T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 18, 2008, Vol. 12, No. 66 Headlines ADVENTURE PARKS: Amended Plan Confirmation Hearing Set on April 30 ADVENTURE PARKS: Judge Laney Approves Amended Disclosure Statement AFFINITY GROUP: Dec. 31 Balance Sheet Upside-Down by $66.9 Million ALION SCIENCE: S&P Keeps 'B' Corporate Credit Rating ALLIED HOLDINGS: Teamsters Panel Balks at Local Union's Suit ALSIUS CORP: Deloitte & Touche Raises Substantial Doubt ARROW ELECTRONICS: Court Directs Return of $12MM Payment to Bridge ASARCO LLC: Court Denies El Paso Lift Stay Request ASARCO LLC: TCEQ Denies El Paso Counsel's Criminal Probe ASIA AUTOMOTIVE: Rothstein Kass Expresses Going Concern Doubt ATM FINANCIAL: Court OKs Biz Partners' Request for Ch. 11 Trustee BALLANTYNE RE: Moody's Cuts Rating to B1 from B2 on $50MM Notes BEAR STEARNS: S&P Puts Ratings on Developing Watch After JPMC Deal BEAR STEARNS: Rising Risk Profile Prompts Fitch to Chip Ratings BEAR STEARNS: Deteriorating Liquidity Cues Moody's to Cut Ratings BKF CAPITAL: Holtz Rubenstein Expresses Going Concern Doubt BLUEGRASS ABS: Moody's Cuts Ratings to C from Ba3 on Two Classes BRIDGE INFORMATION: $12.5MM Payment to Arrow Is Preferential BROTMAN MEDICAL: Exclusive Plan Filing Period Extended to May 22 BUILDERS FIRSTSOURCE: Poor Financial Cues Moody's to Cut Ratings BUILDING MATERIALS: Fitch Cuts Ratings and Removes Negative Watch C2 GLOBAL: Deloitte & Touche Expresses Going Concern Doubt CAMBER 6: Moody's Slashes Ratings to C on Five Note Classes CANADIAN TRUSTS: Court Okays Application for Creditor Arrangement CANARGO ENERGY: L J Soldinger Expresses Going Concern Doubt CARLYLE CAPITAL: Proceeds with Liquidation of Remaining Assets CCI OF WEST PALM: Gets $15 Mil. Offer, Defers Auction to April 14 CHARLES MITCHELL: Case Summary & Five Largest Unsecured Creditors CHENIERE ENERGY: S&P Holds 'B' Rating with Stable Outlook CIGNA CORPORATION: Moody's Affirms (P)Ba1 Preferred Stock Rating CLEBURNE & TM: Investors Ink Tentative Settlement Agreement COMM INTELLIGENCE: GHP Horwath Expresses Going Concern Doubt CRF-19 LLC: S&P Puts 'BB' Preliminary Rating on $4.5MM Cl. D Notes CYGNAL TECHNOLOGIES: Court OKs CCAA Joint Plan of Arrangement DEATH ROW: Resolves Adversary Feud with Tupar Shakur Estate DELPHI CORP: Court Approves Denso Corp. Settlement Agreement DELPHI CORP: Court Allows Plan Investors' New EPCA Interpretation DELPHI CORP: Completes Rights Offering for 62,707,305 Shares DELPHI CORP: Moody's Holds (P)B2 Rating on $3.7-Bil. Term Loans DON MCCORMACK: Voluntary Chapter 11 Case Summary ELLIOTT BUILDING: Two Banks Seize of Subdivision Properties ENVIRONMENTAL TECTONICS: Modifies Credit Deal with H.F. Lenfest FEDERAL-MOGUL: U.S. Trustee Contests Financial Advisor's Fees FEDERAL-MOGUL CORP: Earns $1.4 Billion in Fiscal Year 2007 FEDERAL-MOGUL: Professionals Bill $323 Million in Fees & Expenses FLEETWOOD ENTERPRISES: Ongoing Losses Cue S&P to Junk Corp. Credit FORGITRON LLC: Case Summary & 18 Largest Unsecured Creditors GLASSMASTER CO: Bentley Deal to be Examined by Case Trustee GLOBAL CREDIT: S&P Chips Preferred Shares Rating to B+ from BB- GREAT PANTHER: Board Adds Rights Plan to Deal With Take-Over Bids HOLLEY PERFORMANCE: IRS Objects to Prepackaged Chapter 11 Plan HOVNANIAN ENTERPRISES: Fitch Affirms 'B-' Issuer Default Rating IAC/INTERACTIVECORP: Court Decides Spinoff Dispute on March 28 INTERNATIONAL PAPER: To Buy Weyerhaeuser's Unit for $6 Bil. Cash INTERSTATE BAKERIES: PBGC Reserves Right to Review Pension Plans INVACARE CORP: Moody's Affirms B1 Corporate Family Rating ISLETON LLC: Voluntary Chapter 11 Case Summary IXIS ABS: Moody's Lowers Ratings to C on Three Note Classes J.T. REAL ESTATE: May Voluntary File for Chapter 7 Liquidation JUNIPER NETWORKS: Board Permits Repurchase of $1 Bil. Common Stock KC POOLE: Voluntary Chapter 11 Case Summary LEGENDS GAMING: Bankruptcy Filing Cues S&P to Put Default Rating LE MONDE CDO: Moody's Junks Ratings on Three Note Classes LIBERTY MEDIA: Court Issues IAC Spinoff Feud Ruling on March 28 LILIA CHAVEZ: Voluntary Chapter 11 Case Summary LILLIAN VERNON: Court Approves Asset Sale Bidding Procedures LOS OSOS COMMUNITY: S&P Lifts Underlying Rating to BBB- from C MAIDENFORM BRANDS: Earns $34.2 Mil. for Year Ended Dec. 29, 2007 MARKOV CDO: Moody's Slashes Ratings on 12 Note Classes MOMENTIVE PERFORMANCE: S&P Holds All Ratings and Revises Outlook MONEYGRAM INT'L: Increased Debt Cues S&P to Lower Rating on B+ MTR GAMING: Completes Sale of Binion's Gambling to TLC Casino NANOGEN INC: Restructures $12.9 Million Senior Convertible Notes NARRAGANSETT PELLET: Voluntary Chapter 11 Case Summary NATIONAL LAMPOON: Receives Listing Non-Compliance Notice from AMEX NEO CDO: Moody's Downgrades Ratings on Eight Note Classes NEXMED INC: Losses Cue Amper to Raise Going Concern Doubt NEXTMEDIA OPERATING: S&P Cuts Corp. Credit to B-; Puts Neg. Watch NORTHLAKE CDO: Moody's Cuts Rating to Ca on $14.5MM Cl. III Notes NORTHWESTERN CORP: S&P Lifts Corp. Credit Rating on BBB from BB+ O'CHARLEY'S INC: Operating Decline Prompts S&P to Revise Outlook OCWEN FINANCIAL: Failed Proposal Cues Fitch to Put Negative Watch OWENS-ILLINOIS: Board OKs Preferred Stock Redemption on March 31 PARD CONTRACTORS: Voluntary Chapter 11 Case Summary PLACE PORTFOLIO: Reznick Group Expresses Going Concern Doubt PLASTECH ENGINEERED: Won't Decide on Assumption of Amerigas Pact POLY-PACIFIC INT'L: To Grant 2.5 Mil. Stock Options to Personnel POWERMATE HOLDING: Case Summary & 20 Largest Unsecured Creditors PRB ENERGY: May Employ Faegre Benson as Special Corporate Counsel PRC LLC: Court Fixes May 1 as General Claims Bar Date PRC LLC: Has Until April 1 to File Disclosure Statement PRC LLC: Can Employ Weil Gotshal as Bankruptcy Counsel PRC LLC: Wants to Employ Regis McElhatton as CEO PREMIER PROPERTIES: Faces $80 Mil. Foreclosure Case vs. Wachovia PROTECTED VEHICLES: Creditors Committee Wants McNair PA as Counsel PROTECTED VEHICLES: Wants Gibbs and Holmes as Special Counsel QUAKER FABRIC: Wants Civil Action Removal Deadline Set on June 11 RESOURCE REAL: Fitch Holds 'B' Rating on $28.7MM Class M Certs. SABINE PASS: S&P Affirms 'BB' Rating with Stable Outlook SALEM COMMS: Had Net Loss of $1.4MM for Qrtr. Ended Dec. 31, 2007 SANDRIDGE ENERGY: S&P Outlook Positive; 'B' Rating Affirmed SCO GROUP: Bankruptcy Court Sets April 21 as Claims Bar Date SECURITY CAPITAL: Restructuring Plan Mulls Termination of New Biz SECURITY CAPITAL: Moody's Cuts Senior Debt Initial Rating to 'Ba1' SEYCHELLE WATER: Says Securities on Dual Trade Starting March 31 SHAPES/ARCH: Case Summary & 79 Largest Unsecured Creditors SIRVA INC: Class Action Plaintiffs Want Automatic Stay Lifted SIRVA INC: Parties Agree to Lift Stay on Preference Action SIRVA INC: Discloses Info Related to European Share Purchase Deal SIRVA INC: U.S. Trustee Objects to Appointment of Class 5 Panel SPYRUS INC: Wants to Obtain $2 Million DIP Facility of John Miller SPRYUS INC: Files Disclosure Statement in Delaware SPRYUS INC: Plan Hearing Scheduled for April 23 STRADA 315: Court Approves to Use Cash Collateral on Interim Basis UNIFI INC: Subsidiary Sells South Carolina Assets for $4 Million UPSNAP INC: Terminates Merger Agreement with Mobile Greetings U.S. CONCRETE: Reports $69 Million Net Loss for Year Ended 2007 WESTMORELAND COAL: Sells $15 Million Convertible Notes to Tontine WILD WEST: Settlement Discussions with Village Charters Continue WORKFLOW MANAGEMENT: S&P Lowers Corp. Credit Rating to B- from B WORNICK CO: Can Access DDJ Capital's $35,000,000 DIP Facility ZIFF DAVIS: U.S. Trustee Appoints Seven-Member Creditors Committee ZIFF DAVIS: Alan W. Kornberg Discloses Creditor Representation ZIFF DAVIS: Allowed to Pay Wages, Benefits Prior to Bankruptcy ZIFF DAVIS: Court Grants Motion to Extend Time to File Schedules * Fitch Says Home Prices Decline Yield to Bank Home Equity Losses * S&P Lowers Ratings on 90 Tranches from 16 US Hybrid CDOs * Large Companies with Insolvent Balance Sheets ********* ADVENTURE PARKS: Amended Plan Confirmation Hearing Set on April 30 ------------------------------------------------------------------ The Hon. John T. Laney, III, of the United States Bankruptcy Court for the Middle District of Georgia, in Valdosta, scheduled a hearing on April 30, 2008, at 2:00 p.m., to confirm Adventures Parks Group LLC and its debtor-affiliates' Amended Chapter 11 Plan of Reorganization. The hearing will be held in the United States Bankruptcy Court at One Arsenal Place, Suite 309, 901 Front Avenue in Columbus, Georgia. Deadline to object to the confirmation of the Plan is April 16, 2008. Based in Valdosta, Georgia, Adventure Parks Group LLC is the holding company of Wild Adventures and Cypress Gardens. Wild Adventures operates an amusement park in Valdosta, Georgia, while Cypress operates an amusement park in Winter Haven, Florida. The company, along with Wild Adventures and Cypress Gardens, filed for chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos. 06-70659 through 06-70661). George H. McCallum, Esq., James P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represent the Debtors. The U.S. Trustee for Region 21 appointed creditors to serve on an Official Committee of Unsecured Creditors in these cases. Mark J. Wolfson, Esq., at Foley & Lardner LLP and James C. Frenzel, Esq., at James C. Frenzel P.C. in Georgia represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. ADVENTURE PARKS: Judge Laney Approves Amended Disclosure Statement ------------------------------------------------------------------ The Hon. John T. Laney, III, of the United States Bankruptcy Court for the Middle District of Georgia, in Valdosta, approved Adventure Parks Group LLC and its debtor-affiliates' Second Amended Disclosure Statement dated Feb. 28, 2008, explaining their Second Amended Chapter 11 Plan of Liquidation. Judge Laney determined that the Debtors' Amended Disclosure Statement contains "adequate information" as defined in Section 1125 of the Bankruptcy Code. Overview of the Plan The Debtors tell the Court that the Plan contemplates the complete liquidation of their remaining assets. The Plan provides for the appointment of GlassRatner Advisory and Capital Group Inc., an entity selected by the Debtors and the Official Committee of Unsecured Creditors, as liquidating trustee who will manage the liquidation of the Debtors' assets and review their financial condition and other intra-company transactions. Furthermore, the liquidating trustee is expected to assert claims against certain former officers and directors of the Debtors for breach of fiduciary duty and negligence. Asset Sale On Sept. 27, 2007, the Court approved the sale of the Debtors' two affiliates for a total purchase price of $51,300,000. Specifically, the Debtors' Wild Adventures Valdosta LLC affiliate was sold to Herschend Family Entertainment Corporation for $34,500,000, while their Cypress Gardends Adventure Park LLC unit was purchased for $16,800,000 by Land South Holdings LLC. Alvarez & Marsal Securities LLC, the turnaround and restructuring firm, was retained as financial advisors by the Debtors to market the properties. Treatment of Claims Under the Plan, these claims will be paid in full on the effective date, including: a) administrative claims; and b) non-tax priority claims. All holders of