T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 7, 2008, Vol. 12, No. 57 Headlines AAR CORP: To Merge Acquired Avborne with MRO Segment in Miami AMBAC FINANCIAL: Offering Can Retain 'Aaa' Rating, Says Moody's ANF DEER CREEK: Case Summary & 21 Largest Unsecured Creditors ATLANTIS PLASTICS: Moody's Puts Probability of Default at Ca/LD BAYOU GROUP: 47 Investors Face Lawsuits Over Fraudulent Transfers BEAZER HOMES: Weak Performance Cues Fitch to Chip Ratings BLUE WATER: Gets Interim OK to Borrow $27.5MM from Citizens Bank BLUE WATER: Creditors Panel Wants Interim DIP Order Vacated BLUE WATER: Sec. 341 Meeting of Creditors Set for March 24 BLUE WATER: Seeks Authority to Assume Molding Contracts BLUE WATER: CIT Entities Wants Adequate Protection Payments BRODERICK CDO: Moody's Downgrades Ratings on Eight Note Classes CHAMP CAR: Case Summary & 20 Largest Unsecured Creditors CHRYSLER LLC: Plastech Agrees to Continue Supply Until March 17 CIRRUS LOGIC: Investigation of Stock Option Practices Completed CMS ENERGY: Net Loss Increases to $227MM in Year Ended December 31 CORNERSTONE MINISTRIES: U.S. Trustee, Panel Want Full Disclosure CORNERSTONE MINISTRIES: U.S. Trustee Appoints Seven-Member Panel COUNTRYWIDE FIN'L: Court Says "Negligent Bungling" Not "Bad Faith" COUNTRYWIDE FINANCIAL: BofA Says Deal Will Go On Despite Worries COUNTRYWIDE FINANCIAL: Sued Again by U.S. Trustee in Miami Case CATHOLIC CHURCH: Davenport's Disclosure Statement Needs Revision DOV PHARMA: Sells Future Royalties on Bicifadine for $1.6 Mil. EMC MORTGAGE: Fitch Downgrades Ratings on 20 Certificate Classes INYX USA: Disclosure Statement Doesn't Say Much for Creditors FAIRPOINT COMM: Paying $0.39781/Share Dividend on April 16 FIRST FRANKLIN: Mortgage Origination Biz Halted FORTUNOFF: Gets Final Nod on Togut Segal & Skadden Arp's Retention FORTUNOFF: Court Gives Final Nod on FTI Consulting's Retention FORTUNOFF: Landlords Balk at Assignment of Leases to New Owner GOODYEAR TIRE: Cost, Debt Reduction Prompts Fitch to Lift Ratings GSC ABS: Moody's Junks 'Aa2' Rating on $96 Million Notes HARTSHORNE CDO: Moody's Junks Rating on $133 Mil. Notes From 'B2' INGEAR CORP: Wants to Hire Harney Management as Financial Advisor INVERNESS MEDICAL: Plans to Close Unipath Operations in England IRIDIUM SATELLITE: Moody's Raises Corporate Family Rating to 'B2' ISLE OF CAPRI: Appoints Jim Perry as Chief Executive Officer ISLE OF CAPRI: Posts $14 Mil. Net Loss in Quarter Ended January 27 JUPITER HIGH: Moody's Junks Rating on $150 Million Notes From 'A2' JUPITER HIGH: Moody's Junks Rating on $150 Million Notes From 'A2' KEY DEVELOPERS: Voluntary Chapter 11 Case Summary KURLEMANN BUILDERS: Commences Chapter 7 Liquidation in Ohio MANCHESTER INC: Gets Interim Court Nod on Cash Collataral Use MCCALL CITY: Allowed to Issue Bonds; Contempt Hearing Called Off MIAMI BEACH FLA: Moody's Cuts Rating on Revenue Bonds to 'Ba2' MOST HOME: Receives $350,000 in Private Placement of Common Shares NATIONAL BEEF: Moody's Holds 'B2' Ratings; Changes Outlook to Neg NORTH AMERICAN SCIENTIFIC: James Klinger Resigns as CFO OKO-MED DOWNTOWN: Voluntary Chapter 11 Case Summary OZYMANDIUS LP: Court OKs $5.6 Mil. Kress Sale to Sound Warehouse PASA FUNDING: Moody's Reviews Ratings of Four Note Classes PASCACK VALLEY: Sells Assets For $45 Million to HUMC/Touro LLC PFP HOLDINGS: Wants to Hire Michael W. Carmel as Conflict Counsel PILGRIM'S PRIDE: Board Names J. Clinton Rivers as President & CEO PINNACLE POINT: Moody's Downgrades Ratings on Poor Credit Quality PLASTECH ENGINEERED: Supply Agreement Stretched to March 17 PRB ENERGY: Case Summary & 63 Largest Unsecured Creditors QUAKER FABRIC: Can File Chapter 11 Plan Until March 19 Says Court QUEBECOR WORLD: Cuts 30 Positions at Merced, California Facility QUEBECOR WORLD: Seeks OK to Pay Non-Worker Sales Commissions QUEBECOR WORLD: NFR Wants Stay Lifted and Base Contract Terminated R&B CONSTRUCTION: May Employ Chamberlain Hrdlicka as Attorneys REGAL ENTERTAINMENT: Fitch Assigns 'B-/RR6' Rating on $190MM Notes REGAL ENTERTAINMENT: Prices $190 Mil. Offering of Senior Notes RJ GROOVER: Case Summary & 13 Largest Unsecured Creditors R SCOTT FORD: Case Summary & 15 Largest Unsecured Creditors SAN PERMIS: Case Summary & 20 Largest Unsecured Creditors SECURITY CAPITAL: Files Notice of Late Filing With SEC on Form 10K SECURITY CAPITAL: 10-K Filing Delay Cues Moody's to Review Ratings SHARPER IMAGE: To Liquidate Underperforming Stores; Bids Due Today SIRVA INC: Court Oks Motion to Approve Equity Trading Restrictions SMITHFIELD FOODS: Moody's Holds Ba2 Ratings on $565 Mil. JBS Deal SMITHFIELD FOODS: Sells Beef Processing Unit to JBS for $565 Mil. SOUNDVIEW HOME: Fitch Puts 'B' Rated $2.6MM Cert. Under Neg. Watch SOUNDVIEW HOME: Fitch Chips Ratings on $3.4 Billion Certificates STOCKTON CDO: $81 Mil. Notes Get Moody's Junk Rating TAHOMA CDO: Eroding Credit Quality Prompts Moody's Rating Reviews TEMBEC INC: DBRS Rating at D on Failure to Complete Exchange Offer TROPICANA ENT: Appeals New Jersey Casino Commission's Verdict TROPICANA ENT: Moody's Pares Corp. Family Rating to Caa3 From Caa1 TYCO INTERNATIONAL: Sells Nippon Dry to Daiwa Securities' Unit US ENERGY: Gets Court Final Approval to Access Cash Collateral VESTA INSURANCE: FSIA Liquidation Voting Deadline Set to March 18 VESTA INSURANCE: FSIA's Solicitation Period Extended to May 19 WAMU ASSET-BACKED: Fitch Lowers Ratings on $2.3 Bil. Certificates WASTE SERVICES: Completes $57 Mil. Sale of Jacksonville Assets * Fitch Details Its Negative Outlook on US Title Insurers * Hugh McDonald Joins Thacher Proffitt as Bankruptcy Partner * KCP Advisory Appoints Jacen A. Dinoff as Principal and CEO * McGuireWoods and Helms Mulliss to Combine Into 900-Lawyer Firm * BOOK REVIEW: Voluntary Assignments for the Benefit of Creditors ********* 100 KING: Case Summary & Four Largest Unsecured Creditors --------------------------------------------------------- Debtor: 100 King LC 101 South Union Street Alexandria, VA 22314 Bankruptcy Case No.: 08-11068 Chapter 11 Petition Date: March 4, 2008 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Steven H. Greenfeld, Esq. Cohen Baldinger & Greenfeld LLC 7910 Woodmont Avenue Suite 760 Bethesda, MD 20814 Tel: 301-881-8300 Fax: 301-881-8350 steveng@cohenbaldinger.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Peter Mallios $800,000 12606 Hill Creek Lane Potomac, MD 20854 BB & T 1909 K. Street, NW $586,166 Second Floor Washington, DC 20006 American Energy Restaurant $286,816 Equipment 7538 Fullerton Court Springfield, VA 221153 Genops Construction $75,000 City of Alexandria $38,810 AAR CORP: To Merge Acquired Avborne with MRO Segment in Miami ------------------------------------------------------------- AAR Corp. completed the acquisition of Avborne Heavy Maintenance Inc. The acquired business will operate as part of the company's Maintenance, Repair and Overhaul segment as AAR Aircraft Services - Miami. The acquisition significantly increases the company's MRO capacity, workforce and capabilities. The move adds 226,000 square feet of modern hangar space at Miami International Airport and 467 aviation maintenance technicians, increasing AAR's hangar space by 22% and bringing the total number of AMTs at AAR to more than 2,000. "We're very impressed with the strong management team, skilled workforce and the high levels of customer satisfaction that they've achieved at Avborne," David P. Storch, chairman and chief executive officer of AAR CORP. "The acquisition expands our capacity and capabilities at a time when airlines are seeking ways to operate more efficiently, lower their operating expenses and combat the rising cost of fuel," said Mr. Storch. About Avborne Heavy Maintenance Inc. Avborne Heavy Maintenance Inc. is an independent provider of aircraft heavy maintenance checks, modifications and painting services located in Miami, Florida. Founded in 1985, Avborne performs heavy maintenance on both Airbus and Boeing aircraft at its 226,000 square-foot hangar, located at Miami International Airport. The Avborne facility is capable of accommodating up to three wide-body aircraft or nine narrow-body aircraft, simultaneously. About AAR Corp. Headquartered in Wood Dale, Illinois, AAR Corp. (NYSE: AIR) -- http://www.aarcorp.com/-- provides products and services to the worldwide aerospace and defense industry. With facilities and sales locations around the world, AAR uses its business model to serve aviation and defense customers through four operating segments: aviation