly amounts on the last day of each fiscal quarter at a rate of 1% per annum of the original principal amount of the Term Facility advances prior to Jan. 31, 2014, with the remaining balance due in equal quarterly installments in the final year of the Term Facility and final maturity on Jan. 31, 2015. Certain term loan prepayments are subject to a prepayment call premium before Jan. 31, 2010. The Term Loan will bear interest at a floating rate based on, at Dana's option, the base rate or LIBOR rate plus a margin of 2.75% in the case of base rate loans or 3.75% in the case of LIBOR rate loans. Under the Term Facility, Dana is required to maintain compliance with financial covenants measured on the last day of each fiscal quarter: (a) commencing as of Dec. 31, 2008, a maximum leverage ratio of not greater than 3.10 to 1.00 at Dec. 31, 2008, decreasing in steps to 2.25 to 1.00 as of June 30, 2013, based on the ratio of consolidated funded debt to the previous 12-month consolidated EBITDA; (b) commencing as of Dec. 31, 2008, minimum interest coverage ratio of not less than 4.50 to 1.00 based on the previous 12-month consolidated EBITDA to consolidated interest expense for that period; and (c) a minimum EBITDA of $211,000,000 for the six months ending June 30, 2008, and of $341,000,000 for the nine months ending Sept. 30, 2008. The Term Facility Security Agreement grants a second priority lien on accounts receivable and inventory and a first priority lien on substantially all of Dana and the guarantors' remaining assets, including a pledge of 65% of the stock of each foreign subsidiary owned by the company and each guarantor, as of the Effective Date. Revolving Loan Agreement Amounts outstanding under the Revolving Loan Agreement, on the other hand, may be borrowed, repaid and reborrowed with the final payment due and payable on Jan. 31, 2013. The Revolving Loan will bear interest at a floating rate based on, at Dana's option, the base rate or LIBOR rate, plus a margin based on the undrawn amounts available under the Revolving Facility: &n