T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 2, 2008, Vol. 12, No. 78 Headlines ABACUS 2006-8: Moody's Downgrades Ratings on Six Classes of Notes ADVANCED COMMERCIAL: Case Summary & 16 Largest Unsecured Creditors AEGIS MORTGAGE: Court Approves Settlement Agreement with Azoogle AEGIS MORTGAGE: Court OKs Request to Release Liens on Repaid Loans AFFINIA GROUP: Moody's Maintains Corporate Family Rating at 'B2' ALDONA URBANTAS-STEWART: Case Summary & 12 Largest Creditors AMBAC FINANCIAL: Admits Hard Year in 2007, Ex-CEO Gets Less Salary AMERICAN HOME: Countrywide Files Motion for Late Filing of Claims ASCALADE COMMS: Won't File 2007 Annual Report Until CCAA Expires AVENSYS CORP: Unit Completes Purchase of Willer's Assets and Debts BEST BRANDS: Third Amendment and Waiver Won't Affect S&P's Ratings BUILDING MATERIALS: Investor Talked With Rivals to Explore Deals BXG RECEIVABLES: Moody's Puts 'Ba2' Rating on $3.1 Mil. G Notes C-BASS CBO: Moody's Downgrades Ratings on Five Classes of Notes CAREYTOWN SEAFOOD: Case Summary & 18 Largest Unsecured Creditors CCM MERGER: Moody's Chips Corporate Family Rating to 'B2' From B1 CELANESE CORP: Moody's Upgrades Unit's Corporate Rating to 'Ba2' CHAMP CAR: Court Approves $6.25MM Asset Sale to Indy Racing CHRYSLER LLC: U.S. Sales in March 2008 Down 19% at 166,386 Units CIFG GUARANTY: Fitch Slashes Insurer Fin'l Strength Rating to 'A-' COMMODORE CDO: Weak Credit Quality Cues Moody's Eight Rating Cuts CONSTELLATION COPPER: Defaults in CN$69 Million Debentures COOKSON SPC: Moody's Reviews 'Ba2' Rating on 2007-10HGB 2046 Notes COREL CORP: Gets Proposal from Majority Shareholder Corel Holdings COREL CORP: S&P Puts 'B' Rating on Neg. Watch on Acquisition Bid CORTS TRUST: S&P Posts BB Rating on $27MM Certs. on Positive Watch COUDERT BROS: Examiners Say Ex-Partners Should Contribute $11.8MM CROWN MEDIA: Three New Members Elected to Board of Directors CSK AUTO: O'Reilly Automotive to Acquire Business for $1.0 Billion CENVEO INC: Completes Acquisition Contract with Rex Corporation CYGNUS ETRANSACTIONS: Case Summary & 19 Largest Unsec. Creditors DIABLO GRANDE: Discloses Receipt of Purchase Offers for Property DIABLO GRANDE: Court to Approve $1.5 Mil. Credit Facility Today DIAMOND GLASS: Files Voluntary Petition for Reorganization in Del. DIAMOND GLASS: Case Summary & 30 Largest Unsecured Creditors DIAMOND GLASS: President Still Optimistic Despite Ch. 11 Filing DIRECTED ELECTRONICS: Moody's Holds Ratings on Facility Amendment DIRECTED ELECTRONICS: Enters Into Amendment to Credit Agreement DUKE FUNDING XIII: Poor Credit Quality Spurs Moody's Rating Cuts DUKE FUNDING XII: Moody's Downgrades Ratings on Eight Note Classes DUKE FUNDING X: Eroding Credit Quality Prompts Moody's Rating Cuts DURA AUTOMOTIVE: Further Amends First Revised Chapter 11 Plan DURA AUTOMOTIVE: Court Extends Exclusivity Deadline to April 30 DUTCH HILL: Five Classes of Notes Obtain Moody's Junk Ratings EAST LANE: S&P Puts 'BB' Debt Rating on $75 Million Class A Notes ELUSTONDO RAMOS: Case Summary & 17 Largest Unsecured Creditors ENRON CORP: $1.3 Billion Earmarked for Distribution to Creditors EULER ABS: 10 Notes Get Moody's Rating Cuts on Poor Credit Quality EVERGREEN INT'L: Liquidity Concerns Prompts S&P's Negative Watch FAIRPOINT COMM: Completes Merger Agreement with Verizon's Spinco FINANCIAL GUARANTY: S&P Slashes Ratings on 59 Insured ABS Classes FINANCIAL GUARANTY: S&P's 'BB' Rating Cues Rating Cuts on 310 RMBS FINISAR CORP: Restructures Terms on Convertible Note Due March 26 FOOT LOCKER: Poor Sales Results Cues Moody's Rating Cuts to 'Ba3' FORD MOTOR: Total March 2008 U.S. Sales Down 14% at 227, 143 Units FORTUNOFF: Launches New E-Commerce Web Site FORTUNOFF: El-Kam Renews Demand for Postpetition Rent Payment FORTUNOFF: Two Creditors Want Goods Returned or Paid GENERAL MOTORS: March 2008 U.S. Sales Down 13% at 282,732 Units GLOBAL EXECUTION: Fitch Confirms 'BB' Rating on Two Note Classes GREENTREE ESTATES: Case Summary & Largest Unsecured Creditor HERCULES INC: Debt Reduction Cues Moody's Rating Upgrade to 'Ba1' HOT WEB: Gets Rid of $1.6 Million Legacy Debt from Snap 'N Sold INTERSTATE BAKERIES: Wants Court to Determine Tax Liabilities INNOVATIVE DESIGNS: A. Fonzi Resigns as Chief Financial Officer INPHONIC INC: Judge Gross Extends Exclusive Plan Filing Period ISTANA HIGH: Eight Classes of Notes Get Moody's Rating Downgrades JEFFERSON COUNTY: S&P Junks Rating on Series 2003 B-2-B7 Warrants J&R STOUT: Voluntary Chapter 11 Case Summary JP MORGAN CMS: Credit Degradation of Assets Cues S&P Ratings Cut JUDY HOUSTON: Case Summary & Five Largest Unsecured Creditors JULIE WASILESKI: Case Summary & 16 Largest Unsecured Creditors KB HOME: Posts $268 Million Net Loss in Quarter Ended February 29 KHAMSIN CREDIT: Moody's Junks Rating on $12.5 Mil. Notes From 'B3' KROMET AMERICA: Case Summary & 20 Largest Unsecured Creditors LARRY HUFFMAN: Case Summary & 11 Largest Unsecured Creditors LEHMAN XS: Moody's Cuts 279 Tranches' Ratings From 27 Alt-A Deals LEINER HEALTH: Obtains Court OK to Employ Strom as Special Counsel LEXINGTON PRECISION: Case Summary & 30 Largest Unsecured Creditors LIFECARE HOLDINGS: Posts $60.8 Million Net Loss in 2007 LILLIAN VERNON: Committee Wants to Hire Traxi as Financial Advisor LILLIAN VERNON: Panel Wants to Hire Cooley Godward as Counsel LILLIAN VERNON: Panel Wants to Hire Ballard Spahr as Co-counsel LILLIAN VERNON: Wants to Hire McGuireWoods as Special Counsel LOCAL INSIGHT: Moody's Puts 'Ba3' Rating on Proposed $365MM Credit LUMINENT MORTGAGE: Unit Registers Planned REIT Conversion to PTP MAGNOLIA FINANCE 2006-11: Moody's Junks Rating on $40 Mil. Notes MAGNOLIA FINANCE 2007-1: Moody's Junks Rating on Notes From 'B2' MANCHESTER INC: Lender to Foreclose Assets or File Chapter 11 Plan MATHIS PARTNERS: Files Voluntary Chapter 11 Petition in Georgia MEGA BRANDS: Gets Lender Approval on Changes to Debt Facilities MERCY REGIONAL: Undergoes Restructuring Due to Meager Earnings MERISANT COMPANY: Moody's Rates Proposed $210 Mil. Loan at 'B3' MICHAEL DAVIS: Involuntary Chapter 11 Case Summary NATIONAL RV: Exclusive Plan Filing Period Extended Until June 27 NEFF CORP: Posts $119.9 Million Net Loss in Year Ended Dec. 31 NEO PLASTICS: Assets Acquired by RTS Plastics for $880,000 NORTHSHORE SERVICE: Case Summary & Six Largest Unsecured Creditors NOVELL INC: Augments Operations with PlateSpin Buyout Completion NUVEEN INVESTMENT: Funds to Refinance Auction-Rate Securities PETROQUEST ENERGY: S&P Upgrades Corporate Credit Rating to 'B' PINNACLE ENTERTAINMENT: Moody's Holds 'B2' Corporate Family Rating PONTIAC HOSPITAL: S&P's Rating on $35.8 Mil. Bonds Tumbles to 'D' QUEBECOR WORLD: Jefferies & Co. as Committee Bankers Approved QUEBECOR WORLD: Kurtzman Carson Hiring as Committee Agent Approved QUEBECOR WORLD: Mesirow Hiring as Panel Financial Advisor Approved RANDALL MARTIN: Case Summary & 20 Largest Unsecured Creditors READER'S DIGEST: Increase in Debt Spurs Moody's Negative Outlook REMINGTON ARMS: Posts $1.5 Million Net Loss in Year Ended Dec. 31 REMINGTON ARMS: Edward Rensi Appointed to Board of Directors ROLLAND ENERGY: CEO McLellan Provides Second Restructuring Update SAIL TRUSTS: Write-downs Spurs S&P's 'D' Rating on Five Classes SECURITY CAPITAL: S&P's Rating on Preference Shares Tumbles to 'D' SINCLAIR-DWYER & CO: Case Summary & 11 Largest Unsecured Creditors SIRVA INC: Triple Files Appeal on DIP Financing & Payment Orders SP NEWSPRINT: Completes $350 Million Buyout Deal with White Birch SR TELECOM: Selling Assets to Groupe Lagasse for $6 Million STEELCASE INC: Plans Job Cuts and Plant Closures in North America STONE ENERGY: S&P Changes Outlook to Stable; Confirms 'B+' Rating SUPERIOR OFFSHORE: Defaults on JPMorgan Chase Credit Facility SUPERIOR OFFSHORE: Review of Financial Records Delays 10-K Filing TAYLOR TELFAIR: Case Summary & 20 Largest Unsecured Creditors TOUSA INC: Wants Automatic Stay Lifted to Advance Defense Costs TOUSA INC: Committee Wants to Hire Garden City as Info Agent TOUSA INC: Committee Seeks to Retain Jefferies as Advisor TOWERS OF CHANNELSIDE: Taps Cascade Capital as Financial Advisors TOWERS OF CHANNELSIDE: Taps Dennis Noto & Associates as Appraiser US AIRWAYS: Court of Appeals Upholds Ruling on R. Bosiger's Suit US AIRWAYS: To Settle MD Aviation Claim by Paying $11,500,000 US AIRWAYS: R. Thomas Demands Retirement Benefits Continued VALMONT INDUSTRIES: Revenue Growth Cues Moody's Rating Lift to Ba1 VAXGEN INC: CEO Says MedCap's Analysis is Incorrect and Shallow VAXGEN INC: Ends Raven Merger Over Likely Stockholder Objection VERASUN ENERGY: Completes Merger Agreement with US BioEnergy VESTA INSURANCE: Gaines Trustee Settlement with SG/SPV Approved VIASYSTEMS INC: Earns $17.3 Million in Year Ended Dec. 31 VILLAGE HOTEL: Case Summary & 27 Largest Unsecured Creditors VOUGHT AIRCRAFT: Boeing Agrees to Buy Share of Global Aeronautica VOUGHT AIRCRAFT: S&P Says 50% Stake Sale Won't Affect Its Rating VPG INVESTMENTS: Files Schedules of Assets and Liabilities WADSWORTH CDO: Moody's Junks Rating on $38 Mil. Notes From 'Baa1' WOODSIDE AMR 107: Case Summary & 40 Largest Unsecured Creditors X-RITE INC: Weak Performance Cues Moody to Cut Ratings to 'B2' ZIFF DAVIS: Court Grants Final Approval to Cash Collateral Use ZIFF DAVIS: Disclosure Statement Hearing Set April 29 ZIFF DAVIS: Winston & Strawn Clarifies Pre-Bankruptcy Transactions * S&P Downgrades Ratings on 65 Classes From 19 RMBS Transactions * Stressed Markets Mean Poor 2008 Thrift Performance, S&P Says * S&P Says Most Nonbulge-Bracket Brokers Survive Turbulent Markets * U.S. Senate Advances Bill to Stem Housing Foreclosures * IWIRC to Honor Achievement of Bankruptcy Professionals * CRG Partners Forms Strategic Alliance with Smith & Williamson * FTI Acquires Real Estate Consulting Firm Schonbraun McCann * BDO Consulting Forms Strategic and Financial Consulting Services * Upcoming Meetings, Conferences and Seminars ********* ABACUS 2006-8: Moody's Downgrades Ratings on Six Classes of Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by ABACUS 2006-8, Ltd.: Class Description: $50,000,000 Class A-1 Floating Rate Notes, Due 2045 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $35,000,000 Class A-2 Floating Rate Notes, Due 2045 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $27,500,000 Class A-3 Floating Rate Notes, Due 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $20,000,000 Class B Floating Rate Notes, Due 2046 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $32,500,000 Class C Floating Rate Notes, Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $4,000,000 Class D Floating Rate Notes, Due 2045 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ADVANCED COMMERCIAL: Case Summary & 16 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Advanced Commercial Contracting Inc. 22473 Prat's Dairy Road Abita Springs, LA 70420 Bankruptcy Case No.: 08-10609 Chapter 11 Petition Date: March 25, 2008 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Phillip K. Wallace, Esq. 2027 Jefferson Street Mandeville, LA 70448 Tel: (985) 624-2824 Fax: (985) 624-2823 PhilKWall@aol.