T R O U B L E D C O M P A N Y R E P O R T E R Friday, February 29, 2008, Vol. 12, No. 51 Headlines ACANDS INC: Trustee Opposes Plan; Wants Claims Release Justified ACANTO SADDLEBACK: Sec. 341(a) Creditors Meeting Set for March 3 ACCEPTANCE INSURANCE: Can File Chapter 11 Plan Until May 30 AIRWAY MOVING: Case Summary & 20 Largest Unsecured Creditors ALANCO TECH: Posts $2,005,800 Net Loss in 2nd Qtr. Ended Dec. 31 AMERICAN MEDIA: Dec. 31 Balance Sheet Upside-Down by $369.0 Mil. AMERICAN STANDARD: Expects to File for Chapter 11 Protection ATLANTIS PLASTICS: S&P Ratings Tumbles to 'D' on Covenant Defaults AVANTAIR INC: Dec. 31 Balance Sheet Upside-Down by $22.3 Million AVENTINE RENEWABLE: Liquidity Issues Incite Failed Auctions AVENTINE RENEWABLE: Earns $3.2 Mil. For Fourth Qtr. Ended Dec. 31 AVENTINE RENEWABLE: Moody's Lowers SGL Rating on Failed Auctions BALLY TOTAL: Reaches Settlement with SEC After Fraud Allegations BELDEN INC: Board Appoints Judy Brown as Director CALPINE CORP: Inks Geothermal Purchase Agreement With PG&E CATHOLIC CHURCH: Objection Deadline on Calkin Retention is March 3 CATHOLIC CHURCH: Century Balks at Davenport's Disclosure Statement CATHOLIC CHURCH: Regina High Opposes Davenport's Bankruptcy Plan CATHOLIC CHURCH: Portland's Bankruptcy Reopened by Judge Perris CATHOLIC CHURCH: Spokane's Ranch Faces Suit Filed by Ex-Residents CATHOLIC CHURCH: Tuscon Can Distribute $1 Million For Tort Claims CENTRAL IOWA: McGladrey & Pullen Expresses Going Concern Doubt CHRYSLER LLC: Idles Plant in Ontario Due to TRW's Workers Strike CHRYSLER LLC: Plastech to Continue Sending Supplies Until March 3 CITICORP MORTGAGE: Fitch Rates $1.392MM Class B-4 Certs. at BB CLOROX COMPANY: Prices $500 Million Offering of 5% Senior Notes COLTRANE CLO: Fitch Cuts Ratings to "CC" on 4 Classes of Notes COMMODORE CDO: Moody's Reviews Junk Rating on $17.5 Million Notes COMMUNITY HEALTH: Posts $88MM Net Loss in Qtr. Ended December 31 CORNERSTONE MINISTRIES: Wants Scroggins & Williamson as Counsel CORNERSTONE MINISTRIES: Wants Miller & Martin as Outside Counsel CORNERSTONE MINISTRIES: Wants eNable Business as Financial Advisor CORNERSTONE MINISTRIES: Schedules Filing Period Moved to March 11 CRDENTIA CORP: Completes $10 Million Long Term Debt Financing CREDIT-SUISSE: Fitch Cuts Rating on $500,000 Cl. B-3 Certs. to BB CREDIT SUISSE: Fitch Chips Ratings on $113.2 Million Certificates DEALMAKER DEVELOPMENTS: Voluntary Chapter 11 Case Summary DELPHI CORP: Shareholder Settlement Hearing Set for April 29 DILLARD'S INC: S&P Supersedes Outlook From Stable to Negative DIRECTV GROUP: Stake Swap Results in Two Board Seats for Liberty DIRECTV GROUP: FCC Sees Liberty Media Deal to Benefit Public EQUIFIRST MORTGAGE: Class B-2 Cert. Gets S&P's Junk Rating From BB FAIRPOINT COMMS: S&P Lifts Rating to 'BB' on Merger With Verizon FAIRPOINT COMMS: Proposed Merger Approval Cues Moody's 'B1' Rating FIDELITY NATIONAL: Earns $108 Mil. in Quarter ended December 31 FINLAY ENTERPRISES: Deal with NRDC Ends Over Fortunoff Sale FIRST NLC: Adverse Pool Performance Spurs S&P's Rating Downgrades FORTUNOFF: Asset Sale Causes Termination of Finlay-NRDC Agreement FORTUNOFF: Highest Bid Awarded to NRDC Equity's H Acquisition FREESTAR TECH: Posts $4,568,270 Net Loss in 2nd Qtr. Ended Dec. 31 GARTECH ELECTRICAL: Case Summary & 59 Largest Unsecured Creditors GENERAL MOTORS: Idles Assembly Plant Due to AAM Workers' Strike GENERAL MOTORS: Supplier's Workers Strike Won't Affect S&P Rating GLOBAL SIGNAL: Fitch Holds 'BB+' Rating on $122.4MM Class F Certs. GLOBAL SIGNAL: Fitch Holds 'BB-' Rating on $3.8MM Class G Certs. IDEARC INC: CEO John Mueller Steps Down After 10 Days of Service IMPLANT SCIENCES: Posts $4,815,000 Net Loss in Qtr. Ended Dec. 31 IPS CORP: Moody's Changes Outlook to Negative; Holds 'B2' Ratings IRVINE SENSORS: Posts $3.7 Million Net Loss in Qtr. Ended Dec. 30 IXIS REAL: S&P Slashes Five Classes' Ratings on Weak Performance JAMES LULL: Debt from "Ponzi Scheme" May Have Reached $50 Million KEFTON CDO: Moody's Junks Rating on Up To $67 Mil. Notes From 'A3' KELLWOOD CO: S&P Chips Rating to B+ After Sun Capital Tender Offer LASALLE COMM: Increased Loss Expectations Cue Fitch to Cut Ratings LENNAR CORP: Receives Purchase Offer from UAE Group, Report Says LIBERTY MEDIA: Gains 41% Interest in DirecTV After Swap LIBERTY MEDIA: FCC Sees DirecTV Group Deal to Benefit Public LILLIAN VERNON: Has Interim Authority to Tap $8.5MM DIP Financing LONGPORT FUNDING: Six Classes of Notes Get Moody's Junk Ratings LOUISIANA-PACIFIC CORP: Moody's Chips Senior Debt Rating to ' Ba2' MASTR ASSET: Class M-9 and Class M-10 Gets S&P's Rating Downgrades MCCALL CITY: Council Passes Resolution Allowing Bankruptcy Filing MEDICOR LTD: Court Approves $7 Million DIP Financing MEDICOR LTD: Wants Until May 26 to File Chapter 11 Plan MIIX INSURANCE: Court Wants Creditors to Appear at April 9 Hearing MILACRON INC: Dec. 31 Balance Sheet Upside-Down by $51.1 Million MORGAN STANLEY: Fitch Holds Junk Rating on $5.3MM Class M Certs. MORGAN STANLEY: Moody's Pares Ratings on 47 Tranches From 14 Deals MSGI SECURITY: Dec. 31 Balance Sheet Upside-Down by $4,245 NATIONWIDE HEALTH: Fitch Affirms 'BB+' Rating on Preferred Stock NEUMANN HOMES: Court Extends Exclusive Plan Filing Periods NEW CENTURY: Moody's Cuts Ratings on Five Tranches From Two Deals NORTEL NETWORKS: Posts $844 Mil. Net Loss in Fourth Quarter 2007 OFF PRICE: Chapter 7 Filing and Store Closures Hurt Customers ONEIDA LTD: Selling Business in Australia to McPherson's Limited OVERSEAS SHIPHOLDING: Net Income Drops at $21.2MM For 4th Qtr. OVERSEAS SHIPHOLDING: S&P Ratings Unaffected By Net Profit Decline PACIFIC PINNACLE: Moody's Junks Ratings on Five Classes of Notes PAMPELONNE CDO: Moody's Junks Rating on $50 Mil. Notes From 'Ba1' PELOTON PARTNERS: Liquidates $2 Billion ABS Fund PHARMED GROUP: Wants Exclusive Plan Filing Period Extended PHARMED GROUP: Taps Jonathan Green as Special Tax Counsel PINNACLE PEAK: Moody's Junks Rating on $140 Mil. Notes From 'Aaa' PLASTECH ENGINEERED: Court Extends DIP Financing Until March 3 PLASTECH ENGINEERED: Agrees to Supply Chrysler Until March 3 POPE & TALBOT: Has Interim OK to Obtain DIP Loan; Monitor Comments POPE & TALBOT: Court Fixes Claims Bar Date at April 3 PRB ENERGY: Defaults Obligations Under Senior Secured Debentures QUIGLEY COMPANY: Posts $7.2 Million Net Loss in Year Ended Dec. 31 SCHUYLER GUEST: Case Summary & 17 Largest Unsecured Creditors SCOTTISH RE: A.M. Best Chips Issuer Credit Rating to bb from bbb- SEVERNA PARK: Case Summary & 17 Largest Unsecured Creditors SHARPER IMAGE: Asks Court to Extend Schedules Filing Deadline to SHARPER IMAGE: Court Grants Request to Pay Vendor Obligations SHILOH'S INDUSTRIES: Moody's Holds Ba3 Rating With Stable Outlook SIRVA INC: Obtains Additional $10 Million DIP Loan; Panel Objects SOLIDUS NETWORKS: Auction of Three Non-Core Businesses Adjourned SPRINT NEXTEL: Reports $29.5 Billion Net Loss in 4th Quarter 2007 SPRINT NEXTEL: Expected Bad Fin'l Results Cue Fitch to Cut Ratings SPRINT NEXTEL: Moody's Give Negative Outlook on Weak Operations SPRINT NEXTEL: Losses Cues S&P to Put Ratings on Negative Watch SOLIDUS NETWORKS: No Qualified Offers Obtained to Buy Core Assets SOLIDUS NETWORKS: Whorl LLC Balks at Asset Sale and DIP Financing SOLUTIA INC: Gets Exit Financing; Emerges From Ch. 11 Protection SOLUTIA INC: Judge Beatty OKs Bank of New York Settlement Pact SOLUTIA INC: Court Approves Bayer & Lanxess Claims Settlement SOLUTIA INC: Court Approves Quinn Emanuel as Conflicts Counsel SPOTTED DOG: Case Summary & 20 Largest Unsecured Creditors ST MARY LAND: Inks $42 Million Oil and Gas Assets Acquisition Deal STONE ENERGY: Earns $65 Million in Quarter ended December 31 SUMMERWIND INVESTORS: Voluntary Chapter 11 Case Summary TEMBEC INC: Ontario Court Approves Plan of Arrangement under CBCA TRAILER BRIDGE: Moody's Gives Negative Outlook; Keeps All Ratings TRW AUTOMOTIVE: CAW Workers Rally at Windsor Plant in Ontario URS CORP: Earns $132 Million in Fiscal Year Ended December 28 USG CORP: Weak Fin'l Performance Cues Moody's Rating Cuts to 'Ba2' VALENCE TECH: Inks Agreement to Sell $1 Million Common Shares VALLE GRANDE: Case Summary & Three Largest Unsecured Creditors VALLEJO CITY: Reaches Tentative Deal with Labor Unions WELLS FARGO: Fitch Rates $1.35 Million Class B-5 Certificates at B WICKES FURNITURE: Liquidation Sale of All Stores Starts Tomorrow WOLVERINE TUBE: Credit & Receivables Sales Facilities Amended WOODCOCK ESTATE: Case Summary & 20 Largest Unsecured Creditors YOUR RV WIZARD: Voluntary Chapter 11 Case Summary ZALE CORP: Reduces Staffing on New Operational Efficiency Program * S&P Says 418 ABS Ratings Affected by Bond Insurer Rating Actions * S&P Downgrades 85 Tranches' Ratings From 16 Cash Flows and CDOs * Ropes & Gray Opens Chicago Office and Welcomes Three Partners * BOOK REVIEW: Inside Investment Banking: Second Edition ********* ACANDS INC: Trustee Opposes Plan; Wants Claims Release Justified ---------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, objects to ACandS, Inc.'s Second Amended Chapter 11 Plan of Reorganization, saying that the company should justify the proposed release of claims belonging to certain third-party claimants. The Amended Plan provides for the issuance of injunctions under Section 524(g) of the U.S. Bankruptcy Code that result in channeling of certain asbestos-related liabilities of the Debtor into a trust. The Debtor said that its $449,000,000 insurance claim against Travelers Casualty and Surety Company is its most valuable asset. The Debtor also said that a Trust will be created which will (i) possess the status and features of a "qualified settlement fund" for the purposes of Section 468B of the Internal Revenue Code, (ii) assume the Debtor's liabilities with respect to all Asbestos Personal Injury Claims, and (iii) use Trust Assets and income to pay Asbestos Personal Injury Claims, as provided in the Plan and Trust Documents. The U.S. Trustee said in court documents that with respect to proposed claims release, there appears to be no evidence or basis for releasing widespread claims against certain parties and other entities including, as defined in the Debtor's Plan, officers, counsel, bankers, advisors, or agents of the Debtor. To the extent that the Debtors are requesting a non-consensual release of third-party claims, the U.S. Trustee says, the Debtor must establish the legal and factual bases for that request. The U.S. Trustee reminds the U.S. Bankruptcy Court for the District of Delaware that she reserves the right to cross-examine any witnesses whose testimony is offered by the Debtor in support of these provisions and to take a position on the propriety of the releases at the confirmation hearing based upon the record. As reported in the Troubled Company Reporter on Feb. 22, 2008, Owens-Illinois Inc., a creditor of ACandS Inc., objected to the Plan, arguing that a trust created under the plan has "overly broad powers". About AcandS Inc. Based in Lancaster, Pennsylvania, ACandS Inc. was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The company filed for chapter 11 protection on Sept. 16, 2002 (Bankr. Del. Case No. 02- 12687). Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl & Jones, P.C., represent the Debtor in its restructuring efforts. Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. At Dec. 31, 2006, the Debtor disclosed that it had book assets of approximately $11.78 million and book liabilities, including liabilities for the payment of asbestos-related and other claims of $11.78 million. At June 30, 2007, net book assets before liabilities for asbestos-related and other claims was approximately $9,010,000. The Court set April 21, 2008 to consider confirmation of the Debtor's Second Amended Chapter 11 Plan of Reorganization. ACANTO SADDLEBACK: Sec. 341(a) Creditors Meeting Set for March 3 ---------------------------------------------------------------- The United States Trustee for Region 16 will convene a meeting of creditors in Acanto Saddleback Homes LLC's chapter 11 case, on March 3, 2008, at 10:00 a.m., at 411 West Fourt Street, Room 1-159 in Santa Ana, California. 