/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080227.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, February 27, 2008, Vol. 12, No. 49 Headlines 4S DEVELOPMENT: Case Summary & Three Largest Unsecured Creditors A & A WASTE: Case Summary & 27 Largest Unsecured Creditors ALL AMERICAN: Miami Wants Panel's Disclosure Statement Amended ALLIANCE IMAGING: December 31 Balance Sheet Upside-Down by $17MM ALPHA MARATHON: MSI Confirms Filing of Assignment in Bankruptcy AMBAC ASSURANCE: S&P Keeps 'AAA' Rating on Negative Watch AMERICAN AXLE: UAW Labor Contract Ends Sparking Workers' Strike AMERICAN LAFRANCE: Court Approves Procedures for Asset Sale AMERICAN LAFRANCE: Obtains Access to $42MM of DIP Financing AMERICAN SOIL: Dec. 31 Balance Sheet Upside-Down by $19,000 AMERIQUEST MORTGAGE: Fitch Chips Ratings of $8.1B Certificates AMERISTAR CASINOS: Moody's Holds Ba3 Corporate Family Rating ASIA GLOBAL: CMP Unit Has Until February 29 to Repay $875K Loans ASARCO LLC: Wants Agreements with U.S. Government, et al. Approved ASARCO LLC: Court Okays Pacts Allowing $27MM in Tar Creek Claims ASARCO LLC: Court Extends Action Removal Period to June 13 ASARCO LLC: Grupo Mexico Says Ongoing Business More Profitable ASARCO LLC: Objects to $148,000,000 Hylebos Waterway Claims ASSET ACCEPTANCE: Lenders Grant Temporary Waiver Thru March 17 ASSET BACKED: Losses Prompt S&P to Cut Ratings on Three Classes ATHERTON-NEWPORT: U.S. Trustee Appoints 7-Member Creditors Panel AVENTINE HILL: Moody's Junks Ratings on Five Classes of Notes AVISTA CORP: Reports $14.1 Mil. Earnings for 2007 Fourth Quarter BFC SILVERTON: Moody's Junks Rating on $75 Mil. Notes From 'A2' BSABS AC: Moody's Puts 40 Tranches on Review for Possible Cuts BUILDERS FIRSTSOURCE: Incurs $20.4MM Net Loss for 2007 Fourth Qtr. CAIRN MEZZ: Six Classes of Notes Acquire Moody's Junks Ratings CAPRI CONDOS: Owes Red Mountain Bank $16.3 Mil. Construction Loan CARIBE MEDIA: High Debt Leverage Cues S&P to Retain 'B' Rating CBA COMMERCIAL: Moody's Pares Ratings on $1.9 Mil. Notes to 'B1' CHIQUITA BRANDS: S&P Assigns 'CCC' Rating on $200M Senior Notes CHRYSLER LLC: Streamlines Production; Won't Sell Car Clones CIFG GUARANTY: S&P Holds 'AAA' Rating; Retains Negative Outlook CIMAREX ENERGY: Earns $130.0 Mil. for Fourth Quarter Ended Dec. 31 CLEAR CHANNEL: Wachovia's Lawsuit May Derail Amended TV Sale Deal COMMERCIAL MORTGAGE: Moody's Affirms Junk Ratings on Three Classes CONSECO INC: Expects to File Annual Financial Report on March 17 CONSECO INC: S&P's Ratings Unaffected by Restatement of Earnings CORNERSTONE MINISTRIES: Sec. 341 Creditors Meeting on March 18 CORNERSTONE MINISTRIES: Can Hire BMC Group as Claims Agent COUNTRYWIDE FINANCIAL: BofA to Inherit Mortgage Crisis Lawsuits CREDIT SUISSE: Moody's Junks Rating on $47.9 Mil. Notes From 'B3' CWABS ASSET-BACKED: Two Trust Notes Obtain S&P's Low-B Ratings DHFHAH LLC: Case Summary & 40 Largest Unsecured Creditors DOLE FOOD: Moody's Corp. Cuts Rating to 'B3' on Weak Performance EASTMAN KODAK: Fitch Revises Outlook to Stable from Negative EATON VANCE: Moody's Takes Negative Rating Actions on Notes ESPRE SOLUTIONS: Posts $3.2M Net Loss in Qtr. Ended Dec. 31 EYE CARE: Moody's Lifts Corporate Family Rating to 'B1' From 'B2' FINANCIAL GUARANTY: S&P Lowers Financial Strength Rating to 'A' FORD MOTOR: Nudges Woodhaven Workers to Accept Buyout Options FOREST OIL: Commences $750 Mil. Exchange Offer for 7.25% Sr. Notes FORTUNOFF: May Pay $2,250,000 Break-Up Fee for H Acquisition FORTUNOFF: Togut Segal Replaces Skadden Arps as Bankruptcy Counsel FRIEDMAN'S INC: Court Approves Auction of Store Leases on March 6 GE COMMERCIAL: Stable Performance Cues Fitch to Affirm Ratings GENENE PEKO: Case Summary & 10 Largest Unsecured Creditors GENERAL MOTORS: Supplier Workers Strike Has No Impact on Assembly GETTY IMAGES: To be Bought by Hellman & Friedman in $2.4 Bil. Deal GETTY IMAGES: $2.4 Mil. Hellman Deal Prompts Moody's Rating Review GETTY IMAGES: S&P Cuts Rating on $2.4 Bil. Hellman & Friedman Deal GRAPHIC PACKAGING: Reports $0.7 Mil. Net Loss for 2007 Fourth Qtr. GREENBRIER COS: Unit Applies for Receivership in Nova Scotia Court GS MORTGAGE: Fitch Affirms Low-B Ratings on Six Cert. Classes GULF STREAM-ATLANTIC: Eight Note Classes Get Moody's Junk Ratings HORNBECK OFFSHORE: Ups Credit Facility Borrowing Base to $250 Mil. HOST HOTELS: Earns $294 Mil. for 2007 Fourth Quarter Ended Dec. 31 HVHC INC: Moody's Changes Outlook to Negative; Holds All Ratings IMPLANT SCIENCES: Posts $5 Mil. Net Loss in Qtr. Ended December 31 IMPLANT SCIENCES: To Sell Semiconductor Subsidiary-Core Systems INSITE VISION: Completes $60 Mil. Placement of Promissory Notes INTERSTATE BAKERIES: To Reject CBAs with Two Local BCTGM Unions JEFFREY GIBSON: Voluntary Chapter 11 Case Summary JOHN JACOBS: Case Summary & 17 Largest Unsecured Creditors JP MORGAN: Moody's Downgrades Ratings on Seven Note Classes KATCO INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors KIMBALL HILL: Amends Limited Duration Waiver Agreement KLEROS PREFERRED: Credit Quality Erosion Cues Moody's Rating Cuts KNIGHT INC: Bares Proforma Financials in Relation to MidCon Sale LA STRADA: Voluntary Chapter 11 Case Summary LAND O'LAKES: Earns $5.5 Million in Quarter Ended December 31 LAWRENCE SALANDER: Seeks Employment as Gallery Auction Manager LB-UBS COMMERCIAL: Three Classes Obtain Moody's Rating Downgrades LEFT BEHIND: Dec. 31 Balance Sheet Upside-Down by $1.8M LIBERTY TAX III: Dec. 31 Balance Sheet Upside-Down by $10.5 Mil. LODGENET INTERACTIVE: Incurs $19.7MM Net Loss For 2007 Fourth Qtr. MAXJET AIRWAYS: Files Schedules of Assets and Liabilities MANUFACTURED HOUSING: S&P Rating on Class M-1 Cert. Tumbles to 'D' MARIA ELENA BANKS: Case Summary & Two Largest Unsecured Creditors MBIA INSURANCE: S&P Assigns Negative Outlook on 'AAA' Fin'l Rating MBIA INSURANCE: Moody's Holds 'AAA' Rating; Gives Negative Outlook METRO ONE: To Restate Sept. 30 10-Q to Correct Accounting Errors MOHAWK VALLEY: Files Ch. 11 to Complete Mortgage Loan Refinancing MURRIETA COMMONS: Case Summary & Seven Largest Unsecured Creditors NEILL HOMES: Voluntary Chapter 11 Case Summary NUTRITION SOURCE: Case Summary & 20 Largest Unsecured Creditors PACIFIC LUMBER: Court Wants Joint Disclosure Statement Filed PACIFIC LUMBER: BofA & Caterpillar Balk at Disclosure Statement PACIFIC LUMBER: State Officials Want Public Trust Preserved RADNET INC: Adds $65 Mil. to Credit Facility for Expansion of Biz RADNET MANAGEMENT: S&P Junks Issue-level Rating on $35 Mil. Add-on RADNOR HOLDINGS: Files Amended Chapter 11 Liquidation Plan RADNOR HOLDINGS: Plan Solicitation Period Extended to April 21 RALI SERIES: High Delinquencies Prompts S&P's Rating Cuts to 'CCC' RAMP 2005: Moody's Reviews Ratings on 58 Tranches for Likely Cuts RONALD ROSENBLATT: Case Summary & 19 Largest Unsecured Creditors ROSETEL SYSTEM: Case Summary & 20 Largest Unsecured Creditors RSC HOLDINGS: December 31 Balance Sheet Upside-Down by $44,000 SALANDER-O'REILLY: Owner Seeks Employment as Auction Manager SECURITY CAPITAL: S&P Cuts Fin'l Ratings on Operating Units to A- SENTRA CONSULTING: Dec. 31 Balance Sheet Upside-Down by $3,414,627 SIGNATURE MEDICAL: Case Summary & Largest Unsecured Creditor SHORES OF PANAMA: Case Summary & 20 Largest Unsecured Creditors SPATIALIGHT: Voluntary Chapter 7 Case Summary STRUCTURED ASSET: S&P Rating on Class M3 Tumbles to 'D' From 'CCC' THEATER XTREME: Dec. 31 Balance Sheet Upside-Down by $3,289,121 TRANQUILECHEE: Case Summary & Largest Unsecured Creditor TRENTONWORKS LTD: Applies for Receivership in Nova Scotia Court TRINITY INDUSTRIES: Earns $78.3 Million for 2007 Fourth Quarter TRM CORPORATION: Appoints Ethan S. Buyon to Board of Directors UNITEDHEALTH GROUP: Completes $2.6 Bil. Merger with Sierra Health VALENCE TECH: Inks Agreement to Sell $1 Million Common Shares VALLEJO CITY: Labor Talks Fail; Administrators Suggest Bankruptcy VISTEON CORPORATION: Steven Hamp to Rejoin Board of Directors VOIP INC: In Default of May 2007 Settlement Agreement with MCI VONAGE HOLDING: Is Likely to Be Challenged by T-Mobile Entry WACHOVIA BANK: S&P Maintains 'BB' Rating on Class K Certificates WELLMAN INC: Gets Interim Court Nod to Obtain $225MM DIP Financing WELLMAN INC: Moody's Slashes Rating to 'Ca' on Chapter 11 Filing WELLMAN INC: S&P's Rating Tumbles to 'D' After Bankruptcy Filing WESCO AIRCRAFT: Moody's Maintains 'B2' Corporate Family Rating XIOM CORP: Dec. 31 Balance Sheet Upside-Down by $978,877 * U.S. CMBS Rating Upgrades To Prevail in 2008, Moody's Reports * Moody's Advises How to Secure Top Ratings For Muni Bond Insurers * S&P Slashes Ratings on 53 Tranches From Nine Cash Flows and CDOs * S&P Cuts 468 Classes' Ratings From 216 NIMS on Radian Rating Cut * Cole Schotz Adds Five Bankruptcy Lawyers and One Associate * Stephanie Wickouski Helms Drinker Biddle's Corporate Trust Team * Wilkerson and Associates Opens New Online Resource for Clients * Home Foreclosures Rise 90% in January Compared to Last Year * White House Criticizes Proposed Bill on Foreclosure Prevention * Lenders Tightening Access to Home Equity Lines of Credit * FDIC Lures Retirees to Help Sort Out Upcoming Bank Failures * Upcoming Meetings, Conferences and Seminars ********* 4S DEVELOPMENT: Case Summary & Three Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: 4S Development, Ltd., L.L.L.P. P.O. Box 416 Hayden, CO 81639 Bankruptcy Case No.: 08-12162 Chapter 11 Petition Date: February 26, 2008 Court: District of Colorado (Denver) Judge: A. Bruce Campbell Debtor's Counsel: Philipp C. Theune, Esq. (philipp@theunelaw.com) 1600 Stout Street, 11th Floor Denver, CO 80202-3131 Tel: (303) 832-1150 Fax: (303) 845-6934 http://www.theunelaw.com/ Total Assets: $75,825,498 Total Debts: $5,684,487 Debtor's Thee Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alpine Bank Bank loan $145,000 400 7th Street South Rifle, CO 81650 Steamboat, Kitchen & Bath, Bank loan $19,350 L.L.L.P. PO Box 575 Hayden, CO 81639 Johnson Ranch, L.L.L.P. Trade debt $19,000 P.O. Box 881870 Steamboat Springs, CO 80488 A & A WASTE: Case Summary & 27 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: A & A Waste Management, Inc. P.O. Box 1253 Ceiba, PR 00735 Bankruptcy Case No.: 08-00974 Chapter 11 Petition Date: February 22, 2008 Court: District of Puerto Rico (Old San Juan) Judge: Enrique S. Lamoutte Inclan Debtor's Counsel: Francisco J. Ramos Gonzalez, Esq. (fjramos@coqui.net) P.O. Box 371 Puerto Real Fajardo, PR 00740 Tel: (787) 860-1719 Total Assets: $1,978,004 Total Debts: $1,836,161 Consolidated Debtor's List of 27 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Waste Management Corp. landfill debt $233,822 P.O. Box 71561 San Juan, PR 00936-8661 CitiCapital truck lease $223,386 CitiBank Dr. EDIF Norte, Suite 202 Rio Piedras, PR 00926 Banco Popular DE PR credit line $97,828 P.O. Box 362708 San Juan, PR 00936 Wells Fargo credit line $85,586 Municipio De Juncos landfill debt $81,739 BFI Catano Landfill landfill debt $44,783 Universal Insurance Company insurance claim $22,263 Municipality of Ceiba volume of business $17,325 Crim personal property $13,188 Kevane Paterson Soto services rendered $12,044 & Passarell LM Waste Service Inc. landfill $10,385 Atlantic Industrial Supply trade debt $9,195 Inc. Treasury Department of PR income tax $8,683 State Insurance Fund compensation $4,176 Platinum Plus credit card $3,538 Municipio De Vega Baja landfill $2,750 AT&T trade debt $2,503 ALL AMERICAN: Miami Wants Panel's Disclosure Statement Amended -------------------------------------------------------------- The Miami-Dade County Tax Collector asks the U.S. Bankruptcy Court for the Southern District of Florida to deny approval of the disclosure statement explaining the Chapter 11 plan of liquidation dated Jan. 7, 2008, filed by the Official Committee of Unsecured Creditors for All American Semiconductor Inc. and its debtor- affiliates. Miami-Dade County tells the Court that its claim would not come within the stated provisions under the Committee's disclosure statement. Moreover, the treatment being given priority tax claims is not appropriate with respect to first priority secured tax liens, the County points out. The County holds a claim of $29,468 in personal property taxes, including statutory interest which start to accrue on April, 1, 2008, as shown in the amended claim it filed on Jan. 4, 2008. The payment of these taxes is secured by a first priority lien. Accordingly, Miami-Dade asks the Court to direct the Committee to amend its Disclosure Statement and Plan of Liquidation. As reported in the Troubled Company Reporter on Feb. 4, 2008, the Court canceled the hearing set for Feb. 13, 2008, to consider the adequacy of the Committee's proposed disclosure statement. The Court has set no hearing date to consider approval of the Committee's proposed disclosure statement. As reported in the Troubled Company Reporter on Jan. 10, 2008, the Committee delivered to the Court a plan of liquidation and a disclosure statement explaining that plan. Overview of the Plan The proposed Plan contemplates the liquidation of all of the Debtor's assets and to investigate and prosecution of all litigation claims of the estate. The Plan intends to maximize the value of recoveries to all valid creditors of the Debtors on an equitable basis. The Committee says it will select Kenneth A. Welt as liquidating trustee who is expected to liquidate and distribute the proceeds in accordance with the Plan. Treatment of Claims Under the Plan, these claims are unimpaired and will be paid in full: -- Super-Priority Claims totaling $8,526,060; -- Administrative Claims totaling $3,227,818; -- Priority Tax Claims totaling $321,443; and -- Priority Claims totaling $468,580. Holders of Allowed General Unsecured Claims, totaling $34,205,920, will receive at least 32.93% of their claims plus a pro rata share of the initial distribution amount. Holders of Allowed Lender Deficiency Claims, totaling $9,361,650, is also expected to recover at least 32.93% of their claims. Equity Interests will be cancelled on the effective date and holders will not receive anything under the Plan. A full-text copy of the Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=080109210958 A full-text copy of the Chapter 11 Plan of Liquidation is available for a fee at: http://www.researcharchives.com/bin/download?id=080109211335 Based in Miami, Florida, All American Semiconductor Inc. (Pink Sheets: SEMI.PK) -- http://www.allamerican.com/-- distributes electronic components manufactured by others. The company distributes a full range of semiconductors including transistors, diodes, memory devices, microprocessors, microcontrollers, other integrated circuits, active matrix displays and various board- level products. All American also distributes passive components such as capacitors, resistors and inductors; and electromechanical products such as power supplies, cable, switches, connectors, filters and sockets. The company also offers complete solutions for flat panel display products. In total, the company offers approximately 40,000 products produced by approximately 60 manufacturers. The company has 36 strategic locations throughout North America and Mexico, as well as operations in China and Western Europe. The company and its debtor-affiliates filed for Chapter 11 protection on April 25, 2007 (Bankr. S.D. Fla. Lead Case No. 07-12963). Craig D. Hansen, Esq., Tina M. Talarchyk, Esq., and Stephen D. Lerner, Esq., at Squire, Sanders & Dempsey L.L.P., represent the Debtors. Mesirow Financial Consulting, LLC serve as financial advisor to the Committee. William Hawkins, Esq., at Loeb & Loeb, LLP, is the Official Committee of Unsecured Creditors general bankruptcy counsel. Jerry M. Markowitz, Esq., at Markowitz, Davis, Ringel & Trusty, P.A., is the Committee's local counsel. As of Feb. 28, 2007, the Debtors' balance sheet showed total assets of $117,634,000 and total debts of $106,024,000. ALLIANCE IMAGING: December 31 Balance Sheet Upside-Down by $17MM ---------------------------------------------------------------- Alliance Imaging Inc.'s balance sheet at Dec. 31, 2007, showed total assets of $664.53 million and total liabilities of $681.50 million, resulting to total stockholders' deficit of $16.97 million. The company reported results for the fourth quarter and year ended Dec. 31, 2007. The company's net income was $1.84 million in fourth quarter compared to net income of $3.93 million for the same period in the previous year. Full year 2007 net income was $16.23 million compared to net income of $18.63 million in 2006. Cash flows provided by operating activities were $37.7 million in the fourth quarter of 2007 compared to $38.7 million in the corresponding quarter of 2006, and totaled $118 million and $115.8 million for the full year of 2007 and 2006. Cash capital expenditures in the fourth quarter of 2007 were $20.1 million compared to $18.5 million in the fourth quarter of 2006, and were $65.3 million and $75 million for the full year of 2007 and 2006. Alliance opened seven new fixed-site imaging centers and one radiation therapy center in the fourth quarter of 2007 and opened a total of 16 new fixed-site imaging centers and two radiation therapy centers in 2007. Alliance's net debt, defined as total long-term debt, including current maturities, less cash and cash equivalents, totaled $549.9 million at Dec. 31, 2007, and $513 million at Dec. 31, 2006. Cash and cash equivalents increased to $120.9 million at Dec. 31, 2007 from $16.4 million at Dec. 31, 2006. The company's total long-term debt, including current maturities, increased to $670.8 million as of Dec. 31, 2007, from $529.4 million as of Dec. 31, 2006. In the fourth quarter of 2007, the company completed a $150 million senior subordinated note offering. Excluding 2007 investments in acquisitions and assuming that these funds would have been otherwise available for debt reduction, the company's increase in cash and cash equivalents, net of the increase in long-term debt, totaled $54.3 million for the full year 2007. The company's decrease in long term debt, net of the increase in cash and cash equivalents, totaled $53.2 million for the full year 2006. "Alliance has delivered performance above the high end of the company's full year guidance ranges, despite a very challenging environment," Paul S. Viviano, chairman of the board and chief executive officer, stated. "We opened 16 fixed-site imaging centers and our second de novo radiation therapy center in 2007, and completed the acquisition of seven fixed-site imaging centers from New England Health Enterprises and eight radiation therapy centers from Bethesda Resources in the fourth quarter of 2007." "In addition, we successfully raised $150 million in a senior subordinated note offering in the fourth quarter of 2007, which will provide liquidity for intended acquisitions in the future," Mr. Viviano added. "Alliance is well positioned for the future and we will continue to invest capital in a highly disciplined manner, which is expected to continue to positively impact our performance." About Alliance Imaging Inc. Based in Anaheim, California, Alliance Imaging Inc. (NYSE: AIQ) -- http://www.allianceimaging.com/-- provides shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of diagnostic imaging systems deployed. Alliance provides imaging and therapeutic services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging centers. The company had 494 diagnostic imaging systems, including 326 MRI systems and 77 PET or PET/CT systems, and served over 1,000 clients in 43 states at March 31, 2007. Of these 494 diagnostic imaging systems, 72 were located in fixed-sites, which includes systems installed in hospitals or other buildings on or near hospital campuses, medical groups' offices, or medical buildings and retail sites. * * * As reported in the Troubled Company Reporter on Nov. 30, 2007, Moody's Investors Service affirmed the company's corporate family and probability of default ratings at B1. The outlook is stable. ALPHA MARATHON: MSI Confirms Filing of Assignment in Bankruptcy --------------------------------------------------------------- MSI Spergel Inc., as trustee, said Alpha Marathon Technologies Group Inc. filed for bankruptcy in January, Canadian Plastics reports. Joseph Albert of MSI Spergel stated in an interview that Alpha Marathon's bankruptcy is the result of the surge in Canadian dollar, CanPlastics says. He said that the Debtor's 2007 sales missed its target and was lower than the prior years, CanPlastics relates. According to Mr. Albert, Alpha Marathon was unable to sustain its overhead expenses and failed to "adapt to the reduced sales," CanPlastics reveals. Mr. Albert said that the company is trying to sell its some of its assets in order to obtain funds to continue operation of its main business, CanPlastics says. Based on court filings, Alpha Marathon filed an Assignment in Bankruptcy on Feb. 8, 2008, and its creditors met on Feb. 15, 2008, CanPlastics reports. The Debtor had at least $2.0 million in assets and at least $3.8 million in debts, including about $2.2 million owed to unsecured creditors, the report adds. Among the Debtor's secured creditors are Bank of Montreal, Business Development Bank, Canada Revenue Agency, and Alpha Marathon ex-president, Robert Kazimowicz. Mr. Albert told CanPlastics that unsecured creditors may not get anything back. Woodbridge, Ontario-based Alpha Marathon Technologies Group Inc. -- http://www.alphamarathon.com/-- supplies specialty plastic equipment, including blown film and protective packaging industry for more than three decades. AMBAC ASSURANCE: S&P Keeps 'AAA' Rating on Negative Watch --------------------------------------------------------- Standard & Poor's Ratings Services took rating actions on several monoline bond insurers following additional stress tests with respect to their domestic nonprime mortgage exposure. -- The 'AAA' financial strength rating on Ambac Assurance Corp. was affirmed and remains on CreditWatch with negative implications; and -- The 'AAA' financial strength rating on MBIA Insurance Corp. was removed from CreditWatch and a negative outlook was assigned; -- The financial strength rating on Financial Guaranty Insurance Co. was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications; -- The financial strength ratings on XL Capital Assurance Inc. and XL Financial Assurance Ltd. were lowered to 'A-' from 'AAA' and remain on CreditWatch with negative implications; -- The 'AAA' financial strength ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. were affirmed and retain a negative outlook. The affirmation of S&P's 'AAA' financial strength and financial enhancement ratings on Ambac Assurance Corp. and S&P's 'AA' rating of Anchorage Finance Sub-Trusts I-IV and Dutch Harbor Finance Sub- Trusts I-IV (committed capital facilities supported by, and for the benefit of, Ambac) and holding company Ambac Financial Group Inc. reflects S&P's assessment of the scope of Ambac's capital- raising plans and the company's ability to implement those plans. S&P left the ratings on CreditWatch with negative implications to reflect uncertainty surrounding the risk profile and capitalization plans for the reported new corporate structure being contemplated by the holding company. The removal from CreditWatch of, and assignment of negative outlooks on, MBIA Insurance Corp., MBIA Inc., and North Castle Custodial Trusts I-VIII (a committed capital facility supported by, and for the benefit of, MBIA) reflect MBIA's success in accessing $2.6 billion of additional claims-paying resources, which, in S&P's view, is a strong statement of management's ability to address the concerns relating to the capital adequacy of the company. The downgrades on FGIC, FGIC Corp., and Grand Central Capital Trusts I-VI (a committed capital facility supported by, and for the benefit of, FGIC) reflect S&P's current assessment of potential losses, which is higher than previous estimates. The downgrades on XLCA, XLFA, XL Capital Assurance (UK) Ltd., and Twin Reefs Pass-Through Trust (a committed capital facility supported by, and for the benefit of, XLFA) reflect S&P's assessment that the company's evolving capital plan has meaningful execution and timing risk. The affirmation of S&P's 'AAA' financial strength rating on CIFG reflects the contribution of $1.5 billion in capital resources to CIFG Holding by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne to support CIFG's claims-paying resources. CIFG's outlook was changed to negative from stable in June 2007 for reasons unconnected to its subprime exposure. Rather, S&P looked at the effectiveness and processes of the company's board, appropriate succession planning, and the degree of long-term support to be provided by its parent Natixis S.A. The assignment of the negative outlook also reflected S&P's views relating to CIFG's below-average earnings and return on earnings. Nevertheless, S&P considers the $1.5 billion capital contribution to be an important statement by CNCE and BFBP about their near- term commitment to the financial guaranty industry and CIFG. Ambac expects to consummate a $3 billion financing deal offered by various banks, the Troubled Company Reporter reported on Feb. 25, 2008, citing Carrick Mollenkamp at The Wall Street Journal. People familiar with the matter, however, have cautioned 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, WSJ said. 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 said 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. On Feb. 15, Ambac rejected an offer from billionaire-investor Warren Buffett to reinsure the company's municipal bond portfolios as well as those of MBIA Inc., and Financial Guaranty Insurance Corporation, valued at $800 million in the aggregate. An Ambac representative said acceptance of the offer would mean a sign of desperation on the company's part. 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 AXLE: UAW Labor Contract Ends Sparking Workers' Strike --------------------------------------------------------------- United Auto Workers union president Ron Gettelfinger and Vice President James Settles disclosed that members at American Axle and Manufacturing Inc. began an unfair labor practices strike at 12:01 a.m. on Feb. 26, 2008, following expiration of a four-year master labor agreement with the company. The master agreement expired at 11:59 p.m., Feb. 25, 2008. The master agreement covered approximately 3,650 associates at five facilities in Michigan and New York. Talks broke off Monday with major issues unresolved. The company is demanding wage reductions of up to $14 an hour as well as elimination of future retiree health care and defined benefit pensions for active workers. Pursuant to the master agreement with the UAW, AAM's all-in labor cost is well in excess of $70 per hour. This is approximately three times the market rate of the auto supplier's peers and competitors in the United States. AAM's primary objective in the current negotiations with the UAW is to achieve a market competitive labor cost structure in the United States. The market competitive labor cost structure in the United States automotive supply industry is in the range of $20 to $30 per hour all-in cost. In formal and informal discussions that have occurred for more than two years, AAM management proposed labor rates and other contract terms that many UAW-represented automotive suppliers already have in place. This includes AAM's principal driveline competitors in the United States: Dana and the in-house axle- making operations of Ford and Chrysler. To date, AAM has been unable to attain these structural changes and continues to work under an uncompetitive OEM-style labor agreement with the UAW, even though AAM is not, and never has been, an OEM. AAM is a Tier 1, Tier 2 and Tier 3 supplier to the automotive industry. Since the company was founded in 1994, AAM has invested more than $3 billion in plant facilities, equipment and training for our associates to create a safe, modern, efficient and productive work environment at our original U.S. locations. If a market competitive labor cost structure is attained, AAM plans to continue to invest in these locations in the future. Without the necessary structural changes, AAM's ability to compete for future business or retain existing business at these locations is in immediate jeopardy, the company said. "It is unfortunate that a market competitive labor agreement for AAM's original U.S. locations could not be reached," AAM Co-Founder, Chairman and CEO Richard E. Dauch, said. "All of the changes we have proposed have been accepted by the UAW in agreements with our competitors in the United States. I have no idea why AAM is being singled out for a different set of economic conditions. We look forward to continued negotiations with the UAW to resolve these most pressing labor and economic matters." "The UAW has a proven record of working with companies to improve their competitive position and secure jobs," UAW President Ron Gettelfinger, said. "But cooperation does not mean capitulation. Our members cannot be expected to make the extreme sacrifices American Axle is asking for with nothing in return." Despite demanding that workers accept substantial reductions in benefits, the company has failed to provide the union with the information it needs to evaluate the merits of its proposals. This unfair labor practice forced the UAW to implement a work stoppage. The union has made comprehensive proposals that would reduce AAM's labor costs significantly and grant it operational flexibility. AAM, however, continues to move work to Mexico if the union does not agree to its demands. "We've been negotiating in good faith for some time now," said Mr. Settles, who directs the union's American Axle and Manufacturing Department. "We want a settlement that works for everybody. But the company does not appear to be on the same page." Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on Nov. 27, 2007, Moody's Investors Service affirmed American Axle & Manufacturing Holdings, Inc.'s Corporate Family rating of Ba3 as well its senior unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s notes and term loan. At the same time, the rating agency revised the rating outlook to stable from negative and renewed the Speculative Grade Liquidity rating of SGL-1. AMERICAN LAFRANCE: Court Approves Procedures for Asset Sale ----------------------------------------------------------- Judge Brendan Linehan Shannon of the U.S. Bankruptcy Court for the District of Delaware approved on February 25, 2008, bid procedures for the sale of American LaFrance LLC in the event that the company's plan of reorganization is not confirmed. American LaFrance previously noted that its main goal is to confirm a plan of reorganization. The company further noted that if its proposed plan is not confirmed, it aims to pursue the sale of substantially all of its assets. Qualified bidders are required to deliver written copies of its bid no later than April 14, 2008. If more than one bid is received, an auction will be held on April 18, 2008. Patriarch Partners Agency Services, LLC, is entitled to make a credit bid at the Auction, the Court ruled. Patriarch acts as agent for American LaFrance's DIP Lenders. In connection with the Sale Order, the Court has also established April 9 and 18, 2008 for hearings on plan confirmation. The Court has scheduled a hearing on April 28 to consider American LaFrance's request to sell all of its assets in the event its proposed Chapter 11 plan is not confirmed. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Obtains Access to $42MM of DIP Financing ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware granted on February 26, 2008, final approval of American LaFrance LLC's debtor-in-possession financing, which authorizes the company to borrow $42 million from its prepetition lenders. The company's prepetition lenders are ZOHAR CDO 2003-1, Limited, ZOHAR II 2005-1, Limited, and ZOHAR III. Patriarch Partners Agency Services, LLC, acts as agent for the lenders. The Lenders are granted first priority claims, priming liens and the protections of good faith credit providers under Section 364 of the Bankruptcy Code to secure the DIP Financing. The Lenders only consent to a maximum Carve-Out for the company's professionals of up to $950,000 and for the professionals of the Official Committee of Unsecured Creditors of up to $430,000. The Court also authorized American LaFrance to use the cash collateral of its prepetition lenders in accordance with a prepared budget. Judge Shannon previously authorized American LaFrance to borrow up to $10,000,000 of DIP Financing, on an interim basis, and granted broad liens and superpriority claims to secure the interim financing and the Debtor's use of cash collateral. The Creditors Committee had asked the Court to reconsider the Interim DIP Order. The Creditors Committee advised the Court that it has begun investigating (i) the Debtor's assets, liabilities and operations, (ii) the Debtor's cash needs and the existence of any need for postpetition financing, and (iii) the lenders' prepetition security interests in and liens upon the Debtor's assets. The Committee said funds managed by Patriarch Partners Agency Services own 100% of the membership interests in the Debtor. Patriarch Partners Agency also heads a group of prepetition and postpetition lenders. In addition, Patriarch Partners Management Group, LLC, employs the Debtor's chief executive officer and supplies his services, together with the services of several other executives, to the Debtor under a staffing agreement. The Creditors Committee pointed out that Patriarch's "pervasive control" over the Debtor serves to heighten the Committee's concerns regarding good faith findings made by the Court on an interim basis in the Interim DIP Order. The Committee said the Debtor's Chapter 11 case is "most unusual, and disturbing." According to the Committee, the Debtor commenced the Chapter 11 case not for the purpose of reorganizing, but "instead with the goal of transferring all of their going concern value to the Debtor's own members (who are also the secured lenders, and affiliates of the Debtor's manager and executives) in a calculated play by the insider to force the assets to be sold (or transferred through a plan) immediately, so that the insider can buy them cheap, flush the trade debt, then realize the future profits of the business for its own benefit alone." If the Debtor, controlled by its lenders, has its way, unsecured creditors will receive no benefit from the bankruptcy proceeding. The Committee also asked the Court to compel the disgorgement of certain payments made to the Lenders on account of prepetition claims. The Debtor, however, shot back that the Committee's objections to the DIP Motion all stem from the faulty premise that the Lenders' involvement in multiple roles should deprive them of typical protections provided to DIP lenders. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, the Debtor's counsel, informed the Court that if the Lenders refuse to fund operations, the Debtor's operations will come to a grinding halt. "No provision of the Bankruptcy Code, or any other applicable law, precludes the Lenders from serving in the roles of prepetition secured lenders, DIP lenders and stalking horse bidders," Mr. Ward emphasized. "If the Lenders were truly dictating a result designed solely to benefit themselves, they would not be supporting a plan of reorganization that will result in a significant distribution to unsecured creditors and the assumption of millions of dollars of [the Debtor's] liabilities," Mr. Ward said. The approved DIP Financing will mature on the earlier of: -- the notice of the occurrence of an Event of Default; or -- May 2, 2008. American LaFrance noted in a press release that the Court-approved financing will ensure that it has adequate liquidity to purchase parts during the course of its bankruptcy proceeding and reestablish production volume to pre-bankruptcy levels, including bringing employees back from furlough. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN SOIL: Dec. 31 Balance Sheet Upside-Down by $19,000 ----------------------------------------------------------- American Soil Technologies Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $3,713,068 in total assets and $3,732,473 in total liabilities, resulting in a $19,405 total stockholders' deficit. At Dec. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $275,152 in total current assets available to pay $2,988,453 in total current liabilities. The company reported a net loss of $413,743 on revenue of $82,179 in the first quarter ended Dec. 31, 2007, compared with a net loss of $1,309,038 on revenue of $145,035 in the corresponding period ended Dec. 31, 2006. The decrease in the net loss is directly related to a decrease in other expenses of $66,002 and the elimination of a one-time charge of $1,100,000 to impairment of intangible assets and goodwill that was reported on Dec. 31, 2006. The decrease in revenue is a direct result of the loss of the company's linear polymer business caused by defective product received from the company's linear polymer supplier. 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?2876 Going Concern Disclaimer As reported in the Troubled Company Reporter on Feb. 21, 2008, McKennon Wilson & Morgan LLP in Ervine, California, expressed substantial doubt about American Soil Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm stated that the company has incurred losses in recent history, and has significant working capital and accumulated deficits. About American Soil Based in Pacoima, California, American Soil Technologies Inc. (SOYLE.OB) -- http://www.americansoiltech.com-- develops, manufactures, and markets polymer soil amendments to the agricultural, turf, and horticulture industries in North America. It manufactures three primary products: Agriblend, a soil amendment developed for agriculture; Soil Medic, a slow release liquid fertilizer; and Nutrimoist, developed for homes, parks, golf courses, and other turf related applications. The company was founded in 1993. AMERIQUEST MORTGAGE: Fitch Chips Ratings of $8.1B Certificates -------------------------------------------------------------- Fitch Ratings has taken rating actions on Ameriquest mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $1.6 billion and downgrades total $8.1 billion. Additionally, $4.3 billion remains on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Ameriquest Mortgage Securities 2006-R1 -- $390.7 million class A-1 affirmed at 'AAA', (BL: 99.43, LCR: 5.17); -- $16.0 million class A-2B affirmed at 'AAA', (BL: 90.22, LCR: 4.69); -- $38.5 million class A-2C affirmed at 'AAA', (BL: 59.41, LCR: 3.09); -- $27.4 million class A-2D affirmed at 'AAA', (BL: 51.46, LCR: 2.67); -- $82.5 million class M-1 affirmed at 'AA+', (BL: 41.54, LCR: 2.16); -- $63.0 million class M-2 downgraded to 'A' from 'AA' (BL: 33.78, LCR: 1.76); -- $30.0 million class M-3 downgraded to 'BBB' from 'AA-' (BL: 30.06, LCR: 1.56); -- $24.8 million class M-4 downgraded to 'BB' from 'A+' (BL: 26.97, LCR: 1.4); -- $23.2 million class M-5 downgraded to 'BB' from 'A' (BL: 24.06, LCR: 1.25); -- $21.0 million class M-6 downgraded to 'B' from 'A-' (BL: 21.36, LCR: 1.11); -- $20.2 million class M-7 downgraded to 'CCC' from 'BBB+' (BL: 18.57, LCR: 0.96); -- $15.0 million class M-8 downgraded to 'CCC' from 'BBB' (BL: 16.39, LCR: 0.85); -- $9.0 million class M-9 downgraded to 'CCC' from 'BBB' (BL: 14.98, LCR: 0.78); -- $11.2 million class M-10 downgraded to 'CC' from 'BBB-' (BL: 12.23, LCR: 0.64); -- $15.0 million class M-11 downgraded to 'CC' from 'BB' (BL: 11.38, LCR: 0.59); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 17.80% -- Realized Losses to date (% of Original Balance): 0.71% -- Expected Remaining Losses (% of Current balance): 19.25% -- Cumulative Expected Losses (% of Original Balance): 11.10% Ameriquest Mortgage Securities 2006-R2 -- $230.9 million class A-1 affirmed at 'AAA', (BL: 50.24, LCR: 2.7); -- $90.4 million class A-2B affirmed at 'AAA', (BL: 54.49, LCR: 2.93); -- $15.1 million class A-2C affirmed at 'AAA', (BL: 50.90, LCR: 2.73); -- $55.5 million class M-1 affirmed at 'AA+', (BL: 40.54, LCR: 2.18); -- $33.0 million class M-2 downgraded to 'A' from 'AA' (BL: 34.64, LCR: 1.86); -- $18.5 million class M-3 downgraded to 'BBB' from 'AA-' (BL: 31.31, LCR: 1.68); -- $16.5 million class M-4 downgraded to 'BBB' from 'A+' (BL: 28.33, LCR: 1.52); -- $16.0 million class M-5 downgraded to 'BB' from 'A' (BL: 25.43, LCR: 1.37); -- $15.0 million class M-6 downgraded to 'B' from 'A-' (BL: 22.66, LCR: 1.22); -- $14.0 million class M-7 downgraded to 'B' from 'BBB+' (BL: 19.94, LCR: 1.07); -- $10.0 million class M-8 downgraded to 'CCC' from 'BBB' (BL: 17.87, LCR: 0.96); -- $9.0 million class M-9 downgraded to 'CCC' from 'BBB-' (BL: 15.85, LCR: 0.85); -- $7.0 million class M-10 downgraded to 'CCC' from 'BB+' (BL: 14.35, LCR: 0.77); -- $10.0 million class M-11 downgraded to 'CC' from 'BB' (BL: 12.37, LCR: 0.66); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 16.99% -- Realized Losses to date (% of Original Balance): 0.43% -- Expected Remaining Losses (% of Current balance): 18.62% -- Cumulative Expected Losses (% of Original Balance): 10.80% Argent Securities 2006-M1 -- $796.0 million class A-1 downgraded to 'BBB' from 'AAA', remains on Rating Watch Negative (BL: 42.45, LCR: 1.52); -- $101.9 million class A-2A affirmed at 'AAA', (BL: 75.88, LCR: 2.71); -- $209.0 million class A-2B rated 'AAA', remains on Rating Watch Negative (BL: 55.13, LCR: 1.97); -- $269.1 million class A-2C downgraded to 'AA' from 'AAA', remains on Rating Watch Negative (BL: 43.11, LCR: 1.54); -- $99.2 million class A-2D downgraded to 'A' from 'AAA' (BL: 41.11, LCR: 1.47); -- $105.0 million class M-1 downgraded to 'BB' from 'AA+' (BL: 36.12, LCR: 1.29); -- $93.0 million class M-2 downgraded to 'B' from 'AA' (BL: 31.59, LCR: 1.13); -- $55.5 million class M-3 downgraded to 'B' from 'AA-' (BL: 28.88, LCR: 1.03); -- $51.0 million class M-4 downgraded to 'CCC' from 'A+' (BL: 26.37, LCR: 0.94); -- $48.0 million class M-5 downgraded to 'CCC' from 'A' (BL: 23.97, LCR: 0.86); -- $45.0 million class M-6 downgraded to 'CCC' from 'BBB+' (BL: 21.57, LCR: 0.77); -- $40.5 million class M-7 downgraded to 'CC' from 'BBB-' (BL: 19.28, LCR: 0.69); -- $33.0 million class M-8 downgraded to 'CC' from 'BB+' (BL: 17.32, LCR: 0.62); -- $22.5 million class M-9 downgraded to 'CC' from 'BB' (BL: 15.86, LCR: 0.57); -- $30.0 million class M-10 downgraded to 'CC' from 'B' (BL: 14.25, LCR: 0.51); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 30.69% -- Realized Losses to date (% of Original Balance): 0.74% -- Expected Remaining Losses (% of Current balance): 28.01% -- Cumulative Expected Losses (% of Original Balance): 19.98% Argent Securities 2006-M2 -- $504.9 million class A-1 downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 41.79, LCR: 1.49); -- $121.7 million class A-2A affirmed at 'AAA', (BL: 64.33, LCR: 2.3); -- $128.7 million class A-2B rated 'AAA', remains on Rating Watch Negative (BL: 51.23, LCR: 1.83); -- $122.7 million class A-2C downgraded to 'AA' from 'AAA', remains on Rating Watch Negative (BL: 44.03, LCR: 1.57); -- $83.1 million class A-2D downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 40.88, LCR: 1.46); -- $88.4 million class M-1 downgraded to 'B' from 'AA+' (BL: 34.30, LCR: 1.23); -- $74.0 million class M-2 downgraded to 'B' from 'AA-' (BL: 28.70, LCR: 1.03); -- $26.4 million class M-3 downgraded to 'CCC' from 'AA-' (BL: 26.67, LCR: 0.95); -- $35.7 million class M-4 downgraded to 'CCC' from 'A' (BL: 23.90, LCR: 0.85); -- $26.4 million class M-5 downgraded to 'CCC' from 'A-' (BL: 21.76, LCR: 0.78); -- $19.6 million class M-6 downgraded to 'CC' from 'BBB+' (BL: 20.09, LCR: 0.72); -- $24.7 million class M-7 downgraded to 'CC' from 'BBB-' (BL: 17.87, LCR: 0.64); -- $14.5 million class M-8 downgraded to 'CC' from 'BB+' (BL: 16.47, LCR: 0.59); -- $13.6 million class M-9 downgraded to 'CC' from 'BB-' (BL: 15.03, LCR: 0.54); -- $10.2 million class M-10 downgraded to 'CC' from 'B+' (BL: 13.92, LCR: 0.5); -- $17.0 million class M-11 downgraded to 'C' from 'B' (BL: 12.39, LCR: 0.44); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 28.82% -- Realized Losses to date (% of Original Balance): 0.53% -- Expected Remaining Losses (% of Current balance): 27.98% -- Cumulative Expected Losses (% of Original Balance): 22.49% Argent Securities 2006-M3 -- $580.5 million class A-1 downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 39.23, LCR: 1.43); -- $179.8 million class A-2A affirmed at 'AAA', (BL: 61.02, LCR: 2.23); -- $151.9 million class A-2B rated 'AAA', remains on Rating Watch Negative (BL: 49.50, LCR: 1.81); -- $166.1 million class A-2C downgraded to 'AA' from 'AAA', remains on Rating Watch Negative (BL: 41.88, LCR: 1.53); -- $135.5 million class A-2D downgraded to 'A' from 'AAA', remains on Rating Watch Negative (BL: 38.28, LCR: 1.4); -- $110.6 million class M-1 downgraded to 'B' from 'AA+' (BL: 31.40, LCR: 1.15); -- $73.7 million class M-2 downgraded to 'CCC' from 'AA-' (BL: 26.77, LCR: 0.98); -- $32.9 million class M-3 downgraded to 'CCC' from 'A+' (BL: 24.66, LCR: 0.9); -- $29.9 million class M-4 downgraded to 'CCC' from 'A' (BL: 22.68, LCR: 0.83); -- $29.9 million class M-5 downgraded to 'CCC' from 'BBB+' (BL: 20.63, LCR: 0.75); -- $25.9 million class M-6 downgraded to 'CC' from 'BBB-' (BL: 18.80, LCR: 0.69); -- $23.9 million class M-7 downgraded to 'CC' from 'BB+' (BL: 17.00, LCR: 0.62); -- $15.9 million class M-8 downgraded to 'CC' from 'BB' (BL: 15.76, LCR: 0.58); -- $13.0 million class M-9 downgraded to 'CC' from 'B+' (BL: 14.62, LCR: 0.53); -- $19.9 million class M-10 downgraded to 'C' from 'CCC' (BL: 13.16, LCR: 0.48); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 26.10% -- Realized Losses to date (% of Original Balance): 0.35% -- Expected Remaining Losses (% of Current balance): 27.39% -- Cumulative Expected Losses (% of Original Balance): 22.73% Argent Securities 2006-W1 -- $353.0 million class A-1 rated 'AAA', remains on Rating Watch Negative (BL: 52.49, LCR: 1.93); -- $196.8 million class A-2B affirmed at 'AAA', (BL: 61.38, LCR: 2.26); -- $159.2 million class A-2C rated 'AAA', remains on Rating Watch Negative (BL: 51.61, LCR: 1.9); -- $103.6 million class A-2D downgraded to 'AA' from 'AAA' (BL: 49.74, LCR: 1.83); -- $89.9 million class M-1 downgraded to 'BBB' from 'AA+' (BL: 43.68, LCR: 1.61); -- $80.8 million class M-2 downgraded to 'BB' from 'AA+' (BL: 37.85, LCR: 1.39); -- $47.8 million class M-3 downgraded to 'BB' from 'AA' (BL: 34.30, LCR: 1.26); -- $41.0 million class M-4 downgraded to 'B' from 'AA-' (BL: 31.24, LCR: 1.15); -- $39.8 million class M-5 downgraded to 'B' from 'A+' (BL: 28.26, LCR: 1.04); -- $38.7 million class M-6 downgraded to 'CCC' from 'A' (BL: 25.32, LCR: 0.93); -- $34.1 million class M-7 downgraded to 'CCC' from 'A-' (BL: 22.63, LCR: 0.83); -- $31.9 million class M-8 downgraded to 'CC' from 'BBB' (BL: 20.02, LCR: 0.74); -- $22.8 million class M-9 downgraded to 'CC' from 'BBB-' (BL: 18.05, LCR: 0.66); -- $22.8 million class M-10 downgraded to 'CC' from 'BB-' (BL: 16.51, LCR: 0.61); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 28.50% -- Realized Losses to date (% of Original Balance): 1.16% -- Expected Remaining Losses (% of Current balance): 27.14% -- Cumulative Expected Losses (% of Original Balance): 17.23% Argent Securities 2006-W2 -- $322.6 million class A-1 downgraded to 'AA' from 'AAA' (BL: 49.75, LCR: 1.7); -- $242.2 million class A-2B downgraded to 'AA' from 'AAA' (BL: 49.83, LCR: 1.7); -- $31.3 million class A-2C downgraded to 'AA' from 'AAA', remains on Rating Watch Negative (BL: 48.32, LCR: 1.65); -- $71.2 million class M-1 downgraded to 'BB' from 'AA+' (BL: 40.89, LCR: 1.4); -- $50.4 million class M-2 downgraded to 'B' from 'AA' (BL: 35.53, LCR: 1.22); -- $31.2 million class M-3 downgraded to 'B' from 'AA' (BL: 32.19, LCR: 1.1); -- $28.0 million class M-4 downgraded to 'B' from 'A+' (BL: 29.17, LCR: 1); -- $26.4 million class M-5 downgraded to 'CCC' from 'A' (BL: 26.32, LCR: 0.9); -- $24.8 million class M-6 downgraded to 'CCC' from 'A-' (BL: 23.59, LCR: 0.81); -- $24.0 million class M-7 downgraded to 'CC' from 'BBB+' (BL: 20.82, LCR: 0.71); -- $20.0 million class M-8 downgraded to 'CC' from 'BBB-' (BL: 18.40, LCR: 0.63); -- $14.4 million class M-9 downgraded to 'CC' from 'BB+' (BL: 16.57, LCR: 0.57); -- $16.0 million class M-10 downgraded to 'CC' from 'BB' (BL: 14.94, LCR: 0.51); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 28.69% -- Realized Losses to date (% of Original Balance): 1.37% -- Expected Remaining Losses (% of Current balance): 29.24% -- Cumulative Expected Losses (% of Original Balance): 18.50% Argent Securities 2006-W3 -- $331.1 million class A-1 downgraded to 'A' from 'AAA' (BL: 47.86, LCR: 1.45); -- $16.3 million class A-2A affirmed at 'AAA', (BL: 98.70, LCR: 2.99); -- $111.3 million class A-2B rated 'AAA', remains on Rating Watch Negative (BL: 59.72, LCR: 1.81); -- $127.7 million class A-2C downgraded to 'A' from 'AAA' (BL: 47.90, LCR: 1.45); -- $44.5 million class A-2D downgraded to 'A' from 'AAA' (BL: 46.85, LCR: 1.42); -- $57.8 million class M-1 downgraded to 'BB' from 'AA+' (BL: 41.23, LCR: 1.25); -- $50.4 million class M-2 downgraded to 'B' from 'AA' (BL: 36.07, LCR: 1.09); -- $29.6 million class M-3 downgraded to 'B' from 'AA' (BL: 32.93, LCR: 1); -- $26.7 million class M-4 downgraded to 'CCC' from 'A' (BL: 30.07, LCR: 0.91); -- $25.2 million class M-5 downgraded to 'CCC' from 'A-' (BL: 27.37, LCR: 0.83); -- $23.7 million class M-6 downgraded to 'CCC' from 'BBB' (BL: 24.79, LCR: 0.75); -- $22.2 million class M-7 downgraded to 'CC' from 'BBB-' (BL: 22.25, LCR: 0.67); -- $18.5 million class M-8 downgraded to 'CC' from 'BB' (BL: 20.00, LCR: 0.6); -- $12.6 million class M-9 downgraded to 'CC' from 'B+' (BL: 18.25, LCR: 0.55); -- $11.9 million class M-10 downgraded to 'CC' from 'B' (BL: 16.66, LCR: 0.5); -- $14.8 million class M-11 downgraded to 'C' from 'CCC' (BL: 15.02, LCR: 0.45); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 33.81% -- Realized Losses to date (% of Original Balance): 1.24% -- Expected Remaining Losses (% of Current balance): 33.06% -- Cumulative Expected Losses (% of Original Balance): 22.40% Argent Securities 2006-W4 -- $288.2 million class A-1 downgraded to 'AA' from 'AAA', remains on Rating Watch Negative (BL: 44.93, LCR: 1.53); -- $20.5 million class A-2A affirmed at 'AAA', (BL: 97.99, LCR: 3.34); -- $117.8 million class A-2B rated 'AAA', remains on Rating Watch Negative (BL: 57.52, LCR: 1.96); -- $120.2 million class A-2C downgraded to 'AA' from 'AAA' (BL: 45.24, LCR: 1.54); -- $85.4 million class A-2D downgraded to 'A' from 'AAA' (BL: 42.58, LCR: 1.45); -- $49.0 million class M-1 downgraded to 'BB' from 'AA+' (BL: 37.33, LCR: 1.27); -- $43.3 million class M-2 downgraded to 'B' from 'AA' (BL: 32.54, LCR: 1.11); -- $27.7 million class M-3 downgraded to 'B' from 'AA' (BL: 29.46, LCR: 1.01); -- $24.2 million class M-4 downgraded to 'CCC' from 'A' (BL: 26.77, LCR: 0.91); -- $23.5 million class M-5 downgraded to 'CCC' from 'A-' (BL: 24.15, LCR: 0.82); -- $19.9 million class M-6 downgraded to 'CCC' from 'BBB' (BL: 21.88, LCR: 0.75); -- $19.2 million class M-7 downgraded to 'CC' from 'BBB-' (BL: 19.61, LCR: 0.67); -- $17.1 million class M-8 downgraded to 'CC' from 'BB' (BL: 17.41, LCR: 0.59); -- $10.7 million class M-9 downgraded to 'CC' from 'B' (BL: 15.91, LCR: 0.54); -- $14.2 million class M-10 downgraded to 'C' from 'CCC' (BL: 14.25, LCR: 0.49); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 33.61% -- Realized Losses to date (% of Original Balance): 1.15% -- Expected Remaining Losses (% of Current balance): 29.31% -- Cumulative Expected Losses (% of Original Balance): 19.91% Argent Securities 2006-W5 -- $295.0 million class A-1 downgraded to 'A' from 'AAA' (BL: 44.42, LCR: 1.48); -- $28.6 million class A-2A affirmed at 'AAA', (BL: 91.73, LCR: 3.05); -- $119.0 million class A-2B rated 'AAA', remains on Rating Watch Negative (BL: 56.70, LCR: 1.88); -- $145.0 million class A-2C downgraded to 'A' from 'AAA' (BL: 44.30, LCR: 1.47); -- $53.8 million class A-2D downgraded to 'A' from 'AAA' (BL: 42.98, LCR: 1.43); -- $48.1 million class M-1 downgraded to 'BB' from 'AA+' (BL: 37.90, LCR: 1.26); -- $42.6 million class M-2 downgraded to 'B' from 'AA+' (BL: 33.29, LCR: 1.11); -- $27.5 million class M-3 downgraded to 'B' from 'AA' (BL: 30.28, LCR: 1.01); -- $22.7 million class M-4 downgraded to 'CCC' from 'A' (BL: 27.78, LCR: 0.92); -- $23.4 million class M-5 downgraded to 'CCC' from 'BBB+' (BL: 25.21, LCR: 0.84); -- $19.9 million class M-6 downgraded to 'CCC' from 'BBB-' (BL: 22.98, LCR: 0.76); -- $18.6 million class M-7 downgraded to 'CC' from 'BB+' (BL: 20.69, LCR: 0.69); -- $15.8 million class M-8 downgraded to 'CC' from 'BB-' (BL: 18.67, LCR: 0.62); -- $11.0 million class M-9 downgraded to 'CC' from 'B+' (BL: 17.12, LCR: 0.57); -- $13.8 million class M-10 downgraded to 'CC' from 'CCC' (BL: 15.48, LCR: 