/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080318.mbx 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 billion allocated for letters of credit to support reinsurance arrangements associated with obligations of subsidiaries. Therefore, $500 million is actually available for commercial paper. The size of CIGNA's new commercial paper program is $500 million. The purpose of CIGNA's commercial paper program is to provide liquidity and to facilitate the investment process; however, the program has had very limited use in recent years. Moody's expects that CIGNA will issue commercial paper over the next few months as part of the funding of the pending Great-West acquisition. Moody's last rating action on CIGNA occurred on Nov. 27, 2007, when the rating agency affirmed CIGNA's ratings and positive outlook. These ratings were affirmed with a positive outlook: CIGNA Corporation -- senior unsecured debt rating at Baa2; prospective senior unsecured debt shelf rating at (P)Baa2; prospective subordinated debt shelf rating at (P)Baa3; prospective preferred stock shelf rating at (P)Ba1; * Connecticut General Life Insurance Company -- insurance financial strength rating at A2; * The Life Insurance Company of North America -- insurance financial strength rating at A2. These rating was assigned with a stable outlook: * CIGNA Corporation -- short-term debt rating for commercial paper at Prime-2. CIGNA Corporation, headquartered in Philadelphia, Pennsylvania, provides employee benefits, including health care products and services, and group disability, life and accident insurance throughout the United States. It also provides life, accident, health and expatriate employee benefits insurance coverage in selected international markets, primarily in Asia and Europe. For the full year 2007, the company reported consolidated GAAP revenues of approximately $17.6 billion and shareholders' equity at December 31, 2007 was approximately $4.7 billion. Total medical membership as of December 31, 2007 was approximately 10.2 million medical members. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to repay punctually senior policyholder claims and obligations. CLEBURNE & TM: Investors Ink Tentative Settlement Agreement ----------------------------------------------------------- Business partners Denis Engel and Tom Morris, who are suing each other, have reached a tentative settlement agreement last week, Matt Smith writes for the Cleburne Times Review. Under the settlement, Mr. Engel will continue to own Six Flags mall in Arlington and Sunrise Mall in Corpus Christi while Mr. Morris will own Nolan River Mall, Times Review relates. The settlement is subject to the dismissal of a chapter 11 case filed against Nolan River in Feb. 22, 2008, report says, citing Marvin Sprouse, Esq., representing Mr. Engel. Mr. Morris, the report notes, filed for bankruptcy protection following a lawsuit filed by Mr. Engel asserting mismanagement of Nolan River and other assets. Mr. Engel also requested a third party to take over Nolan River's business, Times Review reveals. Despite the bankruptcy, Nolan River remains open, report adds. The bankruptcy of Cleburn & TM LP, aka Nolan River Mall, was published by the Troubled Company Reporter on Feb. 28, 2008, under its Thursday Column, "Chapter 11 Cases with Assets & Liabilities Below $1,000,000". Contrary to Times Review's report, the TCR stated that Cleburn & TM filed for chapter 11 on Feb. 21, 2008 (Bankr. N.D. Ill. Case No. 08-04130) based on court filings. COMM INTELLIGENCE: GHP Horwath Expresses Going Concern Doubt ------------------------------------------------------------ GHP Horwath PC in Denver, Colorado, raised substantial doubt about the ability of Communication Intelligence 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 to the company's significant recurring operating losses and accumulated deficit. The company posted a net loss of $3,399,000 on total revenues of $2,145,000 for the year ended Dec. 31, 2007, as compared with a net loss of $3,286,000 on total revenues of $2,342,000 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $6,475,000 in total assets, $2,694,000 in total liabilities, and $3,781,000 in stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $1,731,000 in total current assets available to pay $2,598,000 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?293a About Communication Intelligence Communication Intelligence Corporation (OTC BB: CICI.OB) -- http://www.cic.com-- and its joint venture, Communication Intelligence Computer Corporation, engage in the development and marketing of electronic signature solutions and biometric signature verification for business process automation in the financial industry worldwide. The company also supplies natural input/text entry software for handheld computers and smartphones. It supplies its core technologies in two categories, Transaction and Communication Enabling Technologies, and Natural Input Technologies. The company's products include SignatureOne that enables capture of electronic and digital signatures in various application environments; iSign, a suite of application development tools for electronic signatures, biometric signature verification, and cryptography for custom developed applications and Web-based development; Sign-it multi-modal electronic signature software for common applications including Microsoft Word, Adobe Acrobat, AutoDesk AutoCAD, Web-based applications using HTML, XML, and XHTML, and custom applications for .NET, and C#; and Jot multi-lingual handwriting recognition software. It offers its products to enterprises, integration/channel partners, and original equipment manufacturers. Communication Intelligence Corporation was founded in 1981 and is headquartered in Redwood Shores, Calif. CRF-19 LLC: S&P Puts 'BB' Preliminary Rating on $4.5MM Cl. D Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to CRF-19 LLC's $62.07 CRF USA community reinvestment revenue notes series 19. The preliminary ratings are based on information as of March 14, 2008. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit enhancement consisting of overcollateralization, subordination, an interest reserve account, and excess spread. The ratings are also based on Community Reinvestment Fund Inc.'s demonstrated servicing ability. This securitization is a pool of small business development loans that are not insured or guaranteed by any governmental agency. Preliminary Ratings Assigned CRF-19 LLC Class Rating Amount ----- ------ ------ A-1 AAA $15,710,000 A-2 AAA $15,710,000 A-3 AAA $15,710,000 B A $4,970,000 C BBB $3,100,000 D BB $4,500,000 E B $2,370,000 F NR $2,500,000 G NR $3,580,000 *NR -- Not rated. CYGNAL TECHNOLOGIES: Court OKs CCAA Joint Plan of Arrangement ------------------------------------------------------------- The Ontario Superior Court of Justice granted an application by Cygnal Technologies Corp. for proceedings pursuant to the Companies' Creditors Arrangement Act. The Order approves and sanctions the joint plan of arrangement and reorganization dated Jan. 29, 2008, of Cygnal, Cygnal Technologies Ltd. and Accord Communications Ltd. and provides for its implementation. The order was amended by a technical amendment to the plan to provide, in effect, that actions to be taken under the plan by a subsidiary of Laurus Master Fund Ltd. may instead be taken by another entity designated by Laurus Master Fund Ltd. Assuming all pre-conditions to the Amended Plan implementation have been met, the Amended Plan is to take effect on the first moment on the date upon which the certificate of amendment is issued under the Ontario Business Corporations Act in respect of the articles of reorganization of Cygnal to be filed by Cygnal in accordance with the Amended Plan. It is anticipated that the Amended Plan will be implemented and become effective on April 1, 2008. The Order follows the approval of the joint plan of arrangement and reorganization dated Jan. 29, 2008 by the Applicants' affected creditors on March 7, 2008. The Amended Plan provides that the Creditors with proven claims will receive cash and, if applicable, promissory notes in compromise and settlement of their claims and provides for the reorganization of the capital of Cygnal in accordance with the provisions of articles of reorganization that are a schedule to the Amended Plan. On the plan implementation date, pursuant to the terms of the Amended Plan and the articles of reorganization of Cygnal, all of the issued and outstanding shares of Cygnal will be converted into redeemable shares, which will be automatically redeemed and canceled, and rights associated with outstanding options and warrants will be extinguished without, in effect, payment of any consideration. Cygnal's directors have passed a resolution authorizing the delisting of Cygnal's common shares from the TSX, which is expected to occur on or about the implementation date of the Amended Plan. Upon implementation of the Amended Plan, a new class of common shares will be issued to a newly created affiliate of Laurus Master Fund Ltd. and this entity will become the sole shareholder of Cygnal. This Order also provides that the stay of proceedings against the Applicants and their property has been extended from March 21, 2008, to the earlier of the implementation date of the Amended Plan and April 15, 2008. About Cygnal Technologies Based in Markham, Ontario, Cygnal Technologies Corporation (TSX: CYN) -- http://www.cygnal.ca/-- provides network communications solutions including the design, integration, installation, maintenance and management of wired and wireless solutions and networks. Cygnal supports end-user customers and business partners through 12 offices across Canada, including Vancouver, Edmonton, Calgary, Winnipeg, London, Burlington, Toronto, Ottawa, Montreal, Quebec City and Halifax. DEATH ROW: Resolves Adversary Feud with Tupar Shakur Estate ----------------------------------------------------------- R. Todd Neilson, the Chapter 11 trustee of music label Death Row Records Inc., resolved all litigation brawls with the administrators of the Tupac Shakur Estate, following negotiations that started in October 2007, Bill Rochelle of Bloomberg News reports. The U.S. Bankruptcy Court for the Central District of California will convene a hearing on April 8, 2008, to approve the settlement agreement between the parties. As reported in the Troubled Company Reporter on July 27, 2007, Afeni Shakur, mother of the late rapper Tupac Shakur, filed an adversary complaint with the Court against the Debtor. Ms. Shakur hoped to stop the Debtor from including unreleased songs of Tupac in a bankruptcy sale. Donald N. David, Esq., general counsel for Amaru Entertainment and co-administrator of the Tupac Shakur Estate, argued that the Debtor violated a 1997 Death Row Agreement, stating that all unreleased songs physically housed in the data vaults at Death Row Records, would become the rightful property of the Tupac Shakur Estate. Mr. David disclosed that the Estate's administrators were surprised that a bankruptcy court assessment of Death Row's assets revealed an album's worth of unreleased songs of Tupac being herald to potential buyers. Mr. Rochelle suggests that the settlement agreement details which of Mr. Shakur's unreleased songs is owned by the Debtor and which are not. According to the pact, Tupar Shakur's new album will be allowed to be released and the administrators will forget their $2.2 million claim against the Debtor but will instead get $100,000. The settlement agreement also provides for the formula of the royalties the Tupac Shakur Estate will get from the album's sales. Headquartered in Compton, California, Death Row Records Inc. -- http://www.deathrowrecords.net/-- is an independent record producer. The company and its owner, Marion Knight, Jr., filed for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif. Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq., represent the Debtors in their restructuring efforts. R. Todd Neilson serves as Chapter 11 Trustee for the Debtors' estate. When the Debtors filed for protection from their creditors, they listed total assets of $1,500,000 and total debts of $119,794,000. DELPHI CORP: Court Approves Denso Corp. Settlement Agreement ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York granted the request of Delphi Corp. and its debtor-affiliates to enter into a settlement agreement with Denso Corp. The DENSO Settlement resolves the parties' dispute pertaining to certain patent rights and other forms of intellectual property, Neil Berger, Esq., at Togut, Segal & Segal LLP, in New York, tells the Court. The Debtors employ variable-valve timing technology to enhance the performance of engines by adjusting the timing of the opening and closing of engine valves according to environmental and performance conditions. The Debtors' cam phaser VVT technology uses a camshaft that varies the timing of the valves through an extra joint that allows irregularly shaped valve-actuating cams on the camshaft to be rotated to varying positions relative to the position of the crankshaft. In 2005, the Debtors introduced a new family of cam phaser VVT products that feature axial locking pins to prevent unwanted slippage of camshaft joints. In July 2005, DENSO sent correspondence to the Debtors asserting that certain features in the Debtors' cam phaser VVT products infringed on its patents. DENSO subsequently filed Claim Nos. 12339, 12340, and 12341 against the Debtors as unsecured non- priority claims for $697,778 each. The Debtors objected to the DENSO Claims. The Settlement was a product of due diligence and extensive arm's- length negotiations. The DENSO Settlement authorizes the Debtors to use the Delphi VVT technology pursuant to a license agreement with DENSO. The Debtors agree to pay DENSO a royalty based upon the sales of products containing the Delphi VVT technology. In exchange, DENSO agrees to withdraw the DENSO Claims. The DENSO Settlement will avoid the risks and costs involved in litigating the DENSO Claims, Mr. Berger relates. The Debtors aver that the Settlement is fair and reasonable and in the best interests of their estates and creditors. The Debtors have sought and obtained the Court's permission to file the DENSO Settlement under seal. Copies of the Settlement will only be provided to the U.S. Trustee and counsel to the statutory committees. The financial and other terms of the DENSO Settlement are commercially sensitive and their disclosure could harm the Debtors' position in the marketplace, Mr. Berger explains. About Delphi Corp. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on March 17, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: -- The $1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-' (two notches higher than the expected corporate credit rating on Delphi), with a '1' recovery rating, indicating the expectation of very high (90%-100%) recovery in the event of payment default. -- The $2 billion "second out" first-lien term loan B-2 is expected to be rated 'B' (equal to the corporate credit rating), with a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of payment default. -- The $825 million second-lien term loan is expected to be rated 'B-' (one notch lower than the corporate credit rating), with a '5' recovery rating, indicating the expectation of modest (10%-30%) recovery in the event of payment default. As reported in the Troubled Company Reporter on Jan. 16, 2008, Moody's Investors Service assigned ratings to Delphi Corporation for the company's financing for emergence from Chapter 11 bankruptcy protection as: Corporate Family Rating of (P)B2; $3.7 billion of first lien term loans, (P)Ba3; and $0.825 billion of 2nd lien term debt, (P)B3. In addition, a Speculative Grade Liquidity rating of SGL-2 representing good liquidity was assigned. The outlook is stable. DELPHI CORP: Court Allows Plan Investors' New EPCA Interpretation ----------------------------------------------------------------- The Honorable Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York denied Delphi Corp. and its debtor- affiliates' request that the Court reject the Appaloosa Management L.P.-led Plan Investors' interpretation of the parties' New Equity Purchase and Commitment Agreement in connection with General Motors Corp.'s increased participation in the syndication of the Debtors' exit facility. Judge Drain also denied Plan Investor A-D Acquisition Holdings, LLC's request to vacate the March 5, 2008 Court order directing the Plan Investors to show cause as to why the Debtors' request should not be granted. Judge Drain determined that GM's agreements in connection with the Debtors' proposed revision to their Exit Financing were prohibited by the New EPCA, Appaloosa noted in a regulatory filing with the U.S. Securities and Exchange Commission. The Court, according to Appaloosa, also determined that it would require an evidentiary hearing conducted pursuant to the adversary proceeding rules to decide the other issues raised by the parties, including whether the changes reflected by the Revised Exit Financing were also prohibited by the New EPCA. Those changes include the reduction in the aggregate amount of the Exit Financing from $6,800,000,000 to $6,100,000,000. ADAH filed a redacted version of its response to the Debtors' request, as authorized by the Court, on March 11, 2008. The Plan Investor contended that the action is a "regrettable manifestation of Delphi's conviction that, notwithstanding the present dispute, no viable path to emergence exists and Delphi may need to remain in the protective cloak of Chapter 11 while the domestic credit markets remain troubled." ADAH also asserted that Delphi is only seeking rights and remedies that it was unable to obtain in negotiations with the Plan Investors many months ago. It is entitled to rely on the hard-fought contractual rights embedded in the deal that it negotiated with Delphi, ADAH argued. On behalf of ADAH, Douglas P. Baumstein, Esq., at White & Case LLP, in New York, contended that despite the Plan Investors' willingness to maintain flexibility and provide concessions when operating in a consensual setting, the Debtors have dragged the parties into a contested federal judicial proceeding. "The demarcation between the conference room and the Courtroom must be maintained. There is a contract here, governed by New York law, that establishes distinct rights, rules, and remedies, and the Court must interpret those rules within the confines of law." The New EPCA is not without a history, Mr. Baumstein reminded the Court. Each provision, he said, had a genesis in a detailed course of events. He argued that the Debtors may not divorce any context from the genesis of the New EPCA, especially the parties' agreement that, even in the worst case scenario, each would be exposed solely to a capped quantum of damages for any breach of a performance obligation. The central problem with the Debtors' request is its skewed premise that litigation can lead to an effective date closing, Mr. Baumstein asserted. "This proceeding cannot fix the credit markets, cannot make Delphi a viable candidate for exit from Chapter 11, cannot convince either side that their subjective beliefs underlying the deal are somehow invalid and cannot reform the parties' objective contractual arrangements . . . [N]othing about a Court award of damages at some point in the future will ab initio make a closing occur or allow Delphi to exit." As of March 12, 2008, the Appaloosa Plan Investors may be deemed to beneficially own 125,739,448 shares of Delphi common stock, representing 22.31% of all outstanding Delphi shares. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 118; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on March 17, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: -- The $1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-' (two notches higher than the expected corporate credit rating on Delphi), with a '1' recovery rating, indicating the expectation of very high (90%-100%) recovery in the event of payment default. -- The $2 billion "second out" first-lien term loan B-2 is expected to be rated 'B' (equal to the corporate credit rating), with a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of payment default. -- The $825 million second-lien term loan is expected to be rated 'B-' (one notch lower than the corporate credit rating), with a '5' recovery rating, indicating the expectation of modest (10%-30%) recovery in the event of payment default. As reported in the Troubled Company Reporter on Jan. 16, 2008, Moody's Investors Service assigned ratings to Delphi Corporation for the company's financing for emergence from Chapter 11 bankruptcy protection as: Corporate Family Rating of (P)B2; $3.7 billion of first lien term loans, (P)Ba3; and $0.825 billion of 2nd lien term debt, (P)B3. In addition, a Speculative Grade Liquidity rating of SGL-2 representing good liquidity was assigned. The outlook is stable. DELPHI CORP: Completes Rights Offering for 62,707,305 Shares ------------------------------------------------------------ Delphi Corp.'s registration statement regarding subscription rights and warrants to purchase shares of common stock in Reorganized Delphi became effective on March 11, 2008. Prior to the Effective Date of its confirmed Plan of Reorganization, Delphi will initiate a sale and offer of subscription rights to purchase up to 62,707,305 of Reorganized Delphi common stock. After the Effective Date of the Plan, Reorganized Delphi will sell warrants to purchase up to 15,384,616 shares of the company's common stock. The warrants are immediately exercisable from and after the date of issuance until the six-month anniversary of the date of issuance. A full-text copy of Delphi's Registration Statement filed with the U.S. Securities and Exchange Commission is available at: http://ResearchArchives.com/t/s?2944 Rights Offering The Rights Offering is comprised of a Par Rights Offering and a Discount Rights Offering. Under the Par Rights Offering, each holder of Delphi common stock will receive, for each 26 shares of common stock owned of record at 5:00 p.m., New York City time, on Jan. 17, 2008, one nontransferable right to purchase one share of Reorganized Delphi common stock for $59.61 in cash. Fractional par rights will not be issued. Under the Discount Rights Offering, holders of allowed General Unsecured Claims, Section 510(b) Note Claims, Section 510(b) Equity Claims, or Section 510(b) ERISA Claims, as those claims are defined in the Plan, will receive, for each $99.07 of their claim, one transferable right to purchase one share of Reorganized Delphi common stock for $38.39 in cash. To the extent that Delphi's provisional claim allowance or estimation results in a particular claimholder receiving more discount rights than what the claimholder should have received based on the ultimate allowed amount of its claim, and those excess discount rights are transferred or exercised, Delphi, in its sole discretion: (a) will withhold an amount of Reorganized Delphi common stock equal to the value of the Excess Discount Rights from the Overpaid Eligible Holder's ultimate distribution; or (b) require the Overpaid Eligible Holder to return the value of the Excess Discount Rights. To the extent Delphi's provisional claim allowance or estimation results in a particular claimholder receiving fewer discount rights than it should have received based on the ultimate allowed amount of its claim, no subsequent adjustment will be made in respect of the claimholder's Claim. Each discount right entitles a claimholder who fully exercise its basic subscription privilege to subscribe, prior to the expiration date of the Discount Rights Offering, for additional shares of Reorganized Delphi common stock at an exercise price of $38.64 per full share. If an insufficient number of shares are available to fully satisfy Oversubscription Privilege requests, the available shares, if any, will be allocated pro rata among the applicants. If there is a pro rata allocation of the remaining shares and an applicant receives an larger allocation than it subscribed for under its Oversubscription Privilege, Reorganized Delphi will issue the number of shares subscribed and allocate the remaining shares pro rata among the remaining applicants. There is no Oversubscription Privilege in the Par Rights Offering. The Par Rights and Discount Rights will expire at 5:00 p.m., New York City time, on March 31, 2008. Appaloosa Management L.P. and the other Plan Investors have agreed to backstop the Discount Rights Offering, on the terms and subject to the conditions of their New Equity Purchase and Commitment Agreement with the Debtors. Pursuant to the Backstop Agreement, the Plan Investors will purchase, for the $38.39 in cash per full share, any shares that are not purchased pursuant to the exercise of Discount Rights. The Plan Investors' Backstop Agreement does not apply to the Par Rights Offering. If all of the Par Rights are not exercised in the Par Rights Offering, the remaining shares of Reorganized Delphi common stock will be issued to certain creditors in partial satisfaction of their claims. Use of Proceeds The Rights Offering is conducted to raise a portion of the funds necessary to consummate the Plan, Rodney O'Neal, Delphi Corp.'s chief executive officer and president, related in Delphi's Registration Statement. On the Effective Date of the Plan, all existing shares of Delphi's common stock, and any options, warrants, rights to purchase shares of Delphi common stock or other outstanding equity securities will be canceled. On or shortly after the Effective Date, Reorganized Delphi will make the distributions provided for in the Plan, including issuing the shares of new common stock for which Par Rights and Discount Rights are exercised in the Rights Offerings. On the Effective Date, Reorganized Delphi will have up to 160,124,155 shares of common stock outstanding assuming: (1) the conversion of up to 35,381,155 shares of Convertible Preferred Stock; (2) no exercise of Par Rights and exercise in full of Discount Rights or the Plan Investors' Backstop Agreement regarding the Discount Rights Offering; (3) the exercise in full of six-month warrants, seven-year warrants and ten-year warrants that are initially exercisable for the purchase of up to 25,113,275 shares of Reorganized Delphi common stock; and (4) the issuance of 17,237,418 shares of Reorganized Delphi common stock to creditors in respect of Trade and Other Unsecured Claims, aggregating approximately $1,310,000,000. Assuming that all Par Rights are exercised, Delphi anticipates receiving up to $2,900,000,000 in gross proceeds from the Rights Offerings before deducting fees, including the Plan Investors' backstop commitment fee, and expenses related to the rights offerings: * $1,600,000,000 from the Discount Rights Offering; and * $1,300,000,000 from the Par Rights Offering. If any shares of Reorganized Delphi common stock are purchased pursuant to the exercise of Oversubscription Privileges in the Discount Rights Offering, Reorganized Delphi will receive additional gross proceeds of $0.25 per Oversubscription Privilege share, Mr. O'Neal disclosed. Delphi intends to use the net proceeds from the Rights Offering to make payments and distributions contemplated by the Plan and for general corporate purposes. The net proceeds from the Discount Rights Offering will be used for general corporate purposes, Mr. O'Neal elaborated. On the other hand, the net proceeds from the Par Rights Offering will be used to (i) satisfy certain liquidity requirements and claims asserted by the Debtors' labor unions; (ii) reduce the amount of preferred stock distributed to General Motors Corp.; and (iii) partially satisfy certain unsecured creditors' claims. As of March 10, 2008, the Appaloosa Plan Investors and their affiliates beneficially owned 125,739,448 shares, or 22.3%, of Delphi's existing common stock. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 118; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on March 17, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: -- The $1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-' (two notches higher than the expected corporate credit rating on Delphi), with a '1' recovery rating, indicating the expectation of very high (90%-100%) recovery in the event of payment default. -- The $2 billion "second out" first-lien term loan B-2 is expected to be rated 'B' (equal to the corporate credit rating), with a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of payment default. -- The $825 million second-lien term loan is expected to be rated 'B-' (one notch lower than the corporate credit rating), with a '5' recovery rating, indicating the expectation of modest (10%-30%) recovery in the event of payment default. As reported in the Troubled Company Reporter on Jan. 16, 2008, Moody's Investors Service assigned ratings to Delphi Corporation for the company's financing for emergence from Chapter 11 bankruptcy protection as: Corporate Family Rating of (P)B2; $3.7 billion of first lien term loans, (P)Ba3; and $0.825 billion of 2nd lien term debt, (P)B3. In addition, a Speculative Grade Liquidity rating of SGL-2 representing good liquidity was assigned. The outlook is stable. DELPHI CORP: Moody's Holds (P)B2 Rating on $3.7-Bil. Term Loans --------------------------------------------------------------- Moody's Investors Service affirmed Delphi Corporation's Corporate Family Rating of (P)B2 but revised the rating on the company's $3.7 billon of first lien term loans. Moody's also affirmed Delphi's (P)B3 rating on the company's proposed $825 million of second lien term loans and its Speculative Grade Liquidity rating of SGL-2. The actions follow revisions to Delphi's financing arranged for its planned emergence from Chapter 11 bankruptcy protection. While the total amount of the first lien term loan is unchanged at $3.7 billion, it will now be separated into a senior tranche ("B-1") for $1.7 billion, and a junior tranche ("B-2") for $2.0 billion which an affiliate of General Motors Corporation will hold as consideration as part of GM's emergence claims. Moody's upgraded the rating on $1.7 billion of the more senior B-1 tranche to (P)Ba2 from (P)Ba3 (the rating applies to both the domestic portion of $1.5 billion (previously $2.95 billion), and the equivalent of $0.2 billion to its European subsidiary borrower (previously the equivalent of $0.75 billion)). Moody's assigned a rating of (P)B2 to the B-2 tranche. The outlook is stable. Moody's assigned prospective ratings to Delphi's emergence financing on Jan. 14, 2008. Those facilities were launched on a "best efforts" basis. In response to challenging credit markets, certain provisions to the earlier structure have been revised. GM will now receive a lower amount of cash at the time of Delphi's emergence and will accept Delphi notes. An affiliate of GM has agreed to accept $2.0 billion of notes under the B-2 tranche whose principal will be junior in a bankruptcy waterfall to claims of the B-1 tranche. The amount of cash GM will receive will depend upon amounts raised from market sources of the second lien term loan issuance but will be at least $175 million. The first $75 million obtained from market sources from the second lien term loan would be retained by Delphi. GM would be paid any amounts received above $75 million. To the extent that market sources subscribe to less than $825 million, GM would accept the remainder of the notes as reimbursement. Pricing and certain other provisions have also been altered from the earlier structure. While lending margins have been increased from previous levels, LIBOR rates to which those margins would be added have materially declined in response to actions taken by the Federal Reserve Bank. As a result, Delphi anticipates that its prospective interest expense post emergence will be slightly less than earlier expectations, but it has agreed to a floor on LIBOR and would be exposed to any increases in LIBOR above the floor to the extent it has not hedged that exposure. Delphi's operating performance in the final quarter of 2007 exceeded levels in its approved Plan of Reorganization, and, on a pro forma basis, it would expect to emerge with slightly more consolidated cash balances than previously contemplated. While such trends are encouraging, prospects for North American automotive production in 2008 have dimmed as macro-economic factors have increased uncertainty on consumer expenditures on durable goods such as automobiles. Should North American production volumes decline as a result, operating profitability would likely diminish and could offset any assumption of incremental performance based on recent experience. In Moody's view, there has been no material change in Delphi's prospective aggregate indebtedness, interest expense or cash flows from previous expectations. As a result, Moody's affirmed the (P)B2 Corporate Family Rating since many key metrics remain consistent with the B2 rating category. The (P)B2 CFR reflects the magnitude of the company's indebtedness upon emergence, weak but improving coverage over the intermediate term as the anticipated benefits of restructuring initiatives take hold, and the absence of free cash flow in its initial year after emergence. The rating recognizes substantial improvements in the company's cost structure and operational efficiencies achieved during its period of bankruptcy re-organization and ongoing benefits from its global scale and manufacturing footprint. However, the rating also considers the extent of the company's exposure to General Motors Corporation's North American operations. While GMNA exposure has significantly declined, it will continue as the largest individual component in the customer base, leaving Delphi vulnerable to any further reduction in GM's production volumes or market share in this critical region. Delphi's strengths include its geographic diversification, and large book of long term contracts to supply components for various vehicle platforms. The company will have significantly reduced its legacy liabilities through the bankruptcy process, shed unprofitable operations, and identified other initiatives that should improve its operating cost structure and better position it to compete in the auto parts supply business. However, the full benefit of these initiatives will only be achieved over time, and during the near term the company's financial metrics will remain consistent with ratings at the low end of the B range. In particular, it is noted that Delphi will require incremental restructuring disbursements of roughly $800 million over the next few years, which will likely preclude free cash flow generation during 2008. It is also noted that Delphi will be emerging from bankruptcy at a time when economic trends suggest potential for further weakness in automotive sales. While the benefits of restructuring initiatives should yield improvement in financial metrics over time, economic pressures could temper the rate of improvement. Consequently, Moody's continues to view the company's rating profile as more consistent with the B2 rating category at this time. The stable outlook is supported by Delphi's liquidity profile, expectations that the pace of operational improvements will gain traction over the intermediate term, and the company's participation in multiple geographic regions with different growth prospects. These factors along with an expected transition to positive free cash flow in 2009 have the potential to produce stronger coverage ratios and lower leverage going forward. Nonetheless, should a weaker environment for automotive sales develop in 2008, pressure on Delphi's liquidity and outlook could ensue. Ratings affirmed with updated LGD assessment: Delphi Corporation -- Corporate Family Rating, (P)B2 -- Probability of Default Rating, (P)B2 -- $825 million second lien term loan, (P)B3 (LGD-4, 65%) -- Speculative Grade Liquidity rating, SGL-2 Ratings revised on reduced amounts issued: Delphi Corporation -- $1,500 million first lien secured term loan, tranche B-1, (P)Ba2 (LGD 2, 17%) from (P)Ba3, (LGD-2-62%) Delphi Holdings Luxembourg S.ar.l. -- equivalent of $200 million first lien term loan, tranche B-1, guaranteed by Delphi Corporation, (P)Ba2 (LGD-2, 17%) from (P)Ba3 (LGD-2, 26%) Ratings assigned Delphi Corporation -- $2,000 million first lien secured term loan, tranche B-2, (P)B2 (LGD-3, 47%) The higher rating on the B-1 tranche of the first lien term loan reflects the application of a probability of default rating of (P)B2 and a loss given default assessment of LGD-2, 17%. The rating benefits from the priority of its secured claims and a substantial increase in the amount of junior debt from the introduction of the B-2 tranche. The assigned rating of (P)B2 to the B-2 tranche results from the application of the same PDR and an LGD of LGD-3, 47%. Its rating, level with the underlying CFR, flows from its secured position in the waterfall behind the B-1 tranche but ahead of the second lien obligation. The rating on the second lien term loan is unchanged as the total amount of more senior claims has not changed. Its LGD assessment has changed slightly as a result of up-dated amounts of unsecured non-debt claims. The above ratings were assigned on a prospective basis and assumed a full subscription to Delphi's proposed financing as well as recieving bankruptcy court affirmation of an effective date of emergence. Upon confirmation that those events have occurred, the (P) modifier will be removed. Should any of those assumptions prove to be incorrect, the ratings may be subject to change or could be withdrawn. Delphi Corporation, headquartered in Troy, MI, is a global tier-1 automotive supplier with products and services addressing electrical/electronic architecture, electronics & safety, powertrain systems, thermal systems, and aftermarket product and service solutions. The company expects to have revenues from continuing operations of roughly $20 billion and employs approximately 171,000 people at 163 manufacturing sites around the world. DON MCCORMACK: Voluntary Chapter 11 Case Summary ------------------------------------------------ Lead Debtor: Don Howard McCormack Diana Lee McCormack P.O. Box 5430 9403 Bluff Drive Parker, AZ 85344 Bankruptcy Case No.: 08-02530 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- D.