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 Newport Beach, California, Acanto Saddleback Homes, LLC -- is a housing community. The company filed for chapter 11 on Jan. 30, 2008 (Bank.C.D.Ca. Case No. 08-10426). Robert P. Goe, Esq., at Goe & Forthsythe, LLP represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $10 million to $50 million and estimated debts of $1 million to $10 million. ACCEPTANCE INSURANCE: Can File Chapter 11 Plan Until May 30 ----------------------------------------------------------- The United States Bankruptcy Court for the District of Nebraska extended Acceptance Insurance Companies Inc. and its debtor- affiliates' exclusive period to file a Chapter 11 plan until May 30, 2008, Bloomberg News reports. The Court also extended the exclusive right to solicit acceptances of that plan until July 30, 2008. As reported in the Troubled Company Reporter on Feb. 5, 2008, the Debtors told the Court that they need sufficient time to negotiate and propose a Chapter 11 plan of reorganization and to rehabilitate their business. The Debtors related that the Official Committee of Unsecured Creditors has retained StoneRidge Advisors LLC to assist the Committee, as well the Debtors, with transactions that may form the basis of a plan. John J. Jolley, Jr., Esq., at Kutak Rock LLP in Omaha, Nebraska, said that the Debtors have yet to resolve Granite Reinsurance Ltd.'s $10 million claim against the Debtors, which is pending before the Bankruptcy Appellate Panel for the Eighth Circuit Court of Appeals. About Acceptance Insurance Headquartered in Council Bluffs, Iowa, Acceptance Insurance Companies Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurance company that accounts for substantially all of the business operations and assets of the corporate groups. The company filed for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case No. 05-80059). The Debtor's affiliates -- Acceptance Insurance Services Inc. and American Agrisurance Inc. -- each filed chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and 05-80058) on Jan. 7, 2005. John J. Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its restructuring efforts. Lawyers at McGrath North Mullin & Kratz, PC LLO represent the the Official Committee of Unsecured Creditors in Acceptance Insurance's case. As of December 2007, the Debtor listed $36,326,172 in total assets and $138,187,943 in total debts. AIRWAY MOVING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Airway Moving & Storage, Inc. dba Airway Moving Systems, Inc. dba Airway Moving & Storage of Georgia, Inc. dba Nu-Jax P.O. Box 13009 New Bern, NC 28561-3009 Bankruptcy Case No.: 08-01282 Type of Business: The Debtor is a moving company. Chapter 11 Petition Date: February 27, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: Trawick H. Stubbs, Jr. (efile@stubbsperdue.com) Stubbs & Perdue, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: (252) 633-2700 Fax: (252) 633-9600 http://www.stubbsperdue.com/ 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 ------ --------------- ------------ Gran Alley Co., Inc. N.C. 106-6 $129,232 Attention: Manager or Agent N.C. 104-6 P.O. Box 773 N.C. 107-6 Goldsboro, NC 27530 Charles McEachern $125,000 The Gables at Wolfcreek 5228 Forsyth Road, Suite 275 Macon, GA 31210 Community Yellow Pages N.B.K. 06, N.B.K. 07 $13,513 Attention: Manager or Agent P.O. Box 10629 Goldsboro, NC 27532 Fisher Oil Co. $9,000 City of New Bern Tax $8,497 Shoppe of Crafts $8,212 Security Moving $6,523 Craven Co. Tax Collector $5,988 Eagle Transportation $3,670 White Directory Publisher $3,560 Trans Guard General Agency $2,525 Bell South $2,309 Embarq $1,532 D.E.X. $1,464 Industrial Truck $1,419 Stewart Equipment $1,404 East Carolina Forklifts $1,169 Mover Specialty Service, Inc. $1,070 Employment Security Committee $981 Wayne's Service Center $853 ALANCO TECH: Posts $2,005,800 Net Loss in 2nd Qtr. Ended Dec. 31 ---------------------------------------------------------------- Alanco Technologies Inc. reported a net loss of $2,005,800 for the second quarter ended Dec. 31, 2007, an increase of $1,365,400, compared to the prior year period loss of $640,400. Sales for its second quarter ended Dec. 31, 2007, were $3,770,200, a decrease of $1,820,900, compared to sales of $5,591,100 for the same period of the prior year. The company's Data Storage segment (Excel Meridian Data Inc.) reported decreased sales of $917,200 due to an unusually large $945,000 sale recorded in the prior year second quarter that was not duplicated in the current quarter. The company's Wireless Asset Management segment (StarTrak Systems) reported a sales decrease of $814,800 due to its inability to replace a contract with a large volume customer that significantly increased hardware sales in the prior year second quarter. StarTrak's sales shortfall was further impacted by delays in its new "Sentry" product introduction targeted at the refrigerated truck/trailer market that had been planned for the current quarter. Approximately 50% of the increase in net loss resulted from a decrease in gross profit. The balance of the increased loss was due to increased StarTrak SG&A expenses incurred to accelerate and complete commercialization of the new Sentry product line and increased corporate expenses in the quarter due to a one-time $300,000 insurance settlement recorded in the prior year. Robert R. Kauffman, Alanco chairman and chief executive officer, commented, "The first half performance was obviously unacceptable, and management responded with an aggressive corporate-wide SG&A expense reduction program and a reorganization of StarTrak's technical staff to focus on the critical Sentry truck/trailer product commercialization project. These efforts led to an approximate $250,000 per quarter reduction in the company's SG&A expenses and the successful introduction of the Sentry product line in November/December, 2007." "Currently, midway into our third quarter, each of our three operating subsidiaries is on track to contribute to a significant narrowing of our total company operating loss in the current quarter, ending March 31, and realistic expectation of a complete operating turnaround and positive EBITDA in the final quarter ending June 30, 2008." Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $28,791,900 in total assets, $11,797,200 in total liabilities, $856,700 in Series B preferred stock, and $16,138,000 in total shareholders' 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?2892 Going Concern Disclaimer As reported in the Troubled Company Reporter on Oct. 4, 2007, Semple, Marchal & Cooper LLP, in Phoenix, Arizona, expressed substantial doubt about Alanco Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended June 30, 2007, and 2006. The auditing firm reported that the company incurred significant losses from operations, anticipates additional losses in fiscal 2008, and has insufficient working capital as of June 30, 2007, to fund the anticipated losses. About Alanco Technologies Headquartered in Scottsdale, Arizona, Alanco Technologies, Inc. (NASDAQ: ALAN) -- http://www.alanco.com/-- provides wireless tracking and asset management solutions through its StarTrak Systems and Alanco/TSI PRISM subsidiaries. AMERICAN MEDIA: Dec. 31 Balance Sheet Upside-Down by $369.0 Mil. ---------------------------------------------------------------- American Media Inc. disclosed financial results of its subsidiary American Media Operations Inc. for the third quarter ended Dec. 31, 2007. At Dec. 31, 2007, American Media Operations Inc.'s consolidated balance sheet showed $952.8 million in total assets and $1.32 billion in total liabilities, resulting in a $369.0 million total stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $138.5 million in total current assets available to pay $149.0 million in total current liabilities. The company reported a net loss of $14.0 million for the third quarter ended Dec. 31, 2007, compared with a net loss of $306.9 million in the corresponding period ended Dec. 31, 2006. For the nine months ended Dec. 31, 2007, net loss was $31.8 million, compared with a net loss of $338.7 million in the corresponding period ended Dec. 31, 2006. Revenue for the third quarter of fiscal year 2008 was $114.5 million, as compared to $107.1 million in the third quarter of fiscal year 2007, representing a 7% increase. For the nine months ended Dec. 31, 2007, revenues were $367.6 million, as compared to $346.4 million in the prior-year period, representing a 6% increase. The increases in revenue during both the quarter and nine-month periods were primarily attributable to favorable results in advertising and newsstand revenue. The company's Shape, Star and Men's Fitness magazines all delivered strong performances in calendar year 2007 versus calendar year 2006. As measured by Publishers Information Bureau (PIB), an independent organization that tracks advertising carried by consumer magazines, Shape ad pages were up 13%, Star ad pages were up 25% and Men's Fitness ad pages were up 25%. All three leading AMI titles outperformed their respective categories during calendar year 2007. As compiled by PIB, the category in which Shape is ranked increased 10%; the category in which Star is ranked grew 6%; and, the category in which Men's Fitness is ranked increased 11%. Operating income for the third quarter of fiscal year 2008 was $17.2 million, as compared to a loss of $302.2 million in the third quarter of fiscal year 2007. For the nine months ended Dec. 31, 2007, operating income was $74.6 million, as compared to a loss of $275.4 million in the prior-year period. Excluding a $305.4 million non-cash provision for impairment of intangible assets and goodwill in the prior-year period, the increase in operating income for the quarter and nine months ended Dec. 31, 2007 would have been 467% and 150%, respectively. These increases were primarily due to the above mentioned increase in revenue and the cost reductions generated by the company as a result of its implementation of its management action plan. EBITDA for the third quarter of fiscal year 2008 was $24.0 million, as compared to $12.0 million in the third quarter of fiscal year 2007. For the nine months ended Dec. 31, 2007, EBITDA was $95.0 million, as compared to $56.0 million in the prior-year period. At Dec. 31, 2007, the company's cash and cash equivalent balances were $56.5 million. Management Comments AMOI chairman and chief executive officer David Pecker said, "In our third quarter of fiscal year 2008, AMOI saw continued strong revenue growth driven by both advertising and circulation gains from our major titles Shape, Star and Men's Fitness, each of which is experiencing a record advertising year." AMOI executive vice president and chief financial officer Dean Durbin said, "Over the first three quarters of fiscal year 2008, we made excellent progress towards the cost-reduction and revenue- enhancement goals we outlined in our management action plan in February 2007. This contributed to a 7% decrease in expenses in the third quarter and a 7% decrease in expenses in the first nine months of fiscal year 2008 when the non-cash provision for impairment is excluded. Based on our performance to date, as well as on our projections for the fourth fiscal quarter, we fully expect to achieve the $36.0 million target contemplated under our management action plan." "Looking ahead, we believe AMI is well positioned, despite an increasingly challenging environment," concluded Mr. Pecker. "We have the leading titles in two of the strongest publishing categories today, health & fitness and celebrity, and their performance continues to be solid in the current quarter." 