/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080425.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, April 25, 2008, Vol. 12, No. 98 Headlines 4S DEVELOPMENT: First State Wants Chapter 11 Case Converted AAMES MORTGAGE: Adverse Pool Performance Cues S&P's Rating Cuts ABSC CERTIFICATES: Fitch Lowers Ratings on $168.3 MM Certificates ACE SECURITIES: Monthly Losses Cue S&P's Rating Cuts on 38 Classes ACT 2005-RR: Fitch Cuts Rating on $165.6 Mil. Certs. to B From AAA ACTION IN MAILING: Case Summary & 20 Largest Unsecured Creditors AIRTRAN HOLDINGS: Posts $34.8 Million Net Loss in 2008 First Qtr. ALOHA AIRLINES: Court OKs Division Sale to Pacific Air for $2 Mil. AMBAC FINANCIAL: Posts $1.6 Billion Net Loss in First Quarter 2008 AMDL INC: KMJ Corbin Expresses Going Concern Doubt AMERIQUEST MORTGAGE: 21 Tranches Get Moody's Rating Downgrades AMERIQUEST MORTGAGE: S&P Pares Ratings on Two Classes to Low-Bs AMPEX CORP: Dec. 31 Balance Sheet Upside Down by $107.135 Million ANTHRACITE 2005-HY2: Fitch Chips Rating on $58 Mil. Notes to 'B' ASSOCIATED ESTATES: S&P Keeps 'B+' Rating; Changes Outlook to Pos. ATARI INC: Special Committee Hires Duff & Phelps as Fin. Advisor AUTO UNDERWRITERS: Clancy and Co Expresses Going Concern Doubt AXS ONE: Amper Politziner Expresses Going Concern Doubt AZRA COMMERCIAL: Case Summary & 20 Largest Unsecured Creditors BLUE STONE: Voluntary Chapter 11 Case Summary BLUE WATER: Case Conversion Not Beneficial to Creditors, Ford Says BOSTON HILL: Court Dismisses Re-filed Chapter 11 Petition BRIGHT HORIZONS: Moody's Puts 'Ba3' Rating on Proposed Senior Loan BUFFETS INC: Moody's Attaches 'Ba3' Rating on $85 Mil. Super Loan CENTEX HOME: Moody's Cuts Nine Tranches' Ratings on Delinquencies CFM U.S.: Committee Wants Sale Bidding Procedures Amended CHART INDUSTRIES: S&P Gives Positive Outlook; Holds 'B+' Rating CIT GROUP: Prices $1BB Offering of Common Stock & Preferred Shares CIT HOME: S&P's Rating on Class BF Notes Tumble to 'D' From 'CCC' COMFORCE CORP: Repurchases $6.4 Million of 12% Senior Notes CORTS TRUST: S&P Upgrades Rating on $27 Mil. Securities to 'BB+' CRITICAL PATH: Burr Pilger Expresses Going Concern Doubt CROWN MEDIA: December 31 Balance Sheet Upside-Down by $684 Million CSAB MORTGAGE: High Delinquencies Cue Moody's 35 Rating Downgrades CFSB TRUSTS: Moody's Cuts Ratings on 100 Tranches From 14 Deals CSMC TRUSTS: Moody's Downgrades 46 Tranches' Ratings From 10 Deals CST INDUSTRIES: S&P Retains 'B+' Rating on $35 Mil. Loan Add-on CT CDO: Fitch Confirms Low-B Ratings on Five Classes of Notes CUSTOM DESIGNED: Case Summary & 19 Largest Unsecured Creditors COVENANT WORSHIP: Case Summary & 18 Largest Unsecured Creditors DANA CORP: Seeks Dismissal of Asbestos Claimants Appeal re Plan DANA CORP: UAW Supports $2.5MM Success Fee to Potoc and Co. DANKA BUSINESS: Plans to Distribute $6.5 Million to Shareholders DAN RIVER: Gets Initial Approval to Access $30 Million Facility DIASTAR INC: Lender Asks Court for Temporary Restraining Order DIOMED HOLDINGS: Committee Wants Goulston & Storrs as Counsel DIOMED HOLDINGS: Seeks OK to Hire Choate Hall as Local Counsel DIOMED HOLDINGS: Various Patent Suits Cost $11.82MM in Five years EASTMAN KODAK: S&P Changes Outlook to Stable; Holds 'B+' Rating EMI GROUP: Restructuring Continues Despite Contractual Hurdles EPIC CYCLE: Case Summary & 20 Largest Unsecured Creditors EQUIFIRST LOAN: Moody's Downgrades Ratings on Nine Tranches FIRST NLC: Higher Delinquency Rates Cues Moody's 25 Rating Cuts FORD CREDIT: Fitch Gives 'BB' Rating on $31.5 Mil. Class D Notes FORD MOTOR: Contests Conversion of Blue Water's Case to Chapter 7 FORD MOTOR: Earns $100 Million in First Quarter of 2008 FORD MOTOR: Jaguar & Land Rover Buyer Gets Antitrust Approval FORTUNOFF: New Case Caption Reflects Name Change to FFJS FRONTIER AIRLINES: Gets Interim OK to Employ Epiq Bankruptcy FRONTIER AIRLINES: May File Schedules and Statements Until June 24 GENERAL MOTORS: Reports 2.25MM Global Car Sales in 1st Qtr. 2008 G-FORCE 2005-RR2: Fitch Slashes Ratings on Nine Classes to Low-Bs G-FORCE 2005-RR: Fitch Maintains Low-B Ratings on Six Classes GMAC LLC: Lends $468 Million to ResCap to Provide Liquidity GMAC LLC: Risks to Liquidity Cue Moody's Rating Downgrade to 'B2' GOLDMAN SACHS: S&P Confirms 'BB+' Rating on Class B Notes HARBORVIEW MORTGAGE: S&P Downgrades Ratings on 15 Cert. Classes HD PARTNERS: Sets April 30 Distribution Record Date HENRICKS JEWELERS: Gets Court's OK to Use Lender's Cash Collateral HERBST GAMING: Moody's Junks Ratings on No Forebearance Agreement HOOP HOLDINGS: Taps Traxi to Provide Crisis Management Services INDYMAC TRUSTS: 165 Tranches From 46 Deals Get Moody's Rating Cuts INTEREP NATIONAL: Files Chapter 11 Plan And Disclosure Statement INTERSTATE BAKERIES: Knox County Opposes Tax Liability Reduction JEFFERIES GROUP: Fitch Downgrades Subordinated Debt Rating to BB+ JER CRE: Fitch Maintains 'B' Rating on $10 Mil. Class G Notes JOHN REYNEN: Files for Bankruptcy to Prevent Bank Foreclosure JOHN REYNEN: Case Summary & 20 Largest Unsecured Creditors JOY DYEING: Case Summary & 20 Largest Unsecured Creditors KURLEMANN BUILDERS: Creditor Wants Chapter 7 Case Dismissed LEHMAN ABS: Moody's Cuts Ratings on 12 Tranches From RMBS Deal LEVITT AND SONS: Given Until May 12 to File Chapter 11 Plan LNR CDO: Fitch Pares Ratings on $27.4 Mil. Class G Notes to 'BB' MARTINO & CARD: Case Summary & 20 Largest Unsecured Creditors MASTR TRUSTS: S&P Gives 'D' Rating on Four Classes of 2006 Certs. MAYFAIR POMONA: Case Summary & Four Largest Unsecured Creditors MCCLATCHY COMPANY: Posts $993K Net Loss in Quarter ended March 30 MCCLATCHY CO: Revenue Decline Prompts S&P to Chip Rating to 'BB-' MOVIDA COMMUNICATIONS: Operations to Continue Under New Owner NATIONSTAR HOME: High Delinquencies Cue Moody's 29 Rating Cuts NOMURA TRUSTS: S&P Downgrades Ratings on Class M-3 to 'CCC' NON-INVASIVE MONITORING: Posts $528,609 Net Loss in Second Qtr. NOR-SKI & SPORTS: Case Summary & 19 Largest Unsecured Creditors NOVASTAR MORTGAGE: 67 Tranches Get Moody's Rating Downgrades NT HOLDING: March 31 Balance Sheet Upside-Down by $200,780 ONE CARTER: Right, Title and Membership Interest for Auction May 7 PRIMEDIA INC: Appoints Charles Stubbs as President and CEO RANDY JONES: Voluntary Chapter 11 Case Summary RESIDENTIAL CAPITAL: Borrows $465MM from GMAC LLC to Add Liquidity RESIDENTIAL CAPITAL: Directors' Stepdown Cues Moody's Junk Rating RESTORE MEDICAL: Losses Prompt KPMG Expresses Going Concern Doubt REYNEN & BARDIS: Co-Founder Files for Personal Bankruptcy RYLAND GROUP: Posts $29.3 Million Net Loss in 2007 First Quarter SAIL TRUSTS: Moody's Cuts Ratings on 121 Tranches From 15 Deals SASCO TRUSTS: 226 Tranches Get Moody's Rating Cuts on Delinquency SBARRO INC: Moody's Keeps Low-B Ratings; Gives Negative Outlook SEA CONTAINERS: Fails to File Plan by April 15 Deadline SEQUIAM CORP: bioMETRX Starts Integration of Assets and Personnel SIX FLAGS: Fitch Keeps 'CCC' Rating on Senior Unsecured Notes STONEHOUSE SPE: Right, Title & Membership Interest for Sale May 7 TOPAZ POWER: Moody's Puts Ba3 Initial Rating on $740 Mil. Facility TOUSA INC: DIP Termination Date Extended Until May 8 UNITEDHEALTH GROUP: Earns $994 Million in Quarter ended March 31 UNIVERSAL HOSPITAL: Posts $64MM Net Loss in Year ended Dec. 31 VALLEY HEALTH: Fitch Downgrades Ratings on $79.5 Mil. Bonds VICTOR PLASTICS: Completes Sale to River Bend for $17.4 Million XM SATELLITE: Dec. 31 Balance Sheet Upside-Down by $984 Million * S&P Downgrades Ratings on Six Classes From Five RMBS Deals * Focus Management Selects Edmund King as Senior Consultant * Ernst & Young Integrates Worldwide Practices Under EMEIA Area * Southwest Healthcare Transactions Conference Set May 30 * BOOK REVIEW: Financial Planning for High Net Worth Individual ********* 4S DEVELOPMENT: First State Wants Chapter 11 Case Converted ----------------------------------------------------------- First State Bank of Altus, a creditor and party-in-interest, asks the Hon. A. Bruce Campbell of the United States Bankruptcy Court for the District of Colorado to dismiss 4S Development, Ltd., LLP's Chapter 11 case because it was filed in bad faith. First State Bank holds a promissory note of $9 million dated April 26, 2006, wherein $5 million was advanced to the Debtor. First State Bank declared on Aug. 16, 2007, that the note is in default after the Debtor failed to make a quarterly payment of $114,167. The note is secured by a deed of trust, which encumbers roughly 860 acres of unused property in Routt County, Colorado. The property is the Debtor's principal single substantial asset. Representing First State Bank, Virginia M. Dalton, Esq., at Pearlman & Dalton, P.C., in Denver, Colorado, says the Debtor filed its Chapter 11 case without plans to reorganize its financial affairs. The Debtor simply wanted to stop First State Bank's attempt to foreclose on the Debtor's property, Ms. Dalton says. First State Bank alleges that the Debtor is solvent by at least $70 million, with total debts of $5.6 million and total assets of $75.8 million pursuant to the Debtor's schedules and statements filed with the Court. About 4S Development Headquartered in Hayden, Colorado, 4S Development Ltd, LLP acquires and develops real estate. The company filed for Chapter 11 protection on Feb. 26, 2008 (Bankr.D.Co. Case No. 08-12162). Philipp C. Theune, Esq. at Theune Law Offices, P.C. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors it listed total assets of $75,825,498 and total liabilities of $5,684,487. AAMES MORTGAGE: Adverse Pool Performance Cues S&P's Rating Cuts --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the class B, M-1, and M-2 mortgage pass-through certificates from Aames Mortgage Trust 2002-1. Concurrently, S&P affirmed its ratings on the class A-3 and A-4 certificates from this transaction. The downgrades reflect continuous adverse pool performance. As of the March 2008 remittance period, this transaction had experienced cumulative losses of $7.013 million, or 4.01% of the original pool balance. Losses have outpaced excess interest in 10 of the past 12 months. Current overcollateralization is $807,169, 5.2x lower than the $4.20 million of loans that are seriously delinquent (90- plus days, foreclosures, and REOs). The affirmations reflect stable collateral performance as of the March 2008 remittance period. Current and projected credit support percentages are sufficient to support the ratings at their current levels. O/C, excess spread, and subordination provide credit enhancement for the classes in this transaction, except for the most subordinate class, which has no subordination. The collateral for this series consists of 30-year, fixed- or adjustable-rate subprime mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Aames Mortgage Trust 2002-1 Rating ------ Class To From ----- -- ---- M-1 AA AA+ M-2 BB BBB B CCC B Ratings Affirmed Aames Mortgage Trust 2002-1 Class Rating ----- ------ A-3, A-4 AAA ABSC CERTIFICATES: Fitch Lowers Ratings on $168.3 MM Certificates ----------------------------------------------------------------- Fitch Ratings has taken these rating actions on Asset Backed Securities Corporation asset-backed pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are now removed. Affirmations total $1.4 billion and downgrades total $168.3 million. Additionally, $8.8 million was placed on Rating Watch Negative. ABSC 2003-HE1 -- $29.8 million class M-2 affirmed at 'A'; -- $21.1 million class M-3 downgraded to 'CC/DR3' from 'B'; -- $0.7 million class M-4 revised to 'C/DR6' from C/DR5'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 27.06% -- Realized Losses to date (% of Original Balance): 2.42% ABSC 2003-HE2 Total -- $33.2 million class M-1 affirmed at 'AA'; -- $5.0 million class M-2 affirmed at 'A'; -- $1.5 million class M-3 affirmed at 'A-'; -- $2.4 million class M-4 downgraded to 'B' from 'BBB'; -- $1.4 million class M-5 downgraded to 'CCC/DR2' from 'BB'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 18.81% -- Realized Losses to date (% of Original Balance): 1.56% ABSC 2003-HE3 Total -- $34.5 million class M1 affirmed at 'AA'; -- $5.4 million class M2 downgraded to 'BBB' from 'A'; -- $1.8 million class M3 downgraded to 'BB+' from 'A-'; -- $2.6 million class M4 downgraded to 'B' from 'BB+'; -- $1.9 million class M5 downgraded to 'C/DR6' from 'B'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 30.45% -- Realized Losses to date (% of Original Balance): 1.51% ABSC 2003-HE4 TOTAL -- $57.8 million class M-1 affirmed at 'AA'; -- $21.0 million class M-2 affirmed at 'A'; -- $4.4 million class M-3 affirmed at 'A-'; -- $4.0 million class M-4 affirmed at 'BBB'; -- $3.9 million class M5-A downgraded to 'CC/DR2' from 'B'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 21.02% -- Realized Losses to date (% of Original Balance): 1.39% ABSC 2003-HE5 TOTAL -- $32.6 million class M1 affirmed at 'AA'; -- $10.9 million class M2 affirmed at 'A'; -- $2.1 million class M3 affirmed at 'A-'; -- $2.4 million class M4 downgraded to 'B' from 'BBB'; -- $2.3 million class M5 downgraded to 'CC/DR3' from 'B'; Deal Summary -- Originators: New Century (85%), ABFS (15%) -- 60+ day Delinquency: 18.25% -- Realized Losses to date (% of Original Balance): 1.73% ABSC 2003-HE6 TOTAL -- Notional Amount class A-IO affirmed at 'AAA'; -- $0.1 million class A1 affirmed at 'AAA'; -- $3.9 million class A2 affirmed at 'AAA'; -- $9.0 million class A3-B affirmed at 'AAA'; -- $49.3 million class M1 affirmed at 'AA'; -- $33.0 million class M2 affirmed at 'A'; -- $4.1 million class M3 affirmed at 'A-'; -- $2.9 million class M4 affirmed at 'BBB+'; -- $2.9 million class M5 rated 'BBB', placed on Rating Watch Negative; -- $2.9 million class M6 downgraded to 'CCC/DR2' from 'BBB-'; Deal Summary -- Originators: Option One (100%) -- 60+ day Delinquency: 17.12% -- Realized Losses to date (% of Original Balance): 1.13% ABSC Home Equity Loan Trust 2003-HE7 TOTAL -- $42.5 million class M1 affirmed at 'AA'; -- $37.5 million class M2 affirmed at 'A'; -- $8.2 million class M3 affirmed at 'A-'; -- $3.4 million class M4 affirmed at 'BBB+'; -- $2.7 million class M5 affirmed at 'BBB'; -- $2.7 million class M6 downgraded to 'B' from 'BBB-'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 10.86% -- Realized Losses to date (% of Original Balance): 1.19% ABSC Home Equity Loan Trust 2004-HE1 TOTAL -- $43.2 million class M1 affirmed at 'AA'; -- $18.8 million class M2 affirmed at 'A'; -- $2.2 million class M3 affirmed at 'A-'; -- $2.2 million class M4 affirmed at 'BBB+'; -- $2.3 million class M5 affirmed at 'BBB'; -- $2.2 million class M6 affirmed at 'BBB-'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 14.34% -- Realized Losses to date (% of Original Balance): 1.19% ABSC Home Equity Loan Trust, Series 2004-HE2 TOTAL -- $56.2 million class M1 affirmed at 'AA'; -- $39.9 million class M2 affirmed at 'A'; -- $3.6 million class M3 affirmed at 'A-'; -- $3.8 million class M4 affirmed at 'BBB+'; -- $2.0 million class M5A affirmed at 'BBB'; -- $1.2 million class M5B affirmed at 'BBB'; -- $3.5 million class M6 downgraded to 'B' from 'BBB-'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 18.19% -- Realized Losses to date (% of Original Balance): 1.43% Asset Backed Securities Corp. 2004-HE3 Total Pool -- $50.1 million class M1 affirmed at 'AA'; -- $40.3 million class M2 affirmed at 'A'; -- $4.8 million class M3 affirmed at 'A'; -- $2.8 million class M4 affirmed at 'A-'; -- $3.5 million class M5 affirmed at 'BB+'; -- $2.8 million class M6 affirmed at 'B'; -- $3.2 million class M7 downgraded to 'C/DR5' from 'CC/DR3'; Deal Summary -- Originators: Option One (100%) -- 60+ day Delinquency: 19.06% -- Realized Losses to date (% of Original Balance): 1.24% Asset Backed Securities Corp. Series 2004-HE5 TOTAL POOL -- $3.6 million class A-1 affirmed at 'AAA'; -- $0.4 million class A-1A affirmed at 'AAA'; -- $61.4 million class M-1 affirmed at 'AA'; -- $45.9 million class M-2 affirmed at 'A'; -- $13.5 million class M-3 affirmed at 'A'; -- $10.6 million class M-4 downgraded to 'BBB' from 'A-'; -- $7.9 million class M-5 downgraded to 'BBB-' from 'BBB+'; -- $3.0 million class M-6 downgraded to 'BB' from 'BBB'; -- $4.0 million class M-7 downgraded to 'B' from 'BB+'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 18.47% -- Realized Losses to date (% of Original Balance): 1.28% Asset Backed Securities Corporation 2004-HE6 TOTAL POOL -- $18.8 million class A-1 affirmed at 'AAA'; -- $26.3 million class A-2 affirmed at 'AAA'; -- $52.0 million class M-1 affirmed at 'AA'; -- $41.4 million class M-2 affirmed at 'A'; -- $11.5 million class M-3 downgraded to 'BBB' from 'A-'; -- $8.8 million class M-4 downgraded to 'BB+' from 'BBB+'; -- $7.9 million class M-5 downgraded to 'BB' from 'BBB'; -- $7.8 million class M-6 downgraded to 'B' from 'BB+'; -- $4.1 million class M-7 downgraded to 'B' from 'BB-'; Deal Summary -- Originators: New Century (85%), Argent (15%) -- 60+ day Delinquency: 29.87% -- Realized Losses to date (% of Original Balance): 2.33% Asset Backed Securities Corp. 2004-HE7 Total Pool -- $5.6 million class A1 affirmed at 'AAA'; -- $0.1 million class A2 affirmed at 'AAA'; -- $0.1 million class A4 affirmed at 'AAA'; -- $91.7 million class M1 affirmed at 'AA'; -- $52.0 million class M2 affirmed at 'A+'; -- $21.4 million class M3 affirmed at 'A'; -- $19.1 million class M4 affirmed at 'A'; -- $16.1 million class M5 affirmed at 'A-'; -- $15.3 million class M6 affirmed at 'BBB+'; -- $11.5 million class M7 affirmed at 'BBB'; -- $14.5 million class M8 affirmed at 'BBB-'; -- $5.9 million class M9 rated 'B', placed on Rating Watch Negative; Deal Summary -- Originators: New Century (67.69%), WMC (32.31%) -- 60+ day Delinquency: 19.23% -- Realized Losses to date (% of Original Balance): 1.35% Asset Backed Securities Corp. 2004-HE8 TOTAL -- $52.1 million class M-1 affirmed at 'AA+'; -- $55.5 million class M-2 affirmed at 'A'; -- $17.4 million class M-3 downgraded to 'BBB-' from 'A-'; -- $13.8 million class M-4 downgraded to 'BB' from 'BBB'; -- $5.0 million class M-5 downgraded to 'B+' from 'BB'; -- $3.3 million class M-6 downgraded to 'B' from 'BB-'; -- $3.4 million class M-7 downgraded to 'C/DR6' from 'B+'; Deal Summary -- Originators: New Century (100%) -- 60+ day Delinquency: 36.45% -- Realized Losses to date (% of Original Balance): 1.15% ABSC Home Equity Loan Trust, Series 2004-HE10 -- $10.5 million class M-1 affirmed at 'AA+'; -- $11.4 million class M-2 affirmed at 'AA'; -- $12.6 million class M-3 affirmed at 'A'; -- $6.1 million class M-4 affirmed at 'BBB+'; -- $2.3 million class M-5 affirmed at 'BBB'; -- $2.8 million class M-6 affirmed at 'BBB-'; -- $2.3 million class M-7 downgraded to 'B' from 'BB+'; Deal Summary -- 60+ day Delinquency: 19.07% -- Realized Losses to date (% of Original Balance): 1.61% ACE SECURITIES: Monthly Losses Cue S&P's Rating Cuts on 38 Classes ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 38 classes of mortgage pass-through certificates issued by seven Ace Securities Corp. Home Equity Loan Trust and Specialty Underwriting and Residential Finance Trust series. Concurrently, S&P placed its ratings on four classes on CreditWatch with negative implications and affirmed its ratings on all remaining classes from these seven transactions. The lowered ratings reflect adverse collateral performance that has caused monthly losses to exceed monthly excess interest. As of the March 2008 remittance period, cumulative losses, as a percentage of the original pool balances, ranged from 1.29% (Ace Securities Corp. Home Equity Loan Trust Series 2004-HE2) to 5.43% (Ace Securities Corp. Home Equity Loan Trust Series 2004-HE1). Overcollateralization has been reduced to zero in all seven transactions. The delinquency pipeline in these transactions strongly suggests that monthly losses will continue to exceed excess interest, thereby further compromising credit support. Severe delinquencies (90-plus days, foreclosures, and REOs) for the downgraded transactions, as a percentage of the current pool balances, ranged from 19.64% (Specialty Underwriting and Residential Finance Trust Series 2005-AB1) to 42.26% (Ace Securities Corp. Home Equity Loan Trust Series 2005-HE2). These deals are seasoned between 30 months (Ace Securities Corp. Home Equity Trust Series 2005-HE6 and Specialty Underwriting and Residential Finance Trust Series 2005- BC3) and 48 months (Ace Securities Corp. Home Equity Loan Trust Series 2004-HE1). S&P placed its ratings on four classes from ACE Securities Corp. Home Equity Loan Trust Series 2005-HE6 on CreditWatch negative. While each of these certificate classes currently lacks what S&P believes to be a sufficient amount of credit enhancement relative to projected losses, S&P will not take further rating actions until S&P has completed additional analysis on each of the affected classes. S&P expects to compare the date of projected defaults with the date of payment in full and evaluate the relationships between projected credit support and projected losses throughout the remaining life of the certificates. S&P affirmed its ratings on the remaining classes from these seven series based on loss coverage percentages that are sufficient to maintain the current ratings despite the negative trends in the underlying collateral for many of the deals. Subordination and excess spread provide credit support for all of the affected deals. The collateral for these transactions primarily consists of subprime, adjustable- and fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Ace Securities Corp. Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-HE3 M-3 A AA- 2005-HE3 M-4 BBB A+ 2005-HE3 M-5 BBB- A 2005-HE3 M-6 BB- BBB+ 2005-HE3 M-7 B- BB+ 2005-HE3 M-8 CCC BB 2005-HE3 M-9 CCC BB- 2005-HE3 B-1 CCC B 2005-HE3 B-2 D CCC 2004-HE1 M-2 A AA 2004-HE1 M-3 BBB- A 2004-HE1 M-4 B BBB 2004-HE1 M-5 CCC B 2004-HE1 M-6 D CCC 2004-HE2 M-3 A A+ 2004-HE2 M-4 BBB A 2004-HE2 M-5 BB A 2004-HE2 M-6 B A- 2004-HE2 B-1 CCC B 2004-HE2 B-2 D CCC 2005-HE2 M-6 BBB- A 2005-HE2 M-10 CCC B- 2005-HE2 B-2 D CCC 2005-HE6 M-5 BBB- BBB+ 2005-HE6 M-6 BB BB+ 2005-HE6 M-8 B BB- 2005-HE6 M-9 B- B 2005-HE6 M-10 CCC B- 2005-HE6 B-2 D CCC Specialty Underwriting and Residential Finance Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-AB1 M-4 BBB A- 2005-AB1 B-1 BB BBB+ 2005-AB1 B-2 CCC BB- 2005-AB1 B-3 D CCC 2005-BC3 M-5 BBB A+ 2005-BC3 M-6 BBB- A 2005-BC3 M-7 BB BBB 2005-BC3 B-2 B- B 2005-BC3 B-4 D CCC Ratings Placed on CreditWatch Negative Ace Securities Corp. Home Equity Loan Trust Rating ------ Series Class To From ------ ----- -- ---- 2005-HE6 M-1 AA+/Watch Neg AA+ 2005-HE6 M-2 AA/Watch Neg AA 2005-HE6 M-3 AA/Watch Neg AA 2005-HE6 M-4 AA-/Watch Neg AA- Ratings Affirmed Ace Securities Corp. Home Equity Loan Trust Series Class Rating ------ ----- ------ 2005-HE3 A-1A AAA 2005-HE3 A-1B AAA 2005-HE3 A-2C AAA 2005-HE3 M-1 AA+ 2005-HE3 M-2 AA 2004-HE1 M-1 AAA 2004-HE2 M-1 AA+ 2004-HE2 M-2 AA 2005-HE2 M-1 AA+ 2005-HE2 M-2 AA 2005-HE2 M-3 AA- 2005-HE2 M-4 A+ 2005-HE2 M-5 A+ 2005-HE2 M-7 BB 2005-HE2 M-8 BB- 2005-HE2 M-9 B 2005-HE2 B-1 CCC 2005-HE6 A-1 AAA 2005-HE6 A-2B AAA 2005-HE6 A-2C AAA 2005-HE6 A-2D AAA 2005-HE6 M-7 BB 2005-HE6 B-1 CCC 2005-HE6 M-11 CCC Specialty Underwriting and Residential Finance Trust Series Class Rating ------ ----- ------ 2005-AB1 A-1B AAA 2005-AB1 A-1C AAA 2005-AB1 M-1 AA+ 2005-AB1 M-2 AA 2005-AB1 M-3 A 2005-BC3 A-1A AAA 2005-BC3 A-2B AAA 2005-BC3 A-2C AAA 2005-BC3 M-1 AAA 2005-BC3 M-2 AA+ 2005-BC3 M-3 AA 2005-BC3 M-4 AA- 2005-BC3 B-1 B 2005-BC3 B-3 CCC ACT 2005-RR: Fitch Cuts Rating on $165.6 Mil. Certs. to B From AAA ------------------------------------------------------------------ Fitch Ratings downgraded three classes of ACT 2005-RR Depositor Corp. series 2005-RR, commercial mortgage-backed securities pass- through certificates: -- $225 million class A-1FL to 'BBB' from 'AAA'; -- $118 million class A-2 to 'BB' from 'AAA'; -- $165.6 million class A-3 to 'B' from 'AAA'. Additionally, Fitch has removed all downgraded classes from Rating Watch Negative, where they were originally placed on Jan. 16, 2008 and Dec. 12, 2007. The $294.7 million Retained Certificates are not rated by Fitch. ACT 2005-RR is backed by commercial mortgage-backed securities B- pieces and closed Nov. 9, 2005. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. CWCapital Investment LLC selected the initial collateral and serves as the collateral administrator. The collateral for this ReREMIC 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 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 ReREMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. The specific credit characteristics that are factored into Fitch's rating review are discussed below. ACT 2005-RR is collateralized by all or a portion of 135 classes of fixed-rate CMBS in 42 separate underlying transactions. All performance and collateral information is based on the March 24, 2008 trustee report and discussions with the collateral administrator. The pool's obligor diversity is considered above- average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1998 to 2004 (an average of 5.9 years of seasoning). Approximately 63.1% of the collateral is currently rated below 'B-' or not rated, and, therefore, is more susceptible to losses in the near-term. This concentration is one of the highest of all CMBS B-piece resecuritizations rated by Fitch. Overall, a significant portion of the collateral is below investment grade with only 1.8% investment grade. ACT 2005-RR holds 3.2% in the 'BB' category and 31.8% in the 'B' category. The collateral has realized $250.8 million in losses to date, which represents 23.8% of the original collateral. Based on the original below 'B-' balance of $723.2 million, this loss rate equates to a 34.7% loss rate on the below 'B-' collateral, which is higher than other CMBS B-piece resecuritizations rated by Fitch. Additional losses are projected with $277.1 million of the underlying collateral currently 60 days or more delinquent, according to the current trustee report. ACTION IN MAILING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Action in Mailing, Inc. 2511 Midpark Rd. Montgomery, AL 36109 Tel: (334) 286-4667 Bankruptcy Case No.: 08-30664 Type of Business: The Debtor is a full service direct mail lettershop and presort service bureau. See http://www.actioninmailing.com/ Chapter 11 Petition Date: April 18, 2008 Court: Middle District of Alabama (Montgomery) Judge: Dwight H. Williams Jr. Debtor's Counsel: Max A. Moseley, Esq. Email: mam@jbpp.com Johnston Barton Proctor & Rose, LLP 569 Brookwood Village, Ste. 901 Birmingham, AL 35209 Tel: (205) 458-9400 Fax: (205) 458-9500 http://www.jbpp.com/ Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Industrial Partners $100,701 P.O. Box 1668 Montgomery, AL 36102 Eastman Kodak Co. $50,472 P.O. Box 640350 Pittsburgh, PA 15264-0350 Kelly Temporary Services $50,053 P.O. Box 530437 Atlanta, GA 30353-0437 American Express $36,689 Bell & Howell $27,667 Travelers $26,761 UPS $26,511 The Quantre Group $23,296 Bell & Howell Co. $11,480 Pat Parvin $11,206 Virtual Systems $10,000 Buskro USA, Ltd. $9,964 Dell Account Credit Plan $9,512 Alabama Power $8,887 Ace Expediters $6,250 Wilson Price Barranco $5,825 Eagle Business Systems $5,435 Ryder Transportation Services $5,119 ABS Business System of $4,971 Montgomery Bellsouth Advertising $4,590 AIRTRAN HOLDINGS: Posts $34.8 Million Net Loss in 2008 First Qtr. ----------------------------------------------------------------- AirTran Holdings Inc., the parent company of AirTran Airways Inc., announced Tuesday its financial results for the first quarter ended March 31, 2008. The company reported a net loss of $34.8 million for the first quarter. During the same quarter in 2007, AirTran reported net income of $2.2 million. This quarter's loss is attributable to the effects of record high fuel costs. First quarter traffic rose by 19.2% on a 10.8% increase in capacity, resulting in a first quarter load factor of 75.3%, a 5.2 point increase over 2007. Revenues for the first quarter grew 18.3% to $596.4 million, and passenger unit revenue increased 6.9% to $0.0982, compared with revenues of $478.6 million, and passenger unit revenue of $0.0919 during the first quarter of 2007. The average price per gallon of fuel increased 49.3% to $3.00 in the first quarter compared to $2.01 in the first quarter of 2007. Total fuel expense was $268 million, up $102 million from the prior year. During the first quarter, AirTran realized $4.1 million of hedging gains which reduced fuel expense. The quarter also includes non-operating expense of $5.2 million pertaining to unrealized net losses on certain fuel related derivative financial instruments. At quarter end, the estimated net asset fair value of AirTran's fuel related derivative financial instruments was $17.3 million, including unrecognized gains of $13 million. Going forward the company has increased its fuel hedge positions to cover approximately 50% of its fuel needs for the remainder of the year. "Despite record revenues, record high fuel costs remain a tremendous challenge for all airlines," said Bob Fornaro, AirTran Airways' president and chief executive officer. "We remain committed to serving our customers, reducing costs and profitably managing our company going forward. We are proud that AirTran Airways Crew Members have maintained our focus on a high operational and service standard while achieving the number one ranking in the 2008 Airline Quality Rating report. By focusing on what we do and doing it better than anyone else, AirTran Airways will continue to be well positioned for the future." "Advanced bookings for the summer look very strong, however, we are nonetheless concerned with the continued rise in fuel prices, particularly towards the end of this year" said Kevin Healy, senior vice president of marketing and planning. "Given the current environment we will execute on a plan that will result in the suspension of our growth plans beginning in September 2008 and continuing at least through 2009. We will remain focused on positioning ourselves to be successful in a high fuel environment by reducing costs and improving efficiencies. "At the same time we will continue our focus on increasing unit revenues, introducing more ancillary revenue programs, such as the optional advance seat assignment fees, and maximizing the revenue production associated with our A+ Rewards frequent flier program." Recent highlights of AirTran Airways' accomplishments in the first quarter and to date include: -- Added four new Boeing 737-700 aircraft, which increased our 737 fleet to 54 aircraft and total fleet to 141 aircraft. -- Initiated service to San Juan, Puerto Rico, on March 5. -- Announced the commencement of service to Burlington, Vt., on May 21, and San Antonio, Texas, on June 11. -- Announced additional nonstop flights between Milwaukee, Wis., and Washington D.C., effective in May. -- Announced expansion of Baltimore/Washington service with the addition of new nonstop flights to Los Angeles, Calif. and additional flights to Seattle, Wash. and Portland, Maine. Liquidity and Capital Resources At March 31, 2008, the company had total cash, cash equivalents, and short-term investments of $349.7 million, which is an increase of $31.7 million compared to Dec. 31, 2007. As of March 31, 2008, the company also had $28.4 million of restricted cash and $8.2 million of long-term investments. Total long-term debt and capital leases, including current maturities were approximately $1.14 billion of which $1.01 billion was aircraft related secured indebtedness. Operating activities during the first quarter of 2008 provided $69.3 million of cash flow compared to $99.0 million during the analogous period in 2007. The net loss for the first quarter of 2008 negatively impacted cash provided by operating activities. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $2.198 billion in total assets, $1.783 billion in total liabilities, and $415 million in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $521 million in total current assets available to pay $619 million in total current liabilities. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2b11 About AirTran Holdings 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 58 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: Court OKs Division Sale to Pacific Air for $2 Mil. ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Hawaii approved the sale of Aloha Airlines Inc.'s contract services operations to Los Angeles-based Pacific Air Cargo, various reports say. Early this week, Pacific Air won the bid for the division by putting $2 million on the table, topping Saltchuk Resources Inc.'s bid, relates the Star Bulletin. 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 Saltchuk Resources walked away from the auction after its bid had been topped. 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. AMBAC FINANCIAL: Posts $1.6 Billion Net Loss in First Quarter 2008 ------------------------------------------------------------------ Ambac Financial Group, Inc. disclosed a first quarter 2008 net loss of $1.6 billion. This compares to first quarter 2007 net income of $213.3 million. The first-quarter result was primarily affected by non-cash, mark-to-market losses on credit derivative exposures amounting to $1.7 billion in the first quarter 2008 driven by the continued disruption in the global credit markets impacting the fair value of Ambac's derivatives exposures during the quarter. The decrease was also caused in part by the current quarter's loss provision on Ambac's financial guarantee direct exposures to mortgage-related securities which amounted to $1.0 billion, as well as by other than temporary impairment charges on certain investment securities within the financial services investment portfolio. Shares Tumble 43% The Wall Street Journal reports that the release of Ambac's first quarter financials, which disclosed its $1.6 billion loss, spurred Ambac's shares to drop 43% to $3.46 on Wednesday. Investors are now concerned on the company's AAA credit rating. Mark-to-Market Loss The $1.7 billion first quarter 2008 mark-to-market loss on credit derivative exposures includes estimated credit impairment of $940.4 million related to certain collateralized debt obligations of asset-backed securities backed primarily by residential mortgage-backed securities. An estimate for credit impairment has been established because it is management's expectation that Ambac will have to make claim payments on these exposures in the future. Operating earnings2 in the first quarter 2008 includes the impact of the estimated $940.4 million credit impairment. "The housing market crisis continues to disrupt the global credit markets and our credit derivatives and direct mortgage portfolios were severely impacted once again," Michael A. Callen, Chairman and interim Chief Executive Officer, said. "While we realize that these are disappointing credit results, we continue to believe that the capital raise and strategic business actions taken during the quarter will enable us to get beyond this credit market. The capital that we raised during the quarter in the midst of a very difficult market plus capital generated from the reduction in net par exposure helped bring our claims-paying resources to approximately $16.0 billion as of March 31, 2008. We currently exceed S&P's AAA target level of capital by a comfortable margin and we expect to meet our goal of exceeding Moody's Aaa target level of capital in the second quarter. Importantly, we generated positive operating cash flow during the quarter." "Our team of professionals is working hard on restoring market faith in the Ambac brand and we have recently started to see some business come our way in the municipal markets," Mr. Callen continued. "We feel strongly that our highly qualified professionals worldwide, our significant size and scale, and our expertise in select market sectors will result in new business opportunities." As previously reported, Ambac has written very little business since late 2007 as fixed income investors awaited the results of rating agency reviews and resultant actions. In the U.S. municipal market issuance was down 22% quarter on quarter. Market penetration declined from approximately 52% a year ago to approximately 27% in the current quarter. Subsequent to Ambac's successful $1.5 billion capital raise in early March, Ambac's ratings remain on "negative outlook" and issuers seeking insurance have thus far opted to insure with competitors with stable triple- A ratings. During the first quarter 2008, Ambac suspended underwriting all structured finance business for six months in order to accumulate capital. Global infrastructure, private finance initiative transactions and privatization transactions which finance essential infrastructure are not considered structured finance and are therefore not subject to the six month suspension of underwriting. Also, in the student loan sector, transactions issued by state and local government agencies and nonprofit issuers are not subject to the six month suspension of underwriting. The structured finance business written during the quarter relates to transactions that closed and transactions to which Ambac had committed prior to the announcement of suspension of underwriting. During the first quarter 2008, Ambac disclosed that it would discontinue writing new Financial Services business as part of its capital preservation strategy. The interest rate swap and investment agreement businesses will be run off. In the process of doing so, we expect to execute hedging transactions to mitigate risks in the respective books of business. Such hedging transactions may include execution of new investment agreement transactions whereby the proceeds of such new transactions would be invested in assets selected to improve duration matching of the investment agreement business assets and liabilities or to improve the cash flow profile of the portfolio. Balance Sheet Total assets as of March 31, 2008 were $24.93 billion, up 6% from total assets of $23.57 billion at December 31, 2007. The increase was primarily driven by cash generated from the capital raise in March and from an increase in the deferred tax asset, partially offset by the increase in net unrealized losses in the investment portfolio. The increased net unrealized losses are primarily due to credit spread widening in highly rated asset-backed securities within the investment agreement investment portfolio. As of March 31, 2008, stockholders' equity was $1.30 billion, a 43% decrease from year-end 2007 stockholders' equity of $2.28 billion. The decrease was primarily the result of the net loss reported for the period and the increase in net unrealized losses within the investment agreement investment portfolio, partially offset by the capital raise in March 2008. Annual Meeting of Stockholders The Board of Directors set the 2008 Annual Meeting of Stockholders for Tuesday, June 3, 2008, at 11:30 a.m. in New York City. The record date for determining stockholders entitled to notice of, and to vote at, the annual meeting was the close of business, April 7, 2008. About Ambac Financial Based in New York City, Ambac Financial Group, Inc. is a holding company that provides financial guarantees and financial services to clients in both the public and private sectors around the world through its principal operating subsidiary, Ambac Assurance Corporation. As an alternative to financial guarantee insurance credit protection is provided by Ambac Credit Products, a subsidiary of Ambac Assurance, in credit derivative format. * * * As reported in the Troubled Company Reporter on March 7, 2008, Moody's Investors Service said in a news statement that Ambac Financial Group Inc., if successful with its equity offering of $1.5 billion, will likely retain its "Aaa" rating. Moody's said that it will evaluate Ambac's ability to raise capital at reasonable terms as an indication of the company's financial flexibility and overall level of support from investors. In Moody's view, Ambac's new equity and equity linked capital through a public offering represents an important component of its overall plan to strengthen the credit profile of its financial guaranty insurance subsidiary, Ambac Assurance Corporation. On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. Moody's, the TCR said Jan. 17, 2008, placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambac's announcement of record losses, a capital raising plan, and the retirement of its CEO. AMDL INC: KMJ Corbin Expresses Going Concern Doubt -------------------------------------------------- KMJ Corbin & Company LLP raised substantial doubt on the ability of AMDL, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's significant operating losses and negative cash flows from operations through Dec. 31, 2007, and accumulated deficit at Dec. 31, 2007. AMDL reported that for the year ended Dec. 31, 2007, cash used in operations was $124,243. The major components were the net loss of $2,351,754 offset by non-cash expenses of $1,507,310 related to the fair value of options granted to employees and directors, $2,179,089 related to common stock, warrants and options issued to consultants for services and $1,265,782 for depreciation and amortization. Cash used in investing activities for the year was $5,672,059. The major components were the purchase of property and equipment of $2,536,163 and the purchase of product licenses of $2,561,773. Net cash provided by financing activities was $10,273,271 for the year ended Dec. 31, 2007, primarily consisting of the net proceeds of $9,989,797 from the issuance of common stock and proceeds of $418,697 from the exercise of warrants and options. On Mar. 5, 2008, the company conducted the second closing of the December 2007 Offering. In the second closing the company received $1,000,000 in aggregate gross proceeds from the sale of a total of 323,813 shares of common stock at $3.09 per share and issued warrants to purchase 161,813 shares at an exercise price of $4.74 per share. In connection with the second closing of the December 2007 offering, the company paid a finder's fee of $100,000. At Mar. 20, 2008, the company had cash on hand of approximately $4,875,000 and cash is being depleted at the rate of approximately $425,000 per month. Assuming that the current level of revenue from the sale of DR-70 kits does not increase in the near future, the company does not require new cancer samples to satisfy the FDA concerns on its pending 510(k) application, the company does not conduct any full scale clinical trials for DR-70 or its combination immunogene therapy technology in the U.S. or China, JPI generates sufficient cash to meet or exceed its cash requirements, and no outstanding warrants are exercised, the amount of cash on hand is expected to be sufficient to meet the company's projected operating expenses only through March 2009. The company posted a net loss of $2,351,754 on total revenues of $15,009,100 for the year ended Dec. 31, 2007, as compared with a net loss of $5,867,428 on total revenues of $2,103,936 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $32,867,178 in total assets, $7,145,665 in total liabilities and $25,721,513 in total stockholders' equity. At Dec. 31,2007, the company has an accumulated deficit of $36,886,897. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2aa5 About AMDL Inc. Based in Tustin, California, AMDL, Inc., (AMEX: ADL) -- http://www.amdl.com/-- with operations in Shenzhen, Jiangxi, and Jilin, China, is a vertically integrated specialty pharmaceutical company. In combination with its subsidiary Jade Pharmaceutical Inc., AMDL engages in the research, development, manufacture, and marketing of diagnostic products. AMERIQUEST MORTGAGE: 21 Tranches Get Moody's Rating Downgrades -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 21 tranches from 6 subprime RMBS transactions issued by Ameriquest Mortgage Securities Inc. Six downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Ameriquest Mortgage Securities Inc., Series 2005-R10 -- Cl. M-9, Downgraded to Ba2 from Baa3 -- Cl. M-10, Downgraded to B2 from Ba1; Placed Under Review for further Possible Downgrade Issuer: Ameriquest Mortgage Securities Inc., Series 2005-R11 -- Cl. M-9, Downgraded to Ba3 from Baa3 Issuer: Ameriquest Mortgage Securities Inc., Series 2005-R7 -- Cl. M-6, Downgraded to Baa1 from A3 -- Cl. M-7, Downgraded to Ba1 from Baa1 -- Cl. M-8, Downgraded to B3 from Baa2 -- Cl. M-9, Downgraded to Caa1 from Baa3 Issuer: Ameriquest Mortgage Securities Inc., Series 2005-R8 -- Cl. M-7, Downgraded to Baa2 from Baa1 -- Cl. M-8, Downgraded to B1 from Baa2 -- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba1 Issuer: Ameriquest Mortgage Securities Inc., Series 2006-R1 -- Cl. M-7, Downgraded to Ba2 from Baa1 -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba2 -- Cl. M-11, Downgraded to Caa3 from B3 Issuer: Ameriquest Mortgage Securities Inc., Series 2006-R2 -- Cl. M-7, Downgraded to Ba2 from Baa1 -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba1 -- Cl. M-11, Downgraded to Caa3 from B1 AMERIQUEST MORTGAGE: S&P Pares Ratings on Two Classes to Low-Bs --------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on two classes of asset-backed pass-through certificates from Ameriquest Mortgage Securities Inc.'s series 2004-R6. At the same time, S&P raised its ratings on four classes of senior mortgage pass-through certificates from Rural Housing Trust 1987-1 and removed them from CreditWatch with negative implications. At the same time, S&P lowered its ratings on two classes from Ameriquest Mortgage Securities Inc.'s series 2004-R6 and affirmed the ratings on the remaining three classes from this transaction. The raised ratings on classes A-1 and A-4 from Ameriquest Mortgage Securities Inc.'s series 2004-R6 reflect the structure of the transaction, which has allowed available credit enhancement to increase for both classes. The projected credit support levels support the classes at the 'AAA' rating level. While this transaction is failing its delinquency trigger, it is currently paying the A-1 and A-4 classes pro rata. S&P upgraded the classes because given this payment sequence, these classes will be paid off first. The cumulative loss trigger for series 2004-R6 is currently 2.5% of the original principal balance, while the deal had incurred 2.02% in realized losses as of the March 2008 remittance period. The ratings on both classes have been delinked from XL Capital Assurance Inc., which is currently rated 'A-' and provides bond insurance to these classes. The ratings on these classes now reflect the sufficient inherent credit support present without the bond insurance. The lowered ratings on the subordinate classes from series 2004-R6 reflect the recent poor pool performance, which has eroded available credit support to the junior classes and does not support the ratings at their previous levels. The dollar amount of loans in the transaction's delinquency pipeline indicates that these levels will not improve; the deal is failing its delinquency trigger by 1.8x. As of the March 2008 remittance period, serious delinquencies (90-plus days, foreclosures, and REOs) were approximately 19.06% of the current pool balance. Overcollateralization (O/C) for this series is below its $13.5 million target by $3.63 million, and the deal experienced average monthly losses of approximately $726,087 over the past 12 months. The raised ratings on Rural Housing Trust 1987-1 and their removal from CreditWatch negative reflect the increased level of O/C credit enhancement to the four classes, which is substantial compared with the outstanding principal balances of the classes. The collateral of residential mortgage loans totals $23 million, while the remaining balances of the certificates total approximately $4.5 million. This deal is composed of four loan group structures, which have paid down to 0.53%, 0.65%, 1.05% and 1.71%, respectively. The affirmations on the remaining three classes from Ameriquest Mortgage Securities Inc.'s series 2004-R6 reflect actual and projected credit support levels that are sufficient to maintain the current ratings. Ratings Raised Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates series 2004-R6 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 03072SSH9 AAA A+ A-4 03072SSL0 AAA A+ Ratings Raised and Removed From CreditWatch Negative Rural Housing Trust 1987-1 Senior mortgage pass-through certificates Rating ------ Class CUSIP To From ----- ----- -- ---- 1D 781740AD7 AAA A/Watch Neg 2C 781740AG0 AAA A/Watch Neg 3B 781740AJ4 AAA A/Watch Neg 4B 781740AL9 AAA A/Watch Neg Ratings Lowered Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates series 2004-R6 Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 03072SSQ9 BB BBB- M-5 03072SSR7 B BB+ Ratings Affirmed Ameriquest Mortgage Securities Inc. Asset-backed pass-through certificates series 2004-R6 Class CUSIP Rating ----- ----- ------ M-1 03072SSM8 A- M-2 03072SSN6 BBB+ M-3 03072SSP1 BBB AMPEX CORP: Dec. 31 Balance Sheet Upside Down by $107.135 Million ----------------------------------------------------------------- Ampex Corporation reported a balance sheet data with total assets of $26.467 million, total liabilities of $133.602 million resulting to a total stockholders' deficit of $107.135 million, as of Dec. 31, 2007. The company reported a net income of $0.9 million for the fiscal year ended Dec. 31, 2007 compared to $3.9 million net loss in 2007. Total revenues generated by Ampex reached $41.4 million for fiscal 2007 from $35.9 million in 2006. For the year, Ampex reported income from continuing operations of $1.0 million on revenues of $41.5 million in fiscal 2007 compared to a loss from continuing operations of $3.8 million on revenues of $35.9 million in fiscal 2006. Licensing revenue in 2007 totaled $12.4 million of which $1.9 million related to negotiated settlements covering a prepayment of royalty obligations through 2011. The Licensing segment reported operating income of $9.1 million in fiscal 2007. The Licensing segment reported operating income of $0.2 million in fiscal 2006. In the fourth quarter of 2007, the Licensing segment reported revenues of $2.6 million and operating income of $1.4 million. In the fourth quarter of 2006, the Licensing segment reported revenues of $3.4 million and operating income of $1.1 million. The Recorders segment reported operating income of $5.0 million in fiscal 2007 on revenues from the sale of products and services totaling $29.0 million. The Recorders segment reported operating income of $3.4 million in fiscal 2006 on revenues of $25.1 million. The disk- and solid state memory-based products accounted for 90% of system sales in 2007 up from 72% in fiscal 2006. In the fourth quarter of 2007, the Recorders segment reported revenues from the sale of products and services totaling $8.9 million, operating costs of $6.7 million and an operating profit of $2.2 million. In the fourth quarter of 2006, the Recorders segment reported revenues from the sale of products and services totaling $7.9 million, operating costs of $6.5 million and an operating profit of $1.4 million. Non-recurring, non-operating income totaling $0.1 million was realized in 2007, down from $3.4 million in 2006. Interest expense increased to $4.3 million in 2007 from $3.0 million in 2006 due to higher debt balances. In 2007, the company incurred reorganizationcosts of $0.6 million in connection with the restructuring of its liabilities. The 2007 form 10-K filed with the Securities and Exchange Commission on April 15, 2008 included an audit opinion on the company's financial statements that contained a going concern uncertainty explanatory paragraph due to the company's recent filing of a voluntary petition for relief under chapter 11 of the U.S. Bankruptcy Code. A full text of the company's form 10-K filing with the Securities and Exchange Commission can be accessed free of charge at: http://ResearchArchives.com/t/s?2b0e About Ampex Corporation Headquartered in Redwood City, California, Ampex Corp. -- http://www.ampex.com-- designs and manufactures data storage products used in defense application to gather images and other date from aircrafts, satellites and submarines. The company and six of its affiliates filed for Chapter 11 protection on March 30, 2008 (Bankr. S.D.N.Y. Lead Case No.08- 11094). Matthew Allen Feldman, Esq., and Rachel C. Strickland, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, they listed total assets of $26,467,000 and total debts of $133,602,000. ANTHRACITE 2005-HY2: Fitch Chips Rating on $58 Mil. Notes to 'B' ---------------------------------------------------------------- Fitch Ratings downgraded three classes and affirmed six classes of notes issued by Anthracite 2005-HY2, Ltd.or Corp., (Anthracite 2005-HY2): -- $109.4 million class A affirmed at 'AAA'; -- $52.6 million class B affirmed at 'AA'; -- $25.4 million class C-FL affirmed at 'A'; -- $7.0 million class C-FX affirmed at 'A'; -- $25.3 million class D-FL affirmed at 'BBB'; -- $13.5 million class D-FX affirmed at 'BBB'; -- $9.4 million class E downgraded to 'BB' from 'BBB-'; -- $58.0 million class F downgraded to 'B' from 'BB'; -- $57.5 million class G downgraded to 'B-' from 'B'. Additionally, Fitch has removed classes F and G from Rating Watch Negative, where they were originally placed on Jan. 16, 2008. Fitch does not rate the preferred shares. Anthracite 2005-HY2 is a commercial real estate collateralized debt obligation primarily backed by commercial mortgage-backed securities B-pieces that closed on July 26, 2005. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) 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 senior unsecured real estate investment trust securities. 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 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 2005-HY2 is collateralized by all or a portion of 69 classes of fixed-rate CMBS in 16 separate underlying transactions (CMBS: 90.9%) and eight senior unsecured real estate investment trusts (REITs: 9.1%). 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 average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1998 to 2005 (an average of 3.4 years of seasoning). Approximately 31.3% of the collateral is currently rated below 'B-' or not rated, and therefore, is more susceptible to losses in the near-term. While overall a significant portion of the collateral is below investment grade, approximately 20.9% is investment grade. Anthracite 2005-HY2 holds 28.1% in the 'BB' category and 19.8% in the 'B' category. Furthermore, all underlying CMBS transactions have a named special servicer with a Fitch rating of 'CSS1'. The collateral has realized $7 million in losses to date, which represents 1.5% of the original collateral. Based on the original below 'B-' balance of $137.1 million, this loss rate equates to a 5.1% loss rate on the below 'B-' collateral. Additional losses are projected to the collateral, with $104 million of the underlying collateral currently 60 days or more delinquent, according to the current trustee report. Fitch conducted cash flow modeling to test the transaction's structure under various default and interest rate stress scenarios. The ratings on the class A and B notes address the timely payment of interest and ultimate payment of principal. The ratings on the class C-FL, C-FX, D-FL, D-FX, E, F and G notes address the ultimate payment of interest and ultimate payment of principal. ASSOCIATED ESTATES: S&P Keeps 'B+' Rating; Changes Outlook to Pos. ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Associated Estates Realty Corp. to positive from stable. Concurrently, S&P affirmed its 'B+' corporate credit and 'CCC+' preferred stock ratings, affecting roughly $58 million in rated preferred stock. "The outlook revision reflects improved debt coverage metrics, as well as improved portfolio quality and diversity," said credit analyst Lisa Wright. "Associated Estates' management is improving geographic diversity and shedding its lower-quality assets, particularly by exiting the affordable housing ownership and management business." Ms. Wright also noted that debt coverage metrics are benefiting from operational gains, as well as from favorable refinancings and early debt repayments that were funded by sales of Associated Estates' Midwest properties. S&P would consider raising the ratings one notch if Associated Estates' maintains its improved portfolio performance and debt coverage metrics during the economic downturn or reduces debt leverage. Conversely, S&P could revise the outlook to stable or lower the ratings if competition from for-rent condominiums and single-family homes weighs on the REIT's portfolio performance and debt coverage metrics. ATARI INC: Special Committee Hires Duff & Phelps as Fin. Advisor ---------------------------------------------------------------- The special committee of Atari Inc.'s board of directors has retained Duff & Phelps LLC as its financial advisor to assist it in evaluating the proposal by Infogrames Entertainment S.A. to acquire all of the outstanding common stock of Atari Inc. On March 6, 2008, Atari Inc. received a letter from IESA, its majority shareholder, regarding IESA's non-binding expression of intent to acquire the outstanding common stock of Atari Inc. not owned by IESA and its affiliates for a per share cash amount of $1.68. The special committee also informed IESA that it would not be in a position to respond to the offer by the date of March 11, 2008, as requested by IESA in its letter containing the proposal. The special committee intends, together with its advisors, to thoroughly evaluate IESA's proposal before providing any response. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -- http://www.atari.com/-- publishes and distributes interactive entertainment software in the U.S. The company's 1,000+ published titles distributed by the company include hard-core, genre- defining franchises such as Test Drive(R); and mass-market and children's franchises such Dragon Ball Z(R). Atari Inc. is a majority-owned subsidiary of France- based Infogrames Entertainment SA, an interactive games publisher in Europe. As reported in the Troubled Company Reporter on Feb. 20, 2008, Atari Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $43.5 million in total assets and $60.3 million in total liabilities, resulting in a $16.8 million total stockholders' deficit. Going Concern Doubt New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. As reported in the Troubled Company Reporter on March 28, 2008, Atari Inc. received a Staff Determination Letter from the Nasdaq Listing Qualifications Department stating that Atari Inc. has not gained compliance with the requirements of Nasdaq Marketplace Rule 4450(b)(3), and that its securities are therefore subject to delisting from The Nasdaq Global Market. On Dec. 21, 2007, the Nasdaq Listing Qualifications Department notified Atari Inc. that, pursuant to Nasdaq Marketplace Rule 4450(e)(1), unless the market value of Atari Inc.'s publicly held shares, which is calculated by reference to Atari Inc.'s total shares outstanding, less any shares held by officers, directors or beneficial owners of 10% or more, maintains an aggregate market value of $15 million or more for a minimum of 10 consecutive business days prior to March 20, 2008, Atari Inc.'s securities would be subject to delisting. As disclosed on March 21, 2008, the forbearance period granted by BlueBay High Yield Investments (Luxembourg) S.A.R.L., the lender under Atari's senior secured credit facility, has expired and Atari is currently in discussions with BlueBay with respect to, among other things, an extension of the forbearance period. AUTO UNDERWRITERS: Clancy and Co Expresses Going Concern Doubt -------------------------------------------------------------- On Apr. 8, 2008, Auto Underwriters of America, Inc., filed on Form 10-KSB/A a first amendment to its annual report for the year ended June 30, 2007, which was originally filed with the Securities and Exchange Commission on Oct. 15, 2007. Clancy and Co., P.L.L.C., raised substantial doubt about the ability of Auto Underwriters of America, Inc., to continue as a going concern after it audited the company's financial statements for the year ended June 30, 2007. The auditor pointed to Auto Underwriters' recurring losses from operations and working capital deficit. Auto Underwriters reported recurring losses and has an accumulated deficit of around $17,700,000 as of June 30, 2007. The company has $913,930 available under its line of credit with Oak Rock Financial, LLC, at June 30, 2007. Management believes that it has the ability to borrow additional funds from third parties such as financial institutions or will be successful in a debt or equity financing that will be sufficient to fund its operations for the next twelve months. Therefore, for at least the next twelve months, the company can continue to operate as a going concern. The company posted a net loss of $4,649,672 on total revenues of $11,175,265 for the year ended June 30, 2007, as compared with a net loss of $6,574,353 on total revenues of $13,991,565 in the prior year. At June 30, 2007, the company's balance sheet showed $12,285,675 in total assets and $14,894,694 in total liabilities, resulting in $2,609,019 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2aa4 About Auto Underwriters Auto Underwriters of America, Inc., (OTC BB:ADWT.OB) -- http://www.autounderwriters.com/-- purchases and servicing non- prime installment sales contracts originated by automobile dealers in the sale of new and used automobiles, and light trucks in the United States. It also provides financing programs to automobile dealers through its Web site, which allows the dealer to input various fields of information into an online financing application and obtain an automatic credit decision. In addition, the company purchases, reconditions, sells, and finances used vehicles from three dealerships in Houston, Texas that operate under the name Affordable Cars & Trucks. Auto Underwriters of America was incorporated in 1981 and is based in San Jose, Calif. AXS ONE: Amper Politziner Expresses Going Concern Doubt ------------------------------------------------------- Amper, Politziner, & Mattia, P.C., raised substantial doubt about the ability of AXS-One, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's losses from operations and working capital deficiency. The management disclosed that there are a number of factors that have negatively impacted the company's liquidity, and may impact the company's ability to function as a going concern. The company has not yet been able to obtain operating profitability from continuing operations and may not be able to be profitable on a quarterly or annual basis in the future. Additionally, the company had a cash balance of $3,400,000 at Dec. 31, 2007, and has a $2,500,000 bank credit facility for which borrowing availability is limited to eligible accounts receivable. The company was not in compliance with its quarterly license revenue covenant as of Mar.31, 2008. The company and the bank are in discussions with respect to a waiver of the covenant violation or revisions to the financial covenants. The company had a working capital deficiency of $1,800,000 as of Dec. 31, 2007. The company posted a net loss of $14,946,000 on total revenues of $ 11,949,000 for the year ended Dec. 31, 2007, as compared with a net income of $5,501,000 on total revenues of $10,296,000 in the prior year. At Dec. 31, 2007, the company's consolidated balance sheet showed $6,944,000 in total assets and $15,536,000 in total liabilities, resulting in $8,592,000 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $6,408,000 in total current assets available to pay $8,167,000 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2aa6 About AXS-One Inc. Headquartered in Rutherford, N.J., AXS-One (AMEX: AXO) -- http://www.axsone.com/-- provides high performance Records Compliance Management solutions. The AXS-One Compliance Platform enables organizations to implement secure, scalable and enforceable policies that address records management for corporate governance, legal discovery and industry regulations such as SEC17a-4, NASD 3010, Sarbanes-Oxley, HIPAA, The Patriot Act and Gramm-Leach Bliley. Founded in 1979, AXS-One has offices worldwide including in the United States, Australia, Singapore, United Kingdom, and South Africa. AZRA COMMERCIAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Azra Commercial Center, L.L.C. 936 E. Sahara Ave. Las Vegas, NV 89104 Bankruptcy Case No.: 08-13840 Chapter 11 Petition Date: April 21, 2008 Court: District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: Bob L. Olson, Esq. Email: ecffilings@beckleylaw.com Lewis & Roca, LLP 3993 Howard Hughes Parkway, Ste. 600 Las Vegas, NV 89169 Tel: (702) 949-8200 Fax: (702) 385-9447 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Udell M. Larsen $500,000 P.O. Box 405 Alamo, CA 94507 Tel: (925) 820-1911 Spotted Eagle Lodge, LLC $450,000 P.O. Box 489 Willow, AK 99688 Tel: (702) 858-8022 Robert Blickenstaff $427,000 335 Jacaranda Drive Danville, CA 94506 Frontier Aero Center, LLC $275,000 P.O. Box 489 Willow, AK 99688 Tel: (702) 858-8022 Kari A. Rader $50,000 Deca, LLC Prepaid rent and $27,281 security deposit The Best Service Co. $23,000 Glenn Dulaine $18,000 Republic Services Utility services $13,339 PC Plumbing $13,000 Naridon Corp. Water line $6,980 Silvestre Bonilla and Alfredo Prepaid rent and $6,628 security deposit PlusFour, Inc. $6,532 NEM Care, LLC Prepaid rent and $5,740 security deposit US Dental Washington, Inc. Prepaid rent and $5,416 security deposit FMVF Enterprises, Inc. Prepaid rent and $3,732 security deposit S.K. Lee Prepaid rent and $3,672 security deposit Kenny's Konstruction $3,566 Blanca L. Chavez Prepaid rent and $3,552 security deposit Mirna G. Lainez Prepaid rent and $3,552 BLUE STONE: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Blue Stone Real Estate Construction & Corp. Attn: James W. DeMaria 11036 Spring Hill Dr. Spring Hill, FL 34608 Bankruptcy Case No.: 08-05299 Type of Business: The Debtor Planned community construction and development. See http://www.bluestonehomes.com/ Chapter 11 Petition Date: April 17, 2008 Court: Middle District of Florida (Tampa) Judge: Catherine Peek McEwen Debtor's Counsel: Edmund S. Whitson, III, Esq. E-mail: edmund.whitson@akerman.com Akerman Senterfitt P.O. Box 3273 401 E. Jackson St., Ste. 1700 Tampa, FL 33601-3273 Tel: (813) 223-7333 Fax: (813) 223-2837 http://www.akerman.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $50 million to $100 million The Debtor did not file a list of its largest unsecured creditors. BLUE WATER: Case Conversion Not Beneficial to Creditors, Ford Says ------------------------------------------------------------------ Ford Motor Company, one of Blue Water Automotive Systems, Inc.'s key customers, asserted that conversion of the Chapter 11 cases to Chapter 7 is not in the best interest of creditors and the estates. "As several courts have emphasized, short term operating losses are not unusual during the first few months of a Chapter 11 case and they certainly do not provide a basis for the drastic remedy of conversion. The Debtor's rehabilitation is not a hopeless and unrealistic prospect as it will have positive EBITDA of $11 million in 2008," asserted Ford's counsel, Timothy A. Fusco, Esq., at Miller, Canfield, Paddock and Stone, PLC, in Detroit, Michigan. As reported in the Troubled Company Reporter on March 31, 2008, the committee representing unsecured creditors of Blue Water asked the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division to covert Blue Water's bankruptcy proceedings to cases under Chapter 7 of the Bankruptcy Code. The committee's case conversion motion was based on its apprehensions that the Debtors would only incur more debts if they continue operations, further diminishing recovery by creditors. Ford, however, pointed to testimony by John DiDonato, the Debtors' financial advisor, and managing director at Huron Consulting Services, LLC. Mr. DiDonato said Blue Water is expected to have 2008 EBITDA of $11,000,000, which could reach as high as $16,000,000. Mr. DiDonato, according to Ford, ascribed Blue Water's current problems to its decision to accept substantial new business from Ford that involves launch of new product lines. These launches required substantial working capital to complete and the Debtor, for a variety of reasons, did not have sufficient borrowing capacity with its prepetition lender CIT Group/Business Credit, Inc., to accomplish the launches. Ford said it has agreed postpetition to fund the capital and tooling expenditures and relieve Blue Water of the need to finance these expenses. The Ford business that will flow from these launches is profitable and could lead to even greater EBITDA for 2008, says Mr. Fusco. Ford also noted that Mr. DiDonato was adamant that the Debtors would be sold as a going concern. The Debtors' investment banker, Miller Buckfire & Co., LLC, received letters of intent from at least seven qualified purchasers of the Debtors' assets and business. It is almost axiomatic that the purchase price for the Debtors' assets sold as a going concern will greatly exceed their value on a liquidation basis, Mr. Fusco noted. "Continuation of the Debtor's business in chapter 11 is, for a number of reasons, a necessary condition to a successful sale." Mr. Fusco also pointed out that the accommodation agreements entered into with Ford, General Motors Corporation, and Chrysler, LLC, provide that conversion of the Debtors' bankruptcy cases to Chapter 7 constitutes an event of the default under the agreements. He noted that this event would result to: -- the DIP Financing becoming due and owing; and -- the termination of Ford's, Chrysler's and GM's obligations not to resource component parts. Mr. Fusco warned that a conversion would be extremely risky for the Debtors because any decision by Ford, Chrysler or GM to resource component parts (i) could end any possibility of rehabilitation for Blue Water, and (ii) would reduce the value of Blue Water when it is sold. He added that even in the unlikely event that component parts are not resourced, the Debtors would have to obtain new postpetition financing upon an Event of Default. The Creditors Committee, he pointed out, has preferred no evidence to suggest that a Chapter 7 operating trustee would be able to obtain postpetition financing on different terms than did Blue Water under the Citizens Bank DIP Financing. The Creditors Committee, according to Ford, has not satisfied its burden under Section 1112(b) of the Bankruptcy Code of proving, by a preponderance of the evidence, that there exists cause to convert the bankruptcy cases to Chapter 7. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. The hearing on the Debtors' disclosure statement and plan is set for Aug. 5, 2008. (Blue Water Automotive Bankruptcy News, Issue No. 12, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BOSTON HILL: Court Dismisses Re-filed Chapter 11 Petition --------------------------------------------------------- The Hon. Joan N. Feeney of the U.S. Bankruptcy Court for the District of Massachusetts again dismissed on Wednesday, April 23, 2008, the second chapter 11 filing of Boston Hill Realty Trust, Worcester Telegram's Aaron Nicodemus relates. Judge Feeney also ruled that the Debtor cannot re-file bankruptcy petition within two years, report says. Boston Hill's sole trustee, Charles Sanderson III of Kingston, asked the Court in March to trash the Debtor's second filing made in February asserting that he can't attend hearings since he "is physically infirm," according to the report. Judge Feeney agreed with Mr. Sanderson and ruled that the Debtor and its sole trustee are not capable to reorganize under the U.S. Bankruptcy Law, Telegram says. The barring of refiling for two years is meant to protect creditors who are concerned that Mr. Sanderson and the trust may abuse the Bankruptcy Law, report relates. According to the report, citing court filings, the Debtor's creditors include Gemstone Investment Co. of Worcester, which is owed $14 million. Telegram reveals that Gemstone moved to seize the Debtor's property for the second time since December 2007. Both foreclosure attempts were blocked by the Debtor's bankruptcy filings, report notes. Gemstone counsel, Alison R. Lane, Esq., won't comment on the matter. The report also cites YMCA of Greater Worcester, as another creditor, which asserted that Mr. Sanderson manipulated the Court in order to stave off foreclosures against the Debtor. YMCA is owed $5.3 million that was used to fund infrastructure for Boro YMCA facility originally to be financed by Boston Hill, Telegram quotes Michael J. Michaeles, Esq., as saying. That infrastructure construction was part of a certain deal under which YMCA will get a lot worth $1 million, Telegram says. This matter is currently pending with the Superior Court in Worcester, report adds. Although not totally for the case dismissal, Mr. Michaeles says YMCA was "pleased by the judge's decision" since the pending litigation in Worcester can now proceed, Telegram relates. About Boston Hill Kingston, Massachusetts-based Boston Hill Realty Trust owns and develops real estate. The Debtor filed for Chapter 11 Petition on Dec. 5, 2007 (Bankr. D. Mass. Case No. 07-17770). Earl D. Munroe at Munroe & Chew represents the Debtor in its restructuring efforts. The Debtor listed assets and debts between $10 million and $50 million. The December 2007 bankruptcy filing was dismissed by Judge Joan N. Feeney in January 2008. The Debtor re-filed for bankruptcy on Feb. 5, 2008 (Bankr. D. Mass. Case No. 08-10830). Earl D. Munroe, Esq., at Munroe & Chew continued to represent the Debtor. Boston Hill's second filing disclose total assets of $28,300,000 and total debts of $17,544,341. The Debtor's second filing was dismissed by the Court on April 23, 2008. BRIGHT HORIZONS: Moody's Puts 'Ba3' Rating on Proposed Senior Loan ------------------------------------------------------------------ Moody's Investors Service assigned Ba3 ratings to the proposed senior secured credit facilities of Bright Horizons Family Solutions, Inc. Concurrently Moody's assigned a B2 Corporate Family Rating to Bright Horizons. The outlook for the ratings is stable. The transaction is in connection with the proposed all cash acquisition of Bright Horizons by Bain Capital Partners, LLC. The proposed transaction values the company at about $1.4 billion (including transaction fees) or just over 13 times fiscal 2007 EBITDA. Proceeds from the proposed $365 million term loan B, an additional $300 million senior unsecured notes and $110 million Holdco senior PIK notes, along with about $600 million in common equity, will be used to purchase 100% of the equity of Bright Horizons and pay fees and expenses associated with the transaction. The ratings are constrained by the high level of overall indebtedness and expectations of weak free cash flow generation (defined as cash from operations less capital expenditures) in the medium term. Moody's believes that the highly leveraged structure leaves the company vulnerable to the effects of a potentially prolonged economic downturn. More specifically, high financial and operating leverage, combined with employer unwillingness to initiate or continue childcare services and related benefits in a more cost-aware environment could put pressure on the company. Moreover, a significant increase in unemployment could lead directly to reduced demand for childcare. The ratings are further constrained by an expansion-oriented strategy and high growth capital expenditures that would be more compatible with lower financial leverage. Nonetheless, the Corporate Family Rating of B2 acknowledges Bright Horizons' prominent market position in the employer-sponsored child-care space, the company's largely successful execution in recent years and the sponsor's substantial equity contribution of about 44% of the total capital. The company also benefits from industry diversification at the employer end, lack of customer concentration, relatively long-term contractual arrangements, low maintenance capital expenditures and some degree of geographical diversification. Moody's assigned these ratings: -- B2 Corporate Family Rating; -- B2 Probability of Default Rating; -- Ba3 (LGD2, 23%) rated $75 million senior secured revolving credit facility due 2014; -- Ba3 (LGD2, 23%) rated $365 million senior secured term loan B due 2015; The ratings outlook is stable. The transaction is expected to be completed in May 2008 and remains subject to shareholder approval. The ratings are contingent upon the receipt of executed documentation in form and substance acceptable to Moody's. For further detail, refer to Moody's credit opinion for Bright Horizons Family Solutions, Inc. Bright Horizons Family Solutions, Inc., based in Watertown Massachusetts, is a leading provider of center-based child care and related services, summer camps, vacation care, college preparation and admissions counseling, and other family support services. Bright Horizons had revenues of approximately $775 million in fiscal 2007. BUFFETS INC: Moody's Attaches 'Ba3' Rating on $85 Mil. Super Loan ----------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the $85 million super priority senior secured delayed draw new money term loan and a rating of B3 to the $200 million super priority senior secured roll-over term loan of Buffets Inc. as Debtor-in-Possession. The higher rating on the $85 million NMTL reflects its senior position in regards to priority of claim versus the RTL. The ratings reflect the size of the aggregate DIP facility versus an estimated recovery value under either a going concern or liquidation scenario. This is in the context of the uncertainty of creditor support for a restructuring plan that provides more than adequate liquidity to address the challenges of persistent economic weakness, historically high operating costs, intense competitive pressures and capital market uncertainties. Creditors could also be significantly more critical of a restructuring plan that is formulated and sponsored by the same management team that led the company to a position requiring bankruptcy protection. Moody's withdrew all ratings for Buffet's on January 25, 2008. The current ratings being assigned are on a point-in-time basis and will not be monitored going forward and therefore no outlook will be assigned. Ratings assigned to Buffet's Inc. as Debtor-in-Possession are: -- $85 million super priority senior secured delayed draw new money term loan, rated Ba3 -- $200 million super priority senior secured roll-over term loan, rated B3 Buffets owns, operates, and franchises steak-buffet style family restaurants principally under the "Old Country Buffet" and "Hometown Buffet" brand names and grill and buffet format restaurants under the brand names "Ryan's" and "Fire Mountain". In November 2006, Buffet's became the second largest restaurant chain in the family dining sector, after it closed on the acquisition of Ryan's Grill Buffet Bakery for approximately $704 million in cash and $142 million of assumed debt. Buffet's partially financed the transaction by selling the properties it was acquiring from Ryan's for about $566 million and entered into a sale or leaseback for the properties. Despite its market position, casual dining remains one of the most challenged segments in the restaurant industry due to its higher average check and higher operating costs versus quick casual or quick service restaurants and in the context of a financially stressed consumer that has become significantly more frugal. Several factors that led to Buffet's liquidity problems and subsequent chapter 11 filing were historically high operating costs that included higher rent expense and interest costs due to the Ryan's acquisition, combined with escalating commodity, labor, and energy costs, at a time of deteriorating consumer spending and intense competition. As part of its acquisition of Ryan's, Buffet's incurred higher rent expense as a result of its sale or leaseback transaction. In addition, despite realizing about $40 million of synergies after the acquisition, all of the benefits were more than off set by higher costs. Although the company has not yet formulated a definitive restructuring plan, the bankruptcy process should enable the company to reduce costs and improve liquidity by shedding unprofitable restaurants and moving to a more manageable capital structure. However, over the life of the facilities Moody's expects Buffet's to generate negative cash flow, and liquidity could deteriorate further in the event a significant number of vendors require cash delivery terms or COD. As a result, the primary source of liquidity during the bankruptcy process will be cash balances provided by borrowings under the NMTL which is expected to be fully drawn by April 30, 2008. Moody's remains concerned that the economic and industry challenges previously outlined will remain over the intermediate term while some factors, such as financially stressed consumers, will likely deteriorate further. In addition, negative cash flows are driven in part by higher post-petition interest expense being paid to both post-petition and pre-petition secured lenders. Overall, an inability to fund all cash requirements from internally generated cash during the bankruptcy process creates a significant amount of uncertainty as to Buffet's ability to successfully operate in today's environment without substantial changes to its current operations and a material reduction in debt. Moreover, management's involvement in operating the business during the period that lead to the filing of chapter 11 bankruptcy protection, could result in certain governance changes as part of creditors agreeing to a plan of reorganization. This could lead to negotiation delays and potentially, value erosion. In regards to the value of security available to the DIP lenders, Buffet's business model results in a relatively low level of tangible asset value overall. The use of operating leases limits real estate ownership, while any meaningful value placed on inventories would be reduced in part by its perishable nature and customers' use of either cash or credit cards as their primary source of payment limits receivables to relatively low levels. As a result, Moody's would estimate a conservative valuation of Buffets tangible current assets and property plant and equipment as of Dec. 12, 2007, of approximately $200 million. Although this valuation would be more than sufficient to cover the $85 million NMTL it would result in some level of impairment for the $200 million RTL. Moody's also evaluated the possible coverage of the $85 million NMTL and $200 million RTL using a relatively conservative earnings multiple of about 4.0 times, which would only require a level of EBITDA of approximately $75 million. Although Moody's believes this level of EBITDA is achievable, it would not provide any meaningful level of excess coverage for the $200 million RTL. According to the DIP credit agreement, the $85 million NMTL can be borrowed in two draw downs; the first being $30 million, which was done in February 2008, and the second being $55 million. The second draw must be completed by April 30, 2008, or the company forfeits the ability to borrow this additional amount. According to management, Buffet's has all the approvals required to draw the remaining $55 million and will do so prior to April 30, 2008. The fact that the NMTL will be fully drawn as of April 30, 2008, is an additional risk. Should the company's restructuring efforts not progress as planned, lenders to the NMTL have few remedies as their loans have already been extended. Moody's ratings assigned assume that the company successfully draws the remaining $55 million under the NMTL prior to April 30, 2008. In regards to the re-payment of the loans, all such payments shall be applied first pro rata to all outstandings under the $85 million NMTL and, second, pro rata to the outstanding RTL. To assure adequate protection to all post-petition and pre- petition secured lenders, cash interest is being calculated using an interest spread above LIBOR of 7.25%, while interest on the $300 million of unsecured bonds has been stayed as part of the bankruptcy process. The DIP credit agreement also has a number of negative covenants, several of which include minimum consolidated EBITDA, minimum cash balances, and maximum capital expenditures. In summary; 1) actual EBITDA for the most recently completed three-month period as at the last day of each fiscal month commencing Feb. 6, 2008, must not be less than 85% of the corresponding consolidated EBITDA set forth in the final budget; 2) the aggregate cash balances in all accounts will not be less than $20 million from the delayed draw funding date through July 2, 2008 and $10 million from July 3, 2008 through the maturity date; and 3) capital expenditures not to exceed $15 million from closing through end of fiscal year on July 2, 2008, or $45 million for fiscal year ending on July 1, 2009. The DIP facility matures at the earlier of the effective date of any confirmed plan of reorganization or Jan. 22, 2009. The maturity can be extended beyond January 22, 2009, by an additional six months if, on the one-year anniversary of the closing date, the aggregate principal amount of NMTL outstanding on such date is less than or equal to $50.0 million, or $40.0 million, to the extent Holdings and its subsidiaries receive in the aggregate $10.0 million or more in consideration from asset sales consummated during the twelve-month period commencing on the closing date. However, with the expectation that Buffet's will generate negative cash flow through the bankruptcy process its ability to meet these hurdles and automatically extend the facility is highly uncertain. If the company has not successfully exited chapter 11 bankruptcy and is unable to extend the maturity date of the DIP facility by January 2009, it may well face difficulty refinancing this debt. In the event the maturity date extension does not occur as described above, the maturity date may nonetheless be extended by six months with the consent of the required renders. However, in any event, maturity may not extend beyond eighteen months from the time of filing according to U.S. bankruptcy law. The $85 million NMTL and $200 million RTL both benefit from a security package that includes substantially all the assets of the borrower and its subsidiaries, including material owned real estate and other properties acquired subsequent to Jan. 22, 2008. CENTEX HOME: Moody's Cuts Nine Tranches' Ratings on Delinquencies ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 38 tranches from 6 subprime RMBS transactions issued by Nationstar and Centex. 15 downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Centex Home Equity Loan Trust 2005-D -- Cl. B-2, Downgraded to Ba3 from Baa3 -- Cl. B-3, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade Issuer: Centex Home Equity Loan Trust 2006-A -- Cl. M-5, Downgraded to A3 from A2 -- Cl. M-6, Downgraded to Ba2 from A3 -- Cl. M-7, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba3 -- Cl. M-11, Downgraded to Caa3 from B3 Issuer: Nationstar Home Equity Loan Asset-Backed Certificates, Series 2007-C -- Cl. M-2, Downgraded to A1 from Aa2 -- Cl. M-3, Downgraded to Baa1 from Aa3 -- Cl. M-4, Downgraded to Ba1 from A1 -- Cl. M-5, Downgraded to Ba3 from A2 -- Cl. M-6, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from B1 -- Cl. M-10, Downgraded to C from Caa2 Issuer: Nationstar Home Equity Loan Trust 2006-B -- Cl. M-5, Downgraded to Baa1 from A2 -- Cl. M-6, Downgraded to Ba1 from A3 -- Cl. M-7, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba1 -- Cl. M-11, Downgraded to Caa2 from Ba2 Issuer: Nationstar Home Equity Loan Trust 2007-A -- Cl. M-5, Downgraded to A3 from A2 -- Cl. M-6, Downgraded to Ba1 from Baa1 -- Cl. M-7, Downgraded to B1 from Baa2 -- Cl. M-8, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B2 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa2 from B3 Issuer: Nationstar Home Equity Loan Trust 2007-B -- Cl. M-3, Downgraded to A1 from Aa3 -- Cl. M-4, Downgraded to Baa2 from A1 -- Cl. M-5, Downgraded to Ba1 from A2 -- Cl. M-6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa2 from B3 CFM U.S.: Committee Wants Sale Bidding Procedures Amended --------------------------------------------------------- The Official Committee of Unsecured Creditors in the bankruptcy case of CFM U.S. Corporation and CFM Majestic U.S. Holdings Inc. opposes a request by the Debtors to approve the bidding procedures for the sale of substantially all of their assets, subject to higher and better offers. As reported in the Troubled Company Reporter on April 17, 2008, the Debtors asked the Court to approve bidding procedures for the sale of all of their assets. The Debtors also asked the Court to set a sale hearing on June 30, 2008, and June 27, 2008, as objection deadline. The Committee objects on the grounds that the Debtors' move is an attempt to set an unnecessary expedited sale process, which creditors may not benefit. Among other things, the Committee opposes that: i) an early deadline for interested purchasers to make bids for the assets is set; ii) the proposed procedures do not confirm the adopted for sale under Section 363 of the Bankruptcy Code; and iii) a required $250,000 incremental overbid is excessive. As a result, the Committee suggests to Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware to make changes in Debtors' proposed bidding procedures. The Committee proposes to set June 20, 2008, as bid deadline for interested purchaser to submit an irrevocable offer and July 23, 2008, as auction date. A full-text copy of the Committee's proposed changes to the bidding procedures is available for free at: http://ResearchArchives.com/t/s?2b12 The Committee has retained Trenwith Securities LLC, an affiliate bank of BDO Seidman LLP, to provide investment banking advice on the sale process. BDO represent the Committee as financial advisor. To participate in the public auction, all qualified bids along with a "good faith deposit" equal to 10% of the proposed purchase price must be delivered by the May 7, 2008 bid deadline. An auction will follow on June 27, 2008. During the auction, succeeding bids will be made in $250,000 increments. Pursuant to court documents, the Debtors propose to grant the stalking horse bidder, if any, a break-up fee, a expense reimbursement and an auction overbid protection. PricewaterhouseCoopers Corporate Finance Inc. has been retained to assist in the asset sale. A full-text copy of the Sale Bidding Procedure is available for free at http://ResearchArchives.com/t/s?2aa8 About CFM Headquartered in Huntington, Indiana, CFM U.S. Corp. -- http://www.majesticproducts.com/-- manufactures two product categories: Hearth and Heating Products and Barbecue and Outdoor Products. The company and its affiliate, CFM Majestic U.S. Holdings, Inc., filed for Chapter 11 protection on April 9, 2008 (Bankr. D. Del. Lead Case No.08-10668). William Pierce Bowden, Esq., at Ashby & Geddes, represents the Debtors. The U.S. Trustee for Region 3 appointed an Official Committee of Unsecured Creditor in these cases. The Committee Selected Winston & Strawn LLP and Cole, Schotz, Meisel, Forman & Leonard, P.A., as its proposed counsel. When the Debtors filed for protection against their creditors, they listed assets between $50 million to $100 million and debts between $100 million to $500 million. CHART INDUSTRIES: S&P Gives Positive Outlook; Holds 'B+' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Chart Industries Inc. to positive from stable and affirmed its 'B+' corporate credit rating on the company. "The revised outlook reflects strong operating performance and a significant improvement in leverage," said Standard & Poor's credit analyst Amy Eddy. Since S&P initially rated the company, Chart has doubled its EBITDA from approximately $50 million to more than $100 million and its backlog from less than $200 million to more than $450 million. In addition, Chart has repaid $90 million on its term loan. The strong operating performance in its distribution and storage business has been driven by rising GDP levels, and growth in its energy and chemicals segment has resulted from an increasing number of equipment orders for liquefied natural gas facilities. Garfield, Ohio-based Chart manufactures equipment used for low-temperature and cryogenic applications for energy, industrial gas, and biomedical customers. The company had $267 million of adjusted debt as of Dec. 31, 2007. CIT GROUP: Prices $1BB Offering of Common Stock & Preferred Shares ------------------------------------------------------------------ CIT Group Inc. priced its concurrent offerings of $1 billion or 91 million shares of common stock and $500 million or 10 million shares of Non-Cumulative Perpetual Convertible Preferred Stock, Series C, with a liquidation preference of $50 per share. CIT has also granted the underwriters for the offerings an over- allotment option to purchase up to 13.65 million additional shares of the common stock and an over-allotment option to purchase up to 1.5 million additional shares of the convertible preferred stock. The offerings are being conducted as public offerings registered under the Securities Act of 1933, as amended. The common stock offering was priced at $11 per share. CIT estimates that the net proceeds from the common stock offering will be approximately $951 million, after deducting underwriting commissions, but before expenses or approximately $1.1 billion, if the underwriters exercise their over-allotment option to purchase additional shares of common stock in full. CIT intends to use the net proceeds from the sale of the common stock for general corporate purposes, including the payment of dividends on its outstanding preferred stock for the second quarter of 2008 in an amount of approximately $8 million and the payment of interest on its outstanding junior subordinated notes in the third quarter of 2008 in an amount of approximately $23 million. CIT estimates that the net proceeds from the convertible preferred stock offering will be approximately $485 million, after deducting underwriting commissions, but before expenses or approximately $558 million, if the underwriters exercise their over-allotment option to purchase additional shares of convertible preferred stock in full. CIT intends to use the net proceeds from the sale of the convertible preferred stock for general corporate purposes. The convertible preferred stock will pay, only when, as and if declared by CIT's board of directors or a duly authorized committee of the board, cash dividends on each March 15, June 15, September 15 and December 15, beginning on June 15, 2008, at a rate per annum equal to 8.75%, payable quarterly in arrears on a non-cumulative basis. Each share of convertible preferred stock will be convertible at any time, at the holder's option, into 3.9526 shares of CIT's common stock, plus cash in lieu of fractional shares, equivalent to an initial conversion price of approximately $12.65 per share of CIT's common stock. The conversion rate will be subject to customary anti-dilution adjustments and will also be adjusted upon the occurrence of certain other events. In addition, on or after June 20, 2015, CIT may cause some or all of the convertible preferred stock to convert provided that CIT's common stock has a closing price exceeding 150% of the then applicable conversion price for 20 trading days during any period of 30 consecutive trading days. J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated, Lehman Brothers Inc. and Citigroup Global Markets Inc. are serving as joint bookrunning managers of these offerings. The offerings will be made under CIT's shelf registration statement filed with the Securities and Exchange Commission. For more information on the offering, contact: -- J.P. Morgan Securities Inc. Attention: Prospectus Department CS Level, 4 Chase Metrotech Center Brooklyn, NY 11245 Tel (718) 242-8002 E-mail addressing.services@jpmorgan.com -- Morgan Stanley & Co. Incorporated Attention: Prospectus Department 2nd Floor, 180 Varick Street New York, NY 10014 Tel 1-866-718-1649 (toll free) E-mail prospectus@morganstanley.com -- Lehman Brothers Inc. c/o Broadridge, Integrated Distribution Services 1155 Long Island Avenue Edgewood, NY 11717 Tel 