T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 28, 2008, Vol. 12, No. 100 Headlines 155 EAST: Moody's Slashes Ratings to 'Caa3' on High Default Risk ABSC HOME: Principal Write-downs Cue S&P's Eight Rating Cuts ABSPOKE 2006-IA: Moody's Reviews 'Ba1' Rating on $100 Mil. Notes ABSPOKE 2005-IC: Moody's Junks Rating on $25 Mil. Notes ABSPOKE 2005-IC2: Moody's Junks Rating on $5 Mil. Notes From Baa2 ABSPOKE 2006-IIC: Moody's Reviews 'B2' Rating on $15 Mil. Notes ABSPOKE 2006-III: Three Classes of Notes Get Moody's Rating Cuts ABSPOKE 2005-X: Moody's Reviews 'Ba3' Rating on JPY2 Bil. Notes ABSPOKE 2005-XII B: Moody's Reviews 'Ba1' Rating on $24.5MM Notes ARCAP 2005-RR5: Fitch Downgrades Ratings on 15 Classes of Certs. ASARCO LLC: Grupo Mexico to Submit Reorganization Plan for ASARCO ASARCO LLC: Affiliates Ask Joint Administration of Ch. 11 Cases B&B INSURANCE: A.M. Best Assigns 'b+' Issuer Credit Rating BAYBERRY FUNDING: Moody's Reviews 'Ba2' Rating on $42.5 Mil. Notes BEAR STEARNS: SEC Doesn't Reveal Reasons on Withdrawing from Probe BEAR STEARNS COMMERCIAL: Fitch Affirms Low-B Ratings on Six Certs. BEAR STEARNS TRUST: Moody's Cuts Ratings on Higher Delinquencies BENAZZI CDO: Three Classes of Notes Get Moody's Rating Downgrades BRYAN COUNTY: Moody's Holds 'Caa3' Rating on 1990A Revenue Bonds BUCHANAN SPC: Four Classes of Notes Get Moody's Rating Downgrades BUFFETS HOLDINGS: Court Approves FTI as Panel's Financial Advisor BUFFETS HOLDINGS: Asks Court to Enjoin Workers from Pursuing Case CALAMOS INVESTMENTS: To Refinance $939MM of Fund's Pref. Stocks CASAS INVESTMENTS: Case Summary & Largest Unsecured Creditor CASSANDRA THOMAS: Voluntary Chapter 11 Case Summary CAVTEL HOLDINGS: Operating Challenges Cue Moody's Rating Reviews C-BASS CBO: Five Classes of Notes Acquire Moody's Rating Cuts CDC MORTGAGE: Eight Classes of Certs. Get S&P's Rating Downgrades CENTRAL ILLINOIS: Has Until August 31 To File Chapter 11 Plan CENTRAL ILLINOIS: Court Okays $80MM Sale of Assets to CIE Energy CI WORLDWIDE: Voluntary Chapter 11 Case Summary CINCINNATI BELL: Dec. 31 Balance Sheet Upside-Down by $667 Million CITIUS I: Moody's Reviews 'Ba1' Rating on Two $1.8 Bil. Notes CITIUS II: Poor Credit Quality Prompts Moody's Rating Downgrades CLINICAL PET: Case Summary & 20 Largest Unsecured Creditors CMP SUSQUEHANNA: S&P Changes Outlook to Stable, Holds 'B-' Rating CONGOLEUM CORP: Ernst & Young Raises Substantial Doubt CONTINENTAL AIRLINES: Chooses Not to Merge with United Air Lines COUNTRYWIDE FINANCIAL: Mozilo's Pay Plummeted Nearly 80% in 2007 CREDIT DEFAULT: Moody's Junks Ratings on 12 Credit Default Swaps CREST 2000-1: Moody's Downgrades Rating on $21 Mil. Notes to 'B2' CRYSTAL RIVER: Six Classes of Notes Get Fitch's Rating Downgrades CST INDUSTRIES: Moody's Keeps 'B1' Rating on Upsized $135MM Loan CWABS TRUST: S&P Downgrades Ratings on 15 Mortgage Certificates DALLAGLIO CDO: Moody's Reviews 'Ba2' Rating on $22 Mil. Notes DALLAGLIO CDO: Moody's Downgrades Three Classes of Floating Notes DEN-MARK CONSTRUCTION: Case Summary & 68 Largest Unsec. Creditors DIAMOND GLASS: Court Approves Guggenheim's $7 Mil. DIP Financing DIOMED HOLDINGS: Seeks Court Okay to Sell Assets to AngioDynamics DIOMED HOLDINGS: May Use Lenders' Cash Collateral on Interim Basis DIOMED HOLDINGS: Selects Fladgate LLP as U.K. Legal Counsel DRS TECHNOLOGIES: Fitch Affirms Issuer Default Rating at 'B+' DUKE FUNDING IV: Moody's Cuts Ratings on Three Classes of Notes DUKE FUNDING VI: Seven Classes of Notes Get Moody's Rating Cuts DUKE FUNDING VII: Moody's Cuts Ratings on 11 Note Classes DUKE FUNDING IX: Nine Classes of Notes Get Moody's Rating Cuts DUKE FUNDING HIGH: Moody's Cuts Rating on $250MM Notes DUKE FUNDING HIGH: Moody's Cuts Ratings on Eight Classes of Notes DUKE FUNDING HIGH: Moody's Cuts Ratings on $1.5BB Notes Due 2050 DUNMORE HOMES: Files First Amended Plan of Liquidation EMPIRE LAND: Case Summary & 85 Largest Unsecured Creditors EOS AIRLINES: Files for Chapter 11 Protection in New York EOS AIRLINES: Voluntary Chapter 11 Case Summary FAIRWEST ENERGY: Unit's Lender Demands Repayment of $10.63MM Loan FOSTER WHEELER: Moody's Raises Corporate Family Rating to 'Ba2' FREMONT HOME: S&P Downgrades Ratings on Two Classes of Certs. FRONTIER AIRLINES: Wants to Get Faegre & Benson as Special Counsel GARY FIRMENDER: Case Summary & 13 Largest Unsecured Creditors GALVESTON PROPERTY: Moody's Confirms 'Caa1' Rating on 1991A Bonds GAMESTOP CORP: Moody's Lifts Ratings to Ba1 on Strong Performance GEMSTONE CDO IV: Moody's Cuts Ratings on Six Classes of Notes GEMSTONE CDO V: Eight Classes of Notes Get Moody's Rating Cuts GEMSTONE CDO VI: Five Classes of Notes Get Moody's Junk Ratings GENERAL MOTORS: GMAC and ResCap Downgrades Cue S&P's Neg. Watch GEOEYE INC: Moody's Upgrades Corporate Family Rating to 'Caa1' G-FORCE CDO: Fitch Downgrades Ratings on Seven Classes to Low Bs GLOBAL FUELS: Case Summary & 14 Largest Unsecured Creditors GREENPOINT MORTGAGE: Moody's Downgrades Ratings on Two Tranches GSAMP TRUST: Eroding Credit Support Cues S&P's Rating Downgrades HARRINGTON SCHWEERS: Involuntary Chapter 11 Case Summary HOMEBANC MORTGAGE: Moody's Downgrades Ratings on Three Tranches HOOP HOLDINGS: Wants Goulston & Storrs as Real Estate Counsel HSI ASSET: Seven Tranches Get Moody's Rating Cuts on Delinquencies HUBCO INC: Files Voluntary Chapter 11 Case Summary HUDSON MEZZANINE: Moody's Reviews 'Ba2' Rating on $240 Mil. Notes HUDSON MEZZANINE: Moody's Reviews 'Ba3' Rating on $1.2 Bil Swap INTERSTATE BAKERIES: Court Adjourns Confirmation Hearing Sine Die INTERSTATE BAKERIES: Court Sets DIP Facility Hearing April 29 IMPAC SECURED: Delinquency Cues Moody's Rating Cuts on 32 Tranches INDEPENDENCE COUNTY: S&P Cuts Rating on $29.3 Mil. Bonds to 'B' INERGY LP: Moody's Confirms 'Ba3' Ratings and Positive Outlook INERGY LP: S&P Attaches 'B+' Rating on $200 Mil. Senior Notes INPHONIC INC: Treasury Balks at Plan and Disclosure Statement ISCHUS HIGH: Six Classes of Notes Obtain Moody's Rating Downgrades ISCHUS MEZZANINE: Moody's Downgrades Ratings on Eight Classes IXION PLC: Three Classes of Notes Get Moody's Junk Ratings IXION PLC: Moody's Junks Rating on Tranche A Notes IXION PLC: Eroding Credit Quality Prompts Moody's Rating Cuts JP MORGAN: S&P Downgrades Cert. Ratings on Eroding Credit Support KAISER NETHERLANDS: Case Summary & 20 Largest Unsecured Creditors KENMARE 2005-I: Moody's Reviews 'B2' Rating on $50 Mil. Notes KIMBALL HILL: Moody's Cuts Rating on $203MM Notes to C KLEROS REAL: Moody's Junks Rating on $30 Mil. Notes From 'A3' KNOLLWOOD CDO: Seven Classes of Notes Get Moody's Rating Cuts LAGUNA SECA: Moody's Junks Ratings on Three Classes of Notes LANDSOURCE COMMUNITIES: Gets Default Notice on $1BB Obligation LB-UBS COMMERCIAL: Fitch Confirms Low-B Ratings on Three Classes LENNAR CORP: Venture Unit Gets Default Notice on $1BB Obligation LNR CDO: Fitch Downgrades Ratings on Seven Note Classes to Low-Bs LONG BEACH: Deterioration in Credit Support Cues S&P's Rating Cuts MAGNOLIA FINANCE: Moody's Junks Ratings on Seven Classes of Notes MAIN KNITTING: Chapter 15 Petition Summary MAJESTIC STAR: S&P's Cuts Corporate Credit Rating to 'CCC+' MONTAUK POINT: Weak Credit Quality Cues Moody's Rating Downgrades MARGATE FUNDING: Moody's Reviews 'Ba1' Rating on $30 Mil. Notes MEDIACOM COMMS: Dec. 31 Balance Sheet Upside-Down by $253 Million MERRILL LYNCH MORTGAGE: S&P Cuts Ratings on Five Classes of Certs. MEZZANINE PORTFOLIO: Moody's Junks Rating on $7.5MM Notes From B3 MICHAEL KESSEL: Case Summary & 13 Largest Unsecured Creditors ML-CFC COMMERCIAL: Fitch Maintains Low-B Ratings on Six Classes MORTGAGEIT CERTIFICATES: Moody's Downgrades Ratings on 12 Tranches MSC-MEDICAL SERVICES: Moody's Junks Rating on Weak Credit Metrics MUSICLAND HOLDING: Court Awards Professionals $10MM Final Payment NEW CENTURY ALTERNATIVE: Moody's Cuts Ratings on 10 Tranches NWGOC CREDIT DERIVATIVE: Moody's Reviews 'Ba1' Rating NORTH COVE: Moody's to Review B1 Rating on $44 Mil. Notes NORTHAMPTON GENERATING: Fitch Cuts Rating on $153 Mil. Bonds to B OSYKA CORP: Court Approves Bidding Procedures for Sale of Assets OWNIT MORTGAGE: S&P Downgrades Ratings on Three Certificates PENTON BUSINESS: S&P Puts 'B' Rating on Negative CreditWatch PITG GAMING: S&P Rates Corporate Credit 'B-' With Negative Outlook PRIDE INT'L: BOD's Actions May Cue Seadrill's