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?2893 About American Media Operations Headquartered in Boca Raton, Florida, American Media Operations Inc. -- http://www.americanmediainc.com/-- is a publisher in the field of celebrity journalism, and health and fitness magazines. The company's publications include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, Muscle & Fitness, Muscle & Fitness Hers, Flex, National Enquirer, Globe, Country Weekly, Mira!, Sun, National Examiner and other publications. The company is a wholly owned subsidiary of American Media Inc. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit rating on American Media Operations Inc. and raised the rating on the company's senior secured bank loan to 'B' from 'B-'. At the same time, S&P removed the ratings from CreditWatch with negative implications, where they were placed on Feb. 21, 2006, based on the company's delay in filing its financial statements. The outlook is developing. AMERICAN STANDARD: Expects to File for Chapter 11 Protection ------------------------------------------------------------ American Standard Building Systems expects to file for Chapter 11 bankruptcy liquidation in the coming days, blaming U.S. subprime mortgage crisis, crash of the real estate market and lack of bank financing, Ginny Wray of the Martinsville Bulletin reports citing James Lester, the company's president and CEO. The paper relates that the company, which has 57 regular workers and 23 temporary workers, closed on Jan. 25 when the bank would not provide it a loan. Certain workers did not receive wages and certain customers did not get the products they bought, Ms. Wray disclosed. Originally, the company planned to file for Chapter 7 liquidation but decided to file for Chapter 11, wherein the company's counsel will negotiate between the creditors to pump up sale proceeds and taking care of those "who got hurt," Ms. Wray recounts quoting Mr. Lester. "The company has no money and neither do I," Mr. Lester said. "No promises can be made but there is a chance customers and employees can get something." Headquartered in Martinsville, Virginia, American Standard Building Systems manufactures prefabricated wood buildings. ATLANTIS PLASTICS: S&P Ratings Tumbles to 'D' on Covenant Defaults ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Atlantis Plastics Inc. to 'D' from 'CCC-' and its rating on the company's $75 million junior secured term loan C due 2012 to 'D' from 'C'. S&P removed all ratings from CreditWatch with negative implications where they were placed on Aug. 1, 2007, when the company announced that it was in default of certain financial covenants under its secured credit facility. At the same time, S&P lowered the rating on the company's first- lien credit facilities, consisting of a $120 million senior secured term loan B and a $25 million revolving credit facility both due in 2011, to 'CCC' from 'CCC+'. "The rating actions follow the company's failure to make its interest payment on its $75 million junior secured term loan C due 2012," said Standard & Poor's credit analyst Anna Alemani. The recovery rating on the first-lien facilities remains '1', indicating expectations of very high recovery (90%-100%) following the default. The recovery rating on the $75 million junior secured second-lien term loan remains at '6', indicating S&P's expectations of negligible recovery (0%-10%). Recovery prospects are based on an enterprise value approach. Atlantis, which has annual revenues of about $400 million, manufactures plastic films, including stretch films and custom films (about 64% of revenues). Injection-molded products (about 28% of revenues) include components sold to original equipment manufacturers, mainly in the home appliance industry, and siding panels for the homebuilding industry and residential replacement market. The company's profile-extruded products (8% of revenues) are used in recreational vehicles, mobile homes, and other consumer and commercial products. AVANTAIR INC: Dec. 31 Balance Sheet Upside-Down by $22.3 Million ---------------------------------------------------------------- Avantair Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $192.8 million in total assets, $200.7 million in total liabilities, and $14.4 million in Series A convertible preferred stock, resulting in a $22.3 million total stockholders' deficit. At Dec. 31, 2007, the company's consolidated financial statements also showed strained liquidity with $49.6 million in total current assets available to pay $77.6 million in total current liabilities. Net loss for the second quarter of fiscal 2008 was $5.3 million compared to a net loss of $6.6 million for the second quarter of fiscal 2007. Loss from operations for the second quarter of fiscal 2008 decreased approximately 20% to $4.8 million from $6.0 million in the year-ago quarter. Total revenues for the second quarter of fiscal 2008 increased approximately 60% to $28.6 million, from $17.9 million in the second quarter of fiscal 2007. Revenues from fractional aircraft shares sold increased approximately 50% to $10.6 million, from $7.1 million in the year- ago quarter. This reflects an increase of 40% in cumulative new aircraft shares sold to 590 at the end of the second quarter of fiscal 2008, from 421.5 in the same period last year. Price per aircraft share increased to $415,000 versus $405,000 a year ago. Revenues from maintenance and management fees increased approximately 53% to $14.1 million for the second quarter of fiscal 2008, from $9.2 million in the second quarter of fiscal 2007, primarily reflecting the aforementioned increase in cumulative aircraft shares sold at Dec. 31, 2007. Additionally, monthly management fees increased to $9,400 during the second quarter of fiscal 2008, compared to $8,900 in the year-ago period. Charter card revenue increased by 200% to $2.1 million for the second quarter of fiscal 2008, from $690,019 in the second quarter of fiscal 2007, due to increased advertising and customer acceptance of the charter card program resulting in an increase in hours flown and a corresponding increase in charter card revenue. Demonstration and other revenues, which consist of charges for demonstration flights, fees for remarketing of used aircraft shares, and rent and fuel sales from the company's FBO operations, increased approximately 89% to $1.7 million for the quarter from $941,348 in the year-ago period. The cost of fractional aircraft shares sold increased to $8.9 million for the three months ended Dec. 31, 2007, from $6.4 million for the same period last year, due to the 40% increase in the cumulative number of fractional shares sold through Dec. 31, 2007, over the prior year. Cost of flight operations for the second quarter of fiscal 2008, excluding fuel costs, were $13.4 million, or 47% of revenue, compared to $8.3 million, or 46% of revenue, for the second quarter of fiscal 2007. The increase is due to higher maintenance expenses and an increase in the number of pilots hired during the quarter in accordance with the company's plan. Fuel expenses increased to $3.9 million for the quarter, compared to $2.4 million in the second quarter of fiscal 2007, attributable to the increased number of hours flown and the higher cost of fuel. "We are pleased to report strong year-over-year increases in all our revenue streams, led by the more than 50% increase in fractional shares revenue," commented Mr. Steven Santo, chief executive officer of Avantair. "Furthermore, while cost of flight operations increased slightly as a percentage of revenue in the current quarter, they were basically flat with the prior period as we experienced significant reductions in charter and repositioning costs due to several initiatives implemented during the quarter. "In addition, we purchased two additional core aircraft to help mitigate future repositioning costs to meet customer requests. We did experience a slight slowdown in share sales in late December, which we believe was partly due to market seasonality, broader economic challenges and the late delivery of aircraft at the end of the month. Nonetheless, fractional sales for our aircraft have increased in January over the prior month." G&A expenses for the second quarter of fiscal 2008 were $4.8 million, or 17% of revenue, compared to $5.6 million, or 31% of revenue, in the second quarter of fiscal 2007. The decrease is primarily due to a reduction in stock-based compensation expense of $2.3 million, partially off-set by an increase of fixed-based operation costs of $900,000, payroll taxes of $200,000, expenses related to being a public company of approximately $200,000, and other aircraft expenses of $200,000. Depreciation and amortization was $984,673 versus $177,990 in the prior-year period due to a reclassification of assets from available for sale to fixed during the fourth quarter of fiscal 2007. Selling expenses increased to $1.4 million for the three months ended Dec. 31, 2007, from $1.0 million for the same year ago period primarily due to an increase in advertising expenses. Mr. Santo continued, "Our outlook for the remainder of the year remains very positive. We plan to take delivery of 14 total planes in fiscal 2008, having received five of these aircraft in the fiscal second quarter. We also continue to aggressively pursue new fractional shareowners. Our charter card program remains a strong top-line contributor and, more importantly, enables us to reach new customers, introduce them to the aircraft and creates a source of potential future shareowners. In fact, in the first six months of fiscal 2008, we converted 20% of our charter card members to fractional shareowners. "While we continue to closely monitor the broader economic condition and its potential effect on our business, our new lead generation and demo flights evidence continued strong demand, particularly as customers begin to explore more cost-efficient alternatives in private jet travel. We are focused on continuing to capitalize on this market opportunity, while improving operating efficiencies to position Avantair for long-term profitability," Mr. Santo concluded. Year To Date Financial Results For the six months ended Dec. 31, 2007, total revenues increased approximately 57% to $54.3 million, from $34.7 million for the first six months of fiscal 2007. Loss from operations for the first six months of fiscal 2008 was $9.3 million versus $9.0 million in same period in fiscal 2007. Net loss for the first half of fiscal 2008 decreased to $10.1 million from a net loss of $10.4 million in the prior year period. Full-text copies of the company's consolidated financial statements for the quarter ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?2897 Going Concern Disclaimer As reported in the Troubled Company Reporter on Oct. 2, 2007, Jericho, N.Y.