supply chain; maintenance, repair and overhaul; structures and systems and aircraft sales and leasing. * * * As reported in the Troubled Company Reporter on Feb. 7, 2008, Standard & Poor's Ratings Services assigned its 'BB' rating to AAR Corp.'s proposed $175 million of convertible senior unsecured notes to be issued in two equal tranches: $87.5 million notes due 2014 and $87.5 million notes due 2016. At the same time, S&P affirmed its ratings, including the 'BB' corporate credit rating, on the company. The outlook is stable. AES-STELLAR INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: AES-Stellar Inc. 14012 Califa Street Van Nuys, CA 91401 Bankruptcy Case No.: 08-11309 Chapter 11 Petition Date: March 4, 2008 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Robert M. Yaspan, Esq. Law Offices of Yaspan & Thau 21700 Oxnard Street Ste. 1750 Woodland Hills, CA 91367 Tel: 818-905-7711 Fax: 818-501-7711 tmenachian@yaspanthau.com Estimated Assets: less than $50,000 Estimated Debts: $1,000,001 to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gold Pleasure Industrial Co. $1,615,484 7F, 1067 King's Road Hong Kong Alto $6,023 2867 Surveyor Street Pomona, CA 91768 Unity Property Investments $4,700 16039 Loukelton Street Industry, CA 91744 FedEx $2,000 South Bay Distribution $1,341 Netzel Associates Inc. $1,092 EDI Express $1,054 Banghart-Corin & Associates $769 Kahn & Comings, Inc. $713 Man Fu Yeung $653 CMA Inc. $647 Ronnie Yeung $461 Maan Yoong $399 Linda Lee Ying Cheung $392 Primus $300 Anna L. Hernandez $256 Gregory W. Crist $248 Dot-Line Transportation $162 Paychex $137 AT&T $70 AMBAC FINANCIAL: Offering Can Retain 'Aaa' Rating, Says Moody's --------------------------------------------------------------- Moody's Investors Service said in a news statement that Ambac Financial Group Inc., if successful with its equity offering of $1.5 billion, will likely retain its "Aaa" rating. Moody's said that it will evaluate Ambac's ability to raise capital at reasonable terms as an indication of the company's financial flexibility and overall level of support from investors. In Moody's view, Ambac's new equity and equity linked capital through a public offering represents an important component of its overall plan to strengthen the credit profile of its financial guaranty insurance subsidiary, Ambac Assurance Corporation. Various reports have said that investors are disappointed about Ambac's planned $1.5 billion cash infusion, as reflected in a recent dip of Ambac's shares. As reported in the Troubled Company Reporter on March 6, 2008, investors were displeased by major banks not helping out Ambac, instead letting the monoline insurer raise capital on its own. Ambac anticipated a proposed $3 billion financing deal offered by various banks. The company was willing to accept the $3 billion financing from the banks -- until the rating agencies advised against it. Out of an issuance of $1 billion of common stock and $500 million of equity units, Ambac found only a $1 billion demand for its shares, a person familiar with the issue told Reuters. Aside from the equity offering, Ambac is also pursuing a number of initiatives to strengthen risk-adjusted capitalization, including: -- a reduction in holding company dividends to shareholders -- a six-month moratorium on the writing of new structured finance business; -- targeted reinsurance strategies; -- implementation of substantive changes to its underwriting and risk management guidelines, including the discontinuation of certain structured finance and asset management activities, as well as the tightening of single risk limits. Moody's adds that the ratings of the Ambac group of companies are currently under review for possible downgrade, reflecting the weakened capital profile of the group as a result of its mortgage and mortgage-related CDO exposures. About Ambac Financial Based in New York City, Ambac Financial Group, Inc. is a holding company whose affiliates provide financial guarantees and financial services to clients in both the public and private sectors around the world. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. * * * On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. As reported Troubled Company Reporter on Jan. 17, 2008, Moody's Investors Service placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. ANF DEER CREEK: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: ANF Deer Creek, LLC 23792 Rockfield, Suite 200 Lake Forest, CA 92630 Bankruptcy Case No.: 08-11068 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: March 5, 2008 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: Leonard M Shulman, Esq. (lshulman@shbllp.com) Shulman Hodges & Bastian, LLP 26632 Towne Center Drive, Suite 300 Foothill Ranch, CA 92610 Tel: (949) 340-3400 Fax: (949) 340-3000 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Belfour USA Group trade debt $375,710 5870 La Costa Canyon Court, Suite 200 Las Vegas, NV 89139 Clark Co. Water Reclamation trade debt $51,614 District P.O. Box 98526 Las Vegas, NV 89193 Humphreys & Partners- trade debt $27,787 Architects 700 East Flamingo Road Las Vegas, NV 89119 Multifamily Community trade debt $26,450 Insurance Escalera Landscaping trade debt $24,020 AT Systems Security trade debt $23,094 Acme Security trade debt $19,141 World Cinema trade debt $18,216 Pircher, Nichols & Meeks trade debt $16,760 Stanley Consultants trade debt $16,371 Las Vegas Valley Water trade debt $11,203 District For Rent Magazine trade debt $8,847 Republics Services of South trade debt $7,624 Nevada Multifamily Community trade debt $6,490 Insurance Labor Finders trade debt $6,021 West Coast Flooring trade debt $5,967 US Landscape trade debt $5,679 Classic Design Group trade debt $5,483 Consumer Source trade debt $5,138 Las Vegas Pool Service trade debt $5,015 Las Vegas Pool & Spa Care trade debt $4,267 ANN-LEE CONSTRUCTION: Case Conversion Trial Continues on April 8 ---------------------------------------------------------------- The Honorable Jeffery A. Deller of the United Sates Bankruptcy Court for the Western District of Pennsylvania will continue the hearing of the conversion of Ann-Lee Construction and Supply Company, Inc.'s chapter 11 case into a chapter 7 liquidation proceeding at 10:00 a.m., on April 8, 2008, at the Courtroom D, 54th Floor, US Steel Tower in Pittsburgh, Pennsylvania. As reported in the Troubled Company Reporter on Dec. 27, 2007, the Court deferred the hearing to consider approval of Ann-Lee Construction's request to convert its case to Feb. 5, 2008. In its request, the Debtor told the Court that they have incurred additional losses from Jan. 11, 2007, to Aug. 17, 2007, and as a result, it was unable to meet its debts as they come due. The Debtor further said that it was unable to file a viable Chapter 11 plan and disclosure statement within the required time set by the Court. The Debtor's exclusive plan filing period expired on Sept. 19, 2007. About Ann-Lee Construction Based in Saltsburg, Pennsylvania, Ann-Lee Construction and Supply Company, Inc. offers construction consulting & management services. The company filed for Chapter 11 protection on Jan. 11, 2007 (Bankr. W.D. Pa. Case No. 07-20226). Michael J. Henny, Esq. and Joseph V. Luvara, Esq. represent the Debtor in its restructuring efforts. Kirk B. Burkley, Esq., at Bernstein Law Firm PC, represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $1 million to $100 million. ARROW ELECTRONICS: To Buy Achieva's Components Distribution Biz --------------------------------------------------------------- Arrow Electronics Inc. has signed a definitive agreement pursuant to which Arrow will purchase the components distribution business from parent company Achieva Ltd., a value-added distributor in Asia Pacific. Arrow anticipates the transaction will be immediately accretive to earnings in the first twelve months by $0.01 to $0.03 per share and will meet the companys acquisition objectives for return on invested capital. The transaction is subject to approval by the shareholders of Achieva Ltd. and is expected to close in the next 60 to 90 days. "Achieva will further strengthen our position in the ASEAN (Association of Southeast Asian Nations) and greater China markets and enhance our existing demand creation capabilities," said William E. Mitchell, chairman, president and chief executive officer of Arrow Electronics, Inc. "With this acquisition, Arrow will gain strong, established relationships with major semiconductor suppliers that