allowed secured claims will retain any lien securing their claims. Secured claims is comprised of: a) D&D Construction Services of Orlando Inc. claim; b) Dell Financial Services LP claim; c) First State Bank WAV claim; d) Fitraco N.V. claim; e) General Electric Capital Corporation agent claim; f) materialmen's lien claim; g) set-off claim; h) Sysco Food Services -- Jacksonville, Inc. claim; i) MG Agency Services LLC secured claim; and j) secured claims of: -- judge creditors of the Debtors; -- secured claim other than secured; and -- governmental units for real and property ad valorem taxes. Convenience Class Claims will receive at most $250 on the effective date. Each holders of these claims will be entitled a pro rata share, among others things: a) general unsecured claim; and b) subordinated claims. If paid, both claims will be paid in cash in full plus post- confirmation interest determined by the liquidating trustee. Holders of equity interests will not receive or retain any property on account of their interest under the plan. Holders are not entitled to vote on the plan. A full-text copy of Adventure Parks' Second Amended Disclosure Statement is available for a fee at: http://www.researcharchives.com/bin/download?id=080317012635 A full-text copy of Adventure Parks' Second Amended Chapter 11 Plan of Liquidation is available for a fee at: http://www.researcharchives.com/bin/download?id=080317012321 Based in Valdosta, Georgia, Adventure Parks Group LLC is the holding company of Wild Adventures and Cypress Gardens. Wild Adventures operates an amusement park in Valdosta, Georgia, while Cypress operates an amusement park in Winter Haven, Florida. The company, along with Wild Adventures and Cypress Gardens, filed for chapter 11 protection on Sept. 11, 2006 (Bankr. M.D. Ga. Case Nos. 06-70659 through 06-70661). George H. McCallum, Esq., James P. Smith, Esq., and Ward Stone, Jr., Esq., at Stone & Baxter, LLP, represent the Debtors. The U.S. Trustee for Region 21 appointed creditors to serve on an Official Committee of Unsecured Creditors in these cases. Mark J. Wolfson, Esq., at Foley & Lardner LLP and James C. Frenzel, Esq., at James C. Frenzel P.C. in Georgia represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they estimated assets and debts between $50 million and $100 million. Adventure Parks, on March 11, 2008, filed an Amended Plan of Reorganization and Disclosure Statement. AFFINITY GROUP: Dec. 31 Balance Sheet Upside-Down by $66.9 Million ------------------------------------------------------------------ Affinity Group Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $424.3 million in total assets and $491.2 million in total liabilities, resulting in a $66.9 million total stockholders' deficit. At Dec. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $124.2 million in total current assets available to pay $141.4 million in total current liabilities. The company reported net income of $18.9 million on revenues of $562.2 million for the year ended Dec. 31, 2007, compared with a net loss of $5.7 million on revenues of $514.6 million for the year ended Dec. 31, 2006. Membership services revenues for 2007 of $149.9 million increased by $12.5 million or 9.1% from 2006. Publications revenues for 2007 of approximately $90.6 million increased by $3.8 million or 4.4% from 2006. Retail revenue for 2007 of $321.7 million increased approximately $31.3 million or 10.8% from 2006. Income from operations of $45.7 million for 2007 increased $3.7 million or 8.8% compared to 2006. This increase was attributable to increased gross profit in the retail and membership services operations of $11.4 million and $5.1 million, respectively, partially offset by increased operating expenses of $12.6 million and reduced gross profit for publications operations of $161,000. Income before income taxes for 2007 was $20.5 million, or 24.0% more than 2006. The company recorded $1.6 million of income tax expense for 2007, compared to a $22.3 million income tax expense for 2006. This expense decrease was primarily due to AGHC's S corporation change of tax status election effective for the second quarter of 2006, which included AGI and all of its subsidiaries, with the exception of Camping World Inc. and its wholly owned subsidiaries which will remain Subchapter C corporations. As a result, all deferred tax assets and liabilities were revalued with the exception of those related to Camping World Inc. and its wholly-owned subsidiaries and other potential built-in gains. Further, the company increased its valuation allowance by $2.7 million for 2007 as it was determined that it is more likely that the company would have insufficient taxable income in the current, carryback, or carryforward periods under the tax laws to realize the future tax benefit of its deferred tax assets. Long-Term Debt At Dec. 31, 2007, the company had long-term debt, net of current portion, of $282.8 million, compared to long-term debt, net of current portion, of $277.9 million at Dec. 31, 2006. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?293e About Affinity Group Headquartered in Ventura, California, Affinity Group Inc. -- http://www.affinitygroup.com/-- is a provider of outdoor clubs, media and events that service the safety, security, comfort and convenience needs of the North American recreational vehicle and outdoor enthusiast market. * * * As reported in the Troubled Company Reporter on Dec. 26, 2007, Standard & Poor's Ratings Services revised its outlook on Affinity Group Holding Inc. and its operating subsidiary, Affinity Group Inc., to stable from positive. At the same time, S&P affirmed the ratings, including the 'B' corporate credit rating, on the company. ALION SCIENCE: S&P Keeps 'B' Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services kept its ratings on Alion Science and Technology Corp., including the 'B' corporate credit rating, on CreditWatch with negative implications, where they were placed on Feb. 28, 2008. The ratings were placed on CreditWatch following McLean, Virginia- based Alion Science's announcement that it had delayed filing of its Form 10-Q for the quarter ended Dec. 31, 2007. On March 13, 2008, the company filed its amended Form 10-K for the fiscal year ended Sept. 30, 2007, and its Form 10-Q for the period ended Dec. 31, 2007. The company was compliant with covenants related to its credit facilities as of Dec. 31, 2007. The ratings remain on CreditWatch with negative implications, reflecting Alion Science's limited liquidity and negative cash flow from operations in the 12 months ended December 2007. Cash balances were immaterial and availability under the revolving credit facility was less than $20 million. "We will meet with management to assess the company's operating outlook and near-term financial profile before resolving the CreditWatch," said Standard & Poor's credit analyst David Tsui. ALLIED HOLDINGS: Teamsters Panel Balks at Local Union's Suit ------------------------------------------------------------ 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 its request to dismiss a complaint filed by the Automobile Transport Chauffeurs Demonstrators and Helpers Union, Teamsters Local 604 and George Warner against Allied Holdings Inc. and its debtor-affiliates. Local Union's Lawsuit Teamsters Local 604 is a local union and labor organization affiliated with the International Brotherhood of Teamsters that represents workers employed in the automobile transport industry. Teamsters Local 604 is an unincorporated association with members residing in various states including, without limitation, Missouri and Illinois. Mr. Warner is an employee of Performance Transportation Services, Inc., and a member of Teamsters & Chauffeurs Local 580, a local union affiliated with the IBT. Mr. Warner is a shop steward of a certified collective bargaining unit comprised of PTS employees represented by Local 580. Pursuant to their complaint, Teamsters Local 604 asked the U.S. Bankruptcy Court for the Northern District of Georgia to stop the Debtors from modifying their confirmed chapter 11 Plan, and soliciting for the modification of the Plan without the Debtors' compliance with all provisions of Sections 1127 and 1125 of the U.S. Bankruptcy Code. Mark Potashnick, Esq., at Weinhaus & Potashnick, in St. Louis, Missouri, counsel to Teamsters Local 604, related that Allied Holdings, Inc., now known as Allied Systems Holdings, Inc., announced plans to purchase Performance Transportation Services, Inc., and pay the acquired employees concessionary wage rates in contravention of the confirmed Chapter 11 Plan. The Term Sheet under the Chapter 11 Plan protects Teamster- represented employees from the wage concessions imposed upon the Debtors' employees in the event that the Debtors acquire another employer, or its business, subject to the National Master Automobile Transporters Agreement. Mr. Potashnick told the Court that the Debtors and the Teamsters Committee are attempting to accomplish a sub rosa modification of the Plan at a time when the Bankruptcy Code prohibits any modification. The Debtors and the Teamsters National Automotive Transporters Industry Negotiating Committee asked the Court to deny the Teamsters Local 604's request for preliminary injunction, and dismiss the Teamsters Local 604's complaint against TNATINC. Representing TNATINC, Frederick Perillo, Esq., at Previant, Goldberg, Uelmen, Gratz, Miller and Brueggeman, s.c., in Milwaukee, Wisconsin, said that neither the Teamsters Local 604 nor Mr. Warner is affected by the alleged violations because neither is a holder of a claim or interest entitled to accept or reject the original plan. The Debtors denied the Teamsters Local 604's allegation that the Debtors have announced to their employees that they intend to obtain the Court's approval of a new term sheet. Local Union Insists Standing to File Complaint Mr. Potashnick asserted that Teamsters Local 604 has standing to bring the action because: -- Teamsters Local 604's members stand not only as "aggrieved persons" who can enforce rights under the original term sheet, but also as intended third party beneficiaries of that Term Sheet; and -- Teamsters Local 604 has representational standing to pursue the adversary proceeding. TNATINC's Objections to the Complaint Mr. Perillo 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. Debtors Object to Complaint 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 expressed 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. ALSIUS CORP: Deloitte & Touche Raises Substantial Doubt ------------------------------------------------------- Deloitte & Touche LLP raised substantial doubt about Alsius Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring losses from operations. The company has incurred significant net losses since inception, and has relied on its ability to obtain financing. Management expects operating losses and negative cash flows to continue for the foreseeable future as the company incurs additional costs and expenses related to continued development of its products, and obtaining Food and Drug Administration approval for new indications. Financials Alsius reported a $22,235,000 net loss on $9,114,000 of revenues for the year ended Dec. 31, 2007, as compared with a $17,578,000 net