Buyout, Fitch Says PROTECTED VEHICLES: Can Access GC Financial's Cash Collateral RADNOR HOLDINGS: Judge Walsh Approves Disclosure Statement RADNOR HOLDINGS: Plan Confirmation Hearing Set on June 12 RAMP TRUSTS: 35 Classes of Certs. Get S&P's Rating Downgrades RASC 2005-KS3: S&P Downgrades Ratings on Two Classes of Certs. REDENVELOPE INC: Court OKs $4.5MM DIP Loan & Creative Catalogs APA REGAL ENTERTAINMENT: March 27 Balance Sheet Upside-Down by $185MM RELIANT ENERGY: Wants Chapter 11 Trustee Appointed RENAISSANCE HOME: S&P Downgrades Ratings on 20 Asset-backed Certs. RESIDENTIAL CAPITAL: Taps Thomas Marano as Non-Exec Board Chairman RESIDENTIAL CAPITAL: S&P Junks Ratings on Board Members' Stepdown RUTLAND RATED: Moody's Reviews Ratings on Two Classes of Notes SEA CONTAINERS: SCSL Panel Asks Documents on Pension Dispute SHARPER IMAGE: Chooses to Pursue Sale of Business and Assets SORIN CDO: Six Classes of Notes Acquire Moody's Rating Downgrades SOUNDVIEW HOME: High Delinquencies Cue Moody's Nine Rating Cuts SPECIALTY UNDERWRITING: S&P Downgrades Ratings on 20 Cert. Classes SR TELECOM: Changes Name to SRX Post After Acquisition STANDARD PACIFIC: Posts $767.3 Million Net Loss in 2007 STATIC RESIDENTIAL: Poor Credit Quality Cues Moody's Rating Cuts STATIC RESIDENTIAL: Moody's Reviews 'Ba2' Rating on $46 Mil. Notes STATIC RESIDENTIAL: Moody's Reviews 'Ba2' Rating on $10 Mil. Notes STATIC RESIDENTIAL: Moody's Lowers Ratings on Five Note Classes STILLWATER ABS: Moody's Downgrades Ratings on Six Classes of Notes STRIKE PETROLEUM: Gets Letter Demanding Repayment of $10.63MM Loan SUMMER STREET: Moody's Cuts Ratings on $63 Mil. Notes to 'B3' SUMMER STREET: Two Classes of Notes Acquire Moody's Junk Ratings SUPERIOR OFFSHORE: Files For Chapter 11 Bankruptcy in Texas SUPERIOR OFFSHORE: Case Summary & 20 Largest Unsecured Creditors TAYLOR CAPITAL: Posts $10 Mil. Net Loss in Year Ended December 31 TERM CDO: Moody's Downgrades Ratings on Four Classes of Notes TERWIN MORTGAGE: S&P Downgrades Ratings on Certificate Classes TERWIN MORTGAGE: Credit Support Erosion Cues S&P's 11 Rating Cuts UAL CORP: Continental Airlines Chooses Not to Merge with United UAL CORP: Begins Merger Discussions with US Airways US AIRWAYS: Begins Merger Discussions with United Airlines USA COMMERCIAL: SEC Files Lawsuit Against Former CEO for Fraud WACHOVIA MORTGAGE: Moody's Downgrades Ratings on 15 Tranches WALTER INDUSTRIES: Moody's Rates Proposed Revolver 'B2' WALTER INDUSTRIES: S&P Affirms 'BB' Rating on Revolver Due 2010 WELLMAN INC: Creditors' Committee Balks at CRO Employment WELLMAN INC: Creditors' Panel Wants Sale Incentive Plan Modified WELLMAN INC: U.S. Trustee Asks Court to Reject Sale Incentive Plan WELLS FARGO: Six Tranches Acquire Moody's Rating Downgrades WENDY'S INTERNATIONAL: Inks $2BB Buyout Deal with Triarc Companies WENDY'S INT'L: Triarc Deal Prompts Moody's 'Ba3' Rating Reviews WENDY'S INT'L: Triarc Deal Cues S&P's Negative Watch on BB- Rating WHATELY CDO: Moody's Cuts Note Ratings on Poor Credit Quality * S&P Downgrades Ratings on 184 RMBS Classes From 27 Transactions * Moody's Says Homebuilding Industry Faces Continued Challenge * Credit Roundtable Strategizes to Lessen Event Risk, Moody's Says * Three Lawyers Join Proskauer Rose's New York Office * Husch & Eppenberger and Blackwell Officially Reveal Merger * BOND PRICING: For the Week of Apr. 21 - Apr. 25, 2008 ********* 155 EAST: Moody's Slashes Ratings to 'Caa3' on High Default Risk ---------------------------------------------------------------- Moody's Investors Service downgraded 155 East Tropicana LLC's corporate family rating and probability of default rating as well as the rating on the $130 million 8.75% senior secured notes due 2012 to Caa3 from Caa1. It also affirmed the SGL-4 speculative grade liquidity rating. The outlook is negative. The rating action is based on the increased risk of default through a potential distressed exchange offer or a missed debt service payment in the next twelve months, should the pending acquisition by Hedwigs Las Vegas Top Tier LLC fail and the company's EBITDA weaken further. Given the prolonged turbulence in the credit markets, the rating agency expresses skepticism regarding the materialization of the Transaction in its current terms, which was initiated on April 30, 2007, and is concerned about 155 East Tropicana's ability to meet its future debt service obligations, should the senior secured notes remain outstanding and the company fail to improve EBITDA in a sustainable way. Moody's also notes that the revolver expires on March 30, 2009, two days before a coupon payment date. Since the opening of the renovated Hooters Casino Hotel in February 2006, the ramp up has been well below expectations. The negative outlook reflects the risk of further deterioration with regards to operating performance and liquidity, as cost cutting measures might not fully offset the weakening of the company's revenues due to reduced traffic and lower consumer spending. Ratings downgraded: -- Corporate Family Rating to Caa3 -- Probability of Default Rating to Caa3 -- Rating of Senior Secured Notes due 2012 to Caa3 (unchanged LGD assessment of LGD4/57%) 155 East Tropicana, LLC owns the Hooters Casino Hotel in Las Vegas, Nevada. The property is located one-half block from the intersection of Tropicana Avenue and Las Vegas Boulevard, a major intersection on the Las Vegas Strip. The Hooters Casino Hotel features 696 hotel rooms and an approximately 29,000 square-foot casino. The company generated approximately $65 million in net revenues in 2007. ABSC HOME: Principal Write-downs Cue S&P's Eight Rating Cuts ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on eight classes of asset-backed certificates from four transactions issued by Asset Backed Securities Corp. Home Equity Loan Trust, Centex Home Equity Loan Trust, and Meritage Mortgage Loan Trust. Concurrently, S&P affirmed its ratings on the remaining 25 classes from these transactions. The downgrades reflect principal write-downs, reduced credit enhancement as a result of monthly realized losses, and a high amount of severe delinquencies (90-plus days, foreclosures, and REOs). As of the March 25, 2008, remittance date, cumulative realized losses, as a percentage of the original pool balances, were 9.25% (Asset Backed Securities Corp. series 2004-HE4), 4.59% (Centex series 2002-C), 3.41% (Meritage series 2004-1), and 2.74% (Meritage series 2004-2). Severe delinquencies totaled approximately $9.036 million for Meritage series 2004-1. For Asset Backed Securities Corp. series 2004-HE4, losses have outpaced excess interest by 2.6x over the past six months. These transactions incurred principal write-downs during the March remittance period totaling $738,092 for Asset Backed Securities Corp. 2004-HE4's class M8; $45,074 for Centex series 2002-C's class B-2; $487,189 for Meritage series 2004-1's class M-7; and $159,272 for Meritage series 2004-2's class M-10. As a result, S&P downgraded these classes to 'D'. The affirmations reflect sufficient credit enhancement available to support the ratings at their current levels. Subordination, overcollateralization, and excess spread provide credit support for these transactions. The collateral for these transactions originally consisted primarily of fixed- and adjustable-rate, first- and second-lien mortgage loans. Ratings Lowered Asset Backed Securities Corporation Home Equity Loan Trust Rating ------ Series Class CUSIP To From ------ ----- ----- -- ---- 2004-HE4 M5 04541GKG6 B BB 2004-HE4 M8 04541GKK7 D CCC Centex Home Equity Loan Trust Rating ------ Series Class CUSIP To From ------ ----- ----- -- ---- 2002-C B-2 152314FV7 D CCC Meritage Mortgage Loan Trust Rating ------ Series Class CUSIP To From ------ ----- ----- -- ---- 2004-1 M-2 59001FAR2 BB BB+ 2004-1 M-3 59001FAS0 B BB 2004-1 M-4 59001FAT8 B- B 2004-1 M-7 59001FAW1 D CCC 2004-2 M-10 59001FBP5 D CCC Ratings Affirmed Asset Backed Securities Corp. Home Equity Loan Trust Series Class CUSIP Rating ------ ----- ----- ------ 2004-HE4 A1 04541GKA9 AAA 2004-HE4 M1 04541GKC5 AA 2004-HE4 M2 04541GKD3 AA 2004-HE4 M3 04541GKE1 AA- 2004-HE4 M4 04541GKF8 BBB 2004-HE4 M6 04541GKH4 B- 2004-HE4 M7 04541GKJ0 CCC Centex Home Equity Loan Trust Series Class CUSIP Rating ------ ----- ----- ------ 2002-C AF-4 152314FM7 AAA 2002-C AF-5 