&D. River Resort, Inc. 08-02558 Roadrunner River Resort, LLC 08-02529 Chapter 11 Petition Date: March 12, 2008 Court: District of Arizona (Yuma) Debtors' Counsel: Robert M. Cook, esq. (robertmcook@yahoo.com) Missouri Commons, Suite 185 1440 East Missouri Phoenix, AZ 85014 Tel: (602) 285-0288 Fax: (602) 285-0388 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million The Debtors did not file lists of their largest unsecured creditors. ELLIOTT BUILDING: Two Banks Seize of Subdivision Properties ----------------------------------------------------------- Bank of America seized bankrupt Elliot Building Group Ltd.'s Sea Pine Estates in Egg Harbor Township while RBC Centura seized the Debtor's 22 lots, Kevin Post writes for the Press of Atlantic City in New Jersey. The banks seized the properties after Elliot failed to auction them, Press of Atlantic relates. BofA spokeswoman Shirley Norton, told reporters that the bank is now searching for potential buyers wanting to buy the property as a whole. But she said that BofA has sub-divided the property and has put up housing structures on 10 lots, report reveals. The Debtor's Forest Walk, a 75-acre project with 74 lots located in Millville, New Jersey was seized by Wilmington Trust, based on the report. The Debtor's owner, Brad Elliott, stated his home in Langhorne, Pennsylvania and his other projects in Pennsylvania and Delaware were liquidated, Press of Atlantic reports. He added that he won't do homebuilding business anymore, the news adds. The auction of the Debtor's assets began last fall and was supervised by Great Neck, New York-based Keen Consultants. PNC Bank Demands Payment of $3 Million As reported in the Troubled Company Reporter , Jan 28, 2008, PNC Bank has compelled officers of the Elliott Building Group to pay their $3 million balance on a certain property. Founder Brad Elliott and company CEO John DiPasquale, have an outstanding debt of $3,048,352, including fees and interest, on their development called The Preserve at Hilltown. The property was secured by a $13.1 million loan from the bank on August 2006. About Elliott Building Group Based in Langhorne, Pennsylvania, the Elliott Building Group Ltd. -- http://www.elliottbuildinggroup.com/-- develops homes and real estate properties. The holding company and 18 of its affiliates filed for Chapter 11 protection on June 10, 2007 (Bankr. D. N.J. Lead Case No. 07-18143), and an affiliate at Nov. 19, 2007 (Bankr. D. N.J. Case No. 07-27002). Aris J. Karalis, Esq. at Maschmeyer Karalis, P.C., serves as the Debtors' counsel. When Elliott Building Group filed for bankruptcy, it listed assets and debts between $1 million to $100 million. ENVIRONMENTAL TECTONICS: Modifies Credit Deal with H.F. Lenfest --------------------------------------------------------------- Environmental Tectonics Corporation disclosed that H.F. Lenfest agreed to modify certain terms and conditions of his convertible subordinated $10 million debt agreement. Amendment No. 1 to the Convertible Note and Warrant Purchase Agreement revised the financial covenants so that they are the same as the financial covenants contained in ETC's credit agreement with PNC Bank, National Association, dated as of July 31, 2007. The First Amendment to the Senior Subordinated Convertible Note extended the maturity date of the Convertible Note and Warrant Purchase Agreement from Feb. 18, 2009, to March 1, 2010. The effective date of both modifications is Feb. 19, 2008. H.F. Lenfest, ETC's largest shareholder, has been involved with ETC since 2003, when he participated in a refinancing of the company with PNC Bank. He is on the company's board of directors. Southampton, Pennsylvania-based Environmental Tectonics Corporation (AMEX: ETC) -- http://www.etcusa.com/-- designs, develops, installs and maintains aircrew training systems (aeromedical, tactical combat and general), disaster management training systems and services, entertainment products, sterilizers (steam and gas), environmental testing products, hyperbaric chambers and related products for domestic and international customers. Waiver As reported in the Troubled Company Reporter on Feb 7, 2008, Environmental Tectonics received an extension on its credit agreement waiver, originally received Nov. 21, 2007, from PNC Bank, National Association, which extends the waiver to May 31, 2008. This extension agreement requires ETC to deliver to PNC its restated financial statements for the fiscal year ended Feb. 23, 2007, no later than May 31, 2008. FEDERAL-MOGUL: U.S. Trustee Contests Financial Advisor's Fees ------------------------------------------------------------- Kelly Beaudin Stapleton, the U.S. Trustee for Region 3, opposed the fees and expenses sought by Federal-Mogul Corp. and its debtor-affiliates' financial advisor and claims management consultant, PricewaterhouseCoopers LLP. PwC has billed the Debtors $14,859,721 for its professional fees for the period Oct. 1, 2001, through Dec. 27, 2007. The firm also recorded $1,347,569 in actual and necessary expenses incurred during the same period. According to Ms. Stapleton's counsel, Richard L. Schepacarter, Esq., in Wilmington, Delaware, much of PwC's services related to call center and statement of financial affairs and schedule preparation were routine or ministerial services or acts that, in some instances, were performed by professionals with high billing rates. Routine services are generally held to be compensable at a much lower rate than the maximum rate charged by a professional, Mr. Schepacarter points out. Thus, the Routine Services could have been accomplished by professionals with lower billing rates. Ms. Schepacarter also noted that PwC's early applications contain several time entries and references to conferences, telephone conversations, or meeting that are duplicative or excessive. The U.S. Trustee asserts that those duplicative and excessive time entries should be discounted. "When more than one professional is working on the case in the same capacity as another, then the likelihood of duplication of effort increases. Professionals billing separately for identical services, such as meetings, should have their compensation reduced to correct for excessive or duplicative hours," Mr. Schepacarter argues. Pursuant to Section 586 of the Judiciary and Judicial Procedure Code, the U.S. Trustee is charged with the administrative oversight of cases commenced pursuant to the Bankruptcy Code. That duty is part of the U.S. Trustee's overarching responsibility to enforce the bankruptcy laws as written by Congress and interpreted by the courts. Federal-Mogul Corporation -- http://www.federal-mogul.com/-- (OTCBB: FDMLQ) is a global supplier, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. Founded in Detroit in 1899, the company is headquartered in Southfield, Michigan, and employs 45,000 people in 35 countries. Aside from the U.S., Federal-Mogul also has operations in other locations which includes, among others, Mexico, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm, represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed by the District Court on Nov. 14. Federal-Mogul emerged from Chapter 11 on December 27, 2007. * * * As reported in the Troubled Company Reporter on Jan. 10, 2008, Moody's Investors Service confirmed the ratings of the reorganized Federal-Mogul Corporation -- Corporate Family Rating, Ba3; Probability of Default Rating, Ba3; and senior secured bank credit facilities, Ba2. The outlook is stable. The financing for the company's emergence from Chapter 11 bankruptcy protection has been funded in line with the structure originally rated by Moody's in a press release dated Nov. 28, 2007. As reported in the Troubled Company Reporter on Jan. 7, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Southfield, Michigan-based Federal-Mogul Corp. following the company's emergence from Chapter 11 on Dec. 27, 2007. The outlook is stable. FEDERAL-MOGUL CORP: Earns $1.4 Billion in Fiscal Year 2007 ---------------------------------------------------------- Federal-Mogul Corp. reported its financial results for the 12- month period ended Dec. 31, 2007. Financial Summary (in millions) 12 Months Ended Dec. 31 ----------------------- 2007 2006 ---- ---- Net sales 6,914 6,326 Gross margin 1,185 1,105 Selling, general & administrative expenses (828) (848) Settlement of U.K. pension plans - (501) Gain on settlement of liabilities subject to compromise 761 - Fresh-start reporting adjustments 956 - Income (loss) before income taxes 1,744 (614) Income tax benefit/(expense) (332) 64 Net income (loss) 1,412 (550) Operational EBITDA 763 625 The company emerged from reorganization under Chapter 11 of the U.S. Bankruptcy Code on Dec. 27, 2007, and adopted fresh-start reporting in connection with its emergence. Net income for the 12-month period totaled $1,412,000,000, compared with a net loss of $550,000,000 for the same period of 2006. Federal-Mogul reported net sales of $6,914,000,000 for the year ended Dec. 31, 2007. Net sales increased by $588,000,000 when compared to the same period of 2006, of which $310,000,000 is due to increased global demand and new program launches with both original equipment manufacturer and aftermarket customers, with the balance due mainly to favorable foreign currency movements. Gross margin for the 12-month period ended Dec. 31, 2007, increased by $80,000,000, compared to the same period of 2006. The combination of productivity, increased volumes and favorable exchange improved gross margins by $135,000,000. These favorable impacts were partially offset by $75,000,000 of raw material commodity price inflation and $56,000,000 in reduced customer pricing. Gross margin was further improved through reduced pension expense of $76,000,000 associated with the settlement of the U.K. pension plans. Selling, general and administrative expenses for the year ended Dec. 31, 2007 decreased by $20,000,000. The company's reduced pension expense of $24,000,000 associated with the settlement of the U.K. pension plans combined with $26,000,000 of productivity and other improvements more than offset adverse foreign exchange of approximately $30,000,000. Income before taxes for the 12-month period totaled $1,744,000,000, compared with a loss before taxes of $614,000,000 for the same period of 2006. Included in Federal-Mogul's earnings before income taxes for the year ended Dec. 31, 2007, are a gain on the settlement of liabilities subject to compromise and fresh-start reporting adjustments of $761,000,000 and $956,000,000, respectively, associated with the company's emergence from Chapter 11. Included in Federal-Mogul's loss before income taxes for the year ended Dec. 31, 2006, is a charge of $501,000,000 as a result of the company's U.K. subsidiaries' emergence from Administration in November 2006. Excluding these impacts, the company's earnings before income taxes for the year ended Dec. 31, 2007, was $27,000,000, compared to a loss before income taxes of $113,000,000 for 2006, an improvement of $140,000,000. In addition to those same factors affecting gross margin, results for the full year were impacted by reduced SG&A expenses, reduced costs associated with the company's Chapter 11 proceedings, and increased charges related to asset impairments. Management believes that Operational EBITDA most closely approximates the cash flow associated with the operational earnings of the company and uses Operational EBITDA to measure the performance of its operations. Operational EBITDA is defined to include discontinued operations and exclude impairment charges, Chapter 11 and U.K. Administration expenses, settlement of the U.K. pension plans, gain on the settlement of liabilities subject to compromise, fresh-start reporting adjustments, restructuring costs, income tax expense, interest expense, depreciation and amortization. The company reported Operational EBITDA of $763,000,000 for the 12-month period ended Dec. 31, 2007, an increase of $138,000,000 when compared to the same period of 2006. A reconciliation of Operational EBITDA to the company's income before income taxes for the 12 months ended Dec. 31, 2007 has been provided. Capital expenditures were $310,000,000 for the year ended Dec. 31, 2007, an increase of $72,000,000 from 2006. Total cash flow, excluding cash flows associated with financing activities, payment to the U.S. Asbestos Trust, payment of prepetition interest, payments to settle LSC, and the settlement of the U.K. Administration proceedings, was $88,000,000 and $83,000,000 for the years ended Dec. 31, 2007, and 2006, respectively. "We are very pleased with the progress achieved in 2007, especially in regards to our emergence from Chapter 11, a significant milestone in Federal-Mogul's 108-year history of serving the global automotive industry. We again would like to acknowledge our customers, shareholders, suppliers and employees worldwide for their loyalty and support," said Federal-Mogul president and chief executive officer Jose Maria Alapont. "The new business awards and our progress on operational performance in 2007 reflect the achievement of the entire team in executing our global sustainable profitable growth strategy and developing Federal-Mogul as a world-class, diversified global supplier." At Dec. 31, 2007, the successor company's balance sheet showed total assets of $7.8 billion and total liabilities of $5.7 billion, resulting in a $2.1 billion stockholders' equity. Deficit, in 2006, was $1.7 billion. About Federal-Mogul Federal-Mogul Corporation -- http://www.federal-mogul.com/-- (OTCBB: FDMLQ) is a global supplier, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. Founded in Detroit in 1899, the company is headquartered in Southfield, Michigan, and employs 45,000 people in 35 countries. Aside from the U.S., Federal-Mogul also has operations in other locations which includes, among others, Mexico, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed by the District Court on Nov. 14. Federal-Mogul emerged from Chapter 11 on December 27, 2007. * * * As reported in the Troubled Company Reporter on Jan. 10, 2008, Moody's Investors Service confirmed the ratings of the reorganized Federal-Mogul Corporation -- Corporate Family Rating, Ba3; Probability of Default Rating, Ba3; and senior secured bank credit facilities, Ba2. The outlook is stable. The financing for the company's emergence from Chapter 11 bankruptcy protection has been funded in line with the structure originally rated by Moody's in a press release dated Nov. 28, 2007. As reported in the Troubled Company Reporter on Jan. 7, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Southfield, Michigan-based Federal-Mogul Corp. following the company's emergence from Chapter 11 on Dec. 27, 2007. The outlook is stable. FEDERAL-MOGUL: Professionals Bill $323 Million in Fees & Expenses ----------------------------------------------------------------- Thirty-three professionals have sought final allowance of their fees and expenses incurred in Federal-Mogul Corp. and its debtor- affiliates' bankruptcy cases: Final Professional Fee Period Fees Expenses ------------ ---------- ---- -------- 11/18/02 - AlixPartners, LLP 12/27/07 $5,517,712 $34,839 Analysis, Research, & 01/16/02 - Planning Corp. 12/27/07 4,383,484 29,992 Anderson, Kill & 02/20/03 - Olick, P.C. 12/27/07 1,805,826 62,070 05/01/07 - Baker & McKenzie LLP 12/27/07 530,218 7,116 10/23/01 - Bayard, P.A. 12/27/07 1,364,465 218,176 12/13/02 - Bederson & Company, LLP 12/27/07 3,493,141 37,333 06/17/02 - Bifferato Gentilotti LLC 12/27/07 211,428 78,687 Bilzin Sumberg Baena 11/17/03 - Price & Axelrod LLP 10/31/04 182,971 23,265 11/13/01 - Campbell & Levine, LLC 12/27/07 1,306,504 188,782 Caplin & Drysdale, 11/13/01 - Chartered 02/07/08 8,854,961 635,299 Deloitte Financial 07/11/02 - Advisory Services LLP 12/27/07 2,181,374 19,805 10/01/01 - Dykema Gossett PLLC 12/27/07 4,543,701 86,146 11/13/01 - Elizabeth Warren 12/27/07 2,531 - 02/11/02 - Eric D. Green 12/27/07 752,886 45,057 10/01/01 - Ernst & Young LLP 12/28/07 40,339,616 1,058,947 Ferry, Joseph & 11/06/03 - Pearce, P.A. 12/27/07 518,993 53,931 09/01/02 - FTI Consulting, Inc. 12/27/07 1,991,634 50,524 10/01/01 - Gilbert Randolph, LLP 12/27/07 9,134,237 504,449 01/14/02 - Hanly & Conroy LLP 12/27/07 5,149,916 307,992 02/19/02 - Herbert Smith LLP 12/27/07 3,174,253 182,914 12/03/03 - J.H. Cohn LLP 12/27/07 894,238 14,212 09/18/06 - Killian & Salisbury, P.C. 12/27/07 32,945 5,321 Legal Analysis 12/01/01 - Systems, Inc. 12/27/07 1,830,547 81,127 01/23/02 - Lovells, Inc. 12/27/07 7,474,452 831,206 Pachulski Stang 10/01/01 - Ziehl & Jones LLP 12/27/07 3,000,578 3,097,847 10/01/01 - PricewaterhouseCoopers LLP 12/27/07 14,859,721 1,347,569 05/01/02 - Resolutions, LLC 12/27/07 458,462 35,467 10/01/01 - Rothschild Inc. 09/30/03 4,800,000 362,857 11/09/01 - Sidley Austin LLP 12/27/07 101,991,251 5,689,097 Sonnenschein Nath & 10/23/01 - Rosenthal LLP 12/27/07 30,748,517 1,132,742 05/08/06 - The Kenesis Group, LLC 12/27/07 3,217,501 27,392 06/01/04 - Weil, Gotshal & Manges LLP 12/27/07 3,312,299 319,327 Young Conaway Stargatt & 01/07/02 - Taylor, LLP 12/27/07 12,102,382 1,966,023 Bell, Boyd & Lloyd LLP also seeks payment of $6,109,055 for its fees and expenses during the period from June 17, 2002, through Dec. 27, 2007. In addition, Jefferies & Company, Inc., asks the Court to award it $19,145,389 for its fees and expenses for the period from Oct. 26, 2001, through Dec. 27, 2007. The Professionals' fees and expenses total approximately $323,952,000. The Official Committee of Asbestos Property Damage Claimants also seeks reimbursement of $41,592 for the actual and necessary expenses incurred by its committee members for the period from Oct. 23, 2001, through Dec. 27, 2007. The costs and expenses incurred by the Asbestos Committee Members are in connection with committee meetings that were actual and necessary to the preservation of the Reorganized Debtors' Chapter 11 estates, Kathleen Campbell Davis, Esq., at Campbell & Levine, LLC, in Wilmington, Delaware, avers. The Reorganized Debtors hired AlixPartners, Dykema Gossett, Ernst & Young, FTI Consulting, Gilbert Randolph, Hanly & Conroy, Kenesis, Killian & Salisbury, Pachulski Stang, PwC, Rothschild, and Sidley Austin. The Official Committee of Unsecured Creditors retained Sonnenschein Nath, as counsel; Bayard, as co-counsel; and Jefferies & Co., as financial advisor. Baker & McKenzie, Bell Boyd and Bifferato Gentilotti act as counsel to the Official Committee of Equity Security Holders. Deloitte FAS serves as the Equity Committee' financial advisor. Anderson Kill, Bilzin Sumberg, Campbell & Levine, Caplin & Drysdale, Ferry Joseph, J.H. Cohn, Legal Analysis, Lovells, Ms. Warren, and Weil Gotshal were retained by the Asbestos Committee. Eric D. Green is the legal representative for Future Asbestos Claimants. As the Futures Representative, Mr. Green is responsible for protecting the rights of all entities who have not asserted asbestos-related claims against the Debtors prior to the confirmation of the Plan of Reorganization but properly assert Demands, as that term is defined in Section 524(g)(5) of the Code, subsequent to the order confirming the Plan. Mr. Green, with the assistance of Analysis Research, Bederson & Co., Herbert Smith, Resolutions, and Young Conaway, has investigated the Reorganized Debtors' acts, conduct, and property on a regular basis, including matters in connection with the operation and reorganization of the Debtors' businesses. Federal-Mogul Corporation -- http://www.federal-mogul.com/-- (OTCBB: FDMLQ) is a global supplier, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, off-road and industrial vehicles, as well as the worldwide aftermarket. Founded in Detroit in 1899, the company is headquartered in Southfield, Michigan, and employs 45,000 people in 35 countries. Aside from the U.S., Federal-Mogul also has operations in other locations which includes, among others, Mexico, Malaysia, Australia, China, India, Japan, Korea, and Thailand. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan Esq., James F. Conlan Esq., and Kevin T. Lantry Esq., at Sidley Austin Brown & Wood, and Laura Davis Jones Esq., at Pachulski, Stang, Ziehl & Jones, P.C., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. Federal-Mogul Corp.'s U.K. affiliate, Turner & Newall, is based at Dudley Hill, Bradford. Peter D. Wolfson, Esq., at Sonnenschein Nath & Rosenthal; and Charlene D. Davis, Esq., Ashley B. Stitzer, Esq., and Eric M. Sutty, Esq., at The Bayard Firm represent the Official Committee of Unsecured Creditors. On March 7, 2003, the Debtors filed their Joint Chapter 11 Plan. They submitted a Disclosure Statement explaining that plan on April 21, 2003. They submitted several amendments and on June 6, 2004, the Bankruptcy Court approved the Third Amended Disclosure Statement for their Third Amended Plan. On July 28, 2004, the District Court approved the Disclosure Statement. The estimation hearing began on June 14, 2005. The Debtors submitted a Fourth Amended Plan and Disclosure Statement on Nov. 21, 2006, and the Bankruptcy Court approved that Disclosure Statement on Feb. 6, 2007. The Fourth Amended Plan was confirmed by the Bankruptcy Court on Nov. 8, 2007, and affirmed by the District Court on Nov. 14. Federal-Mogul emerged from Chapter 11 on December 27, 2007. * * * As reported in the Troubled Company Reporter on Jan. 10, 2008, Moody's Investors Service confirmed the ratings of the reorganized Federal-Mogul Corporation -- Corporate Family Rating, Ba3; Probability of Default Rating, Ba3; and senior secured bank credit facilities, Ba2. The outlook is stable. The financing for the company's emergence from Chapter 11 bankruptcy protection has been funded in line with the structure originally rated by Moody's in a press release dated Nov. 28, 2007. As reported in the Troubled Company Reporter on Jan. 7, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Southfield, Michigan-based Federal-Mogul Corp. following the company's emergence from Chapter 11 on Dec. 27, 2007. The outlook is stable. FLEETWOOD ENTERPRISES: Ongoing Losses Cue S&P to Junk Corp. Credit ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Fleetwood Enterprises Inc. to 'CCC+' from 'B'. At the same time, S&P lowered its ratings on the company's subordinated debt and trust preferred stock, affecting approximately $260 million of securities. The outlook remains negative. "The downgrades reflect ongoing losses, a more highly leveraged balance sheet, and potential near-term liquidity challenges," said credit analyst James Fielding. "Fleetwood reported losses for both the quarter and 12 months ended Jan. 27, 2008, as a consequence of weak consumer demand for the company's factory- built homes and certain recreational vehicle products." Mr. Fielding added that losses have narrowed recently because of the company's aggressive efforts to right-size its manufacturing platform and reduce overhead costs. Nonetheless, relative debt levels have continued to rise as shareholder equity has eroded further. The negative outlook acknowledges difficult market conditions that are likely to continue to suppress the sale of RVs and manufactured homes in the foreseeable future. S&P would lower our ratings further if liquidity pressures increase as a result of material cash flow deficits or a leveraged refinancing of the 5% convertible notes. Conversely, S&P would consider an upgrade if industry trends stabilize, liquidity strengthens, and Fleetwood demonstrates its ability to generate sustainable profits at lower production levels. FORGITRON LLC: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Forgitron, LLC 8525 Clinton Road Cleveland, OH 44144 Bankruptcy Case No.: 08-11762 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Hadgitron, LLC 08-11763 Type of Business: The Debtors are subsidiaries of Automated Wheel LLC, a family-owned and operated plating company in Brooklyn, New York. Chapter 11 Petition Date: March 15, 2008 Court: Northern District of Ohio (Cleveland) Judge: Randolph Baxter Debtors' Counsel: Harry W. Greenfield, Esq. (bankpleadings@bucklaw.com) Buckley King, LPA 600 Superior Avenue East, Suite 1400 Cleveland, OH 44114 Tel: (216) 363-1400 Fax: (216) 579-1020 Forgitron, LLC's Financial Condition: Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million A. Forgitron, LLC's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Key Bank National Association Substantially all of $11,294,647 127 Public Square Debtor's assets; Cleveland, OH 44114 value of security: $10,644,000 Epsilon Management Corp. $2,284,708 8525 Clinton Road Cleveland, OH 44144 Hadgitron, LLC $473,500 30 Hengst Drive Camden, SC 29020 Ormet Primary Aluminum Corp. $429,441 P.O. Box 176 State Route 7 Hannibal, OH 43931-0176 W.O. Blackstone & Co., Inc. $315,154 1841 Shop Road P.O. Box 88 Columbia, SC 29202 Hess Engineering, Inc. Although Hess $309,548 2950 Redfield Street Engineering, Inc. Niles, MI 49120 filed a UCC financing statement, Debtor has found no record of a signed or authenticated security agreement or grant Kershaw County $211,997 Enprotech Mechanical Service, $206,573 Inc. Horton Mach & Custom Design $161,037 Progress Energy Carolinas, $70,216 Inc. Alfe Heat Treating, Inc. $40,827 A. Finkl & Sons Co. $43,859 Automated Wheel, LLC $43,455 Engineered Product Sales Corp. $22,212 Newmarket Partners, Inc. $17,020 Fanuc Robotics America, Inc. $12,826 Cross Brothers Co., Inc. $12,580 Symonds Machine Co. $11,830 Metallurgical Technology Inc. $11,712 B. Hadgitron LLC's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ KeyBank National Association value of security: $4,539,794 127 Public Square $4,500,000 Cleveland, OH 44114 W.O. Blackstone & Co., Inc. $315,154 1841 Shop Road P.O. Box 88 Columbia, SC 29202 Kershaw County $248,212 515 Walnut Street Camden, SC 29020 Epsilon Management Corp. Management fees $18,000 Hertz Rental Equipment Corp. $9,798 Epsilon Management Corp. Loans $4,660 Meaden & Moore, Ltd. $2,000 Key Bank National Association $794 Corporation Service Co. $319 GLASSMASTER CO: Bentley Deal to be Examined by Case Trustee ----------------------------------------------------------- As reported in the Troubled Company Reporter on March 4, 2008, the U.S. Bankruptcy Court for the District of South Carolina converted the Chapter 11 case of Glassmaster Company, nka Glassmaster Boats LLC, to a Chapter 7 liquidation proceeding -- after a year under bankruptcy protection -- as requested by the Debtor's Official Committee of Unsecured Creditors. The creditors feared that their investments with the ailing boat manufacturer has sunk, Ben Werner writes for South Carolina's The State News. The Committee recounted to the Court that the Debtor made management actions regarding a subsidiary without permission from the Court. The Debtor also didn't do anything to "remedy these serious breaches of bankruptcy laws." Now the Debtor is facing an investigation headed by chapter 7 trustee Michelle Viera based on creditors' allegations that Glassmaster officials are favoring new owner Bentley Industries, State relates. Creditors also allege that Glassmaster officials hadn't resolved "serious breaches of bankruptcy laws" citing unauthorized actions involving a subsidiary, State says. State notes that creditors have criticized the Debtor's sale of an equipment to Bentley Industries for $500,000. Under the sale deal, Bentley could utilize Glassmaster's Lexington property and related assets for free, State quotes court documents as stating. The Debtor's counsel, Robert Anderson, Esq., informed the Court that it committed no wrongful act, State relates. State recounts that Glassmaster's woes began in the 1980s when it expanded into other lines of business. Its acquisition of the Dorchester County facility in 2005 failed over several environmental regulation issues. The Debtor, according to the report, also encountered supply problems. Subsequently, the Debtor began incurring losses and finding means to refinance its debts, State says. The case trustee says she is not sure if creditors could get repaid, State reveals. She refused to unfold the details of her investigation on the Glassmaster-Bentley deal, but Committee counsel Charles Summerall, Esq., believes it will be closely examined, State adds. Ms. Viera will inform creditors of case updates at a meeting scheduled by the end of March 2008, State says. About Glassmaster Company Headquartered in Lexington, South Carolina, Glassmaster Company - http://www.glassmasterboat.com/-- manufactures polymer filaments, flexible control cables, switch panels, electronic test equipment, and modular composite framework. Glassmaster began producing boats in 1957. The company filed for Chapter 11 protection on April 27, 2007 (Bankr. D. S.C. Case No. 07-02242). Robert Frank Anderson, Esq., at Anderson & Associates P.A., in Columbia, South Carolina, represent the Debtor. Charles Summerall, Esq., represents the Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $10,066,068 and total debts of $8,997,367. In 2007, Glassmaster Boats LLC became the newest member of the Bentley Industries based in Lexington and owned by Steven Deese. Current brands are: Bentley Pontoons, Duracraft Marine and now Glassmaster Boats. GLOBAL CREDIT: S&P Chips Preferred Shares Rating to B+ from BB- --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Global Credit Pref. Corp.'s preferred shares and removed them from CreditWatch with negative implications, where they were placed Jan. 16, 2008. The lowering of the ratings mirrors the lowering of the rating on the credit-linked note to which the preferred shares are linked. Ratings List Global Credit Pref Corp. Ratings Lowered And Removed From CreditWatch Negative To From -- ---- Preferred shares Global scale B+ BB-/Watch Neg National scale P-4(High) P-3(Low)/Watch Neg (Related CLN: The Toronto-Dominion Bank C$48,031,000 Portfolio Credit-Linked Notes) GREAT PANTHER: Board Adds Rights Plan to Deal With Take-Over Bids ----------------------------------------------------------------- Great Panther Resources Limited's board of directors approved the adoption of a shareholder rights plan as part of its procedures for dealing with any parties who may seek to acquire control of the company through a take-over bid or other transaction. The company is not aware of any pending or threatened take-over bids for the company, and it is not the intention of the plan to prevent take-over bids. The plan is intended to ensure that all shareholders are treated equally and fairly in any such transaction. The plan was adopted in order to provide the company's board of directors with sufficient time to assess and evaluate any take-over bid or other control transaction and to explore and develop alternatives for maximizing shareholder value. The plan is similar to other shareholder rights plans adopted by Canadian corporations. To implement the plan, the board of directors of the company authorized the issue of one right in respect of each common share of the company outstanding to holders of record at 5:00 pm, Vancouver time, on March 7, 2008. Until the occurrence of certain specific events, the rights will trade with the common shares of the company and be represented by the share certificates for such common shares. The rights become exercisable only when a person, including any party related to it or acting jointly with it, acquires or discloses its intention to acquire 20% or more of the outstanding common shares of the company without complying with the "Permitted Bid" provisions of the plan. Under the plan, a Permitted Bid is a bid made to all shareholders on identical terms and conditions that is open for at least 60 days. If at the end of 60 days more than 50% of the outstanding shares, other than those owned by the offeror and certain persons related to the offeror or acting jointly with it, have been tendered, the offeror may take up and pay for the shares but must extend the bid for a further 10 business days to allow all other shareholders to tender. Should a non-permitted acquisition occur, each Right would entitle each holder of common shares, other than the offeror and certain parties related to the offeror or acting jointly with it, to purchase additional common shares of the company at a 50% discount to the market price at the time. Although the plan has become effective upon its adoption by the board of directors, in accordance with stock exchange requirements it will be submitted to shareholders of the company for ratification at the next annual shareholders meeting. If ratified, the plan will continue until the annual general meeting of shareholders in 2012. The plan is subject to acceptance by the Toronto Stock Exchange. For further information please contact Brad Aelicks or Don Mosher at telephone (604) 685-6465, fax (604) 899-4303 or e-mail info@greatpanther.com. About Great Panther Headquartered in Vancouver, Canada, Great Panther Resources Limited (TSX: GPR) -- http://www.greatpanther.com/-- is a mining and exploration company. The company's activities are focused on the mining of precious and base metals from its wholly owned properties in Mexico. In addition, Great Panther is also involved in the acquisition, exploration and development of other properties in Mexico. Going Concern Doubt KPMG LLP, in Vancouver, Canada, expressed substantial doubt about Great Panther Resources Ltd.