loss on $5,979,000 of revenues in 2006. Alsius' balance sheet at Dec. 31, 2007, showed $35,602,000 in total assets, $11,590,000 in total liabilities, and $24,012,000 in total stockholder's equity. Net cash used in operations was $20,700,000 for the year ended Dec. 31, 2007 and $11,900,000 for the year ended Dec. 31, 2006. The net cash used in each of these periods primarily reflects the net loss for those periods, offset by non-cash charges such as depreciation and amortization, stock-based compensation, amortization of debt discounts and the change in fair value of warrant liabilities associated with a May 2005 and February 2007 secured promissory notes and Merrill Lynch Capital Term Loan and the change in the fair value of the warrant liabilities and embedded derivatives associated with the company's 2006 Bridge Notes. Non-cash charges for depreciation and amortization, stock-based compensation, amortization of debt discounts and the change in fair value of warrant liabilities and embedded derivatives totaled $6,500,000 and $4,300,000 for the years ended Dec. 31, 2007 and 2006, respectively, representing a $2,200,000 increase. This increase was comprised of a $1,400,000 increase in discount amortization associated with the 2006 bridge notes, and increase in stock-based compensation of $2,800,000 during 2007, offset by a decrease of $2,100,000 of change in fair value of warrant liabilities associated with the company's debt instruments since it converted or repaid its debt instruments in 2007. Management expects operating losses and negative cash flows to continue for the foreseeable future as the company incurs additional costs and expenses related to continued development of the its products, and obtaining FDA approval for new indications. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?292c About Alsius Corporation Alsius Corporation, (NasdaqCM: ALUS) -- http://www.alsius.com-- through its wholly owned subsidiary, Alsius Medical Corporation, develops, manufactures, markets, and sells catheter-based products to control patient temperature in hospital critical care settings. Its products are used for cooling and temperature control of patients with severe neuronal injury, including those who have suffered stroke, traumatic brain injury, and cardiac arrest. The company's products include CoolGard and ThermoGard temperature regulation systems, which are computer-controlled cooling and warming units, as well as three families of single-use catheters, such as Cool Line, Icy, and Fortius used with the systems. It also offers hospital interface accessory, which enables the caregiver to display the patient's temperature on both the Alsius system and the patient monitor. Alsius markets its products to acute care hospitals and critical care physicians through its direct sales force in the United States, as well as through independent distributors in international markets. The company was incorporated in 1991 and is based in Irvine, Calif. ARROW ELECTRONICS: Court Directs Return of $12MM Payment to Bridge ------------------------------------------------------------------ Arrow Electronics, Inc. disclosed last week that an opinion has been rendered in the proceeding Bridge Information Systems, et. anno v. Merisel Americas, Inc. & MOCA., in favor of Bridge Information Systems Inc., the estate of a former Global Enterprise Computing Solutions customer that declared bankruptcy in 2001. The proceeding is related to sales made by the MOCA division of ECS in 2000 and early 2001. The administrator of the Bridge estate had sought the return of approximately $24.0 million plus interest with respect to allegedly preferential payments made to MOCA, a company Arrow purchased from Merisel Americas in the fourth quarter of 2000, shortly before Bridge declared bankruptcy. In the opinion, the Bankruptcy Court found that a total of $12.5 million of the payments received were preferential, and must be returned to Bridge. Arrow intends to continue to defend its position through post- trial motions and an appeal if necessary. This amount will be accrued in the first quarter of 2008 and therefore impact the comparability of the company's results. About Bridge Information Bridge Information Systems Inc. filed a voluntary petition for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code on Feb. 15, 2001 (Bankr. E.D. Mo. Case Nos. 01-41593 through 01- 41614, inclusive). On February 13, 2002, Judge McDonald confirmed a chapter 11 plan of liquidation, which, among other items, transferred ownership of the company's assets to the holders of Bridge's secured creditors. Thomas J. Moloney, Esq., Seth A. Stuhl, Esq., and Kurt A. Mayr, Esq., at Cleary, Gottlieb, Steen & Hamilton in New York served as lead counsel to Bridge in its chapter 11 cases. Gregory D. Willard, Esq., Lloyd A. Palans, Esq., and David M. Unseth, Esq., at Bryan Cave LLP in St. Louis, served as local counsel. About Arrow Electronics Headquartered in Melville, New York, Arrow Electronics Inc. -- http://www.arrow.com/-- provides products, services and solutions to industrial and commercial users of electronic components and computer products. Arrow serves as a supply channel partner for nearly 600 suppliers and more than 130,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of over 270 locations in 53 countries and territories. The company operates in France, Spain, Portugal, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden, Italy, Germany, Austria, Switzerland, Belgium, the Netherlands, United Kingdom, Argentina, Brazil, Mexico, Australia, China, Hong Kong, Korea, Philippines and Singapore. * * * Arrow Electronics senior subordinated stock continues to carry Moody's Investors Service's Ba1 rating. The company's senior preferred stock is rated at Ba2. ASARCO LLC: Court Denies El Paso Lift Stay Request -------------------------------------------------- The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas denied the request of the city of El Paso, Texas to lift the automatic stay, after finding that Section 362 of the U.S. Bankruptcy Code does not apply to the filing and pursuit of a Petition for Revocation of ASARCO LLC's Air Quality Permit No. 20345 with the Texas Commission on Environmental Quality. As reported in the Troubled Company Reporter on Feb. 28, 2008, El Paso intended to file a Petition for Revocation of ASARCO's Air Permit to block the reopening of the El Paso Smelter. Judge Schmidt clarified that, to the extent the automatic stay applies, El Paso is not prohibited from filing and pursuing the Revocation Petition. 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: TCEQ Denies El Paso Counsel's Criminal Probe -------------------------------------------------------- The Texas Commission on Environmental Quality denied the request of El Paso County Attorney Jose Rodriguez, Esq., for a criminal investigation into ASARCO LLC's El Paso copper smelter, the Associated Press reported. Mr. Rodriguez, according to the AP, has asserted that ASARCO violated the Texas Solid Waste Act, the Texas Water Code, and the Health Safety Code. In response, Mr. Rodriguez said in a public statement that the TCEQ's decision prevents any local law enforcement agency from taking further criminal action against ASARCO. 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). ASIA AUTOMOTIVE: Rothstein Kass Expresses Going Concern Doubt ------------------------------------------------------------- Rothstein, Kass & Company PC, based in Roseland, N.J., raised substantial doubt about the ability of Asia Automotive Acquisition Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm related that the company will face a mandatory liquidation if a business combination is not consummated by April 18, 2008. Asia Automotive posted a net loss of 2,546,812 on $0 revenue for the year ended Dec. 31, 2007, as compared with a net loss of $3,569,613 on $0.00 revenue in the prior year. At Dec. 31, 2007, the company's balance sheet showed $39,985,499 in total assets, $24,012,100 in total liabilities and $15,973,399 in stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $35,611 in total current assets available to pay $16,123,809 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?293d About Asia Automotive Asia Automotive Acquisition Corporation -- (OTC BB: AAAC.OB) -- does not have significant operations. It intends to acquire one or more automotive component supplier operating businesses that have their primary operating facilities located in the People's Republic of China, the Republic of India, and/or the Association of Southeast Asian Nations. The company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, or other similar business combination, with an operating business. Asia Automotive was organized in June 2005 and is based in Birmingham, Michigan. ATM FINANCIAL: Court OKs Biz Partners' Request for Ch. 11 Trustee ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida approved the request of ATM Equity LP to appoint a Chapter 11 trustee for the administration of the Chapter 11 bankruptcy case of ATM Financial Services LLC, Bill Rochelle of Bloomberg News reports. At the same time, the Court rejected the request of the Debtor to convert the Chapter 11 case to a Chapter 7 proceeding. As reported in the Troubled Company Reporter on Feb. 22, 2008, ATM Equity asked the Court to direct the appointment of a Chapter 11 trustee to take over the Chapter 11 bankruptcy case of ATM Financial. ATM Equity, which operates automated teller machines across the United States, disclosed that it lost $30 million in ATMs, cash, and ATM surcharge revenue to the Debtor. ATM Financial denied the allegation, stating that the complainant's Court filings "are replete with factual errors." ATM Equity told the Court that the Debtor -- which they employed to buy or lease ATMs, and operate the machines on the complainant's behalf -- cheated ATM Equity with fake ATM leases, missing ATMs and disputed ATM ownership claims, according to The News & Observer. On Feb. 7, 2008, prior to the Debtor's bankruptcy filing, Superior Court Judge A. Leon Stanback Jr. issued a temporary restraining order, as requested by ATM Equity, freezing the bank accounts of ATM Financial. Headquartered Leesburg, Florida, ATM Financial Services LLC -- http://atmdoctor.com/-- provides, install, and services automated teller machines. The company filed for Chapter 11 protection on Feb. 12, 2008 (Bankr. M.D. Fla. Case No. 08-00969). Peter N. Hill, Esq., at Wolff Hill McFarlin & Herron PA, in Orlando, Florida, represents the Debtor. When the Debtor filed for protection from its creditors, it listed assets and debts between $1 million and $10 million. from Bill Rochelle: ATM Equity LP, an owner of automated-teller machines, persuaded the bankruptcy judge at a March 4 hearing to appoint a Chapter 11 trustee to take over the Chapter 11 reorganization filed Feb. 12 in Orlando, Florida, by ATM Financial Services LLC. At a hearing yesterday, the bankruptcy judge turned down the request by ATM Financial to convert its own case to a liquidation in Chapter 7. In papers first filed in state court, ATM Equity alleges it performed an audit and learned that of the 1,200 ATMs it was supposed to own, 256 did not exist and the remainder were subject to disputed claims of ownership. The Chapter 