T R O U B L E D C O M P A N Y R E P O R T E R Thursday, April 24, 2008, Vol. 12, No. 97 Headlines 222 PIZZA: Settles $500,000 Debt by Issuing 10 Mil. Common Shares ACACIA OPTION: Five Classes of Notes Get Moody's Rating Downgrades AIRTRAN HOLDINGS: Plans to Offer $65 Million Senior Notes ALOHA AIRLINES: Files Schedules of Assets & Liabilities AMERICAN AXLE: UAW Rejects Economic Proposals; Firm Mulls Closures AMERICAN LAFRANCE: Files Supplements to Amended Restructuring Plan AMERICAN STANDARD: Bankruptcy Proceeding Converted to Chapter 7 ANTHRACITE 2004-HY1: Fitch Cuts Ratings to 'BB' on $%51MM Notes ARBY'S RESTAURANT: S&P Retains Neg. Watch After Wendy's Rejection ARCAP 2004-1: Fitch Holds 'BB-' Rating on $20.5 Million Notes ARCAP 2004-RR3: Fitch Chips Ratings to 'B-' on Four Cert. Classes ASARCO LLC: Grupo Mexico Has Poor Stewardship Record, Union Says AUSTIN WRANGLERS: Chapter 7 Proceeding Closes AVENUE PARCEL: DCM Warehouse Sells Stake in Various Entities BANCO INDUSTRIAL: Moody's Puts 'Ba3' Foreign Currency Debt Rating BASIC ENERGY: Approves $3 Billion Merger Deal with Grey Wolf BASIC ENERGY: Grey Wolf Merger Deal Cues S&P's Positive Watch BELLE HAVEN: Moody's Lowers Rating on $1.7 Billion Notes to 'Ba3' BOLDEN DEVELOPMENT: Case Summary & Largest Unsecured Creditor BUCKINGHAM CDO: Two Classes of Notes Get Moody's Rating Downgrades C-BASS CBO: Poor Credit Quality Prompts Moody's Rating Downgrades CA LA ELECTRICIDAD: Fitch Upgrades Foreign and Local IDR to BB- CALIFORNIA OIL: Posts $308,686 Net Loss in 1st Qtr. Ended Feb. 29 CAPCO AMERICA: Fitch Lowers DR Rating to C/DR6 from C/DR5 CENTENE CORP: S&P Cuts Credit Rating to BB- from BB; Removes Watch CERAMIC PROTECTION: Bank Extends Loan Maturity, Waives Pact Terms CETUS ABS: Moody's Junks Ratings on Four Classes of 2046 Notes CHARLES FORT: Moody's Cuts Rating on $220 Mil. Notes to B3 From A3 CHRISTOPHER WRENN: Case Summary & 20 Largest Unsecured Creditors CHRYSLER LLC: In Talks with Fiat SpA Over Alfa Romeo Production CLEAR CHANNEL: Buyers Want to Pursue Financing Dispute in Court COMMODORE INTERNATIONAL: Unit's Bankruptcy Was a Mistake CREST 2004-1: Fitch Holds 'B' Rating on $96.412MM Preferred Shares CV THERAPEUTICS: Sells 50% Product Rights to TPG-Axon for $185MM CV THERAPEUTICS: Dec. 31 Balance Sheet Upside-Down by $185 Million CWALT INC: Higher Delinquencies Cue Moody's 158 Rating Downgrades CWALT INC: Moody's Cuts Ratings on 64 Tranches From 28 Alt-A Deals DAVI & VALENTI: Bankruptcy Won't Stop Stevens Worldwide's Rescue DIAMOND GLASS: Creditor Panel Objects to Asset Sale Bid Procedures DIASTAR INC: Court Okays Robert Wasserman as Chapter 11 Trustee DIASTAR INC: Ch. 11 Trustee Seeks Wasserman Jurista as Counsel DIOMED HOLDINGS: Delivers Schedules of Assets and Liabilities DIOMED HOLDINGS: Engages Wolf Greenfield as Special Counsel DOWNEY FINANCIAL: Quarter Results Cue Moody's Rating Cut to 'Ba1' DUNE ENERGY: Dec. 31 Balance Sheet Upside-Down by $30.2 Million E*TRADE ABS: Moody's Downgrades Rating on $260 Mil. Notes to 'Ba3' FASHION HOUSE: Files for Chapter 11 Protection in California FASHION HOUSE: Case Summary & 23 Largest Unsecured Creditors FORD CREDIT: S&P Assigns 'BB+' Rating on $31.5MM Class D Notes FORSTER DRILLING: Feb. 29 Balance Sheet Upside-Down by $1,037,698 FORTUNOFF: New CEO Aims to Fix Firm Despite Industry Woes FOUNDRY AT S. STRABANE: DCM Sells Stake in Various Entities FREEDOM COMMS: Decline in Cash Flow Cues Moody's Rating Reviews FRONTIER AIRLINES: Discontinues Services Pact w/ Republic Airways GAP INC: Fitch Affirms 'BB+' Ratings with Stable Outlook GE CAPITAL: Fitch Affirms 'B-' Rating on $5.9 Million Certificates GENERAL MOTORS: One Shift at Oshawa Truck Assembly Plant Resumes GOODYEAR TIRE: $4 Million Notes Convertible Until June 30 GOODYEAR TIRE: Board Approves 2008 Performance & Incentive Plans GREY WOLF: Board Approves $3 Billion Merger Deal with Basic Energy GREY WOLF: Moody's Reviews 'Ba3' Ratings on Basic Energy Merger GREY WOLF: S&P Puts Ratings Under Positive Watch on Basic Merger GS MORTGAGE: Fitch Lifts Rating to BB+ from BB on $3.3MM Loans HANOVER SECURITIES: SIPC Sets April 28 as SIPA Claims Bar Date HASKELL PROPERTIES: Voluntary Chapter 11 Case Summary HAWKER BEECHCRAFT: Moody's Lifts Liquidity Rating; Holds B2 Rating HEXCEL CORP: S&P Holds 'BB' Rating and Revises Outlook to Positive IKONA GEAR: Feb. 29 Balance Sheet Upside-Down by $434,887 INDYMAC MORTGAGE: Fitch Junks Ratings on Two Certificate Classes INFE-HUMAN: Feb. 29 Balance Sheet Upside-Down by $202,635 ISCHUS MEZZANINE: Moody's Junks Ratings on Five Classes of Notes JACOBS FINANCIAL: Feb. 29 Balance Sheet Upside-Down by $9,447,840 JOCKEYS' GUILD: Pays $780,095 to Unsecured Creditors Under Plan KENTUCKY STREET: Voluntary Chapter 11 Case Summary KIMBALL HILL: Files for Chapter 11 Protection to Restructure Debt KIMBALL HILL: Case Summary & 30 Largest Unsecured Creditors KLIO III: Moody's Reviews 'Ba2' Rating on 60,000 Preferred Shares KRONOS INT'L: Fitch Chips ID Rating to BB- with Stable Outlook LB-UBS COMMERCIAL: S&P Junks Ratings on Two Certificate Classes LEINER HEALTH: Trustee Appoints Seven Members to Creditors' Panel LEINER HEALTH: Committee Wants to Employ Saul Ewing as Counsel LEINER HEALTH: Panel Wants FTI Consulting as Financial Advisor LEUCADIA NATIONAL: Agrees to Purchase 14% Stake in Jefferies Group LEUCADIA NATIONAL: Jefferies Deal Won't Affect S&P's 'BB+' Rating LIBERTY HARBOUR: Poor Credit Quality Cues Moody's Note Rating Cuts LINENS 'N THINGS: Ad Hoc Committee of Merchandise Suppliers Formed LINENS 'N THINGS: Commences Drastic Moves to Keep Operations Going MACH ONE: Projected Losses Cues Fitch to Affirm Ratings MADISON SQUARE: Fitch Holds 'BB+' Rating on $12.1MM Class S Notes MARQUIS AT WILLIAMSBURG: DCM Sells Stake in Various Entities MCKINLEY FUNDING: Moody's Reviews Notes For Possible Downgrades MCM GROUP: DCM Warehouse Sells Stake in Various Entities MERRILL LYNCH: S&P Lowers Ratings on Three Certificate Classes METRO ONE: Gets NASDAQ Deficiency Notice on Minimum Bid Price MICHAEL HANSON: Voluntary Chapter 11 Case Summary MKP CBO: S&P Chips Rating on Class A-1L Notes to CC from CCC MILLSTONE FUNDING: Moody's Junks Rating on Class B Notes From 'A3' MOISE BANAYAN: Bank Sets April 29 Sale of Schwartz & Sons Shares MORGAN STANLEY: Fitch Cuts Ratings on Two Classes; Removes Watch MORGAN STANLEY: Fitch Affirms 'B-' Rating on $1.63MM Certificates MORTGAGE LENDERS: Disclosure Statement Hearing Adjourned Sine Die MORTGAGE LENDERS: Banks Seek to Foreclose on Properties MUSICLAND HOLDING: Pursues $145 Million in Damages from Best Buy MUSICLAND HOLDING: Plan Panel & Truesdell Agree to Replace Counsel MUSICLAND HOLDING: Discloses Post-Confirmation Distributions NASH FINCH: Board Declares 18 Cents Per Share Quarterly Dividend NESTOR INC: Nasdaq Delisting Constitutes Event of Default NESTOR INC: Recurring Losses Cue Auditor's Going Concern Doubt NETBANK INC: Wants Until May 5 to File Chapter 11 Plan NEVADA POWER: Planned Reliant Deal Won't Affect S&P's Ratings Now NEWCASTLE MORTGAGE: Moody's Downgrades Ratings on Eight Tranches NORTEK INC: Weak Fin'l Profile Prompts S&P to Chip Rating to B- NOVASTAR FINANCIAL: Former CEO Gets $1.1 Mil. Compensation in 2007 NTK HOLDINGS: S&P Cuts Rating to B- on Unit's Weak Fin'l Profile OLIN CORP: S&P Puts '4' Recovery Rating on 'BB+' Rated Debt OPEN ENERGY: Posts $8,934,000 Net Loss in 3rd Qtr. Ended Feb. 29 OWN IT: Fitch Chips Ratings on Three Certificate Classes PAETEC HOLDING: Earns $15.5 Million in 2007 Fourth Quarter PAINCARE HOLDINGS: Receives Notice From Amex on 10-K Filing Delay PARK PLACE: Higher Delinquencies Cue Moody's 14 Rating Downgrades PARMALAT SPA: New Jersey Judge Dismisses Most Claims v. Citigroup PARMALAT SPA: Extraordinary Shareholders' Meeting Set May 30 PARMALAT SPA: Court Closes Chapter 11 Cases of Former U.S. Units PARMALAT SPA: Trustee Seeks 3-Year Extension of Farmland Trust PATHEON INC: Undertakes Series of Activities on Restructuring Plan PATHEON INC: Moody's Holds B2 Rating; Changes Outlook to Negative POPULAR ABS: Moody's Cuts 53 Tranches' Ratings From 10 RMBS Deals POTLATCH CORP: Moody's Keeps 'Ba1' Ratings on Proposed Spin-off PULTE HOMES: Posts $696 Million in Quarter Ended March 31 QUECHAN TRIBE: Poor Credit Metrics Cue Fitch to Chip Ratings RELIANT ENERGY: Nevada Power to Buy Generating Plant for $500 Mil. REPUBLIC AIRWAYS: To File $260MM Damage Claim on Frontier Rebuff REUNION INDUSTRIES: Closes Sale of Pressure Vessels for $66.3 Mil. ROBERT STEWART: Case Summary & 20 Largest Unsecured Creditors RUEBEN LARSON: Case Summary & 20 Largest Unsecured Creditors SAKS INC: S&P Lifts Corporate Credit Rating to BB- from B+ SHEPARD MARINE: Case Summary & 20 Largest Unsecured Creditors SIRVA INC: Court Extends Confirmation Hearing for Two Days SHEPARD MARINE: Case Summary & 20 Largest Unsecured Creditors SOUNDVIEW HOME: 148 Tranches From 19 Deals Get Moody's Rating Cuts SOUTH COAST: Moody's Cuts Four Note Ratings on Weak Credit Quality STURGIS IRON: Committee et at. Balk at Bidding Procedures TERWIN MORTGAGE: Moody's Cuts 59 Tranches' Ratings on Delinquency THORNBURG MORTGAGE: Unit's Default Cues Deutsche Bank Sell-Off TOPAZ POWER: S&P Prelim. Rates $740MM Secured Facilities at BB- TOUSA INC: Committee Allowed to Hire Stearns as Local Counsel TOUSA INC: Committee Allowed to Hire Garden City as Info Agent TRM CORP: Acquires ATM Deployer Access to Money for $15 Million TRM CORP: Closes LC Capital & Lampe Conway Financing