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/raid1/www/Hosts/bankrupt/TCR_Public/080327.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, March 27, 2008, Vol. 12, No. 73 Headlines AAMES MORTGAGE: S&P Rating on Class M6 Tumbles to 'D' on Losses ABITIBIBOWATER INC: Abitibi-Consolidated Has Substantial Doubt ABITIBIBOWATER INC: Moody's Rates Unit's $450MM Loan at B1 ADVANCED LIVING: Court Approves Disclosure Statement ADVANCED LIVING: Court Sets Plan Confirmation Hearing on April 30 AFFILIATED COMPUTER: Communications Dev't. Buyout to Augment Biz AFFIRMATIVE INSURANCE: Tangible Fin'l Cues A.M. Best to Hold Rtngs ALEX VALLADARES: Case Summary & 17 Largest Unsecured Creditors ALKERMES INC: Reduces 18% of Workforce Under Restructuring Plan AMERICAN TECH: Jan. 31 Balance Sheet Upside-Down by $6,005,831 ANTHONY ENRICO: Case Summary & 10 Largest Un4secured Creditors BARCLAYS CAPITAL: S&P Holds Developing Watch on Cl. G's BB+ Rating BEAR STEARNS: Launches First Actively Managed Exchange Traded Fund BEAR STEARNS: Moody's Rates Current Yield Fund At 'Aaa' and 'MR1' BEAR STEARNS: S&P Assigns AAAf and S1+ Rating on Current Yield ETF BEAR STEARNS: Fitch Junks Ratings on Six Certificate Classes BFWEST LLC: Files for Chapter 11 Protection in Southern Florida BLACK GOLD: Case Summary & 20 Largest Unsecured Creditors CA INC: Appoints Michael Christenson as President CANADIAN TRUSTS: ABCP Trusts' CCAA Restructuring Database CANADIAN TRUSTS: Pan-Canadian Committee Files Restructuring Plan CANADIAN TRUSTS: ABCP Noteholders to Hold Meeting on April 25 CANADIAN TRUSTS: Ernst & Young's First Report on ABCP Trusts CANADIAN TRUSTS: Coventree OKs Committee's Call to Vote on Plan CBRE REALTY: S&P Holds Ratings on CDO Exposed to Macklowe Debt CHARMING SHOPPES: Weak Performance Cues Moody's Rating Cut to 'B2' CHARTER COMM: Affiliate Completes $500 Mil. Offering of Term Loans CIT HOME: Realized Losses Cues S&P's 'D' Rating on Class BV Certs. CLASSICSTAR LLC: U.S. Trustee Wants Chapter 11 Case Converted CLEAR CHANNEL: Buyers Sue Financial Backers to Pursue $19BB Deal COMVERSE TECHNOLOGY: Receives Wells Notice from SEC Staff CREDIT SUISSE: Limited Paydown Cues Fitch to Affirm Ratings DEATH ROW: Withdraws Request for Approval of Asset Sale Procedures DEATH ROW: Ch. 11 Trustee Cancels Request to OK Tupac Settlement DELPHI CORP: Court OKs $46.2MM Wheel Bearing Biz Sale to Kyklos DENNY'S CORP: Weak Performance Spurs S&P to Give Negative Outlook DLJ COMMERCIAL: Fitch Junks Rating on $9MM Class B-7 Certificates EL PASO: Completes $752 Million Sale of Three Gulf Properties ENRON CORP: To Get $1 Bil. as Claims Settlement from Citigroup ESTYLE INC: Slow Economy and Low Mall Traffic Sparks Ch. 11 Filing ESTYLE INC: Case Summary & 20 Largest Unsecured Creditors E*TRADE FINANCIAL: President and COO Leaving Effective May 16 FEDERAL-MOGUL: Court OKs Section 524 Transfer of Insurance Rights FIRST NATIONWIDE: Fitch Affirms 'B' Rating on Cl. B-2 Certificates FORD MOTOR: Selling Jaguar & Land Rover to Tata Motors for $2.3BB GENERAL MOTORS: May Close Ohio Brake Part Plant Due to Axle Strike GRAIN DEALERS: A.M. Best Lifts FS Rating to B+(Good) from B(Fair) GRAND CIRCLE: S&P Puts 'B' Corporate Rating on High Debt Leverage GREEKTOWN HOLDINGS: S&P Chips Rating to 'B-' on Liquidity Concerns GREENWOOD RACING: S&P Changes Outlook to Positive; Holds B+ Rating HARMONY ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors HARVEY ELECTRONICS: Court OKs Interim Financing & Store Closings HEALTH CHEM: June 30 Balance Sheet Upside-Down by $16,434,000 HEALTHY DIRECTIONS: Moody's Withdraws Ratings on Business Reasons HOLLINGER INC: Inks Settlement Agreement with Sun-Times Media HOLLINGER INC: US SEC Accepts Offer of Settlement and Consent HOLLY ENERGY: Moody's Holds 'Ba3' Ratings on $180 Mil. Acquisition HOOP HOLDINGS: Files for Chapter 11 Protection in Delaware HOOP HOLDINGS: Case Summary & 60 Largest Unsecured Creditors INNOVATIVE PROPERTIES: Case Summary & 39 Largest Unsec. Creditors INOVA TECHNOLOGY: Jan. 31 Balance Sheet Upside-Down by $271,437 INTERMEC INC: Narrow Business Profile Prompts S&P's 'BB-' Rating IRON MOUNTAIN: Moody's Upgrades Corp. Family Rating to B1 From B2 IWORLD PROJECTS: Involuntary Chapter 11 Case Summary JECO INC: Case Summary & 18 Largest Unsecured Creditors JOHN PIAZZA: Voluntary Chapter 11 Case Summary JP MORGAN: Stable Performance Cues Fitch to Affirm Ratings JP MORGAN: Fitch Holds 'B' Rating on $1.3MM Class N Certificates KLBL LLC: Voluntary Chapter 11 Case Summary LEINER HEALTH: Wants to Hire Houlihan Lokey as Financial Advisors LEINER HEALTH: Wants to Hire Kirkland & Ellis as Bankr. Counsel LEINER HEALTH: Wants Court to Set June 16 as Claims Bar Date LOGAN'S ROADHOUSE: S&P Changes Outlook to Stable; Keeps B- Rating MACKLOWE PROPERTIES: Market Woes Slow Down GM Building Sale MACKLOWE PROPERTIES: S&P Holds CBRE CDO Rating Affecting $7BB Debt MARCAL PAPER: Court Approves Amended Disclosure Statement MARK BOSWORTH: Voluntary Chapter 11 Case Summary MASTR 2005-HE1: Class M-11 Acquires S&P's 'D' Rating on Losses MASTR 2006-FRE2: S&P Cuts Rating on Class M-11 to 'D' on Losses MAXJET AIRWAYS: Court Extends Ch. 11 Plan Filing Period to Aug. 20 MILLER PETROLEUM: Jan. 31 Balance Sheet Upside-Down by $1,719,228 MM NEWTOWN: Voluntary Chapter 11 Case Summary MONEYGRAM INT'L: Completes Deal with Investors on Recapitalization MORGAN STANLEY: Moody's Retains 'Ba1' Rating on Class N-SDF Certs. MOSAIC COMPANY: S&P Maintains 'BB+' Rating With Positive Outlook MOTOROLA INC: Moody's to Review Ratings on Turnaround Delays NASH FINCH: Moody's Affirms 'B2' Ratings on With Positive Outlook PACIFICNET INC: Involuntary Chapter 11 Case Summary PCI GAMING: Moody's Holds B1 Ratings on High Margins and Cash Flow PHILLIP NMN: Case Summary & 17 Largest Unsecured Creditors PLASTECH ENGINEERED: Chrysler's Reliance on BBK's Advice Probed PLASTECH ENGINEERED: Court OKs Skadden Arps as Bankruptcy Counsel PLASTECH ENGINEERED: Can Hire Jones Day as Special Counsel PLASTECH ENGINEERED: Can Hire PricewaterhouseCoopers as Accountant PRIME MORTGAGE: S&P Junks Class B-3's Rating on High Delinquencies PROTECTED VEHICLES: Public Excluded from Ch. 11 Conversion Hearing QUAKER FABRIC: Wants Exclusive Plan Filing Period Extended QUALITY DISTRIBUTION: Impact of Losses Cues Moody's Stable Outlook QUEBECOR WORLD: Wants to Buy Bombardier Aircraft for $12 Million RAMP 2002-RS1: Adverse Performance Prompts S&P's Rating Downgrades REED HARRISON: Case Summary & 18 Largest Unsecured Creditors RICHFX INC: Lack of Financing from Parent Spurs Bankruptcy Filing RICHFX INC: Case Summary & 20 Largest Unsecured Creditors ROUNDTABLE PROPERTIES: Voluntary Chapter 11 Case Summary SACRAMENTO-YOLO PORT: Moody's Lifts Rating on Revenue Bonds at Ba3 SALANDER-O'REILLY: Has Until June 7 to File Chapter 11 Plan SALLY HOLDINGS: S&P Changes Outlook to Positive; Holds 'B' Rating SANDIA DEL SOL: Case Summary & Largest Unsecured Creditor SEA CONTAINERS: Wants Court to Reject $2 Bil. in Duplicate Claims SENDTEC INC: Inks Contract with Convertible Debenture Holders SI INTERNATIONAL: Board OKs Increase of Stock Repurchase Program SIRVA INC: Committee Wants to Hire BDO Seidman as Accountant SIRVA INC: Committee et al. Object to Request for Class 5 Panel SIRVA INC: IFL et al. Object to Adequacy of Disclosure Statement SIRVA INC: Triple Net Objects to Confirmation Discovery Schedule SIRVA INC: Panel Has Until April 11 to Object to DIP Financing SMIDTH & CO: Case Summary & Five Largest Unsecured Creditors SOUTH CAMPUS: Case Summary & 20 Largest Unsecured Creditors SPARTA COMMERCIAL: Jan. 31 Balance Sheet Upside-Down by $3,586,038 SPYRUS INC: Gets Initial Approval to Use $2 Million DIP Facility STATE STREET: Paying $0.23/Share Quarterly Dividend on April 15 STRUCTURED ASSET: Fitch Holds Low-B Ratings on 13 Certificates SUMMIT GLOBAL: Court Approves $5 Million DIP Facility of Fortress SUN-TIMES MEDIA: Inks Settlement Agreement with Hollinger Inc. SUNRISE SENIOR: Completes Financial Restatement for 2004 and 2005 TATLEAUX ANTIQUES: Case Summary & 24 Largest Unsecured Creditors TENET HEALTHCARE: Fitch Affirms 'B-' Issuer Default Rating THOMPSON PRODUCTS: Auction of Inventories Set April 1 THORNBURG MORTGAGE: Amends Bylaws Allowing $300MM Share Purchase TLC VISION: Moody's Confirms 'B1' Ratings With Negative Outlook TRM CORP: Nasdaq Denies Application for Transfer of Stocks Listing TRONOX WORLDWIDE: Weak Pricing Power Prompts Moody's Rating Cuts WACHOVIA BANK: Fitch Holds 'BB-' Rating on $16.3MM Class L Certs. WELLMAN INC: Panel Opposes Asset Sale Terms in $225MM DIP Loan WELLMAN INC: Lenders Want Lazard Payment Terms Adjusted WELLMAN INC: Court Approves Kutzman Carson as Claims Agent WESTERN POWER: Jan. 31 Balance Sheet Upside-Down by $12,368,000 ZIFF DAVIS: Seeks Leave to Pay Prepetition Critical Vendor Claims ZIFF DAVIS: Seeks to Assume 102 Vendor & Freelancer Contracts * Fitch Says 99% of Fixed-Rate Mortgages Is Still Refinanced * S&P Downgrades 195 Tranches' Ratings From 32 Cash Flows and CDOs * S&P Downgrades Ratings on 30 Classes From 17 RMBS Transactions * S&P Puts Aircraft Issuances on Negative Watch on High Fuel Rates * National Association of Realtors Says February Home Sales Rise * Charles Rotblut of Zacks.com Releases Industry Rank Analysis * Daniel Murdock and Philip Smith Joins Patton Boggs in New York * Carren Shulman & Russell Reid Join Sheppard Mullin as Partners * Jason Paru Joins MorrisAnderson in Chicago Office * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AAMES MORTGAGE: S&P Rating on Class M6 Tumbles to 'D' on Losses --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to 'D' from 'CCC' on the class M6 mortgage pass-through certificates from Aames Mortgage Trust 2003-1. Concurrently, S&P lowered its rating on class M5 to 'CCC' from 'B-'. In addition, S&P affirmed its ratings on four other classes from the same series. The downgrade of class M6 to 'D' reflects realized losses of $89,295.78 during the February 2008 remittance period. S&P downgraded class M5 because monthly losses continue to outpace excess interest, thereby continuously reducing the credit support available to the class. Cumulative realized losses to date are $15.705 million, and the pool has paid down to 12.24% of its original principal balance. Credit support for this transaction is provided by subordination, excess interest, and overcollateralization. At issuance, the collateral backing this deal consisted of subprime, fixed- and adjustable-rate, fully amortizing first-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered Aames Mortgage Trust 2003-1 Rating ------ Class To From ----- -- ---- M5 CCC B- M6 D CCC Ratings Affirmed Aames Mortgage Trust 2003-1 Class Rating ----- ------ M1 AA M2 BBB M3 BB M4 B ABITIBIBOWATER INC: Abitibi-Consolidated Has Substantial Doubt -------------------------------------------------------------- AbitibiBowater Inc. disclosed in its 2007 annual report that its wholly owned subsidiary, Abitibi-Consolidated Inc. "is currently experiencing a liquidity shortfall and liquidity problems and there is substantial doubt about Abitibi's ability to continue as a going concern." The company's independent auditor, PricewaterhouseCoopers LLP in Montreal, Quebec, Canada, said, "In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the company's ability to continue as a going concern." PwC further said, "Our report to the shareholders dated March 21, 2008, is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the auditor's report when these are adequately disclosed in the financial statements." Abitibi-Consolidated Abitibi-Consolidated is currently experiencing a liquidity shortfall and faces significant near-term liquidity challenges. For the year ended Dec. 31, 2007, Abitibi reported a net loss of CDN$714 million, negative cash flows from operating activities of CDN$468 million and reported an accumulated deficit of CDN$1.591 billion as at Dec. 31, 2007. At Dec. 31, 2007, Abitibi-Consolidated's balance sheet showed CDN$6.572 billion in total assets, CDN$5.026 billion in total liabilities, and CDN$1.546 billion in total stockholders' equity. Abitibi's balance sheet at Dec. 31, 2007, showed strained liquidity with CDN$1.009 billion in total current assets available to pay CDN$1.416 billion in total current liabilities. Abitibi has a total of $346 million of long-term debt that matures in 2008: -- $196 million principal amount of its 6.95% Notes due April 1, 2008, and -- $150 million principal amount of 5.25% Notes due June 20, 2008, issued by Abitibi-Consolidated Company of Canada, a wholly owned subsidiary of Abitibi. Abitibi also has revolving credit facilities with commitments totalling $710 million maturing in the fourth quarter of 2008. None of these debts have yet been refinanced. These circumstances lend substantial doubt as to the ability of Abitibi to meet its obligations as they come due and, accordingly, substantial doubt as to the appropriateness of the use of accounting principles applicable to a going concern. To address these near-term liquidity challenges, Abitibi, and its parent company, AbitibiBowater Inc., have developed a refinancing plan to address upcoming debt maturities and general liquidity needs designed to enable Abitibi to repay the $346 million due in April and June 2008 and to repay all its maturities due in 2009, while continuing to fund Abitibi's operations, debt service and capital expenditures, so it can continue as a going concern. This refinancing plan is expected to consist of: -- a $200 million to $300 million of new senior unsecured exchange notes due 2010; -- up to $450 million of a new 364-day senior secured term loan secured by substantially all of Abitibi's assets other than fixed assets; -- approximately $400 million of new senior secured notes or a term loan due 2011 secured by fixed assets; and -- $200 million to $300 million of new convertible notes of AbitibiBowater. The current state of the credit markets is a significant impediment to securing the necessary financing for Abitibi. Amended 2007 Annual Report AbitibiBowater Inc. filed on March 20, 2008, an amended annual report on Form 10-K for the fiscal year ended Dec. 31, 2007, that was originally filed on March 17, 2008. for the purpose of making minor revisions to -- insert the name and electronic signature of the Independent Registered Accounting Firm, and -- make certain minor edits and conforming changes, including changes to its Feb. 29, 2008, cash balance disclosures. In addition, AbitibiBowater is also including as exhibits to this Amendment the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. AbitibiBowater Financials For the year ended Dec. 31, 2007, AbitibiBowater posted a $490 million net loss on $3.876 billion of sales as compared with a $138 million net loss on $3.530 billion of sales for the same period in 2006. At Dec. 31, 2007, AbitibiBowater's balance sheet showed $10.319 billion in total assets, $8.420 billion in total liabilities, and $1.899 in total stockholders' equity. AbitibiBowater's balance sheet at Dec. 31, 2007, showed strained liquidity with $2.142 billion in total current assets available to pay $2.178 billion in total current liabilities. Full-text copies are available for free at: -- 2007 annual report of AbitibiBowater Inc. http://ResearchArchives.com/t/s?2983 -- 2007 amended 2007 annual report of AbitibiBowater Inc. http://ResearchArchives.com/t/s?2984 -- audited financial statements of Abitibi-Consolidated Inc. http://ResearchArchives.com/t/s?2985 About AbitibiBowater Headquartered in Montreal, Canada, AbitibiBowater Inc. (NYSE:ABH) -- http://www.abitibibowater.com/-- was formed as a result of the combination of Abitibi-Consolidated Inc. and Bowater Incorporated. Pursuant to the transaction, Abitibi-Consolidated Inc. and Bowater Incorporated became subsidiaries of AbitibiBowater. The company produces a wide range of newsprint, commercial printing papers, market pulp and wood products and markets these products to more than 90 countries. Following the required divestiture agreed to with the U.S. Department of Justice, AbitibiBowater will own or operate 27 pulp and paper facilities and 35 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. The company also has newsprint sales offices in Brazil and Singapore. The company's shares also trade at the Toronto Stock Exchange under the stock symbol ABH. ABITIBIBOWATER INC: Moody's Rates Unit's $450MM Loan at B1 ---------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the proposed new $450 million secured term loan at Abitibi-Consolidate Inc's subsidiary Abitibi-Consolidated Company of Canada. At the same time, Moody's affirmed Abitibi's corporate family rating of Caa1, the probability-of-default rating of Caa3, the senior unsecured ratings of Caa2 and the B1 rating assigned to the new $415 million secured notes due 2011. In addition, Abitibi's speculative grade liquidity rating was affirmed at SGL-4 and the rating outlook remains negative. The secured term loan will have a maturity of 364 days and will be guaranteed by Abitibi and certain subsidiaries. At closing, the loan will be primarily secured by ACCC's eligible accounts receivables and inventory. Following the close, additional assets, including the fixed assets of the Alabama River Newsprint Company, will also be pledged to secure the term loan. Because of the benefits of its security package, the term loan was assigned a rating three notches above the corporate family rating. Concurrent with the $450 million secured term loan, ACCC and AbitibiBowater are undertaking several other financing transactions totaling approximately $1.4 billion. Completion of the secured term loan is conditional upon receipt of at least $1.2 billion in aggregate proceeds from the refinancing plan. Proceeds from the refinancing plan will be used to repay existing debt, pay transaction costs and provide liquidity. The corporate family rating of Abitibi reflects the company's high debt levels, its weakened liquidity profile and the company's significant refinancing risk. The rating incorporates the company's weak credit protection measures due to the declining demand for newsprint, the deteriorating markets for their sawmill operations, rising input costs and the strong Canadian dollar. Abitibi's credit profile is supported by the company's large scale and the expectation of improved cash flow from recent industry newsprint capacity reductions supporting the recently announced newsprint price increases. The negative rating outlook reflects the potential for further downward ratings adjustment due to the risk associated with the refinancing plan and the resulting impact it would have on liquidity should it fail to be completed in the amounts and expected timeframe. Assignments: Issuer: Abitibi-Consolidated Company of Canada -- Senior Secured Bank Credit Facility, Assigned a range of 08 - LGD1 to B1 Moody's last rating action on Abitibi was on March 17, 2008, when the corporate family ratings of AbitibiBowater Inc.'s subsidiaries Abitibi and Bowater Incorporated were downgraded to Caa1 from B2. At the same time, Moody's downgraded the probability-of-default rating of Abitibi to Caa3 from B2 and the probability-of-default rating of Bowater to Caa1 from B2. Moody's assigned a B1 rating to the new $415 million secured notes due 2011 at Abitibi and downgraded the senior unsecured ratings for bonds and debentures issued by Abitibi and Bowater to Caa2 from B3. Headquartered in Montreal, Quebec, with a regional office in Greenville, South Carolina, AbitibiBowater is North America's leader in newsprint and commercial printing papers. The company also produces lumber and market pulp. The company was formed from the merger of Abitibi and Bowater Inc, in October 2007. AbitibiBowater owns or operates 27 paper and pulp facilities (excluding the Snowflake, Arizona newsprint mill) and 31 wood products facilities located in the United States, Canada, the United Kingdom and South Korea. ADVANCED LIVING: Court Approves Disclosure Statement ---------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas approved the disclosure statement explaining Advanced Living Technologies Inc.'s Chapter 11 plan of reorganization, Bill Rochelle of Bloomberg News reports. Mr. Rochelle relates that under the plan, the maturity of tax-free bonds financing the Debtor's facilities are deferred. Roughly 9% or more of the unsecured claims will be paid on emergence and will possibly be fully paid in time. Headquartered in Austin, Texas, Advanced Living Technologies Inc. owns and operates nursing homes. The company filed for Chapter 11 protection on Jan. 9, 2008 (W.D. Tex. Case No. 08-50040). Patricia Baron Tomasco, Esq., at Brown McCarroll, LLP, represents the Debtor. According to Bill Rochelle of Bloomberg News, the Debtor listed assets of $14.9 million against debt totaling $24.1 million. ADVANCED LIVING: Court Sets Plan Confirmation Hearing on April 30 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas will convene a hearing to confirm Advanced Living Technologies Inc.'s Chapter 11 plan of reorganization, Bill Rochelle of Bloomberg News reports. Headquartered in Austin, Texas, Advanced Living Technologies Inc. owns and operates nursing homes. The company filed for Chapter 11 protection on Jan. 9, 2008 (W.D. Tex. Case No. 08-50040). Patricia Baron Tomasco, Esq., at Brown McCarroll, LLP, represents the Debtor. According to Bill Rochelle of Bloomberg News, the Debtor listed assets of $14.9 million against debt totaling $24.1 million. AFFILIATED COMPUTER: Communications Dev't. Buyout to Augment Biz ---------------------------------------------------------------- Affiliated Computer Services Inc. acquired Communications Development Inc., provider of outsourced marketing, consulting, and advertising services to the transportation industry. "This acquisition strengthens our position as a leading provider of responsive, reliable, and flexible recruiting, retention, and marketing services and solutions to the transportation industry," Tom Blodgett, group president of ACS Business Process Solutions, said. "In addition to building scale and opening additional opportunities to provide incremental BPO services to our existing clients, Communications Development will enhance our ability to compete for new business from larger carriers." Communication Development's operations will be consolidated with those of ACS Expedited Solutions, providers of TripPak SERVICES(TM), a trucking document delivery, processing, scanning, and storage solution, and ACS MultiMedia Advertising. Together they will supply marketing, advertising, and retention solutions tailored to the unique needs of the long-haul trucking and transportation market. "Bringing these two highly regarded, highly successful companies together improves our ability to help our clients achieve their long-term goals," Trish Groves, president and CEO of Communications Development, said. "Our clients will continue to receive the responsive service they have come to expect, while also gaining efficiencies, advanced technologies, and the support of a reputable Fortune 500 company. We are excited about the possibilities." About Communications Development Inc. Headquartered in Maumelle, Arkansas, Communications Development Inc. is a full-service agency that manages all forms of media placement, including newspaper, magazine, internet, and satellite radio. Founded in 1990, the company's portfolio of services includes public relations, event planning, and creative design. Its many clients include IdleAire Technologies, National Freight Industries, and extensive relationships with Sirius Satellite Radio. All of Communications Development's employees will transition to ACS. About Affiliated Computer Headquartered in Dallas, Texas, Affiliated Computer Services Inc. (NYSE:ACS) -- http://www.acs-inc.com/-- provides business process outsourcing and information technology services to commercial and government clients. The company has two segments based on the clients it serves: commercial and government. The company provides services to a variety of clients including healthcare providers and payers, manufacturers, retailers, wholesale distributors, utilities, entertainment companies, higher education institutions, financial institutions, insurance and transportation companies. * * * As reported in the Troubled Company Reporter on Jan. 30, 2008, Moody's Investors Service confirmed Affiliated Computer Services' Ba2 corporate family rating with a stable rating outlook. This rating confirmation concludes a review for possible downgrade initiated on March 20, 2007. The ratings of ACS remained under review for possible downgrade. AFFIRMATIVE INSURANCE: Tangible Fin'l Cues A.M. Best to Hold Rtngs ------------------------------------------------------------------ A.M. Best Co. has affirmed the financial strength rating of B(Fair) and the issuer credit ratings of "bb+" of Affirmative Insurance Group and two of its members, Affirmative Insurance Company and Insura Property and Casualty Insurance Company. A.M. Best also has assigned an FSR of B(Fair) and ICRs of "bb+" to Affirmative's other members, Affirmative Insurance Company of Michigan and USAgencies Casualty Insurance Company, Inc. Concurrently, A.M. Best has affirmed the ICR of "b" of Affirmative's parent company, Affirmative Insurance Holdings, Inc. The outlook for all ratings is stable. All administrative offices are located in Addison, Texas. The affirmations recognize Affirmative Holdings' elevated tangible financial leverage position following its acquisition of USAgencies LLC. As result, considerable pressure may exist on the insurance subsidiaries to meet debt service requirements and other holding company obligations amid increased competition in its niche focus providing non-standard automobile insurance products. These negative rating factors are partially offset by the group's adequate risk-adjusted capitalization, favorable operating performance and strong non-standard automobile market presence. The USAgencies' acquisition complements Affirmative's expansion efforts by increasing the group's overall presence in Louisiana and Alabama, two states in which it had not previously operated. Despite being ranked among the leading non-standard automobile writers in the United States, in the near term Affirmative will be challenged by lower profit margins driven by pricing decreases, increased loss cost trends and competitive market pressures. The FSR of B(Fair) and ICRs of "bb+" have been affirmed for Affirmative Insurance Group and its these members: -- Affirmative Insurance Company -- Insura Property and Casualty Insurance Company, Inc. An FSR of B(Fair) and ICRs of "bb+" have been assigned to the following members of Affirmative Insurance Group: -- Affirmative Insurance Company of Michigan -- USAgencies Casualty Insurance Company, Inc. An ICR of "b" has been affirmed for Affirmative Insurance Holdings, Inc. ALEX VALLADARES: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Alex F. Valladares 13300 Southwest 128 Street, Miami, FL 33186 10151 Southwest 68 Street Miami, FL 33173 Bankruptcy Case No.: 08-13450 Chapter 11 Petition Date: March 24, 2008 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Robert J. Edwards, Esq. Behar, Gutt and Glazer, P.A. 2999 Northeast 191 Street, 5th Floor Aventura, FL 33180 Tel: (305) 931-3771 redwards@bgglaw.net Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's list of its 17 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Heron Plaza $430,882 701 Southwest 27 Avenue, Suite 810 Miami, FL 33135 Empresas Puertorriquensa $415,658 Avenue Ponce de Leon Suite 304, Office 1100 Hato Rey, PR 00918 MJS Rexville, LP $384,836 810 Seventh Avenue 28th Floor New York, NY 10019 Millenium $197,244 HSBC Bank USA, N.A. $175,000 MAO & Assoc. Investment, Inc. $157,119 Mechantil Commercebank $141,445 MJS Ponce LP $131,045 RBC Centura Bank $125,000 Citibank $100,000 California Bank & Trust $95,432 Madison Capital $60,000 Caribbean Cinema $55,000 Bank of America $50,000 MAO Investments, Inc. $32,000 SSSC, S.E. $32,000 Pueblo International, Inc. $30,000 ALKERMES INC: Reduces 18% of Workforce Under Restructuring Plan --------------------------------------------------------------- Alkermes Inc. is restructuring its operations after the termination by Eli Lilly and Company of the AIR(R) Insulin program. With this restructuring, Alkermes is reducing its workforce by approximately 150 employees and closing its AIR commercial manufacturing facility in Chelsea, Massachusetts. The company is taking these actions based on its current expectations of the financial impact of Lilly's termination of the AIR Insulin program. "We are implementing a new operational cost structure to align our expenses with near-term revenues, which we anticipate will be lower than expected due to Lilly's termination of the inhaled insulin program," David Broecker, president and chief executive officer of Alkermes, stated. "The flexibility of our business model allows us to adapt our cost structure while maintaining our ability to develop innovative products of our own." The reduction in workforce represents approximately 18% of the company's total workforce. Employees affected by the restructuring will be eligible for a severance package that includes severance pay, continuation of benefits and outplacement services. "Alkermes' financial foundation remains strong, and we are focused on maintaining this strength moving forward," Mr. Broecker commented. "Lilly's termination of the program forced us to make difficult choices about the optimal size of the organization." "We acknowledge the outstanding contributions that these employees have made, and I wish to express my sincere thanks for their hard work," Mr. Broecker added. Alkermes does not anticipate any expense savings as a result of the restructuring in fiscal 2008, ending March 31, 2008. The company expects to take a restructuring charge in the fourth quarter of fiscal 2008 in the range of $5 million to $10 million associated with the reduction in workforce and facility-related expenses. In addition, the company expects to take an impairment charge of up to $15 million in the fourth quarter of fiscal 2008 related to fixed assets at the Chelsea facility. Alkermes expects cost savings from the restructuring in the range of $15 million to $20 million in fiscal 2009 and will provide more detailed financial expectations for fiscal 2009 in May . As of Dec. 31, 2007, Alkermes reported cash and total investments of $516.6 million. About Alkermes Inc. Headuqartered in Cambridge, Massachusetts, Alkermes Inc (NASDAQ:ALKS) -- http://www.alkermes.com/-- is a biotechnology company that develops products based on drug delivery technologies. The company has two commercial products: Risperdal Consta long-acting injection, is a long-acting atypical antipsychotic medication approved for use in schizophrenia, and marketed worldwide by Janssen-Cilag, a wholly owned division of Johnson & Johnson. Vivitrol, is a once-monthly injectable medication approved for the treatment of alcohol dependence and marketed in the United States primarily by Cephalon Inc. The company's pipeline includes extended-release injectable, pulmonary, and oral products for the treatment of prevalent, chronic diseases such as central nervous system disorders, addiction and diabetes. AMERICAN TECH: Jan. 31 Balance Sheet Upside-Down by $6,005,831 -------------------------------------------------------------- American Technologies Group Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $17,747,188 in total assets and $23,753,019 in total liabilities, resulting in a $6,005,831 total stockholders' deficit. At Jan. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $11,903,245 in total current assets available to pay $23,753,019 in total current liabilities. The company reported a net loss of $4,808,531 on net sales of $8,728,762 for the second quarter ended Jan. 31, 2008, compared with a net loss of $792,314 on net sales of $8,715,054 in the same period ended Jan. 31, 2007. Revenues for the quarter ended Jan. 31, 2008, were approximately $8,213,864 earned by North Texas and $514,898 earned by Whitco. Revenues for the quarter ended Jan. 31, 2007, were approximately $7,755,146 earned by North Texas and $958,928 earned by Whitco. Interest expense was $302,374 for the quarter ended Jan. 31, 2008, compared with $333,955 for the quarter ending Jan. 31, 2007. Financing expense was $5,121,136 and $923,591 for the quarter ended Jan. 31, 2008, and 2007, respectively. Included in financing expenses was the default expenses due to Laurus. Laurus Default As a result of the company's failure to timely pay its current obligations due to Laurus Master Fund Ltd. under its Secured Convertible Term B Note in the amount of $2,000,000, the company received a default notification on Jan. 31, 2008, from Laurus. The company also received a letter from LV Administrative Services Inc., in its capacity asf administrative and collateral agent for Laurus, demanding the immediate payment of all past due amounts owed to Laurus by Feb. 1, 2008. The amounts demanded totaled $13,580,810 ($10,350,000 in principal amortization, $96,777 in accrued interest, and $3,134,033 in Default Fees). Ongoing Negotiations with Laurus Ongoing negotiations with Laurus include the transfer of all of the stock of the company's subsidiary, Omaha Holdings Inc., in North Texas and Whitco to Laurus' assignees, which would result in the company no longer owning any operating assets, and in exchange for such transfer, Laurus will forgive all outstanding debt obligations and reduce the amount of options and warrants it owns so that Laurus would hold no more than 25% of the company'sfully diluted shares. The company believe that this transaction, if completed, will have a positive effect on the company because it will release the company of debt obligations that its capital resources have not been able to service therefore allowing the company to pursue other lines of business. At the same time, the transactions would allow the company to avoid prolonged legal proceedings and liquidation in bankruptcy. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?2994 Going Concern Doubt RBSM LLP, in New York, expressed substantial doubt about American Technologies Group 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 firm reported that the the company has suffered recurring losses and is experiencing difficulty in generating sufficient cash flow to meet its obligations and sustain its operations. About American Technologies Based in Fort Worth, Texas, American Technologies Group Inc. (NASDAQ: ATEG) -- was engaged, prior to 2001, in the development, commercialization and sale of products and systems using patented and proprietary technologies including catalyst technology and water purification. The company largely ceased operations during 2001 and began focusing efforts on restructuring and refinancing. In September 2005, the company entered into various financing transactions and acquired North Texas Steel Company Inc., an AISC Certified structural steel fabrication company based in Fort Worth, Texas. On April 25, 2006, the company purchased certain assets of Whitco Company LP, a business conducting the sale and distribution of steel and aluminum lighting poles. The Whitco assets are held in a separate subsidiary called Whitco Poles Inc. ANTHONY ENRICO: Case Summary & 10 Largest Un4secured Creditors ------------------------------------------------------------- Debtor: Anthony Enrico 628 Broadway Paterson, NJ 07514 Bankruptcy Case No.: 08-15212 Chapter 11 Petition Date: March 25, 2008 Court: District of New Jersey (Newark) Debtor's Counsel: John J. Scura, III, Esq. (jscura@scuramealey.com) Scura, Mealey & Scura, LLP P.O. Box 2031 1599 Hamburg Turnpike Wayne, NJ 07470 Tel: (973) 696-8391 http://www.scuramealey.com/ Total Assets: $2,877,700 Total Debts: $3,508,542 Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ CIT Financial $898,941 Attn: Reed Smith One Riverfront Plaza Newark, NJ 07102 State Resources $281,500 Attn: Dembo & Saldutti 102 Browning Lane, Building B Cherry Hill, NJ 08003 IRS $193,052 P.O. Box 21126 Philadelphia, PA 19114-0326 Intek Auto Leasing $80,000 Jack Gorman $24,000 Hoboken Federal Credit Union $17,668 Fia CSNA $14,496 North Fork Bank & Trust $9,581 Lefcourt Associates $9,000 Bank Of Amer $6,505 BARCLAYS CAPITAL: S&P Holds Developing Watch on Cl. G's BB+ Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said its ratings on three classes of Barclays Capital Commercial Real Estate LLC Grantor Trust certificates from Terra LNR I Ltd. remain on CreditWatch with developing implications, where they were originally placed on Nov. 8, 2007. The CreditWatch placements were prompted by Standard & Poor's Nov. 2, 2007, downgrades of Centex Corp. (to 'BBB-' from 'BBB'), Lennar Corp. (to 'BB+' from 'BBB'), and Pulte Homes (to 'BB+' from 'BBB'). Centex Corp. was downgraded again, to 'BB+', on Feb. 19, 2008. The ratings on the Terra LNR I Ltd. certificates depend in part on the ratings assigned to these three companies, which provide two types of financial guarantees that benefit the loan collateral. The Terra LNR I Ltd. trust currently consists of two loans collateralized by mortgaged parcels of land that are being developed into residential home sites; the two projects are Potomac Yards and Stetson Valley. Both loans are scheduled to mature on April 1, 2008, and have two 12-month extensions remaining. The borrowers are required to send a written request for extension at least 60 days and not more than 120 days prior to the first day of the requested extension period. The servicer, TriMont Real Estate Advisors Inc., reports that it has received no such request. Based on S&P's recent discussions with TriMont, the borrowers have indicated that they expect to pay off the loans on or before their initial maturity date. The trust has experienced increased credit support levels due to loan payoffs and principal balance reductions in the remaining two loans. As a result, both positive and negative rating actions are possible. Standard & Poor's is in the process of analyzing the collateral to resolve the CreditWatch placements. If the loans do not pay off as expected, S&P will resolve the CreditWatch placements after completing S&P's analysis of the underlying collateral. S&P's analysis will include a review of the updated appraisals for the remaining projects. Ratings Remaining on CreditWatch Developing Terra LNR I Ltd. Barclays Capital Commercial Real Estate LLC Grantor Trust Certificates series Terra LNR 1 Class Rating ----- ------ E BBB/Watch Dev F BBB-/Watch Dev G BB+/Watch Dev BEAR STEARNS: Launches First Actively Managed Exchange Traded Fund ------------------------------------------------------------------ Bear Stearns Asset Management said that the Bear Stearns Current Yield Fund (AMEX: YYY), the first actively managed exchange traded fund, began trading on the American Stock Exchange on March 25. YYY, or Triple-Y, is composed of a variety of short-term fixed income instruments. The Fund aims to generate higher returns than a money market fund by investing in diversified, high-quality securities, including government securities, municipal securities, bank obligations, corporate and securitized debt. Triple-Y Shares can be purchased and sold intraday, with pricing every 15 seconds on the exchange and portfolio holdings fully disclosed each day via BSAM's website http://www.yyyfund.com. "We are excited to introduce the first actively managed ETF to the market,' said Jeff Lane, Chairman and CEO of Bear Stearns Asset Management. "The Bear Stearns Current Yield Fund is an innovative product that provides investors with unprecedented price discovery and transparency.' Triple-Y is managed by a team of fixed income professionals at BSAM, led by senior portfolio manager Scott Pavlak. Mr. Pavlak has more than 20 years of investment experience and has been managing portfolios with a similar investment process to Triple-Y for over 15 years. Mr. Pavlak added, "Our approach is to maximize income for our investors, while preserving capital. The Fund employs a disciplined investment strategy, adding value through sector allocation, security selection, yield curve positioning, and duration management.' The Current Yield Fund is the first product launched by the Bear Stearns Active ETF Trust. Subject to Bear Stearns shareholder and regulator approval and following the completion of the proposed acquisition between The Bear Stearns Companies Inc., the parent company of Bear Stearns Asset Management, and JPMorgan Chase & Co., the Current Yield Fund would be expected to be re-branded under JPMorgan. The fund looks a lot like an enhanced money market fund, and will appeal to money fund investors, said Gary Gastineau, principal at ETF Consultants LLC, according to Investor's Business Daily. ETF Consultants provides a broad range of consulting services focused on Exchange-Traded Funds. The report noted that the launching of the fund comes at a turbulent time for The Bear Stearns Companies Inc., which admitted it was suffering unexpected losses from subprime mortgage-backed debt. According to the report, when Bear Stearns' problems surfaced, many other ETF firms thought the launch, originally set March 18, would be postponed until Bear's future was more certain. Bear Stearns spokeswoman Jane Slater declined to be specific about why the firm launched the ETF this week, the report stated. It quoted Mr. Gastineau saying the ETF wouldn't necessarily be affected by problems in other parts of the firm. "It's a one-off product," he said. About Bear Stearns Asset Management Inc. Bear Stearns Asset Management Inc. (BSAM) is a wholly-owned subsidiary of The Bear Stearns Companies Inc. (NYSE: BSC). BSAM is a solutions-based provider of asset management and advisory services. Serving institutional and high-net-worth investors around the world, BSAM offers a broad portfolio of investment opportunities. These include carefully-selected strategies in equity, fixed income, hedge funds, and private equity. About Bear Stearn Companies New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BEAR STEARNS: Moody's Rates Current Yield Fund At 'Aaa' and 'MR1' ----------------------------------------------------------------- Moody's Investors Service assigned a bond fund credit rating of Aaa and market risk rating of MR1 to the Bear Stearns Current Yield Fund, an actively managed exchange listed ETF managed by Bear Stearns Asset Management Inc. The Aaa and MR1 ratings reflect the expected high maturity adjusted average weighted credit quality of the fund's portfolio together with the fund manager's fundamentally-driven investment process and an effective compliance and risk management structure. he expected very low volatility of the fund's total return performance given the fund's credit quality, liquidity profile and a target average weighted maturity of 180 days contribute to the fund's MR1 market risk rating. The fund, which is the first actively managed exchange traded fund to be launched in the United States, is an investment portfolio of Bear Stearns Active ETF Trust, a Delaware statutory trust formed on March 19, 2007 as an open-end investment company under the Investment Company Act of 1940. Shares of the fund have been listed on the American Stock Exchange under the ticker symbol YYY at an initial issue price of $100. Unlike an index ETF which seeks to achieve, with minimal tracking error, the total return of securities comprising a specified market index, Bear Stearns Asset Management has discretion to select the fund's investments. The objective of the fund is to provide investors a high level of current income as is consistent with the preservation of capital and liquidity. The fund is not a money market fund and maintaining a constant share price is not part of its investment objective. The fund aims to achieve its objective by investing in money market securities and short-term debt. These investments include fixed and floating rate instruments including commercial paper, variable rate demand obligations, asset backed securities, mortgage backed securities, U.S. government agency securities, and repurchase agreements. All fixed rate and floating rate instruments will have either an average life or maximum legal final maturity of three years or less. The fund's credit rating reflects the high credit quality of the portfolio. The weighted average maturity adjusted expected credit loss of the fund will be equal to or lower than that of a 3-year security rated Aaa, in line with Moody's rating guidelines for a fund rated Aaa with similar characteristics. The fund's MR1 market risk rating is driven largely by the duration and liquidity of portfolio securities. Although the maximum expected maturity for portfolio securities is up to three years, the fund will target an effective average weighted maturity of 180 days. Since this fund has no prior operating history, Moody's analyzed the total return history of a similar investment strategy managed by BSAM which has exhibited very low volatility since inception in 1996. The fund will benefit from limited sensitivity to interest rates as it is expected to maintain a very short weighted average maturity. Regarding derivatives, the fund guidelines permit the use of derivatives but it is not the manager's intention to use derivative instruments at this time. The fund will target fee based advisors, retail investors and ETF investors. Individual investors are not able to purchase or redeem shares directly from the fund and will transact all shares in the secondary market. The fund will disclose on its website, each business day prior to the start of trading on the AMEX, the identities and quantities of the portfolio securities held by the fund. The Bank of New York, in its capacity as administrator, provides administrative services to the fund and is also responsible for the daily NAV calculations. Dorchester Capital Management LLC, through the AMEX, will calculate and disseminate the Indicative Intra-Day Value every 15 seconds during trading hours. The IIV is not a real time update of the NAV and is not calculated the same way as the NAV which will be calculated daily at 4:00 pm NY time. Bear Stearns Asset Management, a Bear Stearns subsidiary, will serve as investment advisor for the Bear Stearns Current Yield Fund. On March 16, 2008, JPMorgan Chase & Co. announced that it has agreed to acquire The Bear Stearns Companies Inc. subject to approval by Bear Stearns shareholders. Under the merger agreement between the two companies, JPMorgan is entitled to oversee the business, operations and management of BSAM. Therefore, the fund has entered into a new Investment Advisory agreement with BSAM based on the circumstance which may be viewed as a change of control. Bear Stearns Current Yield and the Bear Stearns Active ETF Trust are not subsidiaries of Bear Stearns or BSAM. Moody's money market and bond fund credit ratings are opinions of the investment quality of shares in mutual funds and similar investment vehicles, which principally invest in short-term and long-term fixed income obligations, respectively. The ratings are not intended to consider the prospective performance of a fund with respect to appreciation, volatility of net asset value, or yield. Moody's fund market risk ratings are an opinion of the relative degree of volatility of a fund's net asset value. In forming an opinion on the fund's future price volatility, Moody's analysts consider risk elements that may have an effect on a fund's net asset value such as: interest rate risk, prepayment and extension risk, liquidity and concentration risks, currency risk, and derivatives risk. The rating is not intended to consider prospective performance of a fund with respect to price appreciation or yield. Funds rated MR1 are judged to have very low sensitivity to changing interest rates and other market conditions. BEAR STEARNS: S&P Assigns AAAf and S1+ Rating on Current Yield ETF ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'AAAf' fund credit quality rating and 'S1+' fund volatility rating to the Bear Stearns Current Yield ETF. The Fund is an actively managed exchange-traded fund organized as a U.S.-domiciled, open-ended investment fund and is registered with the SEC. The ratings--the highest assigned to a bond fund-- are based on S&P's comprehensive analysis of the fund's investment holdings and strategies, total return volatility, and management. Bear Stearns Asset Management will be the fund's investment advisor. The Fund's investment objective is to seek as high a level of current income as is consistent with the preservation of capital and liquidity. Shares of the Fund are listed for trading on the American Stock Exchange under the ticker symbol 'YYY'. The Fund seeks to accomplish its objective by investing in short-term debt obligations, including U.S. government securities, bank obligations, corporate debt obligations, mortgage-backed and asset-backed securities, municipal obligations, foreign bank obligations, foreign corporate debt obligations, repurchase agreements, and reverse repurchase agreements. The Fund's investment policy limits short-term investments to issuers rated 'A-1/P1' or higher. Long-term corporate investments are limited to 'A' or better, while structured securities are limited to 'AA-' or higher. As a result of the high credit quality of the portfolio's assets and eligible investments, the Fund carries S&P's highest credit rating of 'AAAf'. The advisor uses a target aggregate portfolio duration of six months with a maximum duration of 12 months. As of Dec. 31, 2007, BSAM managed $30.5 billion in assets. Of that amount, the fixed-income team managed $14.7 billion. The Short-Maturity Fixed-Income Team, a division of BSAM's fixed income group, will manage Bear Stearns Current Yield Fund. The team has historically produced incremental returns over money market funds and benchmark indices. The 'AAAf' rating means the Fund's portfolio holdings should provide extremely strong protection against losses from credit defaults. The 'S1+' volatility rating indicates that the Fund should have extremely low sensitivity to changing market conditions. Funds rated 'S1+' possess an aggregate level of risk that is less than or equal to that of a portfolio comprised of the highest quality fixed-income instruments with an average maturity of one year or less. To maintain current and accurate ratings, S&P monitors the portfolio holdings monthly. BEAR STEARNS: Fitch Junks Ratings on Six Certificate Classes ------------------------------------------------------------ Fitch Ratings has taken rating actions on five Bear Stearns mortgage pass-through certificates. Affirmations total $1.42 billion and downgrades total $15.16 million. In addition, $235.3 million is placed on Rating Watch Negative. Prime Mortgage Trust 2006-1 -- $225.4 million class A rated 'AAA', placed on Rating Watch Negative; -- $6.74 million class B1 rated 'AA', placed on Rating Watch Negative; -- $3.09 million class B2 rated 'A', placed on Rating Watch Negative; -- $1.68 million class B3 downgraded to 'C/DR4' from 'BBB'; -- $1.68 million class B4 downgraded to 'C/DR5' from 'BB'; -- $1.26 million class B5 downgraded to 'C/DR5' from 'B'. Prime Mortgage Trust 2007-1 -- $593.5 million class A affirmed at 'AAA'; -- $10.8 million class B1 affirmed at 'AA'; -- $5.39 million class B2 affirmed at 'A'; -- $3.37 million class B3 affirmed at 'BBB'; -- $3.37 million class B4 downgraded to 'B' from 'BB'; -- $2.36 million class B5 downgraded to 'C/DR5' from 'B'. Prime Mortgage Trust 2007-2 -- $280.2 million class A affirmed at 'AAA'; -- $5.42 million class B1 affirmed at 'AA'; -- $2.96 million class B2 affirmed at 'A'; -- $1.64 million class B3 affirmed at 'BBB'; -- $1.80 million class B4 downgraded to 'B' from 'BB'; -- $1.31 million class B5 downgraded to 'C/DR4' from 'B'. Prime Mortgage Trust 2007-3 Group 1 -- $164.4 million class A affirmed at 'AAA'; -- $3.58 million class B1 affirmed at 'AA'; -- $2.00 million class B2 affirmed at 'A'; -- $0.786 million class B3 affirmed at 'BBB'; -- $1.30 million class B4 downgraded to 'B' from 'BB'; -- $0.350 million class B5 downgraded to 'C/DR4' from 'B'. Prime Mortgage Trust 2007-3 Group 2 -- $111 million class IIA affirmed at 'AAA'; -- $3.54 million class IIB1 affirmed at 'AA'; -- $1.46 million class IIB2 affirmed at 'A'; -- $0.855 million class IIB3 affirmed at 'BBB'; -- $0.610 million class IIB4 affirmed at 'BB'; -- $0.427 million class IIB5 affirmed at 'B'. BFWEST LLC: Files for Chapter 11 Protection in Southern Florida --------------------------------------------------------------- BFWest LLC filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of Florida, Kate Howell of the South Florida Business Journal reports. According to the Journal, BFWest is an affiliate of mezzanine lender BuilderFinancial Corp. BFWest's sister companies Builder Funding and BFSPE LLC make the loans, while the Debtor keeps track of acquisition and development loans. The company owes Builder Funding $58.1 million of unsecured debt, and BFSPE LLC $32.5 million, relates the Journal. About Builderfinancial Based in Fort Lauderdale, Florida, BuilderFinancial Corp. -- http://www.builderfinancial.com/-- is a privately held specialty finance company that facilitates the financing of residential real estate transactions by providing mezzanine financing to builders. The company also establishes relationships with commercial banks, providing them with a simple credit enhancement solution that brings speed and efficiency to their construction lending process. BLACK GOLD: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Black Gold Equipment & Leasing LLC 590 East Street George Boulevard St. George, UT 84770 Bankruptcy Case No.: 08-21673 Chapter 11 Petition Date: March 20, 2008 Court: District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Troy J. Aramburu, Esq. Jones Waldo Holbrook & McDonough PC 170 South Main Street Suite 1500 Salt Lake City, UT 84101 Tel: (801) 521-3200 Fax: (801) 328-0537 taramburu@joneswaldo.