152314FN5 AAA 2002-C AF-6 152314FP0 AAA 2002-C M-1 152314FS4 AA 2002-C M-2 152314FT2 A 2002-C B-1 152314FU9 CCC Meritage Mortgage Loan Trust Series Class CUSIP Rating ------ ----- ----- ------ 2004-1 M-1 59001FAQ4 BBB 2004-1 M-5 59001FAU5 CCC 2004-1 M-6 59001FAV3 CCC 2004-2 M-1 59001FBE0 AA+ 2004-2 M-2 59001FBF7 AA+ 2004-2 M-3 59001FBG5 AA 2004-2 M-4 59001FBH3 BBB- 2004-2 M-5 59001FBJ9 BB 2004-2 M-6 59001FBK6 B 2004-2 M-7 59001FBL4 CCC 2004-2 M-8 59001FBM2 CCC 2004-2 M-9 59001FBN0 CCC ABSPOKE 2006-IA: Moody's Reviews 'Ba1' Rating on $100 Mil. Notes ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these class of notes issued by ABSpoke 2006-IA Segregated Portfolio: Class Description: $100,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Aaa -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-IC: Moody's Junks Rating on $25 Mil. Notes ------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating on these note issued by ABSpoke 2005-IC, Ltd. Class Description: $25,000,000 Fixed Rate Notes due 2042 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-IC2: Moody's Junks Rating on $5 Mil. Notes From Baa2 ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating on these note issued by ABSpoke 2005-IC2, Ltd. Class Description: $5,000,000 Variable Floating Rate Notes due 2042 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2006-IIC: Moody's Reviews 'B2' Rating on $15 Mil. Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the rating on these notes issued by ABSpoke 2006-IIC: Class Description: $15,000,000 Variable Floating Rate Notes Due 2037 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2006-III: Three Classes of Notes Get Moody's Rating Cuts ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by ABSpoke 2006-III: Class Description: $20,000,000 Variable Floating Rate Notes Due 2045, Series 2006-IIIA -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A3, on review for possible downgrade Class Description: $30,000,000 Variable Floating Rate Notes Due 2045, Series 2006-IIIB -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $30,000,000 Variable Floating Rate Notes Due 2045, Series 2006-IIIC -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-X: Moody's Reviews 'Ba3' Rating on JPY2 Bil. Notes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these note issued by ABSpoke 2005-X, Ltd. Class Description: JPY2,000,000,000 Variable Floating Rate Notes Due 2015 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ABSPOKE 2005-XII B: Moody's Reviews 'Ba1' Rating on $24.5MM Notes ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these note issued by ABSpoke 2005-XII B, Ltd.: Class Description: $24,500,000 Variable Floating Rate Notes due December 20, 2035 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade According to Moody's, the rating action reflects increased deterioration in the credit quality of the underlying portfolio. ARCAP 2005-RR5: Fitch Downgrades Ratings on 15 Classes of Certs. ---------------------------------------------------------------- Fitch Ratings downgraded and assigned Distressed Recovery ratings to ARCap 2005-RR5 Resecuritization, Inc., commercial mortgage- backed securities pass-through certificates, series 2005-RR5 (ARCap 2005-RR5): -- $26.1 million class A-1 to 'BBB' from 'AAA'; -- $26.1 million class A-2 to 'BB' from 'AAA'; -- $26.2 million class A-3 to 'BB' from 'AAA'; -- $21.9 million class B to 'B' from 'AA'; -- $21.9 million class C to 'B' from 'A'; -- $3.1 million class D to 'B-' from 'A-'; -- $12.5 million class E to 'B-' from 'BBB+'; -- $9.4 million class F to 'B-' from 'BBB'; -- $9.4 million class G to 'B-' from 'BBB-'; -- $15.7 million class H to 'B-' from 'BB+'; -- $6.3 million class J to 'B-' from 'BB'; -- $9.4 million class K to 'B-' from 'BB-'; -- $9.4 million class L to 'CC/DR4' from 'B'; -- $9.4 million class M to 'CC/DR4' from 'B-/DR1'; -- $9.4 million class N to 'C/DR6' from 'CCC/DR3'. 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 $1.2 million class O is not rated by Fitch. ARCap 2005-RR5 is backed by CMBS B-pieces and closed Aug. 16, 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. A predecessor to Centerline REIT Inc. selected the initial collateral, and Centerline REIT Inc. (rated 'CAM1-' by Fitch as a CDO Asset Manager) currently serves as the collateral administrator. The collateral for this RE-REMIC consists of high-yielding junior bonds of CMBS and ReREMIC 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 Re-REMICs, Fitch has targeted expected losses in different rating stresses based on the quality of the underlying CMBS collateral. The overall expected losses reflect the single sector exposure, the concentrated nature of these portfolios, and the low expected recoveries upon bond default, especially for more junior and thinner classes of CMBS tranches. Additional ratings considerations include seasoning of underlying collateral, obligor diversity, actual bond performance and projected losses. The specific credit characteristics that are factored into Fitch's rating review are discussed below. ARCap 2005-RR5 is collateralized by all or a portion of 18 classes of fixed-rate CMBS in 15 separate underlying transactions (70.8%) and the five most junior classes of ARCap 2004-RR3 (29.2%). 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 below-average for CMBS B-piece resecuritizations, and the vintage distribution of the CMBS collateral ranges from 1999 to 2005 (an average of 6.3 years of seasoning). Approximately 74.7% 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 2.3% investment grade. ARCap 2005-RR5 holds 2.7% in the 'BB' category and 20.3% in the 'B' category. The collateral has realized $89 million in losses to date, which represents 29% of the original collateral. Based on the original below 'B-' balance of $262.3 million, this loss rate equates to a 33.9% loss rate on the below 'B-' collateral, which is higher than other CMBS B-piece resecuritizations rated by Fitch. Additional losses are projected with $103 million of the loans in the underlying CMBS transactions currently 60 days or more delinquent. ASARCO LLC: Grupo Mexico to Submit Reorganization Plan for ASARCO ----------------------------------------------------------------- Grupo Mexico, S.A.B. de C.V., the ultimate parent of ASARCO LLC and its debtor-affiliates, will propose a sponsored reorganization plan through an auction procedure approved by the U.S. Bankruptcy Court for the Southern District of Texas to ensure the company's creditors are paid full or unimpaired. Although the company objects to the auction process, it is finalizing a proposal in an effort to guarantee the fair valuation of Asarco LLC's assets and reestablish its control of the company. The company welcomes the involvement of a Court-appointed examiner, who will oversee the auction and ensure the integrity of the process. The company believes that with a full payment plan, there is no reason to accept any purchase of assets proposal, and the legal team is prepared to pursue all legal remedies to guarantee that the auction results in the full valuation of Asarco LLC's assets. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Affiliates Ask Joint Administration of Ch. 11 Cases --------------------------------------------------------------- ASARCO LLC and its debtor-affiliates previously advised the U.S. Bankruptcy Court for the Southern District of Texas that, to complete the resolution of all of the Debtors' asbestos and environmental liabilities, additional subsidiaries would need to file for bankruptcy protection. The Debtors believe that Chapter 11 protection will provide a global resolution of the liabilities and will afford the surviving entities a clean start. Consequently, six affiliates of ASARCO LLC filed separate voluntary Chapter 11 petitions at the U.S. Bankruptcy Court for the Southern District of Texas on April 21, 2008. The additional ASARCO Debtors are: Entity Case No. ------ -------- Wyoming Mining & Milling Co. 08-20197 Alta Mining & Development Co. 08-20198 Tulipan Co., Inc. 08-20199 Blackhawk Mining & Development Co., Ltd. 08-20200 Peru Mining Exploration & Development Co. 08-20201 Green Hill Cleveland Mining Co. 08-20202 The debtor affiliates asked the Court to jointly administer their cases with ASARCO LLC's Chapter 11 case. They are represented by the law firm, Baker Botts L.L.P. Wyoming Mining, Blackhawk Mining, and Green Hill disclosed that it owes certain obligations under a consent decree, dated February 11, 1994, with the U.S. Department of Justice Environment and Natural Resources Division. Alta Mining, Green Hill, Peru Mining, Tulipan and Wyoming Mining listed not more than $50,000, in assets and liabilities. Blackhawk Mining listed assets between $100,000 and $500,000, and liabilities from $0 to $50,000. The debtor affiliates disclosed that they owe certain pension amounts to the Pension Benefit Guaranty Corporation, certain intercompany loans from ASARCO LLC, and various unpaid taxes to the Utah State Tax Commission. Other ASARCO affiliates that have sought protection under Chapter 11 are: * Lac d'Amiante Du Quebec Ltee, * CAPCO Pipe Company, Inc., * Cement Asbestos Products Company, * Lake Asbestos of Quebec, Ltd., * LAQ Canada, Ltd., * Encycle, Inc., * ASARCO Consulting, Inc., * AR Sacaton LLC, * Southern Peru Holdings LLC, * ASARCO Exploration Company Inc., * Salero Ranch, Unit III, Community Association, Inc., * Government Gulch Mining Company, Limited, * AR Mexican Explorations, Inc., * ASARCO Master, Inc., * ASARCO Oil and Gas Company, Inc., * Bridgeview Management Company, Inc., * ALC, Inc., * American Smelting and Refining Company, and * Covington Land Company. One of ASARCO's affiliate, Encycle/Texas, Inc., filed a Chapter 11 petition in 2005 but the case was subsequently converted to a Chapter 7 liquidation proceeding. The company is currently in the process of soliciting bids for potential plan sponsors and selling its assets to finance the plan. Two of the company's bondholders, Harbinger Capital Partners Master Fund I, Ltd., and Citigroup Global Markets, Inc., have expressed support for the sale process initiated by ASARCO LLC. The Arizona Republic said that BHP Billiton, Rio Tinto, and a group backed by Glencore AG expressed interest in bidding for ASARCO. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). B&B INSURANCE: A.M. Best Assigns 'b+' Issuer Credit Rating ---------------------------------------------------------- A.M. Best Co. assigned the financial strength rating of C++ (Marginal) and an issuer credit rating of "b+" to B&B Insurance Co., OJSI. The outlook for both ratings is stable. The ratings reflect the company's insufficient level of financial strength to support the business according to A.M. Best's risk- based capital model, partially mitigated by its established position as the largest private insurer in a small but developing Belarusian insurance market, with moderate financial performance. The company has a weak level of risk-adjusted capitalisation, dictated by a low level of capital and surplus relative to significant premium and investment risks. A.M. Best believes that the company's strategy to increase retained earnings through lower dividend payments of 15%, with projected premium growth up to 15% per annum, would improve its capital position going forward, though it is still likely to remain constrained. B&B has established itself as the largest private insurer with a 9% share of the local non-life market, which is dominated by government owned insurance companies. The company has acquitted itself well in a market that has undergone significant legislative changes. However, going forward B&B faces further challenges maintaining its position operating in an uncertain insurance environment. The company has consistently achieved positive underwriting results with a loss ratio of 83% in 2007, supported by moderate return of approximately 5% on investments. A.M. Best believes that despite these positive underwriting results and a comprehensive reinsurance programme, the net maximum exposures are material enough to impact further B&B's capital position. BAYBERRY FUNDING: Moody's Reviews 'Ba2' Rating on $42.5 Mil. Notes ------------------------------------------------------------------ Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Bayberry Funding, Ltd.: Class Description: $86,000,000 Class III Senior Floating Rate Notes Due 2041 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $17,250,000 Class IV Mezzanine Floating Rate Deferrable Notes Due 2041 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $42,500,000 Class V Mezzanine Floating Rate Deferrable Notes Due 2041 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. BEAR STEARNS: SEC Doesn't Reveal Reasons on Withdrawing from Probe ------------------------------------------------------------------ The U.S. Securities and Exchange Commission did not divulge reasons why it withdrew from further investigation on Bear Stearns Cos. Inc.'s anomalies in pricing securities, Reuters reports. The SEC said its reasons were confidential. "The Commission does not disclose the existence or nonexistence of an investigation or information generated in any investigation unless made a matter of public record in proceedings brought before the Commission or the courts," Reuters quotes SEC Chairman Christopher Cox in an April 16 letter. The letter was a response to a congressional request asking the SEC why it withdrew from the probe. As reported in the Troubled Company Reporter on March 20, 2008, the SEC disclosed that the federal regulator is considering potential investigation into Bear Stearns' conduct prior to the investment bank's acquisition agreement with J.P. Morgan Chase & Co. The SEC's Division of Enforcement wrote a letter concerning investigations and potential future inquiries into conduct and statements by Bear Stearns before the public announcement of the transaction with JPMorgan. The Division investigates possible violations of the securities laws as appropriate, said the SEC. Among the things the Division looks for are potential indications of insider trading or manipulation of markets through the dissemination of false or misleading information to investors by companies or other market participants. The SEC brings enforcement actions when it concludes the securities laws have been violated. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BEAR STEARNS COMMERCIAL: Fitch Affirms Low-B Ratings on Six Certs. ------------------------------------------------------------------ Fitch Ratings affirmed Bear Stearns Commercial Mortgage Securities Trust 2007-TOP26, commercial mortgage pass-through certificates: -- $65.1 million class A-1 at 'AAA'; -- $177 million class A-2 at 'AAA'; -- $65.4 million class A-3 at 'AAA'; -- $78 million class A-AB at 'AAA'; -- $91.9 million class A-4 at 'AAA'; -- $50.1 million class A-1A at 'AAA'; -- $210.6 million class A-M at 'AAA'; -- $160.6 million class A-J at 'AAA'; -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $42.1 million class B at 'AA'; -- $18.4 million class C at 'AA-'; -- $29 million class D at 'A'; -- $15.8 million class E at 'A-'; -- $18.4 million class F at 'BBB+'; -- $18.4 million class G at 'BBB'; -- $18.4 million class H at 'BBB-'; -- $2.6 million class J at 'BB+'; -- $2.6 million class K at 'BB'; -- $5.3 million class L at 'BB-'; -- $2.6 million class M at 'B+'; -- $5.3 million class N at 'B'; -- $2.6 million class O at 'B-'. Fitch does not rate the $15.8 million class P. The rating affirmations are the result of stable performance since issuance. As of the April 2008 remittance report, the transaction has paid down 0.5% to $2.095 billion from $2.106 billion at issuance. There have been no delinquencies since issuance. Fitch reviewed the most recent servicer provided operating statement analysis reports for the 14 shadow rated loans in the transaction: One Dag Hammerskjold Plaza (7.2%), Fulbright Tower (3.9%), 503 Broadway (1.4%), Harmony Marketplace (1.4%), Stony Point East (1%), Stony Point West (0.3%), Fox Chapel Shopping Center (0.7%), Byram Plaza Shopping Center (0.7%), HSBC Sioux Falls (0.7%), 38-05 to 38-17 and 37-27/29 Main Street (0.5%), 213 West 35th Street (0.5%), Bridgeport Stop & Shop II (0.5%), Westover Apartments (0.3%) and Whole Foods Santa Monica (0.3%). Based on their stable performance since issuance the loans maintain their investment grade shadow ratings. One Dag Hammerskjold Plaza (7.2%) is a 782,928 square foot (sf) office property located on 2nd Avenue between 47th and 48th Streets in the Grand Central and UN submarket of Manhattan. Major tenants include Interpublic Group, Telerep, and Babcock & Brown, L.P. As of Jan. 1, 2008, occupancy at the property is 97% compared to 97.1% at issuance. Fulbright Tower (3.9%) is a 1.2 million sf office tower located in the Houston, Texas central business district and is part of the Houston Center Complex, also known as 3 Houston Center. The property is also within walking distance to the George R. Brown Convention Center, Minute Maid Park, Toyota Center, and Hilton Americas and Four Seasons Hotels. Major tenants include Fulbright & Jaworski, Hydro Gulf of Mexico and Key Energy Services. As of March 26, 2008 occupancy has increased to 91.3% from 89% at issuance. Fitch will continue to monitor the performance of the shadow rated loans as year end 2007 financial statements become available. BEAR STEARNS TRUST: Moody's Cuts Ratings on Higher Delinquencies ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of 98 tranches from 18 Alt-A transactions issued by Bear Stearns. Fifty seven tranches remain on review for possible further downgrade. Additionally, 34 tranches were placed on review for possible downgrade, and the ratings on 5 tranches were confirmed. The collateral backing these transactions consists primarily of first-lien, fixed and adjustable-rate, Alt-A mortgage loans. 