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses and operating cash flow deficiencies. HOLLEY PERFORMANCE: IRS Objects to Prepackaged Chapter 11 Plan -------------------------------------------------------------- The Internal Revenue Services objects to Holley Performance Products Inc. and its debtor-affiliates' Joint Prepackaged Plan of Reorganization dated Feb. 11, 2008, saying it had not fully evaluated whether its claims are being treated fairly under the Plan. IRS also has not had time to determine whether there will be any future examinations of the Debtors' tax returns, resulting in additional prepetition liabilities, Jan M. Geht, Esq., of the U.S. Department of Justice said. However, IRS states its willingness to waive its objection, if certain additional "corrective language" is inserted into the Debtors' prepackaged Plan. As reported in the Troubled Company Reporter on Feb. 15, 2008, the Court will hold a hearing March 19, 2008, to consider confirmation of the Debtor's prepackaged plan. The Debtors' plan contemplates on swapping bank debt for equity and paying trade lenders and general unsecured lenders in full. The plan also offers 90% ownership in the Debtors' stock to holders of 12.5% second-lien secured notes due 2009 with an aggregate amount of $146 million. Second-lien noteholders will also receive $50 million worth of newly issued notes under the plan. Meanwhile, bondholders are entitled to receive either $100 cash for every $1,000 worth of bonds, or warrants to buy equity in the reorganized Debtors. Accordingly, IRS asks the Court to deny confirmation of the Debtors' Plan. About Holley Performance Bowling Green, Kentucky-based Holley Performance Products Inc. -- http://www.holley.com/-- was was founded in 1903 by brothers George and Earl Holley. It currently employs 390 workers in Kentucky, California and Mississippi. It is the parent company of various companies offering the Holley brands, including Hooker, FlowTech and Nitrous Oxide Systems. Holley carburetors power every NASCAR(R) Sprint(R) Cup team and every NHRA(R) Pro-Stock champion. The Holley line also includes performance fuel pumps, fuel injection, intake manifolds, cylinder heads & engine dress-up products for street performance, race and marine applications. The company filed for Chapter 11 protection on February 11, 2008 (Bankr. Del. Case No.08-10256). Evelyn J. Meltzer, Esq., and David B. Stratton, Esq., at Pepper Hamilton, L.L.P., represents the Debtors' in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in these cases to date. When the Debtors filed for protection against their creditors, it listed total assets of $106,000,000 and total debts of $243,000,000. * * * As reported in the Troubled Company Reporter on March 10, 2008, the Court granted the Debtors permission to obtain up to $60 million in secured postpetition financing from Wells Fargo Foothill Inc., on a final basis. HOVNANIAN ENTERPRISES: Fitch Affirms 'B-' Issuer Default Rating --------------------------------------------------------------- Fitch Ratings has affirmed these ratings on Hovnanian Enterprises, Inc.: -- IDR at 'B-'; -- Senior unsecured notes at 'B-/RR4'; -- Senior subordinated notes at 'CCC/RR6'; -- Series A perpetual preferred stock at 'CCC-/RR6'. Fitch has also upgraded the rating on HOV's secured revolving credit facility as: -- Senior secured revolving credit facility to 'BB-/RR1' from 'B-/RR4'. HOV's Rating Outlook is Negative. Fitch's Recovery Rating of '1' on HOV's secured revolving credit facility indicates outstanding (90%-100%) recovery prospects for holders of this debt issue. The 'RR4' on HOV's senior unsecured notes indicates average (30%-50%) recovery prospects for holders of these debt issues. HOV's exposure to claims made pursuant to performance bonds and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on HOV's senior subordinated notes and preferred stock indicates poor recovery prospects (0%-10%) in a default scenario. Fitch applied a liquidation value analysis for these RRs. The ratings had been placed on Ratings Watch Negative on Jan. 18, 2008 as the company was in the process of negotiating an amended revolving credit agreement after it received a temporary waiver of compliance for violating its tangible net worth and leverage covenants. On March 7, 2008, HOV completed the amendment to its revolving credit agreement. The revolving credit facility was reduced from $1.2 billion to $900 million and borrowings under the facility will be secured by a portion of the company's assets. As of Jan. 31, 2008, HOV had $325 million outstanding under the revolving credit facility, which would have left $306 million of borrowing availability under the $900 million credit facility. The ratings and Outlook reflect the difficult U.S. housing environment, current and expected negative trends in HOV's operating margins and meaningful deterioration in credit metrics, especially interest coverage and debt/EBITDA ratios. HOV was slower than most in braking its growth. Consequently the inventories, although now starting to come down, are above comfort levels and debt leverage remains above the company's targeted levels. While cash flow from operations only totaled $62 million for all of its fiscal 2007, HOV generated $357 million of cash from operations during its fourth quarter, allowing the company to pay down debt by $390 million from the third-quarter 2007. HOV generated about $16 million of cash from operations during its fiscal 2008 first quarter and projects that it will generate in excess of $100 million of cash flow in 2008. HOV has been successful in reducing speculative built homes during its fiscal 2008 first quarter, reducing the total by about 20.6% versus fourth-quarter 2007 and down 42.4% compared to the peak (third-quarter 2006). This represents about 4.7 started and unsold homes per community. It is likely that spec homes would be priced aggressively in order to move the inventory, to the disadvantage of margins. Future ratings and Outlook will be influenced by the economy and broad housing market trends as well as company-specific activity, such as land and development spending, general inventory levels, speculative inventory activity, gross and net new-order activity, debt levels and free cash flow trends and uses. The possibility of the housing downturn continuing longer and becoming deeper than anticipated could have broad ratings implications for homebuilders. IAC/INTERACTIVECORP: Court Decides Spinoff Dispute on March 28 -------------------------------------------------------------- The Delaware Chancery Court will release its judgment on March 28, 2008, on whether IAC/InterActiveCorp chairman Barry Diller's spinoff scheme of the company has violated his covenant with largest shareholder Liberty Media Corp., Jessica E. Vascellaro at The Wall Street Journal reports. According to various reports, Chancery Court Judge Stephen Lamb will decide on Mr. Diller's eviction after counsels of both companies have furnished abstracts by March 21, 2008. The summary must outline their stand on Mr. Diller's power bestowed to him by Liberty and on Liberty's effort to expel Mr. Diller, the chief executive and other directors from the IAC board. As reported in the Troubled Company Reporter on March 11, 2008, Liberty Media chairman John Malone asserted on a March 10 Court hearing that the proposed spinoff of IAC/InterActiveCorp violates over a decade old pact between the companies. Messrs. Malone and Diller had engaged in a legal battle triggered by IAC's plan to spin-off into five separate entities. Primary witness, Mr. Malone, pressed that Liberty Media should continue to enjoy its rights based on a dual-voting structure. However, Mr. Diller elected for a single-voting structure in deciding on the spinoffs. Michele Gershberg of Reuters relates that if Mr. Diller is proven to have trespassed the deal, that agreement is called off and he will be dismissed as chairman and chief executive of the company. If the judge rule that Mr. Diller complied with the contract, the second debate will be whether Mr. Diller and his board disregarded their duties to stockholders with the plan, Reuters states. About Liberty Media Headquartered in Englewood, Colorado, Liberty Media Corporation (NasdaqGS: LINTA) -- http://www.libertymedia.com/-- owns interests in a broad range of electronic retailing, media, communications and entertainment businesses. Those interests are attributed to two tracking stock groups: the Liberty Interactive group, which includes Liberty's interests in QVC, Provide Commerce, IAC/InterActiveCorp, and Expedia, and the Liberty Capital group, which includes Liberty's interests in Starz Entertainment, News Corporation, and Time Warner. About IAC IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates a portfolio of specialized and global brands in the sectors: Retailing, which includes the United States and International segments; Services, which includes the Ticketing, Lending, Real Estate, Teleservices and Home Services reporting segments; Media & Advertising, and Membership & Subscriptions, which includes the Vacations, Personals and Discounts reporting segments. * * * As reported in the Troubled Company Reporter on Feb. 1, 2008, Standard & Poor's Rating Services said its ratings on IAC/InterActiveCorp, including the 'BB' corporate credit rating, remain on CreditWatch with negative implications, where they were initially placed on Nov. 5, 2007, following IAC's announcement that it plans to divide itself into five publicly traded companies. INTERNATIONAL PAPER: To Buy Weyerhaeuser's Unit for $6 Bil. Cash ---------------------------------------------------------------- International Paper Company signed an agreement with Weyerhaeuser Company to purchase its Containerboard, Packaging and Recycling business for $6 billion in cash, subject to post-closing adjustments. International Paper expects to close the deal in the third quarter of 2008, subject to customary closing conditions, including regulatory review and receipt of financing. The transaction includes nine containerboard mills, 72 packaging locations, 10 specialty-packaging plants, four kraft bag and sack locations and 19 recycling facilities. The transaction affects approximately 14,300 Weyerhaeuser employees. Because the transaction is a purchase of assets rather than of stock, International Paper will realize a tax benefit that has an estimated net present value of approximately $1.4 billion. Taking this benefit into account, the net purchase price is about $4.6 billion. "This deal represents a compelling opportunity for International Paper and our shareowners at a very attractive valuation," International Paper Chairman and Chief Executive Officer John Faraci said. "Integrating Weyerhaeuser's CBPR business into our North American packaging platform fits very well with our strategy to improve our earnings, cash flow and returns by strengthening existing businesses. We expect the combined packaging business will generate stronger cash flow and higher EBITDA margins than either standalone business." Carol Roberts, senior vice president of International Paper's packaging business, said she sees low integration risk and considerable upside potential in the deal. "Weyerhaeuser has low- cost, well-run assets that complement our existing mill and converting system and offer significant synergies," she said. "The acquisition expands our geographic presence in the U.S. and Mexico and diversifies our customer base in key product lines. All of this will make our packaging business more competitive, more profitable and better able to serve customers." Steven R. Rogel, chairman and chief executive officer of Weyerhaeuser Co., said the announcement completes the company's strategic review of the CBPR business. "We are pleased with the outcome and we will continue to focus on those areas that present the greatest opportunities for the future," Mr. Rogel said. "This future begins with the trees and the land, and our outstanding stewardship of these resources. To this we add our unique expertise in growing and extracting value from the trees and the land on which they grow. "I want to thank the CBPR employees for their dedication, patience and professional approach during this review. Their efforts continue to improve the performance of this business and I'm confident that this transaction positions CBPR for an even more successful future." Morgan Stanley acted as financial advisor to Weyerhaeuser in the transaction. International Paper has identified profit improvement opportunities of about $400 million annually from the acquisition. The company expects to achieve at least 40% of the improvement within 12 months of completing the deal, with the remainder fully realized by the end of the third year, as a result of reducing duplicate overhead costs, integrating manufacturing operations, optimizing product mix, and improving operational and supply chain efficiencies. International Paper projects that the acquisition will be earnings accretive for the 2009 full year. International Paper will finance the transaction through debt and has financing commitments from several leading financial institutions. About Weyerhaeuser Headquartered in Federal Way, Washington, Weyerhaeuser Company -- http://www.weyerhaeuser.com/-- is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. About International Paper Headquartered in Stamford, Connecticut, International Paper Co. (NYSE: IP) -- http://www.internationalpaper.com/-- is an uncoated paper and packaging company with primary markets and manufacturing operations in North America, Europe, Russia, Latin America, Asia and North Africa. International Paper employs approximately 54,000 people in more than 20 countries, and serves customers worldwide. * * * Moody's Investors Service placed International Paper Co.'s senior subordinate rating at 'Ba1' in December 2005. The rating still holds to date with a stable outlook. INTERSTATE BAKERIES: PBGC Reserves Right to Review Pension Plans ---------------------------------------------------------------- The Pension Benefit Guaranty Corporation reserves its right to review any pension arrangement that Interstate Bakeries Corp. and its debtor-affiliates may adopt to ensure that it does not violate PBGC's policy against abusive follow-on plans. The Debtors have indicated that they intend to withdraw from the American Bakers Association Plan but that they will maintain the IBC Pension Plan after confirmation of their Plan of Reorganization. The Debtors have also proposed to the affected unions that after their withdrawal, they will provide participants in the ABA Plan with benefits under the IBC Pension Plan so that they "will end up with substantially the same retirement benefit through the combination of the ABA Plan and the [IBC Pension Plan] as if the ABA Plan had continued as a viable benefit provider." Mark Blank, Esq., in Washington, D.C., relates that, for more than a quarter of a century, the PBGC has opposed attempts to shift liability to its termination insurance program by means of an abusive "follow-on plan." Mr. Blank says the clearest example of an abuse can arise after an underfunded plan terminates and PBGC becomes the statutory trustee. Then, the former sponsor adopts a new plan that, together with the guaranteed benefits paid by PBGC under the terminated plan, provides substantially the same benefits as those provided under the terminated plan, with PBGC paying most of the cost. Mr. Blank notes that the U.S. Supreme Court has explained in In re PBGC v. LTV Corp., 496 U.S. 633, 651 (1990); accord PBGC v. Alloytek, 924 F.2d 620 (6th Cir.1991), that "follow-on plans may tend to frustrate one of the objectives of ERISA that the PBGC is supposed to accomplish -- the 'continuation and maintenance of voluntary private pension plans.' In addition, follow-on plans have a tendency to increase the PBGC's deficit and increase the insurance premiums all employers must pay, thereby frustrating another statutory objective -- the maintenance of low premiums." Mr. Blank also points out that the Debtors have not provided PBGC with details of any pension arrangement. Moreover, the status of the ABA Plan has not been determined in the litigation pending in the U.S. District Court for the District of Columbia, involving ABA Plan employees who assert that their contributions should not be used for the Debtors' benefit. PBGC clarifies that it is not waiving its right to assess any proposed arrangement and take any appropriate action warranted under Title IV of Employee Retirement Income Security Act. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. IBC confirmed that it has not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the Court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. (Interstate Bakeries Bankruptcy News, Issue No. 91; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). INVACARE CORP: Moody's Affirms B1 Corporate Family Rating --------------------------------------------------------- Moody's Investors Service affirmed the B1 Corporate Family Rating of Invacare Corp. and upgraded the company's Speculative Grade Liquidity rating to SGL-1 from SGL-2. The outlook for the ratings is stable. The affirmation of the ratings reflects substantive top line and operating line improvements in recent quarters, which brings the company's credit metrics more in line with the B1 Corporate Family Rating. The upgraded SGL-1 liquidity rating reflects Moody's expectations of excellent liquidity in 2008, supported by substantial revolver availability, ample financial covenant cushions, and ongoing operational and working capital management improvements. The ratings remain constrained by ongoing adverse developments in government and other payor reimbursement policies and low cost competition from Asian manufacturers. In large part as a result of its ongoing, multi-year, restructuring plan, Invacare achieved substantive top line and operating margin improvement in 2007, compared to depressed levels in 2006. As a result, the company's financial leverage, interest coverage ratios and cash flow generation relative to debt, have moved more solidly into a range normally associated with the B1 Corporate Family Rating. Nonetheless, Moody's notes that about 30% of the company's revenues remain at risk from ongoing efforts by the US government to implement competitive bidding with respect to Medicare durable medical equipment, prosthetics, orthotics, and supplies. The ratings benefit from an aging population in Invacare's key markets, including the US. Moody's also acknowledges Invacare's scale and diversification and low research and development spending as a percentage of revenues, which are reflective of the company's long product life-cycles. Invacare had cash and cash equivalents of about $62 million at fiscal year end 2007, of which over 50% was held at non-guarantor subsidiaries. Operating cash flow for fiscal year 2007 improved to about $80 million (including non-recurring benefits from tax receivables and insurance recoveries totaling $16.8 million) while capital spending was about $20 million, excluding an additional $5 million of acquisitions. As of Dec. 31, 2007, Invacare had about $131 million of revolver availability, inclusive of a small amount of letters of credit that are outstanding. Moody's expects ample covenant cushions under the company's credit agreement in the near term. In summary, Moody's upgraded Invacare's Speculative Grade Liquidity Rating to SGL-1 from SGL-2 and affirmed existing ratings as: -- The Corporate Family Rating, rated B1; -- Probability of Default Rating, rated B1; -- $250 million Term Loan B due 2013, rated Ba2 (LGD2, 22%); -- $150 million revolver due 2012, rated Ba2 (LGD2, 22%); -- $175 million 9.75% senior notes due 2015, rated B2 (LGD4, 68%); -- $135 million 4.125% senior subordinated convertible notes due 2027, rated B3 (LGD6, 93%); The ratings outlook is stable. Invacare Corp. is the leading manufacturer and distributor of non- acute health care products for home health care, retail and extended care markets worldwide. The company's products are principally sold to over 25,000 home healthcare and medical equipment providers in North America, Europe and Asia. In fiscal 2007, the company reported revenues of $1.6 billion. ISLETON LLC: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Isleton, LLC 5882 MacAdam Court San Jose, CA 95123 Bankruptcy Case No.: 08-51214 Chapter 11 Petition Date: March 14, 2008 Court: Northern District of California (San Jose) Judge: Roger L. Efremsky Debtor's Counsel: Lars T. Fuller, Esq. (Fullerlawfirmecf@aol.com) 60 North Keeble Avenue San Jose, CA 95126 Tel: (408) 295-5595 Total Assets: $6,401,000 Total Debts: $5,080,438 The Debtor did not file a list of its largest unsecured creditors. IXIS ABS: Moody's Lowers Ratings to C on Three Note Classes ----------------------------------------------------------- Moody's Investors Service has downgraded ratings of eight classes of notes issued by IXIS ABS CDO 2, Ltd., and left on review for possible further rating action ratings of two of these classes of notes. The notes affected by today's rating action are as: Class Description: $123,500,000 Class A-1 Senior Secured Funded Notes Due 2046; -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $201,500,000 Class A-1 Senior Secured Unfunded Notes Due 2046; -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $6,500,000 Class A-X Notes Due 2046; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ca Class Description: $85,000,000 Class A-2 Senior Secured Floating Rate Notes Due 2046; -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $30,000,000 Class B Secured Floating Rate Notes Due 2046; -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: $21,000,000 Class C Secured Floating Rate Deferrable Notes Due 2046; -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $15,000,000 Class D Secured Floating Rate Deferrable Notes Due 2046; -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C Class Description: $4,000,000 Class E Secured Floating Rate Deferrable Notes Due 2046. -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on February 1, of an event of default caused by a failure of the Senior Overcollateralization Percentage to be greater than or equal to 100 per cent, pursuant Section 5.1(j) of the Indenture dated June 8, 2006. This event of default is still continuing. IXIS ABS CDO 2, Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. 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 the Secured Notes to be immediately due and payable and to terminate the Reinvestment Period. Furthermore, according to the Trustee, the Controlling Class and the CDS Counterparty has directed the Trustee to dispose of and liquidate the Collateral in accordance with relevant provisions of the transaction documents. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and outcome of the liquidation. Because of this uncertainty, the ratings assigned to the Class A-1 Notes remain on review for possible further action. J.T. REAL ESTATE: May Voluntary File for Chapter 7 Liquidation -------------------------------------------------------------- J.T. Real Estate Investments LLC, owned by Jeff Radabaugh in Ohio, is expected to voluntarily file for chapter 7 liquidation, Dan Stockman of The Journal Gazette in Fort Wayne, Indiana reports. Less than a year ago, 12 of its creditors filed involuntary chapter 7 petition with the U.S. Bankruptcy Court in Fort Wayne against Mr. Radabaugh seeking payment of $8,252,453, Gazette says. According to Gazette, Mr. Radabaugh, through J.T. Real Estate, took options on rental properties in Fort Wayne and sold them to investors for more than the asking price, a so-called assignment fee. Gazette notes an FBI release stating that assignment fees are mostly used in mortgage fraud and citing that some mortgages are twice the actual price of the homes. Mr. Radabaugh is also facing a lawsuit filed by the Indiana Attorney General for conducting real estate business without license, Gazette reveals. Homes involved have been foreclosed and most of the investors have filed for bankruptcy protection, adds Gazette. Despite these events, Mr. Radabaugh maintains that his operations were "absolutely" legal, Gazette reports. The hearing on the involuntary chapter 7 case against J.T. Real Estate was initially slated yesterday, March 17, and Thursday, March 20, 2008. Investors' counsel Daniel Serban, Esq., stated that a case trustee will identify the Debtor's assets, dispose of them and pay back creditors, Gazette relates. Mr. Serban said that the sole asset presently identified to be the Debtor's is a property in near Monroeville and Van Wert, Ohio, Gazette adds. The creditors' original claim of $8,252,453, has been reduced after Mr. Radabaugh returned some of the houses, Gazette quotes Mr. Serban as saying. Gazette failed to get a comment from J.T. Real Estate counsel Robert Nicholson, Esq. J.T. Real Estate Investments LLC is unrelated to J.T. Fields Realtors Inc. of Fort Wayne. JUNIPER NETWORKS: Board Permits Repurchase of $1 Bil. Common Stock ------------------------------------------------------------------ Juniper Networks Inc.'s board of directors approved a new stock repurchase program which enables the company to purchase up to $1 billion of the company's common stock. In conjunction with this new authorization, the company will initiate an on-going, share maintenance plan designed to offset dilution from the issuance of shares related to its employee stock plans. This new program is in addition to the $2 billion stock repurchase program approved in 2006 and 2007. To date, the company has repurchased approximately $1.7 billion of its stock under the $2 billion authorized in 2006 and 2007. Share repurchases under Juniper's stock repurchase programs will be subject to a review of the circumstances in place at the time and will be made from time to time in private transactions or open market purchases as permitted by securities laws and other legal requirements. The program may be discontinued at any time. About Juniper Networks Headquartered in Sunnyvale, California, Juniper Networks Inc. (NasdaqGS: JNPR) -- http://www.juniper.net/-- offers a high- performance network infrastructure that creates a responsive and trusted environment for accelerating the deployment of services and applications over a single network. This fuels high- performance businesses. * * * Juniper Networks Inc. still carries Standard & Poor's 'BB' long term foreign and local issuer credit rating which were placed in April 2007. KC POOLE: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: K.C. Poole, Inc. 15 Bryant Street Jasper, GA 30143 Bankruptcy Case No.: 08-20720 Chapter 11 Petition Date: March 14, 2008 Court: Northern District of Georgia (Gainesville) Debtor's Counsel: Evan M. Altman, Esq. (evan.altman@laslawgroup.com) Building 2-Northridge 400 8325 Dunwoody Place Atlanta, GA 30350 Tel: (770) 394-6466 http://www.laslawgroup.com/ Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. LEGENDS GAMING: Bankruptcy Filing Cues S&P to Put Default Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Legends Gaming LLC to 'D', including the 'CCC+' corporate credit rating. The ratings downgrade follows the filing by the company on March 11, 2008 for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Western District of Louisiana. The company had previously announced that it had violated certain financial covenants under its credit agreements, and was operating under a forbearance agreement that recently expired. LE MONDE CDO: Moody's Junks Ratings on Three Note Classes --------------------------------------------------------- Moody's Investors Service has downgraded and placed on further possible review for downgrade these notes issued by Le Monde CDO I PLC: Class Description: $120,000,000 Class A-1US Variable Funding Dollar Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $80,000,000 and $69,500,000 Class A-1R Redenominatable Floating Rate Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $828,495,000 Class A-2MM-US Floating Rate Dollar Notes Due 2008 -- Prior Rating: P-1 -- Current Rating: P-1, on review for possible downgrade Class Description: $604,250,000 Class A-2US Floating Rate Dollar Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $159,180,000 Class A-3MM-US Floating Rate Dollar Notes Due 2008 -- Prior Rating: P-1 -- Current Rating: P-1, on review for possible downgrade Class Description: $360,000,000 Class A-3EU Floating Rate Euro Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $62,500,000 Class A-4 Floating Rate Dollar Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $30,750,000 Class B Floating Rate Dollar Notes Due 2052 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Moody's Downgrades these Notes: Class Description: $22,500,000 Class C Deferrable Floating Rate Dollar Notes Due 2052 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $17,500,000 Class D Deferrable Floating Rate Dollar Notes Due 2052 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $3,000,000 Class E Subordinated Deferrable Floating Rate Dollar Notes Due 2052 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca 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 of structured finance securities. LIBERTY MEDIA: Court Issues IAC Spinoff Feud Ruling on March 28 --------------------------------------------------------------- The Delaware Chancery Court will release its judgment on March 28, 2008, on whether IAC/InterActiveCorp chairman Barry Diller's spinoff scheme of the company has violated his covenant with largest shareholder Liberty Media Corp., Jessica E. Vascellaro of Wall Street Journal reports. According to various reports, Judge Stephen Lamb will decide on Mr. Diller's eviction after counsels of both companies have furnished abstracts by March 21, 2008. The summary must outline their stand on Mr. Diller's power bestowed to him by Liberty and on Liberty's effort to expel Mr. Diller, the chief executive and other directors from the IAC board. As reported in the Troubled Company Reporter on March 11, 2008, John Malone, Liberty Media chairman, asserted on a March 10 Court hearing that the proposed spinoff of IAC/InterActiveCorp violates over a decade old pact between the companies. Messrs. Malone and Diller had engaged in a legal battle triggered by IAC's plan to spin-off into five separate entities. Primary witness, Mr. Malone, pressed that Liberty Media should continue to enjoy its rights based on a dual-voting structure. However, Mr. Diller elected for a single-voting structure in deciding on the spinoffs. Michele Gershberg of Reuters relates that if Mr. Diller is proven to have trespassed the deal, that agreement is called off and he will be dismissed as chairman and chief executive of the company. If the judge rule that Mr. Diller complied with the contract, the second debate will be whether Mr. Diller and his board disregarded their duties to stockholders with the plan, Reuters states. About IAC IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates a portfolio of specialized and global brands in the sectors: Retailing, which includes the United States and International segments; Services, which includes the Ticketing, Lending, Real Estate, Teleservices and Home Services reporting segments; Media & Advertising, and Membership & Subscriptions, which includes the Vacations, Personals and Discounts reporting segments. About Liberty Media Headquartered in Englewood, Colorado, Liberty Media Corporation (NasdaqGS: LINTA) -- http://www.libertymedia.com/-- owns interests in a broad range of electronic retailing, media, communications and entertainment businesses. Those interests are attributed to two tracking stock groups: the Liberty Interactive group, which includes Liberty's interests in QVC, Provide Commerce, IAC/InterActiveCorp, and Expedia, and the Liberty Capital group, which includes Liberty's interests in Starz Entertainment, News Corporation, and Time Warner. * * * Fitch Ratings placed Liberty Media Corporation's long-term issuer default and senior unsecured debt ratings at 'BB' in December 2006. The ratings still hold to date. LILIA CHAVEZ: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Lilia Sandra Chavez 8311 Sierra Bonita Avenue Rosemead, CA 91770 Bankruptcy Case No.: 08-13238 Chapter 11 Petition Date: March 13, 2008 Court: Central District Of California (Los Angeles) Judge: Ellen Carroll Debtor's Counsel: Michael A. Rivera, Esq. (michael@riveralaw.com) 7840 Firestone Boulevard, Suite 105 Downey, CA 90241 Tel: (562) 869-0480 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor does not have any creditors who are not insiders. LILLIAN VERNON: Court Approves Asset Sale Bidding Procedures ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware authorized the proposed bidding procedures for the sale of substantially all of Lillian Vernon Corporation and its debtor-affiliates' assets to Creative Catalog Corp. or its designee, as "stalking horse bidder," subject to higher and better offers. As reported in yesterday's Troubled Company Reporter, under the stalking-horse asset purchase agreement dated March 10, 2008, Creative Catalog will buy the Debtors' assets for $9,250,000, subject to certain purchase price reduction, if assets are sold before closing. The Debtors seek to sell inventory valued at $10,400,000, including fixtures, equipment and personal property. Upon the consummation of a sale of the assets to any party, the Debtors will provide a $185,000 break-up fee plus $92,500 reimbursement for out-of-pocket expenses to Creative Catalog from the proceeds of the sale. The Debtors proposed that the break-up fee will have superpriority administrative expense status. Daniel B. Butz, Esq., at Morris Nichols Arsht & Tunnel LLP in Wilmington, Delaware, said five other entities have expressed their interest in purchasing the Debtors' assets. The first incremental bid of any initial offer must be at least $500,000 under the agreement. Sale Protocol All interested bidders must submit their offers along with $800,000 cash deposit no later than 4:00 p.m., on March 31, 2008, to: Morris Nichols Arsht & Tunnell LLP c/o Robert J. Dehney, Esq. 1201 North Market Street Wilmington, Delaware 19899 Fax: (302) 425,4673 The Debtor will conduct an auction on April 1, 2008, at 11:00 a.m. and bidding will commence with the highest qualified bid and continue with incremental amount of $100,000. A sale hearing is scheduled for April 3, 2008, at 10:30 a.m. About Lillian Vernon Based in Virginia Beach, Virginia, Lillian Vernon Corp. -- http://www.lillianvernon.com/-- and its affiliates are direct mail specialty catalog and online companies concentrating on the marketing of gifts, holiday products, toys and children's products, personal and home accessories, kitchen and houseware products and garden and outdoor products. They have developed a proprietary customer database containing information about its customers, including such data as order frequency, size and date of last order and type of products purchased. The database contains information with respect to over 27 million customers, gift recipients and people who have requested its catalogs. In the fiscal year ended Feb. 22, 2003, they published 33 catalog editions and mailed approximately 150,000,000 catalogs to past and prospective customers. They also offer products over the Internet. The company and six of its affiliates filed for Chapter 11 protection on Feb. 20, 2008 (Bankr. D.D., Delaware, Case No. 08- 10323). Ann C. Cordo, Esq., Daniel B. Butz, and Esq., J. Dehney, Esq. at Morris, Nichols, Arsht & Tunnell, L.L.P. represent the Debtors in their restructuring efforts. Lillian Vernon's parent, Sun Capital Partners Inc., a privately held investment company with offices in Boca Raton, Fla., is not included in the bankruptcy filing. The company listed assets of $1 million to $100 million and debts of $1 million to $100 million in its bankruptcy filing. LOS OSOS COMMUNITY: S&P Lifts Underlying Rating to BBB- from C -------------------------------------------------------------- Standard & Poor's Ratings Services raised its underlying rating to 'BBB-' from 'C' on Los Osos Community Services District Wastewater Assessment District No. 1, California's limited obligation improvement bonds. The outlook is stable. "The raised rating reflects a U.S. bankruptcy court judge's recent approval of the district's agreement with MBIA," said Standard & Poor's credit analyst Paul Dyson. "Under the agreement, all wastewater bond assessments levied on and collected from property owners in the district will be collected by the County of San Luis Obispo, which will directly remit them to the bond redemption fund held by the trustee. This completely bypasses the district, which filed for bankruptcy Aug. 25, 2006, and mitigates the risk for the possible misappropriation of funds for bondholders." The bonds are secured by assessments against the property in the assessment district and were issued in 2002 to construct a wastewater collection, treatment, and disposal system, a project that was significantly delayed, then halted in 2005. The community of Los Osos, often referred to as Los Osos-Baywood Park, is nestled along the southern tidal estuary of Morro Bay on the coast of Central California. The district is located in the unincorporated western portion of San Luis Obispo County (population 263,242) approximately 12 miles from the City of San Luis Obispo (population 44,439). MAIDENFORM BRANDS: Earns $34.2 Mil. for Year Ended Dec. 29, 2007 ---------------------------------------------------------------- Maidenform Brands, Inc. released its financial results for the fourth quarter and year ended Dec. 29, 2007, in a 10-K filing with the U.S. Securities and Exchange Commission. The company reported a net income of $34.2 million on $422 million of net sales for the fiscal year ended Dec. 29, 2007, compared to a net income of $27.7 million on $416 million of net sales in 2006. Net sales for 2007 increased $5.4 million, or 1.3%, to $422.2 million. Wholesale segment net sales increased $5.6 million, or 1.6%, to $366.2 million in 2007, with wholesale branded net sales up 8.7%. A key driver for the increase was higher mass-channel net sales of $4.3 million, or 4.7%, as Maidenform expanded its Sweet Nothings(R) brand. The increase in net sales was offset by a reduction in private label sales throughout 2007 as Maidenform focused on driving its wholesale branded business. An additional $1.3 million in net sales came from department stores and national chain stores, which sales were driven by solid performance in the company's Lilyette(R) and Maidenform(R) brands. Total international sales, which are included in the total wholesale segment, increased $9.9 million, or 34.7%, to $38.4 million largely due to ongoing growth in Mexico, Canada and the United Kingdom. Retail segment net sales for 2007 decreased $0.2 million, or 0.4%, to $56.0 million and same store sales decreased 1.5%. Maidenform also had total assets of $279 million, total liabilities of $180 million, and a stockholders' equity of $99 million for the fiscal year ended Dec. 29, 2007, compared to total assets of $244 million, total liabilities of $169 million, and a stockholders' equity of $74 million in fiscal year 2006. For 2007, operating income increased $12.4 million, or 22.3%, to $67.9 million which included the pension curtailment gain. Excluding the pension curtailment gain, operating income for 2007 increased $6.1 million, or 11.0%, to $61.6 million. Operating income as a percentage of net sales, excluding the pension curtailment gain, increased to 14.6% for 2007 from 13.3% for 2006. Net income for 2007 was $34.2 million and EPS was $1.43. Excluding the pension curtailment gain and deferred financing costs -- $2.4 million after tax -- net income increased $4.0 million, or 14.4%, representing EPS growth of 15.7% to $1.33 per share. Thomas J. Ward, Chief Executive Officer, stated, "Our results for the fourth quarter and 2007 reflected a number of key steps to grow our business and shape our future. These 2007 milestones included: 1) continuing net sales growth of our wholesale branded business of 8.7% over 2006; 2) implementing sourcing initiatives that contributed to gross margins increasing 170 basis points to 39.3%; 3) refinancing our credit facility which reduced annual interest expense; and 4) maximizing cash flow utilization by voluntarily paying down $20.0 million of debt and repurchasing $12.5 million of common stock." "Our ongoing commitment to performance drove a 15.7% diluted EPS growth rate over last year, despite a more challenging retail environment overall. As we enter 2008, we remain cautious about the retail climate but our team continues to focus on driving Maidenform to new levels of success through expanding product categories with existing customers, developing new customers globally and prudently managing expenses while effectively building our foundation for future growth." Financial Performance Guidance for 2008 Based on specific initiatives that Maidenform is undertaking in 2008, the company is maintaining its financial performance projections provided on Nov. 6, 2007. Such expected growth will be from new brands with new customers, an expanded door presence with certain existing customers and new product introductions which are scheduled to occur, particularly in the second half of 2008. The company continues to remain cautious based on the macro-economic conditions that exist affecting the current retail climate. With that, Maidenform believes it is prudent to now project that the company will be at the lower end of the range of its previously provided guidance for 2008. Maidenform does expect net sales for the first quarter of 2008 to be lower from a prior year $5.0 million non-recurring private brand program with a specialty retailer, as well as a more challenging retail environment. The