/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080314.mbx 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 14, 2008, Vol. 12, No. 63 Headlines 330 RESERVOIR: Case Summary & Three Largest Unsecured Creditors ACA ABS: Deteriorating Credit Quality Prompts Moody's Rating Cuts ACANTO SADDLEBACK: Wants to Hire Goe & Forsythe as General Counsel ADELPHIA COMMS: Court Okays New Settlement With D&O Insurers ADELPHIA COMMS: Supreme Court Dismisses John Rigas' Appeal ADELPHIA COMMS: Settles Dispute on NBC Rejection Claims AEROMED SERVICES: Hires Alexis Fuentes-Hernandez as Counsel ALADDIN MANAGED: Fitch Assigns DR6 Rating on 'C' Rated Notes AMBAC FINANCIAL: Completes $1 Bil. Public Offering of Common Stock AMORTIZING RESIDENTIAL: Realized Losses Prompts S&P's Rating Cuts ASARCO LLC: Wants to Assume BNY Capital Equipment Lease ASARCO LLC: Court Appoints Examiner but Limits Probe Duties ASARCO LLC: Settles U.S. Government, Et Al., Claims for $80.8MM ATLANTA STRUCTURAL: Case Summary & 15 Largest Unsecured Creditors AXIA INC: Decline in Product Demand Spurs Moody's to Junk Ratings BEAR STEARNS: Federal Probe to Focus on April 2007 Conference Call BEAR SWAMP: Voluntary Chapter 11 Case Summary BENCHMARK ELECTRONICS: Earns $21 Million in 2007 Fourth Quarter B/E AEROSPACE: Earns $42.3 Million in Fourth Quarter 2007 BLUE RIVER: Plans Orderly Liquidation of Municipal Bond Fund BUFFETS HOLDINGS: U.S. Trustee Amends Creditors Committee BUFFETS HOLDINGS: Otterbourg Steindler as Panel's Counsel Approved BUFFETS HOLDINGS: Can File Schedules and Statements Until April 7 CAPRI CONDOMINIUMS: Wants to Hire Gill Johnson as Appraiser CAPRI CONDOMINIUMS: Asks Court OK to Hire RealtySouth as Broker CARIBBEAN ISLAND: Case Summary & Four Largest Unsecured Creditors CARLYLE CAPITAL: Lenders Ready to Pounce on Assets; Nears Collapse CENTERPOINT ENERGY: Earns $108 Million in 2007 Fourth Quarter CENTRAL ILLINOIS: Hires Brent King as Chief Restructuring Officer CHARTER COMMUNICATIONS: Prices $520 Million 2nd Lien 2014 Notes CHARTER COMMUNICATIONS: Moody's Holds Ratings After Debt Issue CHARTER COMMUNICATIONS: S&P Chips Debt Rating on CCI's Unit to B- CHRISTINE STAUFFER: Case Summary & 10 Largest Unsecured Creditors CHRYSLER LLC: Sells Tritec Motors in Brazil to Fiat Powertrain CHRYSLER LLC: Wants District Court to Study Bankr. Court Rulings CHRYSLER LLC: Plans to Shutter Company for Two Weeks in July CIFG GUARANTY: S&P Downgrades Financial Strength Rating to 'A+' COEUR D'ALENE MINES: S&P Assigns 'B-' Rating on $150M Sr. Notes COMSTOCK HOMEBUILDING: Amends Deal for $30 Mil. Unsecured Notes CONGOLEUM CORP: Reports $2.4 Million Net Loss in 4th Quarter 2006 COUNTRYWIDE FINANCIAL: Fitch Cuts Subordinated Debt Rating to BB+ CWALT INC: High Delinquency Rates Prompt Moody's Rating Downgrades CRAIG STIGELMAN: Case Summary & Five Largest Unsecured Creditors CREDIT SUISSE: Fitch Affirms 'B-' Rating on $2.1MM Class O Certs. DEERFIELD CAPITAL: Stockholders OK Conversion of Preferred Stock DELTA AIR: Wants Atlanta Port's Reserve Fund Trimmed to $58 Mil. DELTA AIR: Executives Dispose of 49,304 Shares at $13.35 Per Share DOCUMENT CAPTURE: Clancy & Co. Expresses Going Concern Doubt DOLE FOOD: Posts $57.5 Million Net Loss in Year Ended Dec. 29 DOMICILIARY REALCO: Voluntary Chapter 11 Case Summary DON MCCORMACK: Voluntary Chapter 11 Case Summary DRAKE MANAGEMENT: May Liquidate $2.7-Bil Global Opportunities Fund DUNMORE HOMES: Court Extends Plan-Filing Period to March 21 EAST VALLEY TOURIS: Moody's Withdraws Ratings Due to Deal Delays EASTON-BELL SPORTS: Moody's Downgrades Ratings to 'B3' From 'B2' ENTERPRISE SECURITY: Case Summary & Largest Unsecured Creditor ENVIRONMENTAL CAREERS: Trustee to Auction Domain Name Eco.Org ETHANEX ENERGY: Inks Amendment to Sale Deal; Warns of Bankruptcy EURAM-MACAULEY: Fairfield Wants Court to Dismiss Chapter 11 Case EXCEL HEALTH: Voluntary Chapter 11 Case Summary FEDDERS CORP: Court Approves Sale of Assets to Elco Holding FIRST DARTMOUTH: Wants Exclusivity Period Extended to April 11 FOAMEX INTERNATIONAL: To Pursue Further Deleveraging FRIEDMAN'S INC: U.S. Trustee Objects to Unsecured Panel's Counsel GENERAL MOTORS: Wants to Take Tools If Plastech Stops Delivery GEORGIA GULF: Weak Financial Performance Cues Moody's Rating Cuts GRUSAF LLC: Case Summary & 117 Largest Unsecured Creditors HEATHY DIRECTIONS: S&P Withdraws Ratings on Company's Request HELLER JACOBS: Judge Lifland Dismisses Chapter 11 Case HERBST GAMING: Board Creates Office of the Chief Executive Officer JAMES LIGHTLE: Case Summary & Six Largest Unsecured Creditors JEFFERSON COUNTY: Debt Restructuring Plan Fails to Lift Bond Price JEFFERSON COUNTY: NY Times Notes Ex-JPMorgan Exec's Role in Crisis JMG EXPLORATION: Price per Share Falls Below NYSE Listing Criteria LAWRENCE EVERSTON: Voluntary Chapter 11 Case Summary LEGENDS GAMING: Chapter 11 Filing Cues Moody's Rating Cut to 'D' LEINER HEALTH: Allowed to Hire Garden City Group as Claims Agent LEVEL 3: Sunit Patel to Continue as Chief Financial Officer LEXINGTON RESOURCES: Lexington Oil Files Chapter 11 Petition LIBERTY MEDIA: S&P's 'BB+' Rating Unmoved by $1BB Share Repurchase LIDYA KASHEVAROFF: Case Summary & Three Largest Unsec. Creditors MANCHESTER INC: Can Temporarily Employ Bridge as Financial Advisor MAXJET AIRWAYS: Still in Talks to Sell Assets After Bid Deadline MCMILLIN COMPANIES: Moody's Withdraws Caa2, Caa3 Ratings MICHAEL TAYLOR: Case Summary & Four Largest Unsecured Creditors MORGAN STANLEY: S&P Downgrades Rating on $3M Notes to 'B-' MORRIS PUBLISHING: Moody's Downgrades Ratings to 'B1' From 'Ba3' MORRIS PUBLISHING: Revenue Decline Cues S&P's Rating Cut to 'B' MOUNTAIN VIEW: Voluntary Chapter 11 Case Summary NATIONAL CENTURY: Former Executives Guilty of Fraud and Conspiracy NELLSON NUTRACEUTICAL: Names Allan Lutz as Interim CEO & Director NORTEL NETWORKS: Realigns Biz, Sends Jobs Offshore by 2009 NORTHEAST BIOFUELS: S&P Cuts Rating on $140 Mil. 2013 Loan to 'B' NORTHWEST AIRLINES: Court Denies Panel Advisors' Completion Fees NORTHWEST AIRLINES: Balks at U.S. Bank's Lease Rejection Claim NORTHWEST AIRLINES: Signs Settlement Agreement With IAM NORTHWEST AIRLINES: FMR LLC Discloses 10.4% Equity Stake OZBURN-HESSEY HOLDING: Moody's Holds B3 Ratings on Revenue Growth PAQUETTE MAINTENANCE: Case Summary & 20 Largest Unsec. Creditors PARADISE MUSIC: Closes $179K Debt Financing with Leaddog Capital PILGRIM'S PRIDE: Plant Closing Won't Affect S&P's 'BB-' Rating PERFORMANCE TRANSPORTAION: Cancels Auction Sale Scheduled March 14 PLASTECH ENGINEERED: Chrysler Wants District Court to Study Appeal PLASTECH ENGINEERED: GM Wants to Take Tools Too, If Delivery Stops PLASTECH ENGINEERED: Seeks Additional $14 Mil. Interim Financing PRB ENERGY: Section 341(a) Creditors' Meeting Set for March 31 PRB ENERGY: Obtains Interim Nod to Employ Block Markus as Counsel PRB ENERGY: Gets Interim Nod to Employ Heppenstall as Oil Counsel PRB ENERGY: Wants Court's OK to Use Creditors' Cash Collateral PROVIDENCE SERVICE: To Register Shares of Common Stock with SEC QUEBECOR WORLD: Phillips Hager Owns 105,300 Non-Voting Shares QUEBECOR WORLD: Has Strong Position to Survive, Teamsters Says QUEBECOR WORLD: Ex-Corby Workers Set Up Taskforce With Unite Union RD MILLER: Owners File for Chapter 7 Liquidation in Minnesota RETAIL PRO: Kevin Ralphs Quits as Interim Chief Financial Officer RITCHIE MULTI-STRATEGY: Hearing on Involuntary Petition is April 2 RADIATION THERAPY: Completes $1 Billion Merger with Vestar Capital RANGE RESOURCES: Earns $34 Million in Quarter Ended December 31 ROADRUNNER RIVER: Voluntary Chapter 11 Case Summary SASCO MORTGAGE: Adverse Performance Prompts S&P to Cut 10 Ratings SALOMON BROTHERS: Fitch Holds 'BB-' Rating on $3.3MM Cl. L Certs. SCORPIUS CDO: Poor Credit Quality Spurs Moody's Rating Downgrades SH 130 CONCESSION: Moody's Rates TIFIA Subordinate Debt 'Ba1' SHARPS CDO: CIFG Rating Downgrade Prompts S&P's Two Rating Cuts SP NEWSPRINT: Ernst & Young Expresses Going Concern Doubt THORNBURG MORTGAGE: Defaults on $49MM Morgan Stanley Agreement THORNBURG MORTGAGE: Restates Consolidated Financial Statements TILLIM LLC: Creditors Have Until June 9 to File Proofs of Claims TUCSON ELECTRIC: Fitch Expects to Put 'BB+' Rating on $121MM Bonds VICTORY MEMORIAL: Court OKs Bidding Procedures for Sale of Assets VICTORY MEMORIAL: Wants Exclusive Plan Filing Period Extended WELLMAN INC: U.S. Trustee Appoints Unsecured Creditors Committee SHARPER IMAGE: Obtains Final Approval to Use Cash Collateral SIRVA INC: Committee Files Motion to Restrict Access to Documents SOLUTIA INC: Inks Backstopper Registration Rights Agreement SOLUTIA INC: Appoints New Members to the Board of Directors SOLUTIA INC: Inks Distribution Agreement with Funding Co. TOLL BROTHERS: Posts $96 Million Net Loss in Fiscal 2008 1st Qtr. TOLL BROTHERS: Warns of Significant Losses from Joint Ventures TOTES ISOTONER: Northern Cap Acquisition Won't Affect S&P's Rating TOUSA INC: Officials Expect to Finish Colorado Project as Planned TRW AUTOMOTIVE: Earns $56 Million in Quarter Ended December 31 TUCSON ELECTRIC: S&P Assigns 'BB-' Rating on $121 Mil. 2008 Bonds WEIGHT WATCHERS: Dec. 29 Balance Sheet Upside-Down by $926.3 Mil. WELLMAN INC: Wants to Hire Ernst & Young as Tax Advisors WESTWAYS FUNDING: Nine Classes Get Moody's Negative Rating Actions ZIFF DAVIS: Court Okays Motion to Use Noteholders' Cash Collateral ZIFF DAVIS: Seeks Authority to Hire Alvarez & Marsal as Advisors ZIFF DAVIS: Seeks Authority to Hire BMC as Claims Agent * S&P Report Estimates Subprime Writedowns Could Reach $285 Bil. * S&P Downgrades 63 Tranches' Ratings From 11 Cash Flows and CDOs * Thacher Proffitt Organizes Distressed Assets Advisory Practice * Texas Rising Stars' List Names 17 Attorneys From Gardere Wynne * Thorp Reed Expands Legal Profession with Five New Partners * BOOK REVIEW: Bankruptcy: A Feast for Lawyers ********* 330 RESERVOIR: Case Summary & Three Largest Unsecured Creditors --------------------------------------------------------------- Debtor: 330 Reservoir Street Corp. 330 Reservoir Street Needham Heights, MA 02494 Bankruptcy Case No.: 08-11664 Chapter 11 Petition Date: March 11, 2008 Court: District of Massachusetts (Boston) Judge: Henry Boroff Debtor's Counsel: Barry R. Levine, Esq. 607 North Avenue Building 18 Wakefield, MA 01880 Tel: (781) 245-8440 Fax: (781) 246-5038 bankruptcy@levineatlaw.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's list of its Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Hingham Institute for Savings $1,771,000 50 Main Street Hingham, MA 02043 Weston Financial $856,000 c/o Alan H. Okstein, Esq. Okstein & Okstein 865 Providence Highway Dedham, MA 02026 William and Margaret Mazzone $280,000 c/o Brian Rogal, Esq. Rogal & Donnelan, PC 43 Charles Street Needham Heights, MA 02494 ACA ABS: Deteriorating Credit Quality Prompts Moody's Rating Cuts ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of five classes of notes issued by ACA ABS CDO 2006-1, Ltd., and left on review for possible further downgrade the ratings of two of these classes of notes. The notes affected by this rating action are: Class Description: $450,000,000 A-1LA Floating Rate Notes Due June 2041 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $105,000,000 Class A-1LB Floating Rate Notes Due June 2041 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $80,000,000 Class A-2L Floating Rate Notes Due June 2041 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ca Class Description: $40,000,000 Class A-3L Deferrable Floating Rate Notes Due June 2041 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C Class Description: $33,000,000 Class B-1L Floating Rate Notes Due June 2041 -- Prior Rating: Caa3, 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 March 5, 2008, of an event of default caused by a failure of the Senior Class A Overcollateralization Ratio to be greater than or equal to 100 per cent pursuant Section 5.1(h) of the Indenture dated April 27, 2007. ACA ABS CDO 2006-1, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued by certain Noteholders. Because of this uncertainty, the ratings assigned to Class A-1LA Notes and Class A-1LB Notes remain on review for possible further action. ACANTO SADDLEBACK: Wants to Hire Goe & Forsythe as General Counsel ------------------------------------------------------------------ Acanto Saddleback Homes, LLC, asks the United States Bankruptcy Court for the Central District of California for authority to employ Goe & Forsythe, LLP, as its general bankruptcy counsel. Goe & Forsythe is expected to: a. advise the Debtor with respect to compliance with the requirements of the U.S. Trustee; b. advise the Debtor regarding matters of bankruptcy law, including the rights and remedies of Debtor in regards to their assets and with respect to the claims of creditors; c. represent or assist the Debtor and other professionals in any proceedings or hearings in the court and in any action in any other court where Debtor's rights under the Bankruptcy Code may be litigated or affected; d. conduct examinations of witnesses, claimants or adverse parties and to prepare and assist in the preparation of reports, accounts and pleadings related to the case; e. advise the Debtor concerning the requirements of the court and applicable rules as they affect the Debtor; f. advise the Debtor in negotiation, formulation, confirmation and implementation of a plan of reorganization; g. make any court appearances on behalf of the Debtor; and h. take other action and perform other services as the Debtor may require the firm in connection with the case. The Debtor will pay the firm at its standard hourly rates. Professional Designation Rate ------------ ----------- ---- Robert P. Goe, Esq. Professional US$300 Marc C. Forsythe Professional US$300 Elizabeth A. LaRocque Associate US$250 Christopher P. Walker Associate US$275 Patricia Foster Legal Assistant US$125 Kerry A. Murphy Legal Assistant US$125 To the best of the Debtor's knowledge, the firm does not hold any adverse interest in the Debtor's estates. The firm can be reached at: Robert P. Goe, Esq. (rgoe@goeforlaw.com) Goe & Forsythe, LLP 660 Newport Center Drive, Suite 320 Newpot Beach, CA 92660 Tel: (949) 467-3780 Fax: (949) 721-0409 http://goeforlaw.com/ 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. ADELPHIA COMMS: Court Okays New Settlement With D&O Insurers ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York approved a new settlement agreement between reorganized Adelphia Communications Corp. and its debtor-affiliates and certain of its insurers, relating to directors' and officers' liability insurance policies. The ACOM Debtors previously sought Court approval of a settlement agreement pursuant to which three of their insurers agreed to pay $32,500,000 in return for being fully released under the directors and officers liability insurance policies that the insurers issued to Adelphia. The Initial D&O Settlement was conditioned on the establishment of an injunction that channels claims other insureds might make against the D&O Policies to the $32,500,000 settlement fund. The Court disapproved the Initial Settlement, noting that it was not authorized to issue the channeling injunction. Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Reorganized ACOM Debtors sought and obtained the Court's approval of a new settlement agreement among: * ACOM; * The Adelphia Recovery Trust; * Insurance companies Associated Electric & Gas Insurance Services Limited, Federal Insurance Company, and Greenwich Insurance Company; and * Insureds Dennis P. Coyle, Leslie J. Gelber, Erland E. Kailbourne, Pete J. Metros, James P. Rigas, John J. Rigas, Michael J. Rigas, Timothy J. Rigas, Doris Rigas, Michael C. Mulcahey, Peter Venetis, and Ellen Rigas Venetis. AEGIS, Federal Insurance, and Greenwich Insurance issued three directors and officers liability insurance policies to ACOM that provide $50,000,000 of liability insurance coverage in the aggregate. The AEGIS Policy provides $25,000,000 of insurance coverage for claims first made during the period from Dec. 31, 2000, to Dec. 31, 2005. The Federal Insurance Policy provides $15,000,000 of insurance coverage for claims first made during the period from Dec. 31, 2000, to Dec. 31, 2003. The Greenwich Policy provides $10,000,000 of insurance coverage for claims first made during the period from Dec. 31, 2000, to Dec. 31, 2003. The D&O Policies cover defense costs and indemnity obligations imposed by judgments or settlements in relation to claims made by third parties alleging damages arising out of "wrongful acts" by one or more of the Insureds. The D&0 Policies cover those costs and indemnity obligations whether or not ACOM reimburses those costs and indemnity obligations. The D&O Policies also cover the Reorganized Debtors' own defense costs and indemnity obligations imposed by judgments or settlements in relation to securities claims. The Insurers believe that alleged material misrepresentations made to them in connection with the issuance of the D&O Policies warrant rescission of the Policies. The Insurers have sent notices to the persons covered under the D&O Policies, informing them that the Insurers are rescinding coverage under the Policies and are treating the insurance coverage as void ab initio. Pursuant to their notices of rescission, the Insurers believe they are not obligated to make any payments pursuant to the D&O Policies to the affected parties. The Insurers also believe ACOM does not have coverage for payments made to indemnify any of the affected parties for their defense costs. After the Court denied the Initial D&O Settlement in March 2007, the parties entered into further negotiations and reached a New D&O Settlement on Nov. 19, 2007. Pursuant to the New D&O Settlement, the Insurers agree to pay ACOM, the Trust, and the Insureds $32,703,242, including $13,272,744 that AEGIS has already advanced for defense costs incurred by several Insureds. In particular, AEGIS will account for $20,801,819 of the Settlement Amount; Federal Insurance will contribute $7,140,850; and Greenwich will pay $4,760,566. In return, ACOM, the Trust, and the Insureds will fully release the Insurers from any further liability under the D&O policies. The New Settlement does not call for any channeling injunction. A full-text copy of the New Settlement is available for free at: http://researcharchives.com/t/s?2919 Donald W. Brown, Esq., at Covington & Burling LLP, in New York, relates that while the New Settlement does not provide for payment of insurance proceeds to ACOM, it significantly benefits ACOM in at least three ways. First, the New Settlement requires that $14,500,000 of the Settlement Amount will be used to settle seven securities lawsuits, including a class action, as against independent directors Dennis P. Coyle, Leslie J. Gelber, Erland E. Kailbourne, Pete J. Metros. The $4,930,497 remaining Settlement Amount, taking into account the $13,272,744 in already advanced defense costs, is to be allocated among the Individual Insureds other than the Independent Directors. Amounts paid to settle the securities lawsuits on behalf of the Independent Directors, as well as continuing defense costs incurred by the Directors, otherwise would have been paid by ACOM pursuant to its continuing prepetition indemnity obligations as provided in the ACOM Debtors' confirmed Plan of Reorganization, Mr. Brown notes. Second, the New Settlement releases the Reorganized ACOM Debtors from their indemnification obligations to the Independent Directors pursuant to their corporate charters and by-laws except for an obligation to pay certain litigation-related expenses in a total amount capped at $250,000. Third, the New Settlement resolves the lawsuit filed by the Insurers in the Eastern District of Pennsylvania seeking to rescind the D&O Policies or otherwise obtain a judicial declaration of no coverage, relieving ACOM of the financial and other burdens of proceeding with that litigation. ACOM maintains that it has strong arguments to support its claims of coverage under the D&O Policies. ACOM, however, recognizes that there is a risk that the D&O Policies will be rescinded, leaving it with absolutely no insurance coverage. Even if the Policies are not rescinded, there is still a risk that only some or none of the available policy limits will be available to ACOM. In light of those risks, combined with the high cost of continued litigation, the Reorganized Debtors have determined that settling their disputes with the Insurers and the Insureds pursuant to the terms of the New Settlement is in their best interest. Ancillary Agreements Reached The negotiations surrounding the Settlement Agreement resulted in two additional, related agreements -- one between ACOM and the Independent Directors, and the other between ACOM and the Insurers. Pursuant to the Additional Agreements, Adelphia assumes certain limited, contingent obligations. At the Reorganized ACOM Debtors' behest, the Court permitted the Debtors to file the two Ancillary Agreements. The Agreements will only be served on counsel for the parties to the Agreements and other parties as ordered by the Court. The Ancillary Agreements contain sensitive business information that, if disclosed, will make it improbable for the New D&O Settlement Agreement to be effectuated, resulting in increased costs to ACOM's estate, Mr. Brown explains. The Reorganized ACOM Debtors aver that the Ancillary Agreements are reasonable and represent fair resolution of issues surrounding the D&O Policies. About the Adelphia Recovery Trust The Adelphia Recovery Trust is a Delaware Statutory Trust that was formed pursuant to the ACOM Debtors' First Modified Fifth Amended Joint Plan of Reorganization, which became effective Feb. 13, 2007. The ART holds certain litigation claims transferred pursuant to the Plan against various third parties and exists to prosecute the causes of action transferred to it for the benefit of holders of ART interests. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 185; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Supreme Court Dismisses John Rigas' Appeal ---------------------------------------------------------- The U.S. Supreme Court has rejected an appeal without comment by John Rigas, founder of Adelphia Communications Corp. and his son, Timothy, to have their fraud convictions overturned. ACOM, formerly the cable TV franchise holder for much of Western New York, ended up in bankruptcy before being sold to Time Warner Cable and Comcast Corp.. Mr. Rigas founded ACOM and his son, Timothy, was the chief financial officer for what became the nation's fifth largest cable TV operation. Both men are serving lengthy prison sentences, John, 15 years, and Timothy, 20 years, for their role in stealing from the company. Some $2,200,000,000 was used by the Rigas family for personal expenses, Investrend says, citing federal prosecutors. The Rigases appealed multiple convictions on charges of conspiracy and fraud. About the Adelphia Recovery Trust The Adelphia Recovery Trust is a Delaware Statutory Trust that was formed pursuant to the ACOM Debtors' First Modified Fifth Amended Joint Plan of Reorganization, which became effective Feb. 13, 2007. The ART holds certain litigation claims transferred pursuant to the Plan against various third parties and exists to prosecute the causes of action transferred to it for the benefit of holders of ART interests. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 185; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Settles Dispute on NBC Rejection Claims ------------------------------------------------------- Reorganized Adelphia Communications Corp. and its debtor- affiliates have reached a settlement agreement resolving certain NBC Rejection Claims. In August 2006, National Broadcasting Company, Bravo Company, CNBC, Inc., MSNBC Cable, L.L.C., and Universal Television Networks filed Claim Nos. 19606, 19607, 19608, 19609, 19610, 19611, 19612, and 19613 against the ACOM Debtors, asserting about $11,969,064 plus unliquidated amounts in contract rejection damages. Subsequently, the ACOM Debtors disputed the NBC Rejection Claims. The Reorganized ACOM Debtors and the NBC Affiliates have decided to settle their claims dispute. In a stipulation with the NBC Affiliates, the Reorganized ACOM Debtors agree to: (a) withdraw their objection to the NBC Rejection Claims; and (b) grant CNBC a $7,150,000 Allowed ACC Other Unsecured Claim, as that term is defined in the ACOM Debtors' First Modified Fifth Amended Joint Plan of Reorganization, against ACOM. In return, the NBC Affiliates agree to withdraw the NBC Rejection Claims. Both parties further agree to waive and release any and all claims against each other related to the NBC Rejection Claims and the Claims Objection. The parties ask the U.S. Bankruptcy Court for the Southern District of New York to approve their stipulation. About the Adelphia Recovery Trust The Adelphia Recovery Trust is a Delaware Statutory Trust that was formed pursuant to the ACOM Debtors' First Modified Fifth Amended Joint Plan of Reorganization, which became effective Feb. 13, 2007. The ART holds certain litigation claims transferred pursuant to the Plan against various third parties and exists to prosecute the causes of action transferred to it for the benefit of holders of ART interests. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 185; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AEROMED SERVICES: Hires Alexis Fuentes-Hernandez as Counsel ----------------------------------------------------------- Aeromed Services Corp. obtained permission from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Alexis Fuentes-Hernandez, Esq., at Fuentes Law Offices, as its bankruptcy counsel. Documents submitted to the Court did not disclose the firm's specific services to be rendered to the Debtor. The firm is expected to bill the Debtor $175 per hour for its services, and has received a $10,000 retainer from the Debtor. Mr. Fuentes-Hernandez assured the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Subsequent Objection Donald F. Walton, the U.S. Trustee for Region 21, objected to the application, telling the Court that Mr. Fuentes-Hernandez holds or represents an interest adverse to the estate. Mr. Walton disclosed that the attorney is currently handling a pending bankruptcy case of Advanced Cardiology Center Corp., of which the Debtor holds an undisputed, unsecured claim. Mr. Fuentes-Hernandez however, refutes the objection, contending that his representations of both Debtors do not create a conflict of interest. He argues that the dual representation of Aeromed and Advanced Cardiology is permissible under Section 327 of the U.S. Bankruptcy Code, and that the two Debtors share an identity of interest. Mr. Fuentes-Hernandez can be reached at: Alexis Fuentes-Hernandez, Esq. Fuentes Law Offices 405 San Francisco Street, Suite 4-A Old San Juan, Puerto Rico 00901 Tel: (787) 607-3436 Fax: (787) 722-5206 Based in San Juan, Puerto Rico, Aeromed Services Corp. -- http://www.aeromedems.com/-- offers air ambulance services. The company filed for Chapter 11 protection on Jan. 31, 2007 (Bankr. D. P.R. Case No. 08-00518). Alexis Fuentes-Hernandez, Esq. represents the Debtor in its restructuring efforts. The Debtor's schedules of assets and liabilities reflect total assets of $2,639,407, and total liabilities of $3,847,262. ALADDIN MANAGED: Fitch Assigns DR6 Rating on 'C' Rated Notes ------------------------------------------------------------ Effective immediately, Fitch assigned a Distressed Recovery 6 rating to the class A notes of Aladdin Managed LETTRS Fund, Inc. and subsequently withdrew its ratings on both the class A and class B notes, as: -- $43,000,000 class A rated 'C', assigned 'DR6'; -- $22,500,000 class B 'C/DR6'. Aladdin Managed LETTRS Fund, Inc. was a total rate of return collateralized debt obligation which was liquidated pursuant to a breach in the termination trigger of its total return swap. Upon liquidation of the underlying collateral, both class A and class B notes received 0% recovery. AMBAC FINANCIAL: Completes $1 Bil. Public Offering of Common Stock ------------------------------------------------------------------ Ambac Financial Group Inc. completed its $1.155 billion public offering of 171,111,111 shares of common stock, par value $0.01 per share, at $6.75 per share. Ambac also placed 14,074,074 shares of common stock in a private placement for $95 million with two financial institutions. In addition, Ambac also completed its $250 million public offering of 5 million equity units, with a stated amount of $50 per unit. The equity units carry a total distribution rate of 9.5%. The threshold appreciation price of the equity units is $7.97 which represents a premium of approximately 18% over the concurrent public offering price of Ambac's common stock of $6.75 per share. "We were able to execute a significant capital raise in a very challenging market," Michael Callen, chairman and CEO of Ambac Financial Group, commented. "For this, we are thankful to our investors and other market participants for their strong support. Throughout this process, we remained focused on our ultimate goal of safe-guarding and protecting our triple-A franchise. This is a critical milestone in our plan to restore market confidence in our financial strength. The current market environment offers an excellent opportunity for Ambac to capitalize on its long-standing relationships in many sectors." Ambac intends to contribute the net proceeds from these offerings to its insurance company subsidiary Ambac Assurance Corporation in order to increase its capital position, less approximately $100 million, which it intends to retain at Ambac to provide incremental holding company liquidity to pay principal and interest on its indebtedness, to pay its operating expenses and to pay dividends on its capital stock. Proceeds from the settlement of the purchase contracts forming a part of the equity units, in May 2011, will be used to repay $142.5 million of the company's debt maturing Aug. 1, 2011, to the extent that the cash proceeds of such settlement are sufficient for such repayment. The remaining proceeds will be retained at Ambac. Proceeds from the settlement of the purchase contracts will not be used to repurchase common stock. Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Banc of America Securities LLC and UBS Investment Bank were joint book-running managers, and Keefe Bruyette & Woods Inc., Dresdner Kleinwort Securities LLC, BNY Capital Markets Inc. and KeyBanc Capital Markets Inc. were co-managers, for the common stock offering. Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Banc of America Securities LLC and UBS Investment Bank were joint book-running managers, and Keefe Bruyette & Woods Inc. was also a co-manager, for the equity units offering. Sandler O'Neill + Partners L.P. served as independent financial advisor to Ambac with respect to these offerings. 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 by the 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. AMORTIZING RESIDENTIAL: Realized Losses Prompts S&P's Rating Cuts ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on five classes of mortgage pass-through certificates issued by Amortizing Residential Collateral Trust's series 2002-BC10 and 2004-1. At the same time, S&P placed the 'AAA' rating on class A4 from series 2002-BC10 on CreditWatch with negative implications. Furthermore, S&P affirmed its ratings on the remaining classes from these two series. The downgrades reflect realized losses that have exceeded monthly excess interest cash flow, which completely eroded the overcollateralization (O/C) for both the transactions. O/C for series 2002-BC10 was reduced to $0 during the February 2008 remittance period, resulting in a realized principal loss of $5,639.08 for class M3. O/C for series 2004-1 was depleted in June 2007, resulting in realized losses for classes B1 and B2 in June and November 2007, respectively. Additionally, series 2004-1 entered its step-down period in October 2007 and has continued to decrease credit support since S&P's last rating action on this transaction. The downgraded transactions have sizable loan amounts that are severely delinquent (90-plus days, foreclosures, and REOs), suggesting that the unfavorable performance trends are likely to continue. As of the February 2008 remittance report, the severe delinquencies are $5.588 million, or 20.03% of the current pool balance, for series 2002-BC10; and $18.831 million, or 15.11% of the current pool balance, for series 2004-1. S&P placed the 'AAA' rating on class A4 from series 2002-BC10 on CreditWatch with negative implications due to the current severe delinquency pipeline relative to anticipated reductions in credit support during the next several months. Based on S&P's projection, class A4 could lose approximately $2.3 million in subordination over the next several months due to principal payments to the M1 class as the deal continues to step down. This could reduce support provided through subordination to approximately $5.020 million, while the current severe delinquency pipeline amounts to $5.588 million. Additionally, the transaction has suffered increasing loss severities on liquidations, thereby heightening the risk posed by these delinquencies. Based on remittance reports for the past year, the approximate current-month average loss severities (calculated as the current-month realized loss or gain divided by the prior actual balance of the loan) have increased from an already significant 12-month average of 60.5% to a three-month average of 71.7%. S&P will closely monitor the developing relationship between credit support for the A4 class and delinquencies. If current trends continue, S&P will take negative rating actions on the class A4 certificates. Conversely, if the ratio of delinquencies to credit support improves, S&P will affirm the 'AAA' rating on the class and remove it from CreditWatch. The affirmations reflect both current and projected credit support percentages that meet or exceed the loss coverage levels for the current ratings. Subordination, O/C, and excess interest cash flow provide credit support for these transactions. Additionally, series 2002-BC10 benefits from a loan-level primary mortgage insurance policy through Mortgage Guaranty Insurance Corp. (MGIC; 'AA-/Watch Neg' financial strength rating) covering 58.55% of the 80-plus loan-to- value loans at origination (to cover them to a LTV of 60%). The collateral for these series consists of 30-year subprime, fixed- or adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Amortizing Residential Collateral Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-BC10 M1 CCC B 2002-BC10 M3 D CCC 2004-1 M6 BBB A- 2004-1 M7 BB BBB+ 2004-1 M8 B BB+ Rating Placed on CreditWatch Negative Amortizing Residential Collateral Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-BC10 A4 AAA/Watch Neg AAA Ratings Affirmed Amortizing Residential Collateral Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2002-BC10 M2 CCC 2004-1 A5 AAA 2004-1 M1 AA+ 2004-1 M2 AA 2004-1 M3 AA- 2004-1 M4 A+ 2004-1 M5 A 2004-1 M9 CCC ASARCO LLC: Wants to Assume BNY Capital Equipment Lease ------------------------------------------------------- ASARCO LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to assume its lease with BNY Capital Resources Corporation with respect to five haul trucks and various other mining equipment used in ASARCO's Ray and Mission Mines, and exercise the purchase option under the Equipment Lease and pay $2,480,711 to BNY. The payment under the purchase option is comprised of: -- $353,662, as the last quarterly rent due; -- $400,838, as the total cure amount; -- $174,770, as estimated legal cost related to the lease; and -- $1,726,211, as the BNY Equipment purchase price. ASARCO also seeks the Court's authority to pay applicable sales and property taxes due to BNY on the the equipment, for an amount mutually agreed by the parties to the lease agreement. Romina L. Mulloy, Esq., at Baker Botts LLP, in Dallas, Texas, relates that the BNY Lease will expire on September 30, 2008, and includes a purchase option provision that must be exercised by March 30, 2008. Ms. Mulloy asserts that assumption of the Lease and the related transactions should be approved on these merits: (a) The BNY Equipment is indispensable to ASARCO's successful mining operations at its Ray and Mission Mines, consequently increasing production and revenue; (b) The exercise of the early purchase option would equate to a savings of approximately $1,500,000, in regard to four of the trucks alone, than if the Debtors purchases them at fair market value at $1,000,000, each; and (c) The early purchase price, which is 16.3% of the $10,494,567, original cost, is competitive with its fair market value at the time of the expiration of ASARCO's option to purchase the equipment. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008, to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Court Appoints Examiner but Limits Probe Duties ----------------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas appointed a Chapter 11 examiner in ASARCO LLC and its debtor affiliates' bankruptcy cases. Judge Schmidt, however, denied approval of the scope of investigation to be performed by the examiner proposed by Asarco Incorporated. Judge Schmidt ruled that the examiner will not have any current duties after concluding that "no current matters in [ASARCO's] case warrants the attention of an examiner." Any party has the right to ask the Court to assign specific duties to the Examiner at any time, Judge Schmidt ruled. As reported in the Troubled Company Reporter on Feb. 8, 2008, seven entities objected to Asarco Incorporated's request to appoint a Chapter 11 examiner: 1) ASARCO LLC and debtor-affiliates; 2) Official Committee of Unsecured Creditors for ASARCO LLC; 3) Official Committee of Unsecured Creditors for the Asbestos Subsidiary Debtors and Robert C. Pate, the Future Claims Representative; 4) United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO; 5) The U.S. Government; 6) Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., and Citigroup Global Markets, Inc.; and 7) Wells Fargo Bank, N.A., as successor Indenture Trustee under an Indenture and Bankers Trust Company. The Objecting Parties pointed out that it is Asarco Inc.'s fifth attempt to take over the bankruptcy case of ASARCO LLC, and another attempt to delay the Debtors' reorganization efforts. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008, to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Settles U.S. Government, Et Al., Claims for $80.8MM --------------------------------------------------------------- ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas to approve separate settlement agreements with: (a) BNSF Railway Company entitling BNSF $1,300,000 in general unsecured claim response costs at the Tacoma Site, and a $12,500, general unsecured claim for the Everett Site; and (b) the U.S. Government, the state of Missouri, and The Doe Run Resources Corporation, entitling those parties general unsecured claims totaling $79,513,162, for response costs and natural resource damages at the Southeast Missouri Sites. The $79,513,162 general unsecured claim for the Southeast Missouri Claimants will be allocated as: Claimant Settlement Amount -------- ----------------- U.S. Government on behalf $37,500,000 of the Environmental Protection Agency U.S. Government on behalf 233,000 of the Department of the Interior The DOI and Missouri on 34,767,000 behalf of the state's Department of Natural Resources Missouri 1,250,000 Missouri and Doe Run 5,000,000 Doe Run 763,162 ASARCO, on the one hand, and BNSF, the U.S. Government, the state of Missouri, and Doe Run, on the other hand, agree to mutually release each other from any claims arising out of or in any way connected with the Everett and Tacoma Smelters. The Southeast Missouri Settlement further provides that ASARCO's obligations to perform work pursuant to any outstanding Consent Decree, Unilateral Administrative Order or Administrative Order on Consent, including these Administrative Orders will be fully resolved and satisfied and ASARCO will be removed as party to those decrees: * The Administrative Order on Consent for a Remedial Investigation and Feasibility Study for Big River Mine Tailings Site (In the Matter of St. Francois County Mining Area, Docket No. VII-97-F-0002, Respondents: The Doe Run Resources Corporation and ASARCO Incorporated); * The Administrative Order on Consent for an Engineering Evaluation/Cost Analysis for the Federal Mine Tailings Site (In the Matter of Federal Tailings Pile Site, Docket No. VII-97-F-0009, Respondents: The Doe Run Resources Corporation, ASARCO Incorporated, and the State of Missouri Department of Natural Resources, Division of State Parks); and * The Consent Decree between ASARCO and the State of Missouri Department of Natural Resources entered September 6, 1994, settling certain claims and requiring that certain work be performed related to the Glover Smelter site (ASARCO Inc., Missouri Lead Division v. State of Missouri and Missouri Department of Natural Resources, Missouri State Court, Circuit Court of Iron County, Missouri, Case No. CV594 119CC). The Southeast Missouri Settlement further provides that ASARCO is entitled to protection from contribution actions or claims as provided by Section 113(f)(2) of the Comprehensive Environmental Response, Compensation, and Liability Act and Section 9613(f)(2) of the U.S. Public Health and Welfare Code, for all matters addressed in the Settlement, except with respect to the $763,162, general unsecured claim allowed to Doe Run. The settlements, according to Tony M. Davis, Esq., at Baker Botts, L.L.P., in Houston, Texas, are products of a series of mediation sessions between ASARCO and the creditors in early September 2007. Mr. Davis asserts that the settlements resolve many disputed technical issues that would have significant impact on the ultimate value of any allowed claim. Those issues, which would require significant time and money to resolve, highlight additional litigation risks faced by the settling parties, he avers. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Court gave the Debtors until April 11, 2008, to file a plan of reorganization. (ASARCO Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATLANTA STRUCTURAL: Case Summary & 15 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Atlanta Structural Products, Corporation dba Structural Products Corporation 4975 Buford Highway Norcross, GA 30071 Bankruptcy Case No.: 08-64751 Type of Business: The Debtor manufactures structural wood members. Chapter 11 Petition Date: March 12, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: John C. Pennington, Esq. John C. Pennington, P.C. P.O. Box 275 Helen, GA 30545 Tel: (706) 878-0033 Fax: (706) 878-9916 jcppc@alltel.net Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's list of its 15 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ MBH Building Solutions $592,634 c/o Kenneth Hindman, Esq. 100 Peachtree Street, Northwest Atlanta, GA 30303 Louisiana - Pacific Corp $340,925 Noth 13403 Government Way Hayden Lake, ID 83835 Thomas Young Loan $273,810 3060 Woodvale Court Alpharetta, GA 30022 Bluelinx $107,913 All Temp Storage $81,296 Penske Truck Leasing Co, LP $32,372 Cantrell-McCullogh $18,507 NMHG $14,269 Citicorp Leasing $13,194 Wells Fargo $6,335 DeLage Landen $4,786 Sprint $4,700 Baytree Leasing $1,302 Unifirst Corporation $799 Axsa Document Solutions $202 AXIA INC: Decline in Product Demand Spurs Moody's to Junk Ratings ----------------------------------------------------------------- Moody's Investors Service lowered the ratings of Axia, Inc., including its corporate family rating to Caa2 from B3, its probability of default rating to Caa3 from Caa1, and its senior secured bank credit facility to Caa2 from B3. The ratings outlook was revised to negative from stable. The downgrade was prompted by the ongoing decline in demand for Axia's products, its deteriorating credit metrics, weak liquidity, and the company's violation of two of the principal financial covenants under its bank credit facility in the fourth quarter of 2007. Moody's expects Debt-to-EBITDA leverage to increase to above 6.5x, and EBIT-to-interest coverage to remain substantially below 1.0x, driven by declining operating income. Axia's Caa2 corporate family rating reflects the company's small size, high financial leverage, weak free-cash-flow, and the company's dependence on residential home building activity. The company's leading market position in the automatic taping and finishing tools business, strong brand recognition, broad geographic diversification and strong EBITDA margins partially mitigate these risks. The company's debt instruments reflect an overall probability of default of Caa3. The Caa2 instrument ratings on Axia's senior secured term loan and revolving credit facility reflect an LGD3 (33%) loss given default rating, and are rated equally with the corporate family rating as there is no debt cushion afforded by junior capital. These ratings or assessments were affected by this action: -- Corporate Family Rating lowered to Caa2 from B3; -- Probability-of-Default rating lowered to Caa3 from Caa1; -- $175.0 million senior secured bank credit facility lowered to Caa2 (LGD3, 33%) from B3 (LGD3, 33%). Axia, Inc., headquartered in Duluth, Georgia, is a leading manufacturer, marketer and distributor of ATF tools in North America. BEAR STEARNS: Federal Probe to Focus on April 2007 Conference Call ------------------------------------------------------------------ The investigation conducted by the office of the U.S. Attorney for the Eastern District of New York on the collapse of Bear Stearns High-Grade Structured Credit Strategies Master Fund, Ltd., and Bear Stearns High-Grade Structured Credit Enhanced Leverage Master Fund, Ltd., may focus on a conference call held in April 2007, Kate Kelly at the Wall Street Journal said, citing people familiar with the matter. Specifically, the Journal said New York federal prosecutors have launched an investigation into whether Ralph Cioffi, the Funds' former manager, and his colleague, Matthew Tannin, engaged in securities fraud by telling Fund investors they were optimistic about the prospects for the Funds when they worried privately about the funds' future. The Journal related that according to insider sources, Mr. Cioffi told investors in April 2007 that the funds were down "just slightly" for the month. However, Mr. Cioffi released figures in May 2007 that revealed that the Enhanced Fund was down 23% through April, and the Leveraged Fund down to about 5%, the Journal noted. The Journal further related that the insider sources added that around the same time as the April conference, Mr. Cioffi was holding continuing discussions in internal e-mails with colleagues about the worrisome state of the credit markets, and "wondering aloud whether the declines in [the U.S.] subprime securities would spell trouble for his funds." New York prosecutors, according to the Journal, are examining whether any disparity between Mr. Cioffi's statements during the April 2007 conference and his internal e-mails to colleagues could constitute fraud. The Journal reported that in early March 2007, Mr. Cioffi took $2,000,000 of his own money out of the Enhanced Fund into a third fund he also managed. According to the Journal, Mr. Cioffi has told his associates that the money transfer, which was approved by compliance officers at Bear Stearns Asset Management, was intended to show confidence in the third fund. "The Bear Stearns investigations are significant because the collapse of the firm's two internal funds helped trigger the credit crisis, leading other financial firms to eventually re- price their holdings of mortgage securities," the Journal said. In other news, the Federal Bureau of Investigation has opened criminal inquiries into 14 companies as part of an investigation of the subprime-mortgage crisis, which investigation is focusing on accounting fraud, securitization of loans and insider trading. The Journal said that the FBI has not identified the companies under investigation but said it is looking into allegations of fraud in various stages of the mortgage process, from companies that bundled the loans into securities to the banks that ended up holding them. The Journal noted that FBI officials involved in the investigation have said that they are working with the U.S. Securities and Exchange Commission, which has initiated more than three dozen investigations in the subprime-mortgage business, including the role of mortgage brokers, investment banks and due diligence companies involved in the underwriting and securitization of loans. About Bear Stearns Funds Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. are open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law (2007 Revision) of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint provisional liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. Fred S. Hodara, Esq., Lisa G. Beckerman, Esq., and David F. Staber, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the liquidators in the United States. The Funds' assets and debts are estimated to be more than $100,000,000 each. (Bear Stearns Funds Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). BEAR SWAMP: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Bear Swamp Road Associates, LLC 53 Flock Road Mercerville, NJ 08619 Bankruptcy Case No.: 08-14304 Chapter 11 Petition Date: March 11, 2008 Court: District of New Jersey (Trenton) Judge: Michael B. Kaplan Debtor's Counsel: Scott Eric Kaplan, Esq. (kaplanlaw1@verizon.net) Professional Center at Hamilton 2083 Klockner Road Hamilton, NJ 08690 Tel: (609) 587-2800 Estimated Assets: $1 million to $100 million Estimated Debts: $100,000 to $1 million The Debtor did not file a list of its largest unsecured creditors. BENCHMARK ELECTRONICS: Earns $21 Million in 2007 Fourth Quarter --------------------------------------------------------------- Benchmark Electronics Inc. reported net income of $21.0 million for the fourth quarter ended Dec. 31, 2007. In the comparable period of 2006, net income was $28.0 million. Sales were $735.0 million for the quarter ended Dec. 31, 2007, compared to $737.0 million for the same quarter in the prior year. Excluding restructuring charges, integration costs, amortization of intangibles and the impact of stock-based compensation costs, the company would have reported net income of $25.0 million in the fourth quarter of 2007. Excluding restructuring charges and the impact of stock-based compensation costs, the company would have reported net income of $29.0 million in the fourth quarter of 2006. Sales for the years ended Dec. 31, 2007, and 2006, were each $2.9 billion. Net income for the year ended Dec. 31, 2007, was $93.0 million. In the prior year, net income was $112.0 million. Excluding restructuring charges, integration costs, amortization of intangibles, the impact of stock-based compensation costs and a discrete tax benefit related to a previously closed facility, the company would have reported net income of $98.0 million in 2007. Excluding restructuring charges, the impact of stock-based compensation expense and a tax benefit resulting from the closure of the company's UK facility, the company would have reported net income of $113.0 million in 2006. "In 2007 we achieved several major goals we expanded our customer base, enhanced our manufacturing and engineering capabilities, completed the integration of recent acquisitions, and realigned our manufacturing facilities," said Cary T. Fu, the company's chief executive officer. "We are delighted to have the heavy lifting behind us. We are on an excellent pathway for increased business from new and existing customers in 2008." As of Dec. 31, 2007, the company had cash and cash equivalents totaling $199.2 million, short-term investments totaling $182.8 milllion and $99.7 million available for borrowings under its revolving credit line. During the period from July 25, 2007, to Dec. 31, 2007, the company repurchased a total of 2.6 million common shares for $53.0 million at an average price of $20.33 per share. Through Feb. 27, 2008, the company has repurchased a total of 4.1 million shares for $77.3 million at an average price of $18.86 per share. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $1.76 billion in total assets, $474.3 million in total liabilities, and $1.29 billion in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?291c About Benchmark Electronics Headquartered in Angleton, Texas, Benchmark Electronics Inc. (NYSE: BHE) -- http://www.bench.com/-- is in the business of manufacturing electronics and provides its services to original equipment manufacturers of computers and related products for business enterprises, medical devices, industrial control equipment, testing and instrumentation products, and telecommunication equipment. Benchmark's global operations include 20 facilities in ten countries. * * * As reported in the Troubled Company Reporter on Jan. 21, 2008, Moody's Investors Service assigned a Ba2 (LGD-3, 39%) rating to Benchmark Electronics Inc.'s new 5-year $100 million senior secured revolving credit facility due 2012 and affirmed the company's Ba3 corporate family rating. The rating outlook is stable. B/E AEROSPACE: Earns $42.3 Million in Fourth Quarter 2007 --------------------------------------------------------- B/E Aerospace, Inc. disclosed financial results for the fourth quarter and full year 2007. Net earnings for the fourth quarter were $42.3 million, as compared with net earnings of $21.7 million in the fourth quarter of 2006. Net earnings increased by $20.6 million, or 94.9%, as compared with the fourth quarter of the prior year. The 57.9% growth in operating earnings as compared to the fourth quarter of last year was driven by a 44.1% increase in revenues and a 120 basis point expansion in operating margin. Revenue growth was driven by robust market conditions, market share gains, and particularly strong aftermarket retrofit program revenues from major international airlines. The 14.6% operating margin was 120 basis points higher than the same period last year reflecting the high in quality backlog and operating leverage at the higher revenue level despite start up and learning curve costs on new programs, primarily in the seating and engineering services segments. For the year ended Dec. 31, 2007, revenues were $1.68 billion, an increase of 48.7% as compared with the prior year. Operating earnings for 2007 were $247.0 million, or 66.6% greater than the prior year. The operating earnings growth was driven primarily by the 48.7% increase in revenue and a 160 basis point expansion in operating margin to 14.7 percent of sales, reflecting operating leverage at the higher revenue level, despite acquisitions and costs related thereto in the distribution and interior systems segments, and start up and learning curve costs on new programs primarily in the seating, business jet and engineering services segments. Revenue growth was driven by robust market conditions and market share gains, and included strong retrofit program deliveries as well as an increase in demand related to growth in new aircraft deliveries. Organic revenue and operating earnings growth for the year ended Dec. 31, 2007 were 41.0% and 68.9%, respectively. For the year ended Dec. 31, 2007, earnings before income taxes of $215.1 million were $125.1 million, or 139.0%, greater than in 2006. For the full year 2007, net earnings of $147.3 million were $61.7 million, or 72.1%, greater than net earnings in 2006. At Dec. 31, 2007, B/E Aerospaces debt-to-capital ratio was 11%. Net debt at Dec. 31, 2007 was $70 million, which represents total debt of $152 million less cash and cash equivalents of $82 million. At Dec. 31, 2007, the company had no borrowings on its $200 million revolving credit facility. Working capital at Dec. 31, 2007 was $711.6 million, which increased by $255.6 million, or 56.0%, as compared with the prior year as a result of the nearly 50% increase in revenues, substantial investments in inventories associated with the product line expansion in the distribution segment and to support the record $2.2 billion backlog. Capital expenditures during 2007 were $32.6 million, as compared with $24.1 million in the prior year. Depreciation and amortization in 2007 was $35.0 million as compared to $29.4 million in 2006. At Dec. 31, 2007, the company's balance sheet showed total assets of $1.7 billion and total liabilities of $518.2 million, resulting in a $1.2 billion stockholders' equity. Equity, as of Dec. 31, 2006, was $706.0 million. Based in Wellington, Florida, B/E Aerospace, Inc. (Nasdaq:BEAV) -- http://www.beaerospace.com/-- manufactures aircraft cabin interior products, and is an aftermarket distributor of aerospace fasteners. B/E designs, develops and manufactures a broad range of products for both commercial aircraft and business jets. B/E manufactured products include aircraft cabin seating, lighting, oxygen, and food and beverage preparation and storage equipment. The company also provides cabin interior design, reconfiguration and passenger-to-freighter conversion services. B/E sells and supports its products through its own global direct sales and product support organization. * * * On May 2007, Moody's Investors Service assigned B/E Aerospace, Inc. a Ba2 corporate family rating, a Ba1 senior secured credit facility rating and a B1 senior unsecured note rating. The ratings still hold to date. BLUE RIVER: Plans Orderly Liquidation of Municipal Bond Fund ------------------------------------------------------------ Blue River Asset Management intends to undergo an "orderly liquidation" of its municipal bond fund, which used to have $1 billion in assets, Dane Hamilton of Reuters reports, citing sources knowledgeable with the issue. The sources told Reuters that Blue River, with the help of JP Morgan Chase & Co., pooled about $110 million in investment money and will put up a new domestic fund to continue its operations. Various reports say that the raised money was intended to prevent a "collapse." Blue River refused to comment on the matter, Reuters says. Reuters reveals that Blue River barred investors from redeeming their money from the fund early March 2008. According to the report, Blue River intends to inform investors about the planned liquidation. Reuters says that the leverage level of Blue River could not be determined yet. Blue River is among the several hedge funds selling off their assets due to the ongoing crisis in the financial market. Blue River Asset Management -- http://www.blueriverfunds.com/-- is a hedge fund in the United States. BUFFETS HOLDINGS: U.S. Trustee Amends Creditors Committee --------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, amended the list of the members of the Official Committee of Unsecured Creditors in Buffets Holdings Inc. and its debtor- affiliates' bankruptcy cases. The U.S Trustee took out Western Asset Management Company. Based on the amended list, the members of the Committee are: (1) Commissary Operations, Inc. Attn: Lloyd Baldridge 2629 Eugenia Avenue Nashville, TN 37211 Tel No.: 615-231-4401 Fax No.: 615-231-4450 (2) HSBC Bank USA, National Association Attn: Sandra E. Horwitz 10 East 40th Street New York, NY 10016 Tel No.: 212-525-1358 Fax No.: 212-525-1300 (3) Kimco Realty Corporation Attn: Raymond Edwards 3333 New Hyde Park Rd. New Hyde Park, NY 11042 Tel No.: 516-869-2586 Fax No.: 516-336-5686 (4) Levine Leichtman Capital Partners Deep Value Fund L.P. Attn: Jason Schauer 335 North Maple Drive, Suite 130 Beverly Hills, CA 90210 Tel No.: 310-275-5335 Fax No.: 310-275-1305 (5) The Coca-Cola Company Attn: John Lewis, Jr. One Coca Cola Plaza Atlanta, GA 30311 Tel No.: 404-676-4016 Fax No.: 404-598-4016 (6) Van Eerden Food Service Attn: Daniel Van Eerden 650 Ionia Avenue, S.W. P.O. Box 3110 Grand Rapids, MI 49501 Tel No.: 616-475-0900 Fax No.: 616-774-3973 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BUFFETS HOLDINGS: Otterbourg Steindler as Panel's Counsel Approved ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of Buffets Holdings Inc. and its debtor-affiliates obtained authority from the United States Bankruptcy Court for the District of Delaware to retain Otterbourg Steindler Houston & Rosen PC as counsel. As reported in the Troubled Company Reporter on Feb. 20, 2008 the Committee said that it selected Otterbourg because of the firm's extensive experience in, and knowledge of, business reorganizations under Chapter 11 of the Bankruptcy Code. The Committee believed that Otterbourg is qualified to represent it in a cost-effective, efficient and timely manner. Specifically, the Committee needs Otterbourg to: -- assist and advise the Committee in its consultation with the Debtors relative to the administration of the Chapter 11 cases; -- attend meetings and negotiate with the representatives of the Debtors and other parties-in-interest; -- assist and advise the Committee in its examination and analysis of the conduct of the Debtors' affairs; -- assist the Committee in the review, analysis, and negotiation of any plan of reorganization or asset acquisition proposals that may be filed and to assist the Committee in the review, analysis, and negotiation of disclosure statements; -- assist the Committee in the review, analysis, and negotiation of any financing agreements; -- take all necessary action to protect and preserve the interests of the Committee, including: * possible prosecution of actions on its behalf; * if appropriate, negotiations concerning all litigation in which the Debtors are involved; and * if appropriate, review and analysis of claims filed against the Debtors' estates; -- generally prepare on behalf of the Committee all necessary motions, applications, answers, orders, reports and papers in support of positions taken by the Committee; -- appear, as appropriate, before courts and the Unites States Trustee, and to protect the interests of the Committee before the courts and the Trustee; and -- perform all other necessary legal services. Otterbourg will be paid for its legal services on an hourly basis and will be reimbursed for its actual, reasonable and necessary out-of-pocket disbursements: Partner & Counsel $530 to $795 Associate 245 to 575 Paralegal 175 to 205 Glen B. Rice, Esq., a member of Otterbourg, assured the Court that the firm does not have any connection with the Debtors, their creditors or any other party-in-interest; does not have any interests adverse to the Committee which would preclude it from acting as counsel to the Committee in matters upon which it is to be engaged; and is a "disinterested person" as that term is applied in Section 101(14) of the Bankruptcy Code. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BUFFETS HOLDINGS: Can File Schedules and Statements Until April 7 ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware has granted Buffets Holdings Inc. and its debtor-affiliates an additional 45 days, until April 7, 2008, to file schedules of assets and liabilities and statements of financial affairs. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, related that the necessity of the extension is largely due to the Debtors' more than 200 creditors, the size and complexity of the Debtors' businesses, and the limited staffing available to gather, process and complete the Schedules and Statements. Under Section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure, a debtor is required to file a schedule of assets and liabilities; schedule of current income and expenditures; schedule of executory contract and unexpired leases; and statement of financial affairs within 15 days after the Petition Date. Under Rule 1007-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware, that deadline is automatically extended to 30 days after the Petition Date if (i) the debtor has more than 200 creditors and (ii) the debtor's bankruptcy petition is accompanied by a list of all of the debtor's creditors and their addresses. In addition, Ms. Morgan said that since the Petition Date, and during the course of preparing the Schedules and Statements, the Debtors have been performing many critical tasks to position themselves to maximize value for their creditors. She contended that the time required to perform the tasks has necessarily limited the amount of time that the Debtors have been able to commit to preparing the Schedules and Statements. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CAPRI CONDOMINIUMS: Wants to Hire Gill Johnson as Appraiser ----------------------------------------------------------- The Capri Condominiums Limited Partnership asks permission from the U.S. Bankruptcy Court for the Middle District of Florida to employ Gilbert P. Johnson of Gill Johnson Appraisal as its appraiser. Gill Johnson's primary services will include: a) all research, analysis, and drafting necessary to prepare an appraisal of the Development, and separate appraisals of each of the Units, together with such related opinions as are necessary to address absorption questions, and any alternatives that might be urged by the Bank; b) all research, analysis, and drafting necessary to critique an appraisal of the Development that is anticipated by the Bank, and any other criticism that is complaint with USEPAP standard; c) preparation for and representation at Johnson's deposition as an expert witness, follow-up analysis in the event that such a deposition raises new issues or questions that must be investigated, and testimony at one or more evidentiary before this Court; and d) preparation for and presence at depositions and evidentiary hearings involving testimony of other experts, professionals, or business-oriented fact witnesses, so as to ensure the accuracy of the professional opinions that are being rendered. The firm will charge the Debtor with a flat rate of $125 per hour. Mr. Johnson assures the Court that his firm holds no interest adverse to the Debtor and its estate, and is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Tampa, Florida-based The Capri Condominiums LP owns and manages condominiums. Capri is operated by Euro American Investors Group in The Netherlands, which runs an office in Tampa, Florida. Euro American Investors -- http://www.eaig.nl/-- is an international company that offers a complete package property with the focus on the United States and Europe. Since its launch in 1979, Euro American Investors built a diversified portfolio of properties, apartments, offices, commercial buildings, and shopping malls. Capri Condominiums sought protection under chapter 11 on Feb. 6, 2008 (Bankr. M.D. Fla. Case No. 08-01553). Maureen A. Vitucci, Esq., at Gray Robinson PA represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between US$10 million and US$50 million. CAPRI CONDOMINIUMS: Asks Court OK to Hire RealtySouth as Broker --------------------------------------------------------------- The Capri Condominium Limited Partnership asks authority from the U.S. Bankruptcy Court for the Middle District of Florida to employ John McGill and RealtySouth as its brokers. RealtySouth is expected to provide marketing and brokerage services of the Debtor's property located at 1300 27th Place South, in Birmingham, Alabama. The documents submitted to the Court do not disclose the firm's billing rate. Mr. McGill assures the Court that the firm holds no interest adverse to the Debtor and its estates and is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Tampa, Florida-based The Capri Condominiums LP owns and manages condominiums. Capri is operated by Euro American Investors Group in The Netherlands, which runs an office in Tampa, Florida. Euro American Investors -- http://www.eaig.nl/-- is an international company that offers a complete package property with the focus on the United States and Europe. Since its launch in 1979, Euro American Investors built a diversified portfolio of properties, apartments, offices, commercial buildings, and shopping malls. Capri Condominiums sought protection under chapter 11 on Feb. 6, 2008 (Bankr. M.D. Fla. Case No. 08-01553). Maureen A. Vitucci, Esq., at Gray Robinson PA represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between US$10 million and US$50 million. CARIBBEAN ISLAND: Case Summary & Four Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Caribbean Island Adventures, Inc. 6545 Glucksberg St. John, VI 00830 Bankruptcy Case No.: 08-30003 Chapter 11 Petition Date: March 12, 2008 Court: District Court of the Virgin Islands Judge: Judith K. Fitzgerald Debtor's Counsel: Benjamin A. Currence, Esq. (currence@surfvi.com) P.O. Box 6143 St. Thomas, VI 00804-6143 Tel: (340) 775-3434 Total Assets: $4,000,093 Total Debts: $2,100,202 Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Morris Caribbean Publication, trade debt $3,040 P.O. Box 11199 St. Thomas, VI 00801-4199 Government of the VI; Tax taxes $810 Assessor's Office P.O. Box 488 St. John, VI 00831 Government of the VI; taxes $800 Corporations's Division 18 Kongens Gade St. Thomas, VI 00802 State of Delaware taxes $294 CARLYLE CAPITAL: Lenders Ready to Pounce on Assets; Nears Collapse ------------------------------------------------------------------ Carlyle Capital Corp. disclosed that its lenders are intent on seizing its assets after deals calling for standstill agreements with lenders fell through, Edward Evans of Bloomberg News reports. According to company statements, around $16.6 billion of the fund's debts recently defaulted, Bloomberg says. The funds co- founder David Rubenstein was "surprised" that the deals failed. "If Carlyle's lenders want their money right away, they'll liquidate the fund... [T]hat will put pressure on already stressed credit markets," London analyst Hank Calenti told Bloomberg. Debt that will remain at Carlyle will "soon" default, relates Bloomberg. As reported in the Troubled Company Reporter on March 13, 2008, Deutsche Bank AG and J.P. Morgan Chase & Co. rejected Carlyle Capital's plea to enter into a standstill agreement with lenders to prevent liquidation of the hedge fund's $16 billion in securities. The Carlyle Group had been engaged in continuing discussions with its lenders, on various subjects, including the execution of standstill agreements, while evaluating all available options to maximize value for all interested parties. About $5.7 billion out of Carlyle Capital's $21 billion assets held as collateral was liquidated on March 10, 2008. Deutsche Bank liquidated part of Carlyle Capital's assets because of its slow response to the bank's demand to put up additional capital. According to a March 5 letter, Carlyle Capital CEO John Stomber stated that he was frustrated about dealers becoming extra tight and cautious with their credit standards despite The Carlyle Group's support. In his letter, Mr. Stomber called for a meeting with lenders early this week to talk about getting financing. In turn, Deutsche Bank sent a default notice to Carlyle demanding a statement on its financial status. Bloomberg recounted that Carlyle raised $600 million through a private offering and $345 million through an initial public offering. Carlyle Capital then borrowed more than 20 times its pooled fund, making it highly leveraged. About Carlyle Capital Carlyle Capital Corporation Limited (Euronext Amsterdam: 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. The company invests in a diversified portfolio of fixed income assets including high-grade mortgages and credit products. The company'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 company 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. CENTERPOINT ENERGY: Earns $108 Million in 2007 Fourth Quarter ------------------------------------------------------------- CenterPoint Energy Inc. reported net income of $108.0 million for the fourth quarter ended Dec. 31, 2007, compared to $67.0 million for the same period of 2006. Results for the fourth quarter of 2006 were reduced by $12.0 million related to the resolution of the company's Zero Premium Exchangeable Subordinated Notes tax issue. Excluding this item, net income for the fourth quarter of 2006 would have been $79.0 million, compared to $108.0 million for the fourth quarter of 2007. Net income for the year 2007 was $399.0 million, compared to $432.0 million for 2006. Results for the year 2006 were favorably impacted by $92.0 million due to the resolution of the ZENS tax issue but were negatively impacted by $21.0 million from a settlement related to the company's 2001 unbundled cost of service order issued by the Texas Public Utility Commission. Excluding the net effect of these items, net income for the year 2006 would have been $361.0 million, compared to $399.0 million for the year 2007. "I am very pleased with the overall financial results that we are reporting today," said David M. McClanahan, president and chief executive officer of CenterPoint Energy. "Our natural gas utilities showed significant improvement reflecting actions we have taken to enhance the operational and financial performance of this business. Our interstate pipelines and field services businesses turned in strong performances and our electric utility and competitive natural gas marketing businesses had a very solid year. Our company is well positioned to continue to take advantage of opportunities in each of our businesses." Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $17.87 billion in total assets, $16.06 billion in total liabilities, and $1.81 billion in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $2.79 billion in total current assets available to pay $3.79 billion in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?291d About CenterPoint Energy Inc. Headquartered in Houston, Texas, CenterPoint Energy Inc. (NYSE: CNP) -- http://www.CenterPointEnergy.com/-- is a domestic energy delivery company that includes electric transmission & distribution, natural gas distribution, competitive natural gas sales and services, interstate pipelines and field services operations. The company serves more than five million metered customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. * * * Moody's Investor Service placed CenterPoint Energy Inc.'s issuer, bank loan debt and senior unsecured debt ratings at 'Ba1' in July 2005. These ratings still hold to date with a stable outlook. CENTRAL ILLINOIS: Hires Brent King as Chief Restructuring Officer ----------------------------------------------------------------- Central Illinois Energy LLC employed Brent King as its chief restructuring officer in January 2008, Ethanol Producer Magazine reports. According to the report, Mr. King has 20 years of managerial experience in the agricultural and manufacturing industries. Mr. King is expected to assist in the bankruptcy proceedings of Central Illinois Energy and look for new owners by April 15, 2008, Magazine relates. Mr. King told Magazine that they have two months to complete the plant in Canton, which was previously suspended, and then begin operations. About Central Illinois Energy Based in Canton, Illinois, Central Illinois Energy LLC -- http://www.centralillinoisenergy.com/-- operates a 37-million gallons-per-year ethanol plant. The Debtor filed for Chapter 11 protection on Dec. 13, 2007 (Bankr. C.D. Ill. Case No 07-82817). Barry M. Barash, Esq., at Barash & Everett, LLC, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 10 has not appointed creditors to serve on an Official Committee of Unsecured Creditors in this case. When the Debtor filed for protection from its creditors, it listed assets between $1 million to $100 million, and more than $100 million in liabilities. CHARTER COMMUNICATIONS: Prices $520 Million 2nd Lien 2014 Notes --------------------------------------------------------------- Charter Communications Inc.'s subsidiary, Charter Communications Operating LLC agreed to issue $520 million principal amount of 10.875% 2nd lien notes due 2014, which are to be guaranteed by CCO Holdings LLC and certain subsidiaries of Charter Operating, in a private transaction. The purchase price of the notes will be approximately 96.1% of the principal amount. The net proceeds of this proposed issuance will be used to repay, but not permanently reduce, the outstanding debt balances under the existing revolving credit facility of Charter Operating. Headquartered in St. Louis, Missouri, Charter Communications Inc. (NASDAQ: CHTR) -- http://www.charter.com/-- is a broadband communications company and a publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. CHARTER COMMUNICATIONS: Moody's Holds Ratings After Debt Issue -------------------------------------------------------------- Moody's Investors Service affirmed all ratings for Charter Communications, Inc. and its subsidiaries following the upsized debt issuance completed by Charter Communications Operating, LLC, including an extra $225 million (to $500 million) on the senior secured (1st lien) term loan and $20 million (to $520 million) of incremental issuance on the senior secured (2nd lien) notes, both due 2014. Ratings for approximately 60% of the company's debt had been affirmed (with the balance being lowered by one notch) when the transactions were initially announced yesterday. In accordance with expectations, the new debt was issued at a discount to par (approximately 96%) and successfully cleared the market at reasonably attractive rates from the company's perspective. Moody's notably views these transactions as now effectively ensuring the adequacy of Charter's liquidity profile (short of a covenant breach, which is not expected) at least through the full year of 2009 (whereas previously Moody's had concerns about a potential liquidity shortfall in the second quarter of 2009), and likely into the early part of 2010. Of course a large ($2.3 billion) maturity looms thereafter in the third quarter of 2010, and more than $14 billion comes due between 2011 and 2014 (nearly $10 billion in 2014). "Notwithstanding the immediate liquidity boost, we are skeptical that operational improvements and organic growth alone will be sufficient to ensure continued capital markets access at these much more significant levels, particularly as the senior-most tranches available to the company get maxed out," noted Moody's Senior Vice President Russell Solomon. "Our ratings continue to incorporate the expectation that approximately half of these intermediate-term maturities may ultimately still be compromised pursuant to a larger scale balance sheet restructuring," Solomon added. These list summarizes the affirmation of all current ratings, along with associated LGD rates for the rated debt instruments, some of which have changed slightly from yesterday's release due to the aforementioned upsizing of the new debt issuances. Charter Communications, Inc. -- Corporate Family Rating: Caa1 -- Probability-of-default Rating: Caa2 -- Senior unsecured notes: Ca (LGD5 -- 87%) Charter Communications Holdings, LLC. -- Senior unsecured notes: Ca (LGD5 -- 84%) CCH I Holdings, LLC. -- Senior unsecured notes: Caa3 (LGD5 -- 77%) CCH I, LLC. -- Senior secured notes: Caa3 (LGD4 -- 59%) CCH II, LLC. -- Senior notes: Caa2 (LGD3 -- 42%) CCO Holdings, LLC. -- Senior notes: Caa1 (LGD3 -- 33%) -- Term Loan: Caa1 (LGD3 -- 33%) Charter Communications Operating, LLC. -- Senior secured (2nd lien) notes: B3 (LGD2 -- 23%) -- Senior secured (1st lien) Revolver & Term Loan: B1 (LGD1 -- 6%) -- Rating Outlook: Stable -- Speculative Grade Liquidity Rating: SGL-3 Headquartered in St. Louis, Missouri, Charter Communications is a domestic multiple system cable operator serving approximately 5.2 million basic video subscribers (and 5.6 million customers). CHARTER COMMUNICATIONS: S&P Chips Debt Rating on CCI's Unit to B- ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings on the second-lien portion of Charter Communications Operating LLC's proposed $1.02 billion new senior secured financing, which consists of a $500 million first-lien incremental term loan and a $520 million second-lien notes issue (the co-borrower on the notes is Charter Communications Operating Capital Corp.). The ratings are being revised solely as a result of the increase in transaction size since S&P's ratings on these new issues were initially assigned on March 11. Charter Communications Operating LLC is an indirect subsidiary of Charter Communications Inc. The issue-level rating on the first-lien incremental term loan remains at 'B+' (two notches higher than the 'B-' corporate credit rating on Charter Communications Inc.) and the recovery rating on this debt remains at '1', indicating that lenders can expect very high (90%-100%) recovery in the event of a payment default. S&P lowered the issue-level rating on the company's 10.875% second-lien notes to 'B-' (at the same level as the corporate credit rating) from 'B', while revising the recovery rating on this debt to '3', indicating that lenders can expect meaningful recovery in the event of a payment default (50%-70%), from '2'. The new term loan and notes are pari passu with their respective existing instruments and possess substantially similar terms and conditions. The issue-level rating on Charter Communications Operating LLC's previously existing second-lien notes was also lowered to 'B-' from 'B' to correspond with the 'B-' issue rating on the proposed new second-lien notes, and the recovery rating on this debt was revised to '3' from '2'. Ratings List Ratings Revised To From -- ---- Charter Communications Operating LLC Second-Lien Debt B- B Recovery Rating 3 2 CHRISTINE STAUFFER: Case Summary & 10 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Christine F. Stauffer 1425 E. Stuart Street Fort Collins, CO 80525 Bankruptcy Case No.: 08-12829 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Type of Business: Chapter 11 Petition Date: March 10, 2008 Court: District of Colorado (Denver) Debtor's Counsel: Michael J. Pankow, Esq. 410 17th Street 22nd Floor Denver, CO 80202 Tel: 303-223-1100 Fax: 303-223-1111 mpankow@bhfs.com Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million Debtor's list of its 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Karen E. Hayes civil judgment $2,213,177 Attn: Peter S. Dusbabek Montgomery, Kolodny, Amatuzio & Dusbabek LLP 2625 Redwing Road, Suite 200 Fort Collins, CO 80526 WorldPoints line of credit $67,280 Attn: Bank of America P.O. Box 15026 Wilmington, DE 19850-5026 United Mileage Plus line of credit $30,702 P.O. Box 15298 Wilmington, DE 19850-5298 Mountain Gymnastics T.C. Inc. $954 North Shore Gas utility bill $587 Pacific Life life insurance $434 Xcel Energy utility bill $425 Mollie Painton PsyDInterplay $360 Fort Collins Utilities utility bill $353 AT & T Mobility phone bill $211 CHRYSLER LLC: Sells Tritec Motors in Brazil to Fiat Powertrain -------------------------------------------------------------- Chrysler LLC signed an agreement to transfer full ownership of Tritec Motors Ltda. to Fiat Powertrain Technologies. The purchase includes the facilities, manufacturing unit, production lines and the license to produce the current range of products. The Tritec Motors plant is located in the town of Campo Largo in the Curitiba metropolitan area, in the southern Brazilian state of Parana. "The announcement is great news and provides a stable future for Tritec under the ownership of Fiat Powertrain Technologies," said Chrysler Vice Chairman and President Tom LaSorda. Total investment Of FPT in this initiative will amount to BRL250 million (EUR83 million) including further development costs. In addition to acquiring one of the worlds most modern engine factories, FPT also disclosed that the Campo Largo manufacturing unit will produce a new range of mid-size gasoline and flex-fuel engines. This product will be developed jointly by the Engineering Centers in Betim and Torino, working together with staff at the Campo Largo plant. The acquisition of this plant by FPT FIAT Powertrain Technologies will create approximately 500 direct jobs and 1,500 indirect jobs, thus contributing significantly to economic growth in the city of Campo Largo, the local industrial district and the entire state of Parana. According to Alfredo Altavilla, FPT CEO, acquiring the Campo Largo manufacturing facility will enable us to reach two main strategic goals: first, to attract an even larger number of non- captive customers for this product. Secondly, to widen our product portfolio, offering a new extremely modern and competitive product range. Tritec Motors Tritec Motors was established in 1996 between Chrysler and the BMW Group to manufacture 1.4- and 1.6-liter four-cylinder gasoline engines. The Tritec name stands for the union of the three countries involved: Germany, the United States, and Brazil. The plant was built on a 314-acre (1.27 million square meter) plot of land. Construction of the 430,556 square foot (40,000 square meter) facility began in April 1998 and was completed by January 1999. The first motor was assembled in September of that same year. Built according to strict quality and technology standards, the gasoline powered, four-cylinder, 16-valve 1.6- and 1.4-liter engines were destined for export, formerly equipping all BMW MINI models worldwide; the Chrysler PT Cruiser in South Africa, Europe and other foreign markets; and formerly, the Chrysler (Dodge) Neon sold outside North America. About FIAT Powertain Fiat Powertrain Technologies S.p.A. was set up in March 2005 to pool all of the Fiat Groups expertise in engines and transmissions, and combine all of the powertrain resources of Fiat Group Automobiles, Iveco Motors, and Fiat Research Center and Elasis. Through its Powertrain Research & Technology unit, FTP conducts advanced engineering and research work to ensure that it maintains its technological excellence. In South America, FPT has 3,500 employees, three plants (Betim and Sete Lagoas in the Brazilian state of Minas Gerais, and Cordoba in Argentina) and a research center in Betim, focused on developing alternative fuel engines. 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: Wants District Court to Study Bankr. Court Rulings ---------------------------------------------------------------- Chrysler LLC asks the U.S. District Court for the Eastern District of Michigan to review the tool dispute rulings given by the Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan. As reported in the Troubled Company Reporter on March 4, 2008, Chrysler LLC, Chrysler Motors Company LLC, and Chrysler Canada Inc., took an appeal under 28 U.S.C. Section 158(a) before the District Court from the orders of Judge Shefferly that denied: i) the lifting of the automatic stay to allow Chrysler to regain possession of tooling located in Plastech Engineered Products Inc. and its debtor-affiliates' plants; and ii) issuance of a preliminary injunction in connection with the proposed recovery of tooling equipment. Judge Shefferly said in a court opinion that the Debtors needed to keep the tooling equipment to faciliate them in their reorganization. The balancing of interests favored Plastech, the Court said. The Court affirmed the Debtors' contentions that the automatic stay applies to both the tooling paid by Chrysler and the tooling that Chrysler has not paid for. In addition, the Court was convinced that if Chrysler takes immediate possession of the tooling, the Debtor will not be able to continue to provide parts uninterrupted to its other major customers and therefore any prospect of an effective reorganization will be lost. The Chrysler Group therefore asks the District Court to determine whether the Bankruptcy Court: -- erred in concluding that the Debtors' mere possession of certain tooling was sufficient to invoke the automatic stay under Section 362(a) of the Bankruptcy Code, where the Court agreed with Chrysler that it has a right to immediate possession of the tooling and where established caselaw provides that possession of property is sufficient to invoke the automatic stay only if there is some right of possession, i.e., "a good-faith, colorable claim to possession;" -- abused its discretion in denying Chrysler's motion to lift the automatic stay, where Chrysler established grounds to lift the stay under both Section 362(d)(1) ("cause" to lift the stay) and Section 362(d)(2) (debtor does not have equity in the property and the property is not "necessary to an effective reorganization"); -- clearly erred in finding that Chrysler did not demonstrate "cause" under Section 362(d)(1) of the Bankruptcy Code to lift the automatic stay and allow Chrysler to immediately recover its tooling, where the Bankruptcy Court relied solely on the "early stages" of the case as a basis to disregard what the court acknowledged as Chrysler's clear and unambiguous contractual rights; -- erred in finding that there was no "cause" to lift the automatic stay, and that Chrysler's tooling was "necessary" to the Debtors' "effective reorganization," where the continued possession of such tooling (as opposed to the receipt of revenue from Chrysler resulting from the production of component parts) would have no financial impact on the Debtor and would not avoid the financial harm on which the Bankruptcy Court relied in reaching its decision; -- clearly erred in permitting the Debtors to hold Chrysler' tooling hostage and, as a result, compelling Chrysler to continue purchasing component parts from the Debtors against its will; -- abused its discretion in denying Chrysler's request for injunctive relief, where the court agreed with Chrysler that it had a likelihood of success on the merits with respect to its right to demand possession of the tooling, and where Chrysler further demonstrated that: (a) without an injunction it will suffer irreparable harm in the form of immediate plant closures and loss of goodwill if it does not accede to the Debtors' financial demands; (b) such harm outweighs any potential harm to the Debtors if an injunction were to issue, and; (c) an injunction would serve the public interest by preventing the Debtors from using their Chapter 11 bankruptcy filing as a means of holding Chrysler's tooling hostage to extract financial accommodations from Chrysler; -- erred in relying on Chrysler's alternative request for specific performance under its contracts with the Debtors as a basis for denying Chrysler's request for injunctive relief, where Chrysler's entitlement to specific performance was irrelevant to Chrysler's request for immediate possession of its tooling; -- clearly erred in finding that Chrysler could not show irreparable injury in the absence of an injunction since any resulting damages to Chrysler "are compensable by money," where the court failed to consider the fact that the Debtors' insolvency renders it unlikely that Chrysler could ever recover damages, and where the Court also disregarded the evidence presented by Chrysler as to the catastrophic harm it will suffer from an interruption in the supply of parts to its plants, including irreparable harm to Chrysler's goodwill with its other suppliers and customers, that is difficult, if not impossible, to calculate; -- clearly erred in relying on purported harm to the Debtors' other Major Customers to justify its denial of Chrysler's request for relief from the automatic stay and for immediate possession of its tooling, where the testimony and evidence revealed that: (a) the tooling is used only to produce parts for Chrysler; (b) any harm to the Debtors would consist solely of a loss of revenue from the inability to continue to produce parts for Chrysler, and; (c) that the Debtors' other Major Customers, including General Motors Corporation, Ford Motor Company, and Johnson Controls, Inc., all supported Chrysler's right to immediate possession of its tooling; -- erred as a matter of law in relying on the so-called "policy considerations of Chapter 11" to trump Chrysler's contract rights under state law and to allow the Debtors to effectively hold Chrysler's tooling hostage to extract financial concessions, even though the court acknowledged that: (a) Chrysler's contracts with the Debtors "are clear and unambiguous in conferring upon Chrysler the right to take immediate possession of the tooling," and; (b) that Chrysler will suffer harm "either by having to contribute additional financial accommodations to the Debtors, or by having to shut down certain of its assembly lines and idle certain of its workers if it does not obtain the tooling." The documents were submitted to the District Court by Michael C. Hammer, Esq., at Dickinson Wright PLLC, in Ann Arbor, Michigan, on behalf of Chrysler Motors Company, LLC, and Chrysler Canada. 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. (Plastech Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) 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. CHRYSLER LLC: Plans to Shutter Company for Two Weeks in July ----------------------------------------------------------- Chrysler LLC disclosed its intention to shutter its entire operations for two weeks starting July 7, 2008, various sources report citing an e-mail message sent to Chrysler employees. Although, it isn't unusual for plants to idle production during the summer, the corporate-wide shutdown will affect Chrysler's 19,000 salaried workers, who will also be asked to go on a holiday together with the 52,500 hourly workers, Mike Ramsey of Bloomberg News says. Mr. Ramsey relates that the summer closing was once set for car manufacturers to transfer new tools for model-year switchovers, now July is scheduled for plant maintenance. Those working on special projects will have to remain, Dee-Ann Durbin of The Associated Press quotes Chrysler spokeswoman Mary Beth Heilprin. As reported in the Troubled Company Reporter on March 11, 2008, Chrysler disclosed that it was closing its Pacifica Advance Product Design Center outside Diego, and consolidate the advanced design studio to its home base in Auburn Hills, Michigan. Increasingly, the company is leveraging resources worldwide, forming new joint ventures and alliances and consolidating operations in order to better achieve global balance and manage fixed costs. These moves, Chrysler said, are designed to help it become a more globally focused manufacturer, with design, engineering, and sourcing, as well as a local presence to serve local customers. 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. CIFG GUARANTY: S&P Downgrades Financial Strength Rating to 'A+' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its financial strength, financial enhancement, and issuer credit ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. to 'A+' from 'AAA'. The downgrades reflect S&P's view of CIFG's impaired franchise value, reflected in its scaled-back underwriting activity, turnover of senior staff, and recent other rating downgrades, which, in S&P's opinion, will impinge on CIFG's ability to carry out its business plans and broaden its market acceptance. CIFG has lagged the industry in terms of par volume in recent years and, in S&P's view, has not developed a strong franchise. Because of this, and given S&P's view that total insured business volume will be off for the industry in 2008, S&P believes that the company is more prone to damage to its franchise than the more well-established financial guarantors. The outlooks remain negative, reflecting S&P's reservations regarding the company's ability to maintain its position as a viable competitor in the bond insurance industry, given its current staffing levels and its below-average earnings and return on earnings. In addition, although a non-executive chair has recently been appointed, S&P believes that additional time will be required to assess how or whether these changes will affect the company's performance. To support CIFG's claims-paying resources, in December 2007, Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne contributed a total of $1.5 billion in capital resources to CIFG Holding. The contribution was in the form of equity of $1.3 billion and soft capital of $200 million. BFBP and CNCE also acquired 99.99% of CIFG Holding from Natixis S.A. In S&P's opinion, the owner's capital contribution resulted in the company satisfactorily addressing concerns relating to its capital adequacy. COEUR D'ALENE MINES: S&P Assigns 'B-' Rating on $150M Sr. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' debt rating to the proposed $150 million senior unsecured convertible notes of Corp. (B-/Stable/--). These notes will be issued under the company's effective shelf registration filed on Dec. 27, 2005. Proceeds from the proposed notes will be used to fund Coeur D'Alene's planned capital expenditures at its San Bartolome silver project in Bolivia and its Palmarejo silver and gold project in Mexico. Pro forma for this financing, Coeur D'Alene will have about $406 million in debt (adjusted for operating leases and mine reclamation liabilities). The ratings on Coeur D'Alene Mines reflect its high business risk as a capital-intensive commodity-based company with a modest scope of operations, limited reserve base, and political and operating risk at some of its operations. Ratings also incorporate the company's aggressive expansion plans and uncertainties about successfully developing its planned lower-cost mining operations. Meaningful challenges include volatile prices, governmental regulation, environmental issues, permitting, and adverse geological conditions. Ratings List Coeur D'Alene Mines Corp. Corporate Credit Rating B-/Stable/-- Sr unsecured B- New Rating $150 mil. Sr. Unsecured Convertible Notes B- COMSTOCK HOMEBUILDING: Amends Deal for $30 Mil. Unsecured Notes --------------------------------------------------------------- Comstock Homebuilding Companies Inc. entered into an amended and restated agreement with JP Morgan Ventures relating to its $30 million senior unsecured notes. Under the terms of the agreement, the company and the noteholder have extended the company's option to secure a $15 million discount in the outstanding principal amount of the notes from March 10, 2008 to March 14, 2008. The company indicated that it intends to: -- make a $6 million cash payment to the noteholder, as compared to $8 million previously required; -- enter into an amended and restated indenture for $9 million, as compared to $7 million previously required; and -- issue the noteholder a warrant for the purchase of 1.5 million shares of the company's Class A Common Stock with a seven-year term at an exercise price of $0.70 per share, as compared to 1 million shares previously required. Under the terms of the agreement the company increased its non- refundable deposit from $250,000 to $1 million with the deposit to be applied at closing. Other terms of the agreement remained the same. The closing extension was requested by the company to allow it time to close on the financing needed to execute on its option. For fiscal year 2007 the company is a non-accelerated filer which means it has until the end of March to file its 10-K. In connection with the extension of closing on the restructuring of the Notes, the company has elected to postpone the filing of its 10-K and its investor conference call both to accommodate full disclosure of the transaction and associated funding in its filing and to allow for discussion of the transactions during its investor conference call. The company now expects to release its 10-K on March 24, 2008, and hold its investor conference call on March 25th, 2008. Details for the call will be forthcoming. About Comstock Homebuilding Based in Reston, Virginia, Comstock Homebuilding Companies Inc. (Nasdaq: CHCI) -- http://www.comstockhomebuilding.com/-- is a diversified real estate development firm with a focus on moderately priced for-sale residential products. Established in 1985, Comstock builds and markets single-family homes, townhouses, mid-rise condominiums, high-rise condominiums, mixed-use urban communities and active adult communities. The companycurrently markets its products under the Comstock Homes brand in the Washington, D.C., Raleigh, North Carolina, and Atlanta, Georgia metropolitan areas. Comstock develops mixed-use, urban communities and active-adult communities under the Comstock Communities brand. * * * On Oct. 25, 2007, the company entered into loan modification agreements which extended maturities and provided for a forbearance agreement with respect to all financial covenants. The forbearance runs until March 31, 2008. As of Sept. 30, 2007, the company had $11.1 million outstanding to M&T Bank, and is not in compliance with the tangible net worth covenant. CONGOLEUM CORP: Reports $2.4 Million Net Loss in 4th Quarter 2006 ----------------------------------------------------------------- Congoleum Corporation posted net loss of $2.4 million for the fourth quarter ended Dec. 31, 2006, compared with net loss of $1 million in the quarter of 2006. The company's sales for the three months ended Dec. 31, 2007, were $43.8 million, compared with sales of $46 million reported in the fourth quarter of 2006, a decrease of 4.8%. Results in the fourth quarter of 2006 included a $1.3 million gain related to replacement of a major production line component required as a result of an explosion in August 2006. In addition, the company's sales for the year ended Dec. 31, 2007, were $204.3 million, compared with sales of $219.5 million in 2006. As previously reported, a plan of reorganization has been negotiated among, and jointly filed by, the company, the future asbestos claimants' representative, the official bondholders' committee and the official asbestos claimants' committee. The disclosure statement for the Joint Plan has been approved by the bankruptcy court, and a confirmation hearing is scheduled for June 26, 2008. Based on these developments and the terms of the Joint Plan, company recorded adjustments to certain account balances during the fourth quarter of 2007 to reflect revised estimates of costs and cost recoveries associated with the Chapter 11 proceedings and related matters. The company recorded four specific adjustments, including: i) the company reversed $41.0 million of post-petition interest expense it had accrued on its 8 5/8% Senior Notes. Payment of this interest had been contemplated under earlier plans of reorganization, but it will not be paid under the terms of the Joint Plan; ii) wrote off $14.9 million in formerly anticipated legal fee recoveries. These recoveries had likewise been anticipated under earlier plans but will not be received under the Joint Plan; iii) based on the expected timing and cost to obtain confirmation of the Joint Plan, company recorded a $26.4 million charge to increase its reserves for estimated legal and related expenses; and iv) the tax impact of these adjustments gave rise to a net deferred tax liability of $1.7 million, which was recorded as tax expense. Excluding these charges and credits, the company's net income in 2007 would have been $1.4 million compared with net income of $0.7 million in 2006, which included the $1.3 million gain on the production line replacement. Roger S. Marcus, Chairman of the Board, commented, "We experienced very weak demand in all our end markets during 2007. Sales for new residential construction have dropped sharply with the entire housing industry. Production of manufactured homes also declined from 2006 to 2007 with a commensurate reduction in demand for our products. Finally, sales of flooring for remodel and replacement applications is reported to be down anywhere from 5% to 20%, depending on who you ask. Given these market conditions, we would have seen a more significant sales decline were it not for our Dura product sales. The popularity and value of these products has enabled them to continue growing despite the poor economic environment. "We were sufficiently concerned about the economic outlook at the start of 2007 and took immediate steps to reduce costs and control inventories. As a result, we effectively improved our net income by $2 million excluding the effect of the 2006 production line replacement gain and the 2007 reorganization adjustments, and our gross margin increased by 1.7% of sales. Moreover, we accomplished this outcome despite a $15 million drop in sales that resulted in a reduction of $6-7 million in pre-tax profit contribution. We were able to achieve this result through a number of initiatives, includes: -- reducing operating expenses by $3.7 million; -- reducing plant overhead costs by $2 million; -- improving plant operating efficiencies; -- raising selling prices; and -- improving product mix. Considering the state of the business environment, I believe our bottom line performance was quite good. "In summary, I am glad we were able to recognize the risks the economy was facing as we began 2007 and took quick action to significantly reduce expenses. Thanks to those steps and the continued growth of our Dura products, we have performed relatively well through a very challenging period. We expect these difficult conditions to continue well into 2008, but I believe we are positioned to manage through the downturn until conditions improve." Mr. Marcus concluded, "I am also pleased that our reorganization proceedings may finally be drawing to a close. The company and all necessary creditor groups support the recently filed reorganization plan, and voting materials are scheduled to be distributed later this month. I am hopeful that we will get the necessary votes for confirmation, and hope that we can emerge from bankruptcy proceedings in the third quarter of 2008." About Congoleum Corp. Based in Mercerville, New Jersey, Congoleum Corporation (AMEX:CGM) -- http://www.congoleum.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The company filed for chapter 11 protection on Dec. 31, 2003 (Bankr. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. At March 31 2007, Congoleum reported $180,091,000 in total assets and $226,990,000 in total liabilities, resulting in a stockholders' deficit $46,899,000. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drydale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and james R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., of Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. COUNTRYWIDE FINANCIAL: Fitch Cuts Subordinated Debt Rating to BB+ ----------------------------------------------------------------- Fitch Ratings has downgraded the Long-term Issuer Default Rating of Countrywide Financial Corporation and related subsidiaries to 'BBB-' from 'BBB+'. The rationale for this specific rating action follows that of Fitch's negative rating actions taken on eight banking companies on March 7, 2008. Those actions were supported by evidence of further deterioration within home equity portfolios and continued pressure on home prices. Fitch believes that Bank of America's decision to purchase CFC remains on track based on public comments from BAC to this effect, and the action in no way reflects doubts about the likelihood of completion. As such, Fitch is keeping CFC on Rating Watch Positive. Fitch has downgraded these ratings with a Positive Rating Watch. Countrywide Financial Corp. -- Long-term IDR to 'BBB-' from 'BBB+'; -- Short-term IDR to 'F3' from 'F2'; -- Individual to 'C/D' from 'C'; Although CFC had expected credit quality to continue to deteriorate as observed in significantly higher provisions and charge-offs taken, indications from rated banks in the past few weeks suggest that home equity delinquency rates are rising at a far more rapid pace than many had anticipated. In reviewing large banks with high home equity exposure, Fitch believes that CFC's portfolio characteristics are consistent with those that are exhibiting more stress. As such, Fitch believes CFC's current rating reflects the company's exposure to credit risk relative to its peers and, in particular, consumer-based lenders with home equity exposure. Fitch views positively CFC's liquidity position, which has been enhanced by the ability to tap the Federal Reserve's Term Securities Lending Facility and the well capitalized position of Countrywide Bank. Industry related concerns that apply to CFC include continued pressure on home prices, particularly in California and Florida and higher loss severities from higher average loan balances and rising current, loan-to-value ratios. Outside of home equity, pay-option adjustable rate mortgages comprise 29% of the company's held-for-investment portfolio at Dec. 31, 2007. The percentage of pay-option ARM portfolio loans past due greater than 90 days grew to 5.36% at FY'07 compared to just 0.63% at year-end 2006. Fitch acknowledges that credit risk in this portfolio is mitigated by credit enhancement in the form of mortgage insurance. Assuming the BAC purchase remains on track, Fitch expects to align CFC's ratings with those of BAC at closing. However, if this transaction were terminated, Fitch believes that CFC would come under renewed liquidity and earnings pressures and this would likely result in ratings falling below investment grade. These ratings are also downgraded and remain on Rating Watch Positive: Countrywide Financial Corp. -- Long-term IDR to 'BBB-' from 'BBB+'; -- Short-term IDR to 'F3' from 'F2'; -- Individual to 'C/D' from 'C'; -- Senior debt to 'BBB-' from 'BBB+'; -- Subordinated to 'BB+ from 'BBB'; -- Commercial paper to 'F3 from 'F2'. Countrywide Bank FSB -- Long-term IDR to 'BBB- from 'BBB+'; -- Short-term IDR to 'F3' from 'F2'; -- Individual to 'C' from 'B/C'; -- Senior debt to 'BBB-' from 'BBB+'; -- Long-term deposits 'BBB-' from 'A-'; -- Short-term deposits to 'F3' from 'F2' -- Short-term debt to 'F3' from 'F2'. Countrywide Home Loans, Inc. -- Long-term IDR to 'BBB- from 'BBB+' -- Short-term IDR to 'F3' from 'F2'; -- Senior debt to 'BBB-' from 'BBB+'; -- Commercial paper to 'F3 from 'F2'. Countrywide Capital I, III, IV, V -- Trust preferred to 'BB' from 'BBB-'. The following ratings remain on Positive Rating Watch: Countrywide Financial Corp. -- Support at '5'; -- Support floor at 'NF'. Countrywide Bank FSB -- Support at '5'; -- Support floor at 'NF'. CWALT INC: High Delinquency Rates Prompt Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 84 tranches from 11 Alt-A transactions issued by Countrywide in 2006. Forty four downgraded tranches remain on review for possible further downgrade. Additionally, 52 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded or placed on review for possible downgrade, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC1 -- Cl. M-1, Downgraded to A2 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2 -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba2 -- Cl. M-6, Downgraded to Ca from B2 -- Cl. M-7, Downgraded to Ca from Caa2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC2 -- Cl. 1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba3 -- Cl. M-6, Downgraded to Ca from B3 -- Cl. M-7, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC3 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba2 -- Cl. M-6, Downgraded to Ca from Ba3 -- Cl. M-7, Downgraded to Ca from Caa2 -- Cl. M-8, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC4 -- Cl. 1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba1 -- Cl. M-6, Downgraded to Ca from Ba3 -- Cl. M-7, Downgraded to Ca from Caa2 -- Cl. M-8, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC5 -- Cl. 1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba1 -- Cl. M-6, Downgraded to Ca from Ba3 -- Cl. M-7, Downgraded to Ca from B3 -- Cl. M-8, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC6 -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Ca from Ba1 -- Cl. M-5, Downgraded to Ca from B1 -- Cl. M-6, Downgraded to Ca from Caa1 -- Cl. M-7, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC7 -- Cl. 1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba2 -- Cl. M-6, Downgraded to Ca from B2 -- Cl. M-7, Downgraded to Ca from Caa3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC8 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1D, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1E, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba1 -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to Ca from B3 -- Cl. M-9, Downgraded to Ca from Caa2 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC9 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from B1 -- Cl. M-6, Downgraded to Ca from Ba1 -- Cl. M-8, Downgraded to Ca from Caa1 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC10 -- Cl. 1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba2 -- Cl. M-7, Downgraded to Ca from B3 Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series 2006-OC11 -- Cl. 1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba1 -- Cl. M-6, Downgraded to Ca from Ba3 -- Cl. M-7, Downgraded to Ca from B3 -- Cl. M-8, Downgraded to Ca from B3 CRAIG STIGELMAN: Case Summary & Five Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Craig Stigelman 43503 Linwood Court Canton, MI 48187 Bankruptcy Case No.: 08-45859 Chapter 11 Petition Date: March 11, 2008 Court: Eastern District of Michigan (Detroit) Judge: Walter Shapero.Detroit Debtor's Counsel: Kurt A. O'Keefe, Esq. 645 Griswold Street Suite 3156 Detroit, MI 48226 Tel: (313) 962-4630 koklaw@gmail.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's list of its Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citizens Bank Loan $66,000 c/o James Zellen 39520 Woodward Suite 205 Bloomfield Hills, MI 48304 National City Credit Card Purchases $11,214 BOC 856176 Stockbridge, MI 49285-6176 Credit One Credit Card Purchases $1,350 BOX 60500 City of Industry, CA 91716 Barclays Credit Card Purchases $548 Capital One Credit Card Purchases $250 CREDIT SUISSE: Fitch Affirms 'B-' Rating on $2.1MM Class O Certs. ----------------------------------------------------------------- Fitch has affirmed the ratings of Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2004-C3 as: -- $29.0 million class A-2 at 'AAA'; -- $209.4 million class A-3 at 'AAA'; -- $102.9 million class A-4 at 'AAA'; -- $694.5 million class A-5 at 'AAA'; -- $330.4 million class A-1-A at 'AAA'; -- Interest-only class A-X at 'AAA'; -- Interest-only class A-SP at 'AAA'; -- $45.1 million class B at 'AA+'; -- $14.3 million class C at 'AA'; -- $28.7 million class D at 'A+; -- $16.4 million class E at 'A-'; -- $20.5 million class F at 'BBB+'; -- $16.4 million class G at 'BBB'; -- $22.5 million class H at 'BBB-'; -- $8.2 million class J at 'BB+'; -- $6.1 million class K at 'BB'; -- $8.2 million class L at 'BB-'; -- $6.1 million class M at 'B+'; -- $2.1 million class O at 'B-'. The $6.1 million class N and $22.5 million class P are not rated by Fitch. Class A-1 has been paid in full. While the transaction has had 8.6% defeasance since Fitch's last rating action, affirmations are warranted due to the increase in Fitch loans of concern (13%), including five (2.4%) specially serviced assets. Four (2.2%) of the five specially serviced multifamily assets are controlled by MBS Cos, a property owner that defaulted on other CMBS loans. The loans transferred in September 2007 due to mortgage default and sponsor bankruptcy. The assets are located in San Antonio (0.9%), Tomball (0.5%), Austin (0.5%) and Alvin (0.3%), Texas. The asset in Alvin became real estate owned in January 2008 and will be marketed for sale by the special servicer. The portfolio consists of 731 multifamily units and occupancy rates for the assets vary from 50% to 80%. Fitch anticipates losses on these assets. The fifth (0.2%) specially serviced loan is a retail property in Indianapolis, Indiana, that transferred to special servicing in December 2007 due to mortgage default. Occupancy as of February 2008 was 74%. The servicer will pursue foreclosure and Fitch anticipates losses on the asset. The Mizner Park loan (3.6%) maintains an investment grade shadow rating and is secured by six mixed-use buildings (50% office, 50% retail) in Boca Raton, Florida. The loan contains A and B notes, with the A note included in the trust. The servicer's most recent available information is as of year end 2006, the debt service coverage ratio was 2.06 times compared to 2.09x at issuance. First-quarter 2007 combined occupancy was 91.1%, up from issuance occupancy of 89%. The loan matures in 2009 and has a current note rate of 4.8%. As of the February 2008 distribution date, the pool's aggregate certificate balance has decreased 3.6% to $1.60 billion from $1.64 billion at issuance. In total, 22 loans (23%) have defeased, including One Park Avenue (9.6%), a shadow rated loan and the largest in the pool. The second (7.5%) largest loan in the pool is an office property in West Hollywood, California that reported a year end 2007 DSCR of 2.23x and occupancy of 89%. The third largest loan (4.5%) is a multifamily/retail property located in New York City. The asset reported a year end 2007 DSCR of 1.29x and occupancy of 96%. The pool contains 171 loans of which 146 loans (77%) are non defeased and have an anticipated repayment and balloon date within the next seven years. Currently 3.97% of the pool is interest only and 0.1% is fully amortizing. The weighted average coupon note rate of the pool is 5.6%. Loans with maturity dates in 2008 and 2009 represent 0.6% and 15%, respectively. DEERFIELD CAPITAL: Stockholders OK Conversion of Preferred Stock ---------------------------------------------------------------- Deerfield Capital Corp.'s stockholders approved the conversion of 14,999,992 shares of Series A Cumulative Convertible Preferred Stock, which was issued in connection with the company's acquisition of Deerfield & Company LLC, into 14,999,992 shares of common stock at the special meeting of stockholders. By approving the conversion, the company's stockholders also approved its issuance of 14,999,992 shares of common stock that the company will issue to effect the conversion. After the conversion, the company has 66,693,417 shares of issued and outstanding common stock and no shares of issued and outstanding preferred stock. Additionally, the stockholders approved an amendment and restatement of the company's Stock Incentive Plan to, among other matters, increase the shares of our common stock reserved for issuance under the Plan from 2,692,313 to 6,136,725. About the Deerfield Capital Corp. Headquartered in Rosemont, Illinois, Deerfield Capital Corp. (NYSE:DFR) -- http://www.deerfieldcapital.com/-- fka Deerfield Triarc Capital Corp., is a diversified financial company that invests in real estate investments, mortgage-backed securities, well as corporate investments. Deerfield Capital Management LLC manages the company and its investment portfolio. * * * Moody's Investor Service placed Deerfield Capital Corp.'s long term corporate family rating at 'Ba3' in November 2007. The rating still holds to date with a negative outlook. DELTA AIR: Wants Atlanta Port's Reserve Fund Trimmed to $58 Mil. ---------------------------------------------------------------- Hartsfield-Jackson International Airport and Delta Air Lines, Inc., are in a tug-of-war over a $168,000,000 reserve fund that airport officials say is needed to provide a financial cushion for a new international terminal, the Atlanta-Journal Constitution reports. The newspaper relates that Delta wants the contingency fund trimmed back to $58,000,000 while Hartsfield-Jackson officials say the terminal's funding could ultimately cost $1,600,000,000. According to the report, Delta and the airport agree on the need for the terminal, considering an imminent annual increase of up to 13,000,000 in Delta's international passengers in the next seven years. However, Delta and the other airlines complain that the airport "is building in too much of a financial hedge for the scope of the project." "The higher the contingency, the less the incentive to stay within the budget," the newspaper quotes Delta lobbyist Harold Bevis. Delta is Hartsfield-Jackson's biggest tenant. Contingency Is Justified, Airport Officials Say Hartsfield-Jackson officials say the contingency is justified, considering the early stage of the project, the vast sums of construction money involved and the multi-year nature of the project, the report relates. The contingency is about 11 percent of the project's construction cost, Mike Williams, the project's assistant director, told the Atlanta-Journal. According to the report, Delta and the other airlines have asked for major upgrades for the terminal -- additional boarding bridges to accommodate wide-bodied jets, more high-speed luggage conveyors and check-in stations at the parking decks -- which have boosted the contingency requirements. Airport officials also note a recent escalation in the cost of the underground tunnel which will cost approximately $80,000,000, the report added. The newspaper said Delta declined to comment further on the issue. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Jan. 17, 2008, Standard and Poor's said that media reports that Delta Air Lines Inc. (B/Positive/--) entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will have no effect on the ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. DELTA AIR: Executives Dispose of 49,304 Shares at $13.35 Per Share ------------------------------------------------------------------ Richard Anderson, chief executive officer, and Edward Bastian, president and chief financial officer of Delta Air Lines Inc. disposed company shares at $13.35 per share. 1. Richard Anderson In regulatory filing with the Securities and Exchange Commission dated March 4, 2008, Richard Anderson disclosed that he disposed of a total of 40,899 shares of Delta common stock on March 1 at $13.35 per share. Mr. Anderson's disposed shares are withheld to pay tax withholding obligations from the lapse of the restrictions on a portion of the restricted stock granted to him on September 1, 2007, as approved by the Personnel & Compensation Committee of Delta's Board of Directors, and exempted from Section 16(b) of the Securities and Exchange Act of 1934 under Rules 16b(d)(1) and 16b-3(e). Following the transaction, Mr. Anderson beneficially owned 311,011 shares of Delta common stock, which includes 227,933 shares of restricted stock on which the restrictions have not lapsed. 2. Edward Bastian Edward Bastian informed the SEC on March 4, 2008, that he disposed of 8,405 shares of Delta common stock at $13.35 per share on March 1. The shares that Mr. Bastian disposed represent shares withheld to pay tax withholding obligations to appropriate taxing authorities from the lapse of the restrictions on a portion of his restricted stock. The withholding was approved by the Personnel & Compensation Committee of Delta's Board of Directors, and is exempt from Section 16(b) of the Securities and Exchange Act of 1934 under Rules 16b(d)(1) and 16b-3(e). Following the transaction, Mr. Bastian beneficially owned 236,517 shares that include 200,900 shares of restricted stock on which the restrictions have not lapsed. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on Jan. 17, 2008, Standard and Poor's said that media reports that Delta Air Lines Inc. (B/Positive/--) entered into merger talks with UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (B+/Stable/--) will have no effect on the ratings or outlook on Delta, but that confirmed merger negotiations would result in S&P's placing ratings of Delta and other airlines involved on CreditWatch, most likely with developing or negative implications. DOCUMENT CAPTURE: Clancy & Co. Expresses Going Concern Doubt ------------------------------------------------------------ Phoenix-based Clancy and Co., PLLC, raised substantial doubt about the ability of Document Capture Technologies Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company has incurred recurring net losses in recent years resulting in a substantial accumulated deficit. The company posted a net loss of $1,060,000 on total sales of $15,023,000 for the year ended Dec. 31, 2007, as compared with a net loss of $5,199,000 on total sales of $12,469,000 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $5,793,000 in total assets, $4,929,000 in total liabilities and $1,144,000 total convertible preferred stock, resulting in $280,000 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2912 About Document Capture Document Capture Technologies Inc., (DCMT.OB) -- http://www.sysviewtech.com-- develops, designs, and delivers imaging technology solutions. The company's proprietary page- imaging devices enable the storage, sharing, and management of information in both businesses and personal use. It also offers optical image capturing devices, modules of optical image capturing devices, and optical image chips and other optoelectronic products. Document Capture Technologies, Inc. was formerly known as SysView Technology Inc., and it changed its name to Document Capture Technologies Inc., in 2007. Prior to that, SysView Technology Inc., was known as Syscan Imaging Inc., and it changed its name to SysView Technology Inc., in 2006. Document Capture Technologies, Inc., was founded in 1995 and is headquartered in San Jose, Calif. Document Capture Technologies Inc., is a subsidiary of Syscan Imaging Limited. DOLE FOOD: Posts $57.5 Million Net Loss in Year Ended Dec. 29 ------------------------------------------------------------- Dole Food Company Inc. reported a net loss of $57.5 million for the year ended Dec. 29, 2007, compared to a net loss of $89.6 million for the year ended Dec. 30, 2006. For the year ended Dec. 29, 2007, revenues increased 13.0% to $6.93 billion from $6.15 billion in the prior year. Higher worldwide sales of fresh fruit and packaged foods products in North America and Europe drove the increase in revenues during 2007. Higher volumes of bananas and pineapples accounted for approximately $222.0 million or 28.0% of the overall revenues increase. Higher revenues in the company's European ripening and distribution operations contributed an additional $528.0 million. Higher sales of packaged foods products, primarily for FRUIT BOWLS, fruit in plastic jars, pineapple juice and packaged frozen fruit accounted for approximately $85.0 million or 11.0% of the overall revenues increase. Favorable foreign currency exchange movements in the company's selling locations also positively impacted revenues by approximately $171 million. These increases were partially offset by a reduction in fresh vegetables sales due to lower volumes of commodity vegetables sold in North America and Asia. In addition, the companys fresh-cut flowers business reported overall lower sales volumes due primarily to the changes in the customer base and product offerings attributable to the implementation of the 2006 restructuring plan. Operating Income For the year ended Dec. 29, 2007, operating income was $130.1 million compared with $79.0 million in 2006. The increase was primarily attributable to improved operating results in the company's banana operations worldwide which benefited from stronger pricing and higher volumes. In addition, operating income improved in the European ripening and distribution business and the fresh-cut flowers segment due to the absence of restructuring costs of $12.8 million and $29.0 million, respectively. These improvements were partially offset by lower earnings in the company's packaged salads business and packaged foods segment primarily due to higher product costs. Interest Income and Other Income (Expense), Net For the year ended Dec. 29, 2007, interest income increased slightly to $7.6 million from $7.2 million in 2006. The slight increase in interest income was primarily related to higher levels of cash at JP Fresh during 2007. Other income (expense), net decreased to income of $1.8 million in 2007 from income of $15.2 million in 2006. The decrease was due to a reduction in the gain generated on the company's cross currency swap of $22.7 million, partially offset by a reduction in the foreign currency exchange loss on the company's British pound sterling capital lease vessel obligation of $9.2 million. Interest Expense Interest expense for the year ended Dec. 29, 2007, was $194.9 million compared to $174.7 million in 2006. The increase was primarily related to higher levels of borrowings during 2007 on the company's term loan facilities and the asset based revolving credit facility. Income Taxes The company recorded $1.1 million of income tax expense on $55.3 million of pretax losses from continuing operations for the year ended Dec. 29, 2007, reflecting a 1.9% effective income tax rate for the year. Income tax expense decreased $17.1 million from $18.2 million in 2006 primarily due to a shift in the mix of earnings in foreign jurisdictions taxed at a lower rate than in the U.S. The effective tax rate in 2006 was 24.8%. Equity in Earnings of Unconsolidated Subsidiaries Equity in earnings of unconsolidated subsidiaries for the year ended Dec. 29, 2007, increased to $1.7 million from $177,000 in 2006. The increase was primarily related to higher earnings generated by one of the company's European investments. Discontinued Operations During the fourth quarter of 2006, the company sold all of the assets and substantially all of the liabilities associated with its Pacific Coast Truck operations for $20.7 million. The company received net proceeds of $15.3 million from the sale after the assumption of $5.4 million of debt, realizing a gain of approximately $2.8 million, net of income taxes of $2.0 million. Long-Term Debt At Dec. 29, 2007, the company had total outstanding long-term borrowings of $2.41 billion, consisting primarily of $1.10 billion of unsecured senior notes and debentures due 2009 through 2013 and $1.22 billion of secured debt (consisting of revolving credit and term loan facilities and capital lease obligations). The company has $350.0 million of unsecured senior notes maturing May 1, 2009. The company is currently evaluating its available options to refinance the notes. Balance Sheet At Dec. 29, 2007, the company's consolidated balance sheet showed $4.64 billion in total assets, $4.29 billion in total liabilities, $29.9 million in minority interests, and $325.0 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 29, 2007, are available for free at http://researcharchives.com/t/s?2910 About Dole Food Based in Westlake Village, California, Dole Food Company Inc. -- http://www.dole.com/-- is the world's largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh- cut flowers. Dole markets a growing line of packaged and frozen foods and is a produce industry leader in nutrition education and research. * * * As reported in the Troubled Company Reporter on Feb. 27, 2008, Moody's Investors Service lowered Dole Food Company Inc.'s corporate family rating and probability of default ratings to B3 from B2, and downgraded the ratings of the company's unsecured shelf filings. The rating outlook is stable. DOMICILIARY REALCO: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Domiciliary Realco, LLC P.O. Box 50491 Mobile, AL 36605 Bankruptcy Case No.: 08-10852 Court: Southern District of Alabama (Mobile) Debtor's Counsel: Irvin Grodsky, Esq. (igpc@irvingrodskypc.com) P.O. Box 3123 Mobile, AL 36652-3123 Tel: (251) 433-3657 http://www.irvingrodskypc.com/ Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor did not file a list of its largest unsecured creditors. DON MCCORMACK: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Don Howard McCormack Diana Lee McCormack P.O. Box 5430 9403 Bluff Drive Parker, AZ 85344 Bankruptcy Case No.: 08-02530 Chapter 11 Petition Date: March 12, 2008 Court: District of Arizona (Yuma) Debtor's Counsel: Robert M. Cook, esq. (robertmcook@yahoo.com) Missouri Commons, Suite 185 1440 East Missouri Phoenix, AZ 85014 Tel: (602) 285-0288 Fax: (602) 285-0388 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor did not file a list of its largest unsecured creditors. DRAKE MANAGEMENT: May Liquidate $2.7-Bil Global Opportunities Fund ------------------------------------------------------------------ Drake Management LLC may shut and liquidate its $2.7 billion Drake Global Opportunities fund -- its largest hedge fund, various reports say. In an 11-page letter to investors dated March 12, Drake said it would continue to restrict redemptions or allow clients to shift assets to a new fund, Bloomberg News says. Drake said it "would seem more probable that the market disruptions we have experienced will not abate in the short term, but will instead continue for some time." Katherine Burton and Tom Cahill at Bloomberg News report that Drake blocked most redemptions in December after the fund declined 25% last year. Drake oversaw about $13 billion in total for clients at the end of 2007, Bloomberg says. According to The Wall Street Journal, citing a person familiar with the situation, Drake also is likely to stop investor withdrawals from its two other hedge funds, including its $1.5 billion Drake Absolute, which fell 14.4% in 2007 and was down 5% this year as of the end of February. Bloomberg's Ms. Burton and Mr. Cahill, citing a year-end report sent to investors, relate that Drake lost much of its money last year from bad bets on U.S. Treasuries, as well as Japanese bonds and stocks in developed markets. The fund manager borrowed about $12 for every $1 of net assets as of Dec. 31. Bloomberg relates that Global Opportunities investors who choose to go to the new fund could opt for two share classes -- investors would pay fees of 1.5% of assets and 20% of profits, and would agree to stay in the fund for a year, although they could exit earlier by paying a penalty of as much as 10%; or investors could charge fees of 1.5% of assets and 15% of gains, but wouldn't have the option of redeeming early. Drake would have to make up investors' losses from the previous fund before charging performance fees, according to Bloomberg. Drake spokesman Shawn Pattison declined to comment, Bloomberg relates. Bloomberg notes that hedge funds with more than $5.4 billion have been forced to liquidate or sell assets since Feb. 15 as contagion from the U.S. subprime slump spreads. Those funds include Peloton Partners LLP's $1.8 billion ABS Fund, Tequesta Capital Advisor's mortgage fund and Focus Capital Investors LLC, which invested in midsize Swiss companies. Amsterdam, The Netherlands-based Global Opportunities (GO) Capital Asset Management B.V. on Tuesday also blocked investor withdrawals until March 2009. GO Capital has about $870 million of assets under management, focusing on European shares. The Journal says GO Capital has been reducing its investments in certain small- capitalization stocks but found it increasingly hard to find buyers for its positions, which was driving down prices. Frans van Schaik, a founding partner at GO Capital, explained suspension of redemptions was a pre-emptive measure to safeguard the interests of the fund's investors, the Journal reports. Mr. van Schaik said the fund isn't leveraged and isn't facing margin calls, the Journal says. New York-based Drake is an investment advisor registered with the Securities and Exchange Commission, specializing in active fixed income strategies. The firm was founded in May 2001 with the goal of delivering attractive risk-adjusted returns for substantial investors worldwide. Founded by Anthony Faillace and Steve Luttrell, who both previously worked at New York-based BlackRock and Pacific Investment Management Co. in Newport Beach, California, Drake began managing assets in January 2002. Drake currently manages more than $10 billion. With more than 100 professionals, Drake has offices in Tokyo, Japan; Miami, Florida; Sao Paulo, Brazil; and Istanbul, Turkey. DUNMORE HOMES: Court Extends Plan-Filing Period to March 21 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California extended, until March 21, 2008, Dunmore Homes Inc.'s exclusive period to file a Chapter 11 Plan of Reorganization. In addition, the Debtor has until May 20, 2008 to solicit acceptances for that plan. The Debtor originally sought an extension of the Exclusive Plan Filing Period through May 6, 2008, and an extension of the Exclusive Plan Solicitation Period through July 6, 2008. The recent Court ruling on the Debtor's Exclusive Period addresses the concern of the Official Committee of Unsecured Creditors. Before the Court entered its order, the Committee said that it does not understand why the Debtor needs an extension of 60 days. The Committee urged the Court not to extend the Exclusive Periods beyond March 21. According to Adam A. Lewis, Esq., at Morrison & Foerster LLP, in San Francisco, California, the Committee's counsel, it is possible to file a plan sooner than 60 days with diligent work and cooperation between the Committee and the Debtor. "The entire company has collapsed. . . . The Dunmore case is in liquidation mode," Mr. Lewis stated, according to KCBS News. Mr. Lewis told the Court that the Committee has been working closely with the Debtor with the intention that the Debtor will file a plan and disclosure statement no later than March 21, 2008. "The Committee has already reviewed and commented on a draft liquidating plan and a draft liquidating trust agreement, and has been advised by counsel for the Debtor that the Debtor soon will be sending to the Committee for its review a draft disclosure statement, consistent with the current schedule anticipated and agreed upon by the Debtor and the Committee," Mr. Lewis says. In light of the cirumstances, Mr. Lewis contended that the 60-day extension is unnecessary. He added that the Committee is prepared to file a plan and disclosure statement if the Debtor is unable to do so. About Dunmore Homes Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor's exclusive period to file a plan expires on March 7, 2008. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. (Dunmore Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). EAST VALLEY TOURIS: Moody's Withdraws Ratings Due to Deal Delays ---------------------------------------------------------------- Moody's Investors Service withdrew all the ratings for East Valley Tourist Development Authority, including the B1 Corporate Family Rating. The ratings are being withdrawn because the transaction has been delayed due to market conditions. The last rating action occured on Nov. 2, 2007. Rating withdrawn: -- Corporate Family rating at B1; -- Probability of default rating at B1; -- $275 million senior secured notes due 2015 at B1 (LGD 4, 56%). The Authority is an instrumentality of the Cabazon Band of Mission Indians, a federally recognized Indian tribe. The Authority was formed to operate the Tribe's resort and casino business. The Authority currently owns and operates the Fantasy Springs Casino located in the Coachella Valley, approximately 22 miles east of Palm Springs, California. Fantasy Springs opened in 1990. EASTON-BELL SPORTS: Moody's Downgrades Ratings to 'B3' From 'B2' ---------------------------------------------------------------- Moody's Investors Service downgraded Easton-Bell Sports Inc.'s ratings and revised the rating outlook to negative due to higher than expected leverage and limited cushion under its financial covenants. The corporate family rating and probability of default rating were each downgraded to B3 from B2, the term loan and revolver ratings were both downgraded to B1 from Ba3, the senior subordinated rating was downgraded to Caa1 from B3 and the speculative grade liquidity rating was downgraded to SGL4 from SGL2. "Easton-Bell's credit metrics are below our expectations and we believe they may further soften as discretionary consumer spending continues to slow down" said Kevin Cassidy, Vice President/Senior Credit Officer at Moody's Investors Service. When the company issued $175 million of debt in November 2006 to fund a dividend, Moody's had expected consolidated leverage of around 6x and free cash flow to debt percentages to be in the mid single digits. "However, leverage is almost one turn higher than we anticipated and free cash flow percentages are in the low single digits with neither expected to significantly improve in the near term" noted Cassidy. "Our rating actions reflect Moody's concern that the contractual tightening of a financial leverage covenant coupled with the lack of meaningful improvement in operating profitability will increase the need for the company to seek revisions to its senior secured credit facility and amend its covenants" said Cassidy. These ratings were downgraded: Easton-Bell Sports, Inc. -- Corporate family rating to B3 from B2; -- Probability-of-default rating to B3 from B2; -- $140 million 8.375% senior subordinated notes due 2012, to Caa1 (LGD5, 71%) from B3 (LGD5, 73%); -- $70 million senior secured revolving credit facility due 2012, to B1 (LGD2, 26%) from Ba3 (LGD2, 26%); -- $335 million senior secured term loan B due 2012 to B1 (LGD2, 26%) from Ba3 (LGD2, 26%); Speculative grade liquidity rating to SGL4 from SGL2; Easton Sports Canada, Inc. -- CDn $12 million senior secured revolving credit facility due 2012 to B1 (LGD2, 26%) from Ba3 (LGD2, 26%) Headquartered in Van Nuys, California, Easton-Bell Sports, Inc. was formed through Riddell Bell's acquisition of Easton Sports in March 2006. The company is a leading designer, developer and marketer of branded equipment that enhances athletic performance and protection and related accessories for numerous athletic and recreational activities. Revenue for the twelve months ended Sept. 30, 2007, approximated $715 million. ENTERPRISE SECURITY: Case Summary & Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Enterprise Security, Inc. 4764 West Commercial Boulevard Tamarac, FL 33319 Bankruptcy Case No.: 08-12914 Type of Business: The Debtor manufactures security systems and devices. Chapter 11 Petition Date: March 12, 2008 Court: Southern District of Florida (Fort Lauderdale) Judge: John K. Olson Debtor's Counsel: David W. Langley, Esq. (dave@flalawyer.com) 8181 West Broward Boulevard, Suite 204 Plantation, FL 33324 Tel: (954) 356-0450 Fax: (954) 356-0451 Total Assets: Unknown Total Debts: $1,696,322 Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Internal Revenue Service $1,696,322 Attn: Ms. B. Clark 7850 Southwest 6 Street, Stop 5290 Plantation, FL Tel: (33) 324-3202 ENVIRONMENTAL CAREERS: Trustee to Auction Domain Name Eco.Org ------------------------------------------------------------- The bankruptcy trustee for the defunct non-profit The Environmental Careers Organization Inc., hopes to generate money to pay creditors through a May auction of the company's domain name "Eco.org." The bankruptcy trustee plans to auction "Eco.org" using the on- line domain name auction site GreatDomains.com. "It's unfortunate," said Mr. Cruickshank, "but once the company files its bankruptcy petition with the court, my job is to sell the assets quickly while trying to get the best price for creditors. Hopefully, we will get a good price and someone else will make good use of the name." Great Domains, powered by Sedo, runs a monthly on-line auction of prime domain names. The law firm the bankruptcy trustee hired to manage the sale, Swiggart & Agin, LLC, recently filed papers with the U.S. Bankruptcy Court in Boston to obtain permission for the sale. According to the court papers, the on-line auction is expected to start on May 22, 2008, and will run for one week. Great Domains' auctions regularly obtain five figure sales prices for high-quality domain names, and some names fetch seven figure bids. But, nobody really knows how much this sale will generate for creditors. "We think the domain name is worth $100,000 to $200,000," said Warren E. Agin, head of Swiggart & Agin, LLC's bankruptcy department, "but we really don't know what the domain name will sell for at auction." The company's bankruptcy papers listed the value of the domain name as "unknown." According to Marc Barreca, co-chair of the Bankruptcy & Insolvency Practice Group at the law firm of K & L Gates in Seattle, "tech savvy bankruptcy trustees increasingly use on-line auctions to sell assets with the goal of maximizing the recovery for creditors." But, as Mr. Barreca explains, buyers can find great deals through bankruptcy auctions. "Bankruptcy trustees are under a lot of pressure to liquidate a company's assets quickly. This provides an opportunity for knowledgeable buyers to pick up bargains as trustees often have to take what they can get from a quick liquidation." About Swiggart & Agin Swiggart & Agin, LLC, in Boston, Massachusetts, provides legal services to companies. The firm represents companies in the information technology sector, and also provides bankruptcy and insolvency related services to companies and individuals. About The Environmental Careers Founded in 1972, The Environmental Careers Organization dedicated itself to helping students develop careers in the environmental field. ECO matched students and recent graduates with government grants and placed them in paid environmental internships. During its 35 year history, ECO helped thousands of young people find jobs helping the environment. But, following a dispute with the Environmental Protection Agency over the use of grant money, and an investigation by the U.S. Attorney in Boston, ECO had to close its doors. ECO filed a chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Massachusetts on July 6, 2007 (case no. 07-14238-WCH). The Office of the U.S. Trustee appointed chapter 7 trustee Gary W. Cruickshank to liquidate its assets. According to papers filed with the U.S. Bankruptcy Court, the company owed about $1.8 million to creditors, including more than $1.2 million claimed by the Environmental Protection Agency. ETHANEX ENERGY: Inks Amendment to Sale Deal; Warns of Bankruptcy ---------------------------------------------------------------- Ethanex Energy Inc., Ethanex Sutherland LLC, Ethanex Sutherland Land LLC, Ethanex Phase I LLC, Ethanex Phase II LLC, Ethanex Phase III LLC, and Midwest Renewable Energy LLC, entered into an amendment effective March 10, 2008 to an asset purchase agreement, dated Feb. 10, 2008. The Troubled Company Reporter said on Feb. 13, 2008, that Ethanex has signed a definitive asset purchase agreement with Midwest to acquire Midwest's ethanol plant, located in Sutherland, Nebraska, for $220 million in cash and Ethanex stock, subject to various adjustments as specified in the agreement. Ethanex and Midwest entered into a non-binding letter of intent for this transaction in late November 2007. Under the agreement, several newly formed, subsidiaries of Ethanex will acquire substantially all of the assets, and assume certain liabilities, of Midwest in a series of three transactions. At a first closing, Ethanex will acquire the existing ethanol plant for $50 million in cash. The existing plant, which has a production capacity of 26 million gallons per year, is undergoing a two-phase expansion. Each expansion phase is designed to add an additional 42.5MGY of production capacity, for a total projected plant capacity of 111MGY. At each of the three closings Ethanex will receive $2 million of inventory which is included in the purchase price. After the initial closing, Midwest will be responsible for continuing and completing the two-phase plant expansion. In two subsequent closings, Ethanex will acquire each of the expansion phases. The second and third closings are subject to testing and certification of the plant expansions in accordance with construction and performance specifications contained in the Agreement that were established by Ethanex and agreed to by Midwest. Amendment to the Purchase Agreement The amendment modifies Section 12(a)(viii) of the purchase agreement, effective as of March 10, 2008, to extend a certain termination period for either the company or seller to terminate the purchase agreement. Prior to the amendment to the purchase agreement, either party had a right under Section 12(a)(viii) to terminate the purchase agreement on or before March 10, 2008, if the company did not obtain at least $1.5 million in bridge financing by March 5, 2008. Pursuant to the amendment, the company said that the parties have agreed to extend this termination right until March 31, 2008. Because the company did not obtain interim financing by March 5, the agreement remains terminable by either party until March 31, 2008. A full-text copy of the amendment to the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?291e Financing Still Not Obtained As reported in the TCR on Feb. 13, 2008, if Ethanex is unable to obtain interim financing by March 5, 2008, it anticipates that it will be unable to proceed with the transaction, will need to cease operations and will be required to file for bankruptcy protection. Each of the three closings is subject to various closing conditions, including receipt by Ethanex of financing for the cash portion of the purchase price payable at each closing and for construction of the fractionation platform, well as other customary conditions. As of March 10, 2008, the company disclosed that it had not obtained interim financing. The company is continuing to seek the interim financing, although there is no assurance that any the financing will be available on reasonable terms or at all. The company also is in regular communication with the seller about the transactions contemplated by the purchase agreement. Bankruptcy Warning Although the company is seeking to minimize its expenditures while it continues to pursue both interim financing and the transactions contemplated by the purchase agreement, the company said it may be required to seek bankruptcy protection at any time over the next few weeks. About Ethanex Energy Headquartered Basehor, Kansas, Ethanex Energy (OTCBB: EHNX) -- http://www.ethanexenergy.com-- is a renewable energy company whose mission is to be the lowest cost producer of renewable energy by employing advanced technology in design, construction and operation of ethanol plants. The company expects to achieve this industry position through the application of next-generation feedstock technologies and use of alternative energy sources. Ethanex Energy is currently developing two ethanol production facilities located in the mid-west, with a combined production capacity of approximately 264 million gallons of ethanol per year. Ethanex Energy is concentrating its geographic focus in areas that allow access to abundant supplies of corn, alternative energy sources, transportation infrastructure and the potential for expedited permitting. Ethanex Energys acquisition and brownfield development strategies afford it rapid capacity development with significant operating cost advantages. Ethanex Energy has offices in Santa Rosa, California and Charleston, South Carolina. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 29, 2007, Bagell, Josephs, Levine & Company LLC in Gibbsboro, New Jersey, expressed substantial doubt about Ethanex Energy's ability to continue as a going concern after auditing the company's financial statements for the year ended July 31, 2006. The auditors noted that the company incurred losses since inception and further losses are anticipated in the development of its business. EURAM-MACAULEY: Fairfield Wants Court to Dismiss Chapter 11 Case ---------------------------------------------------------------- Fairfield Financial Services Inc., Euram-Macauley One LLC's primary secured creditor, asks the U.S. Bankruptcy Court for the Northern District of Georgia for relief from the automatic stay. In the alternative, Fairfield Financial asks the Court to dismiss the Debtor's Chapter 11 case. Fairfield Financial relates that the Debtor owns a 602-acre partially developed residential real property in Fayette County, Georgia. The Debtor sold several lots to independent builders before filing for bankruptcy. The property is the Debtor's sole asset and does not generate any income, other than from the sale of individual lots. According to Fairfield Financial, the Debtor continues to be obligated pursuant to: 1) a certain Nov. 4, 2005 real estate note in the original principal amount of $18,475,000, executed by the Debtor in favor of Fairfield; 2) a certain Sept. 7, 2006 real estate note for $8,877,000; and 3) a certain May 24, 2007 real estate note for $1,000,000. By virtue of the loan documents, Fairfield asserts that it is the present owner and holder of a valid and properly perfected first priority lien on, among other things, the property, and income, rents, issues, profits and revenues from the property. The Debtor failed to satisfy the obligations under all of the Notes, which led Fairfield to issue a notice of default to the Debtor on Dec. 31, 2007, and commence foreclosure proceedings. A foreclosure sale was scheduled for Feb. 5, 2008. However, Fairfield relates, the Debtor filed for bankruptcy on the eve of the foreclosure sale. Bankruptcy Filing Done in "Bad Faith" Fairfield asserts that its collateral is at risk and is deteriorating. Fairfield points out that the Debtor failed to satisfy outstanding and overdue property taxes associated with the property. The current amount owing is $45,171, and the property is subject to a priming tax lien. Moreover, the Debtor has ceased operating at and developing the Property, and several tasks must be accomplished to adequately protect Fairfield's collateral. Accordingly, Fairfield says it is entitled to relief under Section 362(d)(1) of the Bankruptcy Code for the Debtor's failure to provide adequate protection. Fairfield relates that the Debtor has no equity in the property. Outstanding indebtedness on the property is $22,912,337. An appraisal valuing the property as of Dec. 19, 2007, excluding already purchased lots, places the "as is" value of the property at $19,420,000. The same appraisal places the liquidation value at $15,540,000. Fairfield further asserts that the Debtor's bankruptcy filing was done in bad faith and thus constitutes "cause" for lifting the automatic stay. Fairfield contends that the indicia of bad faith are present: a) the Debtor has only one asset; b) the Debtor filed its bankruptcy petition one day prior to the scheduled foreclosure sale with the intent to delay Fairfield's efforts to enforce its rights as a secured creditor; c) the Debtor's financial problems involve a two-party dispute between Debtor and its only substantial secured creditor; d) the Debtor has few employees and the unsecured debts are small in relation to the secured debt; and e) the Debtor has no realistic possibility of an effective reorganization. The Court will hold a hearing on Fairfield's request on March 26, 2008, at 10:00 a.m. Based in Atlanta, Georgia, Euram-Macauley One, LLC, filed for Chapter 11 protection on Feb. 4, 2008 (Bankr. N.D. Ga. Case No. 08-62164). G. Frank Nason, IV, Esq. at Lamberth, Cifelli, Stokes, Ellis & Nason, P.A., 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 $10 million to $50 million. EXCEL HEALTH: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Excel Health Enterprises, Inc. P.O. Box 2151 Anderson, IN 46018 Bankruptcy Case No.: 08-02476 Type of Business: The Debtor owns and manages a physical fitness club. Chapter 11 Petition Date: March 12, 2008 Court: Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor's Counsel: David R. Krebs, Esq. (drk@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: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. FEDDERS CORP: Court Approves Sale of Assets to Elco Holding ----------------------------------------------------------- The Hon. Brendan Linehan Shannon of the United States Bankruptcy Court for the District of Delaware authorized Fedders Corporation and its debtor-affiliates to sell their Fedders North America Inc. and Emerson Quite Kool Corporation subsidiaries' assets to Elco Holding Ltd. During the March 11 public auction, Elco Holding made the highest and best offer for the assets. As reported in the Troubled Company Reporter on Feb. 18, 2008, under an asset purchase agreement dated Feb. 8, 2008, the Debtors agreed to sell their assets to Israel-based Elco Holding for $13,250,000 in cash. A full-text copy of the Debtors' and Elco Holding agreement is available for free at: http://ResearchArchives.com/t/s?280f The Debtors said that two of their non-foreign affiliates -- Fedders Air Treatment Research and Development (Shanghai) Co., Ltd.; and Fedders Shanghai Corporation -- have agreed to sell all of their assets to Electra Air-Conditioning (Shenzhen) Co., Ltd., for $3,857,368 in aggregate. A full-text copy of the Fedders Air and Electra Agreement is available for free at: http://ResearchArchives.com/t/s?2810 A full-text copy of the Fedders Shanghai and Electra Agreement is available for free at: http://ResearchArchives.com/t/s?2811 About Fedders Corporation Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq., Irving E. Walker, Esq., and Adam H. Isenberg, Esq., of Saul, Ewing, Remick & Saul LLP, represent the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The Official Committee of Unsecured Creditors is represented by Brown Rudnick Berlack Israels LLP. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. * * * As reported in the Troubled Company Reporter on March 4, 2008, the Debtors asked the Court to further extend their exclusive period to file a Chapter 11 plan until April 14, 2008. FIRST DARTMOUTH: Wants Exclusivity Period Extended to April 11 -------------------------------------------------------------- First Dartmouth Homes asks the U.S. Bankruptcy Court for the Middle District of Florida to extend, until April 11, 2008, its exclusive right to file for a plan of reorganization, Bill Rochelle of Bloomberg News reports. The Debtor is asking for more time to process creditor claims so that a plan approval will be easy. Headquartered in St. Petersburg, Florida, First Dartmouth Homes is a homebuilder that focuses on developing luxury residential and mixed-use communities and yacht clubs. The company filed for Chapter 11 protection on Dec. 28, 2007 (Bankr. M.D. Fla. Case No. 07-12927). John D. Emmanuel, Esq., at Fowler, White, Boggs, Banker, P.A., in Tampa, Florida, represent the Debtor. According to Bill Rochelle of Bloomberg News, the Debtor's Chapter 11 petition listed assets of $1.5 million and debt of $55.3 million. FOAMEX INTERNATIONAL: To Pursue Further Deleveraging ---------------------------------------------------- Foamex International Inc. intends to make a rights offering to all of its stockholders to purchase its Common Stock at $1.50 per share, subject to adjustment in certain circumstances. The Company also intends to make an offer at the same time to its Second Lien Loan lenders to permit them to acquire Common Stock at the same price as in the Rights Offering using their Second Lien Loans at par value. The Rights Offering and the Second Lien Offering would significantly deleverage the Company. Under the Rights Offering and the Second Lien Offering, the Company would anticipate receiving collectively a minimum of $80 million in new equity, which would be through a combination of cash and an exchange of Second Lien Loans at par. Any cash received in the Rights Offering, net of fees, expenses and accrued interest, would be used to prepay the loans under the First Lien Term Credit Agreement. Any Second Lien Loans that are used to purchase Common Stock would be canceled. Both the Rights Offering and the Second Lien Offering would be subject to certain conditions and limitations, including to prevent the Company from undergoing an "ownership change" for purposes of Section 382 of the Internal Revenue Code. The Rights Offering and the Second Lien Offering would be subject to, among other things, the Company obtaining the appropriate lender amendments and consents, which the Company is currently seeking to obtain. Foamex will be negotiating with certain of its large stockholders for potential commitments for the offerings of $80 million -- in cash and Second Lien Loans at par -- which would be offset by any funding under capital commitments of up to $20 million that the Company obtained. However, there is no assurance that any commitments will be made or that the Rights Offering or the Second Lien Offering will take place. On Feb. 13, 2008, Foamex received commitments for up to $20 million of additional investment from D.E. Shaw Laminar Portfolios, L.L.C., Goldman Sachs & Co. and Sigma Capital Management, LLC. Foamex believes the commitments will assist in its compliance with financial covenants under its credit agreements during the entire 2008 year. If the Company proceeds with the two offerings, they would be expected to be completed in the second quarter of 2008. If the Rights Offering and Second Lien Offering are not consummated, the Company will retain the right to utilize up to $20 million through the capital commitments. Certain fees will be payable to the lenders in connection with the amendments and consents. In addition, if commitments are agreed to regarding the Rights Offering and Second Lien Offering, put premiums are expected to be paid to the committing stockholders. Foamex's Credit Facilities On February 12, 2007, Foamex entered into new senior secured credit facilities consisting of: -- a $175.0 million revolving credit facility, including a sub- limit of $45.0 million for letters of credit; and -- term loan facilities aggregating $600.0 million, including $425.0 million under a first lien term loan facility and $175.0 million under a second lien term loan facility. Substantially all of the assets of Foamex and its domestic subsidiaries and Foamex Canada are pledged as collateral for the borrowings. Borrowings under the revolving credit facility are subject to a borrowing base formula based on eligible accounts receivable and bear interest at floating rates based upon either LIBOR or a Base Rate, including an applicable margin. The revolving credit facility will mature on February 12, 2012. Borrowings under the term loan facilities also bear interest at floating rates based upon and including a margin over either Eurodollar, or a Base Rate. The first lien term loan facility is subject to quarterly principal repayments initially equal to approximately $1.1 million, and annual excess cash flow repayments, with the balance maturing on February 12, 2013. The second lien term loan facility matures on February 12, 2014, and is subject to a prepayment premium of 2.0% during the first year and 1.0% during the second year. Foamex borrowed approximately $13.4 million under the $175.0 million revolving credit facility and the full amounts of the first lien term loan facility and second lien term loan facility on February 12, 2007 to pay amounts due under the Company's bankruptcy plan. The initial weighted average interest rates were 8.25%, 7.57% and 10.07%, respectively. About Foamex International Inc. Headquartered in Linwood, Pennsylvania, Foamex International Inc. (FMXIQ.PK) -- http://www.foamex.com/-- produces cushioning for bedding, furniture, carpet cushion and automotive markets. The company also manufactures polymers for the industrial, aerospace, defense, electronics and computer industries. The company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05- 12693). As of July 3, 2005, the Debtors reported $620,826,000 in total assets and $744,757,000 in total debts. On Feb. 2, 2007, the Court confirmed the Debtors' Second Amended Joint Plan of Reorganization. The Plan of Reorganization of Foamex International Inc. became effective and the company emerged from chapter 11 bankruptcy protection on Feb. 12, 2007. * * * At July 1, 2007, Foamex International Inc.'s balance sheet showed total assets of $529,433,000 and total liabilities of $794,223,000, resulting to a total stockholders' deficit of $264,790,000. FRIEDMAN'S INC: U.S. Trustee Objects to Unsecured Panel's Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing, on March 20, 2008, to consider the objection of Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, to the retention of Moses & Singer LLP as counsel for the Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Friedman's Inc. and affiliate Crescent Jeweler Inc., Bill Rochelle of Bloomberg News reports. The Debtors and junior lender Harbinger Capital Partners Master Fund I Ltd. also objected to the employment of Moses & Singer. The U.S. Trustee told the Court that the proposed counsel should be disqualified because the brother of one of the firm's partners is on the Debtors' board of directors, Mr. Rochelle relates. Addison, Texas-based Friedman's Inc. -- http://www.friedmans.com/ -- and -- http://www.crescentonline.com/-- is the parent company of a group of companies that operate fine jewelry stores located in strip centers and regional malls in the southeastern United States. Friedman's and eight its affiliates filed for chapter 11 protection on Jan. 14, 2005 (Bankr. S.D. Ga. Case No. 05-40129). On Sept. 22, 2005, the Bankruptcy Court entered an order approving the Debtors' Disclosure Statement explaining their Amended Joint Plan of Reorganization. On Nov. 23, 2005, the Court confirmed the Debtors' Amended Plan and that Plan became effective on Dec. 9, 2005. Crescent Jewelers, the largest jewelry retailer on the West Coast, filed for Chapter 11 protection on Aug. 12, 2004 (Bankr. N.D. Calif. Case No. 04-44416). On June 15, 2006, the California Bankruptcy Court approved Crescent Jewelers' Second Amended Disclosure Statement its Second Amended Plan of Reorganization. The Court confirmed that Plan on July 13, 2006. Crescent Jewelers was acquired by Friedman's and became a wholly-owned subsidiary in 2006. In Jan. 22, 2008, five parties, which declared claims aggregating $9,081,199.07, filed an involuntary Chapter 7 petition against Friedman's. The parties that filed the involuntary petition were Rosy Blue, Inc.; Rosy Blue Jewelry Inc.; Jay Gems, Inc., dba Jewelmark; Simply Diamonds Inc.; and Paul Winston- Eurostar LLC. As of Jan. 28, 2008, Friedman's operated 388 stores in 19 states with over 2,890 employees while Crescent Jewelers operated 85 stories in 3 states with over 600 employees. Friedman's and Crescent Jewelers filed for chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case Nos. 08-10161 and 08-10179). An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. Athanasios E. Agelakopoulos, Esq., at Kilpatrick Stockton LLP, and Jason M. Madron, Esq., and Michael Joseph Merchant, Esq., at Richards, Layton & Finger PA represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims, balloting, and noticing agent. As of Dec. 28, 2007, the Debtors listed total assets of $245,787,000 and total liabilities of $171,877,000. GENERAL MOTORS: Wants to Take Tools If Plastech Stops Delivery -------------------------------------------------------------- General Motors Corporation seeks relief from the automatic stay under Section 362(d) of the U.S. Bankruptcy Code to allow it to recover certain equipment in the event Plastech Engineered Products, Inc., and its debtor-affiliates fail to produce component parts for GM vehicles. General Motors has provided to the Debtors via bailment, certain supplies, materials, tools, jigs, dies, gauges, fixtures, molds, patterns, equipment and other items to enable the Debtors to manufacture parts unique to GM's vehicles. On Feb. 12, 2007, and January 22, 2008, Plastech entered into Financial Accommodation Agreements with GM and other major customers. Under the Agreements, GM provided significant accommodations to Plastech, including a payment of $11,500,000 beyond GM's otherwise existing contractual obligations to the company. In exchange, Plastech agreed to grant immediate possessory rights to tooling paid by the Major Customers. GM did not disclose the value of tooling in the Debtors' possession that it had paid for. Scott A. Wolfson, Esq., at Honigman Miller Schwartz and Cohn LLP, in Detroit, Michigan, informs the U.S. Bankruptcy Court for the Eastern District of Michigan that GM has strongly supported Plastech through financial and other accommodations, and will continue its discussions with Plastech and others in pursuit of the Debtors' efforts to emerge from Chapter 11 as competitive, viable suppliers or, if a reorganization is not possible, to effectuate an orderly wind-down, respectful of the interests of all customers and other constituents. However, the uncertainties confronting Plastech are self-evident, Mr. Wolfson avers. He notes that Plastech has only obtained a limited amount and duration of its debtor-in-possession loan and has already advised GM that it plans to close four facilities where GM component parts are made. According to Mr. Wolfson, GM must prepare for contingencies and circumstances in which Plastech cannot or otherwise fails to deliver components to GM on a timely basis, thereby placing GM's assembly operations in jeopardy with consequential prejudice and actual harm to GM, its over 100,000 employees and those persons and entities who rely upon and engage in business with GM. Mr. Wolfson asserts that GM's request for a lifting of the stay under Section 362(d) is necessary so that GM could prepare for resourcing in the event that Plastech is no longer able to provide GM with the parts it needs for its manufacturing processes. "As the Court has recognized, any failure by Plastech to supply component parts to a major customer such as GM would result in disruptions to assembly lines within hours, which would be followed by layoffs and substantial damages," Mr. Wolfson states. Mr. Wolfson notes that: -- In its ruling on a motion from relief from stay filed by Chrysler, LLC, the Court recognized that Plastech has no equity in the tooling by virtue of certain tooling acknowledgments to which Chrysler and GM were both parties; and -- Granting GM's request will not adversely affect any reasonable likelihood of Plastech's pursuit of a successful conclusion to its Chapter 11 cases. GM proposes that modification of the automatic stay be only allowed when Plastech is either (i) by its own statement or actions, unwilling or (ii) unable to continue to supply specific component parts under the terms of governing purchase orders, as a result of which the certain tooling will be unnecessary to future prosecution of the Chapter 11 cases. GM asks the Court to enter an order allowing it to enforce its non-bankruptcy rights in state court to: (1) recover possession of all Tooling associated with a rejected Production Purchase Order immediately upon the rejection of any Production Purchase Order; (2) recover possession of all Tooling associated with a facility that Debtors notify GM of their intent to close; (3) recover possession of all Tooling upon the expiration of financing for Debtors in the absence of a final, non- appealable order approving further financing for the Debtors; and (4) recover possession of all Tooling associated with a Component Part in the event Debtors are unable to supply GM its requirements of that Component Part under the terms of the Production Purchase Orders. 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. (Plastech Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) About General Motors Based in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Feb. 28, 2008, Fitch Ratings affirmed the Issuer Default Rating of General Motors at 'B', with a Rating Outlook Negative. As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GEORGIA GULF: Weak Financial Performance Cues Moody's Rating Cuts ----------------------------------------------------------------- Moody's Investors Service downgraded Georgia Gulf Corporation's corporate family rating to B3 from B1. In addition Moody's downgraded the company's secured revolver and term loan to Ba3, its unsecured notes to Caa1 and its subordinated notes to Caa2. The rating outlook is negative. These actions conclude Moody's review initiated on Nov. 8, 2007. The two notch downgrade for the CFR and the negative outlook are due to concerns over the company's ability to maintain compliance with tightening financial covenants in its bank facility combined with the difficult conditions in the high yield loan and debt markets. The ratings reflect continuing weak financial performance due to the downturn in the US housing market, uncertainty over the length or depth of the US housing downturn, significant declines in US renovation and remodeling expenditures, the negative impact of a potential US consumer-led recession in 2008 and the continuing appreciation of the Canadian dollar which has raised the cost of fabricated products imported into the US from the company's facilities in Canada. However, Moody's expects further increases in caustic soda margins, on-going cost reduction activities, delays in the startup of new US PVC capacity (Shintech), and to a lesser degree, PVC exports, to partially offset the negative impact from the US housing downturn and recession. In addition, Moody's anticipates that the company should be able to moderately reduce debt in 2008 due to modest free cash flow from operations and working capital reductions. Management has stated that potential asset sales, and additional sale and lease- back transactions, could further reduce debt in 2008. While Moody's believes that GGC is fundamentally a stronger credit over the medium term than the B3 CFR would imply, Moody's is focusing more on the company's near-term performance due to the expectation of weaker credit metrics in 2008 and the anticipation that the company's will need to renegotiate the financial covenants in its revolver and term loan to maintain access to these facilities over the next 12 months. Furthermore, the current conditions in the market for high yield loans and debt are likely to make this process more difficult, and will likely result in a meaningful increase in its borrowing costs. The negative outlook is solely due to Moody's concerns over the company's ability to maintain compliance with the financial covenants in its credit facilities over the next 12-24 months. Resolution of this issue combined with a turnaround in the company's projected financial performance could result in a positive rating action. Conversely, failure to resolve this issue combined with weaker conditions in the company's main end-markets, PVC and PVC-based fabricated products, could result in a negative rating action. Downgrades: Issuer: Georgia Gulf Corporation -- Probability of Default Rating, Downgraded B3 from B1 -- Corporate Family Rating, Downgraded B3 from B1 -- Gtd. Sr. Secured Revolving Credit Facility due 2011 to Ba3 (LGD2 / 23%) from Ba2 -- Gtd. Sr. Secured Term Loan due 2013 to Ba3 (LGD2 / 23%) from Ba2 -- Gtd. Sr. Senior Unsecured Notes due 2014, Downgraded to Caa1 (LGD5 / 71%) from B2 -- Gtd. Sr. Senior Unsecured Notes due 2013, Downgraded to Caa1 (LGD5 / 71%) from B2 -- Gtd. Sr. Senior Subordinated Notes due 2016, Downgraded to Caa2 (LGD6 / 93%) from B3 Outlook Actions: Issuer: Georgia Gulf Corporation -- Outlook, Changed To Negative from Under Review for Downgrade Georgia Gulf Corporation, headquartered in Atlanta, Georgia, is a producer of commodity chemicals including chlorovinyls (chlorine, caustic soda, vinyl chloride monomer, polyvinyl chloride resins and vinyl compounds), PVC fabricated products (pipe, siding, window profiles, plastic lumber, etc.), and aromatics (cumene, phenol and acetone). The company generated revenues of $3.2 billion in 2007. GGC substantially increased its leverage in October 2006 with the acquisition of Royal Group, a building and home improvement products manufacturer (primarily PVC-based products) for approximately $1.5 billion; the acquisition was entirely debt financed. GRUSAF LLC: Case Summary & 117 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Grusaf, L.L.C. 211 East International Boulevard Daytona Beach, FL 32118 Bankruptcy Case No.: 07-12701 Debtor-affiliate filing a separate Chapter 11 petition on March 12, 2008: Entity Case No. ------ -------- Ursula Amon & Felix Amon 08-03209 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- R.X. Realty, Inc. 07-08444 F.E.M.I. International, Inc. 07-10904 C.W.C. Construction Group, L.L.C. 07-11943 Madeira South, L.L.C. 07-12104 Type of Business: The Debtors develop condominiums. Chapter 11 Petition Date: December 21, 2007 Court: Middle District of Florida (Tampa) Judge: Michael G. Williamson Debtors' Counsel: Buddy D. Ford, Esq. (Buddy@tampaesq.com) 115 North MacDill Avenue Tampa, FL 33609 Tel: (813) 877-4669 Fax: (813) 877-5543 Grusaf, LLC's Financial Condition: Total Assets: $8,597,605 Total Debts: $11,215,902 A. Grusaf, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carter Electric Co. Lien $86,510 231 Jean Street Daytona Beach, FL 32114 General Electric Appliances Lien $80,314 P.O. Box 281865 Atlanta, GA 30384-1865 Tri-County Reinforcing Lien $65,463 95 port Royal Drive Palm Coast, FL 32164 Fashion Tile Services $49,570 Exotic Marble Lien Litigation $49,349 East Coast Underground Lien $47,242 Workers Temporary Staffing $38,840 Koontz Heating & Air Lien $32,039 Wiginton Fire Systems Lien $28,773 I.C.I. Paints Lien Litigation $25,488 Plummer, Inc. Lien $24,637 United Construction $20,746 A.A.A. Welding & Security Lien $20,704 Rental Service Corp Service $17,290 Volusia County Tax Col. Property Taxes $15,986 Lloyd's Exercise Equipment Purchases $12,567 Valiant Products $12,281 D.E.V.M.A.X., L.L.C. Project Management, $11,886 Acetg.,Legal Mark Dowst & Associates Lien $10,983 Planson, III Lien $10,086 B. F.E.M.I. International, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carter Electric Co. Lien $86,510 231 Jean Street Daytona Beach, FL 32114 General Electric Appliances Lien $80,314 P.O. Box 281865 Atlanta, GA 30384-1865 Tri-County Reinforcing Lien $65,463 95 port Royal Drive Palm Coast, FL 32164 Fashion Tile Services $49,570 Exotic Marble Lien Litigation $49,349 East Coast Underground Lien $47,242 Workers Temporary Staffing $38,840 Koontz Heating & Air Lien $32,039 Wiginton Fire Systems Lien $28,773 I.C.I. Paints Lien Litigation $25,488 Plummer, Inc. Lien $24,637 United Construction $20,746 A.A.A. Welding & Security Lien $20,704 Rental Service Corp Service $17,290 Volusia County Tax Col. Property Taxes $15,986 Lloyd's Exercise Equipment Purchases $12,567 Valiant Products $12,281 D.E.V.M.A.X., L.L.C. Project Management, $11,886 Acetg.,Legal Mark Dowst & Associates Lien $10,983 Planson, III Lien $10,086 B. R.X. Realty, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carter Electric Co. Lien $86,510 231 Jean Street Daytona Beach, FL 32114 General Electric Appliances Lien $80,314 P.O. Box 281865 Atlanta, GA 30384-1865 Tri-County Reinforcing Lien $65,463 95 port Royal Drive Palm Coast, FL 32164 Fashion Tile Services $49,570 Exotic Marble Lien Litigation $49,349 East Coast Underground Lien $47,242 Workers Temporary Staffing $38,840 Koontz Heating & Air Lien $32,039 Wiginton Fire Systems Lien $28,773 I.C.I. Paints Lien Litigation $25,488 Plummer, Inc. Lien $24,637 United Construction $20,746 A.A.A. Welding & Security Lien $20,704 Rental Service Corp Service $17,290 Volusia County Tax Col. Property Taxes $15,986 Lloyd's Exercise Equipment Purchases $12,567 Valiant Products $12,281 D.E.V.M.A.X., L.L.C. Project Management, $11,886 Acetg.,Legal Mark Dowst & Associates Lien $10,983 Planson, III Lien $10,086 C. F.E.M.I. International, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carter Electric Co. Lien $86,510 231 Jean Street Daytona Beach, FL 32114 General Electric Appliances Lien $80,314 P.O. Box 281865 Atlanta, GA 30384-1865 Tri-County Reinforcing Lien $65,463 95 port Royal Drive Palm Coast, FL 32164 Fashion Tile Services $49,570 Exotic Marble Lien Litigation $49,349 East Coast Underground Lien $47,242 Workers Temporary Staffing $38,840 Koontz Heating & Air Lien $32,039 Wiginton Fire Systems Lien $28,773 I.C.I. Paints Lien Litigation $25,488 Plummer, Inc. Lien $24,637 United Construction $20,746 A.A.A. Welding & Security Lien $20,704 Rental Service Corp Service $17,290 Volusia County Tax Col. Property Taxes $15,986 Lloyd's Exercise Equipment Purchases $12,567 Valiant Products $12,281 D.E.V.M.A.X., L.L.C. Project Management, $11,886 Acetg.,Legal Mark Dowst & Associates Lien $10,983 Planson, III Lien $10,086 D. C.W.C. Construction Group, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carter Electric Co. Lien $86,510 231 Jean Street Daytona Beach, FL 32114 General Electric Appliances Lien $80,314 P.O. Box 281865 Atlanta, GA 30384-1865 Tri-County Reinforcing Lien $65,463 95 port Royal Drive Palm Coast, FL 32164 Fashion Tile Services $49,570 Exotic Marble Lien Litigation $49,349 East Coast Underground Lien $47,242 Workers Temporary Staffing $38,840 Koontz Heating & Air Lien $32,039 Wiginton Fire Systems Lien $28,773 I.C.I. Paints Lien Litigation $25,488 Plummer, Inc. Lien $24,637 United Construction $20,746 A.A.A. Welding & Security Lien $20,704 Rental Service Corp Service $17,290 Volusia County Tax Col. Property Taxes $15,986 Lloyd's Exercise Equipment Purchases $12,567 Valiant Products $12,281 D.E.V.M.A.X., L.L.C. Project Management, $11,886 Acetg.,Legal Mark Dowst & Associates Lien $10,983 Planson, III Lien $10,086 E. Madeira South, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Carter Electric Co. Lien $86,510 231 Jean Street Daytona Beach, FL 32114 General Electric Appliances Lien $80,314 P.O. Box 281865 Atlanta, GA 30384-1865 Tri-County Reinforcing Lien $65,463 95 port Royal Drive Palm Coast, FL 32164 Fashion Tile Services $49,570 Exotic Marble Lien Litigation $49,349 East Coast Underground Lien $47,242 Workers Temporary Staffing $38,840 Koontz Heating & Air Lien $32,039 Wiginton Fire Systems Lien $28,773 I.C.I. Paints Lien Litigation $25,488 Plummer, Inc. Lien $24,637 United Construction $20,746 A.A.A. Welding & Security Lien $20,704 Rental Service Corp Service $17,290 Volusia County Tax Col. Property Taxes $15,986 Lloyd's Exercise Equipment Purchases $12,567 Valiant Products $12,281 D.E.V.M.A.X., L.L.C. Project Management, $11,886 Acetg.,Legal Mark Dowst & Associates Lien $10,983 Planson, III Lien $10,086 F. Ursula Amon & Felix Amon's 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ IStar Financial Personal guarantee $19,232,669 P.O. Box 3040 Garden Grove, CA 92842 Fifth Third Bank Personal guarantee $8,826,226 P.O. Box 630337 Cincinnati, OH 45263 Transatlantic Bank Personal guarantee $7,280,000 Attn: Michael Rosen, Esq. 48 East Flagler Street Miami, FL 33131 Madeira Recovery, LLC Judgment & attorney's $7,171,186 Roetzel & Andress, LPA fees 420 South Orange Avenue CNL Center II, 7th Floor Tallahassee, FL 32302-6507 Downtown Tampa Investments Personal guarantee $5,097,000 Stephen Szabo, Esq. 100 North Tampa Street, Suite 2700 Tampa, FL 33602-5810 Prosperity Bank Personal guarantee $2,722,198 Attn: Katherine G. Jones, Esq. P.O. Drawer 3007 Saint Augustine, FL 32085-3007 Mark Nagrani Prommissory note $2,000,000 612 South Palmetto Avenue New Smyrna Beach, FL Florida Community Bank $1,717,012 155 North Bridge Street Labelle, FL 33935 Black & White Investment Co. Personal guarantee $1,549,680 1124 Waverly Drive Daytona Beach, FL 32118-3621 Internal Revenue Service 2005 1040 taxes $1,332,107 Special Procedures Staff 400 West Bay Street, Stop 5720 Jacksonville, FL 32202 First National Bank of Personal guarantee $1,300,000 Pennsylvania 4140 East State Street Hermitage, PA 16148 Eric Greve & Kiftsgate Trust, personal guarantee $940,000 "Berg en Vaart" Cannenburgerweg 17-19, 1244 RE's Graveland, Netherlands Woodlea Investment Co., LLC Personal guarantee $803,806 P.O. Box 10506 Daytona Beach, FL 32120 Green Point Mortgage $607,482 P.O. Box 1093 Branford, CT 06405 Woodlea Investment Co., LLC Personal guarantee $540,894 P.O. Box 10506 Daytona Beach, FL 32120 National City $491,612 P.O. Box 856176 Louisville, KY 40285 Sunshine State Commercial Personal guarantee $490,836 Bank Robert Kit Korey, Esq. 595 W. Granada Boulevard, Suite A Ormond Beach, FL 32174 HEATHY DIRECTIONS: S&P Withdraws Ratings on Company's Request ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Potomac, Marylandbased Heathy Directions LLC, at the company's request. "The 'CCC+' corporate credit rating and negative outlook reflected declining operating trends and a distinct possibility of a covenant breach," said Standard & Poor's credit analyst Charles Pinson-Rose. HELLER JACOBS: Judge Lifland Dismisses Chapter 11 Case ------------------------------------------------------ The Honorable Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York dismissed Heller Jacobs & Kamlet LLP's Chapter 11 case early this week. As revealed in court documents, the firm was "administratively insolvent", Bankruptcy Law 360 relates. Judge Lifland ordered the Debtor's counsel, Geron & Associates P.C., to continue as the distribution agent of the estate's allowed administrative claims. In addition, the Court also ordered Fox Rothschild LLP to continue serving as the estate's fiduciary and distribute additional fees to the administrative claimants. Based in New York City, Heller, Jacobs & Kamlet, LLP is a limited liability, personal injury law firm. The firm filed for Chapter 11 protection on May 7, 2004 (Bankr. S.D.N.Y. Case No. 04-13127). Yann Geron, Esq., at Geron & Associates P.C., represented the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $1,200,022, and total liabilities of $1,464,769. HERBST GAMING: Board Creates Office of the Chief Executive Officer ------------------------------------------------------------------ Herbst Gaming Inc. said in a regulatory filing that on March 5, 2008, its Board of Directors adopted a resolution creating the Office of the Chief Executive Officer, and appointed Ferenc Szony as president in addition to chief operating officer. Edward Herbst, who had previously served as chairman of the board, chief executive officer and president, continues to serve as the company's chairman of the board and chief executive officer. Prior to joining the company in connection with its acquisition of the Sands Regent in January of 2007, Mr. Szony had been the president and chief executive officer of the Sands Regent since 1997. Prior to joining the Sands Regent, Mr. Szony served in several executive positions within the Hilton Hotel Corporation, last serving as president at the Reno Hilton Resort from 1994 to 1997. The company said that the Office of the Chief Executive Officer was formed to address and make decisions with respect to significant operational, financial, strategic, legal and or restructuring issues consistent with the business strategies, plans and budgets of the company and other Board approved matters including, but not limited to, those delegated to the Office of the Chief Executive Officer by the Board. The members of the Office of the Chief Executive Officer consist of the company's chief executive officer, its president & chief operating officer, chief financial officer, general counsel and the company's two executive vice presidents. About Herbst Gaming Headquartered in Las Vegas, Nevada, Herbst Gaming Inc. -- http://www.herbstgaming.com/-- is an established casino and slot route operator that operates casinos located in Nevada, Missouri and Iowa. The company owns and operates approximately 6,800 slot machines in its slot route business and is a slot machine operator in Nevada. * * * As reported in the Troubled Company Reporter on Mar. 5, 2008, Moody's Investors Service lowered the ratings of Herbst Gaming Inc., including the corporate family, rating which was downgraded to B3 from B2, following the company's Feb. 28, 2008 announcement that it has engaged Goldman Sach's & Co. as financial advisor to assist the company with its evaluation of strategic and financial alternatives. Herbst's ratings were also placed under review for possible further downgrade. JAMES LIGHTLE: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------- Debtor: James C. Lightle 51131 Road KK Burlington, CO 80807 Bankruptcy Case No.: 08-12851 Chapter 11 Petition Date: March 10, 2008 Court: District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Douglas C. Pearce, II, Esq. 390 Interlocken Crescent Suite 490 Broomfield, CO 80021 Tel: 303-661-9292 Fax : 303-661-9555 doug@crlpc.com Total Assets: $2,068,261 Total Debts: $1,298,134 Debtor's list of its Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hitchcock Inc. trade debt $14,958 49994 East Highway 24 Burlington, CO 80807 Wilcox Oil & Chemical trade debt $2,162 616 11th Street P.O. Box 97 Burlington, CO 80807 Am First Bank $2,071 602 W. B. Street Mc Cook, NE 69001 1st National Bank of Omaha trade debt $1,676 Aff Credit Services $155 Central State Recovery $32 JEFFERSON COUNTY: Debt Restructuring Plan Fails to Lift Bond Price ------------------------------------------------------------------ A proposal by the Jefferson County Commission to restructure its $3.2 billion sewer debt failed to lift the county's bond price on Thursday, Reuters reports. Yields on the sewer debt have widened as much as 200 basis points since rating agencies expressed concern about the company's ability to meet its debt obligations in February, the report said, citing traders. On Wednesday, Commission President Bettye Fine Collins said the county could repay the sewer bond debt with excess revenues from a 1-cent sales tax that was passed to fund school construction, Jay Reeves of the Associated Press reports. The money is available without a need for new taxes -- that is, if all the members of the commission and legislators agree. As reported by the Troubled Company Reporter on March 10, 2008, Jefferson County was in technical default in relation to its $3.2 billion sewer debt. The county was unable to post $184 million in collateral on its swap agreements with investment banks. The collateral was required under the agreement after a series of downgrades on the debt. The county is not yet in payment default, which occurs if the county discontinues payments to the banks. No demand for the payment has been made by the banks on March 7. The technical default gives the banks the right to terminate the contracts and force payments totaling $184 million, The Birmingham News reported. Peter Shapiro, managing director of New Jersey-based Swap Financial LLC, warned of a "cascade" of default as a result of a default on the swap. The county has 13 interest-rate swap transactions with Bank of America, Bear Stearns Inc., JP Morgan and Lehman Brothers in an aggregate amount of $5.4 billion. Previously, Jefferson county refused to pledge reserves against the interest-rate swaps tied to the sewer debt. Without a restructuring, the county's debt payments could balloon to $250 million annually, while the sewer system generates net revenues of only $138 million a year, Commissioner Collins said, according to AP. She said the commission has told the banks and the bond insurers they will seek authority from the Legislature to apply excess sales tax revenues to the sewer debt. Rep. John Rogers, co-chairman of the Jefferson County delegation has said the legislators do not agree with the plan, according to the report. According to Reuters, a small block of sewer bonds maturing in 2020, on Wednesday traded as cheap as 83.6 cents on the dollar with a 7.057 percent yield. The bonds are insured by Financial Guaranty Insurance Corp. and carry a 5 percent coupon. S&P and Moody's Ratings As reported by the TCR on March 10, 2008, Standard & Poor's Ratings Services lowered its underlying rating on Jefferson County, Alabama's sewer revenue debt three notches to 'CCC' from 'B' due to the likelihood that the county will not post collateral to counterparties by March 7, 2008, as specified in the terms of the county's swap agreements. In addition, the rating service revised its CreditWatch status on the debt to developing from negative. As reported by the TCR on March 5, 2008, Moody's Investors Service downgraded to B3, from Baa3, the underlying sewer revenue rating on Jefferson County's $3.2 billion in outstanding sewer revenue warrants. The warrants are backed by bond insurance from various financial guarantors including XL Capital Assurance (rated A3 with a negative outlook), FGIC (rated A3 on review for possible downgrade) and FSA (rated Aaa with a stable outlook). The bonds will continue to carry the insured ratings as they are higher than the underlying rating. JEFFERSON COUNTY: NY Times Notes Ex-JPMorgan Exec's Role in Crisis ------------------------------------------------------------------ May Williams Walsh of The New York Times, in a March 12, 2008 article, brought to the fore the role of former JPMorgan Chase banker Charles E. LeCroy in transactions that led to the troubles of Jefferson County. In 2002, Mr. LeCroy persuaded the county to convert its debt from fixed interest rates to adjustable rates to reduce interest payments, the article stated. He also recommended that the county use interest-rate swaps that he said would protect it if interest rates rose. Mr. LeCroy helped the county sell bonds to pay for the upgrade. The county is now facing ballooning interest costs for the debt. Technical Default As reported by the Troubled Company Reporter on March 10, 2008, Jefferson County was in technical default in relation to its $3.2 billion sewer debt. The county was unable to post $184 million in collateral on its swap agreements with investment banks. The collateral was required under the agreement after a series of downgrades on the debt. The county is not yet in payment default, which occurs if the county discontinues payments to the banks. No demand for the payment has been made by the banks on March 7. The technical default gives the banks the right to terminate the contracts and force payments totaling $184 million. Peter Shapiro, managing director of New Jersey-based Swap Financial LLC, had warned of a "cascade" of default as a result of a default on the swap. Jefferson County Commission's president Bettye Fine Collins, said the county is negotiating with its creditors, but the results are still uncertain, according to New York Times. The county has 13 interest-rate swap transactions with Bank of America, Bear Stearns Inc., JP Morgan and Lehman Brothers in an aggregate amount of $5.4 billion. Previously, Jefferson county refused to pledge reserves against the interest-rate swaps tied to the sewer debt. According to the New York Times, of 11 swaps and similar contracts Jefferson County went into from 2001 to 2003, eight were with JPMorgan Chase. Mr. LeCroy was imprisoned for three months in 2005 in connection with a municipal corruption case in Philadelphia, according to the report. He has left JPMorgan Chase and declined to comment for the New York Times article. SEC Investigation of Former Finance Official Mr. LeCroy's plan was supported by the then Jefferson County's finance and general services official Larry Langford, now the mayor or Birmingham. As reported by the TCR on March 13, 2008, citing an article by The Wall Street Journal, the U.S. Securities and Exchange Commission is investigating Mayor Langford in relation to Jefferson County's $5 billion bond offerings and derivative contracts, known as interest-rate swaps. The investigation is aimed at determining whether Mayor Langford steered underwriting business to local investment bank Blount Parrish & Co. in exchange for payments. Mr. Langford served from 2002 to 2007 as president of the Jefferson County Commission and was in charge of finance and general services when the offerings and contracts were made. Blount Parrish underwrote nearly $2 billion of securities offerings for Jefferson County, the SEC said, according to Wall Street Journal. According to the report, in a deposition in June, Mr. Langford said to understand the deal, he asked for the advice of William Blount, owner of the firm Blount Parrish & Company. The SEC investigation is part of a larger probe into possible fraud in the offering and sale of bonds and derivatives. The SEC deposed Mr. Langford last year to learn whether any securities laws had been broken when Jefferson County refinanced its bonds, particularly whether or not payments to the officials who control the bond deals were made. About Blount Parrish Blount Parrish is a regional investment banking firm headquartered in Montgomery, Alabama. The firm has specialized in the underwriting and placement of tax-exempt securities since its formation in 1985. Jefferson County has its seat in Birmingham. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The county currently has about $82 million of cash on hand, and about $105 million in a separate sewer fund, S&P said. Patrick Darby, a lawyer with the Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter White is advising the county on its finances. JMG EXPLORATION: Price per Share Falls Below NYSE Listing Criteria ------------------------------------------------------------------ JMG Exploration Inc. received a letter from the NYSE Arca Exchange indicating that JMG is no longer in compliance with the NYSE Arca minimum price per share as required for continued listing. The NYSE Arca also indicated that JMG's continual loss from operations, the existing liquidity situation and material weaknesses in internal controls are also possible grounds for delisting. The letter requested that JMG respond indicating their intent and plan to cure the price per share deficiency. On March 7, 2008, JMG's board of directors determined that it could not affirm an ability to cure the price per share deficiency within the six months permitted by NYSE Arca's policies. The board further determined to take action to initiate the trading of the company's stock on the OTC Bulletin Board. The company will make a further statement regarding this transition and expects that NYSE Arca will suspend the company's common stock from trading in the near future. About JMG Exploration JMG Exploration Inc. (NYSEArca: JMG) is an independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids in Canada and the United States. Currently, all of the company's proved reserves are located in the United States. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 14, 2007, Hein & Associates LLP, in Irvine, California, expressed substantial doubt about JMG Exploration Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm reported that the company has not realized a profit from operations since its incorporation on July 16, 2004, and it is in a negative working capital position as of Dec. 31, 2006. LAWRENCE EVERSTON: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Lawrence F. Everston 285 Lafayette Street Apartments 6A and B New York, NY 10012 Bankruptcy Case No.: 08-10859 Chapter 11 Petition Date: March 12, 2008 Court: Southern District of New York (Manhattan) Debtor's Counsel: Harold S. Berzow, Esq. (hberzow@rmfpc.com) Ruskin Moscou Faltischek, P. C. East Tower 15th Floor, 190 EAB Plaza Uniondale, NY 11556 Tel: (516) 663-6600 Fax: (516) 663-6796 http://www.rmfpc.com/ Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor did not file a list of its largest unsecured creditors. LEGENDS GAMING: Chapter 11 Filing Cues Moody's Rating Cut to 'D' ---------------------------------------------------------------- Moody's Investors Service lowered the probability of default rating of Legends Gaming LLC to D from Caa1 following its filing for protection under Chapter 11 of the US Bankruptcy Code. Subsequent to this rating action, Moody's will withdraw all of Legends' ratings. These ratings were downgraded: -- Corporate family rating to Ca -- Probability of default rating to D -- Rating on the first lien revolver to Caa2 (LGD2, 26%) -- Rating on the first lien term loan to Caa2 (LGD2, 26%) -- Rating on the second lien term loan to C (LGD5, 80%) Headquartered in Frankfort, Illinois, Legends currently owns and operates two gaming properties located in Bossier City, Los Angeles and Vicksburg, Mississippi, under the DiamondJacks Casino brand. Moody's estimated that the company generated approximately $154 million in net revenues in 2007. LEINER HEALTH: Allowed to Hire Garden City Group as Claims Agent --------------------------------------------------------------- The Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware approved Leiner Health Products Inc. and its debtor affiliates' motion to retain The Garden City Group Inc. as its noticing, claims and balloting agent. The Garden City Group Inc. will: a. Prepare and serve documents on behalf of the Debtors in these chapter 11 cases, including: 1. notice of the commencement of the Debtors' chapter 11 cases and the initial meeting of creditors under 341(a) of title 11 of the U.S. bankruptcy code; 2. notice of any claims bar date; 3. motions, applications and other requests for relief and related documents; 4. objections, responses and replies with respect to requests for relief; 5. hearing agendas; 6. objections to claims; 7. any disclosure statements, chapter 11 plans and all documents related thereto; and 8. all notices of filing of the documents listed, hearings and such other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for orderly administration of these chapter 11 cases. b. Function as claims agent, which includes these services: 1. maintaining an official claims register in the Debtors' chapter 11 cases by docketing all proofs of claim and proofs of interest in a database; 2. maintaining copies of all proofs of claim and proofs of interest filed in these chapter 11 cases; 3. updating the official claims registers in accordance with court orders; 4. implementing necessary security measures to ensure the completeness and integrity of the claims registers; 5. transmitting to the Office of the Clerk of Court a copy of the claims registers as requested; 6. maintaining an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make such list available upon request to the Clerk's office or any party in interest; 7. providing access to the public for examination of copies of the proofs of claim and proofs of interest filed in these chapter 11 cases; 8. recording all transfers of claims pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure and, if directed to do so by the court, provide notice of such transfers as required by the Bankruptcy Rule 3001(e); and 9. establishing a case website with case information including key date, service lists and free access to the case docket within three days of docketing. c. Acting as balloting agent, which may include these services: 1. printing ballots and coordinating the mailing of solicitation packages to all voting and non-voting parties and provide a certificate or affidavit of service with respect thereto; 2. establishing a toll-free 800 number to receive questions regarding voting with respect to any chapter 11 plan; 3. receiving ballots at a post office box, inspecting ballots at a post office box, inspecting ballots for conformity to voting procedures, date stamping and numbering ballots consecutively and tabulating and certifying the results; and 4. preparing voting reports by plan class, creditor or shareholder and amount for review and approval by the Debtors and their counsel. Michael Sherin, chairman of The Garden City Group Inc., assures the Court that the firm does not hold or represent any interest adverse to the Debtors or their estates, and that the firm is a "disinterested person" as such term is defined under Sec. 101(14) of the bankruptcy code. The Debtors will pay the firm these hourly billing rates: Administrative $40 - $63 Data Entry Processors $49 Supervisor $63 - $85 Mailroom and Claims Control $49 Quality Assurance Staff $63 - $112 Project Manager $112 Programmer $112 - $135 Senior Project Manager $135 Senior Programmer $135 - $166 Director and Assistant Vice President $157 Senior Account Executive $180 Vice President $202 Michael Sherin can be reached at: Michael Sherin The Garden City Group Inc. 105 Maxess Road, Melville, New York 11747 Tel: 1-800-327-3664 http://www.gardencitygroup.com About Leiner Health Headquartered in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com-- manufacture and supply store brand vitamins, minerals and nutritional supplements products, and over- the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to their primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. When the Debtors filed for protection against their creditors, it listed assets and debts between $500 million to $1 billion. LEVEL 3: Sunit Patel to Continue as Chief Financial Officer ----------------------------------------------------------- Kevin O'Hara is stepping down as Level 3 Communications, Inc.'s president and chief operating officer, effective immediately. The company disclosed that Sunit Patel, the company's current chief financial officer, will continue in the role of CFO. The company has terminated its previously disclosed search for a new CFO. "Kevin O'Hara has worked closely with me for more than 20 years and this was obviously a difficult decision for both of us," Jim Crowe, chief executive officer of Level 3, said. "Kevin is one of the founders of our company and has made enormous contributions to its success. I want to personally thank him for his professionalism and commitment to our company over the many years we've been together. At this time, however, Kevin and I have agreed that a different perspective will be of benefit to our company." Neil Hobbs, currently executive vice president, sales and network services, has been appointed to the newly created position of executive vice president, operations. Mr. Hobbs and Mr. Crowe will be assuming Mr. O'Hara's responsibilities going forward. Mr. Crowe will assume the additional title of president. "I have worked closely with Neil Hobbs for several years and particularly closely over the last few months as we have worked to address our service activation and service management challenges," Mr. Crowe said. "I have great confidence that Neil will continue to provide the leadership that has already shown significant positive results in the early part of this year. "In October, we announced that we were beginning a search for a new CFO. At the same time, we began implementing internal organizational changes aimed at both retaining Sunit Patel and bolstering our financial operational capabilities. During the search process, it became clear that the company would be best served by Sunit remaining CFO. I am particularly pleased that our company will continue to benefit from Sunit's broadly recognized leadership and strategic financial thinking. He is a gifted, financial executive with a deep knowledge of and commitment to the company." As part of the internal finance organization changes, the company appointed Neel Dev to the new position of senior vice president, finance with responsibility for financial planning, budgeting and analysis for operations and the company's customer facing market groups. Mr. Dev has years of experience in finance and operations, and in his new role will report to Mr. Patel. "Over the last several months, we have said that our company's primary goals for 2008 are to increase sales and service installation rates and to achieve sustainable, positive free cash flow as soon as reasonably possible," Mr. Crowe said. "We have already made real progress toward achieving these important objectives. I expect that the organizational changes we are announcing today will further contribute to the improvements we have already realized." Headquartered in Broomfield. Colorado, Level 3 Communications Inc. (NASDAQ:LVLT) -- http://www.level3.com/-- is engaged in the communications business. Level 3 is a facilities-based provider of integrated communications services. As of Dec. 31, 2006, the company had approximately 73,000 intercity route miles in the United States and Europe, connecting 16 countries. As of Dec. 31, 2006, the company had metropolitan fiber networks in approximately 125 markets in the United States and Europe, which contain approximately 25,000 route miles and connect in the aggregate approximately 6,500 traffic aggregation points and buildings. During the year ended Dec. 31, 2006, the company acquired Content Delivery Network services business of SAVVIS Inc., Broadwing Corporation, TelCove Inc., ICG Communications Inc., Progress Telecom LLC and Looking Glass Networks Holding Co. Inc. On Sept. 7, 2006, the company sold Software Spectrum Inc. to Insight Enterprises Inc. * * * Moody's Investor's Service assigned these ratings to Level 3 Communications Inc. on June, 2006: 'Caa1' long-term corporate family rating, 'Caa2' senior unsecured debt rating, 'Caa3' subordinated debt rating, 'Caa1' probability of default rating and gave a stable outlook. The rating actions still hold to date. LEXINGTON RESOURCES: Lexington Oil Files Chapter 11 Petition ------------------------------------------------------------ Lexington Resources Inc. said in a regulatory filing that on March 4, 2008, its wholly owned subsidiary Lexington Oil and Gas Ltd., filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Eastern District of Oklahoma, Case Number 08-80228. Lexington Resources said that its subsidiary remains in possession of its assets and will continue to operate its business and manage its property as a debtor-in-possession. About Lexington Resources Headquartered in Las Vegas, Lexington Resources Inc. (OTC BB: LXRS) -- http://www.lexingtonresources.com/-- is engaged in oil and gas operations through its wholly owned subsidiary, Lexington Oil and Gas Ltd. Co., an Oklahoma limited liability company via a third party contract operator. As of Sept. 30, 2007, the company has an aggregate of approximately 2,944 gross developed acres, 2,200 net undeveloped acres and 3,257 gross undeveloped acres, 1,771 net developed acres pursuant to leases or concessions in Texas and Oklahoma. * * * As reported in the Troubled Company Reporter on May 25, 2007, Whitley Penn L.L.P., in Dallas, Texas, expressed substantial doubt about Lexington Resources Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2006. As reported in the Troubled Company Reporter on Nov 28, 2007, the company has a working capital deficiency of $7,365,750 at Sept. 30, 2007, has incurred losses since inception of $40,152,709 and further losses are anticipated in the development of its oil and gas properties. LIBERTY MEDIA: S&P's 'BB+' Rating Unmoved by $1BB Share Repurchase ------------------------------------------------------------------ Standard & Poor's Ratings Services said that Liberty Media Corp.'s (BB+/Negative/--) new share repurchase authorization of up to $1 billion of Liberty Entertainment common stock and up to $300 million of Liberty Capital common stock does not affect the ratings on the company. The $1.3 billion total authorization replaces a prior $1 billion purchase authorization of Liberty Capital common stock, but does not affect the existing Liberty Interactive repurchase authorization, which has $780 million remaining. The company has not indicated a time frame for completing the repurchase authorization. Liberty Entertainment is a fairly new tracking stock created from Liberty Capital to reflect the performance of Liberty Media's interest in the DIRECTV Group Inc. While the repurchase authorization would require a significant use of cash, the rating assumes that Liberty Media would maintain adequate liquidity with its available-for-sale securities and cash on hand. Liberty Media generates very healthy discretionary cash flow, primarily through its QVC subsidiary, averaging $825 million over the last three years. Furthermore, the company had more than $3.1 billion of cash and equivalents, and $17.6 billion in available-for-sale equity investments as of Dec. 31, 2007. The negative outlook reflects S&P's view that the company may add to debt leverage to achieve its strategic goals. One of the many possibilities includes increasing its 40% stake in DIRECTV to a majority interest; it could cost Liberty Media as much as $3.1 billion to get to 51% ownership, based on DIRECTV's March 11, 2008 closing stock price. Aggressive share repurchase activity would raise S&P's concerns regarding financial policy. LIDYA KASHEVAROFF: Case Summary & Three Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Lidya Kashevaroff 1425 Shoal Drive San Mateo, CA 94404 Bankruptcy Case No.: 08-30404 Chapter 11 Petition Date: March 12, 2008 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: Ruth Elin Auerbach, Esq. (attorneyruth@sbcglobal.net) 711 Van Ness Avenue, Suite 440 San Francisco, CA 94102 Tel: (415) 673-0560 Total Assets: $500,000 to $1 million Total Debts: $1 million to $100 million Debtor's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ City & County of San Francisco $900,000 Office of the City Attorney Attn: Rebecca Liu 1390 Market Street, 5th Floor San Francisco, CA 94102 Chase $10,610 A/N5988 P. O. Box 15145 Wilmington, DE 19850 Todd Emanuel, Esq. $5,000 Law Offices of Todd P. Emanuel 702 Marshall Street, Suite 400 Redwood City, CA 94063 MANCHESTER INC: Can Temporarily Employ Bridge as Financial Advisor ------------------------------------------------------------------ The United States Bankruptcy Court for the Northern District of Texas has granted to Marchester Inc. and its debtor-affiliates, permission to employ, on an interim basis, Bridge Associates LLC as their financial advisor, nunc pro tunc to Feb. 7, 2008. As the Debtors' financial advisor, Bridge Associates will: a) monitor financial results primarily through comparison to financial projections and budgets of the Debtors; b) evaluate and understand the Debtors' business plan, financial projections and loan documents; d) implement and review a 13 week cash flow plan; e) assist the Debtors in any bankruptcy related matters that may be contemplated, including preparation of schedules and statement of financial affairs; f) review and monitor any contemplated sale process through interaction with management and the company's investment banker; g) act as a facilitator among the various constituents; h) prepare periodic status reports for the Board; and i) assist in such other matters as may be mutually agreed upon between and among Bridge Associates, management, and the Board. As compensation for their services, Bridge Associates' professionals bill: Designation Hourly Rate ----------- ----------- Managing Directors, Directors, Principals, and Senior Consultants $350-$550 Senior Associates and Consultants $250-$375 Associates and Consultants $200-$300 Paraprofessionals $90-$150 Prior to bankruptcy filing, the Debtors paid Bridge Associates a retainer in the amount of $35,000, which remains unapplied. The Debtors do not owe Bridge Associates any amount for services performed or expenses incurred prior to bankruptcy filing, and Bridge Associates is consequently not a pre-bankruptcy creditors of the Debtors. Louis E. Robichaux IV, a managing director of Bridge Associates, assured the Court the firm does not hold or represent any interest adverse to the Debtors or their estates and that the firm is a "disinterested person" as such term is defined in Sec. 101(14) of the bankruptcy code. About Manchester Inc. Based