-based J.H. Cohn LLP expressed substantial doubt about Avantair Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditing firm pointed to the company's recurring losses resulting and an accumulated deficit of $56,198,527 as of June 30, 2007. In addition, the company has a working capital deficiency of $8,407,103 as of June 30, 2007. About Avantair Inc. Based in Clearwater, Florida, Avantair Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- offers private travel solutions for individuals and companies at a fraction of the cost of whole aircraft ownership. The company is the sole North American provider of fractional aircraft shares in the Piaggio Avanti P.180 aircraft. The company currently manages a fleet of 39 fractional aircraft plus 7 core planes, with another 63 Piaggio Avanti IIs on order through 2012. It also has announced an order of 20 Embraer Phenom 100s. AVENTINE RENEWABLE: Liquidity Issues Incite Failed Auctions ----------------------------------------------------------- At Dec. 31, 2007, Aventine Renewable Energy Holdings Inc. had invested $211.5 million in taxable auction rate securities which it classified as current assets. The auction rate securities held by the company are private placement securities with long-term stated maturities for which the interest rates are reset through a Dutch auction every 28 days. The auctions have historically provided a liquid market for these securities as investors historically could readily sell their investments at auction. With the liquidity issues experienced in global credit and capital markets, the auction rate securities held by the company have experienced multiple failed auctions, beginning on Feb. 8, 2008, as the amount of securities submitted for sale has exceeded the amount of purchase orders. Subsequent to Dec. 31, 2007, the company began to exit its position in these securities. As of Feb. 21, 2008, the company had successfully liquidated $84.3 million of these securities, thereby leaving us with $127.2 million invested in ARS as of February 21. Aventine incurred a pre-tax loss of approximately $1.5 million in connection with these liquidations. All of these securities continue to carry AAA/Aaa ratings, have not experienced any payment defaults and are backed by student loans which carry guarantees as provided for under the federal family education loan program of the U.S. Department of Education. Nonetheless, if uncertainties in the credit and capital markets continue, these markets deteriorate further or there are any ratings downgrades on any auction rate securities the company holds, it may be required to recognize impairments or reclassify these investments from short-term to long-term investments. In addition, these securities may not provide the liquidity to us as Aventine needs it, as it could take until the final maturity of the underlying notes to realize its investments' recorded value. Currently, there is a very limited market for any of these securities and further liquidations at this time, if possible, would likely be at a significant discount. Accordingly, Aventine does not currently intend to attempt to liquidate any more of these securities until market conditions improve or its liquidity needs require us to do so. Cash and cash equivalents as of Dec. 31, 2007 was $17.2 million. Successful auction rate securities liquidations completed in 2008 generated $82.8 million. At Dec. 31, 2007, the company also had availability under its secured revolving credit facility of $122.6 million. The company's total estimated remaining expenditures needed to complete its two new facilities at Dec. 31, 2007 are estimated to be between $295 million and $305 million approximately evenly spent over the balance of the construction period through Q1'09. After utilization of the company's current available resources, should it not be able to liquidate a substantial portion of the remaining portfolio of these ARS securities on a timely basis and on acceptable terms, the company will have to either attempt to raise additional funds or slow down the construction of its new facilities, or both. In addition, delays in the construction of Aventine's new facilities could expose us to material penalties. The amount available to the company under its secured revolving credit facility is calculated using a borrowing base. In addition to a component relating to inventory and receivables, there is a fixed asset component included in this borrowing base. The amount of fixed assets eligible to be included as collateral in Aventine's borrowing base at Dec. 31, 2007 was $48.2 million, and decreases by $1.8 million each quarter thereafter. Aventine's liquidity facility is a $200 million facility, subject to collateral availability, and is expandable under certain conditions to $300 million. About Aventine Renewable Headquartered in Pekin, Illinois, Aventine Renewable Energy Holdings Inc. (NYSE:AVR) -- http://www.aventinerei.com-- produces and markets ethanol in the United States, based on both the number of gallons produced and the number of gallons sold. Through its own production facilities, marketing alliances with other ethanol producers and its purchase or resale operations, the company marketed and distributed 695.8 million gallons of ethanol during the year ended Dec. 31, 2006. For 2006, Aventine sold approximately 12.9% of the total volume of ethanol sold in the United States. The company markets and distributes ethanol to energy companies in the United States, including Royal Dutch Shell and its affiliates, Marathon Petroleum, BP, ConocoPhillips, Valero Marketing and Supply Company, Exxon/Mobil, and Texaco/Chevron. In addition to producing ethanol, the company's facilities also produce several co-products, such as distillers' grain, corn gluten feed, corn germ and brewers' yeast. AVENTINE RENEWABLE: Earns $3.2 Mil. For Fourth Qtr. Ended Dec. 31 ----------------------------------------------------------------- Aventine Renewable Energy Holdings Inc. reported net income of $3.2 million for the three months ended Dec.31, 2007 compared to $12.8 million net income for the 2006 fourth quarter. For the full fiscal year ended Dec. 31, 2007, net income was found at $33.8 million compared to $54.9 million income for 2006. Total net sales for the 2007 fourth quarter are $379.3 million in comparison to $360.7 million sales for the same period of the prior year. For the fiscal 2007, the company's total net sales were $1,571.6 million compared to the net sales for fiscal 2006 at $1,592.4 million. "We continue to successfully steer our way through a difficult commodity environment as both income and EBITDA turned positive," Ron Miller, Aventine's president and chief executive officer, said. "While ethanol prices rose during the quarter, they did not increase enough to allow the average price received for ethanol in the fourth quarter to exceed the average for the third quarter." "We were able to offset, however, the lower average ethanol price with lower corn costs for the quarter," Mr. Miller continued. "Our fourth quarter corn costs averaged $3.66 per bushel, or $0.15 per bushel less than in the third quarter." "Our co-product returns for the fourth quarter increased to 45.3%, as prices for germ, meal, DDGS and feed all increased significantly," Mr. Miller added. "Overall, the commodity spread for the quarter, defined as gross ethanol selling price per gallon less net corn cost per gallon, increased to $1.17 per gallon, from $1.09 in Q3'07." "As the commodity spread remains tight, the co-product returns provided by our wet mill have become increasingly more important," Mr. Miller explained. "Higher volumes of ethanol shipped in the fourth quarter versus the third quarter helped reduce freight costs per gallon, in spite of continued fuel surcharges." "Our plants ran at 89% of capacity during the fourth quarter of 2007 and 93% of capacity for the full year 2007 as compared to 89% for the full year 2006," Mr. Miller added. "The construction of our new facilities in Aurora, Nebraska and Mt. Vernon, Indiana continue to move forward." "We expect these facilities to ramp up ethanol production beginning in Q1'09," Mr. Miller stated. "We would like to thank all of the U.S. Senators and Representatives that continue to support and believe in the ethanol industry for passing the Energy Independence and Security Act of 2007, and for President Bush signing the bill into law." "Ethanol supports more than corn farmers or the ethanol industry itself," Mr. Miller imparted. "From seed and fertilizer companies to heavy equipment manufacturers and independent gasoline retailers, to local school districts in rural communities that have received boosts in property taxes, the investments made in ethanol by our political leadership is proving to be a wise investment for America." "The passage of a new renewable fuels standard in December helped to quell some of the concerns surrounding the supply/demand equation," Mr. Miller elaborated. "The new renewable fuel standard requirement for corn based ethanol of 15 billion gallons in 2015 exceeds, according to the Renewable Fuels Association, the combined capacity of 13.4 billion gallons from existing producing ethanol plants as well as those listed as currently under construction." "However, we, along with others in the industry, must continue to find and open new markets for ethanol," Mr. Miller concluded. As of Dec. 31, 2007, the company had $762.2 million total assets, $418.3 total debts resulting to a total stockholder's equity of $343.9 million. About Aventine Renewable Headquartered in Pekin, Illinois, Aventine Renewable Energy Holdings Inc. (NYSE:AVR) -- http://www.aventinerei.com-- produces and markets ethanol in the United States, based on both the number of gallons produced and the number of gallons sold. Through its own production facilities, marketing alliances with other ethanol producers and its purchase or resale operations, the company marketed and distributed 695.8 million gallons of ethanol during the year ended Dec. 31, 2006. For 2006, Aventine sold approximately 12.9% of the total volume of ethanol sold in the United States. The company markets and distributes ethanol to energy companies in the United States, including Royal Dutch Shell and its affiliates, Marathon Petroleum, BP, ConocoPhillips, Valero Marketing and Supply Company, Exxon/Mobil, and Texaco/Chevron. In addition to producing ethanol, the company's facilities also produce several co-products, such as distillers' grain, corn gluten feed, corn germ and brewers' yeast. AVENTINE RENEWABLE: Moody's Lowers SGL Rating on Failed Auctions ---------------------------------------------------------------- Moody's Investors Service downgraded the speculative grade liquidity rating of Aventine Renewable Energy Holdings, Inc.'s (B2 corporate family rating / stable outlook) to SGL-3 and moved the ratings outlook to negative. The company's B2 corporate family rating and B3 rating on its senior unsecured notes due 2017 were affirmed. These summarizes the ratings. Aventine Renewable Energy Holdings, Inc. Ratings changes: -- Speculative grade liquidity rating: SGL-3 from SGL-1 Ratings affirmed: -- Corporate family rating: B2 -- Probability of default rating: B2 -- $300mm Sr unsec notes due 2017: B3, LGD5, 76% The downgrade in the speculative grade liquidity rating follows the disclosure by the company that approximately $127 million of auction rate securities held as short-term investments were illiquid as a result of experiencing failed remarketing auctions earlier in February. The company was able to sell approximately $84 million of auction rate securities prior to the failed February 8th auction, which resulted in a loss of $1.5 million. Cash balances and liquid marketable securities balances as of Dec. 31, 2007, pro forma for the $84 million of sales of auction rate securities was approximately $100 million. It is uncertain if the next remarketing auctions for securities held by Aventine will be successful, however the company may have the opportunity to sell additional securities at discounts to their par value outside of the typical remarketing auctions. The SGL-3 liquidity rating also reflects cash balances that are expected to be exhausted during 2008 (to fund an estimated $315 million to $330 million of capital expenditures), the current unattractive commodity pricing environment, the expectation that the company will need to fund capital expenditures with its $200 million revolving credit facility and the generally difficult liquidity environment that might preclude the company from raising significant funds from uncommitted sources. Elevated corn prices (recently exceeding $5 per bushel) and ethanol prices that have traded at a discount or small premium to gasoline prices are resulting in slim margins for ethanol producers (despite favorable federal legislation passed in December 2007 mandating increased ethanol usage in 2008 and future years) and slightly negative cash flow from operations in the fourth quarter of 2007 for Aventine. Continuation of current commodity prices could lead to meager cash flows that would not contribute significantly to capital expenditure requirements or improve liquidity. It is plausible that the company will have sufficient funds for 2008, but there could be scenarios under which they could experience a liquidity shortfall. The company noted these in its earnings announcement dated Feb. 22, 2008: "After utilization of our current available resources, should we not be able to liquidate a substantial portion of the remaining portfolio of these ARS [auction rate securities] securities on a timely basis and on acceptable terms, we will have to either attempt to raise additional funds or slow down the construction of our new facilities, or both. In addition, delays in the construction of our new facilities could expose us to material penalties." The negative outlook reflects the uncertainty about Aventine's future profitability (given current commodity prices) and its liquidity as it spends heavily on new plant construction. Aventine expects to spend $295 million to $305 million to complete construction for two new ethanol plants in the first quarter of 2009 and $20 million to $25 million of other capital expenditures in 2008. It is expected that these expenditures will be funded from existing cash balances and its revolving credit facility. While on negative outlook, factors Moody's will consider include the company's success in selling its $127.2 million of illiquid auction rate securities, the impact that commodity prices have on the company's margins and Aventine's ability to generate cash flow from operations to contribute to capital expenditure requirements in 2008. A deterioration in operating margins due to adverse movements in commodity prices or further levering of Aventine's balance sheet could put negative pressure on the rating. Aventine is a producer and marketer in the United States of ethanol used as a blending component for gasoline. It produces ethanol and co-products at its wholly-owned Pekin, Illinois wet milling and dry milling plants, and its 78.4% owned dry milling Aurora, Nebraska plant. Additionally, the firm operates a marketing alliance that pools ethanol from multiple third party producers and sells it nationwide for which it receives a commission. Revenues for the FYE Dec. 31, 2007 were approximately $1.6 billion. BALLY TOTAL: Reaches Settlement with SEC After Fraud Allegations ---------------------------------------------------------------- Bally Total Fitness Holding Corporation and its debtor-affiliates have reached a settlement with the U.S. Securities and Exchange Commission concerning the SEC's investigation relating to the restatement of the company's financial statements for 2002 and 2003 and selected financial data for 2000 and 2001. In a lawsuit brought before the U.S. District Court in the District of Columbia on Feb. 28, 2008, the SEC filed financial fraud charges against against Bally alleging that the Company violated securities law -- and misled investors -- by issuing financial reports which fraudulently misrepresented Bally's financial condition during the years from 1997 to 2003, reports the Chicago Tribune. Specifically, the SEC alleges that: -- from at least 1997 through 2003, Bally's financial statements were affected by more than two dozen accounting improprieties, which caused Bally to overstate its originally reported year-end 2001 stockholders' equity by nearly $1.8 billion, or more than 340%. -- Bally understated its originally reported 2002 net loss by $92.4 million, or 9341%, and understated its originally reported 2003 net loss by $90.8 million, or 845%. -- Bally violated the antifraud, reporting, books and records, and internal control provisions of the federal securities laws. -- Bally fraudulently accounted for (i) three types of revenue it received from its members: initiation fees, prepaid dues, and reactivation fees; and (ii) its membership acquisition costs. "These frauds account for $1.2 billion of the $1.8 billion overstatement of Bally's originally reported year-end 2001 stockholders' equity," the SEC said in its complaint. In addition, Bally's accounting for more than 20 other revenue or expense items failed to conform to Generally Accepted Accounting Principles, which account for the remaining $600 million of the $1.8 billion overstatement of Bally's originally reported year-end 2001 stockholders' equity, said the SEC. Bally Settles In a "consent decree," says the Tribune, the suit was filed, and Bally settled the charges simultaneously. The company settled the proceedings without admitting or denying the SEC's findings, according to reports. The settlement does not require the Company to pay a monetary penalty. In accepting Bally's settlement offer, the SEC said, the Commission took into account "Bally's cooperation with the commission staff in the investigation leading to this action and (its) prompt commencement of remedial action," reports the Tribune. As part of the settlement, the company has consented to a final judgment requiring future compliance with Federal securities laws and regulations. Since the suit asks the Court only to enjoin Bally from future violations, the litigation appears to be resolved. However, the SEC said that its investigation of events "is continuing," the Tribune adds. "I am pleased that the conclusion of the government investigations puts these matters behind us as we continue to execute our strategies for the long-term success of our business," said Don R. Kornstein, Chairman of Bally Total Fitness. The Department of Justice also closed the criminal investigation involving Bally's restatement, without action against the company, according to a statement issued by Bally. About Bally Total Fitness Based in Chicago, Illinois, Bally Total Fitness Holding Corp. (Pink Sheets: BFTH.PK) -- http://www.ballyfitness.com/-- operates fitness centers in the U.S., with over 375 facilities located in 26 states, Mexico, Canada, Korea, China and the Caribbean under the Bally Total Fitness(R), Bally Sports Clubs(R) and Sports Clubs of Canada (R) brands. Bally Total and its affiliates filed for chapter 11 protection on July 31, 2007 (Bankr. S.D.N.Y. Case No. 07-12396) after obtaining requisite number of votes in favor of their pre-packaged chapter 11 plan. Joseph Furst, III, Esq. at Latham & Watkins, L.L.P. represents the Debtors in their restructuring efforts. As of June 30, 2007, the Debtors had $408,546,205 in total assets and $1,825,941,54627 in total liabilities. The Debtors filed their Joint Prepackaged Plan & Disclosure Statement on July 31, 2007. On Aug. 13, 2007, they filed an Amended Joint Prepackaged Plan and on Aug. 17 filed a Modified Amended Prepackaged Plan. BELDEN INC: Board Appoints Judy Brown as Director ------------------------------------------------- The board of directors of Belden Inc. appointed Judy Brown as a director and member of the audit committee of the board. Ms. Brown, 39, is executive vice president, chief financial officer and chief accounting officer of Perrigo Company, a post she has held since July 2006. She joined Perrigo in September 2004 as vice president and corporate controller. Perrigo is a healthcare supplier that develops, manufactures and distributes over-the-counter and prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients and consumer products for the store brand market. Before joining Perrigo, Ms. Brown held various senior positions in finance and operations at Whirlpool Corporation from 1998 to August 2004, in Italy and the US and at Ernst & Young, 1990-1998, in both the US and Germany. She received a B.S. degree from the University of Illinois and an M.B.A. from the University of Chicago. "We are delighted to welcome Judy Brown to Belden's board of directors and the audit committee of the board, John Stroup, president and chief executive officer of Belden Inc., said. "Her financial expertise and her background in European operations make her a valuable addition to our board." About Belden Inc. Headquartered in St. Louis, Missouri, Belden Inc. (NYSE:BDC) -- http://www.belden.com/-- fka Belden CDT Inc., designs, manufactures, and markets signal transmission solutions for data networking and specialty electronics markets including entertainment, industrial, security and aerospace applications. * * * As reported in the Troubled Company Reporter on Feb. 15, 2008, Moody's Investors Service upgraded Belden Inc.'s corporate family ratings to Ba1 from Ba2. The rating outlook is stable. CALPINE CORP: Inks Geothermal Purchase Agreement With PG&E ---------------------------------------------------------- Calpine Corporation and Pacific Gas and Electric Company have entered into a 175-megawatt geothermal power purchase agreement, which consolidates six existing qualifying facility agreements totaling 118MW and adding 57MW of new renewable energy to PG&E's supply. The Purchase Agreement will be submitted for approval to the California Public Utilities Commission. With this agreement, 20% of PG&E's contracts for future energy delivery now meet California's renewable energy standard, PG&E said in a press release. "This agreement marks a major milestone toward meeting California's renewable standard," said Fong Wan, PG&E's vice president of energy procurement, said in a press release. "PG&E already provides our customers with some of the cleanest energy in the nation and we will continue to aggressively add more renewables to our portfolio." Starting in September 2008, the agreement will deliver renewable energy from Calpine's geothermal plants in Lake and Sonoma Counties in northern California in an area known as The Geysers. The Geysers generate about 725MW, of which 375MW will go to PG&E and the rest to other utilities like Southern California Edison. The Geysers, which can power up to 45,000 homes, is the largest producer of geothermal electricity in the world. Commercial geothermal power has been generated continuously at The Geysers since 1960. Geothermal energy accounts for three percent of PG&E's current overall energy mix. On average, more than 50% of the energy PG&E delivers comes from carbon-free sources. The agreement filed on February 20, 2008, with the California Public Utilities Commission extends PG&E's broader renewable energy portfolio. Qualifying renewable sources in PG&E's portfolio include solar, wind, biomass, geothermal, and small hydroelectric. Since July 2007, PG&E has signed renewable energy contracts totaling 1,024 MW, including this Calpine agreement, 553 MW of solar thermal with Solel-MSP-1, 85 MW of wind power from PPM, two MW of wave energy with Finavera Renewables, 177 MW of solar thermal with Ausra Inc., and 150 MW of wind energy with enXco. PG&E is still seeking regulatory approval for the Calpine, Finavera, Ausra and enXco contracts. California's Renewable Portfolio Standard (RPS) Program requires each utility to increase its procurement of eligible renewable generating resources by one percent of load per year to achieve a 29% renewables goal by 2010. The RPS Program was passed by the Legislature and is managed by California's Public Utilities Commission and Energy Commission. Based in San Jose, California, Calpine Corporation (OTC Pink Sheets: CPNLQ) -- http://www.calpine.com/-- supplies customers and communities with electricity from clean, efficient, natural gas-fired and geothermal power plants. Calpine owns, leases and operates integrated