Agreement TRM CORP: McGladrey & Pullen Expresses Going Concern Doubt TYSON FOODS: Ceases York Plant Production, Eliminates 110 Jobs UAL CORP: Posts $537 Million Net Loss in Quarter Ended March 31 UAL CORP: First-Quarter Loss Does Not Affect S&P's 'B' Rating VALLEJO CITY: Meeting on Bankruptcy Filing Moved to May 6 VERTICAL ABS: Eroding Credit Quality Prompts Moody's Rating Cuts VINEYARD NATIONAL: Appeals to Nasdaq for Continued Listing WASHINGTON MUTUAL: Fitch Holds Low-B Ratings on Six Cert. Classes WELLS FARGO: Moody's Lowers Ratings on 50 Tranches From Six Deals WESTWAYS FUNDING: Fitch Withdraws 'C/DR6' Ratings on Six Notes WOODFIELD II & III: Sale of Arbor Collateral Set for April 29 WP EVENFLO: Weak Liquidity Cues S&P to Revise Outlook to Negative * S&P Gives Hope on Recovery Prospect for Lenders to Homebuilders * S&P Says Market Phenomena Force Asset Mngrs. to Shore Up Funds * S&P Says Maturing Loans and Defaults Could Stress CMBS Servicers * S&P Says Upgrade to Downgrade Ratio Weakened in 2008 First Qtr. *Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 222 PIZZA: Settles $500,000 Debt by Issuing 10 Mil. Common Shares ----------------------------------------------------------------- 222 Pizza Express Corp. settled $500,000 in outstanding debt through the issuance of 10 million common shares at a deemed price of $0.05 per share. All securities issued in the private placement and debt settlement are subject to a hold period expiring on Aug. 22, 2008. The company also completed the $1.5 million private placement previously reported on March 28, 2008. Under the terms of the financing, the company issued an aggregate of 30,000,000 units, at a price of $0.05 cents per unit. Each unit consists of one common share and one warrant exercisable for one additional common share at a price of $0.10 per share, for a period of one year. Endeavour Financial has been issued 1.5 million units as a finder's fee on monies raised in the private placement. As of Sept. 30, 2007, the company has total assets of C$11,070, total liabilities of C$745,064 and a shareholders' deficiency of C$733,944. Based in Surrey, Canada, 222 Pizza Express Corp. (CVE:PIZ.H) does not have significant operations. It intends to find suitable financing or partnership with a focus on food or order processing business. Prior to September 2003, the company was engaged in pizza delivery, centralized order processing, and franchise operations. ACACIA OPTION: Five Classes of Notes Get Moody's Rating Downgrades ------------------------------------------------------------------ Moody's Investors Service downgraded and placed on review for further possible downgrade the ratings on these notes issued by Acacia Option ARM 1 CDO, Ltd. Class Description: $380,000,000 Class A1S First Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa3, on review for possible downgrade Class Description: $40,000,000 Class A1J Second Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $34,000,000 Class A2 Third Priority Senior Secured Floating Rate Notes Due 2052 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $16,000,000 Class A3 Fourth Priority Senior Secured Floating Rate Deferrable Interest Notes Due 2052 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $16,000,000 Class B Fifth Priority Mezzanine Secured Floating Rate Deferrable Interest Notes Due 2052 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. AIRTRAN HOLDINGS: Plans to Offer $65 Million Senior Notes --------------------------------------------------------- AirTran Holdings, Inc. intends to offer, subject to market and other conditions, $65 million of Convertible Senior Notes due 2015. AirTran intends to grant the underwriters of the Notes offering a 30-day option to purchase an additional $9,750,000 aggregate principal amount of the Notes, solely to cover over allotments, if any. The Notes will be convertible into AirTran common stock, at the option of the holders of the Notes. The interest rate, conversion rate, conversion price and other terms of the Notes will be determined at the time of pricing of the offering. The Notes will be general senior unsecured obligations of AirTran. Concurrently with the offering of the Notes, AirTran intends to offer, subject to market and other conditions 14,250,000 shares of its common stock. The underwriters have the option to purchase up to an additional 2,137,500 shares of common stock from AirTran solely to cover over allotments, if any. Morgan Stanley & Co. Incorporated will act as bookrunner for each of the offerings and Credit Suisse Securities (USA) LLC will act as co-lead manager for each of the offerings. AirTran intends to place a portion of the net proceeds of the Notes offering in an escrow account to acquire government securities in an amount equal to the first six scheduled semi- annual interest payments due on the Notes, AirTran intends to use the remaining net proceeds from the Notes offering and the net proceeds of the common stock offering for general corporate purposes, which may include additions to working capital, capital expenditures, the retirement of debt, other investments in strategic alliances, code-share agreements, or other business arrangements and, although we are not presently in any negotiations, acquisitions of other airlines or their assets. Pending the application of the net proceeds, AirTran intends to invest the net proceeds in investment grade, interest bearing securities. Alternatively, copies of the prospectus and the prospectus supplements for the Notes and the common stock offerings at: Morgan Stanley 180 Varick Street, 2nd Floor New York, New York 10014 Attention: Prospectus Department Credit Suisse One Madison Avenue New York, New York 10010 Toll Free (800) 221-1037 Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- a Fortune 1000 company, is the parent company of AirTran Airways Inc., which offers more than 700 daily flights to 56 U.S. destinations. * * * To date, AirTran Holdings Inc. carries Moody's Investors Service 'B3' long-term corporate family and 'Caa2' senior unsecured debt ratings. Outlook is Stable. ALOHA AIRLINES: Files Schedules of Assets & Liabilities ------------------------------------------------------- Aloha Airlines Inc. and its debtor-affiliates filed with the U.S. Bankruptcy Court for the District of Hawaii its schedules of assets and liabilities. The schedules, which the Debtors promised to release on April 21, reflected total assets of $74,600,000 against total liabilities of $197,100,000. Aloha Airlines is in the process of selling certain of its divisions. 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. ALOHA AIRLINES: Pacific Air Offers $2MM for Contract Services Unit ------------------------------------------------------------------ Los Angeles-based Pacific Air Cargo topped the bids for Aloha Airlines Inc.'s contract services operations on Monday, with a $2 million offer for the division, various reports say. The Aloha unit is in charge of, among others, the Debtor's customer service, baggage handling, and ticketing services, The Honolulu Advertiser says, citing sources familiar with the bidding event. The division has around 1,000 workers employed. According to the Los Angeles Business Journal, Aloha CEO David Banmiller was "gratified" in that the bid potentially preserves the jobs of the division's workers. "We're excited about the prospect of this acquisition as it allows Pacific Air Cargo to expand the range of its air transportation services in Hawaii," the LA Journal quotes Pacific Air CEO Beti Ward as saying. Pacific Air came out as the top bidder in an auction held at the San Francisco law offices of Bingham McCutchen LLP, relates the Star Bulletin. Representatives for the previous leading bidder, Saltchuk Resources Inc., walked away from the auction after its bid had been exceeded by Pacific Air's. About Aloha Airlines Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates are carriers that fly passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operate a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. This is the airline's second bankruptcy filing. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in February 2006. The company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. AMERICAN AXLE: UAW Rejects Economic Proposals; Firm Mulls Closures ------------------------------------------------------------------ The strike called by the United Auto Workers union at American Axle & Manufacturing Holdings Inc.'s original U.S. locations continues into its 57th day on Tuesday. Approximately 3,650 associates are represented by the UAW at these five facilities in Michigan and New York. AAM and the UAW worked effectively last week with the objective of reaching a new collective bargaining agreement for the original U.S. locations. Tentative agreements were achieved on many issues and AAM was encouraged by the progress. On Saturday, April 19, 2008, the UAW bargaining team left the table and did not return until the afternoon of Monday, April 21, 2008. Although AAM has made several economic proposals to the UAW with "all-in" hourly wage and benefit packages that were considerably higher than the market rate of AAM's UAW-represented competitors in the U.S., the UAW has repeatedly rejected these economic proposals. AAM needs a U.S. market competitive labor agreement for the original U.S. locations. This is necessary because the UAW previously negotiated market competitive labor agreements with many of AAM's U.S. competitors in the driveline market segment. This includes Dana, FormTech, Chinese-owned Neapco and Indian- owned Bharat Forge. The "all-in" wage and benefit package granted by the UAW to these companies averages approximately $30 per hour. In order for AAM to be able to compete for new business and sustain employment at the original U.S. locations, the UAW must offer AAM economic terms and conditions that are comparable to those it has already granted to AAM's competitors. The UAW's latest economic proposal to AAM dated April 14, 2008, included an "all-in" wage and benefit package that is almost double the market rate established by the UAW with AAM's competitors. If the UAW is not willing to consider a U.S. market competitive labor agreement for AAM, a Michigan-based company, similar to the agreements it has given to companies based in China and India, AAM will be forced to plan for the potential closure of some, or all, of these uncompetitive facilities. "AAM has been, and continues to be, totally committed to ensuring that all of AAM's manufacturing operations are viable, profitable and sustainable," Co-Founder, Chairman and CEO Richard E. Dauch said. "AAM's negotiating team has never left the bargaining table and will continue to work in good faith to achieve a market- competitive labor agreement that will allow the original U.S. locations to compete on a level playing field in the U.S." As reported in the Troubled Company Reporter on April 11, 2008, AAM admits the new contract was better, but the total cost was still roughly 200% above the market rate for Axle's competitors in the U.S. auto parts industry. Last month, AAM's Chief Executive Officer Richard Dauch berated the UAW for the work stoppage that has caused a chain reaction in the U.S. auto industry, including the closure of 30 General Motors Corp. plants and a Chrysler LLC plant in Delaware. The CEO added that AAM may end up outsourcing its manufacturing division as a resort. CEO Dauch added that AAM has the right to outsource its work since they have facilities all over the globe -- Mexico, South America, Europe, and Asia. Mr. Dauch added that AAM will not be forced into bankruptcy. AAM is demanding wage reductions of up to $14 an hour as well as elimination of future retiree health care and defined benefit pensions for active workers. AAM, which earned $37 million on $3.25 billion sales in 2007, wanted a deal like those UAW gave GM, Ford Motor Co., Chrysler, and parts makers Delphi Corp. and Dana Corp., insisting that cutting labor costs is essential to be competitive. The auto parts supplier is asking the union to approve $20 to $30 hourly wage cuts from $73 per hour to $27 per hour, arguing that its original U.S. locations incurred losses for three years. Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on April 4, 2008, Moody's Investors Service placed American Axle & Manufacturing Holdings, Inc.'s Ba3 Corporate Family Rating under review for downgrade. AMERICAN LAFRANCE: Files Supplements to Amended Restructuring Plan ------------------------------------------------------------------ American LaFrance LLC delivered to the U.S. Bankruptcy Court for the District of Delaware supplements to its Third Amended Plan of Reorganization on April 14, 2008. The Supplements consist of: 1. Forms of Committee Mortgages, a full-text copy of which is available for free at: http://bankrupt.com/misc/ALF_MortgageForm.pdf 2. Draft of Restructured Security Documents between the Debtor and certain lenders, with Patriarch Partners Agency Services LLC, as agent, a full-text copy of which is available for free at: http://bankrupt.com/misc/ALF_RestructuredCreditAgreement.pdf 3. The names of the members of Executive Committee in relation to the American La France Creditors Trust, which include: * Stefan H. Kurschner of Daimler Trucks North America, LLC * Grant R. Booker of Benett Motor Express, LLC * Michael Mandell of Ryder Integrated Logistics * Neil Gilmour of Executive Sounding Board Associates Inc. as the Trustee 4. American LaFrance LLC Creditors Trust Agreement Under the terms of the Plan, certain assets of the Debtor will be transferred to and held by a Creditors Trust pursuant to an agreement among American LaFrance, Neil Gilmour as Trustee, and the members of the Executive Committee: (i) Michael Mandell; (ii) Stefan Kurschner; and (iii) Grant Brooker. The Trust will be known as the ALF Creditors Trust. The Trust is authorized to retain Pepper Hamilton LLP as its counsel and other professionals necessary and appropriate to carry out the purposes of the Trust, who will be compensated from the Administrative Fund, and the Trust Property. The Creditors Trust is for the benefit of holders of Class 4 Allowed General Unsecured Claims. They will be the beneficiaries of the Trust and their permitted transferees. On the Plan Effective Date, the Debtor and its Chapter 11 estate will be deemed to have transferred, assigned and conveyed to the Trust Beneficiaries: * $6,100,000 Cash subject to, with respect to $1,100,000 of that cash, to the Reorganized Debtor's residual interest in $1,100,000 as stated in the Plan; * the Avoidance Action Share as defined in the Plan; * the Insider Avoidance Action Share as defined in the Plan; * to secure the full 22.5% dividend on allowed Class 4 Claims under the Plan, a first priority mortgage lien on the Debtor's real property located at 1800 Lehman Street, in Lebanon, Pennsylvania 17046; * to secure the full 22.5% dividend on allowed Class 4 Claims under the Plan, a first priority mortgage lien and security interest in on the Debtor's real property located at 3705 St. Johns Parkway, in Sanford, Florida 32771 together with all tangible and intangible personal property utilized in the Debtor's operations in Sanford, Florida; and * to help defray Trust Expenses, the sum of $75,000 or the Administrative Fund, followed by a deemed transfer by the Trust Beneficiaries to the Trust, to be held by the Trustee in trust for the Trust Beneficiaries, on the terms and subject to the conditions stated in the Plan. The purposes of the Trust are to: -- collect, liquidate and distribute the Trust Property; -- initiate actions to resolve any issues regarding the payment of Allowed Unsecured Claims, including, the initiation and participation in proceedings or matters before the Bankruptcy Court and intervening in proceedings regarding allowance of Allowed Unsecured Claims; and -- enforce all rights with respect to the Trust Property, with no objective or authority to engage in any trade or business, except to the extent necessary to and consistent with the purposes. The duties of the Executive Committee are to: -- monitor the implementation of the Plan with respect to the Allowed Unsecured Claims; -- supervise the activities of the Trustee; and -- monitor the Distributions to holders of Allowed Unsecured Claims under the Plan. As of the Effective Date, Mr. Gilmour, as the appointed Trustee, will report to the Executive Committee on at least a quarterly basis, or other period as agreed between the Executive Committee and the Trustee, as to the status of all material matters affecting the Trust. The Trustee will have the power and responsibility to: (a) perfect and secure its right, title, and interest to the Trust Property; (b) reduce the Trust Property to cash and hold the same; (c) arrange for distribution of the Trust Property and any net proceeds in accordance with the Plan and the Creditors Trust Agreement; (d) manage and protect the Trust Property; (e) release, convey, or assign any right, title or interest in or about the Trust Property; (f) pay and discharge any costs, expenses, collection fees or obligations deemed necessary to preserve the Trust Property, or its parts, which will be governed by the Trust Agreement; (g) deposit funds of the Trust and draw checks and make or arrange for disbursements; (h) employ and have professionals, including attorneys and accountants and other agents, consultants, and employees on behalf of the Trust as i deems necessary; provided, that the Trustee's authority to pay these professionals will be governed by the provisions of the Trust Agreement; (i) determine when and in what amounts Distributions should be made to the Trust Beneficiaries; provided, that the Trustee will attempt to make interim distributions to trust beneficiaries on at least an annual basis, if the Trustee, in his discretion, determines that the interim distributions can be made in light of then present and anticipated liabilities of the Trust; and provided that nothing will be deemed to restrict the Trustee's discretion with respect to the timing or amount of Distributions; (j) exercise any and all powers granted to the Trustee by any agreement or by common law or any statute that serves to increase the extent of the powers granted to the Trustee under the Plan and or the Trust Agreement; (k) take any action required or permitted by the Plan, including, if necessary, prosecuting foreclosure proceedings, deficiency proceedings and execution proceedings against the Reorganized Debtor to ensure distribution to holders of Allowed Unsecured Claims in accordance with the provisions of the Plan; (l) negotiate, renegotiate, and enter into contracts and execute obligations negotiable and non-negotiable; (m) sue and be sued; provided, that any suit against the Trust or the Trustee acting in his or her capacity as Trustee must be commenced in the Bankruptcy