0.51); Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 33.07% -- Realized Losses to date (% of Original Balance): 0.93% -- Expected Remaining Losses (% of Current balance): 30.11% -- Cumulative Expected Losses (% of Original Balance): 20.99% 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. AMERISTAR CASINOS: Moody's Holds Ba3 Corporate Family Rating ------------------------------------------------------------ Moody's Investors Service revised the rating outlook of Ameristar Casinos, Inc. to stable from positive. The company's Ba3 corporate family rating, B1 probability of default ratings, and Ba3 (LGD-3, 36%) bank loan rating were affirmed. The outlook revision to stable considers that a moderation in the company's operating performance as well as less favorable economic conditions will make it unlikely that Ameristar will achieve the credit metrics required for higher corporate family rating in next 12-24 months. Slower economic activity has already had some impact on Ameristar's operating results, with the company reporting flat "same-store" net revenue and EBITDA growth for the fiscal year-ended Dec. 31, 2007. Ameristar expects tough prior period comparisons through the first half of fiscal 2008. The stable outlook acknowledges that despite a more challenging operating environment, Ameristar's casino properties should perform relatively well in their respective markets, and the company is expected to maintain its market leader position in both Vicksburg, Mississippi and St. Louis, Missouri. Additionally, the company is expected to continue to benefit from its Black Hawk, Colorado expansion and refurbishment of its Jackpot properties in Nevada. The Ba3 corporate family rating recognizes that despite Ameristar's high 2007 fiscal year-end leverage at almost 6.0 times, a number of the company's qualitative characteristics are stronger and more representative of a mid-to-low Ba credit. The rating also considers that Ameristar has made significant investments in the expansion and enhancement to its properties. Following the completion of its St. Charles and Vicksburg projects and re-branding of its East Chicago property, Ameristar will be well-positioned to improve market share and revenues in those markets. Ameristar Casinos, Inc. owns and operates eight hotel/casinos in six markets. The company's portfolio of casinos consists of: Ameristar St. Charles; Ameristar Kansas City; Ameristar Council Bluffs; Ameristar Vicksburg; Ameristar Black Hawk; Resorts East Chicago and Cactus Petes and the Horseshu in Jackpot, Nevada. For the fiscal year ended Dec. 31, 2007, Ameristar reported net revenues of approximately $1.1 billion. ASIA GLOBAL: CMP Unit Has Until February 29 to Repay $875K Loans ---------------------------------------------------------------- Idea Asia Limited, a subsidiary of Asia Global Holdings Corporation and the holding company of China Media Power Limited, has issued a Demand Note to CMP for a repayment of loans in the amount of $875,338.18. In the event that CMP fails to repay the loan on or before Feb. 29, 2008, Idea Asia Limited will consider initiating liquidation of CMP to recover corresponding assets, possibly including intellectual properties rights. "The purpose of this Demand Note is to recoup valuable assets from CMP, which is a joint venture 60% owned by AAGH," Idea Asia's spokesperson said. As the capital investor in CMP, we believe that this action is fully justified and the fair and proper thing to do for AAGH and its shareholders. Further, a positive outcome from this action would have a beneficial impact on the company's continuing efforts in the TV entertainment business." In this connection, CMP, a subsidiary of AAGH, has decided to discontinue the "Who Wants To Be a Millionaire" project. Further, Michael Mak has been appointed by the board to be fully responsible for the sale of all assets to be used to pay and satisfy any outstanding liabilities. The decisions were made by the CMP board of directors. The board sites poor performance by the sales and distribution team resulting in the project running at a continuous loss as the reason for the decisions. Further to the restructuring of the AAGH TV entertainment business, Idea Asia Limited disclosed the appointment of Dominique Ullmann as an executive director. Mr. Ullmann will spearhead the development of the TV entertainment business in China. He has over twenty years experience in the media and advertising business in Europe and Asia. Over the last fifteen years Mr. Ullmann has held executive positions in Asia with highly reputable media companies such as ATV of Hong Kong, STAR TV in Hong Kong and Singapore, and MindShare, a subsidiary of Group WPP. "We are delighted to disclose that we are making progress on the restructuring of our TV entertainment business, and even more delighted in the successful recruitment of a high caliber industry expert in Dominique Ullmann, Mr. Mak AAGH CEO, said. "Our TV Entertainment business will continue to build upon what has been established to date. Dominique's vast experience with TV stations and the media buying industry will contribute greatly toward achieving our goal of delivering quality TV programs in China and bringing in sales revenue along the way." About Asia Global Headquartered in Hong Kong, China, Asia Global Holdings Corp. (OTC BB: AAGH.OB) -- http://www.asiaglobalholdings.com/-- was incorporated in the Nevada on Feb. 1, 2002, as Longbow Mining Inc. On May 12, 2004, Longbow Mining Inc. changed its name to BonusAmerica Worldwide Corporation. On June 6, 2006, the company changed its name to Asia Global Holdings Corp. AAGH is focused on building businesses in China and other emerging regions and markets in Asia and worldwide. The company has subsidiaries participating in media and advertising, marketing services and internet commerce. During 2007, AAGH entered the television entertainment market, where it plans to sell advertising slots that air during the broadcast of Who Wants To Be A Millionaire? TV show in China. The company also has offices in the United States and in mainland China. Going Concern Doubt Management believes there exists substantial doubt about Asia Global Holdings Corp.'s ability to continue as a going concern. For the six months ended June 30, 2007, the company had incurred a net loss of approximately $2.8 million and had an accumulated deficit of approximately $9 million at June 30, 2007. Additionally, the company has incurred losses over the past several years. ASARCO LLC: Wants Agreements with U.S. Government, et al. Approved ------------------------------------------------------------------ ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas to approve settlement agreements with various claimants. Specifically, these agreements resolve: (a) claims filed by the state of Washington, the Washington Department of Ecology, and the Port of Everett, relating to environmental clean-up and remediations costs at ASARCO's 687-acre copper smelter located in Everett, Washington; and (b) claims filed by the U.S. Government and the state of Montana, relating to past and future response costs at ASARCO's Barker Hughesville (Block P) Mine Site, located in the Lewis and Clark National Forest in Montana. The parties agree that these claimants are allowed general unsecured claims in these amounts: Claimants Claim Amount --------- ------------ Washington, DOE, and the Port $38,000,000 Montana 7,100,000 U.S. Government 1,000,000 The $38,000,000 Allowed Everett Claim will be allocated between Washington, the Department of Ecology, and the Port at a time and in a manner they determine is appropriate. Washington and the Port have originally asserted an aggregate of $138,000,000 for response costs at the Everett Site. ASARCO, Washington, the DOE, and the Port agree not to sue or assert claims or causes of actions against each other with respect to claims arising from the Everett Site. The Government and Montana agree that neither of them will seek payment from the other for distribution resulting from the settlement. ASARCO also agreed that it is entitled to protection from contribution actions or claims provided by Section 113(f)(2) of the Comprehensive Environmental Response, Compensation and Liability Act. The settlement with the Government and Montana with respect to the Barker Hugheville Site will not affect the settlement with Doe Run Company regarding the same site. The Government and Montana will each maintain a site-specific account for the Barker Hugheville site. Asarco Inc. Opposes Barker Hughesville Settlement Asarco Incorporated objects to the settlement between the Debtors and Doe Run regarding the Barker Hughesville Site. Asarco Inc. asserts that the Debtors are not obligated to pay $900,000 to Doe Run for clean-up costs. Gregory Evans, Esq., at Milbank, Tweed, Hadley & McCloy, LLP, in Los Angeles, California, tells the Court that the Environmental Protection Agency has never directed the Debtors to pay anything to clean up the Barker Hughesville Site. He adds that historical records have shown that the Debtors have no involvement in Doe Run's operations at the Site and that the Debtors has no contribution to Doe Run's environmental pollution. Mr. Evans also asserts that the settlement is unreasonable because the Debtors seek to grant Doe Run a full release and covenant not to sue in the future even though Doe Run's tailing will continue to migrate onto the Debtors' property. BNSF Files Final Reply Brief Regarding East Helena Site ASARCO LLC and Asarco Inc. have agreed to allow BNSF Railway Company to file a final reply brief limited to addressing two issues related to the East Helena, Montana, Site: (1) Whether BNSF post-trial arguments are unsupported by the evidence and should be disregarded; and (2) Whether allowance of BNSF's claim is equitable under the circumstances. Asarco Inc. has asserted that a speciation analysis of the types of lead present in the BNSF railroad right-of-way is not necessary for the Court to allocate future response costs against BNSF. Michael A. McConnell, Esq., at Kelly Hart & Hallman, LLP, in Fort Worth, Texas, argues however, that Asarco Inc. misses the point. He asserts that the Court must find a threshold matter that ASARCO LLC has met its burden of proving its prima facie case for its counterclaim pursuant to Section 113(f)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act before performing an allocation. Mr. McConnell points out that BNSF has succeeded in meeting its burden of proof to establish its claim for an award of environmental response costs. ASARCO LLC, however, has failed in meeting its burden of proof to establish whether any future response costs should be allocated to BNSF. Specifically, Mr. McConnell maintains, ASARCO LLC and Asarco Inc. have failed to provide these information necessary for the Court to assess ASARCO LLC's Section 113(f) Claim and make any allocation of response costs to BNSF: (a) Evidence of an actual release caused by BNSF; (b) Scientific proof of the type of contaminants involved in any release; (c) An analysis on the breakdown of constituents of the contaminant; or (d) An analysis as to whether those constituents are the driver for the cost of remediation. For these reasons, BNSF urges the Court to estimate and allow its Claim for $38,500,000. If the Court has reservations that the allowance of BNSF's Claim for future costs will somehow serve as a "windfall," BNSF says the Court can require those funds to be placed into a trust to be held for the specific purpose of remediation of the BNSF right-of-way. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Court Okays Pacts Allowing $27MM in Tar Creek Claims ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas approved the settlement agreements between ASARCO LLC and its debtor-affiliates and certain toxic tort claimants. The settlement agreements entitle these claimants to receive an allowed general unsecured claim in these amounts: Claimants Allowed Claim Amount --------- -------------------- Tar Creek Claimants $20,782,500 Hayden, Arizona Claimants 4,800,000 El Paso, Texas Claimants 2,387,500 The Debtors had asked Court to enter a summary judgment on the remaining Tar Creek Claims. The Debtors have previously agreed, after a series of mediation sessions in late 2007, to grant a $20,782,500 allowed general unsecured claim to certain claimants asserting property damage claims related to ASARCO LLC's mining operations at the Tar Creek Superfund Site in Ottawa County, Oklahoma. However, some Tar Creek PD Claims represented by the law firms Speer Law Firm, P.A., and Reich & Binstock, LP, remained unresolved and are pending estimation, which will commence on March 3, 2008. In addition, in January 2008, some Tar Creek Claimants sought leave from the Court to file more than 900 new PD Claims against the Debtors on behalf of more than 500 Ottawa property owners. The Debtors asked the Court to enter a summary judgment disallowing the Speer and Reich Tar Creek Claims and the Additional PD Claims -- the Remaining Tar Creek Claims -- because they are barred by Oklahoma's two-year statute of limitations for real property injuries. In the alternative, the Debtors asked the Court to value the Remaining Tar Creek Claims at zero. The Debtors' counsel, Ishaq Kundawala, Esq., at Baker Botts, L.L.P., in Dallas, Texas, told the Court that ASARCO and its predecessor-in-interest, Federal Mining and Smelting Company, ceased all mining, milling, smelting and transportation operations at the Tar Creek Site in 1953. Thus, Mr. Kundawala asserted, all PD Claims arising from the Debtors' mining operations at the Tar Creek Site must have been filed on or before 1955. Objections to Filing of Additional Claims The Debtors and the Official Committee of Unsecured Creditors of ASARCO asked the Court to deny certain of the Tar Creek Claimants' request for leave to file the Additional PD Claims on behalf of more than 500 Ottawa property owners. The Debtors argued that the Tar Creek Claimants did not provide any excuse for the delay in filing the Additional Claims. The Debtors add that the Additional Claims are a "mish-mash of claims filed by commercial and residential property owners who have already had their property remediated or have accepted a government buy-out of their claims." The Debtors asserted that the late filing of the Additional Claims: (a) prejudices their ability to timely confirm a plan of reorganization and their right to litigate the toxic tort claims at an estimation hearing; and (b) makes any dispute resolution on the remaining toxic tort claims more difficult. The Creditors Committee reminded the Court that the Debtors and other parties-in-interest in their Chapter 11 cases have relied on the certainty provided by the Bar Date. Based on the analysis of the timely filed claims, the Creditors Committee noted that the Debtors have shaped the reorganization process and have proceeded toward the formulation of a plan of reorganization, which is anticipated to be filed on or before April 11, 2008. The Creditors Committee asserted that permitting the Tar Creek Claimants to file the Additional Claims would risk destabilizing the reorganization process. Robert C. Pate, the Court-appointed Future Claims Representative, joined in the Debtors' objections to the request for leave to file the Additional Tar Creek Claims. Tar Creek Claimants File Pre-Trial Brief Tar Creek Claimants represented by the Speer and Reich law firms filed a pre-trial brief summarizing the findings and conclusions of their experts regarding the property damages resulting from ASARCO's mining operations at the Tar Creek Site. The Tar Creek Claimants said they have served on the Debtors and other parties-in-interest to the toxic tort estimation trials the expert reports prepared by their experts, Kirk W. Brown, Ph.D., and Robert Simons, Ph.D. The Expert Reports are: 1. An Assessment & Evaluation of Lead Contamination in the Communities of Ottawa County, Oklahoma, Including ASARCO Operations Within These Communities, dated Nov. 15, 2007 a full-text copy of which is available for free at: http://researcharchives.com/t/s?2877 2. Dr. Brown's expert rebuttal report, dated Feb. 4, 2008, a full-text copy of which is available for free at: http://researcharchives.com/t/s?2878 3. Declaration of Robert A. Simons, Ph.D.: Opinion on Losses to Real Property, dated Feb. 7, 2008, a full-text copy of which is available for free at: http://researcharchives.com/t/s?2879 Dr. Brown, in his November 2007 Report, opined that (i) lead contamination in Ottawa County is the result of the co-mingling of wastes from multiple historical and ongoing sources; (ii) lead from activities associated with mining, milling, and transporting lead-containing materials is the primary source of contamination; and (iii) Federal is a historic source of the contamination. Dr. Simons concluded that (i) damages to property values in the cities of Picher, and Cardin, Oklahoma, are equivalent to 95% of their unimpaired market values; and (ii) damages in Quapaw, Oklahoma, are equivalent to 40% of their unimpaired market value. Dr. Simons used four alternative methodologies, including a sales price analysis, review of selected literature, a contingent valuation methodology, and a meta-analysis called "Big Matrix." Debtors Seek to Exclude Brown & Simons Opinions as Evidence The Debtors asked the Court to exclude, as evidence, the expert opinions prepared by Drs. Brown and Simons because their expert reports fail to meet the standards of reliability under Rule 702 of the Federal Rules of Bankruptcy Procedure and In re Daubert v. Merrell Dow Pharm. Inc., 509 U.S. 579 (1993). The Debtors' expert, David Cabe argued that Dr. Brown's modeling is seriously flawed due to the selection of the emission rate model. Mr. Cabe explained that Dr. Brown provided no scientific basis for establishing whether the soils at any claimant properties were affected by lead due to windblown dust since his modeling results are based on an unsupported and arbitrary emissions rate, specific claimant locations are not identified, and concentrations at the claimant locations are not calculated. A full-text copy of the two-part Cabe Report is available for free at: * http://researcharchives.com/t/s?287a * http://researcharchives.com/t/s?287b J. Chris Pfahl, one of the Debtors' expert, agreed that the Brown November 2007 Report is flawed because it fails to address other possible causes of lead contamination and ignores the fact of remediation of many of the properties at issue. Mr. Pfahl said the Brown November 2007 Report contradicts a 1999 report that lead contamination in the Tar Creek Area resulted from a mix of local mining-related lead and lead from other sources. A full-text copy of the Pfahl Report is available for free at: http://researcharchives.com/t/s?287c The Debtors' expert, Stephen E. Sellick, argued that Mr. Simon's use of each of his methodologies is flawed. Specifically, Mr. Sellick pointed out that: (a) Mr. Simons' sales price analysis is upwardly biased, unreliable, speculative and not supported by generally accepted valuation methodology; (b) Mr. Simons' literature review in the Picher-Cardin analysis relies solely on two so-called "peer-reviewed articles" that were actually produced for toxic tort plaintiffs in the class actions pending before the U.S. District Court for the Northern District of Oklahoma; (c) Mr. Simons' literature review in the Quapaw analysis relies on the articles used for the Picher-Cardin analysis plus a third article that depends on data from a contamination scenario in Dallas, Texas, that Mr. Simons fails to show is in any meaningful way related to sales data in Quapaw; (d) the CVM method, essentially a telephone survey of homeowners, is not well-established as a reliable damages measurement technique and has been academically questioned as scientifically unacceptable; and (e) there is no evidence that the "Big Matrix" methodology espoused by Mr. Simons has been used by anyone besides him. Mr. Sellick related that Mr. Simons himself warned that the results associated with the Big Matrix methodology, particularly, as they apply to Picher-Cardin are "very cautionary." Mr. Sellick's expert report was not publicly disclosed. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Court Extends Action Removal Period to June 13 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas extended, until June 13, 2008, the period within which ASARCO LLC and its debtor-affiliates can remove civil actions. As reported in the Troubled Company Reporter on Jan 22, 2008, the Debtors said they needed more time to review their civil lawsuits to determine whether those lawsuits should be removed. They elaborated that they are parties in myriad lawsuits in various states and federal courts and that those lawsuits are complex and may require individual analysis. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Grupo Mexico Says Ongoing Business More Profitable -------------------------------------------------------------- Grupo Mexico S.A. de C.V. said it can save ASARCO LLC and its debtor-affiliates and avoid an asset sale if it regains control over the company, Reuters reported. Grupo Mexico is the parent of Asarco Incorporated, who is the 100% equity holder in ASARCO LLC. "It is unreasonable from a business standpoint to auction all its operating assets. An ongoing business always has a higher value than that obtained from the selling off of its parts," Reuters said citing a statement it obtained from Grupo Mexico. ASARCO, in 2007, had about $1,680,000,000 in revenues, with more than $530,000,000 of earnings before interest, taxes, depreciation and amortization, and more than $330,000,000 of net profit. Grupo Mexico told Reuters that the numbers "reflect ASARCO's solvency, liquidity and capacity to pay its liabilities, once they have been clearly defined." The Helena Independent Record said that a federal official confirmed that neither ASARCO's East Helena, Montana, smelter, and Mike Horse Mine, nor any of its Montana properties, are included on the list of operating assets that will be auctioned off. Instead, the focus of the proposed sale includes the Mission, Ray, and Silver Bell open pit copper mines, and the Hayden copper smelter in Arizona; and the Amarillo copper refinery in Texas. The Helena Independent Record added that any individual buyer is free to include in its proposed offer other properties owned by ASARCO. The Helena Independent Record further said that, according to its source, if ASARCO sells all of its assets, the company would exist long enough to wind up the affairs of its estates. As reported in the Troubled Company Reporter on Feb. 6, 2008, the Debtors asked the Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas to approve uniform bidding procedures to govern the plan sponsor selection process. The Debtors related that they have reached an agreement in principle with creditor constituents regarding the structure of a plan of reorganization, which proposes to: (1) sell substantially all of the company's assets, and (2) resolve the company's contingent environmental and asbestos liabilities. In March 2007, ASARCO presented to the Court a reorganization plan exit process timeline to identify a plan sponsor and develop a plan structure that maximizes the value of the assets of the company's bankruptcy estate. Since then, ASARCO and Lehman Brothers, Inc., its financial advisors, have engaged in marketing and due diligence program. James R. Prince, Esq., at Baker Botts, LLP, in Dallas, Texas, says ASARCO and its creditor constituents are ready to move forward with the plan sponsor selection process and implement procedures that will achieve that end. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Objects to $148,000,000 Hylebos Waterway Claims ----------------------------------------------------------- ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas to disallow two general unsecured claims, asserting response costs and natural resource damages related to the Head of the Hylebos Waterway located in Tacoma, Washington: Claimants Claim Amount --------- ------------ Arkema, Inc., Elf Atochem, $145,127,892 Pennwalt Corporation, and General Metals of Tacoma Petroleum Reclaiming $3,250,000 Service, Inc. Tony M. Davis, Esq., at Baker Botts, L.L.P., in Houston, Texas, tells the Court that Arkema, Elf Atochem, Pennwalt, General Metals, and PRSI are potentially responsible parties at the Hylebos Waterway. Mr. Davis notes that pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, actions for recovery costs and NRD between PRPs are limited several liability. However, the Hylebos PRPs are seeking recovery of their entire response costs, Mr. Davis points out. He adds that the Environmental Protection Agency has identified Arkema and General Metals as the two major PRPs in the Waterway. The EPA did not identify ASARCO as a performing party because the company made only a relatively minor contribution of contaminants to the Waterway. Mr. Davis also tells the Court that ASARCO has already paid $2,615,638 for response costs at the Waterway. As for PRSI's Claim, Mr. Davis asserts that it should be disallowed because PRSI has not produced any evidence demonstrating that ASARCO is a liable party at the PRSI Site. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008 to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASSET ACCEPTANCE: Lenders Grant Temporary Waiver Thru March 17 -------------------------------------------------------------- Asset Acceptance Capital Corp. received a temporary waiver of non-compliance with the financial covenant through March 17, 2008, provided that the ratio of consolidated total liabilities to tangible net worth does not exceed 3.0:1.0 during this period. Under its credit agreement, pursuant to which Asset Acceptance maintains a $100 million revolving credit facility and a $150 million term loan facility, one of the financial covenants requires a ratio of consolidated total liabilities to consolidated tangible net worth not greater than 3.0:1.0 through Dec. 30, 2007, and 2.5:1.0 on or after Dec. 31, 2007, through Dec. 30, 2008. As of Dec. 31, 2007, the company was not in compliance with its financial covenant. At Dec. 31, 2007, the ratio was 2.65:1.0, slightly higher than the permitted 2.5. As of Feb. 21, 2008, outstanding borrowings on the company's revolving credit facility and term loan facility were $25 million and $149.3 million. During the fourth quarter 2007, Asset Acceptance took advantage of what it believed to be a favorable debt purchasing environment. The increased level of purchasing funded by borrowings on the revolving credit facility, coupled with the step down in the ratio of consolidated total liabilities to tangible net worth at Dec. 31, 2007, from 3.0:1.0 to 2.5:1.0, resulted in the company not passing the total liabilities to tangible net worth covenant. Asset Acceptance, in coordination with JP Morgan Chase Bank NA as the agent bank in its credit facility, anticipates obtaining an amendment to the credit agreement by March 17, 2008, which would modify the consolidated total liabilities to tangible net worth covenant by delaying the step-downs in ratio by one year. While the company is optimistic that a sufficient number of lenders will approve the proposed amendment to reach the required approval, there can be no assurance that the company will be able to negotiate an amendment on terms acceptable to the company. The failure to receive this amendment could have a material and adverse effect on Asset Acceptance. About Asset Acceptance Headquartered in Warren, Michigan, Asset Acceptance Capital Corp. (Nasdaq: AACC) -- http://www.AssetAcceptance.com/-- purchases charged-off consumer debt from credit issuers, and then uses proprietary methods to collect on these receivables. * * * Moody's Investor Service placed Asset Acceptance Capital Corp.'s long-term corporate family and bank loan debt ratings at 'B1' in May 2007. The ratings still hold to date with a stable outlook. ASSET BACKED: Losses Prompt S&P to Cut Ratings on Three Classes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes of asset-backed certificates issued by Asset Backed Funding Corp. 2004-FF1 Trust. S&P removed one of these ratings from CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on the remaining four classes from this transaction. The downgrades reflect a reduction in credit enhancement as a result of monthly realized losses and a high amount of severe delinquencies (90-plus days, foreclosures, and REOs) relative to the available credit support. As of the Jan. 25, 2008, remittance date, cumulative realized losses, as a percentage of the original pool balance, were 0.96%. Severe delinquencies, as a percentage of the current pool balance, were 19.23%. Losses have consistently outpaced excess interest over the past six months, by approximately 3.8x. Overcollateralization is 25 basis points (bps) below its target of 50 bps. S&P removed its rating on class M3 from CreditWatch negative because S&P lowered it to 'BB' and it does not expect to take further negative rating action in the near future. The affirmations reflect sufficient credit enhancement available to support the ratings at their current levels. Subordination, overcollateralization, and excess spread provide credit support for this transaction. The collateral consists of fixed- and adjustable-rate, first-lien mortgage loans with original terms to maturity of no more than 30 years. Ratings Lowered ABFC 2004-FF1 Trust Asset-backed certificates Rating ------ Class To From ----- -- ---- M4 B BB M5 CCC B Rating Lowered and Removed From CreditWatch Negative ABFC 2004-FF1 Trust Asset-backed certificates Rating ------ Class To From ----- -- ---- M3 BB A-/Watch Neg Ratings Affirmed ABFC 2004-FF1 Trust Asset-backed certificates Class Rating ----- ------ M1 AA M2 A M6, M7 CCC ATHERTON-NEWPORT: U.S. Trustee Appoints 7-Member Creditors Panel ---------------------------------------------------------------- The U.S. Trustee for Region 16 appointed seven members to serve on an Official Committee of Unsecured Creditors of Atherton-Newport Investments LLC's Chapter 11 Bankruptcy Code. The Creditors' Committee members are: a) Jerry Robinson and McFadden Associates LLC c/o Sean A. O'Keefe, Esq. O'Keefe & Associates 660 Newport Center Drive, Suite Newport Beach, CA 92660 Tel: (949) 720-4165 Fax: (949) 720-4111 b) Al Ross, Esq. 3535 East Coast Hwy. #362 Corona Del Mar, CA 92625 Tel: (949) 721-0434 Fax: (949) 721-0435 c) Henry Weingarten Trust Henry Weingarten 4611 Westchester Dr. Woodland Hills, CA 91364 Tel: (818) 421-9451 Fax: (818) 501-8430 d) Greenover Managers, LLC J. Kelley Williams, Jr. 2030 Eastover Drive Jackson, MS 39211 Tel: (601) 982-0464 Fax: (212) 208-4448 e) Augusta Financial Meena Family Trust Michael Meena 2401 - B Lyons Avenue Newhall, CA 91321 Tel: (661) 260-2970 Fax: (661) 260-2979 f) Harry and Brandy Halladay c/o Steven B. Trax 7475 Wisconsin Avenue Bethesda, MD 20814 Tel: (240) 482-4182 Fax: (240) 482-4181 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Irvine, California, Atherton-Newport Investments, L.L.C. -- http://www.atherton-newport.com/-- is a real estate investment and development. The company filed for protection on Jan. 16, 2008 (Bankr. C.D. Calif. Case No. 08-10230). Joseph A. Eisenberg, Esq., at Jeffer, Mangels, Butler & Marmaro, L.L.P., represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this case to date. As reported in the Troubled Company Reporter on Feb. 12, 2008, the Debtor's schedules show assets of 15,876,061 and debts of $43,881,537. AVENTINE HILL: Moody's Junks Ratings on Five Classes of Notes ------------------------------------------------------------- Moody's Investors Service downgraded ratings of seven classes of notes issued by Aventine Hill CDO I Ltd., and left on review for possible further downgrade ratings of three of these classes of notes. In addition Moody's Investors Service has placed on review for possible downgrade the rating of one class of notes. The notes affected by this rating action are: Class Description: $38,600,000 Class X Senior Secured Fixed Rate Notes Due 2014 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $414,000,000 Class A1S Variable Funding Senior Secured Floating Rate Notes due August 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $111,000,000 Class A1J Senior Secured Floating Rate Notes due August 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $96,750,000 Class A2 Senior Secured Floating Rate Notes due August 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $39,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes due August 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $28,500,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes due August 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $19,500,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes due August 2047 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca Class Description: $12,375,000 Class I Subordinated Notes due August 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca The rating actions taken reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Feb. 6, 2008, of an event of default caused by a failure of the Senior Credit Test to be satisfied, as required under Section 5.1(h) of the Indenture dated Aug. 10, 2007. Aventine Hill CDO I Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to Class X, Class A1S, Class A1J, and the Class A2 Notes remain on review for possible downgrade. AVISTA CORP: Reports $14.1 Mil. Earnings for 2007 Fourth Quarter ---------------------------------------------------------------- Avista Corp. reported net income of $14.1 million for the fourth quarter of 2007 ended Dec. 31, a decrease compared to net income of $17.8 million for the fourth quarter of 2006. For the year ended Dec. 31, 2007, Avista Corp.'s net income was $38.5 million a decrease compared to net income of $72.9 million for the year ended Dec. 31, 2006. The company's operating revenues for the fourth quarter of 2007 are $386.9 million compared to $426.7 revenues for the 2006 fourth quarter. For the fiscal year ended Dec. 31, 2007, the company's operating revenues are $1.4 billion, in comparison with the operating revenues for fiscal 2006 at $1.5 billion. "While we are disappointed with our financial results for 2007, we expect significant improvement in our results for 2008," Scott L. Morris, Avista chairman, president and chief executive officer, said. "This is primarily due to the implementation of a general rate increase in Washington on January 1, the current outlook for improved hydroelectric generation and the planned refinancing of high-cost debt." On Feb. 15, 2008, Avista Corp.'s board of directors declared a quarterly dividend of $0.165 per share on the company's common stock, an increase of 10%. The dividend is payable March 14, 2008, to shareholders of record at the close of business on Feb. 28, 2008. Payment of dividends is subject to declaration and approval by the board each quarter. "This action is indicative of the significant progress that our company has made and our positive outlook for the future," Mr. Morris added. "This progress was also recognized by the credit rating agencies, which have all upgraded one or more components of our debt over the past nine months." "Management intends to recommend that the board further review our dividend level during the second half of 2008," Mr. Morris expressed. Liquidity and Capital Resources The majority of the $169 million of proceeds from the Avista Energy transaction were deployed into its regulated utility operations. The company has long-term debt maturities of $318 million in 2008, the majority of which is $273 million of 9.75% senior notes that mature on June 1, 2008. Avista will issue new debt to fund a significant portion of the maturing debt, and it should be at a substantially lower interest rate. Utility capital expenditures were $206 million for 2007. Avista expects utility capital expenditures to be approximately $200 million in 2008 and over $200 million in each of 2009 and 2010. As of Dec. 31, 2007, the company's balance sheet reflected a total assets of $3.2 billion, total liabilities of $2.3 billion, and a total stockholders' equity of $0.9 billion. About Avista Corp. Headquartered in Spokane, Washington, Avista Corp. (NYSE: AVA) -- http://www.avistacorp.com/-- is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is the company's operating division that provides service to 348,000 electric and 305,000 natural gas customers in three Western states. Avista's primary, non-regulated subsidiary is Advantage IQ. * * * As reported in the Troubled Company Reporter on Feb. 8, 2008, Fitch Ratings has affirmed Avista Corporation's ratings: long-term issuer default rating 'BB+'; senior secured debt 'BBB'; secured bank facility 'BBB'; senior unsecured debt 'BBB-'; trust preferred 'BB+';and short-term IDR 'B'. BFC SILVERTON: Moody's Junks Rating on $75 Mil. Notes From 'A2' --------------------------------------------------------------- Moody's Investors Service downgraded ratings of eight classes of notes issued by BFC Silverton CDO, Ltd., and left on review for possible further rating action ratings of one of these classes of notes. The notes affected by this rating action are: Class Description: Up to $450,000,000 Class A-1 Senior Variable Funding Floating Rate Notes Due 2046 -- Prior Rating: Aa1, on review for possible downgrade -- Current Rating: B3, on review with future direction uncertain Class Description: Up to $450,000,000 Class A-2 Senior Floating Rate Notes Due 2046 -- Prior Rating: Aa1, on review for possible downgrade -- Current Rating: C Class Description: $75,000,000 Class B-1 Senior Floating Rate -- Notes Due 2046 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: C Class Description: $75,000,000 Class B-2 Senior Floating Rate Notes Due 2046 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C Class Description: $56,250,000 Class C Senior Floating Rate Notes Due 2046 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C Class Description: $30,000,000 Class D Floating Rate Deferrable Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $26,250,000 Class E Floating Rate Deferrable Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $7,500,000 Class F Floating Rate Deferrable Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Trustee on Nov. 13, 2007, of an event of default caused by the Class A/B Par Value Coverage Ratio falling below 100% pursuant to Section 5.1(d) of the Indenture dated Oct. 31, 2006. This event of default is still continuing. BFC Silverton CDO, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard the Trustee reports that a majority of the Controlling Class has directed the Trustee to declare the principal of and accrued and unpaid interest on the Notes to be immediately due and payable and to terminate the Reinvestment Period. Furthermore, according to the Trustee, a majority of the Controlling Class has directed the Trustee to commence the process of the sale and liquidation of the Collateral in accordance with relevant provisions of the transaction documents. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and outcome of the liquidation. Because of this uncertainty, the ratings assigned to the Class A-1 Notes remain on review for possible further action. BSABS AC: Moody's Puts 40 Tranches on Review for Possible Cuts -------------------------------------------------------------- Moody's Investors Service placed 40 tranches on review for possible downgrade from fourteen BSABS AC deals issued in 2004 and 2005. The rating actions are based on the respective tranches current credit enhancement levels compared to current projected pool losses. The complete rating actions are: Issuer: Bear Stearns Asset Backed Securities I Trust 2004-AC4 -- Cl. B, Placed on Review for Possible Downgrade, currently Baa2 Issuer: Bear Stearns Asset Backed Securities I Trust 2004-AC5 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2004-AC6 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2004-AC7 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC1 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC2 -- Cl. I-B-3, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. II-B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. II-B-3, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC3 -- Cl. I-B-3, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. I-B-4, Placed on Review for Possible Downgrade, currently Ba2 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC4 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. B-4, Placed on Review for Possible Downgrade, currently Ba2 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC5 -- Cl. I-B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. I-B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. I-B-3, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. I-B-4, Placed on Review for Possible Downgrade, currently Ba2 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC6 -- Cl. I-B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. I-B-3, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. I-B-4, Placed on Review for Possible Downgrade, currently Ba2 -- Cl. II-B-2, Placed on Review for Possible Downgrade, currently Baa1 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC9 -- Cl. M-2, Placed on Review for Possible Downgrade, currently A2 -- Cl. M-3, Placed on Review for Possible Downgrade, currently A3 -- Cl. B-1, Placed on Review for Possible Downgrade, currently Baa1 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 Issuer: Bear Stearns Asset Backed Securities Trust I Series 2005- AC7 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. B-4, Placed on Review for Possible Downgrade, currently Ba2 Issuer: Bear Stearns Asset-Backed Securities I Trust 2004-AC2 -- Cl. B-2, Placed on Review for Possible Downgrade, currently A2 -- Cl. B-3, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. B-4, Placed on Review for Possible Downgrade, currently Ba2 -- Cl. B-5, Placed on Review for Possible Downgrade, currently B2 Issuer: Bear Stearns Asset-Backed Securities I Trust 2004-AC3 -- Cl. B-2, Placed on Review for Possible Downgrade, currently Baa2 BUILDERS FIRSTSOURCE: Incurs $20.4MM Net Loss for 2007 Fourth Qtr. ------------------------------------------------------------------ Builders FirstSource Inc. reported net loss of $20.4 million for the fourth quarter ended Dec. 31, 2007 compared to net income of $3.9 million for the same quarter of the prior year. For the full fiscal year ended Dec. 31, 2007 net loss was $23.8 million compared to net income of $68.9 million for fiscal 2006. Sales for the 2007 fourth quarter were $302.3 million compared to $438.6 million. Sales declined $136.3 million year-over-year or 31.1%. The company's sales volume dropped 29.8% due to continued weakness in the housing market. Overall, the company estimates that housing activity in its markets fell 34.7% year-over-year, which was partially offset by sales volume growth of 2.4% due to market share gains and 1.5% due to new operations. For the fiscal year ended Dec. 31, 2007, sales were $1,592.5 million compared to $2,239.5 million. Sales declined $647.0 million or 28.9%, due to a 24.6% sales volume decline and a 2.7 percent decline in commodity prices. The company estimates that housing activity in its markets fell 34.1% for fiscal year 2007 when compared to fiscal year 2006, which was partially offset by sales volume growth due to market share gains of 6.1% and new operations of 1.8%. In the fourth quarter of 2007, the company permanently retired its term loan and replaced its $110 million long-term revolver and $15 million pre-funded letter of credit facility upon entering into a new $350 million revolving credit facility. We wrote off $1.6 million in deferred loan costs related to the old credit facility. As of Dec. 31, 2007, the company's cash on hand was $97.6 million, and funded debt was $275.0 million. Operating cash flow was $11.8 million compared to $38.4 million for the fourth quarter of 2007 and 2006, respectively. Operating cash flow was $71.5 million compared to $111.8 million for fiscal years 2007 and 2006, respectively. Capital expenditures were $2.6 million compared to $5.1 million for the fourth quarter of 2007 and 2006. Capital expenditures were $10.1 million and $27.2 million for 2007 and 2006, respectively. "During the fourth quarter, we saw a further decline in housing activity which negatively impacted our results," Floyd Sherman, Builders FirstSource chief executive officer, said. "Housing starts in our markets fell an estimated 35 percent for the fourth quarter of 2007 year-over-year and 34 percent for fiscal 2007." "We partially mitigated the decline in housing starts by growing market share and adding new operations," Mr. Sherman stated. "The change in market prices for lumber & lumber sheet goods had a nominal impact on sales during the quarter." "Although economic conditions have continued to deteriorate throughout 2007, we have maintained a clear focus on reducing operating costs, improving operating efficiencies, and generating positive cash flow," Mr. Sherman continued. "Our selling, general and administrative expenses decreased by 14.6 percent as compared to 2006 and we have reduced our headcount by approximately 36 percent since the housing correction began in March 2006." "We believe this expense reduction strategy will help us to weather the current downturn and create a more efficient organization," Mr. Sherman added. "We are not only focused on the fiscal side of our business, but also, and more particularly, on maintaining and developing customer relationships." "Our people in the field are critical to this effort," Mr. Sherman went on to say. "I want to thank all of our employees for their continued focus and hard work during this difficult time in our industry." "We continue to execute our strategy of reducing headcount, rationalizing physical capacity, restructuring underperforming operations and driving operational improvements," Charles Horn, Builders FirstSource senior vice president and chief financial officer, added. "Our focus has been on generating cash and protecting liquidity." "We believe we have been successful," Mr. Horn states. "For 2007, our operating cash flow was $71.5 million and our free cash flow, defined as operating cash flow less capital expenditures, was $61.4 million." "In addition, we improved our overall liquidity during the fourth quarter of 2007 by entering into a new $350 million revolving credit facility," Mr. Horn imparted. "We believe this credit facility will enable us to better manage our business through the current downturn." "At the end of December, we had approximately $120 in availability under the credit facility and $98 million in cash on hand for nearly $220 million in combined liquidity," Mr. Horn concluded. At Dec. 31, 2007, the company had a total stockholders' equity $2.4 million. About Builders FirstSource Headquartered in Dallas, Texas, Builders FirstSource Inc. (Nasdaq: BLDR) -- http://www.bldr.com/-- is a supplier and manufacturer of structural and related building products for residential new construction. The company operates in 13 states, principally in the southern and eastern United States, and has 68 distribution centers and 61 manufacturing facilities, many of which are located on the same premises as its distribution facilities. Manufacturing facilities include plants that manufacture roof and floor trusses, wall panels, stairs, aluminum and vinyl windows, custom millwork and pre-hung doors. Builders FirstSource also distributes windows, interior and exterior doors, dimensional lumber and lumber sheet goods, millwork and other building products. * * * Moody's Investor Service placed Builders FirstSource Inc.'s probability of default rating at 'B1' in September 2006. The rating still holds to date with a negative outlook. CAIRN MEZZ: Six Classes of Notes Acquire Moody's Junks Ratings -------------------------------------------------------------- Moody's Investors Service downgraded ratings of eight classes of notes issued by Cairn Mezz ABS CDO II Limited, and left on review for possible further downgrade the rating of three of these classes. The notes affected by this rating action are: Class Description: $30,000,000 Class A2A Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa2, on review for possible downgrade Class Description: U$120,000,000 Class A2B Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $37,500,000 Class B1 Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $11,250,000 Class B2 Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa1 on review for possible downgrade -- Current Rating: Ca Class Description: $33,750,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $30,000,000 Class D Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $16,875,000 Class E Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2047 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: C Class Description: $10,000,000 Combination Notes Due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C The rating downgrade actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Jan. 31, 2008, as reported by the Trustee, of an event of default described in Section 5.1(i) of the Indenture dated Nov. 9, 2006. Cairn Mezz ABS CDO II Limited is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the Class A Overcollateralization Ratio failed to meet the required level, as required in Section 5.1(i) of the Indenture. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to the Class A2A Notes, Class A2B Notes and Class B1 Notes remain on review for possible further action. CAPRI CONDOS: Owes Red Mountain Bank $16.3 Mil. Construction Loan ----------------------------------------------------------------- The Capri Condominiums LP, which filed for chapter 11 bankruptcy on Feb. 6, 2008, listed $16.3 million in debt owed to Red Mountain Bank, Crystal Jarvis writes for the Birmingham Business Journal, citing documents delivered to the U.S. Bankruptcy Court for the Middle District of Florida. Based on the court documents, Red Mountain Bank initially extended $28 million to Capri for the development of Capri on Caldwell, valued at $27.1 million. B.L Harbert International LLC, general contractor of Capri on Caldwell, is owed $40,000, BizJournal relates, citing court documents. Based on the report, the Debtor was among those which created the sudden surge of condo developments in Birmingham around 2006 with its Capri on Caldwell, a 48-unit luxury condo in Highland Avenue. BizJournal reports that the Debtor proceeded with the project's ground-breaking even without any pre-sale requirement. About Capri Condominiums Tampa, Florida-based The Capri Condominiums LP owns and manages condominiums. Capri is operated by Euro American Investors Group in The Netherlands, which runs an office in Tampa, Florida. Euro American Investors -- http://www.eaig.nl/-- is an international company that offers a complete package property with the focus on the United States and Europe. Since its launch in 1979, Euro American Investors built a diversified portfolio of properties, apartments, offices, commercial buildings, and shopping malls. Capri Condominiums sought protection under chapter 11 on Feb. 6, 2008 (Bankr. M.D. Fla. Case No. 08-01553). Maureen A. Vitucci, Esq., at Gray Robinson PA represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between $10 million and $50 million. CARIBE MEDIA: High Debt Leverage Cues S&P to Retain 'B' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Caribe Media Inc., including the 'B' corporate credit rating. The ratings were removed from CreditWatch, where they were placed Nov. 13, 2007 with positive implications. The rating outlook is stable. The ratings consider the credit quality of parent company Local Insight Media LP. "The affirmation and removal from CreditWatch stem from our expectation, following our review, that LIM's high debt leverage will not improve to levels that are in line with a higher rating over the near term," said Standard & Poor's credit analyst Ariel Silverberg. S&P expects that management's growth objectives, along with a more challenging economic environment that is likely to affect some of LIM's markets, will prevent a material de-leveraging of the company's balance sheet in the near term. These factors are somewhat tempered by LIM's entrenched positions in several geographically diverse markets with high barriers to entry, including Caribe's solid, incumbent position in the markets it serves. The steady cash flow stream that Caribe receives from a publishing rights royalty payment is another positive rating factor. Caribe is a holding company with operations in Puerto Rico and the Dominican Republic. The company owns 60% of the incumbent directory publisher in Puerto Rico (Axesa) and 100% of the incumbent directory publisher in the Dominican Republic (Paginas Amarillas), as well as long-term exclusive directory publishing rights from incumbent Puerto Rico Telephone Co. The royalty payment accounts for the majority of Caribe's cash flow, followed by the contribution from Axesa. Both Axesa and Paginas Amarillas have strong, incumbent positions in the markets they serve, controlling nearly 100% of the directory publishing in their respective markets. Given the geographic isolation of the Puerto Rican and Dominican Republic markets, barriers to entry for independent publishers are high due to an inability to achieve economies of scale from expanding into contiguous markets. S&P expects that given the company's protected market positions and recent operating performance, Caribe will continue to achieve modest amounts of top-line and EBITDA growth going forward. CBA COMMERCIAL: Moody's Pares Ratings on $1.9 Mil. Notes to 'B1' ---------------------------------------------------------------- Moody's Investors Service downgraded one class, placed four classes on review for possible downgrade, and affirmed these ratings of three classes of CBA Commercial Mortgage Pass-Through Certificates, Series 2006-1: -- Class A, $109,783,458, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class M-1, $4,587,000, affirmed at Aa2 -- Class M-2, $4,587,000, placed on review for possible downgrade -- Class M-3, $5,004,000, placed on review for possible downgrade -- Class M-4, $2,919,000, placed on review for possible downgrade -- Class M-5, $1,877,000, downgraded to B1 from Ba2 and placed on review for possible downgrade As of the Jan. 25, 2008 distribution date, the transaction's aggregate balance has decreased by approximately 19.1% to $134.9 million from $166.8 million at securitization. The Certificates are collateralized by 239 mortgage loans, with the top 10 loans representing 28.6% of the pool. There have been no loans defeased from the trust. Three loans have been liquidated from the trust resulting in aggregate realized losses of approximately $331,366. Moody's has not received operating statements for any of the loans in the pool and accordingly no loan to value estimates were possible. Twenty-nine loans, representing 13.1% of the pool, are in special servicing. Moody's is estimating $3.5 million of losses from all the specially serviced loans. Moody's is downgrading class M-5 due to the high percentage of loans (13.1%) in special servicing and the projected losses from those loans. CHIQUITA BRANDS: S&P Assigns 'CCC' Rating on $200M Senior Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC' senior unsecured rating to Chiquita Brands International Inc.'s $200 million convertible senior notes due 2016. Net proceeds from the issuance were used to repay a portion of the $375 million term loan C ($132 million outstanding at Dec. 31, 2007, pro forma for this notes offering) of its senior secured credit facility. About $820 million of debt was outstanding at Dec. 31, 2007. The ratings on Cincinnati, Ohio-based Chiquita reflect the company's high debt leverage, weak credit measures, and its product concentration in bananas and packaged salad. The company competes in the fruit and vegetable industry, which is mature and faces uncontrollable factors such as global supply, world trade policies, political risk, currency swings, weather, and disease. Ratings List Chiquita Brands International Inc. Corporate Credit Rating B-/Negative/-- Rating Assigned Chiquita Brands International Inc. $200 Million 4.25% Convertible Notes Due 2016 CCC CHRYSLER LLC: Streamlines Production; Won't Sell Car Clones ----------------------------------------------------------- Chrysler LLC intends to ditch the "car cloning" concept so often used in the automotive industry and concentrate on selling its remaining models, The Wall Street Journal reports. Cloning cars, or creating different brands of the same basic car design or a "common platform", is a common ploy used by most automakers to increase sales and profitability, says WSJ. Chrysler said, however, that it won't employ this sales technique anymore, and instead will focus on selling unique car models. The company's decision came after it lost its tooling battle with Plastech Engineered Products Inc. As reported in the Troubled Company Reporter on Feb. 20, 2008, the U.S. Bankruptcy Court for the Eastern District of Michigan denied the company's request to pull out tooling equipment from Plastech's plants. However, the parties already agreed to extend their interim production pact, under which Plastech will continue to manufacture and deliver component parts to Chrysler until Feb. 27, 2008. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. About Chrysler LLC Based in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Nov. 12, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Chrysler LLC and DaimlerChrysler Financial Services Americas LLC and removed it from CreditWatch with positive implications, where it was placed Sept. 26, 2007. S&P said the outlook is negative. CIFG GUARANTY: S&P Holds 'AAA' Rating; Retains Negative Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services took rating actions on several monoline bond insurers following additional stress tests with respect to their domestic nonprime mortgage exposure. -- The 'AAA' financial strength ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. were affirmed and retain a negative outlook. -- The 'AAA' financial strength rating on Ambac Assurance Corp. was affirmed and remains on CreditWatch with negative implications; and -- The 'AAA' financial strength rating on MBIA Insurance Corp. was removed from CreditWatch and a negative outlook was assigned; -- The financial strength rating on Financial Guaranty Insurance Co. was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications; -- The financial strength ratings on XL Capital Assurance Inc. and XL Financial Assurance Ltd. were lowered to 'A-' from 'AAA' and remain on CreditWatch with negative implications; The affirmation of S&P's 'AAA' financial strength rating on CIFG reflects the contribution of $1.5 billion in capital resources to CIFG Holding by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne to support CIFG's claims-paying resources. CIFG's outlook was changed to negative from stable in June 2007 for reasons unconnected to its subprime exposure. Rather, S&P looked at the effectiveness and processes of the company's board, appropriate succession planning, and the degree of long-term support to be provided by its parent Natixis S.A. The assignment of the negative outlook also reflected S&P's views relating to CIFG's below-average earnings and return on earnings. Nevertheless, S&P considers the $1.5 billion capital contribution to be an important statement by CNCE and BFBP about their near- term commitment to the financial guaranty industry and CIFG. The affirmation of S&P's 'AAA' financial strength and financial enhancement ratings on Ambac Assurance Corp. and S&P's 'AA' rating of Anchorage Finance Sub-Trusts I-IV and Dutch Harbor Finance Sub- Trusts I-IV (committed capital facilities supported by, and for the benefit of, Ambac) and holding company Ambac Financial Group Inc. reflects S&P's assessment of the scope of Ambac's capital- raising plans and the company's ability to implement those plans. S&P left the ratings on CreditWatch with negative implications to reflect uncertainty surrounding the risk profile and capitalization plans for the reported new corporate structure being contemplated by the holding company. The removal from CreditWatch of, and assignment of negative outlooks on, MBIA Insurance Corp., MBIA Inc., and North Castle Custodial Trusts I-VIII (a committed capital facility supported by, and for the benefit of, MBIA) reflect MBIA's success in accessing $2.6 billion of additional claims-paying resources, which, in S&P's view, is a strong statement of management's ability to address the concerns relating to the capital adequacy of the company. The downgrades on FGIC, FGIC Corp., and Grand Central Capital Trusts I-VI (a committed capital facility supported by, and for the benefit of, FGIC) reflect S&P's current assessment of potential losses, which is higher than previous estimates. The downgrades on XLCA, XLFA, XL Capital Assurance (UK) Ltd., and Twin Reefs Pass-Through Trust (a committed capital facility supported by, and for the benefit of, XLFA) reflect S&P's assessment that the company's evolving capital plan has meaningful execution and timing risk. CIMAREX ENERGY: Earns $130.0 Mil. for Fourth Quarter Ended Dec. 31 ------------------------------------------------------------------ Cimarex Energy Co. reported net income fourth quarter 2007 ended Dec. 31 of $130.0 million. This compares to fourth-quarter 2006 earnings of $58.7 million. For the year ended Dec. 31, 2007, Cimarex reported net income of $346.5 million. In 2006, net income totaled $345.7 million. In the fourth quarter of 2007, the company generated revenues $438.4 million compared with $295.6 million total revenues for the fourth quarter of 2006. For the fiscal 2007, the company's revenues totaled $1,431.2 million, compared to $1,267.1 million for 2006. Revenues from oil and gas sales in the fourth quarter of 2007 were $417.6 million, compared to $283.7 million in the same period of 2006. Fourth-quarter 2007 cash flow from operations totaled $298.7 million versus $213.1 million in the same period of 2006. The increase in fourth-quarter 2007 revenues, earnings and cash flow is primarily a result of higher production and oil and gas prices. Fourth-quarter 2007 gas prices increased 24% to $7.71 per thousand cubic feet and oil rose 58% to $88.07 per barrel from the same period of 2006. Cash flow from operations for 2007 totaled $985.7 million versus $917.7 million in 2006(1). As of Dec. 31, 2007, the company's balance sheet showed total shareholders' equity of $3.25 billion. About Cimarex Energy Headquartered in Denver, Cimarex Energy Co. (NYSE:XEC) -- http://www.cimarex.com/-- is an independent oil and gas exploration and production company with principal operations in the Mid-Continent, Gulf Coast, Permian Basin of West Texas and New Mexico and Gulf of Mexico areas of the U.S. * * * As reported in the Troubled Company Reporter on April 16, 2007, Moody's assigned a 'B1' note rating to Cimarex Energy's $300 million senior unsecured 10 year note offering. At the same time, Moody's affirmed XEC's existing 'Ba3' corporate family rating, 'Ba3' Probability of Default Rating, and 'B1' senior unsecured note rating. Under Moody's Loss Given Default debt notching methodology, the two note issues are rated 'B1' (LGD 5; 70%). CLEAR CHANNEL: Wachovia's Lawsuit May Derail Amended TV Sale Deal ----------------------------------------------------------------- Wachovia Corp.'s lawsuit filed on Friday with the North Carolina Superior Court could thwart a sale deal between Clear Channel Communications Inc. and Providence Equity Partners Inc., various sources report. Wachovia filed for a declaratory judgment to liberate itself from funding the sale after the parties amended the terms of the transaction, dropping the price from $1.2 billion to $1.1 billion, the Wall Street Journal recounts. Wachovia, which agreed in April to finance $500 million of the deal, contends that the revision of the original transaction terms nullified its financing commitment, according to WSJ. Reuters discloses that a Wachovia spokeswoman said Providence demanded that the lenders be held to the terms of the deal it had rejected. The bank's efforts to resolve the issue were unsuccessful. Wachovia believes that it is in the best interest of its shareholders to ask a court to confirm its nulled pledge. A Providence spokesman called the suit "baseless," WSJ relates. As reported in the Troubled Company Reporter on Feb. 19, 2008, Clear Channel filed a lawsuit against Providence Equity to compel the private equity firm to complete its acquisition of Clear Channel's Television Group, which includes 56 television stations, including 18 digital multicast stations, located in 24 markets across the United States, after Providence disclosed in November 2007 that it had reservations about the transaction. Providence said it may try to renegotiate the purchase price, and should the deal fails, it would have to pay a $45 million break-up fee. UBS AG and Goldman Sachs Group Inc., which are part of the group funding the sale deal will carry out their original financing commitments, WSJ says citing a person familiar with the matter said. Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. * * * As reported in the Troubled Company Reporter on Jan. 30, 2008, Standard & Poor's Ratings Services said its ratings on Clear Channel Communications Inc., including the 'B+' corporate credit rating, remain on CreditWatch with negative implications. S&P originally placed them on CreditWatch on Oct. 26, 2006, following the company's announcement that it was exploring strategic alternatives to enhance shareholder value. COMMERCIAL MORTGAGE: Moody's Affirms Junk Ratings on Three Classes ------------------------------------------------------------------ Moody's Investors Service upgraded these ratings of two classes and affirmed these ratings of four classes of Commercial Mortgage Acceptance Corp., Commercial Mortgage Pass-Through Certificates, Series 1997-ML1: -- Class IO, Notional, affirmed at Aaa -- Class D, $4,187,069, Fixed, upgraded to A1 from A2 -- Class E, $16,969,000, Fixed, upgraded to Baa2 from Baa3 -- Class F-1, $10,000,000, Fixed, affirmed at Caa3 -- Class F-2, $40,909,000, Fixed, affirmed at Caa1 -- Class G, $38,429,941, Fixed, affirmed at C As of the Feb. 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 87.0% to $110.5 million from $848.5 million at securitization. The Certificates are collateralized by two remaining loans. Neither loan is in special servicing. The largest loan, Newton Oldacre McDonald ($77.5 million-70.1%) is secured by a crossed pool of 18 community shopping centers and two free standing stores located in Alabama, Tennessee, Florida, Mississippi, Louisiana and Kentucky. Winn-Dixie, which declared bankruptcy in 2005, represents the largest tenant concentration. Winn-Dixie has rejected leases in three locations and continues to occupy stores in eight locations. The company emerged from bankruptcy in November of 2006. The portfolio's occupancy has increased to 85.3% from 80.9% at last review. The second loan, Ritz Carlton Clayton ($33.0 million-29.9%) is secured by a 301 room hotel located in Clayton, Mo., a suburb west of St. Louis. RevPAR at the hotel has increased from $134 in 2006 to $142 for the trailing 12 month period ending November 2007. CONSECO INC: Expects to File Annual Financial Report on March 17 ---------------------------------------------------------------- Conseco Inc. will delay the filing of its Form 10-K for the year ended Dec. 31, 2007. The company expects that it will file its 2007 Form 10-K on or about March 17, 2008. The extension will allow the company time to complete the Dec. 31, 2007, financial statements and incorporate the correction of errors, the majority of which were identified during the remediation of the material weakness in internal controls disclosed in its 2006 Form 10-K and subsequent quarterly filings with the Securities and Exchange Commission. Due to the significance of these corrections, Conseco will restate its financial statements for the years ended Dec. 31, 2006 and 2005, along with affected Selected Consolidated Financial Data for 2004 and 2003, and quarterly financial information for 2006 and the first three quarters of 2007. Therefore, the issued financial statements of the company for those periods should no longer be relied upon. Although the company has not yet finalized its Dec. 31, 2007, financial statements, the company estimates that the errors identified in the fourth quarter of 2007 will result in an overstatement of reported consolidated shareholders' equity at Sept. 30, 2007, in a range of $15 to $35 million. The effect on net income or loss in prior periods may be positive or negative in a particular period and will vary in amount from period to period. The company estimates that the correction to net income/loss will not exceed plus or minus $15 million for any prior annual period. The company will also correct identified immaterial errors, which had been recognized through cumulative adjustments to issued financial statements. The significant errors relate to adjustments to insurance policy benefits and the liabilities for insurance products in the specified disease and life blocks of business in the Conseco Insurance Group segment and in the long-term care block of business in the Other Business in Run-off segment. The adjustments were discovered through procedures it performed to remediate its material control weakness. The company reviewed certain actuarial valuation processes for approximately 2,400 types of policy forms, encompassing insurance products that accounted for more than 80% of the total liabilities for the business subject to the remediation review procedures. The focus of the remediation program in 2008 will be on improving the processes, systems and controls related to actuarial reporting to address the new findings. The material weakness will not be fully remediated until the improved internal control processes resulting from its procedures are operating effectively for a sufficient period of time to provide reasonable assurance as to their effectiveness. The company expects to report results for the fourth quarter of 2007 after the market closes on Tuesday, March 11, 2008, and expects to host its quarterly call with investors at 10:00 a.m. EDT on Wednesday, March 12, 2008. About Conseco Inc. Headquartered in Carmel, Indiana, Conseco Inc. (NYSE: CNO) -- http://www.conseco.com/-- is the holding company for a group of insurance companies operating throughout the United States that develop, market and administer supplemental health insurance, annuity, individual life insurance and other insurance products. The company became the successor to Conseco Inc. (Old Conseco), in connection with its bankruptcy reorganization. CNO focuses on serving the senior and middle-income markets. The company sells its products through three distribution channels: career agents, professional independent producers and direct marketing. CNO operates through its segments, which includes Bankers Life, Conseco Insurance Group, Colonial Penn, other business in run-off and corporate operations. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings has downgraded the Issuer Default Rating, senior debt, preferred stock, and insurer financial strength ratings of Conseco Inc. and its subsidiaries. The preferred stock rating is being withdrawn as there are no current outstanding issues and no plans for issuance. The rating action affects approximately $1.2 billion in outstanding debt. All affected ratings are listed below. The outlook remains negative. CONSECO INC: S&P's Ratings Unaffected by Restatement of Earnings ---------------------------------------------------------------- Standard & Poor's Ratings Services said that the announcement by Conseco Inc. (B+/Negative/--) that it will be restating its earnings for periods prior to year-end 2007 will not affect the ratings on the company. Although the restatement is expected to result in Conseco's historical financial results being viewed as weaker than prior to the restatement, the difference in results is not expected to be significant. The restatement is largely the result of errors related to adjustments to reserves for insurance products in the specified disease and life blocks of business in the Conseco Insurance Group segment and in the company's run-off block of long-term care business. The negative outlook on Conseco's rating continues to reflect Standard & Poor's concerns regarding the company's financial performance during the next 6-12 months. As previously noted, if significant losses in the long-term care run-off block continue, or if additional, significant reserve strengthenings are taken in any other lines of business, the ratings will likely be lowered by one notch. CORNERSTONE MINISTRIES: Sec. 341 Creditors Meeting on March 18 -------------------------------------------------------------- The U.S. Trustee for Region 21 will convene a meeting of creditors in Cornerstone Ministries Investments, Inc's Chapter 11 case, on March 18, 2008, at 10:00 a.m., at Romm G-18, Federal Building, 121 Springs Street, in Gainesville, Georgia. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. The Section 341(a) Meeting has been scheduled within the time required by Rule 2003 of the Federal Rules of the Bankruptcy Procedure. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Based in Cumming, Georgia, Cornerstone Ministries Investments, Inc. -- http://www.cmiatlanta.com/-- offers financial assistance in the form of bridge, construction, development, and interim loans to four non-profit groups: churches, daycare and faith-based schools, housing developments, and senior housing facilities. Founded in 1985 as Presbyterian Investors Fund, it began providing loans to for- profit agencies in late 2004 as long as the projects meet certain criteria (primarily affordable housing and senior living facilities). The company filed for chapter 11 petition on Feb. 10, 2008 (Bankr. N.D.Ga. Case No. 08-20355). J. Robert Williamson, Esq., at Scroggins and Williamson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors its listed total assets of $159,118,892 and total debts of $153,847,984. CORNERSTONE MINISTRIES: Can Hire BMC Group as Claims Agent --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia gave authority to Cornerstone Ministries Investments, LLC to employ BMC Group Inc. as its claims, noticing and balloting agent. BMC Group is expected to: (a) create and maintain a computer database of all creditors, claimants and parties-in-interest; (b) prepare and serve required notices in this Chapter 11 case, which may include: (i) notice of the commencement and the initial meeting of creditors; (ii) notice of the claims bar date, if any; (iii) notice of objections to claims; (iv) notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; and (v) other miscellaneous notice to any entities, as may be deemed necessary for the orderly administration of the case; (c) after the mailing of a particular notice, prepare for filing with the Clerk's Office a certificate or affidavit of service that references the document served and includes an alphabetical listing of the parties to whom the notice was mailed and the date and manner of mailing; (d) receive and record proofs of claim and proofs of interest; (e) create and maintain official claims registers, including, among other things, the following information for each proof of claim or proof of interest: (i) the name of the Debtor; (ii) the name and address of the claimant, and any agent thereof; (iii) the date received; (iv) the claim number assigned; and (v) the asserted amount and classification of claim; (f) implement necessary security measures to ensure the completeness and integrity of the claims registers; (g) transmit to the Clerk's Office a copy of the claims registers upon request and at agreed upon intervals; (h) act as balloting agent which will include these services: (i) print ballots; (ii) coordinate mailing of ballots, disclosure statement, and plan of reorganization and other appropriate materials to all voting and non- voting parties, and provide affidavit of service; (iii) prepare voting reports by plan class, creditor, or shareholder, and amount for review and approval by the Debtor and its counsel; (iv) establish a toll-free number to receive questions regarding the voting on the plan; and (v) receive and tabulate ballots, inspect ballots for conformity to voting procedures, date stamp and number ballots consecutively, provide computerized balloting database services and certify the tabulation results; (i) maintain an up-to-date creditor matrix, which list shall be available upon request of a party-in-interest or the Clerk's Office; (j) record all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and provide notice of such transfers as required thereunder; (k) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders, and other requirements; (l) provide temporary employees to process claims, as necessary; (m) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; (n) perform such other administrative and support related noticing, claims, docketing, solicitation and distribution services as the Debtor or the Clerk's Office may request; (o) provide reconciliation and resolution of claims services to the Debtor; (p) aid in the preparation of the Schedules of Assets and Liabilities and the Statement of Financial Affairs; and (q) aid in the preparation, mailing, and tabulation of ballots for the purpose of accepting or rejecting any plans of reorganization proposed by the Debtor. The Debtor agreed to pay the firm at these billing rates: Designation Hourly Rate ----------- ----------- Seniors/Principals $205 - $295 Consultants $110 - $185 Admin Managers $95 Data Entry/Clerical $45 To the best of Debtor's knowledge, the firm does not hold any interest adverse to the Debtor and its estates and is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Based in Cumming, Georgia, Cornerstone Ministries Investments, Inc. -- http://www.cmiatlanta.com/-- offers financial assistance in the form of bridge, construction, development, and interim loans to four non-profit groups: churches, daycare and faith-based schools, housing developments, and senior housing facilities. Founded in 1985 as Presbyterian Investors Fund, it began providing loans to for- profit agencies in late 2004 as long as the projects meet certain criteria (primarily affordable housing and senior living facilities). The company filed for chapter 11 petition on Feb. 10, 2008 (Bankr. N.D.Ga. Case No. 08-20355). J. Robert Williamson, Esq., at Scroggins and Williamson represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $159,118,892 and total debts of $153,847,984. COUNTRYWIDE FINANCIAL: BofA to Inherit Mortgage Crisis Lawsuits --------------------------------------------------------------- Bank of America Corp., which made a $4 billion buyout offer for Countrywide Financial Corp. in January, stands to inherit the latter's numerous lawsuits in line with the acquisition, Amy Miller of Law.com notes in her Feb. 22 article. Countrywide Financial's lawsuits stem from the subprime mortgage market collapse last year, which also resulted to cases being filed against Bank or America. Bank of America says it has factored Countrywide's legal expenses into the purchase. The deal is expected to go through later this year. Law.com notes that in Countrywide's third-quarter report last year, the company spent $52.4 million on legal, consulting, and accounting expenses, up from $47.3 million during the same period the previous year. The article notes these significant cases against Countrywide: -- a consolidated class action in Los Angeles federal district court that alleges Countrywide and 26 securities underwriters misled investors by falsely promising they will be able to handle the turbulent real estate and credit markets and by artificially boosting income by understating loan loss reserves in regulatory filings; -- a class action filed by employees in California federal court that claims that company executives concealed information from employees about the company's financial problems, which caused thousands of 401(k) plan participants to lose millions of dollars during the company's recent stock collapse; -- derivative suits filed in Delaware federal court that allege Countrywide's board of directors issued false and misleading statements in 2006 and 2007 concerning Countrywide CEO Angelo Mozilo's compensation package; -- three similar derivatives cases on behalf of Countrywide, pending in California federal court; -- a class action filed in September in federal district court in Los Angeles claiming that Countrywide violated the federal Racketeer Influenced and Corrupt Organizations Act; and -- a $100 million purported class action filed in federal district court in Boston by three African American borrowers who allege that subsidiaries Countrywide Home Loans Inc., and Countrywide Bank violated federal housing discrimination laws. About Bank of America Bank of America -- http://www.bankofamerica.com/-- is a financial institution, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk- management products and services. The company serves clients in 175 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 80 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. CREDIT SUISSE: Moody's Junks Rating on $47.9 Mil. Notes From 'B3' ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of one class and affirmed the ratings of nine classes of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 1998-C2 as follows: -- Class A2, $574,203,732, affirmed at Aaa -- Class AX, Notional, affirmed at Aaa -- Class B, $105,600,000, affirmed at Aaa -- Class C, $105,600,000, affirmed at Aaa -- Class D, $105,500,000, affirmed at Aaa -- Class E, $28,800,000, affirmed at Aaa -- Class F, $105,600,000, affirmed at Ba1 -- Class G, $19,200,000, affirmed at Ba2 -- Class H, $47,900,000, downgraded to Caa1 from B3 -- Class I, $19,200,000, affirmed at C As of the Feb. 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 41.9% to $1.1 billion from $1.9 billion at securitization. The Certificates are collateralized by 186 mortgage loans ranging in size from less than 1.0% to 6.5% of the pool, with the top 10 loans representing 44.0% of the pool. The pool consists of one shadow rated loan, representing 5.8% of the pool, a conduit component, representing 33.0% of the pool, and a credit tenant lease component, representing 14.6% of the pool. The balance is collateralized by 79 loans, representing 46.6% of the pool, which have been defeased and been replaced with U.S. Government securities. Seventeen loans have been liquidated from the pool, resulting in aggregate realized losses of approximately $34.5 million. Two loans, representing 1.6% of the pool, are in special servicing. Moody's has estimated aggregate losses of approximately $10.8 million for all of the specially serviced loans. Twenty- four loans, representing 16.2% of the pool, are on the master servicer's watchlist. Excluding defeased and CTL loans, Moody's was provided with year- end 2006 operating results for approximately 90.8% of the performing loans and partial year 2007 operating results for approximately 50.2% of the performing loans. Moody's loan to value ratio for the conduit component is 95.6%, compared to 89.1% at Moody's last full review in February 2007 and 88.9% at securitization. Moody's is downgrading Class H due to projected losses from the specially serviced loans and LTV dispersion. Loans with Moody's LTV in excess of 100.0% increased to 39.5% of the pool from 25.9% at last review and loans with Moody's LTV in excess of 120.0% increased to 20.6% from 11.6% at last review. The shadow rated loan is the 180 Water Street Loan ($64.4 million -- 5.8%), which is secured by a 505,000 square foot office building located in the Financial District submarket of New York City. The property is 100.0% leased to the City of New York Department of Citywide Administrative Services (Moody's general obligation bond rating of New York City -- Aa2) under a long-term lease which expires in June 2018. The loan amortizes on a 20-year schedule and matures in August 2013. Moody's current shadow rating is A3, the same as at last review and compared to Ba2 at securitization. The top three conduit exposures represent 13.8% of the outstanding pool balance. The largest conduit exposure is the Butera Portfolio ($72.7 million -- 6.5%), which is secured by a portfolio of seven industrial properties, five office buildings and two retail centers. Built between 1986 and 1998, the properties are primarily located within the Washington-Baltimore MSA and total 1.4 million square feet. Moody's LTV is 90.5%, compared to 89.2% at last review and 95.8% at securitization. The second largest conduit exposure is the Koll Corporate Plaza Loan ($48.4 million -- 4.3%), which is secured by a 612,253 square foot office park. The property consists of six, four-story office buildings and is located in Iselin, New Jersey approximately 20 miles southwest of Manhattan. The loan matures in September 2008. The loan is on the master servicer's watchlist due to low DSCR. Moody's LTV is in excess of 100.0%, the same as at last review and compared to 88.6% at securitization. The third largest conduit exposure is the Camco Portfolio Loan ($33.1 million -- 3.0%), which is secured by two retail properties and one industrial property totaling 547,000 square feet. The properties are located in North Richland Hills (2) and Irving. Both cities are located between Dallas and Fort Worth, Texas. As of September 2007, the property was 83.5% leased compared to 91.2% at last review and 93.8% at securitization. The loan matures in October 2008. The loan is on the master servicer's watchlist due to low DSCR. Moody's LTV is in excess of 100.0%, compared to 96.1% at last review and 90.2% at securitization. The CTL component includes 35 loans secured by properties under bondable, triple-net or double-net leases. The largest exposures are Motel 6/Accor SA (52.3% of the CTL component) and CVS (21.9%; Moody's senior unsecured rating Baa2 -- stable outlook). CWABS ASSET-BACKED: Two Trust Notes Obtain S&P's Low-B Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class M-6 and B-1 asset-backed notes from CWABS Asset-Backed Notes Trust 2005-SD3 to 'BB+' from 'BBB' and to 'B' from 'BBB-', respectively. At the same time, S&P affirmed the ratings on the nine remaining classes from this transaction. The downgrades of class M-6 and B-1 reflect collateral performance that has eroded available credit support during recent months. Monthly realized losses for this transaction have exceeded excess interest for four of the past six months. The failure of excess interest to cover monthly losses has resulted in the deterioration of overcollateralization (O/C). The O/C level for this transaction is at approximately 68% of the targeted amount. The high levels of total and severe (90-plus days, foreclosures, and REOs) delinquencies in this transaction indicate that losses will continue to outpace excess interest and further erode the credit support. Over the past six remittance periods, the balance of loans that are severely delinquent has risen by $5.729 million to $21.061 million, an increase of approximately 37%. As of the January 2008 remittance period, cumulative losses for series 2005-SD3 were 1.30% of the original principal balance, total delinquencies were 34.07% of the current principal balance, and severe delinquencies were 24.17% of the current principal balance. The affirmations reflect stable collateral performance as of the January 2008 remittance period. Current and projected credit support percentages are sufficient to support the notes at the current rating levels. A combination of subordination, excess spread, and O/C provide credit support for this transaction. The underlying collateral backing the notes consists primarily of scratch-and-dent, fixed- and adjustable-rate mortgage loans secured by first and second liens on one- to four-family residential properties. Ratings Lowered CWABS Asset-Backed Notes Trust 2005-SD3 Asset-backed notes Rating ------ Class To From ----- -- ---- M-6 BB+ BBB B-1 B BBB- Ratings Affirmed CWABS Asset-Backed Notes Trust 2005-SD3 Asset-backed notes Class Rating ----- ------ A-1, A-1-B, A-1-C, A-2 AAA M-1 AA+ M-2 AA M-3 A+ M-4 A M-5 BBB+ DHFHAH LLC: Case Summary & 40 Largest Unsecured Creditors --------------------------------------------------------- Debtor: D.H.F.H.A.H., L.L.C. 15721 North Greenway-Hayden Loop, Suite 203 Scottsdale, AZ 85260 Bankruptcy Case No.: 08-01700 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- D.H.F.H.A.H., L.L.C. 08-01722 Chapter 11 Petition Date: February 25, 2008 Court: District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Lawrence D. Hirsch, Esq. (lhirsch@hirschlaw.net) 5020 East Shea Boulevard, Suite 150 Scottsdale, AZ 85254 Tel: (602) 996-9544 Fax: (480) 505-9707 D.H.F.H.A.H., LLC's Financial Condition: Total Assets: $4,100,000 Total Debts: $4,041,575 A. D.H.F.H.A.H., LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Maricopa County Treasurer investment $290,000 P.O. Box 78574 commercial Phoenix, AZ 85062-8574 property Terry Cuellar lien on $14,000 1625 East Northern, Suite 200 commercial property Phoenix, AZ 85020 C.C.G. Credence Cleaning commercial $9,219 1701 West Tuckey Lane, services Suite 103 Phoenix, AZ 85015 Wentworth, Webb & Postal, services re: real $2,574 L.L.C. property taxes Arizona Department of Revenue investment $1,400 commercial property City of Scottsdale investment $1,200 commercial property Metro Mechanical, Inc. commercial $1,188 services Thyssenkrupp Elevator commercial $697 services Redlin Electric commercial $395 services Charlie Brewer commercial $253 services Dust Devils Power Sweeping commercial $225 services Bondwriter Southwest, Inc. commercial $197 services Arizona Exterminating Co. commercial $187 services Qwest commercial $135 services Falcon Air Conditioning commercial $72 services Trek services commercial $65 services Federal Express commercial $48 services Flash Delivery, Inc. commercial $19 services Hartford Casualty Insurance commercial Unknown services Tierra Madre Landscape commercial Unknown services B. D.H.F.H.A.H., LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Maricopa County Treasurer investment $290,000 P.O. Box 78574 commercial Phoenix, AZ 85062-8574 property Terry Cuellar lien on $14,000 1625 East Northern, Suite 200 commercial property Phoenix, AZ 85020 C.C.G. Credence Cleaning commercial $9,219 1701 West Tuckey Lane, services Suite 103 Phoenix, AZ 85015 Wentworth, Webb & Postal, services re: real $2,574 L.L.C. property taxes Arizona Department of Revenue investment $1,400 commercial property City of Scottsdale investment $1,200 commercial property Metro Mechanical, Inc. commercial $1,188 services Thyssenkrupp Elevator commercial $697 services Redlin Electric commercial $395 services Charlie Brewer commercial $253 services Dust Devils Power Sweeping commercial $225 services Bondwriter Southwest, Inc. commercial $197 services Arizona Exterminating Co. commercial $187 services Qwest commercial $135 services Falcon Air Conditioning commercial $72 services Trek services commercial $65 services Federal Express commercial $48 services Flash Delivery, Inc. commercial $19 services Hartford Casualty Insurance commercial Unknown services Tierra Madre Landscape commercial Unknown services DOLE FOOD: Moody's Corp. Cuts Rating to 'B3' on Weak Performance ---------------------------------------------------------------- Moody's Investors Service lowered Dole Food Company, Inc.'s corporate family rating and probability of default ratings to B3 from B2, and downgraded the ratings of the company's unsecured shelf filings. Dole's other debt ratings were confirmed. The rating outlook is stable. Ratings Lowered Dole Food Company, Inc. -- Corporate family rating to B3 from B2 -- Probability of default rating to B3 from B2 -- Senior unsecured shelf, senior subordinated shelf and junior subordinated shelf to (P)Caa2 (LGD6,97%) from (P)Caa1 (LGD6,97%) Ratings Confirmed Dole Food Company, Inc. -- Senior secured term loan B at Ba3 (LGD2,23%) -- Senior secured prefunded letter of credit facility at Ba3 (LGD2,23%) Solvest. Ltd. -- Senior secured term loan C at Ba3 (LGD2,23%) -- Senior secured prefunded letter of credit facility at Ba3 (LGD2,23%) Ratings confirmed, LGD percentage adjusted Dole Food Company, Inc. -- Senior unsecured notes at Caa1 (LGD5). LGD percentage to 77% from 78% "The downgrade in the corporate family rating and probability of default rating reflects Dole's weaker than anticipated operating performance in its fresh vegetable segment, margin pressure in packaged foods, and the lack of success in turning around its small flowers business", noted Elaine Francolino, Vice President, Senior Credit Officer. As a result, Dole's credit metrics are weaker than those appropriate for its prior rating level -- debt to EBITDA at October 6, 2007 was still high at 8.2 times, and unlikely to improve in the near term to the 7.5 times threshold articulated in Moody's January 2007 credit opinion as appropriate for the company's prior (B2) rating level. Free cash flow has been negative since the end of fiscal 2004, stemming from low profitability. The shelf instruments that were also downgraded are assumed to be unguaranteed in the loss-given-default model, and consequently have a low priority ranking in the liabilities waterfall. The ratings of these instruments were negatively impacted by the higher level of accounts payable, perhaps resulting from rising input prices and from company growth. Headquartered in Westlake Village, California, Dole Food Company, Inc. is the world's largest producer of fresh fruit, fresh vegetables and fresh-cut flowers. The company also sells value- added fruits and vegetables. Sales for the twelve months ended October 2, 2007 exceeded $6.7 billion. EASTMAN KODAK: Fitch Revises Outlook to Stable from Negative ------------------------------------------------------------ Fitch Ratings revised Eastman Kodak Company's Rating Outlook to Stable from Negative and affirmed the ratings as: -- Issuer default rating at 'B'; -- Senior secured revolving credit facility at 'BB/RR1'; -- Senior unsecured debt at 'B/RR4'. Fitch's actions affect approximately $2.6 billion of total debt, including the company's undrawn $1 billion RCF. The revision of the Rating Outlook to Stable reflects Kodak's: -- Improving near-term free cash flow prospects, which are due primarily to declining cash restructuring payments following the completion of its significant 2004-2007 restructuring program; -- Revenue stabilization, as accelerating digital revenue growth has started to more than offset declines in traditional revenue; -- Improved credit protection measures and financial flexibility. Ratings concerns continue to center on: -- The ongoing decline of the traditional film business, which, in Fitch's estimate, generates the majority of the company's EBITDA; -- The significantly lower profit margins on digital technology, especially within the company's Consumer Digital Group, which continues to pressure the company's overall profitability. The ratings are supported by Kodak's: -- Strong credit protection metrics; -- Broad geographic revenue diversity; -- Strong brand name; -- Broad Consumer Digital Group product portfolio; -- Leading market position in traditional film market. Positive rating actions could occur if: -- Kodak exhibits consistent year-over-year improvement in digital profitability driven by a revenue mix shift toward higher-margin products, such as consumables for consumer inkjet printers and/or sustainable expense reductions; -- Significant improvement in free cash flow beyond Fitch's current expectations due to higher profitability as opposed to cash restructuring declines. Negative rating actions could occur if: -- The company undertakes significant debt-financed M&A or share repurchase activity; -- Ongoing deterioration in revenues and/or profitability resumes. Fitch believes liquidity at Dec. 31, 2007 was solid and supported by: approximately $2.9 billion of cash and cash equivalents, and an undrawn $1 billion senior secured RCF due October 2010 (approximately $850 million net of letters of credit); and free cash flow from continuing operations, which is expected to improve in 2008 from a loss of $52 million in 2007 due largely to the completion of the company's restructuring program, which required cash outlays of $400 million-$600 million annually since 2004. Approximately $150 million of residual cash restructuring payments are expected in 2008. Total debt as of Dec. 31, 2007 was approximately $1.6 billion, consisting primarily of: $250 million senior notes due May 2008, $500 million senior notes due 2013, and $575 million convertible senior notes due 2033, which have a conversion price of $31.02 per share and which can be put to the company in October 2010. Fitch believes the $250 million maturity in 2008 will be repaid with cash on hand. Fitch estimates total leverage and interest coverage of 1.5 times and 7.8x, respectively, at Dec. 31, 2007, compared to 2.4x and 4.3x at Dec. 31, 2006. The Recovery Ratings reflect Fitch's belief that Kodak's enterprise value would be maximized in a liquidation, rather than a going-concern, scenario. In estimating liquidation, Fitch applies advance rates of 80%, 20%, and 10%, respectively, to Kodak's accounts receivables, inventories, and property, plant, and equipment balances as of the year ended Dec. 31, 2007. Fitch arrives at an adjusted reorganization value of $1.6 billion after subtracting administrative claims. Based upon these assumptions, The 'RR1' recovery rating for Kodak's secured bank facility reflects Fitch's belief that 100% recovery is realistic. The 'RR4' recovery rating for the senior unsecured debt reflects Fitch's estimate that a recovery of only 31%-50% would be achievable. EATON VANCE: Moody's Takes Negative Rating Actions on Notes ----------------------------------------------------------- Moody's Investors Service has taken these negative rating actions on capital notes and medium-term notes issued by Eaton Vance Variable Leverage Fund Ltd.: -- Medium-Term Notes Program ($ 560,000,000 currently outstanding) * Current Long-Term Ratings: Aaa, on review for downgrade * Prior Long-Term Ratings: Aaa -- Capital Notes ($ 209,000,000 outstanding) *Current Rating: Ba3, on review for downgrade *Prior Rating: Baa2, on review for downgrade The Prime-1 ratings currently assigned to Commercial Paper and Medium-Term Notes programs issued by EVVLF are unaffected by this rating action. No short-term debt (with maturities less than a year) is currently outstanding. EVVLF is a structured investment vehicle that invests primarily in the leveraged bank loan market where the obligors are typically corporations with non-investment grade ratings. EVVLF is managed by Eaton Vance Management. This rating actions reflect ongoing deterioration in the market value of the vehicle's asset portfolio, which has caused the operating leverage ratio to be close to the leverage enforcement limit. As a result, Moody's believes that the expected loss of the Capital Notes is no longer consistent with a Baa2 rating. Furthermore, Moody's will review whether the expected loss of the Medium-Term Note program and the Capital Notes is consistent with the expected loss implied by Aaa and Ba3 ratings, respectively. As part of its ratings review, Moody's will evaluate restructuring proposals presented by EVVLF's management, which may involve substantial deleveraging of the transaction or conversion to a more traditional CLO structure. ESPRE SOLUTIONS: Posts $3.2M Net Loss in Qtr. Ended Dec. 31 ----------------------------------------------------------- ESPRE Solutions Inc. reported a net loss of $3,269,331 on total revenue of $1,085,958 for the quarter ended Dec. 31, 2007, compared with net income of $187,579 on total revenue of $2,480,876 for the same period ended Dec. 31, 2006. Product development and consulting expenses increased to $595,754, compared to $84,600 last year, primarily attributable to an increase in outsource engineering costs incurred in the development of ESPRE Live, the design of Blideo's application and the provision of engineering services to third parties. For the three months ended Dec. 31, 2007, general, administrative and selling expenses were $2,037,159, compared to $1,093,428 last year. Stock based compensation amounted to $1,996,741, compared to $1,084,074 last year. At Dec. 31, 2007, the company reported $3,998,273 in total assets, $1,107,451 in total liabilities, $1,413,741 in minority interest, and $1,477,081 in total stockholders' equity. 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?287e Going Concern Doubt Espre Solutions Inc. has incurred significant and recurring losses and negative cash flow from operations since inception. The company believes that this raises substantial doubt about its ability to continue as a going concern. About Espre Solutions Inc. Headquartered in Plano Texas, ESPRE Solutions Inc. (OTC: EPRT.PK) -- http://www.espresolutions.com/-- is a public company and media collaboration solutions provider. ESPRE Solutions intends to be the video solutions provider of choice for Internet Service Providers, Enterprises, application developers, communications hardware vendors, and chip manufacturers, by providing both narrowband and broadband video solutions for integration into traditional voice and data applications. ESPRE Solutions' ESPRE Live(TM) Media Engine provides an integrated tool-kit solution for developers to create applications for business and personal communications. >From its inception until the 1980's, the company provided planning and environmental consulting services to local governmental agencies and private organizations. The company filed reports with the Securities and Exchange Commission until October 1981, when it suspended its reporting obligations by notice filed with the Commission. EYE CARE: Moody's Lifts Corporate Family Rating to 'B1' From 'B2' ----------------------------------------------------------------- Moody's Investors Service upgraded its Corporate Family and Probability of Default ratings for Eye Care Centers of America, Inc. to B1 from B2. At the same time Moody's upgraded its ratings on the company's senior secured credit facilities to Ba1 from Ba2 and the ratings on the company senior subordinated notes from Caa1 to B2. The rating outlook is stable. "The upgrade in ECCA's ratings reflect the company's consistently positive comparable store sale growth in its optical stores and benefits from direct importing of product which resulted in improved gross margins," said Moody's Senior Analyst Scott Tuhy. He added, "In addition, the company's credit metrics have improved following repayment of approximately $56 million of funded debt since Highmark Inc. acquired ECCA in August 2006." These ratings were upgraded and LGD assessments adjusted: -- Corporate Family Rating to B1 from B2 -- Probability of Default Rating to B1 from B2 -- $132 million senior secured bank loan rating to Ba1 (LGD 2, 16%) from Ba2 (LGD 2, 22%) -- $152 million senior subordinated note rating to B2 (LGD 5, 72%) from Caa1 (LGD 5, 77%). These ratings were affirmed: -- Speculative Grade Liquidity Rating at SGL-2. Based in San Antonio, Texas, Eye Care Centers of America, Inc. is the third largest retail optical chain in the US. The company's brands include EyeMasters, Binyon's, Visionworks, Hour Eyes, Dr. Bizer's, VisionWorld and Eye Drx. The company had revenues of $469 million in the LTM period ending Sept. 29, 2007. FINANCIAL GUARANTY: S&P Lowers Financial Strength Rating to 'A' --------------------------------------------------------------- Standard & Poor's Ratings Services took rating actions on several monoline bond insurers following additional stress tests with respect to their domestic nonprime mortgage exposure. -- The financial strength rating on Financial Guaranty Insurance Co. was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications; -- The financial strength ratings on XL Capital Assurance Inc. and XL Financial Assurance Ltd. were lowered to 'A-' from 'AAA' and remain on CreditWatch with negative implications; -- The 'AAA' financial strength rating on MBIA Insurance Corp. was removed from CreditWatch and a negative outlook was assigned; -- The 'AAA' financial strength rating on Ambac Assurance Corp. was affirmed and remains on CreditWatch with negative implications; and -- The 'AAA' financial strength ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. were affirmed and retain a negative outlook. The downgrades on FGIC, FGIC Corp., and Grand Central Capital Trusts I-VI (a committed capital facility supported by, and for the benefit of, FGIC) reflect S&P's current assessment of potential losses, which is higher than previous estimates. The downgrades on XLCA, XLFA, XL Capital Assurance (UK) Ltd., and Twin Reefs Pass-Through Trust (a committed capital facility supported by, and for the benefit of, XLFA) reflect S&P's assessment that the company's evolving capital plan has meaningful execution and timing risk. The removal from CreditWatch of, and assignment of negative outlooks on, MBIA Insurance Corp., MBIA Inc., and North Castle Custodial Trusts I-VIII (a committed capital facility supported by, and for the benefit of, MBIA) reflect MBIA's success in accessing $2.6 billion of additional claims-paying resources, which, in S&P's view, is a strong statement of management's ability to address the concerns relating to the capital adequacy of the company. The affirmation of S&P's 'AAA' financial strength and financial enhancement ratings on Ambac Assurance Corp. and S&P's 'AA' rating of Anchorage Finance Sub-Trusts I-IV and Dutch Harbor Finance Sub- Trusts I-IV (committed capital facilities supported by, and for the benefit of, Ambac) and holding company Ambac Financial Group Inc. reflects S&P's assessment of the scope of Ambac's capital- raising plans and the company's ability to implement those plans. S&P left the ratings on CreditWatch with negative implications to reflect uncertainty surrounding the risk profile and capitalization plans for the reported new corporate structure being contemplated by the holding company. The affirmation of S&P's 'AAA' financial strength rating on CIFG reflects the contribution of $1.5 billion in capital resources to CIFG Holding by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne to support CIFG's claims-paying resources. CIFG's outlook was changed to negative from stable in June 2007 for reasons unconnected to its subprime exposure. Rather, S&P looked at the effectiveness and processes of the company's board, appropriate succession planning, and the degree of long-term support to be provided by its parent Natixis S.A. The assignment of the negative outlook also reflected S&P's views relating to CIFG's below-average earnings and return on earnings. Nevertheless, S&P considers the $1.5 billion capital contribution to be an important statement by CNCE and BFBP about their near- term commitment to the financial guaranty industry and CIFG. 