systems of plants in 21 U.S. states and in three Canadian provinces. Its customized products and services include wholesale and retail electricity, gas turbine components and services, energy management and a wide range of power plant engineering, construction and maintenance and operational services. The company and its affiliates filed for chapter 11 protection on Dec. 20, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-60200). Richard M. Cieri, Esq., Matthew A. Cantor, Esq., Edward Sassower, Esq., and Robert G. Burns, Esq., Kirkland & Ellis LLP represent the Debtors in their restructuring efforts. Michael S. Stamer, Esq., at Akin Gump Strauss Hauer & Feld LLP, represents the Official Committee of Unsecured Creditors. As of Aug. 31, 2007, the Debtors disclosed total assets of $18,467,000,000, total liabilities not subject to compromise of $11,207,000,000, total liabilities subject to compromise of $15,354,000,000 and stockholders' deficit of $8,102,000,000. On Feb. 3, 2006, two more affiliates, Geysers Power Company, LLC, and Silverado Geothermal Resources, Inc., filed voluntary chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 06-10197 and 06-10198). On Sept. 20, 2007, Santa Rosa Energy Center, LLC, another affiliate, also filed a voluntary chapter 11 petition (Bankr. S.D.N.Y. Case No. 07-12967). On June 20, 2007, the Debtors filed their Chapter 11 Plan and Disclosure Statement. On Aug. 27, 2007, the Debtors filed their Amended Plan and Disclosure Statement. Calpine filed a Second Amended Plan on Sept. 19, 2007 and on Sept. 24, 2007, filed a Third Amended Plan. On Sept. 25, 2007, the Court approved the adequacy of the Debtors' Disclosure Statement and entered a written order on September 26. On Dec. 19, 2007, the Court confirmed the Debtors' Plan. Calpine's Amended Plan was deemed effective as of January 31, 2008. CATHOLIC CHURCH: Objection Deadline on Calkin Retention is March 3 ------------------------------------------------------------------ At the Diocese of Davenport and its Official Committee of Unsecured Creditors' behest, the U.S. Bankruptcy Court for the Southern District of Iowa sets March 3, 2008, as the bar date for filing objections to the parties' application to employ Richard M. Calkins, Esq., at Calkins Law Firm, in Des Moines, Iowa, as special arbitrator in the bankruptcy case. The Diocese and the Creditors Committee have previously asked for an expedited consideration of the application because Mr. Calkins will have to start reviewing 160 proofs of claim filed in the case, among other tasks. Joint Application for Retention of Special Arbitrator The Diocese of Davenport and its Official Committee of Unsecured Creditors seek authority from the U.S. Bankruptcy Court for the Southern District of Iowa to employ Mr. Calkins as special arbitrator in the Diocese's Chapter 11 case. Hamid R. Rafatjoo, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, relates that central to the Joint Plan of Reorganization, which was recently filed by the Diocese and the Creditors Committee, is the role of the Special Arbitrator. The Plan provides that the holder of a tort claim against the Diocese can choose to have his or her Tort Claim treated pursuant to a convenience or matrix process. The Special Arbitrator determines the allowance and amount of the Tort Claim under those two processes, Mr. Rafatjoo tells the Court. The Special Arbitrator will also be responsible for computing the aggregate amount of the matrix, litigation and non-releasing litigation tort claims under the Plan, Mr. Rafatjoo says. He notes that for the claims processes to move efficiently and successfully, the Special Arbitrator should begin his work before Plan confirmation. Mr. Calkins will be paid at the hourly rate of $200 for his services, and $100 for travel time. He will also be reimbursed for necessary and reasonable costs. He may also utilize his paralegal staff at an hourly rate of $100. Pre-confirmation, Mr. Calkins will make periodic applications for compensation and reimbursement. Payment for his staff will be promptly and directly paid by the Diocese. Mr. Calkin assures the Court that he is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. The Court will hear the adequacy of Davenport's disclosure statement explaining its reorganization plan on March 5, 2008. (Catholic Church Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000). CATHOLIC CHURCH: Century Balks at Davenport's Disclosure Statement ------------------------------------------------------------------ Century Indemnity Company, as successor to CCI Insurance Company and Insurance Company of North America, objects to the Diocese of Davenport's Disclosure Statement because it lacks adequate information as required by Section 1125 of the Bankruptcy Code. Richard K. Updegraff, Esq., at Brown, Winick, Graves, Gross, Baskerville & Schoenebaum PLC, in Des Moines, Iowa, relates that Century Indemnity is not an insurer of the Diocese, and that the only record of insurance coverage it issued to the Diocese is a two-day policy, effective June 18 to 20, 1968, which covered "[a]ll activities incidental to installation of Bishop" at the Sacred Heart Cathedral. Mr. Updegraff notes that Century Indemnity does not have a copy of the Policy's liability coverage, and neither does the Diocese nor the Cathedral. Century Indemnity, however, is included in the Plan's definition of "Insurance Company," which includes any company that "allegedly provided" coverage to any Catholic Entities, Mr. Updegraff says. He argues that the Plan appears to be designed to abrogate virtually all basic policy rights, including the right to control defense of tort claims against an insured, because handling of the tort claims is put in complete control of a special arbitrator. Mr. Updegraff contends that the Disclosure Statement fails to disclose any basis for the U.S. Bankruptcy Court for the Southern District of Iowa to exercise issues over (i) tort claims against the Cathedral, and other non-debtors, or (ii) the Policy, which, if its terms and conditions are proved, would be a contract between two non-debtors. He adds that the Disclosure Statement also fails to disclose anything about the insurance policies allegedly issued to non-debtors, and the Plan's intended impact on those policies, which are not property of the bankruptcy estate. Mr. Updegraff further contends, among other things, that the Disclosure Statement does not disclose whether the priests, or other perpetrators of alleged abuse at the Cathedral were employees of the Cathedral. He notes that the Disclosure Statement is extraordinary in its failure to make disclosure about insurance. Hence, Century Indemnity asks the Court to deny approval of the Disclosure Statement. About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. The Court will hear the adequacy of Davenport's disclosure statement explaining its reorganization plan on March 5, 2008. (Catholic Church Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000). CATHOLIC CHURCH: Regina High Opposes Davenport's Bankruptcy Plan ---------------------------------------------------------------- Iowa City Regina High School objects to the Diocese of Davenport's Joint Plan of Reorganization and accompanying Disclosure Statement to the extent that the Plan purports or attempts to bind Regina High to perform certain obligations set forth in the Plan. The Disclosure Statement is inaccurate and misleading in that it states that the Plan terms were negotiated over four days by certain Catholic entities, including parishes and churches located within the territorial Diocese's limits, Paula L. Roby, Esq., at Elderkin & Pirnie PLC, in Cedar Rapids, Iowa, argues. She notes that Regina High is a Catholic entity, as defined in the Plan, but was excluded from the negotiations, even after requesting to participate. "Regina [High] believes that not one single 'Catholic Entity' was allowed to participate in the negotiations," Ms. Roby tells the U.S. Bankruptcy Court for the Southern District of Iowa. Ms. Roby further argues that the Disclosure Statement inaccurately describes the balloting tabulation process by failing to note that the requirements of two-thirds in amount and one-half in number for affirmative ballots applies only to the number of creditors actually casting ballots, and not to the total number of creditors in each class. About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. The Court will hear the adequacy of Davenport's disclosure statement explaining its reorganization plan on March 5, 2008. (Catholic Church Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/ or 215/945-7000). CATHOLIC CHURCH: Portland's Bankruptcy Reopened by Judge Perris --------------------------------------------------------------- The Hon. Elizabeth L. Perris of the U.S. Bankruptcy Court for the District of Oregon has reopened the bankruptcy case of the Archdiocese of Portland in Oregon for further administration. Erin K. Olson, Esq., at the Law Office of Erin Olson, P.C., in Portland, Oregon, previously asked the Court to reopen the case to resolve certain issues, including her request to unseal, and file in redacted form, the documents and accompanying exhibits filed as Docket Nos. 4765 and 4766 in the bankruptcy case. Fathers Joseph Bacelleri, Donald Durand, Maurice Grammond, Gary Jacobson, Rocco Perrone, Michael W. Sprauer, Ronald Warren, and Chester Wrzaszczak objected to the reopening of the case. They complained that the case has been completed, claims have been settled and closed, and that the matter should be at an end. Alternatively, the priests asked the Court to refer the disclosure issues to mediators, Judge Velure and Judge Hogan, for mediation and arbitration, as has been previously agreed upon by the Archdiocese and certain of the claimants' counsel. Documents Should Not Be Unsealed The Archdiocese tells Judge Perris that in essence, Ms. Olson's request to unseal seeks relief from the protective order that is guarding the documents. Thomas V. Dulcich, Esq., at Schwabe, Williamson & Wyatt, P.C. in Portland, Oregon, relates that Kelly Clark, Esq., has raised the exact same issue, which through an agreement with certain interested parties, will be subject to a mediation with Judge Velure commencing April 1, 2008. Accordingly, aside from its previous request to appoint Judge Hogan as special master or preserving the status quo with respect to the documents at issue, the Reorganized Debtor also asks the Court to set a briefing schedule on the issues raised by Ms. Olson, so that the Court may be fully informed about them. Father M, for its part, asks the Court to deny Ms. Olson's request to unseal documents because the tort claimants have settled their claims and the Court has closed the bankruptcy case. He contends that if the Court determines that Ms. Olson's request merits attention, then, the Court should direct her to participate in the mediation with Judge Velure, and, if necessary, a final arbitration to be determined by Judge Hogan. Father M points out that Ms. Olson has refused to participate in the agreed upon mediation process, but continues to raise the same issues that the process is designed to resolve. Confidential defendant "Defendant Smith" asks Judge Perris to defer consideration of Ms. Olson's request until parties complete Judge Velure's mediation. Defendant Smith argues that the documents at issue consist entirely of civil discovery, which were exchanged by certain parties under the protection of a confidentiality agreement. Ms. Olson, who did not represent any party, should not be allowed to presumptively deny to those parties the benefits of the Confidentiality Agreement, he says. About Archdiocese of Portland The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq., and William N. Stiles, Esq., at Sussman Shank