T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, April 23, 2008, Vol. 12, No. 96 Headlines 31 PLUS: Case Summary & 29 Largest Unsecured Creditors 63 DINER: Sells Restaurant Property to Pay $1.23 Million Debt 550 INVESTMENTS: Case Summary & 2 Largest Unsecured Creditors 1203 LINCOLN: Case Summary & 11 Largest Unsecured Creditors AAMES MORTGAGE: Three Classes Get Moody's Rating Cuts to Low-Bs ABFC CERTIFICATES: High Delinquencies Cue Moody's 43 Rating Cuts ACCREDITED MORTGAGE: Moody's Downgrades Ratings on 34 Tranches ACE HOLDING: Case Summary & 10 Largest Unsecured Creditors AEGIS TRUSTS: Moody's Cuts Ratings on 27 Tranches on Delinquencies AINSWORTH LUMBER: Posts C$216.5 Mil. Net Loss in Fiscal 2007 AIRTRAN HOLDINGS: Loss Expectations Cue S&P's Negative Outlook AMERICAN HOME: Enters Stipulation with Calyon New York AMERICAN HOME: BofA Wants Settlement Objections Overruled AMERICAN HOME: Panel Endorses BofA to Sell $584MM Mortgage Loans AMERICAN HOME: Objects to Wells Fargo's Bid to Recoup Note Payment AMERICAN HOME: Court Approves Agreement with D.C. ISB Dept. ARLETHA WASHINGTON: Case Summary & 11 Largest Unsecured Creditors BARBIE POWELL: Case Summary & 18 Largest Unsecured Creditors BASIC ENERGY: Board Approves $3 Billion Merger Deal with Grey Wolf BASIC ENERGY: Moody's Reviews 'Ba3' Ratings on Merger News BEARD COMPANY: Cole & Reed Raises Substantial Doubt BIOVAIL CORP: Bill Wells Assumes Chief Executive Officer Role BOWNE & CO: Improved Cash Flow Cues Moody's Rating Upgrade to Ba2 BRASCAN ADJUSTABLE: Meeting Follows Completed Strategic Review BRIDGEWATER FALLS: DCM Warehouse Sells Stake in Various Entities CAROLYN WILLIAMS: Case Summary & 13 Largest Unsecured Creditors CASH TECHNOLOGIES: Feb. 29 Balance Sheet Upside-Down by $5,261,765 CENTRO PROPERTIES: Hopeful to Sell Funds in Book Value CFM U.S.: Wants to Sell Asset to GHP Group for $3.5 Million CHAPARRAL ENERGY: Posts $4.8 Million Net Loss in 2007 CITIGROUP MORTGAGE: Moody's Downgrades Ratings on 220 Tranches CLV HOLDING: DCM Warehouse Sells Stake in Various Entities COACH AMERICA: Two Acquisitions Cue Moody's to Keep 'B3' Ratings CORINTHIAN LLC: Voluntary Chapter 11 Case Summary CSFB HOME: Moody's Cuts 159 Tranches' Ratings on Delinquencies DANA CORP: Inks Separation Agreement with CEO & COO Michael Burns DANA CORP: Ogre Wants Court to Overrule $1.3 Mil. Claim Objection DFG/OLYMPUS: Case Summary & Six Largest Unsecured Creditors DIOMED HOLDINGS: Trustee Appoints 5-Member Creditors' Committee DIOMED HOLDINGS: Wants to Hire McGuireWoods as Bankruptcy Counsel DIVERSIFIED LAYUP: Case Summary & 14 Largest Unsecured Creditors DIVERSIFIED ASSET: S&P Lowers Ratings on Two Note Classes EIGER TECH: Has C$1,864,000 Shareholders' Deficit at Sept. 30 ELECTRO-MOTOR INC: Case Summary & 18 Largest Unsecured Creditors FANNIE MAE: S&P Affirms 'B' Ratings on Five Certificate Classes FIREKEEPERS DEVELOPMENT: Moody's Rates $325 Mil. Notes B3 FIRST FRANKLIN: Moody's Cuts Ratings on 286 Tranches From 30 Deals FIVE STAR POOLS: Case Summary & 14 Largest Unsecured Creditors FRONTIER AIRLINES: Wants to Hire Davis Polk as Bankruptcy Counsel FRONTIER AIRLINES: Wants to Hire Togut Segal as Conflicts Counsel GATEHOUSE MEDIA: Tight Liquidity Cues Moody's Rating Cut to 'B2' GET-A-WAY: Case Summary & 20 Largest Unsecured Creditors GRANT PRIDECO: Completed Varco Deal Cues S&P to Withdraw Rating GE-WMC CERTIFICATES: 27 Tranches Get Moody's Rating Downgrades HAMILTON BEACH: S&P Withdraws 'B' Loan Rating at Company's Request HOMELAND SECURITY: Dec. 31 Balance Sheet Upside-Down by $7.6 MM HOWARD AWAND: Case Summary & 17 Largest Unsecured Creditors INTERSTATE BAKERIES: Property Sale Approval Hearing Set Today IKONA GEAR: Feb. 29 Balance Sheet Upside-Down by $434,887 INTEREP NATIONAL: U.S. Trustee Balks at Professional Employment I/OMAGIC CORP: Swenson Advisors Raises Substantial Doubt JETBLUE AIRWAYS: Loss Expectations Cue S&P to Cut Rating to B- JIM RODNEY: Case Summary & Ten Largest Unsecured Creditors JP MORGAN: Moody's Cuts Ratings on 234 Tranches From 27 Deals PEOPLE'S CHOICE: Disclosure Statement Must Have Board Approval PEOPLE'S CHOICE: Committee Wants To Be Sole Ch. 11 Plan Proponent PERFORMANCE TRANS: Court Approves Changes to First Lien Agreement PERFORMANCE TRANS: Court Sets May 16 as General Claims Bar Date PERFORMANCE TRANS: Court Extends Plan-Filing Deadline to June 30 PERFORMANCE TRANS: Court Extends Lease Decision Period to June 17 PHARMACYCLICS INC: Low Bid Price Cues Nasdaq's Deficiency Letter PLAINFIELD COMMONS: DCM Warehouse Sells Stake in Various Entities PRIMEDIA INC: Wants to Redeem $2.5 Million of 8% Senior Notes QUIGLEY COMPANY: Court Sets June 10 Plan Voting Deadline RAMP: Fitch Downgrades Ratings on $560.2 Million Certificates ROBERT JACOBS: Case Summary & 5 Largest Unsecured Creditors SABINE PASS: Moody's Reviews 'Ba3' Rating for Possible Downgrade SABR TRUSTS: Moody's Cuts Ratings on 208 Tranches From 27 Deals SAVE OUR SPRINGS: Remains Confident That Plan Will Be Confirmed SBARRO INC: Earns $5.1 Million in Fourth Quarter Ended Dec. 30 SEARS HOLDINGS: $1BB LOC Termination Won't Affect S&P's 'BB' Rtng. SECURUS TECH: Dec. 31 Balance Sheet Upside-Down by $88.9 Million SHARPER IMAGE: American Express Wants to End Rewards Promo SHARPER IMAGE: Edwin Mcauley Seeks $279,683 for Goods & Services SHARPER IMAGE: Seeks to Employ RCR Real Estate Advisors SHARPER IMAGE: Court Approves Womble Carlyle Employment as Counsel SIRVA INC: Committee to Challenge DIP Financing Order SIRVA INC: OOIDA Insists Members Are Class 4 Creditors SIRVA INC: Court Allows Triple Net's $2 Million Claim SIRVA INC: Subsidiary Moves Office to Cleveland, Ohio SIXTEEN WEST: DCM Warehouse Sells Stake in Various Entities SKILLSOFT PLC: S&P Holds 'B+' Rating, Revises Outlook to Pos. SOUTHWEST PRECISION: Case Summary & 19 Largest Unsecured Creditors SPECIALTY UNDERWRITING: Moody's Downgrades Ratings on 90 Tranches THERMADYNE HOLDINGS: Moody's Lifts CF Rating to B3 from Caa1 THOMAS ROWAN: Case Summary & 12 Largest Unsecured Creditors THORNBURG MORTGAGE: MatlinPatterson Exercises Warrants, Ups Stake TIMOTHY MCCUE: Case Summary & Nine Largest Unsecured Creditors TORCH ENERGY: Gets NYSE Letter on Failure to Timely File 2007 10-K TRIBUNE CO: Revenue Declines Prompt Moody's 'B3' Rating Reviews TUCSON COPPER: Hires Eric Slocum Sparks as Bankruptcy Counsel UTAH 7000: Wants to Obtain $50 Million DIP Facility From Pivotal VALHI INC: Fitch Cuts Issuer Default Rating to B+ from BB- VICTOR JAMES: Case Summary & Eight Largest Unsecured Creditors WASHINGTON MUTUAL: Discontinues Lending, Closes Centers & Offices WESTERN REFINING: Weak Quarter Results Cue Moody's Rating Reviews YRC WORLDWIDE: Renews Asset-backed Securitization Facility YRC WORLDWIDE: Agrees to Amendments on Aug. 17 Credit Agreement YRC WORLDWIDE: Fitch Holds 'BB+' ID Rating on Facility Amendment YRC WORLDWIDE: Moody's Cuts CF Rating to Ba2 with Negative Outlook 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 Notes Key Trends that Could Affect Electric Utilities * 11% of Non-Financial Issuers Likely to Breach Pact, Moody's Says * Moody's Says Commercial Real Estate Prices Rise 2.1% in February * S&P Lowers Ratings on 15 Tranches from Three Hybrid CDOs * S&P Lowers Ratings on Five Classes from US Four Prime Jumbo RMBS * S&P Says Few Health Care Cos. Are Now Affected by Economic Drop * S&P Says Crude Oil Prices Offset the Neg. Impact of Natural Gas * Fitch Says US CMBS Delinquencies Rise by Three Bps on March 2008 * S&P Puts Ratings on Tobacco Settlement Under Negative Watch * Matthew Bernstein and John Giust Join Mintz Levin in San Diego * Kyle C. Bisceglie and Howard J. Smith III Join Olshan Grundman * Upcoming Meetings, Conferences and Seminars ********* 31 PLUS: Case Summary & 29 Largest Unsecured Creditors ------------------------------------------------------ Lead Debtor: 31 Plus, LLC 9104 US 31 West Olive, MI 49460 Bankruptcy Case No.: 08-03444 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- Dave's Party Store & Gas, Inc. 08-03445 Chapter 11 Petition Date: April 19, 2008 Court: Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtors' Counsel: Kevin B. Schumacher, Esq. Glassen Rhead McLean Campbell & Schumacher 533 South Grand Ave. Lansing, MI 48933 Tel: (517) 482-3800 Email: schumacher@glassenrhead.com http://www.schumacher@glassenrhead.com/ 31 Plus, LLC's Financial Condition: Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million A. 31 Plus, LLC's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Port Sheldon Township $35,905 414 Washington, Rm. 207 P.O. Box 705 Grand Haven, MI 49417-0705 Dave's Party Store $659,532 9170 US 31 West Olive, MI 49460 Jonassen, David $239,397 14816 Stanton West Olive, MI 49460 Port Sheldon Township $13,586 Jonassen, Jesse $5,740 Port Sheldon Township $5,962 Farmer's Market $8,500 Tulip City Asphalt Paving $870 Semco Energy $168 Consumers Energy $28 B. Dave's Party Store & Gas, Inc's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Merle Boes $62,292 11372 E. Lakewood Blvd. P.O. 1887 Holland, MI 49424 Jonassen, David $40,776 14816 Stanton Street West Olive, MI 49460 Grafton, Edward, Esq. $9,825 SYSCO $8,420 HT Hackney $7,500 Steensma, Roger $6,640 Delong & Brewer $2,054 INT Payment SYS IPS Prod. $2,048 First Penn Pacific Life $1,499 Insurance Western Union Transactions $1,397 Frankenmuth Insurance $1,177 CBS Outdoor $1,108 Shoreline Accounting Service $605 Variety Foods, Inc. $552 Priority Health $415 Midstate Security Co. $280 United Electric Supply $225 Auto Owners Insurance $215 Deluxe Business Checks $150 63 DINER: Sells Restaurant Property to Pay $1.23 Million Debt ------------------------------------------------------------- The 63 Diner's property located at 5801 N. Missouri 763 is up for sale today, April 23, 2008, to pay off $1.23 million in debt of its owner 63 Diner North Columbia LLC, Juana Summers and Erick Ward of Columbia Missourian report. An auction of the property was a security clause of a trust created between the 63 Diner owners and Premier Bank. The report, citing a document filed with the Boone County Recorder's office, stated that 63 Diner North Columbia has defaulted on a loan covenant. 