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. FORD MOTOR: Nudges Woodhaven Workers to Accept Buyout Options ------------------------------------------------------------- Ford Motor Company has been asserting a successful outlook to former employees who have the company after accepting its compensation packages, which provides educational opportunities, buyout offers and career prospects activities, Bill Blasic of the New York Times reports. NY Times relates that a job fair for workers of Ford's sheet-metal stamping plant in Woodhaven, Detroit, was held on Friday, offering work options from truck driving to electrician work at the local utility to franchise opportunities at the Little Caesars pizza chain. Younger workers may be more open to the idea of a new career, however, older workers seemed sentimental in leaving the company they have worked for many years, according to NY Times. So, Ford, NY Times says, is offering rich buyout packages to factory workers, including one-time cash payments of $140,000 or college tuition plans for an entire family. As reported in the Troubled Company Reporter on Feb. 13, 2008, Ford intended to offer another round of buyout packages to 14% of its entire plant workforce in North America to restore profitability. Roughly 9,000 workers will be displaced in addition to 33,000 employees who availed the compensation packages in 2006 and 2007. Last month, United Auto Workers union representatives and the automaker agreed to compensation offers higher than those offered in 2006, including an education package, health benefits and a lump sum payment. Pursuant to the agreement, an additional $35,000 will be given to qualified retirees as they leave, the payout totaling $70,000. NY Times suggests that Ford has not given out the estimates of those who would accept the buyouts by a March 18 deadline. However, Wall Street analysts say company aim is 8,000 workers. General Motors Corp. is offering buyout proposals to all of its 74,000 hourly workers, while Chrysler LLC is proposing the same option to workers by plants per region, NY Times discloses. The Big Three automakers decided to cut corners after years of depressing market share and rising competition from foreign car companies like by Toyota. "It's not going to get any easier -- at least for awhile," Jim Farley, Ford's group vice president, Marketing and Communications, said. "Recent monetary actions and the proposed stimulus package may help the economy later this year, but we're not pinning our hopes on that. Our plan is based on restructuring our business to be profitable at lower demand and changed mix while also accelerating the development of new products people want to buy." As previously reported, Ford reported a 2007 full-year net loss of $2.7 billion. This compares with a 2006 full-year net loss of $12.6 billion. Based in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the UAW. FOREST OIL: Commences $750 Mil. Exchange Offer for 7.25% Sr. Notes ------------------------------------------------------------------ Forest Oil Corporation commenced an offer to the holders of its $750 million principal amount of 7.25% Senior Notes due 2019 that were issued in a private placement in June 2007 to exchange the Old Notes for a like principal amount of its 7.25% Senior Notes due 2019 that are being registered under the Securities Act of 1933. The Exchange Offer will expire at 5:00 P.M., New York City time, on March 24, 2008, unless extended. To participate in the Exchange Offer, one must follow the Automated Tender Offer Program procedures established by The Depository Trust Company, for tendering notes held in book-entry form. U.S. Bank National Association has been appointed as exchange agent for the Exchange Offer and questions and requests for assistance should be directed to: U.S. Bank Corporate Trust Services Attn: Specialized Finance 60 Livingston Avenue St. Paul, MN 55107 Tel (800) 934-6802 Fax (651) 495-8158 About Forest Oil Forest Oil Corporation (NYSE:FST) -- http://www.forestoil.com/-- is engaged in the acquisition, exploration, development, and production of natural gas and crude oil in North America and selected international locations. Forest's principal reserves and producing properties are located in the United States in the Gulf of Mexico, Alaska, Louisiana, Oklahoma, Texas, Utah, and Wyoming, and in Canada. * * * As reported in the Troubled Company Reporter on June 4, 2007, Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on oil and gas exploration and production company Forest Oil Corp. and revised the outlook on the company to stable from negative. At the same time, Standard & Poor's assigned its 'B+' rating to Forest's proposed $500 million senior note offering. FORTUNOFF: May Pay $2,250,000 Break-Up Fee for H Acquisition ------------------------------------------------------------ The Hon. James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York gave Fortunoff Fine Jewelry and Silverware LLC and its debtor-affiliates approval to pay H Acquisition, LLC, a break-up fee for $2,250,000, as stalking horse bidder for the sale of substantially all of the Debtors' assets. NRDC Equity Partners LLC's H Acquisition will receive the Break- Up Fee if it is outbid for the assets of Fortunoff Fine Jewelry & Silverware LLC. The Debtors may pay the Break-Up Fee, without further action or Court order, in accordance with the terms and conditions of the parties' asset purchase agreement. According to Bloomberg News, Judge Peck previously declined to approved the Break-Up Fee because NRDC hadn't lined up financing for its proposed $80,000,000 purchase of Fortunoff. NRDC's attorneys, according to the report, arrived at the Feb. 22, 2008 hearing with signature pages from the financing commitment. Parties Want Diamonds Excluded From Sale A. Verstandig & Sons Diamonds amounting to $343,182 and belonging to Verstandig & Sons, Inc., a wholesale supplier of diamonds, are held by the Debtors, pursuant to the terms of a memorandum signed by a representative of the Debtors, acknowledging receipt of the Diamonds, Steven J. Reisman, Esq., at Curtis Mallet-Prevost Colt & Mosle LLP, in New York, tells the Court. Before the bankruptcy filing, Verstandig asked the Debtors to return all of its Diamonds in the possession of the Debtors, Mr. Reismans relates. The Debtors responded that they were in the process of returning, 39 Diamond belonging to Verstandig. Subsequently, the Debtors filed for Chapter 11 and on the bankruptcy filing, the Debtors asked the Court for authority to sell substantially all of their assets, including store inventory. The Debtors' request purports to authorize the sale of the Diamonds "free and clear" of liens and claims. Mr. Reisman argues that the Diamonds are not the property of the Debtors within the meaning of Section 541 of the Bankruptcy Code and cannot be sold free and clear of Verstandig's interests. Under the terms of the Memorandum, title to the Diamonds will at all times remain in Verstandig, and the Debtors have no right, power, or authority to sell, transfer, dispose, or hypothecate all or any part of the Diamonds, Mr. Reisman points out. Verstandig says it would have no objection to the proposed sale if the proceeds from the sale of the Diamonds were segregated and held in a separated account, pending the determination of ownership by a court of competent jurisdiction. Mr. Reisman also notes that in case of breach, the Memorandum provides that Verstandig will be entitled to all of the rights and remedies available under law, including the rights of a consignee or a secured party in the Diamonds. If the Sale of the Diamonds is allowed to proceed without adequate protection of Verstandig's interests, Mr. Reisman says, Verstandig will have relied on the promises made by the Debtors to its detriment, resulting in the unjust enrichment of the Debtors' secured creditors, at Verstandig's expense. B. Various Diamond Vendors Six more owners of $2,300,000 worth of diamonds and jewelry oppose to the proposed sale procedures to the extent that their goods would be included in the sale absent their consent: (1) Leo Shachter Diamonds LLC, (2) Michael Werdiger, Inc., (3) Eloquence Corporation, (4) Podicko Diamonds, Ltd., (5) Arya's Collection, Inc., and (6) Rama International LLC. Before the bankruptcy filing, each of the Vendors delivered diamonds or finished jewelry aggregating $2,300,000 to the Debtors, pursuant to the specific terms and conditions of certain jewelers' memoranda which accompanied each and every delivery, Ian R. Winters, Esq., at Klestadt & Winters LLP, in New York, tells the Court. Mr. Winters notes that historically, after the conclusion of each year-end holiday season, the Debtors would return the diamonds which they had received "on memo", in order for the Debtors to conduct inventory of their own actual inventory of goods. Prior to the bankruptcy filing, each of the Vendors demanded from the Debtors, the return of all, or part of their individual supply of the Memo Goods. As recently as Feb. 1, 2008, Mr. Winters says that each Vendor was specifically told by the Debtors that its Memo Goods had been pulled, or were in the process of being pulled, and all the Memo Goods would be available for pick-up on February 4. However, on Feb. 4, 2008, the Debtors commenced "the instant" Chapter 11 case, and each Vendor was advised that its Memo Goods could not be picked up as was promised, Mr. Winters states. Mr. Winters maintains that contrary to custom in the jewelry industry, prior practice between the parties, and the agreements and understandings between the parties, the Debtors failed and refused, despite due demand, to return the Memo Goods. Upon information and belief, Mr. Winters tells the Court that the Debtors are offering the Memo Goods for sale to their customers, and will receive the Sales' proceeds. In addition, Mr. Winters believes that it is the Debtors' intention to transfer the Memo Goods to the purchaser, free of any interest the Vendors have. Mr. Winter contends that by acceptance of the Memo Goods, the Debtors agreed that: -- the Memo Goods remain the lawful property of the Vendors; -- the Memo Goods were to be returned on demand to the Vendors; -- the Debtors had no right or power to sell, pledge, and hypothecate the Memo Goods without the Vendors' consent; and -- title of the Memo Goods does not pass until conditions are met. "It is the Vendors' contention that the Memo Goods are the lawful property of each of the Vendors, and not the property of the estate, and therefore cannot be sold or transferred without the Vendors' consent," Mr. Winters explains. Mr. Winters notes that neither the Debtors' requests to obtain postpetition financing, nor the Proposed Sale contain any provisions which recognize or protect the rights of the Vendors. About Fortunoff New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- is a family owned business since 1922 founded by by Max and Clara Fortunoff. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. It opened some 20 satellite stores in the New Jersey, Long Island, Connecticut and Pennsylvania markets featuring outdoor furniture and grills during the Spring/Summer season and indoor furniture (and in some locations Christmas trees and decor) in the Fall/Winter season. Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and Source Financing Corp., filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in order to effectuate a sale to NRDC Equity Partners LLC, -- http://www.nrdcequity.com/-- a private equity firm that owns of Lord & Taylor from Federated Department Stores. Due to the U.S. Trustee's objection, Fortunoff is backing out of its request to employ Skadden Arps Meagher & Flom LLC, as bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP, as their general bankruptcy counsel, but Skadden Arps will continue to serve the Debtors as special counsel in connection with the sale the Debtors' assets. Logan & Company, Inc., serves as the Debtors' claims, noticing, and balloting agent. FTI Consulting Inc. are the Debtors' proposed crisis manager. An Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, they listed assets and debts between $100 million to $500 million. The Debtors' exclusive period to file a plan of reorganization ends on June 3, 2008. (Fortunoff Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FORTUNOFF: Togut Segal Replaces Skadden Arps as Bankruptcy Counsel ------------------------------------------------------------------ Fortunoff Fine Jewelry and Silverware LLC and its debtor- affiliates sought to employ Skadden Arps Meagher & Flom LLC, to provide legal advice in connection with the Debtors' efforts to work out their financial difficulties and representation in any reorganization cases filed under Chapter 11. However, the Office of the United States Trustee indicated its possible objection to the retention of Skadden Arps as the Debtors' general bankruptcy counsel, in light of Skadden Arps' prepetition relationship with certain parties-in-interest in the Debtors' bankruptcy cases. According to Arnold Orlick, chief executive officer of Source Financing Corp., Skadden Arps consequently advised the Debtors to retain an alternative general bankruptcy cousel, instead of using valuable estate assets to contest an objection by the U.S. Trustee. As a result, the Debtors determined to employ Togut Segal & Segal LLP, as their general bankruptcy counsel, and to hire Skadden Arps, as special counsel pursuant to Section 327(e) of the Bankruptcy Code, to perform services in connection with the sale the Debtors' assets. Accordingly, the Debtors ask the Hon. James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York for authority to employ Togut Segal as their bankruptcy cousel, nunc pro tunc to February 15, 2008. Pursuant to Section 328(a) of the Bankruptcy Code, the Debtors also ask the Court to approve Togut Segal's employment under a general retainer, in accordance with the firm's normal hourly rates and policies in effect. Mr. Orlick relates that the Debtors selected Togut Segal as their attorneys because of the firm's knowledge and experience in the fields of debtors' protections, creditors' rights and business reorganizations under Chapter 11. In addition, Mr. Orlick says that Togut Segal possesses extensive experience and knowledge practicing before bankruptcy courts. Togut Segal has been actively involved in major Chapter 11 cases like: * Our Lady of Mercy Medical Center, * Dura Auto. Sys., Inc., * Saint Vincent Catholic Medical Centers of New York, * Delphi Corp., * Tower Automotive, Inc., and * Enron Corp. As the Debtors' general bankruptcy counsel, Togut Segal is expected to render legal services relating to the administration and prosecution of their Chapter 11 cases and the issues which may arise from the management of their legal affairs, including, but not limited to: (a) advise the Debtors regarding their powers and duties as debtors-in-possession in the continued management and operation of their businesses and properties; (b) attend meetings and negotiating with representatives of creditors and other parties-in-interest; (c) take necessary action to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending actions commenced against the Debtors and representing the Debtors' interests in negotiations concerning litigation in which the Debtors are involved, including, but not limited to, objections to claims filed against the estates; (d) prepare, on the Debtors' behalf, motions, applications, answers, orders, reports, and papers necessary to the administration of the estates; (e) negotiate and prepare, on behalf of the Debtors, a Chapter 11 Plan of Reorganization and all related documents; (f) represent the Debtors in obtaining authorization for postpetition financing; (g) advise the Debtors in connection with the post-sale wind down of operations; (h) appear before the Court and any appellate courts and protecting the interests of the Debtors' estates; and (i) perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with their Chapter 11 Cases. During the Chapter 11 cases, Togut Segal will apply to the Court for allowance of compensation and reimbursement of actual and necessary expenses in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules of the Bankruptcy Court for the Southern District of New York, and the Court's orders. Togut Segal will be paid: Professional Hourly Rate ------------ ----------- Partners $725 to $845 Counsels $630 to $650 Paralegals $125 to $625 The firm will also be reimbursed for out-of-pocket expenses. Togut Segal has received no compensation from the Debtors and performed no services before the bankruptcy filing, according to Mr. Orlick. Albert Togut, Esq., a senior member of Togut Segal, says that the firm is willing to act in the Debtors' Chapter 11 cases, and that it understands the Debtors' intention to retain Skadden as special counsel to represent them in connection with their proposed sale of assets. Mr. Togut assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Fortunoff New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- is a family owned business since 1922 founded by by Max and Clara Fortunoff. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. It opened some 20 satellite stores in the New Jersey, Long Island, Connecticut and Pennsylvania markets featuring outdoor furniture and grills during the Spring/Summer season and indoor furniture (and in some locations Christmas trees and decor) in the Fall/Winter season. Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and Source Financing Corp., filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in order to effectuate a sale to NRDC Equity Partners LLC, -- http://www.nrdcequity.com/-- a private equity firm that owns of Lord & Taylor from Federated Department Stores. Logan & Company, Inc., serves as the Debtors' claims, noticing, and balloting agent. FTI Consulting Inc. are the Debtors' proposed crisis manager. An Official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, they listed assets and debts between $100 million to $500 million. The Debtors' exclusive period to file a plan of reorganization ends on June 3, 2008. (Fortunoff Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRIEDMAN'S INC: Court Approves Auction of Store Leases on March 6 ----------------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware gave Friedman's Inc. and its debtor- affiliates approval to publicly sell their store leases and other assets on March 6, 2008, The Associated Press reports. According to the report, the Debtors wanted to hasten the liquidation of the assets before a debtor-in-possession fund of $17.5 million from Harbinger Capital Partners Master Fund I Ltd. is fully spent. A stalking horse bidder is yet to be disclosed, AP says. Other parties must outbid the stalking horse bidder's offer by $500,000, based on the report. Despite lessors' opposition, the last day for making bids has been set for March 3, 2008, AP reports. Some landlords contest that the Debtors did not give them enough time to file objections "to a proposed assignee," AP quotes court documents as stating. Judge Sontchi will conduct a sale hearing on March 7, 2008, a day following the sale, AP reports. About Friedman's Inc. Addison, Texas-based Friedman's Inc. -- http://www.friedmans.com/ -- and -- http://www.crescentonline.com/-- is the parent company of a group of companies that operate fine jewelry stores located in strip centers and regional malls in the southeastern United States. Friedman's and eight its affiliates filed for chapter 11 protection on Jan. 14, 2005 (Bankr. S.D. Ga. Case No. 05-40129). On Sept. 22, 2005, the Bankruptcy Court entered an order approving the Debtors' Disclosure Statement explaining their Amended Joint Plan of Reorganization. On Nov. 23, 2005, the Court confirmed the Debtors' Amended Plan and that Plan became effective on Dec. 9, 2005. Crescent Jewelers, the largest jewelry retailer on the West Coast, filed for Chapter 11 protection on Aug. 12, 2004 (Bankr. N.D. Calif. Case No. 04-44416). On June 15, 2006, the California Bankruptcy Court approved Crescent Jewelers' Second Amended Disclosure Statement its Second Amended Plan of Reorganization. The Court confirmed that Plan on July 13, 2006. Crescent Jewelers was acquired by Friedman's and became a wholly-owned subsidiary in 2006. In Jan. 22, 2008, five parties, which declared claims aggregating $9,081,199.07, filed an involuntary Chapter 7 petition against Friedman's. The parties that filed the involuntary petition were Rosy Blue, Inc.; Rosy Blue Jewelry Inc.; Jay Gems, Inc., dba Jewelmark; Simply Diamonds Inc.; and Paul Winston- Eurostar LLC. As of Jan. 28, 2008, Friedman's operated 388 stores in 19 states with over 2,890 employees while Crescent Jewelers operated 85 stories in 3 states with over 600 employees. Friedman's and Crescent Jewelers filed for chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case Nos. 08-10161 and 08-10179). The Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. Athanasios E. Agelakopoulos, Esq., at Kilpatrick Stockton LLP, and Jason M. Madron, Esq., and Michael Joseph Merchant, Esq., at Richards, Layton & Finger PA represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims, balloting, and noticing agent. As of Dec. 28, 2007, the Debtors listed total assets of $245,787,000 and total liabilities of $171,877,000. GE COMMERCIAL: Stable Performance Cues Fitch to Affirm Ratings -------------------------------------------------------------- Fitch Ratings affirmed the ratings of GE Commercial Mortgage pass- through certificates, series 2001-3, as: -- $92.6 million class A-1 at 'AAA'; -- $478.9 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $42.2 million class B at 'AAA'; -- $38.6 million class C at 'AAA'; -- $13.3 million class D at 'AAA'; -- $7.2 million class E at 'AAA'; -- $14.5 million class F at 'AAA'; -- $12.0 million class G at 'AA'; -- $27.7 million class H at 'A-'; -- $8.4 million class I at 'BBB'; -- $7.2 million class J at 'BBB-'; -- $12.0 million class K at 'BB'; -- $4.8 million class L at 'B+'; -- $4.8 million class M at 'B'. The class N certificates are not rated by Fitch. The affirmations are a result of stable performance and minimal paydown since Fitch's last rating action. In total, thirty-one loans (28%) have defeased. As of the February 2008 distribution date, the pool's aggregate certificate balance has decreased 19.4% since issuance, to $776.4 million from $963.8 million. Six loans (2.8%) are scheduled to mature in 2008. Of the six loans, four (1.1%) are defeased and the remaining two (1.7%) are current and performing well with interest rates of 6.85% and 7.36%. Fitch has identified 13 loans of concern (10.1%) including the tenth largest loan in the transaction (1.9%). Two (1.2%) of the loans of concern are in special servicing. The largest specially serviced loan (0.7%) is secured by an office property located in Bingham Farms, Michigan and is currently 60 days delinquent. The property has suffered from vacancy and cashflow issues. The other specially serviced loan (0.5%) is secured by a multifamily property located in Houston, Texas and is current. The borrower filed a lawsuit against the Trust as a result of the sub-servicer obtaining a force-placed insurance policy. A settlement has been reached and the loan is expected to return to the master servicer. GENENE PEKO: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Genene Peko Rental Enterprises, Inc. 19440 Golf Vista Plaza #120 Leesburg, VA 20176 Bankruptcy Case No.: 08-10842 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Rudy Paul Peko 08-10843 Chapter 11 Petition Date: February 24, 2008 Court: Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtors' Counsel: Thomas J. Stanton, Esq. (tstanton@us.net) Stanton & Associates, P.C. 221 South Fayette Street Alexandria, VA 22314 Tel: (703) 299-4445 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Consolidated Debtors' List of 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BB&T of VA Business Loan statement $1,446,553 CTR P.O. Box 580003 Charlotte, NC 28258-0003 Tel: (703) 912-5234 Countrywide Home Loans property $461,990 Customer Service P.O. Box 5170 Simi Valley, CA 93062-5170 Tel: (800) 213-8348 Treasurer of Loudoun County taxes $11,021 1 Harrison Street S.E., 1st Floor P.O. Box 347 Leesburg, VA 20178-0347 Kingsmill Community Svcs. property $9,058 Assn. Landsdowne Exec Ctr. Condo property $8,874 Assn. ServiceMaster unsecured debt $5,430 Office of Treasurer taxes $2,466 County of James City Travelers Knoxville insurance $498 Ashburn Farm Association property unknown BB&T Mortgage property unknown Mortgage Collections GENERAL MOTORS: Supplier Workers Strike Has No Impact on Assembly ----------------------------------------------------------------- Although the strike of union workers at its supplier American Axle and Manufacturing Inc. does not affect General Motors Corp.'s plant production yet, the auto maker says it is following the protest closely, Terry Kosdrosky of Dow Jones Newswires reports. The Associated Press points out that GM has a large inventory of pickups and sport utility vehicles, which are equipped with American Axle's products. However, if the strike lasts longer than the backlog, GM's assembly lines would suffer, AP relates citing industry analysts. United Auto Workers union president Ron Gettelfinger and Vice President James Settles disclosed that members at American Axle and Manufacturing Inc. began an unfair labor practices strike at 12:01 a.m. on Feb. 26, 2008, following expiration of a four-year master labor agreement. Talks broke off Monday with major issues unresolved. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets (DTAs) in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GETTY IMAGES: To be Bought by Hellman & Friedman in $2.4 Bil. Deal ------------------------------------------------------------------ Getty Images Inc. entered into a definitive merger agreement to be acquired by affiliates of the private equity firm Hellman & Friedman LLC in a transaction valued at approximately $2.4 billion, including the assumption of existing debt. Under the terms of the agreement, Getty Images stockholders will receive $34.00 in cash for each outstanding share of common stock they own. This price represents a premium of approximately 55% over the closing price on Jan. 18, 2008, the last trading day before the company reported that it was exploring strategic alternatives. The Board of Directors of Getty Images has approved the merger agreement and resolved to recommend that Getty Images' stockholders approve the transaction. Completion of the transaction is subject to shareholder approval and other customary closing conditions. The transaction is not subject to a financing condition and is expected to close in the second quarter of 2008. "Our Board of Directors has thoroughly evaluated strategic alternatives for Getty Images and has determined that this outcome is in the best interests of our stockholders as it provides them with superior and certain value," Jonathan Klein, co-founder and chief executive officer of Getty Images, said. "Furthermore, Hellman & Friedman brings specific industry expertise and support for the vision of the Company's management team that will benefit our employees, customers and partners. Just over a decade ago we started Getty Images with little more than a vision and have achieved industry leadership due to the extraordinary talent, effort and commitment of our employees and partners. We are enthusiastic about entering the next phase of Getty Images' evolution by partnering with Hellman & Friedman as we continue to provide innovative offerings to businesses and consumers in a very dynamic digital media environment." "Getty Images is the leader and pioneer in the visual content and digital media business," Andy Ballard, managing director of Hellman & Friedman, said. "We believe in the vision and execution capabilities of Jonathan Klein and his team, and share their commitment to the Company's stakeholders and customers. We look forward to working with all of Getty Images' employees to realize the full potential of its traditional businesses while furthering the evolution of Getty Images into a global digital media company." Financing commitments have been provided by Barclays Capital, GE Commercial Finance and RBS Greenwich Capital. In addition, Getty Investments and certain related parties, including the co-founder and chairman, Mark Getty, who collectively hold approximately 15% of the company's shares, have agreed to vote in favor of the transaction and rollover their shares into the acquiring entity. Goldman, Sachs & Co. is acting as financial advisor to Getty Images. Barclays Capital and RBS Greenwich Capital are acting as financial advisors to Hellman & Friedman. Weil Gotshal & Manges LLP and Simpson Thacher & Bartlett LLP are serving as legal advisors to Getty Images and Hellman & Friedman, respectively. Headquartered in Seattle, Washington, Getty Images Inc. (NYSE:GYI) -- http://www.gettyimages.com/-- is a creator and distributor of visual content. The company provides relevant imagery to professionals at advertising agencies, graphic design firms, corporations, and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, compact disc and online publishing, and corporate marketing departments and other business customers. Getty Images offers its imagery and related services through the company's website and a global network of company-owned offices and delegates. It serves customers in more than 100 countries. GETTY IMAGES: $2.4 Mil. Hellman Deal Prompts Moody's Rating Review ------------------------------------------------------------------ Moody's Investors Service placed all the credit ratings of Getty Images, Inc. on review for possible downgrade following its announcement that it entered into a definitive agreement to be acquired by affiliates of the private equity firm Hellman & Friedman LLC for a total enterprise value of $2.4 billion, including the assumption of existing debt. The transaction has been approved by the Board of Directors of Getty. Completion of the transaction is subject to shareholder approval and other customary closing conditions. The transaction is not subject to a financing condition and is expected to close in the second quarter of 2008. The company disclosed that financing commitments have been provided by Barclays Capital, GE Commercial Finance and RBS Greenwich Capital. Getty's announcement did not disclose the mix of debt and equity to be utilized to finance the acquisition. The review for possible downgrade anticipates that leverage and free cash flow metrics will weaken significantly post-acquisition. Moody's review will focus on the expected capital structure, liquidity position and operating strategy of Getty upon completion of the buyout transaction. In particular, Moody's will review the company's plans for growing or stabilizing the business despite pressure from declining demand for traditional creative still imagery. Getty's $265 million of convertible subordinated debentures will be convertible at the option of the holders on June 9, 2008. Moody's anticipates that cash, cash equivalents and short term investments (about $364 million at Dec. 31, 2007) and available bank credit lines will provide the company with sufficient liquidity to fund the cash conversion price. If substantially all of the subordinated debentures are converted, then Moody's may withdraw all of Getty's credit ratings. These ratings were placed on review for possible downgrade: -- $265 million series B convertible subordinated notes due 2023, Ba2 -- Corporate family rating, Ba1 -- Probability of default rating, Ba1 Headquartered in Seattle, Washington, Getty is a leading creator and distributor of high quality imagery and related services to creative professionals at advertising agencies, graphic design firms, corporations, and film and broadcasting companies; editorial customers involved in newspaper, magazine, book, CD-ROM and online publishing; and corporate marketing departments and other business customers. Revenues for the year ended Dec. 31, 2007 were $858 million. GETTY IMAGES: S&P Cuts Rating on $2.4 Bil. Hellman & Friedman Deal ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Seattle, Washington-based visual imagery company Getty Images Inc. to 'BB-' from 'BB' and placed it on CreditWatch with negative implications. At the same time, S&P affirmed the 'B+' rating on the company's subordinated debt. The rating action is based on the announcement that Getty has entered into a definitive agreement to be acquired by Hellman & Friedman LLC, in a transaction valued at $2.4 billion. "We believe this deal will raise financial risk as the company is addressing business challenges," said Standard & Poor's credit analyst Tulip Lim. The transaction value includes existing debt. Getty Images currently expects the transaction to close in the second quarter of 2008. GRAPHIC PACKAGING: Reports $0.7 Mil. Net Loss for 2007 Fourth Qtr. ------------------------------------------------------------------ Graphic Packaging Corporation reported net loss for fourth quarter 2007 ended Dec. 31 was $0.7 million. This compares to a fourth quarter 2006 net loss of $35.9 million. Net Loss in the fourth quarter 2007 was positively impacted by an impairment adjustment of $6.6 million for the non-cash currency translation adjustments related to the sale of the company's operations in Sweden. Net sales in the fourth quarter of $601.9 million, an increase of 6.4% over the same period last year of $565.7 million. Loss from continuing operations was $7.1 million compared to a loss from continuing operations of $34.0 million in the fourth quarter of 2006. For the full year 2007 ended Dec. 31, net loss was $74.6 million. This compares to a 2006 net loss of $100.5 million. Net Loss in 2007 was negatively impacted by an $18.6 million non-cash impairment charge to the company's operations in Sweden. Net sales increased 6.4% to $601.9 million during fourth quarter 2007, compared to fourth quarter 2006 net sales of $565.7 million. Full year 2007 net sales were $2,421.2 million, 4.3% higher than 2006 net sales of $2,321.7 million. Net interest expense was $40.3 million for fourth quarter 2007, as compared to net interest expense of $44.0 million for fourth quarter 2006. For the full year 2007, net interest expense was $167.8 million compared to $171.4 in 2006. The decrease was primarily due to lower interest rates resulting from the second quarter 2007 refinancing of the Company's senior secured credit facility. During the fourth quarter of 2007, the company's total debt decreased by $71.3 million to $1,878.4 million, as compared to $1,949.7 million at the end of the third quarter. Full year debt reduction for 2007 was $44.3 million. The company contributed $3.4 million to its U.S. pension plans in the fourth quarter and $24.9 million for the full year 2007. The company incurred $4.8 million of income tax expense in the fourth quarter, primarily related to a non-cash expense associated with the amortization of goodwill for tax purposes. The company has a $1.4 billion net operating loss that is available to offset future taxable income in the United States. Capital expenditures for fourth quarter 2007 were $34.3 million compared to $30.7 million in the fourth quarter of 2006. For the full year 2007, capital expenditures were $95.9 million compared to $94.5 million in 2006. "I'm extremely pleased with fourth quarter results, particularly the strong growth in the top line," David W. Scheible, president and chief executive officer, said. "The approximate six-and-half percent increase in net sales represents the largest quarter over prior-year quarter increase since the merger that formed the Company in 2003." "Although we are still being negatively impacted by higher input costs, we were able to more than offset both fourth quarter and full year cost inflation through a combination of increased pricing and our ongoing cost cutting programs," Mr. Scheible added. "Specifically, we took another $12 million of costs out of the system this quarter, bringing full year 2007 benefits from our continuous improvement efforts to approximately $46 million." At Dec. 31, 2007, the company's balance sheet reflected total assets of $3.1 billion, total liabilities of $2.9 billion and a total shareholders' equity of $100,000,000. About Graphic Packaging Headquartered in Marietta, Georgia, Graphic Packaging Corporation (NYSE:GPK) -- http://www.graphicpackaging.com/-- is a provides paperboard packaging solutions for a variety of products to multinational and other consumer products companies. The company provides its customers paperboard, cartons and packaging machines, either as an integrated solution or separately. Its packaging products are made from a variety of grades of paperboard. GPC manufactures its packaging products from coated unbleached kraft paperboard and coated recycled paperboard that it produces at its mills, and a portion from paperboard purchased from external sources. The company operates in four geographic areas: the United States, Central and South America, Europe and Asia-Pacific. GPC conducts its business in two segments, paperboard packaging and containerboard/other. * * * In April 2007, Fitch Ratings assigned a 'BB-' rating on Graphic Packaging Corp.'s bank loan debt rating with a stable outlook. This rating action still holds to date. GREENBRIER COS: Unit Applies for Receivership in Nova Scotia Court ------------------------------------------------------------------ The Greenbrier Companies's non-operating subsidiary, TrentonWorks Ltd., has applied to the Supreme Court of Nova Scotia for the appointment of a Receiver to take control of its assets. In April 2007, Greenbrier disclosed the closure of the railcar manufacturing operation, located in Trenton, Nova Scotia, Canada. The operation had become uncompetitive as a result of appreciation of the Canadian dollar and other cost disadvantages. Since then, TrentonWorks Ltd. has worked with Ernst & Young to market the facility and, in the process, directly contacted over 200 potential buyers, nationally and internationally. That process was not successful, and TrentonWorks has asked the Court to appoint a Receiver to administer the assets in the best interest of its creditors. TrentonWorks expects the appointment of a Receiver to eliminate any ongoing costs associated with this operation. Greenbrier regrets the closing of the plant and the subsequent loss of employment, but, unfortunately, the plant was not cost competitive in the North American marketplace. About Greenbrier Companies Inc. Headquartered in Lake Oswego, Oregon, Greenbrier (NYSE: GBX) - http://www.gbrx.com/-- is a supplier of transportation equipment and services to the railroad industry. The company builds new railroad freight cars in its three manufacturing facilities in the U.S. and Mexico and marine barges at its U.S. facility. It also repairs and refurbishes freight cars and provides wheels and railcar parts at 38 locations across north america. Greenbrier also builds new railroad freight cars and refurbishes freight cars for the european market through both its operations in Poland and various subcontractor facilities throughout europe. Greenbrier owns approximately 9,000 railcars, and performs management services for approximately 138,000 railcars. * * * The Greenbrier Cos. Inc. continues to carry Moody's Investors Service's 'B1' long-term corporate family rating, which was placed in March 2007. GS MORTGAGE: Fitch Affirms Low-B Ratings on Six Cert. Classes ------------------------------------------------------------- Fitch Ratings affirmed GS Mortgage Securities Corporation II 2005- GG4, commercial mortgage pass-through certificates as: -- $74.5 million class A-1 at 'AAA'; -- $37.3 million class A-1P at 'AAA'; -- $153.9 million class A-DP at 'AAA'; -- $349.9 million class A-2 at 'AAA'; -- $288.7 million class A-3 at 'AAA'; -- $207.3 million class A-ABA at 'AAA'; -- $29.6 million class A-ABB at 'AAA'; -- $500 million class A-4 at 'AAA'; -- $1.2 billion class A-4A at 'AAA'; -- $167.4 million class A-4B at 'AAA'; -- $169 million class A-1A at 'AAA'; -- $300.1 million class A-J at 'AAA'; -- Interest-only class X-P* at 'AAA'; -- Interest-only class X-C* at 'AAA'; -- $65 million class B at 'AA'; -- $35 million class C at 'AA-'; -- $75 million class D at 'A'; -- $40 million class E at 'A-'; -- $55 million class F at 'BBB+'; -- $45 million class G at 'BBB'; -- $40 million class H at 'BBB-'; -- $20 million class J at 'BB+'; -- $20 million class K at 'BB'; -- $20 million class L at 'BB-' -- $10 million class M at 'B+' -- $10 million class N at 'B'; -- $10 million class O at 'B-'; and -- $55 million class P at 'NR'. Class P is not rated by Fitch. The affirmations are due to stable performance and minimal paydown since the last rating action. As of the February 2008 remittance, the transaction's aggregate principal balance has decreased by 0.7% to $3.95 billion from $3.98 billion at the last Fitch rating action. Whole-term interest-only loans represent 31.4% of the pool. There are 12 loans of concern that comprise 8.2% of the transaction. The largest is secured by Century Centre Office (2.5%), a 447,692 square foot building located in Irvine, California. The property has experienced a decline in net cash flow due to increased operating expenses. At issuance, the largest tenant had had an option to terminate up to 20.7% of the building's net rentable area as of June 30, 2007. The tenant did not exercise the option, and occupancy remains stable at 93% as of June 30, 2007 compared to 92.6% at issuance. The second largest loan of concern, which is secured by the Astor Crown Plaza hotel (2.1%), is in special servicing. The 707-key full-service hotel is located in New Orleans, Louisiana and it sustained minor damage from Hurricane Katrina in September 2005. The hotel is now open and fully operational. It is undergoing a property improvement plan and is expected to remain with the special servicer until completion. The remaining loans of concern have exhibited declining performance since issuance. The third-largest loan of concern is secured by The District at Green Valley Ranch (1.8%), a 212,540 sf shopping center located in Henderson, Nevada. The center was completed in 2004, and has yet to reach stabilization. Fitch reviewed the most recent servicer provided financial statements, rent rolls, and sales reports available for the three shadow rated loans: the Streets at Southpoint (4.1%), 200 Madison Avenue (1.1%), and Cascade Mall (1.00%). Based on the stable performance of the loans, all three maintain investment grade shadow ratings. The Streets at Southpoint loan is secured by 583,696 sf of a 1.3 million square foot regional shopping mall in Durham, North Carolina. The mall was built in 2002, and is anchored by Hecht's (13.5%), Hudson Belk (13.5%), and Nordstrom (10.8%). The mall was 98.5% occupied as of Sept. 30, 2007 compared to 99.9% occupied at issuance. The loan, which is amortizing on a 30-year schedule, matures on April 6, 2012. Fitch will review year-end 2007 financial statements when they are available. The 200 Madison Avenue loan is secured by a 26-story, 666,188 sf office building in Manhattan, New York City. As of YE07, the building was 99.4% occupied, a slight improvement over the 98.2% occupancy rate at issuance. The loan's YE07 Fitch-adjusted DSCR on net cash flow was 1.55 times, compared to 1.50x at issuance. Fitch's adjusted NCF is calculated using a stressed debt service based on the current loan balances and a hypothetical mortgage constant. The loan, which is interest only, matures on April 1, 2015. The Cascade Mall loan is secured by a 434,051 sf regional shopping mall in Burlington, Washington. It is anchored by Macy's (25.5%) and Sears (17.0%). Occupancy has improved - the mall was 95% occupied as of Sept. 30, 2007 compared to 85.6% occupied at issuance. The loan, which is amortizing on a 30-year schedule, matures on July 6, 2010. Fitch will review YE07 financial statements when they are available. There is minimal near term maturity risk as only 1.1% of the pool matures in 2008, and none in 2009. The majority of the pool (69%) matures in 2015. GULF STREAM-ATLANTIC: Eight Note Classes Get Moody's Junk Ratings ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of eight classes of notes issued by Gulf Stream-Atlantic CDO 2007-1, Ltd., and left on review for possible further downgrade the rating of one of these classes of notes. The notes affected by this rating action are: Class Description: $300,000,000 Class A1-VF Senior Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $93,000,000 Class A-2 Senior Floating Rate Notes Due 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ca Class Description: $35,000,000 Class B Senior Floating Rate Notes Due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $25,000,000 Class C Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $11,000,000 Class D Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $9,000,000 Class E Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C Class Description: $7,500,000 Class F Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C Class Description: $5,000,000 Class G Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: Ca -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Feb. 5, 2008, as reported by the Trustee, of an event of default caused by a failure of the Class A Coverage Ratio to be greater than or equal to 100 per cent, pursuant to Section 5.1(d) of the Indenture dated February 28, 2007. Gulf Stream-Atlantic CDO 2007-1, Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. As provided in Article V of the Indenture, during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the rating assigned to Class A1-VF Notes remains on review for possible further action. HORNBECK OFFSHORE: Ups Credit Facility Borrowing Base to $250 Mil. ------------------------------------------------------------------ On Feb. 20, 2008, Hornbeck Offshore Services Inc. increased the $100.0 million borrowing base of its existing senior secured revolving credit facility to $250.0 million, the maximum amount under the "accordion" feature of its September 2006 credit agreement. As required under the September 2006 credit agreement, the company submitted additional vessels as collateral, bringing the approximate aggregate appraised fair market value of all collateral to in excess of $500.0 million or 200.0% of the new level of permitted borrowings. The company now has a total of four ocean-going tugs and 24 new generation OSVs pledged as collateral under this agreement. About Hornbeck Offshore Services Based in Covington, Louisiana, Hornbeck Offshore Services Inc. (NYSE: HOS) -- http://www.hornbeckoffshore.com/-- is a provider of technologically advanced, new generation offshore supply vessels primarily in the U.S. Gulf of Mexico and select international markets, and is a transporter of petroleum products through its fleet of ocean-going tugs and tank barges primarily in the northeastern U.S., the U.S. Gulf of Mexico and in Puerto Rico. Hornbeck Offshore currently owns a fleet of over 80 vessels primarily serving the energy industry. * * * Moody's Investor Services placed Hornbeck Offshore Service's probability of default rating at 'Ba3' in September 2006. The rating still holds to date with a negative outlook. HOST HOTELS: Earns $294 Mil. for 2007 Fourth Quarter Ended Dec. 31 ------------------------------------------------------------------ Host Hotels & Resorts Inc. reported a net income increase of $98 million to $294 million for the fourth quarter ended Dec. 31, 2007 compared to $196 million for the fourth quarter of 2006. For the full fiscal year 2007 ended Dec. 31, net income decreased $11 million to $727 million from $738 million. Net income included a net gain of $24 million for the fourth quarter and $114 million for the full year from gains on hotel dispositions, partially offset by debt repayment or refinancing costs. By comparison, the fourth quarter and full year 2006, net income included a net gain of $8 million and $355 million, associated with similar transactions, as well as costs associated with preferred stock redemptions and the Starwood acquisition. Total revenue increased $0.09 billion to $1.8 billion for the 2007 fourth quarter from $1.7 billion of the 2006 fourth quarter and increased $0.6 billion to $5.4 billion for full year 2007 from $4.8 billion for fiscal 2006. The company's board of directors has authorized a program to repurchase up to $500 million of common stock. The common stock may be purchased in the open market or through private transactions, dependent upon market conditions. The plan does not obligate the company to repurchase any specific number of shares and may be suspended at any time at management's discretion. The company has approximately 523 million shares outstanding. As of Dec. 31, 2007, the company had approximately $488 million of cash and cash equivalents. Excluding amounts necessary for working capital, the company intends to use its available funds for dividend payments and stock repurchases and to invest in the portfolio, acquire new properties or make further debt repayments. The company currently has $600 million available under its line of credit. As of Dec. 31, 2007, the company's consolidated balance sheet reflected total assets of $11.8 billion, total liabilities amounting to $6.1 billion resulting to a total stockholder's equity of $5.4 billion. About Host Hotels & Resorts Headquartered in Bethesda, Maryland, Host Hotels & Resorts Inc. (NYSE:HST) -- http://www.hosthotels.com/-- is a lodging real estate investment trust and owns luxury and upper upscale hotels. The company currently owns 121 properties with approximately 64,000 rooms, and also holds a minority interest in a joint venture that owns seven hotels in Europe with approximately 2,700 rooms. Guided by a disciplined approach to capital allocation and aggressive asset management, the company partners with premium brands such as Marriott(R), Ritz-Carlton(R), Westin(R), Sheraton(R), W(R), St. Regis(R), The Luxury Collection(R), Hyatt(R), Fairmont(R), Four Seasons(R), Hilton(R) and Swissotel(R)* in the operation of properties in over 50 major markets worldwide. * * * As reported in the Troubled Company Reporter on Oct. 19, 2007, Fitch Ratings upgraded these ratings of Host Hotels & Resorts, Inc.'s Issuer Default Rating to 'BB+' from 'BB' and Preferred Stock to 'BB' from 'B+', and its principal operating subsidiary, Host Hotels & Resorts L.P.'s IDR to 'BB+' from 'BB', Bank credit facility to 'BB+' from 'BB', Senior unsecured notes to 'BB+' from 'BB', and Exchangeable senior unsecured debentures to 'BB+' from 'BB'. Fitch's rating action affects about $4.2 billion of securities. The rating outlook is stable. HVHC INC: Moody's Changes Outlook to Negative; Holds All Ratings ---------------------------------------------------------------- Moody's Investors Service revised its rating outlook for HVHC Inc. to negative from stable and lowered its Speculative Grade Liquidity Rating from SGL-2 to SGL-3. All other ratings were affirmed. "The revision in the rating outlook to negative from stable primarily reflects downward pressures on operating margins in the company's managed care business as a result of competition and an adverse shift in channel mix by insured parties," said Moody's Senior Analyst Scott Tuhy. He added, "As a result of weaker operating performance, the cushion in the company's financial covenants in its secured credit facilities has fallen below Moody's previous expectations, which is the primary driver of the downgrade in the Speculative Grade Liquidity Rating." These ratings were downgraded: Speculative Grade Liquidity Rating to SGL-3 from SGL-2 These ratings were affirmed, and LGD assessments amended: -- Corporate Family Rating at Ba3 -- Probability of Default Rating at B1 -- Senior Secured bank loan rating at Ba2 (LGD 2, 24% from LGD 2, 26%) HVHC Inc., with executive headquarters in Pittsburgh, Pennsylvania, owns Davis Vision, Inc. and Viva Optique, Inc. Davis administers employee vision care benefit programs, while Viva distributes eyeglass frames in more than 60 countries. HVHC also operates 91 retail stores primarily in the Northeastern US. The company, a wholly-owned subsidiary of Highmark Inc., acquired Eye Care Centers of America, Inc in August, 2006. Revenues for the twelve months ending Sept. 30, 2007 were in excess of $600 million (excluding the contribution from ECCA). IMPLANT SCIENCES: Posts $5 Mil. Net Loss in Qtr. Ended December 31 ------------------------------------------------------------------ Implant Sciences Corporation reported financial results for its second quarter of fiscal 2008 which ended Dec. 31, 2007. The company's financial condition and results of operations are based on continuing operations which exclude the financial condition and results of operations of Accurel Systems International, due to the sale of substantially all of the assets of this subsidiary on May 1, 2007. Net loss applicable to common shareholders for the three months ended Dec. 31, 2007, was $5,104,000 compared to net loss applicable to common shareholders of $542,000 for the three months ended Dec. 31, 2006. Net loss applicable to common shareholders for the six months ended Dec. 31, 2007 was $7,613,000 compared to net loss applicable to common shareholders of $2,388,000 for the six months ended Dec. 31, 2006. Included in the net loss applicable to common shareholders in each of the three and six months ended Dec. 31, 2007, is an approximate $2,224,000 charge for the impairment of long-lived assets and goodwill associated with its semiconductor reporting unit. As of Dec. 31, 2007, the company's cash position decreased by $4,817,000 to $4,804,000 as compared to $9,621,000 as of June 30, 2007. The decrease in cash is attributable to: i) the cash repayments aggregating $606,000 related to the monthly amortization of the Laurus convertible preferred stock; ii) the cash repayment of $661,000 of long-term debt and capital lease obligations; iii) the continued investment in research and development to further the development and commercialization of security products; and iv) the investment in human and infrastructure resources, especially in the areas of engineering, sales and marketing, necessary to stabilize and expand the company's security business. At Dec. 31, 2007, the company's balance sheet showed total assets of $11.21 million, total liabilities of $7.99 million and total stockholders' equity of $3.22 million. Fiscal 2008 Second Quarter Highlights * Strategic repositioning to stabilize its SS&D business and provide a foundation for future growth; * Redirection and addition of resources to build infrastructure to support and expand development, engineering, sales, marketing and business development of the company's SS&D business; * Appointment of new CEO and president and Richard Meyerhoff, former VP of Global Sales for L-3 Communications Security and Detection Systems, as new vice president of Worldwide Sales and Services; * Implementation of plans to expand sales, service and distributor support in the Asia-Pacific region; * Implementation of plans to expand our corporate core technologies which should provide increased product offering opportunities; this has led to its recent statement of the execution of a binding letter of intent to acquire Ion Metrics Inc.; and * Completion of consolidation of semiconductor operations in Sunnyvale, California. Ongoing Repositioning and Exit from Semiconductor Business Implant Science's repositioning strategy is ongoing as the company continues to sharpen its focus on its SS&D business. As part of its repositioning efforts, the company has been disposing of non- strategic assets so that cash resources may be redeployed to build its core SS&D business. The company's repositioning efforts included the earlier sale of Accurel and the winding-down of its medical business. The company is evaluating strategic alternatives for its Core Systems Inc. business. Those alternatives include, but are not limited to, a sale of the business. In connection with a potential sale of Core, the company is in negotiations with an investment banker to assist with this initiative. About Implant Sciences Based in Wakefield, Massachusetts, Implant Sciences Corporation -- http://www.implantsciences.com/-- develops, manufactures, and markets products for the medical device and explosives detection industry. Its core technology involves ion implantation and thin film coatings of radioactive and nonradioactive materials. The company manufactures and sells I-Plant Iodine-125 radioactive seed for the treatment of prostate cancer, and Ytterbium-192 for breast cancer therapy. It also provides surface engineering technology to manufacturers of orthopedic hip and knee total joint replacements. The company has a strategic alliance with Rapiscan Systems, Inc. for the manufacture and sale of explosives detection equipment on a private label basis. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 19, 2007, UHY LLP raised substantial doubt about Implant Sciences Corporation's ability to continue as a going concern after it audited the company's financial statements for the fiscal year ended June 30, 2007. The auditing firm pointed to the company's recurring losses from operations. IMPLANT SCIENCES: To Sell Semiconductor Subsidiary-Core Systems --------------------------------------------------------------- Implant Sciences Corporation disclosed its plans to sell Core Systems Inc., the company's semiconductor subsidiary. With the approval of the board of directors, the company made the formal decision to harvest the value it believes has been created in Core since its acquisition in October 2004. To assist the company in the sales process, Noblemen Holdings LLC has been hired to be the investment banking advisor. Noblemen is a boutique investment banking firm with specialized expertise in the semiconductor space. "In our continuing efforts to focus the company on our Safety, Security and Defense business, the planned sale of Core meets several of our strategic objectives," Phillip C. Thomas, CEO and President commented. "Since the acquisition of Core, we have taken steps to grow this semiconductor business unit and consolidate operations in Sunnyvale, California to realize efficiencies and bring a consolidated business unit to the marketplace." "Core now presents an attractive acquisition opportunity as a stand-alone business or as an integral component of a strategic buyer," Mr. Thomas added. "Given our assessment of Core, we believe the time is right to execute on our planned strategy which should maximize our return on this investment and provide us the opportunity to redeploy the cash received to strengthen our balance sheet and provide working capital to move forward with our SS&D initiatives." "These initiatives include continued support of our development efforts to introduce new SS&D products and increased investment in our sales efforts to improve sales," Mr. Thomas continued. "Our balance sheet could be improved not only by the additional working capital provided, but also by the elimination of our convertible preferred stock obligation through cash repayments. The successful sale of Core should move Implant Sciences one step closer to fulfilling its mission of being a focused leader and innovator in the SS&D market." About Implant Sciences Based in Wakefield, Massachusetts, Implant Sciences Corporation -- http://www.implantsciences.com/-- develops, manufactures, and markets products for the medical device and explosives detection industry. Its core technology involves ion implantation and thin film coatings of radioactive and nonradioactive materials. The company manufactures and sells I-Plant Iodine-125 radioactive seed for the treatment of prostate cancer, and Ytterbium-192 for breast cancer therapy. It also provides surface engineering technology to manufacturers of orthopedic hip and knee total joint replacements. The company has a strategic alliance with Rapiscan Systems Inc. for the manufacture and sale of explosives detection equipment on a private label basis. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 19, 2007, UHY LLP raised substantial doubt about Implant Sciences Corporation's ability to continue as a going concern after it audited the company's financial statements for the fiscal year ended June 30, 2007. The auditing firm pointed to the company's recurring losses from operations. INSITE VISION: Completes $60 Mil. Placement of Promissory Notes --------------------------------------------------------------- InSite Vision Incorporated closed a private placement to institutional investors of $60 million in aggregate principal amount of non-convertible, non-recourse promissory notes. The notes are secured by royalties to be paid from sales in the United States and Canada of AzaSite(R), azithromycin ophthalmic solution, 1%, a drug licensed to and sold by Inspire Pharmaceuticals for the topical treatment of bacterial conjunctivitis or pink eye. "This non-dilutive financing will help us to transform InSite into a multiple product and sustainable company," Kumar Chandrasekaran, chairman and chief executive officer," said. "We believe this financing will accelerate our ability to advance our current product candidates and bring them to market resulting in an increased revenue stream within the next two to three years. "We are well-positioned to build a successful company with products that will help our patients live better lives." "It is important to note that once we have repaid the notes, InSite will again receive all of the royalty payments under the existing agreement with Inspire," Louis Drapeau, vice president and chief financial officer, said. The company also will terminate a shelf registration statement filed in May 2007 in preparation for a potential public offering of equity securities. InSite Vision intends to use the proceeds of the placement to fund the advancement of its pipeline products, including AzaSite Plus(TM), AzaSite Otic(TM) and AzaSite Xtra(TM), for general corporate purposes, well as to potentially acquire complementary businesses, products, technologies or other assets, although InSite has no current agreements or commitments with respect to any acquisitions. The notes are non-recourse to InSite Vision and are not convertible into InSite equity. The annual cash coupon rate on the notes is 16% with interest payable quarterly beginning May 15, 2008. Interest and principal will be paid back from revenue received from the royalties from AzaSite sales in the United States and Canada. AzaSite revenue resulting from sales in countries other than Canada and the United States is not included in this transaction. Net proceeds to InSite from the financing are approximately $50 million after transaction costs and interest reserves. When the AzaSite royalties received for any quarter exceed the interest payments and certain expenses due that quarter, the excess will be applied to the repayment of principal of the notes until the notes have been paid in full. The notes may be redeemed at InSite's option, subject to the payment of a redemption premium for a certain period of time. About InSite Vision Headquartered in Alameda, California, InSite Vision, Inc. (AMEX: ISV) -- http://www.insitevision.com/-- develops novel ophthalmic and topical anti-infective products. The company's lead product, AzaSite 1% for the topical treatment of bacterial conjunctivitis, was launched in August 2007 in the United States by Inspire Pharmaceuticals, its commercial partner in the United States and Canada. Based on its proprietary azithromycin-DuraSite(R) topical anti-infective product platform, InSite is expanding its portfolio of ophthalmic products by developing AzaSite Plus(TM) and AzaSite Xtra(TM), whose product features have the potential to provide significant advantages not available with current treatment options. In addition, InSite is evaluating the use of its azithromycin-DuraSite platform to develop topical anti-infective products outside of the market category of ophthalmology, including the development of AzaSite Otic for ear infections. Going Concern Doubt Burr, Pilger & Mayer LLP expressed substantial doubt about InSite Vision Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses. With the additional funding from an upfront license fee, a U.S. FDA approval milestone payment and royalties received under an Inspire License, and a refund of approximately $767,000 from the FDA related to its AzaSite NDA filing, the company believes it will have adequate funds to continue operations approximately into the fourth quarter of 2008. INTERSTATE BAKERIES: To Reject CBAs with Two Local BCTGM Unions --------------------------------------------------------------- Interstate Bakeries Corporation and eight of its debtor affiliates seek the Court's authority to reject their collective bargaining agreements with each of the local unions of Bakery, Confectionery, Tobacco Workers and Grain Millers International Union at the Debtors' Biddeford, Maine, and Wayne, New Jersey, bake shops. Tom A. Jerman, Esq., at O'Melveny & Myers LLP, in Washington, D.C., relates that members of the BCTGM Local Union at Biddeford and Wayne failed to ratify the September 2007 comprehensive modification agreement of the BCTGM CBA. Mr. Jerman asserts that because failed ratification votes do not constitute "good cause to refuse a proposal that meets all of the requirements of Section 1113 [of the Bankruptcy Code]," the Biddeford and Wayne CBAs, which covers a total of 650 employees, must be rejected. The Modification Agreement provided for, among others: (a) the addition of certain wage guarantees; (b) a neutrality agreement with respect to union organizing activities; and (c) a profit sharing program that essentially provides that 10% of the Debtors' net income through 2014 will be paid back to eligible employees, capped at a cumulative $25,000,000. Mr. Jerman contends that the Modification Agreement is based on the Debtors' most recent and complete revenue and cost projections that are necessary for them to successfully restructure and exit bankruptcy. He adds that the Debtors' exit financing from Silver Point Finance, LLC, is contingent on the modifications of the BCTGM CBAs. If the Court authorizes rejection of the Biddeford and Wayne CBAs, Mr. Jerman says, the Debtors will only implement the applicable modifications contained in the Modification Agreement and will not otherwise alter the terms and conditions of employment of those employees represented by the BCTGM Local Unions. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. IBC confirmed that it has not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the Court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. JEFFREY GIBSON: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Jeffrey Gibson 1801 Royce Springs Court Haslet, TX 76052 Bankruptcy Case No.: 08-30872 Chapter 11 Petition Date: February 25, 2008 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Joyce W. Lindauer, Esq. (joyce@joycelindauer.com) 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 Total Assets: $10 million to $50 million Total Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. JOHN JACOBS: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: John A. Jacobs Danielle A. Jacobs 1634 South Research Loop, Suite 100 Tucson, AZ 85710 Bankruptcy Case No.: 08-01729 Chapter 11 Petition Date: February 25, 2008 Court: District of Arizona (Tucson) Debtor's Counsel: Michael W. Baldwin, Esq. (michael.baldwin@azbar.org) P.O. Box 35487 Tucson, AZ 85740-5487 Tel: (520) 792-3600 Fax: (520) 792-8616 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Fortune Stone trade debt $403,301 2061 Lynx Place 2061 Lynx Place Ontario, CA 91761 Ontario, CA 91761 eBay, Inc. trade debt $155,826 2145 Hamilton Avenue San Jose, CA 95125 Aurora Loan Services single-family $124,504 P.O. Box 1706 residence; value of Scottsbluff, NE 69363 security: $650,000; value of senior lien: $539,842 Evergreen Trading Co. trade debt $118,845 Silver Star trade debt $93,297 Internal Revenue Service 941 taxes $87,954 Bead Source trade debt $56,259 Lucky Gems trade debt $55,878 Mang Tat Gems trade debt $50,088 Citibank U.S.A. $38,925 Thd/cbusa $38,925 Mays trade debt $37,734 New Century trade debt $37,713 Africa Stone (G. Stone) trade debt $37,200 Jomani Group trade debt $29,864 J.P. Jewelry & Pearl trade debt $18,382 Commercial Resource trade debt $12,101 JP MORGAN: Moody's Downgrades Ratings on Seven Note Classes ----------------------------------------------------------- Moody's Investors Service downgraded seven classes of J.P. Morgan Chase Commercial Mortgage Securities Trust, Commercial Mortgage Pass-Through Certificates, Series 2007-FL1: -- Class RS-1, $11,942,143, Floating, downgraded to Ba1 from Aa3; -- Class RS-2, $12,829,207, Floating, downgraded to Ba2 from A1 -- Class RS-3, $15,573,200, Floating, downgraded to Ba3 from A2 -- Class RS-4, $11,135,241, Floating, downgraded to B1 from A3 -- Class RS-5, $15,411,819, Floating, downgraded to B2 from Baa1 -- Class RS-6, $13,232,658, Floating, downgraded to B3 from Baa2 -- Class RS-7, $7,594,264, Floating, downgraded to Caa1 from Baa3 Non-pooled Classes RS-1, RS-2, RS-3, RS-4, RS-5, RS-6, and RS-7 are secured by the trust junior portion of the Resorts International Portfolio Loan. The senior pooled trust balance is $120.2 million, while the trust junior component is $87.7 million. Classes RS-1, RS-2, RS-3, RS-4, RS-5, RS-6, and RS-7, which Moody's placed on review for possible downgrade on Jan. 11, 2008, have been downgraded due to a recent decline in the Resorts International Portfolio's cash flow. At time of securitization, the Resorts International Portfolio Loan was secured by four hotel/casinos: Atlantic City Hilton (Atlantic City, New Jersey), Resorts East Chicago (East Chicago, Illinois), Bally's Tunica (Robinsonville, Mississippi), and Resorts Tunica (Tunica, Mississippi). In September of 2007, Resorts East Chicago was sold and the allocated balance of the loan was paid down. The 2006 net cash flow for the portfolio excluding Resorts East Chicago was $69.0 million. The trailing twelve month ending November 2007 net cash flow for the portfolio was $46.6 million, a decrease of approximately 32%. KATCO INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Katco Industries, Inc. dba Cosmeticmall.com 75 Larkfield Road East Northport, NY 11731 Bankruptcy Case No.: 08-41042 Type of Business: The Debtor manufactures electrical insulating materials, slit tapes and component parts. See http://www.katco.uk.com/ Chapter 11 Petition Date: February 25, 2008 Court: Eastern District of New York (Brooklyn) Debtor's Counsel: Salvatore LaMonica, Esq. (sl@lhmlawfirm.com) LaMonica, Herbst and Maniscalco, L.L.P. 3305 Jerusalem Avenue Wantagh, NY 11793 Tel: (516) 826-6500 Fax: (516) 826-0222 http://www.lhmlawfirm.com/ Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Stanley, Katz and Joann Katz value of collateral: $614,980 10 Bonnie Drive $295,473; value of Northpoint, NY 11768 security: $295,473 Whites of East Hampton $142,110 81 Main Street East Hampton, NY 11937 L'Occitane $132,665 10 East 36th Street, 8th Floor New York, NY 10016 Basic Research $130,344 Jay Katz $94,740 Strawberry, Ltd. $90,016 Fragrance X $54,185 H20Plus $52,883 The Dupree Group, Inc. $50,000 Jay Katz $48,318 FusionBeauty $42,778 American Express Gold 1005 $30,483 Go Smile $25,302 Metro International $20,052 Distributors Beauty Unlimited Cons $18,574 American Express SmBiz $18,179 Discover Platinum $17,447 Bardeen/Delux Beauty $17,395 Juice Beauty $17,096 M.B.N.A. Bank of America $16,149 KIMBALL HILL: Amends Limited Duration Waiver Agreement ------------------------------------------------------ On Feb. 21, 2008, Kimball Hill Inc. amended its Limited Duration Waiver Agreement and Amendment dated Jan. 25, 2008, with respect to certain of the financial covenants under its existing Amended and Restated Credit Agreement dated Aug. 10, 2007. As result of these amendments, the company is in compliance with its financial covenants contained in the Credit Agreement as of Sept. 30, 2007, and Dec. 31, 2007. The amendments to the financial covenants include (i) reducing the minimum Tangible Net Worth from $160 million to $154 million and (ii) increasing the maximum permitted guarantees of joint venture indebtedness from 35% of Tangible Net Worth to 45% of Tangible Net Worth. In addition, pursuant to the terms of the amendment to the Waiver and Amendment Agreement, the company has agreed that by Feb. 26, 2008, it will either (a) agree with the administrative agent under the Credit Agreement on the form and substance of a blocked account agreement to be implemented with the other banks at which the company maintains accounts or (b) move all cash into deposit accounts with a Lender. As reported in the Troubled Company Reporter on Feb. 21, 2008, Kimball Hill Homes reached a limited duration waiver agreement with its lender group that extends until March 14, 2008. A full-text copy of the amendment to the Waiver and Amendment Agreement is available for free at: http://researcharchives.com/t/s?2872 About Kimball Hill Kimball Hill Inc., -- http://www.kimballhillhomes.com/ -- still owned and operated by the Hill family, builds mid-priced single- family detached homes, townhomes, and condominiums under the name Kimball Hill Homes in the Chicago area and in California, Florida, Nevada, Texas, and Wisconsin. Subsidiary KH Financial offers mortgage financing and refinancing of investment properties in about half a dozen states. * * * As reported in the Troubled Company Reporter on Feb. 22, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Kimball Hill Inc. to 'CC' from 'CCC+' and removed it from CreditWatch, where it was placed with negative implications on Jan. 3, 2008. At the same time, S&P lowered its rating on the company's senior subordinated notes to 'C' from 'CCC-'. The outlook is negative. The rating actions affect $203 million in rated senior subordinated notes. KLEROS PREFERRED: Credit Quality Erosion Cues Moody's Rating Cuts ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of seven classes of notes issued by Kleros Preferred Funding VII, Ltd. and left on review for possible further downgrade ratings of five of these classes of notes. The notes affected by this rating action are: Class Description: $900,000,000 Class A-1 First Priority Senior Secured Delayed Draw Floating Rate Notes Due 2053; -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: $375,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2053; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $75,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2053; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $69,000,000 Class A-4 Fourth Priority Senior Secured Floating Rate Notes Due 2053; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $41,000,000 Class B Fifth Priority Senior Secured Floating Rate Notes Due 2053; -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $15,500,000 Class C Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2053; and -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: C Class Description: $14,500,000 Class D Seventh Priority Mezzanine Deferrable Floating Rate Notes Due 2053 . -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on Jan. 30, 2008, as reported by the Trustee, of an event of default caused by a failure of the Class A Sequential Pay Ratio to be greater than or equal to 100 percent, pursuant Section 5.1(h) of the Indenture dated April 5, 2007. Kleros Preferred Funding VII, Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, and the Class B Notes remain on review for possible further action. KNIGHT INC: Bares Proforma Financials in Relation to MidCon Sale ---------------------------------------------------------------- As reported in the Troubled Company Reporter on Feb. 19, 2008, Knight Inc. completed the sale of 80% of its ownership interests in MidCon Corp., a wholly owned subsidiary of the company, pursuant to the purchase agreement with Myria Acquisition Inc., a Delaware corporation. Total cash received for the disposition was approximately $5.9 billion. In connection with the closing of the sale, MidCon's wholly owned subsidiary, NGPL PipeCo LLC, merged with and into MidCon, and MidCon converted from a Delaware corporation to a Delaware limited liability company and changed its name to NGPL PipeCo LLC. Knight will use virtually all of the expected approximately $5.3 billion of combined after-tax proceeds from the sale of MidCon and from the issuance of debt by NGPL PipeCo LLC to pay down outstanding debt starting with debt incurred by Knight in connection with its going private transaction that closed in May 2007. To give effect to the sale, Knight Inc. presented the following unaudited pro forma condensed consolidated financial statements of of the company: a) Balance Sheet of Knight Inc. as of Sept. 30, 2007, b) Statements of Operations for the year ended Dec. 31, 2006, (Predecessor Company), the four months ended Sept. 30, 2007, (Successor Company) and the five months ended May 31, 2007, (Predecessor Company) The unaudited pro forma balance sheet is presented as if the sale occurred on Sept. 30, 2007, and the unaudited pro forma statements of operations present the company's operations as if the sale had occurred on Jan. 1, 2006. A full-text copy of the aforementioned financial statements is available for free at http://researcharchives.com/t/s?2873 About Knight Inc. Headquartered in Houston, Texas, Knight Inc., formerly Kinder Morgan, -- http://www.kindermorgan.com-- operates 38,000 miles of natural gas pipelines in the US and Canada. The company also distributes natural gas to more than 1.1 million customers, primarily in the Midwest, and operates gas-fired power plants along its pipelines. Through Kinder Morgan Management, it holds 14.7% of Kinder Morgan Energy Partners, which transports refined products and operates more than 155 terminals that handle coal, petroleum coke, and other materials. In 2007 chairman and chief executive officer Richard Kinder, who owns 31% of the company, led a group of investors in taking Kinder Morgan private and changed its name to Knight. * * * As reported in the Troubled Company Reporter on Feb. 19, 2008, DBRS upgraded the rating of the secured medium-term notes and debentures of Knight Inc. to BB (high) from BB, with a positive trend, following the closing of the sale of 80% of the ownership interests of MidCon to Myria Acquisition Inc. This removes the rating from Under review with developing implications, where it was placed on Dec. 11, 2007, when the aforementioned sale was proposed. MidCon owns Natural Gas Pipeline Company of America. LA STRADA: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: La Strada, Inc. d.b.a. La Strada 322 Westheimer Boulevard Houston, TX 77006 Bankruptcy Case No.: 08-31078 Chapter 11 Petition Date: February 22, 2008 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: Marjorie A. Payne Britt, Esq. (brittefile@aol.com) 4615 Southwest Freeway, Suite 500 Houston, TX 77027 Tel: (713) 666-0807 Fax: (713) 355-8382 Estimated Assets: Less than $50,000 Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its largest unsecured creditors. LAND O'LAKES: Earns $5.5 Million in Quarter Ended December 31 ------------------------------------------------------------- Land O'Lakes Inc. reported its fourth-quarter and full-year financial results. The company reported significant increases in both sales and net earnings, with net sales up 26% and net earnings up 83%. For the fourth quarter, the company reported net earnings of $5.5 million, compared to net earnings of $44.5 million in the fourth quarter of 2006. The company reported $2.6 billion in net sales compared to $1.9 billion in net sales in the fourth quarter of 2006. Net earnings for full year 2007 was $162.08 million compared to $88.67 million in 2006. Full-year sales totaled $8.9 billion compared to net sales of $7.1 billion for 2006. Total EBITDA or earnings before interest, taxes, depreciation and amortization was $46 million for the quarter compared to $95.4 million and $332.1 million for the year compared to $250.1 million for the same periods one year ago. "The past year was highlighted by improved performance nearly across the board, continued balance sheet strength and strategic progress in positioning for the future," Chris Policinski, Land O'Lakes president and chief executive officer said. "Clearly, strong markets, particularly in dairy and eggs, helped boost both dollar sales and earnings. However, our organization-wide commitment to leveraging our brand strength, aggressive portfolio management and effective cost control put us in a position to translate market strength into improved business performance and financial results." Balance Sheet Total balance sheet debt, including capital leases, was up modestly to $749 million at year-end versus $708 million as of Dec. 31, 2006. Company officials indicated the increased debt was related primarily to the September restructuring of its investment in the Agriliance LLC agronomy joint venture, which resulted in the Agriliance crop protection products business being transferred to Land O'Lakes. The company improved its Long-Term-Debt to Capital ratio, which was at 36.8% as of Dec. 31, 2007, compared to 40.1% as of Dec. 31, 2006. Liquidity, defined as cash on hand plus unused capacity on short-term debt facilities, was $543 million at Dec. 31, 2007, versus $452 million one year ago. Equities were up approximately $100 million to $1 billion. At Dec. 31, 2007, the company's balance sheet showed total assets of $4.4 billion, total liabilities of $3.36 billion and total equities $1.04 billion. About Land O'Lakes Headquartered in Saint Paul, Minnesota, Land O'Lakes Inc. -- http://www.landolakesinc.com/-- is a national, farmer-owned food and agricultural cooperative. Land O'Lakes does business in all 50 states and more than 50 countries. It is a leading marketer of a full line of dairy-based consumer, foodservice and food ingredient products across the United States; serves its international customers with a variety of food and animal feed ingredients; and provides farmers and ranchers with an extensive line of agricultural supplies and services. Land O'Lakes also provides agricultural assistance and technical training in more than 25 developing nations. * * * As reported in the Troubled Company Reporter on Dec. 14, 2007, Standard & Poor's Ratings Services raised its corporate credit and other ratings on privately-owned marketing and supply cooperative Land O'Lakes Inc. The corporate credit rating is now 'BB'. The outlook is stable. LAWRENCE SALANDER: Seeks Employment as Gallery Auction Manager -------------------------------------------------------------- Salander-O'Reilly Galleries LLC owner Lawrence Salander is asking a bankruptcy court to allow the gallery to rehire him to sort and sell 4,000 artworks, ARTINFO (N.Y.) reports. Mr. Salander earned $50,000 a month running the business. He has asked the judge to determine his fees in the auction of the artworks. A committee of creditors in the case have proposed hiring New York-based Bridge Associates LLC, according to the report. Mr. Salander have also filed for bankruptcy. The couple is selling their Upper East Side town house for $25 million. As reported in the Troubled Company Reporter on Feb. 7, 2008, the official committee of unsecured creditors appointed in Salander- O'Reilly's chapter 11 case, the Debtor's secured lender First Republic Bank, and the gallery's chief restructuring officer have proposed a May 8 deadline for anyone who has a claim on art to file a written notice of the claim. About Lawrence Salander Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York, has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. The couple owns New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/ Established in 1976, Salander-O'Reilly Galleries exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07- 13476). The petitioners are Carol F. Cohen of Two Swans Farm claiming $4,607,900; Giorgio Cavallon Family LP with $960,000 claim; and Richard Ellenberg with a contract claim of $50,400. Amos Alter, Esq. at Troutman Sanders LLP and John Koegel, Esq. at The Koegel Group LLP are counsels to the petitioners. On Nov. 9, 2007, the Salander-O'Reilly's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin, Esq., at Halperin Battaglia Raicht LLP, and Susan P. Persichilli, Esq., at Buchanan Ingersoll PC, represent the Debtor. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, and independent turnaround firm. LB-UBS COMMERCIAL: Three Classes Obtain Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service upgraded these ratings of two classes, downgraded these ratings of three classes and affirmed these ratings of nine classes of LB-UBS Commercial Mortgage Trust 2000- C4, Commercial Mortgage Pass-Through Certificates, Series 2000-C4: -- Class A-2, $548,325,531, affirmed at Aaa -- Class X, Notional, affirmed at Aaa -- Class B, $42,460,000, affirmed at Aaa -- Class C, $39,963,000, affirmed at Aaa -- Class D, $12,488,000, upgraded to Aaa from Aa1 -- Class E, $7,493,000, upgraded to Aa1 from Aa2 -- Class F, $17,483,000, affirmed at A1 -- Class G, $12,489,000, affirmed at Baa1 -- Class H, $22,479,000, affirmed at Ba1 -- Class J, $12,488,000, affirmed at Ba2 -- Class K, $7,493,000, affirmed at Ba3 -- Class L, $7,493,000, downgraded to B2 from B1 -- Class M, $9,990,000, downgraded to Caa2 from B3 -- Class N, $4,996,000, downgraded to Ca from Caa1 As of the Feb. 15, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 24.7% to $751.8 million from $999.1 million at securitization. The Certificates are collateralized by 136 mortgage loans ranging in size from less than 1.0% to 10.6% of the pool, with the top 10 loans representing 32.7% of the pool. The pool includes a shadow rated component representing 15.4% of the pool. Forty-nine loans, representing 35.9% of the pool, have defeased and are secured by U.S. Government securities. Seven loans have been liquidated from the pool, resulting in aggregate realized losses of approximately $6.3 million. Currently there are seven loans, representing 4.3% of the pool, in special servicing. Five of these loans, representing 2.1% of the pool, are either REO or in the process of foreclosure. Moody's estimates an aggregate loss of $9.4 million for the specially serviced loans. Twenty-two loans, representing 9.0% of the pool, are on the master servicer's watchlist. Moody's was provided with full-year 2006 and partial-year 2007 operating results for approximately 99.0% and 60.0%, respectively, of the non-defeased performing loans. Moody's loan to value ratio for the conduit component is 79.5%, essentially the same as at Moody's last full review in February 2007, compared to 85.5% at securitization. Moody's is upgrading Class D and E due to defeasance, stable overall pool performance and increased subordination levels. Moody's is downgrading Classes L, M and N due to realized and estimated losses from specially serviced loans and increased LTV dispersion. Based on Moody's analysis, 20.3% of the conduit pool has an LTV greater than 100.0%, compared to 14.8% at last review and 0.0% at securitization. The largest shadow rated loan is the Westfield Shoppingtown South Shore Loan ($79.8 million - 10.6%), which is secured by the borrower's interest in a 1.2 million square foot regional mall located in Bay Shore (Long Island), New York. The center is anchored by Macy's, Sears and J.C. Penney. As of June 2007 the in-line space was 91.6% occupied, compared to 88.4% at last review. Moody's current shadow rating is A1 compared to A2 at last review. The second shadow rated loan is the Westfield Shoppingtown Plaza Camino Real Loan ($36.0 million -- 4.8%), which is secured by the borrower's interest in a 1.1 million square foot regional mall located in Carlsbad, California. The center is anchored by Macy's, Sears and J.C. Penney. As of September 2007, the in-line space was 92.7% occupied, compared to 95.8% at last review. Moody's current shadow rating is Aaa, the same as at last review. The top three non-defeased conduit loans represent 9.9% of the outstanding pool balance. The largest conduit loan is the Johnson City Mall Loan ($38.2 million -- 5.1%), which is secured by a 545,000 square foot regional mall located in Johnson City, Tennessee. The center is anchored by Belk, J.C. Penney, Sears and Dick's Sporting Goods. As of November 2007, the center was 99.0% occupied, compared to 95.5% at last review. Goody's, which occupied 7.0% of the GLA, recently vacated the center at its lease expiration. Average sales for the in-line stores for 2006 were $420 per square foot, compared to $388 per square foot at last review. Moody's LTV is 67.5% compared to 64.8% at last review. The second largest conduit loan is the 136 Madison Avenue Loan ($21.0 million - 2.8%), which is secured by a 284,000 square foot office building located in midtown Manhattan. As of October 2007, the property was 94.2% leased, compared to 100.0% at last review. The largest tenants include Bestform Inc. (18.1% NRA; lease expiration December 2008) and Interpublic Group of Companies (17.4% NRA; lease expiration March 2010). Moody's LTV is 50.2% compared to 51.3% at last review. The third largest conduit loan is the Georgesville Square Loan ($15.1 million - 2.0%), which is secured by a 254,000 square foot community retail center located in Columbus, Ohio. The center is anchored by Lowe's (56.0% GLA; lease expiration October 2016) and Kroger (27.0% GLA; lease expiration April 2017). The property was 97.2% occupied as of September 2007, compared to 94.1% at last review. Moody's LTV is 77.4% compared to 78.5% at last review. LEFT BEHIND: Dec. 31 Balance Sheet Upside-Down by $1.8M ------------------------------------------------------- Left Behind Games Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $1,953,220 in total assets and $3,786,819 in total liabilities, resulting in a $1,833,599 total stockholders' deficit. At Dec. 31, 2007, the company's cosolidated balance sheet also showed strained liquidity with $1,573,171 in total current assets available to pay $3,778,677 in total current liabilities. The company reported a net loss of $1,133,329 on net revenues of $29,938 for the third quarter ended Dec. 31, 2007, compared with a net loss of $4,517,787 on net revenues of $237,988 for the corresponding period ended Dec. 31, 2006. Selling, general and administrative expenses were $909,641 for the three months ended Dec. 31, 2007, compared to $3,788,543 for the three months ended Dec. 31, 2006, a decrease of $2,878,902 or 76%. Product development expenses were $39,819 for the three months ended Dec. 31, 2007, compared to $494,212 for the three months ended Dec. 31, 2006, a decrease of $454,393 or 92%. Interest expense rose to $155,734 for the three months ended Dec. 31, 2007, compared to $5,792 of interest income in the three months ended Dec. 31, 2006. 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?287f Going Concern Disclaimer KMJ Corbin and Company LLP, in Irvine, California, expressed substantial doubt about Left Behind Games 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 significant operating losses and negative cash flows from operations through March 31, 2007, and has an accumulated deficit at March 31, 2007. About Left Behind Games Based in Murrieta, Calif., Left Behind Games Inc. (OTC BB: LFBG) -- http://www.leftbehindgames.com/-- a Washington corporation doing business through its subsidiary Left Behind Games Inc., a Delaware corporation, is in the business of developing and publishing video game products based upon the popular Left Behind series of novels. The company has the exclusive world-wide rights to the Left Behind book series and brand, for the purpose of making video games. LIBERTY TAX III: Dec. 31 Balance Sheet Upside-Down by $10.5 Mil. ---------------------------------------------------------------- Liberty Tax Credit Plus III L.P.'s consolidated balance sheet at Dec. 31, 2007, showed $67.8 million in total assets, $77.6 million in total liabilities, and $778,430 in minority interest, resulting in a $10.5 million total stockholders' deficit. The company reported net income of $10.8 million on total revenues of $1.7 million for the third quarter ended Dec. 31, 2007, compared with a net loss of $343,917 on total revenues of $1.6 million for the same period ended Dec. 31, 2006. Results for the three months ended Dec. 31, 2007, includes income from discontinued operations of $11.4 million, versus income from discontinued operations of $473,227 during the corresponding period ended Dec. 31, 2006. Loss from operations was $550,903 during the three months ended Dec. 31, 2007, compared to loss from operations of $817,144 during the same period ended Dec. 31, 2006. The decrease in operating loss mainly reflects the increase in total revenues and the decrease in total expenses. Liquidity and Capital Resources The partnership's original capital was invested in sixty two local partnerships. As of Dec. 31, 2007, the partnership has sold its limited partnership interest in twenty seven local partnerships, the property and the related assets and liabilities of twelve local partnerships, 2 properties owned by a local partnership and transferred the deed to the property and the related assets and liabilities of one local partnership. In addition, the partnership has entered into agreements for the sale of 8 local partnerships. 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?2881 About Liberty Tax Headquartered in New York City, Liberty Tax Credit Plus III L.P. is a limited partnership, which was formed under the laws of the State of Delaware on Nov. 17, 1988. Liberty Tax Credit Plus III L.P. invests in other limited partnerships, each of which owns one or more leveraged low- and moderate-income multifamily residential complexes that are eligible for the low-income housing tax credit enacted in the Tax Reform Act of 1986, and to a lesser extent, in local partnerships owning properties that are eligible for the historic rehabilitation tax credit. Liberty Tax Credit's general partners are Related Credit Properties III L.P., a Delaware limited partnership, and Liberty GP III Inc., a Delaware corporation. LODGENET INTERACTIVE: Incurs $19.7MM Net Loss For 2007 Fourth Qtr. ------------------------------------------------------------------ LodgeNet Interactive Corporation reported net loss of $19.7 million for the fourth quarter of 2007 compared to a net loss of $0.1 million in the prior year quarter. The net loss included $11.8 million of acquisition related costs for restructuring, integration, and acquired intangibles. Net loss was $65.2 million for fiscal 2007 ended Dec. 31 compared to a net income of $1.8 million in the prior year. The net loss includes $25.4 million of acquisition related costs for restructuring, integration, and acquired intangibles and a $22.2 million one-time charge related the debt refinancing. Total revenue for the fourth quarter of 2007 was $132.8 million, an increase of $63.1 million or 90.6%, compared to $66.2 million for the fourth quarter of 2006. The growth was primarily driven by the acquisition of On Command and StayOnline, which contributed $59.8 million to revenue. Total revenue for fiscal 2007 was $485.6 million, an increase of $197.4 million or 68.5%, from $288.2 million in 2006. The growth was primarily driven by the acquisition of On Command and StayOnline, which contributed $184.7 million to revenue For the year, cash provided by operating activities was $58.9 million, which was reduced by $38.2 million of cash used primarily for acquisition refinancing, restructuring and integration related activities. Cash provided by operating activities, excluding the acquisition related activities, was $97.1 million. Cash used for property and equipment additions, including growth related capital was $79.1 million. In addition, cash used for the acquisition investments was $354.8 million. During 2006, cash provided by operating activities was $72.3 million while cash used for property and equipment additions was $48.3 million. For the quarter, cash provided by operating activities was $16.5 million, which was reduced by $5.7 million of cash used for integration, restructuring, and acquisition related activities. Cash provided by operating activities, excluding cash used for acquisition refinancing, integration and restructuring related activities, was $22.2 million. Cash used for property and equipment additions, including growth related capital was $18.5 million. During the fourth quarter of 2006, cash provided by operating activities was $11.8 million while cash used for property and equipment additions, including growth-related capital, was $11.4 million. "2007 was a transformation year for LodgeNet, during which we transformed from a company historically focused on movies and entertainment to an organization that is now the largest provider of interactive media and connectivity solutions to the hospitality and healthcare industries," Scott C. Petersen, president and chief executive officer, said. "Following our strategic acquisitions in the areas of interactive television, broadband Internet and advertising media, we now offer our customers an expanded suite of services and solutions that connect, inform and entertain guests and patients." "2007 was a very busy and productive year as we increased total rooms by 87%, more than doubled the digital rooms to approximately 1.5 million, doubled the number of cable programming rooms served, and increased our broadband Internet rooms by almost five fold," Mr. Petersen explained. "This strategic transformation places us in a unique position to broaden our customer relationships and drive meaningful new revenues by selling more to our existing customers." "We are committed to driving additional operational efficiencies and diversifying our revenues by focusing on delivering high- definition television, broadband Internet, and professional and advertising media solutions across our expanded customer base," Mr. Petersen concluded. "Driven by our acquisitions, 2007 revenue increased 68% to $485.6 million and Adjusted Operating Cash Flow grew 39% to $130.7 million," Gary H. Ritondaro, Senior vice president and chief executive officer, said. "As expected, we are reporting a net loss as we were affected by acquisition, restructuring and financing-related activities." "Our progress in integrating On Command into LodgeNet is running ahead of plan and as a result we recorded for 2007 restructuring expenses of $11.2 million," Mr. Ritondaro added. "We made a conscious decision to accelerate the integration and closure of a warehousing and manufacturing facility and eliminated certain back office activities ahead of plan in the fourth quarter, which increased restructuring expense for the fourth quarter of 2007 by approximately $3.5 million." "These activities were planned for the first quarter of 2008," Mr. Ritondaro continued. "In addition, we continued to make progress on bringing the revenue performance of recently acquired rooms into parity with the historical LodgeNet base and remain focused on controlling expenses and generating free cash flow." As of Dec. 31, 2007, the company's balance sheet reflected total assets of $693.8 million, total liabilities $742.1 million resulting to a stockholders' deficiency $48.2 million. About LodgeNet Entertainment Based in Sioux Falls, South Dakota, LodgeNet Entertainment Corporation (NASDAQ:LNET) -- http://www.lodgenet.com/-- is the provider of media and connectivity services designed to meet the needs of hospitality, healthcare and other visitor and guest-based businesses. LodgeNet serves more than 1.9 million hotel rooms representing 9,300 hotel properties worldwide in addition to healthcare facilities throughout the United States. LodgeNet's services include on demand movies, games, television programming, music and information, along with subscription sports programming and high-speed Internet access. LodgeNet Entertainment Corporation owns and operates businesses under these brands: LodgeNet, LodgeNetRX, On Command and StayOnline. * * * Moody's Investor Services placed LodgeNet Entertainment Corporation's bank loan debt rating at 'B1' in April 2007. The rating still holds to date with a stable outlook. MAXJET AIRWAYS: Files Schedules of Assets and Liabilities --------------------------------------------------------- MAXjet Airways Inc. delivered to the United States Bankruptcy Court for the District of Delaware its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property B. Personal Property $14,836,147 C. Property Claimed as Exempt D. Creditors Holding $ 7,028,894 Secured Claims E. Creditors Holding 283,551 Unsecured Priority Claims F. Creditors Holding 16,289,378 Unsecured Nonpriority Claims ----------- ----------- TOTAL $14,836,147 $23,601,824 About MAXjet Airways Dulles, Virginia-based MAXjet Airways Inc. -- http://www.maxjet.com/-- is an all-business class, long-haul airline company. It has introduced scheduled services with flights from London Stansted Airport to New York. As of December, 2006, it leased five B767 aircraft. Its customers are both business and leisure travelers. At the airport, its product features check-in facilities located in primary terminals, security and a business class departure lounge and arrivals facility. Its flights features deep-recline seats (170 degree) spaced at a 60 inch pitch, portable entertainment systems, stowage space and business class catering. The Debtor filed for chapter 11 protection on Dec. 24, 2007 (Bankr. D. Del. Case No. 07-11912). The Debtor selected Pachulski Stang Ziehl & Jones LLP and Pillsbury Winthrop Shaw Pittman LLP as its bankruptcy counsels. Arent Fox LLP represents the Official Committee of Unsecured Creditors. The Debtor listed assets between $10 million and $50 million and debts between $50 million and $100 million when it filed for bankruptcy. MANUFACTURED HOUSING: S&P Rating on Class M-1 Cert. Tumbles to 'D' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on the class M-1 senior/subordinated pass-through certificates from Manufactured Housing Contract Sr/Sub Pass-Thru Cert. Series 2001-2 to 'D' from 'CCC-'. The lowered rating reflects the reduced likelihood that investors will receive timely interest and the ultimate repayment of their original principal investment. This transaction reported outstanding liquidation loss interest shortfalls for the class M-1 certificates on the January and February 2008 payment dates. Standard & Poor's believes that interest shortfalls for this transaction will continue to be prevalent in the future, given the adverse performance trends displayed by the underlying pool of collateral, as well as the location of subordinate class write- down interest at the bottom of the transaction's payment priorities (after distributions of senior principal). As of the February 2008 payment date, series 2001-2 had experienced cumulative net losses of 25.0% of its initial pool balance. Standard & Poor's will continue to monitor the outstanding ratings associated with this transaction in anticipation of future defaults. MARIA ELENA BANKS: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Maria Elena Banks 23011 Bering Sea Drive Dana Point, CA 92629 Tel: (213) 483-2210 Bankruptcy Case No.: 08-10843 Chapter 11 Petition Date: February 22, 2008 Court: Central District Of California (Santa Ana) Debtor's Counsel: Mufthiha Sabaratnam, Esq. Sabaratnam & Associates 701 North Alvarado Street 3rd Floor Los Angeles, CA 90026 Tel: (213) 483-2210 pke115mfs@yahoo.com Total Assets: $5,502,251 Total Debts: $4,603,461 Debtor's list of its Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ R. Gail Schoenau Medical Bill $661 31862 Coast Highway Suite 204 Laguna Beach, CA 92651 Laguna Pathology Medical Group Medical Bill $247 31872 Coast Highway Laguna Beach, CA 92651 MBIA INSURANCE: S&P Assigns Negative Outlook on 'AAA' Fin'l Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services took rating actions on several monoline bond insurers following additional stress tests with respect to their domestic nonprime mortgage exposure. -- The 'AAA' financial strength rating on MBIA Insurance Corp. was removed from CreditWatch and a negative outlook was assigned; -- The financial strength rating on Financial Guaranty Insurance Co. was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications; -- The financial strength ratings on XL Capital Assurance Inc. and XL Financial Assurance