company then projects net sales to sequentially increase in each quarter throughout the remainder of 2008, resulting in net sales to be flat in the first half of the year, with mid-single digit net sales growth in the second half of 2008. The company's consolidated gross margins continue to be projected at approximately 39% for 2008, with margins slightly lower in the first half of the year from customer and product mix. For the second half of 2008, margins are then expected to be comparable to the second half of 2007 due to customer and product mix, in addition to sourcing initiatives. About Maidenform Brands Maidenform Brands Inc. (NYSE: MFB) -- http://www.maidenform.com/ -- is an intimate apparel company with a portfolio of established and well-known brands, top-selling products and an iconic heritage. Maidenform designs, sources and markets an extensive range of intimate apparel products, including bras, panties and shapewear. During the company's 85-year history, Maidenform has built strong equity for its brands and established a solid growth platform through a combination of innovative, first-to-market designs and creative advertising campaigns focused on increasing brand awareness with generations of women. Maidenform sells its products under some of the most recognized brands in the intimate apparel industry, including Maidenform(R), Flexees(R), Lilyette(R), Sweet Nothings(R), Rendezvous(R), Subtract(R), Bodymates(R) and Self Expressions(R). Maidenform products are currently distributed in approximately 55 countries and territories. * * * As reported in the Troubled Company Reporter on Aug. 21, 2007, Moody's Investors Service assigned Ba2 ratings to Maidenform's new senior secured $50 million revolver and $100 million term loan, the proceeds of which will be used to refinance the company's existing senior secured revolver and term loan. At the same time, Moody's affirmed the company's corporate family rating at Ba3 and probability of default rating at B1. The ratings on the existing $50 million revolver and $150 million term loan were withdrawn. MARKOV CDO: Moody's Slashes Ratings on 12 Note Classes ------------------------------------------------------ Moody's Investors Service has downgraded ratings of twelve classes of notes issued by Markov CDO I, Ltd., and left on review for possible further rating action the rating of one of these classes of notes. The notes affected by today's rating action are as: Class Description: Up to $1,600,000,000 Class S Senior Floating Rate Notes due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: Up to $100,000,000 Class A-0 Senior Floating Rate Notes due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: C Class Description: $100,000,000 Class A-1 Senior Floating Rate Notes due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: C Class Description: $70,000,000 Class A-2 Senior Floating Rate Notes due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: C Class Description: $80,000,000 Class A-3 Senior Floating Rate Notes due 2047 -- Prior Rating: Aa1, on review for possible downgrade -- Current Rating: C Class Description: $70,000,000 Class B Senior Floating Rate Notes due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C Class Description: $25,000,000 Class C-1 Floating Rate Deferrable Notes due 2047 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C Class Description: $10,000,000 Class C-2 Fixed Rate Deferrable Notes due 2047 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C Class Description: $27,000,000 Class D Floating Rate Deferrable Notes due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $5,000,000 Class E Floating Rate Deferrable Notes due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $5,000,000 C Combination Notes due 2044 -- Prior Rating: Caa3, on review for possible downgrade -- Current Rating: C Class Description: $5,000,000 D Combination Notes due 2044 -- Prior Rating: Ca -- 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 Nov. 16, 2007, of an event of default caused by a failure of the Class A EOD Ratio to be greater than or equal to 100%, pursuant Section 5.1(e) of the Indenture dated May 1, 2007. This event of default is still continuing. Markov CDO I, Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS and CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral 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 the Notes to be immediately due and payable. Furthermore, according to the Trustee, a majority of the Controlling Class has directed the sale and liquidation of 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 S Notes remain on review for possible further action. MOMENTIVE PERFORMANCE: S&P Holds All Ratings and Revises Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Momentive Performance Materials Inc. to negative from stable. At the same time, S&P affirmed all its ratings on the company and its subsidiaries including the 'B' corporate credit rating. "We revised the outlook because operating income and funds from operations are below our expectations and, in view of the company's very aggressive debt leverage, we are concerned that high raw material costs and the current U.S. economic slowdown could make it difficult for Momentive to remain cash-flow positive," said Standard & Poor's credit analyst Cynthia Werneth. At Sept. 30, 2007, Momentive had $3.6 billion of debt outstanding, adjusted to include about $400 million of seller notes issued by its holding company parent and a modest amount of off-balance- sheet postretirement and operating lease obligations. Adjusted total debt to EBITDA is very aggressive near 8x. The ratings on Wilton, Connecticut-based silicones and quartz producer Momentive reflect its satisfactory business risk profile as a leading global silicones producer and its very high debt leverage following Apollo Management's December 2006 acquisition of 90% of the company from General Electric Co. for $3.9 billion. Momentive is the world's second-largest silicone producer, representing about 90% of its revenues. The remainder of revenues comes from the sale of quartz, primarily for semiconductors. Silicones are used in a wide variety of applications, including construction, transportation, personal care, electronics, and agriculture. They are generally used as an additive, providing or enhancing attributes such as resistance, lubrication, adhesion, or viscosity. Positive attributes of the silicones business are above-average industry growth rates and significant industry consolidation. Moreover, capital-intensity, technological know-how, and well-established customer relations provide meaningful entry barriers. Momentive benefits from strong diversification by customers, end markets, and regions, as well as an increasing contribution from specialty products. S&P expect profitability to remain relatively stable over business cycles but note that Momentive does not participate in the highly profitable polysilicone niche for solar energy applications, like some of its large peers. In addition, some vulnerability to volume declines is likely during periods of economic contraction or downturns in key end markets, and raw material hikes can cause margin compression. Momentive is backward-integrated into the production of siloxane, a key intermediate raw material, with a small percentage of its requirements supplied under a long-term supply agreement. However, it must purchase silicon metal from third parties. Momentive's performance has been hampered by higher costs for raw materials such as silicon metal and methanol, and to a lesser extent weak domestic construction and automotive end markets. Operating margins have slipped somewhat, although they remain in the upper-teens percentage area. Management has announced a profit improvement plan that it believes will result in $50 million to $75 million of annual cost savings from more efficient operations and purchasing. Funds from operations has been very weak, with FFO to adjusted total debt in the low-single-digit percentage area. On the positive side, working capital reductions have exceeded S&P's expectations, resulting in some free operating cash generation and reasonable liquidity. However, S&P believe the company could be challenged to continue generating positive cash flow necessary to begin to gradually reduce its heavy debt burden. MONEYGRAM INT'L: Increased Debt Cues S&P to Lower Rating on B+ -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on MoneyGram International to 'B+' from 'BB'. The company remains on CreditWatch with negative implications, where it was placed on Dec. 13, 2007. "The downgrade is driven by the significantly increased debt service that MoneyGram will have to bear if it completes its recapitalization as currently contemplated. The CreditWatch Negative listing accounts for the possibility that the deal may not be completed as currently envisioned or at all," said Standard & Poor's credit analyst Rian M. Pressman, CFA. The recapitalization would be partially financed with debt provided by affiliates of Goldman Sachs ($500 million) and other investors ($250 million). Combined with MoneyGram's existing credit agreements ($350 million), total outstanding debt could reach as much as $1.1 billion, levering the firm to what S&P believe is a 'B+' level. Per the agreement, MoneyGram is not prohibited from soliciting or discussing alternative proposals. However, given the company's weakened state, S&P believe this scenario is increasingly unlikely. Given what S&P view as MoneyGram's limited alternatives, if the recapitalization transaction does not close, the rating may be lowered by more than one notch. If the transaction closes as currently contemplated, the rating will be affirmed and the outlook changed to stable. On March 10, 2008, MoneyGram announced that it amended its recapitalization agreement with an investment group led by Thomas H. Lee Partners and Goldman Sachs. The revised agreement was necessitated by MoneyGram's failure to meet certain closing conditions attached to the original agreement, including the requirement that the company have, on a pro forma basis for the transaction, at least $150 million of unrestricted assets. The amended agreement, which was made on terms less favorable than the original agreement, contemplates that the investors will purchase $760 million of Series B and Series B-1 Preferred Stock, which will initially be convertible into approximately 79% of the common equity of the company. (The original agreement had contemplated the investment group owning 63% of the company.) The lower conversion price ($2.50 per share versus $5.00 per share in the original agreement) indicates MoneyGram's weakened balance sheet, as the company shed virtually its entire asset-backed securities portfolio at a total loss of $1.6 billion through first-quarter 2008. The company's securities portfolio is held against the payment liabilities associated with its official check/money order business. While these liabilities currently exceed the assets allocated to cover them, MoneyGram's short-term liquidity position is intact, as the proceeds from securities sales were reinvested into cash, which is available to meet payment obligations as they come due. S&P expect MoneyGram to invest the funds supplied by the investor group into short-term government securities, which will fill the funding gap and return the payment asset/obligation to equilibrium. S&P's favorable opinion of MoneyGram's core money transfer business remains unchanged. S&P continue to believe that, if levered conservatively, it would warrant an investment-grade rating. MTR GAMING: Completes Sale of Binion's Gambling to TLC Casino ------------------------------------------------------------- MTR Gaming Group Inc., after receipt of all regulatory approvals, completed the sale of the stock of Speakeasy Gaming of Fremont Inc., which owns and operates Binion's Gambling Hall & Hotel in Las Vegas, Nevada, to TLC Casino Enterprises Inc. for cash. Net proceeds to the company, after adjustments based on net working capital and certain capital expenditures for maintenance and repairs pursuant to the terms of the parties' June 26, 2007 stock purchase agreement, as amended Feb. 29, 2008, were approximately $28.2 million, exclusive of the fees and costs of the transaction. "The completion of the sale of Binion's, well as the sale of the Speedway Casino's non-gaming assets, allows MTR to focus on growing and optimizing its core assets, as we are doing at Mountaineer with the recent addition of table games and poker," Edson R. Arneault, MTR's chairman, president and CEO, stated. "We wish all of the Binion's employees well and we are confident that they and the property will do well under the leadership of TLC's Terry Caudill and his management team." As reported in the Troubled Company Reporter on June 29, 2007, MTR Gaming Group Inc. entered into a definitive agreement with TLC Casino Enterprises Inc. to sell Binion's Gambling Hall & Hotel in Las Vegas, Nevada, for $32 million in cash. About TLC Casino Enterprises Inc. TLC Casino Enterprises Inc. is controlled by Terry Caudill. The company also owns the Four Queens Hotel & Casino in Downtown Las Vegas. About MTR Gaming Headquartered in Chester, West Virginia, MTR Gaming Group Inc. (NasdaqGS:MNTG) -- http://www.mtrgaming.com/-- owns and operates the Mountaineer Race Track & Gaming Resort in Chester, West Virginia; Scioto Downs in Columbus, Ohio; the Ramada Inn and Speedway Casino in North Las Vegas, Nevada; Binion's Gambling Hall & Hotel in Las Vegas, Nevada; and holds a license to build Presque Isle Downs, a thoroughbred racetrack with pari-mutuel wagering in Erie, Pennsylvania. The company also owns a 50% interest in the North Metro Harness Initiative LLC, which has a license to construct and operate a harness racetrack and card room outside Minneapolis, Minnesota and a 90% interest in Jackson Trotting Association LLC, which operates Jackson Harness Raceway in Jackson, Michigan. * * * Moody's Investors Service placed MTR Gaming Group Inc.'s probability of default rating at 'B1' in September 2006. The rating still hold to date with a stable outlook. NANOGEN INC: Restructures $12.9 Million Senior Convertible Notes ---------------------------------------------------------------- Nanogen Inc. said Friday that it entered into agreements with the holders of its 6.25% senior convertible notes due 2010 issued on Aug. 27, 2007 to restructure the indebtedness. In the restructuring, the holders of 6.25% senior convertible notes will exchange an aggregate $12.9 million in principal amount of the old notes with the company's 9.75% senior secured convertible notes due 2010 with an aggregate principal amount of $15.5 million. The 9.75% senior convertible notes are convertible initially into an aggregate of approximately 22,784,000 shares of common stock of the company at an initial conversion price of $0.6803 per share. The terms of the 9.75% senior convertible notes provide for the mandatory payment of the principal in specified periodic installments as well upon certain asset disposition and financing transactions. The balance of the 6.25% senior convertible notes will remain outstanding, secured by a $7.0 million letter of credit. In connection with the restructuring, Nanogen will grant a collateral agent on behalf of the holders of the 9.75% senior convertible notes a security interest in substantially all of the assets of Nanogen. Upon closing of the restructuring, the conversion price of the remaining 6.25% senior convertible notes and the exercise prices of certain warrants issued in the August 2007 debt financing will be adjusted to an amount equal to $0.6803. As part of the debt restructuring, the holders of its 6.25% Senior Convertible Notes consented to potential sale of certain royalties, the consent being effective upon the consummation of the debt restructuring. Fourth Quarter Results Nanogen said that its fourth quarter net loss narrowed to $6.1 million or $0.08 per share, from $11.2 million or $0.17 per share, for the same quarter in 2006. Total revenues for the fourth quarter increased by 13% to $9.8 million from $8.7 million in the same period in 2006. Nanogen expects total 2008 revenues to increase by about 25% from 2007 levels with a gross margin of about 60%. About Nanogen San Diego, California-based Nanogen Inc. (NASDAQ: NGEN) -- http://www.nanogen.com/-- provides advanced diagnostic products. As of March 16, 2007, the company was developing several product lines that directly target specific markets within the advanced diagnostics field. Its diagnostic technologies focus on the identification of the nucleic acid sequences, gene variations and gene expressions associated with both genetic conditions and infectious diseases. Nanogen has four categories of advanced diagnostic technologies: molecular testing platforms molecular reagents point-of-care tests and advanced genetic markers. On Feb. 6, 2006, Nanogen acquired the rapid cardiac immunoassay point-of-care test business of Spectral Diagnostics Inc. The acquired products include rapid tests for levels of CKMB, Myoglobin and Troponin, all of which are frequently used in cardiac care. On May 1, 2006, it completed the acquisition of the diagnostics division of Amplimedical S.P.A. * * * Dutton Associates LLC -- http://www.jmdutton.com/-- initiated its coverage of Nanogen Inc. with a strong speculative buy rating and a 12-month price target of $1.00. The 17-page report by Dutton Associates senior analyst Wayne M. Lottinville, CFA is available at Dutton's site as well as from First Call, Bloomberg, Zacks, Reuters, and Knobias and other leading financial portals. NARRAGANSETT PELLET: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Narragansett Pellet Corp. 275 Ferris Avenue Rumford, RI 02916 Bankruptcy Case No.: 08-10699 Type of Business: The Debtor manufacture wood pellets using softwood and hardwood wood waste. Chapter 11 Petition Date: March 14, 2008 Court: District of Rhode Island (Providence) Judge: Arthur N. Votolato Debtor's Counsel: Joseph Kuchinski, Esq. Lee Blais, Esq. Blais & Parent 20 Cabot Boulevard, Suite 300 Mansfield, MA 02048 Tel: (508) 618-1280 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. NATIONAL LAMPOON: Receives Listing Non-Compliance Notice from AMEX ------------------------------------------------------------------ National Lampoon Inc. received a letter from the American Stock Exchange which indicated that the company does not meet certain of the American Stock Exchange's continued listing standards as set forth in Part 10 of the Amex company Guide. The company will provide the American Stock Exchange with a specific plan to achieve and sustain compliance with the continued listing standards by March 27, 2008, demonstrating that the company will achieve compliance by the given deadline of Aug. 27, 2008. "We have come a long way building our businesses and growing our revenues, and we are finally seeing the results of this," stated Daniel Laikin, National Lampoon chief executive officer. "We are already in the process of strengthening our balance sheet through exercise of warrants and conversion of preferred dividends and stock, along with the revenue growth from our film and online media divisions, which will all be part of the plan we submit." The company expects to submit a plan to the American Stock Exchange to regain compliance with the continued listing standards on or before March 27, 2008. Specifically, the company is not in compliance with Section 1003(a)(iv) of the company Guide because it has sustained losses which are substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the American Stock Exchange, as to whether the company will be able to continue its operations and/or meet its obligations as they mature. If the company either fails to submit a plan or if it submits a plan and the staff of the American Stock Exchange determines that the plan does not adequately address these issues, the company may be subject to delisting proceedings. Furthermore, if the plan is accepted but the company is not in compliance with the continued listing standards at the conclusion of the plan period or if it does not make progress consistent with the plan during the plan period, the staff of the American Stock Exchange will initiate delisting proceedings as appropriate. The company may always appeal the staff determination to initiate delisting proceedings. About National Lampoon Based in West Hollywood, California, National Lampoon Inc. (AMEX: NLN) -- http://www.nationallampoon.com/-- is active in an array of media and entertainment segments. These include feature films, television programming, online and interactive entertainment, home video, audio, and book publishing. The company also owns interests in all major National Lampoon properties, including National Lampoon's Animal House, the National Lampoon Vacation series and National Lampoon's Van Wilder. The company has three core operating divisions: National Lampoon Films, College Marketing Division, and National Lampoon Networks. Going Concern Doubt Weinberg & company P.A., in Los Angeles, epxressed substantial doubt about National Lampoon Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended July 31, 2007. The auditing frim pointed to the company's working capital deficiency of $7,196,255 and accumulated deficit of $41,257,284 as of July 31, 2007, and a net loss of $2,504,170 for the year ended July 31, 2007. NEO CDO: Moody's Downgrades Ratings on Eight Note Classes --------------------------------------------------------- Moody's Investors Service has downgraded ratings of eight classes of notes issued by Neo CDO 2007-1, Ltd. One of these ratings was left on review by Moody's for possible further downgrade. The notes affected by the rating actions are: Class Description: $90,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due 2053 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $90,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes due 2053 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: $15,000,000 Class A-3 Third Priority Senior Secured Floating Rate Notes due 2053 -- Prior Rating: Ca -- Current Rating: C Class Description: $52,500,000 Class B Fourth Priority Senior Secured Floating Rate Notes due 2053 -- Prior Rating: Ca -- Current Rating: C Class Description: $6,000,000 Class C Fifth Priority Senior Secured Floating Rate Notes due 2053 -- Prior Rating: Ca -- Current Rating: C Class Description: $12,000,000 Class D Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes due 2053 -- Prior Rating: Ca -- Current Rating: C Class Description: $6,000,000 Class E Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes due 2053 -- Prior Rating: Ca -- Current Rating: C Class Description: $16,500,000 Class F Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes due 2053 -- Prior Rating: Ca -- 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 Dec. 19, 2007, of an event of default caused when the Class A/B/C Overcollateralization Ratio is less than 100% on any Mesurement Date, as required under Section 5.1 (i) of the Indenture and Section 5.1 of the Terms Supplement dated April 5, 2007. Neo CDO 2007-1, Ltd is a collateralized debt obligation backed primarily by a portfolio of CDO and RMBS securities. Recent ratings downgrades on the underlying portfolio caused ratings-based haircuts to affect the calculation of overcollateralization. Thus, the ratio described above failed to meet the required level. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. 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 the Notes to be immediately due and payable and to terminate the Reinvestment Period. Furthermore, according to the Trustee, a majority of the Controlling Class has directed the Trustee to commence the process of the sale and liquidation of 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 remain on review for possible further action. NEXMED INC: Losses Cue Amper to Raise Going Concern Doubt --------------------------------------------------------- Edison, N.J.-based Amper, Politziner & Mattia PC expressed substantial doubt about the ability of NexMed 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 and negative cash flows from operations. It also expects the company to incur future losses. Nexmed posted a net loss of $8,787,228 on net revenue of $1,270,367 for the year ended Dec. 31, 2007, as compared with a net loss of $8,043,253 on net revenue of $1,866,927 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $10,672,706 in total assets, $5,867,949 in total liabilities, and $4,804,757 in stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $3,681,680 in total current assets available to pay $2,329,899 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?2939 About NexMed NexMed Inc., (NasdaqCM: NEXM) -- http://www.nexmed.com-- is a pharmaceutical and medical technology company. It designs, develops, manufactures, and markets pharmaceutical products in the United States and Hong Kong. The company is leveraging its proprietary drug technology, NexACT, to develop a pipeline of pharmaceutical products to address significant unmet medical needs. It develops transdermal treatments based on the NexACT drug delivery technology, which might enable an active drug to be better absorbed through the skin. The company also develops treatments for sexual dysfunction and nail fungus based on its proprietary NexACT drug delivery technology. Its products under development include Alprox-TD, which is an alprostadil-based cream treatment intended for patients with erectile dysfunction; and Femprox, an alprostadil-based cream product intended for the treatment of female sexual arousal disorder. The company has a licensing agreement with Novartis International Pharmaceutical, Ltd., for the development, manufacture, and commercialization of NM100060, a nail lacquer treatment for onychomycosis. NexMed was founded in 1987 and is based in East Windsor, New Jersey. NEXTMEDIA OPERATING: S&P Cuts Corp. Credit to B-; Puts Neg. Watch ----------------------------------------------------------------- Standard & Poor's Rating Services lowered its corporate credit rating on Englewood, Colorado-based NextMedia Operating Inc. to 'B-' from 'B' and placed the rating on CreditWatch with negative implications. "The rating action reflects our uncertainty regarding NextMedia's ability to obtain permanent covenant relief in the current tight credit environment," explained Standard & Poor's credit analyst Michael Altberg. As of Dec. 31, 2007, the company had a narrow margin of compliance against its 1.55x interest coverage covenant, and S&P believe the company will be in violation when this covenant tightens to 1.8x on April 1, 2008. In order to amend its credit agreement, S&P expect the company will have to either sell assets in order to pay down debt, pay considerable consent fees, or a combination of the two. Revenue and EBITDA were down 2.1% and 3.0%, respectively, for 2007, as a 1.4% increase in outdoor revenue was more than offset by a 5% decline in radio revenue. S&P are concerned about the negative secular trends facing the radio industry. Growth fundamentals in outdoor advertising remain healthy, and are not subject to the same competition that radio is from alternative media such as the Internet. S&P believe NextMedia might be required to sell assets to obtain an amendment, and are concerned about the downward pressure on resale multiples in the currently tight credit environment. In resolving the CreditWatch listing, Standard & Poor's will monitor the company's ability to amend its credit agreement and the terms of a potential amendment, including the degree of cushion under revised covenants, step-down schedules, consent fees, and potential asset sale requirements. NORTHLAKE CDO: Moody's Cuts Rating to Ca on $14.5MM Cl. III Notes ----------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for further possible downgrade these notes issued by Northlake CDO I, Limited: Class Description: $56,000,000 Class I-A Floating Rate Notes due 2033 -- Prior Rating: Aaa -- Current Rating: Baa1, on review for possible downgrade Class Description: $45,000,000 Class II Floating Rate Notes due 2038 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $14,500,000 Class III Floating Rate Notes due 2038 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca 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. NORTHWESTERN CORP: S&P Lifts Corp. Credit Rating on BBB from BB+ ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Sioux Falls, South Dakota-based NorthWestern Corp. to 'BBB' from 'BB+'. The outlook is stable. Issues secured under the company's Montana indenture were raised to 'A-' from 'BBB', with a recovery rating of '1+', and issues secured under the company's South Dakota indenture were raised to 'BBB+' from 'BBB', with a recovery rating of '1'. S&P also raised the unsecured rating on NorthWestern to 'BBB-' from 'BB-'. "The upgrade reflects a steady improvement in the company's financial profile and the paring of nonregulated operations," said Standard & Poor's credit analyst Antonio Bettinelli. The company has also shown a commitment to focus on regulated utility operations, including the important task of managing regulatory risk, and to resolve pending litigation. NorthWestern has about $834 million of debt outstanding. The ratings on NorthWestern primarily reflect its Montana electric and natural gas transmission and distribution utility with electric provider-of-last-resort obligations, a smaller vertically integrated electric and natural gas distribution utility operating in central South Dakota, gas operations in Nebraska, and an interest in Colstrip Unit 4. Financial measures have improved significantly since the company emerged from bankruptcy in 2004, and we expect adjusted cash flow coverage to remain strong over the next few years. For the year ended Dec. 31, 2007, funds from operations interest coverage was 3.7x, FFO to total debt was 22.1%, and total debt to total capital was 51.5%. S&P adjusted all ratios to reflect imputed debt adjustments for operating leases and postretirement benefit obligations. O'CHARLEY'S INC: Operating Decline Prompts S&P to Revise Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings outlook on the Nashville, Tennessee-based O'Charley's Inc. to negative from stable. "The change in outlook reflects a significant decline in operating performance in the fourth quarter of 2007 and our expectations that those trends will likely continue, given the very difficult operating environment facing casual dining restaurants," said Standard & Poor's credit analyst Charles Pinson-Rose. Standard & Poor's long-term corporate credit rating on the company is 'BB-'. However, the company's operating performance worsened in fiscal 2007 and was particularly weak in the fourth quarter. "The company's credit metrics in 2008 could deteriorate to a point where a downgrade is warranted," said Mr. Pinson-Rose. Also considered was the possibility that the company would adopt more aggressive and shareholder-friendly financial policies as a result of expanding its board and appointing representatives from Crescendo Partners, a large shareholder. However, certain covenants of the company's senior secured credit facility and subordinated notes limit the likelihood of significant debt- financed dividends or share repurchases, and thus inhibit actions that would have a material affect on the company's credit profile. OCWEN FINANCIAL: Failed Proposal Cues Fitch to Put Negative Watch ----------------------------------------------------------------- Fitch Ratings has revised these Ocwen Financial Corp.'s ratings to Rating Watch Negative from Evolving: -- Long-term IDR 'B+'; -- Short-term IDR 'B'. Fitch's rating action follows the company's announcement that it was unable to reach an agreement on a proposal by an investor group led by the company's current CEO, William Erbey, to acquire all the outstanding shares of OCN common stock. Fitch believes that the impact of this development, in of itself, is a ratings neutral event. However, the fluid state of OCNs corporate structure combined with a tougher environment for servicing subprime mortgages and challenges associated with capital markets dislocation places negative pressure on OCN's current rating. Although recent performance supports the current rating, Fitch believes that operating performance in the near term will come under pressure as higher delinquencies and foreclosures drive up servicing costs and financing servicing advances become more expensive. Longer term, the future of OCN's core business is uncertain as the demand for third-party, non-conforming servicing may significantly diminish. To resolve the Negative Rating Watch, OCN would need to increase borrowing capacity through new facilities or those servicing advance securitizations currently in the pipeline. To maintain the current rating the company would also need to demonstrate the ability to generate a reliable earnings stream and stable operating cash flow. Other external factors such as the continued legislative and regulatory scrutiny of subprime mortgage servicing are negative rating considerations. Absent resolution of these rating triggers over the first quarter of 2008, a ratings downgrade would result. OWENS-ILLINOIS: Board OKs Preferred Stock Redemption on March 31 ---------------------------------------------------------------- Owens-Illinois Inc.'s board of directors has elected to redeem its outstanding convertible preferred stock, par value $0.01. The redemption date is March 31, 2008. All of the 9,050,000 shares of convertible preferred stock will be redeemed for the common stock of the company according to the applicable certificate of designations. Preferred shareholders that choose not to convert prior to the redemption date will receive 0.9424 shares of O-I common stock in exchange for each share of convertible preferred stock owned. Preferred shareholders' conversion right will terminate at the close of business on March 28, 2008, one business day prior to the redemption date. The company will cease paying the current 4.75% annual dividend upon the redemption date. Based in Perrysburg, Ohio, Owens-Illinois Inc. (NYSE:OI) -- http://www.o-i.com/-- is a manufacturer of packaging products and glass containers with operations in Europe, North America, Asia Pacific and South America. The company is also a manufacturer of healthcare packaging, including plastic prescription containers and medical devices, and plastic closure systems, including tamper-evident caps and child-resistant closures, with operations in the United States, Mexico, Puerto Rico, Brazil, Hungary, Malaysia and Singapore. * * * As reported in the Troubled Company Reporter on Feb. 18, 2008, Standard & Poor's Ratings Services raised its ratings on Owens- Illinois Inc. by one notch, including the corporate credit rating to 'BB' from 'BB-'. The outlook is stable. PARD CONTRACTORS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Pard Contractors, Inc. P.O. Box 368 South River, NJ 08882 Bankruptcy Case No.: 08-14523 Chapter 11 Petition Date: March 14, 2008 Court: District of New Jersey (Trenton) Judge: Raymond T. Lyons Jr. Debtor's Counsel: Michael R. Speck, Esq. (yausa3@aol.com) Garces & Grabler 235 Livingston Avenue New Brunswick, NJ 08901 Tel: (732) 249-1300 Fax: (732) 745-1247 Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million The Debtor did not file a list of its largest unsecured creditors. PLACE PORTFOLIO: Reznick Group Expresses Going Concern Doubt ------------------------------------------------------------ Reznick Group, P.C., in Atlanta, Ga., raised substantial doubt about the ability of Place Portfolio Lessee, LLC, to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor reported that the company has negotiated an early termination of the lease agreement with Education Realty Operating Partnership LP, which will effectively end the company's operations. The company posted a net loss of $2,636,031 on revenues of $23,899,189 for the year ended Dec. 31, 2007, as compared with a net loss of $1,873,370 on revenues of $24,193,278 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $6,861,639 in total assets, $1,482,541 in total liabilities, and $5,379,098 in stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?293b In January 2006, Education Realty Trust Inc.'s operating partnership, Education Realty Operating Partnership LP, entered into a Lease Agreement with Place Portfolio Lessee LLC, a Georgia limited liability company, pursuant to which Place leased from the Operating Partnership a portfolio of 13 properties. About Education Realty Trust Memphis, Tenn.