will expand our line card as well as build upon existing partnerships. The Achieva management team is highly experienced and will be an impressive addition of bench strength to position Arrow for continued profitable growth in the Asia Pacific region," added Mr. Mitchell. Achieva is focused on creating value for its partners through technical support and demand creation activities. The companys product range covers semiconductor components such as application specific integrated circuits, programmable logic devices, digital signal processing chips and microchip-controller units. With over 200 employees, the company has a presence in eight countries (Singapore, Taiwan, China, India, Malaysia, Philippines, Thailand, and Korea) and primarily serves small and medium sized customers in the data communications, telecommunications, lighting, industrial and digital consumer end markets. Total 2006 sales were approximately $200 million. About Arrow Electronics Headquartered in Melville, New York, Arrow Electronics Inc. -- http://www.arrow.com/-- provides products, services and solutions to industrial and commercial users of electronic components and computer products. Arrow serves as a supply channel partner for nearly 600 suppliers and more than 130,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of over 270 locations in 53 countries and territories. The company operates in France, Spain, Portugal, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden, Italy, Germany, Austria, Switzerland, Belgium, the Netherlands, United Kingdom, Argentina, Brazil, Mexico, Australia, China, Hong Kong, Korea, Philippines and Singapore. * * * Arrow Electronics senior subordinated stock continues to carry Moody's Investors Service's Ba1 rating. The company's senior preferred stock is rated at Ba2. ATLANTIS PLASTICS: Moody's Puts Probability of Default at Ca/LD --------------------------------------------------------------- Moody's Investors Service revised the Probability of Default Rating of Atlantis Plastics, Inc. to Ca/LD following the company's failure to pay the interest on its $75 million junior term loan due 2012. The outlook remains negative. Moody's took these rating actions: -- Affirmed, $25 million revolving credit facility due 2011, Caa3 (LGD 3, 42%) -- Affirmed, $120 million senior term loan due 2011, Caa3 (LGD 3, 42%) -- Affirmed, $75 million junior term loan due 2012, C (LGD 5, 89%) -- Affirmed, Corporate Family Rating, Ca -- Revised, Probability of Default Rating, to Ca/LD from Ca (to reflect the actual defaulted status of the $75 million junior term loan due 2012) -- Affirmed, Speculative Grade Liquidity Rating SGL-4 Moody's previously downgraded the Corporate Family Rating of Atlantis's to 'Ca' on Jan. 16, 2008. The downgrade reflected the company's lack of success in negotiating a waiver and amendment to its Credit Facilities for the breach of financial covenants, lack of liquidity and likely impairment of the debt instruments on an enterprise value basis. The company continues to seek a forbearance agreement with its senior lenders. On Jan. 18, 2008, Atlantis engaged Houlihan, Lokey, Howard & Zukin as its exclusive financial advisor to assist the Company in evaluating strategic alternatives, including a possible sale transaction. Atlantis Plastics, Inc., headquartered in Atlanta, Georgia, is a manufacturer of specialty polyethylene films and molded and extruded plastic components used in a variety of industrial and consumer applications. Atlantis has 15 manufacturing plants located throughout the United States. Revenues for the twelve months ended Sept. 30, 2007 were $398 million. AUSTINBURG PROPERTIES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Lead Debtor: Austinburg Properties, LLC 3864 Center Road Suite A-18 Brunswick, OH 44212 Bankruptcy Case No.: 08-50651 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- 138 Mazal Health Care, Ltd. 08-50655 Dani Family Ltd. 08-50657 Willow Interests, LLC 08-50653 Type of Business: The Debtor is a real estate corporation. Chapter 11 Petition Date: February 29, 2008 Court: Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Theodore T. Mairanz, Esq. Neiman & Mairanz P.C. 39 Broadway 25th Floor New York, NY 10006 Tel: (212) 269-1000 tmairanz@ngmpc.com Austinburg Properties LLC's financial condition: Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtors did not file a list of their 20 Largest Unsecured Creditors. BAYOU GROUP: 47 Investors Face Lawsuits Over Fraudulent Transfers ----------------------------------------------------------------- Bayou Group LLC and its debtor-affiliates delivered 47 adversary complaints to the Hon. Adlai S. Hardin Jr. of the United States Bankruptcy Court for the Southern District of New York, seeking to recover certain fraudulent transfers made by investors against the Debtors. Bayou Fund expects to recover at least $8 million, according to Bill Rochelle of Bloomberg News. These investors were named in the lawsuits, among other things: -- Somers & Co. FBO RCG Absolute Return Fund, LLC; -- Preferred Investors L.P.; -- The Carlyle Group, Inc.; -- Advisory Select Enhanced Opportunity Fund, LLC; -- William F. Wheeler Jr. and William F. Wheeler Jr.; -- Wells Street Partners LLC; -- Tact American Fund, LLC; -- Stern Investment Holdings (Bermuda) Ltd.; -- Rodger Bemel and Rodger Bemel; -- Robert P. McNeill; -- Ricardo C. Oelkers; -- Marvin D. Snyder and Marvin D. Snyder; -- PinOak Partners, L.P.; -- Narendra Gidwani; -- Moshe & Gabrielle Tsabag Charitable Foundation; -- MCEL Pension Plan and Profit Sharing Plan; -- LeBlanc Enterprises, Ltd., LeBlanc 2000 Trust; -- on Vein, Ellen Goldsmith Vein; and -- John C. Williams. Moreover, Bayou Fund asks the Court to disallow any claims filed by these investors against its parent, until investors have returned all fraudulent transfers which are in question under the complaints. The Debtors relates that these adversary proceedings arises from a massive fraudulent investment scheme committed by the Bayou entities, which controlled private pooled investment hedge funds. The Bayou entities are: -- Bayou Management LLC; -- Bayou Advisors LLC; -- Bayou Equities LLC -- Bayou Fund LLC; -- Bayou Superfund; -- Bayou No Leverage Fund LLC; -- Bayou Affiliates Fund LLC; and -- Bayou Accredited Fund LLC. The Debtor says that the Bayou entities have attracted at least $450 million in investments for their hedge funds before suffering millions of dollars in trading losses. Tracy L. Klestadt, Esq., at Klestadt & Winters LLP in New York, said the Bayou entities attempted to stay afloat and prolonged the scheme by disclosing false investment performance and creating false financial statements. In addition, the entities attempted to conceal their losses through a series of fraudulent transfers to certain of their investor creditors, Mr. Klestadt adds. As a result, the Bayou entities used their depleted capital and capital from new investors to pay redemption proceeds to investor creditors seeking to exit the hedge funds, according to the complaint. These redemption proceeds were paid based on inflated statements of what the investments were worth and with fraudulent intent by the the Bayou entities. Consequently, the Bayou entities' fraudulent investment scheme collapsed, with at least $250 million in principal unpaid to hundreds of creditors. The Debtors seeks the return of the fictitious investment gains fraudulently transferred to redeeming investors so that the funds can be equitably redistributed pro rata to all of the Bayou entities' creditors. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Case No. 06-22306) in order to pursue recoveries for the benefit of defrauded investors. Bayou also filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil at Jenner & Block was appointed on April 28, 2006 as the federal equity receiver. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represents the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents the Sonnenschein Investors. When the Debtors filed for protection from their creditors, they estimated assets and debts of more than $100 million. BEAZER HOMES: Weak Performance Cues Fitch to Chip Ratings --------------------------------------------------------- Fitch Ratings has downgraded Beazer Homes USA, Inc.'s Issuer Default Rating and other outstanding debt ratings as: -- IDR to 'B+' from 'BB-'; -- Senior notes to 'B/RR5' from 'BB-'; -- Convertible senior notes to 'B/RR5' from 'BB-'; -- Junior subordinated debt to 'CCC+/RR6' from 'B'. Fitch has also assigned this Recovery Rating to Beazer's credit facility, as highlighted below: -- Secured revolving credit facility 'BB/RR1'. The 'RR1' on Beazer's secured revolving credit facility indicates outstanding recovery prospects for holders of this debt issue based on the information currently available. The 'RR5' on Beazer's senior unsecured notes indicate below-average recovery prospects for holders of these debt issues. Beazer's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on Beazer's junior subordinated notes indicate poor recovery prospects in a default scenario. Fitch applied a liquidation value analysis for these RRs. The downgrade of the IDR reflects Beazer's performance amidst continued challenging market conditions. Beazer's net new orders continue to be weak and cancellation rates remain elevated. While Beazer has generated cash flow and improved its cash position over the past five quarters, the company has not paid down debt significantly. During its fiscal 2008 first quarter, Beazer repaid $75 million of secured indebtedness. Beazer's ratings remain on Rating Watch Negative due to the company's inability to make a timely filing of its Form 10Q and Form 10K with the Securities and Exchange Commission. Beazer has until May 15, 2008 to file its financial statements in order to avoid an Event of Default under its bank credit facility and bond indentures. Furthermore, there is uncertainty as to the financial impact of Beazer's potential liability as well as regulatory fines related to the violations found within its mortgage subsidiary. Beazer reported preliminary home closings of 2,010 homes during its fiscal 2008 first quarter ended Dec. 31, 2007, a 24% decline from the same period last year. Net new orders totaled 1,260 homes, a 29% drop from last year's first quarter. The cancellation rate for the fiscal 2008 first quarter was 46%. Beazer had cash of approximately $325 million at Dec. 31, 2007, compared with about $459.5 million at Sept. 30, 2007. The company has a $500 million secured revolving credit facility with no outstandings and $92 million of letters of credit. The company has sufficient real property that, if added to the collateral pool, would allow it to fully access the total $500 million commitment under the credit facility. For all of fiscal 2008, Beazer expects to be cash flow positive, to be aided in part by the company's decision to exit certain markets and reduce land and development spending in fiscal year 2008. Furthermore, Beazer recently suspended its quarterly dividend, which should save the company about $16 million this year. In February 2008, Beazer announced its decision to exit its homebuilding operations in Charlotte, North Carolina, Cincinnati / Dayton, Ohio, Columbia, South Carolina, Columbus, Ohio, and Lexington, Kentucky during fiscal year 2008. Management is evaluating its current land holdings and inventory in each of these markets to determine the appropriate methods and timing for disposition. Beazer intends to complete all homes under construction and is committed to maintaining customer care resources to provide ongoing warranty service to homeowners through their warranty periods. Beazer also announced the discontinuation of mortgage origination services through Beazer Mortgage Corporation. Beazer established a new marketing services arrangement with Countrywide, whereby Beazer will market Countrywide as the preferred mortgage provider to Beazer customers. Resolution of the Negative Rating Watch will be based on the company filing its Form 10Q and its Form 10K with the Securities and Exchange Commission. As previously announced, Beazer reported that its Audit Committee determined that it will be necessary for the company to restate its financial statements relating to fiscal years 2004 through 2006 and the interim periods of fiscal 2006 and fiscal 2007. The resolution of the on-going external investigations will be considered in resolving Beazer's Rating Watch Status. Future ratings and Outlooks will also be influenced by broad housing market trends as well as company specific activity, such as trends in land and development spending, general inventory levels, speculative inventory activity, gross and net new order activity, debt levels and free cash flow trends and uses. BLUE WATER: Gets Interim OK to Borrow $27.5MM from Citizens Bank ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan issued an interim order authorizing Blue Water Automotive Systems, Inc., and its debtor-affiliates to obtain postpetition loans not to exceed $27,500,000 from Citizens Bank. The Court's order will be deemed final absent timely filed objections to the loan by parties-in-interest by March 28, 2008. The Court will convene a hearing on March 31 if the Debtors receive objections to the loan, which requires the provision of financial accommodations by certain of Blue Water's major customers. Citizen's Bank will provide the Debtors with a $35,000,000 revolving credit facility, including up to $24,000,000 of "overformula advances", upon final approval of the DIP Loan. The Court also authorizes the Debtors to make intercompany loans not exceeding $3,000,000, to non-operating debtor-affiliates from the DIP proceeds. The Court further authorizes the Debtors to enter into an accommodation agreement with Ford Motor Company, Automotive Component Holding, Inc., and AutoAlliance International, Inc., and to grant these customers access rights in exchange for certain credit enhancements. Until the time (x) as Citizens Bank is satisfied with the results of its examination of the Debtors' books and records, and (y) payment of $1,720,000, with respect to the postpetition liens of certain customers of the Debtors pursuant to the Cash Collateral Orders are made into escrow, all advances will be treated as Overformula Advances. All liens of the customers will be transferred to the proceeds of the escrow, subject to the resolution of the validity, existence, and priority of the liens. Subject to Citizens Bank's satisfaction with its due diligence, it will make loans based on this borrowing base formula: * up to 90% of Accommodating Customer Eligible Accounts; plus * up to 85% of Eligible Accounts other than Accommodating Customer Eligible Accounts; plus * up to 75% of the cost of Accommodating Customer Inventory; plus * up to 35% of the cost of Eligible Inventory other than Accommodating Customer Eligible Inventory; minus * the "Reserves." Reserves refer to Borrowing Base reserves imposed from time-to- time by Citizens Bank, including reserves for the Carve-Out, reserves for Permitted Liens on accounts or inventory that are senior to the liens of Citizens Bank, and reserves in respect of any adequate protection payments to the DIP agent. In addition to the In-Formula Loans, Citizens Bank will lend up to an amount equal to the difference between $35,000,000, and the outstanding amount of In-Formula Loans made according to the Borrowing Base, not to exceed $24,000,000, of Overformula Advances. Overformula Advances will only be made if they are fully guaranteed by Ford Motor Company and other Accommodating Customers acceptable to Citizens Bank. As between all other Postpetition Indebtedness, the Overformula Advances will be subordinate in all respects. The DIP Loans will bear interest at: Loans Interest Rate ----- ------------- Postpetition Loans that Prime Rate, plus are not Overformula Advances 1.25% per annum on the outstanding day-to-day principal balance Overformula Advances Prime Rate per annum, plus 0.50% per annum on the outstanding day-to-day principal balance DIP Loans 2.0% per annum on top of the other applicable interest rates from and after an Event of Default Interest on the DIP Loans will be due and payable on the first business day of each month in arrears and all interest will be calculated based on a 360-day year. The Court directs the Debtors to pay Citizens Bank (i) a non- refundable $250,000 facility fee; (ii) a $5,000 monthly collateral monitoring fee; (iii) a fee of 0.25% time the average daily unused portion of the DIP Facility; and (iv) all reasonable fees and expenses incurred by the Bank in monitoring, administering, or providing financing, including its attorneys' fees, and fees and costs associated with the Bank's Court appearance. Citizens Bank will apply the $50,000 expense deposit received from certain affiliates of KPS Special Situations Fund I, L.P., on February 12, 2008, toward payment of the DIP Lender Expenses. KPS