Ltd. were lowered to 'A-' from 'AAA' and remain on CreditWatch with negative implications; -- The 'AAA' financial strength rating on Ambac Assurance Corp. was affirmed and remains on CreditWatch with negative implications; and -- The 'AAA' financial strength ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. were affirmed and retain a negative outlook. The removal from CreditWatch of, and assignment of negative outlooks on, MBIA Insurance Corp., MBIA Inc., and North Castle Custodial Trusts I-VIII (a committed capital facility supported by, and for the benefit of, MBIA) reflect MBIA's success in accessing $2.6 billion of additional claims-paying resources, which, in S&P's view, is a strong statement of management's ability to address the concerns relating to the capital adequacy of the company. The downgrades on FGIC, FGIC Corp., and Grand Central Capital Trusts I-VI (a committed capital facility supported by, and for the benefit of, FGIC) reflect S&P's current assessment of potential losses, which is higher than previous estimates. The downgrades on XLCA, XLFA, XL Capital Assurance (UK) Ltd., and Twin Reefs Pass-Through Trust (a committed capital facility supported by, and for the benefit of, XLFA) reflect S&P's assessment that the company's evolving capital plan has meaningful execution and timing risk. The affirmation of S&P's 'AAA' financial strength and financial enhancement ratings on Ambac Assurance Corp. and S&P's 'AA' rating of Anchorage Finance Sub-Trusts I-IV and Dutch Harbor Finance Sub- Trusts I-IV (committed capital facilities supported by, and for the benefit of, Ambac) and holding company Ambac Financial Group Inc. reflects S&P's assessment of the scope of Ambac's capital- raising plans and the company's ability to implement those plans. S&P left the ratings on CreditWatch with negative implications to reflect uncertainty surrounding the risk profile and capitalization plans for the reported new corporate structure being contemplated by the holding company. The affirmation of S&P's 'AAA' financial strength rating on CIFG reflects the contribution of $1.5 billion in capital resources to CIFG Holding by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne to support CIFG's claims-paying resources. CIFG's outlook was changed to negative from stable in June 2007 for reasons unconnected to its subprime exposure. Rather, S&P looked at the effectiveness and processes of the company's board, appropriate succession planning, and the degree of long-term support to be provided by its parent Natixis S.A. The assignment of the negative outlook also reflected S&P's views relating to CIFG's below-average earnings and return on earnings. Nevertheless, S&P considers the $1.5 billion capital contribution to be an important statement by CNCE and BFBP about their near- term commitment to the financial guaranty industry and CIFG. About MBIA Headquartered in Armonk, New York, MBIA Inc. (NYSE:MBI) -- http://www.mbia.com-- provides financial guarantee insurance, investment management services, and municipal and other servicesto public finance and structured finance clients on a globalbasis. The company conducts its financial guarantee business through its wholly owned subsidiary, MBIA Insurance Corporation and provides investment management products and financial services through its wholly owned subsidiary MBIA Asset Management, LLC. MBIA manages its activities primarily through two principal business operations: insurance and investment management services. In February 2007, MBIA Corp. formed a new subsidiary, MBIA Mexico, S.A. de C.V. During the year ended Dec. 31, 2006, MBIA discontinued its municipal services operations. These operations included MBIA MuniServices Company. On Dec. 5, 2006, the company completed the sale of MBIA MuniServices Company. * * * As reported in the Troubled Company Reporter on Jan. 21, 2008, Moody's Investors Service placed the Aaa insurance financial strength ratings of MBIA Insurance Corporation and its affiliated insurance operating companies on review for possible downgrade. In the same rating action, Moody's also placed the surplus note rating of MBIA Insurance Corporation (Aa2-rated) and the ratings of the holding company, MBIA, Inc. (senior debt at Aa3), on review for possible downgrade. This rating action reflects Moody's growing concern about the potential volatility in ultimate performance of mortgage and mortgage-related CDO risks, and the corresponding implications for MBIA's risk-adjusted capital adequacy. Prior to this rating action, the rating outlook for MBIA was negative. MBIA INSURANCE: Moody's Holds 'AAA' Rating; Gives Negative Outlook ------------------------------------------------------------------ Moody's Investors Service confirmed the Aaa insurance financial strength ratings of MBIA Insurance Corporation and its affiliated insurance operating companies. Moody's also confirmed the Aa2 rating on surplus notes issued by MBIA Insurance Corporation, and the Aa3 senior unsecured ratings of parent company, MBIA Inc. These rating actions reflect Moody's assessment of MBIA's ongoing efforts to strengthen its capital position in light of its troubled mortgage and mortgage-related CDO exposures, as well as changes the company is implementing to reduce the volatility associated with its insured portfolio. The rating outlook is negative. Overview of Rating Approach As outlined in Moody's Rating Methodology for Financial Guarantors, Moody's has evaluated MBIA along five key rating factors: 1) franchise value and strategy, 2) insurance portfolio characteristics, 3) capital adequacy, 4) profitability, and 5) financial flexibility. Of these factors, capital adequacy is given particular emphasis. To estimate capital adequacy, Moody's has applied its traditional portfolio risk model for determining stress losses on the non- mortgage related portion of MBIA's insured portfolio and alternative stress tests for the mortgage and mortgage-related CDO exposure. For mortgage-related exposures, stress losses were estimated using assumptions consistent with a scenario where 2006 subprime first lien mortgages realize an average of 21% cumulative pool losses, with other vintages and products stressed accordingly. Stress-level losses for RMBS transactions were assessed on a transaction-by-transaction basis, while loss estimates for ABS CDOs were derived using a stochastic simulation model which applied stress to specific underlying collateral tranches within the CDOs. Estimated tranche-level losses were computed based on the structure of those tranches (e.g. attachment and detachment points) and estimates of their performance relative to the average. Losses estimated under the approach described above were present valued to reflect estimates of the payout pattern that would emerge, based on the collateral type. For ABS CDOs, consideration was given to the specific contractual features within associated CDS contracts. These factors resulted in aggregate present value discounts to principal loss estimates of approximately 9% for RMBS and 33% for ABS CDOs. Non mortgage risks are discounted within the portfolio model based on estimates of payout patterns as well. In comparing estimated stress losses to claims paying resources and associated rating levels, Moody's combines an estimated loss distribution for mortgage risks with one for non-mortgage risks, assuming a correlation between the two that ranges from 90% (for Aaa) down to 30% (for Baa3). Claims paying resources are then compared to the indicated capital need, at the target benchmark (1.3x capital needed to cover stress-case losses). Key Rating Factors: Capital Adequacy Based on the risks in MBIA's portfolio, as assessed by Moody's according to the approach outlined above, estimated stress-case losses would be in the range of $13.7 billion. This compares to Moody's estimate of MBIA's claims paying resources of approximately $16.1 billion, resulting in a total capital ratio of about 1.2x, which is significantly in excess of the "minimum" Aaa level, but short of the 1.3x Aaa "target" level by about $1.7 billion. Moody's said that, as outlined in its rating methodology, the shortfall in capitalization from the Aaa target was considered in relation to MBIA's plans for closing the gap through a combination of capital strengthening measures, and was determined to be consistent with a Aaa rating. Moody's further noted that in the most likely or "expected" scenario, MBIA's insured portfolio will incur lifetime losses of approximately $4 billion in present value terms, and that MBIA's current claims- paying resources cover this expected loss estimate by roughly 4x. Over the past two months, MBIA has completed transactions to raise $1.6 billion in equity and $1 billion in surplus notes, demonstrating a strong commitment to its policyholders. MBIA is considering a number of initiatives that should enable it to meet the Aaa target threshold over the next six to twelve months. Moody's said that the already announced dividend elimination and six-month suspension of new structured finance underwriting, in combination with normal portfolio runoff and targeted reinsurance strategies, should significantly contribute to that objective. Key Rating Factors: Business and Financial Profile In Moody's opinion, MBIA's significant exposure to mortgage- related risk has had consequences for its business and financial profile beyond the associated impact on capitalization, and affects Moody's opinion about MBIA's other key rating factors. Nonetheless, despite some of the recent challenges faced by the company related to investor confidence, Moody's believes that MBIA is better-positioned relative to certain less-established competitors with respect to business franchise, prospective profitability and financial flexibility. With respect to underwriting and risk management, Moody's believes that MBIA's significant exposure to the mortgage sector is indicative of a risk posture somewhat greater than would be consistent with a Aaa rating going forward. Moody's also believes that the company's non-core asset management activities, including GICs, place incremental negative pressure on its ratings. Moody's notes, however, that MBIA is making major changes to its underwriting and risk management strategies in an effort to reduce performance volatility within its insured portfolio. MBIA is developing a principles-based approach to financial guaranty underwriting, significantly narrowing the range of exposures that it will pursue in order to limit the company's exposure to extreme loss outcomes in the event of market crises such as that in US residential mortgages and CDOs holding these mortgages. The company has indicated that it will avoid certain structured finance business, and will no longer underwrite derivatives contracts as it believes that the volatilities these create are inconsistent with the business model. In Moody's opinion, the company's commitment to focusing on reduced single and correlated risk concentrations across its portfolio represents a critical element to its risk management plan going forward. MBIA's near term profitability is likely to remain below historical levels, as new business production remains lackluster for some time, especially given the firm's temporary moratorium on structured finance underwriting and as possible additional credit losses are realized. However, some stability is provided by the company's large in-force portfolio, which will continue to provide significant premium revenue for years. The ability of the company to reestablish its strong market position in the US public finance market will take time but should be facilitated by the firm's strategy to separate its municipal, structured finance and asset management businesses into distinct legal entities over time. In Moody's opinion, however, MBIA's broad and deep relationships with issuers, as well as its prominent market position and execution capabilities in several market sectors, provide the company with a good foundation from which to regain a solid market position in the US public finance guaranty business. In terms of financial flexibility, MBIA, like other financial guarantors, benefits from its ability to pay claims over an extended period of time, typically scheduled interest and principal at maturity. Moody's has also considered in its rating review the potential for calls on liquidity at MBIA in the context of available resources, including the investment profile of the operating insurance entities and its asset management activities. MBIA's financial leverage profile could increase if incurred losses further erode shareholders' equity. Moody's believes that holding company liquidity is currently adequate, supported by dividend capacity from MBIA Insurance Corporation and strong debt service coverage available through cash and investments held at the holding company level. Views on Possible Split of Municipal and Structured Businesses MBIA has indicated that it intends, over time, to pursue the public sector and structured finance businesses through distinct legal entities. Moody's current ratings for MBIA do not reflect the impact of such an organizational change. The ratings appropriate for separate insurers operating under such a strategy would depend on their specific business and financial characteristics, including capitalization and underwriting frameworks. In this scenario, Moody's believes that the structured finance guarantor would be more challenged than its public finance affiliate to maintain a Aaa rating, due to the relatively greater complexity of risks and higher risk concentrations evident in that sector of the market. Those risks are more muted within a single-company structure where more granular and lower-risk public finance exposures provide diversification across risk and time dimensions. Moody's further believes that guarantors splitting their business among distinct legal entities might have a greater incentive to allocate capital in favor of the public sector guarantor, given the somewhat greater importance attached to Aaa ratings by customers in that market. The effect of these structural changes would likely be to reduce the risk of downgrade for the guarantor's insured municipal debt and to increase the risk of downgrade for the insurer's other exposures. Rating Outlook: Negative The negative outlook on MBIA's ratings reflects remaining uncertainties as the company finalizes its capital plan and implements its strategy. Moody's believes that MBIA's plan to regain its footing is reasonable and that the company is committed to maintaining a strong credit profile, although some credit and execution risks remain in the near term, especially given the weakened state of the US economy. The rating agency added that the rating outlook could return to stable within the next six to twelve months, as visibility improves on the firm's likely losses from mortgage-related exposures, and as the details and effectiveness of MBIA's strategies become more apparent. A return of the rating outlook to stable would depend on strengthening capital to meet the target Aaa benchmark and successful execution of contemplated changes in risk strategy. List of Rating Actions These ratings have been confirmed: -- MBIA Insurance Corporation: insurance financial strength at Aaa, and surplus notes at Aa2; -- MBIA Insurance Corporation of Illinois: insurance financial strength at Aaa; -- Capital Markets Assurance Corporation: insurance financial strength at Aaa; -- MBIA UK Insurance Limited: insurance financial strength at Aaa; -- MBIA Assurance S.A.: insurance financial strength at Aaa; -- MBIA Mexico S.A. de C.V.: insurance financial strength at Aaa and Aaa.mx (national scale rating); -- MBIA Inc.: senior unsecured debt at Aa3, provisional senior debt a (P) Aa3, subordinated debt at (P) A1, and provisional preferred stock at (P) A2; -- North Castle Custodial Trusts I-VIII: contingent capital securities at Aa3. Overview of MBIA INC. MBIA Inc. is the parent of MBIA Insurance Corporation, which provides financial guarantees to issuers in the municipal and structured finance markets in the United States as well as internationally. MBIA also offers various complementary services such as investment management and municipal investment contracts. MBIA reported a net loss for 2007 of approximately $1.9 billion, and had shareholders' equity of about $3.6 billion as of Dec. 31, 2007. METRO ONE: To Restate Sept. 30 10-Q to Correct Accounting Errors ---------------------------------------------------------------- Metro One Telecommunications Inc. will be restating its financial statements for the third quarter ended Sept. 30, 2007, to correct errors in its accounting treatment of certain securities pursuant to a private securities purchase agreement dated June 5, 2007. The company issued on June 5, 2007, (i) 220 shares of its newly authorized Series A Convertible Preferred Stock, no par value, (ii) Stock Purchase Warrants to purchase an additional 77 shares of the Series A Convertible Preferred Stock, and (iii) Senior Secured Convertible Revolver Bridge Notes having a maximum principal balance of $7.8 million. Accordingly, the company cautions investors, potential investors and other readers not to rely on the company's previously issued 10-Q for the third quarter ended Sept. 30, 2007. About Metro One Based in Portland, Oregon, Metro One Telecommunications Inc. (Nasdaq: INFO) -- http://www.metro1.com/-- is a developer and provider of Enhanced Directory Assistance(R) and other information services. The company operates call centers located in the United States. Going Concern Doubt BDO Seidman LLP, in Seattle, expressed substantial doubt about Metro One Telecommunications Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring losses from operations and loss of significant customers. MOHAWK VALLEY: Files Ch. 11 to Complete Mortgage Loan Refinancing ----------------------------------------------------------------- Ralph Reid, Mohawk Valley Nursing Home Inc. CEO, told David Robinson of The Evening Telegram that the company's bankruptcy is due to its mortgage loans obtained in 2004 through 2006. Mr. Reid revealed that both Mohawk and sister company, Folts Homes of Herkimer, executed cost-reduction procedures during those years, Telegram says. However, the government's cut on Medicare and Medicaid budgets resulted in losses for the company, Telegram reports, citing Mr. Reid. Mr. Reid stated although Mohawk began to recoup financially last year, it needed to file for chapter 11 bankruptcy to complete a refinancing of its mortgage loan, Telegram relates. According to Mr. Reid, Mohawk's bankruptcy will have no effect on Folts Homes, its sister company and also owned by Folts Inc., asserting that the Debtor and Folts Homes are financially independent, Telegram says. In addition, the bankruptcy will not interrupt Mohawk's business -- clients will continue to enjoy the same services and workers will continue to get their pay, Telegram quotes Mohawk PR director, Patricia Walczak Frazier as saying. The public has been notified that Mohawk is ready to entertain their questions, Telegram adds. About Folts Homes Folts Homes is a senior retirement community, nestled in the historic village of Herkimer, New York. Folts Homes offers multiple levels of care that also includes private apartment living in Folts Apartments and residential community living in Folts' Claxton Manor, with 73 units available. The Folts Health Center is home to 163 residents who receive nursing services, occupational and physical therapy, and therapeutic recreation. Also offered are specialty services including adult day services, an Alzheimer's unit, respite care, short term stays, and a child day care program for employees and the community. About Mohawk Valley Ilion, New York-headquartered Mohawk Valley Nursing Home Inc. -- http://www.mvnh.com/-- is a 120 bed non-profit skilled nursing facility that specializes in rehabilitation. Founded in 1972, Mohawk provides short- and long-term health care services to area residents, including inpatient and outpatient rehabilitation, adult day care, aquatic therapy, bariatric services, child day care, respite care, social day care and therapeutic recreation. It is fully licensed by the New York State Department of Health and approved for Medicare and Medicaid recipients. Folts Homes and Mohawk Valley Nursing Home are owned by Folts Inc. Mohawk filed chapter 11 petition on Feb. 15, 2008 (Bankr. N.D.N.Y. Case No. 08-60303). Joseph Zagraniczny, Esq., and Charles J. Sullivan, Esq., at Bond, Schoeneck & King PLLC represent the Debtor in its restructuring efforts. It listed assets and debts between $1 million and $10 million. Its three largest unsecured creditors are Health Facility Assessment Fund, which is owed $489,519; NCS Healthcare of New Hartford owed $421,490; and St. Luke Hospital owed $204,347. MURRIETA COMMONS: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Murrieta Commons, L.L.C. 30448 Rancho Viejo Road, Suite 110 San Juan Capistrano, CA 92675 Bankruptcy Case No.: 08-10904 Chapter 11 Petition Date: February 26, 2008 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: William M. Burd, Esq. (wmburd@burd-naylor.com) Burd & Naylor 200 West Santa Ana Boulevard, Suite 400 Santa Ana, CA 92701 Tel: (714) 708-3900 http://www.burd-naylor.com/ Total Assets: $12,000,000 Total Debts: $8,500,000 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ S.P. Consulting Civil engineering $17,635 500 Saint Vincent fees Irvine, CA 92618 Gordon & Rees, L.L.P. Legal fees $4,365 Embarcadero Center West 275 Battery Street 20th Floor San Francisco, CA 94111 Joyce Bennett, C.P.A. Accounting fees $3,500 23854 Sycamore Mission Viejo, CA 92691 Western Municipal Water Monthly system $709 District charges, late penalty fees, shut- off/turn on fees, deposit, estimated interest charges Hart, King & Coldren Legal fees $395 Law Offices of Garfield Logan Legal Fees $24 National Construction Rentals Fencing (for 1 month) $91 NEILL HOMES: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Neill Homes, L.L.C. P.O. Box 17438 Hattiesburg, MS 39404 Tel: (601) 271-2225 Bankruptcy Case No.: 08-50281 Chapter 11 Petition Date: February 24, 2008 Court: Southern District of Mississippi (Gulfport Divisional Office) Judge: Edward Gaines Debtor's Counsel: Eric Everett Lindstrom, Esq. (eric.lindstrom@c-gate.net) Lindstrom Law Office, P.A. 531 Central Avenue, Suite D Laurel, MS 39440 Tel: (601) 428-0050 Fax: (305) 847-0660 Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. NUTRITION SOURCE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Nutrition Source, Inc. dba Advanced Nutrition 325 B Volvo Parkway Chesapeake, VA 23320 Bankruptcy Case No.: 08-70560 Chapter 11 Petition Date: February 22, 2008 Court: Eastern District of Virginia (Norfolk) Judge: Stephen C. St. John Debtor's Counsel: Kelly Megan Barnhart, Esq. Marcus Crowley & Liberatore, P.C. 1435 Crossways Boulevard, Suite 300 Chesapeake, VA 23320 Tel: (757) 226-0390 Fax: 757-333-3390 kbarnhart@mclfirm.com Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 million to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Farmers Bank Business Loan- $600,000 P.O. Box 285 Furniture, Equipment Windsor, VA 23487 and Inventory Harvey Lindsay $36,443 999 Waterside Drive Suite 1400 Norfolk, VA 23510 Klin Creek Center $20,971 Lockbox #4649 Yorktown, VA Great Neck Holding Co., LLC $20,066 Irwin Naturals $20,004 Now Foods $19,585 SL Nusbaum Realty Co. $19,473 Natural Organics $17,360 Boss Sports Science $17,321 New Chapter Inc. $13,902 Chesapeake Center Associates $12,574 ReNew Life Inc. $11,927 Nordic Naturals $10,043 Great Bridge Retail, LLC rent related to $9,217 commercial lease Bank of America Visa Credit Card $9,000 Purchases Arkopharma LLC $8,123 Pure Essence Labs $7,257 Bell Lifestyle Products, Inc. $7,250 Optimum Nutrition Inc. $6,679 Nature's Way Products Inc. $6,348 PACIFIC LUMBER: Court Wants Joint Disclosure Statement Filed ------------------------------------------------------------ For reasons stated at a hearing held on February 5, 2008, the Hon. Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas directed: 1. Pacific Lumber Company and its affiliates, 2. The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; 3. the Official Committee of Unsecured Creditors, and 4. Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility, to coordinate and cooperate with the drafting and submitting of a joint Disclosure Statement. The Court held that counsel for the Creditors Committee will be responsible for the drafting of the joint Disclosure Statement, which should be filed no later than February 28, 2008. U.S. Government Agencies Respond The United States, on behalf of the U.S. Fish and Wildlife Service, Department of the Interior, and the National Marine Fisheries Service, seeks clarifications and amendments to any approved Disclosure Statement or Joint Disclosure Statement, so that they will contain adequate information concerning the Plans' provisions relating to Debtors' compliance with the requirements of endangered wildlife statutes and regulations. The Fish and Wildlife Service and the National Marine Fisheries Service are jointly responsible for overseeing compliance with the Endangered Species Act, of 1973, as amended, Ronald J. Tenpas, acting assistant attorney general of the Environment & Natural Resources Division, U.S. Department of Justice, tells Judge Schmidt. According to Mr. Tenpas, the Debtors currently hold incidental take permits issued by the Fish and Wildlife Service, the National Marine Fisheries Service and the California Department of Fish and Game -- the Wildlife Agencies -- under Section 10(a)(1)(B) of the ESA. The permits cover the incidental take of ESA-protected species that may result from the Debtors' logging-related activities in California, Mr. Tenpas notes. The terms and conditions of the 50-year permits require the Debtors to implement a Habitat Conservation Plan and its associated Implementation Agreement in California, which include an array of mitigation measures to offset impacts to wildlife and fish species covered under the permits. The HCP is derived from the principles of a 1996 Headwaters Agreement, and represents an extraordinary public and private commitment to the preservation of endangered wildlife and fish in old growth redwood forests in California, Mr. Tenpas explains. Because some of the proposed Plans provide for the future transfer of portions of the Debtors' property that are covered by the permits and the underlying HCP and Implementation Agreement, an approved Disclosure Statement should clarify that Implementation Agreement require advance approvals by the Wildlife Agencies of each transfer of Covered Lands, Mr. Tenpas asserts. In order to obtain the approvals, the Wildlife Agencies will need to make a determination as to whether any land transfers and contemplated land management activities by third parties would compromise the effectiveness of the HCP. Whether the Wildlife Agencies will approve any land transfer or permit new activities proposed by the Plans cannot be determined at this time, Mr. Tenpas informs the Court. Moreover, some of the proposed Plans contemplate residential housing on Covered Lands, Mr. Tenpas says. He maintains that any approved Disclosure Statement should clarify that residential housing was not a covered activity whose effect on the incidental take of species covered by the ESA was analyzed as part of the HCP. Whether the Wildlife Agencies would approve particular land transfers for residential housing cannot be determined at this time, Mr. Tenpas states. Hence, the Wildlife Agencies believe that: * the Plans need to be clarified to provide that advance approval for any land transfers or new activities proposed under the Plans will be sought from the Wildlife Agencies; and * their decision will be subject to review, only in accordance with and in any forum provided for by applicable non- bankruptcy law. Mr. Tenpas also tells Judge Schmidt that the United States has not been provided a copy of the Joint Disclosure Statement. Hence, the U.S. Government reserves the right to supplement its response after its review of the Joint Disclosure Statement and asks for reasonable time to conduct the review. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. The Debtors' exclusive plan filing period expires on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 46, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: BofA & Caterpillar Balk at Disclosure Statement --------------------------------------------------------------- Bank of America National Trust and Savings Association hopes to reach an agreement with each of the Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; Mendocino Redwood Company, LLC, and Marathon Structured Finance Fund, L.P.; as well as Pacific Lumber Company and its debtor- affiliates, whereby BofA can support and vote in favor of each their plans of reorganization for the Debtors. BofA is a lender and agent for itself and other lender parties under a Credit Agreement with Scotia Pacific Company LLC, dated July 20, 1998. According to Evan M. Jones, Esq., at O'Melveny & Myers LLP, in Los Angeles, California, BofA should be entitled to vote as an impaired claimant under the Plans of the Indenture Trustee and the Marathon Plan Proponents, as the rights of the BofA Line of Credit claimants might be altered under both Plans. Mr. Jones tells the U.S. Bankruptcy Court for the Southern District of Texas that the Indenture Trustee Plan may result in a rearranging of the priority of payments provided for in the Indenture to the detriment of the BofA Line of Credit claimants. Moreover, he states, it is not clear whether or not the Indenture Trustee proposes to pay to BofA the full amount of interest owed on its claim at the default rate of interest as provided for in the Indenture. Mr. Jones adds that the Plan proposed by the Marathon Plan Proponents provides that it will pay to the claimants under the BofA Line of Credit only the non-default rate of interest as opposed to the default rate of interest provided for by the Indenture. BofA also objects to any pro rata treatment of the claims of the lenders under the BofA Line of Credit to the claims of the Noteholders. Mr. Jones notes that the Indenture Trustee Plan, as currently filed, provides that (i) the claimants under the BofA Line of Credit will receive funds from the SAR account to the extent of their Allowed Secured Claim; and (ii) to the extent the funds in deposit in the SAR account are insufficient to pay their Allowed Secured Claims, they will share pro rata in the distributions to the Noteholders for the deficiency. He argues that under the Indenture dated July 20, 1998, on any date that there exists an event of default, the payment of interest and principal owed to the lenders under the BofA Line of Credit has priority over the payment of interest and principal owed to the Noteholders. "Allowing the pro rata treatment proposed by the Indenture Trustee [Plan] would violate the rights of the lenders under the BofA Line of Credit under the Indenture and would be neither fair nor equitable," Mr. Jones asserts. BofA's priority is not limited to the funds in the SAR account but applies as to all distributions, Mr. Jones adds. Caterpillar Attacks BoNY Disclosure Statement Caterpillar Financial Services Corporation complains that the Disclosure Statement proposed by The Bank of New York, N.A., as Indenture Trustee for the Timber Notes, incorrectly characterizes and treats Caterpillar Financial's rights as those of a secured creditor holding a security interest in equipment, and proposes to sell Caterpillar Financial's equipment in an auction of the Debtors' assets. Caterpillar Financial is the owner of certain leased equipment. The firm holds eight contracts with the Debtors concerning eight units of equipment, according to John Mayer, Esq., at Ross, Banks, May, Cron & Cavin, P.C., in Houston, Texas, tells the Court. He clarifies that seven of the contracts are equipment leases, and only one contract refers to an installment sale contract and security agreement. Three of the equipment leases have expired, Mr. Mayer says. For two of the expired leases, he notes, the Debtors are simply continuing to rent the equipment from month to month, as holdover lessee. A plan of reorganization may provide that the unexpired Equipment Leases are either assumed or rejected, but may not modify the terms of the Equipment Leases without the consent of Caterpillar Financial, Mr. Mayer contends. "A plan may not provide that the units be sold without Caterpillar Financial's consent." Thus, Caterpillar Financial objects to the provisions of the BoNY Disclosure Statement to the extent that it calls for the firm's equipment to be sold. Caterpillar Financial further asks the Court to deny approval of the BoNY Disclosure Statement because it fails to: (a) comply with the provisions of Section 365 of the Bankruptcy Code; and (b) give adequate information as required by 1125(a) of the Bankruptcy Code. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. The Debtors' exclusive plan filing period expires on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 46, http://bankrupt.com/newsstand/or 215/945-7000). PACIFIC LUMBER: State Officials Want Public Trust Preserved ----------------------------------------------------------- In separate letters addressed to the U.S. Bankruptcy Court for the Southern District of Texas and the proponents of four Plans of Reorganizations filed in Pacific Lumber Company's Chapter 11 cases, United States Senator Dianne Feinstein and United States Congressman Mike Thompson conveyed their individual statements of position on the Plans. As reported in the Troubled Company Reporter on Feb. 4, Arnold Schwarzenegger, governor for the state of California, expressed his interest for the welfare of the Debtors' assets located in Humboldt County, California. Gov. Schwarzenegger also affirmed his commitment in ensuring that public trust is secured. Senator Feinstein's Statement Sen. Dianne Feinstein was the primary public official involved in the 1996 Headwaters Agreement and the 1999 Habitat Conservation Plan. She believes that any reorganization of the Debtors should adhere to the HCP and the guiding principles of the Headwaters Agreement. "The mismanagement of Pacific Lumber should not be allowed to undermine these far-reaching agreements that were carefully negotiated and fully accepted by all the parties," Sen. Feinstein said. According to the Senator, the Headwaters Agreement and the HCP represent a serious commitment from both the United States and the state of California. "We exhaustively negotiated an agreement that would protect the public's irreplaceable resources in the old growth redwoods, while recognizing the legitimate claims of the private owners of the land." Sen. Feinstein disclosed that the State and Federal governments paid over $380,000,000 to complete the Agreement, as full compensation to Pacific Lumber Company, for "sealing the public trust interests in the land by protecting the ancient redwoods." The public trust resources, according to Sen. Feinstein, include not only 7,500 acres brought into public ownership, but also 200,000 acres of redwood timberland sheltering dozens of threatened and endangered species in an important watershed for salmon and other varieties of fish. Sen. Feinstein maintains that any Plan for the Debtors' reorganization must adhere to these principles: (1) The Plan must uphold the HCP and its related agreements, including an Assembly Bill (AB) 1986, an agreement relating to the enforcement of AB 1986, and the conditions, covenants and restrictions recorded in accordance with the HCP and AB 1986; (2) Timber operations can proceed while sustaining environmental protections; (3) The economic viability of the region must be maintained by sustaining high quality timber production, which should be the long-standing pillar of the local economy; and (4) The Plan must comply with all regulations consistent with Federal, State and local laws. "The people of the United States and all California residents have a strong interest in a successful reorganization of Pacific Lumber that abides by these important principles," Sen. Feinstein asserts. Congressman Thompson's Statement U.S. Congressman Mike Thompson said that the timberlands and other assets held by the Pacific Lumber Company and Scotia Pacific Company LLC represent a unique public trust for the citizens of California and the United States. Cong. Thompson has represented Humboldt County as a California state senator and a member of the U.S. House of Representatives. According to Cong. Thompson, the historic Headwaters Agreement set aside important wildlife habitat vital for the protection of endangered species, and provided a framework for PALCO to continue harvesting their timberlands at sustainable levels as outlined in the HCP. Given the significant investment of public funds and the agreement struck by all the parties involved to protect "this significant resource and its watershed", Cong. Thompson believes it is critical that any reorganization of the Debtors adheres to five principles: (a) The maintenance of the timberlands in a single ownership as working commercial forestlands; (b) The maintenance of the mill operation in order to protect jobs and livelihoods of the people of the community of Scotia and Humboldt County; (c) The fulfillment of all commitments associated with the HCP that accompanied the Headwaters Agreement; (d) The timberlands and mill are owned and operated by entities with a proven track record utilizing sustainable management of California's redwood forests, and with full knowledge and experience in the operation of a mill; and (e) Limitations or restrictions on the reliance on expenditure of additional public funds for any Plan that is finally adapted. About Pacific Lumber Based in Oakland, California, The Pacific Lumber Company -- http://www.palco.com/-- and its subsidiaries operate in several principal areas of the forest products industry, including the growing and harvesting of redwood and Douglas-fir timber, the milling of logs into lumber and the manufacture of lumber into a variety of finished products. Scotia Pacific Company LLC, Scotia Development LLC, Britt Lumber Co., Inc., Salmon Creek LLC and Scotia Inn Inc. are wholly owned subsidiaries of Pacific Lumber. Scotia Pacific, Pacific Lumber's largest operating subsidiary, was established in 1993, in conjunction with a securitization transaction pursuant to which the vast majority of Pacific Lumber's timberlands were transferred to Scotia Pacific, and Scotia Pacific issued Timber Collateralized Notes secured by substantially all of Scotia Pacific's assets, including the timberlands. Pacific Lumber, Scotia Pacific, and four other subsidiaries filed for chapter 11 protection on Jan. 18, 2007 (Bankr. S.D. Tex. Case Nos. 07-20027 through 07-20032). Jack L. Kinzie, Esq., at Baker Botts LLP, is Pacific Lumber's lead counsel. Nathaniel Peter Holzer, Esq., Harlin C. Womble, Jr., Esq., and Shelby A. Jordan, Esq., at Jordan Hyden Womble Culbreth & Holzer PC, is Pacific Lumber's co-counsel. Kathryn A. Coleman, Esq., and Eric J. Fromme, Esq., at Gibson, Dunn & Crutcher LLP, acts as Scotia Pacific's lead counsel. John F. Higgins, Esq., and James Matthew Vaughn, Esq., at Porter & Hedges LLP, is Scotia Pacific's co- counsel. John D. Fiero, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. When Pacific Lumber filed for protection from its creditors, it listed estimated assets and debts of more than $100 million. Scotia Pacific listed total assets of $932,000,000 and total debts of $765,978,335. The Debtors filed their Joint Plan of Reorganization on Sept. 30, 2007, which was amended on Dec. 20, 2007. Four other parties-in- interest have filed competing plans for the Debtors -- The Bank of New York Trust Company, N.A., as Indenture Trustee for the Timber Notes; the Official Committee of Unsecured Creditors; Marathon Structured Finance Fund L.P, the Debtors' DIP Lender and Agent under the DIP Credit Facility; and the Heartlands Commission, which represents the tribal members of the Bear River Band of Rohnerville Rancheria and PALCO employees. The Debtors' exclusive plan filing period expires on Feb. 29, 2008. (Scotia/Pacific Lumber Bankruptcy News, Issue No. 46, http://bankrupt.com/newsstand/or 215/945-7000). RADNET INC: Adds $65 Mil. to Credit Facility for Expansion of Biz ----------------------------------------------------------------- GE Healthcare Financial Services arranged for RadNet Inc.: -- an increase to Radnet's existing credit facilities, including $35 million which was drawn-down at close; and -- the ability to further increase the facilities by an incremental $65 million. The additions to RadNet's existing credit facilities are intended to provide capital for near-term opportunities and future expansion. "We are very pleased to have completed this financing transaction in one of the most challenging credit markets in recent history," Howard Berger, M.D., RadNet's chief executive officer, stated. "I believe that the completion of this financing evidences confidence by our credit investors in our future ability to continue to grow our business in a disciplined and effective manner." "While we retain floating-rate interest exposure and future rate movements are unknown, the steady drop in interest rates over the last year in the financial markets has benefited us in that it has permitted our overall blended interest cost upon the closing of this financing to remain similar to the rates initially paid by us in November 2006," Dr. Berger added. "The incremental facility will provide us liquidity to capitalize on near-term opportunities that lie ahead," Dr. Berger continued. "We currently see more opportunities in our industry for consolidation and growth than ever before. The incremental facility provides us the financial flexibility and capital availability to accomplish growth and expansion consistent with our strategic goals." About RadNet Inc. Headquartered in Los Angeles, California, RadNet Inc. (NASDAQ:RDNT) -- http://www.radnet.com/-- fka Primedex Health Systems Inc. provides diagnostic imaging services in the state of California. Imaging services include magnetic resonance imaging, computed tomography, positron emission tomography, nuclear medicine, mammography, ultrasound, diagnostic radiology, and fluoroscopy. Its operations comprise a single segment. The company has a network of 143 fully-owned and operated outpatient imaging centers. RadNet's core markets include California, Maryland, New York and Florida. Together with affiliated radiologists, and inclusive of full-time and per diem employees and technicians, RadNet has a total of approximately 4,000 employees. As reported in the Troubled Company Reporter on Jan. 28, 2008, RadNet Inc.'s consolidated balance sheet at Sept. 30, 2007, showed $433.9 million in total assets, $487 million in total liabilities, and $997,000 in minority interest, resulting in a $54.1 million total stockholders' deficit. * * * Standard & Poor's placed Radnet Inc.'s long term foreign and local issuer credit rating at 'B' in November 2005. The ratings still hold to date with a stable outlook. RADNET MANAGEMENT: S&P Junks Issue-level Rating on $35 Mil. Add-on ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'CCC+' issue-level rating on RadNet Management Inc.'s senior secured second-lien term loan following the company's $35 million add-on. RadNet has increased its outstanding $195 million second-lien term loan to $230 million. The recovery rating on this debt remains unchanged at '6', indicating the expectation for negligible (0%-10%) recovery in the event of a payment default. The issue-level rating on the company's $305 million first-lien facilities, consisting of a $250 million term loan ($248 million outstanding) and a $55 million revolving credit facility, remains unchanged at 'B+' (one notch higher than the corporate credit rating), with a recovery rating of '2', indicating the expectation for substantial (70%-90%) recovery in the event of a payment default. RadNet Management and Beverly Radiology Medical Group are coborrowers of the facilities, which are guaranteed by holding company RadNet Inc. and all of its material direct and indirect subsidiaries. The loans are secured by all assets of the borrowers and guarantors. Ratings List RadNet Management Inc. Corporate Credit Rating B/Positive/-- Ratings Affirmed Secured Second lien CCC+ Recovery Rating 6 RADNOR HOLDINGS: Files Amended Chapter 11 Liquidation Plan ---------------------------------------------------------- Radnor Holdings Corporation and its debtor-affiliates delivered a First Amended Joint Chapter 11 Plan of Liquidation to the United States Bankruptcy Court for the District of Delaware on Feb. 21, 2008. As previously reported in the Troubled Company Reporter, the Debtors filed with Court a Joint Disclosure Statement explaining their Chapter 11 Plan of Liquidation in April 2007. Overview of the Plan The Plan contemplates the liquidation of the Debtors' assets and the resolution of the outstanding claims against and interest in the Debtors. The Plan provides for the distribution of certain proceeds from any sale and the creation of a liquidating trust that will administer and liquidate all remaining property of the Debtor. Treatment of Claims Under the plan, these claims will be paid in full in cash, including: -- Administrative claims; -- Priority Tax Claims; -- Assumed Liabilities Claims; -- Other Secured Claims; and -- Non-Tax Priority Claims. On the distribution date, holders of secured lender claims, totaling approximately $28 million, will also receive in full from the liquidating trustee. The holders and their agent have the right to prove that claims exceed $28 million. Payment of these claims will be secured by all of the assets and property of the estate. Each holders of Midland claims will be entitled to the rights provided in the Midland Loan documents. However, certain of the covenants and other terms of that documents will be modified, as of the effective date of the Plan. Holders of General Unsecured claims will receive in full a pro rata share of the initial distribution amount, after secured lender's claims are paid in full. On the effective date of the plan, these claims will be canceled and each holders of these claim will not receive any property: -- Intercompany claims; -- Subordinated 510(c) claims; -- Subordinated 510(b) claims; and -- Old Equity Interests. A full-text copy of Radnor's First Amended Joint Chapter 11 Plan of Liquidation is available for free at: http://ResearchArchives.com/t/s?286f Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Lead Case No. 06-10894). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., Sarah E. Pierce, Esq., Timothy R. Pohl, Esq., Patrick J. Nash, Jr., Esq., and Rena M. Samole, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. The U.S. Trustee recently disbanded the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RADNOR HOLDINGS: Plan Solicitation Period Extended to April 21 -------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware extended Radnor Holdings Corp. and its debtor-affiliates' exclusive period wherein they can solicit acceptances of their plan of reorganization until April 21, 2008. As reported in the Troubled Company Reporter on Jan. 18, 2008, the Debtors told the Court that they deserve the extension since they already succeeded in solving major disputes in their case, such as their fee dispute with the Official Committee of Unsecured Creditors. The resolution of that dispute led to the filing of their Chapter 11 plan last April 2007. The Debtors filed an amended plan on Feb. 21. The Debtors further said that they need more time to modify the plan with their new owners, and that ending the plan-solicitation period might invite more costly and time-consuming litigation, the AP reported, citing the Debtors' court filings. About Radnor Holdings Based in Radnor, Pennsylvania, Radnor Holdings Corporation -- http://www.radnorholdings.com/-- manufactured and distributed a broad line of disposable food service products in the United States, and specialty chemicals worldwide. The Debtor and its affiliates filed for chapter 11 protection on Aug. 21, 2006 (Bankr. D. Del. Lead Case No. 06-10894). Gregg M. Galardi, Esq., Mark L. Desgrosseilliers, Esq., Sarah E. Pierce, Esq., Timothy R. Pohl, Esq., Patrick J. Nash, Jr., Esq., and Rena M. Samole, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represent the Debtors. The U.S. Trustee recently disbanded the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed total assets of $361,454,000 and total debts of $325,300,000. RALI SERIES: High Delinquencies Prompts S&P's Rating Cuts to 'CCC' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the class B-2 mortgage asset-backed pass-through certificates from RALI Series Trust's series 2002-QS9 and 2004-QS12. At the same time, S&P raised its rating on the class M-3 mortgage asset-backed pass-through certificates from RALI Series 2002-QS10 Trust. Furthermore, S&P affirmed its ratings on the remaining 451 classes from these and other RALI Series Trust transactions. The lowered ratings reflect the high delinquencies relative to the available credit support in the deals. Current credit support for the B-2 classes from series 2002-QS9 and 2004-QS12 is 0.82% and 0.35%, of the current pool balances, and future credit support is projected to be significantly lower than the original credit support for both classes. As of the January 2008 remittance period, cumulative losses were 0.33% of the original pool balance for series 2002-QS9, and 0.16% for series 2004-QS12. Total delinquencies were 8.28% of the current pool balance for series 2002-QS9, and 3.84% for series 2004-QS12. Severe delinquencies (90-plus days, foreclosures, and REOs) were 2.66% for series 2002-QS9, and 1.53% for series 2004- QS12. Series 2002-QS9 is 66 months seasoned and has an outstanding pool factor of approximately 8.00%, while series 2004- QS12 is 40 months seasoned and has an outstanding pool factor of approximately 47%. The raised rating on the class M-3 certificates from series 2002-QS10 reflects the strong performance of the mortgage loan pool, along with actual and projected credit support percentages that adequately support the upgrade. The projected credit support percentage for the upgraded class has increased to more than 2.4x for the raised rating. The higher credit support percentages are due to the significant principal prepayments and the shifting interest structure of the transaction. Cumulative losses for this transaction were 0.15% of the original principal balance, total delinquencies were 4.23% of the current principal balance, and severe delinquencies were 4.23% as of the January 2008 remittance period. RALI Series 2002-QS10 Trust is 65 months seasoned and has an outstanding pool factor of approximately 5.00%. The affirmations reflect current and projected credit support percentages that are sufficient to support the certificates at the current rating levels. Subordination primarily provides credit support for these transactions. The underlying collateral for these transactions consists primarily of Alt-A, fixed-rate, fully amortizing, conventional mortgage loans secured by first liens on one- to four-family residential properties, with original terms to maturity of no more than 30 years. Ratings Lowered RALI Series Rating ------ Series Class To From ------ ----- -- ---- 2002-QS9 B-2 CCC B 2004-QS12 B-2 CCC B Rating Raised RALI Series Rating ------ Series Class To From ------ ----- -- ---- 2002-QS10 M-3 AAA AA+ RATINGS AFFIRMED RALI Series Series Class Rating ------ ----- ------ 1999-QS4 A-1 AAA 1999-QS4 A-V AAA 2001-QS16 A-2 AAA 2001-QS16 A-P AAA 2001-QS16 A-V AAA 2001-QS17 A-11 AAA 2001-QS17 A-P AAA 2001-QS17 A-V AAA 2002-QS10 A-4 AAA 2002-QS10 A-5 AAA 2002-QS10 A-P AAA 2002-QS10 A-V AAA 2002-QS10 M-1 AAA 2002-QS10 M-2 AAA 2002-QS12 A-4 AAA 2002-QS12 A-6 AAA 2002-QS12 A-8 AAA 2002-QS12 A-9 AAA 2002-QS12 A-P AAA 2002-QS12 A-V AAA 2002-QS12 M-1 AAA 2002-QS12 M-2 AA+ 2002-QS12 M-3 A 2002-QS14 A-10 AAA 2002-QS14 A-11 AAA 2002-QS14 A-12 AAA 2002-QS14 A-P AAA 2002-QS14 A-V AAA 2002-QS14 M-1 AAA 2002-QS14 M-2 AA+ 2002-QS14 M-3 A+ 2002-QS15 A-P AAA 2002-QS15 A-V AAA 2002-QS15 CB AAA 2002-QS15 M-1 AAA 2002-QS15 NB-1 AAA 2002-QS15 NB-2 AAA 2002-QS15 NB-3 AAA 2002-QS15 M-2 AA+ 2002-QS15 M-3 A 2002-QS17 A-P AAA 2002-QS17 A-V AAA 2002-QS17 CB-1 AAA 2002-QS17 CB-2 AAA 2002-QS17 M-1 AAA 2002-QS17 NB-1 AAA 2002-QS17 NB-2 AAA 2002-QS17 M-2 AA 2002-QS17 M-3 A- 2002-QS17 B-1 BB+ 2002-QS17 B-2 B 2002-QS19 A-1 AAA 2002-QS19 A-2 AAA 2002-QS19 A-3 AAA 2002-QS19 A-4 AAA 2002-QS19 A-5 AAA 2002-QS19 A-6 AAA 2002-QS19 A-7 AAA 2002-QS19 A-8 AAA 2002-QS19 A-P AAA 2002-QS19 A-V AAA 2002-QS19 M-1 AAA 2002-QS19 M-2 AA 2002-QS19 M-3 A- 2002-QS3 A-12 AAA 2002-QS3 A-4 AAA 2002-QS3 A-5 AAA 2002-QS3 A-P AAA 2002-QS3 A-V AAA 2002-QS3 M-1 AAA 2002-QS3 M-2 AAA 2002-QS3 M-3 AA 2002-QS4 A-1 AAA 2002-QS4 A-4 AAA 2002-QS4 A-P AAA 2002-QS4 A-V AAA 2002-QS6 A-11 AAA 2002-QS6 A-3 AAA 2002-QS6 A-4 AAA 2002-QS6 A-5 AAA 2002-QS6 A-7 AAA 2002-QS6 A-9 AAA 2002-QS6 A-P AAA 2002-QS6 A-V AAA 2002-QS7 A-16 AAA 2002-QS7 A-7 AAA 2002-QS7 A-8 AAA 2002-QS7 A-P AAA 2002-QS7 A-V AAA 2002-QS7 M-1 AAA 2002-QS7 M-2 AAA 2002-QS7 M-3 AA+ 2002-QS7 B-1 A+ 2002-QS7 B-2 B+ 2002-QS8 A-5 AAA 2002-QS8 A-P AAA 2002-QS8 A-V AAA 2002-QS9 A-1 AAA 2002-QS9 A-10 AAA 2002-QS9 A-2 AAA 2002-QS9 A-P AAA 2002-QS9 A-V AAA 2002-QS9 M-1 AAA 2002-QS9 M-2 AAA 2002-QS9 M-3 AA 2002-QS9 B-1 A- 2003-QA1 A-1 AAA 2003-QA1 A-II AAA 2003-QA1 M-1 AA 2003-QA1 M-2 A 2003-QR13 A-1 AAA 2003-QR13 A-2 AAA 2003-QR13 A-3 AAA 2003-QR13 A-4 AAA 2003-QR13 A-5 AAA 2003-QR19 CB-1 AAA 2003-QR19 CB-2 AAA 2003-QR19 CB-3 AAA 2003-QR19 CB-4 AAA 2003-QR24 A-1 AAA 2003-QR24 A-2 AAA 2003-QR24 A-3 AAA 2003-QR24 A-4 AAA 2003-QR24 A-5 AAA 2003-QR24 A-6 AAA 2003-QR24 A-7 AAA 2003-QS1 A-1 AAA 2003-QS1 A-10 AAA 2003-QS1 A-13 AAA 2003-QS1 A-14 AAA 2003-QS1 A-2 AAA 2003-QS1 A-3 AAA 2003-QS1 A-4 AAA 2003-QS1 A-5 AAA 2003-QS1 A-6 AAA 2003-QS1 A-8 AAA 2003-QS1 A-9 AAA 2003-QS1 A-P AAA 2003-QS1 A-V AAA 2003-QS1 M-1 AA+ 2003-QS1 M-2 AA- 2003-QS1 M-3 BBB+ 2003-QS1 B-1 BB 2003-QS1 B-2 B 2003-QS10 A-1 AAA 2003-QS10 A-10 AAA 2003-QS10 A-11 AAA 2003-QS10 A-12 AAA 2003-QS10 A-13 AAA 2003-QS10 A-14 AAA 2003-QS10 A-15 AAA 2003-QS10 A-16 AAA 2003-QS10 A-2 AAA 2003-QS10 A-3 AAA 2003-QS10 A-4 AAA 2003-QS10 A-5 AAA 2003-QS10 A-7 AAA 2003-QS10 A-8 AAA 2003-QS10 A-9 AAA 2003-QS10 A-P AAA 2003-QS10 A-V AAA 2003-QS10 M-1 AA 2003-QS10 M-2 A 2003-QS10 M-3 BBB 2003-QS10 B-1 BB 2003-QS10 B-2 B 2003-QS11 A-1 AAA 2003-QS11 A-10 AAA 2003-QS11 A-11 AAA 2003-QS11 A-12 AAA 2003-QS11 A-13 AAA 2003-QS11 A-14 AAA 2003-QS11 A-2 AAA 2003-QS11 A-4 AAA 2003-QS11 A-5 AAA 2003-QS11 A-6 AAA 2003-QS11 A-8 AAA 2003-QS11 A-9 AAA 2003-QS11 A-P AAA 2003-QS11 A-V AAA 2003-QS11 M-1 AA 2003-QS11 M-2 A+ 2003-QS11 M-3 BBB 2003-QS11 B-1 BB 2003-QS11 B-2 B 2003-QS13 A-1 AAA 2003-QS13 A-10 AAA 2003-QS13 A-2 AAA 2003-QS13 A-3 AAA 2003-QS13 A-5 AAA 2003-QS13 A-6 AAA 2003-QS13 A-7 AAA 2003-QS13 A-8 AAA 2003-QS13 A-9 AAA 2003-QS13 A-P AAA 2003-QS13 A-V AAA 2003-QS13 M-1 AA 2003-QS13 M-2 A 2003-QS13 M-3 BBB 2003-QS13 B-1 BB 2003-QS13 B-2 B 2003-QS19 A-I AAA 2003-QS19 A-P AAA 2003-QS19 A-V AAA 2003-QS19 CB AAA 2003-QS19 NB-1 AAA 2003-QS19 NB-2 AAA 2003-QS19 NB-3 AAA 2003-QS19 NB-4 AAA 2003-QS19 NB-5 AAA 2003-QS19 NB-6 AAA 2003-QS19 NB-7 AAA 2003-QS19 M-1 AA 2003-QS19 M-2 A 2003-QS19 M-3 BBB 2003-QS19 B-1 BB 2003-QS19 B-2 B 2003-QS2 A-2 AAA 2003-QS2 A-3 AAA 2003-QS2 A-4 AAA 2003-QS2 A-5 AAA 2003-QS2 A-7 AAA 2003-QS2 A-P AAA 2003-QS2 A-V AAA 2003-QS2 M-1 AA 2003-QS2 M-2 A 2003-QS2 M-3 BBB 2003-QS2 B-1 BB 2003-QS2 B-2 B 2003-QS21 A-2 AAA 2003-QS21 A-3 AAA 2003-QS21 A-5 AAA 2003-QS21 A-6 AAA 2003-QS21 A-P AAA 2003-QS21 A-V AAA 2003-QS21 M-1 AA 2003-QS21 M-2 A 2003-QS21 M-3 BBB 2003-QS21 B-1 BB 2003-QS21 B-2 B 2003-QS22 A-1 AAA 2003-QS22 A-11 AAA 2003-QS22 A-12 AAA 2003-QS22 A-13 AAA 2003-QS22 A-14 AAA 2003-QS22 A-2 AAA 2003-QS22 A-3 AAA 2003-QS22 A-4 AAA 2003-QS22 A-5 AAA 2003-QS22 A-6 AAA 2003-QS22 A-7 AAA 2003-QS22 A-P AAA 2003-QS22 A-V AAA 2003-QS22 M-1 AA 2003-QS22 M-2 A 2003-QS22 M-3 BBB 2003-QS22 B-1 BB 2003-QS22 B-2 B 2003-QS3 A-1 AAA 2003-QS3 A-2 AAA 2003-QS3 A-3 AAA 2003-QS3 A-4 AAA 2003-QS3 A-5 AAA 2003-QS3 A-7 AAA 2003-QS3 A-8 AAA 2003-QS3 A-P AAA 2003-QS3 A-V AAA 2003-QS5 A-1 AAA 2003-QS5 A-2 AAA 2003-QS5 A-3 AAA 2003-QS5 A-4 AAA 2003-QS5 A-5 AAA 2003-QS5 A-6 AAA 2003-QS5 A-P AAA 2003-QS5 A-V AAA 2003-QS6 A-1 AAA 2003-QS6 A-13 AAA 2003-QS6 A-14 AAA 2003-QS6 A-15 AAA 2003-QS6 A-4 AAA 2003-QS6 A-7 AAA 2003-QS6 A-8 AAA 2003-QS6 A-P AAA 2003-QS6 A-V AAA 2003-QS6 M-1 AA+ 2003-QS6 M-2 A+ 2003-QS6 M-3 BBB+ 2003-QS6 B-1 BB 2003-QS6 B-2 B 2003-QS7 A-1 AAA 2003-QS7 A-2 AAA 2003-QS7 A-3 AAA 2003-QS7 A-4 AAA 2003-QS7 A-5 AAA 2003-QS7 A-P AAA 2003-QS7 A-V AAA 2003-QS7 M-1 AA 2003-QS7 M-2 A 2003-QS7 M-3 BBB 2003-QS7 B-1 BB 2003-QS7 B-2 B 2004-QA2 A-I AAA 2004-QA2 A-II AAA 2004-QA2 M-1 AA 2004-QA2 M-2 A 2004-QA2 M-3 BBB 2004-QA3 CB-I AAA 2004-QA3 CB-II AAA 2004-QA3 NB-I-1 AAA 2004-QA3 NB-I-2 AAA 2004-QA3 NB-II-1 AAA 2004-QA3 NB-II-2 AAA 2004-QA3 M-1 AA 2004-QA3 M-2 A 2004-QA3 M-3 BBB 2004-QA3 B-1 BB 2004-QA3 B-2 B 2004-QA4 CB-I AAA 2004-QA4 NB-I-1 AAA 2004-QA4 NB-II-1 AAA 2004-QA4 NB-II-2 AAA 2004-QA4 NB-II-3 AAA 2004-QA4 NB-III AAA 2004-QA4 M-1 AA 2004-QA4 M-2 A 2004-QA4 M-3 BBB 2004-QA4 B-1 BB 2004-QA4 B-2 BB 2004-QA4 B-3 B 2004-QA5 A-I AAA 2004-QA5 A-II AAA 2004-QA5 A-III-1 AAA 2004-QA5 A-III-2 AAA 2004-QA5 A-III-3 AAA 2004-QA5 A-III-IO-1 AAA 2004-QA5 A-III-IO-2 AAA 2004-QA5 M-1 AA 2004-QA5 M-2 A 2004-QA5 M-3 BBB 2004-QA5 B-1 BB 2004-QA5 B-2 B 2004-QA6 CB-I AAA 2004-QA6 CB-II AAA 2004-QA6 NB-I AAA 2004-QA6 NB-II AAA 2004-QA6 NB-III-1 AAA 2004-QA6 NB-III-2 AAA 2004-QA6 NB-III-3 AAA 2004-QA6 NB-IV AAA 2004-QA6 M-1 AA 2004-QA6 M-2 A 2004-QA6 M-3 BBB 2004-QA6 B-1 BB 2004-QA6 B-2 B 2004-QS1 A-1 AAA 2004-QS1 A-2 AAA 2004-QS1 A-3 AAA 2004-QS1 A-4 AAA 2004-QS1 A-5 AAA 2004-QS1 A-6 AAA 2004-QS1 A-P AAA 2004-QS1 A-V AAA 2004-QS1 M-1 AA 2004-QS1 M-2 A 2004-QS1 M-3 BBB 2004-QS1 B-1 BB 2004-QS1 B-2 B 2004-QS11 A-1 AAA 2004-QS11 A-2 AAA 2004-QS11 A-3 AAA 2004-QS11 A-4 AAA 2004-QS11 A-5 AAA 2004-QS11 A-6 AAA 2004-QS11 A-7 AAA 2004-QS11 A-P AAA 2004-QS11 A-V AAA 2004-QS11 M-1 AA 2004-QS11 M-2 A 2004-QS11 M-3 BBB 2004-QS11 B-1 BB 2004-QS11 B-2 B 2004-QS12 A-1 AAA 2004-QS12 A-2 AAA 2004-QS12 A-3 AAA 2004-QS12 A-4 AAA 2004-QS12 A-5 AAA 2004-QS12 A-6 AAA 2004-QS12 A-P AAA 2004-QS12 A-V AAA 2004-QS12 M-1 AA 2004-QS12 M-2 A 2004-QS12 M-3 BBB 2004-QS12 B-1 BB 2004-QS14 A-1 AAA 2004-QS14 A-P AAA 2004-QS14 A-V AAA 2004-QS14 M-1 AA 2004-QS14 M-2 A 2004-QS14 M-3 BBB 2004-QS14 B-1 BB 2004-QS14 B-2 B 2004-QS4 A-1 AAA 2004-QS4 A-2 AAA 2004-QS4 A-3 AAA 2004-QS4 A-4 AAA 2004-QS4 A-5 AAA 2004-QS4 A-6 AAA 2004-QS4 A-7 AAA 2004-QS4 A-P AAA 2004-QS4 A-V AAA 2004-QS4 M-1 AA 2004-QS4 M-2 A 2004-QS4 M-3 BBB 2004-QS4 B-1 BB 2004-QS4 B-2 B 2004-QS7 A-1 AAA 2004-QS7 A-2 AAA 2004-QS7 A-3 AAA 2004-QS7 A-4 AAA 2004-QS7 A-5 AAA 2004-QS7 A-P AAA 2004-QS7 A-V AAA 2004-QS7 M-1 AA 2004-QS7 M-2 A 2004-QS7 M-3 BBB 2004-QS7 B-1 BB 2004-QS7 B-2 B 2004-QS8 A-1 AAA 2004-QS8 A-10 AAA 2004-QS8 A-11 AAA 2004-QS8 A-12 AAA 2004-QS8 A-2 AAA 2004-QS8 A-3 AAA 2004-QS8 A-4 AAA 2004-QS8 A-5 AAA 2004-QS8 A-6 AAA 2004-QS8 A-7 AAA 2004-QS8 A-9 AAA 2004-QS8 A-P AAA 2004-QS8 A-V AAA 2004-QS8 M-1 AA 2004-QS8 M-2 A 2004-QS8 M-3 BBB 2004-QS8 B-1 BB 2004-QS8 B-2 B RAMP 2005: Moody's Reviews Ratings on 58 Tranches for Likely Cuts ----------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade the rating of fifty-eight tranches issued in seven transactions under the RAMP 2005-RS shelf. The collateral backing each tranche consists primarily of first lien adjustable-rate and fixed-rate mortgage loans acquired by Residential Funding Corporation under the Negotiated Conduit Asset Program. The NCA Program was established for the acquisition of loans that do not comply with some of the criteria of RFC's standard programs. The deals being reviewed have seen the amount of projected available credit enhancement reduced from a significant build-up of delinquent loans. Complete rating actions are: Issuer: RAMP Series 2005-RS2 Trust -- -- Cl. M-4; Currently A1 on review for possible downgrade -- -- Cl. M-5; Currently A2 on review for possible downgrade -- -- Cl. M-6; Currently A3 on review for possible downgrade -- -- Cl. M-7, Currently Baa1 on review for possible downgrade -- -- Cl. M-8, Currently Baa2 on review for possible downgrade Issuer: RAMP Series 2005-RS3 Trust -- -- Cl. M-3; Currently Aa3 on review for possible downgrade -- -- Cl. M-4; Currently A1 on review for possible downgrade -- -- Cl. M-5; Currently A2 on review for possible downgrade -- -- Cl. M-6; Currently A3 on review for possible downgrade -- -- Cl. M-7; Currently Baa1 on review for possible downgrade -- -- Cl. M-8; Currently Baa2 on review for possible downgrade -- -- Cl. M-9, Currently Baa3 on review for possible downgrade -- -- Cl. B-1, Currently Ba1 on review for possible downgrade -- -- Cl. B-2, Currently Ba2 on review for possible downgrade -- -- Cl. B-3, Currently B2 on review for possible downgrade Issuer: RAMP Series 2005-RS4 Trust -- -- Cl. M-3; Currently Aa3 on review for possible downgrade -- -- Cl. M-4; Currently A1 on review for possible downgrade -- -- Cl. M-5; Currently A2 on review for possible downgrade -- -- Cl. M-6; Currently A3 on review for possible downgrade -- -- Cl. M-7; Currently Baa1 on review for possible downgrade -- -- Cl. M-8; Currently Baa2 on review for possible downgrade -- -- Cl. M-9, Currently Baa3 on review for possible downgrade -- -- Cl. B-1, Currently Ba1 on review for possible downgrade -- -- Cl. B-2, Currently Ba2 on review for possible downgrade Issuer: RAMP Series 2005-RS5 Trust -- -- Cl. M-3; Currently Aa3 on review for possible downgrade -- -- Cl. M-4; Currently A1 on review for possible downgrade -- -- Cl. M-5; Currently A2 on review for possible downgrade -- -- Cl. M-6; Currently A3 on review for possible downgrade -- -- Cl. M-7; Currently Baa1 on review for possible downgrade -- -- Cl. M-8; Currently Baa2 on review for possible downgrade -- -- Cl. M-9, Currently Baa3 on review for possible downgrade -- -- Cl. B-1, Currently Ba1 on review for possible downgrade -- -- Cl. B-2, Currently Ba2 on review for possible downgrade Issuer: RAMP Series 2005-RS6 Trust -- -- Cl. M-4; Currently A1 on review for possible downgrade -- -- Cl. M-5; Currently A2 on review for possible downgrade -- -- Cl. M-6; Currently A3 on review for possible downgrade -- -- Cl. M-7; Currently Baa1 on review for possible downgrade -- -- Cl. M-8; Currently Baa2 on review for possible downgrade -- -- Cl. M-9, Currently Baa3 on review for possible downgrade -- Cl. M-10, Currently Ba1 on review for possible downgrade Issuer: RAMP Series 2005-RS7 Trust -- Cl. M-3; Currently Aa3 on review for possible downgrade -- Cl. M-4; Currently A1 on review for possible downgrade -- Cl. M-5; Currently A2 on review for possible downgrade -- Cl. M-6; Currently A3 on review for possible downgrade -- Cl. M-7; Currently Baa1 on review for possible downgrade -- Cl. M-8; Currently Baa2 on review for possible downgrade -- Cl. M-9, Currently Baa3 on review for possible downgrade -- Cl. B, Currently Ba1 on review for possible downgrade Issuer: RAMP Series 2005-RS8 Trust -- Cl. M-2; Currently Aa2 on review for possible downgrade -- Cl. M-3; Currently Aa3 on review for possible downgrade -- Cl. M-4; Currently A1 on review for possible downgrade -- Cl. M-5; Currently A2 on review for possible downgrade -- Cl. M-6; Currently A3 on review for possible downgrade -- Cl. M-7; Currently Baa1 on review for possible downgrade -- Cl. M-8; Currently Baa2 on review for possible downgrade -- Cl. M-9, Currently Baa3 on review for possible downgrade -- Cl. B-1, Currently Ba1 on review for possible downgrade -- Cl. B-2, Currently Ba2 on review for possible downgrade RONALD ROSENBLATT: Case Summary & 19 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Ronald E. Rosenblatt 2984 Club Drive Los Angeles, CA 90064 Bankruptcy Case No.: 08-12255 Chapter 11 Petition Date: February 22, 2008 Court: Central District Of California (Los Angeles) Judge: Ellen Carroll Debtor's Counsel: Juliet Y. Oh, Esq. Levene, Neale, Bender, Rankin & Brill L.L.P 10250 Constellation Boulevard Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 jyo@lnbrb.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Banco Popular Guarantee of loan $188,240 Buchalter, Nemer 1000 Wilshire Boulevard Suite 1500 Los Angeles, CA 90017-2457 Citibank Credit cards $87,863 Alliance One Account Nos. 5491- 1160 Centre Point Drive, 3750-1100-6773; Suite 1 4271-3824-8650- Saint Paul, MN 55120 2661-5121-0701- 4747-7182;5156- 9100-0100-5967 Key Equipment Finance Guarantee of lease $61,721 Ann L. Romanelli 1000 South McCaslin Boulevard Louisville, CO 80027 Bank of the West Guarantee of lease $61,187 Irwin Commercial Finance Guarantee of lease $57,952 Chase Bank Credit cards $47,785 Huntington National Bank Guarantee of lease $40,284 Balboa Capital Corporation Guarantee of lease $34,817 Pitney Bowes Credit card $32,100 American Express Credit card $30,431 First National Bank of Omaha Credit card $25,527 Citibank Credit cards $21,161 Wells Fargo Bank Credit Card $17,715 GE Capital Guarantee of lease $14,057 Nordstroms FSB Credit card $9,876 GM Card Services Credit card $9,706 Discover Card Credit card $9,610 GE Healthcare Financial Guarantee of lease $9,138 Services Wells Fargo Financial Leasing Guarantee of lease $5,477 ROSETEL SYSTEM: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Rosetel System Corp. 10390 Wilshire Boulevard, 20th Floor Los Angeles, CA 90024 Bankruptcy Case No.: 08-12339 Type of Business: The Debtor provides advanced and integrated video and data communication services, including videoconferencing, videophone, and high speed data delivery. It offers the RoseTel Systems line of products and a secure V.P.N. See http://www.rosetelsystem.com/ Chapter 11 Petition Date: February 25, 2008 Court: Central District Of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Anne Wells, Esq. (wellsanne@earthlink.net) Fuller-Wells, R.C. 2463 Ashland Avenue Santa Monica, CA 90405 Tel: (310) 490-0290 Fax: (310) 450-9106 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pac Bell Trade debt $695,120 Sacramento, CA 95887 A.T.& T. Trade debt $430,000 Sacramento, CA 95887 M.C.I. Trade debt $250,000 Attention: Sheppard Mullin 333 South Hope Street Los Angeles, CA 90071 Rockefeller Group Trade debt $150,000 Telecom Attention: Herzlich & Blum Fred Levinson Litigation $130,000 Attention: The Deiner Law Firm Southland Microsystems Trade Debt $125,000 X.O. Communications Trade debt $122,587 Level 3 Communications Trade debt $77,114 American Telesis Trade debt $71,732 Dawn and Henry Stewart $64,000 Judalon Smyth Litigation $60,000 Attention: The Deiner Law Firm Southwestern Bell Trade debt $53,790 Michael Blaschke, P.C. Litigation $46,162 Timothy McGonigle, Esq. Professional $23,667 Esq. Fees I.S.I. Trade debt $21,056 Network Innovations Trade debt $19,957 Sedgwick, Detert Professional fees $13,152 Grodsky & Olecki Professional fees $10,355 Verizon Trade debt $8,478 Kelly Services Trade debt $7,915 RSC HOLDINGS: December 31 Balance Sheet Upside-Down by $44,000 -------------------------------------------------------------- RSC Holdings Inc. balance sheet at Dec. 31, 2007, showed total assets of $3.46 million and total liabilities of $3.50 million, resulting to $40,000 total stockholders' deficit. The company reported results for the fourth quarter and year ended Dec. 31, 2007. Fourth quarter net income was $38 million. In the 2006 fourth quarter, net income was $32 million. Fourth quarter 2006 net income included $6.3 million of after tax recapitalization expenses. Free cash flow for the fourth quarter was a negative $19.9 million compared to a negative $101.1 million for the previous year. The negative cash flow in the quarter was due to large payments made on fleet purchased earlier in the year. In the fourth quarter, RSC expanded its footprint by opening four new locations, bringing the total number of RSC locations to 473. The company continued to execute on its same store sales strategy and added 11 net new sales people in the period, bringing the full year additions to 99 net new sales people. Interest expense was $58.4 million in the fourth quarter, an increase of $15.6 million over the comparable period last year, due to debt incurred in connection with the recapitalization of the company in November 2006. For full Year 2007, net income was $123.3 million. In 2006 net income available to common shareholders was $178.5 million. Adjusted for certain expenses related to the 2007 initial public offering and the 2006 recapitalization, net income for 2007 was $141.3 million compared to $184.8 million. Free cash flow for the year totaled $60.8 million, compared to a negative $106.2 million for the full year 2006. The improvement in cash flow was driven by a $68.9 million, or 15.8%, increase in cash from operating activities from $436 million in 2006 to $504.9 million in 2007 and a $98.0 million, or 18.1%, reduction in net capital expenditures from $542.2 million in 2006 to $444.2 million in 2007. The free cash flow along with $230.7 million of proceeds from the May 2007 initial public offering allowed the company to reduce total debt by $270.2 million to $2,736.2 million. About RSC Based in Scottsdale, Arizona, RSC Holdings Inc., (NYSE: RRR) -- http://www.RSCrental.com/-- through RSC Equipment Rental, provides equipment rental in North America servicing the construction and industrial markets with an original equipment fleet cost of $2.7 billion. RSC offers equipment and service to customers through an integrated network of 473 rental locations across 39 states in the United States and in four Canadian provinces. The company has 5,500 employees committed to continuous safety and 24x7 customer care. SALANDER-O'REILLY: Owner Seeks Employment as Auction Manager ------------------------------------------------------------ Salander-O'Reilly Galleries LLC owner Lawrence Salander is asking a bankruptcy court to allow the gallery to rehire him to sort and sell 4,000 artworks, ARTINFO (N.Y.) reports. Mr. Salander earned $50,000 a month running the business. He has asked the judge to determine his fees in the auction of the artworks. A committee of creditors in the case have proposed hiring New York-based Bridge Associates LLC, according to the report. Mr. Salander have also filed for bankruptcy. The couple is selling their Upper East Side town house for $25 million. As reported in the Troubled Company Reporter on Feb. 7, 2008, the official committee of unsecured creditors appointed in Salander- O'Reilly's chapter 11 case, the Debtor's secured lender First Republic Bank, and the gallery's chief restructuring officer have proposed a May 8 deadline for anyone who has a claim on art to file a written notice of the claim. About Salander-O'Reilly Established in 1976, New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners, Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard Ellenberg, disclosed total claims of more than $5 million. Amos Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The Koegel Group LLP represent the petitioners. On Nov. 9, 2007, the Debtor's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin, Esq., at Halperin Battaglia Raicht, LLP, represents the gallery. Salander-O'Reilly Galleries is owned by Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York. The couple also has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, an independent turnaround firm. SECURITY CAPITAL: S&P Cuts Fin'l Ratings on Operating Units to A- ----------------------------------------------------------------- Standard & Poor's Ratings Services took rating actions on several monoline bond insurers following additional stress tests with respect to their domestic nonprime mortgage exposure. -- The financial strength ratings on the operating subsidiaries of Security Capital Assurance Ltd -- XL Capital Assurance Inc. and XL Financial Assurance Ltd. -- were lowered to 'A-' from 'AAA' and remain on CreditWatch with negative implications; -- The financial strength rating on Financial Guaranty Insurance Co. was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications; -- The 'AAA' financial strength rating on MBIA Insurance Corp. was removed from CreditWatch and a negative outlook was assigned; -- The 'AAA' financial strength rating on Ambac Assurance Corp. was affirmed and remains on CreditWatch with negative implications; and -- The 'AAA' financial strength ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. were affirmed and retain a negative outlook. The downgrades on XLCA, XLFA, XL Capital Assurance (UK) Ltd., and Twin Reefs Pass-Through Trust (a committed capital facility supported by, and for the benefit of, XLFA) reflect S&P's assessment that the company's evolving capital plan has meaningful execution and timing risk. The downgrades on FGIC, FGIC Corp., and Grand Central Capital Trusts I-VI (a committed capital facility supported by, and for the benefit of, FGIC) reflect S&P's current assessment of potential losses, which is higher than previous estimates. The removal from CreditWatch of, and assignment of negative outlooks on, MBIA Insurance Corp., MBIA Inc., and North Castle Custodial Trusts I-VIII (a committed capital facility supported by, and for the benefit of, MBIA) reflect MBIA's success in accessing $2.6 billion of additional claims-paying resources, which, in S&P's view, is a strong statement of management's ability to address the concerns relating to the capital adequacy of the company. The affirmation of S&P's 'AAA' financial strength and financial enhancement ratings on Ambac Assurance Corp. and S&P's 'AA' rating of Anchorage Finance Sub-Trusts I-IV and Dutch Harbor Finance Sub- Trusts I-IV (committed capital facilities supported by, and for the benefit of, Ambac) and holding company Ambac Financial Group Inc. reflects S&P's assessment of the scope of Ambac's capital- raising plans and the company's ability to implement those plans. S&P left the ratings on CreditWatch with negative implications to reflect uncertainty surrounding the risk profile and capitalization plans for the reported new corporate structure being contemplated by the holding company. The affirmation of S&P's 'AAA' financial strength rating on CIFG reflects the contribution of $1.5 billion in capital resources to CIFG Holding by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne to support CIFG's claims-paying resources. CIFG's outlook was changed to negative from stable in June 2007 for reasons unconnected to its subprime exposure. Rather, S&P looked at the effectiveness and processes of the company's board, appropriate succession planning, and the degree of long-term support to be provided by its parent Natixis S.A. The assignment of the negative outlook also reflected S&P's views relating to CIFG's below-average earnings and return on earnings. Nevertheless, S&P considers the $1.5 billion capital contribution to be an important statement by CNCE and BFBP about their near- term commitment to the financial guaranty industry and CIFG. About Security Capital Assurance Security Capital Assurance Ltd is a Bermuda-domiciled holding company whose primary operating subsidiaries, XL Capital Assurance Inc. and XL Financial Assurance Ltd, 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, SCA reported a net loss available to common shareholders of $27 million. As of Sept. 30, 2007, SCA had shareholders' equity of approximately $1.6 billion. * * * As reported in the Troubled Company Reporter on Feb. 8, 2008, Moody's Investors Service has downgraded to A3, from Aaa, the insurance financial strength ratings of the operating subsidiaries of Security Capital Assurance Ltd -- including XL Capital Assurance Inc., XL Capital Assurance Limited and XL Financial Assurance Ltd. Moody's has also downgraded the debt ratings of the holding company, Security Capital Assurance Ltd (senior debt to (P)Baa3 from (P)Aa3), and a related financing trust. These rating actions reflect Moody's assessment of SCA's weakened capitalization and business profile resulting, in part, from its exposures to the US residential mortgage market. The rating outlook is negative. The SCA units also lost their key AAA grade at Fitch Ratings. SENTRA CONSULTING: Dec. 31 Balance Sheet Upside-Down by $3,414,627 ------------------------------------------------------------------ Sentra Consulting Corp.'s consolidated balance sheet at Dec. 31, 2007, showed $2,600,191 in total assets and $6,014,818 in total liabilities, resulting in a $3,414,627 total stockholders' deficit. The company reported a net loss of $1,304,386 on net revenues of $73,688 for the third quarter ended Dec. 31, 2007, compared with a net loss of $128,001 on net revenues of $1,575 for the same period ended Dec. 31, 2006. The company reported a gross loss of $303,829 for 2007 compared to a gross loss of $25,916 for 2006. The increase is primarily due to the increase of certain fixed costs and expenses and the recording of an accrual for liquidating damages of $250,000 related to the company's Cooperation and License Agreement with Allgemeine Gold - und Silberscheideanstalt AG as a result of not meeting minimum purchase requirements for 2007. Selling, general and administrative expenses increased to $752,962 for 2007 compared to $97,282 for 2006. 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?2880 About Sentra Consulting Based in Cedarhurst, New York, Sentra Consulting Corp. (OTC BB: SCNU) -- manufactures and sells platinum alloy and platinum jewelry. On Dec. 21, 2007, Sentra Consulting Corp. acquired 100% of the membership interests of Karat Platinum LLC, a New York limited liability company which manufactures and sells platinum alloy and platinum jewelry. As a result of the acquisition, Karat Platinum became a wholly-owned subsidiary of Sentra. Prior to the acquisition, Sentra was a mere shell company. SIGNATURE MEDICAL: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Signature Medical Management Group, L.L.C. 445 Westbury Boulevard Hempstead, NY 11550 Bankruptcy Case No.: 08-70837 Type of Business: The Debtor provides management services. Chapter 11 Petition Date: February 25, 2008 Court: Eastern District of New York (Central Islip) Debtor's Counsel: Andrew Paul Cooper, Esq. (ACooper@hbclaw.net) Hession, Bekoff & Cooper, L.L.P. 1103 Stewart Avenue, Suite 200 Garden City, NY 11530 Tel: (516) 408-3666 Fax: (516) 408-3833 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ C.P. Associates, L.L.C. lease of $218,729 7 Penn Plaza, Suite 618 commercial New York, NY 10001 property SHORES OF PANAMA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Shores of Panama, Inc. P.O. Box 7430 Spanish Fort, AL 36577 Bankruptcy Case No.: 08-50066 Type of Business: The Debtor owns and manages condominiums. See http://www.shoresofpanama.net/ Chapter 11 Petition Date: February 26, 2008 Court: Northern District of Florida (Panama City) Debtor's Counsel: John E. Venn, Esq. (johnevennjrpa@aol.com) 220 West Garden Street, Suite 603 Pensacola, FL 32502 Tel: (850) 438-0005 Fax: (850) 438-1881 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ C.F. Jordan Residential, L.P. Trade debt $6,197,313 7700 C.F. Jordan Drive El Paso, TX 79912 Osiris, Inc. $1,097,834 2569 Northeast Cherry Lake Circle Pinetta, FL 32350 Dwayne and Joseph Schwab $540,000 Attention: Brian D. Hess P.O. Box 9454 Panama City, FL 32417 Jennifer Merritt $505,860 Attention: Andrew Wozniak 4001 Tamiami Tr. North Naples, FL 34103 Equity Trust Co. $390,000 f.b.o. David E. Hudgens, I.R.A. 9877 Pleasant Road Daphne, AL 36526 Atlas Comfort Systems H.A.V.C. Contract $373,347 4122 Southerland Houston, TX 77092 Atlas Comfort Systems $325,240 4122 Southerland Houston, TX 77092 Tim and Lisa Cranston $271,360 Attention: Brian D. Hess P. O. Box 9454 Panama City, FL 32417 Burke, Blue, Hutchison & Legal fees $260,859 Walters, P.A. 221 McKenzie Avenue Panama City, FL 32402 Jeremy, Jeremy & Lucia Gleaton $241,760 D.K. Painting & Construction Trade debt $236,268 Co. Patricia & William Hopkins $231,740 Terri Anderson $231,000 A.B.G. Caulking Contractors, Trade debt $205,007 Inc. Frank G. Morgan $201,530 Danny & Shannon Messerole & $190,960 Tracy Mizell & Thomas Braxton Ronald Hundley & Patricia $188,400 Powell Riley Powell & Worthing $180,720 Properties Sun Marie Lee $149,400 George & Marie Landmon $147,200 SPATIALIGHT: Voluntary Chapter 7 Case Summary --------------------------------------------- Debtor: Spatialight, Inc. aka SpatiaLight aka H.D.T.V. aka S.P.L.T. 5 Hamilton Landing, Suite 100 Novato, CA 94949 Bankruptcy Case No.: 08-10271 Type of Business: The Debtor is engaged in the business of manufacturing high-resolution liquid crystal on silicon microdisplays. See http://www.spatialight.com/ Chapter 11 Petition Date: February 21, 2008 Court: Northern District of California (Santa Rosa) Judge: Alan Jaroslovsky Debtor's Counsel: David M. Sternberg, Esq. (DMSLaw@ix.netcom.com) Sternberg and Coad-Hermelin 540 Lennon Lane Walnut Creek, CA 94598 Tel: (925) 946-1400 Total Assets: $5,563,658 Total Debts: $20,326,642 STRUCTURED ASSET: S&P Rating on Class M3 Tumbles to 'D' From 'CCC' ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on the class M3 mortgage pass-through certificates issued by Structured Asset Securities Corp.'s series 2003-25XS to 'D' from 'CCC'. At the same time, S&P affirmed the ratings on the remaining classes from this transaction. The downgrade of class M3 reflects the complete erosion of the credit support and the subsequent write-downs for this class. Class M3 realized $294,311 in losses during the January 2008 remittance period. Cumulative losses for this transaction were 0.86% of the original principal balance, total delinquencies were 9.79% of the current principal balance, and severe delinquencies (90-plus days, foreclosures, and REOs) were 6.01%, as of the January 2008 remittance period. The affirmations reflect current and projected credit support percentages that are sufficient to support the certificates at the current rating levels. A combination of subordination and excess spread provide primary credit support for this transaction. The underlying collateral backing the certificates consists primarily of Alternative-A, fixed-rate, first-lien mortgage loans secured by one- to four- family residential properties. Rating Lowered Structured Asset Securities Corp. 2003-25XS Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M3 D CCC Ratings Affirmed Structured Asset Securities Corp. 2003-25XS Mortgage pass-through certificates Class Rating ----- ------ A5, A6 AAA M1 AA M2 A THEATER XTREME: Dec. 31 Balance Sheet Upside-Down by $3,289,121 --------------------------------------------------------------- Theater Xtreme Entertainment Group Inc.'s balance sheet at Dec. 31, 2007, showed $2,412,199 in total assets and $5,701,320 in total liabilities, resulting in a $3,289,121 total stockholders' deficit. At Dec. 31, 2007, the company's financial statements also showed strained liquidity with $1,378,382 in total current assets available to pay $2,914,074 in total current liabilities. The company reported a net loss of $936,157 on revenues of $1,175,562 for the second quarter ended Dec. 31, 2007, compared with a net loss of $704,873 on revenues of $1,702,189 for the corresponding period ended Dec. 31, 2006. This decrease is primarily the result of decreased retail sales in underperforming and closed retail outlets. Full-text copies of the company's financial statements for the quarter ended Dec. 31, 2007, are available for free at: http://researcharchives.com/t/s?287d Going Concern Disclaimer As reported in Troubled Company Reporter on Oct. 19, 2007, Morison Cogen LLP, in Bala Cynwyd, Pa., expressed substantial doubt about Theater Xtreme Entertainment Group Inc.'s ability to continue as a going concern after auditing the company's financial statements for the fiscal year ended June 30, 2007. The auditing firm reported that the company incurred significant losses from operations, has negative working capital and an accumulated deficit. About Theater Xtreme Headquartered in Newark, Delaware, Theater Xtreme Entertainment Group Inc. (TXEG.OB) -- http://www.theaterxtreme.com/ -- is a specialty retailer of real movie theaters for the home. The company's 80" to 120" front projection systems deliver an authentic movie theater experience, as an increasingly popular alternative to flat panel televisions. It operates 3 company owned stores and 11 franchises in 12 states. TRANQUILECHEE: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: Tranquilechee, L.L.C. aka Diamond Bay of Eau Gallie, L.L.C. 1520 Latham Road, Suite 7 West Palm Beach, FL 33409 Bankruptcy Case No.: 08-01526 Chapter 11 Petition Date: February 25, 2008 Court: Middle District of Tennessee (Nashville) Debtor's Counsel: Thomas Larry Sr. Edmondson, Sr. (ledmondson@ecf.epiqsystems.com) 800 Broadway 3d Floor Nashville, TN 37203 Tel: (615) 254-3765 Fax: (615) 254-2072 Total Assets: $6,000,126 Total Debts: $3,935,775 Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gulf Stream Ventures, L.L.C. exact amount $500,000 P.O. Box 473 yet to be Newtown Square, PA 19073 determined TRENTONWORKS LTD: Applies for Receivership in Nova Scotia Court --------------------------------------------------------------- TrentonWorks Ltd, a non-operating subsidiary of The Greenbrier Companies, made an application to the Supreme Court of Nova Scotia for the appointment of a receiver to take control of its assets. In April 2007, Greenbrier disclosed the closure of the railcar manufacturing operation, located in Trenton, Nova Scotia, Canada. The operation had become uncompetitive as a result of appreciation of the Canadian dollar and other cost disadvantages. Since then, the company has worked with Ernst & Young to market the facility and, in the process, directly contacted over 200 potential buyers, nationally and internationally. That process was not successful, and TrentonWorks has asked the Court to appoint a Receiver to administer the assets in the best interest of its creditors. The company expects the appointment of a Receiver to eliminate any ongoing costs associated with this operation. Greenbrier regrets the closing of the plant and the subsequent loss of employment, but the plant was not cost competitive in the North American marketplace. About TrentonWorks Ltd. Located in Nova Scotia, Canada, TrentonWorks Ltd. -- http://www.trentonworks.ca/-- was acquired by e Greenbrier Companies in 1995. TrentonWorks has a history in the railcar and other steel fabricating businesses in Canada since 1872. TRINITY INDUSTRIES: Earns $78.3 Million for 2007 Fourth Quarter --------------------------------------------------------------- Trinity Industries Inc. reported net income for the fourth quarter of 2007 ended Dec. 31 of $78.3 million compared with net income of $56.5 million for the same quarter a year ago. Revenues for the fourth quarter of 2007 were $1.1 billion compared with revenues of $835.0 million for the same quarter in 2006. Earnings from continuing operations was $78.5 million for the fourth quarter ended Dec. 31, 2007. The quarter's earnings increased 37% over the same quarter in 2006 and were the highest fourth quarter earnings in the company's history. Earnings from continuing operations for the same quarter of 2006 were $57.4 million. For the year ended Dec. 31, 2007, the company reported earnings from continuing operations of $293.8 million compared with earnings from continuing operations of $215.5 million in 2006. For fiscal 2007, the company reported net income of $293.1 million compared with net income of $230.1 million in 2006. For the year ended Dec. 31, 2007, the company reported record revenues of $3.8 billion as compared to revenues of $3.2 billion in 2006. "Our fourth quarter results represent a strong finish to a great year for Trinity," said Timothy R. Wallace, Trinity's Chairman, President, and CEO. "I credit our employees for our record revenues and high level of earnings. Our employees' dedication to operational excellence during the fourth quarter accelerated the momentum that began building early in the year." About Trinity Industries Headquartered in Dallas, Texas, Trinity Industries Inc. (NYSE:TRN) -- http://www.trin.net/-- is a holding company of diversified industrial companies. Trinity manufactures and sells railcars and railcar parts, inland barges, concrete and aggregates, highway products, beams and girders used in highway construction, tank containers and structural wind towers. In addition, it leases railcars to its customers through a captive leasing business, Trinity Industries Leasing Company. Trinity has five business groups: Rail Group, Railcar Leasing and Management Services Group, Construction Products Group, Inland Barge Group and the Energy Equipment Group. * * * As reported in the Troubled Company Reporter on Oct. 24, 2007, Moody's Investors Service raised the corporate family rating of Trinity Industries Inc. to Ba1 from Ba2. The rating outlook has been changed to stable from positive. TRM CORPORATION: Appoints Ethan S. Buyon to Board of Directors -------------------------------------------------------------- TRM Corporation appointed Ethan S. Buyon to serve on the company's board of directors effective Feb. 22, 2008. Mr. Buyon, age 53, has been the interim chief operating officer for Citi Residential Lending Inc. since Sept. 1, 2007, and is a managing director at Citi Markets and Banking. Before joining Citi Markets and Banking, Mr. Buyon served as a managing director of CRP Partners and its processor firm The Recovery Group from October 2003 to February 2008. From May 2002 to October 2003, Mr. Buyon served as a managing director of Crossroads LLC, a national restructuring and financial advisory firm. "We welcome Ethan Buyon to our board and look forward to his contribution," Richard Stern, TRM's president and chief executive officer said. "I believe Ethan's judgment and experience will serve us well." Headquartered in Portland, Oregon, TRM Corporation (Nasdaq: TRMM) -- http://www.trm.com/-- is a consumer services company that provides convenience ATM services in high-traffic consumer environments. TRM's ATM customer base is widespread, with retailers throughout the United States. TRM operates the second largest non-bank ATM network in the United States. Going Concern Doubt PricewaterhouseCoopers LLP, in Portland, Oregon, expressed substantial doubt about TRM Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company incurred a net loss for 2006 resulting in its inability to meet certain financial covenants of its financing agreement with GSO Origination Funding Partners LP and other lenders. On Nov. 20, 2006, the company entered into amendments that restructured its loans and waived the failure to meet the loan covenants. Under the restructured loan agreements principal payments of $69.9 million were due in the first quarter of 2007. During January 2007, the company sold its Canadian, United Kingdom and German ATM businesses and its United States photocopy business and used $98.4 million from the proceeds of those sales to make principal and interest payments under these loans, leaving a remaining balance of principal plus accrued interest of $2.0 million as of Jan. 31, 2007. The company is uncertain whether its remaining operations can generate sufficient cash to comply with the covenants of its restructured loan agreements and to pay its obligations on an ongoing basis. UNITEDHEALTH GROUP: Completes $2.6 Bil. Merger with Sierra Health ----------------------------------------------------------------- UnitedHealth Group and Sierra Health Services Inc. completed their merger transaction effective as of the close of business Feb. 25, 2008. Under the merger agreement, Sierra stockholders received $43.50 in cash for each share of Sierra common stock, representing an equity value of approximately $2.6 billion. The U.S. Department of Justice has approved the acquisition. As a condition of approval, UnitedHealth Group will divest its individual SecureHorizons Medicare Advantage HMO plans in Clark and Nye Counties in Nevada, which represent approximately 25,000 members. UnitedHealth Group has reached an agreement to transition these members to Humana Inc., subject to customary closing conditions. UnitedHealth Group and Humana have agreed to work together to ensure a seamless transition of the individual SecureHorizons Medicare Advantage HMO plans in Clark and Nye Counties and will notify affected members as details become available. UnitedHealth Group emphasized that post-divestiture, these members will continue to receive the benefits they currently have, and there will be no interruption in these members' health care coverage. Group SecureHorizons Medicare Advantage plans offered to retirees through commercial customers or contracts are excluded from the divestiture and will continue to be operated by UnitedHealth Group. Sierra will retain its Medicare Advantage HMO plans in Nevada which are offered under the Senior Dimensions brand. "We look forward to building on our shared heritage of providing consumers access to affordable, high-quality health care," Ken Burdick, CEO of UnitedHealthcare, said. "Our goal is to offer Nevadans the most comprehensive range of cost-effective, innovative health care products and services in the Southwest." "Joining our two organizations will be good for Nevada's health care consumers, good for the many dedicated professionals who provide their care and good for the employees of Sierra," Jonathon Bunker, president and COO of Sierra, said. "With greater resources and advanced technology, we can now build upon our legacy by providing more options for our members and expanded access to the largest national network of hospitals, physicians and other care providers." In connection with the transaction, UnitedHealth Group and Sierra also reached an agreement with Nevada Attorney General Catherine Cortez Masto that is consistent with the terms of the Department of Justice consent decree. As part of that agreement, and consistent with UnitedHealth Group's longstanding commitment of philanthropic initiatives to improve and expand health care access for underserved populations, UnitedHealth Group will make $15 million in charitable contributions over the next five years to benefit health care consumers and programs in the State of Nevada. This news does not impact UnitedHealth Group's full year 2008 financial outlook, which included projected results for Sierra. UnitedHealth Group continues to project full year revenue of approximately $83 billion and earnings in the range of $3.95 - $4.00 per share. About Sierra Health Services, Inc. Based in Las Vegas, Sierra Health Services Inc. -- http://www.sierrahealth.com/-- is a diversified healthcare services company that operates health maintenance organizations, indemnity insurers, preferred provider organizations, prescription drug plans and a multi-specialty medical group. Sierra's subsidiaries serve over 860,000 people through health benefit plans for employers, government programs and individuals. About UnitedHealth Group Based in Minneapolis, Minnesota, UnitedHealth Group Inc. (NYSE: UNH) -- http://www.unitedhealthgroup.com/-- is a diversified health and well-being company which offers offers a broad spectrum of products and services through six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. Through its family of businesses, UnitedHealth Group serves approximately 70 million individuals nationwide. * * * UnitedHealth Group's 2-1/4% senior convertible debentures due 2023 holds Standard & Poor's BB+ rating. VALENCE TECH: Inks Agreement to Sell $1 Million Common Shares ------------------------------------------------------------- Valence Technology Inc. entered into an agreement on Feb. 21, 2008, to sell $1 million of its common stock to Berg & Berg Enterprises LLC, an affiliate of the company's chairman Carl E. Berg. The proceeds will be used to fund corporate operating needs and working capital. Under the terms of the agreement, the company will issue $1.0 million of its shares of common stock at a price to be determined based on the closing bid price on Feb. 27, 2008, in a private placement transaction exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof. About Valence Technology Headquartered in Austin, Texas, Valence Technology Inc. (Nasdaq: VLNC) -- http://www.valence.com/-- develops and markets Lithium Phosphate Rechargeable Batteries. The company has facilities in Austin, Texas; Las Vegas, Nevada; Mallusk, Northern Ireland and Suzhou, China. Going Concern Doubt As reported in the Troubled Company Reporter on June 21, 2007, PMB Helin Donovan LLP, in Austin, Tex., expressed substantial doubt about Valence Technology, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's recurring losses from operations, negative cash flows from operations and net stockholders' capital deficit. At Dec. 31, 2007, the company had $20.06 million in total assets, $8.61 million in redeemable convertible preferred stock, and $81.23 million in total liabilities, resulting in a $69.78 million total stockholders' deficit. VALLEJO CITY: Labor Talks Fail; Administrators Suggest Bankruptcy ----------------------------------------------------------------- Top administrators are recommending that the city of Vallejo file for bankruptcy protection after the city council failed to reach agreement with employee groups on Monday, Sarah Rohrs of San Jose (Cal.) Mercury News reports. The council meets Thursday to consider City Manager Joe Tanner's recommendation that protection be sought under Chapter 9 of the bankruptcy code, according to the report. Without extensive cost-cutting, the city will be $6 million in debt and will have exhausted its $4 million in reserves by June 30, Vallejo Finance Director Rob Stout told the city council on Feb. 13. Mr. Tanner had said the city faces a $10.1 million general fund operating deficit for the current fiscal year and a negative available fund balance of $5.9 million on June 30, 2008. "Based upon the updated financial projections, the current estimate for insolvency is late April 2008," Mr. Tanner had said. The city currently has a $135 million liability for the present value of retiree benefits already earned by active and retired employees and an additional $6 million a year as employees continue to vest and earn this future benefit, Mr. Tanner said. Public safety contracts for police and fire services make up 80 percent of the city's general fund. A possible bankruptcy filing of Vallejo will be the first for a California city. Vallejo is a city in Solano County. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. VISTEON CORPORATION: Steven Hamp to Rejoin Board of Directors ------------------------------------------------------------- The board of directors of Visteon Corporation elected Steven K. Hamp to rejoin the board, effective March 1, 2008. Mr. Hamp previously served on Visteon's board from January 2001 to November 2005. Mr. Hamp, 59, has been the principal of Hamp Advisors LLC, a strategy consulting firm, since March 2007. Before that, he was vice president and chief of staff at Ford Motor Co., a position he held from November 2005 to October 2006. Prior to joining Ford, Hamp served as president of The Henry Ford, a non-profit organization sponsoring historic exhibits. He is also a director of McKinley Corporation, a private real estate investment company located in Ann Arbor, Michigan. "Steve has keen knowledge of Visteon and our business environment, and we are pleased that the company again will benefit from his insight and leadership," Michael F. Johnston, Visteon chairman and chief executive officer, said. Based in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic, and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company's other corporate offices are in Shanghai, China; and Kerpen, Germany. The company has facilities in 26 countries and employs approximately 43,000 people. * * * Moody's Investor Service placed Visteon Corp.'s long term corporate family and probability of default ratings at 'B3' in November 2006. The ratings still hold to date with a negative outlook. VOIP INC: In Default of May 2007 Settlement Agreement with MCI -------------------------------------------------------------- VOIP Inc. disclosed that it failed to make the payment due Feb. 1, 2008, under its settlement agreement with WorldCom Network Services Inc. d/b/a UUNET (now Verizon Business Network Services Inc.), and was declared in default by MCI as of Feb. 12, 2008. Under the settlement agreement dated May 17, 2007, MCI may seek to exercise default remedies provided by the Settlement Agreement, which may include seeking to enforce and collect the $8 million contingent liability, less $630,000 paid by the company to date under the Settlement Agreement, and initiating related foreclosure proceedings based on MCI's security interest in all of the company's assets. At Sept. 30, 2007, the amount owed to MCI under the terms of the settlement agreement was $1,905,000. Pursuant to the agreement, beginning May 2007, two of the company's wholly owned subsidiaries would pay $2.2 million to MCI in monthly installments through November 2009. About VoIP Based Altamonte Springs, Fla., VoIP Inc. (OTC BB: VOII.OB) -- http://www.voipincorporated.com/-- provides turnkey Voice over Internet Protocol (VoIP) communications solutions for service providers, resellers and consumers worldwide. The Company is also a certified Competitive Local Exchange Carrier (CLEC) and Inter Exchange Carrier (IXC). Going Concern Doubt Berkovits, Lago & Company LLP, in Fort Lauderdale, Fla., expressed substantial doubt about VoIP Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the years ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's dependence on outside financing, lack of sufficient working capital, and recurring losses. The company is also required to file registration statements to register amounts ranging up to 200% of the shares issuable upon conversion of the company's convertible notes issued from July 2005 through September 2007, and all of the shares issuable upon exercise of the warrants issued in connection with these notes. In addition, since October 2005, the company has been in violation of certain requirements of most of its convertible notes. VONAGE HOLDING: Is Likely to Be Challenged by T-Mobile Entry ------------------------------------------------------------ The entry of T-Mobile USA into the home Internet calling service sector poses a threat to Vonage Holding Corp. since T-Mobile's monthly service fee for unlimited calls via an Internet calling plan is only $10 compared to Vonage's $25, various sources report. Several papers relate that T-Mobile's testing process was initiated in Dallas and Seattle to its wireless subscribers. T-Mobile USA, Inc., disclosed that they will offer consumers a plan that includes unlimited nationwide wireless calling and unlimited nationwide messaging for $99.99 per month. This offer started Feb. 21, 2008, and will be a great value for new and existing T-Mobile customers. "T-Mobile is passionate about helping people stick together with those who matter most, and providing them with the best value is one way we help our customers do that," Jeff Hopper, vice president, Marketing, T-Mobile USA, said. "This offering empowers people to communicate as much as they like on their own terms -- whether it's voice, text messaging, picture messaging or IM." With this new plan, domestic roaming and long distance charges are included. Unlimited messaging includes text messages, picture messages and instant messages. T-Mobile also offers its popular myFavesTM plans -- affordable unlimited calling plans suited for a majority of its customers -- beginning at just $39.99 per month. About T-Mobile Based in Bellevue, Washington, T-Mobile USA, Inc. -- http://www.t-mobile.com/-- is the U.S. operation of Deutsche Telekom AG's Mobile Communications Business, and a wholly owned subsidiary of T-Mobile International, one of the world's leading companies in mobile communications. About Vonage Holdings Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with nearly 2.6 million subscriber lines. The company's Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and features like call waiting, call forwarding and voicemail for a flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. At Dec. 31, 2007, the company had $465.0 million in total assets and $537.4 million in total liabilities, resulting in a $72.4 million total stockholders' deficit. WACHOVIA BANK: S&P Maintains 'BB' Rating on Class K Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three classes of commercial mortgage pass-through certificates from Wachovia Bank Commercial Mortgage Trust's series 2005-WHALE 6. Concurrently, S&P affirmed its ratings on four classes from the same series. The upgrades reflect increased credit enhancement levels resulting from the payoff of the 100 Church Street loan. The affirmations follow S&P's analysis of the three remaining loans in the pool. As of Feb. 15, 2008, the trust collateral balance had paid down 91% to $108.0 million from $1.093 billion at issuance. The trust collateral consists of three senior interests in three participated floating-rate whole loans. Details of these loans are: -- The Grand Resort Apartments loan is the largest remaining loan in the pool, with a trust balance of $50.0 million and a whole-loan balance of $80.0 million. The whole loan consists of a $50.0 million A note and a $30.0 million junior participation, $27.7 million of which has been funded to date. The future funding component of the junior participation, totaling $17.7 million, serves as collateral in Wachovia CRE CDO 2006-1 Ltd. Additionally, the borrower's equity interest in the property secures a $20.0 million mezzanine loan. The interest-only loan is secured by the fee interest in a 12-building, 768-unit garden- style apartment property in Anaheim, California. The property is currently undergoing a $12.1 million renovation project, which is scheduled to be completed in November 2008. The property was 87% occupied as of September 2007, and Standard & Poor's analysis derived a value comparable to its level at issuance. The loan matures in May 2010 and does not have any extension options. -- One Oliver Plaza is the second-largest remaining loan in the pool, with a trust balance of $40.0 million and a whole-loan balance of $52.0 million. The whole loan consists of a $40.0 million A note and a $12.0 million junior participation. Additionally, the borrower's equity interest in the property secures an $8.0 million mezzanine loan. The interest-only loan is secured by the fee interest in a 639,168-sq.