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: Bear Stearns ARM Trust 2005-6 -- Cl. B-2, Downgraded to A3 from A2 -- Cl. B-3, Downgraded to Ba1 from Baa2 Issuer: Bear Stearns ARM Trust 2005-12 -- Cl. II-1-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-3-A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-4-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-5-A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-B-1, Downgraded to Aa3 from Aa2 -- Cl. I-B-2, Downgraded to Baa1 from A2 -- Cl. I-B-3, Downgraded to Ba3 from Baa3 -- Cl. II-B-1, Downgraded to Baa1 from Aa2 -- Cl. II-B-2, Downgraded to B1 from A2 -- Cl. II-B-3, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC5 -- Cl. I-B-1, Confirmed at Baa1 -- Cl. I-B-2, Confirmed at Baa2 -- Cl. I-B-4, Downgraded to Ca from Ba2 -- Cl. I-B-3, Downgraded to B1 from Baa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC6 -- Cl. I-B-2, Confirmed at Baa2 -- Cl. I-B-3, Confirmed at Baa3 -- Cl. I-B-4, Downgraded to Caa3 from Ba2 -- Cl. II-B-2, Downgraded to Ba3 from Baa1 Issuer: Bear Stearns Asset Backed Securities Trust I Series 2005- AC7 -- Cl. B-2, Confirmed at Baa2 -- Cl. B-3, Downgraded to Ba2 from Baa3 -- Cl. B-4, Downgraded to Ca from Ba2 Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC8 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, 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, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-7, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-8, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-9, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-10, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. PO, Placed on Review for Possible Downgrade, currently Aaa Issuer: Bear Stearns Asset Backed Securities I Trust 2005-AC9 -- Cl. M-1, Downgraded to Aa3 from Aa2 -- Cl. M-2, Downgraded to Baa1 from A2 -- Cl. M-3, Downgraded to Ba1 from A3 -- Cl. B-1, Downgraded to Ba2 from Baa1 -- Cl. B-2, Downgraded to B3 from Baa2 -- Cl. B-3, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-4, Downgraded to Ca from Caa2 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC1 -- Cl. II-1A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. II-2X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-M-2, Downgraded to Baa1 from A2 -- Cl. I-M-3, Downgraded to Ba2 from A3 -- Cl. I-B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-3, Downgraded to Ca from Ba3 -- Cl. I-B-4, Downgraded to Ca from Caa3 -- Cl. II-B-1, Downgraded to Ba3 from Aa2 -- Cl. II-B-2, Downgraded to B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. II-B-3, Downgraded to Ca from B3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC2 -- Cl. II-1A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-5, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-1A-6, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-2A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-PO, Placed on Review for Possible Downgrade, currently Aaa -- Cl. II-X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. I-M-2, Downgraded to Baa1 from A2 -- Cl. I-M-3, Downgraded to Ba3 from A3 -- Cl. I-B-1, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. I-B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. I-B-3, Downgraded to Ca from B1 -- Cl. II-B-1, Downgraded to Ba2 from Aa2 -- Cl. II-B-3, Downgraded to Ca from B3 -- Cl. II-B-2, Downgraded to Ca from Ba1 -- Cl. I-B-4, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC3 -- Cl. M-3, Downgraded to Baa3 from A3 -- Cl. B-1, Downgraded to B3 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from B1 -- Cl. B-4, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC4 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. M-1, Downgraded to B1 from Aa2 -- Cl. M-2, 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. B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba1 -- Cl. B-4, Downgraded to Ca from Ba3 -- Cl. B-5, Downgraded to Ca from B3 Issuer: Bear Stearns Asset Backed Securities I Trust 2006-AC5 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-3, 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, 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. B-1, Downgraded to Caa1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Caa1 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-3, Downgraded to Ca from Ba1 -- Cl. B-4, Downgraded to Ca from Ba3 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC1 -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa2 -- Cl. M-2, Downgraded to B1 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from Baa1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to B3 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. B-2, Downgraded to Ca from Ba2 -- Cl. B-3, Downgraded to Ca from B1 -- Cl. B-4, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC2 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, Placed on Review for Possible Downgrade, currently Aaa -- Cl. X, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B1 from Aa2 -- Cl. M-2, Downgraded to B1 from A3; Placed Under Review for further Possible Downgrade -- Cl. M-3, Downgraded to B2 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. M-4, Downgraded to B2 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from Ba3 -- Cl. B-3, Downgraded to Ca from Caa1 -- Cl. B-4, Downgraded to Ca from Caa2 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC3 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, 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 B2 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 B3 from Baa3; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from Ba2 -- Cl. B-3, Downgraded to Ca from Caa1 -- Cl. B-4, Downgraded to Ca from Caa2 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC4 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-3, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aaa -- Cl. M-1, Downgraded to B3 from Aa2 -- Cl. M-2, Downgraded to B3 from Ba1; Placed Under Review for further Possible Downgrade -- Cl. B-1, Downgraded to Ca from Caa1 -- Cl. B-2, Downgraded to Ca from Caa3 Issuer: Bear Stearns Asset Backed Securities I Trust 2007-AC5 -- Cl. A-4, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. A-7, Placed on Review for Possible Downgrade, currently Aa1 -- Cl. B-1, Downgraded to Ba3 from Aa2 -- Cl. B-2, Downgraded to B2 from Ba2 Issuer: Bear Stearns Mortgage Funding Trust 2006-AC1 -- Cl. A-1, Placed on Review for Possible Downgrade, currently Aaa -- Cl. A-2, 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. M-1, Downgraded to B2 from Aa2 -- Cl. M-2, Downgraded to B2 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. B-1, Downgraded to Ca from Ba1 -- Cl. B-2, Downgraded to Ca from B1 -- Cl. B-3, Downgraded to Ca from B2 -- Cl. B-4, Downgraded to Ca from B3 BENAZZI CDO: Three Classes of Notes Get Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Benazzi CDO 2005-1 Ltd.: Class Description: $20,000,000 Class A Floating Rate Notes having a Final Maturity Date in December 2040 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $50,000,000 Class B Floating