T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 3, 2008, Vol. 12, No. 79 Headlines ABITIBIBOWATER: Fitch to Put 'CCC/RR1' Rating on Unit's $400M Loan ACCELLENT INC: Posts $275MM Net Loss in Year Ended December 31 ACE SECURITIES: 53 Classes of Certs. Get Moody's Rating Downgrades ACE SECURITIES: 53 Classes of Certs. Get Moody's Rating Downgrades ADVANCED CELL: Issues $130,000 in Unsecured Convertible Notes ADVANCED CELL: Receives Default Notice from RHP MasterFund ADVANCED CELL: To Restate Financial Statements Due to Errors ADVANCED CELL: VP Ivan Wolkind Resigns as Chief Accounting Officer AEARO TECHNOLOGIES: Completes $1.2 Billion Merger Deal With 3M Co. AEARO TECHNOLOGIES: Moody's Withdraws Ratings on 3M Company Deal ALOHA AIRLINES: Court Rejects Governor's Plea to Stave Off Closure AMERICAN AXLE: UAW Wants Fair & Equitable Settlement, UAW VP Says AMERICAN HOME: Hearing on BofA's Bid to Lift Stay Set April 16 AMERICAN HOME: Beltway, Lehman Capital Buy Non-Performing Loans AMERICAN HOME: Court Approves Employment of PwC as Tax Advisors AMERICAN HOME: Wells Fargo Wants to Recoup Erroneous Payment AMERICAN LAFRANCE: New Order Approving Disclosure Statement Issued AMERICAN LAFRANCE: Court Resets Asset Sale Motion Hearing to May 1 AMERICAN LAFRANCE: Committee Withdraws Request for Ch. 11 Trustee AMERICAN LAFRANCE: To Dispose of 1,100 Executory Contracts ANALYTICAL SURVEYS: Completes Buyout of Axion's Common Stock ASARCO LLC: Judge Schmidt Okays Bidding Procedures for Assets Sale ASPEN TECHNOLOGY: Appoints KPMG as New Independent Accounting Firm BARRINGTON II: Seven Classes of Notes Get Moody's Rating Reviews BEAR STEARNS: Bank Sale to JPMorgan Gets Okay from Federal Reserve BEAR STEARNS: S&P Downgrades Ratings on 77 Classes From 21 Deals BFWEST LLC: WestLB Wants Chapter 11 Case Dismissed BGF INDUSTRIES: S&P Withdraws Ratings on Company's Request BLACKHAWK AUTOMOTIVE: Can File Chapter 11 Plan Until May 19 BLUE WATER: Gets Final Approval to Borrow $35MM from Citizens BLUE WATER: CIT Entities Balk at Miller Buckfire's Compensation BLUE WATER: Ford Balks at CIT Adequate Protection Payment Demands BRENDA CHAVEZ: Case Summary & Five Largest Unsecured Creditors BURDETTE FAMILY: Case Summary & 10 Largest Unsecured Creditors CAMULOS LOAN: S&P Attaches 'BB' Initial Ratings on Class E Notes CATHOLIC CHURCH: Davenport Submits Amended Disclosure Statement CATHOLIC CHURCH: Fairbanks Wants to Use Funds for Construction CELSIA TECH: David Clarke Resigns as Director Effective March 27 CHRYSLER LLC: Disputes Roush Claim on Plastic Molds at Plastech CHURCH & DWIGHT: Moody's Designates 'BB' Rating on Positive Watch CITIGROUP MORTGAGE: Fitch Chips Ratings on $721.6MM Certificates CLEAR CHANNEL: Judge Remands Merger Deal to Texas State Court COLONIAL PROPERTIES: Fitch Holds 'BB+' Rating on Preferred Stock COMFORCE CORP: December 30 Balance Sheet Upside-Down by $9 Million COMSTOCK HOMEBUILDING: PwC Expresses Going Concern Doubt COMUNIDAD KENSINGTON: Case Summary & 20 Largest Unsec. Creditors COSINE COMMUNICATIONS: Burr Pilger Raises Substantial Doubt COUNTRYWIDE FINANCIAL: Mozilo, Sambol to Get $19MM in Stock Payout CREATIVE GROUP: Seeks Okay to Sell Assets to Scorpion for $17MM CRISLAN BASSENGER: Case Summary & 15 Largest Unsecured Creditors CRYOCOR INC: Ernst & Young Raises Substantial Doubt CSFB HOME: 44 Certificate Classes Get Moody's Rating Downgrades CSK AUTO: Moody's Reviews Rating for Likely Lift on O'Reilly Deal CSK AUTO: $1BB O'Reilly Deal Cues S&P's B- Rating's Positive Watch CYBER DEFENSE: Michael Lawson Resigns from Board of Deirctors DANA CORP: Fitch Affirms 'BBB-' Rating on $90MM Revenue Bonds DANA CORP: Steelworkers Union Seeks $2,500,000 Success Fee Payment DANA CORP: Professionals Seek $186 Million Final Fee Payments DEERFIELD CAPITAL: Posts $96.2 Million Net Loss in 2007 DELTA PETROLEUM: Moody's Lifts Liquidity Rating; Holds Caa1 Rating DILLARD'S INC: Lagging Operating Results Cue Fitch to Hold Ratings DISTRIBUTED ENERGY: Issues $1.5 Million Investment Note to Perseus DORAL FINANCIAL: S&P Lifts Long-term Counterparty Rating to 'B+' ELDORADO RESORTS: Inks $245MM Sale of Casino Aztar from Tropicana ELDORADO RESORTS: Tropicana Deal Won't Affect S&P's 'B' Rating EMISPHERE TECH: Dr. Michael Goldberg Resigns as Board Director ENER1 INC: To Retire Convertible Debentures Due March 2009 ENTERPRISE PRODUCTS: Fitch Rates Junior Subordinated Notes at BB+ ENERGY PARTNERS: Inks Deal with Carlson on Naming of 3 Directors FIRST DARTMOUTH: Exclusive Plan Filing Period Extended to April 11 FORD MOTOR: Auto Finance Arm Completes Retail Securitization Deal FRENCH LICK: S&P Assigns 'CCC' Corporate Rating on Negative Watch GAYLORD ENTERTAINMENT: Moody's Junks Senior Note Ratings From 'B3' GETTY IMAGES: SEC Ends Inquiry on Company's Stock Option Practices GT LC: Case Summary & 19 Largest Unsecured Creditors HANCOCK FABRICS: Court Approves Changes to CRG Employment HANCOCK FABRICS: Files Lawsuit Over Unlawful Sham Foreclosure HEXION SPECIALTY: December 31 Balance Sheet Upside-Down by $1BB INTERSTATE BAKERIES: Wants to Employ C&W as Valuation Experts INTEREP NATIONAL: S&P Ratings Tumble to 'D' on Chapter 11 Filing IXIS REAL: Fitch Junks Ratings on 19 Certificate Classes JAMES RIVER: Completes $3 Million Public Offering of Common Stocks KKR PACIFIC: S&P Ratings Tumble to 'D' on Extendible CP Notes KRATON POLYMERS: S&P Junks Rating From 'B' on Weak Quarter Results KRISPY KREME: Asks Lenders to Relax Certain Financial Covenants LATIN AMERICA MEDIA: Case Summary & 20 Largest Unsecured Creditors LEVITZ FURNITURE: Court Dismisses Six Levitz Home Bankruptcy Cases LEXINGTON CAPITAL: Moody's Reviews Ratings on Seven Note Classes LEXINGTON PRECISION: Files for Ch. 11 Protection After Deal Fails LEXINGTON PRECISION: Files for Chapter 11 Protection in New York LUIS RIOS: Case Summary & 11 Largest Unsecured Creditors MACROVISION SOLUTIONS: Moody's Puts Ba3 Rating Pending $2.8BB Deal MACROVISION SOLUTIONS: S&P Puts 'B+' Rating on High Debt Leverage MADAKET FUNDING: Moody's Downgrades Ratings on Five Note Classes MADILL EQUIPMENT: Chapter 15 Petition Summary MAGNA ENTERTAINMENT: Extends $40 Mil. Credit Facility to April 30 MANTOLOKING CDO: Moody's Cuts Ratings on Declining Credit Quality MCCLATCHY CO: Debt Reduction Doubts Cues Moody's Rating Downgrades MEGA BRANDS: Posts $97 Million Net Loss in Year Ended December 31 METRO ONE: To Close Four Call Centers and Eliminate 600 Positions MICROMET INC: E&Y Gave an Adverse Opinion on Internal Control MORTGAGE LENDERS: Disclosure Statement Hearing Set April 23 MORTGAGE LENDERS: Sues Merrill Lynch for Preferential Payments MORTGAGE LENDERS: Court Extends Plan Filing Period to May 15 MORGAN STANLEY: S&P Junks Ratings on Four Classes From Low-Bs MORGAN STANLEY: Moody's Downgrades Ratings on 13 Classes of Certs. MORGAN STANLEY: Fitch Lowers Ratings on 27 Certificate Classes MULTICELL TECH: Hansen Barnett Expresses Going Concern Doubt NATIONAL FOUNDATION: A.M. Best Chips IC Rating to bb from bb+ NEXTMEDIA OPERATING: Moody's Reviews 'B2' Rating for Possible Cut NORTH OAKLAND: Failure to Pay on Time Prompts Moody's Junk Rating NOVASTAR MORTGAGE: Fitch Slashes Ratings to CCC on Seven Classes ORAGENICS INC: Kirkland Russ Murphy Expresses Going Concern Doubt PEOPLES CHOICE: Files Amended Ch. 11 Plan and Disclosure Statement PHOENIX COLOR: S&P Withdraws Ratings on Visant Corp. Acquisition PHOENIX COLOR: Completes Merger Agreement With Visant for $219MM PLASTECH ENGINEERED: Wants to Borrow $80MM from Lender Consortium PLASTECH ENGINEERED: Chrysler Disputes Roush Claim on Molds PLASTECH ENGINEERED: Goldman Opposes Claim Waivers in DIP Loan PORTER SQUARE II: Moody's Junks Rating on $9 Mil. Notes From 'Ba3' PORTER SQUARE III: Moody's Downgrades Ratings on Five Note Classes PRC LLC: Files Disclosure Statement Supporting Chapter 11 Plan PRC LLC: Court Okays Regis McElhatton as Chief Executive Officer PRC LLC: U.S. Trustee Amends Creditors Committee Composition PROTECTED VEHICLES: Court Denies Creditors' Dismissal Request QUEBECOR WORLD: Obtains Final Nod on $1 Billion DIP Facility QUEBECOR WORLD: Inks $285 Million Printing Deal With Mcgraw-Hill QUEBECOR WORLD: Court Allows Assumption of BofA's P-Card Pact QUEBECOR WORLD: Payment of $3,175,111 Sales Commissions Approved QUEBECOR WORLD: Has Until June 4 to File Schedules & Statements QUIKSILVER INC: S&P Assigns 'BB-' Rating on Negative CreditWatch QUIGLEY COMPANY: Court Approves Amended Disclosure Statement QUIGLEY COMPANY: Plan Confirmation Hearing Set on September 4 REALOGY CORP: S&P Retains 'B' Issue-level Rating on Senior Notes RECYCLED PAPER: Moody's Further Slashes Rating to 'Caa2' From Caa1 SEITEL INC: Posts $93 Million Net Loss in Year ended December 31 SENTINEL MANAGEMENT: Ex-CEO Wants Time to Resolve to Fraud Charges SHARPER IMAGE: Securities to be Delisted from NASDAQ Stock Market SHARPS CDO: Moody's Slashes Ratings on Six Classes of 2046 Notes SILVER ELMS II: Moody's Junks Rating on Class E Notes From 'B2' SILVER ELMS: Declining Credit Quality Spurs Moody's Rating Cuts SKILLED HEALTHCARE: Moody's Gives Stable Outlook; Holds B2 Rating SOLO CUP: Earns $99 Million in Fourth Quarter Ended December 30 SOLOMON DWEK: Case Summary & 253 Largest Unsecured Creditors SOUTH COAST: Eroding Credit Quality Cues Moody's Rating Downgrades SPECTRUM BRANDS: Fitch Holds 'CCC' ID Rating with Negative Outlook STARVOX COMMS: Files for Ch. 7 Liquidation in Northern California STARVOX COMMUNICATIONS: Voluntary Chapter 7 Case Summary STILLWATER ABS: Poor Credit Quality Cues Moody's Five Rating Cuts STONERIDGE INC: Moody's Changes Outlook to Stable; Holds B1 Rating STRUCTURED FINANCE: Moody's Junks Rating on $15 Mil. Notes From B2 SUN-TIMES MEDIA: December 31 Balance Sheet Upside-Down by $75MM SUPERIOR OFFSHORE: Board Appoints Thomas E. Daman as CFO and EVP TEKNI-PLEX INC: Reaches Agreement in Principle with Noteholders THOMPSON METALS: Case Summary & 16 Largest Unsecured Creditors THORNBURG MORTGAGE: To Resume Lending After $1.35BB Notes Offering TIMBERWOLF I: Seven Classes of Notes Acquire Moody's Junk Ratings TOPANGA CDO: Eroding Credit Quality Cues Moody's Rating Reviews TORO ABS: Moody's Downgrades Ratings on Seven Classes of Notes TOUSA INC: Court Approves KZC Standard Services Agreement TROPICANA ENTERTAINMENT: Sells Casino Aztar to Eldorado for $245MM UBS MASTR: Fitch Downgrades Ratings on $729.1 Million Certificates VERTIS INC: Hiring of Financial Advisor Cues S&P's Negative Watch VPG INVESTMENTS: Court Okays Hiring of Cosho Humphrey as Counsel WESTMORELAND COAL: Restates 2005 and 2006 Financial Reports WESTWAYS FUNDING: Fitch Slashes Ratings to 'C' on Seven Classes WORNICK CO: Plan Show Prejudice Among Creditors, Noteholders Say XL CAPITAL: Fitch Cuts Ratings to BB and Removes Negative Watch ZAIS INVESTMENT: Moody's Downgrades Ratings on Four Note Classes * Fitch Says Increased Crude Oil Prices Have Cracked NA Refiners * Moody's Gives Neg. Outlook on Paper and Forest Products Industry * Moody's Opines on Interest Rate Asset Specific Hedges in CDOs * S&P Downgrades 86 Tranches' Ratings From 20 Cash Flows and CDOs * S&P Downgrades Ratings on 44 Classes From 14 RMBS Transactions * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ABITIBIBOWATER: Fitch to Put 'CCC/RR1' Rating on Unit's $400M Loan ------------------------------------------------------------------ Fitch Ratings expects to assign a 'CCC/RR1' rating to Abitibi- Consolidated Inc.'s new $400 million 364-day senior secured term loan and new $413 million senior secured 13.75% notes due 2011. ACI's new 15.5% senior unsecured notes due 2010 being issued as partial consideration for the tender of upcoming maturing bonds have been assigned an expected rating of 'CC/RR4'. In addition, Fitch has affirmed all of ACI's ratings and removed them from Rating Watch Negative, where they were placed on March 11, 2008. The Rating Outlook is Negative. The rating assignments are contingent on the probable completion of ACI's $1.4 billion refinancing package which also includes a $350 million 8% convertible notes offering. A portion of the net proceeds from the refinancing will be used to repay ACI's secured bank revolver maturing later this year, whose ratings will be withdrawn. The ratings on the term loan and the secured notes reflect a superior collateral coverage securing that indebtedness. The term loan is secured by accounts receivable not sold, inventory and ultimately by ACI's interest in the Alabama River and Augusta GA pulp and paper mills. Fitch estimates that a distressed value of these assets is worth more than 2 times the principal amount of the term loan. The secured notes are collateralized by ACI's ownership interests in 13 pulp and paper mills, 15 sawmills, four other lumber re-manufacturing facilities and the company's ownership interests in eight hydroelectric facilities plus other tangible and intangible assets. Fitch believes that at distressed values the secured notes are covered close to 3x. The unsecured indebtedness of ACI is estimated to have a 30% or so potential recovery factor, behind ACI's secured obligations. ACI's Issuer Default Rating and unsecured ratings reflect the still considerable challenges facing the company's predominantly Canadian newsprint and lumber businesses. These include shrinking demand from newsprint publishers in the case of the former and a poor U.S. residential construction market in the case of the latter. Both businesses are also being squeezed by inflationary cost factors, principally the cost and economic availability of wood, wood chips and the price of energy. Margins have also been pressured by the declining value of the U.S. dollar in which ACI's products are sold. Fitch believes that if these trends remain unchanged, the liquidity issues that ACI has just avoided could reappear within a year. These debt ratings and IDR of Bowater, Inc., ACI's sister company, Bowater Canadian Forest Products Inc., and the IDR of AbitibiBowater Inc., ACI's parent, are affirmed and removed from Rating Watch Negative; the Rating Outlook is Negative. Abitibi-Consolidated Inc. -- IDR 'CC'; -- Long-term unsecured 'CC/RR4'; -- Long-term secured 'CCC/RR1'. AbitibiBowater Inc. -- IDR 'CCC'. Bowater Incorporated -- IDR 'CCC'; -- Senior unsecured debt 'CCC/RR4'; -- Secured revolver 'B/RR1'. Bowater Canadian Forest Products Inc. -- IDR 'CCC'; -- Senior unsecured debt 'B-/RR2'; -- Secured revolver 'B/RR1'. ACI is the largest Canadian newsprint producer in North America with 15 paper mills and a major producer of supercalendered, high- bright and directory papers in addition to lumber for residential and commercial construction. ACI is a wholly owned subsidiary of ABH, which was formed by the combination of ACI and BOW on Oct. 29, 2007. ACCELLENT INC: Posts $275MM Net Loss in Year Ended December 31 -------------------------------------------------------------- Accellent Inc., a subsidiary of Accellent Holdings Corp., reported results for the fourth quarter and full year ended Dec. 31, 2007. Fourth quarter and full fiscal year 2007 results are preliminary and remain subject to completion of the audit being conducted by the company's independent public accountants. Net loss of $176.9 million was recorded in the fourth quarter of 2007 compared with a net loss of $7.7 million in the corresponding period of 2006. During the fourth quarter of 2007 the company completed its annual goodwill impairment test and recorded an additional goodwill impairment charge of $168.9 million, which amount is reflected in the net loss for that quarter. Net loss of $274.9 million was recorded in 2007 compared to a net loss of $18.6 million in the corresponding period of 2006. The 2007 net loss includes non-cash charges for impairment of goodwill and other intangibles of $251.3 million. During the first and second quarter of 2007 the company recorded impairment charges aggregating $82.4 million related to goodwill and intangible assets as a result of reduced growth expectations in the orthopaedic business. During the fourth quarter of 2007 the company completed its annual goodwill impairment test and recorded an additional goodwill impairment charge of approximately $168.9 million. "2007 was a transition year," Robert Kirby, president and CEO of Accellent, said. "We achieved four consecutive quarters of revenue growth, gained company wide alignment to key initiatives to drive improvements in revenue, cost reduction and cash flow while increasing our commitment to work collaboratively with our customers to drive value." At Dec. 31, 2007, the company's balance sheet showed total assets of $1,122.365 million, total liabilities of $810.370 million and total stockholder's equity of $311.995 million. About Accellent Inc. Headquartered in Wilmington, Massachussetts, Accellent Inc., -- http://www.accellent.com/-- provides fully integrated outsourced manufacturing and engineering services to the medical device industry in the cardiology, endoscopy, drug delivery, neurology and orthopaedic markets. Accellent has capabilities in design and engineering services, precision component fabrication, finished device assembly and complete supply chain management. These capabilities enhance customers' speed to market and return on investment by allowing them to refocus internal resources more efficiently. * * * As reported in the Troubled Company Reporter on Dec. 12, 2007, Moody's Investors Service downgraded Accellent Inc.'s corporate family rating to Caa1 from B3 and assigned a negative outlook. At the same time, Moody's downgraded these ratings: (i) secured revolver to B2 (LGD2, 29%) from B1 (LGD2, 29%); (ii) secured term loan to B2 (LGD2, 29%) from B1 (LGD2, 29%); (iii) sr. subordinated notes to Caa3 (LGD5, 83%) from Caa2 (LGD5, 83%); (iv) PDR to Caa1 from B3; and speculative grade liquidity rating to SGL-4 from SGL-3. ACE SECURITIES: 53 Classes of Certs. Get Moody's Rating Downgrades ------------------------------------------------------------------ Moody's Investors Service downgraded 53 certificates and placed on review for possible downgrade 15 classes of certificates, from six transactions issued by ACE Securities Corp. Home Equity Loan Trust. The transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Complete rating actions are: Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- ASL1 -- Cl. A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to Baa2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Ba1 from Aa3 -- Cl. M-4, Downgraded to B1 from Baa1 -- Cl. M-5, Downgraded to Caa2 from Baa2 -- Cl. M-6, Downgraded to Caa3 from Ba1 -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to C from B3 -- Cl. M-9, Downgraded to C from Caa2 -- Cl. M-10, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL1 -- Cl. A, Downgraded to Aa2 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1A, Downgraded to Baa2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-1B, Downgraded to Baa2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to Caa1 from Aa2 -- Cl. M-3, Downgraded to Caa3 from Baa3 -- Cl. M-4, Downgraded to Ca from Ba3 -- Cl. M-5, Downgraded to C from Caa1 -- Cl. M-6, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL3 -- Cl. A-1, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa2 from Aa1 -- Cl. M-2, Downgraded to Ca from Baa3 -- Cl. M-3, Downgraded to C from Ba3 -- Cl. M-4, Downgraded to C from B2 -- Cl. M-5, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL4 -- Cl. A-1, Downgraded to A3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to A3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-3, Downgraded to A3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to Caa2 from Aa2 -- Cl. M-3, Downgraded to Caa3 from Aa3 -- Cl. M-4, Downgraded to Ca from Baa3 -- Cl. M-5, Downgraded to C from Ba2 -- Cl. M-6, Downgraded to C from B2 -- Cl. M-7, Downgraded to C from Caa2 -- Cl. M-8, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2007- ASL1 -- Cl. A-1, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa1 from Aa1 -- Cl. M-2, Downgraded to Caa2 from Aa2 -- Cl. M-3, Downgraded to Caa3 from Aa3 -- Cl. M-4, Downgraded to Ca from Ba2 -- Cl. M-5, Downgraded to C from B1 -- Cl. M-6, Downgraded to C from B3 Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2007- SL1 -- Cl. A-1, Downgraded to Baa1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to Baa1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa1 from Aa1 -- Cl. M-2, Downgraded to Caa3 from Aa2 -- Cl. M-3, Downgraded to Ca from Aa3 -- Cl. M-4, Downgraded to C from Baa1 -- Cl. M-5, Downgraded to C from Baa2 -- Cl. M-6, Downgraded