T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, April 22, 2008, Vol. 12, No. 95 Headlines A21 INC: BDO Seidman Expresses Going Concern Doubt ABENGOA BIOENERGY: Loan Buyout Cues S&P to Withdraw 'B-' Rating AEGIS MORTGAGE: Fitch Downgrades Ratings on $342.1MM Certificates ALASKA COMMS: Earns $120.4 Million in Fourth Quarter Ended Dec. 31 ALITALIA SPA: Air France-KLM Formally Withdraws Binding Offer ALOHA AIRLINES: May Employ Sheppard Mullin as Labor Counsel AMERICAN HOME: Fitch Junks Ratings on Three Certificate Classes ARCAP 2003-1: Fitch Affirms 'BB' Rating on $24MM Class K Notes ASARCO LLC: Six Affiliates File Separate Chapter 11 Petitions ATC HEALTHCARE: Non-compliance Prompts Amex to Delist Securities ATSI COMMUNICATIONS: January 31 Balance Sheet Upside-Down by $250K BABS TRUSTS: Moody's Cuts Five Tranches' Ratings from RMBS Deal BRAVO MORTGAGE: Moody's Cuts 10 Tranches' Ratings From 1 RMBS Deal CAMPBELL RESOURCES: Posts $18.9 Mil. Net Loss for 2007 CAROL CHRISTA: Case Summary & 13 Largest Unsecured Creditors CHEM RX: Moody's Changes Outlook to Negative; Holds 'B2' Rating CHILDREN'S TRUST: Fitch Expects to Rate $47.377MM Bonds at BB CIT GROUP: To Raise $1 Bil., Partly to Pay Interest on Notes COGENTRIX ENERGY: Facility Cancellation Cues S&P to Withdraw Rtng. CHRYSLER LLC: Calls Back Laid-Off Workers, Report Says COMM 2005-C6: S&P Places Ratings Under Negative CreditWatch CONSTAR INT'L: Dec. 31 Balance Sheet Upside-Down by $72.3 Million CONTINENTAL AIRLINES: S&P Changes Outlook to Negative on Ratings COPPER SANDS: Case Summary & Seven Largest Unsecured Creditors CREDIT SUISSE: Fitch Rates $2.218MM Class Q Certificates at B- CRIIMI MAE: Fitch Holds 'B-' Rating on $51.5 Million Certificates CULLIGAN INT'L: S&P Cuts Rating to B- on Fin'l Performance Drop CWABS TRUSTS: 572 Tranches Get Moody's Rating Cuts on Delinquency CYTOCORE INC: Completes $5 Million Sale of Common Stocks CHINA AOXING: Affiliate to Purchase LRT for $10.8 Million Cash CYBERONICS INC: Settles Lawsuit on Default of $125 Million Notes DANA CORP: Appoints Gary Convis as Chief Executive Officer DAVID GAUSSOIN: Case Summary & Largest Unsecured Creditor DELPHI CORP: Names Ronald Pirtle as President of Delphi Powertrain DELTA FINANCIAL: Court Okays Totus & CNS Deals After HQ Wind-down DELTA FINANCIAL: Insurers Say DFREC Suit Not Covered by Policies DELTA FINANCIAL: Court Okays Stipulation Staying DFREC et al. Case DELTA FINANCIAL: Court Sets Claims Bar Date May 5 DEVINE ENTERTAINMENT: Issues Financial Restatement for Fiscal 2006 DIABLO GRANDE: Taps FTI Consulting as Financial Advisor DIAMOND GLASS: ACH Objects to Asset Sale Bidding Procedures DIOMED HOLDINGS: Amex Delists Securities Effective April 28, 2008 DR ENTERTAINMENT: Voluntary Chapter 11 Case Summary DRAGON PHARMACEUTICAL: Ernst & Young Expresses Going Concern Doubt ENCORE CREDIT: High Delinquencies Cues Moody's Rating Downgrades ENERGY XXI: S&P Holds 'CCC+' Rating and Revises Outlook to Pos. EPICEPT CORP: Gets Delisting Notice From Nasdaq For Non-compliance EDWARD REDFERN: Case Summary & 19 Largest Unsecured Creditors FBR SECURITIZATION: Moody's Downgrades Ratings on 31 Tranches FEDERAL-MOGUL: Asbestos Trust Wants Pneumo Claims Holders Barred FIRST NATIONAL: Files Chapter 7 after Massive Workforce Layoff FIRST CHICAGO: Fitch Affirms 'CCC' Rating on $18.4MM Certificates FOREVERGREEN WORLD: Chisholm Bierwolf Raises Going Concern Doubt FREMONT GENERAL: Unit Elects Four Members to Board of Directors FREMONT GENERAL: Moody's Cuts Ratings to 'C' on Sr. Notes Default FRONTIER AIRLINES: CEO Says Credit Card Companies Worried FUSION TELECOM: Rothstein Kass Expresses Going Concern Doubt FREEDOM STORES: Voluntary Chapter 11 Case Summary GEORGE SHEFFER: Case Summary & 14 Largest Unsecured Creditors GOLDMAN SACHS: 214 Tranches Get Moody's Rating Cuts on Delinquency GREENS WORLDWIDE: Default in Florida Civil Case Set Aside GS MORTGAGE: Stable Performance Cues Fitch to Affirm Ratings GTM HOLDINGS: Fin'l Covenant Concerns Cue S&P to Cut Rating to B- GO WEST: Voluntary Chapter 11 Case Summary HM OF TOPEKA: Case Summary & Four Largest Unsecured Creditors HORIZON LINES: Subpoena Does Not Affect S&P's 'BB-' Rating HOUSE OF TAYLOR: 8-K Filing Delay Cues Nasdaq's Delisting Notice I2 TELECOM: Freedman & Goldberg Expresses Going Concern Doubt IAJE: Board Votes for Filing of Chapter 7 in Kansas INTERNATIONAL FUEL: BDO Seidman Expresses Going Concern Doubt IWT TESORO: Unable to File Form 10-K Due to Bankruptcy IZAD DJAHANSHAHI: Case Summary & Eight Largest Unsecured Creditors JAMES HARDIE: Dutch Parent to Liquidate; Transfers HQ to U.S. JEROME WASHAWSKY: Case Summary & Eight Largest Unsecured Creditors KELLWOOD CO: NJF Investment Declares 4.8% Securities Ownership KINETIC CONCEPTS: Moody's Puts Ba1 Rating on Proposed $1.3BB Loan LANDSOURCE COMMUNITIES: In Lender Talks on Missed Debt Payments LASALLE COMMERCIAL: Increased Loans Cue Fitch to Chip Ratings LAWRENCE SALANDER: Judge Morris Converts Case to Chapter 7 LENNAR CORP: Venture Unit in Lender Talks on Missed Payments LNR CDO: Fitch Holds 'B+' Rating on $54 Million Class H Certs. LNR CDO: Fitch Affirms 'BB' Rating on $43.478MM Class J Certs. LODGENET INTERACTIVE: Reports Preliminary 2008 1st Quarter Results LPATH INC: LevitZacks Expresses Going Concern Doubt MARCAL PAPER: Wants Settlement Pact With New Jersey Approved MASONITE INT'L: S&P Puts 'B' Corp. Credit Rating Under Neg. Watch MASTR TRUSTS: Worse Performance Cues Moody's 10 Rating Downgrades MAXIM HIGH II: Moody's Junks Rating on $500 Mil. Notes From 'A2' MAXIM HIGH I: Poor Credit Quality Cues Moody's Rating Downgrades MENDOZA DEVELOPMENT: Case Summary & 26 Largest Unsecured Creditors MERITAGE MORTGAGE: Nine Tranches Get Moody's Rating Downgrades MONEYGRAM INT'L: Moody's Keeps 'B1' Rating on Experienced Losses MORGAN STANLEY: Fitch Holds Low-B Ratings on Three Cert. Classes MORGAN STANLEY: Moody's Downgrades Ratings on 241 Tranches MORGAN STANLEY: Fitch Holds 'B+' Rating on $98.2MM Class F Certs. NATIONAL CITY: Raising $7 Bil. Equity to Strengthen Capital Base NEUMANN HOMES: Selling Assets in Two Developments to RBC NEUMANN HOMES: Seeks $400,000 Loans From Guaranty Bank & IndyMac NEW CENTURY: IRS et al. Balk at Amended Liquidation Plan NEXTMEDIA OPERATING: Moody's Junks Probability of Default Rating OCTANS CDO: Trustee's Notice Cues S&P to Lowers Nine Ratings PAMELA JEFFERS: Voluntary Chapter 11 Case Summary PARKVIEW CARE: Case Summary & 20 Largest Unsecured Creditors PHILADELPHIA SCHOOL: Moody's Gives 'Ba2' Rating on $254.89MM Bonds PNM RESOURCES: S&P Chips Corp. Credit Rating to BB+ from BBB- POTLATCH CORP: Potential Spin-Off May Reflect Pos. Fitch Ratings PRB ENERGY: Sustained Losses Cues Amex' Delisting Procedures PUTNAM STRUCTURED: Moody's Junks Rating on $33.5 Mil. Pref. Shares QMED INC: Nasdaq Warning on Shareholder Requirement Non-compliance QMED INC: Posts $999,184 Net Loss in First Quarter Ended Feb. 29 RADNET INC: December 31 Balance Sheet Upside-Down by $69 Million RADNOR HOLDINGS: Wells Fargo Opposes Disclosure Statement RANDALL SLAVIN: Case Summary & 7 Largest Unsecured Creditors REDENVELOPE INC: Signs Asset Purchase Deal With Creative Catalogs RENAISSANCE HOME: 61 Tranches Acquire Moody's Rating Downgrades RESMAE RMBS: Higher Delinquencies Spurs Moody's Nine Rating Cuts RICHARD O'DONNELL: Case Summary & 20 Largest Unsecured Creditors ROCKFORD PACKAGING: Voluntary Chapter 11 Case Summary SAGINAW INDUSTRIAL: Case Summary & Six Largest Unsecured Creditors SALANDER-O'REILLY: Owners' Bankruptcy Case Converted to Chapter 7 SARM TRUSTS: Moody's Cuts 39 Tranches' Ratings From 10 Alt-A Deals SHAW GROUP: Organic Growth Spurs Moody's Rating Upgrades to 'Ba1' SIRVA INC: Committee Allowed to Hire BDO as Accountant & Advisor SIRVA INC: Committee Allowed to Retain Pachulski Stang as Counsel SIRVA INC: Committee Allowed to Hire TRN as Investment Banker SMART ENERGY: Chisholm Bierwolf Expresses Going Concern Opinion SMURFIT-STONE: To Buy Controlling Interest in Calpine Corrugated SOBEYS INC: S&P Retains 'BB+' Ratings on Three Note Classes SOLUTIA INC: Court Approves Settlement Pact with Air Liquide SOLUTIA INC: Nitro Residents File $267,745 Tort Claims SOLUTIA INC: Court OKs Payment of $197 Million to Professionals SOLUTIA INC: EOI Eyes Acquisition of Queeny Plant for $1 Million STEAKHOUSE PARTNERS: Mayer Hoffman Expresses Going Concern Doubt STURGIS IRON: Wants Court to Approve Sale Bidding Procedures TELKONET INC: Operating Losses Prompt Going Concern Opinion THINKENGINE NETWORKS: Amex Delists Company on History of Losses TOUSA INC: Period to Remove Civil Actions Extended to July 27 TOUSA HOMES: Seeks Court Approval of GMAC "Lease" Case Settlement TOUSA INC: Suncoast May Assert Liens Against Tampa Bay Project TOUSA INC: BoF Could Begin Foreclosure Action on Fla. Property TOUSA INC: Court Amends Order Approving Lazard Employment UAL CORP: Worse Earnings Prompt S&P to Revise Outlook to Negative UPA GROUP: Case Summary & 35 Largest Unsecured Creditors U.S. ENERGY: Wants Until July 8 To File Chapter 11 Plan VALLEJO CITY: Has Until Today to Submit Long-term Financial Plan WACHOVIA MORTGAGE: S&P Junks Ratings on Two Certificate Classes WAYTRONX INC: Webb & Company Raises Substantial Doubt WHX CORP: Dec. 31 Balance Sheet Upside-Down by $69.5 Million WINDON COUNTRY: Voluntary Chapter 11 Case Summary WOLVERINE TUBE: Posts $97 Million Net Loss in Year Ended Dec. 31 WORK ZONE: Case Summary & 15 Largest Unsecured Creditors WRK IDAHO: Voluntary Chapter 11 Case Summary XERIUM TECH: Ernst & Young Expresses Going Concern Doubt ZIFF DAVIS: Files First Amended Disclosure Statement ZIFF DAVIS: Asks Court to Approve Amended Disclosure Statement ZIFF DAVIS: Wants Confirmation Hearing Rescheduled to June 11 * Moody's Says Delta-NWA Deal May Affect Airport Credit Outlook * Moody's Reports Risks on Securities Lending for Life Insurers * S&P Downgrades 41 Tranches' Ratings From 11 Cash Flows and CDOs * S&P Ratings Tumbles to 'D' on 82 Classes from 78 RMBS Deals * S&P Says Market Continued to Reprice Risk in 1st Quarter of 2008 * Kevin Kuby Joins Alvarez & Marsal as Firm's Senior Director * Cooley Selected to Advise in Several Major Retail Insolvencies * Large Companies with Insolvent Balance Sheets ********* A21 INC: BDO Seidman Expresses Going Concern Doubt -------------------------------------------------- BDO Seidman, LLP, raised substantial doubt on the ability of a21, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and net capital deficiency. In an effort to improve its operational efficiency, on Sept. 12, 2007, the company consolidated the support positions at its ArtSelect unit in Fairfield, Iowa, into its Jacksonville, Florida headquarters. In addition, its SuperStock, Inc., subsidiary was reorganized to support the company's growth initiatives. The restructuring resulted in a net reduction of 18 positions. On Jan. 31, 2008, the company entered into a waiver agreement with the holders of a majority of the outstanding principal amount of the Secured Convertible Notes, to waive quarterly cash interest payments until Mar. 31, 2008. At Dec. 31, 2007, the company had cash of $2,100,000 and working capital of $1,500,000. However, the company stated that there are no assurances that these changes will result in the expected improvements. At Dec. 31, 2007, the company had an accumulated deficit of $28,000,000. The company posted a net loss of $4,675,000 on total revenues of $23,306,000 for the year ended Dec. 31, 2007, as compared with a net loss of $9,101,000 on total revenues of $19,633,000 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $30,121,000 in total assets and $30,366,000 in total liabilities, resulting in $1,316,000 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2a85 About a21 Inc Based in Jacksonville, Fla., a21 Inc.