in Dallas, Texas, Manchester Inc. (OTCBB: MNCS) -- http://www.manchesterinc.net/-- is in the Buy-Here/Pay-Here auto business. Buy-Here/Pay-Here dealerships sell and finance used cars to individuals with limited credit histories or past credit problems, generally financing sales contacts ranging from 24 to 48 months. It operates six automotive sales lots, which focus on the Buy-Here/Pay-Here segment of the used car market. The company and its seven affiliates filed for chapter 11 protection on Feb. 7, 2008 (Bankr. N.D. Tex. Case No.08-30703). Winston & Strawn LLP represents the Debtors in their restructuring efforts. Eric A. Liepins, Esq., is the Debtors' local counsel. As of the Debtors' bankruptcy filing, it listed total assets of $131,582,157 and total debts of $123,881,668. MAXJET AIRWAYS: Still in Talks to Sell Assets After Bid Deadline ---------------------------------------------------------------- MAXjet Airways Inc. disclosed in a Court filing that it is currently involved in negotiations with interested buyers for its assets, even well after the Feb. 27 bid deadline, Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on Feb. 26, 2008, MAXjet Airways further extended the deadline for receipt of qualified bids to Feb. 27, 2008, from Feb. 6, 2008. The Debtor expects that all proceeds from the sale of its assets will be for the benefit of its creditors, but not for the shareholders. Headquartered in Dulles, Virginia, MAXjet Airways Inc. -- http://www.maxjet.com/-- is an all-business class, long-haul airline company. It has introduced scheduled services with flights from London Stansted Airport to New York. As of December, 2006, it leased five B767 aircraft. Its customers are both business and leisure travelers. At the airport, its product features check-in facilities located in primary terminals, security and a business class departure lounge and arrivals facility. Its flights features deep-recline seats (170 degree) spaced at a 60 inch pitch, portable entertainment systems, stowage space and business class catering. The Debtor filed for chapter 11 protection on Dec. 24, 2007 (Bankr. D. Del. Case No. 07-11912). The Debtor selected Pachulski Stang Ziehl & Jones LLP and Pillsbury Winthrop Shaw Pittman LLP as its bankruptcy counsels. Arent Fox LLP represents the Official Committee of Unsecured Creditors. The Debtor's summary of schedules shows assets of $14,836,147 and debts of $23,601,824. MCMILLIN COMPANIES: Moody's Withdraws Caa2, Caa3 Ratings -------------------------------------------------------- Moody's Investors Service withdrew all the ratings of McMillin Companies, LLC, including its Caa2 corporate family rating, its Caa2 probability of default rating, its Caa3 senior notes rating, and its negative outlook. Moody's has withdrawn these ratings for business reasons. Headquartered in San Diego, California, McMillin designs, constructs, markets and sells single family detached homes to entry level and move-up buyers. The company also makes limited capital investments in and manages the development of residential land and other real estate ventures. MICHAEL TAYLOR: Case Summary & Four Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Michael Taylor 1842 Lamont Street, Northwest Washington, DC 20010 Bankruptcy Case No.: 08-13450 Chapter 11 Petition Date: March 12, 2008 Court: District of Maryland (Greenbelt) Debtor's Counsel: James Greenan, Esq. (jgreenan@mhlawyers.com) 6411 Ivy Lane, Suite 200 Greenbelt, MD 20770 Tel: (301) 441-2420 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's XX Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Citibank Credit Card $45,000 P.O. Box 6500 Purchases Sioux Falls, SD 57117 O'Neal Manion Construction $24,000 6931 Arlington Road Bethesda, MD 20814 Internal Revenue Service Tax Lien for $22,000 Philadelphia, PA 19255 real estate Capital One Credit Card $1,000 Purchases MORGAN STANLEY: S&P Downgrades Rating on $3M Notes to 'B-' ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the $3 million class A-5 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 to 'B-' from 'B'. The downgrade reflects the March 10, 2008, lowering of the senior unsecured debt ratings on Bowater Inc. Morgan Stanley ACES SPC's series 2006-8 is a credit-linked note transaction. The rating on each class of notes is based on the lowest of: (i) the ratings on the respective reference obligations for each class (with respect to class A-5, the senior unsecured notes issued by Bowater Inc. {'B-'}); (ii) the rating on the guarantor of the counterparty to the credit default swap, the interest rate swap, and the contingent forward agreement (in each instance, Morgan Stanley {'AA-'}); and (iii) the rating on the underlying securities, the class A certificates due 2013 issued by BA Master Credit Card Trust II's series 2001-B ('AAA'). MORRIS PUBLISHING: Moody's Downgrades Ratings to 'B1' From 'Ba3' ---------------------------------------------------------------- Moody's Investors Service downgraded Morris Publishing Group, LLC's Corporate Family rating to B1 from Ba3, and placed all ratings under review for possible further downgrade. Details of the rating action are: Downgrades: Issuer: Morris Publishing Group, LLC -- Probability of Default Rating, Downgraded to B1 from Ba3 -- Corporate Family Rating, Downgraded to B1 from Ba3 -- $300 million Senior Subordinated Regular Bond/Debenture, Downgraded to B2 LGD5, 75% from B1 LGD5, 78% Affirmed: -- $264 million Senior Secured Bank Credit Facility LGD2, 17% Outlook Actions: -- Outlook, Changed To Rating Under Review From Stable All ratings are placed under review for possible further downgrade. The downgrade incorporates Moody's heightened concern that Morris Publishing will continue to experience a soft advertising environment in most of its markets, especially in the hard-hit sub-prime Jacksonville, Florida market, where the company's largest property - The Florida Times -- Union, (accounting for more than 32% of Morris Publishing's 2007 sales) reported over a 20% decline in advertising sales for the year ending Dec. 31, 2007. The review for possible downgrade will assess management's plans to revitalize near-term profitability in the face of weakening sales, and its ability to cut costs (including fees paid to its owner for management and shared services, which totaled approximately $30 million for the LTM period ended Sept. 30, 2007). In addition, the review will consider the sufficiency of Morris Publishing's near-term liquidity, its ability to reduce leverage and comply with financial covenants (including a total leverage covenant which is scheduled to tighten to 5.5 times parent consolidated debt to EBITDA at the end of December 2008), and the level of asset protection provided to debt holders in light of the continuing erosion of newspaper market valuations. As a private company, controlled and managed by the Morris family, Morris Publishing and its parent Morris Communications do not provide any measure of board independence or any meaningful corporate governance provisions to protect debt holders. Moody's remains concerned about the significant level of inter-company transactions between Morris Publishing, Morris Communications and other subsidiaries of the ultimate holding company, Shivers Trading and Operating Company. Headquartered in Augusta, Georgia, Morris Publishing Group reported revenues of $374 million for the twelve-month period ending Dec. 31, 2007. Morris Publishing Group is a wholly owned subsidiary of Morris Communications, which also owns and operates periodicals, outdoor advertising, book publishing, commercial printing and radio broadcast properties. MORRIS PUBLISHING: Revenue Decline Cues S&P's Rating Cut to 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Morris Publishing Group LLC two notches to 'B' from 'BB-'. At the same time, Standard & Poor's lowered its ratings on the company's secured debt to 'BB-' from 'BB+' and its ratings on the company's subordinated debt two notches to 'CCC+' from 'B'. The corporate credit rating and issue-level ratings were removed from CreditWatch, where they were placed with negative implications on Feb. 7, 2008. The outlook is negative. "The downgrade reflects significant declines in revenue and EBITDA in Morris's newspaper business segment and the likelihood for further declines in the intermediate term," said Standard & Poor's credit analyst Liz Fairbanks. "The downgrade also reflects the possible near-term violation of the bank facility's financial maintenance covenants, among which the total leverage covenant tightens one turn to 5.5x on Dec. 31, 2008." In order to comply with this covenant, the company will have to meaningfully improve operations or find a mechanism to meaningfully reduce debt, possibly through the sale of additional assets. MOUNTAIN VIEW: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Mountain View Golf Properties, Inc. P.O. Box 926 Uniontown, PA 15401 Bankruptcy Case No.: 08-21600 Chapter 11 Petition Date: March 12, 2008 Court: Western District of Pennsylvania (Pittsburgh) Judge: Thomas P. Agresti Debtor's Counsel: Kevin Clancy, Esq. P.O. Box 926 Uniontown, PA 15401 Tel: (724)952-1098 Estimated Assets: $1 million to $100 million Estimated Debts: $100,000 to $500,000 The Debtor did not file a list of its largest unsecured creditors. NATIONAL CENTURY: Former Executives Guilty of Fraud and Conspiracy ------------------------------------------------------------------ A federal jury has found five former executives of National Century Financial Enterprises guilty of conspiracy, fraud and money laundering, following a six-week trial and less than two days of deliberation, Assistant Attorney General Alice S. Fisher and U.S. Attorney Gregory G. Lockhart of the Southern District of Ohio announced today. The Columbus, Ohio, jury returned the guilty verdict on all charges contained in a 27-count superseding indictment stemming from a scheme to deceive investors about the financial health of NCFE. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002. Donald H. Ayers, 71, of Fort Meyers, Florida, an NCFE vice chairman, chief operating officer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud and money laundering. Rebecca S. Parrett, 59, of Carefree, Arizona, an NCFE vice chairman, secretary, treasurer, director and an owner of the company, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering. Randolph H. Speer, 58, of Peachtree City, Georgia, NCFE's chief financial officer, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering. Roger S. Faulkenberry, 46, of Dublin, Ohio, a senior executive responsible for raising money from investors, was found guilty on charges of conspiracy, securities fraud, wire fraud and money laundering. James E. Dierker, 40, of Powell, Ohio, associate director of marketing and vice president of client development, was found guilty on charges of conspiracy and money laundering. "These convictions send a clear message to corporate America that executives will be brought to justice for lying to investors and misrepresenting the actions taken in their normal course of business," Deputy Attorney General Mark Filip, chairman of the President's Corporate Fraud Task Force," said. "These are the latest successes in our efforts to improve the integrity of our financial markets." "By holding accountable those who break the law, the convictions help restore some of the faith and trust the public loses every time corporate executives defraud their investors," Assistant Attorney General Alice S. Fisher said. "The jury's verdict demonstrates that the public will not stand by while company executives commit billion dollar frauds, leaving the honest investors to bear the losses they create. I would like to thank the trial attorneys from the Fraud Section and the U.S. Attorney's Office as well as the FBI, IRS, Immigration and Customs Enforcement and U.S. Postal Inspection Service for their diligent and successful work on this case." "The jury convicted company executives of building a financial house of cards and deceiving investors using financial sleight of hand," Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, said. "I commend the agents, investigators and prosecutors from the Fraud Section and our office for their hard work on this lengthy and complex case." "This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America," Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division, said. "The FBI continues to leverage its corporate fraud expertise gained through large-scale investigations such as Enron and WorldCom, to ensure that corporations represent their true health. From Dublin, Ohio, to Houston, Texas to New York, New York, the message is clear that the FBI will not stand by as corporate executives manipulate their financial statements and conceal illegal activities from criminal and regulatory authorities." "IRS aggressively pursues corporations and their officers who use their positions of trust for illegal activities," Eileen C. Mayer, chief, Internal Revenue Service Criminal Investigation, said. "This kind of fraud touches the lives of many unsuspecting citizens and the public should know that the government is serious about holding corporations and their executives accountable." At trial, the government presented evidence that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with an aggregate value of $4.4 billion, which evidence presented at trial showed were worth approximately six cents on the dollar at the time of NCFE's bankruptcy in November 2002. NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. The evidence at trial showed that NCFE advanced money to health care providers without receipt of the requisite accounts receivable, oftentimes to healthcare providers that were owned in whole or in part by the defendants. The evidence further showed that the defendants lied to investors and rating agencies in order to cover up this fraud. The evidence at trial showed that NCFE concealed from investors the shortfalls produced by this fraud by moving money back and forth between accounts, fabricating data in investor reports, incorporating false information into the accounting system, and making other false statements to investors and rating agencies. Moreover, the defendants' compensation was tied to the amount of money they advanced to healthcare providers and those providers' outstanding balance owed to NCFE. The government presented evidence at trial that showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents. Defendants face the following maximum penalties: Donald H. Ayers, 55 years in prison and $2.25 million in fines; Rebecca S. Parrett, 75 years in prison and $2.5 million in fines; Randolph H. Speer, 140 years in prison and $4.25 million in fines; Roger S. Faulkenberry, 85 years in prison and $2.5 million in fines; James E. Dierker, 65 years in prison and $1.75 million in fines. The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Trial Attorney Kathleen McGovern and Trial Attorney Wes R. Porter of the Fraud Section, with assistance from Fraud Section Paralegal Specialists Crystal Curry and Sarah Marberg, FBI agents Matt Daly, Ingrid Schmitt, and Tad Morris, IRS Inspectors Greg Ruwe and Mark Bailey, U.S. Postal Inspector Dave Mooney and ICE Agent Celeste Koszut. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust, is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. NELLSON NUTRACEUTICAL: Names Allan Lutz as Interim CEO & Director ----------------------------------------------------------------- Nellson Nutraceutical LLC appointed three new directors with experience in the food and consumer products sectors: Allan Lutz, Scott Meader and Hugh Rovit. Mr. Lutz also was named interim chief executive officer of the company. Mr. Lutz has more than 25 years of food-industry management experience. Prior to joining Nellson, he was president and chief operating officer for the foodservice division of ConAgra Foods, where he had responsibility for the unit's $3.6 billion portfolio of branded and customized food products. "Allan's appointment as a director further strengthens the board's experience in the food industry, and his operational experience and proven leadership ability make him an excellent choice to lead the company now," Scott Meader, chairman of the board of directors for Nellson, said. "The demand for nutritional products continues to grow, and Allan's insight and knowledge will be extremely valuable as we strengthen and expand Nellson's market position." "I am very pleased to be joining Nellson Nutraceuticals," said Mr. Lutz. "The company has many competitive strengths, and I am looking forward to working with the executive team and my fellow board members to grow the business." Mr. Lutz had led the foodservice business for ConAgra. Prior to joining ConAgra, Mr. Lutz was president of the foodservice unit of Nestle USA. In this role, he had responsibility for the entire foodservices business including the Nestle, Carnation and Stouffers brands. Mr. Lutz began his career with The Carnation Company in Boston. He is a graduate of Stonehill College in North Easton, Massachusetts. Mr. Meader served as president and CEO of Milnot Holding Corporation, a $220 million food company, until its sale last year and has more than 20 years of experience in the food industry. Mr. Rovit served as chairman of the Board of Atkins Nutritionals Inc. after its emergence from bankruptcy in January 2006. He is the CEO of Sure Fit Inc. a marketer and distributor of furniture covers and other home furnishings sold through retailers, internet companies and its own website and catalogue operations. "Nellson is setting the stage for renewed growth," Mr. Meader continued. "The company has an excellent reputation for quality, customer service and experience in its markets. And with the completion of its financial restructuring last year, it has a solid financial position and a strong group of shareholders, led by Goldman Sachs, Barclays, Citigroup and GE Capital, who are committed to its success." Mr. Lutz replaces Jeffrey B. Dias, who had served as chief executive officer of Nellson since January 2005. The board has retained Spencer Stuart, an executive-recruiting firm to lead the search for a permanent chief executive. "On behalf of the board of directors and our entire organization, I'd like to thank {Mr. Dias] for his tireless efforts and commitment to the company," Mr. Meader added. "We wish him every success in his future endeavors." About Nellson Nutraceutical LLC Headquartered in Irwindale, California, Nellson Nutraceutical Inc. formulates, makes and sells bars and powders for the nutrition supplement industry. The Debtor filed for chapter 11 protection on Jan. 28, 2006 (Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq., Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R. Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C. represent the Debtor in its restructuring efforts. Kurt F. Gwynne, Esq., and Thomas J. Francella, Jr., Esq., at Reed Smith LLP represent the Official Committee of Unsecured Creditors. In its Schedules of Assets and Liabilities, Nellson reported $312,334,898 in total assets and $345,227,725 in total liabilities. The Nellson Acquisition Company LLC, a group of eleven organizations that came together for the purpose of buying Nellson Nutraceutical Inc., acquired the company in a $153.5 million bid. The sale was completed on Oct. 1, 2007. NORTEL NETWORKS: Realigns Biz, Sends Jobs Offshore by 2009 ---------------------------------------------------------- Nortel Networks Corporation plans to abolish 2,100 jobs in the United States and United Kingdom and relegate another 1,000 jobs to India, China and Mexico by 2009, as part of its move to cut costs and restructure operations, Regina Anthony of Wall Street Journal reports. A greater number of the 1,000 jobs in contact center services, managed services and consulting areas will be delegated in India, WSJ reports. According to various reports, Nortel recorded net losses of $957 million for 2007 and net loss of $844 million in the quarter ended December. Wojtek Dabrowski cited that Nortel's shares slumped this week to CA$6.45 on the Toronto Stock Exchange, the lowest since 1981. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. * * * Nortel Networks Corp. still carries Moody's Investors Service's 'B3' Senior Unsecured Debt rating which was placed on March 22, 2007. NORTHEAST BIOFUELS: S&P Cuts Rating on $140 Mil. 2013 Loan to 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to 'B' from 'B+' on Northeast Biofuels LLC $140 million senior secured term loan due 2013. In addition, S&P placed the rating on CreditWatch with negative implications. The recovery rating remains unchanged at '3'. The company is building and will operate a 100 million- gallon-per-year dry-mill ethanol facility in Fulton, New York. "The downgrade results from long delays in construction, and subsequently, increased refinancing risk due to the shorter operating period before the debt matures," said Standard & Poor's credit analyst Grace Drinker. In December 2007, Northeast Biofuels entered into a waiver, consent, and amendment agreement with the project lenders to extend Northeast Biofuels' obligations for construction completion dates and to amend the J. Aron & Co. crush-margin hedging agreement and synthetic letter of credit commitment in conjunction with the hedging agreement. The amendment decreases revenues generated in 2008, reducing the expected debt amortization. As a result of the delay, Northeast Biofuels bought back the first two periods of call options to eliminate its exposure of payout while the plant is under construction. It has also reduced the amount of the synthetic LOC facility to $55 million from $65 million, accordingly. The completion dates were revised: -- Interim completion must occur on or before June 30, 2008 (originally Dec. 31, 2007); -- Substantial completion must occur on or before July 31, 2008 (originally Feb. 3, 2008); and -- Final completion must occur on or before Oct. 31, 2008. Construction delays result from numerous engineering and procurement issues. Lurgi, the EPC contractor, entered into a fixed-price contract with Northeast Biofuels, and Northeast Biofuels has paid all but about $3 million of the contract at this point. Liquidated damages have begun to accrue due to construction delays, and the contract is backed to a $12 million LOC. Based on the current construction schedule, Northeast Biofuels expects to receive the full amount of delay liquidated damages, capped at $7.5 million. An additional $3.6 million in liquidity is available from distributions from a funded incentive grant sub-account. This should be enough liquidity to cover an amended construction budget, with little room for additional cost overruns. Because all but $3 million of the fixed price contract has already been paid to Lurgi and there are still four months left to substantial completion, there is the risk that Lurgi may not complete the project due to increased costs. The contract is guaranteed by GEA AG, however the parent is not rated by Standard & Poor's and the guarantee does not disclose timeliness of payment, which is essential to servicing debt before construction is complete. The slightly increased operating costs and loss in revenues from starting the plant behind schedule has decreased amortization of the term loan during the hedged period to about 30% from about 40% under Standard & Poor's stress case. Higher early-term debt amounts also result in lower debt service coverage ratios in later years, and the total amount of debt amortized by the end of the life of the debt drops to 51% from 80% as previously projected, which increases refinancing risk. S&P expects to resolve the CreditWatch listing when the plant is substantially completed. S&P could lower the rating if further problems arise with Lurgi for completing the plant. A stable outlook may result if the plant is successfully completed. NORTHWEST AIRLINES: Court Denies Panel Advisors' Completion Fees ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York denied the request of Lazard Freres & Co. LLC, for allowance of a $3,250,000 completion fee, for its services as financial advisors for the Official Committee of Unsecured Creditors of Northwest Airlines Corp. In a separate decision, Judge Allan L. Gropper also denied the request filed by FTI Consulting Inc., financial advisors for the Creditors Committee, for a $1,000,000 completion fee. The Court noted that neither Lazard nor FTI Consulting included terms in their individual employment applications under which they would be entitled to receive a success or completion fee. Therefore, Judge Gropper said, only their rights to receive compensation for $275,000 per month, reimbursement for reasonable expenses and the "right to request a success or completion fee" are entitled to consideration under the "improvident standard" of Section 328(a) of the Bankruptcy Code. "Lazard and FTI received exactly what they bargained for -- the right to make a request," Judge Gropper maintained. "The Court gave both parties several opportunities to support their fee requests, allowed discovery, conducted a hearing and accepted any paper they chose to submit." However, neither professionals' application for a success or completion fee met the standards outlined under Section 330 of the Bankruptcy Court, the Court stated. Lazard Freres and FTI to Take an Appeal Lazard Freres & Co. LLC informs the Court that it will take an appeal to the U.S. District Court for the Southern District of New York from Judge Gropper's order dated Feb. 29, 2008, denying Lazard's request for a completion fee for $3,250,000, for services it rendered as financial advisors to the Committee. FTI Consulting, Inc., also informs the Court that it will take an appeal to the U.S. District Court for the Southern District of New York from Judge Gropper's order dated Feb. 29, 2008, denying FTI's request for a $1,000,000 modified completion fee, for services it rendered as financial advisors to Committee. Further, the Committee informs the Court that it will take an appeal to the U.S. District Court for the Southern District of New York from Judge Gropper's order dated Feb. 29, 2008, denying Lazard Freres and FTI Consulting's modified completion fees. About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). NORTHWEST AIRLINES: Balks at U.S. Bank's Lease Rejection Claim -------------------------------------------------------------- Northwest Airlines Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to expunge Claim No. 9841 filed by U.S. Bank, National Association, to the extent the Claim exceeds the damages permitted pursuant to an underlying lease agreement between the Debtors and First National Bank of Boston, as owner trustee. The Debtors and First National Bank of Boston entered into the Lease on April 1, 1987, pursuant to which the Debtors leased a Boeing 757-251 aircraft bearing registration number N524US. Subsequently, U.S. Bank succeeded First National Bank of Boston as Owner Trustee. Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP, in Washington, D.C., informs Judge Allan L. Gropper that the Lease is governed by New York law, and runs from July 15, 1987, through and including July 15, 2009. According to Mr. Ellenberg, the Debtors did not owe any rent under the Lease as of the Petition Date. Moreover, the Lease provides for a "stipulated loss value" calculated at $18,676,651, Mr. Ellenberg notes. Among other events, the Debtors' failure to pay rent or to generally perform any covenant or agreement under any operative document constitutes an Event of Default. The Leases provide for the remedies available to U.S. Bank upon the occurrence of an event of default by the Debtors: -- the right to demand return of the Aircraft; -- the right to sell, hold or re-let the Aircraft; -- liquidated damages consisting of past unpaid rent plus SLV less the fair market sales value for the Aircraft; -- liquidated damages for the loss of rent after the Aircraft is sold in an amount equal to the SLV less the sale proceeds received for the Aircraft; or -- the right to rescind the Lease. On the bankruptcy filing, the Debtors sought to reject the Lease. After the Court approved the lease rejection, U.S. Bank took possession of the Aircraft. U.S. Bank thereafter sold the Aircraft, Mr. Ellenberg relates. The Debtors do not know the sale price, he adds. U.S. Bank filed Claim No. 9841 on Aug. 15, 2006, demanding $15,916,571 in connection with the Debtors' rejection of the Lease. According to the claim form, Mr. Ellenberg notes, the amount requested is comprised of: (1) $18,767,993 SLV; plus (2) $698,337 in estimated fees and expenses; less (3) $3,549,759 corresponding to the purported discounted fair market rental value of the Aircraft for the duration of the Lease. U.S. Bank does not cite any specific Lease provision or supply other documentary support for its damages claim, Mr. Ellenberg points out. The Debtors dispute U.S. Bank's assertion that $3,549,759 represents the discounted fair market rental value of the Aircraft for the duration of the Lease. Industry publications, like the Airliner Price Guide reflect a fair market value of $8,900,000 for the Aircraft, Mr. Ellenberg informs the Court. This suggests that the fair market rental value for the duration of the Lease should be substantially in excess of $3,549,759, he adds. The Debtors also oppose U.S. Bank's estimated fee and expense claims because they are based on bare, "conclusory allegations", and are not substantiated by sufficient documentation demonstrating that U.S. Bank actually incurred the costs or that the costs were reasonable or justifiable, Mr. Ellenberg says. About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). NORTHWEST AIRLINES: Signs Settlement Agreement With IAM ------------------------------------------------------- Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, Northwest Airlines Corp. ask the U.S. Bankruptcy Court for the Southern District of New York to approve a settlement agreement with the International Association of Machinists and Aerospace Workers, AFL-CIO District Lodge 143, resolving: -- the IAM's Claim No. 8961; and -- any IAM prepetition grievances including the grievances listed and attached to Claim No. 8961 -- with the exception of Grievance #176534 relating to the termination of Miro Monghi. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, relates that the IAM filed Claim No. 8961 against the Debtors on August 14, 2006 -- asserting a claim for $10,020,665 -- for prepetition employment grievances against the Debtors. Under the terms of the Settlement, in full and final satisfaction of the Grievances: (a) Claim No. 8961 is liquidated and fixed at $3,000,000, and allowed as a general unsecured claim against the Debtors' estate; (b) IAM will also have a $1,000,000 allowed administrative expense claim, "as a result of the process under Section 1113(c) of the Bankruptcy Code", and certain ratified IAM restructuring letters of agreement. Any amount in excess of the Allowed Claims is disallowed in its entirety. Upon the Court's approval of the Settlement, the IAM will withdraw all of the Grievances. If the Settlement is approved by the Court, the Debtors will make a catch-up distribution on the Unsecured Claim, on the first business day that is at least 11 days after the approval, provided that there has been no appeal or stay of any order approving the Settlement. About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). NORTHWEST AIRLINES: FMR LLC Discloses 10.4% Equity Stake -------------------------------------------------------- In a regulatory filing with the United States Securities and Exchange Commission dated March 10, 2008, FMR LLC and Edward C. Johnson, III disclosed that at March 7, 2008, they each owned 24,330,232 shares of Northwest Airlines Corporation common stock. The individual holdings of FMR and Mr. Johnson each represent 10.409% of the total outstanding shares of Northwest. According to the SEC report, FMR has the sole power to vote or direct the vote of 880,993 shares, and the sole power to dispose of or to direct the disposition of the 24,330,232 shares it owns. Mr. Johnson has the sole power to dispose or to direct the disposition of the 24,330,232 shares he owns. Joseph Mari, on behalf of FMR, stated that various persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock of Northwest. However, Mr. Mari reported that no one person's interest in the Common Stock of Northwest is more than 5% of the total outstanding Common Stock. Fidelity Management & Research Company, a wholly-owned subsidiary of FMR, and an investment adviser registered under the Investment Advisers Act of 1940, is the beneficial owner of 24,222,998 shares or 10.363% of the Common Stock outstanding of Northwest, as a result of acting as investment adviser to various investment companies -- the Funds -- registered under the Investment Company Act of 1940, Mr. Mari explained. Mr. Johnson and FMR, through its control of Fidelity and the Funds, each has sole power to dispose of the 24,222,998 shares owned by the Funds. According to Mr. Mari, members of the family of Mr. Johnson, chairman of FMR, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR, representing 49% of the voting power of FMR. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR. Neither FMR nor Mr. Johnson, has the sole power to vote or direct the voting of the shares owned directly by the Fidelity Funds, which power resides with the Funds' Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the Funds' Boards of Trustees. Pyramis Global Advisors Trust Company, an indirect wholly-owned subsidiary of FMR and a bank as defined in the Securities Exchange Act of 1934, is the beneficial owner of 92,632 shares or 0.040% of the outstanding Common Stock of the Northwest, as a result of its serving as investment manager of institutional accounts owning the shares. Mr. Johnson and FMR, through its control of Pyramis Global Advisors Trust Company, each has sole dispositive power over 92,632 shares and sole power to vote or to direct the voting of 51,191 shares of Common Stock owned by the institutional accounts managed by PGATC. FIL Limited, formerly known as Fidelity International Limited, and various foreign-based subsidiaries, provide investment advisory and management services to a number of non-U.S. investment companies and certain institutional investors. FIL is the beneficial owner of 14,602 shares or 0.006% of the Common Stock outstanding of Northwest. Partnerships controlled predominantly by members of the family of Mr. Johnson, chairman of FMR and FIL, or trusts for their benefit, own shares of FIL voting stock with the right to cast approximately 47% of the total votes which may be cast by all holders of FIL voting stock. FMR and FIL are separate and independent corporate entities, and their Boards of Directors are generally composed of different individuals. FMR and FIL are of the view that they are not acting as a "group" for purposes of Securities Exchange Act of 1934, and that they are not otherwise required to attribute to each other the "beneficial ownership" of securities "beneficially owned" by the other corporation within the meaning of Rule 13d-3 promulgated under the 1934 Act, Mr. Mari said. Therefore, they are of the view that the shares held by the other corporation need not be aggregated for purposes of Section 13(d). However, FMR made the SEC filing on a voluntary basis, as if all of the shares are beneficially owned by FMR and FIL on a joint basis, Mr. Mari further explained. About Northwest Airlines Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/-- is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about 1,400 daily departures. Northwest is a member of SkyTeam, an airline alliance that offers customers one of the world's most extensive global networks. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents. Northwest and its travel partners serve more than 1000 cities in excess of 160 countries on six continents, including Italy, Spain, Japan, China, Venezuela and Argentina. The company and 12 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq., at Cadwalader, Wickersham & Taft LLP in Washington represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has retained Akin Gump Strauss Hauer & Feld LLP as its bankruptcy counsel in the Debtors' chapter 11 cases. When the Debtors filed for bankruptcy, they listed $14.4 billion in total assets and $17.9 billion in total debts. On Jan. 12, 2007 the Debtors filed with the Court their Chapter 11 Plan. On Feb. 15, 2007, they Debtors filed an Amended Plan & Disclosure Statement. The Court approved the adequacy of the Debtors' Disclosure Statement on March 26, 2007. On May 21, 2007, the Court confirmed the Debtors' Plan. The Plan took effect May 31, 2007. (Northwest Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). OZBURN-HESSEY HOLDING: Moody's Holds B3 Ratings on Revenue Growth ----------------------------------------------------------------- Moody's affirmed the B3 Corporate Family and Probability of Default Ratings of Ozburn-Hessey Holding Company, LLC. Additionally, the B1 rating on Ozburn-Hessey's senior secured credit facilities has been affirmed, while the Loss Given Default rating changed to LGD-3 from LGD-2. The affirmation acknowledges Ozburn-Hessey's revenue growth being above plan for 2007 and incorporates an expectation of some cash flow improvement in 2008. The ratings continue to reflect: 1.) low tolerance for deterioration in interest coverage below 1.0 times; 2.) concerns regarding the company's working capital management and overall liquidity profile; 3.) concerns regarding ongoing challenges to improve margins; 4.) concerns regarding under-performance at Turbo Logistics, which was acquired in July 2006. It is noted that the business environment is likely to remain difficult given the weak 2008 U.S. economic growth outlook, particularly the outlook for truck transportation and related services. Should there be a shortfall in the company's performance versus Moody's expectations, the ratings outlook and/or the ratings could be revised downward. Ozburn-Hessey Holding Company, LLC, headquartered in Nashville, TN, is a provider of third-party logistics and related services, including warehouse management, truck brokerage, customs brokerage, freight forwarding, and dedicated contract carriage. Ozburn-Hessey is a wholly-owned subsidiary of OHH Acquisition Corporation, which is controlled by private equity group Welsh, Carson Anderson & Stowe. Ozburn-Hessey had FY2007 gross revenue of approximately $700 million. PAQUETTE MAINTENANCE: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Paquette Maintenance, Inc. 2224 West 94th Street Bloomington, MN 55431 Bankruptcy Case No.: 08-41106 Type of Business: The Debtor is a maintenance and supply company. Chapter 11 Petition Date: March 12, 2008 Court: District of Minnesota (Minneapolis) Judge: Nancy C. Dreher Debtor's Counsel: Thomas G. Wallrich, Esq. (twallrich@hinshawlaw.com) Hinshaw & Culbertson, LLP 333 South Seventh Street, Suite 2000 Minneapolis, MN 55402 Tel: (612) 333-3434 http://www.hinshawlaw.com/ Total Assets: $705,277 Total Debts: $1,394,703 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Withholding Taxes $120,000 Wells Fargo Place and penalties 30 East 7th Street Mail Stop 5700 Saint Paul, MN 55101 Wells Fargo Credit Card $52,832 P.O. Box 5914 Sioux Falls, SD 57117 Acky-Bloomington Rent and Late Fees $42,306 3033 Excelsior Boulevard, Suite 10 Minneapolis, MN 55416 Lagasse, Inc. Lawsuit $41,188 Minnesota Unemployment Interest, late fees $29,350 and unemployment tax Minnesota Department of Sales and Use tax $24,369 Revenue Unisource $23,018 John A. Halpern & Associates Legal Fees $18,533 Chase Credit Card $16,824 Technology Insurance Co. Worker's Compensation $13,651 Insurance Holiday Companies Gasoline for Vans $11,552 Medica Health Insurance $10,751 Policy US Bank Credit Card $7,603 Custom Plastic Laminates Accounts Payable $7,554 Minnesota OSHA $7,320 Hirschfield's Lathrop Paint $4,487 Capital One Credit Card $4,254 Johnson Giere Legal Fees $4,000 Aztec Products $3,424 Sherwin Williams Lawsuit $3,032 PARADISE MUSIC: Closes $179K Debt Financing with Leaddog Capital ---------------------------------------------------------------- Paradise Music & Entertainment Inc. disclosed the closing of $179,300 in supplemental debt financing. On March 3, Paradise Music entered into an agreement concerning convertible debentures for its operating subsidiary, Environmental Testing Laboratories Inc., with Leaddog Capital L.P. for the issuance by Paradise to Leaddog of a $179,300 convertible debenture. Leaddog had loaned the $179,300 to Environmental Testing Laboratories, Inc., which used the net proceeds to pay off some of its higher-interest rate indebtedness. The convertible debenture requires payments of $7,500 per month, beginning Sept. 1, 2008. The convertible debenture matures on Feb. 28, 2010 and is convertible into Paradise Common Stock at the option of Leaddog under certain terms. Interest on the convertible debenture accrues at 14% per year and is payable in cash or shares of Common Stock, at the option of Paradise. Any outstanding principal and interest on the maturity date will be automatically converted into shares of Common Stock. Paradise's obligations under the convertible debenture are secured by the assets of ETL, subordinated to the senior lender. "We are very pleased to have partnered with Leaddog for this lower-cost financing and look forward to expanding our relationship," Dick Rifenburgh, CEO of Paradise, commented. "Leaddog is excited about working with Paradise and its environmental business," Chris Messalas, managing partner of Leaddog Capital L.P. and CEO of Clayton Dunning Group Inc. said. "We look forward to a long and exciting relationship." About Paradise Music & Entertainment, Inc. Paradise, through its wholly-owned operating subsidiary Environmental Testing Laboratories, Inc., provides a wide range of environmentally-related laboratory testing services. ETL operates profitably in the nationwide $1.8 billion a year, environmental testing industry. Expanding ETL's environmental testing business is a focal point for ETL. About Paradise Music Paradise Music & Entertainment Inc. (Other OTC: PDSE.PK) is a diversified holding company which, through its wholly owned subsidiary, Environmental Testing Laboratories Inc., operates in the environmental testing industry. The company is seeking to attract and subsequently acquire additional companies operating in the environmental testing industry and manufacturing industries. The company operates offices in New York and Colorado. * * * As reported in the Troubled Company Reporter on April 25, 2007, Tinter Scheifley Tang LLP, in Denver, expressed substantial doubt about Paradise Music & Entertainment Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2005, and 2004. The auditing firm pointed to the company's loss from operations and working capital and stockholders' deficits. PILGRIM'S PRIDE: Plant Closing Won't Affect S&P's 'BB-' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings and outlook on Pilgrim's Pride Inc. (BB-/Negative/--) will not be affected by the company's announcement that it will close a chicken processing plant and six distribution centers, which represent about 1.5% of the company's capacity and less than 0.5% of the industry's capacity. This action will result in the elimination of about 1,100 jobs, and S&P expects a pretax charge of about $35 million. Standard & Poor's will continue to closely monitor the effect of higher grain costs on Pilgrim's Pride operating performance and its related effect on financial measures. PERFORMANCE TRANSPORTAION: Cancels Auction Sale Scheduled March 14 ------------------------------------------------------------------ Performance Transportation Service Inc., and its 13 debtor- affiliates and subsidiaries inform parties-in-interest that: -- the auction for all or substantially all of their assets scheduled for today, will not take place; and -- the March 18 hearing to consider approval of the assets sale will not go forward. Julia S. Kreher, Esq., at Hodgson Russ LLP, in New York, explains the sale process has been canceled because the Debtors did not receive at least two qualified bids prior to the March 11 bid deadline. As previously reported, the Debtors named Black Diamond Capital Management L.L.C., as a qualified bidder for their assets. Bidders were required to submit bids that must exceed the stalking horse bidder's offer by $500,000 plus the stalking horse bidder's break-up fee, which would not exceed $1,250,000. The Debtors previously said they will divulge the identity of the stalking horse bidder, if any, to potential buyers and key constituents by March 5. Allied Holdings Inc., now known as Allied Systems Holdings Inc., did not state whether it would re-join the bidding for the Debtors' assets. Allied had offered to purchase PTS' assets for $67,000,000 but later retracted its bid in December 2007. The Automobile Transport Chauffeurs Demonstrators and Helpers Union, Teamsters Local 604, nonetheless, had said they would vigorously oppose to the sale if Allied joins the bidding on grounds that a merger with PTS, absent the union members' consent, would violate Allied's substantially consummated plan of reorganization. About Performance Transportation Performance Transportation Services Inc. is the second largest transporter of new automobiles, sport-utility vehicles and light trucks in North America, and operates under three key transportation business lines including: E. and L. Transport, Hadley Auto Transport and Leaseway Motorcar Transport. The company and 13 of its affiliates previously filed for Chapter 11 protection on Jan. 25, 2006 (Bankr. W.D.N.Y. Lead Case No. 06- 00107). The Court confirmed the Debtors' plan on Dec. 21, 2006, and that plan became effective on Jan. 29, 2007. Garry M. Graber, Esq. of Hodgson, Russ LLP and Tobias S. Keller, Esq. of Jones Day represented the Debtors in their restructuring efforts. When the Debtor filed for protection from their creditors it reported more than $100,000,000 in total assets. It also disclosed owing more than $100,000,000 to at most 10,000 creditors, including $708,679 to Broadspire and $282,949 to General Motors of Canada Limited. The company and its debtor-affiliates filed their second Chapter 11 bankruptcy on Nov. 19, 2007 (Bankr. W.D.N.Y. Case Nos: 07-04746 thru 07-04760). Tobias S. Keller, Esq., at Jones Day, represents the Debtors. Garry M. Graber, Esq., at Hodgson, Russ LLP, serve as the Debtors' local counsel. The Debtors' claims and balloting agent is Kutzman Carson Consultants LLC. The Debtors have until March 18, 2008, to file a plan of reorganization. (Performance Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). PLASTECH ENGINEERED: Chrysler Wants District Court to Study Appeal ------------------------------------------------------------------ Chrysler LLC asks the U.S. District Court for the Eastern District of Michigan to find out if the tool dispute rulings given by the Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan were in error. As reported in the Troubled Company Reporter on March 4, 2008, Chrysler LLC, Chrysler Motors Company LLC, and Chrysler Canada Inc., took an appeal under 28 U.S.C. Section 158(a) before the District Court from the orders of Judge Shefferly that denied: i) the lifting of the automatic stay to allow Chrysler to regain possession of tooling located in Plastech Engineered Products Inc. and its debtor-affiliates' plants; and ii) issuance of a preliminary injunction in connection with the proposed recovery of tooling equipment. Judge Shefferly said in a court opinion that the Debtors needed to keep the tooling equipment to faciliate them in their reorganization. The balancing of interests favored Plastech, the Court said. The Court affirmed the Debtors' contentions that the automatic stay applies to both the tooling paid by Chrysler and the tooling that Chrysler has not paid for. In addition, the Court was convinced that if Chrysler takes immediate possession of the tooling, the Debtor will not be able to continue to provide parts uninterrupted to its other major customers and therefore any prospect of an effective reorganization will be lost. The Chrysler Group therefore asks the District Court to determine whether the Bankruptcy Court: -- erred in concluding that the Debtors' mere possession of certain tooling was sufficient to invoke the automatic stay under Section 362(a) of the Bankruptcy Code, where the Court agreed with Chrysler that it has a right to immediate possession of the tooling and where established caselaw provides that possession of property is sufficient to invoke the automatic stay only if there is some right of possession, i.e., "a good-faith, colorable claim to possession;" -- abused its discretion in denying Chrysler's motion to lift the automatic stay, where Chrysler established grounds to lift the stay under both Section 362(d)(1) ("cause" to lift the stay) and Section 362(d)(2) (debtor does not have equity in the property and the property is not "necessary to an effective reorganization"); -- clearly erred in finding that Chrysler did not demonstrate "cause" under Section 362(d)(1) of the Bankruptcy Code to lift the automatic stay and allow Chrysler to immediately recover its tooling, where the Bankruptcy Court relied solely on the "early stages" of the case as a basis to disregard what the court acknowledged as Chrysler's clear and unambiguous contractual rights; -- erred in finding that there was no "cause" to lift the automatic stay, and that Chrysler's tooling was "necessary" to the Debtors' "effective reorganization," where the continued possession of such tooling (as opposed to the receipt of revenue from Chrysler resulting from the production of component parts) would have no financial impact on the Debtor and would not avoid the financial harm on which the Bankruptcy Court relied in reaching its decision; -- clearly erred in permitting the Debtors to hold Chrysler' tooling hostage and, as a result, compelling Chrysler to continue purchasing component parts from the Debtors against its will; -- abused its discretion in denying Chrysler's request for injunctive relief, where the court agreed with Chrysler that it had a likelihood of success on the merits with respect to its right to demand possession of the tooling, and where Chrysler further demonstrated that: (a) without an injunction it will suffer irreparable harm in the form of immediate plant closures and loss of goodwill if it does not accede to the Debtors' financial demands; (b) such harm outweighs any potential harm to the Debtors if an injunction were to issue, and; (c) an injunction would serve the public interest by preventing the Debtors from using their Chapter 11 bankruptcy filing as a means of holding Chrysler's tooling hostage to extract financial accommodations from Chrysler; -- erred in relying on Chrysler's alternative request for specific performance under its contracts with the Debtors as a basis for denying Chrysler's request for injunctive relief, where Chrysler's entitlement to specific performance was irrelevant to Chrysler's request for immediate possession of its tooling; -- clearly erred in finding that Chrysler could not show irreparable injury in the absence of an injunction since any resulting damages to Chrysler "are compensable by money," where the court failed to consider the fact that the Debtors' insolvency renders it unlikely that Chrysler could ever recover damages, and where the Court also disregarded the evidence presented by Chrysler as to the catastrophic harm it will suffer from an interruption in the supply of parts to its plants, including irreparable harm to Chrysler's goodwill with its other suppliers and customers, that is difficult, if not impossible, to calculate; -- clearly erred in relying on purported harm to the Debtors' other Major Customers to justify its denial of Chrysler's request for relief from the automatic stay and for immediate possession of its tooling, where the testimony and evidence revealed that: (a) the tooling is used only to produce parts for Chrysler; (b) any harm to the Debtors would consist solely of a loss of revenue from the inability to continue to produce parts for Chrysler, and; (c) that the Debtors' other Major Customers, including General Motors Corporation, Ford Motor Company, and Johnson Controls, Inc., all supported Chrysler's right to immediate possession of its tooling; -- erred as a matter of law in relying on the so-called "policy considerations of Chapter 11" to trump Chrysler's contract rights under state law and to allow the Debtors to effectively hold Chrysler's tooling hostage to extract financial concessions, even though the court acknowledged that: (a) Chrysler's contracts with the Debtors "are clear and unambiguous in conferring upon Chrysler the right to take immediate possession of the tooling," and; (b) that Chrysler will suffer harm "either by having to contribute additional financial accommodations to the Debtors, or by having to shut down certain of its assembly lines and idle certain of its workers if it does not obtain the tooling." The documents were submitted to District Court by Michael C. Hammer, Esq., at Dickinson Wright PLLC, in Ann Arbor, Michigan, on behalf of Chrysler Motors Company, LLC, and Chrysler Canada. 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. 