11 filing by Leesburg, Florida-based ATM Financial says assets and debt are both less than $10 million. The case is In re ATM Financial Services LLC, 08-00969, U.S. Bankruptcy Court, Middle District of Florida (Orlando). BALLANTYNE RE: Moody's Cuts Rating to B1 from B2 on $50MM Notes --------------------------------------------------------------- Moody's Investors Service has downgraded these notes issued by Ballantyne Re plc and Orkney Re II plc: Ballantyne Re * $250 million of 30-year Class A-1 Floating Rate Notes -- Current Rating: Ba1, on review for downgrade -- Prior Rating: Baa3, on review for downgrade * $10 million of 30-year Class B-1 Subordinated Fixed Rate Notes -- Current Rating: B2, on review for downgrade -- Prior Rating: B1, on review for downgrade * $40 million of 30-year Class B-2 Subordinated Floating Rate Notes -- Current Rating: B2, on review for downgrade -- Prior Rating: B1, on review for downgrade Orkney Re II * $42.5 million of 30-year Series A-2 Floating Rate Notes -- Current Rating: Ba1, on review for downgrade -- Prior Rating: Aa2, on review for downgrade * $30.0 million of 30-year Series B Floating Rate Notes -- Current Rating: Ba3, on review for downgrade -- Prior Rating: Baa2, on review for downgrade Ballantyne Re and Orkney Re II are independent special purpose reinsurers each sponsored by Scottish Annuity & Life Insurance Company Ltd. (Ba3 insurance financial strength, on review for downgrade) for the purpose of financing the excess reserve requirement associated with distinct blocks of business ceded by Scottish Re (U.S.), Inc. (Ba3 IFS rating, on review for downgrade), a subsidiary of Scottish Re Group Limited (Scottish Re; NYSE: SCT; Caa3 preferred stock, on review for downgrade). The reinsurance agreements between Scottish Re (U.S.) and the two special purpose reinsurers covers defined blocks of level premium term life policies subject to the statutory reserve requirements of Regulation XXX. Moody's rating analysis views the actuarial assumptions in Regulation XXX as producing economically redundant statutory reserves for level premium term products. According to Moody's, the downgrades are based on both the projected losses in Ballantyne Re and Orkney Re II's investment portfolios--particularly investments in subprime and Alt-A residential mortgage-backed securities -- that support the repayment of the notes, as well as the impact of unrealized investment losses on the probability of the notes defaulting. The losses on the RMBS securities include both realized credit impairments as well as substantial unrealized mark-to-market losses, although none of the securities in the Ballantyne Re or Orkney Re II portfolios have experienced a payment default to date. The performance of the underlying level premium term business supporting both of the reserve funding structures is consistent with Moody's original expectations, and is not directly affected by movements in the investment portfolio. According to Scott Robinson, Vice President & Senior Credit Officer, "the quarterly requirement for Ballantyne Re and Orkney Re II to true up the market value of the assets held in the reserve credit trust to the level of the statutory reserves, combined with the investment losses on the RMBS securities, have significantly eroded unencumbered surplus in the two vehicles." Robinson added that "absent a recovery of unrealized losses or changes to the structures in their current form, it is likely that transactional restrictions would prevent the payment of interest on the notes -- essentially based on a measure of unencumbered capital to required capital --in the near-term." Moody's emphasized that despite the possibility of an interruption of interest payments, primarily driven by a decline in the market value of investments in the special purpose reinsurers, the ultimate loss on the notes will be driven both by the performance of the underlying term life business and the performance of the invested assets. Moody's expect that Ballantyne Re will experience higher relative investment-related losses than Orkney Re II, given the different composition of the investment portfolios within the two structures, which helps to explain the lower rating on the subordinated notes of Ballantyne Re. Moody's added that for Orkney Re II, the credit profile has also been negatively impacted by the triggering of contractual provisions increasing fees paid to financial guarantors. According to Robinson, "the fees that are paid by Orkney Re II to insure certain classes of their notes have increased as a result of downgrades of Scottish Re (U.S.) since the deals were originally rated. This places greater pressure on the deal, especially if it is assumed that the increased fees are paid over a long period of time." In the Ballantyne Re transaction, the increased payments to the financial guarantors are subordinate to both Class A and B notes. As a result of this feature, increased fees paid to the guarantors have no impact on the ratings of Ballantyne Re. Most of the notes issued by these two special purpose reinsurers to fund the collateral requirements for the statutory reserves are insured by financial guarantors, while some of the notes were issued without financial guaranty insurance. The ratings of the uninsured notes consider the results of stochastic modeling of insurance and investment cash flows from the level premium term business supporting the transaction, including the modeled expected losses to the note holders. The review for downgrade will focus on the potential for additional investment losses in the RMBS portfolio and the nature and likely effectiveness of any actions that may be pursued by Ballantyne Re, Orkney Re II, and/or Scottish Re to mitigate the impact of losses on the ability of the special purpose reinsurer to pay interest on the notes. These rated notes are not affected by the rating action: Ballantyne Re: * $500 million of Class A-2, Series A Floating Rate Notes, insured by Ambac Assurance UK Ltd. -- Current Rating: Aaa, negative outlook * $500 million of Class A-2, Series B Floating Rate Notes, insured by Assured Guaranty (UK) Ltd. -- Current Rating: Aaa, stable outlook * $400 million of Class A-3 Floating Rate Notes, insured by Ambac Assurance UK Ltd. -- Current Rating: Aaa, negative outlook Orkney Re II: * $382.5 million of Class A-1 Floating Rate Notes, insured by Assured Guaranty (UK) Ltd. -- Current Rating: Aaa, stable outlook The rating action concludes a review for downgrade on Orkney Re II's uninsured debt that was initiated on Sept. 7, 2006. On Feb. 1, 2008, Moody's downgraded the uninsured notes of Ballantyne Re. Ballantyne Re plc and Orkney Re II plc are public limited companies established in Ireland as special purpose vehicles. Scottish Re is a Cayman Islands company with principal executive offices located in Bermuda. On Sept. 30, 2007, Scottish Re reported total assets of $13.4 billion and shareholder's equity of $869 million. BEAR STEARNS: S&P Puts Ratings on Developing Watch After JPMC Deal ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BBB' long- and 'A- 3' short-term counterparty credit ratings on The Bear Stearns Cos. Inc. on CreditWatch with developing implications. The ratings had been placed on CreditWatch with negative implications on March 14, 2008. At the same time, Standard & Poor's affirmed its 'AA-' long- and 'A-1+' short-term counterparty credit ratings on JPMorgan Chase & Co. The outlook is stable. "The rating actions follow the recent announcement that JPMC has agreed to acquire Bear in an all-stock transaction. The transaction remains subject to shareholder approval," said Standard & Poor's credit analyst Diane Hinton. JPMC's acquisition of Bear comes after the banking group agreed, on March 14, to provide the securities firm with a 28-day secured loan facility that would permit Bear to continue to meet its short-term obligations until a more permanent financing structure could be implemented. On the back of market rumors regarding Bear's liquidity that led to significant cash outflows, the firm's liquidity position had substantially deteriorated by the end of last week, resulting in the need to seek emergency aid to stay afloat. "We consider the acquisition of Bear by JPMC as positive, as it will permit Bear to meet its obligations through funding sources obtained directly from its new parent," said Ms. Hinton. As part of the transaction, JPMC will benefit from nonrecourse financing from the Federal Reserve of up to $30 billion to support Bear's less liquid assets, in addition to the financing that the Federal Reserve provides through its discount window. We also expect that JPMC will assume all of Bear's obligations when the transaction closes, which is expected within 90 days. We will resolve the CreditWatch placement as and when details with regard to the integration of Bear's activities become tangible. In the event the acquisition by JPMC does not close as expected, the ratings on Bear will come under renewed pressure. Conversely, if the acquisition proceeds as expected and Bear's businesses are successfully integrated into JPMC, the ratings on Bear could be equalized with those on its new parent. "The ratings on JPMC reflect our expectation that the bank's post-acquisition capital and leverage metrics will remain satisfactory. JPMC is acquiring some valuable businesses, such as Bear's prime brokerage and clearing operations, which we do not expect will add much risk to its balance sheet," said Standard & Poor's credit analyst Tanya Azarchs. S&P assumes that the integration of these businesses will be smooth, given JPMC's great familiarity with these activities, and S&P's expectation that the bank will have free rein to act quickly in assuming management oversight. In the longer term, S&P expects that JPMC will benefit from the incremental income that the acquisition of Bear's activities will provide. BEAR STEARNS: Rising Risk Profile Prompts Fitch to Chip Ratings --------------------------------------------------------------- Fitch Ratings has downgraded the long- and short-term Issuer Default Rating and outstanding credit ratings of The Bear Stearns Companies Inc. and subsidiaries as: -- Long-term IDR to 'BBB' from 'A+'; -- Short-term IDR to 'F3' from 'F1'. Total long-term debt of $68.7 billion was outstanding as of Nov. 30, 2007. Short-term unsecured debt was $21.2 billion. Fitch has also placed Bear Stearns on Rating Watch Negative. A complete list of ratings is at the end of this release. The rating actions are taken in consideration of Bear Stearns' rising risk profile that has impeded its access to traditional funding sources. The company announced an agreement with JPMorgan Chase for a secured loan agreement in which the Federal Reserve will provide non-recourse, back-to-back financing to JPMC. Fitch's Support Rating was also revised to '3' from '5' related to this action. Up until now, Fitch believed Bear Stearns had managed its balance sheet well through the ongoing credit stressed environment. Bear Stearns suffered recent liquidity deterioration as credit risk re-pricing and declining business opportunities in the overall market continued. As a consequence, there has been a rapid decline in credit investor appetites which has dramatically impaired Bear Stearns' financial