63 Diner North Columbia is owned by Pamela Acton, Andrew Acton, Imo P. Lane, Janet Acton and Ed Twenter. The Columbia Missourian noted that under the Real Estate Deed of Trust, when a company defaults on a loan, property is auctioned off, allowing the bank that issued the loan a chance to recover some of those losses. The report adds that the trustee sale could be considered a foreclosure, according to John Browning, lawyer at the law firm Timothy T. Sigmund Trustee Mariea & Sigmund LLC. The report states that the diner is on regular operation. Co- owner Ms. Acton doesn't know if or when it will close, CM says. 63 Diner which opened in 1989, is a Columbia landmark and a favorite dining spot for home-style cooking. The diner offers big burgers and chicken livers, mashed potatoes and other side dishes. In August 2005, the diner was purchased by 63 Diner North Columbia LLC. 550 INVESTMENTS: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: 550 Investments LLC 18318 SE Abernethy Lane Milwaukie, OR 97267-6657 Bankruptcy Case No.: 08-31687 Chapter 11 Petition Date: April 14, 2008 Court: U.S. Bankruptcy Court for the District of Oregon Judge: The Hon. Randall L. Dunn Debtor's Counsel: Susan S. Ford, Esq. Sussman Shank LLP 1000 SW Broadway #1400 Portland, OR 97205 Tel: (503) 227-1111 Fax: (503) 248-0130 E-mail: susanf@sussmanshank.com http://www.sussmanshank.com/ U.S. Trustee: The Office of the United States Trustee 620 SW Main St #213 Portland, OR 97205 Tel: (503) 326-4000 Estimated Assets: $1,000,001 to to $10 million Estimated Debts: $1,000,001 to to $10 million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SWCA Service vendor $855 P O Box 92170 Elk Grove Village, IL 60009 Attn: Stacey Reed 434 NW 6th, Suite 304 Portland, OR 97209 Tel: (503) 224-0333 WRG Service vendor $15,555 Attn: Brett Strohlein 5415 SW Westgate Drive Suite 100 Portland, OR 97221 Tel: (503) 419-2500 1203 LINCOLN: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: 1203 Lincoln Avenue Partners, L.P. 1452 Broadway San Francisco, CA 94109 Bankruptcy Case No.: 08-30657 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: April 17, 2008 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Martha J. Simon, Esq. 155 Montgomery St. Ste. 1004 San Francisco, CA 94104 Tel: (415) 434-1888 Email: mjsimon@mjsimonlaw.com http://www.mjsimonlaw.com/ Total Assets: $7,000,193 Total Debts: $8,026,451 Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Appian Group Investors DE, LLC 2nd deed of trust; $3,328,018 900 Larkspur Landing Circle, value of security: Ste. 100 $7,000,000; Larkspur CA 94939 Tel: (415) 464-9469 HTT Engineering Engineering fees $152,564 8393 Capwell Drive, Ste. 110 Oakland CA 94621 Tel: (510) 588-3060 Lily Chiang 4th deed of trust; $500,000 Attn: Scott McNutt, Esq. value of security: 188 The Embarcadero, Ste. 800 $7,000,000 San Francisco CA 94105 Tel: (415) 995-8475 George Cresson 3rd deed of trust; $150,000 value of security: $7,000,000 Reuben & Junius, LLP Legal fees $5,089 U.S. Department of Treasury Estimated taxes $3,000 State of California FTB Estimated taxes $3,000 Josehart Construction Mgmt. Management fees $1,576 Associated Trucking, Inc. Demolition and $1,483 clean-up McLennon Law Corp. Legal fees $668 TWM Architects & Planners Architectural fees $232 AAMES MORTGAGE: Three Classes Get Moody's Rating Cuts to Low-Bs --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 6 tranches from 2 subprime RMBS transactions issued by Aames Mortgage Investment Trust. Two 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 are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Aames Mortgage Investment Trust 2005-4 -- Cl. M6, Downgraded to Baa1 from A3 -- Cl. M7, Downgraded to Ba2 from Baa1 -- Cl. M8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: Aames Mortgage Investment Trust 2006-1 -- Cl. M-4, Downgraded to Baa2 from A2 -- Cl. M-5, Downgraded to Ba3 from A3 ABFC CERTIFICATES: High Delinquencies Cue Moody's 43 Rating Cuts ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 43 tranches from 5 subprime RMBS transactions issued by ABFC. Thirteen 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 are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: ABFC Asset-Backed Certificates, Series 2005-WMC1 -- Cl. M-6, Downgraded to Baa2 from A3 -- Cl. M-7, Downgraded to B2 from Baa1 -- Cl. M-8, Downgraded to Caa1 from Baa2 -- Cl. M-9, Downgraded to Caa2 from Baa3 Issuer: ABFC Asset-Backed Certificates, Series 2006-HE1 -- Cl. M-1, Downgraded to Baa1 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa3 -- Cl. M-7, Downgraded to Caa2 from Ba2 -- Cl. M-8, Downgraded to Caa3 from Ba3 -- Cl. M-9, Downgraded to Caa3 from B1 -- Cl. B, Downgraded to Ca from B3 Issuer: Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT1 -- Cl. M-2, Downgraded to Baa2 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Ba1 -- Cl. M-8, Downgraded to Caa2 from Ba2 -- Cl. M-9, Downgraded to Caa3 from B3 -- Cl. B, Downgraded to Ca from B3 Issuer: Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT2 -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Ba1 -- Cl. M-7, Downgraded to Caa2 from Ba3 -- Cl. M-8, Downgraded to Caa3 from B1 -- Cl. M-9, Downgraded to Caa3 from B3 -- Cl. B, Downgraded to Ca from Caa3 Issuer: Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT3 -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa3 -- Cl. M-7, Downgraded to Caa2 from Ba3 -- Cl. M-8, Downgraded to Caa3 from B2 -- Cl. M-9, Downgraded to Ca from B3 -- Cl. B, Downgraded to Ca from Caa2 ACCREDITED MORTGAGE: Moody's Downgrades Ratings on 34 Tranches -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 34 tranches from 5 subprime RMBS transactions issued by Accredited. Ten 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 are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Accredited Mortgage Loan Trust 2005-3, Asset-Backed Notes, Series 2005-3 -- 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. M-9, Downgraded to Caa1 from Baa3 Issuer: Accredited Mortgage Loan Trust 2005-4 -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to A3 from Aa3 -- Cl. M-4, Downgraded to Baa2 from A1 -- Cl. M-5, Downgraded to B1 from A2 -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Baa1 -- Cl. M-8, Downgraded to Caa2 from Baa2 -- Cl. M-9, Downgraded to Caa3 from Ba2 Issuer: Accredited Mortgage Loan Trust 2006-1 -- Cl. M-4, Downgraded to Baa2 from A1 -- Cl. M-5, Downgraded to B1 from A2 -- Cl. M-6, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa2 from Ba1 -- Cl. M-9, Downgraded to Caa3 from B2 Issuer: Accredited Mortgage Loan Trust 2006-2 -- Cl. M-2, Downgraded to A1 from Aa2 -- Cl. M-3, Downgraded to Baa1 from Aa3 -- Cl. M-4, Downgraded to Ba1 from A1 -- Cl. M-5, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Ba1 -- Cl. M-9, Downgraded to Caa2 from B3 Issuer: Accredited Mortgage Loan Trust 2007-1 -- Cl. M-2, Downgraded to Aa3 from Aa2 -- Cl. M-3, Downgraded to A2 from Aa3 -- Cl. M-4, Downgraded to Baa1 from A1 -- Cl. M-5, Downgraded to Ba2 from A2 -- Cl. M-6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Ba3 ACE HOLDING: Case Summary & 10 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Ace Holding LLC 960 Sterling Ridge Drive Rensselaer, NY 12144 Bankruptcy Case No.: 08-11084 Chapter 11 Petition Date: April 11, 2008 Court: U.S. Bankruptcy Court Northern District of New York (Albany) Judge: Hon. Robert E. Littlefield Jr. Debtor's Counsel: Michael D. Assaf, Esq. Assaf & Mackenzie 427 River Street Troy, NY 12180 Tel: (518) 266-9060 Fax: (518) 266-9064 E-mail: massaf@amacklaw.com http://www.amacklaw.com/ U.S. Trustee: Diana G. Adams Office of the United States Trustee, Region 2 74 Chapel Street Suite 200 Albany, NY 12207 Estimated Assets: $1,000,001 to $100 million Estimated Debts: $$100,001 to $1 million Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ HUD Government Contract $45,000 26 Federal Plaza