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ TG Power LLC contract dispute $75,000 1053 Idaho Street Elko, NV 89801 Bar S Inc. 3330 I-80 Frontage Road trade debt $72,964 Cheyenne, WY 82009 American Express business credit $53,583 P.O. Box 650448 card debt Dallas, TX 75265-0448 R&W Rental trade debt $33,419 Jenkins Ronnow Jensen legal fees $24,000 & Bayles, LLP Mendoza Welding trade debt $21,036 Leach’s trade debt $17,430 D.K. Bundy Excavating trade debt $16,200 Badlands Fab. & Mach., Inc. trade debt $15,376 C.G. Power Rentals trade debt $13,419 Nielson Construction Inc. trade debt $11,102 Nevada Geothermal Power Inc. trade debt $10,000 Haycock Petroleum Co. trade debt $8,559 Transportation Alliance Bank Capital One Bank trade debt $8,405 Allen Sales & Service, Inc. trade debt $8,053 Black Jack Inspection trade debt $7,412 WWL Industries Inc. trade debt $6,518 Interstate Steel & Supply trade debt $6,390 Pero Electrical trade debt $6,307 Kyle Cox trade debt $6,240 CA INC: Appoints Michael Christenson as President ------------------------------------------------- CA, Inc. has named Michael J. Christenson as its president. He continues as the company's chief operating officer and reports to CA Chief Executive Officer John Swainson. "Since being named as chief operating officer nearly two years ago, Mike has overhauled CA's sales operations and established a more dynamic and efficient organization, focusing on establishing strong partnerships with our current and new customers to drive revenue growth," said Swainson. "In addition, Mike has led CA's efforts to significantly improve its technical support, services, strategic alliances and training capabilities." As president and chief operating officer, Christenson oversees CA's direct and indirect sales, CA Services, technical support, business development and strategic alliances. Christenson joined CA in February 2005 as executive vice president for Strategy and Business Development. In that role, he led CA's acquisition program and its integration team in the successful acquisition and integration of 15 companies with a total investment of $1.8 billion. These acquisitions, which included such companies as Concord Communications, Niku, and Wily Technology, significantly strengthened CA's solution portfolio and made CA a stronger technology partner for its customers. He was named CA’s COO in April 2006. Following a 23-year career as an investment banker, Christenson retired from Citigroup Global Markets, Inc. in 2004. Christenson earned a Bachelor of Arts degree in chemistry from Rutgers University and a Master of Business Administration degree in finance from The New York University Graduate School of Business. About CA Inc. Based in Islandia, New York, CA Inc. (NYSE:CA) -- http://www.ca.com/-- is an information technology management software company that unifies and simplifies the management ofenterprise-wide IT. Founded in 1976, CA serves customers in more than 140 countries. The company has operations in Brazil, Indonesia, Luxembourg, Philippines and Thailand. * * * As reported in the Troubled Company Reporter-Latin America on Dec. 19, 2007, Fitch Ratings affirmed these ratings of CA, Inc.: -- Issuer Default Rating at 'BB+'; -- Senior unsecured revolving credit facility at 'BB+'; -- Senior unsecured debt at 'BB+'. Additionally, Fitch revised the Rating Outlook on CA Inc. to Stable from Negative. Fitch's actions affect approximately US$2.8 billion of total debt, including the company's US$1.0 billion revolving credit facility. CANADIAN TRUSTS: ABCP Trusts' CCAA Restructuring Database --------------------------------------------------------- The Series of Affected Asset Backed Commercial Paper that are subject to the Restructuring Plan proposed by the Pan-Canadian Committee, the relevant ABCP Sponsor, the relevant Issuer Trustee and the total principal amount of Affected ABCP for each Series are: Principal Affected ABCP Issuer Trustee ABCP Sponsor Amount ------------- -------------- ------------ --------- Apollo Trust Series A 6932819 Canada Inc. Coventree CA$37,195,732 Series E 6932819 Canada Inc. Coventree CA$171,400,152 US$407,885 Series H 6932819 Canada Inc. Coventree CA$10,000,000 Apsley Trust Series A Metcalfe & Quanto CA$2,412,422,034 Mansfield Alternative Investments V Corp. Aria Trust Series A 6932819 Canada Inc. Newshore CA$817,455,409 Series E 6932819 Canada Inc. Newshore CA$681,625,250 Aurora Trust Series A 6932819 Canada Inc. Coventree CA$1,538,227,373 Series B 6932819 Canada Inc. Coventree CA$5,436,700 Series C 6932819 Canada Inc. Coventree CA$9,032,797 Series E 6932819 Canada Inc. Coventree CA$878,851,458 Series F 6932819 Canada Inc. Coventree CA$270,000,000 Comet Trust Series A 6932819 Canada Inc. Coventree CA$1,148,879,952 US$22,351,867 Series E 6932819 Canada Inc. Coventree CA$580,741,188 US$44,811,848 Series F 6932819 Canada Inc. Coventree CA$85,000,000 Encore Trust Series A 6932819 Canada Inc. Newshore CA$603,278,708 Series E 6932819 Canada Inc. Newshore CA$846,436,585 Gemini Trust Series A 6932819 Canada Inc. Coventree CA$526,039,551 Series E 6932819 Canada Inc. Coventree CA$697,897,823 Series F 6932819 Canada Inc. Coventree CA$235,000,000 Ironstone Trust Series A Metcalfe & NBF CA$498,404,991 Mansfield Alternative Investments XII Corp. Series B Metcalfe & NBF US$265,827,959 Mansfield Alternative Investments XII Corp. MMAI-I Trust Series A Metcalfe & NBF CA$1,402,880,091 Mansfield Alternative Investments XI Corp. Newshore Canadian Trust Series A 4446372 Canada Inc. Newshore CA$200,000,000 Series 2001-1 4446372 Canada Inc. Newshore CA$212,685,191 Opus Trust Series A 6932819 Canada Inc. Newshore CA$958,482,332 Series E 6932819 Canada Inc. Newshore CA$735,637,522 Planet Trust Series A 6932819 Canada Inc. Coventree CA$808,163,389 US$81,691,381 Series E 6932819 Canada Inc. Coventree CA$636,252,487 US$46,561,048 Series F 6932819 Canada Inc. Coventree CA$230,000,000 Series L8 6932819 Canada Inc. Coventree CA$13,245,810 Rocket Trust Series A 6932819 Canada Inc. Coventree CA$923,992,181 US$153,046,541 Series B 6932819 Canada Inc. Coventree CA$112,000,000 Series D 6932819 Canada Inc. Coventree CA$23,190,501 Series E 6932819 Canada Inc. Coventree CA$2,063,700,485 Series F 6932819 Canada Inc. Coventree CA$90,000,000 Selkirk Funding Trust Series A 4446372 Canada Inc. Securitus CA$150,613,274 Silverstone Trust Series A Metcalfe & NBF CA$2,013,169,199 Mansfield Alternative Investments II Corp. Slate Trust Series A-1 6932819 Canada Inc. Coventree CA$32,675,776 US$93,121,416 Series E-1 6932819 Canada Inc. Coventree CA$363,732,198 US$72,341,043 Structured Asset Trust Series A-1 4446372 Canada Inc. Nereus CA$653,519,000 Series E-1 4446372 Canada Inc. Nereus CA$718,205,000 Series L-1 4446372 Canada Inc. Nereus CA$43,203,647 Structured Investment Trust III Series A 4446372 Canada Inc. Nereus CA$1,708,614,000 Series E 4446372 Canada Inc. Nereus CA$1,077,821,000 Symphony Trust Series A 6932819 Canada Inc. Newshore CA$1,084,524,245 Series E 6932819 Canada Inc. Newshore CA$836,273,903 Whitehall Trust Series A Metcalfe & Quanto CA$2,508,805,963 Mansfield Alternative Investments III Corp. (Canadian ABCP Trusts Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. CANADIAN TRUSTS: Pan-Canadian Committee Files Restructuring Plan ---------------------------------------------------------------- The Pan-Canadian Investors Committee for Third Party Structured Asset-Backed Commercial Paper delivered to the Ontario Superior Court of Justice on March 17, 2008, a plan of compromise and arrangement for 20 Canadian ABCPs. The Committee subsequently sent out on March 20, 2008, an information statement to ABCP noteholders to appraise them of the proposed ABCP restructuring plan. "These documents provide full disclosure on the plan and the nature of the assets supporting each series of the trusts subject to the plan. They will enable noteholders to make an informed decision on the plan," Purdy Crawford, chairman of the Pan-Canadian Committee said in a press release. The Plan provides for the comprehensive restructuring of all of the outstanding third-party debt obligations, including asset- backed commercial paper, floating rate notes, liquidity notes and subordinated notes with respect to 20 ABCP trust conduits, Mr. Crawford relates. The Conduits are Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust and Whitehall Trust. The salient terms key of the Plan are: (1) The notes representing the Affected ABCP will be exchanged for longer-term floating rate notes that are designed to match the maturity of the underlying pool of assets. The anticipated maturity and repayment of the Plan Notes is generally expected to occur within nine year although the restructured notes will have a legal final maturity that is significantly longer than that. The new Class A-1 and Class A-2 notes are expected to receive a rating of AA from DBRS. (2) Solutions are being provided for Affected ABCP based on the type and quality of underlying assets. Where the ABCP is backed by assets that the Investors Committee considers to be "ineligible" for pooling, these assets will be separated from higher quality assets. Where the ABCP is backed by assets that are exclusively "traditional," these assets will also be segregated and Noteholders will receive longer-term notes tracking the returns on those assets. The allocation of assets into two separate Master Asset Vehicles or MAVs affords eligible Noteholders the opportunity to elect whether or not they wish to "self- insure" with regard to the posting of additional collateral in the event that margin calls are made in the future with respect to certain underlying assets held in MAV1 or MAV2. (3) Noteholders that satisfy the MAV1 Eligibility Requirements may elect to participate in MAV1, which includes a "self- funded" facility in which Noteholders will provide specified amounts of committed funding for margin call requirements. Noteholders who either do not satisfy the MAV1 Eligibility Requirements or elect not to participate in MAV1 will participate in MAV2 and receive margin call support from a group of third-party lenders and may, if eligible, also participate in such margin funding facility up to an amount of less than their pro rata share. The returns on the Plan Notes issued by MAV1 are expected to be higher than those issued by MAV2 due to the costs associated with the third-party margin funding facility required for MAV2. Holders in MAV1 will be subject to certain restrictions on the transfer of their Notes. On the other hand, Noteholders participating in MAV2 may, subject to applicable securities laws and market conditions, sell their new notes when they choose. (4) Certain parties will receive comprehensive and fully effective releases as a condition to their participation and completion of the restructuring and the implementation of the Plan. (5) Transparency in the market is being created through the release of information contained in the Information Statement and JPMorgan's Report on Restructuring as well as through access to additional information regarding the assets underlying the Affected ABCP that will be made available through a dedicated website to Noteholders who agree to keep those information confidential. Following the restructuring BlackRock (Institutional) Canada, Ltd., which will be the Administrator and Asset Manager of each of the MAVs, will also publish periodic reports regarding the Managed Assets, which reports are expected to facilitate the development of a market for the MAV2 notes. "In my view, the proposed restructuring gives [an ABCP investor], and all other holders of the Affected ABCP, an opportunity to maximize the value of your investment," Mr. Crawford noted in a March 20, 2008, letter addressed to ABCP Noteholders. The restructuring will allow those investors who hold restructured notes to maturity of the underlying assets to potentially maximize the return of their principal investment and will also reduce the risk that external events affecting credit markets in general will have a significant adverse impact on the restructured notes, Mr. Crawford maintains. If the Plan is not implemented, Mr. Crawford points out, likely alternatives include a forced sale or liquidation of some or all of the ABCP Conduits as well as the incurrence of substantial mark-to-market termination payments on synthetic assets which could lead to substantial losses for Noteholders. Mr. Crawford adds that the proposed Plan has been approved and is being supported by the institutions represented by members of the Pan-Canadian Committee, certain of the dealer bank asset providers and the ABCP sponsors. These supporting parties, all of which have agreed to vote in favor of the Plan, are holders of approximately 66.25% of the outstanding Affected ABCP. A full-text copy of the Information Statement and the related ABCP Restructuring Plan is available for free at: http://ResearchArchives.com/t/s?2988 Plan Voting Noteholders will be asked to approve the Plan at a meeting to be held at 10:00 a.m. on April 25, 2008 at The Fairmont Royal York, 100 Front Street West, Toronto, in Ontario, Canada. To be eligible to vote at the Meeting, a Noteholder as of the record date of February 29, 2008 must properly complete and deliver a voter identification form or a voter confirmation form to Ernst & Young Inc, the Court-appointed Monitor, no later than April 22, 2008. The Pan-Canadian Committee, subject to noteholder and final court approval, anticipates implementing the Plan on May 23, 2008. Monitor's Recommendation The Monitor tells Mr. Justice Campbell that the Affected ABCP situation giving rise to the Plan is virtually unprecedented in Canada in its size, complexity and scope. "The prospect of a liquidation and consequential material diminution in the value of Affected ABCP would have a significant detrimental effect on a broad range of organizations and individuals," the Monitor notes. Accordingly, the Monitor believes that the proposed Plan is a preferable alternative to liquidation of the assets in the Trust Conduits, which would potentially result in significantly lower recoveries for the Noteholders generally. "[I]t appears that any non-liquidation alternatives to the Plan bear greater near-term risk to the Noteholder realizations than does the Plan." Mr. Crawford's indication that the Plan offers the best available alternative for Noteholders is reasonable, the Monitor says. The Plan and Information Statement contemplate the resolution of negotiations with various key participants along anticipated parameters on both legal and economic issues, the Monitor acknowledges. Accordingly, the Monitor recommends that the Noteholders approve the Plan. (Canadian ABCP Trusts Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of September 14, 2007, these 21 Canadian Trusts had approximately $33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. CANADIAN TRUSTS: ABCP Noteholders to Hold Meeting on April 25 ------------------------------------------------------------- The Ontario Superior Court of Justice has authorized noteholders of 20 Canadian asset-backed commercial papers to hold a meeting on April 25, 2008, at 10:00 a.m., to consider and vote on the Restructuring Resolution concerning the Plan of Compromise and Arrangement proposed by the Pan-Canadian Investors Committee for Third Party Structured Asset-Backed Commercial Paper. The Meeting will be held at The Fairmont Royal York, 100 Front Street West in Toronto, Ontario, Canada. It will be held and conducted in accordance with the provisions of the Meeting Order. An officer of the Court-appointed Monitor, Ernst & Young Inc., will act as the chair of the Meeting and decide all matters relating to the conduct of the Meeting. The only Persons entitled to attend the Meeting are Noteholders of the Affected ABCP as of the February 29, 2008 Record Date and their proxy holders, representatives of the CCAA Applicants, the ABCP Sponsors and the CCAA Parties, the Monitor and the Persons appointed to act as scrutineers at the Meeting, and their legal counsel and advisors. Any other Person may be admitted on invitation of the Applicants or the chair of the Meeting. A vote by written ballot will be taken on the approval of the Restructuring Resolution. On a poll on any matter that may come before the Meeting, each Noteholder will be entitled to one vote for the aggregate principal amount of its outstanding Affected ABCP. The Restructuring Resolution must be approved by Noteholders: (i) constituting a majority in number of the Noteholders who are present and at the Meeting, either in person or by proxy; and (ii) representing not less than 66 2/3% of the aggregate principal amount of Affected ABCP of the Noteholders voting either, in person or by proxy, at the Meeting. If the Meeting is adjourned by the chair in its sole discretion or is postponed or otherwise rescheduled, the Meeting will be adjourned, postponed or otherwise rescheduled by the chair to a date, time and place as may be decided by the chair. The Applicants will not be required to deliver any notice of adjournment of the Meeting other than announcing the adjournment at the Meeting. (Canadian ABCP Trusts Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of September 14, 2007, these 21 Canadian Trusts had approximately $33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. CANADIAN TRUSTS: Ernst & Young's First Report on ABCP Trusts ------------------------------------------------------------ Ernst & Young, Inc. -- having consented to act as monitor of the proceedings commenced by the Pan-Canadian Investors Committee for Third-Party Structured Asset-Backed Commercial Paper under Canada's Companies' Creditors Arrangement Act -- delivered its first monitor report on March 17, 2008, to the Ontario Superior Court of Justice to apprise the Honorable Justice Colin Campbell of among other things, the Applicants' operations immediately prior to, and during the CCAA Petition Date. The Monitor told Mr. Justice Campbell that this is the first time it has performed a role as "monitor". The Monitor stated that it was not involved in the consideration of restructuring alternatives by the Pan-Canadian Committee, nor did it participate in the negotiation of a Plan of Compromise and Arrangement with various stakeholders. In preparing its Report, the Monitor relied on information provided by various parties, including certain conduit sponsors, issuing and paying agents for the Conduits or I&P Agents, CDS Clearing and Depository Services Inc., the Applicants and their advisors and noteholders. The Monitor stated that it has not audited, reviewed, or otherwise verified the information provided to it but has taken steps to do so. The Conduits are Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust and Whitehall Trust. The ABCP Market The Monitor explained that ABCP is a short-term debt instrument backed by a variety of financial assets or other asset interests. A conduit is a special-purpose entity, typically in the form of a trust, that is structured to be legally separate from its sponsor. A conduit acquires assets through various types of transactions including "synthetic transactions". ABCP is generally limited to a 365-day term, with most commercial paper having a term of 30, 60 or 90 days. ABCP is issued on either a discount or interest- bearing basis. According to the Monitor, most of the affected ABCP were issued as discount notes. ABCP programs, the Monitor expounded, are often used to fund the acquisition of long-term assets like mortgages, auto loans, cash collateralized debt obligations and credit default swaps. Even when funding short-term assets like trade receivables, ABCP issuers face the inherent timing mismatch between cash generated by the underlying assets and the cash needed to repay maturing ABCP, the Monitor stated. Typically, the Monitor disclosed, ABCP are issued by series and sometimes by classes in a series. The most common notes with respect to Affected ABCP are Series A Notes, Series E Notes and Floating Rate Notes. According to the Monitor, maturing ABCP is typically repaid with the proceeds of newly issued ABCP, a process commonly referred to as "rolling." ABCP has historically been a highly rated commercial obligation with a long history of market acceptance, the Monitor related. Thus, market participants held the view that, absent a "general market disruption", ABCP would be readily saleable without the need for extraordinary funding or protection measures. However, the Monitor clarified, to protect investors in case of a market disruption event, Series A and Series E Notes are structured with certain liquidity characteristics. Series A Notes benefit from credit facilities with liquidity providers or from other financial products that have the effect of making sufficient funds available to the Conduits to repay these notes at maturity. These facilities are usually in amounts that correspond to the amount of the ABCP outstanding. Series E Notes do not benefit from liquidity protection, the Monitor pointed out. These Notes are extendible notes which are a subset of ABCP that provide for the automatic extension of the notes for a period that, when combined with the initial term of the ABCP, can be up to 364 days. The Monitor informed Mr. Justice Campbell that the assets held in the Conduits fall into two categories: (a) Traditional securitized assets, and (b) Collateralized debt obligations. CDOs are a type of asset-backed security and structured credit product, which are not specific to one type of debt but often involve non-mortgage loans or bonds. In a purchase of Traditional Assets, the Monitor explained, funds in the Conduit are used to acquire an interest in a pool of cash flow producing assets like credit card receivables, equipment loans and leases, auto loans and leases, residential and commercial mortgages, trade receivables, corporate loans, insurance-backed loadns and personal lines of credit. The Monitor said that fund the acquisition of the collateral assets of a CDO, multiple tranches of securities are issued by the CDO offering investors various maturity and credit risk characteristics. With a CDO, a portfolio of below-investment- grade debt can be repackaged into tranches, some of which will receive investment grade ratings. In the current market, CDOs are typically structured in two ways: (1) Cash CDO, which involves the purchase of assets like loans, corporate bonds and ABS. Ownership of the assets is transferred to a special purpose vehicle issuing CDO tranches. (2) Synthetic CDO, which does not involve the purchase of cash assets but gains credit exposure to a portfolio of fixed income assets -- without owning those assets -- through the use of credit default swaps. Under a credit default swap, the credit protection seller -- in the case of ABCP, this would be the Conduit -- receives periodic cash payments in exchange for agreeing to assume the risk of loss on a specific asset or group of assets -- often a portfolio of corporate bonds or other reference entities -- in the event that the assets experience a default or other credit event. This protection would be guaranteed by posting collateral, usually assets with little or no default or credit risk. The Monitor stated that in a Synthetic CDO, credit exposure could be fully funded or could be leveraged, meaning that the collateral posted by the credit protection seller is less than the amount of the credit exposure assumed. In a leveraged super senior transaction, the "super senior" tranche would be partially funded while the subordinated tranches would be fully funded. Because the posted collateral in an LSS transaction is less than the credit risk assumed by the credit protection seller, the counterparty to the LSS credit default swap assumes a "gap risk". To manage this risk, the transaction will include events of default called "triggers". In the Conduits, the most common trigger is a mark to market trigger, in which the trigger is reached when the market value of the reference folio declines to a pre-specified level. If the trigger is reached, the credit protection seller is required to increase the amount of collateral posted. If the credit protection seller is unable or unwilling to provide additional collateral, the trade is unwound and the counterparty can utilize the posted collateral to satisfy any penalty payable on termination. The Monitor reported that at January 31, 2008, across the 20 Conduits, there is a total notional amount of roughly CA$32,000,000,000 in assets split between 189 deals: -- 97 deals are related to traditional assets for CA$7,500,000,000; -- 21 deals are either cash CDOs or unlevered credit default swaps for CA$4,500,000,000; -- 71 deals relate to LSS swaps for CA$17,600,000,000; and -- the remaining assets consist of CA$2,400,000,000 in cash received through the return of collateral or principal. Market Disruption The Monitor noted that on August 13, 2007, as a result of growing market concerns about the possible level of U.S. sub-prime mortgage exposure in the Conduits, buyers could not be found for sufficient ABCP to roll maturing notes. The trustees of certain of the Conduits therefore made demand for liquidity funding. However, the Monitor related that majority of the Liquidity Providers did not agree that the conditions for liquidity funding had occurred, and refused to provide funding. The insufficient demand for new ABCP and lack of access to liquidity funding created a series of defaults in the Affected ABCP structure. Thus, representatives of ABN AMRO, Barclays Capital, Caisse de Depot et placement du Quebec, Desjardins Group, Deutsche Bank, HSBC, PSP Investments, Merrill Lynch, National Bank and UBS, met in Montreal in August 2007, to discuss the absence of liquidity for Affected ABCP and how a solution may be reached. The meeting resulted in the Montreal Accord, under which (i) the financial institutions encouraged all holders of Third Party ABCP to continue to roll out their ABCP for a 60-day standstill period through October 15, 2007, and (ii) the ABCP Trusts agreed not to pursue any liquidity calls during that period. Ernst & Young was retained as consultant by CDPQ and National Bank Financial, Inc., to assist those parties in the implementation of the arrangements proposed under the Montreal Accord. On September 6, 2007, the Pan-Canadian Investors Committee for Third-Party Structured ABCP was formed, which also retained Ernst & Young to assist in the implementation of the Proposed Arrangements. The Monitor also disclosed that Ernst & Young and its affiliates provide audit and non-audit advisory services to certain of the Sponsors, issuer and indenture trustees of the Conduits, the Synthetic Asset Providers, the Applicants and Noteholders. Nevertheless, the Monitor assured the Court that none of the services in question relate directly to the CCAA Proceedings or to the Proposed Arrangements. Structure of Affected ABCP The Monitor averred that the structure through which the Affected ABCP and other debt instruments are issued to the Noteholders does not provide any transparency regarding the participants in the structure. This lack of transparency, the Monitor stated, underscores the importance of the efforts of the Applicants and Ernst & Young to: (1) identify Noteholders on a confidential basis; (2) take all reasonable steps to attempt to ensure that Noteholders were aware of the Proposed Arrangements and the progress made by the Applicants to implement them; and (3) determine the extent of support for the Proposed Arrangements and for the extraordinary resolutions executed to date. The Monitor explains that in the financial services industry and more particularly in the ABCP market, a "sponsor" is a generic term referring to the party that establishes the legal entity -- namely, the Conduit -- arranges for the purchase of assets to be held in the Conduit and promotes the sale and distribution of ABCP issued by the Conduit to finance the purchase of assets. Sponsors maintain records of outstanding ABCP in respect of the Conduit for which they act. With respect to the Conduits, the financial administrative agent and the administrative agent are typically either the same entity as the Sponsor, or a related corporation to the Sponsor. ABCP issued by the Conduits is initially registered in the book- based securities clearing, settlement and depository transfer system administered by the CDS. As a general rule, the ABCP notes initially issued by the Conduits are evidenced by global notes registered in the name of CDS or its nominee, for the benefit of its members -- Participants. Although the Participants have detailed knowledge of ABCP held for their own account an of ABCP held for the account of their clients, they have a duty of confidentiality toward their clients, and, with limited exceptions, are not in a position to provide contact information for their clients or the details of the ABCP held by their clients. As a result, a single comprehensive list of the Noteholders of any series of Affected ABCP issued by any Conduit is not readily available, unless all the Noteholders voluntarily make themselves known, and provide confirmation of their ownership, the Monitor said. It is, however, possible to "flow" information down to Noteholders through CDS and the Participants. Efforts Undertaken to Notify Noteholders The efforts undertaken by the Applicants and the Monitor to inform the Noteholders, include: -- 14 press releases, five of which called on Noteholders to communicate with the Monitor to confirm their outstanding holdings of Affected ABCP; -- the Monitor's publicly available Web site containing information and documents with respect to the current liquidity problems impacting the Affected ABCP; and -- conference calls held by Purdy Crawford, chairman of the Pan-Canadian Committee, the latest of which was on February 4, 2008, to provide updates on the Proposed Arrangements. The Monitor also informed Mr. Justice Campbell that it has established and maintained electronic data rooms to provide information to assist Noteholders, swap counterparties, Liquidity Providers and Credit Enhancers to determine whether they would support the Applicants' restructuring efforts. Cash Balances and Actual & Projected Cash Flows The Monitor reported that all Sponsors have provided it with monthly cash flow projections, by Conduit, for various period through April 20, 2008. According to the Monitor, the Monthly Cash Flow Projections indicate substantial positive projected cash flows in all Conduits. The Monitor disclosed that it has identified at least 89% of the outstanding Affected ABCP by dollar value. Procedures will be established for the Monitor to track cash balances on an ongoing basis during the CCAA Proceedings, the Monitor told the Court. Potential Traditional Asset Sales The Monitor is aware of a limited number of pending potential sales of Traditional Assets held in the Conduits to the applicable Traditional Asset Provider for proceeds of, in each instance, Par Value. The aggregate proceeds of the potential sales is more than CA$1,500,000,000, the Monitor noted. Further details of the asset sales as they become available will be provided by the Monitor. A full-text copy of the Monitor's First Report is available for free at: http://bankrupt.com/misc/ABCPTrusts_FirstMonitorReport.pdf (Canadian ABCP Trusts Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of September 14, 2007, these 21 Canadian Trusts had approximately $33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. CANADIAN TRUSTS: Coventree OKs Committee's Call to Vote on Plan --------------------------------------------------------------- Coventree Inc. acknowledged Pan-Canadian Investors Committee's application filed before the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act to ask the Court to call a meeting of noteholders to vote on the Investors Committee's plan to restructure Canadian third party asset-backed commercial paper and the granting of an initial order. The Investors Committee has filed a copy of the Restructuring Plan, the related Information Statement and other documents with the Court. Coventree continues to cooperate with and support the efforts of the Investors Committee. The company worked with the Investors Committee in developing the Restructuring Plan and supports it under the terms of a plan support agreement. Prior to the filing of the Restructuring Plan, the terms of the agreements under which Coventree administers and manages the conduits it sponsors were amended with the approval of the Investors Committee to provide for the payment of fees by certain conduits that have not been paid since the commencement of the market disruption on Aug. 13, 2007. As a result of these amendments, Coventree will receive fees that it believes in aggregate will at a minimum cover the costs of continuing to perform its obligations as administrator of the Coventree-sponsored conduits until the expected implementation of the Restructuring Plan. Depending on the timing of receipt of those fees and when wind-up costs are taken into consideration, Coventree's profitability could vary significantly in any particular quarter. These amendments will be effective regardless of whether the Restructuring Plan is consummated. Under the Order, the Coventree-sponsored conduits and the Coventree entities that administer, manage and sponsor them are now subject to stays of proceedings under the CCAA, pending the approval by noteholders and implementation of the Restructuring Plan. Payment of fees and expenses to Coventree will continue in the ordinary course and are secured by a special charge on the assets of the Coventree-sponsored conduits. While Coventree was not an applicant under the application filed with the Court, the Order affects Coventree and stays potential legal proceedings that may be brought against it in connection with the Market Disruption. Under the Restructuring Plan, the assets of the Coventree- sponsored conduits will be transferred to new special purpose entities that will issue new notes to holders of existing securities, and it is expected that the Coventree-sponsored conduits will be terminated. The new special purpose entities will be administered by a new third party administrator after an orderly transition. The Restructuring Plan also provides that unadvanced credit enhancement reserves funded by loans from Coventree to the Coventree-sponsored conduits will be repaid to Coventree in full upon the implementation of the Restructuring Plan. Certain other credit enhancement loans from Coventree already applied by the Coventree-sponsored conduits toward the payment of ABCP will be assumed by the new special purpose entities and retain their existing priority for repayment. The Restructuring Plan also provides that Coventree will receive comprehensive releases in respect of legal claims that might be asserted against it in respect of its role as sponsor, administrative agent and financial services agent for the Coventree-sponsored conduits. The Restructuring Plan states that Coventree will also provide similar releases to other participants in the restructuring. There can be no assurance that the Restructuring Plan will be implemented. The Investors Committee has advised that implementation of the Restructuring Plan 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 requisite approvals of noteholders 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. Previously, the company established a special committee of the company's board of directors to explore and consider strategic options to maximize value for shareholders. Among other things, the Special Committee considered the future viability of the company's existing business units and concluded that they were no longer viable. The Special Committee also concluded that it would not actively pursue any strategic options for the company that would result in it having ongoing operations, and advised that it is expected that the company will seek an orderly windup of its operations once the Restructuring Plan is implemented. As a result of these conclusions and developments, after a recommendation made by the Special Committee, the board of directors of the company dissolved the Special Committee. About Coventree Prior to disruption in the Canadian ABCP market since Aug. 13, 2007, Toronto, Ontario-based Coventree Inc. (TSX: COF) -- http://www.coventree.ca/-- was a financial services company focused on specialized niches. Coventree's principal business operations are currently in two business segments -- Coventree Capital & Admin and Coventree Investments. Coventree Capital & Admin is comprised of two businesses, the Capital Markets business and the Administration business. Prior to the Market Disruption, the Capital Markets business specialized in structured finance using securitization-based funding technology. The Administration business provides services to ABCP trusts sponsored by the company and by third parties. Prior to the Market Disruption, Coventree Investments made strategic investments in synergistic businesses. About Canadian Trusts As reported in the Troubled Company Reporter on March 18, 2008, 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 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. 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. 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. CBRE REALTY: S&P Holds Ratings on CDO Exposed to Macklowe Debt -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on one commercial real estate (CRE) collateralized debt obligation (CDO) transaction with direct exposure to approximately $7 billion of financing to Macklowe Properties that matured on Feb. 9, 2008, and has not paid off. The affirmations affect 11 classes from CBRE Realty Finance CDO 2006-1 Ltd. The affirmations reflect Standard & Poor's analysis of the current credit characteristics of the asset pool as well the transaction's obligations. The approximately $7.2 billion of financing to Macklowe Properties is part of a three-pool financing package (Macklowe EOP Pool 1-3) that is secured directly and indirectly by seven Manhattan office properties. Macklowe Properties purchased the seven office buildings from Equity Office Properties in connection with Blackstone Group L.P.'s acquisition of EOP last year. The Macklowe EOP Pool 1-3 financing package was originated at $7 billion with a 12-month term expiring Feb. 9, 2008, with no extension options. The debt was not paid off at maturity, and it is S&P's understanding that the most subordinate portion of the financing package, $1.2 billion of equity bridge financing, was subsequently extended for one year and increased to $1.4 billion. Negotiations are continuing between Macklowe Properties, the borrower, and its lenders for a possible restructuring of the remaining $5.8 billion of mortgage and mezzanine debt, which could lead to a one-year extension to facilitate an orderly sale of the properties. The debt was considered in default as of March 10, 2008. At this time, Standard & Poor's has identified these rated CRE CDO transactions with exposure to mezzanine debt from Macklowe EOP Pool 1: -- CBRE Realty Finance CDO 2006-1 Ltd.: $24 million of the $237.9 million mezzanine 3 tranche, which is subordinate to $1.6 billion of mortgage debt and $1.1 billion of mezzanine debt from Macklowe EOP Pool 1. The $24 million asset represents 4% of the total assets held in CBRE Realty Finance CDO 2006-1 Ltd.; -- Petra CRE CDO 2007-1 Ltd.: $25.5 million of the same mezzanine 3 tranche referenced above, which represents 3% of the total assets held in Petra CRE CDO 2007-1 Ltd. Standard & Poor's is currently conducting a full analysis of the transaction as part of the deal becoming effective; and -- Carbon Capital II Real Estate CDO 2005-1: $17.7 million of the same mezzanine 3 tranche referenced above, which represents 4% of the total assets held in Carbon Capital II Real Estate CDO 2005-1 Ltd. Standard & Poor's placed its ratings on five classes from Carbon Capital II Real Estate CDO 2005-1 Ltd. on CreditWatch negative, in part due to the transaction's exposure to Macklowe EOP Pool 1. Analysis Of Rated CRE CDO CBRE Realty Finance CDO 2006-1 Ltd. According to the Feb. 19, 2008, trustee report, the collateral pool backing CBRE Realty Finance CDO 2006-1 Ltd. consisted of 50 assets with an aggregate principal balance of $592 million. The collateral includes 26 CREL assets ($479.6 million, 81%), 24 classes of commercial mortgage-backed securities pass-through certificates ($107.2 million, 18%), and cash ($5.2 million, 1%). The assets exhibited credit characteristics consistent with 'BB' rated obligations, excluding any impaired assets. The Macklowe EOP Pool 1 exposure ($24 million, 4%) was the only asset that Standard & Poor's analysis considered credit impaired. While Standard & Poor's analysis of the current credit characteristics of the asset pool and the transaction's obligations led us to affirm S&P's ratings on all of the rated classes, the cushion available for classes J and K have decreased since issuance. Additional Rated Exposure to Macklowe EOP Pool 1-3 In addition to the previously referenced exposures, these rated CMBS transaction has exposure to mortgage debt from Macklowe EOP Pool 1: -- COMM 2007-FL14: The $1.6 billion interest-only floating-rate first mortgage loan from Macklowe EOP Pool 1. These rated CRE CDOs have exposure to subordinate mortgage debt from Macklowe EOP Pool 1: -- Brascan Real Estate CDO 2004-1 Ltd.: $5 million of the $55 million raked MKL2 class from COMM 2007-FL14 and $15 million of the $54 million raked MKL3 class from COMM 2007-FL14. The assets represent approximately 2% and 6% of the total assets held in Brascan Real Estate CDO 2004-1 Ltd., respectively; and -- Brascan Structured Notes 2005-2 Ltd.: $5 million of the $54 million raked MKL3 class from COMM 2007-FL14, which is approximately 2% of the total assets held in Brascan Structured Notes 2005-2 Ltd. Finally, these rated CMBS has exposure to mortgage debt from Macklowe EOP Pool 3: -- LB-UBS 2006-C1: The $420.8 million mortgage on 1301 Avenue of the Americas from Macklowe EOP Pool 3. The loan is the largest asset (approximately 17% of the aggregate pool balance) in LB-UBS 2006-C1 and matures on Jan. 11, 2016. All but $63.8 million of the $1.2 billion of mezzanine debt from Macklowe EOP Pool 3 matured on Feb. 9, 2008. Standard & Poor's will continue to have discussions with the parties involved in the workout negotiations with Macklowe Properties and evaluate its rated CMBS and CRE CDO transactions that have either direct or indirect exposure to the Macklowe EOP Pool 1-3 financing package. As S&P conducts its evaluations, it will consider the most recent information available regarding the negotiations, as well as their impact on the transactions, which may prompt further commentaries or rating actions. Standard & Poor's analysis of the CRE CDO transaction considered the underlying credit characteristics of the assets as well as the potential impact of changes in the credit characteristics. The analysis adequately supports the affirmed ratings. Ratings Affirmed CBRE Realty Finance CDO 2006-1 Ltd. CRE CDO Class Rating ----- A-1 AAA A-2 AAA B AA C A+ D A- E BBB+ F BBB G BBB- H BBB- J BB K B CHARMING SHOPPES: Weak Performance Cues Moody's Rating Cut to 'B2' ------------------------------------------------------------------ Moody's Investors Service downgraded the corporate family and probability of default ratings of Charming Shoppes, Inc. to B2 from Ba3. The outlook is stable. The downgrade reflects the company's weak operating performance as a result of its inability to effectively adapt to changing customer preferences and a weak retail sales environment. These issues combined to have a negative impact on margins and resulted in the company's credit metrics deteriorating significantly over a relatively short period of time. Given the ongoing challenging retail sales environment, the downgrade also reflects Moody's expectation that credit metrics will remain constrained over the next twelve months. This action concludes the review for a possible downgrade. These ratings were downgraded: -- Corporate family rating to B2 from Ba3; and -- Probability of default rating to B2 from Ba3. -- The outlook is stable. The B2 corporate family rating incorporates the company's weak operating performance and very weak credit metrics, as well as Moody's expectation that the credit metrics will remain weak over the next twelve months as a result of an overall soft retail sales environment. The rating is also constrained by the company's high seasonality and the high fashion risk associated with the specialty apparel industry. The rating is supported by the company's leading position in the plus-size specialty apparel industry, its nationwide geographic diversification, and its adequate liquidity. The stable outlook reflects the company's adequate liquidity and Moody's expectation for a modest further deterioration in the company's operating performance. Charming Shoppes, Inc., headquartered in Bensalem, Pennsylvania, is a multi-channel, multi-brand specialty apparel retailer primarily focused on plus-size women's apparel. For the fiscal year ended Feb. 2, 2008, revenues were approximately $3.0 billion. CHARTER COMM: Affiliate Completes $500 Mil. Offering of Term Loans ------------------------------------------------------------------ Charter Communications Inc.'s subsidiary, Charter Communications Operating LLC, closed on $500 million principal amount of incremental term loans under the Charter Operating credit facilities. The net proceeds of the Incremental Term Loans will be used for general corporate purposes. The Incremental Term Loans have a final maturity of March 6, 2014, and prior to this date will amortize in quarterly principal installments totaling 1% annually beginning on June 30, 2008. The Incremental Term Loans bear interest at LIBOR plus 5%, with a LIBOR floor of 3.5%, and are otherwise governed by and subject to the existing terms of the Charter Operating credit facilities. About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (NASDAQ: CHTR) -- http://www.charter.com/-- is a broadband communications company and a publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides scalable, tailored, and cost-effective broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. * * * As reported in the Troubled Company Reporter on March 14, 2008, Moody's Investors Service affirmed these ratings for Charter Communications Inc.: (i) corporate family rating: Caa1; (ii) probability-of-default rating: Caa2; and (iii) senior unsecured notes: Ca (LGD5 -- 87%). CIT HOME: Realized Losses Cues S&P's 'D' Rating on Class BV Certs. ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on the class BV home equity loan asset-backed certificates from CIT Home Equity Loan Trust 2002-1 to 'D' from 'CCC'. The other outstanding ratings on this transaction are not affected. S&P downgraded class BV from loan group 2 to 'D' due to realized losses of $48,731.83 during the February 2008 remittance period. Cumulative realized losses to date for group 2 are $10.045 million, or 4.85% of the original principal balance of this loan group. Subordination, excess interest, and overcollateralization provide credit support for this transaction. The underlying collateral consists of fixed- and adjustable-rate, conventional, fully amortizing, closed-end home equity loans secured by first, second, or more junior mortgages on one- to four-family residential properties. CLASSICSTAR LLC: U.S. Trustee Wants Chapter 11 Case Converted ------------------------------------------------------------- Richard F. Clippard, the U.S. Trustee for Region 8, asks the Hon. William S. Howard of the United States Bankruptcy Court for the Eastern District of Kentucky to convert ClassicStar LLC's Chapter 11 case to a Chapter 7 liquidation proceeding or, to the possible extent, dismiss its case. The U.S. Trustee tells the Court that there is no reasonable likelihood that the Debtor will propose a bankruptcy plan. The U.S. Trustee says Boyce Sanderson, the appointed spokeperson of the Debtor, could no longer perform his duties due to an on-going criminal investigation. The Debtor has informed the Official Committee of Unsecured Creditors and the U.S. Trustee about Mr. Sanderson's criminal case. The U.S. Trustee points out that the Debtor does not have any representative other than Mr. Sanderson who willing to prepare, review and approve monthly operating reports of the Debtor, which are required under the Bankruptcy Code. The Debtor did not file monthly operating reports for January and February this year, trial attorney Philip L. Hanrahan, Esq., says. The Committee and the U.S. Trustee do not know the current financial status of the Debtor. A hearing has been set for April 10, 2008, at 3:15 p.m., in the U.S. bankruptcy courtroom B at 100 E. Vine Street, 3rd floor in Lexington, Kentucky. Objections to the U.S. Trustee's request, if any, are due April 7, 2008, at 5:00 p.m. Headquartered in Lexington, Kentucky, ClassicStar LLC operates as a thoroughbred horse breeder. The company also leases horses and rents out the reproductive systems of select thoroughbred mares. The company filed for Chapter 11 protection Sept. 14, 2007 (Bankr. E.D. Ky. Case No.07-51786). James W. Gardner, Esq., at Henry Watz Gardner Sellars & Gardner, PLLC, represents the Debtor. The U.S. Trustee for Region 8 appointed creditors to serve on an Official Committee of Unsecured Creditor in this case. Elizabeth Lee Thompson, Esq., at Stites & Harbison, PLLC, represents the Committee. When the Debtor filed for protection against its creditors, it listed assets and debts between $1 million to $100 million. According to Bloomberg News, the Debtor posted assets of $227 million, comprised of account receivable owed to National Equine Lending Corp., and debts of $72.7 million. * * * On Jan. 11, 2008, the Court extended the Debtor's exclusive rights to file a plan until May 15, 2008. CLEAR CHANNEL: Buyers Sue Financial Backers to Pursue $19BB Deal ---------------------------------------------------------------- Bain Capital LLC and Thomas H. Lee Partners LP, which have agreed to buy Clear Channel Communications Inc., sued a group of banks that promised to finance the $19 billion acquisition, to compel them to honor the agreement, reports say. The private-equity firms filed complaints in New York state court in Manhattan and in Bexar County, Texas. The firms alleged the backers breached a contract entered in May to fund the deal. Clear Channel joined the suit in Texas. According to Bloomberg News, the New York case wants a judge to order the banks to provide the promised loans. In Texas, Clear Channel asked for an order banning the banks from interfering with the merger agreement and sought more than $26 billion in damages. The main New York case on the Clear Channel buyout is BT Triple Crown Merger Co. v. Citigroup, 08-600899, New York State Supreme Court, County of New York (Manhattan). The Texas case is Clear Channel Communications Inc. and CC Media Holdings Inc. v. Citigroup, 2008-CI-04864, Texas District Court, Bexar County, Texas. As reported by the Troubled Company Reporter on March 26, 2008, the privatization of Clear Channel appeared in danger of collapsing after the backers reportedly failed to reach agreement on the final financing of the transaction. Clear Channel had anticipated closing the merger agreement by March 31, 2008. The company's shareholders approved the adoption of the merger agreement, as amended, in which Clear Channel would be acquired by CC Media Holdings Inc., a corporation formed by private-equity funds co-sponsored by Lee Partners and Bain Capital. The deal includes $19.4 billion of equity and $7.7 billion of debt. Talks between the private-equity firms and their banks reportedly became mired over details of the credit agreement, the people familiar with the matter said. The banks that agreed to finance the deal include Citigroup Inc., Morgan Stanley, Deutsche Bank AG, Credit Suisse Group, Royal Bank of Scotland PLC and Wachovia Corp. The Wall Street Journal, citing a person familiar with the talks, reported that the main dispute centers on the syndicate's demand that the private-equity firms replace a long-term financing package of at least six years in the original agreement with a short-term, three-year bridge-financing agreement; and a condition that the buyers not use a revolving credit facility or Clear Channel's cash flow to pay down about $3.8 billion in short-term debt securities. About Bain Capital Boston, Massachussetts-based Bain Capital Partners LLC -- http://www.baincapital.com/-- is a private investment firm with approximately $40 billion in assets under management. Its family of funds includes private equity, venture capital, public equity and leveraged debt assets. Absolute Return Capital LLC is the global macro affiliate of Bain Capital. Bain Capital Private Equity has raised nine funds and invested in more than 200 companies. Bain Capital (Europe) Limited, an affiliate, is dedicated to investment opportunities in the European market. Bain Capital Venture Partners LLC is the venture capital arm of Bain Capital. Sankaty Advisors LLC, the credit affiliate of Bain Capital LLC, is a private manager of high-yield debt obligations. In October 2006, Michaels Stores Inc. announced the completion of its merger with affiliates of Bain Capital Partners LLC and The Blackstone Group. As a result, Bain Capital Partners LLC and Blackstone own equal stakes in Michaels, and funds affiliated with Highfields Capital Management own a minority stake. About Thomas Lee Partners Boston, Massachussetts-based Thomas H. Lee Partners LP -- http://www.thlee.com/-- Thomas H. Lee Partners is the teddy bear at the gate. Known as a "friendly" leveraged buyout (LBO) firm, the company uses a mix of debt, funds from institutional investors, and its own money to buy companies. Unlike the fearsome LBO outfits of the 1980s, Thomas H. Lee Partners eschews the axe for the handshake; it builds up a stake and courts management cooperation. Lee then usually sells the revamped acquisitions or takes them public. Thomas H. Lee, who founded Thomas H. Lee Partners in 1974, left his namesake firm in 2006 to start a long-planned rival hedge fund and private equity venture. The company has teamed up with Bain Capital to buy media titan Clear Channel for almost $20 billion. About Clear Channel Communications Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. As of Dec. 31, 2007, it owned 717 core radio stations, 288 non-core radio stations which are being marketed for sale and a leading national radio network operating in the United States. COMVERSE TECHNOLOGY: Receives Wells Notice from SEC Staff --------------------------------------------------------- Comverse Technology Inc. received on March 21, 2008, a "Wells Notice" from the staff of the United States Securities and Exchange Commission arising out of its investigation of the company's past stock option grant practices and certain unrelated accounting matters. The company said in a regulatory filing with the Commission that the matters were the subject of an investigation by a Special Committee of the company's Board of Directors. On Jan. 29, 2008, the Special Committee confirmed the existence of option backdating and earnings manipulation. The Wells Notice provides notification that the SEC staff intends to recommend that the SEC bring a civil action against the company alleging violations of certain provisions of U.S. securities laws. Remedies that the staff of the SEC may seek could include, among other things, a civil penalty. The company intends to provide a written submission to the SEC in response to the Wells Notice before the staff makes a formal recommendation to the SEC on what action, if any, should be brought by it. About Comverse Technology Based in Woodbury, New York, Comverse Technology Inc., -- http://www.cmvt.com/-- (Pink Sheets: CMVT.PK) through its Comverse Inc. subsidiary, provides software and systems enabling network-based multimedia enhanced communication and billing services. The company's Total Communication portfolio includes value-added messaging, personalized data and content-based services, and real-time converged billing solutions. Other Comverse Technology subsidiaries include: Verint Systems (VRNT.PK), which provides analytic software-based solutions for communications interception, networked video security and business intelligence; and Ulticom (ULCM.PK), which provides service enabling signaling software for wireline, wireless and Internet communications. * * * As reported in the Troubled Company Reporter on March 13, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating and other ratings on New York, New York-based Comverse Technology Inc. to 'B+' from 'BB-' and removed them from CreditWatch. The outlook is negative. CREDIT SUISSE: Limited Paydown Cues Fitch to Affirm Ratings ----------------------------------------------------------- Fitch has affirmed Credit Suisse Commercial Mortgage Trust, series 2007-C1, commercial mortgage pass-through certificates as: -- $34.1million class A-1 at 'AAA'; -- $139 million class A-2 at 'AAA'; -- $98.3 million class A-AB at 'AAA'; -- $758 million class A-3 at 'AAA'; -- $1.3 billion class A-1-A at 'AAA'; -- $125 million class A-MFL at 'AAA'; -- $212.2 million class A-M at 'AAA'; -- $286.6 million class A-J at 'AAA'; -- $3 billion interest-only class A-SP at 'AAA'; -- $3.4 billion interest-only class A-X at 'AAA'; -- $25.3 million class B at 'AA+'; -- $37.9 million class C at 'AA'; -- $33.7 million class D at 'AA-'; -- $21.1 million class E at 'A+'; -- $29.5 million class F at 'A'; -- $33.7 million class G at 'A-'; -- $37.9 million class H at 'BBB+'; -- $33.7 million class J at 'BBB'; -- $37.9 million class K at 'BBB-'; -- $8.4 million class L at 'BB+'; -- $12.6 million class M at 'BB'; -- $8.4 million class N at 'BB-'; -- $8.4 million class O at 'B+'; -- $8.4 million class P at 'B'; -- $8.4 million class Q at 'B-'; -- $12.6 million class S at 'CCC'. Fitch does not rate class T. The rating affirmations reflect stable performance and limited paydown since issuance. As of the March 2008 distribution date, the transaction has paid down by 0.2% to $3.36 billion from $3.37 billion at issuance. 