Court; (n) pursue rights related to the Trust Property; (o) settle, compromise or abandon any Trust Property; (p) waive or release rights of any kind; (q) intervene in any objection to any Unsecured Claim filed by the Debtor or Reorganized Debtor; (r) file all income and informational tax returns and forms of the Trust and reserve for disputed claims; (s) enforce all provisions of the Plan and any Order of the Bankruptcy Court for the benefit of the Trust; and (t) deal with the Trust Property, in ways that are lawful. The Trust will continue until the earlier of: (i) the date that all Trust Property has been liquidated, all proceeds have been converted to Cash or distributed in kind, all Trust Expenses have been paid, all Claims to be paid under the Plan for which the Trustee is obligated to make distributions have been paid, all distributions to be made with respect to the Trust Beneficiaries have been made, all litigation to which the Trust is a party has been concluded by dismissal or court order in which the litigation is pending, and the Chapter 11 case is closed; and (ii) the expiration of five years from the Effective Date, provided that the Trustee may ask the Court to extend the permitted life of the Trust for an additional period as is unreasonably necessary to conclude the liquidation and distribution but not to exceed a total of 10 years from the Effective Date. A full-text copy of the Creditors Trust Agreement is available for free at: http://bankrupt.com/misc/ALF_CommitteeTrustAgreement.pdf 5. A list of Executory Contracts to be assumed by the Debtor, a copy of which is available for free at: http://bankrupt.com/misc/ALF_ContractstobeAssumed.pdf In other news, Judge Brendan Linehan Shannon moved the preliminary confirmation hearing of the Plan to April 18, 2008. The hearing was previously set for April 21. No details of that hearing have been made publicly available. Also, the deadline for the acceptance of votes for the Plan was April 18. As of presstime, no tabulation of the voting results has been made public. The final confirmation hearing for the Plan is currently set for April 29, 2008. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN STANDARD: Bankruptcy Proceeding Converted to Chapter 7 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia approved a motion converting the chapter 11 case of American Standard Building Systems Inc. to a chapter 7 proceeding, Martinsville Bulletin relates. The case conversion request was filed by W. Clarkson McDow, Jr., U.S. Trustee for Region 4, the report says. According to the U.S. trustee, American Standard and Owner Builder Solutions signed a purchase agreement with several clients before filing for bankruptcy, Bulletin reports. Both companies allegedly "enticed" clients to make earlier payments to avail of discounts, based on the report. The U.S. trustee also said that James Lester, president and CEO of American Standard, "encouraged and participated" in the so-called client enticement scheme, Bulletin notes. Mr. Lester's counsel, Andrew S. Goldstein, Esq., denied the allegations of the U.S. trustee, Bulletin relates. In addition, the report says that the U.S. trustee's motion claimed that American Standard and Owner Builder asked for about $1 million from clients in exchange for goods that remain undelivered. The report says that Mr. Lester wasn't aware of the approved case conversion until Martinsville Bulletin contacted him. Mr. Lester asserted he didn't have "a chance to oppose" the conversion since it was beyond his control, the report adds. Martinsville, Virginia-based American Standard Building Systems Inc. manufactures prefabricated wood. It filed chapter 11 petition on Feb. 29, 2008 (Bankr. W.D. Va. Case No. 08-60478). Andrew S. Goldstein, Esq., at Magee Foster Goldstein & Sayers, P.C. represents the Debtor in this case. When the Debtor filed for bankruptcy, it listed assets of $3,090,219 and debts of $4,435,439. The Debtor's chapter 11 case was converted to a chapter 7 proceeding on April 9, 2008. ANTHRACITE 2004-HY1: Fitch Cuts Ratings to 'BB' on $%51MM Notes --------------------------------------------------------------- Fitch Ratings has downgraded two classes and affirmed four class of notes issued by Anthracite 2004-HY1 Ltd. as: -- $23.8 million class A affirmed at 'AAA'; -- $28.1 million class B affirmed at 'AA'; -- $21.6 million class C affirmed at 'A+'; -- $19.9 million class D affirmed at 'A-'; -- $33 million class E to 'BB' from 'BBB'; -- $18 million class F to 'BB' from 'BBB-'. Additionally, Fitch has removed classes E and F from Rating Watch Negative, where they were originally placed on Jan. 16, 2008. Fitch does not rate the preferred shares. Anthracite 2004-HY1 is a commercial real estate collateralized debt obligation primarily backed by commercial mortgage-backed securities B-pieces and that closed on Nov. 9, 2004. CMBS B-piece resecuritizations are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. BlackRock Financial Management, Inc. (rated 'CAM1-' by Fitch as a CDO Asset Manager), selected the initial collateral and serves as the collateral administrator. The collateral for this CDO consists of high-yielding junior bonds of CMBS transactions, and some unrated, commercial real estate loans. The underlying assets of the CMBS bonds, by their nature, face similar exposures to losses from any downturn in the commercial real estate market as well as refinancing risks at the assets' maturity dates. As a mitigant, however, the underlying CMBS transactions do have significant geographic, property type and tenant diversity. While Fitch continues to believe investment grade CMBS will perform well even in a heightened stress environment, the risks facing first loss (unrated) and junior rated bonds within the capital structure of CMBS transactions have increased with expectations of a rise in commercial real estate defaults from current low levels. Even a relatively modest increase in CRE losses could be material for these portfolios. 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. Anthracite 2004-HY1 is collateralized by all or a portion of 33 classes of fixed-rate CMBS in 14 separate underlying transactions. All performance and collateral information is based on the March 2008 trustee report and discussions with the collateral administrator. The pool's obligor diversity is considered below average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1998 to 2004 (an average of 7.3 years of seasoning). Over 50% of the collateral is concentrated in the 1998 vintage. Approximately 64.3% of the collateral currently is rated below 'B-' or not rated, and therefore, is more susceptible to losses in the near-term. Anthracite 2004-HY1 holds 7.9% in the 'BB' category and 27.9% in the 'B' category. The collateral has realized $28.6 million in losses to date, which represents 8.3% of the original collateral. Additional losses to the collateral are projected with $120.3 million of the underlying collateral currently 60 days or more delinquent, according to the current trustee report. The ratings of the class A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings on classes C, D, E and F address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. ARBY'S RESTAURANT: S&P Retains Neg. Watch After Wendy's Rejection ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on the Atlanta, Georgia-based Arby's Restaurant Group Inc. ratings, including its 'B+' corporate credit rating, will remain on CreditWatch with negative implications where they were placed on Nov. 15, 2007. This action comes despite Wendy's International Inc.'s rejection of a bid by Arby's parent Triarc Cos. Inc. to acquire Wendy's. "At this point, Standard & Poor's cannot yet eliminate the possibility of a combination of the two companies, given the uncertainty around the future of Wendy's," said Standard & Poor's credit analyst Charles Pinson-Rose. ARCAP 2004-1: Fitch Holds 'BB-' Rating on $20.5 Million Notes ------------------------------------------------------------- Fitch Ratings has affirmed all classes of notes issued by ARCap 2004-1 Resecuritization Trust as: -- $57,100,000 class A at 'AAA'; -- $30,600,000 class B at 'AAA'; -- $26,500,000 class C at 'AAA'; -- $8,500,000 class D at 'AA+'; -- $30,700,000 class E at 'AA'; -- $13,600,000 class F at 'A'; -- $36,000,000 class G at 'A-'; -- $13,000,000 class H at 'BBB+'; -- $31,500,000 class J at 'BBB-'; -- $20,500,000 class K at 'BB-'. The current credit enhancement to the rated classes in relation to the credit quality of the remaining collateral warrants the affirmations. ARCap 2004-1 is a static commercial real estate collateralized debt obligation that closed April 19, 2004. The portfolio is primarily backed by commercial mortgage backed securities B- pieces. Centerline REIT, Inc. (rated 'CAM1-' by Fitch as a CDO Asset Manager), selected the initial collateral and serves as 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 2004-1 is collateralized by all or a portion of 66 classes of fixed-rate CMBS in 17 separate underlying transactions. All performance and collateral information is based on the March 2008 trustee report. The pool's obligor diversity is considered average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1999 to 2004 (an average of 5.7 years of seasoning). While the majority of the collateral is below investment grade, approximately 14.4% is investment grade. ARCap 2004-1 holds 41.7% in the 'BB' category and 