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. (Plastech Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: GM Wants to Take Tools Too, If Delivery Stops ------------------------------------------------------------------ General Motors Corporation seeks relief from the automatic stay under Section 362(d) of the U.S. Bankruptcy Code to allow it to recover certain equipment in the event Plastech Engineered Products, Inc. and its debtor-affiliates fail to produce component parts for GM vehicles. General Motors has provided to the Debtors via bailment, certain supplies, materials, tools, jigs, dies, gauges, fixtures, molds, patterns, equipment and other items to enable the Debtors to manufacture parts unique to GM's vehicles. On Feb. 12, 2007, and January 22, 2008, Plastech entered into Financial Accommodation Agreements with GM and other major customers. Under the Agreements, GM provided significant accommodations to Plastech, including a payment of $11,500,000 beyond GM's otherwise existing contractual obligations to the company. In exchange, Plastech agreed to grant immediate possessory rights to tooling paid by the Major Customers. GM did not disclose the value of tooling in the Debtors' possession that it had paid for. Scott A. Wolfson, Esq., at Honigman Miller Schwartz and Cohn LLP, in Detroit, Michigan, informs the U.S. Bankruptcy Court for the Eastern District of Michigan that GM has strongly supported Plastech through financial and other accommodations, and will continue its discussions with Plastech and others in pursuit of the Debtors' efforts to emerge from Chapter 11 as competitive, viable suppliers or, if a reorganization is not possible, to effectuate an orderly wind-down, respectful of the interests of all customers and other constituents. However, the uncertainties confronting Plastech are self-evident, Mr. Wolfson avers. He notes that Plastech has only obtained a limited amount and duration of its debtor-in-possession loan and has already advised GM that it plans to close four facilities where GM component parts are made. According to Mr. Wolfson, GM must prepare for contingencies and circumstances in which Plastech cannot or otherwise fails to deliver components to GM on a timely basis, thereby placing GM's assembly operations in jeopardy with consequential prejudice and actual harm to GM, its over 100,000 employees and those persons and entities who rely upon and engage in business with GM. Mr. Wolfson asserts that GM's request for a lifting of the stay under Section 362(d) is necessary so that GM could prepare for resourcing in the event that Plastech is no longer able to provide GM with the parts it needs for its manufacturing processes. "As the Court has recognized, any failure by Plastech to supply component parts to a major customer such as GM would result in disruptions to assembly lines within hours, which would be followed by layoffs and substantial damages," Mr. Wolfson states. Mr. Wolfson notes that: -- In its ruling on a motion from relief from stay filed by Chrysler, LLC, the Court recognized that Plastech has no equity in the tooling by virtue of certain tooling acknowledgments to which Chrysler and GM were both parties; and -- Granting GM's request will not adversely affect any reasonable likelihood of Plastech's pursuit of a successful conclusion to its Chapter 11 cases. GM proposes that modification of the automatic stay be only allowed when Plastech is either (i) by its own statement or actions, unwilling or (ii) unable to continue to supply specific component parts under the terms of governing purchase orders, as a result of which the certain tooling will be unnecessary to future prosecution of the Chapter 11 cases. GM asks the Court to enter an order allowing it to enforce its non-bankruptcy rights in state court to: (1) recover possession of all Tooling associated with a rejected Production Purchase Order immediately upon the rejection of any Production Purchase Order; (2) recover possession of all Tooling associated with a facility that Debtors notify GM of their intent to close; (3) recover possession of all Tooling upon the expiration of financing for Debtors in the absence of a final, non- appealable order approving further financing for the Debtors; and (4) recover possession of all Tooling associated with a Component Part in the event Debtors are unable to supply GM its requirements of that Component Part under the terms of the Production Purchase Orders. About General Motors Based in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on Feb. 28, 2008, Fitch Ratings has affirmed the Issuer Default Rating of General Motors at 'B', with a Rating Outlook Negative. As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. 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. (Plastech Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Seeks Additional $14 Mil. Interim Financing ---------------------------------------------------------------- Plastech Engineered Products, Inc., and its debtor-affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to obtain additional interim financing. The Debtors want financing of up to $14,000,000 above the existing cap on aggregate outstandings at any time, or up to an aggregate amount of $49,151,000, from the DIP Lenders to continue their business operation beyond March 14, 2008, and up to the final hearing on the DIP financing on April 2, 2008. The Debtors have requested a postponement of the Final DIP Hearing from March 14 to April 2, 2008. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, explains that due to the complexity of the proposals receive for longer term financing and the conditions precedent to its consummation, however, the financing could not be finalized and approved at the March 14 hearing. Mr. Galardi reports that the additional $14,000,000 requested , pursuant to a third amendment to Post-Petition Loan and Security agreement with Bank of America, N.A., as agent, will get the Debtors beyond March 14, 2008 until the time they expect to finalize a more favorable DIP financing facility. Mr. Galardi avers that the Debtors continue to experience liquidity shortfalls and, despite continued efforts, have not yet been able to finalize a commitment by any party to provide a long-term DIP financing. The Debtors believe that the interim financing and a more favorable final financing, for which they will seek approval on April 2, 2008, will further stabilize their operations, continue to retain employees, restore critical relationships, facilitate their ability to secure trade terms, and, to finalize the terms of the funding necessary to formulate a restructuring plan. Mr. Galardi adds that the present DIP lenders have agreed to extend the additional liquidity provided that the Debtors' major customers jointly and severally, unconditionally and absolutely guarantee to the DIP lenders, and cash collateralize the due and punctual payment and discharge of the $6,000,000 of the $14,000,000 requested. In addition, the terms of the Third Amended DIP Credit Facility provides that the Major Customers will pay $26,700,000 in prepetition receivables to the Debtors, which payment will be applied to the outstanding prepetition debt held by BofA, on behalf of the prepetition lenders who provided the Debtors with a $200,000,000 Revolving Credit Facility entered into on Feb. 12, 2007. The Debtors propose to pay the DIP Lenders a "relatively modest fee" in connection with the interim financing. The Debtors paid the DIP Lenders $100,000 for the prior extension. The Debtors will use the amounts loaned from the DIP Lenders in accordance with a budget, a copy of which is available for free at http://researcharchives.com/t/s?291a A full-text copy of the proposed Third Amended DIP Credit Agreement is available for free at: http://researcharchives.com/t/s?291b The DIP Lenders are: Pro Rata Share of Commitments -------------- Bank of America, N.A. 25.0% Comerica Bank 7.5% Wachovia Capital Finance Corp. 25.0% Wells Fargo Foothill, Inc. 20.0% General Electric Capital Corp. 2.5% PNC Bank, N.A. 12.5% Fifth Third Bank 7.5% ------ Total 100.0% At the Debtors' request, the Court will convene a hearing on shortened notice on March 14, 2008, to consider approval of the the additional financing. The Debtors cited that immediate and irreparable harm will result if the emergency motion is not heard on an expedited basis, and that the shortened notice will not prejudice the parties-in-interest. 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. (Plastech Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRB ENERGY: Section 341(a) Creditors' Meeting Set for March 31 -------------------------------------------------------------- The United States Trustee for Region 19 will convene a meeting of the creditors of PRB Energy Inc. and its debtor-affiliates on March 31, 2008, 9:00 a.m. at Room 104, U.S. Custom house, 721 19th Street, in Denver, Colorado. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About PRB Energy Headquartered in Denver, PRB Energy, Inc., formerly PRB Gas Transportation Inc. -- http://www.prbenergy.com/-- operates as independent energy company engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, the company and its affiliates provide gas gathering, processing and compression services for properties it operates and for third-party producers. They conduct business activities in Wyoming, Colorado and Nebraska. The Debtor filed for chapter 11 protection on March 5, 2008 (Bankr. D. Co. Case No. 08-12658) together with two affiliates, PRB Oil & Gas Inc. (Case No. 08-12661) and PRB Gathering Inc. (08- 12663). James T. Markus, Esq., at Block, Markus & Williams LLC represents the Debtors in their restructuring efforts. The Debtors listed assets between $50 million and $100 million and liabilities between $10 million and $50 million. They owe at least $1 million each to four unsecured creditors. PRB ENERGY: Obtains Interim Nod to Employ Block Markus as Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Colorado has granted PRB Energy Inc. and its debtor-affiliates, permission, on an interim basis, to employ Block Markus & Williams LLC as their bankruptcy counsel, nunc pro tunc to March 5, 2008. As the Debtors' bankruptcy counsel, BMW is expected to: a) provide the Debtors with advice, represent the Debtors, and prepare all necessary documents on behalf of the Debtors, in the areas of corporate, real estate, employee benefits, business and commercial litigation, debt restructuring, bankruptcy and, if requested, asset dispositions; b) take all necessary actions to protect and preserve the Debtors' estates during the pendency of its Chapter 11 case, including the prosecution of actions by the Debtors, the defense of actions commenced against the Debtors, negotiations concerning all litigation in which the Debtors are involved and the objection to claims filed against the estates; c) prepare, on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports and papers in connection with the administration of these Chapter 11 cases; d) counsel the Debtors with regard to their rights and obligations as debtors in possession; e) negotiate, prepare and seek confirmation of one or more plans of reorganization for the Debtors and undertake to cause them to become effective in accordance with their terms; and f) perform all other necessary legal services. Prior to bankruptcy filing, BMW received a security retainer from the Debtors in the amount of $5,000 on Feb. 7, 2008, and an additional $100,000 on Feb. 22, 2008, for services to be rendered on behalf of the Debtors both prior to and in these Chapter 11 cases. BMW expended a portion of the security retainer for services and costs perpetition, including filing fees. The remaining funds totaling approximately $29,742 has been retained in BMW's trust account. As compensation for their services, BMW's professionals bill: Professional Hourly Rate ------------ ----------- James T. Markus, Esq. $335 John F. Young, Esq. $335 Donald D. Allen, Esq. $275 Paralegals $75-$90 John F. Young, a member of BMW, assured the Court that the firm does not hold or represent any interest adverse to the Debtors or their estates, and is a "disinterested person" as such term is defined under Section 101(14) of the bankruptcy code. Mr. Young can be reached at: John F. Young, Esq. Block, Markus, Williams LLC 1700 Lincoln Street Suite 4000 Denver, CO 80203 Tel: (303) 830-0800 Fax: (303) 830-0809 email: jyoung@bmwllc.com About PRB Energy Headquartered in Denver, PRB Energy, Inc., formerly PRB Gas Transportation Inc., -- http://www.prbenergy.com/-- operates as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, the company and its affiliates provide gas gathering, processing and compression services for properties it operates and for third-party producers. They conduct business activities in Wyoming, Colorado and Nebraska. The Debtor filed for chapter 11 protection on March 5, 2008 (Bankr. D. Co. Case No. 08-12658) together with two affiliates, PRB Oil & Gas Inc. (Case No. 08-12661) and PRB Gathering Inc. (08- 12663). James T. Markus, Esq., at Block, Markus & Williams LLC represents the Debtors in their restructuring efforts. The Debtors listed assets between $50 million and $100 million and liabilities between $10 million and $50 million. They owe at least $1 million each to four unsecured creditors. PRB ENERGY: Gets Interim Nod to Employ Heppenstall as Oil Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Colorado has granted authority to PRB Energy Inc. and its debtor-affiliates to employ, on an interim basis, Heppenstall & Savage LLC as their oil and gas counsel, nunc pro tunc to March 5, 2008. The Debtors selected Heppenstall & Savage because of the firm's extensive experience and knowledge regarding the oil and gas issues facing the Debtors. As the Debtors' oil and gas counsel, Heppenstall & Savage is expected to perform and provide assistance and advice to the Debtors on, among other things, matters of oil and gas law and law relating to the petroleum based assets and businesses operated by the Debtors. As compensation for their services, Heppenstall Savage's professionals will bill: Professional Hourly Rate ------------ ----------- Edward M. Heppenstall, Esq. $300 Charles F. Savage, Esq. $300 Prior to the initiation of these Chapter 11 cases, Heppenstall and Savage received a security retainer in the amount of $5,000. The Debtors owe the firm approximately $7,000 for prepetition services. Charles F. Savage, an attorney with the law firm of Heppnstall & Savage, assured the Court that the firm does not hold or represent and interest adverse to the Debtors or their estates and the firm is a "disinterested person" as such term is defined under Section 101(14) of the bankruptcy code. Mr. Savage can be reached at: Charles F. Savage, Esq. Heppenstall & Savage LLC 155 S. Madison Street Suite 326 Denver, CO 80209 Tel: (303) 377-2700 Fax: (303) 377-2003 About PRB Energy Headquartered in Denver, PRB Energy, Inc., formerly PRB Gas Transportation Inc., -- http://www.prbenergy.com/-- operates as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, the company and its affiliates provide gas gathering, processing and compression services for properties it operates and for third-party producers. They conduct business activities in Wyoming, Colorado and Nebraska. The Debtor filed for chapter 11 protection on March 5, 2008 (Bankr. D. Co. Case No. 08-12658) together with two affiliates, PRB Oil & Gas Inc. (Case No. 08-12661) and PRB Gathering Inc. (08- 12663). James T. Markus, Esq., at Block, Markus & Williams LLC represents the Debtors in their restructuring efforts. The Debtors listed assets between $50 million and $100 million and liabilities between $10 million and $50 million. They owe at least $1 million each to four unsecured creditors. PRB ENERGY: Wants Court's OK to Use Creditors' Cash Collateral -------------------------------------------------------------- PRB Energy Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Colorado for authority to access cash collateral of certain secured creditors until May 3, 2008. The Debtors say that they have an urgent need to use cash collateral to avoid immediate and irreparable harm. The Debtors delivered a weekly budget to the Court. The Debtors relate that before they filed for Chapter 11 protection on March 5, 2008, they obtain $300,000 loan from PRB Funding LLC, of which PRB Funding's advances are secured by a junior lien and security interest in substantially all of the Debtors' assets. In addition, proceeds of the loan by PRB Funding were deposited into an account at Colorado State Bank, the Debtors relates. No other lender has a perfected security interest in those funds. On Dec. 28, 2006, the Debtors sold $15,000,000 of debentures, comprised of two $7,500,000 of debentures. Half of the debenture is held by DKR Soundshore Oasis Holding Fund Ltd. and the remaining is with West Coast Opportunity Fund LLC. A full-text copy of the Debtors' weekly budget is available for free at http://ResearchArchives.com/t/s?2915 About PRB Energy Headquartered in Denver, Colorado, PRB Energy Inc. fka PRB Gas Transportation Inc. -- http://www.prbenergy.com-- operate as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, they provide gas gathering, processing and compression services for properties it operates and for third- party producers. They conduct business activities in Wyoming, Colorado and Nebraska. The company filed for Chapter 11 protection March 5, 2008 (Bankr. D. Col. Lead Case No.08-12658). James T. Markus, Esq., at Block, Markus & Williams, LLC, represents the Debtors' in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in these cases. When the Debtors filed for protection against their credtors, they listed assets between $50 million to $100 million and debts between $10 million to $50 million. PROVIDENCE SERVICE: To Register Shares of Common Stock with SEC --------------------------------------------------------------- The Providence Service Corporation intends to file a "shelf" registration statement for shares of its common stock on Form S-3 with the Securities and Exchange Commission. Providence anticipates that it will file the proposed shelf registration statement immediately after the filing of its Annual Report on Form 10-K for the Year ended Dec. 31, 2007; however, it has no immediate plans to raise capital thereunder. Assuming it is declared effective by the SEC, the proposed shelf registration statement would enable Providence to sell, directly to one or more investors, or to or through one or more underwriters or dealers, and/or through agents, from time to time, shares of its common stock for aggregate proceeds of up to $175 million. Registration of shares of common stock under the proposed shelf registration statement will allow the company to register shares in advance and provide it with the flexibility to offer the shares when market conditions are favorable or when financing needs arise. The registration of shares thereunder would not, however, mean that Providence would ever necessarily offer or sell such shares. Further, even if the proposed shelf registration statement is filed, and subsequently declared effective by the SEC, each offering, if any, that Providence determines to make pursuant to the proposed shelf registration statement would require a prospectus supplement to be filed with the terms of that offering, including, among other things, the number and price of the shares to be offered, before any such offering or sales thereunder could be made. In addition, any draw-down under the shelf registration statement will only be done with the advance approval of Providence's board of directors. Providence anticipates that the net proceeds from sales, if any, of common stock pursuant to the proposed shelf registration statement will be added to its general funds and used for general corporate purposes, which could include, among other things, reducing or refinancing its indebtedness, for example, Providence's current credit and guaranty agreement with CIT Healthcare LLC, or CIT, requires Providence, while any amounts are outstanding under such credit facility, to use half of any proceeds it receives from the sale of its equity securities to pay down such indebtedness, or funding acquisitions. However, because its plans and/or circumstances could change over time, each prospectus supplement used by Providence in connection with the sale of shares pursuant to the shelf registration statement will set forth the use of proceeds for the particular offering to which it relates. About Providence Service Corporation Headquartered in Tucson, Arizona, Providence Service Corporation (Nasdaq: PRSC) -- http://www.provcorp.com/-- provides and manages government sponsored social services. * * * As reported in the Troubled Company Reporter on Dec. 12, 2007, Moody's Investors Service affirmed Providence Service's B2 corporate family rating and the existing debt ratings. The ratings outlook remains stable. QUEBECOR WORLD: Phillips Hager Owns 105,300 Non-Voting Shares ------------------------------------------------------------- Phillips, Hager & North Investment Management Ltd. disclosed in a regulatory filing with the Securities and Exchange Commission that they maybe deemed to beneficially own 105,300 shares of Quebecor World Inc.'s common non-voting stock. Phillips Hager's shares represents 0.12% of Quebecor World Inc.'s 85,079,000 shares outstanding as of Sept. 30, 2007. According to Bloomberg News, about 85,585,000 shares of QWI common stock have been issued and outstanding as of Feb. 29, 2008. Shares of QWI have been trading hands at CA$0.20 a share at the Toronto Stock Exchange as of the close of trading on March 7, 2008. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. QUEBECOR WORLD: Has Strong Position to Survive, Teamsters Says -------------------------------------------------------------- Quebecor World Inc.'s insolvency has made many of its European employees nervous but those in Quebec, Canada, are confident about the future, according to The Canadian Press. The report relates that Union Network International, Britain's union for graphical workers, said it's "extremely concerned and worried at the development." On a March 4 release Tony Burke, the union's assistant general secretary, said "A lack of information from the company has added to employee fears." "The only communication our members have had is a letter from the CEO Jacques Mallette in Canada advising that the bankruptcy protection only covers the U.S.A. and Canada and it's 'business as usual' in its European, Asian and Latin American companies," The Canadian Press quoted Mr. Burke, as saying. The Canadian Press reported that employees are confused since Mr. Mallette blamed the bankruptcy on industry pressures, particularly in Europe, the company's inability to raise new capital, and inability to complete the sale of its European operations. Mr. Burke, according to the report, said that "The fact that the company has failed to communicate with its own workforce and unions has lead to speculation, rumor and uncertainty." But the Teamsters union, which represents some 1,500 workers, said "the mood is completely different in Quebec." The Canadian Press quoted Teamsters as stating, "[Quebecor World] is in a strong position to survive because of recent technological upgrades." The Canadian Press quoted Stephane Lacroix, director of communications for Teamster Canada, saying, "We're reasonably confident that we'll be OK at the end of this crisis." About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. QUEBECOR WORLD: Ex-Corby Workers Set Up Taskforce With Unite Union ------------------------------------------------------------------ William Mitting of PrintWeek reports that former employees of Quebecor World Inc.'s site in Corby, central United Kingdom, have set up a taskforce with Unite, a local union, and local authorities to attain funding for training to help them find work. The taskforce is aiming to secure funds from the government to pay for training for workers at the Corby site, and at other firms who lost their jobs in the area recently, the report relates. Almost 1,000 employees lost their jobs as a result of Quebecor World's decision to close its Corby plant. Job Cuts with Corby Unit Receivership As reported in the Troubled Company Reporter on Feb. 4, 2008, Unite Assistant General Secretary, Tony Burke, said the labor group expects to see 300 potential job losses at Quebecor World PLC, Quebecor World's United Kingdom subsidiary, after the Corby-based facility has been placed into receivership in Jan. 28, 2008. The Canadian Press reported in early February 2008, that Ian Best and David Duggins of Ernst & Young LLP, the joint administrators of Quebecor World's British operation, have decided to shut down the printing plant in Corby. The Corby facility is located in the central U.K. about 70 miles north of London. It employed approximately 290 people and produced magazines, catalogs and specialty print products for marketing and advertising campaigns. According to the report, at least 250 workers will lose their jobs due to the closure. The Canadian Press related that Messrs. Best and Duggins were not able to find a buyer who would continue operating the plant. "The only interest expressed by potential investors were in the assets, including the building and machinery, of Quebecor World in the United Kingdom," The Canadian Press reported. Tony Burke, assistant secretary-general of Unite, the union representing workers at the Corby plant, blamed the Quebecor parent company in Canada, The Canadian press noted. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. RD MILLER: Owners File for Chapter 7 Liquidation in Minnesota ------------------------------------------------------------- Randy and Julie Miller, owners of RD Miller Auto, sought protection under chapter 7 of the U.S. Bankruptcy Code on Feb. 20, 2008, with the Minnesota Bankruptcy Court, St. Cloud Times reports. According to the report, vehicles were seized from RD Miller's vicinity located at 2700 Second Street. RD Miller Auto -- http://www.rdmillerauto.com/-- is a car dealer in St. Cloud, Minnesota. RETAIL PRO: Kevin Ralphs Quits as Interim Chief Financial Officer ----------------------------------------------------------------- Retail Pro Inc. fka. Island Pacific Inc., said in a regulatory filing that effective March 6, 2008, Kevin Ralphs resigned his employment with the company as interim chief financial officer. The company said there were no disputes between the company and Mr. Ralphs. As reported in the Troubled Company Reporter on Feb. 5, 2008, Mr. Ralphs was hired to replace Philip Bolles as interim chief financial officer, who resigned his employment with the company as chief financial officer on Jan. 24, 2008. Effective March 10, 2008, the company hired Alfred F. Riedler, 58, to serve as the company's vice president, finance and principal financial officer. During the most recent five year period, Mr. Riedler served as chief financial officer of St. Bernard Software Inc. Mr. Riedler had previously served as chief financial officer of Bluebird Systems, a software development company, president and chief operating officer of First Alliance Corporation, a technology products provider and leasing company, vice president finance of STARNET Corporation (a subsidiary of Ford Motor Company) and industrial group controller for Ramada Inns. Mr. Riedler earned his Bachelor of Science degree in Business Administration from the University of Nebraska. The company disclosed that Mr. Riedler's employment will be at- will. He will receive a salary of $140,000 per year and will also receive options to purchase 200,000 shares of the company's common stock at the market price as of the close of business on March 10, 2008. About Retail Pro Inc. Headquartered in La Jolla, California, Retail Pro, Inc. (OTC: IPIN.PK) -- http://www.retailpro.com/--provides Point of Sale, Store Operations, Merchandising, Planning, Business Intelligence, and Payment Processing software applications for the specialty retail industry. Retail Pro(R) is delivered through a world-wide network of channel partners. The company maintains offices in the United States, United Kingdom, Australia, Mexico, Italy, Poland and China. * * * Goldman & Parks LLP, in Encino, California, expressed substantial doubt about Island Pacific Inc. nka. Retail Pro Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended March 31, 2007, and 2006. The auditing firm reported that the company has suffered recurring losses from operations and has an accumulated deficit of $81,979,000 as of March 31, 2007. RITCHIE MULTI-STRATEGY: Hearing on Involuntary Petition is April 2 ------------------------------------------------------------------ The Hon. Susan Pierson Sonderby of the U.S. Bankruptcy Court for the Northern District of Illinois will rule on the involuntary bankruptcy petition filed against Ritchie Multi-Strategy Global LLC on April 2, 2008, 2:00 p.m. at the Sixth Floor, Dirksen Courtroom, 219 South Dearborn Street in Chicago, Illinois, Medill Reports in Chicago says. As reported in the Troubled Company Reporter on Dec. 28, 2007, an involuntary chapter 11 bankruptcy case was filed on Dec. 26, 2007, in the Court by investors in a domestic hedge fund, Ritchie Multi-Strategy Global, LLC, managed by Ritchie Capital Management. In conjunction, the investors filed a motion under Bankruptcy Rule 2004 seeking to investigate allegations of mismanagement, self-dealing and fraud. The fraud case remains unresolved as of press time. The petitioners -- Benchmark Plus Institutional Partners LLC, Benchmark Plus Partners LLC, and Sterling Low Volatility Fund QP -- are investors of the hedge fund. Ritchie Wants Involuntary Case Dismissed The TCR related on Jan. 22, 2008, that Ritchie Capital Management LLC, which manages domestic hedge fund Ritchie Multi-Strategy, will seek a dismissal of the chapter 11 involuntary petition filed against the company. The Debtor related to the Court that the petitioners, being equity investors, weren't qualified to file the petition. Ritchie Capital wants the Court to direct the petitioners to pay for $5 million damages if the involuntary petition is dismissed. The petitioners contested that they move for the redemption of their investments in August 2006, hence they are no longer investors but unsecured lenders, Medill relates. Ritchi Multi-Strategy argued that the petitioners consented to an agreement dated September 2006 that provides the restructuring of the hedge fund and that "nullified their right" as creditors, Medill reports. A month later, a state attorney accused of fraud a life insurance company that held $500 million in investments from Ritchi Multi-Strategy and the restructurin plan was abandoned, Medill notes. Debtors' counsel, Ronald Barlient, Esq., at Goldberg Kohn, commented that the petitioners were aware of the risks they took when they put up their money with his client, Medill adds. About Ritchie Capital Headquartered in Lisle, Illinois, Ritchie Capital Management Ltd. - http://www.ritchiecapital.com/-- is a private asset management firm founded in 1997 by former college football linebacker Thane Ritchie. The company has offices in New York and Menlo Park, California. About Ritchie Multi-Strategy Ritchie Multi-Strategy Global LLC is a domestic hedge fund. Three parties -- Benchmark Plus Institutional Partners LLC, Benchmark Plus Partners LLC, and Sterling Low Volatility Fund Q.P. National City Corp. -- filed an involuntary Chapter 11 petition for the company on Dec. 26, 2007 (Bankr. N.D. Ill. Case No. 07-24236). Jeff J. Marwil, Esq., at Winston & Stawn LLP, in Chicago, Illinois, represents the petitioners. The three petitioners disclosed holding roughly $46 million in claims against the fund. RADIATION THERAPY: Completes $1 Billion Merger with Vestar Capital ------------------------------------------------------------------ Radiation Therapy Services Inc. completed its $1.1 billion merger with an affiliate of Vestar Capital Partners L.P. At a special meeting held on Feb. 6, 2008, the shareholders of Radiation Therapy voted to approve the merger agreement that the company entered into on Oct. 19, 2007. Under the terms of the merger agreement, Radiation Therapy Services shareholders are entitled to receive $32.50 in cash, without interest, for each share of Radiation Therapy Services common stock held. Effective as of the closing of the market today, Radiation Therapy Services common stock will cease to be traded on the NASDAQ Stock Market. "We recognize the effort of Vestar and all parties to ensure the timely completion of the merger in today's difficult financing market," Dr. Daniel E. Dosoretz, chief executive officer of Radiation Therapy Services, said. "We are pleased to partner with a prominent private equity firm that shares our commitment to the company and its mission of delivering the highest quality of care." "We are pleased to successfully close this transaction and appreciate all the hard work undertaken by management, our financing sources and advisors to achieve this outcome," James L. Elrod, Jr., managing director of Vestar Capital Partners L.P., added. "We are very excited about the opportunity and the ability to work alongside a very talented and experienced management team and extraordinary group of physicians." Shareholders of Radiation Therapy Services who possess stock certificates will receive instructions by mail from American Stock Transfer & Trust company, the paying agent, concerning how and where to forward their certificates for payment of the merger consideration. For shares held in "street name" by a broker, bank or other nominee, shareholders will not need to take any action to have shares converted into cash, as this will be handled by the broker, bank or other nominee. Questions about the deposit of merger proceeds should be directed to the appropriate broker, bank or other nominee. The merger consideration and refinancing of previously existing debt was provided by affiliates of Vestar and through financing arranged by Wachovia Capital Markets LLC, BNP Paribas Securities Corp. and Sumitomo Mitsui Banking Corporation. Wachovia Capital Markets acted as financial advisor to Radiation Therapy Services in connection with the transaction. Morgan Joseph & Co. Inc. served as financial advisor to the Special Committee of the board of directors. Shumaker, Loop & Kendrick, LLP served as legal counsel to Radiation Therapy Services. Kirkland & Ellis LLP and Kennedy Covington Lobdell & Hickman, L.L.P served as legal counsel to Vestar. About Vestar Capital Partners L.P Headquartered in New York, Vestar Capital Partners L.P. -- http://www.vestarcapital.com/-- is on a quest to invest. Specializing in management buyouts, growth capital investments, and recapitalizations, the firm has completed more than 50 deals worth some $17 billion since its founding in 1998. An active investor that partners with management of portfolio companies, Vestar targets middle-market firms in a range of industries, including consumer products, financial services, media and communications, and health care. About Radiation Therapy Based in Fort Myers, Florida, Radiation Therapy Services Inc. (Nasdaq: RTSX) -- http://www.rtsx.com/-- operates radiation treatment centers under the name 21st Century Oncology. The company is a provider of radiation therapy services to cancer patients. The company's 80 treatment centers are clustered into 25 local markets in 16 states, including Alabama, Arizona, California, Delaware, Florida, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island and West Virginia. * * * As reported in the Troubled Company Reporter on Jan. 31, 2008, Moody's Investors Service assigned a B2 corporate family rating to RTS MergerCo Inc. The outlook for the ratings is stable. RANGE RESOURCES: Earns $34 Million in Quarter Ended December 31 --------------------------------------------------------------- Range Resources Corporation reported its financial results for fourth quarter and year ended Dec. 31, 2007. Reported fourth quarter earnings were $34 million up significantly over the $0.4 million of the prior year and cash flow was $187 million up 53%. Cash flow from operations before changes in working capital increased 64% to a record $190 million. During the quarter, the company provided a $6.4 million allowance for unproved acreage, which reduced diluted earnings per share by three cents. Net income comparable to analysts' estimates would have been $61 million, 90% greater than the comparable prior year. For full year 2007, reported earnings were $231 million up 45% and cash flow was $632 million up 43%. Net income comparable to analysts' estimates was $253 million, increasing 63% from the prior comparable year. Cash flow from operations before changes in working capital increased 44% to $674 million. At Dec. 31, 2007, the company's balance sheet showed total assets of $ 4.01 billion, total liabilities of $2.29 billion and total stockholders' equity $1.72 billion. "2007 was an outstanding year for Range and its stockholders," John H. Pinkerton, the company's president and CEO, said. "Financially, record highs were achieved for all the key metrics both on an absolute and per share basis. Operationally, production rose 17% and proved reserves increased 27% at an attractive all-in cost of $1.82 per mcfe." "Looking ahead, we are in an excellent position to set record results again in 2008," Mr. Pinkerton added. "Our drilling inventory now exceeds 11,000 locations, and we are off to a fast start with our 2008 drilling program. Importantly, we continue to make solid progress with regard to delineating and expanding our emerging plays. The unrisked reserve potential of the drilling inventory and emerging plays far exceeds our current proven reserves and will be the catalyst for our future growth for many years to come." About Range Resources Corporation Headquartered in Forth Worth, Texas, Range Resources Corporation (NYSE:RRC) -- http://www.rangeresources.com/-- is an independent oil and gas company operating in the Southwestern, Appalachian and Gulf Coast regions of the United States. The company pursues a growth strategy that targets exploitation of its sizeable inventory of lower risk development drilling locations with higher potential exploration projects and a complementary acquisition effort. Range seeks to manage risk in every aspect of its business while generating attractive returns. * * * Moody's Investor Service placed Range Resources Corporation's long term corporate family adn probability of default ratings at 'Ba2' in September 2007. The ratings still hold to date with a stable outlook. ROADRUNNER RIVER: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Roadrunner River Resort, LLC P.O. Box 5430 7000 Riverside Drive Parker, AZ 85344 Bankruptcy Case No.: 08-02529 Chapter 11 Petition Date: March 12, 2008 Court: District of Arizona Debtor's Counsel: Robert M. Cook, Esq. (robertmcook@yahoo.com) Missouri Commons-Suite 185 1440 East Missouri Phoenix, AZ 85014 Tel: (602) 285-0288 Fax: (602) 285-0388 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtor did not file a list of its largest unsecured creditors. SASCO MORTGAGE: Adverse Performance Prompts S&P to Cut 10 Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 10 classes of pass-through certificates from five reperforming mortgage transactions issued by SASCO Mortgage Loan Trust and Structured Asset Securities Corp. At the same time, S&P removed one of the lowered ratings from CreditWatch negative. Concurrently, S&P affirmed its ratings on 64 classes from various reperforming mortgage transactions, including those with lowered ratings. The downgrades of the SASCO classes reflect the adverse performance of the pools as the collateral continues to realize significance monthly net losses. Monthly net losses for SASCO Mortgage Loan Trust 2003-HEL1 have generally outpaced monthly excess interest cash flows, resulting in a write-down of the transaction's overcollateralization. Consequently, S&P lowered its rating on class B to 'B' from 'BB'. Monthly net losses for SASCO Mortgage Loan Trust 2005-GEL1 have consistently increased over the past six months and have started to erode the transaction's available credit support. In addition, the level of severely delinquent loans (90-plus days, foreclosures, and REOs) in this transaction's collateral pool indicates that additional losses are likely in the future. Consequently, S&P lowered its rating on class M3 to 'BB' from 'BBB' and lowered its rating on class M4 to 'B' from 'BBB-'. Credit support for this transaction is provided by subordination. As of the February 2008 distribution period, cumulative realized losses, as a percentage of the original pool balances, were 4.24% (SASCO 2003-GEL1) and 2.56% (SASCO 2005-GEL1). Total delinquencies were 39.25% (SASCO 2003-HEL1) and 23.95% (SASCO 2005-GEL1), while severe delinquencies were approximately 33% and 14%, respectively. Both transactions are seasoned 50 months or less and have pool factors of less than 29%. The downgrades of the seven Structured Asset Securities Corp. classes reflect high percentages of severely delinquent loans (7.61% for series 2004-GEL1, 5.92% for series 2005-RF1, and 23.67% for series 2005-RF4) when compared with the amount of available credit support. As of the February 2008 remittance period, series 2004-GEL1 had total delinquencies of 13.94%, cumulative realized losses of 2.82%, and a pool factor of 27.33%. Series 2005-RF1 had total delinquencies of 32.36%, cumulative realized losses of 0.30%, and a pool factor of 51.62%. Series 2005-RF4 had total delinquencies of 51.62%, cumulative realized losses of 0.43%, and a pool factor of 59.98%. Credit support for all of the Structured Asset Securities Corp. transactions is provided by subordination, and series 2004-GEL1 receives additional support from overcollateralization and excess interest. The affirmations reflect adequate actual and projected credit support percentages that are sufficient to support the ratings at their current levels. The collateral for these transactions consists of 30-year, fixed- or adjustable-rate, reperforming mortgage loans secured by first liens on residential properties. Ratings Lowered SASCO Mortgage Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2003-GEL1 B B BB 2005-GEL1 M3 BB BBB 2005-GEL1 M4 B BBB- Structured Asset Securities Corp. Rating ------ Series Class To From ------ ----- -- ---- 2004-GEL1 M4 BB BBB- 2005-RF1 B3 BB BBB 2005-RF1 B4 B BB 2005-RF1 B5 CCC B 2005-RF4 B3 BB BBB 2005-RF4 B4 B BB Rating Lowered and Removed From CreditWatch Negative Structured Asset Securities Corp. Rating ------ Series Class To From ------ ----- -- ---- 2005-RF4 B5 CCC B/Watch Neg Ratings Affirmed SASCO Mortgage Loan Trust Series Class Rating ------ ----- ------ 2003-GEL1 A-IO AAA 2003-GEL1 M2 A 2003-GEL1 M3 BBB 2003-GEL1 M4 BBB- 2005-GEL1 A AAA 2005-GEL1 M1 AA 2005-GEL1 M2 A Structured Asset Securities Corp. Series Class Rating ------ ----- ------ 2004-GEL1 A AAA 2004-GEL1 M1 AA 2004-GEL1 M2 A 2004-GEL1 M3 BBB 2005-RF1 A,AIO AAA 2005-RF1 B1 AA 2005-RF1 B2 A 2005-RF2 A,AIO AAA 2005-RF2 B1 AA 2005-RF2 B2 A 2005-RF2 B3 BBB 2005-RF2 B4 BB 2005-RF2 B5 B 2005-RF3 1-A, I-AIO,2-A AAA 2005-RF3 B1 AA 2005-RF3 B2 A 2005-RF3 B3 BBB 2005-RF3 B4 BB 2005-RF3 B5 B 2005-RF4 A,AIO AAA 2005-RF4 B1 AA 2005-RF4 B2 A 2005-RF5 1-A,1-AIO,2-A AAA 2005-RF5 B1 AA 2005-RF5 B2 A 2005-RF5 B3 BBB 2005-RF5 B4 BB 2005-RF5 B5 B 2005-RF6 A,AIO AAA 2005-RF6 B1 AA 2005-RF6 B2 A 2005-RF6 B3 BBB 2005-RF6 B4 BB 2005-RF6 B5 B 2005-RF7 A,AIO AAA 2005-RF7 B1 AA 2005-RF7 B2 A 2005-RF7 B3 BBB 2005-RF7 B4 BB 2005-RF7 B5 B Structured Asset Securities Corp. Mortgage Loan Trust Series Class Rating ------ ----- ------ 2006-RF2 A,R,AIO AAA 2006-RF2 B1 AA 2006-RF2 B2 A 2006-RF2 B3 BBB 2006-RF2 B4 BB 2006-RF2 B5 B SALOMON BROTHERS: Fitch Holds 'BB-' Rating on $3.3MM Cl. L Certs. ----------------------------------------------------------------- Fitch affirmed the ratings of Salomon Brothers Mortgage Securities VII, Inc.'s commercial mortgage pass-through certificates, series 2000-NL1 as: -- Interest-only class X at 'AAA'; -- $1.2 million class J at 'AAA'; -- $8.4 million class K at 'AA'; -- $3.3 million class L at 'BB-'. Fitch does not rate the $3.0 million class M certificates. Classes A-1, A-2, B, C, D, E, F, G and H have paid in full. Although credit enhancement levels have increased since Fitch's last rating action, affirmations are warranted due to increasing loan concentration. As of the February 2008 distribution date, the pool's aggregate certificate balance has decreased 95.3% to $15.9 million from $334.2 million at issuance. Currently there are eight loans remaining in the pool, including two defeased loans (40.9%). None of the loans have lockout provisions; thus, the deal is expected to continue to pay down. 91.1% of the remaining loans mature in 2008. The weighted average mortgage coupon of the remaining non-defeased loans is 6.78%. There are no delinquent or specially serviced loans. Two loans have been identified as Fitch loans of concern due to declining performance. The first Fitch loan of concern (17.5%) is the largest non-defeased loan in the pool and is secured by a strip mall located in Speedway, Indiana. Servicer reported 2nd quarter 2007 DSCR was 0.29 times with 82% occupancy rate, compared to DSCR of 1.75x and 100% occupancy rate at issuance. This loan is scheduled to mature in October 2008 and has an interest rate of 6.84%. The second Fitch loan of concern (11.7%) is the second largest non-defeased loan in the pool and is secured by a 23,192 square foot office property in Cornelius, North Carolina. Servicer reported 2nd quarter 2007 DSCR was 0.45x with 82% occupancy rate, compared to DSCR of 1.41x and 100% occupancy rate at issuance. This loan is scheduled to mature in August 2008 and has an interest rate of 7.22%. SCORPIUS CDO: Poor Credit Quality Spurs Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded ratings of eleven classes of notes issued by Scorpius CDO, Ltd. and left on review for possible further downgrade the ratings of four of these classes. The notes affected by this rating action are: (1) Class Description: $975,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due November 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade (2) Class Description: $90,000,000 Class A-2A Second Priority Senior Secured Floating Rate Notes due November 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade (3) Class Description: $90,000,000 Class A-2B Third Priority Senior Secured Floating Rate Notes due November 2046 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade (4) Class Description: $50,000,000 Class B Fourth Priority Senior Secured Floating Rate Notes due November 2046 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade (5) Class Description: $60,000,000 Class C Fifth Priority Senior Secured Floating Rate Notes due November 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ca (6) Class Description: $22,000,000 Class D Sixth Priority Mezzanine Secured Floating Rate Notes due November 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca (7) Class Description: $52,000,000 Class E Seventh Priority Mezzanine Secured Floating Rate Notes due November 2046 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C (8) Class Description: $58,000,000 Class F Eighth Priority Mezzanine Secured Floating Rate Notes due November 2046 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C (9) Class Description: $20,000,000 Class G Ninth Priority Mezzanine Secured Floating Rate Notes due November 2046 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C (10) Class Description: $37,500,000 Class A Preferred Securities -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C (11) Class Description: $30,000,000 Class B Preferred Securities -- Prior Rating: Caa3, 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. 