54% of the transaction is comprised of interest-only loans. There are three specially serviced loans (0.55%) with expected losses that would be fully absorbed by the non-rated class T. The largest specially serviced loan (0.22%) is secured by a 258- unit multifamily property located in Columbus, Ohio. The loan is 90+ days delinquent, and was transferred to special servicing in October 2007 due to monetary default. The second-largest specially serviced loan (0.21%) is secured by a 100-unit multifamily property located in Blakely, Pennsylvania. The loan is 90+ days delinquent and was transferred to special servicing in September 2007 due to imminent default. The third-largest specially serviced loan (0.12%) is secured by an 82-key hotel located in Patterson, California that is 90+ days delinquent. It transferred to special servicing in September 2007 due to imminent default. None of the loans mature in 2008, 2009, or 2010. DEATH ROW: Withdraws Request for Approval of Asset Sale Procedures ------------------------------------------------------------------ R. Todd Neilson, the Chapter 11 trustee appointed in the bankruptcy case of music label Death Row Records Inc., has withdrawn his request for approval of bidding procedures related to the auction of the Debtor's assets, Bill Rochelle of Bloomberg News reports. Mr. Neilson, however, indicated he plans to re-file the request soon. As reported in the Troubled Company Reporter on Feb. 8, 2008, although Mr. Neilson received a $25 million cash offer from Warner Music Group Corp., which was declared lead bidder, to buy all of the record label's assets, including all recorded music and publishing rights, the Chapter 11 trustee wanted to see if there were higher and better offers. So he set an auction for the Debtor's assets. Bid deadline was originally scheduled for April 11 and the auction for April 24. 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. DEATH ROW: Ch. 11 Trustee Cancels Request to OK Tupac Settlement ---------------------------------------------------------------- R. Todd Neilson, the Chapter 11 trustee of music label Death Row Records Inc., has withdrawn his request for the U.S. Bankruptcy Court for the Central District of California to approve a settlement agreement resolving all litigation brawls between him and the administrators of the Tupac Shakur Estate, Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on March 18, 2008, the Court scheduled a hearing on April 8, 2008, to approve the settlement agreement between the parties. As previously reported, 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. 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 OKs $46.2MM Wheel Bearing Biz Sale to Kyklos --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Delphi Corp. and its debtor-affiliates to sell their global wheel bearings business to Kyklos Bearing International, Inc., formerly known as Kyklos, Inc., for $46.2 million plus other consideration. As reported in the Troubled Company Reporter on Feb. 22, 2008, Kyklos, a wholly owned subsidiary of Hephaestus Holdings, Inc., was declared the successful bidder during the Court-approved auction of the Bearings Business. In January 2008, Delphi Automotive Systems LLC and Delphi Technologies, Inc., debtor-subsidiaries of Delphi Corp., planned to sell their global bearings business to ND Acquisition Corp., or to another party submitting a higher and better offer for the business. ND Acquisition, a wholly owned subsidiary of private equity investment firm Resilience Capital Partners LLC, agreed to submit a stalking horse bid of $44,200,000, subject to adjustments, for the Bearings Business. A full-text copy of the Sale and Purchase Agreement between the Debtors and Kyklos, dated Feb. 19, 2008, is available for free at: http://bankrupt.com/misc/Delphi_KyklosBearingsSalePact.pdf Any and all objections to the Sale not waived, withdrawn or resolved are overruled with prejudice. 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. 120; 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. DENNY'S CORP: Weak Performance Spurs S&P to Give Negative Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Denny's Corp. to negative from stable. S&P also revised the ratings, including the 'B+' corporate credit rating, on the Spartanburg, South Carolina-based company. "The outlook revision reflects Denny's weaker-than-expected operating performance that results in significant margin deterioration," said Standard & Poor's credit analyst Diane Shand. The action also incorporates S&P's expectation that the current negative trend is likely to continue throughout 2008 and margins will remain pressured by increasing commodity costs. DLJ COMMERCIAL: Fitch Junks Rating on $9MM Class B-7 Certificates ----------------------------------------------------------------- Fitch downgraded DLJ Commercial Mortgage Corp. mortgage pass- through certificates, series 1999-CG3 as: -- $9.0 million class B-7 to 'CCC' from 'B-' and assigns a distressed recovery rating of 'DR2'. In addition, Fitch lowered the DR rating on this class: -- $1.9 million class B-8 to 'C/DR6' from 'C/DR5'. Fitch also affirmed these classes: -- $489.1 million class A-1B at 'AAA'; -- $17.7 million class A-1C at 'AAA'; -- Interest-only class S at 'AAA'; -- $25.0 million class A-2 at 'AAA'; -- $49.5 million class A-3 at 'AAA'; -- $13.5 million class A-4 at 'AAA'; -- $15.7 million class A-5 at 'AAA'; -- $18.0 million class B-1 at 'AAA'; -- $15.7 million class B-2 at 'AAA'; -- $27.0 million class B-3 at 'AA-'; -- $13.5 million class B-4 at 'BBB+'; -- $9.0 million class B-5 at 'BBB-'; -- $11.2 million class B-6 at 'BB'. Class A-1A is paid in full. Class C has been fully depleted. The downgrade to class B-7 is due to an increase in actual and Fitch expected losses since Fitch's last rating action, which will severely impact class B-8. As of the March 2008 distribution date, the pool's aggregate certificate balance has been reduced approximately 20.4% to $715.8 million from $899.2 million at issuance. Forty-six loans representing 50.2% of the pool have defeased. Fitch has identified 26 loans of concern (12.3%), one of which is the specially serviced asset (0.2%). Losses are expected on the specially serviced asset, a 94-unit multifamily property located in Anderson, Indiana. The loan transferred to special servicing in November 2005 due to monetary default resulting from an occupancy decrease. The largest loan of concern (3.5%) is secured by an office property in San Mateo, California. There has been a decline in cash flow since issuance. However, occupancy has remained stable at 86% as of September 2007, a slight decline from 89% at issuance. The loan matures in August 2009. The second largest loan of concern (1.1%) is secured by a retail property in Dublin, Ohio. The original tenant, BJ's Wholesale Club, vacated the property and continues to pay the rent each month. They intend to sublease the space. The loan matures in August 2009. Fitch continues to monitor upcoming maturities. 76.1% of the pool is scheduled to mature in 2009, of which 34.9% have defeased. The weighted average coupon of the remaining loans is 8.02%. EL PASO: Completes $752 Million Sale of Three Gulf Properties ------------------------------------------------------------- El Paso Corporation closed on the sale of certain Gulf of Mexico, Onshore, and Texas Gulf Coast properties as a part of its portfolio high-grading efforts. In total, El Paso contracted for the sale of an estimated 309 billion cubic feet equivalent of proved reserves for $752 million in four transactions, each with an effective date of Nov. 1, 2007. On Jan. 16, 2008, El Paso entered into purchase and sale agreements totaling $517 million for properties in its Texas Gulf Coast and Onshore regions with an estimated 191 Bcfe of proved reserves. This transaction includes the sale of Gulf of Mexico properties with proved reserves of an estimated 118 Bcfe for $235 million plus the assumption of future plugging and abandonment liabilities. The Gulf of Mexico transaction also included the assumption by the purchaser of future plugging and abandonment liabilities associated with those properties, which were reflected on El Paso's balance sheet as asset retirement obligations of $93 million as of Dec. 31, 2007. After closing adjustments, final cash proceeds are expected to be approximately $650 million. The proceeds are being used for the reduction of debt incurred for the acquisition of Peoples Energy Production Company in September 2007. "The sale of these properties, together with the Peoples acquisition, reduces our per-unit lease operating costs, increases our future production growth rate, and increases the onshore U.S. weighting of our inventory of future capital projects," said Brent Smolik, president of El Paso Exploration & Production Company. "We will continue to look for opportunities to enhance our efficiency, improve the quality of our inventory, and further high grade our portfolio." Jefferies Randall & Dewey acted as financial advisor to El Paso. About El Paso Headquartered in Houston, Texas, El Paso Corporation (NYSE: EP) -- http://www.elpaso.com/-- provides natural gas and related energy products. El Paso owns North America's largest interstate natural gas pipeline system and one of North America's largest independent natural gas producers. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $1.71 billion in total assets available to pay $2.41 billion in total current liabilities. * * * As reported in the Troubled Company Reporter on Nov. 20, 2007, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit ratings on El Paso Corp. and subsidiaries. The outlook remains positive. ENRON CORP: To Get $1 Bil. as Claims Settlement from Citigroup -------------------------------------------------------------- Citigroup will pay $1.66 billion to Enron Corp. and withdraw certain claims in the Enron bankruptcy proceeding. Citi reached settlement agreements to resolve two largest remaining claims against Citi arising out of the collapse of Enron in 2001. Both settlements are fully covered by Citi's existing litigation reserves. The Enron Bankruptcy Estate filed bankruptcy and fraud claims against Citi in the United States Bankruptcy Court in New York totaling approximately $21 billion. Under the terms of the settlement agreement, Enron will release all of its claims against Citi and certain other parties. Enron will also allow specified Citi-related claims in the bankruptcy proceeding, including all of the bankruptcy claims of parties holding approximately $2.4 billion of Enron credit-linked notes. Citi reached a separate settlement agreement resolving all disputes with the holders of the CLNs, including a suit against Citi pending in the Federal District Court in Houston. The settlements provide that Citi denies any wrongdoing and has agreed to the settlements solely to eliminate the uncertainties, burden and expense of further protracted litigation. The Enron settlement agreements must be approved by the bankruptcy court. Citi made these statement about the settlements: "We are pleased to have reached a successful resolution of the two largest outstanding matters dating from the Enron disputes." About Citigroup Citigroup -- http://www.citigroup.com/or http://www.citi.com/-- is a financial services company that has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for chapter 11 protection on Dec. 2, 2001 (Bankr. S.D.N.Y. Case No. 01-16033) following controversy over accounting procedures, which caused Enron's stock price and credit rating to drop sharply. The Debtors filed their Chapter Plan and Disclosure Statement on July 11, 2003. On Jan. 9, 2004, they filed their Fifth Amended Plan and on the same day the Court approved the adequacy of the Disclosure Statement. Judge Arthur Gonzalez confirmed the Company's Modified Fifth Amended Plan on July 15, 2004, and numerous appeals followed. The Debtors' confirmed chapter 11 Plan took effect on Nov. 17, 2004. ESTYLE INC: Slow Economy and Low Mall Traffic Sparks Ch. 11 Filing ------------------------------------------------------------------ Blaming economic woes and mall traffic drop, EStyle Inc. filed for Chapter 11 protection before the U.S. Bankruptcy Court for the Central District of California, Bill Rochelle of Bloomberg News reports. For the 2007 fiscal year, the Debtor, Mr. Rochelle says, disclosed a net loss of $10.4 million on $49.2 million revenues, and an operating loss of $11.4 million. Mr. Rochelle relates that the Debtors is shuttering six stores, considering a sale, and renegotiating store leases. According to the petition, the Debtor owes $2.5 million on a revolving loan, $2 million on a secured term loan, and $7.6 million to unsecured creditors, Mr. Rochelle relates. Headquartered in Los Angeles, California, EStyle Inc. dba babystyle -- http://www.babystyle.com/-- operates 23 stores selling maternity, baby and children's apparel. ESTYLE INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: eStyle Inc. dba Babystyle dba Cadeau Maternity dba Kidstyle dba Cadeau Designs dba Cadeau LA dba Estork dba Babystyle.com 865 South Figueroa Street Ste 2700 Los Angeles, CA 90017 Bankruptcy Case No.: 08-13518 Chapter 11 Petition Date: March 19, 2008 Court: Central District of California (Los Angeles) Judge: Samuel L. Bufford Debtor's Counsel: David S. Kupetz, Esq. Sulmeyer Kupetz 333 South Hope Street, 35th Floor Los Angeles, CA 90071 Tel: 213-626-2311 dkupetz@sulmeyerlaw.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ New Breed Logistics Inc. trade debt $260,000 7900-400 Center Drive Greensboro, NC 27409 UPS Supply Chain Solutions trade debt $200,000 1515 West 190th Street, Suite 300, Gardena, CA 90248 J Hage Construction LLC trade debt $174,441 Attn: Jordan Hage 21034 Heron Way, Suite #104 Lakeville, MN 55044 Robeez trade debt $108,994 7979 Enterprise Street Burnaby BC V5A 1V5, Canada Dream Int'l USA Inc. trade debt $95,527 Direct Marketing Solutions trade debt $83,674 UPS trade debt $75,000 Splendid Littles trade debt $73,550 Pickle trade debt $66,306 Charlie Rocket trade debt $53,000 Manulife Financial real property $52,853 lease Gilbert Company Inc. trade debt $50,000 Oracle USA Inc. licensing $49,586 agreement Crocs Inc. trade debt $47,075 Atlas Paper Company trade debt $46,375 Citizens of Humanity LLC trade debt $45,402 Epsilon Data Management trade debt $45,231 Newco International Inc. trade debt $42,278 Bugaboo North America trade debt $41,090 Petunia Pickle Bottom trade debt $38,171 E*TRADE FINANCIAL: President and COO Leaving Effective May 16 ------------------------------------------------------------- E*TRADE Financial Corp. on Monday disclosed that Jarrett Lilien, the company's president and chief operating officer and a member of the Board of Directors, will be departing. The company said Mr. Lilien will be leaving the company by May 16, 2008. RTT News reports that the company said that it does not plan to fill the role vacated by Mr. Lilien, but the retail management team will assume more responsibilities after his departure. The company did not provide other details. Mr. Lilien joined E*Trade in August 1999, and led the company's retail business since 2003. Prior to his election as president and COO in March 2003, Mr. Lilien served as chief brokerage officer and president, E*TRADE Securities LLC. About E*TRADE Financial Based in New York City, E*Trade Financial Corporation (NasdaqGS: ETFC) -- http://us.etrade.com/-- provides financial services including trading, investing, banking and lending for retail and institutional customers. Securities products and services are offered by E*Trade Securities LLC. Bank and lending products and services are offered by E*Trade Bank, a Federal savings bank, or its subsidiaries. * * * As reported in the Troubled Company Reporter on Dec. 4, 2007, Moody's Investors Service lowered E*Trade Financial Corporation's long-term senior debt rating to Ba3 from Ba2. The outlook for the long-term rating is negative. FEDERAL-MOGUL: Court OKs Section 524 Transfer of Insurance Rights ----------------------------------------------------------------- Federal-Mogul Corporation and its debtor-affiliates receive coverage from insurance policies for asbestos-related liabilities and obligations. The Reorganized Debtors' Fourth Amended Joint Plan of Reorganization provides for, among other things, the assignment of certain of the Debtors' rights in the Asbestos Insurance Policies to a trust pursuant to Section 524(g) of the Bankruptcy Code. The insurance companies that issued the Asbestos Insurance Policies and their successors vehemently opposed the assignment of the Asbestos Insurance Policies to the Asbestos Personal Injury Trust and lodged objections to the Plan. The Objecting Insurers include Ace Property & Casualty Insurance Co., AIG Casualty Co., Allianze Global Corporate & Specialty AG, Firstman's Fund Insurance Co., and Hartford Accident and Indemnity Co. To resolve the Plan Objections, the Reorganized Debtors and the other Plan Proponents, on one hand, and the Objecting Insurers, on the other hand, stipulated to bifurcate the Asbestos Insurance Assignment and Preemption Issue from the plan confirmation process. On Nov. 8, 2007, the U.S. Bankruptcy Court for the District of Delaware approved the parties' stipulation, confirmed the Fourth Amended Plan, and deferred ruling on the Objecting Insurers' Plan Objections to the assignment of the Asbestos Insurance Policies to the Asbestos Trust. The U.S. District Court for the District of Delaware affirmed the Plan Confirmation Order on Nov. 13, 2007. The question before the Bankruptcy Court, regarding the Assignment and Preemption Issue, is whether under the Bankruptcy Code, the assignment of the Asbestos Insurance Policies to a Section 524(g) trust is valid and enforceable as a matter of law, notwithstanding any anti-assignment or consent to assignment provisions incorporated in the Asbestos Insurance Policies and applicable state law. The Assignment and Preemption Issue includes the parties' dispute on whether any anti-assignment provision of the Asbestos Insurance Policies is violated under state law, given the insurance neutrality provisions in the Plan, which preserve the Objecting Insurers' right to argue state law in state courts. Judge Fitzgerald clarifies that the Bankruptcy Court is not addressing whether the provisions of the policies and applicable state law are violated but whether or not, in the Reorganized Debtors' case, they are preempted by the Bankruptcy Code. The Bankruptcy Court finds that the assignment of rights in certain of the Asbestos Insurance Policies to the Asbestos Trust, as provided in the Plan, is valid and enforceable under Sections 524(g), 541(c)(1), 1123(a)(5)(B) and 1129(a)(1) of the Bankruptcy Code. The anti-assignment provisions in the Policies and applicable state law are preempted, Judge Fitzgerald rules. "The Asbestos Insurance Policies are property of the Reorganized Debtors' estates by virtue of Section 541 and their transfer to the Asbestos Trust is permitted notwithstanding anti-assignment clauses in or incorporated in the policies or applicable state law by virtue of Sections 1123(a)(5) and 541(c)(1), as applicable." As held by the Court of Appeals for the Third Circuit, Section 541, simply put, prohibits restrictions on the interests of a debtor, which includes the insurance policies held by the debtor, Judge Fitzgerald relates. With respect to the debtor's property, Section 1123(a)(5)(B) expressly contemplates that the debtor's interests in insurance policies may be assigned to a trust or other entity. Furthermore, once an event occurs that gives rise to the insurers' liability under the policies, the policies themselves can be assigned. An anti-assignment clause does not preclude beneficiaries of life insurance policy from assigning policy proceeds after the event giving rise to liability; it applies only to assignments before liability, Judge Fitzgerald explains, citing in Re National Memorial Services v. Metropolitan Life Insurance Co., 49 A.2d 382 (Pa. 1946). Anti-assignment clauses protect insurers from an increase in the risk they agreed to insure but an assignment of loss does not expand the insurers' risk. In the Reorganized Debtors' case, to the extent that the events giving rise to liability have already occurred, there will be no additional risk to the Objecting Insurers by virtue of the insurance assignments. "Coverage issues, including, inter alia, proof that an event giving rise to liability occurred within the covered period before a specific policy can be accessed for coverage, are all preserved," Judge Fitzgerald emphasizes. The Objecting Insurers argued that in determining the scope of preemption under Section 1123(a)(5), there is a strong "presumption against preemption" and Section 1123(a)(5) cannot be interpreted to extend beyond the "limited" preemption afforded by Sections 363(l) and 1142(a). The Objecting Insurers asserted that Section 1123(a)(5) preempts applicable non-bankruptcy law only insofar as it relates to a debtor's financial condition. The Bankruptcy Court holds that the Objecting Insurers' premise does not change the primacy of the language of Section 1123(a)(5). The Objecting Insurers also argued that Section 363(l) is "the governing statute" and directly applicable to the assignment of contractual rights arising under non-executory contracts pursuant to a plan of reorganization. "Far from presenting a statutory framework, this argument takes the Bankruptcy Code out of its logical sequence," Judge Fitzgerald says. Section 541 defines what is property of the estate, Section 1123 delineates what a reorganization plan can provide, Section 1129 lays out the requirements for plan confirmation, and Section 363 is an administrative provision which gives a trustee authority to deal with a debtor's property notwithstanding certain ex post facto clauses based upon the debtor's insolvency or financial condition. "Not all anti-assignment provisions are based upon a debtor's insolvency or financial condition. Thus, to do as we are asked would re-write the statute and modify the meaning of Section 1123 in such a way that it becomes superfluous. This, we may not do," Judge Fitzgerald says. The Objecting Insurers provided no authority for their contention that Section 363(l) should be fashioned to limit the use made by the Fourth Amended Plan of Section 1123(a)(5), the Bankruptcy Court opines. In arguing for limiting the scope of preemption under Section 1123(a), the Objecting Insurers suggested that "[u]nder the Plan Proponents' theory of Section 1123(a)(5)(B), a bankrupt debtor with no use for a particular insurance policy because it has no liabilities could sell its policy to any third party, including a party with liabilities but no insurance." The Objecting Insurers' argument ignores the context of the contested assignment, Judge Fitzgerald opines. Section 524(g), she clarifies, creates a new form of entity -- a trust to which asbestos liabilities are channeled and which addresses and pays those liabilities. "A Section 524(g) trust is not a state law trust and likewise is not a creation of private agreement," Judge Fitzgerald notes. "Rather, a Section 524(g) trust is one whose existence is authorized and whose contours are delineated by the Bankruptcy Code. Such a trust is the successor to a debtor's asbestos liabilities that are channeled to that trust, and those liabilities may include insured asbestos liabilities, inasmuch as Section 524(g) clearly contemplates the transfer of insured liabilities to the trust." "Insurance policies covering asbestos liabilities are assets held by a debtor," the Bankruptcy Court opines. "Just as insured asbestos liabilities may be transferred to the trust, so may the corresponding assets, the insurance policies, proceeds, or policy rights, as applicable in any given reorganization plan, that stand to cover those liabilities. In this context, the logic of the Bankruptcy Code, in Section 1123(a)(5)(B), which permits transfers of property of the estate from a debtor to the successor vehicle to the debtor, is unassailable." The Objecting Insurers also argued that because the language of Section 1123(a)(5) does not specifically refer to contracts, and other provisions of the Bankruptcy Code do, Section 1123(a)(5) cannot preempt private contact rights. The express language of Section 541(c)(1) prohibits a contractual restriction on a debtor's rights to transfer or assign its interests in bankruptcy, Judge Fitzgerald points out. Furthermore, Section 1123(a)(5) permits the transfer of the debtor's property to a Section 524(g) trust. Thus, Section 1123(a)(5) provides for the adequate implementation of the Fourth Amended Plan, the Bankruptcy Court acknowledges. The Objecting Insurers further argued that the Asbestos Insurance Policies are executory, and therefore fall under the restrictions on assignment contained in Section 365 of the Bankruptcy Code. Insurance policies where the policy coverage period has expired prior to the insured's bankruptcy are not executory contracts despite a debtor's ongoing obligations, Judge Fitzgerald clarifies. Even though the terms and conditions of an insurance policy may still be in effect for the periods covered by the policy, the executory period for a contract ends when the last effective date of the policy has passed. All the policy periods under the Asbestos Insurance Policies have expired, she notes. In addition, all premiums under the Asbestos Insurance Policies were paid prior to the Petition Date. The Bankruptcy Court notes that the Countryman definition of executory contracts adopted by the Court of Appeals for the Third Circuit defines an executory contract as "a contract under which the obligation of both the bankrupt [party] and the other party to the contact are so far unperformed that the failure of either to complete performance would constitute a material breach excusing performance of the other." Where one of the parties to the insurance policy has fulfilled the central agreement to the contract, like the obligation of the insured to pay the premium in exchange for the insurer's defense and payment of indemnity claims against the insured, the contract is no longer executory. The payment of policy premiums under the Asbestos Insurance Policies prior to the Petition Date therefore constitutes substantial compliance with the Asbestos Insurance Policies and renders them non-executory in nature, the Bankruptcy Court holds. The Objecting Insurers contended that, even though the premiums have been paid, the Reorganized Debtors' ongoing obligations of cooperation, retrospective premiums, deductibles and notice make the policies executory. Those ministerial obligations do not transform an otherwise non-executory insurance policy into an executory contract, Judge Fitzgerald maintains. "The insurance policies are not executory contracts despite the debtor's duties with respect to retroactive premiums and the cooperation clause. Failure of cooperation with respect to a claim establishes only that an insurer may have a defense to payment of that claim and does not affect an insurer's obligation regarding other claims." Denying executory status to the Asbestos Insurance Policies will not impact the rights or remedies of the Objecting Insurers, Judge Fitzgerald maintains. "The Asbestos Insurance Policies are non-executory contracts and do not fall under Section 365." Accordingly, the Bankruptcy Court rules that the assignment of rights in the Asbestos Insurance Policies to the Asbestos Trust as provided in the Fourth Amended Plan is valid and enforceable pursuant to Sections 524(g), 541(c)(1), 1123(a)(5)(B) and §1129(a)(1) of the Bankruptcy Code, notwithstanding anti- assignment provisions incorporated in the Policies and applicable state law. All of the Objecting Insurers Plan Objections relating to the Assignment and Preemption Issue are deemed overruled. Peter Van N. Lockwood, an attorney for the asbestos plaintiffs, told the Associated Press said the face amount of the Asbestos Insurance Policies at stake in the Assignment and Preemption Issue is more than $500,000,000. Judge Fitzgerald's ruling, the AP comments, preserves a favored strategy for corporations troubled by massive asbestos tort liabilities that permits the companies to channel asbestos damage claims into trusts funded by their insurance policies. In addition to its insurance policies, Reorganized Federal-Mogul put half its equity in the Asbestos Trust. Billionaire investor Carl Icahn, who swapped a big stake in the company's debt for 25% of the post-bankruptcy Federal-Mogul, paid $900,000,000 for the equity in the Asbestos Trust, the AP notes. Mr. Icahn has a 75% equity stake in Reorganized Federal-Mogul. 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. FIRST NATIONWIDE: Fitch Affirms 'B' Rating on Cl. B-2 Certificates ------------------------------------------------------------------ Fitch Ratings has affirmed these First Nationwide Mortgage Corp. residential mortgage pass-through certificates: Series 2000-2 Group 1 -- Class 1-B1 at 'AAA'; -- Class 1-B2 at 'AAA'; -- Class 1-B3 at 'AA'; -- Class 1-B4 at 'BBB'; -- Class 1-B5 at 'BB'. Series 2001-1 TOTAL -- Class M-1 at 'AAA'; -- Class M-2 at 'AAA'; -- Class B-1 at 'BBB+'; -- Class B-2 at 'B'. The affirmations reflect a satisfactory relationship between credit enhancement and future loss expectations and affect approximately $5.8 million of outstanding certificates. The collateral in the aforementioned transactions consists of fixed-rate and adjustable-rate mortgages extended to prime borrowers and are secured by first and second liens, primarily on one- to four-family and multifamily properties. As of February 2008, the transactions are seasoned 82 months (2001-1) and 89 months (2000-2 Group 1), and the pool factors are 3% and 1% for series 2001-1 and series 2000-2 Group 1, respectively. FORD MOTOR: Selling Jaguar & Land Rover to Tata Motors for $2.3BB ----------------------------------------------------------------- Ford Motor Company has entered into a definitive agreement to sell its Jaguar and Land Rover operations to Tata Motors for $2.3 billion. The transaction is the culmination of Ford's decision last August to explore strategic options for the Jaguar and Land Rover businesses, as the company accelerates its focus on its core Ford brand and "One Ford" global transformation. The sale is expected to close by the end of the next quarter and is subject to customary closing conditions, including receipt of applicable regulatory approvals. The total amount to be paid in cash by Tata Motors for Jaguar and Land Rover upon closing will be approximately $2.3 billion. At closing, Ford will then contribute up to $600 million to the Jaguar and Land Rover pension plans. Bloomberg News reports that Ford is selling its luxury brands to Tata for half the price. Bloomberg says Ford acquired Jaguar and Land Rover in separate transactions for more than $2 billion each. "Jaguar and Land Rover are terrific brands," Alan Mulally, president and CEO, Ford Motor Company, said. "We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all." "This is a good agreement. It provides the Jaguar Land Rover management team and employees with the assurances needed to maintain their focus on delivering the best results for the business," Lewis Booth, executive vice president, Ford Motor Company, who has responsibility for Ford Europe, Volvo, Jaguar Land Rover, said. "I am confident that, under its new owner, Jaguar Land Rover will continue to build upon the significant improvements and product successes it has achieved in recent years." As part of the transaction, Ford will continue to supply Jaguar and Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services. In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months. The parties believe these arrangements will support Jaguar and Land Rover's current product plans, while providing Jaguar and Land Rover freedom to develop its own stand-alone capabilities in the future that will best serve its premium manufacturer requirements. The parties do not anticipate any significant changes to Jaguar and Land Rover employees' terms of employment on completion. "We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business," Mr. Ratan N. Tata, Chairman of Tata Sons and Tata Motors, commented. "We have enormous respect for the two brands and will endeavor to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business." Jaguar and Land Rover's employees, trade unions and the UK Government have been kept informed of developments as the sale process progressed and have indicated their support for the agreement. "Jaguar Land Rover's management team is very pleased that Ford and Tata Motors have come to an agreement," speaking on behalf of Jaguar and Land Rover, Geoff Polites, chief executive officer, said. "Our team has been consulted extensively on the deal content and feels confident that it provides for the business needs of both our brands going forward. "We have also had the opportunity to meet senior executives from Tata Motors and the Tata group," Mr. Polites continued. "They have expressed confidence in the team that has delivered significant improvements in Jaguar Land Rover's business performance. We feel confident that we can forge a strong working relationship with our new parent company, and we look forward to a bright and successful future for Jaguar Land Rover." About Tata Motors India's largest automobile company, Tata Motors Limited -- http://www.tatamotors.com/-- is mainly engaged in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the company. The Company's operating segments consists of Automotive and Others. In addition to its automotive products, it offers construction equipment, engineering solutions and software operations. Tata Motors has operations in Russia and the United Kingdom. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. GENERAL MOTORS: May Close Ohio Brake Part Plant Due to Axle Strike ------------------------------------------------------------------ The month-long work protest of union members at American Axle and Manufacturing Holdings Corp. is taking its toll on General Motors Corp., threatening the automaker's brake part plant in Lordstown, Ohio, which has 2,400 workers, Alex Ortolani and Jeff Grenn of Bloomberg News report. Bloomberg News cited United Auto Workers Local 1112 union president Jim Graham saying that GM is likely to shutter its first car assembly factory by April 4, 2008, ceasing the production of the Chevrolet Cobalt. Bloomberg sources say that as of Feb. 1, 2008, GM had a 49-day Cobalt reserve, which isn't large because a 60-day supply is the norm. As reported in the Troubled Company Reporter on March 13, 2008, GM president and chief operating officer Frederick A. Henderson said that although many of its assembly plants have been partially or fully shut down by the strike of United Auto Workers union members at Axle, GM won't interfere with the parties' labor dispute. Mr. Henderson added that GM were not losing sales because of the strike, which started on Feb. 26, 2008, following expiration of a four-year master labor agreement. However, he said, if GM was struggling because of the union protest, the company would be one of those sitting on the negotiation table. As previously reported in the TCR, GM has about 29 facilities affected by the strike as the supplier attempts to negotiate with the union. GM spokeswoman Sherrie Childers Arb said GM won't comment on further factory closings, Bloomberg relates. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on March 26, 2008, Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/B-3) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four-year master labor agreement with American Axle. Although S&P still expects American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. To resolve the CreditWatch listings, S&P's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. As reported in the Troubled Company Reporter on Feb. 28, 2008, Fitch Ratings has affirmed the Issuer Default Rating of General Motors at 'B', with a Rating Outlook Negative. As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. GRAIN DEALERS: A.M. Best Lifts FS Rating to B+(Good) from B(Fair) ----------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating to B+(Good) from B(Fair) and has assigned an issuer credit rating of "bbb-" to Grain Dealers Mutual Insurance Company. The outlook for the FSR has been revised to stable from positive, and the outlook assigned to the ICR is stable. These rating actions reflect Grain Dealers' strong and significantly improved risk-adjusted capitalization, management's actions designed to reduce exposures to natural catastrophe events and the company's improving risk management's initiatives. Offsetting these positive rating factors are Grain Dealers' historically weak operating results, elevated underwriting leverage, exposure to natural catastrophes and uncompetitive expense structure. Following years of volatile earnings due to natural catastrophes and several one-time expenses, all reflective of a lack of adequate risk management procedures in the past, management restructured Grain Dealers' catastrophe reinsurance program to include significantly higher levels of protection and pulled back from hurricane-exposed coastal regions. In addition, an improved level of risk management procedures has been implemented. As a result, it is expected that earnings volatility will be reduced going forward. Grain Dealers is a multiple line carrier providing coverage primarily in the Southeast and Midwest with a premium-based business mix of roughly 65% commercial and 35% personal lines. The company's production emphasis in recent years has continued to be small to mid-sized commercial business. GRAND CIRCLE: S&P Puts 'B' Corporate Rating on High Debt Leverage ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Grand Circle Holdings LLC. The rating outlook is stable. At the same time, Standard & Poor's assigned its issue-level and recovery ratings to the company's planned $170 million senior secured second-lien term loan due 2014. The issue-level rating is 'BB-' (two notches higher than the 'B' corporate credit rating) with a recovery rating of '1', indicating that lenders can expect very high (90% to 100%) recovery in the event of a payment default. Subsidiary Grand Circle River Cruise Lines LLC will be the borrower of $145 million under the loan, and GC Cayman Holdings Ltd. will be the borrower of the remaining $25 million. In addition to the second-lien term loan, the company plans to issue a $170 million senior secured first-lien credit facility (unrated), which consists of a $30 million revolver and a $140 million first-lien term loan due in 2014, as well as $150 million of junior subordinated notes due 2015. Proceeds will be used to finance Court Square Capital Partners' purchase of a portion of the company (about 62%) from current owner Alan Lewis and his related interests. "The 'B' corporate credit rating on Grand Circle reflects the company's high debt leverage as a result of the pending transaction, and a low EBITDA margin when compared with that of most other rated leisure industry businesses," noted Standard & Poor's credit analyst Liz Fairbanks. "The rating also reflects weak economic conditions, the transition to a new management team, and a capital structure that includes a meaningful level of accreting preferred equity." S&P views the accreting preferred equity as temporary capital that will need to be refinanced in the next few years. Grand Circle has issued $85 million of senior preferred equity, which accretes at 12.5% per year, and $200 million of junior preferred equity, which accretes at 10% per year. S&P expects that the rapid level of accretion creates incentives for the owners to seek opportunities to realize a return on its preferred investment (possibly through a recapitalization) by which a portion of the preferred will be refinanced as debt. The previously mentioned rating factors are partially tempered by Grand Circle's good reputation and brand name, as well as its niche market position and global infrastructure, which serves as a barrier to entry and enhances the company's ability to service its customers. In addition, the company has experienced relatively good visibility and historical growth in revenues and EBITDA as a result of focusing on a customer segment with favorable demographics, and by expanding its higher margin products, such as travel insurance. GREEKTOWN HOLDINGS: S&P Chips Rating to 'B-' on Liquidity Concerns ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Greektown Holdings LLC; the corporate credit rating was lowered to 'B-' from 'B'. The ratings remain on CreditWatch, where they were placed March 6, 2008 with negative implications. "The downgrade reflects our ongoing concerns about the company's near-term liquidity position given increased operating pressures in the market and the need for additional financing to complete its ongoing expansion," said Standard & Poor's credit analyst Melissa Long. According to data released by the Michigan Gaming Control Board, Greektown's gaming revenues were down 3% year over year for the three months ended Dec. 31, 2007, and down about 5% year over year for the first two months of 2008. The company may still complete the sale of an ownership stake in Greektown Casino LLC. (Greektown Holdings is the parent company of Greektown Casino LLC.) While a sale of equity in the casino will bolster Greektown's liquidity position, proceeds from the sale and other borrowing sources will not be sufficient to fund capital expenditures in 2008. The company will need to generate substantial levels of cash from operating activities to complete the expansion. S&P is concerned about Greektown's operating prospects over the near term given a weak economy and increased competition (in particular from the opening of the new MGM Grand Detroit in October 2007). In resolving the CreditWatch listing, S&P will continue to monitor Greektown's progress in completing a sale of part of the company. Should the company be successful in completing a sale, S&P would expect that a more permanent fix to the capital structure will be implemented, and S&P will assess the terms, as well as monthly operating trends at the property. Failure to complete a sale of equity that meaningfully bolsters Greektown's liquidity position and demonstrate improvement in monthly operating performance will likely result in a further lowering of the rating. GREENWOOD RACING: S&P Changes Outlook to Positive; Holds B+ Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Greenwood Racing Inc. to positive from stable. Ratings on the company, including the 'B+' corporate credit rating, were affirmed. "The outlook revision reflects Greenwood's solid first year of operations and good momentum in recent months despite a slowing economy," said Standard & Poor's credit analyst Michael Listner. Greenwood's primary asset is the Philadelphia Park Casino and Racetrack located in Bensalem, Pennsylvania. The facility is 20 minutes north of Philadelphia, at the southern tip of Bucks County. Philadelphia Park is well situated to capture the expansive gaming market in the northern part of Philadelphia County and much of Bucks County. The Pennsylvania Turnpike, I-95, and Route 1 all lie within close proximity to the racino, providing accessibility to Pennsylvania residents living west of Bensalem, as well as New Jersey residents to the east. The size and depth of the Philadelphia gaming market has served to temper the start-up risks associated with the company's introduction to slot operations and has contributed to a 30% increase in the number of slot machines on the premises since opening. With a total of 2,703 slot machines and minimal excess operational capacity, Greenwood received approval from the Pennsylvania Gaming Control Board to begin the construction of a 260,000-square-foot standalone gaming facility that will accommodate 4,000 slot machines, bars, restaurants, a food court, and a multipurpose entertainment room at its current location. The new casino is expected to open to the public in December 2009, at a cost of at least $250 million. While details regarding the financing for the expansion project have not yet been finalized, S&P expects, based on current operating trends, that Greenwood will fund a significant portion of this expansion with internally generated cash, along with surplus cash on hand. S&P expects credit measures to remain somewhat good for the existing rating during the construction period. According to the PGCB, Greenwood generated approximately $285 million in net gaming revenue (wagers net of payouts) during 2007. As a private company, Greenwood does not publicly release its financial results. HARMONY ENTERPRISES: Case Summary & 7 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Harmony Enterprises, Inc. 4121 North Brady Street Davenport, IA 52806 Bankruptcy Case No.: 08-01058 Chapter 11 Petition Date: March 25, 2008 Court: Southern District of Iowa (Davenport) Judge: Lee M. Jackwig Debtor's Counsel: David A. Millage, Esq. (dmillage@gmglawfirm.com) Gallagher Millage & Gallagher, PLC 4301 East 53rd Street, Suite 300 Davenport, IA 52807 Tel: (563) 388-8417 Fax: (563) 388-9240 http://www.gmglawfirm.com/ Total Assets: $499,050 Total Debts: $1,412,647 Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Diane G. Haugen Trust Trade Debt $730,854 5200 Villa Drive, Suite 24 Davenport, IA 52806 Tel: (563) 323-2128 Kenneth W. Haugen $96,000 5200 Villa Drive, Suite 24 Davenport, IA 52806 Steve & Deedra Liebold Trade Debt $90,547 1812 North Pine Davenport, IA 52804 Tel: (563) 322-8841 Karpet Professional Quad Trade Debt $38,453 Cities Lawns Unlimited of Iowa, Inc. Trade Debt $38,000 Bills Heating & Air Trade Debt $26,000 Gallagher, Millage & $9,247 Gallagher, P.L.C. HARVEY ELECTRONICS: Court OKs Interim Financing & Store Closings ---------------------------------------------------------------- Harvey Electronics Inc. received a renewal of its interim financing order from the United States Bankruptcy Court for the Southern District of New York. The Court also granted the company permission to conduct store-closing sales at five of its seven locations. YA Global Investments L.P., the secured lender, will continue providing funds for up to eight weeks from a $1.5 million Debtor-in-Possession line of credit established at the time of the company's Chapter 11 bankruptcy filing in December 2007. Michael Recca, interim chief executive officer and chief restructuring officer, said Harvey will close stores in Paramus and Bridgewater, New Jersey; Greenvale and Mt. Kisco, New York; and Greenwich, Connecticut, over the next several weeks. "This court order allows us to move towards the conclusion of our restructuring efforts," Mr. Recca said. "We will continue to operate two Manhattan stores, inside the ABC Carpet & Home store, 888 Broadway at 19th Street, and our Bang & Olufsen store, 927 Broadway at 21st Street." "These stores are very important to redefining our business model, maintaining consumer awareness and completing existing customer orders," Mr. Recca said. "As we continue to restructure our operations to exclusively focus on the custom integration of in- home technologies, Harvey is exploring additional store-within-a- store locations in the New York metro area." About Harvey Electronics Based in New York City, Harvey Electronics Inc. -- http://www.harveyonline.com/-- retails, services and custom installs audio, video and home theater equipment. The equipment includes high-fidelity components and systems, digital versatile disc players, digital video recorders, high definition television, plasma flat screen and liquid crystal display flat-panel television sets, integrated remote controls, media servers, audio/video furniture, conventional telephones, moving picture experts group layer-3 audio players, iPods, satellite and analog radios, service contracts and related accessories. It operates nine locations comprising eight Harvey specialty retail stores and one separate Bang & Olufsen branded store. It also retails brands manufactured by Bang & Olufsen, Crestron, Marantz, McIntosh, NAD, Vienna Acoustics, Sonus Faber, Krell, Boston Acoustics, Martin Logan and Fujitsu. The company filed for chapter 11 protection on Dec. 28, 2007 (Bankr. S.D.N.Y. Case No. 07-14051). Harold S. Berzow, Esq., and Jeffrey A. Wurst, Esq., at Ruskin, Moscou, Faltischek PC, represents the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the case. When the Debtor filed for bankruptcy, it listed total assets of $9,930,468 and total debts of $10,368,513. HEALTH CHEM: June 30 Balance Sheet Upside-Down by $16,434,000 ------------------------------------------------------------- Health Chem Corp.'s consolidated balance sheet at June 30, 2007, showed $5,537,000 in total assets, $21,968,000 in total liabilities, and $3,000 in minority interest, resulting in a $16,434,000 total stockholders' deficit. At June 30, 2007, the company's consolidated balance sheet also showed strained liquidity with $4,059,000 in total current assets available to pay $19,836,000 in total current liabilities. The company reported net income of $587,000 for the second quarter ended June 30, 2007, compared with a net loss of $409,000 in the same period of 2006. For the three months ended June 30, 2007, net sales were $1,105,000 consisting solely of transdermal nitroglycerin patches. For the three months ended June 30, 2006, net sales were $1,300,000, comprised solely of net sales of transdermal nitroglycerin patches. Net sales of transdermal nitroglycerin patches decreased by 15% during the 2007 period. This decrease is due primarily to a lower average net selling price. Other income for the three months ended June 30, 2007, was $2,267,000, versus none in 2006. Gross profit decreased by $731,000, or 260%, to a gross loss of $450,000 for the three months ended June 30, 2007, as compared to a gross profit of $281,000 for the same period in 2006. Gross profit as a percent of sales decreased from 22% during the three months ended June 30, 2006, to a negative 41% during the same period in 2007. Selling, general and administrative expenses increased by $564,000 for the three months ended June 30, 2007, as compared to the corresponding period in 2006. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2007, are available for free at http://researcharchives.com/t/s?2992 Going Concern Doubt As reported in the Troubled Company Reporter on April 24, 2007, Demetrius & Company LLC, in Wayne, N.J., expressed substantial doubt about Health Chem Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's defaulting on payments to its bondholders and licensors, and working capital deficiencies. The company has been able to continue to operate over the last several years because it has not made any payments under the debentures since 1999 and because it did not make any royalties under the Key License since its inception in March 2000 until May 2007. About Health Chem Headquartered in Emigsville, Pa., Health Chem Corp. (Other OTC: HCLC.PK) -- http://www.healthchem.com/ -- develops, manufactures and markets transdermal drug delivery systems and undertakes research and development activities for third parties on a contract basis. Currently, the company's sole product is a prescription transdermal patch which delivers nitroglycerin for use in the relief of the vascular and cardiovascular symptoms related to angina pectoris (chest pain). Health Chem conducts a majority of its business through its 90%- owned subsidiary, Transderm Laboratories Corporation, which conducts its business primarily through Hercon Laboratories Corporation, Transderm's 98.5% owned subsidiary. HEALTHY DIRECTIONS: Moody's Withdraws Ratings on Business Reasons ----------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Healthy Directions, LLC. Moody's has withdrawn the company's ratings for business reasons. These ratings are withdrawn: -- Corporate family rating at B1; -- Probability of default rating at B2; -- Senior secured bank credit facility at B1 (LGD3, 30%). Healthy Directions, LLC, based in Potomac, Maryland, is a leading direct marketer of branded nutritional supplements and health education newsletters. Revenue for the twelve months ending September 2007 was $190 million. HOLLINGER INC: Inks Settlement Agreement with Sun-Times Media ------------------------------------------------------------- Hollinger Inc. entered into a settlement agreement with Sun-Times Media Group Inc. Hollinger holds roughly 70% voting interest and 19.7% equity interest in Sun-Times. In order to become effective, the Settlement Agreement must be approved by orders issued by the Ontario Superior Court of Justice and the United States Bankruptcy Court for the District of Delaware. Hollinger and its subsidiaries, Sugra Ltd. and 4322525 Canada Inc. are subject to proceedings in Canada under the Companies' Creditors Arrangement Act and in the United States under Chapter 15 of the U.S. Bankruptcy Code. The Settlement Agreement forms part of an Amended Plan Term Sheet expected to be filed by the Applicants with the Ontario Court on March 26, 2008 for relief it is seeking in connection with its CCAA proceeding, which is anticipated to be heard by the Ontario Court on April 22-23, 2008. The Settlement Agreement provides for the resolution of all outstanding matters between the Applicants and Sun-Times and would form the basis for a plan of arrangement that may be prepared by the Applicants within the CCAA proceedings. All creditors of the Applicants will have an opportunity to vote on any CCAA Plan that may be presented once the claims of creditors are received and determined in accordance with a claims process that the Applicants are requesting be commenced immediately upon Court Approval. If a CCAA Plan is prepared by the Applicants and approved by the Applicants' creditors, further approval of the Ontario Court and the Delaware Court will be sought and the CCAA Plan will be implemented soon as possible after approvals. The settlement between Sun-Times and the Applicants is not conditional upon Plan Implementation. The principal terms of the proposed Settlement Agreement as it relates to the settlement of outstanding issues between Sun-Times and the Applicants. Obtaining Value for Hollinger's Voting Control Hollinger owns, directly or indirectly, a total of 782,923 Class A Common Stock of Sun-Times and 14,990,000 Class B Common Stock of Sun-Times. Through the multiple-voting nature of the Class B Shares, the Applicants have voting control over Sun-Times. Upon Court Approval, the Ontario Court shall authorize and direct the Applicants, Sun-Times and any other party to take the steps necessary to convert all of these Class B Shares into Class A Shares on a one-for-one basis. Subject to the CCAA Plan being accepted by the requisite majorities of the Applicants' creditors, upon Plan Implementation, Sun-Times will issue and deliver to Hollinger an additional 1,499,000 Class A Shares, providing Hollinger with a total of 16,489,000 Class A Shares for the converted Class B Shares, a conversion rate of 1.1:1. If the CCAA Plan is rejected, Hollinger will receive only the 14,990,000 Class A Shares received upon conversion of its Class B Shares, representing a 1:1 conversion. Whether Hollinger receives 14,990,000 or 16,489,000 Class A Shares, its voting control over Sun-Times will be eliminated. Resolution of All Claims and Litigation between Hollinger and Sun- Times Hollinger will release Sun-Times, and Sun-Times will release Hollinger, from all debts, claims and litigation between the parties, save and except for specific amounts claimed by Sun-Times against Hollinger in respect of (i) a promissory note executed by 4322525 Canada Inc. in favor of Sun-Times in the amount of $40.5 million; (ii) present and future claims by Sun-Times against Hollinger for contribution and indemnity which are now capped at $28.6 million; and (iii) a claim in respect of an aircraft lease settlement entered into by the parties in the amount of CDN$1.3 million. The Sun-Times Allowed Claims will be accepted by the Applicants as valid claims in the aggregate amount of approximately $70 million. Only the Sun-Times Allowed Claims will be allowed to be filed as unsecured claims by Sun-Times against the Applicants in its court- supervised claims process and recoveries by Sun-Times from the Sun-Times Allowed Claims will be limited to $15 million. However, under the Settlement Agreement, upon Sun-Times receiving $7.5 million in distributions in respect of the Sun-Times Allowed Claims, 50% of all subsequent distributions shall be made available by Sun-Times to the Applicants to use, subject to further approval by the Ontario Court at that time, in the pursuit of certain litigation claims held by the Applicants. In addition, any distributions that would otherwise be received by Sun-Times in respect of the Sun-Times Allowed Claims in excess of $15 million will be assigned to the Applicants for the benefit of the Applicants' other unsecured creditors. Pursuant to a stipulation and agreement of settlement of U.S. and Canadian class actions against Sun-Times and Hollinger and an insurance settlement agreement dated June 27, 2007, up to $24.5 million plus interest, less fees and expenses, will be paid to Hollinger or Sun-Times, and potential other claimants under their directors' and officers' insurance policies. Under the Settlement Agreement, Hollinger and Sun-Times will cooperate to maximize the recoverable portion of the Insurance Settlement Proceeds payable to them and have agreed that Sun-Times will receive 80% and Hollinger will receive 20% of the amounts to be received by Hollinger and Sun-Times from such proceeds. In respect of the amount payable to each of Hollinger and Sun- Times under the proceedings in Ontario against The Ravelston Corporation Limited and certain of its affiliates under the CCAA and Bankruptcy and Insolvency Act, the Settlement Agreement provides that each of Hollinger and Sun-Times will share equally in any proceeds or recoveries from that estate. Corporate Governance of Sun-Times Effective upon Court Approval, William Aziz, Brent Baird, Albrecht Bellstedt, Peter Dey, Edward Hannah and Wesley Voorheis will submit their resignations from the Sun-Times' board of directors. Sun-Times has agreed to continue its current examination of all strategic alternatives for improving stockholder value, as disclosed by Sun-Times on Feb. 4, 2008. Sun-Times' board of directors has passed the necessary resolutions to ensure that the Settlement Agreement, the CCAA Plan and the implementation of the Settlement Agreement and the CCAA Plan will not cause any rights granted under Sun-Times' current rights plan to become exercisable, will not cause any person to become an "Acquiring Person" under such rights plan and will not otherwise trigger the application of such rights plan. Litigation Assets At the same time that Court Approval is sought, the Applicants will be seeking the appointment of retired Ontario justice, the Honourable John D. Ground, as an officer of the Ontario Court to perform the role of litigation trustee of all of the litigation assets of the Applicants on such terms as may be agreed between the Litigation Trustee and the Applicants, and subject to approval by the Ontario Court. The Litigation Trustee will supervise, control and administer the Litigation Assets in consultation with the Applicants and subject to monitoring by Ernst & Young LLP, the Monitor and supervision by the Ontario Court. Hollinger Corporate Governance Pursuant to the Term Sheet and subject to Court Approval of the Settlement Agreement being obtained, Hollinger intends to reduce the size of its board of directors or, if possible, to eliminate it. Also upon Court Approval, G. Wesley Voorheis, chief executive officer of Hollinger, will resign as an officer and director of the Applicants and any subsidiaries. The Litigation Trustee may retain the services of Mr. Voorheis or an entity controlled by him to provide assistance or advice in respect of the Litigation Assets. At that time William Aziz, Hollinger's chief financial officer, or an entity controlled by him, will be appointed as chief restructuring officer of Hollinger and an officer of the Ontario Court in consideration of a monthly salary of $65,000. This engagement will be on a month-to-month basis and may be terminated by Mr. Aziz upon 30 days' prior written notice. Payment of a Portion of Sun-Times Costs and Fees Under the Settlement Agreement, upon Court Approval, Hollinger will pay to Sun-Times the reasonable fees and costs of Sun-Times incurred in respect of the CCAA proceedings from Aug. 1, 2007, up to and including the Court Approval date, up to a maximum of $1 million. About Sun-Times Media Group Headquartered in Chicago, Sun-Times Media Group Inc. (NYSE: SVN) - - http://www.thesuntimesgroup.com/-- is dedicated to being the premier source of local news and information for the greater Chicago area. Its media properties include the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities throughout the Chicago area. About Hollinger Inc. Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a media company with assets which include the Chicago Sun-Times newspaper and Suntimes.com and a number of community newspapers and websites serving communities in the Chicago area. The company, along with two affiliates, 4322525 Canada Inc. and Sugra Limited, filed separate Chapter 15 petitions on Aug. 1, 2007 (Bankr. D. Del. Case Nos. 07-11029 through 07-11031). Hollinger also initiated Court-supervised restructuring under the Companies' Creditors Arrangement Act (Canada) on the same day. Derek C. Abbott, Esq., and Kelly M. Dawson, Esq., at Morris, Nichols, Arsht & Tunnell LLP, represents the Debtors in their U.S. proceedings. As reported in the Troubled Company Reporter on Feb. 22, 2008, Hollinger Inc.'s consolidated balance sheet at Dec. 31, 2007, showed CDN$79.8 million in total assets and CDN$219.3 million in total liabilities, resulting in a CDN$139.5 million total stockholders' deficit. HOLLINGER INC: US SEC Accepts Offer of Settlement and Consent ------------------------------------------------------------- Hollinger Inc. disclosed that the U.S. Securities and Exchange Commission has accepted an Offer of Settlement and Consent submitted by Hollinger. The Offer of Settlement and Consent have received the necessary approvals in connection with Hollinger's current proceedings in Canada under the Companies Creditors Arrangement Act and in the United States under Chapter 15 of the U.S. Bankruptcy Code. These approvals were obtained as a result of Ernst & Young LLP, the Monitor appointed in the CCAA Proceedings, consenting to a lifting of the existing stay of proceedings to allow Hollinger to complete the settlement. The Offer of Settlement and Consent relate to proceedings initiated by the SEC on Nov. 15, 2004, in the Illinois District Court against Conrad Black, David Radler and Hollinger. The SEC alleged that Hollinger had liability for breaches of U.S. federal securities laws during 1999 to 2002 relating to: (i) $16.55 million in payments Hollinger allegedly fraudulently received from Sun-Times Media Group Inc. in connection with non-compete agreements associated with certain sales transactions; (ii) Hollinger's failure to file its 2003 Form 20-F; and (iii) Hollinger falsifying or causing to be falsified its reports, books, records and accounts subject to U.S. federal securities laws and circumventing or failing to implement a system of internal accounting controls. Hollinger has consented to the entry of Final Judgment against it, without admitting or denying the facts contained in the SEC's complaint. The Final Judgment will provide, among other things, for the disgorgement of approximately $21.28 million, representing $16.55 in alleged non-competition payments received by Hollinger plus interest thereon, against which will be credited the same amount already paid to Sun-Times in satisfaction of the Delaware Court of Chancery judgment against Hollinger and Conrad Black in Hollinger International Inc. v. Black, et al. The Final Judgment will also permanently restrain and enjoin Hollinger from future violations of U.S. federal securities laws. Hollinger also has consented to the issuance of an Order by the SEC whereby Hollinger's registration under the U.S. federal securities laws of its Common Shares and Series II Preference Shares would be revoked. "This settlement represents one further step forward in Hollinger's efforts to resolve its outstanding regulatory and compliance issues, and allows Hollinger to continue to focus on its primary objective of maximizing the value of its assets for the benefit of all stakeholders," Hollinger's chief executive officer, G. Wesley Voorheis, stated. About Hollinger Inc. Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a media company with assets which include the Chicago Sun-Times newspaper and Suntimes.com and a number of community newspapers and websites serving communities in the Chicago area. The company, along with two affiliates, 4322525 Canada Inc. and Sugra Limited, filed separate Chapter 15 petitions on Aug. 1, 2007 (Bankr. D. Del. Case Nos. 07-11029 through 07-11031). Hollinger also initiated Court-supervised restructuring under the Companies' Creditors Arrangement Act (Canada) on the same day. Derek C. Abbott, Esq., and Kelly M. Dawson, Esq., at Morris, Nichols, Arsht & Tunnell LLP, represents the Debtors in their U.S. proceedings. As reported in the Troubled Company Reporter on Feb. 22, 2008, Hollinger Inc.'s consolidated balance sheet at Dec. 31, 2007, showed CDN$79.8 million in total assets and CDN$219.3 million in total liabilities, resulting in a CDN$139.5 million total stockholders' deficit. HOLLY ENERGY: Moody's Holds 'Ba3' Ratings on $180 Mil. Acquisition ------------------------------------------------------------------ Moody's affirms Holly Energy Partners L.P. Ba3 Corporate Family Rating, Ba3 Probability of Default Rating, B1 senior unsecured note rating (LGD 5; 81%), and SGL-3 Speculative Grade Liquidity Rating. Moody's rating outlook remains stable but the corporate family rating could move to negative, or could be pressured, if HEP does not reduce post-acquisition leverage this year and the note rating could be notched downward if HEP materially expands its secured borrowings. The ratings affirmation follows HEP's closing of its $180 million acquisition of the following assets from Holly Corporation: a 136 mile crude oil delivery system serving HOC's Navajo refinery in New Mexico; 10 miles of crude oil and refined product delivery pipelines at HOC's Wood Cross refinery in Salt Lake City, Utah; 600,000 barrels of on-site crude oil storage facilities at HOC's Navajo and Wood Cross refineries; a 725 mile crude oil gathering system in the Western Permian Basis of Texas; and a jet fuel transportation pipeline and terminal storage facility in Roswell, New Mexico. HEP estimates that the acquired assets will generate approximately $20 million in annual EBITDA. HEP funded the acquisition with $9 million in common units issued to HOC and $171 million borrowed under its current, upsized, $300 million revolving credit facility. To fix the rate on these borrowings, HEP executed a five year interest rate swap, with a notional amount of $171 million, at a fixed rate of 5.24% (3.74%, plus the applicable borrowing margin under HOC's revolving credit facility which is currently 1.5%). To retain its Corporate Family Rating, future acquisitions and development projects will need to be amply equity funded. It would also be important for HEP to not acquire possible greenfield pipeline projects from HOC until operational and firmly, adequately, cash flow positive. Also, with HEC's expanded $300 million secured revolver and over $180 million of total revolver borrowings, Moody's Loss Given Default debt notching model places HEP's B1 note rating on the borderline with B2. To preserve its B1 rating under the LGD model, HEP will need to constrain secured revolver borrowings. The ratings are supported by the comparative stability of HEP's expected cash flow (95% of revenue is generated on long-term contracts with HOC, Alon USA, Inc. (B2), and BP (Aa1); $105 million in minimum contracted revenues from HOC and Alon that partly mitigates HEP's exposure when those refiners conduct downtime for scheduled turnarounds and incur unscheduled downtimes; a degree of cash flow risk diversification across refined product export, crude oil supply, and terminalling markets; pipeline downtime; and acceptable financial leverage on cash flow pending reduction this year. The pipelines are vital to three adequately competitive refineries, owned by HOC and Alon, in moving refined product production to market and sourcing crude oil. The three refineries serve regionally growing markets. The ratings are restrained by HEP's high pro-forma balance sheet leverage, mitigated for now by HEP's acceptable but full pro-forma Debt EBITDA of 4.1x; the fact that HEP, as an MLP, will routinely payout virtually all free cash flow to unit holders leaving negligible cash flow for debt reduction; acquisition and funding risks associated with HEP's growth effort; reliance on HOC for 65% of its revenue; the risk of unscheduled refinery downtime at HOC or Alon; the risk of volume competition in the El Paso and Arizona markets from the Longhorn Pipeline; and the credit risk to HOC's and Alon's margins of possible increased volume competition from Longhorn. Effectively, HEP conducts most of the lower risk business functions of HOC and Alon (transporting relatively durable production volumes for a fee), leaving the highest risk refining activities and margin exposures with HOC and Alon. Absent force majeure or serious damage to the economic viability of either HOC's Navajo complex (85,000 barrels per day; 10.6 Nelson Complexity Index rating) or Alon's Big Spring refinery (65,000 barrels per day; 9 Nelson Complexity Index), HEP benefits from HOC's and Alon's minimum revenue and volume commitments. HEP's expected throughput and revenue is far less sensitive to volatile crack spreads and refining margins. Additional ratings strength is derived from HOC's very strong balance sheet and implicit credit support for its sponsored HEP and by HOC's and Alon's own refinery market diversification across the Southwest, lower Rocky Mountain, California, and northern Mexico. HEP's system is also positioned to carry product volumes produced by more distant third party refineries that would seek to distribute product into HEP's distribution markets should HOC and Alon falter. Further ratings restraints reside in the contract-out terms granted to HOC and Alon. With 12 months notice, HOC or Alon could abrogate its minimum revenue commitments under their shipper contracts if they decided to close the Navajo or Big Spring refinery, respectively. This is a significant out for HOC and Alon in the event of catastrophic events at their refineries or if an expansion of Longhorn Pipeline's throughput damaged HOC or Alon. However, these concerns are handled within the existing ratings as HEP and its shippers appear to have cost structures that make them adequately competitive. The rating outlook could be positively impacted by sharply reduced balance sheet leverage, significant, diversifying acquisitions that are amply equity funded, reducing leverage on EBITDA to 3.5x - 4.25x, and successful execution and integration of the company's major capital expenditure projects. HEP would also need to meet its timing and budget guidance on material projects within its capital budget. Also, the ratings faces further negative pressure if the company fails to consistently keep leverage below the 4.3x level post the HOC asset acquisition; or if funds from operations does not appear to be covering maintenance capex, interest, and distributions in excess of 100%; or a shift in management strategy away from the durable contract storage business to more speculative marketing activities. The SGL-3 liquidity rating indicates that over the next four quarters Moody's expects adequate liquidity coverage of interest expense and budgeted outlays. Its HOC large first quarter 2008 acquisition has already been funded with term borrowings. However, capital spending over the rest of 2008 would require substantial additional revolver borrowings absent another source of funding. As well, its Debt EBITDA covenant coverage will be significantly tighter than in the past. HEP reports that it does plan to offer common units in third quarter 2008. HEP is a public master limited partnership that operates an integrated system of refined petroleum product pipelines and distribution terminals. HEP was formed by the spin-off of its current asset base from unrated Holly Corporation, which owns 100% of HEP's 2% general partnership units and 43.8% of its common units. HEP's system spans West Texas, New Mexico, Utah, and Arizona. Holly Energy Partners, L.P. is headquartered in Dallas, Texas. HOOP HOLDINGS: Files for Chapter 11 Protection in Delaware ---------------------------------------------------------- Hoop Holdings, LLC, a subsidiary of The Children's Place Retail Stores, Inc., and its subsidiaries dba Disney Store North America, have voluntarily filed petitions under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The Canadian subsidiary expects to file under the Companies' Creditors Arrangement Act in Toronto, Canada. Hoop intends to pursue the transfer of a substantial portion of the DSNA business to an affiliate of The Walt Disney Company. Neither Hoop's parent company, The Children's Place Retail Stores, Inc., nor any of its parent company's other subsidiaries is commencing a Chapter 11 case. These filings follow an extensive review of various strategic alternatives for the DSNA business, which is run by Hoop pursuant to a license agreement with The Walt Disney Company. Hoop and its parent company have been engaged in advanced negotiations concerning the transfer of a substantial portion of the DSNA business to The Walt Disney Company. In connection with these negotiations, Hoop's Board of Directors has determined, with the limited strategic and financial options available under the license agreement that its only alternative was to file bankruptcy. Through these proceedings, Hoop expects to complete an orderly wind-down of its affairs. The transaction that is currently being negotiated is being pursued in order to maximize proceeds available to Hoop stakeholders. The transaction under negotiation is subject to the satisfaction of certain conditions, including approval of the U.S. Bankruptcy Court and the Canadian Court, and is targeted for completion by April 30, 2008. In order to assist in the financing of the wind-down of Hoop's affairs, and subject to court approval, Hoop has executed a debtors-in-possession credit facility with Wells Fargo Retail Financing, consisting of a $35 million revolving credit facility, including a sub-facility for letters of credit. Hoop has appointed a Chief Restructuring Officer, Perry M. Mandarino of Traxi, LLC, a firm that specializes in restructuring. Mr. Mandarino will work with Hoop's Board in guiding the business through the Chapter 11 process. Hoop Holdings, LLC and its subsidiaries design, contract to manufacture and sell merchandise under the licensed "Disney Store" brand name. As of March 24, 2008, Hoop owned 322 Disney Stores in North America. Headquartered in Secaucus, New Jersey, Hoop Holdings, LLC, a subsidiary of The Children's Place Retail Stores, Inc., and its subsidiaries dba Disney Store North America, owns and operates gift, novelty, and souvenir shops. HOOP HOLDINGS: Case Summary & 60 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Hoop Holdings, LLC 915 Secaucus Road Secaucus, NJ 07094 Bankruptcy Case No.: 08-10544 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Hoop Retail Stores, LLC 08-10545 Hoop Canada Holdings, Inc. 08-10546 Type of Business: The Debtor owns and operates gift, novelty, and souvenir shops. Chapter 11 Petition Date: March 26, 2008 Court: District of Delaware (Delaware) Debtor's Counsel: Daniel J. DeFranceschi, Esq. (defranceschi@rlf.com) Richards, Layton & Finger One Rodney Square, P.O. Box 551 Wilmington, DE 19899 Tel: (302) 651-7700 Fax: (302) 651-7701 http://www.rlf.com/ Entity Estimated Assets Estimated Debts ------ ---------------- --------------- Hoop Holdings, LLC Less than Less than $50,000 $50,000 Hoop Retail Stores, LLC $100 million to $100 million to $500 million $500 million Hoop Canada Holdings, Inc. Less than Less than $50,000 $50,000 A. Hoop Holdings, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Disney Enterprises, Inc. other unknown Attn: Stephen M. Finney, Senior VP & General Counsel 500 South Buena Vista Street Burbank, CA 91521-1030 The Walt Disney Co. other unknown Attn: James I. Kapenstein, Esq. 500 South Buena Vista Street Burbank, CA 91521-0599 Fax: (818) 562-1813 TDS Franchising, LLC other unknown Attn: The Walt Disney Co. 500 South Buena Vista Street Burbank, CA 91521-6916 Moore Wallace North America trade $655,104 1200 Lakeside Drive Bannonckburn, IL 60015 Lakeview Construction, Inc. trade $614,171 10505 Corp. Drive, Suite 200 Pleasant Prairie 53158 FedEx Corp. trade $330,879 P.O. Box 1140 Memphis, TN 38101-1140 Regency Enterprises trade $228,220 Fisher Development, Inc. trade $211,575 National Mallfront & Design trade $145,092 Jasco Industries, Inc. trade $132,706 Ultimate Services, Inc. trade $93,958 TEC Leaseholds, Ltd. trade $86,272 Scott Thomas Construction, trade $84,667 Inc. Big Apple Visual Group trade $76,298 Big Boing trade $66,450 Total Transportation Services trade $64,266 Harte Hanks Corp. trade $60,279 Gilin Distributing, Inc. trade $57,583 Bridge Metal Industries, LLC trade $54,808 ADT Security Services trade $52,306 B. Hoop Retail Stores, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Disney Enterprises, Inc. other unknown Attn: Stephen M. Finney, Senior VP & General Counsel 500 South Buena Vista Street Burbank, CA 91521-1030 The Walt Disney Co. other unknown Attn: James I. Kapenstein, Esq. 500 South Buena Vista Street Burbank, CA 91521-0599 Fax: (818) 562-1813 TDS Franchising, LLC other unknown Attn: The Walt Disney Co. 500 South Buena Vista Street Burbank, CA 91521-6916 Moore Wallace North America trade $655,104 1200 Lakeside Drive Bannonckburn, IL 60015 Lakeview Construction, Inc. trade $614,171 10505 Corp. Drive, Suite 200 Pleasant Prairie 53158 FedEx Corp. trade $330,879 P.O. Box 1140 Memphis, TN 38101-1140 Regency Enterprises trade $228,220 Fisher Development, Inc. trade $211,575 National Mallfront & Design trade $145,092 Jasco Industries, Inc. trade $132,706 Ultimate Services, Inc. trade $93,958 TEC Leaseholds, Ltd. trade $86,272 Scott Thomas Construction, trade $84,667 Inc. Big Apple Visual Group trade $76,298 Big Boing trade $66,450 Total Transportation Services trade $64,266 Harte Hanks Corp. trade $60,279 Gilin Distributing, Inc. trade $57,583 Bridge Metal Industries, LLC trade $54,808 ADT Security Services trade $52,306 C. Hoop Canada Holdings, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Disney Enterprises, Inc. other unknown Attn: Stephen M. Finney, Senior VP & General Counsel 500 South Buena Vista Street Burbank, CA 91521-1030 The Walt Disney Co. other unknown Attn: James I. Kapenstein, Esq. 500 South Buena Vista Street Burbank, CA 91521-0599 Fax: (818) 562-1813 TDS Franchising, LLC other unknown Attn: The Walt Disney Co. 500 South Buena Vista Street Burbank, CA 91521-6916 Moore Wallace North America trade $655,104 1200 Lakeside Drive Bannonckburn, IL 60015 Lakeview Construction, Inc. trade $614,171 10505 Corp. Drive, Suite 200 Pleasant Prairie 53158 FedEx Corp. trade $330,879 P.O. Box 1140 Memphis, TN 38101-1140 Regency Enterprises trade $228,220 Fisher Development, Inc. trade $211,575 National Mallfront & Design trade $145,092 Jasco Industries, Inc. trade $132,706 Ultimate Services, Inc. trade $93,958 TEC Leaseholds, Ltd. trade $86,272 Scott Thomas Construction, trade $84,667 Inc. Big Apple Visual Group trade $76,298 Big Boing trade $66,450 Total Transportation Services trade $64,266 Harte Hanks Corp. trade $60,279 Gilin Distributing, Inc. trade $57,583 Bridge Metal Industries, LLC trade $54,808 ADT Security Services trade $52,306 INNOVATIVE PROPERTIES: Case Summary & 39 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Innovative Properties of Tampa Bay Inc. 502 North Armenia Avenue Tampa, FL 33609 Bankruptcy Case No.: 08-03873 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Raul Alexander Alonso 08-03874 Chapter 11 Petition Date: March 24, 2008 Court: Middle District of Florida (Tampa) Judge: Paul M. Glenn Debtor's Counsel: Susan H. Sharp, Esq. Stichter, Riedel, Blain & Prosser 110 E Madison Street, Suite 200 Tampa, FL 33602 Tel: 813-229-0144 Fax: 813-229-1811 ssharp.ecf@srbp.com Estimated Assets: less than $50,000 Estimated Debts: $1,000,001 to $10 million A. Innovative Properties of Tampa Bay Inc.'s list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Florida Capital Associates $300,000 9140 Golfside Drive, #13N Jacksonville, FL 32256 Mike Kodsi $225,000 40 S. East 5th Street, #502 Boca Raton, FL 33432 Robert J. Goldstein $192,000 800 E. Baker Street, Tampa, FL 33603 Bobbie Yunis $117,881 Nausheen B. Yunis $104,285 Thomas Cruz $70,000 Mohamed Yunis $50,000 Bellsouth Advertising & Publishing $30,893 Bank of America $12,690 Dell Business Credit $11,123 CitiBusiness Card $8,401 First Equity Card $6,904 Home Depot Credit Services $4,105 Tampa Tribune $2,553 Dell Financial Services $2,435 Florida Department of Revenue $2,196 Verizon Florida LLC $705 Networks! Technology Solutions $630 BrightHouse Networks $210 B. Raul Alexander Alonso's list of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Florida Capital Associates $300,000 9140 Golfside Drive, #13N Jacksonville, FL 32256 Mike Kodsi $225,000 40 S. East 5th Street, #502 Boca Raton, FL 33432 Robert J. Goldstein $192,000 800 E. Baker Street, Tampa, FL 33603 Bobbie Yunis $117,881 Nausheen B. Yunis $104,285 Thomas Cruz $70,000 Mohamed Yunis $50,000 Bellsouth Advertising & $30,893 Publishing Internal Revenue Service 2005 1040 taxes $27,904 Bank of America $12,690 Dell Business Credit $11,123 CitiBusiness Card $8,401 First Equity Card $6,904 Home Depot Credit Services $4,105 Tampa Tribune $2,553 Dell Financial Services $2,435 Florida Department of Revenue $2,196 Verizon Florida LLC $705 Networks! Technology Solutions $630 BrightHouse Networks $210 INOVA TECHNOLOGY: Jan. 31 Balance Sheet Upside-Down by $271,437 --------------------------------------------------------------- Inova Technology Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $8,009,664 in total assets and $8,281,101 in total liabilities, resulting in a $271,437 total stockholders' deficit. At Jan. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $3,131,400 in total current assets available to pay $6,556,633 in total current liabilities. The company reported a net loss of $851,194 for the third quarter ended Jan. 31, 2008, compared with a net loss of $1,436,182 in the corresponding period ended Jan. 31, 2007. Net revenues increased from $575,652 in the three-month period ending Jan. 31, 2007, to $1,018,853 for the three-month period ending Jan. 31, 2008. This is due to the revenues from the newly- acquired Desert Communications. Operating expenses increased from $254,104 for the three months ending Jan. 31, 2007, to $752,705 for the same period in 2008. This was mainly due to the financing expenses incurred in raising cash to acquire Desert Communications. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?2990 Going Concern Disclaimer Malone & Bailey, PC, in Houston, Texas, expressed substantial doubt about Inova Technology Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended April 30, 2007. The auditing firm pointed to the company's recurring losses from operations and working capital deficiency. About Inova Technology Based in Santa Monica, California, Inova Technology Inc. (IVTH.PK) -- http://www.inovatechnology.com/-- develops and sells RFID (radio frequency identification) products and services. Inova is focused on developing solutions that prevent counterfeit of luxury goods and pharmaceuticals. INTERMEC INC: Narrow Business Profile Prompts S&P's 'BB-' Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Everett, Washington-based Intermec Inc. to positive from stable, reflecting recently improved revenue and profitability and a substantial reduction in leverage. The corporate credit rating was affirmed at 'BB-'. "The rating on Intermec reflects a relatively narrow business profile, competitive market conditions, evolving technology standards, and a short track record at current profitability levels," said Standard & Poor's credit analyst Clay Ching. "These factors are offset partially by an improving financial profile, a diversified customer base, and a good market position, supported by a strong patent portfolio." Intermec designs, develops, and manufactures wired and wireless automated identification and data collection products, principally to help facilitate supply chain management. IRON MOUNTAIN: Moody's Upgrades Corp. Family Rating to B1 From B2 ----------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating Iron Mountain Incorporated to B1 from B2. Other ratings on outstanding debt instruments were also upgraded. The outlook for the ratings is stable. Notwithstanding higher than anticipated capital expenditures and year-end compensation and benefit accruals, the upgrade recognizes continued strength in operating performance, including continued strong growth in storage revenues and improved debt maturity structure and overall liquidity following last year's refinancing activity. Importantly, the upgrade also incorporates Moody's belief that the primary focus of the company has shifted from growth through acquisitions to achieving increased operational efficiencies. Although acquisitions are likely to continue, the size of acquired entities is likely to be substantially less material in relation to Iron Mountain's size than has been the case in the past. The Corporate Family Rating of B1 is supported by the company's prominent position as a global leader in information storage and data protection, including its strategic expansion in the digital market in recent years, as well as Moody's expectation of reduced emphasis on acquisitions relative to the company's current size going forward. The ratings benefit from the company's historical revenue stability, geographical diversification and low customer concentration. The ratings continue to be constrained by high financial leverage, the significant amount of goodwill and intangibles in relation to total assets and the low level of pro forma free cash flow (defined as cash from operations less capital expenditures less dividends) relative to debt. Interest coverage for the rating category of adjusted EBITDA less capital expenditures to interest expense of 1.3 times is weak for the category. The ratings also reflect a capital intensive business with most revenues deriving from paper document storage and related services which require significant customized physical space. Moody's took these rating actions: -- Upgraded the Corporate Family Rating to B1 from B2; -- Upgraded the Probability of Default Rating to B1 from B2; -- Upgraded the $790 million global revolving credit facility due 2012 to Ba1 (LGD2, 16%) from Ba2 (LGD2, 13%); -- Upgraded the $410 million IMI term loan facility to Ba1 (LGD2, 16%) from Ba2 (LGD2, 13%); -- Upgraded the C$175 million 7.5% senior subordinated notes due 2017 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the EUR 225 million 6.75% Euro senior subordinated notes due 2018 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the $72 million 8.25% senior subordinated notes due 2011 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the $200 million 8.75% senior subordinated notes due 2018 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the $448 million 8.625% senior subordinated notes due 2013 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the $300 million 7.25% GBP senior subordinated notes due 2014 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the $438 million 7.75% senior subordinated notes due 2015 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the $316 million 6.625% senior subordinated notes due 2016 to B2 (LGD5, 71%) from B3 (LGD4, 68%); -- Upgraded the secured drawings under the existing shelf to (P)Ba1 (LGD2, 16%) from (P)Ba2 (LGD2, 13%); -- Upgraded the unsecured drawings under the existing shelf to (P)Ba1 (LGD2, 16%) from (P)Ba3 (LGD2, 27%); -- Upgraded the subordinated draws under the existing shelf to (P)B2 (LGD5, 71%) from (P)B3 (LGD4, 68%); -- Upgraded the preferred stock draws under the existing shelf to (P)B3 (LGD6, 97%) from (P)Caa1 (LGD6, 97%); -- Upgraded the Trust preferred stock shelf to (P)B2 (LGD5, 71%) from (P)B3 (LGD4, 68%); -- The Speculative Grade Liquidity rating is SGL-3. The outlook for the ratings is stable. Headquartered in Boston, Massachusetts, Iron Mountain Incorporated is an international provider of information storage and protection related services. The company offers comprehensive records management and data protection solutions, along with the expertise to address complex information challenges such as rising storage costs, litigation, regulatory compliance and disaster recovery. Founded in 1951, Iron Mountain has more than 100,000 corporate clients throughout North America, Europe, Latin America, and Asia Pacific. Revenue for the twelve months ended Dec. 31, 2007 was approximately $2.7 billion. IWORLD PROJECTS: Involuntary Chapter 11 Case Summary ---------------------------------------------------- Alleged Debtor: iWorld Projects & Systems, Inc. P.O. Box 2115 Addison, TX 75001-2115 Case Number: 08-31372 Involuntary Petition Date: March 25, 2008 Court: Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ David L. Pells unpaid wages, $229,000 3829 Canot Lane expenses Addison, TX 75001 Tel: (214) 236-8480 JECO INC: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------- Debtor: JECO Inc. 12470 Potter Town Road Pound, VA 24279 Bankruptcy Case No.: 08-70515 Chapter 11 Petition Date: March 20, 2008 Court: Western District of Virginia (Roanoke) Judge: William F Stone Jr. Debtor's Counsel: Robert Tayloe Copeland, Esq. Copeland & Bieger PC P.O. Box 1296 Abingdon, VA 24212 Tel: 276 628-9525 Fax: 276-628-4711 rcopeland@copelandbieger.com Total Assets: $275,280 Estimated Debts: $1,099,623 Debtor's list of its 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Riggs Oil Company open account $119,395 Drawer AA Big Stone Gap, VA 24219 Fairville Company LP security $36,945 P. O. Box 2425 agreement; Coppell, TX 75019-2425 value of security: $98,279 Well's Group LLC open account $34,095 P.O. Box 28 West Liberty, KY 41472 CSE Inc. open account $12,947 Roanoke Cement open account $11,508 Home Lumber Co. open account $9,823 Pit-Stop Express open account $7,091 Lowe's Business Account open account $7,066 Maggards Sales & Service open account $6,901 Western Surety Co. open account $6,300 A Jack Paving open account $6,250 Robinette Steel open account $5,691 Besser Company open account $5,055 First Equity Card open account $4,647 CNA open account $4,500 Cochran Industries open account $4,070 Superior Truck & Equipment Inc. open account $3,904 Breedings Plumbing & Electric open account $3,044 JOHN PIAZZA: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: John A. Piazza Karen Piazza 1 Greyfox Court Bridgeville, PA 15017 Bankruptcy Case No.: 08-21884 Chapter 11 Petition Date: March 25, 2008 Court: Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Donald R. Calaiaro, Esq. (dcalaiaro@calaiarocorbett.com) Calaiaro & Corbett, P.C. Grant Building, Suite 1105 310 Grant Street Pittsburgh, PA 15219-2230 Tel: (412) 232-0930 Fax: (412) 232-3858 http://www.calaiarocorbett.com/ Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. JP MORGAN: Stable Performance Cues Fitch to Affirm Ratings ---------------------------------------------------------- JP Morgan Chase Commercial Mortgage Securities Corp., series 2007-LDP 10, commercial mortgage pass-through certificates are affirmed by Fitch Ratings as: -- $35.5 million class A-1 at 'AAA'; -- $199.4 million class A-1S 'AAA'; -- $250 million A-2 at 'AAA'; -- $688.9 million class A-2S at 'AAA'; -- $150 million class A-2SFL at 'AAA'; -- $1.7 billion class A-3 at 'AAA'; -- $179.9 million class A-3S at 'AAA'; -- $506.8 million class A-1A at 'AAA'; -- $359 million class A-M at 'AAA'; -- $174.1 million class A-MS at 'AAA'; -- $200.7 million class A-J at 'AAA'; -- $145.8 million class AJ-S at 'AAA'; -- $100 million class A-JFL at 'AAA'; -- $5.3 billion interest-only class X at 'AAA'; -- $71.8 million class B at 'AA'; -- $34.8 million class B-S at 'AA'; -- $26.9 million class C at 'AA-'; -- $13.1 million class C-S at 'AA-'; -- $49.4 million class D at 'A'; -- $23.9 million class D-S at 'A'; -- $40.4 million class E at 'A-'; -- $19.6 million class E-S at 'A-'; -- $44.9 million class F at 'BBB+'; -- $21.8 million class F-S at 'BBB+'; -- $44.9 million class G at 'BBB'; -- $21.8 million class G-S at 'BBB'; -- $40.4 million class H at 'BBB-'; -- $19.6 million class H-S at 'BBB-'; -- $20 million class J at 'BB+'; -- $20 million class K at 'BB'; -- $13.3 million class L at 'BB-'; -- $6.7 million class M at 'B+'; -- $6.7 million class N at 'B'; -- $13.3 million class P at 'B-'. Fitch does not rate the $66.6 million class NR. The rating affirmations reflect stable performance and limited paydown since issuance. As of the March 2008 distribution date, the transaction has paid down by 0.13% to $5.32 billion from $5.33 billion at issuance. There are no delinquent or specially serviced loans. Fitch is monitoring 14 loans of concern (3.9%), the largest (1.2%) is secured by a 410-unit multifamily property located in Sunnyvale, California. The loan is current, but the property has experienced a decline in occupancy since issuance due to an ongoing renovation. Fitch expects the property to stabilize once the renovation is completed. JP MORGAN: Fitch Holds 'B' Rating on $1.3MM Class N Certificates ---------------------------------------------------------------- Fitch Ratings upgraded JP Morgan Chase Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 2003-CIBC6 as: -- $32.5 million class C to 'AAA' from 'AA+'; -- $11.7 million class D to 'AA+' from 'AA'; -- $14.3 million class E to 'AA-' from 'A+', -- $10.4 million class F to 'A+' from 'A'. In addition, Fitch affirmed these classes: -- $135.9 million class A-1 at 'AAA'; -- $653.2 million class A-2 at 'AAA'; -- Interest-only classes X-1 and X-2 at 'AAA'; -- $31.2 million class B at 'AAA'; -- $13 million class G at 'A-'; -- $15.6 million class H at 'BBB'; -- $5.2 million class J at 'BBB-'; -- $7.8 million class K at 'BB+'; -- $5.2 million class L at 'BB-'; -- $3.9 million class M at 'B+'; -- $1.3 million class N at 'B'. Fitch does not rate the $18.1 million class NR. The upgrades are due to defeasance of 11 loans (8.2%) and principal paydown of 1.8% since Fitch's last rating action. As of the March 2008 distribution date, the pool has paid down 7.7%, to $59.3 million from $1.04 billion at issuance. Twenty-three loans (25.8%) have defeased, including One Alliance Center (6.6%), the second largest loan in the pool. There are 126 loans remaining in the transaction, compared to the original 128 loans. There are currently no delinquent or specially serviced loans in the transaction. Loan maturities are concentrated in 2013. The remaining non-defeased shadow-rated loan, The Battlefield Mall (9.8%), maintains an investment-grade shadow rating due to stable performance. The loan is secured by a 1 million square foot retail property located in Springfield, Missouri. Occupancy as of the end of third-quarter 2007 improved to 98.5% from 97.8% at issuance. The loan is schedule to mature in July 2013. Fitch has identified 12 loans (6.5%) as Fitch loans of concern due to declining performance. The largest Fitch loan of concern (1.9%) is secured by a 218,678 sf office property in Westbury, New York. Servicer reported debt service coverage ratio as of 3Q07 is 0.39 times with occupancy at 75%, compared to DSCR of 1.51x with occupancy at 97% at issuance. The second largest Fitch loan of concern (0.8%) is secured by 51,294 sf retail property in Southlake, Texas. Servicer reported DSCR as of 3Q07 is 0.98x with occupancy at 85%, compared to DSCR of 1.43x with occupancy at 100% at issuance. KLBL LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: KLBL LLC Route 29 and Yellow Springs Road Malvern, PA 19332 Bankruptcy Case No.: 08-11872 Chapter 11 Petition Date: March 19, 2008 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Stephen Raslavich Debtor's Counsel: Michael H. Kaliner, Esq. Jackson, Cook, Caracappa & Bloom 312 Oxford Valley Road Fairless Hills, PA 19030 Tel: (215) 946-4342 michael.kaliner@psinet.com Estimated Assets: unknown Estimated Debts: unknown The Debtor did not file its List of Largest Unsecured Creditors. LEINER HEALTH: Wants to Hire Houlihan Lokey as Financial Advisors ----------------------------------------------------------------- Leiner Health Products Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Houlihan Lokey Howard & Zukin Capital Inc. as their investment bankers and financial advisors, nunc pro tunc to March 10, 2008. Houlihan Lokey will: a) assist the company in the development, preparation and distribution of selected information, documents, and other materials in an effort to create interest in and to consummate any transactions; b) solicit and evaluate indications of interest and proposals regarding any transactions from current and potential lenders equity investors, acquirers and strategic partners; c) assist the company with the development, structuring, negotiation, and implementation of any transactions; d) provide expert advice and testimony regarding financial matters related to any transactions; and e) advise and attend meetings of the company's board of directors, creditor groups, official constituencies and other interested parties. Amit Patel, a managing director at Houlihan Lokey, tells the Court that his firm will be compensated according to this fee structure: -- a $150,000 monthly fee; -- a $3,500,000 restructuring transaction fee; -- at a closing of the Vita Sale transaction, $800,000, plus additional consideration based upon aggregate gross consideration; -- a financing transaction fee equal to: * 1.0% of the gross proceeds of any senior indebtedness issued; * 3.0% of the gross proceeds of any indebtedness issued that is secured by a lien that is unsecured or subordinated; * 5.0% of the gross proceeds of all equity or equity-linked securities that are place or committed. Mr. Patel assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. About Leiner Health Based in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com-- manufacture and supply store brand vitamins, minerals and nutritional supplements products, and over- the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to their primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Paul M. Basta, Esq., at Kirkland & Ellis LLP, and Jason M. Madron, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, it listed assets and debts between $500 million to $1 billion. LEINER HEALTH: Wants to Hire Kirkland & Ellis as Bankr. Counsel --------------------------------------------------------------- Leiner Health Products Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Kirkland & Ellis LLP as bankruptcy counsel, nunc pro tunc to March 10, 2008. Kirkland & Ellis will: a) advise the Debtors with respect to their powers and duties as debtors in possession in the continued management and operation of their business and properties; b) advise the Debtors on the conduct of the Chapter 11 cases, including all of the legal and administrative requirements of operating in Chapter 11; c) attend meetings and negotiate with representatives of the creditors and other parties-in-interest; d) prosecute actions on the Debtors' behalf, defend any action commenced against the Debtors and represent the Debtors' interests in negotiations concerning litigation in which the Debtors are involved; e) prepare pleadings including motions, applications, answers, orders, reports and papers necessary or otherwise beneficial to the administration of the Debtors' estates; f) represent the Debtors in connection with obtaining postpetition financing; g) advise the Debtors in connection with any potential sale of assets, including the contemplated sale of substantially all of the Debtors' assets; h) appear before the Court and any appellate courts to represent the interests of the Debtors' estates before those courts; i) advise the Debtors regarding tax matters; j) assist the Debtors in obtaining approval of a disclosure statement and confirmation of a Chapter 11 plan and all documents; k) perform all other necessary legal services for the Debtors. Paul M. Basta, Esq., a partner at Kirkland & Ellis, discloses to the Court the firm's professionals bill: Designation Hourly Rate ----------- ----------- Partners $500 - $975 Counsel $380 - $870 Associates $275 - $595 Paraprofessionals $120 - $260 Mr. Basta tells the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Mr. Basta can be contacted at: Paul M. Basta, Esq. Kirkland & Ellis LLP Citigroup Center 153 East 53rd Street New York, NY 10022-4611 Tel: (212) 446-4800 Fax: (212) 446-4900 http://www.kirkland.com/ About Leiner Health Based in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com-- manufacture and supply store brand vitamins, minerals and nutritional supplements products, and over- the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to their primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Paul M. Basta, Esq., at Kirkland & Ellis LLP, and Jason M. Madron, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, it listed assets and debts between $500 million to $1 billion. LEINER HEALTH: Wants Court to Set June 16 as Claims Bar Date ------------------------------------------------------------ Leiner Health Products Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to establish June 16, 2008, as deadline for creditors holding prepetition claims against the Debtors can file proofs of claim. Furthermore, the Debtors proposed Sept. 10, 2008, as deadline for all governmental units to file claims. All proofs of claim must be filed no later than 5:00 p.m., prevailing Eastern Time, on June 16, 2008, to: The Garden City Group Inc. Attn: Leiner Health Products Inc. P.O. Box 9000 #6497 Merrick, New York 11566-9000. A hearing is set on April 8, 2008, at 1:30 p.m., prevailing Eastern Time, to consider the Debtors' request. Objections, if any, are due April 1, 2008, at 4:00 p.m., prevailing Eastern Time. About Leiner Health Headquartered in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com-- manufacture and supply store brand vitamins, minerals and nutritional supplements products, and over- the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to their primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Paul M. Basta, Esq., at Kirkland & Ellis LLP, and Jason M. Madron, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, it listed assets and debts between $500 million to $1 billion. LOGAN'S ROADHOUSE: S&P Changes Outlook to Stable; Keeps B- Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Nashville, Tennessee based Logan's Roadhouse Inc. to stable from positive. At the same time, S&P affirmed all ratings on the company, including the 'B-'corporate credit rating. "The outlook revision reflects our projection that over the next year the company will not be able to achieve credit metrics appropriate for a higher rating category," said Standard & Poor's credit analyst Diane Shand, "after a weaker-than-expected performance in the second quarter of fiscal 2008." Moreover, Standard & Poor's does not expect leverage to improve in the near term as the preferred stock and the senior notes accrete interest. The higher debt levels will likely offset any improvement in EBITDA. MACKLOWE PROPERTIES: Market Woes Slow Down GM Building Sale ----------------------------------------------------------- Investors await the completion of the sale of Macklowe Properties' General Motors Building for an asking price of $3 billion amid slowed transactions in the commercial property sector, Dow Jones reports. According to Jones Lang LaSalle Inc. managing director, Nat Rockett, "there is [generally] very, very little transaction activity" in the market. He commented that the so-called benchmark sale of GM Building will result in "a disproportionate impact," the report relates. Mr. Rockett added that selling the building below expectation will send out "negative signal," Dow Jones notes. Woody Heller of real estate servicing company Studley, made a similar comment, according to Dow Jones. Dow Jones recounts the current problems in both the commercial real estate and the securities markets that made investors hesitant to engage in equity buy transactions. However, according to the report, "commercial real estate [values] have remained relatively strong" because "of limited supply, favorable interest rates, and the the absence of speculative buying." Nevertheless, Dow Jones states that there are emerging "signs of strain" in the market citing stabilized vacancy rates among others. Dow Jones cites Reis Inc.'s report that during the first quarter of 2008, there were deal involving $12 billion worth of single property office, down from $37 billion in the year-ago comparable quarter. Dow Jones relates that the sale of the GM Building will be slowed down and closed for below the $3 billion asking price over tightened credit markets and the foreseen recession. Although GM Building is "among the most attractive," the sale might be hard to implement given its size and the lack of liquidity in the market, Dow Jones quotes Mr. Heller as stating. Dow Jones reports it could scarcely get updates on the GM Building sale. Offers for Macklowe's GM Building Mr. Macklowe received offers to buy his General Motors Building from several parties, including developer Larry Silverstein and Joseph Cayre. Several offers for the GM Building are more than $3 billion amid the sluggish economy, the TCR reported on Feb. 20, 2008. On Jan. 16, 2008, the TCR related that Mr. Macklowe has engaged CB Richard Ellis Group Inc.'s services to sell off GM building at 767 Fifth Avenue in midtown Manhattan for more than $3 billion. Mr. Macklowe acquired the 50-story GM building in 2003 from Conseco Inc. for $1.4 billion. The building, which originally served as a showroom for General Motors cars, is part of the collateral the a bridge loan from Fortress Investment Group LLC. Lenders Waive Loan Default A spokesperson for Macklowe Properties founder, Harry Macklowe, stated Feb. 15, 2008, that Mr. Macklowe obtained a waiver extending the maturity of his billions of dollars in debts owed to two major lenders, Deutsche Bank AG and Fortress. As previously reported by the TCR, Mr. Macklowe owes Deutsche Bank about $5.8 billion, and Fortress about $1.2 billion, plus accrued interest. Both of the debts, secured by Mr. Macklowe's $7 billion real property in Manhattan, originally matured Feb. 9, 2008. There were no further details on the waiver. About Macklowe Properties Headquartered in New York City, Macklowe Properties -- http://www.macklowe.com/-- is a real estate investment firm that buys, develops, manages, and leases commercial office properties and apartment buildings primarily in Manhattan. The company was founded in the mid-1960s by chairman and CEO Harry B. Macklowe, whose son, William Macklowe, serves as the company's president. The company currently owns about 12 million square feet of office space and 900 apartment units. MACKLOWE PROPERTIES: S&P Holds CBRE CDO Rating Affecting $7BB Debt ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on one commercial real estate (CRE) collateralized debt obligation (CDO) transaction with direct exposure to approximately $7 billion of financing to Macklowe Properties that matured on Feb. 9, 2008, and has not paid off. The affirmations affect 11 classes from CBRE Realty Finance CDO 2006-1 Ltd. The affirmations reflect Standard & Poor's analysis of the current credit characteristics of the asset pool as well the transaction's obligations. The approximately $7.2 billion of financing to Macklowe Properties is part of a three-pool financing package (Macklowe EOP Pool 1-3) that is secured directly and indirectly by seven Manhattan office properties. Macklowe Properties purchased the seven office buildings from Equity Office Properties in connection with Blackstone Group L.P.'s acquisition of EOP last year. The Macklowe EOP Pool 1-3 financing package was originated at $7 billion with a 12-month term expiring Feb. 9, 2008, with no extension options. The debt was not paid off at maturity, and it is S&P's understanding that the most subordinate portion of the financing package, $1.2 billion of equity bridge financing, was subsequently extended for one year and increased to $1.4 billion. Negotiations are continuing between Macklowe Properties, the borrower, and its lenders for a possible restructuring of the remaining $5.8 billion of mortgage and mezzanine debt, which could lead to a one-year extension to facilitate an orderly sale of the properties. The debt was considered in default as of March 10, 2008. At this time, Standard & Poor's has identified these rated CRE CDO transactions with exposure to mezzanine debt from Macklowe EOP Pool 1: -- CBRE Realty Finance CDO 2006-1 Ltd.: $24 million of the $237.9 million mezzanine 3 tranche, which is subordinate to $1.6 billion of mortgage debt and $1.1 billion of mezzanine debt from Macklowe EOP Pool 1. The $24 million asset represents 4% of the total assets held in CBRE Realty Finance CDO 2006-1 Ltd.; -- Petra CRE CDO 2007-1 Ltd.: $25.5 million of the same mezzanine 3 tranche referenced above, which represents 3% of the total assets held in Petra CRE CDO 2007-1 Ltd. Standard & Poor's is currently conducting a full analysis of the transaction as part of the deal becoming effective; and -- Carbon Capital II Real Estate CDO 2005-1: $17.7 million of the same mezzanine 3 tranche referenced above, which represents 4% of the total assets held in Carbon Capital II Real Estate CDO 2005-1 Ltd. Standard & Poor's placed its ratings on five classes from Carbon Capital II Real Estate CDO 2005-1 Ltd. on CreditWatch negative, in part due to the transaction's exposure to Macklowe EOP Pool 1. Analysis Of Rated CRE CDO CBRE Realty Finance CDO 2006-1 Ltd. According to the Feb. 19, 2008, trustee report, the collateral pool backing CBRE Realty Finance CDO 2006-1 Ltd. consisted of 50 assets with an aggregate principal balance of $592 million. The collateral includes 26 CREL assets ($479.6 million, 81%), 24 classes of commercial mortgage-backed securities pass-through certificates ($107.2 million, 18%), and cash ($5.2 million, 1%). The assets exhibited credit characteristics consistent with 'BB' rated obligations, excluding any impaired assets. The Macklowe EOP Pool 1 exposure ($24 million, 4%) was the only asset that Standard & Poor's analysis considered credit impaired. While Standard & Poor's analysis of the current credit characteristics of the asset pool and the transaction's obligations led us to affirm S&P's ratings on all of the rated classes, the cushion available for classes J and K have decreased since issuance. Additional Rated Exposure to Macklowe EOP Pool 1-3 In addition to the previously referenced exposures, these rated CMBS transaction has exposure to mortgage debt from Macklowe EOP Pool 1: -- COMM 2007-FL14: The $1.6 billion interest-only floating-rate first mortgage loan from Macklowe EOP Pool 1. These rated CRE CDOs have exposure to subordinate mortgage debt from Macklowe EOP Pool 1: -- Brascan Real Estate CDO 2004-1 Ltd.: $5 million of the $55 million raked MKL2 class from COMM 2007-FL14 and $15 million of the $54 million raked MKL3 class from COMM 2007-FL14. The assets represent approximately 2% and 6% of the total assets held in Brascan Real Estate CDO 2004-1 Ltd., respectively; and -- Brascan Structured Notes 2005-2 Ltd.: $5 million of the $54 million raked MKL3 class from COMM 2007-FL14, which is approximately 2% of the total assets held in Brascan Structured Notes 2005-2 Ltd. Finally, these rated CMBS has exposure to mortgage debt from Macklowe EOP Pool 3: -- LB-UBS 2006-C1: The $420.8 million mortgage on 1301 Avenue of the Americas from Macklowe EOP Pool 3. The loan is the largest asset (approximately 17% of the aggregate pool balance) in LB-UBS 2006-C1 and matures on Jan. 11, 2016. All but $63.8 million of the $1.2 billion of mezzanine debt from Macklowe EOP Pool 3 matured on Feb. 9, 2008. Standard & Poor's will continue to have discussions with the parties involved in the workout negotiations with Macklowe Properties and evaluate its rated CMBS and CRE CDO transactions that have either direct or indirect exposure to the Macklowe EOP Pool 1-3 financing package. As S&P conducts its evaluations, it will consider the most recent information available regarding the negotiations, as well as their impact on the transactions, which may prompt further commentaries or rating actions. Standard & Poor's analysis of the CRE CDO transaction considered the underlying credit characteristics of the assets as well as the potential impact of changes in the credit characteristics. The analysis adequately supports the affirmed ratings. Ratings Affirmed CBRE Realty Finance CDO 2006-1 Ltd. CRE CDO Class Rating ----- A-1 AAA A-2 AAA B AA C A+ D A- E BBB+ F BBB G BBB- H BBB- J BB K B MARCAL PAPER: Court Approves Amended Disclosure Statement --------------------------------------------------------- The United States Bankruptcy Court for the District of New Jersey approved Marcal Paper Mills Inc.'s Second Amended Disclosure Statement dated Jan. 11, 2008, describing its Second Amended Chapter 11 Plan of Reorganization, Bloomberg News reports. The Court held that the disclosure statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Court has yet to issue a written order approving the Disclosure Statement, Bloomberg notes. Overview of the Plan The amended Plan provides for the sale of substantially all of the Debtor's assets to a designee of NexBank SSB as agent under the second lien loan agreement. On Oct. 2, 2007, the Debtor gave notice that it was going to sell its assets. NexBank offered $121.6 million for the assets, which included a credit bid of $35 million and $6 million cash. In November 2007, as reported in the Troubled Company Reporter, the Debtor's proposed bidding procedure was approved by the Court. The Plan also provides for the disposition of any remaining assets for distribution by a liquidating trustee under a liquidating trust agreement, and the distribution of net proceeds to holders of allowed claims consistent with the priority provisions of the Bankruptcy Code. The Plan does not contemplate the continuation of the Debtor's business after the consummation of the proposed sale. Treatment of Claims Under the Plan, these claims are unimpaired and will be paid in full: -- administrative expense claims; -- reclamation claims; -- postpetition administrative trade claims; -- priority tax claims; -- other priority claims; and -- other secured claims. Holders of prepetition second lien secured lender claims, totaling between $64,000 and $65,000, will be satisfied, if the proposed purchaser became the prevailing bidder. If not, cash portion of the purchase price allocable to outstanding allowed obligations under the prepetition second lien secured loan pursuant to the prevailing bidder's assets purchase agreement and in accordance with the requirements of the bidding procedures, will be paid to the agent under the prepetition second lien secured loan at the closing of any sale approved by the Court. General Unsecured claims, totaling between $71,000 and $1,100,000, will be entitled to receive a pro rata share of the net assets of the liquidation trust. Holders of equity interests will not receive any distribution of property and all equity interests will be cancelled on the effective date of the Plan. About Marcal Paper Mills Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- is a privately-held, fourth generation family business. Founded in 1932, it employs over 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The company produces over 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from- home use in hotels, restaurants, hospitals, offices and factories. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A., represent the Debtor. The Debtor selected Logan and Company Inc. as noticing and claims agent. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC, represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor disclosed total assets of $178,626,436 and total debts of $178,890,725. MARK BOSWORTH: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Mark Bosworth Lisa Ann Bosworth 11861 East Desert Trail Road Scottsdale, AZ 85259 Bankruptcy Case No.: 08-03098 Chapter 11 Petition Date: March 25, 2008 Court: District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Allan D. Newdelman, Esq. (anewdelman@qwest.net) 80 East Columbus Avenue Phoenix, AZ 85012 Tel: (602) 264-4550 Fax: (602) 277-0144 Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million The Debtor did not file a list of its largest unsecured creditors. MASTR 2005-HE1: Class M-11 Acquires S&P's 'D' Rating on Losses -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of mortgage pass-through certificates from MASTR Asset Backed Securities Trust 2005-HE1. The other outstanding ratings on this transaction were not affected. S&P downgraded class M11 to 'D' due to realized losses of $642,764.09 during the February 2008 remittance period. The downgrades of the other classes reflect continuous adverse pool performance. Serious delinquencies (90-plus days, foreclosures, and REOs) were $30.76 million, up $8.75 million from a year ago. Losses have consistently outpaced excess interest for 11 of the 12 most recent months. This led to a complete erosion of overcollateralization (O/C), which has a $5.39 million target. Cumulative realized losses to date are $12.48 million. Subordination, excess interest, and O/C provide credit support for this transaction. At issuance, the collateral backing the deal consisted of subprime, fixed- and adjustable-rate, fully amortizing first-lien mortgage loans secured by one- to four- family residential properties. Ratings Lowered MASTR Asset Backed Securities Trust 2005-HE1 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-8 BBB BBB+ M-9 BB BBB M-10 CCC B M-11 D CCC Other Outstanding Ratings MASTR Asset Backed Securities Trust 2005-HE1 Mortgage pass-through certificates Class Rating ----- ------ A-2,A-3 AAA M-1 AA+ M-2 AA M-3 AA- M-4 A+ M-5 A M-6 A- M-7 BBB+ MASTR 2006-FRE2: S&P Cuts Rating on Class M-11 to 'D' on Losses --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class M-11 mortgage pass-through certificates from MASTR Asset Backed Securities Trust 2006-FRE2. The other outstanding ratings from this transaction were not affected. S&P downgraded class M-11 to 'D' due to realized losses of $948,726.38 during the February 2008 remittance period. Cumulative realized losses to date are $29.095 million or 3.33% of the original principal balance. Subordination, excess interest, and overcollateralization provide credit support for this transaction. The underlying collateral consists of fixed- and adjustable-rate, mortgage loans secured by first- and second-lien mortgages on one- to four-family residential properties. Rating Lowered MASTR Asset Backed Securities Trust 2006-FRE2 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-11 D CC Other Outstanding Ratings MASTR Asset Backed Securities Trust 2006-FRE2 Mortgage pass-through certificates Class Rating ----- ------ A-1,A-2,A-3 AAA A-4,A-5 AAA M-1 BBB M-2 B M-3 CCC M-4 CCC M-5 CCC M-6 CC M-7 CC M-8 CC M-9 CC M-10 CC MAXJET AIRWAYS: Court Extends Ch. 11 Plan Filing Period to Aug. 20 ------------------------------------------------------------------ The Hon. Peter J. Walsh of the United States Bankruptcy Court for the District of Delaware extended MAXjet Airways Inc.'s exclusive period to file a Chapter 11 plan until Aug. 20, 2008, according to Bloomberg News. The Court, Bloomberg says, also extended Debtor's exclusive rights to solicit acceptances of that plan until Oct. 20, 2008. As reported in the Troubled Company Reporter on March 11, 2008, the Debtor told the Court that it needs sufficient time to prepare a Chapter 11 plan and disclosure statement describing that plan. The Debtor are seeking court approval for the sale of personal properties to MAXjet Airways Acquisition Group LLC whose bid was declared best offer during a March 12 auction, as reported in Troubled Company Reporter on March 19, 2008. MAAG agreed to pay $1,000,000 for the purchased assets. All proceeds from the sale of the Debtor's assets will be for the benefit of its creditors, but not for the shareholders. About MAXjet Airways Dulles, Virginia-based MAXjet Airways Inc. -- http://www.maxjet.com/-- is an all-business class, long-haul airline company. It has introduced scheduled services with flights from London Stansted Airport to New York. As of December, 2006, it leased five B767 aircraft. Its customers are both business and leisure travelers. At the airport, its product features check-in facilities located in primary terminals, security and a business class departure lounge and arrivals facility. Its flights features deep-recline seats (170 degree) spaced at a 60 inch pitch, portable entertainment systems, stowage space and business class catering. The Debtor filed for chapter 11 protection on Dec. 24, 2007 (Bankr. D. Del. Case No. 07-11912). The Debtor selected Pachulski Stang Ziehl & Jones LLP and Pillsbury Winthrop Shaw Pittman LLP as its bankruptcy counsels. Arent Fox LLP represents the Official Committee of Unsecured Creditors. As reported in the Troubled Company Reporter on Feb. 27, 2008, the Debtor's summary of schedules shows assets of $14,836,147 and debts of $23,601,824. MILLER PETROLEUM: Jan. 31 Balance Sheet Upside-Down by $1,719,228 ----------------------------------------------------------------- Miller Petroleum Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $3,933,567 in total assets and $5,652,795 in total liabilities, resulting in a $1,719,228 total stockholders' deficit. At Jan. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $499,287 in total current assets available to pay $5,319,154 in total current liabilities. The company reported a net loss of $336,202 on total revenue of $245,037 for the third quarter ended Jan. 31, 2008, compared with a net loss of $508,308 on total revenue of $200,049 in the third quarter ended Jan. 31, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?2993 Going Concern Doubt Rodefer Moss & Co. PLLC, in Knoxville, Tennessee, expressed substantial doubt about Miller Petroleum Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended April 30, 2007, and 2006. The auditing firm reported that the company has suffered recurring losses from operations, and is facing litigation with Wind City which might require the company to redeem 2,900,000 shares of the company's common stock for approximately $4,350,000. In addition to successive losses for three years, declining revenues, a net loss of $1,052,345 for the nine months ended Jan. 31, 2008, and net deficit of $1,719,228, on Feb. 7, 2008, the company was ordered under binding arbitration to redeem 2.9 million shares of stock owned by Wind City. Management believes that the company will therefore need total additional financing of approximately $5,000,000 to effect the repurchase and continue to operate as planned during the year subsequent to Jan. 31, 2008. About Miller Petroleum Headquartered in Huntsville, Tennessee, Miller Petroleum Inc. (OTC BB: MILL.OB) -- http://www.millerpetroleum.com/-- is engaged in the exploration, development, production and acquisition of crude oil and natural gas primarily in eastern Tennessee. MM NEWTOWN: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: MM Newtown Capital, LLC 1 Lincoln Plaza, Apartment 23H New York, NY 10023 Bankruptcy Case No.: 08-11001 Chapter 11 Petition Date: March 25, 2008 Court: Southern District of New York (Manhattan) Judge: Arthur J. Gonzalez Debtor's Counsel: Michael V. Blumenthal, Esq. (mblumenthal@thelen.com) Thelen Reid Brown Raysman & Steiner LLP 900 Third Avenue New York, NY 10022 Tel: (212) 895-2000 Fax: (212) 895-2900 http://www.thelen.com/ 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. MONEYGRAM INT'L: Completes Deal with Investors on Recapitalization ------------------------------------------------------------------ MoneyGram International Inc. completed the transaction with an investment group led by Thomas H. Lee Partners L.P. and Goldman Sachs & Co., to provide for a comprehensive recapitalization of the company. As reported in the Troubled Company Reporter on March 19, 2008, MoneyGram International entered into an amended definitive agreement with an investment group led by Thomas H. Lee Partners L.P. and Goldman Sachs & Co., concerning a comprehensive recapitalization of the company. Components of the recapitalization include: -- The investors, which include affiliates of THL and affiliates of Goldman Sachs, have purchased $760 million of Series B and Series B-1 Preferred Stock, convertible into 79% of the common equity of the company at an initial conversion price of $2.50 per share. -- The company has also received $500 million in debt financing from affiliates of Goldman Sachs. -- The company has obtained an additional $250 million in senior debt financing and following completion of the transaction, has $100 million of revolving credit available under its previously existing $350 million credit agreement, which has been modified to provide for an extended term. "With the completion of this important transaction, MoneyGram now has the financial resources to support our customers and their growth plans," Philip W. Milne, president and chief executive officer of MoneyGram, stated. "I want to thank our dedicated employees as well as our customers and agents for their confidence in MoneyGram during this difficult period." "The extension of our agreements with Wal-Mart Stores Inc. and ACE Cash Express are very important developments for MoneyGram, underscoring the tremendous work of our team members to provide outstanding customer service and support," Mr. Milne continued. "Our money transfer business continues to enjoy excellent growth and last month we surpassed a significant milestone by adding our 150,000th agent location. Through our launched global branding and bilingual national advertising campaign, we continue to invest in our brand to deliver growth into the future." Also as a result of the completed transaction, the investors have appointed Scott L. Jaeckel and Seth W. Lawry, principals of THL, as members of the company's board of directors. Jess Hay, Albert M. Teplin and Othon Ruiz-Montemayor will continue as members of the board, as will Mr. Milne, the company's chairman and chief executive officer. Upon receipt of regulatory approval, THL is expected to appoint a majority of the company's board of directors. About MoneyGram International Headquartered in Minneapolis, Minnesota, MoneyGram International Inc. -- http://www.moneygram.com/-- (NYSE: MGI) is a payment services company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram had approximately 143,000 money transfer agent locations in 170 countries and territories. * * * As reported in the Troubled Company Reporter on Jan. 18, 2008, Standard & Poor's Ratings Services lowered its long-term counterparty credit rating on MoneyGram International to 'BB' from 'BBB'. The rating will remain on creditwatch negative, where it was placed on Dec. 13, 2007. As reported in the Troubled Company Reporter on Jan. 17, 2008, Fitch Ratings downgraded these ratings for MoneyGram International Inc.: (i) issuer default rating to 'BB-' from 'BBB-'; and (ii) senior unsecured credit facility to 'BB-' from 'BBB-'. These ratings remain on rating watch negative. MORGAN STANLEY: Moody's Retains 'Ba1' Rating on Class N-SDF Certs. ------------------------------------------------------------------ Moody's Investors Service upgraded the rating of one class and affirmed the ratings of four classes of Morgan Stanley Capital I Inc., Commercial Pass-Through Certificates, Series 2006-XLF: -- Class X-1, Notional, affirmed at Aaa -- Class D, $31,907,793, Floating, upgraded to Aaa from Aa2 -- Class N-LAF, $11,000,000, Floating, affirmed at A3 -- Class O-LAF, $8,000,000, Floating, affirmed at Baa3 -- Class N-SDF, $2,000,000, Floating, affirmed at Ba1 The pooled Certificates are collateralized by seven senior mortgage loan participations. As of the March 17, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 82.1% to $279.0 million from $1.6 billion at securitization. The loans range in size from 6.6% to 21.4% of the pooled balance. Moody's is upgrading pooled Class D due to increased credit support from the loan payoffs as well as the stable performance of the loans remaining in the pool. The current pooled LTV is 61.3% compared to 63.0% at last review and 61.6% at securitization. The largest loan exposure in the pool is the Infomart Loan ($53.3 million -- 21.4%) which is secured by the borrower's interest in a 1.2 million square foot Class A office building located in Dallas, Texas. The major tenants are Bank of America (12.8% NRA, lease expires Dec. 31, 2024) and Equinox (5.2% NRA, lease expires May 31, 2010). Occupancy as of Aug. 31, 2007 was 85.5% compared to 76.5% at securitization. Moody's current LTV is 65.2% which is the same as at last review and at securitization. The second largest loan exposure is the Market Post Tower ($50.5 million -- 20.3%) which is secured by the borrower's interest in a 295,000 square foot Class A office building located in San Jose, California. The major tenants are the IRS (47.9% NRA, lease expires Feb. 28, 2010) and MCI (16.8% NRA, lease expires Dec. 31, 2012). Occupancy as of Aug. 31, 2007 was 95.9% compared to 95.1% at securitization. Moody's current LTV is 66.6% which is the same as at last review and at securitization. The third largest loan exposure is the Lafayette Estates Loan ($42.0 million -- 16.9%) which is secured by the borrower's interest in a 1,872 unit co-op conversion multifamily complex located in Bronx, New York. The Sponsor is Apollo Real Estate Advisors and Ramius Capital. The units are currently being sold and Moody's assumptions remain the same as at securitization. The current LTV on the pooled senior loan is 47.5% which is the same as at last review and at securitization. Moody's current shadow rating is Aa2 which is the same as at last review and at securitization. Additionally, there are junior trust loans secured by the property which are the rake classes N- LAF and O-LAF, which have current shadow ratings of A3 and Baa3, respectively. The shadow ratings on the rake classes are the same as at last review and at securitization. MOSAIC COMPANY: S&P Maintains 'BB+' Rating With Positive Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its issue ratings on The Mosaic Co.'s and its subsidiary Mosaic Global Holdings Inc.'s senior unsecured debt to 'BB+' and removed the ratings from CreditWatch where they had been placed with positive implications on Jan. 11, 2008, pending completion of S&P's recovery analysis. S&P also assigned '3' and '4' recovery ratings to these issues, respectively. S&P raised the senior unsecured ratings to reflect its expectations for improved recovery in a default scenario for these creditors following a reassessment of its recovery analysis and to recognize Mosaic's progress toward reducing the amount of senior secured debt in the capital structure. At the same time, S&P affirmed all its other ratings on Plymouth, Minnesota-based Mosaic, including the 'BB+' corporate credit rating. The outlook remains positive. "The ratings on Mosaic reflect its position as a leading global fertilizer producer and its improving financial profile," said Standard & Poor's credit analyst Cynthia Werneth. "Also incorporated in our credit risk assessment are industry cyclicality, operating risks associated with the company's mining operations, and a material control weakness that management is working to resolve." Mosaic is a leading global producer of phosphate and potash fertilizer and feed, with last-12-months sales of more than $7 billion. MOTOROLA INC: Moody's to Review Ratings on Turnaround Delays ------------------------------------------------------------ Moody's placed Motorola's ratings on review for downgrade on Jan. 24, 2008 after continued delays in turning around the handset business and the company's downward guidance for Q1 2008. Moody's continue to assess the likelihood of stabilization in the company's performance. The announcement by Motorola that they will be separating the business into two publicly traded entities may also have a material affect on the debt holders of the company in addition to the underlying challenges to the handset business. The ultimate effect on the debt holders will depend the final capital structure of that entity. In Moody's view, there is minimal protection for bondholders in the event of asset sales or transfers. Motorola is planning to separate the company into two separate public companies, one housing the handset business (Mobile Devices) and one housing the remaining network equipment, government & enterprise communications and broadband businesses (Broadband & Mobility Solutions). Motorola will attempt to separate the businesses through a tax free distribution with the timing of the separation, if successful, expected sometime in 2009. No details were provided by the company in terms of final legal and capital structure nor which company will be the "surviving" entity. Moody's will continue to monitor developments in the restructuring plans for the company. Motorola, Inc. with 2007 revenues of $36.6 billion, is one of the largest suppliers of consumer handsets and network equipment to the global wireless industry, a leading supplier of public sector communications systems as well as a leading supplier of equipment to the cable television industry. The company is headquartered in Schaumburg, Illinois. NASH FINCH: Moody's Affirms 'B2' Ratings on With Positive Outlook ----------------------------------------------------------------- Moody's Investors Service confirmed all ratings for Nash Finch (including it's corporate family rating at B2) with a positive outlook. The confirmation is based upon Moody's view that the company will be able to resolve an ongoing dispute with certain holders of its convertible notes on terms that will not materially impact its credit, the recent resolution on manageable terms of one shareholder lawsuit, as well as the company's improved operating performance. The positive outlook reflects Nash Finch's improved operating performance, as well as leverage levels and debt protection measures which are solid for its rating. The action concludes the review of Nash Finch's ratings which was initiated on Oct. 3, 2007. Ratings confirmed are: Ratings confirmed: -- Corporate family rating at B2 -- Probability of default rating at B2 -- $125 million senior secured revolving credit at B2 (LGD4, 52%) -- $175 million senior secured term loan B at B2 (LGD4, 52%) -- $322 million convertible senior subordinated notes due 2035 at Caa1 (LGD5, 90%) -- Outlook: Positive Moody's placed Nash Finch's ratings under review for possible downgrade following the issuance of default notice on Sept. 27, 2007 by certain hedge funds, claiming that the company was in breach of a covenant within its senior subordinated convertible notes due 2035. A Minnesota court issued a temporary restraining order enjoining the note holders from accelerating the debt, and extending the cure period until ten days following the court's final ruling on the merits of the case. Moody's believes that in an event the issue is resolved in the hedge funds' favor, the impact on the company's cash position would be neither immediate nor material. A cash payout -- were it to be necessary -- will not occur until 2013 at the earliest. Nash Finch's B2 corporate family rating reflects relatively low business and cash flow volatility, the company's modest size, adequate liquidity, and credit metrics which are strong for its rating. However, the ratings are constrained by the company's modest competitive position in the grocery retailing and distribution segments, and margin levels that are below its peers. The rating also considers Moody's concerns that competitive pressure may intensify in some of Nash Finch's segments due to inflation driven pricing and margin pressures as well as continued industry consolidation. Nash Finch, headquartered in Edina, Minnesota, operates in three segments: food distribution, military food distribution, and retail supermarkets. The company distributes food to retailers and military commissaries and it also operates 59 supermarkets in the upper Midwest regions. Revenue for the 12 months ending Dec. 29, 2007 was $4.5 billion. PACIFICNET INC: Involuntary Chapter 11 Case Summary --------------------------------------------------- Alleged Debtor: Pacificnet Inc. 23 Floor, Tower A, Time Court, No. 6 Shunguang Xili Chaoyang District Beijing, China Case Number: 08-10528 Involuntary Petition Date: March 22, 2008 Court: District of Delaware (Delaware) Petitioner's Counsel: Adam Friedman, Esq. Olshan Grundman, et al. 65 East 55th Street New York, NY 10022 -- and -- Robert S. Brady, Esq. Ian S. Fredericks, Esq. Young Conaway, et al. 1000 West Street, 17th Floor Wilmington, DE 19801 Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Iroquois Master Fund Ltd. convertible $2,465,452 641 Lexington Avenue debenture and New York, NY 10022 settlement agreement Whalehaven Capital Fund Ltd. convertible $958,335 14 Par La-ville Road, debenture and 3rd Floor, settlement Hamilton, Bermuda HM08 agreement Alpha Capital AG convertible $685,450 Attn: Alpha Capital Anstalt debenture and Pradafant 7 settlement 9490 Furstentums agreement Vaduz, Liechtenstein PCI GAMING: Moody's Holds B1 Ratings on High Margins and Cash Flow ------------------------------------------------------------------ Moody's Investors Service affirmed PCI Gaming Authority's B1 corporate family rating and B1 probability of default rating. Moody's also assigned a B1 (LGD-4, 51%) rating to PCI's $75 million senior secured term loan B due 2014 and $85 million senior secured delay draw term loan due 2013. The B1 (LGD-4, 54%) rating on the company's $185 million multi-draw senior secured term loan due 2012 was withdrawn. The rating outlook is stable. Proceeds from the term loans along with cash flow from the company's existing casinos will be used to fund the development and construction of the Wind Creek Atmore Casino and Hotel. This new hotel facility will replace PCI's existing facility in Atmore, Alabama. The existing facility will remain in operation until the new facility opens. The ratings consider PCI's high margin, cash flow from existing operations, low peak construction and pro forma leverage, and lack of meaningful competition in its immediate market area. Key credit concerns include PCI's small size and single market asset profile, and increasing competitive pressure from the rapidly improving post-Katrina Gulf Coast gaming market. The stable rating outlook considers the Bureau of Indian Affairs and National Indian Gaming Commission inquiries into the land status of PCI's Tallapoosa Entertainment Center, although no enforcement action has been taken or threatened, and there is no pending litigation. PCI Gaming Authority owns three Class II gaming facilities in Alabama: Creek Entertainment Center, Riverside Entertainment Center and Tallapoosa Entertainment Center. PCI Gaming is an unincorporated instrumentality of the The Poarch Band of Creek Indians and does not publicly disclose financial information. PHILLIP NMN: Case Summary & 17 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Phillip NMN Goode dba Emerald House, Inc. dba Good To Go Markets, Inc. dba Good To Go Management, Inc. P.O. Box 14134 Kansas City, MO 64152 Bankruptcy Case No.: 08-40981 Chapter 11 Petition Date: March 19, 2008 Court: Western District of Missouri (Kansas City) Judge: Arthur B. Federman Debtor's Counsel: Joanne B. Stutz, Esq. Evans & Mullinix, P.A. Suite 200 7225 Renner Road Shawnee, KS 66217 Tel: (913) 962-8700 Fax: (913) 962-8701 jbs@evans-mullinix.com Total Assets: $3,871,276 Total Debts: $3,147,401 Debtor's list of its 17 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rudy Langer Guarantor of Good $394,000 4939 Ward Parkway to Go Markets, Inc. Liberty, MO 64068 debt Saxon Mortgage Service 3328-30 Agnes - $98,228 4708 Mocantile Drive N South Benton, Lot 24, ($41,400 Fort Worth, TX 76137 Addl Lots 25, secured) County Jackson, MO Hillcrest Bank Loan to Good to Go $73,054 5800 East Bannister Road Markets, Inc. ($7,600 Kansas City, MO 64134 secured in part by secured) American Family adjusted premium policy; Debtor is guarantor Jackson County Collection Dept. Real estate taxes on $23,708 2501 SW Winterview Personal taxes on $6,596 vehicle Debtor no longer has possession 4437 Paseo real $2,524 estate taxes Beneficial Missouri Signature Loan $30,453 Sheila Lofton American Family Whole $10,000 Life Insurance Policy Internal Revenue Service Income Taxes $5,990 Willie & Shonte Simmons Loan $5,000 Fluesmeier Leasing Emerald House $4,250 business debt Aspire Credit Card Purchases $3,331 Thomas Shotell Loan $2,722 HSBC Card Services Credit Card Purchases $2,203 Robin Martinez Legal Fees $1,576 Cingular Wireless Phone Service $1,423 Dysart Taylor et al Legal Fees $1,385 Winterset Pak Comm. Homeowners dues $1,186 Sprint Services $1,001 PLASTECH ENGINEERED: Chrysler's Reliance on BBK's Advice Probed --------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates ask the U.S. District Court for the Eastern District of Michigan to determine whether the U.S. Bankruptcy Court for the Eastern District of Michigan erred in finding that Chrysler LLC relied on the advice of the BBK, the automaker's agent, regarding the Debtors' insolvency with respect to the purported termination of contracts between the Debtors and Chrysler. As reported in the Troubled Company Reporter on March 4, 2008, Chrysler LLC, Chrysler Motors Company LLC, and Chrysler Canada Inc., took an appeal before the District Court from the orders of Judge Shefferly that denied: i) the lifting of the automatic stay to allow Chrysler to regain possession of tooling located in Plastech Engineered Products Inc. and its debtor-affiliates' plants; and ii) issuance of a preliminary injunction in connection with the proposed recovery of tooling equipment. The Bankruptcy Court said that the Debtors needed to keep the tooling equipment to facilitate them in their reorganization. The balancing of interests favored Plastech, the Court said. Goldman Sachs, in its capacity as administrative and collateral agent for the Prepetition First Term Lien Loan Lenders, also asks the District Court to review whether Chrysler can demonstrate that the Court abused its discretion in denying Chrysler's motion to lift the automatic stay under Section 362(a) of the U.S. Bankruptcy Code. Goldman Sachs, in its capacity as administrative and collateral agent for the Prepetition First Term Lien Loan Lenders, also wants the District Court to find whether Chrysler can demonstrate that the Bankruptcy Court abused its discretion in denying Chrysler's motion to lift the automatic stay and in denying Chrysler's application for injunctive relief, where lifting the stay and granting the injunctive relief could potentially impair or otherwise prejudice the liens on substantially all of Plastech's assets, including the tooling that Chrysler seeks to possess, held by the first lien term agent, for the benefit of the first lien term lenders. Aside from Goldman Sachs and the Debtors, the Steering Committee of First Lien Term Loan Lenders in the Debtors' cases designated documents previously filed in the Bankruptcy Court to be included in the appeal process. The documents include the First Lien Term Lenders' prior request to intervene in the adversary proceeding filed by Chrysler against Plastech. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Court OKs Skadden Arps as Bankruptcy Counsel ----------------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Skadden, Arps, Slate, Meagher & Flom LLP as their bankruptcy counsel, nunc pro tunc to their bankruptcy filing. Skadden Arps is expected to: (a) advise the Debtors with respect to their powers and duties as debtors and debtors-in-possession in the continued management and operation of their businesses and properties; (b) attend meetings and negotiating with representatives of creditors and other parties-in-interest; and advise and consult on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; (c) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on behalf of the Debtors' estates, the defense of any actions commenced against those estates, negotiations concerning litigation in which the Debtors may be involved and objections to claims filed against the estates; (d) prepare, on behalf of the Debtors, motions, applications, answers, orders, reports and papers necessary to the administration of the estates; (e) prepare and negotiate on the Debtors' behalf plan of reorganization, disclosure statement, and all related agreements or documents, and take any necessary action on behalf of the Debtors to obtain confirmation of the reorganization plan; (f) advise the Debtors in connection with any sale of assets; (g) perform other necessary legal services and provide other necessary legal advice to the Debtors in connection with their Chapter 11 cases; and (h) appear before the Court, any appellate courts, and the U.S. Trustee and protecting the interests of the Debtors' estates before those courts and the U.S. Trustee. The Debtors proposed to pay Skadden Arps according to its customary hourly rates: Professionals Hourly Rate ------------- ----------- Partners & Of-counsel $680 - $950 Counsel & Associates $340 - $765 Legal Assistants $170 - $265 The Debtors will also reimburse Skadden Arps of its necessary out-of-pocket expenses. Gregg M. Galardi, Esq., a member at Skadden Arps, assured the Court that his firm does not represent any interest adverse to the Debtors and their estates, and is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Can Hire Jones Day as Special Counsel ---------------------------------------------------------- Plastech Engineered Products Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Jones Day as their special litigation and corporate counsel, nunc pro tunc to Feb. 1, 2008. Jones Day is expected to: (a) advise the Debtors and assist Skadden Arps in connection with postpetition financing and cash collateral arrangements and the negotiation, preparation and prosecuting of all necessary motions, orders and documentation relating to the postpetition financing and cash collateral arrangements; (b) advise the Debtors and assist Skadden Arps in connection with any amendment, waiver, modification and refinancing of some or all of the Debtors' prepetition credit facilities and the negotiation, preparation and prosecuting of all necessary motions, orders and documentation relating to those actions; (c) advise the Debtors and assist Skadden Arps in connection with any other related or ancillary financing matters; and (d) advise and represent the Debtors in connection with certain non-bankruptcy litigation that was pending as of the Petition Date. In exchange for Jones Day's services, the Debtors will pay the firm based on its applicable hourly rates: Professional Hourly Rates ------------ ------------ Partners $525 - $700 Associates $275 - $450 Robert J. Graves, Esq., a partner at Jones Day, assured the Court that his firm does not hold or represent any interest adverse to the Debtors or their estates. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Can Hire PricewaterhouseCoopers as Accountant ------------------------------------------------------------------ Plastech Engineered Products, Inc., and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ PricewaterhouseCoopers LLP, as their independent accountant and tax advisor. Pursuant to the engagement letters, PwC is expected to: -- perform audit of the consolidated financial statements at Dec. 31, 2007, and issue an audit report on the statements, subject to PwC's refusal to issue report for causes related to the management of the Debtors' business; -- provide advice and opinion related on tax matters, including research, discussion, preparation or memoranda related to these matters; and -- provide advice and assistance on matters involving the Internal Revenue Service and other tax authorities, as needed or requested. In exchange for the firm's services, the Debtors and PwC agreed to this compensation structure: (i) a $470,000 audit fee payable in installments upon receipt of invoices rendered: * $150,000 due in October 2007; * $100,000 due in December 2007; * $150,000 due in February 2008; and * $70,000 due in March 2008. (ii) payment of the firm's customary hourly rates for tax advisory services provided by the firm's professionals: Partner $465 Director $360 Senior Associate $200 Associate $165 The outstanding balance on the Audit Fee is $320,000. The Debtors have already paid the October 2007 invoice of $150,000 for the Audit Fee. David A. VanEgmond, a member of PwC, assured the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and holds no interest adverse to the Debtors or their estates in connection with the matters for which PWC will be employed. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRIME MORTGAGE: S&P Junks Class B-3's Rating on High Delinquencies ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the class B-2 and B-3 mortgage pass-through certificates from Prime Mortgage Trust 2004-CL1. At the same time, S&P removed the rating on class B-3 from CreditWatch with negative implications. Additionally, S&P affirmed its ratings on 75 classes from five Prime Mortgage Trust transactions, including series 2004-CL1. The lowered ratings reflect negative projected credit support due to high delinquencies and adverse collateral performance. Based on the dollar amount of loans currently in the delinquency pipeline for series 2004-CL1, losses are projected to further reduce credit enhancement levels. Classes B-2 and B-3 have $2.9 million and $1.1 million in current credit support, respectively, but the transaction currently has $8.316 million in severe delinquencies (90-plus days, foreclosures, and REOs). Cumulative realized losses represent 0.14% of the transaction's original pool balance. The affirmations are based on adequate credit enhancement to support the ratings at their current levels. Subordination provides credit support for these transactions. The underlying collateral consists of conventional, fully amortizing, 15- and 30-year, fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. Rating Lowered Prime Mortgage Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-CL1 B-2 BBB- A Rating Lowered and Removed From CreditWatch Negative Prime Mortgage Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2004-CL1 B-3 CCC B/Watch Neg Ratings Affirmed Prime Mortgage Trust Mortgage pass-through certificates Series Class Rating ------ ----- ------ 2003-2 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5 AAA 2003-2 I-A-6,I-A-7,I-A-8,I-A-9,I-A-10 AAA 2003-2 I-A-11,I-PO,II-A-1,II-A-2,II-PO AAA 2003-2 II-IO AAA 2003-2 B-1 AA 2003-2 B-2 A 2003-2 B-3 BBB 2003-2 B-4 BB 2003-2 B-5 B 2003-3 A-1,A-2,A-3,A-4,A-5,A-6,A-7 AAA 2003-3 A-8,A-9,PO AAA 2003-3 B-1 AA 2003-3 B-2 A 2003-3 B-3 BBB 2003-3 B-4 BB 2003-3 B-5 B 2004-1 I-A-1,I-A-2,I-A-3,I-A-4,I-A-5 AAA 2004-1 I-A-6,I-A-7,I-A-8,I-PO,II-A-1 AAA 2004-1 II-A-2,II-A-3,II-PO,II-X-1 AAA 2004-1 B-1 AA 2004-1 B-2 A 2004-1 B-3 BBB 2004-1 B-4 BB 2004-1 B-5 B 2004-CL1 I-A-1,I-A-2,I-A-3,I-A-4,I-X AAA 2004-CL1 I-PO,II-A-1,II-A-2,II-A-3,II-X AAA 2004-CL1 II-PO,III-A-1 AAA 2004-CL1 B-1 AA 2004-CL2 A,XB AAA 2004-CL2 B-1 AA 2004-CL2 B-2 A 2004-CL2 B-3 BBB 2004-CL2 B-4 B 2004-CL2 B-5 CCC PROTECTED VEHICLES: Public Excluded from Ch. 11 Conversion Hearing ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of South Carolina granted the request of Protected Vehicles Inc. to exclude the public at the hearing for the conversion of its Chapter 11 case to a Chapter 7 proceeding, Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on March 17, 2008, the Debtor had asked the Court to reject the request of creditors Four Rivers Peterbilt, Inc., Peterbilt of Savannah, Inc., Three-D Metal Works, Inc., and Charleston Aluminum, LLC, to convert the Debtor's Chapter 11 case to a Chapter 7 proceeding or as an alternative, to dismiss the Debtor's Chapter 11 case. Mr. Rochelle says that the Debtor told the Court that confidential details on the company will be revealed during a testimony. The Court decreed that the courtroom be closed to the public. 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 Exclusive Plan Filing Period Extended ---------------------------------------------------------- Quaker Fabric Corporation and its debtor-affiliates ask the Hon. Kevin Gross of the United States Bankruptcy Court for the District of Delaware to further extend their exclusive periods to: a) file a Chapter 11 plan until April 14, 2008; and b) solicit acceptances of that plan until June 11, 2008. Joseph M. Barry, Esq., at Young Conaway Stargartt & Taylor LLP in Wilmington, Delaware, says that the Debtors and the Official Committee of Unsecured Creditors are ironing out the last details of the proposed joint Chapter 11 plan of liquidation. The Debtors and the Committee, Mr. Barry says, were unable to finalize the proposed plan before the Debtors' initial exclusive rights to file a plan expired on Feb. 18, 2008. According to the Debtors' motion, most of their assets were sold in September 2007. The Debtors say that Atlantis Charter School purchased undeveloped 66 acres of real estate located in Fall River, Massachusetts for $2.6 million; E&E Co., Ltd., bought Tupelo Lee Industrial Park in Verona, Mississippi for $175,000; and Gordon Brothers Group LLC acquired substantially all of the Debtors' other assets for $27 million. The Debtors say to Judge Gross that they trimmed down their personnel to four since Aug. 16, 2007. A hearing has been set on April 15, 2008, at 11: a.m., before Judge Gross at 824 Market Street, 6th floor in Wilmington, Delaware, to consider the Debtors' request. Objections, if any, are due April 4, 2008, at 4:00 p.m. 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. QUALITY DISTRIBUTION: Impact of Losses Cues Moody's Stable Outlook ------------------------------------------------------------------ Moody's Investors Service changed the ratings outlook of Quality Distribution LLC to negative from stable and affirmed the B3 corporate family and probability of default ratings. The outlook change reflects somewhat lower than expected shipping volumes, and the impact of losses from several troubled affiliates that QD acquired in 2007. Moody's expects the external pressure on volumes will continue near term and will likely cause credit metrics below the B3 rating level. However, if shipping volumes increase and the company can effectively integrate Boasso (acquired in December 2007) while turning around unprofitable affiliates recently acquired, QD's operating margins and cash flow could be strong enough to stabilize the ratings. The affirmation reflects QD's leading position in the tank truck market and an adequate liquidity profile. The B3 CFR also reflects QD's high leverage, exposure to economic weakness, and the increasing uncertainty of affiliate profitability. Moody's notes that QD's ability to pass through higher fuel costs to its customers in surcharges helps insulate the company against the risk of prolonged, elevated fuel prices. As of Dec. 31, 2007 QD had cash of $9.7 million and borrowing availability of $52.1 million under its asset-backed revolving credit facility. A minimum fixed charge covenant test on the revolving credit facility would apply if availability were to decline below $20 million. The ratings that have been affirmed: -- Corporate family rating B3 -- Probability of default B3 -- $135 million senior unsecured floating rate notes due 2012 Caa1 LGD4, 58% -- $125 million senior subordinate 9% notes due 2010 Caa2 LGD5, 88%. Quality Distribution, LLC and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a leading transporter of bulk liquid and dry bulk chemicals. Apollo Management, L.P. owns approximately 52% of the common stock of Quality Distribution, Inc. QUEBECOR WORLD: Wants to Buy Bombardier Aircraft for $12 Million ---------------------------------------------------------------- Quebecor World Inc. seeks the authority of the U.S. Bankruptcy Court for the Southern District of New York to: (i) assume an unexpired lease agreement pursuant to which Debtor Quebecor Printing Aviation Inc. leases one Bombardier CL-600-2B16 aircraft and related engines and equipment from Wachovia Equipment Finance; (ii) exercise an early termination purchase option under the aircraft lease; and (iii) purchase the aircraft for $12,000,000. QPA pays quarterly "capital rent" of $379,350 plus certain amounts for "accrual rent" for the lease of the Aircraft. The five-year lease expires Feb. 6, 2009, but provides for a one- year extension, subject to approval of the lessor, Wachovia Equipment Finance, successor to First Union Commercial Corp. Quebecor World, Inc., guarantees QPA's obligations under the lease. The aircraft lease contains an early termination option pursuant to which, on the last day of any rent period after the first anniversary of the closing date under the aircraft lease, QPA may, upon 30 days' written notice to the Lessor, purchase the aircraft. According to Michael Canning, Esq., at Arnold & Porter LLP, in New York, the Debtors have determined that they can no longer justify maintaining an aircraft of this size and at this cost. The Debtors, however, have concluded that they could realize significant value from the exercise of the early termination option. The Debtors commissioned an appraisal of the Aircraft, and have received three good-faith offers or expressions of interest from potential purchasers, which support the appraised value of $20,450,000. Comparing the range of values set forth in both the appraisal and the purchase offers, the Debtors believe that they may realize substantial value from an exercise of the Early Termination Option, coupled with a subsequent sale of the Aircraft. Assuming a Purchase Option Amount of $12,000,000, the Debtors could realize a pre-tax profit of $8,000,000 upon a purchase and subsequent sale of the Aircraft for its appraised value, Mr. Canning tells the Court. Accordingly, the Debtors' rights under the Aircraft Lease represent a valuable asset of their bankruptcy estates that should be preserved for the benefit of creditors, Mr. Canning asserts. The Debtors are required to serve notice of their election to exercise the Early Termination Option on or before April 6, 2008, in order to have the right to exercise that option on May 6. Absent delivery of notice of the election by April 6, the next earliest date that the Debtors could exercise the Termination Option would be on or about August 6. Mr. Canning warns there is substantial risk that a delay of three months or more in exercising the Early Termination Option could cause one or more of the potential purchasers to withdraw their offers for the Aircraft. "Indeed, the market for this Aircraft is currently extremely strong, and there can be no assurance that the strength of this market will continue." The Debtors have made all payments of Base Rent due under the Aircraft Lease with the exception of the Base Rent payment due on Feb. 6, 2008. The amount of unpaid Base Rent for February 2008 is approximately $547,000, which is the amount required to cure monetary defaults under the Aircraft Lease pursuant to Section 365(b) of the Bankruptcy Code. Related Agreements The Debtors also seek the Court's authority to assume related subleases for the Aircraft. QPA subleases the Aircraft to QWI under an Aircraft Sublease Agreement dated as of February 6, 2004, and a related Short Form Sublease Agreement dated as of February 6, 2004. The term of the Aircraft Sublease is co-extensive with the term of the Aircraft Lease, and the amount of rent paid to QPA by QWI under the Aircraft Sublease is equal to the amount of Base Rent due under the Aircraft Lease. In addition, QWI is the lessor and ACASS Canada Ltd. is the lessee under an Aircraft Sub-Sublease Agreement dated as of Feb. 6, 2004, and a related Short Form Sub-Sublease Agreement dated as of Feb. 6, 2004. The Aircraft Sub-Sublease provides for an initial term of one year and includes provisions to extend the term for up to four additional one year periods. QWI and ACASS are also parties to a Management and Charter Agreement dated as of Feb. 6, 2004. The agreements constitute an arrangement under which QWI leases the Aircraft to ACASS, and ACASS provides all services necessary to operate and maintain the Aircraft, including for purposes of chartering the Aircraft to unrelated third-parties during periods of time when the Aircraft is not being used by QWI or the Debtors. In exchange, QWI pays ACASS a management fee and reimburses ACASS for operating expenses associated with the Aircraft. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. In Canada it has 17 facilities in five provinces, through which it offers a mix of printed products and related value-added services to the Canadian market and internationally. The company is an independent commercial printer in Europe with 19 facilities, operating in Austria, Belgium, Finland, France, Spain, Sweden, Switzerland and the United Kingdom. In March 2007, it sold its facility in Lille, France. Quebecor World (USA) Inc. is its wholly owned subsidiary. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The company has until May 20, 2008, to file a plan of reorganization in the Chapter 11 case. The Debtors' CCAA stay has been extended to May 12, 2008. (Quebecor World Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service assigned a Ba2 rating to the $400 million super priority senior secured revolving term loan facility of Quebecor World Inc. as a Debtor-in-Possession. The related $600 million super priority senior secured term loan was rated Ba3 (together, the DIP facilities). The RTL's better asset value coverage relative to the TL accounts for the ratings' differential. RAMP 2002-RS1: Adverse Performance Prompts S&P's Rating Downgrades ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on class M-1 from MESA Trust 2001-5 and its rating on class M-I-2 from RAMP Series 2002-RS1 Trust. At the same time, S&P lowered its rating on class M-I-1 from RAMP Series 2002-RS1 Trust and removed it from CreditWatch negative, and S&P affirmed its rating on class M-II-2 from the same transaction and removed it from CreditWatch negative. The lowered ratings reflect adverse collateral performance that has caused the deterioration of overcollateralization (O/C) and credit support derived from subordination. As of the February 2008 remittance period, cumulative losses were 13.20%, 3.48%, and 9.03% of the original pool balance for MESA Trust 2001-5, loan group 1 from RAMP 2002-RS1 Trust, and loan group 2 from RAMP 2002- RS1 Trust, respectively. Severe delinquencies (90-plus days, foreclosures, and REOs) were 14.45%, 9.92%, and 38.81% of the current pool balance for MESA Trust 2001-5, loan group 1 from RAMP 2002-RS1 Trust, and loan group 2 from RAMP Series 2002-RS1 Trust, respectively. O/C is at $0 for MESA Trust 2001-5 and loan group 1 from RAMP 2002-RS1 Trust, but loan group 2 from RAMP 2002-RS1 Trust has $18,880 of O/C. Subordination, O/C, and excess spread provide credit support for these two transactions. The collateral for these transactions primarily consists of scratch-and-dent (outside the guidelines and reperforming), adjustable- and fixed-rate mortgage loans secured by one- to four-family residential properties. Ratings Lowered MESA Trust 2001-5 Asset-backed certificates Rating ------ Series Class To From ------ ----- -- ---- 2001-5 M-1 BBB A RAMP Series 2002-RS1 Trust Mortgage asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-RS1 M-I-2 D CCC Rating Lowered and Removed From CreditWatch Negative RAMP Series 2002-RS1 Trust Mortgage asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-RS1 M-I-1 B BBB/Watch Neg Rating Affirmed and Removed From CreditWatch Negative RAMP Series 2002-RS1 Trust Mortgage asset-backed pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-RS1 M-II-2 BBB BBB/Watch Neg REED HARRISON: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtors: Reed Junior Harrison Kathleen Harrison dba Harrison Farms, Inc. 12442 Ervin McGarrah Road Lowell, AR 72745 Bankruptcy Case No.: 08-71051 Chapter 11 Petition Date: March 20, 2008 Court: Western District of Arkansas (Fayetteville) Judge: Ben T. Barry Debtors' Counsel: Theresa L. Pockrus, Esq. The Nixon Law Firm 2340 Green Acres Road, Suite 12 Fayetteville, AR 72703 Tel: (479)582-0020 theresa@nixonlaw.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtors' list of their 18 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Arkansas Department of Finance and Administration $130,000 Legal Counsel, RM 2380 P.O. box 1272 Little Rock, AR 72203-3628 Fuels & Supplies, Inc. $44,284 P.O. Box 806 Springdale, AR 72765-0806 NW Medical Center of Benton Co. $42,094 P.O. Box 849969 Dallas, TX 75284 Fielding Station & Grocery $35,249 Raquel Harrison $30,000 Green tree Financial $16,204 Bank of America $14,217 Sears $10,527 Kubota Credit Corp. $7,000 NWA Heart & Vascular Center $5,399 HC Processing Center $3,455 Euler Hermes $2,500 Reliable Poultry Supply $2,299 Arkansas Trailer MFG $1,344 Kenneth Todd $1,200 Johnson Truck & trailer of Lowell, Inc. $1,159 Springdale Auto Supply $1,067 Airgas Mid South, Inc. $887 RICHFX INC: Lack of Financing from Parent Spurs Bankruptcy Filing ----------------------------------------------------------------- RichFX Inc. filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of New York, explaining that parent RichFX Ltd., which was in receivership in Israel, could not fund its operations, Bill Rochelle of Bloomberg News reports citing court filings. Stephen Smith, RichFX's chief executive officer, stated that the Debtor was trying to sell its business for more than a year now, however, buyers were discouraged by an ongoing patent infringement litigation, Mr. Rochelle relates. The Debtor and Merchandising Advisor Corp., Mr. Rochelle says, has entered into an agreement, in which the Debtor would sell its digital-imaging assets to MAC, which also has an option to buy other assets for $650,000. RichFX will get $150,00 for the first bulk of assets at closing, and the Debtor's parent will get $430,000 at closing or within 60 days. MAC could pay up to more than $2.15 million. Mr. Rochelle informs that the Debtor has $365,000 in financing for the reorganization. Based in New York City, RichFX Inc. -- http://www.richfx.com/-- develops software to make online catalogs. RICHFX INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: RichFX Inc. 512 Seventh Avenue 16th Floor New York, NY 10018 Bankruptcy Case No.: 08-10942 Chapter 11 Petition Date: March 18, 2008 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Joseph Thomas Moldovan, Esq. Morrison Cohen LLP 909 Third Avenue New York, NY 10022-4731 Tel: (212) 735-8600 Fax: (212) 735-8708 bankruptcy@morrisoncohen.