(OTC BB: ATWO) -- http://www.a21group.com/-- is a leading online digital content company. Through SuperStock and ArtSelect, a21 delivers high quality images, art framing, and exceptional customer service. ABENGOA BIOENERGY: Loan Buyout Cues S&P to Withdraw 'B-' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B-' issue rating on Abengoa Bioenergy of Nebraska LLC's $90 million senior secured bank loan due 2013. S&P withdrew the rating at the issuer's request following the company's buyout of the lenders' interest in the loan. Abengoa Bioenergy owns and operates an 88 million gallon per year ethanol facility in Ravenna, Nebraska. AEGIS MORTGAGE: Fitch Downgrades Ratings on $342.1MM Certificates ----------------------------------------------------------------- Fitch Ratings has taken rating actions on Aegis mortgage pass- through certificates. Affirmations total $111.3 million and downgrades total $342.1 million. Additionally, $76.4 million was placed on Rating Watch Negative. Break Loss percentages and Loss Coverage Ratios for each class are included with the rating actions as: Aegis 2005-2 -- $19.9 million class IA2 affirmed at 'AAA', (BL: 97.74, LCR: 2.21); -- $25.5 million class IA3 rated 'AAA', placed on Rating Watch Negative (BL: 84.90, LCR: 1.92); -- $40.2 million class IIA1 affirmed at 'AAA', (BL: 90.39, LCR: 2.05); -- $10.0 million class IIA2 rated 'AAA', placed on Rating Watch Negative (BL: 84.79, LCR: 1.92); -- $38.5 million class M1 downgraded to 'A' from 'AA+' (BL: 72.04, LCR: 1.63); -- $34.0 million class M2 downgraded to 'BB' from 'AA' (BL: 60.02, LCR: 1.36); -- $21.0 million class M3 downgraded to 'B' from 'AA-' (BL: 52.46, LCR: 1.19); -- $18.5 million class M4 downgraded to 'B' from 'A+' (BL: 45.86, LCR: 1.04); -- $18.0 million class M5 downgraded to 'CCC' from 'A' (BL: 39.39, LCR: 0.89); -- $16.5 million class M6 downgraded to 'CCC' from 'A-' (BL: 33.40, LCR: 0.76); -- $15.0 million class B1 downgraded to 'CC/DR6' from 'BBB+' (BL: 27.88, LCR: 0.63); -- $14.0 million class B2 downgraded to 'CC/DR6' from 'BBB', removed from Rating Watch (BL: 22.67, LCR: 0.51). Deal Summary -- Originators: Aegis -- 60+ day Delinquency: 48.54% -- Realized Losses to date (% of Original Balance): 3.35% -- Expected Remaining Losses (% of Current balance): 44.15% -- Cumulative Expected Losses (% of Original Balance): 16.51% Aegis 2005-3 -- $51.2 million class A2 affirmed at 'AAA', (BL: 93.43, LCR: 2.07); -- $40.9 million class A3 rated 'AAA', placed on Rating Watch Negative (BL: 80.55, LCR: 1.78); -- $34.0 million class M1 downgraded to 'A' from 'AA+' (BL: 67.79, LCR: 1.5); -- $30.2 million class M2 downgraded to 'BB' from 'AA' (BL: 56.44, LCR: 1.25); -- $19.1 million class M3 downgraded to 'B' from 'AA-' (BL: 49.14, LCR: 1.09); -- $17.4 million class M4 downgraded to 'CCC' from 'A+' (BL: 42.54, LCR: 0.94); -- $15.7 million class M5 downgraded to 'CCC' from 'A' (BL: 36.59, LCR: 0.81); -- $15.7 million class M6 downgraded to 'CC/DR6' from 'A-' (BL: 30.60, LCR: 0.68); -- $13.6 million class B1 downgraded to 'CC/DR6' from 'BBB+' (BL: 25.33, LCR: 0.56); -- $11.5 million class B2 downgraded to 'C/DR6' from 'BBB-' (BL: 20.96, LCR: 0.46); -- $9.4 million class B3 downgraded to 'C/DR6' from 'BB' (BL: 17.69, LCR: 0.39). Deal Summary -- Originators: Aegis -- 60+ day Delinquency: 44.62% -- Realized Losses to date (% of Original Balance): 3.36% -- Expected Remaining Losses (% of Current balance): 45.24% -- Cumulative Expected Losses (% of Original Balance): 17.88% 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. ALASKA COMMS: Earns $120.4 Million in Fourth Quarter Ended Dec. 31 ------------------------------------------------------------------ Alaska Communications Systems Group Inc. reported net income of $120.4 million for the fourth quarter ended Dec. 31, 2007, compared to net income of $4.2 million during the fourth quarter of 2006. Fourth quarter 2007 benefited from a one time net tax gain of $111.2 million. Revenues were $99.1 million, a 7.9 percent increase over fourth quarter 2006 revenues of $91.9 million. EBITDA was $34.0 million, an increase of 7.9 percent, compared to $31.5 million for the year ago period. Operating income of $15.0 million was up 27.8 percent from $11.8 million in the prior year. Net cash provided by operating activities of $26.6 million was in line with the prior year performance of $26.7 million. Management's Comments Liane Pelletier, ACS president and chief executive officer, stated, "Our 2007 performance represents the third consecutive year in which we exceeded revenue and EBITDA targets. Wireless would be offset by a commensurate change in the Company's valuation allowance against its deferred tax assets.revenue, now 36 percent of company revenues, benefited from revenue growth of 19 percent and lower churn. Wireline revenue also grew, at an overall rate of 6 percent, and 45 percent within the enterprise segment; this growth establishes an important track record and contributes meaningfully to our plans for long term value creation in the $200 million Alaska enterprise market." David Wilson, ACS senior vice president and chief financial officer, said, "Solid execution against our strategic plan continues to drive expansion in shareholder cash flow, with $104.9 million of cash generated from operating activities in 2007, up 14.3 percent over the prior year. Our operating performance in 2007 also benefited from higher than run rate wireline network access revenue which benefited from favorable carrier settlements and $6.5 million in regulatory agency settlements." "We remain comfortably positioned to fund our long haul fiber investment having closed the quarter with $36.0 million in unrestricted cash and short term investments, down only $900,000 million in a year where we invested $21.6 million in our growth capex program and delevered by $5.1 million; full access to our $45 million revolver; a net debt to EBITDA leverage ratio of only 2.9 times; and an expected dividend payout ratio, inclusive of $6.0M in estimated launch costs for AKORN, of less than 70 percent," noted Wilson. Twelve Months Ended Dec. 31, 2007 Total revenues were $385.8 million, which represented a 10.6 percent increase over 2006 revenues of $348.7 million. Net income for 2007 was $144.1 million, as compared to a net income of $13.3 million in 2006. Net income benefited from a one- time, non-cash, income tax benefit of $111.2 million arising from the release of the company's valuation reserve for its deferred tax asset. Net cash provided by operating activities for 2007 was $104.9 million as compared to $91.8 million in 2006. EBITDA for 2007 was $138.1 million, an increase of 14.0 percent from $121.2 million in 2006. 2007 performance benefited from network access revenue that management estimates was $10 million higher than long term trends and $700,000 of out-of-period CETC revenue received in the first quarter. Investment in construction and capital investments, net of capitalized interest, totaled $60.9 million, comprising maintenance capital spend of $39.3 million; and investments in growth capital expenditures of $21.6 million. Restatement of Financial Results The financial results presented for the periods ended Dec. 31, 2006 have been restated. As reported by the Troubled Company Reporter on February 28, 2008, the company said that in the course of its 2007 annual review of financial results and application of financial controls, management identified errors in the company's previously reported depreciation expense for fiscal years 2006 and 2007. Accordingly, the company said it expects the restatement of its 2006 and 2007 financial results. The company expects no significant changes to previously reported revenues, EBITDA or cash flows; however, previously reported depreciation expense and net income will change. In its regulatory filing with the Securities and Exchange Commission, the company identified errors in its previously reported depreciation expense for fiscal year 2006 and the first three fiscal quarters of 2007. Certain groups of assets employed in the company's intrastate operations are depreciated over extended lives as required by state regulations, giving rise to "regulatory assets". As the result of a programmatic error, the company incorrectly ceased to depreciate those regulatory assets prior to their becoming fully depreciated. The company recorded additional depreciation charges and a corresponding reduction of its regulatory asset of $5.8 million for the year ended Dec. 31, 2006, and $5.2 million for the nine months ended Sept. 30, 2007. As part of the restatement, the company also made adjustments to the four quarterly interim periods in 2006 and the first three interim periods in 2007 to correct errors identified which were not material to the company's financial statements for the respective periods, either individually or in the aggregate. Adjustments included: i) the recording of additional wireline access revenue of $3.1 million in the first nine months of 2007. The adjustment was made pursuant to a true up of cost studies performed at year end using actual results rather than preliminary budget information used during the year; ii) the capitalization of interest expense on funds used during construction of $625,000 in first three quarters of 2007 and $658,000 for the four quarterly periods in 2006; and iii) a reduction of wireline revenue related to the non- elimination of accrued intercompany revenue that had the effect of overstating quarterly revenues by $446,000 in the first three quarters of 2007 and $615,000 for the four quarterly periods in 2006. Effect on Taxes of Restated Financial Results There is no difference between the gross adjustments arising out of the restatement and the net effect of such adjustments after taxes. The company, during all restated reporting periods, maintained a full