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's list of its 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Edward J. Hartson business capital $2,284,877 dba Hartson Holdings LLC 78261 Booth Road Folsom, LA 70437 Statewide Bank real estate; $1,987,154 2008 Ronald Reagan Highway value of Covington, LA 7043 security: $16,920,000; value of senior lien: $18,525,715 Internal Revenue Service FICA taxes $104,479 P.O. Box 87 Memphis, TN 38101 Chase Visa credit card $60,700 purchases for business LA Department of Revenue state withholding $50,687 tax Internal Revenue Service federal $49,123 withholding taxes Wells Fargo Master Card credit card $37,472 purchases Hogan Hardwoods loan to pay off $34,547 accounts payable invoices AICCO insurance $31,192 coverage Standard Insurance employee withheld $23,454 retirement fund AIG insurance $17,980 coverage Stonetrust Commercial insurance $15,855 coverage Humana Plan of Louisiana employee $14,386 insurance coverage Aldon G. Wahl, Jr., CPA accounting $14,195 services Standard Insurance employer matched $14,119 retirement fund Baldwin, Haspel, Burke & attorney fees $14,073 Mayer AEGIS MORTGAGE: Court Approves Settlement Agreement with Azoogle ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a settlement agreement among Aegis Lending Corp., AzoogleAds US, Inc., and Azoogle.com, Inc. The parties entered into a stipulation to avoid any costly litigation to resolve their dispute. The stipulation provides, among other things, that: (i) AzoogleAds and Azoogle.com will pay $30,000,000 to Aegis Lending; (ii) Aegis Lending will dismiss, with prejudice, an arbitration demand it filed before the American Arbitration Association; and (iii) the parties will release each other from all claims. The dispute ensued among the parties after AzoogleAds and Azoogle.com allegedly breached their agreement dated August 1, 2005, when they sold to Aegis Lending a mortgage lead allegedly obtained through the use of unsolicited spam email. Aegis Lending was also implicated in a lawsuit filed by Asis Internet Services as a result of the sale. When Aegis Lending asked for initial indemnification payment, AzoogleAds and Azoogle.com only paid $17,705 in damages and attorneys' fees, instead of $25,000 as agreed upon by the parties. Consequently, Aegis Lending initiated a demand for arbitration pursuant to the Aug. 1, 2005 agreement before the American Arbitration Association. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan of reorganization expires on April 9, 2008. (Aegis Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AEGIS MORTGAGE: Court OKs Request to Release Liens on Repaid Loans ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the request of Aegis Mortgage Corp. and its debtor-affiliates to: (i) release their liens and interests on certain properties, which secure the loans that had been fully repaid by the borrowers; and (ii) process all prepetition sales and transfers of loans and loan-related assets to third parties. Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, explained that the Debtors have filed the request to avoid spending unnecessary legal fees for responding to lawsuits that loan borrowers may file to compel the release of the Debtors' liens on the properties, or the completion of loan transfer requests. Pre-bankruptcy, the Debtors executed in the ordinary course of business all documentation required to fully consummate sales and transfers of prepetition loans and loan related assets, rights and interests. In some instances, the Debtors did not complete all necessary documentation, or, alternatively, the person or entity receiving the documentation may have misplaced or lost the documentation. As a result, the Debtors from time to time received, and continue to receive, requests to complete, replace or re-execute various types of documentation relating to sales and transfer of loans. Upon determination that they had no remaining right or interest in any loan or other related assets, the Debtors would grant the request and complete, replace or re- execute appropriate documentation as necessary to effectuate the particular transaction reflected in their books and records. In addition to Loan Transfer Requests, the Debtors still may have recorded liens on certain properties for loans that were fully repaid by borrowers prepetition, but which liens were never released. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119) Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. The Debtors' exclusive period to file a plan of reorganization expires on April 9, 2008. (Aegis Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AFFINIA GROUP: Moody's Maintains Corporate Family Rating at 'B2' ---------------------------------------------------------------- Moody's Investors Service lowered Affinia Group Inc.'s Speculative Grade Liquidity Rating to SGL-3, from SGL-2. In a related action Affinia's Corporate Family Rating and Probability of Default were affirmed at B2, ratings on the company's first lien bank obligations and the ratings on the subordinated notes were affirmed at Ba3, and B3, respectively. The outlook is stable. The revised Speculative Grade Liquidity Rating reflects Moody's concern that stepdowns in the leverage covenants contained in the company's bank credit facilities, combined with potential softness in automotive aftermarket demand, high debt levels, and the timing of the company's ongoing restructuring activities, could narrow the margin of cushion relative to this leverage test. The leverage covenant steps down for the first fiscal quarter of 2008 and again for the fourth quarter. At year-end 2007, the company maintained $59 million of cash and cash equivalents which should be more than sufficient to cover seasonal working capital needs. The company's $125 revolving credit facility matures in November 2010 and had availability of approximately $97 million after taking account of $28 million of letters of credit. The company's receivable securitization facility matures in November 2009. The next debt maturity is the company's term loan in November 2011. Alternate forms of liquidity are limited as the bank credit facilities are secured by substantially all of the company's assets. Notwithstanding tighter covenant headroom and the potential for general economic headwinds in the United States to depress aftermarket demand, Moody's expects Affinia to be cash flow positive in 2008. The company has initiated a number of restructuring actions which have positively impacted results in 2007 and are expected to have a positive impact in 2008. The B2 Corporate Family Rating continues to consider the qualitative strengths of Affinia's business in Moody's Auto Supplier Methodology such as scale of operations, geographic and customer diversification and focus on the replacement parts market. The company benefits from leading market shares in filters, brakes and chassis components and offers a full line of products in those categories, which helps to competitively position its products across distribution channels. The rating also reflects the company's leverage and interest coverage. As of Dec. 31, 2007 Affinia's debt EBITDA (including Moody's standard adjustments) was 5.2x and EBIT Interest was 1.4x. Negative free cash flow in 2007 was largely driven restructuring costs and higher inventory levels used to lower customer fulfillment risks associated with the transition of sourcing to low cost countries. The stable outlook continues to consider the demand characteristics and market share for Affinia's replacement parts and improving operating margins. Demand for Affinia's products are correlated with normal maintenance and wear requirements. This contrasts with repair and warranty requirements which are more influenced by product failure rates which have been affected by general trends in improved quality of original equipment parts. The outlook anticipates that the company's restructuring efforts will lead to stronger operating margins and free cash flow over the intermediate period, and the company's current cash balances. Any further deterioration in the company's liquidity profile will adversely impact the outlook and ratings. Ratings lowered: -- Speculative Grade Liquidity Rating, to SGL-3 from SGL-2 Ratings affirmed: -- B2, Corporate Family Rating -- B2, Probability of Default -- Ba3 (LGD2, 24%), first lien bank debt -- B3 (LGD5, 74%) on the Subordinated Notes -- Senior Unsecured Issuer Rating, B3 The last rating action was on Jan. 23, 2007 when Affinia's ratings were raised. Affinia Group Inc., headquartered in Ann Arbor, Michigan, is a designer, manufacturer and distributor of aftermarket components for passenger cars, sport utility vehicles, light, medium and heavy trucks and off-highway vehicles. The company's product range addresses filtration, brake and chassis markets in North and South America, Europe and Asia. In 2007, the company reported revenues of approximately $2.1 billion. ALDONA URBANTAS-STEWART: Case Summary & 12 Largest Creditors ------------------------------------------------------------ Debtor: Aldona Maria Urbantas-Stewart dba Beau Bleu Equestrian 578 Dooley Road Dallas, GA 30132 Bankruptcy Case No.: 08-40957 Type of Business: The Debtor owns and manages a horse stable and arena. Chapter 11 Petition Date: March 31, 2008 Court: Northern District of Georgia (Rome) Debtor's Counsel: Rex Cornelison, Esq. The Cornelison Group, LLC Building D, Suite 1 500 Sun Valley Drive Roswell, GA 30076-5636 Tel: (770) 587-0082 Total Assets: $3,035,460 Total Debts: $1,722,758 Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washington Mutual Card Service credit card $3,246 P.O. Box 660509 Dallas, TX 75266-0509 Cherokee Feed & Seed, Inc. feed $2,764 2370 Hightower Road Ball Ground, GA 30107 Greystone Power Corp. electric service $1,000 P.O. Box 6071 Douglasville, GA 30154-6071 J&J Hay Farms, Inc. hay $500 Rainwater Hearting & Air Cond. service $379 Mike Morgan carpet installation $378 T-Mobile telephone service $284 Verizon Wireless telephone service $266 Equine Veterinary Service veterinary services $252 Cherokee County Water & Sewer water service $113 AT&T telephone service $60 DirectTV satellite service unknown AMBAC FINANCIAL: Admits Hard Year in 2007, Ex-CEO Gets Less Salary ------------------------------------------------------------------ The fiscal year 2007 was a difficult year for Ambac Financial Group Inc. overall, according to a filing with the Securities and Exchange Commission. The company did not meet its financial objectives and were negatively