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alston & Bird LLP trade debt $199,219 P.O. Box 933124 Atlanta, GA 31193-3124 500-512 Seventh Avenue Ltd. trade debt $119,893 Partnerchip P.O. Box 60095 Charlotte, NC 28260-0095 DLA Piper US LLP trade debt $100,893 P.O. Box 64029 Baltimore, MD 21264-4029 Quality Technology Services trade debt $39,957 Techspeed Inc. trade debt $21,247 Iridio trade debt $21,106 Akamai Technologies trade debt $20,000 Omniture trade debt $19,522 Forrester Research Inc. trade debt $18,965 Dr. Mark Friedman Ltd. trade debt $18,140 Forward Technologies trade debt $16,728 Salesforce.com trade debt $14,384 Quebecor World trade debt $13,778 Gallivan, Gallivan & O'Melia trade debt $13,046 T-Williams Consulting LLC trade debt $12,500 Skyline Credit Ride Inc. trade debt $8,681 Duane Morris trade debt $8,190 CTVI Inc. trade debt $8,120 Vertical Web Media trade debt $7,105 Coral Group Inc. trade debt $6,807 ROUNDTABLE PROPERTIES: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Roundtable Properties, LLC 930 West Antelope Drive Layton, UT 84041 Bankruptcy Case No.: 08-21754 Chapter 11 Petition Date: March 24, 2008 Court: District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Anna W. Drake, Esq. (annadrake@att.net) 175 South Main Street, Suite 1250 Salt Lake City, UT 84111 Tel: (801) 328-9792 Fax: (801) 530-5955 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. SACRAMENTO-YOLO PORT: Moody's Lifts Rating on Revenue Bonds at Ba3 ------------------------------------------------------------------ Moody's upgraded to Ba3 from B2 the Sacramento-Yolo Port District Port Facilities Refunding and Improvement Revenue Bonds, Series 2001 outstanding in the amount of approximately $8.2 million. The outlook on the port's bonds is stable. The bonds are secured by net revenues of the port. The Ba3 rating and upgrade reflect the port's improved debt service coverage figures and cash position. The Ba3 rating also reflects the challenges the port continues to face from declining operating revenues and its ability to generate sufficient net revenues to meet is annual debt service coverage requirements without the one-time revenues attributable to land sales and other non-operating sources. The stable outlook reflects the port's improved liquidity position which provides a hedge against shortfalls in net revenues. Although the port's annual debt service coverage averaged 1.78 times from fiscal 2003 to 2007. Moody's notes that these figures, especially over the last three years, have been driven by non- operating revenues largely attributable to proceeds related to land sales. Without the real estate transaction revenues, the annual coverage figures averaged 0.38 times. In fiscal 2007, total net revenues provided 2.35 times coverage of annual debt service, although without the approximately $2 million in real estate transaction revenue, this figure drops to 0.94 times. Although operating revenues declined by 29.6%, O&M expenses decreased by 61.0%, to $3.7 million, a figure which is less than half of the port's average annual O&M expenses during the period 2000 - 2005 and thus contributes to the port's positive net income. Net working capital as a percentage of gross revenue improved in 2007 to 70.0% ($4.9 million). This figure represents a substantial improvement from the fiscal 2004 and 2005 figures, which were negative, and demonstrated continued improvement over the fiscal 2006 figure of 49.5%. Days cash on hand at the port in fiscal 2007 is also quite healthy at 652. Moody's notes that the restructuring of the port's operations and governance structure appear to have benefited the port. Effective Jan. 1, 2007, a major change in the governance of the district took place. The 2006 California State Legislature adopted AB 2939 that modified the boundaries of the district to include the City of West Sacramento and that portion of Yolo County that was a part of the original district. Both the City of Sacramento and Sacramento County were removed from the district boundaries. The port's Board of Commissioners was re-constituted consisting of four members from the West Sacramento City Council and one member appointed by the Yolo County Board of Supervisors. The board has implemented the goal of converting the port from an operating port to a landlord port. The port now has almost no employees (only about 8). Administration and finance activities for the port have been transferred to City of West Sacramento employees. In some cases, such as the port's finance director, port employees became city employees. The port incurred significant severance costs in 2006 as a result of the restructuring, with O&M expenses in that year increasing by 28.3% (while operating revenues declined by 19.0%). Financial results for the port are now reported as an enterprise fund within the City of West Sacramento's annual audit. Daily operations of the port have been, or are in the process of, being transferred from the former port employees to Stevedoring Services of America. This contributed to the steep decline in the port's O&M expenses in 2007. Moody's notes, however, that unlike previous years when the port provided a five year summary of the cargo handled by the port, metric revenue tonnage and other operating data for the fiscal years 2006 and 2007 were unavailable at this time. Management attributes this to the conversion to the management of port operations by SSA. Although the port no longer collects and maintains this information, officials have requested that SSA provide this data to the port. The port appears to be benefiting from a modest amount of new activity in the current fiscal year. The number of ship calls in 2008 (11) has already surpassed the total number of ship calls in 2007. This increased traffic has been due, in part, to the shipment of wind turbines to wind farm projects in Northern California. Recent new developments include the completion of A&A Concrete's $10.0 million facility last year which has increased the shipping arrivals in the current fiscal year. Additionally, Cemex, a cement firm, has a new facility under construction that can ship up to 1 million metric tons. The port has a minimum annual guarantee with Cemex which stipulates 400,000 tons in first year, then ramps up to 600,000 tons. The facility will also produce and ship concrete (along with BC aggregate) directly to customers. The port is also negotiating with another firm for the development of a 60 million gallon biodiesel facility which will ship its products out by barge, truck or rail. Additionally, officials continue to pursue the development of the port's Southport property, which would have a positive impact on the port's lease revenues. While there had been some growing resistance from some West Sacramento residents in recent years to further industrial expansion on port property, this seems to have moderated now that the city has oversight of the port. Under an agreement the Port of Oakland (senior lien revenue bonds rated A1) has agreed to assist the Port of Sacramento with management oversight, lobbying and marketing services. Oakland has already assisted in bringing in SSA to Sacramento. Future initiatives with Oakland may include the barging of containers from Oakland to Sacramento. A feasibility study for this initiative is in progress. Additionally, officials at the Port of Sacramento believe that Oakland will be able to provide assistance with technical and lobbying efforts for Sacramento's channel deepening project (from 30 feet to 35 feet). Ships currently cannot come in fully loaded, so a deeper channel will allow 75% of the world-wide fleet to access Sacramento. The total estimated cost is $80 million in the worst-case scenario. The port expects that $20 million of the cost would be born by the Port of Sacramento, half of which could be provided by State of California infrastructure bond proceeds, with the balance provided by the port in the form of rights of way and easements. The port may use the proceeds from land sales, if necessary, to finance its share of the project. Federal funds would finance the remaining $60 million, with the expectation that the project would begin in 2010, with completion expected in 2013. Moody's believes that the Port of Sacramento's ability to sustain and diversify its revenue stream, including an expansion of real estate development and maritime activities, will be key factors in future rating reviews. Legal Provisions are Standard Net revenues of the district are pledged for repayment of the bonds. The rate covenant is standard at 125% annual debt service on all parity debt service. Moody's notes, however, that failure to meet the port's rate covenant is not defined as an event of technical default. The additional bonds test is quite strong at 160%. The reserve requirement is standard, the lesser of 10% of bond proceeds, 125% average annual debt service, or maximum annual debt service. Outlook Moody's outlook on the Port of Sacramento's revenue bonds is stable. This outlook reflects Moody's expectation that the port will continue to maintain satisfactory cash reserves, thus providing a hedge against shortfalls in net revenues. Key Statistics -- Metric revenue tonnage growth 2000 - 2005: -2.4% (no data available for 2006 & 2007) -- Average annual debt service coverage (2003-2007): 1.78x (0.38x net of one-time revenues) Fiscal 2007 -- Operating ratio: 80.7% -- Annual debt service coverage: 2.36x (0.94x net of one-time revenues) -- Net working capital as % of gross revenue: 70.0% ($4.9 million) -- Net working capital as % of O&M: 132.7% ($4.9 million) -- Days cash on hand: 652 -- Debt ratio: 22.7% -- Payout of principal (10 years): 100% Customer Business Activities % of Total Annual Tonnage, FY 2007 -- A&A/Pan Pacific (Import Bag/Bulk Cement): 37% -- Archer Daniels Midland (Export Bagged Rice): 25% -- Farmers Rice (Export Bagged Rice): 12% -- Yara North America (Bulk/Bag Fertilizer): 12% -- NZ Lumber (Import Lumber, Stones & Coil): 8% SALANDER-O'REILLY: Has Until June 7 to File Chapter 11 Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended Salander-O'Reilly Galleries LLC's exclusive right to file a Chapter 11 plan until June 7, Bloomberg News reports. According to Bloomberg, the Debtor has until Aug. 6, 2008, the period within which it may solicit acceptances of that plan. As reported in the Troubled Company Reporter on March 5, 2008, the Debtor's lawyer stated in court filings February 29 that the gallery has been "significantly delayed" in obtaining copies of books and records that was taken by the Manhattan district attorney, and so can't file its formal lists of assets and debt. The Debtor said in papers filed with the Court that it "has made significant progress in stabilizing the case and bringing order to what had been a chaotic situation." About Salander-O'Reilly Established in 1976, New York-based Salander-O'Reilly Galleries LLC -- http://www.salander.com/-- exhibits and manages fine art from renaissance to contemporary. On Nov. 1, 2007, three creditors filed an involuntary chapter 7 petition against the gallery (Bankr. S.D.N.Y. Case Number 07-13476). The petitioners, Carol F. Cohen of Two Swans Farm, Cavallon Family LP, and Richard Ellenberg, disclosed total claims of more than $5 million. Amos Alter, Esq., at Troutman Sanders LLP and John Koegel, Esq., at The Koegel Group LLP represent the petitioners. On Nov. 9, 2007, the Debtor's case was converted to a chapter 11 proceeding (Bankr. S.D.N.Y. Case No. 07-30005). Alan D. Halperin, Esq., at Halperin Battaglia Raicht, LLP, represents the gallery. Salander-O'Reilly Galleries is owned by Lawrence B. Salander and his wife, Julie D. Salander, of Millbrook, New York. The couple also has membership interests in galleries including non-debtor entities, Renaissance Art Investors and Salander Decorative Arts LLC. The couple filed for chapter 11 protection on Nov. 2, 2007 (Bankr. S.D.N.Y. Case No. 07-36735). Douglas E. Spelfogel, Esq. and Richard J. Bernard, Esq. at Baker & Hostetler LLP and Susan P. Persichilli, Esq. at Buchanan Ingersoll PC represent the Debtors in their restructuring efforts. When they filed for bankruptcy, Mr. and Mrs. Salander listed assets and debts between $50 million and $100 million. Prior to bankruptcy, Mr. Salander resigned as Salander-O'Reilly Galleries' manager and turned over the control to Triax Capital Advisors LLC, an independent turnaround firm. SALLY HOLDINGS: S&P Changes Outlook to Positive; Holds 'B' Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Denton, Texas-based Sally Holdings LLC to positive from stable. S&P also affirmed Sally's ratings, including its 'B' corporate credit rating. "The outlook revision reflects Sally's improved credit metrics since its 2007 buyout transaction," explained Standard & Poor's credit analyst Jackie E. Oberoi. Specifically, the company has reduced leverage to about 6.5x from about 7x after its LBO, and interest coverage was about 1.8x for the 12 months ended Dec. 31, 2007. "The company's performance has improved despite the loss of exclusive distribution rights for L'Oreal USA professional products," said Ms. Oberoi, "as Sally was able to replace a substantial amount of lost sales and EBITDA nearly back to originally projected levels." SANDIA DEL SOL: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: Sandia del Sol Holdings, Inc. 47360 Sandia Creek Drive Temecula, CA 92590 Bankruptcy Case No.: 08-12955 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: March 20, 2008 Court: Central District Of California (Riverside) Judge: Meredith A. Jury Debtor's Counsel: Dennis Winters, Esq. 1820 East 17th Street Santa Ana, CA 92705 Tel: (714) 836-1381 winterslawfirm@cs.com Total Assets: $2,500,000 Total Debts: $3,985,000 Debtor's list of its Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ William Kipp Loan $1,735,000 47360 Sandia Creek Drive Temecula, CA 92590 SEA CONTAINERS: Wants Court to Reject $2 Bil. in Duplicate Claims ----------------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to disallow and expunge 13 claims, pursuant to Sections 105 and 502(b) of the U.S. Bankruptcy Code and Rule 3007-1 of the Local Rules of Bankruptcy Practice. Amended Claim Upon review of their books, the Debtors found that Claim No. 118, which was asserted by Neoglobo E Represantacoes LDA for $448, has been amended and superseded by subsequently-filed Claim No. 146. The Debtors note that Claim No. 146, which was asserted by Neoglobo for $1,020, remain the claimant's sole claim against the Debtors' bankruptcy estates. Duplicate Claims The Debtors also ask the Court to expunge 10 noteholder claims because they are duplicative of the claims filed by indenture trustee, HSBC Bank USA, National Association, pursuant to certain indentures. Under the Indentures and Rule 3003(c)(5) of the Federal Rules of Bankruptcy Procedure, HSBC is authorized to file proofs of claim on behalf of all holders of senior notes issued by Sea Containers Ltd. The Duplicate Noteholders Claims are: Duplicate Surviving Surviving Claimant Claim No. Claim No. Claim Amount -------- --------- --------- ------------ Felicia Herscovici 10 58 $151,715,468 Revocable Trust Fountain Capital 133 59 121,181,250 Management LLC Gardner, Jacob 4 59 121,181,250 Halan, Mark 51 60 107,506,250 Jones Ten/Com, Louis 7 59 121,181,250 M & Mary Elizabeth Rehner, Leonard 23 59 121,181,250 Reynolds, David F. 17 58 151,715,468 Reynolds, David F. 28 60 107,506,250 Reynolds, David F. 29 58 151,715,468 Weisbrich, Klaus 114 61 1,174,935,750 Improperly Registered Claims The Debtors object to Claim No. 143, asserted by Rene K. Griffin for $10,672, and Claim No. 144, asserted by Frank A. Stasko for $4,472, because the claims indicate that they were intended to be filed against All American Semiconductor, Inc., a wholly separate debtor entity, which has no relation whatsoever to the Debtors. The Debtors, hence, ask the Court to expunge the claims from the claims register. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Court gave the Debtors until April 15, 2008 to file a plan of reorganization. SENDTEC INC: Inks Contract with Convertible Debenture Holders ------------------------------------------------------------- SendTec Inc. executed an agreement with the holders of its Senior Secured Convertible Debentures, which are due on March 31, 2008. In connection with the recapitalization, the management team led by Paul Soltoff, SendTec's chairman and chief executive officer, has invested $875,000 in SendTec to purchase common stock at $0.12 per share. In addition, outside investors have purchased $325,000 of common stock at $0.12 per share. Mr. Soltoff and SendTec have also entered into an Amended and Restated Employment Agreement for a five year term. Under the terms of the agreement, all of the Senior Secured Convertible Debentures with an outstanding principal amount of $32,730,000 will be exchanged for shares of Series B Preferred Stock based on a stated value of $1,700 per share of preferred, which preferred is convertible into common stock at $0.17 per share. On or before the first closing on March 26, 2008, $18,361,700 of the original Debentures will be exchanged and the interest due on the Debentures through Nov. 16, 2007, will be paid. No further interest will accrue or be payable with respect to the remaining Debentures. The remaining $14,368,300 of Debentures will be exchanged for Series B Preferred Stock at a second closing conditioned upon, among other things, stockholder approval to increase authorized common stock of SendTec to 500 million shares, and the completion of a common stock offering with minimum aggregate gross proceeds to SendTec of $5 million of which $1,200,000 from management and outside investors has already been raised. If SendTec does not raise the full $5 million by the required date for the second closing, only $3,368,300 of the remaining $14,368,300 of the Debentures will be exchanged for Series B Preferred Stock at the second closing. The residual $11 million of Debentures will be exchanged for an equal aggregate principal amount of convertible debentures due three years from issuance, with no interest either payable or accrued, no principal payments due prior to maturity and no financial covenants. These new debentures will automatically convert into Series B Preferred Stock if SendTec raises minimum aggregate gross proceeds of $5 million from the sale of its common stock by the earlier of one year of the date from the second closing or Aug. 24, 2009, whichever occurs earlier. "I want to thank our debenture holders for restructuring SendTec's secured debt," Paul Soltoff Chairman and CEO stated. "I also want to thank all of our stakeholders, including our team of professionals, for their continued support of SendTec. Over 90% of the original secured debt was paid to the former corporate owners of SendTec and was not used to provide working capital or fund capital expenditures." "SendTec has sought to honor its Debenture obligations while navigating through numerous operational and legal obstacles which were a result of the original merger with RelationServe Media in October 2005," Mr. Soltoff added. "Through all of this we have continued to provide exceptional service to our clients and build strong relationships with our partners. With the completion of this recapitalization, and having resolved many of the issues associated with the Merger, we believe SendTec finally has a clear pathway to focus on growing its business. Our management team, subject matter expertise and proprietary technologies continue to expand SendTec's opportunities as a leading force in customer acquisition marketing and multichannel advertising." "I believe this recapitalization provides us with the stability necessary to execute on our business model and continue to grow the business and to provide the service our clients have come to expect," Mr. Soltoff concluded. "Our clients include over 90 global advertisers, major brands and national direct response advertisers." About SendTec Inc. Headquartered in St. Petersburg, Florida, SendTec Inc. (OTC BB: SNDN) -- http://www.sendtec.com/-- is a holding company organized for the purpose of acquiring, owning, and managing various marketing and advertising businesses, primarily involving the Internet. The direct response marketing services business of the company's wholly-owned subsidiary, SendTec Acquisition Corp., has been its sole line of business. Defaults on Senior Securities As reported in the Troubled Company Reporter on Nov. 22, 2007, the company disclosed in its Form 10-QSB that as of as of Sept. 30, 2007, it was required to have a minimum cash balance of $3,500,000 pursuant to the financial covenants the company is required to maintain under the modified terms of the Securities Purchase Agreement with the Debenture holders. As of Sept. 30, 2007, the company was not in compliance with this requirement. In addition, the company did not make a required interest payment of approximately $502,000 due on Nov. 1, 2007. The company's failure to meet the financial covenants and to make interest payments are events of default under the Debentures. Subsequent to Nov. 1, 2007 the company and Debenture holders representing more than 75%, the required minimum, of the outstanding principal amount of the Debentures, executed a Letter Agreement, which among other things, provides that during the period from the signing of the Letter Agreement until the close of business on Nov. 16, 2007, the Debenture holders forbear their right to declare the company in default under the Debentures and the Securities Purchase Agreement and their right to demand acceleration of the Debentures. Bankruptcy Warning If the company is not able to restructure the Debentures or negotiate a further forbearance, holders of 75% of the principal amount of the Debentures may elect to declare the company in default of the Debentures. If the company is declared in default, this would have a material adverse effect on the business, operating results, and financial condition. In such event, the company may be forced to restructure, file for bankruptcy, sell assets, or cease operations, any of which would put the company, its investors and the value of its common stock, at significant risk. SI INTERNATIONAL: Board OKs Increase of Stock Repurchase Program ---------------------------------------------------------------- SI International Inc.'s board of directors authorized the expansion of SI International's stock repurchase program for the repurchase of up to an additional 700,000 shares of its common stock. This amount is in addition to the board's previous 300,000 share authorization, bringing the total number of shares of common stock authorized for repurchase to 1 million. The aggregate maximum dollar amount to be spent on the repurchase program is $25 million. The stock repurchase program will be funded from available cash and the company's existing credit facility. The timing and volume of any purchases will be guided by management's assessment of market conditions, securities law limitations, the number of shares to common stock outstanding and alternative uses for cash resources. Shares may be purchased in the open market, including through block purchases, or through privately negotiated transactions. The stock repurchase program may be suspended or discontinued at any time and without prior notice. "We are always looking for the best way to deploy our available capital to enhance shareholder value," Brad Antle, president and chief executive officer of SI International, said. "We believe that a stock repurchase program is an attractive option." "The stock repurchase program reaffirms the confidence we have in our long- term growth and profitability, and demonstrates our commitment to enhance shareholder value," Mr. Antle commented. "Our strong balance sheet and cash flow from operations allow us to invest in our business, pursue strategic opportunities for growth, and implement our stock repurchase program." About SI International Based in Reston, Virginia, SI International Inc. (Nasdaq:SINT) -- http://www.si-intl.com/-- is a provider of information technology and network solutions to the federal government. The company is a member of the Russell 2000 index, has revenues of $462 million for the twelve months ended Dec. 30, 2006. * * * On January, 2008, Standard and Poor's assigned its 'B+' rating on SI International's long term foreign and local issuer credit rating, which was given a positive outlook by the rating agency on June, 2007. This rating action still holds to date. SIRVA INC: Committee Wants to Hire BDO Seidman as Accountant ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Sirva Inc. and its debtor-affiliates asks the Court for authority to retain BDO Seidman, LLP as its accountant and financial advisor, nunc pro tunc to February 23, 2008. According to the Committee, BDO has extensive familiarity with the accounting practices in insolvency matters in the Bankruptcy Courts in the Southern District of New York, as well as in other jurisdictions. The Committee will employ BDO to ensure that its interests are adequately represented in an efficient and effective manner. BDO's professional services will include: (a) analysis of the Debtors' prepetition and postpetition financial operations, as necessary; (b) analysis of the Debtors' business plans, cash flow projections, selling and general administrative structure, among others, in order to advise the Committee on the reorganization process; (c) analysis of the financial ramifications of any proposed transactions by the Debtors; (d) claims analysis; (e) verification of material assets and liabilities and their values, as necessary; (f) assistance to the Committee in its review of the Debtors' monthly statements of operations; (g) assistance in the evaluation of the Debtors' cash flow and other projections; (h) scrutiny of postpetition cash disbursements on an on-going basis; (i) analysis of transactions with insiders, related companies, or the Debtors' financing institutions; (j) analysis of the Debtors' real property interests; (k) attendance of meetings and conferences with creditors; (l) preparation of reports; and (m) other necessary services. BDO will work closely with Pachulski Stang Ziehl & Jones, the Committee's proposed counsel, and Trenwith Securities LLC, the Committee's proposed investment banker. BDO will be paid on an hourly basis, and will be reimbursed of actual, necessary expenses and other charges incurred. BDO's standard hourly rates are: Position Hourly Rate -------- ----------- Partners $400 - $850 Directors and Senior Managers $300 - $600 Managers $225 - $375 Seniors $175 - $275 Staff $125 - $200 William K. Lenhart, a partner at BDO, assures the Court that his firm does not hold any interest adverse to the Debtors, their estates, their creditors, and the Committee. BDO is a "disinterested person" as that term is applied in Section 101(14) of the Bankruptcy Code. 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. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Committee et al. Object to Request for Class 5 Panel --------------------------------------------------------------- The Official Committee of Unsecured Creditors asks Judge James M. Peck to deny Triple Net Investments IX, LP's proposal to appoint an Official Committee of Class Five Unsecured Creditors, and to stay all proceedings pending the appointment of the Class 5 Committee in the bankruptcy case of Sirva Inc. and its debtor- affiliates. As reported in 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. On Triple Net's behalf, 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. Committee, et al. Object Ilan D. Scharf, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, states that there is no basis for Triple Net to assume that the Committee will not vigorously advocate the position of the Class 5 creditors. Class 5 is adequately represented, as three out of the five Committee members are Class 5 claimants. Moreover, Mr. Scharf adds that there is no basis in Triple Net's suggestion that the Committee has taken positions that do not further the interests of Class 5 creditors. In fact, the Committee entered into certain settlements because it believed those were in the best interests of its constituents, including Class 5 creditors. He notes that the settlements provided substantial benefits to Class 5 creditors. Mr. Scharf says that the Committee and Triple Net disagree on the proper balancing of the litigation risks against the benefits of compromise. However, the difference in opinion is merely a difference in opinion, and the Committee stands by the judgments it had made in the Debtors' Chapter 11 cases. Mr. Scharf adds that the nature of the Debtors' cases militates in favor of a single committee, since the Debtors' proposed Plan presents issues that could place creditors at odds with one another. He adds that a single Committee is well-suited to negotiate and settle inter-creditor constituency disputes, and allow all creditors to pursue the common goal of maximizing recoveries. It is apparent that the standing of both Class 4 and Class 5 claimants are represented on the Committee, Mr. Scharf points out. He submits that Triple Net cannot carry its burden in respect of its requested removal of the Class 4 creditors from the Committee, or the establishment of an additional committee. Beltmann Group, Inc., one of the Debtors' largest unsecured creditors, states that Triple Net's request is not supported by the facts or the law, and must be rejected by the Court. Beltmann believes that the vast majority of unsecured creditors are from Class 4, and not Class 5 as Triple Net suggests. Thus, to be truly representative, the Committee must include Class 4 claimants. Additionally, Beltmann contends that it is owed millions of dollars in unsecured debt, and faces very significant exposure in the Debtors' Chapter 11 cases; it has an important economic stake in the plan process. It asserts that, contrary to Triple Net's assertions, the plan process does not conclude for Beltmann with Debtor promises of future payment. Rather, it concludes at the confirmation of the Plan. Beltmann also objects to Triple Net's contention that the Committee is not capable of acquitting its fiduciary duties. The Committee is comprised of creditors with disparate interests and viewpoints, but has labored hard to take appropriately balanced positions and reflect the concerns of all unsecured creditors. Similarly, the Debtors object to the appointment of a Class 5 Committee and a stay of the proceedings, stating that under Section 1102(a)(2) of the Bankruptcy Code, Triple Net has failed to meet the required standard to appoint an additional committee. The Debtors cite In re Enron Corp., 279 B.R. 671, 685 (Bankr. S.D.N.Y. 2002), noting that the appointment of an additional official committee is an "extraordinary remedy." According to Marc Kieselstein, Esq., at Kirkland & Ellis LLP in Chicago, Illinois, Triple Net has failed to prove that the interests of Class 5 creditors are not adequately represented by the Committee. Triple Net Reacts to Committee's Objection The Committee raises no new legal arguments and cites to no novel legal authority, apart from what Diana G. Adams, the United States Trustee for Region 2, has already submitted in her objection, Triple Net counters. On Triple Net's behalf, Robert E. Nies, Esq., at Wolff & Samson PC, in New York, argues that the Committee fails to address two conflict concerns: (i) the fiduciary duty conundrum of Committee Members representing adverse interests of two different classes of unsecured creditors under the Plan; and (ii) the Committee's counsel having to represent adverse interests in the same case, in violation of every known ethical consideration. Mr. Nies maintains that Class 5 is in conflict with every class that is currently to be paid under the Plan, including Class 4 and the Debtors' Prepetition Lenders. He adds that Class 5 Committee Members also have a fiduciary duty to Class 4 Members, resulting in that Class 5, including Triple Net, are denied zealous, uncompromised representation from a Committee and Committee's counsel. 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. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: IFL et al. Object to Adequacy of Disclosure Statement ---------------------------------------------------------------- IFL Industries, Inc., also known as Airquest Industries, Inc., and Wiliam D. Olson, object to the adequacy of the Disclosure Statement to the Debtors' Prepackaged Joint Plan of Reorganization. IFL Industries and Mr. Olson have a $15,000,000 unliquidated non- dischargeable claim against the Debtors, in connection with a proceeding pending in the U.S. District Court for the Northern District of Illinois, Eastern Division, styled IFL Industries, Inc., also known as Airquest Industries, Inc., and Wiliam D. Olson v. SIRVA, Inc., formerly known as Allied Worldwide, Allied Van Lines, Inc., North American van Lines, Inc., Global Van Lines, Inc., Unigroup, Inc., Mayflower Transit, LLC, and Atlas Van Lines, Inc. IFL Industries tells the Court that it will file a supplement to its objection following the close of discovery, pursuant to the supplemental deadline set by the Debtors on April 11, 2008. As reported in the Troubled Company Reporter on March 17, 2008 several creditors filed objections to the Prepackaged Joint Plan of Reorganization and accompanying Disclosure Statement of the Debtors. The creditors filing objections are: a. Triple Net Investments IX, LP, b. Maricopa County, c. Landerhaven II LLC, d. Robert Noia, e. VAR Resources, f. Visteon Corp., g. Donald Beach, et al., h. Owner Operator Independent Drivers Association, i. 360networks Committee, j. The Official Committee of Unsecured Creditors As reported in the TCR on March 17, 2008 the Court rescheduled the combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization to April 18, 2008, at 10:00 a.m. (ET). The hearing was initially scheduled for March 21. Objections to the Disclosure Statement, the prepetition solicitation, or the confirmation of the Plan, were due March 11, 2008, at 5:00 p.m. (ET). Parties who have filed timely objections on or before the Objection Deadline may supplement their objections no later than April 11, 5:00 p.m. (ET). Prepackaged Plan Together with its bankruptcy petition, the Company delivered to the New York Court a plan of reorganization and accompanying disclosure statement. The salient terms of the Plan are: * New Credit Facility. SIRVA's proposed debtor-in-possession credit facility will convert into its new credit facility. Up to 25 percent of common stock in Reorganized SIRVA will be made available at the discretion of the agent for the DIP Facility as a fee to the DIP Facility Lenders upon conversion into the new credit facility. Any portion of the new common stock not so used will be distributed on a pro rata basis to holders of Class 1 Claims. * Class 1 Prepetition Facility Claims. A portion of the prepetition facility will be reinstated as Reorganized SIRVA's second lien credit facility. Holders of Class 1 Prepetition Facility Claims will receive a pro rata share of Reorganized SIRVA's Second Lien Credit Facility and receive a pro rata share of not less than 75% of new common stock in Reorganized SIRVA. * Trade Creditors. SIRVA expects to continue normal operations during its Chapter 11 cases. The Plan contemplates payment in full of claims held by trade creditors and customers in accordance with existing business terms. SIRVA have sought Court authority to continue making those payments in the ordinary course of business during the pendency of the Chapter 11 cases. * Existing Equity. All existing equity in SIRVA, Inc. would be cancelled for no consideration. A full-text copy of the SIRVA Plan of Reorganization is available for free at: http://bankrupt.com/misc/SirvaChapter11Plan.pdf A full-text copy of the Disclosure Statement explaining the SIRVA Plan is available for free at: http://bankrupt.com/misc/SirvaDisclosureStatement.pdf 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. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Triple Net Objects to Confirmation Discovery Schedule ---------------------------------------------------------------- Triple Net Investments IX, LP, opposes the request of Sirva Inc. and its debtor-affiliates to schedule certain dates related to the hearing for the confirmation of the Debtors' Proposed Plan of Reorganization, and for a protective order for confirmation discovery. Triple Net holds a claim against Debtor North American Van Lines, Inc., for US$2,021,546. As reported by the Troubled Company Reporter on March 17, 2008 the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York to (i) schedule certain dates related to the hearing for the confirmation of the Debtors' Proposed Plan of Reorganization, and (ii) enter a protective order for confirmation discovery, since much of the information sought in discovery related to the Debtors' confirmation efforts may consist of confidential and sensitive information. On Triple Net's behalf, Robert E. Nies, Esq., at Wolff & Samson PC, in New York, tells Judge James M. Peck that the proposed schedule allocates no time for motion practice, which the Court is wary of allowing on an emergent basis absent a real emergency. The proposed schedule also has other problems: -- there are no deadlines by which written discovery is due or subpoenas are returnable to third parties, which requires at least 10 days' notice; -- expert reports are due before factual discovery is completed, thus depriving the expert of the information needed for analysis and to form expert opinions; and -- no provision is made for sufficient time to brief legal issues for confirmation, that first requires the completion of factual discovery. Moreover, Mr. Nies contends, the Debtors propose to litigate within three weeks the discovery needed to analyze and contest a complicated bankruptcy involving 61 affiliated Debtors, which is inadequate under any reasonable standard of due process. Accordingly, the Court should deny the Debtors' request, Mr. Nies asserts. Court Sets Plan-Related Discovery Schedule Judge Peck rules that all parties who filed confirmation objections pursuant to the previous March 11, 2008, deadline may supplement their objection on or before April 11. The Court also directs the Debtors to file a memorandum in support of confirmation of their Plan on April 15, 2008. The hearing to consider confirmation of the Plan will be on April 18, at 10:00 a.m. Moreover, Judge Peck fixed the deadlines for fact and expert discovery with respect to the Plan: March 24, 2008 First day for depositions March 25, 2008 Last day to serve written discovery March 25, 2008 Last day to serve third party subpoenas April 4, 2008 Last to complete document productions April 4, 2008 Expert reports are due April 10, 2008 Powerpoint-level rebuttal expert reports April 16, 2008 Close of all discovery The Court also approved the terms of the Protective Order, a copy of which is available for free at: http://bankrupt.com/misc/SIRVA_ProtectiveOrder.pdf 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. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Panel Has Until April 11 to Object to DIP Financing -------------------------------------------------------------- Sirva Inc., its debtor-affiliates, the Official Committee of Unsecured Creditors, and their Prepetition Credit Facility Agent have agreed to extend April 11, 2008, the Committee's deadline to object to any final order approving the Debtors' request to obtain postpetition secured financing. The Committee may object to: (a) whether the Prepetition Credit Facility Obligations constitute the legal, valid and binding obligations of certain Debtors; (b) the perfection of the liens and security interests of the Prepetition Credit Facility Agent and Prepetition Credit Facility Lenders; (c) any release of defenses, pursuant to the Final DIP Order, that the Debtors may have, other than defenses to the validity and enforceability of the Prepetition Credit Facility Obligations; and (d) any stipulation in the Final DIP Order that the liens and security interests of the Prepetition Agent and the Prepetition Lenders are senior to prior perfected liens and security interests of third parties, as of the Petition Date. Judge James M. Peck has approved the Stipulation. As reported by the Troubled Company Reporter on March 5, 2008, the U.S. Bankruptcy Court for the Southern District of New York approved, on a final basis, the debtor-in-possession credit facility of the Debtors, allowing them to obtain up to $150,000,000 of postpetition financing, to provide for the Debtors' working capital, and for other general corporate purposes. The Court authorized the Debtors to enter into the Credit and Guarantee Agreement, dated as of February 6, 2008, with JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Securities Inc., as arranger. Without prejudice to the rights of any other party, the Debtors stated that as of the Petition Date, they were indebted and liable to prepetition lenders for $511,000,000 in loans under a $600,000,000 Credit Agreement, dated as of December 1, 2003. Those loans include the 2008 Revolving Credit Loans, 2008 Swing Line Loans, 2008 Reimbursement Obligations and the New Term Loans. The Debtors submitted that their obligations pursuant to the Prepetition Credit Facility constitute legal, valid, and binding obligations, and they release any defenses against the Prepetition Lenders. The liens and security interests granted to JPMCB, as prepetition credit facility agent, are valid, perfected, enforceable, and first priority, subject to permitted exceptions under the Prepetition Credit Facility. Those liens are subordinate only to liens and security interests granted to secure the DIP Financing, as well as valid, perfected, and unavoidable liens under the prepetition loan agreement, to the extent that those liens are senior to JPMCB's liens on the prepetition collateral. Except to the extent set forth in respect of a "carve-out," the DIP Obligations will constitute allowed senior administrative claims against the Debtors, with priority over all administrative expenses, adequate protection claims and other claims, whether those expenses or claims may become secured. The Superpriority Claims will be payable from, and have recourse to, the prepetition and postpetition property of the Debtors, excluding the avoidance actions and their proceeds. The Carve-Out is: (i) all fees required to be paid to the Clerk of the Court and to the Office of the U.S. Trustee, plus interest at the statutory rate; (ii) up to $250,000 fees and expenses incurred by a trustee; and (iii) following a notice by the DIP Agent in the event of a default under the DIP Agreement, the payment of accrued and unpaid professional fees and expenses not exceeding $5,000,000, incurred by the Debtors and any statutory committee appointed in the bankruptcy cases, and allowed by the Court. As security for the DIP Obligations, certain security interests and liens are granted to the DIP Agent, for its benefit and the benefit of the DIP Lenders, subject only to the Carve-Out. A copy of the Debtors' Final DIP Order is available for free at: http://bankrupt.com/misc/SirvaFinalDIPOrder.pdf 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. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SMIDTH & CO: Case Summary & Five Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Smidth & Co. dba FDBA F.L. Smidth & Co. 2040 Avenue C Bethlehem, PA 18017 Bankruptcy Case No.: 08-10516 Chapter 11 Petition Date: March 19, 2008 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtor's Counsel: Cross & Simon, LLC Christopher Page Simon, Esq. Kevin Scott Mann, Esq. 913 North Market Street 11th Floor Wilmington, DE 19899 Tel: (302) 777-4200 Fax: (302) 777-4224 csimon@crosslaw.com kmann@crosslaw.com Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million Debtor's list of its Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ FL Smidth, Inc. Reimbursement of $656,065 2040 Avenue C Medical & Pension Betlehem, PA 18017 Benefit Payments Delaware Division of Revenue Franchise Tax $150 Attn: Bankruptcy Administrator 820 N. French Street - 8th Floor Wilmington, DE 19801 Dyhrman, Richard Litigation Claim Undetermined c/o Levn, Simes, Kaiser & Gornick Attn: Anna Costa 44 Montgomery Street, 36th Floor San Francisco, CA 94104 NJ Department of Environmental Potential Undetermined Protection Environmental Remediation Liability Smith, Bernard & Alberta Litigation Claim Undetermined SOUTH CAMPUS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: South Campus Athletic Club Inc. P.O. Box 1789 1475 East Nelson Road Moses Lake, WA 98837 Bankruptcy Case No.: 08-01028 Type of Business: Health Clubs Chapter 11 Petition Date: March 19, 2008 Court: Eastern District of Washington (Spokane/Yakima) Judge: Frank L Kurtz Debtor's Counsel: Paul Williams, Esq. Carlson Boyd & Bailey PLLC 230 South 2nd Street Suite 202 Yakima, WA 98901 Tel: 509-834-6611 Fax: 509-834-6610 dsiebol@cbblawfirm.com Total Assets: $2,315,045 Total Debts: $936,807 Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Grant County Treasurer property taxes $30,000 P.O. Box 37 Ephrata, WA 98823 Internal Revenue Service taxes owing $22,908 P.O. Box 21126 Philadelphia, PA 19114 Ken Buley deed of trust $20,000 P.O. Box 68 Prescott, WA 99348 Department of Revenue sales and $19,500 use taxes Velikanje Moore & Shore PS attorney's fees $9,066 Ries Law Firm attorney's fees $4,923 Skaug Brothers judgment $3,402 Stay Tan West judgment $3,098 Commercial Investigations Inc. services rendered $1,755 Broadcast Music Inc. judgment $1,578 Pioneer Muffler services rendered $1,573 Steinberg & Steinberg assigned $1,487 collection SESAC music license $935 account Armada collection of $871 accounts turned over Moses Lake Christian Academy $utilities share $765 ASCAP dues for use $482 of music Polhamus Heating & A/C Inc. services rendered $449 YCCS collection of $206 accounts turned over Quincy Heating & Air Condition services rendered $106 Horizon Electric Inc. electrical $97 services SPARTA COMMERCIAL: Jan. 31 Balance Sheet Upside-Down by $3,586,038 ------------------------------------------------------------------ Sparta Commercial Services Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $5,422,362 in total assets and $9,008,400 in total liabilities, resulting in a $3,586,038 total stockholders' deficit. The company reported a net loss of $798,028 on revenue of $288,605 for the third quarter ended Jan. 31, 2008, compared with a net loss of $932,387 on revenue of $214,642 for the same period ended Jan. 31, 2007. The $134,359 or 14.4% decrease in net loss was attributable primarily to a 34% increase in revenue and a 25% decrease in operating expenses partially off set by a 140% increase in interest expense and financing costs. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?2991 Going Concern Doubt RBSM LLP, in New York, expressed substantial doubt about Sparta Commercial Services Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended April 30, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations. About Sparta Commercial Headquartered in New York City, Sparta Commercial Services, Inc. (OTC BB: SRCO.OB) -- http://www.spartacommercial.com/-- is a nationwide, independent financial services company in the United States exclusively dedicated to the powersports industry. SPYRUS INC: Gets Initial Approval to Use $2 Million DIP Facility ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized SPYRUS Inc. and its debtor-affiliates to obtain, on an interim basis, up to $2 million of debtor-in-possession financing from John D. Miller as DIP agent, and other Series B Preferred holders. The DIP loan is secured by liens on property of the Debtors' estates. The Court will hold a hearing to consider final approval of the DIP Motion on March 27, 2008, at 2:00 p.m. in Wilmington. As reported in the Troubled Company Reporter on March 18, 2008, 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 told 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 The Bayard, P.A., at Wilmington, Delaware, said 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 said. The Debtors agreed to pay a $30,000 commitment fee, $30,000 exit fee and 10% backstop fee. 