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/raid1/www/Hosts/bankrupt/TCR_Public/080505.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, May 5, 2008, Vol. 12, No. 106 Headlines ACACIA AUTOMOTIVE: Killman Murrell Expresses Going Concern Doubt ACAS CRE: Moody's Retains Low-B Ratings on Three Classes of Notes ACE HARDWARE: Moody's Designates 'Ba3' Corporate Family Rating ACE SECURITIES: Fitch Cuts Ratings to BB- on Five Cert. Classes AES CORP: Unit Gets Fitch 'B-' Foreign Currency ID Rating AIRBORNE HEALTH: Moody's Junks Ratings on Continuing Legal Issues ALASKA AIR: Weakening Fin'l Profile Cues S&P to Cut Ratings to B+ AMERICAN HOME: Court Denies Wells Fargo's Motion to Lift Stay AMERICAN HOME: Kohl, et al. Want Stay Lifted; Class Action Settled AMERICAN HOME: BoNY, et al. Seek to Foreclose on Properties AMERICAN HOME: Court Approves Stipulation with Calyon New York AMERICAN IRONHORSE: Court Chooses Dealer as Stalking-Horse Bidder AMERIQUEST MORTGAGE: Fitch Cuts Ratings on $399.9MM Certificates AMPEX CORPORATION: Shareholder Wants Equity Committee Appointed ARGENT SECURITIES: Fitch Lowers Ratings on $83.1MM Certificates ASARCO LLC: Wants to Employ Additional Consulting Experts ASARCO LLC: Wants to Pay Lehman $1 Million at the End of Case ASIA GLOBAL: Zhong Yi Raises Going Concern Doubt Over Losses BAG 'N BAGGAGE: Case Summary & 21 Largest Unsecured Creditors BI-LO LLC: No Rated Debt Outstanding; Moody's Withdraws Ratings BISHOP BYRNE: Case Summary & Three Largest Unsecured Creditors BLOUNT INT'L: March 31 Balance Sheet Upside-Down by $43.8 Million BLUE BELL: Moody's Reviews 'Caa1' Rating on $18.75 Mil. Notes C-BASS CBO: Fitch Junks Ratings on Four Note Classes C-BASS CBO: Continued Credit Decline Cues Fitch to Junk Ratings CATHOLIC CHURCH: Judge Jackwig Confirms Davenport's Plan CBA COMMERCIAL: Asset Liquidation Cues S&P to Put Default Rating CENTRAL GARDEN: Board Director Bruce Westphal Retires CERULLO ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors CHARMING SHOPPES: Demanded Documents from Investors, Post Says CHEYNE HIGH: Moody's Downgrades Ratings on Four Classes of Notes CHILDREN'S TRUST: Fitch Puts 'BB' Rating on $56,875,888 Bonds CHRYSLER LLC: Seeks to Sell Two Michigan Axle Plants for $400 Mil. CIMARRON CDO: Moody's Reviews Low-B Ratings on Two Note Classes CINCINNATI BELL: Earns $12.9 Million in First Qtr. Ended March 31 CKRUSH INC: Rosenberg Rich Expresses Going Concern Doubt COMM 2005-C6: S&P Downgrades Ratings on 10 Certificate Classes COMM 2005-LP5: Credit Support Erosion Cues S&P's Rating Downgrades COMSTOCK RESOURCES: S&P Affirms 'B+' Rating on Bois-Stone Deal CONEXANT SYSTEMS: Terminates Daniel Artusi as President & CEO CONEXANT SYSTEMS: Names D. Scott Mercer as Chief Executive officer CONSTAR INT'L: Customer Losses Spur Houston Facility Closure COUNTRYWIDE FINANCIAL: To Testify Before Senate on Bankr. Abuses COUNTRYWIDE FINANCIAL: Unveils Funding with BofA for Homeowners CRYSTAL RIVER: Moody's Confirms Ratings of Nine Classes of Notes DAN RIVER: Organizational Meeting to Form Committees on May 6 DIAGNOSTIC IMAGING: S&P Upgrades Corporate Credit Rating to 'B+' DRAKE MANAGEMENT: To Liquidate $2.5 Billion Investment Fund DUKE FUNDING: Poor Credit Quality Prompts Moody's Rating Cuts DUKE FUNDING: Moody's Junks Ratings on $78 Mil. Notes From 'Ba1' EDUCATION RESOURCES: Trustee Appoints Five-Member Creditors Panel ELEPHANT TALK: Kabani & Co Expresses Going Concern Doubt ENHANCED MORTGAGE: Fitch Cuts Rating on $6MM Notes to CCC from BBB ENHANCED MORTGAGE: Fitch Junks Rating on $6MM Class A-4 Notes EQUAL-CHLOR LLC: Can Access Prudent Insurance's $10 Mil. Facility EXCELLO ENGINEERED: Case Summary & 20 Largest Unsecured Creditors FEDDERS CORP: Wants to Sell Air Quality Biz for $25 Million FORD MOTOR: To Offer Buyouts to 1,300 Chicago & Louisville Workers FOX TROT: Three Classes of Notes Acquire Moody's Junk Ratings GENERAL MOTORS: Total April 2008 Sales Decrease 16 Percent GLOBAL ENVIRONMENTAL: Files Amended Fiscal Year 2006 Financials GOLDMAN SACHS: Fitch Chips Ratings on $195.2MM Certificates HEALTHSOUTH CORP: Buying Rehabilitation Hospital of South Jersey HERCULES OFFSHORE: S&P Holds 'BB' Rating on $1.15 Bil. Facilities HOME INTERIORS: Wants To Access NexBank's Cash Collateral HOME INTERIORS: Files Disclosure Statement and Chapter 11 Plan IKON OFFICE: Moody's Maintains Corporate Family Rating at 'Ba2' INDEVUS PHARMA: March 31 Balance Sheet Upside-Down by $101 Million INTERPUBLIC GROUP: Affiliate Pays $12MM as Settlement with SEC ISCO INT'L: Posts $2.8 Million Net Loss in 1st Qtr. Ended March 31 JONES APPAREL: Net Income Drops to $19MM in Quarter ended April 5 JONES APPAREL: S&P Places 'BB+' Corp. Credit Under Negative Watch JOURNAL REGISTER: Wants to Cease SEC Listing, Suspend Fin'l Filing KENTUCKY ECONOMIC: S&P Holds 'BB-' Rating; Revises Outlook to Neg. KIMBALL HILL: Bankruptcy Filing Sparks Repayment Obligations KIMBALL HILL: Court Okays Use of Lenders' Cash Collateral KIMBALL HILL: Gets Interim Court Nod to Obtain Intercompany Loan KIMBALL HILL: Can Employ Kurtzman Carson as Claims Agent LEGENDS GAMING: S&P Withdraws Ratings After Bankruptcy Filing LIFE SCIENCES: March 31 Balance Sheet Upside-Down by $21.8 Million LINEN 'N THINGS: Files for Chapter 11 Protection in Delaware LINEN 'N THINGS: Case Summary & 30 Largest Unsecured Creditors LINEN 'N THINGS: List of 120 Underperforming Stores to be Closed LINEN 'N THINGS: Organizational Meeting Scheduled for May 9 LIQUIDMETAL TECH: Choi Kim & Park Expresses Going Concern Doubt LOS ROBLES: Eroding Credit Quality Cues Moody's Rating Downgrades MACKLOWE PROPERTIES: Topland Group Eyes Manhattan Properties MORGAN STANLEY: S&P Downgrades Ratings on Four Classes of Certs. MORGAN STANLEY: Fitch Cuts Rating on $64.9MM Certificates to BB+ NEW CENTURY: Committee Calls For Investigation Over Disputes NEW CENTURY: Plan Confirmation Hearing Slated for May 7 NORTEL NETWORKS: Net Loss Widens to $138MM in 2008 First Quarter PARK PLACE: Fitch Downgrades Ratings on 37 Certificate Classes PARMALAT SPA: Settles Securities Class Action for $40,000,000 PHILADELPHIA AUTHORITY: S&P Removes Watch on Renegotiation Success PLASTECH ENGINEERED: Inks MOU with GM for Exit Financing PLASTECH ENGINEERED: Court Okays $87 Mil. Loan from Key Customers PULTE HOMES: Charge-Driven Loss Prompts S&P to Cut Rating to BB QSGI INC: Losses and Default Cue RubinBrown's Going Concern Doubt QUEBECOR WORLD: Names Randy Benson as Chief Restructuring Officer QUEST TRUST: Fitch Cuts Ratings on Two Certificate Classes to B RADIAN GROUP: Amends Credit Agreement; Extends Waiver Until May 15 REGAL ENTERTAINMENT: Closes $210MM Buyout of Consolidates Theatres RESIDENTIAL ASSET: Fitch Takes Rating Actions on Various Classes RESIDENTIAL ASSET: Fitch Chips Ratings on $405.3MM Certificates REVLON INC: March 31 Balance Sheet Upside-Down by $1.1 Billion ROBECO HIGH: Collateral Deterioration Cues Fitch to Chip Ratings RYLAND GROUP: Stockholders Approve Executive Incentive Plans RYLAND GROUP: S&P Chips Rating to BB+ on Weak Housing Expectations SCOTTISH RE: S&P Retains 'B' Credit Rating Under Negative Watch SEMOTUS SOLUTIONS: Amex Delists Common Stock Effective May 12 SIRVA INC: Court Extends Receivables Sale Agreement Expiry Date SPRINT NEXTEL: May Consider Deutsche Telekom's Takeover Proposal ST. JOHN: S&P Holds 'B+' Rating and Revises Outlook to Stable STONE ENERGY: Inks Merger Deal With Boise d'Arc for $1.8 Billion STONE ENERGY: Moody's Keeps 'B3' Ratings on Bois d'Arc Acquisition STONE ENERGY: Bois d'Arc Deal Cues S&P to Hold 'B+' Credit Rating STURGIS IRON: Court OKs Bidding Procedures for Sale of All Assets SUN MICROSYSTEMS: Eliminates 2,500 Jobs to Save $220MM in Costs TERWIN MORTGAGE: Moody's Downgrades Ratings on Seven Certificates TERWIN MORTGAGE: S&P Downgrades Ratings on Three Classes of Certs. TOUSA INC: Seeks to Modify Sale Order to Facilitate Funding TOUSA INC: Creditors Panel Wants to Retain JH Cohn as Accountant TOUSA INC: Committee Seeks to Tap Robert Charles as Advisor TOUSA INC: Oakmont Wants Stay Lifted to Terminate Purchase Deal TRAVELPORT HOLDINGS: S&P Revises Outlook to Neg. on Weak Financial UBS MORTGAGE: Fitch Chips Ratings to 'BB' on Four Cert. Classes UNIQUE DEPENDABLE: Case Summary & 60 Largest Unsecured Creditors UTAH 7000: Credit Suisse Balks at $50MM Loan from Pivotal Finance VERTIS INC: Moody's Changed Probability of Default Rating to Ca/LD VISTEON CORP: March 31 Balance Sheet Upside-Down by $136 Million WASHINGTON MUTUAL: Fitch Holds Ratings on 30 Classes of Securities WILBURGENE: Case Summary & 10 Largest Unsecured Creditors WORLDGATE COMMS: Marcum & Kliegman Expresses Going Concern Doubt ZIFF DAVIS: Wants to Sign New Contracts with CRO & Former CEO ZIFF DAVIS: Wants to Assume FileFront Purchase Agreement ZIFF DAVIS: Committee Wants to Retain Perella as Advisor ZIFF DAVIS: Committee Allowed to Retain Special Conflicts Counsel Z TRIM HOLDINGS: Blackman Kallick Expresses Going Concern Doubt * Fitch Says REITs Turns to Bank Term Loan as Refinancing Vehicle * Moody's Says Outlook for Automotive Parts Suppliers is Negative * Moody's Maintains Negative Outlook on Homebuilding Industry * S&P Lowers Ratings on 184 Classes of US RMBS from 52 Transaction * S&P Downgrades Ratings on 272 Classes From 56 RMBS Transactions * S&P Reports Upgrade Potential Stalls In Rough Credit Environment * S&P Halts Rating Process for Closed-End Second-Lien Loans * BOND PRICING: For the Week of Apr. 28 - May 2, 2008 ********* ACACIA AUTOMOTIVE: Killman Murrell Expresses Going Concern Doubt ---------------------------------------------------------------- Killman, Murrell & Company, P.C., raised substantial doubt on the ability of Acacia Automotive, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor stated that the company has suffered recurring losses from operations and its limited capital resources. The company posted a net loss of $3,850,881 on total revenues of $423,404 for the year ended Dec. 31, 2007, as compared with a net loss of $944,973 on $0.00 total revenues in the prior year. At Dec. 31, 2007, the company's balance sheet showed $1,633,984 in total assets, $542,953 in total liabilities and $1,091,031 in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $447,063 in total current assets available to pay $510,875 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?2ae5 About Acacia Automotive Acacia Automotive, Inc., (Other OTC: ACCA.PK) -- http://www.acacia.bz-- intends to acquire automotive auctions focusing on whole vehicle automobiles and light trucks in the United States and Canada. The company was founded in 1984. It was formerly known as Gibbs Construction, Inc. and changed its name to Acacia Automotive, Inc. in February 2007. Acacia Automotive, Inc., is based in Brentwood, Tenn. ACAS CRE: Moody's Retains Low-B Ratings on Three Classes of Notes ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of 17 classes of Notes issued by ACAS CRE CDO 2007-1, Ltd.: -- Class A, $181,480,000, Floating Rate Notes Due 2052, affirmed at Aaa -- Class B, $86,330,000, Floating Rate Notes Due 2052, affirmed at Aa1 -- Class C-FL, $41,000,000, Floating Rate Notes Due 2052, affirmed at Aa2 -- Class C-FX, $11,850,000, Fixed Rate Notes Due 2052, affirmed at Aa2 -- Class D, $25,250,000, Floating Rate Notes Due 2052, affirmed at Aa3 -- Class E-FL, $23,785,000, Floating Rate Deferrable Interest Notes Due 2052, affirmed at A1 -- Class E-FX, $23,785,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at A1 -- Class F-FL, $32,005,000, Floating Rate Deferrable Interest Notes Due 2052, affirmed at A2 -- Class F-FX, $32,005,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at A2 -- Class G-FL, $22,185,000, Floating Rate Deferrable Interest Notes Due 2052, affirmed at A3 -- Class G-FX, $26,555,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at A3 -- Class H, $64,600,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at Baa1 -- Class J, $41,110,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at Baa2 -- Class K, $42,270,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at Baa3 -- Class L, $62,240,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at Ba1 -- Class M, $35,230,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at Ba2 -- Class N, $5,870,000, Fixed Rate Deferrable Interest Notes Due 2052, affirmed at Ba3 Moody's is affirming all Notes above due to overall stable pool performance. As of the March 31, 2008 distribution date, the transaction has an aggregate collateral principal balance of $1,174.6 million, the same as the issuance. The Notes are currently collateralized by 117 classes of CMBS securities from 21 separate transactions (99.0% of the pool balance), and 4 classes of Re-Remic CRE CDO securities from one transaction (1.0%). Since issuance, among the 74 Moody's rated CMBS classes (40.1%), there have been no upgrades and four downgrades; there have been no rating changes to Re-Remic CRE CDO securities (1.0%). Credit estimates were performed on the 43 non-Moody's rated CMBS classes (58.9%). There have been no realized losses. Moody's uses a weighted average rating factor as an overall indicator of the credit quality of a CDO transaction. Based on Moody's analysis, the current WARF is 4,704 compared to 4,585 at issuance. Moody's reviewed the ratings or performed credit estimates on all the collateral supporting the Notes. The distribution is as follows: Baa1-Baa3 (0.9%, same as at issuance), Ba1-Ba3 (30.5% compared to 31.3% at issuance), B1-B3 (22.6% compared to 23.6% at issuance), and Caa1-NR (46.0% compared to 44.3% at issuance). The CMBS securities are from pools securitized between 2005 and 2007. The two largest vintage exposures are 2006 (62.6%) and 2007 (25.8%). The five largest CMBS exposures are CD 2007-CD4 (12.5%), JPMCC 2005-LDP5 (11.7%), WBCMT 2006-C23 (11.2%), WBCMT 2006-C28 (8.0%), and BACM 2007-1 (6.6%). ACE HARDWARE: Moody's Designates 'Ba3' Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service assigned a Ba3 first time corporate family rating to Ace Hardware Corporation in connection with its new financing package. These ratings are subject to review of final documentation, and assume the financing successfully closes as outlined to Moody's. The outlook is stable. First time ratings assigned are: -- Corporate family rating of Ba3; -- Probability of default rating of Ba3, and -- $300 million senior secured notes maturing 2016 at Ba2 (LGD 3, 37%). The Ba3 corporate family rating reflects Ace's favorable position in the home improvement and hardware segment of retail, leverage that is moderate for the rating category, and liquidity that will markedly improve as a result of this transaction. These factors are balanced against a fiercely-competitive operating environment that is being stressed by weak macroeconomic factors, particularly housing related, and the ongoing remediation of internal controls, particularly inventory accounting. Ace is a significant player in the convenience sub-segment of the home improvement and hardware segment of retail, with its network of 3,100 members collectively operating more than 4,600 retail stores in all 50 states and over 60 foreign countries. This member store network generates $10 billion in retail sales, with Ace's wholesale sales to these members at $4 billion. Despite the presence of Home Depot (Baa1/Prime-2) and Lowe's (A1 / Prime-1), which combined generate almost $130 billion of revenue, home improvement and hardware remains a fairly-fragmented segment of retail, especially the convenience hardware sub-segment. The new financing package will consist of the Ba2-rated $300 million senior secured notes, as well as a $300 million unrated senior secured five year revolving ABL credit facility that will be undrawn at closing. These facilities, as well as excess cash on hand, will repay $131 million in current revolver borrowings, redeem $184 million in private placement notes, and pay attendant fees and expenses. The revolver will have a first lien on accounts receivable and inventory, and a second lien on other business assets. The Ba2-rated senior secured notes will have a first lien on fixed assets with first mortgages on real estate with an appraised value of $293 million, a first lien on capital stock and intangibles, including the Ace trademark, and second liens on accounts receivable and inventory. Ace Hardware Corporation, headquartered in Chicago, Illinois, is a cooperative with over 3,100 members that operate 4,600 stores in the U.S. and over 60 foreign countries. It generated merchandise sales to its members of $4 billion for fiscal 2007. ACE SECURITIES: Fitch Cuts Ratings to BB- on Five Cert. Classes --------------------------------------------------------------- Fitch Ratings has taken rating actions on 7 Ace Securities Corporation mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed from Rating Watch Negative. Affirmations total $317.8 million and downgrades total $148.0 million. Additionally, $5.7 million was placed on Rating Watch Negative. Ace 2004-SD1 -- $35.0 million class A-1 affirmed at 'AAA'; -- $5.4 million class M-1 affirmed at 'AA'; -- $2.7 million class M-2 affirmed at 'A'; -- $2.4 million class M-3 affirmed at 'BBB'; -- $0.7 million class M-4 affirmed at 'BBB-'; Ace 2005-SD1 -- $10.5 million class A-1 affirmed at 'AAA'; -- $15.3 million class M-1 affirmed at 'AA'; -- $7.8 million class M-2 affirmed at 'A'; -- $7.1 million class M-3 downgraded to 'BBB-' from 'BBB'; -- $1.9 million class M-4 downgraded to 'BB-' from 'BBB-'; Ace 2005-SD2 -- $12.2 million class A-1 affirmed at 'AAA'; -- $18.4 million class M-1 affirmed at 'AA'; -- $10.6 million class M-2 affirmed at 'A'; -- $5.6 million class M-3 affirmed at 'BBB+'; -- $3.1 million class M-4 downgraded to 'BB+' from 'BBB'; -- $2.4 million class M-5 downgraded to 'BB-' from 'BBB-'; Ace 2005-SD3 -- $53.1 million class A affirmed at 'AAA'; -- $17.2 million class M-1 downgraded to 'A+' from 'AA'; -- $9.9 million class M-2 downgraded to 'BBB-' from 'A'; -- $4.6 million class M-3 downgraded to 'BB' from 'BBB+'; -- $2.3 million class M-4 downgraded to 'BB' from 'BBB'; -- $1.7 million class M-5 downgraded to 'BB-' from 'BBB-'; -- $0.1 million class B-1 downgraded to 'B' from 'BB'; Ace 2006-SD1 -- $28.2 million class A-1B affirmed at 'AAA'; -- $18.2 million class M-1 downgraded to 'A+' from 'AA'; -- $10.7 million class M-2 downgraded to 'BBB+' from 'A+'; -- $6.4 million class M-3 downgraded to 'BBB-' from 'A'; -- $2.6 million class M-4 downgraded to 'BB+' from 'A-'; -- $3.4 million class M-5 downgraded to 'BB' from 'BBB', placed on Rating Watch Negative; Ace 2006-SD2 -- $33.2 million class A affirmed at 'AAA'; -- $18.1 million class M-1 downgraded to 'A+' from 'AA'; -- $11.6 million class M-2 downgraded to 'BBB-' from 'A'; -- $4.9 million class M-3 downgraded to 'BB' from 'BBB+'; -- $2.4 million class M-4 downgraded to 'BB' from 'BBB'; -- $2.2 million class M-5 downgraded to 'BB-' from 'BBB-', placed on Rating Watch Negative; Ace 2006-SD3 -- $61.7 million class A affirmed at 'AAA'; -- $15.0 million class M-1 affirmed at 'AA'; -- $9.2 million class M-2 downgraded to 'BBB' from 'A'; -- $3.8 million class M-3 downgraded to 'BB' from 'BBB+'; -- $2.2 million class M-4 downgraded to 'BB' from 'BBB'; -- $2.0 million class M-5 downgraded to 'BB-' from 'BBB-' AES CORP: Unit Gets Fitch 'B-' Foreign Currency ID Rating --------------------------------------------------------- Fitch has affirmed AES Dominicana Energia Finance, S.A.'s international foreign currency Issuer Default Ratings at 'B-'. The rating action applies to US$160 million of notes due 2015 issued by AES Dominicana. The Recovery Rating has also been affirmed at 'RR4'. The Rating Outlook is Stable. The notes are jointly and severally guaranteed by AES Dominicana's two operating companies, AES Andres B.V. and Dominican Power Partners. In addition, the notes benefit from a six-month debt- service reserve account and a US$23.5 million guarantee from AES Corp., rated 'B+' by Fitch. The 'RR4' recovery rating reflects the Dominican Republic's recovery rating cap. AES Dominicana Energia Finance S.A. operates as a subsidiary of AES Corp. AES Dominicana's ratings incorporate the risks of operating electric generation assets in the Dominican Republic, where distribution companies have historically reported poor operating performance, characterized by very high losses and low collections. The ratings also consider the electricity sector's dependence on government subsidies. Over the next few years, Fitch expects the government to continue to support the sector via subsidies and the sector to slowly recover. The recent government initiatives to re-negotiate power purchase agreements might increase cash flow generation uncertainty for generation companies. The company's credit metrics are considered very strong for the rating category and have recently improved significantly. The company's ratings are bolstered by the credit quality of the company's two main electricity generation assets, Andres and DPP. On a combined basis, the company reported strong financial performance during 2007. The company generated approximately US$66.8 million of EBITDA and reported an interest coverage, measured by EBTIDA to interest expense of 3.7 times, and a leverage ratio, measured by total debt-to-EBITDA of 2.6(x). Although the company's cash flow generation during 2007 was strong, the company's cash position decrease to US$53.4 million from US$72.5 million as of year end 2006, due primarily to an intercompany loan interest payment of US$38 million coupled with a US$10 million dividend payment. Andres and DPP enjoy a competitive advantage due to their favorable power purchase agreements and the use of liquefied natural gas versus other fuels to generate electricity. AES Dominicana controls the only LNG import point into the Dominican Republic. Andres is the newest and most efficient power plant in the country and ranks among the lowest cost electricity generators in the country. Andres' combined-cycle plant burns natural gas and is expected to be fully dispatched as a base load unit as long as the LNG price is not more than 15% above the imported price of fuel oil No. 6. AES Dominicana is an energy group operating in the Dominican Republic, which manages two of AES Corp.'s wholly owned generation assets, Andres and DPP. AES Dominicana, through an AES Corp subsidiary, also has a management agreement to operate EDE-Este, one of the three distribution companies in the country. Andres is a power plant with a 304MW combined cycle generation facility with duel fuel capability (gas and diesel) but with natural gas supplied through the LNG import facility serving as the primary fuel while DPP is a 236MW power plant comprising two simple cycle combustion turbines that can burn both natural gas and fuel oil Number 2. Both plants together have PPA contracts with EDE-Este for 260MW that increase over time, but Andres is currently servicing all contracts given its greater efficiency. Andres LNG terminal includes a large tanker berth and jetty, an LNG refueling pier, and a one million barrel (160,000 cubic meters, m3) LNG storage tank, as well as re-gasification and handling facilities for both LNG and diesel. AIRBORNE HEALTH: Moody's Junks Ratings on Continuing Legal Issues ----------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating and senior secured credit facilities of Airborne Health, Inc to Caa1 from B3. The downgrade reflects continuing legal issues which followed the settlement of a class action lawsuit in November 2007, and delays in seeking and obtaining covenant amendments from the company's senior secured lenders. The ratings remain under review for a further downgrade. Notwithstanding a considerable amount of cash on the balance sheet and no revolver borrowings, liquidity is constrained by potentially substantial legal claims and is exacerbated by the option afforded the senior lenders to accelerate the debt outstanding. Moreover, Moody's believes that the ongoing uncertainty with respect to these issues is likely to divert management attention from operational issues. The downgrade also takes into account the company's relatively small revenue base, high leverage, undiversified product offering, the potential effects of an economic slowdown on consumer spending, higher than anticipated seasonality in the category, and dependence on larger retail customers for the distribution of its products amidst intense competition from a variety of branded and private label products. Moody's believes that, notwithstanding adverse publicity relating to the class action lawsuit, the Airborne brand continues to enjoy broad support among its target consumer segments. The ratings also benefit from the company's efforts to diversify its product offering and evidence that the brand outperformed other branded goods. Nonetheless, uncertainties remain as to the company's marketing flexibility absent a settlement of legal claims with the FTC and state attorney generals. Although the company is currently exploring strategic initiatives including the potential for a capital injection, stabilization of the ratings is contingent on resolution of outstanding legal claims and, also, resolution of the continuing covenant default. Moody's took these rating actions: -- Downgraded the Corporate Family Rating to Caa1 from B3; -- Downgraded the Probability of Default Rating to Caa2 from Caa1; -- Downgraded the $20 million first lien secured revolving credit facility due 2012 to Caa1 (LGD 3, 35%) from B3 (LGD 3, 34%); -- Downgraded the $152 million first lien secured term loan due 2012 to Caa1 (LGD 3, 35%) from B3 (LGD 3, 34%); The ratings remain under review for a downgrade. Airborne Health, Inc, headquartered in Bonita Springs, Florida, markets the "Airborne" effervescent health formula that is designed to support the immune system. The company's products are distributed nationwide through about 70,000 supermarkets, drugstores, discounters, club stores, and other retail locations. Airborne generated net revenue of $126 million for the twelve months ended Jan. 31, 2008. ALASKA AIR: Weakening Fin'l Profile Cues S&P to Cut Ratings to B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Alaska Air Group Inc. and its major operating subsidiary, Alaska Airlines Inc., including lowering the long-term corporate credit ratings on both to 'B+' from 'BB-'. The outlook is stable. "The downgrade is based on an expected weakening in the company's financial profile in 2008 because of sustained high fuel prices and weaker demand in the second half of 2008 as a result of the slowing economy," said Standard & Poor's credit analyst Betsy Snyder. "While Alaska Air Group's earnings performance will be helped by a fuel-hedging program that is second best among the U.S. airlines, we expect the company to report a loss, albeit less than those of its competitors," the analyst continued. Although the company's credit ratios are expected to weaken, it does benefit from relatively strong liquidity for its size. The company had more than $1 billion of cash and short-term investments, with no exposure to auction-rate securities (equivalent to 28% of annualized revenues) at April 24, 2008. The ratings reflect Alaska Airlines' midsize route network serving competitive markets, and the inherent risk of the airline industry, offset somewhat by its strong position in its major markets and relatively good liquidity for its size. Alaska Air Group is the holding company for Alaska Airlines Inc. and Horizon Air Industries Inc. Alaska Airlines, the eighth- largest U.S. airline, accounts for approximately 87% of consolidated revenues, and operates hubs at Seattle; Portland, Ore.; Anchorage, Alaska; and Los Angeles, primarily serving destinations in Alaska from the lower 48 states, as well as cities along the West Coast of the U.S., Canada, and Mexico. The company also provides east/west service to eight destinations, primarily from Seattle, and began serving Hawaii from Seattle and Anchorage in October 2007. S&P expect Alaska Air, like other U.S. airlines, to report a loss in 2008, albeit less than most other airlines. However, the company's cash, cash from operations, and equipment financings should enable it to meet debt maturities and capital spending through the end of 2009. S&P could revise the outlook to negative if higher-than-expected fuel prices or sustained economic weakness continue to erode the company's financial profile. S&P consider an outlook revision to positive unlikely unless industry conditions begin to improve, and S&P see evidence of margin improvement. AMERICAN HOME: Court Denies Wells Fargo's Motion to Lift Stay ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware denied a request by Wells Fargo Bank, N.A. to lift the automatic stay to the extent necessary to recover a payment made in error to, and unjustly retained by, American Home Mortgage Investment Corp. through recoupment, the imposition of a constructive trust, and the imposition of an equitable lien against certain securities owned by AHM Investment. As reported by the Troubled Company Reporter on April 3, 2008, Wells Fargo is the securities administrator, to a certain indenture dated as of March 13, 2007, along with American Home Mortgage Assets Trust 2007-A & SD1, as issuing entity, and Deutsche Bank National Trust Company, as indenture trustee. On March 26, 2007, Wells Fargo paid in error to AHM Investment $462,049 on account of the Class IV-M-4 Note held by the Debtor. Wells Fargo promptly notified the Debtor of the error and requested the immediate return of the Payment to the Trust. The Debtor, however, has refused to return the Payment. Todd C. Schiltz, Esq., at WolfBlock LLP, in Wilmington, Delaware, contendedthat because of the Debtor's refusal and the unjust enrichment of the bankruptcy estates at the expense of the Trust, Wells Fargo, on behalf of the Trust, should be granted relief from automatic stay, and authorized to: -- recoup the Payment from future distributions that become due to the Debtor on account of its securities in the Trust; -- assert, enforce, and realize upon a constructive trust imposed upon the Debtor's accounts, in which the Payment or its proceeds, were deposited; and -- assert, enforce, and realize upon an equitable lien on the Debtor's 25 securities in AHM Investment Trust 2005-SD1, AHM Investment Trust 2006-2, AHM Investment Trust 2007-A SD1, American Home Mortgage Assets LLC Trust 2007-3, and AHM Assets LLC Trust 2007-SD2, until Wells Fargo, on behalf of the Trust, may be fully reimbursed for the full amount of the Payment. Mr. Schiltz told Judge Christopher Sontchi that the Payment should never have been made because no distributions were owing to any holders of Class IV-M-4 Notes at that time. He noted that the Debtor knew, or should have known, that it was very unlikely that any payments would be distributed to the Debtor on its Class IV-M- 4 Note. Debtors Object As reported by the TCR on April 23, the Debtors objected, pointing out that Wells Fargo seeks relief from the automatic stay to recover payments made before the bankruptcy filing. Wells Fargo sought relief from the automatic stay to assert equitable remedies of recoupment, constructive trust and equitable lien to recover a M-4 Note Payment made in March 2007, more than 4 months before the Petition Date. The Debtors added that Wells Fargo, prior to filing its lift stay request, twice violated the automatic stay through impermissible postpetition set-offs of $269,245 from distributions owed to the Debtors on wholly separate and distinct securities. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Kohl, et al. Want Stay Lifted; Class Action Settled ------------------------------------------------------------------ Christian Kohl, Patrick Manley, Freya DeNitto, Shawn O'Neil, Thomas Marinovich, Thomas Byrnes, David Livingstone, Kathleen Mamer, Randy Mamer and Scott Robisch ask the Hon. Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay under Section 362 of the Bankruptcy Code for the limited purpose of allowing a court to pass on the fairness of a settlement of a class action, thereby liquidating the claims of the class. On November 1, 2004, Kohl, et al., filed a class action against American Home Mortgage Investment Corporation and American Home Mortgage Corporation in the U.S. District Court for the Southern District of New York, alleging violations of (i) the Fair Labor Standards Act, and its implementing regulations, and (ii) New York labor law. By order of the Hon. John G. Koeltl on July 6, 2005, the lawsuit was permitted to proceed as a class action. David L. Finger, Esq., at Finger & Slanina, LLC, in Wilmington, Delaware, relates that on July 17, 2007, the parties entered into a "Class Action Settlement Agreement and Release of All Claims." However, before the parties could submit the settlement to the District Court for approval, the Debtors filed for Chapter 11 protection. Mr. Finger contends that the Debtors will not be prejudiced by the request because Kohl, et al., are not currently seeking to collect the settlement amount, but merely to have the settlement approved by the District Court. He assures Judge Sontchi that the settlement amount would be subject to the Debtors' confirmed plan of reorganization. Alternatively, if the Court is unwilling to lift the stay to permit the approval of the settlement, Kohl, et al., ask Judge Sontchi to assume control of the New York action, and allow it to be transferred to the Bankruptcy Court for the purpose of passing on the settlement. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: BoNY, et al. Seek to Foreclose on Properties ----------------------------------------------------------- Bank of New York, Beltway Capital, LLC c/o Select Portfolio Servicing, Inc., Wells Fargo Bank, N.A., CHL, Saxon Mortgage Services, Inc., Deutsche Bank National Trust Company, Countrywide Home Loans, Inc., and HSBC Bank USA, National Association, separately ask the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay imposed under Section 362 of the Bankruptcy Code to exercise their rights against 22 parcels of real properties located at: (1) 2 Laurel Lane, in Prospect, Connecticut 06712; (2) 28 Shinar Mountain Road, in Washington Depot, Conn.; (3) 54-56 Lynch Street, in Providence, Rhode Island 02908; (4) 114-116 James Street, in Bridgeport, Connecticut 06606; (5) 184 Clinton Street, in E Patchogue, New York 11772; (6) 263-267 Salem Street, in Bridgeport, Connecticut 06606; (7) 459 Banfil Street, in Saint Paul, Minnesota 55106; (8) 844N Lawndale, in Chicago, Illinois 60651; (9) 1411 South Jackson Street, in Green Bay, Wisconsin 54301; (10) 1727 Palmetto Ave, in Deland, Florida 32724; (11) 2345 Linden Street, in Atwater, California 95301; (12) 3160 E Allen Road, in Oceola Township, Michigan 48855; (13) 3545 Ewell Street, in Annandale, Virginia 22003; (14) 4640 Prince St, in Downers Grove, Illinois 60515; (15) 8308 S Green St, in Chicago, Illinois 60620; (16) 8716 Lords View Loop, in Gainesville, Virginia 20155; (17) 13831 Beckwith Drive, in Houston, Texas 77014; (18) 13998 Jana Circle, in Seaford, Delaware 19973; (19) 17618 Lindstrom Ct, in Gaithersburg, Maryland 20877; (20) 19601E Country Club Drive #7607, in Aventura, Florida; (21) 24118 Bobcat Road, in Astor, Florida 32102; and (22) 42674 Cedat Ridge Boulevard, in Chantilly, Virginia. Adam Hiller, Esq., at Draper & Goldberg, PLLC, in Wilmington, Delaware, relates that BoNY, et al., are the current holders of the Properties' mortgages and notes. He adds that review of the Properties' titles shows that Mortgage Lenders Network USA, Inc., may hold a lien junior to the Mortgages. Mr. Hiller informs the Court that the obligors of the Properties are currently in default under the Notes, thus, BoNY, et al., seek to exercise their non-bankruptcy rights and remedies with respect to the Notes, including the enforcement of their rights against the Mortgages. Because the Junior Mortgages of American Home Mortgage Investment Corp. and its debtor-affiliates are subordinate to BNY, et al.'s Mortgages, the Debtor has no equity in the Properties, Mr. Hiller says. He adds that because the Junior Mortgages add little or no value to the bankruptcy estate, the Properties are not necessary for the Debtor's reorganization. Hence, Mr. Hiller contends, relief from the automatic stay is appropriate under Section 362(d)(2) of the Bankruptcy Code to permit BoNY, et al., to exercise their rights and remedies with respect to the Mortgages, including foreclosure on the Properties. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN HOME: Court Approves Stipulation with Calyon New York -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approves a stipulation between American Home Mortgage Investment Corp., its debtor-affiliates and Calyon New York Branch, which settles, without further litigation, Calyon's request to obtain certain advanced funds, and certain other disputes. As reported in the Troubled Company Reporter on April 23, 2008, Pursuant to Rule 9019(a) of the Federal Rules of Bankruptcy Procedure, American Home Investment Corp., its debtor-affiliates, and Calyon New York Branch, administrative agent under a repurchase agreement dated Nov. 21, 2006, asked the Court to approve their stipulation. Calyon New York Branch sought a declaratory judgment, injunctive relief and damages, including a demand for an accounting and a constructive trust, against the Debtors pursuant to the Debtors' refusal to turnover certain and records and transfer funds on account of the termination of their mortgage loans repurchase agreement. Pursuant to a Repurchase Agreement dated November 21, 2006, Calyon, as administrative agent, on behalf of various parties, was requested to purchase and did purchase, from time to time, certain mortgage loans from the Debtors. The Debtors agreed to repurchase the loans on applicable dates at set prices. Pursuant to the Repurchase Agreement, American Horne Mortgage Servicing, Inc., as servicer, was responsible for administering the underlying Mortgage Loans, including, without limitation, collecting monthly mortgage payments, monitoring past-due accounts, and reporting on defaulted loans. On August 1, 2007, Calyon sent the Debtors notices of default, which, among others, notified of the acceleration all amounts due, and the termination of the facility. The Repurchase Price for the Mortgage Loans $1,178,225,176, plus a "price differential", interest and costs, including attorney fees. Pursuant to the Stipulation: -- Calyon is provided with a cash recovery of $11,546,262; -- the Debtors agree to use reasonable efforts to trace and recover a total of $2,017,291 in unpaid funds, which will be paid to Calyon, if recovered; -- Calyon agrees that, in addition to the right to enforce the provisions of the Stipulation, Calyon's only rights and claims against the Debtors for the Unpaid Funds are general unsecured claims in connection with the Repurchase Agreement; -- Calyon waives its right to $2,729,164, which will be placed into an escrow account maintained by the Debtors and held pending further Court order or agreement of the parties that may assert an interest in the funds; -- Calyon and the Debtors agree to place $415,752 -- the disputed principal and interest payments -- in an escrow account, and retain all rights and claims to the Disputed P&I; and -- the Debtors agree to determine by June 2, 2008, whether any portion of certain remaining amounts aggregating $334,407 are due to Calyon. The Debtors agree to recover any portion of the Remaining Amounts, which are due to Calyon, if any. The aggregate amounts referenced in the Stipulation were calculated based on the identification of specific funds related to certain mortgage loans that never closed and were funded by Calyon under the Repurchase Agreement. While the Parties have not broken down the specific amounts and identified the related Mortgage Loans, they have shared the relevant data supporting the aggregate amounts referenced. The Parties also ask the Court to direct Deutsche Bank Trust Company Americas, JPMorgan Chase Bank, N.A., and Bank of New York to transfer appropriate funds to either the Debtors or Calyon as provided for by the Stipulation. The Debtors also intend to instruct North Fork Bank to transfer certain funds to Calyon. Calyon and BofA Also Stipulate Calyon and Bank of America, N.A., administrative agent for certain prepetition secured parties, agree to settle issues regarding BofA's request to intervene in the Adversary Proceeding, and BofA's objection to Calyon's request to obtain certain advanced funds subject to the security interests of the Prepetition Secured Parties. The Debtors have advised Calyon that they have no objection to the stipulation. The key terms of Calyon and BofA's agreement are: -- The request to intervene and objection to Calyon's request regarding the advanced funds will be withdrawn; -- BofA agrees not to object to the Debtors' and Calyon's Stipulation; -- BofA agrees not to seek or recover from Calyon, and waives any claim against Calyon, with respect to the funds that Deutsche Bank, JPMorgan, North Fork and BoNY will transfer to Calyon; -- If the Debtors and Calyon's Stipulation does not become effective, BofA's rights and claims against Calyon, if any, are reserved with respect to up to $315,000; and -- Nothing in Calyon and BofA's agreement will be deemed or construed as an admission or release by BofA of any rights, claims or defenses with respect to any claim or action asserted against BofA in connection with certain swept funds in BoNY's account. BofA Allowed to Intervene The Court has allowed BofA to intervene in the Adversary Proceeding solely to permit it to oppose to Calyon's request to obtain certain advanced funds subject to the security interests of the Prepetition Secured Parties. Judge Christopher Sontchi said the order is without prejudice to the rights of any party-in- interest to seek or oppose any further relief. The Debtors and Calyon previously informed the Court that they are not opposed to BofA's limited intervention. However, they asked the Court that BofA should not be allowed to intervene in any other aspect of the proceeding. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN IRONHORSE: Court Chooses Dealer as Stalking-Horse Bidder ----------------------------------------------------------------- Rocky Mountain Choppers obtained approval from the U.S. Bankruptcy Court for the Northern District of Texas to serve as the stalking- horse bidder for the assets of American IronHorse Motorcycle Company, Inc. Rocky Mountain Choppers was awarded stalking-horse bidder status in connection with the court's approval of the debtor's auction procedures on April 29, 2008. Rocky Mountain Choppers and another affiliate, Blackwater Choppers, are important American IronHorse dealers located in Montana and Minnesota and owned by Scott Meyers. Mr. Meyers is a former senior executive of several Fortune 1000 companies. During meetings with company executives after the court hearing, Mr. Meyers expressed his enthusiasm for the transaction. "I am pleased to be close to buying American IronHorse. I know this brand, understand this business, and bring a strong understanding of supplier, dealer, and customer needs. Together with my team, we have a clear strategy that will help this company succeed." This bid is subject to the submission of "higher and better bids" and bankruptcy court approval on May 23, 2008. Based in Fort Worth, Texas, American IronHorse Motorcycle Company, Inc., designs, manufactures, and markets custom v-twin motorcycles. AIH markets its motorcycles through a national network of more than 100 dealers and is actively pursuing international sales in Canada and the United Kingdom. On March 25, 2008, American IronHorse consented to the move by a group of creditors to place the company under chapter 11 bankruptcy protection before the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division. On the same day, the Bankruptcy Court entered an order for relief under Chapter 11 of the U.S. Bankruptcy Code. Three creditors -- AG Nichlos, Jr., William E. Buford and Jim Graham -- filed the involuntary petition against the company on Feb. 29, 2008. The petitioners are owed $120,000 by the company. The petitioner's counsel is Troy D. Philips, Esq., at Glast, Phillips & Murray, PC, in Dallas, Texas. Vincent P. Slusher, Esq., at Beirne Maynard & Parsons, LLP, represents the Debtor. AMERIQUEST MORTGAGE: Fitch Cuts Ratings on $399.9MM Certificates ---------------------------------------------------------------- Fitch Ratings has taken rating actions on 18 Ameriquest Mortgage Securities Inc. mortgage pass-through certificate transactions. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are. Affirmations total $2.7 billion and downgrades total $399.9 million. Additionally, $13.3 million was placed on Rating Watch Negative. Series 2003-1 -- $92.4 million class M-1 affirmed at 'AA'; -- $15.2 million class M-2 downgraded to 'B' from 'BBB'; -- $5.0 million class MF-3 downgraded to 'CC/DR4' from 'CCC/DR2'; -- $9.4 million class MV-3 downgraded to 'CC/DR4' from 'CCC/DR2'; -- $0.4 million class M-4 revised to 'C/DR6' from 'C/DR5'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co.; -- 60+ day Delinquency: 22.10%; -- Realized Losses to date (% of Original Balance): 2.44%. Series 2003-2 -- $23.4 million class M-1 affirmed at 'AA'; -- $3.4 million class M-2 rated 'BBB', placed on Rating Watch Negative; -- $3.9 million class M-3 remains at 'C/DR2'; -- $0.3 million class M-4 remains at 'C/DR6'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co.; -- 60+ day Delinquency: 25.56%; -- Realized Losses to date (% of Original Balance): 2.46%. Series 2003-6 -- $26.1 million class M-1 affirmed at 'AAA'; -- $72.0 million class M-2 affirmed at 'AA-'; -- $24.0 million class M-3 affirmed at 'A+'; -- $24.0 million class M-4 affirmed at 'A'; -- $20.0 million class M-5 downgraded to 'B' from 'BBB-'; -- $12.3 million class M-6 revised to 'C/DR5' from 'C/DR4'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co.; -- 60+ day Delinquency: 18.29%; -- Realized Losses to date (% of Original Balance): 2.28%. Series 2003-8 -- $52.4 million class AF-4 affirmed at 'AAA'; -- $67.9 million class AF-5 affirmed at 'AAA'; -- $20.7 million class AV-1 affirmed at 'AAA'; -- $2.3 million class AV-2 affirmed at 'AAA'; -- $119.8 million class M-1 affirmed at 'AA+'; -- $30.2 million class M-2 affirmed at 'A+'; -- $10.8 million class M-3 affirmed at 'A-'; -- $9.9 million class M-4 rated 'BBB+', placed on Rating Watch Negative; -- $10.3 million class M-5 affirmed at 'B'; -- $4.0 million class MF-6 downgraded to 'CC/DR4' from 'B-/DR2'; -- $4.4 million class MV-6 downgraded to 'CC/DR4' from 'B-/DR2'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co.; -- 60+ day Delinquency: 15.36%; -- Realized Losses to date (% of Original Balance): 2.03%. Series 2003-10 -- $29.3 million class AF-5 affirmed at 'AAA'; -- $22.0 million class AF-6 affirmed at 'AAA'; -- $84.7 million class AV-1 affirmed at 'AAA'; -- $0.8 million class AV-2 affirmed at 'AAA'; -- $53.9 million class M-1 affirmed at 'AA'; -- $21.6 million class M-2 affirmed at 'A'; -- $4.8 million class M-3 affirmed at 'A-'; -- $5.3 million class M-4 affirmed at 'BBB+'; -- $4.8 million class M-5 affirmed at 'BBB'; -- $3.9 million class MF-6 affirmed at 'B'; -- $1.8 million class MV-6 affirmed at 'B'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co.; -- 60+ day Delinquency: 8.62%; -- Realized Losses to date (% of Original Balance): 1.54%. Series 2003-11 -- $16.1 million class AF-5 affirmed at 'AAA'; -- $21.1 million class AF-6 affirmed at 'AAA'; -- $37.6 million class AV-1 affirmed at 'AAA'; -- $10.4 million class AV-2 affirmed at 'AAA'; -- $15.8 million class AV-4 affirmed at 'AAA'; -- $112.1 million class M-1 affirmed at 'AA'; -- $40.6 million class M-2 affirmed at 'A'; -- $3.2 million class M-3 affirmed at 'A-'; -- $4.9 million class M-3B affirmed at 'A-'; -- $5.8 million class M-4B affirmed at 'BBB+'; -- $6.9 million class M-5 affirmed at 'BB+'; -- $8.7 million class M-6 affirmed at 'B-/DR1'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 15.65%; -- Realized Losses to date (% of Original Balance): 1.92%. Series 2003-12 -- $9.5 million class AF affirmed at 'AAA'; -- $26.3 million class AV-1 affirmed at 'AAA'; -- $45.0 million class M-1 affirmed at 'AA'; -- $20.6 million class M-2 affirmed at 'A'; -- $2.9 million class M-3 affirmed at 'A-'; -- $3.3 million class M-4 affirmed at 'BBB+'; -- $2.9 million class M-5 affirmed at 'B'; -- $3.0 million class M-6 affirmed at 'B-/DR1'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 15.12%; -- Realized Losses to date (% of Original Balance): 1.91%. Series 2003-AR2 -- $49.0 million class M-1 affirmed at 'AA'; -- $7.4 million class M-2 downgraded to 'B' from 'BB+'; -- $4.8 million class M-3 downgraded to 'C/DR4' from 'CCC'; -- $0.0 million class M-4 revised to 'C/DR6' from 'C/DR5'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co.; -- 60+ day Delinquency: 24.65%; -- Realized Losses to date (% of Original Balance): 1.68%. Series 2003-AR3 -- $32.8 million class M-2 affirmed at 'AA'; -- $17.0 million class M-3 affirmed at 'AA-'; -- $17.0 million class M-4 affirmed at 'A+'; -- $17.0 million class M-5 downgraded to 'BBB-' from 'A'; -- $17.0 million class M-6 downgraded to 'B' from 'BB'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co.; -- 60+ day Delinquency: 23.72%; -- Realized Losses to date (% of Original Balance): 1.39%. Series 2004-IA1 -- $7.0 million class M-1 affirmed at 'AA+'; -- $10.6 million class M-2 affirmed at 'AA'; -- $3.3 million class M-3 affirmed at 'AA-'; -- $6.9 million class M-4 affirmed at 'A'; -- $2.8 million class M-5 affirmed at 'A-'; -- $2.7 million class M-6 affirmed at 'BBB+'; -- $1.8 million class M-7 affirmed at 'BBB'; -- $0.8 million class M-8 affirmed at 'BBB-'; -- $0.2 million class M-9 affirmed at 'BB+'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 19.73%; -- Realized Losses to date (% of Original Balance): 0.68%. Series 2004-R1 -- $70.7 million class A-1A affirmed at 'AAA'; -- $7.9 million class A-1B affirmed at 'AAA'; -- $20.3 million class A-2 affirmed at 'AAA'; -- $35.8 million class M-1 affirmed at 'AA+'; -- $32.5 million class M-2 affirmed at 'AA'; -- $13.0 million class M-3 affirmed at 'AA-'; -- $7.5 million class M-4 affirmed at 'A+'; -- $4.3 million class M-5 affirmed at 'A'; -- $4.3 million class M-6 affirmed at 'A-'; -- $4.3 million class M-7 affirmed at 'BBB+'; -- $4.3 million class M-8 affirmed at 'BBB'; -- $4.8 million class M-9 affirmed at 'BB'; -- $2.9 million class M-10 affirmed at 'B-/DR1'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 16.40%; -- Realized Losses to date (% of Original Balance): 1.06%. Series 2004-R2 -- $44.2 million class A-1A affirmed at 'AAA'; -- $4.9 million class A-1B affirmed at 'AAA'; -- $32.4 million class A-4 affirmed at 'AAA'; -- $20.0 million class M-1 affirmed at 'AA+'; -- $18.0 million class M-2 affirmed at 'AA'; -- $9.1 million class M-3 affirmed at 'AA-'; -- $4.5 million class M-4 affirmed at 'A+'; -- $3.8 million class M-5 affirmed at 'A'; -- $3.5 million class M-6 affirmed at 'A-'; -- $3.7 million class M-7 affirmed at 'BBB+'; -- $3.7 million class M-8 downgraded to 'B' from 'BB'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 19.40%; -- Realized Losses to date (% of Original Balance): 1.55%. Series 2004-R3 -- $50.9 million class A-1A affirmed at 'AAA'; -- $5.7 million class A-1B affirmed at 'AAA'; -- $16.2 million class A-4 affirmed at 'AAA'; -- $67.5 million class M-1 affirmed at 'AA'; -- $46.5 million class M-2 affirmed at 'A'; -- $2.1 million class M-3 affirmed at 'A-'; -- $5.5 million class M-4 affirmed at 'BBB+'; -- $5.0 million class M-5 affirmed at 'BBB'; -- $5.4 million class M-6 affirmed at 'BB+'; -- $6.8 million class M-7 revised to 'B-/DR2' from 'B-/DR1'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 18.47%; -- Realized Losses to date (% of Original Balance): 2.68%. Series 2004-R4 -- $59.7 million class M-1 affirmed at 'AA'; -- $44.0 million class M-2 affirmed at 'A-'; -- $10.0 million class M-3 affirmed at 'BB+'; -- $12.5 million class M-4 downgraded to 'B' from 'BB'; -- $3.6 million class M-5 downgraded to 'C/DR5' from 'B'; -- $4.0 million class M-6 downgraded to 'C/DR6' from 'CCC/DR1'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 27.92%; -- Realized Losses to date (% of Original Balance): 2.96%. Series 2004-R5 -- $18.9 million class A-1A affirmed at 'AAA'; -- $2.1 million class A-1B affirmed at 'AAA'; -- $57.5 million class M-1 affirmed at 'AA'; -- $47.5 million class M-2 downgraded to 'BBB+' from 'A'; -- $9.1 million class M-3 downgraded to 'BBB' from 'A-'; -- $3.8 million class M-4 downgraded to 'BB+' from 'BBB'; -- $2.8 million class M-5 downgraded to 'BB-' from 'BB'; -- $2.7 million class M-6 affirmed at 'B'; -- $3.6 million class M-7 remains at 'C/DR5'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 25.51%; -- Realized Losses to date (% of Original Balance): 1.99%. Series 2004-R9 -- $50.5 million class A-1 affirmed at 'AAA'; -- $6.6 million class A-4 affirmed at 'AAA'; -- $25.0 million class M-1 affirmed at 'AA+'; -- $24.0 million class M-2 affirmed at 'AA'; -- $17.5 million class M-3 affirmed at 'AA-'; -- $16.0 million class M-4 downgraded to 'BBB+' from 'A'; -- $7.5 million class M-5 downgraded to 'BBB-' from 'A-'; -- $7.5 million class M-6 downgraded to 'BB+' from 'BBB+'; -- $6.8 million class M-7 downgraded to 'BB' from 'BBB'; -- $3.0 million class M-8 downgraded to 'BB-' from 'BBB-'; -- $2.1 million class M-9 downgraded to 'B' from 'BB+'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 28.75%; -- Realized Losses to date (% of Original Balance): 1.33%. Series 2004-R11 -- $142.4 million class A-1 affirmed at 'AAA'; -- $26.6 million class A-2 affirmed at 'AAA'; -- $63.8 million class M-1 affirmed at 'AA+'; -- $32.2 million class M-2 downgraded to 'A' from 'AA'; -- $16.5 million class M-3 downgraded to 'A-' from 'AA-'; -- $15.0 million class M-4 downgraded to 'BBB+' from 'A+'; -- $9.2 million class M-5 downgraded to 'BBB' from 'A'; -- $5.3 million class M-6 downgraded to 'BBB-' from 'A-'; -- $3.3 million class M-7 downgraded to 'BB+' from 'BBB+'; -- $2.3 million class M-8 downgraded to 'BB' from 'BBB'; -- $4.0 million class M-9 downgraded to 'BB-' from 'BBB-'; -- $4.0 million class M-10 downgraded to 'C/DR5' from 'CCC/DR1'. Deal Summary -- Originators: Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 23.24%; -- Realized Losses to date (% of Original Balance): 1.07%. Series 2004-R12 -- $156.5 million class A-1 affirmed at 'AAA'; -- $36.8 million class A-4 affirmed at 'AAA'; -- $63.8 million class M-1 affirmed at 'AA+'; -- $32.2 million class M-2 affirmed at 'AA'; -- $16.5 million class M-3 downgraded to 'A-' from 'AA-'; -- $15.0 million class M-4 downgraded to 'BBB+' from 'A+'; -- $12.8 million class M-5 downgraded to 'BBB' from 'A'; -- $11.4 million class M-6 downgraded to 'BBB-' from 'A-'; -- $3.7 million class M-7 downgraded to 'BB+' from 'BBB+'; -- $2.6 million class M-8 downgraded to 'BB' from 'BBB'; -- $4.4 million class M-9 downgraded to 'BB-' from 'BBB-'; -- $3.9 million class M-10 downgraded to 'B' from 'BB+'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co. and Town & Country Credit Co.; -- 60+ day Delinquency: 23.89%; -- Realized Losses to date (% of Original Balance): 0.93%. AMPEX CORPORATION: Shareholder Wants Equity Committee Appointed --------------------------------------------------------------- ValueVest High Concentration Master Fund Ltd., equity security holder and party-in-interest of Ampex Corporation and its debtor- affiliates, ask the U.S. Bankruptcy Court for the Southern District of New York to immediately appoint an Official Committee of Equity Holders to represent and prosecute the interest of shareholders and recover certain of their equity stake in the Debtors. ValueVest argues that the Debtors are not insolvent and there is a substantial likelihood of a meaningful distribution to equity. The Debtors have at least 393 shareholders with Class A common stock outstanding as of March 25, 2008, wherein ValueVest holds 13.4% shares of the Debtors' Class A common stock. A hearing is set on May 1, 2008, at 10:00 a.m., to consider approval of ValueVest request. About Ampex Corporation Headquartered in Redwood City, California, Ampex Corporation -- 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. The Debtors selected Epiq Systems Bankruptcy Solution as claims, noticing and balloting agent. The U.S. Trustee for Region 2 appointed five creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed total assets of $26,467,000 and total debts of $133,602,000. As of Dec. 31, 2007, Ampex reported a balance sheet data with total assets of $26.46 million, total liabilities of $133.60 million resulting to a total stockholders' deficit of $107.13 million. ARGENT SECURITIES: Fitch Lowers Ratings on $83.1MM Certificates --------------------------------------------------------------- Fitch Ratings has taken rating actions on nine Argent Securities Inc. mortgage pass-through certificate transactions. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $769.4 million and downgrades total $83.1 million. Series 2003-W2 -- $7.9 million class M-2 affirmed at 'AA-'; -- $4.0 million class M-3 affirmed at 'A+'; -- $4.0 million class M-4 affirmed at 'A'; -- $4.0 million class M-5 affirmed at 'BBB+'; -- $5.0 million class M-6 downgraded to 'B' from 'BB'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 27.84%; -- Realized Losses to date (% of Original Balance): 1.43%. Series 2003-W3 -- $6.8 million class AF-6 affirmed at 'AAA'; -- $104.0 million class M-1 affirmed at 'AA+'; -- $67.9 million class M-2 affirmed at 'A'; -- $7.6 million class M-3 affirmed at 'A-'; -- $7.5 million class M-4 affirmed at 'BBB+'; -- $8.2 million class M-5 affirmed at 'BB'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 14.82%; -- Realized Losses to date (% of Original Balance): 1.78%. Series 2003-W4 -- $33.3 million class M-1 affirmed at 'AA'; -- $9.9 million class M-2 affirmed at 'A'; -- $3.7 million class M-3 affirmed at 'BBB+'; -- $2.1 million class M-4 affirmed at 'BBB'; -- $1.5 million class M-5 downgraded to 'B' from 'BB'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 15.03%; -- Realized Losses to date (% of Original Balance): 1.28%. Series 2003-W8 -- $45.6 million class M-1 affirmed at 'AA'; -- $26.5 million class M-2 affirmed at 'A'; -- $2.6 million class M-3 affirmed at 'A-'; -- $2.8 million class M-4 downgraded to 'BBB' from 'BBB+'; -- $3.2 million class M-5 downgraded to 'BB' from 'BBB'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 21.69%; -- Realized Losses to date (% of Original Balance): 1.78%. Series 2003-W10 -- $42.4 million class M-1 affirmed at 'AA'; -- $29.1 million class M-2 affirmed at 'A'; -- $2.7 million class M-3 affirmed at 'A-'; -- $3.3 million class M-4 downgraded to 'BBB' from 'BBB+'; -- $2.7 million class M-5 downgraded to 'B' from 'BB'; -- $3.0 million class M-6 downgraded to 'C/DR4' from 'B'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 19.96%; -- Realized Losses to date (% of Original Balance): 1.97%. Series 2004-PW1 -- $1.3 million class M-1 affirmed at 'AA+'; -- $18.0 million class M-2 affirmed at 'AA'; -- $7.5 million class M-3 affirmed at 'AA-'; -- $6.2 million class M-4 affirmed at 'A+'; -- $3.2 million class M-5 downgraded to 'BBB+' from 'A'; -- $1.4 million class M-6 affirmed at 'BBB'; -- $2.3 million class M-7 affirmed at 'B'; -- $1.4 million class M-8 affirmed at 'B'; -- $1.5 million class M-9 downgraded to 'C/DR5' from 'CC/DR3'; -- $3.5 million class M-10 revised to 'C/DR6' from 'C/DR4'; -- $1.2 million class M-11 remains at 'C/DR6'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 35.18%; -- Realized Losses to date (% of Original Balance): 3.74%. Series 2004-W3 -- $61.2 million class A-3 affirmed at 'AAA'; -- $7.9 million class M-1 affirmed at 'A-'; -- $2.8 million class M-2 affirmed at 'BBB+'; -- $1.7 million class M-3 affirmed at 'BBB'; -- $2.2 million class M-4 affirmed at 'BB'; -- $3.0 million class M-5 downgraded to 'B-/DR2' from 'B'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 15.10%; -- Realized Losses to date (% of Original Balance): 1.88%. Series 2004-W8 -- $35.9 million class A-2 affirmed at 'AAA'; -- $7.3 million class A-5 affirmed at 'AAA'; -- $27.0 million class M-1 affirmed at 'AA+'; -- $25.3 million class M-2 affirmed at 'AA'; -- $15.4 million class M-3 downgraded to 'A+' from 'AA-'; -- $13.8 million class M-4 downgraded to 'A-' from 'A+'; -- $10.5 million class M-5 downgraded to 'BBB+' from 'A'; -- $5.9 million class M-6 downgraded to 'BBB-' from 'A-'; -- $4.1 million class M-7 downgraded to 'BB' from 'BBB+'; -- $2.1 million class M-9 downgraded to 'BB-' from 'BBB-'; -- $2.3 million class M-10 downgraded to 'B+' from 'BB+'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 24.30%; -- Realized Losses to date (% of Original Balance): 1.03%. Series 2004-W10 -- $6.5 million class A-1 affirmed at 'AAA'; -- $7.6 million class A-2 affirmed at 'AAA'; -- $24.8 million class M-1 affirmed at 'AA+'; -- $24.0 million class M-2 affirmed at 'AA'; -- $14.0 million class M-3 affirmed at 'AA-'; -- $24.0 million class M-4 affirmed at 'A'; -- $12.0 million class M-5 affirmed at 'A-'; -- $10.0 million class M-6 affirmed at 'BBB+'; -- $8.0 million class M-7 affirmed at 'BBB'; -- $5.4 million class M-8 affirmed at 'BBB-'; -- $3.0 million class M-9 affirmed at 'BB+'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Cos.; -- 60+ day Delinquency: 24.18%; -- Realized Losses to date (% of Original Balance): 1.36%. ASARCO LLC: Wants to Employ Additional Consulting Experts --------------------------------------------------------- ASARCO LLC and its debtor-affiliates ask authority from the U.S. Bankruptcy Court for the Southern District of Texas to employ two additional consulting experts to provide litigation-related services to ASARCO'S litigation counsel in connection with its pending or anticipated litigation. James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, informs the Court that ASARCO has filed its request on a no-name basis to avoid a disclosure of the identity of the professionals and other details of their retention and scope of work to the opposite side in the relevant litigation, which may place ASARCO at a disadvantageous position as compared to its adversary. According to Mr. Prince, ASARCO has determined that the employment of the Consulting Experts will assist in the successful prosecution of the relevant litigation and thus, provide value to its estate. The Official Committee of Unsecured Creditors has been advised of the proposed engagement, Mr. Prince says. ASARCO will compensate the Consulting Experts based on these terms: (1) The first Consulting Expert, who has been rendering necessary services to ASARCO since March 26, 2008, will be paid based on its hourly rate ranging from $230 to $350, depending on the level of experience and expertise of the individual performing the service. The actual and reasonable expenses incurred will also be reimbursed by ASARCO. It is anticipated that total fees payable to the first Consulting Expert will be $52,000 plus expenses. In no way will the aggregate amount exceed $100,000; and (2) The second Consulting Expert, who has not yet commenced work, will be paid based on its hourly rate of $400, plus actual and reasonable costs and expenses incurred. It is anticipated that the total fees and expenses will not exceed $100,000. The terms of compensation is in accordance with Section 328(a) of the Bankruptcy Code, Mr. Prince maintains. To reduce administrative expenses, ASARCO seeks the Court's permission to pay for the Consulting Experts' services in accordance with the compensation structure disclosed, and in an amount not exceeding $100,000 per professional, in the ordinary course and without additional court approval being necessary. The Consulting Experts have represented to counsel and ASARCO that they do not have or represent any interest adverse to ASARCO or its estate on the matters for which they are being employed and that they each otherwise meet the "disinterested person" definition as set forth in Section 101(14) of the Bankruptcy Code. ASARCO seeks the Court's permission to file the Consulting Experts' disinterestedness affidavits under seal upon entry of an order on the proposed employment. 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. 70; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Wants to Pay Lehman $1 Million at the End of Case ------------------------------------------------------------- ASARCO LLC and its debtor-affiliates proposes to the Honorable Richard S. Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas that the payment of more than $1,000,000 of additional compensation to Lehman Brothers, Inc., be deferred until the end of ASARCO's Chapter 11 case. Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, also tells the Court that Lehman's monthly fee is increased from $75,000 to $150,000. He adds that ASARCO will pay Lehman a fee for the "Liquidity Event," which is earned upon, or up to 12 months after, the effectiveness of a plan of reorganization. However, monthly fees for the first 24 months of Lehman's service and 50% of monthly fees thereafter will no longer be credited against the Transaction Fees or the Restructuring Fee. According to Mr. Kinzie, the Transaction and Restructuring Fees aggregates $4,113,000, composed of fees attributable to work within the scope of the engagement letter dated Aug. 30, 2005, that was not and could not have been anticipated; and fees attributable to work outside the scope of the original engagement letter. 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). ASIA GLOBAL: Zhong Yi Raises Going Concern Doubt Over Losses ------------------------------------------------------------ Zhong Yi (Hong Kong) C.P.A. Company Limited raised substantial doubt on the ability of Asia Global Holdings Corp. to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007, filed with the United States Securities and Exchange Commission. The auditor pointed to Asia Global's substantial losses. The management stated that as of Dec. 31, 2007, the company had an accumulated deficit of $15,798,089. Additionally, the company incurred losses over the past several years. Management took certain actions and continues to implement changes designed to improve the company's financial results and operating cash flows. The actions involve certain cost-saving initiatives and growing strategies, including a business expansion in Media & Advertising business by increasing number of distributors and setup of a new direct sales office in China, and cost-saving plan in TV Entertainment business and distribution of new TV programs in China. Management believes the actions will enable the company to improve future profitability and cash flow in its continuing operations through Dec. 31, 2008. The company posted a net loss of $5,908,545 on net revenues of $10,783,574 for the year ended Dec. 31, 2007, as compared with a net loss of $9,871,113 on net revenues of $5,179,174 in the prior year. At Dec. 31, 2007, the company's consolidated balance sheet showed $5,348,259 in total assets, $3,189,056 in total liabilities and $2,159,203 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?2ae6 About Asia Global Headquartered in Hong Kong, China, Asia Global Holdings Corp. (OTC BB: AAGH.OB) -- http://www.asiaglobalholdings.com/-- was incorporated in the Nevada on Feb. 1, 2002, as Longbow Mining Inc. On May 12, 2004, Longbow Mining Inc. changed its name to BonusAmerica Worldwide Corporation. On June 6, 2006, the company changed its name to Asia Global Holdings Corp. AAGH is focused on building businesses in China and other emerging regions and markets in Asia and worldwide. The company has subsidiaries participating in media and advertising, marketing services and internet commerce. During 2007, AAGH entered the television entertainment market, where it plans to sell advertising slots that air during the broadcast of Who Wants To Be A Millionaire? TV show in China. The company also has offices in the United States and in mainland China. BAG 'N BAGGAGE: Case Summary & 21 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Bag 'n Baggage, Ltd. 11067 Petal St. Dallas, TX 75238 Bankruptcy Case No.: 08-32096 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- 900 Corp. 08-32097 Type of Business: The Debtors offer luggage and carry-on bags for traveling. See http://www.bagnbaggage.com/ Chapter 11 Petition Date: May 4, 2008 Court: Northern District of Texas (Dallas) Judge: Stacey G. Jernigan Debtors' Counsel: Carol E. Jendrzey, Esq. Email: cejendrz@coxsmith.com Lindsey Doherty Graham, Esq. Email: lgraham@coxsmith.com Mark Edward Andrews, Esq. Email: mandrews@coxsmith.com Cox Smith Matthews, Inc. 112 E. Pecan, Ste. 1800 San Antonio, TX 78205 Tel: (210) 554-5500, (210) 554-5547 (214)698-7800 Fax: (210) 226-8395, (214) 698-7899 Bag 'n Baggage, Ltd's Financial Condition: Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million A. Bag 'n Baggage, Ltd's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ RIMOWA/HP Marketing Corp. $423,835 16 Chapin Rd., Unit 908 Pine Brook, NJ 07058 TRG Group $262,197 2047 Westport Ctr. Dr. Saint Louis, MO 63146 BRIC's USA, Inc. $229,261 320 Fifth Ave., Ste. 506 New York, NY 10001 Ferragamo USA, Inc. $190,202 Kipling $182,460 HL Operating Corp. $177,662 Tumi Luggage $148,994 CTA Fixtures, Inc. $148,866 Bosca Accessories in Leather $107,267 Management Resource Systems $99,215 VMS Builders $97,245 Tarrant Lighting $91,483 Lodis Corp. $89,364 Samsonite $84,405 Tazmanian Freight Systems, $82,417 Inc. Vernon Co. $80,000 Creative Retail Packaging $75,462 Genesco, Inc. $68,936 Independent Contractor, Inc. $59,381 Colite International Ltd. $58,110 B. 900 Corp's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank of America $8,000,000 901 Main St., 7th Flr. Dallas, TX 75202 BI-LO LLC: No Rated Debt Outstanding; Moody's Withdraws Ratings --------------------------------------------------------------- Moody's Investors Service has withdrawn the ratings of BI-LO LLC for business reasons. Moody's added that the ratings were withdrawn because this issuer has no rated debt outstanding. These ratings of BI-LO LLC have been withdrawn: -- Corporate Family Rating of B1 -- Probability of Default Rating of B2 -- $75 million Gtd Sr Sec Revolving Credit Facility B1 (LGD 3, 31%) -- $345 million Gtd Sr Sec Term Loan B1 (LGD 3, 31%) -- Bi-LO LLC operates regional supermarkets in the southeast. BISHOP BYRNE: Case Summary & Three Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Bishop Byrne Council Home, Inc. 1501 Southern Avenue Oxon Hill, MD 20745 Bankruptcy Case No.: 08-15816 Chapter 11 Petition Date: April 25, 2008 Court: District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Bennie R. Brooks, Esq. 8201 Corporate Drive, Ste. 260 Landover, MD 20785 Tel: (301) 731-4160 Email: bbrookslaw@aol.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Three Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Pepco $13,000 701 Ninth Street, N.W. Washington DC 20068 Washington Gas $3,000 P.O. Box 96501 Washington, DC 20090 Internal Revenue Services $1,000 31 Hopkins Plaza, Rm. 1150 Baltimore MD 21201 BLOUNT INT'L: March 31 Balance Sheet Upside-Down by $43.8 Million ----------------------------------------------------------------- Blount International Inc. disclosed Wednesday financial results for its first quarter ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $407.5 million in total assets and $451.3 million in total liabilities, resulting in a $43.8 million total stockholders' deficit. The company reported net income of $6.8 million in the first quarter of 2008, compared with net income of $4.7 million in the same period of 2007. The increase in net income is a result of the improved year over year operating income and lower net interest expense due to a reduction in debt levels and lower borrowing rates. Company debt at the end of the first quarter was $296.7 million, a decrease of $70.8 million from last year's first quarter. The company's sales in the first quarter were $133.2 million, compared to $118.3 million in 2007, a 12.6% increase. The Outdoor Products segment sales increased by 13.9% from last year's first quarter. Operating income increased in this year's first quarter to $16.7 million from $16.2 million last year. In the first quarter, operating income was adversely impacted by approximately $2.7 million from changes in foreign currency exchange rates as compared to last year. Commenting on the first quarter results, James S. Osterman, chairman and chief executive officer, stated: "In the first quarter, we continued to see robust demand for saw chain products. The stronger euro, volume gains in developing markets and various marketing programs contributed to our increase in sales. A solid order backlog is encouraging for continued top line growth for the balance of the year; however, foreign currency and raw material cost trends will continue to put pressure on our operating margins for the remainder of 2008." About Blount International Blount International Inc. (NYSE: BLT) -- http://www.blount.com/-- is an international company operating one principal business segment, the Outdoor Products segment. Blount sells its products in more than 100 countries around the world. The Outdoor Products segment manufactures and markets cutting chain, guide bars, sprockets and accessories for chainsaw use, concrete-cutting equipment and accessories and lawnmower blades. This segment also markets branded parts and accessories for the lawn and garden equipment market. The segment's products are sold to original equipment manufacturers for use on new chainsaws and yard care equipment, and to the retail replacement market through distributors, dealers and mass merchants. BLUE BELL: Moody's Reviews 'Caa1' Rating on $18.75 Mil. Notes ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Blue Bell Funding, Ltd. or Blue Bell Funding Corp.: Class Description: $37,500,000 Class B Notes -- Prior Rating: A3 -- Current Rating: Baa2, on review for possible downgrade Class Description: $18,750,000 Class C Notes -- Prior Rating: Baa3, 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. C-BASS CBO: Fitch Junks Ratings on Four Note Classes ---------------------------------------------------- Fitch Ratings has downgraded four classes of notes issued by C- BASS CBO XVI LTD and removed all classes from Rating Watch Negative. These rating actions are effective immediately: -- $304,956,811 class A to 'CCC' from 'BBB'; -- $22,500,000 class B to 'CC' from 'BBB-'; -- $26,500,000 class C to 'C' from 'BB-'; -- $9,125,000 class D to 'C' from 'B'. C-BASS XVI is a static collateralized debt obligation that closed June 1, 2006 and is managed by C-BASS Investment Management LLC. C-BASS XVI has a portfolio comprised primarily of subprime residential mortgage-backed securities (78.3%), Alternative-A RMBS (14.5%), prime RMBS (1.4%), structured finance CDOs (0.6%) and other diversified SF assets. Subprime RMBS bonds of the 2005 and 2006 vintages account for approximately 27.2% and 49.5% of the portfolio, respectively. All of the Alt-A RMBS are 2005 vintage. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime RMBS, Alt-A RMBS and SF CDOs with underlying exposure to subprime RMBS. Since the last rating action on Nov. 21, 2007, approximately 68.9% of the portfolio has been downgraded, and 18.5% of the portfolio is currently on Rating Watch Negative. Actual credit deterioration exceeds the level of downgrades that Fitch assumed in the November 2007 review, whereby 60.1% of the assets in the portfolio now carry a rating below the rating Fitch assumed in November 2007. The downgrade reflects the continued credit deterioration in subprime RMBS as well as growing concerns with the performance of Alt-A RMBS. Additionally, Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. The ratings of the class A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the transaction's governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings on classes C and D address the likelihood that investors will receive ultimate and compensating interest payments, as per the transaction's governing documents, as well as the stated balance of principal by the legal final maturity date. C-BASS CBO: Continued Credit Decline Cues Fitch to Junk Ratings --------------------------------------------------------------- Fitch Ratings has downgraded four classes of notes issued by C-BASS CBO XV LTD and removed all classes from Rating Watch Negative. These rating actions are effective immediately: -- $544,123,161 class A to 'CCC' from 'BBB+'; -- $39,100,000 class B to 'CC' from 'BBB-'; -- $44,800,000 class C to 'C' from 'BB'; -- $18,284,000 class D to 'C' from 'B'. C-BASS XV is a static collateralized debt obligation that closed Feb. 16, 2006 and is managed by C-BASS Investment Management LLC. C-BASS XV has a portfolio comprised primarily of subprime residential mortgage-backed securities (67.3%), Alternative-A RMBS (21.4%), commercial mortgage backed securities (4.8%), prime RMBS (1.3%) and other diversified structured finance assets. Subprime RMBS bonds of the 2005 and 2006 vintages account for approximately 62% and 5.3% of the portfolio, respectively. All of the Alt-A RMBS are 2005 vintage. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime RMBS and Alt-A RMBS. Since the last rating action on Nov. 21, 2007, approximately 66.9% of the portfolio has been downgraded, and 13.4% of the portfolio is currently on Rating Watch Negative. Actual credit deterioration exceeds the level of downgrades that Fitch assumed in the November 2007 review, whereby 64.3% of the assets in the portfolio now carry a rating below the rating Fitch assumed in November 2007. The downgrade reflects the continued credit deterioration in subprime RMBS as well as growing concerns with the performance of Alt-A RMBS. Additionally, Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. The ratings of the class A and B notes address the likelihood that investors will receive full and timely payments of interest, as per the transaction's governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings on classes C and D address the likelihood that investors will receive ultimate and compensating interest payments, as per the transaction's governing documents, as well as the stated balance of principal by the legal final maturity date. CATHOLIC CHURCH: Judge Jackwig Confirms Davenport's Plan -------------------------------------------------------- The Diocese of Davenport stepped Judge Lee M. Jackwig of the U.S. Bankruptcy Court for the Southern District of Iowa through the 16 statutory requirements under Section 1129(a) of the Bankruptcy Code necessary to confirm its Second Amended Joint Plan of Reorganization: A. Section 1129(a)(1) requires that the Joint Plan comply with all applicable provisions of the Bankruptcy Code, which includes compliance with Sections 1122 and 1123, governing classification and contents of the Plan. The Joint Plan provides for the classification of Claims and treatment of each class of Claims. As specified in the Plan, only Class 5 General Unsecured Claims, Class 6 Other Tort and Employee Claims, and Class 7 Tort Claims are impaired. There are no known Class 6 Claims. The classification of Claims set forth in the Joint Plan complies and satisfies Section 1122 and subsections (1), (2) and (3) of Section 1123(a). Section 1123(a)(4) requires that all claims be treated equally, and is satisfied when the class members are subject "to the same process for claim satisfaction." Disparate treatment of claims are permissible under Section 1123(a)(4) if the claim holder agrees to a less favorable treatment. The holders of Class 7 Tort Claims are subject to the same process for claim satisfaction, and may elect amongst the treatment options specified in the Plan. Thus, the Joint Plan complies with Section 1123(a)(4). The Joint Plan provides adequate means for its implementation and consummation as required by Section 1123(a)(5). On the Plan's effective date, the Diocese will transfer to the Settlement Trustee $33,100,000 in cash, and deliver a standard Iowa form of deed to the Chancery property. The Diocese is a non-profit corporation, and does not issue equity securities. Therefore, Section 1123(a)(6) is not applicable. The Diocese assures the Court that the selection of the Reorganized Debtor's management is consistent with the best interest of creditors and public policy. For these reasons, the Joint Plan complies with Section 1129(a)(1). B. Section 1129(a)(2) requires the Plan proponent to have complied with the provisions of the Bankruptcy Code. The proponents to the Joint Plan are the Diocese and the Official Committee of Unsecured Creditors. The Plan Proponents have acted in compliance with the Bankruptcy Code throughout the pendency of the Diocese's bankruptcy case. An objection was filed, and later withdrawn, by Iowa City Regina High School. Another objection was filed by ACE American Insurance Company. ACE's objection was resolved pursuant to a stipulation among ACE, the Diocese, and the Creditors Committee. No one else has filed an objection. The Diocese assures Judge Jackwig that it has complied with all of its duties under the Bankruptcy Code, including the filing of a complete schedule of assets and liabilities, and a complete statement of financial affairs that included sufficient disclosure of its property and of property held for others. The Diocese, therefore, has satisfied Section 1129(a)(2). C. Section 1129(a)(3) requires that a plan of reorganization be "proposed in good faith and not by any means forbidden by law." Unless there is an objection to a plan from a party that has standing to object, a Bankruptcy Court may make a finding of good faith without receiving any evidence at the time of the confirmation hearing. The Plan fairly and equitably treats the claims of creditors, including those who have suffered abuse. In addition, the Plan provides the Diocese with a fresh start and allows it to continue its Catholic ministry. Under the Plan, General Unsecured Creditors will be paid in full. All of the Tort Claimants, who voted on the Plan, voted to accept the Plan. Only one Tort Claimant voted to reject the Plan. The Plan also provides for the full payment of all Court-approved professional fees and the full payment of all priority claims. Thus, the Plan has been proposed in good faith, and complies with Section 1129(a)(3). D. Section 1129(a)(4) requires that any payment for services in connection with the Joint Plan has either been approved by or is subject to the Court's approval as reasonable. The Joint Plan provides that all pre-confirmation professional fees will be subject to approval by the Court. All of the orders approving the employment of professionals require the Court's approval and in full compliance with the Bankruptcy Code before the disbursement of any fees and costs. Hence, Section 1129(a)(4) is satisfied. E. Section 1129(a)(5) requires the disclosure of the identities of the Debtor's management post-bankruptcy. The administration of the Reorganized Debtor will continue with the officers and directors currently holding those positions, as disclosed in the Amended Disclosure Statement. Continuation of the Diocese's current management is consistent with the best interest of creditors and public policy. The current management is in the best position to ensure that all obligations under the Plan will be fulfilled. Thus, Section 1129(a)(5) is satisfied by the Plan. F. No regulatory agency governs rates charged by the Diocese, and therefore, Section 1129(a)(6) is not applicable to Davenport's Chapter 11 case. G. Section 1129(a)(7)(A) requires that (i) all impaired claims accept the plan, or (ii) the holders of the impaired claims will receive at least as much under the plan as they would receive in a Chapter 7 liquidation of the Debtor. The Diocese says that the overwhelming majority of the creditors, including the Tort Claimants, agree and have supported the Plan. Therefore, the Plan satisfies the best interests of creditors test of Section 1129(a)(7). Paying all classes, other than Class 7, out of future operating funds derived by the Reorganized Debtor and paying the Tort Claimants out of a dedicated fund of $37,000,000 leaves all creditors better off. For these reasons, the Joint Plan complies with Section 1129(a)(7). H. Section 1129(a)(8) provides that, with respect to each class of claims, the class has either accepted the Plan, or is not impaired under the Plan. Each of the impaired classes have voted overwhelmingly to accept the Plan. Therefore, the requirements of Section 1129(a)(8) have been met, and the Plan Proponents are not required to comply with the provisions of Section 1129(b). I. Section 1129(a)(9)(A) requires that all priority claims are to be paid in cash as of the Effective Date. The Plan so provides and, therefore, complies with Section 1129(a)(9)(A). Pursuant to Section 1129(a)(9)(B), the claims entitled to priority under Sections 507(a)(3) to (a)(7) of the Bankruptcy Code must receive under the Plan either deferred cash or cash payments equal to the allowed amount of the claims. The claims are to be paid in full, are, therefore, unimpaired, and are conclusively deemed to have accepted the Plan. Section 1129(a)(9)(C) requires, and the Plan provides, that tax claims will be paid, and will receive a value equal to the allowed amount of the claim. Hence, Section 1129(a)(9)(C) is satisfied. J. Section 1129(a)(10) requires that if a class of claims is impaired, at least one class of claims that is impaired under the plan must accept the plan exclusive of insider votes. The Joint Plan includes two impaired classes, which have voted to accept the Joint Plan. Thus, the requirements of Section 1129(a)(10) have been met. K. Section 1129(a)(11) requires that confirmation of the Plan is not likely to be followed by liquidation, or further financial reorganization of the Diocese. Feasibility does not connote a guarantee of success, but only a reasonable prospect of success and workability. The Plan provides for a global settlement for $37,000,000, and the establishment of a Settlement Trust to process and pay the Tort Claims made against the Diocese and the Catholic Entities. The Settlement Trust will be funded with $33,100,000 in cash and the transfer of the Diocese's Chancery property, which has an appraised value of $3,900,000. The cash payment to the Settlement Trust is from a $19,500,000 settlement payment from certain settling insurers, a $5,900,000 payment by the Catholic Entities, and $7,700,000 payment by the Diocese. The Diocese will borrow up to $2,000,000 from Quad City Bank & Trust to make its payment under the Plan. All funds payable by the Diocese have been raised, and will be available on the Effective Date, provided the settlements are approved. The funds will be distributed pursuant to the terms and conditions of the Plan. Therefore, the Plan fully complies with Section 1129(a)(11). L. Section 1129(a)(12) requires that certain fees listed in Section 1930 of the Judicial and Judiciary Procedures Code, as determined by the Court at the confirmation hearing, be paid or that other provisions be made for their payment. The payment of all administrative expenses, including the U.S. Trustee's fees, is provided in the Joint Plan. Therefore, it fully complies with Section 1129(a)(12). M. There are no retiree benefits paid by the Diocese and, therefore, Section 1129(a)(13) is not applicable. In addition, Sections 1129(a)(14) and (15) are also not applicable. O. All transfers of property under the Joint Plan comply with non-bankruptcy law. Therefore, Section 1129(a)(16) is satisfied. Finding that the Second Amended Joint Plan complies with the statutory requirements, Judge Jackwig confirmed Davenport's Plan on April 30, 2008. The Court also approved the form of the Settlement Trust Agreement, and the allocations of assets to the funds under the Settlement Trust. Robert L. Berger was appointed as the Settlement Trustee, while Richard M. Calkins was appointed as special arbitrator. Judge Jackwig noted that the Diocese's Unknown Claimants Representative, Michael Murphy of Alix Partners LLP, has exercised his sound and reasoned business judgment in agreeing to the establishment of the $2,500,000 Unknown Tort Claims Fund. Judge Jackwig commented that the bankruptcy case, and the terms of the Settlement Agreement represented legal anomalies for the Court, in which the usual creditors and debtors are typically corporate giants, and not churches and parishioners, the Des Moines Register reports. "I think we can never forget about this," Judge Jackwig said. The Court also expressed concern that the Diocese will not effectively enforce the non-monetary provisions of the Plan, the Register reports. "These nonmonetary aspects are right on target. It's what should be done," Judge Jackwig said. "It's my hope that the diocese can do everything it can, that the bishop can do everything he can, to really step up to the plate here. We can never forget about this -- we need to continue to be aware of human nature." To ensure compliance with the non-monetary undertakings, Judge Jackwig directed the Diocese to file with the Court a yearly report for the next three years after the entry of the Confirmation Order, confirming that the Reorganized Debtor and the Catholic Entities have complied. Judge Jackwig held that nothing in the Plan or the Confirmation Order discharges any of the Diocese's or the Reorganized Debtor's obligations under the Court-approved Settlement Agreements, and that the obligations will survive the Confirmation of the Plan. She added that nothing in the Confirmation Order will impair, affect or release the rights of any non-settling insurer with respect to any tort claims, including all insurance company defenses. Parties Were Satisfied with Court's Ruling Bishop Martin Amos issued a statement asking the Diocese's parishioners to join him in protecting the children and to reconcile with those harmed. "The Church must always keep the protection of children in the forefront of our mission of service to others," he wrote. "Much has been learned from our past mistakes and from these heinous crimes against the most vulnerable and against the very teaching of the church. We have gone through a learning process that now promotes transparency over secrecy and justice over the threat of scandal. The lessons have been difficult to learn. I am confident that by going through this process, the Church is becoming closer to what the Gospel calls her to be, configured to Christ, our Hope," Bishop Amos said. Craig Levien, Esq., counsel for certain claimants, told the Quad- City Times that he was pleased with the outcome of the confirmation hearing. He added, however, that the Diocese "will receive a financial discharge but the stain of the wrongdoing will not be as easily washed away." Michl Uhde, a claimant whose $1,500,000 jury verdict against the Diocese prompted it to file for bankruptcy, said that settling the case as quickly as possible was most important to him and other survivors, The Catholic Messenger reports. "The [victims] want it over and done with and they want to go on with their lives," he said. "Nobody can put a dollar value on lives that have been ruined," Mr. Uhde stated. He noted that the $37,000,000 settlement is a reasonable figure. He also pointed out the importance of the non-monetary measures. Committee Supports Plan Prior to the Court's approval of the Plan, the Creditors Committee filed a statement supporting the Plan. Hamid R. Rafatjoo, Esq., at Pachulski Stang Ziehl & Jones LLP, in Los Angeles, California, informed the Court that Davenport's bankruptcy case is different from other U.S. Catholic dioceses that have filed bankruptcy because it has an entirely different approach to its Chapter 11 case and Creditors Committee. Mr. Rafatjoo said that the Diocese has granted the Creditors Committee access to files, and has allowed the Committee to investigate assets and Diocesan structure, which resulted to lower professional fees. He noted that instead of litigating issues between them, the Diocese and the Creditors Committee negotiated and settled the issues. The Creditors Committee believes that the Plan provides the best means for implementing a resolution to the bankruptcy case. Hence, it has undertaken a tremendous effort to reach out to the survivors and encourage them to vote for the Plan, which resulted to the overwhelming number of votes in supporting the Plan. A full-text copy of the Order confirming Davenport's Second Amended Joint Plan of Reorganization is available for free at: http://bankrupt.com/misc/Davenport_Order_AprrovingJointPlan.pdf About Diocese of Davenport The Diocese of Davenport in Iowa filed for chapter 11 protection (Bankr. S.D. Ia. Case No. 06-02229) on Oct. 10, 2006. Richard A. Davidson, Esq., at Lane & Waterman LLP, represents the Davenport Diocese in its restructuring efforts. Hamid R. Rafatjoo, Esq., and Gillian M. Brown, Esq., at Pachulski Stang Zhiel Young Jones & Weintraub LLP represent the Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Davenport Diocese reported $4,492,809 in assets and $1,650,439 in liabilities. The Court approved on April 3, 2008, the Diocese of Davenport's second amended disclosure statement explaining its joint plan of reorganization. The Committee is a proponent to the plan, which was confirmed on April 30, 2008. (Catholic Church Bankruptcy News, Issue No. 124; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). CBA COMMERCIAL: Asset Liquidation Cues S&P to Put Default Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class M-6 commercial mortgage pass-through certificate from CBA Commercial Assets LLC's series 2004-1 to 'CCC-' from 'CCC+'. Concurrently, S&P lowered its rating on class M-7 to 'D' from 'CCC-'. The downgrade of class M-7 reflects a $624,390 principal loss to the outstanding principal balance of the security due to the liquidation of two assets that were previously with the special servicer, Midland Loan Services Inc. The downgrade of class M-6 reflects a reduction in credit enhancement following the liquidation and the expectation of future losses associated with the remaining specially serviced assets. The two liquidated assets are 1836 and 1842 Augusta Drive and 1785-1789 E. Raines Road. The 1836 and 1842 Augusta Drive asset had a total exposure of $739,224 and was secured by a 36-unit multifamily property in Lexington, Kentucky. The 1785-1789 E. Raines Road asset had a total exposure of $276,859 and was secured by a 12-unit multifamily property in Memphis, Tennessee. The two assets had loss severities of 88% and 71%, respectively. CENTRAL GARDEN: Board Director Bruce Westphal Retires ----------------------------------------------------- Bruce A. Westphal disclosed his retirement as a member of the board of directors of Central Garden & Pet Company, effective April 30, 2008. Mr. Westphal has served as a director of the company and chairman of the board's audit committee since 1999. Mr. Westphal is retiring from the board to spend more time with his family and pursue personal interests and not as a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. Alfred A. Piergallini, a director of the company since 2004, will succeed Mr. Westphal as the chairman of the audit committee. Headquartered in Walnut Creek, Calif., Central Garden & Pet Company (Nasdaq: CENT/CENTA) -- http://www.central.com/-- markets and produces branded products for the lawn & garden and pet supplies markets. The company's products are sold to specialty independent and mass retailers. The company also provides a host of other application-specific Pet brands and supplies. Central Garden & Pet Company has approximately 5,000 employees, primarily in North America and Europe. * * * As reported in the Troubled Company Reporter on Feb. 25, 2008, Standard & Poor's Ratings Service affirmed its 'CCC+' senior subordinated debt ratings on Central Garden & Pet Co. The outlook is negative. CERULLO ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Cerullo Enterprises, L.L.C. 3900 North Causeway Blvd., Ste. 1045 Metairie, LA 70002 Tel: (504) 831-6945 Bankruptcy Case No.: 08-10893 Type of Business: The Debtor is a business consultant. Chapter 11 Petition Date: April 25, 2008 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: John J. Fenerty, III, Esq. Email: jfenlaw@bellsouth.net 3850 North Causeway Blvd. Ste. 630 Metairie, LA 70002 Tel: (504) 837-1000 Fax: (504) 836-5040 Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Performance Food Group Food Vendor $22,240 Accounting Dept. P.O. Box 54946, New Orleans, LA 70154-4946 New Orleans Fish Seafood Vendor $21,000 Accounting Dept. House, 921 So. Dupre St., New Orleans, LA 70125 Adams Produce, P.O. Food Vendor $17,700 Accounting Dept. Box 2682 Birmingham, AL 35202 Bon Secour Fisheries, Inc. Food Vendor $14,000 Emerald Coast Finest Food Vendor $13,960 Oasis Outsource Payroll Management $12,000 Co. AFCO Credit Corp., Insurance Payment $11,660 Plan Sysco Food Food Vendor $10,100 Vincent Piazza, Jr. & Seafood Vendor $9,928 Sons Seafodd, Inc. All Seasons Trade debt; repair $9,240 work City of Pensacola Gas Supply $5,800 Coca-Cola Bottling Co. Trade debt; beverage $4,740 Gulf Power Electric Electric Power $4,700 Taylor Linen Services, Trade; Linen Service $4,670 Emerald Coast Utility Water Supply $4,500 Authority Thompson Meat Food Trade Vendor $3,950 PR Cleaning Supplies Trade debt; cleaning $3,900 supplies Butler Foods Food $3,233 American Foods Food Trade Vendor $3,090 Waste Management Trade debt; disposal $2,840 services CHARMING SHOPPES: Demanded Documents from Investors, Post Says -------------------------------------------------------------- The New York Post's Kaja Whitehouse and James Covert report that Charming Shoppes, Inc. in April subpoenaed 17 of its investors to find out whether they were holding talks with Crescendo Partners and Myca Partners, two hedge funds that are seeking three seats on the company's board. Citing unnamed sources, The Post says the subpoenas were part of a legal battle the company is waging against the hedge funds ahead of its May 8 annual shareholder meeting. The subpoenas were subsequently squashed by the courts, The Post says. The Post relates that Harbinger Capital and Third Point were among the investors that received subpoenas. The Post, citing a person familiar with the situation, says the notices went to four of the top 10 holders and impacted 40% of Charming Shoppes' shareholder base. Sources told The Post Charming Shoppes was seeking e-mails and other correspondence related to the proxy campaign that might point to violations of securities rules that require disclosure of agreements between shareholders. Charming Shoppes argued that, in addition to improper communications, the hedge funds struck an "agreement to split any profits generated by their scheme with at least one undisclosed hedge fund," according to the complaint, The Post says. The hedge funds disputed the company's move, arguing that the lawsuit is "a baseless attempt" by Charming Shoppes "to usurp corporate democracy and disenfranchise shareholders," The Post relates. As reported by the Troubled Company Reporter on April 29, Crescendo Partners and Myca Partners, which has a combined stake of 7.9% in the company, are seeking to install Arnaud Ajdler, Managing Director of Crescendo; Michael Appel, Managing Director of Quest Turnaround Advisors; and Robert Frankfurt, President of Myca Partners, on the company's board. Crescendo Partners and Myca Partners have been pushing for change in Charming Shoppe to boost stock price and improve business strategy and execution. The group has named itself the Charming Shoppes Full Value Committee. Charming Shoppes, on the other hand, is pushing for the re- election of Dorrit J. Bern, Alan Rosskamm and M. Jeannine Strandjord at the annual shareholders' meeting. According to HedgeCo.Net, Charming Shoppes has assured shareholders that they have streamlined business operations, reduced SG&A expenses and capital expenditures, and improved cash flow. They warn that if the hedge funds do take control, their actions would be highly disruptive to the company, the report stated. Glass Lewis & Co., an independent proxy voting advisory services firm, has recommended that Charming Shoppes' shareholders reject the two hedge funds' director nominees. "Overall, we believe that Mr. Appel has correctly identified prolonged poor performance and excessive compensation practices at Charming Shoppes," Glass Lewis concluded. On Charming Shoppes' failure to align compensation with performance, Glass Lewis noted: "Charming Shoppes executive compensation received a "F" grade in our proprietary pay-for-performance model, which uses 36 measurement points. . . . The CEO was paid above the median CEO in these peer groups. Glass Lewis said the Company paid more than its peers, but performed worse than its peers. "Given the repeated failure to properly align compensation with the Company's performance, we would ordinarily recommend voting against all members of the compensation committee (Mr. Albertini and Mses. Curl, Davies and Hudson). . . . However, none of these directors are up for election at this year's meeting. Thus, we encourage the board to facilitate the removal of these directors based on their failure to fulfill their duty to shareholders in this regard." In criticizing Charming Shoppes' prolonged poor performance, Glass Lewis noted: "In this case, we believe the Dissident has succeeded in demonstrating a failure on the board's part to address a pattern of poor performance relative to the Company's peers. . . . We find that the Company's return on equity and return on assets fell below the mean and median derived from this set of peers for the last five fiscal years (source: FactSet). In addition, the Company's EBITDA margin, operating margin, and net margin fell below the mean and median derived from this set for the last five fiscal years." "We also find that the company's stock price has underperformed relevant indices in recent years. During the two year period prior to announcement of the proxy contest (Jan. 11, 2006 to Jan. 11, 2008), the company's stock price fell by approximately 66.9% compared to declines of approximately 10.2% by the S&P Retail Index and 45.3% by the S&P Small Cap Apparel Retail Index (source: FactSet)." "Over the past year, however, both the Company's operating performance and stock price performance have deteriorated further." About Charming Shoppes Headquartered in Bensalem, Pennsylvania, Charming Shoppes Inc. (NASDAQ:CHRS) -- http://www.charmingshoppes.com -- is a retailer focused on women's plus-size specialty apparel. The company operates in two segments: retail stores segment and direct-to- consumer segment. The company's retail stores segment operates retail stores and related e-commerce websites through brands, such as Lane Bryant, Fashion Bug, Catherines Plus Sizes, Lane Bryant Outlet and Petite Sophisticate outlet. The company's direct-to- consumer segment operates a number of apparel, accessories, footwear, and gift catalogs and related e-commerce Websites through its Crosstown Traders business. During the fiscal year ended Feb. 3, 2007, the sale of plus-size apparel represented approximately 74% of the Company#s total net sales. As of Feb. 2, 2008, Charming Shoppes Inc. operated 2,409 stores in 48 states. * * * As reported in the Troubled Company Reporter on March 27, 2008, Moody's Investors Service downgraded the corporate family and probability of default ratings of Charming Shoppes, Inc. to B2 from Ba3. The outlook is stable. CHEYNE HIGH: Moody's Downgrades Ratings on Four Classes of Notes ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Cheyne High Grade ABS CDO, Ltd.: Class Description: $23,000,000 Class A-2 Floating Rate Notes Due 2039 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: $31,000,000 Class B Floating RateNotes Due 2039 -- Prior Rating: Aa2 -- Current Rating: Aa3, on review for possible downgrade Class Description: $30,000,000 Class C Floating Rate Deferrable Interest Notes Due 2039 -- Prior Rating: A3 -- Current Rating: B3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $16,000,000 Preference Shares ($16,000,000 Aggregate Liquidation Preference) -- Prior Rating: Baa3 -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CHILDREN'S TRUST: Fitch Puts 'BB' Rating on $56,875,888 Bonds ------------------------------------------------------------- Fitch rated Children's Trust, tobacco settlement asset-backed bonds, series 2008 bonds (Commonwealth of Puerto Rico) as: -- $139,003,082.40 series 2008A turbo capital appreciation bonds 'BBB-' due May 15, 2057; -- $56,875,888.00 series 2008B turbo capital appreciation bonds 'BB' due May 15, 2057. CHRYSLER LLC: Seeks to Sell Two Michigan Axle Plants for $400 Mil. ------------------------------------------------------------------ Chrysler LLC offered to sell two axle facilities in Michigan for $400 million, and approached private equity firms and axle suppliers Dana Holding Corp. and American Axle and Manufacturing Holdings Inc., The Wall Street Journal reports citing unnamed sources. WSJ relates that Chrysler is selling its unfinished Maryville plant and the Detroit Axle. However, no buyers have come forward. Chrysler did not comment on the matter. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Dec. 10, 2007, Standard & Poor's Ratings Services revised its recovery rating on Chrysler's $2 billion senior secured second-lien term loan due 2014. The issue-level rating on this debt remains unchanged at 'B', and the recovery rating was revised to '3', indicating an expectation for 50% to 70% recovery in the event of a payment default, from '4'. Both the issue-level and recovery ratings on Chrysler's $7 billion first-lien term loan due 2013 remain unchanged. The issue-level rating on this debt is 'BB-' with a recovery rating of '1', indicating an expectation for 90% to 100% recovery in the event of a payment default. CIMARRON CDO: Moody's Reviews Low-B Ratings on Two Note Classes --------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Cimarron CDO, Ltd.: Class Description: Class A-2 Second Priority Senior Secured Floating Rate Notes due 2040 -- Prior Rating: Aaa -- Current Rating: Aa1, on review for possible downgrade Class Description: Class A-3 Third Priority Senior Secured Floating Rate Notes due 2040 -- Prior Rating: Aa2 -- Current Rating: Aa3, on review for possible downgrade Class Description: Class B Senior Secured Deferrable Fixed Rate Notes due 2040 -- Prior Rating: A3 -- Current Rating: Ba1, on review for possible downgrade Class Description: Class C Junior Secured Deferrable Fixed Rate Notes due 2040 -- Prior Rating: Baa3 -- Current Rating: B1, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CINCINNATI BELL: Earns $12.9 Million in First Qtr. Ended March 31 ----------------------------------------------------------------- Cincinnati Bell Inc. disclosed Wednesday its financial results for the first quarter ended March 31, 2008. Net income for the quarter was $12.9 million, compared with net income of $22.6 million for the same period last year. Before special items, net income was $27.3 million, up $4.3 million or 19% from last year. Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) equaled $119.6 million, up $2.9 million, or 2.5% from a year ago. The company reported revenue of $349.0 million, an increase of $33.0 million or 11% from the prior year quarter. Operating income was $57.1 million and included a pre-tax restructuring charge of $24.0 million related to the company's previously announced restructuring plan and labor agreement. This compares with operating income of $77.9 million during the first quarter of 2007. "Cincinnati Bell achieved another outstanding quarter with continued momentum in both revenue and Adjusted EBITDA," said Jack Cassidy, president and chief executive officer of Cincinnati Bell Inc. "Contributing to the quarter's success are Cincinnati Bell Wireless and ZoomTown high-speed Internet service, businesses we launched 10 years ago this year and that today provide superior value and network reliability to more than 800,000 subscribers in Greater Cincinnati and Dayton." Quarterly Highlights Quarterly revenue increased 11% or $33.0 million from a year ago reflecting growth of $15.0 million in service revenue and $18.0 million in equipment revenue. In the quarter, Cincinnati Bell purchased 4.1 million shares of common stock for a total of $16.7 million. At the end of the first quarter, the company had $133.0 million remaining in its current repurchase authorization. Cincinnati Bell expects to continue repurchases and the timing and nature are subject to market conditions and applicable securities laws. On February 27, Cincinnati Bell employees who are represented by the Communication Workers of America ratified the labor agreement reached between the company and union officials in January. The agreement included a retirement offer to eligible employees. As a result, Cincinnati Bell incurred a pre-tax restructuring charge of $24.0 million in the quarter. At the April 25 annual meeting, shareholders approved an amendment to declassify the Board and require an annual election of directors and an amendment to implement a majority vote standard for the election of directors. The company initiated both amendments to enhance its accountability to shareholders. Financial and Operations Overview "We are pleased with the financial performance in each of our business segments," said Brian Ross, chief financial officer of Cincinnati Bell Inc. "Investments in our Wireless and Technology Solutions segments are producing returns that enable execution of our share repurchase program and the purchase of our higher coupon debt." Free cash flow was $23.6 million in the quarter and capital expenditures were $60.7 million, compared with free cash flow of $22.4 million and capital expenditures of $42.3 million in the first quarter of 2007. Net debt totaled $1.99 billion, down $3.0 million from the end of the first quarter of 2007. The company retired $40.0 million of their 8 3/8% bonds during the quarter. About Cincinnati Bell Headquartered in Cincinnati, Ohio, Cincinnati Bell Inc. (NYSE: CBB) -- http://www.cincinnatibell.com/-- provides integrated communications solutions including local, long distance, data, Internet, and wireless services. In addition, the company provides office communications systems as well as complex information technology solutions including data center and managed services to businesses ranging in size from start-up companies to large enterprises. Cincinnati Bell conducts its operations through three business segments: Wireline, Wireless, and Technology Solutions. * * * At Dec. 31, 2007, the company's consolidated balance sheet showed $2.0 billion in total assets and $2.7 billion in total liabilities, resulting in a $667.6 million total stockholders' deficit. CKRUSH INC: Rosenberg Rich Expresses Going Concern Doubt -------------------------------------------------------- Rosenberg Rich Baker Berman & Company raised substantial doubt on the ability of Ckrush, 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 significant operating losses and significant working capital deficit. The company posted a net loss of $6,641,696 on total revenues of $1,087,475 for the year ended Dec. 31, 2007, as compared with a net loss of net loss of $11,759,392 on total revenues of $1,646,278 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $2,470,326 in total assets and $13,295,223 in total liabilities, resulting in $10,824,897 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2ae7 About Ckrush Ckrush, Inc., (OTC BB: CKRU.OB) -- http://www.ckrush.net-- operates as an entertainment and interactive media company. The company involves in various projects, including production or co- production of feature films, digital versatile disk titles, television programming, and other similar products. It also develops, acquires, and produces digital content and businesses to the teen and young adult demographic. In addition, Ckrush, Inc., through its subsidiaries, develops and maintains Web sites, online communities, and technology platforms that allow users to electronically create and publish content, including video; share that content with others; and connect with others based upon common interests. The company was founded in 1996 and is headquartered in New York. COMM 2005-C6: S&P Downgrades Ratings on 10 Certificate Classes -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 10 classes of commercial mortgage pass-through certificates from COMM 2005-C6 and removed them from CreditWatch, where they were placed with negative implications on April 18, 2008. At the same time, S&P affirmed its ratings on the remaining 14 certificates from this series. The downgrades reflect anticipated credit support erosion upon the eventual resolution of three of the four specially serviced assets. The downgrades of the subordinate certificates also reflect reduced trust liquidity that will result from an appraisal reduction amount that S&P expect to be applied to the ninth- largest asset in the pool. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the April 10, 2008, remittance report, the collateral pool consisted of 137 loans with an aggregate trust balance of $2.245 billion, compared with 137 loans totaling $2.273 billion at issuance. The master servicer, Capmark Finance Inc., reported financial information for 99% of the nondefeased loans. The servicer-provided information comprised full-year 2006 (36%), interim 2007 (4%), and full-year 2007 (57%) data. Using this information, Standard & Poor's calculated a weighted average debt service coverage of 1.67x, up from 1.60x at issuance. There are four severely delinquent loans in the pool that are also with the special servicer, Capmark Finance Inc.: one is 90-plus-days delinquent, one is in foreclosure, and two are real estate owned. To date, the trust has not experienced any losses. Details of the specially serviced assets are: -- Communities at Southwood loan, the ninth-largest loan in the pool and largest loan with the special servicer, has a total exposure of $50.4 million, including interest and advances thereon. In addition, the borrower's equity interest in the property secures a $4.0 million mezzanine loan. The loan is secured by a 1,286-unit multifamily complex in Richmond, Virginia, and was transferred to Capmark in February 2008 due to monetary default. Year- end 2007 DSC for the property was 0.50x and occupancy was 70%, compared with a DSC of 1.42x and an occupancy of 98% at issuance. Standard & Poor's loss projection for this asset reflects S&P's revaluation of the properties using the borrower's 2007 financial statements, current market occupancy and rental rate information, and estimates for a stabilization period and deferred maintenance. S&P's loss projection also incorporated a new draft appraisal and Capmark's internal valuation. Standard & Poor's expects the liquidation of the asset will result in a significant loss to the trust. -- The remaining exposures with the special servicer have MBS Co.