T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 17, 2008, Vol. 12, No. 65 Headlines 706 FOURTH: Voluntary Chapter 11 Case Summary ADAM AIRCRAFT: Public Sale of Assets Slated for April 4 ADELPHIA COMMS: Wants to Block Burlington City's Claims ADELPHIA COMMS: Former Headquarters Sold for $3,600,000 ADELPHIA COMMS: Cable Crafters Seeks Payment of $534,249 Claim ALLIED HOLDINGS: Teamsters Seeks Dismissal of Local Union's Action ALLIED HOLDINGS: D.E. Shaw et al., Armory Disclose Equity Stakes AMERICAN HOME: Retained Professionals' Interim Fee Applications AMERICAN LAFRANCE: Files Amended Plan of Reorganization AMERICAN LAFRANCE: Plan Classification and Treatment of Claims AROMAS-SAN JUAN: Fitch to Cut Rating to 'BB' If Fiscal Bal. Fail ARUNDOTECH LLC: Case Summary & 14 Largest Unsecured Creditors ASARCO LLC: Seeks to Expand Grant Thornton's Scope of Employment ASARCO LLC: Compelled to Give Discovery Documents to Asarco Inc. ASARCO LLC: Asarco Inc. Wants to File Claim Objections Under Seal BANTEK WEST: Defaults on Loan Guaranty; Auctions Collateral BEAR STEARNS: To be Bought by JPMorgan Chase for $236 Million BEAZER HOMES: Two Vegas Projects Receive Notices of Default BON-TON STORES: Fitch Affirms 'B' Rating, Revises Outlook to Neg BONO HOLDINGS: Voluntary Chapter 11 Case Summary BUILDING MATERIALS: Weak Profile Prompts S&P's Rating Cuts to 'B-' BUDROSE HOLDINGS: Case Summary & 13 Largest Unsecured Creditors CANADIAN TRUSTS: Committee to Apply for Protection of CA$33B ABCP CAPITAL ROOFING: Case Summary & 18 Largest Unsecured Creditors CELLU TISSUE: S&P Confirms 'B' Rating on Senior Secured 2010 Notes CENTEX HOME: S&P Junks Rating on Class B 2002-D Certificates CHARMING SHOPPES: S&P Maintains 'BB-' Corporate Credit Rating CHARTER COMMS: Fitch Holds & Removes 'CCC' Issuer Default Ratings CIENA CORP: Completes $196 Mil. Cash Buyout of World Wide Packets CIMAREX ENERGY: Paying 6 Cents-per-Share Cash Dividend on June 2 CITADEL BROADCASTING: Names Randy Taylor as Chief Finc'l Officer CITIZENS COMMS: Earns $59 Million in 2007 Fourth Quarter CLEAR CHANNEL: Completes Sale of Television Group for $1.1 Billion CLECO CORP: Earns $151.3 Million in Year Ended Dec. 31 COLEMAN CABLE: Elects Dennis J. Martin as Independent Director COMMONWEALTH INVESTMENTS: Case Summary & 12 Largest Creditors COMMSCOPE INC: Earns $37.6 Million in 2007 Fourth Quarter COOPER TIRE: Earns $51 Million in 2007 Fourth Quarter COREY LANDINGS: Case Summary & 11 Largest Unsecured Creditors COUNTRYWIDE FINANCIAL: Fights Probe Instigated by U.S. Trustee COUNTRYWIDE FINANCIAL: Mulls Foreclosure of 86 Properties COVENTRY HEALTH: Earns $184.3 Million in 2007 Fourth Quarter DELPHI CORP: S&P Still Expects to Designate 'B' Corporate Rating DH HOLDINGS: Case Summary & Nine Largest Unsecured Creditors DIOMED HOLDINGS: Case Summary & 20 Largest Unsecured Creditors DIOMED HOLDINGS: Files for Chap. 11; To Sell Assets to Biolitec AG ECHELON PROPERTY: A.M. Best's Rating on Review After Lockhart Deal EXOTIC CARS: Voluntary Chapter 11 Case Summary FOCUS PROPERTY: Two Vegas Projects Receive Notices of Default FRONTIER OIL: Board Approves $100 Million Share Repurchase GALAXY ENERGY: Case Summary & 40 Largest Unsecured Creditors GREAT AMERICAN BUS: Case Summary & 4 Largest Unsecured Creditors GREENPOINT MORTGAGE: Six Classes of Notes Get S&P's Junk Ratings GRUPO CIMA: Case Summary & Two Largest Unsecured Creditors HARRY ALTICK: Case Summary & Six Largest Unsecured Creditors HEALTHSOUTH CORP: Moody's Confirms 'B3' Corporate Family Rating INTEGRITY CONSTRUCTION: Can Hire Blackwell Sanders as Counsel INTELSAT LTD: Subsidiaries Commence Change of Control Offers INVER GROVE: Case Summary & Five Largest Unsecured Creditors JOURNAL REGISTER: Revenue Decline Cues S&P to Cut Ratings to 'B-' KB HOME: Two Vegas Projects Receive Notices of Default KHAMSIN CREDIT: Poor Credit Quality Cues Moody's Rating Downgrades KIMBALL HILL: Two Las Vegas Projects Receive Notices of Default LAKELAND COMMERCIAL: Files List of 17 Largest Unsecured Creditors LAKELAND COMMERCIAL: Can Hire HughesWatters as Bankruptcy Counsel LENNAR CORP: Two Vegas Projects Receive Notices of Default LILLIAN VERNON: Seeks Court's OK on Asset Sale Bidding Procedures LILLIAN VERNON: U.S. Trustee Protests Sale Bidding Procedures MAIR HOLDINGS: Big Sky Liquidates Assets and Halts Operations MARSHALL MOTORS: Case Summary & 20 Largest Unsecured Creditors MARVIN MCKESSON: Case Summary & 17 Largest Unsecured Creditors MONITOR OIL: Wants Ch. 11 Plan Filing Deadline Extended to June 17 MONITOR OIL: Wants to Transfer $43.5 Million to Secured Lenders MORTGAGE LENDERS: Classification & Treatment of Claims Under Plan NATCHEZ HOSPITAL: Senate Approves Chapter 9 Bankruptcy Filing NEW CENTURY: Countrywide Mulls Foreclosure of 86 Properties NEW CENTURY: Wants Examiner's Final Report Filed Under Seal NEW YORK RACING: Exclusive Plan Filing Period Extended to April 15 NOVASTAR FINANCIAL: Obtains Waiver of Default Until April 11 PATHEON INC: Posts $15 Million Net Loss in Quarter Ended Jan. 31 PIKE NURSERY: Committee Seeks Appointment of Chapter 11 Trustee PLASTECH ENGINEERED: Committee Balks at Schedules-Filing Extension PLASTECH ENGINEERED: Panel Questions Scope of Lazard's Services PLASTECH ENGINEERED: Wants to Hire Mesirow Financial as Advisors POPE & TALBOT: Court Extends Exclusivity Period to June 2 PROTECTED VEHICLES: Asks Court to Deny Creditors' Dismissal Demand PROTECTED VEHICLES: Seeks Access to GCFS Cash Collateral PROVIDENT FUNDING: S&P Confirms Low-B Ratings on Three Classes PULTE HOMES: Two Vegas Projects Receive Notices of Default RADIO ONE: Moody's Reviews Six Low-B Ratings for Possible Cuts REDDY ICE: Moody's Holds All Ratings; Changes Outlook to Negative RESIDENTIAL ASSET: Fitch Chips Ratings on $595.9MM Certificates RICHARD ARNOLD: Case Summary & 12 Largest Unsecured Creditors RIVIERA HOLDINGS: December 31 Balance Sheet Upside-down by $47K ROO GROUP: Appoints Lars Kroijer to Board as Independent Director RYLAND GROUP: Two Vegas Projects Receive Notices of Default SERVICE CONSULTING: Case Summary & 10 Largest Unsecured Creditors SHARPER IMAGE: Garmin USA Wants Payment for Administrative Claim SHIMASE LLC: Case Summary & Four Largest Unsecured Creditors SIRVA INC: Asks Court to Set Dates for Plan Confirmation Discovery SIRVA INC: Triple Net, et al. Object to Plan of Reorganization SIRVA INC: Plan Confirmation Hearing Rescheduled to April 18 SMART MODULAR: CFO Jack A. Pacheco to Resign Effective April 18 SOUTHERN ENTERTAINMENT: Case Summary & 20 Largest Unsec. Creditors STARLIGHT HOME: Case Summary & 20 Largest Unsecured Creditors STILLWATER MINING: Completes $181 Million Offering of Senior Notes TABERNA PREFERRED: Fitch Retains 'BB' Rating Under Negative Watch TELEPHONE & DATA: S&P Upgrades Corporate Credit Ratings From 'BB+' TOLL BROTHERS: Two Las Vegas Projects Receive Notices of Default TOTES ISOTONER: Moody's Changes Outlook to Negative; Holds Ratings TREY RESOURCES: Cancels Sale of SWK Technologies to Buyout Group TUCSON COPPER: Case Summary & 18 Largest Unsecured Creditors UBS MASTR: Fitch Lowers Ratings on Nine Certificate Classes VERESTAR INC: Court Sets Plan Confirmation Hearing April 9 VIKING SYSTEMS: CEO Reaffirms Liquidity to Fund Operations VIKING SYSTEMS: Elects William T. Tumber to Board of Directors VIKING SYSTEMS: Richard Kipperman Steps Down from Directors Board VOLT INFORMATION: Fitch Rates $42MM Senior Credit Facility at BB WASHINGTON MUTUAL: Housing Sector Fall Cues Moody's to Cut Ratings WESTERN REFINING: S&P Puts 'BB-' Rating on CreditWatch Negative WILLIAM SEALS: Case Summary & Five Largest Unsecured Creditors * Fitch Performs Vintage Analysis on US CMBS Loans * Fitch Says Failed Auctions Raise Questions to ARS Credit Quality * Fitch Says Issuers Under Neg. Watch Likely to Suffer Downgrades * Fitch Expects Volume of New Retail Vehicle Lease to Fall * Fitch Believes Hospital Industry Will Have Continued Challenges * Moody's Downgrades Ratings on 131 Tranches From 17 Alt-A Deals * Moody's Says Credit Derivative Product Cos. has Stable Outlook * Moody's Says Utilities Face Decisions on New Generating Capacity * Moody's Puts Cap on Total Hybrid Equity Contributions * Moody's Reports Looser Covenants Show Eroding Credit Environment * S&P Puts Ratings on 129 Synthetic CDOs on Negative CreditWatch * S&P Downgrades 62 Tranches' Ratings From 10 Cash Flows and CDOs * S&P Sees More Writedowns in Bank Portfolios Hedged by Monolines * S&P Says Subprime Write-Downs Are Likely Past Halfway Mark * US Now in Recession, Says Harvard Economist Martin Feldstein * Insurance Industry Asset Writedowns, Losses Reach $38 Billion * Gareth Kendall Joins Chadbourne & Parke - London as Partner * Kirkpatrick & Lockhart Adds Charles Dale to Restructuring Office * McGuire Woods Adds Edwin Brooks in Chicago Restructuring Office * BOND PRICING: For the Week of Mar. 10 - Mar. 14, 2008 ********* 706 FOURTH: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: 706 Fourth Avenue LLC 706-708 Fourth Avenue Brooklyn, NY 11232 Tel: (718) 422-7600 Bankruptcy Case No.: 08-41429 Chapter 11 Petition Date: March 13, 2008 Court: Eastern District of New York (Brooklyn) Judge: Jerome Feller Debtor's Counsel: Damian