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. STATE STREET: Paying $0.23/Share Quarterly Dividend on April 15 --------------------------------------------------------------- State Street Corporation declared a quarterly dividend of $0.23 per share, payable April 15, 2008, to stockholders of record as of April 1, 2008. State Street's quarterly dividend rate is 10% higher than a year ago. Headquartered in Boston, Massachusetts, State Street Corporation (NYSE: STT) -- http://www.statestreet.com/-- provides financial services to institutional investors including investment servicing, investment management and investment research and trading. With $15.1 trillion in assets under custody and $2.0 trillion in assets under management at Sept. 30, 2007, State Street operates in 26 countries and more than 100 geographic markets worldwide. * * * As reported in the Troubled Company Reporter on Jan. 7, 2008, Fitch Ratings revised the Rating Outlook on State Street Corporation to negative from stable and has downgraded the bank's individual rating to `B' from `A/B.' STRUCTURED ASSET: Fitch Holds Low-B Ratings on 13 Certificates -------------------------------------------------------------- Fitch has taken rating actions on these Structured Asset Securities Corporation mortgage pass-through certificates: Series 1996-4: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 affirmed at 'BB'; -- Class B4 remains at 'C/DR3'. Series 1998-11 Pool 1: -- Class A affirmed at 'AAA'; -- Class 1B1 affirmed at 'AAA'; -- Class 1B2 affirmed at 'A'; -- Class 1B3 remains at 'CCC/DR2'; -- Class 1B4 remains at 'C/DR6'. Series 1998-11 Pool 2: -- Class A affirmed at 'AAA'; -- Class 2B1 affirmed at 'AAA'; -- Class 2B2 affirmed at 'AAA'; -- Class 2B3 affirmed at 'AA'; -- Class 2B4 affirmed at 'BBB+'; -- Class 2B5 affirmed at 'BB'. Series 1999-ALS3: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AAA'; -- Class B3 affirmed at 'AA'. Series 2001-2: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 downgraded from 'CCC/DR2' to 'CC/DR3'. -- Class B4 remains at 'C/DR6'. Series 2001-9: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'A'; -- Class B3 downgraded from 'CCC/DR2' to 'CC/DR3'; -- Class B4 remains at 'C/DR5'. Series 2001-11: -- Class A affirmed at 'AAA'. Series 2001-16H: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'. -- Class B5 downgraded from 'CCC/DR2' to 'CC/DR3'; Series 2002-5A: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AAA'; -- Class B2 affirmed at 'AA'; -- Class B3 affirmed at 'A+'; -- Class B4 rated 'BBB+', is placed on Rating Watch Negative; -- Class B5 downgraded from 'BB' to 'B'. Series 2002-8A Pool 7: -- Class A affirmed at 'AAA'; -- Class B1-II affirmed at 'AA+'; -- Class B3-II affirmed at 'BBB+'; -- Class B4-II affirmed at 'BB+'; -- Class B5-II affirmed at 'BB'; Series 2002-27A: -- Class A affirmed at 'AAA'; Series 2002-AL1: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 downgraded from 'B' to 'CCC/DR3'. Series 2003-4: -- Class A affirmed at 'AAA'; Series 2003-14 Pools 1 & 2: -- Class A affirmed at 'AAA'; Series 2003-14 Pool 3: -- Class A affirmed at 'AAA'; Series 2003-16: -- Class A affirmed at 'AAA'; Series 2003-21 Group 1: -- Class A affirmed at 'AAA'; Series 2003-21 Group 2: -- Class A affirmed at 'AAA'; Series 2003-23H: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2003-29 Group 1: -- Class A affirmed at 'AAA'; Series 2003-29 Pools 2, 3, 4 & 5: -- Class A affirmed at 'AAA'; Series 2003-30: -- Class A affirmed at 'AAA'; Series 2003-33H: -- Class A affirmed at 'A'; -- Class 1B1, 2B1 affirmed at 'AA'; -- Class 1B2, 2B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 rated 'B', is placed on Rating Watch Negative. Series 2004-5H: -- Class A affirmed at 'AAA'; -- Class B1 affirmed at 'AA'; -- Class B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2004-12H: -- Class A affirmed at 'AAA'; -- Class 1B1, 2B1 affirmed at 'AA'; -- Class 1B2, 2B2 affirmed at 'A'; -- Class B3 affirmed at 'BBB'; -- Class B4 affirmed at 'BB'; -- Class B5 affirmed at 'B'. Series 2004-18H: -- Class A affirmed at 'AAA'; Series 2004-20: -- Class A affirmed at 'AAA'; The affirmations reflect adequate relationships of credit enhancement to future loss expectations and affect approximately $3.03 billion of outstanding certificates. The Distressed Recovery Ratings of series 1996-4 Group 1 class B4, series 1998-11 Group 1 class IB3, series 2001-2 class B3, series 2001-9 classes B3 and B4, series 2001-16H class B5, and series 2002-AL1 class B4, is due to either a default or sufficient credit deterioration to raise the possibility that the rated security might be at risk of loss of principal or interest. The above transactions have pool factors ranging from only 1% to 62% and are seasoned from a range of 40 to 124 months. The underlying collateral consists of conventional, fixed-rate and adjustable, fully amortizing residential mortgage loans extended to prime/AltA borrowers. The mortgage loans are master serviced by Aurora Loan Services, Inc., which is rated 'RMS1-' by Fitch. SUMMIT GLOBAL: Court Approves $5 Million DIP Facility of Fortress ----------------------------------------------------------------- The Hon. Donald H. Steckroth of the U.S. Bankruptcy Court for the District of New Jersey authorized Summit Global Logistics Inc. and its debtor-affiliates to obtain up to $5,000,000 postpetition financing from Fortress Credit Corp., as administrative agent. As reported in the Troubled Company Reporter on Feb. 4, 2008, the Debtors told the Court that they have an urgent need to obtain credit to maintain their business operations. Kenneth A. Rosen, Esq., at Lowenstein Sandler PC in Roseland, New Jersey, said that the DIP facility provided by the lender will incur interest rate at 6.75% plus LIBOR. The loan matures April 30, 2008, under the terms of the financing agreement. The Debtors will also pay other fees: i) unused facility fee at 0.5%; ii) DIP facility fee at $50,000; iii) collateral monitoring fees at $850 per day per person plus out-of-pocket expenses; and iv) letter of credit fees at3% per annum of the outstanding face amount, plus usual fronting and administrative charges. As adequate protection, all loans made by the lender are secured by, among other things, superpriority claim; perfected first priority lien and security interest in all encumbered property of the Debtors; and perfected junior lien on all property of the Debtors. A full-text copy of the parties' Ratification and Amendment Agreement date Jan. 30, 2008, is available for free at: http://ResearchArchives.com/t/s?2998 Headquartered in East Rutherford, New Jersey, Summit Global Logistics Inc. fdba Aeorbic Creations Inc. -- http://www.summitgl.com/-- offers a network of strategic logistics services, such as non-vessel operating common carrier ocean services, overseas consolidation, air freight forwarding, warehousing & distribution, cross-dock, transload, customs brokerage and trucking. The Company and its 17 affiliates filed for Chapter 11 protection on January 30, 2008 (Bankr. N.J. Case No. 08-11566). Kenneth Rosen, Esq., at Lowenstein Sandler, P.C., represents the Debtors in its restructuring efforts. No Official Committee of Unsecured Creditors has been appointed in this cases. When the Debtor filed for protection against their creditors, it list assets between $50 million and $100 million and debts between $100 million and $500 million. The Court named Perry M. Mandrino, CPA, at Traxi LLC in New York, as examiner of the Debtors' estate. SUN-TIMES MEDIA: Inks Settlement Agreement with Hollinger Inc. ------------------------------------------------------------- Hollinger Inc. entered into a settlement agreement with Sun-Times Media Group Inc. Hollinger holds roughly 70% voting interest and 19.7% equity interest in Sun-Times. In order to become effective, the Settlement Agreement must be approved by orders issued by the Ontario Superior Court of Justice and the United States Bankruptcy Court for the District of Delaware. Hollinger and its subsidiaries, Sugra Ltd. and 4322525 Canada Inc. are subject to proceedings in Canada under the Companies' Creditors Arrangement Act and in the United States under Chapter 15 of the U.S. Bankruptcy Code. The Settlement Agreement forms part of an Amended Plan Term Sheet expected to be filed by the Applicants with the Ontario Court on March 26, 2008 for relief it is seeking in connection with its CCAA proceeding, which is anticipated to be heard by the Ontario Court on April 22-23, 2008. The Settlement Agreement provides for the resolution of all outstanding matters between the Applicants and Sun-Times and would form the basis for a plan of arrangement that may be prepared by the Applicants within the CCAA proceedings. All creditors of the Applicants will have an opportunity to vote on any CCAA Plan that may be presented once the claims of creditors are received and determined in accordance with a claims process that the Applicants are requesting be commenced immediately upon Court Approval. If a CCAA Plan is prepared by the Applicants and approved by the Applicants' creditors, further approval of the Ontario Court and the Delaware Court will be sought and the CCAA Plan will be implemented soon as possible after approvals. The settlement between Sun-Times and the Applicants is not conditional upon Plan Implementation. The principal terms of the proposed Settlement Agreement as it relates to the settlement of outstanding issues between Sun-Times and the Applicants. Obtaining Value for Hollinger's Voting Control Hollinger owns, directly or indirectly, a total of 782,923 Class A Common Stock of Sun-Times and 14,990,000 Class B Common Stock of Sun-Times. Through the multiple-voting nature of the Class B Shares, the Applicants have voting control over Sun-Times. Upon Court Approval, the Ontario Court shall authorize and direct the Applicants, Sun-Times and any other party to take the steps necessary to convert all of these Class B Shares into Class A Shares on a one-for-one basis. Subject to the CCAA Plan being accepted by the requisite majorities of the Applicants' creditors, upon Plan Implementation, Sun-Times will issue and deliver to Hollinger an additional 1,499,000 Class A Shares, providing Hollinger with a total of 16,489,000 Class A Shares for the converted Class B Shares, a conversion rate of 1.1:1. If the CCAA Plan is rejected, Hollinger will receive only the 14,990,000 Class A Shares received upon conversion of its Class B Shares, representing a 1:1 conversion. Whether Hollinger receives 14,990,000 or 16,489,000 Class A Shares, its voting control over Sun-Times will be eliminated. Resolution of All Claims and Litigation between Hollinger and Sun- Times Hollinger will release Sun-Times, and Sun-Times will release Hollinger, from all debts, claims and litigation between the parties, save and except for specific amounts claimed by Sun-Times against Hollinger in respect of (i) a promissory note executed by 4322525 Canada Inc. in favor of Sun-Times in the amount of $40.5 million; (ii) present and future claims by Sun-Times against Hollinger for contribution and indemnity which are now capped at $28.6 million; and (iii) a claim in respect of an aircraft lease settlement entered into by the parties in the amount of CDN$1.3 million. The Sun-Times Allowed Claims will be accepted by the Applicants as valid claims in the aggregate amount of approximately $70 million. Only the Sun-Times Allowed Claims will be allowed to be filed as unsecured claims by Sun-Times against the Applicants in its court- supervised claims process and recoveries by Sun-Times from the Sun-Times Allowed Claims will be limited to $15 million. However, under the Settlement Agreement, upon Sun-Times receiving $7.5 million in distributions in respect of the Sun-Times Allowed Claims, 50% of all subsequent distributions shall be made available by Sun-Times to the Applicants to use, subject to further approval by the Ontario Court at that time, in the pursuit of certain litigation claims held by the Applicants. In addition, any distributions that would otherwise be received by Sun-Times in respect of the Sun-Times Allowed Claims in excess of $15 million will be assigned to the Applicants for the benefit of the Applicants' other unsecured creditors. Pursuant to a stipulation and agreement of settlement of U.S. and Canadian class actions against Sun-Times and Hollinger and an insurance settlement agreement dated June 27, 2007, up to $24.5 million plus interest, less fees and expenses, will be paid to Hollinger or Sun-Times, and potential other claimants under their directors' and officers' insurance policies. Under the Settlement Agreement, Hollinger and Sun-Times will cooperate to maximize the recoverable portion of the Insurance Settlement Proceeds payable to them and have agreed that Sun-Times will receive 80% and Hollinger will receive 20% of the amounts to be received by Hollinger and Sun-Times from such proceeds. In respect of the amount payable to each of Hollinger and Sun- Times under the proceedings in Ontario against The Ravelston Corporation Limited and certain of its affiliates under the CCAA and Bankruptcy and Insolvency Act, the Settlement Agreement provides that each of Hollinger and Sun-Times will share equally in any proceeds or recoveries from that estate. Corporate Governance of Sun-Times Effective upon Court Approval, William Aziz, Brent Baird, Albrecht Bellstedt, Peter Dey, Edward Hannah and Wesley Voorheis will submit their resignations from the Sun-Times' board of directors. Sun-Times has agreed to continue its current examination of all strategic alternatives for improving stockholder value, as disclosed by Sun-Times on Feb. 4, 2008. Sun-Times' board of directors has passed the necessary resolutions to ensure that the Settlement Agreement, the CCAA Plan and the implementation of the Settlement Agreement and the CCAA Plan will not cause any rights granted under Sun-Times' current rights plan to become exercisable, will not cause any person to become an "Acquiring Person" under such rights plan and will not otherwise trigger the application of such rights plan. Litigation Assets At the same time that Court Approval is sought, the Applicants will be seeking the appointment of retired Ontario justice, the Honourable John D. Ground, as an officer of the Ontario Court to perform the role of litigation trustee of all of the litigation assets of the Applicants on such terms as may be agreed between the Litigation Trustee and the Applicants, and subject to approval by the Ontario Court. The Litigation Trustee will supervise, control and administer the Litigation Assets in consultation with the Applicants and subject to monitoring by Ernst & Young LLP, the Monitor and supervision by the Ontario Court. Hollinger Corporate Governance Pursuant to the Term Sheet and subject to Court Approval of the Settlement Agreement being obtained, Hollinger intends to reduce the size of its board of directors or, if possible, to eliminate it. Also upon Court Approval, G. Wesley Voorheis, chief executive officer of Hollinger, will resign as an officer and director of the Applicants and any subsidiaries. The Litigation Trustee may retain the services of Mr. Voorheis or an entity controlled by him to provide assistance or advice in respect of the Litigation Assets. At that time William Aziz, Hollinger's chief financial officer, or an entity controlled by him, will be appointed as chief restructuring officer of Hollinger and an officer of the Ontario Court in consideration of a monthly salary of $65,000. This engagement will be on a month-to-month basis and may be terminated by Mr. Aziz upon 30 days' prior written notice. Payment of a Portion of Sun-Times Costs and Fees Under the Settlement Agreement, upon Court Approval, Hollinger will pay to Sun-Times the reasonable fees and costs of Sun-Times incurred in respect of the CCAA proceedings from Aug. 1, 2007, up to and including the Court Approval date, up to a maximum of $1 million. About Sun-Times Media Group Headquartered in Chicago, Sun-Times Media Group Inc. (NYSE: SVN) - - http://www.thesuntimesgroup.com/-- is dedicated to being the premier source of local news and information for the greater Chicago area. Its media properties include the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities throughout the Chicago area. About Hollinger Inc. Based in Toronto, Ontario, Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- owns approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc. (formerly Hollinger International Inc.), a media company with assets which include the Chicago Sun-Times newspaper and Suntimes.com and a number of community newspapers and websites serving communities in the Chicago area. The company, along with two affiliates, 4322525 Canada Inc. and Sugra Limited, filed separate Chapter 15 petitions on Aug. 1, 2007 (Bankr. D. Del. Case Nos. 07-11029 through 07-11031). Hollinger also initiated Court-supervised restructuring under the Companies' Creditors Arrangement Act (Canada) on the same day. Derek C. Abbott, Esq., and Kelly M. Dawson, Esq., at Morris, Nichols, Arsht & Tunnell LLP, represents the Debtors in their U.S. proceedings. As reported in the Troubled Company Reporter on Feb. 22, 2008, Hollinger Inc.'s consolidated balance sheet at Dec. 31, 2007, showed CDN$79.8 million in total assets and CDN$219.3 million in total liabilities, resulting in a CDN$139.5 million total stockholders' deficit. SUNRISE SENIOR: Completes Financial Restatement for 2004 and 2005 ----------------------------------------------------------------- Sunrise Senior Living Inc. filed Monday its Form 10-K for the year ended Dec. 31, 2006, with the Securities and Exchange Commission and has now completed its financial restatement and accounting review. The 2006 Form 10-K includes restated audited financial statements for 2004 and 2005, audited financial statements for 2006 and unaudited quarterly financial information for 2005 (restated) and 2006. The cumulative impact of the restatement reduced the company's net income for all periods affected, including 1996 through 2005, by approximately $173 million, after-tax. This includes $138 million related to the previously disclosed restatement real estate and other adjustments, $27 million related to the impact of the stock option adjustments, and $8 million related to revenue recognition of thecompany's Greystone subsidiary. The company reported restated 2005 and 2004 revenues of $1.51 billion and $1.27 billion, respectively, as compared to the $1.82 billion and $1.45 billion, respectively, which the company had previously reported. Substantially ll of the reduction in 2005 and 2004 restated revenue amounts is due to the reduction in reimbursable contract services revenue as part of the restatement, for which there is an offsetting reduction in expense. Restated net income for 2005 totaled $87.1 million, as compared to the $79.7 million that the company previously reported. Restated net income for 2004 totaled $1.1 million, as compared to the $50.7 million that the company previously reported. For 2006, the company reported revenues of $1.65 billion and net income of $20.4 million. "The Board is pleased that the restatement is now complete," said Lynn Krominga, chairman of the Board. "We appreciate the collaborative efforts of the NYSE staff, particularly over the past several days, which have enabled our stock to continue uninterrupted trading. Today's filing, and our recently announced corporate governance changes, significantly advance our efforts to create value for our shareholders." Balance Sheet At Dec. 31, 2006, the company's consolidated financial statements showed $1.82 billion in total assets, $1.15 billion in total liabilities, $16.5 million in minority interests, and $647.3 million in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2006, also showed strained liquidity with $356.1 million in total current assets available to pay $421.1 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2006, are available for free at http://researcharchives.com/t/s?299a About Sunrise Senior Based in McLean, Virginia, Sunrise Senior Living Inc. (NYSE: SRZ) -- http://www.sunriseseniorliving.com/-- offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing, rehabilitative and hospice care. As of Dec. 31, 2007, the company operated 457 communities in the United States, Canada, Germany and the United Kingdom, with a combined capacity for approximately 54,000 residents. * * * This concludes the Troubled Company Reporter's coverage of Sunrise Senior Living Inc. until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. TATLEAUX ANTIQUES: Case Summary & 24 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Tatleaux Antiques Holdings Inc. 678 Massachusetts Avenue Suite 600 Cambridge, MA 02139 Bankruptcy Case No.: 08-11900 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Tatleaux Antiques Inc. 08-11901 Chapter 11 Petition Date: March 18, 2008 Court: District of Massachusetts (Boston) Debtor's Counsel: Guy B. Moss, Esq. Riemer & Braunstein LLP 3 Center Plaza Boston, MA 02108 Tel: (617) 523-9000 Fax: 617-880-3456 gmoss@riemerlaw.com Estimated Assets: less than $50,000 Estimated Debts: $1,000,001 to $10 million A. Tatleaux Antiques Holdings Inc.'s Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Boston Private Bank and uncertain Trust Company James Brown Ten Post Office Square Boston, MA 02110 B. Tatleaux Antiques Inc.'s List of 23 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Woodside Funding Partners I note $2,262,422 Citizen's Bank 1 Citizen's Drive Riverside, RI 02915 Hasbrouck Associates note $1,689,252 469 Ridge Avenue Hawley, PA 18428 Savant Customs Brokers customs broker $176,343 11 Broadway and freight Suite 1068 forwarding fees New York, NY 10004 Posternak, Blankstein & Lund LLP legal fees $52,519 Tonneson & Company CPA's accounts and $41,599 auditing fees Craft Master International cost of goods $25,239 Point Max cost of goods $20,058 HPH Associates cost of goods $19,721 Royal Antique Exports cost of goods $18,973 Qinhuangdao Classic Art Glass cost of goods $16,100 Road Scholar Transport trucking $14,764 Hanover Insurance Group commercial $14,160 insurance Golden Carriers Inc. trucking $8,953 Kelley Ann Olley accounting $8,801 consultant International Furniture Import cost of goods $4,825 Pac N Wrap packing supplies $4,216 George W. Kinsman Inc. truck repair $4,156 RDW Group's Interactive Factory website work $3,412 Robert Half Finance & Accounting search fees $3,300 PPL utilities $3,115 Freight Quote.com freight services $2,393 Whiteman Tower supplies $1,957 Boston Private Bank & Trust Co. note deficiency uncertain TENET HEALTHCARE: Fitch Affirms 'B-' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has affirmed Tenet Healthcare Corp.'s ratings as: -- Issuer Default Rating 'B-'; -- Secured bank facility 'BB-/RR1'; -- Senior unsecured notes 'B-/RR4'. The Rating Outlook is Stable. Tenet's ratings are supported by the company's recent operational improvements. During 2006, Tenet resolved the majority of its legacy legal liabilities and significantly improved its liquidity profile. In 2007, Tenet continued its efforts to revitalize its operations. Same hospital admissions growth turned positive during the fourth quarter of 2007 for the first time in over three years. At the same time, Tenet attained strong pricing and announced several favorable managed care contracts. The company has also demonstrated improvement in its quality, physician relations, employee turnover and patient satisfaction metrics, all of which should provide growth opportunities in 2008 and beyond. Although Tenet has made recent improvements in its operations, challenges remain. Fitch notes that managed care volumes, although improving, are still declining. Fitch believes that a successful turn around is contingent on Tenet's ability to stabilize and grow its managed care business, which the company has yet to demonstrate on a sustained basis. Furthermore, Fitch believes that issues in certain markets may limit growth in the near future, including increasing competition in certain markets as well as the ongoing legal dispute at USC University Hospital. Negative cash flow remains a primary concern for the credit, particularly as Tenet's debt maturity profile shortens. Although improved over 2006, free cash flow remained negative in 2007 at ($417) million and Fitch does not anticipate a return to positive free cash flow in 2008. In order to meet near-term funding needs, including capital expenditures, mandatory payments to the Department of Justice as part of its civil settlement, and other items, Tenet will need to improve cash flows, divest assets, or pursue alternative sources of cash. The company has identified approximately $400-600 million worth of initiatives, including the sale of non-core real estate, which it intends to pursue in 2008. However, if Tenet reaches a point where it does not have sufficient liquidity to fund debt payments or operations within a 12 month time frame, Fitch will likely place the ratings on a Negative Watch. Although cash flows remain a concern, Fitch believes that Tenet has adequate liquidity to meet near-term business needs. At Dec. 31, 2007, liquidity was provided by $572 million in cash on hand and $564 million in availability on its $800 million senior secured revolving credit facility. In addition, Fitch believes that capital expenditures could be reduced or assets could be divested, if necessary, in order to generate cash. Tenet has no significant near-term debt maturities; however, Tenet faces approximately $4.4 billion in maturities from 2011-2015. Therefore, Tenet must demonstrate the ability to stabilize its operations and improve cash flows in the next few years. Total rated debt at Dec. 31, 2007, was approximately $4.8 billion. Tenet has limited covenants on its outstanding debt, including no financial covenants or meaningful restrictions on indebtedness under its unsecured notes indentures. The revolving credit facility agreement includes limitations on liens, indebtedness, asset sales and restricted payments. The credit agreement also limits capital expenditures and imposes a minimum fixed charge coverage ratio when availability drops below a set threshold. THOMPSON PRODUCTS: Auction of Inventories Set April 1 ----------------------------------------------------- Pursuant to an order of the U.S. Bankruptcy Court for the District of Delaware in the bankruptcy case of Thompson Products, Inc. and its debtor-affiliates, the Debtors intend to sell certain Non- Inventory Assets and Purchased Inventory to Pinnacle Frames and Accents Inc., subject to higher and better offers at a public auction to be held at: DLA Piper US LLP 1251 Avenue of the Americas New York, NY 10020 on April 1, 2008 at 10:00 a.m. (Eastern time). Bids for the assets were due March 25, 2008 at 12:00 p.m. (Eastern Time). Copies of the Asset Purchase Agreement and Bid Procedures Order may be obained upon written request to: Timothy W. Walsh, Esq. Vincent J. Roldan, Esq. DLA Piper US LLP 1251 Avenue of the Americas New York, NY 10020 Phone: (212) 335-4500 Fax: 335-4501 Adam G. Landis, Esq. Kerri K. Mumford, Esq. Landis Rath & Cobb LLP 919 Market Street, Suite 600 Wilmington, Delaware 19801 Phone: (302) 467 4400 Fax: 9302) 467-4450 Headquartered in Lakeville, Massachussetts, Thomas Products Inc. -- http://www.thompsonproductsinc.com/-- makes and sells photo albums, frames, scrapbooks and stationeries. The company and two of its affiliates filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.Del., Case No. 08-10319). Eric Michael Sutty, Esq. and Justin K. Edelson, Esq. at Bayard, P.A. represent the Debtors in their restructuring efforts. When Thompson Products filed for bankruptcy, it listed between $1 million to $100 million in assets and between $1 million to $100 million in liabilities. THORNBURG MORTGAGE: Amends Bylaws Allowing $300MM Share Purchase ---------------------------------------------------------------- In an 8-K filing with the U.S. Securities and Exchange Commission, Thornburg Mortgage Inc. disclosed that its Board of Directors has approved an amendment to the company's Amended and Restated Bylaws. The amendment allows an investor to buy $300 million worth of Thornburg shares. Certain provisions of Maryland law effectively limit the amount of the company's stock that can be owned by any person. The Board of Directors amended the provision under the Maryland Control Share Acquisition Act that, with certain exceptions, eliminates the voting rights of any person who acquires in excess of 10% of the company's voting stock unless two-thirds of the shares eligible to vote approve such voting rights. The amendment would have permitted an investor in the offering that the company is undertaking in connection with its entry into an override agreement with counterparties to its reverse repurchase, securities lending and auction swap agreements and related recapitalization efforts to acquire up to 30% of shares of stock from the company, provided that the company receives acceptable evidences and assurances that such ownership would not jeopardize the company's REIT qualification and an officer of the company provides a written consent to such acquisition. On March 19, 2008, the Board of Directors amended this amendment to the Bylaws to permit an investor to acquire in the Offering shares of stock from the company with a value at the time of acquisition of up to $300 million, provided that the company receives the assurances, and an officer of the company provides a written consent. This description of the amendment to the Bylaws does not purport to be complete and is qualified in its entirety by reference to the full text of the amendment. About Thornburg Mortgage Headquartered in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single- family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable-rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. * * * As reported in the Troubled Company Reporter on March 10, 2008, Moody's Investors Service downgraded to Ca from Caa2 the senior unsecured debt, and to C from Ca the preferred stock ratings of Thornburg Mortgage, Inc. Thornburg's Ca unsecured debt rating remains under review for possible downgrade. The downgrades were in response to Thornburg's announcement that cross-defaults have been triggered under all of the REIT's repurchase agreements and secured loan agreements. Reverse repurchase agreements represent a key source of funding for the company. The TCR said on March 10 that Standard & Poor's Ratings Services lowered its issue ratings on Thornburg Mortgage Inc.'s senior unsecured debt to 'CC' from 'CCC+' and preferred stock to 'C' from 'CCC-'. Both issue ratings will remain on CreditWatch negative, where they were placed on March 3, 2008. The counterparty credit rating remains on selective default. Given Thornburg's limited financial resources, S&P believes the risk of default has increased further. The TCR also said on March 10 that, given Thornburg Mortgage, Inc.'s weakening credit profile stemming from defaults under the company's reverse repurchase agreements, Fitch has downgraded the Debtors' four ratings -- Issuer Default Rating to 'RD' from 'CCC'; -- Senior unsecured notes to 'C/RR6' from 'CCC-/RR5'; -- Unsecured subordinate notes to 'C/RR6' from 'CC/RR6'; and -- Preferred stock to 'C/RR6' from 'CC/RR6'. TLC VISION: Moody's Confirms 'B1' Ratings With Negative Outlook --------------------------------------------------------------- Moody's Investors Service raised TLC Vision Corporation's Speculative Grade Liquidity rating to SGL-3 (adequate) from SGL-4 (weak). Concurrently, the company's other ratings were affirmed. The ratings outlook remains negative. The revision of the company's Speculative Grade Liquidity rating to SGL-3 from SGL-4 reflects the company's amendment of its credit facility which provides for adequate cushion under the financial covenants through the twelve months ending March 31, 2009. The liquidity rating also incorporates Moody's expectations for good cash flow generation and effective availability under the $25 million revolving credit facility through the next four quarters ending March 31, 2009. The negative ratings outlook reflects the company's lower operating performance for FY2007 relative to Moody's expectations when the ratings were first assigned. The weakening of financial metrics heightens Moody's concern regarding TLC Vision's revenue growth due to a slowdown in consumer spending. In FY2007, margins remain pressured as ongoing realignment efforts gain traction. TLC Vision's financial and credit metrics as of the twelve months ended Dec. 31, 2007 are at the maximum tolerance point for the B1 Corporate Family Rating. A further tightening of credit metrics or prolonged capture of cost savings could result in a downgrade. These rating was revised: -- Speculative Grade Liquidity rating to SGL-3 from SGL-4. These ratings were affirmed: -- B1 Corporate Family Rating; -- B2 Probability of Default Rating; -- B1 (LGD3/31%) rating on the $25 million Senior Secured Revolver; and -- B1 (LGD3/31%) rating on the $85 million Senior Secured Term Loan. Headquartered in Mississauga, Ontario, Canada, TLC Vision Corporation is a diversified eye care services company with a majority of the company's revenues generated from laser refractive surgery, which involves an excimer laser to treat common refractive vision disorders such as myopia (nearsightedness), hyperopia and astigmatism. For the twelve months ended Dec. 31, 2007, the company generated approximately $298 million in revenues. TRM CORP: Nasdaq Denies Application for Transfer of Stocks Listing ------------------------------------------------------------------ TRM Corporation received a NASDAQ Staff Determination Letter denying TRM's application to transfer its shares to the NASDAQ Capital Market due to its failure to demonstrate compliance with the NASDAQ Capital Market's initial inclusion requirements, other than bid price, as set forth in Marketplace Rule 4310(c). TRM received an additional NASDAQ Staff Determination Letter stating that TRM's shares will be delisted from the NASDAQ Global Market as a result of the company's failure to satisfy the minimum stock price requirement of the NASDAQ Global Market as set forth in Marketplace Rule 4450(a). On March 12, 2008, TRM disclosed that it had failed to comply with NASDAQ's minimum bid price requirement and as a result, no longer met the requirements for continued listing on the NASDAQ Global Market. After discussions between the company and NASDAQ staff members, the company filed its election to transfer to the NASDAQ Capital Market. Based on such discussions with NASDAQ staff members, the company understood that such filing would result in an additional 180 days to become compliant. Subsequently, NASDAQ informed the company that it would not receive such additional time because it did not meet initial listing requirements of the NASDAQ Capital Market. Unless TRM requests an appeal of the delisting determination, NASDAQ will suspend trading of TRM's common stock at the open of business on March 28, 2008, and the common stock will subsequently be delisted. TRM plans to appeal the Staff's determination, which will stay any delisting action pending the issuance of a decision by the Panel. About TRM Corporation Headquartered in Portland, Oregon, TRM Corporation (Nasdaq: TRMM) -- http://www.trm.com/-- is a consumer services company that provides convenience ATM services in high-traffic consumer environments. TRM's ATM customer base is widespread, with retailers throughout the United States. TRM operates the second largest non-bank ATM network in the United States. Going Concern Doubt PricewaterhouseCoopers LLP, in Portland, Oregon, expressed substantial doubt about TRM Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company incurred a net loss for 2006 resulting in its inability to meet certain financial covenants of its financing agreement with GSO Origination Funding Partners LP and other lenders. On Nov. 20, 2006, the company entered into amendments that restructured its loans and waived the failure to meet the loan covenants. Under the restructured loan agreements principal payments of $69.9 million were due in the first quarter of 2007. During January 2007, the company sold its Canadian, United Kingdom and German ATM businesses and its United States photocopy business and used $98.4 million from the proceeds of those sales to make principal and interest payments under these loans, leaving a remaining balance of principal plus accrued interest of $2.0 million as of Jan. 31, 2007. The company is uncertain whether its remaining operations can generate sufficient cash to comply with the covenants of its restructured loan agreements and to pay its obligations on an ongoing basis. TRONOX WORLDWIDE: Weak Pricing Power Prompts Moody's Rating Cuts ---------------------------------------------------------------- Moody's Investors Service downgraded Tronox Worldwide LLC's corporate family rating to B2 from Ba3. In addition, Moody's downgraded the company's secured revolver and term loan to Ba2 from Ba1 and its unsecured notes to B3 from B1. The speculative grade liquidity rating was lowered to SGL-4 from SGL-3. The rating outlook is stable. These actions conclude Moody's review initiated on Feb. 13, 2008. The two notch downgrade for the CFR is due to the company's inability to effect meaningful price increases to offset rapidly increasing input costs that have caused operating margins to drop from 6% in 2006 to just below breakeven in 2007. This margin contraction is reflective of poor conditions in the housing industry, which is an important end market for the coatings and PVC that use Tronox's Ti02. Tronox has initiated cost control programs, starting in mid 2006, that have reduced cash costs by some $70 million cumulatively and $56 million in 2007 alone, without which Tronox's operating performance would have been significantly worse. Tronox's and the industry's pricing power has been adversely affected by a downturn in the North American housing industry, which Moody's feels may continue into 2010. Major end uses for Tronox's Ti02 include architectural paints and coatings and PVC. Moody's believes that the ratings are constrained by the prospect of continuing weak operating performance, weakness in the housing market, covenant compliance and liquidity related pressures, and large legacy environmental liabilities (even as reserves on existing active sites have been reduced). Moody's believes that these legacy environmental liabilities are unique in size and complexity, and constitute a key negative factor when determining the rating. Tronox's efforts to raise prices throughout 2007 did not begin to see results until late in 2007 and several further announcements have been made in early 2008. The price increases, if only partially adopted, will not offset margin deterioration due to cost increases over the last two years. Furthermore, Moody's believes that current weak economic conditions in the North American housing markets will limit the success of price increases for coatings and PVC products in 2008 such that operating margins will remain below breakeven. Uncertainty over weakening economic conditions in North America was a driver for management's successful effort in February 2008 to reach agreement with its banks to amend its financial covenant's on its credit facility. This follows an earlier covenant amendment in March of 2007. Leverage ratios were relaxed by over a full turn in 2008 to a peak of 4.9 times before reducing in 2009. Interest coverage was dropped by over 1.5 turns to 1.0 times in the first two quarters of 2008 and to 0.80 times in the last two quarters before increasing in 2009. The proceeds from proposed asset sales were not factored into the setting of these covenant levels such that if successful the compliance headroom could improve. Still, the company's asset sale efforts in 2007 were delayed by both current capital market conditions related to commercial land sale financings and the inability to reach a satisfactory price on a sale of a foreign plant. The stable outlook reflects Tronox's strong business profile as evidenced by the company's significant global market share, relatively modest debt maturities, positive geographic diversity, and stable customer relationships. While Moody's believes that Tronox is fundamentally a stronger credit over the medium term than the B2 CFR would imply, Moody's is focusing more on the company's near-term performance due to the expectation of weaker credit metrics in 2008 and Moody's anticipation that the company may need to renegotiate the recently amended financial covenants in its revolver and term loan to maintain access to these facilities over the next 12 months. It is this prospect of further covenant pressure along with reduced cash flows and lower cash balances that has resulted in the speculative grade liquidity rating being reduced to SGL-4 from SLG-3 reflecting the prospect of weakening liquidity. A turnaround in the company's projected financial performance could result in a positive rating action. Conversely, weaker conditions in the company's main end-markets, coatings and PVC, resulting in weak product pricing and cash flows, could lead to lower ratings. Downgrades: Issuer: Tronox Worldwide LLC -- Corporate Family Rating, Downgraded to B2 from Ba3 -- Probability of Default Rating, Downgraded to B2 from Ba3 -- Senior Secured Bank Credit Facility, Downgraded to Ba2 from Ba1, 19 - LGD2 -- Senior Unsecured Regular Bond/Debenture, Downgraded to B3 from B1, 73 - LGD5 -- Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 -- Outlook Action: -- Outlook, Changed To Stable From Rating Under Review Tronox Worldwide LLC is the third-largest global producer of TiO2, a white pigment used in a wide range of products for its ability to impart whiteness, brightness and opacity. TiO2 is used in a variety of products including paints and coatings, plastics, paper and consumer products. The company commands a 12% global market share in TiO2, reporting sales of $1.4 billion for the twelve months ended Dec. 31, 2007. WACHOVIA BANK: Fitch Holds 'BB-' Rating on $16.3MM Class L Certs. ----------------------------------------------------------------- Fitch Ratings upgraded Wachovia Bank Commercial Mortgage Trust pass-through certificates series 2005-C21 as: -- $65 million class B to 'AA+' from 'AA'; -- $32.5 million class C to 'AA' from 'AA-'; -- $60.9 million class D to 'A+' from 'A'. In addition, Fitch has affirmed these classes: -- $232 million class A-2PFL at 'AAA'; -- $183.1 million class A-3 at 'AAA'; -- $148.6 million class A-PB at 'AAA'; -- $917.5 million class A-4 at 'AAA'; -- $337.8 million class A-1A at 'AAA'; -- $325 million class A-M at 'AAA'; -- $215.3 million class A-J at 'AAA'; -- Interest-only class IO at 'AAA'; -- $36.6 million class E at 'A-'; -- $40.6 million class F at 'BBB+'; -- $32.5 million class G at 'BBB'; -- $40.6 million class H at 'BBB-'; -- $16.3 million class J at 'BB+'; -- $16.3 million class K at 'BB'; -- $16.3 million class L at 'BB-'. Classes A-1 and A-2C have paid in full. Fitch does not rate the $8.1 million class M, $12.2 million class N, $8.1 million class O or the $48.8 million class P. The upgrades are the result of 13.8% pay down and 3.5% defeasance since Fitch's last rating action. As of the March 2008 distribution date, the transaction has paid down 14% to $2.79 billion from $3.25 billion at issuance. There are no delinquent or specially serviced loans. Fitch reviewed the transaction's three shadow rated loans and their underlying collateral: Extra Space Teamsters Portfolio (3.3%), Extra Space VRS Portfolio (1.9%) and One City Center (0.8%). Based on the stable performance and occupancy, Fitch maintains investment grade shadow ratings for these three loans. The largest loan (7%) is secured by a geographically diverse portfolio of 13 office properties and one distribution center located in 10 states and the District of Columbia. Total occupancy as of September 2007 was 98.4%. WELLMAN INC: Panel Opposes Asset Sale Terms in $225MM DIP Loan -------------------------------------------------------------- The Official Committee of Unsecured Creditors of Wellman, Inc., and its debtor-affiliates asks the U.S. Bankruptcy Court for the Southern District of New York to deny final approval of the proposed $225,000,0000 DIP financing of the Debtors, on grounds that the terms of the loan provide for a "foreclosure process" that unfairly favors secured creditors, with no regard for a Chapter 11 plan process. Judge Stuart M. Bernstein has already given interim approval to the $225,000,000 loan arranged by Deutsche Bank Securities Inc. The DIP Loan will be used to pay off $125,000,000 the Debtors owe on an existing $225,000,000 revolving credit facility and for the Debtors' general use. The DIP Loan, however, requires the Debtors to obtain Court approval to sell substantially all of their assets by July 31, 2008, with proceeds of the sale to be repaid to the DIP Lenders, and the the Debtors' prepetition lenders, who hold a collateral in all of the Debtors' assets. The Debtors estimate the principal amount of their prepetition secured debt at $575,000,000 as of the Petition Date, comprised of: (a) a $225,000,000 prepetition revolving credit facility, which had approximately $125,000,000 outstanding as of the Petition Date, (b) a $185,000,000 prepetition first lien term loan, and (c) a $265,000,000 second lien term loan. Deutsche Bank Trust Company Americas serves as administrative agent for the three groups of lenders. "The terms of the DIP Facility, as proposed by the Debtors, evidence conclusively that these chapter 11 cases are being prosecuted and managed solely and exclusively to benefit the Debtors' three prepetition secured lender constituencies," asserts the Committee's counsel, Mark R. Somerstein, Esq., at Ropes & Gray LLP, in New York. The Committee points out the DIP Facility matures on the closing of the Liquidation Sale, with no regard for a Chapter 11 plan process or any other dimension of a debtor's Chapter 11 duties. Mr. Somerstein notes that once the Liquidation Sale is completed, there is no contemplation of a mechanism to satisfy unpaid accrued administrative claims of creditors and no liquidity will be available to fund a plan process. "The message to this Court, and to all interested parties, could not be more clear: administrative and unsecured creditors will be left holding the bag -- an empty bag -- when the secured creditors make off with all of the Liquidation Sale proceeds, then move to convert the hollowed shell of these chapter 11 cases to chapter 7 liquidations." The Committee also avers the DIP Facility cannot be approved because it prejudices unsecured creditors, as it provides "little, and most likely no, true benefit to unsecured creditors." It cites: -- The Prepetition Term Lenders are granted new liens on prepetition and postpetition property of the Debtors' estates in which these same secured lenders did not enjoy perfected prepetition liens; -- The Prepetition Term Lenders are granted new liens as adequate protection even though they any legal entitlement to adequate protection. Wellman's bankruptcy cases are structured specifically to foster the fastest possible foreclosure process for the secured creditors. There is no automatic stay in place that impairs the Term Lenders of their interests, and no diminution in collateral value can possibly be created; and -- Notwithstanding the expectation that sale proceeds will fall well short of the secured creditors' nearly $600,000,000 in alleged secured claims, the DIP Facility seeks to impose all the costs of the sale process on the unsecured creditors. By Section 506(c) of the Bankruptcy Code, bankruptcy courts, however, have long recognized that where secured creditors seek to avail themselves of the advantages of Chapter 11, the costs incurred must be paid from the collateral value. Mr. Somerstein adds the DIP Facility seeks to impose a variety of additional prejudicial restrictions on the Committee and unsecured creditors: (i) An unnecessary and unreasonably short period within which the Committee must assert claims against the secured lenders. The Proposed Dip Facility provides for a 60-day period within which the Committee has standing to bring claims against the Secured Lenders, and oppose to the stipulations and admissions by the Debtors in the DIP Facility documents. (ii) Insufficient funding for the Committee to investigate claims against the secured lenders. The Proposed Final DIP Order limits to $50,000 the funds for the Committee to investigate the Repaid Facility, which for the Committee is reasonably low. (iii) Stripping unsecured creditors of the value of Chapter 5 actions. The Debtors intend to grant the DIP Lenders a lien on the proceeds of Chapter 5 avoidance actions. The Committee asserts the proceeds of the Avoidance Actions, if any, should accrue to the benefit of unsecured creditors. "This is not a typical chapter 11 case, and the DIP Facility is, thus, wholly exploitative," Mr. Somerstein says. "This Court cannot countenance the secured lenders' efforts to co-op these chapter 11 cases into their own foreclosure sale process, without compelling these sole beneficiaries of the contemplated process to pay the costs involved." The members of the Committee are BP Amoco Chemical Company; Equistar Chemicals, LP; Pillowtex Corporation; A&R Logistics; Nilit America Corporation; American Citadel Guard, Inc.; and Columbia Recycling Corp. Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08- 10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WELLMAN INC: Lenders Want Lazard Payment Terms Adjusted ------------------------------------------------------- First Lien Term Loan debt holders Highland Capital Management, L.P., Babson Capital Management, OppenheimerFunds, Inc., Trilogy Capital, LLC, Eaton Vance Management, and Rivendell CBNA Loan Funding LLC -- on behalf of themselves or as managers of affiliated funds -- say they are cognizant that Lazard Freres & Co. LLC is a premier investment banker and financial advisor, qualified to assist Wellman Inc. and its debtor-affiliates in their restructuring and sale efforts, and are therefore deserving of a fee for those services. The First Lien Term Lenders, however, want the Debtors to pay Lazard for its efforts to help sell the Debtors' business at rates charged by the firm before the bankruptcy filing. They note that under an engagement letter entered into on Oct. 29, 2007, Lazard had agreed to a fee equal to 0.75% of aggregate sale transaction proceeds up to $600 million. In addition, the First Term Lenders aver that the $150,000 in fees received by Lazard prepetition should be credited against whatever fee it is entitled to receive as a result of its Sale Efforts. As reported in the Troubled Company Reporter on March 3, 2008, the Debtors sought authority from the Court employ Lazard Freres & Co. LLC, as their investment bankers and financial advisors. The Debtors selected Lazard because of its extensive experience in providing high quality financial advisory and investment banking services to debtors and creditors in Chapter 11 cases and other restructuring. The firm is also familiar with the Debtors' financial affairs, debt structure, operations and related matters as a result of the prepetition work performed on behalf of the Debtors. On behalf of the Lenders, Jonathan Hook, Esq., at Haynes and Boone, LLP, in New York, notes that under the Prepetition Engagement Letter and the engagement letter signed by the Debtors and Lazard on Jan. 29, 2008, the Sale Transaction Fee is calculated based on aggregate proceeds that include the assumption of liabilities in addition to cash proceeds. As a consequence, the First Term Lenders could end up paying Lazard an incremental fee out of their collateral proceeds just because the purchaser assumes unsecured claims asserted against the estate, Mr. Hook asserts. "The First Lien Term Lenders' collateral should not be charged a fee simply because a purchaser satisfies and assumes general unsecured claims or subordinated liabilities." The First Lien Term Lenders also suggest there is no good reason why each tranche of the Debtors' secured lenders (the DIP Lenders, the First Lien Term Lenders and the Second Lien Term Lenders) should not bear a portion of the Sale Transaction Fee. Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WELLMAN INC: Court Approves Kutzman Carson as Claims Agent ---------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Wellman Inc. and its debtor-affiliates to employ Kurtzman Carson Consultants, LLC, as their notice, claims and balloting agent. The Debtors had disclosed that they may have thousands of potential creditors and other parties-in-interest that must be served with notices for various purposes. The Debtors believed that Kurtzman is well qualified to provide comprehensive solutions to design legal notice programs and manage claims issues in their Chapter 11 cases. Kurtzman is expected to perform the necessary administrative tasks to effectively operate the Debtors' Chapter 11 cases. For noticing and claims processing tasks, Kurtzman is expected to: (a) prepare and serve required notices on behalf of the Debtors, including notices of the commencement of the Debtors' Chapter 11 cases, the initial meeting of creditors, objections to claims, hearings on a disclosure statement and confirmation of the Debtors' reorganization plan, among others. (b) prepare for filing with the Clerk of the Court's Office a certificate or affidavit of service that includes an alphabetical list of persons on whom the notice was served along with their addresses and the date and manner of service; (c) maintain copies of all proofs of claim and proofs of interest filed in the Debtors' Chapter 11 cases; (d) maintain official claims registers by docketing all proofs of claim and interest in a claims database; (e) implement necessary security measures to ensure the completeness and integrity of the claims registers; (f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis unless the Clerk's Office requests a more or less frequent basis; (g) maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make that list available upon request to the Clerk's Office or any party-in-interest; (h) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours; (i) record all transfers of claims pursuant to Rule 3001(e) of the Federal Bankruptcy Rules of Bankruptcy Procedure, and provide notice of those transfers as required by Rule 3001(e) of the Federal Rules of Bankruptcy Procedure; (j) comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders and other requirements; (k) provide temporary employees to process claims as necessary; (l) comply with other conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and (m) provide other claims processing, noticing, and related administrative services as may be requested from time to time by the Debtors. Meanwhile, for balloting functions, Kurtzman is expected to: (i) print ballots including the printing of creditor and shareholder specific ballots; (ii) prepare voting reports by plan class, creditor, or shareholder and amount for review and approval by the Debtors and their counsel; (iii) coordinate the mailing of ballots, disclosure statement, and plan of reorganization to all voting and non-voting parties and provide affidavit of service; (iv) establish a toll-free "800" number to receive and address questions regarding voting on the plan; (v) receive ballots at a post office box, inspect ballots for conformity to voting procedures, date stamping and numbering ballots consecutively, and tabulate and certify the results; and (vi) provide balloting services as may be requested from time to time by the Debtors. For the contemplated services, Kurtzman will be paid based on ITS hourly rates. It will also be reimbursed for necessary out-of- pocket expenses it incurs, and the Debtors will make an advance payment when the firm's expenses exceed $10,000 monthly. Kurtzman will receive a $75,000 retainer fee for the engagement. Jonathan A. Carson, president of Kurtzman Carson, assured the Court that his firm does not hold or represent any interest adverse to the Debtors, their estates, their creditors and any parties in interest. About Wellman Inc. Headquartered in Fort Mill, South Carolina, Wellman Inc. -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $498,867,323 in assets and $684,221,655 in liabilities as of Jan. 31, 2008. (Wellman Bankruptcy News, Issue No. 6; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) WESTERN POWER: Jan. 31 Balance Sheet Upside-Down by $12,368,000 --------------------------------------------------------------- Western Power & Equipment Corp.'s consolidated balance sheet at Jan. 31, 2008, showed $38,459,000 in total assets and $50,827,000 in total liabilities, resulting in a $12,368,000 total stockholders' deficit. At Jan. 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $24,866,000 in total current assets available to pay $48,990,000 in total current liabilities. The company reported a net loss of $1,851,000 on net revenues of $18,794,000 for the second quarter ended Jan. 31, 2008, compared with a net loss of $5,852,000 on net revenues of $25,908,000 in the corresponding period ended Jan. 31, 2007. Results for the three months ended Jan. 31, 2007, included a penalty expense of $3,900,000 as a result of a technical default of their June 2005 convertible debt agreement because of a late payment. The company had an operating loss for the three months ended Jan. 31, 2008, of $887,000 compared to operating loss of $348,000 for the three months ended Jan. 31, 2007. The increase in operating loss mainly reflects increased legal and accounting fees related to the company's refinancing activities. Interest expense for the three months ended Jan. 31, 2008, of $990,000 was down from $1,308,000 in the prior year's comparative period. Included in prior year's interest expense is $232,000 in debt discount amortization and $93,000 in debt issuance cost amortization. The three-months ending Jan. 31, 2008, had no such costs. Full-text copies of the company's consolidated financial statements for the quarter ended Jan. 31, 2008, are available for free at http://researcharchives.com/t/s?2995 Going Concern Doubt Marcum & Kliegman LLP, in New York, expressed substantial doubt about Western Power & Equipment Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended July 31, 2007, and 2006. The auditing firm reported that the company continues to incur operating losses and is in default with its convertible debt agreement. The company continues to be in default with the debt agreement. About Western Power Based in Vancouver, Washington, Western Power & Equipment Corp. (OTC BB: WPEC) -- http://www.wpec.com/-- is engaged in the sale, rental, and servicing of light, medium-sized, and heavy construction, agricultural, and industrial equipment, parts, and related products which are manufactured by Case Corporation and certain other manufacturers and operates a mining company in Arizona. Products sold, rented, and serviced include backhoes, excavators, crawler dozers, skid steer loaders, forklifts, compactors, log loaders, trenchers, street sweepers, sewer vacuums, and mobile highway signs. The company maintains two distinct segments which include Western Power & Equipment Corp., the equipment dealership and Arizona Pacific Materials LLC, a mining operation. ZIFF DAVIS: Seeks Leave to Pay Prepetition Critical Vendor Claims ----------------------------------------------------------------- Ziff Davis Media, Inc. and its debtor-affiliates serve the technology and videogame markets, reaching more than 26,000,000 people a month through their portfolio of 16 Web sites, three award-winning magazines, and direct marketing services. To maintain this, the Debtors rely on a number of critical third- party vendors and service providers to supplement their production, design and circulation of their products. The Debtors' proposed counsel, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, relates that the services provided by the Critical Vendors are crucial to the Debtors' continuation of their businesses, and would be difficult and expensive to replace. Accordingly, the Debtors ask the U.S. Bankruptcy Court for the Southern District of New York for authority to pay pre-bankruptcy amounts owed to the Critical Vendors: Vendor Amount owed ------ ----------- Access Direct $26,325 Access Media $20,000 Advanced Postal Concepts $8,381 Audit Bureau of Circulation $12,587 Comsys $41,490 Ingram Periodicals $22,000 Insys Consulting $130,172 Loricom $19,928 MediaMark $48,125 NPS/National Publisher Services $26,168 Omail $60,197 Pillar Data Systems $27,388 Professional Interactive Entertainment $28,550 QSP $29,000 RPM Associates $39,381 Terracotta $30,000 Volt Delta Resources $37,363 Yahoo Search Marketing $12,135 Yesmail Canada $93,994 ----------- Total $713,184 Mr. Schreiber notes that payment of the Critical Vendors claims is vital to the Debtors' reorganization efforts because (a) the services provided by the Critical Vendors are often the only source from which the Debtors can procure the services, (b) failure to pay the Critical Vendor Claims would result in the Critical Vendor refusing to provide its services, (c) the Critical Vendors provide services to the Debtors on advantageous terms, and (d) the Critical Vendors would themselves be irreparably damaged by the Debtors' failure to pay their prepetition claims, resulting in the Debtors being forced to obtain the services elsewhere that would either be at a higher price or not of the quantity or quality required by the Debtors. Mr. Schreiber states that the Debtors have undertaken a thorough review of their accounts payable and their list of prepetition vendors and service providers to identify those vendors and providers who are essential to the Debtors' operations. The Debtors propose to condition the payment of Critical Vendor Claims on the agreement of the individual Critical Vendors to continue providing services to the Debtors on terms that are consistent with the historical terms between the parties. To ensure that the Critical Vendors deal with the Debtors on Customary Terms, the Debtors propose that (a) a letter be sent to the Critical Vendors along with a copy of the order granting their request to pay prepetition amounts owed to the Critical Vendors, and (b) checks used to pay Critical Vendor Claims contain a legend. If the letter is accepted by a Critical Vendor, it will become the agreement which governs their relationship with the Debtors. Accordingly, the Debtors will seek the Court's authority to enter into the Agreements, if and at the time when the Debtors determine in their discretion that an agreement is necessary to their postpetition operations. The Debtors also explicitly seek authority to make payments on account of the Critical Vendor's claims in the event that no Agreement has been reached, if the Debtors determine that failure to pay the Critical Vendor Claim is likely to result in irreparable harm to the Debtors' business operations. For the Critical Vendors who have agreed to continue on terms other than their Customary Terms, the Debtors reserve the right to obtain written acknowledgment of the terms on a case-by-case basis. If a Critical Vendor refuses to provide services to the Debtors on Customary Terms following receipt of payment of its Critical Vendor Claim, or fails to comply with any Agreement entered into, the Debtors seek authority to, in their discretion and without further Court order, (a) declare that any Agreement between the Debtors and the Critical Vendor is terminated, and (b) declare that provisional payments made to Critical Vendors on account of Critical Vendor Claims be deemed to have been in payment of then- outstanding postpetition claims of the vendors. The Critical Vendor against which the rights are exercised must immediately return any payments made to it on account of its Critical Vendor Claims, to the extent that any payment exceed the postpetition claims of the vendor then outstanding without giving effect to any rights of setoff, claims, provision for payment of reclamation or trust fund claims, or otherwise. The Debtors propose that any Agreement terminated as a result of a Critical Vendor's refusal to comply with the terms be reinstated if: a. the determination is subsequently reversed by the Court, after notice and a hearing after a motion by the Critical Vendor, for good cause shown that the determination was materially incorrect; b. the underlying default under the Agreement was fully cured by the Critical Vendor not later than five business days after the Debtors' notification to the Critical Vendor that a default had occurred; and c. the Debtors, in their discretion, reach a favorable alternative agreement with the Critical Vendor. 