valuation allowance against its net deferred tax assets. Thus, any incremental change in taxable income arising out of the restatement would be offset by a commensurate change in the company's valuation allowance against its deferred tax assets. Liquidity and Capital Resources At Dec. 31, 2007, the company had approximately $39.8 million in net working capital, approximately $35.2 million in cash and cash equivalents; $800,000 in short-term investments; and $2.6 million in restricted cash. As of Dec, 31, 2007, the company had $45.0 million of remaining capacity under its revolving credit facility, representing 100% of available capacity. Subsequent to Dec. 31, 2007, the company invested excess cash in auction rate securities. Recent uncertainties in the credit markets have resulted in failed auctions for the company's entire existing portfolio of auction rate securities of $4.5 million. These investments are no longer currently liquid. As of Dec. 31 2007, total long-term obligations outstanding were $433.0 million consisting of a $427.9 million draw from the company's $472.9 million 2005 senior credit facility which has an un-drawn revolving credit facility of $45.0 million; and $5.1 million in finance lease obligations. The company also entered into floating-to-fixed interest rate swaps with total notional amounts of approximately $135.0 million, $85.0 million, $40.0 million, $115.0 million and $52.9 million which swap the floating interest rate on the entire term loan borrowings under the 2005 senior credit facility for a further two to four years at a fixed rate of 5.88%, 6.25%, 6.18%, 6.71% and 6.75%, per year, respectively, inclusive of the 1.75% premium over LIBOR. The swaps are accounted for as cash flow hedges. Balance Sheet At Dec. 31, 2007, the company's consolidated balance sheet showed $663.2 million in total assets, $589.2 million in total liabilities, and $74.0 million in total stockholders' equity. Alaska Communications reported $562,321,000 in total assets and $587,010,000 in total liabilities, reflecting a $24,689,000 stockholders' deficit, as of December 31, 2006. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?2ad9 About Alaska Communications Based in Anchorage, Alaska, Alaska Communications Systems Group Inc. (Nasdaq: ALSK) -- http://www.alsk.com/-- provides broadband and other wireline and wireless solutions to Enterprise, Carrier and mass market customers in Alaska. The ACS wireline operations include the state's most advanced data networks and, to be launched in early 2009, the only diverse undersea fiber optic system connecting Alaska to the contiguous United States. ALITALIA SPA: Air France-KLM Formally Withdraws Binding Offer ------------------------------------------------------------- Air France-KLM SA has formally withdrawn its binding offer to acquire the Italian government's 49.9% stake in Alitalia S.p.A., Chris Staiti and Andrew Davis write for Bloomberg News. According to Air France, the report adds, the agreement disclosed last March 14 was "no longer valid" since the conditions that needed to be met "were not fulfilled." Air France, Alitalia and its unions expressed willingness to resume sale negotiations, which was stalled after the parties failed to reach an agreement on the French carrier's offer. Air France CEO Jean Cyril Spinetta said the airline will not submit a new offer, stressing that the amended plans presented to unions during the negotiations was the only one that would enable Alitalia to return to profitability within a short time. Alitalia chairman Aristide Police had recommended the resumption of negotiations between the parties. Prime Minister-elect Silvio Berlusconi had said he might accept an acquisition of Alitalia by Air France through a tie-up between the carriers. Mr. Berlusconi said Alitalia could be a part of a "three-way merger of equals," referring to becoming a possible third carrier to the merger of Air France and KLM Royal Dutch Airlines. Bridging Loan Gianni Letta, an adviser to Mr. Berlusconi, and nephew Enrico, undersecretary to current Prime Minister Enrico Prodi, have agreed to press for a EUR150 million emergency bridging loan for Alitalia, Bloomberg News relates. They also agreed to work on a joint strategy to sell Alitalia before its cash runs out. As of March 31, 2008, Alitalia had EUR170 million in cash and credits available to finance its operations. The government had pledged to grant Alitalia a EUR300 million bridging loan if the sale of its 49.9% stake to Air France pushes through. The Italian carrier said in January 2008 that it needs to raise EUR750 million in fresh funds in the first half of the year to remain at "adequate operating levels." Italian Bidders AirOne S.p.A., banks led by Intesa Sanpaolo S.p.A. and Italian businessmen led by Mr. Berlusconi adviser Bruno Ermolli may form a group to bid for Alitalia, Bloomberg News says, citing an unsourced Il Messaggero report. According to Il Messaggero, AirOne will own 40% of the bidding vehicle, the banks will control 40% and Mr. Bruno's group will hold 20%. Mr. Berluconi has been insisting that an Italian consortium will present a binding offer for Italy's 49.9% stake in Alitalia in less than a month. About Alitalia Headquartered in Rome, Italy, Alitalia S.p.A. -- http://www.alitalia.it/-- provides air travel services for passengers and air transport of cargo on national, international and inter-continental routes. The Italian government owns 49.9% of Alitalia. The company has operations in Argentina. Despite a EUR1.4 billion state-backed restructuring in 1997, Alitalia posted net losses of EUR256 million and EUR907 million in 2000 and 2001 respectively. Alitalia posted EUR93 million in net profits in 2002 after a EUR1.4 billion capital injection. The carrier booked annual net losses of EUR520 million in 2003, EUR813 million in 2004, EUR168 million in 2005, and EUR625.6 million in 2006. Italian Finance Minister Tommaso Padoa-Schioppa had said that if the sale to Air France fails, Alitalia may seek protection from creditors and the government would appoint a special commissioner to initiate bankruptcy proceedings. Alitalia operates flights to U.S. cities of New York, Boston, Chicago and Miami. Alitalia also operates flights to other U.S. destinations in partnership with other carriers. ALOHA AIRLINES: May Employ Sheppard Mullin as Labor Counsel ----------------------------------------------------------- The United States Bankruptcy Court for the District of Hawaii granted Aloha Airlines Inc. and its debtor-affiliates authority to employ Sheppard Mullin Richter & Hampton LLP as their special labor, employment and employee benefits counsel, nunc pro tunc to the petition date. The employment of Sheppard Mullin is necessary as the Debtors require the assistance of special labor counsel to represent them in connection with labor and employment law matters. Sheldon M. Kline, Esq., a partner at Sheppart Mullin, told the Court that the firm neither holds or represents any interest adverse to the Debtors and their estates and that the firm is a "disinterested person" as that term is defined in Section 101(14) of the bankruptcy code. Sheppard Mullin will charge for its services on an hourly basis in accordance with its its ordinary and customary hourly rates in effect on the date services are rendered. About Aloha Airlines Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates are carriers that fly passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operate a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. This is the airline's second bankruptcy filing. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in February 2006. The company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. AMERICAN HOME: Fitch Junks Ratings on Three Certificate Classes --------------------------------------------------------------- Fitch Ratings has taken rating actions on 1 American Home mortgage pass-through certificate. Affirmations total $46.2 million and downgrades total $17.3 million. Additionally, $6.1 million was placed on Rating Watch Negative. American Home Mortgage Investment Trust 2005-SD1 Group 1 -- $19.5 million class I-A1 affirmed at 'AAA'; -- $2.4 million class I-M1 affirmed at 'AA'; -- $1.1 million class I-M2 downgraded to 'BBB' from 'A'; -- $0.9 million class I-M3 downgraded to 'B' from 'BBB'; -- $1.2 million class I-M4 downgraded to 'CC/DR3' from 'BB'. Deal Summary -- Originators: American Home -- 60+ day Delinquency: 10.85% -- Realized Losses to date (% of Original Balance): 0.21% American Home Mortgage Investment Trust 2005-SD1 Group 2 -- $17.1 million class II-A1 affirmed at 'AAA'; -- $7.2 million class II-M1 affirmed at 'AA'; -- $6.1 million class II-M2 downgraded to 'BBB' from 'A' and placed on Rating Watch Negative; -- $5.5 million class II-M3 downgraded to 'C/DR4' from 'BBB-'; -- $2.4 million class II-M4 downgraded to 'C/DR6' from 'B'; -- Class II-M5 remains at 'C/DR6'. Deal Summary -- Originators: American Home -- 60+ day Delinquency: 7.44% -- Realized Losses to date (% of Original Balance): 14.55% ARCAP 2003-1: Fitch Affirms 'BB' Rating on $24MM Class K Notes -------------------------------------------------------------- Fitch Ratings has upgraded one and affirmed nine classes of notes issued by ARCap 2003-1 Resecuritization, Inc. as: -- $54.8 million class A notes affirmed at 'AAA'; -- $36 million class B notes affirmed at 'AAA'; -- $20.5 million class C notes affirmed at 'AAA'; -- $15.4 million class D notes upgraded to 'AAA' from 'AA+'; -- $36.1 million class E notes affirmed at 'AA'; -- $13 million class F notes affirmed at 'A'; -- $45 million class G notes affirmed at 'A'; -- $9 million class H notes affirmed at 'A-'; -- $28 million class J notes affirmed at 'BBB'; -- $24 million class K notes affirmed at 'BB'. Fitch does not rate class L. The current credit enhancement to the rated classes in relation to the credit quality of the remaining collateral warrants the upgrade. ARCap 2003-1 is a commercial real estate collateralized debt obligation that closed Aug. 27, 2003. The portfolio is primarily backed by commercial mortgage backed securities B-pieces and is a static transaction. A predecessor of Centerline REIT Inc. selected the initial collateral, and Centerline REIT Inc. (rated 'CAM1-' as a CDO asset manager by Fitch) currently serves as the collateral administrator. CMBS B-piece resecuritizations are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. In reviewing CRE CDOs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. The specific credit characteristics that are factored into Fitch's rating review are discussed below. ARCap 2003-1 is collateralized by all or a portion of 64 classes of commercial mortgage backed-securities in 13 separate underlying transactions. All performance and collateral information is based on the