Pietanza, Esq. 16 Court Street, 26th Floor Brooklyn, NY 11241 Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $100 million The Debtor did not file a list of its largest unsecured creditors. ADAM AIRCRAFT: Public Sale of Assets Slated for April 4 ------------------------------------------------------- Adam Aircraft Inc. is publicly selling its assets on April 4, 2008, Jets Ru Business Aviation Portal reports. Potential buyers are asked to make deposits of $250,000 and place a minimum bid of $10 million by April 3, according to the report. Suit Filed by Former Founder Jets Ru relates that former founder Rick Adam is now among those who are filing lawsuits against the Debtor. Mr. Adam, the report says, alleges that the Debtor materially failed to complete the deal related to a manufacturing facility. About Adam Aircraft Denver, Colorado-based Adam Aircraft Inc., aka Adam Aircraft Industries -- http://www.adamaircraft.com/-- designs and manufactures advanced aircraft for civil and government markets. The A500 twin-engine piston aircraft has been Type Certified by the FAA, and the A700, which is currently undergoing flight test and development. The Debtor filed for chapter 7 liquidation on Feb. 15, 2008, with the U.S. Bankruptcy Court in Colorado after failing to secure financing. It also laid off 800 workers and listed assets between $1 million and $10 million, and debts between $50 million and $100 million. ADELPHIA COMMS: Wants to Block Burlington City's Claims ------------------------------------------------------- Adelphia Communications Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to bar Burlington City's claims since it was not filed on time. In connection with certain highway projects, the state of Vermont Agency of Transportation and Burlington City required the relocation of the ACOM Debtors' aerial facilities to underground facilities. Burlington and ACOM Debtor Mountain Cable Company, L.P., subsequently entered into two utility relocation agreements, one dated April 14, 2004, and the other dated Jan. 19, 2005, whereby the parties agreed, among other things, to submit to the judicial system for resolution, the issue of whether Burlington has the authority to hold Mountain Cable responsible for any portion of incremental utility relocation costs over and above the aerial-to-aerial relocation costs for the Highway Project. In February 2006, Burlington filed a complaint in Chittenden Superior Court in the State of Vermont, seeking a declaratory judgment that Mountain Cable must bear the portion of the cost of relocating and undergrounding its utility facilities not reimbursable with federal and state funds, as part of certain reconstruction projects in connection with the Highway Project. In response, the ACOM Debtors sought summary judgment in the Vermont Action, asserting that Burlington failed to timely file an administrative claim in their bankruptcy cases. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, points out that Burlington has, in fact, entirely failed to file a claim in the ACOM Debtors' bankruptcy cases on account of its claims in the Vermont Action. Accordingly, the ACOM Debtors ask the Court to declare that Burlington's claims in the Vermont Action are: (a) time-barred; or (b) in the event the City prevails in the Vermont Action and its claims are liquidated, unenforceable against the ACOM Debtors. The ACOM Debtors aver that Burlington received notice of the confirmation of their Plan of Reorganization, which clearly stated the date by which administrative claims must be filed. Burlington's claims, which arise out of a dispute regarding the allocation of certain costs, arose prepetition and do not fall within the definition of Excluded Administrative Claims under the ACOM Debtors' Chapter 11 Plan, Ms. Chapman relates. Thus, Burlington is required to file an administrative claim in order to preserve its right to assert claims against Mountain Cable. As Burlington has failed to file an administrative claim, it is legally precluded and forever barred from asserting any claims in connection with the Vermont Action against the ACOM Debtors, Ms. Chapman contends. Litigation like the Vermont Action, by its very nature, is outside the scope of ordinary course, Ms. Chapman notes. As a result, Burlington was required to timely file an administrative claim. The Debtors, according to Ms. Chapman, entered into the two Utility Relocation Agreements because they had no choice. If the equipment had not been moved, the Debtors would have been unable to continue providing services to their customers. The Debtors, she explains, acknowledged essentially in the Utility Relocation Agreements that Burlington may sue them regarding the purported liability for moving equipment at a later time. The Debtors, however, never agreed "to become obligated to the City for the payment of underground relocation expenses in the ordinary course of its business," as Burlington asserts. The Debtors maintain that they are not liable for the costs of relocating the equipment. 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: Former Headquarters Sold for $3,600,000 ------------------------------------------------------- The former Adelphia Communications Corp. headquarters building in Coudersport, Pennsylvania, has been sold via Internet auction for the second time in five months, The Buffalo News reports. According to The Buffalo News, the former ACOM headquarters received a $3,600,000 offer from a bidder identified only as "KLE140" in the online real estate auction conducted by the LFC Group of Companies. There is speculation that the potential new owner is an Irish businessman who was bilked out of nearly $2,000,000 attempting to buy the building via a Massachusetts attorney earlier this year, The Buffalo News relates. Principal of Dublin-based RK Investments Kevin Phelan gave the Massachusetts attorney, who had nothing to do with the official auction, $1,900,000 as a deposit on the purported purchase, the news firm says. An associate of the lawyer was arrested in Miami last month as he attempted to board a flight to Venezuela carrying a suitcase containing $1,300,000 in cash. The attorney, Raymond Desautels III, and his associate, Allen Seymour, are both facing charges related to Mr. Phelan's missing money. The Irish businessman has also filed a civil suit against Mr. Desautels. Auctioneer LFC anticipates finalizing the sale as soon as possible. "It's been put on a fast-track for quick disposal. The plan from the beginning was to auction and close as fast as possible," Kelly Lovegrove, LFC's director of operations, told The Buffalo News. The former ACOM headquarter was brought back to the auction block last month when the initial buyer, who submitted a $3,400,000 offer, defaulted. About the LFC Group of Companies For more than 30 years, the LFC Group of Companies -- http://www.LFC.com/-- has served numerous Fortune 500 companies, real estate developers, investors, financial institutions and government agencies by auction marketing thousands of commercial, industrial, land and residential properties with an aggregate value well in excess of $5,000,000,000 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: Cable Crafters Seeks Payment of $534,249 Claim -------------------------------------------------------------- Cable Crafters Construction Company, a prepetition vendor of Adelphia Communications Corp. and its debtor-affiliates, asks the U.S. Bankruptcy Court for the Southern District of New York to grant it a $534,249 claim pursuant to Section 502(h) of the Bankruptcy Code. Prior to the bankruptcy filing, Cable Crafters Construction Company Inc., provided Century-TCI, L.P., doing business as Adelphia Communications, with construction labor and materials for voice, video and data telecommunications and cable television systems in San Diego County and Los Angeles County, California. According to Jeffrey A. Cooper, Cable Crafters' counsel, Cable Crafters received $534,249 as payment for its services, made from a bank account with checks bearing the name "Adelphia." On July 23, 2007, the Adelphia Recovery Trust made a demand on Cable Crafters for return of the $534,249 alleged to have been transferred during the 90-day, or alternatively the one year, period prior to Debtor Adelphia Cablevision, LLC's bankruptcy filing, and threatened Cable Crafters with litigation. The Trust contended that the Payment was made to Cable Crafters by Adelphia Cablevision, for which Cable Crafters did no work. The Trust also argued that Cable Crafters was not Adelphia Cablevision's creditor. Thus, the Payment is a fraudulent transfer under Section 548(a) of the Bankruptcy Code, and recoverable for the benefit of Adelphia Cablevision's estate through an adversary proceeding. Cable Crafters believes that the Trust is estopped to assert that the $534,249 is recoverable in an avoiding power action. The Trust waited until after distributions were made under the ACOM Debtors' confirmed Plan of Reorganization to assert a fraudulent transfer demand against Cable Crafters for the $534,249 Payment, Mr. Cooper observes. He notes that because of the Trust's timing, Cable Crafters can no longer protect its rights