flexibility. Fitch believes financial performance in 2008 will be particularly challenged given Bear Stearns' scale of fixed income business and more limited international scope. Restoration of sustained earnings growth will be hampered by limited opportunities in key business lines. Future rating actions will be dictated by several factors, including: long-term funding plans, interim earnings declines, severe negative valuation adjustments, more diminished liquidity, rising leverage or tangible equity erosion. Fitch has downgraded these ratings and placed them on Rating Watch Negative: The Bear Stearns Companies Inc -- Long-term IDR to 'BBB' from 'A+'; -- Senior debt to 'BBB' from 'A+'; -- Short-term IDR to 'F3' from 'F1'; -- Short-term debt to 'F3' from 'F1'; -- Subordinated to 'BBB-' from 'A'; -- Preferred to 'BB+' from 'A'; -- Individual to 'C/D' from 'B/C'; -- Support to '3' from '5'; -- Support Floor 'BB-'. Bear Stearns Securities Corp. -- Long-term IDR to 'BBB' from 'A+'; -- Short-term IDR to 'F3' from 'F1'. Custodial Trust Company -- Long-term deposits to 'BBB+' from 'AA-'; -- Long-term IDR to 'BBB' from 'A+'; -- Senior debt to 'BBB' from 'A+'; -- Short-term deposits to 'F2' from 'F1+'; -- Short-term IDR to 'F3' from 'F1' -- Individual to 'C' from 'B/C'; -- Support to '2' from '1'. Bear Stearns Capital Trust III -- Trust preferred to 'BB+' from 'A'. BEAR STEARNS: Deteriorating Liquidity Cues Moody's to Cut Ratings ----------------------------------------------------------------- Moody's Investors Service downgraded the long-term ratings of The Bear Stearns Companies Inc. to Baa1 from A2 and its short-term ratings to Prime-2 from Prime-1. The ratings continue to be on review for a possible downgrade. The rating action was in response to the rapidly deteriorating liquidity position of Bear, which necessitated an emergency secured funding line from JPMorgan Chase back-stopped by the Federal Reserve Bank of New York. The 28-day funding facility represents a temporary liquidity respite for Bear as it looks to identify a long-term resolution to its liquidity problems. Bear's liquidity situation deteriorated precipitously over the last two days, severely constraining the company's financial and operating flexibility. Moody's said Bear did not face any sizeable net write-downs or credit losses, and its franchise was intact. Nevertheless, the liquidity crisis is the result of diminishing confidence in Bear by its counter-parties and customers, compounded by persistently negative market conditions. The downgrade also incorporates Moody's opinion that Bear's customer franchise has been hurt by this crisis, and it will continue to erode if a long-term stabilizing solution is not quickly achieved. The ratings review will focus on the financial and strategic alternatives under consideration by Bear and the likelihood for a timely resolution. Given the fluidity of the situation, Moody's will re-address its ratings within 7-10 days. If Bear is unable to restore counter- party confidence to stabilize its liquidity and customer franchise, the ratings could be downgraded further; most likely within the Baa range. However, Moody's recognizes that Bear has a number of attractive franchises that could facilitate a strategic solution. Should a transaction occur that alleviates these pressures, it is likely that Bear's ratings would move higher. The Bear Stearns Companies Inc. is an international investment bank and financial services firm headquartered in New York, New York that had 14,153 employees and reported $80.3 billion in total long-term capital at Nov. 30, 2007. Bear generated net revenues of $5.9 billion for 2007. These entities were downgraded and left on review for possible further downgrade: Issuer: Bear Stearns Bank plc -- Senior Unsecured Deposit Program, Downgraded to Baa1 from A2 -- Senior Unsecured Commercial Paper, Downgraded to P-2 from P-1 -- Senior Unsecured Medium-Term Note Program, Downgraded to Baa1 from A2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Baa1 from A2 Issuer: Bear Stearns Capital Trust I -- Preferred Stock Preferred Stock, Downgraded to Baa2 from A3 Issuer: Bear Stearns Capital Trust III -- Preferred Stock Preferred Stock, Downgraded to Baa2 from A3 Issuer: Bear Stearns Caribbean Asset Holdings, Ltd. -- Senior Unsecured Medium-Term Note Program, Downgraded to Baa1 from A2 Issuer: Bear Stearns Companies Inc. (The) -- Commercial Paper, Downgraded to P-2 from P-1 -- Issuer Rating, Downgraded to Baa1 from A2 -- Junior Subordinated Shelf, Downgraded to (P)Baa2 from (P)A3 -- Multiple Seniority Shelf, Downgraded to a range of (P)Ba1 to (P)Baa1 from a range of (P)Baa1 to (P)A2 -- Preferred Stock Preferred Stock, Downgraded to Ba1 from Baa1 -- Subordinate Regular Bond/Debenture, Downgraded to Baa2 from A3 -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to a range of (P)Baa1 to Baa1 from a range of (P)A2 to A2 -- Senior Unsecured Medium-Term Note Program, Downgraded to Baa1 from A2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to a range of (P)Baa1 to Baa1 from a range of (P)A2 to A2 -- Senior Unsecured Shelf, Downgraded to (P)Baa1 from (P)A2 Issuer: Bear Stearns Global Asset Holdings, Ltd. -- Senior Unsecured Conv./Exch. Bond/Debenture, Downgraded to a range of (P)Baa1 to Baa1 from a range of (P)A2 to A2 -- Senior Unsecured Medium-Term Note Program, Downgraded to Baa1 from A2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to a range of (P)Baa1 to Baa1 from a range of (P)A2 to A2 Issuer: Bear, Stearns Securities Corporation -- Issuer Rating, Downgraded to A3 from A1 -- Senior Unsecured Short-Term Rating, Downgraded to P-2 from P-1 Issuer: Bear Stearns Capital Trust III -- Preferred Stock Shelf, Downgraded to (P)Baa2 from (P)A3 Issuer: Bear Stearns Capital Trust IV -- Preferred Stock Shelf, Downgraded to (P)Baa2 from (P)A3 Issuer: Bear Stearns Capital Trust V -- Preferred Stock Shelf, Downgradedto (P)Baa2 from (P)A3 Issuer: Bear Stearns Finance LLC -- Preferred Stock Preferred Stock, Downgraded to Ba1 from Baa1 -- Preferred Stock Shelf, Downgraded to (P)Ba1 from (P)Baa1 Issuer: Bear Stearns Bank plc -- Senior Unsecured Deposit Program, Downgraded to P-2 from P-1 Issuer: Bear Stearns Caribbean Asset Holdings, Ltd. -- Senior Unsecured Medium-Term Note Program, Downgraded to P-2 from P-1 Issuer: Bear Stearns Global Asset Holdings, Ltd. -- Senior Unsecured Medium-Term Note Program, Downgraded to P-2 from P-1 Outlook Actions: Issuer: Bear Stearns Bank plc -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear Stearns Capital Trust I -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear Stearns Capital Trust III -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear Stearns Capital Trust IV -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear Stearns Capital Trust V -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear Stearns Companies Inc. (The) -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear Stearns Finance LLC -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear Stearns Global Asset Holdings, Ltd. -- Outlook, Changed To Rating Under Review From Stable Issuer: Bear, Stearns Securities Corporation -- Outlook, Changed To Rating Under Review From Stable BKF CAPITAL: Holtz Rubenstein Expresses Going Concern Doubt ----------------------------------------------------------- Holtz Rubenstein Reminick LLP in New York raised substantial doubt about the ability of BKF Capital Group Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm stated that the company experienced a total loss of assets under management and as a result the company has had a significant decline in revenues in 2007 and no longer has an operating business. The company continues to evaluate strategic alternatives: either commence a new business or liquidate. Historically, the company has funded its cash and liquidity needs through cash generated from operations; however, in light of the above, the company expects that cash generated from current operations will not be sufficient to fund operations and that the company will use its existing working capital to fund operations. The company posted a net loss of $5,674,000 on total revenues of $3,601,000 for the year ended Dec. 31, 2007, as compared with a net loss of $47,016,000 on total revenues of $24,518,000 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $27,362,000 in total assets, $6,566,000in total liabilities, and $20,796,000 in stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2938 About BKF Capital New York City-based BKF Capital Group Inc. (OTHER OTC: BKFG.PK) -- http://www.bakerfentress.com-- does not have significant operations. Previously, the company was engaged in the provision of investment advisory and asset management services in the United States. It intends to merge with, acquire, or commence a business potentially being funded by a capital raising event. BKF Capital Group was founded in 1907. BLUEGRASS ABS: Moody's Cuts Ratings to C from Ba3 on Two Classes ---------------------------------------------------------------- Moody's Investors Service has downgraded and left these notes issued by Bluegrass ABS CDO II Ltd. on review for possible downgrade: Class description: $248,000,000 Class A-1 Notes Due April 2039 -- Prior Rating: Aaa --Current Rating: Aa2, on review for possible downgrade Class description: $58,000,000 Class A-2 Floating Rate Notes due April 2039 -- Prior Rating: Aaa -- Current Rating: Baa3, on review for possible downgrade Class description: $52,800,000 Class B Floating Rate Notes due April 2039 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade In addition Moody's has downgraded these notes. Class description: $10,000,000 Type II Composite Notes due April 2039 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: C Class description: $15,000,000 Class C-1 Floating Rate Notes due April 2039 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class description: $7,400,000 Class C-2 Floating Rate Notes due April 2039 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. BRIDGE INFORMATION: $12.5MM Payment to Arrow Is Preferential ------------------------------------------------------------ An opinion has been rendered in a proceeding Bridge Information Systems, et. anno v. Merisel Americas, Inc. & MOCA., in favor of Bridge Information Systems Inc., the estate of a former Global Enterprise Computing Solutions customer that declared bankruptcy in 2001. The proceeding is related to sales made by the MOCA division of ECS in 2000 and early 2001. The administrator of the Bridge estate had sought the return of approximately $24.0 million plus interest with respect to allegedly preferential payments made to MOCA, a company Arrow Electronics Inc. purchased from Merisel Americas in the fourth quarter of 2000, shortly before Bridge declared bankruptcy. In the opinion, the Bankruptcy Court found that a total of $12.5 million of the payments received were preferential, and must be returned to Bridge. Arrow intends to continue to defend its position through post- trial motions and an appeal if necessary. This amount will be accrued in the first quarter of 2008 and therefore impact the comparability of the company's results. About Arrow Electronics Headquartered in Melville, New York, Arrow Electronics Inc. -- http://www.arrow.com/-- provides