34.6% in the 'B' category. Approximately 9.3% of the collateral is rated below 'B-'; one bond (2.9% of the portfolio) is currently a first loss position. The collateral has realized no losses to date. As of the current trustee report, approximately, $88 million of the underlying collateral is currently 60 days or more delinquent. The ratings on the class A and B notes address the timely payment of interest and ultimate repayment of principal. The ratings on classes C, D, E, F, G, H, J and K address the ultimate payment of interest and ultimate repayment of principal. ARCAP 2004-RR3: Fitch Chips Ratings to 'B-' on Four Cert. Classes ----------------------------------------------------------------- Fitch Ratings has downgraded six classes of ARCap 2004-RR3 Resecuritization, Inc., series 2004-RR3, commercial mortgage- backed securities pass-through certificates,as: -- $13 million class G to 'BB' from 'BBB-'; -- $18.4 million class H to 'B' from 'BB+'; -- $8.9 million class J to 'B-' from 'BB'; -- $8.2 million class K to 'B-' from 'BB-'; -- $8.9 million class L to 'B-' from 'B+'; -- $13 million class M to 'B-' from 'B'. In addition, Fitch has affirmed these classes: -- $268.1 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $40.9 million class B at 'AA'; -- $31.4 million class C at 'A'; -- $6.8 million class D at 'A-'; -- $16.4 million class E at 'BBB+'; -- $13.6 million class F at 'BBB'; -- $5.5 million class N at 'B-'. Class A-1 has been paid in full. Fitch has also removed classes F through N from Rating Watch Negative, where they were originally placed on Jan. 16, 2008. The $28.1 million class O is not rated by Fitch. ARCap 2004-RR3 is backed by CMBS B-pieces and closed Sept. 30, 2004. CMBS B-piece resecuritizations are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. A predecessor to Centerline REIT Inc. selected the initial collateral, and Centerline REIT Inc. (rated 'CAM1-' by Fitch as a CDO Asset Manager) currently serves as the collateral administrator. The collateral for this RE-REMIC consists of high-yielding junior bonds of CMBS transactions. The underlying assets of the CMBS bonds, by their nature, face similar exposures to losses from any downturn in the commercial real estate market as well as refinancing risks at the assets' maturity dates. As a mitigant, however, the underlying CMBS transactions do have significant geographic, property type and tenant diversity. While Fitch continues to believe investment grade CMBS will perform well even in a heightened stress environment, the risks facing first loss (unrated) and junior rated bonds within the capital structure of CMBS transactions have increased with expectations of a rise in commercial real estate defaults from current low levels. Even a relatively modest increase in CRE losses could be material for these CMBS B-piece resecuritizations. In reviewing CMBS Re-REMICs, 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 2004-RR3 is collateralized by all or a portion of 54 classes of fixed-rate CMBS in 18 separate underlying transactions. All performance and collateral information is based on the March 21, 2008 trustee report and discussions with the collateral administrator. The pool's obligor diversity is considered below- average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1998 to 2004 (an average of 7.7 years of seasoning) with almost 46% concentration in the 1999 vintage. Approximately 9.6% of the collateral currently is rated below 'B-', and, therefore, is more susceptible to losses in the near-term. Although the underlying collateral is 41.8% investment grade, ARCap 2004-RR3 holds 25.5% in the 'BB' category and 23.2% in the 'B' category. The collateral has realized $10.1 million in losses to date, which represents 1.8% of the original collateral. Additional losses to the collateral are projected with $64.3 million of the underlying collateral currently 60 days or more delinquent, according to the latest trustee report. ASARCO LLC: Grupo Mexico Has Poor Stewardship Record, Union Says ---------------------------------------------------------------- The United Steelworkers union disclosed a report examining Grupo Mexico S.A. de C.V.'s stewardship record. The record shows the potential impact on the long-term viability of ASARCO LLC and on U.S. workers, communities and the environment if Grupo Mexico were to regain control of ASARCO when it exits bankruptcy in the coming months. The report, titled "Grupo Mexico and ASARCO: The Record Speaks for Itself," looks at a number of Grupo Mexico's past business practices, as described in various lawsuits brought against the company and independent media reports. They include allegations that Grupo Mexico: -- stripped ASARCO of its most valuable assets, leaving the company insolvent and unable to pay millions in asbestos and environmental liabilities; -- disregards the health and safety of its employees and their communities; -- has a poor environmental record; and -- has poor employee relations. The outcome of the reorganization process will have dramatic impact on ASARCO's most significant stakeholders -- its employees and the Department of Justice, on behalf of the nation's taxpayers, who are the company's largest creditors. The Steelworkers contend that any reorganization plan must promote both sustainable employment and a credible plan for addressing ASARCO's environmental legacy. Terry Bonds, Director of USW District 12, said, "Based on Grupo Mexico's record, we believe it is clear that Grupo's resumption of control of ASARCO would be detrimental to the interests of U.S. workers and communities and the nation's taxpayers. This is something that the public needs to know." The full report can be downloaded from: http://researcharchives.com/t/s?2b08 About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 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). AUSTIN WRANGLERS: Chapter 7 Proceeding Closes --------------------------------------------- The Austin Wranglers' chapter 7 liquidation filed with the U.S. Bankruptcy Court in Austin was closed last week, Robert Elder of the American Statesman reports. Statesman says that the settlement of the team's bankruptcy "cleared the way" for its operation to go on but creditors lost several millions of U.S. dollars in the process. Austin Wranglers sought protection under chapter 7 in January 2008 and disclosed $525,726 in assets and $5.9 million in debts, including $2.3 million owed to Wachovia Bank, report reveals. Wranglers president Doug MacGregor asserted that they are about to reach an agreement to fully pay Wachovia, Statesman relates. Mr. MacGregor disclosed that two investors are willing to pay the Wachovia debt, report adds. Affiliates of the team owed money, including Mr. MacGregor, who was owed $258,373, did not receive any payment, according to the report. The report says that on April 10, 2008, the case trustee filed "no asset." Statesman says that during the first season, the team is using AF2, an arena of lesser quality of the Arena Football League where the team originally played since 2004. About Austin Wranglers The Austin Wranglers -- http://www.austinwranglers.com/-- is an American football team from Austin, Texas and began to play as a 2004 expansion team in the Arena Football League. AVENUE PARCEL: DCM Warehouse Sells Stake in Various Entities ------------------------------------------------------------ Secured creditor DCM Warehouse Series One LLC conducted a public auction of its membership interests in various entities beginning April 17, 2008, pursuant to Title 26 of the Indiana Code. The public sale was held at the offices of: Ice Miller LLP One American Square, Suite 3100 Indianapolis, IN 46282 Tel: (317) 236-2397 The assets for sale are DCM's membership interests in: a. Plainfield Commons IV Holding LLC and Plainfield Commons IV LLC, the direct and indirect owners of a retail property commonly known as Plainfield Commons IV, located South of US40 and S. Perry Road in Plainfield, Indiana; b. The MCM Group LLC and SLV Holding LLC, the direct and indirect percentage owners of a ground lease interest in approximately 44 acres of undeveloped land at Northwest Quadrant of East Tropicana Avenue and Paradise Road in Clark County, Nevada; c. Sixteen West Savannah Holding Co., LLC and Sixteen West Savannah LLC, the direct and indirect owners of a retail property commonly known as Chattam Gardens, located at 1-16 and Pooler Parkway in Pooler, Georgia; d. Bridgewater Falls I Holding LLC, Bridgewater Falls I LLC, Bridgewater Falls Manager LLC and Bridgewater Falls I Holding Manager LLC, the direct and indirect owners of a retail property commonly known as Bridgewater Falls I, located at 3301-3369 Princeton Road in Hamilton, Ohio; e. The Foundry at South Strabane Holding LLC and The Foundry at South Strabane LLC, the direct and indirect owners of a retail property commonly known as The Foundry at South Strabane, located at 367-447 Washington Road in Washington, Pennsylvania; f. The Marquis at Williamsburg Holding LLC and The Marquis at Williamsburg llC, the direct and indirect owners of a retail property commonly known as The Marquis at Williamsburg, located at 165 and 175 Water County Parkway in Williamsburg, Virginia; g. The Avenue Parcel I Holding LLC and The Avenue Parcel I LLC, the direct and indirect owners of a retail property commonly known as Kite Parcel, Woodfield Commons, located at Northeast Quadrant of 86th Street and Haverstick Road