impacted by the credit crisis and the continued deterioration of the subprime and mortgage related markets. The fiscal year 2007 was significantly impacted by a $6.004 billion mark-to-market loss, primarily driven by certain collateralized debt obligations of asset-backed securities backed by subprime residential mortgage-backed securities. Also impacting 2007 was the establishment of loss reserves primarily driven by unfavorable credit activity within the home equity line of credit and closed-end second lien residential mortgage-backed securities portfolio. In view of these circumstances, and consistent with the compensation principles, the company took certain steps relating to compensation. The company reorganized its management team and risk function. Robert J. Genader, who served as Ambac's Chief Executive Officer during 2007, and William T. McKinnon, who served as its Chief Risk Officer, have retired. The company did not pay bonus compensation or make long-term incentive awards to Mr. Genader in respect of 2007 and made only the payments and awards to Mr. McKinnon that was required by his employment agreement. Mr. Genader announced his retirement from Ambac on Jan. 13, 2008. Mr. Genader stated that his decision to retire was prompted, in part, by his disagreement with aspects of the Board's capital raising plan. For 2007, Mr. Genader received a base salary of $5.6 million. He did not receive any bonus or long-term incentive compensation. Mr. Genader did not receive any severance or other retirement package. Upon retirement, all of Mr. Genader's unvested equity awards vested in accordance with the terms and conditions of the underlying award agreements as applicable to all employees. Although the company's performance in 2007 did not reach the threshold required to trigger a payout under its Executive Incentive Plan, it determined to pay bonus compensation to those named executive officers who are continuing with us in 2008. Ambac believes it is essential to retain those executives whom it considers to be critical to our efforts to re-establish the franchise and improve stockholder value over the long-term. Ambac did not increase the rate of base salary for any of our named executive officers for 2008. However, the company has continued its practice of offering executive officers health, welfare and similar benefit programs on the same basis that the company makes these programs available to its employees generally. Based in New York City, Ambac Financial Group, Inc. is a holding company that provides financial guarantees and financial services to clients in both the public and private sectors around the world through its principal operating subsidiary, Ambac Assurance Corporation. As an alternative to financial guarantee insurance credit protection is provided by Ambac Credit Products, a subsidiary of Ambac Assurance, in credit derivative format. For the nine months ended Sept. 30, 2007, Ambac reported net income of $26 million. As of Sept. 30, 2007, Ambac had shareholders' equity of approximately $5.65 billion. * * * As reported in the Troubled Company Reporter on March 7, 2008, Moody's Investors Service said in a news statement that Ambac Financial Group Inc., if successful with its equity offering of $1.5 billion, will likely retain its "Aaa" rating. Moody's said that it will evaluate Ambac's ability to raise capital at reasonable terms as an indication of the company's financial flexibility and overall level of support from investors. In Moody's view, Ambac's new equity and equity linked capital through a public offering represents an important component of its overall plan to strengthen the credit profile of its financial guaranty insurance subsidiary, Ambac Assurance Corporation. On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. Moody's, the TCR said Jan. 17, 2008, placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. AMERICAN HOME: Countrywide Files Motion for Late Filing of Claims ----------------------------------------------------------------- Countrywide Home Loans, Inc., Countrywide Bank, F.S.B., ReconTrust Bank, N.A., and Landsafe ask the U.S. Bankruptcy Court for the District of Delaware to allow the late filing of their proofs of claim one business day beyond the January 11, 2008 Bar Date in the bankruptcy case of American Home Mortgage Investment Corp. and its debtor-affiliates. In December 2007, Countrywide requested the assistance of Katherine M. Windler, Esq., at Bryan Cave, LLP, in Santa Monica, California, in the preparation and filing of their Claims. Ms. Windler worked directly alongside her legal secretary, Pamela Davis, and mailed to EPIC Bankruptcy Solutions, LLC, the Debtors' claims agent, via Federal Express next-day delivery, 10 Claims placed in four separate delivery packages. A complete set of the Claims was retained as a precautionary step in the event Ms. Windler could not confirm delivery of the Claims in New York on Friday, January 11, 2008. According to Ms. Windler's declaration, on January 11, the Federal Express tracking system verified that the packages had arrived in New York. However, on January 15, Ms. Windler received the returned Federal Express envelopes with the conformed copies of the Claims and learned, for the first time, that the Claims were not actually received by the Claims Agent until Monday, January 14, one business day after the Bar Date. Thereafter, Ms. Windler learned, through new tracking reports, that the packages had actually sat in Tennessee the entire weekend from January 11 through 13, directly contradicting the print out obtained on January 11, which wrongfully represented that the packages were physically in New York, according to William E. Chipman, Jr., Esq., at Edwards Angell Palmer & Dodge LLP, in Wilmington, Delaware. Countrywide immediately called counsel to the Debtors to alert them of the issue in an attempt to reach a consensual resolution. Mr. Chipman relates that since January 17, 2008, counsel for Countrywide and counsel for the Debtors have been engaged in good-faith negotiations on a stipulation deeming the Claims as timely filed. However, as of March 11, the parties have been unable to reach an agreement. Allowing the Claims to be filed one day late would not force the return of amounts already paid out under any plan or affect a distribution to creditors because the Debtors have yet to propose a plan, Mr. Chipman says. The reason for the delay was due to Federal Express and its errors in (i) not adhering to its own forms and instructions for next-day delivery and (ii) incorrectly reporting in its tracking system that the packages had arrived in New York when in fact they had not, Mr. Chipman tells the Court. The length of delay in filing the Claims on the next business day and any potential impact upon the Debtors' cases is de minimis, he asserts. Countrywide Capital in Lake Havasu city, Arizona, is listed at one of the Debtor's 39 largest unsecured creditors. It holds unspecified unliquidated loan repurchase. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The Court has extended the exclusive periods for the Debtors to file a plan of reorganization through June 2, 2008, and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASCALADE COMMS: Won't File 2007 Annual Report Until CCAA Expires ---------------------------------------------------------------- Ascalade Communications Inc. said that as a result of its application under the Companies' Creditors Arrangement Act and as previously disclosed on March 3, 2008, it does not expect to file its audited annual financial statements for the year ended Dec. 31, 2007, and the management's discussion and analysis, as well as, its annual information form for the year ended Dec. 31, 2007. Ascalade does not anticipate completing the filings prior to the lifting or expiry of the CCAA protection order. Ascalade has been under CCAA protection since March 3, 2008. The expected delay in completing the Filings is as a result of Ascalade focusing its resources on restructuring winding up of the Ascalade group of companies and the uncertainty regarding Ascalade's future operations. While under CCAA protection, Ascalade will comply with the alternative information guidelines set out in Ontario Securities Commission Policy 57-603 -- Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements for issuers who are delayed in filing and forwarding to shareholders financial statements within the times prescribed by applicable securities laws. The guidelines, among other things, require Ascalade to issue bi- weekly status reports by way of a news release so long as Ascalade remains under CCAA protection and the Filings have not been completed. Ascalade acknowledges that an issuer cease trade order may be imposed by the Ontario Securities Commission, if the default is not remedied by May 31, 2008 and the Filings have not been completed. On March 13, 2008 Ascalade's subsidiary in Hong Kong, Ascalade Communications Limited, filed a Scheme of Arrangement under Section 166 of the Companies Ordinance (Chapter 32) of Hong Kong. A first hearing of the Scheme was scheduled in Hong Kong on April 1, 2008. A Meeting of Creditors is scheduled to consider the Scheme of Arrangement on May 2, 2008 in Hong Kong. Concurrently with the issuance of this press release, Ascalade has filed with the Ontario Securities Commission a report in the form of a material change report, which includes additional information related to Ascalade's CCAA protection and its delay in filing the Filings. About Ascalade Communications Inc. Based in Richmond, British Columbia, Ascalade Communications Inc. (TSE:ACG) -- http://www.ascalade.com/ -- is an innovative product company that designs, develops and manufactures digital wireless and communication products. The company deliver products by offering its partners and customers complete vertical integration, from product design and development to final production. The company's products include digital cordless phones, Voice over Internet Protocol phones, digital wireless baby monitors and digital wireless conference phones. Ascalade products have been distributed in over 35 countries and under 80 regional brands. Ascalade also has facilities in Qingyuan, China, Hong Kong and a sales office in Hertfordshire, United Kingdom. AVENSYS CORP: Unit Completes Purchase of Willer's Assets and Debts ------------------------------------------------------------------ Avensys Inc., a subsidiary of Avensys Corporation, closed its acquisition of the assets and liabilities of Willer Engineering Limited. As reported in the Troubled Company Reporter on March 13, 2008, Avensys Inc. entered into an asset purchase agreement with Willer Engineering Limited. Upon the close of the acquisition, the assets of Willer Engineering will be merged with Avensys Inc.'s environmental instrumentation division, Avensys Environmental Solutions. The company related that the merger will result in a business generating $15 million a year in revenues, in a market where players are significantly smaller. It will also result in significant cost synergies and the ability to expand product lines and services beyond current capabilities. About Willer Engineering Limited Headquartered in Toronto, Willer Engineering Limited -- http://www.willereng.com/-- is a privately-owned company that provides professional instrumentation solutions, products and service to the industrial, process and scientific markets in Eastern Canada. The company was established more than 45 years ago. About Avensys Corp. Avensys Corp. fka. Manaris Corp. -- http://www.manariscorp.com/-- operates through its wholly owned subsidiaries, Avensys Inc. and C-Chip Technologies Corp. Avensys Inc. develops optical components and sensors and provides environmental monitoring solutions. AVI sells its optical products and services primarily in North America, Asia and Europe to the telecommunications, aerospace, and oil and gas industries. Environmental monitoring services and solutions are primarily targeted at public sector organizations across Canada. Prior to the termination of the Technology License Agreement with its former supplier, C-Chip earned royalties with respect to the devices sold by the licensee to the credit management marketplace. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 4, 2007, Montreal, Canada-based Raymond Chabot Grant Thornton LLP expressed substantial doubt about Manaris Corp. nka. Avensys Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditor pointed to the company's significant losses since inception and reliance on non-operational sources of financing to fund operations. BEST BRANDS: Third Amendment and Waiver Won't Affect S&P's Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings and outlook on Minnetonka, Minnesota-based Best Brands Corp. (CCC/Negative/--) remain unchanged following the company's disclosure that it received a third amendment and waiver to its credit facility which relaxed covenant levels and increased pricing, among other provisions. Best Brands also completed a sale and leaseback transaction and applied proceeds to debt reduction. Still, S&P remains concerned about very limited covenant cushion over the next few quarters, and ongoing liquidity as peak revolver borrowing typically occurs in September-October. The company currently has about $2 million in cash and about $12 million available on its $30 million revolving credit facility. The ratings could be lowered if liquidity tightens and the company seeks another amendment. BUILDING MATERIALS: Investor Talked With Rivals to Explore Deals ---------------------------------------------------------------- Building Materials Holding Corporation shareholder and fund manager Chapman Capital L.L.C. disclosed that following the company's first quarter 2007 Conference Call, Chapman Capital made contact with senior executives of various publicly traded and privately held competitors of the company to: a) broaden Chapman Capital's understanding of BMHC's business, assets, liabilities outside of management, and competitive positioning, and b) inform those peer companys of Chapman Capital's interest in maximizing the long term value of BMHC's common stock via a change-of-control transaction. In a regulatory filing with the Securities and Exchange Commission, Chapman Capital said the communications with the Peers continued throughout May 2007, and may be expected to persist until a change-of-control transaction has reached a definitive state. Chapman Capital also disclosed holding 1,433,760 shares -- or 4.9% -- of the outstanding shares of BMHC common stock. Chapman Capital said 469,102 of the shares are held in Chap-Cap Partners II Master Fund, Ltd., and 964,658 of the shares are held in Chap- Cap Activist Partners Master Fund, Ltd. Chapman Capital acquired BMHC securities in the ordinary course business. Chap-Cap Partners II paid $6,438,266 for its shares. Chap-Cap Activist Partners paid $13,206,282. The funds were derived from the firm's working capital. >From May to November 2007, Chapman Capital sent various correspondences with BMHC management demanding for changes, including significantly reduce the company's corporate and divisional overhead, and engaging financial advisors to explore the complete or divisional sale of the company. In October 2007, the fund manager demanded the resignation of Robert E. Mellor, chairman of BMHC's board of directors and its chief executive officer. The fund manager attempted -- but failed -- to obtain a seat for Robert L. Chapman, Jr., managing member at Chapman Capital, on BMHC's board. In November, Mr. Chapman sent correspondence to BMHC's Board to inform them of his appointment as director of Entertainment Distribution Company, Inc. Mr. Chapman emphasized how BMHC's "entrenched and chronologically advanced" Board has "ostracized and excluded the advisor to its largest ownership block [versus] EDCI's embracement of that same advisor via Board inclusion." Chapman Capital said it may in the future consider a variety of different alternatives to achieving its goal of maximizing shareholder value, including negotiated transactions, tender offers, proxy contests, consent solicitations, or other actions. "However, it should not be assumed that such members will take any of the foregoing actions. The members of the Reporting Persons reserve the right to participate, alone or with others, in plans, proposals or transactions of a similar or different nature with respect to [BMHC]" Mr. Chapman said. To contact Chapman Capital: Robert L. Chapman, Jr. Chapman Capital L.L.C. 1007 N. Sepulveda Blvd. #129 Manhattan Beach, CA 90267 Telephone (310) 373-0404 About Building Materials Holding Corporation Based in San Francisco, California, Building Materials Holding Corporation (NYSE:BLG) -- http://www.bmhc.com-- provides residential construction services and building products to professional homebuilders and contractors in western and southern regions of the United States. It operates through two business segments: SelectBuild and BMC West. SelectBuild provides framing and other construction services to high-volume homebuilders in key markets. BMC West markets and sells building materials, manufactures building components and provides construction services to professional builders and contractors through a network of 41 distribution facilities and 60 manufacturing facilities. It provides construction services and building products in 16 single-family residential construction markets. In November 2006, SelectBuild acquired the remaining 49% interest in BBP companies. In March 2007, BMHC's subsidiary, SelectBuild Construction Inc., acquired the remaining 27% of Riggs Plumbing LLC. * * * As reported by the Troubled Company Reporter on March 18, 2008, Fitch Ratings downgraded and removed from Rating Watch Negative Building Materials Holding Corporation's Issuer Default Rating to 'B' from 'B+'; and Senior secured debt to 'B+/RR3' from 'BB-/RR3'. The Rating Outlook is Negative. The TCR said on March 17 that Standard & Poor's Ratings Services lowered its corporate credit rating on BMHC to 'B-' from 'B'. S&P also lowered the senior secured bank loan rating to 'B-' from 'B+' and revised the recovery rating to '4' from '2' -- indicating that lenders can expect an average (30%-50%) recovery in the event of a payment default. S&P also assigned a 'B-' senior secured rating to the company's amended and restated revolving credit facility, with a recovery rating of '4'. Moody's Investors Service, the TCR said March 10, lowered the ratings of BMHC, including its corporate family rating, to B2 from B1, its probability-of-default rating to B3 from B2, and its first-lien bank credit facility rating to B2 (LGD3, 39%) from B1 (LGD3, 38%), concluding Moody's review which commenced Feb. 13. The ratings outlook is negative. BXG RECEIVABLES: Moody's Puts 'Ba2' Rating on $3.1 Mil. G Notes --------------------------------------------------------------- Moody's Investors Service assigned a Aaa rating to the senior class of notes issued by BXG Receivables Note Trust 2008-A in Bluegreen Corporation's securitization of timeshare receivables. Moody's also rated Classes B, C, D, E, F and G Aa3, A3, Baa1, Baa2, Baa3 and Ba2, respectively. The ratings were based on the levels of credit enhancement provided by each of the subordinate classes, the overcollateralization, the reserve fund, the quality of the timeshare receivables, and the structure of the transaction. The complete rating action is: Issuer: BXG Receivables Note Trust 2008-A -- $17.8 mil; Class A, 5.885% Timeshare Loan-Backed Notes, Series 2008-A, Aaa -- $9.6 mil; Class B, 6.880% Timeshare Loan-Backed Notes, Series 2008-A, Aa3 -- $14.1 mil; Class C, 7.870% Timeshare Loan-Backed Notes, Series 2008-A, A3 -- $4.3 mil: Class D, 9.100% Timeshare Loan-Backed Notes, Series 2008-A, Baa1 -- $5.7 mil; Class E, 10.085%, Timeshare Loan Backed Notes, Series 2008-A, Baa2 -- $5.3 mil; Class F, 10.810%, Timeshare Loan Backed Notes, Series 2008-A, Baa3 -- $3.1 mil; Class G, 11.630%, Timeshare Loan Backed Notes, Series 2008-A, Ba2 Bluegreen specializes in drive-to timeshare developments in regional locations. There are 44 in-network resorts in the Bluegreen Club. Bluegreen, which has a senior secured rating of B3 from Moody's with a stable outlook, markets to people with minimum household incomes of $40,000 a year. It estimates that its customer's average annual household income is approximately $70,000, which is less than the industry average. The average outstanding loan balance in the transaction as of the statistical cut-off date of Feb. 15, 2008 was approximately $13,945. The weighted average coupon was approximately 15%.The weighted average original term to maturity was 120 months and the weighted average age was 3.3 months. Most of the loans have an original term of 10 years with a minimum required down payment of 10%. Higher down payments lead to a reduction in the interest rate charged on the loan. Approximately 73.4% of the collateral balance arises under loans for resorts located in Florida and South Carolina. By state of residence, the highest obligor concentration is in North Carolina with 9.7%. The concentration of foreign borrowers at the statistical cut-off date is approximately 1.3%. The required reserve fund balance as a percentage of the aggregate closing date collateral balance will be at closing 2.5% growing to 7.5%. After month 18, the required reserve fund balance will decrease by 1.25% per month to a floor of 1.5%. Bluegreen Corporation., headquartered in Boca Raton, Florida, has been in the timeshare business since 1994 and is among the top ten sellers of