-based Education Realty Trust Inc., (NYSE: EDR) -- http://www.educationrealty.com-- founded in 1964, is a real estate investment trust (REIT), that acquires, owns, leases, and manages student housing communities near university campuses in the United States. As of Dec. 31, 2006, the company owned 40 student housing communities located in 17 states containing 26,019 beds in 7,953 apartment units located near 33 universities. It also provides third-party management services for student housing communities owned by educational institutions, charitable foundations, and others. It offers management services and third- party development consulting services primarily to universities seeking to modernize their on-campus student housing communities. The company qualifies as a REIT for federal income tax purposes. As a REIT it would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. About Place Portfolio Lessee Place Portfolio Lessee, LLC, is a Georgia Limited Liability Company formed Nov. 29, 2005. Place Properties, LP, is the sole member of the company. The company was formed to operate and manage 13 student-housing properties that are being leased from a third party. PLASTECH ENGINEERED: Won't Decide on Assumption of Amerigas Pact ---------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates -- as well as the Official Committee of Unsecured Creditors and Bank of America N.A. -- ask the U.S. Bankruptcy Court for the Eastern District of Michigan to deny the request of AmeriGas Propane L.P., to immediately compel the Debtors to decide on their prepetition contract for the provision of propane. Amerigas Contract AmeriGas and the Debtors are parties to a National/Regional Accounts Propane Gas Agreement dated July 10, 2006, pursuant to which AmeriGas agreed to deliver propane gas to the Debtor. The Debtor, which uses the propane gas in operating forklifts for its manufacturing operations, also rents equipment related to the storage and distribution of the propane gas. In the 45 days preceding the bankruptcy date, AmeriGas provided the Debtor goods worth $126,439. The Debtor also received a portion of the goods, valued at $64,815, in the 20 days immediately preceding the date of bankruptcy. AmeriGas adds that Plastech also has defaulted on additional payment obligations under the Agreement. AmeriGas is still owed $357,825 for goods delivered prepetition. On Feb. 19, 2008, AmeriGas sent a reclamation demand to pursuant to Section 546(c) of the U.S. Bankruptcy Code. Dianne S. Ruhlandt Esq., at Erman, Teicher, Miller, Zucker & Freedman, P.C., in Southfield, Michigan, stated that AmeriGas doubts Plastech's ability to continue honoring its contractual commitments going forward, noting of: -- the Debtor's prepetition payments defaults over three months, -- Chrysler, LLC's attempt to pull its supply with Debtors, -- Plastech's illusory postpetition financing, and -- the fact that the bankruptcy cases were initiated to avert operational crisis. In that light, Ms. Ruhlandt asked the Court to: a. compel Plastech to assume or reject the Propane Sale Agreement immediately, or in the alternative, order the Debtor to comply with the terms of the Agreement pending its decision to assume or reject, and provide satisfactory assurance in the form of: (i) prepayment of all goods provided under the Agreement postpetition; and (ii) a letter of credit with AmeriGas as beneficiary, issued by a nationally-recognized banking institution acceptable to AmeriGas, in the amount equal to the value of the goods received in the two months immediately preceding the Petition Date; b. grant it permission to reclaim the $126,439 worth reclamation goods, or any remaining portion thereof, from the Debtor; c. grant it an allowed administrative expense claim for $64,815 pursuant to Section 503(b)(9) of the Bankruptcy Code and order the payment of the claim within 10 days; and d. modify the automatic stay, to the extent necessary, to allow it to assert its rights pursuant to Section 503 and 516 of the Code and the Agreement. Based on prepetition usage, AmeriGas expects to extend about $100,000 in new credit to the Debtors every month, hence, it demands adequate assurance of payment. Ms. Ruhlandt noted that by continuing to deliver propane gas without firm assurance of payment, AmeriGas has become an involuntary, unsecured lender to Plastech and the other Debtors. By contrast, the Debtors offered their "voluntary" DIP Lenders with, inter alia, liens on all assets of the Debtors and a superpriority administrative expense claim that would come ahead of AmeriGas' postpetition claim. Plastech and BofA's Objection On behalf of Plastech, Mr. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, asserts AmeriGas is not entitled to immediate payment of administrative claims, being an unsecured creditor. He avers that granting AmeriGas immediate payment of its claim would set a precedent to numerous similar claims that would divert the Debtors' attention from the reorganization plan. BofA, the agent to the Debtors' postpetition lenders, supports the Debtors' position. Furthermore, according to Mr. Galardi, the Court-approved reclamation procedures provided for a 60-day review period within which the Debtors could evaluate pending administrative claims. It is thus premature to direct actions regarding the said requests, and such action would contravene the breathing spell afforded by Section 365 of the Bankruptcy Code, he asserts. Mr. Galardi notes the Debtors' case is complex with nine affiliated debtors, and approximately $1,200,000,000 to $1,300,000,000 in annual sales, and with thousands of creditors and parties-in-interest. The Debtors are parties to thousands of purchase orders and agreements. Thus, the Debtors are parties to hundreds, if not thousands, of executory contracts that may be subject to assumption or rejection, he points out. He notes that at the present time, the Debtors have not even had ample time to identify, much less complete, a thorough review and analysis of all such contracts. AmeriGas has failed to present just cause for the immediate assumption or rejection of its contracts, nor has it demonstrated legally cognizable damage, if its request is denied, he asserts. Committee's Objection Robert D. Gordon, Esq., at Clark Hill PLC, in Detroit, Michigan, counsel for the Committee, asserts AmeriGas failed to present justifiable cause for the Debtors to shorten statutory period to assume or reject the contract, pursuant to Section 365(d)(2) of the Bankruptcy Code. Mr. Gordon said none of the circumstances cited by AmeriGas demonstrated significant present hardship or potential harm to it, adding that, the early decision to elect to assume the contract may unnecessarily convert $293,000 of non-priority debt into administrative expense claims. Mr. Gordon also claims that AmeriGas is not entitled to the additional assurance it seeks because it did not invoke those certain provisions in the Agreement prepetition. Mr. Gordon adds that the Committee defers to the procedures already in place with respect to $126,439 of reclamation goods claimed by AmeriGas. The Committee also defers to the Debtors' proposal to reconcile and fund the administrative claims arising under Section 503(b)(9) of the Bankruptcy Code. However, AmeriGas' request for automatic stay should be denied as it is not warranted at this time of the Chapter 11 case proceedings, Mr. Gordon avers. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Robert D. Gordon, Esq., at Clark Hill PLC, in Detroit, Michigan, represents the Official Committee of Unsecured Creditors appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 11 and 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) POLY-PACIFIC INT'L: To Grant 2.5 Mil. Stock Options to Personnel ---------------------------------------------------------------- Poly-Pacific International Inc. intends to grant 2,575,000 stock options, in the aggregate, to directors, officers, employees and consultants of the company, subject to regulatory approval. The options will have an exercise price of $0.12, with a five-year term to expiry. The company also disclosed the amendment to an aggregate of 1.5 million options originally granted July 23, 2007. The exercise price has been amended from $0.325 to $0.12 and all other terms of the options remain unchanged. The amendment to the options held by consultants and employees is subject to regulatory approval and the amendment to the options held by directors and officers is subject to both regulatory and disinterested shareholder approval, to be sought at the company's next annual shareholder meeting. The amended options will not be available for exercise until all necessary approvals are obtained. The company further disclosed that effective Feb. 19,2008, a director of the company has agreed to surrender 500,000 of the options originally granted to him under the company's Stock Option Plan on July 23, 2007, at a price of $0.325. About Poly-Pacific International Inc. Based in Edmonton, Alberta, Poly-Pacific International Inc. - http://www.poly-pacific.com/-- (TSX: PMB.V)(BERLIN: AOLGDN) (OTC BB: PLYPF)(FRANKFURT: POZ) is an innovator in eco-friendly solutions to Industrial waste by-products. The company is actively pursuing the reclamation of industrial polymer fibre throughout North American landfill sites. Going Concern Doubt Collins Barrow Edmonton LLP, in Edmonton, Alberta, expressed substantial doubt about Poly-Pacific International Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2006, and 2005. The auditor pointed to the company's recurring losses from operations and net working capital deficiency. POWERMATE HOLDING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Powermate Holding Corp. 3901 Liberty Street Aurora, IL 60504 Bankruptcy Case No.: 08-10498 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Powermate Corp. 08-10499 Powermate International, Inc. 08-10500 Type of Business: The Debtors are manufacturers of portable and home standby generators, air compressors, and pressure washers. See http://www.powermate.com/ Chapter 11 Petition Date: March 17, 2008 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtors' Counsel: Kenneth J. Enos, Esq. (bankruptcy@ycst.com) Michael R. Nestor, Esq. (bankruptcy@ycst.com) Young, Conaway, Stargatt & Taylor P.O. Box 391 17th Floor, 1000 West Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 http://www.ycst.com/ Estimated Assets Estimated Debts ---------------- --------------- Powermate Holding Corp. $1 million to $50 million to $10 million $100 million Powermate Corp. $50 million to $50 million to $100 million $100 million Powermate International, $1 million to $50 million to Inc. $10 million $100 million Debtors' Consolidated List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Robin America, Inc. trade debt $4,033,856 (dquance@RobinAmerica.com) P.O. Box 94007 Chicago, IL 60690 Tel: (630) 350-8200 Fax: (630) 350-8212 http://www.RobinAmerica.com/ Sumec Machinery & Electric trade debt $2,789,852 Co., Ltd. (gaoxx@sumec.com.cn) Bank of China, Jiangsu Branch 148 Zhiong Shan Nanlu Nanjing, China 317523 Tel: 0086-25-84531736 Fax: 0086-25-84415642 http://www.sumec.com.cn/ American Honda Motor Co., Inc. trade debt $2,599,364 (philip_scheer@ahm.honda.com) 1919 Torrance Boulevard Mailstop 100-sW-5C Torrance, CA 90501 Tel: (310) 783-2279 Fax: (310) 787-3993 http://www.ahm.honda.com/ Zhejiang Xinlei Mechanical & trade debt $1,985,020 Electrical Co., Ltd. (westlife@xinlei.com) Xinlei Industrial Zone Zeguo, Wenling ZheJiang, China 31752 Tel: 86-576-642-5046 Fax: 86-576-642-5199 http://www.xinlei.com/ Tecumseh Power Co. trade debt $1,856,975 P.O. Box 905215 Charlotte, NC 28290-5215 Tel: (262) 377-2700 Fax: (920) 898-2704 Ningbo Alton Mechanical & trade debt $1,854,745 Electrical Co. (janice@nbalton.com) 16 Sunlight Road, Songjiacao Gaoqiao Town, Yinzhou District Ningbo, China Tel: 86-574-8808-7020 Fax: 86-574-2885-6919 http://www.nbalton.com/ Sumec Hardware & Tools Co., trade debt $1,782,029 Ltd. (zhuyongqian@sumec.com.cn) 198 Changjiang Road Nanjing, China 210018 Tel: 86-25-84531622 Fax: 86-25-84518954 http://www.sumec.com.cn/ A.O. Smith Corp. trade debt $1,484,317 (Nancy.Penkal@aosepc.com) P.O. Box 74440 Cleveland, OH 44194-4440 Tel: (800) 765-5277 Fax: (937) 667-5030 http://www.aosepc.com/ Chongqing Senci Electric Co. trade debt $1,290,465 (shirleyxgl@163.com) No. 80 Zaojiaobao, Tianshengqiao Beibei, Chonqing, China Tel: 86-23-6825667 Fax: 86-23-86025186 Zhejiang Rongpeng Air Tools trade debt $847,763 Co., Ltd. (Doristu@rongpeng.com) Zinlei Industrial Zone Zeguo, Wenling Zhejiang, China Tel: 86-576-82533820 Fax: 86-576-82454239 http://www.rongpeng.com/ Briggs & Stratton Corp. trade debt $798,859 (Voecks.Beth@basco.com) P.O. Box 689309 Milwaukee, WI 53268-9309 Tel: (414) 259-5521 Fax: (414) 256-5172 http://www.basco.com/ Werner Value Ad trade debt $789,839 (pspaccarotella@wernervas.com) 39365 Treasury Center Chicago, IL 60694-9300 Tel: (800) 228-2240, (ext.) 2062 Fax: (402) 894-3887 http://www.wernervas.com/ RAO Manufacturing Co. trade debt $774,148 (donald.olsen@raomfg.com) SDS-12-2615 P.O. Box 86 Minneapolis, MN 55486-2615 Tel: (763) 586-3609 Fax: (763) 571-3666 http://www.raomfg.com/ Coleman Co. trade debt $619,936 (RHughes@coleman.com) Dept. Ch. 10749 Palatine, IL 60055-0749 Tel: (620) 665-3667 Fax: (620) 665-8025 http://www.coleman.com/ Bennett Packaging trade debt $608,837 (Jamie.Martino@bpkc.com) P.O. Box 411145 Kansas City, MO 64141-1145 Tel: (816) 447-9235 Fax: (816) 379-5013 http://www.bpkc.com/ Blow Molded Specialties, Inc. trade debt $504,216 (Lesley.Winkelman@blowmolded.com) EB #141 P.O. Box 1691 Minneapolis, MN 55480-1691 Tel: (320) 968-5501 Fax: (320) 968-7343 http://www.blowmolded.com/ Olympic Steel, Inc. trade debt $483,855 (KThein@olysteel.com) 5246 Paysphere Circle Chicago, IL 60674 Tel: (763) 542-4886 Fax: (763) 542-4884 http://www.olysteel.com/ Marsh Miami trade debt $368,179 (Shari.L.Frank@marsh.com) P.O. Box 281404 Atlanta, GA 30384 Tel: (954) 838-3557 Fax: (954) 838-3700 http://www.marsh.com/ REA Magnet Wire Co., Inc. trade debt $358,968 (doetting@reawire.com) Department 6048 Carol Stream, IL 60122-6048 Tel: (260) 421-7303 Fax: (260) 422-1667 http://www.reawire.com/ Imperial Plastics, Inc. trade debt $325,213 P.O. Box 907 Lakeville, MN 55044 Tel: (800) 456-1299 Fax: (952) 469-4724 PRB ENERGY: May Employ Faegre Benson as Special Corporate Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Colorado granted PRB Energy Inc. and its debtor-affiliates permission to employ Faegre & Benson LLP as their special corporate counsel, nunc pro tunc to March 5, 2008. As the Debtors' special corporate counsel, Faegre & Benson is expected to: a) advise and assist the Debtors in fulfilling their corporate duties and obligations under applicable law; b) assist and advise the Debtors from a corporate prospective regarding any proposed transfers or sales of the Debtors assets or businesses; c) perform such other regular and necessary corporate matters such as the preparation of routine contractual agreements, preparation of board and committee minutes, preparation of employee benefit plans, preparation of creditor leases, and other public disclosures and other routine matters in the firm's capacity as special corporate counsel to the Debtors; and d) provide assistance and advice to the Debtors on matters of oil and gas and law relating to the petroleum based assets and businesses operated by the Debtors. Douglas R. Wright, a partner with Faegre & Benson, assured the Court that the firm does not hold or represent any interest adverse to the Debtors and their estates, and that the firm is a "disinterested person as such term is defined under Sec. 101(14) of the bankruptcy code. As compensation for their services, Faegre & Benson's professionals bill: Professionals Hourly Rate ------------- ----------- Douglas A. Wright, Esq. $480 Other partners $345-$645 Associates $190-$415 Paralegals $130-$280 Mr. Wright can be reached at: Douglas R. Wright, Esq. Faegre & Benson LLP 3200 Wells Fargo Center 1700 Lincoln Street Denver, CO 80203 Tel: (303) 607-3500 Fax: (303) 607-3600 email: Dwright@faegre.com About PRB Energy Headquartered in Denver, PRB Energy, Inc., formerly PRB Gas Transportation Inc., -- http://www.prbenergy.com/-- operates as independent energy companies engaged in the acquisition, exploitation, development and production of natural gas and oil. In addition, the company and its affiliates provide gas gathering, processing and compression services for properties it operates and for third-party producers. They conduct business activities in Wyoming, Colorado and Nebraska. The Debtor filed for chapter 11 protection on March 5, 2008 (Bankr. D. Co. Case No. 08-12658) together with two affiliates, PRB Oil & Gas Inc. (Case No. 08-12661) and PRB Gathering Inc. (08- 12663). James T. Markus, Esq., at Block, Markus & Williams LLC represents the Debtors in their restructuring efforts. The Debtors listed assets between $50 million and $100 million and liabilities between $10 million and $50 million. They owe at least $1 million each to four unsecured creditors. PRC LLC: Court Fixes May 1 as General Claims Bar Date ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York established May 1, 2008, at 5:00 p.m., as the deadline for creditors to file proofs of claim that arose before the bankruptcy filing against PRC LLC and its debtor-affiliates. In addition, the Court fixed July 21, 2008, as the deadline for governmental units to file proofs of claim. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Has Until April 1 to File Disclosure Statement ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York established April 1, 2008, as the date by which PRC LLC and its debtor-affiliates must file a disclosure statement with respect to their Joint Plan of Reorganization. The Debtors initially asked the Court to set March 13, 2008 as the deadline for filing their disclosure statement. The Debtors filed their Joint Plan of Reorganization on Feb. 12, 2008. Since then, the Debtors consulted with their secured lenders and the Official Committee of Unsecured Creditors to determine if the concerns of unsecured creditors about the Reorganization Plan can be resolved consensually. "In light of these discussions, the Debtors determined that a 20- day extension of the time to file a disclosure statement is warranted in order to garner additional support for the proposed Reorganization Plan from unsecured creditors," Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in Houston, Texas, said. Hence, the Debtors filed a supplemental request to extend the proposed deadline to April 1. In connection with the adjusted schedule, the Debtors anticipate seeking approval of the disclosure statement at a hearing on May 8, 2008, and confirmation of the Reorganization Plan at a hearing on June 19, 2008. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Can Employ Weil Gotshal as Bankruptcy Counsel ------------------------------------------------------ PRC LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Weil, Gotshal & Manges LLP, as their primary bankruptcy counsel. Weil Gotshal is expected to: a. take all actions to protect and preserve the Debtors' estates; b. prepare legal documents on behalf of the Debtors; c. take necessary or appropriate actions in connection with a plan or plans of reorganization, disclosure statement and related documents; and d. provide other necessary legal services in connection with the prosecution of the bankruptcy cases. Weil Gotshal will be paid on an hourly basis and be reimbursed for the expenses it may incur for any related works undertaken. The firm's hourly rates range from $155 to $950, depending upon the level of seniority and expertise of the lawyer or paralegal involved. The firm also received a retainer fee and an advance against expenses for $2,022,780. Alfredo R. Perez, Esq., at Weil Gotshal & Manges, LLP, in Houston, Texas, assured the Court that the firm does not have any connection with any of the Debtors or parties-in-interest. He added that Weil Gotshal is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Wants to Employ Regis McElhatton as CEO ------------------------------------------------ PRC LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Regis McElhatton as their chief executive officer effective as of the date of bankruptcy. The Debtors assert that Mr. McElhatton's employment is critical to their efforts to effectively reorganize and emerge from bankruptcy. Mr. McElhatton brings a 40-year background in banking and financial services to the Debtors, Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in Houston, Texas, informs the Court. Mr. Perez relates that Mr. McElhatton spent 10 1/2 years at MasterCard Worldwide, as President of Global Technology and Operations and Senior Executive Vice President. Prior to that, he spent seven years as President of Payment Systems Technology and Consulting, a global payments consulting company in the United Kingdom. He has also held various executive management positions at banking institutions in the United States. Moreover, before the bankruptcy filing, Mr. McElhatton served as Debtor PRC LLC's consultant under a Consulting Services Agreement dated March 27, 2007. Simultaneously, Mr. McElhatton served as chief executive officer of PRC from Aug. 13, 2007 through the date of bankruptcy. He also serves as the Vice-Chair of the Board of Managers for Debtor Panther/DCP Holdings, LLC. As CEO for PRC, Mr. McElhatton has worked closely with other members of the Debtors' management, creditors, other professionals and advisors in exploring various restructuring alternatives and otherwise assisting the Debtors during these cases, Mr. Perez relates. "If the Debtors were required to hire another person to serve as CEO in connection with these cases, the Debtors, their estates and all parties-in-interest would be unduly prejudiced by the loss of Mr. McElhatton's familiarization with the intricacies of the Debtors' business operations and restructuring efforts," Mr. Perez says. In light of these, the Debtors and Mr. McElhatton entered into an employment agreement on Jan. 23, 2008. The Employment Agreement provides, among other things, that: (1) Mr. McElhatton will serve as chief executive officer of PRC from Jan. 23, 2008, through Jan. 23, 2009; (2) Mr. McElhatton is entitled to avail of the benefits provided under PRC's employee benefit plans or programs for its senior executives; (3) Mr. McElhatton is not entitled to any fee for serving in Panther/DCP Holdings' Board of Managers; (4) PRC has the right to terminate the employment upon 30 days' notice; and (5) Mr. McElhatton may terminate his employment for good reason within 30 days after the occurrence of a change of control, consummation of a Chapter 11 plan, a material breach of the employment agreement by PRC, among others. In exchange for his services, Mr. McElhatton will be entitled for receive a $75,000 monthly salary and will be reimbursed for the expenses he may incur in discharging his duties. Mr. McElhatton will also be entitled to a bonus of between: (i) 0% to 125% of a target Client Retention Incentive Bonus of $100,000; (ii) 0% to 110% of a target Exit Incentive Bonus of $100,000; and (iii) 0% to 100% of a target Restructuring Incentive Bonus of $100,000. Moreover, PRC agrees to indemnify Mr. McElhatton under the terms of the company's operating agreement and directors and senior officers' liability insurance. A full-text copy of the McElhatton Employment Agreement is available for free at: http://researcharchives.com/t/s?2934 About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PREMIER PROPERTIES: Faces $80 Mil. Foreclosure Case vs. Wachovia ---------------------------------------------------------------- Premier Properties USA is facing an $80 million foreclosure suit filed by Wachovia Bank with the Butler County Common Pleas Court late last month, Mike Boyer writes for The Enquirer. In January 2008, Wachovia declared Premier in default of a construction loan related to Premier's Bridgewater Falls Shopping Center in Hamilton, Ohio, and sought immediate payment, Enquirer relates. Enquirer notes that Wachovia's court filing alleged Premier as insolvent or in the verge of insolvency. Wachovia asserted that at least $718,000 mechanic liens have been filed against the property by the end of February 2008, Enquirer reports. According to Enquirer, this is the second foreclosure suit filed by Wachovia, citing Indianapolis Business Journal's report stating Wachovia's foreclosure suit on a $10 million debt involving Premier's shopping mall in Plainfield, Indiana. Despite the default notice and the foreclosure cases, Bridgwater Falls remains current in its taxes paid to Butler County, Enquirer says, citing the Treasurer's Office. Based on the report, Premier CEO Christopher White pointed to the crisis in the financial market as the main reason for the default. He told Enquirer that his company is negotiating with another financial firm regarding repayment of the loan issued in 2006. He added that if talks with this firm succeeds, the foreclosure case against Wachovia will be dismissed and the loan will either be refinanced or its term extended, Enquirer reveals. CB Richard Ellis is appointed receiver of the Bridgewater project as the case await an April 1, 2008 hearing, says Enquirer. According to Norman Bertke of CB Richard Ellis, Bridgwater Fall's business, specifically its lease operation, isn't affected by the foreclosure suit, Enquirer relates. Enquirer says Fairfield Township Administrator Mike Rahall commented that Bridgwater Falls' demise "hasn't changed anything" citing the plan of steakhouse chain operator, Logan's Roadhouse, to put up a branch in the area. About Premier Properties Indianapolis-based Premier Properties USA -- http://www.ppusa.com/ -- is founded in 1993 and holds about $1 billion in real estate projects that are currently under development. Premier is the developer of Bridgwater Falls Shopping Center, -- http://www.shopbridgewaterfalls.com/-- a 635,000-square-foot, open-air "power village" center off Ohio Bypass 4 and Princeton Road in Hamilton, Ohio. Target, Dicks Sporting Goods, JCPenney, Best Buy, Old Navy, TJ Maxx, Bed Bath & Beyond, Books-A-Million, Michaels and PetSmart are some of Bridwater Falls' tenants. Additionally, the village at Bridgewater Falls, further enhances the center's draw with fashion shops, restaurants and entertainment features. PROTECTED VEHICLES: Creditors Committee Wants McNair PA as Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in Protected Vehicles Inc.'s bankruptcy case seeks authority from the U.S. Bankruptcy Court for the District of Southern Carolina to employ McNair Law Firm, P.A., as its counsel. McNair is expected to: a) advise the Committee of its rights, powers and duties; b) assist in the investigation of the acts, conduct, assets, liabilities and financial condition of the Debtor, the operation of the Debtor's businesses and any other matters relevant to the case or to the formulation of a plan of reorganization or liquidation; c) prepare, on behalf of the Committee, all necessary and appropriate applications, motions, pleadings, draft orders, notices, schedules, and other documents, and reviewing all financial and other reports to be filed in this Chapter 11 case; d) advise the Committee concerning, and preparing responses to, applications, motions, pleadings, notices and other papers that may be filed and served in this Chapter 11 case; and e) perform all other legal services for and on behalf of the Committee that may be necessary or appropriate in the administration of this case. Russell A. Dallas, Chairman of the Committee, discloses the law firm's billing rates: Primary Counsels Hourly Rate ---------------- ----------- Michael M. Beal $350 Robin Curtis Stanton $295 Elizabeth J. Philp $285 Michael H. Weaver $195 Professionals Hourly Rate ------------- ----------- Shareholders and Counsel $400 - $225 Associates $275 - $125 Paraprofessionals $125 - $95 Mr. Dallas assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Contact: McNair Law Firm P.A. 1301 Gervais Street Columbia, SC 29201 Telephone (803) 799 9800 Fax (803) 799 9804 North Charleston, South Carolina-based Protected Vehicles Inc. aka PVI -- http://www.protectedvehicles.com/-- founded in 2005, designs and manufactures ballistic and blast protected vehicles using technology derived from Rhodesian and South African vehicle development programs. The Debtor filed for chapter 11 protection on Feb. 5, 2008 (Bankr. D.S.C. Case No. 08-00783). G. William McCarthy, Jr., Esq., at McCarthy Law Firm LLC represents the Debtor in its restructuring efforts. Its largest unsecured creditor is the United States Marine Corps with $15,801,765 of claim. In February 2008, the Debtor listed assets of $24 million and debts of $54.1 million. PROTECTED VEHICLES: Wants Gibbs and Holmes as Special Counsel ------------------------------------------------------------- Protected Vehicles Inc. seeks permission from the U.S. Bankruptcy Court for the District of South Carolina to employ Gibbs and Holmes Law Firm LLC as its special counsel. The Debtor tells the Court that it wishes to employ the firm as special counsel for labor and employment related matters, including pending litigation before the Court involving claims under the Worker Notification and Retraining Act and for continuing representation of the defendants in the matter of Force Protection Industries, Inc. v. Protected Vehicles, Inc., et al., Civil Action No. 2-07-2895-PMD, District of South Carolina, Charleston Division, pursuant to 11 U.S.C. Section 327(a). Allan R. Holmes, Esq., at Gibbs & Holmes will primarily represent the Debtor. Mr. Holmes' hourly rate is $300. The firm bills at $200 per hour for work performed by associates. Mr. Holmes assures the Court that the firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Holmes can be reached at: Gibbs & Holmes Law Firm LLC 171 Church Street, Suite 110 P.O. Box 938 Charleston, South Carolina 29402-0938 Telephone (843) 722-0033 North Charleston, South Carolina-based Protected Vehicles Inc. aka PVI -- http://www.protectedvehicles.com/-- founded in 2005, designs and manufactures ballistic and blast protected vehicles using technology derived from Rhodesian and South African vehicle development programs. The Debtor filed for chapter 11 protection on Feb. 5, 2008 (Bankr. D.S.C. Case No. 08-00783). G. William McCarthy, Jr., Esq., at McCarthy Law Firm LLC represents the Debtor in its restructuring efforts. Its largest unsecured creditor is the United States Marine Corps with $15,801,765 of claim. In February 2008, the Debtor listed assets of $24 million and debts of $54.1 million. QUAKER FABRIC: Wants Civil Action Removal Deadline Set on June 11 ----------------------------------------------------------------- Quaker Fabric Corp. and its debtor-affiliate ask the U.S. Bankruptcy Court for the District of Delaware to extend, until June 11, 2008, the period wherein the Debtors may file notices of removal with respect to civil actions pending as of the date of bankruptcy. The Court scheduled a hearing on the Debtor's request on April 15, 2008, at 11:00 a.m. The Debtors said that they need an extension of time to remove the prepetition civil actions. The Debtors have not yet been able to comprehensively evaluate the potential need to remove any of the actions since they have focused on the transition into Chapter 11, as well as the sale of substantially all of their assets. About Quaker Fabric Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- designs, manufactures, and markets woven upholstery fabrics primarily for residential furniture manufacturers and jobbers. It also develops and manufactures specialty yarns, including chenille, taslan, and spun products for use in the production of its fabrics, as well as for sale to distributors of craft yarns, and manufacturers of homefurnishings and other products. The company is one of the largest producers of Jacquard upholstery fabrics. Quaker Fabric sells its products through sales representatives andindependent commissioned sales agents in the United States, Canada, Mexico, and internationally. The company and its affiliate, Quaker Fabric Corporation of Fall River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D. Del. Case No. 07-11146). John D. Sigel, Esq. at Wilmer Cutler Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor LLP are co-counsels to the Debtors. Epiq Bankruptcy Solutions is the Debtors' claims agent. The Official Committee of Unsecured Creditors has selected Shumaker, Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch, Friedlander, Coplan & Aronoff, LLP, as co-counsel. The Debtors' schedules reflect total assets of $41,375,191 and total liabilities of $54,435,354. RESOURCE REAL: Fitch Holds 'B' Rating on $28.7MM Class M Certs. --------------------------------------------------------------- Fitch Ratings has affirmed these classes of Resource Real Estate Funding CDO 2007-1, Ltd./LLC floating and fixed rate notes: -- $180,000,000 class A-1 at 'AAA'; -- $50,000,000 class A-1R at 'AAA'; -- $57,500,000 class A-2 at 'AAA'; -- $22,500,000 class B at 'AA+'; -- $7,000,000 class C at 'AA'; -- $26,750,000 class D at 'AA-'; -- $11,875,000 class E at 'A+'; -- $11,875,000 class F at 'A'; -- $11,250,000 class G at 'A-'; -- $11,250,000 class H at 'BBB+'; -- $11,250,000 class J at 'BBB'; -- $10,000,000 class K at 'BBB-'; -- $18,750,00,000 class L at 'BB'; -- $28,750,000 class M at 'B'. Deal Summary: Resource Real Estate Funding CDO 2007-1, Ltd./LLC is a $500 million revolving commercial real estate collateralized debt obligation that closed on June 26, 2007. As of the Feb. 19, 2008 trustee report and based on Fitch categorizations, the CDO was substantially invested as: commercial mortgage whole loans/A-notes (69.0%), B-notes (13.6%), CMBS (8.8%), commercial real estate mezzanine loans (8.2%), and cash (0.4%). The CDO is also permitted to invest in real estate bank loans and REIT debt. As of Feb. 19, 2008, $19.9 million had been advanced from the A-1R class with $30.1 million remaining. The portfolio is selected and monitored by Resource Real Estate, Inc., a subsidiary of Resource America, Inc. Resource Real Estate Funding CDO 2007-1, Ltd./LLC has a five-year reinvestment period during which, if all reinvestment criteria are satisfied, principal proceeds may be used to invest in substitute collateral. The reinvestment period ends in June 2012. The CDO's poolwide expected loss covenant varies depending on the in-place weighted average spread. Asset Manager: Resource Real Estate Inc. originates, acquires, invests in, and manages a diversified portfolio of commercial real estate loans and securities, including whole loans, B notes, mezzanine loans, and commercial mortgage-backed securities investments on behalf of Resource Capital Corp., an externally managed real estate investment trust. RRE has $1.5 billion of assets under management. RRE's business lines also include the resolution of a portfolio of one-off restructured commercial mortgages acquired between 1991 and 1998; the sponsorships of private equity funds that invest in stable multifamily properties on a nationwide basis; and the structuring and management of tenant-in-common investment interests in real property. RRE is a wholly owned subsidiary of Resource America, Inc. RAI is a publicly traded specialized asset management company managing $16.8 billion as of June 30, 2007. This includes 31 collateralized debt obligations within its core competency sectors -- financial institutions, real estate, asset-backed securities, syndicated loans, and leasing. Performance Summary: RRE 07-1 became effective on Feb. 19, 2008. The portfolio is comprised of 91.2% commercial real estate loans and 8.8% rated securities. Since closing, five CMBS bonds and four CRE loans have been added, while no collateral has been paid off or removed. The weighted average expected loss of the CREL assets alone worsened slightly to 28.125% from 26.375%. The negative migration can be attributed to the increased expected losses on three Fitch loans of concern detailed below and the addition of four larger than average loans (16.5% of the portfolio) which reduced the diversity of the pool. The weighted average Fitch stressed debt service coverage ratio for the CREL portfolio is 0.93 times while the weighted average Fitch stressed loan to value is 125.5%. It should be noted that many of the loans with low DSCRs are income producing properties structured with interest reserves, which cover an average of 16 months of debt service payments. The higher weighted average expected loss of the CREL is attributed to the three Fitch loans of concern. The pool consists of two multifamily portfolios (6.22% of the portfolio) totaling 11 properties sponsored by affiliates of the Lembi Group, which owns an estimated 8,200 units in over 300 properties in the San Francisco, California market. Recent reports have indicated that the Lembi Group is seeking to reduce short term debt by offering for sale 18 of its properties. Based on recent portfolio performance information, Fitch reduced stabilized cash flow expectations on several properties. Fitch further increased the expected losses on these loans in its model to account for the uncertainty in the overall marketplace. The third loan of concern is a condominium conversion loan (2.98% of the portfolio) located in Santa Monica, California. Due to a backlog at the city level in receiving the final condominium map, the project has been delayed. Although the project has now received all necessary approvals, the sponsor is still behind schedule in its business plan. Debt service is being covered out of pocket by the sponsor who has provided a full recourse guaranty. Fitch increased the expected loss on this loan to account for the project's delay and an overall weakening in the condominium market. The weighted average spread has decreased slightly since close to 2.51% from 2.55% and the weighted average coupon has also decreased slightly to 7.28% from 7.39%. Additionally, the overcollateralization and interest coverage ratios of all classes have remained above their covenants, as of the Feb. 19, 2008 effective date trustee report. Fitch is currently reviewing its core CDO modeling assumptions and methodology; changes to the methodology may impact the ratings of all CDOs collateralized by structured finance assets. As such, Fitch is unable to determine the expected loss output for the 8.8% of the transaction comprised of rated securities, and thus cannot conclude the CDO's poolwide expected loss at this time. Investors should be aware that the final methodology may lead to a diminished reinvestment cushion. Collateral Analysis: Per the Feb. 19, 2008 trustee report and based on Fitch categorizations, the CDO is within all its property type covenants. Multifamily loans comprise the highest concentration at 23.7%. The CDO is also within all its geographic covenants with California representing the highest concentration at 26.3%. Since close, the pool has migrated towards