in Indianapolis, Indiana; and h. CLV Holding LLC and CLV Holding Owner LLC, the direct and indirect percentage owners of a retail property commonly known as Current at Lee Vista, located at Hazeltine Road and Lee Vista Boulevard in Orlando, Florida. The assets for sale are held as collateral securing the debts owed to DCM. The underlying properties are also subject to senior mortgage lien debt in various amounts. BANCO INDUSTRIAL: Moody's Puts 'Ba3' Foreign Currency Debt Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 foreign currency subordinated debt rating to Banco Industrial S.A.'s non-cumulative fixed or floating rate step up Tier 1 capital notes with a final bullet maturity of 2068. Both principal and interest on the notes will be payable in US dollars. Moody's noted that the Ba3 subordinated debt rating assigned to the notes is three notches below the bank's Baa3 global local currency deposit rating, in line with Moody's notching guidelines for bank junior securities. The rating is unconstrained by Guatemala's Ba1 foreign currency country ceiling for bonds and notes. Banco Industrial's local currency deposit rating of Baa3 takes into account the bank's baseline credit assessment of Ba2 that is mapped from the D bank financial strength rating. The local currency deposit rating is then lifted to Baa3 based on Moody's assumption of a very high probability of systemic support for the bank's local currency deposit obligations in the event of high stress. Banco Industrial S.A. is headquartered in Guatemala City, Guatemala. It is the country's largest bank as of Dec. 31, 2007, with consolidated assets of $5 billion and equity of $402.5 million. It is a full-service commercial bank providing a wide range of financial services to over one million customers. The bank's main business lines include corporate, retail and international banking, as well as private banking and credit cards. Banco Industrial S.A. maintains a dominant presence in Guatemala with a market shares of approximately 29%, 25% and 27% of total assets, total loans, and total deposits, respectively. These rating was assigned to Banco Industrial's Tier 1 capital notes: -- Foreign currency subordinated debt rating: Ba3, with stable outlook BASIC ENERGY: Approves $3 Billion Merger Deal with Grey Wolf ------------------------------------------------------------ Grey Wolf Inc. and Basic Energy Services Inc.'s boards of directors 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 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. 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. * * * Grey Wolf still carries Moody's Investors Service Ba3 corporate family rating which was last placed on July 31, 2006. Outlook is Stable. BASIC ENERGY: Grey Wolf Merger Deal Cues S&P's Positive Watch ------------------------------------------------------------- Standard & Poor's Ratings Services placed the ratings on oilfield services firms Grey Wolf Inc. and Basic Energy Services Inc., including the 'BB-' corporate credit ratings, on CreditWatch with positive implications. "The rating action follows the announcement of an agreement to a 'merger of equals' between the two companies," explained Standard & Poor's credit analyst Jeffrey Morrison. While Grey Wolf will be the surviving legal entity, senior management will consist of officers from both Grey Wolf and Basic Energy. The transaction is expected to close in the third quarter of 2008, subject to approval by both companies' respective shareholders, the receipt of financing proceeds, and regulatory approval. Under the terms of the agreement, Grey Wolf shareholders will receive $1.82 in cash and 0.25 shares of new Grey Wolf stock for each share of Grey Wolf, and Basic Energy shareholders will receive $6.70 in cash and 0.91 shares of new Grey Wolf stock for each share of Basic Energy. S&P expect a new credit facility, including a committed $600 million term loan, and available cash balances will fund the cash outlay to shareholders. Despite the additional debt in the capital structure, S&P expect pro forma leverage to remain relatively modest at below 2.0x on a debt to EBITDA basis. Further, the expected free cash flow profile of the combined entity could allow for some debt reduction over the intermediate term. The positive CreditWatch listing reflects the potential for a ratings upgrade or affirmation in the near term. Substantially increased operational scale, a broadened product and service offering, and moderate pro forma debt leverage could warrant a one-notch upgrade of Grey Wolf. Given that Grey Wolf will be the surviving legal entity, the rating on Basic Energy will be the same as that of Grey Wolf. S&P expect to resolve the CreditWatch listing prior to close of the transaction, following a meeting with management and corresponding full review of the combined entity, capital structure, and business plan. S&P will comment on potential issue and recovery rating changes at that time. Grey Wolf's outstanding convertible note issues could be converted at their holders' option prior to or after the close of the transaction. S&P expect Basic Energy's senior unsecured notes to remain outstanding obligations of the new entity, but they will become secured upon the transaction's close. The combined entity will have pro forma revenues and EBITDA of $1.7 billion and $632 million (as of Dec. 31, 2007), respectively. We expect the addition of Basic Energy's well servicing, fluid services, and completion and remedial services businesses will complement Grey Wolf's primarily land-drilling-focused operations. Correspondingly, the combined entity will derive about 53% of its revenues from land contract drilling operations, 19% from well servicing, 15% from fluid services, and 13% from completion and remedial services. S&P expect liquidity to be ample upon close of the transaction, with full availability under a new $325 million revolver and over $150 million in cash and equivalents. BELLE HAVEN: Moody's Lowers Rating on $1.7 Billion Notes to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service downgraded ratings assigned to six classes of Notes and left on review for possible downgrade the rating of one of these classes of Notes issued by Belle Haven ABS CDO 2006-1, Ltd. The classes affected by this rating actions are: Class Description: $1,700,000,000 Class A-1 Floating Rate Notes Due 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $170,000,000 Class A-2 Floating Rate Notes Due 2046 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ca Class Description: $50,000,000 Class B Floating Rate Notes Due 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $30,000,000 Class C Floating Rate Deferrable Notes Due 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $29,000,000 Class D Floating Rate Deferrable Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $5,000,000 Class E Floating Rate Deferrable Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on April 10, 2008, as reported by the Trustee, of an event of default caused by a failure of the Class AB Overcollateralization Ratio to be greater than or equal to 95%, as described in Section 5.1(h) of the Indenture dated May 24, 2006. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating downgrades taken reflect the increased expected loss associated with the tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of remedy to be pursued following the event of default. Because of this uncertainty, the ratings assigned to the Class A-1 Notes remain on review for possible further action. Belle Haven ABS CDO 2006-1, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. BOLDEN DEVELOPMENT: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------- Debtor: Bolden Development, LLC 20935 St. Rd. 19/Cicero Rd Cicero, IN 46034 Bankruptcy Case No.: 08-04484 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: April 21, 2008 Court: Southern District of Indiana Judge: James K. Coachys Debtor's Counsel: KC Cohen, Esq. Email: kc@esoft-legal.com 151 N. Delaware St., Ste. 1104 Indianapolis, IN 46204 Tel: (317) 715-1845 Fax: (317) 916-0406 Total Assets: $3,100,000 Total Debts: $2,400,000 Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hamilton County Treasurer taxes paid in Unknown 33 N. 9th Street, Ste. 112 arrears Noblesville, IN 46060 Hamilton County Treasurer taxes paid in arrears unknown 33 N. 9th Street, Ste. 112 Noblesville, IN 46060 BUCKINGHAM CDO: Two Classes of Notes Get Moody's Rating Downgrades ------------------------------------------------------------------ Moody's Investors Service downgraded and placed these notes issued by Buckingham CDO III Ltd. on review for possible downgrade: Class Description: Up to $1,350,000,000 Class A ST Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: Up to $1,350,000,000 Class A LT Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $67,500,000 Class B Secured Floating Rate Notes Due 2051 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $37,500,000 Class C Secured Floating Rate Notes Due 2051 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $21,000,000 Class D Deferrable Floating Rate Notes Due 2051 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: C Class Description: $13,500,000 Class E Deferrable Floating Rate Notes Due 2051 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C In addition, Moody's also announced tthat it has withdrawn the short term rating on these notes: Class Description: $1,350,000,000 aggregate