Fund is the Debtors' ultimate parent company. To secure the Debtors' obligations on account of the DIP Loans, including principal, interest, the Loan Fees and Lender Expenses, Citizens Bank is granted: (i) a lien and security interest in the Prepetition Collateral junior in priority only to the Existing Liens; (ii) a first priority lien and security interest in the Postpetition Collateral; and (iii) a first priority lien and security interest in any of the Collateral that is not otherwise subject to a lien under Section 364(c)(2) of the Bankruptcy Code. The Court clarifies that the Postpetition Collateral does not include any causes of action or judgments or proceeds of the causes of action against any entity arising under Chapter 5 of the Bankruptcy Code. The superpriority administrative claims granted to Citizens Bank and the liens securing the claims will be subject to the Carve- Out, which refers to the budgeted amount per month to be paid to bankruptcy professionals hired by the Debtors and any Court- appointed committees, Chapter 7 Trustee fees and fees to be paid to the Clerk of the Court. The Carve-Out includes a $100,000 retainer to each of Foley & Lardner LLP and Huron Consulting Group, plus an additional $850,000 for the Debtors' bankruptcy professionals and $150,000 for any committee's bankruptcy professionals. The superpriority administrative claims and Section 364(c)(1) claims that are being granted to Citizens Bank are limited to the deficiency, if any, in the amount collected by the bank with respect to its In-Formula Advances. The DIP Loans will be due and payable on the earliest of (i) September 30, 2008; (ii) the occurrence of an Event of Default; (iii) the sale of all or substantially all of the Debtors' assets; or (iv) the effective date of any confirmed plan of reorganization. Citizens Bank, the Accommodating Customers, any of the Debtors' customers, or any other party is not granted a lien, security interest, or right in any Collateral that "primes" or is superior to any enforceable, unavoidable, prepetition lien or security interest. The Debtors will furnish regularly to Citizens Bank, the DIP Agent and the Accommodating Customers financial and inventory reports as sought by the Bank. Provisions to Prepetition Lenders >From the proceeds of the DIP Credit Facility, the Debtors will pay $13,651,819 to The CIT Group/Business Credit, Inc., in its capacity as agent, as settlement and payment in full of all obligations owed by the Debtors with respect to the Amended and Restated Loan and Security Agreement dated as of July 18, 2006, calculated as: Principal Balance on Petition Date $17,230,720 Less: Payments through March 3, 2008 (4,814,316) Accrued Pre- and Post-Petition Interest 259,943 Agreed Upon Cap of Fees and Expenses 805,000 ----------- $13,651,819 The Debtors will also pay $2,500,000, into an escrow account at one of the CIT Group Lenders in full payment of the Prepetition Lenders' liens and security interests in the Revolving Loan First Lien Collateral, other than the liens of CIT, as lessor, in the equipment. CIT will have a perfected and unavoidable first perfected security interest in the Escrow Account. A full-text copy of the Interim DIP Order is available for free at http://bankrupt.com/misc/bluewater_InterimDIPOrder.pdf Sale Process Milestones Blue Water's accommodation agreement with the Participating Customers provides that the process to sell all or substantially all of the Debtors' assets will be conducted in accordance with these milestones: April 15, 2008 -- Obtain a letter of intent to sell Debtors' assets May 28, 2008 -- Execute a definitive purchase agreement with a Qualified Buyer and file a motion seeking Court's approval of the sale on the terms outlined in the definitive agreement June 20, 2008 -- Obtain Court approval of the proposed sale June 30, 2008 -- Close the sale The financial accommodations granted by the Participating Customers will expire on May 31, 2008, but will be extended to June 30, 2008, if the definitive agreement is executed by May 28. A full-text copy of the Accommodation Agreement is available for free at http://bankrupt.com/misc/bluewater_AccommodationPact.pdf About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Creditors Panel Wants Interim DIP Order Vacated ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Blue Water Automotive Systems, Inc., and its debtor-affiliates' cases has taken an appeal from the interim order issued by the U.S. Bankruptcy Court for the Eastern District of Michigan authorizing the Debtors to obtain postpetition loans not to exceed $27,500,000 from Citizens Bank. The Creditors Committee wants the U.S. District Court for the Eastern District of Michigan, Southern Division, to determine whether: (a) the Interim DIP Order be vacated and the matter remanded to the Bankruptcy Court; (b) the Bankruptcy Court erred in granting the DIP Financing Motion and in entering the Interim DIP Order where the Order: -- allows the Debtors to incur up to $15,000,000, in additional debt secured by liens and superpriority claims on all the Debtors' assets; -- renders the Debtors immediately and irreversibly administratively insolvent; -- compels the sale of all the Debtors' operating assets on an expedited basis and allows the Debtors' customers veto rights on any potential purchaser; -- waives the Debtors' rights to reject their unprofitable contracts with their customers, even though those are the same contracts that rendered the Debtors insolvent in the first place; -- waives and releases all claims against the prepetition lenders where the prepetition lenders' highly inequitable and possibly illegal actions in sweeping funds advanced by Ford forced the Debtors into bankruptcy, and where the Committee has had no opportunity to review those claims; -- permits the Debtors' customers to take over and operate the Debtors' business at any time if the customers feel that the continued production of their parts is in any way threatened; and -- prevent the Debtors, the Committee, or any other party-in-interest from confirming any plan of reorganization, and giving the customers veto rights over any proposed plan of liquidation; (c) the Bankruptcy Court erred in finding that the Debtors would be irreparably harmed if not permitted to spend $15,000,000, before the Interim DIP Order could become a final order; and (d) the Bankruptcy Court erred in finding that the DIP Lenders extended credit to the Debtors in good faith. The Creditors Committee, two days before the Bankruptcy Court issued the Interim DIP Order, filed an objection to the DIP Motion asserting that the Debtors have failed to (i) demonstrate that their management has fulfilled their fiduciary duty to unsecured creditors; and (ii) support their case for borrowing money, which will never be repaid to the prejudice of unsecured creditors, just to provide a controlled sale or liquidation for the benefit of the Accommodating Customers who continue to enjoy prices that result in Debtors' substantial operating losses. "It is not an exaggeration to say that the Financing Motion is intended only to benefit the customers with no concern whatsoever for maximizing the value of the estate or protecting either administrative or unsecured creditors," Ryan D. Heilman, Esq., at Schafer and Weiner, PLLC, in Bloomfield Hills, Michigan, argues. H.S. Die & Engineering, Inc., and Tri-Way Manufacturing Inc., also objected to the DIP Motion to the extent that it does not clarify the Debtors' intentions with respect to the security interests held by H.S. Die and Tri-Way. H.S. Die says the Debtors owe it $98,150, for prepetition purchases of tooling, while Tri-Way says the Debtors owe it $364,910, for prepetition delivery of goods. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Sec. 341 Meeting of Creditors Set for March 24 ---------------------------------------------------------- Habbo Fokena, the United States Trustee for Region 9, will convene a meeting of creditors in Blue Water Automotive Systems, Inc.'s Chapter 11 case, on March 24, 2008, at 2:00 p.m., at Room 315 D, 211 W. Fort St. Bldg., in Detroit, Michigan. 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. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Seeks Authority to Assume Molding Contracts ------------------------------------------------------- In the ordinary course of their businesses, Blue Water Automotive and its four debtor-affiliates issue purchase orders with various molding contractors that provide the terms and conditions of, among other things, manufacture, payment and delivery. The Debtors need molds to launch new programs or continue existing programs, and they must obtain them in a timely manner to meet their production schedule with the original equipment manufacturers. If the molds are not produced or are delivered late, the Debtors could be in breach of their obligations to the OEMs, Judy A. O'Neill, Esq., at Foley & Lardner LLP, in Detroit, Michigan, says. In that event, the OEMs could be forced to shut down production lines or miss launch dates because the Debtors were not able to timely deliver component parts, leading to significant damage claims from the OEMs, Ms. O'Neill adds. The Debtors stand to lose considerable business and loss of reputation if any OEM production lines are shut down, Ms. O'Neill tells the Court. Thus, by this motion, the Debtors seek authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to assume: (a) certain molding contracts, a list of which is available for free at: http://bankrupt.com/misc/bluewater_MoldingPacts.pdf (b) certain contracts for design or testing services necessary to the fabrication and approval of the Molds, a list of which is available for free at: http://bankrupt.com/misc/bluewater_MoldServicesPacts.pdf The Debtors also seek the Court's authority to cure any defaults under the Molding Contracts and the Mold Service Contracts, and pay all other debts under them as they arise in the ordinary course of business either: (i) by agreements with the OEMs; or (ii) other customers providing that the customers will pay the Contractors directly; or payments by the customers will be made to the Debtors, which will be escrowed or set aside so that funds are dedicated to the payment of the Contractors. Mr. O'Neill tells the Court that the Debtors currently are negotiating with their customers on the payment approaches, and have secured preliminary consents in many instances. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: CIT Entities Wants Adequate Protection Payments ----------------------------------------------------------- CIT Group/Equipment Financing, Inc., and CIT Capital USA, Inc., ask the U.S. Bankruptcy Court for the Eastern District of Michigan to: (a) lift the automatic stay to enforce the prepetition agreements with the Debtors; or (b) grant them adequate protection from the Debtors' continued use of property securing the Debtors' obligations under the Prepetition CIT Agreements. Shalom L. Kohn, Esq., at Sidley Austin LLP, in Chicago, Illinois, relates that the Debtors and CIT Capital are parties to a Promissory Note, which is secured by certain mortgages encumbering the Debtors' properties in Tuscola, Sanilac, and St. Clair Counties, Michigan; certain Assignments of Rents and Leases; and an Indemnity and Guaranty Agreement, dated May 17, 2006. In addition, the Debtors and CIT Equipment Financing, Inc., are parties to a prepetition Master Lease Agreement under which CIT Equipment Financing provided financing or financing leases for the Debtors' benefit. The Debtors' obligations under the Lease Agreement is secured by: (a) all plastic injection and bold molding machinery and related support equipment like resin drying, blending loading and granulating equipment; (b) all parts, and their replacements, accessions, additions, alterations, and modifications; (c) all rights, interests, choses in action, causes of action, claims and all other intangible property of any kind or nature related to the foregoing personal property; (d) all payments under any insurance, or any indemnity, warranty, or guaranty payable by reason of loss or damage to or otherwise with respect of any of the foregoing; and (e) all proceeds and products of any of the foregoing. Mr. Kohn says that the CIT Entities have perfected their security interests in the Debtors' properties and equipment securing the Debtors' obligations under the Prepetition CIT Agreements. Mr. Kohn adds that as of the Petition Date, Debtors owed CIT Capital $14,831,875, under the Loan Documents, and $14,314,584, under the Master Lease Agreement. Mr. Kohn asserts it is necessary to lift the automatic stay for the CIT Entities to enforce the Prepetition Agreements against the Debtors because the Debtors have been using CIT's Collateral since the Petition Date without providing adequate assurance payments to CIT. Mr. Kohn relates that CIT has asked the Debtors for adequate protection payments to CIT Equipment Financing but the Debtors refused and stated that if CIT desired adequate protection it would have to file a motion and lift the automatic stay. Mr. Kohn adds that the Debtors' refusal to provide adequate protection is even more disturbing because their books and records show that their real estate and equipment are depreciating $797,000, per month. Mr. Kohn adds that the Debtors have failed to provide CIT with periodic cash payments as compensation for the continued depreciation of the Collateral. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BRODERICK CDO: Moody's Downgrades Ratings on Eight Note Classes --------------------------------------------------------------- Moody's Investors Service downgraded ratings of eight classes of notes issued by Broderick CDO 2 Ltd., and left on review for possible further downgrade the rating of four of these classes of notes. The notes affected by this rating action are: Class Description: $876,000,000 Class A-1 AD First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2049 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $500,000,000 Class A-1 AT First Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $42,000,000 Class A-1B Second Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $70,000,000 Class A-2 Third Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $67,600,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due 2049 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $23,500,000 Class C Fifth Priority Senior Deferrable Secured Floating Rate Notes Due 2049 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: C Class Description: $8,000,000 Class D Sixth Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2049 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: C Class Description: $4,900,000 Class E Seventh Priority Mezzanine Deferrable Secured Floating Rate Notes Due 2049 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on Feb. 27, 2008, of an event of default caused by a failure of the Class A Sequential Pay Ratio to be greater than or equal to 100 per cent pursuant Section 5.01(i) of the Indenture dated Sept. 1, 2006. Broderick CDO 2 Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders following the event of default. Because of this uncertainty, the ratings assigned to Class A-1 AD Notes, Class A-1 AT Notes, Class A-1B Notes, and Class A-2 Notes remain on review for possible further action. CARAUSTAR INDUSTRIES: S&P Chips Ratings to 'B-' on Weak Earnings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Caraustar Industries Inc., including its corporate credit rating, to 'B-' from 'B+'. The outlook is negative. "The downgrade reflects continuing weak earnings and cash flow, lower-than-expected liquidity, and refinancing risk," said Standard & Poor's credit analyst Pamela Rice. "Fourth-quarter 2007 earnings were substantially weaker than expected. In addition, margin pressure from raw material and energy costs persists, and the realization of recently announced price increases is uncertain. We are also concerned about the company's ability to address the June 1, 2009, maturity of its $190 million senior unsecured notes given the challenging credit markets." Caraustar had about $315 million of total debt, including debt- like obligations, at Dec. 31, 2007. Austell, Georgia-based Caraustar is one of the largest U.S. manufacturers of 100% recycled paperboard. "We could lower the ratings if Caraustar's profitability worsens in the next few quarters, if market conditions deteriorate, or if liquidity narrows," Ms. Rice said. "We could also lower the ratings if the company is unable to address its June 2009 debt maturity in a manner that does not harm credit quality. We could revise the outlook to stable if the company is able to realize sufficient benefits from its rationalization and cost-reduction efforts and price increases to meaningfully improve earnings over the next few quarters and successfully refinances or repays its maturing debt." CARAUSTAR INDUSTRIES: S&P Chips Ratings to 