1-888-603-5847 Fax (631) 254-7140 E-mail qiana.smith@broadridge.com -- Citigroup Global Markets Inc. 8th Floor, Brooklyn Army Terminal 140 58th Street Brooklyn, NY 11220 Tel (718) 765-6732 Fax (718) 765-6734 About CIT Group CIT Group Inc. (NYSE: CIT) -- http://www.cit.com/-- is a global commercial finance company that provides financial products and advisory services to more than one million customers in over 50 countries across 30 industries. A leader in middle market financing, CIT has more than $80 billion in managed assets and provides financial solutions for more than half of the Fortune 1000. A member of the S&P 500 and Fortune 500, it maintains leading positions in asset-based, cash flow and Small Business Administration lending, equipment leasing, vendor financing and factoring. The CIT brand platform, Capital Redefined, articulates its value proposition of providing its customers with the relationship, intellectual and financial capital to yield infinite possibilities. As reported in the Troubled Company Reporter on March 25, 2008, CIT Group drew upon its $7.3 billion in unsecured U.S. bank credit facilities to repay debt maturing in 2008, including commercial paper, and to provide financing to its core commercial franchises. The company failed to draw from its normal operational funding after ratings firms downgraded the bank's debt. CIT HOME: S&P's Rating on Class BF Notes Tumble to 'D' From 'CCC' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class BF asset-backed certificates from CIT Home Equity Loan Trust 2002- 1 to 'D' from 'CCC'. Concurrently, S&P affirmed its ratings on the other eight classes from this transaction. S&P downgraded class BF from loan group 1 to 'D' because it experienced realized losses of $152,667.91 during the March 2008 remittance period. Cumulative realized losses to date for loan group 1 are $33.060 million, or 4.17% of its original principal balance. The affirmations reflect sufficient current and projected credit support percentages to support the ratings at their current levels as of the March 2008 remittance period. S&P will continue to monitor these classes as the transaction continues to realize losses. Credit support for this transaction is provided by subordination, excess interest, and overcollateralization. The underlying collateral consists of fixed- and adjustable-rate, conventional, fully amortizing, closed-end home equity loans secured by first, second, or more junior mortgages on one- to four-family residential properties. Rating Lowered CIT Home Equity Loan Trust 2002-1 Home equity loan asset-backed certificates Rating ------ Class To From ----- -- ---- BF D CCC Ratings Affirmed CIT Home Equity Loan Trust 2002-1 Home equity loan asset-backed certificates Class Rating ----- ------ AF-5 AAA AF-6 AAA AF-7 AAA MF-1 AA MF-2 A AV AAA MV-1 AA+ MV-2 A COMFORCE CORP: Repurchases $6.4 Million of 12% Senior Notes ----------------------------------------------------------- COMFORCE Corporation repurchased $6,498,000 principal amount of 12% Senior Notes due Dec. 1, 2010 at a price equal to 101% of the principal amount, plus accrued interest. The total repurchase price, including accrued interest, was $6,868,386. The company used loan proceeds under its bank credit facility to pay for the repurchase. "Our public debt now stands at $5.2 million as compared to $138.8 million in June 2000," John Fanning, Chairman and Chief Executive Officer of COMFORCE, said. "Based on current interest rates, we expect to save approximately $500,000 annually in interest expense as a result of this repurchase." Headquartered in Woodbury, New York, COMFORCE Corporation (Amex: CFS) -- http://www.comforce.com/-- provides utsourced staffing management services that enable Fortune 1000 companies and other large employers to consolidate, automate and manage staffing, compliance and oversight processes for their contingent workforces. The company also provides specialty staffing, consulting and other outsourcing services to Fortune 1000 companies and other large employers for their healthcare support services, technical and engineering, information technology, telecommunications and other staffing needs. The company operates in three segments -- Human Capital Management Services, Staff Augmentation and Financial Outsourcing Services. * * * As reported in the Troubled Company Reporter on April 3, 2008, COMFORCE Corporation's balance sheet at Dec. 30, 2007, showed total assets of $183.384 million and total liabilities of $192.887 million, resulting to total stockholders' deficit of $9.503 million. CORTS TRUST: S&P Upgrades Rating on $27 Mil. Securities to 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on the $27.0 million fixed-rate corporate-backed trust securities certificates issued by CorTS Trust for Xerox Capital Trust I to 'BB+' from 'BB' and removed it from CreditWatch, where it was placed with positive implications on March 31, 2008. The rating action reflects the April 21, 2008, raising of the rating on the underlying securities, the 8% series B capital securities due Feb. 1, 2027, issued by Xerox Capital Trust I (a subsidiary of Xerox Corp.), to 'BB+' and its removal from CreditWatch positive. CorTS Trust for Xerox Capital Trust I is a pass-through transaction, the rating on which is based solely on the rating assigned to the underlying collateral, the 8% series B capital securities issued by Xerox Capital Trust I. CRITICAL PATH: Burr Pilger Expresses Going Concern Doubt --------------------------------------------------------- Burr, Pilger & Mayer LLP raised substantial doubt about the ability of Critical Path, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor reported that the company has suffered recurring net losses from operations, must repay 13.9% Notes that mature in June 2008, has preferred stock subject to redemption in July 2008 and has limited availability of cash or credit facility. The company explained that its primary sources of capital have come from both debt and equity financings that it has completed over the past several years; and the sale of the Hosted Assets in January 2006 and most recently, the sale of its Supernews Assets in February 2008. In 2003 and 2004, the company secured additional funds through several rounds of financing that involved the sale of senior secured convertible notes all of which converted into Series E preferred stock in 2004. In the third quarter of 2004, the company completed a rights offering, and, in the fourth quarter of 2004, the company secured and drew $11,000,000 from an $18,000,000 round of 13.9% debt financing and in March 2005, drew down the remaining $7,000,000. The company is not required to make any payments of principal or interest under this $18,000,000 debt financing until maturity in June 2008, at which time all principal and interest will become due. In January 2006, the company sold its Hosted Assets for $6,300,000, and in September 2006 and December 2006, the company received from amounts held in escrow $1,000,000 and $100,000, respectively, in connection with the satisfaction of certain post- closing conditions related to the sale. In January 2007, the company received $100,000, the last of the amounts held in escrow as all post-closing conditions related to the sale of the Hosted Assets had been satisfied. In February 2008, the company sold its Supernews Assets for up to $3,200,000 of which $2,500,000 was paid upon closing and the remaining $700,000 will be paid six months after closing if certain post- closing conditions are satisfied. The company's principal sources of liquidity include its cash and cash equivalents. As of Dec. 31, 2007, the company had cash and cash equivalents available for operations totaling $8,600,000, of which $7,100,000 was located in accounts outside the United States and which is not readily available for its domestic operations. Accordingly, at Dec. 31, 2007, the company's readily available cash resources in the United States were $1,500,000. As of Dec. 31, 2007, the company had cash collateralized letters of credit totaling around $200,000 which is recorded as restricted cash on its balance sheet and is not readily available for operations. The company believes that its existing capital resources are not sufficient to fund its current operations beyond the second quarter of 2008. The company posted net loss of $10,436,000 on total revenues of $44,014,000 for the year ended Dec. 31, 2007, as compared with a net loss of $10,966,000 on total revenues of $41,655,000 in the prior year. At Dec. 31, 2007, the company's consolidated balance sheet showed $31,797,000 in total assets and $51,769,000 in total liabilities, $148,588,000 in redeemable preferred stock, and $168,560,000 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $22,209,000 in total current assets available to pay $48,388,000 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2aa2 About Critical Path Critical Path, Inc.'s -- http://www.criticalpath.net/-- Memova(TM) solutions provide a new and improved email experience for millions of consumers worldwide, helping mobile operators, broadband and fixed-line service providers unlock the potential of email in the mass market. Memova(TM) Mobile gives consumers instant, on-the-go access to the messages that matter most. Featuring industry-leading anti-spam and anti-virus technology, Memova(TM) Anti-Abuse protects consumers against viruses and spam. Memova(TM) Messaging provides consumers with a rich email experience, enabling service providers to develop customized offerings for high-speed subscribers. Headquartered in San Francisco with offices around the globe, Critical Path's messaging solutions are deployed by more than 200 service providers throughout the world. CROWN MEDIA: December 31 Balance Sheet Upside-Down by $684 Million ------------------------------------------------------------------ Crown Media Holdings Inc.' balance sheet at Dec. 31, 2007, showed total assets $0.676 billion and total liabilities of $1.360 billion, resulting to a total stockholders' deficit of approximately $0.684 billion. The company reported results for fourth quarter and year ended Dec. 31, 2007, The net loss for the quarter ended Dec. 31, 2007, totaled $37.3 million compared to net loss $30.0 million in the fourth quarter of 2006. Cash provided by continuing operating activities totaled $15.3 million for the fourth quarter of 2007 compared to cash used in continuing operating activities of $12.6 million for the same period last year. For the fourth quarter of 2007, cost of services decreased 3% to $51.5 million from $53.1 million during the same quarter of 2006. Within cost of services, programming expenses decreased 19% quarter over quarter to $39.9 million, due to $16.4 million of NICC program license fees which were written-down to their estimated net realizable values during 2006, offset in part by expensing certain affiliate programming after one airing and continued increases in the market cost of program licenses. The company reported net loss of $159.0 million for the year ended Dec. 31, 2007, compared with net loss of $389.0 million in the prior year period. Cash provided by continuing operating activities totaled $12.6 million for the year ended Dec. 31, 2007, compared to cash used in continuing operating activities of $34.1 million for the same period last year. For the year ended Dec. 31, 2007, cost of services decreased 54% to $202.5 million from $436.2 million during the prior year. Within cost of services, programming expenses increased 8% period over period to $164.4 million. For 2006, impairments of film assets of $225.8 million were recorded. For the year ended Dec. 31, 2006, amortization of film assets was $14.7 million, as compared to a negative expense of $5.3 million for the year ended Dec. 31, 2007, related to a change in estimate of our residual and participation liability. As of Dec. 31, 2007, the company had $2.0 million in cash and cash equivalents on hand. As of Dec. 31, 2007, the company had borrowed $69.5 million from the $130.0 million revolving bank credit facility. Waiver Agreement In March 2008, the bank credit facility was extended until May 31, 2009, and the committed amount of the facility was reduced to $90.0 million. This commitment will decrease to $60.0 million on June 30, 2008, and thereafter, to $50.0 million on Sept. 30, 2008, and $45.0 million on March 31, 2009. The company will use cash flows from operations to reduce outstanding borrowings under the facility and expects these reductions to be sufficient to maintain outstanding borrowings below the commitment levels throughout the term of the facility. In March 2008, the company and Hallmark Cards Incorporated and affiliates of Hallmark Cards entered into an Amended and Restated Waiver Agreement which changes the maturity date of three obligations and defers payments under certain obligations. Previously, the company's tax sharing agreement with Hallmark Cards has also been a source of cash. However, the company does not expect to receive or pay any cash related to this agreement in the next twelve months. Because of the company's possible inability to meet its obligations when they come due on March 31, 2009, and later dates in 2009 through Dec. 31, 2009, the company anticipates that prior to March 2009, it will be necessary to either extend or refinance (i) the bank credit facility and (ii) the promissory notes payable to affiliates of Hallmark Cards. As part of a combination of actions and in order to obtain additional funding, the company may consider various alternatives, including refinancing the bank credit facility, raising additional capital through the issuance of equity or debt securities, or other strategic alternatives. About Crown Media Headquartered in Studio City, California, Crown Media Holdings Inc. (NASDAQ: CRWN) -- http://www.crownmediaholdings.com/-- owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The company currently operates and distributes the Hallmark Channel in the U.S. to approximately 84 million subscribers. The program service is distributed through 5,450 cable systems and communities as well as direct-to-home satellite services across the country. Crown Media also operates a second 24-hour linear channel, Hallmark Movie Channel, and will launch Hallmark Movie Channel HD in April 2008. Significant investors in Crown Media Holdings include: Hallmark Entertainment Holdings Inc., a subsidiary of Hallmark Cards Incorporated, Liberty Media Corp., and J.P. Morgan Partners (BHCA), LP, each through their investments in Hallmark Entertainment Investments Co.; VISN Management Corp., a for-profit subsidiary of the National Interfaith Cable Coalition; and The DIRECTV Group Inc. CSAB MORTGAGE: High Delinquencies Cue Moody's 35 Rating Downgrades ------------------------------------------------------------------ Moody's Investors Service has downgraded the ratings of 35 tranches from 5 Alt-A transactions issued by CSAB. Twenty two tranches remain on review for possible further downgrade. Additionally, 89 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed -rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: CSAB Mortgage Backed Trust 2006-3 -- Cl. A-1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1-B-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1-B-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1-C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-5-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-5-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-5-A, Downgraded to Ca from Ba3 -- Cl. M-5-B, Downgraded to Ca from Ba3 -- Cl. M-6, Downgraded to Ca from B2 -- Cl. M-7, Downgraded to Ca from B3 Issuer: CSAB Mortgage Backed Trust 2006-1 -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to Ca from B1 -- Cl. M-4, Downgraded to Ca from B3 Issuer: CSAB Mortgage Backed Trust 2006-4 -- Cl. A-1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1-C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1-D, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-6-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1-A, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-1-B, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba1 -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to Ca from B2 Issuer: CSAB Mortgage-Backed Trust 2006-2 -- Cl. A-1-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-1-C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3-A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-5-B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-2-A, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-2-B, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Ca from Ba1 -- Cl. M-6, Downgraded to Ca from Ba2 Issuer: CSAB Mortgage-Backed Trust Series 2007-1 -- Cl. 1-A-1A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-1B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-3A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-3B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-6B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-11, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-12, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-13, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-14, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-15, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-16, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-17, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-18, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-19, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-20, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-21, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-22, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-23, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-24, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-25, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-26, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-27, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-28, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-29, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-30, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-8, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-4, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 4-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-7, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 4-A-8, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-M-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 1-M-2, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 1-M-3, Downgraded to B3 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. 1-M-4, Downgraded to Ca from Ba3 -- Cl. 1-M-5, Downgraded to Ca from Caa1 -- Cl. D-B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. D-B-1X, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. D-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-X, Placed on Review for Possible Downgrade, currently Aaa CFSB TRUSTS: Moody's Cuts Ratings on 100 Tranches From 14 Deals --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 100 tranches from 14 Alt-A transactions issued by CSFB. Thirty seven tranches remain on review for possible further downgrade. Additionally, 86 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: Adjustable Rate Mortgage Trust 2006-2 -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 6-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 6-M-2, Downgraded to Caa1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. 6-M-3, Downgraded to Ca from B1 -- Cl. 6-M-4, Downgraded to Ca from Caa2 -- Cl. C-B-1, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. C-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. C-B-3, Downgraded to Ca from B1 Issuer: CSFB Adjustable Rate Mortgage Trust 2005-6A -- Cl. 1-B-3, Downgraded to B2 from Baa2 -- Cl. 1-B-4, Downgraded to Ca from Ba2 -- Cl. 2-B-2, Downgraded to Baa3 from A3 -- Cl. 2-B-3, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CSFB Adjustable Rate Mortgage Trust 2005-8 -- Cl. 7-M-1, Downgraded to A2 from Aa2 -- Cl. 7-M-2, Downgraded to B3 from A2 -- Cl. 7-M-3, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 7-M-4, Downgraded to Caa2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. C-B-3, Downgraded to A3 from A2 -- Cl. C-B-4, Downgraded to Baa1 from A3 -- Cl. C-B-5, Downgraded to Baa3 from Baa2 -- Cl. C-B-6, Downgraded to Ba3 from Baa3 Issuer: CSFB Adjustable Rate Mortgage Trust 2005-9 -- Cl. 1-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 5-M-1, Downgraded to A2 from Aa2 -- Cl. 5-M-2, Downgraded to B3 from A2 -- Cl. 5-M-3, Downgraded to Ca from Ba1 -- Cl. 5-M-4, Downgraded to Ca from B1 -- Cl. 5-M-5, Downgraded to Ca from Caa2 -- Cl. C-B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: CSFB Adjustable Rate Mortgage Trust 2005-10 -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-M-1, Downgraded to Ba2 from Aa2 -- Cl. 5-M-2, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. 5-M-3, Downgraded to Ca from Ba2 -- Cl. 5-M-4, Downgraded to Ca from B2 -- Cl. 6-B-2, Downgraded to A3 from A1 -- Cl. 6-B-3, Downgraded to Ba1 from Baa1 -- Cl. 6-B-4, Downgraded to Caa3 from Ba2 Issuer: CSFB Adjustable Rate Mortgage Trust 2005-11 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-4-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-4-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-M-1, Downgraded to B1 from Aa2 -- Cl. 5-M-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 5-M-3, Downgraded to Ca from B1 -- Cl. 5-M-4, Downgraded to Ca from Caa3 -- Cl. C-B-1, Downgraded to B1 from Aa3 -- Cl. C-B-2, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. C-B-3, Downgraded to Ca from Ba2 Issuer: CSFB Adjustable Rate Mortgage Trust 2005-12 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-M-1, Downgraded to B1 from Aa2 -- Cl. 5-M-2, Downgraded to Ca from Ba1 -- Cl. 5-M-3, Downgraded to Ca from Caa3 -- Cl. C-B-1, Downgraded to B2 from Aa3 -- Cl. C-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. C-B-3, Downgraded to Ca from B2 Issuer: CSFB Adjustable Rate Mortgage Trust 2006-1 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-4, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 6-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-M-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 6-M-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 6-M-3, Downgraded to Ca from Caa2 -- Cl. C-B-1, Downgraded to Ba1 from Aa1 -- Cl. C-B-3, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. C-B-4, Downgraded to Ca from B1 -- Cl. C-B-5, Downgraded to Ca from B2 Issuer: CSFB Adjustable Rate Mortgage Trust 2006-3 -- Cl. 4-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-B-1, Downgraded to Ca from Ba3 -- Cl. 4-M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. 4-M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 4-M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 4-M-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. 4-M-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. 4-M-6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. 4-M-7, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 4-M-8, Downgraded to Ca from Ba1 -- Cl. 4-M-9, Downgraded to Ca from Ba2 -- Cl. C-B-1, Downgraded to Ba3 from Aa2 -- Cl. C-B-2, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. C-B-3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CSFB Adjustable Rate Mortgage Trust 2007-1 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 5-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-3-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-4, Downgraded to B2 from Aaa; Placed Under Review for further Possible Downgrade -- Cl. 5-M-1, Downgraded to B3 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. 5-M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 5-M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 5-M-4, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 5-M-5, Downgraded to Ca from Ba1 -- Cl. 5-M-6, Downgraded to Ca from Ba2 -- Cl. 5-M-7, Downgraded to Ca from B1 -- Cl. 5-M-8, Downgraded to Ca from Caa1 -- Cl. 5-M-9, Downgraded to Ca from Caa3 -- Cl. C-B-1, Downgraded to B2 from Aa2 -- Cl. C-B-2, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. C-B-3, Downgraded to Ca from B3 Issuer: CSFB Adjustable Rate Mortgage Trust 2007-2 -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-M-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 2-M-2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 2-M-3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 2-M-4, Downgraded to Ca from Ba1 -- Cl. 2-M-5, Downgraded to Ca from Ba3 -- Cl. 2-M-6, Downgraded to Ca from B3 -- Cl. 2-M-7, Downgraded to Ca from Caa2 Issuer: CSFB Mortgage-Backed Pass-Through Certificates, Series 2005-10 -- Cl. III-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. III-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. III-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. IV-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. IX-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-10, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. V-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-8, Placed on Review for Possible Downgrade, currently Aaa -- Cl. V-A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. VIII-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. VIII-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. VIII-A-4, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. X-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-A-5, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-B-1, Downgraded to B2 from Aa3 -- Cl. D-B-2, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. D-B-3, Downgraded to Ca from Ba2 -- Cl. D-X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-X-2, Placed on Review for Possible Downgrade, currently Aaa Issuer: CSFB Mortgage-Backed Pass-Through Certificates, Series 2005-11 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 7-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-B-1, Downgraded to B2 from Aa3 -- Cl. D-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. D-B-3, Downgraded to Caa3 from B1 -- Cl. D-B-4, Downgraded to Ca from B2 -- Cl. D-B-5, Downgraded to Ca from B3 -- Cl. D-B-6, Downgraded to Ca from B3 -- Cl. D-X, Placed on Review for Possible Downgrade, currently Aaa Issuer: CSFB Mortgage-Backed Pass-Through Securities, Series 2005- 12 -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 7-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 8-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-3, Downgraded to Ca from B2 -- Cl. B-4, Downgraded to Ca from B3 -- Cl. D-B-1, Downgraded to Baa3 from Aa3 -- Cl. D-B-2, Downgraded to B1 from A3 -- Cl. D-B-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. D-B-4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade CSMC TRUSTS: Moody's Downgrades 46 Tranches' Ratings From 10 Deals ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 46 tranches from 10 Alt-A transactions issued by CSMC. Thirteen tranches remain on review for possible further downgrade. Additionally, 57 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed-rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: CSMC Mortgage-Backed Trust Series 2006-1 -- Cl. D-B-1, Downgraded to A2 from Aa3 -- Cl. D-B-2, Downgraded to Ba3 from A3 -- Cl. D-B-3, Downgraded to B2 from Baa2 -- Cl. D-B-4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CSMC Mortgage-Backed Trust Series 2006-2 -- Cl. D-B-1, Downgraded to A1 from Aa3 -- Cl. D-B-2, Downgraded to Ba2 from A3 -- Cl. D-B-3, Downgraded to B2 from Baa2 Issuer: CSMC Mortgage-Backed Trust Series 2006-3 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-4B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-M-1, Downgraded to B2 from Aa2 -- Cl. 1-M-2, Downgraded to Ca from Ba1 Issuer: CSMC Mortgage-Backed Trust Series 2006-4 -- Cl. 10-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-11, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-12, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-13, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-8, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 4-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 8-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 9-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-B-1, Downgraded to B2 from Aa3 -- Cl. D-B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. D-B-3, Downgraded to Ca from Ba1 -- Cl. D-B-4, Downgraded to Ca from B1 -- Cl. D-B-5, Downgraded to Ca from B2 -- Cl. D-B-6, Downgraded to Ca from B3 -- Cl. D-B-7, Downgraded to Ca from B3 -- Cl. D-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-X, Placed on Review for Possible Downgrade, currently Aaa Issuer: CSMC Mortgage-Backed Trust Series 2006-5 -- Cl. 1-A-2, Downgraded to A1 from Aa1 -- Cl. 2-A-2, Downgraded to A1 from Aa1 -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-7, Downgraded to A1 from Aa1 -- Cl. 3-A-8, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-B-1, Downgraded to B2 from Aa3 -- Cl. D-B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. D-B-3, Downgraded to Ca from B1 -- Cl. D-B-4, Downgraded to Ca from B2 -- Cl. D-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-X, Placed on Review for Possible Downgrade, currently Aaa Issuer: CSMC Mortgage-Backed Trust Series 2006-6 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-11, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-12, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-9, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-6, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-B-1, Downgraded to B2 from Aa3 -- Cl. D-B-2, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. D-B-3, Downgraded to Ca from Ba1 -- Cl. D-B-4, Downgraded to Ca from Ba3 -- Cl. D-P, Placed on Review for Possible Downgrade, currently Aaa -- Cl. D-X, Placed on Review for Possible Downgrade, currently Aaa Issuer: CSMC Mortgage-Backed Trust Series 2006-7 -- Cl. B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. D-B-1, Downgraded to Baa3 from Aa2 -- Cl. D-B-2, Downgraded to Ba3 from Aa3 -- Cl. D-B-3, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. D-B-4, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. D-B-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. D-B-6, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: CSMC Mortgage-Backed Trust Series 2006-9 -- Cl. C-B-3, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: CSMC Mortgage-Backed Trust Series 2007-1 -- Cl. 1-A-1D, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-2C, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-5A, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-5B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-6B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-M-1, Downgraded to B3 from Aa2 -- Cl. 1-M-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. 1-M-3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. 1-M-4, Downgraded to Ca from Ba3 -- Cl. 1-M-5, Downgraded to Ca from B3 -- Cl. 1-B-1, Downgraded to Ca from Caa3 Issuer: CSMC Mortgage-Backed Trust Series 2007-3 -- Cl. 1-A-1B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-3B, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-6B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-M-1, Downgraded to B2 from Aa2 -- Cl. 1-M-2, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. 1-M-3, Downgraded to Ca from B1 -- Cl. 1-M-4, Downgraded to Ca from B3 -- Cl. 1-M-5, Downgraded to Ca from Caa3 CST INDUSTRIES: S&P Retains 'B+' Rating on $35 Mil. Loan Add-on --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' issue-level rating on Kansas City, Kansas-based CST Industries' senior secured term loan due 2013. This follows the proposed $35 million add-on to this term loan, increasing the rated amount to $135 million from $100 million. The recovery rating of '2', indicating the expectation of substantial (70%-90%) recovery of principal in the event of default, remains unchanged. At the same time, S&P affirmed CST's 'B' corporate credit rating. The outlook is stable. The affirmations follow the company's proposed bolt-on acquisition, which will be funded through the $35 million increase in the company's first-lien term loan. "CST has displayed good operating performance, although the rapid recent increase in steel prices could cause some deterioration in operating margin," said Standard & Poor's credit analyst Dan Picciotto. The ratings on CST reflect the company's vulnerable business profile as a participant in the fragmented and competitive metal storage tank market. The ratings also reflect the company's highly leveraged financial profile and thin cash flow protection measures. CST designs, fabricates, and erects factory-coated bolted and welded tanks and aluminum geodesic domes for a variety of end- markets, including water, wastewater, industrial, agricultural, and oilfield. The industry is tied to certain cyclical end- markets and is characterized by rival technologies and by competition among numerous small players based on price, quality, and personal relationships. While the company has leading niche market shares, it participates in a large overall market (metal storage). A diverse customer base with low sales concentration somewhat offsets the risks associated with CST's narrow scope of operations. The company is exposed to the industrial production cycle, but has a meaningful share of the less cyclical water and wastewater markets (which accounts for about 50% of sales). The company has some geographic diversification, making more than 20% of sales abroad, and management intends to expand its sales reach to take advantage of opportunities in the international market. CST benefits from its technical expertise in engineering and tank coatings. The company is somewhat vulnerable to price increases for raw materials (particularly for steel), but has demonstrated an ability to pass through cost increases to customers during periods of strong demand, with timing lags. CT CDO: Fitch Confirms Low-B Ratings on Five Classes of Notes ------------------------------------------------------------- Fitch Ratings upgraded two classes and affirmed 12 classes of notes issued by CT CDO III Ltd. or Corp.(CT CDO III): -- $48.5 million class A-1 notes affirmed at 'AAA'; -- $147.2 million class A-2 notes affirmed at 'AAA'; -- $29 million class B notes upgraded to 'AAA' from 'AA+'; -- $13.7 million class C notes upgraded to 'AA' from 'AA-'; -- $5.1 million class D notes affirmed at 'A+'; -- $6.8 million class E notes affirmed at 'A'; -- $6.8 million class F notes affirmed at 'A-'; -- $9.8 million class G notes affirmed at 'BBB'; -- $11.5 million class H notes affirmed at 'BBB-'; -- $6.8 million class J notes affirmed at 'BB'; -- $3.8 million class K notes affirmed at 'BB-'; -- $5.1 million class L notes affirmed at 'B+'; -- $5.5 million class M notes affirmed at 'B'; -- $4.3 million class N notes affirmed at 'B-'. Classes O, X and the preferred shares class are not rated by Fitch. The current credit enhancement to the rated classes in relation to the improved credit quality of the remaining collateral warrants the upgrades. CT CDO III is a commercial real estate collateralized debt obligation that closed Aug. 4, 2005. The portfolio is a static transaction and primarily backed by commercial mortgage-backed securities B-pieces. CT Investment Co., LLC (rated 'CSS2-' as special servicer by Fitch) selected the initial collateral and serves as the collateral administrator, CT Investment Co., LLC. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of commercial mortgage-backed securities 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. CT CDO III is collateralized by all or a portion of 21 classes of fixed-rate CMBS in 13 separate underlying transactions. All performance and collateral information is based on the March 2008 trustee report. The pool's obligor diversity is considered below average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1996 to 1999 (an average of 10.1 years of seasoning). Approximately 13.3% of the collateral is one first loss bond, which is more susceptible to losses in the near term. The majority of the collateral is rated 'BBB-' or higher (78.1%), including 16.9% that is rated 'AAA'. The CDO has paid down $5.3 million (1.6%) since last review. In addition, 21.4% of the underlying bonds have been upgraded an average of 4.7 notches since last review and no downgrades were experienced. The collateral has realized $1.4 million in losses to date, which represents 0.4% of the original collateral. According to the current trustee report, $34.4 million of the underlying collateral is currently 60 days or more delinquent. Other than the first loss bond, most of the underlying classes have a significant amount of subordination and can therefore withstand future losses to the underlying loans. The ratings of the class A and B notes address the likelihood that investors will receive full and timely payment 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 through H and J through N address the likelihood that investors will receive ultimate interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. CUSTOM DESIGNED: Case Summary & 19 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Custom Designed Cabinetry & Construction, Inc. 964 Washington Ave. South Beloit, IL 61080 Bankruptcy Case No.: 08-71196 Chapter 11 Petition Date: April 21, 2008 Court: Northern District of Illinois (Rockford) Judge: Manuel Barbosa Debtor's Counsel: Bernard J. Natale, Esq. Email: natalelaw@bjnatalelaw.com 6833 Stalter Dr., Ste. 201 Rockford, IL 61108 Tel: (815) 964-4700 Fax: (815) 227-5532 Total Assets: $1,591,713 Total Debts: $1,662,348 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service 941 Taxes through $166,433 Mail Stop 5010 CHI June 30, 2007 230 S. Dearborn St. (Duplicate of that stated on Schedule D) National City Manufacturing Breach of Contract/ $118,860 Finance Lease Attn: Attorney Vincent T. Borst 180 N. Stetson St., Ste. 3400 Chicago, IL 60601 Carpentry & Contract Loans to Company $118,610 Management 1354 Moore Street Beloit, WI 53511 Menards Credit Card $34,077 Alpine Plywood Material Supplier $26,718 ER Solutions, Inc. Collection on $25,588 behalf of CitiBank, USA Jeffrey W. Losinske Personal Loans to $18,948 Company M&I Visa Credit Card $18,883 Hinshaw & Culbertson, LLP Legal $17,272 United Collection Bureau, Inc. Collection on $15,555 behalf of CitiCorp Credit Capital Management Services Collection on $14,394 behalf of First USA/Chase Chase Bank USA, NA Credit Card $14,394 National City Bank Credit Card $12,966 Blitt and Gaines, PC Collection on $10,095 behalf of US Bank N.A. Rayner & Rinn-Scott, Inc. Material Supplier $9,534 US Bank Cardmember Services Credit Card $9,482 Oliver, Close, Worden, Legal Services $9,012 Baer Supply Co. Material Supplier $8,901 Phillips & Cohen Associates, Collection on $8,696 Ltd. behalf of Advanta COVENANT WORSHIP: Case Summary & 18 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Covenant Worship Center fka First Apostolic Church of Inglewood fka New Bethel Apostolic Church 425 S. La Brea Ave. Inglewood, CA 90301 Bankruptcy Case No.: 08-15264 Type of Business: The Debtor is a religious organization. Chapter 11 Petition Date: April 21, 2008 Court: Central District Of California (Los Angeles) Judge: Sheri Bluebond Debtor's Counsel: James R. Selth, Esq. Email: jim@wsrlaw.net Weintraub & Selth, APC 12424 Wilshire Blvd. Ste. 1120 Los Angeles, CA 90025 Tel: (310) 207-1494 Fax: (310) 207-0660 http://www.wsrlaw.net/ Total Assets: $8,250,959 Total Debts: $3,808,542 Debtor's 18 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Paglia & Associates $90,000 Construction, Inc. 2651 Saturn St. Brea, CA 92821 Key Equipment Finance $40,000 1000 South McCaslin Blvd. Superior, CO 80027 Attn: McCarthy, Burgess & Wolff 26000 Cannon Road Cleveland, OH 44146 Wells Fargo Business $28,215 Mastercard P.O. Box 54349 Los Angeles, CA 90054-0349 Attn: Wells Fargo Bank P.O. Box 4233 Portland, OR 97208-4233 Bank of America $10,654 AT&T Smart Yellow Pages $6,225 Russell A. Holland & Co. $5,150 City Of Inglewood $4,851 CIT Technology Finance $3,361 Service, Inc. Dell Financial Services $3,068 National Church Purchasing $3,065 Group M/A Design Group $3,023 AZ Geo Technics, Inc. $2,482 ACCO Engineered Systems $2,162 Urban Ministries, Inc. $2,002 Digital Office Systems $1,559 Instant Print of Inglewood $1,410 Air Conditioning Co., Inc. $1,221 AT&T $1,014 DANA CORP: Seeks Dismissal of Asbestos Claimants Appeal re Plan --------------------------------------------------------------- Dana Corp. and its debtor-affiliates ask the U.S. District Court for the Southern District of New York to dismiss the consolidated appeals of the Ad Hoc Committee of Asbestos Personal Injury Claimants and Jose Angel Valdez on the ground that the Appeals are equitably moot because the Third Amended Joint Plan of Reorganization has been substantially consummated. Corinne Ball, Esq. at Jones Day LLP, in New York, relates that since the Plan became effective in Jan. 31, 2008, the Reorganized Debtors have take numerous irreversible steps to implement the Plan, including: -- creation a new holding company, New Dana Holdco, which received a new preferred stock equity investment of $790,000,000 from 24 different new equity investors; -- repayment of the DIP Loan and Borrowing under the $1,350,000,000, Exit Facility; -- transfer of operating assets to New Dana Holdco and distribution of cash and common stock to creditors; -- termination of retiree benefits and funding of voluntary employment beneficiary association trust; and -- assignment of collective bargaining agreements to New Dana Holdco, freezing of pension plans, and assumption and rejection of executory contracts. These steps, along with the myriad of other transactions implementing the Plan have resulted in its substantial consummation. As a result of the failure of Asbestos Claimants to obtain a stay of the Confirmation Order . . . it is no longer possible . . . for this or any other court to undo the Restructuring Transactions that are the subject of these appeals, Ms. Ball argues. According to Ms. Ball, if the District Court overturns the Confirmation Order and belatedly revokes the Plan, all parties- in-interest must be returned to the status quo that existed just prior to the Effective Date. With the reinstatement of the status quo -- which would require, among other things, disgorgement by creditors of all cash and stock distributions made by the Reorganized Debtors -- is impossible, she argues. Seeking to undo these transactions is impossible and grossly inequitable, Ms. Ball further argues. Furthermore, the parties funding the Reorganized Debtors' Exit Facility cannot be returned to the status quo. Ms. Ball notes that the Asbestos Claimants have failed to show clear error in the Confirmation Order's factual findings or legal error in its conclusions of law. She adds that the Asbestos Claimants made no attempt either to seek a stay of the Confirmation Order or to expedite their appeals. Ms. Ball tells the Court that the Asbestos Claims were not impaired by the Plan. The record shows, and the Bankruptcy Court found, that Asbestos Claims were left unimpaired by the Plan, and because the Asbestos Claims are unimpaired, the Bankruptcy Court properly held that the "best interests of creditors" test did not apply to Class 3 Asbestos Claims. Ms. Ball further argues that the Asbestos Claimants' attempt to equate the restructuring transactions with that of the creation of a trust under Section 524(g) of the Bankruptcy Code misrepresents the effect of the Plan. She points out that none of the hallmarks of a Section 524(g) plan are present in the Plan or exhibited by Reorganized Dana. Asbestos Claimants Talk Back Counsel to the Asbestos Committee, Douglas Tabachnik, Esq. at Law Offices of Douglas T. Tabachnik, in Freehold, New Jersey, argues that the Reorganized Debtors mischaracterize the law of "equitable mootness" to avoid the fatal flaws in their Plan. According to Mr. Tabachnik, the Reorganized Debtors mistakenly contend that "substantial consummation" of the Plan somehow equates to "equitably moot" as a grounds for dismissal of the Appeals. "This is simply a misstatement of the law," Mr. Tabachnik says. "Courts have repeatedly held that 'substantial consummation' is not a magic incantation that automatically results in an appeal being dismissed. Because effective relief remains available, the Asbestos Committee's failure to obtain a stay pending this appeal does not render the appeal moot," he adds. Mr. Tabachnik maintains that the Asbestos Claimants merely ask that the Court modify the Confirmation Order in a very straightforward way without undoing a single Restructuring Transaction. He says the Court can simply interlineate a new clause into the Confirmation Order making clear that the Class 3 asbestos personal injury claimants are not being left without recourse against the assets that were shuttled out of the Debtors. He adds that the relief sought by the Appellants would not affect the financing obtained by the Debtors. The Asbestos Claimants assert that the Reorganized Debtors woefully mischaracterize their arguments with respect to Section 524(g). Mr. Tabachnik says the Appellants have never argued that Debtors must invoke Section 524(g) to effectively reorganize. Rather, he says, Appellants argue that Reorganized Debtors' chosen Plan structure requires them to comply with Section 525(g). The Asbestos Claimants maintain that the Plan does not provide identical treatment to all asbestos personal injury claims. The mere fact that the thousands of claims secretly settled on the eve of confirmation are secured by an escrow fund establishes the unequal treatment that the Bankruptcy Code forbids, Mr. Tabachnik says. About Dana Corp. Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a total shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 12, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's $650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's $1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. DANA CORP: UAW Supports $2.5MM Success Fee to Potoc and Co. ----------------------------------------------------------- The International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America, AFL-CIO, commonly known as the UAW, supports the request of United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union for payment of a $2,500,000 success fee to its financial advisor, Potok and Co., Inc. "The UAW and the USW worked closely together with the Debtors to restructure the Debtors' operations, to secure equity financing, and to put together a plan of reorganization that permitted the Debtors to emerge from bankruptcy and operate as a viable enterprise post-emergence," Niraj R. Ganatra, associate general counsel for the International Union of UAW, said. Mr. Ganatra adds that Potok was essential to those efforts. Mr. Ganatra relates that because of the extraordinary efforts of the Unions and Potok, and other key constituencies, the Debtors were able to reorganize before the crisis in the capital markets took hold. "Potok is entitled to a success fee of $2.5 million, for its substantial contribution in the Debtors' emergence from Chapter 11," Mr. Ganatra maintained. Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a total shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 12, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's $650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's $1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. DANKA BUSINESS: Plans to Distribute $6.5 Million to Shareholders ---------------------------------------------------------------- Danka Business Systems Plc intends to allocate $6.5 million to its shareholders after it filed for liquidation under British Law, Thomson Financial News reports. Based on the report, Danka reached a deed of undertaking with holders of 6.5% senior convertible shares. As reported in the Troubled Company Reporter on April 10, 2008, Danka signed a definitive agreement with Konica Minolta Business Solutions U.S.A., Inc., enabling Konica Minolta to acquire the company's wholly owned U.S. subsidiary, Danka Office Imaging Company, through which Danka conducts its business operations. Under the terms of the agreement, the total purchase price is expected to be approximately $240 million. The transaction is expected to close by June 30, 2008. The deal is subject to a number of regulatory and other closing conditions, in both the United States and the United Kingdom, including approval of the transaction by Danka's shareholders. The transaction contemplates that Danka Business Systems PLC, the holding company, will sell to Konica Minolta the stock in its U.S. operations, Danka Office Imaging Company. Once completed, the holding company will distribute proceeds from the sale to debt and shareholders through a British process of voluntary liquidation, which will also need to be approved by Danka shareholders. About Danka Business Danka Business Systems PLC (LON: DNK) -- http://www.danka.com/-- offers document solutions, including office imaging equipment, software, support, and related services and supplies in the United States. It offers office imaging products, services, supplies and solutions, including digital and color copiers, digital and color multifunction peripherals printers, facsimile machines and software. It also provides a range of contract services, including professional and consulting services, maintenance, supplies, leasing arrangements, technical support and training, collectively referred to as Danka Document Services. The company's revenue is generated from two primary sources: new retail equipment, supplies and related sales, and service contracts. Danka sells Canon products, as well as Kodak, Toshiba and Hewlett-Packard. On Aug. 31, 2006, the company sold its subsidiary, Danka Australasia, PTY Limited, to Onesource Group Limited. In January 2007, the company disposed of its European businesses to Ricoh Europe B.V. As reported in the Troubled Company Reporter on Feb. 7, 20008, the company's Dec. 31, 2007 balance sheet showed total assets of $233.5 million, total liabilities of $225.0 million, 6.5% senior convertible participating shares of $362.6 million, and total stockholders' deficit of $354.1 million. DAN RIVER: Gets Initial Approval to Access $30 Million Facility --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized Dan River Inc. and its debtor-affiliates to obtain, on an interim basis, up to $30 million in postpetition financing, Bill Rochelle of Bloomberg News reports. The Debtors had asked the Court for permission to access up to $32 million in postpetition financing from GMAC Commercial Finance LLC in its capacity as agent for itself and other financial institutions. The proceeds of the financing will be used to fund the operation of the Debtors' business in attempt to manage and maximize the value of their assets. The DIP loan will bear interest at a per annum rate equal to the Base Rate in effect from time to time plus 4%. The Debtors agree to pay a $500,000 DIP fee. The DIP financing agreement is subject to a $250,000 carve-out for payment of statutory fees to the U.S. Trustee, Clerk of Court fees and other professional advisors to the Debtors and committee. The agreement contains appropriate and conditional events of default. To secure their DIP obligations, the Debtors granted GMAC Commercial security interests and superpriority administrative expense status pursuant to Section 105 and 364(c) of the Bankruptcy Code. As part of the agreement, GMAC Commercial can purchase all accounts receivable generated by the Debtors from the sale of any merchandise. Indebtedness On Jan. 11, 2008, the Debtors and GMAC Commercial entered into a certain loan and security agreement that provides up to $55,000,000 in revolving loans as additional working capital for the Debtors. The loan was also used to pay remaining debt to the Debtor's secured lender, CapitalSource Finance LLC. The GMAC revolver is secured by substantially all of the Debtors' assets. As of April 18, 2008, the Debtors owed GMAC Commercial at least $25,065,332 under the revolver. As of April 2008, the Debtors owed GHCL International Inc. and GHCL Inc. at least $73,062,261 in the aggregate. The GHCL loan is secured by substantially all of the Debtors' assets and junior to the liens in favor of GMAC Commercial. The GHCL entities are presently the sole shareholders of the Debtors. About Dan River Headquartered in Danville, Virginia, Dan River Inc. -- http://www.www.danriver.com/-- manufacture and market textile products for the home fashions, apparel fabrics and industrial markets. The company first filed for chapter 11 protection on March 31, 2004 (Bankr. N.D. Ga. Case No. 04-10990). James A. Pardo, Jr., Esq., at King & Spalding, represented them in their restructuring efforts. The Debtor listed $441,800,000 in total assets and $371,800,000 in total debts. The Court confirmed the Debtors' Plan of Reorganization on Jan. 18, 2005, and the plan took effect on Feb. 14, 2005. The company and four of its affiliates filed for Chapter 11 protection on April 20, 2008 (Bankr. D. Del. Lead Case No.08- 10727). Margaret M. Manning, Esq., at Whiteford Taylor & Preston, represents the Debtors in their restructuring efforts. As of April 20, the Debtors listed assets between $50 million to $100 million and debts between $100 million to $500 million. DIASTAR INC: Lender Asks Court for Temporary Restraining Order -------------------------------------------------------------- Rosenthal & Rosenthal Inc., Diastar Inc.'s primary secured lender, asks the U.S. Bankruptcy Court for the District of New Jersey to issue a temporary restraining order against the Debtor for breach of contract and misconduct pertaining to financing covenants. Specifically, Rosenthal wants the Court to enjoin the Debtor from the use, transfer, concealment, assignment, and sale of the property and assets of the Debtor that have been pledged to Rosenthal as collateral and with respect to certain property consigned to the Debtor as security for a credit facility of $5 million extended by Rosenthal to the Debtor. In the alternative, Rosenthal seeks a preliminary injunction, similarly enjoining the Debtor until further Court order. Financing Agreement Rosenthal entered into a financing agreement with Diastar, pursuant to which Rosenthal extended to Diastar a revolving line of credit and other financial accommodations up to $5,000,000. Rosenthal arranged for Diastar to acquire, from time to time, consignment of fine troy ounces of gold to be used in Diastar's manufacturing of jewelry merchandise. Diastar was to use the consigned gold in the ordinary course of business. In addition, the credit facility called for a sub-facility for the purpose of acquiring the consigned gold, which was the lesser of $3.5 million or 5,000 FTO of gold. The Debtor granted to Rosenthal a security interest and a continuing lien upon all accounts receivables, inventory, equipment, financial assets, general intangibles, contract rights, documents, deposit accounts, intellectual property, plus all other assets and proceeds of Diastar. Over time, the Debtor and Rosenthal entered into subsequent security and consignment agreements, and amendments to these covenants. Defaults and Misconduct As a result of a field examination conducted by Rosenthal's representatives, it was determined that Diastar was in an overadvance position that exceeded the permitted $396,000. At that time, Diastar also informed Rosenthal of a judgment that had been entered against it in the approximate amount of $296,312. Diastar further advised Rosenthal that it was able to work out a compromise of the New York Judgment and requested that Rosenthal advance $225,000 to satisfy the New York Judgment because Diastar did not have the funds. The New York Judgment and the additional overadvance constituted Events of Default under the financing agreement. Despite repeated waivers and extensions given by Rosenthal, the Debtor failed to cure the default. Early this year, in light of the overadvance position of Diastar, its continuing poor operations and slow collections of its accounts receivable, little to no current sales and virtually no orders for future shipments, Rosenthal requested and was granted by Diastar authority to transfer a portion of the consigned gold and other pledged assets consisting of semi-precious stones, silver and diamonds, under Rosenthal's control in order to safeguard the collateral. At the same time, Rosenthal engaged the firm of Bourget & Associates to test and compile an inventory of the consigned gold located in an agreed containment facility and confirm the quantities of the consigned gold. However, the Debtor was unable to produce any inventory or financial reports for Bourget's examination. The Debtor also failed to provide Bourget with any recent reports or records concerning the location of consigned gold. As a result, Bourget's examiners initially were unable to confirm the specific amounts of consigned gold at the containment facility or with Diastar's customers and processors at third party locations. Rosenthal, through Bourget, subsequently discovered shortfalls of consigned gold in increasing amounts. According to Rosenthal's records, as of the bankruptcy filing, Diastar owes Rosenthal at least $5,674,059, which comprises: a) the current consignment balance of consigned gold amounting to $3,472,914; plus b) a principal balance due on the revolving loan in the amount of $2,201,144; plus c) interest, fees and charges as provided in the financing agreement. Rosenthal's Complaints Rosenthal lamented to the Court, among others: * a shortfall of over $1,000,000 in consigned gold in the possession of the Debtor on consignment from Rosenthal; * the Debtor's acknowledgment of the shortfall in consigned gold and complete failure and inability to explain how the shortfall occurred or to provide any documentation with respect to the location of the collateral; * the general unwillingness of the Debtor's principals to work with Rosenthal as demonstrated by the threats of one of the Debtor's principals to "take people down with him"; * the Debtor's unwillingness to secure the consigned gold and protect it for the benefit of Rosenthal by placing it in an unauthorized place; * the Debtor's repeated failure to provide Rosenthal with a business plan for its future operations and to address the issue of the missing consigned gold; and * the Debtor's inability to pay for insurance coverage with respect to the collateral. Given this trend, Rosenthal says, it is clear that the remaining assets are in jeopardy of being dissipated or concealed in the same or similar manner since, by its size and nature, the Collateral can be easily transferred and dissipated. Rosenthal tells the Court that the estate's creditors will be irreparably harmed if Diastar is allowed to continue its present course of dissipating and concealing what is left of the Debtor's assets. Rosenthal admitted that it has no faith in the Debtor to act as a fiduciary for any of its creditors since it cannot account for the location of a substantial portion of the consigned goods. About Diastar Based in West New York, New Jersey, Diastar, Inc. manufactures and distributes jewelry. The company filed for Chapter 11 protection on March 17, 2008 (Bankr. D. N.J. Case No. 08-14641). Gilberto M. Garcia, Esq., at Garcia & Kricko, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total debts of $10,042,834. It did not disclose its total assets. DIOMED HOLDINGS: Committee Wants Goulston & Storrs as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Diomed Holdings Inc. and Diomed Inc. asked the authority of the U.S. Bankruptcy Court for the District of Massachusetts to engage Goulston & Storrs P.C. as its counsel, effective as of March 24, 2008. The firm, among others, will advise the Committee with respect to its rights and responsibilities under the Bankruptcy Code and perform other necessary legal services in the case. Goulston & Storrs' rates for attorneys range from $245 to $860 per hour and rates for paralegals range from $145 to $330 per hour. The proposed counsel to the Committee are Douglas B. Rosner, Esq., and Vanessa V. Peck, Esq. The Committee, which was formed by the U.S. Trustee on March 24, 2008, asserted that its chosen counsel are in good standing and does not have any adverse interest in the case. The firm can be reached at: Goulston & Storrs P.C. 400 Atlantic Avenue Boston, MA 02110 Tel: (617) 482-1776 Fax: (617) 574-4112 About Diomed Holdings Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX: DIO) -- http://www.evlt.com/and http://www.diomedinc.com/-- develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications. Diomed Holdings has no assets other than its 100% ownership in Diomed Inc., its operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the United Kingdom and Diolaser Mexico SA de CV in Mexico. The company and its affiliate, Diomed Inc., filed for Chapter 11 protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart LLP, is the Debtors local counsel and McGuireWoods LLP is its general counsel. The company's schedules show total assets of $19,936,479 and total liabilities of $14,743,485. The American Stock Exchange delisting of Diomed's stock is effective on April 28, 2008, unless postponed by the Securities and Exchange Commission. DIOMED HOLDINGS: Seeks OK to Hire Choate Hall as Local Counsel -------------------------------------------------------------- Diomed Holdings Inc. and Diomed Inc. sought permission from the U.S. Bankruptcy Court for the District of Massachusetts to employ Choate Hall & Stewart LLP as its local counsel. The firm is expected to, among others, advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their businesses. Hourly rates of the firm range from $285 to $575 for attorneys and $155 for paralegals. The Debtor paid $40,000 retainer to Choate on March 13, 2008. The firm can be reached at: Douglas R. Gooding, Esq. (DGooding@choate.com) Lisa E. Herrington, Esq. (LHerrington@choate.com) Choate Hall & Stewart LLP Two International Place Boston, MA 02110 Tel: (617) 248-5000 Fax: (617) 248-4000 The Debtors told the Court that Choate's services will complement and not duplicate the services of its proposed general counsel, McGuireWoods LLP. About Diomed Holdings Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX: DIO) -- http://www.evlt.com/and http://www.diomedinc.com/-- develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications. Diomed Holdings has no assets other than its 100% ownership in Diomed Inc., its operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the United Kingdom and Diolaser Mexico SA de CV in Mexico. The company and its affiliate, Diomed Inc., filed for Chapter 11 protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart LLP, is the Debtors local counsel and McGuireWoods LLP is its general counsel. The company's schedules show total assets of $19,936,479 and total liabilities of $14,743,485. The American Stock Exchange delisting of Diomed's stock is effective on April 28, 2008, unless postponed by the Securities and Exchange Commission. DIOMED HOLDINGS: Various Patent Suits Cost $11.82MM in Five years ----------------------------------------------------------------- In a document filed by Diomed Holdings Inc. and Diomed Inc. with the U.S. Bankruptcy Court for the District of Massachusetts, the Debtors revealed that in the past five years, Diomed Inc. spent about $11.82 million in prosecuting and defending patent litigation. Proprietary rights are at the core of the company's business. Currently, Diomed Inc. holds judgments totaling about $14.70 million against competitors for damages arising from infringement of the company's EVLT(R) patent, which awards are subject to appeal and was set for hearing on April 10, 2008, in Washington, D.C. Also, Diomed Inc. said it is a plaintiff in three other patent infringement suits against three additional competitors. The company is currently a defendant in a patent infringement lawsuit filed by another competitor. Diomed Inc. asserted counterclaims in that lawsuit to which it is a defendant. About Diomed Holdings Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX: DIO) -- http://www.evlt.com/and http://www.diomedinc.com/-- develops and commercializes minimal and micro-invasive medical procedures that use its proprietary laser technologies and disposable products. Diomed's EVLT(R) laser vein ablation procedure is used in varicose vein treatments. Diomed also provides photodynamic therapy for use in cancer treatments, and dental and general surgical applications. Diomed Holdings has no assets other than its 100% ownership in Diomed Inc., its operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the United Kingdom and Diolaser Mexico SA de CV in Mexico. The company and its affiliate, Diomed Inc., filed for Chapter 11 protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750 and 08-40749). Douglas R. Gooding, Esq., at Choate Hall & Stewart LLP, is the Debtors local counsel and McGuireWoods LLP is its general counsel. The company's schedules show total assets of $19,936,479 and total liabilities of $14,743,485. The American Stock Exchange delisting of Diomed's stock is effective on April 28, 2008, unless postponed by the Securities and Exchange Commission. Fitch Ratings-New York-23 April 2008: Fitch Ratings has affirmed DRS Technologies, Inc. (DRS) Issuer Default Rating (IDR) and outstanding credit ratings as follows: --IDR 'B+'; --Senior secured revolving credit facility 'BB+/RR1'; --Senior secured term loan 'BB+/RR1'; --Senior unsecured notes 'BB+/RR1'; --Senior unsecured convertible notes 'BB+/RR1'; --Senior subordinated notes 'B/RR5'. Approximately $1.66 billion of outstanding debt is affected by these actions. Fitch has also revised DRS' Rating Outlook to Positive from Stable. The Rating Outlook revision is based on positive fundamental trends and a favorable operating environment. As DRS moves into fiscal year (FY) 2009, Fitch expects that the company's earnings and cash flow will likely improve and leverage will likely continue to decline. Fitch also expects that DRS will likely continue to make modest debt repayments to move closer to its target leverage ratio of 3.0 times (x)-3.5x. DRS' ratings and Outlook incorporate expectations for healthy levels of free cash flow and the assumption that smaller bolt-on acquisitions will continue to be part of the company's strategy. In addition, the Outlook is supported by continued strong U.S. defense budgets and the continuing benefits of supplemental budgets for the foreseeable future. If DRS maintains commitment to lower leverage, the ratings could be reviewed for an upgrade in the coming year. However, the company's financial strategy continues to incorporate growth through acquisitions and if substantive acquisitions occur, the ratings and Outlook could be constrained, depending on deal size and potential financing structure. Reductions in spending for Iraq and Afghanistan could also constrain the ratings. The ratings are supported by continued high levels of defense spending, strong organic growth, good free cash flow generation, expected growth in homeland security spending, and good profitability. The ratings also consider DRS' diversification within the defense and homeland security arena, and the alignment between DRS' products and services and expected Department of Defense (DoD) and Homeland Security needs. Concerns relate to future acquisition plans, relatively high exposure to current operations in Iraq and Afghanistan (and associated supplemental funding), high debt levels and leverage, modest margin contraction, and some concern about execution on new programs (following the Thermal Weapon Systems II program set back in fiscal first quarter-2007). Fitch's Recovery Rating (RR) analysis indicates that, in a hypothetical distressed scenario, the senior secured revolver and term debt would obtain full recovery. After paying off bank debt, Fitch estimates there would be sufficient enterprise value to also fully cover the $350 million, 6.625% senior unsecured notes and the $345 million, 2% convertible senior notes. The expected full recovery on these tranches warrants the 'RR1' rating and each issue is notched three levels above the IDR to 'BB+', in line with the bank facility. The senior subordinated notes achieve an estimated recovery at the high end of the 'RR5' category range (11% - 30%), and are therefore rated one notch below the IDR at 'B'. DRS is strategically and competitively well positioned for sustainable cash flow and earnings generation. Strong organic growth, a diverse product mix, and product offerings aligned with the increasingly high-tech needs of the armed forces, all lend to DRS' strong operating profile and prospects for continued credit support. DRS achieved organic revenue growth of 17% for the first nine months of fiscal 2008 as a number of programs converted from development to production. Organic growth was 14.8% in fiscal 2007, and 13% in FY 2006. As DRS has historically been acquisitive, the healthy growth rates in existing business is a positive sign of the underlying strength of its position (as well as a reflection of the favorable defense environment). Funded backlog grew 18% for the first nine months of FY 2008 ended Dec. 31, 2007 to $3.6 billion. The book to bill ratio was 1.23x for the same period. Leverage has been declining steadily since early 2006 when ESSI was acquired, which boosted leverage from 4.0x to 7.6x at FYE March 31, 2006. DRS has been consistently making modest debt repayments since second fiscal quarter-2007. Total Debt/EBITDA for the LTM period ended Dec. 31, 2007 was 4.3x. Fitch expects that the company will continue to make debt repayments on its term loan facility in FY 2009. Term loan outstanding was $145.2 million at Dec. 31, 2007. In the absence of significant acquisitions or lower supplemental defense spending, Fitch expects DRS' leverage will move below 4.0x, while EBITDA interest coverage should move above 4.0x during the coming year. DRS has benefited from the conflicts in Iraq and Afghanistan, which continue to appear to be long-term commitments. Revenues related to these operations could account for nearly 10% of DRS' turnover. With the prospect of a new US president being elected, there is some possibility that the commitment to these conflicts will be reduced or eliminated. The current conflicts have been funded in large measure through supplemental DoD appropriations, and Fitch believes these supplemental budgets could be affected as soon as fiscal 2009 under a new president. If there were an abrupt reduction, DRS would likely feel limited immediate impact as existing equipment is reset. However, a drawdown of operations would eventually have some impact on DRS, as the majority of revenues are related to the US Army and several of the company's top revenue generating products are directly related to active engagement of forces. Fitch views this exposure as an intermediate term risk that could act as a constraint on the ratings, depending on the speed of any potential drawdown of operations, as well as potential offsetting organic or acquired growth. As of Dec. 31, 2007, liquidity totaled $416.5 million, comprised of $48 million in cash and $368.5 million of available revolver. Scheduled debt maturities of about $5 million per year for the next several years are modest. The current credit facility expires in 2012 and 2013. Fitch believes that DRS' capital structure is stable and sustainable as over 90% of total debt is fixed rate with an extended, laddered maturity profile. EASTMAN KODAK: S&P Changes Outlook to Stable; Holds 'B+' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Eastman Kodak Co. to stable from negative. At the same time, S&P affirmed the ratings, including the 'B+' corporate credit rating. "The outlook change reflects our opinion that a near-term downgrade is unlikely," explained Standard & Poor's credit analyst Tulip Lim. Kodak has substantial liquid resources. Additionally, S&P believes that absent significant acquisitions or sharp earnings deterioration, leverage is not likely to increase in the near- term. S&P also expect that the company's discretionary cash flow generation will improve this year because it will be making less cash restructuring payments than it did last year. S&P believes that Kodak may be starting to gain some traction with its digital business, reducing its exposure to the secular decline of its traditional products. The rating reflects Standard & Poor's concern about the company's earnings and cash flow prospects in light of the ongoing and rapid deterioration of its traditional consumer imaging business, the unproven long-term profit potential of its consumer digital imaging businesses, its still-meaningful cash restructuring costs, and its leveraged financial profile. Kodak's substantial cash balances, competitive positions in various digital imaging markets, some business diversity provided by the Graphic Communications Group, and S&P's expectation that cash restructuring costs will subside in 2009, only partially offset these risks. EMI GROUP: Restructuring Continues Despite Contractual Hurdles -------------------------------------------------------------- EMI Group Plc reiterated that its planned restructuring is on track despite contractual obstacles on implementing it, Reuters reports. Reuters' sources said some challenges appeared and slowed down EMI's restructuring plan. The issues include: * "key man" clauses in contracts that allow artists to leave EMI if a label president or A&R executive who signed the act leaves or is fired; * clauses in executive contracts that allow top employees to leave if their responsibilities change or the company comes under new ownership or management; and * meeting deadlines by certain sectors of the company. An EMI executive confirmed to Reuters that the overall restructuring is slow "because some people are missing their deadlines. The sources commented to Reuters that Terra Firma, which acquired EMI in August 2007 for GBP2.4 billion, may not have realized the extent to which the "key man" contracts exist within the label. Reuters' sources added that a number top EMI executives want to leave, claiming breach of contract due to impending changes in title or responsibilities. The sources said EMI is fighting executives in instances where it believes it is in the right. As reported in the Troubled Company Reporter on Jan. 22, 2008, Terra Firma had unveiled a restructuring plan for EMI. The plan entails: * positioning EMI's labels to ensure they will be completely focused on A&R and maximizing the potential of all their artists; * developing a new partnership with artists, based on transparency and trust, and helping all artists monetise the value of their work by opening new income streams such as enhanced digital services and corporate sponsorship arrangements; * bringing together all the group's key support activities including sales, marketing manufacturing and distribution into a single division with a unified global leadership; and * the elimination of significant duplications within the group to simplify processes and reduce waste. The changes, which will be implemented over the next six months, will enable the group to invest more in its A&R operations both to identify and sign promising new artists and to maximize the potential of its existing roster. About Terra Firma Terra Firma is a leading European private equity firm, created in 2002 as the independent successor to the Principal Finance Group, a division of Nomura that was created in 1994. Terra Firma focuses on buyouts of large, asset-rich and complex businesses in need of operational and/or strategic change. About EMI Group plc Headquartered in London, United Kingdom, EMI Group PLC -- http://www.emigroup.com/-- is the world's largest independent music company, operating directly in 50 countries, with licensees in a further 20 and employs around 5,500 people. The group has operations in Brazil and China among others. In August 2007 EMI was acquired by private equity firm Terra Firma. At March 31, 2007, EMI Group's consolidated balance sheet revealed GBP1.5 billion in total assets, GBP2.65 billion in total liabilities resulting to GBP1.15 billion in shareholders' deficit. EPIC CYCLE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Epic Cycle Interactive, Inc. 525 B Street San Diego, CA 92101 Bankruptcy Case No.: 08-03289 Type of Business: The Debtor is an Internet services firm that provides integrated e-business solutions to emerging growth and medium-sized organizations. See http://www.epiccycle.com/ Chapter 11 Petition Date: April 22, 2008 Court: Southern District of California (San Diego) Debtor's Counsel: William M. Rathbone, Esq. Email: wrathbone@gordonrees.com Gordon & Rees, LLP 101 West Broadway, Ste. 1600 San Diego, CA 92101 Tel: (619) 696-6700 Fax: (619) 696-7124 http://www.gordonrees.com/ Estimated Assets: Unknown Estimated Debts: $1 million to $10 million Debtors' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dolphin Equity Parallel & $266,667 Comm. 750 Lexington Ave., 16th Fl. New York, NY 10022 Newlight Associates LLP & BVI $133,333 245 Fifth Ave., 25th Fl. New York, NY 10016 Hines 525 B. Street, LP $126,825 Dept. 33738 P.O. Box 39000 San Francisco, CA 94139 Jones Day $120,167 Cisco Capital $108,273 Procopio Cory Hargreaves & $76,774 Sav. Dell Financial Services $51,517 Comscore Networks, Inc. $40,000 Robert French $29,500 Blue Star Media/Dallas Cowboys $27,632 Francis Costello $24,238 Detroit Redwings $21,524 New England Patriots $17,091 Jump TV USA Holdco., Inc. $16,960 San Diego Chargers $13,724 Philadelphia 76ers $13,488 Pittsburgh Penguins $7,048 Cleveland Cavaliers $6,838 Droisy's, Inc. $6,028 Boston Celtics $6,025 EQUIFIRST LOAN: Moody's Downgrades Ratings on Nine Tranches ----------------------------------------------------------- Moody's Investors Service downgraded the ratings of 9 tranches from 1 subprime RMBS transaction issued by EquiFirst. Three downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: EquiFirst Loan Securitization Trust 2007-1 -- Cl. M-1, Downgraded to A1 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa2 -- Cl. M-3, Downgraded to Ba3 from Aa3 -- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Caa1 from Baa3 -- Cl. B-2, Downgraded to Caa2 from Ba3 -- Cl. B-3, Downgraded to Caa3 from B2 FIRST NLC: Higher Delinquency Rates Cues Moody's 25 Rating Cuts --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 25 tranches from 3 subprime RMBS transactions issued by First NLC Trust. Nine downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: First NLC Trust 2005-3 -- Cl. M-3, Downgraded to Baa2 from A3 -- Cl. M-4, Downgraded to B1 from Baa1 -- Cl. M-5, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa2 from Baa3 Issuer: First NLC Trust 2005-4 -- Cl. M-2, Downgraded to A2 from Aa2 -- Cl. M-3, Downgraded to Baa2 from Aa3 -- Cl. M-4, Downgraded to Ba2 from A1 -- Cl. M-5, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa2 -- Cl. M-9, Downgraded to Caa2 from Baa3 -- Cl. M-11,Downgraded to Ca from Ba2 Issuer: First NLC Trust Mortgage-Backed Certificates, Series 2007-1 -- Cl. A-2, Downgraded to Aa1 from Aaa -- Cl. A-3, Downgraded to Aa3 from Aaa -- Cl. A-4, Downgraded to A1 from Aaa -- Cl. M-1, Downgraded to Baa2 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Ba3 -- Cl. M-9, Downgraded to Caa2 from B3 FORD CREDIT: Fitch Gives 'BB' Rating on $31.5 Mil. Class D Notes ---------------------------------------------------------------- Fitch Ratings rates these Ford Credit Auto Owner Trust 2008-B, effective April 22, 2008: -- $390,000,000 2.76579% class A-1 'F1+'; -- $497,900,000 floating-Rate class A-2 'AAA'; -- $359,200,000 4.28% class A-3a 'AAA'; -- $ 80,000,000 floating-Rate class A-3b 'AAA'; -- $120,700,000 4.95% class A-4a 'AAA'; -- $ 50,000,000 floating-Rate class A-4b 'AAA'; -- $ 47,300,000 5.88% class B 'A'; -- $ 31,500,000 6.65% class C 'BBB'; -- $ 31,500,000 8.10% class D 'BB'. FORD MOTOR: Earns $100 Million in First Quarter of 2008 ------------------------------------------------------- Ford Motor Company reported net income of $100 million for the first quarter of 2008. This compares with a net loss of $282 million in the first quarter of 2007. The 2008 operating data discussed herein exclude Jaguar Land Rover because it is held for sale. Jaguar Land Rover and Aston Martin data are, however, included in the 2007 data, except where otherwise noted. Fords first quarter pre-tax operating profit from continuing operations, excluding special items, was $736 million, up $669 million from a year ago. On an after-tax basis, Fords first quarter operating profit from continuing operations, excluding special items, was $525 million, compared with a loss of $172 million in the same period a year ago. Fords first quarter revenue, excluding special items, was $39.4 billion, down from $43 billion a year ago. Adjusted to exclude Jaguar Land Rover and Aston Martin from 2007 results, revenue would have been up slightly, with favorable exchange about offset by lower volume and net pricing. Special items reduced pre-tax results by $416 million in the first quarter. These primarily reflected charges associated with personnel actions, dealer reduction actions and the restructuring of its investment in Ballard. Automotive gross cash, which includes cash and cash equivalents, net marketable securities and loaned securities, was $28.7 billion at March 31, 2008, a decrease of $5.9 billion from 2007 year-end levels. The decrease was consistent with our plan and primarily reflects implementation of the initial part of its VEBA agreement with the UAW. "The results of this quarter are encouraging, particularly our outstanding performance in Europe and South America," Ford President and CEO Alan Mulally said. "In the past several years, we have substantially restructured these businesses. We believe this is an indication that our efforts to leverage Fords global assets across the world will bear fruit. Going forward, we remain committed to our key business objectives, including our goal of reaching North America and overall Automotive profitability in 2009 despite the challenging economic conditions." For the first quarter of 2008, Fords worldwide Automotive sector reported a pre-tax profit of $669 million, compared with a pre-tax loss of $226 million during the same period a year ago. The improvement was more than explained by favorable cost performance of $1.7 billion in the quarter, partially offset by unfavorable changes in volume and mix ($700 million), and currency exchange ($200 million). The cost performance included favorable net product costs, manufacturing costs, spending-related costs and expenses for warranty and retiree health care. Worldwide Automotive revenue for the first quarter of 2008 was $35 billion, down from $38.6 billion a year ago. Total company vehicle wholesales in the first quarter were 1,531,000, compared with 1,650,000 units a year ago, down because of the exclusion of Jaguar Land Rover and Aston Martin volume in 2008 and lower wholesales in other regions. a) North America For the first quarter, North America Automotive operations reported a pre-tax loss of $45 million, compared with a loss of $613 million a year ago. The improvement reflected cost reductions of $1.2 billion, including lower structural and product costs. These improvements were partly offset by unfavorable volume and mix, and net pricing. First quarter revenue was $17.1 billion, down from $18.5 billion a year ago. b) South America For the first quarter, Fords South America operations posted a pre-tax profit of $257 million, up from $113 million a year ago. The improvement reflected higher net pricing and volume and mix, partially offset by increased costs, which included higher commodity costs. First quarter revenue increased to $1.8 billion, up from $1.3 billion a year ago. c) Ford Europe For the first quarter, Ford Europe pre-tax profits were $739 million, up from $219 million a year ago. The improvement was primarily explained by favorable cost performance and net pricing, partially offset by unfavorable changes in currency. First quarter revenue was $10.2 billion, an improvement from $8.6 billion a year ago. d) Volvo For the first quarter, Volvo reported a pre-tax loss of $151 million, compared with a profit of $94 million a year ago. The decline was mainly due to unfavorable volume and mix, and changes in currency exchange rates, partially offset by cost reductions. First quarter revenue was $4.2 billion, compared with $4.6 billion a year ago. e) Asia Pacific Africa For the first quarter, Asia Pacific Africa reported a pre-tax profit of $1 million, compared with a pre-tax loss of $26 million a year ago. The improvement primarily reflected favorable cost performance and higher profits in China, partially offset by unfavorable exchange and product mix, primarily in Australia. First quarter revenue was $1.7 billion, compared with $1.8 billion in 2006. f) Mazda Ford earned $49 million from its investment in Mazda and associated operations in the first quarter, compared with $21 million a year ago. g) Other Automotive Other Automotive, which consists of interest and financing-related costs, accounted for a first quarter pre-tax loss of $181 million. This included net interest expense of $472 million and favorable fair market value adjustments of $291 million, primarily related to the impact of changes in exchange rates on intercompany loans. Financial Services Sector For the first quarter, the Financial Services sector earned a pre- tax profit of $67 million, compared with a pre-tax profit of $293 million a year ago. Ford Motor Credit Company reported net income of $24 million in the first quarter of 2008, down $169 million from earnings of $193 million a year earlier. On a pre-tax basis, Ford Motor Credit earned $36 million in the first quarter, compared with $293 million a year ago. The decrease in earnings primarily reflected higher provision for credit losses, higher depreciation expense for leased vehicles, and higher net losses related to market valuation adjustments from derivatives. These were offset partially by lower expenses primarily related to the non- recurrence of costs associated with Ford Motor Credit's North American business restructuring initiative and higher financing margin. 2008 Outlook "The remainder of 2008 will be a challenge but we are cautiously optimistic despite the external challenges," Mr. Mulally said. "Our plan is working. Our initial quality is now among the best in the business, the restructuring in North America is taking hold and we will continue to take actions to stay on our plan. Our product pipeline is full. We look forward to launching the new Ford Flex, Ford F-150 and the Lincoln MKS in North America, and the new Ford Kuga and Ford Fiesta in Europe, with the Fiesta coming soon thereafter to China and other markets around the world." About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said that the ratings and outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated B/Stable/B-3) were not affected by Ford's announcement of an agreement to sell its Jaguar and Land Rover units to Tata Motors Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of pension contributions by Ford for Jaguar-Land Rover). As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. FORD MOTOR: Jaguar & Land Rover Buyer Gets Antitrust Approval ------------------------------------------------------------- U.S. antitrust authorities have cleared Tata Motors Ltd.'s purchase of Jaguar and Land Rover from Ford Motor Co., Reuters reports. According to the U.S. Federal Trade Commission, antitrust authorities have completed their review of the $2.3 billion deal between Tata and Ford without taking any action to block it, Reuters relates. As reported in the Troubled Company Reporter on March 27, 2008, Ford entered into a definitive agreement to sell its Jaguar and Land Rover operations to Tata Motors for $2.3 billion. The transaction is the culmination of Ford's decision last August to explore strategic options for the Jaguar and Land Rover businesses, as the company accelerates its focus on its core Ford brand and "One Ford" global transformation. At closing, Ford will then contribute up to $600 million to the Jaguar and Land Rover pension plans. Bloomberg News reports that Ford is selling its luxury brands to Tata for half the price. Bloomberg says Ford acquired Jaguar and Land Rover in separate transactions for more than $2 billion each. About Tata Motors India's largest automobile company, Tata Motors Limited -- http://www.tatamotors.com/-- is mainly engaged in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the Company. The Company's operating segments consists of Automotive and Others. In addition to its automotive products, it offers construction equipment, engineering solutions and software operations. Tata Motors has operations in Russia and the United Kingdom. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said that the ratings and outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated B/Stable/B-3) were not affected by Ford's announcement of an agreement to sell its Jaguar and Land Rover units to Tata Motors Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of pension contributions by Ford for Jaguar-Land Rover). As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. FORD MOTOR: Contests Conversion of Blue Water's Case to Chapter 7 ----------------------------------------------------------------- Ford Motor Company, one of Blue Water Automotive Systems, Inc.'s key customers, asserted that conversion of the Chapter 11 cases to Chapter 7 is not in the best interest of creditors and the estates. "As several courts have emphasized, short term operating losses are not unusual during the first few months of a Chapter 11 case and they certainly do not provide a basis for the drastic remedy of conversion. The Debtor's rehabilitation is not a hopeless and unrealistic prospect as it will have positive EBITDA of $11 million in 2008," asserted Ford's counsel, Timothy A. Fusco, Esq., at Miller, Canfield, Paddock and Stone, PLC, in Detroit, Michigan. As reported in the Troubled Company Reporter on March 31, 2008, the committee representing unsecured creditors of Blue Water asked the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division to covert Blue Water's bankruptcy proceedings to cases under Chapter 7 of the Bankruptcy Code. The committee's case conversion motion was based on its apprehensions that the Debtors would only incur more debts if they continue operations, further diminishing recovery by creditors. Ford, however, pointed to testimony by John DiDonato, the Debtors' financial advisor, and managing director at Huron Consulting Services, LLC. Mr. DiDonato said Blue Water is expected to have 2008 EBITDA of $11,000,000, which could reach as high as $16,000,000. Mr. DiDonato, according to Ford, ascribed Blue Water's current problems to its decision to accept substantial new business from Ford that involves launch of new product lines. These launches required substantial working capital to complete and the Debtor, for a variety of reasons, did not have sufficient borrowing capacity with its prepetition lender CIT Group/Business Credit, Inc., to accomplish the launches. Ford said it has agreed postpetition to fund the capital and tooling expenditures and relieve Blue Water of the need to finance these expenses. The Ford business that will flow from these launches is profitable and could lead to even greater EBITDA for 2008, says Mr. Fusco. Ford also noted that Mr. DiDonato was adamant that the Debtors would be sold as a going concern. The Debtors' investment banker, Miller Buckfire & Co., LLC, received letters of intent from at least seven qualified purchasers of the Debtors' assets and business. It is almost axiomatic that the purchase price for the Debtors' assets sold as a going concern will greatly exceed their value on a liquidation basis, Mr. Fusco noted. "Continuation of the Debtor's business in chapter 11 is, for a number of reasons, a necessary condition to a successful sale." Mr. Fusco also pointed out that the accommodation agreements entered into with Ford, General Motors Corporation, and Chrysler, LLC, provide that conversion of the Debtors' bankruptcy cases to Chapter 7 constitutes an event of the default under the agreements. He noted that this event would result to: -- the DIP Financing becoming due and owing; and -- the termination of Ford's, Chrysler's and GM's obligations not to resource component parts. Mr. Fusco warned that a conversion would be extremely risky for the Debtors because any decision by Ford, Chrysler or GM to resource component parts (i) could end any possibility of rehabilitation for Blue Water, and (ii) would reduce the value of Blue Water when it is sold. He added that even in the unlikely event that component parts are not resourced, the Debtors would have to obtain new postpetition financing upon an Event of Default. The Creditors Committee, he pointed out, has preferred no evidence to suggest that a Chapter 7 operating trustee would be able to obtain postpetition financing on different terms than did Blue Water under the Citizens Bank DIP Financing. The Creditors Committee, according to Ford, has not satisfied its burden under Section 1112(b) of the Bankruptcy Code of proving, by a preponderance of the evidence, that there exists cause to convert the bankruptcy cases to Chapter 7. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operation in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. The hearing on the Debtors' disclosure statement and plan is set for Aug. 5, 2008. (Blue Water Automotive Bankruptcy News, Issue No. 12, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said that the ratings and outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated B/Stable/B-3) were not affected by Ford's announcement of an agreement to sell its Jaguar and Land Rover units to Tata Motors Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of pension contributions by Ford for Jaguar-Land Rover). As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. FORTUNOFF: New Case Caption Reflects Name Change to FFJS -------------------------------------------------------- Fortunoff Fine Jewelry and Silverware LLC's cases were procedurally consolidated and jointly administered pursuant to the U.S. Bankruptcy Court for the Southern District of New York's order. However, the Debtors sold substantially all of their assets to H Acquisition LLC along with the Debtors' rights in and to the "Fortunoff" and "The Source" trademarks, including all other trademarks used by the Debtors or their subsidiaries. Frank A. Oswald, Esq., at Togut Segal & Segal LLP, in New York, relates that as a result of the Sale, the Debtors are required to change their corporate name and the caption of their case to reflect the new name. Accordingly, the Debtors sought and obtained an order from the Court amending the caption of their case pursuant to Rule 9004(b) of the Federal Rules of Bankruptcy Procedure and Rule 9004-2 of the Local Bankruptcy Rules of the District of Delaware. The new caption of the Debtors' case names "FFJS, aka Fortunoff Fine Jewelry and Silverware LLC, et al." as Debtors. The chapter 11 cases are jointly administered under case no. 08-10353. About Fortunoff New York-based Fortunoff Fine Jewelry and Silverware LLC -- http://www.fortunoff.com/-- is a family owned business since 1922 founded by by Max and Clara Fortunoff. Fortunoff offers customers fine jewelry and watches, antique jewelry and silver, everything for the table, fine gifts, home furnishings including bedroom and bath, fireplace furnishings, housewares, and seasonal shops including outdoor furniture shop in summer and enchanting Christmas Store in the winter. It opened some 20 satellite stores in the New Jersey, Long Island, Connecticut and Pennsylvania markets featuring outdoor furniture and grills during the Spring/Summer season and indoor furniture (and in some locations Christmas trees and decor) in the Fall/Winter season. Fortunoff and two affiliates, M. Fortunoff of Westbury LLC and Source Financing Corp., filed for chapter 11 petition on Feb. 4, 2008 (Bankr. S.D.N.Y. Case Nos. 08-10353 through 08-10355) in order to effectuate a sale to NRDC Equity Partners LLC, -- http://www.nrdcequity.com/-- a private equity firm that owns of Lord & Taylor from Federated Department Stores. Due to the U.S. Trustee's objection, Fortunoff is backing out of its request to employ Skadden Arps Meagher & Flom LLC, as bankruptcy counsel. Fortunoff is hiring Togut Segal & Segal LLP, as their general bankruptcy counsel, but Skadden Arps will continue to serve the Debtors as special counsel in connection with the sale the Debtors' assets. Logan & Company, Inc., serves as the Debtors' claims, noticing, and balloting agent. FTI Consulting Inc. are the Debtors' proposed crisis manager. An Official Committee of Unsecured Creditors has been appointed in this case. In their schedules, Fortunoff Fine Jewelry listed $5,052,315 total assets and $136,626,948 total liabilities; Source Financing Corp. listed $154,680,100 total assets and $176,961,631 total liabilities; and M. Fortunoff of Westbury LLC listed $6,300,955 total assets and $119,985,788 total liabilities. The Debtors' exclusive period to file a plan of reorganization ends on June 3, 2008. (Fortunoff Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Gets Interim OK to Employ Epiq Bankruptcy ------------------------------------------------------------ Frontier Airlines Holdings Inc. and its subsidiaries obtained interim approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Epiq Bankruptcy Solutions LLC as their notice agent and claims agent. As the Debtors' Notice Agent and Claims Agent, Epiq is expected to: (1) prepare and serve required notices in the Debtors' Chapter 11 cases: -- Notice of the commencement of the Chapter 11 cases and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; -- Notice of the claims bar date; -- Notice of objections to claims; -- Notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; and -- Other miscellaneous notices to any entities, as the Debtors or the Court may deem necessary or appropriate. (2) file with the Clerk's Office a certificate of service after the service of each particular notice, and an alphabetical list of persons on whom the notice was served and the date and manner of service. (3) maintain copies of all proofs of claim and proofs of interest filed. (4) maintain official claims registers with all necessary information relevant to the claim. (5) implement necessary security measures to ensure the completeness and integrity of the claims register. (6) maintain an up-to-date mailing list for all filers of proofs claim or interest, which list will be available upon request of a party-in-interest or the Clerk s Office. (7) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours. (8) record all transfers of claims and provide notice of the transfers pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure. (9) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders, and other requirements. (10) provide temporary employees to process claims, as necessary. (11) promptly comply with further conditions and requirements as the Court may at any time prescribe. Thirty days prior to the close of the Chapter 11 cases, an order dismissing Epiq will be submitted terminating its services. At the close of the Chapter 11 cases, Epiq will box and transport all original documents to the Federal Records Center, in proper format as specified by the Clerk's Office. In addition, the Debtors seek to employ Epiq to assist it with, among other things, certain data processing and ministerial administrative functions, including: (a) preparing its schedules, statement of financial affairs and master creditor list, and any amendments; (b) if necessary, reconciling and resolving claims; and (c) acting as solicitation and disbursing agent in connection with the Chapter 11 plan process. Epiq will be paid on a monthly basis for its (i) Case Management Services, (ii) Claims Management Services, (iii) Printing, Mailing and Noticing Services, (iv) Document Management/Imaging, (v) Confidential Document Management, and (vi) Voting Tabulation and Reports. For its Case Management Services, the firm's hourly rates are: Clerk $40 to $60 Case Manager $125 to $175 Programming Consultant $140 to $190 Case Manager(level2) $185 to $220 Sr. Case Manager $225 to $275 Sr. Consultant To be discussed The level of Senior Consultant activity will vary by engagement. The usual average rate for a Senior Consultant is $295 per hour. Any other additional professional services not specifically covered in the engagement will be charged at hourly rates including any outsourced data input services performed under the firm's supervision and control. Outside vendors will be paid a premium for weekend and overtime work. The Debtor also agrees to pay Epiq a $25,000 retainer to be applied against the firm's final invoice for their services provided. Ron Jacobs, president of Epiq's bankruptcy services division, assures the Court that Epiq is a "disinterested person" as that term is defined in Section 1107(b) and as modified by Section 1107(b) of the Bankruptcy Code. Epiq neither holds nor represents any interest adverse to the Debtors and their estates. Mr. Jacobs says. The Court will consider final approval of the request on May 2, 2008. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297 thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: May File Schedules and Statements Until June 24 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has extended the schedules and statements filing time of Frontier Airlines Inc. and its debtor-affiliates to June 24, 2008, without prejudice to the Debtors' right to seek further extension. Previously, the Debtors asked to extend their deadline to file Schedules and Statements through July 14, 2008. Proposed counsel for the Debtors, Marshall S. Huebner, Esq., at Davis Polk & Wardwell, in New York, said that the Debtors will not be able to complete their Schedules in the 15 days provided under Rule 1007(c) due to the complexity and diversity of their operations. Mr. Huebner noted that the Debtors needed to collect and compile information from books, records and documents relating to thousands of claims, assets and contracts. The information is so voluminous and is located in numerous places throughout the Debtors' organization that it will require an enormous amount of time and effort on the part of the Debtors and their employees, Mr. Huebner said. Moreover, all invoices related to the prepetition goods and services have not yet been received or entered into the Debtors' accounting system, noted Mr. Huebner. It may be some time before the Debtors have access to all of the required information to prepare the Schedules, he added. Judge Robert D. Drain further waived the requirement under Rule 1007(a)(3) for the Debtors to file the Equity List. Mr. Huebner explained that Frontier Airlines Holdings Inc., as a public company, has issued 36.6 million shares of publicly-held common stocks. It will be extremely expensive and time consuming for the Debtors to prepare an Equity List of all of the Debtors' equity security holders with last known addresses and sending notices to all parties in the list, Mr. Huebner contended. The Debtors submitted that to the extent it is determined that equity security holders are entitled to distributions from the estates, those parties will be provided with notice of the bar date and will then have an opportunity to assert their interests. Thus, equity security holders will not be prejudiced, Mr. Huebner told the Court. Mr. Huebner told the Court that the Debtors will publish soon as practicable, the Notice of Commencement in The Wall Street Journal and The Denver Post. The Debtors are confident that these publications, coupled with the national attention these filings will surely receive, will most likely reach the equity security holders, he said. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, as well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297 thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, Epiq Bankruptcy LLC is Debtors' Notice & Claims Agent and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: Reports 2.25MM Global Car Sales in 1st Qtr. 2008 ---------------------------------------------------------------- General Motors Corp. sold 2.25 million cars and trucks around the world in the first quarter of 2008, according to preliminary sales figures released, with a record 64% of all sales occurring outside the United States. GM global first quarter sales were down less than 1%. Robust first quarter sales in GM's Latin America, Africa and Middle East and Asia Pacific regions, and improved sales in the GM Europe region helped offset a 10% decline in GM North America. Sales outside GMNA were up 8% compared with last year. "GM posted record sales in three of our four regions driven by continued strong demand in emerging markets," John Middlebrook, GM vice president, Global Sales, Service and Marketing Operations, said. "While the challenges of the U.S. economy continue to put pressure on the automotive industry there, we saw nearly 20% growth in the Latin America, Africa and Middle East and 6% growth in the Asia Pacific region. We're also very pleased to see 3% growth in Europe, where we established a new sales record with 572,000 vehicles sold. We continue to see a higher percentage of our business coming from outside the developed markets - and the non-U.S. share of GM's global sales of 64% clearly reflects that trend." Chevrolet global sales of 1.08 million vehicles were up 3% compared with a year ago, setting a first quarter record. The brand grew by 41% in GMAP, 30% in GME, and 21% in GMLAAM. Globally, Hummer recorded 13,000 global vehicle sales with a 24% gain in the GMLAAM region. With the Hummer H2 and the V8-powered H3 Alpha in North America, and production of the right hand-drive H3 in South Africa, Hummer products are well-positioned to respond to demanding customers' needs. Cadillac posted sales increases outside of North America in the first quarter, including a 62% surge in the GMLAAM region and a 15% increase in GME. Opel and Vauxhall sold 431,000 vehicles in the first quarter of the year. The brands achieved segment leadership with Meriva and Zafira in the monocab segment and second position with Astra in the popular compact segment. In the Asia Pacific region, GM had record sales of 411,000 vehicles that were 6% higher than the previous year, and GM China sales of 312,000 vehicles posted a more than 7% sales increase compared with 2007. GM remained the top-selling global automaker in China. Wuling posted a 6% sales increase with nearly 173,000 vehicles sold in the region. GM India also set a sales record in the quarter with sales up 58% to 18,000 vehicles. GM sales in the region set a record for the quarter. In the Latin America, Africa and Middle East region, GM sales reached a first quarter record 323,400 vehicles, up nearly 20% in volume compared with 2007 and GM sold an all-time March monthly high of 111,300 vehicles. Sales in Brazil were up 36% for the quarter, a first quarter record. First quarter sales records were also set in Chile, Ecuador, Venezuela, Middle East and Israel. The Chevrolet Corsa, Celta and Aveo continued as the top sellers in the region, representing 40% of total GM sales. In Europe, GM also set a quarterly sales record with deliveries of 572,000 vehicles, up 3%. Growth in Russia, up 78%, led the increase. Opel sold 23,500 vehicles in Russia, up 150%. Cadillac, Hummer, and Chevrolet set European sales records for their brands. Chevrolet achieved record sales of 132,000 vehicles, up 30%. Continued softness in the U.S. market due to rising fuel prices and concerns about housing and credit availability, resulted in North America sales of 947,000 vehicles, a decline of 10% compared with last year. GM's U.S. mid-car and mid-utility crossover segments saw volume and share gains on the strength of mid-cars Chevrolet Malibu, Saturn Aura, and Pontiac G6, and mid-utility crossovers GMC Acadia, Buick Enclave and Saturn Outlook. Cadillac CTS sales were up 55% compared with a year ago. Chevrolet Malibu sales were up 17% in the U.S. Total GM U.S. truck deliveries of 476,000 vehicles were down 15% compared with the same period a year ago, while car deliveries of about 330,000 were off 6% compared with first quarter 2007. However, GM's total U.S. retail share of 21% was comparable with last year's first quarter. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on March 26, 2008, Standard & Poor's Ratings Services placed the ratings on General Motors Corp., American Axle & Manufacturing Holdings Inc., Lear Corp., and Tenneco Inc. on CreditWatch with negative implications. The CreditWatch placement reflects S&P's decision to review the ratings in light of the extended American Axle (BB/Watch Neg/--) strike. The work stoppage that began Feb. 25 at American Axle's U.S. United Auto Workers plants has forced closure of many GM (B/Watch Neg/B-3) plants, as well as plants of certain GM suppliers. The strike began after the expiration of the four-year master labor agreement with American Axle. Although S&P still expects American Axle and the UAW to reach an agreement that will reflect more competitive labor costs, the timing is unknown. To resolve the CreditWatch listings, S&P's will assess the strike's impact on the companies' credit profiles, particularly liquidity, once production resumes. S&P could lower the ratings any time prior to a resolution of the Axle strike if the liquidity of the companies becomes compromised, although downgrades are not likely for another several weeks. As reported in the Troubled Company Reporter on Feb. 28, 2008, Fitch Ratings has affirmed the Issuer Default Rating of General Motors at 'B', with a Rating Outlook Negative. As reported in the Troubled Company Reporter on Nov. 9, 2007, Moody's Investors Service affirmed its rating for General Motors Corporation (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured and SGL-1 Speculative Grade Liquidity rating) but changed the outlook to Stable from Positive. In an environment of weakening prospects for US auto sales GM has announced that it will take a non-cash charge of $39 billion for the third quarter of 2007 related to establishing a valuation allowance against its deferred tax assets in the US, Canada and Germany. As reported in the Troubled Company Reporter on Oct. 23, 2007, Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating and other ratings on General Motors Corp. and removed them from CreditWatch with positive implications, where they were placed Sept. 26, 2007, following agreement on the new labor contract. The outlook is stable. G-FORCE 2005-RR2: Fitch Slashes Ratings on Nine Classes to Low-Bs ----------------------------------------------------------------- Fitch Ratings downgraded 11 classes and affirmed seven classes of G-FORCE 2005-RR2 LLC, commercial mortgage-backed securities pass- through certificates, series 2005-RR2, (G-Force 2005-RR2): -- $1.7 million class A-1 affirmed at 'AAA'; -- Interest only class X affirmed at 'AAA'; -- $150 million class A-2 affirmed at 'AAA'; -- $250 million class A-3FL affirmed at 'AAA'; -- $50 million class A-4A affirmed at 'AAA'; -- $58.4 million class A-4B affirmed at 'AAA'; -- $64.9 million class B downgraded to 'A' from 'AA'; -- $47.4 million class C downgraded to 'BBB' from 'A'; -- $17.5 million class D downgraded to 'BB' from 'A-'; -- $21.2 million class E downgraded to 'BB' from 'BBB+'; -- $23.7 million class F downgraded to 'B' from 'BBB'; -- $31.2 million class G downgraded to 'B' from 'BBB-'; -- $19.9 million class H downgraded to 'B-' from 'BB+'; -- $12.5 million class J downgraded to 'B-' from 'BB'; -- $11.2 million class K downgraded to 'B-' from 'BB-'; -- $12.5 million class L downgraded to 'B-' from 'B+'; -- $11.2 million class M downgraded to 'B-' from 'B'; -- $9.9 million class N affirmed at 'B-'. Additionally, Fitch has removed classes A3-FL through N from Rating Watch Negative, where they were originally placed on Jan. 16, 2008 and Dec. 12, 2007. The $70.3 million class O certificates are not rated by Fitch. G-Force 2005-RR2 is backed primarily by commercial mortgage backed-securities B-pieces and closed Aug. 24, 2005. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. G Funds Asset Management, LLC, of which the sole members are Capmark Investments, LP (rated 'CAM1-' by Fitch as a CDO Asset Manager) and Goff Moore Strategic Partners, LP, serves as the collateral administrator. The collateral for this RE-REMIC consists of CMBS bonds (predominantly high-yielding junior bonds), and a whole loan REMIC. 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 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. G-Force 2005-RR2 is collateralized by all or a portion of 133 classes of CMBS from 23 separate underlying transactions (93.6%), and one whole loan REMIC (6.4%). 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 average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1995 to 2002 (an average of 6.7 years of seasoning). Approximately 19.4% of the collateral currently is rated below 'B-' or not rated, and, therefore, is more susceptible to losses in the near-term. Overall, a significant portion of the collateral is below investment grade with only 21.9% investment grade, based on Fitch derived ratings. Further, G-Force 2005-RR2 holds 35.9% in the 'BB' category and 22.7% in the 'B' category. The whole loan REMIC currently contains 14 low-leverage whole loans which are mostly fully amortizing loans on a variety of property types located in different geographic regions. The loans mature between August 2008 and May 2015. The CDO has paid down $88.5 million (8.9%) since issuance, most of which is due to amortization from the whole loan REMIC which originally contained 32 loans. The collateral has realized $44.2 million in losses to date, which represents 4.4% of the original collateral. Given the seasoning of the collateral, this loss rate is relatively low. With $132.3 million of the underlying collateral currently in 60 days or more delinquent, additional losses to the collateral are projected. The ratings on all classes address the likelihood that investors will receive full and timely payment of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings on the interest-only class X address only the likelihood of receiving interest payments while principal on the related certificates remain outstanding. G-FORCE 2005-RR: Fitch Maintains Low-B Ratings on Six Classes ------------------------------------------------------------- Fitch Ratings affirmed all classes issued by G-FORCE 2005-RR LLC, series 2005-RR, commercial mortgage-backed securities pass-through certificates (G-FORCE 2005-RR): -- $66.3 million class A-1 at 'AAA'; -- $220 million class A-2 at 'AAA'; -- Interest only class X at 'AAA'; -- $40.2 million class B at 'AA'; -- $25.1 million class C at 'A'; -- $5 million class D at 'A-'; -- $17 million class E at 'BBB+'; -- $8.2 million class F at 'BBB'; -- $10.7 million class G at 'BBB-'; -- $14.5 million class H at 'BB+'; -- $6.3 million class J at 'BB'; -- $5.7 million class K at 'BB-'; -- $7.5 million class L at 'B+'; -- $4.4 million class M at 'B'; -- $5 million class N at 'B-'. Classes O-1 through O-6 are not rated by Fitch. Despite realized and projected losses to the collateral, the current credit enhancement to the rated classes in relation to the credit quality of the remaining collateral warrants the affirmations. G-FORCE 2005-RR is a static commercial mortgage backed-securities resecuritization that closed Feb. 22, 2005. The portfolio is primarily backed by CMBS B-pieces. G Funds Asset Management, LLC, of which the sole members are Capmark Investments, LP (rated 'CAM1-' by Fitch as a CDO Asset Manager) and Goff Moore Strategic Partners, LP, selected the initial collateral and serves as the collateral administrator. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) 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. G-FORCE 2005-RR is collateralized by all or a portion of 41 classes of CMBS in 15 separate underlying transactions. All performance and collateral information is based on the Mar. 2008 trustee report. The pool's obligor diversity is considered below average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1997 to 2000 (an average of nine years of seasoning). Approximately 11.1% of the collateral currently is rated below 'B-', and therefore, is more susceptible to losses in the near-term. While overall a significant portion of the collateral is below investment grade, approximately 45.4% is investment grade. G-FORCE 2005-RR holds 18.6% in the 'BB' category and 24.9% in the 'B' category. The collateral has realized $7.7 million in losses to date, 1.5% of the original collateral. The majority of these losses stem from one underlying transaction. According to the current trustee report, $50.1 million of the underlying collateral is 60 days or more delinquent; however, only two of the underlying bonds are in the first-loss position thus near-term losses will most likely be minimal. The ratings of all classes address the likelihood that investors will receive full and timely payment of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings on the interest-only class X address only the likelihood of receiving interest payments while principal on the related certificates remain outstanding. GMAC LLC: Lends $468 Million to ResCap to Provide Liquidity ----------------------------------------------------------- Residential Funding Company and GMAC Mortgage LLC, both subsidiaries of Residential Capital, LLC, borrowed $468 million collectively under a Loan and Security Agreement with ResCap's parent, GMAC LLC, as lender, to provide ResCap's subsidiaries with a revolving credit facility with a principal amount of up to $750 million, providing incremental liquidity for ResCap's operations until longer-term financing is arranged. To secure the obligations of RFC and GMAC Mortgage under the Loan and Security Agreement, RFC and GMAC Mortgage have pledged as collateral, their servicing rights and related contractual rights under certain pooling and servicing agreements and loan servicing agreements with respect to pools of first- and second-lien mortgage loans and home equity lines of credit. This funding will bear interest at a floating rate equal to one- month LIBOR plus 2.00%. RFC and GMAC Mortgage may request loans from the lender under the Loan and Security Agreement until Oct. 17, 2008, at which point the loans mature, unless they are repaid earlier when a third-party lending facility is put in place secured by the servicing rights. RFC and GMAC Mortgage give representations, covenants and indemnities that are customary in similar facilities. ResCap has entered into a Guarantee pursuant to which it guarantees the payment by RFC and GMAC Mortgage of their obligations under the Loan and Security Agreement. As reported in the Troubled Company Reporter on April 9, 2008, GMAC LLC purchased $1.2 billion of ResCap's notes in open market. The notes have a fair value of approximately $607,192,000 to ResCap in exchange for 607,192 ResCap Preferred units with a liquidation preference of $1,000 per unit. ResCap canceled the $1.2 billion face amount of notes. GMAC may, in its sole discretion, on or before May 31, 2008, contribute up to an additional approximately $340 million of ResCap notes, having a fair value of approximately $265,779,000, for additional ResCap Preferred units. The ResCap Preferred ranks senior in right of payment to ResCap's common membership interests with respect to distributions and payments on liquidation, winding-up or dissolution of ResCap. ResCap and GMAC are investigating various strategic alternatives related to all aspects of ResCaps business, including extensions and replacements of existing secured borrowing facilities, and establishing additional sources of secured funding for ResCaps operations. One potential source of new secured funding is credit secured by certain of ResCaps mortgage servicing rights. About Residential Capital Headquartered in Minneapolis, Minnesota, Residential Capital LLC - - http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. Cerberus Capital Management LP bought 51% GMAC LLC stake from General Motors Corp. on December 2006. GMAC LLC: Risks to Liquidity Cue Moody's Rating Downgrade to 'B2' ----------------------------------------------------------------- Moody's Investors Service downgraded GMAC LLC's senior rating to B2 from B1; the rating remains on review for further possible downgrade. This action follows Moody's rating downgrade of ResCap LLC, GMAC's wholly-owned residential mortgage unit, to Caa1 from B2. The GMAC downgrade is based upon Moody's opinion that further operating weakness at ResCap poses risks to GMAC's capital position and liquidity that exceed previous estimates. In particular, Moody's believes that for ResCap to have continued access to debt capital, GMAC may be required to provide additional indications of support to the unit and that it is likely to do so. As noted in the ResCap related press release, ResCap faces significant near-term refinancing needs. GMAC has strategic significance to GM, as its exclusive provider of consumer incentive financing for nearly all of its brands, and as a provider of inventory floorplan loans to GM's dealer base. As a consequence, Moody's doesn't believe GMAC's owners intend to compromise the firm's credit profile to the point of weakening its ability to perform under its contractual asset origination and servicing obligations to GM. It is Moody's belief, however, that the ResCap exposures that GMAC has accumulated to date, and may yet further accumulate, represent a risk concentration that could challenge the strength of the GMAC's credit standing. During its review, Moody's will examine GMAC's intentions for supporting ResCap through its difficulties, as well as the terms pertaining to any such support extension. Moody's considers GMAC's stand-alone strengths in its auto finance and insurance businesses to continue to provide support to its rating profile. Ratings downgraded and placed under review for further downgrade include: -- Issuer rating: to B2 from B1 -- Senior Unsecured: to B2 from B1 -- Preferred Stock: to Caa2 from Caa1 GMAC LLC, based in Detroit, is a provider of retail and wholesale auto financing, auto insurance and warranty products, and through its wholly-owned subsidiary Residential Capital LLC, residential mortgage products and services. GMAC reported 2007 consolidated net loss of $2.3 billion and total assets of $248 billion. GOLDMAN SACHS: S&P Confirms 'BB+' Rating on Class B Notes --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB+' rating on the class B notes issued by Goldman Sachs Asset Management CBO Ltd., a high-yield arbitrage corporate collateralized bond obligation transaction, and removed it from CreditWatch, where it was placed with positive implications on May 2, 2007. Standard & Poor's noted that since S&P placed the rating on CreditWatch positive in May 2007, the class B notes have paid down approximately $31.039 million, which substantially increased the overcollateralization available to the notes. However, given the limited number of obligors remaining in the portfolio, S&P has elected to affirm the current rating and remove it from CreditWatch rather than raise it. Rating Affirmed and Removed From CreditWatch Positive Goldman Sachs Asset Management CBO Ltd. Rating ------ Class To From ----- -- ---- B BB+ BB+/Watch Pos Transaction Information Issuer: Goldman Sachs Asset Management CBO Ltd. Co-issuer: Goldman Sachs Asset Management CBO Corp. Collateral manager: Goldman Sachs Asset Management Underwriter: Goldman, Sachs & Co. Trustee: JPMorgan Chase Bank N.A. Transaction type: Arbitrage corporate high-yield CBO HARBORVIEW MORTGAGE: S&P Downgrades Ratings on 15 Cert. Classes --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 15 classes of mortgage pass-through certificates from five HarborView Mortgage Loan Trust series. At the same time, S&P affirmed its ratings on the remaining 102 classes from these transactions and one additional deal. The lowered ratings reflect a steady increase in the dollar amount of loans in the transactions' delinquency pipelines over the past six months, combined with deterioration in credit support due to realized losses. The high levels of total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) in these transactions indicate that losses will continue to increase and further erode available credit support. Severe delinquencies for series 2004-9 have risen by 182% over the past six remittance periods to $27.585 million, while series 2004-10 has experienced an increase of 49% to $12.858 million during the same time period. Severe delinquencies in loan group 1 from series 2005-8 have risen by 196% over the past six remittance periods to $72.924 million, while loan group 2 has seen an increase of 163% to $66.996 million. During the same period, severe delinquencies rose by 95% to $118.854 million for series 2005-10 and by 164% to $27.991 million for series 2005-11. As of the March 2008 remittance period, cumulative losses ranged from 0.05% (series 2004-10) to 0.24% (series 2005-8, loan group 2) of the original principal balances. Total delinquencies ranged from 12.17% (series 2004-9) to 18.34% (series 2005-11) of the current principal balances, and severe delinquencies ranged from 7.50% (series 2004-9) to 12.80% (series 2005-8, loan group 2) of the current principal balances. The lowered ratings are in line with the projected credit enhancement amounts following the liquidation of many of the loans currently in the transaction's delinquency pipeline. S&P's expected losses also factor in loans that are now current but may default in the future. The affirmations for series 2005-9 reflect current and projected credit support percentages that are sufficient to support the certificates at their current rating levels. The initial credit enhancement percentages meet or exceed the amount required for the affirmed ratings. As of the March 2008 remittance period, cumulative losses for series 2005-9 were 0.04% of the original principal balance, total delinquencies were 9.78% of the current principal balance, and severe delinquencies were 5.80% of the current principal balance. Subordination is the primary source of credit support for these transactions. The underlying collateral for the deals consists primarily of adjustable-rate, conventional mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered HarborView Mortgage Loan Trust Mortgage pass-through certificates Rating ------ Transaction Class To From ----------- ----- -- ---- 2004-10 B-4 B BB 2004-10 B-5 CCC B 2004-9 B-5 CCC B 2005-10 B-10 B BB 2005-10 B-11 CCC B 2005-11 B-4 B BB 2005-11 B-5 CCC B 2005-8 1-B8 BBB A- 2005-8 2-B3 BBB A- 2005-8 1-B9 BB BBB+ 2005-8 2-B4 BB BBB+ 2005-8 1-B10 B BB 2005-8 2-B5 CCC BB 2005-8 1-B11 CCC B 2005-8 2-B6 CCC B Ratings Affirmed HarborView Mortgage Loan Trust Mortgage pass-through certificates Transaction Class Rating ----------- ----- ------ 2004-10 1-A-1 AAA 2004-10 1-A-2A AAA 2004-10 1-A-2B AAA 2004-10 2-A AAA 2004-10 3-A-1A AAA 2004-10 3-A-1B AAA 2004-10 4-A AAA 2004-10 X-1 AAA 2004-10 X-2 AAA 2004-10 X-3 AAA 2004-10 B-1 AA+ 2004-10 B-2 A 2004-10 B-3 BBB 2004-9 1-A AAA 2004-9 2-A AAA 2004-9 3-A AAA 2004-9 4-A1A AAA 2004-9 4-A1B AAA 2004-9 4-A2 AAA 2004-9 4-A3 AAA 2004-9 X AAA 2004-9 B-1 AA+ 2004-9 B-2 A 2004-9 B-3 BBB 2004-9 B-4 BB 2005-10 1-A-1A AAA 2005-10 1-A-1B AAA 2005-10 2-A1A AAA 2005-10 2-A1B AAA 2005-10 2-A1C1 AAA 2005-10 2-A1C2 AAA 2005-10 PO AAA 2005-10 X AAA 2005-10 B-1 AA+ 2005-10 B-2 AA 2005-10 B-3 AA- 2005-10 B-4 A+ 2005-10 B-5 A 2005-10 B-6 A- 2005-10 B-7 BBB+ 2005-10 B-8 BBB 2005-10 B-9 BBB- 2005-11 1-A-1A AAA 2005-11 1-A-1B AAA 2005-11 2-A-1A AAA 2005-11 2-A-1B AAA 2005-11 2-A-1C AAA 2005-11 PO AAA 2005-11 X AAA 2005-11 B-1 AA+ 2005-11 B-2 AA- 2005-11 B-3 BBB+ 2005-8 1-A1A AAA 2005-8 1-A1B AAA 2005-8 1-A2A AAA 2005-8 1-A2B AAA 2005-8 1-A2C AAA 2005-8 1-PO AAA 2005-8 1-X AAA 2005-8 2-A1A AAA 2005-8 2-A1B AAA 2005-8 2-A2 AAA 2005-8 2-A2A AAA 2005-8 2-A2B AAA 2005-8 2-A3 AAA 2005-8 2-PO1 AAA 2005-8 2-PO2 AAA 2005-8 2-POB AAA 2005-8 2-XA1 AAA 2005-8 2-XA2 AAA 2005-8 2-XB AAA 2005-8 1-B1 AA+ 2005-8 1-B2 AA+ 2005-8 1-B3 AA+ 2005-8 2-B1 AA+ 2005-8 1-B4 AA 2005-8 1-B5 AA 2005-8 2-B2 AA 2005-8 1-B6 AA- 2005-8 1-B7 A+ 2005-9 1-A AAA 2005-9 1-PO AAA 2005-9 1-X AAA 2005-9 2-A-1A AAA 2005-9 2-A-1B AAA 2005-9 2-A-1C AAA 2005-9 2-PO AAA 2005-9 2-X AAA 2005-9 3-PO AAA 2005-9 3-X AAA 2005-9 B-1 AA+ 2005-9 B-2 AA+ 2005-9 B-3 AA 2005-9 B-4 AA 2005-9 B-5 AA 2005-9 B-6 AA- 2005-9 B-7 A+ 2005-9 B-8 A 2005-9 B-9 A- 2005-9 B-10 BBB- 2005-9 B-11 BB 2005-9 B-12 B HD PARTNERS: Sets April 30 Distribution Record Date --------------------------------------------------- HD Partners Acquisition Corporation set April 30, 2008, as the record date for determining the stockholders entitled to receive liquidating distributions. April 30, 2008 will also be the last trade date for the company's securities on the American Stock Exchange. Pursuant to the plan of liquidation, which was approved by the company's stockholders on April 7, 2008, the company will return the amount held in trust, together with interest to holders, as of the record date, of the company's common stock originally issued in its initial public offering. No payments will be made with respect to any of the company's outstanding warrants or to the shares owned by the company's initial stockholders prior to the initial public offering. As of the record date, April 30, 2008, the share transfer books of the company will be closed, and trading of the company's shares on the American Stock Exchange will be suspended. The company expects to make a liquidating distribution promptly after April 30, 2008. Headquartered in Santa Monica, California, HD Partners Acquisition Corporation (AMEX:HDP) -- http://www.hdpartnersacquisition.com/-- is a blank check company. The company was formed to acquire, through a merger, capital stock exchange, asset acquisition or other similar business combination, one or more domestic or international assets or an operating business in the media, entertainment or telecommunications industries. As of April 2, 2996, the company had not acquired any business operations nor entered into by definitive agreement with any target company. HENRICKS JEWELERS: Gets Court's OK to Use Lender's Cash Collateral ----------------------------------------------------------------- Henricks Jewelers obtained authority from the bankruptcy court to use the cash collateral of its lender, Katy Bishop of Naples Daily News reports. Ms. Bishop relates that in March 2008, when Henricks' liquidation process was about to end, it reached an agreement with its lender to continue using cash collateral and to continue business operations for a period of time. The report notes that the Court's approval will allow the company to continue its business transactions while focusing on its reorganization. "Very few businesses of our size are successful at reorganizing, but we intend to do just that," NDN quotes Kevin Waters, chief executive officer, as saying. According to NDN, the company will continue to give discounts through the month of May as part of its reorganization procedures. This is the company's way of thanking the public, its staff and its vendors for their support and efforts to save the company, NDN relates. Headquartered in Bonita Springs, Florida, Henricks Jewelers -- http://www.henricksjewelry.com/-- is a manufacturing jeweler in Southwest Florida with more than 50 employees. It was originally opened in Bonita Springs, Florida in 1982 by Henry Grimes and his son Rick Grimes thus forming the name Henricks. Over the years the small original store on Bonita Beach Road, evolved into its third and current location that houses nearly 12,000 flagship stores. In April 2003, Rick Grimes joined forces with Luxury Ventures LLC and investment partners Kevin Waters, CEO and Patrick Hopper, CFO. As reported in the Troubled Company Reporter on Dec. 21, 2007, Henricks Jewelers filed for bankruptcy and will shut down six stores in Bonita Springs, Naples, Sarasota, and Alaska on an unknown date. HERBST GAMING: Moody's Junks Ratings on No Forebearance Agreement ----------------------------------------------------------------- Moody's Investors Service lowered Herbst Gaming, Inc.'s corporate family rating and probability of default rating to Caa2 from B3. At the same time, the company's senior secured bank debt was lowered to Caa1 (LGD-3, 34%) from B2 (LGD-3, 34%), and its senior subordinated notes were lowered to Ca (LGD-5, 89%) from Caa2 (LGD- 5, 89%). All ratings remain on review for further possible downgrade. The downgrade considers that Herbst has not yet negotiated a forbearance agreement with its lenders related to a going concern opinion by its auditors that triggered an event of default under the credit agreement. As a result, it remains unclear at this time what course of action the lenders may pursue with respect to the event of default. The downgrade also considers that Herbst may not meet its financial covenants during fiscal 2008 because of the continued negative impact from a slowdown in the economy, lower than expected performance from its non-Nevada casino properties, and the Nevada smoking ban. Failure to meet any of its financial covenant tests would trigger an event of default unless the company is able to obtain waivers or amendments. In addition, the downgrade acknowledges that the continued volatility in the capital markets along with the high cost of borrowing makes it less likely that a strategic alternative will emerge that does not involve some level of impairment. On Feb. 28, 2008, Herbst has engaged Goldman Sachs as financial advisor to assist the company with its evaluation of strategic and financial alternatives. Herbst continues to work with Goldman Sachs with respect to reviewing these alternatives. Moody's review will focus on Herbst's success with respect to negotiating a forbearance agreement with its lenders, its ability to meet its 2008 financial covenants, and the company's decision regarding strategic alternatives. Ratings could be lowered further if the company is unable to cure its technical default status or pursues a strategic alternative that worsens the company credit profile or involves a material impairment to the existing creditors. The review for downgrade will also focus on Herbst's near-term liquidity in light of its current operating challenges and upcoming interest payment obligations. A semi-annual interest payment on the company's 7% $170 million senior subordinated notes due 2014 is due May 15, 2008. A semi-annual interest payment on the company's $160 million 8 1/8% senior subordinated notes due 2012 is due June 1, 2008. Herbst Gaming, Inc. is an established slot route operator in Nevada with over 7,400 slot machines and currently owns and operates casinos in Nevada, Missouri and Iowa. Net revenue for the fiscal year ended Dec. 31, 2007 was $784 million. HOOP HOLDINGS: Taps Traxi to Provide Crisis Management Services --------------------------------------------------------------- Hoop Holdings LLC and its debtor-affiliates seek permission from the United States Bankruptcy Court for the District of Delaware to enter into an agreement with Traxi LLC pursuant to providing crisis management services. Given the size and complexity of the Debtors' business and its lack of personnel with sufficient crisis management and restructuring expertise, the Debtors require the services of an experienced chief restructuring officer. The Debtors states that Traxi provides a broad range of corporate advisory services including general financial advisory, operational restructuring. Additionally, Traxi professionals have extensive experience working with financially troubled companies in complex financial restructuring both in and out of Chapter 11. These professionals have advised debtors, creditors, equity constituencies and government agencies in more than 300 restructurings. Pursuant to the agreement, subject to further order of the Court, Traxi will assign Mr. Mandarino to serve as CRO and assign additional individuals to perform services required by the company. Traxi will: a) supervise the Debtors'general accounting function, including monitoring the Debtors' activities regarding cash expenditures, receivables collection, asset sales and projected cash requirements; b) review all financial information prepared by the Debtors including financial statements as of the bankruptcy filing, showing in detail all assets and liabilities, and priority and secured creditors; c) perform financial analysis related to the proposed asset sales, if any, including assistance in negotiations and attendance in negotiations and attendance at hearings and testimony; d) assist the Debtors in formulating a plan of reorganization; e) analyze and make recommendations to the Debtors with respect to any offers it may receive from potential suitors; f) attend meetings that may include, among others, an official committee of unsecured creditors, secured lenders, their counsels and consultants and federal and state authorities, as necessary; g) review the Debtors' periodic operating and cash flow statements; h) review the Debtors' books and records for various transactions, including related party transactions, potential preferences, fraudulent conveyances, and other potential pre-petition investigations; i) make any investigation that may be undertaken with respect to the Debtors' pre-bankruptcy acts, conduct, property, liabilities and financial condition, their management and creditors, including the operation of their business, and as appropriate, avoidance actions; j) review any business plans prepared by the Debtors; k) review and analyze proposed transactions for which the Debtors seek Court approval; l) provide expert testimony; m) assist with the analyses and reconciliation of claims against the Debtor and bankruptcy avoidance actions; n) assist the Debtors in negotiating with their creditor constituencies, including negotiations relating to the Debtors' plan of reorganization; o) perform a liquidation analysis of the Debtors for purposes of a plan of reorganization; p) assist the Debtors' management with the bankruptcy process, including facilitating their communications with parties in interest, assisting with creditor questions and requests for information, and providing guidance as to compliance with financial and other reporting requirements; q) assist the Debtors in complying with the reporting requirements of the Office of the U.S. Trustee, Bankruptcy Code, Federal Rules of Banktuptcy Procedure, and the Local Rules for the U.S. Bankruptcy Court for the District of Delaware, including the preparation of statements of financial affairs, schedules and monthly operating reports; r) assist with the analyses and reconciliation of claims against the Debtors and bankruptcy avoidance actions; and s) provide the Debtors with other and further crisis management services regarding the Debtors' operations, including valuation, securing bankruptcy financing, general restructuring and advice on financial, business and economic issues, as may arise. Perry M. Mandarino, senior managing director and unit holder in Traxi LLC, tells the Court that the Debtors will pay Traxi's professionals based on their customary hourly rates: Professionals Hourly Rate ------------- ----------- Managing Directors $475 - $550 Managers/Directors $375 - $450 Associates/ Analysts $175 - $350 Mr. Mandarino adds that Traxi received a retainer fee of $200,000, against which approximately $115,000 in prepetition fees and expenses have been applied. Traxi will hold the remaining retainer, subject to further order of the Court. Mr. Mandarino assures the Court that Traxi is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. About Hoop Holdings Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and operates gift, novelty, and souvenir shops. The company and two of its affiliates (Hoop Retail Stores, LLC and Hoop Canada Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008 (Bankr. D. Del. Lead Case No.08-10544). Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 has not appointed creditors to serve on an official committee of unsecured creditors or examiner under these cases. When the Debtors' filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. INDYMAC TRUSTS: 165 Tranches From 46 Deals Get Moody's Rating Cuts ------------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 165 tranches from 46 Alt-A transactions issued by IndyMac. Sixty one tranches remain on review for possible further downgrade. Additionally, 97 tranches were placed on review for possible downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Complete rating actions are: Issuer: IndyMac IMSC Mortgage Loan Trust 2007-AR1 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Ba2 -- Cl. B-3, Downgraded to Ca from Caa1 Issuer: IndyMac IMSC Mortgage Loan Trust 2007-AR2 -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B2 -- Cl. B-4, Downgraded to Ca from Caa2 -- Cl. B-5, Downgraded to Ca from Caa3 Issuer: IndyMac INDA Mortgage Loan Trust 2005-AR2 -- Cl. B-1, Downgraded to Aa3 from Aa2 -- Cl. B-2, Downgraded to Baa2 from A2 -- Cl. B-3, Downgraded to B2 from Baa2 Issuer: IndyMac INDA Mortgage Loan Trust 2006-AR1 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to B2 from A2 -- Cl. B-3, Downgraded to B1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDA Mortgage Loan Trust 2007-AR3 -- Cl. B-3, Downgraded to Baa3 from Baa2 Issuer: IndyMac INDA Mortgage Loan Trust 2007-AR4 -- Cl. B-2, Downgraded to Baa2 from A2 -- Cl. B-3, Downgraded to Ba3 from Baa3 Issuer: IndyMac INDA Mortgage Loan Trust 2007-AR7 -- Cl. II-B-3, Downgraded to Baa3 from Baa2 Issuer: IndyMac INDB Mortgage Loan Trust 2005-1 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B1 from Aa2 -- Cl. B-2, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR15 -- Cl. B-1, Downgraded to A1 from Aa2 -- Cl. B-2, Downgraded to Ba1 from A2 -- Cl. B-3, Downgraded to B3 from Baa2 Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR17 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to B2 from A2 -- Cl. B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR19 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa2 from Aa2 -- Cl. B-2, Downgraded to B2 from A2 -- Cl. B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR21 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 4-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to Baa3 from Aa2 -- Cl. B-2, Downgraded to B2 from A2 -- Cl. B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR23 -- Cl. I-B-1, Downgraded to A2 from Aa2 -- Cl. I-B-2, Downgraded to Ba3 from A2 -- Cl. I-B-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. II-B-1, Downgraded to A2 from Aa2 -- Cl. II-B-2, Downgraded to Ba3 from A2 -- Cl. II-B-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR25 -- Cl. B-1, Downgraded to A2 from Aa2 -- Cl. B-2, Downgraded to Ba2 from A2 -- Cl. B-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR27 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa2 from Aa2 -- Cl. B-2, Downgraded to B2 from A3 -- Cl. B-3, Downgraded to Ca from Ba2 Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR29 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to Ba3 from A2 -- Cl. B-3, Downgraded to Caa2 from Ba1 Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR31 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba3 from Aa2 -- Cl. B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B2 Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR33 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B2 from Aa2 -- Cl. B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B2 Issuer: IndyMac INDX Mortgage Loan Trust 2005-AR35 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to Ba3 from A3 -- Cl. B-3, Downgraded to Caa1 from Ba2 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR11 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Ba1 -- Cl. B-3, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR13 -- Cl. B-1, Downgraded to A3 from Aa2 -- Cl. B-2, Downgraded to B1 from A2 -- Cl. B-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR19 -- Cl. 1-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-2, Downgraded to Ca from Ba2 -- Cl. I-B-3, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR21 -- Cl. M-1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba1 -- Cl. M-7, Downgraded to Ca from Ba3 -- Cl. M-8, Downgraded to Ca from B1 -- Cl. M-9, Downgraded to Ca from Caa2 -- Cl. M-10, Downgraded to Ca from Caa3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR23 -- Cl. B-2, Downgraded to Baa3 from A2 -- Cl. B-3, Downgraded to B2 from Baa2 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR25 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 6-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B2 from Aa2 -- Cl. B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B2 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR27 -- Cl. 1-A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Ba1 from Aa1 -- Cl. M-2, Downgraded to B2 from Aa2 -- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from Ba1 -- Cl. M-8, Downgraded to Ca from B1 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR29 -- Cl. A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa1 -- Cl. M-2, Downgraded to B2 from Aa2 -- Cl. M-3, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Ca from Ba3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR3 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Ba1 from Aa2 -- Cl. B-2, Downgraded to Caa2 from Ba1 -- Cl. B-3, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR31 -- Cl. B-3, Downgraded to Baa3 from Baa2 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR33 -- Cl. II-B-1, Downgraded to Baa3 from Aa2 -- Cl. II-B-2, Downgraded to B2 from A2 -- Cl. II-B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR35 -- Cl. 1A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2A-1B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2A-3B, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B2 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Ca from Ba2 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR37 -- Cl. 2-A-2-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-B-1, Downgraded to Ba1 from Aa2 -- Cl. 2-B-2, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. 