12, 2008, of an event of default caused by the Class A Sequential Pay Ratio being less than 100 per cent, as described in Section 5.1(j) of the Indenture dated Oct. 26, 2006. Scorpius CDO, Ltd. is a collateralized debt obligation mainly backed by a portfolio of RMBS and CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of further remedies to be pursued by the Controlling Class. Because of this uncertainty, the ratings assigned to Class A-1 Notes, Class A-2A Notes, Class A-2B Notes and Class B Notes remain on review for possible further action. SH 130 CONCESSION: Moody's Rates TIFIA Subordinate Debt 'Ba1' -------------------------------------------------------------- Moody's Investors Service assigned a rating of Baa3 to the SH 130 Concession Company, LLC's senior secured bank notes and a rating of Ba1 to the company's US Department of Transportation TIFIA subordinate debt. The senior bank debt has a final maturity of 2038 and the TIFIA subordinate debt matures in 2047. The outlook for both ratings is Stable. Proceeds from the senior and subordinate debt issues will be used primarily for construction costs, right of way acquisition costs, a concession payment to the Texas Department of Transportation, capitalized interest, financing costs, operating and interest expenses during a ramp up period and other upfront expenses associated with the SH 130 project. The ratings reflect the fundamentals of the project, the support of the subordinated TIFIA government funding, the project delivery and construction expertise the sponsors, as well as the generally supportive concession terms and debt structure. On March 22, 2007 SH 130 Concession Company, LLC entered into a Facility Concession Agreement with the Texas Department of Transportation for the construction and operation of Segments 5 and 6 of SH 130. The project consists of 40 miles out of a 90 mile bypass connecting with IH35 at the northern terminus and connecting with IH10 at its southern terminus, all along the congested San Antonio to Austin north-south corridor. The total 90 mile bypass is intended to relieve congestion on IH35 by providing a tolled high-speed alternative for long distance commercial vehicles. The investment grade rating for the senior secured debt reflects a number of key factors. The alignment of the project is located along an important north-south corridor connecting Mexico to Texas and points north. There is currently congestion on IH35, particularly during peak periods reflecting: (1) population density within the 8 county service areas which comprises 12% of the state's population, (2) employment growth which has exceeded other parts of the state, (3) economic diversity and strong socio-economics. Traffic generators in the service area include Austin, the state capital, educational facilities including the University of Texas and Texas State University, four military bases, two airports and retail outlets. Adding to the congestion is the importance of the corridor for NAFTA related truck movements from Mexico. Segments 5 and 6 will provide significant time savings for full length trips, ranging from 20 to 50 minutes depending on the time of day. The consultant's traffic and revenue projections appear reasonable. Assuming a 4 year ramp-up beginning in 2012, traffic growth is pegged to population and employment growth with truck traffic projected to grow at an average 3%. According to the consultant's May, 2007 Revalidation Report, after the initial ramp-up period, between 2015 and 2025 the annual traffic growth rate is projected to be 6% for both Segments 5 and 6. While this is slightly higher than historic traffic growth at various screenlines along IH35, growth along the IH35 corridor can be viewed as having been impacted by capacity constraints, especially during peak periods. The traffic projections also do not reflect potential impacts from the Panama Canal expansion project and the increase in traffic resulting from liberalization of access permitting Mexican drivers to take their trucks to end points beyond the US-Mexican border. While this is essentially a greenfield, construction risk is manageable. SH 130 Concession Company, LLC has entered into a guaranteed lump sum, date certain Design Build contract with a 50/50 joint venture of affiliates of Ferrovial Agroman, S.A. and Zachry Construction Coorporation. The JV is providing a payment and performance bond of $250 million. TxDOT is overseeing the right of way acquisition process. Environmental approvals under NEPA have been obtained: the initial Record of Decision was issued June 5, 2001 and the NEPA approvals became final on June 11, 2007. The JV partners are experience in infrastructure construction and have successfully completed comparable projects globally. The key concession terms are generally supportive of the project. The concession term is 50 years from the commencement of operations (after a five year construction period). The tolling regime is based on initial maximum base rates that are consistent with other toll roads in Texas with future inflation adjustments based on changed in the GSP per capita. Initially the tolls will be set at a level that is equivalent to 12.5 cents per mile for cars and 50 cents per mile for trucks in January 2006 prices. The agreement provides for compensation to the concessionaire if competing facilities are built in the future within 10 miles of SH130 or if IH35 is allowed to operate at higher speed limits than those currently enforced. TxDOT will not provide compensation if IH35 is upgraded or improved in the future. The concession also requires revenue sharing if traffic exceeds base case projections in addition to the $25 million upfront concession payment to TxDOT. Termination provisions include compensation in an amount equal to the greater of the fair market value of the concession or the senior debt termination amount should TxDOT elect to terminate the concession for convenience. In the event of a force majeure or extended relief event, the termination compensation shall be equal to the senior debt termination amount minus any balances in concession funds. The senior debt structure contains generally standard debt-holder protections. In addition to providing proceeds for the construction project, the debt will include a $35 million liquidity facility available for the first 5 years of operation and an additional $30 million of contingent equity to be backed by letters of credit. Both liquidity facilities are available to subsidize revenues in the early years of operations. Starting from 2 year before of the expiration of the liquidity facility the company will put into place a Debt Service Reserve Fund equal to 12 months of debt service either funded from excess cashflows or through a replacement liquidity facility. Restricted payments cannot be made unless the project meets the 1.20 Total Debt Service Coverage Ratio test,, all targeted senior debt service has been achieved, all scheduled and mandatory TIFIA debt service payments are current and the substantial completion date has occurred. A Major Maintenance Fund will provide for a 3 year forward funding of major maintenance requirements (1st year: 100% ,2nd years: 66%, 3rd years: 33%). The senior debt has a 30 year final maturity, providing for a "tail" of at least 20 years. The TIFIA subordinate debt has a final maturity 35 years from substantial completion. According to the base case financial model, consolidated metrics include minimum DSCR of 1.25 times (taking in consideration the available commitments of liquidity facility and contingent equity) and average DSCR over 6 times (calculated considering Tifia debt Maturity) . SH130 Concession Company LLC is a limited liability company organized and existing under the laws of the State of Delaware. The company was established by Cintra Tx 56, LLC (65% ownership) and Zachry Toll Road 56, LP (35% ownership) in order to undertake a concession granted by the Texas Department of Transportation. SHARPS CDO: CIFG Rating Downgrade Prompts S&P's Two Rating Cuts --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of notes issued by Sharps CDO I Ltd., a U.S. CDO of ABS transaction, to 'AA+' from 'AAA'. At the same time, S&P placed the ratings on CreditWatch negative to reflect the potential for deterioration of the credit quality of the assets in Sharps CDO I's portfolio, 19% of which currently has ratings on CreditWatch negative. S&P had placed its ratings on the other classes of notes issued by Sharps CDO I on CreditWatch negative on Jan. 30, 2008. The downgrade of the class A-1 and A-2 notes from Sharps CDO I follow the lowering of S&P's financial strength rating on CIFG Assurance North America Inc. earlier. The 'AAA' ratings previously assigned to these tranches were based on a full financial insurance policy provided by CIFG, which guarantees the timely payment of interest and principal on the tranches. Because the underlying ratings assigned to these CDO tranches, without benefit of the insurance policy, are below 'AAA', S&P lowered the ratings on the CDO tranches as a result of the downgrade of CIFG to 'A+'. Standard & Poor's noted that the ratings on other CIFG-insured U.S. CDO tranches that have current underlying ratings of 'AAA' were not affected by the CIFG downgrade. Ratings Lowered and Placed on CreditWatch Negative Rating ------ Transaction Class To From ----------- ----- -- ---- Sharps CDO I Ltd. A-1 AA+/Watch Neg AAA Sharps CDO I Ltd. A-2 AA+/Watch Neg AAA Other Ratings Outstanding Transaction Class Rating ----------- ----- ------ Sharps CDO I Ltd. B A+/Watch Neg Sharps CDO I Ltd. C BBB-/Watch Neg Sharps CDO I Ltd. D CCC+/Watch Neg SP NEWSPRINT: Ernst & Young Expresses Going Concern Doubt ---------------------------------------------------------- Ernst & Young LLP in Atlanta, Ga., raised substantial doubt about the ability of SP Newsprint Co. to continue as a going concern after it audited the company's financial statements for the year ended Dec. 30, 2007. The auditor reported that the company's revolving credit facility, which had an outstanding balance at Dec. 30, 2007, of $19,850,000, is due and payable on May 30, 2008. In addition, the company is in violation of a covenant pursuant to its credit agreement. At Dec. 30, 2007, there were letters of credit issued under the credit agreement totaling $143,000,000 used to support the company's Industrial Revenue Bond (IRB) debt of $138,250,000. Accordingly, the IRB balance has been classified as a current liability in the accompanying balance sheet as of Dec. 30, 2007. The company does not currently have the funds to repay the revolving credit facility and the IRB debt, nor does it have a commitment from a lender to refinance these amounts. The company posted a net loss of $59,939,000 on total sales of $430,381,000 for the year ended Dec. 30, 2007, as compared with a net income of $31,562,000 on total sales of $487,541,000 in the prior year. Expenditures for maintenance and repairs are charged to expense as incurred. Maintenance and repairs expenses totaled $40,025,000, $45,160,000, and $42,792,000 during 2007, 2006, and 2005, respectively, and are included in cost of goods sold. Expenditures for renewals and betterments are capitalized and depreciated over the related estimated useful lives. At Dec. 30, 2007, the company's balance sheet showed $469,474,000 in total assets, $285,428,000 in total liabilities and $184,046,000 stockholders' equity. The company's consolidated balance sheet at Dec. 30, 2007, showed strained liquidity with $120,392,000 in total current assets available to pay $233,586,000 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?2913 About SP Newsprint Co. Headquartered in Atlanta, Georgia, SP Newsprint Co. -- http://www.spnewsprint.com-- is a general partnership among affiliates of Cox Enterprises Inc., Media General Inc. and The McClatchy Company. The company operates newsprint mills in Dublin, Georgia, and Newberg, Oregon as well as SP Recycling Corp., a wholly owned fiber procurement subsidiary with facilities primarily in the southeast and western portions of the United States. Annual newsprint production totals approximately one million tons. THORNBURG MORTGAGE: Defaults on $49MM Morgan Stanley Agreement -------------------------------------------------------------- Thornburg Mortgage, Inc., received on March 11, 2008, a notice of event of default from Morgan Stanley & Co. Incorporated, dated March 6, 2008, after failing to meet a margin call of approximately $9,000,000. The notice states that an Event of Default as defined under the parties' Master Repurchase Agreement, dated as of July 16, 1993, has occurred, Larry Goldstone, Thornburg President and Chief Executive Officer, relates. The notice also states that Morgan Stanley has exercised or will exercise its rights under the Agreement. The aggregate amount of the proceeds lent to Thornburg under the Agreement was approximately $49,000,000. As reported in the Troubled Company Reporter on March 11, 2008, Thornburg creditors have seized "billions of dollars" of collateral from the embattled home lender, and dumped those assets onto the bond market. The past week, Thornburg received notices of an event of default from: (1) Natixis Securities North America Inc., as agent for Natixis Financial Products Inc., dated March 3, 2008, after failing to meet a margin call of $6,000,000. The notice states that an event of default as defined under the company's Master Repurchase Agreement, dated December 15, 2000, with Natixis has occurred. The notice states that Natixis was accelerating the repurchase date under the Natixis Agreement. The aggregate amount of the proceeds lent to the Company under the Natixis Agreement was roughly $163,000,000. (2) ING Financial Markets LLC, dated March 3, 2008, after failing to repurchase roughly $70,000,000 in AAA-rated securities. The notice states that an event of default as defined under their BMA Master Repurchase Agreement, dated as of January 12, 2007, has occurred. The notice states that ING reserves all right and remedies provided in the ING Agreement. The aggregate amount of the proceeds lent to the company under the ING Agreement was roughly $707,000,000. (3) Goldman, Sachs & Co. also issued a notice of event of default dated March 4, 2008, after the company failed to meet a margin call of roughly $54,000,000. The notice states that an event of default as defined under the parties' Master Repurchase Agreement, dated as of August 12, 2002, has occurred. The notice states Goldman Sachs was accelerating the repurchase date under the Goldman Sachs Agreement. The aggregate amount of the proceeds lent under the Goldman Sachs Agreement was roughly $550,000,000. (4) JPMorgan Chase Bank, N.A., dated Feb. 28, 2008, after failing to meet a $28,000,000 margin call. The letter states that an event of default as defined under the parties' Master Repurchase Agreement, dated as of Aug. 3, 2006, as amended on Feb. 7, 2007, exists. The letter also notified the company that JPMorgan will exercise its rights under the agreement. The aggregate amount of proceeds lent to the company under the agreement was approximately $320,000,000. Thornburg has been in continuing discussions with all of its lenders, and, to the best of its knowledge, the lenders that issued notices of event of default have not yet exercised their rights to liquidate pledged collateral. The company is working to meet all of its outstanding margin calls within a timeframe acceptable to its lenders, through a combination of selling portfolio securities, issuing collateralized mortgage debt and raising additional debt or equity capital. Through the close of business on March 6, 2008, Thornburg had received $1,777,000,000 in margin calls since December 31, 2007, and had satisfied $1,167,000,000 of those margin calls primarily by using its available liquidity, principal and interest payments, and proceeds from the sale of assets. As of the close of business on March 6, 2008, Thornburg had outstanding margin calls of $610,000,000 which significantly exceeded its available liquidity at that date. The recent events have raised substantial doubt about the company's ability to continue as a going concern without significant restructuring and the addition of new capital. On March 4, 2008, the company was advised by its independent accountant, KPMG LLP, that no further reliance should be placed on the auditors' report dated February 27, 2008, on the company's consolidated financial statements as of December 31, 2007, and 2006 and for each of the years in the two year period ended December 31, 2007. About Thornburg Mortgage Headquartered in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable-rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. * * * As reported in the Troubled Company Reporter on March 10, 2008, Moody's Investors Service downgraded to Ca from Caa2 the senior unsecured debt, and to C from Ca the preferred stock ratings of Thornburg Mortgage, Inc. Thornburg's Ca unsecured debt rating remains under review for possible downgrade. The downgrades were in response to Thornburg's announcement that cross-defaults have been triggered under all of the REIT's repurchase agreements and secured loan agreements. Reverse repurchase agreements represent a key source of funding for the company. The TCR said on March 10 that Standard & Poor's Ratings Services lowered its issue ratings on Thornburg Mortgage Inc.'s senior unsecured debt to 'CC' from 'CCC+' and preferred stock to 'C' from 'CCC-'. Both issue ratings will remain on CreditWatch negative, where they were placed on March 3, 2008. The counterparty credit rating remains on selective default. Given Thornburg's limited financial resources, S&P believes the risk of default has increased further. The TCR also said on March 10 that, given Thornburg Mortgage, Inc.'s weakening credit profile stemming from defaults under the company's reverse repurchase agreements, Fitch has downgraded the Debtors' four ratings -- Issuer Default Rating to 'RD' from 'CCC'; -- Senior unsecured notes to 'C/RR6' from 'CCC-/RR5'; -- Unsecured subordinate notes to 'C/RR6' from 'CC/RR6'; and -- Preferred stock to 'C/RR6' from 'CC/RR6'. THORNBURG MORTGAGE: Restates Consolidated Financial Statements -------------------------------------------------------------- Thornburg Mortgage, Inc. restated its consolidated financial statements as of and for the year ended Dec. 31, 2007. On March 5, 2008, Thornburg's board of directors decided that it should restate the financial statements after concluding that there was substantial doubt as to its ability to continue as a going concern at Dec. 31, 2007. In addition, KPMG LLP raised substantial doubt about Thornburg's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. KPMG said the company "did not have the financial resources as of March 6, 2008, to satisfy margin calls approximating $610 million associated with its reverse repurchase agreements and certain other financial instruments. Failure to satisfy these margin calls is an event of default under the reverse repurchase agreements and triggered cross default provisions in certain of its financing agreements. These events of default provide the company's lenders the discretion to declare the entire unpaid amounts due and payable on demand and to force liquidation of the company's assets to satisfy those obligations." Restatement The company said that its losses on available for sale securities and its Securitized ARM Loans that are currently pledged as collateral for Reverse Repurchase Agreements were considered to be other than temporary impairments as of Dec. 31, 2007, since it may not be able to hold these securities for the foreseeable future because it may sell them to satisfy margin calls from its lenders or to otherwise manage its liquidity position. The restated financial statements reflect changes in the company's losses on ARM Assets and other related changes. The company has recognized an impairment charge totaling $676,580,000 in gross unrealized losses on those assets as of Dec. 31, 2007. The impairment charge resulted in a decrease in management and incentive fees of $5,850,000. Financials Thornburg reported a restated $1,545,678 net loss on $316,261,000 of net interest income for the year ended Dec. 31, 2007. Before the restatement, the company reported an $874,948,000 net loss. For the year ended Dec. 31, 2006, the company reported $297,697,000 of net income on $346,684,000 of net interest income. Thornburg's restated consolidated balance sheet at Dec. 31, 2007, showed $36,272,361,000 in total assets, $34,512,627,000 in total liabilities, and $1,759,734,000 in total stockholders' equity. Before the restatement, Thornburg's balance sheet at Dec. 31, 2007, showed $36,521,162,000 in total assets, $34,518,477 in total liabilities, and $2,002,685 in total stockholders' equity A full-text copy of the company's 2007 restated annual report is available for free at http://ResearchArchives.com/t/s?2918 About Thornburg Mortgage Headquartered in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable-rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. * * * As reported in the Troubled Company Reporter on March 10, 2008, Moody's Investors Service downgraded to Ca from Caa2 the senior unsecured debt, and to C from Ca the preferred stock ratings of Thornburg Mortgage, Inc. Thornburg's Ca unsecured debt rating remains under review for possible downgrade. The downgrades were in response to Thornburg's announcement that cross-defaults have been triggered under all of the REIT's repurchase agreements and secured loan agreements. Reverse repurchase agreements represent a key source of funding for the company. The TCR said on March 10 that Standard & Poor's Ratings Services lowered its issue ratings on Thornburg Mortgage Inc.'s senior unsecured debt to 'CC' from 'CCC+' and preferred stock to 'C' from 'CCC-'. Both issue ratings will remain on CreditWatch negative, where they were placed on March 3, 2008. The counterparty credit rating remains on selective default. Given Thornburg's limited financial resources, S&P believes the risk of default has increased further. The TCR also said on March 10 that, given Thornburg Mortgage, Inc.'s weakening credit profile stemming from defaults under the company's reverse repurchase agreements, Fitch has downgraded the Debtors' four ratings -- Issuer Default Rating to 'RD' from 'CCC'; -- Senior unsecured notes to 'C/RR6' from 'CCC-/RR5'; -- Unsecured subordinate notes to 'C/RR6' from 'CC/RR6'; and -- Preferred stock to 'C/RR6' from 'CC/RR6'. TILLIM LLC: Creditors Have Until June 9 to File Proofs of Claims ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan has established key dates to expedite Tillim LLC's Chapter 11 case. The last day for all creditors to file claims against the Debtor is on June 9, 2008, while government units may file claims until July 29, 2008. All persons and entities that intend to rely on the Debtors' schedules of assets and liabilities will have the responsibility for determining that their claims are accurately listed on the schedules. Each claim holder who fails to timely file a claim will be forever barred from: * asserting the claim, whether directly or indirectly, against the Debtors; and * voting upon, or receiving distributions under, any plan of reorganization or liquidation in the Debtors' Chapter 11 proceedings. In the event the Debtors amend or supplement their schedules, they will give notice of the amendment or supplement to the affected claim holders, which will afford the claim holders a 30-day extension from the date on which the notice is given to file a claim, if necessary, or be forever barred from doing so. The Court also set March 31, 2008, as the deadline for the Debtors to file motions. The Court relates that this case will not be delayed due to unfiled tax return. The Debtors have until May 15, 2008, to file all unfiled overdue tax returns. Headquartered in Detroit, Michigan, Tillim LLC filed for Chapter 11 protection on Jan. 31, 2008 (Bankr. E.D. Mich. Case No.: 08- 42316). Jerome D. Frank, Esq. represents the Debtor in its restructuring efforts. When it filed for protection from its creditors, it listed total assets of $10 million and total debts of $11.5 million. TUCSON ELECTRIC: Fitch Expects to Put 'BB+' Rating on $121MM Bonds ------------------------------------------------------------------ Fitch Ratings expects to assign a 'BB+' rating to the planned $121 million Industrial Development Revenue Bonds, 2008 Series A issued on behalf of the Tucson Electric Power Company by the Industrial Development Authority of the County of Pima. Proceeds from the offering will be used by TEP to repay short-term and maturing long-term debt obligations. The Rating Outlook is Stable. The rating considers TEP's cash flow coverage and debt ratios, which are consistent with the rating category. TEP's rating also reflects the company's utility-focused strategy, solid service territory growth and efforts to reduce debt. Fitch assumes that TEP's pending general rate case will result in revenues, earnings and cash flows sufficient to facilitate continued financial de- leveraging. The primary concern for investors is an outcome in TEP's pending GRC, which was filed in July 2007, that would result in an inability to further reduce debt leverage. In its filing TEP requested a $181 million (23%) revenue increase on a cost-of- service basis and proposed alternative rate adjustments based on market rates for generation, or a hybrid model. The rate increase is based on a 10.75% authorized return on equity. The filing also requests implementation of a fuel adjustment clause. A final order is expected by year-end 2008. On Feb. 29, 2008, the Arizona Corporation Commission staff filed testimony in the proceeding recommending a $14 million-$22 million rate decrease based on a 10.25% return on equity. While the commission is not bound by the staff recommendation, Fitch notes that a final order by the ACC consistent with the staff proposal would likely result in weaker than anticipated credit metrics. Positively, the staff recommends ACC adoption of a fuel adjustment clause. VICTORY MEMORIAL: Court OKs Bidding Procedures for Sale of Assets ----------------------------------------------------------------- The United States Bankruptcy Court for the Eastern District of New York approved Victory Memorial Hospital and its debtor-affiliates' bidding procedure for the sale of certain assets, clear of all liens and interests, subject to higher and better offer. As reported in the Troubled Company Reporter on Feb. 13, 2008, New York not-for-profit corporation St. Jerome Health Services Corporation dba Holy Family Home, as the stalking horse bidder, agreed to purchase the assets for $40 million in cash, under a certain purchase agreement. The agreement requires St. Jerome deposit $1,500,000 in cash, which will held in escrow. The Debtors said that the purchased assets, includes, among others: a) real property in Tax Block 6094 Lot 1 in Brooklyn, New York, also known as main campus; b) Victory Memorial Hospital's 150-bed Skilled Nursing Facility (SNF), including all licenses and certificates; c) Victory Memorial Hospital Long Term Home Health Care (LTHHCP)program, including also licenses and certificates; d) all equipments and assets for the SNF and LTHHCP. All excluded assets will be retained by the Debtors, including, among others, the existing $25 million HEAL award and any causes of action of the Debtors. Pursuant to the terms and conditions of the agreement, the Debtors have agreed to provide a $400,000 break-up fee. Sale Protocol Qualified bidders must submit their offers no later than March 17, 2008, at 4:00 p.m.,(Eastern Time) and deliver a written copies of that bid at: a) DLA Piper US LLP Attn: Timothy W. Walsh, Esq. 1251 Avenue of the Americas New York, NY 10020 b) Alston & Bird LLP Attn: Martin G. Bunin, Esq. 90 Park Avenue New York, NY 10016 c) CIT Capital USA Inc. Attn: Natalie Wilensky 11 West 42nd Street, 7th floor New York, NY 10036 Each bid must be accompanied by a "good faith deposit" of $1,500,000 in bank or certified check. The initial overbid must be equal or exceed the purchase price plus $500,000. An auction will be held on March 20, 2008, at 10:00 a.m., at the offices of DLA Piper US LLP by CIT Capital. During the public auction, bidding commences with the baseline bid and continue in minimum increments of at least $100,000. All qualified bidder will be notified before March 19, 2008. About Victory Memorial Based in Brooklyn, New York, Victory Memorial Hospital is a non-profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. Craig E. Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $1 million and $100 million. VICTORY MEMORIAL: Wants Exclusive Plan Filing Period Extended ------------------------------------------------------------- Victory Memorial Hospital and its debtor-affiliates ask the United States Bankruptcy Court for the Eastern District of New York to further extend their exclusive periods to: i) file a Chapter 11 plan until May 15, 2008; and ii) solicit acceptances of that plan until July 14, 2008. The Debtors say they were not able to prepare a Chapter 11 plan before March 11, 2008, the initial exclusive plan filing period deadline, despite substantial progress made toward restructuring and liquidation ahead of the New York State Department of Health's proposed schedule. A second draft closure plan have been submitted and awaiting comments from the DOH, the Debtors say. The Debtors argue that they cannot close their facility without DOH's approval. Timothy W. Walsh, Esq., at DLA Piper US LLP in New York, says only after resolving these issues the Debtors can file a plan, among other things (i) liquidate the Debtors remaining assets after the auction and (ii) review regulatory requirements. As previously reported, DOH intended to provide additional funds to repay the Debtors' current DIP facility as well as additional DIP financing in addition to the $25 million funds already allocated to the Debtors. The DOH's commitment to repay the DIP financing with additional fund relieves the estates of significant administrative claims to the benefit of the Debtors' unsecured creditors. About Victory Memorial Based in Brooklyn, New York, Victory Memorial Hospital is a non-profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. Craig E. Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $1 million and $100 million. WELLMAN INC: U.S. Trustee Appoints Unsecured Creditors Committee ---------------------------------------------------------------- Diana G. Adams, United States Trustee for Region 2, appoints seven members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Wellman, Inc., and its debtor-affiliates. The Creditors Committee members are: (1) BP Amoco Chemical Company Attn: Victor Alvarado 150 W. Warrenville Road Naperville, Illinois 60563 Tel: (630) 961-7784 (2) Equistar Chemicals, LP Attn: J. Donald Hamilton 1221 McKinney Street, Suite 1500 Houston, Texas 77010 Tel: (713) 309-4980 (3) Pillowtex Corporation Attn: John Wahowski P.O. Box 107 Kannopolis, North Carolina 28081 Tel: (704) 939-2016 (4) A&R Logistics Attn: Craig Stimpert 8440 S. Tabler Road Morris, Illinois 60450 Tel: (815) 941-6523 (5) Nilit America Corporation Attn: Steve Tritt 6903 International Drive Greensboro, North Carolina 27409 Tel: (336) 605-1962 (6) American Citadel Guard, Inc. Attn: Jody Tada 6030 Unity Drive, Suite D Norcross, Georgia 30071 Tel: (770) 709-0077 (7) Columbia Recycling Corp. Attn: Al Goldberg P.O. Box 2101 Dalton, Georgia 30722 Tel: (604) 442-9959 Pursuant to Section 1103 of the Bankruptcy Code, the Creditors Committee may: -- consult with the Debtor concerning the administration of the bankruptcy case; -- investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business and the desirability of the continuance of the business, and any other matter relevant to the case or to the formulation of a plan of reorganization for the Debtors; -- participate in the formulation of a plan, advise its constituents regarding the Committee's determinations as to any plan formulated, and collect and file with the Court acceptances or rejections of the plan; -- request the appointment of a trustee or examiner; and -- perform other services as are in the interest of its constituents. The Creditors Committee may retain counsel, accountants, or other agents, to represent or perform services for the group. Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SHARPER IMAGE: Obtains Final Approval to Use Cash Collateral ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized Sharper Image Corp., on a final basis, to use the cash collateral of its pre-bankruptcy lenders. All proceeds of the sale or the disposition of the Collateral will be applied: (a) to permanently reduce the obligations pursuant to the Pre- Petition Revolving Loans and Term Loan; (b) to reduce the DIP Obligations in accordance with the DIP Credit Agreement. The Pre-Petition Secured Parties are entitled to receive adequate protection from any decrease in the value of their interest in the Pre-Petition Collateral resulting from the automatic stay or the Debtor's use, sale or lease of the Pre-Petition Collateral during the Case. As adequate protection, the Pre-Petition Agents will receive: (i) Pre-Petition Replacement Liens, (2) a Pre-Petition Superpriority Claim, and (3) Adequate Protection Payments. Upon payment in full of the DIP Obligations and termination of the DIP Credit Facility, the Debtor will establish an account -- the Pre-Petition Indemnity Account -- in the control of the Pre- Petition Agent, into which $150,000 of proceeds of any sale, lease or other disposition of any of the Collateral will be deposited as security for any reimbursement, indemnification or similar continuing obligations of the Debtor in favor of the Pre- Petition Secured Parties under the Pre-Petition Financing Agreements. As reported in the Troubled Company Reporter on Feb. 26, the Court granted on an interim basis, the Debtor's request to use cash collateral of its pre-bankruptcy secured lenders. As of the company's bankruptcy filing on Feb. 19, the Debtor is a party to a Loan and Security Agreement dated October 31, 2003, with Wells Fargo, as lender, arranger, and administrative agent, and the lenders party. The Prepetition Credit Agreement provides for a revolving credit facility and letter of credit subfacility against a "borrowing base" determined by inventory levels and specified accounts receivable in the maximum aggregate amount of the lesser of: (a) $85,000,000 during the period from January 1 through July 31 of each year; (b) $100,000,000 during the period from August 1 through September 30 of each year; (c) $120,000,000 during the period from October 1 through December 31 of each year; and (d) the borrowing base. The Prepetition Credit Agreement also provides for a term loan facility in the amount of $10,000,000, which was made immediately available, with an additional $10,000,000 to be available upon the successful completion of syndication of the term loan. The contemplated syndication did not occur. The amounts borrowed under the Prepetition Credit Agreement were used to fund, among other things, working capital requirements. As of the Petition Date, approximately $44,500,000 is outstanding under the Prepetition Credit Agreement. Pursuant to the Prepetition Credit Agreement, the Debtor granted first priority liens and security interests in favor of the Prepetition Secured Parties in the Debtor's then owned or thereafter acquired right, title, and interest in and to, among others, each of these assets: (i) Accounts, (ii) Books, (iii) Deposit Accounts, (iv) Equipment, (v) General Intangibles, (vi) Goods, (vii) Inventory, (viii) Investment Property, (ix) Negotiable Collateral, (x) Commercial Tort Claims, (xi) Leasehold Interests, (xii) money or other assets of Sharper Image, and (xiii) the proceeds and products of any of the assets. About Sharper Image Corp. Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D. Del., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the case. When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. (Sharper Image Bankruptcy News Issue No. 6, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SIRVA INC: Committee Files Motion to Restrict Access to Documents ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Sirva Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to confirm that it is not required to provide access to Debtors' confidential or privileged information to the unsecured creditors constituency who are not Committee members. Pursuant to Section 1103(c) of the Bankruptcy Code, a committee is authorized to, among other things, consult with debtors, investigate debtors, participate in the formulation of a plan of reorganization, and perform other services as are in the interests of those represented. In addition, as part of a committee's duties, under Section 1102(b)(3)(A), a committee is required to provide the constituency it represents with access to certain information. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP in New York, the Committee's proposed counsel, says that Section 1102(b)(3)(A) lacks specificity, and creates issues for debtors and creditors' committees. The statute, she says, simply requires a committee "to provide access to information," yet sets forth no guidelines as to the type, kind, and extent of those information. In extreme, she points out, Section 1102(b)(3)(A) could be read as requiring a committee to provide access to all information provided to it by a debtor, or developed through exercise of its investigative function, regardless of whether the information is confidential, privileged, proprietary or material non-public information. Without clarification, Ms. Jones says, a debtor will be reluctant to share confidential, sensitive financial and strategic information with a committee. Committees, she adds, will be concerned that the fruits of their own investigation may be disseminated to inappropriate parties. Confidential Information refers to non-public information, including information concerning Debtors' assets, liabilities, business operations, projections, analyses, compilations, and studies. Confidential Information will also include (i) any notes, summaries, compilations, memoranda, or similar written materials disclosing or discussing Confidential Information; (ii) any written Confidential Information that is discussed or presented orally; and (iii) any other Confidential Information conveyed to the Committee orally that Debtors or their advisors or other agents advise the Committee should be treated as confidential. Privileged Information refers to information subject to the attorney-client or other state, federal, or other jurisdictional law privilege, whether the privilege is solely controlled by the committee or is a joint privilege with debtor or some other party, Ms. Jones explains. About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SOLUTIA INC: Inks Backstopper Registration Rights Agreement ----------------------------------------------------------- In connection with the purchase of 2,812,359 shares of New Common Stock by certain backstop investors in the Creditor Rights Offering, Solutia Inc. has entered into a Registration Rights Agreement with Backstop Investors, Rosemary L. Klein, Solutia's senior vice president, general counsel and secretary, discloses in a regulatory filing with the U.S. Securities and Exchange Commission. Pursuant to the backstopper registration rights agreement, Solutia is required to file a registration statement under the Securities Act of 1933, as amended, to effect the registration of the resale of the shares of new common stock issued to the backstop investors. Once the registration statement has been declared effective by the SEC, Solutia must keep it effective for four years after the later of (i) the initial effective date of the registration statement and (ii) the effective date of its Plan of Reorganization. In the event that the registration statement ceases to be effective, Solutia will (i) cause a replacement registration statement to be filed with the SEC as promptly as practicable, (ii) have that replacement registration statement declared effective by the SEC as promptly as practicable after its filing, and (iii) cause that replacement registration statement to remain continually effective and properly supplemented and amended such that, in the aggregate, the shelf registration statement and any replacement registration statement will be kept effective for four years following the first day of effectiveness of the initial shelf registration statement. In addition, if Solutia proposes to file certain types of registration statements under the securities act with respect to an offering of its equity securities at a time when the registration statement, or a replacement, is not effective, then Solutia is required to offer the backstop investors the opportunity to include all or part of their shares on the registration statement on the terms and conditions set forth in the registration rights agreement. The registration rights granted in the backstopper registration rights agreement are subject to customary restrictions, including minimums, blackout periods and, if a registration is for an underwritten offering, limitations on the number of shares to be included in the underwritten offering imposed by the managing underwriter. According to Ms. Klein, the backstopper registration rights agreement contains customary indemnification and contribution provisions, as well as representations and warranties by Solutia and by the Backstop Investors. The company will be responsible for expenses relating to the registrations contemplated by the backstopper registration rights agreement, subject to certain limitations. The Backstop Investors include: -- HIGHLAND CRUSADER HOLDING CORPORATION, -- LONGACRE FUND MANAGEMENT, -- MERRILL LYNCH PIERCE, FENNER & SMITH INCORPORATED, -- GMAM INVESTMENT FUNDS TRUST II, -- RECAP INTERNATIONAL (MASTER) LTD., -- INSTITUTIONAL BENCHMARK SERIES (MASTER FEEDER) LTD., -- SOUTHPAW ASSET MANAGEMENT LP, and -- UBS SECURITIES LLC About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 4, 2008, Standard & Poor's Ratings Services raised its corporate credit rating on Solutia Inc. to 'B+' from 'D', following the company's emergence from bankruptcy on Feb. 28, 2008, and the implementation of its financing plan. The outlook is stable. S&P also affirmed its 'B+' rating and '3' recovery rating on Solutia's proposed senior secured term loan. In addition, S&P assigned its 'B-' rating to Solutia's $400 million unsecured bridge loan facility. S&P also withdrew its 'B-' rating on the proposed $400 million unsecured notes, which have been replaced by the bridge facility in Solutia's capital structure. SOLUTIA INC: Appoints New Members to the Board of Directors ----------------------------------------------------------- These individuals became members of Solutia Inc.'s board of directors by operation of the Debtors' fifth amended joint plan of reorganization: (a) Class I Directors -- Term expiring in 2009 Robert K. DeVeer, Jr. J. Patrick Mulcahy Gregory C. Smith (b) Class II Directors -- Term expiring in 2010 Eugene I. Davis James P. Heffernan W. Thomas Jagodinski (c) Class III Directors -- Term expiring in 2011 William T. Monahan Robert A. Peiser Jeffry N. Quinn On the effective date, five directors stepped down from the board of directors in connection with Solutia's emergence from Chapter 11 -- Paul H. Hatfield, Robert H. Jenkins, Frank A. Metz, Jr., Sally G. Narodick and John B. Slaughter. Rosemary L. Klein, Solutia Inc.'s senior vice president, general counsel and secretary, discloses in a regulatory filing with the U.S. Securities and Exchange Commission that the new non-employee members of Solutia's Board will receive a $50,000 annual cash retainer, payable quarterly, and an annual stock retainer of shares with a value of $50,000 payable once a year. Upon joining the Board, each non-employee director will receive a one-time grant of restricted shares with a value of $100,000. All shares will vest one-third annually over the three-year period following the grant. Within five years of joining the board, all directors are required to own and hold Solutia's stock with a value of $200,000, which is equal to four years of the annual cash retainer, Ms. Klein says. The non-employee lead director will receive an additional annual cash retainer of $30,000. Committee chairs will receive an additional cash retainer of $15,000 while other committee members will receive an additional annual cash retainer of $7,500. No additional fees for attendance at regularly scheduled meetings will be paid. In addition, non-employee directors may participate in Solutia's non-employee director stock compensation plan, under which various forms of stock-based compensation could be granted at the discretion of the executive compensation and development committee of Solutia's Board. A copy of the annual incentive plan, which will be effective for the next five years, at which time Solutia's shareholders will need to re-approve the plan or approve a new plan, is available for free at: http://ResearchArchives.com/t/s?28fa In a separate filing, Ms. Klein states that upon recommendation of the ECDC, the Board has granted restricted stock units and stock options to approximately 225 executives, managers and directors. The grants were effective upon the effective date. * An aggregate of 1,016,560 restricted shares and 176,800 restricted stock units, equal to 2% of total shares of new common stock outstanding. These restricted shares and restricted stock units will vest one-third annually over the three-year period following the date of grant; and * An aggregate of 3,000,000 stock options, equal to 5% of total shares of new common stock outstanding. These options have an exercise price of $17.33. These will vest one-third annually over the three-year period following the date of grant. About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 4, 2008, Standard & Poor's Ratings Services raised its corporate credit rating on Solutia Inc. to 'B+' from 'D', following the company's emergence from bankruptcy on Feb. 28, 2008, and the implementation of its financing plan. The outlook is stable. S&P also affirmed its 'B+' rating and '3' recovery rating on Solutia's proposed senior secured term loan. In addition, S&P assigned its 'B-' rating to Solutia's $400 million unsecured bridge loan facility. S&P also withdrew its 'B-' rating on the proposed $400 million unsecured notes, which have been replaced by the bridge facility in Solutia's capital structure. SOLUTIA INC: Inks Distribution Agreement with Funding Co. --------------------------------------------------------- Solutia Inc. is the sole member of Funding Co., a special purpose, tax-efficient, bankruptcy remote limited liability company that was established for purposes of holding, investing and distributing certain proceeds from the creditor rights offering in accordance with the amended and restated Monsanto settlement agreement. Pursuant to Funding's limited liability company agreement, Funding will be managed by a board of managers consisting of one or more managers, including an independent manager, according to Rosemary L. Klein, Solutia's senior vice president, general counsel and secretary, in a regulatory filing with the U.S. Securities and Exchange Commission. Subject to certain limitations set forth in the Monsanto settlement agreement, the Board and any individual manager authorized by the Board will have the authority to bind Funding in any manner expressly permitted by and in compliance with the Monsanto Settlement Agreement, Ms. Klein says. Funding will be dissolved upon the earlier to occur of (i) two years after the distribution of all of Funding's assets in accordance with the Monsanto settlement agreement, and (ii) the entry of a decree of judicial dissolution under Section 18-802 of the Delaware Limited Liability Company Act. On the effective date, Funding was funded with $45,679,000 in proceeds from the creditor rights offering remaining after the creation and funding of the retiree trust, and $29,321,000 for payment of Monsanto Company's administrative expense claim. In accordance with the terms of the Monsanto settlement agreement, the $45,679,000 will be made available to pay for post-emergence remediation and cleanup costs in connection with Shared Sites. Monsanto Settlement Agreement As reported in the Troubled Company Reporter on March 11, 2008, in accordance with its fifth amended joint plan of reorganization, Solutia Inc. entered into an amended and restated Monsanto settlement agreement; indemnification agreement with Pharmacia Corporation; and first amended and restated retiree settlement agreement with certain parties, Rosemary L. Klein, Solutia's senior vice president, general counsel and secretary, discloses in a regulatory filing with the U.S. Securities and Exchange Commission. The Monsanto settlement and Pharmacia indemnity agreements provide that Monsanto will fund post-emergence the environmental remediation obligations and related environmental liabilities at sites owned, operated or used by Pharmacia, but which Solutia never owned, operated or used. Solutia and Monsanto will share the environmental remediation obligations and related environmental liabilities for the Anniston, Alabama, and Sauget, Illinois offsite remediation projects, according to Ms. Klein. Pursuant to the Monsanto Settlement Agreement, Monsanto has agreed to assume financial responsibility for all litigation relating to property damage, personal injury, products liability or premises liability or other damages related to asbestos, PCB, dioxin, and other chemicals manufactured before Solutia's spin off from Pharmacia on Sept. 1, 1997. Monsanto's funding of the environmental remediation activities and the resulting claim against Solutia, which Monsanto has asserted, are being resolved through the Plan, Ms. Klein relates. Solutia will remain responsible for the environmental liabilities at sites that it owned or operated after the Spin-off. A full-text copy of the Monsanto Settlement Agreement is available for free at: http://ResearchArchives.com/t/s?28f6 About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, engage in the manufacture and sale of chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. (Solutia Bankruptcy News, Issue No. 121; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on March 4, 2008, Standard & Poor's Ratings Services raised its corporate credit rating on Solutia Inc. to 'B+' from 'D', following the company's emergence from bankruptcy on Feb. 28, 2008, and the implementation of its financing plan. The outlook is stable. S&P also affirmed its 'B+' rating and '3' recovery rating on Solutia's proposed senior secured term loan. In addition, S&P assigned its 'B-' rating to Solutia's $400 million unsecured bridge loan facility. S&P also withdrew its 'B-' rating on the proposed $400 million unsecured notes, which have been replaced by the bridge facility in Solutia's capital structure. TOLL BROTHERS: Posts $96 Million Net Loss in Fiscal 2008 1st Qtr. ----------------------------------------------------------------- Toll Brothers Inc. reported a net loss of $96.0 million for the first quarter ended Jan. 31, 2008, which included pre-tax write- downs of $245.5 million, $27.8 million of which was attributable to joint ventures. Excluding write-downs, FY 2008's first-quarter earnings were $57.3 million. FY 2007's first-quarter net income was $54.3 million, including pre-tax write-downs and a $9.0 million goodwill impairment, together totaling $105.9 million. Excluding write-downs, FY 2007's first-quarter earnings were $118.9 million. FY 2008's first-quarter total revenues were $842.9 million, 23.0% lower than FY 2007's first-quarter total revenues of $1.09 billion. FY 2008's first-quarter-end backlog was $2.40 billion, 42.0% lower than FY 2007's first-quarter-end backlog of $4.15 billion. FY 2008 first-quarter net (after cancellations) signed contracts totaled 647 homes, or $375.1 million, a decline of 37.0% in units and 50.0% in dollars, compared to FY 2007's first-quarter results of 1,027 net signed contracts, or $748.7 million. The average price per unit of gross contracts signed in FY 2008's first quarter was $634,000, compared to $646,000 in FY 2007's fourth quarter and $730,000 in FY 2007's first quarter. The year- over-year decline in average price was due primarily to a shift in the company's product mix, as well as to some additional incentives. Robert I. Toll, chairman and chief executive officer, stated: "The selling season, which we believe starts in mid-January, has been weak for the third year in a row. We have seen a few glimmers of hope, for example, in the Naples, Florida area and the suburban Washington D.C. market. The improvement in Naples, which was a tremendous market before the downturn, is noteworthy because from March 2006 through late 2007, it seemed as though we couldn't give away a home there. In metro D.C., which was among the first markets to weaken, we have seen the glimmer before and it faded; perhaps this time it won't. "We continue to conservatively trim our land position and focus on maintaining our strong balance sheet and liquidity. With over $950.0 million in cash and over $1.2 billion available under our bank credit facility, which matures in March 2011, we believe we are positioned to profit from opportunities that may arise in the current market. Balance Sheet At Jan. 31, 2008, the company's consolidated balance sheet showed $7.02 billion in total assets, $3.60 billion in total liabilities, $8.0 million in minority interest, and $3.41 billion in total shareholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?28fe About Toll Brothers Toll Brothers Inc. (NYSE: TOL) -- http://tollbrothers.com/-- builds luxury single-family detached and attached home communities, master planned luxury residential resort-style golf communities and urban low-, mid- and high-rise communities, principally on land it develops and improves. The company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management and landscape subsidiaries. The company also operates its own lumber distribution, and house component assembly and manufacturing operations. * * * As reported in the Troubled Comany Reporter on July 18, 2007, Moody's Investors Service affirmed the ratings of Toll Brothers Inc. and Toll Brothers Finance Corp., including the Baa3 rating on the existing senior note issues and Ba2 rating on the subordinated note issue. The ratings outlook was changed to negative from stable. TOLL BROTHERS: Warns of Significant Losses from Joint Ventures -------------------------------------------------------------- Toll Brothers Inc. has investments and commitments to certain joint ventures with unrelated parties to develop land. According to the company, these joint ventures usually borrow money to help finance their activities. In certain circumstances, the joint venture participants, including Toll, are required to provide guarantees of certain obligations relating to the joint ventures. As a result of the continued downturn in the homebuilding industry, some of these joint ventures or their participants have or may become unable or unwilling to fulfill their obligations, the company said in its quarterly report filed with the U.S. Securities and Exchange Commission for the period ended Jan. 31, 2008. In addition, Toll said it may not have a controlling interest in these joint ventures and, as a result, it may not be able to require these joint ventures or their participants to honor their obligations or renegotiate them on acceptable terms. If the joint ventures or their participants do not honor their obligations, the company stated that it may be required to expend additional resources or suffer losses, which could be significant. Toll chief financial officer Joel Rassman said that the company has several partners who are in "visible financial stress" and added that he can not disclose further details, The Wall Street Journal relates. Bloomberg notes that Toll's partners include Kimball Hill Inc. Kimball Hill's Troubles As reported in the Troubled Company Reporter on Feb. 27, 2008, on February 21, Kimball Hill amended its limited duration waiver agreement and amendment dated Jan. 25, 2008, with respect to certain of the financial covenants under its existing amended and restated credit agreement dated Aug. 10, 2007. As result of these amendments, the company is in compliance with its financial covenants contained in the credit agreement as of Sept. 30, 2007, and Dec. 31, 2007. On Feb. 21, 2008, the TCR related that Kimball Hill Homes reached a limited duration waiver agreement with its lender group that extends until March 14, 2008. The TCR also said on Jan. 24, 2008, that Chicago-based Deloitte & Touche LLP expressed substantial doubt about the ability of Kimball Hill to continue as a going concern after it audited the company's financial statements for the year ended Sept. 30, 2007. The auditor pointed to the company's losses from operations and default under its senior credit facility. Selling Season Started Weak, CEO Says Robert I. Toll, chairman and chief executive officer, stated: "The selling season, which we believe starts in mid-January, has been weak for the third year in a row. We have seen a few glimmers of hope, for example, in the Naples, Florida area and the suburban Washington D.C. market. The improvement in Naples, which was a tremendous market before the downturn, is noteworthy because from March 2006 through late 2007, it seemed as though we couldn't give away a home there. In metro D.C., which was among the first markets to weaken, we have seen the glimmer before and it faded; perhaps this time it won't. "We continue to conservatively trim our land position and focus on maintaining our strong balance sheet and liquidity. With over $950 million in cash and over $1.2 billion available under our bank credit facility, which matures in March 2011, we believe we are positioned to profit from opportunities that may arise in the current market. "Ceaseless talk of a recession continues to dampen the mood of consumers in general, whether or not a recession actually occurs. For home buyers, we believe this drumbeat, coupled with concerns over mortgages, the direction of home prices, and foreclosures, has kept pent-up demand on the sidelines. "Household formations continue to grow as they are projected to do into the next decade. Personal wealth continues to be created as well. Mortgage rates are low, unemployment is still low by historical standards, and housing affordability has continued to improve. Conforming and jumbo mortgages are quite available to buyers such as ours, with strong credit scores and reasonably leveraged home purchases. We believe that revived buyer confidence is paramount to getting the market moving again. Only when customers believe we are done with housing deflation will the excess supply clear and the market return to equilibrium." As of Jan. 31, 2008, Toll listed $7.0 billion total assets, $3.6 billion total liabilities, and $3.4 billion stockholders' equity. A full-text copy of Toll's first quarter 2008 report is available for free at http://ResearchArchives.com/t/s?28fe About Kimball Hill Kimball Hill Inc., -- http://www.kimballhillhomes.com/ -- still owned and operated by the Hill family, builds mid-priced single- family detached homes, townhomes, and condominiums under the name Kimball Hill Homes in the Chicago area and in California, Florida, Nevada, Texas, and Wisconsin. Subsidiary KH Financial offers mortgage financing and refinancing of investment properties in about half a dozen states. About Toll Brothers Toll Brothers Inc. (NYSE: TOL) -- http://www.tollbrothers.com/-- designs, builds, markets and arranges finance for single-family detached and attached homes in luxury residential communities. The company is also involved, directly and through joint ventures, in projects where it is building, or converting existing rental apartment buildings into high-, mid- and low-rise luxury homes. During the fiscal year ended Oct. 31, 2007 (fiscal 2007), the company delivered 7,023 homes from 385 communities. In fiscal 2007, the company has introduced 70 new single-family detached models, 28 new single-family attached models and 32 new condominium units. The four segments operated by the company includes the North, the Mid-Atlantic, the South and the West. TOTES ISOTONER: Northern Cap Acquisition Won't Affect S&P's Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that there would be no immediate effect on its rating or outlook on totes Isotoner Inc. (B/Negative/--) following the company's announcement of its acquisition of Northern Cap Holdings Inc. (dba Northern Cap & Glove) for an undisclosed amount. The acquired business is a maker of branded and private-label headwear and gloves for men, women, and children. Licensed products for Northern Cap & Glove include Dockers, Goretex, and Karen Neuberger. While terms of this transaction were not disclosed, S&P expects that totes Isotoner will maintain leverage in the 5.5x area and EBITDA interest coverage in the 2x area, in line with historical levels and S&P's expectations. If the company is able to reduce leverage to 5x and below, S&P may consider revising the outlook to stable. On the other hand, if credit protection measures deteriorate, S&P would review the ratings for a possible downgrade. TOUSA INC: Officials Expect to Finish Colorado Project as Planned ----------------------------------------------------------------- TOUSA Homes Inc. officials expect to finish an Engle Homes project to build 30 homes at Coyote Run in Mead (Colorado) on time, Kacia Munshaw of Longmont Times-Call (Col.) reports. Tousa Homes spokeswoman Jennifer Mercer said building will continue as planned and is expected to be completed in the next two years. This is despite the bankruptcy filing of Engle Homes' parent ToUSA Homes in January. Engle Homes' projects in northern Colorado are the Coyote Run, Fox Meadow in Longmont, Creekside in Erie and Sidehill Condominiums in Fort Collins, the report stated. The Mead-based development consists of 62 homes ranging from 2,000 to 3,500 finished square feet. As reported in the Troubled Company Reporter on Feb. 1, 2008, TOUSA received interim approval from the Bankruptcy Court to borrow $135,000,000 in post-bankruptcy financing from Citigroup Global Markets Inc. At the request of the Official Committee of Unsecured Creditors of TOUSA, the U.S. Bankruptcy Court for the Southern District of Florida adjourned the hearing to consider final approval of the DIP Motion to March 20, 2008. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. TRW AUTOMOTIVE: Earns $56 Million in Quarter Ended December 31 -------------------------------------------------------------- TRW Automotive Holdings Corp. reported financial results for fourth-quarter ended Dec. 31, 2007, with net earnings of $56 million, which compares to the prior year result of $33 million. The company's full-year 2007 net earnings for the year were $90 million which compares to 2006 earnings of $176 million. "In 2007, TRW delivered solid operating results, including record sales and outstanding cash flow, that exceeded the business objectives set at the beginning of the year," John Plant, president and chief executive officer, said. "Our achievements in 2007 related to our financial performance, together with steady expansion overseas, debt refinancing and safety advancements have helped the company grow stronger despite challenging industry conditions." "We have performed remarkably well since becoming an independent company, providing solid results to our stakeholders and capitalizing on our position as the world's preeminent active and passive safety systems supplier," Mr. Plant added. "Now in 2008, we are a significantly larger, more diverse enterprise that is reaching further into the world's growing markets with a portfolio of safety technology that is unrivaled in the marketplace. We continue to build for the future and are focused on moving the company forward profitably over the long term." Cash Flow and Capital Structure Net cash provided by operating activities during the fourth quarter was $826 million, which compares to $397 million in the prior year period. Fourth quarter capital expenditures were $174 million compared to $195 million in 2006. For full-year 2007, net cash flow from operating activities was $737 million, which compares to $649 million in the prior year. Capital expenditures were $513 million in 2007, which compares to $529 million in 2006. Full year 2007 operating cash flow after capital expenditures, referred to as free cash flow, was $224 million, which compares to $120 million in 2006. The company completed its debt recapitalization plan during the second quarter of 2007, including the refinancing of its $2.5 billion credit facilities on May 9, 2007. Additionally, on March 26, 2007, the company completed its $1.5 billion Senior Note offering and repurchased substantially all of the existing $1.3 billion Notes through a tender offer. The company incurred debt retirement charges of approximately $155 million in 2007 related to these transactions. As of Dec. 31, 2007, the company had $3,244 million of debt and $899 million of cash and marketable securities, resulting in net debt of $2,345 million. This net debt outcome is $98 million lower than the balance at the end of 2006. At Dec. 31, 2007, the company's balance sheet showed total assets of $12.29 billion, total liabilities of $8.96 billion and total stockholders' equity of $3.19 billion. About TRW Automotive Holdings Headquartered in Livonia, Michigan, TRW Automotive Holdings Corp. (NYSE: TRW) -- http://www.trwauto.com/-- is an automotive supplier. Through its subsidiaries, it employs approximately 63,000 people in 25 countries. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. * * * TRW Automotive Holdings continues to carry Fitch Ratings' 'BB' long term issuer default rating, which was placed in October 2004. TUCSON ELECTRIC: S&P Assigns 'BB-' Rating on $121 Mil. 2008 Bonds ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its unsecured ratings for Tucson Electric Power Co. by one notch to 'BB-' and assigned its 'BB-' rating to the proposed offering of up to $121 million of 2008 series A industrial development bonds issued by the Pima County Industrial Development Authority in Arizona. The Pima bonds will be unsecured obligations of TEP, which is the obligor. TEP will use the offering's proceeds to pay down its revolver balances of about $75 million as of March 7, 2007 and to prefinance a portion of TEP's $138 million maturity of collateral trust obligations, due August 2008. The outlook is stable. The upgrade reflects improvement in TEP's ratio of priority debt to assets. Under S&P's current criteria, S&P assigns speculative- grade debt ratings one notch below the issuer credit rating ('BB', in TEP's case) if the maximum amount of secured debt that could be outstanding is between 15% and 30% of the utility's assets. "Increases in TEP's asset base and our expectation that some of the $138 million maturity will be retired with unsecured debt drive the improvement," said Standard & Poor's credit analyst Anne Selting. TEP's business risk profile is 'strong', reflecting favorable factors that include: TEP's low-cost coal-fired generation sufficient to meet the majority of its retail loads, modest growth in its service territory, and the absence of significant new generation investment. Weaknesses in the business profile include near-term uncertainty over the outcome of TEP's retail rates filed in July 2007, and a retail rate cap in place until the end of 2008 that puts TEP at risk for forced outages, and the potential for carbon regulation, which could impose material costs given TEP's coal-dominated portfolio. TEP is a vertically integrated, investor-owned utility in Arizona, serving more than 397,000 customers in Tucson and southeastern Arizona. WEIGHT WATCHERS: Dec. 29 Balance Sheet Upside-Down by $926.3 Mil. ----------------------------------------------------------------- Weight Watchers International Inc.'s consolidated balance sheet at Dec. 29, 2007, showed $1.05 billion in total assets and $1.97 billion in total liabilities, resulting in a $926.3 million total shareholders' deficit. At Dec. 29, 2007, the company's consolidated balance sheet also showed strained liquidity with $186.3 million in total current assets available to pay $358.4 million in total current liabilities. The company reported net income of $39.8 million in the fourth quarter ended Dec. 29, 2007, versus net income of $44.3 million in the fourth quarter of 2006. The prior year included a benefit of $6.3 million associated with the reversal of tax reserves. In addition, during the first quarter of 2007, the company increased its debt level to finance its self-tender and repurchase of 19.1 million shares. As a result of these transactions, interest expense in the fourth quarter of 2007 was $26.7 million, up from $13.6 million in the fourth quarter of 2006. For the fourth quarter of 2007, net revenues increased 21.0%, or $58.6 million, to $344.0 million. Full Year 2007 Results For the full year 2007, net revenues increased 19.0%, or $233.8 million, to $1.47 billion. Full year 2007 net income was $201.2 million versus $209.8 million in 2006. Results for 2007 and 2006 included early extinguishment of debt expense of $3.0 million and $1.3 million, respectively. Results for 2006 also included a benefit of $6.3 million associated with the reversal of tax reserves. The company increased its debt level during the first quarter of 2007. As a result, interest expense in the full year 2007 was $109.3 million, up from $49.5 million in the full year 2006. Commenting on the company's full year 2007 results, David Kirchhoff, president and chief executive officer, said, "During 2007, we delivered solid financial performance while taking the necessary steps to lay the foundation that will enable us to realize our long-term strategic goals. As I look to 2008, we again anticipate solid financial performance as we continue to strengthen our business and capitalize on our opportunities." Full-text copies of the company's consolidated financial statements for the year ended Dec. 29, 2007, are available for free at http://researcharchives.com/t/s?28fc About Weight Watchers Headquartered in New York City, Weight Watchers International Inc. (NYSE: WTW) -- http://www.weightwatchersinternational.com/-- provides weight management services, operating globally through a network of company-owned and franchise operations. * * * Todate Weight Watchers International Inc. carries Standard & Poor's 'BB' corporate rating assigned on Jan. 5, 2007. Outlook is Stable. WELLMAN INC: Wants to Hire Ernst & Young as Tax Advisors -------------------------------------------------------- Wellman, Inc., and its affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Ernst & Young LLP, as their auditors and tax advisors nunc pro tunc Feb. 22, 2008. The Debtors selected the firm because of its extensive experience in delivering auditing and tax services in Chapter 11 cases. Ernst & Young is also familiar with the Debtors' business affairs as a result of its previous employment with the Debtors. As advisors, Ernst & Young will provide the Debtors an annual audit of their financial statements for the year ended December 31, 2007, as well as an audit of the effectiveness of the Debtors' internal control over financial reporting as of December 31, 2007. The firm will also render on-call routine tax advisory services, and tax consultation regarding the Debtors' cases, including: (a) understanding of the reorganization or restructuring alternatives the Debtors are evaluating with their existing creditors, that may result in a change in the equity, capitalization and ownership of the Debtors' shares or assets; (b) assistance and advice to the Debtors in developing an understanding of the tax implications of their bankruptcy restructuring alternatives and post-bankruptcy operations, and in securing rulings from the Internal Revenue Service or other state tax authorities; (c) tax advisory services regarding availability and preservation of tax attributes, assistance with tax issues arising in the ordinary course of business while in bankruptcy, and research and analysis of federal, state or local income and franchise tax issues arising during the bankruptcy period; (d) tax advisory services regarding the validity of tax claims in order to determine if the tax amount claimed correctly reflects the true tax liability pursuant to applicable tax law; (e) analysis of legal and other professional fees incurred during the bankruptcy period for purposes of determining future deductibility of these costs for U.S. Federal, state and local tax purposes; (f) documentation of tax analysis, recommendations, among others, for any proposed restructuring alternative, bankruptcy tax issue or other tax matter; (g) advisory services regarding tax analysis and research related to acquisitions and divestitures; (h) advisory services regarding tax analysis and research related to tax-efficient domestic restructuring; (i) testimony regarding Ernst & Young's work done on the Debtors' tax attributes and overall tax posture, and the impact of bankruptcy on these attributes and posture; and (j) assistance to the Debtors in any tax work or analysis related to submissions to Court, including preparation of documents, analyses or other materials. In exchange for Ernst & Young's services, the firm will be paid on an hourly basis and reimbursed for the expenses it may incur in the rendition of its services. For auditing services, the firm will be paid based on these hourly rates: National Executive $890-$1,180 Director/Principal/Partner Executive Director/ $650-$870 Principal/Partner Senior Managers $540-$720 Managers $410-$550 Seniors $330-$450 Staff $190-$250 Ernst & Young will be compensated for tax consultation and routine tax advice services based on these hourly rates: National Executive $660-$860 Director/Principal/Partner Executive Director/ $520-$600 Principal/Partner Manager/Senior Manager $345-$520 Staff/Senior $180-$320 Lawrence Herlong, a partner at Ernst & Young, assures the Court that the firm does not hold or represent any interest materially adverse to the Debtors. He adds that the firm is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WESTWAYS FUNDING: Nine Classes Get Moody's Negative Rating Actions ------------------------------------------------------------------ Moody's Investors Service has taken negative rating actions on nine classes of notes issued by Westways Funding XI, Ltd., a market value CDO issuer. This rating action is: (1) $202,000,000 Class A-PT Floating Rate Senior Notes Due 2013 -- Current Rating: Baa2, on review for downgrade -- Prior Rating: Aa2, on review for downgrade (2) $30,000,000 Class LA Senior Loan Interests Due 2013 -- Current Rating: Baa2, on review for downgrade -- Prior Rating: Aa2, on review for downgrade (3) $191,750,000 Class A-1 Floating Rate Senior Notes Due 2013 -- Current Rating: Baa2, on review for downgrade -- Prior Rating: Aa2, on review for downgrade (4) $63,000,000 Class A-2 Floating Rate Senior Notes Due 2013 -- Current Rating: Baa2, on review for downgrade -- Prior Rating: Aa2, on review for downgrade (5) $31,500,000 Class B Floating Rate Senior Subordinate Notes Due 2013 -- Current Rating:B2, on review for downgrade -- Prior Rating: Baa2, on review for downgrade (6) $21,500,000 Class LB Subordinate Loan Interests Due 2013 -- Current Rating: B2, on review for downgrade -- Prior Rating: Baa2, on review for downgrade (7) $31,500,000 Class C Floating Rate Subordinate Notes Due 2013 -- Current Rating: Caa2, on review for downgrade -- Prior Rating: B2, on review for downgrade (8) $8,500,000 Class LC Subordinate Loan Interests Due 2013 -- Current Rating: Caa2, on review for downgrade -- Prior Rating: B2, on review for downgrade (9) $31,500,000 Class D Floating Rate Junior Subordinate Notes Due 2013 -- Current Rating: Ca -- Prior Rating: Caa2, on review for downgrade This rating action reflects the fact that a Termination Event was triggered on March 10. As a result, portfolio assets will be liquidated within the next ten days to delever the transactions liabilities. Moody's noted that although the underlying assets are composed of agency and non-agency Aaa-rated mortgage backed securities, current market turmoil makes asset valuation highly uncertain. Moody's also stated that it has observed continued deterioration in the credit enhancement levels for the rated notes due to: 1) continued price declines in the market value of the collateral portfolio in recent weeks, and 2) increased disparity between the marked-to-market values of the underlying assets and realized sales prices. ZIFF DAVIS: Court Okays Motion to Use Noteholders' Cash Collateral ------------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of New York authorized Ziff Davis Media, Inc., and its debtor- affiliates, on an interim basis, to use up to $5,000,000 of their secured lenders' cash collateral, for the period starting from March 5, 2008, and expiring on the earlier of (i) the entry of a final order in connection with the cash collateral use, or (ii) April 4, 2008. As approved by a noteholder group -- consisting of U.S. Bank National Association, as collateral trustee, and holders of 80% of the Floating Rate Senior Secured Notes -- the Cash Collateral may be used during the specified period, solely to meet payroll obligations and pay certain carve-out and other expenses essential to the preservation of the Debtors and their estates. The remaining Cash Collateral will be used in accordance with the terms of a six-month budget formulated by the Debtors' management and financial advisors, and approved by the Noteholders' financial advisors, Judge Lifland maintained. The Court held that the Debtors will not, without prior written consent of U.S. Bank: -- use the Cash Collateral with respect to any one line item in the Cash Collateral Budget in an amount exceeding 15% of the amount originally identified for the line item in any week, so long as the aggregate amount of the variance from the Budget for any week on a rolling net basis is not exceeded by more than 10%; or -- make payment of any cost or expense in advance of the time for payment as reflected in the Cash Collateral Budget. Three days after the Court approves on a final basis the use of the Noteholders' Cash Collateral, the Debtors will turn over all the Cash Collateral to U.S. Bank, for distribution to holders of the Prepetition Senior Secured Debt Obligations, except for the amount the Debtors are authorized to use pursuant to the Court's Final Order. However, the Court directed the Debtors to retain $7,500,000 of the Cash Collateral in a segregated, interest- bearing account at Merrill Lynch, Pierce, Fenner & Smith Inc., none of which will be available for use to the Debtors. As adequate protection from the diminution of the Noteholders' cash collateral, Judge Lifland: (a) granted, U.S. Bank, as collateral trustee, a perfected replacement security interest in and valid, binding, enforceable and perfected liens on all postpetition collateral, which liens and security interests will be subject only to a Carve Out for (i) fees to the Bankruptcy Clerk and the U.S. Trustee and (ii) up to $1,250,000 for professionals retained in the Chapter 11 cases. The term "Postpetition Collateral" means all of each Debtor's assets with the exception of, among other things, proceeds from avoidance actions under Sections 502(d), 544, 545, 547, 548, 549, 550 or 553 of the Bankruptcy Code; (b) granted U.S. Bank an allowed superpriority administrative expense claim, which will have priority in the Chapter 11 cases, and in any cases under Chapter 7 of the Bankruptcy Code; (c) directed the Debtors to turn over to U.S. Bank, all additional proceeds received on account of the Enterprise Group sale, as and when received, for deposit into the Segregated Account; (d) authorized and directed the Debtors to promptly pay the reasonable fees, costs and expenses of (a) Paul, Weiss, Rifkind, Wharton & Garrison LLP, counsel to the Noteholder Group, and Houlihan Lokey Howard & Zukin, financial advisor to the Noteholder Group, and (b) U.S. Bank, including the reasonable fees and out-of-pocket expenses of its counsel, Faegre & Benson LLP, in accordance with the applicable indenture providing for the Senior Secured Notes; and (e) obligated the Debtors to furnish U.S. Bank and the Noteholders with an updated Cash Collateral Budget on a weekly basis. The Debtors are enjoined and prohibited from, at any time during their bankruptcy proceedings, granting liens in the Prepetition and Postpetition Collaterals to any other parties, pursuant to Section 364(d) of the Bankruptcy Code or otherwise, Judge Lifland said. The Court modified the automatic stay under Section 362 of the Bankruptcy Code, to permit (y) U.S. Bank, for the benefit of the holders of Prepetition Senior Secured Debt Obligations, to receive, collect and apply the Cash Collateral and payments and proceeds in respect of the Prepetition and Postpetition Collaterals, and (ii) the Debtors to grant the Adequate Protection Liens and the Superpriority Claim, all in accordance with the terms and provisions of the Interim Order. The terms of the Cash Collateral Interim Order will terminate upon, among other things: (1) the Debtors' failure to comply with any of the terms or provisions of the Interim Order; (2) a Final Order authorizing postpetition financing; (3) dismissal of any of the Debtors' Chapter 11 cases or converting any of the Debtors' Chapter 11 cases to Chapter 7 of the Bankruptcy Code; (4) the appointment of a Chapter 11 trustee or examiner with enlarged powers in any of the Debtors' Chapter 11 cases, unless the appointment is approved by U.S. Bank and the Noteholders; (5) the Debtors' payment of prepetition claims in excess of $20,000, without the consent of U.S. Bank; and (6) the Debtors' modification or amendment of the Cash Collateral Budget without prior consent of U.S. Bank and the Noteholders. The Court will convene a final hearing on the use of the Noteholders' Cash Collateral on March 27, 2008, at 10:00 a.m. Any objections must be filed with the Court by March 24, at 4:00 p.m. A full-text copy of the Court's Cash Collateral Interim Order is available for free at: http://bankrupt.com/misc/ZIFF_CashColl_InterimOrder.pdf About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 3, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Seeks Authority to Hire Alvarez & Marsal as Advisors ---------------------------------------------------------------- Ziff Davis Media, Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Alvarez & Marsal North America, LLC, as their restructuring and financial advisors in connection with their Chapter 11 cases. Pursuant to an engagement agreement between the Debtors and A&M, dated August 10, 2007, the Debtors hired the firm to provide legal advice in connection with the preparation of the Chapter 11 cases. Mark D. Moyer, chief restructuring officer of Ziff Davis Media Inc., relates that the Debtors selected A&M because the firm has extensive experience and an excellent reputation in providing high quality restructuring and financial advisory services to debtors and creditors in bankruptcy reorganizations and other restructurings. Mr. Moyer further states that A&M has developed relevant experience and expertise regarding the Debtors as a result of the pre-bankruptcy work the firm performed on behalf of the Debtors. A&M is now intimately familiar with the Debtors' financial affairs, debt structure, operations, and related matters, Mr. Moyer adds. As the Debtors' restructuring advisor and financial advisor, A&M will: * assist the Debtors in the evaluation of their business plan for their ongoing operations; * assist the Debtors in evaluating their liquidity and in the preparation of a rolling 13-week cash flow forecast; * evaluate the Debtors' management organization, particularly in respect to the finance area, based on the planned reorganization of the Debtors' business units; * assist the Debtors in financing issues, including the preparation of reports and liaison with creditors and customers; * assist the Debtors with respect to a potential filing under Chapter 11 of the Bankruptcy Code and, in the event of a filing, with respect to matters incident thereto; and * provide other services as are approved by the Board of Directors and agreed to by A&M. As appropriate and to the extent requested and directed by the Debtors' management, A&M will also: * assist with the formulation, evaluation, implementation of various options for a restructuring or reorganization of the Debtors, or its assets or businesses; * provide financial advisory services to the Debtors in connection with developing, and seeking approval for, a restructuring plan, which may be a plan under Chapter 11 of the Bankruptcy Code; * provide financial advisory services to Debtors in connection with the structuring of any new securities to be issued under the Plan; * assist the Debtors in negotiations with creditors, shareholders and other appropriate parties-in-interest; * if necessary, participate in hearings before the bankruptcy court with respect to matters upon which A&M has provided advice, including coordinating with the Debtors' counsel with respect to testimony in connection therewith; and * provide other services. Joseph A. Bondi, a managing director at A&M, will be responsible for the restructuring consulting services, while George Varughese, a managing director of A&M, will take care of corporate finance services. They will also be assisted by other A&M personnel. In exchange for the contemplated services, the Debtors will pay A&M based on the firm's applicable hourly rates: Professional Hourly Rate ------------ ----------- Managing Director $525 to $690 Director $425 to $525 Associate $325 to $425 Analyst $250 to $300 With respect to all financial advisory services, the Debtors will pay a monthly sum of $75,000 to A&M, starting from August 9, 2007, and on every monthly anniversary date thereafter. Moreover, the Debtors will promptly pay to A&M, a transaction fee of $1,500,000, less 50% of the aggregate amount of the monthly fees earned by A&M, upon the earlier of (a) the consummation of any out-of-court restructuring transaction, and (b) the effective date of a confirmed Plan of Reorganization. Pursuant to a prepetition engagement agreement by the parties, A&M received a retainer for $250,000 in connection with the services rendered prior to the Petition Date, including, without limitation, services related to the preparation of the Chapter 11 cases. The Debtors replenished the retainer by paying $200,000 on February 8, 2008, and $300,000 on February 15, 2008. A&M applied $558,593 from the retainer to satisfy all estimated outstanding amounts owed to A&M as of the Petition Date. A&M intends to apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with the Chapter 11 cases. Richard J. Mizak, a partner of A&M, assures the Court that his firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Seeks Authority to Hire BMC as Claims Agent ------------------------------------------------------- Ziff Davis Media, Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ the BMC Group, Inc., as their notice, claims and balloting agent in their Chapter 11 cases. The Debtors anticipate that the thousands of creditors, equity security holders and other parties-in-interest in the Chapter 11 case may impose heavy burdens on the Court and the Office of the Clerk of the Court. Thus, the Debtors seek to employ BMC to lessen the burdens of the Bankruptcy Clerk's Office. Mark D. Moyer, chief restructuring officer of Ziff Davis Media Inc., relates that the Debtors selected BMC because the firm has substantial experience as a claims and noticing agent and has already developed efficient and cost-effective methods in its area of expertise. As the Debtors' notice and claims agent, BMC will: (a) prepare and serve required notices in the Chapter 11 cases including (i) a notice of the commencement of these chapter 11 cases and the initial meeting of creditors, (ii) notices of objections to claims, (iii) notices of any hearings on a disclosure statement and confirmation of a Plan or Plans of Reorganization; and (iv) other miscellaneous notices as the Debtors or the Court may deem necessary or appropriate for an orderly administration of the Chapter 11 cases; (b) prepare for filing with the Clerk's Office a certificate or affidavit of service within three business days after the service of a particular notice; (c) maintain a Web site at www.bmcgroup.com/ziffdavis where, among other things, electronic copies of all pleadings filed in the Chapter 11 cases will be posted within three business days of filing and may be viewed free of charge; (d) maintain copies of all claims and proofs of interest filed in the Chapter 11 cases; (e) maintain official claims registers in the Chapter 11 cases by docketing all claims and proofs of interest in a claims database; (f) implement necessary security measures to ensure the completeness and integrity of the claims registers; (g) transmit to the Clerk's Office a copy of the claims registers on a weekly basis unless requested more or less frequently by the Clerk's Office; (h) maintain an up-to-date mailing list for all entities that have filed claims or proofs of interest and make the list available upon request to the Clerk's Office or any party in interest; (i) provide access to the public for examination of copies of the claims or proofs of interest filed in the Chapter 11 cases without charge during regular business hours and on a public Web site; (j) record all transfers of claims and, if directed to do so by the Court, provide notice of the transfers; (k) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders, and other requirements; (l) provide temporary employees to process claims as necessary; (m) promptly comply with further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and (n) provide other claims processing, noticing, balloting, and related administrative services as may be requested from time to time by the Debtors. As balloting agent, BMC will: * print ballots including creditor and shareholder specific ballots; * prepare voting reports by plan class, creditor, or shareholder and amount for review and approval by the client and its counsel; * coordinate the mailing of ballots, disclosure statement, and Plan of Reorganization to all voting and non-voting parties and provide affidavit of service; * establish a toll-free "800" number to receive questions regarding voting on the Plan; and * receive ballots at BMC's headquarters, inspect ballots for conformity to voting procedures, date stamping and numbering ballots consecutively, and tabulate and certify the results. Moreover, BMC will assist the Debtors with, among other things, (a) maintaining and updating the master mailing lists of creditors, (b) to the extent necessary, gathering data in conjunction with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs, (c) the tracking and administration of claims, and (d) performing other administrative tasks pertaining to the administration of the Chapter 11 cases as may be requested by the Debtors or the Clerk's Office. The Debtors will pay BMC for its services, expenses and supplies at the rates or prices in effect on the day the services or supplies are provided to the Debtors, in accordance with BMC's fee schedule. Moreover, before the Petition Date, the Debtors paid BMC a $15,000 retainer. In addition, the fees and expenses of BMC incurred for the services rendered are to be treated as an administrative expense of the Debtors' estates, Mr. Moyer notes. Each notice and claims agent invoice will be be paid by the Debtors within 10 business days of the date the invoice has been received by the Debtors, unless BMC is advised, within the 10-day period, that the Debtors object to the invoice. If the Debtors object to the invoice, a hearing will be scheduled before the Court to consider the disputed invoice, and the Debtors will remit to BMC only the undisputed portion of the invoice and, if applicable, pay the remainder to BMC upon the resolution of the dispute, as mandated by the Court. Tinamarie Feil, chief financial officer of BMC, assures the Court that her firm is a "disinterested person," as the term is defined in Section 101(14) of the Bankruptcy Code. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) * S&P Report Estimates Subprime Writedowns Could Reach $285 Bil. ---------------------------------------------------------------- Standard & Poor's Ratings Services broadly estimates that valuation write-downs of subprime asset-backed securities, primarily collateralized debt obligations of ABS but also subprime residential mortgage-backed securities, could reach $285 billion for the global financial sector, but that the end of write-downs is now in sight for large financial institutions. In a report published, "Subprime Write-Downs Could Reach $285 Billion, But Are Likely Past The Halfway Mark," Standard & Poor's notes that the figure is slightly higher than the $265 billion it published earlier this year because it since then has increased its assumption of percentage write-downs of high- grade CDOs of ABS with collateral from 2006 and 2007. "The positive news is that, in our opinion, the global financial sector appears to have already disclosed the majority of valuation write-downs of subprime ABS," said Standard & Poor's credit analyst Scott Bugie, lead author of the report. In a companion report also published, "More Subprime Write-Downs To Come, But The End Is Now In Sight For Large Financial Institutions," Standard & Poor's notes that in particular the bulk of the write-downs of subprime securities may be behind the banks and brokers that have already announced their results for full- year 2007. "There may be some additional marks to market as market indicators have shown deterioration in the first quarter. However, when we dissect the percentage of write-downs taken against various types of exposures, in our opinion the magnitude of some write-downs is greater than any reasonable estimate of ultimate losses," said Standard & Poor's credit analyst Tanya Azarchs, lead author of that report. "Based on available information, we believe that the largest players can be seen as having undertaken a rigorous valuation methodology to come up with conservative valuations," added Ms. Azarchs. "But right now, market forces are placing further downward pressure on valuations, and we expect to see more write-downs related to these pressures in coming weeks and months," Mr. Bugie said. "We believe that any near-term positive impact of reducing subprime risk in the financial system via increased disclosure and write-downs will be offset by worsening problems in the broader U.S. real estate market and in other segments of the credit markets," he added. A major repricing of credit risk is taking place across the debt markets, with credit spreads having further widened in most segments since the beginning of 2008, after opening up in the second half of 2007. If the wider spreads hold to the end of the first quarter or half of this year, financial institutions will suffer further market value write-downs of a broad range of exposures, including leveraged loans. * S&P Downgrades 63 Tranches' Ratings From 11 Cash Flows and CDOs ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 63 tranches from 11 U.S. cash flow and hybrid collateralized debt obligation transactions. S&P removed 13 of the lowered ratings from CreditWatch with negative implications. Additionally, S&P affirmed its 'AAA' ratings on four tranches and removed them from CreditWatch negative. The ratings on seven of the downgraded tranches from three transactions remain on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. The downgraded tranches have a total issuance amount of $6.912 billion. Four of the 11 transactions are mezzanine structured finance CDOs of asset-backed securities, which are CDOs of ABS collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other SF securities. Three of the 11 transactions are high-grade SF CDOs of ABS, which are CDOs collateralized at origination primarily by 'AAA' through 'A' rated tranches of RMBS and other SF securities. The other four transactions are CDO of CDO transactions that were collateralized at origination primarily by notes from other CDOs, as well as by tranches from RMBS and other SF transactions. This CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS securities. To date, including the CDO tranches listed below and actions on both publicly and confidentially rated tranches, S&P has lowered its ratings on 2,465 tranches from 584 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 1,030 ratings from 255 transactions are currently on CreditWatch negative for the same reasons. In all, S&P has downgraded $204.993 billion of CDO issuance. Additionally, S&P's ratings on $149.567 billion in securities have not been lowered but are currently on CreditWatch negative, indicating a high likelihood of downgrades. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Rating and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Acacia CDO 10 Ltd. A-1 AAA AAA/Watch Neg Acacia CDO 10 Ltd. A-2 AA AAA/Watch Neg Acacia CDO 10 Ltd. B A+ AA+/Watch Neg Acacia CDO 10 Ltd. C BBB A/Watch Neg Acacia CDO 10 Ltd. D BB+ BBB/Watch Neg Broderick CDO 3 Ltd. A-2 BBB+/Watch Neg AAA/Watch Neg Broderick CDO 3 Ltd. A-3 CCC/Watch Neg AAA/Watch Neg Broderick CDO 3 Ltd. A-4 CC AAA/Watch Neg Broderick CDO 3 Ltd. A-5 CC AAA/Watch Neg Broderick CDO 3 Ltd. B CC A+/Watch Neg Broderick CDO 3 Ltd. C CC BB+/Watch Neg Burnham Harbor CDO 2006-1 Ltd. A-2L A+ AA/Watch Neg Burnham Harbor CDO 2006-1 Ltd. A-3L BB+ A/Watch Neg Burnham Harbor CDO 2006-1 Ltd. B-1L CCC BBB/Watch Neg Dalton CDO Ltd. A-1a1 AAA AAA/Watch Neg Dalton CDO Ltd. A-1a2 AA AAA/Watch Neg Dalton CDO Ltd. A-1b1 BBB AAA/Watch Neg Dalton CDO Ltd. A-1b2 BBB AAA/Watch Neg Dalton CDO Ltd. A-2 BB+ AAA/Watch Neg Dalton CDO Ltd. B B- AA/Watch Neg Dalton CDO Ltd. C CCC- A/Watch Neg Dalton CDO Ltd. D CC BBB/Watch Neg Jupiter High Grade CDO VII Ltd. A-1 BB/Watch Neg AAA/Watch Neg Jupiter High Grade CDO VII Ltd. A-2 CCC+/Watch Neg AAA/Watch Neg Jupiter High Grade CDO VII Ltd. A-3 CCC-/Watch Neg AAA/Watch Neg Jupiter High Grade CDO VII Ltd. A-4 CC AA/Watch Neg Jupiter High Grade CDO VII Ltd. A-5 CC A+/Watch Neg Jupiter High Grade CDO VII Ltd. B CC BBB+/WatchNeg Jupiter High Grade CDO VII Ltd. C CC BB/Watch Neg Jupiter High-Grade CDO VI Ltd. A-1 AA-/Watch Neg AAA/Watch Neg Jupiter High-Grade CDO VI Ltd. A-2 CCC+/Watch Neg AAA/Watch Neg Jupiter High-Grade CDO VI Ltd. A-3 CC AAA/Watch Neg Jupiter High-Grade CDO VI Ltd. A-4 CC AAA/Watch Neg Jupiter High-Grade CDO VI Ltd. B CC AA/Watch Neg Jupiter High-Grade CDO VI Ltd. C CC AA-/Watch Neg Jupiter High-Grade CDO VI Ltd. D CC A/Watch Neg Jupiter High-Grade CDO VI Ltd. E CC BBB/Watch Neg Orchid Structured Finance CDO III A-1 AA AAA Orchid Structured Finance CDO III A-2 BBB AA+ Orchid Structured Finance CDO III B BB+ A+ Orchid Structured inance CDO III C BB A-/Watch Neg Orchid Structured Finance CDO III D B+ BBB/Watch Neg Orchid Structured Finance CDO III E CCC+ BB+/Watch Neg Point Pleasant Funding 2007-1 Ltd. S AAA AAA/Watch Neg Point Pleasant Funding 2007-1 Ltd. UnfdSr Expo BBBsrp AAAsrp/WchNeg Point Pleasant Funding 2007-1 Ltd. A-1 BB- AAA/Watch Neg Point Pleasant Funding 2007-1 Ltd. A-2 CCC- AAA/Watch Neg Point Pleasant Funding 2007-1 Ltd. B CC AA/Watch Neg Point Pleasant Funding 2007-1 Ltd. C CC A/Watch Neg Point Pleasant Funding 2007-1 Ltd. D CC BBB/Watch Neg Sheffield CDO II Ltd. A-2 AA AAA Sheffield CDO II Ltd. A-3 A AAA Sheffield CDO II Ltd. B BBB- AA/Watch Neg Sheffield CDO II Ltd. C B+ A/Watch Neg Sheffield CDO II Ltd. D CC BBB/Watch Neg Squared CDO 2007-1 Ltd. A-1 CCC- AAA/Watch Neg Squared CDO 2007-1 Ltd. A-2a CC AAA/Watch Neg Squared CDO 2007-1 Ltd. A-2b CC AAA/Watch Neg Squared CDO 2007-1 Ltd. B CC AA/Watch Neg Squared CDO 2007-1 Ltd. C CC A/Watch Neg Squared CDO 2007-1 Ltd. D CC A-/Watch Neg Squared CDO 2007-1 Ltd. E CC BBB/Watch Neg Squared CDO 2007-1 Ltd. CompNts AAA AAA/Watch Neg Summer Street 2005-1 Ltd. A-2 AA AAA Summer Street 2005-1 Ltd. A-3 BBB+ AA/Watch Neg Summer Street 2005-1 Ltd. B BB+ A-/Watch Neg Summer Street 2005-1 Ltd. C B BBB/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Broderick CDO 3 Ltd. A-1 AAA/Watch Neg Broderick CDO 3 Ltd. D CC Broderick CDO 3 Ltd. E CC Burnham Harbor CDO 2006-1 Ltd. A-1LB AAA Orchid Structured Finance CDO III Ltd. Combo Nts AAA Sheffield CDO II Ltd. A-1 AAA Sheffield CDO II Ltd. S AAA Summer Street 2005-1 Ltd. A-1 AAA * Thacher Proffitt Organizes Distressed Assets Advisory Practice ---------------------------------------------------------------- The turmoil in the capital markets created new opportunities for investors, sellers and other market participants in distressed assets. In response, Thacher Proffitt has brought together experienced distressed asset attorneys from its structured finance, bankruptcy, litigation and tax practice groups to create an interdisciplinary team to advise clients seeking to capitalize on these emerging opportunities. Regarded as a law firm focused on commercial banking, investment banking, real estate and structured finance - particularly complex financial instruments involving a range of assets and mortgage products - Thacher Proffitt has an understanding of deal structures and strategies for investors and sellers of distressed assets. The group, which is co-chaired by bankruptcy partner Hugh McDonald and structured finance partner Christopher Lewis, focuses on all aspects of distressed assets, from acquisition to disposition, including: * Structuring and negotiating rescue and exit financing, including DIP lending and pre-bankruptcy forbearance arrangements, debt restructurings and other work-outs; * Foreclosures, asset dispositions and other creditor remedies/ debtor defenses; * Formation of hedge funds, private equity vehicles and other investment structures for the acquisition of distressed assets; * Acquisition and disposition of distressed debt and other claims, including corporate debt and structured finance securities, e.g., CDOs, SIVs, RMBS, CMBS and ABS), trade claims, lease products, equipment certificates and litigation claims; * Negotiating, documenting and advising with respect to distressed loan and claims trading; * Advice and implementation of solutions for all related issues, including derivatives, tax and regulatory compliance; * Employing all necessary means to realize on purchased assets, through restructuring, litigation and/or bankruptcy; and * Ensuring that entities who acquire distressed assets are properly licensed and comply with all applicable regulatory requirements. "We know the deals and structures inside-out and can help clients act on opportunities," Mr. McDonald said. "In addition, we can provide advice across the distressed asset spectrum. The benefits of our approach are three-fold: 1. One-Stop Service: Our teams will enable clients to obtain a full suite of advice for all of their distressed asset needs; 2. Rapid and Creative Responses: Investors and sellers of distressed assets can expedite decisions while also being advised of practical, creative alternatives for maximizing the value of opportunities; and 3. Experience-based Risk Assessment: Occasionally, clients need to step back and be made fully aware of the obscure or unfamiliar legal risks involved with the acquisition of distressed assets. Our teams, with 'big picture' experience, will offer such advice." "Now more than ever our clients are looking to our leadership in the area of distressed assets," Paul D. Tvetenstrand, chairman and managing partner of Thacher Proffitt stated. "We have been at the forefront of creating Wall Street's most creative and complex deal structures. The same creativity can help trading desks, private equity firms, hedge funds and others as they navigate this new capital markets environment in search of opportunities." Members of the Distressed Asset Practice Group are: * Christopher Lewis, Esq. Practice Group Co-Chair * Hugh McDonald, Esq. Practice Group Co-Chair * Diana G. Browne, Esq. * A. James Cotins, Esq. * Aim�e M. Cummo, Esq. * John P. Doherty, Esq. * Jonathan D. Forstot, Esq. * Salvatore O. Franco, Esq. * Gene A. Haldeman, Esq. * David S. Hall, Esq. * Erik D. Klingenberg, Esq. * Andrea N. Mandell, Esq. * Cynthia D. Mann, Esq. * Robert E. McCarthy, Esq. * Douglas J. McClintock, Esq. * Peter S. Morgan, Esq. * Jeffrey J. Murphy, Esq. * Stephen F.J. Ornstein, Esq. * James R. Shorter, Jr., Esq. * Richard D. Simonds, Jr., Esq. * E. Lee Smith, Esq. About Thacher Proffitt & Wood LLP Founded in 1848, Thacher Proffitt has nearly 300 lawyers in five locations - New York, Washington, DC, White Plains, New York, Summit, New Jersey and Mexico City. The company advises clients on a range of matters involving: banking, bankruptcy, compensation and benefits, corporate and securities, international, litigation and dispute resolution - including subprime, real estate, structured finance, tax, technology and intellectual property, and trusts and estates. * Texas Rising Stars' List Names 17 Attorneys From Gardere Wynne ---------------------------------------------------------------- Gardere Wynne Sewell LLP reports that a total of 17 attorneys from its Dallas and Houston offices have been selected to the 2008 listing of Texas Rising Stars. Gardere partners Michael P. Cooley, William D. Dunn, Barry M. Golden, Colin G. Martin, Alejandro Ortiz, John W. Slates and Celeste Yeager of Dallas earned selections, along with Houston partners Alan C. Buckner and Merritt B. Chastain III. Also named to the 2008 Rising Stars list are firm associates Christopher G. Converse, Michael S. Haynes, Marcus A. Helt and Eric C. Lugger of Dallas, as well as Amy C. Dinn, Latosha T. Lewis, Peter Scaff and Samantha Trahan of Houston. "We're a full-service law firm, so it is important for us to have top lawyers in every area we handle," Steve Good, Gardere managing partner, said. "When you look at this list and see Gardere attorneys handling business transactions and litigation, bankruptcy, international law, environmental litigation, employment disputes and so on, it's easy to understand why I believe our young lawyers are among the very best in Texas." The full Rising Stars list appears in both the April 2008 issue of Texas Monthly and Texas Rising Stars 2008, published by Law & Politics Media Inc. Houston associate Amy Dinn is featured in a Texas Rising Stars 2008 profile that explores her interests away from her legal practice. Ms. Dinn is active in the Houston Roller Derby league and is a member of Houston Greeters and the Bobbindoctrin Puppet Theatre. Rising Stars are the top up-and-coming Texas attorneys who are 40 or younger or have been in practice for fewer than 10 years. Rising Stars are selected based on nominations by members of the elite Texas Super Lawyers list. Only 2.5% of Texas attorneys were chosen for this honor. About Gardere Wynne Sewell LLP Gardere Wynne Sewell LLP -- http://www.gardere.com/-- an AmLaw 200 firm, was founded in 1909 and is one of the Southwest's largest full-service law firms. With offices in Austin, Dallas, Houston, Mexico City and Washington, D.C., Gardere provides legal services to private and public companies and individuals in areas of litigation, corporate, tax, environmental, labor and employment, intellectual property and financial services. * Thorp Reed Expands Legal Profession with Five New Partners ------------------------------------------------------------ Thorp Reed & Armstrong elected Pat Carothers, Esq., Jarrod Duffy, Esq., Alex Hershey, Esq., Jerri Ryan, Esq. and Jill Sabo, Esq. as partners, effective March 1, 2008. "Thorp Reed continues to thrive and grow thanks to the hard work and contributions of these five excellent lawyers," Jeff Conn, managing partner of Thorp Reed & Armstrong, said. "All five attorneys that have become partners of our firm exemplify the collaborative approach Thorp Reed takes to the legal profession, and I join the entire firm in congratulating them on their accomplishment." Partners' Credentials Patrick W. Carothers, Esq. is a member of Thorp Reed's Bankruptcy and Financial Restructuring Group. He has represented numerous businesses in out of court restructurings, well as in bankruptcy cases. In addition, Mr. Carothers' clients include lenders and businesses involved in bankruptcy and restructuring matters. He also routinely defends businesses and individuals in fraudulent transfer and fraud actions. Mr. Carothers also advises domestic and international companies on a wide variety of corporate issues, including entity formation, real estate transactions, asset purchases, general contract review, and compliance with various laws and regulations, notably the Foreign Corrupt Practices Act. He received his J.D. from Duquesne University School of Law. Jarrod J. Duffy, Esq. has a business, real estate and tax practice, representing both large and small companies in a wide array of transactions. The businesses include numerous manufacturing, construction, technology, and real estate related companies. Mr. Duffy has represented many business owners, partnerships and other entities in multiple acquisitions and divestitures, private debt and equity financings, contractual matters, real estate matters, and tax matters. He received his J.D. from Duquesne University School of Law. J. Alexander Hershey, Esq. is a member of the Commercial and Corporate Litigation practice group. He concentrates his practice in areas of litigation involving unfair competition and business torts, trademark and copyright infringement, securities and criminal fraud, and related contract disputes. Mr. Hershey has experience practicing before numerous state and federal courts, as well as in business counseling and the pre-complaint resolution of disputes. He received his J.D. from the George Washington University School of Law and his B.A. from Oberlin College. Jerri A. Ryan, Esq. has represented clients in a wide variety of litigation matters in federal and state courts in Pennsylvania and California. She is a member of the Commercial and Corporate Litigation practice group and handles matters involving contractual disputes, ownership rights, unfair competition claims, mineral rights and technology law, among others. Ms. Ryan is admitted to practice before the courts of Pennsylvania, California and the United States District Courts for the Western District of Pennsylvania, the Southern District of California and the Central District of California, as well as the United States Court of Appeals for the Third Circuit. She received her J.D. from Notre Dame Law School. Jill W. Sabo, Esq. is a member of the Financial Institutions & Real Estate Transactions Practice Group. She focuses her practice in the areas of commercial finance, mergers and acquisitions, and general corporate law. Ms. Sabo also holds a CPA license in the State of Maryland. She received her J.D. from Georgetown University Law Center. About Thorp Reed & Armstrong Based in Pittsburgh, Pennsylvania, Thorp Reed & Armstrong, LLP -- http://www.thorpreed.com/-- is a premier law firm, which has grown to include additional offices in Philadelphia, Pennsylvania, Princeton, New Jersey, and Wheeling, West Virginia. Earning the respect, trust and appreciation of clients, peers, and those who live in our communities, Thorp Reed & Armstrong attorneys have gained a reputation as "lawyer's lawyers" -- lawyers who exemplify the profession's best qualities. Since 1895, the firm supports a wide variety of clients' needs within the practice areas of business law, litigation, and corporate finance. * BOOK REVIEW: Bankruptcy: A Feast for Lawyers ---------------------------------------------- Author: Sol Stein Publisher: Beard Books Paperback: 341 pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1893122123/internetbankrupt Described by the Chicago Tribune as a "latter-day version of Dicken's Bleak House," this book is a shattering indictment of bankruptcy law by a CEO who lived through the experience of a Chapter 11. The author exposes a system that is supposed to provide an opportunity for troubled companies to reorganize, but kills more than 70 percent of the businesses that take refuge in it while enriching legions of lawyers. In the nightmare world of Chapter 11, the gainers are seldom the creditors or the debtor company, but rather the bankruptcy bar, impeached in this book by its own conduct and the condemnation of its ethical brethren. Besides his own experience, the author draws examples from diverse industries including trucking, food, real estate, oil and publishing. Sol Stein, the author of this book, was the former CEO of now- defunct Stein and Day, one of the last independent American publishing houses operating in the 1980s. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***