Rate Notes having a Final Maturity Date in December 2040 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $30,000,000 Class C Floating Rate Notes having a Final Maturity Date in December 2040 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. BRYAN COUNTY: Moody's Holds 'Caa3' Rating on 1990A Revenue Bonds ---------------------------------------------------------------- Moody's Investors Service affirmed the Caa3 rating on the Bryan County Economic Development Authority, Oklahoma, Single Family Mortgage Revenue Refunding Bonds, Series 1990A. The amount of debt outstanding is $1,080,000. The outlook on the rating is negative. The program consists of 43 loans with an aggregate principal amount outstanding of $395,493 as of March 31, 2008 (un-audited). The trustee reports that of the $395,493, two loans totaling $21,552 were classified as being up to 60 days past due. The Caa3 rating reflects the continued deterioration of the program's financial strength. This is evidenced by the asset-to- debt ratio which is currently 0.6421, down from 0.71 as of Dec. 31, 2006 and 0.814 as of Dec. 31, 2004. Approximately 55.75% of the program's assets are invested in guaranteed investment contracts whose rate of return is less than the coupon on the bonds (8.6%), resulting in negative arbitrage. The program has historically experienced rapid prepayments of loans. The amount of bonds likely to be affected by a default is directly tied to the prepayment speed of the remaining mortgage loans as borrowers prepay on their mortgage loans, causing negative revenues for the program. The faster the prepayment speed, the greater percentage of outstanding bonds that will likely receive less than the full principal and interest amount due. The bonds are scheduled to mature on Jan. 1, 2011. Outlook The rating outlook for the bonds is negative due to the expected continued deterioration of the program's financial position. BUCHANAN SPC: Four Classes of Notes Get Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Buchanan SPC: Portfolio: Buchanan 2006-I Segregated Portfolio Class Description: $115,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Portfolio: Buchanan 2006-II Segregated Portfolio Class Description: $72,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Portfolio: Buchanan 2006-III Segregated Portfolio Class Description: $10,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Portfolio: Buchanan 2006-IV Segregated Portfolio Class Description: $4,000,000 Variable Floating Rate Notes Due 2046 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. BUFFETS HOLDINGS: Court Approves FTI as Panel's Financial Advisor ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware gave authority to the Official Committee of Unsecured Creditors of Buffets Holdings Inc. and its debtor-affiliates to retain FTI Consulting, Inc., as its financial advisors. As reported in the Troubled Company Reporter on March 5, 2008, FTI will provide consulting and advisory services, including: * assistance in the review of financial related disclosures required by the Court, including schedules of assets and liabilities, statements of financial affairs and monthly operating reports; * assistance with information and analyses required pursuant to the DIP financing including, but not limited to, preparation for hearings regarding the use of cash collateral and DIP financing; * assistance and advice to the Committee with respect to the Debtors' identification of core business assets and the disposition of assets or liquidation of unprofitable operations; * assistance with a review of the Debtors' performance of cost and benefit evaluations with respect to the affirmation or rejection of varous executory contracts and leases; * assistance regarding an evaluation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; * assistance in the review of financial information distributed by the Debtors to creditors and others, including, but not limited to, cash flow projections and budgets; * attendance at meetings and assistance in discussions with the Debtors, potential investors, banks, other secured lenders, the Committee and any other official committees organized in the Chapter 11 proceedings, the U.S. Trustee, and other parties-in-interest, as requested; * assistance in the review or preparation of information and analysis necessary for the confirmation of a plan; * assistance in the valuation of the business and review of capital structure alternatives; * assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; and * other general business consulting or other assistance as the Committee or its counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in the Chapter 11 proceeding. According to Jason D. Schauer, a representative of Levine Leichtman Capital Partners Deep Value Fund LP, co-chairperson of the Committee, the panel recognizes that FTI has a wealth of experience in providing financial advisory services in restructurings and reorganizations and enjoys an excellent reputation for services it has rendered in large and complex Chapter 11 cases. Mr. Schauer contended that the services of FTI are deemed necessary to enable the Committee to assess and monitor the efforts of the Debtors and their professional advisors to maximize the value of the Debtors' estates. Mr. Schauer told the Court that FTI is not owed any amounts with respect to prepetition fees and expenses. In exchange for its services, FTI will be paid a fixed monthly fee of $200,000, plus reimbursement of actual and necessary expenses. Upon completion of the cases, FTI will receive a completion fee of up to $1,000,000. The Completion Fee will be considered earned and payable upon: -- the confirmation of a plan of reorganization or liquidation; or -- the sale or liquidation of all or substantially all of the Debtors' assets. Michael C. Eisenband, a senior managing director of FTI, assures the Court that his firm does not represent any other entity having an adverse interest in connection with the Chapter 11 cases, and is eligible to represent the Committee under Section 1103(b) of the Bankruptcy Code. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BUFFETS HOLDINGS: Asks Court to Enjoin Workers from Pursuing Case ----------------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to issue a declaratory judgment against James Harris, individually and on behalf of a putative class of approximately 780 individuals employed by certain of the Debtors who worked in salaried restaurant management positions at HomeTown Buffet branded restaurants in California. The HTB Action In November 2004, two former employees of HomeTown Buffet, Inc., Elaine Tiffany and Shannon Whitehead, filed a complaint against HTB in the San Francisco Superior Court on their own behalf, and on behalf of the Putative Class, which matter was subsequently removed to the U.S. District Court for the Northern District of California, Oakland Division. The HTB Complaint asserts causes of action for various provisions of the California Labor Code and California Business and Professional Code. The basis for the allegations in the HTB Complaint is that HTB and OCB Restaurant Company, LLC, misclassified approximately 780 individuals employed by certain of the Debtors who worked in salaried restaurant management positions at HomeTown Buffet branded restaurants in California as "exempt" employees and as such, improperly denied the managers overtime pay in violation of California law. The HTB Complaint further alleges that HTB and OCB failed to provide the managers with required rest and meal periods, failed to provide itemized wage statements, and took illegal deductions from the class members' bonus pay. Ultimately, the parties accepted terms of a mediator's proposed settlement on March 1,2007. On August 1, 2007, Dostart Clapp Gordon & Coveney, LLP -- the Putative Class Counsel -- filed a motion with the District Court seeking preliminary approval of the proposed classwide settlement. The preliminarily approved settlement provided that the Putative Class would be certified for settlement purposes only, and that HTB and OCB would establish a $7,000,000 settlement fund to pay claims of the Putative Class, fees of Putative Class Counsel, litigation expenses, claims administration expenses, and enhancements to the individuals who served as