products, services and solutions to industrial and commercial users of electronic components and computer products. Arrow serves as a supply channel partner for nearly 600 suppliers and more than 130,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of over 270 locations in 53 countries and territories. The company operates in France, Spain, Portugal, Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, Norway, Sweden, Italy, Germany, Austria, Switzerland, Belgium, the Netherlands, United Kingdom, Argentina, Brazil, Mexico, Australia, China, Hong Kong, Korea, Philippines and Singapore. About Bridge Information Bridge Information Systems Inc. filed a voluntary petition for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code on Feb. 15, 2001 (Bankr. E.D. Mo. Case Nos. 01-41593 through 01-41614, inclusive). On February 13, 2002, Judge McDonald confirmed a chapter 11 plan of liquidation, which, among other items, transferred ownership of the company's assets to the holders of Bridge's secured creditors. Thomas J. Moloney, Esq., Seth A. Stuhl, Esq., and Kurt A. Mayr, Esq., at Cleary, Gottlieb, Steen & Hamilton in New York served as lead counsel to Bridge in its chapter 11 cases. Gregory D. Willard, Esq., Lloyd A. Palans, Esq., and David M. Unseth, Esq., at Bryan Cave LLP in St. Louis, served as local counsel. BROTMAN MEDICAL: Exclusive Plan Filing Period Extended to May 22 ---------------------------------------------------------------- The Hon. Sheri Bluebond of the United States Bankruptcy Court for the Central District of California extended Brotman Medical Center Inc.'s exclusive periods to: a) file a Chapter 11 plan until May 22, 2008; and b) solicit acceptances of that plan until July 21, 2008. As reported in the Troubled Company Reporter on Feb. 28, 2008, the Debtor said that it is currently evaluating some restructuring alternatives that would provide the greatest recovery for all creditors. The Debtor said that it is seeking additional replacement sources of financing to fund a plan and is in negotiation with several lenders regarding that new financing. Accordingly, the Debtor asked the Court additional time to consider and explore the available opportunities and continue its operational improvements. About Brotman Medical Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., The Debtor selected Kurztman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 16 appointed nine creditors to serve on a Official Committee of Unsecured Creditors in this case. Buchalter Nemer represents the Creditors Committee. When the Debtor filed for protection against its creditors, it listed assets and debts between $1 million and $100 million. BUILDERS FIRSTSOURCE: Poor Financial Cues Moody's to Cut Ratings ---------------------------------------------------------------- Moody's Investors Service lowered Builders FirstSource, Inc.'s corporate family rating to B2 from B1 and the company's second lien floating rate notes to B3 from B2. At the same time, Moody's affirmed the company's speculative grade liquidity rating of SGL-2. The ratings outlook is negative. These ratings and assessments have been affected: -- Corporate family rating, downgraded to B2 from B1; -- Probability of default rating, downgraded to B2 from B1; -- $275 million guaranteed 2nd priority senior secured floating rate notes due 2012, downgraded to B3 (LGD5, 77%) from B2 (LGD4, 66%); Speculative grade liquidity rating, affirmed at SGL-2. The ratings downgrade reflects deterioration in the company's financial and credit profile driven by the severe slowdown in new home construction. Leverage and interest coverage metrics continue to deteriorate sharply from historically comfortable levels. The negative outlook reflects Moody's expectation that homebuilding activity will continue to weaken through 2008 and that this will place additional pressure on the company's operating performance and cash position. The company's 2008 EBITDA could turn negative unless Builders FirstSource is able to aggressively slash costs. The B2 corporate family rating is supported by the company's position as a leading supplier and manufacturer of structural and related building products for residential new construction in the US, and its good liquidity position, as reflected in its SGL-2 rating. The rating considers the company's geographic and customer diversity. In 2007, the company's top 10 customers, which include many of the nation's largest homebuilders, accounted for approximately 22% of sales. The company's SGL-2 liquidity rating benefits from its new $350 million borrowing base based revolving credit agreement that it entered in December 2007. At Dec. 31, 2007, the company had $119 million available to borrow and had no outstanding borrowings. Borrowing capacity is partially utilized by $17 million of outstanding letters of credit and by borrowing base restrictions. Cash on hand at Dec. 31, 2007 was $97.6 million. In terms of covenant compliance, Builders FirstSource has only one affirmative covenant, the springing fixed charge coverage ratio of 1 times. The covenant is not triggered unless the company's liquidity, defined as cash plus borrowing availability, were to drop below $35 million for three consecutive business days. It is expected to remain comfortably above this level. Builders FirstSource, Inc., headquartered in Dallas, Texas, is engaged in the supply and manufacture of structural and related building products to homebuilders for residential new construction in the United States. Its products include prefabricated components, windows and exterior doors, lumber and lumber sheet goods, millwork products, and other building products and services. Builders FirstSource, Inc. was founded as BSL Holdings, Inc. in 1998 by former CEO John Roach and private equity firm JLL Partners. The company went public in June, 2005. Revenues for 2007 were $1.6 billion. BUILDING MATERIALS: Fitch Cuts Ratings and Removes Negative Watch ----------------------------------------------------------------- Fitch Ratings has downgraded and removed from Rating Watch Negative Building Materials Holding Corporation as: -- Issuer Default Rating to 'B' from 'B+'; -- Senior secured debt to 'B+/RR3' from 'BB-/RR3'. The Rating Outlook is Negative. Fitch's '3' Recovery Rating on BMHC's secured term loan and revolving credit facility indicate good (50%-70%) recovery prospects for holders of these debt issues. Fitch applied a liquidation analysis for these RRs. The downgrade on the senior secured debt applies to BMHC's $550 million senior secured credit facilities, including the company's $200 million secured revolving credit facility. The ratings had been placed on Rating Watch Negative on Feb. 6, 2008 following the company's announcement that it was in discussions with its lenders regarding a permanent amendment to its existing syndicated credit facility. BMHC had received a temporary waiver of certain conditions relating to borrowing under its revolving credit facility, which allowed the company to borrow up to $75 million through Feb. 29, 2008. On Feb. 29, 2008, BMHC completed the amendment to its bank credit facilities. The revolving credit facility was reduced from $500 million to $200 million and the maturity of its term loan was shortened by two years to coincide with the revolver maturity. The company had no borrowings under the revolver and had $88 million of availability as of Feb. 29, 2008. The downgrades reflect the difficult U.S. housing environment, current and expected negative trends in BMHC's operating results and meaningful deterioration in credit metrics. The covenants under the amended facility were loosened to reflect the difficult operating environment. However, Fitch is sensitive to the potential of the company violating financial covenants under its amended bank credit facilities. The possibility of the housing downturn continuing longer and becoming deeper than currently anticipated could increase the risk of covenant violations and have ratings implications. The company's financial results have been adversely affected by the meaningful downturn in the homebuilding market, especially as the large public builders sharply reduced production of new homes to balance supply with demand. BMHC's revenues fell 28.7% in 2007 while gross margins for the year declined 200 basis points to 19.4% compared to 21.4% in 2006. Fitch is encouraged that the margins have not declined more, given the very challenging environment and the large public builders aggressively negotiating lower prices with their labor and materials suppliers. In response to the housing downturn, BMHC is reducing capital expenditures and is deferring discretionary capital spending, limiting its acquisition activities and reducing SG&A expenses by consolidating business infrastructure and optimizing its staffing levels. Fitch expects that BMHC's margins and credit metrics will continue to be under pressure as the housing environment remains difficult and is unlikely to meaningfully turn around in the current year. In 2008, Fitch projects that total and single family starts will decline 22.1% and 24.8%, respectively. Founded in 1987, BMHC is one of the largest residential construction services and building materials companies in the United States. BMHC competes in the homebuilding industry through two business segments: BMC West and SelectBuild Construction (formerly BMC Construction). With locations in the western and southern United States, BMC West distributes building products and manufactures building components for professional builders and contractors. SelectBuild Construction provides construction services to high-volume production homebuilders through operations in key growth markets across the United States. C2 GLOBAL: Deloitte & Touche Expresses Going Concern Doubt ---------------------------------------------------------- Deloitte & Touche LLP raised substantial doubt about the ability of C2 Global Technologies Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring losses from operations and net stockholders' capital deficiency. The company posted a net loss of $645,000 on $0.00 revenue for the year ended Dec. 31, 2007, as compared with a net loss of $7,676,000 on $0.00 revenue in the prior year. At Dec. 31, 2007, the company's balance sheet showed $1,796,000 in total assets and $2,737,000 in total liabilities, resulting in $941,000 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $1,084,000 in total current assets available to pay $2,737,000 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?292e About C2 Global Headquartered in Toronto, Ontario, C2 Global Technologies, Inc., (OTC BB: COBT.OB) -- http://www.c-2technologies.com/-- was incorporated in the State of Florida in 1983 under the name "MedCross Inc." which was changed to "I-Link Incorporated" in 1997 and to "Acceris Communications Inc." in 2003. In August 2005, the company changed its name from to "C2 Global Technologies Inc." C2's business is focused on licensing its patents, which include two foundational patents in VoIP technology. C2 plans to realize value from its intellectual property by offering licenses to service providers, equipment companies and end-users that are deploying VoIP networks for phone-to-phone communications. CAMBER 6: Moody's Slashes