Principal Component of commercial paper notes (the "CP Notes") -- Prior Rating: P-1, on review for possible downgrade -- Current Rating: WR According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. The ratings assigned to the CP Notes have been withdrawn because the CP Notes failed to be successfully remarketed on their maturity date and were converted into Class A ST Notes issued by the Issuer. C-BASS CBO: Poor Credit Quality Prompts Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for further possible downgrade the ratings on these notes issued by C- BASS CBO XVIII Ltd.: Class Description: $346,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $150,000,000 Class A-2 First Priority Senior Secured Fixed Rate Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Addionally, Moody's downgraded these notes: Class Description: $46,500,000 Class B Second Priority Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca Class Description: $12,700,000 Class C Third Priority Secured Floating Rate Deferrable Interest Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $17,800,000 Class D Fourth Priority Secured Floating Rate Deferrable Interest Notes Due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CA LA ELECTRICIDAD: Fitch Upgrades Foreign and Local IDR to BB- --------------------------------------------------------------- Fitch Ratings has upgraded both the Foreign Currency and Local Currency Issuer Default Ratings for C.A. La Electricidad de Caracas to 'BB-' from 'B+.' In addition, Fitch has assigned a 'BB-' rating to the proposed issuance of up to US$650 million senior unsecured notes due 2018 to be issued by EDC. Fitch has upgraded the long-term national scale rating of EDC to 'AAA(ven)' from 'AA-(ven)' and the short- term national scale rating to 'F1+(ven)' from 'F1(ven)'. The Rating Outlook remains Negative. The upgrade is based upon the implicit support from both PDVSA and the government in the form of investment assistance, access to foreign currency and government assistance with capital expenditure programs. EDC is inextricably linked to both its new majority shareholder, Petroleos de Venezuela S.A. and the Bolivarian Republic of Venezuela (ultimate shareholder). PDVSA currently owns 93.62% of EDC. It is important to underscore that the upgrade is based upon new ownership and support by the Venezuelan government and PDVSA. On a standalone basis, EDC's leverage can be expected to increase, and tariff increases in 2008 are uncertain. In addition, the adverse effects of inflation and currency devaluation could be expected to continue. Since the nationalization of the Venezuelan electricity sector, EDC's senior management is now comprised of senior PDVSA management. The company has retained most operating level management from its prior ownership under U.S.-based AES Corporation. New PDVSA management has also provided high level government access that EDC didn't have under its prior AES ownership. Based on the Decree No 5,330, EDC and the rest of government electric power and energy assets will be part of the National Electric Corporation by the year 2010. Even if some changes on the property could be in place by that time, the ultimate shareholder of the company will continue being the Venezuelan government. EDC will, as expected, begin to pay dividends to PDVSA in the near term. Fitch anticipate a payout ratio in the 90% to 100% range to PDVSA. Unlike PDVSA, EDC will not be expected to make payments dedicated toward Venezuelan social programs. If any contributions toward social programs are made, such contributions are expected to be modest. EDC is a natural monopoly with high barriers to entry. EDC is a vertically integrated electricity company in Venezuela with operations in generation, transmission and distribution of electricity services to the metropolitan Caracas area. The company has over a 100-year history of supplying energy and of operational stability and efficiency. Since the nationalization, the electricity sector is undergoing significant transition. The sector is still operating under the regulatory framework that established the last tariff increase in 2003. In the government's attempt to curb inflation, the sector has not received a tariff increase which is adversely impacting infrastructure due to lack of investment. EDC's decrease in revenues and cashflow is primarily due to the lack of tariff increase. Even if the company anticipates some tariff increase in the near tern, that tariff increase is still uncertain. The adverse effects of inflation and currency devaluation are significant and mitigate any growth in sales. The ratings also incorporate the many adverse economic and political challenges that have pressured the credit quality of the company and Venezuelan sovereign including increasing inflation, currency devaluation and a high dependence on the petroleum sector. CALIFORNIA OIL: Posts $308,686 Net Loss in 1st Qtr. Ended Feb. 29 ----------------------------------------------------------------- California Oil & Gas Corp. reported a net loss of $308,686 for the first quarter ended Feb. 29, 2008, compared with a net loss of $127,854 for the same period last year. The company generated oil and gas revenues, net of royalties, of $41,043 for the three month period ended Feb. 29, 2008. There were no revenues generated in the first quarter of fiscal 2007. At Feb. 29, 2008, the company's balance sheet showed $1,077,051 in total assets, $886,340 in total liabilities, and $190,711 in total stockholders' equity. The company's balance sheet at Feb. 29, 2008, also showed strained liquidity with $167,395 in total current assets available to pay $886,340 in total current liabilities. Full-text copies of the company's financial statements for the first quarter ended Feb. 29, 2008, are available for free at: http://researcharchives.com/t/s?2afd Going Concern Disclaimer LBB & Associates Ltd., LLP in Houston, Texas, expressed substantial doubt about California Oil & Gas Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Nov. 30, 2007. The auditing firm pointed to the company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2008. Through Feb. 29, 2008, the company has incurred losses of $3,800,558 since inception. The company believes that it will require approximately $5,719,000 to fund its continued operations and working capital deficiency for the 12 month period ending April 30, 2009. As the company cannot assure a lender that it will be able to successfully acquire, explore and develop oil and gas properties, it may have difficulty raising debt financing from traditional lending sources. About California Oil Headquartered in Calgary, Alberta, California Oil & Gas Corp. (OTC BB: COGC) -- http://www.caloilandgas.com/-- is a publicly traded oil and gas company with assets in the San Joaquin Basin of California and in Louisiana. The company is focussed on exploring high yield oil and gas prospects both domestically and internationally. The company is a gas producer and is targeting the acquisition of late stage exploration or early stage development projects around the globe. CAPCO AMERICA: Fitch Lowers DR Rating to C/DR6 from C/DR5 --------------------------------------------------------- Fitch Ratings downgraded and lowered the Distressed Recovery rating on CAPCO America Securitization Corp.'s commercial mortgage pass-through certificates, series 1998-D7 as: -- $7.1 million class B-5 to 'C/DR6' from 'C/DR5'. In addition, Fitch placed these classes on Rating Watch Negative: -- $15.6 million class B-3 at 'BB+'; -- $24.9 million class B-4 at 'B-'. Fitch affirmed these classes: -- $393.4 million class A-1B at 'AAA'; -- Interest-only class PS-1 at 'AAA'; -- $62.3 million class A-2 at 'AAA'; -- $68.5 million class A-3 at 'AAA'; -- $59.2 million class A-4 at 'AAA'; -- $21.8 million class A-5 at 'AAA'; -- $31.1 million class B-1 at 'AA-'; -- $28 million class B-2 at 'BBB+'. Fitch did not rate the class B-6 and B-6H certificates which have been reduced to zero based on realized losses. The class A-1A class has been paid in full. The lowering of the DR rating is due to expected losses on the specially serviced assets (7.4%). The ratings watch negative placement is due to the recent transfer to the special servicer of the third largest non-defeased loan in the pool, Eastland Mall (5.5%). The ratings of classes B-3 and B-4 will be revisited once further information, including an updated value and workout strategy, on the Eastland Mall becomes available. The affirmations are due to sufficient credit enhancement as the result of paydown and defeasance. Sixty-seven loans (38.1%) have defeased since issuance, including four of the top five loans (19.6%). As of the April 2008 distribution date, the pool has been reduced 40.5% to $716.1 million from $1.25 billion at issuance. Eastland Mall (5.5%) is collateralized by 371,512 square feet of in-line space in a 1.1 million SF enclosed mall located in Charlotte, North Carolina. The loan transferred to special servicing in March 2008 due to imminent default. The borrower, an entity controlled by Glimcher Realty Trust, and the special servicer are currently discussing workout options. Updated appraised values are not available. The property has seen significant occupancy declines since issuance and the anchor owned JC Penney and Belk's spaces are currently dark. The second largest specially serviced loan (0.8%) is collateralized by a manufactured housing community in Greenwood, Indiana. The