-related borrowers and were transferred for monetary default. Details are: -- The Villas of Bristol Heights Apartments loan, the second- largest loan with the special servicer, has a total exposure of $29.2 million. The loan is secured by a 351-unit multifamily property in Austin, Texas. Capmark has received a third-party offer to transfer a controlling interest in the property, which would bring the loan current. If the assumption closes, Capmark will transfer the loan back to the master servicer after a 90-day period. -- The Oaks of Ashford Apartment Homes asset is REO and has a total exposure of $9.2 million. The asset is secured by a 199-unit multifamily property in Houston, Texas. There is a $3.3 million ARA in effect for this asset. -- The Oaks of Ashford Apartment Homes II asset is also REO and has a total exposure of $2.7 million. The asset is secured by a 56-unit multifamily property in Houston, Texas. There is a $1.0 million ARA in effect for this asset. The master servicer provided inspections for both REO assets, which characterized the properties as "poor." The top 10 exposures secured by real estate have an aggregate outstanding balance of $933.6 million (42%) and a weighted average DSC of 1.75, compared with 1.75x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. One property was characterized as "fair," while the remaining collateral was characterized as "good." Credit characteristics for Lakewood Center, Loews Universal Hotel Portfolio, and 9701 Apollo Drive are consistent with those of investment-grade obligations. Details of the loans are: -- The largest exposure in the pool, Lakewood Center, has a trust balance of $200.0 million (10%) and a whole-loan balance of $250.0 million. The whole loan consists of a $218.0 million senior participation and a $32.0 junior participation, which is not securitized. The loan is collateralized by 1,885,129 sq. ft. of a 2,089,867-sq.-ft. regional mall in Lakewood, California. For the nine- months ended Sept. 30, 2007, DSC was 1.85x and occupancy was 88%. Standard & Poor's adjusted net cash flow for this loan is up 5% compared with its level at issuance. -- The sixth-largest exposure in the pool, Loews Universal Hotel Portfolio, has a trust balance of $65.0 million (3%) and a whole-loan balance of $450.0 million. The whole loan consists of five pari passu senior participations totaling $400.0 million and two pari passu junior participations totaling $50.0 million, which are securitized. The loan is collateralized by three full- service resort properties totaling 2,400 rooms, located near Universal Studios in Orland, Florida. For the year ended Dec. 31, 2007, DSC was 2.78x and the portfolio's weighted average daily rate was $222, up from $202 at issuance. Standard & Poor's adjusted NCF for this loan is comparable to its level at issuance. -- 9701 Apollo Drive has a balance of $6.5 million. The loan is collateralized by a 93,586-sq.-ft. office property in Largo, Maryland. For the year ended Dec. 31, 2007, DSC was 2.27x and occupancy was 96%. Standard & Poor's adjusted NCF for this loan is up 11% compared with its level at issuance. Capmark reported a watchlist of 11 loans ($140.5 million, 6%), and includes one of the top 10 exposures. The Tropicana Center loan is the seventh-largest exposure in the pool and the largest loan on the watchlist. The loan has a balance of $56.0 million (2%) and is secured by a 578,051-sq.-ft. retail property in Las Vegas, Nevada. The loan appears on the watchlist because the second- largest tenant, Wal-Mart Stores Inc. (AA/Stable/A-1+, 21% net rentable area) is now dark. For the year ended Dec. 31, 2007, occupancy was 54%, and the loan is scheduled to begin amortizing in August 2008. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered and Removed from Creditwatch Negative COMM 2005-C6 Commercial mortgage pass-through certificates series 2005-C6 Rating ------ Class To From Credit enhancement ----- -- ---- ----------------- E BBB+ A-/Watch Neg 6.83% F BBB- BBB+/ Watch Neg 5.69% G BB+ BBB/Watch Neg 4.56% H BB- BBB-/Watch Neg 3.54% J B BB+/Watch Neg 2.91% K B- BB/Watch Neg 2.40% L CCC+ BB-/Watch Neg 2.15% M CCC B+/Watch Neg 1.52% N CCC- B/Watch Neg 1.39% O CCC- B-/Watch Neg 1.18% Ratings Affirmed COMM 2005-C6 Commercial mortgage pass-through certificates series 2005-C6 Class Rating Credit enhancement ----- ------ ---------------- A-1 AAA 20.25% A-1A AAA 20.25% A-AB AAA 20.25% A-2 AAA 20.25% A-3 AAA 20.25% A-4 AAA 20.25% A-5A AAA 20.25% A-5B AAA 20.25% A-J AAA 12.65% B AA 10.63% C AA- 9.74% D A 8.10% X-C AAA N/A X-P AAA N/A N/A -- Not applicable. COMM 2005-LP5: Credit Support Erosion Cues S&P's Rating Downgrades ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the class N and O commercial mortgage pass-through certificates from COMM 2005-LP5. At the same time, S&P affirmed its ratings on 19 pooled certificates and three nonpooled certificates from this series. The downgrades reflect anticipated credit support erosion upon the eventual resolution of one of the three specially serviced assets, the Elizabeth Multifamily Portfolio. The affirmed ratings on the pooled certificates reflect credit enhancement levels that provide adequate support through various stress scenarios. The affirmed ratings on the nonpooled certificates reflect the full defeasance of the General Motors Building loan in September 2007. As of the April 10, 2008, remittance report, the collateral pool consisted of 136 loans with an aggregate trust balance of $1.714 billion, compared with 137 loans totaling $1.702 billion at issuance. The master servicer, Midland Loan Services Inc., reported financial information for 96% of the nondefeased loans. The servicer-provided information comprised full-year 2006 (33%), interim 2007 (17%), and full-year 2007 (46%) data. Using this information, Standard & Poor's calculated a weighted average debt service coverage of 1.84x, up from 1.72x at issuance. There are four delinquent loans in the pool: three are 30 days delinquent, and one is 90-plus-days delinquent and with the special servicer, CWCapital Asset Management LLC. To date, the trust has not experienced any losses. The top 10 exposures secured by real estate have an aggregate outstanding balance of $563.5 million (33%) and a weighted average DSC of 2.10x, up from 1.60x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for eight of the assets underlying the top 10 exposures. Three properties were characterized as "excellent," while the remaining collateral was characterized as "good." Credit characteristics for the Lakeside Mall, Continental Plaza, Woodfield Commons, and Chatham Ridge Shopping Center loan are consistent with those of an investment-grade obligation. Details of the loans are: -- The second-largest exposure in the pool, Lakeside Mall, has a trust balance of $91.8 million (5%) and a whole-loan balance of $183.9 million. The whole loan consists of a $91.9 million pari passu A-1 participation that serves as trust collateral in the GE Commercial Mortgage Corp. series 2005-C1 transaction; and a $91.9 million A-2 participation, which supports the pooled certificates in COMM 2005-LP5. The loan is collateralized by 643,375 sq. ft. of a 1,478,375-sq.- ft. regional mall in Sterling Heights, Michigan. For the year ended Dec. 31, 2007, the DSC was 1.89x and occupancy was 94%. Standard & Poor's adjusted net cash flow for this loan is down 7% compared to its level at issuance. -- The fourth-largest exposure in the pool, Continental Plaza, has a balance of $55.0 million (3%). The hyper-amortizing loan is collateralized by a 579,778-sq.-ft. office property in Chicago, Illinois. For the year ended Dec. 31, 2007, the DSC was 2.49x and occupancy was 90%. Standard & Poor's adjusted NCF for this loan is comparable to its level at issuance. -- The 15th-largest loan in the pool, Woodfield Commons, has a balance of $17.5 million. The loan is collateralized by a 207,583-sq.-ft. retail property in Schaumburg, Illinois. For the year ended Dec. 31, 2006, the DSC was 3.19x and occupancy was 99%. Standard & Poor's adjusted NCF for this loan is up 6% compared to its level at issuance. -- The 20th-largest loan in the pool, the Chatham Ridge Shopping Center, has a balance of $15.0 million. The loan is collateralized by a 175,744-sq.-ft. retail property in Chicago, Illinois. For the nine-month period ended Sept. 30, 2007, the DSC was 3.44x and occupancy was 67%. Standard & Poor's adjusted NCF for this loan is up 9% compared to its level at issuance. Details of the specially serviced loans are: -- Las Ventanas Apartments Homes loan is the 10th-largest loan in the pool and the largest loan with the special servicer, with a total exposure of $26.7 million. The loan is secured by a 376-unit multifamily property in Houston, Texas, and was transferred to CWCaptial in October 2007 after the borrower, an MBS Company-related entity, filed for bankruptcy. CWCapital has received a third-party offer to transfer a controlling interest in the property, and the loan will be brought current upon the ownership transfer. If the assumption closes and the loan is brought current, CWCapital will transfer the loan back to the master servicer after 90- days. -- The Elizabeth Multifamily loan consists of six multifamily properties totaling 287 units in Elizabeth, New Jersey, and has a total exposure of $15.2 million. The loan was transferred to the special servicer in December 2007 due to monetary default. The property reported a DSC of 0.70x as of year-end 2006. CWCapital is in the process of determining a workout strategy. -- The Galley Food Service loan is secured by a 25,705-sq.-ft. industrial property in Middlebury, Connecticut. The loan was transferred to the special servicer on March 6, 2008, due to monetary default. The loan is now current and will be returned to the master servicer in the coming months. Midland reported a watchlist of 19 loans ($296.8 million, 17%), including three of the top 10 exposures. Twelve loans ($95.2 million, 5.7%) have reported DSCs below 1.1x. Details of the three top 10 loans on the watchlist are: -- The 63 Madison Ave. loan is the largest loan in the pool and the largest loan on the watchlist. The loan has a trust balance of $105.0 million (6%) and a whole-loan balance of $165.0 million. The loan is secured by a 797,377-sq.-ft. office property in Manhattan. The loan appears on the watchlist because the largest tenant (50% of net rentable area) has filed for bankruptcy; however, the tenant sublets all of its leased space. The property reported a DSC of 2.83x as of year-end 2006. -- The Signature Ridge Apartments loan is the seventh-largest loan in the pool and has an outstanding balance of $35.9 million (2%). The loan is secured by a 612-unit multifamily property in San Antonio, Texas. The loan appears on the watchlist because the property was 84% occupied and reported a DSC of 0.96x as of year-end 2007. -- The 1156 Avenue of the Americas loan is the eighth-largest loan in the pool and has an outstanding balance of $33.6 million (2%). The loan is secured by a 75,416-sq.-ft. office property in Manhattan. The loan appears on the watchlist because the property reported a DSC of 1.04x as of year-end 2007. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered COMM 2005-LP5 Commercial mortgage pass-through certificates series 2005-LP5 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ N B- B 1.44% O CCC+ B- 1.18% Ratings Affirmed COMM 2005-LP5 Commercial mortgage pass-through certificates series 2005-LP5 Class Rating Credit enhancement ----- ------ ------------------ A-1A AAA 20.91% A-SB AAA 20.91% A-2 AAA 20.91% A-3 AAA 20.91% A-4 AAA 20.91% A-J AAA 13.72% B AA 10.85% C AA- 9.93% D A 8.23% E A- 6.93% F BBB+ 5.49% G BBB 4.57% H BBB- 3.53% J BB+ 2.74% K BB 2.35% L BB- 2.09% M B+ 1.83% GMB-1 AAA N/A GMB-2 AAA N/A GMB-3 AAA N/A X-C AAA N/A X-P AAA N/A N/A - Not applicable. COMSTOCK RESOURCES: S&P Affirms 'B+' Rating on Bois-Stone Deal -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Stone Energy Corp. and its 'BB-' corporate credit rating on Comstock Resources Inc. The outlook on both is stable. At the same time, S&P placed the issue ratings on Stone's subordinated notes and Comstock's senior notes on CreditWatch with negative implications. S&P rate Stone's subordinated notes 'B+', with a recovery rating of '3', which indicates its expectation of meaningful (50% to 70%) recovery in the event of default. S&P rate Comstock's senior notes 'B+', with a recovery rating of '5', which indicates its expectation of modest (10% to 30%) recovery in the event of default. "These rating actions follow the announcement that Stone has entered into a definitive agreement to acquire Bois d'Arc Energy Inc., in which Comstock holds a 49% ownership interest," said Standard & Poor's credit analyst Jeffrey Morrison. (Standard & Poor's does not rate Bois d'Arc Energy Inc.) Stone and Comstock are independent exploration and production firms focused in Gulf of Mexico. The CreditWatch listings on Stone and Comstock's subordinated notes and senior notes issue ratings, respectively, reflect the potential that S&P could lower the issue ratings and change the recovery ratings in the near term. S&P's concerns derive from changes to the capital structure and assets caused by the transaction--specifically, increased secured debt capacity at Stone, and a reduced enterprise valuation at Comstock after the sale of its interests in Bois d'Arc. S&P expect to resolve the CreditWatch in the near term. CONEXANT SYSTEMS: Terminates Daniel Artusi as President & CEO ------------------------------------------------------------- Conexant Systems, Inc. said that on April 21, 2008, it executed an agreement with Daniel A. Artusi, pursuant to which: -- Mr. Artusi's service as President and Chief Executive Officer of the company ceased effective as of April 14, 2008; and -- Mr. Artusi became a non-executive employee of the company, which position he held through April 25, 2008. The agreement became effective on April 29, 2008. Pursuant to the Artusi Agreement, the company elected to terminate Mr. Artusi's employment as President and Chief Executive Officer with the company per section 8(b)(ii) of the original employment agreement between Mr. Artusi and the Company dated June 21, 2007. Mr. Artusi will receive certain compensation and benefits that he is entitled to receive pursuant to the 2007 Agreement as a result of his termination "without cause" from the company. Pursuant to his employment agreement, Mr. Artusi will receive a lump sum separation payment in full and final settlement of matters relating to his employment with the company of $2,716,438, which payment will be paid within 30 days of April 25, 2008. In addition, all of Mr. Artusi's stock options and shares of non- performance based restricted stock will vest and all vested stock options may be exercised for two years from the date of termination, after which time all of his stock options will expire. In addition, Mr. Artusi is restricted from competing with the company or soliciting employees or customers of the Company, which provisions will apply to Mr. Artusi until April 25, 2009. Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -– http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. * * * Conexant currently carries Standard & Poor's Ratings Services' B- rating with a negative outlook. Moody's Investor Service placed Conexant Systems Inc.'s long term corporate family and probability of default ratings at 'Caa1' in October 2006. The ratings still hold to date with a stable outlook. CONEXANT SYSTEMS: Names D. Scott Mercer as Chief Executive officer ------------------------------------------------------------------ In a regulatory filing with the Securities and Exchange Commission, Conexant Systems, Inc. said that board member D. Scott Mercer has been named chief executive officer. The company also said that Christian Scherp, senior vice president of Worldwide Sales, has been promoted to president, and that Sailesh Chittipeddi, senior vice president of Global Operations, has been promoted to executive vice president of Global Operations and chief technical officer. Mr. Mercer and Mr. Scherp replace Daniel Artusi, who had been president and chief executive officer. Mr. Artusi will be leaving the company to pursue outside opportunities. "We are fortunate that an executive of Scott's caliber and experience has chosen to become Conexant's next chief executive officer," said Dwight W. Decker, non-executive chairman of Conexant's board of directors. "Scott has been a Conexant director for the past five years, so he is intimately familiar with the issues facing our company. I am confident that he will provide the strategic leadership Conexant requires to attain the next level of performance." Mr. Mercer, 57, will continue as a company director. "I want to thank Dwight and the Conexant board for giving me the opportunity to lead the company," Mr. Mercer said. "Over the past three quarters, the Conexant team has done a good job of reducing costs and improving financial performance, and we must continue to drive progress in these areas. Our highest priority right now is to determine the best way to deliver increased value to customers and shareholders. I am looking forward to working with Christian, Sailesh, and the rest of the senior team in the coming weeks to evaluate our market and financial positions, and to establish a clear strategic direction for our company. "I would also like to thank Dan for his service, and wish him the best in his future endeavors," Mr. Mercer said. Mr. Mercer serves on the boards of Palm, Inc., Polycom, Inc., SMART Modular Technologies, Inc., and Adaptec, Inc., where he is chairman. In 2005, Mr. Mercer was named interim chief executive officer at Adaptec. Before that, he spent a total of eight years at Western Digital Corporation in positions that included executive vice president, chief financial and administrative officer, and senior vice president and advisor to the CEO. He also spent a year at TeraLogic, Inc. as chief financial officer, five years at Dell, Inc. in a variety of financial-management positions, and seven years at LSI Logic Corporation, where he was promoted to chief financial officer. After graduating with a bachelor's degree in Accounting from the California Polytechnic University at Pomona, Mr. Mercer spent seven years with Price Waterhouse in San Jose, California. In his new position as president, Mr. Scherp, 42, will report to Mr. Mercer and be responsible for the activities and results of Conexant's three business units in addition to managing the company's global sales force. Prior to joining Conexant in June 2005, Mr. Scherp spent eight years with Infineon Technologies North America. In his last position at Infineon, he served as vice president and general manager of the company's Wireless/Wireline Communications Group. He was also vice president of marketing for the Wireline Communications Group, and vice president and general manager of the Communications Group's wide area networking business. Before Infineon was spun-off from Siemens AG in 1997, Scherp spent six years in a variety of positions in engineering, marketing and business planning at Siemens. He holds a master's degree in electrical and electronics engineering, and a master's degree in business administration from the Technical University of Munich, Germany. Mr. Chittipeddi, 45, joined Conexant in June 2006 as senior vice president of Global Operations. In his new role, Mr. Chittipeddi will report to Mr. Mercer and be responsible for Global Operations, Quality, Worldwide Manufacturing Engineering, Design Platform Engineering, and Purchasing. Prior to joining Conexant, Mr. Chittipeddi held several senior operations-related positions with Agere Systems, Lucent Technologies, and AT&T Microelectronics. He also served as Lucent's SEMATECH representative, and was a member of the Technical Staff with AT&T Bell Labs. Mr. Chittipeddi holds a master's degree in business administration from the University of Texas at Austin, a master's degree and a doctorate in physics from Ohio State University, and a master's degree in physics from Northern Illinois University. He also holds 59 U.S. patents related to semiconductor process, package, and design, and has authored nearly 40 publications. About Conexant Headquartered in Newport Beach, California, Conexant Systems, Inc. (NASDAQ: CNXT) -– http://www.conexant.com/-- has a comprehensive portfolio of innovative semiconductor solutions includes products for Internet connectivity, digital imaging, and media processing applications. Conexant is a fabless semiconductor company that recorded revenues of US$809 million in fiscal year 2007. Outside the United States, the company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore and Israel. * * * Conexant currently carries Standard & Poor's Ratings Services' B- rating with a negative outlook. Moody's Investor Service placed Conexant Systems Inc.'s long term corporate family and probability of default ratings at 'Caa1' in October 2006. The ratings still hold to date with a stable outlook. CONSTAR INT'L: Customer Losses Spur Houston Facility Closure ------------------------------------------------------------ Constar International Inc. has decided to close its manufacturing facility in Houston, Texas, by the end of May 2008. This decision resulted from customer losses and a strategic decision to exit the limited extrusion blow-molding business supported by the Houston facility. The company will continue to service the Houston plant's PET business using existing assets at the Company's Dallas, Texas facility. The cumulative cash flow impact to the company is expected to turn positive in the fourth quarter of 2008, with cash restructuring expenses being offset by overhead cost savings. In connection with the closing of the Houston facility, the company expects to incur total restructuring charges of approximately $4.4 million to $4.8 million. The total charges include: (i) an estimated $2.1 million related to costs to exit the Houston facility, (ii) an estimated $500,000 related to employee severance and other termination benefits, and (iii) an estimated $2.0 million of accelerated depreciation and other non-cash charges. Of these total charges, approximately $3.0 million represent cash expenditures expected to be approximately $1.0 million in each of 2008- 2010. The company anticipates annual cost savings of approximately $2.0 million as a result of this action. Based in Philadelphia, Pennsylvania, Constar International (NASDAQ: CNST) -- http://www.constar.net/-- is a manufacturer of PET plastic containers for food and beverages. In addition, the company produces plastic closures and other non-PET containers representing less than 4% of sales. Approximately 78% of the company's revenues in 2007 were generated in the United States, with the remainder attributable to its European operations. * * * Constar International Inc. still carries Moodys' Caa2 Senior Subordinate Debt assigned on Sept. 11, 2006. COUNTRYWIDE FINANCIAL: To Testify Before Senate on Bankr. Abuses ---------------------------------------------------------------- Countrywide Financial Corp. is scheduled to testify at a U.S. Senate panel hearing for dubious and questionable lending practices, Reuters reports, citing Democratic senator Charles Schumer. Countrywide loan servicing head Steve Bailey will give testimony before Mr. Schumer's Senate judiciary subcommittee on Countrywide's alleged abuses of the bankruptcy system, says Reuters. In addition, a professor at the University of Iowa will be giving expert testimony on various homebuilder fees exacted from borrowers. As reported in the Troubled Company Reporter on Mar. 12, 2008, the U.S. Federal Bureau of Investigation is continuing to field evidence from its investigation of the mortgage lender, which potentially exposes the company's slipshod and dubious lending practices. The FBI discovered that many loan documents bear incorrect and faulty information on the mortgage clients the mortgage lender was servicing. Countrywide is not new to homeowner lawsuits. As reported in the Troubled Company Reporter on March 3, 2008, the Office of the U.S. Trustee Program also filed a complaint against Countrywide for alleged abuses within bankruptcy proceedings against certain homeowner complainants. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. COUNTRYWIDE FINANCIAL: Unveils Funding with BofA for Homeowners --------------------------------------------------------------- Bank of America N.A. and Countrywide Financial Corporation disclosed additional details regarding a $35 million neighborhood preservation and foreclosure prevention package both companies announced last week in Chicago. The commitment includes foreclosure prevention efforts by both financial institutions. The package, which is comprised of both grants and low-cost loan or investments in nonprofit organizations, addresses the nation's ongoing mortgage foreclosure crisis and will complement efforts undertaken by the U.S. government and other housing agencies, such as the $180 million allocation from U.S. Department of Housing and Urban Development to NeighborWorks(R) America to boost the capacity of both national and local nonprofits engaged in foreclosure prevention and mitigation activities. "Foreclosures have devastating social and economic consequences on families and communities," said Andrew D. Plepler, president, Bank of America Charitable Foundation. "Both Bank of America and Countrywide recognize that we have a shared responsibility to strengthen our neighborhoods by helping individuals and families keep their homes. We are pleased to do our part to address this ongoing crisis." The Bank of America neighborhood preservation and foreclosure prevention package includes: -- $10 million in direct grants from the Bank of America Charitable Foundation to enhance the capabilities of national and local nonprofit organizations focused on foreclosure prevention counseling and mitigation. Estimates indicate at least 40,500 people will receive counseling or other support services as a result of these grants. -- $15 million in program related investments (PRI), a long- term, repayable loan or investment offered at below-market interest rates to help nonprofit organizations preserve affordable housing and rental units in deeply impacted cities by acquiring and redeploying foreclosed properties. -- $5 million in unallocated grants to address future needs, including counseling and property disposition efforts. Countrywide, in conjunction with its community partners, has allocated $5 million for neighborhood stabilization and foreclosure prevention through 2008. Under the program, the Bank of America Charitable Foundation has already allocated $10 million in direct grants. National grant recipients will utilize funds to support their local affiliates in cities across the U.S., as well as develop and expand programs to further assist their constituents. The funding will be used to help these organizations conduct outreach to distressed homeowners through the creation of hotlines, foreclosure prevention and mitigation training for counselors, expanded community outreach and staffing increases. These national grant recipients include: * ACORN Housing Corporation (Chicago) - $2 million * Consumer Credit Counseling Service of Greater Atlanta (Atlanta) - $500,000 * Housing Partnership Network (Boston) - $200,000 * National Community Reinvestment Coalition (Washington, D.C.) - $500,000 * National Foundation for Credit Counseling (Silver Spring, MD) - $250,000 * Homeownership Preservation Foundation (Minneapolis) - $250,000 * National Urban League (New York) - $300,000 * NeighborWorks(R) America (Washington, D.C.) - $1 million More than $4 million in local grants have been allocated to nonprofit organizations in states that have been disproportionately impacted by the foreclosure crisis. Those states include Arizona, California, Florida, Illinois, Nevada, New York and Texas. "Bank of America and Countrywide are taking a strong leadership role in addressing this ongoing crisis, and I commend them for contributing to the solution," said Ken Wade, CEO, NeighborWorks(R) America. "Homeowners facing foreclosure often have to turn to nonprofit organizations, like NeighborWorks(R) and our partners, for assistance. I am pleased so many groups will have additional resources to perform their critical work thanks to the generous contributions of Bank of America and Countrywide." Both Bank of America and Countrywide are founding members of HOPE NOW, an alliance between counselors, mortgage market participants and mortgage servicers to create a unified, coordinated plan to reach and help as many homeowners as possible. Data from HOPE NOW indicates that from July 2007 through February 2008, mortgage servicers provided loan workouts that enabled about 1.2 million individuals to retain their homes. Earlier this week, Bank of America made several announcements further demonstrating the company's commitment to support vibrant and healthy communities. Beginning in 2009, Bank of America will embark on a new $1.5 trillion community development lending and investing goal over the next ten years. The goal is the largest in U.S. history. Also beginning in 2009, the company will begin a new ten-year, $2 billion corporate philanthropy goal, continuing its tradition of being one of the most generous financial institutions in the world. Additionally, the Office of the Comptroller of the Currency notified Bank of America last week that it had received a sixth- consecutive 'outstanding' rating during its most recent Community Reinvestment Act exam. This is the highest possible acknowledgement from the OCC, and covered a 3-year assessment period between 2004-2006. About Bank of America Based in Charlotte, North Carolina, Bank of America Corp. (NYSE:BAC) -- http://www.bankofamerica.com-- is a bank holding company. Bank of America provides banking and non-banking financial services and products through three business segments: global consumer and small business banking, global corporate and investment banking, and global wealth and investment management. In December 2006, the company sold its retail and commercial business in Hong Kong and Macau to China Construction Bank. In October 2006, BentleyForbes, a commercial real estate investment and operations company, acquired Bank of America plaza in Atlanta from CSC Associates, a partnership of Cousins Properties Incorporated and the company. In June 2007, the company acquired the reverse mortgage business of Seattle Mortgage Company, an indirect subsidiary of Seattle Financial Group Inc. In October 2007, ABN AMRO Holding N.V. completed the sale of its United States subsidiary, LaSalle Bank Corporation, to Bank of America. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services residential and commercial loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. * * * As reported in the Troubled Company Reporter on Jan. 15, 2008, Moody's placed the ratings of Countrywide Financial Corporation and its subsidiaries under review for upgrade. CFC and Countrywide Home Loans senior debt is rated Baa3 and short-term debt is rated Prime-3. Countrywide Bank FSB's bank financial strength rating is C-, deposits are rated Baa1 and short-term debt Prime-2. All long and short-term ratings are placed under review for possible upgrade. CRYSTAL RIVER: Moody's Confirms Ratings of Nine Classes of Notes ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of nine classes of Notes issued by Crystal River Resecuritization 2006-1 Ltd.: -- Class A, $222,492,000, Floating Rate Notes Due 2047, affirmed at Aaa -- Class B, $35,131,000, Floating Rate Notes Due 2047, affirmed at Aa2 -- Class C, $17,565,000, Floating Rate Deferrable Interest Notes Due 2047, affirmed at A1 -- Class D, $19,517,000, Floating Rate Deferrable Interest Notes Due 2047, affirmed at A3 -- Class E, $10,734,000, Floating Rate Deferrable Interest Notes Due 2047, affirmed at Baa1 -- Class F, $9,271,000, Floating Rate Deferrable Interest Notes Due 2047, affirmed at Baa2 -- Class G, $4,391,000, Floating Rate Deferrable Interest Notes Due 2047, affirmed at Baa3 -- Class J, $14,638,000, Fixed Rate Deferrable Interest Notes Due 2047, affirmed at Ba2 -- Class K, $19,517,000, Fixed Rate Deferrable Interest Notes Due 2047, affirmed at B2 Moody's is affirming all Notes above due to overall stable pool performance. As of the March 24, 2008 distribution date, the transaction has an aggregate collateral principal balance of $390.5 million, the same as at the end of ramp-up period. The Notes are currently collateralized by 71 classes of CMBS securities from 32 separate transactions. Since issuance, among the 43 Moody's rated CMBS classes (59.0% of the pool balance), there have been no rating changes. Credit estimates were performed on the 28 non-Moody's rated CMBS classes (41.0%). There have been no realized losses. Moody's uses a weighted average rating factor as an overall indicator of the credit quality of a CDO transaction. Based on Moody's analysis, the current WARF is 1,664 compared to 1,668 at issuance. Moody's reviewed the ratings or performed credit estimates on all the collateral supporting the Notes. The distribution is: Baa1-Baa3 (50.1% compared to 48.6% at issuance), Ba1-Ba3 (30.9% compared to 32.3% at issuance), B1-B3 (9.4% compared to 9.4% at issuance), and Caa1-NR (9.6% compared to 9.6% at issuance). The CMBS securities are from pools securitized between 2002 and 2007. The two largest vintage exposures are 2006 (60.2%) and 2005 (32.0%). The five largest CMBS exposures are CSMC 2006-C4 (13.3%), CSMC 2006-C1 (12.1%), BSCMS 2006-PW13 (12.0%), BSCMS 2005-PWR9 (8.0%), and COMM 2005-C6 (7.2%). DAN RIVER: Organizational Meeting to Form Committees on May 6 ------------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, will convene an organizational meeting in Dan River Holdings, LLC and its affiliates' chapter 11 cases tomorrow, May 6, 2008, at 11:00 a.m. The meeting will be held at the J. Caleb Boggs Federal Building, located at 844 King Street, Room 5209, in Wilmington. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' bankruptcy cases. This is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a Debtor's representative may attend and provide background information regarding the cases. Headquartered in Danville, Virginia, Dan River Inc. -- http://www.www.danriver.com/-- manufactures and markets 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. Dan River's operations was acquired by GHCL Ltd. in January 2006 for approximately $93 million consisting of $17 million in cash plus the assumption of $76 million in short- and long-term debt. On March 24, 2008, GHCL announced plans to close its home textiles sourcing and manufacturing segment, affecting Dan River as well as GHCL's HW Baker and Best Textiles divisions. Dan River Holdings, LLC, Dan River, Inc. and three other 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. DIAGNOSTIC IMAGING: S&P Upgrades Corporate Credit Rating to 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Center for Diagnostic Imaging Inc. to 'B+' from 'B'. The outlook is stable. At the same time, S&P raised its rating on CDI's senior secured credit facilities to 'B+' (the same as the corporate credit rating) from 'B'. The recovery remains unchanged at 4, indicating the expectation for average (30% to 50%) recovery in the event of a payment default. These actions reflect Minneapolis, Minnesota-based CDI's increasing geographic diversity, improved operations, and conservative financial policies. "The speculative-grade rating on CDI reflects the company's relatively small presence in the competitive medical imaging field, reimbursement risk, and limited financial resources," said Standard & Poor's credit analyst Cheryl Richer. "These factors overshadow favorable demand prospects related to the aging population and the benefits of imaging, which can preclude more expensive medical procedures and help in the diagnosis of additional diseases." CDI provides diagnostic imaging services to patients through its network of 50 fixed-site facilities in eight states. DRAKE MANAGEMENT: To Liquidate $2.5 Billion Investment Fund ----------------------------------------------------------- Katherine Burton at Bloomberg News reports that Drake Management LLC is winding down the $2.5 billion Global Opportunities Fund, its largest hedge fund, after losses prompted clients to withdraw investments. The Global Opportunities Fund lost 25% last year on wrong-way bets on U.S. Treasuries, as well as Japanese bonds and stocks in developed markets, Bloomberg says, citing a year-end report Drake sent to investors. The fund manager borrowed about $12 for every $1 of net assets as of Dec. 31, according to a separate report by Bloomberg in March. Bloomberg says Drake's managers, Anthony Faillace and Steve Luttrell, will decide on the fate of its two other hedge funds by the end of the May and plan to start a new fund this year. Drake also runs the $1.3 billion Drake Absolute Return Fund and the $160 million Drake Low Volatility Fund. Bloomberg relates that the Drake Absolute Return Fund fell 14% in 2007. Mr. Luttrell has said current investors have committed about $300 million to a new Absolute Return fund, Bloomberg reports. The two managers will continue to manage $8 billion in traditional fixed- income accounts, according to Bloomberg. In a report by the Troubled Company Reporter on March 14, 2008, Drake restricted client redemptions or allowed clients to shift assets to a new fund. In an 11-page letter to investors dated March 12, Drake said it "would seem more probable that the market disruptions we have experienced will not abate in the short term, but will instead continue for some time." The Wall Street Journal, citing a person familiar with the situation, said in March Drake also was likely to stop investor withdrawals from its two other hedge funds. Ms. Burton, citing Drake's letter to investors, relates that clients had voted to switch about $500 million to the new fund, but when some investors opposed splitting the assets, Drake decided to liquidate Global Opportunities. Ms. Burton reports that investors may get most of their money back by the end of the year. The shut down, she says, is scheduled to be completed by the first quarter of 2009. New York-based Drake is an investment advisor registered with the Securities and Exchange Commission, specializing in active fixed income strategies. The firm was founded in May 2001 with the goal of delivering attractive risk-adjusted returns for substantial investors worldwide. Founded by Anthony Faillace and Steve Luttrell, who both previously worked at New York-based BlackRock and Pacific Investment Management Co. in Newport Beach, California, Drake began managing assets in January 2002. Drake currently manages more than $10 billion. With more than 100 professionals, Drake has offices in Tokyo, Japan; Miami, Florida; Sao Paulo, Brazil; and Istanbul, Turkey. DUKE FUNDING: Poor Credit Quality Prompts Moody's Rating Cuts ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Duke Funding XI, Ltd.: Class Description: $704,000,000 Senior Swap -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $33,000,000 Class X Floating Rate Notes Due 2013 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $132,000,000 Class A-1E Floating Rate Notes Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $88,000,000 Class A-2E Floating Rate Notes Due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $48,000,000 Class A-3E Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: $67,000,000 Class B-1E Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. DUKE FUNDING: Moody's Junks Ratings on $78 Mil. Notes From 'Ba1' ---------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Duke Funding X, Ltd.: Class Description: $852,000,000 Senior Swap Agreement dated as of April 12, 2006 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $72,000,000 Class A1 Senior Secured Floating Rate Notes due April 9, 2046 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $105,000,000 Class A2 Senior Secured Floating Rate Notes due April 9, 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $78,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes due April 9, 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $19,000,000 Class B1 Mezzanine Secured Deferrable Interest Floating Rate Notes due April 9, 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: C Class Description: $20,000,000 Class B2 Mezzanine Secured Deferrable Interest Floating Rate Notes due April 9, 2046 -- Prior Rating: Ba3, 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. EDUCATION RESOURCES: Trustee Appoints Five-Member Creditors Panel ----------------------------------------------------------------- Phoebe Morse, U.S. Trustee for Region 1, appointed five members to the Official Committee of Unsecured Creditors in The Education Resources Institute Inc.'s Chapter 11 case. The panel consists of: (1) Bank of America One Federal Street, 5th Floor Boston, MA 02110 Tel. No. (617) 346-2671 Attn: Thomas J. Flanagan thomas.j.flanagan@bankofamerica.com (2) US Bank 800 Boylston Street Boston, MA 02199-8004 Tel. No. (617) 722-4937 Attn: David J. Reier dreier@pbl.com (3) M&T Bank One M & T Plaza Buffalo, NY 14203 Tel. No. (716) 842-2301 Attn: Lisa Bertino Beaser lbeaser@mandbank.com (4) Nellie Mae 1250 Hancock Street, Suite 205 N Quincy, MA 02169-4331 Tel. No. (781) 348-4299 Attn: Michael A. Carey, CPA mcarey@nmefdn.org (5) Wachovia Securities and Wachovia Capital Markets, LLC 301 South College Street, NCO537 Charlotte, NC 28288 Tel. No. (704) 383-1172 Attn: Thomas M. Cambern, tom.cambern@wachovia.com Mr. Cambern of Wachovia is the Committee's chairperson. Headquartered in Boston, Massachussetts, The Education Resources Institute Inc. -- http://www.teri.org/-- aka Boston Systems Resources Inc., Brockton Education Opportunity Center, TERI, TERI College Access, TERI College Access Centers and TERI Marketing Services Inc., is a nonprofit organization that promotes educational opportunities for all through its college access and loan guarantee activities. Founded in 1985, TERI is a guarantor of private or non-government student loans with more than $17 billion in outstanding guarantees. The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr. D. Mass. Case No.: 08-12540.) Daniel Glosband, Esq., Gina L. Martin, Esq. at Goodwin Procter LLP represent the Debtor in its restructuring efforts. The Debtor's Conflicts Counsel is Craig and Macauley PC, its financial advisor is Grant Thornton LLP, its Claims Agent is Epiq Bankruptcy Solutions LLC, its investment Banker is Citigroup Global Markets Inc., and its Public Relations & Public Affairs Advisor is Rasky Baerlein Strategic Communications Inc. When the Debtor filed for protection from its creditors, it listed estimated assets of more that $1 billion and estimated debts of $500,000 to $1 billion. (TERI Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ELEPHANT TALK: Kabani & Co Expresses Going Concern Doubt -------------------------------------------------------- Kabani & Company, Inc., raised substantial doubt on the ability of Elephant Talk Communications, 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 net loss of $12,057,732, working capital deficit of $24,429,464, accumulated deficit of $29,019,832 and cash used in operations of $3,449,351. The increase in net cash used in operating activities for the year ended Dec. 31, 2007, is primarily due to the increase in loss of $7,228,067 in 2007, decrease in accounts receivable of $991,412, increase in prepaid expenses of $183,556, decrease in accounts payable and customer deposits of $916,376, decrease in deferred revenue of $11,444 and increase in accrued expenses and other payable of $1,428,141. Net cash used in investment activities for the year ended Dec. 31, 2007, was $2,037,269. Cash used to purchase plant and equipment was $2,154,559, restricted cash deposit for inter-connect was $23,266, cash paid for acquisition of subsidiary was $241,883 and cash obtained from acquisitions was $382,439. Net cash received by financing activities for the year ended December 31, 2007 was $9,085,991. The Company received $8,498,471 from the sales of shares of its common stocks and $561,520 from third parties. As a result, the Company recorded a cash and cash equivalent balance of $4,366,312 as of Dec. 31, 2007, a net increase in cash and cash equivalent of $4,034,311 for the year ended Dec. 31, 2007. Management has devoted considerable efforts during the period ended Dec. 31, 2007, and in the first few months of 2008 towards obtaining additional equity financing, controlling of salaries and general and administrative expenses, management of accounts payable, settlement of debt by issuance of common shares and strategically acquire profitable companies that bring synergies to the company's products and services. Management believes the company's existing available cash, cash commitments, cash equivalents and short term investments as of Dec. 31, 2007, in combination with continuing contractual commitments will be sufficient to meet our anticipated capital requirements until the May 2008. The company posted a net loss of $12,057,732 on total revenues of $47,361,028 for the year ended Dec. 31, 2007, as compared with a net loss of $4,829,663 on total revenues of $158,292 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $24,608,228 in total assets and $34,322,539 in total liabilities, resulting in $9,714,311 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $9,661,500 in total current assets available to pay $34,090,964 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?2ae8 About Elephant Talk Based in Orange, California, Elephant Talk Communications Inc. (OTC BB: ETLK) -- http://www.elephanttalk.com/-- until recently was engaged in the long distance telephone business in China and the Special Administrative Region Hong Kong. The company currently operates a switch-based telecom network with national licenses and direct fixed line interconnects with the Incumbents/National Telecom Operators in eight (8) European countries, one (1) in the Middle East (Bahrain), licenses in Hong Kong and the U.S.A. and partnerships with telecom operators in Scandinavia, Poland, Germany and Hong Kong. ENHANCED MORTGAGE: Fitch Cuts Rating on $6MM Notes to CCC from BBB ------------------------------------------------------------------ Fitch Ratings has downgraded five classes of notes issued by Enhanced Mortgage Backed Securities Fund III, Ltd. These rating actions are the result of Fitch's review process and are effective immediately: -- $130,000,000 class A-1 notes are downgraded to 'BB' from 'AAA' and are placed on Rating Watch Negative; -- $14,000,000 class A-2 notes are downgraded to 'B+' from 'A+' and remain on Rating Watch Negative; -- $20,000,000 class A-3 notes are downgraded to 'B-' from 'BBB+' and remain on Rating Watch Negative; -- $6,000,000 class A-4 notes are downgraded to 'CCC' from 'BBB'; -- $30,000,000 preference shares are downgraded to 'CCC' from 'B-'; The ratings for each of the class A-1, A-2, A-3, and A-4 notes reflects the likelihood that investors will receive periodic interest payments through the redemption date as well as their respective stated principal balances. The rating of the preference shares reflect the likelihood that investors would receive aggregate payments in an amount equal to the principal amount on or prior to the redemption date. EMBS III, a mortgage market value collateralized debt obligation, is collateralized by fixed, floating, and adjustable rate mortgage-backed securities, collateralized mortgage obligations, asset backed securities, U.S. government obligations, corporate securities, and cash/cash equivalents. Portfolio restrictions limit the exposure to these particular assets as well as the percentage of assets that fall under the 'AAA', 'AA', 'A', and 'BBB' credit levels. Other key covenants include limits on effective duration, utilization of leverage, and net asset value. Effective duration, which measures total interest rate risk, and net asset value, the current asset value as a percentage of net asset value at inception, are the two main criteria used to measure these deals. The NAV level in this program has experienced a significant decline, thereby putting the transaction closer to hitting the class C and class D trigger levels. In the event these triggers are breached, the transaction would be forced to sell assets which would result in the realization of further losses. In addition to overall price declines, Fitch now views the collateral in the program as having greater price volatility, potential for credit migration, and as less liquid in the current market. These factors have made the subordination in the program inconsistent with higher rating levels. Fitch has recently published a revised criteria for Market Value Structures. This updated criteria reflects the agency's revised views on asset liquidity, price volatility, and overall market risk. ENHANCED MORTGAGE: Fitch Junks Rating on $6MM Class A-4 Notes ------------------------------------------------------------- Fitch Ratings has downgraded five classes of notes issued by Enhanced Mortgage Backed Securities Fund IV, Ltd. These rating actions are the result of Fitch's review process and are effective immediately: -- $130,000,000 class A-1 notes are downgraded to 'BB' from 'AAA' and are placed on Rating Watch Negative; -- $14,000,000 class A-2 notes are downgraded to 'B' from 'A+' and remain on Rating Watch Negative; -- $20,000,000 class A-3 notes are downgraded to 'B-' from 'BB' and remain on Rating Watch Negative; -- $6,000,000 class A-4 notes are downgraded to 'CCC' from 'B' and removed from Rating Watch Negative; -- $30,000,000 preference shares are downgraded to 'CCC/DR6' from 'CCC/DR5' and removed from Rating Watch Negative; The ratings for each of the class A-1, A-2, A-3, and A-4 notes reflects the likelihood that investors will receive periodic interest payments through the redemption date as well as their respective stated principal balances. The rating of the preference shares reflect the likelihood that investors would receive aggregate payments in an amount equal to the principal amount on or prior to the redemption date. EMBS IV, a mortgage market value collateralized debt obligation, is collateralized by fixed, floating, and adjustable rate mortgage-backed securities, collateralized mortgage obligations, asset backed securities, U.S. government obligations, corporate securities, and cash/cash equivalents. Portfolio restrictions limit the exposure to these particular assets as well as the percentage of assets that fall under the 'AAA', 'AA', 'A', and 'BBB' credit levels. Other key covenants include limits on effective duration, utilization of leverage, and net asset value. Effective duration, which measures total interest rate risk, and net asset value, the current asset value as a percentage of net asset value at inception, are the two main criteria used to measure these deals. The NAV level in this program has experienced a significant decline, thereby putting the transaction closer to hitting the class C and class D trigger levels. In the event these triggers are breached, the transaction would be forced to sell assets which would result in the realization of further losses. In addition to overall price declines, Fitch now views the collateral in the program as having greater price volatility, potential for credit migration, and as less liquid in the current market. These factors have made the subordination in the program inconsistent with higher rating levels. Fitch has recently published a revised criteria for Market Value Structures. This updated criteria reflects the agency's revised views on asset liquidity, price volatility, and overall market risk. EQUAL-CHLOR LLC: Can Access Prudent Insurance's $10 Mil. Facility ----------------------------------------------------------------- Hon. Paul B. Snyder of the United States Bankruptcy Court for the Western District of Washington authorized Equa-Chlor LLC to obtain postpetition financing of up to $10,000,000 from The Prudential Insurance Company of America, as agent and lender. Proceeds of the loans will be used (i) for working capital and other general corporate purposes, (ii) to pay interest, fees and expenses owed to the lenders, (iii) to make adequate protection payments, and (v) to pay professionals' fees and expenses. The DIP agreement is subject to a $400,000 carve-out for payments to professional advisors to the Debtor, any committee appointed in this case and U.S. Trustee of Court fees. As security for the postpetition obligations, the Debtor grants Prudential Insurance first lien on unencumbered property, liens priming disputed parsons lien and prepetition liens, and liens junior to certain other lien. About Equa-Chlor Equa-Chlor, L.L.C., dba Equa-Chlor Marketing, L.L.C., operates a chemical manufacturing plant in Longview, Washington. Equa-Chlor filed for chapter 11 bankruptcy protection February 15, 2008, before the U.S. Bankruptcy Court for the Western District of Washington in Tacoma (Case No. 08-40599). Bruce W. Leaverton, Esq., at Lane Powell PC, serves as the Debtor's bankruptcy counsel. The U.S. Trustee for Region 18 appointed six creditors to serve on an Official Committee of Unsecured Creditors. Its schedules showed assets of $82,984,283 and debt of $65,244,163. EXCELLO ENGINEERED: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Excello Engineered Systems, LLC 8146 Bavaria Rd. Macedonia, OH 44056 Bankruptcy Case No.: 08-51424 Type of Business: The Debtor manufactures plastic products, motor vehicle parts and accessories, and miscellaneous industry machinery. Chapter 11 Petition Date: April 25, 2008 Court: Northern District of Ohio (Akron) Judge: Marilyn Shea-Stonum Debtor's Counsel: Joseph F. Hutchinson, Jr., Esq. Email: jhutchinson@bakerlaw.com Thomas M. Wearsch, Esq. Email: twearsch@bakerlaw.com Baker & Hostetler 3200 National City Ctr. 1900 E. Ninth St. Cleveland, OH 44114 Tel: (216) 621-0200 (216) 861-7303 Fax: (216) 696-0740 http://www.bakerlaw.com/ 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 ------ --------------- ------------ Voltek, LLC trade debt $427,999 17 Allen Ave. Coldwater, MI 49036 Tel: (800) 544-2254 Bostik, Inc. trade debt $332,550 11320 Watertown Plank Road Milwaukee, WI 53226-3434 Tel: (800) 558-4302 Minute Men, Inc. trade debt $296,775 3740 Carnegie Ave. Cleveland, OH 44115-2716 Tel: (216) 426-9675 Blako Industries trade debt $285,609 10850 Middleton Pike Dunbridge, OH 43414-0179 Tel: (419) 833-4491 Plexus trade debt $175,310 Highland Plastics, Inc. trade debt $147,786 Tech Center, Inc. trade debt $140,651 Bureau of Workers' trade debt $128,797 Compensation Anthem Blue Cross & Blue trade debt $110,348 Shield R.C. Schmidt & Sons, LLC trade debt $97,933 Technicote trade debt $92,393 Southern Film Extruders, Inc. trade debt $78,943 Liberty Property, LP trade debt $78,938 Joslyn Manufacturing Co., Inc. trade debt $68,029 Jarrett Logistics Systems trade debt $61,932 Chicago Electric Sales, Inc. trade debt $54,003 Industrial Model, Inc. trade debt $51,575 WebsterDubyak Co., LPA trade debt $50,013 Amros Industries, Inc. trade debt $48,159 Piqua Technologies, Inc. trade debt $39,228 FEDDERS CORP: Wants to Sell Air Quality Biz for $25 Million ----------------------------------------------------------- Fedders Corporation asked the U.S. Bankruptcy Court for the District of Delaware for permission to sell its indoor air quality business and related assets for $25 million, Bankruptcy Data reports. The stalking horse bidder, according to the report, is composed of Tomkins Industries, Tomkins Finance, Air System Components Investments China Limited and Ruskin Air Management Limited. The assets for sale include the assets of FI, Herrmidifier, Trio, Trion Limited and Envirco's, the report relates. Tomkins Finance will buy Trion GmbH, Ruskin Air will buy Trion Limited, and Air Systems will buy Fedders Indoor Air Quality(Suzhou) Co., report adds. Under an asset purchase agreement, the break-up fee is at $625,000, Bankruptcy Data says. Bids, plus a $2.5 million deposit, must be submitted by May 15, 2008, based on the report. The public sale of the assets is set for May 22, 2008, and the sale hearing is set for May 22, 2008, Bankruptcy Data reports. About Fedders Corporation Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq., Irving E. Walker, Esq., and Adam H. Isenberg, Esq., of Saul, Ewing, Remick & Saul LLP, represent the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The Official Committee of Unsecured Creditors is represented by Brown Rudnick Berlack Israels LLP. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. The Debtors have sought an extension of their exclusive plan filing period until May 31, 2008. FORD MOTOR: To Offer Buyouts to 1,300 Chicago & Louisville Workers ------------------------------------------------------------------ Ford Motor Company spokeswoman Angie Kozleski disclosed that the automaker intends to offer buyouts to 800 workers in an assembly plant in Chicago, Illinois, and to 500 workers in an assembly plant in Louisville, Kentucky, several papers report. The Associated Press relates that workers in an engine plant in Cleveland, Ohio, will also be offered buyouts, although, figures weren't reported. As reported in the Troubled Company Reporter on March 4, 2008, Ford disclosed plans to further align its capacity with demand at four U.S. manufacturing facilities as it works to return its North American operations to profitability by 2009. The Chicago Assembly Plant and Louisville Assembly Plant will operate on one shift beginning this summer. The date for the shift reduction has not been finalized. Cleveland Engine Plant #2 will operate on one shift beginning in late April. In addition, Cleveland Engine Plant #1, which has been idled since May 2007, will resume production in the fourth quarter. The company had planned to resume production resume this spring. AP recounts that the Chicago plant produces the Ford Taurus and Mercury Sable sedans and Taurus X crossover vehicle, while the Louisville assembly facility manufactures the Ford Explorer and Mercury Mountaineer sport utility vehicles. The Cleveland plant produces engines. Michael Dolan of The Wall Street Journal writes that the automaker is instigating another round of buyouts since only 4,200 hourly workers had accepted the company's latest buyout and early retirement offers in April. The company expected 8,000 workers to accept the compensation packages last month. 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. FOX TROT: Three Classes of Notes Acquire Moody's Junk Ratings ------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible downgrade the ratings on these notes issued by Fox Trot CDO Ltd.: Class Description: $40,000,000 Class A Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $36,000,000 Class B Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade In addition, Moody's downgraded these notes: Class Description: $19,000,000 Class C Deferrable Secured Floating Rate Notes Due 2051 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C Class Description: $15,000,000 Class D Deferrable Secured Floating Rate Notes Due 2051 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. GENERAL MOTORS: Total April 2008 Sales Decrease 16 Percent ---------------------------------------------------------- General Motors Corp. dealers in the United States delivered 260,922 vehicles in April. Retail car and crossover sales were up more than 9%. A sharp sales increase in fuel efficient cars and crossovers could not make up for soft truck demand and a sharp decline in fleet deliveries impacted by the American Axle & Manufacturing Holdings Inc. strike. On a non-adjusted basis, retail sales were down 11.5% and total sales for the month were down 16%. On an adjusted basis, total sales declined 22.7%. Dealer inventories were at their lowest level since September 2005 with about 824,000 vehicles in stock, down about 206,000 vehicles compared to last April, and down more than 84,000 vehicles compared with December 2007. "Consumer preference is shifting and we're shifting with it as evidenced by our strong car and crossover sales," Mark LaNeve, vice president, GM North America Vehicle Sales, Service and Marketing, said. "Our new products such as the Chevrolet Malibu, Cadillac CTS and Buick Enclave were hot throughout the month. Throughout the industry, truck sales have been soft. We've been able to match the current economic slowdown with historically low total inventories, and as we look for ways to increase car and crossover production, we are improving our competitive position for the economic recovery." Chevrolet Malibu total sales were up 29% with retail sales up 147%, Aveo sales were up 14% total and 13% retail, and Cobalt sales were up 16% total and 17% retail. Pontiac Vibe total sales were up 36% and retail sales were up 39% compared with April 2007. Saturn Aura was up 19% total and 16% retail, and the Astra had its fourth consecutive month of increasing sales with more than 900 vehicles sold. In the luxury car segment, the award-winning Cadillac CTS saw total sales increase 8% with a strong retail increase of 12%. GM's popular crossover Buick Enclave, GMC Acadia and Saturn Outlook together accounted for nearly 13,000 retail vehicle sales in the month, an increase of 7% compared with the same month last year. There were more than 6,600 Acadia, 4,000 Enclave and 2,300 Outlook retail sales. The Saturn Vue had a total sales increase of about 600 vehicles compared with April 2007. "Our sales performance in mid-cars and crossovers shows the power of new products to attract consumers -- even in a tough market," Mr. LaNeve added. "So as the mix shifts from trucks to cars, we're ready in our dealers' showrooms with vehicles that provide industry-leading value, great fuel economy and the best warranty coverage of any full-line automaker." Certified Used Vehicles April 2008 sales for all certified GM brands, including GM Certified Used Vehicles, Cadillac Certified Pre-Owned Vehicles, Saturn Certified Pre-Owned Vehicles, Saab Certified Pre-Owned Vehicles, and HUMMER Certified Pre-Owned Vehicles, were 44,479 vehicles, up nearly 7% from April 2007 results. Year-to-date sales are 168,087 vehicles, down 7% from the same period last year. GM Certified Used Vehicles, the industry's top-selling certified brand, posted April sales of 38,861 vehicles, up 6% from last April. Cadillac Certified Pre-Owned Vehicles sold 3,565 vehicles, up 27%. Saturn Certified Pre-Owned Vehicles sold 1,159 vehicles, down 21%. Saab Certified Pre-Owned Vehicles sold 727 vehicles, up 14%, and HUMMER Certified Pre-Owned Vehicles sold 167 vehicles, up 109%. "Our certified sales momentum continued in April, as GM Certified Used Vehicles sales grew for the fourth consecutive month, a 6 percent increase over last April's results," Mr. LaNeve said. "The Cadillac, Saab and HUMMER Certified Pre-Owned Vehicles programs also generated robust increases as consumers take advantage of the great value and peace-of-mind assurances that come with the purchase of certified GM vehicles." In April, GM North America produced 242,000 vehicles (128,000 cars and 114,000 trucks). This is down 93,000 vehicles or 28 percent compared to April 2007 when the region produced 335,000 vehicles (120,000 cars and 215,000 trucks). (Production totals include joint venture production of 22,000 vehicles in April 2008 and 16,000 vehicles in April 2007.) Approximately 130,000 units of production have been lost in April due to the American Axle work stoppage. Since the dispute began in late February, approximately 230,000 units of production have been lost. GMNA has revised its forecast for 2008 second-quarter production to 950,000 vehicles, down 130,000 units from the prior forecast to reflect April production losses. Due to the current American Axle work stoppage, there is considerable uncertainty with regard to the second quarter production forecast. On April 30, 2008, GM's annual total vehicle sales forecast for the industry was revised to an expected mid-to-high 15 million vehicle SAAR. The previous forecast provided in January of this year was in the low-16 million unit range. The revision reflects actual industry sales rates for the first four months of 2008 and the current assessment of the recovery of the U.S. economy. About GM 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 April 28, 2008, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. remain on CreditWatch with negative implications, where they were placed March 17, 2008. The CreditWatch update follows downgrades of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential Capital LLC (CCC+/Watch Neg/C). The rating actions on Residential Capital LLC and GMAC were triggered by the resignation of the only independent directors at Residential Capital LLC. GLOBAL ENVIRONMENTAL: Files Amended Fiscal Year 2006 Financials --------------------------------------------------------------- Global Environmental Energy Corp. of Nassau, Bahamas, filed an amended Form 20-F with the U.S. Securities and Exchange Commission on April 28, 2008. At May 31, 2006, the company's balance sheet showed total assets of $227 and total liabilities of $55,610,092, resulting in a $55,609,865 stockholders' deficit. The company reported a net loss of $54,931,010 over $0 sales revenues for the year ended May 31, 2006, compared with a net loss of $26,500,084 over $0 sales revenues for the same period in 2005. Latest Financial Filing At May 31, 2007, the company had working capital deficit of $780,368. Total assets were $2,500 for the year ended May 31, 2007. Total long-term liabilities was $70,771,723 at May 31, 2007. Stockholders' equity increased to a deficit of $71,549,591 at May 31, 2007. Cash used by operating activities was $2,872,199 for the years ended May 31, 2007. About Global Enviornmental Energy Headquartered in Nassau, Bahamas, Global Environmental Energy Corp. (Deutsche Borse: GLI; OTC Bulletin Board: GEECF) -- http://www.geecf.ru-- is engaged in traditional oil and gas exploration and production, alternative energy sources, environmental infrastructure and electrical micro-power generation through its subsidiaries, Sahara Petroleum Exploration Corp. and Biosphere Development Corp. GOLDMAN SACHS: Fitch Chips Ratings on $195.2MM Certificates ----------------------------------------------------------- Fitch Ratings has taken rating actions on Goldman Sachs mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $669.5 million and downgrades total $195.2 million. GSAMP Trust 2003-AHL Total -- $9.0 million class A-1 affirmed at 'AAA'; -- $11.0 million class A-2B affirmed at 'AAA'; -- $9.2 million class M-1 affirmed at 'AA'; -- $3.5 million class M-2 downgraded to 'BBB+' from 'A'; -- $2.3 million class B-1 downgraded to 'B' from 'BBB'; -- $1.1 million class B-2 downgraded to 'CC/DR3' from 'BBB-'; Deal Summary -- Originators: Accredited -- 60+ day Delinquency: 17.72% -- Realized Losses to date (% of Original Balance): 1.43% GSAMP Trust 2003-FM1 Total -- $17.1 million class M-1 downgraded to 'A+' from 'AA+'; -- $2.3 million class M-2 downgraded to 'BBB' from 'A+'; -- $0.7 million class B-1 downgraded to 'BB+' from 'A-'; -- $0.3 million class B-2 downgraded to 'B' from 'BBB'; Deal Summary -- Originators: Fremont -- 60+ day Delinquency: 30.94% -- Realized Losses to date (% of Original Balance): 0.82% GSAMP Trust 2003-HE1 Total -- $21.9 million class M-1 affirmed at 'AA'; -- $15.6 million class M-2 downgraded to 'A' from 'A+'; -- $1.6 million class M-3 downgraded to 'BBB+' from 'A-'; -- $2.3 million class B-1 downgraded to 'BB-' from 'BB+'; -- $1.8 million class B-2 downgraded to 'C/DR5' from 'B+'; Deal Summary -- Originators: New Century (60%) and Finance America (40%) -- 60+ day Delinquency: 23.03% -- Realized Losses to date (% of Original Balance): 2.06% GSAMP Trust 2003-HE2 Total -- $6.3 million class A-1A affirmed at 'AAA'; -- $0.6 million class A-1B affirmed at 'AAA'; -- $24.0 million class A-2 affirmed at 'AAA'; -- $4.4 million class A-3A affirmed at 'AAA'; -- $12.0 million class A-3C affirmed at 'AAA'; -- $25.0 million class M-1 affirmed at 'AA'; -- $4.6 million class M-2 affirmed at 'A+'; -- $2.1 million class M-3 downgraded to 'A' from 'A+'; -- $3.6 million class M-4 downgraded to 'BBB' from 'A-'; -- $1.8 million class B-1 downgraded to 'BB+' from 'BBB'; -- $1.2 million class B-2 downgraded to 'BB' from 'BB+'; Deal Summary -- Originators: Option One (75%) and Accredited (25%) -- 60+ day Delinquency: 17.58% -- Realized Losses to date (% of Original Balance): 0.93% GSAMP Trust 2003-NC1 Total -- $11.4 million class M-1 affirmed at 'AAA'; -- $3.4 million class M-2 affirmed at 'AA-'; -- $0.1 million class M-3 affirmed at 'A+'; -- $1.5 million class B-1 downgraded to 'BB+' from 'BBB+'; -- $0.4 million class B-2 downgraded to 'B' from 'BBB'; Deal Summary -- Originators: New Century -- 60+ day Delinquency: 19.53% -- Realized Losses to date (% of Original Balance): 0.83% GSAMP Trust 2004-AR1 Total -- $0.9 million class A-1A affirmed at 'AAA'; -- $0.0 million class A-1B affirmed at 'AAA'; -- $16.8 million class A-2B affirmed at 'AAA'; -- $3.8 million class A-2C affirmed at 'AAA'; -- $52.2 million class M-1 affirmed at 'AA+'; -- $31.4 million class M-2 affirmed at 'AA'; -- $21.4 million class M-3 affirmed at 'AA-'; -- $15.7 million class M-4 affirmed at 'A+'; -- $15.7 million class M-5 affirmed at 'A'; -- $25.1 million class M-6 affirmed at 'A-'; -- $16.3 million class B-1 affirmed at 'BBB+'; -- $14.3 million class B-2 affirmed at 'BBB'; -- $5.3 million class B-3 downgraded to 'BB+' from 'BBB-'; -- $7.7 million class B-4 downgraded to 'B' from 'BB+'; -- $5.4 million class B-5 downgraded to 'C/DR5' from 'BB'; Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 19.34% -- Realized Losses to date (% of Original Balance): 1.67% GSAMP Trust 2004-AR2 Total -- $44.0 million class M-1 affirmed at 'AA+'; -- $31.7 million class M-2 affirmed at 'AA'; -- $18.1 million class M-3 affirmed at 'AA-'; -- $14.0 million class M-4 affirmed at 'A+'; -- $5.6 million class M-5 downgraded to 'A-' from 'A'; -- $5.1 million class M-6 downgraded to 'BB+' from 'BBB+'; -- $5.5 million class B-1 downgraded to 'B' from 'BBB-'; -- $4.1 million class B-2 downgraded to 'C/DR5' from 'BB'; -- $3.4 million class B-3 downgraded to 'C/DR5' from 'BB-'; -- $5.3 million class B-4 downgraded to 'C/DR6' from 'B'; Deal Summary -- Originators: Ameriquest -- 60+ day Delinquency: 29.98% -- Realized Losses to date (% of Original Balance): 2.25% GSAMP Trust 2004-NC2 Total -- $16.1 million class A-1A affirmed at 'AAA'; -- $1.8 million class A-1B affirmed at 'AAA'; -- $6.9 million class A-2C affirmed at 'AAA'; -- $38.0 million class M-1 affirmed at 'AA'; -- $13.5 million class M-2 affirmed at 'A'; -- $7.8 million class M-3 downgraded to 'BBB+' from 'A-'; -- $4.4 million class B-1 downgraded to 'BBB' from 'BBB+'; -- $5.2 million class B-2 downgraded to 'BBB-' from 'BBB'; -- $3.3 million class B-3 downgraded to 'BB' from 'BBB-'; Deal Summary -- Originators: New Century -- 60+ day Delinquency: 18.55% -- Realized Losses to date (% of Original Balance): 1.05% GSAMP Trust 2004-OPT -- $2.5 million class A-1 affirmed at 'AAA'; -- $1.6 million class A-4 affirmed at 'AAA'; -- $43.4 million class M1 affirmed at 'AA'; -- $34.3 million class M2 downgraded to 'BBB+' from 'A'; -- $9.8 million class M3 downgraded to 'BBB' from 'BBB+'; -- $7.0 million class B1 downgraded to 'BB' from 'BBB'; -- $7.0 million class B2 downgraded to 'B' from 'BB+'; -- $6.3 million class B3 downgraded to 'CC/DR4' from 'BB'; -- $3.6 million class B4 downgraded to 'C/DR5' from 'BB-'; Deal Summary -- Originators: Option One -- 60+ day Delinquency: 21.97% -- Realized Losses to date (% of Original Balance): 1.23% GSAA Trust 2004-NC1 Total -- $0.1 million class AF-3 affirmed at 'AAA'; -- $20.9 million class AF-4 affirmed at 'AAA'; -- $23.0 million class AF-5 affirmed at 'AAA'; -- $15.9 million class AF-6 affirmed at 'AAA'; -- $8.7 million class M-1 affirmed at 'AA'; -- $6.4 million class M-2 affirmed at 'A'; -- $4.7 million class B-1 affirmed at 'BBB'; -- $1.7 million class B-2 affirmed at 'BBB-'; Deal Summary -- Originators: New Century -- 60+ day Delinquency: 4.60% -- Realized Losses to date (% of Original Balance): 1.09% HEALTHSOUTH CORP: Buying Rehabilitation Hospital of South Jersey ---------------------------------------------------------------- HealthSouth Corp. entered into a definitive agreement, through one of its wholly owned subsidiaries, to purchase The Rehabilitation Hospital of South Jersey, a 34-bed inpatient rehabilitation hospital in Vineland, New Jersey, from The Mediplex/Cumberland Rehabilitation Limited Partnership. "We are very pleased to welcome The Rehabilitation Hospital of South Jersey to HealthSouth's nationwide network of preeminent rehabilitation hospitals," Jay Grinney, HealthSouth's president and chief executive officer, said. "The Rehabilitation Hospital of South Jersey, under the outstanding leadership of Dr. Francis Bonner, has provided exceptional care to patients in the South Jersey area for many years and we look forward to continuing this tradition for many years to come." The acquisition of The Rehabilitation Hospital of South Jersey adds a third New Jersey rehabilitation hospital to HealthSouth's northeast region. HealthSouth currently operates HealthSouth Rehabilitation Hospital of New Jersey in Toms River and Tinton Falls Rehabilitation Hospital, a Joint Venture of HealthSouth and Monmouth Medical Center, in Tinton Falls. The closing of the transaction is subject to certain state and federal regulatory approvals and is expected to take place late in the second quarter or early in the third quarter of 2008. Headquartered in Birmingham, Alabama, HealthSouth Corporation (NYSE: HLS) -- http://www.healthsouth.com/-- provides inpatient rehabilitation services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves more than 250,000 patients annually through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. HealthSouth Corporation's balance sheet showed total shareholders' deficit of $1.5 billion as of Dec. 31, 2007, compared to a deficit of $2.2 billion at March 31, 2007. * * * As reported in the Troubled Company Reporter on March 17, 2008, Moody's Investors Service affirmed the B3 Corporate Family Rating of HealthSouth Corporation. Moody's also upgraded the rating on the company's senior secured credit facility to Ba3 from B2 and affirmed the rating on the company's senior unsecured notes at Caa1 in accordance with the application of Moody's Loss Given Default Methodology. The ratings outlook is stable. HERCULES OFFSHORE: S&P Holds 'BB' Rating on $1.15 Bil. Facilities ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' bank loan and recovery rating of '2' on the $1.15 billion senior secured credit facilities of Hercules Offshore Inc. (BB-/Stable/--). The recovery rating of '2' indicates S&P's expectation of substantial (70% to 90%) recovery in the event of a payment default. The action was taken after the company increased its revolving credit facility by $100 million. The first-lien facilities now consist of a $250 million revolving credit facility and a $900 million term loan. Hercules will use proceeds from the increase for working capital, capital expenditures, and general corporate purposes. Ratings List Hercules Offshore Inc. Corporate Credit Rating BB-/Stable/-- Ratings Affirmed Hercules Offshore Inc. $1.15 bil cred fac BB Recovery Rating 2 HOME INTERIORS: Wants To Access NexBank's Cash Collateral --------------------------------------------------------- Home Interiors & Gifts Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Texas for permission to access cash collateral of NexBank SSB until July 13, 2008. The Debtors owed NexBank at least $380 million in loans pursuant to a credit agreement dated March 31, 2004, as amended. The Debtors' obligations under the loan are secured by their assets, which serve as collateral. The Debtors need immediate access to NexBank's cash collateral to pay their employees, purchase product, maintain services, operate and preserve their business and prevent immediate harm to the estate. As adequate protection, the Debtors propose to grant NexBank liens and security interest in substantially all of the Debtors' assets -- including accounts, inventory and property. A hearing is set for May 26, 2008, at 11:59 p.m., to consider approval of the Debtors' request. A full-text copy of the initial budget is available for free at http://ResearchArchives.com/t/s?2b6e Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. When the Debtors file for protection against their creditors, they listed assets and debts between $100 million and $500 million. HOME INTERIORS: Files Disclosure Statement and Chapter 11 Plan -------------------------------------------------------------- Home Interiors & Gifts Inc. and its debtor-affiliates delivered to the United States Bankruptcy Court for the Northern District of Texas a Disclosure Statement dated April 29, 2008, explaining their Chapter 11 Plan of Reorganization. The Plan will eliminate the Debtors' non-operational and other under performing business units. The Debtors will enter into a revolving credit facility to provide necessary liquidity for their operations. Treatment of Claims Under the Plan, Administrative Claims will be paid in full in cash on the effective date. Holders of Other Priority Claims including Secured Tax Claims are expected to get cash on the initial distribution date. Each holder of Prepetition Claim, totaling $336,925,000, is entitled to receive a combination of new term debt of at least $106,000,000 secured by previously encumbered assets of the Debtors, plus $50,000,000 in new equity in the Debtors. The new term debt will be non-amortizing and it will have maturity of five years from the Plan's effective date. Distributions of new equity represent 84.75% of the total equity ownership of the Debtor. At the Debtors' option, Holder of Other Secured Claim will be treated in this manner: a) the Plan may leave unaltered the legal, equitable, and contractual rights of the holder of an allowed secured claim, b) the Debtor may pay the allowed secured claim in full, in cash, on the later of the allowance date or the distribution date, c) the Debtor may deliver to the holder of an allowed secured claim the property securing such claim, or d) the Debtor may pay an allowed secured claim in such manner as may be mutually agreed to by the holder of such Claim and Debtor. Holders of General Unsecured Claims, totaling between $85,209,000 to $164,459,000, are expected to get a combination of new term debt of $19,000,000 secured by previously encumbered assets of the Debtors, plus $9,000,000 in new equity in the Debtors. The new term loan will be non-amortizing and it will have a maturity of five years subsequent to the effective date. It also have a variable interest rate, with interest payable. Conveniences Class Claims will receive a pro rata share of $250,000 on the Plan's effective date. Equity Interest will be canceled and extinguished. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2b61 A full-text copy of the Chapter 11 Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?2b62 Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. When the Debtors file for protection against their creditors, they listed assets and debts between $100 million and $500 million. IKON OFFICE: Moody's Maintains Corporate Family Rating at 'Ba2' --------------------------------------------------------------- Moody's confirmed the Ba2 corporate family rating and Ba2 probability of default rating for IKON Office Solutions, Inc. Moody's also confirmed the Ba3 ratings assigned to IKON's various notes thus concluding the review for possible downgrade initiated in November 2007. Liquidity is expected to remain solid as reflected in the company's SGL-1 speculative grade liquidity rating. The rating outlook is stable. This ratings confirmation incorporates Moody's expectation that IKON will (1) continue to maintain good balance sheet liquidity relative to investment requirements including seasonal working capital needs, (2) demonstrate consistent business execution while facing constrained overall revenue growth prospects, and (3) not incur additional debt as part of any shareholder value enhancing activities. IKON's Ba2 corporate family rating reflects the competition in this low growth office equipment sector. IKON has a long standing position as the largest independent distributor in the U.S. of Canon (rated Aa1) and Ricoh (rated A1) copier products. However, competition comes from larger and better capitalized players such as Xerox (rated Baa2 positive), other smaller distributors and direct sales forces of Canon and Ricoh in certain major market geographies. That said, the company's business performance has continued to exhibit a stabilizing trend. The Ba2 rating also reflects IKON's moderate financial leverage (9.5% FCF/Debt) and modest interest coverage (3.3 EBIT Coverage), which will improve slightly following the pending redemption of $50 million of the 2012 notes and repayment of about $14 million of maturing notes in June 2008. In line with Moody's loss given default methodology, the notes are currently rated Ba3 with a corresponding LGD4 loss given default assessment. Moody's corresponding LGD point estimate of 62% assumes the $50 million redemption (irrevocable) of the $150 million notes due 2012 as well as the repayment of the nearly $14 million note due June 2008. The stable outlook incorporates expectations that the company will be able to sustain its recent operational improvement and that it will not incur debt or engage in shareholder friendly activities to the detriment of bond holders. IKON Office Solutions, headquartered in Malvern Pennsylvania, is the largest independent distributor of copier, printer and multifunction printer technologies, as well as a provider of integrated document management solutions and systems. IKON generated $4.2 billion in revenue for the twelve months ended March 2008. INDEVUS PHARMA: March 31 Balance Sheet Upside-Down by $101 Million ------------------------------------------------------------------ Indevus Pharmaceuticals Inc. reported Wednesday its consolidated results of operations for the second quarter ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $180.1 million in total assets and $281.4 million in total liabilities, resulting in a $101.3 million total stockholders' deficit. The company reported a net loss of $17.9 million on revenues of $17.6 million for the second quarter of fiscal 2008. This compares with a net loss of $12.4 million on revenues of $11.2 million for the second quarter of fiscal 2007. For the six month period ended March 31, 2008, the company reported revenues of $34.0 million and a net loss of $32.6 million. This compares to revenues of $24.4 million and a net loss of $22.7 million for the six month period ended March 31, 2007. At March 31, 2008, the company had consolidated cash and cash equivalents of approximately $60.8 million. "We have achieved a number of important objectives including the successful launch of SANCTURA XR(TM), the European licensing of VANTAS(R) and the continued outstanding performance of SUPPRELIN(R) LA," said Glenn L. Cooper, M.D., chairman and chief executive officer of Indevus. "Our ongoing preparation for the launch of NEBIDO(R) following the June 27, 2008 FDA Prescription Drug User Fee Act date is clearly a top priority for the company. In addition, FDA action on VALSTAR(TM), multiple business development opportunities and the continued success of our existing marketed products position Indevus for a very successful fiscal year." Financial Results Total consolidated revenues for the quarter ended March 31, 2008, were $17.6 million, an increase of 57% from the $11.2 million reported for the quarter ended March 31, 2007. The primary components of revenue for the quarter ended March 31, 2008 were $10.4 million from the recognition of revenue associated with the SANCTURA(R) franchise, $3.6 million from sales of VANTAS, and $3.0 million from sales of SUPPRELIN LA. During the quarter, the company also recognized $400,000 from sales of DELATESTRYL(R), and $200,000 from royalties for Sarafem. Marketing, general and administrative expenses for the quarter ended March 31, 2008, were $21.3 million, an increase of 68% from the $12.7 million reported for the quarter ended March 31, 2007. Total consolidated revenues for the six month period ended March 31, 2008, were $34.0 million, an increase of 40% from the $24.4 million reported for the six month period ended March 31, 2007. The primary components of revenue for the six month period ended March 31, 2008, were $19.9 million from the recognition of revenue associated with the SANCTURA franchise, $7.2 million from sales of VANTAS, and $5.2 million from sales of SUPPRELIN LA. During the six month period, the company also recognized $1.1 million from sales of DELATESTRYL, and $600,000 from royalties for Sarafem. Marketing, general and administrative expenses for the six month period ended March 31, 2008, were $39.0 million, an increase of 80% from the $21.7 million reported for the six month period ended March 31, 2007. Interest expense were $1.8 million and $3.5 million for the quarter and six month period ended March 31, 2008. This compares with interest expense of $1.3 million and $2.6 million for the quarter and six month period ended March 31, 2007. About Indevus Pharmaceuticals Based in Lexington, Massachusetts, Indevus Pharmaceuticals Inc. (Nasdaq: IDEV) -- http://www.indevus.com/-- is a specialty pharmaceutical company engaged in the acquisition, development and commercialization of products to treat conditions in urology and endocrinology. INTERPUBLIC GROUP: Affiliate Pays $12MM as Settlement with SEC -------------------------------------------------------------- Interpublic Group of Companies Inc.'s subsidiary, McCann-Erickson, agreed to pay a $12 million civil penalty and disgorgement of one dollar as part of the settlement of all charges brought by the Securities and Exchange Commission against IPG and McCann- Erickson. The settlement resulted from investigation conducted by SEC into the company's past financial reporting practices, which begun in 2002. While neither admitting nor denying the allegations brought by the SEC, Interpublic and McCann have agreed to an injunction against violating the applicable provisions of the federal securities laws. "We are very pleased to have settled with the SEC and we believe this matter is now behind us," Michael I. Roth, Interpublic's chairman and CEO, said. "IPG and McCann have cooperated with the Commission from the start of its investigation. The events that gave rise to the SEC charges of securities fraud relate to intercompany accounting practices at McCann which were addressed in our restatement of 1997 to 2002 results and which did not involve client funds." "The individuals named in the SEC's statement have not been with the company since 2003," Mr. Roth added. "Under current management, we have devoted considerable resources to replacing and expanding staff in the relevant areas and our efforts to remediate material financial control weaknesses and improve financial reporting have been a top corporate priority for all of our agencies." "As a result, we achieved compliance with Sarbanes-Oxley standards at the end of 2007," Mr. Roth concluded. "Resolving these final legacy issues will allow us to focus on building the business going forward." About Interpublic New York-based, Interpublic Group of Companies Inc. (NYSE: IPG) -- http://www.interpublic.com/-- is one of the world's leading organizations of advertising agencies and marketing services companies. Major global brands include Draftfcb, FutureBrand, GolinHarris International, Initiative, Jack Morton Worldwide, Lowe Worldwide, MAGNA Global, McCann Erickson, Momentum, MRM Worldwide, Octagon, Universal McCann and Weber Shandwick. Leading domestic brands include Campbell-Ewald, Carmichael Lynch, Deutsch, Hill Holliday, Mullen, The Martin Agency and R/GA. * * * As reported in the Troubled Company Reporter on April 9, 2008, Fitch Ratings has upgraded Interpublic Group of Companies' issuer default rating to 'BB+' from 'BB-'. Approximately $2.1 billion in total debt and $525 million in preferred stock as of Dec. 31, 2007 is affected. The rating outlook is positive. ISCO INT'L: Posts $2.8 Million Net Loss in 1st Qtr. Ended March 31 ------------------------------------------------------------------ ISCO International Inc. reported Wednesday financial results for its first quarter ended March 31, 2008. The company reported a net loss of $2.8 million for the quarter ended March 31, 2008, versus a net loss of $2.4 million during the same period of 2007. ISCO reported net revenues of $2.8 million for the quarter ended March 31, 2008, versus $1.0 million during the comparable period of 2007. All 2008 figures include the addition of Clarity Communication Systems Inc., which was acquired by ISCO on Jan. 4, 2008. Clarity provides low cost handset applications for mobile devices in the wireless telecommunications sector. Gross margin increased to 44% from 26% during the first quarter of 2007, due partly to volume-related efficiencies and partly to the benefits of providing additional higher margin software-related revenue. Total charges related to stock option expense, interest, taxes, depreciation and amortization decreased by $100,000 in the first quarter of 2008 from the first quarter of 2007. "I am excited to be on board and to be driving the changes ISCO is planning for the months ahead," said Gordon Reichard, Jr., chief executive officer of ISCO. "We have already started to see our gross margins increase due to the movement toward more software- based products coming from both sides of our business. As we introduce new products and begin to refine our product packaging, positioning and channel strategy, we're looking for this trend to continue." At March 31, 2008, the company had $27.6 million in total assets and $6.9 million in total stockholders' equity. About ISCO International Headquartered in Elk Grove Village, Ill., ISCO International Inc. (AMEX: ISO) -- http://www.iscointl.com/-- is a supplier of RF management and interference-control solutions for the wireless telecommunications industry. Going Concern Disclaimer As reported in the Troubled Company Reporter on April 18, 2008, Grant Thornton LLP, in Chicago, expressed substantial doubt about ISCO International Inc.'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 reported that the company incurred a net loss of approximately $6.4 million during the year ended Dec. 31, 2007, and, as of that date, the company's accumulated deficit was approximately $171.0 million. The auditing firm also said that the company has consistently used, rather than provided, cash in its operations. JONES APPAREL: Net Income Drops to $19MM in Quarter ended April 5 ----------------------------------------------------------------- Jones Apparel Group Inc. first-quarter net income dropped 59% on higher markdowns and negative retail trends, as the company cut its full-year earnings outlook, citing the challenges of the overall environment, The Wall Street Journal relates. In a news statement, the company reported net income of $19.5 million for first quarter ended April 5, 2008, compared to net income of $47.8 million for the same period in the previous year. Excluding items as the effects of the Barneys New York line in September 2007 and the severance and restructuring charges, earnings from continuing operations fell to 37 cents a share from 46 cents, WSJ states. At April 5, 2008, the company's balance sheet showed total assets of $3.1 billion, total liabilities of $1.1 billion and total shareholders' equity of $2.0 billion. "While first quarter results were in line with our expectations, we believe there is enhanced value to be realized in our businesses as we continue to pursue our operational improvements, enhance the overall appeal of our brands and pursue varied distribution channels, Wesley R. Card, Jones Apparel Group president and chief executive officer, said in a news statement. "Results for the quarter reflect a continued challenging economic and retail environment, as well as a tough comparable quarter, with comparable store sales in our own stores down 8.7% for the quarter compared to 2007," Mr. Card added. "During the quarter, we maintained tighter inventory controls; however markdown support to our retail partners was higher than during the first quarter of 2007 and our retail operations continued to trend negatively consistent with the overall retail climate." Cash used by continuing operating activities during the quarter was $65 million, compared with cash used by continuing operations of $178 million in the prior year. The improvement in cash flow was driven by improved working capital management, the positive impact of exiting certain moderate sportswear lines and the absence of the final payment associated with the exiting of the Polo Jeans company business. "Our financial position remains strong, John T. McClain, Jones Apparel Group chief financial officer, commented. "We ended the quarter with $200 million of cash and $782 million of total debt, which is $303 million less debt than the prior year period. This translates into a debt to total capitalization ratio, net of cash, of 22.5%. We will continue to control our inventory levels and carefully review our spending throughout 2008." "We have tempered our guidance for 2008, to match our retail customers' conservative plans for the back half of the year, Mr. McClain continued. "Our updated guidance for 2008 full year adjusted earnings per share from continuing operations is a range of $1.20 to $1.35, compared with 2007 adjusted earnings per share from continuing operations of $1.26." The company's board of directors has declared a regular quarterly cash dividend of $0.14 per share to all common stockholders of record as of May 16, 2008, for payment on May 30, 2008. About Jones Apparel Group Inc. Headquartered in New York City, Jones Apparel Group Inc. -- http://www.jny.com-- is a designer, marketer and wholesaler of branded apparel, footwear and accessories. The company markets directly to consumers through its chain of specialty retail and value-based stores, and operate the Barneys New York chain of luxury stores. Its nationally recognized brands include Jones New York, Evan-Picone, Norton McNaughton, Gloria Vanderbilt, Erika, l.e.i., Energie, Nine West, Easy Spirit, Enzo Angiolini, Bandolino, Joan & David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Kasper, Anne Klein, Albert Nipon, Le Suit and Barneys New York. * * * Moody's Investor Service placed Jones Apparel Group Inc.'s corporate family and probability of default ratings at 'Ba1' in September 2007. The ratings still hold to date with a negative outlook. JONES APPAREL: S&P Places 'BB+' Corp. Credit Under Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Jones Apparel Group Inc., including the 'BB+' corporate credit rating, on CreditWatch with negative implications. The Bristol, Pennsylvania-based apparel company had about $780 million in debt outstanding at April 5, 2008. "The CreditWatch placement follows the company's announcing first quarter operating results which were much weaker than our expectations," said Standard & Poor's credit analyst Susan Ding. Credit metrics continued to deteriorate from fiscal year-end (December 2007) levels, and increasing leverage remains a concern. For the 12 months ended April 5, 2008, Standard & Poor's estimates lease-adjusted leverage to be in the 5x area, up from 4.6x at fiscal year end. Also, margins were negatively impacted by higher markdowns, leading to a lower EBITDA base. "We are concerned that the company's financial covenant cushion under its revolving credit facility may be tight for the June 2008 quarter and the balance of this year," said Ms. Ding. "We also expect that the rest of 2008 will be challenging and that credit metrics will remain pressured due to weakening economic conditions and the soft retail environment." Standard & Poor's will monitor developments and meet with Jones Apparel management shortly in order to review the company's ongoing operating strategies and financial policy. Resolution of the CreditWatch will focus on the company's ability to improve its operating business trends and financial metrics. JOURNAL REGISTER: Wants to Cease SEC Listing, Suspend Fin'l Filing ------------------------------------------------------------------ Journal Register Company intends to file a form 15 with the Securities and Exchange Commission in order to terminate registration of the company's common stock and suspend its obligation to file current and periodic reports with the SEC. As previously reported in the Troubled company Reporter on April 9, 2008, Journal Register was notified on March 31, 2008, by the New York Stock Exchange that the company had fallen below the NYSE's continued listing standard relating to minimum share price. According to NYSE's Listed company Manual requires that the company's common stock trade at a minimum average closing price of $1.00 during a consecutive 30-day trading period. The board of directors concluded that in light of the NYSE's action to delist the shares and the company's limited ability to access the public capital markets for its foreseeable financing needs, the advantages of being a public company are outweighed by the significant accounting, legal, competitive and administrative costs associated with the reporting requirements for public companies. The board of directors believes that deregistration will result in significant savings to the company, permit management to focus more completely on the company's business operations and enable the company to redeploy resources currently devoted to compliance reporting. The company intends to continue: 1. to report to its stockholders in accordance with Delaware law and its Bylaws; 2. to report its quarterly and annual financial results in press releases; 3. to engage an independent accounting firm to perform an annual audit of the company's financial statements; and 4. to maintain many of the corporate governance improvements the company has made in recent years. Upon the filing of the form 15, the company's obligation to file certain reports and forms with the SEC, including Forms 10-K, 10-Q and 8-K, will cease immediately. The company expects the deregistration to become effective ninety days after the Form 15 is filed with the SEC. The company anticipates that its common stock will continue to be quoted on the Pink Sheets(R), a centralized electronic quotation service for over-the-counter securities, to the extent market makers demonstrate an interest in trading in the company's common stock. However, the company can give no assurance that trading in its stock will continue in the Pink Sheets or in any other forum. About Journal Register company Headquartered in Yardley, Pennsylvania, Journal Register company (NYSE:JRC)-- http://www.journalregister.com-- owns and operates 27 daily newspapers and 368 non-daily publications as of Dec. 31, 2006. The company also operates 239 individual websites that are affiliated with the company's daily newspapers, non-daily publications and its network of employment websites. All of the company's operations are clustered in seven geographic areas: Greater Philadelphia, Michigan, Connecticut, Greater Cleveland, New England, and the Capital-Saratoga and Mid-Hudson regions of New York. The company owns JobsInTheUS, a network of 19 employment websites and three commercial printing operations. The company's total paid circulation is approximately 616,000 daily, 635,000 Sunday and its total non-daily distribution is approximately 6.4 million. In February 2007, the company sold two of its New England Cluster daily community newspapers to Gatehouse Media. KENTUCKY ECONOMIC: S&P Holds 'BB-' Rating; Revises Outlook to Neg. ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Kentucky Economic Development Finance Authority's $74.5 million series 1997 bonds, issued for Appalachian Regional Healthcare, to negative from stable. In addition, Standard & Poor's affirmed its 'BB-' rating on ARH's debt. More specifically, the rating reflects operating losses of $9.7 million (negative 2% margin) in fiscal 2007 and $20.1 million (negative 5.3% margin) in the first nine months of fiscal 2008; weak maximum annual debt service coverage of 1.1x in fiscal 2007, and 0.4x in interim fiscal 2008; thin liquidity with only 31 day's cash on hand as of Mar. 31, 2008; and geographic diversity and leading or dominant market share in the majority of its service areas. "The outlook revision to negative from stable reflects the challenging operating environment following two employee strikes," said Standard & Poor's credit analyst Jessica Goldman. "ARH also faces other challenges such as volume declines, a rural and declining population, and a weak payor mix," Ms. Goldman added. A lower rating is precluded at this time given the recent settlement of the strikes. Management has expressed expectations of operating improvements over the next one to two years. While there are significant costs associated with the two employee strikes, the short-term losses should be offset by longer-term gains in saved compensation and benefits as those areas were brought in line with market rates. Appalachian Regional Healthcare is a major provider of health services in central Appalachia and serves eastern Kentucky and southern West Virginia. ARH has nine acute-care hospitals, including seven in Kentucky and two in West Virginia, ranging from a 25-bed critical-access facility in Morgan County, Kentucky, to a 358-bed regional medical center in Hazard, Kentucky. KIMBALL HILL: Bankruptcy Filing Sparks Repayment Obligations ------------------------------------------------------------ Kimball Hill Inc. and its debtor-affiliates disclosed with the Securities and Exchange Commission that their filing for Chapter 11 protection on April 23, 2008, with the U.S. Bankruptcy Court for the Northern District of Illinois constituted an event of default or otherwise triggered repayment obligations under a number of instruments and agreements relating to direct and indirect financial obligations of the Debtors. As a result of the events of default, some obligations under the Debt Documents became automatically and immediately due and payable. In addition, substantially all of the Debtors' other debt and guarantee obligations could be accelerated upon notice from the applicable lenders. The Debtors believe that any efforts to enforce the payment obligations under the Debt Documents are stayed as a result of the bankruptcy filing. The Debt Documents under which obligations are immediately due and payable and the approximate amount of debt currently outstanding thereunder, are: a) Indenture, dated Dec. 19, 2005, between the Debtor and U.S. Bank National Association, with respect to 10-1/2% Senior Subordinated Notes due 2012. Approximately $210,756,291 is currently outstanding under the Indenture, all of which is unsecured. b) Amended and Restated Credit Agreement, dated as of Aug. 10, 2007, between the Debtors and lenders Harris N.A., as Administrative Agent, Bank of America, N.A., as the Syndication Agent, KeyBank National Association and Wachovia Bank, National Association, as the Co-Documentation Agents, and BMO Capital Markets and Banc of America Securities, LLC, as the Co-Lead Arrangers and the Joint Book Runners. Approximately $305,669,854 is currently outstanding under the Senior Secured Credit Facility, which is secured by all properties in the Borrowing Base. c) The Debtors provided both a Payment and Performance Guaranty and a Payment and Performance Guaranty under the Loan Agreement between Park Boulevard, LLC and Bank of America, N.A. dated as of Nov. 1, 2005. Approximately $6,400,000 is outstanding under the TIF Loan and approximately $2,600,000 is outstanding under the Tax Exempt Loan, all of which is secured. David Hill's Amended Employment Pact On April 22, 2008, the Debtors' entered into an Amendment to the Employment Agreement with David K. Hill, Kimball's Executive Chairman. Pursuant to the terms of the Amendment, Mr. Hill's annual base salary was reduced from $1,500,000 to $500,000. About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. (Kimball Hill Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Court Okays Use of Lenders' Cash Collateral --------------------------------------------------------- The Honorable Susan Pierson Sonderby of the U.S. Bankruptcy Court for the Northern District of Illinois gave interim authority to Kimball Inc. and its debtor-affiliates to use the cash collateral of their prepetition lenders pursuant to a Court-approved budget. The Debtors' use of the cash collateral will terminate if, among other things, the Debtors fail to comply with the budget and the obligation to make disbursements not materially inconsistent with the budget. As reported in the Troubled Company Reporter on April 29, 2008, Harris, N.A., the administrative agent and secured lender in the Debtors' prepetition revolving credit facility, agreed to: i) the Debtors' use of cash collateral; and ii) the priming of their liens in favor of Kimball Hill, Inc., for a $51,851,594 intercompany loan. Harris is owed at least $337,000,000 as of the date of the Debtor's bankruptcy. The Debtors averred that even though the DIP Promissory Note providing for the Intercompany Loan provided by Kimball Parent involves a consensual priming of existing collateral, the interests of the Existing Prepetition Secured Lenders must be adequately protected. As adequate protection to the extent of any diminution in the value of their collateral and for the use of their cash collateral, the Existing Prepetition Secured Lenders and Harris will to be provided: -- replacement liens on the Debtors' assets, other than any unencumbered assets; -- superpriority claims under Section 507(b) of the Bankruptcy Code, which claim will be secured by a lien on the Debtors' unencumbered assets only to the extent of the allowed amount of the Section 507(b) claim; and -- payment (i) equal to the interest under the Prepetition Secured credit Facility and, (ii) for the fees and expenses of the Existing Prepetition Secured Lenders and their professionals. The Debtors can use cash collateral of the Existing Prepetition Secured Lenders postpetition. The Debtors require use of the cash collateral to, among other things, pay present operating expenses, including payroll and vendors, to ensure a continued supply of goods and services essential to the Debtors' continued viability. About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. (Kimball Hill Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Gets Interim Court Nod to Obtain Intercompany Loan ---------------------------------------------------------------- The Honorable Susan Pierson Sonderby of the U.S. Bankruptcy Court for the Northern District of Illinois gave interim permission to Kimball Hill Inc. and its debtor-affiliates to immediately borrow and obtain amounts not to exceed $35,000,000, from parent company Kimball Hill, Inc., as DIP lender. The interim amount the Debtors can borrow as postpetition financing is a portion of the $51,851,594 Federal Tax Refund the Parent received on April 15, 2008. The Tax Refund will be maintained in a segregated account at Harris N.A. All objections to the Debtors' request not otherwise resolved or withdrawn are overruled. The Interim DIP Amount will be used by the Debtors to pay administrative expenses incurred in their Chapter 11 cases and to provide for working capital. For all obligations under the DIP Facility, Parent Kimball is granted an allowed superpriority administrative claim under Sections 503(b) and 507(b) of the Bankruptcy Code, subordinate only to the Carve-Out. A full-text copy of the Interim DIP Order is available for free at http://researcharchives.com/t/s?2b63 About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. (Kimball Hill Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Can Employ Kurtzman Carson as Claims Agent -------------------------------------------------------- Kimball Hill Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Kurtzman Carson Consultants LLC as their notice, claims, and balloting agent. In addition, the Court authorized them to: -- designate Kurtzman Carson as the authorized repository for all proofs of claims filed in their Chapter 11 cases; and -- authorize and direct Kurtzman to maintain official claims registers for the Debtors and provide the Clerk's Office with a certified duplicate of the claims registers. Kurtzman Carson is expected to, among other things: (a) provide consultation services, including: * preparing service lists, claims registers and claims reports; * performing claims reconciliation; * preparing exhibits for claims objections; * performing custom data extraction & forensics; * assisting in preparing statement of financial affairs and schedules; * preparing ballot tabulations and disbursement reports; * assisting in contract and lease collection and analysis; * assisting in preparation of exhibits to a proposed plan of reorganization and disclosure statement; * preparing custom reports and for provision of computer software support; and (b) perform document management services by providing copy and notice services consistent with the applicable Local Rules and as requested by the Debtors. Kurtzman Carson's hourly rates for its professionals are: Professional Hourly Rate ------------ ----------- Clerical $45 to $65 Project Specialist $80 to $140 Technology/Programming $130 to $195 Consultant Consultant $145 to $225 Senior Consultant/Senior $230 to $295 Management Consultant The Debtors will reimburse Kurtzman Carson for actual and necessary expenses the firm incurs in connection with the contemplated services. The Debtors relayed that they paid a $150,000 retainer to Kurtzman Carson on March 21, 2008. Jonathan Carson, president of Kurtzman Carson, assures the Court that neither the firm, nor any of its employees, is connected with the Debtors, their creditors, other parties-in-interest or the United States Trustee or any person employed by the Office of the U.S. Trustee. He maintains that Kurtzman is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Ft. Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. (Kimball Hill Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). LEGENDS GAMING: S&P Withdraws Ratings After Bankruptcy Filing ------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Legends Gaming LLC. The withdrawal follows the company's Chapter 11 filing last month and S&P's subsequent lowering of the corporate credit rating to 'D' from 'CCC+' on March 14. Ratings List To From -- ---- Legends Gaming LLC Corporate Credit Rating NR D First-Lien Loan NR D Recovery Rating NR 1 Second-Lien Loan NR D Recovery Rating NR 5 NR -- Not rated. LIFE SCIENCES: March 31 Balance Sheet Upside-Down by $21.8 Million ------------------------------------------------------------------ Life Sciences Research Inc.'s consolidated balance sheet at March 31, 2008, showed $198.6 million in total assets and $220.4 million in total liabilities, resulting in a $21.8 million total stockholders' deficit. The company reported net income of $6.7 million for the first quarter ended March 31, 2008, compared with net income of $3.5 million for the same period last year. The net income for the quarter ended March 31, 2008, included other expense of $500,000 which comprised finance arrangement fee amortization of $400,000 and $100,000 from the non-cash foreign exchange re-measurement loss on the long-term loan denominated in US dollars. In the same period in the prior year, other expense of $400,000 was comprised of finance arrangement fee amortization of $500,000, offset by $100,000 non-cash foreign exchange re- measurement gain pertaining to the long-term loan denominated in US dollars. Revenues were $63.2 million for the quarter ended March 31, 2008, a 16.4% increase over revenues of $54.3 million for the same period in the prior year. Excluding the effect of exchange rate movements, revenues increased 15.3%. Operating income for the quarter ended March 31, 2008, was $9.7 million, or 15.3% of revenues, compared with $6.2 million, or 11.5% of revenues for the same period in the prior year. The quarter included FAS123R stock option expenses of $500,000 compared with $600,000 in the same quarter last year. Cash and short-term investments at March 31, 2008, was $26.6 million compared with $36.2 million at Dec. 31, 2007. Operating activities used cash of $1.5 million, of which $6.9 million was due to the increase in Days Sales Outstanding (DSO). Net DSO at March 31, 2008, were 23 compared with 13 days at Dec. 31, 2007. Capital expenditure totaled $4.8 million in the first quarter of 2008, compared to $4.0 million in the first quarter of 2007. 1 Net new orders totaled $71.4 million for the first quarter of 2008 which represented an increase of 7.7% over first quarter orders in 2007. This resulted in a book to bill ratio of 1.13 for the quarter, and a trailing twelve month book to bill of 1.11. At March 31, 2008, backlog amounted to approximately $196 million. Brian Cass, LSR's president and managing director commented, "I'm delighted with the solid footing that our first quarter's results represent, with record constant currency revenues and earnings. Our investment in expanded staffing and targeted infrastructure improvements is helping us to profitably meet the growing demand for our services, and we look forward to building on those strengths throughout the year and beyond." Andrew Baker, LSR's chairman and chief executive officer said, "This is an encouraging time for our industry, and an exciting time for our company. We continue to see robust industry demand for outsourced safety testing of both pharmaceutical and biologic products, and our strong new business wins in the past quarter and year are testament to our ability to convert that opportunity. We're buoyed by the confidence our customers place in us, proud of the commitment of our staff, and pleased with the growing interest and support from the investment community." Long-Term Debt At March 31, 2008, the company had long-term debt outstanding of $75.3 million, compared with long-term debt of $75.4 million at Dec. 31, 2007. 