to C from Ba3 -- Cl. M-7, Downgraded to C from Ca ACE SECURITIES: 53 Classes of Certs. Get Moody's Rating Downgrades ------------------------------------------------------------------ Moody's Investors Service downgraded 53 certificates and placed on review for possible downgrade 15 classes of certificates, from six transactions issued by ACE Securities Corp. Home Equity Loan Trust. The transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Complete rating actions are: Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- ASL1 -- Cl. A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to A2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to Baa2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Ba1 from Aa3 -- Cl. M-4, Downgraded to B1 from Baa1 -- Cl. M-5, Downgraded to Caa2 from Baa2 -- Cl. M-6, Downgraded to Caa3 from Ba1 -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to C from B3 -- Cl. M-9, Downgraded to C from Caa2 -- Cl. M-10, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL1 -- Cl. A, Downgraded to Aa2 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1A, Downgraded to Baa2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-1B, Downgraded to Baa2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to Caa1 from Aa2 -- Cl. M-3, Downgraded to Caa3 from Baa3 -- Cl. M-4, Downgraded to Ca from Ba3 -- Cl. M-5, Downgraded to C from Caa1 -- Cl. M-6, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL3 -- Cl. A-1, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa2 from Aa1 -- Cl. M-2, Downgraded to Ca from Baa3 -- Cl. M-3, Downgraded to C from Ba3 -- Cl. M-4, Downgraded to C from B2 -- Cl. M-5, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2006- SL4 -- Cl. A-1, Downgraded to A3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to A3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-3, Downgraded to A3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to Caa2 from Aa2 -- Cl. M-3, Downgraded to Caa3 from Aa3 -- Cl. M-4, Downgraded to Ca from Baa3 -- Cl. M-5, Downgraded to C from Ba2 -- Cl. M-6, Downgraded to C from B2 -- Cl. M-7, Downgraded to C from Caa2 -- Cl. M-8, Downgraded to C from Ca Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2007- ASL1 -- Cl. A-1, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to Ba3 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa1 from Aa1 -- Cl. M-2, Downgraded to Caa2 from Aa2 -- Cl. M-3, Downgraded to Caa3 from Aa3 -- Cl. M-4, Downgraded to Ca from Ba2 -- Cl. M-5, Downgraded to C from B1 -- Cl. M-6, Downgraded to C from B3 Issuer: ACE Securities Corp. Home Equity Loan Trust, Series 2007- SL1 -- Cl. A-1, Downgraded to Baa1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to Baa1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa1 from Aa1 -- Cl. M-2, Downgraded to Caa3 from Aa2 -- Cl. M-3, Downgraded to Ca from Aa3 -- Cl. M-4, Downgraded to C from Baa1 -- Cl. M-5, Downgraded to C from Baa2 -- Cl. M-6, Downgraded to C from Ba3 -- Cl. M-7, Downgraded to C from Ca ADVANCED CELL: Issues $130,000 in Unsecured Convertible Notes ------------------------------------------------------------- On March 21, 2008, Advanced Cell Technology Inc. issued and sold an aggregate of $130,000 in unsecured convertible notes to PDPI LLC and The Shapiro Family Trust. Dr. Shapiro, one of the company's directors, may be deemed the beneficial owner of the securities owned by The Shapiro Family Trust. The notes may not be prepaid without the written consent from the holder of the notes. The notes bear interest at the rate of 9% per annum, and mature April 11, 2008. The net outstanding amount of principal plus interest of the notes is convertible into the next round of debt or equity financing raised by the company on a dollar-for-dollar basis under such terms and conditions as may be applicable to the next round of financing. About Advanced Cell Technology Inc. Headquartered in Alameda, California, Advanced Cell Technology Inc. (OTCBB:ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human stem cell technology in the emerging field of regenerative medicine. It has developed and maintained a portfolio of patents and patent applications that form the proprietary base for its embryonic stem cell research and development. The company operates facilities in Alameda, California and Worcester, Massachusetts. At Sept. 30, 2007, the company's consolidated balance sheet showed $15.6 million in total assets and $42.1 million in total liabilities, resulting in a $26.5 million total stockholders' deficit. * * * As reported in the Troubled Company Reporter on March 26, 2007, Stonefield Josephson Inc. in Los Angeles, California, expressed substantial doubt about Advanced Cell Technology Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's minimal sources of revenue, substantial losses, substantial monetary liabilities in excess of monetary assets and accumulated deficits as of Dec. 31, 2006. The company expects that it will not be able to continue as a going concern and fund cash requirements for operations through June 30, 2008, with current cash reserves. ADVANCED CELL: Receives Default Notice from RHP MasterFund ---------------------------------------------------------- On March 18, 2008, Advanced Cell Technology Inc. received a notice of default under the company's Senior Secured Convertible Debenture issued Aug. 31, 2007, to RHP Master Fund Ltd. restating its notice to the company, accelerating and declaring immediately due and payable an aggregate amount equal to $397,725.22, which purported to include the principal outstanding amount of the Convertible Debenture, unpaid interest and liquidated damages through March 18, 2008. The notice references the following additional defaults alleged under the Convertible Debenture and Warrant: -- Failure to pay mandatory redemption amounts pursuant to RHP's default notices dated Feb. 15, 2008, and March 10, 2008; -- Failure to provide timely notification of reduction in conversion price of debentures associated with the company's $600,000 bridge financing closed in February 2008; -- Violation of debt incurrence restrictions; -- Violation of variable rate transaction restrictions; and -- Failure to cause the registration statement to be declared effective within the time frame required in the Convertible Debenture financing. The company has not received any default notices from any of its other Debenture holders and is continuing to negotiate with RHP to reach an amicable resolution of this matter. The company disputes the defaults identified in RHP's correspondence. About Advanced Cell Technology Inc. Headquartered in Alameda, California, Advanced Cell Technology Inc. (OTCBB:ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human stem cell technology in the emerging field of regenerative medicine. It has developed and maintained a portfolio of patents and patent applications that form the proprietary base for its embryonic stem cell research and development. The company operates facilities in Alameda, California and Worcester, Massachusetts. At Sept. 30, 2007, the company's consolidated balance sheet showed $15.6 million in total assets and $42.1 million in total liabilities, resulting in a $26.5 million total stockholders' deficit. * * * As reported in the Troubled Company Reporter on March 26, 2007, Stonefield Josephson Inc. in Los Angeles, California, expressed substantial doubt about Advanced Cell Technology Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's minimal sources of revenue, substantial losses, substantial monetary liabilities in excess of monetary assets and accumulated deficits as of Dec. 31, 2006. The company expects that it will not be able to continue as a going concern and fund cash requirements for operations through June 30, 2008, with current cash reserves. ADVANCED CELL: To Restate Financial Statements Due to Errors ------------------------------------------------------------ Advanced Cell Technology Inc. disclosed Thursday that the management of Advanced Cell Technology Inc. and the Audit Committee of its Board of Directors have determined that the consolidated financial statements and information contained in the company's Form 10-QSB filed with the Securities and Exchange Commission on Nov. 20, 2006, for the quarter and nine months ended Sept. 30, 2006, did not properly account for the debentures and warrants issued in September, 2006. The company said that said consolidated financial statements should no longer be relied upon. In particular, the valuation of the debentures and warrants conducted by a third-party engaged by the company in accordance with FAS 155 was incorrect as the wrong number of warrants was used in this calculation. The error resulted in the Black Scholes valuation being recorded as $3,572,545 instead of the correct valuation of $14,996,545. The warrants were undervalued at Sept. 6, 2006, by $11,423,565 and as a result changes in fair value of the Warrant Liability for the initial period ended Sept. 30, 2006, and all subsequent periods have been understated, and amortization of the Warrant Discount has been understated in all subsequent accounting periods. The company believes that the net effect of the changes to the Financial Statements resulting from this adjustment will be a net positive to both the Balance Sheet and Income Statement of approximately $2,500,000. The company said its auditors concur with their conclusions. About Advanced Cell Technology Inc. Headquartered in Alameda, California, Advanced Cell Technology Inc. (OTCBB:ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human stem cell technology in the emerging field of regenerative medicine. It has developed and maintained a portfolio of patents and patent applications that form the proprietary base for its embryonic stem cell research and development. The company operates facilities in Alameda, California and Worcester, Massachusetts. At Sept. 30, 2007, the company's consolidated balance sheet showed $15.6 million in total assets and $42.1 million in total liabilities, resulting in a $26.5 million total stockholders' deficit. * * * As reported in the Troubled Company Reporter on March 26, 2007, Stonefield Josephson Inc. in Los Angeles, California, expressed substantial doubt about Advanced Cell