March 2008 trustee report. The pool's obligor diversity is considered below average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1999 to 2003 (an average of 6.3 years of seasoning). Approximately 5.9% of the collateral currently is rated below 'B-'. However, there are no unrated or first loss bonds, therefore this transaction is not likely to experience losses in the near-term. While overall a significant portion of the collateral is below investment grade, approximately 17% is investment grade. ARCap 2003-1 holds 42.7% in the 'BB' category and 34.4% in the 'B' category. The collateral has experienced no amortization or losses to date. Additionally, most of the underlying classes have a significant amount of subordination and can therefore withstand future losses to the underlying loans. Since last review (May 4, 2007), the transaction has experienced overall positive rating migration as 12.7% of the collateral was upgraded an average of one notch, and one bond (1.4%) was downgraded three notches. Fitch conducted cash flow modeling to test the transaction's structure under various default and interest rate stress scenarios. The ratings on the class A and B notes address the timely payment of interest and ultimate repayment of principal. The ratings on the classes C through K notes address the ultimate payment of interest and ultimate repayment of principal. ASARCO LLC: Six Affiliates File Separate Chapter 11 Petitions ------------------------------------------------------------- Six debtor-affiliates of bankrupt Asarco, LLC filed for separate voluntary Chapter 11 petitions with the United States Bankruptcy Court for the Southern District of Texas on April 21, 2008. They are: Entity Case No. ------ -------- Wyoming Mining & Milling Co. 08-20197 Alta Mining & Development Co. 08-20198 Tulipan Co., Inc. 08-20199 Blackhawk Mining & Development Co., Ltd. 08-20200 Peru Mining Exploration & Development Co. 08-20201 Green Hill Cleveland Mining Co. 08-20202 Romina L. Mulloy, Esq., at Baker Botts L.L.P. also represents the debtor-affiliates in their restructuring efforts. They all listed estimated assets and debts below $1 million at the time of filing. Based in Tucson, Arizona, ASARCO LLC-- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since Apr. 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). The Debtors have until June 10, 2008 to file a Chapter 11 plan of reorganization. (ASARCO Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATC HEALTHCARE: Non-compliance Prompts Amex to Delist Securities ---------------------------------------------------------------- The American Stock Exchange LLC reported its final determination to remove the common stock of ATC Healthcare Inc. from listing on the Exchange, and filed an application on Form 25 to strike the Securities from listing with the Securities and Exchange Commission. The delisting will become effective on April 28, 2008 unless postponed by the SEC. Pursuant to its rules, the Exchange provided notice to ATC Healthcare Inc. of the decision to delist the Securities and an opportunity to appeal the decision to a panel designated by the Exchange's Board of Governors. On March 14, 2008, ATC Healthcare Inc. disclosed that it received a letter on March 10, 2008 from the American Stock Exchange indicating AMEX's intent to strike ATC's common stock from the AMEX by filing a delisting application with the Securities and Exchange Commission pursuant to Section 1009(d) of the Amex company Guide. The AMEX believes ATC has failed to make progress consistent with the plan of compliance previously submitted to and accepted by AMEX and, as a consequence, the plan no longer presents a reasonable basis of ATC's ability to regain compliance. In particular, the AMEX cited ATC's failure to comply with Sections 134 and 1101 of AMEX company Guide due to its failure to file its Quarterly Reports on Form 10-Q for the quarters ended Aug. 31, 2007 and Nov. 30, 2007. In addition, AMEX stated that ATC's failure to publicly report information concerning its financial position or results limits AMEX's ability to evaluate ATC's progress towards compliance with Section 1003(a)(iii) of the AMEX company guide. Moreover, AMEX stated, ATC is not in compliance with Section 1003(f)(v) of the AMEX company Guide because the company's common stock has been trading for a substantial period of time at prices per share ranging over the past six months between $.09 and $.28 per share. About ATC Healthcare Headquartered in Lake Success, New York, ATC Healthcare Inc. (OTC:AHNA) -- http://atchealthcare.com/-- provides medical supplemental staffing services. The company provides supplemental staffing to healthcare facilities through its network of 52 offices in 31 states, of which 45 are operated by 30 licensees and 7 are owned and operated by the company. It offers clients qualified healthcare associates in over 50 job categories ranging from the highest level of specialty nurse, including critical care, neonatal and labor and delivery, to medical administrative staff, including third-party billers, administrative assistants, claims processors, collection personnel and medical records clerks. The nurses provided to clients include registered nurses, licensed practical nurses and certified nursing assistants. Other services include allied health staffing, which includes mental health technicians, a variety of therapists, radiology technicians and phlebotomists. In June 2006, ATC acquired the assets of Critical Nursing Services Inc. ATSI COMMUNICATIONS: January 31 Balance Sheet Upside-Down by $250K ------------------------------------------------------------------ ATSI Communications Inc.'s consolidated balance sheet at Jan. 31, 2008, showed $2,516,000 in total assets and $2,766,000 in total liabilities, resulting in a $250,000 total stockholders' deficit. The company reported net income of $79,000 for the second fiscal quarter ended Jan. 31, 2008, compared to net income of $38,000 for the same period in the previous year. The company incurred $178,000 in net non-cash expenses during the quarter ended Jan. 31, 2008, compared with $36,000, net of a $192,000 non-cash preferred dividend benefit during the quarter ended Jan. 31, 2007. Non-cash expenses incurred during the period include depreciation, amortization, interest, stock compensation and preferred dividends. "Our second fiscal quarter was a record quarter for ATSI in almost every metric we utilize to measure the performance of our business," Arthur L. Smith, CEO of ATSI stated. "We continued expansion of our sales team during the 2nd quarter to drive future growth while developing a proprietary billing and operational support system to further facilitate a scalable business model. I commend our team for delivering on the objective of improving gross profit while controlling expenses that to date has resulted in exceeding the company's business plan for fiscal year 2008." About ATSI Communications Headquartered in San Antonio, Texas, ATSI Communications Inc. (OTC BB: ATSX) -- http://www.atsi.net/-- operates through two wholly owned subsidiaries, Digerati Networks Inc. and Telefamilia Communications Inc. Digerati is a VoIP carrier serving markets in Asia, Europe, the Middle East, Latin America and Mexico. Telefamilia provides retail communication services to the Hispanic market in the United States. ATSI also owns a minority interest of a subsidiary in Mexico, ATSI Comunicaciones S.A. de C.V., which operates under a 30-year government issued telecommunications license. Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 22, 2007, Malone & Bailey PC, in Houston, Texas, expressed substantial doubt about ATSI Communications Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended July 31, 2007, and 2006. The auditing firm stated that ATSI has a working capital deficit, has suffered recurring losses from operations and has a stockholders' deficit. BABS TRUSTS: Moody's Cuts Five Tranches' Ratings from RMBS Deal --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 5 tranches from 1 subprime RMBS transaction issued by Basic Asset Backed Securities Trust. 2 downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Basic Asset Backed Securities Trust 2006-1 -- Cl. M-2, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa2 from B3 -- Cl. M-5, Downgraded to Caa2 from B3 -- Cl. M-6, Downgraded to C from Ca BRAVO MORTGAGE: Moody's Cuts 10 Tranches' Ratings From 1 RMBS Deal ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 10 tranches from 1 subprime RMBS transaction issued by Bravo. 2 downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first- lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Bravo Mortgage Asset Trust 2006-1 -- Cl. M-2, Downgraded to Baa2 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from A3 -- Cl. M-7, Downgraded to Caa2 from Baa2 -- Cl. M-8, Downgraded to Caa3 from Baa3 -- Cl. M-9, Downgraded to Ca from Ba1 -- Cl. M-10, Downgraded to C from Ba2 -- Cl. M-11, Downgraded to C from Ba3 CAMPBELL RESOURCES: Posts $18.9 Mil. Net Loss for 2007 ------------------------------------------------------ Campbell Resources Inc. reported net loss of $18.9 million for the fiscal year 2007 ended Dec. 31, down from $41.1 million in 2006. The net loss in 2006 included a write-down of the carrying value of the Copper Rand Mine by $23.7 million and the write-down of the Joe Mann Mine to $1.3 million. No project write-downs were taken in 2007. As of Dec. 31, 2007, the company reflected total assets $65.350 million, total liabilities $59.219 million and a total stockholders' equity of $6.131 million. "Fiscal 2007 was a very important year for Campbell, during which we implemented a number of changes in our operations and brought new assets on stream, all of which created a solid base for future growth," Andre Fortier, Campbell's president and chief executive officer, said. "As we enter 2008, Campbell now has three operations in production, in line with our strategy to increase throughput at the Copper Rand mill, which is now operating on a five day per week schedule." "We have increased the number of producing faces at the Copper Rand Mine from one to three, with more to come in 2008 and 2009; we are ramping up production of higher grade ore at Corner Bay and expect to reach the main ore zone in the second quarter; and the Merrill Pit has performed well, with higher grade areas targeted for production this year," Mr. Fortier added. "These positive developments point toward substantially higher production levels, more competitive costs per ton and significantly improved financial performance in 2008." The Copper Rand Mine began commercial production on Jan. 1, 2007. Prior to that date, net metal sales from Copper Rand were applied against development costs. Production at the Joe Mann Mine ceased in September, 