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?2b60 About Life Sciences Headquartered in East Millstone, New Jersey, Life Sciences Research Inc. (NYSE Arca: LSR) -- http://www.lsrinc.net/-- is a global contract research organization providing product development services to the pharmaceutical, agrochemical and biotechnology industries. LSR operates research facilities in the United States and the United Kingdom. LINEN 'N THINGS: Files for Chapter 11 Protection in Delaware ------------------------------------------------------------ Linens Holding Co., which does business through its operating subsidiary Linens 'N Things Inc., and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The national home furnishings chain will continue to operate its stores without interruption during the reorganization and the stores are open for business and expect to be well stocked with merchandise. The filing pertains only to LNT's operations in the United States. The company's Canadian stores, which are among the strongest performers in the chain, are not included in the filing and there are no plans for a similar filing in Canada. "LNT's Canadian stores are not part of the Company's Chapter 11 process in the U.S.," Robert J. DiNicola, Executive Chairman, stated. "We are the No. 1 Home Specialty Store in Canada and our Canadian stores have delivered strong sales and productivity growth and profitability. I am particularly pleased that all of our Canadian stores are contributing to this strength and growth." The decision to file for Chapter 11 protection was driven largely by the impact of the current economic downturn on the company's operating performance. Filing for Chapter 11 provides the company with the tools to restructure its balance sheet, close under- performing store locations, revisit certain agreements and position the company for long-term success. LNT has requested immediate authorization and expects approval from the Court to continue paying employee salaries and benefits as well as to honor gift cards and store credits as normal. $700-Mil. DIP Loan From GECC LNT has secured $700 million in debtor-in-possession financing from General Electric Capital Corp., which will ensure healthy merchandise flow as the company prepares for the back-to-school and holiday selling seasons. The company has been working closely with key vendors, who have been supporting the Company with new merchandise in recent weeks. The DIP facility will allow the company to normalize relations with the larger vendor community. The company believes the DIP facility will provide adequate working capital to meet its ongoing obligations during the restructuring. "The significant deterioration in the mortgage, housing and credit markets and the resulting impact on the retail marketplace, particularly the home sector, has overwhelmed the operating and merchandising improvements that we have made over the past two years," said Robert J. DiNicola, Executive Chairman, said. "We are making the strategic decision to use a Chapter 11 filing to proactively address our capital structure and ensure that our stores will remain well stocked while we work through the steps to align the capital structure of the company with the realities of today's business environment. At the store level, we remain fully operational and ready to serve our guests." Pursuant to the DIP Credit Agreement, Linens 'n Things plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens to Close 120 Outlets With the assistance of Asset Disposition Advisors, LLC, the retailer plans to close 120 of its 589 stores, shrinking the chain by 20% to 469 locations. "The decision to close stores was difficult but necessary to improve LNT's financial position and place the company on a firmer financial footing as we move forward," Mr. DiNicola stated. "We will be able to realize important cost savings and operational efficiencies as a result of this process, allowing us to serve all our constituencies more effectively." Linens Taps Conway Del Genio's Gries a CRO Conway Del Genio Gries & Co. will continue to serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. To help effectuate the company's financial restructuring, the company's Board of Directors has named Michael F. Gries, co- founder of Conway Del Genio, Chief Restructuring Officer and Interim CEO. Mr. DiNicola, the Company's current Chairman and CEO, will become Executive Chairman. David Coder, currently Executive Vice President, Store Operations, has been appointed President and Chief Operating Officer of LNT. "As we move forward with LNT's restructuring, the Board and I concluded that we needed to have additional restructuring expertise on our executive team," Mr. DiNicola added. "Michael Gries is as good as it gets in this area, a nationally recognized leader with the deep experience in driving the financial initiatives necessary to position our company for the future. I look forward to working with him to help LNT reach its full potential. I am also particularly pleased about Dave Coder's promotion. He has been a key part of our past success and the operational strides we have made and will be integral in our reorganization efforts." Linens 'n Things is represented by both Richards, Layton & Finger and Morgan Lewis & Bockius. A Noteholder Committee has been formed and is represented by Kasowitz Benson and Pachulski Stang. The Clifton, New Jersey-based Company -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of December 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name well as private label home furnishings merchandise in the industry. LINEN 'N THINGS: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------------- Debtors filing separate Chapter 11 petitions: Entity Case No. ------ -------- Linens Holding Co. 08-10832 Linens 'n Things, Inc. 08-10833 Linens 'n Things Center, Inc. 08-10834 Bloomington, MN., L.T., Inc. 08-10835 Vendor Finance, LLC 08-10836 LNT, Inc. 08-10837 LNT Services, Inc. 08-10838 LNT Leasing II, LLC 08-10839 LNT West, Inc. 08-10840 LNT Virginia LLC 08-10841 LNT Merchandising Company LLC 08-10842 LNT Leasing III, LLC 08-10843 Citadel LNT, LLC 08-10844 Chapter 11 Petition Date: May 2, 2008 Court: United States Bankruptcy Court, District of Delaware Judge: Honorable Christopher S. Sontchi Debtors' Bankruptcy Counsel: Mark D. Collins, Esq. John H. Knight, Esq. Michael J. Merchant, Esq. Jason M. Madron, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 North King St. Wilmington, DE 19801 T: 302-651-7700 F: 302-651-7701 http://www.rlf.com Debtor's Special Corporate Counsel: Holland N. O'Neil, Esq. Ronald M. Gaswirth, Esq. Stephen A. McCartin, Esq. Randall G. Ray, Esq. Michael S. Haynes, Esq. Gardere Wynne Sewell LLP 1601 Elm St., Ste. 3000 Dallas, TX 75201 T: 214-999-3000 F: 214-999-4667 http://www.gardere.com Debtors' Special Corporate Counsel: Howard S. Beltzer, Esq. Wendy S. Walker, Esq. Morgan, Lewis & Bockius LLP 101 Park Ave. New York, NY 10178-0002 T: 212-309-6000 F: 212-309-6001 http://www.morganlewis.com Debtors' Restructuring Management Services Providers: Conway, Del Genio, Gries & Co., LLC Debtors' CRO/ Interim CEO: Michael F. Gries Co-Founder Conway Del Genio Gries & Co., LLC Debtors' Claims Agent: Kurtzman Carson Consultants LLC http://www.kccllc.net/ Office of the U.S. Trustee: William K. Harrington, Esq. J. Caleb Boggs Federal Building 844 King St., Ste. 2207 Wilmington, DE 19801 T: 302-573-6491 F: 302-573-6497 http://www.usdoj.gov/ust/r03/de.htm Debtors' Consolidated Financial Condition as of December 29, 2007: Total Assets: $1,740,397,000 Total Debts: $1,417,603,000 List of Debtors' 30 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Yankee Candle Company Trade $4,604,554 P.O. Box 110 S. Deerfield, MA 01373-0110 Tel: (800) 792-6180 Fax: (413) 665-3184 Aeolus Down LLC Trade 4,286,370 14050 Norton Avenue Chino, CA 91710 Tel: (909) 465-6118 Fax: (909) 627-1173 Amcor, Inc. Trade 3,685,132 685 A Gotham Parkway Carlstadt, NJ 07072 Tel: (866) 361-2233 Fax: (201) 460-9481 OXO International, Ltd. Trade 3,522,478 1 Helen Of Troy Plaza El Paso, TX 79912 Tel: (915) 225-8000 Fax: (915) 225-8081 Brentwood Originals Trade 3,510,658 20639 South Fordyce Ave Long Beach, CA 90810 Tel: (201) 641-7766 Fax: (201) 641-1712 Regal Home Collections Inc. Trade 3,086,479 271 5th Avenue New York, NY 10016 Tel: (212) 213-3323 Fax: (212) 213-9398 Groupe Seb USA Trade 2,670,391 Formerly Rowenta 196 Boston Avenue Medford, MA 02155 Tel: (781) 306-4660 Fax: (781) 396-1313 M. Block & Sons, Inc. Trade 2,094,348 5020 W. 73rd Street Bedford Park, IL 60638 Tel: (708) 728-8400 Fax: (708) 728-0022 Croscill Inc. Trade 2,080,651 261 5th Avenue New York, NY 10016 Tel: (212) 689-7222 Fax: (212) 481-8656 N.I. Teijin Shoji (USA), Inc. Trade 2,026,426 1412 Broadway, Suite 1100 New York, NY 10018 Tel: (212) 840-6900 Fax: (212) 719-9656 Royale Linens Trade 1,966,821 993 Belleville Turnpike Kearny, NJ 07032 Tel: (201) 997-3700 Fax: (201) 997-2780 Maples Industries Inc. Trade 1,901,206 Moody Ridge Road Scottsboro, AL 35768 Tel: (256) 259-1327 Fax: (256) 259-2072 Ontel Products Corp. Trade 1,824,743 21 Law Drive Fairfield, NJ 07004 Tel: (973) 439-9000 Fax: (973) 439-9024 Homestead Int'l Group Trade 1,789,785 Import, formerly London Fog Group 1359 Broadway New York, NY 10018 Tel: (212) 790-3000 Fax: (212) 790-3192 Meyer Corp. U.S. Trade 1,768,761 1 Meyer Plaza 525 Curtola Parkway Vallejo, CA 94590 Tel: (701) 551-2730 Fax: (707) 551-2957 American Fiber Ind. Trade 1,627,835 Spring Global 205 N White Street Fort Mill, SC 29715 Tel: (803) 574-1500 Fax: (803) 547-1636 Kitchen Aid Portable Appliance Trade 1,624,347 2000 N M63 Benton Harbor, MI 49022 Tel: (269) 923-5000 Fax: (269) 923-3525 Wythe-Will Distributing LLC Trade 1,575,768 3612 Lagrange Parkway Toano, VA 23168 Tel: (757) 565-0351 Fax: (757) 565-3755 Pacific Coast Feather Company Trade 1,559,199 P.O. Box 80385/1964 Fourth Avenue South Seattle, WA 98108 Tel: (206) 336-2453 Fax: (206) 625-9783 Victoria Classics Import Trade 1,393,881 2170 Rt #27 Edison, NJ 08817 Fax: (212) 213-5073 India Ink c/o Amy Basem Trade 1,344,263 2457 E 27th St. Los Angeles, CA 90058 Tel: (323) 277-8400 Fax: (213) 589-9321 Nassau Candy Distributors Inc. Trade 1,311,801 Attn: Jeff Norris 530 West John St. Hicksville, NY 11801 Tel: (516) 433-7100 Fax: (516) 433-9010 Interdesign, Inc. Trade 1,219,999 30725 Solon Industrial Parkway Solon, OH 44139 Tel: (440) 248-0178 Fax: (440) 248-9358 Sourcing Network Sales LLC Import Trade 1,217,744 d/b/a Pandigital Lamorinda Distr. Attn: James Young 6300 Village Pkwy, Suite 10 Dublin, CA 94568 Tel: (925) 833-7898 Fax: (925) 833-7899 Liz Claiborne Div. of American Trade 1,217,603 3901 Gantz Rd., Suite A Grove City, OH 43123 Tel: (614) 871-2400 Fax: (614) 871-2422 Richloom Home Fashions - Import Trade 1,213,672 261 5th Avenue, 12th Floor New York, NY 10016 Tel: (212) 685-5400 Fax: (212) 703-3470 S Lichtenberg & Co., Inc. Trade 1,177,175 295 Fifth Avenue New York, NY 10016 Tel: (212) 689-4510 Fax: (212) 689-4517 CHF Industries Inc. Import Trade 1,133,872 Formerly Cameo Curtains, Inc. One Park Avenue, 9th Floor New York, NY 10016 Tel: (212) 951-7800 Fax: (212) 951-8001 Quest Sales & Services Inc. Trade 1,100,468 Attn: Angie Gerber 1400 Raff Rd. Canton, OH 44750 Tel: (800) 348-5890 Fax: (330) 478-2203 Calphalon Corp. Trade 1,067,108 c/o Newell Rubbermaid 29 East Stephenson Street Freeport, IL 61032 Tel: (815) 235-4171 Fax: (800) 795-2178 LINEN 'N THINGS: List of 120 Underperforming Stores to be Closed ---------------------------------------------------------------- Linens 'n Things, Inc. -- with the assistance of Asset Disposition Advisors, LLC -- plans to close 120 of its 589 stores, shrinking the chain by 20% to 469 locations. The 120 underperforming stores are: Store Location ----- -------- Springdale Mall Mobile, AL Arizona Mills Tempe, AZ Yuma Palsm Regional Shopping Yuma, AZ Lone Tree Plaza Brentwood, CA Cerritos Town Center Cerritos, CA Chino Spectrum Marketplace II Chino, CA Puente Hills Mall City of Industry, CA Corona Hills Plaza Corona, CA Westlake Daly City, CA Hunters Ridge Town Center Fontana, CA Pacific Commons Fremont, CA Amerige Heights Town Center Fullerton, CA Pacheco Plaza Gilroy, CA Glendale Marketplace Glendale, CA Olympic & Sawtelle Los Angeles, CA Santa Margarita Town Center Margarita, CA Sisk Road Center Modesto, CA Montclair Plaza Montclair, CA The Moorpark Marketplace Moorpark, CA The Shops on South Lake Street Pasadena, CA Pleasant Hill Pleasant Hill, CA Canyon Springs Riverside, CA The Promenade of Natomas Sacramento, CA Oakridge Mall San Jose, CA Stevens Creek Central Shopping Center San Jose, CA Riverside Shopping Center Sherman Oaks, CA Tracy Tracy, CA The Market Place Tustin, CA Dyer Street Triangle Union City, CA Fallbrook Center West Hills, CA Arapahoe Crossings Aurora, CO Broomfield Village Broomfield, CO Quebece Square Denver, CO Belmar Shopping Center Lakewood, CO Farmington Farmington, CT Lisbon Landing Lisbon, CT Marketplace at Altamonte Altamonte Springs, FL Aventura Aventura, FL Boca Raton Boca Raton, FL The Shoppes at Dadeland Miami, FL LNT Shopping Center Vero Beach, FL Cross County Plaza W. Palm Beach, FL Perimeter Mall Atlanta, GA Uptown Square Shopping Center Fayetteville, GA Stonecrest Marketplace Lithonia, GA Macon Mall Macon, GA Southlake Pavillion Morrow, GA Grand Teton Mall Idaho Falls, ID North Michigan Ave. Chicago, IL Deer Grove Center Palantine, IL The Promenade Venture II Schaumburg, IL Orchard Place Shopping Center Skokie, IL University Center Mishawaka, IN The Legends at Village West Kansas City, KS Orchard Corners Lenexa, KS Independence Mall Kingston, MA Berkshire Mall Lanesboro, MA King Phillips Crossing Seekonk, MA The Capital Center Largo, MD Bangor Parkad Bangor, ME The Shops at Biddeford Crossing Biddeford, ME Rivertown Marketplace Grandville, MI Centerpoint Mall Kentwood, MI Millenium Park Livonia, MI Novi Town Center Novi, MI Baldwin Commons Orion Township, MI Winchester Mall Rochester Hills, MI Troy Marketplace Troy, MI The Gateway W. Bloomfield TWP., MI Alpine Summit Walker, MI Apache Shoppes Rochester, MN Woodbury Lakes Woodbury, MN Hartman Heritage Center Independence, MO Stateline Station S/C Kansas City, MO Barry Towne Center Kansas City, MO Menard's Plaza West Fargo, ND Sorenson Parkway Plaza Omaha, NE Howell Commons Howell, NJ Wrangleboro Square May Landing, NJ Woodbridge Crossing Woodbridge, NJ South Virginia St. Reno, NV The Crossing Clifton Park, NY Northway Mall Colonie, NY Woodbury Town Center Harriman, NY Manhasset Center Manhasset, NY Cortland Town Center Mohegan Lake, NY Midway Shopping Center Scarsdale, NY Riverside Center Utica, NY Bainridge Commons Aurora, OH Polaris Towne Center Columbus, OH Cuyahoga Falls Marketplace Cuyahoga, OH Tuttle Crossing Dublin, OH Golden Gate Plaza Mayfield Heights, OH Crossroads of America Perrysburg, OH Tanasbourne Town Center Beaverton, OR Millcreek Pavillion Erie, PA Former Hechingers Monroeville, PA Marple Crossroads Springfield, PA Pittsburgh Mills Tarentum, PA Lehigh Valley Mall Whitehall, PA Middletown Center Middletown, RI Dorman Center Spartanburg, SC Hickory Hollow Mall Antioch, TN Tech Ridge Crossing Austin, TX Sunrise Mall Brownsville, TX Plaza at Cedar Hill Cedar Hill, TX Best Buy Plaza Dallas, TX Alpha Parkway Dallas, TX West Oaks Mall Houston, TX Rio Norte Center Laredo, TX The Marketplace at Towne Center Mesquite, TX Plano Plano, TX Wichita Falls Wichita Falls, TX Murray Murray, UT Newpark Town Center Park City, UT Potomac Mills Shopping Center Prince William, VA Tyson's Corner Vienna, VA Greenway Station Middleton, WI The Grand Avenue Mall Milwaukee, WI Regency Mall Racine, WI Clifton, New Jersey-based Linens Holding Co., which does business through its operating subsidiary Linens 'N Things Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of December 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name well as private label home furnishings merchandise in the industry. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. LINEN 'N THINGS: Organizational Meeting Scheduled for May 9 ----------------------------------------------------------- Kelly Beaudin Stapleton, the United States Trustee for Region 3, will convene an organizational meeting in Linens N' Things, Inc. and its affiliates' chapter 11 cases on May 9, 2008, at 11:00 a.m. The meeting will be held at The DoubleTree Hotel located at 700 King Street in Wilmington. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' bankruptcy cases. This is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. However, a Debtor's representative may attend and provide background information regarding the cases. Clifton, New Jersey-based Linens Holding Co., which does business through its operating subsidiary Linens 'N Things Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of December 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name well as private label home furnishings merchandise in the industry. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. LIQUIDMETAL TECH: Choi Kim & Park Expresses Going Concern Doubt --------------------------------------------------------------- Los Angeles-based Choi, Kim & Park LLP raised substantial doubt on the ability of Liquidmetal Technologies, 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 working capital deficit. The management reported that the company experienced losses from continuing operations during the last three fiscal years and has an accumulated deficit of $154,710,000 as of Dec. 31, 2007. Net cash used for continuing operations for the year ended Dec. 31, 2007 was $10,239,000. At Dec. 31, 2007, working capital deficit was $12,359,000. As of Dec. 31, 2007, the company's principal source of liquidity is $1,180,000 of cash and $5,165,000 of trade accounts receivable. "These operating results occurred while the company was developing and continues to develop, commercialize, and manufacture products from an entirely new and unique technology. These factors have placed a significant strain on the financial resources of the company. Our ability to overcome these challenges depends on its ability to correct its production inefficiencies, continue to reduce its operating costs, generate higher revenue, and achieve positive cash flow from continuing operations and profitability and continued sources of debt and equity financing," the management added. The company posted a net loss of $5,640,000 on total revenues of $29,022,000 for the year ended Dec. 31, 2007, as compared with a net loss of $14,522,000 on total revenues of $27,669,000 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $22,513,000 in total assets and $36,709,000 in total liabilities, resulting in $14,580,000 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $9,351,000 in total current assets available to pay $21,710,000 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?2ae9 About Liquidmetal Headquartered in Rancho Santa Margarita, Calif., Liquidmetal Technologies, Inc., (OTC BB: LQMT.OB) -- http://www.liquidmetal.com/-- is a materials technology company that develops and commercializes products made from amorphous alloys. The company's Liquidmetal(R) family of alloys consists of a variety of coatings, powders, bulk alloys, and composites that utilize the advantages offered by amorphous alloy technology. LOS ROBLES: Eroding Credit Quality Cues Moody's Rating Downgrades ----------------------------------------------------------------- Moody's Investors Service downgraded and left on review for possible further downgrade the ratings on these notes issued by Los Robles CDO Ltd. Class Description: $225,000,000 Class A-2 Floating Rate Notes Due Aug. 12, 2047 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $67,500,000 Class A-3 Floating Rate Notes Due Aug. 12, 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $33,000,000 Class B Floating Rate Notes Due Aug. 12, 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Additionally, Moody's also downgraded these notes: Class Description: $37,500,000 Class C Deferrable Interest Floating Rate Notes Due Aug. 12, 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $30,750,000 Class D Deferrable Interest Floating Rate Notes Due Aug. 12, 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. MACKLOWE PROPERTIES: Topland Group Eyes Manhattan Properties ------------------------------------------------------------ Topland Group Holdings Ltd. appears interested in acquiring Harry Macklowe's Manhattan properties, including General Motors Building, Laura Chesters of Property Week in London relates. Topland joins a shortlist of potential buyers, Larry Silverstein and Vornado Realty Trust, a junior creditor of Macklowe. However, the report says, Topland hasn't formalized its bid. The Macklowe properties are marketed by Citigroup and CB Richard Ellis Group Inc. Jones Lang LaSalle is Topland's adviser. Offers for Macklowe's GM Building As reported by the Troubled Company Reporter on Feb. 20, 2008, Mr. Macklowe received offers to buy his General Motors Building from several parties, including developer Larry Silverstein and Joseph Cayre. Several offers for the GM Building are more than $3 billion amid the sluggish economy, the TCR reported on Feb. 20, 2008. On Jan. 16, 2008, the TCR related that Mr. Macklowe hired CB Richard Ellis to sell off GM building at 767 Fifth Avenue in midtown Manhattan for more than $3 billion. Mr. Macklowe acquired the 50-story GM building in 2003 from Conseco Inc. for $1.4 billion. The building, which originally served as a showroom for General Motors cars, is part of the collateral the a bridge loan from Fortress Investment Group LLC. Market Woes Slow Down GM Building Sale On March 27, 2008, the TCR reported that investors await the completion of the sale of the GM Building for an asking price of $3 billion amid slowed transactions in the commercial property sector. According to Jones Lang LaSalle managing director, Nat Rockett, "there is [generally] very, very little transaction activity" in the market. He commented that the so-called benchmark sale of GM Building will result in "a disproportionate impact." Lenders Waive Loan Default A spokesperson for Macklowe Properties founder stated Feb. 15, 2008, that Mr. Macklowe obtained a waiver extending the maturity of his billions of dollars in debts owed to two major lenders, Deutsche Bank AG and Fortress. As previously reported by the TCR, Mr. Macklowe owes Deutsche Bank about $5.8 billion, and Fortress about $1.2 billion, plus accrued interest. Both of the debts, secured by Mr. Macklowe's $7 billion real property in Manhattan, originally matured Feb. 9, 2008. About Topland Group London-based Topland Group Holdings Ltd. -- http://www.topland.co.uk/-- is a privately owned international investment groups, with property assets of $8 billion. It is known for the acquisition of 33 supermarkets and two distribution centres from Tesco in 2004 at around $1.3 billion, as well as the Marks & Spencer portfolio of 78 stores in 2001 for EUR1.69 billion. Topland disposed of its interest in the Joint Venture with Tesco, and has sold its portfolio at market value at around $1.9 billion. It is diversifying into Europe, having acquired the Magnum Portfolio, consisting of retail warehousing in Germany. Sol Zakay runs Topland. The Topland Group of Companies forms the UK based operations of Topland Group Holdings Ltd., and has responsibility for the management of the majority of the Group's property holdings. About Macklowe Properties Headquartered in New York City, Macklowe Properties -- http://www.macklowe.com/-- is a real estate investment firm that buys, develops, manages, and leases commercial office properties and apartment buildings primarily in Manhattan. The company was founded in the mid-1960s by chairman and CEO Harry B. Macklowe, whose son, William Macklowe, serves as the company's president. The company currently owns about 12 million square feet of office space and 900 apartment units. MORGAN STANLEY: S&P Downgrades Ratings on Four Classes of Certs. ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes of certificates issued by Morgan Stanley Mortgage Loan Trust 2004-11AR and on two classes of certificates issued by PPT Asset-Backed Certificates Series 2004-1. Concurrently, S&P affirmed its ratings on 179 classes from these and 24 other U.S. Alternative-A transactions issued in 2004 or earlier. S&P lowered its ratings on the class 1-B-5 and B-5 mortgage pass- through certificates from Morgan Stanley Mortgage Loan Trust 2004- 11AR to 'CCC' from 'B' and lowered the ratings on that issuer's class 1-B-4 and B-4 certificates to 'B' from 'BB'. The downgrades reflect severe delinquencies (90-plus days, foreclosures, and REOs) of approximately 21% of the current pool balance of loans backing the first structure, and approximately 7.2% for the second structure. At these levels, the projected credit support for these classes is inadequate for the prior ratings. Furthermore, this transaction has started to incur heavier losses over the past three months. In addition, S&P lowered its ratings on the class B-3 asset-backed certificates issued by PPT Asset-Backed Certificates Series 2004-1 to 'CCC' from 'BBB-' and S&P's ratings on the class B-2 certificates from the same transaction to 'BB' from 'BBB'. This transaction's losses have outpaced excess interest, and overcollateralization (O/C) is approximately 0.37% of the original pool balance, below the target of 0.50%. Current severe delinquencies are approximately 4.8% of the current pool balance, which indicates that the projected credit support for both classes is inadequate for the prior ratings. The losses incurred by this transaction have also increased over the past six months. The rating on the class M-5 asset-backed pass-through certificates issued by Homestar Mortgage Acceptance Corp. 2004-3 remains on CreditWatch with negative implications due to high severe delinquencies compared with available credit support. O/C for this transaction is approximately 0.37% of the original pool balance, which is below its target of 0.50%. Severe delinquencies are approximately 6.3 times O/C. Excess interest has exceeded losses in two of the past three months and in five of the past 12 months. Standard & Poor's will continue to closely monitor the performance of this transaction. If losses or delinquencies decline, and the level of credit support has not further eroded, S&P will affirm the rating and remove it from CreditWatch. Conversely, if losses continue to outpace excess interest or if delinquencies continue to grow, S&P will take further negative rating actions. Standard & Poor's affirmed the ratings on the other transactions due to performance that is sufficient to support the current ratings. The severe delinquencies for these transactions range from zero for several transactions to 21.4% of the current pool balance for Impac Secured Asset Corp. Series 2000-3. Losses range from zero for several transactions to approximately 3.57% of the original pool balance for PPT Asset-Backed Certificate Series 2004-1. Credit support for these transactions is provided through a combination of subordination, excess spread, and O/C, and some classes receive additional support from a bond insurance policy. The pools initially consisted of Alt-A, fixed- and adjustable-rate mortgage loans secured by first or second liens on residential properties. Ratings Lowered Morgan Stanley Mortgage Loan Trust 2004-11AR Rating ------ Transaction Class To From ----------- ----- -- ---- 2004-11AR 1-B-4 B BB 2004-11AR B-4 B BB 2004-11AR 1-B-5 CCC B 2004-11AR B-5 CCC B PPT Asset-Backed Certificates Series 2004-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2004-1 B-2 BB BBB 2004-1 B-3 CCC BBB- Rating Remaining on CreditWatch Negative Homestar Mortgage Acceptance Corp. Rating ------ Transaction Class To From ----------- ----- -- ---- 2004-3 M-5 BBB/Watch Neg BBB/Watch Neg Ratings Affirmed HomeBanc Mortgage Trust 2004-1 Transaction Class Rating ----------- ----- ------ 2004-1 I-A AAA 2004-1 II-A AAA 2004-1 II-M-1 AA 2004-1 I-M-1 AA 2004-1 II-M-2 A 2004-1 I-M-2 A 2004-1 I-B BBB 2004-1 II-B BBB HomeBanc Mortgage Trust 2004-2 Transaction Class Rating ----------- ----- ------ 2004-2 A-1 AAA 2004-2 A-2 AAA 2004-2 M-1 AA 2004-2 M-2 A 2004-2 B-1 BBB Homestar Mortgage Acceptance Corp. Transaction Class Rating ----------- ----- ------ 2004-3 AV-1 AAA 2004-3 AV-2C AAA 2004-3 AV-3 AAA 2004-3 M-1 AA 2004-3 M-2 A 2004-3 M-3 A- 2004-3 M-4 BBB+ 2004-4 A-2 AAA 2004-4 A-3 AAA 2004-4 M-1 AA 2004-4 M-2 AA- 2004-4 M-3 A+ 2004-4 M-4 A 2004-4 M-5 A- 2004-4 M-6 BBB+ 2004-4 M-7 BBB Impac CMB Trust Series 2002-9F Transaction Class Rating ----------- ----- ------ 2002-9F A-1 AAA 2002-9F M-1 AA+ 2002-9F M-2 A+ 2002-9F B BBB Impac CMB Trust Series 2003-2F Transaction Class Rating ----------- ----- ------ 2003-2F A-1 AAA 2003-2F M-1 AA+ 2003-2F M-2 A+ 2003-2F B BBB+ Impac CMB Trust 2003-9F Transaction Class Rating ----------- ----- ------ 2003-9F A-1 AAA 2003-9F M AA Impac CMB Trust Series 2004-3 Transaction Class Rating ----------- ----- ------ 2004-3 3-A AAA 2004-3 3-M-1 AA 2004-3 3-M-2 A 2004-3 3-B BBB Impac CMB Trust Series 2004-4 Transaction Class Rating ----------- ----- ------ 2004-4 1-A-1 AAA 2004-4 1-A-2 AAA 2004-4 1-A-3 AAA 2004-4 2-A-1 AAA 2004-4 2-A-2 AAA 2004-4 1-M-1 AA+ 2004-4 1-M-2 AA+ 2004-4 2-M-1 AA+ 2004-4 1-M-3 AA 2004-4 1-M-4 AA 2004-4 1-M-5 A+ 2004-4 2-M-2 A+ 2004-4 1-M-6 A 2004-4 2-B BBB+ Impac CMB Trust 2004-5 Transaction Class Rating ----------- ----- ------ 2004-5 1-A-1 AAA 2004-5 1-A-3 AAA 2004-5 1-M-1 AAA 2004-5 2-A AAA 2004-5 I-A-2 AAA 2004-5 1-M-2 AA+ 2004-5 1-M-3 AA+ 2004-5 1-M-4 AA 2004-5 1-M-5 AA 2004-5 1-M-6 AA- Impac CMB Trust Series 2004-6 Transaction Class Rating ----------- ----- ------ 2004-6 1-A-1 AAA 2004-6 1-A-2 AAA 2004-6 1-A-3 AAA 2004-6 2-A AAA 2004-6 M-1 AAA 2004-6 M-2 AAA 2004-6 M-3 AA+ 2004-6 M-4 AA+ 2004-6 M-5 AA 2004-6 M-6 AA Impac CMB Trust Series 2004-7 Transaction Class Rating ----------- ----- ------ 2004-7 1-A-1 AAA 2004-7 1-A-2 AAA 2004-7 2-A AAA 2004-7 M-1 AAA 2004-7 M-2 AA+ 2004-7 M-3 AA+ 2004-7 M-4 AA+ 2004-7 M-5 AA Impac CMB Trust Series 2004-9 Transaction Class Rating ----------- ----- ------ 2004-9 1-A-1 AAA 2004-9 1-A-2 AAA 2004-9 2-A AAA 2004-9 M-1 AA+ 2004-9 M-2 AA+ 2004-9 M-3 AA 2004-9 M-4 AA 2004-9 M-5 A+ 2004-9 M-6 A Impac Secured Assets Corp. Transaction Class Rating ----------- ----- ------ 2000-3 A-13 AAA 2000-3 A-14 AAA 2002-2 A-3 AAA 2002-2 A-IO AAA 2002-2 A-PO AAA 2002-2 M-1 AAA 2002-2 M-2 AA+ 2002-2 M-3 A 2002-2 B-1 BB 2002-2 B-2 B 2002-3 M-1 AAA 2002-3 M-2 AA 2002-3 B BB 2003-1 A-1 AAA 2003-1 M-1 AA+ 2003-1 M-2 A+ 2003-1 B BBB+ 2003-3 A-1 AAA 2003-3 M-1 AA 2003-3 M-2 A 2003-3 B BBB 2004-1 A-4 AAA 2004-1 A-5 AAA 2004-1 A-6 AAA 2004-1 M-1 AA 2004-1 M-2 A 2004-1 M-3 BBB 2004-2 A-4 AAA 2004-2 A-5 AAA 2004-2 A-6 AAA 2004-2 M-1 AA 2004-2 M-2 A 2004-2 M-3 BBB Morgan Stanley Mortgage Loan Trust Transaction Class Rating ----------- ----- ------ 2004-11AR 1-A-1 AAA 2004-11AR 1-A-2A AAA 2004-11AR 1-A-2B AAA 2004-11AR 1-X-2 AAA 2004-11AR 1-X-B AAA 2004-11AR 2-A AAA 2004-11AR 3-A AAA 2004-11AR 4-A AAA 2004-11AR 5-A AAA 2004-11AR A-R AAA 2004-11AR 1-B-1 AA 2004-11AR B-1 AA 2004-11AR 1-B-2 A 2004-11AR B-2 A 2004-11AR 1-B-3 BBB 2004-11AR B-3 BBB MortgageIT Trust 2004-1 Transaction Class Rating ----------- ----- ------ 2004-1 A-1 AAA 2004-1 A-2 AAA 2004-1 M-1 AAA 2004-1 M-2 AA 2004-1 B-1 A 2004-1 B-2 BBB MortgageIT Trust 2004-2 Transaction Class Rating ----------- ----- ------ 2004-2 A-1 AAA 2004-2 A-2 AAA 2004-2 M-1 AAA 2004-2 M-2 AA 2004-2 B-1 A 2004-2 B-2 BBB PPT Asset-Backed Certificates Transaction Class Rating ----------- ----- ------ 2004-1 A AAA 2004-1 M-1 AA 2004-1 M-2 A 2004-1 B-1 BBB+ RAAC Series 2004-SP1 Trust Transaction Class Rating ----------- ----- ------ 2004-SP1 A-I-2 AAA 2004-SP1 A-I-3 AAA 2004-SP1 A-I-4 AAA 2004-SP1 A-II AAA 2004-SP1 M-1 AA 2004-SP1 M-2 A 2004-SP1 M-3 BBB RAAC Series 2004-SP3 Trust Transaction Class Rating ----------- ----- ------ 2004-SP3 A-I-1 AAA 2004-SP3 A-I-2 AAA 2004-SP3 A-I-3 AAA 2004-SP3 A-I-4 AAA 2004-SP3 A-I-5 AAA 2004-SP3 A-II AAA 2004-SP3 M-I-1 AA 2004-SP3 M-II-1 AA 2004-SP3 M-I-2 A 2004-SP3 M-II-2 A 2004-SP3 M-I-3 BBB 2004-SP3 M-II-3 BBB 2004-SP3 M-II-4 BBB- MORGAN STANLEY: Fitch Cuts Rating on $64.9MM Certificates to BB+ ---------------------------------------------------------------- Fitch Ratings downgraded Morgan Stanley Capital I Inc. series 2005 XLF, commercial mortgage pass-through certificates as: -- $64.9 million class M to 'BB+' from 'BBB-'; Rating Watch Negative. In addition, Fitch affirmed these classes: -- $295 million interest-only class X at 'AAA'; -- $41.7 million class F at 'AAA'; -- $43.8 million class G at 'AAA'; -- $43.1 million class H at 'AA+'; -- $36.9 million class J at 'A'; -- $27.8 million class K at 'BBB+'; -- $36.8 million class L at 'BBB'. Classes A-1, A-2, B, C, D, E and the non-rated classes N-TG, N-FB and O-FB have been paid in full. Class M is downgraded and removed from Rating Watch Negative due to continued uncertainty regarding leasing at the Dominion Tower loan (10.2%). As of the April 2008 distribution date, the transaction has paid down 84.5%, to $295 million from $1.9 billion at issuance. Four of the original 17 loans remain. The Dominion Tower loan (10.2%) is secured by an office building in Pittsburgh, Pennsylvania that is currently 42% occupied. The largest tenant at issuance vacated its space comprising 19.3% of net rentable area in August 2007. The borrower has signed a lease with a replacement tenant for 13.8% of net rentable area. With the new tenant, physical occupancy will increase to 56%, which is below the market average of 82%. The loan's current extended maturity date is May 9, 2008, and the borrower has applied for the second of three one-year extension options. The loan no longer maintains an investment grade shadow rating. The largest loan in the transaction, Metrocenter Mall (38%), is secured by 534,912 square feet of a 1.3 million square foot regional mall located in Phoenix, Arizona. The mall is undergoing an extensive renovation, and two of its former anchor spaces are vacant. However, performance and occupancy at the collateral space were stable as of Year End 2007, and management is in discussions with potential tenants to lease the anchor spaces. The YE 2007 Fitch stressed debt service coverage ratio was 1.54 times, compared to 1.27x at issuance. Occupancy of the collateral was 95% compared to 92.9% at issuance. The mall is well-located and benefits from experienced sponsorship and management by the Macerich Company. The loan's current extended maturity date is Feb. 9, 2009, and there is one more one-year extension option. Lakeside Technology Center (26.4%) is secured by a 1.1 million square foot office/telecom building located in Chicago, Illinois. Performance has improved significantly since issuance. As of YE 2007 occupancy had increased to 85% compared to 69.8% at issuance, and the Fitch stressed DSCR was 3.40x, compared to 1.49x. The loan matures on June 9, 2008, and the borrower has applied for the first of two one-year extension options. Waterfront Corporate Center II (25.4%) is secured by a 531,159 square foot office building located in Hoboken, New Jersey. As of YE 2007, occupancy had increased to 88.2% from 83% at issuance, and the Fitch stressed DSCR was unchanged from issuance at 1.37x. The loan's extended maturity date is Feb. 9, 2009, and there is one more one-year extension option. Performance for three of the four remaining loans has been stable- to-improved since issuance. Two of the three loans are currently within their first extension options, and a third has applied to exercise its first extension option. Loan extensions are expected as the three loans currently have interest rates that are lower than prevailing market rates. Fitch reviewed YE 2007 operating statements and recent rent rolls for each of the four remaining loans. The DSCRs for the loans are calculated based on a Fitch adjusted net cash flow and a stressed debt service based on the current loan balances and a hypothetical mortgage constant. NEW CENTURY: Committee Calls For Investigation Over Disputes ------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in the chapter 11 cases of New Century Financial Corporation and its affiliates -- as co-proponent together with the Debtors to the First Amended Joint Chapter 11 Plan of Liquidation dated as of March 18, 2008 -- states that a number of disputes and controversies between the various creditor constituencies had to be investigated and settled in connection with the consensual plan. Starting with the premise that the cases should be confirmed on a deconsolidated basis -- the separate assets and liabilities of each Debtor entity should be respected -- the Plan Proponents, the Debtors and the Committee have examined numerous issues involving the assets and liabilities of the separate Debtors' estates, as well as other material issues not reflected on the Debtors' books and records. Representing the Creditors Committee, according to David W. Carickhoff, Esq., at Blank Rome LLP, in Wilmington, Delaware, the various creditors represented on the Committee engaged in extensive, arm's-length negotiations, to try and settle certain disputes without having to resort to costly, time-consuming and protracted litigation. The Plan embodies a number of intricate and complex settlements among the various creditors having claims against different Debtor entities. Those settlements are interrelated and cannot be modified without impacting the other compromises embodied in the Plan. Mr. Carickhoff relates that one of the principal issues that had to be resolved was determining the proper allocation method of the administrative expenses among the various Debtors' estates. The Debtors and the Committee decided that an appropriate method would be to base the allocation on the estimated asset values of the various Debtor groups, resulting in the allocation of the expenses at 22.4% to the Holding Company Debtors, 76.8% to the Operating Company Debtors, and 0.7% to Access Lending. The Committee also raised issues concerning the proper ownership of certain assets by a Debtor, the Carrington Interest in particular. The Committee ultimately decided, when attempting to ensure that creditors were not adversely impacted by the Holding Company Debtors/Operating Company Debtors structure, that ownership of the Carrington Interest should be divided at 50% to New Century Financial Corp. and 50% to New Century TRS Holdings, Inc., and that the assets held in the Rabbi Trust should be allocated 100% to NCFC. The Committee admits that different results could have been reached, but the asset allocations were part of the Plan compromises. Mr. Carickhoff adds that other issues concerning the treatment of intercompany claims, the sale or securitization of mortgage loans, the Multi-Debtor Claim Protocol and the EPD/Breach Claim Protocol, have also been resolved. After months of negotiations, Mr. Carickhoff says that the Committee voted unanimously to approve the terms of the Plan. The Committee's approval demonstrates broad acceptance of the Plan, since it is comprised of a balanced cross-section of the different creditor constituencies. The Committee submits that the Plan, as well as the compromises and settlements contained therein, is reasonable and should be approved by the Court in its entirety. Natixis Objects Natixis Real Estate Capital, Inc., opposes the Debtors' request to modify the the First Amended Joint Plan. In connection to a settlement of disputes with Goldman Sachs Mortgage Company as incorporated in the Modifications, Natixis states that it is not clear how the proposed settlement will impact its rights or benefit the Debtors' estates. It relates that Natixis had purchased 71 mortgage loans from Maxim Mortgage Corp., for $14,600,000. Natixis paid $10,200,000 of the purchase price to New Century Warehouse Corp., doing business as Access Lending, for 52 Mortgage Loans financed by NCWC. In exchange for the payment, NCWC gave Natixis a security release certification. According to Natixis, Goldman, a direct lender to NCWC, was the bona fide owner of the Mortgage Loans. Natixis is allegedly liable to Goldman for the purchase price of 38 Mortgage Loans, for which Natixis paid $7,521,917. Goldman had filed a complaint against Natixis, which Natixis sought to dismiss. Goldman and Natixis also filed separate claims against NCWC. Under the Plan, the Debtors and Goldman have entered into a settlement, allowing Goldman a $9,506,754 unsecured claim against NCWC, a $5,000,000 unsecured claim against New Century Financial Corp., and a release from the Debtors. Natixis insists that the settlement with Goldman does not clearly indicate how Goldman will allocate the settlement proceeds to various aspects of its claims, including those arising from the Mortgage Loans. Natixis seeks a continuance of the Plan confirmation as it relates to the settlement, asserting that the shortened notice period is insufficient time to fully analyze the Modifications. Plan Proponents File Support Brief The Court has allowed the Plan Proponents to file and serve their reply brief supporting the Second Amended Joint Plan of Liquidation dated April 23, 2008, as well as the and supplemental reply of the Committee in further support of the Plan Confirmation. The Plan Proponents asserted that the additional time to file and serve the replies is warranted with regard to objections to the Second Amended Plan, as well as the complexity of the issues raised in the objections. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a plan expired on Jan. 28, 2008. (New Century Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NEW CENTURY: Plan Confirmation Hearing Slated for May 7 ------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware adjourned the trial to consider confirmation of New Century Financial Corp. and its subsidiaries' Chapter 11 plan to May 7, 2008. The Court held hearings on April 24 and 25. The Debtors and the Official Committee of Unsecured Creditors, co-proponents of the First Amended Joint Chapter 11 Plan of Liquidation, dated March 18, 2008, asked the Court at the confirmation hearings to approve the Plan, noting that majority of the voting classes supported the Plan. The Plan Proponents, however, faced opposition from a number of parties at the hearing. The Debtors were asked by the Court whether there were trigger issues that would jeopardize any financing due to the timing of the Plan's confirmation. "Your Honor, no -- given it's a liquidating case, no fixed triggers that we heard of. Just an overwhelming desire to cut the burn rate on behalf of all parties," said Suzzane Uhland, Esq., at O'Melveny & Myers, LLP, in Newport Beach, California, counsel for the Debtors. Judge Carey said at the April 25 hearing he expects to rule on the Plan between "two and four weeks." "I won't have a confirmation decision out by then, in any event," Judge Carey said, referring to the May 7 hearing. Judge Carey allowed the parties to make post-hearing submissions supporting or objecting to the confirmation of the Plan. Parties Discuss Oppositions to the Plan At the April 24 hearing, Ben Logan, Esq., at O'Melveny & Myers, LLP, in Los Angeles, California, told the Court that the Plan had been strongly supported by the creditors. He said that majority of the classes voted either 99% or 100%, and added that the only rejecting class nonetheless voted overwhelmingly in dollar amount in favor of the Plan. With respect to the Debtors' substantive consolidation, Mr. Logan explained that substantive consolidation "meshes the debtors together," effecting a merger. He said that the Plan is a settlement of inter-company, inter-creditor issues, as opposed to a substantive consolidation compromise. Mr. Logan maintained that the only objecting group with respect to the Plan have rights that they will litigate in the adversary proceeding -- Gregory J. Schroeder, Michelle Parker, Martin Warren, Steve Holland, Nabile Bawa and the Ad Hoc Committee of Beneficiaries of the New Century Financial Corporation Deferred Compensation Plan and/or Supplemental Executive Retirement/ Savings Plan. Mr. Logan pointed out that the Plan will not stop the adversary proceeding. Representing the Beneficiaries, Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, P.A., in Portland, Maine, stated that the Debtors must establish that Plan is better for each and every individual debtor than a Chapter 7 case. He asserted that there is no evidence on that in the record. Mr. Keach insisted that the Plan's provision permitting creditors of companies other than NCFC to share in the assets violates the settled property rights that existed pre-bankruptcy, thus violating Sections 1129(a)(1) and (3) of the Bankruptcy Code. He also pointed out that for a "cram-down plan" to be confirmed, the Court must establish the inherent fairness of the Plan on all levels to the dissenting class. He insists that the Plan is not inherently fair to the dissenting class, and therefore, must fail. The New York State Teachers' Retirement System, a plaintiff in a shareholder securities class action on behalf of the putative class of investors who purchased New Century securities, raised its opposition on the prepetition exculpation provision of the Plan. Michael S. Etkin, Esq., at Lowenstein Sandler PC, in New York, asserted the Debtors are being protected by the extension of the automatic stay, which stretches beyond confirmation through the closing of the case or the termination of the liquidating trust. Mr. Etkin believes that the Plan should not preclude NYSTRS from proceeding with their rights. The Plan's language permanently enjoins NYSTRS from issuing a subpoena to the liquidating trust for documents in connection with the pursuit of the securities litigation. He insists that this preclusion is not justified. The Court said, however, that opening the door to all litigation as part of the confirmation order will interfere with the administration of the estate. It will be better and more appropriate that the plaintiffs file individual requests for the pursuit of their litigation. Ms. Uhland clarified that under the Plan, the prepetition claims in the Securities Litigation are not in any way released. The Plan satisfies Mr. Etkin's contention that NYSTRS should have the benefit of a relief from stay to go after insurance proceeds, which are offered to personal injury claimants, Ms. Uhland added. With respect to the Debtors' dispute with the Internal Revenue Service, Ms. Uhland told Judge Carey the parties have reached agreement in language, which that will go into the Plan's confirmation order. On behalf of the Committee, Mark T. Power, Esq., at Hahn & Hessen LLP, in New York, told Judge Carey that the Plan was an "extremely complicated process" that took many months to resolve. He noted the Plan and the compromises proposed in it received overwhelming support by majority of the creditors, with the exception of the Beneficiaries who are litigating with the estate. Mr. Power emphasized that the the paramount interests of creditors have been satisfied, and asked that the Court confirm the Plan. About New Century Founded in 1995, Irvine, Calif.-based New Century Financial Corporation (NYSE: NEW) -- http://www.ncen.com/-- is a real estate investment trust, providing mortgage products to borrowers nationwide through its operating subsidiaries, New Century Mortgage Corporation and Home123 Corporation. The company offers a broad range of mortgage products designed to meet the needs of all borrowers. The company and its debtor-affiliates filed for Chapter 11 protection on April 2, 2007 (Bankr. D. Del. Lead Case No. 07-10416). Suzzanne Uhland, Esq., Austin K. Barron, Esq., and Ana Acevedo, Esq., at O'Melveny & Myers LLP, and Mark D. Collins, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Official Committee of Unsecured Creditors selected Hahn & Hessen as its bankruptcy counsel and Blank Rome LLP as its co-counsel. When the Debtors filed for bankruptcy, they listed total assets of $36,276,815 and total debts of $102,503,950. The Debtors' exclusive period to file a plan expired on Jan. 28, 2008. (New Century Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). NORTEL NETWORKS: Net Loss Widens to $138MM in 2008 First Quarter ---------------------------------------------------------------- Nortel* Networks Corporation reported its results for first quarter ended March 31, 2008, which demonstrated continued progress against the company's turnaround strategy. The company reported a net loss in the first quarter of 2008 of $138 million compared to net loss of $103 million in the first quarter of 2007 and net loss of $844 million in the fourth quarter of 2007. The net loss $138 million included: -- special charges of $88 million for restructurings; -- a loss of $19 million due to changes in foreign exchange rates; -- a charge of $12 million related to a patent lawsuit settlement; and -- a gain of $16 million from mark-to-market gains on interest rate swaps. The net loss in the first quarter of 2007 of $103 million included a shareholder litigation gain of $54 million reflecting a mark-to- market adjustment of the share portion of the class action settlement and special charges of $80 million for restructuring. The net loss in the fourth quarter of 2007 of $844 million included a reduction of the deferred tax asset of $1,043 million, special charges of $38 million for restructurings, a gain of $23 million on the sale of assets, a gain of $40 million due to favourable effects of changes in foreign exchange rates and a gain due to a market value adjustment of $15 million on an interest rate swap. "Nortel had a strong first quarter, driven by the completion of a contract in our LG-Nortel joint venture and continued improvements in gross and operating margins, Mike Zafirovski, Nortel president and chief executive officer, said. "Nortel's operating margin, a critical measure of our plan's traction, expanded for the seventh consecutive quarter year over year, recording a 512 bps improvement to 4.7%." "We except to achieve our full year guidance and we continue to make solid progress against the strategy to turn around the company," Mr. Zafirovski added. "Our relentless focus on execution and our determination to deliver value to customers is strengthening the foundation upon which to build our performance over the balance of 2008 and beyond." Cash balance at the end of the first quarter of 2008 was $3.2 billion, down from $3.5 billion at the end of the fourth quarter of 2007. The decrease in cash was driven by a cash outflow from operating activities of $260 million, cash used in investing activities of $44 million and cash used in financing activities of $14 million. The cash outflow from operating activities of $260 million included a net loss of $138 million and outflows of $264 million related to: -- the payment of 2007 bonuses and fourth quarter sales compensation; -- $121 million related to pension funding; -- $51 million cash payments related to its restructuring plans. The cash outflow was partially offset by net cash inflows of $99 million of working capital and non-cash additions including $82 million of amortization and depreciation and $78 million of minority interest related to profitability of the LG-Nortel joint venture. At March 31, 2008, the company's balance sheet showed total assets of $16.2 billion, total liabilities of $13.6 billion and total shareholders' deficit of about $2.6 billion. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation (NYSE/TSX: NT) -- http://www.nortel.com/-- delivers next- generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel's technologies are designed to help eliminate today's barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. Nortel Networks Limited is the principal direct operating subsidiary of Nortel Networks Corporation. * * * Nortel Networks Corp. still carries Moody's Investors Service's 'B3' Senior Unsecured Debt rating which was placed on March 22, 2007. PARK PLACE: Fitch Downgrades Ratings on 37 Certificate Classes -------------------------------------------------------------- Fitch Ratings has taken rating actions on the six Park Place Securities, Inc. transactions listed below. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $2.2 billion and downgrades total $1.2 billion. Series 2004-MHQ1 -- $72.9 million class A-1 affirmed at 'AAA'; -- $39.8 million class A-4 affirmed at 'AAA'; -- $110.6 million class M-1 affirmed at 'AA+'; -- $99.4 million class M-2 affirmed at 'AA'; -- $56 million class M-3 affirmed at 'AA-'; -- $49 million class M-4 downgraded to 'BBB+' from 'A+'; -- $42 million class M-5 downgraded to 'BBB' from 'A'; -- $35 million class M-6 downgraded to 'BBB-' from 'A-'; -- $17 million class M-7 downgraded to 'BB' from 'BBB+'; -- $13.3 million class M-8 downgraded to 'BB' from 'BBB'; -- $15.4 million class M-9 downgraded to 'B' from 'BBB-'; -- $13.7 million class M-10 affirmed at 'B'. Deal Summary -- Originators: 100% Ameriquest Mortgage Co., Town & Country Credit Co., Argent Mortgage Co., and Olympus Mortgage Co.; -- 60+ day Delinquency: 25.98%; -- Realized Losses to date (% of Original Balance): 3.30%. Series 2004-WCW1 -- $96 million class M-1 affirmed at 'AA'; -- $40.7 million class M-2 affirmed at 'AA-'; -- $78.3 million class M-3 affirmed at 'A'; -- $17.2 million class M-4 affirmed at 'BBB+'; -- $18.8 million class M-5 downgraded to 'BB' from 'BBB'; -- $17.2 million class M-6 downgraded to 'B+' from 'BB'; -- $17.2 million class M-7 downgraded to 'B' from 'BB'; -- $15.9 million class M-8 downgraded to 'C/DR5' from 'BB-'; -- $7 million class M-9 downgraded to 'C/DR6' from 'B'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 29.60%; -- Realized Losses to date (% of Original Balance): 3.65%. Series 2004-WCW2 -- $137.7 million class M-1 affirmed at 'AA+'; -- $120 million class M-2 affirmed at 'AA'; -- $54 million class M-3 affirmed at 'AA-'; -- $52.5 million class M-4 downgraded to 'A' from 'A+'; -- $51 million class M-5 downgraded to 'BBB+' from 'A-'; -- $37.5 million class M-6 downgraded to 'BBB-' from 'BBB+'; -- $36 million class M-7 downgraded to 'BB' from 'BBB'; -- $15.6 million class M-8 downgraded to 'BB-' from 'BB'; -- $20.5 million class M-9 downgraded to 'B+' from 'BB-'; -- $15.6 million class M-10 affirmed at 'B'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 27.33%; -- Realized Losses to date (% of Original Balance): 3.06%. Series 2004-WHQ1 -- $4.7 million class A-1 affirmed at 'AAA'; -- $4.2 million class A-2 affirmed at 'AAA'; -- $5.1 million class A-5 affirmed at 'AAA'; -- $77 million class M-1 affirmed at 'AA+'; -- $60 million class M-2 affirmed at 'AA'; -- $40 million class M-3 affirmed at 'AA-'; -- $35 million class M-4 downgraded to 'A' from 'A+'; -- $30 million class M-5 downgraded to 'BBB+' from 'A'; -- $30 million class M-6 downgraded to 'BBB-' from 'A-'; -- $25 million class M-7 downgraded to 'BB+' from 'BBB+'; -- $14.7 million class M-8 downgraded to 'BB' from 'BBB'; -- $8.8 million class M-9 downgraded to 'B' from 'BB+'; -- $8.9 million class M-10 downgraded to 'B' from 'BB'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 26.78%; -- Realized Losses to date (% of Original Balance): 2.68%. Series 2004-WHQ2 -- $39.4 million class A-1B affirmed at 'AAA'; -- $51.8 million class A-1C affirmed at 'AAA'; -- $5.8 million class A-1D affirmed at 'AAA'; -- $40.6 million class A-2A affirmed at 'AAA'; -- $10.1 million class A-2B affirmed at 'AAA'; -- $24.7 million class A-3A affirmed at 'AAA'; -- $49.5 million class A-3D affirmed at 'AAA'; -- $8.2 million class A-3E affirmed at 'AAA'; -- $70.9 million class M-1 affirmed at 'AA+'; -- $197.8 million class M-2 affirmed at 'AA'; -- $70.9 million class M-3 affirmed at 'AA-'; -- $94.6 million class M-4 downgraded to 'A-' from 'A+'; -- $62.3 million class M-5 downgraded to 'BBB' from 'A'; -- $28 million class M-6 downgraded to 'BBB-' from 'A-'; -- $47.3 million class M-7 downgraded to 'BB+' from 'BBB+'; -- $53.8 million class M-8 downgraded to 'BB' from 'BBB'; -- $28.1 million class M-9 downgraded to 'BB' from 'BBB'; -- $31.8 million class M-10 downgraded to 'B' from 'BB+'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Co.; -- 60+ day Delinquency: 27.96%; -- Realized Losses to date (% of Original Balance): 3.00%. Series 2004-WWF1 -- $27.3 million class A-1B affirmed at 'AAA'; -- $28.3 million class A-1C affirmed at 'AAA'; -- $6.4 million class A-1D affirmed at 'AAA'; -- $26.3 million class A-2 affirmed at 'AAA'; -- $6.6 million class A-3 affirmed at 'AAA'; -- $Class A-4 affirmed at 'AAA'; -- $Class A-5 affirmed at 'AAA'; -- $43 million class M-1 affirmed at 'AA+'; -- $221.4 million class M-2 affirmed at 'AA'; -- $64.5 million class M-3 affirmed at 'AA'; -- $109.7 million class M-4 affirmed at 'AA-'; -- $73.1 million class M-5 downgraded to 'BBB' from 'A-'; -- $55.9 million class M-6 downgraded to 'BB+' from 'BBB+'; -- $68.8 million class M-7 downgraded to 'BB-' from 'BBB-'; -- $47.2 million class M-8 downgraded to 'B+' from 'BB'; -- $25 million class M-9 downgraded to 'B' from 'BB'; -- $17.1 million class M-10 affirmed at 'B'; -- $16.1 million class M-11 downgraded to 'C/DR6' from 'B'. Deal Summary -- Originators: 100% Argent Mortgage Co. and Olympus Mortgage Cos.; -- 60+ day Delinquency: 32.13%; -- Realized Losses to date (% of Original Balance): 2.91%. PARMALAT SPA: Settles Securities Class Action for $40,000,000 ------------------------------------------------------------- Parmalat SpA has reached an agreement with investors to settle a securities class action against it in the United States District Court for the Southern District of New York. As a result, Parmalat will cause 10.5 million shares of stock to be issued in full satisfaction of any and all claims asserted against it in the class action, worldwide. Parmalat will also incur up to EUR1 million of the cost of notifying the class members of the settlement. The approximate value of the settlement is $40 million. In a news statement, Parmalat said it believes that the settlement is in the best interests of its shareholders to avoid the distraction and expense of further litigation, and diminishes uncertainty in the value of its stock. The settlement is subject to the District Court's approval. Investors, led by Hermes Focus Asset Management Europe, Ltd., commenced a class action lawsuit against Parmalat's former management, banks and auditors, alleging violations of the Securities Exchange Act of 1934. The investors purchased or otherwise acquired securities of Parmalat Finanziaria SpA and its subsidiaries and affiliates between and including January 5, 1999, and December 18, 2003, in reliance on the company's materially false and misleading financial statements and other public statements. The investors sought more than $8,000,000,000 in damages after they lost their money when Parmalat collapsed in December 2003 due to substantial operating losses that had been concealed for over a decade. The settlement with Parmalat follows two $25 million settlements investors reached last summer with Credit Suisse Group and BNP Paribas' Banca Nazionale del Lavoro. Grant & Eisenhofer, which represents Hermes, served as co-lead counsel to Parmalat investors. Managing partner Stuart Grant noted, "We are very pleased with the settlement reached with the company, bringing total investor recovery obtained so far in the Parmalat case to approximately $90 million. We will also continue to press claims against other defendants whom we allege defrauded investors over a period of years prior to Parmalat's ultimate collapse in 2003." Remaining defendants in the ongoing case include Citigroup and Bank of America, as well as accounting firms Deloitte & Touche and Grant Thornton, along with certain individuals and Italian law firms. Dr. Enrico Bondi, Parmalat's current chief executive officer who was installed by the Italian government to run the company immediately after its collapse, also has sued various financial institutions and accounting firms before courts in the U.S. and in Italy seeking damages for the dairy giant's demise. About Parmalat Headquartered in Milan, Italy, Parmalat S.p.A. -- http://www.parmalat.net/-- sells nameplate milk products that can be stored at room temperature for months. It also has about 40 brand product lines, which include yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company's U.S. operations filed for chapter 11 protection on Feb. 