timeshares in the United States. Bluegreen is the servicer in this transaction. C-BASS CBO: Moody's Downgrades Ratings on Five Classes of Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by C-BASS CBO XVIII Ltd.: Class Description: $346,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $150,000,000 Class A-2 First Priority Senior Secured Fixed Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $46,500,000 Class B Second Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $12,700,000 Class C Third Priority Secured Floating Rate Deferrable Interest Notes Due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $17,800,000 Class D Fourth Priority Secured Floating Rate Deferrable Interest Notes Due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio CAREYTOWN SEAFOOD: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Careytown Seafood, Inc. dba Carytown Seafood dba Careytown Seafood 3107 West Cary Street Richmond, VA 23221 Bankruptcy Case No.: 08-31451 Type of Business: The Debtor sells seafood in wholesale and retail. Chapter 11 Petition Date: March 31, 2008 Court: Eastern District of Virginia (Richmond) Debtor's Counsel: Lynn L. Tavenner, Esq. (ltavenner@tb-lawfirm.com) Tavenner & Beran, PLC 20 North Eighth Street, Second Floor Richmond, VA 23219 Tel: (804) 783-8300 Fax: 804-783-0178 http://www.tb-lawfirm.com/ Total Assets: 913,902 Total Debts: 2,110,852 Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sam Rust Seafood, Inc. Seafood $240,556 P.O. Box 9760-620 Regional Drive Hampton, VA 23670 Hitachi Captial America Refrigeration Truck $77,066 21925 Network Place FM260; value of Baltimore, MD 21297-0513 security: $40,000 Refrigeration Truck $46,807 FK 180; value of security: $30,000 Refrigeration Truck $42,374 FE180; value of security: $30,000 Crocker & Winsor Seafoods, Seafood $105,946 Inc. 100 Widett Circle Boston, MA 02118 Sea Farms, Inc. Seafood $84,009 Ocean to Ocean Seafood Seafood $73,421 OFC Capital Corp. Lobster Tank; value $70,956 of security: $15,000 Twin Tails $56,920 Legacy Sea Products LLC Seafood $41,181 Agro America LLC Seafood $36,190 Pier Fish Co., Inc. Seafood $26,518 Tidewater Foods Inc. Seafood $23,650 Beaver Street Fisheries, Inc. Seafood $20,457 AdvanceMe Inc. Cash advances $20,000 from credit card companies based on sales Moreys Seafood International Seafood $19,487 Stavis Seafood Seafood $15,075 Slade Gorton & Co. Seafood $14,055 Crabs Express Crabs $10,654 Ryder Transportation Services Trucking $10,548 CCM MERGER: Moody's Chips Corporate Family Rating to 'B2' From B1 ----------------------------------------------------------------- Moody's Investors Service lowered the ratings of CCM Merger, Inc. due to the much slower-than-anticipated leverage reductions and fiercely competitive Detroit gaming market. As a result, Moody's believes it's unlikely that the company will be able to reduce debt EBITDA to at or below 5.0 times by the end of 2009 -- a primary underlying assumption supporting the initial assignment of the B1 corporate family rating in July 2005. Based on Moody's current EBITDA expectations for CCM Merger, it's expected that debt EBITDA for fiscal 2008 and fiscal 2009 will more likely be near 6.0 times, a level more consistent with a B2 corporate family rating. Ratings downgraded are: -- Corporate family rating to B2 from B1 -- Probability of default ratings to B2 from B1 -- Senior secured bank loan rating to B1 (LGD 3, 34%) from Ba3 (LGD 3, 35%) -- 8% senior notes due 2013 to Caa1 (LGD 5, 88%) from B3 (LGD 5, 88%). A stable ratings outlook was assigned. CCM Merger's debt EBITDA for the fiscal year-ended Dec. 31, 2007 was about 7.6 times. While this metric includes a significant amount of construction related debt tied to the company's $300 million permanent casino development, it also reflects EBITDA results that are below 2005 projected expectations. The EBITDA shortfall occurred as a result of: (1) greater than expected promotional activity and slower than expected growth in the Detroit market during the past 12-18 months; (2) a previous extension of the permanent casino opening deadline; and; (3) the recent opening of MGM MIRAGE's (Ba2/stable) MGM Grand Detroit casino, which in addition to growing the overall Detroit gaming market, has taken market share away from CCM Merger's MotorCity Casino. The stable rating outlook considers the favorable demographics and density of the Detroit gaming market along with the positive near- term contributors to CCM Merger's EBITDA. These include the 5% reduction in the company's wagering tax that recently took effect with the completion of the hotel and permanent casino complex and scheduled completion in June 2008 of significant additional amenities. The stable outlook also acknowledges that although CCM Merger's overall liquidity is adequate, its prospective ability to comply with debt covenants contained in its bank credit facility is uncertain. Ratings could be lowered in the near-term if the company does not meet its debt covenants, is not able to cure, negotiate or amend the affected covenant, loses access to its revolver availability, or its liquidity otherwise becomes constrained. Separate from any covenant violation, ratings could be lowered if heightened competition, construction delays and unfavorable economic trends keep debt EBITDA above 6.0 times by Dec. 31, 2009. CCM Merger, Inc. is a holding company whose primary operating subsidiary is Detroit Entertainment, LLC doing business as MotorCity Casino. All revenues and operating cash flows are derived from this subsidiary. As of Dec. 31, 2007, MotorCity Casino, located in Detroit, Michigan, had 100,000 square feet of gaming space, 2,324 slot machines, 68 table games, and approximately 3,000 parking spaces. The company does not publicly disclose financial data. CELANESE CORP: Moody's Upgrades Unit's Corporate Rating to 'Ba2' ---------------------------------------------------------------- Moody's Investor Service raised the corporate family rating of Crystal US Holdings 3 LLC, a subsidiary of Celanese Corporation, to Ba2 from Ba3. In addition, Moody's upgraded the secured revolvers and term loans to Ba2 and the unsecured notes and revenue bonds to B1. The ratings outlook is positive. The speculative grade liquidity rating of the company was affirmed at SGL-1. These actions conclude Moody's review initiated on Feb. 8, 2008. Upgrades: Issuer: Crystal US Holdings 3 LLC -- Probability of Default Rating, Upgraded to Ba2 from Ba3 -- Corporate Family Rating, Upgraded to Ba2 from Ba3 Issuer: Celanese U.S. Holdings LLC -- Senior Secured Bank Credit Facility, Upgraded to Ba2 from Ba3 Issuer: CNA Holdings, Inc. -- Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B2 Issuer: Corpus Christi (Port) TX, Auth of Nueces Cnty -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: Giles County I.D.A., VA -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: Matagorda (Cnty of) TX, Port of Bay City Auth -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: Red River Authority of Texas -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 Issuer: York (County of) SC -- Senior Unsecured Revenue Bonds, Upgraded to B1 from B2 The one notch upgrade reflects the company's strong operating performance in 2007, growth in Asia, strong pricing and demand in its Acetyl Intermediates businesses (approximately 52% of 2007 revenues), better product mix and cost improvements in Industrial Specialties, improving credit metrics and a large cash balance. Celanese continues to capitalize on the very strong operating environment in acetyls, acetate and Ticona being driven by increased demand and relatively high capacity utilization rates. This performance was achieved despite a substantial increase in various feedstock or energy costs. However, their Free Cash Flow to Debt metric declined due to the substantial, over $300 million, increase in working capital. The Ba2 ratings take into account Celanese's strong competitive position in key businesses and significant competitive barriers, including process know-how and requirements for world scale production capabilities. The ratings are tempered by its significant exposure to volatile petrochemical feedstocks, on- going acquisition activity and the potential for additional share repurchases that may increase debt. "While Celanese continues to improve its credit profile, we do not anticipate that debt reduction will be a priority", stated John Rogers, Senior Vice President at Moody's. The positive outlook reflects Moody's expectation that the acetyls business will remain strong for 2008 and into early 2009, providing a solid base of earnings and cash flow. The company's new low cost plant in Nanjing, China should provide a boost in 2008 with a full year of operations. The company has restructured a meaningful portion of its business portfolio over the last several years and Moody's has some concern over how these businesses will perform in a more difficult operating environment; and hence, the stability of its credit metrics over the cycle. Currently Net Debt to EBITDA and Retained Cash Flow to Net Debt are in the lower end of the "Baa" category at 2.8x and 24%, respectively. Improvement in the company's credit profile could be slowed if it pursues acquisitions of more than $500 million. To the extent that over the next 12-15 months the company continues to generate EBITDA of over $1.3 billion, free cash flow rises back above $350 million, and maintains margins despite potential declines in acetyl methanol pricing, Moody's would consider raising the company's rating. On the other hand, if the company's financial performance is below Moody's current expectations or if the balance sheet debt increased above $3.75 billion (including preferred stock) for more than 3-4 quarters without a commensurate increase in earnings and cash flow, Moody's could change the outlook to stable. The notching of the senior secured credit facilities at the same level as the CFR reflects the predominance of secured bank debt in the new capital structure, less subordinated debt cushion beneath it, and insufficient collateral coverage. The sale of certain US assets in the recent Oxo products and derivatives business divestiture further reduces the collateral coverage. The unsecured debt instruments remain behind a large amount of secured debt, and thus are rated two notches below the CFR. Moody's views Celanese's liquidity as very good and recognizes the company's significant liquidity due to its balance sheet cash of $825 million, undrawn $650 million secured revolver, and $99 million remaining availability under its credit-linked revolving facility (as of Dec. 31, 2007). In addition, Moody's expects the company to generate free cash flow in the range of $350-450 million (excluding extraordinary items) in 2008. Celanese is currently in compliance with