2007. In 2006, Joe Mann was the Company's only mine that had achieved commercial production. Mining at the Merrill Pit began in October, 2007. Gross metal sales totaled $26.8 million in 2007 compared to $11.9 million in 2006, $15.9 million of gross metal sales of Copper Rand were applied against development costs in 2006. The net decrease of $1.0 million is primarily due to the 17% reduction in ore tonnage combined with a 13% reduction in gold grade from 0.207 oz./t in 2006 to 0.181 oz./t at Joe Mann in 2007, a 23% reduction in average copper grade at Copper Rand from 2.19% in 2006 to 1.69% in 2007, a decrease in the average selling price per pound of copper, from $3.29 US in 2006 to $3.37 US in 2007 and the strength of the Canadian dollar vis-a-vis the US dollar had a major impact on revenue. In 2007, production costs increased by $24.4 million to $38.3 million, up $13.9 million from 2006. The bulk of the increase is due to the fact that $16.0 million in production costs at Copper Rand were capitalized during 2006 as the mine had not yet achieved commercial production. The remaining $8.4 million is primarily due to Copper Rand's implementation of the Alimak mining system, additional development undertaken to access additional mining zones, commissioning of the backfill plant and backfilling of all mined open stopes, increased maintenance expenses, re- initiation of a definition drilling program, and rehabilitation costs incurred following a rock fall in the main ramp at the end of February, 2007. About Campbell Resources Headquartered in Montreal, Quebec, Campbell Resources Inc. (TSX: CCH, OTC BB: CBLRF) -- http://www.ressourcescampbell.com/-- is a mining company focusing mainly in the Chibougamau region of Quebec, holding interests in gold and gold-copper exploration and mining properties. The Superior Court of Quebec (Commercial District) granted the company protection under the CCAA on June 30, 2005. The plans of arrangement presented to the creditors of Campbell Resources Inc., Meston Resources Inc. and MSV Resources Inc., under the Companies' Creditors Arrangement Act, received the required approvals on June 27, 2006, in Chibougamau. The main assets of the company are the Joe Mann Mine, an underground gold mine owned by Meston Resources Inc., a wholly owned subsidiary of the company, the Copper Rand Mine, an underground gold and copper mine owned by MSV Resources Inc., a wholly owned subsidiary of the company, and the Corner Bay Property, located near the Chibougamau Lake in the townships of Lemoine and Obalski, a total of 16 claims, which are held by MSV. The company's properties include Pitt Gold, Berthiaume Syndicate, Chevrier, Gwillim, Joe Mann Mine, Cedar Bay, Copper Rand Mine, Corner Bay, Eastmain and Lac Harbour. The activities of GeoNova Explorations Inc. consist mainly in the acquisition, exploration and development of mining properties. It focuses on exploration in the Province of Quebec and more specifically, in the Abitibi region. CAROL CHRISTA: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Carol W. Christa a.k.a. Carol Lau 828 Valley View Lane Duluth, GA 30096 Bankruptcy Case No.: 08-66247 Chapter 11 Petition Date: April 1, 2008 Court: Northern District of Georgia (Atlanta) Judge: Judge C. Ray Mullins Debtor's Counsel: Jerry A. Daniels, Esq. Jerry A. Daniels, LLC Suite 300 175 Gwinnett Drive Lawrenceville, GA 30045 Phone: (770) 962-4070 E-mail: jerry@danielstaylor.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $50,001 to $1 million Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ------ --------------- ------------ USAA Credit Card Services Credit card purchases $17,379 P. O. Box 65020 San Antonio, TX 78265-5020 GA Department of Revenue - Income taxes 4,956 BK 2007 4245 International Parkway Suite B Atlanta, GA 30354 Bank of America Credit card purchases 3,311 P. O. Box 37291 Baltimore, MD 21297-3291 Discover Card Credit card purchases 2,194 MacCord Mason PLLC Attorney fees 2,468 Cherokee Surveying Co. Inc. Trade debt 2,025 Bank of America Credit card purchases 1,755 Anderson Tate & Carr, P.C. Attorney fees 1,093 Walter Edwards, MD Medical Expenses 1,013 Atlanta Outpatient Surgery Medical Expenses Unknown Superior Surgical Medical Expenses 75 Your Extra Attic Rent on Storage Unknown units CHEM RX: Moody's Changes Outlook to Negative; Holds 'B2' Rating --------------------------------------------------------------- Moody's Investors Service affirmed Chem Rx Corporation's B2 corporate family rating, but revised its ratings outlook to negative from stable. The outlook revision reflects the company's weaker than expected operating performance relative to Moody's expectations. The company has experienced increased delivery costs and increased competition from local players while operating margins at the New Jersey operation were lower than expected. An increase to the reserve for doubtful accounts also reduced earnings. The outlook revision also reflects higher than expected drawings under the revolving credit facility. As a result of these issues, the company's flexibility under its financial covenants is limited. Notwithstanding these risks, Moody's recognizes the potential for improved operating performance in fiscal 2008 due to an expectation of continued organic growth in the number of beds, a potential stabilization of its New Jersey operations, and a ramp-up of the new Florida operations. These ratings were affirmed: -- Corporate family rating at B2; -- Probability-of-default rating at B2; -- $25 million senior secured revolving credit facility due 2012 at B1 (LGD3, 38%). Point estimate revised from (LGD3, 36%); -- $80 million first lien senior secured term loan due 2013 at B1 (LGD3, 38%). Point estimate revised from (LGD3, 36%); -- $20 million first lien delayed draw term loan due 2013 at B1 (LGD3, 38%). Point estimate revised from (LGD3, 36%); -- $37 million second lien senior secured term loan due 2014 at Caa1 (LGD5, 84%). Point estimate revised from (LGD5, 82%). The $20 million delayed draw term loan expires on July 31, 2008. Assuming this term loan remains unused, Moody's will withdraw the rating at that time. Chem Rx's B2 corporate family rating continues to reflect high financial leverage, modest scale, the concentration of business within one segment, significant competition from Omnicare Inc. and PharMerica Corporation (which are much larger and better capitalized than Chem Rx) as well as from smaller local players, low barriers to entry, significant supplier concentration, narrow geographic focus on the New York region, the potential for unforeseen challenges as the company ramps-up new facilities, and cash flow pressure stemming from its material working capital requirements. The rating also considers the highly competitive and fragmented nature of the institutional pharmacy market and acquisition risk as the company seeks to expand its geographic presence. The rating is supported by the company's competitive position as one of the few players of scale in the institutional pharmacy market, good organic growth trends, modest capital expenditure requirements, and its adequate liquidity profile. Headquartered in Long Beach, New York, Chem Rx Corporation provides institutional pharmacy services to skilled nursing facilities and other long-term healthcare institutions. For the fiscal year ended Dec. 31, 2007, Chem Rx generated pro forma sales of approximately $317 million. CHILDREN'S TRUST: Fitch Expects to Rate $47.377MM Bonds at BB ------------------------------------------------------------- Fitch expects to rate Children's Trust (Puerto Rico) Series 2008 Tobacco Bonds as: -- $157,912,329 series 2008A turbo capital appreciation bonds due May, 15 2058,'BBB-'; -- $47,377,904 series 2008B turbo capital appreciation bonds due May, 15 2058,'BB.' CIT GROUP: To Raise $1 Bil., Partly to Pay Interest on Notes ------------------------------------------------------------ CIT Group Inc. commenced concurrent offerings of common stock and non-cumulative perpetual convertible preferred stock, series C, with a liquidation preference of $50 per share, for an aggregate of $1 billion. CIT also expects to grant the underwriters for the offerings an over-allotment option to purchase additional shares of the common stock and an over-allotment option to purchase additional shares of the convertible preferred stock. The offerings are being conducted as public offerings registered under the Securities Act of 1933. The convertible preferred stock will be convertible into shares of CIT's common stock, plus cash in lieu of fractional shares. The non-cumulative dividend rate, conversion rate and other terms will be determined by negotiations between CIT and the underwriters of the convertible preferred stock offering. An application has been made to list the convertible preferred stock on the New York Stock Exchange under the symbol "CITPrC." CIT intends to use the net proceeds from the sale of the common stock and the sale of the convertible preferred stock for general corporate purposes, including, in the case of the sale of the common stock, the payment of dividends on its outstanding preferred stock for the second quarter of 2008 in an amount of approximately $8 million and the payment of interest on its outstanding junior subordinated notes in the third quarter of 2008 in an amount of approximately $23 million. The Troubled Company Reporter reported on March 25, 2008 that CIT Group is drawing upon its $7.3 billion in unsecured U.S. bank credit facilities, and will use the proceeds to repay debt maturing in 2008, including commercial paper, and provide financing to its core commercial franchises. The report also contained that according to various sources, the company failed to draw from its normal operational funding after ratings firms downgraded the bank's debt. J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated, Lehman Brothers Inc. and Citigroup Global Markets Inc. are serving as joint bookrunning managers of these offerings. The offerings will be made under CIT's shelf registration statement filed with the Securities and Exchange Commission. About CIT Group CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a global commercial finance company that provides financial products and advisory services to more than one million customers in over 50 countries across 30 industries. A leader in middle market financing, CIT has more than $80 billion in managed assets and provides financial solutions for more than half of the Fortune 1000. A member of the S&P 500 and Fortune 500, it maintains leading positions in asset-based, cash flow and Small Business Administration lending, equipment leasing, vendor financing and factoring. The CIT brand platform, Capital Redefined, articulates its value proposition of providing its customers with the relationship, intellectual and financial capital to yield infinite possibilities. COGENTRIX ENERGY: Facility Cancellation Cues S&P to Withdraw Rtng. ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'BB-' corporate credit rating on Cogentrix Energy Inc., and at the same time, withdrew the 'BB+' senior secured issue rating on Cogentrix's $50 million revolving credit facility, following the cancellation of the facility. There is currently no rated debt at the company. CHRYSLER LLC: Calls Back Laid-Off Workers, Report Says ------------------------------------------------------ Chrysler LLC has taken back some third shift employees it laid-off in March 2008 under a 199-day Enhanced Temporary Employees contract, Dani Maxwell of 13 News reports. The workers will begin work on May 5, with a starting pay of $14 an hour with no benefits or vacation time. As reported in the Troubled Company Reporter on March 11, 2008, around 1,100 workers were laid-off as Chrysler LLC formally shuts down its plant in Belvidere, Illinois. The closure of the plant, which produces the company's line of Dodge Caliber, Jeep Patriot, and Jeep Compass brands, is part of the automaker's move to consolidate operations, streamline production, and generally reduce costs. Chrysler already took measures such as tossing away duplicative car models, moving far-flung operations to its headquarters, and made deals with Daimler AG to access new technology. The company's moves came after it lost its tooling battle with Plastech Engineered Products Inc. As previously reported, the U.S. Bankruptcy Court for the Eastern District of Michigan denied the company's request to pull out tooling equipment from Plastech's plants. However, the parties have agreed to subsequent supply deals. The Belvidere plant's third shift workers began work in July 2006 when Chrysler decided to turn off its robotic body shop. As their employment drew to a close, the company stationed extra security at the plant to prevent rumored violence when the workers went out. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services revised its recovery rating on Chrysler's $2 billion senior secured second-lien term loan due 2014. The issue-level rating on this debt remains unchanged at 'B', and the recovery rating was revised to '3', indicating an expectation for 50% to 70% recovery in the event of a payment default, from '4'. Both the issue-level and recovery ratings on Chrysler's $7 billion first-lien term loan due 2013 remain unchanged. The issue-level rating on this debt is 'BB-' with a recovery rating of '1', indicating an expectation for 90% to 100% recovery in the event of a payment default. COMM 2005-C6: S&P Places Ratings Under Negative CreditWatch ----------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on seven classes of commercial mortgage pass-through certificates from COMM 2005-C6 on CreditWatch with negative implications. The ratings on three additional classes remain on CreditWatch negative. The CreditWatch placements reflect Standard & Poor's preliminary analysis of the 10th-largest loan, Communities at Southwood. S&P's analysis suggests a significant value decline compared with the value at issuance. The loan was transferred to the special servicer, Capmark Finance Inc., on Feb. 8, 2008, due to imminent default. Standard & Poor's will update or resolve the CreditWatch negative placements as S&P continue to monitor the workout process for all of the specially serviced assets. The 10th-largest loan has a total exposure of $50.2 million, including interest and advancing thereon. In addition, the borrower's equity interest in the property secures a $4.0 million mezzanine loan. The loan is secured by a 1,286-unit multifamily complex in Richmond, Virginia. The property was built between 1970 and 1979 and renovated in 2004. Year-end 2007 debt service coverage for the property was 0.50x and occupancy was 70%, compared with an occupancy of 98% at issuance. The preliminary analysis used the borrower's 2007 financial statement and considered current market occupancy and rental rate information. Standard & Poor's analysis derived a value approximately 31% lower than its level at issuance. Capmark has ordered a new appraisal, and preliminary indications show that the final appraisal is likely to result in a substantial appraisal reduction amount, which will cause appraisal subordinate entitlement reduction shortfalls. S&P will update and/or resolve the CreditWatch negative placements as more details concerning the workout process and property status become available. Ratings Placed on Creditwatch Negative COMM 2005-C6 Commercial mortgage pass-through certificates series 2005-C6 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ E A-/Watch Neg A- 6.83% F BBB+/Watch Neg BBB+ 5.69% G BBB/Watch Neg BBB 4.56% H BBB-/Watch Neg BBB- 3.54% J BB+/Watch Neg BB+ 2.91% K BB/Watch Neg BB 2.40% L BB-/Watch Neg BB- 2.15% Ratings Remaining on Creditwatch Negative COMM 2005-C6 Commercial mortgage pass-through certificates series 2005-C6 Class Rating Credit enhancement ----- ------ ------------------ M B+/Watch Neg 1.52% N B/Watch Neg 1.39% O B-/Watch Neg 1.14% CONSTAR INT'L: Dec. 31 Balance Sheet Upside-Down by $72.3 Million ----------------------------------------------------------------- Constar International Inc. reported $472.3 million in total assets and $544.6 million in total liabilities at Dec. 31, 2007, resulting in a $72.3 million total stockholders' deficit. Stockholders' deficit increased to $72.3 million at Dec. 31, 2007, from $49.6 million at Dec. 31, 2006. The increase was primarily due to a net loss of $26.3 million in 2007 and the revaluation of a cash flow hedge of $4.2 million, offset by postretirement amortization of $6.3 million and foreign currency translation adjustments of $1.8 million. Fourth Quarter Results Net loss was $14.1 million in the fourth quarter of 2007, compared to a net loss of $7.2 million in the fourth quarter of 2006. Consolidated net sales were $202.8 million in the fourth quarter of 2007 compared to $207.1 million in the fourth quarter of 2006. In the U.S., net sales were $159.5 million in the fourth quarter of 2007 compared to $163.8 million in the fourth quarter of 2006. This decrease in sales was driven by contractual price concessions and the pass-through of lower resin costs to customers. In Europe, net sales were $43.3 million in the fourth quarter of 2007, unchanged compared to the fourth quarter of 2006. European volume increased 7.1 percent for the fourth quarter of 2007 compared to the fourth quarter of 2006. In addition, foreign currency changes increased sales by 6.5 percent in the fourth quarter of 2007 compared to the fourth quarter of 2006. These increases were offset by the pass through of lower resin costs and a negative sales revenue mix shift to higher volume but lower revenue products. The company recorded a provision for restructuring of $555,000 in the fourth quarter of 2007 related to the closing of one of the company's U.S. facilities. Operating loss was $2.3 million in the fourth quarter of 2007 compared to operating income of $1.4 million in the fourth quarter of 2006. Interest expense decreased to $10.0 million in the fourth quarter of 2007 compared to $10.2 million in the fourth quarter of 2006. Other expense was $1.7 million in the fourth quarter of 2007 compared to income of $1.3 million in the fourth quarter of 2006. The expense in 2007 primarily resulted from the negative impact of foreign currency translation of intra-company balances, partially offset by net royalty income. Credit Agreement EBITDA excluding restructuring charges in the fourth quarter of 2007 decreased by $1.7 million, or 14.8 percent, to $9.5 million from $11.1 million in the fourth quarter of 2006. Management's Comments "While we achieved our most recent EBITDA guidance, 2007 was a disappointing year for Constar, mainly due to price declines totaling $15 million and weak conventional sales. In spite of the obstacles we faced, we made great progress using our portfolio of superior technologies to gain new volume that led to 23.8 percent custom unit growth in the fourth quarter of 2007 compared to the same quarter in 2006. "In addition, we expect approximately 30 percent unit growth in custom packaging in 2008 due to the carryover impact of new custom business secured in 2007 and newly signed custom contracts for 2008," commented Michael Hoffman, president and chief executive officer of Constar. "2008 performance is also supported by contractual price increases and a strong liquidity position as we begin the year." Restates 2006 Financial Statements In connection with preparing its 2007 financial statements, the company discovered errors related to: i) the improper capitalization of certain property, plant and equipment acquired in 2003 and prior periods; ii) an understatement of depreciation expense for certain property, plant and equipment acquired in 2003 and prior periods; and iii) improperly accounting for landlord incentives which understated current liabilities and property, plant and equipment. In addition, the company corrected the classification within stockholders' deficit for the recording of a previously disclosed error in recording a deferred tax asset valuation allowance related to a minimum pension liability. As a result, the company has restated its consolidated financial statements for the year ended Dec. 31, 2006, in its 10K for the year ended Dec. 31, 2007, to correct these errors, as well as other previously identified errors that were corrected in the periods they became known, rather than the periods in which they originated. The impact of these non-cash adjustments resulting from this review and for previously corrected non-cash items was a $700,000 increase to Credit Agreement EBITDA before restructuring for the year ended Dec. 31, 2006, and a reduction of $1.8 million to the previously reported net loss for the year ended Dec. 31, 2006. The impact of the restatement on periods prior to Jan. 1, 2006, is reflected as an increase to beginning accumulated deficit of $3.1 million and an increase of $3.4 million to beginning accumulated other comprehensive loss. The company will separately restate its quarterly financial statements for 2007 and 2006 by amending its previously issued 2007 Quarterly Reports on Form 10-Q as soon as practicable. In light of the restatement, the company concluded that a material weakness existed at Dec. 31, 2007, in the design and operation of internal controls relating to accounting for property, plant and equipment and related depreciation expense. As a result, the company did not maintain effective internal control over financial reporting at Dec. 31, 2007. Full Year Results Consolidated net sales declined to $881.6 million in 2007 from $927.0 million in 2006. In the U.S., net sales