whole loans (to 69.0% from 57.5%) and CMBS (to 8.8% from 7.6%). Generally, Fitch loan to value ratios have increased 6.4% on average, based on Fitch stressed net cash flows, across all loan types. The Fitch Loan Diversity Index has worsened to 343 from of 337 at close due to the addition of large assets. This LDI score still represents average diversity as compared to other CRE CDOs and the LDI is slightly below the covenant of 345. Rating Definitions: The ratings of the A-1 and A-1R notes (together, the class A notes) and B notes address the likelihood that investors will receive full and timely payments of interest, per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the C, D, E, F, G, H, J, K, Land M notes address the likelihood that investors will receive ultimate interest payments, as well as the aggregate outstanding amount of principal, by the stated maturity date, per the governing documents. Upgrades during the reinvestment period are unlikely given the pool could still migrate to the PEL covenant. The Fitch PEL is a measure of the hypothetical loss inherent in the pool at the 'AA' stress environment before taking into account the structural features of the CDO liabilities. Fitch PEL encompasses all loan, property, and poolwide characteristics modeled by Fitch. SABINE PASS: S&P Affirms 'BB' Rating with Stable Outlook -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' ratings on Sabine Pass LNG L.P. following its annual review. The recovery rating is '5'. The outlook is stable. The company had about $2.03 billion of total debt outstanding as of December 2007. Sabine Pass, an indirectly owned, 100% subsidiary of Cheniere Energy Inc. (B/Stable/--), the Houston-based liquefied natural gas project developer, consists of a 4 billion cubic feet/day regasification terminal currently under construction. Phase I construction is on schedule, even though Hurricane Rita caused a delay. As of January 2008, Phase I detailed engineering was fully complete and overall construction was 95% complete. The budgeted cost to build Phase I and Phase II is approximately $1.51 billion as of January 2008, up slightly from the November 2006 estimate of about $1.46 billion, due mainly to change orders for an additional train of ambient air vaporizers for Phase II and costs associated with cooling down Phase I. Construction on Phase II is also progressing as scheduled, with the project 59% complete as of January 2008. "The stable outlook reflects expectations for completion of the project, with Phase I 95% complete, although additional debt of $200 million, if necessary, is factored into the rating," said Standard & Poor's credit analyst William Ferara. Further cost overruns, whether funded by equity or a modified note indenture, could result in a lower rating. The 'BB' rating is fully reflective of Sabine Pass' current stand-alone creditworthiness. No upside exists before operations successfully begin at Sabine Pass, as well as the need to establish a reasonable operating track record, even if we raised the rating on Cheniere Energy for other reasons. S&P could lower the rating if the rating on Cheniere Energy is lowered, in which case the rating on Sabine Pass would also be lowered to maintain a no more than three-notch rating differential between the two entities. SALEM COMMS: Had Net Loss of $1.4MM for Qrtr. Ended Dec. 31, 2007 ----------------------------------------------------------------- Salem Communications Corp. filed, in a 10-K filing with the U.S. Securities and Exchange Commission, its financial statements for the quarter and year ended Dec. 31, 2007. The company had a net income of $5.9 million on total revenue of $231.7 million for the year ended Dec. 31, 2007, compared to a net income of $19.4 million on $225.7 million of total revenue on Dec. 31, 2006. The company also had a net loss of $1.4 million on total revenue of $59.1 million in Dec. 31, 2007, compared to $3.2 million of net income on total revenue of $59.2 million in the same prior year period. For the quarter ended Dec. 31, 2007 compared to the quarter ended Dec. 31, 2006: -- Total revenue decreased 0.2% to $59.1 million from $59.2 million; -- Operating income decreased 28.8% to $7.1 million from $10.0 million; -- Net income decreased to $0.2 million from $3.3 million. For the year ended Dec. 31, 2007 compared to the year ended Dec. 31, 2006: -- Total revenue increased 2.7% to $231.7 million from $225.7 million; -- Operating income decreased 31.1% to $39.8 million from $57.7 million; -- Net income decreased to $8.2 million from $19.0 million. Salem Communications had total assets of $679.7 million, total liabilities of $446.6 million, and a stockholders' equity of $233.1 million for the year ended Dec. 31, 2007, compared to $686.2 million in total assets, $448.5 million in total liabilities, and $237.7 million in stockholders' equity on Dec. 31, 2006. As of Dec. 31, 2007, the company had net debt of $353.8 million and was in compliance with the covenants of its credit facilities and bond indentures. The company's bank leverage ratio was 6.0 versus a compliance covenant of 6.25 and its bond leverage ratio was 5.1 versus a compliance covenant of 7.0. Acquisitions and Divestitures The company disclosed the following transactions that are currently pending: * KKSN (910 AM) in Portland, Oregon will be acquired for approximately $4.5 million (this station is operated by Salem under a local marketing agreement that began on Feb. 1, 2007 with the call letters KTRO); * WTPS (1080 AM) in Miami, Florida will be acquired for approximately $12.3 million (this station is operated by Salem under a local marketing agreement that began on Oct. 18, 2007 with the call letters WMCU); * KTEK (1110 AM) in Houston, Texas will be sold for approximately $7.8 million (this station is operated by the buyer under a time brokerage agreement that began on Nov. 29, 2007); * WHKZ (1440 AM) in Warren, Ohio will be sold for approximately $0.6 million; * WRRD (540 AM) in Milwaukee, Wisconsin, will be sold for approximately $3.8 million (this station is operated by the buyer under a local marketing agreement that began on Feb. 14, 2008); and * WFZH (105.3 FM) in Milwaukee, Wisconsin, will be sold for approximately $8.1 million (this station is operated by the buyer under a local marketing agreement that began on Feb. 15, 2008). On Feb. 7, 2007, the company sold WKNR (850 AM) in Cleveland, Ohio. It discontinued operating this radio station under a local marketing agreement effective Dec. 1, 2006. For the quarter ended Dec. 31, 2007, this station did not generate any revenue or profit. For the comparable 2006 period, the station generated net broadcasting revenue of $0.4 million and generated no profit. First Quarter 2008 Outlook The company has elected to discontinue the practice of providing specific quarterly revenue, SOI and earnings per share guidance. Going forward, Salem will provide a quarterly range for total revenue and operating expenses. Accordingly, for the first quarter of 2008, Salem is projecting total revenue to decrease in the low-single digit range over first quarter 2007 total revenue of $55.2 million. Salem is also projecting operating expenses before gain or loss on disposal of assets to increase in the low- to-mid-single digit range over first quarter of 2007 operating expenses of $46.7 million. This increase is primarily the result of increased investment in the company's non-broadcast business. About Salem Communications Based in Camarillo, California, Salem Communications Corporation -- http://www.salem.cc/-- is a radiobroadcasting company focused on Christian and family-themed programming. In addition to its radio properties, Salem owns Salem Radio Network(R), which syndicates talk, news and music programming to about 1,900 affiliates; Salem Radio Representatives(TM), a national radio advertising sales force; Salem Web Network(TM), an Internet provider of Christian content and online streaming; and Salem Publishing(TM), a publisher of Christian-themed magazines. * * * Salem Communications Holding Corporation carries Moody's Investors Service's Ba3 corporate family rating. At the same time, the company's 7-3/4% senior subordinated notes due 2010 also carry the rating agency's B2 probability-of-default rating and attached a loss-given-default rating of LGD5, 88%. SANDRIDGE ENERGY: S&P Outlook Positive; 'B' Rating Affirmed ----------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on oil and gas exploration and production company SandRidge Energy Inc. to positive from stable and affirmed its ratings, including the 'B' corporate credit rating, on the company. "The positive outlook reflects the company's increased proved reserve base and production levels and strong 2007 finding and development costs, and our greater level of confidence surrounding future drilling prospects in the Pinon Field," said Standard & Poor's credit analyst David Lundberg. As of Dec. 31, 2007, Oklahoma City, Oklahoma-based SandRidge had $1.1 billion in debt. The ratings on SandRidge Energy Inc. reflect its highly leveraged financial profile, geographic concentration in the Pinon Field in West Texas, and the E&P industry's highly cyclical and capital- intensive nature. These weaknesses are only partially offset by SandRidge's good internal growth prospects, competitive finding and development costs, and experienced management team. SCO GROUP: Bankruptcy Court Sets April 21 as Claims Bar Date ------------------------------------------------------------ The United States Bankruptcy Court for the District of Delaware established April 21, 2008, as deadline for creditors of The SCO Group Inc. and its debtor-affiliates to file proofs of claim. All entities, including governmental units, which assert any prepetition claims against the Debtors, must deliver proofs of claim with Epiq Bankruptcy Solutions, LLC, the claims, noticing and balloting agent of these Chapter 11 cases. Original proofs of claims must submitted no later than 4:00 p.m., Eastern Time, at: The SCO Group Inc. c/o Epiq Bankruptcy Solutions LLC FDR Station P.O. Box 5012 New York, NY 10150-5012 Headquartered in Lindon, Utah, The SCO Group Inc. (Nasdaq: SCOX) fka Caldera International Inc. -- http://www.sco.com/-- provides software technology for distributed, embedded and network-based systems, offering SCO OpenServer for small to medium business and UnixWare for enterprise applications and digital network services. The company has office locations in Australia, Austria, Argentina, Brazil, China, Japan, Poland, Russia, the United Kingdom, among others. The company and its affiliate, SCO Operations Inc., filed for Chapter 11 protection on Sept. 14, 2007, (Bankr. D. Del. Lead Case No. 07-11337). Epiq Bankruptcy Solutions, LLC, acts as the Debtors' claims and noticing agent. The United States Trustee failed to form an Official Committee of Unsecured Creditors in these cases due to insufficient response from creditors. The Debtors' exclusive period to file a chapter 11 plan expires on March 12, 2008. The Debtors' schedules of assets and liabilities showed total assets of US$9,549,519 and total liabilities of US$3,018,489. The Debtors exclusive period to file a Chapter 11 plan expires on May 11, 2008. SECURITY CAPITAL: Restructuring Plan Mulls Termination of New Biz ----------------------------------------------------------------- Security Capital Assurance Ltd. provided updates on its current strategic options and plan. As reported in the Troubled Company Reporter on March 4, 2008, the company is working with its financial advisor, Goldman Sachs & Co. It also engaged Rothschild Inc. to assist with the comprehensive review of all strategic options available to the company. As a result of this review, Security Capital developed a strategic plan focused on: (i) mitigating the risk of non-compliance with regulatory solvency requirements and risk limits, (ii) maintaining or enhancing its liquidity, (iii) increasing the amount of capital available to support the company's ratings and (iv) mitigating uncertainty in regard to adverse loss reserve development. The primary elements of its strategic plan include: -- suspending the writing of substantially all new business; as the company's in-force business runs-off or matures, capital that currently supports such business and, accordingly, is not otherwise currently available to be used by the company, will become available and enhance the company's ability to comply with regulatory risk limits and rating agency capital requirements; -- pursuing commutation, restructuring or settlement of guarantees insured or reinsured by Security Capital, particularly with its CDO counterparties, in order to mitigate uncertainty in regard to adverse reserve development and generate available capital; -- exploring the commutation of assumed reinsurance deals or entering into new ceded reinsurance agreements to reduce the capital that we are required to maintain in support of its ratings by rating agencies; -- realigning the company's cost structure to reflect current business conditions, including staff reductions; -- seeking to raise new capital from third parties under more favorable market conditions than exist at the present time; and -- continuing to investigate longer term strategic alternatives, including the restructuring of the company's business to facilitate the creation or raising of new capital. The company indicated that there can be no assurance that its current strategic plan will not evolve or change over time, will be successfully implemented or will address the requirements of the rating agencies. Termination of Seven Credit Default Swap Contracts On Feb. 22, 2008, and March 6, 2008, the company issued notices terminating seven credit default swap contracts with a certain counterparty under which the company had agreed to make payments to the counterparty on the occurrence of certain credit events pertaining to particular CDOs of ABS referenced in the agreements. The company issued each of the termination notices on the basis of the counterparty's repudiation of certain contractual obligations under each of the agreements. The company has been advised by the counterparty that it disputes the effectiveness of the terminations. The company intends to vigorously enforce the terminations. The notional amount of the credit default swap contracts at Dec. 31, 2007, aggregated $3.1 billion before reinsurance ($3 billion after reinsurance). For the year ended Dec. 31, 2007, the company recorded a charge of $632.3 million relating to these credit default swap contracts of which $204.9 million represents a net unrealized loss and is reflected in the company's consolidated statement of operations in the section captioned "Net realized and unrealized losses on credit derivatives" and $427.4 million represents the provision of case basis reserves for losses and loss adjustment expenses and is reflected in the company's consolidated statement of operations in the section captioned, "Net losses and loss adjustment expenses." About Security Capital Assurance Ltd. Security Capital Assurance Ltd. (NYSE: SCA) -- http://www.scafg.com-- is a Bermuda-domiciled holding company whose primary operating subsidiaries, XL Capital Assurance Inc. and XL Financial Assurance Ltd, provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. * * * As reported in the Troubled Company Reporter on Feb. 8, 2008, Moody's Investors Service downgraded the provisional rating on senior debt to (P)Baa3 from (P)Aa3, provisional rating on subordinated debt to (P)Ba1 from (P)A1 and preference shares to Ba2 from A2, for Security Capital Assurance Ltd. The TCR said on Feb. 27, 2008, that Standard & Poor's Ratings Services took rating actions on several monoline bond insurers following additional stress tests with respect to their domestic nonprime mortgage exposure. The financial strength ratings on the operating subsidiaries of Security Capital Assurance Ltd -- XL Capital Assurance Inc. and XL Financial Assurance Ltd. -- were lowered to 'A-' from 'AAA' and remain on CreditWatch with negative implications. The financial strength rating on Financial Guaranty Insurance Co. was lowered to 'A' from 'AA' and remains on CreditWatch with developing implications. The 'AAA' financial strength rating on MBIA Insurance Corp. was removed from CreditWatch and a negative outlook was assigned. The 'AAA' financial strength rating on Ambac Assurance Corp. was affirmed and remains on CreditWatch with negative implications. The 'AAA' financial strength ratings on CIFG Guaranty, CIFG Europe, and CIFG Assurance North America Inc. were affirmed and retain a negative outlook. SECURITY CAPITAL: Moody's Cuts Senior Debt Initial Rating to 'Ba1' ------------------------------------------------------------------ Moody's Investors Service downgraded the debt ratings of Security Capital Assurance Ltd. as: -- provisional senior debt to (P)Ba1 from (P)Baa3, -- provisional subordinated debt to (P)Ba2 from (P)Ba1, and -- preference shares to B3 from Ba2), and a related financing trust, with the ratings remaining on review for further possible downgrade. The rating action was prompted by SCA's announcement that it has elected not to declare the semi-annual dividend payment on its Series A perpetual non-cumulative preference shares. The insurance financial strength ratings of SCA's operating subsidiaries, XL Capital Assurance Inc., XL Capital Assurance (U.K.) Limited and XL Financial Assurance Ltd. remain at A3 on review for possible downgrade. In its 4Q2007 earnings release, SCA reported a $1.2 billion net loss for the quarter, with net case loss reserve provisions of approximately $700 million, which were primarily related to impairment charges on ABS CDO credit derivatives ($652 million net), and to a lesser extent, HELOC and closed-end second lien direct RMBS transactions ($37 million net). Moody's stated that the magnitude of credit impairments and loss reserve activity announced by SCA falls within the range of losses previously considered by Moody's in its rating action of Feb. 7, 2008, when the insurance financial strength rating was downgraded to A3 from Aaa. SCA has also announced some details related to its strategic direction. First, the company stated that it expects that its independent auditor's opinion will not contain a going concern explanatory paragraph in its audited 2007 financial statements. SCA also announced that it will cease writing new business to improve its capital position through portfolio amortization. Finally, SCA's board of directors also elected not to declare a quarterly dividend on the company's common shares or the semi- annual dividend on its Series A perpetual non-cumulative preference shares. On an annual basis, the omission of these dividends would conserve approximately $22 million. According to Moody's, the downgrade of SCA's Series A preference shares to B3 from Ba2 reflects increased expected losses on the security due to the omission of the dividend, which is non- cumulative, and the potential for future dividends to be omitted over the near to intermediate term. Moody's also downgraded Twin Reefs Pass-Through Trust to Ba1 from Baa2, which reflects the increased possibility that dividends on this security may also be omitted in the future. Following XLFA's decision to exercise its put option with Twin Reefs in February 2008, the assets held by this financing trust now consist solely of XLFA Series B preference shares, which are non-cumulative, except under certain circumstances. To the extent XLFA elected not to declare dividends on its Series B preferred shares, the company would be unable to upstream dividends to the holding company without the declaration and payment of dividends to which the XLFA Series B preference shares are entitled. While such an action would preserve additional capital at XLFA for the benefit of policyholders, the potential disruption of dividends to the holding company, even if on a voluntary basis, has negative implications for holding company creditors, and influenced Moody's decision to downgrade by one notch the provisional ratings on senior and subordinated debt, to (P)Ba1 and (P)Ba2, respectively. Moody's notes that there is no senior or subordinated debt currently outstanding at the holding company. Finally, Moody's noted that SCA has issued termination notices on seven credit default swap contracts related to ABS CDOs with one of its counterparties due to the alleged repudiation of certain contractual obligations under the swap agreements by such counterparty. The counterparty disputes the effectiveness of the terminations. Credit impairments taken in the fourth quarter related to these seven transactions totaled approximately $427 million, or 65% of the ABS CDO related impairment charges taken during 4Q2007. While the ultimate outcome of this dispute remains uncertain, a resolution favorable to SCA could have positive implications for the company's capital adequacy position. Moody's stated that the continuing ratings review will focus on additional details related to SCA's capital plans and future strategic direction. List of Rating Actions These ratings remain on review for possible downgrade: -- XL Capital Assurance Inc.: insurance financial strength at A3; -- XL Capital Assurance (U.K.) Limited: insurance financial strength at A3; and -- XL Financial Assurance Ltd: insurance financial strength at A3. These ratings have been downgraded, with the ratings remaining on review for further possible downgrade: -- Security Capital Assurance Ltd: provisional rating on senior debt to (P)Ba1 from (P)Baa3, provisional rating on subordinated debt to (P)Ba2 from (P)Ba1 and preference shares to B3 from Ba2; and -- Twin Reefs Pass-Through Trust: contingent capital securities to Ba1 from Baa2. The last rating action on SCA and its operating subsidiaries occurred on March 4, 2008, when Moody's placed the company's ratings on review for possible downgrade. Overview of Security Capital Assurance Security Capital Assurance Ltd is a Bermuda-domiciled holding company whose primary operating subsidiaries, XL Capital Assurance Inc. and XL Financial Assurance Ltd, provide credit enhancement and protection products to the public finance and structured finance markets throughout the United States and internationally. For the year ended Dec. 31, 2007, SCA reported a net loss available to common shareholders of $1.2 billion. As of Dec. 31, 2007, SCA had shareholders' equity of $427 million. SEYCHELLE WATER: Says Securities on Dual Trade Starting March 31 ---------------------------------------------------------------- Seychelle Water Filtration Products, a dba of Seychelle Environmental Technologies Inc., disclosed its return to the OTC Bulletin Board. The stock will be dual traded for 30 calendar days from March 11, 2008, on both the OTCBB as 'SYEV.OB' and the Pink Sheets 'SYEV.PK'. "We are very pleased to be back on the OTC Bulletin Board," Carl Palmer, president and CEO said. "Also, we have added a new, improved line of water filtration bottles and pure water straws with advanced filters. This unique filter system uses EPA approved iodinated resin which has been proven to be effective against virus and bacteria. This new line comes in at just the right time, as there is so much concern being expressed about the high cost and waste associated with bottled water." About Seychelle Environmental Based in San Juan Capistrano, California, Seychelle Environmental Technologies Inc. (PNK: SYEV.PK) -- http://www.seychelle.com/-- designs and manufactures state-of-the-art ionic adsorption micron filters that remove up to 99.99% of all pollutants and contaminants found in any fresh water source. Patents or trade secrets cover all proprietary products. As reported in the Troubled Company Reporter on Nov. 26, 2007, Seychelle Environmental Technologies Inc.'s consolidated balance sheet at Aug. 31, 2007, showed $1,058,562 in total assets and $1,375,068 in total liabilities, resulting in a $316,506 total shareholders' deficit. SHAPES/ARCH: Case Summary & 79 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Shapes/Arch Holdings, LLC 9000 River Road Delair, NJ 08110 Bankruptcy Case No.: 08-14631 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Shapes, LLC 08-14632 Ultra, LLC 08-14633 Delair, LLC 08-14634 Accu-Weld, LLC 08-14635 Type of Business: The Debtors produce custom aluminum extrusions for a variety of industries, including road and rail transportation and commercial and residential construction. They also manufacture maintenance free aluminum fence systems, for residential and commercial use, and above-ground pools. They also manufacture made-to-order vinyl replacement windows and steel doors. They also supply hardware products, including locksets, door and window hardware and other decorative hardware. See http://www.ultrahardware.com/, http://www.delairgroup.com/and http://www.accuweld.com/ Chapter 11 Petition Date: March 16, 2008 Court: District of New Jersey (Camden) Judge: Gloria M. Burns Debtors' Counsel: Jerrold N. Poslusny, Jr., Esq. (jposlusny@cozen.com) Cozen O'Connor LibertyView, Suite 300 457 Haddonfield Road Cherry Hill, NJ 08002 Tel: (856) 910-5000 http://www.cozen.com/ Estimated Assets Estimated Debts ---------------- --------------- Shapes/Arch Holdings, LLC Less than $50 million to $50,000 $100 million Shapes, LLC $10 million to $50 million to $50 million $100 million Ultra, LLC $10 million to $50 million to $50 million $100 million Delair, LLC $10 million to $50 million to $50 million $100 million Accu-Weld, LLC $10 million to $50 million to $50 million $100 million A. Shapes/Arch Holdings, LLC does not have any creditors who are not insiders. B. Shapes, LLC's Consolidated List of 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Attn: Brian Bull $6,581,763 Alcan Aluminum Corp. 17-17 Route 208 Fair Lawn, NJ 07410 Tel: (514) 847-3574 Rusal America Corp. $5,276,534 Attn: Susan Scarinci 550 Mamaroneck Avenue, Suite 301 Harrison, NY 10528 Tel: (914) 670-5771 Hess Corp. $2,176,569 P.O. Box 905243 Charlotte, NC 28290-5243 Attn: Joe DeJianne One Hess Plaza Woodbridge, NJ 07095 Tel: (732) 750-6187 Marubeni America $1,871,574 Corp. Attn: Elizabeth Orben 450 Lexington Avenue New York, NY 10017-3984 Tel: (212) 450-0287 Glencore Ltd. $1,487,034 Attn: David Porter Three Stamford Plaza 301 Tresser Boulevard Stamford, CT 06901 Tel: (203) 328-4920 Local 837 Health & Welfare $961,756 Fund Attn: John Dulzcak 12275 Townsend Road Philadelphia, PA 19154 Tel: (215) 673-0500 Pennsauken Township $747,939 Attn: Bill Buffington Municipal Building 5606 North Crescent Boulevard Pennsauken, NJ 08110 Tel: (856) 665-1000 Atlantic Scrap & Processing $690,968 LLC Attn: Scott McNil P.O. Box 608 1426 W. Mount Street Kernersville, NC 27285-0608 Tel: (336) 996-2350 PPL Energy Plus LLC $486,834 Attn: Pamela Flick Two North Ninth Street Allentown, PA 18101-1179 Tel: (610) 774-7125 Exco USA $297,410 Attn: Bob Sulisz 56617 North Bay Drive Chesterfield, MI 48051 Tel: (586) 749-5400 Maryland Recycling Co. $215,236 American Iron and Metal $181,087 Metal Management, Inc. $169,441 PSE&G $165,795 LaJoie's Auto Wrecking Co. $142,575 Brian Hochbe $138,746 Treasurer-State of New Jersey $125,895 Sentry Insurance $123,297 Southeastern Extrusion Tool $100,803 Local 837 Pension Fund $93,608 C. Ultra, LLC's Consolidated List of 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Zhongshan HUA Feng Lock $1,107,480 Yong Developing Area Xiaolan, Zhongshan Tel: 86-760-2265895 Perfect Trade Development Co. $433,628 Room A, 7/12F Mao Tai Century Tower Hang Zhou China Tel: 86-571-5779108 John A. Steer Co. $354,639 28 South 2nd Street Philadelphia, PA 19106 Tel: (215) 922-6610 Zhongshan Go Tin Hardware, $315,077 Ltd. 1 Taifeng No. 2 Road Xiaolan Industries District Xiao Lan Taown, Zhongshan City Guandong City China 528415 Tel: 86-760-2283188 Carlmax Products, Inc. $232,715 Combination Door Ware Ind. $188,854 Shanghai Jinwei Hardware $163,633 Hanlix International Co., Ltd. $146,331 Kambo Security Products $144,090 United Pacrel Service $141,041 Tianjin Zongheng Ind. & Trade $137,742 Co. Gee Bridge International, Inc. $134,341 Ty Manufacturing Import/Export $132,007 New Hocha Aluminum Ind. Co., $127,574 Ltd. Taiwan Fu Hsing Ind. Co., Ltd. $113,513 Gainsborough Hardware Ind., $111,057 Ltd. Pacific USA Corp. $111,041 Larson & Shaw, Ltd. $76,689 Metalall Co., Ltd. $68,235 Genius Products Co., Ltd. $66,025 D. Delair, LLC's Consolidated List of 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Alcoa Mill Products $336,156 Attn: George Frost 1480 Manheim Pike Lancaster, PA 17601 Tel: (800) 889-3730 Coil Plus $273,183 Attn: Hugh Graney 5135 Bleigh Avenue Philadelphia, PA 19136 Tel: (215) 331-5200, (ext.) 228 Local 837 Health and Welfare $169,962 Attn: John Dolzak 12275 Townsend Road Philadelphia, PA 19154 Tel: (215) 673-0500 Acme Corrugated Box $128,421 Uneeda Bolt & Screw Co. $127,531 Hess Corp. $107,610 J.W. Aluminum Corp. $98,241 Keith Brantley $74,718 Metal Koting $73,620 Bardot Plastics, Inc. $64,821 Medalco Metals, Inc. $62,909 American Express $51,750 D&D Technologies $50,951 Malber Tool $50,209 International Extruders $48,712 Ace Pallet Corp. $44,543 Jim McAllister $35,641 Gill Power Coating, Inc. $34,201 Fitzpatrick Container $33,793 Alumet Supply, Inc. $30,678 E. Accu-Weld, LLC's Consolidated List of 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ P.P.G. Industries $212,202 Attn: Cathy Lynch P.O. Box 360175 Pittsburgh, PA 15251-6175 Tel: (800) 774-0546 U.I.U. Health & Welfare $193,984 Attn: Julia Bruno 1166 South 11th Street Philadelphia, PA 19147 Tel: (215) 336-3300 Polyone Corp. $164,814 Department CH 10489 Palatine, IL 60055-0489 Tel: (936) 449-6817 Penske Truck Leasing Co., L.P. $96,074 H.B. Fuller Co. $42,060 Colorworks Graphic Services $36,490 U.I.U. Pension $35,218 P.E.C.O. $30,430 Window Depot $29,799 Royalplast Door System Co. $25,496 American Express $21,866 Caldwell Manufacturing $21,535 P.P.G. Indsutrial Ohio, Inc. $20,783 Ventana USA $18,988 Household Metals, Inc. $17,329 Rapture Trailer, Inc. $16,873 Guardian Industries Corp. $13,932 Ultrafab, Inc. $13,582 Sherwin Williams Chemical $13,500 Coating Facility SIRVA INC: Class Action Plaintiffs Want Automatic Stay Lifted ------------------------------------------------------------- Plaintiffs in a class action alleging that Sirva Inc. subsidiaries violated a section of the Sherman Act asked Judge James M. Peck to lift the automatic stay imposed by Section 362(a) of the Bankruptcy Code, on Sirva and its debtor-affiliates to allow the South Carolina District Court to rule on the Defendants' joint motion to dismiss the action. On March 19, 2007, Donald J. Beach, Scott Hansen, Jeffrey L. Stoloff, Burnetta Nimons,Thomas Scholtens, and Natalie Hutt, formerly known as Natalie Trueworthy, filed a class action complaint against certain moving company including Debtors SIRVA, Inc., SIRVA Worldwide, Inc., North American Van Lines, Inc., and Allied Van Lines, Inc., in the the United States District Court for the District of South Carolina, Charleston Division. In the Complaint, Beach, et al., argued that the Defendants had violated Section 1 of the Sherman Act, which prohibits agreements that unreasonably restrain trade. The Beach Complaint also sought damages under Section 14704(b) of the Transportation Code for certain rates charged in excess of the applicable rate for transportation or service contained in a tariff published under Section 13702 of the Transportation Code. Beach, et al., had asserted a conspiracy between the Defendants, as well as the American Moving and Storage Association, Inc., the trade association of which the Defendants are members, to illegally charge residential moving customers for fuel surcharges that are greatly in excess of the actual cost of fuel. The Defendants sought to dismiss the Beach Complaint on June 8, 2007. In response, Beach, et al., voluntarily dismissed all claims against Atlas World Group, Inc., SIRVA, Inc., SIRVA Worldwide, Inc., Unigroup, Inc., and Bekins Van Lines, LLC. Beach, et al., also voluntarily dismissed their Section 14704(b) claims against the American Moving and Storage Association, Inc. Although SIRVA, Inc. and SIRVA Worldwide were dismissed from the action without prejudice, the claims against their subsidiaries North American Van Lines and Allied Van Lines continue. The Defendants' Joint Motion to Dismiss, which seeks dismissal of the Beach Complaint in its entirety, remained for determination by the South Carolina District Court. Another complaint, similar to the Beach Complaint, was filed on May 4, 2007, against the same Defendants in Illinios, styled Moad, et al. v. Atlas Van Lines, et al., N.D. Illinois, C.A. No. 1:07-2506. The Moad Complaint asserted additional causes of action, including breach of contractual duty, consumer fraud and deceptive business practice, under Illinois law. On August 16, 2007, the Judicial Panel on Multidistrict Litigation had determined that the Beach Complaint and the Moad Complaint should be assigned to a single judge for coordinated or consolidated pretrial proceedings. Accordingly, the MDL Panel transferred the Moad action to the District of South Carolina on September 9. Prior to the transfer, on September 5, 2007, in conformity with voluntary dismissals previously filed in the Beach Complaint, Moad Plaintiffs filed voluntary dismissals of all claims against Atlas World Group, SIRVA, Inc., SIRVA Worldwide, and Unigroup, Inc. and a portion of their complaint as to American Moving and Storage, Inc. Oral argument on the Defendants' Joint Motion to Dismiss was heard by the Honorable C. Weston Houck on October 23, 2007. At the conclusion of the hearing, the matter was taken under advisement. A ruling has not been issued as of this time. When that ruling is issued, it will apply not only to the Beach case, but also to the Moad causes of action under the Sherman Act and Section 14704(b). Counsel for the Moad Plaintiffs was present for the hearing and agreed in advance of the hearing to join in the briefs filed and arguments made by counsel for the Beach Plaintiffs. On December 14, 2007, another complaint was filed in Alabama against the Defendants asserting similar claims, Boone v. Atlas Van Lines, et al., N.D. Alabama, C.A. No. CV-07-CO-2269-S. The Boone action was also transferred to the South Carolina District Court by the MDL Panel. Beach, et al., believes that the Boone Complaint will be subject to the District Court's ruling on the Joint Motion to Dismiss to the same extent as if the motion had been filed in that case. By this motion, Beach, et al., ask Judge Peck to lift the automatic stay imposed by Section 362(a) of the Bankruptcy Code, to allow the South Carolina District Court to rule on the Defendants' Joint Motion to Dismiss, which has been sub judice since October 23, 2007. The relief requested is limited to allowing the South Carolina District Court to issue its decision on the Motion to Dismiss, and does not encompass any other action or procedure in the cases against the Debtors. Michael Luskin, Esq., at Luskin, Stern & Eisler, LLP, in New York, states that the Defendants' Joint Motion to Dismiss has been fully briefed, argued, and submitted in the South Carolina District Court, and resolution of the Motion will assist in liquidating the Class Action Antitrust Plaintiff's, which will inure to the benefit of claims and plan administration in the Debtors' cases. Mr. Luskin contends that allowing the South Carolina District Court to rule on the Joint Motion to Dismiss involves no cost, expense, or time to the Debtors, and does not prejudice them except with respect to the decision of their Joint Motion to Dismiss on its merits. Mr. Luskin maintains granting relief from stay is warranted. About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Parties Agree to Lift Stay on Preference Action ---------------------------------------------------------- Sirva Inc., its debtor-affiliates and the Official Committee of Unsecured Creditors in their Chapter 11 cases, and the Official Committee of Unsecured Creditors of 360networks (USA) Inc., have entered into an agreement with respect to a preference action pending before Judge Allan L. Gropper in the United States Bankruptcy Court for the Southern District of New York. The parties asked the Bankruptcy Court to approve the Stipulation. 360networks Committee holds an unliquidated claim against Debtor SIRVA Relocation LLC resulting from an action captioned "The Official Committee of Unsecured Creditors of 360networks (USA) Inc., et al. v. U.S. Relocation Services, Inc.," Adv. Pro. No. 03- 03127 (ALG). In the Preference Action, the 360networks Committee are seeking the return of $1,863,014 in preferential transfers. The Preference Action, prior to it being stayed by the commencement of the bankruptcy proceedings, had been sub judice with Judge Gropper on fully-briefed cross motions for summary judgment. Accordingly, the parties stipulate that: -- the automatic stay will be lifted to allow Judge Gropper to adjudicate the Cross Motions; -- Judge Gropper may take any action to adjudicate, dispose of, or otherwise resolve the issues in connection with the Cross Motions, without further order from the Bankruptcy Court; and -- the automatic stay will remain in effect with respect to: * the 360network Committee's efforts to collect any amount from the Debtors, in connection with the Preference Action; or * any appeal of a ruling in the Preference Action. 