against the ACOM Debtors either by (i) filing additional mechanic's liens or amending its existing mechanic's liens to include the $534,249 in its 'in rem' secured claim, or (ii) seeking to share in the initial distribution to creditors by virtue of the resulting claim under Section 502(h) of the Bankruptcy Code. Even if Cable Crafters were required to return the $534,249 Payment, Cable Crafters will still have a claim against ACOM pursuant to Section 502(h), which claim is entitled to payment in full, Mr. Cooper points out. Consequently, much time and money would be wasted at the expense of all parties to the threatened adversary proceeding and would not result in any benefit to the Trustee's constituency, he relates. The Trust, however, has declined to withdraw its Demand. Cable Crafters also seeks the Court's permission to setoff the Section 502(h) Claim against the Trust's Demand. Had the Fraudulent Transfer Demand been asserted pre- confirmation, Cable Crafters could have moved at an earlier time to assert its Section 502(h) Claim and to protect its rights, Mr. Cooper tells the Court. Cable Crafters, he argues, should not be left in a worse position simply because the Trust waited to assert its alleged claim until after the Plan was confirmed and initial payments made. Parties Resolve Dispute In a Court-approved stipulation, the Adelphia Recovery Trust agrees that in the event it commences an action to recover the Payment, Cable Crafters will have a valid and enforceable claim against the Trust to the extent of the value of the construction services it provided to the ACOM Debtors. The Court permits Cable Crafters to assert its Section 502(h) Claim as a counterclaim or an affirmative defense to the Trust's claims. Cable Crafters may not seek an affirmative recovery from the Trust on account of the Section 502(h) Claim, but may only enforce the Claim defensively, for purposes of setoff or recoupment. Cable Crafters' Section 502(h) Claim will be an absolute setoff, on a dollar for dollar basis, against any claims the Trust has or may assert against Cable Crafters. The Section 502(h) Claim will be available as a defense, counterclaim or offset, regardless of whether any remaining funds or reserves are available at that time for the ACOM Debtors' creditors, and regardless of whether the ACOM Debtors' bankruptcy proceedings are still pending. 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). ALLIED HOLDINGS: Teamsters Seeks Dismissal of Local Union's Action ------------------------------------------------------------------ The Teamsters National Automotive Transporters Industry Negotiating Committee, a committee of the International Brotherhood of Teamsters, and the Teamsters Local Unions filed a brief supporting a request to dismiss the complaint filed by the Automobile Transport Chauffeurs Demonstrators and Helpers Union, Teamsters Local 604 and George Wagner against Allied Holdings Inc. and its debtor-affiliates. Counsel to the TNATINC, Frederick Perillo, Esq., at Previant, Goldberg, Uelmen, Gratz, Miller and Brueggeman, s.c., in Milwaukee, Wisconsin, points out that: (a) the Teamsters Local 640's Complaint amounts to an action for declaratory judgment of a contingency; (b) the Teamsters Local 604 offer generalized arguments as to standing but never identified the harm the Union will suffer as an effect of the possible sale of Performance Transportation Services to the Debtors; and (c) Teamsters Local 604 opine at length as to the benefit it thinks it is entitled to receive from a labor agreement between the Debtors and the Teamsters but offer no coherent legal authority for its claim asserting that the Debtors and the TNATINC should be barred from modifying their own contract. "The [Teamsters Local 604] cannot satisfy their threshold burden of establishing standing, and even if they could, their claims are fatally deficient on their face," Mr. Perillo says. Article III of the U.S. Constitution limits federal courts' jurisdiction over cases. Mr. Perillo contends that the Teamsters Local 604 has yet to express a cognizable claim to either Article III standing or prudential standing. The Teamsters Local 604's entire claim, he notes, is based on what might happen if the Debtors purchase PTS and the Debtors hire George Warner and other PTS employees. Mr. Perillo argues that it is not enough for Article III standing that a complaint set forth facts sufficient to imagine an injury. To form the basis for standing, an injury must be "actual and imminent" rather than "speculative and hypothetical," Mr. Perillo further argues, citing In re Bochese v. Town of Ponce Inlet, 405 F.3d 964, 976 (11th Cir. 2005). Mr. Perillo adds that the Teamsters Local 604 has no prudential standing because it is not a constituency of the Debtors' plan of reorganization or the Debtors' estates. He notes that Teamsters Local 604 does not represent any of the Debtors' employees. PTS' employees are not intended as third-party beneficiaries of the collective bargaining agreement and the term sheet included in the Debtors' Chapter 11 Plan, he adds. The TNATINC asserts that injunction is not warranted. The Court does not need an injunction to aid the enforcement of the Debtors' Chapter 11 Plan because the possible modification of a CBA is not a departure from the Chapter 11 Plan, Mr. Perillo asserts. The TNATINC also notes that Teamsters Local 604 and Mr. Warner have not satisfied the prerequisites for an injunction. Mr. Perillo points out that it is not clear what certain action the Teamsters Local 604 are trying to enjoin. Mr. Perillo notes that the Complaint objects to the balloting of the revisions of the labor agreements but the balloting has already been completed. He adds that revisions to the labor agreements have been proffered to the membership, the membership has voted, and if the Debtors does purchase PTS' assets, another bankruptcy court will then decide whether to approve the sale after hearing any properly filed objection. The only conduct that could conceivably be enjoined is TNATINC's execution of an agreement to modify the CBA. Mr. Perillo says it is beyond dispute that that agreement would not have even a potential impact on PTS employees unless the Debtors proceeded to buy PTS and the Court approved the sale. He contends that the CBA can be modified by mutual agreement of the parties, without running afoul of any part of the Debtors' Chapter 11 Plan. The Debtors, in another filing, maintain that the Complaint should be dismissed because it is based on the false premise that the New Term Sheet proposed a modification of the Debtors' Chapter 11 Plan. The Debtors maintain that that is not the case. The Debtors explain that the New Term Sheet proposed a modification of an assumed executory contract, which is their CBA, and not their Chapter 11 Plan. The Debtors also support all other arguments presented by TNATINC supporting its dismissal request. About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provided the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provided financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. On May 11, 2007, the Court confirmed Allied's Second Amended Chapter 11 Plan of Reorganization. Allied emerged from bankruptcy on May 29, 2007. (Allied Holdings Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) * * * As of April 30, 2007, Allied Holdings Inc.'s consolidated balance sheet showed $217,379,000 in total stockholders' deficit resulting from total assets of $309,931,000 and total liabilities of $527,310,000. ALLIED HOLDINGS: D.E. Shaw et al., Armory Disclose Equity Stakes ---------------------------------------------------------------- In regulatory filings with the U.S. Securities and Exchange Commission dated Feb. 14, 2008, certain entities disclosed their stakes in Allied Holdings Inc. and its debtor-affiliates. 1) D.E. Shaw Four D.E. Shaw entities disclosed ownership of an aggregate of 512,755 shares of Allied Systems Holdings, Inc., common stock, representing 6.8% of the 7,153,070 shares of Allied common stock outstanding as of Oct. 31, 2007: 1. D.E. Shaw Laminar Portfolios, L.L.C.; 2. D.E. Shaw & Co., L.L.C.; 3. D.E. Shaw & Co., L.P.; and 4. David E. Shaw. The D.E. Shaw entities share power to vote or to direct the vote and power to dispose or to direct the disposition of all the shares. Mr. Shaw does not own any shares directly. By virtue of his position as president and sole shareholder of D. E. Shaw & Co., Inc., which is the general partner of D. E. Shaw & Co., L.P., which in turn is the investment adviser of D. E. Shaw Laminar Portfolios, L.L.C., and by virtue of his position as president and sole shareholder of D. E. Shaw & Co. II, Inc., which is the managing member of D. E. Shaw & Co., L.L.C., which in turn is the managing member of D. E. Shaw Laminar Portfolios, L.L.C., he may be deemed to have the shared power to vote or direct the vote of, and the shared power to dispose or direct the disposition of, the 512,755 shares. He disclaims beneficial ownership of the 512,755 shares. 