decreased $61.1 million to $689.1 million in 2007 from $750.2 million in 2006. The decrease in U.S. net sales in 2007 was driven by a decrease in unit volume of 4.5 percent and negative pricing impact of approximately $15.0 million. In Europe, net sales increased $15.7 million to $192.5 million in 2007 from $176.8 million in 2006. The increase in European net sales in 2007 was primarily due to a 5.7 percent increase in total unit volume and the strengthening of the British Pound and Euro against the U.S. Dollar. The company recorded a provision for restructuring of $3.7 million in 2007 principally related to the company's facility in Holland and a facility in the U.S. Operating income was $15.1 million in 2007 compared to operating income of $28.9 million in 2006. Interest expense decreased $200,000 to $41.0 million in 2007. In 2007, the company reported other expense of $564,000 compared to other income of $2.8 million in 2006. The expense in 2007 primarily resulted from the negative impact of foreign currency translation of intra-company balances, partially offset by net royalty income of $900,000. Net loss in 2007 was $26.3 million, compared to a net loss of $10.3 million in 2006. Credit Agreement EBITDA excluding restructuring charges in 2007 decreased by 16.7 percent to $55.2 million from $66.3 million in 2006. Free Cash Flow Free cash flow was negative $15.3 million in 2007 as compared to positive free cash flow of $21.7 million in 2006. The decrease in cash flow was driven by lower EBITDA results, cash restructuring charges and increased capital spending in support of new customer custom unit projects and less improvement in working capital in 2007 as compared to 2006. Liquidity As of Dec. 31, 2007, there were $400,000 of borrowings under the Revolver Loan, $7.0 million outstanding under letters of credit and $395 million in other debt. The company had $4.3 million of cash on its balance sheet, and the company had the ability to borrow $54.8 million under the Revolver Loan. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, is available for free at http://researcharchives.com/t/s?2ad6 About Constar International Based in Philadelphia, Pa., Constar International (NASDAQ: CNST) -- http://www.constar.net/-- is a manufacturer of PET plastic containers for food and beverages. In addition, the company produces plastic closures and other non-PET containers representing less than 4% of sales. Approximately 78% of the company's revenues in 2007 were generated in the United States, with the remainder attributable to its European operations. * * * Constar International Inc. still carries Moodys' Caa2 Senior Subordinate Debt assigned on Sept. 11, 2006. CONTINENTAL AIRLINES: S&P Changes Outlook to Negative on Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on Continental Airlines Inc. (B/Negative/B-3) to negative from stable. S&P also placed its ratings on selected enhanced equipment trust certificates that are secured by regional jets on CreditWatch with negative implications. "The negative outlook is based on the earnings and cash flow impact of rapidly increasing fuel prices and a weak U.S. economy," said Standard & Poor's credit analyst Philip Baggaley. "While Continental continues to report better operating results than its peer 'legacy carriers,' including a relatively modest $80 million first-quarter 2008 net loss, there is a clear risk of deterioration in its financial profile due to the very difficult airline industry outlook," the analyst continued. The CreditWatch listing of selected enhanced equipment trust certificates reflects concerns that collateral values of 50-seat regional jets, which are less fuel-efficient on a per-seat basis than most other planes, will come under pressure because of continued high fuel prices. Neither the outlook change nor the CreditWatch listing are related to the impact of the recently announced merger agreement between Delta Air Lines Inc. and Northwest Airlines Corp., although S&P does believe that Continental may enter into a merger of its own in response. In that event, S&P would place its ratings on Continental on CreditWatch. The 'B' long-term corporate credit rating on Houston-based Continental reflects its participation in the high-risk airline industry and a heavy debt and lease burden, but also better-than- average operating performance among its peer large U.S. hub-and- spoke airlines. S&P expects Continental, like other U.S. airlines, to report materially worse earnings and cash flow in 2008 than last year (when the company reported an impressive $566 million of pretax earnings), because of much higher fuel prices and a weak U.S. economy. The company's first-quarter loss, while likely to be the best result among peer legacy carriers, showed the impact of higher fuel prices ($433 million higher, including the indirect impact through payments to regional partner airlines). Continental, the fourth-largest U.S. airline, serves markets mainly in the southern and eastern U.S. from hubs at Houston; Newark, New Jersey; and Cleveland, Ohio. International routes serve the central Pacific, selected Asian destinations, Latin America, and Europe. Continental's route system is more balanced among these various markets than those of other large U.S. airlines, reducing risk somewhat. Although Continental currently has adequate liquidity and will likely report narrower losses than similar U.S. airlines, worse- than-expected fuel prices and economic weakness could erode the company's financial profile and cause a downgrade. If Continental is able to weather the downturn and industry conditions improve, S&P could revise the outlook to stable. If Continental announces a merger agreement, S&P will place its ratings on the company, excepting 'AAA' rated aircraft-backed debt insured by bond insurers, on CreditWatch. The CreditWatch implications would depend on particulars of the announced transaction. Our CreditWatch review of selected enhanced equipment trust certificates secured by regional jets will focus on Continental's expected need to maintain control of these planes in any future bankruptcy and on expected market values of the planes in view of much higher fuel prices. COPPER SANDS: Case Summary & Seven Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Copper Sands, Inc. dba Hideaway Bay Restaurant 9788 Shore Cliff Road Angola, NY 14006 Bankruptcy Case No.: 08-11656 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- Crossed Palms Development, Ltd. 08-11657 Chapter 11 Petition Date: April 18, 2008 Court: Western District of New York (Buffalo) Judge: Carl L. Bucki Debtors' Counsel: Robert B. Gleichenhaus, Esq. Gleichenhaus, Marchese & Falcone, P.C. 930 Convention Tower, 43 Court Street Buffalo, NY 14202 Tel: (716) 845-6446 Fax: (716) 845-6475 Email: RBG_GMF@hotmail.com Estimated Assets Estimated Debts ---------------- --------------- Copper Sands, Inc. $100,000 to $100,000 to $500,000 $500,000 Crossed Palms Development, $1 million to $100,000 to Ltd. $10 million $500,000 A. Copper Sands, Inc's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ NYS Dept. of Taxation & Sales tax arrears $108,661 Finance Bankruptcy Unit P.O. Box 5300 Albany, NY 12205-0300 Sysco Food Services, Inc. Business debt $3,000 2063 Allen Street Ext. Jamestown, NY 14702 US Foods Business debt $2,340 125 Gardenville Parkway Buffalo, NY 14224 Blue Cross Blue Sheild Business debt $2,184 B. Crossed Palms Development, Ltd's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ NYS Dept. of Taxation & Sales tax arrears $108,661 Finance Bankruptcy Unit P.O. Box 5300 Albany, NY 12205-0300 National Fuel Business property $2,500 6363 Main Street Williamsville, NY 14221 NYSEG Business debt $2,500 Billing Dept. P. O. Box 5600 Ithaca, NY 14852 CREDIT SUISSE: Fitch Rates $2.218MM Class Q Certificates at B- -------------------------------------------------------------- Credit Suisse Commercial Mortgage Trust, Series 2008-C1, commercial mortgage pass-through certificates are rated by Fitch Ratings as: -- $12,500,000 class A-1 'AAA'; -- $150,500,000 Class A-2 'AAA'; -- $22,262,000 class A-AB 'AAA'; -- $258,000,000 class A-3 'AAA'; -- $99,282,000 class A-1-A 'AAA'; -- $78,500,000 class A-2FL 'AAA'; -- $88,721,000 class A-M 'AAA'; -- $57,668,000 class A-J 'AAA'; -- $887,206,600 class A-X 'AAA'; -- $8,872,000 class B 'AA+'; -- $8,872,000 class C 'AA'; -- $12,199,000 class D 'AA-'; -- $9,982,000 class E 'A+'; -- $6,654,000 class F 'A'; -- $8,872,000 class G 'A-'; -- $14,417,000 class H 'BBB+'; -- $6,654,000 class J 'BBB'; -- $9,981,000 class K 'BBB-'; -- $3,327,000 class L 'BB+'; -- $3,327,000 class M 'BB'; -- $3,327,000 class N 'BB-'; -- $1,109,000 class O 'B+'; -- $2,218,000 class P 'B'; -- $2,218,000 class Q 'B-'. Class A-X is a notional amount and interest only. The $17,744,600 class S is not rated by Fitch. All classes are privately placed pursuant to rule 144A of the Securities Act of 1933. The certificates represent beneficial ownership interest in the trust, primary assets of which are 60 fixed rate loans having an aggregate principal balance of approximately $887,206,600, as of the cutoff date. CRIIMI MAE: Fitch Holds 'B-' Rating on $51.5 Million Certificates ----------------------------------------------------------------- Fitch Ratings has affirmed the classes of CRIIMI MAE Trust I, series 1996-C1, commercial mortgage-backed securities pass-through certificates, as: -- $51.5 million class E at 'B-'. In addition: -- $8.6 million class F remains at 'C/DR5'. Classes A-1 through D have paid in full. CRIIMI MAE 1996-C1 is backed by CMBS B-pieces and closed on Dec. 20, 1996. CMBS B-piece resecuritizations are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. A predecessor to CWCapital Investment LLC selected the initial collateral; CWCapital now serves as the collateral administrator. In reviewing ReREMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. The specific credit characteristics that are factored into Fitch's rating review are discussed below. CRIIMI MAE 1996-C1 is collateralized by all or a portion of six classes of fixed-rate CMBS in four separate underlying transactions. All performance and collateral information is based on the Mar. 31, 2008 trustee report. The pool is extremely concentrated, with less than 10% of the original collateral remaining since issuance. The remaining bonds are of the 1995 and 1996 vintages, an average of over 12 years of seasoning. Each underlying transaction has fewer than 30 loans remaining. 