Technology Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's minimal sources of revenue, substantial losses, substantial monetary liabilities in excess of monetary assets and accumulated deficits as of Dec. 31, 2006. The company expects that it will not be able to continue as a going concern and fund cash requirements for operations through June 30, 2008, with current cash reserves. ADVANCED CELL: VP Ivan Wolkind Resigns as Chief Accounting Officer ------------------------------------------------------------------ Ivan Wolkind, Advanced Cell Technology Inc.'s senior vice president for finance and administration & chief accounting officer, resigned for personal reasons from all positions with the company and voluntarily terminated his employment arrangement with the company, effective March 17, 2008. Mr. Wolkind has agreed to serve as a consultant to the company, managing regulatory, accounting and securities compliance matters for a period of six months. The terms of Mr. Wolkind's consulting agreement have not been finalized. About Advanced Cell Technology Inc. Headquartered in Alameda, California, Advanced Cell Technology Inc. (OTCBB:ACTC) -- http://www.advancedcell.com/-- is a biotechnology company focused on developing and commercializing human stem cell technology in the emerging field of regenerative medicine. It has developed and maintained a portfolio of patents and patent applications that form the proprietary base for its embryonic stem cell research and development. The company operates facilities in Alameda, California and Worcester, Massachusetts. At Sept. 30, 2007, the company's consolidated balance sheet showed $15.6 million in total assets and $42.1 million in total liabilities, resulting in a $26.5 million total stockholders' deficit. * * * As reported in the Troubled Company Reporter on March 26, 2007, Stonefield Josephson Inc. in Los Angeles, California, expressed substantial doubt about Advanced Cell Technology Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006. The auditing firm pointed to the company's minimal sources of revenue, substantial losses, substantial monetary liabilities in excess of monetary assets and accumulated deficits as of Dec. 31, 2006. The company expects that it will not be able to continue as a going concern and fund cash requirements for operations through June 30, 2008, with current cash reserves. AEARO TECHNOLOGIES: Completes $1.2 Billion Merger Deal With 3M Co. ------------------------------------------------------------------ 3M completed its acquisition of Aearo Technologies Inc. 3M said Aearo provides a broad platform for accelerated growth. 3M expressed that it will significantly expand 3M's occupational health and environmental safety platform by adding hearing protection as well as eyewear and fall protection product lines to 3M's existing full-line of respiratory products. 3M further states that this acquisition enables them to provide industrial, military and construction customers as well as consumers with a more complete personal protection product offering. On Nov. 15, 2007, the company 3M and Aearo Technologies Inc. reported that they have entered into a definitive agreement for 3M's acquisition of Aearo for a total purchase price of $1.2 billion, to be financed through a combination of cash and other borrowings. About 3M Headquartered in St. Paul, Minnesota, 3M Company (NYSE:MMM) -- http://www.3M.com-- is a technology company with presence in industrial and transportation businesses, healthcare, display and graphics, consumer and office, safety, security and protection services, and electro and communications. The company manufactures and markets a variety of products. 3M manages its operations in six business segments: industrial and transportation; health care; display and graphics; consumer and office; safety, security and protection services, and electro and communications. The company's products are sold through numerous distribution channels, including directly to users and through numerous wholesalers, retailers, jobbers, distributors and dealers in a variety of trades in many countries worldwide. About Aearo Technologies Headquartered in Indianapolis, Indiana, Aearo Technologies Inc. -- http://www.aearo.com/-- through its subsidiary, Aearo Company, designs and manufactures eye, face, head, respiratory, hearing, and fall protection products and communication systems. Aearo Company manufactures and sells products under the brand names AOSafety, E-A-R, Peltor and SafeWaze. These products are sold through three segments. The safety products segment manufactures and sells hearing protection devices, communication headsets, non- prescription safety eyewear, face shields, reusable and disposable respirators, hard hats, fall protection and first aid kits. The safety prescription eyewear segment manufactures and sells prescription eyewear products that are designed to protect the eyes from the typical hazards encountered in the industrial work environment. The specialty composites segment manufactures an array of energy-absorbing materials that are incorporated into other manufacturers' products to control noise, vibration and shock. AEARO TECHNOLOGIES: Moody's Withdraws Ratings on 3M Company Deal ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including the 'B' corporate credit rating, on Aearo Technologies Inc., and removed them from CreditWatch, where they were placed with positive implications on Nov. 16, 2007. The ratings were withdrawn as a result of the company's acquisition by 3M Co. (AA/Stable/A-1+) for $1.2 billion. ALOHA AIRLINES: Court Rejects Governor's Plea to Stave Off Closure ------------------------------------------------------------------ The Honorable Samuel King of the U.S. Bankruptcy Court for the District of Hawaii rejected Governor Linda Lingle's request to delay Aloha Airline Inc.'s planned shutdown of its passenger operations, various reports say. In a court filing, Gov. Lingle had urged the Debtor to continue operating for a month unless it has exhausted all possible options in continuing business, the HonoluluAdvertiser.com reported. This includes, among others, finding a buyer for the division, determining if the Debtor has cash to last it for another month, and finding out if the bankruptcy filing was filed in good faith, related HonoluluAdvertiser.com. Gov. Lingle also mentioned that the state already has provisions in place to rescue nearly 3,500 workers in case Aloha proceeds to close its doors. The governor was saddened by the company's decision to shut down its passenger business, KITV.com related. Employees were angry at CEO David Banmiller for the weekend decision to close, supporting the governor's contention that it should continue exploring more alternatives, stated KHON News. However, Judge King felt differently about the issue. "I will leave it up to the debtor. . . [I]t is really not the court's business as long as it's a good faith decision based on the best interest of the estate," KHON News cited Judge King in a comment. About Aloha Airlines Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates are carriers that fly passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operate a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. This is the airline's second bankruptcy filing. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in February 2006. The company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. AMERICAN AXLE: UAW Wants Fair & Equitable Settlement, UAW VP Says ----------------------------------------------------------------- United Auto Workers union Vice President James Settles Jr., who is director of the union's American Axle & Manufacturing Holdings Inc. department said in a statement released on April 1, 2008: "Our union is committed to doing everything possible to reach a fair and equitable settlement at American Axle. But it takes two parties to negotiate an agreement. "Last Dec. 7, the UAW negotiating team requested detailed information from American Axle so that we could evaluate the company's contract proposals and prepare for bargaining. "As part of that request -- as is our standard practice when requesting sensitive financial data -- our union offered, in writing, to keep the information supplied by the company confidential. American Axle did not respond. "Two months later, on Feb. 26, 2008, the company had still refused to supply the complete information we needed to make important decisions regarding proposals which will affect pensions, health care, profit-sharing and other vital issues for UAW members at American Axle and their families. Failure to provide such information is a violation of federal law. "This unfair labor practice is one of the reasons UAW members are on strike at American Axle. In addition, the strike has been prolonged because the company has illegally terminated disability payments and health care for injured workers, as well as compensation -- including health care -- for laid off workers. "Five weeks into the strike, on March 27, the company finally provided a partial response to our request. During a meeting with union negotiators, on April 1, American Axle provided additional information to our bargaining team. "We are in the process of reviewing the information provided by the company to determine if it is fully responsive to our requests. We hope the company will do what is required to meet its legal obligation to provide data necessary for bargaining -- and reinstate benefits to injured and laid-off workers -- so that we can settle this dispute and bring our members back to work as soon as possible." As reported in the Troubled Company Reporter on March 31, 2008, Axle's Chief Executive Officer Richard Dauch berated United Auto Workers union representatives for the work stoppage that has caused a chain reaction in the U.S. auto industry. The CEO added that the auto parts manufacturer may end up outsourcing its manufacturing division if talks with the UAW negotiations fail. Mr. Dauch said that the company has the right to outsource its work since they have facilities all over the globe -- Mexico, South America, Europe, and Asia. Mr. Dauch added that Axle will not be forced into bankruptcy. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on Nov. 27, 2007, Moody's Investors Service affirmed American Axle & Manufacturing Holdings, Inc.'s Corporate Family rating of Ba3 as well its senior unsecured rating of Ba3 to American Axle & Manufacturing Inc.'s notes and term loan. At the same time, the rating agency revised the rating outlook to stable from negative and renewed the Speculative Grade Liquidity rating of SGL-1. AMERICAN HOME: Hearing on BofA's Bid to Lift Stay Set April 16 -------------------------------------------------------------- American Home Mortgage Investment Corp., its debtor-affiliates and Bank of America, N.A., agent for the lenders under American Home Mortgage Investment Corp.'s Second Amended and Restated Credit Agreement dated August 10, 2006, agree in a Court-approved stipulation on this schedule with respect to BofA's request for relief from automatic stay to sell certain mortgage loans, and the Debtors' objection on the request: Date of Deadline Agreed Activities ---------------- ----------------- March 27, 2008 Exchange of responses to discovery requests April 2, 2008 Exchange of expert reports April 4, 2008 Exchange of witness lists April 7, 2008 Deposition of expert witnesses April 11, 2008 Filing of pre-trial briefs and exchange of exhibits April 16, 2008 Hearing on BofA's request and the Debtors' objection In a separate stipulation, the Debtors and BofA agree: -- to limit expert-related document discovery to final version of expert reports and to materials considered by the expert in formulating opinions; -- that questioning of expert witnesses during deposition or hearing will not extend to the oral examination or other inquiry concerning draft reports or notes, and communications for the party expecting to call the expert, unless the expert relies upon the communication in support of his or her testimony; and -- that deposition will not exceed seven hours, exclusive of breaks. As reported by the Troubled Company Reporter on March 12, 2008, Bank of America, as agent of lenders that were owed about $1,104,550,000 as of the Debtors' bankruptcy filing -- intended to sell the rights to 3,400 mortgage loans with outstanding $584,000,000 that were pledged by the Debtors as collateral for their prepetition loan. Accordingly, Bank of America asked the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay under Section 362(d)(1) of the Bankruptcy Code to allow it to market and sell the loans and the servicing rights to those loans to protect the Secured Lenders from further erosion of their collateral. 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 U.S. Bankruptcy Court for the District of Delaware extends the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates 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. 31; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Beltway, Lehman Capital Buy Non-Performing Loans --------------------------------------------------------------- American Home Mortgage Investment Corp. disclosed the successful bidders for non-performing loans subject to security interests held by Bank of America, N.A., and J.P. Morgan Chase Bank, N.A. The winning bidders -- Beltway Capital LLC and Lehman Capital -- have agreed to pay more than 40% of the unpaid principal balance of those loans: Purchase Price Non-Performing Loans Successful Bidder (UPB Percentage) -------------------- ----------------- -------------- BofA Non-Performing Beltway Capital 44.37% Loans LLC JPMorgan Non- Lehman Capital 41.25% Performing Loans The BofA Non-Performing Loans refer to 3,400 mortgage loans with outstanding $584,000,000, which were among the assets pledged by American Home and its debtor-affiliates as collateral to BofA for their prepetition loan. JPMorgan Non-Performing Loans refer to approximately 327 mortgage loans with an aggregate unpaid principal balance of $127,000,000, subject to security interests by JPMorgan pursuant to the JPMorgan Credit Agreement. The Debtors withdrew their request to auction off 84 unencumbered mortgage loans, with an aggregate unpaid balance of approximately $24,000,000, which non-performing loans are subject to liens by AH Mortgage Acquisition Co., Inc. The Debtors previously obtained the approval of the U.S. Bankruptcy Court for the District of Delaware to seal the purchase prices of the BofA and the JPM Loans. The Debtors previously proposed not to publicly disclose the information until the earlier the earlier of the date the Court approves the sale of the AH Mortgage Loans or April 14, 2008. 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 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. 31; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Court Approves Employment of PwC as Tax Advisors ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the employment of PricewaterhouseCoopers LLP as tax advisors to American Home Mortgage Investment Corp. and its debtor-affiliates after parties resolved an objection by the Office of the U.S. Trustee for Region 3. The U.S. Trustee had contacted the Debtors and expressed an informal objection to the application to employ PwC concerning certain indemnification provisions and the scope of PwC's services. Following discussions among the Debtors, the U.S. Trustee and PwC, they agreed to a consensual resolution to the objection. Accordingly, the Court approves the Debtors' employment of PwC. At the parties' behest, the Court order that: -- PwC will not render other tax advice or perform other related duties to further assist in the administration of the bankruptcy estates without prior authorization from the Court. -- PwC will not be entitled to indemnification, contribution or reimbursement for services other than those described in the Engagement Letter and unless approved by the Court. -- The Debtors will have no obligation to indemnify or reimburse PwC for any claim or expense that is either (i) judicially determined to have arisen from PwC's gross negligence or willful misconduct, or a contractual dispute, in which the Debtors allege breach of PwC's contractual obligations. Judge Christopher Sontchi also rules that the Debtors are not authorized to indemnify PwC for tax preparation services rendered by the firm, including preparation or review of: -- Federal and State Partnership income tax returns for Bayliss Trust; and -- Form 1120 REIT, Form 1120 and state income tax returns for the year ending December 31, 2007, and subsequent year ending in 2008 for American Home Mortgage Investment Corp., American Home Mortgage Holdings, Inc., and their subsidiaries. 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 U.S. Bankruptcy Court for the District of Delaware extends the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates 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. 31; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Wells Fargo Wants to Recoup Erroneous Payment ------------------------------------------------------------ Wells Fargo Bank, N.A., asks the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay to the extent necessary to recover a payment made in error to, and unjustly retained by, American Home Mortgage Investment Corp. through recoupment, the imposition of a constructive trust, and the imposition of an equitable lien against certain securities owned by AHM Investment. Wells Fargo is the securities administrator, to a certain indenture dated as of March 13, 2007, along with American Home Mortgage Assets Trust 2007-A & SD1, as issuing entity, and Deutsche Bank National Trust Company, as indenture trustee. On March 26, 2007, Wells Fargo paid in error to AHM Investment $462,049 on account of the Class IV-M-4 Note held by the Debtor. Wells Fargo promptly notified the Debtor of the error and requested the immediate return of the Payment to the Trust. The Debtor, however, has refused to return the Payment. Todd C. Schiltz, Esq., at WolfBlock LLP, in Wilmington, Delaware, contends that because of the Debtor's refusal and the unjust enrichment of the bankruptcy estates at the expense of the Trust, Wells Fargo, on behalf of the Trust, should be granted relief from automatic stay, and authorized to: -- recoup the Payment from future distributions that become due to the Debtor on account of its securities in the Trust; -- assert, enforce, and realize upon a constructive trust imposed upon the Debtor's accounts, in which the Payment or its proceeds, were deposited; and -- assert, enforce, and realize upon an equitable lien on the Debtor's 25 securities in AHM Investment Trust 2005-SD1, AHM Investment Trust 2006-2, AHM Investment Trust 2007-A SD1, American Home Mortgage Assets LLC Trust 2007-3, and AHM Assets LLC Trust 2007-SD2, until Wells Fargo, on behalf of the Trust, may be fully reimbursed for the full amount of the Payment. Mr. Schiltz tells Judge Christopher Sontchi that the Payment should never have been made because no distributions were owing to any holders of Class IV-M-4 Notes at that time. He notes that the Debtor knew, or should have known, that it was very unlikely that any payments would be distributed to the Debtor on its Class IV-M- 4 Note. 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 U.S. Bankruptcy Court for the District of Delaware extends the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates 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. 31; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: New Order Approving Disclosure Statement Issued ------------------------------------------------------------------ Judge Mary F. Walrath, chief judge of the U.S. Bankruptcy Court for the District of Delaware, issued an amended order on March 28, 2008, approving American LaFrance, LLC's Fourth Amended Disclosure Statement for delivery to creditors. The Fourth Amended Disclosure Statement was filed by the Debtor in support of its Third Amended Plan of Reorganization dated March 27, 2008. The Court finds that the Fourth Amended Disclosure Statement complies with due process, the requirements of the Bankruptcy Code and Bankruptcy Rules and contains "adequate information" as the term is defined in Section 1125 of the Bankruptcy Code. The Court directs the Debtor, through its balloting agent, Kurtzman Carson Consultants LLC, to transmit by first-class mail copies of the Disclosure Statement, the Plan, the notice of confirmation hearing, the Ballots, and the voting instructions to holders of Class 1 Prepetition Lenders Secured Claims, Class 4 General Unsecured Claims, and Class 5 Convenience Claims. For the unimpaired Classes of Claims, the Debtor will send by first class mail to the subject claim holders a notice (i) stating a summary of the treatment provided under the Plan to each class, (ii) advising that the Disclosure Statement and Plan can be obtained by the Bankruptcy Court's Web site, the Balloting Agent's Website or on written request to the Debtor's counsel or Committee's counsel, (iii) stating the date of the Confirmation Hearing, and (iv) stating the date fixed to file objections to confirmation of the Plan. All ballots accepting or rejecting the Plan must be received by the Balloting Agent by 4:30 p.m., Prevailing Pacific Time, on April 18, 2008. The Court will convene a hearing on April 29, 2008, at 2:00 p.m., to consider the confirmation of the Plan. Objections to the Plan confirmation must be filed with the Court by April 18. The Debtor will also publish the Confirmation Hearing Notice once in the national edition of The Wall Street Journal, The New York Times, or the The USA Today, no later than 15 days before the Confirmation Hearing. The Official Committee of Unsecured Creditors has asserted its support of the Fourth Amended Disclosure Statement and Third Amended Plan. The Debtor is also directed to mail a copy of the Committee's support letter to general unsecured creditors. Judge Walrath presided over American LaFrance's Chapter 11 case pursuant to Judge Brendan Linehan Shannon's temporary absence. A full-text copy of the Amended Disclosure Statement Order is available for free at: http://bankrupt.com/misc/ALF_DisclosureStatORDdatedMarch28.pdf About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. The Debtor filed its plan of reorganization on Feb. 3. (American LaFrance Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Court Resets Asset Sale Motion Hearing to May 1 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware rescheduled the hearing of the Asset Sale Motion of American LaFrance LLC to May 1, 2008 at 10:00 a.m. Any response to the Sale Motion must be filed with the Court no later than April 24. As reported by the Troubled Company Reporter on Feb. 6, 2008, American LaFrance acknowledged that it has operated at a loss and experienced a severe contraction in trade terms by its vendors. The Debtor believed that the most viable solution to its liquidity crisis that will also preserve the value of its assets and business is an asset sale pursuant to Section 363 of the Bankruptcy Code. Accordingly, the Debtor asked the Court for permission to sell substantially all of its assets to Patriarch Partners Agency Services LLC, free and clear of liens, claims, encumbrances and subject to higher and better bids. Patriarch Partners Agency Services LLC, is the current secured DIP Lender and agent for the other DIP Lenders who has committed to extend a $50,000,000 DIP credit facility to the Debtor. From the Petition Date through the close of the proposed sale, Patriarch has agreed to fund the Debtor's day-to-day obligations. This is expected to end on May 1, 2008. The Sale Agreement Christopher Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, related that the Debtor seeks to enter into a asset purchase agreement with Patriarch. Under the APA, the Debtor will sell all of its assets to Patriarch for $150,000,000. The assets to be sold includes all of the Debtor's title and interest in and to all of its assets, properties, rights, claims and contracts owned, leased or licensed. The Debtor also intends to assume and assign certain contracts to Patriarch in connection with the proposed sale. Among the assets to be excluded from the proposed sale are all minute books, stock records and corporate seals; all records that the Debtor is required by law to retain in its possession; and the Debtor' equity interests. Pursuant to the APA, Patriarch will assume liabilities to cure costs associated certain contracts to be assigned by the Debtor to Patriarch; for trade payables arising postpetition that directly relates to the operation of the Debtor's business in the ordinary course; and all obligations under the Debtor's customer programs. The APA also provides that the Debtor will release Patriarch, as buyer, of all claims, counterclaim, set-off or causes of action. A full-text copy of the Patriarch Partners APA is available for free at http://researcharchives.com/t/s?27c3 About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. The Debtor filed its plan of reorganization on Feb. 3. (American LaFrance Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Committee Withdraws Request for Ch. 11 Trustee ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of American LaFrance, LLC withdraws, without prejudice, its request for the appointment of a Chapter 11 Trustee in the Debtor's Chapter 11 case. As reported by the Troubled Company Reporter on March 26, 2008, the Committee asked the U.S. Bankruptcy Court for the District of Delaware to appoint a Chapter 11 trustee in the bankruptcy case of American LaFrance, LLC, pursuant to Section 1104(a) of the Bankruptcy Code. On behalf of the Committee, David M. Fournier, Esq., at Pepper Hamilton LLP, in Wilmington, Delaware, told the Court that Patriarch Partners Agency Services, LLC's and Lynn Tilton's multiple and conflicting insider roles in the Debtor preclude the Debtor's management and professionals from discharging their fiduciary duties owed to the estate and non-insider creditors in the Chapter 11 case. Accordingly, he asserted, "cause" exists for mandating the appointment of a Chapter 11 Trustee. The Debtor, its allegedly secured lenders, and its equity holders all are under the common control of one person -- Lynn Tilton, Mr. Fournier asserted. He pointed out that: -- Ms. Tilton is the sole member of the Debtor's Board of Managers; -- Patriarch Partners Agency Services, which is managed by Ms. Tilton, is the agent for the Debtor's lenders; -- The alleged secured lenders of the Debtor are investment funds that are controlled by limited liability companies for which Ms. Tilton is the manager; and -- The lenders hold all or substantially all of the Debtor's equity. The Committee did not explain the cause of the withdrawal. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. The Debtor filed its plan of reorganization on Feb. 3. (American LaFrance Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: To Dispose of 1,100 Executory Contracts ---------------------------------------------------------- Pursuant to its request to sell substantially all of its assets, American LaFrance, LLC, notified the Court on March 10, 2008, of its intent to assume, sell, and assign certain of more than 1,000 executory contracts and unexpired leases and settle amounts to cure those contracts. The Contracts to be assumed, sold or assigned include (a) 450+ Condor Trucks Contracts, (b) 300+ Fire Contracts, (c) 200+ Condor Dealer Contracts, (d) 30+ Fire Dealer Contracts, (e) 30+ Ambulance Contracts, and (f) 120+ Miscellaneous Contracts. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, clarifies that the inclusion of any contract in the Assumption Notice will not constitute an admission of the Debtor that a contract is in fact an executory contract or unexpired lease or that contract will be needed to be assumed and assigned in connection with the Debtor's Asset Sale Motion. Any objection to the assumption, sale and assignment of the designated contracts and their corresponding cure costs were due March 31, 2008 at 4:00 p.m. A list of the 1000+ Contracts is available for free at: http://bankrupt.com/misc/ALF_ContractsforAssumption.pdf Responses A. Vogelpohl Fire Equipment Vogelpohl Fire Equipment, Inc., objects to the cure amounts set in the Debtor's Assumption Notice and asks the Court to direct the Debtor to pay these individual cure amounts as part of the $1,009,853 cure amount, the Debtor owes Vogelpohl: Party Contract Cure Amount ----- -------- ----------- City of Columbus Fire Truck A $326,208 City of Columbus Fire Truck B 326,208 City of Winchester Fire Truck 61,884 USEC Fire Truck 39,209 Village of Pomeroy Fire Truck 36,302 Southwest Council of Gov't. Fire Truck 32,164 City of West Carrollton Fire Truck 23,981 Harrison County Fire District Fire Truck 23,825 Tri-Community Joint Fire District Fire Truck 16,269 City of Strongville Ambulance 26,013 Children's Hospital of Akron Ambulance 11,700 B. RT Jedburg RT Jedburg Commerce Park, LLC, objects to the assumption, sale and assignment of its lease with the Debtor for real properties located at 1090, 1116 and 1124 Newton Way, in Summerville, South Carolina. Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington, Delaware, relates that Jedburg Industrial Properties, LLC, entered into a Lease Agreement on August 4, 2006, as amended on January 26, 2007, with the Debtor as lessee of the Summerville Property. The Debtor hired contractors in 2007 to make modifications and improvements to the Summerville Property but failed to pay those contractors $5,400,000 for the lessee work. As a result of non-payment by the Debtor, the contractors filed mechanic liens against the Summerville Property totaling $3,402,320. The Debtor also owes an additional $2,000,000 to 22 contractors, with the potential of claiming lien against the Summerville Property. Ms. Fatell notes that the Debtor's Assumption Notice seeks to assume the Summerville Property Lease but only proposes to pay RT Jedburg $111,000 as a cure amount. Ms. Fatell argues that the proposed cure amount fails to pay (i) all rent currently due; (ii) the defaults caused by the Debtor's non-payment of the contractors that performed the lessee's work; and (iii) RT Jedburg's $131,091 prepetition early occupancy rent. Accordingly, RT Jedburg asks the Court to direct the Debtor to: (a) remove the existing liens of the Summerville Property; (b) provide releases or an escrow fund for the potential liens so that none can become liens against the Summerville Property in the future; (c) pay RT Jedburg the full amount of the rent currently due of the Summerville Property; (d) pay RT Jedburg its monetary losses caused by the Debtor's non-payment of rent and failure to remove the existing liens of the Summerville Property; and (e) provide sufficient evidence to RT Jedburg that whoever the Debtor assigns to the Summerville Property Lease can comply with future performance, before the Debtor can assume, sell and assign the Lease. C. Apple Rock Advertising Apple Rock Advertising & Promotion, Inc., disputes the $0 cure amount indicated in the Debtor's Assumption Notice for its Services Agreement with the Debtor. Lisa Cresci McLaughlin, Esq., at Phillips, Goldman & Spence, P.A., in Wilmington, Delaware, relates that under an executory contract dated March 8, 2007, Apple Rock agreed to store, transport or arrange transportation, maintain, and display the Debtor's trade show exhibit pieces. She argues that as of March 18, 2008, the Debtor owed Apple Rock $94,662, comprised of (i) $81,658 for 2007 past due payments, (ii)$1,506 for 2008 storage fees, (iii) $4,298 for late fees, and (iv)$7,199 for attorney fees. Accordingly, Apple Rock asks the Court to: (i) determine that the cure amount owed to it under the Agreement is $94,662; and (ii) deny the Debtor's assumption request unless the Debtor pays the correct full cure amount. D. Truck Centers Truck Centers, Inc., asks the Court to remove the Truck Centers Demo contract and the St. Louis Children's Hospital ambulance contract it entered into with the Debtor from the Contracts list the Debtor seeks to assume, sell, or assign. Daniel K Hogan, Esq., at The Hogan Firm, in Wilmington, Delaware, relates that TCI does not wish to accept delivery of the Truck Centers Demo, a fire truck that it no longer wishes to purchase under all of the existing circumstances. "The Debtor should not be allowed to resurrect a contract, it previously rejected pursuant to its Court-approved Rejection Motion," Mr. Hogan stresses. Mr. Hogan adds that the Assumption Notice included the St. Louis' Children's Hospital ambulance contract placed with TCI. He notes that shortly before the Petition Date, representatives of the Debtor had a conference phone call with dealers including TCI, announcing the closure of the ambulance manufacturing plant and the production schedules for fire and ambulance equipment absent the St. Louis Children's Hospital ambulance. With the subsequent cancellation of the order by St. Louis Children's Hospital, TCI cannot take delivery of an ambulance for which it has no customer, Mr. Hogan maintains. "It would be inequitable for the Debtor to sell or assign its St. Louis Children's Hospital ambulance contract when, because of its own actions, the Debtor has caused the contract between St. Louis Children's Hospital and TCI to be cancelled," Mr. Hogan contends. 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) ANALYTICAL SURVEYS: Completes Buyout of Axion's Common Stock ------------------------------------------------------------ Analytical Surveys Inc. completed the acquisition of 100% of the common stock of Axion International Inc., through a merger of Analytical's newly formed subsidiary into Axion. Pursuant to the merger, the former shareholders of Axion received 36.8 million shares of Common Stock of Analytical, constituting approximately 90.7% of the issued and outstanding Common Stock of Analytical. On Nov. 20, 2007, Analytical Surveys and Axion Acquisition Corp., a subsidiary of the company, entered into an Agreement and Plan of Merger with Axion International Inc. Pursuant to the Merger Agreement, Merger Sub will merge with Axion, with Axion as the surviving corporation and a subsidiary of the company. In connection with the merger, James Kerstein, the chief executive officer of Axion, and Marc Green, president of Axion, were appointed as members of Analytical's board of directors. In additon, Mr. Kerstein was appointed chief executive officer, and Mr. Green was appointed president. Axion expects to commence production and sales by the third quarter 2008. "The commencement of our operations utilizing these groundbreaking technologies coincides with our country's need to rebuild much of its transportation related infrastructure and the growing awareness of our need to expand the production and use of environmentally friendly products," Jim Kerstein, CEO of Axion stated. "For example, North American freight and transit line railroads, which installed more than 200,000 crossties produced with the Rutgers' technology, replace more than 18 million railroad crossties each year." "Railroad crossties which we will produce from recycled plastics will last approximately 50 years," Mr. Kerstein added. "We are seeking to make substantial inroads in that market and to build bridges for both public and private projects. Our merger with Analytical Surveys puts us in a position to raise the additional capital we will need to effectively implement our planned production." About Axion International Inc. Axion International Inc. is the exclusive licensee of revolutionary patented technologies developed for the production of structural plastic products such as railroad crossties, bridge infrastructure, utility poles, marine pilings and bulk heading. These technologies which were developed by scientists at Rutgers University, a principal shareholder of Axion, transform recycled consumer and industrial plastics into structural products which are more durable and have a substantially greater useful life than traditional products made from wood, steel and concrete. In addition, Axion's recycled composite products will result in substantial reduction in greenhouse gases and also offer flexible design features not available in standard wood, steel or concrete products. About Analytical Surveys Based in San Antonio, Tex., Analytical Surveys Inc. (Nasdaq: ANLT) -- http://www.asienergy.com/-- provides utility-industry data collection, creation, and management services for the geographic information systems markets. The company has recently transitioned its focus toward the development of oil and gas exploration and production opportunities. ASI's Energy Division is focused on high-quality exploratory and developmental drilling opportunities, as well as purchase of proven reserves with upside potential attributable to behind-pipe reserves, infill drilling, deeper reservoirs, and field extension opportunities. Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 17, 2008, Houston-based Malone & Bailey PC expressed substantial doubt about the ability of Analytical Surveys Inc. to continue as a going concern after it audited the company's financial statements for the year ended Sept. 30, 2007. The auditing firm reported that the company has suffered significant operating losses in 2007 and prior years and does not currently have external financing in place to fund working capital requirements The company posted a net loss of $4,534,000 on total revenues of $586,000 for the year ended Sept. 30, 2007, as compared with a net loss of $335,000 on total revenues of $4,320,000 in the prior year. At Sept. 30, 2007, the company's balance sheet showed $1,176,000 in total assets and $2,274,000 in total liabilities, and $1,098,000 stockholders' deficit. ASARCO LLC: Judge Schmidt Okays Bidding Procedures for Assets Sale ------------------------------------------------------------------ The Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas approved the proposed bidding procedures for the sale of substantially all of ASARCO LLC's assets, on an interim basis, after ASARCO LLC submitted a modified proposed order. On March 18, Judge Schmidt conducted a hearing on the bidding procedures and objections against it, and -- in the open court -- granted preliminary approval of the bidding procedures but directed ASARCO LLC to submit a modified proposed order. During the March 18 Hearing, Judge Schmidt also directed ASARCO and other parties-in-interest to come up with an agreement as to the duties of a Chapter 11 examiner. Pursuant to the Interim Bidding Procedures Order, ASARCO will conduct the Plan Sponsor Selection Meeting at a time and place as determined by ASARCO and to take all actions necessary, in the discretion of ASARCO, to conduct and implement the auction. Initial plan sponsor proposals are due April 21 and a plan sponsor selection meeting will be held two weeks later. ASARCO will distribute a Draft Agreement to bidders provided that the Draft Agreement will not include any disclosure schedules until 10 days before the deadline to submit written proposals. The disclosure schedules and any updates will be available to bidders in the virtual data room. To the extent the Final Agreement contains a break-up fee, the break-up fee will be the sole remedy of the Successful Bidder if a definitive agreement is terminated under circumstances where the break-up fee is payable. The Successful Bidder will have no other remedy against ASARCO, the company's Board of Directors and their advisors, other than, with respect to ASARCO only, any willful or intentional breach by ASARCO of the definitive agreement. Unless otherwise directed by the Court, (i) bidders will be required to submit non-public information about themselves only to ASARCO, its legal and financial advisors, the Creditor Constituents, their legal and financial advisors, and (ii) those parties will not disclose the non-public information. Lehman Brothers, Inc., will maintain confidentiality in accordance with the ethical wall established pursuant to the firm's internal procedures. Judge Schmidt will convene a hearing to consider final approval of the bidding procedures after the plan sponsor selection meeting. During the final hearing, Judge Schmidt will also consider approval of the No-Shop Requirement, the Fiduciary Out and the Superior Proposal Threshold. Objections to the entry of a final order approving the Bidding Procedures Motion must be filed no later than 48 hours before the Final Hearing. ASARCO will provide the executed Final Agreement to all parties having filed an objection at least five business days before the Final Hearing. ASARCO will bear the burden to prove that the decision of the ASARCO Board to approve the Bid Procedures is a reasonable exercise of its business judgment. Objections filed by Century Indemnity Company, Mt. McKinley Insurance Company, Everest Reinsurance Company, American Home Assurance Company, Lexington Insurance Company, Mitsui & Co. (U.S.A.), Inc., Mitsui & Co., Ltd., Ginrei, Inc. and MSB Copper Corp., to the proposed bidding procedures are reserved for the hearing on confirmation of ASARCO's plan of reorganization. Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., and Citigroup Global Markets, Inc., withdrew their objections to the proposed bidding procedures. Harbinger, et al., told the Court during the March 18 Hearing that they intend to support the sale process initiated by ASARCO LLC. Previous Objections "Although ASARCO [LLC] claims to have submitted a purely procedural motion to identify a 'plan sponsor' through the Bid Procedures, the truth is that the Motion are carefully constructed steps designed to insulate the actions of ASARCO and the so-called Creditor Constituents from proper scrutiny," Asarco Incorporated argued. Asarco Inc. pointed out that (a) no "plan sponsor" has actually been selected; (b) ASARCO LLC has spent the last 10 months soliciting bidders without Court approval; (c) ASARCO LLC and the Creditor Constituents have not even finalized their agreement on the terms of a Chapter 11 plan of reorganization; and (d) no specific break-up fee is ready to be proposed, and it is not even clear at what stage ASARCO expects to seek approval of its winning bidder. Charles A. Beckham, Esq., at Haynes and Boone, LLP, in Houston, Texas, noted that ASARCO LLC commits itself to no particular course of action and reserves the right to modify its proposed bid procedures or to abandon them entirely as it sees fit. Mr. Beckham contended that the Sale Motion seeks to further certain objectionable purposes, including: * the continued involvement of certain conflicted parties in the plan sponsor selection process; * the continued unfettered discretion of ASARCO LLC to market its assets with little or no oversight or review; * the continued discrimination by ASARCO LLC against Asarco Inc.; and * the approval of an unnecessary break-up fee with no rational relationship to the Successful Bidder's actual costs. Asarco Inc. also refuted the No-Shop Requirement and the Superior Proposal Threshold proposed by ASARCO LLC. The No-Shop Requirement provides that ASARCO LLC will refrain from soliciting other proposals after the plan sponsor is selected at a meeting. Asarco Inc. submitted a proposed bidding procedures order to provide that the Court should not sub silentio foreclose its rights. Asarco Inc. maintained that it is not acquiring ASARCO LLC's assets but is rather proposing to retain its equity interest in the mining company while paying creditors in full or unimpairing those creditors. In a separate filing, Asarco Inc. asked Judge Schmidt to reconsider the Court ruling approving a protective order and striking some items in the discovery request Asarco Inc. sent to ASARCO LLC, the Official Committee of Unsecured Creditors and the United Steelworkers. ASARCO LLC's Response ASARCO LLC argued that the proposed bidding procedures submitted by Asarco Inc. would "chill" bidding during the plan sponsor selection process. In a letter sent to Judge Schmidt, ASARCO LLC reminded the Court that it has presented extensive evidence and testimony on its business judgment and reasonableness of the plan sponsor selection procedures. The Debtor noted that Asarco Inc. did not present any witnesses. Asarco Inc.'s argument, according to ASARCO LLC, is nothing more than a misguided and inadequate attempt to suggest a conspiracy among ASARCO LLC and creditor constituents to prevent Asarco Inc. from participating in the plan sponsor selection process, when in fact that participation is exactly what the Bidding Procedures Motion is trying to achieve. Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, argued that the no-shop covenant will not prevent ASARCO LLC's Board of Directors from considering a proposal sufficiently higher than the consideration provided in a final agreement. Mr. Kinzie clarified that the Superior Proposal Threshold is intended to compensate ASARCO LLC's bankruptcy estate for the risk and cost associated with terminating a final agreement and delaying confirmation of a reorganization plan. It also provides qualified bidders with incentive to submit higher and better proposals because of the protection given to the successful plan sponsor against termination of a final agreement. At the same time, the Superior Proposal Threshold will deter bidders from waiting until after the plan sponsor selection meeting to submit their highest and best bid because of the increase in purchase price that the Superior Proposal Threshold would require. Mr. Kinzie maintained that Lehman Brothers, Inc., is a disinterested party, qualified to design and implement the Plan Sponsors Procedures. He said Lehman Brothers has disclosed that its parent, Lehman Brothers Holdings, Inc., indirectly acquired a 20% interest in the top-level investment management entities of the D.E. Shaw Group, who is a potential plan sponsor participant. Mr. Kinzie said LBHI is not involved in the day-to-day investment decisions made by D.E. Shaw and does not have any directors or management serving in any capacity for D.E. Shaw. ASARCO LLC said it has filed under seal a confidential information memorandum to familiarize the Court with its asset marketing program. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors are currently asking the Court to extend their exclusive plan-filing period to June 10, 2008. (ASARCO Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASPEN TECHNOLOGY: Appoints KPMG as New Independent Accounting Firm ------------------------------------------------------------------ The Audit Committee of Aspen Technology Inc.'s Board of Directors has appointed KPMG LLP as its independent registered public accounting firm for the fiscal year ending June 30, 2008. As disclosed on Jan. 16, 2008, Deloitte & Touche LLP declined to stand for re-appointment for the fiscal 2008 audit. There was no disagreement between the company and Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure. About Aspen Technology Based in Cambridge, Massachusetts, Aspen Technology Inc. (Nasdaq:AZPN) -- http://www.aspentech.com/-- provides software and professional services that help process companies improve efficiency and profitability by enabling them to model, manage and control their operations. The company has locations in Brazil, Malaysia and France. At March 31, 2007, the company's consolidated balance sheet showed $273.0 million in total assets, $154.5 million in total liabilities, and $118.5 million in total stockholders' equity. * * * Moody's Investor Service placed the company's long-term corporate family rating at B2 and its equity-linked rating at Caa1 in October 2001. These ratings still hold to date with a stable outlook. BARRINGTON II: Seven Classes of Notes Get Moody's Rating Reviews ---------------------------------------------------------------- Moody's Investors Service placed on review for possible downgrade the ratings on these notes issued by Barrington II CDO Ltd.: Class Description: $79,600,000 Class A1J-Q Floating Rate Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Class Description: $270,400,000 Class A1J-M Floating Rate Notes Due 2052 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Moody's also downgraded and left on review for possible further downgrade the ratings on these notes: Class Description: $189,000,000 Class A-2 Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $78,750,000 Class A-3 Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $43,750,000 Class B Floating Rate Notes Due 2052 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $15,750,000 Class C Deferrable Floating Rate Notes Due 2052 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $12,250,000 Class D Deferrable Floating Rate Notes Due 2052 -- Prior Rating: Ba3, 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. BEAR STEARNS: Bank Sale to JPMorgan Gets Okay from Federal Reserve ------------------------------------------------------------------ The Federal Reserve Board on Tuesday approved a proposal by JP Morgan Chase & Co. to acquire The Bear Stearns Cos. Inc.'s bank holdings, Bear Stearns Bank & Trust, of Princeton, New Jersey. JP Morgan Chase & Co. is not required to obtain the Board's prior approval under the Bank Holding Company Act to acquire The Bear Stearns Cos. Inc. As reported in the Troubled Company Reporter on March 26, 2008, the Federal Reserve Bank of New York will provide term financing to facilitate JPMorgan's acquisition of The Bear Stearns Cos. Inc. This action is being taken by the Federal Reserve, with the support of the Treasury Department, to bolster market liquidity and promote orderly market functioning. The New York Fed will take, through a limited liability company formed for this purpose, control of a portfolio of assets valued at $30 billion as of March 14, 2008. The assets will be pledged as security for $29 billion in term financing from the New York Fed at its primary credit rate. JPMorgan Chase will bear the first $1 billion of any losses associated with the portfolio and any realized gains will accrue to the New York Fed. BlackRock Financial Management, Inc. will manage the portfolio under guidelines established by the New York Fed designed to minimize disruption to financial markets and maximize recovery value. Last month, JPMorgan and Bear Stearns Companies Inc. disclosed an amended merger agreement regarding JPMorgan Chase's acquisition of Bear Stearns, raising JPMorgan's bid from $2 per share to $10 per share. In addition, JPMorgan Chase will purchase 95 million newly issued shares of Bear Stearns common stock, or 39.5% of the outstanding Bear Stearns common stock after giving effect to the issuance, at the same price as provided in the amended merger agreement. The purchase of the 95 million shares is expected to be completed on or about April 8, 2008. About JPMorgan JPMorgan Chase & Co. (NYSE: JPM) -- http://www.jpmorganchase.com/ -- is a global financial services firm with operations in more than 60 countries. The firm does investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its JPMorgan and Chase brands. About Bear Stearn Companies New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term