2) Armory Master Fund Armory Master Fund Ltd., and related entities reported that they own 86,446 shares of Allied Systems Holdings, Inc., common stock representing 1.20% of the 7,153,070 shares of Allied common stock outstanding as of Oct. 31, 2007: No. of Shares Beneficially Equity Reporting Person Owned Stake ---------------- ------------- ------ Armory Master Fund, Ltd. 12,636 0.17% Armory Fund LP 8,884 0.12% Armory Partners LLC 8,884 0.12% Armory Offshore Fund, Ltd. 3,752 0.05% Armory Advisors LLC 12,636 0.17% Michael Meagher 13,218 0.18% Stephen C. Smith 13,218 0.18% Jay Burnham 12,636 0.17% The Seaport Group, LLC Profit-Sharing Plan 582 0.01% Each of the reporting entities has shared voting and dispositive power with respect to their shares. About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provided the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provided financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. On May 11, 2007, the Court confirmed Allied's Second Amended Chapter 11 Plan of Reorganization. Allied emerged from bankruptcy on May 29, 2007. (Allied Holdings Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) * * * As of April 30, 2007, Allied Holdings Inc.'s consolidated balance sheet showed $217,379,000 in total stockholders' deficit resulting from total assets of $309,931,000 and total liabilities of $527,310,000. AMERICAN HOME: Retained Professionals' Interim Fee Applications --------------------------------------------------------------- Retained professionals have filed additional applications asking the U.S. Bankruptcy Court for the District of Delaware for interim allowance and payment of their fees and reimbursements for their expense for services rendered in the Chapter 11 cases of American Home Mortgage Investment Corp. and its debtor-affiliates. Professional Period Total Fees Expenses ------------ ------ ---------- -------- Young Conaway 12/01/07 - 12/31/07 $697,878 $73,194 Stargatt & Taylor Zeichner Ellman & 12/01/07 - 12/31/07 77,554 -- Krause LLP Northwest Trustee 01/01/08 - 01/31/08 177,641 458,011 Services, Inc. Northwest Trustee 02/01/08 - 02/29/08 117,955 307,407 Services, Inc. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. American Home is currently seeking an extension of its exclusive period to file a plan of reorganization through June 2, 2008; and its exclusive period to solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Files Amended Plan of Reorganization ------------------------------------------------------- American LaFrance, LLC, on March 11, 2008, filed an Amended Plan of Reorganization and Disclosure Statement. American LaFrance filed its Plan of Reorganization and supporting Disclosure Statement on February 3, 2008. Like its February 3 version, the Amended Plan contemplates that ALF will continue operating its business after emerging from bankruptcy, but will have a restructured balance sheet and resolution of certain pre-bankruptcy disputes. The Amended Plan, however, provides that if ALF fails to obtain confirmation of the Plan, the company will proceed with the sale of substantially all of its assets to Patriarch Partners Agency Services, LLC, for $150,000,000, or to an alternative bidder. The U.S. Bankruptcy Court for the District of Delaware has provisionally approved PPAS's credit bid, and the Official Committee of Unsecured Creditors has reserved the right to challenge PPAS's right to credit bid. The sale is an alternative to the Plan and will be withdrawn if the Plan is confirmed. The hearing to consider the sale of all of the Debtor's assets is scheduled April 28, 2008. ALF noted that if the company were liquidated, holders of general unsecured claims would not be entitled to any distribution. In contrast, the Amended Plan provides for a 17% to 30% recovery by holders of unsecured claims. Unsecured creditors with balances $2,500 or below -- or those willing to reduce the claim to $2,500 -- will be treated as convenience class claims and will be paid in full without interest. A trust will be established to collect and administer the proceeds of the assets left behind for general unsecured creditors. The trust's property will include $5,000,000 of cash, and proceeds from certain litigation and avoidance actions. The Court convened a hearing on March 12, 2008, at 10:00 a.m., Eastern Time, to consider the adequacy of the disclosure statement explaining the terms of the Amended Plan. The hearing has been continued sine die. The Debtor needs to obtain approval of the Disclosure Statement before soliciting votes on the Plan. The Plan is subject to voting by general unsecured claimants and certain prepetition secured lenders, who are required to submit their ballots by 4:30 p.m. Prevailing Pacific Time, on April 4, 2008. The Bankruptcy Court directed that objections, if any, to confirmation of the Plan be filed and served by April 2, 2008, 4:00 p.m., Eastern Time. The Court will convene a pre-trial hearing to consider confirmation of the Plan on April 9, at 10:00 a.m., Eastern Time. The Court will hold a hearing to consider all confirmation issues that remain unresolved at a hearing on April 18, at 10:00 a.m. A full-text copy of the Amended Plan is available for free at: http://bankrupt.com/misc/ALF_Amended_Plan.pdf A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/ALF_Amended_DS.pdf Changes in Management ALF's current management team is led by William J. Hinz, who was appointed chief executive officer on October 18, 2007. Mr. Hinz is an employee of Patriarch Partners Management Group LLC, an affiliate of PPAS. PPMG provides Mr. Hinz's services, and the services of certain other executives, to ALF pursuant to a Letter Agreement dated October 1, 2007, by and between PPMG and ALF. ALF has also engaged William Snyder as chief restructuring officer and his firm CRG Partners Group, LLC, as financial advisors. The remainder of ALF's current management team includes -- Scott Barnes (Vice President, Purchasing), and Jimmy Rogers (Vice President, Sales and Marketing), both of which are employed by ALF and not by PPMG. ALF has been conducting a search for candidates to fill the vacant roles of chief financial officer and chief operating officer and to replace certain PPMG-provided personnel with permanent management. After its search efforts, ALF retained A. Matthew Karmel to serve as Chief Executive Officer. Mr. Karmel is expected to join ALF in April 2008. Mr. Karmel is the President of Asia-Pacific operations of MAG- Industrial Automation Systems, USA, the world's third largest machine tool supplier. Mr. Karmel has over 12 years of general management experience with engineering, manufacturing, and logistics companies in automotive, industrial, and technology industries. Mr. Karmel's experience includes management roles with Detroit Diesel Corporation and Ford Motor Company as well as a French-based $13 billion automotive supplier. ALF anticipates that Mr. Hinz will remain as part of senior management. Upon Mr. Karmel's arrival, Mr. Hinz will become chairman of the Board of Managers. Pending Litigation and Investigations ALF is currently investigating potential causes of action against Freightliner, LLC, in connection with the purchase of ALF's business and in connection with the Transition Services Agreement. ALF is determining whether transfers to Freightliner in excess of $40,000,000 within one year of the Petition Date may be recovered as part of an insider avoidance action. Pursuant to the Plan, the Reorganized Debtor will pursue Insider Avoidance Actions and remit 25% of the proceeds from such litigation, after costs, to the Trust. ALF is also currently analyzing potential causes of action against IBM Corporation. Based on ALF's initial review, it appears that the causes of action against IBM would include, among others, breach of contract. ALF is currently analyzing potential Preference Claims. Based on its initial review, ALF believes that more than $43,000,000 was paid to creditors in the 90 days prior to the Petition Date. After application of new value defenses and elimination of transfers not made on account of antecedent debt, ALF estimates that net preference recoveries will exceed $12,000,000. ALF has investigated and analyzed the liens asserted by PPAS, as agent for prepetition lenders who are owed $150,000,000 as of the Petition Date. ALF believes that the Prepetition Lenders have valid and enforceable liens on virtually all of the Debtor's property, with the exception of approximately $2,200,000 of unrestricted cash held by ALF. Although the Prepetition Lenders perfected their security interests in real property located in Sanford, Florida and Lebanon, Pennsylvania within approximately 95 days prior to the Petition Date, the Prepetition Lenders' liens in these properties do not appear avoidable because they were granted concurrently with $15,000,000 of new financing from the Prepetition Lenders for ALF's operations. The Creditors Committee is also investigating the validity and extent of the Prepetition Lenders' liens. As a result of the investigation, the Committee may formally challenge the validity or extent of the Prepetition Lenders' liens or ask the Court to recharacterize the Prepetition Lenders' claims as unsecured debt or equity. The deadline for the Committee to initiate the action is April 18, 2008. Finally, ALF is currently