all of the financial covenants related to its debt agreements. Celanese Corporation, headquartered in Dallas, Texas is a leading global producer of acetyls, emulsions (including vinyl acetate monomer - VAM), acetate tow and engineered thermoplastics. Celanese reported sales of roughly $6.4 billion for the fiscal year ending Dec. 31, 2007. Crystal US Holdings 3 LLC is a subsidiary of Celanese. Celanese US Holdings LLC (previously BCP Crystal US Holdings Corp.), along with Celanese Americas Corporation, are subsidiaries of CUS3 and borrowers under the credit facilities. CNA Holdings Inc. is a subsidiary CAC and the holding company for Celanese's North American operating companies. CHAMP CAR: Court Approves $6.25MM Asset Sale to Indy Racing ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana authorized the sale of Champ Car World Series LLC's assets to competitor Indy Racing League LLC, Bill Rochelle of Bloomberg News reports. Mr. Rochelle relates that the purchase agreement was entered into before the March 5 bankruptcy filing. The pact was amended to raise the purchase price to $6.25 million, resolving the opposing creditors' complaints. Indianapolis-based Champ Car World Series LLC, fdba Open Wheel Racing Series LLC and Corkscrew Acquisition LLC, -- http://www.champcarworldseries.com/-- organizes and operates a racing circuit that features about 20 drivers competing in single- seat, open-wheeled race cars. The circuit includes more than a dozen race tracks and road courses in the US, Canada, Mexico, and Australia. It regulates the sport and promotes the races; it generates revenue from sponsorships and broadcasting rights. It filed for chapter 11 protection on March 5, 2008 (Bankr. S.D. Ind. Case No. 08-02172). Gary Lynn Hostetler, Esq., and Jeffrey A. Hokanson, Esq., at Hostetler & Kowalik PC represent the Debtor in its restructuring efforts. The Debtor had assets of between $10 million to $50 million and debts between $1 million to $10 million when it filed for bankruptcy. Its largest unsecured creditor, Cosworth Inc., is owed $1,825,000. CHRYSLER LLC: U.S. Sales in March 2008 Down 19% at 166,386 Units ---------------------------------------------------------------- Reflecting the overall market in which 21 of 23 companies had a decrease in sales, Chrysler LLC on Tuesday posted U.S. sales of 166,386 units for March, down 19% from the same period a year earlier. "The market is tough right now for certain vehicles, especially pickup trucks, and we have reduced our daily rental fleet sales, which make our sales numbers lower," Steven Landry, Executive Vice President North American Sales, said. "However, cutting daily rental sales keeps the residual values on our vehicles higher, and that's added value that our customers appreciate." "The overall economic situation is causing many consumers, at all manufacturers, to either delay purchases, or shift to a different vehicle segment, but to one where we have new products," Mr. Landry said. "That segment shift is especially true with pickups. But we're pleased with the consumer response to our many new vehicles, especially our new minivans, compact vehicles and mid- size sedans." The compact vehicle trio of Dodge Caliber, Jeep Compass and Jeep Patriot posted it highest sales ever. Combined the three vehicles reached 21,909 buyers in March, up 51% from March 2007. The new long wheel base Dodge Grand Caravan and Chrysler Town & Country minivans combined for a 18% sales gain. And the new mid-size cars, the Chrysler Sebring Sedan/Convertible and the Dodge Avenger, combined for a 15% increase in sales. "For April, when the spring selling season gets into full swing, Chrysler will have in the market a typical Chrysler strong spring incentive program," Mr. Landry said. The company will offer great financing and owner loyalty incentives of up to $2,000 cash back for buyers of pickups and minivans. In addition, the company will launch advertising for the all-new 2009 Dodge Journey. "We are relieving credit pressures on customers by offering great deals on financing, including helping so-called Tier B consumers get the credit they deserve," Mr. Landry said. "And from a dealer perspective, we are keeping inventories down, despite the slowing market, which greatly relieves pressure on their businesses." Based in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * To date, Chrysler LLC holds Moddy's Investors Service's 'B3' long- term corporate family rating and probability of default rating assigned in July 2007. The company also has Moody's 'B1' bank loan debt rating, which was placed in November 2007. Standard & Poor's Ratings Services assigned a 'B' long-term foreign and local issuer credit ratings to Chrysler LLC in November 2007. The ratings still apply. CIFG GUARANTY: Fitch Slashes Insurer Fin'l Strength Rating to 'A-' ------------------------------------------------------------------ Fitch Ratings downgraded these Insurer Financial Strength ratings of CIFG Guaranty and its affiliates to 'A-' from 'AA-': CIFG Guaranty CIFG Assurance North America, Inc. CIFG Europe -- IFS to 'A-' from 'AA-'. Fitch has also removed CIFG from Rating Watch Negative, where it was originally placed on Feb. 5, 2008. The Rating Outlook is Negative. The downgrade of CIFG and its affiliates is based on Fitch's updated assessment of CIFG's capital position, a review by Fitch of CIFG's updated business plan, consideration of various qualitative ratings factors, and an update on Fitch's current views of U.S. subprime related risks. Fitch believes that CIFG's proforma claims paying resources, which include the $1.5 billion capital infusion in late-2007 from its shareholders Caisse Nationale des Caisses d'Epargne et Prevoyance and Banque Federale des Banques Populaires, are consistent with Fitch's updated standard for an 'A' category level of capital. However, claims paying resources fall below Fitch's 'AA' capital target by $1.2 to $1.7 billion. Fitch will continue to monitor developments in the residential mortgage-backed securities markets for its impact on direct exposure to that asset class as well as implications on structured finance collateralized debt obligations insured by CIFG. While CIFG's future business plans will include an emphasis on municipal finance and several improvements to its risk management framework, including the exit from several higher-risk capital intensive structured finance business lines, Fitch believes that CIFG may be extremely challenged in achieving these goals. CIFG's business platform has historically emphasized structured finance business, with a concentration in insuring CDOs. CIFG has not been able to establish a strong municipal franchise to date. Further, Fitch is unclear whether CIFG can maintain its franchise and business model with an 'A' category IFS rating, a level at which it currently sits with all three major rating agencies. Given its current rating and the potential losses the company is likely to experience; it may become even more difficult for the company to attain trading values on par with stronger financial guaranty competitors. Given these uncertainties, CIFG has decided to temporarily cease underwriting new business until the company can stabilize its financial and ratings position. Fitch believes that it will be very difficult to stabilize the ratings of CIFG until the company can more effectively limit the downside risk from its SF CDOs through reinsurance or other risk mitigation initiatives. Fitch does not anticipate removing the Negative Rating Outlook over the near- to intermediate-term until the ultimate risk of loss on the SF CDO portfolio can be more definitively quantified. Also influencing the Negative Rating Outlook for CIFG is Fitch's view that CIFG's shareholders may be less willing to provide further capital support to CIFG in the future than in the past. In addition, while shareholders have given no indication they would plan to remove capital from CIFG, Fitch recognizes that if CIFG is ultimately unable to successfully resume underwriting new business, that may create economic incentives for shareholders to consider doing so, which could further pressure ratings. Unquestioned capital support from large, strong shareholders has been a key qualitative aspect of CIFG's 'AAA' IFS rating historically, and played a tangible role in Fitch's maintenance of CIFG's 'AAA' rating following deterioration in CIFG's insured portfolio due to subprime exposures. CIFG's shareholders have indicated commitment to the business and will help to facilitate negotiations with counterparties. Finally, this action factors in Fitch's updated analysis of CIFG's $9.2 billion exposure to SF CDOs, and the implications this analysis has on Fitch's view of CIFG's overall capital adequacy position. Fitch currently believes that expected losses on CIFG's insured SF CDO will ultimately fall within a range of $1.7 to $2.4 billion. These totals reflect Fitch's current estimates of the range of future losses that CIFG would be expected to incur over the life of these transactions, stated on a present value basis. The range of outcomes reflects the unknown magnitude of U.S. residential mortgage losses on SF CDOs insured by CIFG. From a present value perspective, Fitch discounts the expected future loss rates by 5% over a two-year period for CDO-squareds, five years for mezzanine SF CDOs and seven years for high-grade SF CDOs. Fitch's analysis of expected losses includes an assumption that underlying cumulative loss rates on U.S. residential mortgages supporting outstanding subprime residential mortgage-backed securities pools will average 21% in the 2006 vintage year and 26% for the 2007 vintage year. These assumed cumulative loss rates are consistent with those currently used by Fitch for its ratings of outstanding RMBS transactions. Fitch notes that when it discusses 'expected losses' this is an analytical concept based on Fitch assumptions, and no inferences should be made with respect the applicability of these projections to CIFG's loss provisioning. Given Fitch's current projected loss estimates for 2006-2007 vintage subprime RMBS, it is expected that a high percentage of the underlying tranches that were originally rated below 'AAA' will potentially default and suffer significant losses. This development is expected to result in losses elevating high into the capital structure for many SF CDOs. Only those RMBS and SF CDO transactions from the 2006-2007 vintages that maintained very healthy levels of initial subordination are expected to avoid experiencing losses in the future. Fitch believes for modeling purposes that its expected loss estimates for SF CDOs fall approximately to an 'A' level ratings stress. Accordingly, in order to address the necessary level of capital to support a financial guarantor at the highest rating