2-B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR39 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to Ca from B1 -- Cl. M-8, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR41 -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to Ca from Ba3 -- Cl. M-5, Downgraded to Ca from B1 -- Cl. M-6, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR5 -- Cl. B-1, Downgraded to A2 from Aa2 -- Cl. B-2, Downgraded to B2 from A3 -- Cl. B-3, Downgraded to Caa2 from Ba2 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR7 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 5-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Ba3 -- Cl. B-3, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2006-AR9 -- Cl. B-1, Downgraded to A1 from Aa2 -- Cl. B-2, Downgraded to B1 from A2 -- Cl. B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR1 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 1-A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. 3-A--2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from B3 -- Cl. B-3, Downgraded to Ca from Caa2 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR11 -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. C-M, Downgraded to B1 from Aa1 -- Cl. B-1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from B3 -- Cl. B-3, Downgraded to Ca from Caa3 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR13 -- Cl. B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from B2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Caa1 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR15 -- Cl. 1-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to Baa3 from Aa2 -- Cl. B-2, Downgraded to B3 from Baa3 -- Cl. B-3, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR17 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B1 from Aa2 -- Cl. B-2, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR19 -- Cl. B-1, Downgraded to Baa3 from Aa2 -- Cl. B-2, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Caa1 from B3 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR5 -- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. C-M, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 4-M-3, Downgraded to Ba3 from Ba1 -- Cl. 4-M-4, Downgraded to Ca from B1 -- Cl. B-1, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Caa1 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR7 -- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 1-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. 2-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. B-1, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from B2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Caa2 Issuer: IndyMac INDX Mortgage Loan Trust 2007-AR9 -- Cl. B-3, Downgraded to B3 from B1 INTEREP NATIONAL: Files Chapter 11 Plan And Disclosure Statement ---------------------------------------------------------------- Interep National Radio Sales Inc. and its debtor-affiliates delivered a Joint Chapter 11 Plan of Reorganization dated April 23, 2008, and a Joint Disclosure Statement explaining that plan to the United States Bankruptcy Court for the Southern District of New York. Overview of the Plan The Plan provides recoveries to creditors that may result in the payment in full of all allowed secured, priority and unsecured creditors. All existing equity interests of the Debtors -- including all existing preferred and common stock -- will be canceled and discharged, and the holders will receive no distribution under the Plan. In exchange for the notes, the noteholders will receive their pro rata share of: a) 100% of the New Common Stock of Reorganized Debtors, subject to dilution by up to 15% by additional shares or units of New Common Stock issued pursuant to a certain Employee Incentive Plan; and b) secured promissory notes in the aggregate principal amount of $40 million, which have a ten-year bullet maturity and provide for the payment-in-kind of interest until the maturity. As part of the Plan, a new board of directors for reorganized Debtors will be appointed and comprised of (i) a new Debtors' chief executive officer; and (ii) six directors to be nominated. The identities and affiliations of all board members will be disclosed before the plan confirmation hearing. Financing OCM Principal Opportunities Fund III, L.P., OCM Principal Opportunities Fund IIIA, L.P. and Silver Point Capital L.P. agree to provide $25 million in senior secured debtor-in-possession credit facility to the Debtors. The Debtors and the lenders are presently in talk in regards of the term of another exit facility of at most $50 million to finance payments of debts and provide additional capital. The lenders hold majority of the Debtors' 10% senior subordinated notes due July 1, 2008, in the amount of $99 million in the aggregate. Treatment of Claims Under the Plan, these creditors are expected to receive a 100% recovery including: -- administrative claims; -- priority tax claims; -- priority non-tax claims; -- secured claims; -- intercompany claims; and -- subsidiary equity interest. On the Plan effective date, each holder of noteholder claim, totaling $101,475,000, will receive a pro rata share of the new common stock, subject to dilution by 15% pursuant to a certain employee incentive plan, and new second lien notes. General Unsecured creditors holding $6,900,000 in claims will also receive a pro rata share and expect a 100% recovery of their claims. Holders of Section 510(b) Claims and Old Equity Interest will not receive any distribution. Claims will be canceled on the Plan effective date. A full-text copy of the Joint Chapter 11 Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?2b14 A full-text copy of the Joint Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2b15 About Interep National Headquartered in New York, New York, Interep National Radio Sales, Inc. -- http://www.interep.com/-- are independent sales and marketing companies that specialize in radio, the Internet, television and complementary media. With 16 offices across the U.S., they serve radio and television station clients and advertisers in all 50 states and beyond. The company and 14 of its affiliates filed for Chapter 11 protection on March 30, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11079). Erica M. Ryland, Esq., at Jones Day, represents the Debtors in their restructuring efforts. No Official Committee has been appointed in the cases to date. The Debtors selects Kurztman Carson Consultants LLC as claims, noticing and balloting agent. When the Debtor filed for protection from their creditors, it listed between $50 million and $100 million in asset and between $100 million and $500 million in debts. INTERSTATE BAKERIES: Knox County Opposes Tax Liability Reduction ---------------------------------------------------------------- Interstate Bakeries Corp. and its debtor-affiliates' request to reduce their real property tax liability from a $4,600,000 valuation to a $3,500,000 valuation, is inappropriate, Dean B. Farmer, Esq., at Hodges, Doughty & Carson, PLLC, in Knoxville, Tennessee, says. The Knox County Tax Assessor's office in Tennessee informs the U.S. Bankruptcy Court for the Western District of Missouri that it has done a physical appraisal and review of the Debtors' property, and determined that the fair market appraisal is $4,100,000. Knox County has also documented that the Debtors actually acquired the property for $4,030,000 and has done well over $1,000,000 worth of renovations to the property after its acquisition. According to Mr. Farmer, the Debtors have used a valuation in a generic form across the state line, which does not constitute a true appraisal in accordance with the procedures and valuations used in the Knox County locality. Mr. Farmer further argues that the Debtors are attempting to alter postpetition interest and penalties to the extent they seek to alter the interest and default rate obligations under Tennessee statutes for taxes incurred in 2008 which are last payable without penalty or interest on Feb. 28, 2009. Accordingly, Knox County objects to the reduction of any valuation for purposes of determining tax liability owed to them by the Debtors. Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04 45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. (Interstate Bakeries Bankruptcy News, Issue No. 95; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). JEFFERIES GROUP: Fitch Downgrades Subordinated Debt Rating to BB+ ----------------------------------------------------------------- Fitch Ratings downgraded the long- and short-term Issuer Default Ratings and debt ratings of Jefferies Group, Inc.: -- Long-term IDR to 'BBB' from 'BBB+'; -- Short-term IDR remains at 'F2'; -- Senior debt to 'BBB' from 'BBB+'; -- Short-term debt remains at 'F2'; -- Subordinated debt to 'BB+' from 'BBB-'. The Rating Outlook remains Negative. Approximately $1.9 billion of long-term debt is outstanding. No long-term debt is maturing before 2012. Jefferies' bank lines ($1.2 billion) are currently undrawn. The firm is not a commercial paper issuer. Fitch revised Jefferies' Rating Outlook to Negative from Stable on April 15, 2008 based on expectations of weaker earnings in 2008, Jefferies' increasing gross and net leverage and decreasing coverage ratios through year-end 2007. Fitch's downgrade was driven largely by Jefferies' first quarter 2008 (1Q08) net loss of $61 million. This loss exceeded Fitch's expectations. Losses in the firm's high yield trading business and investments in seeded hedge funds are largely responsible for 1Q08 results, following weak performance in 4Q07. Earnings were further pressured by weak investment banking fee revenues and high compensation expense. Fitch expects ongoing market volatility to remain with potential adverse results. Management disagrees with this conclusion. Fitch recognizes that Jefferies has taken steps to reduce its risk appetite and costs, and to enhance its liquidity profile since year-end 2007. For example, the firm has reduced its proprietary trading activities and scaled-backed its hedge fund seeding program. However, Fitch remains concerned about the potential for additional trading losses, continued weak investment banking fee revenues, the firm's seemingly inflexible compensation structure, and the inherent risks of its Leucadia monetization strategy. Fitch views positively the expected increase in Jefferies' equity capital of approximately $433 million resulting from the sale of approximately 26.6 million shares of common equity and $100 million cash to Leucadia. In exchange, Jefferies received 10 million Leucadia common shares. The unique structure of the deal results in Jefferies having to monetize a concentrated position in order to receive the liquidity benefits of the transaction. Successful sale of the shares may positively impact the Rating Outlook. JER CRE: Fitch Maintains 'B' Rating on $10 Mil. Class G Notes ------------------------------------------------------------- Fitch Ratings affirmed all classes of notes issued by JER CRE CDO 2005-1, Ltd. and JER CRE CDO 2005-1, LLC (JER CDO 2005-1): -- $81,725,000 class A at 'AAA'; -- $38,130,000 class B-1 at 'AA'; -- $37,500,000 class B-2 at 'AA'; -- $48,400,000 class C at 'A'; -- $46,500,000 class D at 'BBB'; -- $23,320,000 class E at 'BBB-'; -- $15,000,000 class F at 'BB'; -- $10,000,000 class G at 'B'. The current credit enhancement to the rated classes in relation to the credit quality of the remaining collateral warrants the affirmations. JER CDO 2005-1 is a commercial real estate collateralized debt obligation that closed Nov. 10, 2005. The portfolio is static and primarily backed by commercial mortgage backed securities B- pieces. JER Investors Trust Inc., which is externally managed by an affiliate of J.E. Robert Company, Inc., selected the initial collateral and serves as the collateral administrator. J.E. Robert Company, Inc. (rated 'CSS1' as special servicer by Fitch) is named special servicer on eleven of the underlying transactions. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) 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. JER CDO 2005-1 is collateralized by all or a portion of 73 classes of fixed-rate CMBS in 13 separate underlying transactions (CMBS: 96.6%) and three classes of a ReREMIC in one transaction (ReREMIC: 3.4%). 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 average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral is concentrated in the 2004 and 2005 vintage (an average of three years of seasoning) with one class (2.03%) from the 1998 vintage. There are no bonds rated below 'B-' category. While overall a significant portion of the collateral is below investment grade, approximately 7.3% is investment grade. JER CDO 2005-1 holds 51.8% in the 'BB' category and 40.8% in the 'B' category. Since Fitch's last review, the underlying collateral has maintained its ratings with the exception of one bond (0.88%) that was upgraded by two notches. The collateral has not realized any losses to date. Although $169.1 million of the underlying collateral is 60 days or more delinquent, most of the tranches within the portfolio have sufficient credit enhancement within their respective structures. Fitch conducted cash flow modeling to test the transaction's structure under various default and interest rate stress scenarios. The ratings for classes A, B-1 and B-2 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 the class C, D, E, F and G notes 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. JOHN REYNEN: Files for Bankruptcy to Prevent Bank Foreclosure ------------------------------------------------------------- John D. Reynen, co-founder of Reynen & Bardis Communities Inc., filed personal bankruptcy protection Wednesday, April 23, 2008, The Sacramento Bee's Jim Wasserman reports. Mr. Reynen's bankruptcy was intended to stave off Bank of the West in San Francisco from foreclosing on his personal possession securing a $26 million-loan, the report says, citing spokeswoman Michele McCormick. Ms. McCormick said that partners, Mr. Reynen and Christo Bardis, "personally guaranteed" at least $740 million used by Reynen & Bardis that was obtained from several creditors but failed to repay the loan, The SacBee relates. The spokeswoman disclosed that Mr. Bardis does not have plans to file for bankruptcy, report says. The SacBee notes that Reynen & Bardis' financial woes started after they expanded in Central Valley and Nevada during the housing boom. According to analysts, assets that the company acquired during the housing boom have lost their value, report reveals. Reynen & Bardis Communities Inc. -- http://www.rbcommunities.com/ -- has over 35 years of experience in land planning and homebuilding process relating to community amenities and home design. It employs about 180 workers. The company controls about 23,500 home lots on 9,215 acres of real property in Sacramento. The partners of the company are John D. Reynen, an attorney and developer, and Christo Bardis, a real estate broker. JOHN REYNEN: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: John D. Reynen aka John Reynen Attn: Reynen and Bardis 10630 Mather Blvd. Mather, CA 95655 Bankruptcy Case No.: 08-25145 Chapter 11 Petition Date: April 23, 2008 Court: Eastern District of California (Sacramento) Judge: Christopher M. Klein Debtor's Counsel: Howard S. Nevins, Esq. Hefner, Stark & Marols, LLP 2150 River Plaza Dr., Ste. 450 Sacramento, CA 95833-3883 Tel: (916) 925-6620 Estimated Assets: $50 million to $100 million Estimated Debts: $500 million to $1 billion Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lennar Renaissance, Inc. trade debt $47,000,000 25 Enterprise Allso Viejo, CA 92656 Wells Fargo Bank bank loan $29,387,928 CLW-Irvine Off. MAC E2148-015 El Segundo, CA 90245 Indymac Bank bank loan $26,833,087 Home Builder Div. P.O. Box 7049 Pasadena, CA 91109-7049 Comerica bank loan $21,583.959 P.O. Box 641618 Detroit, MI 48264-1618 Chase Bank bank loan $17,565,238 P.O. Box 974675 Dallas, TX 75397-4675 Wachovia Bank bank loan $17,316,626 Commercial Loan Service P.O. Box 60503 City of Industry, CA 91716-0503 Weyerhaeuser Realty Investors bank loan $15,886,175 1301 Fifth Ave., Ste. 3100 Seattle, WA 98101 Western Springs National Bank bank loan $13,500,000 4458 Wolf Road Western Springs, IL 60558 Bank of the West bank loan $12,558,139 P.O. Box 515274 Los Angeles, CA 90051-6574 Guaranty Bank bank loan $12,433,852 2400 Maritime Drive, 2nd Floor Elk Grove, CA 95758 First Horizon bank loan $11,688,335 500 Ygnacio Valley Road, Ste. 190 Walnut Creek, CA 94596 Stonefield, Inc. bank loan $10,600,00 355 Boxington Way Sparks, NV 89434 Ernest Ehnisz Trust bank loan $9,582,351 21002 N. Desert Sands Drive Sun City West, AZ 85375 First National Bank of Nevada bank loan $7,550,635 6275 Neil Road Reno, NV 89509 California Bank & Trust bank loan $6,740,023 2929 N. Central Ave., Ste. 200 Phoenix, AZ 85012 River City Bank bank loan $6,474,949 2485 Natomas Park Drive Sacramento, CA 95833 Bank of Sacramento bank loan $6,325,236 Capital Business Banking Center 1415 L. Street, Ste. 100 Sacramento, CA 95814 Key Bank bank loan $5,754,292 P.O. Box 5278 Boise, ID 83705-0278 Sierra Health Foundation bank loan $4,009,571 Attn: Bonucelli & Assoc. 701 University Ave., Ste. 210 Sacramento, CA 95825 Pacific Coast Building bank loan $3,825,826 Products Attn: Bonucelli & Assoc. 701 University Ave., Ste. 210 Sacramento, CA 95825 JOY DYEING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Joy Dyeing & Finishing, Inc. 355 North Vineland Avenue Los Angeles, CA 91746 Bankruptcy Case No.: 08-15480 Type of Business: The Debtor owns and operates wool broadwoven fabric mill. Chapter 11 Petition Date: April 24, 2008 Court: Central District Of California (Los Angeles) Judge: Thomas B. Donovan Debtor's Counsel: Philip A Gasteier, Esq. Email: pgasteier@rdwlawcorp.com Robinson Diamant & Wolkowitz, APC 1888 Century Pk. E. Ste. 1500 Los Angeles, CA 90067 Tel: (310) 277-7400 Fax: (310) 277-7584 http://www.rdwlawcorp.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ United Fabricare Supply, Inc. trade $417,961 1237 West Walnut Compton, CA 90220 American Modern, Inc. trade $221,326 16316 Downey Avenue Paramount, CA 90723 Advantage CDC trade $155,777 11 Golden Shore, Ste. 630 Long Beach, CA 90802 Brenntag Pacific, Inc. trade $153,721 Trigen International trade $118,064 Huntsman International, LLC trade $97,533 I.C.I. trade $79,045 State Compensation Insurance trade $72,685 Fund CHT R Beitlich Corp. trade $66,532 LA Supply Co., LLC trade $62,072 Sejong Supply, Inc. trade $44,402 Snogen Corp. trade $34,760 Westco Spectra Color trade $29,777 Morton Salt trade $28,258 First Comp. Insurance Co. insurance $24,068 Univar trade $13,166 Royal Packaging trade $12,810 Brent Paper Tube trade $12,487 Choi Dow Lan accountant $12,220 Unigard Insurance Co. insurance $10,882 KURLEMANN BUILDERS: Creditor Wants Chapter 7 Case Dismissed ----------------------------------------------------------- John and Connie Musuraca wants the chapter 7 bankruptcy petition of Kurlemann Builders Inc. dismissed by the U.S. Bankruptcy Court for the Southern District of Ohio, reports Lisa Bernard-Kuhn of The Enquirer in Cincinnati. The Musuracas are owed at least $1.55 million by the Debtor. They alleged that Kurlemann tried to skirt pay them to get away with a lawsuit based on "multitude of serious home construction deficiencies" filed in 2003, Enquirer relates. According to the report, the $1.55 million claim of the couple was based on a judgment issued in January 2008 by the Warren County Civil Court. Two months after the judgment was passed, Kurlemann filed for bankruptcy. Founder Bernard Kurlemann asserted in March that his company need not continue its business since there were no more houses to build, Enquirer notes. About Kurlemann Builders Kurlemann Builders Inc. builds homes in Greater Cincinnati through its various units, Kurlemann Homes of Long Cove, LLC and Kurlemann Homes of Indian Hill LLC. Bernard Kurlemann started the company 20 years ago. Kurlemann is marketed under the Kurlemann Custom Building Group brand. It filed for protection under Chapter 7 with the U.S. Bankruptcy Court for the Southern District of Ohio on March 3, 2008. Kurlemann Builders disclosed $61,907 in assets and $1.85 million in liabilities, including at least $1.55 million of the debt associated with two lawsuits filed in Warren County, Ohio. LEHMAN ABS: Moody's Cuts Ratings on 12 Tranches From RMBS Deal -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 12 tranches from 1 subprime RMBS transaction issued by Lehman. Five downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Lehman ABS Mortgage Loan Trust 2007-1 -- Cl. 2-A4, Downgraded to Aa2 from Aaa -- Cl. M1, Downgraded to Baa1 from Aa1 -- Cl. M2, Downgraded to Ba3 from Aa2 -- Cl. M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from Baa2 -- Cl. M9, Downgraded to Caa2 from Baa3 -- Cl. M10, Downgraded to Caa3 from Ba1 -- Cl. M11, Downgraded to Ca from Ba2 LEVITT AND SONS: Given Until May 12 to File Chapter 11 Plan ----------------------------------------------------------- The Honorable Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida extended, until May 12, 2008, the exclusive period by which Levitt and Sons LLC and its debtor- affiliates must file a Chapter 11 plan of reorganization. In addition, the Court gave the Debtors until July 10, 2008 to solicit acceptances of that plan. As reported in the Troubled Company Reporter on April 16, 2008, the Debtors maintain that they have collaborated with the Official Committee of Unsecured Creditors and the Home Purchase Deposit Creditors Committee with respect to all matters affecting the administration of their Chapter 11 cases. Specifically, the Debtors and the Creditors Committee are currently engaged in discussions regarding the terms of a joint liquidating plan of reorganization. Since the Debtors promulgated the draft plan to the Committees, the Creditors Committee and Levitt Corporation have been in discussions regarding, among other things, the treatment of the claims of LEV and the resolution of potential claims against it. Though that while aware of these discussions with LEV, the Deposit Holders Committee has not taken an integral part in the ongoing discussions. Thus, based on the pendency of those discussions, the Debtors advised the Creditors Committee and LEV that they would seek an extension of the Exclusive Periods. No creditor or party-in-interest will be prejudiced by the approximately 30-day extension of the Exclusive Periods, said the Debtors. The Creditors Committee have supported the Debtors' request. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. LNR CDO: Fitch Pares Ratings on $27.4 Mil. Class G Notes to 'BB' ---------------------------------------------------------------- Fitch Ratings downgraded one class and affirmed eight classes of notes issued by LNR CDO III, Ltd. or Corp., (LNR CDO III): -- $319.5 million class A affirmed at 'AAA'; -- $92.7 million class B affirmed at 'AA'; -- $63.2 million class C affirmed at 'A'; -- $23.2 million class D affirmed at 'A-'; -- $4.6 million class E-FX affirmed at 'BBB+'; -- $20.7 million class E-FL affirmed at 'BBB+'; -- $3.8 million class F-FX affirmed at 'BBB'; -- $21.4 million class F-FL affirmed at 'BBB'; -- $27.4 million class G downgraded to 'BB' from 'BBB-'. Additionally, Fitch has removed classes B through G from Rating Watch Negative, where they were originally placed on Jan. 16, 2008. Fitch does not rate classes H, J, K, and preferred shares. LNR CDO III is a commercial real estate collateralized debt obligation primarily backed by commercial mortgage backed securities B-pieces and closed on Aug. 8, 2005. CMBS B-piece resecuritizations (also referred to as first loss CRE CDOs ReREMICs) are CRE CDOs and ReREMIC transactions that include the most junior bonds of CMBS transactions. LNR Partners, Inc. (rated 'CSS1' by Fitch as a commercial mortgage special servicer) selected the initial collateral and serves as the collateral administrator. The collateral for this CDO consists of CMBS bonds (predominantly high-yielding junior bonds), and one unrated commercial real estate mezzanine loan. 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 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. LNR CDO III is collateralized by all or a portion of 198 classes of CMBS from 52 separate underlying transactions (CMBS: 98.9%) and one CRE mezzanine loan (CREL: 1.1%). 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 above-average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1997 to 2004 (an average of 4.6 years of seasoning). Approximately 27.4% of the collateral currently is rated below 'B-' or not rated, and therefore, is more susceptible to losses in the near-term. While a significant portion of the collateral is below investment grade, approximately 8% is investment grade. LNR CDO III holds 35.7% in the 'BB' category and 28.8% in the 'B' category. The CDO has paid down $179.2 million (16.3%) since issuance. Classes A through G have amortized as a result of the repayment of eight of the original nine CRELs. The benefit of the loan paydowns is all but over, however, given that only one CRE loan remains outstanding (1.1% of total collateral balance). The collateral has realized $8.1 million in losses to date, 0.7% of the original collateral. Based on the original below 'B-' balance of $292 million, this loss rate equates to a 2.8% loss rate on the below 'B-' collateral. Given the seasoning of the collateral, this loss rate is relatively low. Although $259.7 million of the loans in the underlying CMBS transactions are currently 60 days or more delinquent, projected losses to the CDO are low. Fitch conducted cash flow modeling to test the transaction's structure under various default and interest rate stress scenarios. The ratings on the class A and B notes address the timely payment of interest and ultimate repayment of principal. The ratings on classes C, D, E-FX, E-FL, F-FL, F-FX and G address the ultimate payment of interest and ultimate repayment of principal. MARTINO & CARD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Martino & Card Remodeling, LLC 715 Boston Post Road West Haven, CT 06516 Bankruptcy Case No.: 08-31251 Type of Business: The Debtor is a remodeler. Chapter 11 Petition Date: April 22, 2008 Court: District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: James M. Nugent, Esq. Email: jmn@quidproquo.com Harlow, Adams, and Friedman 300 Bic Drive Milford, CT 06460 Tel: (203) 878-0661 Estimated Assets: $2,448,880 Estimated Debts: $1,550,583 Debtors' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bradco Supply business debt $120,000 130 Frontage Road West Haven, CT 06516 State of Connecticut business debt $111,000 Department of Labor P.O. Box 2940 Hartford, CT 06104-2940 Kamco Supply business debt $80,000 780 North Colony Road Wallingford, CT 06492 Gympsum Specialties business debt $60,000 Building Specialties business debt $50,203 Internal Revenue Service business debt $30,000 Orange Fence business debt $25,000 Swiss Insurance business debt $21,423 AA Metro Messenger business debt $17,441 Metcalf Paving business debt $16,900 Tilcon business debt $16,900 Armando Alvarenga business debt $16,000 State of Connecticut DRS payroll & property $15,000 tax Matthew M. Martino business debt $14,200 National Lumber business debt $14,000 North American Specialty business debt $10,871 A.G. Adjustment, Ltd. business debt $10,845 Lynn Ladder & Scaffolding business debt $10,547 Kamco Supply $10,393 State of Connecticut DSS business-child $10,000 support payments Enterprise Rental business debt $10,000 MASTR TRUSTS: S&P Gives 'D' Rating on Four Classes of 2006 Certs. ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of asset-backed certificates from four 2006-vintage MASTR Asset Backed Securities Trust series to 'D' from 'CC'. The other outstanding ratings from these four transactions were not affected. S&P downgraded the classes to 'D' due to realized losses during the March 2008 remittance period. The loss amounts were $52,909.45 for series 2006-FRE1, $2,128,154.72 for series 2006- WMC2, $3,696,936.62 for series 2006-WMC3, and $5,210,634.64 for series 2006-WMC4. Credit support for these transactions is provided by subordination, excess interest, and overcollateralization. At issuance, the collateral backing the deals consisted of subprime, fixed- and adjustable-rate, fully amortizing first-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered MASTR Asset Backed Securities Trust Rating ------ Series Class To From ------ ----- -- ---- 2006-FRE1 M-9 D CC 2006-WMC2 M-9 D CC 2006-WMC3 M-9 D CC 2006-WMC4 M-11 D CC MAYFAIR POMONA: Case Summary & Four Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Mayfair Pomona, LLC 17231 Dearborn Street Northridge, CA 91325 Bankruptcy Case No.: 08-12424 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: April 18, 2008 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Charles Shamash, Esq. Email: cs@locs.com Cacerres & Shamash, LLP 8383 Wilshire Blvd., Ste. 1010 Beverly Hills, CA 90211 Tel: (323) 852-1600 Total Assets: $400 Total Debts: $4,640,968 Debtor's Four Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ All California Funding Mortgage $3,525,146 Attn: ACF Reconveyance 14958 Ventura Bl., 2nd Fl. Sherman Oaks, CA 91403 Pomona Mayfair, LLC Mortgage $590,000 150 East Third Street Pomona, CA 91766 Attn: Bradley L. Cornell, Esq. Choate & Choate 2596 Mission St., Ste. 300 San Marino, CA 91108 Legacy Constuction, Inc. Mechanics Lien $481,741 3835R East Thousand Oaks Bl., Unit 147 Westlake Village, CA 91362 Los Angeles County Tax Property $44,081 Collector MCCLATCHY COMPANY: Posts $993K Net Loss in Quarter ended March 30 ----------------------------------------------------------------- The McClatchy Company reported net loss from continuing operations in the first quarter ended March 30, 2008 of $993,000. Adjusted for two items, earnings from continuing operations were $1.6 million in the first quarter of 2008. Total net loss, including discontinued operations, was $849,000. The results were disclosed in an 8K filing with the SEC. Net income from continuing operations in the first quarter of 2007 was $14.5 million. In the first quarter of 2007 the company recorded a loss from discontinued operations of $5.5 million related to the results of the Star Tribune newspaper in Minneapolis, which the company sold on March 5, 2007. The company's total net income in the 2007 quarter, including discontinued operations, was $9.0 million. Early in the second quarter of 2008, McClatchy and its partners, affiliates of Cox Enterprises Inc. and Media General Inc., completed the sale of SP Newsprint Company, of which McClatchy was a one-third owner. Proceeds from the sale were used to reduce debt. McClatchy expects to record a pre-tax gain on the transaction in the second quarter of between $32 million to $34 million. Separately, McClatchy disclosed a tender offer for the cash purchase of up to $250 million aggregate principal of its outstanding public notes maturing in 2009, 2011 and 2014. "As anticipated, our advertising revenues in the first quarter of 2008 were hurt by the weakening economy and the secular shift in advertising demand to online products," Gary Pruitt, chairman and chief executive officer, said. "California and Florida continue to be hurt more than other regions by the real estate downturn, so even though they represent only a third of our advertising revenues they account for 56% of the decline. While our first quarter advertising results were not unexpected, we are disappointed with double-digit declines." "We continue to generate significant cash and repaid over $76 million of debt in the first quarter," Pat Talamantes, McClatchy's chief financial officer, said. "Debt at the end of the quarter was $2.396 billion compared to $2.472 billion at the end of 2007." "We used $53 million of gross proceeds from the SP sale to further reduce debt early in the second quarter," Mr. Talamantes related. "We expect the tax refund related to the sale of the Star Tribune to yield $185 million in cash in the second quarter which will be used to further reduce debt, and we continue to expect our debt balance at the end of 2008 to be approximately $2 billion." About The McClatchy Company Headquartered in Sacramento, California, The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- has 30 daily newspapers, approximately 50 non-dailies and direct marketing and direct mail operations. McClatchy also operates local websites in each of its markets which extend its audience reach. The websites offer users information, comprehensive news, advertising, e-commerce and other services. * * * As reported in the Troubled Company Reporter on April 3, 2008, Moody's Investors Service downgraded The McClatchy Company's corporate family rating and probability of default rating to Ba3 from Ba2, and the rating on the senior unsecured notes to B1 from Ba3, concluding the review for downgrade initiated on Feb. 29, 2008. MCCLATCHY CO: Revenue Decline Prompts S&P to Chip Rating to 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings for The McClatchy Co. by one notch and subsequently placed them on CreditWatch with negative implications. The corporate credit rating was lowered to 'BB-' from 'BB'. "The downgrade and CreditWatch listing follow McClatchy's March 2008 quarterly earnings release and reflect a worsening pace of decline in advertising revenue at the company's newspaper publications," said Standard & Poor's credit analyst Emile Courtney. In the March quarter, McClatchy reported that advertising revenue (including online revenue) declined 15% and total revenue declined 14%. The company also stated it expects advertising revenue to decline in the low- to mid-teens percentage area in the June 2008 quarter. S&P estimates that EBITDA declined in the March 2008 quarter by more than 20% and that leverage (as measured by total lease- and unfunded pension-adjusted debt to EBITDA) was near 5x (S&P's measure of adjusted leverage is about 0.4x higher than McClatchy's measure of leverage, on average). The prior rating incorporated S&P's expectation for 2008 advertising and total revenue declines in the mid- to high-single- digit percentage area, and for EBITDA to decline in the high- single-digit percentage area. In addition, S&P previously believed that McClatchy would repay significant amounts of debt in 2008 and achieve adjusted leverage (by S&P's measure) in the mid- 4x area by the end of this year. The current rate of revenue and EBITDA declines are not consistent with S&P's expectations at the prior rating. S&P is now concerned that leverage may not improve, even factoring in $185 million in cash proceeds from a tax refund that the company expects to receive in the June 2008 quarter from its sale of the (Minneapolis) Star Tribune, as well as positive expected free cash flow from operations. In the event that revenue declines persist at or near the current rate for the remainder of the year, or if McClatchy does not receive $115 million in additional cash proceeds in the December 2008 quarter from the sale of land in Miami, significant additional cost cuts would be required to avoid a further weakening of credit measures and a potential violation of bank covenants. S&P does not anticipate that the tender offers announced will reduce a meaningful amount of leverage. In addition to reviewing expected asset sale proceeds, operating performance, and additional potential cost-cutting measures in 2008, S&P will also review the expected cushion in the company's bank facility covenants in resolving the CreditWatch listing. MOVIDA COMMUNICATIONS: Operations to Continue Under New Owner ------------------------------------------------------------- Movida Communications Inc.'s products and services remain available through their extensive distribution channel following its acquisition by APC Wireless' unit, Cozac Wireless LLC for $2.8 million, Washington Business Journal reports. The buy deal closed on April 18, 2008, Business Journal says. In a press release, APC Wireless said that Movida prides itself in offering high quality services at a great value, while simultaneously integrating itself in the Hispanic communities that it serves. Movida's overall mission is to enable the Hispanic community to connect to the world in which they live without the burden of imposed annual contracts and irrational or inflexible pricing, while providing state-of-the art handsets and a vast inventory of wireless content download options that are Latino centric and relevant to Movida's customers. Movida is the preferred Hispanic wireless solution, APC Wireless commented. "We look forward to continuing with all the services and offerings that Movida has provided in the past and we look to build on that for the future," said Paul Greene, APC Wireless Chief Executive Officer. "All of Movida's Rate Plans and Airtime Cards will remain as they are today and Customers can reach the services team at the same number." "We are very excited about this development," said Michael Robinson, CEO for Movida Communications. "APC's expertise and industry influence will allow us to again be aggressive at providing affordable quality service to our customers." Beginning immediately, all Movida cards are available at retail locations. New handset offerings will be available soon. Movida Communications customers can continue receiving the great support they are accustomed to and top up their cards by calling 1-877- 3MOVIDA About APC Wireless APC Wireless -- http://www.apcwireless.com/-- bridges the gap between wireless producers and merchants by creating tailored electronic solutions for mobile devices. Extensive industry knowledge allows APC Wireless to efficiently provide clients ranging from Carriers, to MVNO's, Wholesalers and Retailers with an extensive product selection, at the best possible value. About Movida Communications Headquartered in Kansas City, Missouri, Movida Communications Inc. -- http://www.movidacellular.com/-- is a wireless service provider that offers pay-as-you-go wireless voice and data communications services using a national providers digital network. The company filed for Chapter 11 protection on March 31, 2008 (Bankr. D. Del. Case No. 08-10600). Michael R. Nestor, Esq., at Young Conaway Stargatt & Taylor, in Wilmington, Delaware, represents the Debtor. When the Debtor filed for protection from its creditors, it listed asstes between $10 million to $50 million and debts between $50 million to $100 million. No trustee, examiner or official committee of unsecured creditors has been appointed in this case. Movida sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to, among others, wind down it business and a sale of the Debtor's operations and assets. NATIONSTAR HOME: High Delinquencies Cue Moody's 29 Rating Cuts -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 38 tranches from 6 subprime RMBS transactions issued by Nationstar and Centex. 15 downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Nationstar Home Equity Loan Asset-Backed Certificates, Series 2007-C -- Cl. M-2, Downgraded to A1 from Aa2 -- Cl. M-3, Downgraded to Baa1 from Aa3 -- Cl. M-4, Downgraded to Ba1 from A1 -- Cl. M-5, Downgraded to Ba3 from A2 -- Cl. M-6, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from B1 -- Cl. M-10, Downgraded to C from Caa2 Issuer: Nationstar Home Equity Loan Trust 2006-B -- Cl. M-5, Downgraded to Baa1 from A2 -- Cl. M-6, Downgraded to Ba1 from A3 -- Cl. M-7, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba1 -- Cl. M-11, Downgraded to Caa2 from Ba2 Issuer: Nationstar Home Equity Loan Trust 2007-A -- Cl. M-5, Downgraded to A3 from A2 -- Cl. M-6, Downgraded to Ba1 from Baa1 -- Cl. M-7, Downgraded to B1 from Baa2 -- Cl. M-8, Downgraded to B1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B2 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa2 from B3 Issuer: Nationstar Home Equity Loan Trust 2007-B -- Cl. M-3, Downgraded to A1 from Aa3 -- Cl. M-4, Downgraded to Baa2 from A1 -- Cl. M-5, Downgraded to Ba1 from A2 -- Cl. M-6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa2 from B3 Issuer: Centex Home Equity Loan Trust 2005-D -- Cl. B-2, Downgraded to Ba3 from Baa3 -- Cl. B-3, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade Issuer: Centex Home Equity Loan Trust 2006-A -- Cl. M-5, Downgraded to A3 from A2 -- Cl. M-6, Downgraded to Ba2 from A3 -- Cl. M-7, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M-10, Downgraded to Caa1 from Ba3 -- Cl. M-11, Downgraded to Caa3 from B3 NOMURA TRUSTS: S&P Downgrades Ratings on Class M-3 to 'CCC' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class M-3 mortgage pass-through certificates from Nomura Asset Acceptance Corp. Alternative Loan Trust Series 2004-AP3. The downgrade brought the class M-3 rating to speculative-grade from investment-grade. Concurrently, S&P affirmed its ratings on the remaining seven classes from this transaction. The lowered rating reflects a steady increase in the dollar amount of loans in the transaction's delinquency pipeline over the past six months, combined with deterioration in credit support due to realized losses. The high levels of total delinquencies and severe delinquencies (90-plus days, foreclosures, and REOs) in this transaction indicate that losses will continue to increase and further erode available credit support. Severe delinquencies have risen by 26% to $9.040 million over the past six remittance periods, while the average monthly net loss was $211,359 for the same period. Overcollateralization for this transaction is approximately $210,000 below its target of $1.069 million. As of the March 2008 remittance report, cumulative realized losses were $1,641,491, or 0.54% of the original principal balance; total delinquencies were 11.48% of the current principal balance; and severe delinquencies were 8.03% of the current principal balance. The lowered rating is in line with the projected credit enhancement amount following the liquidation of many of the loans currently in the transaction's delinquency pipeline. S&P's expected losses also factor in loans that are now current but may default in the future. The affirmations reflect current and projected credit support percentages that are sufficient to support the certificates at their current rating levels. The initial credit enhancement percentages meet or exceed the amount required for the affirmed ratings. A combination of subordination, excess spread, and O/C provides credit support for this transaction. The underlying collateral for the deal consists primarily of fixed-rate, conventional mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered Nomura Asset Acceptance Corp. Alternative Loan Trust Series 2004-AP3 Mortgage pass-through certificates Rating ------ Class To From ----- -- ---- M-3 CCC BBB+ Ratings Affirmed Nomura Asset Acceptance Corp. Alternative Loan Trust Series 2004-AP3 Mortgage pass-through certificates Class Rating ----- ------ A-3 AAA A-4 AAA A-5A AAA A-5B AAA A-6 AAA M-1 AA+ M-2 A+ NON-INVASIVE MONITORING: Posts $528,609 Net Loss in Second Qtr. --------------------------------------------------------------- Non-Invasive Monitoring Systems Inc. reported a net loss of $528,609 on total revenues of $68,068 for the second quarter ended Jan. 31, 2008, compared with a net loss of $232,048 on total revenues of $80,756 in the same period last year. The decrease in total revenues resulted from a decrease in royalties of $26,687, partially offset by an increase in product sales of $14,000. The increase in net loss was primarily due to an increase in operating expenses. Balance Sheet At Jan. 31, 2008, the company's balance sheet showed $1,075,286 in total assets, $707,719 in total liabilities, and $367,567 in total stockholders' equity. Full-text copies of the company's financial statements for the quarter ended Jan. 31, 2008, are available for free at: http://researcharchives.com/t/s?2b0f Going Concern Doubt Eisner LLP, in New York, expressed substantial doubt about Non- Invasive Monitoring Systems Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended July 31, 2007. The auditing firm pointed to the company's recurring losses from operations and accumulated deficit. Th company has an accumulated deficit of $17,057,416 as of Jan. 31, 2008. About Non-Invasive Monitoring Based in Miami, Fla., Non-Invasive Monitoring Systems Inc. (OTC BB: NIMU) -- http://www.nims-inc.com/-- is engaged in the development of innovative medical products utilizing new and unique technologies to address a wide variety of medical conditions. The company specializes in products that use a natural approach to assist subjects without the use of drugs or any invasive procedures. The company's flagship product is the Acceleration Therapeutics AT-101. NOR-SKI & SPORTS: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Nor-Ski & Sports, Inc. 1223 Ustilago Drive San Ramon, CA 94582 Bankruptcy Case No.: 08-41925 Type of Business: The Debtor sells gear and apparel for skiing, snowboarding and other sports. See http://www.www.nor-ski.com/ Chapter 11 Petition Date: April 22, 2008 Court: Northern District of California (Oakland) Judge: Randall J. Newsome Debtor's Counsel: Darya Sara Druch, Esq. Email: darya@daryalaw.com 1 Kaiser Plaza, Ste. 480 Oakland, CA 94612 Tel: (510) 465-1788 Total Assets: $396,941 Total Debts: $2,548,796 Debtor's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Centurion Credit Card Purchases $329,000 Bank P.O. Box 0001 Los Angeles CA 90096-0001 Burton Snowboards Goods $231,624 P.O. Box 11626 Tacoma WA 98411-6626 Attn: Robert Laymon Intercontinental Financial Ser. 32107 Lindero Canyon Rd., Ste. 222 Westlake Village CA 91361 Bank Americard Visa $120,850 P.O. Box 15716 Wilmington DE 19886-5716 Credit Card Purchases $114,142 Nordica USA UCC-1 Financing $143,377 statement; value of security: $44,825 Bank of America Line of Credit $100,000 Washington Mutual Line of Credit $100,000 Speedo/Authentic Fitness Cor. Goods $84,059 Atomic/Amer Sports Goods $82,165 A. Mordo & Sons Goods $81,782 Warrior Sports Goods $75,455 Rossignol/Quiksilver UCC-1 Financing $69,418 statement; value of security: $10,500 Citifinancial Credit Card Purchases $35,550 Chase Visa Credit Card Purchases $33,600 Citibank Master Card Credit Card Purchases $22,200 Russell and Joan Bruzzone Lease $21,568 Chase Business Card Credit Card Purchases $21,547 Boeri USA Goods $20,384 Ge Money Bank Credit Card Purchases $18,000 Turbine Boardwear/Tin Man Goods $16,062 NOVASTAR MORTGAGE: 67 Tranches Get Moody's Rating Downgrades ------------------------------------------------------------ Moody's Investors Service downgraded the ratings of 67 tranches from 8 subprime RMBS transactions issued by NovaStar Mortgage Funding Trust. Eighteen downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: NovaStar Mortgage Funding Trust 2007-1 -- Cl. M-1, Downgraded to A3 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2 -- Cl. M-3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to Caa1 from A3 -- Cl. M-6, Downgraded to Caa2 from Baa2 -- Cl. M-7, Downgraded to Caa3 from Ba2 -- Cl. M-8, Downgraded to Caa3 from B1 -- Cl. M-9, Downgraded to Ca from Caa2 Issuer: NovaStar Mortgage Funding Trust 2007-2 -- Cl. M-1, Downgraded to A2 from Aa1 -- Cl. M-2, Downgraded to Baa3 from Aa2 -- Cl. M-3, Downgraded to Ba2 from Aa3 -- Cl. M-4, Downgraded to Ba3 from A1 -- Cl. M-5, Downgraded to B1 from A2 -- Cl. M-6, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-9, Downgraded to Caa1 from Baa3 -- Cl. M-10, Downgraded to Caa2 from Ba1 Issuer: NovaStar Mortgage Funding Trust Series 2006-4 -- Cl. M-2, Downgraded to Baa1 from Aa2 -- Cl. M-3, Downgraded to Ba2 from Aa3 -- Cl. M-4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa1 -- Cl. M-7, Downgraded to Caa2 from Baa3 -- Cl. M-8, Downgraded to Caa2 from Baa3 -- Cl. M-9, Downgraded to Caa3 from Ba2 Issuer: NovaStar Mortgage Funding Trust, Series 2006-1 -- Cl. M-2, Downgraded to A2 from Aa3 -- Cl. M-3, Downgraded to Baa2 from A1 -- Cl. M-4, Downgraded to Ba3 from A2 -- Cl. M-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa1 -- Cl. M-7, Downgraded to Caa2 from Baa2 -- Cl. M-8, Downgraded to Caa3 from Baa3 Issuer: NovaStar Mortgage Funding Trust, Series 2006-2 -- Cl. M-1, Downgraded to Aa3 from Aa2 -- Cl. M-2, Downgraded to A2 from Aa3 -- Cl. M-3, Downgraded to Baa3 from A1 -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa2 -- Cl. M-7, Downgraded to Caa2 from Baa3 -- Cl. M-8, Downgraded to Caa3 from Ba1 Issuer: NovaStar Mortgage Funding Trust, Series 2006-3 -- Cl. M-2, Downgraded to A3 from Aa3 -- Cl. M-3, Downgraded to Ba1 from A1 -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa2 -- Cl. M-7, Downgraded to Caa2 from Baa3 -- Cl. M-8, Downgraded to Caa3 from Ba1 Issuer: NovaStar Mortgage Funding Trust, Series 2006-5 -- Cl. M-1, Downgraded to Aa2 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa2 -- Cl. M-7, Downgraded to Caa2 from Ba1 -- Cl. M-8, Downgraded to Caa3 from Ba3 -- Cl. M-9, Downgraded to Caa3 from B2 Issuer: NovaStar Mortgage Funding Trust, Series 2006-6 -- Cl. M-1, Downgraded to A1 from Aa1 -- Cl. M-2, Downgraded to Ba1 from Aa2 -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa2 -- Cl. M-7, Downgraded to Caa2 from Ba1 -- Cl. M-8, Downgraded to Caa2 from Ba2 -- Cl. M-9, Downgraded to Caa3 from B2 NT HOLDING: March 31 Balance Sheet Upside-Down by $200,780 ---------------------------------------------------------- NT Holding Corp.'s consolidated balance sheet at March 31, 2008, showed $1,902,156 in total assets and $2,102,936 in total liabilities, resulting in a $200,780 total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,902,156 in total current assets available to pay $1,923,534 in total current liabilities. The company reported a net loss of $73,343 for the first quarter ended March 31, 2008, compared with a net loss of $210,786 for the same period last year. The company reported zero revenues during the three months ended March 31, 2008, versus revenues of $5,288,050 during the three months ended March 31, 2007. Liquidity and Capital Resources The company's cash balance as of March 31, 2008 was $0. The company does not currently have sufficient capital in its accounts, nor sufficient firm commitments for capital to assure its ability to meet its current obligations or to continue its planned operations. The company is continuing to pursue working capital and additional revenue through the seeking of the capital it needs to carry on its planned operations. The company has received additional capital through the expansion of vendor financing and loans from its directors and shareholders during the previous quarters and expects such financing will be its only source of capital in the near future. * * * Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2b10 Going Concern Madsen & Associates CPA's Inc., in Salt Lake City, expressed substantial doubt about NT Holding Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm said that the company does not have the necessary working capital to service its debt and for its planned activity. The company has an accumulated deficit of $1,085,680 at March 31, 2008. About NT Holding Based in Reno, Nevada, NT Holding Corp. (OTC BB: NTHH) -- http://www.ntholdingcorp.com/ -- through its wholly owned subsidiary Eastbay Management Limited, the company owned 70% of PT Borneo that owns a right of concession on coal mines on a total area of 19,191 hectares in the territory of East Kalimantan of the Republic of Indonesia. ONE CARTER: Right, Title and Membership Interest for Auction May 7 ------------------------------------------------------------------ One Carter SPE LLC is selling its right, title and 100% membership interest, subject to bigger and better offers, at an auction on May 7, 2008, 1:00 p.m. Potential bidders are required to deposit $50,000 to participate in the bidding process. Deposits may only be made in cash, bank, certified treasurer's or cashier's check at time and place of sale. Any balance remaining must be settled within four business days. For more information, interested parties may contact: Keith R. Walsh, Esq. Brown Rudnick, Berlack Israels LLP One Financial Center Boston, MA 02111 Tel (617) 856-8147 Headquartered in Sierra Madre, California, One Carter LLC is a Delaware limited liability company organized for the purpose of acquiring, financing, owning, operating and developing real property. PRIDE INT'L: BOD's Actions May Cue Seadrill's Buyout, Fitch Says ---------------------------------------------------------------- Pride International announced that its Board of Directors has revised the company's Stockholder Rights Plan to lower the threshold level of beneficial ownership that would trigger the poison pill from 15% to 10% for acquisitions by Seadrill Limited and its affiliates and associates. Pride's Board of Directors took this step in response to Seadrill's acquisition of an approximately 9.9% ownership stake in Pride. In addition, Seadrill has made a filing under the Hart-Scott- Rodino Antitrust Improvements Act of 1976 to permit it to acquire Pride securities. It is unclear at this time if Pride's Board of Directors has taken this step for the purpose of remaining independent or in order to engage in more formal negotiations with Seadrill. Fitch notes that one potential outcome stemming from the announcement is that Pride could be acquired by Seadrill. If an acquisition should occur, Pride bondholders are protected by a change of control provision in the company's $500 million of 7.375% senior notes due 2014. Bondholders have the ability to force the company to repurchase the notes at 101% of par plus accrued and unpaid interest, but only if the change in control results in a ratings downgrade. Additionally, Pride's $500 million senior secured credit facility contains a change of control protection for lenders. The revolver was undrawn at year-end 2007 and had only $13.3 million of letters of credit on the facility. Lenders of the company's $300 million of 3.25% convertible senior notes due 2033 contain multiple protections. Noteholders have the right to require the company to repurchase the notes on May 1, 2008 at 100% of the principal amount plus accrued and unpaid interest. More importantly, the notes are convertible into Pride's common stock at a conversion rate of 38.9045 shares per $1,000 principal amount of notes (equal to a conversion price of $25.704 per share). The notes are currently convertible and Pride has announced its plans to redeem the notes on May 16, 2008, effectively forcing noteholders to convert before May 15, 2008. Pride currently expects to pay approximately $300 million in cash in connection with the conversion and the remaining amount satisfied in shares. Fitch has not taken any rating actions on Pride as a result of the current disclosure by the company. Fitch would note that should Seadrill succeed in acquiring Pride, negative rating action at Pride remains a possibility. Seadrill currently operates with significantly higher leverage than its peers in the offshore drilling market. In addition, Seadrill has been significantly more aggressive in acquiring and building newbuilds on a speculative basis than has Pride or others in the industry. Pride's ratings reflect the significant improvement the company has made in reducing debt and capitalizing on the strong offshore drilling environment to sell non-core assets and refocus the company as an offshore drilling contractor with a focus on deepwater assets. Pride's credit metrics reflect these improvements as well as the strong market conditions for offshore drilling rigs. For the last 12 months ending Dec. 31, 2007, Pride generated $918.3 million of EBITDA, and free cash flow was $28.6 million. Credit metrics were robust with interest coverage of 11 times and debt-to-EBITDA of 1.3x. Fitch currently maintains these ratings for Pride: -- Issuer Default Rating at 'BB'; -- Senior unsecured at 'BB'; -- Senior secured bank facility at 'BBB-'; -- Senior convertible notes at 'BB'. The Rating Outlook is Stable. PRIMEDIA INC: Appoints Charles Stubbs as President and CEO ---------------------------------------------------------- PRIMEDIA Inc. disclosed the appointment of Charles Stubbs to the position of president and CEO. Mr. Stubbs replaces Robert Metz. Mr. Stubbs has built a career in senior management positions leading and transforming leading print brands into successful Internet businesses. He joins PRIMEDIA from Yellowpages.com where he spent three and one-half years as president and CEO, driving the integration of three Internet Yellow Pages businesses into a single cohesive brand. Through investments in platform, products and sales channels, Mr. Stubbs firmly established Yellowpages.com's position as a Top 30 Internet site. Prior to Yellowpages.com, Mr. Stubbs served as president of BellSouth IntelliVentures, the electronic media division of BellSouth Advertising and Publishing group. Earlier at the company, Mr. Stubbs led the launch of RealPages.com. He also held a senior management position at InfoSpace, where he was responsible for growing advertising and licensing revenue. "Consumer Source is at an exciting time in its lifecycle and Charles is exactly the right person to lead the company forward," Dean Nelson, chairman of PRIMEDIA Inc., said. "He is a proven manager and an expert in both traditional and online media who has shown he can energize products and create digital strategies for businesses rooted in print. We view opportunities for growth as being tied largely to digital media and he clearly has the skill set and operational experience to execute on these initiatives. We're delighted to welcome him to the Consumer Source and PRIMEDIA team." "On behalf of the PRIMEDIA Board I would like to thank Bob for his many years of hard work and leadership," Nelson added. "Bob has been with Consumer Source from the very beginning and has been instrumental in making it a category leader. He has effectively guided the company to drive year over year revenue growth in each year of its existence." "I couldn't be more thrilled to join the strong team at PRIMEDIA," Mr. Stubbs said. "By fully leveraging its print heritage, there is every opportunity to continue to build a powerful and cohesive Internet brand. I believe the prospects for this business are outstanding and that more value can be extracted by even more aggressively extending the Consumer Source value proposition into new media." Headquartered in New York City, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- is the parent company of Consumer Source Inc., a publisher and distributor of free consumer guides in the U.S. with Apartment Guide, Auto Guide, and New Home Guide, distributing free consumer publications through its proprietary distribution network, DistribuTech, in more than 60,000 locations. At Dec. 31, 2007, Primedia Inc.'s balance sheet showed a $143.8 million stockholders' deficit, compared to $523.2 million deficit at Dec. 31, 2006. * * * The company's 8% Senior Notes due 2013 carry Moody's Investors Service's B2 rating. RANDY JONES: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Randy L. Jones 1459 Jones Road Claxton, GA 30417 Bankruptcy Case No.: 08-60242 Chapter 11 Petition Date: April 23, 2008 Court: Southern District of Georgia (Statesboro) Debtor's Counsel: H. Lehman Franklin, Jr. Email: hlfpcbankruptcy@hotmail.com H. Lehman Franklin, PC P.O. Box 964 Statesboro, GA 30459 Tel: (912) 764-9616 Fax: (912) 764-8789 Estimated Assets: $500 million to $1 billion Estimated Debts: $100 million to $500 million The Debtor did not file a list of its largest unsecured creditors. RESIDENTIAL CAPITAL: Borrows $465MM from GMAC LLC to Add Liquidity ------------------------------------------------------------------ Residential Funding Company and GMAC Mortgage LLC, both subsidiaries of Residential Capital, LLC, borrowed $468 million collectively under a Loan and Security Agreement with ResCap's parent, GMAC LLC, as lender, to provide ResCap's subsidiaries with a revolving credit facility with a principal amount of up to $750 million, providing incremental liquidity for ResCap's operations until longer-term financing is arranged. To secure the obligations of RFC and GMAC Mortgage under the Loan and Security Agreement, RFC and GMAC Mortgage have pledged as collateral, their servicing rights and related contractual rights under certain pooling and servicing agreements and loan servicing agreements with respect to pools of first- and second-lien mortgage loans and home equity lines of credit. This funding will bear interest at a floating rate equal to one- month LIBOR plus 2.00%. RFC and GMAC Mortgage may request loans from the lender under the Loan and Security Agreement until Oct. 17, 2008, at which point the loans mature, unless they are repaid earlier when a third-party lending facility is put in place secured by the servicing rights. RFC and GMAC Mortgage give representations, covenants and indemnities that are customary in similar facilities. ResCap has entered into a Guarantee pursuant to which it guarantees the payment by RFC and GMAC Mortgage of their obligations under the Loan and Security Agreement. As reported in the Troubled Company Reporter on April 9, 2008, GMAC LLC purchased $1.2 billion of ResCap's notes in open market. The notes have a fair value of approximately $607,192,000 to ResCap in exchange for 607,192 ResCap Preferred units with a liquidation preference of $1,000 per unit. ResCap canceled the $1.2 billion face amount of notes. GMAC may, in its sole discretion, on or before May 31, 2008, contribute up to an additional approximately $340 million of ResCap notes, having a fair value of approximately $265,779,000, for additional ResCap Preferred units. The ResCap Preferred ranks senior in right of payment to ResCap's common membership interests with respect to distributions and payments on liquidation, winding-up or dissolution of ResCap. ResCap and GMAC are investigating various strategic alternatives related to all aspects of ResCaps business, including extensions and replacements of existing secured borrowing facilities, and establishing additional sources of secured funding for ResCaps operations. One potential source of new secured funding is credit secured by certain of ResCaps mortgage servicing rights. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. Cerberus Capital Management LP bought 51% GMAC LLC stake from General Motors Corp. on December 2006. About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC - - http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. RESIDENTIAL CAPITAL: Directors' Stepdown Cues Moody's Junk Rating ----------------------------------------------------------------- Moody's Investors Service downgraded to Caa1, from B2, its ratings on the senior debt of Residential Capital, LLC. Separately, the senior unsecured rating of GMAC LLC was downgraded to B2 from B1. Both the ResCap and GMAC ratings are under review for downgrade. ResCap's downgrade follows the company's announcement that the two independent directors on its board have resigned. Moody's considered these independent directors a key component of ResCap's corporate governance due to their responsibility to protect the interests of ResCap's creditors in certain matters. "The absence of independent directors increases the likelihood that ResCap will take actions that are negative for creditors," said Moody's Vice President and Senior Credit Office Craig Emrick. Moody's noted that according to the GMAC and ResCap operating agreement ResCap cannot declare bankruptcy unless the board contains at least one independent director and a majority of the independent directors approve such action. In its review Moody's will focus on liquidity, profitability prospects, and likelihood of future support by GMAC. Moody's will consider the company's liquidity profile and its maintenance of appropriate contingent liquidity in the form of cash and liquid assets and committed credit lines available for general use. More specifically, the review will focus on the resolution of the company's $1.75 billion bank loan which matures in July 2008 and $875 million committed, undrawn, unsecured revolver which matures in June 2008 (although this facility can be termed out for one year). Furthermore, Moody's does not expect the company to report quarterly profitability in 2008. The rating agency added the capital support of $1.2 billion received by ResCap from GMAC in the first quarter (at an approximately $600 million cash cost to GMAC) signals that ResCap experienced a sizable loss in the first quarter of 2008, its sixth consecutive quarterly loss. Finally, the likelihood and form of continued support from GMAC and its ultimate parents Cerberus and GMAC, remain major rating issues. Moody's still believes that ResCap's parents may have a limited tolerance for supporting ResCap if ResCap's performance and condition fail to meet management's expectations for improvement during the first half of 2008. Downgrades: Issuer: Residential Capital, LLC -- Multiple Seniority Shelf, Downgraded to a range of (P)Caa2 to (P)Caa1 from a range of (P)B3 to (P)B2 -- Subordinate Regular Bond/Debenture, Downgraded to Caa2 from B3 -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 from B2 ..Issuer: Residential Funding of Canada Finance ULC -- Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 from B2 Outlook Actions: ..Issuer: Residential Capital, LLC -- Outlook, Changed To Rating Under Review From Negative ..Issuer: Residential Funding of Canada Finance ULC -- Outlook, Changed To Rating Under Review From Negative ResCap is a subsidiary of GMAC LLC and is headquartered in Minneapolis, Minnesota. Rescap reported equity of $6.0 billion at Dec. 31, 2007. RESTORE MEDICAL: Losses Prompt KPMG Expresses Going Concern Doubt ----------------------------------------------------------------- KPMG LLP raised substantial doubt about the ability of Restore Medical, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company has suffered recurring losses from operations and has insufficient capital resources to fund future operations. The management related that the company has incurred negative cash flows from operating activities of $11,500,000 and $10,600,000 in 2007, and 2006, respectively. The company has $2,800,000 of long- term debt that is due in 2008. At Dec. 31, 2007, the company has $4,000,000 of cash and cash equivalents and $6,300,000 of short- term investments. The company believes that current cash, cash equivalents, short-term investments and cash generated from operations will be sufficient to fund its working capital and capital resource needs into mid 2008. The company posted a net loss of $13,513,000 on net sales of $4,101,000 for the year ended Dec. 31, 2007, as compared with a net loss of $13,030,000 on net sales of $5,886,000 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $12,418,000 in total assets, $4,200,000 in total liabilities and $8,218,000 in total stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2aa3 About Restore Medical Restore Medical, Inc., (NasdaqGM: REST) -- http://www.restoremedical.com-- engages in the development, manufacture, and marketing of Pillar palatal implant systems. The company's Pillar palatal implant system is used for the treatment of soft palate components of sleeps disordered breathing, including obstructive sleep apnea and snoring. The company markets and sells its products to otolaryngologists, including ear, nose, and throat physicians; and oral maxillofacial surgeons in North America, South America, Asia Pacific, Europe, the Middle East, and South Africa. The company was founded in 1999 and is headquartered in St. Paul, Minn. REYNEN & BARDIS: Co-Founder Files for Personal Bankruptcy --------------------------------------------------------- John D. Reynen, co-founder of Reynen & Bardis Communities Inc., filed personal bankruptcy protection Wednesday, April 23, 2008, The Sacramento Bee's Jim Wasserman reports. Mr. Reynen's bankruptcy was intended to stave off Bank of the West in San Francisco from foreclosing on his personal possession securing a $26 million-loan, the report says, citing spokeswoman Michele McCormick. Ms. McCormick said that partners, Mr. Reynen and Christo Bardis, "personally guaranteed" at least $740 million used by Reynen & Bardis that was obtained from several creditors but failed to repay the loan, The SacBee relates. The spokeswoman disclosed that Mr. Bardis does not have plans to file for bankruptcy, report says. The SacBee notes that Reynen & Bardis' financial woes started after they expanded in Central Valley and Nevada during the housing boom. According to analysts, assets that the company acquired during the housing boom have lost their value, report reveals. Reynen & Bardis Communities Inc. -- http://www.rbcommunities.com/ -- has over 35 years of experience in land planning and homebuilding process relating to community amenities and home design. It employs about 180 workers. The company controls about 23,500 home lots on 9,215 acres of real property in Sacramento. The partners of the company are John D. Reynen, an attorney and developer, and Christo Bardis, a real estate broker. RYLAND GROUP: Posts $29.3 Million Net Loss in 2007 First Quarter ---------------------------------------------------------------- The Ryland Group Inc. reported Wednesday results for its first quarter ended March 31, 2008. For the first quarter ended March 31, 2008, the company reported a consolidated net loss of $29.3 million, compared to a net loss of $24.4 million for the same period in 2007. Consolidated revenues were $416.2 million for the quarter ended March 31, 2008, a decrease of 41.5% from consolidated revenues of $711.1 million for the quarter ended March 31, 2007. The company recorded inventory and other valuation adjustments, joint venture impairments, and option deposit and feasibility write-offs totaling $27.4 million during the first quarter ended March 31, 2008. The homebuilding segments reported a pretax loss of $43.6 million during the first quarter of 2008, compared to a pretax loss of $32.2 million for the same period in 2007. This decrease was primarily due to a decline in closings and margins; higher relative selling, general and administrative costs; and the impact of inventory valuation adjustments and write-offs. Homebuilding revenues decreased 42.2% to $399.6 million for the first quarter of 2008, compared to $691.4 million for the same period in 2007. This decline was primarily attributable to a 33.0% decrease in closings to 1,543 units for the first quarter ended March 31, 2008, from 2,302 units for the same period in the prior year, and a 13.8% decrease in the average closing price of a home, which dropped to $257,000 for the quarter ended March 31, 2008, from $298,000 for the quarter ended March 31, 2007. Homebuilding revenues for the first quarter of 2008 included $2.8 million from land sales, compared to $4.0 million from land sales for the first quarter of 2007, which contributed net gains of $998,000 and $500,000 to pretax earnings in 2008 and 2007, respectively. New orders of 2,159 units for the quarter ended March 31, 2008, represented a decrease of 27.8%, compared to new orders of 2,989 units for the same period in 2007. For the first quarter of 2008, new order dollars declined 39.7% to $526.4 million from $872.6 million for the first quarter of 2007. Backlog at the end of the first quarter of 2008 increased 21.5% to 3,485 units from 2,869 units at Dec. 31, 2007, and decreased 28.8% from 4,893 units at the end of the first quarter of 2007. At March 31, 2008, the dollar value of the company's backlog was $916.3 million, reflecting an increase of 16.5% from Dec. 31, 2007, and a decrease of 38.1% from March 31, 2007. Gross profit margins averaged 11.9% prior to inventory valuation adjustments and write-offs for the quarter ended March 31, 2008, compared to 18.7% for the same period in 2007. Gross profit margins averaged 5.0% subsequent to these adjustments for the first quarter of 2008, compared to 9.2% for the same period in 2007. This decrease was primarily due to inventory valuation adjustments and write-offs, as well as to increased sales incentives that related to home deliveries for the first quarter of 2008. Selling, general and administrative expenses, as a percentage of homebuilding revenue, were 16.0% for the first quarter of 2008, compared to 13.9% for the same period in 2007. This increase was primarily attributable to a decline in revenues, as well as to a rise in marketing and advertising costs per unit, partially offset by a $15.4 million goodwill impairment charge in the first quarter of 2007. For the first quarter ended March 31, 2008, selling, general and administrative expense dollars decreased $32.0 million, versus the same period in the prior year. The homebuilding segments expensed $533,000 of interest incurred during the first quarter of 2008, compared to the capitalization of all interest during the first quarter of 2007. Corporate expenses were $9.1 million for the first quarter of 2008, compared to $6.5 million for the same period in the prior year. This increase was primarily due to a $2.2 million decline in market values of investments within the company's benefit plans. The company's financial services segment, which includes mortgage, title, escrow and insurance services, reported pretax earnings of $6.6 million for the first quarter of 2008, compared to pretax earnings of $8.0 million for the same period in 2007. This decrease was primarily attributable to a 30.9% decline in the number of mortgages originated, due to a slowdown in the homebuilding market, and to a 13.0% decrease in average loan size, partially offset by a $2.4 million gain related to the implementation of Staff Accounting Bulletin No. 109, which requires servicing rights to be recorded at fair value. The capture rate of mortgages originated for the company's homebuilding customers was 82.2% for the first quarter of 2008, compared to 79.1% for the same period in 2007. Amended Revolving Credit Facility In February 2008, the company amended its revolving credit facility to reduce the base amount of its minimum consolidated tangible net worth covenant to $850.0 million; to increase the borrowing base by adding unrestricted cash up to $300.0 million; and to increase the definition of material indebtedness to $20.0 million. There were no borrowings against this facility at March 31, 2008. RMC Credit Agreement In January 2008, Ryland Mortgage Company entered into a mortgage warehouse line of credit with Guaranty Bank. The RMC Credit Agreement, which provides for borrowings of up to $40.0 million in funding for RMC's mortgage loan origination operations, matures in January 2009. At March 31, 2008, borrowings against the RMC Credit Agreement totaled $2.2 million. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $2.449 billion in total assets, $1.290 billion in total liabilities, $64 million in minority interest, and $1.095 billion in total stockholders' equity. About Ryland Group Based in Calabasas, California and founded in 1967, The Ryland Group Inc. (NYSE: RYL) -- http://www.ryland.com/-- is one of the nation's largest homebuilders and a leading mortgage-finance company. The company currently operates in 28 markets across the country and has built more than 275,000 homes and financed more than 230,000 mortgages since its founding in 1967. * * * As reported in the Troubled Company Reporter on Dec. 21, 2007, Moody's Investors Service lowered the ratings of The Ryland Group Inc., including its corporate family rating and the ratings on the various issues of senior unsecured notes to Ba1 from Baa3. The ratings were taken off review for downgrade where they had been placed on Oct. 31, 2007, and the outlook is negative. The company has reported 5 consecutive quarters of net losses since the first quarter of 2007. SAIL TRUSTS: Moody's Cuts Ratings on 121 Tranches From 15 Deals --------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 121 tranches from 15 subprime RMBS transactions issued by SAIL. Twenty downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Structured Asset Investment Loan Trust 2005-10 -- Cl. M2, Downgraded to A3 from Aa2 -- Cl. M3, Downgraded to Ba1 from Aa3 -- Cl. M4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa1 from A2 -- Cl. M6, Downgraded to Caa2 from A3 -- Cl. M7, Downgraded to Caa3 from Baa3 -- Cl. M8, Downgraded to Caa3 from Ba1 -- Cl. M9, Downgraded to Ca from Ba3 -- Cl. B1, Downgraded to C from Caa1 Issuer: Structured Asset Investment Loan Trust 2005-11 -- Cl. M1, Downgraded to Baa3 from Aa2 -- Cl. M2, Downgraded to B2 from Aa3 -- Cl. M3, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to Caa2 from A2 -- Cl. M5, Downgraded to Caa3 from A3 -- Cl. M6, Downgraded to Ca from Ba1 -- Cl. M7, Downgraded to C from B1 -- Cl. M8, Downgraded to C from B3 -- Cl. B1, Downgraded to C from Caa3 Issuer: Structured Asset Investment Loan Trust 2005-7 -- Cl. M3, Downgraded to A2 from Aa3 -- Cl. M4, Downgraded to Baa3 from A1 -- Cl. M5, Downgraded to B2 from A2 -- Cl. M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from Baa1 -- Cl. M8, Downgraded to Caa2 from Baa2 -- Cl. M9, Downgraded to Caa3 from Ba2 -- Cl. B1, Downgraded to C from B3 Issuer: Structured Asset Investment Loan Trust 2005-8 -- Cl. M1, Downgraded to Aa2 from Aa1 -- Cl. M2, Downgraded to Baa2 from Aa2 -- Cl. M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa2 from Baa1 -- Cl. M6, Downgraded to Caa3 from Baa3 -- Cl. M7, Downgraded to Ca from Ba3 -- Cl. M8, Downgraded to C from B3 -- Cl. M9, Downgraded to C from Caa1 -- Cl. B, Downgraded to C from Caa3 Issuer: Structured Asset Investment Loan Trust 2005-9 -- Cl. M1, Downgraded to Aa3 from Aa1 -- Cl. M2, Downgraded to Baa2 from Aa2 -- Cl. M3, Downgraded to B2 from Aa3 -- Cl. M4, Downgraded to B3 from A1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa1 from A2 -- Cl. M6, Downgraded to Caa2 from A3 -- Cl. M7, Downgraded to Caa3 from Baa3 -- Cl. M8, Downgraded to Ca from Ba2 -- Cl. M9, Downgraded to C from B3 Issuer: Structured Asset Investment Loan Trust 2005-HE1 -- Cl. M3, Downgraded to A1 from Aa3 -- Cl. M4, Downgraded to Baa3 from A1 -- Cl. M5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa2 from Baa1 -- Cl. M8, Downgraded to Caa3 from Baa2 -- Cl. M9, Downgraded to Ca from Baa3 -- Cl. B1, Downgraded to C from B1 Issuer: Structured Asset Investment Loan Trust 2005-HE2 -- Cl. M3, Downgraded to A1 from Aa3 -- Cl. M4, Downgraded to Baa2 from A1 -- Cl. M5, Downgraded to Ba3 from A2 -- Cl. M6, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from Baa1 -- Cl. M8, Downgraded to Caa2 from Baa2 -- Cl. M9, Downgraded to Caa3 from Baa3 Issuer: Structured Asset Investment Loan Trust 2005-HE3 -- Cl. M3, Downgraded to Baa1 from Aa3 -- Cl. M4, Downgraded to Ba1 from A1 -- Cl. M5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from Baa1 -- Cl. M8, Downgraded to Caa2 from Baa2 -- Cl. M9, Downgraded to Caa3 from Ba2 -- Cl. M10, Downgraded to Ca from B1 -- Cl. M11, Downgraded to C from Caa1 Issuer: Structured Asset Investment Loan Trust 2006-1 -- Cl. M2, Downgraded to Baa1 from Aa2 -- Cl. M3, Downgraded to B1 from Aa3 -- Cl. M4, Downgraded to B3 from A2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa2 from Baa1 -- Cl. M6, Downgraded to Caa3 from Baa3 -- Cl. M7, Downgraded to Ca from B2 -- Cl. M8, Downgraded to C from Ca Issuer: Structured Asset Investment Loan Trust 2006-2 -- Cl. M1, Downgraded to Ba3 from Aa2 -- Cl. M2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to Caa2 from A2 -- Cl. M4, Downgraded to Caa3 from Baa2 -- Cl. M5, Downgraded to Ca from Ba1 -- Cl. M6, Downgraded to C from B3 Issuer: Structured Asset Investment Loan Trust 2006-3 -- Cl. M1, Downgraded to Baa1 from Aa1 -- Cl. M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to Caa1 from A3 -- Cl. M5, Downgraded to Caa2 from Baa3 -- Cl. M6, Downgraded to Caa3 from Ba2 -- Cl. M7, Downgraded to Ca from B3 -- Cl. M8, Downgraded to C from Ca Issuer: Structured Asset Investment Loan Trust 2006-4 -- Cl. A5, Downgraded to Aa2 from Aaa -- Cl. M1, Downgraded to B1 from Aa2 -- Cl. M2, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to Caa1 from Baa1 -- Cl. M4, Downgraded to Caa2 from Ba1 -- Cl. M5, Downgraded to Caa3 from Ba3 -- Cl. M6, Downgraded to Ca from B3 Issuer: Structured Asset Investment Loan Trust 2006-BNC1 -- Cl. M1, Downgraded to Ba3 from Aa2 -- Cl. M2, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to Caa1 from A3 -- Cl. M4, Downgraded to Caa3 from Baa3 -- Cl. M5, Downgraded to Ca from Ba3 -- Cl. M6, Downgraded to C from Ca Issuer: Structured Asset Investment Loan Trust 2006-BNC2 -- Cl. A1, Downgraded to Aa3 from Aaa -- Cl. A2, Downgraded to Aa3 from Aaa -- Cl. A6, Downgraded to A3 from Aaa -- Cl. M1, Downgraded to B3 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M2, Downgraded to Caa2 from Aa3 -- Cl. M3, Downgraded to Caa3 from Baa2 -- Cl. M4, Downgraded to Ca from Ba3 -- Cl. M5, Downgraded to C from B3 Issuer: Structured Asset Investment Loan Trust 2006-BNC3 -- Cl. A1, Downgraded to Aa2 from Aaa -- Cl. A4, Downgraded to Aa3 from Aaa -- Cl. M1, Downgraded to B1 from Aa2 -- Cl. M2, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to Caa2 from B1 -- Cl. M5, Downgraded to Caa3 from B3 -- Cl. M6, Downgraded to Caa3 from B3 -- Cl. M7, Downgraded to Ca from B3 -- Cl. M8, Downgraded to C from Ca SASCO TRUSTS: 226 Tranches Get Moody's Rating Cuts on Delinquency ----------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 226 tranches from 25 subprime RMBS transactions issued by SASCO. Seventy Four downgraded tranches remain on review for possible further downgrade. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, subprime residential mortgage loans. The ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going surveillance process. Complete rating actions are: Issuer: Structured Asset Securities Corp 2006-W1 -- Cl. M2, Downgraded to Baa1 from Aa2 -- Cl. M3, Downgraded to Ba2 from Aa3 -- Cl. M4, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from Ba1 -- Cl. M8, Downgraded to Caa2 from Ba3 -- Cl. M9, Downgraded to Caa3 from B2 -- Cl. B1, Downgraded to Ca from B3 -- Cl. B2, Downgraded to C from B3 Issuer: Structured Asset Securities Corp 2006-Z -- Cl. A2, Downgraded to Aa3 from Aaa -- Cl. M1, Downgraded to B2 from Aa2 -- Cl. M2, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to Caa1 from Ba1 -- Cl. M4, Downgraded to Caa2 from B3 -- Cl. M5, Downgraded to Caa3 from Caa1 -- Cl. M6, Downgraded to Caa3 from Caa1 -- Cl. B1, Downgraded to Ca from Caa3 Issuer: Structured Asset Securities Corp Trust 2005-WF4 -- Cl. B2, Downgraded to Caa2 from Ba2 Issuer: Structured Asset Securities Corp Trust 2006-AM1 -- Cl. M1, Downgraded to Aa3 from Aa1 -- Cl. M2, Downgraded to Ba1 from Aa2 -- Cl. M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to Caa1 from Baa3 -- Cl. M7, Downgraded to Caa3 from Ba3 -- Cl. M8, Downgraded to Caa3 from B3 -- Cl. M9, Downgraded to Ca from Caa3 -- Cl. B1, Downgraded to C from Ca Issuer: Structured Asset Securities Corp Trust 2006-BC1 -- Cl. M2, Downgraded to Baa3 from Aa2 -- Cl. M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa1 from Baa3 -- Cl. M6, Downgraded to Caa2 from Ba2 -- Cl. M7, Downgraded to Caa3 from B3 -- Cl. M8, Downgraded to Ca from Caa3 -- Cl. M9, Downgraded to C from Ca Issuer: Structured Asset Securities Corp Trust 2006-BC2 -- Cl. A4, Downgraded to Aa1 from Aaa -- Cl. M1, Downgraded to Ba2 from Aa1 -- Cl. M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to Caa1 from Baa2 -- Cl. M5, Downgraded to Caa2 from Ba2 -- Cl. M6, Downgraded to Caa3 from B2 -- Cl. M7, Downgraded to Caa3 from B3 -- Cl. M8, Downgraded to Ca from Caa2 -- Cl. M9, Downgraded to Ca from Caa3 Issuer: Structured Asset Securities Corp Trust 2006-BC6 -- Cl. M1, Downgraded to Aa3 from Aa1 -- Cl. M2, Downgraded to Ba2 from Aa2 -- Cl. M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from Ba3 -- Cl. M8, Downgraded to Caa2 from B3 -- Cl. M9, Downgraded to Caa3 from B3 -- Cl. B, Downgraded to Ca from Caa2 Issuer: Structured Asset Securities Corp Trust 2006-EQ1 -- Cl. M2, Downgraded to Baa2 from Aa2 -- Cl. M3, Downgraded to B1 from Aa3 -- Cl. M4, Downgraded to B1 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from B3 -- Cl. M8, Downgraded to Caa2 from B3 -- Cl. M9, Downgraded to Caa3 from B3 Issuer: Structured Asset Securities Corp Trust 2006-NC1 -- Cl. A4, Downgraded to Aa2 from Aaa -- Cl. A5, Downgraded to A2 from Aaa -- Cl. M1, Downgraded to B1 from Aa1 -- Cl. M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to Caa1 from Baa2 -- Cl. M5, Downgraded to Caa2 from Ba2 -- Cl. M6, Downgraded to Caa3 from B3 -- Cl. M7, Downgraded to Caa3 from Caa2 Issuer: Structured Asset Securities Corp Trust 2006-OPT1 -- Cl. M2, Downgraded to A3 from Aa3 -- Cl. M3, Downgraded to Ba1 from A1 -- Cl. M4, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to Caa1 from Ba3 -- Cl. M7, Downgraded to Caa3 from B3 -- Cl. M8, Downgraded to Ca from Caa3 Issuer: Structured Asset Securities Corp Trust 2006-WF1 -- Cl. M6, Downgraded to Baa2 from A3 -- Cl. M7, Downgraded to B2 from Baa2 -- Cl. M8, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Caa2 from B1 Issuer: Structured Asset Securities Corp Trust 2006-WF2 -- Cl. M7, Downgraded to Baa3 from Baa1 -- Cl. M8, Downgraded to B1 from Baa2 -- Cl. M9, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B, Downgraded to Caa2 from Ba3 Issuer: Structured Asset Securities Corp Trust 2006-WF3 -- Cl. M2, Downgraded to A1 from Aa2 -- Cl. M3, Downgraded to Baa1 from Aa3 -- Cl. M4, Downgraded to Baa3 from A1 -- Cl. M5, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M9, Downgraded to Caa1 from Baa3 -- Cl. M10, Downgraded to Caa2 from Ba2 -- Cl. B, Downgraded to Caa3 from B2 Issuer: Structured Asset Securities Corp Trust 2007-BC1 -- Cl. M2, Downgraded to Baa3 from Aa2 -- Cl. M3, Downgraded to B1 from Aa3 -- Cl. M4, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B2 from Ba2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from B2 -- Cl. M9, Downgraded to Ca from Caa2 -- Cl. B1, Downgraded to C from Ca Issuer: Structured Asset Securities Corp Trust 2007-BC2 -- Cl. A5, Downgraded to Aa2 from Aaa -- Cl. M1, Downgraded to Baa3 from Aa1 -- Cl. M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to Caa1 from Baa3 -- Cl. M7, Downgraded to Caa2 from Ba2 -- Cl. M8, Downgraded to Caa3 from B3 -- Cl. M9, Downgraded to Ca from Caa2 Issuer: Structured Asset Securities Corp Trust 2007-BC3 -- Cl. 1-M1, Downgraded to A3 from Aa1 -- Cl. 2-M1, Downgraded to A3 from Aa1 -- Cl. 1-M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 2-M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. 1-M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 2-M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. 1-M4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. 2-M4, Downgraded to B2 from A1; Placed Under Review for further Possible Downgrade -- Cl. 1-M5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. 2-M5, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from Ba1 -- Cl. M8, Downgraded to Caa2 from Ba2 -- Cl. M9, Downgraded to Caa3 from B2 -- Cl. B1, Downgraded to Ca from Caa2 Issuer: Structured Asset Securities Corp Trust 2007-MLN1 -- Cl. A1, Downgraded to A2 from Aaa -- Cl. A3, Downgraded to Aa2 from Aaa -- Cl. A4, Downgraded to Baa2 from Aaa -- Cl. A5, Downgraded to Ba2 from Aaa -- Cl. M1, Downgraded to B1 from Aa1; Placed Under Review for further Possible Downgrade -- Cl. M2, Downgraded to B2 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to Caa2 from Baa3 -- Cl. M5, Downgraded to Caa3 from Ba3 -- Cl. M6, Downgraded to Caa3 from B3 -- Cl. M7, Downgraded to Ca from Caa2 Issuer: Structured Asset Securities Corp Trust 2007-OSI -- Cl. A-1, Downgraded to Aa2 from Aaa -- Cl. A-3, Downgraded to Aa1 from Aaa -- Cl. A-4, Downgraded to Aa3 from Aaa -- Cl. A-5, Downgraded to A2 from Aaa -- Cl. M-1, Downgraded to Ba3 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B3 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa2 -- Cl. M-7, Downgraded to Caa2 from Ba1 -- Cl. M-8, Downgraded to Caa3 from B1 -- Cl. M-9, Downgraded to Ca from B3 Issuer: Structured Asset Securities Corp Trust 2007-WF1 -- Cl. A5, Downgraded to Aa2 from Aaa -- Cl. M1, Downgraded to Baa2 from Aa1 -- Cl. M2, Downgraded to Ba3 from Aa2 -- Cl. M3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B1 from A1; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B2 from A2; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa1 from Baa2 -- Cl. M9, Downgraded to Caa2 from Ba2 -- Cl. B1, Downgraded to Caa3 from B1 -- Cl. B2, Downgraded to Caa3 from B3 -- Cl. B3, Downgraded to Ca from Caa3 Issuer: Structured Asset Securities Corp, Mortgage Pass-Through Certificates, Series 2006-BC3 -- Cl. A4, Downgraded to Aa3 from Aaa -- Cl. M1, Downgraded to Ba2 from Aa1 -- Cl. M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa1 from Ba3 -- Cl. M6, Downgraded to Caa2 from B3 -- Cl. M7, Downgraded to Caa3 from Caa2 -- Cl. M8, Downgraded to Ca from Caa2 -- Cl. M9, Downgraded to C from Ca Issuer: Structured Asset Securities Corp. Trust 2007-EQ1 -- Cl. A-1, Downgraded to Aa1 from Aaa -- Cl. A-4, Downgraded to Aa1 from Aaa -- Cl. A-5, Downgraded to Aa3 from Aaa -- Cl. M-1, Downgraded to Baa3 from Aa1 -- Cl. M-2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B1 from A2; Placed Under Review for further Possible Downgrade -- Cl. M-5, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M-6, Downgraded to Caa1 from Baa3 -- Cl. M-7, Downgraded to Caa2 from Ba2 -- Cl. M-8, Downgraded to Caa3 from Ba3 -- Cl. M-9, Downgraded to Ca from B3 -- Cl. B-1, Downgraded to Ca from Caa3 Issuer: Structured Asset Securities Corporation 2005-GEL4 -- Cl. M3, Downgraded to Ba2 from A3 -- Cl. M4, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa2 from Baa3 Issuer: Structured Asset Securities Corporation Mortgage Pass- Through Certificates, Series 2006-BC4 -- Cl. A1, Downgraded to Aa2 from Aaa -- Cl. A5, Downgraded to A2 from Aaa -- Cl. M1, Downgraded to Ba3 from Aa1 -- Cl. M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to Caa1 from Ba2 -- Cl. M6, Downgraded to Caa2 from B3 -- Cl. M7, Downgraded to Caa3 from Caa1 -- Cl. M8, Downgraded to Caa3 from Caa1 -- Cl. M9, Downgraded to Ca from Caa2 -- Cl. B, Downgraded to C from Ca Issuer: Structured Asset Securities Corporation Series 2005-AR1 -- Cl. M4, Downgraded to A3 from A1 -- Cl. M5, Downgraded to Baa1 from A2 -- Cl. M6, Downgraded to Ba1 from A3 -- Cl. M7, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. M8, Downgraded to Caa2 from Baa3 -- Cl. M9, Downgraded to Caa3 from Ba1 -- Cl. B1, Downgraded to Ca from B2 -- Cl. B2, Downgraded to C from Caa2 Issuer: Structured Asset Securities Corporation Trust 2006-BC5 -- Cl. M1, Downgraded to Baa3 from Aa1 -- Cl. M2, Downgraded to B1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. M3, Downgraded to B2 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M4, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M5, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. M6, Downgraded to B3 from Ba3; Placed Under Review for further Possible Downgrade -- Cl. M7, Downgraded to Caa1 from B3 -- Cl. M8, Downgraded to Caa2 from Caa1 -- Cl. M9, Downgraded to Caa3 from Caa1 -- Cl. B, Downgraded to Ca from Caa3 SBARRO INC: Moody's Keeps Low-B Ratings; Gives Negative Outlook --------------------------------------------------------------- Moody's Investors Service affirmed all the ratings of Sbarro, Inc. and changed the outlook to negative from stable. The change in outlook to negative from stable reflects Sbarro's weaker than expected operating performance and Moody's view that the cushion under its financial covenants will likely deteriorate as covenant levels step-down over the next few quarters. Ratings affirmed are: -- Corporate family rating of B3 -- Probability of default rating of B3 -- $25 million senior secured revolving credit expiring in 2013, rated Ba3 (LGD 2, 20%) -- $183 million senior secured term loan maturing in 2014, rated Ba3 (LGD 2, 20%) -- $150 million senior unsecured notes maturing in 2015, rated Caa1 (LGD 5, 76%) -- Speculative Grade Liquidity rating of SGL-3 The rating outlook is negative. The B3 corporate family rating reflects Sbarro's weak debt protection metrics, due in part to persistently high debt levels and weak operating performance, and a relatively aggressive growth plan in the context of a weak economic environment. The rating also reflects the high seasonality of cash flows driven largely by shopping mall traffic patterns, deterioration in consumer spending, intense competition in the pizza segment of the restaurant industry, and historically high commodity costs. Balancing out these weaknesses are Sbarro's well recognized brand name, meaningful international presence, increased focus on cost saving initiatives, and new product offerings. Sbarro, Inc. headquartered in Melville, New York, is a leading quick service restaurant concept that serves Italian specialty foods. As of Dec. 30, 2007, the company owned and operated 506 and franchised 524 restaurants worldwide under brand names such as "Sbarro,", "Mama Sbarro" and "Carmela's Pizzeria". Total revenues for fiscal 2007 were approximately $359 million. SEA CONTAINERS: Fails to File Plan by April 15 Deadline ------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates did not deliver their Chapter 11 plan of reorganization to Honorable Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware by the April 15, 2008 deadline. Judge Carey, on Feb. 25, 2008, granted the Debtors' fifth -- and last -- request to further extend their exclusive periods to file a plan through April 15, 2008, and to solicit acceptances of that plan through June 16. The Debtors have previously noted that obtaining approval of their settlement with the Official Committee of Unsecured Creditors for Sea Containers Services Ltd. and the Pension Trustees with respect to their pension scheme liabilities is a prerequisite to filing a Chapter 11 plan. "[R]esolving the Debtors' pension scheme liabilities [is] a task that must be completed before a viable Plan can be presented to the Court," counsel for the Debtors, Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, had said. A hearing on the approval of the Pension Settlement is scheduled on May 28 and 29, 2008. In addition, Mr. Morton had noted that the Debtors and the GE affiliates involved in GE SeaCo are working to resolve certain open issues relating to GE SeaCo, which resolution will factor in and foster a consensual Plan. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEQUIAM CORP: bioMETRX Starts Integration of Assets and Personnel ----------------------------------------------------------------- bioMETRX Inc. commenced the initial integration of the assets and former personnel of Sequiam Corporation through a previously announced agreement with Biometric Investors LLC. "We were notified last week by Biometric Investors, LLC that it has secured an order from the bankruptcy court to take immediate possession of Sequiam's assets," Mark Basile, chief executive officer at bioMETRX Inc., stated. "We have implemented a plan to incorporate many former Sequiam employees into our core business, and to take immediate possession of the equipment, inventory and technology base." "We expect a smooth transition of those assets into bioMETRX over the next few weeks," Mr. Basile continued. In addition, Biometric Investors LLC has funded $250,000 to bioMETRX as part of the asset acquisition and financing agreement between the companies. The total financing, once completed, will significantly increase the company's ability to expand its proprietary smartTOUCH(TM) and smartFIT technology across many vertical markets and continue to establish itself as the most dominant global leader in the development of low cost, low power OEM biometric integration products. About bioMETRX Inc. Headquartered in Jericho, New York, BioMETRX Inc. (OTC BB: BMRX.OB) -- http://www.biometrx.net/-- designs, develops and markets biometrics-based products to the consumer, medical devices and small business markets under the common brand name - smartTOUCH(TM). The company's product line includes biometrically enabled residential locks, central station alarm keypads, thermostats, garage or gate openers, medical crash carts and industrial medicine cabinets. Its products utilize finger recognition technology designed to augment or replace conventional security methods, such as keys, keypads, and personal identification numbers. About Sequiam Corporation Headquartered in Orlando, Florida, Sequiam Corporation (SQUM.OB) -- http://www.sequiam.com/-- through its subsidiaries, develops and market biometric fingerprint unlocking devices that enable users to gain access using their personal identity. The company also provides Internet access and hosting services. Founded in 1999, the company was formerly known as Wedge Net Experts Inc. and changed its name to Sequiam Corporation in 2002. The company filed for Chapter 11 protection on March 15, 2008 (M.D. Fla. Case No. 08-01984). R. Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, represents the Debtor. When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. SIX FLAGS: Fitch Keeps 'CCC' Rating on Senior Unsecured Notes ------------------------------------------------------------- Fitch has published a full report on Six Flags, Inc. where SIX announced on April 17, 2008 its 2008 1st quarter revenues were up by 35%, driven by the fact that Easter fell in the first quarter of 2008 versus the second quarter of 2007. Attendance was up 19% from the prior first quarter and per capita spending was up 13%. Fitch recognizes that the first quarter represents a small portion of annual revenue (historically the first quarter made up 5% of the year's attendance). The company is below breakeven on an interest coverage basis, and leverage is around 13.8 times (x), both of which are very concerning. However, the company's liquidity has been sufficient to cover operating costs in the off-season, invest in its parks and continue to attempt its turnaround in 2008. Limited details were available, but on April 17, management stated that liquidity as of March 31, 2008, consisted of $13 million in cash and $131 million in unused revolver capacity. Fitch notes the $300 million PIERs securities come due in April 2009 and represent material refinancing risk. Fitch currently rates Six Flags: Six Flags Theme Parks, Inc. -- Issuer Default Rating (IDR) 'B-'; -- Secured Bank credit facility 'BB-/RR1'. Six Flags, Inc. -- Issuer Default Rating (IDR) 'B-'; -- Senior unsecured notes 'CCC/RR6'; -- Preferred stock 'CCC-/RR6' The Rating Outlook is Negative. STONEHOUSE SPE: Right, Title & Membership Interest for Sale May 7 ----------------------------------------------------------------- Stonehouse SPE LLC is selling its right, title and 100% membership interest, subject to bigger and better offers, at an auction on May 7, 2008 at 2:00 p.m. Potential bidders are required to deposit $50,000 to participate in the bidding process. Deposits may only be made in cash, bank, certified treasurer's or cashier's check at time and place of sale. Any balance outstanding will be due within four business days. For more information, interested parties may contact: Keith R. Walsh, Esq. Brown Rudnick, Berlack Israels LLP One Financial Center Boston, MA 02111 Tel (617) 856-8147 Headquartered in Sierra Madre, California, Stonehouse SPE LLC is a Delaware limited liability company organized for the purpose of acquiring, financing, owning, operating and developing real property. SUMMER STREET: Two Classes of Notes Acquire Moody's Junk Ratings ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade these notes issued by Summer Street 2005-HG1, Ltd.: Class Description: $935,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2045 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $100,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2045 -- Prior Rating: Aaa -- Current Rating: Baa2, on review for possible downgrade Class Description: $21,500,000 Class B Floating Rate Subordinate Secured Notes Due 2045 -- Prior Rating: Aa2 -- Current Rating: Ba1, on review for possible downgrade Class Description: $15,000,000 Class C Floating Rate Subordinate Secured Deferrable Notes Due 2045 -- Prior Rating: A2 -- Current Rating: B3, on review for possible downgrade Class Description: $13,100,000 Class D Floating Rate Subordinate Secured Deferrable Notes Due 2045 -- Prior Rating: Baa2 -- Current Rating: Caa1, on review for possible downgrade In addition, Moody's also downgraded these notes: Class Description: $15,400,000 Class E Income Notes Due 2045 -- Prior Rating: Ba3 -- Current Rating: Ca According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of RMBS securities. TOPAZ POWER: Moody's Puts Ba3 Initial Rating on $740 Mil. Facility ------------------------------------------------------------------ Moody's Investors Service assigned a provisional rating of (P)Ba3 with a stable outlook to Topaz Power Holdings, LLC's $740 million first lien senior secured credit facility. The credit facility will consist of a $615 million 2-year construction loan facility convertible to a term loan at commercial operation and maturing December 31, 2014, as well as a $75 million 5-year revolving credit facility and a $50 million 2-year LC facility. The debt will be secured by a first lien interest in all the assets and equity of the borrower. Proceeds of the construction loan will be used together with approximately $591 million in equity to repower two existing steam turbines (Barney Davis 2; Nueces Bay) and convert them into combined-cycle operation and to construct a new gas-fired peaking facility (Laredo). The repowerings of Barney Davis 2 and Nueces Bay are expected to be complete by January 2010 and February 2010, respectively, while Laredo is projected to be online by mid-summer 2008. Located about 150 miles south of San Antonio at the Texas and Mexico border, Laredo will consist of a 204MW two-unit simple- cycle gas turbine. Barney Davis 2 and Nueces Bay, each of which will provide approximately 680 MW of intermediate capacity, will both be located in Corpus Christi, Texas. The sponsor is also contributing an existing 335-MW gas-fired steam turbine located in Corpus Christi to the portfolio. According to Moody's analyst Aaron Freedman, "the Ba3 rating reflects the diversity of the portfolio's intermediate and peaking assets and the fact that an average of roughly 70% of the capacity will be hedged through physical tolls over the term of the loan. Along with the project's significant equity contribution and correspondingly low leverage, this supports projected financial metrics consistent with the rating category and should ensure that that project generates sufficient cash flows to service its debt in a timely manner." In the base case provided by the company to Moodys, approximately 34% of total margin used to paydown debt prior to final maturity of the term loan is merchant-based cash flow, but tightening reserve margins in ERCOT South make this reasonably likely in Moody's view. In addition, the rating considers construction and operating risks associated with the repowering process that involves the extensive refurbishment by GE of existing GE steam turbines and their integration with new gas turbines and heat recovery steam generators. Topaz also faces technology risk related to the use of GE's new commercially unproven LMS 100 gas turbine design at Laredo. These considerations are somewhat offset by the use of Zachry Construction Company, a reputable, experienced contractor, for all three projects; fixed price, date certain contracts including performance guarantees, liquidated damages, and sizeable performance bonds covering Nueces Bay and Barney Davis 2; and the relatively straightforward nature of the Laredo project together with the expectation of support from GE for its new technology. This provisional rating, which is based upon Moody's current understanding of the proposed terms and conditions of the transaction, including a 100% cash sweep, a six month debt service reserve, and other standard project finance structural protections, is subject to Moody's receipt and review of final documentation. Topaz Power Holdings will be an indirect, majority-owned subsidiary of Carlyle and Riverstone Global Energy and Power Fund III, L.P. Founded in 2000, Riverstone is a private equity firm focused on energy and power with $9.1 billion under management. TOUSA INC: DIP Termination Date Extended Until May 8 ---------------------------------------------------- TOUSA Inc. and its debtor-affiliates inform the U.S. Bankruptcy Court for the Southern District of Florida that the Interim Termination Date for the DIP Credit and Security Agreement, dated January 29, 2008, as amended, has been extended from April 30, to May 8, 2008. As provided in the DIP Credit Agreement, the Interim Termination Date may be further extended by written consent of Citicorp North America, Inc., provided that no extension may be granted beyond May 30, 2008, without further amendment of the DIP Credit Agreement. As reported by the Troubled Company Reporter on Jan. 31, 2008, the Debtors sought permission from the Court to obtain up to $650 million of debtor-in-possession financing from financial institutions led by Citigroup Global Markets Inc. as sole lead arranger and bookrunner. Specifically, the DIP Credit Agreement provides for a first priority and priming secured revolving credit commitment of up to $130 million, which will be made available after entry of an interim DIP Order. As reported in the TCR on Feb. 1, the Court permitted the Debtors to borrow, on an interim basis, up to $134,574,000 from Citigroup Global Markets Inc. and a syndicate of lenders to pay for their normal operating expenses. As reported by the TCR on March 26, 2008,the Debtors notified the Court on March 16, 2008, that they amended their Senior Secured Super-Priority Debtor-in-Possession Credit and Security Agreement, with Citicorp North America, as administrative agent; Citibank, N.A., as issuer; and Citicorp North America, Inc., as lender. The recent DIP Amendments include new definition of certain terms; additional provisions to certain sections of the credit agreement; and restatements of certain sections. A full-text copy of the First DIP Facility Amendment is available for free at http://bankrupt.com/misc/TOUSA_DIPamendment.pdf About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. The Debtors' exclusive period to file a plan expires on May 28, 2008. (TOUSA Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). UNITEDHEALTH GROUP: Earns $994 Million in Quarter ended March 31 ---------------------------------------------------------------- UnitedHealth Group reported its first quarter 2008 performance, including year-over-year gains in people served and revenues. Net earnings for three months ended March 31, 2008, was $994 million compared with net earnings of $927 million for the same period in the previous year. UnitedHealth Group first quarter highlights include: -- UnitedHealth Group served 73 million people through its diverse set of businesses as of March 31, 2008, an increase of 2 million people year-over-year. -- Consolidated first quarter revenues of $20.3 billion increased $1.3 billion or 7% year-over-year. -- Consolidated first quarter earnings from operations were $1.7 billion, representing a decrease of 3% from the prior year. -- The company realized net favorable development of $200 million in its estimates of medical costs incurred in 2007, compared with $180 million in favorable development of estimates of medical costs incurred in 2006 that was realized in the first quarter of 2007. -- Cash flows from operations were $280 million versus $1.07 billion in the first quarter of 2007, as adjusted for CMS payment timing. The company projects full year 2008 cash flows from operations to approach $6 billion or 1.3 times its revised net income outlook. Factors driving the year-over-year decrease in first quarter cash flows included the effects of decreases in consumers served through commercial and Part D risk-based arrangements and timing-related items such as federal program receipts and payments to the company's external pharmacy benefit fulfillment partner, that are expected to reverse over the course of the year. -- During the first quarter, the company began repositioning a portion of its investment portfolio to improve its future returns and to take advantage of strong market demand for high quality debt securities that it currently owns. First quarter consolidated revenues included $53 million in realized net capital gains. These gains were partially offset by lower investment yields on cash and cash equivalents. -- The company repurchased 31 million shares during the first quarter of 2008, representing 2-1/2% of its shares outstanding at Dec. 31, 2007. Outlook Management anticipates full year cash flows from operations approaching $6 billion, and expects the company will repurchase $4 billion of stock during 2008. The company reduced its full year 2008 outlook by 10% or $0.40 per share to a range of $3.55 to $3.60 per share. This reduction includes an anticipated $0.10 per share impact from unusually high influenza costs and reduced investment income, net of capital gains, and adjustments reducing anticipated rates of revenue growth and margin assumptions for risk-based Commercial Markets products where membership levels have declined in response to strengthened premium yield increases in 2008 and certain senior products, where the timing of membership gains and the product mix have changed. Management estimates the full year UnitedHealth Group medical care ratio to be in a range centered around 81.3%, plus or minus 50 basis points, compared to 80.6% in 2007. While the company is attentive to the risk of future medical cost increases, management believes the commercial medical cost trend is consistent with its previously projected range. "These financial results are not acceptable for a company with our capabilities and potential," Stephen J. Hemsley, president and chief executive officer of UnitedHealth Group, said. "They are due in part to broader economic challenges and in part to our own performance. We are adjusting our approaches, in particular to strengthen organic growth and address operating costs, to deliver financial performance that more appropriately represents the capacity and potential of our organization." "We remain focused on our long-term strategy of building an integrated health services system supporting a spectrum of innovative market-facing businesses, and we believe that the creation and operation of that enterprise will build exceptional value for its customers, business partners and shareholders," said Mr. Hemsley. "Our first quarter results and new outlook include some of the successes we are seeing as we pursue that goal." At March 31, 2008, the company's balance sheet showed total assets of $53.543 billion, total liabilities of $33.799 billion and total shareholders' equity of $19.744 billion. About UnitedHealth Group Based in Minneapolis, Minnesota, UnitedHealth Group Inc. (NYSE: UNH) -- http://www.unitedhealthgroup.com/-- is a diversified health and well-being company which offers offers a broad spectrum of products and services through six operating businesses: UnitedHealthcare, Ovations, AmeriChoice, Uniprise, Specialized Care Services and Ingenix. Through its family of businesses, UnitedHealth Group serves approximately 70 million individuals nationwide. * * * UnitedHealth Group's 2-1/4% senior convertible debentures due 2023 holds Standard & Poor's BB+ rating. UNIVERSAL HOSPITAL: Posts $64MM Net Loss in Year ended Dec. 31 -------------------------------------------------------------- Universal Hospital Services Inc. reported financial results for the quarter and twelve months ended Dec. 31, 2007. Net loss for the quarter was $6.6 million, compared to net loss of $1.1 million for the same quarter last year. For the year, the company reported net loss of $63.6 million versus a net income of $0.1 million for the same period of 2006. The 2007 net loss reflects charges of $50.6 million related to the acquisition of UHS by affiliates of Bear Stearns Merchant Manager III (Cayman), L.P. and management on May 31, 2007, and includes transaction and related expenses and debt extinguishment costs. At Dec. 31, 2007, the company's balance sheet showed total assets of $878.752 million, total liabilities of $655.056 and total shareholders' equity of $223.696 Based in Edina, Minnesota, Universal Hospital Services Inc. -- http://www.uhs.com/-- is a medical equipment lifecycle services company. UHS offers comprehensive solutions that maximize utilization, increase productivity and support optimal patient care resulting in capital and operational efficiencies. UHS currently operates through more than 75 offices, serving customers in all 50 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on April 7, 2008, Standard & Poor's Ratings Services revised its outlook on Universal Hospital Services Inc. to stable from negative. The 'B+' corporate credit rating is affirmed. The outlook revision reflects the company's strong growth and operating performance since its June 2007 leveraged buyout, which makes a ratings downgrade unlikely in the foreseeable future. VALLEY HEALTH: Fitch Downgrades Ratings on $79.5 Mil. Bonds ----------------------------------------------------------- Fitch Ratings downgraded approximately $79.5 million of bonds issued by Valley Health System, California to 'CC' from 'CCC'. Simultaneously, Fitch has also withdrawn the 'CC' rating on Valley Health System's outstanding bonds. Fitch's 'CC' rating indicates that payment default to bondholders appears probable. Although payments to bondholders are current, the rating downgrade reflects VHS' board filing for Chapter 9 bankruptcy on Dec. 13, 2007, as well as the ongoing deterioration of VHS' financial position. According to the bond trustee, VHS has suspended its monthly debt service payments. The rating withdrawal is due to lack of ongoing disclosure. Fitch will no longer provide ratings coverage for this issuer. Outstanding debt: -- $34.4 million Valley Health System hospital revenue bonds (refunding and improvements project), 1996 series A. -- $45.1 million Valley Health System certificates of participation (refunding project), series 1993. VICTOR PLASTICS: Completes Sale to River Bend for $17.4 Million --------------------------------------------------------------- River Bend Industries of Fort Smith, Arkansas, has acquired Victor Plastics, Inc. following a bankruptcy court auction. The deal closed April 22, 2008, according to Ron Embree, president and chief executive officer of River Bend Industries. The acquisition will save approximately 300 jobs in the eastern Iowa area. As reported in the Troubled Company Reporter on March 24, 2008, Victor Plastics disclosed that River Bend is buying the company for $17.4 million. Victor Plastics had signed a Letter of Intent in February. River Bend Industries and its predecessor companies have been a leader in plastic injection molding for more than 40 years. It is a supplier to Whirlpool, Exide Industries and the Husqvarna Group of Sweden. "Two years ago our company faced many of the challenges that Victor Plastics sees today," Mr. Embree said. "With our employees and customers we have made a tremendous turnaround. In 2006, River Bend acquired soon-to-be-closed custom molding facilities based in Fort Smith and has been very successful reorganizing and operating that business. "This acquisition significantly complements our existing successful operations in Fort Smith, Arkansas," River Bend Chairman Chuck Butler said. "Our current customers and employees were the key to making this deal very attractive to us." Both Messrs. Butler and Embree noted that the integration of Victor Plastics into the River Bend Industries portfolio enhances the company's position as one of the largest custom molders in the United States. "Ron Embree is demonstrating his ability to maintain the plastics business for our present work force including adequate salary levels," Leonard Seda, DVM, president of the Victor Community Development Association, said. "We are extremely excited about having a buyer of this caliber," Dr. Seda said "There are about� 200 employees at the Victor plant and 200 employees at the North Liberty plant, so it's a big deal in our rural community to keep the jobs in this industry." Palomino Capital LLC of Dallas represented River Bend while Chicago-based MorrisAnderson was retained by Victor Plastics as its investment banker. About River Bend Industries Fort Smith, Arkansas-based River Bend Industries -- http://www.riverbendind.com/-- has a complete liquid handling center and offers farm spray equipment, professional lawncare equipment, fiberglass and poly tanks, fire truck tanks, pumps, hose and fittings, spray accessories, portable outdoor toilets, and deicing spray equipment. River Bend Industries and its predecessor companies have been in the plastic injection molding for more than 40 years. It is a supplier to Whirlpool, Exide Industries and the Husqvarna Group of Sweden. About Victor Plastics Based in North Liberty, Iowa, Victor Plastics Inc. -- http://www.victorplastics.com/-- is a custom molder of thermoplastics and engineering resins. The Debtor and its affiliate, VPI Acquisition Company, filed for Chapter 11 protection on Jan. 15, 2008 (Bankr. D. Minn. Case Nos. 08-40171 and 08-40167). Michael L. Meyer, Esq., at Ravich Meyer Kirkman McGrath & Nauman P.A., represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Kalina, Wills, Gisvold & Clark PLLP. When the Debtors filed for protection from their creditors, Victor Plastics listed total assets of $44,658,000, and total liabilities of $41,366,000, while VPI Acquisition listed estimated assets of less than $50,000 and estimated debts of $10 million to $100 million. XM SATELLITE: Dec. 31 Balance Sheet Upside-Down by $984 Million --------------------------------------------------------------- XM Satellite Radio Holdings Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $1.609 billion in total assets, $2.534 billion in total liabilities, and $59 million in minority interest, resulting in a $984 million total stockholders' deficit. At Dec. 31, 2007, the company's consolidated balance sheet also showed strained liquidity with $386 million in total current assets available to pay $789 million in totla current liabilities. The company reported a net loss of $239 million for the fourth quarter of 2007 compared to a net loss of $257 million for the fourth quarter of 2006. Full year net loss was $682 million, compared with a net loss of $719 million in 2006. Total revenue increased year over year by 22% percent to $1.137 billion. XM added 1.4 million net new subscribers ending 2007 with more than 9 million subscribers, an 18% increase over the prior year. In 2007, XM's automotive partners increased production of XM-equipped vehicles by 64% over 2006, with 3.5 million installs. "XM substantially improved its business operations in 2007 as we grew our subscriber base and revenues and narrowed our loss, positioning us as a stronger and more focused company better positioned to meet the competitive challenges of the future," said Nate Davis, president and chief executive officer, XM Satellite Radio. "XM has doubled its revenues in the last two years and our investment and robust performance in the new car market establishes a clear path for sustained future growth." For the fourth quarter of 2007, XM reported total revenue of $308 million, an increase of 20% over the $257 million total revenue reported in fourth quarter of 2006. Full year 2007 adjusted operating loss was $238 million, which included merger and settlement charges of $86 million, versus an adjusted operating loss of $166 million in 2006. Fourth quarter adjusted operating loss was $117 million, which included $58 million of the aforementioned $86 million of merger and settlement charges, versus an adjusted operating loss of $70 million in the fourth quarter of 2006. Adjusted operating loss is net loss before interest income, interest expense, income taxes, depreciation and amortization, loss from de-leveraging transactions, loss from impairment of investments, equity in net loss of affiliate, minority interest, other income (expense) and share-based payment expense. Adjusted operating loss is a non-GAAP measure used by the company to measure operating performance between periods. Proposed Merger On Feb. 19, 2007, XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. entered into an Agreement and Plan of Merger, pursuant to which XM and Sirius will combine its businesses through a merger of XM and a newly formed, wholly owned subsidiary of Sirius. SIRIUS and XM each obtained stockholder approval for the deal in November 2007. The pending merger is still subject to approval of the Federal Communications Commission. Liquidity and Capital Resources Since inception through Dec. 31, 2007, the company has raised proceeds of $4.5 billion, net of offering costs, through equity and debt offerings. The company's principal sources of liquidity are its existing cash and cash equivalents and cash receipts for pre-paid subscriptions. The company also has access to significant liquidity through its bank revolving credit facility (of which $187.5 million has been drawn through Feb. 28, 2008) and its GM credit facility. During 2007, net cash provided by financing activities was $224.7 million; consisting of $288.5 million of proceeds from financing of a consolidated variable interest entity offset partially by the repayment of $38.9 million related to the mortgages on the company's corporate facilities, $13.7 million in capital lease payments and $9.5 million in payments made to the company's minority interest holder. During 2007, net cash used in operating activities was $154.7 million, consisting of a net loss of $682.4 million adjusted for net non-cash expenses of $356.3 million and $171.3 million provided by working capital as well as other operating activities. Included in cash provided by working capital is a $87.7 million increase in Subscriber deferred revenue, as a result of subscribers signing up for discounted annual and multi-year pre-payment plans and $73.5 million increase in Accounts payable, accrued expenses and other liabilities. During 2007, net cash used in investing activities was $131.5 million, consisting of $133.3 million in capital expenditures for the construction of XM-5 and computer systems infrastructure, partially offset by $1.8 million received from the maturity of restricted investments. Full-text copies of the company's consolidated financial statements for the year ended Dec. 31, 2007, are available for free at http://researcharchives.com/t/s?2b13 About XM Satellite Based in Washington, D.C., XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a satellite radio company with more than 9 million subscribers. Broadcasting live daily from studios in Washington, DC, New York City, Chicago, Nashville, Toronto and Montreal, XM's 2008 lineup includes more than 170 digital channels of choice from coast to coast: commercial-free music, premier sports, news, talk radio, comedy, children's and entertainment programming; and the most advanced traffic and weather information. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said its ratings on Washington, District of Columbia-based XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. (CCC+/Watch Developing/--) remain on CreditWatch with developing implications, where S&P originally placed them on March 4, 2008, due to S&P's concerns over standalone refinancing risks XM might face if its merger with Sirius Satellite Radio Inc. (CCC+/Watch Developing/--) wasn't approved. * S&P Downgrades Ratings on Six Classes From Five RMBS Deals ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on six classes of asset-backed certificates from five residential mortgage-backed securities transactions backed by U.S. prime jumbo and Alternative-A collateral issued by First Horizon Alternative Mortgage Securities Trust and First Horizon Mortgage Pass-Through Trust. At the same time, S&P removed one of the lowered ratings from CreditWatch negative and placed S&P's rating on another class on CreditWatch negative. Concurrently, S&P affirmed its ratings on the remaining 324 classes from these and 18 other transactions, one of which S&P simultaneously removed from CreditWatch negative. The downgrades reflect credit support levels that are insufficient given the dollar amount of total delinquencies (30-, 60-, 90-plus days, foreclosures, and REOs). The delinquency amounts and credit support levels for the classes with lowered ratings or ratings placed on CreditWatch. As of the March 25, 2008, remittance date, total delinquencies for First Horizon Mortgage Pass-Through Trust's series 2005-AR5 and First Horizon Alternative Mortgage Securities Trust's series 2004-AA7 had increased 155.37% and 91.41%, respectively, since the April 2007 remittance period. S&P removed the rating on class B-5 from First Horizon Mortgage Pass-Through Trust's series 2005-AR5 from CreditWatch negative because S&P lowered it to 'CCC'. S&P affirmed the rating on class B-4 from First Horizon Mortgage Pass-Through Trust's series 2005- AR5 and removed it from CreditWatch negative because it has sufficient subordination for the current rating level. S&P placed the rating on class B-3 from First Horizon Mortgage Pass-Through Trust's series 2004-5 on CreditWatch negative because of the amount of credit support it has relative to the dollar amount of loans that are severely delinquent (90-plus day, foreclosures, REOs). S&P will continue to monitor the credit quality of class B-3 from this series and may take further rating actions if credit support deteriorates. The affirmations reflect sufficient credit enhancement available to support the ratings at their current levels. Subordination provides credit support for these transactions. The collateral for these transactions originally consisted primarily of prime jumbo and Alt-A mortgage loans. Delinquencies And Subordination (As of the March 2008 remittance) First Horizon Mortgage Pass-Through Trust Series Total delinq. Severe delinq. ------ ------------- -------------- 2004-5 $2,846,184 $1,619,793 Downgraded class Subordination ---------------- ------------- B-3 $445,439 B-4 $165,366 B-5 $72,008 Series Total delinq. Severe delinq. ------ ------------- -------------- 2004-AR4 $1,671,954 $902,654 Downgraded class Subordination ---------------- ------------- B-5 $105,700 Series Total delinq. Severe delinq. ------ ------------- -------------- 2005-AR5 $5,053,694 $3,005,639 Downgraded class Subordination ---------------- ------------- B-5 $430,279 First Horizon Alternative Mortgage Securities Trust Series Total delinq. Severe delinq. ------ ------------- -------------- 2004-FA2 $6,990,926 $3,627,686 Downgraded class Subordination ---------------- ------------- B-5 $665,039 Series Total delinq. Severe delinq. ------ ------------- -------------- 2004-AA7 $11,578,382 $5,865,433 Downgraded class Subordination ---------------- ------------- B-5 $750,097 Ratings Lowered First Horizon Alternative Mortgage Securities Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2004-AA7 B-5 32051GFJ9 CCC B 2004-FA2 B-5 32051GDM4 CCC B First Horizon Mortgage Pass-Through Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2004-5 B-4 32051D5Y4 CCC BB 2004-5 B-5 32051D5Z1 CCC B 2004-AR4 B-5 32051D5K4 CCC B Rating Lowered and Removed From CreditWatch Negative First Horizon Mortgage Pass-Through Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2005-AR5 B-5 CCC B/Watch Neg Rating Placed on CreditWatch Negative First Horizon Mortgage Pass-Through Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2004-5 B-3 32051D5X6 BBB/Watch Neg BBB Ratings Affirmed and Removed From CreditWatch 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B-5 32051DW57 B 2004-AR2 I-A-1 32051D2G6 AAA 2004-AR2 II-A-1 32051D2H4 AAA 2004-AR2 III-A-1 32051D2L5 AAA 2004-AR2 IV-A-1 32051D2M3 AAA 2004-AR2 B-1 32051D2N1 AA 2004-AR2 B-2 32051D2P6 A 2004-AR2 B-3 32051D2Q4 BBB 2004-AR2 B-4 32051D2R2 BB 2004-AR2 B-5 32051D2S0 B 2004-AR3 I-A-1 32051D2U5 AAA 2004-AR3 II-A-1 32051D2V3 AAA 2004-AR3 III-A-1 32051D2Y7 AAA 2004-AR3 IV-A-1 32051D2Z4 AAA 2004-AR3 B-1 32051D3A8 AA 2004-AR3 B-2 32051D3B6 A 2004-AR3 B-3 32051D3C4 BBB 2004-AR3 B-4 32051D3D2 BB 2004-AR3 B-5 32051D3E0 B 2004-AR4 I-A-1 32051D4Z2 AAA 2004-AR4 II-A-1 32051D5A6 AAA 2004-AR4 III-A-1 32051D5D0 AAA 2004-AR4 IV-A-1 32051D5E8 AAA 2004-AR4 B-1 32051D5F5 AA 2004-AR4 B-2 32051D5G3 A 2004-AR4 B-3 32051D5H1 BBB 2004-AR4 B-4 32051D5J7 BB 2004-AR7 I-A-1 32051GEK7 AAA 2004-AR7 II-A-1 32051GEM3 AAA 2004-AR7 II-A-2 32051GEN1 AAA 2004-AR7 II-A-3 32051GEP6 AAA 2004-AR7 II-A-4 32051GEQ4 AAA 2004-AR7 III-A-1 32051GER2 AAA 2004-AR7 IV-A-1 32051GES0 AAA 2004-AR7 B-1 32051GET8 AA 2004-AR7 B-2 32051GEU5 A 2004-AR7 B-3 32051GEV3 BBB 2004-AR7 B-4 32051GEW1 BB 2004-AR7 B-5 32051GEX9 B * Credit Roundtable Strategizes to Lessen Event Risk, Moody's Says ------------------------------------------------------------------ The Credit Roundtable's initiative on model covenants marks an important development in the investment-grade bond universe, says Moody's Investors Service. The Roundtable - which represents over fifty fixed-income investors - seeks to strengthen substantive legal protections against unexpected events, frequently initiated by issuers themselves, which can lead to sudden credit deterioration in investment portfolios, says Moody's. In particular, the Roundtable stresses the importance of the contract-formation process by standardizing covenants, simplifying their often convoluted structure and by seeking to alter the dynamics of the investment-grade road show. "The Roundtable also recognizes that typical investment-grade indentures often provide superficial protection, which is evident only upon reading the fine print, after the 'event' has taken place," says Moody's VP and Senior Credit Officer Alexander Dill. In addition, the model covenants also serve an important educative goal of focusing the fixed-income markets' attention on the role of covenants as a contract right in protecting against event risk, says Dill. "The Roundtable has adopted the appropriate approach to mitigating event risk by emphasizing bondholders' contractual rights and remedies by making them more transparent and easier to grasp." Moody's notes that its research dovetails with market demand for transparency through its own Covenant Quality Assessment service, launched in late 2006, which highlights gaps in bondholder protection on individual bonds against a set of predefined objective criteria. Importantly, the Roundtable's proposed model covenants improve upon existing versions by closing gaps in protection and expanding restrictive coverage while retaining a flexible framework that allows issuers sufficient room to continue operating their business, says Moody's. "The Roundtable wants a more meaningful dialogue with the issuer community, as well as a meeting of minds to establish terms of the bond contract," says Dill. "A simplified, uniform covenant structure would make it easier for investors to quickly grasp the strengths and weaknesses of a given covenant package and compare it against its market peers." While it is too early to tell the extent to which the model covenants become the market standard, the Roundtable initiative has already had an impact, with several deals in 2008 adopting its "change of control" version, says Moody's. * Focus Management Selects Edmund King as Senior Consultant ----------------------------------------------------------- Focus Management Group's president J. Tim Pruban said that Edmund King has joined the restructuring firm in response to the its growing presence in the West Coast. Mr. King joins Robert Riiska, a managing director of focus, and his Los Angeles-based team as a senior consultant. "[Mr. King] is an excellent addition to our West Coast team and will play a significant role in enabling Focus to expand its delivery of turnaround services and experience to our nationwide clientele," said Mr. Riiska. "His financial and operational expertise, extensive restructuring experience and diverse industry knowledge will be a valuable resource to our team and will facilitate our firm's steady growth, both on the West Coast and nationwide." With over 20 years of professional experience working with startup to Fortune 500 companies, Mr. King brings a wealth of experience in finance, accounting, corporate restructurings, M&A activity and strategic planning to Focus. Prior to joining Focus Management Group, Mr. King served as Chief Financial Officer and interim Chief Operating Officer of a financial transaction software technology company, where he specialized in strategic planning, marketing, finance and acquisitions. Mr. King became a Certified Management Accountant in 1992 and holds an MBA from Oregon State University. He is based out of the firm's Los Angeles office and can be reached at (213) 841-1107. About Focus Management Focus Management Group offers nationwide capabilities in turnaround management, business restructuring and asset recovery. Headquartered in Tampa, FL, with offices in Atlanta, Chicago, Greenwich, Los Angeles and Nashville, Focus Management Group provides turn-key support to stakeholders including secured lenders and equity sponsors. The Company provides a comprehensive array of services including turnaround management, interim management, operational analysis and process improvement, case management services, bank and creditor negotiation, asset recovery, recapitalization services and special situation investment banking for distressed companies. Focus Management Group has significant expertise in the insolvency arena. FOCUS Professionals have served debtors, creditors, and unsecured stakeholders in their efforts to accomplish the best outcome. Over the past decade, Focus Management Group has successfully assisted hundreds of clients operating in diverse industries, guiding them to maximize performance or asset recovery. Adverse situations are Focus Management Group's forte - finding winning compromises in a timely manner when faced with the most discouraging of circumstances is what separates Focus Management Group from the competition. * Ernst & Young Integrates Worldwide Practices Under EMEIA Area --------------------------------------------------------------- Ernst & Young Inc. said that its Global Executive and the Global Advisory Council approved the proposed integration of all of its 87 country practices in Western and Eastern Europe, the Middle East, India and Africa into a new EMEIA Area. It also confirmed that more than 700 partners in the Far East had supported a similar integration across 15 countries and territories. The EMEIA Area will operate as a single unit, led by a single executive team and, where allowed by laws and regulations, be underscored by formal combinations of practices. The new Area will be a US$11.2 billion organization with more than 60,000 people. The 3,300 partners of EMEIA will vote on the integration by the end of May. The new EMEIA Area will be effective from 1 July 2008. The integration of the Far East Area creates a $1.2 billion organization, with more than 20,000 people. The new structure will also be effective from 1 July 2008. Mark Otty, currently the head of our UK practice, has been nominated to be the EMEIA Area Managing Partner, while David Sun and Jim Hassett were confirmed as Far East co-Area Managing Partners. Chairman and CEO Jim Turley said: "Ernst & Young has for years had the most comprehensive and implemented global integration of its practices. The combinations we are announcing today are bold and exciting developments that dramatically further this integration. We are setting a new standard for professional services. Together with the integration of the 29 countries of our Americas practices, which we announced in 2006, we remain the most globally integrated professional services firm." He added: "At Ernst & Young, our thinking always starts externally -- about the world around us -- and about all the potential that exists everywhere. The moves we announced today reflect the increasingly global nature of our borderless business environment, which is changing the expectations of both our clients and our people, and which requires nothing less than a truly global approach from our organization. With these changes, I am confident we will provide greater opportunities for our people to achieve their potential as well as superior service to our many clients. We will also strengthen our unique, diverse international culture." Chief Operating Officer John Ferraro said: "We committed ourselves to the effective global integration of our business several years ago, and we have created the structures necessary to achieve this. Feedback from our clients and the market tells us that this is the right approach. These latest developments in Europe, the Middle East, India and Africa, and in the Far East, will significantly strengthen our business, and allow us to best serve our clients in the global economy." Jim Turley added: "The European 8th Directive provides a new regulatory environment to support the closer integration of our European operations, and this has enabled us to accelerate our thinking around our globalization plans. EMEIA integration will have many benefits. Our clients want us to mirror the way they behave in these markets and to have access to bigger and more experienced teams. Our people want and expect us to operate across borders and cultures with the increased client experience, career diversity and mobility that will bring. And we want to improve our operational effectiveness, to improve our capacity to invest in the development of market leading services, as well as in the important emerging markets around the world." Said John Ferraro: "The Far East integration received the overwhelming support of the Ernst & Young partners. This integration is part of our long term investment in Asia's rapidly growing markets. By even more closely integrating these practices, we will further improve our ability to serve the businesses of the Far East, as well as those global businesses which are taking an increasingly active presence in many Far East markets, including China. This milestone is a key building block in responding to the business imperative to provide seamless, consistent, high-quality client service, worldwide." "These are significant developments that reflect the fact that our world is changing rapidly and increasingly acts without boundaries," concluded Jim Turley. "I am personally very enthusiastic we are taking these steps, and from my discussions with clients, regulators and our people, I believe they share this enthusiasm." About Ernst & Young Ernst & Young Inc. -- http://www.ey.com/-- is a global leader in assurance, tax, transaction and advisory services. Worldwide, its 130,000 staff are united by our shared values and an unwavering commitment to quality. Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients. * Southwest Healthcare Transactions Conference Set May 30 --------------------------------------------------------- The Beard Group, Renaissance American Management, and the Health Industry Council of the Dallas-Fort Worth Region presents the First Annual Southwest Healthcare Transactions Conference to be held on May 30, 2008 at the Four Seasons Resort and Club, Dallas at Las Colinas. Healthcare professionals and their advisors face a daunting task of strategic planning in a financial market undergoing turbulence unseen in decades. The first-ever conference, focusing on successful strategies for mergers, acquisitions, divestitures, and restructurings, is designed to illuminate the issues and bring some greater clarity of understanding. The organizers have put together a blue-ribbon faculty who are doing the deals that are getting done. Conference participants will be looking both at trends in the industry, financing strategies, and case studies of innovative deals. This is not a fine-points-of-the-law conference, but one that will leave one better prepared to plan and execute one's next transaction. To download the agenda or register for the conference, visit: http://www.renaissanceamerican.com. The conference will include: * Valuation Impact of Regulatory Issues * Pre-Closing Due Diligence and Post-Closing Integration for Profit Enhancement * Healthcare M&A Market: Where to Next? * Exit Strategies using Special Purpose Acquisition Corporations * Dealmaker Trends between Not-For-Profits and For-Profits * Investors Roundtable: Perspectives of the Private Equity Firms * Corporate Finance Perspectives: Current Equity and Debt Trends * Plus Case Study: Legacy Medical Village, a Physician-Driven Model General sponsors include the Alvarez & Marsal, Bank of Texas' Healthcare Banking Group, GE Healthcare Financial Services, Hill Schwarts Spilker Keller LLC, K&L Gates, Patton Boggs LLP, and PricewaterhouseCoopers' Transaction Services. Cadwalader, Cain Brothers, Deloitte, Drinker Biddle, KaufmanHall, Latham & Watkins LLP, Principle Valuation LLC, Proskauer Rose LLP and Wellspring Partners serve as sustaining sponsors. * BOOK REVIEW: Financial Planning for High Net Worth Individual --------------------------------------------------------------- Authors: Richard H. Mayer and Donald R. Levy Publisher: Beard Books Paperback: 428 pages List Price: US$59.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587982323/internetbankrupt Financial Planning for High Net Worth Individuals by Richard H. Mayer and Donald R. Levy is a comprehensive and authoritative guide to the art and science of wealth management. It is a source book that wealth management advisers can turn to when looking for in-depth answers. Collected here are the insights of expert advisers, presented in a thoughtful and thorough manner on the vital aspects of financial management. This book is for high net worth individuals as well as for every serious wealth management professional. Richard H. Mayer, Chartered Life Underwriter, Registered Investment Advisor. Mr. Mayer has more than 40 years of experience in the insurance industry where he specializes in advising high net worth individuals and in developing executive compensation plans. Donald R. Levy, JD, MBA, is an attorney and benefits consultant. Mr. Levy has authored or edited a number of books including the Research Institute of America Answer Book, Executive Compensation Treatise, 403(b) Answer Book, Guide to Cash Balance Plans, Quick Reference Guide to IRAs, and the State-by-State Guide to Managed Care Law. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***