analyzing potential causes of action against former officers and directors, including John Stevenson, former CEO, and David Mulder, former Chief Operating Officer. While the investigation is in its preliminary stages, ALF's outside prepetition accountants identified significant deficiencies in internal controls during Mr. Stevenson's and Mr. Mulder's tenures. The lack of controls led to inaccurate financial reporting and ultimately contributed to ALF's financial losses. Messrs. Stevenson and Mulder may have failed to safeguard the assets of the Debtor and properly manage the Debtor's prepetition business operations. ALF may initiate litigation against the two for, among other causes of action, breach of fiduciary duty. Business Plan ALF's 2008 business plan calls for production of 1,781 trucks, including approximately 291 fire trucks and ambulances. ALF will continue to manufacture all trucks that are subject to performance bonds but will otherwise not produce any trucks that are expected to result in a loss. The Management Team determined that ALF was selling several trucks below the material costs of the truck. The Management Team reviewed and prioritized the backlog of trucks by profitability, taking into account alleged penalties for late delivery and bonding requirements. Of the 282 fire trucks in the backlog as of the Petition Date, the Debtor has determined that it may reject over 30 truck contracts. There are 537 contracted trucks in the Condor line, none of which has yet been selected for immediate rejection. In recent years, ALF's selling, general, and administrative expenses and fixed overhead charges have been as high as $56,000,000 annually. Pursuant to ALF's business plan, overhead will be reduced to $36,000,000 initially and reduced further to $34,000,000 in 2009. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. American LaFrance LLC will pursue a sale of its business operations in the event that the company's plan of reorganization is not confirmed. The Debtor filed its plan of reorganization on Feb. 3. (American LaFrance Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Plan Classification and Treatment of Claims -------------------------------------------------------------- The Amended Plan of Reorganization filed by American LaFrance, LLC designates claims against and interests in the Debtor in seven classes. Estimated Est. Total Class Description Treatment Recovery Claim Amount ----- ------------- --------- --------- ------------ N/A Administrative Unimpaired 100% - Claims N/A Allowed Priority Unimpaired 100% - Tax Claims N/A DIP Financing Unimpaired 100% $42,000,000 Claims 1 Allowed Secured Impaired - $176,400,000 Prepetition Lender Claims 2 Other Allowed Unimpaired 100% $1,170,000 Secured Claims 3 Allowed Priority Unimpaired 100% $1,413,000 Non-Tax Claims 4 General Unsecured Impaired 17% to 30% $58,000,000 Creditors 5 Convenience Class Impaired 100% $634,000 6 Assumed Unimpaired 100% $27,000,000 Liabilities 7 Interests Unimpaired 0% - Holders of Administrative Claims and Allowed Priority Tax Claims are estimated to collectively receive distributions not to exceed $3,500,000. The DIP Lenders will receive $42,000,000 on account of their postpetition claims against ALF. Proposed distributions: -- Class 1 - Allowed Secured Claims. The Prepetition Lenders will receive a Restructured Note issued and Restructured Security Documents granted by the Reorganized Debtor. -- Class 2 - Other Allowed Secured Claims. At the Debtor's option, (a) the Plan may leave unaltered the legal, equitable, and contractual rights of the holder of an Allowed Secured Claim, or (b) the Reorganized Debtor may pay the Allowed Secured Claim in full, in cash, on the later of the Allowance Date or the Distribution Date, or (c) the Reorganized Debtor may deliver to the holder of an Allowed Secured Claim the property securing the Claim, or (d) the Reorganized Debtor may pay an Allowed Secured Claim in the manner as may be mutually agreed to by the holder of the Claim and the Reorganized Debtor. -- Class 3 - Allowed Priority Non-Tax Claims. Each Allowed Priority Non-Tax Claim will be assumed and paid by the Reorganized Debtor in full from Available Cash or on other terms as may be agreed upon. If there is insufficient available cash to pay all allowed claims in Class 3 in full, holders of Allowed Claims entitled to priority under Section 507(a)(3) of the Bankruptcy Code will be paid in full in Cash before distributions are made to holders of allowed claims entitled to priority under Section 507(a)(4). -- Class 4 - General Unsecured Claims. The holders of Allowed General Unsecured Claims will each receive their Pro Rata share of the Trust Property except as provided below; provided, however, that there will be no distributions to holders of Allowed General Unsecured Claims unless all Allowed Administrative and Allowed Priority Claims have been paid in full. -- Class 5 - Convenience Claims. Claims under the class consist of Allowed General Unsecured Claims that would otherwise be included in Class 4 that are either (i) $2,500 or less or (ii) greater than $2,500 but as to which the holder thereof elects. The sole method of exercising the Convenience Class Election is to timely submit a "Ballot for Claim in Class 5 (Convenience Class) Against American LaFrance, LLC" included in the solicitation package containing this Plan. The Reorganized Debtor will deliver to holders of Allowed Convenience Claims on the Distribution Date, Cash in an amount equal to 100% of the Allowed Amount of the Claim not to exceed $2,500. -- Class 6 - Assumed Liabilities. The Reorganized Debtor will pay certain liabilities in the ordinary course of its business, including: * All bid and performance bonds. * All letters of credit that collateralize the Bonds. * All customer deposits made on orders or sales contracts that are secured by the Bonds. * All customer warranty obligations. * With respect to executory contracts assumed pursuant to the Plan, all customer deposits, commissions; rent or lease obligations; and cure amounts due pursuant to Section 365(b)(1) of the Bankruptcy Code. * All insurance premiums due and owing prior to the Petition Date. * All income-tax reimbursement payments in the amount of $3,382,838 due to PPAS. * All management fees in the amount of $297,523 due to Patriarch Partners Management Group. -- Class 7 - Interests. Each holder of an Interest will retain its Interest. Funds managed by affiliates of PPAS own 100% of the membership interests of ALF. If the Debtor holds a potential Preference Claim against a holder of an Allowed General Unsecured Claim, the Claimant may settle its liability and be released therefrom by electing and agreeing to (i) provide the Reorganized Debtor, for a period of 12 months after the Effective Date, with pricing for goods and services equal to or more favorable than the best pricing offered to ALF during 2007 (ii) reduce any Distribution on account of its Allowed General Unsecured Claim by an amount equal to 10% of the Preference Amount, provided, however, in no event will the Distribution be reduced by more than 50%. If enough affirmative votes for the Plan are not obtained and the Plan is not approved by the Court, or the Plan is not approved by the Court for any other reason, the Preference Election is null and void and the Debtor may prosecute all Preference Claims. The Official Committee of Unsecured Creditors has asserted that the Debtor will be unable to confirm the Plan without the affirmative vote of Class 4 General Unsecured Claims based on the argument that the Plan is not fair and equitable to Class 4 since Interest Holders in Class 7 will retain their Interests under the Plan. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. American LaFrance LLC will pursue a sale of its business operations in the event that the company's plan of reorganization is not confirmed. The Debtor filed its plan of reorganization on Feb. 3. (American LaFrance Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AROMAS-SAN JUAN: Fitch to Cut Rating to 'BB' If Fiscal Bal. Fail ---------------------------------------------------------------- As part of its routine surveillance process, Fitch Ratings downgrades Aromas-San Juan Unified School District, California's $11 million outstanding general obligation bonds to 'BBB-' from 'A+' and places the bonds on Rating Watch Negative. The downgrade reflects the district's substantially deteriorated financial position, including a negative unreserved fund balance, several years of deficit spending, and projected operating deficits. The Rating Watch Negative results from uncertainty about state funding cutbacks and the district's ability to reduce expenditures, produce balanced operations, and rebuild an adequate reserve. If the district cannot achieve fiscal balance, Fitch would expect to downgrade the bonds to the 'BB' category. The district covers a large area (100 square miles), including San Benito and Monterey counties. A housing construction boom resulted from the area's proximity to employment in Silicon Valley, but has slowed dramatically, and the area's residential foreclosure rate is reportedly high. Student attendance has