80.1% of the collateral is rated below 'B-' or not rated, and therefore, is more susceptible to losses in the near-term. There is one bond (19.9%) rated 'AAA'. The ReREMIC has experienced $285.5 million of paydowns and $352.4 million in losses since issuance. Of the losses, $349 million were losses to issuer equity. Although there are currently no loans that are delinquent or in special servicing, any further losses to the underlying collateral would impact class F. CULLIGAN INT'L: S&P Cuts Rating to B- on Fin'l Performance Drop --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on water services provider Culligan International Co., including the corporate credit rating (to 'B-' from 'B') and the issue-level and recovery ratings. S&P removed the ratings from CreditWatch, where they had been placed with negative implications on Nov. 30, 2007, because of fiscal 2007 operating results that were below S&P's expectations. The outlook is stable. Total debt outstanding at the company was about $831 million as of Dec. 31, 2007. "The downgrade primarily reflects a decline in financial performance resulting from weak organic growth during the year, and the company's high leverage," said Standard & Poor's credit analyst Kenneth Shea. For the full year 2007, adjusted EBITDA declined 15%, reflecting a 1% decline in organic sales, narrowed gross margins, inventory rationalization, and costs associated with the transition to a new third-party distribution center. These factors were partially offset by the favorable impact of lower product costs achieved from some manufacturing outsourcing initiatives. Rosemont, Illinois-based Culligan participates in a highly competitive and fragmented industry with modest growth prospects. The company distributes its products primarily through an extensive dealer network, which Standard & Poor's views as a competitive advantage. CWABS TRUSTS: 572 Tranches Get Moody's Rating Cuts on Delinquency ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 572 tranches from 59 subprime RMBS transactions issued by CWABS. 170 downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: CWABS Asset-Backed Certificates Trust 2005-10 -- Cl. MV-9, Downgraded to Ba1 from Baa3 -- Cl. MV-10, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. BV, Downgraded to Caa1 from Ba2 -- Cl. MF-6, Downgraded to Baa1 from A3 -- Cl. MF-7, Downgraded to Ba1 from Baa1 -- Cl. MF-8, Downgraded to B1 from Baa2 -- Cl. BF, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWABS Asset-Backed Certificates Trust 2005-11 -- Cl. MV-8, Downgraded to Baa3 from Baa2 -- Cl. MV-9, Downgraded to B2 from Baa3 -- Cl. BV, Downgraded to Caa1 from Ba1 -- Cl. BF, Downgraded to Ba2 from Baa3 Issuer: CWABS Asset-Backed Certificates Trust 2005-12 -- Cl. M-8, Downgraded to Baa3 from Baa2 -- Cl. B, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWABS Asset-Backed Certificates Trust 2005-13 -- Cl. MV-3, Downgraded to A2 from Aa3 -- Cl. MV-4, Downgraded to Baa1 from A1 -- Cl. MV-5, Downgraded to Ba1 from A2 -- Cl. MV-6, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. MV-7, Downgraded to Caa1 from Baa1 -- Cl. MV-8, Downgraded to Caa3 from Baa2 -- Cl. BV, Downgraded to Ca from Ba2 -- Cl. MF-5, Downgraded to A3 from A2 -- Cl. MF-6, Downgraded to Baa1 from A3 -- Cl. MF-7, Downgraded to Baa3 from Baa1 -- Cl. MF-8, Downgraded to Ba3 from Baa2 -- Cl. BF, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWABS Asset-Backed Certificates Trust 2005-14 -- Cl. M-6, Downgraded to Baa1 from A3 -- Cl. M-7, Downgraded to Ba1 from Baa1 -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B, Downgraded to Caa1 from Baa3 Issuer: CWABS Asset-Backed Certificates Trust 2005-15 -- Cl. M-8, Downgraded to Ba1 from Baa2 -- Cl. B, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWABS Asset-Backed Certificates Trust 2005-16 -- Cl. MV-4, Downgraded to A3 from A1 -- Cl. MV-5, Downgraded to Baa2 from A2 -- Cl. MV-6, Downgraded to Ba3 from A3 -- Cl. MV-7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. MV-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. BV, Downgraded to Caa2 from Ba1 Issuer: CWABS Asset-Backed Certificates Trust 2005-17 -- Cl. MV-3, Downgraded to A1 from Aa3 -- Cl. MV-4, Downgraded to Baa1 from A1 -- Cl. MV-5, Downgraded to Baa3 from A2 -- Cl. MV-6, Downgraded to B1 from A3 -- Cl. MV-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. MV-8, Downgraded to Caa1 from Baa2 -- Cl. BV, Downgraded to Caa3 from Ba1 -- Cl. BF, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWABS Asset-Backed Certificates Trust 2005-8 -- Cl. M-6, Downgraded to Baa1 from A3 -- Cl. M-7, Downgraded to Ba1 from Baa1 -- Cl. M-8, Downgraded to B2 from Baa2 -- Cl. B, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWABS Asset-Backed Certificates Trust 2005-AB3 -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to A2 from Aa3 -- Cl. M-4, Downgraded to Baa2 from A1 -- Cl. M-5, Downgraded to Ba2 from A2 -- Cl. M-6, Downgraded to B3 from A3 -- Cl. M-7, Downgraded to Caa1 from Baa1 -- Cl. M-8, Downgraded to Caa2 from Baa2 Issuer: CWABS Asset-Backed Certificates Trust 2005-AB4 -- Cl. 2-A-4, Downgraded to Aa1 from Aaa -- Cl. M-1, Downgraded to A2 from Aa1 -- Cl. M-2, Downgraded to Baa3 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3 -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from A2 -- Cl. M-6, Downgraded to Caa3 from A3 -- Cl. M-7, Downgraded to Ca from Baa3 -- Cl. M-8, Downgraded to C from Ba2 -- Cl. B, Downgraded to C from B2 Issuer: CWABS Asset-Backed Certificates Trust 2005-AB5 -- Cl. 1-A-1M, Downgraded to Aa3 from Aaa -- Cl. 2-A-3, Downgraded to Aa1 from Aaa -- Cl. 2-A-3M, Downgraded to Aa3 from Aaa -- Cl. M-1, Downgraded to Baa1 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2 -- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from A2 -- Cl. M-6, Downgraded to Caa2 from A3 -- Cl. M-7, Downgraded to Caa3 from Baa3 -- Cl. M-8, Downgraded to C from Ba2 -- Cl. B, Downgraded to C from B3 Issuer: CWABS Asset-Backed Certificates Trust 2005-BC4 -- Cl. M-9, Downgraded to Ba2 from Baa3 -- Cl. M-10, Downgraded to Ba3 from Ba1 -- Cl. B, Downgraded to Caa1 from Ba2 Issuer: CWABS Asset-Backed Certificates Trust 2005-BC5 -- Cl. M-7, Downgraded to Baa3 from Baa1 -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B, Downgraded to Caa1 from Baa3 Issuer: CWABS Asset-Backed Certificates Trust 2006-1 -- Cl. MV-4, Downgraded to A3 from A1 -- Cl. MV-5, Downgraded to Ba3 from A2 -- Cl. MV-8, Downgraded to Caa2 from Ba2 -- Cl. MV-6, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. MV-7, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. BV, Downgraded to Caa3 from B3 -- Cl. MF-7, Downgraded to Baa2 from Baa1 -- Cl. MF-8, Downgraded to Ba2 from Baa2 -- Cl. BF, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CWABS Asset-Backed Certificates Trust 2006-10 -- Cl. MV-2, Downgraded to A3 from Aa2 -- Cl. MV-3, Downgraded to Ba2 from Aa3 -- Cl. MV-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade CYTOCORE INC: Completes $5 Million Sale of Common Stocks -------------------------------------------------------- CytoCore Inc. completed the sale of approximately 5 million shares of newly issued common stock at the price of $2 per share to certain institutional and accredited investors. In addition, approximately 2.5 million 3 year warrants exercisable at a fixed price of $2 per share will be issued. One warrant accompanied every two shares purchased. The proceeds will be used to fund equipment purchases and working capital. Bathgate Capital Partners LLC acted as the placement for 3.115 million shares of the financing. "With this fund raising, including approximately $4 million which was received from existing investors and the Board, under similar terms since December 2007, we believe we have the resources required to fund our expansion and capitalize on our growth opportunities," Robert McCullough, Jr., chief executive officer, said. "We have received our first European orders for the SoftPAP cervical cell collector and received FDA clearance to market the SoftPAP in the United States," Mr. McCullough added. "With the funds raised through this offering, management can focus on executing our growth strategy." About Cytocore Inc. Headquartered in Chicago, Illinois, CytoCore Inc. (OTC BB: CYCR) -- http://www.cytocoreinc.com/-- is a publicly traded biotechnology company that is developing a proteomic-based method of screening and diagnosis for endometrial and cervical cancer. The company's major product is called the InPath(TM) System and is comprised of four distinct components: the e Collector(TM), protein-based biochemical cocktails and Slide Based Tests, the AIPS(TM) microscope platform, and a drug delivery system for treating cervical lesions. Going Concern Doubt As reported in the Troubled Company Reporter on Aug. 23, 2007, Altschuler, Melvoin and Glasser LLP, in Chicago, expressed substantial doubt about Cytocore Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements as of the year ended Dec. 31, 2006. The auditing firm pointed to the company's recurring substantial net losses from operations and net capital deficiency. CHINA AOXING: Affiliate to Purchase LRT for $10.8 Million Cash ------------------------------------------------------------- China Aoxing Pharmaceutical Company Inc.'s subsidiary, Hebei Aoxing Pharmaceutical Group Company, signed a definitive acquisition agreement to acquire Shijiazhuang Lerentang Pharmaceutical Company Ltd. The purchase price will be paid 80 million RMB or approximately $10.8 million in cash and 8 million shares of the company's common stock. The definitive acquisition agreement contemplates that CAXG will acquire 100% ownership of LRT. Completion of the transaction is expected to occur sometime in May 2008. Completion, however, is subject to a number of conditions, including the receipt of approval from the Chinese government. "We are excited to gain significant progress in the LRT transaction and believe this acquisition will further support our position as a leading, diversified pain management products company," Zhenjiang Yue, chairman and CEO of China Aoxing, commented. "With LRT's integration, we will execute a key part of our business strategy by acquiring an established brand, profitable business, and synergistic product portfolio with significant commercialization value," Mr. Yue added. "LRT has a number of high value pain management products, including its flagship product, Zhong Tong An Capsules, that have not reached their full market potential." "We will move quickly to the integration phase of this transaction, ramp up and optimize production of LRT's most promising products well as rejuvenate its existing sales and marketing organization." Mr. Yue continued. "We believe this acquisition will be synergistic, as it will allow China Aoxing to leverage its existing marketing power and operating resources for new product launches expected out of our pipeline over the next 12 to 18 months," Mr. Yue concluded. "We look forward to the many benefits associated with this acquisition and believe it will provide us with a strong platform for sales and profitability growth in the future." About Shijiazhuang