'B-' on Weak Earnings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Caraustar Industries Inc., including its corporate credit rating, to 'B-' from 'B+'. The outlook is negative. "The downgrade reflects continuing weak earnings and cash flow, lower-than-expected liquidity, and refinancing risk," said Standard & Poor's credit analyst Pamela Rice. "Fourth-quarter 2007 earnings were substantially weaker than expected. In addition, margin pressure from raw material and energy costs persists, and the realization of recently announced price increases is uncertain. We are also concerned about the company's ability to address the June 1, 2009, maturity of its $190 million senior unsecured notes given the challenging credit markets." Caraustar had about $315 million of total debt, including debt- like obligations, at Dec. 31, 2007. Austell, Georgia-based Caraustar is one of the largest U.S. manufacturers of 100% recycled paperboard. "We could lower the ratings if Caraustar's profitability worsens in the next few quarters, if market conditions deteriorate, or if liquidity narrows," Ms. Rice said. "We could also lower the ratings if the company is unable to address its June 2009 debt maturity in a manner that does not harm credit quality. We could revise the outlook to stable if the company is able to realize sufficient benefits from its rationalization and cost-reduction efforts and price increases to meaningfully improve earnings over the next few quarters and successfully refinances or repays its maturing debt." CARLYLE CAPITAL: Misses Margin Calls and Gets Notice of Default --------------------------------------------------------------- Carlyle Capital Corporation Limited said that since filing its annual report on Feb. 28, 2008, the company has been subject to margin calls and additional collateral requirements totaling more than $60 million. It said that until March 5, the company had met all of the margin requirements imposed by its repo counterparties. However, on March 5, the company received additional margin calls from seven of its 13 repo counterparties totaling more than $37 million. The company has met margin calls from three of these financing counterparties that have indicated a willingness to work with the company during these tumultuous times, but did not meet the margin requirements of the four other repo financing counterparties. >From this group of four counterparties, one notice of default has been received by the company and management expects to receive at least one additional default notice. John Stomber, Chief Executive Officer, President and Chief Investment Officer of the company, said, "The last few days have created a market environment where the repo counterparties' margin prices for our AAA-rated U.S. government agency floating rate capped securities issued by Fannie Mae and Freddie Mac are not representative of the underlying recoverable value of these securities. Unfortunately, this disconnect has created instability and variability in our repo financing arrangements. Management is actively working with the company's repo counterparties to develop more stable financing terms." Since the liquidity crisis in global fixed income markets started in August, the company has sold almost $1 billion in non-RMBS assets to improve liquidity and reduce leverage. The company has also received significant support from The Carlyle Group, most notably in the form of a $150 million subordinated revolving credit line. Fourth Quarter 2007 Highlights and Update The company had net income for the fourth quarter of 2007 was $17.6 million, compared to a net loss of $34.2 million in the third quarter of 2007. Fully diluted net income per Class B share was $0.34 in the fourth quarter, compared to a loss per Class B share of $0.74 in the third quarter of 2007. Net income for the year ended Dec. 31, 2007, was $16.8 million, or $0.45 per Class B share on a fully diluted basis. As of Feb. 27, 2008, the company\u2019s $21.7 billion investment portfolio is comprised exclusively of AAA-rated floating rate capped residential mortgage backed securities issued by Fannie Mae and Freddie Mac, which are considered to have the implied guarantee of the U.S. government and are expected to pay at par at maturity. The Carlyle Group agreed to increase the $100 million unsecured revolving credit facility made available to the company to $150 million and extend the maturity to July 1, 2009. As of Feb. 27, 2008, the company had $80 million of availability under this credit facility. As of Feb. 27, 2008, the company had unused repo lines of $2.4 billion with 11 counterparties. As of Dec. 31, 2007, the company's "Liquidity Cushion" was $67.2 million and was comprised of cash and cash equivalents, unencumbered AAA-rated mortgage backed securities and available committed borrowings from The Carlyle Group. As of Feb. 27, 2008, the company's Liquidity Cushion had increased to $130 million. The Liquidity Cushion consists of an existing $80 million Liquidity Cushion plus the additional $50 million increase to the existing unsecured revolver provided by Carlyle. The Carlyle Group with the support of the Board of Directors of the company waived the incentive fee earned for the fourth quarter of 2007. The Carlyle Group also amended its Investment Management Agreement so that the incentive fee will only be earned with respect to a calendar quarter for which the Board declares a dividend on the company's Class B shares. The Board of Directors decided to retain the company's fourth quarter earnings and not pay a dividend to achieve its short term objective of preserving the long term value of its shareholders' equity. During the fourth quarter of 2007, an affiliate of Carlyle Investment Management LLC, the company's investment manager, purchased Class B shares of the company in the open market increasing its ownership to approximately 15% of the issued and outstanding Class B shares from approximately 12% at the time of the global offering. "During the fourth quarter our portfolio stabilized and we were able to generate returns consistent with our near term targets," said John Stomber, Chief Executive Officer, President and Chief Investment Officer of the Company. "We are focused on building our liquidity cushion and broadening our available repo lines. We continue to run our business to preserve the value of our shareholders' equity and to position the Company to meet our long run objectives of earning an attractive risk adjusted return and paying a consistent dividend in the future." A full-text copy of the company's annual report can be obtained at http://ResearchArchives.com/t/s?28d7 About Carlyle Capital Carlyle Capital Corporation Limited (Euronext Amsterdam ticker symbol: CCC; ISIN: GG00B1VYV826) -- http://www.carlylecapitalcorp.com/-- is a Guernsey investment company that was formed on Aug. 29, 2006. It is a closed-end investment fund domiciled and registered as a limited company under the laws of Guernsey, Channel Islands. CCC invests in a diversified portfolio of fixed income assets including high-grade mortgages and credit products. CCC's day-to-day activities and investment portfolio are managed by Carlyle Investment Management LLC, whose investment professionals have extensive experience in the areas of mortgage finance, leveraged finance, capital markets transaction structuring and risk/portfolio management. CIM manages the CCC pursuant to a management agreement. CIM is a registered investment adviser under the U.S. Investment Advisers Act of 1940 and is an affiliate of The Carlyle Group. CASA DE CAMBIO: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Casa de Cambio Majapara S.A. de C.V. aka Majapara Casa de Cambio Lago Margarita No. 16 Colonia Granada, C.P. 11520 Mexico, D.F. Bankruptcy Case No.: 08-05230 Type of Business: The Debtor is engaged in financial transactions processing, reserve, and clearing house activities. See http://www.majapara.com.mx Chapter 11 Petition Date: March 5, 2008 Court: Northern District of Illinois (Chicago) Debtor's Counsel: Andrew L. Wool, Esq. (andrew.wool@kattenlaw.com) Katten Muchin Rosenman, LLP 525 West Monroe Street Chicago, IL 60661 Tel: (312) 902-5623 http://www.kattenlaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wachovia Bank N.A. contract, disputed, $24,197,000 Attention: Carlos Perez quasi-contract, 200 South Biscayne Boulevard, trade 12 Floor Miami, FL 33131 Tel: (305) 789-6920 Blanca Nieves Luisa contract, $2,009,944 Valle Villazon quasi-contract, Navegantes 