-ft. office property in Pittsburgh, Pennsylvania. Standard & Poor's adjusted valuation is down 8% from its level at issuance, reflecting lower rents and occupancy. The loan is scheduled to mature on Oct. 9, 2008, and has one 12-month extension remaining. -- 230 Peachtree is the smallest remaining loan in the pool, with a trust balance of $18.0 million and a whole-loan balance of $28.0 million. The whole loan consists of an $18.0 million A note and a junior participation of $10.0 million. The interest-only loan is secured by the leasehold interest in a 414,768-sq.-ft. office property in Atlanta, Georgia. Standard & Poor's adjusted valuation is down 8% from its level at issuance, reflecting lower rents and higher operating expenses. The loan is scheduled to mature on July 9, 2008, and has two 12-month extensions remaining. Ratings Raised Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2005-WHALE 6 Rating Class To From Credit enhancement G AAA AA+ 73.38% H AA+ A+ 50.61% J A BBB 30.36% Ratings Affirmed Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2005-WHALE 6 Class Rating Credit enhancement ----- ------ ------------------ F AAA 96.15% K BB 0.00% X-1B AAA N/A X-2 AAA N/A N/A--Not applicable. WELLMAN INC: Gets Interim Court Nod to Obtain $225MM DIP Financing ------------------------------------------------------------------ Wellman Inc. and its debtor-affiliates received interim approval from the U.S. Bankruptcy Court for the Southern District of New York to obtain up to $225 million of Debtor-in-possession financing from Deutsche Bank Securities Inc., as lead arranger and bookrunner for a syndicate of lenders. DIP Terms As reported in the Troubled Company Reporter on Feb. 26, 2008, the salient terms of the DIP Agreements are: Borrowers: Wellman, Inc.; Prince, Inc.; Wellman of Mississippi, Inc.; Carpet Recycling of Georgia, Inc.; ALG, Inc.; PTA Resources, LLC; and Fiber Industries, Inc. Guarantors: Warehouse Association, Inc.; MRF, Inc.; JOSDAV, Inc.; and MED Resins, Inc. Lenders: Deutsche Bank Trust Company of Americas, as administrative agent and collateral agent; Deutsche Bank Securities, Inc., as lead arranger and bookrunner; JPMorgan Chase Bank, National Association, as syndication agent; and General Electric Capital Corporation, LaSalle Business Credit, LLC, Wachovia Capital Finance Corporation (Central), as co-documentation agents Commitment: Up to $225,000,000 senior secured superpriority revolving credit facility, subject to a Borrowing Base, with a $40,000,000 letter of credit sublimit Term: DIP Facility will terminate on the earliest of: * 365 days after the Closing Date; * the date as the Commitments will have been terminated or otherwise reduced to $0, all Loans have been repaid, all Letters of Credit have been terminated or have been cash collateralized at 105% and the Borrowers are entitled to a release of the Collateral under the terms of the DiP Agreement; * Feb. 28, 2008, if an interim DIP order has not been approved by the Court; * April 9, 2008, if a final DIP order has not been approved by the Court, unless an Interim DIP Order has been extended with Agent's written consent; * the expiration date of an Interim DIP Order unless a Final DIP Order has been entered and become effective on that date; * the consummation date of any plan of reorganization in any of the Debtors' Chapter 11 case; and * contemporaneously with the funding of the Wellman Sale. Interest Rate: All loans outstanding under the Revolving Credit Facility will bear interest, at the Borrower's option, at: -- Base Rate plus 1.75% per annum, or -- Adjusted LIBOR Rate plus 2.75% per annum. Revolving Letter of Credit Fees: The standby letter of credit fee will be 2.75% per annum, plus 2.00% after the occurrence and during the continuance of an event of default, and an additional 0.25% per annum. Superpriority Claims: The Debtors' obligations under the DIP Facility will have superpriority administrative expense status. Subject to the Carve-Out Reserve, the administrative claim will have priority over all other claims, costs and expenses, and at all times be senior to the rights of any Credit Party. DIP Liens: As security for the DIP Obligations, subject only to the Carve-Out Reserve and other liens permitted to be senior pursuant to the DIP Documents, the DIP Lenders will be granted: * first lien on unencumbered property, provided that the First Lien DIP Collateral will not include proceeds from any avoidance actions; * liens junior to first lien term facility liens; * liens priming second lien term loan lenders' liens; and * liens senior to certain other liens. Carve-Out Reserve: Carve-Out Reserve refers to (i) all fees required to be paid to the Clerk of the Bankruptcy Court and to the office of the U.S. Trustee; and (ii) payment of unpaid professional fees and expenses incurred by the Credit Parties and any statutory committee, in an amount not exceeding $2,500,000. Fees: An upfront fee will be paid to each Lender equal to 1.25% of the Lender's commitment under the Revolving Credit Facility, plus a closing fee equal to 0.50% of the maximum amount of the DIP Financing, payable on the Closing Date. Commitment Fees equal to 0.375% per annum multiplied by the daily average unused portion of the Revolving Credit Facility will also be paid. All fees will be fully earned and non-refundable upon entry of an Interim DIP Order. Expenses: All costs, fees, expenses and other compensation payable to the Arrangers, the Administrative Agent or the Lenders will be paid to the extent due. Events of Default: The DIP Credit Agreements provide for customary events of default, including the entry of an order dismissing the Borrower's Chapter 11 case or an order converting its Chapter 11 case to that under Chapter 7; failure to comply with any negative covenants or certain covenants specified in the DIP Documents; failure to sign an engagement letter for a chief restructing officer; or failure of Wellman, Inc., to close a sale of the company by July 31, 2008. A full-text copy of the DIP Facility Agreement is available for free at http://bankrupt.com/misc/wellman_$225MCreditPact.pdf About Wellman Inc. Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WELLMAN INC: Moody's Slashes Rating to 'Ca' on Chapter 11 Filing ---------------------------------------------------------------- Moody's Investors Service downgraded Wellman Inc.'s corporate family rating to Ca from Caa2 and probability of default rating to D from Caa2, following the company's announcement that it has filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court, Southern District of New York. The ratings on the company's debt issues were also downgraded. The ratings will be withdrawn in the near future due to the bankruptcy. These summarizes the ratings changes: Wellman, Inc. -- Corporate family rating: Ca from Caa2 -- Probability of default rating: D from Caa2 -- $185mm First lien term loan due 2009: Caa2 (LGD2, 29%) from B3 (LGD2, 29%) -- $265mm Second lien term loan due 2010: C (LGD5, 79%) from Caa3 (LGD5, 79%) Wellman manufactures and markets PET (polyethylene terephthalate) packaging resins under the PermaClear brand name and polyester staple fibers under the Fortrel brand name. The company is headquartered in Fort Mill, South Carolina and had revenues from continuing operations of $1.3 billion for the LTM ended Sept. 30, 2007. WELLMAN INC: S&P's Rating Tumbles to 'D' After Bankruptcy Filing ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Wellman Inc. to 'D' from 'CCC+' following the company's announcement of its decision to file for Chapter 11 bankruptcy protection. In addition, S&P lowered the first- and second-lien senior secured ratings to 'D'. The company expects to continue to operate its facilities in the ordinary course of business while it restructures its balance sheet. Wellman has received a commitment from its existing revolving credit facility lenders of up to $225 million in debtor-in-possession financing for which it is seeking court approval. S&P also removed the ratings from CreditWatch with developing implications, where they were placed on Oct. 31, 2007, after the company's announcement that it had engaged an investment bank to explore strategic alternatives including the possible sale of the company. Operating results have deteriorated at Wellman because of ongoing weakness in key markets for polyethylene terephthalate (PET) resin and polyester staple fiber. Specifically, lower-than-expected demand growth in the PET market, an increase in PET resin supply in 2007, and high input costs related in part to elevated oil and natural gas costs resulted in weaker earnings and cash flow. Wellman, with about $1.2 billion in annual revenues, is a narrowly focused chemical company. It produces polyester staple fibers primarily for the home furnishing, fiberfill, and apparel markets, and PET resins used in beverage bottles and food containers. WESCO AIRCRAFT: Moody's Maintains 'B2' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed Wesco Aircraft Hardware Corp.'s existing B2 Corporate Family Rating and Probability of Default Rate but revised the outlook to positive from stable. The action recognizes strong growth in revenues and earnings Wesco achieved in fiscal 2007 as well as expectations that underlying demand for the company's logistical services in support of build rates in the aerospace industry should lead to further expansion in Wesco's volumes over the next few years. Nonetheless, growth has required re-investment in working capital and purchase commitments which has constrained conversion of earnings into free cash flow, trends which Moody's expects to continue. In its first full year of operations following its purchase by Falcon Aerospace Holdings, Wesco's revenues grew approximately 24%. Adjusted EBITDA and operating margins similarly kept pace. For the fiscal year ending September 2007, earnings based leverage metrics of debt/EBITDA fell below 5 times and EBITA/interest coverage exceeded 2 times. Cash flow from operations to debt reached upper single digit levels as a result of the company significantly re-investing in working capital. Wesco was free cash flow generative for the period, but FCF/debt remained in the low single digit range. The B2 CFR and PDR continue to recognize the company's modest scale as well as its ongoing debt levels and leverage following its acquisition. While the company maintains long term supply arrangements with its customers, it remains highly reliant on aerospace production levels. Any meaningful erosion of aerospace demand could adversely affect debt service metrics and result in the company having substantial investment in inventory. Since the September 2006 acquisition, Wesco's revenues have exceeded plan and notably produced strong operating and gross margins (excluding amortization of inventory which was marked-to- market from the application of purchase accounting). However, free cash flow generation has been constricted by substantial re- investment in inventory levels. As the company's principal role is to take inventory positions in support of its aerospace OEM customers, its cash flow performance will be affected by its ability to manage that asset through the aerospace business cycle. Moody's notes that the scheduled first flight of the Boeing 787 has been delayed with delivery of the first 787s now expected to be in early 2009. However, Boeing has continued to push its suppliers (i.e. the bulk of Wesco's customers) for the earliest possible delivery of the first 50 shipsets for the 787. This has contributed to the recent inventory build and could give rise to further working capital related cash utilization in the near term. The combination of inventory management risks and ongoing financial leverage from its acquisition is expected to result in Wesco maintaining financial metrics representative of the B rating category. The positive outlook anticipates that aerospace fundamentals will continue to support robust demand for Wesco's services over the intermediate period, and, subject to the company's ability to astutely manage its margins and inventory risk, foster an environment conducive to further expansion in earnings and cash flow. In turn, this could result in reduced leverage metrics as well as improved interest and cash flow coverage measurements. In addition, Wesco maintains a good liquidity profile. There were no borrowings under its $75 million committed revolving credit at the end of December 2007. Ratings affirmed and updated LGD assessments: Wesco Aircraft Hardware Corp. -- Corporate Family, B2 -- Probability of Default, B2 -- 1st lien bank debt, B1 (LGD-3, 37%) -- 2nd lien loan, Caa1 (LGD-5. 88%) The last rating action was on Sept. 19, 2006 at which time Moody's implemented its Loss Given Default methodology. Initial ratings were assigned on Sept. 13, 2006. Wesco Aircraft Hardware Corp., headquartered in Valencia, California, is a leading provider of integrated "Just-in-Time" inventory management services focused on the distribution of aerospace components. Revenues in fiscal 2007 were slightly under $500 million. XIOM CORP: Dec. 31 Balance Sheet Upside-Down by $978,877 -------------------------------------------------------- XIOM Corp.'s consolidated balance sheet at Dec. 31, 2007, showed $1,262,527 in total assets, $1,571,005 in total liabilities, and $670,399 in common stock subject to rescission rights, resulting in a $978,877 total stockholders' deficit. At Dec. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $592,233 in total current assets available to pay $892,230 in total current liabilities. The company reported a net loss of $579,388 on sales of $309,379 for the first quarter ended Dec. 31, 2007, compared with a net loss of $328,449 on sales of $190,175 for the same period ended Dec. 31, 2006. The net loss increase of approximately $251,000 was directly related to the increase in general and administrative expenses, which included the value of additional stock option grants and the issuance of restricted common shares for some of the services provided to the company, all of which were primarily non-cash in nature. 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?2867 Going Concern As reported in the Troubled Company Reporter on Jan. 18, 2008, Michael T. Studer CPA P.C. in Freeport, New York, expressed substantial doubt about XIOM Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. Mr. Studer stated that the company has incurred losses for the years ended Sept. 30, 2007, and 2006, and has a deficiency in stockholders' equity at Sept. 30, 2007. About Xiom Corp. Xiom Corp. (OTC BB: XMCP.OB) -- http://xiom-corp.com/-- manufactures industrial based thermal spray coating systems in the United States. It offers XIOM 1000 Thermal Spray system, which is used to apply plastic powder coatings on steel, aluminum, and non- ferrous substrates, as well as on wood, plastic, masonry, and fiberglass. The XIOM 1000 Thermal Spray system is a portable on- site polymer coating equipment, which mixes plastic powder with air and flammable gases, and brings the mixture together through a gun with a flame nozzle where the powder material is melted and sprayed forward onto the surface to be coated. The company also offers plastic powders designed specifically for thermal spraying. XIOM Corp. sells its spray systems directly to commercial customers and coating contractors. The company was founded in 1998. It was formerly known as Panama Industries Ltd. and changed its name to XIOM Corp. in 2004. XIOM Corp. is headquartered in West Babylon, New York. * U.S. CMBS Rating Upgrades To Prevail in 2008, Moody's Reports --------------------------------------------------------------- Despite economic headwinds and declining property values, Moody's Investors Service says that US commercial mortgage-backed securities should see more rating upgrades than downgrades in 2008. The pace of downgrades should draw closer to that of upgrades, however, after being greatly outnumbered by them for several years. Some securities will be more vulnerable to any credit deterioration that does occur. For example, Moody's views securitizations of older vintages of loans as generally more likely to continue to outperform expectations than those of younger vintages, which were underwritten more aggressively. Moody's expects commercial real estate property values to decline over the next few years, perhaps by 15% to 20%, essentially reversing the gains of the last two years. A decline in property values could reduce the equity cushion some more recent loans have built up, increasing their leverage. Although several states are already experiencing economic slowdowns, their overall impact on commercial loan performance has been minimal so far, with rates of delinquency on loans continuing at their historically low levels of under 0.50%. Moody's expects delinquency rates to increase into the 1% to 2% range in 2008. "CMBS ratings are based on expected lifetime default rates, and the anticipated pattern is one in which the delinquencies that do occur are clustered due to either seasoning or market stress factors," says Managing Director Tad Philipp. "If the delinquency rate rises as expected into the 1%-2% range, this in itself would not cause us to revisit the assumptions underlying our methodology or trigger an unusually large number of downgrades." Moody's also notes that the percent of the loans in CMBS maturing over the next three years is relatively small, about 6% per year of the approximately $750 billion in CMBS outstanding, or about $45 billion per year. Balloon risk -- that is the risk that maturing debt won't be paid off -- therefore appears manageable. During the fourth quarter of 2007, Moody's took actions on 101 securitizations with 922 CMBS classes resulting in 750 affirmations and confirmations, 160 upgrades, and 12 downgrades. * Moody's Advises How to Secure Top Ratings For Muni Bond Insurers ------------------------------------------------------------------ In the wake of the increased volatility experienced by financial guarantors, municipal bond issuers can amend standby bond purchase agreements on insured variable rate debt obligations to avoid negative rating actions, according to the most recent in a series of reports by Moody's Investors Service on the implications for municipal issuers of financial guarantor downgrades. Recent Moody's downgrades of guarantors XL and FGIC to A3 were accompanied by the lowering of the short-term demand obligation ratings of all XL- and FGIC-backed insured VRDOs to speculative grade from VMIG 1. The short-term rating downgrades reflect provisions in the SBPA that are linked solely to the financial guarantors and that allow the banks providing the liquidity support to terminate or suspend the agreements after specific severe credit events or "triggers" involving the bond insurer. "To strengthen the ratings on its insured VRDOs, a municipal issuer can amend its SBPA so it doesn't rely exclusively on the credit quality of the financial guarantor but on its own credit strength in combination with that of the guarantor or by removing links to the financial guarantor altogether," said Moody's analyst Nick Samuels, author of the report. "Issuers rated at least A2 may be able to restore the highest VMIG 1 short-term rating or avoid negative rating actions even if the financial guarantor is downgraded." While Moody's long-term ratings represent the degree of risk associated with scheduled principal and interest payments, he said, short-term demand obligation ratings signal the amount of risk associated with bondholders' ability to receive full purchase price following an optional or mandatory tender. "The potential for downgrade-causing 'triggers' has escalated significantly, increasing the risk that the liquidity facility will terminate automatically without a final tender," said Samuels. "Higher-rated municipal issuers with public underlying ratings may be able to restore the highest short-term ratings or avoid negative rating actions should other financial guarantors be downgraded in the future." * S&P Slashes Ratings on 53 Tranches From Nine Cash Flows and CDOs ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 53 tranches from nine U.S. cash flow and hybrid collateralized debt obligation transactions. S&P removed 51 of the lowered ratings from CreditWatch with negative implications. Additionally, S&P affirmed its ratings on three classes and removed them from CreditWatch negative. The downgraded tranches have a total issuance amount of $3.379 billion. All of the affected transactions are mezzanine structured finance CDOs of asset-backed securities, which are CDOs of ABS collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other SF securities. These CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS securities. To date, including the CDO tranches listed below and including actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 1,848 tranches from 453 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 1,842 ratings from 550 transactions are currently on CreditWatch negative for the same reasons. In all, the affected CDO tranches represent an issuance amount of $340.797 billion. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Rating and CreditWatch Actions Rating Transaction Class To From Bering CDO I Ltd A-1J BBB+ AA+/Watch Neg Bering CDO I Ltd A-1S1 AAA AAA/Watch Neg Bering CDO I Ltd A-1S2 A+ AAA/Watch Neg Bering CDO I Ltd A-2 BB+ BBB+/Watch Neg Bering CDO I Ltd A-3 B+ BB/Watch Neg Bering CDO I Ltd B CC CCC-/Watch Neg BFC Genesee CDO Ltd A-1LA BBB+ AAA/Watch Neg BFC Genesee CDO Ltd A-1LB BBB+ AAA/Watch Neg BFC Genesee CDO Ltd A-2L BB+ AA/Watch Neg BFC Genesee CDO Ltd A-3L B+ BBB+/Watch Neg BFC Genesee CDO Ltd B-1L CCC BB-/Watch Neg Camber 5 Ltd A-2 A+ AAA/Watch Neg Camber 5 Ltd A-3 BBB AA/Watch Neg Camber 5 Ltd B BB+ BBB/Watch Neg Camber 5 Ltd C B+ BBB-/Watch Neg Camber 6 plc A-1 & A-2 A- AAA/Watch Neg Camber 6 plc B BBB- AAA/Watch Neg Camber 6 plc C BB AA-/Watch Neg Camber 6 plc Combo Nts BB A-/Watch Neg Camber 6 plc D B+ A-/Watch Neg Camber 6 plc E CCC BB/Watch Neg Camber 6 plc F CC B-/Watch Neg E*Trade ABS CDO IV Ltd. A-1B-2 AAA AAA/Watch Neg E*Trade ABS CDO IV Ltd. A-2 A+ AA+/Watch Neg E*Trade ABS CDO IV Ltd. B BB+ BBB-/Watch Neg E*Trade ABS CDO IV Ltd. C CCC- CCC-/Watch Neg Kefton CDO I Ltd II CCC- AA+/Watch Neg Kefton CDO I Ltd III CC A+/Watch Neg Kefton CDO I Ltd IV CC A-/Watch Neg Kefton CDO I Ltd V CC BBB-/Watch Neg Kefton CDO I Ltd VI CC B+/Watch Neg Kefton CDO I Ltd VII CC CCC+/Watch Neg Mulberry Street CDO II Ltd. A-1U BBB- AAA/Watch Neg Mulberry Street CDO II Ltd. A-2 CCC- AA/Watch Neg Mulberry Street CDO II Ltd. B-F CC BBB/Watch Neg Mulberry Street CDO II Ltd. B-V CC BBB/Watch Neg Mulberry Street CDO II Ltd. C CC BB/Watch Neg Norma CDO I Ltd. A-1 B- AAA/Watch Neg Norma CDO I Ltd. A-2 CCC- AA+/Watch Neg Norma CDO I Ltd. B CC A+/Watch Neg Norma CDO I Ltd. C CC A-/Watch Neg Norma CDO I Ltd. D CC BB+/Watch Neg Norma CDO I Ltd. E CC CCC+/Watch Neg Norma CDO I Ltd. F CC CCC/Watch Neg Norma CDO I Ltd. G CC CCC/Watch Neg Norma CDO I Ltd. H CC CCC-/Watch Neg Straits Global ABS CDO I Ltd A Combo BB+ BBB-/Watch Neg Straits Global ABS CDO I Ltd B Combo BB+ BBB-/Watch Neg Straits Global ABS CDO I Ltd B-1 BBB- A+/Watch Neg Straits Global ABS CDO I Ltd B-2 BBB- A+/Watch Neg Straits Global ABS CDO I Ltd C-1 B BBB-/Watch Neg Straits Global ABS CDO I Ltd C-2 B BBB-/Watch Neg Trinity CDO Ltd. A-3 A+ AA Trinity CDO Ltd. B BBB+ A- Trinity CDO Ltd. C-1 BB+ BBB/Watch Neg Trinity CDO Ltd. C-2 BB+ BBB/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Bering CDO I Ltd C CC Camber 5 Ltd A-1 AAA E*Trade ABS CDO IV Ltd. A-1A AAA E*Trade ABS CDO IV Ltd. A-1B-1 AAA E*Trade ABS CDO IV Ltd. D CC E*Trade ABS CDO IV Ltd. Pref Shrs CC Mulberry Street CDO II Ltd. A-1A AAA Mulberry Street CDO II Ltd. A-1B AAA Mulberry Street CDO II Ltd. A-1W AAA Straits Global ABS CDO I Ltd A-1 AAA Straits Global ABS CDO I Ltd A-2 AAA Trinity CDO Ltd. A-1 AAA Trinity CDO Ltd. A-2 AAA * S&P Cuts 468 Classes' Ratings From 216 NIMS on Radian Rating Cut ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 468 classes from 216 U.S. net interest margin securities (NIMS) transactions backed by U.S. subprime mortgage securities. S&P lowered 10 of these ratings because the classes were insured by Radian Insurance Inc., which Standard & Poor's recently downgraded to 'AA-/Watch Neg'. At the same time, S&P affirmed its ratings on 37 classes from U.S. NIMS transactions backed by U.S. subprime mortgage securities. The respective NIMS were structured from underlying subprime mortgage transactions issued in 2006. The primary source of payments to NIMS is the difference between the interest payments collected on the mortgages in the underlying transactions and the interest owed to the related RMBS, together with prepayment penalties and potential payments from derivative contracts. The current levels of delinquencies and losses occurring in the subprime mortgage market have significantly reduced the levels of excess interest available to some of the NIMS. Unlike the underlying securitization, a NIMS transaction does not benefit from or contain overcollateralization. The downgrades affect a total of 216 U.S. subprime RMBS NIMS transactions. The 468 downgraded classes have a current balance of $3.56 billion, which represents 93.58% of the approximately $3.81 billion currently outstanding in U.S. NIMS backed by U.S. subprime mortgage securities rated by Standard & Poor's in 2006. The original total balance of U.S. NIMS backed by all types of residential mortgage securities issued in the non-agency market in 2006 was more than $10.66 billion. Approximately 89.87% of the downgraded NIMS classes, as a percentage of the total $3.56 billion in downgraded NIMS securities, were rated 'BBB' or lower before these rating actions. The resulting ratings associated with the downgraded classes, as a percentage of the total $3.56 billion in downgraded securities, are: Rating Percentage ------ ---------- AA-/Watch Neg 6.29% B 1.17% CCC 24.93% CC 67.61% The 37 classes with affirmed ratings have a current balance of $0.24 billion, which represents 6.42% of the approximately $3.81 billion currently outstanding in U.S. NIMS backed by U.S. subprime mortgage securities rated by Standard & Poor's in 2006. Approximately 62.80% of the NIMS classes with affirmed ratings, as a percentage of the total $0.24 billion in affirmed NIMS securities, were rated 'BBB' or lower before these rating actions. The affirmed ratings on these classes, as a percentage of the total $0.24 billion in securities with affirmed ratings, are: Rating Percentage ------ ---------- AAA 37.12 A- 0.07 BBB 2.63 BBB- 15.93 BB 6.58 BB- 2.27 B+ 0.85 B 11.39 B- 6.91 CCC 16.25 NIMS are generally short-term instruments with average tenures of less than 36 months. For the NIMS that are currently outstanding, the average NIMS balances remaining, as a percentage of the initial NIMS balance, are: Issuance quarter Percentage ---------------- ---------- First-quarter 2006 38.37% Second-quarter 2006 42.06% Third-quarter 2006 49.45% Fourth-quarter 2006 53.07% Losses on the underlying U.S. subprime mortgage collateral and securities, and the timing of such losses, have a direct effect on the cash flows to the NIMS transactions. Once the overcollateralization level for an underlying transaction falls below its target, the excess spread available to the NIMS transaction is reduced or eliminated as the underlying transaction covers current and previous losses and rebuilds to its overcollateralization target. Impact On ABCP, SIVs, And CDOs Standard & Poor's has performed a global review of its rated asset-backed commercial paper (ABCP) conduits with exposure to these downgraded U.S. NIMS classes. S&P's review shows that this rating actions do not adversely affect the ratings on these ABCP conduits. Standard & Poor's has also completed a review of all the structured investment vehicle (SIV) and SIV-lite structures it rates with regard to exposure to the U.S. NIMS classes downgraded. In S&P's view, no rated SIV or SIV-lite structure has exposure to the affected U.S. NIMS classes, and therefore this rating actions do not adversely affect S&P's ratings on SIVs and SIV-lites. Standard & Poor's has also completed its global review of the collateralized debt obligation transactions it rates with regard to exposure to these downgraded U.S. NIMS classes. S&P's review shows that this rating actions will have no impact on the ratings on S&P's publicly rated CDO transactions. U.S. Subprime NIMS Surveillance Assumptions S&P evaluated a number of performance measures for each U.S. NIMS RMBS transaction. These performance measures included the amount and type of cash (excess interest, prepayment penalty fees, and cap payments) received from the underlying transaction(s); the rate at which the NIMS is repaying relative to original projections; whether or not the NIMS has incurred an actual interest shortfall; and the outstanding principal balance relative to the amount of cash being received from its underlying transaction(s). S&P also considered whether or not the overcollateralization of the underlying deal is at or below its target. S&P lowered its rating on a NIMS class to 'CC' if, in its view, the class had incurred an interest shortfall, the NIMS deal had not received any cash flows from the underlying deal, and the overcollateralization of the underlying deal was below its target. S&P also lowered ratings to 'CC' on principal-only classes that S&P expects to experience material shortfalls at maturity. S&P lowered its rating on a NIMS class to 'CCC' if, in its opinion, the outstanding class balance was small relative to the incoming cash flow. S&P lowered its rating on a NIMS class to 'B' if, in S&P's view, the class is currently projected to pay off in one year. S&P affirmed its rating on a NIMS class if its analysis indicated that the transaction was likely to pay in full in the near future. For bond-insured classes, S&P adjusted the ratings in line with the current rating on the insurer. For Radian Insurance Inc., the rating was recently lowered to 'AA-/Watch Neg', which resulted in the aforementioned downgrades of 10 classes. For Financial Security Assurance Inc., the current rating is 'AAA/Stable,' which resulted in the affirmation of S&P's 'AAA' ratings on three classes. Standard & Poor's will continue to monitor the performance of the underlying subprime RMBS transactions and the related NIMS. S&P regularly review its assumptions as new information becomes available, and S&P will continue to revise its assumptions, publish updates, and keep market participants informed of changes. * Cole Schotz Adds Five Bankruptcy Lawyers and One Associate ------------------------------------------------------------ Cole Schotz Meisel Forman & Leonard P.A. added five new members and one new associate effective March 1. Norman L. Pernick, J. Kate Stickles and Michael F. Bonkowski will practice in the firm's Wilmington office, while Irving E. Walker and Gary H. Leibowitz will practice in the firm's Baltimore office. David Dean is joining Cole Schotz as an associate and will also practice in the firm's Baltimore office. Messrs. Pernick, Walker, Leibowitz, Dean and Ms. Stickles, concentrate their practices in bankruptcy and all facets of corporate restructuring. Mr. Bonkowski's expertise is in complex business and corporate litigation in Delaware's Court of Chancery and elsewhere. All six attorneys were previously with Saul Ewing. "We are thrilled to have such an outstanding group of attorneys join Cole Schotz," Michael D. Sirota, co-managing shareholder of the firm and chairman of the bankruptcy & corporate restructuring department at Cole Schotz, said. "Norm Pernick and his colleagues have earned national reputations as premier restructuring lawyers and have worked on some of the most sophisticated and complex corporate bankruptcy cases in the Second, Third and Fourth Circuits." "This strategic expansion increases Cole Schotz's roster of full time restructuring lawyers to more than 20, uniquely situating the firm to provide its extensive expertise in several of the busiest restructuring venues in the country," Mr. Sirota added. "We are excited by the opportunities this creates for our clients, industry colleagues and the firm." The Bankruptcy & Corporate Restructuring Department of Cole Schotz is one of the New York metropolitan area's most active and sophisticated corporate restructuring practices, possessing the expertise to represent clients in any insolvency-related matter throughout the country. The Department has extensive experience in middle market Chapter 11 cases representing debtors, creditors' committees, equity holders, fiduciaries, acquiring entities and other parties with substantial interests in insolvency proceedings throughout the United States. "My colleagues and I are excited to be joining a well-respected, full-service, collegial firm like Cole Schotz," Mr. Pernick said. "The move is a perfect fit from a variety of business and cultural perspectives." Cole Schotz now possesses a unique status in the industry, with substantial, well-respected bankruptcy practitioners on the ground in the key corporate markets of New York, New Jersey, Wilmington and Baltimore. We believe this expansion will allow for the enhancement of Cole Schotz's existing middle market focus and will position the firm for additional opportunities as co-counsel and conflicts counsel in the largest insolvency proceedings." About Cole Schotz Cole Schotz -- http://www.coleschotz.com/-- is one of the largest law firms in the New Jersey/New York Metropolitan Area. The firm, which has offices in Bergen County, New Jersey, Midtown Manhattan, and now Wilmington and Baltimore, has a client base consisting of a wide array of private and public business enterprises, ranging from closely held to Fortune 500 companies. Cole Schotz features additional key expertise and depth in the areas of Litigation, Tax, Business, Corporate, Real Estate and Employment law. * Stephanie Wickouski Helms Drinker Biddle's Corporate Trust Team ----------------------------------------------------------------- Drinker Biddle & Reath LLP partner Stephanie Wickouski, Esq. will lead the nationally recognized Corporate Trust Team, which represents the interests of bondholders and corporate trustees in large-scale bond and structured finance transactions and defaults. Ms. Wickouski is partner-in-charge of Drinker Biddle's New York office and co-vice chair of the firm's Corporate Restructuring Practice Group. "We're proud to have Stephanie lead our Corporate Trust Team," said Andrew C. Kassner, chair of Drinker Biddle's Corporate Restructuring Practice Group and the firm's Executive Partner. "She is a nationally recognized authority in this area, which is a tremendous benefit to our clients." Wickouski and her colleagues have successfully represented clients in all types of workouts, insolvencies and bankruptcies and have built a national reputation for top-notch work in complex bond default and restructuring cases. Most recently, Wickouski represented the indenture trustees in default cases involving Atlas Air, Bally Total Fitness, FLYi Inc., Northwest Airlines, Inc. and Tower Automotive. "Clients rely on us to keep pace with the marketplace in an environment where the landscape is constantly changing," said Wickouski. "In particular, our team has represented trustees in nearly all large industries including airlines, retail, health care and manufacturing." Wickouski has more than 27 years of experience in complex reorganization cases before federal bankruptcy courts throughout the country. In 2006, she was named one of the 12 Outstanding Restructuring Lawyers in the United States by Turnarounds & Workouts. She is also the author of Bankruptcy Crimes, now in its third edition, which has been acclaimed by members of the bench and bar as well as law professors nationwide as the leading authoritative treatise on the subject of bankruptcy fraud. Drinker Biddle's Corporate Trust Team includes partner Jeffrey M. Schwartz and counsels Mark S. Melickian and Steven M. Wagner in Chicago, partners Andrew C. Kassner and Warren T. Pratt in Wilmington, Delaware, partner Robert K. Malone in Florham Park, N.J., and partner Kristin K. Going in Washington, D.C. Drinker Biddle & Reath LLP -- http://www.drinkerbiddle.com/-- a national law firm with more than 660 lawyers in 12 offices, concentrates on providing clients with the best possible service in areas such as corporate and securities, commercial litigation, communications litigation, products liability and mass tort litigation, intellectual property, health care, HR law, real estate, corporate restructuring, government and regulatory affairs, environmental, insurance, investment management and private client services. * Wilkerson and Associates Opens New Online Resource for Clients ---------------------------------------------------------------- Wilkerson and Associates disclosed the launch of its new online resource -- http://www.wilkersons.com/ Whether downsizing a larger operation, going out of business or retiring -- http://www.wilkersons.com/salestypes/default.aspx-- Wilkerson and Associates offers the jewelry industry a number of resources that assist owners in making a successful transition out of the jewelry business. Thirty Years of Experience "Wilkerson and Associates offers our clients customized, turn-key plans based on more than 30 years experience in the jewelry industry and over 5,000 sales," Bobby Wilkerson, president and founder of Wilkerson and Associates, explained. "We care about the future well-being of each of our clients and take a very hands-on approach to the services we provide." Wilkerson's approach -- http://www.wilkersons.com/ourstrategy/-- to liquidating a jewelry business includes an in-house suite of services including advertising, marketing, analytics, merchandising and information technology services. Most of Wilkerson's consultants have been store owners and they have been trained in Wilkerson's unique promotional sales model. Wilkerson consultants -- http://www.wilkersons.com/faq/default.aspx-- live throughout the United States, and the company always takes care to assign a consultant with deep knowledge of a given region and type of market. Free Sales Consultations The new site also provides information on Wilkerson's free custom sales consultations -- http://www.wilkersons.com/salesconsult/ "These consultations begin our evaluation and analysis of a business' worth and are an important first step in accurately predicting how effective a sale can be for the owner," Mr. Wilkerson added. Results Speak for Themselves During a 60 day sale, Wilkerson clients typically average over 1.2 years of income and average $1.21 on the cost dollar for their assets, around 50% more than owners could expect by running the sale themselves -- http://www.wilkersons.com/results/default.aspx Key to Wilkerson's success is their analysis of a jewelry store owner's business related assets including inventory, fixtures, location, brand identity, customer list and furniture. Wilkerson's full service approach enables the Wilkerson team to assist an owner with all aspects of a sale from initial research and planning to even helping store employees locate new employment opportunities. To contact Wilkerson and Associates: Mr. Paul Flanagan of Wilkerson and Associates, Tel: 1-800-631-1999, pflanagan@Wilkersons.com About Wilkerson and Associates Headquartered in Stuttgart, Arkansas, Wilkerson and Associates -- http://www.wilkersons.com/-- is a national jewelry liquidator in the United States. Full-service and family-owned the company has worked with some of the oldest jewelry stores in the U.S. and even Elvis Presley's personal jeweler. Wilkerson has been in the retail jewelry business for over 40 years while helping other jewelers sell jewelry through closing and relocation sales for the last 30 years. The company provides expert services to help other jewelers sell jewelry that other broad liquidator companies simply cannot. * Home Foreclosures Rise 90% in January Compared to Last Year ------------------------------------------------------------- Bloomberg News reports that home prices sharply declined at the end of last year and foreclosures of property almost doubled in January, which indicates that the housing market slump has not yet seen bottom. According to Bloomberg, home prices had their largest fourth- quarter decrease since 1991, citing the Office of Federal Housing Enterprise Oversight. The S&P/Case-Shiller home-price index revealed that home prices in twenty metropolitan areas in the U.S. fell the most on record, Bloomberg says. Repossessions rose 90% to 45,327 in January from the same period in 2006, Bloomberg says, quoting RealtyTrac Inc., a seller of foreclosure statistics. Total foreclosure filings in January, which include default and auction notices as well as bank seizures, increased 57%, RealtyTrac said. All 20 metropolitan areas with the greatest price declines in 2007 were in those four states, according to the Office of Federal Housing Enterprise Oversight. The top three were in California: Merced (19%), Modesto (15.5%), and Stockton (15.3%), Ofheo said. Bloomberg adds that more than 233,000 properties were in default or foreclosure last month. Total filings increased 8% in January from December. * White House Criticizes Proposed Bill on Foreclosure Prevention ---------------------------------------------------------------- Reuters reports that a proposed Senate bill, which would permit bankruptcy judges to condone mortgage debt as well as provide billions of dollars to rehabilitate abandoned properties, was criticized by the White House on Tuesday. The White House described the proposed measure as a bailout for lenders and speculators that would most probaby draw a presidential veto. The White House, according to Reuters, said the cost was prohibitive and would not directly benefit distressed borrowers. The "Foreclosure Prevention Act of 2008" is sponsored by Senate Majority Leader Harry Reid, a Nevada Democrat. President George W. Bush supports a plan which will allow local housing agencies refinance distressed loans with tax-exempt bonds. According to the Associated Press, the White House said that the proposed bill would allow homeowers to effectively rewrite their mortgage contracts, leading lenders to tighten their credit standards and increase interest rates, and that in fact the provisions of the proposed legislation would work against the recovery of the housing industry. * Lenders Tightening Access to Home Equity Lines of Credit ---------------------------------------------------------- The Washington Post reports that several of the country's largest lenders, including some of the smaller ones, have started tightening screws on homeowners' access to equity lines of credit in areas where property values have been declining. According to Washington Post's Dina ElBoghdacy, Countrywide Financial, the nation's biggest mortgage lender, suspended the home equity line of credit of 122,000 customers last month after a review of the customers' property values and outstanding loan balances. USAA Federal Savings Bank has frozen or lowered credit lines for 15,000 of its customers. Because home prices have dropped in many parts of the country, lenders are afraid that they may not be able to collect on the equity loans extended to their customers. Contra Costa Times adds that nationwide, according to Inside Mortgage Finance, homeowners borrowed $355 billion worth of home equity loans and lines of credit in 2007, down from $430 billion in 2006. * FDIC Lures Retirees to Help Sort Out Upcoming Bank Failures ------------------------------------------------------------- The Federal Deposit Insurance Corporation is luring back 25 of its retirees to beef up its capacity in handling financial institution failures for the next two years, Damian Paletta at The Wall Street Journal reports. The FDIC is also intent in employing a firm who will handle assets and mortgages over at troubled banks, WSJ says, citing a newspaper advertisement. Sundays ads stated that the FDIC needs companies which are willing to service mortgages and different types of loans. According to its Web site, the FDIC called out people with "skill in performing duties associated with a financial-institution closing, such as receivership management, resolutions and/or asset disposition; knowledge of the resolutions process as it relates to complex financial institutions," relates WSJ. The move comes as regulators are closely monitoring troubled financial institutions in light of the crisis in the credit and mortgage markets. A Washington analyst informed WSJ that these regulators are expecting over 100 bank failures within the next two years. Andrew Gray, FDIC representative, told WSJ the move was for "preparedness purposes." Former FDIC Chairman William Isaac also told WSJ, "The notion of bringing back some people who have been through it before is very smart." About the FDIC The Federal Deposit Insurance Corporation -- http://www.fdic.gov/ -- preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $100,000; by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails. The FDIC receives no Congressional appropriations -- it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities. With an insurance fund totaling more than $49 billion, the FDIC insures more than $3 trillion of deposits in U.S. banks and thrifts -- deposits in virtually every bank and thrift in the country. Savings, checking and other deposit accounts, when combined, are generally insured to $100,000 per depositor in each bank or thrift the FDIC insures. Deposits held in different categories of ownership -- such as single or joint accounts -- may be separately insured. Also, the FDIC generally provides separate coverage for retirement accounts, such as individual retirement accounts (IRAs) and Keoghs, insured up to $250,000. The FDIC's Electronic Deposit Insurance Estimator can help people determine if they have adequate deposit insurance for their accounts. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Feb. 27, 2008 BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Contact: 240-629-3300; http://www.beardaudioconferences.com Feb. 28, 2008 BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Contact: 240-629-3300; http://www.beardaudioconferences.com Mar. 6-8, 2008 ALI-ABA Fundamentals of Bankruptcy Law Mandalay Bay Resort, Las Vegas, Nevada Contact: http://www.ali-aba.org/ Mar. 8-10, 2008 AMERICAN BANKRUPTCY INSTITUTE Conrad Duberstein Moot Court Competition St. John's University School of Law, New York Contact: http://www.abiworld.org/ Mar. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Rick Cieri of Kirkland & Ellis Jamie Sprayregan of Goldman Sachs Bankers Club of Miami, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Mar. 25, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dearfoam Slipper Turnaround Centre Club, Tampa, Florida Contact: 561-882-1331 or http://www.turnaround.org/ Mar. 25-29, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Ritz Carlton Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Mar. 27-30, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Bankruptcy Litigation Seminar II Las Vegas, Nevada Contact: http://www.nortoninstitutes.org/ Apr. 3, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION Annual Spring Luncheon Renaissance Hotel, Washington, District of Columbia Contact: 703-449-1316 or www.iwirc.org Apr. 3, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - East The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 3-6, 2008 AMERICAN BANKRUPTCY INSTITUTE 26th Annual Spring Meeting The Renaissance, Washington, District of Columbia Contact: http://www.abiworld.org/ Apr. 7-8, 2008 PRACTISING LAW INSTITUTE 30th Annual Current Developments in Bankruptcy & Reorganization PLI Center New York, New York Contact: http://www.pli.edu/ Apr. 10-11, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Ninth Annual Conference on Healthcare -24-24Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Apr. 25-27, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Spring Seminar Eldorado Hotel & Spa, Santa Fe, New Mexico Contact: http://www.nabt.com/ Apr. 29, 2008 TURNAROUND MANAGEMENT ASSOCIATION Why Prospects Become Clients Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// May 1-2, 2008 TURNAROUND MANAGEMENT ASSOCIATION 2nd Annual Credit & Bankruptcy Symposium Foxwoods Resort Casino, Ledyard, Connecticut Contact: http://www.turnaround.org// May 1-2, 2008 AMERICAN BANKRUPTCY INSTITUTE Debt Symposium Hilton Garden Inn, Champagne/Urbana, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ May 9, 2008 AMERICAN BANKRUPTCY INSTITUTE Nuts and Bolts for Young Practitioners - NYC Alexander Hamilton U.S. Custom House, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 12, 2008 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Hotel & Conference Center, New York Contact: 1-703-739-0800; http://www.abiworld.org/ May 12-13, 2008 PRACTISING LAW INSTITUTE 30th Annual Current Developments in Bankruptcy & Reorganization PLI Center San Francisco, California Contact: http://www.pli.edu/ May 13-16, 2008 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, Louisiana Contact: 1-703-739-0800; http://www.abiworld.org/ May 15-16, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ May 18-20, 2008 INTERNATIONAL BAR ASSOCIATION 14th Annual Global Insolvency & Restructuring Conference Stockholm, Sweden Contact: http://www.ibanet.org/ May 21, 2008 TURNAROUND MANAGEMENT ASSOCIATION What Happened to My Money - The Restructuring of a Loan Servicer Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference J.W. Marriott Spa and Resort, Las Vegas, Nevada Contact: http://www.airacira.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: http://www.abiworld.org/ June 19 & 20, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Corporate Reorganizations Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ June 24, 2008 TURNAROUND MANAGEMENT ASSOCIATION Fraud Panel Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ June 26-29, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Seminar Jackson Hole, Wyoming Contact: http://www.nortoninstitutes.org/ July 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Cynthia Jackson of Smith Hulsey & Busey University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ July 10-13, 2008 AMERICAN BANKRUPTCY INSTITUTE 16th Annual Northeast Bankruptcy Conference Ocean Edge Resort Brewster, Massachussets Contact: http://www.abiworld.org/events July 29, 2008 TURNAROUND MANAGEMENT ASSOCIATION Employment Issues Following Hurricanes & Disasters Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ July 31 - Aug. 2, 2008 AMERICAN BANKRUPTCY INSTITUTE 4th Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Aug. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Do's and Don'ts of Investing in a Turnaround Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 17, 2008 TURNAROUND MANAGEMENT ASSOCIATION Real Estate / Condo Restructuring Panel Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Sept. 30, 2008 TURNAROUND MANAGEMENT ASSOCIATION Private Equity Panel Centre Club, Tampa, Florida Contact: http://www.turnaround.org// Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Beard Conferences presents: April 10-11, 2008 Ninth Annual Conference on Healthcare Transactions Successful Strategies for Mergers, Acquisitions, Divestitures and Restructurings The Millennium Knickerbocker Hotel, Chicago, Illinois Brochure available soon! May 15-16, 2008 Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Brochure available soon! * * * Beard Audio Conferences presents: Feb. 27, 2008 Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Speaker: Thomas J. Salerno For more information, visit: http://www.beardaudioconferences.com/bin/conference_details?code=B R-046 * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Joseph Medel C. Martirez, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Philline P. Reluya, Shimero R. Jainga, Joel Anthony G. Lopez, Tara Marie A. Martin, Melanie C. Pador, Ronald C. Sy, Cecil R. Villacampa, Ma. Cristina I. Canson, Christopher G. Patalinghug, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***