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/raid1/www/Hosts/bankrupt/TCR_Public/080417.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 17, 2008, Vol. 12, No. 91 Headlines AEGIS MORTGAGE: Court Extends Exclusivity Deadline to June 8 AEGIS MORTGAGE: Court OKs Severance Plan for Remaining Employees AHERN RENTALS: Debt-Financed Expansion Cues Moody's Neg. Outlook ALERIS INT'L: Moody's Holds B2 Rating and Revises Outlook to Neg. ALOHA AIRLINES: May Employ Epiq as Notice and Claims Agent AMERICAN AIRLINES: Fitch Holds Ratings & Revises Outlook to Stable AMR CORP: Posts $328 Million Net Loss in First Quarter of 2008 AMERICAN HOME: Sale of Mortgage Loan Servicing Biz Now Closed AMERICAN HOME: Asks Court to Disallow & Expunge 392 Claims AMERICAN HOME: Panel Seeks to Hire Hennigan as Conflicts Counsel AMR CORP: Fitch Holds Ratings and Revises Outlook to Stable ASCALADE COMMS: Provides Status Update on Disclosure Default AVALON RE: Fitch Cuts Rating to C from CCC- on Class C Notes BANCREDIT CAYMAN: Tricom Wants Claim Pegged at $120,000 BANCREDIT CAYMAN: Hearing for Tricom Case Examiner Adjourned BEAR STEARNS: Fitch Affirms 'B-' Rating on $2.9 Million Loans BEAR STEARNS: Moody's Chips Ratings on Nine Certificate Classes BERRY PLASTICS: S&P Rates $530.6 Million Sr. Secured Notes at BB- BLOCKBUSTER INC: Fitch Won't Take Rating Actions on Circuit Deal BROADVIEW NETWORKS: S&P Holds B- Rating; Revises Outlook to Stable BRODER BROS: Profit Margin Erosion Prompts Moody's to Junk Rating BRUSHFIELD CDO: Poor Credit Quality Cues Moody's Rating Downgrades CALAMOS INVESTMENTS: Seeks Financing to Address Illiquidity CFM U.S.: Wants Court to Approve Sale Bidding Procedures CFM U.S.: Can Access $8,000,000 Bank of Montreal DIP Facility CFM CORPORATION: Cuts 390 Workforce & Wind Down Ontario Operations CHANDLER INC: A.M. Best Holds 'bb-' Ratings on $24MM Debentures CITIGROUP COMMERCIAL: Expected Losses Cue Fitch to Cut Ratings CWABS ASSET-BACKED: Moody's Chips Ratings on Worsening Performance CWHEQ REVOLVING: Moody's Cuts Baa3 Rating to Ba2 on Cl. B Certs. COMMODORE CDO: Moody's Chips Ratings and Puts It Under Review DELPHI CORP: Wants Exclusivity Extended Beyond Plan Effective Date DELPHI CORP: Mulls Suing Plan Investors for Reneging on New EPCA DELTA AIR: Northwest Merger Cues S&P to Put Ratings on Pos. Watch DELTA AIR: Northwest Merger Cues Moody's to Put Rtng. Under Review DELTA AIR: Northwest Merger Prompts Fitch to Affirm 'B' ID Rating DORADO BECKVILLE: Case Summary & 20 Largest Unsecured Creditors DIABLO GRANDE: Wants to Hire Sheppard Mullin Bankruptcy Counsel EDGEWATER FOODS: Posts $1,014,793 Net Loss in Qtr. Ended Feb. 29 EQUISTAR CHEMICAL: Amends Partnership Supplement with Millennium EVRAZ GROUP: Fitch Assigns 'BB' Rating on Senior Unsecured Notes FIELDSTONE MORTGAGE: Moody's Cuts Ratings on Six Certificates FINANCIAL MEDIA: Posts $1,066,379 Net Loss in Qtr. Ended Feb. 29 FINLAY ENTERPRISES: Posts $10MM Loss in Year Ended December 31 FIREKEEPERS DEVELOPMENT: S&P Rates Proposed $325MM Sr. Notes at B FORTRESS ABS: S&P Reinstates Ratings on Three Classes of Notes FOX TROT: Moody's Lowers Rating to B1 from Baa3 on $19MM Notes FREMONT INVESTMENT: CapitalSource Deal Prompts Fitch's Pos. Watch GE COMMERCIAL: Fitch Holds Low-B Ratings on Four Cert. Classes GMAC COMMERCIAL: Fitch Holds 'B-' Rating on $4.8MM Class O Certs. GOLDEN KEY: Trustee Names Deloitte & Touche as Receiver GOODYEAR TIRE: Sets June 30 as Conversion Period for $4 Mil. Notes GRAND CIRCLE: S&P Withdraws 'B' Corporate Credit Rating GREAT PANTHER: Net Loss Rises to C$19MM in Year ended December 31 GREENPOINT MORTGAGE: Moody's Puts Three Cert. Ratings Under Review GREYSTONE LOGISTICS: Feb. 29 Balance Sheet Upside-Down by $9.6MM GSAA HOME: Moody's Junks Ratings on Four Certificate Classes GSAMP TRUST: Moody's Downgrades Ratings on 37 Certificates GSAMP TRUST: Moody's Chips Ratings on 24 Tranches HANOVER CAPITAL: Gets Notice of Listing Non-Compliance from AMEX HOOP HOLDINGS: U.S. Trustee Appoints Seven-Member Creditors Panel HOOP HOLDINGS: U.S. Trustee Sets Sec. 341(a) Meeting on April 25 INDEPENDENCE IV: Moody's Slashes Ba3 Rating to Caa2 on $26MM Notes INDYMAC INABS: Moody's Junks Ratings on Four Certificate Classes INPHONIC INC: Files Ch. 11 Liquidation Plan & Disclosure Statement INTERSTATE AUTO: Poor Performance Cues A.M. Best to Chip Ratings IPALCO ENTERPRISES: Lenders Agree to Amend $371MM Notes Indenture JP MORGAN: Fitch Holds 'B-' Rating on $4.6MM Class N Certificates KENNETH GOOD: Case Summary & 20 Largest Unsecured Creditors LEINER HEALTH: Sale Bidding Procedure, Incentive Program Approved LE MONDE: Moody's Chips Rating to Caa1 on Two Certificate Classes LIBERTY HARBOUR: Moody's Junks Rating on $17MM Class C Notes LINENS 'N THINGS: Deferred Payment Cues S&P to Put Default Ratings LINENS 'N THINGS: Deferred Payment Cues Moody's to Junk Ratings LOUISIANA RIVERBOAT: Can Hire Winston & Strawn as Special Counsel LOUISIANA RIVERBOAT: Can Hire Mesirow as Financial Advisors LOUISIANA RIVERBOAT: Hires Kurtzman Carson as Claims Agent LOUISIANA RIVERBOAT: Court Extends Schedules Filing to April 25 LUCHT'S CONCRETE: Hires Sender & Wasserman as Bankruptcy Counsel LUCHT'S CONCRETE: Hires Ted Clifton as Financial Consultant LUCHT'S CONCRETE: Hires Knight Field Fabry as Accountants MAXXAM INC: Posts $47 Million Net Loss in Year ended December 31 MIDNIGHT PROPERTIES: Voluntary Chapter 11 Case Summary MORGAN STANLEY: S&P Upgrades Secured Note Rating to BB+ from BB MORGAN STANLEY: Moody's Slashes Ratings on 16 Certificate Classes MOVIDA COMMS: Obtains Court Approval to Wind Down Business M. VANINI: Voluntary Chapter 11 Case Summary NATIONAL GAS: Settlement Hearing on 3 Lawsuits Moved to April 28 NEWPORT TELEVISION: S&P Puts 'B' Credit Rating with Stable Outlook NIEUW HAARLEM: S&P Withdraws Ratings at Collateral Mngr.'s Request NORTHWEST AIRLINES: Delta Air Merger Prompts S&P's Negative Watch NORTHWEST AIRLINES: Merger Cues Moody's to Put Rtng. Under Review NORTHWEST AIRLINES: Merger Prompts Fitch to Affirm Delta Rating NUTRITIONAL SOURCING: Wants Until July 31 to File Chapter 11 Plan NEW YORK RACING: Seeks to Extend Plan-Filing Period to May 2 OAKLAND VIEW: Voluntary Chapter 11 Case Summary OCTANS I: Moody's Lowers Ratings to C on Eight Note Classes OFFICE DEPOT: Decline in Performance Cues S&P to Cut Rating to BB+ OPEN TEXT: S&P Holds 'BB-' Rating; Changes Outlook to Positive PANTRY INC: Reduced Operating Margin Cues Moody's Rating Review PENTON MEDIA: CEO French Calls for Salary and Hiring Freeze PIER 1 IMPORTS: Earns $13.7 Million in 4th Quarter Ended March 1 PILGRIM'S PRIDE: Responds to Enforcement Action on Five Facilities PINNACLE POINT: Moody's Slashes A3 Rating to B3 on $14MM Notes POLYONE CORP: S&P Affirms 'B+' Rating on $80 Mil. Unsecured Notes POPULAR ABS: Fitch Downgrades Ratings on $94.5MM Certificates POWERMATE HOLDING: U.S. Trustee Appoints 7-Member Creditors Panel PRC LLC: Seeks May 8 Hearing to Consider Disclosure Statement PRIMUS TELECOM: Values Reassessment Prompts Moody's to Cut Rating PROTOCALL TECH: To Restate Financial Statements to Correct Errors PRUDENTIAL COMMERCIAL: Fitch Affirms 'B' Rating on $3.6MM Certs. QUALITY DISTRIBUTION: Cuts Florida Workforce by Approximately 17% RENAISSANCE HOME: Moody's Cuts Ratings to Ba3 on Two Certificates RITE AID: Extends Consent Solicitation for 8.125% and 7.5% Notes RITE AID: Shareholder Thornburg Investment Declares 10.22% Stake RHODES COS: S&P Cuts CCC+ Rating to CCC on Liquidity Constraints SHARPER IMAGE: Levin Resigns from Board, Wants to Acquire Assets SHARPER IMAGE: Asks Court to Extend Schedules Filing Date to May 2 SIRVA INC: More Parties Object to Joint Plan of Reorganization SOLO CUP: Successful Mgmt. Turnaround Cues S&P to Lift Rtng. to B- SOURCE ENTERPRISES: Court Denies Compensation to Former Counsel STATE STREET: Earns $530 Million in First Quarter Ended March 31 STEEL DYNAMICS: Moody's Rates $125 Million Unsecured Debt at Ba2 STRUCTURED ASSET: Fitch Lowers Ratings on $3.1 Bil. Certificates STRUCTURED ASSET: Fitch Chips Ratings on $317.6MM Certificates TAHOMA CDO: Moody's Downgrades Ratings on Eight Note Classes TALBOTS INC: Financing Arrangements Can Fund 2008 Operating Plan TEGRANT CORP: S&P Chips Rating to B- from B on Weak Performance TOURMALINE CDO: Poor Credit Quality Cues Moody's to Cut Ratings TRICOM SA: Hearing for Case Examiner Adjourned Sine Die TRICOM SA: Wants Bancredit Claim Pegged at $120,000 TRICOM SA: Gets Permission to Hire Chapter 11 Professionals TRM CORP: Net Loss Slides to $8 Million in Year ended December 31 UAL CORP: Fitch to Hold 'B-' ID Ratings Due to Fuel Costs, Etc. US AIRWAYS: Fitch Affirms 'CCC/RR6' Senior Unsecured Debt Rating UTILITY SERVICE: Case Summary & 16 Largest Unsecured Creditors VASOGEN INC: Lays Off 85% Workforce Under Restructuring Plan VICORP RESTAURANTS: Bankruptcy Filing Cues S&P to Vacate 'D' Rtng. VITALSIGNS HOMECARE: Case Summary & 20 Largest Unsecured Creditors WCH INC: Case Summary & Largest Unsecured Creditor WHITEHAWK CDO: Moody's Places Ca Ratings Under Review WHX CORP: To Raise $200 Mil. Through Subscription Rights Offering ZACKS FASHIONS: Rises From Receivership, Now Back in Operation ZENITH FUNDING: Moody's Cuts Ratings to Caa2 on Two Cert. Classes * Fitch Says Large US Banks Are Likely to See Increased Pressures * S&P Puts Ratings on 559 Classes of US RMBS Under Negative Watch * S&P Says About $94 Bil. of Investment-Grade Will Mature in 3Q'08 * Brian Gart Joins Berger Singerman of Florida * Joel H. Levitin Joins Cahill Gordon & Reindel LLP as Partner * Beard Audio Presents "Understanding CDS Contract Risks" Seminar * April 17 Webinar Virtual Discussion Focuses on Distress Retail * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* AEGIS MORTGAGE: Court Extends Exclusivity Deadline to June 8 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware granted the request of Aegis Mortgage Corp. and its debtor-affiliates to extend their deadline to file a Chapter 11 Plan to June 8, 2008, as well as the deadline to solicit acceptances of the plan to Aug. 7, 2008. Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, said that the brief extension will further the intent of Section 1121 of the Bankruptcy Code, which gives the Debtors opportunity to negotiate with their creditors and to propose and confirm a consensual plan. Mr. Cairns said the request is appropriate since the Debtors met the requirements for a valid extension. He argued that: (1) the Debtors' cases involved the liquidation of the assets of a company engaged in complex financial transactions; (2) the Debtors are generally paying their postpetition obligations as they become due; (3) the Debtors have acted in good faith to maximize the value of estates for the creditors' benefits and they continue to expeditiously move their cases forward; and (4) the extension is not sought to pressure creditors. The court ruling does not prejudice the Debtors' right to further move the deadline, and any party's right to object. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119). Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. (Aegis Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AEGIS MORTGAGE: Court OKs Severance Plan for Remaining Employees ---------------------------------------------------------------- Aegis Mortgage Corporation and its debtor-affiliates won approval from the U.S. Bankruptcy Court for the District of Delaware to implement a severance plan for their 24 remaining personnel, composed of five corporate officers and 19 rank-and-file employees. The Debtors intend to pay $273,937 to the Corporate Officers pursuant to the Severance Plan. Payment for each Officer depends upon the duration of his employment with the Debtors. The three Officers who will be employed until June 30, 2008, will get severance payment equal to two months worth of salary while the two other Officers who will work until December 31, 2008, will receive payment equal to four months worth of salary. Meanwhile, the Debtors intend to pay $201,780 to the rank-and- file employees, with each of them receiving $10,620. Seven of those employees who will work until December 31, 2008, will also get $5,000 bonus each. The Debtors say the Severance Plan is necessary to keep their personnel during the liquidation of their assets, and to motivate them to continue working hard, given the decrease in their compensation packages as a result of the bankruptcy filings. The Debtors also note that their workforce have been reduced from 1,302 to 24, and the remaining employees are now performing multiple services to liquidate the remaining assets. The Debtors aver that the Severance Plan would be less costly than increasing the salaries of the personnel. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119). Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. (Aegis Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AHERN RENTALS: Debt-Financed Expansion Cues Moody's Neg. Outlook ---------------------------------------------------------------- Moody's Investors Service has changed the rating outlook of Ahern Rentals, Inc. to negative from stable. All existing ratings, including Ahern's B2 corporate family rating, have been affirmed. The negative outlook reflects Moody's concerns over Ahern's plans to continue the debt-financed expansion of its rental fleet in anticipation that demand in the core Las Vegas market will remain strong. Moody's expects that the level of capital spending planned, although likely to be below the 2007 level, will still require a material amount of increased borrowing on the existing revolving credit facility. Ahern's returns and its ability to sustain the B2 rating could be pressured by any slowdown in the here-to-fore robust pace of growth in the Las Vegas construction market, the supply of rental equipment being directed to Las Vegas by Ahern's competitors, and the potential decline in equipment utilization and rental rates. Additionally, Moody's notes that availability under the company's revolving credit facility, could decline to below $40 million in coming periods. This level of availability is modest in relation to Ahern's size, the capital spending level planned and the increased potential for weaker operating performance. Nevertheless, should utilization rates be sustained at current levels despite the possibility of increasing competitive intensity within Las Vegas, the downward rating pressure could be mitigated and the outlook stabilized. The ratings affirmation is based on Ahern's moderate leverage, good margins and strong position in the Las Vegas market where several large commercial construction projects are underway. The affirmation also reflects an expectation of continued adequate liquidity. In March 2008 the company increased its revolving credit facility commitment to $350 million from $300 million. The revolving credit facility has minimum fixed charge coverage, maximum leverage and minimum utilization rate covenant tests that become operative if availability declines below set thresholds. In October 2007 the company amended the credit facility's fixed charges definition to exclude depreciation, depending on defined availability criteria; this change helped ensure the company's compliance for the third and fourth quarter 2007 test periods, which was required due to the revolving credit facility's excess availability dipping below the minimum level required to avoid the covenant ratio test during the first quarter of 2008. With the recent increase in the revolving credit facility commitment, Moody's does not anticipate that the covenant ratio test will take effect in coming periods, though if the test does take effect, Moody's anticipates that adequate covenant compliance headroom would exist. Ratings affirmed: -- Corporate family . . . B2 -- Probability of default . . . B2 -- $290 million 9.25% second priority global notes due August 2013 . . . B3 LGD5 -- Speculative grade liquidity . . . SGL-3 Ahern Rentals, Inc., headquartered in Las Vegas, Nevada, is a regional equipment supplier with 43 branches predominately in the Southwest region of the United States. As of December 2007 Ahern had in excess of 34,200 pieces of rental equipment having an original cost of approximately $733 million. The company specializes in high reach equipment. ALERIS INT'L: Moody's Holds B2 Rating and Revises Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service revised the rating outlooks for Aleris International Inc., and Aleris Deutschland to negative from stable. At the same time, Moody's affirmed Aleris's B2 corporate family rating, the B2 rating on the senior secured term loans at Aleris International and Aleris Deutschland Holding GMBH due 2013, the B3 rating on its 9% senior unsecured notes due 2014, and the Caa1 rating on its 10% senior subordinated notes due 2016. The change in outlook reflects the company's ongoing performance challenges in light of weak end market conditions, principally in the U.S. residential and transportation markets, the continued high degree of leverage under which the company is operating, and expectations for limited to negative free cash flow over the near term. The outlook also incorporates Aleris's earnings sensitivity to volume levels, which Moody's expects to decline again in 2008, although not by the magnitude seen in 2007. The downside risks associated with a continued deterioration in housing starts, residential investment, and transportation spending, as well as a more broad-based global contraction, are important factors in the rating. Given Aleris's limited history as a combined entity following the Corus acquisition in 2006, as well as its subsequent bolt-on acquisitions in 2007, a pro forma comparison of year-over-year shipment levels is challenging. However, Moody's estimates that North American building and construction volumes were down in the mid-teens during the fourth quarter of 2007, challenging Aleris's sales and operating margins. As a result of these difficult operating conditions, the company's interest expense exceeded its operating earnings in FY2007. Considering the "margin on metal" business model construct that Aleris operates under, Moody's views Aleris's ability to increase margins as limited resulting in the need to record substantive volume improvements for earnings improvement, which is viewed as unlikely over the near term. However, Moody's recognize the company's efforts to improve its fixed cost position in 2008, including announcing multiple facility closures in Tennessee, Ohio, Virginia, and Ontario. Aleris's B2 corporate family rating reflects its high degree of financial leverage, the sensitivity of its earnings to volume levels, the ongoing execution risks for timely deleveraging, particularly for a company with relatively thin margins and high sensitivity to volume levels, and Aleris's propensity towards acquisitions, which Moody's believes will be a continuing impetus for growth over the intermediate term. The rating also considers the potential for increased supply of extruded products from offshore sources, as well as competition from other products. At the same time, the ratings recognize Aleris's strong market position as a major global supplier of aluminum rolled products, its ability to pass through most of the cost pressures resulting from changes in raw material prices, and its diverse geographic and end market exposure, which helps protect the company from regional or product specific weakness, demonstrated this year as stronger European markets partially offset weakness in the North American residential and transportation markets. Also embedded in the rating is Moody's expectation that Aleris will apply its free cash flow generation to deleverage over the next several years. The B2 corporate family rating also considers the level of liquidity available to Aleris under its asset backed bank facility, which were it to dissipate significantly, could negatively impact the rating. Moody's last rating action on Aleris was Nov. 29, 2006, when its corporate family rating was downgraded to B2 from B1 following its merger with Texas Pacific Group in a leveraged transaction. Headquartered in Beachwood, Ohio, Aleris is a leading global producer of aluminum rolled products. In 2007, the company generated revenues of approximately $6.0 billion. ALOHA AIRLINES: May Employ Epiq as Notice and Claims Agent ---------------------------------------------------------- The United States Bankruptcy Court for the District of Hawaii gave Aloha Airlines Inc. and its debtor-affiliates permission to employ Epiq Bankruptcy Solutions LLC as their notice and claims agent, effective as of the bankruptcy filing. The assistance of a notice agent and claims agent is necessary for the economical and efficient administration of the Debtors' cases, and to avoid the duplication of effort in claims administration and in providing notices to their creditors, Aloha Airlines said. The Debtors will pay EPIQ a $25,000 retainer to be applied against EPIQ's final invoice for services provided to the Debtors. The Debtors will indemnify EPIQ against any and all losses, claims, damages, liabilities, costs, arising out of or relating to EPIQ's rendering of services pursuant to the agreement, other thanlosses resulting solely from EPIQ's gross negligence or willful misconduct. As compensation for their services, EPIQ's professionals bill: Senior Consultant not fixed Senior Case Manager $225-$275 per hour Case Manager (Level 2) $185-$220 per hour IT Programming Consultant $140-$190 per hour Case Manager (Level 1) $125-$175 per hour Clerk $40- $60 per hour The level of Senior Consultant activity will vary by engagement. If the services are required the usual average is $295 per hour. 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. No creditors' committee, trustee, or examiner has been appointed in these cases. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. AMERICAN AIRLINES: Fitch Holds Ratings & Revises Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the debt ratings of AMR Corp. and its principal operating subsidiary, American Airlines, Inc., as: AMR -- Issuer Default Rating at 'B-'; -- Senior unsecured debt at 'CCC/RR6'. American Airlines -- IDR at 'B-'; -- Secured bank credit facility at 'BB-/RR1'. The Rating Outlook for both AMR and American has been revised to Stable from Positive. Ratings for AMR and American reflect the high degree of leverage in the carrier's capital structure, its heavy fixed cash obligations and the ever-present operating risks it faces in an industry that remains uniquely vulnerable to fuel and demand shocks. Following two consecutive years of improving free cash flow generation and significant debt reduction ($2.3 billion of debt payments in 2007 alone), AMR and the entire U.S. airline industry now face a weakening operating environment that will likely lead to some credit quality deterioration over the next year. In a prolonged high fuel cost scenario that assumes no significant pull-back in crude oil and jet fuel prices through early 2009, AMR and all of the major U.S. carriers will face intensifying liquidity pressures - particularly if an extended economic slowdown drives a sharp reduction in air travel demand. Significantly, however, AMR's large cash balances and unencumbered asset holdings provide considerable room to maneuver in response to a prolonged industry downturn. AMR's estimated March 31 unrestricted cash balance of $4.4 billion provides a substantial liquidity cushion for the carrier to absorb an extended fuel and revenue shock while meeting 2008 fixed obligations (including approximately $900 million of scheduled debt maturities and an estimated $350 million of cash pension funding). In addition, non-core assets could be monetized to shore up cash before liquidity reaches distressed levels. Still, Fitch remains cautious about the risk of a follow-on fuel price spike and a slowdown in the airline's unit revenue growth rate for 2008 and 2009. A near-term revision of the Rating Outlook to Negative within the next few months is therefore a real possibility if operating trends worsen. For the first quarter, AMR has estimated that jet fuel prices averaged $2.73 per gallon. This compares with a full year 2007 average price of $2.13 per gallon. Fitch estimates that a 10-cent change in the price of jet fuel drives approximately $310 million of annual consolidated costs. Based on an average 2008 fuel price scenario of $3.00 per gallon, therefore, AMR would face approximately $2.7 billion of higher fuel costs this year compared with 2007. In the wake of Chapter 11 restructurings at Delta, Northwest, United and US Airways, AMR's labor costs are the highest in the U.S. airline industry, and it retains defined benefit pension plans for its unionized employees. With fuel costs soaring, pressure to control non-fuel operating costs will intensify this year. If additional cuts in domestic capacity are made, however, pressure on unit operating costs will increase. AMR's pilot contract is now open and amendable, and the pilots' union has called for substantial raises. The carrier therefore faces a more difficult task in working with labor to pursue cost-saving initiatives designed to offset fuel price pressure and a potential softening of unit revenue trends. Looking ahead, industry conditions are expected to remain challenging for at least the next year, as airlines struggle to offset record-high jet fuel prices with higher revenue and lower non-fuel costs. Although demand fundamentals have held up thus far despite the weakening U.S. economy, concern is growing that industry demand could weaken in the next few months. Potentially significant cutbacks in domestic capacity plans by virtually all of the U.S. carriers will help to support industry unit revenue in the face of a potential slackening in demand, but the airlines will continue to struggle with rapidly increasing unit costs. Any capacity rationalization linked to industry consolidation would have to wait until early 2009 at the earliest-following what is expected to be a lengthy Department of Justice review of the Delta-Northwest merger and any other follow-on transactions. Negative rating actions (either an Outlook revision to Negative or a downgrade of the IDR into the 'CCC' category) could follow if sustained high jet fuel prices (above $3.00 per gallon) through the summer, coupled with weakening revenue per available seat mile trends and softening air travel demand drive substantially negative free cash flow, forcing AMR to raise debt levels and shore up liquidity moving into 2009. AMR CORP: Posts $328 Million Net Loss in First Quarter of 2008 -------------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., reported net loss of $328 million for the first quarter of 2008. The current quarter results compare to a net profit of $81 million for the first quarter of 2007. Record jet fuel prices contributed significantly to the company's loss in the first quarter of 2008. The company paid $665 million more for fuel in the first quarter of 2008 than it would have paid at prevailing prices from the prior-year period. AMR paid $2.74 per gallon for jet fuel in the first quarter compared to $1.85 a gallon in the first quarter of 2007, a 48% increase. "The first quarter proved yet again that fuel prices remain one of the biggest threats to our industry and our company, and we also can't ignore the ongoing concerns about the U.S. economy and the potential impact on travel demand," AMR Chairman and CEO Gerard Arpey said. "Clearly, it has been a challenging start to 2008, and I want to take this time to again apologize to our customers who were inconvenienced by our recent cancellations and also thank all of our employees who worked tirelessly through difficult weather and maintenance challenges to take care of our customers. While our first quarter financial results were disappointing, through our hard work in recent years to contain costs and strengthen our balance sheet and liquidity we are better positioned to withstand today's uncertainty. However, we also recognize that we have a lot more hard work ahead of us and that our efforts must be ongoing," he said. Mr. Arpey noted that the company is taking numerous steps to address the challenging circumstances that it faces, including its recent hiring freeze for management and support staff and the announcements that AMR is making additional reductions to its 2008 capacity plan and is accelerating the replacement of its MD-80 fleet with more efficient Boeing 737-800s. Mr. Arpey also reiterated AMR's commitment to continue to work with the FAA to demonstrate the company's ongoing commitment to safety and compliance with the FAA's directives. AMR's planned divestiture of its regional carrier, American Eagle, also continues to move forward, Mr. Arpey said. Operational Performance AMR reported first quarter consolidated revenues of approximately $5.7 billion, an increase of 5.0% year over year. AMR estimates that weather and maintenance cancellations reduced first quarter consolidated revenue by approximately $75 million to $80 million. American's mainline passenger revenue per available seat mile (unit revenue) increased by 6.5% in the first quarter compared to the year-ago quarter. Mainline capacity, or total available seat miles, in the first quarter decreased by 1.5% compared to the same period in 2007. The year-over-year decrease in capacity was largely the result of higher-than-anticipated weather cancellations, pilot early retirements, and maintenance cancellations. American's mainline load factor - or the percentage of total seats filled - was a record 79.1% during the first quarter, compared to 78.1% in the first quarter of 2007. American's first- quarter yield, which represents average fares paid, increased 5.1% compared to the first quarter of 2007, its 12th consecutive quarter of year-over-year yield increases. American's mainline cost per available seat mile (unit cost) in the first quarter increased 15.8% year over year. The largest contributor to the year-over-year increase in unit costs in the first quarter of 2008 was fuel. Excluding fuel, mainline unit costs in the first quarter of 2008 increased by 3.3% year over year. As part of its efforts to improve the cost and fuel efficiency of its fleet, as well as lessen the company's impact on the environment, AMR provided an update on its plans to replace MD-80 aircraft with 737-800s. The company expects to take delivery of a total of 34 737-800 aircraft in 2009 and 36 737s in 2010. Of these, the company has firm commitments in place for 27 737s to be delivered in 2009 and three 737s to be delivered in 2010. This compares to the company's fleet renewal update in January, when it said that it had firm commitments to take delivery of 23 737s in 2009. Balance Sheet Update Mr. Arpey noted that the company's efforts to strengthen its balance sheet in recent years have better positioned AMR to face the current industry challenges. AMR ended the first quarter with $4.9 billion in cash and short- term investments, including a restricted balance of $426 million, compared to a balance of $5.9 billion in cash and short-term investments, including a restricted balance of $471 million, at the end of the first quarter of 2007. The year-over-year decrease in the company's cash and short-term investment balance is primarily related to AMR's total debt payments of approximately $2.3 billion in 2007, including prepayment of approximately $1 billion. AMR's Total Debt, which it defines as the aggregate of its long- term debt, capital lease obligations, the principal amount of airport facility tax-exempt bonds, and the present value of aircraft operating lease obligations, was $15.2 billion at the end of the first quarter of 2008, compared to $17.5 billion at the end of the first quarter of 2007. AMR's Net Debt, which it defines as Total Debt less unrestricted cash and short-term investments, was $10.7 billion at the end of the first quarter of 2008, compared to $12.2 billion at the end of the first quarter of 2007. As a result of scheduled principal payments as well as prepayments, refinancings and other efforts to strengthen its balance sheet, AMR's net interest expense in the first quarter of 2008 was $23 million lower than in the year-ago period, a 14% reduction. AMR contributed $25 million to its employees' defined benefit pension plans in the first quarter and made an additional contribution of $50 million on April 15. AMR has contributed more than $2 billion to its employee defined benefit pension plans since the beginning of 2002. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on Nov. 30, 2007, following the announcement by AMR Corp. that it intends to divest its American Eagle Holding Corp. subsidiary in 2008, Fitch said it expects no near-term impact on the debt ratings of AMR and its principal operating subsidiary, American Airlines Inc. Fitch affirmed both entities' Issuer Default Ratings at 'B-' on Nov. 13, 2007, while revising the Rating Outlook for AMR to Positive. AMERICAN HOME: Sale of Mortgage Loan Servicing Biz Now Closed ------------------------------------------------------------- Wilbur L. Ross' AH Mortgage Acquisition Co., Inc., has informed Judge Christopher Sontchi that closing of the sale of the mortgage loan servicing business of American Home Mortgage Investment Corp. and its debtor-affiliates has occurred, thus, it is withdrawing its prior request to compel the Debtors to effectuate the closing. AHM Acquisition, however, reserves all rights and claims for damages under the Asset Purchase Agreement relating to the Debtors' obligations to effectuate the Final Closing. The U.S. Bankruptcy Court for the District of Delaware approved the sale of American Home Mortgage Servicing Inc.'s mortgage loan servicing business to AHM Acquisition for about $500,000,000, pursuant to an Asset Purchase Agreement, under a two-stage closing process. The Initial Closing occurred on Nov. 16, 2007. Under the APA, the Debtors operated the Servicing Business for the economic benefit and risk of AHM Acquisition pending the final closing. To fund the servicing operations in the interim, the Debtors entered into a $50,000,000 Debtor-in-Possession Loan and Security Agreement, which was later amended to increase the financing commitment to $100,000,000. In its request to compel, AHM Acquisition asserted that the Debtors failed to effectuate the Final Closing, which has been scheduled for March 31, 2008, because of certain issues with Calyon New York Branch, a bank that owns some of the mortgages serviced by the unit. Calyon Denies Causing Closing Delay Calyon New York told the Court it objects to any allegations or suggestions that it has caused or in any responsible for any delay in the Final Closing. Calyon also reserved its rights to raise objections on the request. In its response to the request, the Debtors informed Judge Sontchi that they negotiated with Calyon concerning matter effecting the occurrence of the Final Closing. The negotiations resulted to a stipulation, which was filed with the Court both in the dockets of the bankruptcy cases, and in Calyon's adversary proceeding against the Debtors. 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 extended 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. 33; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Asks Court to Disallow & Expunge 392 Claims ---------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to disallow and expunge 392 claims in their entirety pursuant to Section 502(b) of the Bankruptcy Code, Rules 3003 and 3007 of the Federal Rules of Bankruptcy Procedure, and Rule 3007-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware. The Debtors identified 50 claims that are duplicative of the previously-filed proofs of claim. The Debtors say claimants appear to have filed the same claims with both Epiq Bankruptcy Solutions, LLC, and either the Debtors or the Bankruptcy Clerk. Among the largest Duplicate Claims are: Duplicate Surviving Surviving Claimant Claim No. Claim No. Claim Amount -------- --------- --------- ------------ Gerrity, Sean T. 823 6977 $996,510 Waterhouse, Drew 9454 1791 230,097 Michaud, David P. 8226 7184 54,402 Simon, Kimberly J. 4579 4578 32,808 Sweeney, Robert E. 287 7469 32,581 Thoet, Lance 4889 4959 31,245 The Debtors also identified 91 claims that have been amended and superseded by subsequently-filed proofs of claim. The Amended Claims, thus, no longer represent valid claims against the bankruptcy estates, and should be disallowed. Among the largest Amended Claims are: Amended Surviving Surviving Claimant Claim No. Claim No. Claim Amount -------- --------- --------- ------------ Somerman, Steven M. 703 6437 $760,086 Bartolotta, Joseph W. 1226 1909 350,000 Eininger, Mitchell 569 645 293,669 Angellotti, Anthony 8431 8433 91,169 Maco, John 1003 6626 90,546 Bartolotta, Joseph W. 1227 1906 75,000 Eininger, Mitchell 568 646 66,666 The Debtors inform the Court that 168 claims were filed by parties on account of equity interests. The Debtors object to the Equity Interest Claims because they were each filed by a shareholder based on ownership of the Debtors' stocks, and not on account of damages or a claim against the Debtors. Among the largest Equity Interest Claims are: Claimant Claim No. Claim Amount -------- --------- ------------ Aldridge, Eugene C. 9486 $2,241,252 El Ad US Holding, Inc. 8395 1,315,103 Frieder, Nathan & Lillian 6149 656,970 Ward, Scott K. 7376 557,101 De Pinho, Frank 9479 494,500 Cregeen, John R. 7964 475,708 Cregeen, John R. 8003 475,591 Papa, Herman D. 4147 466,178 Knicos, James & Tara 4703 410,073 Bellezza, Leonard 9416 357,132 Kukes, Jerry W. 5793 354,718 There are 77 claims that were filed against incorrect Debtors, or against no specified Debtor. To correct the claims register, the Debtors object to the Wrong Debtor Claims and request entry of an order reassigning the claims to the correct Debtors. Among the largest Wrong Debtor Claims are: Claim Wrong Correct Claim Claimant Number Debtor Debtor Amount -------- ------ ------ ------ ------ Boston Properties 8645 AHMHI AHMC 196,522 Pitney Bowes Credit 9503 AHMHI AHMC 175,910 Kruse Way, LLC 6148 AHMHI AHMC 171,621 Kruse Way, LLC 6146 AHMHI AHMC 160,794 Howard Hughes 2177 AHMHI AHMC 116,212 Pitney Bowes Credit 1623 AHMHI AHMC 107,450 Review of the Debtors' records shows that they have satisfied six claims after the Petition Date in accordance with the Bankruptcy Code, applicable rules or a Court order. Therefore, the Debtors ask the Court to disallow in full and expunge these Satisfied Claims: Claimant Claim No. Claim Amount -------- --------- ------------ Bruno, Jill 353 $4,563 Rigsby, Judith 2528 2,402 Alaimo, Diane E. 2661 1,875 Albrecht, Marsha 1442 1,250 Borrillo, Regina 8144 Unspecified Byllott, Debra 8145 Unspecified 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. 32; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMR CORP: Selling Asset-Management Subsidiary for $480 Million -------------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., reached a definitive agreement to sell American Beacon Advisors, Inc., its wholly owned asset-management subsidiary, to Lighthouse Holdings, Inc., which is owned by investment funds affiliated with Pharos Capital Group, LLC and TPG Capital, two private equity firms. AMR will receive total consideration of approximately $480 million. While primarily a cash transaction, AMR will retain a minority equity stake in the business. AMR expects to close the sale this summer subject to satisfactory completion of customary closing conditions as well as the approval of the Board of Trustees of the American Beacon family of mutual funds, shareholders of the American Beacon family of mutual funds, and consents from other American Beacon clients. AMR, which has been engaged in an ongoing strategic value review process related to certain businesses under the AMR umbrella, believes that the sale is in the best interests of AMR and its shareholders and will benefit American Beacon, its employees, customers and other stakeholders. The sale is intended to allow AMR and its shareholders to recognize the full value of American Beacon while allowing AMR to focus on its core airline business. American Beacon currently provides a number of services for AMR and its affiliates, including cash management for AMR and investment advisory services and investment management services for American's pension, 401(k) and other health and welfare plans. AMR anticipates that it will continue its relationships with American Beacon after the closing. However, to ensure that continuing relationships between American Beacon and American's pension, 401(k) and other health and welfare plans after closing satisfy the fiduciary duties and other rules that apply to these plans, an independent third party has been engaged to review and approve any such continuing relationships. In addition to currently providing these investment management services and asset oversight services to AMR, American Beacon currently serves as the investment manager of the American Beacon Funds, a family of mutual funds with both institutional and retail shareholders, and provides customized fixed income portfolio management services. Subject to the approval of the shareholders of the American Beacon family of mutual funds, it is anticipated that American Beacon will continue to be investment manager for the mutual funds. American Beacon Advisors has consistently grown since its creation in 1987, adding new products and growing average assets under management to $65 billion in 2007. For 2007, on a separate company basis, American Beacon's gross revenue was $101 million and income before income taxes was approximately $48 million, both of which increased approximately 40% over 2006. "The decision comes after a careful evaluation of the strategy that we believe will deliver the most value to our shareholders and create the ownership structure that makes the most sense for American Beacon," AMR Chairman and CEO Gerard Arpey said. "What started out more than 20 years ago as a smart way to manage AMR's benefit plans and cash has evolved and grown significantly into a successful financial management and advisory firm that is fully capable of standing on its own and is well positioned to pursue further growth opportunities outside of AMR." Mr. Arpey added that AMR is looking forward to engaging American Beacon for cash management services after the transaction closes and will remain actively engaged with American Beacon through a 10% ownership interest. "Pharos and TPG believe that the asset management business is a robust sector, in which American Beacon is a strong leader, with an outstanding, 20-year track record of performance in multiple asset classes across a variety of investment cycles," Kneeland Youngblood, co-founder and managing partner of Pharos Capital, said. "We look forward to working with the American Beacon team and TPG to fully leverage its strengths into industry-leading growth as well as continuing its superior customer service and performance. And, we welcome the opportunity to work with AMR not only as a significant client, but also as a long-term partner." "Having significantly grown our third-party revenue over the past several years, we believe the timing of the divestiture is just right for our company, our customers and our employees," American Beacon Advisors Chairman William F. Quinn said. "We're looking forward to focusing on growing our core business, while continuing to serve the needs of our customers and building on our successful history under a new ownership structure. Our management team and employees are excited about the many opportunities that this transaction will present to American Beacon, and our customers can rest assured that we intend to provide the same high level of service and expertise that they have come to expect from American Beacon in the past." Credit Suisse advised AMR on the transaction and Rothschild Inc. continues to advise AMR in its ongoing strategic value review. Merrill Lynch & Co. acted as exclusive financial advisor to Pharos Capital and TPG Capital. About AMR Corp. Headquartered in Forth Worth, Texas, AMR Corporation (NYSE: AMR) operates with its principal subsidiary, American Airlines Inc. -- http://www.aa.com/-- a worldwide scheduled passenger airline. At the end of 2006, American provided scheduled jet service to about 150 destinations throughout North America, the Caribbean, Latin America, Europe and Asia. American is also a scheduled airfreight carrier, providing freight and mail services to shippers throughout its system. Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two regional airlines, American Eagle Airlines Inc. and Executive Airlines Inc., and does business as "American Eagle." American Beacon Advisors Inc., a wholly owned subsidiary of AMR, is responsible for the investment and oversight of assets of AMR's U.S. employee benefit plans, as well as AMR's short-term investments. * * * As reported in the Troubled Company Reporter on Nov. 30, 2007, following the announcement by AMR Corp. that it intends to divest its American Eagle Holding Corp. subsidiary in 2008, Fitch said it expects no near-term impact on the debt ratings of AMR and its principal operating subsidiary, American Airlines Inc. Fitch affirmed both entities' Issuer Default Ratings at 'B-' on Nov. 13, 2007, while revising the Rating Outlook for AMR to Positive. AMERICAN HOME: Panel Seeks to Hire Hennigan as Conflicts Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of American Home Mortgage Investment Corp. and its debtor-affiliates seeks the authority of the U.S. Bankruptcy Court for the District of Delaware to retain Hennigan, Bennett & Dorman LLP, as special conflicts counsel, in accordance with the terms of a retainer letter. James J. McGinley, co-chairman of the Creditors Committee, says they decided to retain Hennigan Bennett to avoid any issues with respect to actual or potential conflicts of interest arising from the fact that Bank of America, N.A., administrative agent for certain prepetition secured lenders, and certain of its affiliates are clients of the Creditors Committee's bankruptcy counsel. As conflicts counsel, Hennigan Bennett provide, among other things, legal services in connection with: -- any matter, in which the Creditors Committee may be adverse to BofA, including any matter relating to the Debtors' use of BofA's cash collateral and the investigation of the extent, validity and priority of BofA's asserted security interests in the Debtors' assets; -- any matter, in which the Creditors Committee may be adverse to one of the prepetition secured lenders, JPMorgan Chase Bank; -- representing the Creditors Committee in other bankruptcy and commercial litigation matters; and -- providing other advice and representation as may be necessary or appropriate in the Chapter 11 cases. Hennigan Bennett will not provide the Committee substantive legal advice outside of the insolvency and business litigation areas, including advice in areas as patent, labor, criminal or real estate law. The firm will also not devote attention to, form professional opinions as to, or advise the Creditors Committee with respect to its disclosure obligations under federal securities or other non-bankruptcy laws. Hennigan Bennett will be paid on its ordinary and customary hourly rates: Attorneys $265 to $875 Financial consultants $425 to $690 Paralegals and clerks $85 to $265 Hennigan Bennett will also be reimbursed of all reasonable costs and expenses it incurred. Pursuant to the parties' Retention Agreement, the Creditors Committee agreed to pay the firm additional amounts as would constitute a reasonable fee, based upon factors as the complexity of the problems presented, the nature and extent of the opposition encountered, the results accomplished, and the skill exercised in accomplishing those results. Joshua D. Morse, an associate of Hennigan Bennett, assures the Court that the firm and its attorneys are disinterested persons, who do not hold or represent an interest adverse to the Creditors Committee, and who do not have any connection with the Debtors, their creditors, or any other party-in-interest. 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. 32; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Countrywide's Bid for Late Claims Filing Approved ---------------------------------------------------------------- American Home Mortgage Investment Corp., its debtor-affiliates, Countrywide Home Loans, Inc., Countrywide Bank, F.S.B., ReconTrust Bank, N.A., and Landsafe agree in a Court-approved stipulation to resolve Countrywide's request to allow late filing of its proofs of claim. The Parties agree that Countrywide's claims will be deemed timely-filed, and that the Debtors reserve their rights to object to the Claims on any basis other than timeliness. As reported by the Troubled Company Reporter on April 2, 2008, Countrywide, ReconTrust and Landsafe ask the U.S. Bankruptcy Court for the District of Delaware to allow the late filing of their proofs of claim one business day beyond the January 11, 2008 Bar Date in the bankruptcy case of American Home Mortgage Investment Corp. and its debtor-affiliates. Countrywide Capital in Lake Havasu city, Arizona, is listed at one of the Debtor's 39 largest unsecured creditors. It holds unspecified unliquidated loan repurchase. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The 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. 32; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMR CORP: Fitch Holds Ratings and Revises Outlook to Stable ----------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of AMR Corp. and its principal operating subsidiary, American Airlines, Inc., as: AMR -- Issuer Default Rating at 'B-'; -- Senior unsecured debt at 'CCC/RR6'. American Airlines -- IDR at 'B-'; -- Secured bank credit facility at 'BB-/RR1'. The Rating Outlook for both AMR and American has been revised to Stable from Positive. Ratings for AMR and American reflect the high degree of leverage in the carrier's capital structure, its heavy fixed cash obligations and the ever-present operating risks it faces in an industry that remains uniquely vulnerable to fuel and demand shocks. Following two consecutive years of improving free cash flow generation and significant debt reduction ($2.3 billion of debt payments in 2007 alone), AMR and the entire U.S. airline industry now face a weakening operating environment that will likely lead to some credit quality deterioration over the next year. In a prolonged high fuel cost scenario that assumes no significant pull-back in crude oil and jet fuel prices through early 2009, AMR and all of the major U.S. carriers will face intensifying liquidity pressures - particularly if an extended economic slowdown drives a sharp reduction in air travel demand. Significantly, however, AMR's large cash balances and unencumbered asset holdings provide considerable room to maneuver in response to a prolonged industry downturn. AMR's estimated March 31 unrestricted cash balance of $4.4 billion provides a substantial liquidity cushion for the carrier to absorb an extended fuel and revenue shock while meeting 2008 fixed obligations (including approximately $900 million of scheduled debt maturities and an estimated $350 million of cash pension funding). In addition, non-core assets could be monetized to shore up cash before liquidity reaches distressed levels. Still, Fitch remains cautious about the risk of a follow-on fuel price spike and a slowdown in the airline's unit revenue growth rate for 2008 and 2009. A near-term revision of the Rating Outlook to Negative within the next few months is therefore a real possibility if operating trends worsen. For the first quarter, AMR has estimated that jet fuel prices averaged $2.73 per gallon. This compares with a full year 2007 average price of $2.13 per gallon. Fitch estimates that a 10-cent change in the price of jet fuel drives approximately $310 million of annual consolidated costs. Based on an average 2008 fuel price scenario of $3.00 per gallon, therefore, AMR would face approximately $2.7 billion of higher fuel costs this year compared with 2007. In the wake of Chapter 11 restructurings at Delta, Northwest, United and US Airways, AMR's labor costs are the highest in the U.S. airline industry, and it retains defined benefit pension plans for its unionized employees. With fuel costs soaring, pressure to control non-fuel operating costs will intensify this year. If additional cuts in domestic capacity are made, however, pressure on unit operating costs will increase. AMR's pilot contract is now open and amendable, and the pilots' union has called for substantial raises. The carrier therefore faces a more difficult task in working with labor to pursue cost-saving initiatives designed to offset fuel price pressure and a potential softening of unit revenue trends. Looking ahead, industry conditions are expected to remain challenging for at least the next year, as airlines struggle to offset record-high jet fuel prices with higher revenue and lower non-fuel costs. Although demand fundamentals have held up thus far despite the weakening U.S. economy, concern is growing that industry demand could weaken in the next few months. Potentially significant cutbacks in domestic capacity plans by virtually all of the U.S. carriers will help to support industry unit revenue in the face of a potential slackening in demand, but the airlines will continue to struggle with rapidly increasing unit costs. Any capacity rationalization linked to industry consolidation would have to wait until early 2009 at the earliest-following what is expected to be a lengthy Department of Justice review of the Delta-Northwest merger and any other follow-on transactions. Negative rating actions (either an Outlook revision to Negative or a downgrade of the IDR into the 'CCC' category) could follow if sustained high jet fuel prices (above $3.00 per gallon) through the summer, coupled with weakening revenue per available seat mile trends and softening air travel demand drive substantially negative free cash flow, forcing AMR to raise debt levels and shore up liquidity moving into 2009. ASCALADE COMMS: Provides Status Update on Disclosure Default ------------------------------------------------------------ Ascalade Communications Inc. is providing an update pursuant to the Ontario Securities Commission Policy 57-603 Defaults by Reporting Issuers in complying with financial statement filing requirements. The Troubled Company Reporter reported on April 2, 2008 that as a result of Ascalade Communications's application under the Companies' Creditors Arrangement Act, it does not expect to file its audited annual financial statements for the year ended Dec. 31, 2007, and the management's discussion and analysis, as well as, its annual information form for the year ended Dec. 31, 2007. Ascalade does not anticipate completing the filings prior to the lifting or expiry of the CCAA protection order. Eventually, the British Columbia Supreme Court extended the creditor protection period granted to Ascalade Communications Inc. under the Companies' Creditors Arrangement Act from April 2, 2008, to June 4, 2008, as reported by the Troubled Company Reporter on April 7, 2008. In accordance with the OSC Policy 57-603, the company confirms that: (i) there is no material change to the information set out in its initial default announcement filed pursuant to the OSC Policy, (ii) there has been no failure by the company to adhere to the "Alternative Information Guidelines" set out in the OSC Policy with respect to the financial statement filing default, and (iii) there is no other material information concerning the affairs of the company that has not been generally disclosed. About Ascalade Communications Inc. Based in Richmond, British Columbia, Ascalade Communications Inc. (TSE:ACG) -- http://www.ascalade.com/ -- is an innovative product company that designs, develops and manufactures digital wireless and communication products. The company deliver products by offering its partners and customers complete vertical integration, from product design and development to final production. The company's products include digital cordless phones, Voice over Internet Protocol phones, digital wireless baby monitors and digital wireless conference phones. Ascalade products have been distributed in over 35 countries and under 80 regional brands. Ascalade also has facilities in Qingyuan, China, Hong Kong and a sales office in Hertfordshire, United Kingdom. AVALON RE: Fitch Cuts Rating to C from CCC- on Class C Notes ------------------------------------------------------------ Fitch Ratings has downgraded the long-term credit ratings of the class C variable-rate notes of Avalon Re Ltd. to 'C' from 'CCC-'. Fitch has also revised the distressed recovery rating of the class C notes to 'DR3' from 'DR4'. The rating actions affect $135 million of Avalon Re variable-rate notes. Avalon Re provides coverage to Oil Casualty Insurance, Ltd., a Bermuda-based insurer, on a three-year excess of loss reinsurance contract that attaches when losses exceed $300 million. Avalon Re received notification that the steam pipe explosion that occurred in New York City on July 18, 2007 would be a covered event under the terms of the reinsurance agreement between Avalon Re and OCIL. The covered loss report indicates that losses up to $50 million could potentially be ceded to Avalon Re. This amount represents approximately one third of the class C outstanding principal balance. Fitch does not currently anticipate further losses to the class C notes, or losses to either the class A or B notes. However, all three classes of notes could incur additional losses if additional insured events occur before the expiration of the reinsurance agreement on May 31, 2008. Fitch continues to monitor OCIL's insurance losses. If the class C notes are exhausted by subsequent losses, holders of the class B notes will then suffer a loss, followed by holders of the class A notes if the class B notes are exhausted. Avalon Re is a Cayman Islands-domiciled insurance company formed solely to issue the variable-rate notes, enter into a reinsurance contract with OCIL, and to conduct activities related to the notes' issuance. The variable-rate notes are insurance-linked collateralized securities that will suffer a loss of principal if OCIL's aggregate insured losses exceed a specified threshold that varies by note class. The affected notes are: Avalon Re, Ltd. -- $135 million class C variable rate notes due June 6, 2008 downgraded to 'C', distressed recovery rating revised to 'DR3' from 'DR4'. BANCREDIT CAYMAN: Tricom Wants Claim Pegged at $120,000 ------------------------------------------------------- Pursuant to Section 502(c) of the Bankruptcy Code, Tricom SA and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to: (i) estimate the claim of Bancredit Cayman Limited at no more than $120,000; and (ii) estimate the claim of Bancredito (Panama), S.A., at zero. Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York, says the proposed estimation of the claims is merely to avoid delay in the confirmation of the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization. "Although the deadline to file objections to the reorganization plan has yet to expire, the [Debtors] fully anticipate that [Bancredit Cayman's] representatives will continue their obstructionist tactics in a misguided attempt to derail the reorganization," Mr. Nashelsky points out. Bancredit Cayman, and Bancredito Panama have proposed the appointment of an examiner in Tricom's case before confirmation proceedings related to Tricom's plan commences. They also proposed the deposition of the Debtors, GFN Corp., Ltd., and its affiliates. Bancredit Cayman seeks to recover $120,000,000, while Bancredito Panama asserts a claim for $70,000,000. The Debtors say they cannot afford to wait for the outcome of a determination on the merit of those claims since it would delay and impede the reorganization. In connection with the proposed estimation of claims, the Debtors seek the Court's authority to: (i) hear legal argument concerning the legal obstacles that representatives of Bancredit Cayman and Bancredito Panama will face in pursuing their claims in terms of venue and ability to state legally cognizable claims; and (ii) submit declarations concerning foreign law without requiring foreign legal experts to travel to the United States of America for live testimony. The Ad Hoc Committee supports the Debtors' request. About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. (Tricom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) About Bancredit Bancredit (Cayman) Limited is a Cayman Islands banking institution within a Dominican Republic group of companies. Bancredit is in liquidation proceedings before the Grand Court of the Cayman Islands since 2004. Richard E L Fogerty and G James Cleaver of Kroll (Cayman) Limited were appointed by the Cayman Islands Court to act as Bancredit's Joint Official Liquidators on May 31, 2004. The Liquidators, on the estate's behalf, filed a petition under Chapter 15 of the Bankruptcy Code on May 10, 2006, before the U.S. Bankruptcy Court for the Southern District of New York in Manhattan (Case No.: 06-11026). Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP in New York, represents the Liquidators in the Chapter 15 case. The Liquidators estimated that the company had more than $100 million in total assets and $215 million in total debts at the time of the Chapter 15 filing. On November 16, 2007, a complaint was lodged against Tricom SA under docket reference Bancredit Cayman Limited v. Tricom, SA Adversary No. 7-2595 before a New Jersey court. Bancredit asserted at least $120,552,000 in claims against Tricom. The Liquidators, in a January 2008 report to Bancredit unsecured creditors, said Bancredit may be unlikely to receive repayment in full of the amounts it provided to Tricom given Tricom's apparent insolvency. However, the Liquidators said they would maintain the claims so that Bancredit would have the right to be involved in restructuring negotiations. BANCREDIT CAYMAN: Hearing for Tricom Case Examiner Adjourned ------------------------------------------------------------ Chief U.S. Bankruptcy Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District of New York, on April 2, 2008, adjourned indefinitely the hearing on the proposed appointment of an examiner filed by Bancredit Cayman Limited, according to a report by Bloomberg News. Bancredit Cayman has sought the appointment of an examiner to investigate the alleged misconduct of Tricom SA and its debtor- affiliates, the Ad Hoc Committee formed by certain holders of Unsecured Financial Claims against Tricom, and other parties who had anything to do with the negotiation and formulation of the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization. Bancredit Cayman seeks to recover $120,000,000 from Tricom, S.A., which was allegedly looted from the bank by its director, Manuel Arturo Pallerano, who is also the majority controlling owner of Tricom. The alleged transfer of funds caused Bancredit Cayman to be insolvent. Examiner Appointment On behalf of Bancredit Cayman, Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP, in New York, told the Court that a special committee was appointed by the Debtors' Board of Directors to investigate the transaction made by Manuel Arturo Pellerano sometime in December 2002, wherein he allegedly unlawfully transferred $70,000,000 in funds from Bancredit Cayman Limited to Tricom, S.A. Hunton & Williams LLP and BDO Seidman LLP were retained by the Special Committee to assist in the investigation. The Special Committee, Mr. Brock said, was not given authority to obtain all of the information, which was necessary to do a thorough investigation. The Special Committee did not have any subpoena powers, and it was thus not able to obtain all of the documents and information it sought, he said. According to Mr. Brock, the Special Committee was terminated in May 2007, before it was able to provide its Final Report to Tricom, and subsequently counsel to the Special Committee completed the Final Report which was provided to Tricom in July 2007. Nevertheless, the Special Committee made available to the Tricom Board and senior management an initial report in September 2005 which purported to summarize the Special Committee's findings through that time. Mr. Brock noted that Tricom characterizes the Special Committee's findings in a "bewildering manner" when Tricom stated that "[v]arying conclusions can be reached as to whether we properly accounted for the [December 2002 Transaction] based on different hypothetical fact scenarios" and that under certain of those scenarios the December 2002 Transaction did not qualify as equity, but "should be classified outside of permanent equity as 'mezzanine financing'." The Special Committee's findings were based only on hypothetical fact scenarios, and not specific factual findings, Tricom asserted. Bancredit Cayman intends for the examiner to investigate and report on: (i) the findings of the Special Committee and BDO Seidman, and the actions taken by the Debtors and the affiliates of Mr. Pellerano in response to the report; and (ii) the Debtors, the Ad Hoc Committee, and any self-dealing by Mr. Pellerano and his affiliates. Mr. Brock said that a Court-approved examiner is necessary to review the findings of the Special Committee, considering how the Debtors' reacted to the findings and how the Special Committee was prevented from obtaining pertinent information from parties believed to be under the control of Mr. Pellerano, his family members and affiliated companies, including GFN Corp., Ltd. Mr. Brock said that contrary to the Debtors' characterization of the December 2002 transaction as equity in its financial statements, the Special Committee's findings show that the transaction yielded debt for accounting purposes. He added that if the transaction cannot be deemed to be equity but debt, the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization Plan, therefore, had not been proposed in good faith. According to Mr. Brock, the Debtors have not also implemented most of the Special Committee's recommendations, including the creation of an independent audit committee and engagement with an internationally recognized auditing firm. Debtors, et al. Object Tricom S.A., and its affiliates want the Court to deny the proposed appointment of an examiner. Representing the Debtors, Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York, says that Bancredit Cayman did not provide facts sufficient to justify the cost and delay involved with the appointment and the corresponding investigation. He adds that the bank merely relied on a selective discussion of certain disclosures contained in the Debtors' Disclosure Statement and annual reports. Mr. Nashelsky further says that the information requested by Bancredit Cayman has long been available including the Special Committee's reports, however, the bank chose to abandon its effort to prove its claim against the Debtors. "Admittedly, the representatives abandoned their effort to discover the facts for about 14 months," Mr. Nashelsky notes. "They now ask the Court to remedy their own neglect because the Debtors now seek to complete one of the last steps of their restructuring, a goal publicly announced by the Debtors well over a year ago." Mr. Nashelsky says that all parties-in-interest are assured that the Reorganization Plan was properly negotiated and provides fair treatment. "No member of the Ad Hoc Committee is connected with the [6] affiliated creditors," Mr. Nashelsky clarifies, adding that the Ad Hoc Committee, the affiliated creditors, and the Debtors retained separate legal counsel and financial advisors. The affiliated creditors are Balking Trading, Inc., Eastern Power Corporation, Editorial AA, S.A., Ellis Portfolio, S.A., Minstar Ventures, Ltd., and Porter Capital, Ltd. Mr. Nashelsky also clarifies that the Reorganization Plan places majority control of the reorganized Debtors to the holders of unsecured financial claims not affiliated with Mr. Pellerano or the affiliated creditors. "Following confirmation of the [reorganization] plan, such creditors will own the vast majority of the stock to be issued by the parent company of the reorganized Debtors, and will control the [reorganized Debtors] Board of Directors," Mr. Nashelsky explains. He adds that the affiliated creditors will receive prescribed minority voting protections under the terms of the Reorganization Plan. Mr. Nashelsky further clarifies that Bancredit Cayman could still pursue its claims against the Debtors even after the confirmation, since nothing in the Reorganization Plan waives or discharges the bank of its rights. On the contrary, the Debtors cannot survive a protracted proceeding that may result from the appointment of an examiner in light of the cost and uncertainty attendant to it, he points out. In separate statements, the Ad Hoc Committee and the affiliated creditors also urge the Court to deny the proposed appointment. The parties contend that the appointment of an examiner merely seeks to prove Bancredit Cayman's claim that does not have any legal basis, and delay the confirmation of the Reorganization Plan. They point out that the Court is not required to appoint an examiner to advance the litigation interests of one party to a two party dispute, even under the mandatory provisions of Section 1104(c)(2) of the Bankruptcy Code. With respect to Bancredito (Panama), S.A.'s contention, the Ad Hoc Committee says that Bancredito Panama has yet to file any action against the Debtors. Bancredito Panama's own public filings show that its claim is not actually directed against the Debtors but various third parties, says the Ad Hoc Committee. Bancredit Cayman Retaliates Bancredit Cayman contends that the proposed appointment is not a two-party dispute but is in the interests of all creditors, including the general unsecured creditors who are not represented before the Court. "The reorganization plan's basic scheme relegates the Class 7 creditors to proceeding against the equity of the reorganized [Debtors], and the adequacy of that equity is not only unknown but appears plainly inadequate," says Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP, in New York. According to Mr. Brock, any diminution of estate property is detrimental to Class 7 creditors, who have no voice in the proceedings. "The reorganization plan accomplishes precisely such a diminution of property, and does so for the benefit of insiders by releasing and indemnifying them from potential claims and paying the affiliated creditors directly in secured debt," Mr. Brock points out. He says that this disposition of estate property has not been scrutinized and adequately disclosed, and that only an independent examiner can provide the transparency and assure that the distributions are proper. Mr. Brock says that a 60 to 90-day investigation will not harm the Debtors' reorganization. With respect to the allegation that Bancredit Cayman did nothing to pursue the discovery, Mr. Brock relates that the bank held off pursuing any court action to enforce its subpoenas after it was contacted by the Special Committee to ask about its claim. Believing that it would be the beginning of a genuine attempt to resolve its claim, Bancredit Cayman's representative Richard Fogerty met with the Special Committee in May 2007 to discuss about the claim, Mr. Brock relates. Mr. Brock says that the bank also sent letters to the Special Committee and to the Debtors' chief restructuring officer Kevin Lavin, however, it did not receive any response from both parties. In late November 2007, Bancredit filed its adversary proceeding against the Debtors, to which the Debtors did not answer and instead filed a request for its dismissal in February 2008. The possibility of any discovery in the adversary proceeding was stayed after the Debtors filed for Chapter 11. Appointment is Warranted Diana G. Adams, United States Trustee for Region 2, and Bancredito Panama urge the Court to approve the appointment of an examiner. The U.S. Trustee generally argues that the appointment is warranted given that the unsecured debts in the Debtors' cases far exceed $5,000,000. Meanwhile, Bancredito Panama asserts that the appointment serves the interest of all creditors by ensuring that the valuations and claims supporting the reorganization plan are not tainted by fraud. About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. (Tricom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) About Bancredit Bancredit (Cayman) Limited is a Cayman Islands banking institution within a Dominican Republic group of companies. Bancredit is in liquidation proceedings before the Grand Court of the Cayman Islands since 2004. Richard E L Fogerty and G James Cleaver of Kroll (Cayman) Limited were appointed by the Cayman Islands Court to act as Bancredit's Joint Official Liquidators on May 31, 2004. The Liquidators, on the estate's behalf, filed a petition under Chapter 15 of the Bankruptcy Code on May 10, 2006, before the U.S. Bankruptcy Court for the Southern District of New York in Manhattan (Case No.: 06-11026). Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP in New York, represents the Liquidators in the Chapter 15 case. The Liquidators estimated that the company had more than $100 million in total assets and $215 million in total debts at the time of the Chapter 15 filing. On November 16, 2007, a complaint was lodged against Tricom SA under docket reference Bancredit Cayman Limited v. Tricom, SA Adversary No. 7-2595 before a New Jersey court. Bancredit asserted at least $120,552,000 in claims against Tricom. The Liquidators, in a January 2008 report to Bancredit unsecured creditors, said Bancredit may be unlikely to receive repayment in full of the amounts it provided to Tricom given Tricom's apparent insolvency. However, the Liquidators said they would maintain the claims so that Bancredit would have the right to be involved in restructuring negotiations. BEAR STEARNS: Fitch Affirms 'B-' Rating on $2.9 Million Loans ------------------------------------------------------------- Fitch Ratings has upgraded Bear Stearns Commercial Mortgage Securities Inc., series 2003-TOP12, as: -- $31.9 million class C to 'AA+' from 'AA'; -- $13.1 million class D to 'AA' from 'AA-'; -- $14.5 million class E to 'A' from 'A-'; -- $7.3 million class F to 'A-' from 'BBB+'; -- $7.3 million class G to 'BBB+' from 'BBB'; -- $5.8 million class H to 'BBB' from 'BBB-'. In addition, Fitch has affirmed these classes: -- $59.3 million class A-2 at 'AAA'; -- $185.9 million class A-3 at 'AAA'; -- $487.3 million class A-4 at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; -- $30.5 million class B at 'AAA'; -- $5.8 million class J at 'BB+'; -- $2.9 million class K at 'BB'; -- $2.9 million class L at 'BB-'; -- $2.9 million class M at 'B'; -- $2.9 million class N at 'B-'. Fitch does not rate the $11.6 million class O. Class A-1 has been paid in full. The rating upgrades reflect additional pay down and defeasance since Fitch's last rating action. As of the March 2007 distribution date, the pool has paid down 24.9% to $871.8 million from $1.16 billion at issuance. Of the original 152 loans, 133 remain in the transaction and twelve (7.5%) have been defeased. There are no delinquent or specially serviced loans. Fitch reviewed the most recent servicer provided operating statement analysis reports for the nine remaining non-defeased shadow rated loans (25.3%): West Shore Plaza (7.1%), West Valley Mall (6.7%), Sun Valley Apartments (2.5%), Cedar Knolls Shopping Center (2.1%), 284 Mott Street (2.1%), Eagle Plaza (1.8%), Carriage Way (1.1%), Deerfield Estates (1.1%), and Wayne Towne Center (0.8%). Based on their stable performance since issuance the loans maintain their investment grade shadow ratings. West Valley Mall (6.7%) is collateralized by 621,697 square feet of a 717,573 sf regional mall in Tracy, California. Anchor tenants include Gottschalks, Target, Sears and JC Penney. Major tenants include a 14 screen Cinemark, Ross Dress 4 Less, Barnes & Noble and Old Navy. In-line tenants include Pier 1, Lemer New York and Big 5 Sporting Goods. The property benefits from the experienced sponsorship of General Growth Properties, a real estate investment trust and the second largest owner and operator of malls in the U.S. In-line sales for the twelve months ending December 2007 were $303 per square foot compared to $294 psf at issuance. Occupancy as of March 18, 2008 has increased to 98.4% from 95.9% at issuance. West Shore Plaza (7.1%) is collateralized by 831,439 sf of a 1.1 million sf regional mall located in Tampa, Florida. Anchor tenants include Burdines, JC Penney, Sears and Saks Fifth Avenue. The major tenant is a 14 screen American Multi-Cinemas. In-line tenants include Banana Republic, Express, Limited, Victoria's Secret, Ann Taylor and Foot Locker. The property benefits from the experienced sponsorship of Glimcher Realty Trust, a REIT which specializes in regional and super-regional malls. In-line sales for the twelve months ending January 2008 were $463 psf compared to $369 psf at issuance. As of Aug. 9, 2007 occupancy has remained stable at 96% compared to 95.9% at issuance. Sun Valley Apartments is a 306-unit multifamily property located in Florham Park, New Jersey. Occupancy as of Dec. 31, 2007 is 95.1%, unchanged since issuance. Fitch will continue to monitor the performance of the shadow rated loans as year end 2007 financial statements become available. Three loans (3.3%) mature in 2008 and one loan (3.9%) matures in 2009 with a weighted average coupon of 4.56% and a servicer reported weighted average debt service coverage ratio of 1.95x. The pool's weighted average coupon for the remaining loans is 5.21%. BEAR STEARNS: Moody's Chips Ratings on Nine Certificate Classes --------------------------------------------------------------- Moody's Investors Service has downgraded 9 certificates and has placed on review for further possible downgrade 6 of those classes of certificates from Bear Stearns Second Lien Trust 2007-SV1. The transaction is backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were too 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: Bear Stearns Second Lien Trust 2007-SV1 -- Cl. M-2, Downgraded to A1 from Aa2 -- Cl. M-3, Downgraded to A2 from Aa3 -- Cl. M-4, Downgraded to A3 from A1 -- Cl. M-5, Downgraded to Baa1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Baa2 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Baa3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ba3 from Baa2 -- Cl. B-3, Downgraded to B3 from Ba3 -- Cl. B-4, Downgraded to Caa2 from B1 BERRY PLASTICS: S&P Rates $530.6 Million Sr. Secured Notes at BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' and '1' recovery rating to Berry Plastics Corp.'s $530.6 million first- priority floating-rate senior secured notes due 2015. The 'BB-' and '1' recovery rating indicate the expectation of very high (90%-100%) recovery in the event of a payment default. Proceeds from the proposed notes will be used to refinance the company's existing $520 million first-lien bridge loan, which was issued to fund the acquisition of Captive Plastics Inc. in February 2008. S&P affirmed all the ratings on Berry, including the 'B' corporate credit rating. The outlook is negative. At Dec. 29, 2007, Evansville, Indiana-based Berry had total debt of about $3.4 billion. "The rating on Berry Plastics Group Inc. and its subsidiary Berry Plastics Corp. reflects the company's highly leveraged financial profile and acquisition driven growth strategy, which offsets its fair business profile with large market shares in niche segments, a well-diversified customer base, and strong customer relationships," said Standard & Poor's credit analyst Liley Mehta. BLOCKBUSTER INC: Fitch Won't Take Rating Actions on Circuit Deal ---------------------------------------------------------------- Fitch Ratings will not take any rating action following Blockbuster's (IDR rated 'CCC'; Stable Outlook) announcement that it is pursuing an acquisition of Circuit City Stores, Inc. in an all cash offer in the range of $6 to $8 per share, subject to due diligence. The bid represents a total enterprise value of approximately $1.1 billion to $1.4 billion. The all cash proposal is intended to be funded with the issuance of additional Blockbuster equity, probably in a rights offering to the company's existing shareholders. A portion of the financing will likely come from its credit facility. Blockbuster expects the closing of the transaction to be the beginning of 2009. Blockbuster is the leading player in the home video rental industry with $5.5 billion in revenues in 2007. The company's strong brand recognition and broad geographical coverage have resulted in Blockbuster capturing approximately 40% market share in the rental market. However, operating performance continued to soften in 2007 with EBITDA margin decreasing 250 basis points to 3.2% as a result of store closures and investments in the online business. Therefore, credit metrics have deteriorated with 2007 adjusted debt/EBITDAR and EBITDAR coverage of interest and rents at 7.1 times and 1.1x, respectively. Given the weak 2007 operating results, the company implemented a turnaround strategy which includes cost-containment efforts and modified pricing on its Total Access, Unlimited Total Access and mail-order-only plans. Fitch expects the initiatives will help improve operating EBITDA margin in 2008. Circuit City, a consumer electronics retailer, produced net sales of $11.7 billion and an operating loss of $353.6 million in 2007. The company's gross margin contracted 291 basis points to 20.7% due to decreases in product margins and extended warranty net sales. Circuit City had approximately $68 million of debt outstanding at the end of fiscal 2007. At Feb. 29, 2008, the company's domestic segment operated 682 Superstores and 11 other locations and its international segment operated through 779 retail stores and dealer outlets in Canada. Beyond the weak operating results of Blockbuster and Circuit City and concerns regarding Blockbuster's ability to successfully integrate the acquired operations, Fitch needs to understand the operational strategy of the combined entity. In addition, while an equity infusion could be beneficial, the combined entity would still be highly leveraged. Fitch will continue to evaluate any impact to the ratings upon disclosure of the final purchase price, financing for the transaction and potential synergies to be realized if a definitive agreement can be reached. BROADVIEW NETWORKS: S&P Holds B- Rating; Revises Outlook to Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Rye Brook, New York-based competitive local exchange carrier Broadview Networks Holdings Inc. to stable from positive. At the same time, S&P affirmed the 'B-' corporate credit rating and 'CCC+' secured note issue rating and the '5' recovery rating. "The outlook change reflects our view that, given Broadview's 2007 performance and its uncertain growth prospects in 2008, especially with a weakening economy, the likelihood that the company will be able to achieve net free cash flow positive results is more uncertain than we previously thought," said Standard & Poor's credit analyst Catherine Cosention. "Therefore, there is less of a prospect for an upgrade over the next one to two years," she said. The ratings on Broadview reflect the company's vulnerable business position and its highly leveraged financial profile. Broadview's business risk is very high as a CLEC facing competitive threats from the much larger, financially stronger incumbent telephone companies, especially Verizon Communications Inc. While Broadview has provided tailored communications services and customer care, its prime differentiator in light of such significant competition has been its lower service prices. As such, accelerated marketing by Verizon could further pressure Broadview's prices and margins in the next few years. In light of such substantial business risk, the company's financial resources are limited, given capital requirements to support customer growth. Broadview's 2007 acquisition of InfoHighway, which is about one- third its size in terms of revenue, expanded the company's capabilities and customer base in three key markets: New York City, Boston, and Washington D.C. It also provides Broadview direct fiber connection to about 500 buildings, enabling it to serve larger business customers. The company serves 20 markets in 10 contiguous states, including New York, Philadelphia, Boston, Baltimore, and Washington, D.C. Broadview targets small to midsize businesses with a bundled T1 offer. Although Broadview has a base of about 75,000 small and midsize business customers and 807,000 total lines, its ability to materially grow this base of business is highly uncertain. Moreover, while most of the legacy Broadview customers are on multiyear contracts with evergreen renewals, this only partially mitigates the risk of line churn, which remains an ongoing issue. BRODER BROS: Profit Margin Erosion Prompts Moody's to Junk Rating ----------------------------------------------------------------- Moody's Investors Service has downgraded Broder Bros., Co.'s Corporate Family Rating and Probability of Default Rating to Caa1 from B3 and lowered the rating on the company's senior unsecured notes to Caa2 from Caa1. The rating outlook remains negative. The rating actions follows the company's continued erosion in profit margins in the second half of 2007 that resulted in operating performance weaker than Moody's previous expectations. The downgrade also reflects continued negative trends in revenues during this period, indicating market share erosion. As a result of weaker performance, financial leverage has increased with debt/EBITDA near 8.6 times and fixed charge coverage of 0.8 times. The negative outlook reflects concerns that the company's liquidity profile may erode if it is unable to improve cash flow. Ratings could be lowered further if the company's revenues continue to contract, indicating market share losses, or if operating margins do not begin to show recovery toward historical levels over the course of 2008. These ratings were downgraded and LGD assessments adjusted: -- Corporate family rating to Caa1 from B3 -- Probability of default rating to Caa1 from B3 -- $225 million Senior Unsecured Notes due 10/2010 to Caa2 (LGD 5, 72%) from Caa1 (LGD 5, 73%) Broder Bros. Co., based in Trevose, Pennsylvania, is a leading distributor of imprintable sportswear and accessories in the U.S. For the 12 month period ending Dec. 29, 2007 Broder reported revenues of approximately $929 million. BRUSHFIELD CDO: Poor Credit Quality Cues Moody's Rating Downgrades ------------------------------------------------------------------ Moody's Investors Service has downgraded and left these notes issued by Brushfield CDO 2007-1 Ltd. on review for possible downgrade Class description: $62,500,000 Class A-1LB Floating Rate Notes Due July 2052 -- Prior Rating: Aaa -- Current Rating: Baa2, on review for possible downgrade Class description: $26,250,000 Class A-2L Floating Rate Notes Due July 2052 -- Prior Rating: Aa2 -- Current Rating: B1, on review for possible downgrade Class description: $12,500,000 Class A-3L Floating Rate Notes Due July 2052 -- Prior Rating: A2 -- Current Rating: Caa1, on review for possible downgrade In addition Moody's announced that it has downgraded these notes. Class description: $9,375,000 Class B-1L Floating Rate Notes Due July 2052 -- Prior Rating: Baa2 -- Current Rating: C Class description: $9,375,000 Class B-2L Floating Rate Notes Due July 2052 -- Prior Rating: Ba2 -- Current Rating: C According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. CALAMOS INVESTMENTS: Seeks Financing to Address Illiquidity ----------------------------------------------------------- Calamos Investments said it intends to announce refinancing arrangements as it reaches agreements with specific lenders. These announcements will come based on the successful completion of the lenders' due diligence work and Calamos taking the appropriate steps to ensure that all closed-end fund shareholders are well served by the terms of these agreements. "The scope of the illiquidity problem associated with these failed auctions is global and quite complex," said John P. Calamos, Sr., Chairman, CEO and Co-Chief Investment Officer. "We have moved forward in a measured way to ensure that all shareholders in our closed end funds are well served by the terms of these agreements. "After consulting with the funds' Board of Trustees, we immediately began seeking alternative forms of financing," Calamos said. "From the outset, our commitment, while we understand the critical nature of the situation the preferred shareholders are in, is to pursue refinancing that provides liquidity to preferred shareholders while preserving the benefits of leverage to common shareholders in our closed end funds." As soon as agreements on refinancings have been reached, Calamos will make announcements. At this point, Calamos is constrained from providing additional information as due diligence continues. "We want to assure our valued clients that we intend to keep you and the broader public informed of developments as soon as we are allowed to publicly disclose specifics," Calamos said. Based in Naperville, Illinois, Calamos Investments -- http://www.calamos.com-- is a diversified investment firm offering equity, fixed-income, convertible and alternative investment strategies, among others. The firm serves institutions and individuals via separately managed accounts and a family of open-end and closed-end funds, providing a risk-managed approach to capital appreciation and income-producing strategies. CFM U.S.: Wants Court to Approve Sale Bidding Procedures -------------------------------------------------------- CFM U.S. Corporation and CFM Majestic U.S. Holdings Inc. ask the Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware to approve bidding procedures for the sale of substantially all of their assets, subject to higher and better offers. To participate in the public auction, all qualified bids along with a "good faith deposit" equal to 10% of the proposed purchase price must be delivered by the May 7, 2008 bid deadline. An auction will follow on June 27, 2008. During the auction, succeeding bids will be made in $250,000 increments. Pursuant to court documents, the Debtors propose to grant the stalking horse bidder, if any, a break-up fee, a expense reimbursement and an auction overbid protection. The Debtors also ask the Court to set a sale hearing on June 30, 2008, and June 27, 2008, as objection deadline. PricewaterhouseCoopers Corporate Finance Inc. has been retained to assist in the asset sale. A full-text copy of the Sale Bidding Procedure is available for free at http://ResearchArchives.com/t/s?2aa8 About CFM Headquartered in Huntington, Indiana, CFM U.S. Corp. -- http://www.majesticproducts.com/-- manufactures two product categories: Hearth and Heating Products and Barbecue and Outdoor Products. The company and its affiliate, CFM Majestic U.S. Holdings, Inc., filed for Chapter 11 protection on April 9, 2008 (Bankr. D. Del. Lead Case No.08-10668). William Pierce Bowden, Esq., at Ashby & Geddes, represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in this cases to date. When the Debtors filed for protection against their creditors, they listed assets between $50 million to $100 million and debts between $100 million to $500 million. CFM U.S.: Can Access $8,000,000 Bank of Montreal DIP Facility ------------------------------------------------------------- The Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware authorized CFM U.S. Corporation and CFM Majestic U.S. Holdings Inc. to access, on an interim basis, up to $8,000,000 -- including a $500,000 letter of credit subfacility -- under a senior secured debtor-in-possession revolving credit facility with Bank of Montreal, as lender. The Debtors sought financing Bank of Montreal to permit the Debtors to pursue the sale of their businesses and property. A hearing will be held on May 1, 2008, at 1:30 p.m., (ET) at 824 Market Street, Courtroom no.5, 5th Floor in Wilmington, Delaware, to consider final approval of the Debtors' request. Objections, if any, are due April 24, 2008. The Debtors say the DIP loan will terminate on June 30, 2008. The loan agreement contains conditional and appropriate events of default. Amanda M. Winfree, Esq., at Ashby & Geddes, P.A., says the DIP loan is subject to a $260,000 carve-out for payments to professional advisors to the Debtors and any statutory committee appointed in these cases; and the U.S. Trustee and Clerk of Court fees. The Debtors will pay a host of fees including a non- refundable commitment fee of $150,000, notes Ms. Winfree. To secure all obligations, the lender is granted superpriority administrative claims on overall other costs and expenses of administration of any kind as adequate protection. All obligations of the Debtors are unconditionally guaranteed by each subsidiary of the Debtors -- including CFM U.S., CFM Holdings, CFM Canada, 2089451 Ontario Limited and Temcomex, S.A. de C.V. -- according to the DIP agreement. The Debtors say that they owed approximately $25,000,000 to the lender under a prepetition credit agreement dated Nov. 21, 2007, as amended. About CFM Headquartered in Huntington, Indiana, CFM U.S. Corp. -- http://www.majesticproducts.com/-- manufactures two product categories: Hearth and Heating Products and Barbecue and Outdoor Products. The company and its affiliate, CFM Majestic U.S. Holdings, Inc., filed for Chapter 11 protection on April 9, 2008 (Bankr. D. Del. Lead Case No.08-10668). William Pierce Bowden, Esq., at Ashby & Geddes, represents the Debtors. No Official Committee of Unsecured Creditors has been appointed in this cases to date. When the Debtors filed for protection against their creditors, they listed assets between $50 million to $100 million and debts between $100 million to $500 million. CFM CORPORATION: Cuts 390 Workforce & Wind Down Ontario Operations ------------------------------------------------------------------ CFM Corporation expects to terminate 390 employees and shut down its Ontario facility as result of its bankruptcy filing, Business Weekly relates. CFM filed for chapter 11 bankruptcy protection last week. Various reports say the company intends to wind up operations and sell the plant's assets. The dismissal or closure may occur between June 15 and July 31. Business Weekly, citing CFM manager of human resources Bill McCann, reported that all positions will be permanently vacated, without any hope of transfer or reinstatement. The company will consolidate its North American fireplace works in Huntington, Business Weekly says. The transfer will cost approximately $4.5 million. Headquartered in Mississauga, Ontario, CFM Corporation -- http://www.cfmcorp.com/-- fka CFM Majestic takes its business to hearth. The company makes hearth-related products for new homes and remodeling jobs. It offers gas and wood-burning fireplaces, freestanding stoves, gas log sets, and space heaters. Brands include Majestic Fireplaces and Vermont Castings. CFM also makes barbecues and related items and outdoor garden accessories. The company imports indoor and outdoor space heaters from South Korea. CFM sells its products to utility companies, builders, remodelers, and retailers. Facing a cash crunch, CFM was acquired by the Ontario Teachers' Pension Plan in 2005. CHANDLER INC: A.M. Best Holds 'bb-' Ratings on $24MM Debentures --------------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B+(Good) and issuer credit rating of "bbb-" of National American Insurance Company. Concurrently, A.M. Best has affirmed the ICR of "bb-" and debt rating of "bb-" on $24 million 8.75% senior unsecured debentures, due 2014 of NAICO's parent, Chandler (USA) Inc. The outlook for all ratings is stable. The ratings reflect NAICO's solid risk-adjusted capitalization and improved operating performance, primarily driven by the reduction of the extent of unfavorable loss reserve development reported in recent years. This improvement is due in part to management's corrective actions over the years, including significantly increasing rates, reducing exposures, improving risk selection and tightening policy terms and conditions. These rating factors are offset by the continued variability of earnings and the magnitude of adverse loss reserve development reported on certain prior accident years as well as NAICO's considerable dependence on reinsurance, despite increased retention levels in recent years. Although certain recent accident years have developed adversely, they have done so to a much lesser extent. The ratings also consider the financial leverage and interest coverage of the organization on an enterprise basis. While financial leverage remains acceptable given the current ratings, interest coverage fell below that expected for the given ratings in 2007 due to a decline in earnings as a result of the partial reversal of a prejudgment interest income accrual made in 2006. Although NAICO historically played a significant role in the servicing of holding company debt, other companies throughout the enterprise have met these obligations in more recent years. NAICO did, however, dividend $1.6 million to Chandler during 2007 to assist in the repurchase of preferred shares and cover other fixed charges. Similarly, it is possible that dividends from NAICO could be necessary to service the holding company's debt obligations in the future, which could have an adverse impact on surplus and overall capitalization. CITIGROUP COMMERCIAL: Expected Losses Cue Fitch to Cut Ratings -------------------------------------------------------------- Fitch Ratings has downgraded and assigned a Distressed Recovery rating to Citigroup Commercial Mortgage Securities Inc. commercial mortgage pass-through certificates, series 2006-C5 as: -- $2.7 million class M to 'B' from 'B+'; -- $8 million class N to 'B-' from 'B'; -- $2.7 million class O to 'B-/DR1' from 'B-'. In addition, Fitch placed this class on Ratings Watch Negative: -- $8 million class L at 'BB-'. Fitch also affirms these classes: -- $50.6 million class A-1 at 'AAA'; -- $236.8 million class A-2 at 'AAA'; -- $93.8 million class A-3 at 'AAA'; -- $92.8 million class A-SB at 'AAA'; -- $774.3 million class A-4 at 'AAA'; -- $228 million class A-1A at 'AAA'; -- $212.4 million class A-M at 'AAA'; -- $172.6 million class A-J at 'AAA'; -- Interest-only class XP at 'AAA'; -- Interest-only class XC at 'AAA'; -- $42.5 million class B at 'AA'; -- $21.2 million class C at 'AA-'; -- $26.5 million class D at 'A'; -- $29.2 million class E at 'A-'; -- $26.5 million class F at 'BBB+; -- $21.2 million class G at 'BBB'; -- $21.2 million class H at 'BBB-'; -- $8 million class J at 'BB+'; -- $8 million class K at 'BB'; -- $40 million class AMP-1 at 'BBB+'; -- $48 million class AMP-2 at 'BBB'; -- $27 million class AMP-3 at 'BBB-'. Fitch does not rate the $26.5 million class P. The downgrades and placement Rating Watch Negative are due to expected losses on five specially serviced loans (1.6%) in the transaction. The ratings of class L will be revisited once year- end 2007 financial information becomes available. If updated information on the non-specially serviced assets indicates stable performance from issuance, these classes may be affirmed. Conversely, if updated information indicates a decline in performance, or additional loans become delinquent or specially serviced, these classes may be downgraded. The affirmations are due to limited paydown since issuance. As of the April 2008 distribution date, the transaction has paid down 0.5% to $2.23 billion from $2.24 billion at issuance. Three (1.4%) of the five specially serviced loans are controlled by MBS Cos. The properties are located in Seabrook, Humble and DeSoto, Texas. The borrowing entities for all three properties declared bankruptcy immediately prior to the special servicer filing for foreclosure. Recent appraised values indicate losses on all three properties; compared to the values from issuance, the decline in the new values averages 22.2%. Fitch Loans of Concern total 4.9% and include the five specially serviced loans. Fitch has reviewed the shadow ratings of the Tower 67 and the Ala Moana Portfolio loans (9.3%). Both loans maintain investment grade shadow ratings due to their stable performance. Tower 67 (4.7%) is secured by a 449-unit multifamily property in New York City. The occupancy as of Dec. 31, 2007 was 95%, stable since issuance. Ala Moana (4.5%) is secured by a 1,989,759 square foot retail and office property in Honolulu, Hawaii. The whole loan consists of eight pari passu A notes totaling $1.2 billion and subordinate debt totaling $300 million. Only the A1 note is included in the pooled trust. A portion of the subordinate debt totaling $115 million is structured as the stand alone rake classes. Occupancy as of November 2007 increased to 97% from 96% at issuance. CWABS ASSET-BACKED: Moody's Chips Ratings on Worsening Performance ------------------------------------------------------------------ Moody's Investors Service has downgraded 11 certificates and maintained on review for possible further downgrade 2 of those classes of certificates from 2 transactions issued by CWABS Asset-Backed Certificates Trust. Both transactions are backed by subprime 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: CWABS Asset-Backed Certificates Trust 2006-SPS1 -- Cl. A, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa1 from Ba1 -- Cl. M-2, Downgraded to Caa3 from B2 -- Cl. M-3, Downgraded to C from Ca Issuer: CWABS Asset-Backed Certificates Trust 2006-SPS2 -- Cl. A, Downgraded to Ba3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to B3 from Baa2 -- Cl. M-2, Downgraded to Caa1 from Ba1 -- Cl. M-3, Downgraded to Caa2 from B1 -- Cl. M-4, Downgraded to Caa3 from B2 -- Cl. M-5, Downgraded to Ca from Caa2 -- Cl. M-6, Downgraded to C from Ca CWHEQ REVOLVING: Moody's Cuts Baa3 Rating to Ba2 on Cl. B Certs. ---------------------------------------------------------------- Moody's Investors Service has downgraded 10 certificates from CWHEQ Revolving Home Equity Loan Trust, 2007-G. The transaction is 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 and home equity line of credit 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: CWHEQ Revolving Home Equity Loan Trust, 2007-G -- Cl. A, Downgraded to Aa2 from Aaa; -- Cl. M-1, Downgraded to Aa3 from Aa1; -- Cl. M-2, Downgraded to A1 from Aa2; -- Cl. M-3, Downgraded to A2 from Aa3; -- Cl. M-4, Downgraded to A3 from A1; -- Cl. M-5, Downgraded to Baa1 from A2 -- Cl. M-6, Downgraded to Baa2 from A3 -- Cl. M-7, Downgraded to Baa3 from Baa1 -- Cl. M-8, Downgraded to Ba1 from Baa2 -- Cl. B, Downgraded to Ba2 from Baa3 COMMODORE CDO: Moody's Chips Ratings and Puts It Under Review ------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Commodore CDO II Ltd.: Class Description: $48,600,000 Class B Floating Rate Notes due December 2038 -- Prior Rating: Aa1, on review for possible downgrade -- Current Rating: Aa2, on review for possible downgrade Class Description: $12,750,000 Class C Floating Rate Notes due December 2038 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: Subordinated Interest -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. DELPHI CORP: Wants Exclusivity Extended Beyond Plan Effective Date ------------------------------------------------------------------ Delphi Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to extend their exclusive periods to: (a) file a plan of reorganization until 30 days after substantial consummation of the confirmed First Amended Joint Plan of Reorganization or any modified Plan; and (b) solicit acceptances of that Plan until 90 days after substantial consummation of the First Amended Plan or modified Plan. Out of an abundance of caution and to ensure clarity with their stakeholders, including their customers and supplies, the Debtors seek an extension of the Exclusive Periods to prevent any lapse in exclusivity, John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, clarifies. A further extension of the Exclusive Periods, Mr. Butler says, is justified by the significant progress the Debtors have made toward emerging from Chapter 11. After obtaining confirmation of the First Amended Plan, the Debtors secured exit financing and met all other conditions to the effectiveness of the Plan and Investment Agreement and were prepared to emerge from Chapter 11. The Debtors' efforts to emerge from Chapter 11, however, were affected by severe dislocations in the capital markets that began late in the second quarter of 2007 and that have continued through the present, according to Mr. Butler. Although the Debtors eventually obtained the exit financing required by the First Amended Plan, the turbulence in the capital markets was a principal cause of the delay in the Debtors' emergence from Chapter 11 before the end of 2007, he maintains. Moreover, the decision by Appaloosa Management L.P. and the other Plan Investors to not honor their commitments in the parties' New Equity Purchase and Commitment Agreement prevented the Debtors from emerging on April 4, 2008. Nevertheless, the Debtors have accomplished numerous other tasks related to many different aspects of the cases to emerge from Chapter 11 protection, including: -- obtaining Court approval to perform under modified pension funding waivers issued by the Internal Revenue Service; -- reducing the aggregate amount of Trade and Other Unsecured Claims below the $1,450,000,000 amount set by the Plan; -- obtaining the Court's permission to sell their bearings business; -- completing the sale of their interiors and closures business to Inteva Products, LLC; and -- commencing the offering of rights to purchase shares of Reorganized Delphi Corp. common stock, which closed March 31, 2008. The unresolved contingencies relating to emergence notwithstanding the Plan Investors' failure to perform, and the size and complexity of the Debtors' cases, also justify a further extension of the Exclusive Periods, Mr. Butler relates. Under Section 1129(c) the Bankruptcy Code, the Court may confirm only one plan of reorganization. The Court confirmed the First Amended Plan on Jan. 25, 2008. Since the Plan Confirmation Order cannot be revoked unless "procured by fraud," in accordance with Section 1144, no other plan of reorganization may now be filed or solicited in the Debtors' bankruptcy cases, Mr. Butler asserts. As a result, the Exclusivity Periods will inevitably extend until the Debtors consummate the First Amended Plan or any modified plan, he notes. The Debtors are paying their bills as they come due, including the statutory fees paid quarterly to the U.S. Trustee, Mr. Butler assures Judge Drain. The Debtors have also extended the maturity date of their $4,500,000,000 debtor-in-possession financing facility to July 1, 2008, and anticipate negotiating financing through Dec. 31, 2008, to provide additional comfort to creditors and other stakeholders that they will continue to meet their obligations as they come due. Although the Debtors are seeking a further extension of the Exclusivity Periods, they nonetheless anticipate emerging from Chapter 11 "as soon as reasonably practicable." The Court will convene a hearing to consider the Debtors' request on April 30. Objections are due April 23. Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on April 11, 2008, Moody's Investors Service withdrawn Delphi Corp.'s prospective debt ratings for its emergence financing. Although Delphi was successful in arranging commitments for its first lien term loans of $1.7 billion, a first lien revolving credit of $1.6 billion and General Motors Corporation and a GM affiliate agreed to accept up to $2.825 billion of second lien term debt, equity participants in the financing structure have filed a notice of termination on their earlier undertaking to provide $2.55 billion of capital. The absence of equity funding terminates Delphi's plans to emerge from bankruptcy by April 4, 2008. Ratings being withdrawn are those listed in Moody's earlier releases which were: Corporate Family Rating, (P)B2; Probability of Default, (P)B2; Outlook, Stable; $1.5 billion first lien term loan, (P)Ba2 (LGD-2, 17%); $2.8 billion second lien term loan, (P)B2 (LGD-4, 52%); and Speculative Grade Liquidity rating, SGL-2. As reported in the Troubled Company Reporter on March 28, 2008, Moody's Investors Service raised the rating on Delphi Corp.'s revised second lien term loan to (P)B2 from (P)B3 and affirmed the company's Corporate Family Rating and Probability of Default Ratings of (P)B2, Speculative Grade Liquidity rating of SGL-2, first lien term loan rating of (P)Ba2, and stable outlook. The revision to the rating on the second lien facility follows a change in the composition of the term loans from the structure Moody's rated on March 14, 2008. As reported in the Troubled Company Reporter on March 17, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: a) The $1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-', with a '1' recovery rating, indicating the expectation of very high recovery in the event of payment default. b) The $2 billion "second out" first-lien term loan B-2 is expected to be rated 'B', with a '4' recovery rating, indicating the expectation of average recovery in the event of payment default. c) The $825 million second-lien term loan is expected to be rated 'B-', with a '5' recovery rating, indicating the expectation of modest recovery in the event of payment default. DELPHI CORP: Mulls Suing Plan Investors for Reneging on New EPCA ---------------------------------------------------------------- Delphi Corp. and its debtor-affiliates believes that Plan Investors A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Inc., UBS Securities LLC, Goldman, Sachs & Co., and Pardus DPH Holding LLC wrongfully terminated the New Equity Purchase and Commitment Agreement and disputes the allegations that it breached the New EPCA or failed to satisfy any condition to the Plan Investors' obligations. At the time ADAH delivered its April 4 Termination Notice, the representatives of Delphi's exit financing lenders, General Motors Corp., the Official Committee of Unsecured Creditors, the Official Committee of Equity Security Holders, and all other parties needed for the Debtors' successful closing and emergence from Chapter 11, other than the Plan Investors, were present and were prepared to move forward. Moreover, all actions necessary to consummate the Plan, including obtaining $6,100,000,000 of exit financing, were taken other than the concurrent closing and funding of the New EPCA. Delphi Corp. Vice President and Chief Restructuring Officer John D. Sheehan relates in a regulatory filing with the Securities and Exchange Commission that Delphi's Board of Directors has: (a) formed a special litigation committee; and (b) engaged independent legal counsel to consider and pursue any and all available equitable and legal remedies, including the commencement of legal action in the U.S. Bankruptcy Court for the Southern District of New York to seek all appropriate relief, including the Plan Investors' specific performance of their obligations under the New EPCA. Pursuant to the New EPCA, the Plan Investors committed to purchase $800,000,000 of convertible preferred stock and approximately $175,000,000 of common stock in the reorganized company. In addition, the Plan Investors committed to purchase any unsubscribed shares of common stock in connection with an approximately $1,600,000,000 rights offering that was made available to unsecured creditors subject to satisfaction of other terms and conditions. As of April 4, 2008, the Plan Investors collectively own 125,739,448 shares of Delphi common stock, representing 22.31% of the 563,477,461 shares of Delphi Common Stock outstanding as of Jan. 31, 2008. Delphi shares traded at $0.11 per share at the close of business on April 11. ADAH Delivers Supplemental Termination Letter As reported in the Troubled Company Reporter on April 7, 2008, Delphi Corp.'s Plan Investors terminated the parties' New Equity Purchase and Commitment Agreement on April 4, 2008, interrupting Delphi's efforts to close its Plan of Reorganization. The closing had been scheduled to occur on April 4 pursuant to the New EPCA between Delphi and Plan Investors A-D Acquisition Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd., Merrill Lynch, Pierce, Fenner & Smith Inc., UBS Securities LLC, Goldman, Sachs & Co., and Pardus DPH Holding LLC. Several hours prior to the April 4 scheduled closing, ADAH, affiliate of lead Plan Investor Appaloosa Management L.P., delivered to Delphi a letter, stating that that letter "constitutes a notice of immediate termination" of the New EPCA. The April 4 Termination Notice alleges that: (1) Delphi has breached certain provisions of the New EPCA; (2) ADAH is entitled to terminate the New EPCA; and (3) the Plan Investors are entitled to a $82,500,000 fee plus certain expenses and other amounts. ADAH subsequently delivered to Delphi a supplement to the April 4 Termination Notice on April 5, 2008, stating that that supplemental letter constitutes a "notice of an additional ground for termination" of the New EPCA. The April 5 letter cited Section 12(d)(iii) of the Investment Agreement based on the Plan not having become effective on or before April 4, 2008. The New EPCA provided that if the closing date under the agreement has not occurred by April 4, 2008, ADAH may terminate the agreement from and after April 5, 2008. ADAH added that it would continue to actively engage in discussions to resolve outstanding issues with Delphi in a mutually acceptable manner, including considering mutually acceptable alternative transactions wherein it would participate in a capacity different than that envisioned by the New EPCA. A full-text copy of the April 4 Termination Notice is available for free at http://ResearchArchives.com/t/s?2ab1 A full-text copy of the April 5 Termination Notice is available for free at http://ResearchArchives.com/t/s?2ab2 Headquartered in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represents the Official Committee of Unsecured Creditors. As of March 31, 2007, the Debtors' balance sheet showed $11,446,000,000 in total assets and $23,851,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. (Delphi Bankruptcy News, Issue No. 123; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on April 11, 2008, Moody's Investors Service withdrawn Delphi Corp.'s prospective debt ratings for its emergence financing. Although Delphi was successful in arranging commitments for its first lien term loans of $1.7 billion, a first lien revolving credit of $1.6 billion and General Motors Corporation and a GM affiliate agreed to accept up to $2.825 billion of second lien term debt, equity participants in the financing structure have filed a notice of termination on their earlier undertaking to provide $2.55 billion of capital. The absence of equity funding terminates Delphi's plans to emerge from bankruptcy by April 4, 2008. Ratings being withdrawn are those listed in Moody's earlier releases which were: Corporate Family Rating, (P)B2; Probability of Default, (P)B2; Outlook, Stable; $1.5 billion first lien term loan, (P)Ba2 (LGD-2, 17%); $2.8 billion second lien term loan, (P)B2 (LGD-4, 52%); and Speculative Grade Liquidity rating, SGL-2. As reported in the Troubled Company Reporter on March 28, 2008, Moody's Investors Service raised the rating on Delphi Corp.'s revised second lien term loan to (P)B2 from (P)B3 and affirmed the company's Corporate Family Rating and Probability of Default Ratings of (P)B2, Speculative Grade Liquidity rating of SGL-2, first lien term loan rating of (P)Ba2, and stable outlook. The revision to the rating on the second lien facility follows a change in the composition of the term loans from the structure Moody's rated on March 14, 2008. As reported in the Troubled Company Reporter on March 17, 2008, Standard & Poor's Ratings Services still expects to assign a 'B' corporate credit rating to Delphi Corp. if the company emerges from bankruptcy in early April. S&P has revised its expected issue-level ratings because changes to the structure of the proposed financings have affected relative recovery prospects among the various term loans. S&P's expected ratings are: a) The $1.7 billion "first out" first-lien term loan B-1 is expected to be rated 'BB-', with a '1' recovery rating, indicating the expectation of very high recovery in the event of payment default. b) The $2 billion "second out" first-lien term loan B-2 is expected to be rated 'B', with a '4' recovery rating, indicating the expectation of average recovery in the event of payment default. c) The $825 million second-lien term loan is expected to be rated 'B-', with a '5' recovery rating, indicating the expectation of modest recovery in the event of payment default. DELTA AIR: Northwest Merger Cues S&P to Put Ratings on Pos. Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B' long-term corporate credit rating, on Delta Air Lines Inc. on CreditWatch with positive implications, following announcement of a merger agreement with Northwest Airlines Corp. (B+/Watch Neg/--). The CreditWatch listing affects enhanced equipment trust certificates with various ratings, excepting those that are insured by a bond insurer. S&P's listing of Delta ratings on CreditWatch with positive implications and those of Northwest Airlines Corp. on CreditWatch with negative implications implies that we foresee a corporate credit rating of either 'B' or 'B+' for the combined entity. The proposed merger is subject to approval by Delta and Northwest shareholders, and will be subject to antitrust review by the U.S. Department of Justice and approval by various other regulators. Atlanta-based Delta has about $16 billion of debt and leases outstanding. "The proposed merger of Delta and Northwest would create a more comprehensive route network, with opportunities for revenue and cost synergies, but entails risks in integrating employee groups and information systems, and will result in higher labor costs as labor contracts are reopened to secure employee support and capture the benefits of operating as a single airline," said Standard & Poor's credit analyst Philip Baggaley. The managements of both airlines suggest that cost and revenue synergies of the combination should total at least $1 billion annually by 2012. The proposed merger would be structured as an exchange of shares, removing the need for additional debt to finance a cash offer. However, the companies anticipate one-time integration costs of $1 billion. Despite statements earlier by the chief executive of Air France Group that his company would consider an equity investment in a merged Delta/Northwest, no such investment is currently contemplated. Standard & Poor's will evaluate the potential benefits and risks of the transaction in resolving S&P's CreditWatch review. S&P will also consider overall airline industry prospects, as S&P were already in the process of reviewing the rating outlooks on both airlines, as well as on other U.S. airlines. Ratings on enhanced equipment trust certificates could change based on an upgrade of our corporate credit rating on Delta and, in addition, on S&P's review of how the merger could affect incentives to affirm aircraft obligations in any future bankruptcy of the combined airline. Thus, a merged Delta/Northwest may have a greater or reduced incentive to keep certain aircraft within the context of the combined fleet. There is relatively limited overlap in aircraft models between the two airlines, with Delta operating an all- Boeing fleet, while Northwest uses a combination of Airbus and Boeing planes. Each airline currently uses certain aircraft that could perform capably missions handled by a different model in the other airline's fleet if the combined airline needed to shrink its fleet. Even if the merged airline preferred to keep all of these models in bankruptcy, its ability to use alternative planes would strengthen its bargaining position versus creditors. S&P will resolve its CreditWatch review when all or substantially all preconditions to concluding a merger are completed, and will indicate a likely outcome earlier than that, if S&P have sufficient information and certainty to do so. DELTA AIR: Northwest Merger Cues Moody's to Put Rtng. Under Review ------------------------------------------------------------------ Moody's Investors Service placed the debt ratings of Delta Air Lines, Inc. ("Delta", corporate family at B2) and Northwest Airlines Corporation ("Northwest", corporate family rating at B1) on review for possible downgrade. The review was prompted by the announcement that the two airlines have agreed to combine in an all-stock transaction with a combined enterprise value of approximately $18 billion. Moody's review period may be lengthy, given the time for the necessary regulatory and shareholder approvals to effect the corporate merger. Moreover, there could be a considerable additional time period to effect actual integration of the airlines, which is the basis for achieving the expected operating synergies. The all-stock nature of the transaction is viewed favorably as it precludes the need for incremental debt that would need to be serviced by the combined airline operation. Nevertheless, the extended timeframe over which cost and revenue synergies might be achieved, and the significant hurdles that will need to be overcome to realize these synergies are critical concerns that will be assessed in the review. Separately, both carriers are facing material near-term operating pressures from high fuel and maintenance costs and weakening passenger traffic that impair their ability to realize adequate yields on ticket prices. Even with the benefits of the bankruptcy restructurings recently completed by both airlines, the current industry conditions will likely make it difficult for either carrier to earn an adequate profit. Successful implementation of the merger and realization of all expected synergies could help the combined carriers deal with these challenging conditions. Yet the synergies will only be realized over an extended period of time, and with the expectation of near term net losses, combined with the still substantial debt load (Delta at $17.6 billion; Northwest at $15.3 billion, using Moody's standard adjustments), Moody's could take interim downward rating actions on either carrier's debt prior to completing the review. Moody's will examine the timing and the magnitude of the various cost and revenue synergies anticipated, and the degree to which these incremental gains will affect credit metrics and enable the new company to realize adequate returns. Particularly important will be the ability to effectively integrate the workforces of Delta and Northwest, and combine the seniority list in a way satisfactory to the work force, especially the pilots. The review will also consider the degree to which each airline can preserve its liquidity during the challenging near term operating conditions, prior to effecting the merger. The merger does not contemplate additional debt, which is helpful. In addition, the four way anti-trust immunity (Delta, Northwest, KLM, AirFrance) is also helpful as the airlines operate with broader code-share arrangements. There is limited overlap in the domestic network, and Northwest's strength in Pacific routes (particularly the Fifth Freedom rights in Japan) complement Delta's service in Europe and elsewhere. However, Moody's is skeptical that simply joining the route networks will create the revenue synergies needed to generate an adequate return. Cost savings, anticipated to reach a run-rate of about $1 billion by 2012, could be challenging in light of unresolved labor negotiations, and the negative pressures from fuel and maintenance costs. Both airlines have aging fleets that are less efficient to operate in the current high fuel cost environment. The airlines have a limited number of new aircraft on order and will need to consider the considerable capital costs associated with refleeting. The secured debt ratings of Delta and Northwest, including Enhanced Equipment Trust Certificates, but excluding ratings supported by monoline insurance policies, will be reviewed in relation to the review of the underlying implied rating as well as to the asset values of aircraft equipment that provide collateral support for the transactions. The potential ratings actions for these transactions may be of greater or less magnitude than a change in the underlying airline rating, if any. On Review for Possible Downgrade: Issuer: Delta Air Lines, Inc. -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B2 -- Speculative Grade Liquidity Rating, Placed on Review for Possible Downgrade, currently SGL-2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B2 -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba2 (19% - LGD2) -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba2 (19% - LGD2) -- Second Lien Term Loan, Placed on Review for Possible Downgrade, currently B2 (46% - LGD3) -- Series 2007-1 Pass Through Certificates, Placed on Review for Possible Downgrade: -- Class A, currently Baa1 -- Class B, currently Ba2 -- Class C, currently B1 Issuer: Northwest Airlines Corporation -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B1 -- Speculative Grade Liquidity Rating, Placed on Review for Possible Downgrade, currently SGL-2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B1 Issuer: Northwest Airlines, Inc. -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba3 (41% - LGD3) -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba3 (41% - LGD3) -- Series 2007-1 Pass Through Certificates, Placed on Review for Possible Downgrade: -- Class A, currently A3 -- Class B, currently Ba1 Outlook Actions: Issuer: Delta Air Lines, Inc. -- Outlook, Changed To Rating Under Review From Stable Issuer: Northwest Airlines Corporation -- Outlook, Changed To Rating Under Review From Stable Issuer: Northwest Airlines, Inc. -- Outlook, Changed To Rating Under Review From Stable Delta Air Lines, Inc. is headquartered in Atlanta, Georgia. Northwest Airlines Corp. is headquartered in Eagan, Minnesota. DELTA AIR: Northwest Merger Prompts Fitch to Affirm 'B' ID Rating ----------------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of Delta Air Lines, Inc. following the announcement that Delta has agreed to merge with Northwest Airlines Corp., subject to approval by the two airlines' shareholders and the U.S. Department of Justice. Delta's ratings were affirmed as: -- Issuer Default Rating at 'B'; -- First-lien senior secured credit facilities at 'BB/RR1'; -- Second-lien secured credit facility (Term Loan B) at 'B/RR4'. The issue ratings apply to $2.5 billion of committed credit facilities. The Rating Outlook for Delta has been revised to Negative from Stable. The affirmation reflects Fitch's view that the proposed transaction is likely to drive a combined post-merger credit profile that is similar to that of a stand-alone Delta. However, a successful completion of the merger is by no means a certainty in light of potential opposition from organized labor and Congress. This uncertainty, together with potential concerns raised by the DOJ in a lengthy antitrust review, increases execution risk and diverts management attention at a time of increasing stress in the U.S. airline operating environment. The Negative Outlook reflects Fitch's opinion that extreme fuel cost pressure and slower unit revenue growth rates in a U.S. recession will materially weaken Delta's credit profile over the next year- whether or not the Delta-Northwest merger is ultimately closed. The merged carrier will face substantial fixed financing obligations over the next several years in an industry operating environment that will remain difficult as the U.S. economy heads into recession. However, should the merger receive regulatory approval, the Delta-Northwest combination would likely drive some material revenue synergies related primarily to fleet optimization and greater revenue per available seat mile premiums linked to the creation of a broadly diversified and deep global route network. Notably, the realization of full revenue synergies would not be complete until 2012 as fleet and schedule optimization benefits are pursued largely in the absence of broad-based available seat mile capacity reduction. Importantly, Delta management noted on this morning's investor call that no hub closures are contemplated in connection with the merger, raising the question of how much domestic capacity could actually be removed post-closing. Delta and Northwest have each announced plans to pull back 2008 domestic capacity (10% reduction at Delta and 5% at Northwest) in response to accelerating jet fuel cost pressure since the start of the year. If no significant domestic capacity rationalization is envisioned beyond 2008, it may be very difficult for the combined Delta-Northwest to drive the type of RASM improvements necessary to offset intensifying fuel cost pressure. No material pull-backs in energy prices are assumed by Delta management in its merger plan. This fact, together with Delta's revenue synergy target ($700 million run rate) would appear to limit any opportunities to drive substantially positive free cash flow beyond 2008. With large numbers of firm aircraft deliveries keeping capital spending high, and with significant scheduled debt maturities at both carriers, an extended industry downturn could drive combined Delta-Northwest operating losses and negative free cash flow in 2009. This in turn could force the merged carrier to seek new sources of capital next year if current combined liquidity levels (approximately $7 billion) are to be maintained. Given the currently constrained nature of debt capital markets, there is little certainty about the availability of external capital post-closing. On the cost side, increasing pay rates linked to the tentative agreement with Delta pilots will pressure non-fuel unit operating costs. Delta management, however, does see an opportunity to realize $300 million to $400 million in cost synergies net of new labor contract changes. Savings linked to the elimination of redundant operations appear to be broadly attainable. Still these savings could be offset in large part by higher unit labor rates and productivity penalties if integrated contracts are not finalized at the time of the merger. Delta has identified as much as $1 billion of cash merger transition costs, which will likely be front-loaded in the 2008-2009 time period. If a quick agreement with Northwest pilots is to be reached, moreover, labor cost pressures could increase beyond planned levels. The current 'B' IDR for a stand-alone Delta reflects the high levels of debt that remain on Delta's balance sheet even after the Chapter 11 restructuring, reduced but still heavy cash obligations over the next several years and the company's exposure to demand and fuel price shocks in an industry that remains highly vulnerable to changes in the macroeconomic environment. With domestic unit revenue growth expected to slow throughout 2008 and jet fuel prices at record levels, intense margin pressure will persist. The airline's March plan to cut domestic capacity and 2,000 jobs this year is unlikely to offset the heavy cost pressure linked to $110-plus per barrel crude oil in 2008. With some weakeninng of air travel demand and RASM trends likely to appear by summer, therefore, Fitch expects full year 2008 cash flow and liquidity results to fall well short of bankruptcy exit plan assumptions for the stand-alone Delta. Delta's post-reorganization capital structure was streamlined as a result of pre-petition debt and lease rejection in Chapter 11. Recovery expectations for the first-lien revolver and term loan are superior to those of the second lien term loan. Recovery expectations for first-lien lenders are excellent, reflecting a deep collateral pool consisting of aircraft, engines, spare parts and other assets, as well as a tight covenant package protecting lenders via fixed charge coverage, minimum liquidity and collateral coverage tests. Taking into account the credit facilities, aircraft-backed EETC obligations and private mortgage agreements, Delta has virtually no unencumbered assets remaining to support additional borrowing if liquidity conditions tighten further. Secured financing for firm aircraft deliveries (including Boeing 777-200s, Boeing 737 NGs and CRJ-900 regional jets) will need to be secured if Delta's international growth strategy and fleet overhaul are to be completed. Similarly, on the Northwest side, future mainline and regional jet deliveries must be financed, since aircraft capital spending won't be funded from operating cash flow in either a stand-alone or post-merger case. A downgrade to 'B-' for the IDR could follow later in the year if operating trends in the industry continue to worsen in response to rising jet fuel costs and a fragile demand environment. With respect to the merger transition process, Fitch will remain focused primarily on the risks related to labor opposition at Northwest, where ALPA-represented pilots have made it clear that a quick intergration of pilot contracts is not likely. Labor opposition at Northwest, if prolonged, could complicate the task of realizing full merger synergies if the deal gains necessary regulatory approvals. DORADO BECKVILLE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Dorado Beckville Partners I, L.P. 5950 Berkshire Lane, Suite 1650 Dallas, TX 75225 Bankruptcy Case No.: 08-31796 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- Dorado Operating, Inc. 08-31800 Type of Business: The Debtors are diversified oil and gas exploration and production companies active in the East Texas Basin, the inland waters of South Louisiana, and Western Alabama. See http://www.doradoexploration.com/ Chapter 11 Petition Date: April 15, 2008 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtors' Counsel: Marcus Alan Helt, Esq. (mhelt@gardere.com) Richard McCoy Roberson, Esq. (rroberson@gardere.com) Gardere Wynne Sewell, LLP 1601 Elm Street, Suite 3000 Dallas, TX 75201 Tel: (214) 999-4526 Fax: (214) 999-3526 http://www.gardere.com/ Dorado Beckville Partners I, LP's Financial Condition: Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million A. Dorado Beckville Partners I, L.P. did not file a list of its largest unsecured creditors. B. Dorado Operating, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Weatherford trade debt $1,780,921 P.O. Box 200098 Houston, TX 77216 Attn: William G. Lowere, (Bill.Lowerre@weatherfod.com) Corporate Counsel Weatherford 515 Post Oak Blvd. Houston, TX 77027 Tel: (713) 693-4105 Fax: (713) 693-4480 http://www.weatherfod.com/ Martin Lake Construction, Inc. trade debt $1,034,278 P.O. Drawer H. Carthage, TX 75633 Attn: Charles "Brick" Dickerson, Dickerson Law Offices 325 West Sabine Street, Ste. 4 Carthage, TX 75633 Tel: (903) 693-8212 Fax: (903) 693-7961 Rauh's Frac Service, Ltd. trade debt $438,724 P.O. Box 1753 Kilgore, TX 75663 Attn: Elizabeth Aten (elamberson@crouchfirm.com) Lamberson, Crouch & Ramey 1445 Ross Ave., Ste. 3600 Dallas, TX 75202 Tel: (214) 922-7100 Fax: (214) 922-7101 http://www.crouchfirm.com Nabor's Well Service trade debt $349,517 (jesparza@gjtbs.com) 515 W. Greens Rd., Ste. 1000 Houston, TX 77067 Attn: Jacob Esparza Galloway, Johnson, Tompkins, Burr & Smith 1301 Mckinney, Ste. 1400 Houston, TX 77010 Tel: (713) 599-0700 Fax: (719) 599-0777 http://www.gjtbs.com/ Pinnergy trade debt $328,889 111 Congress Ave., Ste. 202 Austin, TX 78701 Attn: Mark A. Mayfield Clark, Thomas & Winters, P.C. P.O. Box 1148 Austin, TX 78767 Tel: (512) 472-8800 Fax: (512) 474-1129 Schlumberger Technology trade debt $278,432 Corp. P.O. Box 201193 Houston, TX 77216 Attn: Neil J. Orleans Goins, Underkoffer, Crawford & Langdon, L.L.P. 1201 Elm Street, Suite 4800 Dallas, TX 758270 Tel: (214) 969-5454 Fax: (214) 969-5902 (neilo@gucl.com) http://www.gucl.com Texas CES, Inc. dba Bell trade debt $262,807 Supply P.O. Box 201644 Dallas, TX 75320 Attn: James A. Collura, Jr. Coats Rose 3 East Greenway Plaza, Ste. 2000 Houston, TX 77046 Tel: (713) 651-0111 Fax: (713) 651-0220 Baker Hughes trade debt $227,059 LATX Operations trade debt $203,135 Dan Blocker Petroleum trade debt $189,348 JW Williams trade debt $163,205 Offshore Energy Services, Inc. trade debt $159,534 MI SWACO trade debt $144,800 J-W Wireline Co. trade debt $135,738 United Fuel & Energy trade debt $131,724 OST Fluid Services trade debt $128,109 Core Lab trade debt $120,444 Smith International trade debt $105,718 Sabine Mud Logging, Inc. trade debt $105,302 C.C. Forbes trade debt $102,635 DIABLO GRANDE: Wants to Hire Sheppard Mullin Bankruptcy Counsel --------------------------------------------------------------- Diablo Grande LP seeks permission from the U.S. Bankruptcy Court for the Eastern District of California to employ Sheppard Mullin Richter & Hampton LLP as bankruptcy counsel. The Debtor relates that Sheppard Mullin is well qualified to represent them because its partners, special counsel and associates have wide range experience in insolvency and bankruptcy law, well as in litigation and corporate law. Sheppard Mullin will: a) advise and assist the Debtor with respect to compliance with the requirements of the U.S. Trustee; b) advise the Debtor regarding matters of bankruptcy law, including the rights and remedies of the Debtor with regard to its assets and creditors' claims; c) represent the Debtor in any proceedings or hearings before this Court and in any action in any other court where the Debtor's rights under the Bankruptcy Code may be litigated or affected; d) conduct examinations of witnesses, claimants or adverse parties and to prepare and assist in the preparation of reports, accounts, and pleadings related to the Debtor's Chapter 11 case; e) advise the Debtor concerning the requirements of the Bankruptcy code and applicable rules as the same may affect the Debtor in this case; f) assist the Debtor in the formulation, negotiation, confirmation, and implementation of a Chapter 11 plan of reorganization and any auction or sale of its assets; g) make any Court appearances on behalf of the Debtor; and h) take other action and perform other services as the Debtor may require in connection with this chapter 11 case. The firm's professional expected to provide primary representation to the Debtors and their hourly rates are: Name Designation Hourly Rate ---- ----------- ----------- Michael H. Ahrens Partner $725 Margaret M. Mann Partner $550 Ori Katz Associate $455 Margaret M. Mann, Esq., relates that the Debtor agreed to reimburse the out-of-pocket expenses incurred pertaining to this case. Prior to bankruptcy filing, the Debtor paid Sheppard Mullin a $116,917.24 retainer fee for services rendered and to be rendered in connection with the Chapter 11 case. Ms. Mann assures the Court that Sheppard Mullin is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. Ms. Mann can be reached at: Sheppard Mullin Richter & Hampton LLP 19th Floor, 501 West Broadway San Diego, CA 92101 Tel (619) 338-6613 Fax (619) 515-4105 Patterson, California-based Diablo Grande LP owns 33,000-acre real property and runs a resort hotel with golf courses and convention center. Diablo Grande LP's general partner is Diablo Grande Inc. with Donald Panoz as president. It filed for chapter 11 protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08- 90365). Judge Robert S. Bardwil is presiding the case. Michael H. Ahrens, Esq., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed asset and debts between $50 million and $100 million. The Debtor did not file a list of its largest unsecured creditors. EDGEWATER FOODS: Posts $1,014,793 Net Loss in Qtr. Ended Feb. 29 ---------------------------------------------------------------- Edgewater Foods International Inc. reported a net loss of $1,014,793 and $1,871,488 for the three and six months ended Feb. 29, 2008, compared with net income of $8,339,668 and $5,234,545 for the same periods ended Feb. 28, 2007. Revenues for the three months ended Feb. 29, 2008, were $365,763, compared with revenues of $182,212 for the three months ended Feb. 28, 2007. Revenues for the six months ended Feb. 29, 2008, were $794,965 as compared to revenues of $305,399 for the six months ended Feb. 28, 2007. The increase in the company's overall sales was a direct result of management's new sales and marketing efforts coupled with its emphasis on infrastructure improvements and crop expansion. Results for the three months ended Feb. 28, 2007, included a gain of approximately $8,595,107 which was related to the change in the fair value of warrants issued to 10 institutional and accredited investors in conjunction with preferred stock financings on April 12, May 30, June 30, July 11, 2006, and Jan. 16, 2007, and the market price of the common stock underlying the warrants. As a result of reclassifying these warrant liabilities on Feb. 21, 2007, no gain or loss was recorded for the period ended Feb. 29, 2008. Liquidity and Cash Resources At Feb. 29, 2008, the company had a cash balance of $1,024,262. The company originally expected to reach positive operating cash flow during the second half of its 2007 fiscal year, but slower than expected harvest rates and handling and harvesting problems resulted in lower than expected revenues. Net cash provided by financing activities was $766,065 during the six months ended Feb. 29, 2008. During the six months ended Feb. 29, 2008, the company completed one private equity financing that resulted in net proceeds of $800,648. Balance Sheet At Feb. 29, 2008, the company's consolidated balance sheet showed $7,207,833 in total assets, $2,049,980 in total liabilities, and $5,157,853 in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the quarter ended Feb. 29, 2008, are available for free at http://researcharchives.com/t/s?2aac Going Concern Doubt LBB & Associates Ltd. LLP, in Houston, expressed substantial doubt about Edgewater Foods International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Aug. 31, 2007. The auditing firm pointed to the company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2008. About Edgewater Foods Based in Qualicum Beach, B.C., Edgewater Foods International Inc. (OTC BB: EDWT.OB) -- http://www.edgewaterfoods.com/-- is the parent company of Island Scallops Ltd., a Vancouver Island aquaculture company. Established in 1989, ISL operates a scallop farming and marine hatchery business. EQUISTAR CHEMICAL: Amends Partnership Supplement with Millennium ---------------------------------------------------------------- Equistar Chemicals, LP and Millennium Petrochemicals Inc. entered into a Supplement, dated Dec. 20, 2007, to amend and restate a Limited Partnership Agreement as of Dec. 19, 2007. Among other things, the Partnership Agreement was amended to increase the amount $50 million to $750 million. Millennium Petrochemicals Inc. further replaces its Millennium Indemnity in the amount of $300 million dated Dec. 19, 2007 with a further indemnity in the amount of $600 million. A full-text copy of the Supplement is available for free at: http://ResearchArchives.com/t/s?2aa1 Headquartered in Houston, Texas, Equistar Chemical LP -- http://www.lyondell.com/-- a wholly owned subsidiary of Lyondell Chemical Company, produces ethylene, propylene and polyethylene in North America and ethylene oxide, ethylene glycol, high value- added specialty polymers and polymeric powder. * * * Equistar Chemical LP's 7.55% senior unsecured notes carry Moody's Investor Service's B3 rating, Standard & Poor's Ratings Service's B+ rating and Fitch Ratings' BB+ rating. EVRAZ GROUP: Fitch Assigns 'BB' Rating on Senior Unsecured Notes ---------------------------------------------------------------- Fitch Ratings has assigned Evraz Group S.A.'s prospective USD notes issue an expected senior unsecured 'BB' rating. The expected rating is in line with Evraz's 'BB' Long-term Issuer Default rating. At the same time, Fitch has affirmed Evraz's Long-term IDR and senior unsecured ratings of 'BB' and Short-term IDR of 'B'. The ratings of Mastercroft Limited are also affirmed at Long-term IDR 'BB' and Short-term IDR 'B', as is the senior unsecured 'BB' rating of Evraz Securities S.A. The Outlooks for Evraz's and Mastercroft Limited's Long-term IDRs are Stable. Proceeds from the notes will be used for general corporate purposes, including the funding of capex and potential acquisitions. Fitch would also expect the proceeds to be used in part to refinance debt from the recent acquisition of IPSCO's Canadian operations. The issue will be a direct, unconditional and unsecured obligation of Evraz, which, in addition to being the ultimate holding company for the Evraz Group, has direct ownership of several international steel operations purchased in recent years. No subsidiary guarantees are, however, provided. Fitch notes that historically Evraz's consolidated debt structure has included a high proportion of secured debt and structurally superior debt in subsidiary entities. Consistent with its methodology, which considers a debt level of 2x of pre-tax, pre-interest cash flow to be sufficiently material to consider the notching of senior unsecured debt, Fitch has not notched the expected rating of the current notes issue from the level of Evraz's Long-term IDR . Draft documentation includes a change of control provision set at 50% of total voting stock, with a put option to redeem the notes at 101% of face value plus accrued interest, as well as a make- whole provision. There are limitations on the granting of liens, while additional indebtedness is subject to an EBITDA leverage test of 3x or less, calculable on a pro-forma basis in respect of acquisitions. The final rating for the issue will be assigned once the tenor and amount of the notes are known, and subject to receipt of final documentation materially conforming to the draft documentation reviewed by Fitch. FIELDSTONE MORTGAGE: Moody's Cuts Ratings on Six Certificates ------------------------------------------------------------- Moody's Investors Service has downgraded six certificates and maintained on review for possible further downgrade one of those classes of certificates from a transaction issued by Fieldstone Mortgage Investment Trust. The transaction is 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: Fieldstone Mortgage Investment Trust 2006-S1 -- Cl. A, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M1, Downgraded to Caa3 from Ba2 -- Cl. M2, Downgraded to Ca from B1 -- Cl. M3, Downgraded to C from B3 -- Cl. M4, Downgraded to C from Caa2 -- Cl. M5, Downgraded to C from Ca FINANCIAL MEDIA: Posts $1,066,379 Net Loss in Qtr. Ended Feb. 29 ---------------------------------------------------------------- Financial Media Group Inc. reported net losses of $1,066,379 and $1,697,699 for the three months and six months ended Feb. 29, 2008, compared to net losses of $1,791,618 and $2,663,423 for the same periods in 2007. Revenues for the three months and six months periods ended Feb. 29, 2008, were $2,168,747 and $4,047,640 compared to $1,527,554 and $3,168,780 for the same periods in 2007. Revenues increased by $641,193 and $878,860 during the three months and six months ended Feb. 29, 2008, when compared to the same periods in 2007 due to the company's expanded effort in marketing its Internet advertising and media services and gaining new clients. Liquidity and Capital Resources Cash and cash equivalents at Feb. 29, 2008, were $72,934 compared to $172,845 at Feb. 28, 2007. Net cash used in operating activities for the six months ended Feb. 29, 2008, was $2,021,935, compared with net cash used in operating activities of $1,699,372 during the six months ended Feb. 28, 2007. Net cash provided by investing activities for the six months ended Feb. 29, 2008, was $767,584, compared with net cash provided by investing activities of $385,162 during the same period last year. The company received $817,213 in cash proceeds from sale of marketable securities. The company expended cash of $49,629 for purchase of property and equipment. Net cash provided by financing activities for the six months ended Feb. 29, 2008, was $1,155,271 due to cash received from sale of common stock amounting to $1,147,814, payment of note payable to an officer of $7,500, and cash received of $14,957 for the common stock to be issued as of Feb. 29, 2008. This compares with net cash provided by financing activities of $1,430,225 during the six months ended Feb. 28, 2007. As a result, the company experienced a net decrease in cash of $99,079 for the six months ended Feb. 29, 2008. Balance Sheet The company reported consolidated assets of $5,499,267, total liabilities of $4,674,769 and total stockholders' equity of $824,499, at Feb. 29, 2008. Full-text copies of the company's consolidated financial statements for the quarter ended Feb. 29, 2008, are available for free at http://researcharchives.com/t/s?2aab Going Concern Doubt As reported in the Troubled Company Reporter on Dec. 13, 2007, Kabani & Company Inc. expressed substantial doubt about Financial Media Group Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Aug. 31, 2007. The company had an accumulated deficit of $11,369,776 as of Feb. 29, 2008, and has incurred net loss of $1,697,699 for the six months ended Feb. 29, 2008. About Financial Media Headquartered in Irvine, Calif., Financial Media Group Inc. (OTC BB: FNGP.OB) -- http://www.financialmediagroupinc.com/-- provides Internet based media and advertising services through its financial website and the company's newspaper "WallSt.net Digest." The company provides full array of customized investor awareness programs such as audio and video of senior management interviews; press releases; newsletter and editorials; small cap conferences and seminars; email mailings and forums. FINLAY ENTERPRISES: Posts $10MM Loss in Year Ended December 31 -------------------------------------------------------------- Finlay Enterprises Inc. reported its financial results for the fourth quarter and fiscal year ended Feb. 2, 2008. The fiscal 2007 reporting periods contain 13 and 52 weeks. The corresponding periods of fiscal 2006 contain 14 and 53 weeks. For the thirteen weeks ended Feb. 2, 2008, the company reported income from continuing operations of $13.4 million compared to $12.2 million in the fourteen week fourth quarter of fiscal 2006. The thirteen weeks ended Feb. 2, 2008, includes a pre-tax non-cash charge of $3.0 million for the impairment of goodwill at its Congress specialty jewelry store division. Excluding this charge, income from continuing operations would have been $15.3 million for the current quarter. For fiscal 2007, the company reported a loss from continuing operations of $10.3 million compared to a loss of $8.0 million for fiscal 2006. Excluding pre-tax non-cash charge of $3.0 million for the impairment of goodwill at its Congress specialty jewelry store division, the loss from continuing operations would have been $8.5 million. "Our business was clearly impacted by a difficult retail environment during the past holiday season," Arthur E. Reiner, chairman and chief executive officer of Finlay Enterprises Inc., commented. "For the first two months of fiscal year 2008, we've had a decrease in comparable store sales of approximately 5%, but have continued to manage our inventory in a disciplined manner, as reflected in a 5% decrease as compared to the prior year period." "Additionally, we are responsibly controlling expenditures to maximize cash flow as we navigate our business through a challenging economy," Mr. Reiner added. "We remain excited about the opportunities to further expand and diversify into the luxury jewelry store sector and intend to remain focused on optimizing our leased department store business during a period of consolidation." At Feb. 2, 2008, the company's balance sheet showed total assets of $737.088 million, total liabilities of $623.580 million and total stockholders' equity of $113.508 million. About Finlay Enterprises Headquartered in New York City, Finlay Enterprises Inc. (Nasdaq: FNLY) -- http://www.finlayenterprises.com/-- through its wholly owned subsidiary, Finlay Fine Jewelry Corporation, retails fine jewelry and operates luxury stand-alone specialty jewelry stores primarily located in the southeastern United States and licensed fine jewelry departments in department stores throughout the United States. The number of locations at the end of fiscal 2007 totaled 794, including 69 Bailey Banks & Biddle, 32 Carlyle and five Congress specialty jewelry stores. * * * As reported in the Troubled Company Reporter on Feb. 13, 2008, Standard & Poor's Ratings Services said that the closure of 94 stores due to the consolidation of Macy's divisions will have no immediate impact on Finlay Enterprises' (Finlay; B-/Negative/--) rating or outlook. FIREKEEPERS DEVELOPMENT: S&P Rates Proposed $325MM Sr. Notes at B ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issuer credit rating to FireKeepers Development Authority. The rating outlook is stable. FireKeepers is an unincorporated instrumentality and political subdivision of the Michigan-based Nottawaseppi Huron Band of the Potawatomi. At the same time, Standard & Poor's assigned its 'B' rating to FireKeepers' proposed $325 million senior secured notes due 2015. These securities are being issued pursuant to Rule 144A of the Securities Act of 1933, without registration rights. Proceeds from the proposed issue will be used to help fund the construction of the FireKeepers Casino near Battle Creek, Michigan. The 'B' issuer credit rating reflects: -- The Authority's narrow business position as an operator of a single casino once FireKeepers Casino opens in 2009, -- The potential for future competition in FireKeepers' primary market, Construction and start-up risks associated with the planned facility, and -- A significant fixed-charge burden given the anticipated coupon under the proposed notes. Still, these factors are partially tempered by: -- The escrowing of the first nine quarterly payments on the notes (totaling approximately $113 million), which allows for a ramp-up period post opening; -- The facility's good location, with direct access from I-94, a major East-West thoroughfare that connects Detroit and Chicago; -- Expected adequate construction contingencies in the event of cost overruns; and -- Adequate anticipated pro forma credit measures once the casino opens. "Given that the secured notes will not be registered, financial information for FireKeepers will not be made publicly available," said Standard & Poor's credit analyst Melissa Long. "However, we expect pro forma leverage to be adequate for the rating upon the casino's opening." FORTRESS ABS: S&P Reinstates Ratings on Three Classes of Notes -------------------------------------------------------------- Standard & Poor's Ratings Services reinstated its pre-April 11, 2008, ratings on the class A-2, Ba, and B notes issued by Fortress ABS Opportunities Ltd., a collateralized debt obligation transaction backed by a multisector pool of structured finance securities, including aircraft securitizations, commercial asset-backed securities, manufactured housing bonds, and other assets. Standard & Poor's inadvertently lowered its ratings on the class A-2, Ba, and B notes on April 11, 2008. The actions reinstate the ratings previously assigned to these three classes of notes. Ratings Reinstated Fortress ABS Opportunities Ltd. Rating ------ Class To From ----- -- ---- A-2 AA+ AA- Ba BBB BB+ B BBB BB+ Other Outstanding Ratings Fortress ABS Opportunities Ltd. Class Rating ----- ------ A AA+ A-1a AA+ FOX TROT: Moody's Lowers Rating to B1 from Baa3 on $19MM Notes -------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Fox Trot CDO Ltd.: Class Description: $40,000,000 Class A Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $36,000,000 Class B Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $19,000,000 Class C Deferrable Secured Floating Rate Notes Due 2051 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $15,000,000 Class D Deferrable Secured Floating Rate Notes Due 2051 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. FREMONT INVESTMENT: CapitalSource Deal Prompts Fitch's Pos. Watch ----------------------------------------------------------------- Fitch Ratings has placed the deposit ratings of Fremont Investment & Loan on Rating Watch Positive. A complete list of ratings is detailed below. The rating action follows Fremont General Corporation's announcement that it had entered into an agreement with CapitalSource Inc. to sell substantially all of FIL's retail banking assets valued at approximately $198 million. The transaction includes deposits of $5.6 billion, $3 billion in cash and investments, and a $2.7 billion stake in a commercial real estate loan and 22 bank branches in southern California. Excluded from the sale are FIL's loan servicing platform and residential mortgage assets. In order to facilitate the sale, should FIL not have sufficient funds at time of closing, CSE agreed to lend FIL up to $200 million secured by the bank's servicing advances. Upon closing of the CSE and FIL transaction, Fitch would expect to withdraw FIL's long-term and short-term Issuer Default Ratings and Individual rating. Concurrently, Fitch has downgraded FIL's Individual Rating to 'F' from 'E'. In Fitch's opinion, FIL would have failed, if it had not entered into an acquisition agreement with CSE or received an injection of new funds from external sources. The rating actions have no impact on the ratings of FMT, FIL's non-bank holding company. Fitch believes that FMT's ability to meet its financial obligations is materially constrained. The company has missed a $6.6 million interest payment on its series B 7.875% senior notes, due March 2009, as it attempts to negotiate a debt restructuring. Under the indenture, FMT has 30 days after March 17, 2008 to make a scheduled interest payment without being in default. The company is negotiating with senior note holders to restructure the debt. Even if the restructuring of the notes occurs, this would likely constitute a distressed debt exchange in Fitch's opinion and would classify as a default. These rating has been downgraded: Fremont Investment & Loan -- Individual Rating to 'F' from 'E'. The ratings below have been placed on Rating Watch Positive: Fremont Investment & Loan: -- Long-term deposits at 'CCC/RR4'; -- Short-term Deposits at 'C' These ratings have been affirmed and remain on Outlook Negative: Fremont Investment & Loan -- Long-term IDR at 'CC' -- Short-term IDR at 'C'; -- Support Rating at '5'; -- Support Floor at 'NF'. These ratings remain unchanged: Fremont General Corp: -- Long-term Issuer Default Rating 'CC'; -- Long-term senior debt 'C/RR6'; -- Short-term IDR 'C'; -- Individual Rating 'E' -- Support Rating '5'; -- Support Floor at 'NF'. Fremont General Financing I -- Preferred securities 'C/RR6'. GE COMMERCIAL: Fitch Holds Low-B Ratings on Four Cert. Classes -------------------------------------------------------------- Fitch Ratings has upgraded these four classes of GE Commercial Mortgage Corporation, series 2003-C2: -- $14.8 million class F to 'AAA' from 'AA+'; -- $14.8 million class G to 'AA' from 'AA-'; -- $14.8 million class H to 'A' from 'A-'; -- $19.2 million class J to 'BBB' from 'BBB-'. Fitch has also affirmed these classes: -- $86.1 million class A-2 at 'AAA'; -- $54.3 million class A-3 at 'AAA'; -- $406.1 million class A-4 at 'AAA'; -- $271 million class A-1A at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $35.5 million class B at 'AAA'; -- $14.8 million class C at 'AAA'; -- $26.6 million class D at 'AAA'; -- $14.8 million class E at 'AAA'; -- $7.4 million class K at 'BB+'; -- $8.9 million class L at 'BB'; -- $4.4 million class M at 'B+'; -- $7.4 million class N at 'B'; -- $3 million class O at 'B-'; -- $2.2 million class BLVD-1 at 'A'; -- $2.5 million class BLVD-2 at 'A-'; -- $4.5 million class BLVD-3 at 'BBB+'; -- $3.5 million class BLVD-4 at 'BBB'; -- $8 million class BLVD-5 at 'BBB-'. Fitch does not rate $19.3 million class P certificates and class A-1 has paid in full. The upgrades are due to the stable performance of the transaction and an additional pay down of 9% since the last Fitch rating action. As of the April 2008 distribution date, the pool's aggregate certificate balance has decreased 14.4% to $1 billion from $1.21 billion at issuance. In total 31 (33%) loans have defeased, including four (10%) of the top 10 loans in the pool. Currently, two assets (1.2%) are in special servicing with expected losses to be absorbed by the non-rated class. The largest specially service asset (0.9%) is secured by a multifamily property in Houston, Texas. The asset was sold in April and the pay-off and realized losses will be reflected in the May 2008 remittance report. The second asset (0.3%) is secured by a vacant self-storage facility in New Orleans, Louisiana, which sustained damage from hurricanes Katrina and Rita, and is currently listed for sale. Of the three remaining shadow-rated loans, the DDR Portfolio has paid in full and the Wellbridge Portfolio (2.1%) has defeased. The Boulevard Mall (6.3%) is secured by a 1.2 million sf regional mall in Las Vegas, Nevada, of which 587,170 sf represents collateral. The A note has been divided into two pari-passu notes, A-1 ($44.7 million) in this trust and A-2, which is securitized in GMAC 2003-C2. The B-Note, a $21 million non-pooled portion of the loan, is also in this trust and collateralizes classes BLVD-1 through BLVD-5. Total occupancy was 98.7% as of December 2007, up from 92.6% at issuance. The coupon is 4.27% and the maturity is 2013. Four (3.2%) non-defeased loans are scheduled to mature in 2008 and no loans are scheduled to mature in 2009. The transaction's weighted average coupon is 5.46% and the range is 4.27-7.73%. GMAC COMMERCIAL: Fitch Holds 'B-' Rating on $4.8MM Class O Certs. ----------------------------------------------------------------- Fitch Ratings affirmed GMAC Commercial Mortgage Securities, Inc.'commercial mortgage pass-through certificates, series 2003-C2, as: -- $299.9 million class A-1 at 'AAA'; -- $471.6 million class A-2 at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $40.3 million class B at 'AAA'; -- $16.1 million class C at 'AAA'; -- $30.7 million class D at 'AAA'; -- $16.1 million class E at 'AAA'; -- $21 million class F at 'AA+'; -- $11.3 million class G at 'AA'; -- $16.1 million class H at 'A'; -- $21 million class J at 'BBB+'; -- $8.1 million class K at 'BBB'; -- $8.1 million class L at 'BBB-'; -- $9.7 million class M at 'B+'; -- $4.8 million class N at 'B'; -- $4.8 million class O at 'B-'. Fitch does not rate the $17 million class P certificates. Although the transaction has had an additional 15% pay down since the last Fitch rating action, affirmations are warranted due to the high percentage of Fitch loans of concern (10%). As of the April 2008 distribution date, the pool has paid down 23% to $1 billion from $1.29 billion at issuance. In total 24 loans (40%) have defeased, including four (15%) of the top 10 loans in the pool. The largest non-defeased loan (4.4%) is a Fitch loan of concern. The loan is collateralized by a 420-unit multifamily property in Novi, Michigan, that reported a year end 2006 debt service coverage ratio of 0.84 times and a YE 2007 DSCR of 1.03x. Servicer reported occupancy as of February 2008 improved to 79% from February 2007 of 65%. The coupon is 5.5% and the loan matures in 2013. The second largest (1.9%) Fitch loan of concern is secured by a portfolio of office, mixed-use and retail properties in Washington DC and Maryland, representing a total of 407,753 square feet. Combined occupancy as of third quarter 2007 was 72%. The loan has a coupon of 6.6% and matures in 2013. The third (1.3%) Fitch loan of concern is secured by a 255-unit multifamily property in Washington, DC, that reported a third quarter 2007 occupancy of 44%. The borrower is intentionally maintaining low occupancy in order to begin renovation plans after the loan has paid in full. The loan's maturity is June 1, 2008 with a rate of 5.0%. Of the three shadow rated loans at issuance, the John Hancock Tower and the DDR Portfolio have paid in full. The Boulevard Mall (4.3%) is a 1.2 million sf regional mall in Las Vegas, Navada, of which 587,170 sf serve as collateral for the loan. The Boulevard Mall whole loan consists of two pari passu notes and a junior note, with only the A-2 pari passu note included in the trust. Total occupancy as of year end 2007 was 98.8% compared to 92.6% at issuance. The loan's coupon is 5.5% and the maturity is 2013. Only 2.5% of the non-defeased loans are scheduled to mature in 2008 and no loans are scheduled to mature in 2009. The weighted average coupon is 5.49% and the range is 4.20% to 7.88%. Currently, there are no specially serviced loans. GOLDEN KEY: Trustee Names Deloitte & Touche as Receiver ------------------------------------------------------- The Bank of New York Mellon Corp., trustee of Golden Key Ltd., named Deloitte & Touche LLP as receiver, Dow Jones Market Watch quotes a statement from Deloitte & Touche. The appointment follows creditor Goldman Sachs' disclosure of its plan to restructure Golden Key, based on the report. Mellon Corp. served as trustee upon the order of Golden Key's maor secured creditors, the report says. Neville Kahn at Deloitte & Touche commented that Golden Key "suffered an acceleration event" in August last year and since then was called by creditors to restructure, Market Watch relates. Mr. Kahn said that his firm will assist in resolving "outstanding issues" and restructuring Golden Key, reports Market Watch. Deloitte & Touche will provide update to investors on the matter this week. About Golden Key Golden Key Ltd. is a $1.6 billion structured investment vehicle, a lite structure managed by Avendis Financial Services Ltd. Avendis is responsible for asset purchases, portfolio management, and the issuance of CP and longer-term notes. Golden Key sought to make a profit on the difference between the interest paid on short-term debt and the interest collected on assets, but the structures fell into disarray in August 2007 when the commercial paper market froze up for many issuers. * * * As reported in the Troubled Company Reporter -- Europe on Aug. 24, 2007, Standard & Poor's Ratings Services gave Golden Key Ltd. And Golden Key U.S. LLC's EUR5 billion or U.S. CP with $498.0 million mezzanine notes and capital notes these ratings: commercial paper to C/Watch Neg from B/Watch Neg; Tier 1 mezzanine notes to CC/Watch Neg from CCC/Watch Neg; Tier 2 mezzanine notes to CC/Watch Neg from CCC-/Watch Neg; and Capital notes to CC/Watch Neg from CCC-/Watch Neg. The ratings remain on CreditWatch with negative implications, where they were placed Aug. 17, 2007. The rating action follows a breach of the mandatory acceleration test. This is an enforcement event, so the vehicle is now in a "frozen" state. Accordingly, the security trustee now has control over the vehicle, and all liabilities will become due. Golden Key has to liquidate its current asset portfolio, but the exact timeframe for this is yet to be confirmed. The liabilities due are $1.3 billion in CP and $180.4 million in junior notes. The downgrade also reflects the likelihood of further losses and Golden Key's ability to pay all its outstanding liabilities. Standard & Poor's will continue to monitor the realized losses as assets are liquidated. GOODYEAR TIRE: Sets June 30 as Conversion Period for $4 Mil. Notes ------------------------------------------------------------------ The Goodyear Tire & Rubber Company's remaining 4.00% convertible senior notes due June 15, 2034 are now convertible at the option of the holders and will be convertible through June 30, 2008, the last business day of the current fiscal quarter. The notes became convertible because the last reported sale price of the company's common stock for at least 20 trading days during the 30 consecutive trading-day period ending on April 15, 2008, was greater than 120% of the conversion price in effect on such day. The notes have been convertible in previous fiscal quarters. The company will deliver shares of its common stock or pay cash upon conversion of any notes surrendered on or prior to June 30, 2008. If shares are delivered, cash will be paid in lieu of fractional shares only. Issued in July 2004, the notes are currently convertible at a rate of 83.0703 shares of common stock per $1,000 principal amount of notes, which is equal to a conversion price of $12.04 per share. During the fourth quarter of 2007, Goodyear completed an exchange offer for outstanding notes for a cash payment and shares of common stock. Approximately 99% of the outstanding notes were exchanged. As a result, less than $4 million in aggregate principal amount of notes remain outstanding. If all remaining outstanding notes are surrendered for conversion, the aggregate number of shares of common stock issued would be approximately 0.3 million. The notes could be convertible after June 30, 2008, if the sale price condition is met in any future fiscal quarter or if any of the other conditions to conversion set forth in the indenture governing the notes are met. About Goodyear Tire Headquartered in Akron, Ohio, The Goodyear Tire & Rubber Company (NYSE: GT) -- http://www.goodyear.com/-- is the world's largest tire company. The company manufactures tires, engineered rubber products and chemicals in more than 90 facilities in 28 countries. Goodyear's operations are located in Argentina, Austria, Chile, Colombia, France, Italy, Guatemala, Jamaica, Peru, Russia, among others. Goodyear employs more than 80,000 people worldwide. * * * As reported by the Troubled Company Reporter on March 7, 2008, Fitch Ratings upgraded The Goodyear Tire & Rubber Company's Issuer Default Rating to 'BB-' from 'B+' and senior unsecured debt rating to 'B+' from 'B-/RR6'. GRAND CIRCLE: S&P Withdraws 'B' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings, including the 'B' corporate credit rating, on Grand Circle Holdings LLC and related entities. The purchase of a portion of the company by Court Square Capital Partners will not occur as previously contemplated. Ratings List To From -- ---- Grand Circle Holdings LLC Corporate Credit Rating NR B/Stable/-- Second-Lien Term Loan NR BB- Recovery Rating NR 1 GREAT PANTHER: Net Loss Rises to C$19MM in Year ended December 31 ----------------------------------------------------------------- Great Panther Resources Limited reported results for its fourth quarter and year ended Dec. 31, 2007. The company reported loss of C$6.515 million in three months ended Dec. 31, 2007 compared to loss of C$7.785 million for the same period in the prior year. For full year 2007, the company's loss was C$19.701 million compared to loss of C$15.084 million in 2006. Financial highlights for the period included: -- raised C$9.4 million from the exercise of options and warrants; -- positive working capital as of Dec. 31, 2007 of C$10.7 million. -- repaid all debt related to the acquisition of a 100% interest in the Topia Mine. At Dec. 31, 2007, the company's balance sheet showed total assets of C$31.053 million compared to C$32.132 million in 2006. About Great Panther Headquartered in Vancouver, Canada, Great Panther Resources Limited (TSX: GPR) -- http://www.greatpanther.com/-- is a mining and exploration company. The company's activities are focused on the mining of precious and base metals from its wholly owned properties in Mexico. In addition, Great Panther is also involved in the acquisition, exploration and development of other properties in Mexico. Going Concern Doubt KPMG LLP, in Vancouver, Canada, expressed substantial doubt about Great Panther Resources Ltd.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2006, and 2005. The auditing firm pointed to the company's recurring losses and operating cash flow deficiencies. GREENPOINT MORTGAGE: Moody's Puts Three Cert. Ratings Under Review ------------------------------------------------------------------ Moody's Investors Service has placed on review 3 certificates from Greenpoint Mortgage Funding Trust 2005-HE1. The transaction is 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: Greenpoint Mortgage Funding Trust 2005-HE1 -- Cl. M-6, Placed on Review for Possible Downgrade, currently Baa2 -- Cl. M-7, Placed on Review for Possible Downgrade, currently Baa3 -- Cl. M-8, Placed on Review for Possible Downgrade, currently Ba1 GREYSTONE LOGISTICS: Feb. 29 Balance Sheet Upside-Down by $9.6MM ---------------------------------------------------------------- Greystone Logistics Inc. reported consolidated assets of $9,277,993, total liabilities of $18,828,358, and a stockholders' deficit of $9,550,365 at Feb. 29, 2008. At Feb. 29, 2008, the company's consolidated balance sheet also showed strained liquidity with $2,415,709 in total current assets available to pay $15,687,748 in total current liabilities. The company reported net income of $212,377 for the third quarter ended Feb. 29, 2008, compared with a net loss of $1,178,321 for the same period last year. Net income available to common shareholders after preferred dividends was $91,761, compared with a net loss available to common shareholders after preferred dividends of $1,320,102 for the same period last year. Sales were $5,427,428 with EBITDA for the quarter of $756,952, compared with sales of $2,574,428 and an EBITDA loss of $621,620 for the same period last year. Nine Month Results Sales were $16,270,703 for the nine month period ended Feb. 29, 2008, compared to $9,065,259 for the same period last year for an increase of 179%. The increase is primarily attributable to new customers, production of the beverage pallets for existing clients, upward price adjustments, and increases in pharmaceutical pallet sales. Greystone's EBITDA for the nine month period ended Feb. 29, 2008, was $2,203,617, compared with an EBITDA loss of $988,107 for the same period last year. The net income available to common shareholders was $280,891 in the first nine months of the fiscal year compared to a net loss available to common shareholders of $2,998,680 in the prior fiscal year. Management's Comments "I am pleased to announce our third consecutive quarter of black ink. Greystone's competitively priced product line has expanded to twelve different 100% recycled plastic pallets as we continue our drive to be a significant player in providing sustainable shipping solutions for an ever increasing 'green' marketplace," said Warren Kruger, Greystone chief executive officer. Kruger continued, "Greystone's new innovative 16 lb nestable pallet that lowers transportation costs by offering 2200 units per truckload is being well received, our beer keg pallet is being field tested, and we have produced samples of our 37x32 for delivery to potential users. Plant manager Ron Schelhaas and our team in Bettendorf continue to control recycled resin costs through a combination of educated buying, blending innovation, and pelletizing plastic waste. I anticipate our shareholders can look forward to a fourth quarter of profitability." Liquidity and Capital Resources At Feb. 29, 2008, the company had total contractual obligations of $14,166,695, consisting of long-term debt of $12,411,695 and operating leases of $1,755,000. Greystone has accumulated a working capital deficit of $13,272,039 at Feb. 29, 2008, which includes current portion of long-term debt of $9,351,085 and $4,225,240 in accounts payable and accrued liabilities. Substantially all of the financing that Greystone has received through Feb. 29, 2008, has been provided by loans or through loan guarantees from the officers and directors of Greystone, the offerings of preferred stock to current and former officers and directors of Greystone in 2001 and 2003 and through a private placement of common stock completed in March 2005. Greystone has 50,000 outstanding shares of cumulative 2003 Preferred Stock for a total of $5,000,000 with a preferred dividend rate of the prime rate of interest plus 3.25%. Full-text copies of the company's consolidated financial statements for the quarter ended Feb. 29, 2008, are available for free at http://researcharchives.com/t/s?2aa9 Going Concern Doubt Murrell, Hall, McIntosh & Co. PLLP, in Oklahoma City, Oklahoma, expressed substantial doubt about Greystone Logistics Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended May 31, 2007. The auditing firm pointed to the company's significant losses from operations, the lack of adequate funding to maintain working capital and stockholders' deficits at May 31, 2007. The company has a working capital deficit of $13,272,039 and a stockholders' deficiency of $9,550,365 at Feb. 29, 2008. About Greystone Logistics Headquartered in Tulsa, Oklahoma, Greystone Logistics Inc. (OTC BB: GLGI) -- http://greystonelogistics-glgi.com/ -- manufactures and sells plastic pallets, made from recycled plastic, through its wholly owned subsidiaries, Greystone Manufacturing LLCand Plastic Pallet Production Inc. Greystone sells its pallets through an exclusive distribution arrangement with Decade Products whereby Decade sells Greystone's pallets nationwide through direct sales and a network of independent contractor distributors. Greystone also sells its pallets and pallet leasing services to certain large customers direct through its president, senior vice president of Sales and Marketing and other employees. Greystone currently derives approximately 86% of its revenue from two national brewers. GSAA HOME: Moody's Junks Ratings on Four Certificate Classes ------------------------------------------------------------ Moody's Investors Service has downgraded 6 certificates and maintained on review for possible further downgrade one of those classes of certificates from GSAA Home Equity Trust Series 2006-S1. The transaction is 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: GSAA Home Equity Trust 2006-S1 -- Cl. I-A-1, Downgraded to Ba2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. I-M-1, Downgraded to B3 from Baa1 -- Cl. I-M-2, Downgraded to Caa1 from Baa2 -- Cl. I-M-3, Downgraded to Caa3 from Ba2 -- Cl. I-M-4, Downgraded to Ca from B2 -- Cl. I-M-5, Downgraded to C from Caa2 GSAMP TRUST: Moody's Downgrades Ratings on 37 Certificates ---------------------------------------------------------- Moody's Investors Service has downgraded 37 certificates and maintained on review for possible further downgrade 13 of those classes of certificates from six transactions issued by GSAMP 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 too 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: GSAMP Trust 2006-S1 -- Cl. A-1, Downgraded to Baa2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. A-2A, Downgraded to A2 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2B, Downgraded to Baa2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa3 from Baa3 -- Cl. M-2, Downgraded to C from Caa2 -- Cl. M-3, Downgraded to C from Ca Issuer: GSAMP Trust 2006-S2 -- Cl. A-1B, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. A-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Caa3 from Ba1 -- Cl. M-2, Downgraded to Ca from B2 -- Cl. M-3, Downgraded to C from Caa2 -- Cl. M-4, Downgraded to C from Ca Issuer: GSAMP Trust 2006-S3 -- Cl. A-1, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. A-3, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to C from Ca Issuer: GSAMP Trust 2006-S4 -- Cl. A-1, Downgraded to Aa2 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-2, Downgraded to Aa3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. A-3, Downgraded to Aa3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-1, Downgraded to Ba3 from A3 -- Cl. M-2, Downgraded to Caa1 from Baa2 -- Cl. M-3, Downgraded to Caa3 from Ba3 -- Cl. M-4, Downgraded to Ca from B3 -- Cl. M-5, Downgraded to C from Caa2 -- Cl. M-6, Downgraded to C from Ca Issuer: GSAMP Trust 2006-S5 -- Cl. A-1, Downgraded to Caa3 from B3 -- Cl. A-2, Downgraded to Caa3 from B3 Issuer: GSAMP Trust 2006-S6 -- Cl. A-1A, Downgraded to Baa1 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. A-1B, Downgraded to B2 from Aaa -- Cl. A-1C, Downgraded to B1 from Aaa -- Cl. A-2, Downgraded to B2 from Aa2 -- Cl. A-3, Downgraded to B2 from Aa2 -- Cl. M-1, Downgraded to Caa3 from Baa3 -- Cl. M-2, Downgraded to Ca from Ba2 -- Cl. M-3, Downgraded to C from Caa2 -- Cl. M-4, Downgraded to C from Ca GSAMP TRUST: Moody's Chips Ratings on 24 Tranches ------------------------------------------------- Moody's Investors Service has downgraded the ratings of twenty four tranches issued in one transaction from the GSAMP Trust 2004 shelf and three transactions from the GSAMP Trust 2005 shelf. The collateral backing each transaction consists primarily of first lien adjustable-rate and fixed-rate subprime mortgage loans. The deals being reviewed have experienced an increasing proportion of severely delinquent loans. Timing of losses and in some cases, pending stepdown, will cause the protection available to the subordinated bonds to be diminished. Complete rating actions are: Issuer: GSAMP Trust 2004-WF -- Cl. M-2, downgraded from A2 to Baa2 -- Cl. M-3, downgraded from A3 to Ba2 -- Cl. B-1, downgraded from Baa1 to B2 -- Cl. B-2, downgraded from Baa2 to Caa2 -- Cl. B-3, downgraded from Baa3 to C Issuer: GSAMP Trust 2005-AHL -- Cl. M-2, downgraded from A2 to Baa1 -- Cl. M-3, downgraded from A3 to Baa2 -- Cl. M-4, downgraded from Baa1 to Ba1 -- Cl. M-5, downgraded from Baa2 to Ba3 -- Cl. M-6, downgraded from Baa3 to B1 -- Cl. B-1, downgraded from Ba1 to B3 -- Cl. B-2, downgraded from Ba2 to Caa2 Issuer: GSAMP Trust 2005-HE1 -- Cl. M-2, downgraded from A2 to Baa3 -- Cl. M-3, downgraded from A3 to Ba2 -- Cl. B-1, downgraded from Baa1 to B2 -- Cl. B-2, downgraded from Baa2 to Caa2 -- Cl. B-3, downgraded from Baa3 to C -- Cl. B-4, downgraded from Ba1 to C Issuer: GSAMP Trust 2005-HE2 -- Cl. M-2, downgraded from A2 to Baa2 -- Cl. M-3, downgraded from A3 to Baa3 -- Cl. B-1, downgraded from Baa1 to Ba2 -- Cl. B-2, downgraded from Baa2 to B1 -- Cl. B-3, downgraded from Baa3 to Caa2 -- Cl. B-4, downgraded from Ba1 to C HANOVER CAPITAL: Gets Notice of Listing Non-Compliance from AMEX ---------------------------------------------------------------- Hanover Capital Mortgage Holdings Inc. received notice from the American Stock Exchange Staff indicating that, after reviewing the company's form 10-K for the fiscal year ended Dec. 31, 2007, as well as discussions with representatives of the company, the company does not meet certain of the Exchange's continued listing standards. Specifically, the notice provides that the company is not in compliance with: (1) Section 1003(a)(i) of the Amex company Guide due to stockholders' equity of less than $2,000,000 and losses from continuing operations and net losses in two out of its three most recent fiscal years, and (2) Section 1003(a)(iv) of the Amex company Guide in that the company has sustained losses which are so substantial in relation to overall operations or its existing financial resources, or its financial condition has become so impaired, that it appears questionable, in the opinion of the Exchange, as to whether the company will be able to continue operations or meet its obligations as they mature. The company was afforded the opportunity to submit a plan of compliance to the Exchange by May 8, 2008, advising the Exchange of action it has taken or will take that will bring it back into compliance with Sections 1003(a)(iv) of the Amex company Guide by Aug. 11, 2008 and Section 1003(a)(i) of the Amex company Guide by Oct. 8, 2009. If the company does not submit a plan or if the plan submitted is not accepted by the Exchange, the company will be subject to delisting procedures as set forth in Section 1010 and part 12 of the Amex company Guide. Furthermore, if the plan is accepted by the Exchange, but the company is not in compliance with the continued listing standards at the conclusion of the respective plan periods, or does not make progress consistent with the plan during the plan periods, the Exchange may initiate delisting proceedings. The company intends to submit a plan it believes will be acceptable to the Exchange by the May 8, 2008 deadline. About Hanover Capital Based in Edison, N.J., Hanover Capital Mortgage Holdings, Inc. (AMEX: HCM) -- http://www.hanovercapitalholdings.com/-- is a specialty finance company whose principal business is to generate net interest income on its portfolio of prime mortgage loans and mortgage securities backed by prime mortgage loans on a leveraged basis. The company avoids investments in sub-prime or Alt-A loans or securities collateralized by sub-prime or Alt-A loans. The company conducts its operations as a real estate investment trust, or REIT, for federal income tax purposes. The company has one primary subsidiary, Hanover Capital Partners 2, Ltd. * * * As reported by the Troubled company Reporter on April 10, 2008, Grant Thornton LLP in New York raised substantial doubt about Hanover Capital Mortgage Holdings, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. HOOP HOLDINGS: U.S. Trustee Appoints Seven-Member Creditors Panel ----------------------------------------------------------------- Kelly Beaudin Stapleton, U.S. Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors in Hoop Holdings LLC and its debtor affiliates' Chapter 11 cases. The panel consists of: 1. General Growth Properties Inc. Attn: Julie Minnick Bowden 110 N. Wacker Dr. Chicago, IL, 60606 Tel (312) 960-2707 Fax (312) 442-6374 2. Jasco Industries Inc. Attn: Jay Austrian 355 South Technology Drive Central Islip, NY 11722 Tel (631) 348-1772 Fax (631) 348-1879 3. Lakeview Construction Inc. Attn: Michael Anderson 10505 Corporate Drive Pleasant Prairie, WI 53158 Tel (262) 857-3336 Fax (262) 857-3424 4. Moore Wallace North America Inc. Attn: Dan Pevonka 3075 Highland Pkwy Downers Grove, IL 60515 Tel (630) 322-6931 Fax (630) 322-6052 5. Nantong Dasheng Wushan Towels & Quilts Co. Ltd. Attn: Julia Zhou 3F, Tower A584 Zhi Zhao Ju Rd. Shanghai, China Tel 86-21-63158236 Fax 86-21-63158237 6. Ocean Sky International Attn: Edward Ang 22 Tampines St. 92 Singapore 528876 Tel 65-6789-9988 7. Simon Property Group Inc. Attn: Ronald M. Tucker 225 West Washington St. Indianapolis, IN 46204 Tel (317) 263-2346 Fax (317) 263-7901 Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and operates gift, novelty, and souvenir shops. The company and two of its affiliates (Hoop Retail Stores, LLC and Hoop Canada Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008 (Bankr. D. Del. Lead Case No.08-10544). Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 has not appointed creditors to serve on an official committee of unsecured creditors or examiner under these cases. When the Debtors' filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. HOOP HOLDINGS: U.S. Trustee Sets Sec. 341(a) Meeting on April 25 ---------------------------------------------------------------- Kelly Beaudin Stapleton, U.S. Trustee for Region 3, will convene a meeting of creditors in Hoop Holdings LLC and its debtor- affiliates' Chapter 11 case, on April 25, 2008, at 11:00 a.m., at Room 2112, 2nd Floor, J. Caleb Boggs Federal Building, Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtors' case. The Section 341(a) Meeting has been scheduled within the time required by Rule 2003 of the Federal Rules of the Bankruptcy Procedure. All creditors are invited, but not required, to attend. The Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtors under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and operates gift, novelty, and souvenir shops. The company and two of its affiliates (Hoop Retail Stores, LLC and Hoop Canada Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008 (Bankr. D. Del. Lead Case No.08-10544). Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 has not appointed creditors to serve on an official committee of unsecured creditors or examiner under these cases. When the Debtors' filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. INDEPENDENCE IV: Moody's Slashes Ba3 Rating to Caa2 on $26MM Notes ------------------------------------------------------------------ Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by Independence IV CDO, Ltd.: Class Description: $38MM Class A-3 Third Priority Senior Secured Floating Rate Notes Due 2038 -- 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: $40MM Class B Fourth Priority Senior Secured Floating Rate Notes Due 2038 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $26MM Class C Mezzanine Secured Floating Rate Notes Due 2038 -- 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. INDYMAC INABS: Moody's Junks Ratings on Four Certificate Classes ---------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of twenty nine tranches issued in three transactions from the SPMD 2004 shelf and two transactions from the IndyMac INABS 2005 shelf. The collateral backing each transaction consists primarily of first lien adjustable-rate and fixed-rate subprime mortgage loans. The deals being reviewed have experienced an increasing proportion of severely delinquent loans. Timing of losses and in some cases, pending stepdown, will cause the protection available to the subordinated bonds to be diminished. Complete rating actions are: Issuer: Home Equity Mortgage Loan Asset-Backed Trust, Series SPMD 2004-A -- Cl. M-4, downgraded from Baa2 to Ba1 Issuer: IndyMac Home Equity Mortgage Loan Asset-Backed Trust, SPMD 2004-B -- Cl. M-6, downgraded from A3 to Baa2 -- Cl. M-7, downgraded from Baa1 to Ba1 -- Cl. M-8, downgraded from Baa2 to Ba2 -- Cl. M-9, downgraded from Baa3 to B2 Issuer: IndyMac Home Equity Mortgage Loan Asset-Backed Trust, SPMD 2004-C -- Cl. M-2, downgraded from Aa2 to A1 -- Cl. M-3, downgraded from Aa3 to A3 -- Cl. M-4, downgraded from A1 to Baa2 -- Cl. M-5, downgraded from A2 to Baa3 -- Cl. M-6, downgraded from A3 to Ba1 -- Cl. M-7, downgraded from Baa1 to Ba3 -- Cl. M-8, downgraded from Baa2 to B2 -- Cl. M-9, downgraded from Baa3 to Caa1 Issuer: IndyMac Home Equity Mortgage Loan Asset-Backed Trust, INABS 2005-A -- Cl. M-2, downgraded from Aa2 to Aa3 -- Cl. M-3, downgraded from Aa3 to A2 -- Cl. M-4, downgraded from A1 to Baa1 -- Cl. M-5, downgraded from A2 to Baa2 -- Cl. M-6, downgraded from A3 to Baa3 -- Cl. M-7, downgraded from Baa1 to Ba2 -- Cl. M-8, downgraded from Baa2 to Ba3 -- Cl. M-9, downgraded from Baa3 to B1 -- Cl. M-10, downgraded from Ba1 to B3 Issuer: IndyMac Home Equity Mortgage Loan Asset-Backed Trust, INABS 2005-B -- Cl. M-5, downgraded from A2 to Baa1 -- Cl. M-6, downgraded from A3 to Ba1 -- Cl. M-7, downgraded from Baa1 to Ba2 -- Cl. M-8, downgraded from Baa2 to B1 -- Cl. M-9, downgraded from Baa3 to Caa2 -- Cl. M-10, downgraded from Ba1 to Ca -- Cl. M-11, downgraded from Ba2 to C INPHONIC INC: Files Ch. 11 Liquidation Plan & Disclosure Statement ------------------------------------------------------------------ InPhonic Inc. and its debtor-affiliates together with the Official Committee of Unsecured Creditors delivered a Joint Chapter 11 Plan of Liquidation dated April 14, 2008, and a Disclosure Statement explaining that plan to the United States Bankruptcy Court for the District of Delaware. Overview of the Plan The Plan provides for the orderly liquidation of the Debtors' estates, and for the merger of all of their estates and consolidation of assets and liabilities into SN Liquidation on the effective date. Because substantially all of the Debtors' operating assets have been sold as part of the sale, the Plan further provides for the creation of litigation trust to administer the Debtors' remaining assets and assess the value of these assets. Pursuant to the Plan, eight distinct legal entities are being liquidated. The remaining assets, among other things, include any causes of action against the recipients of stock redemption payments and claims, former directors and officers. These causes of action are central to the success of the Plan and the distribution of any value to the general unsecured claim holders. On Dec. 13, 2008, the Court approved the Debtors' request to sell substantially all of their assets to Adeptio INPC Funding LLC for $50,000,000, under an asset purchase agreement dated Nov. 8, 2007. Treatment of Claims and Interest Under the Plan, these creditors are expected to get 100% recovery including: -- administrative claim, totaling $1,482,000; -- priority tax claims; and -- priority non-tax claims. Assume Liability Claims will be satisfied by Adeptio INPC pursuant to the terms of the asset purchase agreement. After the effective date, holders of Other Secured Claims are expected to get, either: i) cash equal to the amount of the allowed claims; ii) the collateral securing the claims; or iii) other treatment agreed by the Debtors and holders. Holder of the Allowed Secured Lender Claims will receive a $20,000,000 Secured Lender's Deficiency Claim, which entitle the holder to a pro rata share in the litigation trust interest. Each Holder of an Allowed General Unsecured Claim will receive its pro rata share in the ligation trust interest. The Debtor believe there are a total of approximately $204,964,908 in General Unsecured Claims. Intercompany and Equity Claims will be canceled. Holders of these claims will not receive or retain any property on account of their claims. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2aad A full-text copy of the Joint Chapter 11 Plan of Liquidation is available for free at http://ResearchArchives.com/t/s?2aae About InPhonic Inc. Headquartered in Washington, DC, InPhonic Inc. (NASDAQ:INPC)-- http://www.inphonic.com/-- provides internet and wireless services. The company through its wholly owned subsidiary, CAIS Acquisition II, market broadband and VOIP services. The company maintained operations centers in Largo, Maryland; Reston, Virginia; and Great Falls, Virginia. As reported in Troubled Company Reporter on Feb. 12, 2008, the Court authorized the Debtors to change their name and the caption of the bankruptcy case to SN Liquidation, Inc. The company and its debtor-affiliates filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. D. Del. Case Nos. 07-11666 to 07-11673). Mary E. Augustine, Esq., and Neil B. Glassman, Esq., at The Bayard Firm, in Wilmington, Delaware, represent the Debtors. The Debtors selected BMC Group Inc. as their claims, noticing and balloting agent. The United States Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors in the Debtors' cases. Kurt F. Gwynne, Esq., and Robert P. Simons, Esq., at Reed Smith LLP, represent the Committee. When the Debtors filed from protection from their creditors, they listed total assets of $120,916,991 and total debts of $179,402,834. INTERSTATE AUTO: Poor Performance Cues A.M. Best to Chip Ratings ---------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B(Fair) and issuer credit rating to "bb-" from "bb+" of Interstate Auto Insurance Company, Inc. The outlook has been revised to negative from stable. These rating actions reflect Interstate Auto's unfavorable operating performance and deteriorating surplus. As a single state auto writer in Maryland, Interstate Auto's underwriting results are susceptible to competitive market pressures, and as a result, premium writings declined significantly in recent years. In addition, overall results are hampered by elevated underwriting expenses. Since uncertainty remains regarding the ultimate success of the company's recent profit driven strategies and its ability to generate capital, the rating outlook has been revised to negative. Partially offsetting these rating factors is Interstate Auto's historically favorable loss development and conservative investment risk profile. IPALCO ENTERPRISES: Lenders Agree to Amend $371MM Notes Indenture ----------------------------------------------------------------- IPALCO Enterprises, Inc. completed its previously announced offering of $400 million of 7.25% Senior Secured Notes due April 1, 2016, at an issue price of 98.526%. The 2016 Notes were sold on a private basis in the United States pursuant to Rule 144A and outside the United States pursuant to Regulation S under the Securities Act of 1933. Proceeds of the offering, together with available cash on hand, were used to purchase approximately $371.2 million of the Company's 8.375% Senior Secured Notes due 2008, for total consideration of approximately $385.1 million, plus accrued and unpaid interest of approximately $13.0 million, pursuant to the Company's previously announced tender offer to purchase for cash any and all of the outstanding 2008 Notes. At issue, the 2008 Notes' original coupon was 7.375%. The Company received consents from holders of approximately $371.2 million, or 98.99%, of the outstanding 2008 Notes on or prior to 5:00 p.m., New York City time, on April 14, 2008 (the Consent Expiration Date) to adopt amendments to the indenture governing the 2008 Notes in connection with the tender offer and related consent solicitation, and such amendments have become effective. The pricing information for the tender offer was calculated as of 2:00 p.m., New York City time, on April 14, 2008: Security Maturity Fixed Ref. Relevant Ref. Tender Consent Total Description Date Spread Security Blomberg Yield Offer Payment Consideration Page Yield (includes consent payment) 8.375% Nov. 14, 50 bps 4.875% PX3 1.356% 1.856% $30.00 $1037.44 Senior 2001 U.S. Secured Treasury Notes Note due 2008 due (CUSIP No. Oct. 31, 462613AB6) 2008 At issue, the Notes' original coupon was 7.375%. The detailed methodology for calculating the total consideration for validly tendered 2008 Notes is outlined in the Company's Offer to Purchase and Consent Solicitation Statement dated April 1, 2008, which is available from the information agent. Holders who validly tender 2008 Notes after the Consent Expiration Date but on or prior to the Offer Expiration Date will be eligible to receive as consideration the purchase price, which equals the total consideration less the $30.00 consent payment per $1,000 principal amount of 2008 Notes. In addition, holders of all 2008 Notes accepted for payment are entitled to receipt of accrued and unpaid interest in respect of such 2008 Notes from the last interest payment date prior to the applicable settlement date to, but not including, the applicable settlement date. The tender offer will expire, as previously announced, at midnight, New York City time, on April 28, 2008, unless extended or earlier terminated. Settlement for all 2008 Notes tendered on or prior to the Consent Expiration Date and accepted for payment occurred today, the initial settlement date. Settlement for all 2008 Notes tendered after the Consent Expiration Date, but on or prior to the Offer Expiration Date, is expected to occur promptly following the Offer Expiration Date. Consummation of the tender offer, and payment for tendered notes, is subject to the satisfaction or waiver of certain conditions described in the Statement. Merrill Lynch, Pierce, Fenner & Smith Incorporated is acting as dealer manager and solicitation agent for the tender offer and the consent solicitation. The tender agent and information agent is Global Bondholder Services Corporation. Requests for documentation should be directed to Global Bondholder Services Corporation at (866) 470-4500 (toll-free). Questions regarding the tender offer and consent solicitation should be directed to Merrill Lynch, Pierce, Fenner & Smith Incorporated at (888) 654-8637 (toll-free) or (212) 449-4914 (collect). Based in Indianapolis, Indiana, IPALCO Enterprises, Inc. -- http://www.ipalco.com-- is a holding company which, through its principal subsidiary Indianapolis Power & Light Company, a regulated electric utility, engages primarily in generating, transmitting, distributing and selling electric energy to approximately 465,000 retail customers in the city of Indianapolis and neighboring areas within the state of Indiana. IPALCO Enterprises, Inc. is a wholly-owned subsidiary of The AES Corporation, a global power company committed to providing electricity to customers in a socially responsible way. JP MORGAN: Fitch Holds 'B-' Rating on $4.6MM Class N Certificates ----------------------------------------------------------------- Fitch Ratings upgrades JP Morgan Chase's commercial mortgage pass-through certificates, series 2003-ML1, as: -- $23.2 million class F to 'AA+' from 'AA-'; -- $9.3 million class G to 'AA-' from 'A'; -- $16.3 million class H to 'A-' from 'BBB+'; -- $10.5 million class J to 'BBB' from 'BBB-'. Fitch also affirmed these classes: -- $145.8 million class A-1 at 'AAA'; -- $387.1 million class A-2 at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; -- $26.7 million class B at 'AAA'; -- $10.5 million class C at 'AAA'; -- $22.1 million class D at 'AAA'; -- $12.8 million class E at 'AAA'; -- $5.8 million class K at 'BB'; -- $5.8 million class L at 'B+'; -- $7 million class M at 'B'; -- $4.6 million class N at 'B-'. Fitch does not rate the $12.3 million NR class. The upgrades reflect stable performance and increased credit enhancement due to the repayment of eight loans and scheduled amortization since Fitch's last rating action. As of the April 2008 distribution date, the pool's aggregate certificate balance has decreased 24.7% to $699.9 million from $929.8 million since issuance. Sixteen loans (23.3%) are defeased. Fitch has reviewed the performance of the Hyatt Regency Crystal City loan (6.8%), which maintains an investment grade shadow rating. The loan is secured by a 681 full service hotel in Arlington, Virginia. The whole loan includes the $47.5 million A note and the $12.4 million B note. Only the A note is included in this transaction. As of year-end 2007, occupancy rate was 71.2% with average daily rate at $168.22, compared to 68.1% with ADR of $131 at issuance. Fitch has identified six loans (4.8%) as Fitch loans of concern due to declining performance. The largest Fitch loan of concern (1.4%), which is in special servicing, is a 212 unit multifamily property in Decatur, Georgia. The loan was transferred to the special servicer after the borrower requested a loan extension. The loan matured on Feb. 1, 2008. The special servicer is in negotiation with the borrower regarding terms of extension and is also preparing to file foreclosure. The second Fitch loan of concern (1.3%) is secured by a 217,032 square foot retail property in Winter Springs, Florida. The servicer reported Debt Service Coverage Ratio as of Sept. 30, 2007 is 0.84 times with 99% occupancy rate, compared to DSCR of 1.25x with 98.1% occupancy rate at issuance. The decrease in DSCR is primarily due to increase in insurance premiums and expenses. KENNETH GOOD: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Kenneth Marston Good Two Hillcrest Green 12720 Hillcrest Road, Suite 720 Dallas, TX 75230 Bankruptcy Case No.: 08-40955 Chapter 11 Petition Date: April 15, 2008 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Frank J. Wright, Esq. (bankruptcy@wgblawfirm.com) Wright Ginsberg Brusilow, P.C. 600 Signature Place 14755 Preston Road Dallas, TX 75254 Tel: (972) 788-1600 http://www.wgblawfirm.com/ Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Graham Mortgage Corp. Guaranty $30,422,776 Attn: Joe Graham & Grant Morrow 3838 Oak Lawn, Suite 1500 Dallas, TX 75219 Tel: (214) 522-6400 Fax: (214) 522-6103 First National Bank Guaranty $23,683,212 Attn: David Wood 2045 Forest Lane, Suite 150 Garl&, TX 75042 Tel: (972) 485-7053 Fax: (972) 485-7089 Century Bank, N.A. Guaranty $15,408,411 Attn: Michael Becker 5151 Beltline Road, Suite 200 Dallas, TX 75254 Fax: (972) 588-6400 Tel: (972) 588-6430 Charter FL, L.P. Guaranty $12,934,261 Attn: Ray Washburne & Phil Scheble 1845 Woodall Rogers Freeway, Suite 1700 Dallas, TX 75201 Tel: (214) 999-1010 Fax: (214) 999-0130 PNL Parkway, L.P. Guaranty $12,350,000 Attn: John Willlingham & Jerod Miller 2100 Ross Avenue, Suite 2900 Dallas, TX 7520112 Tel: (214) 379-2226 Fax: (214) 379-9003 Hilliard Crews Note $9,219,716 10001 Holmes Road Collierville, TN Tel: (901) 202-6304 Fax: (901) 854-4014 RMR Investments, Inc. Guaranty $7,760,000 Attn: Ronald Hsueh 212 S. Palm Avenue, Suite 200 Alhambra, CA 91901 Fax: (626) 282-6588 Tel: (626) 282-0900 Southwest Securities, FSB Guaranty $6,232,507 Attn: Brent Taylor 1201 Elm St., Suite 101 Dallas, TX 75270 Tel: (214) 859-5204 Fax: (214) 859-5220 PNL Josey, L.P. Guaranty $5,500,000 Attn: John Willingham & Jerod Miller 2100 Ross Avenue, Suite 2900 Dallas, TX 75201 Fax: (214) 379-9003 Tel: (214) 379-2226 Wildcard Family Trust Ltd. Note $3,650,000 Attn: Ron Crosby 5500 W. Plano Pkwy., Suite 200 Plano, TX 75093 Tel: (972) 380-5500 Fax: (972) 380-9570 Gregg Schnurr Note $3,000,000 P.O. Box 341239 Austin, TX 78734 Fax: (512) 299-9242 Tel: (512) 299-9550 Ray Baldwin Note $2,800,000 107 W. Lufkin Avenue, Suite 318 Lufkin, TX 75902 Tel: (936) 639-2201 Fax: (936) 634-8677 El& Energy, Inc. Guaranty $2,530,000 Attn: Terry Landry 13455 Noel Road Suite 2000 Dallas, TX 75240 Tel: (214) 265-9174 Fax: (214) 265-7008 First Community Bank Guaranty $1,860,000 Attn: Gordon Roberts 17120 North Dallas Parkway, Suite 101 Dallas, TX 75248 Tel: (972) 407-5404 Fax: (469) 828-4642 Roach, et al. Guaranty $1,814,791 Attn: Paul Sewell 1755 Wittington Place, Suite 300 Dallas, TX 75234 Tel: (972) 484-7780 Fax: (972) 484-7743 Doug Urquhart, Trustee Loan $600,000 5964 Meletio Lane Dallas, TX 75230 Tel: (214) 435-4555 Fax: (972) 774-0559 Wallace E. Good Loan $200,000 Curtis Hawley Loan $150,000 JNC Enterprises Loan $100,000 Century Bank Cardmember Credit Card $21,587 LEINER HEALTH: Sale Bidding Procedure, Incentive Program Approved ----------------------------------------------------------------- The Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware approved Leiner Health Products Inc. and its debtor-affiliates' proposed bidding procedures for the sale of substantially all of their assets, subject to higher and better offers. According to the sale order, an auction will take place on June 9, 2008, followed by sale hearing on June 11, 2008, at 1:30 p.m. Objections, if any, are due June 4, 2008. To determine the best offer, each interested bidder must submit its offer along with a 10% cash deposit by May 30, 2008, to Leiner Health Products Inc.; Houlihan Lokey Howard & Zukin Capital Inc., the Debtors' financial advisor and investment banker; and Kirkland & Ellis LLP, the Debtors' proposed counsel. During the auction to be held at Kirkland & Ellis in New York, and bids will be made in increments of at least $500,000 higher than the previous bid. According to the asset purchase agreement, all deposits will be returned to each bidder not selected by the Debtors as the successful bidder. Asset Sale Incentive Program Judge Carey also authorized the Debtors to make certain payments for their senior management team pursuant to a asset sale incentive program dated April 11, 2008. He says that all payment obligation will be treated as an administrative expense as set forth in Section 503(b)(1)(A) of the Bankruptcy Code. Under the program, each members is expected to get (i) certain percentage of its annual base salary and (ii) a pro rata share of additional bonus pool funds of approximately $1.84 million; provided, however, that the sale of substantially all the Debtors' assets is consummated. About Leiner Health Headquartered in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com-- manufacture and supply store brand vitamins, minerals and nutritional supplements products, and over- the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to their primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Debtors selected Garden City Group Inc. as noticing, claims and balloting agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors in these cases. As reported in the Troubled Company Reporter on April 10, 2008, the Debtors' schedules of assets and liabilities showed total assets of $133,412,547 and total debts of $477,961,526. * * * As reported in the Troubled Company Reporter on April 14, 2008, the Court authorized the Debtors to access, on an interim basis, up to $54 million postpetition financing to allow the company to continue operations until they are able to sell their business. LE MONDE: Moody's Chips Rating to Caa1 on Two Certificate Classes ----------------------------------------------------------------- Moody's Investors Service has downgraded and placed on further possible review for downgrade the following notes issued by Le Monde CDO I PLC: Class Description: $120,000,000 Class A-1US Variable Funding Dollar Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $80,000,000 and $69,500,000 Class A-1R Redenominatable Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $604,250,000 Class A-2US Floating Rate Dollar Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $360,000,000 Class A-3EU Floating Rate Euro Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $62,500,000 Class A-4 Floating Rate Dollar Notes Due 2052 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $30,750,000 Class B Floating Rate Dollar Notes Due 2052 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists of structured finance securities. LIBERTY HARBOUR: Moody's Junks Rating on $17MM Class C Notes ------------------------------------------------------------ Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Liberty Harbour II CDO Ltd. Class Description: $168,000,000 Class A-1 Secured Floating Rate Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $50,000,000 Class A-2 Secured Floating Rate Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $27,000,000 Class B Secured Floating Rate Notes Due 2051 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $17,000,000 Class C Deferrable Floating Rate Notes Due 2051 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. LINENS 'N THINGS: Deferred Payment Cues S&P to Put Default Ratings ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Clifton, New Jersey-based Linens 'n Things Inc., including its corporate credit rating, to 'D' from 'CCC+'. The downgrade follows Linens' announcement that it has deferred its April 15, 2008, quarterly interest payment on its senior secured floating-rate notes due 2014. "Linens has experienced poor operating performance, exacerbated by reduced consumer spending in the home sector," said Standard & Poor's credit analyst Alison Sullivan. In addition, vendors have imposed significantly more restrictive payment terms on Linens. The company is evaluating alternatives to improve its balance sheet and liquidity position. LINENS 'N THINGS: Deferred Payment Cues Moody's to Junk Ratings --------------------------------------------------------------- Moody's Investors Service downgraded Linens 'N Things, Inc.'s ratings, probability of default rating to Ca , and continued the review for further possible downgrade. Moody's also affirmed Linens' speculative grade liquidity rating at SGL-4. The downgrade of Linens' PDR is prompted by Linens' announcement on April 15, 2008 that it had decided to defer its quarterly interest payment due on April 15, 2008 to the holders of the senior secured floating rate notes due 2014. Under the terms of the indenture governing the notes, Linens has thirty days grace period before the nonpayment of interest becomes an event of default which would allow the noteholders to demand immediate repayment. The downgrade also reflects the company's announcement that it is in discussions with an ad hoc committee of holders of the notes regarding a restructuring of the company's capital structure. The probability of default rating of Ca reflects Moody's opinion that given these announcements a default -- either in the form of a bankruptcy or distressed exchange of the notes -- over the near term is highly likely.. The company has entered into a forebearance agreement with the lenders under its asset backed revolving credit facility whereby the lenders agreed to forebear for a limited period from exercising their rights and remedies under the credit agreement based upon the nonpayment of interest on the Notes. The forebearance period ends on the earliest of May 13, 2008 or upon the occurrence of; any other default, excess availability falling below $50 million, or other events described in the forebearance agreement. These ratings are downgraded and remain on review for possible downgrade: -- Corporate family rating to Ca from Caa2; -- Probability of default rating to Ca from Caa2; -- $650 Million of senior secured guaranteed notes due 2014 to Ca from Caa3. This rating is affirmed: -- Speculative Grade Liquidity Rating at SGL-4. The LGD point estimate of the $650 million senior secured notes has been changed to LGD 4,61% from LGD4, 64%. The LGD point estimate remains subject to change. Moody's review will focus on the outcome of the negotiations with the company's noteholders, the expiration of the forebearance agreement, and the expiration of the 30 day grace period related to the non-payment of interest. Linens N Things Inc., headquartered in Clifton, New Jersey, is a nationwide specialty retailer of home textiles, housewares, and home accessories that operates approximately 589 stores in 47 states and seven Canadian provinces. Revenues for the lagging twelve month period ended Dec. 29, 2007 were approximately $2.8 billion. LOUISIANA RIVERBOAT: Can Hire Winston & Strawn as Special Counsel ----------------------------------------------------------------- The United States Bankruptcy Court for the Western District of Louisiana in Shreveport authorized Louisiana Riverboat Gaming Partnership and its affiliates to employ Winston & Strawn as special counsel. Winston & Strawn will advise the company on issues related to its corporate structure as well as its Credit Agreement and Second Lien Credit Agreement, each dated July 31, 2006, among Legends Gaming, LLC, as borrower; CIT Lending Services Corporation, as administrative agent; CIT Capital Securities, LLC as lead arranger; and a consortium of lenders. The firm will also advise with respect to the Debtors' intercreditor agreements and on certain corporate, tax and finance issues related to their restructuring. The firm's partners, Joseph Walsh, Matthew J. Botica, Brian Hart; and associates, Jeremy T. Stillings and Nancy G. Everett, will primarily work on the Debtors' cases. The firm charges $405 to $975 an hour for partners; $270 to $590 for associates; and $135 to $285 for legal assistants. Winston & Strawn has represented the Debtors in all corporate and lending matters since the Debtors' formation in May 2005. The Debtors note that the firm's attorneys have become familiar with the complex factual and legal issues that will have to be addressed in the cases. Matthew J. Botica, Esq., attests that Winston & Strawn's partners and associates do not hold or represent any interest adverse to the Debtors with respect to the matters for which Winston & Strawn is to be employed. To contact Winston & Strawn: Matthew J. Botica, Esq. Jeremy T. Stillings, Esq. Nancy G. Everett, Esq. WINSTON & STRAWN LLP 35 West Wacker Drive Chicago, Illinois 60601 Tel: (312) 558-5600 Fax: (312) 558-5700 About Louisiana Riverboat Headquartered in Bossier City, Louisiana, Louisiana Riverboat Gaming Partnership, which does business as Diamond Jacks Casino & Resort, and its debtor-affiliates -- http://www.islecorp.com/-- operate casinos and hotels. The company and five of its affiliates filed for Chapter 11 protection on March 11, 2008 (Bankr. W.D. La. Lead Case No.08-10824). Tristan E. Manthey, Esq. and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick and Horn, represent the Debtors. When they filed for protection from its creditors, the companies listed consolidated assets and debts both between $100 million to $500 million. LOUISIANA RIVERBOAT: Can Hire Mesirow as Financial Advisors ----------------------------------------------------------- Louisiana Riverboat Gaming Partnership and its affiliates obtained permission from the United States Bankruptcy Court for the Western District of Louisiana in Shreveport to employ Mesirow Financial Consulting, Inc., as financial advisors. Mesirow will provide financial advisory services to the Debtors, including assisting the Debtors in developing and evaluating reorganization strategies and alternatives; preparing and reviewing proposed business plans and the company's financial condition; reviewing and critiquing the Debtors' financial projections and assumptions; developing employee retention and severage plans; and assisting the Debtors in preparing and prosecuting to confirmation a plan of reorganization. Mesirow has provided financial advisory services to the Debtors since December 2007. The firm will be paid according to its customary rates: Senior managing director, managing director and director $650 -- $690 Senior vice president $550 -- $620 Vice president $450 -- $520 Senior associate $350 -- $420 Associate $190 -- $290 Paraprofessional $150 James E. Nugent, managing director at Mesirow, discloses that the firm received advance payment retainers totaling $75,000 from the Debtors, of which $25,000 was applied to fees. The firm is holding the excess as security for postpetition services. Mr. Nugent attests that his firm doesn't hold or represent any adverse interest to the Debtors or their estates with respect to matters on which the firm will be employed. To contact Mesirow: Mesirow Financial Consulting, LLC 321 North Clark Street Chicago, Illinois 60810 Tel: (312) 595-6200 About Louisiana Riverboat Headquartered in Bossier City, Louisiana, Louisiana Riverboat Gaming Partnership, which does business as Diamond Jacks Casino & Resort, and its debtor-affiliates -- http://www.islecorp.com/-- operate casinos and hotels. The company and five of its affiliates filed for Chapter 11 protection on March 11, 2008 (Bankr. W.D. La. Lead Case No.08-10824). Tristan E. Manthey, Esq. and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick and Horn, represent the Debtors. When they filed for protection from its creditors, the companies listed consolidated assets and debts both between $100 million to $500 million. LOUISIANA RIVERBOAT: Hires Kurtzman Carson as Claims Agent ---------------------------------------------------------- Louisiana Riverboat Gaming Partnership and its affiliates seek permission from the United States Bankruptcy Court for the Western District of Louisiana in Shreveport to engage Kurtzman Carson Consultants LLC as their claims, noticing and balloting agent. The Debtors believe KCC's engagement is warranted given the size of their chapter 11 cases, the number of creditors and parties-in- interest involved. The Debtors explain that the hundreds of creditors and other parties involved in the chapter 11 cases may impose heavy administrative and other burdens upon the Court and the Office of the Clerk of the Court. KCC will perform various noticing, claims management, plan solicitation, balloting, disbursement and other services, if necessary, at the request of the Debtors or the Clerk's Office. The Debtors will pay the firm in accordance with the parties' Agreement for Services. The Debtors have provided KCC with a $25,000 evergreen retainer to remain outstanding at all times. Robert Klamser, KCC's Vice President of Operations, attests that the firm is a disinterested person within the meaning of section 101(14) of the Bankruptcy Code and does not hold or represent an interest adverse to the Debtors' estates. The Debtors do not owe KCC any amount for services performed or expenses incurred prior to the Petition Date. To contact KCC: Kurtzman Carson Consultants LLC 2335 Alaska Ave. El Segundo, CA 90245 Attn: James Le Tel: (310) 823-9000 Fax: (310) 823-9133 About Louisiana Riverboat Headquartered in Bossier City, Louisiana, Louisiana Riverboat Gaming Partnership, which does business as Diamond Jacks Casino & Resort, and its debtor-affiliates -- http://www.islecorp.com/-- operate casinos and hotels. The company and five of its affiliates filed for Chapter 11 protection on March 11, 2008 (Bankr. W.D. La. Lead Case No.08-10824). Tristan E. Manthey, Esq. and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick and Horn, represent the Debtors. When they filed for protection from its creditors, the companies listed consolidated assets and debts both between $100 million to $500 million. LOUISIANA RIVERBOAT: Court Extends Schedules Filing to April 25 --------------------------------------------------------------- The United States Bankruptcy Court for the Western District of Louisiana in Shreveport extended for an additional 30 days -- until April 25, 2008 -- the deadline for Louisiana Riverboat Gaming Partnership and its affiliates to file schedules of assets and liabilities, schedules of current income and expenditures, schedules of executory contracts and unexpired leases, and statements of financial affairs. Pursuant to section 521 of the Bankruptcy Code and Rule 1007 of the Federal Rules of Bankruptcy Procedure, the Debtors are required to file schedules and statements within 15 days after the Petition Date. Due to the complexity and diversity of their operations and their limited manpower, the Debtors anticipate that they will be unable to complete their Schedules and Statements in the time required under Bankruptcy Rule 1007(c). To prepare their Schedules and Statements, the Debtors must compile information from books, records, and documents relating to a multitude of transactions. The Debtors said collection of the necessary information will require a heavy expenditure of time and effort on the part of the Debtors and their employees. About Louisiana Riverboat Headquartered in Bossier City, Louisiana, Louisiana Riverboat Gaming Partnership, which does business as Diamond Jacks Casino & Resort, and its debtor-affiliates -- http://www.islecorp.com/-- operate casinos and hotels. The company and five of its affiliates filed for Chapter 11 protection on March 11, 2008 (Bankr. W.D. La. Lead Case No.08-10824). Tristan E. Manthey, Esq. and William H. Patrick, III, Esq., at Heller Draper Hayden Patrick and Horn, represent the Debtors. When they filed for protection from its creditors, the companies listed consolidated assets and debts both between $100 million to $500 million. LUCHT'S CONCRETE: Hires Sender & Wasserman as Bankruptcy Counsel ---------------------------------------------------------------- Lucht's Concrete Pumping Inc. has hired Sender & Wasserman, P.C. as its bankruptcy counsel. The firm will assist the Debtor in all matters to fully administer its chapter 11 case, including assisting the Debtor in preparing all necessary reports and other legal papers, and representing the Debtor in litigation. Sender & Wasserman will be paid according to its customary hourly rates at: Harvey Sender $350 per hour John B. Wasserman $350 per hour Kenneth J. Buechler $225 per hour David V. Wadsworth $225 per hour Paralegals $95 per hour The firm has rendered pre-bankruptcy planning services to the Debtor. As a result, the Debtor has paid the firm $30,364 for those services. The firm held a $12,309 retainer as of the bankruptcy filing date. Mr. Wadsworth, Esq., a shareholder at the firm, attests that the firm's professionals have no connection or conflict of interest with the Debtor. To contact Sender & Wasserman: Sender & Wasserman PC 1660 Lincoln Street Suite 2200 Denver, Colorado 80264 Tel: (303) 296-1999 Fax: (303) 296-7600 Based in Sheridan, Colorado, Lucht's Concrete Pumping, Inc.-- http://www.luchtsconcrete.com/and http://www.luchts.com/-- offers concrete pumping services. The company filed for Chapter 11 protection on March 5, 2008 (Bankr. D. Colo. Case No. 08- 12619). When they filed for protection from its creditors, the companies listed assets and debts both between $10 million to $50 million. LUCHT'S CONCRETE: Hires Ted Clifton as Financial Consultant ----------------------------------------------------------- Lucht's Concrete Pumping Inc. will be hiring Ted Clifton of Clifton Carillo Business Consultants as a financial consultant in its bankruptcy case. Mr. Clifton has provided consulting services to the Debtor for approximately four and one-half years. Mr. Clifton has also participated directly in negotiations with many of the Debtor's lenders and equipment lessors. The Debtor says Mr. Clifton is intimately familiar with its operations and financial condition, and is well qualified to advise it in these proceedings. As consultant, Mr. Clifton will consult with and advise the Debtor in all matters pertaining to the Debtor's reorganization, including: -- assisting in preparing monthly financial reports and other reporting requirements; -- assisting in the preparation of financial projections; -- evaluating restructuring options; -- assisting in the raising of new capital; -- tracking performance and providing performance advice; -- assisting in the preparation of the Debtor's plan of reorganization; -- testifying, as needed, in the within case; -- preparing financial forecasts; -- updating the Debtor's business plan going forward; and -- coaching and consulting the Debtor on management and planning strategies going forward. Mr. Clifton attests that he does not hold or represent any interest adverse to the Debtor or the bankruptcy estate and is a "disinterested person" as that term is defined in 11 U.S.C. Section 101(14). The Debtor proposes to pay Mr. Clifton for his services on an hourly basis at $60 per hour. Mr. Clifton will also bill the Debtor for out-of-pocket costs arising out of his employment. To contact Mr. Clifton: Clifton Carillo Business Consultants 2151 Terraridge Drive Highlands Ranch, Colorado 80126 Based in Sheridan, Colorado, Lucht's Concrete Pumping, Inc.-- http://www.luchtsconcrete.com/and http://www.luchts.com/-- offers concrete pumping services. The company filed for Chapter 11 protection on March 5, 2008 (Bankr. D. Colo. Case No. 08- 12619). David Wadsworth, Esq. and Harvey Sender, Esq. represent the Debtor. When they filed for protection from its creditors, the companies listed assets and debts both between $10 million to $50 million. LUCHT'S CONCRETE: Hires Knight Field Fabry as Accountants --------------------------------------------------------- Lucht's Concrete Pumping Inc. has engaged Knight Field Fabry, LLP as accountants. The Debtor needs KFF to prepare financial statements and tax returns. Robert E. Fabry, a principal at KFF, says the firm does not hold or represent any interest adverse to the Debtor or the bankruptcy estate and is a "disinterested person" as that term is defined in 11 U.S.C. Section 101(14). Robert Fabry was formerly associated with the accounting firm of Seigneur Gustafson Knight, LLP, a creditor of the Debtor, and provided prepetition services to the Debtor. Mr. Fabry, individually, is not a creditor. The Debtor believes that the employment of KFF as accountants would be in the best interest of the creditors and the bankruptcy estate. KFF estimates its total fees will be between $5,700 and $7,000. To contact Knight Field Fabry, LLP: Knight Field Fabry, LLP 2810 North Speer Boulevard Denver, Colorado 80211 Based in Sheridan, Colorado, Lucht's Concrete Pumping, Inc.-- http://www.luchtsconcrete.com/and http://www.luchts.com/-- offers concrete pumping services. The company filed for Chapter 11 protection on March 5, 2008 (Bankr. D. Colo. Case No. 08- 12619). David Wadsworth, Esq. and Harvey Sender, Esq. represent the Debtor. When they filed for protection from its creditors, the companies listed assets and debts both between $10 million to $50 million. MAXXAM INC: Posts $47 Million Net Loss in Year ended December 31 ---------------------------------------------------------------- MAXXAM Inc. reported a net loss of $17.4 million for the fourth quarter ended Dec. 31, 2007, compared to a net loss of $22.9 million for the same period a year ago. For 2007, MAXXAM Inc. reported a net loss of $46.9 million compared to net income of $374.4 million for 2006. The 2006 results included a net gain of $430.9 million due to the cancellation of the company's interest in Kaiser Aluminum Corporation, resulting in the reversal of the company's losses in excess of its investment in Kaiser. On Jan. 18, 2007, Maxxam's affiliate, The Pacific Lumber company and its subsidiaries, including Scotia Pacific company LLC, filed for reorganization under Chapter 11 of the Bankruptcy Code. As a result, the company deconsolidated the Debtors' financial results beginning Jan. 19, 2007, and began reporting its investment in the Debtors using the cost method. Accordingly, the company's consolidated financial results for the three months ended Dec. 31, 2007, include no activity for the Debtors. The company's consolidated financial results for the twelve months ended Dec. 31, 2007, include the Debtors' financial results only for the period from Jan. 1, 2007, thru Jan. 18, 2007. Annual Report Filing Delay The company related that it will be unable to file its Annual Report on Form 10-K for the year ended Dec. 31, 2007, by the extended filing date under Rule 12b-25 of the Securities Exchange Act of 1934. As the company has not yet received all of the necessary information from its equity method investees, the company has not been able to complete certain disclosures in the notes to the company's consolidated financial statements. The company intends to file its Form 10-K soon as practicable after the required information is obtained on or before April 30, 2008. The audit report of Deloitte & Touche LLP on MAXXAM's consolidated financial statements for the year ended Dec. 31, 2007, is expected to contain an explanatory paragraph indicating that the uncertainty surrounding the ultimate outcome of the Bankruptcy Cases and its effect on the company, well as the company's operating losses at its remaining subsidiaries, raise substantial doubt about the company's ability to continue as a going concern. On April 1, 2008, the company advised the American Stock Exchange that the company would not be able to file the Form 10-K by the extended filing date under Rule 12b-25 of the Securities Exchange Act of 1934 due to the inability of the company to obtain all of the necessary information required to complete disclosures related to its equity method investees. On April 1, 2008 the AMEX furnished the company with a letter indicating that the failure to timely file the Form 10-K is a violation of Sections 134 and 1101 of the AMEX company Guide and the company's listing agreement with the AMEX. As a result of the filing delay, AMEX will broadcast an indicator over its market data dissemination network noting the company's noncompliance. The presence of an indicator does not constitute a trading halt or delisting. The AMEX Letter, among other things, requires the company to submit a plan by April 15, 2008, advising the AMEX of the action the company has taken, or will take by June 30, 2008, to bring the company into compliance with above-referenced sections. The AMEX Letter also indicates that the AMEX may initiate delisting procedures if (a) the company does not submit the Compliance Plan, (b) submits a Compliance Plan that is not accepted by the AMEX, (c) does not make sufficient progress under the Compliance Plan during the plan period, or (d) the company is not in compliance with the above-referenced sections by June 30, 2008. About MAXXAM Headquartered in Houston, Texas, MAXXAM Inc. (AMEX: MXM) operates businesses ranging from aluminum and timber products to real estate and horse racing. MAXXAM's top revenue source is Kaiser Aluminum, which has been in Chapter 11 bankruptcy since 2002. MAXXAM's timber subsidiary, Pacific Lumber, owns about 205,000 acres of old-growth redwood and Douglas fir timberlands in Humboldt County, California. MAXXAM's real estate interests include commercial and residential properties in Arizona, California, Texas, and Puerto Rico. The company also owns the Sam Houston Race Park, a horseracing track near Houston. Its chairperson and chief executive officer, Charles Hurwitz, controls 77% of MAXXAM. At Sept. 30, 2007, the company's balance sheets showed total assets of $543.7 million and total liabilities of $785.3 million resulting to total stockholders' deficit $241.6 million. MIDNIGHT PROPERTIES: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Lead Debtor: Midnight Properties, LLC P.O. Box 2400 Cullman, AL 35056 Bankruptcy Case No.: 08-81143 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Joseph H. Canaday, Jr. aka Josh Canaday 08-81144 Edward A. Canaday 08-81145 Michael M. Knight 08-81146 Type of Business: The Debtors are property investment companies that specialize in beach front condominiums and homes located throughout the Alabama Gulf Coast and Florida panhandle. See http://www.midnightproperties.com/ Chapter 11 Petition Date: April 15, 2008 Court: Northern District of Alabama (Decatur) Judge: Jack Caddell Debtors' Counsel: Garland C. Hall, III, Esq. (gch@chhlawpc.com) Chenault, Hammond & Hall P.O. Box 1906 Decatur, AL 35602 Tel: (256) 353-7031 http://www.chhlawpc.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million The Debtors did not file lists of their largest unsecured creditors. MORGAN STANLEY: S&P Upgrades Secured Note Rating to BB+ from BB --------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the $3.0 million class A-2 secured fixed-rate notes from Morgan Stanley ACES SPC's series 2006-8 to 'BB+' from 'BB'. The rating action reflects the April 14, 2008, raising of the senior unsecured debt ratings on Bombardier Inc. At the same time, S&P lowered its rating on the $3.0 million class A-5 secured fixed- rate notes from the same transaction to 'CCC+' from 'B-'. The rating action reflects the April 14, 2008, lowering of the senior unsecured debt ratings on Bowater Inc. Morgan Stanley ACES SPC's series 2006-8 is a credit-linked note transaction. The rating on each class of notes is based on the lowest of (i) the ratings on the respective reference obligations for each class (with respect to class A-2, the senior unsecured notes issued by Bombardier Inc. {'BB+'} and with respect to class A-5, the senior unsecured notes issued by Bowater Inc. {'CCC+'}); (ii) the rating on the guarantor of the counterparty to the credit default swap, the interest rate swap, and the contingent forward agreement (in each instance, Morgan Stanley ('AA-'); and (iii) the rating on the underlying securities, the class A certificates from BA Master Credit Card Trust II's series 2001-B due 2013 ('AAA'). MORGAN STANLEY: Moody's Slashes Ratings on 16 Certificate Classes ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of sixteen tranches issued in two transactions from the Morgan Stanley Home Equity Loan Trust 2005 shelf. The collateral backing each transaction consists primarily of first lien adjustable-rate and fixed-rate subprime mortgage loans. The deals being reviewed have experienced an increasing proportion of severely delinquent loans. Timing of losses and in the case of the 2005-2 transaction, pending stepdown, will cause the protection available to the subordinated bonds to be diminished. Complete rating actions are: Issuer: Morgan Stanley Home Equity Loan Trust 2005-1 -- Cl. M-2, downgraded from Aa2 to A2 -- Cl. M-3, downgraded from Aa3 to Baa1 -- Cl. M-4, downgraded from A1 to Baa3 -- Cl. M-5, downgraded from A2 to Ba1 -- Cl. M-6, downgraded from A3 to Ba3 -- Cl. B-1, downgraded from Baa1 to B3 -- Cl. B-2, downgraded from Baa2 to Caa1 -- Cl. B-3, downgraded from Baa3 to Caa3 Issuer: Morgan Stanley Home Equity Loan Trust 2005-2 -- Cl. M-2, downgraded from Aa2 to A2 -- Cl. M-3, downgraded from Aa3 to Baa1 -- Cl. M-4, downgraded from A1 to Baa2 -- Cl. M-5, downgraded from A2 to Ba1 -- Cl. M-6, downgraded from A3 to Ba2 -- Cl. B-1, downgraded from Baa1 to B2 -- Cl. B-2, downgraded from Baa2 to Caa1 -- Cl. B-3, downgraded from Baa3 to Caa3 MOVIDA COMMS: Obtains Court Approval to Wind Down Business ---------------------------------------------------------- Movida Communications, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to: a) wind down it business and effectuate the immediate termination of its pay-as-you-go wireless voice and data communications service; b) enter into one or more agreements with third party service providers to facilitate customer transitions to these third party service providers; and c) take other actions as may be necessary to effectuate a wind- down, transition or as an alternative, a sale of the Debtor's operations and assets, including approval of bid procedures and entry into a management services agreement for a stalking horse bidder. As reported in the Troubled Company Reporter on April 11, 2008, prior to the March 31 bankruptcy filing, the Debtor, with the assistance of its legal and financial advisors, and as part of its effort to maximize the value of its assets and estate, began to consider a number of alternative approaches, including a sale of its business, a sale of its assets, a liquidation ans wind-down of its operations. In connection with such attempts, the Debtor negotiated with, in good faith, and completed multiple due diligence requests of, a potential purchaser for the sale of its business. When discussions with the potential purchaser ended without success, the Debtor was immediately forced to file for bankruptcy protection. The Debtor told the Court that their assets are fully encumbered by the liens of the Debtor's prepetition lenders. As a result, without the consent of its prepetition lenders, the Debtor does not have the ability to fund its operating business expense. Given the Debtor's dire financial constraints, absent concessions from its key creditors and a viable proposal for the immediate sale of its assets, the Debtor will be forced to discontinue service and terminate operations. To do otherwise would cause the Debtor to incur administrative expenses which would erode any value to its estate may have. Headquartered in Kansas City, Missouri, Movida Communications Inc. -- http://www.movidacellular.com/-- is a wireless service provider that offers pay-as-you-go wireless voice and data communications services using a national providers digital network. The company filed for Chapter 11 protection on March 31, 2008 (Bankr. D. Del. Case No. 08-10600). Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor, in Wilmington, Delaware, represents the Debtor. When the Debtor filed for protection from its creditors, it listed asstes between $10 million to $50 million and debts between $50 million to $100 million. No trustee, examiner or official committee of unsecured creditors has been appointed in this case. M. VANINI: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: M. Vanini Investments, Inc. 891 Harbor Drive Key Biscayne, FL 33149 Bankruptcy Case No.: 08-14646 Type of Business: The Debtor is a real estate holding company. Chapter 11 Petition Date: April 16, 2008 Court: Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: David Brett Marks, Esq. (bmarks@kpkb.com) Eyal Berger, Esq. (eberger@kpkb.com) Kluger Peretz Kaplan & Berlin, P.L. 201 S. Biscayne Blvd., 17th Flr., Ste. 1700 Miami, FL 33024 Tel: (305) 379-9000 Fax: (305) 351-3801 http://www.kpkb.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor does not have any creditors who are not insiders. NATIONAL GAS: Settlement Hearing on 3 Lawsuits Moved to April 28 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of North Carolina moved to April 28, 2008, the hearing on a partial settlement relating to National Gas Distributors LLC's bankruptcy case, The Fayetville Observer reports. The trial is about the settlement of three lawsuits that involves National Gas founder, Paul Lawing, and wife, Ann Highsmith Lawing, who were sued by bankruptcy trustee Richard Hutson, Observer says. In one of the lawsuits, the trustee demanded $10 million payment from the defendants for distribution to the National Gas' creditors, report relates. In the other cases, First Citizens Bank & Trust and Branch Banking & Trust allegedly used funds from Ann Lawing's family business to satisfy her husbands debts, report says. According to the report, creditors are owed at least $70 million when the Debtor went bankrupt in 2006 due to soaring natural gas costs caused by the 2005 hurricanes. Observer reveals that Paul Lawing consented to pay $9.4 million while his wife signed an agreement with the two banks and the bankruptcy administrator allowing her to retain $1 million from a bank account that previously held $5 million. A detailed report by Observer on the partial settlement can be found at http://www.fayobserver.com/article?id=291213 However, two creditors -- Chatham investment funds in Georgia -- balked at Ann Lawing's deal with the banks claiming they're owed $17 million prior to National Gas' bankruptcy, Observer notes. The report reveals that these opposing creditors have requested the postponement of the settlement saying that their legal representatives could not attend the hearing. Observer previously reported that creditors in the case have little chance of recovery. About National Gas Distributors National Gas Distributors LLC -- http://www.gaspartners.com/-- supplied natural gas, propane, and oil to industrial, municipal, military, and governmental facilities. As of mid-December 2005, the company effectively ceased business operations due to inadequate remaining capital and its inability to arrange for the purchase and delivery of natural gas to its customers. The company filed for bankruptcy on Jan. 20, 2006 (Bankr. E.D.N.C. Case No. 06-00166). Ocie F. Murray, Jr., Esq., at Murray Craven & Inman LLP represented the Debtor in its restructuring efforts. Richard M. Hutson, II, serves as the Chapter 11 Trustee, and is represented by Emily C. Weatherford, Esq., and John A. Northen, Esq., at Northen Blue LLP. When the Debtor filed for bankruptcy, it estimated between $1 million to $10 million in assets and $10 million to $50 million in debts. NEWPORT TELEVISION: S&P Puts 'B' Credit Rating with Stable Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Newport Television Holdings LLC and its operating subsidiary, Newport Television LLC, which S&P analyze on a consolidated basis. The outlook is stable. "The ratings on Kansas City, Missouri-based Newport reflect the company's high debt leverage, low EBITDA margins compared to the peer average, weak conversion of EBITDA into discretionary cash flow because of increased interest expense, generally weak competitive positions in the company's TV markets, sensitivity to election cycles, and TV broadcasting's mature revenue growth prospects," explained Standard & Poor's credit analyst Debbie Kinzer. These factors are only partially offset by Newport Television's revenue and geographic diversification across network affiliations and states, broadcasting's good margin and discretionary cash flow potential, and largely resilient station asset values. At the same time, S&P assigned a bank loan rating of 'B', the same as the company's corporate credit rating, and a recovery rating of '3', to Newport Television LLC's $590 million senior secured bank credit facilities, indicating S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. The senior secured credit facilities consist of a $75 million revolving credit facility due 2016 and a $515 million term loan B due 2016. Standard & Poor's also assigned issue-level and recovery ratings to Newport Television's unsecured notes. S&P assigned issue-level ratings of 'CCC+', two notches below the corporate credit rating, and recovery ratings of '6' to the proposed $200 million senior pay-in-kind toggle notes due 2017 of Newport Television LLC and the proposed $100 million holding company senior discount notes due 2018 of Newport Television Holdings LLC, indicating S&P's expectation of negligible (0%-10%) recovery in the event of a payment default. Proceeds from the transaction, including contributed sponsor equity, financed the March 14, 2008, acquisition of Clear Channel Communications Inc.'s. (B+/Watch Neg/--) television stations by Newport Television Holdings LLC, an affiliate of Providence Equity Partners. Pro forma for the transaction, total debt outstanding was $815 million as of Dec. 31, 2007. NIEUW HAARLEM: S&P Withdraws Ratings at Collateral Mngr.'s Request ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its ratings on the class A-1, A-2, A-3, B, C, and D notes issued by Nieuw hAArlem CDO Ltd., a hybrid collateralized debt obligation of CDO transaction originated in 2007. S&P are withdrawing the ratings at the request of the collateral manager for the transaction. Ratings Withdrawn Nieuw hAArlem CDO Ltd. Rating ------ Class To From ----- -- ---- A-1 NR B A-2 NR CC A-3 NR CC B NR CC C NR CC D NR CC NR -- Not rated. NORTHWEST AIRLINES: Delta Air Merger Prompts S&P's Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings, including the 'B+' long-term corporate credit rating, on Northwest Airlines Corp. on CreditWatch with negative implications, following announcement of a merger agreement with Delta Air Lines Inc. (B/Watch Pos/--). The CreditWatch listing affects enhanced equipment trust certificates with various ratings, excepting those that are insured by a bond insurer. S&P's listing of Northwest ratings on CreditWatch with negative implications and those of Delta on CreditWatch with positive implications implies that S&P foresee a corporate credit rating of either 'B' or 'B+' for the combined entity. The proposed merger is subject to approval by Northwest and Delta shareholders, and will be subject to antitrust review by the U.S. Department of Justice and approval by various other regulators. Eagan, Minnesota-based Northwest has about $13 billion of debt and leases outstanding. "The proposed merger of Northwest and Delta would create a more comprehensive route network, with opportunities for revenue and cost synergies, but entails risks in integrating employee groups and information systems, and will result in higher labor costs as labor contracts are reopened to secure employee support and capture the benefits of operating as a single airline," said Standard & Poor's credit analyst Philip Baggaley. The managements of both airlines suggest that cost and revenue synergies of the combination should total at least $1 billion annually by 2012. The proposed merger would be structured as an exchange of shares, removing the need for additional debt to finance a cash offer. However, the companies anticipate one-time integration costs of $1 billion. Despite statements earlier by the chief executive of Air France Group that his company would consider an equity investment in a merged Delta/Northwest, no such investment is currently contemplated. Standard & Poor's will evaluate the potential benefits and risks of the transaction in resolving our CreditWatch review. S&P will also consider overall airline industry prospects, as S&P were already in the process of reviewing the rating outlooks on both airlines, as well as on other U.S. airlines. Ratings on enhanced equipment trust certificates could change based on any downgrade of S&P's corporate credit rating on Northwest and, in addition, on our review of how the merger could affect incentives to affirm aircraft obligations in any future bankruptcy of the combined airline. Thus, a merged Delta/Northwest may have a greater or reduced incentive to keep certain aircraft within the context of the combined fleet. There is relatively limited overlap in aircraft models between the two airlines, with Delta operating an all-Boeing (including McDonnell Douglas aircraft) fleet, while Northwest uses a combination of Airbus and Boeing planes. Each airline currently uses certain aircraft that could perform capably missions handled by a different model in the other airline's fleet if the combined airline needed to shrink its fleet. Even if the merged airline preferred to keep all of these models in bankruptcy, its ability to use alternative planes would strengthen its bargaining position versus creditors. S&P will resolve its CreditWatch review when all or substantially all preconditions to concluding a merger are completed, and will indicate a likely outcome earlier than that, if S&P have sufficient information and certainty to do so. NORTHWEST AIRLINES: Merger Cues Moody's to Put Rtng. Under Review ----------------------------------------------------------------- Moody's Investors Service placed the debt ratings of Delta Air Lines, Inc. ("Delta", corporate family at B2) and Northwest Airlines Corporation ("Northwest", corporate family rating at B1) on review for possible downgrade. The review was prompted by the announcement that the two airlines have agreed to combine in an all-stock transaction with a combined enterprise value of approximately $18 billion. Moody's review period may be lengthy, given the time for the necessary regulatory and shareholder approvals to effect the corporate merger. Moreover, there could be a considerable additional time period to effect actual integration of the airlines, which is the basis for achieving the expected operating synergies. The all-stock nature of the transaction is viewed favorably as it precludes the need for incremental debt that would need to be serviced by the combined airline operation. Nevertheless, the extended timeframe over which cost and revenue synergies might be achieved, and the significant hurdles that will need to be overcome to realize these synergies are critical concerns that will be assessed in the review. Separately, both carriers are facing material near-term operating pressures from high fuel and maintenance costs and weakening passenger traffic that impair their ability to realize adequate yields on ticket prices. Even with the benefits of