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. An Official Committee of Unsecured Creditors have been appointed in the case. 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. 4, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Seeks to Assume 102 Vendor & Freelancer Contracts ------------------------------------------------------------- Pursuant to Sections 105(a) and 365(a) of the Bankruptcy Code, Ziff Davis Media, Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to assume 22 vendor executory contracts and 80 freelancer contracts. A list of the 22 executory contracts with vendors that provide services to the Debtors is available for free at: http://bankrupt.com/misc/Ziff_VendorExecutoryContracts.pdf A list of the 80 executory contracts with freelancers who provide the Debtors with editorial content is available for free at: http://bankrupt.com/misc/Ziff_FreelancerExecutoryContracts.pdf The Debtors have evaluated each of the Executory Contracts and have determined that the Executory Contracts are useful and beneficial to the Debtors' ongoing operations. Furthermore, the Debtors' assumption of the Executory Contracts will eliminate the uncertainty of counterparties to the Executory Contracts regarding whether the Debtors intend to continue their business relationships with the counterparties, the Debtors' proposed counsel, Carey D. Schreiber, Esq., at Winston & Strawn LLP, in New York, relates. Mr. Schreiber tells the Court that assumption of the Executory Contracts is a central component of the Debtors' strategy of minimizing the impact on the Debtors' operations while seeking to exit chapter 11 on an expedited basis. Mr. Schreiber further states that the Debtors have sufficient cash from operations and other cash collateral to make all payments due under the Executory Contracts. "The Debtors fully intend to make all the payments to the counterparties to the Executory Contracts in the ordinary course of business," Mr. Schreiber says. The Debtors intend to pay the Vendors' cure claims, which exceed $1,000,000; and the Freelancers' cure claims, which total $184,339. 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. An Official Committee of Unsecured Creditors have been appointed in the case. 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. 4, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) * Fitch Says 99% of Fixed-Rate Mortgages Is Still Refinanced ------------------------------------------------------------ Given the current lack of available liquidity in the capital markets, investors view refinancing of maturing loans a heightened risk for U.S. CMBS. Reflecting this investor concern, Fitch Ratings looked closely at the performance of recently matured U.S. CMBS loans and their ability to refinance in the stressed credit environment. Fitch found that despite market issues, 99% of all maturing fixed-rate mortgages still refinanced. A total of 3,354 U.S. CMBS fixed rate loans with a balance of $21.4 billion have been refinanced since Aug. 1, 2007 when the credit crunch began. The majority of maturing loans were 10-year fixed-rate loans with the highest concentration in the 1997 through 1999 vintages. By property type, 927 loans backed by multifamily assets experienced the most refinance activity with $5 billion (23%) refinanced during the last eight months. This was followed by 744 retail loans at $4.7 billion (22%), 218 hotel loans at $4.5 billion (21.2%) and 449 office loans at $3.3 billion (15.6%). The geographic concentration of recent maturities is similar to that of most CMBS transactions. By state the maturities were concentrated with $3.7 billion in New York (18%), $3.3 billion in California (15.4%), $1.9 billion in Florida (9%), and $1.6 billion in Texas (7.8%). 'The diversity of property type and geographic distribution of recent refinancing activity shows that debt capital is still widely available for commercial real estate,' said Susan Merrick, Managing Director and head of U.S. CMBS for Fitch Ratings. Fitch found that low leverage and high existing coupons contributed to the ability of loans to refinance in a more restrictive lending environment. New lenders are typically insurance companies and regional banks. Fitch noted that refinancing activity has continued at a strong and steady pace in 2008 as demonstrated by the successful payoff of 1,273 loans during the first two months of the year. 'The fact that $8.2 billion of U.S. CMBS loans have already refinanced this year shows the commercial real estate debt market continues to function so far this year,' said Senior Director Adam Fox. Fitch expects that the $28.5 billion CMBS fixed-rate loans coming due in the balance of 2008 in the transactions it monitors will continue to be easily refinanced. Fitch identified 58 non-performing U.S CMBS loans with an outstanding balance of $231.3 million that have passed their maturity without full payoffs since Jan. 1, 2008. In total, only 1% by dollar balance of these scheduled maturities have become non-performing. Historically, in these cases Fitch has observed that borrowers often work with servicers to pay off their loans within 30-to-60 days. The majority of these non-performing loans are backed by traditional asset types such as retail (37%) and multifamily (33%) properties. The largest non-performing loan of the 58 in question was a $28 million loan secured by a group of cross-collateralized and cross-defaulted multifamily properties in North Carolina in the DLJ 1998-CF1 transaction. The loan was scheduled to mature on Jan. 1, 2008 and paid off in full on Feb. 29, 2008 without a principal loss to the trust. 'While the capital market lenders are not active sources of capital for commercial real estate properties, the level of refinance activity for maturing CMBS loans shows that other lenders are willing and able to provide capital to these properties,' said Merrick. * S&P Downgrades 195 Tranches' Ratings From 32 Cash Flows and CDOs ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 195 tranches from 32 U.S. cash flow and hybrid collateralized debt obligation transactions. The downgraded tranches have a total issuance amount of $39.58 billion. The ratings on 58 of the downgraded tranches from 18 transactions remain on CreditWatch with negative implications, indicating a significant likelihood of further downgrades. The CreditWatch placements primarily affect transactions for which a significant portion of the collateral assets currently have ratings on CreditWatch negative. Thirty of the 32 transactions are high-grade structured finance CDOs of asset-backed securities, which are CDOs collateralized at origination primarily by 'AAA' through 'A' rated tranches of residential mortgage-backed securities and other SF securities. The other two transactions are CDO of SF CDO transactions collateralized by notes from other CDOs. This 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 including actions on both publicly and confidentially rated tranches, S&P have lowered its rating one or more times on 2,883 tranches from 655 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, 642 ratings from 182 transactions are currently on CreditWatch negative for the same reasons. In all, S&P has downgraded $294.64 billion of CDO issuance, and its ratings on an additional $62.32 billion in securities have not been lowered but are currently on CreditWatch negative, indicating a high likelihood of downgrade. Standard & Poor's will continue to monitor the CDO transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Rating and CreditWatch Actions Rating ------ Transaction Class To From ----------- ----- -- ---- Altius III Fdg Ltd. S AAA AAA/Watch Neg Altius III Fdg Ltd. A-1a BBB AAA/Watch Neg Altius III Fdg Ltd. A-1a-2 BBB- AAA/Watch Neg Altius III Fdg Ltd. A-1a-3 BBB- AAA/Watch Neg Altius III Fdg Ltd. A-1b-1B BBB- AAA/Watch Neg Altius III Fdg Ltd. A-1b-1F BBB- AAA/Watch Neg Altius III Fdg Ltd. A-1b-V BBB- AAA/Watch Neg Altius III Fdg Ltd. A-2 B+ AAA/Watch Neg Altius III Fdg Ltd. B CCC- AA/Watch Neg Altius III Fdg Ltd. C CC A/Watch Neg Altius III Fdg Ltd. D CC BBB-/Watch Neg Altius III Fdg Ltd. E CC BB/Watch Neg Barrington II CDO Ltd. A1J-M BB-/Watch Neg AAA/Watch Neg Barrington II CDO Ltd. A1J-Q BB-/Watch Neg AAA/Watch Neg Barrington II CDO Ltd. A2 CCC-/Watch Neg AAA/Watch Neg Barrington II CDO Ltd. A-3 CC AAA/Watch Neg Barrington II CDO Ltd. B CC AA/Watch Neg Barrington II CDO Ltd. C CC A/Watch Neg Barrington II CDO Ltd. D CC BBB/Watch Neg Barrington II CDO Ltd. X AAA AAA/Watch Neg Belle Haven ABS CDO 2006-1 A-1 BBB- AAA/Watch Neg Belle Haven ABS CDO 2006-1 A-2 CCC AAA/Watch Neg Belle Haven ABS CDO 2006-1 B CC AA/Watch Neg Belle Haven ABS CDO 2006-1 C CC A/Watch Neg Belle Haven ABS CDO 2006-1 D CC BBB/Watch Neg Belle Haven ABS CDO 2006-1 E CC BB+/Watch Neg Broderick CDO 2 Ltd. A-1AT AAA AAA/Watch Neg Broderick CDO 2 Ltd. A-1B CCC+/Watch Neg AAA/Watch Neg Broderick CDO 2 Ltd. A-1AD AAA AAA/Watch Neg Broderick CDO 2 Ltd. A-2 CCC/Watch Neg AAA/Watch Neg Broderick CDO 2 Ltd. B CC AA/Watch Neg Broderick CDO 2 Ltd. C CC A/Watch Neg Broderick CDO 2 Ltd. D CC BBB/Watch Neg Broderick CDO 2 Ltd. E CC BB+/Watch Neg Buckingham CDO III Ltd. A ST BB+ AAA/Watch Neg Buckingham CDO III Ltd. B B AAA/Watch Neg Buckingham CDO III Ltd. C CCC+ AA/Watch Neg Buckingham CDO III Ltd. D CCC- BBB/Watch Neg CEAGO ABS CDO 2007-1 Ltd. A-1 BB AAA/Watch Neg CEAGO ABS CDO 2007-1 Ltd. A-2 CCC+ AAA/Watch Neg CEAGO ABS CDO 2007-1 Ltd. B CCC AA/Watch Neg CEAGO ABS CDO 2007-1 Ltd. C CCC- A/Watch Neg CEAGO ABS CDO 2007-1 Ltd. D CC BBB+/Watch Neg CEAGO ABS CDO 2007-1 Ltd. S A AAA/Watch Neg Citius I Funding Ltd. A-ST BBB-/A-3 AAA/A-1+ Citius I Funding Ltd. A-1 BB- AAA/Watch Neg Citius I Funding Ltd. A-2 B+ AAA/Watch Neg Citius I Funding Ltd. B CCC+ AA/Watch Neg Citius I Funding Ltd. C CC A/Watch Neg Citius I Funding Ltd. D CC BBB/Watch Neg Citius I Funding Ltd. E CC BB+/Watch Neg Davis Square Funding VII A-1a B+/Watch Neg AAA/Watch Neg Davis Square Funding VII A-1b B+/Watch Neg AAA/Watch Neg Davis Square Funding VII A-2 B-/Watch Neg AAA/Watch Neg Davis Square Funding VII A-3 CCC-/Watch Neg AAA/Watch Neg Davis Square Funding VII B CC AA/Watch Neg Davis Square Funding VII C CC A/Watch Neg Davis Square Funding VII D CC BBB/Watch Neg Davis Square Funding VII S AA AAA/Watch Neg Duke Funding High Grade V A-1 AA- AAA/Watch Neg Duke Funding High Grade V A-2 BB+ AAA/Watch Neg Duke Funding High Grade V B B AA/Watch Neg Duke Funding High Grade V C CCC+ A+/Watch Neg Duke Funding High Grade V D CCC- BBB/Watch Neg Grand Avenue CDO I Ltd. A-1A BBB+ AAA/Watch Neg Grand Avenue CDO I Ltd. A-1B BBB+ AAA/Watch Neg Grand Avenue CDO I Ltd. A-2 BBB- AAA/Watch Neg Grand Avenue CDO I Ltd. B BB+ AA/Watch Neg Grand Avenue CDO I Ltd. C CCC- A/Watch Neg Grand Avenue CDO I Ltd. D CC BB-/Watch Neg Grand Avenue CDO I Ltd. E-1 CC B-/Watch Neg Grand Avenue CDO I Ltd. E-2 CC B-/Watch Neg Grand Avenue CDO II Ltd. A-1A A-/Watch Neg AAA/Watch Neg Grand Avenue CDO II Ltd. A-1B BB-/Watch Neg AAA/Watch Neg Grand Avenue CDO II Ltd. A-2 B+/Watch Neg AAA/Watch Neg Grand Avenue CDO II Ltd. A-3 CCC+/Watch Neg AAA/Watch Neg Grand Avenue CDO II Ltd. B CCC-/Watch Neg AA/Watch Neg Grand Avenue CDO II Ltd. C CC A-/Watch Neg Grand Avenue CDO II Ltd. D CC BBB/Watch Neg Harp High Grade CDO I Ltd. A-1 AAA AAA/Watch Neg Harp High Grade CDO I Ltd. A-2 AA AAA/Watch Neg Harp High Grade CDO I Ltd. B A AA/Watch Neg Harp High Grade CDO I Ltd. C BBB+ AA-/Watch Neg Harp High Grade CDO I Ltd. D CCC BBB/Watch Neg Ischus High Grade Funding I A1 S AA AAA Ischus High Grade Funding I A2 A+ AA Ischus High Grade Funding I A3 BB A Ischus High Grade Funding I B CCC- BBB/Watch Neg Ischus High Grade Funding I C CC BB+/Watch Neg Istana High Grade ABS CDO I A-1 AAA AAA/Watch Neg Istana High Grade ABS CDO I A-2 B AAA/Watch Neg Istana High Grade ABS CDO I A-3 CCC- AAA/Watch Neg Istana High Grade ABS CDO I A-4 CC AAA/Watch Neg Istana High Grade ABS CDO I B CC AA/Watch Neg Istana High Grade ABS CDO I C CC BB/Watch Neg Istana High Grade ABS CDO I D CC BB-/Watch Neg Istana High Grade ABS CDO I E CC B/Watch Neg Jupiter High-Grade CDO IV Ltd A-1A BBB-/Watch Neg AAA/Watch Neg Jupiter High-Grade CDO IV Ltd A-1B BBB-/Watch Neg AAA/Watch Neg Jupiter High-Grade CDO IV Ltd A-2 B-/Watch Neg AAA/Watch Neg Jupiter High-Grade CDO IV Ltd B CCC+/Watch Neg AA/Watch Neg Jupiter High-Grade CDO IV Ltd C CCC/Watch Neg AA-/Watch Neg Jupiter High-Grade CDO IV Ltd D CC A-/Watch Neg Jupiter High-Grade CDO IV Ltd E CC BBB+/Watch Neg Jupiter High-Grade CDO IV Ltd F CC BBB/Watch Neg Kleros Preferred Funding IX A-1 AA-/Watch Neg AAA/Watch Neg Kleros Preferred Funding IX A-2 B+/Watch Neg AAA/Watch Neg Kleros Preferred Funding IX A-3 CCC+/Watch Neg AAA/Watch Neg Kleros Preferred Funding IX B CCC/Watch Neg AA/Watch Neg Kleros Preferred Funding IX C CC A/Watch Neg Kleros Preferred Funding IX D CC BBB/Watch Neg Kleros Preferred Funding VII A-1 BBB+/Watch Neg AAA/Watch Neg Kleros Preferred Funding VII A-2 CCC/Watch Neg AAA/Watch Neg Kleros Preferred Funding VII A-3 CCC-/Watch Neg AAA/Watch Neg Kleros Preferred Funding VII A-4 CC AAA/Watch Neg Kleros Preferred Funding VII B CC AA-/Watch Neg Kleros Preferred Funding VII C CC BBB/Watch Neg Kleros Preferred Funding VII D CC CCC-/Watch Neg Longshore CDO Funding 2007-3 A-1 AAA AAA/Watch Neg Longshore CDO Funding 2007-3 A-2 CCC AAA/Watch Neg Longshore CDO Funding 2007-3 A-3 CCC- AAA/Watch Neg Longshore CDO Funding 2007-3 B CC AA/Watch Neg Longshore CDO Funding 2007-3 C CC A/Watch Neg Longshore CDO Funding 2007-3 D CC BBB-/Watch Neg Markov CDO I Ltd. A-0 CCC-/Watch Neg BB/Watch Neg Markov CDO I Ltd. A-3 CC CCC-/Watch Neg Markov CDO I Ltd. B CC CCC-Watch Neg Markov CDO I Ltd. S B-/Watch Neg BB/Watch Neg NEO CDO 2007-1 Ltd. A-1 CCC-/Watch Neg BB/Watch Neg NEO CDO 2007-1 Ltd. A-2 CC CCC-/Watch Neg NEO CDO 2007-1 Ltd. A-3 CC CCC-/Watch Neg NEO CDO 2007-1 Ltd. B CC CCC-/Watch Neg NEO CDO 2007-1 Ltd. C CC CCC-/Watch Neg North Cove CDO III Ltd. A BB+ AAA/Watch Neg North Cove CDO III Ltd. B B+ AA-/Watch Neg North Cove CDO III Ltd. C CCC+ A-/Watch Neg North Cove CDO III Ltd. D CCC- BBB/Watch Neg North Cove CDO III Ltd. E CC BB+/Watch Neg North Cove CDO III Ltd. Super Sr A+ AAA/Watch Neg Orient Point CDO II Ltd. A B+/Watch Neg AAA/Watch Neg Orient Point CDO II Ltd. B B-/Watch Neg AAA/Watch Neg Orient Point CDO II Ltd. C CCC/Watch Neg AA/Watch Neg Orient Point CDO II Ltd. D CCC-/Watch Neg A/Watch Neg Orient Point CDO II Ltd. E CC BBB/Watch Neg Pampelonne CDO I Ltd. A-1 CCC-/Watch Neg BB/Watch Neg Pampelonne CDO II Ltd. A-1 CCC-/Watch Neg BB/Watch Neg Pampelonne CDO II Ltd. S B-/Watch Neg BB/Watch Neg PASA Funding 2007 Ltd. A-1A BB/B Watch Neg AAA/A1+WatchNeg PASA Funding 2007 Ltd. A-1B BB/Watch Neg AAA PASA Funding 2007 Ltd. A-2 CCC-/Watch Neg AAA/Watch Neg PASA Funding 2007 Ltd. B CCC-/Watch Neg AA/Watch Neg PASA Funding 2007 Ltd. C CC A/Watch Neg PASA Funding 2007 Ltd. CP BB/B Watch Neg AAA/A-1+ PASA Funding 2007 Ltd. D CC BBB/Watch Neg PASA Funding 2007 Ltd. X CCC-/Watch Neg AAA/Watch Neg Pacific Pinnacle CDO Ltd. A-1LA BBB/Watch Neg AAA/Watch Neg Pacific Pinnacle CDO Ltd. A-1LB CCC+/Watch Neg AAA/Watch Neg Pacific Pinnacle CDO Ltd. A-1LC CCC-/Watch Neg AAA/Watch Neg Pacific Pinnacle CDO Ltd. A-2L CC AA/Watch Neg Pacific Pinnacle CDO Ltd. A-3L CC A/Watch Neg Pacific Pinnacle CDO Ltd. B-1L CC BBB/Watch Neg Pacific Pinnacle CDO Ltd. X BBB/Watch Neg AAA/Watch Neg Rockville CDO I Ltd. A-2 B-/Watch Neg AAA/Watch Neg Rockville CDO I Ltd. A-3 CCC/Watch Neg AAA/Watch Neg Rockville CDO I Ltd. B CCC-/Watch Neg AA/Watch Neg Rockville CDO I Ltd. C CCC-/Watch Neg AA-/Watch Neg Rockville CDO I Ltd. D CC A-/Watch Neg Rockville CDO I Ltd. E CC BB/Watch Neg Silver Elms CDO II Ltd. A-1M A-/Watch Neg AAA/Watch Neg Silver Elms CDO II Ltd. A-1Q A-/Watch Neg AAA/Watch Neg Silver Elms CDO II Ltd. A-2 BB/Watch Neg AAA/Watch Neg Silver Elms CDO II Ltd. A-3 CCC+/Watch Neg AAA/Watch Neg Silver Elms CDO II Ltd. B CC AA/Watch Neg Silver Elms CDO II Ltd. C CC A/Watch Neg Silver Elms CDO II Ltd. D CC BBB/Watch Neg Tazlina Funding CDO II Ltd. A-1 AAA AAA/Watch Neg Tazlina Funding CDO II Ltd. A-2 CCC- AAA/Watch Neg Tazlina Funding CDO II Ltd. A-3 CC AAA/Watch Neg Tazlina Funding CDO II Ltd. B CC AA/Watch Neg Tazlina Funding CDO II Ltd. C CC AA-/Watch Neg Tazlina Funding CDO II Ltd. D CC A/Watch Neg Tazlina Funding CDO II Ltd. E CC BBB/Watch Neg Timberwolf I A-1a A+/Watch Neg AAA/Watch Neg Timberwolf I A-1b BBB+/Watch Neg AAA/Watch Neg Timberwolf I A-1c BB-/Watch Neg AAA/Watch Neg Timberwolf I A-1d CCC+/Watch Neg AAA/Watch Neg Timberwolf I A-2 CC AAA/Watch Neg Timberwolf I B CC AA/Watch Neg Timberwolf I C CC A/Watch Neg Timberwolf I D CC BBB/Watch Neg Timberwolf I S2 CC AAA/Watch Neg Verde CDO Ltd. A-1 AA AAA/Watch Neg Verde CDO Ltd. A-2 BBB- AAA/Watch Neg Verde CDO Ltd. B B AA/Watch Neg Verde CDO Ltd. C CCC- A/Watch Neg Verde CDO Ltd. D CC BBB/Watch Neg Wadsworth CDO Ltd. A-1A AA+ AAA/Watch Neg Wadsworth CDO Ltd. A-1B AA+ AAA/Watch Neg Wadsworth CDO Ltd. A-2 BBB AAA/Watch Neg Wadsworth CDO Ltd. B CCC AA/Watch Neg Wadsworth CDO Ltd. C CC A/Watch Neg Wadsworth CDO Ltd. D CC BBB/Watch Neg Wadsworth CDO Ltd. S-1A CC BB+/Watch Neg Other Outstanding Ratings Transaction Class Rating ----------- ----- ------ Barrington II CDO Ltd A1-S AAA/Watch Neg Barrington II CDO Ltd. A1-M AAA/Watch Neg Barrington II CDO Ltd. A1-Q AAA/Watch Neg Buckingham CDO III Ltd. E CC Buckingham CDO III Ltd. Income Nts CC Ischus High Grade Funding I A1 J AAA Markov CDO I Ltd. A-1 CCC-/Watch Neg Markov CDO I Ltd. A-2 CCC-/Watch Neg Markov CDO I Ltd. C ComboNts CC Markov CDO I Ltd. C-1 CC Markov CDO I Ltd. C-2 CC Markov CDO I Ltd. D CC Markov CDO I Ltd. D ComboNts CC Markov CDO I Ltd. E CC Markov CDO I Ltd. RA Nts CCC- NEO CDO 2007-1 Ltd. D CC NEO CDO 2007-1 Ltd. E CC NEO CDO 2007-1 Ltd. F CC Pampelonne CDO I Ltd. A-2 CCC-/Watch Neg Pampelonne CDO I Ltd. B CC Pampelonne CDO I Ltd. C CC Pampelonne CDO I Ltd. D CC Pampelonne CDO I Ltd. E CC Pampelonne CDO I Ltd. S BB/Watch Neg Pampelonne CDO II Ltd. A-2 CCC-/Watch Neg Pampelonne CDO II Ltd. A-3 CCC-/Watch Neg Pampelonne CDO II Ltd. B CC Pampelonne CDO II Ltd. C CC Pampelonne CDO II Ltd. D CC Pampelonne CDO II Ltd. E CC Rockville CDO I Ltd. A-1 AAA/Watch Neg * S&P Downgrades Ratings on 30 Classes From 17 RMBS Transactions ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 30 classes from 17 residential mortgage-backed securities transactions backed by U.S. subprime mortgage loan collateral issued in 2006. At the same time, S&P removed all of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on 27 classes from 11 RMBS transactions backed by U.S. subprime loans and removed them from CreditWatch negative. All of the revised ratings were placed on CreditWatch negative on Jan. 30, 2008. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given S&P's current projected losses. S&P calculated its projected deal-specific losses utilizing 2006 subprime default curves. Due to current market conditions, S&P is assuming that it will take approximately 15 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. In addition, S&P is assuming a loss severity of approximately 45% for U.S. subprime RMBS transactions issued in 2006. The lowered ratings reflect S&P's assessment of credit support under two constant prepayment rate scenarios. The first scenario utilizes the lower of the lifetime or 12-month CPR, while the second utilizes a six-month CPR, which is very slow by historical standards. S&P assumed a constant default rate for each pool. Because the analysis focused on each individual class with varying maturities, prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates. Standard & Poor's has updated its projected excess spread to account for the recent cuts in U.S. interest rates. In an upwardly sloping mortgage rate environment, Standard & Poor's announced that it would be discounting a portion of excess spread to account for potential interest rate modifications. An interest rate modification may extend the initial fixed-rate period of a mortgage loan to five years from two and three years. The reduction in interest rates has effectively extended the initial interest rates beyond the interest rate reset period. As a result of the reduction in excess spread, many loan modifications may no longer be needed. Standard & Poor's has updated its assumptions on excess spread to reflect the current environment. In assessing the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. For pools that are continuing to show increasing delinquencies, S&P increased its cash flow stresses to account for potential increases in monthly losses. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base case assumption S&P assumed in its analysis. For example, a class may have to withstand 115% of S&P's base case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand 125% of S&P's base case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of S&P's base case loss assumptions under S&P's analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 90% of the current pool balances. A combination of subordination, excess spread, and overcollateralization provide credit support for the affected transactions. The underlying collateral for these deals consists of fixed- and adjustable-rate U.S. subprime mortgage loans that are secured by first and second liens on one- to four-family residential properties. To date, including the classes listed below and actions on both publicly and confidentially rated classes, S&P has resolved the CreditWatch placements of 568 classes from 124 U.S. RMBS subprime transactions from the 2006 and 2007 vintages. Currently, S&P's ratings on 2,036 classes from 391 U.S. RMBS subprime transactions from the 2006 and 2007 vintages are on CreditWatch negative. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Ratings Lowered and Removed From CreditWatch Negative Ace Securities Corp Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-ASAP2 M-4 A+ AA+/Watch Neg 2006-ASAP2 M-5 BBB AA/Watch Neg 2006-ASAP2 M-6 BB AA/Watch Neg 2006-ASAP2 M-7 B AA-/Watch Neg BASIC Asset Backed Securities Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-1 M2 B AA-/Watch Neg Citigroup Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-CB3 M-3 BBB AA-/Watch Neg Fremont Home Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-2 M-3 A AA-/Watch Neg Home Equity Asset Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-3 M-5 BBB AA-/Watch Neg HSI Asset Securitization Corp. Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-OPT3 M-3 A AA/Watch Neg 2006-OPT3 M-4 BB AA/Watch Neg 2006-OPT3 M-5 B AA-/Watch Neg JPMorgan Mortgage Acquisition Corp. Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-FRE2 M-3 BBB AA-/Watch Neg JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-NC1 M-1 AA AA+/Watch Neg 2006-NC1 M-2 B AA/Watch Neg 2006-NC1 M-3 CCC AA-/Watch Neg Long Beach Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-3 M-1 BBB AA+/Watch Neg Merrill Lynch Mortgage Investors Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-HE2 M-4 BBB AA/Watch Neg 2006-WMC2 M-2 BBB AA/Watch Neg 2006-WMC2 M-3 BB AA/Watch Neg 2006-WMC2 M-4 B AA-/Watch Neg Morgan Stanley ABS Capital I Inc. Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-NC3 M-2 BBB AA/Watch Neg 2006-NC3 M-3 BB AA-/Watch Neg Morgan Stanley Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-2 M-4 BBB AA-/Watch Neg Ownit Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-3 M-5 BBB AA/Watch Neg 2006-3 M-6 BB AA-/Watch Neg Specialty Underwriting and Residential Finance Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-BC2 M-3 A AA/Watch Neg 2006-BC2 M-4 BB AA/Watch Neg Structured Asset Securities Corp. Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-AM1 M2 BB AA/Watch Neg 2006-AM1 M3 CCC AA-/Watch Neg 2006-OPT1 M2 BBB AA/Watch Neg Ratings Removed From CreditWatch Negative Citigroup Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-CB3 M-2 AA AA/Watch Neg 2006-HE1 M-3 AA AA/Watch Neg 2006-HE1 M-4 AA- AA-/Watch Neg Fremont Home Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-2 M-2 AA AA/Watch Neg HSI Asset Securitization Corporation Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-OPT3 M-2 AA+ AA+/Watch Neg 2006-OPT4 M-1 AA AA/Watch Neg 2006-OPT4 M-2 AA AA/Watch Neg JPMorgan Mortgage Acquisition Corp. Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-FRE2 M-1 AA+ AA+/Watch Neg 2006-FRE2 M-2 AA AA/Watch Neg JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-NC1 A-1 AAA AAA/Watch Neg 2006-NC1 A-3 AAA AAA/Watch Neg 2006-NC1 A-4 AAA AAA/Watch Neg 2006-NC1 A-5 AAA AAA/Watch Neg Long Beach Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-3 I-A AAA AAA/Watch Neg 2006-3 II-A1 AAA AAA/Watch Neg 2006-3 II-A2 AAA AAA/Watch Neg 2006-3 II-A3 AAA AAA/Watch Neg 2006-3 II-A4 AAA AAA/Watch Neg Merrill Lynch Mortgage Investors Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-HE2 M-3 AA AA/Watch Neg Morgan Stanley Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-2 M-2 AA AA/Watch Neg 2006-2 M-3 AA AA/Watch Neg Structured Asset Securities Corporation Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2006-AM1 A1 AAA AAA/Watch Neg 2006-AM1 A2 AAA AAA/Watch Neg 2006-AM1 A3 AAA AAA/Watch Neg 2006-AM1 A4 AAA AAA/Watch Neg 2006-AM1 A5 AAA AAA/Watch Neg 2006-AM1 M1 AA+ AA+/Watch Neg * S&P Puts Aircraft Issuances on Negative Watch on High Fuel Rates ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its ratings on selected tranches from five aircraft securitizations issued between 1999 and 2003 on CreditWatch with negative implications. The CreditWatch placements primarily reflect the interplay between a slowing global economy, rapidly increasing fuel prices, and the fact that most of the aircraft in these transactions are less fuel-efficient than the current generation of planes. These securitizations have significant concentrations of leases on aircraft built in the 1980s, some of which will likely become economically obsolete earlier than originally anticipated. These planes, particularly older B737s and MD80s, and, to a lesser extent, B757s and B767s, are less fuel-efficient than newer models, a disadvantage that has been substantially magnified by the surge in jet fuel prices since 2004. In addition, the high probability of a slowing global economy, and an outright recession in the U.S., will likely cool recent strong demand for certain leased aircraft, increasing re-leasing risk. The combination of rising fuel prices and other economic risks prompted us to review S&P's ratings on the outstanding securities associated with these transactions. Within the next 90 days, Standard & Poor's will review all of the securities with ratings placed on CreditWatch negative to determine to what extent, if any, additional rating actions are warranted. While S&P expects some downgrades to be greater than two rating categories, not all rating actions will be that significant. Ratings Placed on CreditWatch Negative AerCo Ltd. Rating ------ Class To From ----- -- ---- A-3 BBB/Watch Neg BBB/Stable A-4 A/Watch Neg A/Stable Aviation Capital Group Trust Rating ------ Class To From ----- -- ---- A-1 BBB/Watch Neg BBB/Stable B-1 BB-/Watch Neg BB-/Stable C-1 B/Watch Neg B/Negative D-1 CCC/Watch Neg CCC/Negative Aviation Capital Group Trust II Rating ------ Class To From ----- -- ---- B-1 A/Watch Neg A/Stable Lease Investment Flight Trust Rating ------ Class To From ----- -- ---- A-1 BB+/Watch Neg BB+/Negative A-2 BB+/Watch Neg BB+/Negative A-3 A/Watch Neg A/Negative Aircraft Finance Trust Rating ------ Class To From ----- -- ---- A-1 B+/Watch Neg B+/Stable * National Association of Realtors Says February Home Sales Rise ---------------------------------------------------------------- The National Association of Realtors related that existing-home sales - including single-family, townhomes, condominiums and co- ops - rose 2.9% to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8% below the 6.60 million-unit level in February 2007. The sales pace has been in a narrow range since last September. "The gain is encouraging," Lawrence Yun, NAR chief economist, said. "We're not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing. Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year." The national median existing-home price for all housing types was $195,900 in February, down 8.2% from a year earlier when the median was $213,500. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets. Home prices within metropolitan areas are more telling. The recent data shows roughly half of the metro areas in the U.S. with price increases, with healthy gains in markets such as Oklahoma City and Trenton, New Jersey. "In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising," Mr. Yun said. "The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers." According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.92% in February from 5.76% in January; the rate was 6.29% in February 2007. "Negotiation and knowledge are even more important in the current market," Richard F. Gaylord, NAR president, a broker with RE/MAX Real Estate Specialists in Long Beach, California, said. "Consumers need to be aware of local market conditions and comparable sales prices to have a clear picture of a home's value. Realtors(R) understanding of local markets, negotiating expertise, and transaction experience are invaluable to both buyers and sellers, as much as ever." Total housing inventory fell 3.0% at the end of February to 4.03 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace, down from a 10.2-month supply in January. Single-family home sales increased 2.8% to a seasonally adjusted annual rate of 4.47 million in February from an upwardly revised 4.35 million in January, but are 22.9% below 5.80 million-unit level a year ago. The median existing single-family home price was $193,900 in February, down 8.7% from February 2007. Existing condominium and co-op sales rose 3.7% to a seasonally adjusted annual rate of 560,000 units in February from a downwardly revised 540,000 in January, and are 29.7% below the 797,000-unit pace in February 2007. The median existing condo price was $211,700 in February, which is 4.9% lower than a year ago. Regionally, existing-home sales in the Northeast jumped 11.3% to an annual pace of 890,000 in February, but are 26.4% below February 2007. The median price in the Northeast was $264,800, up 0.4% from a year ago. Existing-home sales in the Midwest rose 2.5% in February to a level of 1.24 million but are 19.5% below a year ago. The median price in the Midwest was $143,900, which is 7.1% lower than February 2007. In the South, existing-home sales increased 2.1% to an annual rate of 1.99 million in February but are 22.0% below February 2007. The median price in the South was $163,400, down 8.6% from a year ago. Existing-home sales in the West slipped 1.1% to an annual rate of 920,000 in February, and are 29.2% below a year ago. The median price in the West was $290,400, down 13.4% from February 2007. About The National Association of Realtors The National Association of Realtors(R) is a trade association, representing 1.3 million members, including NAR's institutes, societies and councils, involved in all aspects of the residential and commercial real estate industries. Its membership is composed of residential and commercial realtors(R), who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry. Members belong to one or more of some 1,600 local associations/boards and 54 state and territory associations of Realtors(R). They are pledged to a strict Code of Ethics and Standards of Practice. * Charles Rotblut of Zacks.com Releases Industry Rank Analysis -------------------------------------------------------------- Charles Rotblut, CFA, senior market analyst for Zacks.com released the latest Zacks Industry Rank Analysis which included Bear Stearns, Goldman Sachs, Lehman Brothers, Morgan Stanley and Mosaic. Both Goldman Sachs and Lehman Brothers beat earnings expectations for first-quarter earnings week. Morgan Stanley also surpassed estimates. Revenues for all three firms declined because of losses in the credit markets. Goldman Sachs recorded $2 billion of losses due to mortgage-related and other fixed-income securities. Britain's Telegraph had predicted $3 billion in write downs, based on an unnamed source. Lehman Brothers wrote down $1.8 billion because of losses in the debt markets. Morgan Stanley incurred $2.3 billion in writedowns. Investment banking revenues were mixed. GS said revenues declined, while LEH generated a 2% increase and MS enjoyed a 19% increase. The tough market conditions and ongoing credit crunch has significantly reduced the number of deals being closed this year. Fewer deals mean lower revenues for investment banking firms. Notably, investment management was a source of growth for GS and LEH. The firms were able to pass through higher fees, resulting in higher revenues despite basically no change in assets under management. MS also realized higher fees, but the company incurred a loss because of its real estate investments. Overall, the numbers cleared substantially lowered hurdles. The numbers were not very good, but they were not as bad as many feared, which is a positive. There has been an erosion of trust and many had feared a very bad scenario for Lehman, in particular. The fact that the numbers were not horrible led to restoration of trust, at least temporarily, which is significant. The reason why trust is so important is that these firms are engaged in the business of making deals and trading securities. Often these firms use margin to buy leveraged securities. In other words, they are borrowing money to buy securities that are comprised of other loans. These companies also float money to get deals closed and engage in various transactions where the other party needs to have reasonable expectation of being paid. Fears that a financial firm may not be able to fulfill its obligations can be fatal. It is such fear that led to the collapse of Bear Stearns. Lehman has been aggressive in responding to rumors about its fiscal health. The company also provided detailed information about its liquidity at the top of its earnings release, an unusual step. Mr. Rotblut do not follow LEH closely enough to directly comment on the firm's fiscal stability, but LEH is clearly trying to preempt a fire while there is just a little smoke. This is important, because in the financial industry, perception can be reality. It is too early to tell what the change in the consensus earnings estimates will be for all three firms. Mr. Rotblut would not be surprised to see some temporary upward revisions in the coming days, but he also think this could be more an adjustment than an actual change in sentiment. The financial sector as a whole continues to account for a disproportionate share of negative revisions and I don't see this changing over the short-term. Moving on... Full-year earnings estimates were recently raised on Mosaic and other fertilizer companies. The positive revisions extend a trend of increasingly higher profit projections and reflect optimism among brokerage analysts that demand for fertilizer will remain strong. Investors may want to keep an eye on the spring weather, which can be volatile. Any disruption in planting season could have an impact on many agricultural stocks and commodity prices. It's not something that Mr. Rotblut is specifically worried about, but it does present a seasonal risk that many new investors to the agricultural sector may not be considering. About Zacks Industry Rank and the Zacks Rank Zacks Industry Rank is calculated by averaging the Zacks Rank for all covered companies within a given industry. The Zacks Rank is assigned to approximately 4400 stocks and ranges from No. 1 or Strong Buy to No. 5 or "Strong Sell". Both the Zacks Industry Rank and the Zacks Rank are quantitative indicators designed to cover periods of 1-3 months. Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, No. 1 Rank stocks have generated an average annual return of +32%. During the 2000-2002 bear market, Zacks No. 1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations as Strong Buy recommendations. Since 1988, Zacks Rank NO. 5 stocks have underperformed the S&P 500 by 129% annually, +5 % vs. +12%. Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively. About Zacks Zacks.com -- http://at.zacks.com/-- is a property of Zacks Investment Research Inc., which was formed in 1978 by Leonard Zacks. Zacks Investment Research is under common control with affiliated entities, including a broker-dealer and an investment adviser, which may engage in transactions involving the foregoing securities for the clients of such affiliates. * Daniel Murdock and Philip Smith Joins Patton Boggs in New York ---------------------------------------------------------------- Patton Boggs disclosed the addition of two litigators as partners in its New York office. Daniel R. Murdock, a former chief assistant U.S. Attorney in the Southern District of New York, and Philip M. Smith join the firm's New York office as it continues to increase its footprint in New York City. Mr. Murdock has had extensive experience as lead defense counsel in a variety of civil and criminal litigation. Notably, he has served as lead defense counsel in some fraud class actions, including the Michael Milken-Drexel securities litigation, the multi-billion dollar lawsuits arising out of the Washington Public Power Supply System bond default, and the $4 billion Bre-X Indonesian gold scandal. Mr. Murdock previously served as chairman of Winston & Strawn's litigation department in New York, and chairman of the litigation department at Donovan Leisure Newton & Irvine. After law school, he was an assistant U.S. Attorney in the criminal division in the Southern District of New York. Mr. Murdock received his B.A. from Hamilton College and his L.L.B. from Harvard Law School. Mr. Smith brings more than 17 years of experience in representing both defendants and plaintiffs in litigation, governmental investigations and proceedings, cross-border disputes, and insolvency matters. Mr. Smith has represented foreign financial institutions, one of the largest foreign makers and retailers of eyewear, and one of the world's largest tobacco manufacturers in class actions, securities claims, and regulatory enforcement actions. He was also involved in defending a prominent businessman and his family worldwide in disputes arising out of the seizure of the BCCI bank. Mr. Smith graduated with an A.B. from Columbia College and earned his J.D. from Fordham University School of Law. Murdock and Smith have handled hundreds of state and federal actions, trials, and appeals; NASD, NYSE, AAA, and other private arbitrations; and SEC, Federal Reserve, FDIC, DOJ, and other administrative and criminal investigations and enforcement actions. At Patton Boggs they will continue to focus their practices on complex commercial and securities litigation, antitrust class actions, securities regulatory enforcement, cross- border disputes, and white-collar criminal defense. "We are very fortunate to have Dan and Phil join this firm," Jim Tyrrell, managing partner for the New York and New Jersey offices of Patton Boggs, said. "Both men bring outstanding experience to the table and their contributions will be immediate." "Dan and Phil are highly respected litigators," Mr. Tyrrell continued. "Their addition is in furtherance of a strategic goal of growing our litigation capabilities, not just in New York but nationally." Patton Boggs LLP Headquartered in Washington, District of Columbia, Patton Boggs -- http://www.pattonboggs.com-- is a full-service law firm employing more than 600 lawyers and professionals. The firm specializes in public policy, litigation, and business law, the latter of which is its largest practice area. The firm has continued to build its expertise in other practice areas including administrative and regulatory law, food and drug, health care, employment, intellectual property, and real estate. Patton Boggs is headquartered in Washington, DC and has offices in Anchorage, Alaska; Dallas; Denver; McLean, Virginia; Newark, New Jersey; New York; and Doha, Qatar. * Carren Shulman & Russell Reid Join Sheppard Mullin as Partners ---------------------------------------------------------------- Carren B. Shulman and Russell L. Reid, Jr. have joined the New York office of Sheppard Mullin Richter & Hampton LLP as partners in the firm's Finance and Bankruptcy practice group. Ms. Shulman and Mr. Reid recently with Heller Ehrman in New York, where she co-chaired the office's Summer Associate program and he chaired the New York Pro Bono committee and co-chaired the office's recruiting committee. Ms. Shulman focuses her practice on bankruptcy, commercial litigation, business reorganization and creditors' rights, with an emphasis on representing secured and unsecured creditors in transactions in and out of bankruptcy both domestically and internationally. She has represented debtors, committees, chapter 11 trustees, trade creditors and secured and unsecured lenders in bankruptcy and has advised corporate trustees in default administration. Ms. Shulman also has significant trial experience in commercial and employment litigation. Mr. Reid's practice focuses on the areas of creditors' rights, bankruptcy, and corporate reorganization, with particular emphasis on default administration for corporate trustees. On behalf of debtors, creditors, committees, indenture trustees and loan servicers, he has developed and negotiated disclosure materials and plans of reorganization, and has prosecuted and defended litigation involving the automatic stay, cash collateral, claim determination, debtor-in-possession financing and plan confirmation. "With Carren and Russell joining us, we continue to grow signature practice groups like Finance and Bankruptcy and expand national capabilities to better serve client needs on both coasts," said Guy Halgren, chairman of the firm. "In the current business climate where restructurings and insolvencies are on the upswing, their bankruptcy and commercial litigation expertise is of even greater value to clients." "Sheppard Mullin has a top-notch Finance and Bankruptcy group," Ms. Shulman commented. "I am impressed by its reputation as a 'go-to' firm for banking and restructuring clients, and am looking forward to working with Ed Tillinghast in New York." New York-based partner Edward H. Tillinghast III leads Sheppard Mullin's East Coast bankruptcy practice. Mr. Tillinghast specializes in corporate reorganizations and restructurings, cross-border insolvencies, creditors' rights litigation, and distressed mergers and acquisitions, advising distressed asset investors on high-yield investments and insolvency-related securitization opinions. "I am excited to grow the firm's New York bankruptcy practice with Ed, and Carren and I are very pleased to rejoin our former colleague Margaret Mann," Mr. Reid said. "Sheppard Mullin offers a strong platform for my practice, which includes the support needed to handle sophisticated bankruptcy and corporate trust matters." Two months ago Margaret M. Mann joined the San Diego office of Sheppard Mullin as partner in the firm's Finance and Bankruptcy practice group. Ms. Mann previously led Heller Ehrman's Restructuring and Insolvency practice and was the firm's National Hiring Chair. For ten years, Ms. Shulman has represented the interests of Goodrich Corporation in litigation and complex contract negotiations in nearly every airline bankruptcy worldwide. She represented the largest West Coast power company in a multi- billion dollar claim litigation against Enron Corp. Ms. Shulman was special counsel to WorldCom Inc. in In re WorldCom, U.S. Bankruptcy Court, S.D.N.Y., 2002. She represented secured lenders in debtor-in-possession financings in In re Indesco, U.S. Bankruptcy Court, S.D.N.Y., 2001; In re Cannondale, U.S. Bankruptcy Court, Connecticut, 2003; In re Henninger Media Services, U.S. Bankruptcy Court, Virgina, 2002. Mr. Reid's experience has encompassed for a number of years the representation of varie d deal parties in the mortgage backed securities arena. His expertise includes the interpretation and enforcement of pooling and servicing agreements, swap agreements, trust indentures, and other related documents, well as associated out-of-court restructurings and litigation. Mr. Reid has handled an array of business disputes before state and federal trial and appellate courts and regulatory agencies, well as before tribunals appointed by the American Arbitration Association and the National Association of Securities Dealers. He has significant experience with other types of alternative dispute resolution, including mediation and summary jury trials. Ms. Shulman received a B.A., magna cum laude, from State University of New York, Albany in 1988 and a J.D. from New York University Law School in 1991. Mr. Reid received a B.F.A., Journalism, magna cum laude, from Southern Methodist University in 1983, a B.B.A., cum laude, in 1984 and a J.D. from University of Texas School of Law in 1989. About Sheppard Mullin Richter & Hampton LLP Based in Los Angeles, California, Sheppard Mullin Richter & Hampton LLP -- http://www.sheppardmullin.com/-- is a full service AmLaw 100 firm with more than 520 attorneys in 10 offices located throughout California and in New York, Washington, D.C. and Shanghai. The firm's California offices are located in Los Angeles, San Francisco, Santa Barbara, Century City, Orange County, Del Mar Heights and San Diego. Founded in 1927 on the principle that the firm would succeed only if its attorneys delivered prompt, high quality and cost-effective legal services, Sheppard Mullin provides legal counsel to U.S. and international clients. Companies turn to Sheppard Mullin to handle a full range of corporate and technology matters, high stakes litigation and complex financial transactions. In the U.S., the firm's clients 7include more than half of the Fortune 100 companies. * Jason Paru Joins MorrisAnderson in Chicago Office --------------------------------------------------- Jason Paru joined MorrisAnderson's Chicago office as consultant. "We are very happy that [Mr. Paru] has joined MorrisAnderson," says Principal Howard Korenthal. "Jason brings strong analytical and hands-on experience to our turnaround and restructuring team." Mr. Paru's experience includes corporate turnaround management and restructuring services, private equity investing, mergers and acquisitions, and general corporate finance. He has been an adviser to distressed and under-performing companies, private equity investors, lenders, and other creditors in out-of-court restructurings and bankruptcy proceedings, well as debt restructurings and financings, liquidity management, cost containment/operational initiatives, Section 363 asset sales, business plan and strategic analyses, valuation analyses, litigation support, private equity investing, and mergers and acquisitions. Mr. Paru's restructuring experience with distressed and underperforming companies includes advising a $200 million manufacturer and distributor of food service equipment and supplies in a debt restructuring, liquidity management, and strategic planning initiative. He also performed a business plan assessment for a $190 million snack foods manufacturer and distributor, and advised the senior secured lenders of an $85 million pharmaceutical manufacturer on operational and financial restructuring initiatives, cash-flow forecasting, and business valuation. Mr. Paru's professional experience also includes four years of specializing in private equity investing, with a focus on leveraged buyouts, recapitalization, and growth equity investments across a wide range of industries. He has worked in the manufacturing, consumer products, business services, distribution, retail, telecommunications, textiles, and pharmaceuticals industries. Prior to joining MorrisAnderson, Mr. Paru was a vice president with the turnaround and restructuring practice of Mesirow Financial Consulting. He received his MBA from the University of Chicago Graduate School of Business and holds a bachelor's degree in economics from Northwestern University. He is a member of the Turnaround Management Association and the Association of Insolvency and Restructuring Advisors. About MorrisAnderson Chicago-based MorrisAnderson has offices in New York, Atlanta, Milwaukee, Los Angeles, Cleveland, Nashville and St. Louis. The firm's service offerings include performance improvement, financial advisory, investment banking, interim management, lender services, turnarounds, workouts, litigation support, valuation, information technology services, and insolvency services and wind- downs. MorrisAnderson emphasizes hands-on involvement for companies with $20 million to $200 million in annual sales. * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Robert J. Hirnschall dba Irma Tree Farm Bankr. W.D. Wis. Case No. 08-11208 Chapter 11 Petition filed March 18, 2008 See http://bankrupt.com/misc/wiwb08-11208.pdf In Re Kodiak Foods, LLC Bankr. N.D. Ala. Case No. 08-40553 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/alnb08-40553.pdf In Re Ridley Funeral Establishment, Inc. Bankr. D.C. Case No. 08-00188 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/dcb08-00188.pdf In Re Breezin, Inc. Bankr. S.D. Fla. Case No. 08-13229 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/flsb08-13229.pdf In Re Walter J. Stanula Bankr. N.D. Ill. Case No. 08-06499 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/ilnb08-06499.pdf In Re Joseph L. Cobane Bankr. E.D. Mich. Case No. 08-46615 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/mieb08-46615.pdf In Re JCO Auto Body, LLC Bankr. D. N.J. Case No. 08-14882 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/njb08-14882.pdf In Re Donald J. Berkebile Bankr. W.D. Penn. Case No. 08-21759 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/pawb08-21759.pdf In Re Joseph Ikuna Langi Bankr. N.D. Calif. Case No. 08-30442 Chapter 11 Petition filed March 19, 2008 Filed as Pro Se In Re Windsor Estates Realty, Ltd. Bankr. E.D. N.Y. Case No. 08-41584 Chapter 11 Petition filed March 19, 2008 Filed as Pro Se In Re Experimental Group Young People's Theater Bankr. N.D. Calif. Case No. 08-41278 Chapter 11 Petition filed March 19, 2008 Filed as Pro Se In Re KJK Leasing, Inc. Bankr. E.D. Va. Case No. 08-11386 Chapter 11 Petition filed March 19, 2008 See http://bankrupt.com/misc/vaeb08-11386.pdf In Re Muoi Tran Bankr. D. Ariz. Case No. 08-02913 Chapter 11 Petition filed March 20, 2008 See http://bankrupt.com/misc/azb08-02913.pdf In Re Performax Physical Therapy, PC Bankr. E.D. Mich. Case No. 08-46717 Chapter 11 Petition filed March 20, 2008 See http://bankrupt.com/misc/mieb08-46717.pdf In Re A Gift of Love Ministry Bankr. W.D. N.C. Case No. 08-30563 Chapter 11 Petition filed March 20, 2008 See http://bankrupt.com/misc/ncwb08-30563.pdf In Re Sunshine VW, LLC Bankr. D.C. Case No. 08-00190 Chapter 11 Petition filed March 20, 2008 Filed as Pro Se In Re The Auten Avenue, LLC Bankr. S.D. Ohio Case No. 08-11351 Chapter 11 Petition filed March 20, 2008 Filed as Pro Se In Re John A. Hensley, Jr. Bankr. W.D. Va. Case No. 08-50260 Chapter 11 Petition filed March 20, 2008 See http://bankrupt.com/misc/vawb08-50260.pdf In Re El Caporal, Inc. dba El Gallo Colorado Supermarket, aka El Gallo Colorado Bankr. N.D. Calif. Case No. 08-51342 Chapter 11 Petition filed March 21, 2008 See http://bankrupt.com/misc/canb08-51342.pdf In Re Darnell Watts aka Carol Ann Watts Bankr. D. Md. Case No. 08-13918 Chapter 11 Petition filed March 21, 2008 See http://bankrupt.com/misc/mdb08-13918.pdf In Re Nevada Mobile Concrete Mix, Inc. Bankr. D. Nevada Case No. 08-50412 Chapter 11 Petition filed March 21, 2008 See http://bankrupt.com/misc/nvb08-50412.pdf In Re MiCo Manufacturing, Inc. Bankr. M.D. Penn. Case No. 08-00981 Chapter 11 Petition filed March 21, 2008 See http://bankrupt.com/misc/pamb08-00981.pdf In Re CCRC, Inc. Bankr. W.D. Penn. Case No. 08-21823 Chapter 11 Petition filed March 21, 2008 See http://bankrupt.com/misc/pawb08-21823.pdf In Re Mark Kim dba Midwest Computer Systems Bankr. N.D. Ill. Case No. 08-06883 Chapter 11 Petition filed March 23, 2008 See http://bankrupt.com/misc/ilnb08-06883.pdf In Re Cerutti's Automotion, Inc. Bankr. D. Ariz. Case No. 08-03037 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/azb08-03037.pdf In Re Fiesta Harbor Cruises, Inc. Bankr. C.D. Calif. Case No. 08-13761 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/cacb08-13761.pdf In Re Sarasota One, LLC Bankr. M.D. Fla. Case No. 08-03845 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/flmb08-03845.pdf In Re Davis Eastgate, LLC Bankr. M.D. Fla. Case No. 08-03865 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/flmb08-03865.pdf In Re Cajun Food, Inc. Bankr. D. Mass. Case No. 08-12026 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/mab08-12026.pdf In Re Intronics, Inc. Bankr. D. Mass. Case No. 08-12061 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/mab08-12061.pdf In Re Worldhub Group, LLC Bankr. D. Md. Case No. 08-14008 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/mdb08-14008.pdf In Re Weller Transfer, Inc. Bankr. W.D. Mich. Case No. 08-02465 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/miwb08-02465.pdf In Re Altmeyer Fabricating, Ltd. Bankr. W.D. Penn. Case No. 08-21842 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/pawb08-21842.pdf In Re Berryessa Mercantile, LLC Bankr. N.D. Calif. Case No. 08-30476 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re 9492 Properties, LLC Bankr. M.D. Tenn. Case No. 08-02393 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re Berryessa Mercantile, LLC Bankr. N.D. Calif. Case No. 08-30476 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re Unique Loans LLC aka Unique Mortgage Bankr. D. N.J. Case No. 08-15117 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re Three Real Estate Holding Co. Bankr. N.D. N.Y. Case No. 08-10825 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re Thomason & Shore, LLC aka Thomason & Thomason Bankr. N.D. Ala. Case No. 08-01425 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re Kathryn Ann Daleiden aka Kathy Daleiden Bankr. M.D. Fla. Case No. 08-02213 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re Monte James Burghardt Bankr. C.D. Calif. Case No. 08-11377 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re Midwestern Realty, LLC Bankr. E.D. Mo. Case No. 08-41977 Chapter 11 Petition filed March 24, 2008 Filed as Pro Se In Re RIR Investment Group, Inc. Bankr. N.D. Texas Case No. 08-41277 Chapter 11 Petition filed March 24, 2008 See http://bankrupt.com/misc/txnb08-41277.pdf In Re Move On Enterprises, LLC dba Domino's Pizza Bankr. D. Conn. Case No. 08-20495 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/ctb08-20495.pdf In Re DP Stratford, LLC dba Domino's Pizza Bankr. D. Conn. Case No. 08-30920 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/ctb08-30920.pdf In Re Steven Schatzberg Bankr. S.D. Fla. Case No. 08-13497 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/flsb08-13497.pdf In Re Biscayne Helicopters, Inc. Bankr. S.D. Fla. Case No. 08-13501 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/flsb08-13501.pdf In Re Dianne D. Tansey Bankr. W.D. Mich. Case No. 08-02496 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/miwb08-02496.pdf In Re 628 Broadway, LLC Bankr. D. N.J. Case No. 08-15214 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/njb08-15214.pdf In Re High Lead Ranch Bankr. E.D. Calif. Case No. 08-11573 Chapter 11 Petition filed March 25, 2008 Filed as Pro Se In Re MDG of Laredo, Inc. Bankr. S.D. Texas Case No. 08-50077 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/txsb08-50077.pdf In Re Ross Christopher James Bankr. W.D. Wash. Case No. 08-11723 Chapter 11 Petition filed March 25, 2008 See http://bankrupt.com/misc/wawb08-11723.pdf ********* 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 ***