360networks Committee's Reconsideration Motion In the Preference Action before Judge Gropper, the 360networks Committee, on behalf of itself and 360networks (USA), Inc., and 360fiber Inc. and their debtor subsidiaries, sought the avoidance, recovery and return, from U.S. Relocation Services, Inc. -- now known as SIRVA Relocation LLC -- of $1,863,014 in preferential transfers made by 360 to U.S. Relocation, plus prejudgment interest at the highest applicable rate from March 26, 2002, plus sanctions in connection with counsel for U.S. Relocation's conduct in defending the Preference Action, for a total claim against U.S. Relocation estimated to be in the excess of $2,200,000. On behalf of the 360networks Committee, Norman N. Kinel, Esq., at Dreier LLP in New York, asserted that the Debtors' proposed treatment of unsecured creditors is discriminatory and impermissible under applicable law. The Debtors propose, in their Plan of Reorganization dated Jan. 28, 2008, that in the two classes of unsecured creditors -- one will receive a 100% distribution, and the other will receive no distribution. Mr. Kinel explained that although debtors are permitted to pay unsecured prepetition debts to critical vendors, the relief sought and obtained by the Debtors in the Prepetition Claims Order classifies an open-ended category of creditors as critical, without adequate basis. Moreover, the Prepetition Claims Order was entered without due notice to the parties-in-interest that are adversely affected, including the 360networks Committee, depriving them of the opportunity to object or be heard, Mr. Kinel stated. "[T]he 360networks Committee is not even listed as a creditor in the Debtors' list of thirty (30) largest creditors attached to their petitions, even though the 360networks Committee is in fact one of the 10 largest creditors of the Debtors, notwithstanding that such claim is presently unliquidated," Mr. Kinel maintained. Thus, as reported by the Troubled Company Reporter on Feb. 26, 2008, the 360networks Committee and its debtor-subsidiaries asked the Court to reconsider its order authorizing the payment of the Debtors' pre-bankruptcy filing unsecured claims dated Feb. 5, 2008, pursuant to Rules 59 and 60 of the Federal Rules of Civil Procedure. Debtors Oppose Reconsideration Motion As reported by the TCR on March 4, the Debtors opposed the Reconsideration Motion, asserting that it failed to demonstrate extreme and undue hardship required for its approval, and is merely the creditor's attempt to enhance its recovery. Representing the Sirva Debtors, Marc Kieselstein, P.C., at Kirkland and Ellis LLP in Chicago, Illinois, said pursuant to Rule 59 and 60 of the Federal Rules of Civil Procedure, the Court may grant extraordinary remedies in extraordinary circumstances to prevent extreme and undue hardship, citing In re Miller, No. 07- 13481, 2008 WL 110907 (Bankr. S.D.N.Y. Jan. 4,2008). He points out that the relief provided by the order dated February 5, 2008, authorizing the payment of prepetition unsecured claims, is not extraordinary, and is a "typical first day order." According to Mr. Kieselstein, the 360networks Committee has not demonstrated that the Debtors' ability to honor their existing obligations in the ordinary course of business creates the level of harm necessary to warrant a reconsideration; and does not make specific allegations with respect to its disputed, unliquidated, and unsecured claim. In addition, the Debtors had complied with the notice requirements by providing copies of their first day pleadings to the United States Trustee two business days in advance of the Petition Date. Accordingly, the Debtors ask the Court to deny the Reconsideration Motion with prejudice. Parties React The 360networks Committee said all debtors, including the Debtors in the Chapter 11 cases, must meet the burdens of the Bankruptcy Code and Bankruptcy Rules, as well as the requirements of due process. According to the 360networks Committee, the Debtors have improperly taken advantage of standard first-day orders, by including unnecessary and discriminatory terms, and failing to provide any advance notice to parties-in-interest that are adversely affected. The Prepetition Claims Order was entered without advance notice to any party other than the United States Trustee and the Debtors' prepetition secured lenders, enabling the Debtors to pay certain chosen unsecured prepetition creditors at will. The 360networks Committee believes that it was improper for the Prepetition Claims Order to be entered on a final basis, without giving any other party-in-interest aside from the U.S. Trustee and the Debtors' Prepetition Secured Lenders, an opportunity to be heard and object. The Official Committee of Unsecured Creditors of the Debtors' Chapter 11 cases, on the other hand, told Judge Peck that the Prepetition Claims Order gives the Debtors authority to pay unsecured claims which cannot be argued as critical. According to the Committee, the Debtors have justified the relief they sought by asserting that it is typical in "prepackaged" bankruptcy cases. However, the Committee says, not all prepackaged cases are the same. In fact, the Debtors' case is unusual since they propose to pay nothing to a broad group of unsecured creditors under their Plan. The Committee maintained that neither the Bankruptcy Code, nor any necessity doctrine or general Court order, support the proposition that debtors can make unlimited and unspecified cash payments to unidentified general unsecured creditors, in the context of a cram-down plan. Accordingly, the Committee insists that a reconsideration of the Prepetition Claims Order is warranted. Similarly, Triple Net Investments IX, LP, supports the 360networks Committee's request stating that the Prepetition Claims Order was entered without notice and with no opportunity for affected creditors, including itself, to be heard. Judge Peck Approves Stipulation As reported by the TCR on March 6, 2008, Judge Peck approved a Stipulation entered by the Debtors regarding payments of the claims. The 360network Committee withdrew its Motion, and the Sirva Creditors' Committee withdrew its joinder to the Motion. The Debtors agreed that all future payments pursuant to the Prepetition Claims Order will be made only if those payments are necessary to avoid material, near term, and foreseeable harm to the Debtors' estates. The parties also agreed that: -- the payments will be treated as made under any plan of reorganization; -- neither the Creditors' Committee nor any other creditor will be estopped from objecting to the confirmation of a Plan, by virtue of entry of the Prepetition Claims Order; -- certain Class 4 Claims, or a similar unimpaired class of unsecured creditors, will remain outstanding at the time of confirmation; -- the Debtors will not argue that payments made under the Prepetition Claims Order will render moot any confirmation objection by the Creditors' Committee or any creditor; -- the Debtors will not amend a Plan to eliminate Class 4 without the consent of Creditors' Committee and the 360networks Committee. Triple Net to Appeal Approval of Claims Payment Order As reported by the TCR on March 12, 2008, Triple Net Investments IX, LP, which holds a claim against one of the Debtors, North American Van Lines, Inc., notified the Court that it will take an appeal to the U.S. District Court for the Southern District of New York from Judge James M. Peck's approval of a stipulation resolving the reconsideration request. Triple Net wanted to determine whether: -- given the fast track confirmation for the Debtors' proposed plan of reorganization, it will be denied due process or a meaningful opportunity to have an appellate review of orders, if the leave to appeal is denied; and -- in the event that Triple Net is denied immediate appellate review of the Orders, there is a likelihood that an appellate review at the conclusion of the case will have effectively been rendered moot by the entry of subsequent court orders, including orders approving the disclosure statement and confirmation of the proposed Plan. About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Discloses Info Related to European Share Purchase Deal ----------------------------------------------------------------- Eryk J. Spytek, senior vice-president, general counsel and secretary of Sirva, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that Picot Limited and Irving Holdings Limited, with which Sirva and its debtor- affiliates entered into a Share Purchase Agreement, are managed by The TEAM Group, a member of the Allied International moving network managed by the Debtors. In connection with the Share Purchase Agreement, TEAM Relocations Limited and SIRVA UK Limited, a subsidiary of SIRVA Group Holdings Limited, will also become members of the Allied International moving network. As reported by the Troubled Company Reporter on March 5, SIRVA, Inc., reached an agreement to sell its moving services operations in the United Kingdom and the Republic of Ireland to a company managed by The TEAM Group, Europe's leading corporate international moving company and a member of the Allied International moving network. The transaction is subject to certain closing conditions, including the receipt of regulatory, court and other approvals. Debtors North American International Holding Corporation, NA (UK) Limited Partnership, and NA (UK) GP Limited, entered into the Share Purchase Agreement on March 2, 2008, with Picot Limited and Irving Holdings Limited, in which the Debtors sold their ownership shares in SIRVA Group Holdings Limited and SIRVA Ireland, including The Baxendale Insurance Company Limited, their affiliated Irish insurance business, for the aggregate sale price of $4,200,000. Pursuant to the Share Purchase Agreement, substantially all of the purchase price will be used to offset existing intercompany indebtedness. TEAM will provide a $10,000,000 funding to SIRVA UK, which bears a 3% annual interest rate, plus the base bank rate of Barclays Bank plc. According to Mr. Spytek, the Interim Funding will be repayable on demand at any time after the earlier of: (1) the closing of the Sale; (2) May 29, 2008, or another date agreed to in writing between the Debtors and TEAM; or (3) an earlier date, when the closing conditions of the Agreement will not be satisfied. Mr. Spytek adds that on behalf of SIRVA UK, TEAM will pay $3,200,000 to the trustee of the SIRVA UK Pension Scheme on April 5, 2008. Mr. Spytek notes that the Debtors will retain a perpetual, irrevocable license to use the "Pickfords" name and trademark, but only in combination with "Allied," for an initial royalty payment of $474,000 in 2011, and subsequent annual royalty payments for 103% of the previous year's royalty payment. The license will permit SIRVA or its subsidiaries to use "Pickfords" in 29 countries worldwide. Mr. Spytek adds that five years after the closing of the Sale, Debtor Allied Van Lines, Inc., will license the "Allied" name and trademark to TEAM for an annual royalty payment of $225,000 in the first year of the license, which will increase to $400,000 in the final year. Mr. Spytek says that the Debtors may terminate the Agreement at any time prior to closing of the Sale, if: (a) any action is taken to assert or enforce any claim or liability against the Debtors, their holding companies, or any of their subsidiaries, including under the Pension Funding Arrangement, as well as any objection to the confirmation of their plan of reorganization; or (b) TEAM breaches their obligation to provide the Interim Funding. Mr. Spytek states that the closing of the Sale is subject to certain closing conditions, including the receipt of regulatory, court and other approvals. For three years following the Sale, the Debtors will be subject to a non-compete covenant, prohibiting them from engaging in a competing business in the UK and Ireland. In addition, the Debtors have agreed not to use certain trade names, including "Pickfords," in the ordinary course of business, except in jurisdictions where the Pickfords marks are not owned by TEAM, SIRVA Ireland or SIRVA Group Holdings. A full-text copy of the Share Purchase Agreement is available at no charge at http://ResearchArchives.com/t/s?2946 About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: U.S. Trustee Objects to Appointment of Class 5 Panel --------------------------------------------------------------- Diana G. Adams, the United States Trustee for Region 2, objects to the formation of a Class 5 Creditors' Committee for Sirva Inc. and its debtor-affiliates, stating that the current five members of the Official Committee of Unsecured Creditors consists of three Class 5 creditors and two Class 4 creditors. The Class 5 Claimants of the Debtors are those that hold General Unsecured Claims. Class 4 consists of all Unsecured Ongoing Operations Claims. Paul K. Schwartzberg, Esq., trial attorney for the U.S. Trustee, tells Judge James M. Peck that all of the Class 5 creditors were solicited to serve on the Committee. Triple Net Investments IX, LP, which sought the Class 5 Creditors Committee appointment, did not respond to the solicitation. Neither did it approach the U.S. Trustee to serve on the Committee or to form a separate Class 5 Creditors Committee. Mr. Schwartzberg points out that all Class 5 creditors which sought to be appointed to the Committee had been appointed. Additionally, since three of the five Committee members are from Class 5, the Class 5 creditors control the Committee's vote. Hence, the Class 5 creditors are adequately represented by the Committee. Moreover, the U.S. Trustee says that although the Class 4 creditors on the Committee possess pre-bankruptcy unsecured claims, the Committee has been able to form positions on matters and function properly. Accordingly, the U.S. Trustee maintains, there is no basis to form a separate Class 5 Creditors Committee or to remove Class 4 creditors from the Committee. As reported by the Troubled Company Reporter on March 10, 2008, Triple Net Investments IX, LP, asked the U.S. Bankruptcy Court for the Southern District of New York to (i) appoint an Official Committee of Unsecured Creditors for Class 5 Claimants of Sirva Inc. and its debtor-affiliates, and to (ii) stay all proceedings pending the appointment of the Class 5 Committee. Triple Net Investments IX, LP, holds a claim against one of the Debtors, North American Van Lines, Inc. According to Triple Net, there is an inherent and irreconcilable conflict of interest in having one law firm represent, as part of the Official Committee of Unsecured Creditors, the interests of both Class 4 and Class 5 claimants under Debtors' proposed plan of reorganization. The Class 5 Claimants of the Debtors are those that hold General Unsecured Claims. Class 4 consists of all Unsecured Ongoing Operations Claims. Robert E. Nies, Esq., at Wolff & Samson PC, in New York, related that two Class 4 members in the Committee have already been paid in full, or will be paid in full upon confirmation of the Plan. On the other hand, Class 5 claimants will receive nothing, Mr. Nies explains. The counsel representing Class 4's interests cannot advocate for Class 5 claimants without jeopardizing Class 4's guaranteed recovery. Mr. Nies submitted that committee members often have varying interests in a bankruptcy case, and often disagree over the committee's strategic objectives. However, he argued that the Class 4 claimants, who are unimpaired under the Plan, require no Committee representation. Accordingly, the Class 4 Claimants should be dismissed from the Committee, or in the alternative, the Court should direct the formation of a separate Class 5 committee, he says. In addition, given the fast track process of the Debtors' bankruptcy cases, Triple Net asked Judge Peck to shorten the time for notice and a hearing on its request. About Sirva Inc. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SPYRUS INC: Wants to Obtain $2 Million DIP Facility of John Miller ------------------------------------------------------------------ SPYRUS Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to obtain up to $2 million of debtor-in-possession financing from John D. Miller as DIP agent, and other Series B Preferred holders, secured by liens on property of the Debtors' estates. Mr. Miller, a former board member of the Debtors in 1999, advanced secured bridge loans to the Debtors that provide for a $615,000 in the aggregate evidenced by secured notes bearing a fixed interest rate of 11% per annum. The notes are secured by substantially all of the Debtors' assets. The Debtors tell the Court that they have an immediate need to access Mr. Miller's DIP facility to permit, among other things: -- orderly continuation of the operation of their businesses; -- management and preservation of the Debtors' assets and properties; -- maintenance of business relationships with vendors, suppliers and customers; -- payment of payroll obligations; -- satisfaction of other working capital and operational needs; and -- maintenance of the going concern value of the Debtors' state. Neil B. Glassman, Esq., at Bayard, P.A., at Wilmington, Delaware, say that the Debtors lack liquidity to preserve and maintain the going concern value of their assets. If the Debtors defaulted of their obligations, the remaining balance of the loan will bear interest at 14%, Mr. Glassman say in court papers filed Monday. The Debtors agree to pay a commitment fee of $30,000, exit fee of $30,000 and backstop fee of 10%. As adequate protection, the lenders will receive perfected postpetition security interest and liens, senior and superior in priority to all other secured and unsecured creditors of the Debtors' estate. Headquartered in San Jose, California, SPYRUS Inc. -- http://www.spyrus.com-- develops, manufactures and markets hardware and software encryption and security products. Terisa Systems Inc. and Blue Money Software are wholly owned subsidiary of SPYRUS. SPYRUS has additional offices in New Jersey and Australia. SYRUS was valued at approximately $12 million as of March 13, 2008. The company and two of its affiliates filed for Chapter 11 protection on March 13, 2008 (Bankr. D. Del. Lead Case.08-10462). Neil B. Glassman, Esq., at Bayard, P.A., represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in these cases. When the Debtors filed for protection against their creditors, it listed assets and debts between $1 million to $100 million. SPRYUS INC: Files Disclosure Statement in Delaware -------------------------------------------------- SPYRUS Inc. and its debtor-affiliates delivered a Disclosure Statement explaining their Chapter 11 Plan of Reorganization to the United States Bankruptcy Court for the District of Delaware. Under the Plan, the Debtors will raise at least $2 million by conducting rights offering whereby subscribing noteholders can purchase portion of new preferred interests. Former board member of the Debtors, John D. Miller, will provide financing in turn for a corresponding equity interest in the Debtors. Mr. Miller has agreed to "backstop" the rights offering in exchange for a fee equal to 10% of the offering amount, which is convertible into a pro rata portion of new money allocation. According to court filing, the Debtors admit that Chapter 11 reorganization is the most efficient way to implement the new financing. Treatment of Claims Under the Plan, these claims will be paid in full: -- DIP lender claims; -- administrative claims, totaling at $250,000; -- priority tax claims, totaling at $4,000; and -- priority non-tax claims; These impaired claims will receive a pro rata share of the new money allocation in the rights offering, among other things: -- John Miller secured claims, totaling $5,562,000; and -- Dickens second lien claims, totaling $120,300. Each holder of Trade and General Unsecured Claims, totaling $428,590, will be paid, either: i) in full on the effective date of the plan; ii) under the terms of the Debtors' obligation to holders of this claims; or iii) as may be agreed by the Debtors and holders. Holders of Employee Claims, totaling $2,175,000, can convert all or a portion of their claims to new preferred interests, which will be restricted and converted at the earlier of five years after the plan effective date. Additionally, employee stock ownership up to 10% will be reserved for current and future employees. On the other hand, holders of $4,929,000 in notes issued by the Debtor has the option to purchase a pro rata share of new money allocation. Those noteholders who participated in the DIP loan will have their loans converted to a pro rata share of the new money allocation, while noteholders who elected not to participate will obtain new preferred interests, but will be diluted by the participating noteholders on a 3:1 basis. The total recovery for Series A Preferred and Series B Preferred noteholders will not exceed 15% of new common stock and all existing blocking and other rights incident will be terminated. Other equity interest will be canceled and holders will not receive any property under the Plan. A full-text copy of SPYRUS' Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2940 Headquartered in San Jose, California, SPYRUS Inc. -- http://www.spyrus.com-- develops, manufactures and markets hardware and software encryption and security products. Terisa Systems Inc. and Blue Money Software are wholly owned subsidiary of SPYRUS. SPYRUS has additional offices in New Jersey and Australia. SPYRUS was valued at approximately $12 million as of March 13, 2008. The company and two of its affiliates filed for Chapter 11 protection on March 13, 2008 (Bankr. D. Del. Lead Case.08-10462). Neil B. Glassman, Esq., at Bayard, P.A., represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in these cases. When the Debtors filed for protection against their creditors, it listed assets and debts between $1 million to $100 million. SPRYUS INC: Plan Hearing Scheduled for April 23 ----------------------------------------------- The Hon. Christopher S. Sontchi of the United States Bankruptcy Court for the District of Delaware scheduled a hearing April 23, 2008, to consider the adequacy of SPYRUS Inc. and its debtor- affiliates' Disclosure Statement, followed by a hearing whether to confirm the Debtors' Chapter 11 Plan of Reorganization. The hearing will took place at 824 Market Street, Sixth Floor in Wilmington Delaware. Objections to the Plan or the Disclosure Statement, if any, must be filed no later than 4:00 p.m., on April 16, 2008. Headquartered in San Jose, California, SPYRUS Inc. -- http://www.spyrus.com-- develops, manufactures and markets hardware and software encryption and security products. Terisa Systems Inc. and Blue Money Software are wholly owned subsidiary of SPYRUS. SPYRUS has additional offices in New Jersey and Australia. SPYRUS was valued at approximately $12 million as of March 13, 2008. The company and two of its affiliates filed for Chapter 11 protection on March 13, 2008 (Bankr. D. Del. Lead Case.08-10462). Neil B. Glassman, Esq., at Bayard, P.A., represents the Debtors in their restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in these cases. When the Debtors filed for protection against their creditors, it listed assets and debts between $1 million to $100 million. STRADA 315: Court Approves to Use Cash Collateral on Interim Basis ------------------------------------------------------------------ The Hon. Raymond B. Ray of the United States Bankruptcy Court for the Southern District of Florida authorized STRADA 315 LLC to access, on an interim basis, the cash collateral of Ruden McClosky Smith Schuster & Russell, P.A., a prepetition estate law firm, until March 31, 2008. As reported in the Troubled Company Reporter on March 6, 2008, the Debtors' primary financing and sole secured creditor is Regions Bank, which holds a note in the original principal amount of $34,800,000. The note is secured by a first position mortgage on a residential and commercial condominium and space in 315 Northeast 3rd Avenue, in Fort Lauderdale, Florida. As of the date of bankruptcy, the balance on the Regions loan was approximately $18,619,000. Regions Bank is also oversecured in the property alone by approximately $13,400,000, and has an equity cushion on the Debtor's estates of approximately 72%. In particular, the Debtor proposed to utilize the cash collateral of Ruden McClosky. In accordance with the Debtor's prepetition efforts to negotiate with Regions, Ruden McClosky held several sources of the Debtor's funds. The Debtor has $730,387 in available cash at Ruden McClosky: a) excess proceeds from sale closings, net of liens, including Regions Bank - $318,658; b) Ruden McClosky's legal fees from sale closings - $66,000; c) interest on customer deposits, some of which customers may claim an interest - $183,459; d) forfeited customer deposits - $162,270. To the extent Regions claims a lien on these funds, Regions is further secured by nearly $1 million. The Debtor wanted to utilize the Ruden Funds to operate during its bankruptcy case, thereby generating sufficient funds to pay the Regions claim in full, pay all lien holders on the property, and all non-insider unsecured claims. The Debtor will provide adequate protection of its security interest in and liens on the Ruden Funds. The Debtor is also willing to grant Regions and administrative claim and a postpetition replacement lien on any further funds generated by the Debtor. Regions is vastly oversecured and adequately protected solely as a result of its interest in the property. A full-text copy of Strada's budget is available for free at: http://ResearchArchives.com/t/s?293f Headquartered in Delray Beach, Flordia, Strada 315 LLC is affiliated with Delray Beach's Southpoint Realty Development. It owns and manages luxury condominiums. The Debtor filed for chapter 11 protection on Feb. 11, 2008 (Bankr. S.D. Fla. Case No. 08-11574). Scott A Underwood, Esq., represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 21 appointed creditors to serve on a Official Committee of Unsecured Creditors in these cases. The Debtor listed assets and debts between $10 million and $50 million. Its three major unsecured creditors are Associated Steel & Aluminium, Coleman Floor Co., and Y.&T. Plumbing Corp., with claims of less than $1 million each. UNIFI INC: Subsidiary Sells South Carolina Assets for $4 Million ---------------------------------------------------------------- Unifi Inc. said in a regulatory filing Friday that its wholly owned subsidiary Unifi Manufacturing Inc. has sold certain real and personal property located in Dillon, South Carolina to 1019 Realty LLC, for $4,000,000. The real and personal property being sold by UMI includes a manufacturing facility of approximately 536,000 square feet and approximately 63 acres of land. Unifi Inc. expects the sale to close on or about March 20, 2008. Mr. Stephen Wener, the chairman of the board of directors of the Unifi Inc., is a manager of 1019 Realty, and has a 13.5% ownership interest in and is the sole manager of an entity which owns 50% of the buyer. About Unifi Inc. Headquartered in Greensboro, North Carolina, Unifi Inc. (NYSE: UFI) -- http://www.unifi.com/ -- is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. Key Unifi brands include, but are not limited to: aio(R) - all-in-one performance yarns, Sorbtek(R), A.M.Y.(R), Mynx(R) UV, Repreve(R), Reflexx(R), MicroVista(R), and Satura(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. * * * As reported in the Troubled Company Reporter on Dec. 14, 2007, Moody's Investors Service downgraded the ratings of Unifi Inc.'s senior secured notes to Caa2 from Caa1, and lowered the company's corporate family rating to Caa1 from B3. Concurrently, Moody's changed the outlook for the ratings to negative. UPSNAP INC: Terminates Merger Agreement with Mobile Greetings ------------------------------------------------------------- UpSNAP Inc. disclosed that its pending merger with Mobile Greetings Inc. has been called off. The company indicated that the financial markets can no longer support the proposed merger. On Aug. 15, 2007, UpSNAP entered into a definitive agreement to merge with Mobile Greetings Inc. Under terms of the merger agreement, which has been approved by both boards of directors, Mobile Greetings shareholders will receive shares equal to 50% of the common stock of the combined company on a fully diluted basis including shares underlying a $2.2 million convertible note being issued as part of the merger consideration, without giving effect to the private placement. As a follow-up to these developments, Tony Philipp, CEO of UpSNAP, has agreed in principle to a contract extension with the company subject to an agreement on the terms and conditions of the contract. Richard Jones, vice-president of content and distribution at UpSNAP and board member, has resigned effective March 5, 2008, from the company. "We really wanted to make this merger work and are glad that the outcome still enables UpSNAP and Mobile Greetings to work together," Mr. Philipp said. "Now that we are moving on from the merger, we are looking forward to new growth and strategic partnership opportunities." About Mobile Greetings Inc. Headquartered in Walnut Creek, California, Mobile Greetings Inc. is a private corporation that has created a mobile distribution platform for the automated delivery of rich media services to mobile handsets. Founded in 2002, Mobile Greetings partners with the media brands to deliver compelling rich media content direct to consumers. About UpSNAP Headquartered in Davidson, North Carolina, UpSNAP Inc. (NASDAQ: UPSN.OB) -- http://www.upsnap.com/-- provides mobile search and live mobile audio entertainment. UpSNAP services include text and audio content from major entertainment companies in sports, news, music, and information. Going Concern Doubt Traci J. Anderson, in Huntersville, North Carolina, expressed substantial doubt about UpSNAP Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditor pointed to UpSNAP's recurring losses from operations. U.S. CONCRETE: Reports $69 Million Net Loss for Year Ended 2007 --------------------------------------------------------------- U.S. Concrete Inc. reported a net loss of $69 million on $803.8 million of revenues for the year ended Dec. 31, 2007, compared to a net loss of $8 million on $728.5 million of revenues in 2006. In a 10-K filing with the U.S. Securities and Exchange Commission, the company's financial statements reflected $80.1 million of net loss on $198.7 million of revenues for the quarter ended Dec. 31, 2007, compared to a net loss of $23.8 million on revenues of $197.1 million in the same prior year period. U.S. Concrete, Inc. also had a net loss from continuing operations of $75.7 million, for the fourth quarter of 2007, compared to a net loss from continuing operations of $23.5 million, or in the fourth quarter of 2006. The net loss from continuing operations for the fourth quarter of 2007 and 2006 included a $76.4 million and $26.8 million after-tax non cash charge, to reduce the carrying value of the company's goodwill in accordance with Statement of Financial Accounting Standards ("SFAS") No. 142. Revenues in the fourth quarter of 2007 were $198.7 million, compared to $197.2 million in the fourth quarter of 2006. Higher ready-mixed concrete prices were partially offset by lower ready- mixed concrete sales volumes and lower precast concrete products revenues. The company's average sales price per cubic yard of ready-mixed concrete during the fourth quarter of 2007 was 5.7% higher, as compared to the fourth quarter of 2006, driven primarily by higher pricing in its Texas markets. On a sequential quarter basis, the company's average sales price per cubic yard of ready-mixed concrete in the fourth quarter of 2007 was 1.5% higher compared to the third quarter of 2007. The company's ready-mixed concrete sales volume in the fourth quarter of 2007 was approximately 1.76 million cubic yards, down 4.0% from approximately 1.83 million cubic yards of ready-mixed concrete sold in the fourth quarter of 2006. This decline in volume reflects the slowdown in residential home construction activity in most of the company's markets. U.S. Concrete also had $646.8 million in total assets, $427.4 million in total liabilities, and a stockholders' equity of $205.1 million in Dec. 31, 2007, compared to Dec. 31, 2006 which saw total assets of $716.6 million, total liabilities of $447 million, and a stockholders' equity of $269.5 million. The company's net cash provided by operations for the fourth quarter of 2007 was $26.9 million, compared to $19.6 million for the fourth quarter of 2006. The company's free cash flow for the fourth quarter of 2007 was $17.0 million, compared to $11.2 million in the fourth quarter of 2006. The company's free cash flow was higher in the fourth quarter of 2007 due primarily to higher receivable collections in the period as compared to the fourth quarter of 2006. The company's net debt at Dec. 31, 2007 was $283.7 million, down $18.6 million from Sept. 30, 2007 due to cash proceeds from asset divestitures and higher operating cash flow. At Dec. 31, 2007, net debt was comprised of total debt of $298.5 million, less cash and cash equivalents of $14.9 million. Discontinued Operations The company has divested certain business units and the operating results and the loss on the sale of these business units have been reflected in "Results of Discontinued Operations" for the fourth quarter of 2007 and the full year 2007, and the comparative prior- year results have been adjusted to reflect such changes in reporting. The company reported a loss from discontinued operations of $4.4 million during the fourth quarter of 2007, including a pre-tax loss on sale of assets of $5.5 million. For the full year 2007, the company reported a loss from discontinued operations of $5.2 million. Based on the current state of its business and backlog, the company expects first quarter 2008 revenues from continuing operations to be in the range of $150 million and $160 million. First quarter 2008 adjusted EBITDA is expected to be in the range of approximately $2 million to $4 million. The company has assumed approximately 38.4 million shares outstanding for its first quarter 2008 earnings per share estimates. About U.S. Concrete Based in Houston, Texas, U.S. Concrete Inc. (NASDAQ: RMIX) -- http://www.us-concrete.com/-- services the construction industry in several markets in the United States through its two business segments: ready-mixed concrete and concrete-related products; and pre-cast concrete. The company has 150 fixed and nine portable ready-mixed concrete plants, 9 pre-cast concrete plants, three concrete block plants and eight aggregates facilities. During 2006, these facilities produced approximately 9.1 million cubic yards of ready-mixed concrete, 4 million eight-inch equivalent block units and 4.6 million tons of aggregates. * * * As reported in the Troubled Company Reporter on Mar. 5, 2008, Moody's Investors Service placed U.S. Concrete's B1 corporate family rating under review for possible downgrade. The review results from the company's significant exposure to the downturn in the residential construction industry, as well as its significant exposure to the softening of the commercial construction industry, and the combined substantial impact of these sectors on demand for concrete products. WESTMORELAND COAL: Sells $15 Million Convertible Notes to Tontine ----------------------------------------------------------------- Westmoreland Coal Company disclosed the sale of $15 million in senior secured convertible notes in a private placement to Tontine Partners L.P. and Tontine Capital Partners L.P. "When we issued our quarterly results for the second quarter of 2007, we reported that we had sufficient capital resources and committed financing arrangements to provide us with adequate liquidity through the fourth quarter of 2007, but that based on our calculations at that time, we did not believe that we had capital resources or committed financing arrangements in place to provide adequate liquidity to meet the cash requirements that we then projected beyond the end of 2007," Keith E. Alessi, Westmoreland's President and CEO, said. "We have worked hard over the last several months to manage our business to conserve cash, but the requirements of our business required that we seek additional capital," Mr. Alessi continued. "We are pleased that Tontine, Westmoreland's largest shareholder, has assisted the company in addressing its liquidity needs by purchasing these notes at a time when the company is still working on its restatement of financial statements for the years ended Dec. 31, 2004, 2005, and 2006, well as the quarters ended March 31 and June 30, 2007." "We expect to complete and issue the restated financial statements shortly," Mr. Alessi stated. "At that time, we also will issue financial statements for the quarter ended Sept. 30, 2007, which were delayed by the restatement." The senior secured convertible notes bear interest at a rate of 9% per annum, with interest payable in cash or in kind at the company's option. The notes are convertible into common stock of the company at a price of $10 per share and mature on March 4, 2013. Houlihan Lokey served as the board's independent financial advisor in connection with the transaction. As part of the transaction, the Standby Purchase Agreement between the company and Tontine entered into on May 2, 2007, was terminated. The Standby Purchase Agreement was originally entered into as a backstop for a proposed rights offering of common stock by the company to its shareholders. The company completed negotiations to refinance its Roanoke Valley Energy Project, Units I and II, which among other things will provide the company with additional liquidity. The company expects that this refinancing will close by mid-March. The company has also engaged a large bank to assist the company in refinancing its existing debt at its Westmoreland Mining LLC subsidiary. The goals of the mining refinancing are to better match debt amortization with cash flows, provide funds for capital investments and provide additional liquidity and flexibility to the company. AMEX Plan Accepted The company also reported that the staff of the American Stock Exchange