class representatives. The preliminary approved settlement would have released various claims. On September 12, 2007, the District Court preliminarily approved the settlement subject to class approval and scheduled a final "fairness hearing" for January 22, 2008. However, on January 22, each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code, which automatically stayed any further proceedings in the HTB Action. The PAGA Action In March 2008, the Putative Class Counsel filed a complaint in the Superior Court of California, County of San Diego, against Mario O. Lee, Jane L. Binzak, and Michael A. Stout, as well as other unknown individuals who allegedly acted on behalf of HTB. The PAGA Complaint was filed on behalf of Mr. Harris, who asserts causes of action for recovery of civil penalties under Section 2698 of the California Labor Code, on his own behalf and on behalf of the same Putative Class as defined in the HTB Action. Mr. Harris alleges a right to payment from the PAGA Defendants on the basis that HTB allegedly failed to provide overtime pay, meal periods, or rest periods pursuant to the California Labor Code and Wage Order 5-2001 of the California Industrial Welfare Commission. The PAGA Complaint seeks a judgment against each defendant, jointly and severally, in the amount of (i) $50 per employee per member of the Putative Class per pay period for the alleged initial violation, (ii) $100 per member of the Putative Class per pay period for each alleged subsequent violation, (iii) an amount sufficient to recover the alleged underpaid wages, and (iv) reasonable attorney's fees and costs. Article 8 of the Certificate of Incorporation of Buffets Holdings, Inc., the ultimate parent of each of the Debtors, as well as Article 7 of the Bylaws of Buffets Holdings, Inc., provide that officers and directors are indemnified to the fullest extent authorized by Delaware law. Under California law, the Debtors have a mandatory obligation to defend all employees who acted with the actual or apparent authority of the Debtors, even if the action taken was unlawful. This obligation exists unless and until it is ultimately proven that an individual knew his or her action was unlawful. Accordingly, the Debtors have an obligation to reimburse and indemnify any and all PAGA Defendants for any costs incurred or liabilities proven in connection with the PAGA Action. PAGA Action Violates Automatic Stay Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, notes that the allegations purporting to provide the basis for the PAGA Action are similar, if not identical allegations that purported to provide the basis for the HTB Action, and requests a considerable sum from individual defendants who likely could not satisfy any judgment, if proven. The Debtors, hence, ask Judge Walrath to declare that: (a) the filing of the PAGA Action was in violation of the automatic stay pursuant to Section 362(a) of the Bankruptcy Code by exposing the Debtors to potential indemnification claims pursuant to the certificate of incorporation and bylaws of the Debtors, as well as pursuant to state law, as well as threats of vicarious liability in the PAGA Action, thus forcing the Debtors to appear and defend themselves and their employees against the PAGA Action; (b) the filing of the PAGA Action was in violation of the automatic stay by exposing the Debtors to collateral estoppel and imputed admissions that will be raised in the context of the stayed HTB Action, thus forcing the Debtors to appear and defend themselves and their employees against the PAGA Action; and (c) the continued prosecution of the PAGA Action will distract the Debtors' key personnel and frustrate the purposes of the automatic stay, thus causing irreparable harm to the Debtors' ability to reorganize. The Debtors also ask the Court to enjoin the continued prosecution of the PAGA Action and enjoin the Putative Class from commencing any lawsuit or proceeding against the Debtors or the PAGA Defendants based on the facts alleged in the HTB Action and the PAGA Action. Ms. Morgan reminds the Court that Section 362 prohibits the commencement or continuation of any actions against a debtor that were or could have been commenced prior to the banlauptcy filing, or which seek to recover for any claim that arose prior to the commencement of the banlauptcy case, or of any act to obtain possession or exercise control over the property of the debtor's estate. Although the PAGA Action does not name the Debtors as defendants, it is, in fact, the real party in interest to the litigation, Mr. Moragn says. Given the nature of the claims, the Debtors will be forced to appear and defend against the claims in order to protect their own interests, she adds. "The PAGA Action exposes the Debtors to potential indemnification obligations, as well as the threat of vicarious liability, collateral estoppel and imputed admissions," Ms. Morgan tells Judge Walrath. "Thus, failure to appear and defend could have irreparable adverse consequences on the Debtors' estates." Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CALAMOS INVESTMENTS: To Refinance $939MM of Fund's Pref. Stocks --------------------------------------------------------------- Calamos Investments intends to refinance an aggregate of $939 million of the outstanding auction rate preferred securities issued by two of its closed-end funds. The funds are the Calamos Global Total Return Fund and the Calamos Strategic Total Return Fund. "We have worked very hard to structure a solution that makes sense for each fund and all shareholders," John P. Calamos, Sr., the chairman, chief executive officer and co-chief investment officer of Calamos Investments, stated. "We continue to work toward solutions across our entire closed-end fund complex and hope to have additional statements in the weeks to come." Calamos has secured an alternative form of borrowing that will enable, based on current market conditions, CGO to redeem all of its $59 million of outstanding ARPs and CSQ to redeem approximately 81.5% or $880 million of its outstanding ARPs. The aggregate $939 million in refinancing represents approximately 41% of the total auction rate preferred outstanding in the five Calamos closed-end funds. Upon completion of the refinancings, which have been approved by the board of trustees of both CGO and CSQ, the leverage ratio for each of the funds is not expected to materially change and the funds will continue to meet the asset coverage requirements of the Investment Company Act of 1940. Since the amount of refinancing for CSQ is less than the total amount outstanding, this refinancing will take place pro rata by auction series. It is important to note that the Depository Trust Company, the securities' holder of record, will determine how to allocate this partial redemption of shares among each participant broker-dealer account. Each participant broker- dealer, as nominee for underlying beneficial owners or street name shareholders, in turn will determine how redeemed shares are allocated among its beneficial owners. The data will show the shares outstanding per series and the number that the fund will redeem via this refinancing. a) Auction Series: Monday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 b) Auction Series: Tuesday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 c) Auction Series: Wednesday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 d) Auction Series: Thursday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 e) Auction Series: Friday Shares Outstanding: 7,040 Percent to be Redeemed: 81.5% Amount to be Redeemed: $143,400,000 f) Auction Series: A (28-Day) Shares Outstanding: 4,000 Percent to be Redeemed: 81.5% Amount to be Redeemed: $81,500,000 g) Auction Series: B (28-Day) Shares Outstanding: 4,000 Percent to be Redeemed: 81.5% Amount to be Redeemed: $81,500,000 CGO and CSQ expect to begin issuing redemption notices in the next several days and redemptions will coincide with the completion of the refinancing transaction. Calamos acknowledges that there is still much work to be done and intends to continue aggressively pursuing refinancing solutions across all funds. With respect to its other three funds, Calamos Convertible Opportunities and Income Fund, Calamos Convertible and High Income Fund and Calamos Global Dynamic Income