loan transferred to special servicing in March 2008 due to imminent default. Occupancy at the property as of September 2007 was 45%. The third largest specially serviced asset (0.8%) is an industrial/mixed use property located in Baltimore, Maryland and is real estate owned. The property is listed for sale and the special servicer is currently evaluating purchase offers. Based on recent appraised values, losses are expected on the specially serviced properties. Fitch Loans of Concern total 12.6% of the collateral balance and include the five specially serviced loans. CENTENE CORP: S&P Cuts Credit Rating to BB- from BB; Removes Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its counterparty credit rating on Centene Corp. to 'BB-' from 'BB' and removed it from CreditWatch, where it was placed on March 19, 2008, with negative implications. Standard & Poor's also said that the outlook on Centene is stable. "We lowered the rating one notch because of Centene's full-year 2008 operating performance, which will likely be lower than our prior expectations," explained Standard & Poor's credit analyst Hema Singh. This is mainly attributable to adverse claim development in certain products and geographies, including higher- than-budgeted medical costs in the Ohio aged, blind, and disabled population. Other factors that hurt the company's performance include the harsher-than-expected flu season and lower investment income. S&P also believe that Centene's earnings profile has diminished in recent years because of a combination of lower-than-expected profitability linked to a moderately higher medical loss ratio relative to plan as well as charges for impairments and re-scaling initiatives. The company has made several acquisitions to grow its core business in the past few years. As revenue growth has increased, the ROR has decreased and is now at a level that is lower than the historical level, prior expectations, and that of its peers. Centene's adjusted pretax return on revenue (ROR) for 2008 will likely be about 3.3%, and we expect its three-year (2006-2008) average ROR to be about 3.2%. Centene's statutory capital and surplus base should keep pace with the underlying insurance risk or grow moderately, but it is very likely that it will be qualitatively pressured because of double- leverage considerations. If Centene were to have a material shortfall in operating performance relative to expectations (an ROR less than the three-year average of about 3%) or significantly reduce its level of statutory capital, S&P could revise the outlook to negative or lower the rating again. CERAMIC PROTECTION: Bank Extends Loan Maturity, Waives Pact Terms ----------------------------------------------------------------- Ceramic Protection Corporation reports that effective April 11, 2008, the corporation successfully amended its credit agreement with Canadian Imperial Bank of Commerce. This amending agreement extends the maturation of the corporation's credit facilities until June 30, 2008 and waives loan covenant requirements as at March 31, 2008. Additionally, the amending agreement requires a $2.0 million term loan principal payment on May 1, 2008 with the remaining $0.9 million term loan and operating line of credit principal due on June 30, 2008. The corporation continues to negotiate with potential new lenders and expects to refinance its fully collateralized operating line of credit prior to the June 30, 2008 maturation date. Headquartered in Calgary, Alberta, Ceramic Protection Corporation (TSE:CEP) -- http://www.cerpro.com/-- designs, manufactures and markets products used to provide ballistic protection for personnel and vehicles in the military and law enforcement markets. The company's product portfolio includes lightweight ceramic armor for vehicles and military personnel, composite-based products and concealable soft body armor products for law enforcement, and the Modular Tactical Vest ballistic system for military personnel. CPC Holding Corporation of America, Ceramic Protection Corporation of America, Protective Products International Corporation and Protective Products of North Carolina, LLC are the direct and indirect subsidiaries of the company. CETUS ABS: Moody's Junks Ratings on Four Classes of 2046 Notes -------------------------------------------------------------- Moody's Investors Service downgraded ratings of four classes of notes issued by Cetus ABS CDO 2006-1, Ltd. and left on review for possible downgrade the rating of one of these classes of notes. The classes affected by this rating action are: Class Description: $100,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2046 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $55,000,000 Class B Deferrable Subordinate Secured Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $40,00,000 Class C Deferrable Junior Subordinate Secured Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: $30,00,000 Class D Deferrable Junior Subordinate Secured Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C Cetus ABS CDO 2006-1, Ltd. is a collateralized debt obligation backed by structured finance securities. The rating actions taken reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence on April 7, 2008, as reported by the Trustee, of an event of default caused when the Net Outstanding Portfolio Collateral Balance plus the MVS Account Excess as of a Determination Date is less than the sum of the Remaining Unfunded Notional Amount plus the outstanding Swap Counterparty Amount plus the Aggregate Outstanding Amount of the Class A-1 Notes, as set forth in Section 5.1(h) of the Indenture dated July 20, 2006. As provided in Article 5 of the Indenture, during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Secured Notes and the Collateral. In this regard, Moody's has received notification from the Trustee that on April 9, 2008 a majority of the Controlling Class has declared the principal of and all accrued and unpaid interest on the Secured Notes to be immediately due and payable. The rating downgrades taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of further remedies, if any, to be pursued following the event of default. Because of this uncertainty, the ratings assigned to the Class A-1 Notes remain on review for possible further action. CHARLES FORT: Moody's Cuts Rating on $220 Mil. Notes to B3 From A3 ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Charles Fort CDO I, Ltd.: Class Description: $220,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $60,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $50,000,000 Class B Third Priority Senior Secured Floating Rate Notes due 2047 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $24,000,000 Class C Fourth Priority Mezzanine Secured Floating Rate Deferrable Interest Notes due 2047 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $6,000,000 Class D-1 Fifth Priority Mezzanine Secured Floating Rate Deferrable Interest Notes due 2047 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: C Class Description: $13,000,000 Class D-2 Sixth Priority Mezzanine Secured Floating Rate Deferrable Interest Notes due 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: $10,000,000 Class E Seventh Priority Mezzanine Secured Floating Rate Deferrable Interest Notes due 2047 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CHRISTOPHER WRENN: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Christopher Benjamin Wrenn Allison Owens Wrenn 130 North Ennis Street Fuquay Varina, NC 27526 Bankruptcy Case No.: 08-02605 Chapter 11 Petition Date: April 17, 2008 Court: Eastern District of North Carolina (Wilson) Judge: A. Thomas Small Debtor's Counsel: Jason L. Hendren, Esq. Brady, Nordgren, Morton & Malone, PLLC 2301 Sugar Bush Road, Suite 450 Raleigh, NC 27612 Phone: 919 782-3500 Fax: 919 573-1430 E-mail: bwood@bradynordgren.com Estimated Assets: $10,000,001 to $50 million Estimated Debts: $10,000,001 to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ First State Bank potential deficiency $1,600,000 Attn: Managing Agent Lots 9-15 P.O. Box 1267 Oceanfront Scottsbluff, NE 69361 Oak Island, NC (Debtors surrender property) Contingent unliquidated disputed Bill Baumgarner Lots 9-15 Oceanfront 1,200,000 Oak Island, NC 28465 Contingent unliquidated disputed $5,600,000 secured $5,100,000 senior lien Gateway Bank Vacant Lot 927,000 Attn: Managing Agent Oak Island, NC 112 Corporate Drive 28465 Elizabeth City, NC27909 $750,000 secured Four Oaks Bank guaranty 800,000 Attn: Managing Agent Myrtle Grove Office P.O. Box 309 Building Four Oaks, NC27524 BB&T of NC Loan Cente potential guaranty 778,077 P. O. Box 58003 obligation Charlotte, NC 28258-0003 Lot 7 Oceanfront - CBW Development LLC 100% owner Oak Island, NC 28465 BB&T of NC Loan Center Lot 8 Oceanfront 778,007 P.O. Box 58003 CBW Development LLC Charlotte, NC 28258-0003 100% owner Oak Island, NC 28465 Four Oaks Bank 3321 West Beach 751,876 Attn: Managing Agent Drive P.O. Box 309 Oak Island, NC $635,000 secured First Federal unsecured 500,000 Attn: Managing Agent potential guaranty 200 East Divine St. obligation Dunn, NC 28334 Tier One Bank Lot 14 Second Row 447,182 Attn: Managing Agent Oak Island, NC P.O. Box 83009 28465 $420,000 secured Tier One Bank Lot 15 Second Row 447,182 Attn: Managing Agent Oak Island, NC P.O. Box 83009 28465 $420,000 secured First Federal 2006 38' Jupiter 299,388 Attn: Managing Agent Tournament Express 200 East Divine St. fishing boat Dunn, NC 28334 &nbs