levels, expected losses are further stressed to arrive at 'AA' and 'AAA' capital requirements. This is done to capture the risk that losses could grow higher than expected due to a more severe downturn in the economy, sharper than expected declines in home prices, higher than expected loan defaults, or other adverse developments beyond expectations. CIFG Guaranty, CIFG Assurance North America, Inc. and CIFG Europe are subsidiaries of CIFG Holding. CIFG Holding is directly owned by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne et Prevoyance, two large French banking groups. COMMODORE CDO: Weak Credit Quality Cues Moody's Eight Rating Cuts ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Commodore CDO V, Ltd.: Class Description: $75,000,000 Class A-1A First Priority Senior Secured Floating Rate Delayed Draw Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $225,000,000 Class A-1B Second Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $50,000,000 Class A-2 Third Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $25,000,000 Class A-3 Fourth Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $70,000,000 Class B Fifth Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $13,250,000 Class C Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $24,000,000 Class D Seventh Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca Class Description: $8,500,000 Class E Eighth Priority Mezzanine Secured Deferrable Floating Rate Notes Due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CONSTELLATION COPPER: Defaults in CN$69 Million Debentures ---------------------------------------------------------- Constellation Copper Corporation said that approximately CN$1.9 million of interest due on March 31, 2008, on its CN$69 million convertible unsecured senior debentures has not been paid, resulting in a default under the terms of the convertible debentures. If the interest is not paid within 30 days, by April 30, 2008, the default will become an event of default as defined in the indenture, after which the terms of the convertible debentures provide the debenture holders with certain rights and remedies during the continuance of a default, including the right to accelerate all of the debt due under the convertible debentures. The company continues to pursue various near term financing alternatives, including bank financing, equity investment, mergers, and sale of certain assets or sale of the entire company. The company may consider filing for legal protection from its creditors in both Canada and the United States if cash liquidity problems can not be resolved. Going Concern As reported in the Troubled Company Reporter on Jan. 15, 2008, the company related that there is significant doubt about the its ability to continue as a going concern. The cash balance of $10.87 million at September 30, has been reduced further to approximately $3.20 million at Dec. 31, 2007, and in order to provide liquidity, the company is pursuing various near term financing alternatives, including bank financing, equity investment, mergers, and sale of certain assets or sale of the entire company. In late November 2007, as a result of a comprehensive management evaluation of Lisbon Valley operations, the company disclosed its decision to cease mining and crushing activities and convert the Lisbon Valley mine to a leach only operation in early 2008. The evaluation included analyses of various mining plans, waste stripping requirements, contract mining arrangements, available mining equipment, projected copper prices and extensive operating cost and cash flow projections. In connection with the evaluation and conversion to a leach only operation, the company recorded an asset impairment of $92,918,000. At Sept. 30, 2007, the company's balance sheet showed total assets of $72.68 million and total liabilities of $90.40 million, resulting to a total shareholders' deficit of $17.72 million. About Constellation Copper Headquartered in Lakewood, Colorado, Constellation Copper Corporation (CCU: TSX) -- http://www.constellationcopper.com/-- evaluates and develops mineral properties in the United States and Mexico. The company holds its properties primarily through three of its wholly owned subsidiaries, Lisbon Valley Mining Co. LLC, Minera Terrazas S.A. de C.V. and San Javier del Cobre S.A. de C.V. LVMC operates the Lisbon Valley copper mine, which comprises three main deposits: Sentinel, Centennial and GTO, plus the Cashin satellite deposit, with reserves and resources totalling +50 million tons and grading an average 0.48% copper. Minera Terrazas holds the company's interest in the Terrazas zinc-copper project located in north- central Mexico. The property has a total resource of 90 million tonnes grading 1.37% zinc and 0.32% copper in two adjacent deposits. San Javier del Cobre S.A. de C.V. holds the company's interest in the San Javier copper property located in northwestern Mexico. COOKSON SPC: Moody's Reviews 'Ba2' Rating on 2007-10HGB 2046 Notes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Cookson SPC 2007- 10HGB: Class Description: $5,000,000 Series 2007-10HGB Notes Due 2046 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. COREL CORP: Gets Proposal from Majority Shareholder Corel Holdings ------------------------------------------------------------------ Corel Corporation received an unsolicited proposal from Corel Holdings L.P., which is controlled by an affiliate of Vector Capital Corporation, the holder of 69% of Corel's outstanding common shares. CHLP is proposing to make an offer to acquire all of Corel's outstanding common shares not currently held by CHLP at a price of $11.00 cash per share. CHLP has indicated that any such offer would be conditional upon, among other things, satisfactory confirmatory due diligence and Corel's existing credit facility remaining in place after the consummation of any transaction. The board of directors of Corel has formed a special committee of independent members of the board consisting of Ian Giffen, Steven Cohen and Daniel Ciporin to assist it in evaluating and responding to the CHLP proposal and other related strategic considerations. Corel will not be providing further comment at this time but will provide updates as further information becomes available. There can be no assurance that any transaction will be completed or, if completed, of its terms, price or timing. About Corel Corporation Ottawa, Ontario-based Corel Corp. (NASDAQ: CREL) (TSX: CRE) -- http://www.corel.com/-- is a packaged software company with an estimated installed base of over 40 million users. The Company provides productivity, graphics and digital imaging software. Its products are sold in over 75 countries through a scalable distribution platform comprised of original equipment manufacturers, Corel's international websites, and a global network of resellers and retailers. The Company's product portfolio features CorelDRAW(R) Graphics Suite, Corel(R) WordPerfect(R) Office, WinZip(R), Corel(R) Paint Shop(R) Pro, and Corel Painter(TM). COREL CORP: S&P Puts 'B' Rating on Neg. Watch on Acquisition Bid ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' long-term corporate credit and senior secured debt ratings on Ottawa-based packaged software provider Corel Corp. on CreditWatch with negative implications. The recovery rating on the senior secured debt is unchanged at '3'. The CreditWatch placement follows the unsolicited bid by Cayman Islands-based Corel Holdings L.P. to acquire all of Corel's common shares outstanding that it doesn't hold already for a price of $11 per share. CHLP is controlled by an affiliate of San Francisco- based private equity investment company Vector Capital Corp. CHLP has indicated that its offer is conditional upon, among other things, confirmed satisfactory due diligence and Corel's existing credit facility remaining in place following the close of any transaction. In response to the bid, Corel's board of directors has formed a special committee to evaluate CHLP's proposal and other related strategic considerations. "The CreditWatch listing primarily reflects our lack of sufficient information about CHLP including its existing assets, operations, and capital structure, as well as its plans to finance the estimated US$84 million acquisition," said Standard & Poor's credit analyst Madhav Hari. Standard & Poor's notes that pursuant to CHLP's purchase of Corel, CHLP's financial policy and capital structure become germane to the ratings of 100%-owned subsidiary Corel. S&P will resolve the CreditWatch listing once S&P has had an opportunity to fully evaluate the transaction, including details of CHLP's operations and the new owners' strategy. CORTS TRUST: S&P Posts BB Rating on $27MM Certs. on Positive Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BB' rating on the $27.0 million fixed-rate corporate-backed trust securities certificates issued by CorTS Trust for Xerox Capital Trust I on CreditWatch with positive implications. The CreditWatch placement reflects the March 27, 2008, placement of the rating on the underlying securities, the 8% series B capital securities due Feb. 1, 2027, issued by Xerox Capital Trust I (a subsidiary of Xerox Corp.) on CreditWatch positive. The CorTS certificate issue is a pass-through transaction, the ratings on which are based solely on the rating assigned to the underlying collateral, Xerox Capital Trust I's $27.0 million 8% series B capital securities. COUDERT BROS: Examiners Say Ex-Partners Should Contribute $11.8MM ----------------------------------------------------------------- Harrison J. Goldin, the examiner appointed in Coudert Brothers LLP's bankruptcy case on Feb. 15, 2007, determined that the Debtor's former partners should pay $11.8 million to finance a Chapter 11 plan of liquidation in exchange for an absolution of claims the firm or its creditors is threatening to file against them, Bill Rochelle of Bloomberg News reports citing a 49-page report from the examiner. Mr. Gordin released a list of figures each former partner is to contribute, calling it a "proportionate partner contribution plan," Mr. Rochelle recounts. The range for each active partner is between $169,000 to $6,000. A partner, who retired or left the firm before Jan. 1, 2005, could chip in as little as $84. Mr. Rochelle relates that Mr. Goldin believes that the plan is a "fair and equitable settlement." As reported in the Troubled Company Reporter on May 17, 2007, Mr. Goldin has said the Debtor "likely" was insolvent one year before it filed for chapter 11 protection. Mr. Goldin's findings opened the door for creditors to sue Coudert's former partners for the return of $28 million in distributions they received while the firm was insolvent. Mr. Goldin also concluded that the partners may owe another $9.3 million in loans and overpayments. Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represent the Debtor in its restructuring efforts. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represent the Official Committee Of Unsecured Creditors. In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. The Debtor's exclusive period to file a plan expires on Sunday, May 20, 2007. CROWN MEDIA: Three New Members Elected to Board of Directors ------------------------------------------------------------ On March 26, 2008, Dwight C. Arn, William Cella and Brad R. Moore were elected to the Board of Crown Media Holdings Inc. by its Board of Directors upon the recommendation of the Nominating Committee. Messrs. Arn, Cella and Moore were nominated by Hallmark Entertainment Investments Co., a subsidiary of Hallmark Cards Incorporated. The Board has not determined the committees of the Board on which these directors will serve. Mr. Arn has been Associate General Counsel of Hallmark Cards Incorporated since 1989. Additionally, Mr. Arn has been serving as general counsel of Hallmark International since 1992 and as general counsel of Crayola LLC since 1995. Mr. Arn began his career at Hallmark Cards Incorporated in 1976 and has served in various attorney positions. Mr. Cella is the chairman and chief executive officer of The Cella Group, a media sales representation company. Before forming The Cella Group in 2008, Mr. Cella led MAGNA Global, a media negotiation, research and programming unit of the Interpublic Group of Companies. Prior to that, Mr. Cella served as executive vice president and director of broadcast and programming for Universal McCann North America. From 1994 through 1997, Mr. Cella served as director of national broadcast and programming for McCann-Erickson and, in 1997, was named executive vice president of McCann-Erickson for all of North America. Mr. Moore has been resident of Hallmark Hall of Fame Productions since 1993 and Hallmark Publishing since 1997, both of which are wholly-owned subsidiaries of Hallmark Cards Incorporated. Prior to that, Mr. Moore led the development, production and distribution of the Hallmark Hall of Fame series since 1983. Mr. Moore directed Hallmark Cards Incorporated's U.S. advertising efforts from 1982 to 1983. About Crown Media Headquartered in Studio City, Calif., Crown Media Holdings Inc. (NASDAQ: CRWN) -- http://www.crownmediaholdings.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The company currently operates and distributes the Hallmark Channel in the U.S. to approximately 84 million subscribers. The program service is distributed through 5,450 cable systems and communities as well as direct-to-home satellite services across the country. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, and will launch Hallmark Movie Channel HD in April 2008. Significant investors in Crown Media Holdings include: Hallmark Entertainment Holdings Inc., a subsidiary of Hallmark Cards Incorporated, Liberty Media Corp., and J.P. Morgan Partners (BHCA), LP, each through their investments in Hallmark Entertainment Investments Co.; VISN Management Corp., a for-profit subsidiary of the National Interfaith Cable Coalition; and The DIRECTV Group Inc. * * * At Dec. 31, 2007, the company's consolidated balance sheet showed $767.8 million in total assets and $1.247 billion in total liabilities, resulting in a $478.9 million total stockholders' deficit. CSK AUTO: O'Reilly Automotive to Acquire Business for $1.0 Billion ------------------------------------------------------------------ O'Reilly Automotive, Inc. and CSK Auto Corporation announced on April 1 that the companies signed a definitive merger agreement under which O'Reilly will acquire all of the outstanding shares of CSK common stock pursuant to an exchange offer, in a transaction valued at approximately $1.0 billion, including approximately $500 million of debt. The boards of directors of both companies have approved the transaction. Under the terms of the agreement, CSK shareholders will receive $11.00 of O'Reilly common stock, subject to a collar, plus $1.00 in cash for each share of CSK common stock. The amount of consideration to be received per share of CSK common stock will equal a number of shares of O' Reilly common stock based on an exchange ratio equal to $11.00 divided by the average trading price of O' Reilly common stock for the five trading days ending two trading days prior to the consummation of the exchange offer plus $1.00 in cash (subject to reduction); provided, however, that if the average trading price of O'Reilly stock is greater than $29.95, then the exchange ratio shall equal 0.3673, and if the average trading price is less than $25.67, then the exchange ratio shall equal 0.4285. "[It] is an exciting day for both O'Reilly and CSK shareholders," stated O'Reilly Automotive Chief Executive Officer Greg Henslee. "As a combined company, we will be even stronger and more competitive, with the ability to better meet the continuing evolution of the automotive aftermarket industry. Additionally, we are creating a company that will generate significant value for the combined companies' shareholders, growth opportunities for team members and enhanced service to our customers." "The benefits of this transaction are very compelling," said Larry Mondry, CSK Auto's President and Chief Executive Officer. "After careful consideration of a number of viable alternatives, our Board has determined that partnering with O'Reilly is clearly the best course of action for our shareholders. As part of a stronger, more financially flexible company, shareholders, creditors and suppliers will have a meaningful opportunity to participate in the development of a company that will be well positioned to be a nation-wide leader in the automotive aftermarket industry. Equally important, this transaction provides growth and advancement opportunities for CSK's team members." The transaction will create a combined entity that expects to realize several significant strategic benefits, including: -- Leading auto-parts retailer Following the close of the transaction, O'Reilly will be the third largest national auto parts retailer with approximately 3,200 stores located across the United States. The combined company had pro-forma revenues of approximately $4.4 billion in 2007. -- Strengthened and diversified position, creating a national platform O'Reilly and CSK maintain highly complementary business models in two distinctive regions of the country. Building upon the foundation of CSK's strong Western presence and O'Reilly's Midwestern and Southeastern presence, the combined company will be well positioned to further leverage O'Reilly's very effective dual-market strategy. Additionally, acquiring CSK will give O'Reilly a national platform and will allow further expansion into other geographical regions throughout the country. -- Opportunity to enhance existing CSK operations O'Reilly expects to strengthen CSK's existing operations by executing its proven dual market strategy of providing exceptional service to both DIY customers and professional installers. The implementation of O'Reilly's industry- leading distribution and inventory management systems will further improve the combined company's competitiveness in CSK's markets. Financial Considerations O'Reilly anticipates that the transaction will be modestly accretive to O'Reilly's earnings per share in fiscal year 2009. Cost savings are expected to be approximately $100 million annually beginning in fiscal year 2010, resulting in more significant earnings per share accretion. O'Reilly expects synergies to come primarily from leveraging the combined company's buying power to lower product acquisition cost and streamlining CSK's SG&A expense structure by implementing O'Reilly's dual market strategy. Timing, Approvals and Financing The transaction is subject to the successful conclusion of the exchange offer as well as customary closing conditions and antitrust approvals, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Based on the closing stock prices on Monday, March 31, 2008, O'Reilly expects to issue approximately 16 million shares of O'Reilly common stock to be issued to CSK shareholders. O'Reilly has entered into a commitment for a $1.2 billion asset based revolving credit facility with Bank of America and Lehman Brothers Inc. which will be used to refinance debt, fund the cash portion of the consideration and other transaction-related expenses and to provide ample liquidity for the combined company going forward. Lehman Brothers Inc. is serving as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal adviser to O'Reilly. JP Morgan Securities Inc. is acting as financial advisor and Gibson, Dunn & Crutcher LLP is acting as legal advisor to CSK. About O'Reilly Automotive, Inc. O' Reilly Automotive, Inc. is one of the largest specialty retailers of automotive aftermarket parts, tools, supplies, equipment and accessories in the United States, serving both the do-it-yourself and professional installer markets. Founded in 1957 by the O'Reilly family, the Company operated 1,830 stores in the states of Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Virginia, Wisconsin and Wyoming as of December 31, 2007. About CSK Auto CSK Auto Corporation is the parent company of CSK Auto, Inc., a specialty retailer in the automotive aftermarket. As of January 6, 2008, the Company operated 1,349 stores in 22 states under the brand names Checker Auto Parts, Schuck's Auto Supply, Kragen Auto Parts, and Murray's Discount Auto Stores. At Nov. 4, 2007, the company's consolidated balance sheet showed $1.16 billion in total assets, $985.4 million in total liabilities, and $175.7 million in total stockholders' equity. * * * As reported by the Troubled Company Reporter on Feb. 5, 2008, Moody's Investors Service affirmed the B1 corporate family rating and SGL-3 speculative grade liquidity ratings of CSK Auto, Inc., and changed the outlook on the corporate family rating to developing from negative after the announcement that O'Reilly Automotive plans to buy CSK Auto Corporation. TCR reported on the same day that Standard & Poor's Ratings Services placed its ratings, including the 'B-' corporate credit rating, on CSK Auto Inc. on CreditWatch with Positive implications following the announcement. The TCR reported on Jan. Jan 25, 2008, that S&P lowered the corporate credit rating on CSK Auto Inc. to 'B-' from 'B'. The outlook is negative. At the same time, S&P lowered the bank loan rating on the company's $450 million term loan due 2026 to 'B-' (the same as the corporate credit rating on CSK Auto) from 'B'. The recovery rating remains '3', indicating S&P's expectation for meaningful (50%-70%) recovery in the event of payment default. In addition, S&P lowered the rating on the company's senior unsecured debt to 'CCC' from 'CCC+'.