has accepted the company's updated plan to meet the Amex's continued listing standards and will continue to list the company through the plan period pursuant to an extension. The revised plan contemplates filing the Form 10-Q for the third quarter of 2007 no later than March 31, 2008. The plan was necessitated by the company's inability to file a timely quarterly report on Form 10-Q with the Securities and Exchange Commission for the quarter ended Sept. 30, 2007 because it continues to be engaged in the restatement of post-retirement benefit liabilities. About Westmoreland Coal company Based in Colorado Springs, Colorado, Westmoreland Coal company (AMEX: WLB) -- http://www.westmoreland.com/-- is an independent coal company in the United States and a developer of independent power projects. The company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership and operation of the two-unit ROVA coal-fired power plant in North Carolina, an interest in a natural gas-fired power plant in Colorado, and the operation of four power plants in Virginia. At June 30, 2007, the company's balance sheet showed total assets of $764 million, and total liabilities of $885.2 million, resulting to a total shareholders' deficit of $121.2 million. WILD WEST: Settlement Discussions with Village Charters Continue ---------------------------------------------------------------- Bankrupt Wild West World LLC and Village Charters are continuing talks regarding a $100,000 money that the Debtor paid in 2007 as initial payment to a personal loan, Bill Wilson writes for The Wichita Eagle in Kansas. In December 2007 case, the Debtor's counsel, Tom Gilman at Redmond & Nazar LLP, asserted that Wild West owner Thomas Etheredge paid Village Charters on April 9 and April 23 last year, according to Wichita Eagle. The payments were made within a 90-day window prior to Wild West's bankruptcy on July 9, 2007, hence, they should be reclaimed for creditor distribution, Wichita Eagle quotes Mr. Gilman as stating. Village Charter's counsel, Jeff Arensdorf, Esq., contested that the reclamation of the payments is not required under bankruptcy laws, Wichita Eagle relates. The Hon. Rober Nugent of the U.S. Bankruptcy Court for the District of Kansas intends to hear the issue if talks among the parties prove unsuccessful, Wichita Eagle reports. Mr. Arensdorf told Wichita Eagle that his client doesn't want to bring the issue to court and added that he thinks Wild West doesn't want the issue to reach court as well. Mr. Gilman replaces Edward J. Nazar, Esq., as the Debtor's counsel. According to the report, the Village Charters loan, finalized on Jan. 7, 2007, is among the personal loans that Mr. Etheredge want to reclaim. Most of the loans are from Mr. Etheredge churchmates at Rev. Terry Fox's Summit Church, report adds. About Wild West World Headquartered in Valley Center, Kansas, Wild West World LLC operates an amusement park business. The company filed for Chapter 11 protection on July 9, 2007 (Bankr. D. Kans. Case No. 07-11620). Restoration Farms Inc., Wild West's parent company, filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Kans. Case No. 07-11913). Tom Gilman, Esq., at Redmond & Nazar LLP represents the Debtor in its restructuring efforts. In its schedules filed with the Court, the Debtor disclosed total assets of $22,979,898 and total debts of $25,601,177. WORKFLOW MANAGEMENT: S&P Lowers Corp. Credit Rating to B- from B ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Workflow Management Inc.; the corporate credit rating was lowered to 'B-' from 'B'. All ratings have been removed from CreditWatch, where they were placed with negative implications on Nov. 27, 2007. The rating outlook is negative. "The downgrade reflects our concerns about Workflow's intermediate-term liquidity position, given the relatively tight cushion against its recently amended financial covenants," said Standard & Poor's credit analyst Michael Listner. "Also, amortization payments under the first-lien credit facility will become burdensome again beginning in the first quarter of 2009." In addition, like many industries, printers are facing economic headwinds presently, which may affect the company's ability to grow EBITDA in line with forecasted levels. While the equity injection and amendment to the credit facilities are supportive to credit quality in the short term, operating performance must improve in 2008 for the company to address debt service requirements in the intermediate term. Moreover, while the financial sponsor, Perseus Partners, has recently provided financial support to Workflow, in the absence of material progress in improving operating performance, it is not clear to what extent this support will continue. The ratings on Workflow Management reflect the company's significant debt service requirements, recent operating challenges, intermediate-term concerns about the company's liquidity position, and the susceptibility of the printing industry to economic slowdowns. Last year was a difficult one for Workflow, marked by softness in sales volume and, subsequently, cash flow. Operating performance necessitated covenant revisions in the company's credit facilities, which were recently completed. In order to induce lenders to provide the amendment, and to fund an acquisition, Workflow recently received an equity contribution from its financial sponsor. A portion of this contribution was used to fund scheduled amortization payments on the company's first-lien credit facility. This contribution will prepay the first three quarters of 2008 amortization, or approximately $20.6 million. In addition to funding near-term principal amortization, Perseus has contributed capital to accommodate a moderate-size acquisition. The acquisition of Miami Systems Corp. will serve to expand Workflow's geographic footprint and build on its diverse customer base. The acquisition was completed at the beginning of March and includes the digital print and specialty envelope divisions of the company. While the addition of Miami Systems will serve to enhance the opportunity for cross-selling initiatives to existing customers, S&P expect that the general economic environment will serve to limit any significant upside in the near term. The restoration of operating momentum is paramount to Workflow's long-term success, as significant amortization payments in the amount of $27.5 million are scheduled for 2009. Despite the recent covenant revisions, there exists only a minimal degree of financial cushion for the company based on management's 2008 guidance. WORNICK CO: Can Access DDJ Capital's $35,000,000 DIP Facility ------------------------------------------------------------- The Hon. J. Vincent Aug, Jr., of the the U.S. Bankruptcy Court for the Southern District of Ohio in Cincinnati authorized The Wornick Company and its debtor-affiliates to obtain, on a final basis, cash advances and other extensions of credit on a senior secured, revolving basis, in an aggregate principal amount not to exceed $35,000,000 pursuant to a postpetition credit agreement with DDJ Capital Management, LLC, on behalf of certain funds or accounts managed or advised by DDJ. As reported in the Troubled Company Reporter on Feb. 21, 2008, DDJ will serve as administrative agent for the DIP loan. On Feb. 12, 2008, the Debtors, DDJ Total Return Loan Fund, L.P., and DDJ Capital Management entered into a restructuring support agreement. Under the RSA, the Debtors arranged up to $35 million in post-petition secured financing. In addition, the Debtors entered into a purchase agreement to sell the company's assets to Viren Acquisition Corp., an entity controlled by the DDJ Entities and an ad-hoc group of noteholders who collectively hold more than 50% of the principal amount of $125,000,000 in 10-7/8% Senior Secured Notes due 2011 issued by Wornick. Proceeds of the DIP Loan will be used for the full prepayment in cash of the financing facility the Debtors obtained before it filed for Chapter 11 protection; to pay certain fees and expenses of the Borrower incurred in connection with the DIP Loan; to fund working capital of the Borrower; and to pay amounts otherwise approved by Court orders. Prior to the Debtors' bankruptcy filing, the Debtors' prepetition financing arrangements and working capital requirements were met primarily by: (i) a $25,000,000 Senior Secured Credit Facility with Texas State Bank, which later assigned its rights and obligations under the loan to DDJ Total Return Loan Fund, L.P.; (ii) a $27.5 million increase in the Senior Secured Credit Facility; (iii) the issuance of Senior Secured Notes; and (iv) an issuance of 13.875% Senior PIK Notes due 2011 by TWC Holding LLC and TWC Holding Corp. U.S. Bank National Association serves as indenture trustee with respect to the Senior Secured Notes and Senior PIK Notes. To secure their DIP obligations, the Debtors asked the Court to grant the Lenders: (1) a super-priority administrative expense claim subject only, upon the occurrence and during the continuance of an Event of Default, to a carve-out for bankruptcy court clerk fees, United States Trustee fees, and fees payable to bankruptcy professionals retained in the Debtors' cases; (2) valid and fully-perfect first priority priming liens on and senior security interests in all of the property, assets or interests in property or assets of each Debtor, and all "property of the estate" of each Debtor, subject only to (i) certain permitted priority liens and (ii) the Carve-Out Expenses. The Court also permitted the Debtors to use the cash collateral of their prepetition lenders. As adequate protection for the Debtors' use of the Cash Collateral including to the extent of the aggregate diminution in the value or amount of the Collateral pledged by the Debtors as security for their Prepetition Facility as well as the Secured Notes, the Debtors will grant DDJ Total Return Loan Fund and the Indenture Trustee, for the benefit of the Noteholders, replacement liens. The Debtors will also pay interest in respect of the Prepetition Facility at the prepetition non-default contract rate. The Debtors noted that DDJ Total Return Loan Fund and the Majority Secured Noteholder Group consent to the proposed adequate protection and priming of their liens and interests. Headquartered in Cincinnati, The Wornick Company -- http://www.wornick.com/-- is a leading supplier of individual and group military field rations to the Department of Defense. In addition the company continues to extend its core capabilities to commercial markets where its customers include, but are not limited to, Kraft Foods, Inc., Gerber Products Company, as well as retail and grocery outlets including Walgreens Co., 7-Eleven, The Kroger Co., Publix Super Markets and Meijer. Wornick specializes in the production, packaging, and distribution of shelf-life, shelf-stable, and frozen foods in flexible pouches and semirigid products. The firm's two main lines of business are military rations (approximately 70% of revenues) and co- manufacturing for leading food brands (30%). The company produces both individual (including MRE) and group rations (including Unitized Group Rations-A or UGR-A) for the U.S. military. MREs comprise about 65% of military revenues. The company and and five of its affiliates filed for Chapter 11 protection on Feb. 14, 2008 (Bankr. S.D.O., Case No. 08-10654). Donald W. Mallory, Esq., Kim Martin Lewis , Esq., and Patrick Burns, Esq. at Dinsmore & Shohl LLP represent the Debtors in their restructuring efforts. No trustee, examiner or creditors' committee has been appointed in these chapter 11 cases. The company listed between $100 million and $500 million assets and between $100 million and $500 million in debts in its bankruptcy filing. ZIFF DAVIS: U.S. Trustee Appoints Seven-Member Creditors Committee ------------------------------------------------------------------ Diana G. Adams, the United States Trustee for Region 2, appoints seven members to the Official Committee of Unsecured Creditors of the Chapter 11 cases of Ziff Davis Media, Inc., and its debtor- affiliates. 1. Concordia Partners, L.P. 1350 Avenue of the Americas Suite 3202 New York, New York 10019 Attn: Mr. Robert Capozzi 2. Deutsche Bank Trust Company Americas, as Trustee 60 Wall Street, MS: NYC60-2720 New York, New York 10005-2858 Attn: Mr. Stanley Burg, Vice President 3. Joshua Tree Capital Partners One Maritime Plaza, Suite 750 San Francisco, California 94111 Attn: Mr. Vikas Tandon, Managing Member 4. MHR Fund Management LLC 40 West 57th Street, 24th Floor New York, New York 10019 Attn: Mr. Hal Goldstein, Managing Principal 5. River Run Fund, Ltd. 152 West 57th Street, 52nd Floor New York, New York 10019 Attn: Mr. Ian G. Wallace, Managing Member 6. RR Donnelley & Sons Company 3075 Highland Parkway Downers Grove, Illinois 60515 Attn: Mr. Dan Pevonka, Sr. Credit Manager 7. Sony Computer Entertainment 919 East Hillsdale Blvd, 2nd Floor Foster City, California 94404-2175 Attn: Mr. John Kilcullen, Sr. Director Finance Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. ZIFF DAVIS: Alan W. Kornberg Discloses Creditor Representation -------------------------------------------------------------- Alan W. Kornberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, discloses that his firm represents eight creditors in the Chapter 11 Cases of Ziff David Media Inc. and its debtor-affiliates: (a) Blackport Capital Fund Ltd. 345 Park Avenue New York, NY 10154 Tel: (212) 583-5411 Fax: (212) 583-5651 (b) Dune Capital Management LP 623 5th Avenue, 30th Floor New York, NY 10022 Tel: (212) 301-8400 Fax: (646) 885-2471 (c) MacKay Shields LLC 9 West 57th Street New York, NY 10019 Tel: (212) 230-3920 Fax: (212) 754-9187 (d) Mast Capital Management, LLC 535 Boylston Street, Suite 401 Boston, MA 02116 Tel: (617) 375-3000 Fax: (617) 247-7985 (e) Perry Capital 767 Fifth Avenue New York, NY 10153 Tel: (212) 583-4000 Fax: (212) 583-4040 (f) Stonehill Capital Management 885 Third Avenue, 30th Floor New York, NY 10022 Tel: (212) 739-7474 Fax: (212) 838-2291 (g) Strategic Value Partners 80 Field Point Road Greenwich, CT 06830 Tel: (203) 618-3576 Fax: (203) 618-3501 (h) Tennenbaum Capital Partners, LLC 2951 28th Street Santa Monica, CA 90405 Tel: (310) 566-1015 Fax: (310) 899-4950 The nature of the claims held by the eight creditors include, but not limited to, senior secured note claims arising under certain senior secured floating rate notes due 2012 issued by the Debtors pursuant to an indenture dated as of April 22, 2005, between the Debtors and U.S. Bank National Association, as trustee and collateral agent. The eight creditors holds an aggregate principal amount of claims in excess of $154,000,000. "Paul Weiss does not own any claims against or equity interests in the Debtors," states Mr. Kornberg. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 3, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Allowed to Pay Wages, Benefits Prior to Bankruptcy -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Ziff Davis Media Inc. and its debtor-affiliates to honor and pay its pre-bankruptcy wages, salaries, and employee benefits, on an interim basis. Furthermore, the Debtors are also authorized to (i) continue to allocate and distribute the deductions and the payroll taxes, (ii) pay the reimbursable expenses, and the prepetition amounts owed in connection with the incentive programs, and (ii) honor the employee benefit programs and make any necessary contributions to the programs and pay any unpaid premium, claim, or amount owed as of the Petition Date. The final hearing is set for March 27, 2008, at 10:00 a.m. Any objection to the relief sought by the Debtors must (a) be filed in writing with the Court, with a copy to the judge's chambers by 4:00 p.m. Eastern time, March 24, 2008, and (b) served on (i) the U.S. Trustee, (ii) counsel for the Debtors, (iii) counsel for the ad hoc committee of senior secured floating rate noteholders, (iv) counsel for the ad hoc committee of senior compounding noteholders, and (v) counsel to the Official Committee of Unsecured Creditors appointed in the Chapter 11 cases. The Troubled Company Reporter reported on March 12, 2008 that as of the bankruptcy filing date, the Debtors and their non-debtor affiliates employ roughly 266 employees, of whom 258 are full-time employees, and roughly eight are part-time employees. Approximately 20 employees are paid on an hourly basis, and 246 employees are paid salary. None of the Employees are unionized, and none of the Debtors are party to any collective bargaining agreements, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, the Debtors' proposed counsel, tells the Court. The Employees' skills and their knowledge and understanding of the Debtors' operations, customer relations, and infrastructure are essential to the effective reorganization of the Debtors' businesses, Mr. Schreiber noted. To minimize the personal hardship that the Employees would suffer if prepetition Employee-related obligations are not paid when due, or as expected, and to maintain morale and stability in the Debtors' workforce during this critical time, the Debtors, sought the Court's authority to: -- pay pre-bankruptcy wages, salaries, and employee benefits; -- continue the Debtors' employee benefit programs in the ordinary course of business; -- pay all fees and costs to third-party administrators, temporary employment agencies and temporary employees. Mr. Schreiber related that the Debtors incur payroll obligations to the Employees, which are generally comprised of wages and salaries, but may also include incentive bonuses awarded for sales productivity and goal attainment. Approximately 95% of the Debtors' payroll is made by direct deposit through electronic transfer of funds directly to Employees, with the other 5% of Employees receiving checks. On average, Mr. Schreiber told the Court, the Debtors have gross payroll expenses of approximately $2,500,000 per month. The Debtors outsource their payroll to a payroll services company, ProBusiness Services Inc., which is also responsible for paying all the withholdings and payroll taxes to the applicable third parties. The Debtors estimate that, as of the Petition Date, roughly $290,000 in prepetition accrued wages, salaries, and other compensation earned prior to the Petition Date remains unpaid. The Debtors also sought the Court's permission to pay one Employee $11,028, notwithstanding that the amount is in excess of a monthly cap for $10,950. Under the new amendments to the Bankruptcy Code adopted on April 20, 2005, the claim amount for wages and salaries that is entitled to priority under Section 507(a) of the Bankruptcy Code was increased from $4,925 per employee to $10,000 per employee, effective immediately upon enactment. On April 1, 2007, the amount was automatically adjusted to $10,950 pursuant to Section 104(b) of the Bankruptcy Code. Deductions and Withholdings During each applicable pay period, the Debtors routinely deduct certain amounts from paychecks, including, without limitation, (i) garnishments, child support, and similar deductions, and (ii) other pre-tax and after-tax deductions payable pursuant to certain Employee benefit plans of the Debtors. The amount of the Deductions are subsequently forwarded by the Debtors to the appropriate third-party recipients. The Debtors estimate that as of the Petition Date, approximately $15,000 in Deductions have not been forwarded to the appropriate third-party recipients, Mr. Schreiber discloses. Moreover, the Debtors are required by law to withhold from an Employee's wages amounts related to federal, state and local income taxes, social security and Medicare taxes for remittance to the appropriate federal, state, or local taxing authority. According to Mr. Schreiber, the Withheld Amounts total about $660,000 per month. The Debtors estimate that as of the Petition Date, less than $10,000 in Payroll Taxes have not been forwarded to the appropriate Taxing Authorities. Reimbursement of Expenses Prior to the Petition Date and in the ordinary course of their business, the Debtors reimbursed Employees for certain reasonable and customary expenses incurred on behalf of the Debtors in the scope of their employment, including travel expenses for meals, hotels and rental cars; business development expenses; automobile gas mileage expenses and telephone expenses. The Debtors estimate that requests for reimbursement of prepetition expenses will not exceed $25,000. Prepetition Incentive Programs To incentivize their Employees, and to maximize advertising sales which constitute a significant portion of their revenue, the Debtors offer their Employees certain bonuses: * A non-management sales incentive program, under which Employees can earn in addition to base salary, for a percentage of the revenue that the Debtors recognize generated by that Employee's sales of advertising for the Debtors' print publications or Web sites; and * An annual management incentive target bonus program available to management-level employees, which is designed to focus the attention of participants on results that are directly tied to the Debtors' performance, and to share in that success by providing financial rewards to selected individuals who make major contributions toward the Debtors' goals. According to Mr. Schreiber, the Debtors' unpaid obligations under the Non-Management Sales Incentive Program is for $100,000; and an amount not exceeding $600,000 for the Annual Management Incentive Program. Employee Benefits The Debtors offer the Employees the ability to participate in a number of insurance and benefits programs, including: (a) Health Benefits The Debtors offer fully-insured and self-insured health insurance to their Employees for medical, dental and vision insurance coverage. (b) Workers' Compensation The Debtors provide workers' compensation insurance for their Employees at the statutorily-required level for each state. These benefits are currently provided for Employees through Chubb/Federal Insurance Company. Mr. Schreiber notes that the Debtors did not incur any overall costs associated with the Workers' Compensation Programs in 2007. (c) Vacation, Sick Leave and Other Leaves of Absence The Debtors provide vacation time to their Full-Time Employees and part time employees working at least 20 hours as a paid time-off benefit, which is generally determined by the Employee's length of employment. The Debtors estimate that approximately $300,000 of earned but unused Vacation Time will have accrued as of the Petition Date, according to Mr. Schreiber. (d) Employee Savings and Retirement Plans Employees are automatically eligible to participate in the 401(k) Plan, which allows for automatic pre-tax salary deductions of eligible compensation up to the limits set by the Internal Revenue Code. The Debtors estimate that as of the Petition Date, they have paid all of the prepetition matching contributions owed pursuant to the 401(k) Plan. (e) Additional Employee Benefits The Debtors provide Employees with primary life insurance, accidental death and dismemberment insurance, short and long-term disability benefits, and business accident insurance. Mr. Schreiber says that as of the Petition Date, the Debtors do not owe any amounts with respect to the Additional Employee Benefits. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 3, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Court Grants Motion to Extend Time to File Schedules ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended the time for Ziff Davis Media Inc. and its debtor- affiliates to file their statements of financial affairs and schedules of assets and liabilities for 30 days to and including April 21, 2008, without prejudice to the Debtors' rights to seek an additional extension upon cause shown therefor. The Court authorizes the Office of the United States Trustee to schedule the meeting of creditors required by Section 341 of the Bankruptcy Code more than 40 days after the Petition Date. As reported by the Troubled Company Reporter on March 12, 2008, the Debtors asked the the Court to: (a) extend the time within which they are required to file their Statements and Schedules for an additional 30 days, to April 21, 2008, without prejudice to the Debtors' ability to request additional time should it become necessary; and (b) to the extent necessary, authorize the U.S. Trustee to schedule a meeting with creditors under Section 341 of the Bankruptcy Code, more than 40 days following the Petition Date -- notwithstanding Rule 2003(a) of the Federal Rules of Bankruptcy Procedure. The Debtors have more than 3,000 creditors and other parties-in- interest in their Chapter 11 proceedings, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, the Debtors' proposed counsel, states. Given the size and complexity of the Debtors' business operations, preparing their Statements and Schedules accurately and with sufficient detail will require significant attention from the Debtors' personnel and advisors. Without an extension of time, the preparations would distract attention from the Debtors' business operations at a critical time when the business can ill afford any disturbance. Moreover, creditors and other parties in interest will not be harmed by the Debtors' proposed extension of the filing deadline, because, even under the extended deadline, the Statements and Schedules would be filed in advance of any planned bar date or other significant event in the Debtors' bankruptcy cases. Mr. Schreiber notes that Bankruptcy Rule 2003(a) provides that in a Chapter 11 case, the United States Trustee will call a meeting of creditors to be held no fewer than 20 -- and no more than 40 --days after the Petition Date. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. (Ziff Davis Bankruptcy News, Issue No. 2, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) (Ziff Davis Bankruptcy News, Issue No. 3, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) * Fitch Says Home Prices Decline Yield to Bank Home Equity Losses ----------------------------------------------------------------- Fitch Ratings reported that continued declines in home prices, high consumer debt levels, and slowing economic trends have all combined to yield increasing losses in many bank home equity portfolios and that credit losses are expected to accelerate in 2008. On March 7, 2008, Fitch took negative rating actions on eight large U.S. banking institutions, based, in part, on their exposure to home equity and other consumer loans, as well as Fitch's belief that future losses will be much higher than previously anticipated. Further rating action in the sector will not likely be driven by home equity exposure alone, although it continues to be a greater concern for several issuers. John Mackerey, Senior Director in Fitch's Financial Institutions group said, 'Risk layering has come back to haunt a number of financial institutions in both the residential mortgage and home equity space.' Loans originated through third-parties, loans collateralized by property in markets with more home price depreciation and/or higher current loan-to-value ratios, and loans with anything less than full borrower documentation are generally exhibiting more stress. A particularly toxic situation emerges when more than one of these characteristics is layered onto the product. In a special report, Fitch conducts a review of the largest banks with particular attention paid to those with the highest home equity exposure as a percent of their total loan portfolio. To the extent possible, Fitch have factored in the relative risks associated with the risk-layering characteristics referred to above. Challenges in home equity lending are expected to persist throughout 2008 and into 2009, as many banks had aggressively grown their portfolios in recent years and continue to have exposure to un-drawn home equity lines of credit. In this report, Fitch discusses: -- Bank home equity exposure as a percent of balance sheet categories; -- Loan characteristics posing highest portfolio risk; -- Relative credit metrics of banks with largest exposures; and -- Potential impact of higher credit losses on bank profitability. * S&P Lowers Ratings on 90 Tranches from 16 US Hybrid CDOs ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 90 tranches from 16 U.S. cash flow and hybrid collateralized debt obligation transactions. S&P removed 67 of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on three tranches. The ratings on 14 tranches from four of the downgraded transactions remain on CreditWatch negative, indicating a significant likelihood of further downgrades. The downgraded tranches have a total issuance amount of $17.756 billion. Five of the 16 transactions are mezzanine structured finance CDOs of asset-backed securities, which are CDOs of ABS collateralized in large part by mezzanine tranches of residential mortgage-backed securities and other SF securities. Eight of the 16 transactions are high-grade SF CDOs of ABS, which are CDOs collateralized at origination primarily by 'AAA' through 'A' rated tranches of RMBS and other SF securities. The other three transactions are CDO of CDO transactions that were collateralized at origination primarily by notes from other CDOs, as well as by tranches from RMBS and other SF transactions. The CDO downgrades reflect a number of factors, including credit deterioration and recent negative rating actions on U.S. subprime RMBS securities, as well as changes Standard & Poor's has made to the recovery rate and correlation assumptions it uses to assess U.S. RMBS held within CDO collateral pools. To date, including the CDO tranches listed below and actions on both publicly and confidentially rated tranches, S&P have lowered its ratings on 2,609 tranches from 621 U.S. cash flow, hybrid, and synthetic CDO transactions as a result of stress in the U.S. residential mortgage market and credit deterioration of U.S. RMBS. In addition, 898 ratings from 213 transactions are currently on CreditWatch negative for the same reasons. In all, S&P have downgraded $232.088 billion of CDO issuance. Additionally, S&P's ratings on $125.330 billion in securities have not been lowered but are currently on CreditWatch negative, indicating a high likelihood of downgrades. Rating and Creditwatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- 6th Avenue Funding 2006-1 Ltd A-1A BB- AAA/Watch Neg 6th Avenue Funding 2006-1 Ltd A-1B BB- AAA/Watch Neg 6th Avenue Funding 2006-1 Ltd A-2 CCC- AAA/Watch Neg 6th Avenue Funding 2006-1 Ltd B CC AA/Watch Neg 6th Avenue Funding 2006-1 Ltd C CC A/Watch Neg 6th Avenue Funding 2006-1 Ltd D CC BBB/Watch Neg 6th Avenue Funding 2006-1 Ltd X A+ AAA/Watch Neg Big Horn Structured Fndng CDO A CC AAA/Watch Neg 2007-1 Big Horn Structured Fndng CDO B CC AA/Watch Neg 2007-1 Big Horn Structured Fndng C CC A/Watch Neg CDO 2007-1 Big Horn Structured Fndng D CC BBB/Watch Neg CDO 2007-1 Big Horn Structured Fndng Jr Swap CC AAA/Watch Neg CDO 2007-1 Big Horn Structured Fndng S CC AAA/Watch Neg CDO 2007-1 Big Horn Structured Fndng SprSr Swap CCC- AAA/Watch Neg CDO 2007-1 Brooklyn Structured Finance A-1J C-/WchNeg AA+/Watch Neg CDO Ltd Brooklyn Structured Finance A-1S B/WchNeg AAA/Watch Neg CDO Ltd Brooklyn Structured Finance A-2L CC A-/Watch Neg CDO Ltd Brooklyn Structured Finance A-3L CC B-/Watch Neg CDO Ltd Brooklyn Structured Finance B CC CCC-/Watch Neg CDO Ltd Diversey Harbor ABS CDO Ltd A-1M AA+ AAA/Watch Neg Diversey Harbor ABS CDO Ltd A-1Q AA+ AAA/Watch Neg Diversey Harbor ABS CDO Ltd A-2 A AA+/Watch Neg Diversey Harbor ABS CDO Ltd A-3 CC CCC-/Watch Neg Duke Funding XI Ltd. A-1E BBB- AAA Duke Funding XI Ltd. A-2E BB AA Duke Funding XI Ltd. A-3E B+ A Duke Funding XI Ltd. B-1E CCC- BBB/Watch Neg Duke Funding XI Ltd. Sr Swap AA- AAA Duke Funding XI Ltd. X BBB+ AAA Forge ABS High Grade CDO I Ltd. A1 BB-/WchNeg AAA/Watch Neg Forge ABS High Grade CDO I Ltd. A2 CCC+/WchNeg AAA/Watch Neg Forge ABS High Grade CDO I Ltd. A3 CCC-/WchNeg AAA/Watch Neg Forge ABS High Grade CDO I Ltd. A4 CC AAA/Watch Neg Forge ABS High Grade CDO I Ltd. B CC AA/Watch Neg Forge ABS High Grade CDO I Ltd. C CC AA-/Watch Neg Forge ABS High Grade CDO I Ltd. D CC A/Watch Neg Forge ABS High Grade CDO I Ltd. E CC BBB/Watch Neg Grand Avenue CDO III Ltd A-1 B+/WchNeg AAA/Watch Neg Grand Avenue CDO III Ltd A-2 CCC/WchNeg AAA/Watch Neg Grand Avenue CDO III Ltd A-3 CCC-/WchNeg AAA/Watch Neg Grand Avenue CDO III Ltd B CC AA-/Watch Neg Grand Avenue CDO III Ltd C-1 CC A-/Watch Neg Grand Avenue CDO III Ltd C-2 CC BBB+/Watch Neg Grand Avenue CDO III Ltd D CC BBB-/Watch Neg HSPI Diversified CDO Fund I Ltd. S AAA AAA/Watch Neg HSPI Diversified CDO Fund I Ltd. A-1 BB AAA/Watch Neg HSPI Diversified CDO Fund I Ltd. A-2 B- AAA/Watch Neg HSPI Diversified CDO Fund I Ltd. A-3 CCC- AA/Watch Neg HSPI Diversified CDO Fund I Ltd. B CC A/Watch Neg HSPI Diversified CDO Fund I Ltd. C CC BBB/Watch Neg Khaleej II CDO Ltd. A BB+ AAA Khaleej II CDO Ltd. B B AA/Watch Neg Khaleej II CDO Ltd. C CCC A-/Watch Neg Khaleej II CDO Ltd. D CCC- BBB-/Watch Neg Kleros Preferred Funding IV Ltd PrncPrtNts AAA AAA/Watch Neg Kleros Preferred Funding IV Ltd A-1 BBB- AAA/Watch Neg Kleros Preferred Funding IV Ltd A-2 B+ AAA/Watch Neg Kleros Preferred Funding IV Ltd A-3 CCC- A+/Watch Neg Kleros Preferred Funding IV Ltd A-4 CC BB-/Watch Neg Kleros Preferred Funding IV Ltd B CC CCC-/Watch Neg Kleros Preferred Funding VI Ltd. A-1J CC BBB/Watch Neg Kleros Preferred Funding VI Ltd. A-1S-1A CCC+ AAA/Watch Neg Kleros Preferred Funding VI Ltd. A-1S-1B CCC+ AAA/Watch Neg Kleros Preferred Funding VI Ltd. A-1S-2 CCC- AAA/Watch Neg Kleros Preferred Funding VI Ltd. A-2 CC B/Watch Neg Palisades CDO Ltd. A-2 AAA AAA/Watch Neg Palisades CDO Ltd. B-1 BBB AA/Watch Neg Palisades CDO Ltd. B-2 BBB AA/Watch Neg Palisades CDO Ltd. C-1 B BBB/Watch Neg Palisades CDO Ltd. C-2 B BBB/Watch Neg Palisades CDO Ltd. Type II BB+ BBB/Watch Neg Pinnacle Peak CDO I Ltd A1M A+/WchNeg AAA/Watch Neg Pinnacle Peak CDO I Ltd A1Q A+/WchNeg AAA/Watch Neg Pinnacle Peak CDO I Ltd A2 CCC/WchNeg AAA/Watch Neg Pinnacle Peak CDO I Ltd A3 CC BBB+/Watch Neg Pinnacle Peak CDO I Ltd A4 CC B/Watch Neg RFC CDO III Ltd. A-2 AA AAA RFC CDO III Ltd. B A AA RFC CDO III Ltd. C BBB A RFC CDO III Ltd. D BB BBB/Watch Neg Tenorite CDO I Ltd. Liq Fac BB/WchNeg AAA Tenorite CDO I Ltd. B CCC-/WchNeg AAA/Watch Neg Tenorite CDO I Ltd. C CCC-/WchNeg AAA/Watch Neg Tenorite CDO I Ltd. D CC AA/Watch Neg Tenorite CDO I Ltd. E CC A/Watch Neg Tenorite CDO I Ltd. F CC BBB/Watch Neg Tenorite CDO I Ltd. F2 CC BBB/Watch Neg West Trade Funding CDO I Ltd A-1 B AAA/Watch Neg West Trade Funding CDO I Ltd A-2 CCC+ AA+/Watch Neg West Trade Funding CDO I Ltd B CCC A+/Watch Neg West Trade Funding CDO I Ltd C CCC- BBB+/Watch Neg West Trade Funding CDO I Ltd D CC BB+/Watch Neg West Trade Funding CDO I Ltd E CC CCC+/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Brooklyn Structured Finance CDO Ltd C CC Diversey Harbor ABS CDO Ltd A-4 CC Diversey Harbor ABS CDO Ltd B CC Diversey Harbor ABS CDO Ltd C CC Kleros Preferred Funding IV Ltd C CC Kleros Preferred Funding IV Ltd D CC Kleros Preferred Funding IV Ltd E CC Kleros Preferred Funding IV Ltd F CC Kleros Preferred Funding VI Ltd. A-3 CC Kleros Preferred Funding VI Ltd. B CC Palisades CDO Ltd. A-1A AAA Palisades CDO Ltd. A-1B AAA Pinnacle Peak CDO I Ltd B CC Pinnacle Peak CDO I Ltd C CC * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------ ------- Absolute Software ABT (3) 83 30 AFC Enterprises AFCE (40) 155 (20) Alaska Comm Sys ALSK (28) 557 24 Alesco Financial AFN (2,380) 8,935 N.A. APP Pharmaceutic APPX (80) 1,077 214 Bare Escentuals BARE (104) 224 84 Blount Intl BLT (54) 412 129 CableVision System CVC (5,097) 9,141 (607) Carrols Restaurant TAST (13) 463 (29) Centennial Comm CYCL (1,063) 1,343 14 Cheniere Energy CQP (228) 1,905 146 Cheniere Energy LNG (16) 2,962 428 Choice Hotels CHH (157) 328 (42) Cincinnati Bell CBB (668) 2,020 0 Claymont Stell PLTE (40) 158 80 Compass Minerals CMP (5) 820 201 Corel Corp. CRE (14) 266 (15) Crown Media HL CRWN (684) 676 4 CV Therapheutics CVTX (185) 259 177 Cyberonics CYBX (15) 136 (15) Deltek Inc PROJ (86) 166 (28) Domino's Pizza DPZ (1,450) 473 51 Dun & Bradstreet DNB (437) 1,659 (192) Einstein Noah Re BACL (34) 149 4 Extendicare Real EXE-U (24) 1,440 (15) Gencorp Inc. GY (52) 995 77 General Motors GM (35,480) 148,883 (9,720) Healthsouth Corp. HLS (1,070) 2,051 (331) Human Genome Sci HGSI (12) 949 47 IDEARC Inc IAR (8,600) 1,667 205 IMAX Corp IMAX (77) 213 0 IMAX Corp IMX (77) 213 0 Incyte Corp INCY (160) 276 228 Indevus Pharma IDEV (86) 199 40 Intermune Inc ITMN (31) 262 209 IPCS Inc IPCS (40) 547 76 Knology Inc KNOL (35) 619 7 Koppers Holdings KOP (14) 669 189 Life Sciences Re LSR (29) 502 1 Linear Tech Corp LLTC (564) 1,410 912 Lodgenet Interac LNET (48) 694 8 Maxxam Inc MXM (242) 544 120 Mediacom Comm-A MCCC (253) 3,615 (268) Moody's Corp MCO (784) 1,715 (360) National Cinemed NCMI (572) 464 67 Navistar Intl NAVZ (1,699) 10,786 164 Nexstar Broadcasting NXST (89) 709 (11) NPS Pharm Inc NPSP (210) 361 119 Primedia Inc PRM (129) 282 6 Protection One PONE (13) 675 (287) Radnet Inc RDNT (53) 434 41 Redwood Trust RWT (718) 9,938 N.A. Regal Entertai-A RGC (119) 2,635 (2) Riviera Holdings RIV (42) 219 18 RSC Holdings Inc RRR (44) 3,460 (128) Rural Cellular-A RCCC (595) 1,328 98 Sally Beauty Hol SBH (745) 1,440 414 Sealy Corp. ZZ (113) 1,025 22 Solutia Inc SOA (1,449) 2,638 (293) Sonic Corp SONC (102) 765 (27) Spectrum Brands SPC (141) 3,265 828 St John Knits Inc SJKI (52) 213 80 Station Casinos STN (291) 3,932 (50) Stelco Inc STE (64) 2,657 693 Theravance THRX (66) 162 101 UST Inc UST (292) 1,487 446 Valence Tech VLNC (61) 20 8 Voyager Learning VLCY (53) 917 (637) Warner Music Gro WMG (47) 4,599 (764) Weight Watchers WTW (926) 1,046 (172) WR Grace & Co. GRA (316) 3,869 (1,057) XM Satellite-A XMSR (925) 1,609 (403) ZIX Corp ZIXI 0 19 (1) ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***