Fund, not affected by this transaction, the company is working hard on financing solutions and are in advanced stages of negotiations with lenders. "We have over 30 years of experience investing through difficult market environments, but this liquidity crisis has presented unique challenges," said Mr. Calamos. "We continue to monitor developments closely. We maintain a high degree of confidence in the long-term positioning of the Calamos portfolios, and will seek to capitalize on the opportunities that volatile markets often bring." About Calamos Investments Headquartered in Naperville, Illinois, Calamos Investments -- http://www.calamos.com-- is a diversified investment firm offering equity, fixed-income, convertible and alternative investment strategies, among others. The firm serves institutions and individuals via separately managed accounts and a family of open-end and closed-end funds, providing a risk-managed approach to capital appreciation and income-producing strategies. CASAS INVESTMENTS: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Casas Investments, Inc. 5601 East Slauson Avenue Commerce, CA 90040 Bankruptcy Case No.: 08-4857 Chapter 11 Petition Date: April 13, 2008 Court: Central District of California (Los Angeles) Debtor's Counsel: Steven Earl Smith, Esq. 20969 Ventura Blvd. Ste 230 Woodland Hills, CA 91364 Phone: 818-430-7770 E-mail: sesmithesq@aol.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hanmi Bank $672,935 Commercial Loan Dept. secured value 850,000 3660 Wilshire Blvd. Ste. 1050/1034 Los Angeles, CA 90010 CASSANDRA THOMAS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Cassandra Faye Thomas 514-C Woodrow Wilson Jackson, MS 39296 Bankruptcy Case No.: 08-01215 Chapter 11 Petition Date: April 14, 2008 Court: Southern District of Mississippi (Jackson Divisional Office) U.S. Trustee: R. Michael Bolen 100 W. Capitol St. Suite 706 Jackson, MS 39269 Phone: (601) 965-5241 Debtor's Counsel: Paul Mathis, Jr., Esq. 365 West Reed Rd. P.O. Box 936 Greenville, MS 38702 662-332-6660 Fax : 662-332-6668 E-mail: paulmathis@bellsouth.net Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million The Debtor did not file a list of its largest unsecured creditors. CAVTEL HOLDINGS: Operating Challenges Cue Moody's Rating Reviews ---------------------------------------------------------------- Moody's Investors Service placed the ratings of CavTel Holdings, LLC.'s under review for a possible downgrade. The review will address Cavalier's B3 corporate family rating, the B3 rating on the senior secured credit facilities and the Caa1 probability of default rating. The decision to put the ratings under review reflects Cavalier's continuing operational challenges in integrating TalkAmerica Holdings, which Cavalier acquired in December 2006, and the highly competitive environment in Cavalier's markets. The weaker sales to residential and commercial customers, the high churn of residential customers and the related bad debt expenses have contributed to cash flow falling short of the rating agency's previous projections. As a result of the decline in the Company's EBITDA in 2007, Cavalier is on the verge of violating financial covenants under its credit facility. The Company has initiated an amendment process with the bank group, and in Moody's view, the lenders will likely conduct an analysis of the company's business model as a condition of the amendment approval. Moody's also notes that Cavalier continues to realize cost synergies from the integration of Talk America, and may have flexibility in slowing its capital spending to preserve liquidity and generate positive free cash flow in 2008. Moody's will monitor the developments with the bank group. The conclusion of the review will be greately influenced by the outcome of the amendment process, as the Company's fundamental credit profile still exhibits B3 rating characteristics. However, as the history of CLECs restructurings has demonstrated a rapid deterioration of value of companies operating in bankruptcy, in the event that the Company does not come to terms with its lenders on an amendment, Moody's may downgrade Cavalier's ratings by more than one notch. Issuer: CavTel Holdings, LLC On Review for Possible Downgrade: -- Probability of Default Rating, Placed on Review for Possible Downgrade, currently Caa1 -- Corporate Family Rating, Placed on Review for Possible Downgrade, currently B3 -- $20M Senior Secured Bank Credit Facility Due 2011, Placed on Review for Possible Downgrade, currently B3 -- $415M Senior Secured Bank Credit Facility Due 2012, Placed on Review for Possible Downgrade, currently B3 Outlook Actions: -- Outlook, Changed To Rating Under Review From Stable Moody's review will focus on a) the Company's ability to successfully obtain an amendment from its lenders resetting the covenant levels to give it operating flexibility over the next 12 months, b) Moody's comfort with the company's business plan going forward, including rationalizing its residential and business sales strategies, c) the forward capital spending required to support the residential business, and d) the company's path to restore free cash flow growth. Cavalier is a competitive local exchange carrier based in Richmond, Virginia. C-BASS CBO: Five Classes of Notes Acquire Moody's Rating Cuts ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by C- Bass CBO XIX Ltd.: Class Description: $292,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due October 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $100,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due October 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's has downgraded these notes: Class Description: $42,000,000 B Third Priority Senior Secured Floating Rate Notes Due October 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $23,000,000 Class C Fourth Priority Secured Floating Rate Deferrable Interest Notes Due October 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $10,000,000 Class D Fifth Priority Secured Floating Rate Deferrable Interest Notes Due October 2047 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CDC MORTGAGE: Eight Classes of Certs. Get S&P's Rating Downgrades ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on eight classes of mortgage pass-through certificates from CDC Mortgage Capital Trust's series 2002-HE2 and 2003-HE4. In addition, S&P affirmed its ratings on the remaining classes from these two transactions. The lowered ratings reflect the deterioration of available credit support for these transactions, combined with projected credit support percentages that are insufficient to maintain the ratings at their previous levels. S&P's projected credit support percentages are based on the dollar amount of loans in the delinquency pipeline. The failure of excess interest to cover monthly losses has resulted in the complete erosion of overcollateralization for these transactions. This O/C deficiency caused principal write-downs to both the B-1 (2002-HE2) and B-3 (2003-HE4) classes, which prompted us to downgrade them to 'D'. As of the March 25, 2008, remittance date, cumulative losses for series 2002-HE2 were 3.49% of the original pool balance. Total delinquencies were 45.97% of the current pool balance and severe delinquencies (90-plus days, foreclosures, and REOs) were 29.88% of the current pool balance. Cumulative losses for series 2003-HE4 were 1.90% of the original pool balance. Total and severe delinquencies were 26.40% and 18.34% of the current pool balance, respectively. The affirmations reflect current and projected credit support percentages that are sufficient to maintain the ratings at their current levels. Credit support for these classes averaged 72.5% of the current pool balance. In comparison, the ratio of current credit enhancement to original enhancements averaged 3.38x. A combination of subordination, excess interest, and O/C (prior to its complete erosion) provide credit enhancement for these transactions. The collateral supporting these series consists of a subprime pool of fixed- and adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties. Ratings Lowered CDC Mortgage Capital Trust Mortgage pass-through certificates Rating ------ Series Class To From ------ ----- -- ---- 2002-HE2 M-1 BB- AA 2002-HE2 M-2 CCC A 2002-HE2 B-1 D CCC 2003-HE4 M-2 BB