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP, represent the Debtors. When the U.S. Debtors filed for bankruptcy protection, they reported more than US$200 million in assets and debts. The U.S. Debtors emerged from bankruptcy on April 13, 2005. Parmalat S.p.A. and its Italian affiliates filed separate petitions for Extraordinary Administration before the Italian Ministry of Productive Activities and the Civil and Criminal District Court of the City of Parma, Italy on Dec. 24, 2003. Dr. Enrico Bondi was appointed Extraordinary Commissioner in each of the cases. On June 22, 2004, Dr. Bondi filed a Sec. 304 Petition, Case No. 04-14268, in the United States Bankruptcy Court for the Southern District of New York. Three Cayman Islands-based special-purpose vehicles created by Parmalat were placed under separate winding up petitions before the Grand Court of the Cayman Islands in January 2004. Gordon I. MacRae and James Cleaver of Kroll (Cayman) Ltd. serve as liquidators in the cases of Dairy Holdings Ltd., Parmalat Capital Finance Ltd., and Food Holdings Ltd. On Jan. 20, 2004, the Liquidators filed Sec. 304 petitions, Case No. 04-10362, in the United States Bankruptcy Court for the Southern District of New York on behalf of Parmalat Finance, et al. Gregory M. Petrick, Esq., at Cadwalader, Wickersham & Taft LLP, and Richard I. Janvey, Esq., at Janvey, Gordon, Herlands Randolph, represent the Finance Companies in the Sec. 304 case. The Honorable Robert D. Drain presides over the Parmalat Debtors' U.S. cases. On June 21, 2007, the U.S. Court granted Parmalat permanent injunction. PHILADELPHIA AUTHORITY: S&P Removes Watch on Renegotiation Success ------------------------------------------------------------------ Standard & Poor's Ratings Services removed from CreditWatch with negative implications its 'BB' rating on Philadelphia Authority for Industrial Development, Pennsylvania's series 2005A and 2005B tax-exempt and taxable fixed-rate revenue bonds, supported by Leadership Learning Partners Charter School. The outlook is stable. The removal from CreditWatch with negative implications reflects the school's successful efforts to renegotiate its management contract with Mosaica Education Inc. and establish a payment plan for past due amounts, which is expected to improve liquidity over time. S&P lowered its rating on the authority to 'BB' from 'BBB-' in December 2008 due to fiscal stress associated with program expansion that had negatively affected the school's liquidity and ability to meet operating costs. At the same time, S&P placed the rating on CreditWatch with negative implications pending additional information about the school's current financial condition. A gross revenue pledge from LLPCS and a first deed of trust on the school's buildings secure the bonds. The significant operating and facility changes since the bonds were issued have strained the school's financial condition and present significant challenges to the current management team. The school relies on a management company (Mosaica) for its financial operations, including budgeting, accounting, and financial reporting. The school was not able to make payments to Mosaica in fiscal 2008 due to strained liquidity because of various school program expansions and delays in state assistance. The school successfully renegotiated its services agreement with Mosaica in January 2008. Past due payments identified in the agreement total $638,109. No payments will be made by the school in fiscal 2008, but the school will pay past due amounts monthly from July 2008 to July 2012 at an interest rate of 8%. The lower fee for future services and the repayment plan provide the school with some budget relief, and the school expects liquidity and financial operations to improve in the future. "The school's liquidity has stabilized following a renegotiation of the school's management contract with Mosaica Education Inc.," said Standard & Poor's credit analyst Robin Prunty. "While liquidity has stabilized, it remains weak, and the school has limited flexibility to manage contingencies. Future credit direction will be determined by the school's ability to generate positive financial operations in the future, as well as by a track record of improved liquidity." The rating action affects roughly $10.845 million in outstanding debt. PLASTECH ENGINEERED: Inks MOU with GM for Exit Financing -------------------------------------------------------- In connection with the $87,000,000 financing provided by its major customers General Motors Corporation, Chrysler, LLC, Johnson Controls, Inc., and Ford Motor Company, Plastech Engineered Products Inc. and its debtor-affiliates agreed to a covenant requiring that at least one Major Customer accept, by May 15, 2008, a proposal by the Debtors regarding a means of exiting Chapter 11. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, in Wilmington, Delaware, informs the U.S. Bankruptcy Court for the Eastern District of Michigan that General Motors has accepted Plastech's Chapter 11 exit plan, pursuant to the terms of a memorandum of agreement, and a related sale of assets in connection with the memorandum. "The MOU was only recently finalized, however, and the Debtors must be authorized to consummate the transactions contemplated thereby as soon as possible in order to maintain compliance with their postpetition financing and the terms of the MOU," Mr. Galardi said. In that light, the Debtors sought the Court's permission to shorten the notice period to 17 days, instead of 20, schedule a hearing on the MOU for May 16, 2008 at 9:30 a.m. Mr. Galardi said if the MOU is not approved by May 16, Plastech will be unable to comply with the terms of their DIP Financing, and, absent funding from the Major Customers, the Debtors will likely be unable to continue to operate their businesses. Plastech did not disclose the specific terms of the GM Memorandum of Understanding as it sought and obtained the Court's permission to file the GM MOU documents under seal. Mr. Galardi explained the Debtors are seeking relief that is "of a confidential, commercial nature, which the Debtors believe would cause severe disruption to their operations if made publicly available." He said the sealed documents contain information pricing, quantity and timing of production and other sensitive business issues. Plastech will only provide unsealed copies of the GM MOU Motion to the Court and the U.S. Trustee. Subject to entry into a confidentiality agreement reasonably acceptable to General Motors, the Debtors' term loan lenders, sources of financing and capital necessary for confirmation and implementation of the Plan, and counsel to the Committee may be provided with an unsealed copies of the documents. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) PLASTECH ENGINEERED: Court Okays $87 Mil. Loan from Key Customers ----------------------------------------------------------------- The Honorable Phillip J. Shefferly of the U.S. Bankruptcy Court for the Eastern District of Michigan has authorized Plastech Engineered Products Inc. and its debtor-subsidiaries to obtain extensions of credit of up to $87,000,000 from their major customers: Participating Customer Commitment ---------------------- ---------- General Motors Corporation $24,151,200 Chrysler, LLC 17,878,500 Johnson Controls, Inc. 20,218,800 Ford Motor Company 24,751,500 Bank of America, N.A., will act as servicing agent under the DIP Facility, and will be paid by the Debtors a servicing fee of $10,000 per calendar month. The actual amounts provided by each Major Customer may adjust in accordance with their intercustomer agreement. The Final DIP Order provides the Debtors will finalize agreements with the Major Customers on a wind-down plan by May 31, 2008. Plastech earlier agreed to use commercially reasonable efforts to reach and memorialize mutually acceptable agreements with the Major Customers by April 23, 2008, for a contingent wind-down plan and "soft-landing" provisions to be implemented upon the occurrence of an event of default. If an event of default on the DIP Loan occurs, the Debtors will cooperate fully with and assist the Major Customers in their respective resourcing activities to the concluded by the later of (a) June 30, 2008, or (b) 30 days after the occurrence of an Event of Default. The Debtors have agreed not to use proceeds of the DIP Loans or cash collateral for any customers who represent more than 50% of their total sales if the customer does not provide credit enhancements on usual and customary terms. The Second Amended and Restated Post-Petition Loan and Security Agreement dated April 29, 2008 provides that the borrowings under the DIP Facility will not exceed $87,000,000. The total principal balance of the loans requested during any calendar week may not exceed 110% of the amount set forth in the Budget for the week. A copy of the Budget is available at: http://researcharchives.com/t/s?2b71 The DIP Facility matures 11:59 p.m., on Aug. 31, 2008. Chrysler, et al., have consummated debt acquisition transactions with the Debtors' existing lenders. The letters of credit with undrawn face amount of $12,000,000 issued by Bank of America will be deemed issued under the DIP Financing. The execution copy of the Second Amended and Restated Post- Petition Loan and Security Agreement is available for free at: http://researcharchives.com/t/s?2b72 The financial advisors in connection with the transactions are: Major Customer Financial Advisor -------------- ----------------- General Motors Williams, Lonnie BBK 400 Gallerina Officentre Suite Southfield, Michigan iwilliams@e-bbk.com Collah, Nancy BBK 400 Gallerina Officentre Suite Southfield, Michigan ncolah@e-bbk.com Chrysler Corporation Hudson, Marcus BBK 400 Gallerina Officentre Suite Southfield, Michigan mhudson@e-bbk.com Corry, Daphne BBK 400 Gallerina Officentre Suite Southfield, Michigan dcorry@e-bbk.com Ford Motor Company Jemeycic, Dan Grant Thornton 175 West Jackson Blvd, 20th Floor Chicago, Illinois dan.jerneycic@gt.com Tague, Rob Grant Thornton 2777 Franklin Road, Suite 800 Southfied, Michigan rob.tague@gt.com Johnson Controls Greenwood, Andre Ernst & Young 222 bay Street, PO box 251 Toronto, Ontario andre.l.greenwood@ca.ey.com Ficks, Jeff Ernst & Young Suite 1000, One Kennedy Square, 777 Woodward Ave., Detroit, Michigan jeffrey.fics@ey.com Jacosky, Len Johnson Controls 49200 Halyard Drive, PO Box +8010 Plymouth, Michigan leonard.e.jacosky@jci.com About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. An Official Committee of Unsecured Creditors has been appointed in the Debtors' cases. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/ or 215/945-7000) PULTE HOMES: Charge-Driven Loss Prompts S&P to Cut Rating to BB --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Pulte Homes Inc. to 'BB' from 'BB+'. The rating actions affect approximately $3.5 billion of senior unsecured notes. The outlook is negative. "The downgrade follows a large charge-driven loss in the company's first fiscal quarter that further eroded the company's equity base and pushed leverage levels to their highest point in about 20 years," said credit analyst James Fielding. "Real estate impairment charges reflect very difficult conditions in the company's most important housing markets, and we believe that lackluster demand for homes will continue to pressure sales volume and profit margins." The negative outlook reflects S&P's expectation for continued deterioration in many of Pulte's key housing markets and acknowledges that weak consumer demand and pricing pressures could further reduce the value of some of the company's land holdings. S&P would lower its ratings further if larger-than-anticipated impairment charges lead to another round of covenant negotiations that further impair borrowing capacity. Alternatively, S&P would revise the outlook to stable when it appears that property values have stabilized and Pulte is positioned to consistently report positive earnings. QSGI INC: Losses and Default Cue RubinBrown's Going Concern Doubt ----------------------------------------------------------------- RubinBrown LLP raised substantial doubt on the ability of QSGI, 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 reported significant losses from operations and is in default of its line-of-credit agreement. The company posted a net loss of $9,275,852 on total revenues of $37,221,110 for the year ended Dec. 31, 2007, as compared with a net loss of $485,237 on total revenues of $46,408,917 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $13,417,470 in total assets, $6,528,827 in total liabilities, $4,238,685 in redeemable preferred stock and $2,649,958 in total stockholders' equity. Wells Fargo Covenant Default On Jan. 17, 2007, the company completed the financing of a new $7,500,000 working capital facility with Wells Fargo Bank, which increased and replaced a similar based line of credit of $4,250,000. The new revolving line-of-credit agreement provides for borrowings limited to the lesser of $7,500,000 or the borrowing base of 85% of eligible accounts receivable plus 45% of inventories, with eligible inventories not to exceed $3,000,000. The new revolving line-of-credit agreement contains certain financial covenants, including minimum net income requirements. Availability on the borrowing base at Dec. 31, 2007 was $287,684. Interest on this loan is payable monthly at the prime rate plus 1.5% (8.75% at Dec. 31, 2007), with all principal and interest due Jan. 24, 2010. The company was in not in compliance with all of its covenants at Dec. 31, 2007. The bank has notified the company that it is out of compliance with its covenants and is in default on the loan. The bank has the right to immediately call the loan due and payable in full. In Feb. 2008, the bank began charging interest at a default rate equal to the prime rate plus 2.5%, and charged a fee of $20,000. A full-text copy of the company's 2007 annual report is available for free at: http://ResearchArchives.com/t/s?2aea About QSGI Inc. QSGI, Inc. (OTC BB: QSGI.OB) -- http://www.qsgi.com-- provides data security and compliance, and data center hardware and maintenance services in the United States and internationally. It operates through three segments: Data Security & Compliance, Data Center Hardware, and Data Center Maintenance. The Data Security & Compliance segment provides data security and regulatory compliance services for end-of-life business-computing information technology solutions. The company was founded in 1967. It was formerly known as WindsorTech, Inc. and changed its name to QSGI, INC. in 2005. QSGI, INC. is based in Palm Beach, Florida. QUEBECOR WORLD: Names Randy Benson as Chief Restructuring Officer ----------------------------------------------------------------- Quebecor World Inc. appointed Randy Benson, Chief Restructuring Officer of the Company. Mr. Benson will report to the Restructuring Committee of the Board of Directors. "We are very pleased to have someone of Randy's experience and capabilities joining Quebecor World at this time," said Jacques Mallette, President and CEO, Quebecor World. "Randy brings valuable experience in working with other companies going through a financial restructuring process. He will work closely with our senior management team and the Creditors' Committees, as we develop our restructuring plan with a view of quickly emerging from creditor protection as a strong company in our industry." Mr. Benson most recently served as Chief Restructuring Officer for Hollinger Inc and prior to that held the same position at Ivaco Inc. Mr. Benson was Senior Vice-President and Chief Financial Officer at Call-Net Enterprises-Sprint Canada Inc. and before that he served as a division president at Parmalat Canada and as Executive Vice-President and Chief Financial Officer of Beatrice Foods Inc. He is the principal of R.C. Benson Consulting Inc., a management consulting company focused on providing strategic analysis, chief executive management, and financial and operational restructuring expertise. About Quebecor World Quebecor World Inc. (TSX: IQW) -- http://www.quebecorworld.com/ -- provides high-value, complete marketing and advertising solutions to leading retailers, catalogers, branded-goods companies and other businesses with marketing and advertising activities, as well as complete, full-service print solutions for publishers. The company is a market leader in most of its major product categories, which include advertising inserts and circulars, catalogs, direct mail products, magazines, books, directories, digital premedia, logistics, mail list technologies and other value-added services. Quebecor World has approximately 28,000 employees working in more than 115 printing and related facilities in the United States, Canada, Argentina, Austria, Belgium, Brazil, Chile, Colombia, Finland, France, India, Mexico, Peru, Spain, Sweden, and Switzerland. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. The Debtors' CCAA stay has been extended to May 12, 2008. The Debtors have until Sept. 30, 2008, to exclusively file a reorganization plan. (Quebecor World Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEST TRUST: Fitch Cuts Ratings on Two Certificate Classes to B --------------------------------------------------------------- Fitch Ratings has taken rating actions on Quest Trust mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. ffirmations total $49.6 million and downgrades total $34.6 million. Additionally, $29.1 million was placed on Rating Watch Negative. Series 2006-X2 -- $40.6 million class A-1 affirmed at 'AAA'; -- $29.1 million class A-2 rated 'AAA', placed on Rating Watch Negative; -- $9.0 million class M-1 affirmed at 'AA+'; -- $8.0 million class M-2 downgraded to 'AA-' from 'AA+'; -- $3.4 million class M-3 downgraded to 'A' from 'AA'; -- $4.4 million class M-4 downgraded to 'A-' from 'AA-'; -- $3.7 million class M-5 downgraded to 'BBB+' from 'A+'; -- $3.4 million class M-6 downgraded to 'BBB-' from 'A'; -- $3.4 million class M-7 downgraded to 'BB+' from 'A-'; -- $3.4 million class M-8 downgraded to 'BB' from 'BBB+'; -- $2.5 million class M-9 downgraded to 'B' from 'BBB'; -- $2.5 million class M-10 downgraded to 'B' from 'BBB-'. RADIAN GROUP: Amends Credit Agreement; Extends Waiver Until May 15 ------------------------------------------------------------------ Radian Group Inc. secured all necessary commitments for a permanent amendment to its revolving credit facility. The amendment, which will be effective upon satisfaction of certain limited closing conditions, would permanently eliminate the ratings covenant included in the current facility and would provide the company with greater flexibility with respect to the minimum net worth that it must maintain. In return, Radian has agreed to certain other conditions and covenants, most importantly, the facility would be secured and the commitment size would be reduced from $400 million to $250 million, with further reductions to take place if certain repayment events occur. Radian's liquidity position continues to be strong, and it is important to the company to have this committed back-up source of liquidity, which would mature in February 2011 under the amendment. The bank group remains unchanged with Key Bank continuing to serve as agent. Radian views its banking relationships as both strong and supportive, as evidenced by the successful approval of the amendment. As reported by the Troubled company Reporter on April 11, 2008, Radian Group Inc. entered into a waiver agreement with its lenders under its credit facility. The agreement provides for a suspension of the ratings covenant included in such credit facility. The waiver was also intended to provide sufficient time to discuss the terms of a definitive amendment to the facility. The company's credit facility amendment reflects the finalization of those discussions and extends the temporary waiver provided in that April 10 agreement until May 15 or such earlier time as it is replaced by the permanent amendment. About Radian Group Headquartered in Philadelphia, Pennsylvania, Radian Group Inc. (NYSE:RDN) -- http://www.radian.biz/-- is a credit risk management company. Radian develops innovative financial solutions by applying its core mortgage credit risk expertise and structured finance capabilities to the credit enhancement needs of the capital markets, through credit insurance products. The company also provides credit enhancement for public finance and other corporate and consumer assets on both a direct and reinsurance basis and holds strategic interests in credit-based consumer asset businesses. The company has operations in New York and London. REGAL ENTERTAINMENT: Closes $210MM Buyout of Consolidates Theatres ------------------------------------------------------------------ Regal Entertainment Group completed the acquisition of Consolidates Theatres. Regal acquired a total of 28 theatres representing 400 screens in exchange for $210 million in cash. The acquisition of the Consolidated circuit will enhance Regal's presence in Georgia, Maryland, North Carolina, South Carolina, Tennessee and Virginia. "We expect the acquisition of Consolidated's circuit will be accretive to cash flows and earnings and are pleased to announce another acquisition of high quality assets that continues to demonstrate our ability to execute Regal's business strategy," Mike Campbell, CEO of Regal Entertainment Group stated. Headquartered in Knoxville, Tennessee, Regal Entertainment Group (NYSE: RGC) -- http://www.REGmovies.com/-- operates a geographically diverse theatre circuit in the United States, consisting of 6,385 screens in 525 locations in 39 states and the District of Columbia. The company's balance sheet showed stockholders' deficit of $185.8 million at March 27, 2008, compared with stockholders' deficit of $119.3 million at Dec. 27, 2007. * * * As reported in the Troubled Company Reporter on March 13, 2008, Moody's Investors Service affirmed Regal Entertainment Group's Ba3 corporate family and Ba3 probability of default ratings, and the other instrument ratings following the company's offering of new $190 million of 6.25% senior convertible notes due 2011. The outlook remains stable. RESIDENTIAL ASSET: Fitch Takes Rating Actions on Various Classes ---------------------------------------------------------------- Fitch Ratings has taken rating actions on Residential Asset Securities Corporation mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $890.7 million and downgrades total $91 million. RASC 2003-KS3 -- $9.7 million class A-I affirmed at 'AAA'; -- $5.7 million class A-II affirmed at 'AAA'; -- $8.6 million class M-1 downgraded to 'BBB+' from 'A+'; -- $0.5 million class M-2 downgraded to 'BB-' from 'BBB-'; Deal Summary -- Originators: Fremont, Mortgage Lenders Network USA I; -- 60+ day Delinquency: 39.75%; -- Realized Losses to date (% of Original Balance): 2.07%. RASC 2003-KS5 Group 1 -- $6.5 million class A-I-4 affirmed at 'AA'; -- $32.7 million class A-I-5 affirmed at 'AA'; -- $20.8 million class A-I-6 affirmed at 'AA'; Deal Summary -- Originators: Fremont, Mortgage Lenders Network USA I, HomeComings; -- 60+ day Delinquency: 10.58%; -- Realized Losses to date (% of Original Balance): 1.89%. Classes A-I-4, A-I-5, A-I-6 are insured by Ambac Assurance Corp. Fitch's policy is to maintain ratings on insured transactions at the higher of the underlying rating of the insured transaction if rated by Fitch, or the Fitch rating of the insurer. RASC 2003-KS5 Group 2 -- $15.8 million class A-II-A affirmed at 'AA'; -- $12.1 million class A-II-B affirmed at 'AA'; Deal Summary -- Originators: Fremont, Mortgage Lenders Network USA I, HomeComings; -- 60+ day Delinquency: 38.79%; -- Realized Losses to date (% of Original Balance): 1.80%. Classes A-II-A and A-II-B are insured by Ambac Assurance Corp. Fitch's policy is to maintain ratings on insured transactions at the higher of the underlying rating of the insured transaction if rated by Fitch, or the Fitch rating of the insurer. RASC 2003-KS6 -- $12.6 million class A-I affirmed at 'AAA'; -- $3.5 million class A-II affirmed at 'AAA'; -- $10.2 million class M-1 downgraded to 'B' from 'BB+'; -- $2.1 million class M-2 downgraded to 'CC/DR4' from 'CCC/DR2'; -- $0.4 million class M-3 downgraded to 'C/DR5' from 'CCC/DR1'; Deal Summary -- Originators: Fremont, New Century; -- 60+ day Delinquency: 44.46%; -- Realized Losses to date (% of Original Balance): 1.67%. RASC 2003-KS7 Group 1 -- $22.7 million class A-I-4 affirmed at 'AAA'; -- $61.5 million class A-I-5 affirmed at 'AAA'; -- $57.7 million class A-I-6 affirmed at 'AAA'; -- $16.9 million class M-I-1 affirmed at 'AA+'; -- $12.2 million class M-I-2 affirmed at 'A+'; -- $8.5 million class M-I-3 affirmed at 'BBB+'; Deal Summary -- Originators: Fremont; -- 60+ day Delinquency: 9.98%; -- Realized Losses to date (% of Original Balance): 1.85%. RASC 2003-KS8 Group 1 -- $19.8 million class A-I-4 affirmed at 'AAA'; -- $35.4 million class A-I-5 affirmed at 'AAA'; -- $31.8 million class A-I-6 affirmed at 'AAA'; -- $11.8 million class M-I-1 affirmed at 'AA+'; -- $7.7 million class M-I-2 affirmed at 'A+'; -- $5.4 million class M-I-3 affirmed at 'BBB+'; Deal Summary -- Originators: Mortgage Lenders Network USA, Homecomings, Fremont; -- 60+ day Delinquency: 8.45%; -- Realized Losses to date (% of Original Balance): 1.92%. RASC 2003-KS9 Group 1 -- $39.7 million class A-I-4 affirmed at 'AA'; -- $49.9 million class A-I-5 affirmed at 'AA'; -- $39.2 million class A-I-6 affirmed at 'AA'; Deal Summary -- Originators: Mortgage Lenders Network USA, Homecomings, Fremont; -- 60+ day Delinquency: 7.32%; -- Realized Losses to date (% of Original Balance): 1.49%. Classes A-I-4, A-I-5, A-I-6 are insured by Ambac Assurance Corp. Fitch's policy is to maintain ratings on insured transactions at the higher of the underlying rating of the insured transaction if rated by Fitch, or the Fitch rating of the insurer. RASC 2003-KS9 Group 2 -- $24.7 million class A-II-A affirmed at 'AA'; -- $25.1 million class A-II-B affirmed at 'AA'; Deal Summary -- Originators: Homecomings, Fremont; -- 60+ day Delinquency: 37.74%; -- Realized Losses to date (% of Original Balance): 1.69%. Classes A-II-A and A-II-B are insured by Ambac Assurance Corp. Fitch's policy is to maintain ratings on insured transactions at the higher of the underlying rating of the insured transaction if rated by Fitch, or the Fitch rating of the insurer. RASC 2003-KS10 Group 1 -- $44.1 million class A-I-4 affirmed at 'AAA'; -- $39.8 million class A-I-5 affirmed at 'AAA'; -- $51.9 million class A-I-6 affirmed at 'AAA'; -- $22.5 million class M-I-1 affirmed at 'AA+'; -- $18.4 million class M-I-2 affirmed at 'AA-'; -- $14.3 million class M-I-3 affirmed at 'A'; Deal Summary -- 60+ day Delinquency: 5.23%; -- Realized Losses to date (% of Original Balance): 1.50%. RASC 2003-KS11 Group 1 -- $20.3 million class A-I-4 affirmed at 'AAA'; -- $24.4 million class A-I-5 affirmed at 'AAA'; -- $32.8 million class A-I-6 affirmed at 'AAA'; -- $14.3 million class M-I-1 affirmed at 'AA+'; -- $10.1 million class M-I-2 affirmed at 'AA-'; -- $8.9 million class M-I-3 affirmed at 'A'; Deal Summary -- 60+ day Delinquency: 8.74%; -- Realized Losses to date (% of Original Balance): 1.70%. RASC 2003-KS11 Total Pools 2&3 -- $55.9 million class M-II-1 downgraded to 'AA' from 'AA+'; -- $8.1 million class M-II-2 downgraded to 'BBB+' from 'A+'; -- $5.3 million class M-II-3 downgraded to 'C/DR3' from 'BB'; Deal Summary -- Originators: Mortgage Lenders Network USA I, New Century, Fremont, Homecomings; -- 60+ day Delinquency: 36.61%; -- Realized Losses to date (% of Original Balance): 2.36%. RESIDENTIAL ASSET: Fitch Chips Ratings on $405.3MM Certificates --------------------------------------------------------------- Fitch Ratings has taken rating actions on Residential Asset Securities Corporation mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Affirmations total $611.2 million and downgrades total $405.3 million. RASC 2004-KS1 Group 1 -- $21.1 million class A-I-4 affirmed at 'AAA'; -- $20.1 million class A-I-5 affirmed at 'AAA'; -- $25.1 million class A-I-6 affirmed at 'AAA'; -- $9.1 million class M-I-1 affirmed at 'AA'; -- $6.3 million class M-I-2 affirmed at 'A'; -- $4.5 million class M-I-3 affirmed at 'BBB'; Deal Summary -- Originators: Mortgage Lenders Network USA, Fremont, Homecomings; -- 60+ day Delinquency: 8.17%; -- Realized Losses to date (% of Original Balance): 1.21%. RASC 2004-KS1 Total Groups 2&3 -- $35.3 million class M-II-1 affirmed at 'AA'; -- $5.1 million class M-II-2 affirmed at 'A+'; -- $2.8 million class M-II-3 downgraded to 'BB+' from 'BBB'; Deal Summary -- 60+ day Delinquency: 33.77%; -- Realized Losses to date (% of Original Balance): 2.01%. RASC 2004-KS2 Group 1 -- $22.0 million class A-I-4 affirmed at 'AAA'; -- $23.0 million class A-I-5 affirmed at 'AAA'; -- $24.2 million class A-I-6 affirmed at 'AAA'; -- $9.6 million class M-I-1 affirmed at 'AA'; -- $6.2 million class M-I-2 affirmed at 'A'; -- $6.2 million class M-I-3 affirmed at 'BBB'; Deal Summary -- 60+ day Delinquency: 10.20%; -- Realized Losses to date (% of Original Balance): 1.65%. RASC 2004-KS2 Total Groups 2&3 -- $36.7 million class M-II-1 affirmed at 'AA'; -- $5.3 million class M-II-2 downgraded to 'BB+' from 'A'; -- $4.6 million class M-II-3 downgraded to 'CC/DR3' from 'CCC'; Deal Summary -- 60+ day Delinquency: 36.85%; -- Realized Losses to date (% of Original Balance): 2.26%. RASC 2004-KS3 Group 1 -- $17.5 million class A-I-4 affirmed at 'AAA'; -- $17.5 million class A-I-5 affirmed at 'AAA'; -- $16.5 million class A-I-6 affirmed at 'AAA'; -- $6.6 million class M-I-1 affirmed at 'AA'; -- $4.9 million class M-I-2 affirmed at 'A'; -- $3.8 million class M-I-3 affirmed at 'BBB'; Deal Summary -- 60+ day Delinquency: 9.67%; -- Realized Losses to date (% of Original Balance): 1.30%. RASC 2004-KS3 Total Groups 2&3 -- $29.1 million class M-II-1 affirmed at 'AA'; -- $5.7 million class M-II-2 downgraded to 'BBB+' from 'A+'; -- $3.7 million class M-II-3 downgraded to 'CCC/DR2' from 'BB'; Deal Summary -- 60+ day Delinquency: 37.25%; -- Realized Losses to date (% of Original Balance): 2.31%. RASC 2004-KS5 Group 1 -- $2.9 million class A-I-3 affirmed at 'AAA'; -- $23.7 million class A-I-4 affirmed at 'AAA'; -- $25.5 million class A-I-5 affirmed at 'AAA'; -- $28.7 million class A-I-6 affirmed at 'AAA'; -- $9.9 million class M-I-1 affirmed at 'AA'; -- $5.5 million class M-I-2 affirmed at 'A'; -- $4.9 million class M-I-3 affirmed at 'BBB'; Deal Summary -- Originators: Various -- 60+ day Delinquency: 6.34%; -- Realized Losses to date (% of Original Balance): 0.98%. RASC 2004-KS5 Total Groups 2&3 -- $51.2 million class M-II-1 downgraded to 'A+' from 'AA'; -- $17.7 million class M-II-2 downgraded to 'BBB-' from 'A'; -- $6.2 million class M-II-3 downgraded to 'B' from 'BBB'; Deal Summary -- Originators: Various; -- 60+ day Delinquency: 39.42%; -- Realized Losses to date (% of Original Balance): 1.82%. RASC 2004-KS6 Group 1 -- $9.9 million class A-I-3 affirmed at 'AAA'; -- $13.8 million class A-I-4 affirmed at 'AAA'; -- $20.6 million class A-I-5 affirmed at 'AAA'; -- $17.2 million class A-I-6 affirmed at 'AAA'; -- $6.1 million class M-I-1 affirmed at 'AA'; -- $4.5 million class M-I-2 affirmed at 'A'; -- $3.3 million class M-I-3 affirmed at 'BBB'; Deal Summary -- Originators: Various; -- 60+ day Delinquency: 7.65%; -- Realized Losses to date (% of Original Balance): 1.34%. RASC 2004-KS6 Total Groups 2&3 -- $40.0 million class M-II-1 downgraded to 'A' from 'AA'; -- $30.9 million class M-II-2 downgraded to 'BB+' from 'A'; -- $6.9 million class M-II-3 downgraded to 'C/DR5' from 'BBB'; Deal Summary -- Originators: Various; -- 60+ day Delinquency: 40.15%; -- Realized Losses to date (% of Original Balance): 2.27%. RASC 2004-KS8 Group 1 -- $8.2 million class A-I-3 affirmed at 'AAA'; -- $10.8 million class A-I-4 affirmed at 'AAA'; -- $16.3 million class A-I-5 affirmed at 'AAA'; -- $17.0 million class A-I-6 affirmed at 'AAA'; -- $9.8 million class M-I-1 affirmed at 'AA'; -- $6.7 million class M-I-2 affirmed at 'A'; -- $5.6 million class M-I-3 affirmed at 'BBB'; Deal Summary -- Originators: Various; -- 60+ day Delinquency: 8.44%; -- Realized Losses to date (% of Original Balance): 1.73%. RASC 2004-KS8 Group 2 -- $24.2 million class M-II-1 downgraded to 'A' from 'AA'; -- $11.1 million class M-II-2 downgraded to 'BBB-' from 'A'; -- $3.4 million class M-II-3 downgraded to 'C/DR5' from 'BB'; Deal Summary -- Originators: Various; -- 60+ day Delinquency: 36.68%; -- Realized Losses to date (% of Original Balance): 2.35%. RASC 2004-KS11 Total Groups 1&2 -- $7.3 million class A-I-3 affirmed at 'AAA'; -- $2.3 million class A-II-1 affirmed at 'AAA'; -- $0.3 million class A-II-2 affirmed at 'AAA'; -- $44.1 million class M-1 downgraded to 'A' from 'AA'; -- $36.8 million class M-2 downgraded to 'BB+' from 'A'; -- $7.0 million class M-3 downgraded to 'BB' from 'A-'; -- $4.7 million class M-4 downgraded to 'BB-' from 'BBB+'; -- $2.3 million class M-5 downgraded to 'BB-' from 'BBB'; -- $2.3 million class M-6 downgraded to 'B+' from 'BBB-'; -- $1.6 million class B downgraded to 'C/DR6' from 'B'; Deal Summary -- 60+ day Delinquency: 33.91%; -- Realized Losses to date (% of Original Balance): 2.04%. RASC 2004-KS12 Total Groups 1&2 -- $47.8 million class M-1 downgraded to 'A' from 'AA'; -- $27.5 million class M-2 downgraded to 'BBB-' from 'A'; -- $8.2 million class M-3 downgraded to 'BB' from 'A-'; -- $3.4 million class M-4 downgraded to 'B' from 'BBB'; -- $2.5 million class M-5 downgraded to 'B' from 'BB+'; -- $1.4 million class M-6 downgraded to 'C/DR6' from 'BB'; -- $2.3 million class B downgraded to 'C/DR6' from 'CCC/DR2'; Deal Summary -- 60+ day Delinquency: 30.60%; -- Realized Losses to date (% of Original Balance): 2.45%. REVLON INC: March 31 Balance Sheet Upside-Down by $1.1 Billion -------------------------------------------------------------- Revlon Inc. disclosed Thursday its earnings for the fiscal quarter ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $882.6 million in total assets and $2.0 billion in total liabilities, resulting in a $1.1 billion total stockholders' deficit. The company reported a net loss of $2.5 million in the first quarter of 2008, compared with a net loss of $35.2 million in the first quarter of 2007. Operating income was $32.5 million in the first quarter of 2008, versus operating income of $3.0 million in the first quarter of 2007. Adjusted EBITDA in the first quarter of 2008 was $58.1 million, compared to an Adjusted EBITDA of $32.3 million in the same period last year. Operating income, net loss and Adjusted EBITDA in the first quarter of 2008 included a net gain of $6.0 million related to the sale of a non-core trademark. Operating income, net loss and Adjusted EBITDA in the first quarter of 2007 were also reduced by $4.3 million of restructuring charges, and included a benefit of $4.4 million from the reduction of lease liability related to the consolidation of office space in New York. The improvement in operating income, net loss and Adjusted EBITDA in the first quarter of 2008 compared to the same period last year, excluding the $6.0 million net gain related to the sale of a non-core trademark, was due mainly to lower selling, general and administrative expenses, primarily due to the fact that the first quarter of 2007 included significant brand support expenses related to the launch of Revlon Colorist hair color. Revlon president and chief executive officer, David Kennedy, said, "Our strong financial results for the first quarter of 2008 build upon our performance in 2007. These results continue to validate our strategy, and we remain focused on increasing the value of our company by building the Revlon brand." First Quarter 2008 Results Net sales in the first quarter of 2008 decreased 2.5% to $320.4 million, compared to net sales of $328.6 million in the first quarter of 2007. Excluding the favorable impact of foreign currency fluctuations, net sales in the first quarter decreased 5.5% versus year-ago. Net sales in the first quarter of 2007 benefited from initial shipments of beauty care products, including the launches of Revlon Colorist hair color and Mitchum Smart Solid anti-perspirant and deodorant. In the United States, net sales in the first quarter of 2008 decreased 8.3% to $177.2 million, compared to net sales of $193.3 million in the first quarter of last year. In the company's international operations, net sales in the first quarter of 2008 increased 5.8% to $143.2 million, compared to net sales of $135.3 million in the first quarter of last year. Excluding the favorable impact of foreign currency fluctuations, net sales in the first quarter of 2008 decreased 1.5% compared to the same period last year, reflecting higher net sales in the Asia Pacific and Latin America regions, which were more than offset by lower net sales in the Europe region. In the first quarter of 2007, net sales in the Europe region were positively impacted by retail space gains related to the Revlon brand and higher closeout sales. $150 Million Two-Year Interest Rate Swap In April 2008, the company entered into a $150.0 million two-year floating-to-fixed interest rate swap transaction related to indebtedness under the company's bank term loan, intended to reduce exposure to interest rate volatility. Following the execution of this swap and the $150.0 million two-year floating- to-fixed interest rate swap that the company entered into in September 2007, approximately 60% of the company's total long-term debt is at fixed interest rates and approximately 40% is at floating interest rates. Outlook In conclusion, Mr. Kennedy said, "We have delivered improved margins and demonstrated our ability to control costs and improve cash usage. We have also demonstrated, with our 2008 new product launches, that we have reinvigorated our new product development process. We believe that strong new product development will result in sustainable sales growth, which given our margin structure, will be profitable. Our plan, therefore, is based on growing our sales and continued control of our costs. We believe these factors, along with other efficiencies, will lead to further margin expansion. All combined, we expect to generate sustainable, profitable sales growth and positive free cash flow." About Revlon Inc. Headquartered in New York City, Revlon Inc. (NYSE: REV) -- http://www.revlon.com/-- is a worldwide cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products company. The company's brands, which are sold worldwide, include Revlon(R), Almay(R), Mitchum(R), Charlie(R), Bozzano(R), Gatineau(R) and Ultima II(R). ROBECO HIGH: Collateral Deterioration Cues Fitch to Chip Ratings ---------------------------------------------------------------- Fitch has downgraded four classes of notes issued by Robeco High Grade CDO I, Ltd. In addition, all seven classes below are removed from Rating Watch Negative. These rating actions are effective immediately: -- $547,357,006 class A-1 notes downgraded to 'CCC' from 'BBB-'; -- $384,598,379 class A-2 notes downgraded to 'CC' from 'CCC'; -- $54,952,736 class A-3 notes remains at 'CC'; -- $64,844,229 class A-4 notes remains at 'CC'; -- $18,983,673 class B notes remains at 'CC'; -- $9,997,566 class C notes downgraded to 'C' from 'CC'; -- $11,551,091 class D notes downgraded to 'C' from 'CC'. Robeco I is a static cash flow collateralized debt obligation managed by Robeco Investment Management which closed June 1, 2007. Presently 43.2% of the portfolio is comprised of 2006 and 2007 vintage U.S. subprime RMBS, 30% consists of 2006 and 2007 vintage U.S. SF CDOs and 24.8% is comprised of 2005, 2006 and 2007 vintage U.S Alt-A RMBS. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime residential mortgage-backed securities, Alternative-A RMBS, and structured finance CDOs with underlying exposure to subprime RMBS. Since the last review on Nov. 21, 2007, approximately 86.6% of the portfolio has been downgraded with 48.1% of the portfolio currently on Rating Watch Negative. Presently 43.2% of the portfolio is comprised of 2005, 2006 and 2007 vintage U.S. subprime RMBS, 30% consists of 2005, 2006 and 2007 vintage U.S. SF CDOs and 24.8% is comprised of 2005, 2006 and 2007 vintage U.S Alt-A RMBS. Actual credit deterioration exceeds the level of downgrades that Fitch assumed in November 2007 when Fitch undertook a global review of the SF CDOs it rates. Fitch notes that, overall, 77.9% of the assets in the portfolio now carry a rating below the rating it assumed in November 2007. The negative credit migration experienced since the last review has resulted in the Weighted Average Rating Factor deteriorating to 287.1 from 3.7, breaching its covenant of 1.65, as of the April 2, 2008 trustee report. The class A/B, class C and class D overcollateralization tests, class A Sequential Pay test and class E interest diversion test are all failing thereby cutting off interest payments to the class C and class D notes.. The ratings of the classes A-1, A-2, A-3, A-4 and B notes address the likelihood that investors will receive full and timely payments of interest, as per the transaction's governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class C, and D notes address the likelihood that investors will receive ultimate and compensating interest payments, as well as the aggregate outstanding amount of principal by the stated maturity date, pursuant to the transaction's governing documents. The ratings are based upon the capital structure of the transaction, the quality of the collateral, and the protections incorporated within the structure. RYLAND GROUP: Stockholders Approve Executive Incentive Plans ------------------------------------------------------------ The stockholders of The Ryland Group Inc. approved the company's Senior Executive Performance Plan and Performance Award Program at its Annual Meeting of Stockholders on April 23, 2008. Annual Bonus Incentive Programs In February 2008, the Compensation Committee of the Board of Directors of Ryland Group approved amendments to the company's Senior Executive Performance Plan to add performance targets related to net cash provided by operating activities. The Compensation Committee approved performance targets for senior executives pursuant to the revised SEPP for the senior executives' 2008 annual bonus incentive programs, contingent upon stockholder approval of the amended SEPP. Pursuant to the SEPP, the annual bonus incentive program for corporate executives for fiscal year 2008 provides that if the Company earns adjusted consolidated earnings before taxes that are greater than $125 million, the corporate executive officers, including the Principal Executive Officer, Principal Operating Officer and Principal Financial Officer, will receive an annual bonus incentive payment that is calculated consistent with the formula used in 2007. The company's consolidated earnings before taxes are adjusted to eliminate the effect of bonus and incentive compensation, corporate overhead, changes in accounting methods and other non- recurring or unusual expenses or charges. If for fiscal year 2008, the company earns adjusted consolidated earnings before taxes that are less than $125 million, the corporate executive officers will have their annual bonus incentive payment determined based upon the company's net cash provided by operating activities as contained within the company's Consolidated Statements of Cash Flows. If the company generates $100 million or greater of net cash provided by operating activities in fiscal year 2008, the corporate executives will receive their maximum annual bonus incentive payment opportunity for 2008. The maximum annual bonus incentive payment opportunity for the Principal Executive Officer, Principal Operating Officer and Principal Financial Officer for 2008 are: Maximum Annual Bonus Name and Title Incentive Payment Opportunity -------------- ----------------------------- R. Chad Dreier $2,500,000 Board Chairman, President & CEO Larry T. Nicholson $950,000 EVP and COO Gordon A. Milne $350,000 EVP and CFO For each $1 million of net cash provided by operating activities below $100 million generated by the company in fiscal year 2008, there is a corresponding reduction of 1% of the maximum annual bonus incentive payment opportunity for purposes of calculating the annual bonus incentive payment earned by the corporate executive. As a result, if the company generated $50 million of net cash provided by operating activities in 2008, the corporate executives would earn 50% of their maximum annual bonus incentive payment opportunity. Mr. Nicholson will receive a minimum bonus of $500,000 for 2008 to compensate him for the annual bonus payment he would have received as President of the Southeast Region as a result of his transition from that position to Chief Operating Officer in 2007. With respect to the presidents of the company's homebuilding regions, such as Keith E. Bass, President of the South Region of Ryland Homes, if a region earns adjusted consolidated earnings before taxes that are $30 million or greater in fiscal year 2008, the region president will receive an annual bonus incentive payment that is calculated consistent with the formula used in 2007. If for fiscal year 2008, a homebuilding region earns adjusted consolidated earnings before taxes that are less than $30 million, the region presidents will have their annual bonus incentive payment determined by the net cash provided by operating activities generated by their region homebuilding operations. For Mr. Bass, if the South Region generates $30 million or greater of net cash provided by operating activities in fiscal year 2008, Mr. Bass will receive a maximum annual bonus incentive payment of $400,000 for 2008. If the South Region achieves less than the target amount of net cash provided by operating activities, the annual bonus incentive payment earned by Mr. Bass is determined by the amount of net cash provided by operating activities generated by the Region as a percentage of the target amount, such that if the South Region generated an amount of net cash provided by operating activities that is 50% of the target amount, 50% of the maximum annual bonus incentive payment opportunity or $200,000 is earned by Mr. Bass for 2008. Equity Incentive Awards In February 2008, the Compensation Committee of the Board of Directors of the company approved amendments to the Performance Award Program to add an additional performance target related to net cash provided by operating activities. The Compensation Committee approved equity incentive awards in the form of restricted stock unit grants to the company's executive officers pursuant to the revised PAP, contingent upon stockholder approval of the amended PAP. Subject to the terms and conditions of the company's equity incentive plan, the Principal Operating Officer, Principal Financial Officer and named executive officers will receive the following grants of restricted stock units on May 1, 2008, subject to annual vesting in three equal installments, one-third of the total grant each year, beginning on May 1, 2009 and based on the executive officers' continued employment on the vesting date: Restricted Name and Position Stock Unit Grant ----------------- ---------------- Larry T. Nicholson 42,000 Principal Operating Officer Gordon A. Milne 42,000 Principal Financial Officer Keith E. Bass 30,000 President, South Region, Ryland Homes Daniel G. Schreiner 28,000 President, Ryland Mortgage Company The vesting of the restricted stock unit grant is conditioned on the Company generating a targeted amount of net cash provided by operating activities for fiscal year 2008. If the company generates $100 million or greater of net cash provided by operating activities in fiscal year 2008, the executive officers will become vested in the maximum restricted stock unit grant over the three-year vesting period. For each $1 million of net cash provided by operating activities below $100 million generated by the Company in fiscal year 2008, there is a corresponding reduction of one percent of the maximum restricted stock unit grant that can vest over the three-year vesting period. Mr. Dreier, the company's Principal Executive Officer, received a grant of 80,000 restricted stock units on May 1, 2008. The vesting of this grant on May 1, 2009, is conditioned on the company generating $100 million or greater of net cash provided by operating activities in fiscal year 2008. For each $1 million of net cash provided by operating activities below $100 million generated by the Company in fiscal year 2008, there is a corresponding reduction by 1% of the maximum restricted stock unit grant that can vest on May 1, 2009. If the company generates net cash provided by operating activities and vesting occurs, the amount of Mr. Dreier's restricted stock unit award that vests includes an amount equal to the federal and state income and Medicare taxes that are payable in connection with the vesting and receipt of the shares of Common Stock associated with the award. 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. RYLAND GROUP: S&P Chips Rating to BB+ on Weak Housing Expectations ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and unsecured debt ratings on The Ryland Group Inc. to 'BB+' from 'BBB-', affecting roughly $800 million in rated debt securities. The outlook remains negative. The downgrade reflects S&P's expectations for continued, very weak housing market conditions, which S&P expect to continue pressuring earnings over the next year, as well as the company's relatively limited liquidity," said credit analyst Lisa Wright. "However, reasonable debt levels and minimal near-term maturities continue to support the lower ratings, as do the company's good geographic diversity, conservative operating strategy, and generally moderate financial policy." S&P anticipate that the deep and protracted housing market downturn will continue at least through 2008 and that these very difficult market conditions could substantially affect Ryland's credit metrics. S&P would consider lowering the ratings further if free cash flow does not improve or if EBITDA-based credit metrics deteriorate more than expected. However, if cash flow improves substantially, backlog conversion is solid, and Ryland's housing markets show signs of firming, S&P would consider revising the outlook back to stable. SCOTTISH RE: S&P Retains 'B' Credit Rating Under Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services said that its counterparty credit rating on Scottish Re Group Ltd. (B/Watch Neg/--; Scottish Re) and its counterparty credit and financial strength ratings on Scottish Re's operating companies and the ratings on these companies' dependent unwrapped securitized deals remain on CreditWatch with negative implications. "Standard & Poor's placed these ratings on CreditWatch on Jan. 31, 2008, because of the erosion of Scottish Re's capitalization due to the declining market value of its subprime and Alt-A investments, our increased estimate of expected losses on these assets, and the meaningful risk of losing some reserve credits secured through Ballantyne Re plc," said Standard & Poor's credit analyst Robert Hafner. "Our increasing estimates of cumulative subprime and Alt-A expected losses based on the composition of such investments, by vintage and other characteristics negatively affects our view of Scottish Re's capitalization," said Mr. Hafner. "Scottish Re's announcement of a letter of intent signed with ING, the only cedent for the Ballantyne trust, moderates our concern about its ability to avert loss of significant reserve credits pending execution of the arrangement." "We continue to monitor developments and awaits the release of Scottish Re's delayed financial data, which are needed to better refine our view of expected cumulative losses and the impact on the firm's capitalization," Mr. hafner added. "The ratings will be lowered if a substantial risk of losing reserve credits lingers or if our investment loss estimate were to increase materially. The ratings will be affirmed if our refined investment loss estimate is in line with our current expectations and the risk of losing reserve credits is ameliorated." SEMOTUS SOLUTIONS: Amex Delists Common Stock Effective May 12 ------------------------------------------------------------- The American Stock Exchange LLC(R) reported its final determination to remove the common stock of Semotus Solutions Inc. from listing on Amex, and filed an application on form 25 to strike the Securities from listing with the Securities and Exchange Commission. The delisting will become effective on May 12, 2008 unless postponed by the SEC. Pursuant to its rules, the Exchange provided notice to Semotus Solutions Inc. of the decision to delist the Securities and an opportunity to appeal the decision to a panel designated by the Exchange's board of governors. The Exchange will provide public notice of its determination and notice will remain posted until the delisting is effective. Headquartered in Los Gatos, California, Semotus Solutions Inc. (OTC:SMOA) -- http://www.semotus.com-- provides software for wireless enterprise applications. The company's software connects employees wirelessly to critical business systems, information and processes. Semotus's wireless software products and services include the HipLinkXS family of software, the Global Market Pro family of software and services, the PocketAdmin and PocketDBA software from Expand Beyond Corporation, and Clickmarks Inc.'s technology and software solutions. The company entered into a definitive agreement and plan of reorganization on Nov. 10, 2006 with Citytalk Inc., relating to the merger of Citytalk with and into Semotus. SIRVA INC: Court Extends Receivables Sale Agreement Expiry Date --------------------------------------------------------------- At the behest of Sirva Inc. and its debtor-affiliates, the U.S. Bankruptcy Court for the Southern District of New York extended the termination date of the Debtors' Receivables Sale Agreement, from April 30, 2008, to May 14, 2008. SIRVA Relocation Credit, LLC have maintained a receivables purchase program with LaSalle Bank National Association, as agent for certain purchasers participating in the program. Specifically, the Purchasers are LaSalle Bank; General Electric Capital Corporation; Wells Fargo Bank; and Citizens Bank. As of December 22, 2006, the Debtors that sell Receivables, their related collections, and the proceeds of the Program are SIRVA Relocation LLC, Executive Relocation Corporation, and SIRVA Global Relocation, Inc -- the Originators. The Originators sell the Receivables on a daily basis to SRC pursuant to a Purchase Agreement. Under the Purchase Agreement and a Receivables Sale Agreement, the Servicers agree to service the Receivables, for which they are paid a fee. Prior to the Petition Date, the Guarantors, the Originators, SRC, LaSalle Bank, and the Purchasers engaged in extensive arm's- length negotiations to continue the Program, subject to certain amendments. The Amendments were negotiated to provide the Purchasers assurance that the Program would continue to be treated in accordance with the parties' intent -- as a true sale transaction -- and to provide protection from the uncertainty of a chapter 11 case. The Amendments include a condition that the Debtors' the Plan of Reorganization must become effective by April 30, 2008, or a Termination Date will occur under the Receivables Sale Agreement, and the Program will terminate unless the Purchasers will waive the Termination Date. Court Extends Termination Date to May 14 Marc Kieselstein, P.C., at Kirkland & Ellis LLP, in Chicago Illinois, related that before April 11, 2008, the Debtors received numerous objections to their Prepackaged Joint Plan of Reorganization. According to Mr. Kieselstein, the Debtors have decided to modify the Court-approved first amendment of the Receivables Sale Order Agreement, as well as the related fee letter, in order to give all parties sufficient time to conduct the information hearing, and for the Court to abjudicate the confirmability of the Plan. The Second Amendment extends the Termination Date to May 14, 2008, in exchange for a $70,000 fee. Mr. Kieselstein said that the Receivables Purchase Program provides the Debtors with a critical and substantial source of ongoing operating liquidity of up to $131,000,000, and its continuation after the April 30 termination date is integral to the Debtors' operations. "Consequently, without the authority to continue participating in the Program after the current termination date . . . the Debtors and their estates would suffer immediate and irreparable harm," Mr. Kieselstein added. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. An official Committee of Unsecured Creditors has been appointed in this case. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. (Sirva Inc. Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SPRINT NEXTEL: May Consider Deutsche Telekom's Takeover Proposal ---------------------------------------------------------------- Deutsche Telekom AG is planning to acquire Sprint Nextel Corp. to merge with its wireless subsidiary, The Wall Street Journal reports. WSJ states that the plan to acquire Sprint Nextel was reached as Deutsche Telekom looks for possible partner in countries outside the German market. WSJ notes that last year, Deutsche Telekom realized more than 50% revenue growth in its operations outside Germany. WSJ relates that in recent years, Deutsche Telekom's operations in Germany has seen a slump in revenue due to rising competition and falling prices. According to Bloomberg, quoting Der Spiegel, a German magazine, a merger with Telekom's T-Mobile USA division would help the German phone company catch up with the U.S. market leader. WSJ, citing people familiar with the matter, says Deutsche Telekom's plans are at an early stage and management may very well turn away. The proposal has $22 billion capitalization and if the bid for Sprint Nextel will commence, it could take weeks, or even months to complete, WSJ adds. Bloomberg says Sprint Nextel is valued at less than $1,000 per customer based on a study of takeover scenarios by Merrill Lynch & Co. published in March. Sprint Nextel's share price drop and the strong euro make a transaction with Deutsche Telekom a bargain, Bloomberg notes. About Deutsche Telekom AG Headquartered in Germany, Deutsche Telekom AG (FRA:DTE) -- http://www.deutschetelekom.de/-- is an integrated telecommunications provider offering its customers services in the areas of telecommunications and information technology. The company operates in four business segments: Mobile Communications Europe and Mobile Communications United States of America through T-Mobile; Broadband/Fixed Network; Business Customers, and Group Headquarters and Shared Services. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. * * * As reported in the Troubled Company Reporter on May 2, 2008, Standard & Poor's Rating Services lowered its corporate credit and senior unsecured ratings on Sprint Nextel Corp. to 'BB' from 'BBB-' and removed the ratings from CreditWatch with negative implications. The outlook is stable. ST. JOHN: S&P Holds 'B+' Rating and Revises Outlook to Stable ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Irvine, California-based apparel manufacturer St. John Knits International Inc. to stable from negative. At the same time, Standard & Poor's affirmed its ratings on the company, including the 'B+' corporate credit rating and the 'BB' bank loan and '1' recovery rating. Total debt outstanding at Jan. 27, 2008, was about $147 million. "The outlook revision reflects St. John's improving operating performance and credit protection measures," said Standard & Poor's credit analyst Susan Ding. St. John management has taken steps to correct fit, delivery, and target customer issues which occurred during 2006 when it took aggressive steps to update the product line and fit in order to reach a new, younger target customer. These issues resulted in lost sales and higher markdowns and allowances, which, in turn, led to margin pressures and deteriorating operating performance. "Operating performance has since improved as a result of management's corrective steps," said Ms. Ding, "and credit measures are trending towards historical levels." The ratings on St. John reflect the company's leveraged financial profile, narrow focus on high-end women's knitwear apparel, and channel and customer concentration. St. John's core women's knitwear products continue to account for most of its revenue base. STONE ENERGY: Inks Merger Deal With Boise d'Arc for $1.8 Billion ---------------------------------------------------------------- Stone Energy Corporation and Bois d'Arc Energy Inc. have entered into a definitive merger agreement pursuant to which Stone will acquire Bois d'Arc. Bois d'Arc stockholders will receive $13.65 in cash and 0.165 shares of Stone common stock for each share of Bois d'Arc common stock. The transaction has an aggregate value of approximately $1.8 billion. "Bois d'Arc is an outstanding fit with Stone given the complementary asset bases, strategies and skill sets of the two companies," David Welch, chief executive officer of Stone, said. "Stone is a strong exploitation and development company and combined with Bois d'Arc's outstanding inventory of shelf exploration prospects, the combined company will be a leading Gulf of Mexico producer." "The transaction will be accretive to Stone on a 2008 cash flow basis and the combined entity is expected to generate significant free cash flow which will continue to strengthen its balance sheet," Mr. Welch added. Following the merger, Stone expects to produce over 300 Mmcfe per day and have over 700 Bcfe of estimated proved reserves and approximately 275 Bcfe of estimated probable reserves, with a multi-year exploration prospect inventory, extensive 3D seismic coverage over the Gulf of Mexico, and a material leasehold position of over 800,000 net undeveloped acres. "Stone has the cash flow as well as the depth of personnel and the infrastructure in place to effectively capture the full value of Bois d'Arc's extensive prospect inventory," Gary Blackie, chief executive officer of Bois d'Arc, stated. "The case for combining the two companies is extremely compelling to the Bois d'Arc stockholders." Stone expects to fund the transaction utilizing existing cash on its balance sheet, borrowings from a proposed new $700 million credit facility underwritten by Bank of America N.A., and the issuance of approximately 11.3 million shares of Stone common stock. The transaction is expected to close in the third quarter of 2008. After the closing, Stone will remain headquartered in Lafayette, Louisiana, and David Welch will continue as chief executive officer of the combined company. The boards of directors of both companies have approved the merger agreement, and each will recommend the transaction to its respective stockholders for approval. Completion of the transaction is subject to stockholder approval of Stone and Bois d'Arc, regulatory approvals, and other customary conditions. Post closing, it is anticipated that the Stone stockholders will own approximately 72% of the combined company, and the Bois d'Arc stockholders will own approximately 28% of the combined company. Concurrent with the execution of the merger agreement, Comstock Resources Inc., which holds approximately 49% of the outstanding shares of Bois d'Arc, entered into a stockholder agreement in which it agreed to vote in favor of the merger and agreed to a one-year lock-up. In addition, Gary Blackie, director and chief executive officer of Bois d'Arc, and Wayne Laufer, director and former chief executive officer of Bois d'Arc, who own approximately 8% and 10% of the outstanding shares of Bois d'Arc common stock, also entered into stockholder agreements in which they agreed to vote in favor of the merger. "We are very excited about this combination and are enthusiastic about our 13% post-merger ownership in Stone Energy," Jay Allison, chief executive officer of Comstock, said. "Stone has made significant strides in positioning itself as a leader in the Gulf of Mexico and the Bois d'Arc team has done an outstanding job of creating value since Bois d'Arc's inception." Gary Blackie and certain key Bois d'Arc employees have entered into a participation agreement with Stone, under which, after the completion of the merger, Mr. Blackie and his team will generate exploration prospects in the Gulf of Mexico drawing on their extensive geological expertise in the region. Stone will provide overhead support and will advance certain funds needed to conduct exploration activities. Stone will be entitled to a non-promoted 50% working interest in each prospect generated. Tudor, Pickering, Holt & Co. acted as financial advisor to Stone and provided a fairness opinion to the board of Stone. Scotia Waterous (USA) Inc. and Raymond James & Associates Inc. acted as financial advisors to Bois d'Arc, and Raymond James & Associates Inc. provided a fairness opinion to the board of Bois d'Arc. About Bois d'Arc Energy Based in Houston, Texas, Bois d'Arc Energy Inc. (NYSE:BDE) -- http://www.boisdarcenergy.com/-- is an independent exploration company engaged in the discovery and production of oil and natural gas in the Gulf of Mexico. The company's oil and natural gas properties are estimated to have proved reserves of 398 billion cubic feet of natural gas equivalent. Bois d'Arc's proved oil and natural gas reserve base is 63% natural gas and 37% proved developed on a Bcfe basis as of Dec. 31, 2007, and it serves as operator for approximately 98% of its properties. During the year ended Dec. 31, 2007, its daily production averaged 88 million cubic feet of natural gas and 4,578 barrels of oil or 116 million cubic feet of natural gas equivalent. The company's properties are located in the outer continental shelf of the Gulf of Mexico in water depths of up to 75 feet. Its Gulf of Mexico operations include properties located offshore of Louisiana and Texas, in state and federal waters of the Gulf of Mexico. About Stone Energy Corporation Headquartered in Lafayette, Louisiana, Stone Energy Corporation (NYSE:SGY) -- http://www.stoneenergy.com/-- is an independent oil and natural gas company. The company is engaged in the acquisition and subsequent exploration, development, operation and production of oil and gas properties located in the conventional shelf of the Gulf of Mexico, the deep shelf of the Gulf of Mexico, the deepwater of the Gulf of Mexico, the Rocky Mountain Basins and the Williston Basin. Stone Energy is also engaged in an exploratory joint venture in Bohai Bay, China. STONE ENERGY: Moody's Keeps 'B3' Ratings on Bois d'Arc Acquisition ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings for Stone Energy Corp. following the company's announcement that it is acquiring Bois d'Arc Energy, Inc. The ratings being affirmed are the B3 corporate family rating, the B3 probability of default rating, and the Caa1 (LGD 4; 62%) senior subordinated note rating. Simultaneously, Moody's is changing the speculative grade liquidity rating to SGL-3 from SGL-2. Moody's notes that while the Caa1 note rating remains one notch below the CFR, an additional notch down could occur if the long-term financing plan consists of a significant amount of senior secured debt. The outlook is stable. On April 30, 2008, Stone announced that it is acquiring Bois d'Arc Energy, a Gulf of Mexico focused producer that is 49% owned by Comstock Resources (B1 CFR), for total consideration of $1.8 billion. Under terms of the agreement, Bois d'Aarc's shareholders will get $13.65/share in cash and 0.165 shares of Stone stock, making the total consideration about 55% cash and 45% equity. At closing, Stone shareholders will own 72% of the combined company and Bois d'Arc shareholders will own 28%. Based on year-end 2007 reserves, the purchase price reflects a very high $4.54/mcfe ($27.27/boe) of proved reserves and about $93,103/ boe ($15,517/mcfe) of flowing Q4 '07 production. However, Moody's notes that this valuation does compare favorably to some recent GOM transactions. The stable outlook considers the increased scale of the combined company as well as the outlook for commodity prices, both of which provide the company with additional opportunities to achieve reserve and production growth and to execute on its debt reduction strategy. However, the stable outlook also reflects that the combined company will have increased leverage on the PD reserves at close, the high cost structure of the two companies and the concentration in the GOM, where Stone had been previously challenged to grow its reserves and production. Pro forma leverage on the PD reserve base will be higher (over $9.00/boe compared to $7.49/boe at FYE Dec. 31, 2007) expected and elevates the already high reinvestment risk associated with the GOM. A positive outlook and upgrade would be considered if management is executing on its debt reduction plans and there are clear indications that the capital productivity is improving. Evidence of this would be sustained sequential quarterly production growth, replacing all of its production at more sustainable costs, and leverage on the PD reserve base is trending towards $8.00/boe. The company's 2008 year-end FAS 69 disclosure will be a critical element in determining its progress. The B3 ratings continue to reflect the Stone's inconsistent track record of replacing its reserves (though there has been some improvement) and the company's very high cost structure which has resulted in a leveraged full cycle ratio below 100% despite very supportive commodity prices. The B3 is supported by the significantly increased scale of the combined company. Pro forma for the acquisition, Stone's reserves will essentially double in size and production will increase by approximately 80% and will make it one of the larger Gulf of Mexico producers within the single-B rated exploration and production company peer group. While leverage is increasing with the acquisition, the B3 CFR can accommodate this added leverage, assuming that commodity prices and production volumes remain supportive for debt reduction over the next twelve months. The downgrade of the speculative grade liquidity rating to SGL-3 from SGL-2 primarily reflects the company's use of about $500 million of its own cash on hand for the acquisition, leaving cash balances at modest levels. Although the acquisition is not expected to close until Q3'08, the cash will in the meantime be earmarked for the purchase and will not be made available for other use. Currently, Stone has no borrowing under its $300 million secured revolving credit facility ($175 million borrowing base), however, upon closing, a new $700 million facility is expected to be significantly drawn to partially fund the purchase of Bois d'Arc. The company is expected to be well within its maintenance covenants under the credit facility, though it the facility will be secured by essentially all of its reserves, leaving no alternative sources of liquidity. Stone Energy Corporation is headquartered in Lafayette, Louisiana, and is an independent oil and gas company engaged in the acquisition and subsequent exploration, development, operation and production of oil and gas properties primarily located in the conventional shelf of the GOM, the deep shelf of the GOM, and the deepwater of the GOM. STONE ENERGY: Bois d'Arc Deal Cues S&P to Hold 'B+' Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Stone Energy Corp. and its 'BB-' corporate credit rating on Comstock Resources Inc. The outlook on both is stable. At the same time, S&P placed the issue ratings on Stone's subordinated notes and Comstock's senior notes on CreditWatch with negative implications. S&P rate Stone's subordinated notes 'B+', with a recovery rating of '3', which indicates its expectation of meaningful (50% to 70%) recovery in the event of default. S&P rate Comstock's senior notes 'B+', with a recovery rating of '5', which indicates its expectation of modest (10% to 30%) recovery in the event of default. "These rating actions follow the announcement that Stone has entered into a definitive agreement to acquire Bois d'Arc Energy Inc., in which Comstock holds a 49% ownership interest," said Standard & Poor's credit analyst Jeffrey Morrison. (Standard & Poor's does not rate Bois d'Arc Energy Inc.) Stone and Comstock are independent exploration and production firms focused in Gulf of Mexico. The CreditWatch listings on Stone and Comstock's subordinated notes and senior notes issue ratings, respectively, reflect the potential that S&P could lower the issue ratings and change the recovery ratings in the near term. S&P's concerns derive from changes to the capital structure and assets caused by the transaction--specifically, increased secured debt capacity at Stone, and a reduced enterprise valuation at Comstock after the sale of its interests in Bois d'Arc. S&P expect to resolve the CreditWatch in the near term. STURGIS IRON: Court OKs Bidding Procedures for Sale of All Assets ----------------------------------------------------------------- The Hon. Jeffrey R. Hughes of the U.S. Bankruptcy Court for the Western District of Michigan approved bidding procedure for the sale of substantially all assets of Sturgis Iron & Metal Co. Inc., free and clear of interests, subject to higher and better offer. All qualified bids must be delivered by May 12, 2008, at 12:00 p.m. An auction will take place on May 14, 2008 at 9:00 a.m. at Jaffe, Raitt, Heuer & Weiss, P.C.'s Offices located at 27777 Franklin Road, Suite 2500 in Southfield, Michigan. During the public auction, starting bid will be at least $50,000,000 and subsequent bid of at least $500,000. Interested purchasers are required to make a 3% deposit of the qualified bid. A hearing is set for May 16, 2008, at 9:00 a.m., to consider approval of the asset sale to the successful bidder. The closing is expected to occur by June 16, 2008. As reported in the Troubled Company Reporter on April 22, 2008, according to the motion, the Debtor's real estate in Elkhart, Michigan is up for sale in bulk for at least $50,000,000 as set forth in the proposed form of asset purchase agreement as amended on April 17, 2008. The purchase agreement also includes the sale of unimproved property adjacent to the Debtor's real estate in Kalamzoo, Michigan. There is a $2,100,000 allocation of purchase price sufficient to pay in full all existing liens on the real estate. Judith Greenstone Miller, Esq., at Jaffe, Raitt, Heuer & Weiss, P.C., said that the Debtor has not received any "stalking horse" bid to date. The sale of the Debtor's assets is in the best interest of this estate, Ms. Greenstone said. A full-text copy of the Asset Purchase Agreement is available for free at http://ResearchArchives.com/t/s?2ade About Sturgis Iron Based in Sturgis, Michigan, Sturgis Iron & Metal Co., Inc. sells ferrous metal scrap & waste in wholesale. It also manufactures secondary nonferrous metals, and provides pre-finishing iron or steel processes services, finishing metal processing services, and smelting metal services. The company filed for chapter 11 protection on Apr. 4, 2008 (Bankr. W.D. Mich. Case No. 08-02966). Jay L. Welford, Esq., Judith Greenstone Miller, Esq., Paige Barr, Esq., Paul R. Hage, Esq. and Richard E. Kruger, Esq., at Jaffe Raitt Heuer & Weiss, P.C. represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as claims agent. The U.S. Trustee for Region 9 appointed an Official Committee of Unsecured Creditors in this case. At the time of filing, the Debtor listed estimated assets and debts both between $100 million and $500 million. SUN MICROSYSTEMS: Eliminates 2,500 Jobs to Save $220MM in Costs --------------------------------------------------------------- Sun Microsystems Inc. will reduce its workforce by around 1,500 to 2,500 people in the current quarter, Christopher Lawton of The Wall Street Journal reports. The company relates that it needs to slash costs as the U.S. economy is pretty weak and they are facing delays in orders from customers. Sun adds that they would be taking a charge of $130.0 million to $220.0 million in its fiscal fourth quarter to account for the cuts. Sun shares rose 67 cents, or 4.3%, to $16.33 at 4 p.m. in Nasdaq Stock Market composite trading, before the formal statement, WSJ notes. WSJ adds that shares fell 11.2% to $14.50 in after-hours trading. Third Quarter Financial Results Sun Microsystems reported net loss for the third quarter ended March 30, 2008, on a Generally Accepted Accounting procedures or GAAP basis of $34.0 million as compared with net income of $67.0 million for the third quarter of fiscal 2007. In the third quarter of fiscal 2008, the company recorded a $52 million dollar tax provision, as compared to a tax benefit of $3 million in the third quarter of fiscal 2007. Net loss for the third quarter included charges related to the acquisition of MySQL. Cash generated from operations for the third quarter of fiscal 2008 was $329.0 million, and the cash and marketable debt securities balance at the end of the quarter was $3.8 billion. During the third quarter, Sun continued to leverage its cash position, spending $300.0 million to repurchase 17.5 million shares of its common stock. There is $500.0 million remaining of the $3.0 billion share repurchase program disclosed in the company's fiscal fourth quarter of 2007. At March 30, 2008, the company's balance sheet showed total assets of $14.2 billion, total liabilities of about $8.5 billion and total shareholders' equity of $5.7 billion About Sun Microsystems Headquartered in Santa Clara, California, Sun Microsystems Inc. (NASDAQ: JAVA) -- http://sun.com/-- provides network computing infrastructure product and service solutions worldwide. Sun Microsystems conducts business in 100 countries around the globe, including Brazil, Argentina, India, Hungary, United Kingdom, among others. * * * Moody's Investors Service placed Sun Microsystems Inc.'s corporate family and unsecured debt rating at 'Ba1' in September 2005. The ratings still hold to date with a stable outlook. TERWIN MORTGAGE: Moody's Downgrades Ratings on Seven Certificates ----------------------------------------------------------------- Moody's Investors Service downgraded seven certificates a maintained on review for possible downgrade four of those certificates from two transactions issued by Terwin Mortgage Trust. The transactions are backed by second lien loans. The certificates were downgraded because the bonds' credit enhancement levels, including excess spread and subordination were low compared to the current projected loss numbers at the previous rating levels. The actions take into account the continued and worsening performance of transactions backed by closed-end-second collateral. Substantial pool losses of over the last few months have eroded credit enhancement available to the mezzanine and senior certificates. Despite the large amount of write-offs due to losses, delinquency pipelines have remained high as borrowers continue to default. Complete rating actions are: Issuer: Terwin Mortgage Trust 2005-11 -- Cl. I-M-1b, Downgraded to A1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. I-M-2, Downgraded to Baa3 from Aa3; Placed Under Review for further Possible Downgrade -- Cl. II-M-1, Downgraded to Baa1 from Aa2; Placed Under Review for further Possible Downgrade -- Cl. II-M-2, Downgraded to Baa3 from Aa3; Placed Under Review for further Possible Downgrade Issuer: Terwin Mortgage Trust 2005-13SL -- Cl. G, Downgraded to Baa1 from Aaa -- Cl. M-1, Downgraded to C from Caa2 -- Cl. B-1, Downgraded to C from Ca TERWIN MORTGAGE: S&P Downgrades Ratings on Three Classes of Certs. ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on three classes of asset-backed certificates from Terwin Mortgage Trust Series TMTS 2004-5HE. Additionally, S&P affirmed its ratings on the five remaining classes from this series as well as on four classes from series TMTS 2003-2HE. Both transactions reviewed are backed by U.S. subprime mortgage loan collateral. The lowered ratings reflect the poor collateral performance of series TMTS 2004-5HE as of the April 2008 remittance period. While the transaction is 46 months seasoned and has paid down to 14.06%, cumulative realized losses total $6.05 million, or 1.86% of the original principal balance, as of the April 2008 remittance period. The deal is currently passing its delinquency and cumulative loss triggers; however, the average monthly losses have increased over the past year. The three-, six-, and 12-month average losses were approximately $337,663, $307,452, and $261,912, respectively, and have eroded overcollateralization (O/C) to $581,852, below its target of $1.63 million. Serious delinquencies (90-plus days, foreclosures, and REOs) are $6.92 million, or 15.12% of the current principal balance, as of the April 2008 remittance period. The affirmations of the ratings on the remaining classes from series TMTS 2004-5HE and TMTS 2003-2HE reflect sufficient credit support at the current rating categories as of the April 2008 reporting period. A combination of subordination, excess spread, and O/C provides credit support to both subprime transactions. Ratings Lowered Terwin Mortgage Trust Series TMTS 2004-5HE Asset-backed certificates Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 881561HV9 BBB- BBB+ B-2 881561HW7 B BBB B-3 881561HX5 CCC BBB- Ratings Affirmed Terwin Mortgage Trust Asset-backed certificates Transaction Class CUSIP Rating ----------- ----- ----- ------ TMTS 2003-2HE A 881561AR5 AAA TMTS 2003-2HE M-1 881561AS3 AAA TMTS 2003-2HE M-2 881561AT1 AA TMTS 2003-2HE B 881561AU8 A- TMTS 2004-5HE M-1 881561FP4 AA TMTS 2004-5HE M-1-X 881561HP2 AA TMTS 2004-5HE M-2 881561FQ2 A TMTS 2004-5HE M-2-X 881561HR8 A TMTS 2004-5HE M-3 881561FR0 A- TOUSA INC: Seeks to Modify Sale Order to Facilitate Funding ----------------------------------------------------------- TOUSA Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to modify a March 6, 2008 court order approving the Debtors' entry into a sale agreement with PRN Real Estate & Investments, Ltd. in order to facilitate financing for the transaction. Among other things, the Sale Agreement contemplated the sale by TOUSA Homes, Inc., to PRN of a promissory note executed by Cape Light Development International Drive I, LLC, in favor of TOUSA Homes, dated June 22, 2007, for $13,500,000. The closing under the Sale Agreement occurred on March 13, 2008, and the Note was actually transferred to PRN, Paul Steven Singerman, Esq, at Berger Singerman, P.A., in Miami, Florida, relates. On or before the Closing, PRN sought financing from American Momentum Bank in connection with the purchase of the Note. AMB subsequently requested that the Debtors seek to modify the Sale Order and include additional provisions that were necessary for the proposed financing. Specifically, AMB noted that the Sale Order did not include a finding under Section 363(f) of the Bankruptcy Code that the sale of the Note was free of all liens, claims and encumbrances. Moreover, the Sale Order did not include a finding that PRN was a good faith purchaser and that the Sale was negotiated in good faith and at arm's length within the meaning of Section 363(m), Mr. Singerman tells the Court. The Debtors need the Court to modify the Sale Order so they may facilitate the financing related to PRN's purchase of the Note. 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). TOUSA INC: Creditors Panel Wants to Retain JH Cohn as Accountant ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of TOUSA Inc. and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to retain J.H. Cohn LLP, as its forensic accountants and financial consultants, nunc pro tunc to the Debtors' bankruptcy filing. JHC is an accounting and financial consulting firm having expertise in forensic, real estate and insolvency accounting, Tara Lynn Torrens, vice president of Capital Research and Management Company and co-chair of the Creditors Committee, informs the Court. For more than 20 years, the partners of JHC have been involved in hundreds of bankruptcy matters. According to Ms. Torrens, JHC has an excellent reputation for services rendered on behalf of debtors, creditors, creditors committees and other interested parties throughout the United States, including In re Federal Mogul Global Corp.; In re Fleming Companies; In re WorldCom, Inc.; In re Dura Automotive; and In re Kara Homes, Inc. In light of the size and complexity of the Debtors' Chapter 11 cases, the Creditors Committee requires the services of a "seasoned and experienced" forensic accountant and financial consultant, and one that is familiar with the Chapter 11 process and has real estate expertise, Ms. Torrens tells the Court. To the extent that JHC's scope of services might otherwise overlap with the services provided by the Creditors Committee's other professionals, the professionals will carefully coordinate their efforts in order to avoid any unnecessary duplication in efforts, Mr. Torrens assures the Court. As the Committee's accountants, JHC will: * perform forensic and financial analyses, including the evaluation of intercompany claims, avoidance actions, fraudulent conveyances and preferential transfers; * monitor and analyze the Debtors' weekly operating reports, including budget to actual performance and cash management procedures; * analyze accounting aspects of certain proposed transactions of the Debtors; * review and analyze certain financial information prepared by the Debtors or their professionals, including cashflow projections and budgets, cash receipts and disbursement analysis, and analysis of various balance sheet accounts and business plans; and * render other services as the Creditors Committee and its counsel may deem necessary that are consistent with the role of a forensic accountant and financial consultant and not duplicative of services provided by other professionals. JHC will be paid its customary hourly rates and reimbursed of its expenses. The firm's hourly rates are: Senior Partner/Partners $515 - $650 Director/Senior Manager $430 - $500 Other Professional Staff $170 - $425 Paraprofessional $115 - $155 JHC informs the Court that in the normal course of business, it revises its hourly rates on February 1 of each year. The Creditors Committee requests that the Debtors' estates be required to indemnify and hold JHC and certain related persons and entities harmless and to provide contribution for any losses, claims, damages or liabilities arising out of or in connection with the firm's retention. The indemnification does not apply to any losses, claims, damages or liabilities incurred in connection with JHC's engagement that are finally judicially determined by a court of competent jurisdiction to have primarily resulted from the bad faith or gross negligence of the firm, according to Ms. Torrens. Bernard A. Katz, a senior partner at JHC, discloses that the firm has in the past worked with, continues to work with, and has mutual clients with certain law firms who may represent parties- in-interest in the Debtors' Chapter 11 cases. None of the engagements or relationships are related to the Debtors' cases, he assures the Court. Because of the size and diversity of the firm's practice, JHC may have in the past performed professional services for, and may in the future provide services for entities that are claimants or interest holders of the Debtors in matters wholly unrelated to the Debtors' pending bankruptcy cases. None of these business relationships constitute interests materially adverse to the Creditors Committee in the matters upon which JHC is to be employed, and none are in connection with the Debtors' cases, Mr. Katz tells the Court. The firm does not represent or hold any interest adverse to the Debtors' estates. JHC is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, Mr. Katz asserts. 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). TOUSA INC: Committee Seeks to Tap Robert Charles as Advisor ----------------------------------------------------------- The Official Committee of Unsecured Creditors of TOUSA Inc. and its debtor-affiliates seeks authority from the U.S. Bankruptcy Court for the Southern District of Florida to retain Robert Charles Lesser & Co., as its real estate advisors, nunc pro tunc to the Debtors' bankruptcy filing. RCLCO is a real estate advisory firm providing market and financial analysis and strategic planning services to a broad spectrum of clients, including developers and home builders, according to Tara Lynn Torrens, vice president of Capital Research and Management Company and co-chair of the Creditors Committee. RCLCO is experienced in valuation, acquisition, reposition, management and disposition of distressed real estate assets. With in-depth knowledge of local markets and more than 40 years of strategy experience, RCLCO provides its clients with objective and insightful recommendations that are analytically based and action-oriented, Ms. Torrens tells the Court. In light of the size and complexity of the Debtors' Chapter 11 cases, the Creditors Committee requires the services of a seasoned and experienced real estate advisor and one that is familiar with the recent and current home building marketplace in which the Debtors operate, Ms. Torrens says. As the Committee's real estate advisors, RCLCO will: * review the Debtors' project-specific business plans, with particular emphasis on the Debtors' assumptions relating to future home prices and absorption rate; * review and prepare fundamentals-based forward market assessments for the homebuilding industry for each of the markets where the Debtors have homebuilding or land development activities; * prepare project asset analysis and valuations; * provide litigation support services relating to real estate and valuation issues; and * provide other services as reasonably requested by the Creditors Committee. The services that the firm will provide to the Creditors Committee are necessary to enable it to acquit its fiduciary duties to the Debtors' unsecured creditor constituency and to seek to maximize the value of recoveries for unsecured creditors in the Debtors' Chapter 11 cases, Ms. Torrens asserts. RCLCO will carry out unique functions and the Creditors Committee's professionals will use reasonable efforts to coordinate their services in order to minimize any potential duplication in the services and any potential burden on the Debtors and their professionals, Ms. Torrens assures the Court. The firm will be paid its customary hourly rates and reimbursed of its expenses. RCLCO normally revises its hourly rates on January 1 of each year. The current hourly rates are: Managing Director $360 - $600 Senior Principal $325 - $340 Principal $280 - $300 Other Consultants $110 - $250 Associates, Staff, Assistants $90 - $100 The Creditors Committee requests that the Debtors' estates be required to indemnify and hold the firm and certain related persons and entities harmless and to provide contribution for any losses, claims damages or liabilities arising out of or in connection with the retention of RCLCO. Ms. Torrens says that the indemnification will not cover any losses, claims, damages or liabilities incurred in connection with RCLCO's engagement that are finally judicially determined by a court of competent jurisdiction to have primarily resulted from the bad faith or gross negligence of the firm. Leonard Bogorad, managing director of RCLCO, informs the Court that because of the size and diversity of the firm's practice, it may have in the past performed professional services for, and may in the future provide services for entities that are claimants or interest holders of the Debtor in matters wholly unrelated to the Debtors' bankruptcy cases. None of these business relationships constitute interests materially adverse to the Creditors Committee in the matters for which RCLCO is to be employed, and none are in connection with the Debtors' Chapter 11 cases, Mr. Bogorad says. Mr. Bogorad discloses that its employee Eric Brown was formerly employed by a Debtor for approximately two years until December 2006. Mr. Brown then provided consulting services to the Debtor until July 2007. In September 2007, Mr. Brown purchased a parcel of land from Engle Homes. The purchase contract was subsequently placed in escrow, where it remains. Mr. Brown is not an officer, director or owner of RCLCO and will not work on any matters in connection with the firm's retention and employment by the Creditors Committee in these Chapter 11 cases, Mr. Bogorad says. RCLCO will not accept any engagement or perform any services in the Debtors' bankruptcy cases for any entity or person other the the Creditors Committee, Mr. Bogorad assures the Court. RCLCO is a disinterested person, as the term is defined in Section 101(14) of the Bankruptcy Code, Mr. Bogorad asserts. 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). TOUSA INC: Oakmont Wants Stay Lifted to Terminate Purchase Deal --------------------------------------------------------------- Oakmont LLC, the financier of the Oakmont Plan Unit Development, asks the U.S. Bankruptcy Court for the Southern District of Florida to modify the automatic stay in the bankruptcy case of TOUSA Inc. and its debtor-affiliates to allow it to take actions as it deems necessary or appropriate to terminate the Debtors' rights under an agreement to purchase lots in the project. In the alternative, Oakmont LLC asks the Court to compel the Debtors to either (i) immediately assume or reject the Purchase Agreement and comply with the provisions of Section 365(b) of the Bankruptcy Code and cure all defaults; or (ii) provide adequate assurance that it will promptly compensate Oakmont LLC for all actual damages and losses incurred as a result of the Debtors' default under the terms of the Purchase Agreement. Oakmont Grove Venture, LLC, is the owner and developer of certain real property located in Polk County, Florida, being developed under the terms of the Oakmont Plan Unit Development. Oakmont is a planned unit development primarily consisting of various residential subdivisions with differing sizes of lots. The acquisition and horizontal development of Oakmont was and has been financed by Oakmont LLC through an approximate $5,200,000 loan from Wachovia, N.A., and the issuance of roughly $14,200,000 in bonds by the Oakmont Grove Community Development District. Oakmont LLC remains liable for the Wachovia Debt, which matures in late 2008, and its investment in Oakmont is, under applicable law, effectively subordinate to the amounts owing on the CDD Bonds. Pursuant to the terms of a certain Agreement for Sale and Purchase, dated August 19, 2003, as amended, between the Debtors and Oakmont LLC, the Debtors agreed to purchase the Lots. Ultimately, the total purchase price for the Lots was $35,955,000, according to Andrew M. Brumby, Esq., at Shutts & Bowen LLP, in Orlando, Florida. The Purchase Agreement also provides that once Oakmont LLC completed the infrastructure and other horizontal development activities for the initial phase and provided it gives requisite notice to the Debtors, the Debtors had 15 days within which to close on the first 100 Lots and were required to close on an additional 100 Lots every 180 days, Mr. Brumby informs the Court. After receipt of a letter dated February 8, 2008, from Oakmont LLC's counsel, the Debtors' representatives contacted Oakmont to discuss modification of the Purchase Agreement with respect to the Lots takedown requirement. No agreement was reached, and the Debtors have now failed and refused to timely close pursuant to the terms of the Purchase Agreement, Mr. Brumby says. The Debtors were informed by letter dated February 22, 2008, that the date of closing on the initial 100 Lot Sale would take place on February 25, 2008. However, the Debtors failed to close, Mr. Brumby relates. Consequently, the Debtors are in default under the terms of the Purchase Agreement, and the default may now be cured, Mr. Brumby states. 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). TRAVELPORT HOLDINGS: S&P Revises Outlook to Neg. on Weak Financial ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Travelport Holdings Ltd. and its primary operating subsidiary, Travelport LLC, to negative from stable. All ratings, including the 'B' long-term corporate credit ratings on both, were affirmed. "The outlook revision is based on the company's weaker financial profile in 2007, resulting from incremental debt and associated interest, and significant nonrecurring charges," said Standard & Poor's credit analyst Betsy Snyder. "Significant improvement is not likely to occur this year due to expected reduced travel demand caused by the slowing global economy," the analyst continued. While the Parsippany, New Jersey-based travel distribution company's profitability should recover from a $429 million loss recorded in 2007, heavy debt and associated interest expense related to its 2006 leveraged buyout, 2007 debt-financed shareholder dividend, and 2007 acquisition of Worldspan will constrain its financial profile. Travelport should realize additional synergies as a result of combining the Worldspan and Galileo operations (with $178 million already achieved), but the company's bookings and cash flow will likely suffer from reduced travel in a weaker global economy. The ratings on Travelport reflect its highly leveraged financial profile, limited financial flexibility, and the seasonal and cyclical nature of the travel industry. Ratings also incorporate the company's major position in travel distribution and the strong cash flow this business typically generates, as well as modest debt maturities through 2012. Travelport is owned by affiliates of the Blackstone Group and Technology Crossover Ventures, together with One Equity Partners. In the first half of 2007, Travelport added more than $2 billion of debt to its capital structure to fund a $1.1 billion dividend just seven months after its acquisition, and $1.090 billion to prefund its acquisition of Worldspan L.P., which occurred in August 2007. In July 2007, Travelport used $477 million of proceeds from the IPO of Orbitz Worldwide Inc. (in which it still owns just under 50%) and $630 million of Orbitz's $685 million credit facilities to repay a portion of the incremental debt. However, Travelport recorded a loss of $436 million in 2007, reflecting incremental interest expense ($184 million) associated with the Worldspan acquisition, a $187 million (noncash) charge for equity compensation, $65 million of transaction costs, and $57 million of one-time fees to be paid to the equity sponsors in a future period. As a result, 2007 EBITDA interest coverage declined to 1.4x from 2.3x in 2006, funds from operations to debt declined to 2.6% from 6.5%, and debt to EBITDA increased to 7.6x from 8.3x, all below our expectations. When the $1.1 billion of PIK notes issued by parent Travelport Holdings are included, 2007 debt to EBITDA rises to about 9.5x. Reduced travel bookings in a softer global economy could offset the synergies achieved from combining the Worldspan and Galileo operations and lower interest expense after the debt paydown in mid-2007. However, the company's debt and capital lease maturities average only $17 million-$18 million a year through 2012. Travelport is a major travel distributor consisting of two businesses: Global Distribution System and GTA. GDS consists of the Galileo and Worldspan operations, through which travel agencies search, process, and book travel itinerary and pricing options aggregated from airlines, hotels, car renters, tour operators, cruise lines, rail, and other travel suppliers. GTA sources hotels, ground travel, sightseeing, and other destination services from travel suppliers and then distributes the inventory to other travel wholesalers, tour operators, travel agents, and directly to consumers. Significant improvement in the company's financial profile is not likely to occur in 2008 due to expected reduced travel demand caused by the slowing global economy. The improvement in the company's credit ratios could be delayed if operating synergies from the Worldspan acquisition are below expectations or bookings decline due to weaker demand. If that were the case, S&P would likely lower the ratings. An outlook revision to stable is unlikely without a meaningful improvement in the company's financial profile. UBS MORTGAGE: Fitch Chips Ratings to 'BB' on Four Cert. Classes --------------------------------------------------------------- Fitch Ratings has taken rating actions on UBS Mortgage Asset Securitization Transactions mortgage pass-through certificates. Affirmations total $292.4 million and downgrades total $241.6 million. MASTR Reperforming Loan Trust 2005-1 -- $45.7 million class 1A1 affirmed at 'AAA'; -- $41.3 million class 1A2 affirmed at 'AAA'; -- $35.5 million class 1A3 affirmed at 'AAA'; -- $16.4 million class 1A4 affirmed at 'AAA'; -- $12.4 million class 1A5 affirmed at 'AAA'; -- $6.1 million class 2A1 affirmed at 'AAA'; -- $1.3 million class PO affirmed at 'AAA'; -- Notional balance class AX affirmed at 'AAA'. MASTR Specialized Loan Trust 2007-1 -- $141.2 million class A downgraded to 'AA+' from 'AAA'; -- $10.3 million class M-1 downgraded to 'AA-' from 'AA+'; -- $9.7 million class M-2 downgraded to 'A' from 'AA'; -- $5.8 million class M-3 downgraded to 'A-' from 'AA-'; -- $5.1 million class M-4 downgraded to 'BBB+' from 'A+'; -- $5.3 million class M-5 downgraded to 'BBB-' from 'A'; -- $4.7 million class M-6 downgraded to 'BB+' from 'A-'; -- $4.4 million class M-7 downgraded to 'BB' from 'BBB+'; -- $3.5 million class M-8 downgraded to 'BB' from 'BBB'; -- $2.0 million class M-9 downgraded to 'BB' from 'BBB'. MASTR SLT 2007-2 -- $133.7 million class A affirmed at 'AAA'; -- $9.7 million class M1 downgraded to 'AA' from 'AA+'; -- $9.3 million class M2 downgraded to 'A+' from 'AA+'; -- $5.5 million class M3 downgraded to 'A+' from 'AA+'; -- $4.8 million class M4 downgraded to 'A' from 'AA'; -- $4.7 million class M5 downgraded to 'A-' from 'AA-'; -- $4.4 million class M6 downgraded to 'BBB' from 'A+'; -- $4.2 million class M7 downgraded to 'BBB-' from 'A'; -- $3.7 million class M8 downgraded to 'BB+' from 'A-'; -- $3.3 million class M9 downgraded to 'BB' from 'BBB+'. UNIQUE DEPENDABLE: Case Summary & 60 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Unique Dependable Insurance Services, Inc. 2501 W. Shaw, Ste. 103 Fresno, CA 93711 Bankruptcy Case No.: 08-12241 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Cheney and Associates Ins. Services, Inc. 08-25181 Alan Cheney and Asso. Ins. Srv. Modesto, 08-90705 Inc. Type of Business: The Debtors are insurance agents and brokers. Chapter 11 Petition Date: April 23, 2008 Court: Eastern District of California (Fresno) Judge: W. Richard Lee Debtors' Counsel: Daniel L. Egan, Esq. Wilke, Fleury, Hoffelt, Gould & Birney, LLP 400 Capitol Mall 22nd Flr. Sacramento, CA 95814 Tel: (916) 441-2430 Unique Dependable Insurance Services, Inc's Financial Condition: Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $10 million A. Unique Dependable Insurance Services, Inc's 21 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aleritas Capital value of collateral: $2,826,628 Kasey Rogg $450,000 7400 College Blvd., Ste. 250 Overland Park, KS 66210 Internal Revenue Service taxes $83,288 P.O. Box 21126 Philadelphia, PA 19114 Brooke Franchise Corp. trade debt $38,431 Attn: Jeff Nourse 10950 Grandview Dr., Ste. 600 Overland Park, KS 66210 Employment Development Dept. taxes $16,566 Whiteley, Inc. trade debt $8,848 Green Polack & Co. Accountancy trade debt $6,915 Corp. First Comp trade debt $1,611 Judy's Donuts trade debt $1,111 Sean Petersen $1,059 Mehry Arsala $1,057 LAW Printing trade debt $1,007 Financial Credit Network, Inc. trade debt $883 SBC Smart Yellow Pages trade debt $840 ARSI American Recovery trade debt $823 Services, Inc. Allen Law Group, LLP trade debt $821 AT&T trade debt $817 First Advantage ADR trade debt $669 Utility Telphone trade debt $647 Allied Insurance trade debt $545 Puget Sound Leasing trade debt $393 B. Cheney and Associates Ins. Services, Inc's 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aleritas Capital value of collateral: $2,826,628 Kasey Rogg $936,000 7400 College Blvd., Ste. 250 Overland Park, KS 66210 Brooke Franchise Corp. franchise fee $987,362 Jeff Nourse 10950 Grandview Dr., Ste. 600 Overland Park, KS 66210 Internal Revenue Service taxes $116,780 P.O. Box 21126 Philadelphia, PA 19114 Lippenberger, Thompson, Welch, trade debt $51,208 Soroko & GMAC trade debt; value of $80,113 collateral: $43,000 Employment Development Dept. $15,131 Citi Cards/Citibank trade debt $13,280 Phillips66conoco commercial trade debt $13,280 Blue Shield of California trade debt $12,723 Lippenberger, Thompson, Welch, trade debt $12,548 Soroko & Blue Shield $6,592 Vengroff, Williams & trade debt $3,747 Associates, Inc. Office Depot trade debt $3,747 Green, Polack & Company trade debt $2,957 Accountancy Corp. Wilson, Elser, Moskowitz, trade debt $2,800 Edellman & Dick Steve Hirata $2,692 Shell Fleet trade debt $2,364 Julie Clark $2,244 Staples trade debt $1,799 C. Alan Cheney and Asso. Ins. Srv. Modesto, Inc's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Aleritas Capital value of collateral: $2,826,628 Kasey Rogg $669,890 7400 College Blvd., Ste. 250 Overland Park, KS 66210 Internal Revenue Service taxes $60,492 P.O. Box 21126 Philadelphia, PA 19114 American Express credit card $19,678 Box 0001 Los Angeles, CA 90096-0001 Employment Development Dept. taxes $12,856 Dell Financial Services trade debt; value of $10,496 security: $10,000 Brooke Franchise Corp. franchise fee $4,314 Debi Mathiesen-Lepper employee $2,758 Green, Polack & Co. trade debt $2,655 Accountancy Corp. The Hartford trade debt $2,579 Edward Persike trade debt $2,500 Pitney Bowes, Inc. trade debt $1,584 Frederick Properties trade debt $1,550 Safeco Insurance trade debt $1,323 Charissa Faria employee $1,181 Safeco Insurance trade debt $1,174 Utility Telephone trade debt $1,018 Whiteley Inc. trade debt $943 Pre-paid Legal Services, Inc. trade debt $596 Toshiba America trade debt $555 Unum Life Insurance trade debt $496 UTAH 7000: Credit Suisse Balks at $50MM Loan from Pivotal Finance ----------------------------------------------------------------- Credit Suisse Cayman Islands Branch, as secured creditor and its capacity as administrative agent under a first lien credit agreement, objects to Utah 7000 LLC and its debtor-affiliates' request to access up to $50 million in debtor-in-possession financing from Pivotal Finance LLC, an entity formed by Public Safety Personnel Retirement Systems of the State of Arizona and principals of Pivotal Group Inc. The Debtors owed $293 million to the first lien lenders, which is secured by first priority perfected liens on substantially all assets of the Debtors. Credit Suisse alleges that the priming facility is a stopgap measure that could require the Debtors to seek more financing. Credit Suisse says the Debtors failed provide adequate protection to the first lien lenders' interest in collateral. The Debtors have acknowledged that the $50 million in financing may not be sufficient to complete the development, which requires at most $200 million of additional funding. A hearing is slated for May 5, 2008, at 8:30 a.m., to consider approval of the Debtors' request and Credit Suisse's objection. As reported in the Troubled Company Reporter on April 23, 2008, the Debtors asked the Court to obtain $50 million in DIP financing from Pivotal Finance. The DIP facility will terminate and become due on April 1, 2009. The Debtors will use the money to fund their operations and continue their development. The DIP facility will incur interest at the rate of LIBOR plus 7.5% -- currently about 10.2% per annum -- payable at the end of each month. The DIP agreement is subject to a $500,000 carve-out for payment to professional advisors to the Debtors, any statutory committee appointed in the Debtors' cases and U.S Trustee fees. The Debtors will pay a $250,000 commitment fee, and other fees and disbursements of DIP lender's counsel in connection with the preparation and negotiation of the DIP facility. According to the Debtors, the DIP facility agreement contains appropriate and conditional events of default. To secure their obligations, the Debtors will grant the DIP lender, among other things (i) priority in payment over any and all administrative expenses and (ii) perfected first priority security interest in and liens upon all unencumbered property of the Debtors. In addition, the DIP lender will get perfected liens and security interest senior to all liens and security interest of lenders under: -- a $275 million senior secured credit facility dated Aug. 31, 2005, with Credit Suisse, Cayman Island Branch, as administrative agent; and -- a $75 million senior second lien secured credit facility dated Aug. 31, 2005, with Credit Suisse, Cayman Island Branch as administrative agent. About Utah 7000 Headquartered in Park City, Utah, Utah 7000 LLC fka Pivotal Promontory LLC operates and develops resort community near Park City and Deer Valley ski resorts. On March 28, certain holders of junior and second priority liens filed for involuntary Chapter 11 petitions against the Company (Bankr. D. Utah Lead Case No.08-21869). Kenneth L. Cannon, II, Esq., at Durham Jones & Pinegar, represents the petitioners. On April 3, 2008, the Debtors gave their consent to the entry of an order for chapter 11 bankruptcy relief. Danny C. Kelly, Esq., at Stoel Rives LLP and Eve H. Karasik, Esq., at Stutman Treister & Glatt Professional Co., represent the Debtors' in their restructuring efforts. The U.S. Trustee for Region 19 appointed an Official Committee of Unsecured Creditors in these cases. J. Thomas Beckett, Esq., at Parsons Behle & Latimer, represents the Committee. VERTIS INC: Moody's Changed Probability of Default Rating to Ca/LD ------------------------------------------------------------------ Moody's Investors Service has revised Vertis, Inc.'s Probability of Default rating to Ca/LD from Ca, while affirming its Ca Corporate Family rating, following the company's April 30 announcement that its second lien noteholders agreed to forbear from exercising their rights and remedies under the indenture governing the second lien notes. Details of the rating action are: Rating lowered: -- Probability of Default rating to Ca/LD from Ca Ratings affirmed -- $348 million 9.75% secured second lien notes due 2009 - Caa2, LGD2, 23% -- $349 million 10.875% Senior Notes due 2009 - Ca, LGD4, 51% -- $290 million 13 1/2% Senior Subordinated Notes due 2009 - C, LGD5, 81% -- Corporate Family rating - Ca The rating outlook is stable. This concludes the review of Vertis's Probability of Default rating which was lowered (but remained under review) on April 16, following the company's announcement that it had elected to forego making a $17.1 million interest payment on its 9 ¾% senior secured second lien notes, in accordance with the 30 day grace period (ending on April 30) permitted under the terms of the second lien note indenture. The downgrade of the PDR to Ca/LD reflects Moody's view that any missed, delayed or deferred debt payment obligation constitutes a default event, even if such deferral is permitted by noteholder consent. Moreover, the Ca component of the Ca/LD rating signals a very high probability of default on an ongoing basis for the company's other obligations that have not been subject to the in- substance default. On April 30, 2008, Vertis announced that pursuant to a forbearance agreement, the holders of an aggregate of 77% of the outstanding principal amount of the Second Lien Notes agreed to a number of provisions, including an agreement to forbear from exercising their rights and remedies under the indenture governing the Second Lien Notes Vertis, Inc., a leading provider of integrated advertising products and marketing services, recorded fiscal 2007 revenues of $1,365 million. The company is headquartered in Baltimore, Maryland. VISTEON CORP: March 31 Balance Sheet Upside-Down by $136 Million ---------------------------------------------------------------- Visteon Corporation's balance sheet at March 31, 2008, showed total assets of $7.2 billion and total liabilities of $7.3 billion resulting in a total shareholders' deficit of about $136 million. The company reported net loss of $105 