the bankruptcy restructurings recently completed by both airlines, the current industry conditions will likely make it difficult for either carrier to earn an adequate profit. Successful implementation of the merger and realization of all expected synergies could help the combined carriers deal with these challenging conditions. Yet the synergies will only be realized over an extended period of time, and with the expectation of near term net losses, combined with the still substantial debt load (Delta at $17.6 billion; Northwest at $15.3 billion, using Moody's standard adjustments), Moody's could take interim downward rating actions on either carrier's debt prior to completing the review. Moody's will examine the timing and the magnitude of the various cost and revenue synergies anticipated, and the degree to which these incremental gains will affect credit metrics and enable the new company to realize adequate returns. Particularly important will be the ability to effectively integrate the workforces of Delta and Northwest, and combine the seniority list in a way satisfactory to the work force, especially the pilots. The review will also consider the degree to which each airline can preserve its liquidity during the challenging near term operating conditions, prior to effecting the merger. The merger does not contemplate additional debt, which is helpful. In addition, the four way anti-trust immunity (Delta, Northwest, KLM, AirFrance) is also helpful as the airlines operate with broader code-share arrangements. There is limited overlap in the domestic network, and Northwest's strength in Pacific routes (particularly the Fifth Freedom rights in Japan) complement Delta's service in Europe and elsewhere. However, Moody's is skeptical that simply joining the route networks will create the revenue synergies needed to generate an adequate return. Cost savings, anticipated to reach a run-rate of about $1 billion by 2012, could be challenging in light of unresolved labor negotiations, and the negative pressures from fuel and maintenance costs. Both airlines have aging fleets that are less efficient to operate in the current high fuel cost environment. The airlines have a limited number of new aircraft on order and will need to consider the considerable capital costs associated with refleeting. The secured debt ratings of Delta and Northwest, including Enhanced Equipment Trust Certificates, but excluding ratings supported by monoline insurance policies, will be reviewed in relation to the review of the underlying implied rating as well as to the asset values of aircraft equipment that provide collateral support for the transactions. The potential ratings actions for these transactions may be of greater or less magnitude than a change in the underlying airline rating, if any. On Review for Possible Downgrade: Issuer: Delta Air Lines, Inc. -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B2 -- Speculative Grade Liquidity Rating, Placed on Review for Possible Downgrade, currently SGL-2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B2 -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba2 (19% - LGD2) -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba2 (19% - LGD2) -- Second Lien Term Loan, Placed on Review for Possible Downgrade, currently B2 (46% - LGD3) -- Series 2007-1 Pass Through Certificates, Placed on Review for Possible Downgrade: -- Class A, currently Baa1 -- Class B, currently Ba2 -- Class C, currently B1 Issuer: Northwest Airlines Corporation -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently B1 -- Speculative Grade Liquidity Rating, Placed on Review for Possible Downgrade, currently SGL-2 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B1 Issuer: Northwest Airlines, Inc. -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba3 (41% - LGD3) -- Senior Secured Bank Credit Facility, Placed on Review for Possible Downgrade, currently Ba3 (41% - LGD3) -- Series 2007-1 Pass Through Certificates, Placed on Review for Possible Downgrade: -- Class A, currently A3 -- Class B, currently Ba1 Outlook Actions: Issuer: Delta Air Lines, Inc. -- Outlook, Changed To Rating Under Review From Stable Issuer: Northwest Airlines Corporation -- Outlook, Changed To Rating Under Review From Stable Issuer: Northwest Airlines, Inc. -- Outlook, Changed To Rating Under Review From Stable Delta Air Lines, Inc. is headquartered in Atlanta, Georgia. Northwest Airlines Corp. is headquartered in Eagan, Minnesota. NORTHWEST AIRLINES: Merger Prompts Fitch to Affirm Delta Rating --------------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of Delta Air Lines, Inc. following the announcement that Delta has agreed to merge with Northwest Airlines Corp., subject to approval by the two airlines' shareholders and the U.S. Department of Justice. Delta's ratings were affirmed as: -- Issuer Default Rating at 'B'; -- First-lien senior secured credit facilities at 'BB/RR1'; -- Second-lien secured credit facility (Term Loan B) at 'B/RR4'. The issue ratings apply to $2.5 billion of committed credit facilities. The Rating Outlook for Delta has been revised to Negative from Stable. The affirmation reflects Fitch's view that the proposed transaction is likely to drive a combined post-merger credit profile that is similar to that of a stand-alone Delta. However, a successful completion of the merger is by no means a certainty in light of potential opposition from organized labor and Congress. This uncertainty, together with potential concerns raised by the DOJ in a lengthy antitrust review, increases execution risk and diverts management attention at a time of increasing stress in the U.S. airline operating environment. The Negative Outlook reflects Fitch's opinion that extreme fuel cost pressure and slower unit revenue growth rates in a U.S. recession will materially weaken Delta's credit profile over the next year- whether or not the Delta-Northwest merger is ultimately closed. The merged carrier will face substantial fixed financing obligations over the next several years in an industry operating environment that will remain difficult as the U.S. economy heads into recession. However, should the merger receive regulatory approval, the Delta-Northwest combination would likely drive some material revenue synergies related primarily to fleet optimization and greater revenue per available seat mile premiums linked to the creation of a broadly diversified and deep global route network. Notably, the realization of full revenue synergies would not be complete until 2012 as fleet and schedule optimization benefits are pursued largely in the absence of broad-based available seat mile capacity reduction. Importantly, Delta management noted on this morning's investor call that no hub closures are contemplated in connection with the merger, raising the question of how much domestic capacity could actually be removed post-closing. Delta and Northwest have each announced plans to pull back 2008 domestic capacity (10% reduction at Delta and 5% at Northwest) in response to accelerating jet fuel cost pressure since the start of the year. If no significant domestic capacity rationalization is envisioned beyond 2008, it may be very difficult for the combined Delta-Northwest to drive the type of RASM improvements necessary to offset intensifying fuel cost pressure. No material pull-backs in energy prices are assumed by Delta management in its merger plan. This fact, together with Delta's revenue synergy target ($700 million run rate) would appear to limit any opportunities to drive substantially positive free cash flow beyond 2008. With large numbers of firm aircraft deliveries keeping capital spending high, and with significant scheduled debt maturities at both carriers, an extended industry downturn could drive combined Delta-Northwest operating losses and negative free cash flow in 2009. This in turn could force the merged carrier to seek new sources of capital next year if current combined liquidity levels (approximately $7 billion) are to be maintained. Given the currently constrained nature of debt capital markets, there is little certainty about the availability of external capital post-closing. On the cost side, increasing pay rates linked to the tentative agreement with Delta pilots will pressure non-fuel unit operating costs. Delta management, however, does see an opportunity to realize $300 million to $400 million in cost synergies net of new labor contract changes. Savings linked to the elimination of redundant operations appear to be broadly attainable. Still these savings could be offset in large part by higher unit labor rates and productivity penalties if integrated contracts are not finalized at the time of the merger. Delta has identified as much as $1 billion of cash merger transition costs, which will likely be front-loaded in the 2008-2009 time period. If a quick agreement with Northwest pilots is to be reached, moreover, labor cost pressures could increase beyond planned levels. The current 'B' IDR for a stand-alone Delta reflects the high levels of debt that remain on Delta's balance sheet even after the Chapter 11 restructuring, reduced but still heavy cash obligations over the next several years and the company's exposure to demand and fuel price shocks in an industry that remains highly vulnerable to changes in the macroeconomic environment. With domestic unit revenue growth expected to slow throughout 2008 and jet fuel prices at record levels, intense margin pressure will persist. The airline's March plan to cut domestic capacity and 2,000 jobs this year is unlikely to offset the heavy cost pressure linked to $110-plus per barrel crude oil in 2008. With some weakeninng of air travel demand and RASM trends likely to appear by summer, therefore, Fitch expects full year 2008 cash flow and liquidity results to fall well short of bankruptcy exit plan assumptions for the stand-alone Delta. Delta's post-reorganization capital structure was streamlined as a result of pre-petition debt and lease rejection in Chapter 11. Recovery expectations for the first-lien revolver and term loan are superior to those of the second lien term loan. Recovery expectations for first-lien lenders are excellent, reflecting a deep collateral pool consisting of aircraft, engines, spare parts and other assets, as well as a tight covenant package protecting lenders via fixed charge coverage, minimum liquidity and collateral coverage tests. Taking into account the credit facilities, aircraft-backed EETC obligations and private mortgage agreements, Delta has virtually no unencumbered assets remaining to support additional borrowing if liquidity conditions tighten further. Secured financing for firm aircraft deliveries (including Boeing 777-200s, Boeing 737 NGs and CRJ-900 regional jets) will need to be secured if Delta's international growth strategy and fleet overhaul are to be completed. Similarly, on the Northwest side, future mainline and regional jet deliveries must be financed, since aircraft capital spending won't be funded from operating cash flow in either a stand-alone or post-merger case. A downgrade to 'B-' for the IDR could follow later in the year if operating trends in the industry continue to worsen in response to rising jet fuel costs and a fragile demand environment. With respect to the merger transition process, Fitch will remain focused primarily on the risks related to labor opposition at Northwest, where ALPA-represented pilots have made it clear that a quick intergration of pilot contracts is not likely. Labor opposition at Northwest, if prolonged, could complicate the task of realizing full merger synergies if the deal gains necessary regulatory approvals. NUTRITIONAL SOURCING: Wants Until July 31 to File Chapter 11 Plan ----------------------------------------------------------------- Nutritional Sourcing Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to further extend the exclusive periods to: a) file a Chapter 11 plan until July 31, 2008; and b) solicit acceptances of that plan until Oct. 6, 2008. The Debtors' exclusive rights to file a plan will expire on May 2, 2008. Pursuant to papers filed the Court, the extension would provide enough time to the Official Committee of Unsecured Creditor appointed in these cases to consider the Debtors' responses to its several information request, and permits the Debtors to evaluate each of 4,200 claims gathered by their claims agent, Administar Services Group LLC. The Debtors are presently selling their De Diego Grocery store and certain unimproved real estate for $26.5 million. An auction is set on April 30, 2008, followed by a sale hearing scheduled to take place on May 1, 2008. The Debtors expect the sale to complete by June 1, 2008. A hearing is set on May 1, 2008, at 4:00 p.m., to consider the Debtors' request. Objections, if any, are due April 25, 2008. About Nutritional Sourcing Based in Pompano, Florida, Nutritional Sourcing Corp., fdba Pueblo Xtra International, Inc. -- http://www.puebloxtra.com/-- owns and operates supermarkets and video rental shops in Puerto Rico and the US Virgin Islands. The company and two affiliates, Pueblo International, L.L.C., and F.L.B.N., L.L.C., filed for chapter 11 protection on Aug. 3, 2007 (Bankr. D. Del. Case Nos. 07-11038 through 07-11040). Kay Scholer LLC represents the Debtors in their restructuring efforts. Pepper Hamilton LLP serves as their Delaware counsel. Skadden, Arps, Slate, Meagher & Flom LLP represent the Official Committee of Unsecured Creditors. The company has disclosed $130.8 million in assets and debt totaling $266.5 million with the Court. NEW YORK RACING: Seeks to Extend Plan-Filing Period to May 2 ------------------------------------------------------------ The New York Racing Association Inc. asks the U.S. Bankruptcy Court for the Southern District of New York to extend, until May 2, 2008, the exclusive period wherein it can file a Chapter 11 plan of reorganization. In addition, the Debtor asks the Court to set July 2, 2008, as the deadline for soliciting acceptances of that plan. The Debtor explains that its Chapter 11 case has clearly been marked by substantial and good faith progress. The Debtor clarifies that it is not seeking the extension to delay the Chapter 11 process or to pressure creditors to accede to a plan unsatisfactory to them. Here, the Debtor relates, the Plan has been accepted and the State of New York simply requires more time in order to complete necessary documentation. The Debtor submits that terminating exclusivity at this final stage to permit an interloper to intervene and introduce a competing Chapter 11 plan could potentially devastate the focus of the parties on emerging from bankruptcy and cause confusion in Albany and among its creditors. About New York Racing Based in Jamaica, New York, The New York Racing Association Inc. aka NYRA -- http://www.nyra.com/-- operates racing tracks in Aqueduct, Belmont Park and Saratoga. The company filed for chapter 11 protection on Nov. 2, 2006 (Bankr. S.D.N.Y. Case No. 06-12618). Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, Henry C. Collins, Esq., at Cooper, Erving & Savage LLP, and Irena M. Goldstein, Esq., at Dewey Ballantine LLP represent the Debtor in its restructuring efforts. Jeffrey S. Stein of The Garden City Group Inc. serves as the Debtor's claims and noticing agent. The U.S. Trustee for Region 2 appointed an Official Committee of Unsecured Creditors and Edward M. Fox, Esq., Eric T. Moser, Esq., and Jeffrey N. Rich, Esq., at Kirkpatrick & Lockhart Preston Gates Ellis LLP, represent the Committee. When the Debtor sought protection from its creditors, it listed assets of $153 million and debts of $310 million. The Court previously extended the Debtor's exclusive periods to file a Chapter 11 plan until April 15, 2008. OAKLAND VIEW: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Oakland View, LLC 29033 Avenue Sherman, Ste. 203 Valencia, CA 91355 Bankruptcy Case No.: 08-12383 Chapter 11 Petition Date: April 16, 2008 Court: Central District Of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: T. Edward Malpass, Esq. 4931 Birch Street Newport Beach, CA 92660 Tel: (949) 474-9944 Fax: (949) 474-9947 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. OCTANS I: Moody's Lowers Ratings to C on Eight Note Classes ----------------------------------------------------------- Moody's Investors Service has downgraded ratings of nine classes of notes issued by Octans I CDO Ltd. In addition, the rating of one class of notes was placed review for possible downgrade. The notes affected by the rating action are: Class Description: $975,00,000 Class A-1 First Priority Senior Secured Floating Rate Notes due October 2041 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $82,500,000 Class A-2A Second Priority Senior Secured Floating Rate Notes due October 2041 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: C Class Description: $67,500,000 Class A-2B Third Priority Senior Secured Floating Rate Notes due October 2041 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: C Class Description: $60,000,000 Class B Fourth Priority Senior Secured Floating Rate Notes due October 2041 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: C Class Description: $80,000,000 Class C Fifth Priority Senior Secured Floating Rate Notes due October 2041 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: C Class Description: $15,000,000 Class D Sixth Priority Mezzanine Secured Floating Rate Notes due October 2041 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $15,000,000 Class E Seventh Priority Mezzanine Secured Floating Rate Notes due October 2041 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C Class Description: $31,000,000 Class F Eighth Priority Mezzanine Secured Floating Rate Notes due October 2041 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $39,000,000 Class G Ninth Priority Mezzanine Secured Floating Rate Notes due October 2041 -- Prior Rating: Ca -- Current Rating: C Octans I CDO Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence, as reported by the Trustee on April 3, 2008, of an event of default caused by a failure of the Class A Sequential Pay Ratio to be greater than or equal to 100 percent, pursuant Section 5.1(j) of the Indenture dated Sept. 26, 2006. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard, Moody's has been notified by the Trustee that the Controlling Class has directed the Trustee to declare the principal of and accrued and unpaid interest on all of the Notes to be immediately due and payable. Furthermore, the Trustee notified Moody's that the Controlling Class directed the Trustee to sell and liquidate al of the Collateral, according to the applicable provisions of the Indenture. The rating actions taken today reflect the changes in expected loss associated with certain tranches. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses experienced by a given tranche, however, may depend on the timing and outcome of the liquidation of the Collateral. OFFICE DEPOT: Decline in Performance Cues S&P to Cut Rating to BB+ ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Delray Beach, Florida-based Office Depot Inc. to 'BB+' from 'BBB-'. S&P also lowered the ratings on both Office Depot's senior unsecured $1 billion multicurrency revolving credit facility due 2012 and $400 million of senior unsecured notes due 2013 to 'BB+'. At the same time, S&P assigned a '3' recovery rating to the company's $1 billion multicurrency bank facility, indicating the expectation for meaningful (50%-70%) recovery in the event of a payment default. S&P also assigned a '4' recovery rating to the company's $400 million senior unsecured notes, indicating the expectation for average (30%-50%) recovery in the event of a payment default. S&P removed all debt ratings from CreditWatch with negative implications, where they were placed on Dec. 14, 2007 following erosion of sales and earnings in the second half of 2007. The outlook is negative. "The ratings downgrade is based on the decline in operating performance in both the North America Retail and Business Solutions segments," said Standard & Poor's credit analyst Mark Salierno, "and expectations that challenging economic trends will continue to pressure performance in fiscal 2008." Credit metrics have weakened. Lease-adjusted total debt to EBITDA was about 3x and EBITDA coverage of interest expense was about 3.7x for the fiscal year ended Dec. 29, 2007, and we think there will be some further erosion this year. OPEN TEXT: S&P Holds 'BB-' Rating; Changes Outlook to Positive -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Waterloo, Ontario-based enterprise software provider Open Text Corp. to positive from stable. At the same time, S&P affirmed the ratings, including the 'BB-' long-term corporate credit rating, on the company. At Dec. 31, 2007, Open Text had US$310 million of debt outstanding. "The outlook revision reflects the combination of a largely successful integration of Hummingbird Ltd. and improved outlook for growth in software license revenues," said Standard & Poor's credit analyst Madhav Hari. It also reflects a substantial improvement in adjusted debt leverage and corresponding credit measures from reduced debt. "The pace of any upward ratings revision, however, remains somewhat constrained by Open Text's acquisitive growth strategy, which could include additional debt-financed acquisitions," Mr. Hari added. Also constraining the ratings on Open Text are the highly competitive and consolidating technology marketplace in which it operates, characterized by larger, more-integrated providers, and an aggressive financial policy that includes an acquisitive growth strategy. These factors are partially offset by the company's sizable market position within a niche segment of the broader software industry, its solid scale given a large installed source of customers, good customer and geographic diversity, a large base of recurring revenues, and a history of generating healthy free operating cash flow. Open Text is a leading provider of Enterprise Content Management software targeting large Global 2000 enterprise customers. The company's products and services are used by more than 25 million users in 114 countries. ECM software and support services--an estimated US$2.25 billion-plus addressable market--help large businesses capture, store, and manage unstructured corporate data. In the medium term, the ECM market's key revenue drivers are e-mail archiving and records management. Although the ECM software market has higher growth potential, than the overall software and IT sector, growth could remain volatile as evidenced in recent years. The outlook is positive. Healthy near-term demand outlook for ECM software, improved scale, traction with key channel partners such as SAP, and a successful launch of the integrated DMX portfolio should improve the company's overall credit profile in the near term. S&P could raise the ratings on better-than-expected revenue growth and profitability provided the company can demonstrate its willingness to maintain adjusted debt leverage at less than 3.5x. Should Open Text's operating performance weaken materially, or if it loses significant market share, resulting in a deterioration of profitability and credit metrics, S&P could revise the outlook to stable or lower the ratings. PANTRY INC: Reduced Operating Margin Cues Moody's Rating Review --------------------------------------------------------------- Moody's Investors service placed all ratings of The Pantry, Inc. under review for possible downgrade, including the corporate family rating of B1. The review was prompted by the reduced operating margins, reduced operating cash flow, negative free cash flow, increased leverage, and the recent loss on hedges put in place during the second fiscal quarter. These factors could prevent Pantry from maintaining a credit profile consistent with its present ratings. Ratings placed under review for possible downgrade: -- Corporate family rating at B1 -- Probability of default rating at B1 -- $225 million secured revolving credit facility at Ba3 -- $350 million secured term loan at Ba3 -- $250 million 7.75% senior subordinated notes (2014) at B3 -- $150 million 3.00% senior subordinated notes (2012) at B3 Moody's review will focus on the operating performance, cash flow generation, and the company's ability to improve leverage and interest coverage metrics. Moody's will also evaluate the company's plans for dealing with the challenging economic environment and, in particular, its risk management policies and procedures in connection with the volatile gasoline market. The Pantry, Inc., with headquarters in Sanford, North Carolina, operates 1,644 convenience stores concentrated in the Southeastern United States. Revenue for the fiscal year ending September 27, 2007, were approximately $7 billion. PENTON MEDIA: CEO French Calls for Salary and Hiring Freeze ----------------------------------------------------------- Penton Media Inc. CEO John French pushed for a salary and hiring freeze and issued an amended projection on the company's revenue for 2008, John Fell of Folio Magazine in Norwalk, Connecticut relates, citing an internal memo. Mr. French's salary and hiring freeze will continue until Penton Media experiences signs of "bottom-line improvement," Folio reveals pointing to the memo statement. The hiring freeze will not include "key hires" particularly in the company's New Media and Buyers Guide groups and in the CFO vacant position, notes the report. In the memo, Mr. French stated that he met with senior managers during the past weeks to review Penton Media's revenue forecasts, Folio reports. He added, according to the report, that management see "considerable revenue challenges" that the company will encounter this year. Mr. French disclosed that he asked product managers to present amended financial forecasts for 2008 and expects the amendment to be completed late April 2008, Folio says. Mr. French told Folio that not everything in the company is heading south, and assured that some of its operations "are performing well." He explained that Penton Media is facing challenges that "other companies are facing," Folio adds. A copy of the memo in html format can be obtained here: http://ResearchArchives.com/t/s?2aaa About Penton Media Cleveland, Ohio-based Penton Media Inc. -- http://www.penton.com/ -- is a diversified business-to-business media company. The company provides media products that deliver business information to owners, operators, managers and professionals in the industries it serves. Penton, which became an independent company as a result of its spinoff from Pittway Corporation has four segments: Industry, Technology, Lifestyle and Retail, which are structured along industry lines, and enable the company to promote its related groups of products to its customers. All four segments derive their revenues from in-print publications, in-person trade shows and conferences, and online media to customers in the industries the company serves. * * * As reported in the Troubled Company Reporter on April 4, 2007, Standard & Poor's Ratings Services affirmed its corporate credit rating on Penton Media Holdings Inc. at 'B' and removed it from CreditWatch with negative implications. At the same time, Standard & Poor's affirmed all ratings, including the 'B' corporate credit ratings, on the operating entities and co- borrowers -- Penton Business Media Inc. (formerly known as Prism Business Media Inc.) and Penton Media Inc. The ratings outlook remains negative. These ratings still hold as of April 16, 2008. PIER 1 IMPORTS: Earns $13.7 Million in 4th Quarter Ended March 1 ---------------------------------------------------------------- Pier 1 Imports Inc. released Thursday its financial results for the fourth quarter and fiscal year ended March 1, 2008. The company reported net income from continuing operations of $13.7 million for the fourth quarter ended March 1, 2008, versus a net loss of $58.7 million for the year ago period. In the fourth quarter, the company generated EBITDA of $24.9 million. Comparable store sales increased 2.5% for the quarter. Total sales for the fourth fiscal quarter declined 7.8% to $436.7 million from $473.7 million in the year ago quarter. Total sales were negatively impacted by the net closure of 79 stores as well as the additional week that was included in the fourth quarter results in fiscal 2007. Merchandise margins in the fourth quarter were 48.1% of sales, up from 40.6% in the year ago quarter. Merchandise margins during the quarter were impacted by the winter sale, including the clearance of holiday merchandise. Gross profit margins for the fourth quarter were 31.8% of sales, up from 24.6% in the year ago period, and although the store count was significantly reduced from the year ago period, gross profit dollars improved over $22 million. Selling, general and administrative expenses for the fourth quarter were $50.2 million less than the year ago period, and were 26.2% of sales compared to 34.8% of sales last year. The primary contributors to the decrease in on-going costs were savings of approximately $13.6 million in payroll, $9.0 million in marketing expense and $11.9 million in other general administrative costs when compared to the same period last year. Additionally, during the fourth quarter, selling, general and administrative expenses included a decrease of $15.7 million in special charges, when compared to the same period last year. Excluding the impact of these charges, adjusted selling, general and administrative expenses for the fourth quarter declined $34.5 million from the year ago period. Fiscal Year 2008 Results For the fiscal year, total sales declined 6.9% to $1.5 billion, down from $1.6 billion in fiscal 2007. Additionally, the company reported a net loss from continuing operations of $96.0 million. During the fiscal year, the company improved EBITDA by $127.4 million over fiscal 2007. Fiscal 2008 reported EBITDA includes special charges of $21.1 million. For the year, selling, general and administrative expenses declined $161.1 million when compared to fiscal 2007. Expense savings included $53.4 million in marketing, $46.5 million in payroll, $25.0 million in other general and administrative costs, and $36.2 million reduction in special charges. Management expects to continue to realize these on-going savings and on an annualized basis expects these savings to total $160 million during Fiscal 2009 when compared to Fiscal 2007. Sale of Headquarters Facility On March 31, 2008, the company announced the sale of its corporate headquarters facility to Chesapeake Energy Corporation. As part of the transaction, the company will lease approximately 250,000 square feet for an initial term of seven years, with an option to extend for a period of three years, and a right to terminate the lease after five years. While the terms of the lease have not been disclosed, it is anticipated that the net result of the transaction will have a positive impact on earnings per share. The transaction is expected to close no later than June 30, 2008. Management's Comments Alex W. Smith, the company's president and chief executive officer, said, "To see our customers respond so enthusiastically to our merchandise and in-store experience during the fourth quarter was very energizing for all of us at Pier 1 Imports. "We have confidence that if we concentrate on developing powerful assortments that speak to our customer base and further enhance our customer service and in-store presentation, that we will continue making progress in returning our Company to profitability and beyond. I look forward to discussing our opportunities for Fiscal 2009 later this morning on our conference call." About Pier 1 Imports Based in Fort Worth, Texas, Pier 1 Imports Inc. (NYSE: PIR) -- http://www.pier1.com/-- is a specialty retailer of imported decorative home furnishings and gifts. Cash and Cash Equivalents Cash and cash equivalents at March 1, 2008, decreased to $93.4 million from $167.2 million at March 3, 2007. This was primarily due to the net loss from continuing operations of $96.0 million in fiscal 2008. Net cash used in operating activities was $83.1 million for the year ended March 1, 2008. This compares with net cash used in operating activities of $104.9 million in fiscal 2007. Balance Sheet The company reported consolidated assets of $821.9 million, total liabilities of $554.2 million, and total shareholders' equity of $267.7 million at March 1, 2008. * * * As reported in the Troubled Company Reporter on Oct. 31, 2007, Standard & Poor's Ratings Services lowered its ratings on Pier 1 Imports Inc. to 'CCC+' from 'B-' and removed them from CreditWatch, where they had been placed with negative implications on Dec. 19, 2005. The outlook is negative. At the same time, Standard & Poor's withdrew all its ratings on Pier 1 at the company's request. PILGRIM'S PRIDE: Responds to Enforcement Action on Five Facilities ------------------------------------------------------------------ Pilgrim's Pride Corp. issued statements in response to an enforcement action by the U.S. Department of Homeland Security's Immigration and Customs Enforcement division. The Immigration and Customs Enforcement Division took custody of approximately 400 employees of Pilgrim's Pride's facilities in Arkansas, Tennessee, Florida, West Virignia and Texas. These 400 employees comprised 4% of the workforce employed in the said areas. These individuals were engaged in immigration-related crimes including aggravated theft of identity in order to obtain employment with the company. Pilgrim's Pride expressed that they cooperated with the Enforcement Division and the U.S. Attorney's office to apprehend these individuals and that the company notified the federal government about the identity theft situation uncovered by Pilgrim's Pride in Arkansas. No criminal or civil charges were pressed on the company. In relation to this action, the company said, "We share the government's goal of eliminating the hiring or employment of unauthorized workers. We have terminated all of the employees who were taken into custody and will terminate any employee who is found to have engaged in similar misconduct. We are investigating these allegations further. "All of Pilgrim's Pride's U.S. locations, including those visited by ICE, voluntarily participate in E-Verify, which determines employment eligibility for all new hires," the company added. "Pilgrim's Pride has relied on the ICE Best Hiring Practices in designing its immigration compliance program. These practices include participation in E-Verify, prompt attention to Social Security No-Match letters, and retention of outside experts in immigration compliance to ensure that the company is doing all that it can to verify that its employees have work authorization. These practices also require that the company be sensitive to all applicable anti-discrimination laws. "As a company, Pilgrim's Pride continually audits and reviews its processes and procedures to assure continuing compliance with best hiring practices and existing employment law," the company emphasized. "The company provides education and training on proper hiring procedures, fraudulent document detection, use of the E-Verify or Basic Pilot Employment Verification Program, and anti-discrimination procedures. Pilgrim's Pride also conducts internal and third-party audits of I-9 forms and hiring practices on an ongoing basis, and fully investigates any reports of alleged identity theft." About Pilgrim's Pride Headquartered in Pittsburgh, Texas, Pilgrim's Pride Corporation (NYSE: PPC) -- http://www.pilgrimspride.com/-- produces, distributes and markets poultry processed products through retailers, foodservice distributors and restaurants in the U.S., Mexico and in Puerto Rico. Pilgrim's Pride employs about 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. * * * Pilgrim's Pride Corp. holds Moody's Investors Service's B1 senior unsecured credit rating, B2 senior subordinated notes, and Ba3 corporate family ratings. PPC's planned new $250 million senior unsecured notes also bears Moody's B1 rating and its new $200 million senior subordinated notes bears Moody's B2 rating. The outlook on all ratings is stable. Standard & Poor's Ratings Services gave Pilgrim's Pride Corp. a 'BB-' corporate credit rating. PINNACLE POINT: Moody's Slashes A3 Rating to B3 on $14MM Notes -------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Pinnacle Point Funding Ltd.: Class Description: $60,000,000 Class A-1 Notes -- Prior Rating: Aaa -- Current Rating: Baa1, on review for possible downgrade Class Description: $22,000,000 Class A-2 Notes -- Prior Rating: Aa2 -- Current Rating: Baa3, on review for possible downgrade Class Description: $14,000,000 Class B Notes -- Prior Rating: A3 -- Current Rating: B3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $11,000,000 Class C Notes -- Prior Rating: Baa3 -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio, which consists mostly sturctured finance securities. POLYONE CORP: S&P Affirms 'B+' Rating on $80 Mil. Unsecured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' issue rating and '4' recovery rating on PolyOne Corp.'s $80 million issuance of 8.875% unsecured notes due 2012, indicating the expectation for average (30% to 50%) recovery in the event of a payment default. PolyOne will use the proceeds of these notes to pay down a portion of its outstanding debt. The notes are an add-on to PolyOne's 8.875% senior unsecured notes, which the company issued on April 23, 2002. The issue and recovery ratings on PolyOne's 8.875% existing senior unsecured notes and 7.5% unsecured debentures remain unchanged at 'B+' and '4', respectively. PolyOne also has a guarantee and security agreement and several unsecured debt issuances, which S&P do not rate. The corporate credit rating on the company is 'B+' and the outlook is stable. "The ratings on PolyOne reflect a weak business profile, low margins, and a highly leveraged financial profile," said Standard & Poor's credit analyst Paul Kurias. "Partially offsetting factors include the company's leading market positions in several plastic product lines and its integration into chlor-alkali through an affiliate company." POPULAR ABS: Fitch Downgrades Ratings on $94.5MM Certificates ------------------------------------------------------------- Fitch Ratings has taken rating actions on Popular mortgage pass- through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are now removed. Affirmations total $351.4 million and downgrades total $94.5 million. Additionally, $30.0 million was placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Popular ABS, Inc. Mortgage Pass-Through Trust 2005-1 TOTAL -- $11.0 million class AF-3 affirmed at 'AAA', (BL: 96.46, LCR: 5.93); -- $35.0 million class AF-4 affirmed at 'AAA', (BL: 75.29, LCR: 4.63); -- $10.1 million class AF-5 affirmed at 'AAA', (BL: 70.60, LCR: 4.34); -- $15.0 million class AF-6 affirmed at 'AAA', (BL: 70.88, LCR: 4.36); -- $22.7 million class AV-1A affirmed at 'AAA', (BL: 61.22, LCR: 3.76); -- $5.7 million class AV-1B affirmed at 'AAA', (BL: 59.10, LCR: 3.63); -- $6.8 million class AV-2 affirmed at 'AAA', (BL: 59.19, LCR: 3.64); -- $44.1 million class M-1 affirmed at 'AA', (BL: 38.01, LCR: 2.34); -- $34.4 million class M-2 affirmed at 'A', (BL: 26.35, LCR: 1.62); -- $9.7 million class M-3 downgraded to 'BBB' from 'A-', placed on Rating Watch Negative (BL: 23.32, LCR: 1.43); -- $9.1 million class M-4 downgraded to 'BB' from 'BBB+', placed on Rating Watch Negative (BL: 20.64, LCR: 1.27); -- $6.2 million class B-1 downgraded to 'BB' from 'BBB', placed on Rating Watch Negative (BL: 16.75, LCR: 1.03); -- $5.0 million class B-2 downgraded to 'BB' from 'BBB-', placed on Rating Watch Negative (BL: 17.48, LCR: 1.07); -- $5.5 million class B-3 affirmed at 'BB+', (BL: 19.39, LCR: 1.19); Deal Summary -- Originators: Popular (100%) -- 60+ day Delinquency: 13.05% -- Realized Losses to date (% of Original Balance): 1.11% -- Expected Remaining Losses (% of Current balance): 16.27% -- Cumulative Expected Losses (% of Original Balance): 7.36% Popular ABS Mortgage Pass Through Trust 2005-2 TOTAL -- $32.3 million class AF-3 affirmed at 'AAA', (BL: 68.92, LCR: 4.58); -- $30.6 million class AF-4 affirmed at 'AAA', (BL: 57.46, LCR: 3.81); -- $11.5 million class AF-5 affirmed at 'AAA', (BL: 55.43, LCR: 3.68); -- $13.0 million class AF-6 affirmed at 'AAA', (BL: 55.66, LCR: 3.69); -- $25.1 million class AV-1A affirmed at 'AAA', (BL: 53.21, LCR: 3.53); -- $6.3 million class AV-1B affirmed at 'AAA', (BL: 50.01, LCR: 3.32); -- $10.8 million class AV-2 affirmed at 'AAA', (BL: 50.13, LCR: 3.33); -- $37.1 million class M-1 affirmed at 'AA', (BL: 35.10, LCR: 2.33); -- $27.6 million class M-2 downgraded to 'BBB' from 'A' (BL: 24.21, LCR: 1.61); -- $4.8 million class M-3 downgraded to 'BB' from 'A-' (BL: 22.35, LCR: 1.48); -- $7.4 million class M-4 downgraded to 'BB' from 'BBB+' (BL: 19.57, LCR: 1.3); -- $4.2 million class M-5 downgraded to 'B' from 'BBB' (BL: 18.08, LCR: 1.2); -- $6.1 million class M-6 downgraded to 'B' from 'BBB-' (BL: 16.00, LCR: 1.06); -- $6.4 million class B-1 downgraded to 'CCC' from 'BB+' (BL: 11.57, LCR: 0.77); -- $5.8 million class B-2 downgraded to 'CCC' from 'BB' (BL: 11.90, LCR: 0.79); -- $2.3 million class B-3 downgraded to 'CCC' from 'BB-' (BL: 13.81, LCR: 0.92); Deal Summary -- Originators: Popular (100%) -- 60+ day Delinquency: 10.75% -- Realized Losses to date (% of Original Balance): 0.93% -- Expected Remaining Losses (% of Current balance): 15.06% -- Cumulative Expected Losses (% of Original Balance): 7.84% The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and 2005 with regard to continued poor loan performance and home price weakness. POWERMATE HOLDING: U.S. Trustee Appoints 7-Member Creditors Panel ----------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, has appointed these seven creditors to the Official Committee of Unsecured Creditors in Powermate Holding Corp. and its debtor- affiliates' bankruptcy cases, pursuant to Section 1102(a)(1) of the Bankruptcy Code: 1. Robin America Attn: Jay H. Peck 940 Lively Boulevard Wood Dale, IL 60191 Tel: (630) 350-8200 Fax: (630) 350-8212 2. Sumec Machinery & Electric Co., Ltd. Attn: Peng Yuan Pu 198 Changjiang Road Nanjing, China Tel: (86) 025-84531736 Fax: (86) 025-84415642 3. American Honda Motor Co., Inc. Attn: Philip D. Scheer 1919 Torrance Blvd. Torrance, CA 90501 Tel: (310) 783-2290 Fax: (310) 787-3993 4. Zhejiang Xinlei Mechanical & Electrical Co., Ltd. Attn: Guan Dan Ying Xinlei Industrial Zone Ze Quo Wenling, Zhejiang, China Tel: (86) 576-36985939 Fax: (86) 576-86425199 5. Ningbo Alton Mechanical & Electrical Co. Attn: Weidong Lu c/o Alton Indus. 1031 N. Raddant Road Bataria, IL 60510 Tel: (630) 389-1032 Fax: (630) 389-1037 6. Briggs & Stratton Corporation Attn: James E. Brenn PO Box 702 Tel: (414) 259-5855 Fax: (414) 259-5773 7. China Export & Credit Insurance Corporation Attn: Cheng Jiamin Fortune Times Building, No. 11 Fenghuiyuan, Xicheng District Beijing P.R. China Tel: (86) 10-66582627 Fax: (86) 10-66516857 To contact the United States Trustee: Richard L. Schepacarter, Esq. Tel: (302) 573-6491 Fax: (302) 573-6497 About Powermate Holding Headquartered in Aurora, Illinois, Powermate Holding Corp. -- http://www.powermate.com/-- manufacturers portable and home standby generators, air compressors, and pressure washers. The company and two of its affiliates filed for Chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Kenneth J. Enos, Esq.. and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors. When the Debtors filed for protection against their creditors, they listed assets and debt between $50 million to $100 million. PRC LLC: Seeks May 8 Hearing to Consider Disclosure Statement ------------------------------------------------------------- PRC LLC and its debtor-affiliates asked the Honorable Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to convene a hearing on May 8, 2008, to consider approval of the Disclosure Statement explaining their Joint Plan of Reorganization dated April 1, 2008. Any party-in-interest who opposes the Disclosure Statement may file a formal objection no later than May 1, 2008. Any Disclosure Statement Objection should be filed in writing in the English language, stating (i) the name and address of objecting party, (ii) the amount and nature of the party's claim or interest, and (iii) the basis and nature of the objection to the Disclosure Statement. The Debtors also urged the Court to set a hearing for the confirmation of the Plan on June 19, 2008. Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in Houston, Texas, asserted that the Debtors' Disclosure Statement provides "adequate information" regarding the Debtors' Plan pursuant to Section 1125 of the Bankruptcy Code. Mr. Perez maintained that the Disclosure Statement contains, among others, a discussion of an overview of the Plan, the operation of the Debtors' businesses, the Debtors' indebtedness, and information regarding pending claims and administrative expenses. The Debtors informed the Court that on April 10, 2008, they provided a copy of the Disclosure Statement to (i) the U.S. Trustee; (ii) the SEC; (iii) the attorneys for the Official Committee of Unsecured Creditors; and (iv) all other parties-in- interest. Solicitation Package The Debtors proposed to mail solicitation packages no later than May 15, 2008, to the Voting Classes of creditors. They include creditors holding Class 4 Allowed Prepetition First Lien Claims, Class 5 Allowed Prepetition Second Lien Claims, Class 6A General Unsecured Claims, and Class 6B Convenience Claims. The Solicitation Package will consist of: (a) the Disclosure Statement Order; (b) the Confirmation Hearing Notice; (c) the appropriate form of ballot to accept or reject the Plan, in substantially the forms prescribed in the Disclosure Statement Order, with instructions and with a return envelope; (d) the Disclosure Statement, together with the Plan; and (e) other materials as the Court may direct. Solicitation Packages distributed to holders of claims and interests in the unimpaired classes or a non-voting impaired class will contain a copy of (i) the Confirmation Hearing Notice and (ii) a Notice of Non-Voting Status. The Debtors will also serve these parties a copy of the Disclosure Statement Order, the Confirmation Hearing Notice, the Disclosure Statement and other materials as the Court may direct to: * the U.S. Trustee; * the attorneys for the Creditors' Committee; * the Securities and Exchange Commission; * the District Director; * all persons or entities listed in the Schedules; * parties entitled to notice pursuant to the Court\u2019s Case Management Order; and * any other known holders of claims against or equity interests in the Debtors. Voting Record Date Pursuant to Rule 3017(d) of the Federal Rules of Bankruptcy Procedures, the Debtors ask the Court to set May 8, 2008, as the Voting Record Date for purposes of determining which creditors are entitled to vote on the Plan. Ballots & Voting Deadline The Debtors proposed to distribute ballots based on Official Form No. 14, modified to include certain additional appropriate and relevant information for the Voting Class, to creditors in classes entitled to vote on the Plan. The Debtors further proposed that each Ballot must be properly executed, completed, and delivered to Epiq Bankruptcy Solutions, LLC, as the Debtors' voting and tabulation agent no later than 4:00 p.m. on June 9, 2008, by by first-class mail, overnight courier, or hand delivery. Any Ballot that is (i) received after the Voting Deadline, (ii) illegible or contains insufficient information to permit identification of the claimant, (iii) cast by a person or entity that holds a non-voting claim, (iv) unsigned, (v) transmitted to Epiq by facsimile or other means will not be considered valid ballots. Tabulation & Voting Procedures For purposes of voting, each claim within a class of claims entitled to vote to accept or reject the Plan may be temporarily allowed in an amount equal to the amount of the claim as set forth in the Schedules. If any creditor seeks to challenge the allowance of its claim for voting purposes, that creditor may seek to have its claim temporarily allowed in a different amount pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure by filing a motion in Court. The last ballot cast by a voting creditor that is received before the Voting Deadline be deemed to reflect the voter's intent, and thus, to supersede any prior Ballots. Whenever a creditor casts a Ballot that is properly completed, executed, and timely returned to Epiq, but does not indicate either an acceptance or rejection of the Plan, that Ballot will be deemed to reflect the voter's intent to accept the Plan. Whenever a creditor casts a Ballot that is properly completed, executed, and timely returned to Epiq, but indicates both an acceptance and a rejection of the Plan, that Ballot will be deemed to reflect the voter's intent to accept the Plan. Confirmation Objections Any response or objection to the approval of the Plan must be filed with the Court by June 12. The Debtors intend to serve replies to any confirmation objections no later than June 17. Any confirmation objection must be: -- filed in writing with the Court; -- state the nature of the objection or response and its legal basis; and -- be served upon the Debtors' counsels, the U.S. Trustee, and other professionals retained by the Debtors including Chadbourne & Park LLP, Bingham McCutchen LLP, Blank Rome LLP, and Paul, Weiss, Rifkind, Wharton & Garrison LLP. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRIMUS TELECOM: Values Reassessment Prompts Moody's to Cut Rating ----------------------------------------------------------------- Moody's Investors Service downgraded Primus Telecommunications Group, Incorporated's corporate family rating to Ca from Caa3. At the same time, a speculative grade liquidity rating of SGL-3, indicating adequate liquidity, was assigned. The background to the CFR and SGL ratings warrants maintenance of the prevailing negative outlook. The CFR downgrade was prompted by a reassessment of potential recovery values in the event of a default. As Primus continues to transform to a facilities-based business model from that of telecommunications services re-seller, sales/marketing and capital spending are likely to be significant. While progress is evident on some fronts, Primus has been, and is expected to continue to be, cash flow negative. This will erode the company's cash position, its only source of liquidity. In the absence of reversing this tide prior to an August 2009 debt maturity, the probability of default is quite significant. Moody's estimated probability of default rate for Primus remains unchanged at Caa3. However, given recent debt-for-debt exchange activity and given a relative lack of underlying hard assets, applicable recovery prospects have been revised downwards to an estimated 20%. With the CFR being an expression of expected loss, and being a function of the relationship between the PDR and the recovery rate, the revised parameters result in the EL being downgraded to the Ca level. Application of Moody's Loss Given Default methodology also resulted in ratings for individual instruments also being adjusted/downgraded. The SGL-3 rating is based primarily on the observation that the company's $81 million cash position should be sufficient to compensate for cash consumption over the forward looking four quarter SGL rating horizon. It should be noted, however, given the company's investment needs and the significant potential of stringent payment terms for goods and services, that cash flow may be quite volatile. Consequently, while it appears that the company should have sufficient resources to operate for the next four to six quarters, unexpected contingencies may accelerate depletion of cash reserves. In any case, with the passage of time and as the August 2009 maturity moves into the rating horizon, it is likely that the SGL rating will migrate to SGL-4 (indicating poor liquidity) unless Primus is successful in selling assets to generate additional cash flow (while the company has announced this intention, the eventuality is not accounted for in Moody's SGL rating methodology). Downgrades: Issuer: Primus Telecommunications Group, Incorporated -- Corporate Family Rating, Downgraded to Ca from Caa3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to C (LGD6, 100) from Ca (LGD5, 87) Issuer: Primus Telecommunications Holding, Inc. -- Senior Secured Bank Credit Facility, Downgraded to Caa3 (LGD4, 57) from Caa2 (LGD3, 37) -- Senior Unsecured Regular Bond/Debenture, Downgraded to Ca (LGD6, 97) from Caa3 (LGD3, 45) Assignments: Issuer: Primus Telecommunications Group, Incorporated -- Speculative Grade Liquidity Rating, Assigned SGL-3 Primus is a competitive telecom provider headquartered in McLean, Virginia. The company offers telecommunications services to small and medium-sized enterprises, residential customers and other telecommunications carriers and resellers located in the United States, Australia, Canada, the United Kingdom and Western Europe. PROTOCALL TECH: To Restate Financial Statements to Correct Errors ----------------------------------------------------------------- Protocall Technologies Incorporated disclosed in a regulatory filing with the Securities and Exchange Commission Friday that the company will restate previously issued financial statements included in Forms 10QSB for the quarters ended March 31, 2007, June 30, 2007, and Sept. 30, 2007. The restatement adjustments are needed primarily to correct the company's historical accounting in connection with the issuance of warrants in private placements during the quarters ended March 31, 2007, and June 30, 2007, as well as to correct the accounting for conversions of convertible notes during the quarters ended June 30, 2007, and Sept. 30, 2007. Marcum & Kliegman LLP, the company's independent registered public accounting firm commencing Feb. 14, 2008, while performing procedures in connection with its audit of the company's Dec. 31, 2007 financial statements, advised the company on April 2 and 3, 2008, that they believed there may have been two errors: -- the company should have recorded the fair value of the derivative warrants in excess of the cash received in the private placement of common stock and warrants as a charge to net income in the Statement of Operations. Previously the excess fair value was included in additional paid in capital in the quarter ended March 31, 2007, and as a deemed dividend in the quarter ended June 30, 2007. -- additionally, the company is correcting the accounting to reclassify the fair value of the derivative conversion option liability upon a debt conversion to additional paid in capital and any unaccreted discount associated with the conversion to interest expense. Previously interest expense was not recorded in the quarter ended June 30, 2007, and there was as an error in the amount of fair value reclassified to additional paid in capital in the quarter ended Sept. 30, 2007. The company's Form 10-KSB for the year ended Dec. 31, 2007, will reflect the necessary adjustments for the period then ended and footnote disclosure of the effects on each of the restated quarterly periods. Additionally, the company expects to file amendments to each of their 2007 Forms 10QSB with or before the company's Form 10-KSB is filed. About Protocall Technologies Based in Commack, New York, Protocall Technologies Incorporated (OTC BB: PCLI.OB) -- http://www.protocall.com/-- develops the TitleMatch DVD on-demand service. The TitleMatch DVD on-demand service, which is marketed exclusively through Protocall's wholly owned TitleMatch(TM) Entertainment Group division, allows retailers to burn brand name CD and DVD products at their stores and website distribution centers. The company's proprietary systems enable retailers to reduce their reliance on costly physical inventory, expand their selection of products, eliminate shrinkage and out-of-stock situations, speed time to market for new products and improve their operating margins with minimal space requirements. * * * Eisner LLP, in New York, expressed substantial doubt about Protocall Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm said that the company has incurred significant losses since inception, has a working capital deficiency and stockholders' deficiency and has been dependent upon funds generated from the sale of common stock and loans. PRUDENTIAL COMMERCIAL: Fitch Affirms 'B' Rating on $3.6MM Certs. ---------------------------------------------------------------- Fitch Ratings has upgraded Prudential Commercial Mortgage Trust commercial mortgage pass-through certificates, series 2003-PWR1, as: -- $14.4 million class D to 'AA+' from 'AA'; -- $9.6 million class E to 'AA' from 'AA-'; -- $10.8 million class F to 'A+' from 'A'; -- $12 million class G to 'A' from 'A-'. In addition, Fitch affirmed these classes: -- $129.6 million class A-1 at 'AAA'; -- $518.2 million class A-2 at 'AAA'; -- Interest only class X-1 at 'AAA'; -- Interest only class X-2 at 'AAA'; -- $32.4 million class B at 'AAA' -- $36 million class C at 'AAA'; -- $16.8 million class H at 'BBB'; -- $7.2 million class J at 'BBB-'; -- $4.8 million class K at 'BBB-'; -- $7.2 million class L at 'BB'; -- $3.6 million class M at 'B+'; -- $3.6 million class N at 'B'. Fitch does not rate the $14.4 million class P certificates. The upgrades reflect increased credit enhancement due to loan payoffs, scheduled amortization, as well as the additional defeasance of four loans since Fitch's last rating action. As of the March 2008 distribution date, the pool's aggregate certificate balance has decreased 14.5% to $820.7 million from $960 million at issuance. Fifteen loans are defeased (21.1%) and there are currently no specially serviced loans. Fitch has identified four loans of concern (4.3%). The largest loan of concern (2.8%) is a full-service hotel located in the French Quarter area of New Orleans, Louisiana. The property underwent renovations after the hotel had experienced damage due to Hurricane Katrina. The loan is current. 1290 Avenue of the Americas (9.6%) is the only remaining non- defeased shadow rated loan. The loan is secured by an approximately 2 million square foot office building, located in midtown Manhattan. Occupancy at the property is 100% as of September 2007 with approximately 6% of the leases scheduled to expire in 2008. Based on its stable performance, the loan maintains an investment-grade shadow rating. There are no loans scheduled to mature in 2008 and 5.9% are scheduled to mature in 2009. The majority of the remaining pool (80.3%) matures in 2013. QUALITY DISTRIBUTION: Cuts Florida Workforce by Approximately 17% ----------------------------------------------------------------- Quality Distribution Inc. has reduced its workforce. Most of the reductions occurred at the company's Tampa, Florida headquarters where approximately 17% of the positions were eliminated. The company eliminated approximately 60 positions and expects a reduction in payroll related cost in excess of $5 million dollars annually. In conjunction with this action, the company will take a pre-tax charge for severance related costs of approximately $1.5 million in the second quarter. "This was a very difficult decision, but one that was necessary in light of our recent financial performance," Gary Enzor, chief executive officer stated. "We made these reductions while giving full consideration to ensuring that we maintain our commitment to the highest standards for customer service and compliance." "In addition to the announced staff reductions, we are focused on further cost reductions driven via procurement, increased loaded ratio and improved productivity," Mr. Enzor added. "While our recent profitability has been below our expectations, we made these changes to strengthen our market leading position and we remain committed to both top and bottom line growth." "We believe we have the access to capital necessary to not only weather the current economic cycle, but also to pursue our growth plans," Mr. Enzor continued. "With the December 2007 refinancing of our Senior Credit Facility, the company had in excess of $50 million available borrowing capacity at the end of the quarter, a greater level of availability than at any time in our history." The company also stated that first quarter revenues excluding fuel surcharge were approximately $177 million, an 11% increase over last year. Excluding the impact of the company's acquisition of Boasso, which closed in December of 2007, revenue for the quarter was flat with last year, as it continued to be impacted by the softness in the housing markets as well as 10% fewer work days in March this year as compared to last March. About Quality Distribution Inc. Headquartered in Tampa, Florida, Quality Distribution Inc., through its subsidiaries, Quality Carriers Inc. and Boasso America Corporation, and through its affiliates and owner-operators, provides bulk transportation and related services. QDI also provides tank cleaning services to the bulk transportation industry through its QualaWash(R) facilities. RENAISSANCE HOME: Moody's Cuts Ratings to Ba3 on Two Certificates ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of four tranches issued in two transactions from the Renaissance Home Equity Loan Trust 2005 shelf. The collateral backing each tranche consists primarily of first lien adjustable-rate and fixed-rate subprime mortgage loans. The deals being reviewed have experienced an increasing proportion of severely delinquent loans. Timing of losses and pending stepdown will cause the protection available to the subordinated bonds to be diminished. Complete rating actions are: Issuer: Renaissance Home Equity Loan Trust 2005-1 -- Cl. M-8, downgraded from Baa2 to Ba1 -- Cl. M-9, downgraded from Baa3 to Ba3 Issuer: Renaissance Home Equity Loan Trust 2005-2 -- Cl. M-8, downgraded from Baa2 to Ba1 -- Cl. M-9, downgraded from Baa3 to Ba3 RITE AID: Extends Consent Solicitation for 8.125% and 7.5% Notes ---------------------------------------------------------------- Rite Aid Corporation extended its solicitation of consents to amend the terms of the indentures for its 8.125% senior secured notes due 2010 and its 7.5% senior secured notes due 2015. The consent solicitation will expire at 5:00 p.m., New York City time, on April 18, 2008, unless further extended by Rite Aid Corporation with respect to either or both series of notes. Rite Aid Corporations obligations to accept consents and pay a consent fee is conditioned on the receipt of consents to the amendments from holders of at least a majority in aggregate principal amount of both series of notes as set in the Consent Solicitation Statement. Notwithstanding the changes to withdrawal rights set in the company's announcement on April 2, 2008, under certain circumstances where the requisite consents with respect to a series of notes are obtained, withdrawal rights of the holders of that series of notes may expire prior to the expiration time, as set in the Consent Solicitation Statement dated March 17, 2008. About Rite Aid Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * As reported by the Troubled company Reporter on Jan. 14, 2008, Standard & Poor's Ratings Services revised the outlook on chain drug retailer Rite Aid Corp. to negative from stable. At the same time, S&P affirmed the 'B' corporate credit rating on the Harrisburg, Pennsylvania-based company. RITE AID: Shareholder Thornburg Investment Declares 10.22% Stake ---------------------------------------------------------------- In a form SC 13G filed with the Securities and Exchange Commission, Thornburg Investment Management Inc. disclosed that it owns 81.2 million shares, representing 10.22% of Rite Aid Corp. common stock. Thornburg Investment Management Inc. is an employee-owned investment management company based in Santa Fe, New Mexico, with assets under management of $52 billion (as of March 31, 2008). Founded in 1982, the firm manages six equity funds, eight bond funds, and separate portfolios for select institutions and individuals. Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * Rite Aid Corp. continues to carry Standard & Poor's Ratings Services 'B' long term foreign and local issuer credit ratings which were placed on May 8, 2007. RHODES COS: S&P Cuts CCC+ Rating to CCC on Liquidity Constraints ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Rhodes Cos. LLC to 'CCC' from 'CCC+'. Additionally, S&P lowered its ratings on the company's first- and second-lien term loans. All of the ratings remain on CreditWatch, where they were placed with negative implications on Feb. 22, 2008. "The downgrade acknowledges severe liquidity constraints as this undercapitalized, privately held homebuilder continues to contend with extremely challenging conditions in its primary Las Vegas housing markets," said credit analyst James Fielding. "We do not expect revenues, which declined materially in 2007, to improve in 2008. Additionally, the value of Rhodes' real estate holdings has eroded, compelling the company to seek relief under the financial covenants governing its secured term loans." The ratings will remain on CreditWatch pending the resolution of covenant negotiations. If the company successfully amends its financial covenants, S&P would most likely affirm the current ratings and remove them from CreditWatch. At that time, S&P would assign a negative outlook. Conversely, if covenant issues are not resolved in a timely and satisfactory manner, S&P would lower the ratings further. SHARPER IMAGE: Levin Resigns from Board, Wants to Acquire Assets ---------------------------------------------------------------- Jerry W. Levin, the Chairman of the Board of Sharper Image Corporation, informed the Company on April 10, 2008, that he is interested in participating with other investors to acquire some or all of the Company's businesses or assets. Accordingly, Mr. Levin stepped down as a member and Chairman of the Board of Directors effective immediately. Mr. Levin served as chairman of Sharper Image since Sept. 2006, and later stepped in temporarily as chief executive after the retailer let go of its 1977 founder, Richard Thalheimer, reports Forbes.com. Robert Conway, the recently appointed Chief Executive Officer of the Company, stated that the Company would "give full consideration to any proposal that may be made to acquire the Company's business or assets." The Company stated that there can be no assurances that such a proposal will be forthcoming. The Associated Press says it's unclear how much Sharper Image or parts of it could fetch from a Levin-led consortium or other private buyer. About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. The Court agreed to extend the Debtor's time to file schedules of assets and liabilities, executory contracts and unexpired leases and statements of financial affairs until April 4, 2008. The Debtor asked the Court to further extend the deadline to May 2, 2008. An Official Committee of UnsecuredCreditors has been appointed in the case. When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. SHARPER IMAGE: Asks Court to Extend Schedules Filing Date to May 2 ------------------------------------------------------------------ Sharper Image Corp. asked the U.S. Bankruptcy to further extend the Debtor's time to file schedules of assets and liabilities, executory contracts and unexpired leases and statements of financial affairs until May 2, 2008. As reported by the Troubled Company Reporter on Feb. 29, 2008, the United States Bankruptcy Court for the District of Delaware granted a request by the Debtor to extend a deadline for the Debtor to submit Schedules for an additional 15 days, or until April 4, 2008. However, the Debtor believes that although its employees are doing what they can to gather, review, and analyze the information necessary to complete the Schedules, the process requires the expenditure of substantial time and effort. Furthermore, besides preparing the Schedules, the Debtor's employees also need to address other more pressing matters which require immediate and substantial attention, Steven K. Kortanek, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware, tells the Court. The Debtor relates that the time required to perform these tasks limited the amount of time the employees were able to commit to preparing the Schedules. Nevertheless, despite these time constrains, substantial progress were made in compiling the Schedules, Mr. Kortanek says. Accordingly, the Debtor asks the Court to further extend the deadline to May 2, 2008, so that it can accurately finalize the Schedules and file them in an expeditious but organized manner. Judge Kevin Gross will convene a hearing on April 23, 2008, at 10:00 a.m., to consider the Debtor's request. Pursuant to Del.Bankr.LR 9006-2, the Debtors' request to extend the time to file schedule and statements of financial affairs is automatically extended until the conclusion of that hearing. About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Steven K. Kortanek, Esq. at Womble, Carlyle, Sandridge & Rice, P.L.L.C. represents the Debtor in its restructuring efforts. An Official Committee of UnsecuredCreditors has been appointed in the case. When the Debtor filed for bankruptcy, it listed total assets of US$251,500,000 and total debts of US$199,000,000. SIRVA INC: More Parties Object to Joint Plan of Reorganization -------------------------------------------------------------- Nine parties-in-interest filed objections to the Prepackaged Joint Plan of Reorganization and the accompanying Disclosure Statement of Sirva Inc. and its debtor-affiliates. 1. GLB Bridgewater GLB Bridgewater, LLC, landlord under a Lease Agreement with Debtors SIRVA Relocation, LLC,and SIRVA Worldwide, Inc., objects to confirmation of the Debtors' Plan. GLB holds a claim for $166,200 as a result of the rejection of the lease. Representing GLB, Anthony Sodono III, Esq., at Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C., in West Orange, New Jersey, states that the Plan violates Section 1129(b)(1) of the Bankruptcy Code because the Debtors fail to articulate a legitimate basis for "gerrymandering" the claims of similarly situated unsecured creditors. Mr. Sodono points out that the Debtors have divided unsecured claims into two classes based on post-confirmation business relations -- those that the reorganized Debtors intend to continue to do business with, and those that they no longer need. He argues that a plan of reorganization should not be confirmed if it provides substantially different treatment to similarly situated claimants, absent a legitimate basis for doing so. The Debtors' Plan lacks any good faith basis to separately classify unsecured creditors' claims, he maintains. 2. ACE Group of Companies ACE American Insurance Company, Illinois Union Insurance Company, Indemnity Insurance Company of North America, Insurance Company of North America, Westchester Surplus Lines Insurance Company, and other members of the ACE Group of Companies, complain that the Disclosure Statement fails to provide information sufficient for ACE to make an informed decision regarding the treatment of the the Debtors' insurance policies. ACE issues various insurance policies to the Debtors from 1995 through the present, including, but are not limited to, agreements for storage tank liability, marine cargo, excess liability and workers compensation, Karel S. Karpe, Esq., at White and Williams LLP in New York, relates. According to Ms. Karpe, the proposed Plan indicates that the Debtors seek to obtain the benefit of the ACE Policies but does not provide for the performance of the Debtors' obligations under those policies. ACE insists that the Disclosure Statement should not be approved and the Plan should not be confirmed unless the Debtors append these terms to the Plan: * to the extent the ACE Policies are executory, the Plan constitutes a motion to assume the ACE Policies as set forth in Article V of the Plan; * to the extent the ACE Policies are not considered executory, they will be reinstated; and * beginning on the Effective Date, the Reorganized Debtors will perform the insureds' obligations under the ACE Policies going forward, including, without limitation the payment of any audited or additional premiums, deductibles, and/or self-insured retentions and/or the performance of the insureds' obligations to provide notice and cooperation. 3. IFL Industries and William D. Olson IFL Industries, Inc., also known as Airquest Industries, Inc., and Wiliam D. Olson, filed a supplemental objection to the Plan and Disclosure Statement stating that the Plan fails to meet the requirements of the Bankruptcy Code. Barry G. Reed, Esq., at Zimmerman Reed, PLLP, in Scottsdale, Arizona, tells Judge James M. Peck of the U.S. Bankruptcy Court for the Southern District of New York that the Plan permits the Debtors to walk away from one class of unsecured creditors while preserving their interests and the interests of favored creditors through the preservation of favored unsecured and intercompany creditors. In effect, the Court becomes a "dumping ground for creditors who are no longer useful," while the Debtors protect one another and the secured creditors, Mr. Reed says. Additionally, Mr. Reed insists that the proposed corporate consolidation is only to make it appear as a "reorganization" when it merely eliminates the inconvenience of having unwanted unsecured creditors. Mr. Reed states that IFL Industries and Mr. Olson's litigation claims involve post-billing kickback payments to builders of display exhibits. One of the key Debtor entities has been paying illegal kickbacks to obtain the transportation business, including those display exhibits, he says. The payments are blatantly unlawful, Mr. Reed contends, and their possible nondisclosure is potentially harmful to the viability of the postpetition entity proposed under the Plan. The Plan's failure to disclose or address those potentially disastrous consequences makes its Disclosure Statement misleading and the Plan itself unsustainable, he adds. 4. Creditors' Committee The Official Committee of Unsecured Creditors filed a supplement to its objection to the Plan stating that the claims classification system is "farcical" and has no legal basis. Brad R. Godshall, Esq., at Pachulski Stang Ziehl & Jones LLP, in New York, states that the Debtors have attempted to shuffle similarly situated creditors back and forth between the classes, violating Section 1122. In addition, the Committee asserts, even if the classification system in the Plan was permissible, the discrimination in treatment between the claims of identically situated general unsecured creditors "runs afoul of the equality of treatment principles fundamental to the Chapter 11 process." The Plan also violates the best interests of creditors test because there are unencumbered assets with substantial value that would be available to the holders of at least some Class 5 Claims but the Plan provisions pays nothing on those claims, Mr. Godshall argues. The substantive consolidation sought in the Plan has no legitimate justification, Mr. Godshall further asserts. The Debtors contend that substantive consolidation is required because their intercompany accounts are "hopelessly commingled" and cannot be reconstructed. According to the Committee, this contention is a pretext -- the condition of the Debtors' intercompany accounts is an irrelevancy under the Plan and the real purpose of the substantive consolidation appears to be: (a) to assist the Debtors in addressing absolute priority rule problems; and (b) to create a consenting impaired class as to those Debtors that were not obligated on the prepetition credit facility. 5. Class Action Antitrust Plaintiffs Donald J. Beach, Scott Hansen, Jeffrey L. Stoloff, Burnetta Nimons, Thomas Scholtens, and Natalie Hutt, as members of a class of plaintiffs in an antitrust action against certain moving companies including Debtors SIRVA, Inc., SIRVA Worldwide, Inc., North American Van Lines, Inc., and Allied Van Lines, Inc., pending before the U.S. District Court for the District of South Carolina, Charleston Division, tell the U.S. Bankruptcy Court for the Southern District of New York that they support the Committee's objections to the Plan. The Antitrust Plaintiffs believe that the Plan: (a) through its division of unsecured creditors, generates accepting, unimpaired status for all claims except for Class 5, which is deemed to reject the Plan; (b) unfairly discriminates against Class 5 by placing unsecured claims in a class separate from Classes 4 and 6, impairing them to the maximum extent possible; (c) is not fair and equitable to Class 5 in that claims of the same priority are paid in full while Class 5 receives nothing; and (d) notice is constitutionally defective in that the Debtors have not given actual notice to the members of the Class Action Antitrust Plaintiff's class. 6. The OOIDA Class The Owner Operator Independent Drivers Association Class states that the Debtors have improperly treated its $5,000,000 undisputed and unliquidated claim as a Class 5 claim. According to Daniel E. Cohen, Esq., at The Cullen Law Firm PLLC in Washington, D.C., the Debtors' attempt to categorize the OOIDA Class as a Class 5 creditor is unjustifiable under the criteria of the Plan. He adds that it is also impermissible under the Bankruptcy Code since, by the Debtors' own admissions, owner operators are substantially similar to Class 4 Creditors and substantially different from Class 5 Creditors. 7. Triple Net Investments Triple Net Investments IX, LP, objects to the Plan and its accompanying Disclosure Statement arguing that there is no disclosure concerning the facts of any preference or avoidance actions and no factual analysis or valuation concerning potential causes of action. Robert E. Nies, Esq., at Wolff & Samson PC, in New York, maintains that the structure of the Plan is designed to afford grossly disparate treatment to similarly situated claimants to preserve value for one class of equity, intercompany affiliates, and to save the Debtors' prepetition lenders millions of dollars. He notes that Class 4 unsecured claims are paid in full while Class 5 unsecured claims receive nothing. Triple Net asserts that the Plan should not be confirmed because: (a) it sanctions the unfair, unnecessary, and illegal release of valuable creditors' rights being granted to non-debtor third parties; (b) it relies on the manipulation of voting rights through an unlawful classification scheme; (c) it unequally treats claims of equal priority claims; (d) it uses substantive consolidation to target certain unsecured creditors to receive zero distribution; (e) it sanctions the wholesale abandonment of a critical vendor concept in favor of the Debtors' discretion to pay claims; (f) it permits the Prepetition Lenders to settle substantial avoidance actions without supervision of the Bankruptcy Court; (g) it assures prepetition management's acquiescence by granting management retention incentives; and (h) it rewards the wholesale manipulation of the financial affairs of the Debtors. 8. 360networks Committee The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of 360networks (USA) Inc., and its debtor- subsidiaries tell the Bankruptcy Court that the Plan is "one of the most outrageous and patently improper maneuvers ever attempted in a Chapter 11 case," since it provides for preferred unsecured creditors to receive full payment of their claims while other disfavored unsecured creditors are to receive no distributions with respect to their claims. Additionally, the Debtors' decisions regarding who will be paid in full and who will receive nothing were "arbitrary at best" and did not comport with their own stated criteria, Norman N. Kinel, Esq., at Dreier LLP, in New York, asserts. Mr. Kinel states that the proposed distribution scheme is both grossly unfair and unprecedented and violates numerous provisions of the Bankruptcy Code. The Plan's proposed substantive consolidation is also extremely prejudicial since it dilutes amounts potentially available to the 360networks Committee and other creditors, Mr. Kinel further says. Accordingly, the Plan cannot be confirmed, the 360networks Committee asserts. 9. Accretive Solutions Accretive Solutions-Houston, LP, objects to the Plan asserting that it impermissibly classifies unsecured claims and unfairly discriminates against Class 5 claimants. Accretive adds that the treatment of retained causes of action unfairly discriminates against certain Class 5 claimants. Accretive Solutions relates that it did not file an initial objection prior to the original objection deadline since it is not listed on the Rule 2002 Notice List established in the Debtors' Chapter 11 cases nor on the Debtors' mailing matrix filed with the Clerk of Court, but, was instead included in SIRVA, Inc.'s Schedules of Assets and Liabilities. Accretive Solutions thus seeks leave from the Court to file its objection. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The combined hearing on the adequacy of the disclosure statement and the confirmation of the Debtors' proposed Plan of Reorganization is set April 18, 2008. (Sirva Inc. Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SOLO CUP: Successful Mgmt. Turnaround Cues S&P to Lift Rtng. to B- ------------------------------------------------------------------ Standard & Poor's Ratings Services raised all its ratings on Solo Cup Co. by one notch and removed them from CreditWatch where they had been placed with positive implications on Oct. 24, 2007. The corporate credit rating was raised to 'B-' from 'CCC+'. The outlook is stable. At the same time, S&P assigned a recovery rating of '6' to the company's subordinated debt. The 'CCC' subordinated debt rating and recovery rating of '6' indicate S&P's expectations for negligible (0% to 10%) recovery for subordinated debtholders in a payment default. "The upgrade reflects management's successful turnaround of operations via various initiatives and significant debt reduction with asset sale proceeds," said Standard & Poor's credit analyst Cynthia Werneth. Importantly, S&P believe that with improving operating performance and continued modest debt reduction, the company has a reasonable chance of remaining in compliance with increasingly restrictive covenants in its bank credit facilities during the next several quarters. S&P also note that the improving financial trends are likely to facilitate a more favorable renegotiation of these covenants, if necessary. At Dec. 30, 2007, total adjusted debt was about $965 million. S&P adjust debt to include about $200 million of capitalized operating leases and $10 million of after-tax unfunded postretirement liabilities. Although debt leverage has declined, it remains aggressive, above 6x on an adjusted basis. With annual revenues from continuing operations of about $2.1 billion, Highland Park, Illinois-based Solo is one of the largest providers of disposable paper and plastic cups, plates, and cutlery to foodservice distributors, quick-service restaurants, and retailers in the U.S. SOURCE ENTERPRISES: Court Denies Compensation to Former Counsel --------------------------------------------------------------- The Hon. Arthur J. Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York disallowed $526,000 in attorney's fees filed by Windels Marx Lane & Mittendorf as counsel to The Source Enterprises Inc., New York Law Journal's Anthony Lin says. Judge Gonzalez ruled that the law firm put "its own desire . . . above the interest of its client" and denied it "any compensation" saying Windels Marx "caused harm to" Source, Law Journal reports. The judge recounted that there was conflict of interest in the law firm's representation since it also stood as the Debtor's creditor and asked $200,000 payment from Source prior to the filing, Law Journal reveals. Windels Marx calculated that the estate owed it $526,000 for the period September 2006 through February 2007, according to the report. Charles E. Simpson, Esq., at Windels Marx asserted that the $200,000 debt was "waived," based on the report. However, Judge Gonzales found that the law firm did not waive the said amount until it was brought to its attention in November 2007, Law Journal relates. According to the judge, the Debtor was also unaware of the waiver and that Windels Marx sought payment of the $200,000 from the Debtor's affiliates, says the report. Judge Gonzales, Law Journal reports, pointed that Windels Marx demanded payment from investment firm Black Enterprise/Greenwich Street Corporate Growth Partners, which took over Source's operations. The law firm and Black Enterprise agreed to defer the payment until the finalization of the case, Law Journal reveals. These facts, Judge Gonzales said, weren't disclosed by Windels Marx, according to the report. Law Journal notes that sometime in 2007, Windels Marx was replaced by Curtis, Mallet-Prevost, Colt & Mosle as Source's counsel. Skadden, Arps, Slate, Meagher & Flom is counsel to Black Enterprise, the report adds. About Source Enterprises Headquartered in New York City, The Source Enterprises Inc. was the publisher of The Source magazine, which covered hip-hop music and culture. On July 27, 2006, three creditors filed an involuntary Chapter 7 petition against the company under Section 303 of the U.S. Bankruptcy Code. On Aug. 21, 2006, The Source Enterprises petitioned the U.S. Bankruptcy Court, Southern District of New York, for an order converting the Chapter 7 case to a Chapter 11. The court approved the that request on Sept. 20, 2006. Clear Thinking Group LLC was named liquidation trustee in the bankruptcy case. That appointment became effective with the confirmation of the Debtor's reorganization plan on Oct. 2, 2007. STATE STREET: Earns $530 Million in First Quarter Ended March 31 ---------------------------------------------------------------- State Street Corporation disclosed Tuesday its results of operations and related financial information for the first quarter of 2008. State Street Corporation reported net income of $530 million for the first quarter ended March 31, 2008, compared with net income of $314 million in last year's first quarter. Net earnings in the first quarter of 2008 includes $17 million of after-tax merger and integration costs associated with the July 2007 acquisition of Investors Financial Services Corp. Revenue of $2.577 billion in the first quarter of 2008, is up 52% from $1.696 billion compared to the year-ago quarter and includes $220 million in revenue from the acquired Investors Financial business. Total expenses in the first quarter of 2008 of $1.774 billion are up 46.2% from $1.213 billion compared to the year-ago quarter and excluding the merger and integration costs would be $1.748 billion, up 44.1%. Excluding the results of Investors Financial and the merger and integration costs, revenue would be up 39% and expenses would be up 31.1%. On an operating basis, excluding the merger and integration costs, State Street achieved positive operating leverage of approximately 810 basis points, based on growth in total operating-basis revenue of 52.2% and growth in total operating-basis expenses of 44.1%. For the first quarter of 2008, return on shareholders' equity was 18.7% and was 19.4%, excluding the merger and integration costs, up from 17.4% in the first quarter of 2007. Ronald E. Logue, State Street's chairman and chief executive officer, said, "I am extremely pleased with this record revenue performance, particularly in today's challenging environment. The momentum we have achieved over the past 12 months continues, despite the negative equity markets. The neutral earnings-per- share result for the acquired Investors Financial business demonstrates our success in consolidating this business. "In the first quarter, we grew our revenue and operating earnings per share and generated operating return on equity above our financial goals. Compared to the year-ago quarter, we experienced growth in nearly all lines of our income statement and recorded positive operating leverage for the fourteenth consecutive quarter when measured on a year-over-year basis. "Servicing fee revenue was up 34% and asset management fee revenue grew 7% from the prior year's first quarter. We won $600 billion of assets in new business in servicing and $69 billion of net new business in asset management. Growth outside the U.S. continues to provide momentum. Growth in revenue was particularly strong in our trading business and our securities finance business in this volatile business environment. Growth in net interest revenue is due to a favorable U.S. rate environment as well as the successful execution of our balance sheet strategy." Logue continued, "During the first quarter, we strengthened our regulatory capital position with strong net income of more than $500 million and the issuance of $500 million of tier-1 qualified regulatory capital." Logue concluded, "Given the continued unsettled economic environment, for now we continue to expect to achieve in the middle of the ranges we established for this year. Excluding the impact of the fourth-quarter 2007 charge and the impact of merger and integration costs in both 2007 and 2008, these ranges reflect an increase in operating earnings per share of between 10 and 15 percent; an increase in revenue of 14 to 17 percent; and operating return on equity of 14 to 17 percent." First Quarter 2008 Results Vs. Year-Ago Quarter Servicing fees are up 34% to $960 million from $718 million in last year's first quarter. The increase is attributable to business from Investors Financial as well as new business from existing and new customers in 2008. Total assets under custody are $14.900 trillion at March 31, 2008, up 21%, compared with $12.331 trillion at March 31, 2007. Daily average values for the S&P 500 Index are down 5% from the first quarter of 2007; daily average values for the MSCI(R) EAFE IndexSM are down 3%. Investment management fees, generated by State Street Global Advisors, are $278 million, up 7% from $261 million in the year- ago quarter. Growth in management fees reflects continued net new business, offset partially by a decrease in performance fees and in average month-end equity market valuations. Total assets under management at March 31, 2008, are $1.955 trillion, up 6%, compared to $1.849 trillion at March 31, 2007. Trading services revenue, which includes foreign exchange trading revenue and brokerage and other fees, is $366 million for the quarter, up 66% from $220 million in the year-ago quarter. The 74% increase in foreign exchange revenue is due to higher volatility and increased volumes. Brokerage and other fees increased 49% due primarily to fees from the acquired Currenex business, as well as strength in transition management. Securities finance revenue is $303 million in the quarter, up 209% from $98 million in the year-ago quarter, primarily reflecting improved spreads. This unusually strong growth reflects the recent actions by the Federal Reserve in reducing interest rates. Processing fees and other is $54 million, down 26% from $73 million in the first quarter of 2007 due primarily to lower revenue from structured products. Net interest revenue on a fully taxable-equivalent basis is $648 million, an increase of 92% from $337 million a year ago. The increase is due primarily to the benefit of recent cuts in U.S. rates, the benefit of the revenue from the acquired Investors Financial business, and increased volumes in transaction deposits from non-US customers. Expenses increased to $1.774 billion, up 46.2% from $1.213 billion a year ago, partially due to the acquisition of Investors Financial. Excluding $158 million in operating costs associated with Investors Financial and $26 million in merger and integration costs, expenses are up 31.1% to $1.590 billion. Salaries and benefits expenses are up 44% to $1.062 billion from $739 million, primarily as a result of increased incentive compensation due to improved performance and the accounting impact of stock-related compensation for retirement-eligible employees, the impact of the Investors Financial acquisition, and increased headcount due to new business wins. The increase in total expenses also includes higher transaction processing services, up 26% to $162 million from $129 million a year ago, due to higher volumes in the investment servicing business primarily as a result of the acquisition of Investors Financial. Expenses for information systems & communications increased 24%, to $155 million from $125 million and occupancy increased 17%, to $110 million from $94 million, with both increases due primarily to the acquisition of Investors Financial. Other expenses were up 106%, or $133 million at $259 million from $126 million due primarily to increased professional fees and securities processing costs, as well as Investors Financial's costs associated with amortization of intangibles. The effective tax rate in the first quarter of 2008 is 34.0%, down from 35.0% in the year-ago quarter. First-Quarter 2008 Results Vs. Fourth Quarter 2007 First-quarter earnings of $530 million is up from $223 million in the fourth quarter of 2007. Total revenue in the first quarter is $2.577 billion, up 4.0% versus $2.479 billion in the fourth quarter of 2007. Total expenses for the first quarter of 2008 are $1.774 billion versus $2.173 billion in the fourth quarter of 2007. Excluding the fourth-quarter charge and the merger and integration expenses, total expenses are $1.748 billion up 6.0% versus $1.649 billion in the fourth quarter. Return on shareholders' equity of 18.7% in the first quarter compares with 7.7% in the fourth quarter. Excluding the non-operating charges, operating return on equity would have been 19.4% in the first quarter of 2008 up from 18.7% in the fourth quarter of 2007. Servicing fees are $960 million, down slightly from $967 million in the fourth quarter due to a decline in daily equity valuations, partially offset by business from new and existing customers. Management fees are $278 million, down 6% from $297 million primarily due to a 10% decline in month-end equity valuations and lower performance fees. Trading services revenue is $366 million, up 4% from $352 million primarily due to increased volatility in foreign exchange markets. Securities finance revenue is $303 million, up 18% from the prior quarter due to increased spreads reflecting the recent actions by the Federal Reserve in reducing interest rates, offset partially by lower volumes due to a decline in market values. Processing fees and other revenue decreased slightly to $54 million from $55 million. Net interest revenue on a fully taxable-equivalent basis is $648 million, up 13% from $573 million, due primarily to the impact of the recent rate cuts in the U.S., partially offset by a slight change in customer mix. Salaries and employee benefits expense increased 14% to $1.062 billion from $934 million due to the impact of incentive compensation as a result of the accounting impact of stock-related compensation for retirement-eligible employees and improved performance, and higher benefit costs. Transaction processing expense is down 12% from $184 million to $162 million due primarily to receipt of a depository rebate, and Information systems and communications expense increased 5% from $148 million to $155 million, due primarily to costs associated with increased global infrastructure investments. Other expenses are down 6% from $276 million to $259 million due primarily to a decline in expenses related to Investors Financial, as well as lower securities processing costs. Balance Sheet State Street Corp. reported consolidated assets of $154.349 billion, total liabilities of $143.543 billion, and total shareholders' equity of $10.806 billion, at March 31, 2008. Total deposit liabilities were $104.707 billion at March 31, 2008, up from $95.789 billion at Dec. 31, 2007, and $66.600 billion at March 31, 2007. About State Street Corp. Headquartered in Boston, Massachusetts, State Street Corporation (NYSE: STT) -- http://www.statestreet.com/-- provides financial services to institutional investors including investment servicing, investment management and investment research and trading. With $14.900 trillion in assets under custody and $1.955 trillion in assets under management at March 31, 2008, State Street operates in 26 countries and more than 100 geographic markets and employs 27,875 worldwide. * * * As reported in the Troubled Company Reporter on Jan. 7, 2008, Fitch Ratings revised the Rating Outlook on State Street Corporation to negative from stable and has downgraded the bank's individual rating to 'B' from 'A/B.' STEEL DYNAMICS: Moody's Rates $125 Million Unsecured Debt at Ba2 ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Steel Dynamics Inc.'s senior unsecured guaranteed debt issuance of approximately $125 million. The notes will be identical in feature to the company's $375 million 7.75% senior unsecured notes due 2016, which were issued in March 2008 (rated Ba2). Proceeds from the issuance will be used for general corporate purposes. At the same time, Moody's affirmed SDI's Ba1 corporate family rating, its Ba1 probability of default rating, the Ba2 rating on its existing guaranteed senior unsecured bonds and debentures and the Ba2 rating on its convertible subordinated notes. The rating outlook is stable. While the recent debt issuances, including the notes issued in March 2008, modestly increase the company's overall financial leverage profile, Moody's believe SDI has adequate cushion at its current rating level to accommodate a transaction of this magnitude without compromising its credit profile. On a pro forma basis, inclusive of both the notes issuance and the OmniSource acquisition in Q4 2007, SDI's Debt/EBITDA is expected to be approximately 2.4x, using Moody's standard adjustments. Additionally, Moody's believe that the recent transactions have improved SDI's overall liquidity position by extending its debt maturity profile and increasing amounts available under its secured credit facility. SDI's Ba1 corporate family rating reflects the company's low cost mini-mill operating structure, which contributes to its strong earnings power, its growing production capabilities, and its improving product mix, which is shifting more toward higher value- added steel and specialty alloys. In addition, the robust steel price environment in recent years has enabled the company to significantly up-tier its performance and fundamentally improve its financial profile. Overall, SDI's steelmaking process requires only 0.3 man-hours to produce a hot band ton in the flat roll division; Moody's believes that SDI is among the most profitable steel producers in the United States on a per ton basis. Given this fundamental improvement in performance over recent years and SDI's business strategy, which includes both organic growth and growth by acquisition, the company has an acceptable cushion at the Ba1 rating level for a more normalized "through the cycle" earnings scenario. Additionally, SDI benefits from flexible labor arrangements, the absence of a defined benefit pension program, and manageable environmental liabilities. Factors limiting the rating include the company's modest size relative to investment grade steel producers, the secured nature of its credit facility and the company's acquisition-driven growth strategy. The stable outlook captures Moody's expectations that SDI will continue to exhibit solid earnings and cash generation over the next twelve months reflective of its low cost position and continued acceptable business environment in key markets served, commercial construction in particular. Considering SDI's growth initiatives, and the corollary impact on spending requirements, Moody's do not see the company sustaining the financial leverage and coverage ratios appropriate for an investment grade company on a through-the-cycle basis. Assignments: Issuer: Steel Dynamics, Inc. -- Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (72%, LGD 5) Under Moody's loss given default methodology, the senior unsecured notes are rated one notch below the corporate family rating reflective of the level of secured to unsecured debt in the capital structure and the higher recovery rate that the secured debt commands. The revolving credit facility and Term Loan A are secured by receivables and inventory as well as by a pledge of shares of wholly-owned subsidiaries capital stock. Moody's previous rating action for SDI was on March 27, 2008, when we assigned a Ba2 to SDI's senior unsecured notes issuance and affirmed its existing ratings. Headquartered in Fort Wayne, Indiana, Steel Dynamics had total consolidated steel shipments of approximately 5.0 million tons and generated revenues of $4.4 billion in 2007. STRUCTURED ASSET: Fitch Lowers Ratings on $3.1 Bil. Certificates ---------------------------------------------------------------- Fitch Ratings has taken rating actions on Structured Asset Investment Loan mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $4.3 billion and downgrades total $3.1 billion. Additionally, $636.5 million was placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: SAIL 2005-HE1 Total -- $46.1 million class A2 affirmed at 'AAA', (BL: 84.13, LCR: 3.17); -- $36.4 million class A5 affirmed at 'AAA', (BL: 84.13, LCR: 3.17); -- $128.2 million class A6 affirmed at 'AAA', (BL: 64.34, LCR: 2.43); -- $26.1 million class A7 affirmed at 'AAA', (BL: 69.39, LCR: 2.62); -- $6.8 million class A8 affirmed at 'AAA', (BL: 64.25, LCR: 2.42); -- $84.5 million class M1 rated 'AA+', placed on Rating Watch Negative (BL: 47.83, LCR: 1.8); -- $48.3 million class M2 downgraded to 'BBB' from 'AA' (BL: 39.52, LCR: 1.49); -- $28.5 million class M3 downgraded to 'BB' from 'A+' (BL: 34.29, LCR: 1.29); -- $25.9 million class M4 downgraded to 'B' from 'A-' (BL: 29.46, LCR: 1.11); -- $25.0 million class M5 downgraded to 'CCC' from 'BBB-' (BL: 24.78, LCR: 0.93); -- $17.2 million class M6 downgraded to 'CCC' from 'BB' (BL: 21.48, LCR: 0.81); -- $17.2 million class M7 downgraded to 'CC/DR5' from 'B' (BL: 18.03, LCR: 0.68); -- $10.3 million class M8 remains at 'C/DR6' (BL: 15.94, LCR: 0.6); -- $12.1 million class M9 remains at 'C/DR6' (BL: 13.40, LCR: 0.51); -- $15.5 million class B1 remains at 'C/DR6' (BL: 10.14, LCR: 0.38); Deal Summary -- Originators: Finance America (53%), Ameriquest (43%) -- 60+ day Delinquency: 39.19% -- Realized Losses to date (% of Original Balance): 2.40% -- Expected Remaining Losses (% of Current balance): 26.52% -- Cumulative Expected Losses (% of Original Balance): 10.75% SAIL 2005-HE2 -- $76.0 million class A2 affirmed at 'AAA', (BL: 82.43, LCR: 3); -- $73.7 million class A3 affirmed at 'AAA', (BL: 58.95, LCR: 2.14); -- $30.7 million class M1 downgraded to 'A' from 'AA+' (BL: 47.85, LCR: 1.74); -- $24.4 million class M2 downgraded to 'BBB' from 'AA' (BL: 39.73, LCR: 1.44); -- $15.2 million class M3 downgraded to 'BB' from 'BBB+' (BL: 34.48, LCR: 1.25); -- $13.9 million class M4 downgraded to 'B' from 'BBB-' (BL: 29.63, LCR: 1.08); -- $11.8 million class M5 downgraded to 'CCC' from 'BB' (BL: 25.51, LCR: 0.93); -- $10.1 million class M6 downgraded to 'CCC' from 'B' (BL: 21.89, LCR: 0.8); -- $7.6 million class M7 downgraded to 'CC/DR3' from 'B' (BL: 19.04, LCR: 0.69); -- $7.6 million class M8 remains at 'C/DR5' (BL: 16.19, LCR: 0.59); -- $9.3 million class M9 remains at 'C/DR5' (BL: 12.60, LCR: 0.46); -- $8.8 million class M10 remains at 'C/DR5' (BL: 9.21, LCR: 0.33); -- $6.3 million class B1 remains at 'C/DR6' (BL: 7.13, LCR: 0.26); -- $2.9 million class B2 remains at 'C/DR6' (BL: 7.00, LCR: 0.25); Deal Summary -- Originators: OwnIt (52%), Ameriquest (46%) -- 60+ day Delinquency: 40.57% -- Realized Losses to date (% of Original Balance): 3.23% -- Expected Remaining Losses (% of Current balance): 27.50% -- Cumulative Expected Losses (% of Original Balance): 12.97% SAIL 2005-HE3 Total -- $108.0 million class A2 affirmed at 'AAA', (BL: 77.75, LCR: 3.22); -- $139.3 million class A4 affirmed at 'AAA', (BL: 79.54, LCR: 3.29); -- $221.0 million class A5 affirmed at 'AAA', (BL: 55.68, LCR: 2.3); -- $100.7 million class M1 downgraded to 'A' from 'AA+' (BL: 43.41, LCR: 1.8); -- $64.0 million class M2 downgraded to 'BBB' from 'AA' (BL: 36.63, LCR: 1.52); -- $52.1 million class M3 downgraded to 'BB' from 'BBB+' (BL: 30.71, LCR: 1.27); -- $28.4 million class M4 downgraded to 'B' from 'BBB-' (BL: 27.42, LCR: 1.13); -- $24.9 million class M5 downgraded to 'B' from 'BB' (BL: 24.54, LCR: 1.02); -- $22.5 million class M6 downgraded to 'CCC' from 'B' (BL: 21.86, LCR: 0.9); -- $20.1 million class M7 downgraded to 'CCC' from 'B' (BL: 19.36, LCR: 0.8); -- $20.1 million class M8 remains at 'C/DR5' (BL: 16.84, LCR: 0.7); -- $19.0 million class M9 remains at 'C/DR5' (BL: 14.39, LCR: 0.6); -- $14.2 million class M10 remains at 'C/DR5' (BL: 12.52, LCR: 0.52); -- $21.3 million class M11 remains at 'C/DR5' (BL: 9.85, LCR: 0.41); Deal Summary -- Originators: BNC (50%), Ameriquest (35%) -- 60+ day Delinquency: 38.10% -- Realized Losses to date (% of Original Balance): 1.99% -- Expected Remaining Losses (% of Current balance): 24.17% -- Cumulative Expected Losses (% of Original Balance): 10.98% SAIL Trust Series 2005-1 Total -- $48.0 million class A2 affirmed at 'AAA', (BL: 74.78, LCR: 4.04); -- $4.0 million class A4 affirmed at 'AAA', (BL: 99.21, LCR: 5.36); -- $60.7 million class A5 affirmed at 'AAA', (BL: 74.16, LCR: 4.01); -- $19.5 million class A7 affirmed at 'AAA', (BL: 74.75, LCR: 4.04); -- $37.5 million class M1 affirmed at 'AA+', (BL: 57.06, LCR: 3.08); -- $54.2 million class M2 affirmed at 'AA', (BL: 39.72, LCR: 2.15); -- $29.6 million class M3 downgraded to 'BBB' from 'AA-' (BL: 31.66, LCR: 1.71); -- $23.7 million class M4 downgraded to 'B' from 'A+' (BL: 19.18, LCR: 1.04); -- $21.7 million class M5 downgraded to 'CCC' from 'BBB-' (BL: 16.97, LCR: 0.92); -- $19.7 million class M6 downgraded to 'CCC' from 'BB' (BL: 14.97, LCR: 0.81); -- $13.8 million class M7 downgraded to 'CC/DR3' from 'BB-' (BL: 13.50, LCR: 0.73); -- $14.8 million class M8 downgraded to 'CC/DR6' from 'B+' (BL: 11.91, LCR: 0.64); -- $9.6 million class M9 downgraded to 'CC/DR6' from 'B' (BL: 10.53, LCR: 0.57); -- $7.7 million class B downgraded to 'C/DR6' from 'CCC' (BL: 8.76, LCR: 0.47); Deal Summary -- Originators: BNC (52%), Finance America (17%) -- 60+ day Delinquency: 32.21% -- Realized Losses to date (% of Original Balance): 1.66% -- Expected Remaining Losses (% of Current balance): 18.50% -- Cumulative Expected Losses (% of Original Balance): 5.30% SAIL Trust Series 2005-2 Total -- $21.4 million class A1 affirmed at 'AAA', (BL: 77.90, LCR: 4.12); -- $47.7 million class A4 affirmed at 'AAA', (BL: 77.90, LCR: 4.12); -- $41.9 million class A5 affirmed at 'AAA', (BL: 80.56, LCR: 4.27); -- $10.5 million class A6 affirmed at 'AAA', (BL: 76.58, LCR: 4.05); -- $59.1 million class M1 affirmed at 'AA+', (BL: 59.18, LCR: 3.13); -- $54.0 million class M2 affirmed at 'AA', (BL: 41.50, LCR: 2.2); -- $27.0 million class M3 downgraded to 'BB' from 'AA-' (BL: 25.88, LCR: 1.37); -- $24.0 million class M4 downgraded to 'B' from 'A+' (BL: 18.00, LCR: 0.95); -- $23.0 million class M5 downgraded to 'CCC' from 'A' (BL: 15.75, LCR: 0.83); -- $15.0 million class M6 downgraded to 'CCC' from 'A-' (BL: 14.26, LCR: 0.75); -- $17.0 million class M7 downgraded to 'CC/DR3' from 'BBB' (BL: 12.52, LCR: 0.66); -- $15.0 million class M8 downgraded to 'CC/DR3' from 'BBB-' (BL: 10.99, LCR: 0.58); Deal Summary -- Originators: BNC (52%), Finance America (22%) -- 60+ day Delinquency: 32.29% -- Realized Losses to date (% of Original Balance): 1.56% -- Expected Remaining Losses (% of Current balance): 18.89% -- Cumulative Expected Losses (% of Original Balance): 5.21% SAIL 2005-3 Total -- $29.4 million class A1 affirmed at 'AAA', (BL: 67.65, LCR: 3.29); -- $95.4 million class A4 affirmed at 'AAA', (BL: 68.13, LCR: 3.32); -- $47.6 million class A5 affirmed at 'AAA', (BL: 75.00, LCR: 3.65); -- $11.9 million class A6 affirmed at 'AAA', (BL: 67.77, LCR: 3.3); -- $45.8 million class A7 affirmed at 'AAA', (BL: 74.11, LCR: 3.61); -- $11.5 million class A8 affirmed at 'AAA', (BL: 67.64, LCR: 3.29); -- $52.9 million class M1 affirmed at 'AA+', (BL: 58.56, LCR: 2.85); -- $76.6 million class M2 affirmed at 'AA', (BL: 44.07, LCR: 2.15); -- $41.8 million class M3 affirmed at 'A', (BL: 37.86, LCR: 1.84); -- $33.4 million class M4 downgraded to 'BBB' from 'A-' (BL: 32.08, LCR: 1.56); -- $30.7 million class M5 downgraded to 'CCC' from 'BBB' (BL: 16.81, LCR: 0.82); -- $25.1 million class M6 downgraded to 'CC/DR3' from 'BB+' (BL: 14.78, LCR: 0.72); -- $22.3 million class M7 downgraded to 'CC/DR3' from 'BB' (BL: 13.08, LCR: 0.64); -- $20.9 million class M8 downgraded to 'CC/DR3' from 'BB-' (BL: 11.53, LCR: 0.56); Deal Summary -- Originators: Option One (35%), BNC (32%) -- 60+ day Delinquency: 34.48% -- Realized Losses to date (% of Original Balance): 1.88% -- Expected Remaining Losses (% of Current balance): 20.54% -- Cumulative Expected Losses (% of Original Balance): 6.17% SAIL 2005-4 Total -- $87.9 million class A3 affirmed at 'AAA', (BL: 72.51, LCR: 3.62); -- $91.5 million class A4 affirmed at 'AAA', (BL: 77.28, LCR: 3.86); -- $22.9 million class A5 affirmed at 'AAA', (BL: 71.58, LCR: 3.58); -- $67.1 million class M1 affirmed at 'AA+', (BL: 59.14, LCR: 2.96); -- $57.3 million class M2 affirmed at 'AA+', (BL: 45.44, LCR: 2.27); -- $34.6 million class M3 affirmed at 'AA', (BL: 40.72, LCR: 2.04); -- $32.5 million class M4 downgraded to 'A' from 'AA-' (BL: 35.25, LCR: 1.76); -- $31.4 million class M5 downgraded to 'BB' from 'A-' (BL: 29.48, LCR: 1.47); -- $23.8 million class M6 downgraded to 'CCC' from 'BBB' (BL: 18.50, LCR: 0.92); -- $23.8 million class M7 downgraded to 'CCC' from 'BBB-' (BL: 15.74, LCR: 0.79); -- $14.1 million class M8 downgraded to 'CC/DR3' from 'BB' (BL: 14.10, LCR: 0.7); -- $21.6 million class M9 downgraded to 'CC/DR4' from 'B' (BL: 11.63, LCR: 0.58); Deal Summary -- Originators: BNC (39%), Option One (20%) -- 60+ day Delinquency: 33.41% -- Realized Losses to date (% of Original Balance): 1.73% -- Expected Remaining Losses (% of Current balance): 20.00% -- Cumulative Expected Losses (% of Original Balance): 6.69% SAIL 2005-5 Total -- $62.7 million class A1 affirmed at 'AAA', (BL: 68.31, LCR: 3.37); -- $87.1 million class A3 affirmed at 'AAA', (BL: 67.01, LCR: 3.31); -- $53.3 million class A4 affirmed at 'AAA', (BL: 75.04, LCR: 3.7); -- $13.3 million class A5 affirmed at 'AAA', (BL: 67.58, LCR: 3.34); -- $75.6 million class A8 affirmed at 'AAA', (BL: 67.03, LCR: 3.31); -- $37.5 million class M1 affirmed at 'AA+', (BL: 55.21, LCR: 2.73); -- $68.7 million class M2 affirmed at 'AA', (BL: 43.57, LCR: 2.15); -- $45.0 million class M3 affirmed at 'AA-', (BL: 37.96, LCR: 1.87); -- $37.5 million class M4 downgraded to 'BBB' from 'A+' (BL: 32.80, LCR: 1.62); -- $30.0 million class M5 downgraded to 'BB' from 'BBB+' (BL: 28.42, LCR: 1.4); -- $30.0 million class M6 downgraded to 'B' from 'BBB-' (BL: 23.96, LCR: 1.18); -- $27.5 million class M7 downgraded to 'CCC' from 'BB' (BL: 16.43, LCR: 0.81); -- $18.7 million class M8 downgraded to 'CC/DR5' from 'BB-' (BL: 14.66, LCR: 0.72); -- $25.0 million class M9 downgraded to 'CC/DR5' from 'B' (BL: 12.26, LCR: 0.61); Deal Summary -- Originators: BNC (27%), Option One (13%) -- 60+ day Delinquency: 33.85% -- Realized Losses to date (% of Original Balance): 1.60% -- Expected Remaining Losses (% of Current balance): 20.25% -- Cumulative Expected Losses (% of Original Balance): 7.19% SAIL 2005-6 Total -- $88.6 million class A1 affirmed at 'AAA', (BL: 62.39, LCR: 2.92); -- $9.8 million class A2 affirmed at 'AAA', (BL: 58.80, LCR: 2.75); -- $85.7 million class A3 affirmed at 'AAA', (BL: 60.59, LCR: 2.84); -- $9.9 million class A5 affirmed at 'AAA', (BL: 90.08, LCR: 4.22); -- $23.2 million class A6 affirmed at 'AAA', (BL: 58.82, LCR: 2.75); -- $41.8 million class A8 affirmed at 'AAA', (BL: 90.70, LCR: 4.24); -- $95.2 million class A9 affirmed at 'AAA', (BL: 58.83, LCR: 2.75); -- $68.1 million class M1 affirmed at 'AA+', (BL: 46.67, LCR: 2.18); -- $63.5 million class M2 downgraded to 'A' from 'AA' (BL: 39.56, LCR: 1.85); -- $38.6 million class M3 downgraded to 'BBB' from 'AA-' (BL: 34.26, LCR: 1.6); -- $34.0 million class M4 downgraded to 'BB' from 'A+' (BL: 29.38, LCR: 1.37); -- $34.0 million class M5 downgraded to 'B' from 'A' (BL: 24.50, LCR: 1.15); -- $26.1 million class M6 downgraded to 'B' from 'BBB-' (BL: 20.68, LCR: 0.97); -- $34.0 million class M7 downgraded to 'CC/DR5' from 'B' (BL: 15.45, LCR: 0.72); -- $22.7 million class M8 revised to 'CC/DR6' from 'CC/DR3' (BL: 11.06, LCR: 0.52); -- $11.3 million class M9 revised to 'C/DR6' from 'C/DR5' (BL: 10.99, LCR: 0.51); -- $5.7 million class M10-A remains at 'C/DR6' (BL: 9.72, LCR: 0.45); -- $5.7 million class M10-F remains at 'C/DR6' (BL: 9.72, LCR: 0.45); Deal Summary -- Originators: BNC (63%), Option One (21%) -- 60+ day Delinquency: 34.20% -- Realized Losses to date (% of Original Balance): 1.67% -- Expected Remaining Losses (% of Current balance): 21.37% -- Cumulative Expected Losses (% of Original Balance): 8.29% SAIL 2005-7 Total -- $82.4 million class A1 affirmed at 'AAA', (BL: 72.15, LCR: 3.25); -- $38.5 million class A2 affirmed at 'AAA', (BL: 56.71, LCR: 2.55); -- $142.2 million class A4 affirmed at 'AAA', (BL: 78.23, LCR: 3.52); -- $144.0 million class A5 affirmed at 'AAA', (BL: 53.19, LCR: 2.39); -- $69.4 million class M1 downgraded to 'A' from 'AA+' (BL: 42.83, LCR: 1.93); -- $67.3 million class M2 downgraded to 'BBB' from 'AA' (BL: 34.14, LCR: 1.54); -- $27.3 million class M3 downgraded to 'BB' from 'AA-' (BL: 30.37, LCR: 1.37); -- $30.5 million class M4 downgraded to 'B' from 'A+' (BL: 26.13, LCR: 1.18); -- $25.2 million class M5 downgraded to 'B' from 'A' (BL: 22.61, LCR: 1.02); -- $21.0 million class M6 downgraded to 'CCC' from 'A-' (BL: 19.60, LCR: 0.88); -- $13.7 million class M7 downgraded to 'CCC' from 'BBB+' (BL: 17.53, LCR: 0.79); -- $13.7 million class M8 downgraded to 'CC/DR5' from 'BBB' (BL: 15.46, LCR: 0.7); -- $18.9 million class M9 downgraded to 'CC/DR6' from 'BBB-' (BL: 11.85, LCR: 0.53); -- $15.8 million class B1 downgraded to 'C/DR6' from 'BBB-' (BL: 10.77, LCR: 0.48); Deal Summary -- Originators: BNC (65%), Ameriquest (19%) -- 60+ day Delinquency: 34.76% -- Realized Losses to date (% of Original Balance): 1.98% -- Expected Remaining Losses (% of Current balance): 22.23% -- Cumulative Expected Losses (% of Original Balance): 9.69% SAIL 2005-9 Total -- $167.8 million class A1 rated 'AAA', placed on Rating Watch Negative (BL: 47.02, LCR: 1.82); -- $44.3 million class A2 affirmed at 'AAA', (BL: 71.27, LCR: 2.76); -- $187.5 million class A3 rated 'AAA', placed on Rating Watch Negative (BL: 45.32, LCR: 1.75); -- $139.8 million class A5 affirmed at 'AAA', (BL: 66.70, LCR: 2.58); -- $121.7 million class A6 affirmed at 'AAA', (BL: 66.70, LCR: 2.58); -- $83.8 million class M1 downgraded to 'BB' from 'AA+' (BL: 37.90, LCR: 1.47); -- $63.5 million class M2 downgraded to 'B' from 'AA' (BL: 31.87, LCR: 1.23); -- $52.7 million class M3 downgraded to 'B' from 'AA-' (BL: 26.82, LCR: 1.04); -- $29.9 million class M4 downgraded to 'CCC' from 'A+' (BL: 23.93, LCR: 0.93); -- $28.7 million class M5 downgraded to 'CCC' from 'A' (BL: 21.14, LCR: 0.82); -- $27.5 million class M6 downgraded to 'CC/DR5' from 'A-' (BL: 18.41, LCR: 0.71); -- $18.0 million class M7 downgraded to 'CC/DR6' from 'BBB+' (BL: 16.52, LCR: 0.64); -- $24.0 million class M8 downgraded to 'CC/DR6' from 'BBB' (BL: 14.02, LCR: 0.54); -- $24.0 million class M9 downgraded to 'C/DR6' from 'BB' (BL: 11.45, LCR: 0.44); -- $16.8 million class B1 downgraded to 'C/DR6' from 'B+' (BL: 9.62, LCR: 0.37); -- $15.6 million class B2 downgraded to 'C/DR6' from 'CCC' (BL: 8.30, LCR: 0.32); Deal Summary -- Originators: BNC (53%), New Century (39%) -- 60+ day Delinquency: 37.97% -- Realized Losses to date (% of Original Balance): 1.87% -- Expected Remaining Losses (% of Current balance): 25.85% -- Cumulative Expected Losses (% of Original Balance): 13.17% SAIL 2005-10 Total -- $53.6 million class A1 downgraded to 'AA' from 'AAA' (BL: 44.97, LCR: 1.73); -- $25.2 million class A2 rated 'AAA', placed on Rating Watch Negative (BL: 46.18, LCR: 1.77); -- $196.5 million class A4 affirmed at 'AAA', (BL: 63.96, LCR: 2.46); -- $91.8 million class A5 affirmed at 'AAA', (BL: 63.96, LCR: 2.46); -- $135.6 million class A6 downgraded to 'AA' from 'AAA' (BL: 44.96, LCR: 1.73); -- $60.6 million class M1 downgraded to 'BB' from 'AA+' (BL: 37.50, LCR: 1.44); -- $48.2 million class M2 downgraded to 'B' from 'A+' (BL: 31.40, LCR: 1.21); -- $33.2 million class M3 downgraded to 'B' from 'A-' (BL: 27.16, LCR: 1.04); -- $24.9 million class M4 downgraded to 'CCC' from 'BBB+' (BL: 23.94, LCR: 0.92); -- $24.1 million class M5 downgraded to 'CCC' from 'BBB-' (BL: 20.81, LCR: 0.8); -- $19.1 million class M6 downgraded to 'CC/DR6' from 'BB' (BL: 18.26, LCR: 0.7); -- $16.6 million class M7 downgraded to 'CC/DR6' from 'B' (BL: 15.88, LCR: 0.61); -- $12.5 million class M8 downgraded to 'CC/DR6' from 'B' (BL: 14.09, LCR: 0.54); -- $12.5 million class M9 revised to 'C/DR6' from C/DR5' (BL: 12.21, LCR: 0.47); -- $16.6 million class B1 revised to 'C/DR6' from C/DR5' (BL: 9.87, LCR: 0.38); -- $11.6 million class B2 remains at 'C/DR6' (BL: 8.40, LCR: 0.32); Deal Summary -- Originators: BNC (59%), AIG (20%) -- 60+ day Delinquency: 37.21% -- Realized Losses to date (% of Original Balance): 2.16% -- Expected Remaining Losses (% of Current balance): 26.04% -- Cumulative Expected Losses (% of Original Balance): 14.50% SAIL 2005-11 Total -- $20.6 million class A1 downgraded to 'AA' from 'AAA' (BL: 41.49, LCR: 1.58); -- $171.5 million class A2 rated 'AAA', placed on Rating Watch Negative (BL: 51.42, LCR: 1.96); -- $27.9 million class A3 downgraded to 'AA' from 'AAA' (BL: 42.75, LCR: 1.63); -- $25.8 million class A4 affirmed at 'AAA', (BL: 98.60, LCR: 3.75); -- $100.0 million class A5 affirmed at 'AAA', (BL: 58.30, LCR: 2.22); -- $166.6 million class A6 affirmed at 'AAA', (BL: 58.30, LCR: 2.22); -- $114.3 million class A7 downgraded to 'AA' from 'AAA' (BL: 41.49, LCR: 1.58); -- $132.0 million class M1 downgraded to 'B' from 'A-' (BL: 27.62, LCR: 1.05); -- $33.7 million class M2 downgraded to 'CCC' from 'BBB' (BL: 24.01, LCR: 0.91); -- $30.0 million class M3 downgraded to 'CCC' from 'BB' (BL: 20.79, LCR: 0.79); -- $29.0 million class M4 downgraded to 'CC/DR6' from 'B' (BL: 17.66, LCR: 0.67); -- $22.5 million class M5 downgraded to 'CC/DR6' from 'B' (BL: 15.15, LCR: 0.58); -- $20.6 million class M6 revised to 'C/DR6' from C/DR5' (BL: 12.64, LCR: 0.48); -- $16.9 million class M7 revised to 'C/DR6' from C/DR5' (BL: 10.58, LCR: 0.4); -- $11.2 million class M8 revised to 'C/DR6' from C/DR5' (BL: 9.25, LCR: 0.35); -- $18.7 million class B1 remains at 'C/DR6' (BL: 7.19, LCR: 0.27); -- $5.6 million class B2 remains at 'C/DR6' (BL: 6.57, LCR: 0.25); Deal Summary -- Originators: BNC (76%) -- 60+ day Delinquency: 36.19% -- Realized Losses to date (% of Original Balance): 2.00% -- Expected Remaining Losses (% of Current balance): 26.27% -- Cumulative Expected Losses (% of Original Balance): 15.29% The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and 2005 with regard to continued poor loan performance and home price weakness. STRUCTURED ASSET: Fitch Chips Ratings on $317.6MM Certificates -------------------------------------------------------------- Fitch Ratings has taken rating actions on Structured Asset Securities Corporation mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are now removed. Affirmations total $1.4 billion and downgrades total $317.6 million. Additionally, $280.5 million was placed on Rating Watch Negative and $31.1 million was removed from Rating Watch. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: SASCO 2005-NC1 -- $18.9 million class A-5 affirmed at 'AAA', (BL: 73.24, LCR: 5.35); -- $5.6 million class A-8 affirmed at 'AAA', (BL: 86.25, LCR: 6.3); -- $22.3 million class A-9 affirmed at 'AAA', (BL: 70.56, LCR: 5.16); -- $10.8 million class A-10 affirmed at 'AAA', (BL: 64.41, LCR: 4.71); -- $10.6 million class A-11 affirmed at 'AAA', (BL: 65.14, LCR: 4.76); -- $22.1 million class M-1 affirmed at 'AA+', (BL: 51.09, LCR: 3.73); -- $12.8 million class M-2 affirmed at 'AA+', (BL: 42.00, LCR: 3.07); -- $12.8 million class M-3 rated 'AA', placed on Rating Watch Negative (BL: 32.57, LCR: 2.38); -- $16.4 million class M-4 downgraded to 'BB' from 'A+' (BL: 17.45, LCR: 1.27); -- $5.0 million class M-5 downgraded to 'B' from 'A' (BL: 15.97, LCR: 1.17); -- $7.1 million class M-6 downgraded to 'B' from 'A-' (BL: 13.89, LCR: 1.01); -- $7.1 million class M-7 downgraded to 'CCC' from 'BBB' (BL: 11.78, LCR: 0.86); -- $7.1 million class M-8 downgraded to 'CCC' from 'BBB-' (BL: 9.63, LCR: 0.7); Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 21.79% -- Realized Losses to date (% of Original Balance): 0.90% -- Expected Remaining Losses (% of Current balance): 13.69% -- Cumulative Expected Losses (% of Original Balance): 4.14% SASCO 2005-NC2 -- $38.9 million class A-1 affirmed at 'AAA', (BL: 76.93, LCR: 4.38); -- $9.7 million class A-2 affirmed at 'AAA', (BL: 72.14, LCR: 4.11); -- $41.5 million class A-4 affirmed at 'AAA', (BL: 73.81, LCR: 4.2); -- $7.7 million class M-2 affirmed at 'AA+', (BL: 57.18, LCR: 3.25); -- $24.2 million class M-3 rated 'AA+', placed on Rating Watch Negative (BL: 41.51, LCR: 2.36); -- $16.9 million class M-4 downgraded to 'A' from 'AA' (BL: 30.17, LCR: 1.72); -- $14.5 million class M-5 downgraded to 'BB' from 'AA' (BL: 21.37, LCR: 1.22); -- $13.6 million class M-6 downgraded to 'B' from 'A+' (BL: 18.42, LCR: 1.05); -- $9.7 million class M-7 downgraded to 'CCC' from 'A' (BL: 16.39, LCR: 0.93); -- $9.7 million class M-8 downgraded to 'CCC' from 'A-' (BL: 14.38, LCR: 0.82); -- $9.7 million class M-9 downgraded to 'CC/DR3' from 'BBB+' (BL: 12.38, LCR: 0.7); -- $9.7 million class M-10 downgraded to 'CC/DR3' from 'BBB-' (BL: 10.30, LCR: 0.59); Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 22.51% -- Realized Losses to date (% of Original Balance): 1.35% -- Expected Remaining Losses (% of Current balance): 17.57% -- Cumulative Expected Losses (% of Original Balance): 5.76% SASCO 2005-OPT1 -- $8.3 million class A1 affirmed at 'AAA', (BL: 99.94, LCR: 3.88); -- $163.0 million class A2 rated 'AAA', placed on Rating Watch Negative (BL: 49.33, LCR: 1.92); -- $44.1 million class A3 rated 'AAA', placed on Rating Watch Negative (BL: 34.75, LCR: 1.35); Deal Summary -- Originators: Option One (100%) -- 60+ day Delinquency: 30.75% -- Realized Losses to date (% of Original Balance): 0.87% -- Expected Remaining Losses (% of Current balance): 25.74% -- Cumulative Expected Losses (% of Original Balance): 14.28% SASCO 2005-RMS1 -- $25.5 million class A3 affirmed at 'AAA', (BL: 73.10, LCR: 4.11); Deal Summary -- Originators: Equifirst (77%), Wilmington Finance (23%) -- 60+ day Delinquency: 27.04% -- Realized Losses to date (% of Original Balance): 1.42% -- Expected Remaining Losses (% of Current balance): 17.81% -- Cumulative Expected Losses (% of Original Balance): 4.91% SASCO 2005-WF1 -- $70.8 million class A3 affirmed at 'AAA', (BL: 72.81, LCR: 8.23); -- $44.6 million class M1 affirmed at 'AA+', (BL: 47.41, LCR: 5.36); -- $31.0 million class M2 affirmed at 'AA', (BL: 24.35, LCR: 2.75); -- $9.9 million class M3 affirmed at 'AA-', (BL: 21.76, LCR: 2.46); -- $12.7 million class M4 affirmed at 'A+', (BL: 18.63, LCR: 2.11); -- $8.9 million class M5 affirmed at 'A', (BL: 16.63, LCR: 1.88); -- $8.0 million class M6 affirmed at 'A-', (BL: 14.84, LCR: 1.68); -- $7.5 million class M7 downgraded to 'BBB' from 'BBB+' (BL: 13.14, LCR: 1.49); -- $4.7 million class M8 downgraded to 'BB' from 'BBB' (BL: 12.09, LCR: 1.37); -- $9.4 million class M9 downgraded to 'B' from 'BBB-' (BL: 10.09, LCR: 1.14); -- $6.9 million class B1 downgraded to 'B' from 'BB+' (BL: 9.25, LCR: 1.05); Deal Summary -- Originators: Wells Fargo (100%) -- 60+ day Delinquency: 17.83% -- Realized Losses to date (% of Original Balance): 0.70% -- Expected Remaining Losses (% of Current balance): 8.84% -- Cumulative Expected Losses (% of Original Balance): 2.76% SASCO 2005-WF2 -- $39.5 million class A3 affirmed at 'AAA', (BL: 82.96, LCR: 7.22); -- $29.2 million class M1 affirmed at 'AA+', (BL: 62.05, LCR: 5.4); -- $18.1 million class M2 affirmed at 'AA', (BL: 47.05, LCR: 4.09); -- $11.1 million class M3 affirmed at 'AA-', (BL: 25.37, LCR: 2.21); -- $9.4 million class M4 affirmed at 'A+', (BL: 20.91, LCR: 1.82); -- $9.7 million class M5 downgraded to 'BBB' from 'A' (BL: 17.80, LCR: 1.55); -- $7.4 million class M6 downgraded to 'BB' from 'A-' (BL: 15.43, LCR: 1.34); -- $6.7 million class M7 downgraded to 'B' from 'BBB+' (BL: 13.36, LCR: 1.16); -- $4.0 million class M8 downgraded to 'B' from 'BBB' (BL: 12.12, LCR: 1.05); -- $4.0 million class M9 downgraded to 'CCC' from 'BBB-' (BL: 10.88, LCR: 0.95); -- $4.7 million class B1 downgraded to 'CCC' from 'BB+' (BL: 9.48, LCR: 0.83); Deal Summary -- Originators: Wells Fargo (100%) -- 60+ day Delinquency: 22.24% -- Realized Losses to date (% of Original Balance): 0.76% -- Expected Remaining Losses (% of Current balance): 11.49% -- Cumulative Expected Losses (% of Original Balance): 3.40% SASCO 2005-WF3 -- $145.7 million class A2 affirmed at 'AAA', (BL: 52.93, LCR: 4.32); -- $54.0 million class A3 affirmed at 'AAA', (BL: 43.15, LCR: 3.53); -- $30.3 million class M1 affirmed at 'AA+', (BL: 32.80, LCR: 2.68); -- $19.3 million class M2 affirmed at 'AA', (BL: 26.74, LCR: 2.18); -- $9.7 million class M3 affirmed at 'AA-', (BL: 23.60, LCR: 1.93); -- $9.7 million class M4 downgraded to 'BBB' from 'A+' (BL: 17.22, LCR: 1.41); -- $9.2 million class M5 downgraded to 'B' from 'A' (BL: 14.60, LCR: 1.19); -- $5.7 million class M6 downgraded to 'B' from 'A-' (BL: 12.91, LCR: 1.05); -- $4.8 million class M7 downgraded to 'CCC' from 'BBB+' (BL: 11.51, LCR: 0.94); -- $4.4 million class M8 downgraded to 'CCC' from 'BBB-' (BL: 10.35, LCR: 0.85); -- $4.4 million class M9 downgraded to 'CC/DR3' from 'BB' (BL: 9.11, LCR: 0.74); -- $4.4 million class B1 downgraded to 'CC/DR3' from 'BB' (BL: 7.99, LCR: 0.65); Deal Summary -- Originators: Wells Fargo (100%) -- 60+ day Delinquency: 22.41% -- Realized Losses to date (% of Original Balance): 0.37% -- Expected Remaining Losses (% of Current balance): 12.24% -- Cumulative Expected Losses (% of Original Balance): 4.74% SASCO 2005-WF4 -- $37.4 million class A1 affirmed at 'AAA', (BL: 51.84, LCR: 3.93); -- $191.6 million class A3 affirmed at 'AAA', (BL: 78.96, LCR: 5.98); -- $194.1 million class A4 affirmed at 'AAA', (BL: 51.88, LCR: 3.93); -- $60.8 million class M1 affirmed at 'AA+', (BL: 43.71, LCR: 3.31); -- $51.0 million class M2 affirmed at 'AA', (BL: 36.55, LCR: 2.77); -- $33.4 million class M3 affirmed at 'AA-', (BL: 32.05, LCR: 2.43); -- $26.5 million class M4 affirmed at 'A+', (BL: 28.43, LCR: 2.15); -- $22.6 million class M5 affirmed at 'A', (BL: 25.33, LCR: 1.92); -- $21.6 million class M6 rated 'A-', placed on Rating Watch Negative (BL: 22.26, LCR: 1.69); -- $14.7 million class M7 downgraded to 'BB' from 'BBB+', removed from Rating Watch Negative (BL: 15.48, LCR: 1.17); -- $14.7 million class M8 downgraded to 'B' from 'BBB', removed from Rating Watch (BL: 13.97, LCR: 1.06); -- $14.7 million class M9 downgraded to 'CCC' from 'BBB-', removed from Rating Watch (BL: 12.56, LCR: 0.95); -- $19.6 million class B1 downgraded to 'CCC' from 'B' (BL: 10.65, LCR: 0.81); Deal Summary -- Originators: Wells Fargo (100%) -- 60+ day Delinquency: 21.50% -- Realized Losses to date (% of Original Balance): 0.75% -- Expected Remaining Losses (% of Current balance): 13.20% -- Cumulative Expected Losses (% of Original Balance): 5.91% SASCO 2005-WMC1 -- $0.8 million class M-1 affirmed at 'AA', (BL: 99.37, LCR: 3.92); -- $18.1 million class M-2 affirmed at 'A', (BL: 63.56, LCR: 2.51); -- $4.5 million class M-3 affirmed at 'A-', (BL: 52.75, LCR: 2.08); -- $8.5 million class M-4 downgraded to 'BB' from 'BBB' (BL: 31.78, LCR: 1.25); -- $3.7 million class M-5 downgraded to 'CCC' from 'BB+' (BL: 22.68, LCR: 0.89); -- $5.7 million class M-6 downgraded to 'C/DR5' from 'B' (BL: 9.29, LCR: 0.37); -- $1.7 million class B downgraded to 'C/DR6' from 'B', removed from Rating Watch (BL: 8.55, LCR: 0.34); Deal Summary -- Originators: WMC (100%) -- 60+ day Delinquency: 40.63% -- Realized Losses to date (% of Original Balance): 1.85% -- Expected Remaining Losses (% of Current balance): 25.37% -- Cumulative Expected Losses (% of Original Balance): 5.22% The rating actions are based on changes that Fitch has made to its subprime loss forecasting assumptions. The updated assumptions better capture the deteriorating performance of pools from 2007, 2006 and 2005 with regard to continued poor loan performance and home price weakness. TAHOMA CDO: Moody's Downgrades Ratings on Eight Note Classes ------------------------------------------------------------ Moody's Investors Service has downgraded ratings of eight classes of notes issued by Tahoma CDO, Ltd. and left on review for possible further downgrade the ratings of two of these classes. The notes affected by the rating action are: Class Description: $304,000,000 Class A-1A Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $21,000,000 Class A-1B Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $325,000,000 Class A-2 Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $200,000,000 Class A-3 Senior Secured Floating Rate Notes due 2047 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca Class Description: U.S. $55,000,000 Class B Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C Class Description: $33,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $32,000,000 Class D Senior Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $10,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2047 -- Prior Rating: Ca -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Trustee on March 25, 2008, of an event of default described in Section 5.1(a) of the Indenture dated Dec. 13, 2006. Tahoma CDO, Ltd. is a collateralized debt obligation backed by a portfolio of CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of further remedies to be pursued by the Controlling Class. Because of this uncertainty, the ratings assigned to Class A-1A Notes and Class A-1B Notes remain on review for possible further action. TALBOTS INC: Financing Arrangements Can Fund 2008 Operating Plan ---------------------------------------------------------------- The Talbots, Inc., clarifies that its recent arrangements with major vendors, along with currently available working capital lines, are expected to be sufficient to fund Talbots' working capital needs under its 2008 operating plan. In a regulatory filing with the Securities and Exchange Commission filing, the company disclosed that on April 9, 2008, The Talbots, Inc., and The Talbots Group Limited Partnership received notification from The Hongkong and Shanghai Banking Corporation Limited that HSBC was no longer prepared to continue making letter of credit facilities available to Talbots. Prior to the notification, Talbots had available from HSBC a letter of credit facility, used to finance the import of merchandise, with a limit of $135 million. Pursuant to its notification, effective as of April 8, 2008, HSBC reduced the company's prior letter of credit facility limit of $135 million to $60 million. HSBC also advised that it will further reduce the company's letter of credit facility limit to $45 million on May 8, 2008, to $30 million on June 9, 2008, to $15 million on July 8, 2008, and the facility will be cancelled on Aug. 8, 2008. Any further letters of credit would be at the bank's discretion and considered on a case by case basis. On April 11, 2008, Mizuho Corporate Bank, Ltd. approved an extension of its revolving credit agreement with Talbots to April 10, 2010. The facility provides for maximum available borrowing of $18 million. The credit facility can be extended annually upon mutual agreement. Interest terms on the unsecured revolving credit agreements are fixed, at the company's option, for periods of one, three, or six months. The company's $130 million letter of credit agreement with Bank of America -- $120 million of which was used to support the importation of merchandise and $10 million of which was used for standby letters of credit -- expired on Feb. 23, 2008. Following Feb. 23, 2008, the company and BofA held discussions regarding the expired agreement and the potential for a new agreement. During that time, BofA continued to allow Talbots to utilize letters of credit under the terms of the expired agreement. On April 7, 2008, the company received verbal notification from BofA that no new facility would be provided and that no new drawings under the company's then $130 million letter of credit facility with BofA would be honored by BofA. The company's major vendors, which represent approximately 75% of Talbots offshore merchandise purchases, have agreed to "open account" terms with payment in 45 days. The revised terms extend the settlement period to 45 days from approximately 22 days on letter of credit purchases, which the company expects will effectively add approximately $40 million to the company's 2008 operating cash flow. Due to the revised payment terms with its major vendors, the company believes that its financing needs with respect to the remaining smaller vendors, representing a minority of its purchases, have been substantially reduced and can be accommodated with a letter of credit line of approximately $50 million. In recent years the Company had letter of credit facilities aggregating approximately $300 million; however, by going to "open account" for the majority of merchandise purchases, the need for credit should significantly decrease. The company believes that approximately $50 million will be sufficient to satisfy the financing needs in purchasing from its smaller vendors. Talbots is in discussion with several financial institutions to supply the $50 million letter of credit and expects resolution of these discussions in the next few weeks. Additionally, Talbots noted that its currently available working capital lines total $165 million, an amount the company believes is sufficient to fund the company's working capital needs, assuming it achieves its 2008 operating plan. The company further noted that adjusting for the $40 million of additional cash flow expected to be provided by the move to "open account," it currently anticipates that 2008 operating cash flow will be approximately $200 million. Assuming the company achieves its 2008 operating plan, it expects to be in compliance with all covenants of its acquisition term loan agreement for fiscal 2008. "While the credit and financial markets are in a state of considerable flux, we have an alternate plan in place, and have revised most of our vendor relationships to maximize the company's financial flexibility and greatly reduce our need for letters of credit," Talbots President and Chief Executive Officer, Trudy F. Sullivan, said. "We are confident in the long-term benefits of these actions as we proceed with the execution of our strategic plan." The regulatory filing disclosed that among other things, the company's existing $135 million letter of credit facility with HSBC would be reduced in increments and would not be renewed after Aug. 8, 2008. The company's other letter of credit for $130 million was not replaced, the company reported. Cotten Timberlake at Bloomberg News says Talbots Inc. share price plunged $3.69, or 29%, to $9.16 at 4:02 p.m. in New York Stock Exchange composite trading after the company disclosed its banks canceled $265 million in letters of credit. Mr. Timberlake says it was the biggest drop since Talbots' initial public offering in November 1993. Headquartered in Hingham, Massachusetts, The Talbots, Inc. (NYSE:TLB) -- http://www.talbots.com/-- is an international specialty retailer and direct marketer of women's apparel, shoes and accessories. The company currently operates a total of 1,422 stores in 47 states, the District of Columbia, Canada and the U.K., with 1,149 stores under the Talbots brand name and 273 stores under the J. Jill brand name. Both brands target the age 35 plus customer population. TEGRANT CORP: S&P Chips Rating to B- from B on Weak Performance --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Tegrant Corp. to 'B-' from 'B' and placed the rating on CreditWatch with negative implications. At the same time, S&P also lowered the ratings on the DeKalb, Illinois-based company's $340 million senior secured facilities and placed them on CreditWatch. The downgrade reflects Tegrant's weaker-than-expected operating performance, highly leveraged financial profile, and S&P's expectation that the company would be challenged to meaningfully improve its operating performance in 2008 because of generally weak economic conditions and elevated energy and raw material costs. "We are also concerned about the increased probability of a financial covenant violation in 2008 that could result in constrained liquidity or, if amended, meaningfully higher credit margins on the company's borrowings," said Standard & Poor's credit analyst Anna Alemani. The CreditWatch listing indicates another downgrade is possible if operating performance weakens further during the first half of 2008, or if the company is unable to comply with, or successfully renegotiate, its financial covenants. Tegrant's liquidity is supported by a modest cash balance and reasonable availability under the $50 million credit facility. S&P note that the financial covenants are of particular concern beginning from the second half of 2008 as compliance requirements in the company's credit agreements step-down to a more restrictive level. If operating results weaken further, S&P would expect the company to take the necessary steps to remedy any potential covenant issues while maintaining sufficient liquidity to support the current ratings. S&P will resolve the CreditWatch after the company has addressed the risk of a covenant violation in 2008, and S&P have an indication that operating performance has been stabilized or is likely to improve. TOURMALINE CDO: Poor Credit Quality Cues Moody's to Cut Ratings --------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade ratings of four classes of notes issued by Tourmaline CDO I Ltd. The classes affected by the rating actions are: Class Description: $487,500,000 Class I Senior Variable Funding Floating Rate Notes Due 2040 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa2, on review for possible downgrade Class Description: $112,500,000 Class II Senior Floating Rate Notes Due 2040 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $64,500,000 Class III Senior Floating Rate Notes Due 2040 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $51,000,000 Class IV Mezzanine Floating Rate Deferrable Notes Due 2040 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on April 2, 2008, as reported by the Trustee, of an event of default caused by a failure of the Senior Par Value Coverage Ratio to be greater than or equal to 100%, as described in Section 5.1(d) of the Indenture dated Sept. 29, 2005. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard, Moody's has received notification from the Trustee that a majority of the Controlling Class has declared the principal of and accrued and unpaid interest on the Notes to be immediately due and payable. The rating downgrades taken today reflect the increased expected loss associated with the tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the event of default. Because of this uncertainty, the ratings assigned to the Class I, II, III and IV Notes remain on review for possible further action. Tourmaline CDO I Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities, CMBS securities, CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS, CMBS and CDO securities. TRICOM SA: Hearing for Case Examiner Adjourned Sine Die ------------------------------------------------------- Chief U.S. Bankruptcy Judge Stuart Bernstein of the U.S. Bankruptcy Court for the Southern District of New York, on April 2, 2008, adjourned indefinitely the hearing on the proposed appointment of an examiner filed by Bancredit Cayman Limited, according to a report by Bloomberg News. Bancredit Cayman has sought the appointment of an examiner to investigate the alleged misconduct of Tricom SA and its debtor- affiliates, the Ad Hoc Committee formed by certain holders of Unsecured Financial Claims against Tricom, and other parties who had anything to do with the negotiation and formulation of the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization. Bancredit Cayman seeks to recover $120,000,000 from Tricom, S.A., which was allegedly looted from the bank by its director, Manuel Arturo Pallerano, who is also the majority controlling owner of Tricom. The alleged transfer of funds caused Bancredit Cayman to be insolvent. Examiner Appointment On behalf of Bancredit Cayman, Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP, in New York, told the Court that a special committee was appointed by the Debtors' Board of Directors to investigate the transaction made by Manuel Arturo Pellerano sometime in December 2002, wherein he allegedly unlawfully transferred $70,000,000 in funds from Bancredit Cayman Limited to Tricom, S.A. Hunton & Williams LLP and BDO Seidman LLP were retained by the Special Committee to assist in the investigation. The Special Committee, Mr. Brock said, was not given authority to obtain all of the information, which was necessary to do a thorough investigation. The Special Committee did not have any subpoena powers, and it was thus not able to obtain all of the documents and information it sought, he said. According to Mr. Brock, the Special Committee was terminated in May 2007, before it was able to provide its Final Report to Tricom, and subsequently counsel to the Special Committee completed the Final Report which was provided to Tricom in July 2007. Nevertheless, the Special Committee made available to the Tricom Board and senior management an initial report in September 2005 which purported to summarize the Special Committee's findings through that time. Mr. Brock noted that Tricom characterizes the Special Committee's findings in a "bewildering manner" when Tricom stated that "[v]arying conclusions can be reached as to whether we properly accounted for the [December 2002 Transaction] based on different hypothetical fact scenarios" and that under certain of those scenarios the December 2002 Transaction did not qualify as equity, but "should be classified outside of permanent equity as 'mezzanine financing'." The Special Committee's findings were based only on hypothetical fact scenarios, and not specific factual findings, Tricom asserted. Bancredit Cayman intends for the examiner to investigate and report on: (i) the findings of the Special Committee and BDO Seidman, and the actions taken by the Debtors and the affiliates of Mr. Pellerano in response to the report; and (ii) the Debtors, the Ad Hoc Committee, and any self-dealing by Mr. Pellerano and his affiliates. Mr. Brock said that a Court-approved examiner is necessary to review the findings of the Special Committee, considering how the Debtors' reacted to the findings and how the Special Committee was prevented from obtaining pertinent information from parties believed to be under the control of Mr. Pellerano, his family members and affiliated companies, including GFN Corp., Ltd. Mr. Brock said that contrary to the Debtors' characterization of the December 2002 transaction as equity in its financial statements, the Special Committee's findings show that the transaction yielded debt for accounting purposes. He added that if the transaction cannot be deemed to be equity but debt, the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization Plan, therefore, had not been proposed in good faith. According to Mr. Brock, the Debtors have not also implemented most of the Special Committee's recommendations, including the creation of an independent audit committee and engagement with an internationally recognized auditing firm. Debtors, et al. Object Tricom S.A., and its affiliates want the Court to deny the proposed appointment of an examiner. Representing the Debtors, Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York, says that Bancredit Cayman did not provide facts sufficient to justify the cost and delay involved with the appointment and the corresponding investigation. He adds that the bank merely relied on a selective discussion of certain disclosures contained in the Debtors' Disclosure Statement and annual reports. Mr. Nashelsky further says that the information requested by Bancredit Cayman has long been available including the Special Committee's reports, however, the bank chose to abandon its effort to prove its claim against the Debtors. "Admittedly, the representatives abandoned their effort to discover the facts for about 14 months," Mr. Nashelsky notes. "They now ask the Court to remedy their own neglect because the Debtors now seek to complete one of the last steps of their restructuring, a goal publicly announced by the Debtors well over a year ago." Mr. Nashelsky says that all parties-in-interest are assured that the Reorganization Plan was properly negotiated and provides fair treatment. "No member of the Ad Hoc Committee is connected with the [6] affiliated creditors," Mr. Nashelsky clarifies, adding that the Ad Hoc Committee, the affiliated creditors, and the Debtors retained separate legal counsel and financial advisors. The affiliated creditors are Balking Trading, Inc., Eastern Power Corporation, Editorial AA, S.A., Ellis Portfolio, S.A., Minstar Ventures, Ltd., and Porter Capital, Ltd. Mr. Nashelsky also clarifies that the Reorganization Plan places majority control of the reorganized Debtors to the holders of unsecured financial claims not affiliated with Mr. Pellerano or the affiliated creditors. "Following confirmation of the [reorganization] plan, such creditors will own the vast majority of the stock to be issued by the parent company of the reorganized Debtors, and will control the [reorganized Debtors] Board of Directors," Mr. Nashelsky explains. He adds that the affiliated creditors will receive prescribed minority voting protections under the terms of the Reorganization Plan. Mr. Nashelsky further clarifies that Bancredit Cayman could still pursue its claims against the Debtors even after the confirmation, since nothing in the Reorganization Plan waives or discharges the bank of its rights. On the contrary, the Debtors cannot survive a protracted proceeding that may result from the appointment of an examiner in light of the cost and uncertainty attendant to it, he points out. In separate statements, the Ad Hoc Committee and the affiliated creditors also urge the Court to deny the proposed appointment. The parties contend that the appointment of an examiner merely seeks to prove Bancredit Cayman's claim that does not have any legal basis, and delay the confirmation of the Reorganization Plan. They point out that the Court is not required to appoint an examiner to advance the litigation interests of one party to a two party dispute, even under the mandatory provisions of Section 1104(c)(2) of the Bankruptcy Code. With respect to Bancredito (Panama), S.A.'s contention, the Ad Hoc Committee says that Bancredito Panama has yet to file any action against the Debtors. Bancredito Panama's own public filings show that its claim is not actually directed against the Debtors but various third parties, says the Ad Hoc Committee. Bancredit Cayman Retaliates Bancredit Cayman contends that the proposed appointment is not a two-party dispute but is in the interests of all creditors, including the general unsecured creditors who are not represented before the Court. "The reorganization plan's basic scheme relegates the Class 7 creditors to proceeding against the equity of the reorganized [Debtors], and the adequacy of that equity is not only unknown but appears plainly inadequate," says Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP, in New York. According to Mr. Brock, any diminution of estate property is detrimental to Class 7 creditors, who have no voice in the proceedings. "The reorganization plan accomplishes precisely such a diminution of property, and does so for the benefit of insiders by releasing and indemnifying them from potential claims and paying the affiliated creditors directly in secured debt," Mr. Brock points out. He says that this disposition of estate property has not been scrutinized and adequately disclosed, and that only an independent examiner can provide the transparency and assure that the distributions are proper. Mr. Brock says that a 60 to 90-day investigation will not harm the Debtors' reorganization. With respect to the allegation that Bancredit Cayman did nothing to pursue the discovery, Mr. Brock relates that the bank held off pursuing any court action to enforce its subpoenas after it was contacted by the Special Committee to ask about its claim. Believing that it would be the beginning of a genuine attempt to resolve its claim, Bancredit Cayman's representative Richard Fogerty met with the Special Committee in May 2007 to discuss about the claim, Mr. Brock relates. Mr. Brock says that the bank also sent letters to the Special Committee and to the Debtors' chief restructuring officer Kevin Lavin, however, it did not receive any response from both parties. In late November 2007, Bancredit filed its adversary proceeding against the Debtors, to which the Debtors did not answer and instead filed a request for its dismissal in February 2008. The possibility of any discovery in the adversary proceeding was stayed after the Debtors filed for Chapter 11. Appointment is Warranted Diana G. Adams, United States Trustee for Region 2, and Bancredito Panama urge the Court to approve the appointment of an examiner. The U.S. Trustee generally argues that the appointment is warranted given that the unsecured debts in the Debtors' cases far exceed $5,000,000. Meanwhile, Bancredito Panama asserts that the appointment serves the interest of all creditors by ensuring that the valuations and claims supporting the reorganization plan are not tainted by fraud. About Bancredit Bancredit (Cayman) Limited is a Cayman Islands banking institution within a Dominican Republic group of companies. Bancredit is in liquidation proceedings before the Grand Court of the Cayman Islands since 2004. Richard E L Fogerty and G James Cleaver of Kroll (Cayman) Limited were appointed by the Cayman Islands Court to act as Bancredit's Joint Official Liquidators on May 31, 2004. The Liquidators, on the estate's behalf, filed a petition under Chapter 15 of the Bankruptcy Code on May 10, 2006, before the U.S. Bankruptcy Court for the Southern District of New York in Manhattan (Case No.: 06-11026). Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP in New York, represents the Liquidators in the Chapter 15 case. The Liquidators estimated that the company had more than $100 million in total assets and $215 million in total debts at the time of the Chapter 15 filing. On November 16, 2007, a complaint was lodged against Tricom SA under docket reference Bancredit Cayman Limited v. Tricom, SA Adversary No. 7-2595 before a New Jersey court. Bancredit asserted at least $120,552,000 in claims against Tricom. The Liquidators, in a January 2008 report to Bancredit unsecured creditors, said Bancredit may be unlikely to receive repayment in full of the amounts it provided to Tricom given Tricom's apparent insolvency. However, the Liquidators said they would maintain the claims so that Bancredit would have the right to be involved in restructuring negotiations. About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. (Tricom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) TRICOM SA: Wants Bancredit Claim Pegged at $120,000 --------------------------------------------------- Pursuant to Section 502(c) of the Bankruptcy Code, Tricom SA and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of New York to: (i) estimate the claim of Bancredit Cayman Limited at no more than $120,000; and (ii) estimate the claim of Bancredito (Panama), S.A., at zero. Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York, says the proposed estimation of the claims is merely to avoid delay in the confirmation of the Debtors' Prepackaged Joint Chapter 11 Plan of Reorganization. "Although the deadline to file objections to the reorganization plan has yet to expire, the [Debtors] fully anticipate that [Bancredit Cayman's] representatives will continue their obstructionist tactics in a misguided attempt to derail the reorganization," Mr. Nashelsky points out. Bancredit Cayman, and Bancredito Panama have proposed the appointment of an examiner in Tricom's case before confirmation proceedings related to Tricom's plan commences. They also proposed the deposition of the Debtors, GFN Corp., Ltd., and its affiliates. Bancredit Cayman seeks to recover $120,000,000, while Bancredito Panama asserts a claim for $70,000,000. The Debtors say they cannot afford to wait for the outcome of a determination on the merit of those claims since it would delay and impede the reorganization. In connection with the proposed estimation of claims, the Debtors seek the Court's authority to: (i) hear legal argument concerning the legal obstacles that representatives of Bancredit Cayman and Bancredito Panama will face in pursuing their claims in terms of venue and ability to state legally cognizable claims; and (ii) submit declarations concerning foreign law without requiring foreign legal experts to travel to the United States of America for live testimony. The Ad Hoc Committee supports the Debtors' request. About Bancredit Bancredit (Cayman) Limited is a Cayman Islands banking institution within a Dominican Republic group of companies. Bancredit is in liquidation proceedings before the Grand Court of the Cayman Islands since 2004. Richard E L Fogerty and G James Cleaver of Kroll (Cayman) Limited were appointed by the Cayman Islands Court to act as Bancredit's Joint Official Liquidators on May 31, 2004. The Liquidators, on the estate's behalf, filed a petition under Chapter 15 of the Bankruptcy Code on May 10, 2006, before the U.S. Bankruptcy Court for the Southern District of New York in Manhattan (Case No.: 06-11026). Timothy T. Brock, Esq., at Satterlee Stephens Burke & Burke LLP in New York, represents the Liquidators in the Chapter 15 case. The Liquidators estimated that the company had more than $100 million in total assets and $215 million in total debts at the time of the Chapter 15 filing. On November 16, 2007, a complaint was lodged against Tricom SA under docket reference Bancredit Cayman Limited v. Tricom, SA Adversary No. 7-2595 before a New Jersey court. Bancredit asserted at least $120,552,000 in claims against Tricom. The Liquidators, in a January 2008 report to Bancredit unsecured creditors, said Bancredit may be unlikely to receive repayment in full of the amounts it provided to Tricom given Tricom's apparent insolvency. However, the Liquidators said they would maintain the claims so that Bancredit would have the right to be involved in restructuring negotiations. About Tricom Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. (Tricom Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) TRICOM SA: Gets Permission to Hire Chapter 11 Professionals ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Tricom S.A. and its affiliates to employ professionals in their bankruptcy cases: 1. Morrison & Foerster LLP as bankruptcy counsel; 2. Squire, Sanders & Dempsey Pena Prieto Gamundi as Special Dominican Counsel; 3. Thompson Hine LLP as U.S. Corporate and Securities Counsel and Conflicts Counsel; 4. FTI Consulting, Inc. as restructuring consultants; 5. Sotomayor & Associates LLP as Auditors, Tax Advisors and Regulatory Compliance Advisors; and 6. Kurtzman Carson Consultants LLC as Claims and Balloting Agent. Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber-optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08-10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of $327,600,000 and total debts of $764,600,000. (Tricom Bankruptcy News; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000). TRM CORP: Net Loss Slides to $8 Million in Year ended December 31 ----------------------------------------------------------------- TRM Corporation reported financial results for fourth quarter and full year ended Dec. 31, 2007. For three months ended Dec. 31, 2007, the company reported net income of $906,000 compared to net loss of $15.240 million for the same period in the previous year. For full year 2007, the company's net loss was $8.427 million compared to $120.091 million in 2006. "2007 was a transitional year for TRM as a company," Richard Stern, president and CEO of TRM Corporation, stated. "We began the year addressing our balance sheet issues and finished the year focused on our income statement and operational results. Towards that end, I am pleased with all that we accomplished. Most importantly, we experienced improved operating results, largely as a result of our ongoing restructuring effort. In addition, we completed the Triple DES compliance project that was undertaken throughout 2007 and we continue to optimize our ATM operations and contracts." "We continued to experience improved operating results stemming from the continued vigilance regarding our cost structure," Mr. Stern continued. "In the fourth quarter, we reported net income and positive Adjusted EBITDA from continuing operations, and we expect that trend to continue in 2008. We are also further encouraged by the fact that our average withdrawals per unit per month have been maintained at a level consistent with 2006, which points to our focus on maintaining the quality of our existing estate." TRM Corporation reported an operating loss of $8.5 million and loss from continuing operations of $13.7 million for the full year 2007. This compares to an operating loss of $55.8 million and loss from continuing operations of $53.6 million in 2006. The company notes that 2006 results were largely influenced by impairment charges of goodwill and intangible assets of $43.3 million. The company had cash and cash equivalents of $3.9 million at Dec. 31, 2007, compared to $4.8 million at Dec. 31, 2006. As of Dec. 31, 2007, the company had $2.1 million of term loans outstanding. About TRM Corporation Headquartered in Portland, Oregon, TRM Corporation (Nasdaq: TRMM) -- http://www.trm.com/-- is a consumer services company that provides convenience ATM services in high-traffic consumer environments. TRM's ATM customer base is widespread, with retailers throughout the United States. TRM operates the second largest non-bank ATM network in the United States. Going Concern Doubt PricewaterhouseCoopers LLP, in Portland, Oregon, expressed substantial doubt about TRM Corp.'s ability to continue as a going concern after auditing the company's's consolidated financial statements for the years ended Dec. 31, 2006, and 2005. The auditing firm reported that the company incurred a net loss for 2006 resulting in its inability to meet certain financial covenants of its financing agreement with GSO Origination Funding Partners LP and other lenders. On Nov. 20, 2006, the company entered into amendments that restructured its loans and waived the failure to meet the loan covenants. Under the restructured loan agreements principal payments of $69.9 million were due in the first quarter of 2007. During January 2007, the company sold its Canadian, United Kingdom and German ATM businesses and its United States photocopy business and used $98.4 million from the proceeds of those sales to make principal and interest payments under these loans, leaving a remaining balance of principal plus accrued interest of $2.0 million as of Jan. 31, 2007. The company is uncertain whether its remaining operations can generate sufficient cash to comply with the covenants of its restructured loan agreements and to pay its obligations on an ongoing basis. UAL CORP: Fitch to Hold 'B-' ID Ratings Due to Fuel Costs, Etc. --------------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of UAL Corp. and its principal operating subsidiary United Airlines, Inc. as: UAL Corp. -- Issuer Default Rating at 'B-'; United Airlines, Inc. -- IDR at 'B-'; -- Secured bank credit facility (term loan and revolving credit facility) at 'BB-/RR1'. The Rating Outlook for UAL and United has been revised to Stable from Positive. Fitch has also assigned a senior unsecured rating of 'CCC' with a recovery rating of 'RR6' to United's outstanding unsecured debt. The bank facility rating applies to approximately $1.3 billion of funded term loan debt, and the unsecured rating applies to approximately $1.4 billion of outstanding notes. Ratings for UAL and United reflect the airline's highly levered balance sheet, volatile cash flow generation capacity, and ongoing susceptibility to intense fuel and revenue shocks in an industry that remains particularly vulnerable to macroeconomic risk. Following two years of improvements in cash flow generation and steady debt reduction in 2006 and 2007, United faces an increasingly difficult operating environment in 2008 that will likely lead to some deterioration in credit quality over the next few quarters. The rapid rise in crude oil and jet fuel prices since the start of the year has highlighted the unique vulnerability of the airline industry to energy price spikes at a time when the onset of a U.S. recession may undermine U.S. carriers' ability to pass on rising fuel costs in the form of higher fares. Despite the steady progress made toward balance sheet repair since United emerged from bankruptcy protection in 2006, Fitch believes that the worsening industry operating environment and the carrier's weakened free cash flow generation potential will preclude credit profile strengthening over the near term. In a prolonged high fuel cost scenario that assumes no significant pull-back in crude oil and jet fuel prices through early 2009, United and all of the major U.S. carriers will face intensifying liquidity pressures - particularly if an extended economic slowdown drives a sharp reduction in air travel demand. However, it is important to note that United's substantial cash balances and unencumbered asset holdings give it some room to maneuver with respect to liquidity preservation in a deep industry downturn. Estimated March 31 unrestricted cash balances in the $2.9 billion to $3.0 billion range provide a significant cushion for United to absorb a heavy energy and demand shock without reaching distressed liquidity levels. Moreover, United's current unencumbered fleet of 113 aircraft could be financed to shore up cash balances if free cash flow trends deteriorate further. Still, Fitch remains cautious about the risk of a follow-on fuel price spike and a slowdown in the airline's unit revenue growth rate for 2008 and 2009. A near-term revision of the Rating Outlook to Negative within the next few months is therefore a real possibility if operating trends worsen. In its late March investor update, United estimated Q1 average jet fuel prices of $2.74 per gallon. This compares with a 2007 average mainline fuel price of $2.18 per gallon. Fitch estimates that the annual mainline fuel cost impact of a 10-cent change in jet fuel prices is approximately $220 million. A full year 2008 average fuel price of $3.00 per gallon, therefore, would translate into approximately $1.8 billion of incremental mainline fuel costs this year. Credit metrics will likely worsen this year as free cash flow turns negative and opportunities for further debt reduction beyond the $678 million in scheduled 2008 maturities disappear. United's empty aircraft order book is a positive now, with no near-term aircraft capital commitments that would require access to debt capital markets. In light of the need to focus on liquidity management in the current operating environment, Fitch believes it is unlikely that additional cash will be returned to shareholders in 2008. United made a $257 million cash distribution to shareholders in January. A tight fixed charge coverage covenant in United's bank facility could become an issue later in the year if fuel prices remain at or above current levels and revenue trends weaken. United does not face similar risks with respect to two other credit facility covenants. The Delta-Northwest merger announcement increases the likelihood of a follow-on consolidating transaction involving United or other U.S. carriers. Execution risk related to the closing of any airline merger by early 2009 is significant, particularly in light of the weakening operating environment and organized labor's skepticism about the merits of consolidation. Importantly, any capacity rationalization and cost savings linked to mergers would have to wait until early 2009 at the earliest-following a lengthy antitrust review by the U.S. Department of Justice. In Fitch's view, industry consolidation could lay the foundation for more rational capacity decision-making in highly competitive domestic markets and should mitigate the impact of economic cycles on airline cash flow. Negative rating actions (either an Outlook revision to Negative or a downgrade of the IDR into the 'CCC' category) could follow if sustained high jet fuel prices (above $3.00 per gallon) through the summer, coupled with weakening revenue per available seat mile trends and softening air travel demand drive substantially negative free cash flow and force United to borrow heavily to avoid intensifying liquidity pressure moving into 2009. US AIRWAYS: Fitch Affirms 'CCC/RR6' Senior Unsecured Debt Rating ---------------------------------------------------------------- Fitch Ratings has affirmed the debt ratings of US Airways Group, Inc. as: -- Issuer Default Rating at 'B-'; -- Secured term loan rating at 'BB-/RR1'; -- Senior unsecured rating at 'CCC/RR6'. Fitch's ratings apply to approximately $1.7 billion in outstanding debt. The Rating Outlook has been revised to Stable from Positive. Similar to the ratings of other U.S. network airlines, US Airways' ratings reflect its highly leveraged capital structure and ever- present industry risks. However, these risks are mitigated somewhat by US Airways' solid liquidity position and manageable cash obligations over the near to medium term. Over the past year, the U.S. airline industry environment has fallen back into a period of significant uncertainty, as jet fuel prices have risen to record levels. At the same time, the weakening U.S. economy has heightened concern that demand among both business and leisure travelers could decline in 2008. Although the airline is working to grow its ancillary revenue streams, the unfavorable combination of potentially slower passenger unit revenue growth and much higher fuel costs could result in a decline in US Airways' cash liquidity by year-end 2008, and liquidity could be significantly challenged in 2009 should weak revenue trends and high fuel costs persist into next year. Adding to the cost and revenue challenges facing the carrier in the current environment, significant cash needs tied to heavy aircraft deliveries over the next several years will drive an increase in the airline's debt levels. However, cash needs tied to debt maturities are expected to remain relatively low over the medium term. Assuming no significant decline in jet fuel prices through early 2009, US Airways, along with all of the major U.S. carriers, will face intensifying liquidity pressures, particularly if a prolonged economic slowdown results in a sharp reduction in air travel demand. Despite having a relatively strong fuel hedging position, Fitch estimates that US Airways' fuel costs alone could rise by nearly $800 million in 2008, while non-fuel unit costs are forecast to rise by 3% to 5%, partially due to reduced capacity. It is important to note, however, that US Airways' substantial liquidity position provides a cushion to help it withstand near- term cash pressures. Excluding $353 million of investments in noncurrent auction-rate securities, US Airways' unrestricted cash and marketable securities balance stood at $2.2 billion at Dec. 31, equal to 19% of the company's full-year 2007 revenue. US Airways' most significant financial covenant is a requirement in its term loan agreement to maintain an unrestricted cash and marketable securities balance of at least $1.25 billion, well below its current level. Longer term, however, Fitch remains cautious about the risk of a further spike in fuel prices and a slowdown in the airline's unit revenue growth rate for 2008 and 2009. A near-term revision of the Rating Outlook to Negative within the next few months is possible if operating trends worsen. Compared with the other network carriers, US Airways' near-term cash obligations tied to debt maturities are relatively low. Debt maturities do not rise above $145 million in any year prior to 2014, when the company's secured term loan comes due. Debt levels will likely rise over the next several years, however, as the airline continues to overhaul its fleet and take delivery of new Embraer and Airbus aircraft. US Airways currently has 148 aircraft on firm order, more than any other legacy carrier, with 19 deliveries scheduled in 2008. US Airways plans to use the new aircraft largely to replace retiring aircraft, primarily Boeing 737s and 767s, although it could also use new aircraft to grow capacity somewhat, if needed. Deliveries stretch out to 2017 and include 22 of Airbus's future A350-XWB wide body aircraft. Cash capital spending is forecast to be $385 million in 2008. Although US Airways successfully merged its US Airways and America West operations under a single Federal Aviation Administration operating certificate last year, the airline continues to work through challenges related to its union-represented employees. Among its major workgroups, the airline currently has a unified contracts in place with is passenger service workers and its mechanics and just reached a tentative contract with its fleet service workers last week. However, US Airways' pilots and flight attendants continue to work under the terms of their respective US Airways or America West contracts. Discussions among the pilots on a combined seniority list have bogged down as a group of former US Airways pilots seeks to form a new union separate from the Air Line Pilots Association. Although the airline can operate indefinitely with the current labor situation, reaching single contracts with the remaining work groups will help the airline achieve further productivity savings among its unionized employees. With a relatively small international network, US Airways is more exposed to the strength of the domestic market than other U.S. network carriers. Currently, only about 20% of the airline's mainline capacity is deployed internationally, and of that 44% is in Latin American and Caribbean markets that cater primarily to leisure travelers. Load factors on the more lucrative Atlantic routes have improved significantly over the past year, however, with the airline reporting a March mainline load factor of 81.5% on its European flights, in-line with the other network carriers. To further diversify its revenue base, US Airways plans to continue adding international routes over the next several years, with a goal of adding three to four international destinations annually from its Philadelphia hub. In March, the carrier launched its Philadelphia to London-Heathrow flight, and next year it plans to begin flying from Philadelphia to Beijing. Although these additional flights will help to reduce the airline's reliance on the U.S. domestic market somewhat, it will not approach the level of international flying seen at the other legacy carriers in the near term. The Delta-Northwest merger announcement could drive other U.S. carriers into similar follow-on transactions. Although US Airways continues to be a vocal proponent of industry consolidation, it is unclear how the airline would participate in any potential mergers or acquisitions. Execution risk related to the closing of any airline merger by early 2009 is significant, particularly in light of the weakening operating environment and organized labor's skepticism about the merits of consolidation. Importantly, any capacity rationalization and cost savings linked to mergers would have to wait until at least early next year, following a lengthy antitrust review by the U.S. Department of Justice. In Fitch's view, industry consolidation could lay the foundation for more rational capacity decision-making in highly competitive domestic markets and should mitigate the impact of economic cycles on airline cash flow. Looking ahead, industry conditions are expected to remain challenging for at least the next year, as airlines struggle to offset record-high jet fuel prices with higher revenue and lower non-fuel costs. Although demand fundamentals have held up thus far despite the weakening U.S. economy, concern is growing that industry demand could weaken in the next few months. Potentially significant cutbacks in domestic capacity plans by virtually all of the U.S. carriers will help to support industry unit revenue in the face of a potential slackening in demand, but the airlines will continue to struggle with rapidly increasing unit costs. Legacy carrier liquidity remains relatively strong, however, and the U.S. airlines have entered the downward part of the cycle in a better financial position than they were in during the last downturn. Fitch could revise US Airways' Rating Outlook to Negative or downgrade the IDR to 'CCC' if high fuel prices, combined with weakening revenue trends through the summer, pressure free cash flow levels and erode liquidity later in the year. UTILITY SERVICE: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Utility Service Express, LLC 11014 Sunset Hills Road Reston, VA 20190 Bankruptcy Case No.: 08-11847 Type of Business: The Debtor provides plumbing services or contractors, air conditioning equipment, domestic air purifiers and cleaners, gas burners, electric generators, humidifiers, water heaters, and emergency generators. See http://www.usetomwarner.com/ Chapter 11 Petition Date: April 8, 2008 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Bruce W. Henry, Esq. (ksp@henrylaw.com) Henry & O'Donnell, P.C. 4103 Chain Bridge Road Suite 100 Fairfax, VA 22030 Tel: (703) 273-1900 Fax: (703) 273-6884 http://www.henrylaw.com/ Estimated Assets: $100,000 to $1 million Estimated Debts: $1 million to $100 million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Thomas F. Warner Business Loan $948,075 1855 Saint Francis Street, Apt. 208 Reston, VA 20190 Wages $54,000 $10,950 Lyon, Conklin & Co., Inc. Vendor $298,284 P.O. Box 827808 Philadelphia, PA 19182-7808 Barbara B. Warner Business Loan $221,593 1480 Evans Farm Drive, Ste. 102 McLean, VA 22101 Rent $8,773 American Express Business items $69,710 National Directory Advertising Advertising $35,304 Thomas Somverville Co. Vendor $31,227 Citibank Aadvantage Credit card $26,396 American Boiler Vendor $17,366 R.E. Michel Co. Vendor $17,194 D&B Distributing Co. Vendor $15,181 Capital One Credit card $13,124 Capital Rentals Vendor $11,698 Noland Co. Vendor $10,899 Hughes Supply, Inc. Vendor $10,191 Midwest-Master Card Business expenses $8,762 E16on Card Services Credit card $8,403 VASOGEN INC: Lays Off 85% Workforce Under Restructuring Plan ------------------------------------------------------------ Vasogen Inc. implemented a strategic restructuring plan to significantly reduce its cash burn rate and focus its efforts on opportunities that the Board and management believe are most likely to provide long-term shareholder value. This plan re- focuses Vasogen's resources on the development of its VP series of drugs while the company seeks alternatives to fund further development of the Celacade(TM) System, the company's technology for the treatment of chronic heart failure. As a result of this restructuring, which reduces Vasogen's work force by about 85%, the company expects to have about two years of cash resources. Snag in Clinical Trial of Celacade As previously reported, Vasogen has encountered significant delays with the FDA regarding the design of ACCAIM II, a clinical trial to support an application for U.S. market approval of Celacade for the treatment of patients with NYHA Class II heart failure. Given these delays, Vasogen's current lack of access to capital, and the uncertainty surrounding the FDA's continued opposition to a relatively small trial utilizing a Bayesian statistical design, the company has placed on hold plans to fund ACCLAIM II. The company will, however, continue to work with the FDA towards finalizing the design of ACCLAIM II, and will evaluate potential strategic alternatives to fund the study. In addition, subsequent to the recent receipt of a much lower than anticipated revenue forecast for Celacade from its European marketing partner, Grupo Ferrer, Vasogen plans to discontinue operational and financial support for European commercialization and is exploring alternative strategies with Ferrer. Ferrer's sales forecast was impacted by the uncertainty surrounding ACCLAIM II. "We cannot financially justify maintaining our existing infrastructure in light of the regulatory challenges facing ACCLAIM II and the revenue forecast received from Ferrer. That said, the science underlying Celacade remains strong and we continue to believe that the rationale for its therapeutic use in the treatment of certain heart failure patients was evident in the subgroup analysis from the ACCLAIM trial. For these reasons, we plan to explore opportunities to support the further development of Celacade in the US and continue working with Ferrer to evaluate alternative strategies to support the commercialization of Celacade in Europe," commented Chris Waddick, President and CEO of Vasogen. "This has been a challenging process, but through the measures announced today we believe that we have a plan that allows us to conserve our financial resources, while executing a strategy focused on rebuilding shareholder value. We are deeply grateful for the contributions of the many talented and dedicated employees whose positions are impacted by this restructuring, and thank them for all their hard work." "We have developed significant expertise and intellectual property in the area of immune system modulation to treat inflammatory disorders, with data acquired from numerous preclinical models of human disease. I continue to be very excited by the potential of our VP series of drugs including VP015 and VP025," commented Dr. Anthony Bolton, Chief Scientific Officer of Vasogen. "Extensive preclinical research has been conducted with both of these drug candidates and we are impressed with their ability to reduce markers of inflammation and improve outcome measures across a number of experimental models. The understanding of the role of inflammation in a wide range of human diseases continues to grow and treatments that regulate different aspects of inflammation have become a key focus for researchers internationally." The company will incur cash expenditures of about $2.6 million during the second quarter related to the restructuring. Vasogen has also retained JMP Securities to assist it in exploring other potential strategic alternatives with the goal of enhancing shareholder value. About the VP Series of Drugs Vasogen's VP series of drug assets are based on synthetic three- dimensional phospholipid-based structures with specific groups of surface molecules, and are designed to modulate cytokine levels and control inflammation. VP025, the lead product candidate from this new class of drugs, is currently being developed for the treatment of neuro-inflammatory disorders. VP015 is an additional product candidate from this new class of drugs, with the potential to treat other inflammatory conditions. Many neurological conditions, including Alzheimer's disease, Parkinson's disease, and amyotrophic lateral sclerosis, are associated with an inflammatory response in the nervous system. The company has completed a considerable amount of preclinical work that has demonstrated the ability of VP025 to reduce inflammation in models of certain neurodegenerative disorders, including Parkinson's disease, memory loss models, ALS, and retinal inflammation in a model of diabetes. First Quarter 2008 Results At Feb. 29, 2008, our cash and cash equivalents totaled $19.9 million, compared with $23.5 million at Nov. 30, 2007. The company incurred a net loss for the three months ended Feb. 29, 2008, of $5.3 million, or $0.24 per common share, compared with a net loss of $7.7 million, or $0.47 per common share for the same period in 2007. A key driver of this decrease was a $1.6 million reduction in expenses resulting from the repayment of the senior convertible notes in April 2007, and lower infrastructure and other support costs driven by lower employee numbers in 2008. For the three months ended Feb. 29, 2008, research and development expenses decreased to $2.8 million from $3.0 million for the comparable period in 2007. During the first quarter of 2008, these costs were incurred for the initial commercialization of Celacade in Europe and for preparations for ACCLAIM II, a study designed to evaluate the Celacade technology for the treatment of patients with NYHA Class II heart failure. General and administration expenses were $2.7 million for the three months ended Feb. 29, 2008, compared to $3.6 million for the same period in 2007 as a result of lower employee numbers. A copy of the company's press release on its first quarter 2008 results can be obtained in pdf format at http://www.vasogen.com/pdf/ResultsQ12008.pdf About Vasogen Mississauga, Ontario-based Vasogen Inc. (NASDAQ:VSGN; TSX:VAS) -- http://www.vasogen.com/-- is a biotechnology company focused on the research and commercial development of therapies designed to target the destructive inflammatory process associated with the development and progression of cardiovascular and neurodegenerative disorders. The company's lead product, Celacade, is designed to activate the immune response to apoptosis, a physiological process that regulates inflammation. Celacade has received European regulatory approval for chronic heart failure and is being marketed in the European Union by Ferrer Internacional S.A. Celacade is in late-stage clinical development for the treatment of chronic heart failure in the United States. Vasogen is also developing a class of drugs for the treatment of certain neuro-inflammatory disorders. VP025 is the lead drug candidate from this class. VICORP RESTAURANTS: Bankruptcy Filing Cues S&P to Vacate 'D' Rtng. ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'D' rating on Denver, Colorado-based VICORP Restaurants Inc. and the '6' recovery rating on the senior unsecured notes due 2011. This action follows the company's voluntary filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code. VITALSIGNS HOMECARE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Vitalsigns Homecare, Inc. fka Holden Homecare Services 238 Littleton Road Westford, MA 01886 Bankruptcy Case No.: 08-41101 Type of Business: The Debtor is a home care provider that is nationally accredited by the Community Hospital Accreditation Program. See http://www.vitalsignshc.com/ Chapter 11 Petition Date: April 9, 2008 Court: District of Massachusetts (Worcester) Judge: Joel B. Rosenthal Debtor's Counsel: Laird J. Heal, Esq. (LJHeal@conversent.net) 78 Worcester Road P.O. Box 365 Sterling, MA 01564 Tel: (978) 422-0135 Fax: (978) 422-0463 http://www.conversent.net/ Estimated Assets: $50,000 to $100,000 Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service $752,000 One Montvale Avenue Stoneham, MA 02180 North Middlesex Savings Bank $250,000 7 Main Street Ayer, MA 01432 Communication Solutions, Inc. $191,625 534 New State Highway, Suite 2 Raynham, MA 02767 Massachusetts Department of $161,409 Revenue Massachusetts Div. Empl. & $37,692 Training Westlands Associates $35,000 Liberty Mutual $33,638 Lend/Vestor Stock in company $28,600 McKesson Information Solution $18,160 Advanced Medicare + Medicaid $16,803 Billing Lorraine Tunstall $14,500 Dell Financial Services $13,289 Eno, Boulay, Martin & Donahue, File #07-231 $10,175 LLP File #07-092 File #07-249 Shadrack Kilemba $6,800 Dawn Franklin $6,600 McKesson Medical Surgical $6,016 Byram Healthcare $5,113 CHAP $4,257 Spound Development $3,832 Associates, LLP Webex Communication, Inc. $3,439 WCH INC: Case Summary & Largest Unsecured Creditor -------------------------------------------------- Debtor: WCH, Inc. 1250 S. Winchester Blvd. San Jose, CA 95128 Bankruptcy Case No.: 08-51768 Chapter 11 Petition Date: April 9, 2008 Court: Northern District of California (San Jose) Debtor's Counsel: Jonathan Do, Esq. (jonathan@achievelawgroup.com) Doan, Nguyen and Do 300 S. 1st St., Ste. 320 San Jose, CA 95113 Tel: (408) 287-4444 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Raul Bryand, Esq. $1,000,000 Attn: Kathryn Stebner 870 market street San Francisco, CA 94102 Tel: (415) 362-9800 WHITEHAWK CDO: Moody's Places Ca Ratings Under Review ----------------------------------------------------- Moody's Investors Service has placed these notes issued by Whitehawk CDO Funding, Ltd. on review for possible downgrade: Class Description: $35,000,000 Class B Floating Rate Interest Notes Due 2039 -- Prior Rating: Aa2 -- Current Rating: Aa2, on review for possible downgrade In addition, Moody's downgraded and left on review for possible downgrade these notes: Class Description: $6,000,000 Class C Floating Rate Deferrable Interest Notes Due 2039 -- Prior Rating: A2, -- Current Rating: B3, on review for possible downgrade Moody's also downgraded these notes: Class Description: $7,000,000 Class D Floating Rate Deferrable Interest Notes Due 2039 -- Prior Rating: Baa2 -- Current Rating: Ca Class Description: 15,000 Preference Shares with an aggregate liquidation preference amount of $15,000,000 -- Prior Rating: Ba3 -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. WHX CORP: To Raise $200 Mil. Through Subscription Rights Offering ----------------------------------------------------------------- WHX Corporation is distributing at no charge to the holders of its common stock, par value $0.01 per share, non-transferable subscription rights to purchase up to an aggregate of undisclosed shares of its common stock at an undisclosed subscription price per share, for up to an aggregate purchase price of $200 million. The company will not issue fractional shares, but rather will round up or down the aggregate number of shares. The purpose of this rights offering is to raise equity capital in a cost-effective manner that gives all of its stockholders the opportunity to participate. The net proceeds will be used: (i) to make partial payments to certain senior lenders to certain wholly-owned subsidiaries of WHX in the aggregate principal amount of $15 million; (ii) to redeem preferred stock issued by a wholly-owned subsidiary of WHX, which is held by Steel Partners II, L.P., or Steel Partners, its largest stockholder, (iii) to purchase shares of common stock of CoSine Communications, Inc. from Steel Partners, (iv) to repay WHX indebtedness to Steel Partners, and (v) to repay indebtedness of such wholly-owned subsidiaries of WHX to Steel Partners. The company expects the total purchase price of the shares offered in this rights offering to be $200 million, assuming full participation and subject to stockholder approval to increase the company's authorized capital stock. WHX's largest stockholder, Steel Partners, has indicated that it intends to exercise all of its rights, including oversubscription rights for the maximum number of shares for which it can oversubscribe for without: (i) endangering the availability of the company's net operating loss carryforwards under Section 382 of the Internal Revenue Code or (ii) increasing its ownership to in excess of 75% of the outstanding shares of its common stock. Based in White Plains, New York, WHX Corporation (Pink Sheets: WXCP) -- http://www.whxcorp.com/-- is a holding company that invests in and manages a group of businesses on a decentralized basis. Apart from owning Handy & Harman, WHX acquired in April 2007 Bairnco Corporation, which is a diversified multinational company that operates business units in three reportable segments: Arlon electronic materials, Arlon coated materials and Kasco replacement products and services. Handy & Harman is a diversified manufacturer and the "parent" of a family of materials engineering and specialty manufacturing companies. Its products include electronic components, specialty fasteners, engineered materials, stainless steel tubing, specialty tubing and fabricated precious metals, brazing soldering fluxes and alloys of precious and non-precious metals. Handy & Harman's strategic business units encompass three reportable segments: precious metal, tubing and engineered materials. * * * At Dec. 31, 2007, WHX Corp.'s consolidated balance sheet showed $441.6 million in total assets and $511.1 million in total liabilities, resulting in a $69.5 million total stockholders' deficit. ZACKS FASHIONS: Rises From Receivership, Now Back in Operation -------------------------------------------------------------- Zacks Fashions that went into receivership this year, has been purchased by three fashion industry players from Montreal. Jeff Fixman, president and owner of Modes Cazza Inc. with Jeffrey and Michael Cape, vice presidents of Collection Conrad C are to acquire the chain. One hundred of Zacks' original employees are re-hired and the new owners are keeping 15 of the 28 Zacks stores. The plan is to bring new vision to the Zack's brand. The vision is to help bring new life to an industry that has been experiencing insolvencies at all levels recently. Mr. Fixman and the Cazza team will oversee the day-to-day retail operations of Zacks through Cazza's headquarters in Montreal. The team plans to update the look of the chain as well as to streamline efficiency processes. Elliot Lifson, president Canadian Apparel Federation praised the team's acquisition and welcomes initiatives that are not just good for the industry supply side, but for retailers and creditors. About Zacks Fashion Headquartered in Toronto, Ontario, Zacks Fashions -- http://www.zacksfashions.com/-- is a Canadian family business involved in the clothinh business for women's fashion. In 1921, the first Zacks Fashions opened in downtown Kitchener, Ontario. Today there are 22 stores across Ontario. ZENITH FUNDING: Moody's Cuts Ratings to Caa2 on Two Cert. Classes ----------------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by Zenith Funding, Ltd.: Class Description: $1,346,000,000 CP Notes -- Prior Rating: P-1 -- Current Rating: P-1, on review for possible downgrade Moody's also downgraded and left on review for possible further downgrade the ratings on these notes: Class Description: $71,000,000 Class A-1 Floating Rate Notes Due 2039 -- Prior Rating: Aaa -- Current Rating: A2, on review for possible downgrade Class Description: $36,000,000 Class A-2 Floating Rate Subordinate Notes Due 2039 -- Prior Rating: Aa2 -- Current Rating: Baa2, on review for possible downgrade Class Description: $23,000,000 Class B Floating Rate Subordinate Notes Due 2039 -- Prior Rating: A3 -- Current Rating: Ba3, on review for possible downgrade Class Description: $10,000,000 Class C Floating Rate Junior Subordinate Notes Due 2039 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $20,000,000 Combo Note Due 2039 -- Prior Rating: Baa3, 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. * Fitch Says Large US Banks Are Likely to See Increased Pressures ----------------------------------------------------------------- Large U.S. commercial banks, already saddled with significant risk from troubled residential real estate exposures, are likely to see increased financial pressure from their exposures to commercial real estate and CMBS, according to Fitch Ratings in a new report. Losses on CMBS collateral are likely to increase as the credit cycle progresses, with Fitch projecting CMBS delinquencies to double and perhaps triple by the end of the year. Having said that, CRE exposures are unlikely to be a primary ratings driver for most U.S. large banks and brokerages, according to Senior Director David Spring. 'Most banks have fairly well diversified portfolios and have avoided the excessive concentration in commercial real estate assets that plagued the industry during the 1988 - 1992 real estate lending crisis,' Spring said. 'Additionally, many firms with greater levels of exposure have already taken steps to reduce their holdings, while some brokerage firms have been able to successfully hedge exposures.' CRE-related losses could be greater than projected if the economic downturn becomes longer or deeper, begging the question of whether a repeat of the saving and loan crisis of the mid-eighties is on the horizon. According to Managing Director Bob Vrchota, that scenario is highly unlikely because most of the factors that caused the commercial real estate debacle of the late 1980s and early 1990s are not present today. 'The commercial real estate markets are not facing the same significant oversupply that plagued the markets in the late 80' and early 90's, plus tax treatment of commercial real estate projects has been relatively steady,' Vrchota said. 'Financial institutions will continue to CMBS as permanent financing for future commercial real estate projects, though some players may retrench their activities somewhat in the near term in light of the current dislocations. * S&P Puts Ratings on 559 Classes of US RMBS Under Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 559 classes from 103 U.S. residential mortgage-backed securities transactions backed by U.S. first-lien subprime mortgage collateral rated between January 2007 and June 2007 on CreditWatch with negative implications. The affected U.S. RMBS classes represent an issuance amount of approximately $57.1 billion, or approximately 42% of the par amount of U.S. RMBS backed by first- lien subprime mortgage loans rated by Standard & Poor's during the first half of 2007. In addition to CreditWatch placements, the ratings on 554 classes from 155 U.S. subprime RMBS transactions issued in the first half of 2007 are on CreditWatch negative. Overall, S&P's ratings on 1,114 classes from 163 U.S. subprime RMBS transactions issued in the first half of 2007 are on CreditWatch negative. In total, the classes with ratings on CreditWatch represent approximately 68% of the total dollar amount of U.S. subprime transactions rated by Standard & Poor's during this period. The rating actions incorporate S&P's most recent economic assumptions and reflect S&P's expectation of further defaults and losses on the underlying mortgage loans as well as the consequent reduction of credit support from current and projected losses. Monthly performance data reveals that delinquencies and foreclosures continue to accumulate at an increasing rate for U.S. subprime RMBS transactions that were issued in the first half of 2007. Since October 2007, cumulative losses on these deals have increased to 0.59% from approximately 0.10%. At the same time, total delinquencies increased to 26.13% from 14.88% and severe delinquencies increased to 17.14% from 6.93%. S&P are currently reviewing its loss expectation of 17.30% for the U.S. subprime RMBS deals issued in the first half of 2007. S&P are considering, among other things, the latest delinquency trends, loan level risk characteristics, and continuing deterioration in S&P's macroeconomic outlook. S&P will provide an updated loss forecast for the subprime transactions issued in the first half of 2007 in the next two weeks. Standard & Poor's is also reviewing its rated collateralized debt obligation transactions with exposure to the affected U.S. subprime RMBS classes. S&P will take appropriate rating actions on the affected CDO classes within the next several days. Standard & Poor's has completed its global review of its rated asset-backed commercial paper conduits with exposure to these U.S. subprime RMBS classes and confirms that the ratings on the ABCP conduits are not adversely affected by these rating actions. Standard & Poor's has also reviewed all rated structured investment vehicle and SIV-lite structures that have exposure to these U.S. subprime RMBS classes. S&P concluded from the review that the ratings on the SIVs are not adversely affected by these rating actions. Standard & Poor's expects to resolve today's CreditWatch placements over the next few weeks. S&P will likely lower many of the ratings placed on CreditWatch negative due to poor collateral performance and deterioration in credit support. Ratings Placed on Creditwatch Negative ACE Securities Corp. Home Equity Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-ASAP2 A-1 00442UAA7 AAA/Watch Neg AAA 2007-ASAP2 A-2A 00442UAB5 AAA/Watch Neg AAA 2007-ASAP2 A-2B 00442UAC3 AAA/Watch Neg AAA 2007-ASAP2 A-2C 00442UAD1 AAA/Watch Neg AAA 2007-ASAP2 A-2D 00442UAE9 AAA/Watch Neg AAA 2007-HE5 A-1 000797AA8 AAA/Watch Neg AAA 2007-HE5 A-2A 000797AB6 AAA/Watch Neg AAA 2007-HE5 A-2B 000797AC4 AAA/Watch Neg AAA 2007-HE5 A-2C 000797AD2 AAA/Watch Neg AAA 2007-HE5 A-2D 000797AE0 AAA/Watch Neg AAA Asset Backed Securities Corporation Home Equity Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ------ -- ---- RFC 2007-HE1 A1A 04544RAR6 AAA/Watch Neg AAA RFC 2007-HE1 A1B 04544RAS4 AAA/Watch Neg AAA RFC 2007-HE1 A2 04544RAA3 AAA/Watch Neg AAA RFC 2007-HE1 A3 04544RAB1 AAA/Watch Neg AAA RFC 2007-HE1 A4 04544RAC9 AAA/Watch Neg AAA RFC 2007-HE1 A5 04544RAD7 AAA/Watch Neg AAA RFC 2007-HE1 M4 04544RAH8 B/Watch Neg B Bear Stearns Asset Backed Securities I Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE2 II-1A-1 07389YAA9 AAA/Watch Neg AAA 2007-HE2 II-1A-2 07389YAB7 AAA/Watch Neg AAA 2007-HE2 II-1A-3 07389YAC5 AAA/Watch Neg AAA 2007-HE2 II-1A-4 07389YAD3 AAA/Watch Neg AAA 2007-HE2 II-2A 07389YAE1 AAA/Watch Neg AAA 2007-HE2 II-3A 07389YAF8 AAA/Watch Neg AAA 2007-HE3 I-A-1 073852AA3 AAA/Watch Neg AAA 2007-HE3 I-A-2 073852AB1 AAA/Watch Neg AAA 2007-HE3 I-A-3 073852AC9 AAA/Watch Neg AAA 2007-HE3 I-A-4 073852AD7 AAA/Watch Neg AAA 2007-HE3 II-A 073852AE5 AAA/Watch Neg AAA 2007-HE3 III-A 073852AF2 AAA/Watch Neg AAA 2007-HE3 M-3 073852AJ4 B/Watch Neg B 2007-HE4 I-A-1 07386RAA7 AAA/Watch Neg AAA 2007-HE4 I-A-2 07386RAB5 AAA/Watch Neg AAA 2007-HE4 I-A-3 07386RAC3 AAA/Watch Neg AAA 2007-HE4 I-A-4 07386RAD1 AAA/Watch Neg AAA 2007-HE4 II-A 07386RAE9 AAA/Watch Neg AAA BNC Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 A-1 05569GAA4 AAA/Watch Neg AAA 2007-1 A2 05569GAB2 AAA/Watch Neg AAA 2007-1 A3 05569GAC0 AAA/Watch Neg AAA 2007-1 A4 05569GAD8 AAA/Watch Neg AAA 2007-1 A5 05569GAE6 AAA/Watch Neg AAA 2007-1 M1 05569GAF3 AA+/Watch Neg AA+ 2007-1 M3 05569GAH9 B/Watch Neg B 2007-2 A1 05569QAA2 AAA/Watch Neg AAA 2007-2 A2 05569QAB0 AAA/Watch Neg AAA 2007-2 A3 05569QAC8 AAA/Watch Neg AAA 2007-2 A4 05569QAD6 AAA/Watch Neg AAA 2007-2 A5 05569QAE4 AAA/Watch Neg AAA 2007-2 M3 05569QAH7 B/Watch Neg B 2007-3 A1 05568QAA3 AAA/Watch Neg AAA 2007-3 A2 05568QAB1 AAA/Watch Neg AAA 2007-3 A3 05568QAC9 AAA/Watch Neg AAA 2007-3 A4 05568QAD7 AAA/Watch Neg AAA 2007-3 A5 05568QAE5 AAA/Watch Neg AAA 2007-3 M1 05568QAF2 AA+/Watch Neg AA+ 2007-3 M3 05568QAH8 B/Watch Neg B Carrington Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-FRE1 M3 144527AG3 B/Watch Neg B C-Bass Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-CB2 A-1 1248MBAF2 AAA/Watch Neg AAA 2007-CB2 A2-A 1248MBAG0 AAA/Watch Neg AAA 2007-CB2 A2-B 1248MBAH8 AAA/Watch Neg AAA 2007-CB2 A2-C 1248MBAJ4 AAA/Watch Neg AAA 2007-CB2 A2-D 1248MBAK1 AAA/Watch Neg AAA 2007-CB2 A2-E 1248MBAL9 AAA/Watch Neg AAA C-BASS Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-CB1 AF-1a 1248MGAJ3 AAA/Watch Neg AAA 2007-CB1 AF-1b 1248MGAX2 AAA/Watch Neg AAA 2007-CB1 AF-2 1248MGAK0 AAA/Watch Neg AAA 2007-CB1 AF-3 1248MGAL8 AAA/Watch Neg AAA 2007-CB1 AF-4 1248MGAM6 AAA/Watch Neg AAA 2007-CB1 AF-5 1248MGAN4 AAA/Watch Neg AAA 2007-CB1 AF-6 1248MGAP9 AAA/Watch Neg AAA 2007-CB4 A-1A 1248MEAA7 AAA/Watch Neg AAA 2007-CB4 A-1B 1248MEAB5 AAA/Watch Neg AAA 2007-CB4 A-1C 1248MEAC3 AAA/Watch Neg AAA 2007-CB4 A-2A 1248MEAD1 AAA/Watch Neg AAA 2007-CB4 A-2B 1248MEAE9 AAA/Watch Neg AAA 2007-CB4 A-2C 1248MEAF6 AAA/Watch Neg AAA 2007-CB4 A-2D 1248MEAG4 AAA/Watch Neg AAA 2007-CB5 A-1 12464YAA7 AAA/Watch Neg AAA 2007-CB5 A-2 12464YAB5 AAA/Watch Neg AAA 2007-CB5 A-3 12464YAC3 AAA/Watch Neg AAA Citigroup Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-AHL1 A-1 17311VAA7 AAA/Watch Neg AAA 2007-AHL1 A-2A 17311VAD1 AAA/Watch Neg AAA 2007-AHL1 A-2B 17311VAE9 AAA/Watch Neg AAA 2007-AHL1 A-2C 17311VAF6 AAA/Watch Neg AAA 2007-AHL1 M-3 17311VAJ8 B/Watch Neg B 2007-AHL3 A-1 17312GAS0 AAA/Watch Neg AAA 2007-AHL3 A-2 17312GAT8 AAA/Watch Neg AAA 2007-AHL3 A-3A 17312GAA9 AAA/Watch Neg AAA 2007-AHL3 A-3B 17312GAB7 AAA/Watch Neg AAA 2007-AHL3 A-3C 17312GAC5 AAA/Watch Neg AAA 2007-AHL3 M-1 17312GAD3 AA+/Watch Neg AA+ 2007-AHL3 M-4 17312GAG6 B/Watch Neg B 2007-AMC4 A-1 17313BAA9 AAA/Watch Neg AAA 2007-AMC4 A-2A 17313BAB7 AAA/Watch Neg AAA 2007-AMC4 A-2B 17313BAC5 AAA/Watch Neg AAA 2007-AMC4 A-2C 17313BAD3 AAA/Watch Neg AAA 2007-AMC4 A-2D 17313BAE1 AAA/Watch Neg AAA 2007-AMC4 M-1 17313BAF8 AA+/Watch Neg AA+ 2007-AMC4 M-3 17313BAH4 B/Watch Neg B CWABS Asset Backed Certificates Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-10 1-M-1 23246BAL5 AA+/Watch Neg AA+ 2007-10 2-M-1 23246BAM3 AA+/Watch Neg AA+ 2007-10 1-M-3 23246BAQ4 B/Watch Neg B 2007-10 2-M-3 23246BAR2 B/Watch Neg B CWABS Asset-Backed Certificates Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-11 1-M-3 23247LAJ7 B/Watch Neg B 2007-11 2-M-3 23247LAK4 B/Watch Neg B CWABS Asset-Backed Certificates Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- CWABS Asset-Backed Certificates Trust 2007-1 2007-1 M-3 23245CAH3 B/Watch Neg B CWABS Asset-Backed Certificates Trust 2007-BC1 2007-BC1 1-A 12668TAA2 AAA/Watch Neg AAA 2007-BC1 2-A-1 12668TAB0 AAA/Watch Neg AAA 2007-BC1 2-A-2 12668TAC8 AAA/Watch Neg AAA 2007-BC1 2-A-3 12668TAD6 AAA/Watch Neg AAA 2007-BC1 2-A-4 12668TAE4 AAA/Watch Neg AAA 2007-BC1 A-R 12668TAQ7 AAA/Watch Neg AAA 2007-BC1 M-4 12668TAJ3 BB/Watch Neg BB 2007-BC1 M-5 12668TAK0 B/Watch Neg B CWABS Asset-Backed Certificates Trust 2007-2 2007-2 M-1 12668NAF4 AA+/Watch Neg AA+ 2007-2 M-3 12668NAH0 B/Watch Neg B CWABS Asset-Backed Certificates Trust 2007-3 2007-3 1-A 12668UAD3 AAA/Watch Neg AAA 2007-3 2-A-1 12668UAE1 AAA/Watch Neg AAA 2007-3 2-A-2 12668UAF8 AAA/Watch Neg AAA 2007-3 2-A-3 12668UAG6 AAA/Watch Neg AAA 2007-3 2-A-4 12668UAH4 AAA/Watch Neg AAA 2007-3 A-R 12668UAC5 AAA/Watch Neg AAA 2007-3 M-2 12668UAK7 BB/Watch Neg BB 2007-3 M-3 12668UAL5 B/Watch Neg B 2007-5 M-3 12668KAH6 B/Watch Neg B 2007-6 M-3 12669LAH3 B/Watch Neg B 2007-BC2 M-3 12669QAH2 B/Watch Neg B First Franklin Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-FF1 A-1 32028TAA5 AAA/Watch Neg AAA 2007-FF1 A-2A 32028TAB3 AAA/Watch Neg AAA 2007-FF1 A-2B 32028TAC1 AAA/Watch Neg AAA 2007-FF1 A-2C 32028TAD9 AAA/Watch Neg AAA 2007-FF1 A-2D 32028TAE7 AAA/Watch Neg AAA 2007-FF1 R 32028TAR8 AAA/Watch Neg AAA 2007-FF2 A-1 32029GAA2 AAA/Watch Neg AAA 2007-FF2 A-2A 32029GAB0 AAA/Watch Neg AAA 2007-FF2 A-2B 32029GAC8 AAA/Watch Neg AAA 2007-FF2 A-2C 32029GAD6 AAA/Watch Neg AAA 2007-FF2 A-2D 32029GAE4 AAA/Watch Neg AAA 2007-FF2 R 32029GAT1 AAA/Watch Neg AAA 2007-FF2 M-3 32029GAH7 B/Watch Neg B First NLC Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 A-1 32115BAA8 AAA/Watch Neg AAA 2007-1 A-2 32115BAB6 AAA/Watch Neg AAA 2007-1 A-3 32115BAC4 AAA/Watch Neg AAA 2007-1 A-4 32115BAD2 AAA/Watch Neg AAA GSAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-FM1 A-1 3622MAAA9 AAA/Watch Neg AAA 2007-FM1 A-2A 3622MAAB7 AAA/Watch Neg AAA 2007-FM1 A-2B 3622MAAC5 AAA/Watch Neg AAA 2007-FM1 A-2C 3622MAAD3 AAA/Watch Neg AAA 2007-FM1 A-2D 3622MAAE1 AAA/Watch Neg AAA 2007-FM1 R 3622MAAQ4 AAA/Watch Neg AAA 2007-FM1 R-C 3622MAAR2 AAA/Watch Neg AAA 2007-FM1 R-X 3622MAAS0 AAA/Watch Neg AAA 2007-FM1 M-3 3622MAAH4 B/Watch Neg B 2007-HE1 M-1 3622MDAF2 AA+/Watch Neg AA+ 2007-HE1 M-3 3622MDAH8 BBB/Watch Neg BBB 2007-HE1 M-4 3622MDAJ4 B/Watch Neg B 2007-NC1 A-1 3622MGAA6 AAA/Watch Neg AAA 2007-NC1 A-2A 3622MGAB4 AAA/Watch Neg AAA 2007-NC1 A-2B 3622MGAC2 AAA/Watch Neg AAA 2007-NC1 R 3622MGAQ1 AAA/Watch Neg AAA 2007-NC1 RC 3622MGAR9 AAA/Watch Neg AAA 2007-NC1 RX 3622MGAS7 AAA/Watch Neg AAA 2007-NC1 A-2C 3622MGAD0 AA/Watch Neg AA 2007-NC1 A-2D 3622MGAE8 AA/Watch Neg AA 2007-NC1 M-1 3622MGAF5 A+/Watch Neg A+ 2007-NC1 M-2 3622MGAG3 B/Watch Neg B Home Equity Asset Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Home Equity Asset Trust 2007-1 2007-1 R 43710LAS3 AAA/Watch Neg AAA Home Equity Asset Trust 2007-2 2007-2 1-A-1 43710KAA4 AAA/Watch Neg AAA 2007-2 2-A-1 43710KAB2 AAA/Watch Neg AAA 2007-2 2-A-2 43710KAC0 AAA/Watch Neg AAA 2007-2 2-A-3 43710KAD8 AAA/Watch Neg AAA 2007-2 2-A-4 43710KAE6 AAA/Watch Neg AAA 2007-2 P 43710KAS5 AAA/Watch Neg AAA 2007-2 R 43710KAR7 AAA/Watch Neg AAA 2007-2 M-3 43710KAH9 B/Watch Neg B Home Equity Asset Trust 2007-3 2007-3 1-A-1 43710TAA5 AAA/Watch Neg AAA 2007-3 2-A-1 43710TAB3 AAA/Watch Neg AAA 2007-3 2-A-2 43710TAC1 AAA/Watch Neg AAA 2007-3 2-A-3 43710TAD9 AAA/Watch Neg AAA 2007-3 2-A-4 43710TAE7 AAA/Watch Neg AAA 2007-3 P 43710TAS6 AAA/Watch Neg AAA 2007-3 R 43710TAR8 AAA/Watch Neg AAA 2007-3 M-5 43710TAK3 BB/Watch Neg BB Home equity Mortgage Loan Asset Backed Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-B 1A-1 43710EAA8 AAA/Watch Neg AAA 2007-B 1A-2 43710EAB6 AAA/Watch Neg AAA 2007-B 2A-1 43710EAC4 AAA/Watch Neg AAA 2007-B 2A-2 43710EAD2 AAA/Watch Neg AAA 2007-B 2A-3 43710EAE0 AAA/Watch Neg AAA 2007-B 2A-4 43710EAF7 AAA/Watch Neg AAA Home Equity Mortgage Loan Asset-Backed Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- INABS 2007-A 1A 43710BAA4 AAA/Watch Neg AAA INABS 2007-A 2A-1 43710BAB2 AAA/Watch Neg AAA INABS 2007-A 2A-2 43710BAC0 AAA/Watch Neg AAA INABS 2007-A 2A-3 43710BAD8 AAA/Watch Neg AAA INABS 2007-A 2A-4a 43710BAE6 AAA/Watch Neg AAA INABS 2007-A 2A-4b 43710BAS5 AAA/Watch Neg AAA INABS 2007-A M-3 43710BAH9 B/Watch Neg B HSI Asset Securitization Corporation Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- HSI Asset Securitization Corporation Trust 2007-HE1 2007-HE1 I-A-1 40430FAA0 AAA/Watch Neg AAA 2007-HE1 II-A-1 40430FAB8 AAA/Watch Neg AAA 2007-HE1 II-A-2 40430FAC6 AAA/Watch Neg AAA 2007-HE1 II-A-3 40430FAD4 AAA/Watch Neg AAA 2007-HE1 II-A-4 40430FAE2 AAA/Watch Neg AAA 2007-HE1 M-1 40430FAF9 AA+/Watch Neg AA+ 2007-HE1 M-2 40430FAG7 AA/Watch Neg AA 2007-HE1 M-3 40430FAH5 BBB/Watch Neg BBB 2007-HE1 M-4 40430FAJ1 B/Watch Neg B HSI Asset Securitization Corporation Trust 2007-HE2 2007-HE2 I-A 40430RAA4 AAA/Watch Neg AAA 2007-HE2 II-A-1 40430RAB2 AAA/Watch Neg AAA 2007-HE2 II-A-2 40430RAC0 AAA/Watch Neg AAA 2007-HE2 II-A-3 40430RAD8 AAA/Watch Neg AAA 2007-HE2 II-A-4 40430RAE6 AAA/Watch Neg AAA 2007-HE2 M-3 40430RAH9 BB/Watch Neg BB 2007-HE2 M-4 40430RAJ5 BB/Watch Neg BB 2007-HE2 M-5 40430RAK2 B/Watch Neg B HSI Asset Securitization Corporation Trust 2007-NC1 2007-NC1 A-1 40430TAA0 AAA/Watch Neg AAA 2007-NC1 A-2 40430TAB8 AAA/Watch Neg AAA 2007-NC1 A-3 40430TAC6 AAA/Watch Neg AAA 2007-NC1 A-4 40430TAD4 AAA/Watch Neg AAA HSI Asset Securitization Corporation Trust 2007-OPT1 2007-OPT1 I-A 40431JAA1 AAA/Watch Neg AAA 2007-OPT1 II-A-1 40431JAB9 AAA/Watch Neg AAA 2007-OPT1 II-A-2 40431JAC7 AAA/Watch Neg AAA 2007-OPT1 II-A-3 40431JAD5 AAA/Watch Neg AAA 2007-OPT1 II-A-4 40431JAE3 AAA/Watch Neg AAA 2007-OPT1 M-3 40431JAH6 B/Watch Neg B JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-CH3 A-1A 46630XAA6 AAA/Watch Neg AAA 2007-CH3 A-1B 46630XAB4 AAA/Watch Neg AAA 2007-CH3 A-2 46630XAC2 AAA/Watch Neg AAA 2007-CH3 A-3 46630XAD0 AAA/Watch Neg AAA 2007-CH3 A-4 46630XAE8 AAA/Watch Neg AAA 2007-CH3 A-5 46630XAF5 AAA/Watch Neg AAA 2007-CH3 M-3 46630XAJ7 B/Watch Neg B 2007-CH4 A-1 46630CAA2 AAA/Watch Neg AAA 2007-CH4 A-2 46630CAB0 AAA/Watch Neg AAA 2007-CH4 A-3 46630CAC8 AAA/Watch Neg AAA 2007-CH4 A-4 46630CAD6 AAA/Watch Neg AAA 2007-CH4 A-5 46630CAE4 AAA/Watch Neg AAA JPMorgan Mortgage Acquisition Trust 2007-HE1 2007-HE1 AF-1 46630KAA4 AAA/Watch Neg AAA 2007-HE1 AF-2 46630KAB2 AAA/Watch Neg AAA 2007-HE1 AF-3 46630KAC0 AAA/Watch Neg AAA 2007-HE1 AF-4 46630KAD8 AAA/Watch Neg AAA 2007-HE1 AF-5 46630KAE6 AAA/Watch Neg AAA 2007-HE1 AF-6 46630KAF3 AAA/Watch Neg AAA 2007-HE1 AV-1 46630KAR7 AAA/Watch Neg AAA 2007-HE1 AV-2 46630KAS5 AAA/Watch Neg AAA 2007-HE1 AV-3 46630KAT3 AAA/Watch Neg AAA 2007-HE1 AV-4 46630KAU0 AAA/Watch Neg AAA Lehman ABS Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 1-A1 52521MAA0 AAA/Watch Neg AAA 2007-1 2-A1 52521MAB8 AAA/Watch Neg AAA 2007-1 2-A2 52521MAC6 AAA/Watch Neg AAA 2007-1 2-A3 52521MAD4 AAA/Watch Neg AAA 2007-1 2-A4 52521MAE2 AAA/Watch Neg AAA MASTR Asset Backed Securities Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- MASTR Asset Backed Securities Trust 2007-HE1 2007-HE1 A-1 576457AA3 AAA/Watch Neg AAA 2007-HE1 A-2 576457AB1 AAA/Watch Neg AAA 2007-HE1 A-3 576457AC9 AAA/Watch Neg AAA 2007-HE1 A-4 576457AD7 AAA/Watch Neg AAA 2007-HE1 M-1 576457AE5 AA+/Watch Neg AA+ 2007-HE1 M-3 576457AG0 BB/Watch Neg BB 2007-HE1 M-4 576457AH8 B/Watch Neg B MASTR Asset Backed Securities Trust 2007-WMC1 2007-WMC1 M-1 55275TAF5 B/Watch Neg B Merrill Lynch First Franklin Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Merrill Lynch First Franklin Mortgage Loan Trust 2007-1 2007-1 A-1 59023LAA0 AAA/Watch Neg AAA 2007-1 A-2A 59023LAB8 AAA/Watch Neg AAA 2007-1 A-2B 59023LAC6 AAA/Watch Neg AAA 2007-1 A-2C 59023LAD4 AAA/Watch Neg AAA 2007-1 A-2D 59023LAE2 AAA/Watch Neg AAA 2007-1 R 59023LAS1 AAA/Watch Neg AAA Merrill Lynch First Franklin Mortgage Loan Trust 2007-2 2007-2 A-1 59024QAA8 AAA/Watch Neg AAA 2007-2 A-2A 59024QAB6 AAA/Watch Neg AAA 2007-2 A-2B 59024QAC4 AAA/Watch Neg AAA 2007-2 A-2C 59024QAD2 AAA/Watch Neg AAA 2007-2 A-2D 59024QAE0 AAA/Watch Neg AAA 2007-2 R 59024QAS9 AAA/Watch Neg AAA 2007-2 M-3 59024QAH3 B/Watch Neg B Merrill Lynch First Franklin Mortgage Loan Trust 2007-3 2007-3 A-1A 59024VAA7 AAA/Watch Neg AAA 2007-3 A-1B 59024VAB5 AAA/Watch Neg AAA 2007-3 A-1C 59024VAC3 AAA/Watch Neg AAA 2007-3 A-1D 59024VAD1 AAA/Watch Neg AAA 2007-3 A-2A 59024VAE9 AAA/Watch Neg AAA 2007-3 A-2B 59024VAF6 AAA/Watch Neg AAA 2007-3 A-2C 59024VAG4 AAA/Watch Neg AAA 2007-3 A-2D 59024VAH2 AAA/Watch Neg AAA 2007-3 R 59024VAZ2 AAA/Watch Neg AAA Merrill Lynch First Franklin Mortgage Loan Trust 2007-4 2007-4 1-A 59025CAA8 AAA/Watch Neg AAA 2007-4 2-A1 59025CAB6 AAA/Watch Neg AAA 2007-4 2-A2 59025CAC4 AAA/Watch Neg AAA 2007-4 2-A3 59025CAD2 AAA/Watch Neg AAA 2007-4 2-A4 59025CAE0 AAA/Watch Neg AAA 2007-4 R 59025CAV2 AAA/Watch Neg AAA 2007-4 1-M3 59025CAK6 B/Watch Neg B 2007-4 2-M3 59025CAL4 B/Watch Neg B Merrill Lynch Mortgage Investors Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Merrill Lynch Mortgage Investors Trust 2007-HE1 2007-HE1 A-1 59024EAA5 AAA/Watch Neg AAA 2007-HE1 A-2A 59024EAB3 AAA/Watch Neg AAA 2007-HE1 A-2B 59024EAC1 AAA/Watch Neg AAA 2007-HE1 A-2C 59024EAD9 AAA/Watch Neg AAA 2007-HE1 A-2D 59024EAE7 AAA/Watch Neg AAA 2007-HE1 R 59024EAS6 AAA/Watch Neg AAA 2007-HE1 M-2 59024EAG2 B/Watch Neg B Merrill Lynch Mortgage Investors Trust, Series 2007-HE2 2007-HE2 R 59024LAS0 AAA/Watch Neg AAA 2007-HE3 A-1 590238AA9 AAA/Watch Neg AAA 2007-HE3 A-2 590238AB7 AAA/Watch Neg AAA 2007-HE3 A-3 590238AC5 AAA/Watch Neg AAA 2007-HE3 A-4 590238AD3 AAA/Watch Neg AAA 2007-HE3 R 590238AQ4 AAA/Watch Neg AAA Morgan Stanley ABS Capital I Inc. Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ----- Morgan Stanley ABS Capital I Inc. Trust 2007-HE1 2007-HE1 A-1 617526AA6 AAA/Watch Neg AAA 2007-HE1 A-2a 617526AC2 AAA/Watch Neg AAA 2007-HE1 A-2b 617526AD0 AAA/Watch Neg AAA 2007-HE1 A-2c 617526AE8 AAA/Watch Neg AAA 2007-HE1 A-2d 617526AF5 AAA/Watch Neg AAA 2007-HE1 A-2fpt 617526AB4 AAA/Watch Neg AAA 2007-HE1 M-3 617526AJ7 B/Watch Neg B Morgan Stanley ABS Capital I Inc. Trust 2007-HE2 2007-HE2 A-1 61753EAP5 AAA/Watch Neg AAA 2007-HE2 A-2a 61753EAA8 AAA/Watch Neg AAA 2007-HE2 A-2b 61753EAB6 AAA/Watch Neg AAA 2007-HE2 A-2c 61753EAC4 AAA/Watch Neg AAA 2007-HE2 A-2d 61753EAD2 AAA/Watch Neg AAA Morgan Stanley ABS Capital I Inc. Trust 2007-HE3 2007-HE3 A-1 617525AA8 AAA/Watch Neg AAA 2007-HE3 A-2a 617538AA1 AAA/Watch Neg AAA 2007-HE3 A-2b 617538AB9 AAA/Watch Neg AAA 2007-HE3 A-2c 617538AC7 AAA/Watch Neg AAA 2007-HE3 A-2d 617538AD5 AAA/Watch Neg AAA Morgan Stanley ABS Capital I Inc. Trust 2007-HE5 2007-HE5 A-1 61753KAA4 AAA/Watch Neg AAA 2007-HE5 A-2a 61753KAB2 AAA/Watch Neg AAA 2007-HE5 A-2b 61753KAC0 AAA/Watch Neg AAA 2007-HE5 A-2c 61753KAD8 AAA/Watch Neg AAA 2007-HE5 A-2d 61753KAE6 AAA/Watch Neg AAA 2007-HE5 M-3 61753KAH9 BB/Watch Neg BB 2007-HE5 M-4 61753KAJ5 B/Watch Neg B Morgan Stanley ABS Capital I Inc. Trust 2007-HE6 2007-HE6 A-1 61755CAA0 AAA/Watch Neg AAA 2007-HE6 A-2 61755CAB8 AAA/Watch Neg AAA 2007-HE6 A-3 61755CAC6 AAA/Watch Neg AAA 2007-HE6 A-4 61755CAD4 AAA/Watch Neg AAA Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 2007-NC4 A-1 61755EAA6 AA/Watch Neg AA 2007-NC4 A-2a 61755EAB4 AA/Watch Neg AA 2007-NC4 A-2b 61755EAC2 AA/Watch Neg AA 2007-NC4 A-2c 61755EAD0 AA/Watch Neg AA 2007-NC4 A-2d 61755EAE8 AA/Watch Neg AA Morgan Stanley ABS Captial I Inc. Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Morgan Stanley ABS Captial I Inc. Trust 2007-HE4 2007-HE4 A-1 61753VAA0 AAA/Watch Neg AAA 2007-HE4 A-2a 61753VAB8 AAA/Watch Neg AAA 2007-HE4 A-2b 61753VAC6 AAA/Watch Neg AAA 2007-HE4 A-2c 61753VAD4 AAA/Watch Neg AAA 2007-HE4 A-2d 61753VAE2 AAA/Watch Neg AAA 2007-HE4 M-2 61753VAG7 BB/Watch Neg BB 2007-HE4 M-3 61753VAH5 B/Watch Neg B Morgan Stanley ABS Captial I Inc. Trust 2007-NC3 2007-NC3 A-1 61755AAA4 AAA/Watch Neg AAA 2007-NC3 A-2a 61755AAB2 AAA/Watch Neg AAA 2007-NC3 A-2b 61755AAC0 AAA/Watch Neg AAA 2007-NC3 A-2c 61755AAD8 AAA/Watch Neg AAA 2007-NC3 A-2d 61755AAE6 AAA/Watch Neg AAA Morgan Stanley Home Equity Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-2 A-1 61752UAA3 AAA/Watch Neg AAA 2007-2 A-2 61752UAB1 AAA/Watch Neg AAA 2007-2 A-3 61752UAC9 AAA/Watch Neg AAA 2007-2 A-4 61752UAD7 AAA/Watch Neg AAA 2007-2 M-3 61752UAG0 B/Watch Neg B NovaStar Mortgage Funding Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 M-1 669971AF0 AA+/Watch Neg AA+ 2007-1 M-3 669971AH6 B/Watch Neg B Option One Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Option One Mortgage Loan Trust 2007-1 2007-1 I-A-1 68400DAA2 AAA/Watch Neg AAA 2007-1 I-A-2 68400DAB0 AAA/Watch Neg AAA 2007-1 II-A-1 68400DAC8 AAA/Watch Neg AAA 2007-1 II-A-2 68400DAD6 AAA/Watch Neg AAA 2007-1 II-A-3 68400DAE4 AAA/Watch Neg AAA 2007-1 II-A-4 68400DAF1 AAA/Watch Neg AAA 2007-1 M-3 68400DAJ3 B/Watch Neg B Option One Mortgage Loan Trust 2007-2 2007-2 I-A-1 68401TAA6 AAA/Watch Neg AAA 2007-2 II-A-1 68401TAB4 AAA/Watch Neg AAA 2007-2 III-A-1 68401TAC2 AAA/Watch Neg AAA 2007-2 III-A-2 68401TAD0 AAA/Watch Neg AAA 2007-2 III-A-3 68401TAE8 AAA/Watch Neg AAA 2007-2 M-2 68401TAG3 BB/Watch Neg BB 2007-2 M-3 68401TAH1 B/Watch Neg B Option One Mortgage Loan Trust 2007-4 2007-4 I-A-1 68403FAA4 AAA/Watch Neg AAA 2007-4 II-A-1 68403FAB2 AAA/Watch Neg AAA 2007-4 II-A-2 68403FAC0 AAA/Watch Neg AAA 2007-4 II-A-3 68403FAD8 AAA/Watch Neg AAA 2007-4 II-A-4 68403FAE6 AAA/Watch Neg AAA Option One Mortgage Loan Trust 2007-5 2007-5 I-A-1 68403HAA0 AAA/Watch Neg AAA 2007-5 II-A-1 68403HAB8 AAA/Watch Neg AAA 2007-5 II-A-2 68403HAC6 AAA/Watch Neg AAA 2007-5 II-A-3 68403HAD4 AAA/Watch Neg AAA 2007-5 II-A-4 68403HAE2 AAA/Watch Neg AAA Option One Mortgage Loan Trust 2007-6 2007-6 I-A-1 68403KAQ8 AAA/Watch Neg AAA 2007-6 II-A-1 68403KAA3 AAA/Watch Neg AAA 2007-6 II-A-2 68403KAB1 AAA/Watch Neg AAA 2007-6 II-A-3 68403KAC9 AAA/Watch Neg AAA 2007-6 II-A-4 68403KAD7 AAA/Watch Neg AAA Option One Mortgage Loan Trust 2007-CP1 2007-CP1 I-A-1 68402YAA4 AAA/Watch Neg AAA 2007-CP1 II-A-1 68402YAB2 AAA/Watch Neg AAA 2007-CP1 II-A-2 68402YAC0 AAA/Watch Neg AAA 2007-CP1 II-A-3 68402YAD8 AAA/Watch Neg AAA 2007-CP1 M-3 68402YAG1 B/Watch Neg B Option One Mortgage Loan Trust 2007-HL1 2007-HL1 I-A-1 68402SAA7 A/Watch Neg A 2007-HL1 II-A-1 68402SAB5 A/Watch Neg A 2007-HL1 II-A-2 68402SAC3 A/Watch Neg A 2007-HL1 II-A-3 68402SAD1 A/Watch Neg A 2007-HL1 II-A-4 68402SAE9 A/Watch Neg A RAMP Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-RS1 A-1 74923RAA7 AAA/Watch Neg AAA 2007-RS1 A-2 74923RAB5 AAA/Watch Neg AAA 2007-RS1 A-3 74923RAC3 AAA/Watch Neg AAA 2007-RS1 A-4 74923RAD1 AAA/Watch Neg AAA 2007-RS1 A-5 74923RAE9 AA+/Watch Neg AA+ 2007-RS1 M-1 74923RAF6 AA/Watch Neg AA 2007-RS1 M-2 74923RAG4 AA-/Watch Neg AA- 2007-RS1 M-3 74923RAH2 A+/Watch Neg A+ 2007-RS1 M-4 74923RAJ8 BB/Watch Neg BB 2007-RS1 M-5 74923RAK5 BB/Watch Neg BB 2007-RS1 M-6 74923RAL3 B/Watch Neg B 2007-RS2 A-1 75157DAA2 AAA/Watch Neg AAA 2007-RS2 A-2 75157DAB0 AAA/Watch Neg AAA 2007-RS2 A-3 75157DAC8 AAA/Watch Neg AAA RASC Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-EMX1 A-I-1 74924XAA3 BBB/Watch Neg BBB 2007-EMX1 A-I-2 74924XAB1 BBB/Watch Neg BBB 2007-EMX1 A-I-3 74924XAC9 BBB/Watch Neg BBB 2007-EMX1 A-I-4 74924XAD7 BBB/Watch Neg BBB 2007-EMX1 A-II 74924XAE5 BBB/Watch Neg BBB 2007-KS1 A-1 74924SAA4 AAA/Watch Neg AAA 2007-KS1 A-2 74924SAB2 AAA/Watch Neg AAA 2007-KS1 A-3 74924SAC0 AAA/Watch Neg AAA 2007-KS1 A-4 74924SAD8 AAA/Watch Neg AAA 2007-KS1 M-4 74924SAH9 B/Watch Neg B 2007-KS2 A-I-1 74924WAA5 AAA/Watch Neg AAA 2007-KS2 A-I-2 74924WAB3 AAA/Watch Neg AAA 2007-KS2 A-I-3 74924WAC1 AAA/Watch Neg AAA 2007-KS2 A-I-4 74924WAD9 AAA/Watch Neg AAA 2007-KS2 A-II-1 74924WAE7 AAA/Watch Neg AAA 2007-KS3 A-I-1 74924YAA1 AAA/Watch Neg AAA 2007-KS3 A-I-2 74924YAB9 AAA/Watch Neg AAA 2007-KS3 A-I-3 74924YAC7 AAA/Watch Neg AAA 2007-KS3 A-I-4 74924YAD5 AAA/Watch Neg AAA 2007-KS3 A-II 74924YAE3 AAA/Watch Neg AAA 2007-KS4 A-1 74924NAA5 AAA/Watch Neg AAA 2007-KS4 A-2 74924NAB3 AAA/Watch Neg AAA 2007-KS4 A-3 74924NAC1 AAA/Watch Neg AAA 2007-KS4 A-4 74924NAD9 AAA/Watch Neg AAA Renaissance Home Equity Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Renaissance Home Equity Loan Trust 2007-1 2007-1 AF-1 75970JAD8 AAA/Watch Neg AAA 2007-1 AF-1A 75970JAW6 AAA/Watch Neg AAA 2007-1 AF-1B 75970JAX4 AAA/Watch Neg AAA 2007-1 AF-1Z 75970JAY2 AAA/Watch Neg AAA 2007-1 AF-2 75970JAE6 AAA/Watch Neg AAA 2007-1 AF-3 75970JAF3 AAA/Watch Neg AAA 2007-1 AF-4 75970JAG1 AAA/Watch Neg AAA 2007-1 AF-5 75970JAH9 AAA/Watch Neg AAA 2007-1 AF-6 75970JAJ5 AAA/Watch Neg AAA 2007-1 AV-1 75970JAA4 AAA/Watch Neg AAA 2007-1 AV-2 75970JAB2 AAA/Watch Neg AAA 2007-1 AV-3 75970JAC0 AAA/Watch Neg AAA 2007-1 M-3 75970JAM8 B/Watch Neg B Renaissance Home Equity Loan Trust 2007-2 2007-2 AF-1 75970QAD2 AAA/Watch Neg AAA 2007-2 AF-2 75970QAE0 AAA/Watch Neg AAA 2007-2 AF-3 75970QAF7 AAA/Watch Neg AAA 2007-2 AF-4 75970QAG5 AAA/Watch Neg AAA 2007-2 AF-5 75970QAH3 AAA/Watch Neg AAA 2007-2 AF-6 75970QAJ9 AAA/Watch Neg AAA 2007-2 AV-1 75970QAA8 AAA/Watch Neg AAA 2007-2 AV-2 75970QAB6 AAA/Watch Neg AAA 2007-2 AV-3 75970QAC4 AAA/Watch Neg AAA Saxon Asset Securities Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Saxon Asset Securities Trust 2007-1 2007-1 A-1 80556BAA3 AAA/Watch Neg AAA 2007-1 A-2a 80556BAB1 AAA/Watch Neg AAA 2007-1 A-2b 80556BAC9 AAA/Watch Neg AAA 2007-1 A-2c 80556BAD7 AAA/Watch Neg AAA 2007-1 A-2d 80556BAE5 AAA/Watch Neg AAA 2007-1 M-3 80556BAH8 B/Watch Neg B Saxon Asset Securities Trust 2007-2 2007-2 A-1 80556YAA3 AAA/Watch Neg AAA 2007-2 A-2a 80556YAB1 AAA/Watch Neg AAA 2007-2 A-2b 80556YAC9 AAA/Watch Neg AAA 2007-2 A-2c 80556YAD7 AAA/Watch Neg AAA 2007-2 A-2d 80556YAE5 AAA/Watch Neg AAA Securitized Asset Backed Receivables LLC Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-BR1 A-1 81378KAA7 AAA/Watch Neg AAA 2007-BR1 A-2A 81378KAB5 AAA/Watch Neg AAA 2007-BR1 A-2B 81378KAC3 AAA/Watch Neg AAA 2007-BR1 A-2C 81378KAD1 AAA/Watch Neg AAA 2007-BR2 A-1 81378PAA6 AAA/Watch Neg AAA 2007-BR2 A-2 81378PAB4 AAA/Watch Neg AAA 2007-BR3 A-1 81377NAN4 AAA/Watch Neg AAA 2007-BR3 A-2A 81377NAA2 AAA/Watch Neg AAA 2007-BR3 A-2B 81377NAB0 AAA/Watch Neg AAA 2007-BR3 A-2C 81377NAC8 AAA/Watch Neg AAA 2007-BR4 A-1 81378EAN3 AAA/Watch Neg AAA 2007-BR4 A-2A 81378EAA1 AAA/Watch Neg AAA 2007-BR4 A-2B 81378EAB9 AAA/Watch Neg AAA 2007-BR4 A-2C 81378EAC7 AAA/Watch Neg AAA 2007-BR4 M-1 81378EAD5 AA+/Watch Neg AA+ 2007-BR4 M-2 81378EAE3 AA/Watch Neg AA 2007-BR4 M-4 81378EAG8 BB/Watch Neg BB 2007-NC2 A-1 81378GAA6 AAA/Watch Neg AAA 2007-NC2 A-2A 81378GAB4 AAA/Watch Neg AAA 2007-NC2 A-2B 81378GAC2 AAA/Watch Neg AAA 2007-NC2 A-2C 81378GAD0 AAA/Watch Neg AAA SG Mortgage Securities Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-NC1 A-1 78420RAA6 AAA/Watch Neg AAA 2007-NC1 A-2 78420RAB4 AAA/Watch Neg AAA 2007-NC1 M-4 78420RAF5 B/Watch Neg B Soundview Home Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- Soundview Home Loan Trust 2007-1 2007-1 I-A-1 83612PAA8 AAA/Watch Neg AAA 2007-1 II-A-1 83612PAB6 AAA/Watch Neg AAA 2007-1 II-A-2 83612PAC4 AAA/Watch Neg AAA 2007-1 II-A-3 83612PAD2 AAA/Watch Neg AAA 2007-1 II-A-4 83612PAE0 AAA/Watch Neg AAA Soundview Home Loan Trust 2007-NS1 2007-NS1 M-3 83612QAG3 B/Watch Neg B Soundview Home Loan Trust 2007-WMC1 2007-WMC1 M-1 83612NAG0 B/Watch Neg B Specialty Underwriting and Residential Finance Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ------ -- ---- 2007-AB1 A-1 84752CAA5 AAA/Watch Neg AAA 2007-AB1 A-2A 84752CAB3 AAA/Watch Neg AAA 2007-AB1 A-2B 84752CAC1 AAA/Watch Neg AAA 2007-AB1 A-2C 84752CAD9 AAA/Watch Neg AAA 2007-AB1 A-2D 84752CAE7 AAA/Watch Neg AAA 2007-AB1 R 84752CAS6 AAA/Watch Neg AAA 2007-AB1 M-1 84752CAF4 AA+/Watch Neg AA+ 2007-AB1 M-2 84752CAG2 AA+/Watch Neg AA+ Specialty Underwriting and Residential Finance Trust 2007-BC2 2007-BC2 M1 84752EAF0 AA+/Watch Neg AA+ 2007-BC2 M2 84752EAG8 AA/Watch Neg AA 2007-BC2 M3 84752EAH6 A+/Watch Neg A+ 2007-BC2 M4 84752EAJ2 BB/Watch Neg BB 2007-BC2 M5 84752EAK9 B/Watch Neg B Structured Asset Securities Corporation Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-BC1 A1 86362PAA3 AAA/Watch Neg AAA 2007-BC1 A2 86362PAB1 AAA/Watch Neg AAA 2007-BC1 A3 86362PAC9 AAA/Watch Neg AAA 2007-BC1 A4 86362PAD7 AAA/Watch Neg AAA 2007-BC1 A5 86362PAE5 AAA/Watch Neg AAA 2007-BC1 A6 86362PAF2 AAA/Watch Neg AAA 2007-BC1 M3 86362PAJ4 B/Watch Neg B Structured Asset Securities Corporation Mortgage Loan Trust 2007-BC2 2007-BC2 A1 86362YAA4 AAA/Watch Neg AAA 2007-BC2 A2 86362YAB2 AAA/Watch Neg AAA 2007-BC2 A3 86362YAC0 AAA/Watch Neg AAA 2007-BC2 A4 86362YAD8 AAA/Watch Neg AAA 2007-BC2 A5 86362YAE6 AAA/Watch Neg AAA 2007-BC2 M3 86362YAH9 B/Watch Neg B Structured Asset Securities Corporation Mortgage Loan Trust 2007-BC3 2007-BC3 1-A1 86363WAA7 AAA/Watch Neg AAA 2007-BC3 1-A2 86363WAB5 AAA/Watch Neg AAA 2007-BC3 1-A3 86363WAC3 AAA/Watch Neg AAA 2007-BC3 1-A4 86363WAD1 AAA/Watch Neg AAA 2007-BC3 2-A1 86363WAE9 AAA/Watch Neg AAA 2007-BC3 2-A2 86363WAF6 AAA/Watch Neg AAA 2007-BC3 2-A3 86363WAG4 AAA/Watch Neg AAA 2007-BC3 2-A4 86363WAH2 AAA/Watch Neg AAA Structured Asset Securities Corporation Mortgage Loan Trust 2007-EQ1 2007-EQ1 A1 86363HAA0 AAA/Watch Neg AAA 2007-EQ1 A2 86363HAB8 AAA/Watch Neg AAA 2007-EQ1 A3 86363HAC6 AAA/Watch Neg AAA 2007-EQ1 A4 86363HAD4 AAA/Watch Neg AAA 2007-EQ1 A5 86363HAE2 AAA/Watch Neg AAA 2007-EQ1 M3 86363HAH5 B/Watch Neg B 2007-TC1 A 86364GAA1 AAA/Watch Neg AAA 2007-TC1 A-IO 86364GAB9 AAA/Watch Neg AAA Terwin Mortgage Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-4HE A-1 88157QAA6 AAA/Watch Neg AAA 2007-4HE A-2 88157QAK4 AAA/Watch Neg AAA 2007-4HE A-3 88157QAL2 AAA/Watch Neg AAA 2007-4HE G 88157QAG3 AAA/Watch Neg AAA WaMu Asset-Backed Certificates WaMu Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE2 I-A 92926SAA4 AAA/Watch Neg AAA 2007-HE2 II-A-1 92926SAB2 AAA/Watch Neg AAA 2007-HE2 II-A-2 92926SAC0 AAA/Watch Neg AAA 2007-HE2 II-A3 92926SAD8 AAA/Watch Neg AAA 2007-HE2 II-A4 92926SAE6 AAA/Watch Neg AAA WaMu Asset Backed Certificates Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE3 I-A 93364EAA2 AAA/Watch Neg AAA 2007-HE3 II-A1 93364EAB0 AAA/Watch Neg AAA 2007-HE3 II-A-2 93364EAC8 AAA/Watch Neg AAA 2007-HE3 II-A3 93364EAD6 AAA/Watch Neg AAA 2007-HE3 II-A4 93364EAE4 AAA/Watch Neg AAA 2007-HE3 II-A5 93364EAF1 AAA/Watch Neg AAA WaMu Asset-Backed Certificates WaMu Trust. Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE4 I-A 93363XAA1 AAA/Watch Neg AAA 2007-HE4 II-A1 93363XAB9 AAA/Watch Neg AAA 2007-HE4 II-A2 93363XAC7 AAA/Watch Neg AAA 2007-HE4 II-A3 93363XAD5 AAA/Watch Neg AAA 2007-HE4 II-A4 93363XAE3 AAA/Watch Neg AAA Washington Mutual Asset-Backed Certificates WMABS Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- WMABS 2007-HE1 I-A 93935KAA8 AAA/Watch Neg AAA WMABS 2007-HE1 II-A-1 93935KAB6 AAA/Watch Neg AAA WMABS 2007-HE1 II-A-2 93935KAC4 AAA/Watch Neg AAA WMABS 2007-HE1 II-A-3 93935KAD2 AAA/Watch Neg AAA * S&P Says About $94 Bil. of Investment-Grade Will Mature in 3Q'08 ------------------------------------------------------------------ About $94 billion of investment-grade and $22 billion of speculative-grade debt will mature in the last three quarters of 2008, according to an article published by Standard & Poor's. The report, titled, "U.S. Credit Comment: Near-Term Refunding Risk Small, Though Default Pressures Continue To Mount," says that the consumer discretionary sector will face the most speculative-grade refunding pressure, with close to $6.7 billion in bonds maturing in 2008. "While we do not consider bond refunding as a strong default trigger for the speculative-grade nonfinancial sector in 2008, we do not downplay other risks," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "For firms that do roll over debt, their debt most likely will be priced at a higher yield because risk premiums have risen more for high-yield firms more than base rates have fallen." The amount of maturing bonds will increase over the next few years, with exceptionally high volumes of maturing bonds in 2011 through 2014, and maturities should spike in 2011, as a glut of bonds mature that were issued during the issuance bubble in 2001. U.S. corporate bond issuance set records in 2007, with just over $1.05 trillion in rated issuance. A record $136.7 billion in high-yield and $913 billion in investment-grade bonds were issued in 2007. However, the market has slowed considerably since last summer. While investment-grade firms have continued to find financing in the first quarter ($193 billion in debt), the high- yield bond market has been relatively frozen, with only $5.5 billion, down 87% from first-quarter 2007. Ms. Vazza added, "Currently, the average high-yield firm might pay a 10% yield to maturity on new five-year bonds, assuming investors are interested in the deal. As firms see profits shrink during the next few quarters, S&P anticipate erosion in interest coverage multiples and some firms may begin to bump up against covenants. Moreover, as other avenues for financing shut down, firms may try to refinance debt in the bond market, creating more pressure than expected. It is also likely that firms in the most need of capital will be the ones with the inability to access it." * Brian Gart Joins Berger Singerman of Florida ---------------------------------------------- Greenberg Traurig LLP veteran Brian K. Gart joined the Florida business law firm Berger Singerman. Mr. Gart is a shareholder in the firm's Business Reorganization Team resident in Berger Singerman's Fort Lauderdale office. He was one of the shareholders responsible for leading Greenberg Traurig's South Florida Business Reorganization & Bankruptcy department While at Greenberg, Mr. Gart helped build its reorganization and bankruptcy practice and worked on many large and complex restructuring matters locally, regionally and nationally. He has had lead responsibility for such local chapter 11 cases as Fine Air Services, Arrow Air and its other affiliates, Pier 66 Resort and Marina, Tutor Time Learning Systems, Bertram Yachts, Empire Toys, Cheeca Lodge, Model Imperial and The Florida Philharmonic Orchestra. Nationally, he has handled the representation of Perry Ellis International in the separate acquisitions of Tropical Sportswear and the "Pacific Trails" outerwear division of London Fog. Additionally, Mr. Gart has represented several private equity groups and hedge funds in many high profile acquisitions in cases throughout the country, including Hawaiian Airlines! and is regularly involved in structuring debtor -in -possession and exit financing in chapter 11 business reorganizations, as well as out- of-court workouts and debt restructurings. "I had been provided the invaluable opportunity to grow professionally at the same time Greenberg was becoming a preeminent national firm and without question, I think Greenberg is the finest large national firm in the country," said Mr. Gart. "Being able to work in one of the areas I enjoy and handle the complex debtor cases and restructuring matters in my own market had become much more difficult with the conflict of interest challenges that are inevitable at a large firm. At the same time, this change provides the full service platform I need to continue to represent private equity groups and strategic buyers both locally and nationally in complex distressed M&A transactions. Berger Singerman is a great business law firm, with a highly regarded, market l! eading bankruptcy and restructuring practice, and outstanding transactional and litigation talent to support my practice. I have known and worked on matters with Paul Singerman and many of the firm's lawyers over my entire career, and I know they have built an amazing firm by any standard. I am very excited to join the Berger Singerman team and look forward to helping them grow even further." "[Mr. Garth] is an excellent lawyer. We are thrilled that he has decided to join us. He has an extraordinary reputation amongst both the Bankruptcy Bench and the Bar. He will provide additional depth to our already strong Business Reorganization Team. We believe we can be a great platform for the growth of Brian's practice," said Paul Singerman, Co-CEO of Berger Singerman. Mr. Gart has 25 years of experience representing debtors, creditors and other interest holders in complex business bankruptcy cases, bankruptcy litigation matters, out-of-court workouts and restructurings, and handling transactions with respect to the purchase and sale of assets of distressed business entities. He is admitted to practice in the Courts of the State of Florida, the U.S. District Courts for the Southern and Middle Districts of Florida, the U.S. Court of Appeals for the Eleventh Circuit, and the Supreme Court of the United States. He is a 1983 graduate, cum laude, from the University Of Miami School Of Law. He has been professionally recognized in Best Lawyers in America (2004, 2006-2008 editions), Chambers USA Guide (2003-2007), Super Lawyers published by Law and Politics Magazine(2006-2008), named one of the area's top lawyers in the South Florida Legal Guide (2002 - 2007), and has received an "AV" rating by Martindale-Hubbell. About Berger Singerman Berger Singerman -- http://www.bergersingerman.com/-- has offices in Miami, Fort Lauderdale, Boca Raton and in the state capital of Tallahassee. Each year since Chambers and Partners, the firm and lawyer ranking guide in the U.K., has published Chambers USA, the firm has been recognized as a first rate Restructuring and Bankruptcy practice in Florida. The firm's restructuring team has been involved in most of bankruptcy cases in the State for many years. Currently, Berger Singerman represents Levitt and Sons and its affiliates in its bankruptcy cases and is co-counsel to Kirkland & Ellis in the TOUSA chapte! r 11 cases. TOUSA and Levitt and Sons are the two largest home-builder bankruptcy cases pending in the United States. In addition, Berger Singerman is representing Aloha Airlines in that company's second bankruptcy case just filed in Honolulu. Prior chapter 11 representations of the firm include Piccadilly Cafeterias, Renaissance Cruise Lines, AT&T Latin America, Atlas Air and Polar Air Cargo. * Joel H. Levitin Joins Cahill Gordon & Reindel LLP as Partner -------------------------------------------------------------- Cahill Gordon & Reindel LLP disclosed that Joel H. Levitin has joined the firm as a partner in New York. Mr. Levitin joins Cahill from Dechert LLP, where he was a partner. "[Mr. Levitin] is an impressive and accomplished bankruptcy and restructuring lawyer whose expertise will be of great value to our practice," William M. Hartnett, chairman of Cahill's executive committee, said. Mr. Levitin focuses his practice on corporate restructuring and reorganization matters on behalf of troubled or distressed companies, acquirers of such companies, and other major constituencies such as trustees, boards of directors, creditors, bondholders, committees and equity sponsors, both in and out of court. Mr. Levitin is a prolific author and frequent speaker on bankruptcy and restructuring topics such as debtor-in-possession financing, intellectual property issues in bankruptcy, and investing in distressed assets and companies. He is active in several professional organizations, including the American Bankruptcy Institute, where he served on the board of directors and as a committee chair for many years. Mr. Levitin is a graduate of Duke University, where he earned his A.B., with distinction, in political science, magna cum laude in 1984. He earned his J.D. from the University of Chicago Law School with honors, in 1987. After graduation from law school, he served for one year as a law clerk to the Honorable Norma L. Shapiro of the United States District Court for the Eastern District of Pennsylvania. About Cahill Gordon & Reindel LLP Headquartered in New York, New York, Cahill Gordon & Reindell LLP -- http://www.cahill.com-- was founded in 1919. During the mid to late 1930's, the firm earned status as a "Securities Act" firm and during and after the Second World War, under the leadership of John T. Cahill, the legendary former U.S. Attorney for the Southern District of New York, Cahill grew dramatically. Today, Cahill's lawyers regularly participate as legal counsel to managers and underwriters in the banking and high yield debt financial markets. Cahill includes lawyers who joined following distinguished careers in the Securities and Exchange Commission, U.S. Department of Justice, U.S. Treasury Department and Federal Trade Commission. Cahill also has vibrant tax, insurance, antitrust, media, bankruptcy, intellectual property, real estate and trusts & estates practices. * Beard Audio Presents "Understanding CDS Contract Risks" Seminar ----------------------------------------------------------------- Beard Audio Conferences presents a new audio seminar on "Understanding CDS Contract Risks." The live 90-minute telephone conference with interactive Q&A session is hosted by the Beard Group Law and Business Publishers and Troubled Company Reporter. Enroll today in this international audio conference and let noted restructuring attorney Andrea Pincus help you better understand the make-up of your CDS portfolio. She'll provide a plain-English explanation of the structure of CDS transactions, then analyze the state of today's market, empowering you to better manage CDS contract risks, tap into potential rewards, and spot warning signs along the way. Register now at http://researcharchives.com/t/s?2954 Learn more by visiting http://researcharchives.com/t/s?2955 Today's $45 trillion CDS market is roughly twice the size of the entire U.S. stock market. Yet despite its staggering size, the unregulated over-the-counter CDS market and its vast underpinnings remain a mystery to even the most sophisticated of investors. What's more, the spider's web of connections between Credit Default Swaps and global subprime failures, ratings downgrades, monoline exposure, and billion-dollar losses by commercial banks and insurers means your potential CDS risks are greater than ever. The conference agenda includes: * What's behind the curtain? What you need to know about the structure of today's CDS contracts and their evolution - from hedging vehicle to highly customized alternative investment vehicle, * Mechanics of a typical CDS transaction, including required documentation and critical contract terms * Special challenges and concerns for CDS written on asset- backed securities and backed by financial guaranty policies * What is counterparty risk? How is it affected in the face of subprime meltdowns, concentration of major players, the ongoing liquidity crisis, and shaken investor confidence? * Changing dynamic for troubled companies due to the high volume of CDS trading in the secondary market and related pressure on CDS buyers to push troubled companies into Chapter 11 * New initiatives from ISDA, including modifications to standard forms * Prospects for regulation and changing accounting principles * Emerging areas of dispute and litigation - like ambiguous documentation, valuation methodologies, and conflicts over collateral obligations. Learn how to identify them before they sabotage your portfolio * Hedging your hedge - potential upsides for distressed investors. Who Should Attend: All those participating in today's Credit Default Swap market - both buyers and sellers of CDS protection - and their legal and financial advisors. This easy-to-attend audio briefing is designed to help you better understand the latest market dynamics affecting ways to value your holdings - or unload them. About Your Presenter: Andrea Pincus joined the law firm of Reed Smith LLP as a lateral partner in February 2008, and is a member of the firm's Commercial Restructuring & Bankruptcy Group and the firm's Financial Industries Group. In her practice, Andrea represents hedge funds, banks and other institutional investors, bondholders and trustees, as well as ad hoc and official committees, secured creditors, governmental entities, private individuals and debtors-in-possession in all aspects of Chapter 11 cases as well as out-of-court workouts involving private and publicly-held companies. In the related areas of capital markets and structured finance, Andrea represents hedge funds, banks and other financial institutions in connection with distressed investing strategies, structured debt, and derivative transactions based on ISDA documentation, with a particular focus on credit default swaps and valuation disputes. Andrea is a member of 100 Women in Hedge Funds, a global association of women in the hedge fund industry, and serves on its Philanthropy Committee and Governance Committee. In addition, she is a member of the American Bankruptcy Institute as well as the Turnaround Management Association. HOW TO REGISTER: 1. Call 240-629-3300 and charge your tuition investment of $295 to a major credit card, or 2. Visit www.beardaudioconferences.com for fast and convenient online registration. 3. Mail your check payable to Beard Audio Conferences to: Beard Group, P.O. Box 4250, Frederick, MD 21705-4250 (checks must be received 48 hours prior to conference). Can't make the scheduled date and time? Order the Audio CD recording of this conference. Or get the CONFERENCE PLUS option that allows you to attend the audio conference AND get the Audio CD recording at a discounted price. For either option, visit http://www.beardaudioconferences.com or call (240) 629-3300. * April 17 Webinar Virtual Discussion Focuses on Distress Retail ---------------------------------------------------------------- Restructuring professionals who focus on the retail business share the inside story on why there's a "Sale on Everything: The Changing Nature of Distressed Retail," part of the TMA Webinar series sponsored by the Turnaround Management Association. This virtual discussion is on Thursday, April 17, 2008, from noon to 1 p.m. Eastern. Description In March 2008, consumer confidence hit its lowest level in the past five years. Cautious consumers have led to a significant decline in retail spending. The plight of retailers has been exacerbated by the tightening of lending standards, existing heavy debt loads and failed repositioning strategies. This panel of retail experts will discuss the dramatic rise in bankruptcy filings by national and regional retailers and the trend toward Chapter 11 filings resulting in contracted businesses, going concern sales and, often, outright liquidations. They will focus on the practical issues affecting retail businesses undergoing a Chapter 11 liquidation or reorganization and the real life solutions that have been implemented to address those issues. Presenters Moderator: Deborah Piazza, a partner in the restructuring, bankruptcy and commercial litigation group of Hodgson Russ LLP in New York Panel: -- Michael A. O'Hara, president and managing member of Consensus Advisors LLC, in Boston, an investment banking and financial advisory services firm exclusively serving retailer and consumer products companies. -- Adam C. Rogoff, partner in Cooley Godward Kronish LLP's bankruptcy and restructuring practice in New York The Turnaround Management Association (http://www.turnaround.org) is the only international non-profit association dedicated to corporate renewal and turnaround management. With international headquarters in Chicago, TMA has 8,100 members in 45 regional chapters who comprise a professional community of turnaround practitioners, attorneys, accountants, investors, lenders, venture capitalists, appraisers, liquidators, executive recruiters and consultants. Register online at http://www.turnaround.org/ * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Redford Food Services, Inc. Bankr. E.D. Mich. Case No. 08-47525 Chapter 11 Petition filed March 28, 2008 Dismissed In Re Johnson Auto Transporters, LLC Bankr. S.D. Ala. Case No. 08-11151 Chapter 11 Petition filed April 3, 2008 See http://bankrupt.com/misc/alsb08-11151.pdf In Re Tri-Bar Tool & Supply, Inc. Bankr. W.D. Ark. Case No. 08-71371 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/akwb08-71371.pdf In Re Edward K. Liao aka Eddie Kuo Chuan Liao Bankr. D. Conn. Case No. 08-50287 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/ctb08-50287.pdf In Re Daniel W. Williams & Sons, Inc. Bankr. E.D. Mich. Case No. 08-48590 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/mieb08-48590.pdf In Re Woodside Oak Development, LLC Bankr. W.D. Mich. Case No. 08-03071 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/miwb08-03071.pdf In Re Stonehenge Granite & Marble, LLC Bankr. D. N.J. Case No. 08-16459 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/njb08-16459.pdf In Re VK Food Shop, Inc. Bankr. S.D. N.Y. Case No. 08-11267 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/nysb08-11267.pdf In Re Donald K. Tomlins Bankr. W.D. Penn. Case No. 08-22297 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/pawb08-22297.pdf In Re Harmony House Restaurants, LLC Bankr. M.D. Fla. Case No. 08-04840 Chapter 11 Petition filed April 9, 2008 Filed as Pro Se In Re Clarence Taylor, Jr. Bankr. C.D. Calif. Case No. 08-14698 Chapter 11 Petition filed April 9, 2008 Filed as Pro Se In Re Mo's BBQ & Catering, L.P. dba Mo's BBQ Bankr. S.D. Tex. Case No. 08-32330 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/txsb08-32330.pdf In Re Little People Learning Center, Inc. aka Planet Kids Rec Club Bankr. W.D. Va. Case No. 08-70633 Chapter 11 Petition filed April 9, 2008 See http://bankrupt.com/misc/vawb08-70633.pdf In Re Richard J. Garland Bankr. D. Ariz. Case No. 08-03940 Chapter 11 Petition filed April 10, 2008 See http://bankrupt.com/misc/azb08-03940.pdf In Re CR Cabinets, LLC Bankr. D. Ariz. Case No. 08-03946 Chapter 11 Petition filed April 10, 2008 See http://bankrupt.com/misc/azb08-03946.pdf In Re Riley Gallagher dba JLE Financial Bankr. C.D. Calif. Case No. 08-14729 Chapter 11 Petition filed April 10, 2008 See http://bankrupt.com/misc/cacb08-14729.pdf In Re Central Automation, Inc. Bankr. E.D. Calif. Case No. 08-12016 Chapter 11 Petition filed April 10, 2008 See http://bankrupt.com/misc/caeb08-12016.pdf In Re Jordan Chapel Free-Will Baptist Church Bankr. S.D. Fla. Case No. 08-14359 Chapter 11 Petition filed April 10, 2008 See http://bankrupt.com/misc/flsb08-14359.pdf In Re Alexia Crawford Retail Towson LLC dba Laila Rowe Bankr. D. N.J. Case No. 08-16476 Chapter 11 Petition filed April 10, 2008 See http://bankrupt.com/misc/njb08-16476.pdf In Re Phillip R. Chandler Bankr. W.D. Wis. Case No. 08-11663 Chapter 11 Petition filed April 10, 2008 See http://bankrupt.com/misc/wiwb08-11663.pdf In Re CSNP Bankr. C.D. Calif. Case No. 08-11833 Chapter 11 Petition filed April 11, 2008 See http://bankrupt.com/misc/cacb08-11833.pdf In Re Theodora P. Oyie Bankr. C.D. Calif. Case No. 08-14834 Chapter 11 Petition filed April 11, 2008 See http://bankrupt.com/misc/cacb08-14834.pdf In Re Harper Onsite Enterprises, Inc. Bankr. M.D. Fla. Case No. 08-04991 Chapter 11 Petition filed April 11, 2008 See http://bankrupt.com/misc/flmb08-04991.pdf In Re Digital Tigers, Inc. Bankr. N.D. Ga. Case No. 08-66832 Chapter 11 Petition filed April 11, 2008 See http://bankrupt.com/misc/ganb08-66832.pdf In Re Phase III Management Corp. Bankr. E.D. N.Y. Case No. 08-71780 Chapter 11 Petition filed April 11, 2008 Filed as Pro Se In Re Kody Bonin Bankr. S.D. Tex. Case No. 08-32373 Chapter 11 Petition filed April 11, 2008 See http://bankrupt.com/misc/txsb08-32373.pdf In Re Shag's Properties, LLC Bankr. W.D. Va. Case No. 08-50355 Chapter 11 Petition filed April 11, 2008 See http://bankrupt.com/misc/vaeb08-50355.pdf In Re Scott Korey Bankr. D. Ariz. Case No. 08-04073 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/azb08-04073.pdf In Re Team 99, Inc. Bankr. N.D. Calif. Case No. 08-51845 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/canb08-51845.pdf In Re Daryl M. Mobley, Inc. Bankr. M.D. Fla. Case No. 08-02871 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/flmb08-02871.pdf In Re James Norman Van Elsen dba Van Elsen Consulting, Inc. Bankr. N.D. Ill. Case No. 08-09090 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/ilnb08-09090.pdf In Re Diana LaVerne Carver dba Diana L. Carver DO PA, fdba Diana L. Carver DO, LLC Bankr. D. Ks. Case No. 08-40451 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/ksb08-40451.pdf In Re Diana L. Carver DO PA Bankr. D. Ks. Case No. 08-40452 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/ksb08-40452.pdf In Re Larry Goldenberg Bankr. E.D. Mo. Case No. 08-42544 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/mieb08-42544.pdf In Re Lighthouse Real Estate Holdings, LLC Bankr. E.D. Mich. Case No. 08-48998 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/mieb08-48998.pdf In Re J-Packaging & Display, LLC Bankr. D. N.J. Case No. 08-16762 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/njb08-16762.pdf In Re Ponderosa Plumbing and Heating, Inc. Bankr. D. Nev. Case No. 08-50569 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/nvb08-50569.pdf In Re Steven Crites Bankr. N.D. W.V. Case No. 08-00536 Chapter 11 Petition filed April 14, 2008 Filed as Pro Se In Re Ennever B. Reid aka Ennever Jean-Reid, aka Ennever Reid-Jean Bankr. D. Conn. Case No. 08-31164 Chapter 11 Petition filed April 14, 2008 Filed as Pro Se In Re Gerald N. Brenner Bankr. D. Mass. Case No. 08-12679 Chapter 11 Petition filed April 14, 2008 Filed as Pro Se In Re Executive & Vacation Properties aka Executive & Vacation Properties, LLC Bankr. S.D. Calif. Case No. 08-02977 Chapter 11 Petition filed April 14, 2008 Filed as Pro Se In Re R. Kevin McCarver DDS, PA Bankr. N.D. Tex. Case No. 08-50132 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/txnb08-50132.pdf In Re Surface Construction, LLC Bankr. E.D. Va. Case No. 08-50433 Chapter 11 Petition filed April 14, 2008 See http://bankrupt.com/misc/vaeb08-50433.pdf In Re John Barker dba Culture Woodworks Inc., aka John HP Barker, dba Culture Cabinets Bankr. W.D. Ark. Case No. 08-71462 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/akwb08-71462.pdf In Re Seafood Gourmet, Inc. Bankr. D. Conn. Case No. 08-31176 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/ctb08-31176.pdf In Re Skylift Holding, LLC dba Miami Skylift Bankr. S.D. Fla. Case No. 08-14575 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/flsb08-14575.pdf In Re TBO Trucking, Inc. dba Middle GA Trucking Equipment Service Bankr. S.D. Ga. Case No. 08-30180 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/gasb08-30180.pdf In Re Bold Corp. aka Bolden's Manufacturing, aka RX Outreach, aka Xtreme Team, aka Hydro Lab Bankr. S.D. Ind. Case No. 08-04169 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/insb08-04169.pdf In Re A-1 Property Management, LLC Bankr. D. N.J. Case No. 08-16821 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/njb08-16821.pdf In Re AMAP Sales & Collision, Inc. dba AMAP Collision Bankr. E.D. N.Y. Case No. 08-71853 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/nyeb08-71853.pdf In Re Ronald James Ladd dba Ronald & Patricia Ladd Joint Venture, dba R & P Farms Inc, dba Martha Farms, dba Jabez Farms LLC, dba Tripple 777 LLC, dba Boaz Land & Cattle LLC Bankr. W.D. Okla. Case No. 08-11497 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/okwb08-11497.pdf In Re Marlar & Associates, LLC dba Franklin printing, A Franchisee Bankr. M.D. Tenn. Case No. 08-03099 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/tnmb08-03099.pdf In Re American Pride Trucking Bankr. W.D. Tenn. Case No. 08-11389 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/tnwb08-11389.pdf In Re Jonnalyn R. Belocura, M.D., P.A. Bankr. W.D. Tex. Case No. 08-30573 Chapter 11 Petition filed April 15, 2008 See http://bankrupt.com/misc/txwb08-30573.pdf ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***