Room 3541 New York, NY 10278-0068 SONYMA Mortgage insurance $25,000 641 Lexington Ave. reimbursement 4th Floor New York, NY 10022 David L. Ganje Temporary receiver $25,000 Two Tower Place fees and fees of Albany, NY 12203 attorney for temporary receiver Community Preservation Co. Loan servicing $10,000 PO Box 9096 charges Church Street Station New York, NY 140256 Buckley Gent Trade debt- $5,000 MacDonald et al. accounting services 1218 Central Avenue Albany NY 12205 Urisa Scott Claim for rent $1,500 279 Sheridan Ave. deposit Apt 2 Albany, NY 12210 Albany Water Board Trade debt- $1,000 P.O. Box 1966 unpaid water, current usage Tenant Unit #164 Security Deposit $900 164 S. Pearl Street Albany, NY 12202 Tenant Unit #162 Security Deposit $850 162 S. Pearl Street Albany, NY 12202 Internal Revenue Service 2004-2006 late $1 PO Box 21126 filing penalty Philadelphia, PA 19114 AEGIS TRUSTS: Moody's Cuts Ratings on 27 Tranches on Delinquencies ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 27 tranches from 3 subprime RMBS transactions issued by Aegis. Five 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 are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Aegis Asset Backed Securities Trust 2005-4 -- Cl. M3, Downgraded to A1 from Aa3 -- Cl. M4, Downgraded to Baa1 from A1 -- Cl. M5, Downgraded to Ba2 from A2 -- Cl. M6, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B1, Downgraded to Caa1 from Ba1 -- Cl. B2, Downgraded to Caa2 from Ba3 -- Cl. B3, Downgraded to Caa3 from B2 -- Cl. B4, Downgraded to Ca from Caa3 -- Cl. B5, Downgraded to C from Ca Issuer: Aegis Asset Backed Securities Trust 2005-5 -- Cl. M3, Downgraded to Baa1 from A3 -- Cl. M4, Downgraded to Ba1 from Baa2 -- Cl. M5, Downgraded to B2 from Ba1 -- Cl. M6, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. B1, Downgraded to Caa1 from B3 -- Cl. B2, Downgraded to Ca from Caa2 -- Cl. B3, Downgraded to Ca from Caa3 -- Cl. B4, Downgraded to C from Ca Issuer: Aegis Asset Backed Securities Trust 2006-1 -- Cl. M1, Downgraded to A3 from Aa1 -- Cl. M2, Downgraded to B1 from Aa2 -- Cl. M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to Caa1 from Baa2 -- Cl. M7, Downgraded to Caa2 from Ba2 -- Cl. M8, Downgraded to Caa3 from B2 -- Cl. M9, Downgraded to Ca from B3 -- Cl. M10, Downgraded to C from Caa2 AINSWORTH LUMBER: Posts C$216.5 Mil. Net Loss in Fiscal 2007 ------------------------------------------------------------ Ainsworth Lumber Co. Ltd.'s management said that significant appreciation of the Canadian dollar against the U.S. dollar over the past year and the decline in demand for oriented strand board in the U.S. residential housing market have led to reduced operating margins. Under the company's existing long-term and current indebtedness, in 2008 the company must provide for annual interest payments of C$70 million to C$75 million and principal payments of C$10.1 million, and may be required to prepay interest of approximately C$3.1 million. The company is exploring strategic alternatives to improve capital structure and enhance liquidity, including debt refinancing, non- core asset sales and cost reduction initiatives. In the event that a refinancing is not successful, the existing indenture agreement allows for additional borrowing of up to C$50 million, subject to certain conditions. Financials For the year ended Dec. 31, 2007, Ainsworth Lumber Co. Ltd. posted a C$216,455,000 net loss on C$544,231,000 of sales compared with a C$108,031,000 net loss on C$827,118,000 of sales in 2006. At Dec. 31, 2007, the company's balance sheet showed C$1,100,619,000 in total assets, C$1,087,880,000 in total liabilities, and C$12,739,000 in total stockholders' equity. The company's accumulated deficit at Dec. 31, 2007, stood at C$105,786,000. Subsequent Events 1. Senior Notes Exchange Offer The company announced on Feb. 15, 2008, the commencement of an exchange offer for its senior notes and a consent solicitation from holders of senior notes to certain amendments to the respective indentures governing those notes. The company announced on March 15, 2008, that the exchange offer and consent solicitation had expired without any notes being exchanged. 2. Sale of Facility The company completed on March 26, 2008, the sale of an unused finger-joined facility for net proceeds of C$3.4 million. The sale was made as part of the company's strategy to enhance liquidity by monetizing non-core assets. 3. Interest on Equipment Financing Facility Under the terms of the US$44.4 million equipment financing facility, if liquidity falls below US$75 million, the lender may require prepayment of interest for a period of 12 months. At Dec. 31, 2007, liquidity for the purpose of this financing facility was C$73.1 million (US$73.8 million). On March 26, 2008, the company received a prepayment notification from the lender and will be required to pay interest of US$2.5 million on or before April 1, 2008. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2af2 Based in Vancouver, British Columbia, Canada, Ainsworth Lumber Co. Ltd. (TSE: ANS) -- http://www.ainsworth.ca/-- manufactures structural-engineered wood products, including oriented strand board, and specialty overlaid plywood. The company owns and operates six OSB manufacturing facilities, three in Canada and three in northern Minnesota. It has a 50% ownership interest in an OSB facility, located in High Level, Alberta. Ainsworth is also a manufacturer of specialty overlaid concrete-form plywood products in North America. Ainsworth's business is focused on the structural wood panels sector. It offers value-added products, such as OSB webstock, rimboard, radiant barrier OSB panels, jumbo OSB panels, export-standard OSB and specialty overlaid plywood. AIRTRAN HOLDINGS: Loss Expectations Cue S&P's Negative Outlook -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on AirTran Holdings Inc., parent of AirTran Airways Inc., to negative from stable. All ratings on both entities, including the 'B-' corporate credit rating on AirTran Holdings, were affirmed. "The outlook revision is based on our expectation that the company will incur a loss in 2008, weakening the airline's already highly leveraged financial profile," said Standard & Poor's credit analyst Betsy Snyder. "We expect the loss could approach $50 million if fuel prices remain at high levels and demand weakens in the second half of the year due to the slowing economy, consistent with trends facing the industry," the analyst continued. Although AirTran continues to benefit from nonfuel operating costs that are among the lowest in the industry, S&P expect negative industry trends to hurt the company's credit measures. The ratings on Orlando, Florida-based AirTran reflect a modest competitive position within the U.S. airline industry and a highly leveraged financial profile. Ratings also incorporate low operating costs and fairly good liquidity for its size. AirTran operates a fleet of 137 aircraft to 55 destinations, primarily out of its main hub at Atlanta. However, the company is significantly smaller than the seven largest U.S. airlines, with substantial competition on most of its major routes. The company operates primarily on the East Coast against Delta Air Lines Inc., the leading airline at Atlanta, and low-cost airlines Southwest Airlines Co., JetBlue Airways Corp., and US Airways Group Inc. While AirTran has been reducing its reliance on Atlanta (which currently accounts for about two-thirds of its network, compared with approximately 90% in 2001), it still has a much smaller presence there than Delta. S&P do not expect Delta's pending merger with Northwest to have a significantly negative effect on AirTran, and it might even present opportunities as the combined entity could rationalize its route structure. AirTran operates a relatively young aircraft fleet, with an average age of four years, which has aided its operating costs. Since 2004, AirTran has been augmenting its fleet of smaller Boeing 717s with larger Boeing 737s. The 737s have enabled the company to fly more long-haul routes, adding new markets and reducing its dependence on Atlanta. Although the airline's earnings have been constrained by high fuel prices, its operating costs benefit from low labor expenses and high productivity. AirTran's unit operating costs are among the lowest in the industry. S&P expect AirTran, like other U.S. airlines, to report a loss in 2008. However, the company's cash, cash proceeds form aircraft sales, and commitments to finance its aircraft deliveries should enable it to meet debt maturities and capital spending needs in 2008. S&P could lower ratings if higher-than-expected fuel prices or further economic weakness continue to erode the company's financial profile. S&P could revise the outlook back to stable if industry conditions begin to improve, and S&P see evidence of margin improvement. AMERICAN HOME: Enters Stipulation with Calyon New York ------------------------------------------------------ Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, American