234 Esq. trade Jacarandas Col. Virginia Boca del Rio C.P. 94294 Veracruz, Mexico Tel: 52-229-935-1909 Adquira Mexico S.A. de C.V. contract, $1,674,436 Attention: Miguel Angel quasi-contract, Escalona trade Paseo de la Reforma No. 1200 Piso 2, Cruz Manca Cuajimalpa C.P. 5349 Mexico, D.F. Tel: 52-55-5-16169714 Zions First National Bank contract, $1,670,690 Attention: Lourdes Vega quasi-contract, 1 South Main Street trade Salt Lake City, UT 84111-1904 Tel: (801) 844-7876 Andamios Cimbras Y Casetone contract, $730,580 S.A. de C.V. quasi-contract, Attention: Marcelo Vazquez trade Stringel Patricio Sanz No.33 Desp. 101 Col. del Valle Mexico, D.F. C.P. 03100 Tel: 52-55-5-669-1188 Secrimex, S.A. de C.V. contract, $618,192 Attention: Ana Maria Amador quasi-contract, Lopez trade Calle 2 No. 16 Col. Alce Blanco Naucalpan de Juarez C.P. 53370 Estado de Mexico Piso Prestigio S.A. de C.V. contract, $614,590 Attention: Adan Esparza quasi-contract, Sanchez trade Calz. Lazaro Cardenas 4145 Col. Camino Real Zapopan, Jal. C.P. 45040 Mexico Tel: 52-33-3647-4088 Su Casa Produce, LLC contract, $580,134 Attention: Victor Manuel Diaz quasi-contract, 188 Old Tucson Road trade P.O. Box 1381 Nogales, AZ 85628 tel: 520-281-1409 Agencia de Viajes K contract, $478,749 Attention: Rosa Maria Lopez quasi-contract, Ramirez trade Baedeker S.A. de C.V. Tlacotalpan 96 Esquina Tehuantepec Col. Roma Sur C.P. 6760 Mexico, D.F. Tel: 52-55-5-5574-4040 Promedia Computer S.A. de contract, $416,105 C.V. quasi-contract, Attention: Evangelina Reyes trade Perez Av. Baja California 196-201 Del. Benito Juarez C.P. 6700 Mexico, D.F. Tel: 52-55-5-5564-3994 Industrias John Crane contract, $400,000 de Mexico S.A de C.V. quasi-contract, Attention: Lic. Jesus Urdaneta trade Poniente 152 No. 667 Col. Industrial Vallejo C.P. 02300 Mexico, D.F. Tel: 52-55-5-5385-0525 Taurus-Espa A, S.a. de C.V. contract, $396,585 Attention: Jos� Luis Fernandez quasi-contract, Henriquez trade Rosas Moreno 4-203 Col. San Rafael C.P. 6470 Mexico, D.F. Tel: 52-55-5-5546-8162 ext. 239 Standard Machinery and Supply contract, $394,000 Co. S.A. de C.V. quasi-contract, Attention: Barbara Hernandez trade Larrieta Tenayuca 82 Fracc. Ind. Tlalnepantla C.P. 54030 Estado de Mexico Tel: 52-55-5-565-6741 Suspension Y Direccion S.A. de contract, $329,071 C.V. quasi-contract, Attention: Luis Becerril trade Colorado Dr. Lucio 211 Col. Doctores C.P. 06720 Mexico, D.F. Tel: 52-55-5134-0700 Instituto Tecnologico contract, $278,311 Autonomo de Mexico quasi-contract, Attention: Monica de Lourdes trade Arrieta Blanco Rio Hondo No. 1 Col Tizapan, San Angel C.P. 01000 Mexico, D.F. Tel: 52-55-5-5628-4000 Grupo Plastico Nova S.A. de contract, $277,872 C.V. quasi-contract, Attention: Laura Garcia trade Carrillo San Juan 768 Col. Granjas Modernas C.P. 07460 Mexico, D.F. Tel: 52-55-5-5748-0583 Suyun Yan Hu contract, $270,964 Dr. Salvador Garcia Diego quasi-contract, 209, Col. Doctores C.P. 06720 trade Mexico, D.F. Tel: 52-55-5-3096-8108 America Maria Luisa Taracido contract, $247,880 Berea quasi-contract, trade Rittal, S.A. de C.V. contract, $240,524 quasi-contract, trade Catalizadores Salh Mon S.A. de contract, $213,495 C.V. quasi-contract, trade CHAMP CAR: Goes Bankrupt, Plans To Sell Assets to Indy Racing ------------------------------------------------------------- Champ Car World Series LLC was put into chapter 11 bankruptcy by its counsels on March 5, 2008, John Oreovicz writes for ABC Local News in North Carolina. Despite the bankruptcy, Champ Car plans to proceed in the management of its business and operate as a debtor-in-possession, the report says. Champ Car is scheduled to host an open-wheel race in Long Beach, California -- www.longbeachgp.com/ -- on April 18-20, 2008, the Debtor's alleged final event, ABC relates. In a statement filed with the Court, Champ Car vice president and chief financial officer, Gene Cottingham, said that the Debtor's board of managers have decided that it's no longer finanncially sound to continue and open-wheel series and found that there is insufficient money to operate the event this year, ABC notes. Champ Car's board is composed of Kevin Kalkhoven, Gerald Forsythe, Paul Gentilozzi and Dan Pettit, ABC reports. Its major owners are Kalkhoven, by its 21st Century Racing Holdings LLC unit and Forsythe by its Willis Capital LLC unit, ABC adds. Also, Champ Car plans to liquidate its assets related to the open- wheel racing to the Indy Racing League for the unification of open-wheel racing with Indy-style racing by the beginning of this year's season, ABC quotes Mr. Cottingham's statement. According to court documents, Champ Car's board have already decided to file for bankruptcy as early as Feb. 14, 2008, before major owners issued a memorandum of understanding, ABC relates. In the memorandum, Kalkhoven and Forsythe ordered the sale of "substantially all" of Champ Car's "intangible assets" and its "mobile medical unit to the IRL for $6 million," ABC reveals. The memorandum also provides $2 million each to the major owners who promised to support the open-wheel racing in Long Beach, ABC says. The Long Beach race is operated by Aquarium Holdings LLC, owned by Kalkhoven and Forsythe, ABC notes. On Feb. 2, 2004, Judge Frank J. Otte of the U.S. Bankruptcy Court for the Southern District of Indiana permitted the sale of Championship Auto Racing Teams Inc.'s assets to Kalkhoven and Forsythe's unit, which is now known as Champ Car World Series LLC, ABC reveals. The Troubled Company Reporter said on Jan. 2, 2006, that the stockholders of Championship Auto, aka CART Inc., approved on Dec. 29, 2005, the company's Plan of Liquidation and Dissolution offered for vote at a Special Meeting. About Champ Car Indianapolis-based Champ Car World Series LLC, fdba Open Wheel Racing Series LLC and Corkscrew Acquisition LLC, -- http://www.champcarworldseries.com/-- organizes and operates a racing circuit that features about 20 drivers competing in single- seat, open-wheeled race cars. The circuit includes more than a dozen race tracks and road courses in the US, Canada, Mexico, and Australia. It regulates the sport and promotes the races; it generates revenue from sponsorships and broadcasting rights. It filed for chapter 11 protection on March 5, 2008 (Bankr. S.D. Ind. Case No. 08-02172). Gary Lynn Hostetler, Esq., and Jeffrey A. Hokanson, Esq., at Hostetler & Kowalik PC represent the Debtor in its restructuring efforts. The Debtor had assets between $10 million to $50 million and debts between $1 million to $10 million when it filed for bankruptcy. Its largest unsecured creditor, Cosworth Inc., is owed $1,825,000. CHAMP CAR: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Champ Car World Series, LLC fdba Open Wheel Racing Series, LLC fdba Corkscrew Acquisition, LLC 5350 West Lakeview Parkway South Drive Indianapolis, IN 46268 Bankruptcy Case No.: 08-02172 Type of Business: Formerly known as Open Wheel Racing, the Debtor organizes and operates a racing circuit that features about 20 drivers competing in single- seat, open-wheeled race cars. The circuit includes more than a dozen race tracks and road courses in the US, Canada, Mexico, and Australia. It regulates the sport and promotes the races; it generates revenue from sponsorships and broadcasting rights. See http://www.champcarworldseries.com Chapter 11 Petition Date: March 5, 2008 Court: Southern District of Indiana (Indianapolis) Judge: Anthony J. Metz, III Debtor's Counsel: Gary Lynn Hostetler, Esq. (glh@hostetler-kowalik.com) Jeffrey A. Hokanson, Esq. (jeff.hokanson@hostetler-kowalik.com) Hostetler & Kowalik, P.C. 101 West Ohio Street, Suite 2100 Indianapolis, IN 46204 Tel: (317) 262-1001 Fax: (317) 262-1010 http://www.hostetler-kowalik.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cosworth, Inc. Open Account $1,825,000 3031 Fujita Street Torrance, CA 90505 PKV Racing Open Account $645,884 4001 Methanol Lane Indianapolis, IN 46268 RuSPORT, Inc. Open Account $424,861 6771 East 45th Street Loveland, CO 80538 Mullin Production Group Open Account $400,000 5743 Corsa Avenue, Suite 114 Thousand Oaks, CA 91362 Dan D. Jones & Associates, Open Account $359,001 Inc. 27010 Doxtator Dearborn Heights, MI 48127 Forsythe Championship Racing Open Account $327,961 Ltd., LLC 7231 Georgetown Road Indianapolis, IN 46268 PSAV Presentation Services Open Account $34,848 R&S Consulting Open Account $30,656 The Media Loft, Inc. Open Account $30,032 Oregon Sports Authority Open Account $25,000 Performance Products, LLC Open Acco