LLP, represent the Portland Archdiocese in its restructuring efforts. Albert N. Kennedy, Esq., at Tonkon Torp, LLP, represents the Official Tort Claimants Committee in Portland, and scores of abuse victims are represented by other lawyers. David A. Foraker serves as the Future Claimants Representative appointed in the Archdiocese of Portland's Chapter 11 case. In its Schedules of Assets and Liabilities filed with the Court on July 30, 2004, the Portland Archdiocese reports $19,251,558 in assets and $373,015,566 in liabilities. The Court approved the Debtor's disclosure statement explaining its Second Amended Joint Plan of Reorganization on Feb. 27, 2007. On April 17, 2007, the Court confirmed Portland's 3rd Amended Plan. On Sept. 28, 2007, the Court entered a final decree closing Portland's case. (Catholic Church Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Spokane's Ranch Faces Suit Filed by Ex-Residents ----------------------------------------------------------------- Three former residents of Morning Star Boys Ranch, which is operated by the Diocese of Spokane, have filed suit in Spokane County Superior Court, The Associated Press reports. Thirteen former residents previously sued the ranch over claims of abuse. In their lawsuit, the Plaintiffs accuse Morning Star of negligent supervision and knowingly allowing employees to abuse its residents. The Plaintiffs alleged that they were physically and sexually abused by former Morning Star director, Rev. Joseph Weitensteiner, Rev. Patrick O'Donnell and an unnamed volunteer employee in the 1960s, 1970s and 1980s. Rev. Weitensteiner resigned in 2006, and has denied abusing ranch residents. Jenn Kantz, Morning Star's spokeswoman, said that the ranch had not seen the lawsuit and cannot comment on specific allegations, AP says. She was quoted as saying that the ranch is a safe and therapeutic place. According to AP, Rev. O'Donnell has acknowledged sexually molesting dozens of boys over three decades. He was named in 66 of the 176 claims alleging sexual abuse by priests in the Diocese's bankruptcy case. About The Diocese of Spokane The Roman Catholic Church of the Diocese of Spokane filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 04-08822) on Dec. 6, 2004. Michael J. Paukert, Esq., at Paine, Hamblen, Coffin, Brooke & Miller, LLP, represents the Spokane Diocese in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $11,162,938 in total assets and $81,364,055 in total debts. The Diocese of Spokane, the Tort Claimants Committee, the Future Claims Representative, and the Executive Committee of the Association of Parishes delivered an Amended Plan of Reorganization, and a Disclosure Statement describing that Plan to the Court on Feb. 1, 2007. The Honorable Patricia C. Williams approved the disclosure statement on March 8, 2007. On April 24, 2007, the Court confirmed Spokane's 2nd Amended Joint Plan. That plan became effective on May 31, 2007. (Catholic Church Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CATHOLIC CHURCH: Tuscon Can Distribute $1 Million For Tort Claims ----------------------------------------------------------------- The Hon. James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona approved the distribution of $1,000,000 from funds remaining in the unknown claims reserve to the tort claimants in the bankruptcy case of the Diocese of Tucson. In a four-page memorandum decision, Judge Marlar noted that decisions, which affect Unknown Claimants, must be approached cautiously. "The mutual effort of all involved produced a humane result. To move too quickly could adversely impact innocent parties whom all have striven so diligently to protect. Caution must therefore be the watchword," Judge Marlar said. The Official Committee of Tort Claimants has previously asked for the distribution of $3,000,000 from the Unknown Claims Reserve among allowed claims in Tiers 1 to 4, and the California Tier, whose claims have not already been fully satisfied. The Unknown Claims class, represented by A. Bates Butler, opposed the Committee's request, contending that it is currently premature, and that the amount requested was too high. Mr. Butler suggested that $1,000,000 is a reasonable and realistic amount to reallocate and redistribute. The guardian ad litem for the minor children class of claimants, Charles L. Arnold, agreed with Mr. Butler's position. Instructions for Interim Distribution In a separate order, the Court instructed and directed the trustee of the bankruptcy settlement trust to make an interim distribution of the funds amounting to $800,000 among the holders of certain allowed claims in these amounts: -- $7,729 to each of the Tier 1 Claimants; -- $15,458 to each of the Tier 2 Claimants; -- $27,053 to California Tier Claimant No. 45; -- $38,647 to each of the Tier 3 Claimants; and -- $54,106 to each of the Tier 4 Claimants. Judge Marlar also directed the Trustee to allocate to the Diocese $200,000, concurrently with the claimants distributions, pursuant to a sharing arrangement under the Diocese's confirmed plan of reorganization. Panel Wants Approval on $3MM Distribution As reported in the Troubled Company Reporter on Jan. 8, 2008, the Official Committee of Tort Claimants of the Diocese of Tucson asked the Court to authorize the trustee of the bankruptcy settlement trust to distribute $3,000,000 from the funds remaining in the unknown claims reserve, in accordance with the Weighted Distribution Ratio, among allowed claims in Tiers 1 to 4, and the California Tier, whose claims have not already been fully satisfied. About the Diocese of Tucson The Roman Catholic Church of the Diocese of Tucson filed for chapter 11 protection (Bankr. D. Ariz. Case No. 04-04721) on September 20, 2004, and delivered a plan of reorganization to the Court on the same day. Susan G. Boswell, Esq., Kasey C. Nye, Esq., at Quarles & Brady Streich Lang LLP, represent the Tucson Diocese. Tucson's Third Amended and Restated Plan of Reorganization became effective on Sept. 20, 2005. (Catholic Church Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) CENTRAL IOWA: McGladrey & Pullen Expresses Going Concern Doubt -------------------------------------------------------------- McGladrey & Pullen, CPA's, raised substantial doubt about the ability of Central Iowa Energy, LLC, to continue as a going concern after it audited the company's financial statements for the year ended Sept. 30, 2007. The auditor reported that the company has suffered losses from operations and has experienced significant increases in the input costs for its products. This has created liquidity issues and the company is or, will likely be, in violation of its bank debt covenants and there is no assurance that such violations will be waived. The company related that it has also been experiencing decreasing demand for its biodiesel. As of the fiscal year ended Sept. 30, 2007, the company operated at 97% of its nameplate capacity, but it is currently only operating at 72% of nameplate capacity. Should the company continue to endure the current high raw material costs without an increase in the price for its biodiesel, it may have to continue to scale back or cease operations at the biodiesel plant, either on a temporary or permanent basis. This may affect the company's ability to generate revenues and could decrease or eliminate the value of its units. The company posted a net loss of $3,046,370 on total revenues of $36,052,541 for the year ended Sept. 30, 2007, as compared with a net loss of $490,722 on zero revenue in the prior year. The company stated that the total project cost for the construction and startup of its biodiesel plant was estimated to be approximately $50,554,000, based on the design-build agreement it entered into with its design-builder, Renewable Energy Group, Inc. The company financed the construction and startup of the plant with a combination of equity and debt capital. At Sept. 30, 2007, the company's balance sheet showed $51,316,608 n total assets, $31,459,046 in total liabilities and $19,857,562 stockholders' equity. The company's consolidated balance sheet at Sept. 30, 2007, showed strained liquidity with $11,267,545 in total current assets available to pay $30,714,046 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2887 About Central Iowa Central Iowa Energy, LLC -- http://www.centraliowaenergy.com/-- uses vegetable oils (primarily soybean oil) and animal fats to manufacture biodiesel. The alternative energy manufacturing company produces domestic and renewable energy at its site on the Iowa Interstate Railroad in Newton, Iowa. CHRYSLER LLC: Idles Plant in Ontario Due to TRW's Workers Strike ---------------------------------------------------------------- A Chrysler LLC assembly plant in Windsor, Ontario was forced to temporarily shut down after Canadian Auto Workers union members of TRW Automotive Inc. went on strike Thursday due to failed wage increase talks, according to various papers. TRW supplies Chrysler suspension modules for Dodge Caravan and Town & Country minivans, Dow Jones Newswires relates. Reuters discloses citing Chrysler spokeswoman Michele Tinson that the automaker's assembly plant in Windsor has 4,475 hourly workers as of December 2007. A Chrysler assembly plant in St. Louis that also produces minivans is not affected by the rally because it doesn't use TRW's products. Dow Jones Newswires relates that TRW and Canadian Auto Workers union representatives failed to reach an agreement on salary increases, spurring the protest. Reuters discloses that TRW spokesman John Wilkerson proposes to maintain TRW plant production using salaried workers and hopes to continue negotiations with the union as soon as possible. About TRW Headquartered in Livonia, Michigan, TRW Automotive, Inc., supplies automotive systems, modules, and components to global vehicle manufacturers and related aftermarket. The company has three operating segments; Chassis Systems, Occupant Safety Systems, and Automotive Components. Its primary business lines encompass the design, manufacture and sale of active and passive safety related products. About Chrysler LLC Headquartered 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. CHRYSLER LLC: Plastech to Continue Sending Supplies Until March 3 ----------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates have agreed to continue to supply parts to Chrysler LLC until March 3, 2008, Crain's Detroit Business reports. As reported in the Troubled Company Reporter on Feb. 22, 2008, the Debtors and Chrysler previously agreed to an extension of their interim production agreement, under which Plastech will continue to manufacture and deliver component parts to Chrysler until Feb. 27, 2008. Pursuant to the initial interim agreement between the parties: -- Chrysler was obligated to make certain payments to Plastech in conjunction with the continued production of component parts; and -- The Debtors are to allow BBK, as agents for Chrysler, to have supervised access to Plastech facilities for the purpose of inspecting and conducting an inventory of all tooling used for Chrysler production. The U.S. Bankruptcy Court for the Eastern District of Michigan denied Chrysler LLC's request to pull out the tooling equipment from Plastech's plants a few weeks ago. 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. CITICORP MORTGAGE: Fitch Rates $1.392MM Class B-4 Certs. at BB -------------------------------------------------------------- Citicorp Mortgage Securities, Inc.'s REMIC pass-through certificates, series 2008-1, are rated by Fitch as: -- $297,142,648 classes IA-1, IA-2, IA-IO, IIA-1, IIA-IO and A-PO certificates (senior certificates) 'AAA'; -- $5,875,000 class B-1 'AA'; -- $2,010,000 class B-2 'A'; -- $927,000 class B-3 'BBB'; -- $1,392,000 non-offered class B-4 'BB'; -- $463,000 non-offered class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 3.90% credit enhancement provided by the 1.90% class B-1, the 0.65% class B-2, the 0.30% class B-3, the 0.45% non-offered class B-4, the 0.15% non-offered class B-5, and the 0.45% non-offered and non-rated class B-6. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and CitiMortgage, Inc.'s servicing capabilities (rated 'RPS1' by Fitch) as primary servicer. The certificates represent ownership in a trust fund, which consists primarily of 523 one-to four-family conventional, fixed- rate mortgage loans secured by first liens on residential mortgage properties. As of the cut-off date (Feb. 1, 2008), the mortgage pool has an aggregate principal balance of approximately $309,201,928, a weighted average original loan-to-value ratio of 70.67%, a weighted average coupon of 6.822%, a weighted average remaining term to maturity of 343 months, and an average balance of $591,208. The mortgage loans consist of 100% fixed rate loans. The weighted average credit score of the mortgage loans is expected to be approximately 727. The loans are primarily located in California (26.67%), New York (10.39%) and Florida (7.73%). The mortgage loans were originated or acquired by CMI and in turn sold to CMSI. A special purpose corporation, CMSI, deposited the loans into the trust, which then issued the certificates. U.S. Bank National Association (rated 'AA-/F1+' by Fitch) will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as one or more real estate mortgage investment conduits. CLOROX COMPANY: Prices $500 Million Offering of 5% Senior Notes --------------------------------------------------------------- The Clorox Company has priced the offering of $500 million aggregate principal amount of its 5% senior notes due 2013 in an underwritten registered public offering. The offering was made pursuant to an effective shelf registration statement Clorox filed with the Securities and Exchange Commission on Oct. 3, 2007. The offering is expected to close on March 3, 2008, subject to customary closing conditions. Clorox intends to use the net proceeds from the offering to retire commercial paper. Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Wachovia Capital Markets LLC acted as joint lead book-running managers. Copies of preliminary prospectus supplement and an accompanying prospectus are available by contacting: a) Citigroup Global Markets Inc. 388 Greenwich St. New York, NY 10013 Tel (877) 858-5407 b) J.P Morgan Securities Inc. 270 Park Ave. New York, NY 10017 Tel (212) 834-4533 c) Wachovia Capital Markets LLC 301 South College St. Charlotte, NC 28202 Tel (800) 326-5897 About The Clorox Company Headquartered in Oakland, California, The Clorox Company (NYSE: CLX) -- http://www.thecloroxcompany.com/-- manufactures and markets household cleaning products with fiscal year 2007 revenues of US$4.8 billion. Clorox markets some of consumers' most trusted and recognized brand names, including its namesake bleach and cleaning products, Green Works(TM) natural cleaners, Armor All(R) and STP(R) auto-care products, Fresh Step(R) and Scoop Away(R) cat litter, Kingsford(R) charcoal, Hidden Valley(R) and K C Masterpiece(R) dressings and sauces, Brita(R) water-filtration systems, Glad(R) bags, wraps and containers, and Burt's Bees(R) natural personal care products. Clorox has manufacturing facilities in China, Costa Rica, Dominican Republic, Malaysia, Panama, Peru, United Kingdom, among others. At Dec. 31, 2007, Clorox's balance sheet showed total assets of $4.85 billion and total liabilities of $5.4 billion, resulting to a stockholders' deficit of $0.55 billion. COLTRANE CLO: Fitch Cuts Ratings to "CC" on 4 Classes of Notes -------------------------------------------------------------- Fitch Ratings has downgraded 4 classes of notes issued by Coltrane CLO p.l.c. All classes remain on Rating Watch Negative by Fitch. These rating actions are effective immediately: -- EUR26,000,000 class B notes to 'CC' from 'CCC'; -- EUR45,000,000 class C notes to 'CC' from 'CCC'; -- EUR1,750,000 class D-1 notes to 'CC' from 'CCC'; -- EUR2,000,000 class D-2 notes to 'CC' from 'CCC'. On Feb. 25, 2008, Fitch received notice that Coltrane CLO p.l.c. had entered into an Event of Default as a result of a Threshold Value Event which remained uncured for five business days. Fitch has not received confirmation that the Controlling Class or the Trustee plan to liquidate the underlying loan collateral in the immediate near term. In the event that the Controlling Class or the Trustee chooses to liquidate the underlying loan collateral, subsequent rating action may be taken. Of note, since the last rating action on Feb. 20, 2008 in which Fitch downgraded 24 classes from nine total rate of return collateralized loan obligations, loan prices in the secondary market, as reported by the Loan Syndications and Trading Association, have remained relatively stable, slightly increasing to 86.84 as of Feb. 26, 2008 from 86.27 as of Feb. 15, 2008. As a result, the cushions in the transactions which have not yet breached their TRS termination or liquidation triggers remain relatively stable. Also, Fitch has confirmed that three transactions have enacted amendments or entered into agreements outside of the transaction to avoid breaching a termination trigger, or to prevent a liquidation of the portfolio in the case where a termination trigger has been breached. COMMODORE CDO: Moody's Reviews Junk Rating on $17.5 Million Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade these notes issued by Commodore CDO I, Limited. Class Description: $17,550,000 Class C Floating Rate Notes -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. COMMUNITY HEALTH: Posts $88MM Net Loss in Qtr. Ended December 31 ---------------------------------------------------------------- Community Health Systems Inc. reported financial and operating results for the three months and year ended Dec. 31, 2007. The company's net loss for three months was $88.26 million compared to net income of $53.62 million for the same period in the previous year. The company's net income for full year was $30.29 million compared to net income of $168.26 million in 2006. The consolidated financial results for the three months ended Dec. 31, 2007, reflect a 102.1% increase in total admissions compared with the same period in 2006. This increase is primarily attributable to hospitals acquired during 2007, including the former Triad hospitals. The company completed its acquisition of Triad Hospitals Inc. on July 25, 2007. With completion of the Triad acquisition, the company enhanced the scope of its operations and geographic diversity. Financial and statistical data reported includes Triad's operating results from July 25, 2007. In conjunction with the acquisition of Triad and the integration of the former Triad hospitals' accounting processes into the company, and a review of the company's contractual and bad debt allowances, various analyses were performed to assess the net realizable value of accounts receivable, including an updated analysis of historical cash collections. These analyses resulted in updating the assumptions used by the former Triad hospitals and management, well as changing the company's own estimates. Based upon these analyses, the financial results for the three months and year ended Dec. 31, 2007, include a change in estimates of the company's contractual and bad debt allowances. The acquisition of Triad necessitated changes in both companies' methodologies, well as provided additional data and a larger comparative population on which to base the company's estimates. The information developed from these analyses indicated lower rates of collectability resulting in the company increasing its contractual reserves and its allowance for doubtful accounts. The company believes these lower collectability rates are the result of an increase in the number of patients qualifying for charity care, reduced enrollment in certain state Medicaid programs and an increase in the number of patients who are indigent non-resident aliens. The impact of these changes decreased accounts receivable by $166.4 million, reduced net operating revenues by $96.3 million and increased the provision for bad debts by $70.1 million. This change reduced income from continuing operations by $105.4 million for the three months and year ended Dec. 31, 2007. Excluding the change in estimates, net operating revenues for the three months ended Dec. 31, 2007, totaled $2.625 billion, a 137.6% increase compared with $1.105 billion for the same period in 2006. Including the change in estimates, net operating revenues for the three months ended Dec. 31, 2007, totaled $2.528 billion, a 128.9% increase compared with $1.105 billion for the same period in 2006. "Our fourth quarter performance capped off a year of significant growth and progress for Community Health Systems," Wayne T. Smith, chairman, president and chief executive officer of Community Health Systems Inc., said. "We reached an important milestone in 2007 with the completion of the Triad acquisition and we have continued to focus on the integration of the Triad facilities into our portfolio of hospitals. We intend to build on our past success as a proven operator and leverage these assets to further extend our record of growth." During 2007, the company completed the acquisition of Triad Hospitals, Inc., well as the acquisition of hospitals in Ruston, Louisiana, and Valparaiso, Indiana. "We have continued to identify and execute on suitable acquisition opportunities," Mr. Smith added. "With the Triad acquisition, we have greatly expanded our market reach, and, more importantly, created the opportunity to enhance the level of healthcare in more communities throughout the country. Looking ahead, we will continue to pursue our strategy of recruiting qualified physicians, making suitable capital investments in our existing facilities and adding essential healthcare services that meet the needs of each community. We are excited about our prospects for 2008 and we remain focused on delivering value to both our shareholders and the communities we serve." At Dec. 31, 2007, the company's balance sheet showed total assets of $13.49 billion, total liabilities of $11.79 billion and total stockholders' equity of $1.71 million. About Community Health Systems Inc. Located in the Nashville, Tennessee, suburb of Franklin, Community Health Systems Inc. -- http://www.chs.net/-- (NYSE: CYH) operates general acute care hospitals in non-urban communities throughout the United States. Through its subsidiaries, the company currently owns, leases or operates 80 hospitals in 23 states. Its hospitals offer inpatient medical and surgical services, outpatient treatment and skilled nursing care. * * * Standard & Poor's Ratings Services placed Community Health Systems Inc.'s long term foreign and local issuer credit ratings at 'B+' in June 2007. The ratings still hold to date. CORNERSTONE MINISTRIES: Wants Scroggins & Williamson as Counsel --------------------------------------------------------------- Cornerstone Ministries Investments Inc., asks the U.S. Bankruptcy Court for the Northern District of Georgia for permission to employ Scroggins & Williamson as its bankruptcy counsel. Scroggins & Williamson will: a. prepare pleadings and applications; b. conduct examinations; c. advise the applicants of its rights, duties and obligations as debtor-in-possession; d. consult the applicant and represent it with respect to a Chapter 11 plan; e. perform legal services incidental and necessary to the day-to-day operation of the applicant's business including, but not limited to, institution and prosecution of necessary legal proceedings and general business and corporate legal advice and assistance; f. take any and all actions incidental to the proper &