Home Investment Corp., its debtor-affiliates, and Calyon New York Branch, administrative agent under a repurchase agreement dated Nov. 21, 2006, ask the U.S. Bankruptcy Court for the District of of Delaware to approve their stipulation, which settles, without further litigation, Calyon's request to obtain certain advanced funds, and certain other disputes. Calyon New York Branch sought a declaratory judgment, injunctive relief and damages, including a demand for an accounting and a constructive trust, against the Debtors pursuant to the Debtors' refusal to turnover certain and records and transfer funds on account of the termination of their mortgage loans repurchase agreement. Pursuant to a Repurchase Agreement dated November 21, 2006, Calyon, as administrative agent, on behalf of various parties, was requested to purchase and did purchase, from time to time, certain mortgage loans from the Debtors. The Debtors agreed to repurchase the loans on applicable dates at set prices. Pursuant to the Repurchase Agreement, American Horne Mortgage Servicing, Inc., as servicer, was responsible for administering the underlying Mortgage Loans, including, without limitation, collecting monthly mortgage payments, monitoring past-due accounts, and reporting on defaulted loans. On August 1, 2007, Calyon sent the Debtors notices of default, which, among others, notified of the acceleration all amounts due, and the termination of the facility. The Repurchase Price for the Mortgage Loans $1,178,225,176, plus a "price differential", interest and costs, including attorney fees. Pursuant to the Stipulation: -- Calyon is provided with a cash recovery of $11,546,262; -- the Debtors agree to use reasonable efforts to trace and recover a total of $2,017,291 in unpaid funds, which will be paid to Calyon, if recovered; -- Calyon agrees that, in addition to the right to enforce the provisions of the Stipulation, Calyon's only rights and claims against the Debtors for the Unpaid Funds are general unsecured claims in connection with the Repurchase Agreement; -- Calyon waives its right to $2,729,164, which will be placed into an escrow account maintained by the Debtors and held pending further Court order or agreement of the parties that may assert an interest in the funds; -- Calyon and the Debtors agree to place $415,752 -- the disputed principal and interest payments -- in an escrow account, and retain all rights and claims to the Disputed P&I; and -- the Debtors agree to determine by June 2, 2008, whether any portion of certain remaining amounts aggregating $334,407 are due to Calyon. The Debtors agree to recover any portion of the Remaining Amounts, which are due to Calyon, if any. The aggregate amounts referenced in the Stipulation were calculated based on the identification of specific funds related to certain mortgage loans that never closed and were funded by Calyon under the Repurchase Agreement. While the Parties have not broken down the specific amounts and identified the related Mortgage Loans, they have shared the relevant data supporting the aggregate amounts referenced. The Parties also ask the Court to direct Deutsche Bank Trust Company Americas, JPMorgan Chase Bank, N.A., and Bank of New York to transfer appropriate funds to either the Debtors or Calyon as provided for by the Stipulation. The Debtors also intend to instruct North Fork Bank to transfer certain funds to Calyon. Calyon and BofA Also Stipulate Calyon and Bank of America, N.A., administrative agent for certain prepetition secured parties, agree to settle issues regarding BofA's request to intervene in the Adversary Proceeding, and BofA's objection to Calyon's request to obtain certain advanced funds subject to the security interests of the Prepetition Secured Parties. The Debtors have advised Calyon that they have no objection to the stipulation. The key terms of Calyon and BofA's agreement are: -- The request to intervene and objection to Calyon's request regarding the advanced funds will be withdrawn; -- BofA agrees not to object to the Debtors' and Calyon's Stipulation; -- BofA agrees not to seek or recover from Calyon, and waives any claim against Calyon, with respect to the funds that Deutsche Bank, JPMorgan, North Fork and BofNY will transfer to Calyon; -- If the Debtors and Calyon's Stipulation does not become effective, BofA's rights and claims against Calyon, if any, are reserved with respect to up to $315,000; and -- Nothing in Calyon and BofA's agreement will be deemed or construed as an admission or release by BofA of any rights, claims or defenses with respect to any claim or action asserted against BofA in connection with certain swept funds in BofNY's account. BofA Allowed to Intervene The Court has allowed BofA to intervene in the Adversary Proceeding solely to permit it to oppose to Calyon's request to obtain certain advanced funds subject to the security interests of the Prepetition Secured Parties. Judge Christopher Sontchi said the order is without prejudice to the rights of any party-in- interest to seek or oppose any further relief. The Debtors and Calyon previously informed the Court that they are not opposed to BofA's limited intervention. However, they asked the Court that BofA should not be allowed to intervene in any other aspect of the proceeding. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: BofA Wants Settlement Objections Overruled --------------------------------------------------------- Bank of America, N.A., administrative agent for prepetition secured parties in the bankruptcy case of American Home Mortgage Investment Corp. and its debtor-affiliates, disagrees with the objections of the Debtors, AH Mortgage Acquisition Co., Inc., WLR Recovery Fund III, L.P., and Kelly Beaudin Stapleton, United States Trustee for Region 3, to BofA's final stipulation with the Official Committee of Unsecured Creditors, which would resolve all remaining issues regarding the Debtors' limited use of cash collateral. Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, in Wilmington, Delaware, tells the U.S. Bankruptcy Court for the District of Delaware that the Final Stipulation (i) will benefit unsecured creditors, (ii) is similar to other Court- approved settlements, and (iii) fairly compromises the Remaining Issues. She says that the Debtors' objection mischaracterizes clear provisions of the Final Stipulation and virtually ignores the relevant provisions of the Cash Collateral Order, of which the Debtors were the proponents and beneficiaries. Ms. Silverstein says that the Debtors' Objection has nothing to do with the reasonableness of the settlement or the value it will afford to the unsecured creditors. She argues that the Debtors "merely wish to derail the settlement," so they can try to dissuade the Committee from supporting BofA's request to lift stay to sell certain mortgage loans, and enlist the Committee as an ally in their threatened litigation against the Prepetition Secured Parties. "The Debtors' blatant disregard for their binding commitments under the Cash Collateral Order and criticism of the Committee's judgment do not change the fact that the [Final] Stipulation is an appropriate compromise worthy of the Court's approval," Ms. Silverstein tells the Court. WLR's and the U.S. Trustee's objections should be overruled because the Final Stipulation provides that the Court can order different treatment for trust funds, Ms. Silverstein says. She notes that it is appropriate, and fairly common, for secured creditors to share collateral with unsecured creditors in the context of pre-plan settlements. Ms. Silverstein also points out that there is no basis for WLR's concern that funds potentially subject to its postpetition liens will be used to pay unsecured creditors before postpetition lenders have been repaid in full. She notes that the Final Stipulation does not address liens of creditors other than the PrePetition Secured Parties', and will not prejudice WLR's ability to assert liens if it so chooses. Committee Says Settlement Reasonable The Creditors Committee tells the Court the Final Stipulation is the product of negotiations over several months between two parties that actually have an economic stake in the matters being settled -- the Creditors Committee and BofA. In contrast, one of the objecting parties have no current economic stake in the matters being settled, David W. Carickhoff, Esq., at Blank Rome LLP, in Wilmington, Delaware, relates. The economic benefits of the Final Stipulation are readily apparent, when a comparison is made of the potential benefits to the bankruptcy estates with and without the settlement, Mr. Carickhoff says. He adds that the "inescapable conclusion" is that the settlement provides a substantial economic benefit to the estates. To the extent that an objector misinterprets a certain provision of the Final Stipulation, like WLR's and the U.S. Trustee's objections, the Creditors Committee proposes clarifying the language in the approval order to resolve those objections. Mr. Carickhoff assures the Court the Final Stipulation does not impair the Committee's ability to fulfill its fiduciary obligations by continuing to represent the interests of unsecured creditors. "The Committee is unwilling to gamble on a speculative recovery based on the Debtors' hypothetical account of how this portfolio [of Mortgage Loans] may perform over the next 30 years," Mr. Carickhoff says. He adds that the Creditors Committee believes the estates may be able to save as much as $750,000 if the Mortgage Loans are moved to a different platform. The Creditors Committee contends that upon Judge Christopher Sontchi's consideration all of the relevant factors, he will find that the Settlement is a fair and reasonable compromise of the Remaining Issues, and should be approved. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Panel Endorses BofA to Sell $584MM Mortgage Loans ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy case of American Home Mortgage Investment Corp. and its debtor- affiliates believes that Bank of America, N.A., and not the Debtors, should control the disposition process for the 3,400 residential mortgage loans at issue based on: -- the present market conditions, which have experienced a downturn since the Debtors' bankruptcy filing; -- the terms of the final stipulation between the Creditors Committee and BofA; and -- the status of the Debtors' Chapter 11 proceedings. As reported by the Troubled Company Reporter on March 12, 2008, BofA intends to sell the rights to the 3,400 mortgage loans with outstanding $584,000,000 that were pledged by the Debtors as collateral for their prepetition loan. The Creditors Committee further believes that BofA, which is one of the largest financial institutions in the United States of America, (i) has significant connections, access and experience in monetizing these types of assets, (ii) is the party best situated, and (iii) has the best incentive to maximize the recovery from the Mortgage Loans. In comparison, the Debtors are liquidating entities with no on- going servicing or origination platforms, and only a skeleton staff, the Committee tells Judge Christopher Sontchi. The Creditors Committee adds that it is "gravely concerned" about the expenses incurred on an ongoing basis by the Debtors to maintain, service and potentially to dispose of the Mortgage Loans. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Objects to Wells Fargo's Bid to Recoup Note Payment ------------------------------------------------------------------ American Home Mortgage Investment Corp. and its debtor-affiliates object to a request by Wells Fargo Bank, N.A. to seek relief from the automatic stay to recover a $462,049 M-4 Note Payment made in March 2007. Debtors Object The Debtors point out that Wells Fargo seeks relief from the automatic stay to recover payments made before the bankruptcy filing. Wells Fargo seeks relief from the automatic stay to assert equitable remedies of recoupment, constructive trust and equitable lien to recover a M-4 Note Payment made in March 2007, more than 4 months before the Petition Date. The Debtors add that Wells Fargo, prior to filing its lift stay request, twice violated the automatic stay through impermissible postpetition set-offs of $269,245 from distributions owed to the Debtors on wholly separate and distinct securities. James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that the set-off payments were returned only after the Debtors sent a demand letter. He asserts that with unclean hands, Wells Fargo comes to the U.S. Bankruptcy Court for the District of Delaware praying for equitable relief under theories of recovery that are legally and factually flawed. Wells Fargo seeks to impose a constructive trust on the Debtors' general operating account, in which the M-4 Payment of $462,049 was deposited, Mr. Patton relates. He notes that the Debtors have determined that the M-4 Payment was spent during the more than four-month period before the Petition Date. Thus, he says, Wells Fargo cannot even meet the threshold issues required to impose a constructive trust. Wells Fargo's request for recoupment under all trust securities is not only absurdly overbroad, but is based on the inappropriate use of confidential information that it is privy to in its capacity as securities administrator, Mr. Patton further argues. He says that the rights and obligations under various notes issued by American Home Mortgage Investment Corp. are separate single integrated transactions, regardless of whether the notes were issued under the same or separate indentures. He adds that any assertion of recoupment rights in connection with the M-4 Note is premature because the next anticipated distribution on the M-4 Note is not for 16 years, if ever. Hence, the Debtors say, Wells Fargo's claim for recoupment is without merit and must be denied. The Official Committee of Unsecured Creditors joins in the Debtors' arguments and assertions, and reserves all rights to be heard before the Court with regard to the request. The Creditors Committee asks the Court to deny the request because Wells Fargo (i) is not entitled to recoup a payment made on one securitization against a payment owed on another separate securitization, (ii) cannot meet the requirements for the imposition of a constructive trust as the funds were placed in the Debtors' general operating account, and commingled with other funds, and (iii) is not entitled to an equitable lien. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Court Approves Agreement with D.C. ISB Dept. ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a consent order among American Home Mortgage Corp., American Home Mortgage Acceptance, Inc., American Home Mortgage Servicing, Inc., and the Commissioner of the District of Columbia Department of Insurance, Securities and Banking, pursuant to Section 105(a) of the Bankruptcy Code and Rule 9019(a) of the Federal Rules of Bankruptcy Procedure. As reported by the Troubled Company Reporter on March 28, 2008, James L. Patton, Jr., Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, related that prior to the Petition Date, AHM Corp. and AHM Acceptance told the Commissioner that they had approved nine loans worth $3,000,000 related to residential real property located in the District of Columbia, which were scheduled to close between July 30 and August 17, 2007. Prior to the scheduled closings, however, the Debtors were not able to originate and fund loans, when their warehouse lenders began to exercise remedies. Consequently, the Commissioner issued a Temporary Order to Cease and Desist, and required AHM Corp. and AHM Acceptance to, among other things, cease their mortgage lending and brokering activities in the District of Columbia area, and to escrow any fees already collected from consumers with respect to pending mortgage loan applications. Until September 30, 2007, AHM Corp. and AHM Acceptance held 26 mortgage lender and broker licenses in the District of Columbia. Currently, the Debtors have one pending renewal application. Following negotiations, the parties agreed to resolve the Commissioner's claims against the Debtors, which includes allegations of violating the Mortgage Lender and Broker Act of 1996, without the need for the Debtors to admit or deny, or to continue litigation with respect to, the allegations. The Commissioner has also agreed to grant the Application through the Consent Order. The principal terms of the Consent Order are: -- AHM Corp., and AHM Acceptance will immediately cease engaging in the activities of a mortgage lender or broker in the District of Columbia; -- AHM Servicing will pursue completion of the Application before the Continuation Letters expire, and upon compliance with all licensing requirements, the renewal license of AHM Servicing will be issued conditioned on compliance with the Consent Order; -- Within 30 days from the end of each quarter, AHM Servicing will provide to the Commissioner: * copies of any monthly operating reports that have been filed with the Court; * a report on any outstanding consumer complaints involving AHM Servicing's business in the District of Columbia; and * a copy of any correspondence from any federal, state or local authority or law enforcement agency documenting the revocation or suspension of its license; -- The Commissioner will be deemed to have provided a notice of appearance in the bankruptcy cases, in compliance with Rule 2002 of the Federal Rules of Bankruptcy Procedure, and will be entitled to service of all notices and pleadings; and -- Any reporting requirements placed on AHM Servicing by the Consent Order will expire upon the final closing for the sale of the Debtors' mortgage loan servicing business. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ARLETHA WASHINGTON: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Arletha Malloy-Washington aka Nikki Washington aka Nikki Malloy aka Arletha Malloy 2503 Didcot Court Bowie, MD 20721 Bankruptcy Case No.: 08-14670 Chapter 11 Petition Date: April 3, 2008 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Judge: The Hon. Paul Mannes Debtor's Counsel: Marla L. Howell, Esq. DeCaro & Howell, P.C. 14406 Old Mill Road, Suite 201 Upper Marlboro, MD 20772 Tel: (301) 464-1400 E-mail: mlhowe1@juno.com U.S. Trustee: US Trustee - Greenbelt W. Clarkson McDow, Jr. 6305 Ivy Lane Suite 600 Greenbelt, MD 20770 Tel: (301) 344-6216 Total Assets: $1,285,077 Total Debts: $1,295,708 Debtor's 11 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Emc Mortgage Bank loan $80,061 800 State Highway 121 By Lewisville, TX 75067 Collateral: $399,500 Unsecured: $4,510 Bmw Financial Services -- $21,050 5515 Parkcenter Cir -- $12,891 Dublin, OH 43017 Wachovia Bank, NA Bank loan $2,155 PO Box 45038 Jackonsville, FL 32232 Anesthesia Associates, LTD Trade debt $1,183 Credit One Bank Bank loan $947 Inova Alexandria Hospital Trade debt $709 Verizon Maryland Inc - $478 Accounts Recovery Bureau Trade debt $283 District of Columbia Trade debt $205 Dept of Motor Vehicles United Collections Trade debt $135 Bureau American Med Systems Trade debt $35 BARBIE POWELL: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Barbie Jean Powell 6213 Glendale Road Glenn Dale, MD 20769 Bankruptcy Case No.: 08-14771 Chapter 11 Petition Date: April 4, 2008 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Judge: Thomas J. Catliota Debtor's Counsel: Donald L Bell The Law Office of Donald L. Bell, LLC 9701 Apollo Drive Suite 481 Upper Marlboro, MD 20774 Tel: (301) 773-8631 Fax: (301) 773-8634 E-mail: donbellaw@yahoo.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's 18 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Department of Commerce Unsecured 23,491.00 Herbert C Hoover Bldg #B Washington, DC 20230 Department of Commerce Truck: Hummer 22,911.00 Herbert C Hoover Bldg #B Drive Financial Truck: Benz 22,441.00 8585 N Stemmons Fwy Ste Dallas, TX 75247 Prince Georges County 10,348.44 7,809.99 984.74 Nelnet Loans Note Loan 8,474.00 Beatrice Davis -- 6,000.00 Brian Tansey, Esquire c/o -- 4,500.00 DCM Group 4,500.00 Idearc Media 1,575.00 Geico Indemnity Company 1,369.72 Bk of Amer -Newark Credit Card 998.00 Bk of Amer -Dover -- 998.00 Central Collection Unit 585.00 Meridian Financial M Collection Doctors 489.00 Emergen Washington Suburban 444.91 Sanitary Commission Washington Gas 426.61 Cbcs Collection Attorney 352.00 Pepco Allstate Homeowner -- 347.64 BASIC ENERGY: Board Approves $3 Billion Merger Deal with Grey Wolf ------------------------------------------------------------------ Basic Energy Services Inc. disclosed that its board of directors and Grey Wolf Inc.'s board approved a definitive agreement to combine the two businesses in a "merger of equals". Based upon closing prices for each company's common stock as of April 18, 2008, the estimated enterprise value of the combined company would be approximately $2.9 billion. The combined company will be named Grey Wolf Inc., have its corporate offices in Houston, establish incorporation in the state of Delaware and trade on the New York Stock Exchange under the symbol "GW". Under the terms of the agreement, Grey Wolf shareholders will receive $1.82 in cash and 0.2500 shares of new Grey Wolf for each share of Grey Wolf they currently own. Based on this exchange ratio, each stockholder of Grey Wolf will receive one share of new Grey Wolf for each four shares of Grey Wolf in addition to the cash consideration. Basic Energy Services shareholders will receive $6.70 in cash and 0.9195 shares of new Grey Wolf for each share of Basic Energy Services they currently own. The total number of shares outstanding of the combined company, which is reflective of the above exchange ratios applied to both companies' current shares outstanding, will be approximately 85 million shares. Pro forma net debt as of Dec. 31, 2007, will be approximately $960 million. The combined company intends to dedicate a substantial amount of its free cash flow to the repayment of the debt while at the same time fully funding and implementing its significant, value-adding growth initiatives. The greater financial strength of the combined company will enable it to return approximately $600 million in cash to the combined shareholder base while retaining financial flexibility to invest for future growth. The financing will be provided by affiliates of UBS Investment Bank and Goldman Sachs & Co. The cash was issued to the two sets of shareholders proportionate to pro forma ownership of the combined company, which will be approximately 54% owned by current Grey Wolf shareholders and 46% owned by current Basic Energy Services shareholders. The companies expect that the combination will create an organization with approximately 7,500 personnel, providing a range of drilling and oilfield well services. The combined company will have 395 well servicing and 130 drilling rigs well as other oilfield service assets, pro forma sales and EBITDA of approximately $1,784 million and $632 million. Pro forma sales for the full year ending Dec. 31, 2007, would be approximately 53% from contract drilling, 19% from well servicing, 15% from fluid services and 13% from completion and remedial services. Thomas P. Richards, current Grey Wolf chairman, president and CEO, will serve as Grey Wolf Inc.'s chairman after the merger. "This is an exciting opportunity for our shareholders, our customers and our people, Mr. Richards said. "Grey Wolf's premium land drilling rig fleet complements Basic Energy Service's premium land-based well servicing equipment. With approximately 50% of Basic Energy Service's business focused on oil and approximately 95% of Grey Wolf's business focused on natural gas, this transaction results in a company with a diversified revenue stream in terms of exposure to oil and gas opportunities, involvement through the life of the well from drilling to production to well abandonment and a very broad geographic coverage, all of which is consistent with our stated strategic goal. "We are confident that our valued customers will respond positively to this merger with the combined company's enhanced ability to satisfy their needs," Mr. Richards stated. "Grey Wolf has an outstanding management team, well as operational and support staff, which when combined with Basic Energy Services' organization, will produce a best-in-class team." Ken Huseman will serve as chief executive officer of Grey Wolf Inc. after the merger. "This combination achieves the goal of moving Basic Energy Services forward in achieving a size which allows the combined company to compete effectively for expansion opportunities anywhere in the world while continuing to build upon the existing footprint of both companies,' Mr. Huseman said. "The expanded operational capability of a more diversified company will produce significant benefits for our customers and provide substantial growth opportunities for our people." "In addition, the cash consideration allows us to provide each companies' shareholders with a meaningful financial return without unduly limiting the growth potential for the combined entity," Mr. Huseman added. "This is an ideal fit for the stakeholders in both companies." After the merger, Bob Proffit, current senior vice president, human resources of Grey Wolf, will assume the role of senior vice president, administration at the combined company and Spencer Armour, current senior vice president, corporate development of Basic Energy Services, will remain in the same role at the combined company. Operating level officers for both companies will continue in their current roles. The transaction is expected to close in the third quarter of 2008. Completion of the transaction is subject to shareholder approval at both Grey Wolf and Basic Energy Services, receipt of financing proceeds, regulatory approvals and other customary conditions. DLJ Merchant Banking Partners III L.P. and its affiliated funds, holders of approximately 44% of the outstanding shares of Basic Energy Services, have entered into a voting agreement agreeing to vote in favor of the transaction. UBS Investment Bank is acting as exclusive financial advisor to Grey Wolf and Goldman, Sachs & Co. is acting as exclusive financial advisor to Basic Energy Services. Simmons & Company International provided a fairness opinion to the board of Grey Wolf. Tudor Pickering Holt & Co. provided a fairness opinion to the board of Basic Energy Services. Porter & Hedges L.L.P. and Gardere Wynne & Sewell LLP are acting as legal counsel to Grey Wolf, and Davis Polk & Wardwell and Andrews Kurth LLP are acting as legal counsel to Basic Energy Services. About Grey Wolf Headquartered in Houston, Texas, Grey Wolf Inc. (AMEX: GW) -- http://www.gwdrilling.com/-- provides turnkey and contract oil and gas land drilling services in the best natural gas producing regions in the United States with a current drilling rig fleet of 121, which will increase to 123 with the expected addition of two new rigs in 2008. About Basic Energy Services Headquartered in Midland, Texas, Basic