declined an average 0.8% annually since 2002 and stands at 1,245 for fiscal 2007 and is projected to remain relatively stable. The district's income levels are below average given its agricultural base. The district's finances are very weak, marked by low total and unreserved fund balances. The district ended fiscal 2007 with total and unreserved general fund balances of $377,000 (3.1% of total expenses and transfers out) and negative $79,000 (-0.7%), respectively. In contrast, the district's fiscal 2004 total and unreserved fund balances were approximately $623,000 (6.2%) and $365,000 (3.6%), respectively. The district's fiscal 2007 operating deficit was approximately $175,000 and the fiscal 2008 budget shows a larger deficit of about $902,000. Factors contributing to the district's financial distress include higher than expected special education expenditures, previous employee compensation increases, and a marked drop in developer fees. The district's multi-year forecast predicts continuing operating deficits if significant action is not taken. The County Board of Education assigned a fiscal advisor to the district in January, and the district has responded by freezing spending and new hires and planning for employee reductions in fiscal 2009. Teacher and classified bargaining units are currently in salary negotiations with the district. Fitch believes that the state of California's budget imbalance will exacerbate the district's financial strain. However, strong and disciplined action by the district could avoid credit quality deterioration beyond the current level. Fitch will continue to monitor the district's upcoming reports and actions. ARUNDOTECH LLC: Case Summary & 14 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Arundotech LLC 5509 Via Mira Flores Thousand Oaks, CA 91320 Bankruptcy Case No.: 08-11458 Chapter 11 Petition Date: March 11, 2008 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Stephen F. Biegenzahn, Esq. 4300 Via Marisol Suite 764 Los Angeles, CA 90042-5079 Tel: 213-617-0017 Fax: 480-247-5977 efile@sfblaw.com Total Assets: $433,112 Total Debts: $5,107,455 Debtor's list of its 14 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rico International $5,000,000 8484 Dan Fernando Road Sun Valley, CA 91352 American Arbitration Association $50,000 Western Case Management Center 6795 North Lam Avenue, 2nd Floor Fresno, CA 93704 Michael Nicholson $12,517 5509 Via Mira Flores Thousand Oaks, CA 91320 Balcom Ranch $9,600 Mark Brown $8,785 Wells Fargo $12,164 Wells Fargo $5,000 Portland, OR Wells Fargo $5,000 Sacramento, CA George Nielsen $2,517 Franchise Tax Board $800 Department of Motor Vehicles $300 Progressive Insurance $252 AT & T $50 Southern California Edison $20 ASARCO LLC: Seeks to Expand Grant Thornton's Scope of Employment ---------------------------------------------------------------- ASARCO LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Texas to expand the scope of Grant Thornton LLP's services to include performing audit of the Debtors' consolidated balance sheet as of Dec. 31, 2007, and the consolidated earnings, changes in members' equity, and cash flows for the year ended. For the 2007 Audit Services, ASARCO will pay Grant Thornton according to the firm's customary hourly rates: Professional Hourly Rates ------------ ------------ Partners $485 to $500 Senior Managers $365 to $400 Managers $265 to $315 Senior Associates $200 to $230 Associates $160 to $185 Based on preliminary assessment of the Debtors' records, ASARCO expects to pay about $700,000, for Grant Thornton's 2007 Audit Services. ASARCO will also reimburse Grant Thornton for any necessary out- of-pocket expenses incurred by the auditing firm and indemnify the firm from any liability arising from ASARCO's knowingly misrepresentation or false or incomplete information provided to Grant Thornton. Edward O'Brien, a partner at Grant Thornton, assures the Court that his firm does not represent any interest adverse to the Debtors or their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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: Compelled to Give Discovery Documents to Asarco Inc. ---------------------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas ordered ASARCO LLC and its debtor- affiliates, and certain other parties to produce documents to Asarco Inc. relating to bidding procedures and the filing of the plan of reorganization, among others. Asarco Inc. Document Discovery Asarco Incorporated related that it has served to ASARCO LLC, the Official Committee of Unsecured Creditors of ASARCO LLC, and the United Steelworkers separate (i) requests for the production of documents in connection with the proposed bidding procedures for the sale of substantially all of ASARCO LLC's assets, and (ii) notices of deposition pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure. Asarco Inc. owns 100% of ASARCO LLC's equity. Asarco Inc. told the Court that it had grave doubts about the appropriateness of ASARCO LLC's proposed bidding procedures and believes that discovery into the business justification for the proposed sale transaction and the reasonableness of the proposed bidding process is essential for it to properly object to the request. In response, ASARCO LLC, the ASARCO Committee and the USW asked the Court to enter a protective order limiting their obligations to produce the document requests to Asarco Inc. ASARCO LLC asserted that Asarco Inc.'s discovery requests are overly broad and seek confidential documents, most of which are not reasonably calculated to lead the discovery of admissible evidence related to the proposed bidding procedures. ASARCO LLC also asserted that most of the documents sought by Asarco Inc., if discovered, would give Asarco Inc. an improper advantage over other potential plan sponsors in the bid process and potentially reduce the value of the bankruptcy estate. Harbinger Proposes Changes to Procedures Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., and Citigroup Global Markets, Inc., as holders of about $300,000,000 claims against ASARCO LLC, proposed modifications to the asset sale bidding procedures that: (a) limit ASARCO's unilateral ability to extend deadlines, delay the sale and plan process, and re-start the Chapter 11 plan process; (b) focus on maximizing, assuring and expediting recoveries for all creditors, including the Majority Bondholders; and (c) avoid conflicts of interests and ensure fair treatment for all bidders. Specifically, the Majority Bondholders objected to the entry of any order that does not include a language (i) assuring bidders that the confidential information they provide to ASARCO will be held confidential, and (ii) providing that the individuals reviewing bidder confidential information not be affiliated with a competing bidder. The Majority Bondholders related that the Debtors' financial advisor, Lehman Brothers Inc., is an affiliate of one of the bidders, D.E. Shaw. The Majority Bondholders pointed out that the bidding procedures requires each bidder to assure continued employment of ASARCO's management. The Majority Bondholders said they do not object to providing that assurance provided that no bidder should compete for the personal favor of managers and directors. "Such competition would verge on conduct prohibited by Section 152 of the U.S. Crimes and Criminal Procedures Code," J. Frasher Murphy, Esq., at Winstead PC, in Houston, Texas, on the Majority Bondholders' behalf, noted. The Majority Bondholders further asserted that it is inappropriate to allow ASARCO to reject bids for any reason without ever telling the rejected bidder what is wrong or giving the rejected bidder the opportunity to cure. Mitsui Wants Preservation of "Tag-Along Right" Mitsui & Co. (U.S.A.), Inc., and Mitsui & Co., Ltd., through their affiliates, Ginrei, Inc., and MSB Copper Corp., own 25% of the membership interest in Silver Bell Mining, LLC, which is 75% owned by ASARCO LLC's non-debtor subsidiary, AR Silver Bell, Inc. Mitsui related that it has entered into a Tag-Along Letter, dated February 5, 1996, with ARBS, which provides that in the event a third party acquires a majority interest in ARBS, Mitsui has the right to require the third-party to purchase all or a portion of its 25% membership interest in Silver Bell. Mitsui's counsel, David G. Gamble, Esq., at Carrington, Coleman, Sloman & Blumenthal, L.L.P., in Dallas, Texas, contended that the sale of ASARCO's stock in ARSB would trigger the Tag-Along Right. Mr. Gamble noted that because ASARCO seeks approval of procedures to sell its assets free and clear of any lien, claim or encumbrance, it is possible that ASARCO intends to strip Mitsui of its Tag-Along Right. Mitsui, thus, asked the Court not to eliminate its Tag-Along Right in the event ASARCO decides to sell its membership interest in ARSB. Mitsui asserted that ASARCO has no right under the Bankruptcy Code to abrogate the Tag-Along Right through the sale of the ARSB Stock. Mr. Gamble asserted that Section 363(f) of the Bankruptcy Code, which allows a debtor to sell its property free and clear "of any interest in such property," does not apply to the Tag- Along Right because the right is not an "interest" in the property being sold by ASARCO. Mr. Gamble further contended that even if the Tag-Along Right were an "interest" in the stock of ARSB, ASARCO cannot satisfy any of the five standards under Section 363(f) that would permit it to sell the ARSB stock free and clear of the Tag-Along Right. Moreover, assuming it could do so, Mr. Gamble maintained that ASARCO has not provided adequate protection to Mitsui as required under Section 363(e). Century Reserves Rights Under Insurance Policies Century Indemnity Company asked the Court to condition the approval of the proposed bidding procedures on a reservation of its rights under the insurance policies it issued to ASARCO to the extent that any draft or final agreement or any plan of reorganization may result in the modification of Century's rights. Century noted that the Bidding Procedures Motion does not expressly require ASARCO to: (i) seek Court approval of any final agreement ASARCO inks with a proposed buyer; and (ii) file with the Court either a copy of any draft agreement, which ASARCO intends to forward to potential bidders; any revised agreement, which ASARCO receives from potential bidders prior to the Plan Sponsor Selection Meeting; or any final agreement. Century contended that non-disclosure of any draft or final agreement makes it impossible for Century to determine whether the agreements may prejudice its rights. In separate filings, Mt. McKinley Insurance Company and Everest Reinsurance Company, and American Home Assurance Company and Lexington Insurance Company joined in Century's reservation of rights. Court Limits Document Production Judge Schmidt directs ASARCO LLC, the ASARCO Committee and the USW to produce to Asarco Inc.: * communications regarding the Bid Procedures Motion; * all documents and all communications concerning ASARCO LLC's decision to sell substantially all of its assets; and * all documents and communications concerning ASARCO LLC's prior decision to pursue a stand-alone plan of reorganization; Judge Schmidt, however, strikes some documents and communications from Asarco Inc.'s discovery request, including: * all documents concerning the "agreement in principal" between ASARCO LLC and its creditors constituents concerning the "structure of a plan of reorganization;" * all documents concerning the "plan process" agreed by ASARCO LLC and its creditors constituents; * all documents concerning the "multiple discussions" between ASARCO LLC and its creditors constituents, which resulted in the "Bid Procedures;" and * documents and communications sufficient to identify the 37 potential plan sponsors. Judge Schmidt permits ASARCO LLC, the ASARCO Committee and the USW to produce documents in a way that does not identify any potential plan sponsors. All documents and communications connected with the mediation process will not be produced in response to any discovery request. 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: Asarco Inc. Wants to File Claim Objections Under Seal ----------------------------------------------------------------- Asarco Inc. seeks permission from the U.S. Bankruptcy Court for the Southern District of Texas to file its objections to proofs of claim under seal. Asarco Incorporated relates that after preliminary expert discovery, ASARCO LLC estimated that the aggregate asbestos- related liability for its Asbestos Subsidiary Debtors would be between $242,100,000 and $446,900,000. The Asbestos Debtors estimate that their maximum possible aggregate asbestos-related liability is $180,000,000. In light of ASARCO LLC's own admissions regarding the maximum amount of its potential asbestos liability, Asarco Inc. notes that ASARCO LLC cannot value the asserted asbestos claims at face value. Indeed, Asarco Inc. relates that its own review of a sample of asbestos-related proofs of claims has uncovered glaring facial deficiencies throughout the Debtors' asbestos claim universe, rebutting any presumption of validity. Asarco Inc. says certain of those claims assert $1,000,000 of liability or more. Asarco Inc. asserts that there is no basis to pierce the Asbestos Debtors' "corporate veils," and that ASARCO LLC is not responsible for the asbestos claims filed against the Asbestos Debtors. Asarco Inc. says it intends to file objections to several asbestos claims. However, Asarco Inc. notes that its claim objections will describe certain confidential medical information derived from the Proofs of Claim and include the Proofs of Claim as exhibits. The Proofs Of Claim contain medical information as well as the claimants' Social Security Numbers. 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). BANTEK WEST: Defaults on Loan Guaranty; Auctions Collateral ----------------------------------------------------------- Bantek West Inc. and other company-borrowers are held liable under a defaulted loan of $85,273,547 obtained from various lenders with Colorado Commercial Finance LLC as documentation and administrative agent. Bantek West, Bantek Acquisition Corporation, Idaho Armored Services LLC, The Wilson Group Inc., EFMARK Service Company of Illinois Inc, Premium Armored Services Inc. are liable as loan parties under a guaranty dated Jan. 3, 2006, signed with Electronic Transactions Advantage Inc. and the lenders. Under a credit agreement, the lenders made a revolving and term loans and provided other financial accommodations to the loan parties. The loans and other obligations are secured by substantially all of the assets of the loan parties. The lenders held an auction involving their loan collateral on March 13, 2008, at the offices of Latham & Watkins LLP at 233 South Wacker Drive, Suite 5800 in Chicago, Illinois. The lenders had signed a stalking horse agreement with Pendum Acquisition Inc. who offered to buy the loan parties' collateral for $41,000,000, plus assumption of the ordinary course liabilities. The result of the auction has not been disclosed as of press time. BEAR STEARNS: To be Bought by JPMorgan Chase for $236 Million ------------------------------------------------------------- The Bear Stearns Companies Inc. and JPMorgan Chase announced Sunday morning that Bear Stearns has agreed to be bought by JPMorgan Chase. The Boards of Directors of both companies have unanimously approved the transaction. The transaction will be a stock-for-stock exchange. JPMorgan Chase will exchange 0.05473 shares of JPMorgan Chase common stock per one share of Bear Stearns stock. Based on the closing price of March 15, 2008, the transaction would have a value of approximately $2 per share. JPMorgan's bid of $2 per share represents a 97.5% percent discount to Bear Stearns book value of $80.0 that the firm has reported. The transaction values Bear Stearns at just $236 million based on the number of shares outstanding as of Feb. 16, The Wall Street Journal says. At Friday's close, Bear Stearns's stock-market value was about $3.54 billion, and the company finished at $30 a share in 4 p.m. New York Stock Exchange composite trading Friday, WSJ relates. Effective immediately, JPMorgan Chase is guaranteeing the trading obligations of Bear Stearns and its subsidiaries and is providing management oversight for its operations, WSJ says. Other than shareholder approval, the closing is not subject to any material conditions. WSJ says the transaction is expected to have an expedited close by the end of the calendar second quarter 2008. The Federal Reserve, the Office of the Comptroller of the Currency and other federal agencies have given all necessary approvals. In addition to the financing the Federal Reserve ordinarily provides through its Discount Window, the Fed will provide special financing in connection with this transaction. The Fed has agreed to fund up to $30 billion of Bear Stearns' less liquid assets. The discussions between the companies, which was overseen by the Federal Reserve and the Treasury Department, were rushed in order that the deal could be finalized before stock markets open in Asia at 8 p.m. Eastern time. MarketWatch reported that according to a Wall Street Journal report, citing a personal familiar with the matter, Bear Stearns had prepared to file for bankruptcy, "possibly as early as Monday morning", had the sale to J.P. Morgan not materialized. WSJ relates that through the weekend, Bear Stearns bankers were summoned to the company's headquarters in New York, where they were told to prepare lists of ongoing deals and business relationships. Representatives from prospective buyers circulated through conference rooms, with J.P. Morgan executives asking questions of Bear Stearns's senior management. A separate bidding group, including J.C. Flowers & Co. and Kohlberg Kravis Roberts & Co., also was in the mix, WSJ says, citing a person familiar with the discussions. WSJ notes that one of Bear's biggest attractions for J.P. Morgan is its prime brokerage business which caters to hedge fund clients. J.P. Morgan doesn't have such a business and executives there have long said that they would like to add those operations to the bank's portfolio, according to WSJ. J.P. Morgan, WSJ says, has been one of the banks eyeing the prime brokerage business of Bank of America Corp. That business reportedly is on the auction block. According to The New York Times, Bear Stearns' hedge fund servicing business and its clearing operations have suffered in recent months as investors and lenders lost confidence in Bear Stearns. Funding from Federal Reserve & JPMorgan In addition to the financing the Federal Reserve ordinarily provides through its Discount Window, the Fed will provide special financing in connection with the JPMorgan transaction. The Fed has agreed to fund up to $30 billion of Bear Stearns' less liquid assets. On March 14, 2008, Bear Stearns reached an agreement with JPMorgan to provide a secured loan facility for an initial period of up to 28 days allowing Bear Stearns to access liquidity as needed. Bear Stearns also disclosed it was talking with JPMorgan regarding permanent financing or other alternatives. Alan Schwartz, president and chief executive officer of The Bear Stearns Companies Inc., said, "Bear Stearns has been the subject of a multitude of market rumors regarding our liquidity. We have tried to confront and dispel these rumors and parse fact from fiction. Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations." Bear Stearns said it could make no assurance that any strategic alternatives will be successfully completed. Value to JPMorgan Shareholders, Dimon Says "JPMorgan Chase stands behind Bear Stearns," said Jamie Dimon, Chairman and Chief Executive Officer of JPMorgan Chase. "Bear Stearns' clients and counterparties should feel secure that JPMorgan is guaranteeing Bear Stearns' counterparty risk. We welcome their clients, counterparties and employees to our firm, and we are glad to be their partner." Mr. Dimon added, "This transaction will provide good long-term value for JPMorgan Chase shareholders. This acquisition meets our key criteria: we are taking reasonable risk, we have built in an appropriate margin for error, it strengthens our business, and we have a clear ability to execute." "The past week has been an incredibly difficult time for Bear Stearns. This transaction represents the best outcome for all of our constituencies based upon the current circumstances," said Alan Schwartz, President and Chief Executive officer of Bear Stearns. "I am incredibly proud of our employees and believe they will continue to add tremendous value to the new enterprise." The transaction is expected to be ultimately accretive to JPMorgan Chase's annual earnings. "This transaction helps us fill out some of the gaps in our franchise with manageable overlap," said Steve Black, co-CEO of JPMorgan Investment Bank. "We know the Bear Stearns leadership team well and look forward to working with them to bring our two companies together." "Acquiring Bear Stearns enables us to obtain an attractive set of businesses," said Bill Winters, co-CEO of JPMorgan Investment Bank. "After conducting due diligence, we're comfortable with the quality of Bear Stearns' business, and are pleased to have them as part of our firm." "JPMorgan Chase's management team has a strong track record of effective merger integration," said Heidi Miller, CEO of JPMorgan Treasury & Securities Services business. "We will work closely in the coming weeks with Bear Stearns' clients and management to execute the transaction quickly." Forbes reported Friday that JPMorgan Chase announced that it and the Federal Reserve Bank of New York would provide Bear Stearns with temporary funding, to keep Bear Stearns afloat. Shares of Bear Stearns plummeted on the news, down 47.4%, or $27.00, to $30.00 on Friday. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BEAZER HOMES: Two Vegas Projects Receive Notices of Default ----------------------------------------------------------- Two default notices were sent to Inspirada and Kyle Canyon Gateway, two large housing projects in Las Vegas and joint ventures involving Focus Property Group, Toll Brothers Inc., KB Home, Beazer Homes USA Inc., Pulte Homes Inc., The Ryland Group Inc., and Lennar Corp., according to reports by Reuters and Bloomberg News, citing Focus officers, John Ritter, CEO, and Thomas DeVore, COO. WSJ relates that Kimball Hill Homes, one of Toll's partners, is part of the Inspirada development. The default notices were issued after an interest payment on a $765 million loan was left unpaid, reports say. According to the reports, the companies involved in the projects are presently negotiating with lenders, a loan syndicate headed by J.P. Morgan Chase & Co. and Wachovia Corp. The partners in default are trying to talk out the loan terms, which were patterned on past market conditions, reports reveal. Both Messrs. Ritter and DeVore told reporters in an interview that revenue from the projects weren't enough to cover costs and fell short of lenders' expectations. Inspirada, according to Messrs. DeVore and Ritter, sold only 162 out of the 13,500 homes since its market opening, the reports relate. Mr. Ritter told WSJ that they initially expected to sell off all the 13,500 homes within 5 to 10 years, but due to the housing market slump, the selling period is now stretched to 10 to 15 years. According to WSJ, a pre-established schedule requires the joint ventures to buy lands, some of which are not necessary for the projects compelling partners to make large loans. Earlier, Focus paid its share of the Inspirada loan, which has reached $330 million, WSJ quotes Mr. Ritter as saying. Kyle Canyon has a loan of $435 million, Mr. Ritter told WSJ. Focus holds 15.5% stake in Inspirada and 23% stake in Kyle Canyon while Toll holds 10.5% stake in Inspirada and a 15% stake in Kyle Canyon, the reports note. These two companies are the largest stake partners in the joint ventures, reports add. Recent Troubles Hitting the Partners (1) Toll Brothers As reported in the Troubled Company Reporter on March 14, 2008, Toll Brothers 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. With the continued downturn in the homebuilding industry, some of these joint ventures or their participants have become unable to fulfill their obligations, Toll said in a Securities and Exchange Commission filing. Toll warned that the joint if the joint ventures or their participants do not honor their obligations, the company 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. (2) Lennar Corp. The TCR said on Feb. 29, 2008, that a group from the United Arab Emirates has offered to buy Lennar Corp. Buck Horne, an analyst with Raymond James and Associates commented that Goldman Sachs Group Inc. was rumored to have been hired as the investment banker for the deal. (3) KB Home On March 13, 2008, the TCR reported that KB Home will exit their markets in Albuquerque, New Mexico; Chicago, Illinois; and in the Mid-Atlantic, citing the continued slowdown in the housing market. KB Home spokesperson Lindsay Stephenson had said the company had a minimal presence in those three markets with roughly three to five communities in each region. KB Home exited the Indianapolis market last summer, and now has a total of four markets left. (4) Ryland Group The TCR related on March 10 that Ryland Group's mortgage unit is under scrutiny for questionable lending practices. Among others, the office of North Carolina banking commissioner accused Ryland Mortgage of employing unlicensed loan officers and charging exorbitant fees to homeowners. Ryland said that it will not admit wrongdoing. (5) Kimball Hill As reported in the TCR on Feb. 27, 2008, 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. WSJ reports that Kimball Hill is mulling a reorganization under chapter 11 of the U.S. Bankruptcy Code evidenced by its engagement of a chief restructuring officer. About Focus Property Focus Property Group -- http://www.focuspropertygroup.com/-- creates residential communities throughout the key Las Vegas metropolitan area as well as in other southwestern markets. About KB Home Based in Los Angeles, California, KB Home (NYSE: KBH) -- http://www.kbhome.com/-- is one of the largest homebuilders in the United States. The company has operating divisions in 13 states. About Lennar Corp. Headquartered in Miami, Florida, Lennar Corporation (NYSE: LEN and LEN.B) -- http://www.lennar.com/-- founded in 1954, builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides mortgage financing, title insurance, and closing services for both buyers of the company's homes and others. About Pulte Homes Pulte Homes Inc. (NYSE: PHM), based in Bloomfield Hills, Michigan, is one of America's home building companies with operations in 51 markets and 26 states, as well as in Puerto Rico. During its 57-year history, the company has delivered over 500,000 new homes. Pulte Mortgage LLC is a nationwide lender offering Pulte customers a wide variety of loan products and superior service. About Ryland Group Based in Calabasas, California and founded in 1967, The Ryland Group, Inc. -- http://www.ryland.com/-- is one of the nation's leading builders of single family homes, currently operating in 28 markets across the United States, with homebuilding revenues and consolidated net income for the trailing 12 months ended Sept. 30, 2007 of approximately $3.5 billion and ($44) million, respectively. 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. &