Ratings to C on Five Note Classes ----------------------------------------------------------- Moody's Investors Service has downgraded ratings of seven classes of notes issued by Camber 6 plc, and left on review for possible further rating action ratings of two of these classes of notes. The notes affected by the rating action are: Class Description: up to $487,400,000 Class A-1 Variable Funding Floating Rate Notes Due 2043 -- Prior Rating: Aaa -- Current Rating: B3, uncertain Class Description: up to $487,400,000 Class A-2 Senior Floating Rate Notes Due 2043 -- Prior Rating: Aaa -- Current Rating: B3, uncertain Class Description: $75,100,000 Class B Senior Floating Rate Notes Due 2043 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: C Class Description: $105,000,000 Class C Senior Floating Rate Notes Due 2043 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: C Class Description: $18,000,000 Class D Floating Rate Deferrable Notes Due 2043 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: C Class Description: $30,000,000 Class E Floating Rate Deferrable Notes Due 2043 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C Class Description: $7,500,000 Class F Floating Rate Deferrable Notes Due 2043 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Trustee on March 3, 2008, of an event of default caused by the Class A/B Par Value Coverage Ratio falling below 100%, as described in Section 5.1(d) of the Indenture dated June 28, 2006. This event of default is still continuing. Camber 6 plc is a collateralized debt obligation backed primarily by a portfolio of RMBS securities, CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard the Trustee reports that a majority of the controlling class has directed the Trustee to declare the principal of and accrued and unpaid interest on all of the Notes to be immediately due and payable and to terminate the Reinvestment Period. Furthermore, according to the Trustee, direction has been given to dispose of all the Collateral in accordance with relevant provisions of the transaction documents. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and outcome of the liquidation. Because of this uncertainty, the ratings assigned to the Class A-1 Notes and A-2 Notes remain on review for possible further action. CANADIAN TRUSTS: Court Okays Application for Creditor Arrangement ----------------------------------------------------------------- Justice Colin Campbell of the Ontario Superior Court of Justice granted an application by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act establishing a procedure for noteholder approval of the restructuring plan filed by the Committee. The Committee asked the Court on Monday to call a meeting of ABCP noteholders to vote on the Committee's Plan to restructure 20 of the trusts covered by last summer's Montreal Accord, affecting $32 billion of notes. The Court's approval of the application, provides that the Plan be approved by noteholders at a meeting that is expected for late April. If noteholders vote in favor of the Plan, a further hearing will be held before the Court to secure its final sanction of the Plan. "We are delighted that Justice Campbell has approved the initiation of this process," Purdy Crawford, chair of the Committee, said. "The Investors Committee believes that the CCAA process going forward will provide a forum that ensures fairness and provides the greatest certainty that the plan will be implemented in a timely manner." The Committee has filed a copy of the Plan, related Information Statement and other documents with the Court and these documents will be available, one finalized, on Ernst & Young Inc.'s public website for the ABCP restructuring: http://www.ey.com/ca/commercialpaper/ The documents will also be mailed to noteholders in the next few days. Investors will receive full information on the restructuring, including a copy of the Plan and the Information Statement containing details on the meeting and voting process. The Committee will also disclose dates of informational sessions to be held for noteholders across Canada. The decision to file under CCAA follows a review of alternatives by the Committee, well as its financial advisor, JPMorgan, and its legal advisor, Goodmans LLP, to determine the effective means to achieve a comprehensive restructuring in a timely fashion and ensure that all noteholders have an opportunity to consider the Plan. "The Committee has reached an understanding on the principal issues with all major participants in the Third-Party ABCP market on how to address the problems that are currently plaguing this market," Purdy Crawford, chair of the Committee, said. "The CCAA process provides a Court-supervised means of advancing the Committee's plan for this comprehensive and simultaneous restructuring of all affected ABCP, giving noteholders an equal opportunity to vote on the Plan under a Court-approved process." The Committee has asked the Court for permission to call a noteholder meeting to approve the Plan. Assuming the Court approves this request, investors will receive full information on the restructuring, including a copy of the Plan and the Information Statement containing details on the meeting and voting process. Mr. Crawford and other representatives of the Investors Committee will hold investor meetings with noteholders in various major cities after these materials have been distributed. Under CCAA provisions, the Plan must be approved by a majority of noteholders, regardless of the size of their holdings, that vote at the meeting, well as by noteholders representing not less than 66-2/3% of the total aggregate principal amount of affected ABCP that vote at the meeting. If the Plan is approved by the noteholders at the meeting, a further hearing will be held before the Court for its final sanction of the Plan. "Details of the restructuring plan have now been substantially completed," Mr. Crawford explained. "The Committee is unanimously supporting the Plan, and I am recommending that all noteholders approve the Plan in order to avoid a forced liquidation of conduits and the significant losses that would likely ensue if the Plan were not to move forward." Group of Banks to Participate in Restructuring Under the restructuring plan disclosed in December, noteholders would benefit from an improvement in the potential for value recovery over time, a lower risk of margin calls, investment grade credit ratings for the vast majority of the new notes, and improved transparency with regard to the underlying assets. Underlying assets in affected ABCP backed by synthetic and hybrid assets will be cross-collateralized into one of two "Master Asset Vehicles" or "MAVs". Certain large noteholders that have agreed to "self insure" by contributing approximately $8.5 billion to fund any additional margin calls associated with the pooled assets supporting their pooled notes, will participate in "MAV1". Noteholders that satisfy eligibility requirements will also have the option to participate in MAV 1. All other noteholders will participate in "MAV 2", for which a third-party margin funding facility will be established. The Committee confirmed that it has received an understanding from a group of Canadian banks on the terms of their participation in a larger syndicate for the MAV 1 and MAV 2 required margin call facility. Binding and non-binding understandings have now been reached for more than 98.5% of the required margin funding facility, and the Committee is confident it will reach firm commitments and has the means available to satisfy any remaining shortfall. Motion to Appoint Ernst & Young Inc. as Monitor The Committee has asked the Court to appoint Ernst & Young Inc. as Monitor in the restructuring process. Their role would include administering the voter identification and proxy processes, assisting with the noteholder meeting, tabulating the results of the vote and reporting to the Court. Broadridge Financial Solutions has also been retained to assist in the process by helping to identify and send materials to noteholders. The restructuring plan has been approved by the Committee and is supported by certain dealer bank asset providers, a number of which will also be participating as MAV 2 lenders, and the ABCP sponsors. The implementation of the restructuring is subject to a number of conditions, including execution of definitive legal documentation, completion of due diligence, receipt of internal approvals by dealer bank asset providers and participating Schedule I banks, receipt of the requisite approvals of holders of ABCP and final sanction by the Court. A variety of consents and other approvals will be necessary or desirable in connection with the restructuring, including certain governmental and regulatory approvals. As reported by the Troubled Company Reporter yesterday, the commercial paper was frozen in August when the Committee agreed to a standstill agreement to restructure the market hit by the U.S. subprime mortgage crisis. The committee, led by the Caisse de depot et placement du Quebec, had planned to convert the short-term paper into longer-term debt. However, the group missed self-imposed deadlines and failed to present a final plan to investors holding the commercial papers on March 14, hours before midnight when the standstill agreement was to expire. Protection under the Companies' Creditors Arrangement Act will retain the standstill agreements and keep the market frozen. It will "provide note holders an opportunity to consider fully the committee's proposal in an informed way," said Mr. Crawford. Five Canadian Banks Back Funding Facility The Committee announced in February that the Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Bank of Nova Scotia have each agreed in principle, subject to the satisfaction of certain conditions, to join National Bank of Canada, certain members of the Investors Committee and certain dealer bank asset providers, and participate as lenders in the margin call funding facility. CANARGO ENERGY: L J Soldinger Expresses Going Concern Doubt ----------------------------------------------------------- L J Soldinger Associates LLC raised substantial doubt about the ability of CanArgo Energy Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed reported that the company has incurred net losses since inception and does not have sufficient funds to execute its business plan or fund operations through the end of 2008. Management estimates its current cash will last through to the third quarter 2008. In addition, the company is restricted from incurring additional debt obligations unless it receives permission from its current lenders. The company incurred net losses from continuing operations to common stockholders of approximately $65,315,000 $54,432,000 and $12,522,000 for the years ended Dec. 31, 2007, 2006, and 2005, respectively. These net losses included non-cash charges related to depreciation and depletion, impairments, loan interest, amortization of debt discount, extinguishment of debt and stock- based compensation of approximately $61,936,000, $48,213,000 and $7,175,000 for the years ended Dec. 31, 2007, 2006, and 2005, respectively. CanArgo Energy posted a net loss of $53,777,214 on total sales of $7,208,666 for the year ended Dec. 13, 2007, as