Energy Services Inc. (NYSE:BAS) -- http://www.basicenergyservices.com/-- operates in the major oil and gas producing markets in the US including South Texas, the Texas Gulf Coast, the Ark-La-Tex region, North Texas, the Permian Basin of West Texas, the Mid Continent, Louisiana Inland Waters and the Rocky Mountains. Founded in 1992, Basic Energy has more than 4,600 employees in 11 states. * * * As reported in the Troubled Company Reporter on March 12, 2008, Standard & Poor's Ratings Services raised its ratings on Basic Energy Services Inc., including the corporate credit rating to 'BB-' from 'B+'. The senior unsecured rating on the company was raised to 'B+' from 'B', and the rating on its senior secured $225 million revolving credit facility was raised to 'BB+' from 'BB'. The recovery rating on Basic Energy's revolving credit facility remains unchanged at '1', reflecting S&P's expectation of very high (90% to 100%) recovery in the event of a payment default. The outlook is stable. BASIC ENERGY: Moody's Reviews 'Ba3' Ratings on Merger News ---------------------------------------------------------- Moody's Investors Service placed the ratings for Grey Wolf, Inc. and Basic Energy Services, Inc. under review for possible upgrade following the companies' announcement that they have agreed to a merger of equals. Grey Wolf's ratings under review are its Ba3 corporate family rating, Ba3 probability of default rating, and B1 (LGD 4, 61%) rating on the senior unsecured convertible notes. The ratings for Basic under review are its Ba3 corporate family rating, Ba3 probability of default rating, the B1 (LGD 5, 74%) senior unsecured note rating, and the Ba1 (LGD 2, 19%) rating on Basic's senior secured revolving credit facility. The review for possible upgrade considers the combination of two well established companies in the oilfield services industry that will have increased geographic and product diversification and will have the ability to provide a full range of services covering the entire lifecycle of an oil and gas well. In addition, the review also reflects the conservative financial profile of the individual companies as well as the pro forma financial profile which seems to compare favorably to similarly rated oilfield services companies, despite the addition of $600 million being raised to fund the cash consideration being made to both Grey Wolf's and Basic's shareholders. However, Moody's notes that despite the enhanced competitive position with an ability to bundle its products and services, the new company will not be gaining any additional scale in the legacy businesses and will have more exposure to the drilling cycle and still be reliant on North America. Moody's believes the pro forma company will have a volatile business mix given the majority of the pro forma revenues and earnings will be directly tied to drilling activity. In addition, Moody's expects the new company will remain somewhat acquisitive, particularly in the well services sector, and continue the consolidation strategy employed by Basic to this point. Under the terms of the agreement, GW shareholders will receive $1.82 in cash and 0.2500 shares of the new company for each share of GW they currently own. Based on this exchange ratio, each stockholder of GW will receive one share of the new Grey Wolf for each four shares of GW in addition to the cash consideration. Basic Energy Shareholders will receive $6.70 in cash and 0.9195 shares of the new Grey Wolf for each share of Basic they currently own. Upon closing, the pro forma ownership of the combined company will be 54% owned by current GW shareholders and 46% owned by current Basic shareholders. In concluding the review, Moody's will meet with senior management to better understand the strategy and financial policies of new GW and whether they will continue to be as conservative as the individual companies prior to the merger. The review will focus on how acquisitive the new company will be, and how future acquisitions will be funded. Moody's will also discuss management's view on expansion opportunities in the international markets and how those opportunities may be pursued given the relatively light international exposure each company has thus far. Grey Wolf, Inc. is headquartered in Houston, Texas. Basic Energy Services is headquartered in Midland, Texas. BEARD COMPANY: Cole & Reed Raises Substantial Doubt --------------------------------------------------- Cole & Reed, P.C., in Oklahoma City raised substantial doubt on The Beard Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. Cole & Reed pointed to the company's recurring losses and negative cash flows from operations. Financials For the year ended Dec. 31, 2007, the company posted a $2,026,000 net loss on $1,467,000 of total revenues compared with a $1,554,000 net loss on $1,717,000 of total revenues in 2006. At Dec. 31, 2007, the company's balance sheet showed $2,334,000 in total assets and $11,519,000 in total liabilities, resulting in a $9,185,000 stockholders' deficit. The company's balance sheet at Dec. 31, 2007, also showed strained liquidity with $1,220,000 in total current assets available to pay $4,379,000 in total current liabilities. The company's accumulated deficit at Dec. 31, 2007, increased to $48,954,000 from $46,928,000 at Dec. 31, 2008. McElmo Dome Sale On March 26, 2008, the company closed on the sale of 35% of its interest in the McElmo Dome CO2 Unit for $3,500,000. The sale, which was effective Feb. 1, 2008, added approximately $3,475,000 to cash flow after legal costs. Because its interest in McElmo Dome served as the collateral for its primary lines of credit, the company entered into a new Change of Terms Agreement reducing the maximum available credit under the 2007 Facility from $1,500,000 to $1,000,000 and modifying the required monthly principal reduction from $75,000 per month beginning in March 2008 to $50,000 per month beginning in April of 2008. The outstanding principal balance under the facility was reduced to zero. In addition, the outstanding loan agreement and related promissory note with The William M. Beard and Lu Beard 1988 Charitable Unitrust was amended to reduce the outstanding principal balance of the loan from $2,783,000 to $2,250,000; pay the accrued interest of $697,000; and extend the maturity date from April 1, 2009, to April 1, 2010. The company also entered into a Release, Subordination and Amended and Restated Nominee Agreement whereby the Unitrust loan will continue to be subordinate to the company's $390,000 note in favor of Boatright Family, L.L.C., and the 2007 Facility, and the Boatright note will continue to be subordinate to the 2007 Facility. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2aed About The Beard Company Based in Oklahoma City, The Beard Company (OTC BB: BRCO) -- http://www.beardco.com/-- has four segments: Coal Reclamation, Carbon Dioxide, e-Commerce, and Oil and Gas. The Coal Segment is in the business of operating coal fines reclamation facilities in the U.S. and provides slurry pond core drilling services, fine coal laboratory analytical services and consulting services. The Carbon Dioxide Segment consists of the production of CO2 gas. The e-Commerce Segment consists of a 71%-owned subsidiary whose current strategy is to develop business opportunities to leverage starpay(TM)'s intellectual property portfolio of Internet payment methods and security technologies. The Oil & Gas Segment is in the business of producing oil and gas. BIOVAIL CORP: Bill Wells Assumes Chief Executive Officer Role ------------------------------------------------------------- The board of directors of Biovail Corporation appointed Bill Wells as chief executive officer, effective May 1, 2008. Mr. Wells joined Biovail's board in 2005, and has been the company's lead director since June 30, 2007. As CEO, Mr. Wells will remain on the company's board. The company also disclosed that the board has appointed Dr. Douglas Squires as chairman of the board, effective May 1, 2008. Dr. Squires is the company's current interim chairman and chief executive officer. The appointments will conclude a year-long transition phase from Eugene Melnyk, Biovail founder's exit, Donna Kardos of Wall Street Journal reports. According to WSJ, Mr. Melnyk resigned as chairman in May 2008, as part of a settlement with the Ontario Securities Commission. WSJ says that OSC alleged that he "repeatedly breached" Ontario securities law by failing to file insider-trading reports on more than 5,000 trades in Biovail shares earlier this decade. Mr. Wells has extensive financial and leadership experience with large companies, as chief financial officer of Loblaw Companies Limited, Canada's food distributor and provider of general merchandise, drugstore and financial products and services. Prior to joining Loblaw, Mr. Wells was CFO of Bunge Limited in the United States, a food and agri-business company. He led Bunge's initial public offering on the New York Stock Exchange and was a key member of the management team that grew Bunge's market valuation from $1.3 billion to over $10 billion. "Bill Wells brings a unique skill set to the CEO position at an important time for the company and its shareholders," said Dr. Squires. "[Mr. Wells] has gained intimate knowledge of the company's business and operations from his service as a member of the board and as lead director. He has significant experience in strategic financial management for companies and in the deployment of assets to maximize return on capital and achieve key business objectives. [Mr. Wells] is exceptionally well qualified to lead Biovail in this new phase of the company's development." "Biovail is a great company with outstanding potential to deliver enhanced value for its shareholders," Mr. Wells said. "I look forward to executing the company's new strategic plan, which is being developed by the board and management." "Loblaw has an outstanding group of people working on executing Loblaw's turnaround plan, which I am confident will succeed," added Mr. Wells. Consistent with Biovail's historical practice and its corporate, operational and tax structure, Mr. Wells, as Biovail's key decision maker, will be based in Barbados, where he will also serve as president of Biovail Laboratories International SRL, the company's principal operating subsidiary. "We are pleased to have the benefit of Dr. Squires' extensive pharmaceutical experience continue at the Board level with his appointment as chairman," Michael Van Every, chairperson of Biovail's audit committee, said. "We thank and commend Dr. Squires for his strong leadership as CEO over the past three years, a time of many challenges for the company, and we look forward to his continued leadership in his role as chairman." About Biovail Corporation Based in Ontario, Canada, Biovail Corporation (NYSE:BVF)(TSX:BVF) -- http://www.biovail.com/-- is a specialty pharmaceutical company that applies advanced drug-delivery technologies to improve the clinical effectiveness of medicines. The company is engaged in the formulation, clinical testing, registration, manufacture and commercialization of pharmaceutical products. Its main therapeutic areas of focus are central nervous system disorders, pain management and cardiovascular disease. The primary markets for its products are the United States and Canada. Biovail has a portfolio of drug-delivery technologies includes controlled release, enhanced absorption, rapid absorption, taste masking, and oral disintegration technologies, among others. * * * Standard & Poor's placed Biovail Corporation's long-term foreign and local issuer credit ratings at 'BB'. The ratings still hold to date with a stable outlook. BOWNE & CO: Improved Cash Flow Cues Moody's Rating Upgrade to Ba2 ----------------------------------------------------------------- Moody's Investors Service upgraded the corporate family rating of Bowne & Co., Inc. to Ba2 from Ba3 and the rating on its convertible subordinated notes to B1 from B2. In conjunction with the upgrade, Moody's changed the ratings outlook to stable from positive. The action follows substantial improvement in free cash flow generation (free cash flow-to-debt exceeded 20% for 2007), some margin improvement, and a moderation of the share repurchase program. Furthermore, the company has developed adequate business diversification to withstand the downturn in capital markets, in Moody's view. The stable outlook assumes that Bowne will continue to generate free cash flow in excess of 5% of debt, margins will remain above 12% (all metrics as per Moody's standard adjustments), and the company will maintain strong liquidity. The current ratings level could tolerate continued cash financed acquisitions in line with the historic pattern (less than $50 million purchase price) provided leverage remains around 3 times debt-to-EBITDA (as per Moody's standard adjustments) and margins do not contract. Bowne & Co., Inc. -- Corporate Family Rating, Upgraded to Ba2 from Ba3 -- Probability of Default Rating, Upgraded to Ba2 from Ba3 -- Subordinate Convertible Bonds, Upgraded to B1 from B2 -- Outlook, Changed To Stable From Positive Bowne's strong liquidity, moderate leverage (2.9 times debt-to- EBITDA for 2007, as per Moody's standard adjustments, including treatment of pension obligations as debt), and considerable stream of recurring revenue support its Ba2 corporate family rating. The rating also reflects the seasonality and volatility of its free cash flow, its exposure to the capital markets cycle, some vulnerability to the reduction in demand for printed products, and some execution and acquisition risk. Bondholders could put the $75 million convertible notes to Bowne for cash in October of 2008. Moody's believes Bowne has adequate liquidity from its balance sheet cash (approximately $100 million as of 2007 year end) and $150 million revolving credit facility to satisfy this potential obligation, should bondholders exercise this option. Headquartered in New York, New York, Bowne & Co., Inc. provides services to help companies produce and manage their investor communications, including regulatory and compliance documents, and also markets business communications,personalized statements, enrollment books and sales and marketing collateral. Its annual revenue is approximately $850 million. BRASCAN ADJUSTABLE: Meeting Follows Completed Strategic Review -------------------------------------------------------------- Brascan Adjustable Rate Trust I proposed to call a meeting of unitholders following the completion of its manager's strategic review of the Fund's investment objectives and strategy in light of the ongoing volatility in the credit and mortgage-backed securities markets. The Fund provides exposure to an actively managed portfolio of primarily mortgage-backed securities held by Brascan Adjustable Rate Limited Partnership. At April 10, 2008, the Fund had net assets of about C$4.7 million or $3.25 per unit. Special Redemption Right The Manager proposed to call a meeting of unitholders to consider a special resolution to permit any unitholders who wish to redeem their investment in the Fund to do so by July 31, 2008. This special one-time redemption right would be in addition to the normal annual redemption right that arises, pursuant to the Fund's Declaration of Trust, on November 30 of each year. The special redemption right would give unitholders an additional opportunity to liquidate their holdings at net asset value which otherwise would not be available to them at this time. Full details of the special redemption right will be set out in materials to be delivered to unitholders prior to the meeting. Liquidation of the Fund The special resolution will also include an amendment of the Fund's Declaration of Trust to provide for the termination of the Fund without the further consent of unitholders in the event that the total number of Fund units held by unitholders other than the Manager falls below 1,000,000 or if the net asset value of the Fund declines to less than C$3 million. If either of these thresholds is broken, the Manager believes that there will be insufficient liquidity for the remaining unitholders and that operating costs of the Fund will be prohibitively high in relation to the size of the Fund. As a result, it will be in the best interests of unitholders to liquidate the Fund and distribute the proceeds to unitholders in an orderly fashion. Full details of the proposed amendment will be set out in materials to be delivered to unitholders prior to the meeting. Unitholder Meeting The Manager proposed to call a meeting -- which it anticipates will take place no later than July 11, 2008 -- of Fund unitholders to consider the special resolution to amend the Fund's Declaration of Trust to provide for the special redemption right and the termination of the Fund in certain circumstances. It is expected that materials for this meeting, which will provide further details on the proposal, will be available no later than three weeks prior to the date of the meeting. Update on Counterparty Arrangements Current conditions in the credit markets remain extremely volatile and liquidity-constrained and financing continues to be difficult to secure, the Fund stated. Under the terms of the forward agreement by which the Fund receives its exposure to the Partnership and its portfolio, the counterparty may, in certain circumstances, elect to terminate it. In order to permit the Fund to continue to have exposure to the Partnership's portfolio, the counterparty has agreed to waive its termination rights on the condition that an affiliate of the Manager provides the counterparty with an indemnity in connection with its waiver. Neither the Fund nor the Partnership has made or is required to make any payments in consideration of this indemnity. The Fund's Independent Review Committee has reviewed the indemnity and concluded that it is clearly in the best interests of the Fund, since it allows the Fund to continue operations in the normal course,