compared with a net loss of $60,540,851 on total sales of $6,526,660 in the prior year. In the years ended Dec. 31, 2007 and 2006, the company's revenues from its Georgian operations did not cover the costs of its operations. At Dec. 31, 2007, the company had unrestricted cash and cash equivalents available for general corporate use or for use in the Georgian operations of about $6,869,000. In 2007, the company experienced a net cash outflow from operations of about $1,800,000 in Georgia. In addition, the company has a planned capital expenditure budget in 2008 of about $12,000,000 in Georgia. The exploration and development wells currently undergoing or waiting to undergo production testing in Georgia currently do not produce enough commercially available quantities of oil and or gas and the company will not have sufficient working capital and may have to delay or suspend its capital expenditure plans and possibly make cutbacks in its operations. At Dec. 31, 2007, the company's balance sheet showed $59,552,077 in total assets, $19,423,727 in total liabilities, and $38,008,820 in stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $8,172,654 in total current assets available to pay $7,457,998 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2937 About CanArgo Energy CanArgo Energy Corporation (AMEX: CNR) -- http://www.canargo.com -- acquires, explores, develops, produces, and markets crude oil and natural gas primarily in Georgia and the Republic of Kazakhstan. The company's properties include the Ninotsminda Field covering approximately 3,276 acres located approximately 25 miles north east of the Georgian capital, Tbilisi; and the Kyzyloi Gas Field covering an area of approximately 70,919 gross acres and Akkulka block in Kazakhstan. As of Dec. 31, 2006, it had proved developed and undeveloped gross reserves of 3.379 million barrels of oil and 2.808 billion cubic feet of gas. The company was founded in 1971 and is headquartered in St. Peter Port, British Isles. CARLYLE CAPITAL: Proceeds with Liquidation of Remaining Assets -------------------------------------------------------------- Carlyle Capital Corporation Limited will now move forward with its winding up and liquidation application. During a compulsory winding up, all remaining CCC assets will be liquidated by a court appointed liquidator in a timely and orderly manner. The company's board of directors had recommended that Class A shareholders vote in favor of a compulsory winding up proceeding under the Companies Law in Guernsey. The shareholder approval process was completed on March 16, 2008, with Class A shareholders voting unanimously in favor of a compulsory winding up proceeding under the Companies Law in Guernsey. As expected, the company received default notices from its remaining two lenders and it believes that its lenders have now taken possession of substantially all of its U.S. government agency AAA-rated residential mortgage-backed securities (RMBS). As a result, the company believes its liabilities exceed its assets. The recommendation was made by the board following extensive analysis of the company's prospects and careful consideration of other options for continuing the business. The company will work with the court appointed liquidator to ensure an orderly realization of assets and their subsequent distribution. The company will provide updates as appropriate at its Web site at http://www.carlylecapitalcorp.com/ Unable To Reach Agreement With Lenders On March 12, 2008, Carlyle Capital said that although it has been working diligently with its lenders, the company has not been able to reach a mutually beneficial agreement to stabilize its financing. The company expects that its lenders will promptly take possession of substantially all of the company's remaining assets. The only assets held in the company's portfolio as of March 16, 2008, are U.S. government agency AAA-rated residential mortgage- backed securities (RMBS). The company received margin calls in excess of $400 million and as the company was unable to pay these margin calls, its lenders proceeded to foreclose on the RMBS collateral. In total, through March 12, the company has defaulted on approximately $16.6 billion of its indebtedness. The remaining indebtedness is expected soon to go into default. The company explored a variety of proposals with its lenders in an attempt to refinance its portfolio on sustainable terms. The Carlyle Group participated actively in those negotiations and was prepared to provide substantial additional capital if a successful refinancing could be achieved. Negotiations deteriorated late on March 12 when, among other things, the pricing service utilized by certain lenders reported a drop in the value of the RMBS collateral that is expected to result in additional margin calls of approximately $97.5 million. Overall, it has become apparent to the company that the basis on which lenders are willing to provide financing against the company's collateral has changed so substantially that a successful refinancing is not possible. As reported in the Troubled Company Reporter on March 13, 2008, Deutsche Bank AG and J.P. Morgan Chase & Co. rejected Carlyle Capital's plea to enter into a standstill agreement with lenders to prevent liquidation of the hedge fund's $16 billion in securities. The TCR stated on March 14, 2008, that Carlyle Capital's lenders intend to seize the hedge fund's assets after deals calling for standstill agreements with lenders fell through. The funds co-founder David Rubenstein was "surprised" that the deals failed. "If Carlyle's lenders want their money right away, they'll liquidate the fund... [T]hat will put pressure on already stressed credit markets," London analyst Hank Calenti commented. Debt that will remain at Carlyle will "soon" default. About Carlyle Capital Carlyle Capital Corporation Limited (Euronext Amsterdam: CCC; ISIN: GG00B1VYV826) -- http://www.carlylecapitalcorp.com/-- is a Guernsey investment company that was formed on Aug. 29, 2006. It is a closed-end investment fund domiciled and registered as a limited company under the laws of Guernsey, Channel Islands. The company invests in a diversified portfolio of fixed income assets including high-grade mortgages and credit products. The company's day-to-day activities and investment portfolio are managed by Carlyle Investment Management LLC, whose investment professionals have extensive experience in the areas of mortgage finance, leveraged finance, capital markets transaction structuring and risk/portfolio management. CIM manages the company pursuant to a management agreement. CIM is a registered investment adviser under the U.S. Investment Advisers Act of 1940 and is an affiliate of The Carlyle Group. CCI OF WEST PALM: Gets $15 Mil. Offer, Defers Auction to April 14 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida deferred the auction of 19 T.G.I. Friday's restaurants located in Florida and New York to April 14, 2008, to give way to a newly signed contract between franchisee CCI of West Palm Beach Inc. and a buyer offering $15 million for the restaurants, Bill Rochelle of Bloomberg News reports. The auction was originally scheduled for Feb. 26, 2008. CCI if accepting other bids until April 8. A sale approval hearing will be on April 16. Based in West Palm Beach, Florida, CCI of West Palm, Inc. is a T.G.I Friday's franchisee. The company and its debtor-affiliates filed for Chapter 11 protection on Aug. 19, 2007 (Bank. S.D. Fla. Case No. 07-16604). CHARLES MITCHELL: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Charles Edward Mitchell 3636 East Indigo Circle Mesa, AZ 85205 Bankruptcy Case No.: 08-0255 Chapter 11 Petition Date: March 13, 2008 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Paul Sala, Esq. (psala@asbazlaw.com) Thomas H. Allen, Esq. (tallen@asbazlaw.com) Allen, Sala & Bayne, PLC Viad Corporate Center 1850 North Central Avenue, Suite 1150 Phoenix, AZ 85004 Tel: (602) 256-6000 http://www.asbazlaw.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Douglas R. Fielding judgment $230,569 Attention: Wright & Associates 1201 South Alma School Rod, Suite 3500 Mesa, AZ 85210 Charles & Lena Mitchell personal loans $198,816 3636 East Indigo Circle Mesa, AZ 85205 Daniel Barrios judgment $109,390 Attn: Brent H. bryson, Esq. 1819 East Southern Avenue Mesa, AZ 85204 USAA Federal Savings Bank credit line $24,941 10750 McDermott Fwy San Antonio, TX 78288-0509 GECCCC Solar heater; value $6,250 P.O. Box 960061 of security: $6,000 Orlando, FL 32896-0061 CHENIERE ENERGY: S&P Holds 'B' Rating with Stable Outlook --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' ratings on liquefied natural gas project developer Cheniere Energy Inc. following its annual review. The outlook is stable. The company had approximately $2.76 billion of total debt outstanding as of December 2007. The 'B' corporate credit rating reflects Cheniere's vulnerable business risk profile and highly leveraged financial risk profile. The business profile score reflects Cheniere's status as a start- up LNG project developer with substantial execution and financing risks. Moreover, while Cheniere is a leader in the development of LNG re-gasification terminals in the U.S. and its business strategy is currently focused on the development of its three wholly-owned proposed terminals, the business profile also reflects management's opportunistic pursuit of other business lines that include other parts of the LNG value chain. These endeavors include LNG marketing and pipeline projects related to the LNG terminals, while the company maintains a minor presence in the natural gas exploration and production business. The stable outlook is based on the company's current unrestricted cash balance, which is adequate to meet current interest payments. It also assumes that Cheniere will continue to implement its current strategy with potentially strong demand for natural gas and LNG supply, which provides an incentive to not invest in other businesses. Ratings could be lowered if the company's unrestricted cash balance declines from current levels quicker than expected, if incremental debt is issued, or if additional shares of its common stock are repurchased with cash on hand. Upgrade potential is not likely in the near term unless Cheniere markedly improves its business and financial risk and Cheniere Marketing is able to produce significant incremental cash flows for Cheniere to eliminate its parent level debt. CIGNA CORPORATION: Moody's Affirms (P)Ba1 Preferred Stock Rating ---------------------------------------------------------------- Moody's Investors Service has assigned a P-2 rating with a stable outlook to CIGNA Corporations' 4(2) commercial paper program. The new program replaces CIGNA's 3(a)(3) program, which had been in existence since 1982. The P-2 rating on the existing program is being withdrawn. Since the commercial paper program's inception in 1982, the company has had Board of Directors' authority to issue as much as $1.2 billion of commercial paper. However, the company's policy is to only issue commercial paper in an amount that does not exceed its bank back-up lines less the amount allocated for letters of credit. As of Dec. 31, 2007, CIGNA had a bank line of credit totaling $1.75 billion with $1.25 b