million, including a $40 million loss associated with the sale of North American aftermarket facilities and a $21 million asset impairment. For the first quarter 2007, Visteon reported a net loss of $153 million which included a $40 million of asset impairments. The company related that divestitures and plant closures decreased product sales by $340 million; favorable currency of $181 million and higher Asian sales were partial offsets. Services revenue was $121 million, a decrease of $9 million from the same period in 2007. Visteon reduced its net loss by $48 million to $105 million for first quarter 2008. Cash used by operating activities for first quarter 2008 was $126 million, a $5 million improvement over the $131 million in first quarter 2007. First quarter 2008 cash from operations was negatively impacted on a year-over-year basis by a number of factors including cash restructuring costs, pension, OPEB and recoverable tax assets. Capital expenditures for first quarter 2008 were $74 million, $10 million higher than the same period a year ago, reflecting investments to support future business. Free cash flow, for first quarter of 2008 was negative $200 million, compared with negative $195 million in the same period of 2007. As of March 31, 2008, the company's consolidated cash balances totaled $1.6 billion. Restructuring and Divestitures During the first quarter, Visteon addressed a number of facilities as part of its restructuring initiatives. Visteon sold its non- core North American-based aftermarket underhood and remanufacturing operations which included two facilities in Mexico and one in Tennessee. The businesses generated approximately $130 million of sales in 2007 and had a negative gross margin of approximately $16 million. In February 2008, Visteon closed its interiors facility in Bellignat, France, resulting in the separation of approximately 300 employees. A majority of the production at this facility was consolidated into other manufacturing facilities. Additionally, Visteon remains on track to exit its Bedford, Indiana, and Concordia, Missouri, facilities later this year. During the first quarter of this year Visteon recorded $46 million of restructuring charges. These charges were related to three facilities in continental Europe, which are being addressed as part of the company's three-year plan, and related cost-reduction actions associated with the company's drive to reduce overhead costs, through the reduction of general administrative and engineering related expenses. In January Visteon expected to generate cumulative savings of approximately $215 million over the next three years as part of the overhead cost reduction initiative. To date approximately 250 salaried employees have been separated from the company in conjunction with this initiative, and Visteon remains on track to generate the expected savings. Visteon continues to address its operations in the United Kingdom. Visteon has a non-binding memorandum of understanding with Linamar Corporation for the sale of its Swansea, Wales, facility. Although the transaction has yet to be finalized and negotiations continue, Visteon has been able to mitigate the losses associated with the facility through agreements reached with customers supplied by the Swansea facility. About Visteon Corporation Based in Van Buren Township, Michigan, Visteon Corp. (NYSE: VC) -- http://www.visteon.com/-- is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic, and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers. The company's other corporate offices are in Shanghai, China; and Kerpen, Germany. The company has facilities in 26 countries and employs approximately 43,000 people. * * * Moody's Investor Service placed Visteon Corp.'s long-term corporate family and probability of default ratings at 'B3' in November 2006. The ratings still hold to date with a negative outlook. WASHINGTON MUTUAL: Fitch Holds Ratings on 30 Classes of Securities ------------------------------------------------------------------ Fitch Ratings affirmed 30 classes of securities issued from the Washington Mutual Master Note Trust and the Washington Mutual Master Trust. The affirmation of these tranches completes the portfolio review that Fitch began several weeks ago. The list of securities being affirmed can be found at the end of this rating action commentary. Fitch noted higher delinquencies and charge-offs occurring in conjunction with slower monthly payment rates during the first quarter of 2008 in the Washington Mutual credit card trusts. The most recent servicing report, which includes trust performance through the March monthly period, shows that the percentage of receivables associated with accounts 60 or more days delinquent has been elevated for the past three months; however, it is exhibiting evidence of stabilizing. Delinquent credit card accounts, charged off after 180 days, are a strong predictor of future charge-off volume for the trusts, as Washington Mutual experiences relatively high charge-off percentages resulting from ongoing delinquency rather than bankruptcy filings, which tend to be more spontaneous in nature and charged off within 60 days. Since charge-offs lag 60+ day delinquencies by a few months, Fitch expects charge-offs, currently at 11.99% on a net basis, to climb towards the high end of Fitch's expected range in the next few months before stabilizing. MPR, a measure of how quickly consumers are paying their debt, rose 41 bps to 10.28% in March. However, for the four preceding months, the average MPR was 9.75% compared to an average of 10.18% during the same period a year ago. Both the recent uptick and historically observed seasonal trends are indicative of improvement that should persist through the next few months. Fitch's analysis included scenarios simulating the excess spread generated over the next few months incorporating this year's performance as well as Fitch's expectations for the remainder of the year. Although the spread account may begin trapping cash later this year, breakeven multiples are still projected to remain above Fitch's base case multiples for these trusts. As part of its on-going surveillance efforts, Fitch will continue to monitor the performance of these trusts to determine if the observed trends are sustainable. In the event that defaults and MPR do not show signs of stabilization in the next few reporting periods, additional rating actions may be warranted. Washington Mutual Master Note Trust 2005-A1 -- $643,600,000 'AAA'; Washington Mutual Master Note Trust 2005-M1 -- $90,400,000 'AA'; Washington Mutual Master Note Trust 2005-B1 -- $87,800,000 'A'; Washington Mutual Master Note Trust 2005-C1 -- $93,100,000 'BBB'; Washington Mutual Master Note Trust 2005-D1 -- $85,100,000 'BB'; Washington Mutual Master Note Trust 2005-A2 -- $775,000,000 'AAA'; Washington Mutual Master Note Trust 2005-M2 -- $125,000,000 'AA'; Washington Mutual Master Note Trust 2005-B2 -- $150,000,000 'A'; Washington Mutual Master Note Trust 2005-C2 -- $150,000,000 'BBB'; Washington Mutual Master Note Trust 2005-D2 -- $214,953,847 'BB-'; Washington Mutual Master Note Trust 2006-A1 -- $900,000,000 'AAA'; Washington Mutual Master Note Trust 2005-D2-2 -- $343,926,153 'BB-'; Washington Mutual Master Note Trust 2006-B1 -- $200,000,000 'A'; Washington Mutual Master Note Trust 2006-C1 -- $200,000,000 'BBB'; Washington Mutual Master Note Trust 2006-A2 -- $750,000,000 'AAA'; Washington Mutual Master Note Trust 2006-M1 -- $300,000,000 'AA'; Washington Mutual Master Note Trust 2006-C2 -- $150,000,000 'BBB'; Washington Mutual Master Note Trust 2006-A3 -- $1,250,000,000 'AAA'; Washington Mutual Master Note Trust 2006-A4 -- $500,000,000 'AAA'; Washington Mutual Master Note Trust 2006-C3 -- $200,000,000 'BBB'; Washington Mutual Master Note Trust 2007-A1 -- $1,100,000,000 'AAA'; Washington Mutual Master Note Trust 2007-B1 -- $150,000,000 'A'; Washington Mutual Master Note Trust 2007-A2 -- $875,000,000 'AAA'; Washington Mutual Master Note Trust 2007-C1 -- $125,000,000 'BBB'; Washington Mutual Master Note Trust 2007-A4 -- $425,000,000 'AAA'; Washington Mutual Master Note Trust 2007-A5 -- $200,000,000 'AAA'; Washington Mutual Master Trust 2001-D A -- $650,000,000 'AA'; Washington Mutual Master Trust 2001-G A -- $400,000,000 'AAA'; Washington Mutual Master Trust 2004-C E -- $35,519,000 'BB-'; Washington Mutual Master Trust 2004-G E -- $117,486,000 'BB-'. WILBURGENE: Case Summary & 10 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Wilburgene, LLC Holland & Hart, LLP 4422 55th Ave. N.E. Seattle, WA 98105 Bankruptcy Case No.: 08-22650 Chapter 11 Petition Date: April 25, 2008 Court: District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Mona Lyman Burton, Esq. Email: mburton@hollandhart.com Holland and Hart 60 East South Temple, Ste. 2000 Salt Lake City, UT 84111 Tel: (801) 595-7822 Fax: (801) 364-9124 http://www.hollandhart.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 10 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Web Sandbulte $250,892 4422 55th Ave., N.E. Seattle, WA 98105 Tricon Builder Services, LLC $108,000 P.O. Box 681777 Park City, UT 84068 LLL Home Builders Division, $9,800 Inc. 1245 Tamarack Road Salt Lake City, UT 84123 Ike's Plumbing, Inc. $2,880 Fire System Specialists, Inc. $2,424 Snyderville Basin Water $1,653 Reclamation District Summit County Treasurer $8,191 Miso Hungry Restaurant Group, $8,250 LLC Questar Gas Co. $657 Dale R. Wilde Co. $500 WORLDGATE COMMS: Marcum & Kliegman Expresses Going Concern Doubt ---------------------------------------------------------------- Marcum & Kliegman LLP raised substantial doubt about the ability of WorldGate Communications, 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 had an accumulated deficit of nearly $262,000,000, stockholders' deficiency of nearly $1,500,000 and a working capital deficit of nearly $2,400,000 at Dec. 31, 2007. The company also experienced severe cash shortfalls, deferred payment of some of its operating expenses, and plans to shut down its operations for a period of time during 2008, and further curtailments of its operations could be necessary in the near future. The company posted a net loss of $14,739,000 on total revenues of $2,565,000 for the year ended Dec. 31, 2007, as compared with a net loss of $17,608,000 on total revenues of $2,511,000 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $3,414,000 in total assets and $4,876,000 in total liabilities, resulting in a $1,462,000 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $2,496,000 in total current assets available to pay $4,876,000 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?2aff About WorldGate Communications Based in Trevose, Pennsylvania, WorldGate Communications Inc. (NASDAQ: WGAT) -- http://www.wgate.com/-- designs, manufactures, and distributes the Ojo line of personal videophones. Ojo personal videophones offer real-time, two-way video communications with video messaging. ZIFF DAVIS: Wants to Sign New Contracts with CRO & Former CEO ------------------------------------------------------------- Ziff Davis Media Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to enter into separate letters of agreement with (a) Mark D. Moyer, the Debtors' chief restructuring officer and (b) Robert Callahan, the Debtors' former chief executive officer, to provide consulting services to the Debtors. The Moyer Agreement David Neier, Esq., at Winston & Strawn LLP, in New York, contends that it is crucial to the Debtors' reorganization efforts that Mr. Moyer complete various objectives he has undertaken in his capacity as Chief Restructuring Officer. He says that Mr. Moyer's employment with the Debtors would otherwise have expired on April 15, 2008, so the Debtors and Mr. Moyer negotiated an agreement to establish parameters for his compensation as he completes various objectives. The objectives include: -- issuance, at or within a reasonable period of time after confirmation of a Chapter 11 plan of reorganization or sale of substantially all of the Debtors' assets pursuant to a sale under Section 363 of the Bankruptcy Code, of audited financial statements, together with an unqualified opinion by Grant Thornton LLP, for the Debtors for the fiscal year ended December 31, 2007; -- simplification of the process for allocating corporate expenses to the Debtors' operating units in accordance with Generally Accepted Accounting Principles; -- support in preparing the liquidation analysis, feasibility analysis, and the financial data required to be prepared in connection with the Debtors' disclosure statement in a time frame that will permit its approval before May 5, 2008; and -- support, as necessary, the Debtors' efforts to consummate a Chapter 11 transaction resulting in approval by the Court before July 7, 2008. Mr. Neier tells the Court that the Moyer Agreement also contains certain non-solicitation and non-compete provisions for the Debtors' benefit. Pursuant to the Moyer Agreement, Mr. Moyer will be paid a base salary of $300,000 per year and one time bonuses of up to $375,000 based on fulfilling the various objectives. Before becoming the Debtors' CRO, Mr. Moyer had been the Debtors' Chief Financial Officer since October 2005 and has served as Ziff-Davis, Inc.'s vice president and controller. Mr. Neier contends that without the benefit of Mr. Moyer's considerable knowledge and experience, the professional fees incurred by the Debtors would undoubtedly increase, and other members of the Debtors' management team would be forced to spend less time focused on the Debtors' business operations in order to spend more of their time addressing various matters currently handled by Mr. Moyer. "In short, the Debtors would spend a greater amount of resources having others fulfill Mr. Moyer's role than the remuneration he would receive under the Moyer Agreement," Mr. Neier says. The Callahan Agreement Mr. Neier relates that the Callahan Agreement is a short-term consulting agreement, the principal purpose of which is to have Mr. Callahan act as a sales agent for the Debtors, making specific calls on behalf of the Debtors to certain of their top customers, including IBM, Dell, and Lenovo. In addition, Mr. Callahn would also consult on various strategic initiatives being explored by the Debtors to improve their operations and profitability. Pursuant to the Callahan Agreement, Mr. Callahan's employment duration will last three months and is subject to cancellation by either party on 15 days' notice. Mr. Callahan will also receive a monthly fee of $50,000. In the past, Mr. Callahan has served as the Debtors' Chairman, CEO and president from October 2001 through August 2007. The Debtors contend that based on Mr. Callahan's wealth of experience and his familiarity with the Debtors' operations, Mr. Callahan is uniquely qualified to assist them in maintaining their key customer relationships. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. An Official Committee of Unsecured Creditors have been appointed in the case. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. The Debtors delivered to the United States Bankruptcy Court for the Southern District of New York, a Joint Chapter 11 Plan of Reorganization, on March 26, 2008. The Plan confirmation hearing is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern time. (Ziff Davis Bankruptcy News, Issue No. 8, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Wants to Assume FileFront Purchase Agreement -------------------------------------------------------- Ziff Davis Media Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York for authority to assume an Asset Purchase Agreement with MBPS.COM, Inc., FileFront LP and Todd Faulk and Derek Labian, as the FileFront Principals, dated as of November 4, 2005. David Neier, Esq., at Winston & Strawn LLP, in New York, relates that the FileFront APA is executory because: -- the benefits of assuming the FileFront APA far outweigh the burdens to be avoided by rejection; -- certain obligations under the FileFront APA, like payment of an additional purchase price could not be avoided absent rejection; and -- obligations remain owing by each of the parties under the FileFront APA, the failure of which to perform would constitute a material breach. Pursuant to Section 365(a) of the Bankruptcy Code, a debtor in possession "subject to the court's approval, may assume... any executory contract or unexpired lease of the debtor." Mr. Neier contends that assumption of the FileFront APA is clearly within the Debtors' business judgment. He says that FileFront is a valuable asset of the Debtors' estates because of the Web site's number of monthly unique visitors. FileFront.com accounts for more than 50% of all worldwide monthly unique visitors to all of the Debtors' websites. In February 2008, there were 12,338,541 monthly unique visitors to FileFront.com, while the gross total number of monthly unique visitors to all the Debtors' websites was 24,347,357. According to Mr. Neier, the increased traffic generated by FileFront.com benefits the Debtors because it draws the attention and advertising revenue of publishers and advertisers and brings a vast number of users into the Debtors' other websites, like 1UP and Game Videos. Mr. Neier also argues that since the Debtors are discontinuing their Games for Windows magazine to focus their PC gaming efforts exclusively in the digital arena, FileFront.com is the most crucial Web site for generating traffic within the Debtors' network of Web sites and therefore is critical to the Debtors' business plan. FileFront.com has been operating in many respects as an independent entity managed by the FileFront Principals. Mr. Neier says that while the FileFront Principals were under no obligation to continue working with the Debtors after the Fall of 2007, they remained with the Debtors in a good-faith effort to ensure the future success and viability of FileFront.com. With the leadership of the FileFront Principals, FileFront.com has surpassed all of the leading Web sites in the gaming download vertical market. In connection with the assumption of the FileFront APA, the FileFront Principals have agreed to enter into consulting agreements, which provide for the continuation of services to the Debtors by the FileFront Principals for a period of time sufficient to allow the FileFront operations to be transitioned to the Debtors' employees. Mr. Neier notes that if the FileFront APA is not assumed and the Debtors fail to enter into the Consulting Agreements with the FileFront Principals, then the Debtors would lose the services of the FileFront Principals which would interrupt the ensuing transition process and detrimentally affect the FileFront.com business. In addition, without the assumption of the FileFront APA, the Debtors may lose the protections the APA provides, like the Non- Compete, Non-Solicitation and Confidentiality provisions. "Instead of being restricted from competing with or assisting FileFront's competitors until November 2009, the FileFront Principals might be forced, from an economic standpoint, to reenter the business and would be free to engage in direct competition with the Debtors," Mr. Neier says. Mr. Neier tells the Court that, except for an earn out payment of $2,500,000, there are no other obligations currently owing from the Debtors under the FileFront APA. This fact means that the Debtors are not required to establish "adequate assurance of future performance" under Section 365(b)(1)(C) of the Bankruptcy Code. "Nonetheless, for the avoidance of doubt, the Debtors also have provided adequate assurance of future performance to the counterparties to the FileFront APA," Mr. Neier relates. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. An Official Committee of Unsecured Creditors have been appointed in the case. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. The Debtors delivered to the United States Bankruptcy Court for the Southern District of New York, a Joint Chapter 11 Plan of Reorganization, on March 26, 2008. The Plan confirmation hearing is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern time. (Ziff Davis Bankruptcy News, Issue No. 8, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Committee Wants to Retain Perella as Advisor -------------------------------------------------------- The Official Committee of Unsecured Creditors of Ziff Davis Media Inc. and its debtor-affiliates seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to retain Perella Weinberg Partners LLP as its financial advisor, nunc pro tunc to the Debtors' bankruptcy filing. The Committee has selected Perella because of the firm's diverse experience and extensive knowledge in the restructuring field. Perella's corporate advisory practice is focused on providing public and private clients advice related to mergers and acquisitions and financial restructurings. Before the Petition Date, Perella was engaged by O'Melveny & Meyers LLP to provide financial advisory services in connection with OMM's representation of certain holders of the Debtors' subordinated notes and accordingly has gained an extensive knowledge of the Debtors and their businesses. The Committee needs Perella to: -- advise and assist the Committee in examining and analyzing any potential or proposed strategy for restructuring or adjusting the Debtors' outstanding indebtedness or overall capital structure, whether pursuant to a plan, a sale of equity or of assets under Section 363 of the Bankruptcy Code, a liquidation or otherwise, including where appropriate, assisting the Committee in developing its own strategy for accomplishing a restructuring; -- advise and assist the Committee in evaluating and analyzing the proposed implementation of any Restructuring, including the value of securities, if any, that may be issued in connection with a restructuring; -- review and analyze the business, operations, liquidity situation, assets and liabilities, financial condition and prospects of the Debtors; -- analyze the Debtors' debt capacity in light of their projected cash flows; -- advise and assist the Committee in reviewing and providing an analysis of any proposed capital structure for the Debtors; -- attend meetings of the Committee in reviewing and providing an analysis of any proposed capital structure for the Debtors; -- advise and assist the Committee in evaluating any potential debtor-in-possession or exit loan or other financing proposed by the Debtors; -- review, analyze and advise the Committee with respect to the existing debt instruments of the Debtors, and any potential refinancing alternatives to the existing debt; -- advise and assist the Committee in reviewing and analyzing any proposed transactions which would require the Court's approval as requested from time to time by the Debtors, or other parties in interest; -- review and provide an analysis to the Committee of any proposed sale of all or substantially all of the Debtors' assets, or the sale of a division or group of the Debtors' assets; -- review and provide an analysis to the Committee of any Chapter 11 plan of reorganization proposed by any party; -- review and provide an analysis to the Committee of any new securities other consideration or other inducements to be offered or issued under a Plan; -- assist the Committee and participate in negotiations with the Debtors; -- provide testimony with regard to the value of the Debtors and in connection solely with the Chapter 11 cases; and -- provide any other financial advisory services in connection with the Chapter 11 cases as the Committee may from time to time reasonably request and which are customarily provided by financial advisors in similar situations. The Committee notes that services to be rendered by Perella will not be duplicative in any manner with the services performed by any other professional that the Committee intends to retain. In addition to all out-of-pocket expenses, Perella will be paid $100,000 per month in advance, beginning on the Engagement Date, and on every monthly anniversary date thereafter. Upon the consummation of a transaction, the Committee will pay Perella a transaction fee of $1,100,000; provided that subsequent to the third month of Perella's engagement, the amount of the Transaction Fee will be reduced by 50% of the Monthly Fees received by Perella. The Committee tells the Court that since Perella does not charge for its services on an hourly basis and does not have systems in place to track professionals' time usage, Perella will not maintain records of time spent by its professionals in connection with the rendering of services for the Committee except, to the extent required, in half-hour increments. The Committee and the Debtors have agreed to indemnify, hold harmless, and defend Perella and its affiliates and their respective controlling persons, partners, members, directors, officers, employees or consultants under certain circumstances. Kevin M. Cofsky, a director of Perella, assures the Court that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and does not hold or represent any interest adverse to any creditor and the Debtors' estates on the matters with respect to which it is to be engaged. About Ziff Davis Media, Inc. Headquartered in New York city, New York, Ziff Davis Media, Inc. -- http://www.ziffdavis.com/-- and its affiliates are integrated media companies serving the technology and videogame markets. They are information services and marketing solutions providers of technology media, including publications, Websites, conferences, events, eSeminars, eNewsletters, custom publishing, list rentals, research and market intelligence. Their US-based media properties reach over 22 million people per month at work, home and play. They operate in three segments: the Consumer Tech Group, which includes PC Magazine and pcmag.com; the Enterprise Group, which includes eWEEK and eweek.com, and the Game Group, which includes Electronic Gaming Monthly and 1up.com. The company and six debtor-affiliates filed for bankruptcy protection on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq. at Winston & Strawn, LLP represents the Debtors in their restructuring efforts. An Official Committee of Unsecured Creditors have been appointed in the case. When Ziff Davis filed for bankruptcy protection, it listed assets of between $100 million to $500 million and debts of $500 million to $1 billion. The Debtors delivered to the United States Bankruptcy Court for the Southern District of New York, a Joint Chapter 11 Plan of Reorganization, on March 26, 2008. The Plan confirmation hearing is scheduled for June 25, 2008 at 10:00 a.m., prevailing Eastern time. (Ziff Davis Bankruptcy News, Issue No. 8, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) ZIFF DAVIS: Committee Allowed to Retain Special Conflicts Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved a request by the Official Committee of Unsecured Creditors of Ziff Davis Media Inc. and its debtor-affiliates to retain Cohen Tauber Spievack & Wagner PC as special conflicts counsel, nunc pro tunc to the Debtors' bankruptcy filing. In its request to retain Cohen Tauber, the Committee said it intends to let Cohen Tauber address issues that O'Melveny & Meyers LLP, the Committee's primary counsel, may be unable to become involved in as a result of a conflict or potential conflict of interest, Dan Pevonka, senior credit manager of RR Donnelley & Sons Company, the Committee's co-chairman, tells the Court. According to Mr. Pevonka, the Committee believes that Cohen Tauber possesses extensive knowledge and expertise in the areas of law relevant to Chapter 11 cases, and that Cohen Tauber is well qualified to represent the Committee. Cohen Tauber has been employed in other bankruptcy cases as special conflicts counsel, including Fortunoff Fine Jewelry and Silverware LLC and Galey & Lord, Inc. As special conflicts counsel, Cohen Tauber's primary responsibilities will be: (a) the investigation and review of the liens and claims held by the Debtors' secured lenders, and (b) any other matters that may arise upon direction of the Committee. Mr. Pevonka tells the Court that Cohen Tauber intends to work closely with the other professionals retained by the Committee, to ensure that there is no duplication of services rendered or charged to the Debtors' estates. About Ziff Davis Headquartered in New York City, Ziff Davis Media Inc. -- http://www.ziffdavis.com/-- is a wholly-owned indirect subsidiary of Ziff Davis Holdings. Ziff Davis Holdings is the ultimate parent. Ziff Davis Holdings is majority owned by various investment funds managed by Willis Stein. Ziff Davis Media is an integrated media company serving the technology and videogame markets. Ziff Davis currently reaches over 26 million people a month through its portfolio of 15 websites, three award-winning magazines, consumer events and direct marketing services. The company has offices and labs in San Francisco and exports its brands internationally in 45 countries and 13 languages. The company manages its business through two business segments: the "PCMag Network" and the "1UP Network." Ziff Davis Media, Ziff Davis Holdings and five other affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code on March 5, 2008 (Bankr. S.D.N.Y., Case No. 08-10768). Carey D. Schreiber, Esq., and David Neier, Esq., at Winston & Strawn, LLP and represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors has selected O'Melveny & Myers LLP as its counsel. In its schedules filed with the Court, Ziff Davis Media disclosed total assets of US$144,224,155 and total debts of US$441,406,545. Ziff Davis' non-debtor foreign affiliates include Ziff Davis Europe Ltd. (United Kingdom), Ziff Davis Publishing (UK) Ltd. (United Kingdom), Ziff Davis France S.A. (France), SEEC/Ziff Davis Group (China) Ltd. (British Virgin Islands), and Ziff Davis Internet I. (Ziff Davis Bankruptcy News, Issue No. 10, Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstandor 215/945-7000) Z TRIM HOLDINGS: Blackman Kallick Expresses Going Concern Doubt --------------------------------------------------------------- Blackman Kallick, LLP, raised substantial doubt about the ability of Z Trim Holdings, 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 recurring losses from operations and its need of additional financing to continue in operation. The company posted a net loss of $16,430,884 on total revenues of $616,848 for the year ended Dec. 31, 2007, as compared with a net loss of $14,625,317 on total revenues of $104,004 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $9,565,958 in total assets, $2,898,335 in total liabilities and $6,667,623 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?2b00 About Z Trim Z Trim Holdings, Inc., (AMEX: ZTM) -- http://www.ztrim.com-- through its subsidiaries, produces, licenses, markets, and distributes its proprietary Z Trim, a natural food ingredient technology. It offers Z Trim fat replacement product to manufacturers, the food services industry, and consumers, as well as to food institutions that supply to restaurants, hospitals, schools, and cafeterias. The company also operates NAT Web, a nutrition analysis tool Web site is an interactive, Web-based system designed to empower individuals to select a nutrient-rich diet; and offers self-defense courses and videos, focusing on personal safety and self-defense, including rape prevention. In addition, Z Trim Holdings manufactures and distributes pillows, blankets, and other bedding products to airlines, hospitals, government, and other commercial and institutional customers. The company was founded in 1994 as Circle Group Holdings, Inc. and changed its name to Z Trim Holdings, Inc. in 2006. Z Trim Holdings is based in Mundelein, Illinois. * Fitch Says REITs Turns to Bank Term Loan as Refinancing Vehicle ----------------------------------------------------------------- Many U.S. REITs continue to turn to the bank term loan and mortgage markets as attractive refinancing vehicles for debt obligations despite the slowdown in the unsecured bond and CMBS markets, according to Fitch Ratings in its inaugural edition of the 'REIT Report Quarterly'. 'Low leverage and high existing coupons contributed to many REITs' ability to refinance loans in a more restrictive lending environment,' said Managing Director and REIT group head Steven Marks. 'Many prudent REIT managements have also secured fixed- rate, low-cost long-term debt and are maintaining strong and flexible balance sheets.' * Moody's Says Outlook for Automotive Parts Suppliers is Negative ----------------------------------------------------------------- U.S. automotive parts suppliers remain under pressure from declining vehicle production, North American market-share losses for the Detroit-3 automakers, and weak pricing power, says Moody's Investors Service. Consequently, the outlook for fundamental credit conditions in the sector over the next 12 to 18 months is negative. Landmark labor agreements that General Motors, Ford and Chrysler reached with the United Auto Workers union last year provide some stability for the auto parts suppliers by improving the financial heath of their biggest customers in North America. The new, four- year contracts allow the Detroit-3 to reduce wage and health care costs over the long term, says Moody's. Nonetheless, demand for new vehicles is being crimped by weakening economic conditions across the U.S., higher fuel costs and reduced access to credit financing for consumers. This reduced demand results in lower business volume for most auto suppliers. For some issuers, there is considerable risk of a negative impact to current ratings due to deteriorating liquidity, says Moody's VP-Senior Analyst Timothy Harrod. "Liquidity is an important rating differentiator within the auto parts sector," he said. North American vehicle production is expected to decline 6.7% to approximately 14.1 million units in 2008, says Moody's. In 2007, production fell 1.8% to 15.10 million units, the lowest level since 1996. "Although the trend in vehicle production volume remains unfavorable for most auto suppliers, ongoing restructuring actions and lower interest costs offset some of these negative pressures," says Harrod. * Moody's Maintains Negative Outlook on Homebuilding Industry ------------------------------------------------------------- The outlook for the U.S. homebuilding industry remains negative amid continued stress on housing market fundamentals and a heightened risk of recession, says Moody's Investors Service in a new report. Moody's expects to see more negative rating actions among its 19 publicly rated homebuilders, but for the pace of downgrades to ease. Moody's does not expect a housing recovery to begin until well into 2009 at the earliest. The rating agency also expects homebuilders to face growing resistance from lenders when requesting financial covenant waivers or amendments, making violations harder to resolve. While fundamental credit conditions in the industry are likely to stay negative over the next 12 to 18 months, Moody's says that there are some hints that portend a bottoming out in the housing market. Tell-tale signs include that cancellation rates on new homes appear to be moderating and potential homebuyer traffic has edged up. "While the news for the U.S. homebuilders is almost uniformly negative, the background music is becoming very subtly less discordant," says Moody's Vice President/Senior Credit Officer Joseph Snider. Snider says that a focus on working capital and inventory management among the homebuilders is beginning to lead to some meaningful reductions in inventory levels. The vast majority of homebuilders are generating positive cash flow. Among the higher-rated builders, liquidity is improving as cash balances continue to grow. Various government actions under consideration to help distressed homeowners could ultimately help the industry, but are months away from having any impact, at the earliest. After taking 27 negative rating actions on the homebuilders since September, Moody's expects fewer negative actions in the coming months. Key measures Moody's will be following include inventory performance, cash flow generation, and liquidity. "We will continue to seek out the underperformers in these key metrics, relative to current expectations and rating levels, and take appropriate rating actions," says Moody's Snider. * S&P Lowers Ratings on 184 Classes of US RMBS from 52 Transaction ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 184 classes of U.S. residential mortgage-backed securities from 52 transactions backed by prime jumbo loan collateral issued in 2006. S&P removed 77 of the lowered ratings from CreditWatch with negative implications. In addition, S&P placed 109 ratings on CreditWatch negative, and one rating remains on CreditWatch negative. Finally, S&P affirmed its ratings on 13 classes and removed them from CreditWatch negative and affirmed its ratings on 1,961 other outstanding U.S. prime jumbo RMBS classes issued in 2006. All of the ratings that were removed from CreditWatch were placed on CreditWatch on March 17, 2008. The classes affected by the negative rating actions represent an issuance amount of approximately $3.485 billion, or about 3.56% of the par amount of U.S. RMBS transactions backed by prime jumbo mortgage loans rated by Standard & Poor's in 2006. 2006-Vintage U.S. Prime Jumbo RMBS Rating Actions The downgrades and CreditWatch placements reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the ratings at their previous levels, given our current projected losses. Loss Assumptions S&P are currently projecting lifetime losses of approximately 0.60%-0.65% of the original principal balance for 2006-vintage U.S. prime jumbo mortgages collateralizing Standard & Poor's rated securities. S&P developed its loss projections by analyzing the geographic locations of the properties, the loan characteristics, and the relative performance expectations for prime jumbo, Alt-A, and subprime originations in 2006, together with pool-by-pool projections based on its foreclosure curve. S&P calculated loss projections for individual transactions by multiplying the current foreclosure amount by the rate of change that the foreclosure curve forecasted for the upcoming periods. Due to current market conditions, S&P are assuming that it will take approximately 18 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. S&P are assuming a loss severity of 23% for U.S. prime jumbo RMBS transactions issued in 2006. Finally, S&P assumed that the loans that are currently REO would be liquidated in equal amounts over the first eight periods and then added that amount to the projected loss from foreclosures. S&P used the 1999 prime jumbo vintage as its benchmark default curve to forecast losses for the 2006 vintage. The 1999 vintage experienced the most stress of any issuance year over the past 10 years (excluding 2006) in terms of foreclosures. S&P expect the losses in 2006 to significantly exceed those experienced in 1999; however, in its opinion, the timing of the losses, and therefore the shape of the loss curve, is more likely to be similar to that of 1999 than to any subsequent year. The lowered ratings reflect S&P's assessment of the creditworthiness of each class and its ability to withstand additional credit deterioration. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base case assumption S&P used in its analysis. For example, one prime jumbo class may have to withstand 150% of our projected loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand losses of approximately 200% of our base case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can generally withstand approximately 350% of our projected loss assumptions under its analysis. The rating actions announced resolve all but one of the CreditWatch placements taken March 17, 2008, on the 2006 U.S. prime jumbo RMBS vintage. S&P's rating on one class remains on CreditWatch. Most of the CreditWatch placements affect 'AAA' rated certificates. Standard & Poor's will assess whether further rating actions are warranted by analyzing available credit enhancement for the certificates relative to the projected losses during the timeframe S&P expect the certificates to be outstanding. Factors Driving RMBS Rating Actions Monthly performance data reveals that delinquencies and foreclosures continue to accumulate at an increasing rate for the 2006 vintage. As of the March 25, 2008, distribution date, serious delinquencies (90-plus days, foreclosures, and REOs) on all U.S. prime jumbo RMBS transactions issued during 2006 were 1.63%, up 68.04% since December 2007. During the same period, cumulative realized losses have increased to 0.03% from 0.01%. In reviewing the 2006 prime jumbo RMBS transactions, S&P employed the surveillance assumptions announced on Jan. 15, 2008, which are described in "U.S. RMBS Surveillance, CDO Of ABS Assumptions Revised Amid Defaults, Negative Housing Outlook." S&P believe that the application of expected lifetime losses has become appropriate as the depth and duration of the housing downturn continues to increase. S&P lowered the ratings on those classes with expected lifetime losses that exceeded the credit enhancement available to 'CCC'. In addition, S&P lowered its ratings on many of the 2006-vintage certificates that were previously rated 'B' and 'CCC' and its ratings on various pools with extraordinarily high levels of severely delinquent loans to 'CC', as its analysis revealed that these classes have a greater likelihood of default in the near future. The extent to which S&P adjusted the ratings was based on its view of each class' ability to withstand losses in excess of our projections. The table below details the classes with ratings lowered and ratings placed on CreditWatch negative as a percentage of the original balance of the total issuance amount affected ($3.485 billion). 2006 Vintage U.S. Prime Jumbo RMBS Total actions (%) Rating Downgrades CreditWatch negative ------ ---------- -------------------- AAA 0.00 79.96 AA+ 0.00 0.36 AA 3.13 1.89 AA- 0.18 0.00 A+ 0.10 0.00 A 2.99 0.00 A- 0.27 0.00 BBB+ 0.14 0.00 BBB 2.65 0.00 BBB- 0.23 0.00 BB+ 0.14 0.00 BB 3.21 0.00 BB- 0.63 0.00 B+ 0.00 0.00 B 4.01 0.00 B- 0.10 0.00 CCC 0.00 0.00 Total 17.79 82.21 Standard & Poor's considers the actions, except for the CreditWatch placements, to be S&P's last major changes to the ratings assigned to U.S. prime jumbo RMBS issued during 2006. S&P expect to resolve the remaining CreditWatch placements over the next several weeks. S&P are reviewing the 2005 prime jumbo vintage next and expect to announce the results of its analysis within the next week. S&P will review the first-half 2007 vintage U.S. prime jumbo RMBS transactions over the next few weeks. * S&P Downgrades Ratings on 272 Classes From 56 RMBS Transactions ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 272 classes from 56 residential mortgage-backed securities transactions backed by U.S. subprime mortgage loan collateral issued in 2007. At the same time, S&P removed 197 of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on 236 classes from 62 RMBS transactions backed by U.S. subprime loans and removed them from CreditWatch negative. The downgrades reflect its opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given its current projected losses. S&P calculated its projected deal-specific losses by reviewing the individual loan- level characteristics and most recent performance data, as described in. Due to current market conditions, S&P are assuming that it will take approximately 15 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. In addition, S&P are assuming a loss severity of approximately 45% for U.S. subprime RMBS transactions issued in 2007. The lowered ratings reflect S&P's assessment of credit support under two constant prepayment rate scenarios. The first scenario utilizes the lower of the lifetime or 12-month CPR, while the second utilizes a six-month CPR, which is very slow by historical standards. S&P assumed a constant default rate for each pool. Because the analysis focused on each individual class with varying maturities, prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates. Standard & Poor's has updated its projected excess spread to account for the recent cuts in U.S. interest rates. Standard & Poor's recently announced that it will discount a portion of excess spread to account for potential interest rate modifications in an upwardly sloping mortgage rate environment. An interest rate modification may extend the initial fixed-rate period of a mortgage loan to five years from two and three years. The reduction in interest rates has effectively extended the initial interest rates beyond the interest rate reset period. As a result of the reduction in excess spread, many loan modifications may no longer be needed. Standard & Poor's has updated its assumptions on excess spread to reflect the current environment. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. For mortgage pools that are continuing to show increasing delinquencies, S&P increased its cash flow stresses to account for potential increases in monthly losses. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base case assumption S&P assumed in its analysis. For example, a class may have to withstand 115% of S&P's base case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand 125% of S&P's base case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of its base case loss assumptions under its analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 90% of the current pool balances. A combination of subordination, excess spread, and overcollateralization provide credit support for the affected transactions. The underlying collateral for these deals consists of fixed- and adjustable-rate U.S. subprime mortgage loans that are secured by first and second liens on one- to four-family residential properties. To date, including the classes and actions on both publicly and confidentially rated classes, S&P have resolved the CreditWatch placements of the ratings on 2,321 classes from 392 U.S. subprime RMBS transactions from the 2006 and 2007 vintages. Currently, S&P's ratings on 847 classes from 134 U.S. RMBS subprime transactions from the 2006 and 2007 vintages are on CreditWatch negative. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Ratings Lowered ACE Securities Corp Home Equity Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE2 M-9 00443PAP4 CC CCC ACE Securities Corp. Home Equity Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-WM1 M-8 004424AN7 CC CCC 2007-WM1 M-9 004424AP2 CC CCC 2007-WM1 M-10 004424AQ0 CC CCC 2007-ASAP1 M-8 00442JAN4 CC CCC 2007-ASAP1 M-9 00442JAP9 CC CCC 2007-HE3 M-5 00442GAK6 CC CCC 2007-HE3 M-6 00442GAL4 CC CCC 2007-HE3 M-7 00442GAM2 CC CCC Asset Backed Securities Corporation Home Equity Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- RFC 2007-HE1 M10 04544RAP0 CC CCC RFC 2007-HE1 M11 04544RAQ8 CC CCC Bear Stearns Asset Backed Securities I Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-FS1 M-10 073855AQ1 CC CCC BNC Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 B1 05569GAQ9 CC CCC 2007-1 B2 05569GAR7 CC CCC Citigroup Mortgage Loan Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-AHL1 M-10 17311VAB5 CC CCC 2007-AHL1 M-11 17311VAC3 CC CCC 2007-AMC2 M-8 17311XAL9 CC CCC 2007-AMC2 M-9 17311XAM7 CC CCC 2007-AMC2 M-10 17311XAU9 CC CCC Home Equity Mortgage Loan Asset Backed Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-B M-9 43710EAQ3 CC CCC 2007-B M-10 43710EAR1 CC CCC 2007-B M-11 43710EAS9 CC CCC Home Equity Mortgage Loan Asset-Backed Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- INABS 2007-A M-9 43710BAP1 CC CCC INABS 2007-A M-10 43710BAQ9 CC CCC INABS 2007-A M-11 43710BAR7 CC CCC HSI Asset Securitization Corporation Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-OPT1 M-10 40431JAQ6 CC CCC IXIS Real Estate Capital Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE1 M6 45073DAK4 CC CCC 2007-HE1 B1 45073DAL2 CC CCC 2007-HE1 B2 45073DAM0 CC CCC 2007-HE1 B3 45073DAN8 CC CCC 2007-HE1 B4 45073DAP3 CC CCC MASTR Asset Backed Securities Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-WMC1 M-4 55275TAJ7 CC CCC 2007-WMC1 M-5 55275TAK4 CC CCC 2007-WMC1 M-6 55275TAL2 CC CCC 2007-WMC1 M-7 55275TAM0 CC CCC Merrill Lynch First Franklin Mortgage Loan Trust 2007-1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 B-3 59023LAP7 CC CCC Merrill Lynch Mortgage Investors Trust 2007-HE1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE1 B-3 59024EAP2 CC CCC Merrill Lynch Mortgage Investors Trust 2007-HE2 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE2 B-3 59024LAP6 CC CCC Morgan Stanley ABS Capital I Inc. Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-NC1 B-4 617505AQ5 CC CCC Morgan Stanley ABS Capital I Inc. Trust 2007-HE2 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE2 B-2 61753EAM2 CC CCC 2007-HE2 B-3 61753EAN0 CC CCC Morgan Stanley ABS Capital I Inc. Trust 2007-HE3 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE3 B-3 617538AN3 CC CCC Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-NC4 B-2 61753EAM2 CC CCC 2007-NC4 B-3 61755EAK4 CC CCC 2007-NC4 B-4 61755EAL2 CC CCC 2007-NC4 B-5 61755EAM0 CC CCC Morgan Stanley Home Equity Loan Trust 2007-1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 B-3 61751QAN5 CC CCC Option One Mortgage Loan Trust 2007-1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 M-9 68400DAQ7 CC CCC 2007-1 M-10 68400DAR5 CC CCC 2007-1 M-11 68400DAS3 CC CCC Option One Mortgage Loan Trust 2007-2 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-2 M-6 68401TAL2 CC CCC 2007-2 M-7 68401TAM0 CC CCC 2007-2 M-8 68401TAN8 CC CCC 2007-2 M-9 68401TAP3 CC CCC Option One Mortgage Loan Trust 2007-6 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-6 M-10 68403KAP0 CC CCC RASC Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-KS3 M-9 74924YAP8 CC CCC Securitized Asset Backed Receivables LLC Trust Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE1 B-1 81377JAM5 CC CCC 2007-HE1 B-2 81377JAN3 CC CCC 2007-HE1 B-3 81377JAP8 CC CCC 2007-BR4 B-3 81378EAM5 CC CCC Soundview Home Loan Trust 2007-WMC1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-WMC1 M-6 83612NAM7 CC CCC 2007-WMC1 M-7 83612NAN5 CC CCC 2007-WMC1 M-8 83612NAP0 CC CCC 2007-WMC1 M-9 83612NAQ8 CC CCC 2007-WMC1 M-10 83612NAR6 CC CCC Structured Asset Securities Corporation Mortgage Loan Trust 2007-MLN1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-MLN1 M9 863613AP0 CC CCC 2007-MLN1 B1 863613AQ8 CC CCC 2007-MLN1 B2 863613AR6 CC CCC WaMu Asset-Backed Certificates WaMu Trust 2007-HE1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE1 M-9 933631AP8 CC CCC 2007-HE1 B-1 933631AQ6 CC CCC 2007-HE1 B-2 933631AR4 CC CCC Washington Mutual Asset Backed Certificates WMABS Trust 2007-HE2 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-HE2 M-8 93934TAM4 CC CCC 2007-HE2 M-9 93934TAN2 CC CCC Washington Mutual Asset-Backed Certificates WMABS Trust WMABS 2007-HE1 Rating ------ Transaction Class CUSIP To From ----------- ----- ----- -- ---- WMABS 2007-HE1 M-9 93935KAN0 CC CCC WMABS 2007-HE1 B-1 93935KAP5 CC CCC WMABS 2007-HE1 B-2 93935KAQ3 CC CCC Ratings Lowered and Removed From CreditWatch Negative ACE Securities Corp Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE2 M-1 A AA+/Watch Neg 2007-HE2 M-2 BB AA+/Watch Neg 2007-HE2 M-3 B AA/Watch Neg 2007-HE2 M-4 B- AA-/Watch Neg ACE Securities Corp. Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-WM1 A-1 A AAA/Watch Neg 2007-WM1 A-2D BBB AA+/Watch Neg 2007-WM1 M-1 B AA/Watch Neg 2007-ASAP1 A-1 A AAA/Watch Neg 2007-ASAP1 A-2D A AAA/Watch Neg 2007-ASAP1 M-1 BB AA+/Watch Neg 2007-ASAP1 M-2 B+ AA+/Watch Neg 2007-ASAP1 M-3 B AA/Watch Neg 2007-ASAP1 M-4 B- AA-/Watch Neg 2007-HE3 A-1 B AA+/Watch Neg 2007-HE3 A-2B B AA+/Watch Neg 2007-HE3 A-2C B AA+/Watch Neg 2007-HE3 A-2D B AA+/Watch Neg Asset Backed Securities Corporation Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- RFC 2007-HE1 M2 A AA/Watch Neg RFC 2007-HE1 M3 BB AA/Watch Neg Bear Stearns Asset Backed Securities I Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-FS1 M-1 A AA+/Watch Neg 2007-FS1 M-2 BB AA/Watch Neg 2007-FS1 M-3 B AA-/Watch Neg 2007-HE3 M-1 BBB AA+/Watch Neg 2007-HE3 M-2 B AA/Watch Neg BNC Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 A-1 A AAA/Watch Neg 2007-1 A5 A AAA/Watch Neg 2007-1 M1 BB AA+/Watch Neg 2007-1 M2 B AA/Watch Neg C-Bass Mortgage Loan Trust 2007-CB2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-CB2 M-3 A AA/Watch Neg 2007-CB2 M-4 BBB AA/Watch Neg 2007-CB2 M-5 BB AA-/Watch Neg C-BASS Trust 2007-CB4 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-CB4 M-4 A AA-/Watch Neg Citigroup Mortgage Loan Trust 2007-AHL1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-AHL1 M-1 BBB AA+/Watch Neg 2007-AHL1 M-2 B AA/Watch Neg 2007-AHL1 M-3 CCC B/Watch Neg Citigroup Mortgage Loan Trust 2007-AMC1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-AMC1 M-1 BBB AA+/Watch Neg 2007-AMC1 M-2 B AA/Watch Neg 2007-AMC1 M-3 B AA-/Watch Neg Citigroup Mortgage Loan Trust 2007-AMC2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-AMC2 A-1 BB AAA/Watch Neg 2007-AMC2 A-2 BB AAA/Watch Neg 2007-AMC2 A-3B BBB AAA/Watch Neg 2007-AMC2 A-3C BB AAA/Watch Neg 2007-AMC2 M-1 B AA-/Watch Neg CWABS Asset-Backed Certificates Trust 2007-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 M-3 A AA/Watch Neg First Franklin Mortgage Loan Trust 2007-FF1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-FF1 A-1 A AAA/Watch Neg 2007-FF1 A-2C AA AAA/Watch Neg 2007-FF1 A-2D A AAA/Watch Neg 2007-FF1 M-1 BB AA+/Watch Neg 2007-FF1 M-2 B AA/Watch Neg 2007-FF1 M-3 B AA-/Watch Neg GSAMP Trust 2007-FM1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-FM1 M-1 A AA+/Watch Neg 2007-FM1 M-2 BB AA-/Watch Neg Home Equity Mortgage Loan Asset Backed Trust 2007-B Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-B 1A-1 A AAA/Watch Neg 2007-B 1A-2 A AAA/Watch Neg 2007-B 2A-4 A AAA/Watch Neg 2007-B M-1 B AA+/Watch Neg 2007-B M-2 CCC AA/Watch Neg Home Equity Mortgage Loan Asset-Backed Trust Rating ------ Transaction Class To From ----------- ----- -- ---- INABS 2007-A 1A A AAA/Watch Neg INABS 2007-A 2A-4a A AAA/Watch Neg INABS 2007-A 2A-4b A AAA/Watch Neg INABS 2007-A M-1 B AA+/Watch Neg INABS 2007-A M-2 CCC AA/Watch Neg INABS 2007-A M-3 CCC B/Watch Neg HSI Asset Securitization Corporation Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-OPT1 M-1 BBB AA+/Watch Neg 2007-OPT1 M-2 B AA/Watch Neg 2007-OPT1 M-3 CCC B/Watch Neg IXIS Real Estate Capital Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 A3 A AAA/Watch Neg 2007-HE1 A4 BB AA+/Watch Neg 2007-HE1 M1 B AA/Watch Neg JPMorgan Mortgage Acquisition Trust 2007-CH4 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-CH4 M-1 A AA+/Watch Neg 2007-CH4 M-2 BB AA/Watch Neg MASTR Asset Backed Securities Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-WMC1 A-1 BB AAA/Watch Neg 2007-WMC1 A-3 A AAA/Watch Neg 2007-WMC1 A-4 BB AAA/Watch Neg 2007-WMC1 A-5 BB AA+/Watch Neg 2007-WMC1 M-1 CCC B/Watch Neg Merrill Lynch First Franklin Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 A-1 BB AAA/Watch Neg 2007-1 A-2C BB AAA/Watch Neg 2007-1 A-2D BB AAA/Watch Neg 2007-1 M-1 B AA+/Watch Neg 2007-1 M-2 CCC AA-/Watch Neg Merrill Lynch Mortgage Investors Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 A-2D AA AAA/Watch Neg 2007-HE1 M-1 BB AA+/Watch Neg 2007-HE2 A-1 A AAA/Watch Neg 2007-HE2 A-2C AA AAA/Watch Neg 2007-HE2 A-2D A AAA/Watch Neg 2007-HE2 M-1 BB AA+/Watch Neg 2007-HE2 M-2 B AA/Watch Neg 2007-HE3 M-1 BBB AA+/Watch Neg 2007-HE3 M-2 B AA/Watch Neg 2007-HE3 M-3 B AA-/Watch Neg Morgan Stanley ABS Capital I Inc. Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-NC1 M-1 BBB AA/Watch Neg 2007-HE1 M-1 A AA+/Watch Neg 2007-HE1 M-2 B AA/Watch Neg 2007-HE1 M-3 CCC B/Watch Neg 2007-HE3 A-1 AA AAA/Watch Neg 2007-HE3 A-2d AA AAA/Watch Neg 2007-HE3 M-1 BB AA+/Watch Neg 2007-HE3 M-2 B AA/Watch Neg 2007-HE2 A-1 AA AAA/Watch Neg 2007-HE2 A-2d AA AAA/Watch Neg 2007-HE2 M-1 BB AA+/Watch Neg 2007-HE2 M-2 B AA-/Watch Neg 2007-NC4 A-1 BB AA/Watch Neg 2007-NC4 A-2b A AA/Watch Neg 2007-NC4 A-2c BB AA/Watch Neg 2007-NC4 A-2d BB AA/Watch Neg Morgan Stanley ABS Capital I Inc. Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE4 A-1 A AAA/Watch Neg 2007-HE4 A-2d A AAA/Watch Neg 2007-HE4 M-1 BB AA/Watch Neg 2007-HE4 M-2 B BB/Watch Neg 2007-HE4 M-3 CCC B/Watch Neg 2007-NC3 M-2 BBB AA/Watch Neg 2007-NC3 M-3 B AA/Watch Neg Morgan Stanley Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 A-4 AA AAA/Watch Neg 2007-1 M-1 BB AA+/Watch Neg 2007-1 M-2 B AA/Watch Neg Nomura Home Equity Loan Inc Home Equity Loan Trust 2007-2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-2 M-1 A AA+/Watch Neg 2007-2 M-2 BBB AA+/Watch Neg 2007-2 M-3 BB AA/Watch Neg 2007-2 M-4 B AA-/Watch Neg Option One Mortgage Loan Trust 2007-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 I-A-1 AA AAA/Watch Neg 2007-1 I-A-2 AA AAA/Watch Neg 2007-1 II-A-4 AA AAA/Watch Neg 2007-1 M-1 B+ AA+/Watch Neg 2007-1 M-2 B AA/Watch Neg 2007-1 M-3 CCC B/Watch Neg Option One Mortgage Loan Trust 2007-2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-2 I-A-1 BB AAA/Watch Neg 2007-2 II-A-1 BB AAA/Watch Neg 2007-2 III-A-3 BB AAA/Watch Neg 2007-2 M-1 B AA+/Watch Neg 2007-2 M-2 CCC BB/Watch Neg 2007-2 M-3 CCC B/Watch Neg Option One Mortgage Loan Trust 2007-5 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-5 M-1 BBB AA+/Watch Neg 2007-5 M-2 B AA/Watch Neg Option One Mortgage Loan Trust 2007-6 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-6 I-A-1 A AAA/Watch Neg 2007-6 II-A-4 A AAA/Watch Neg 2007-6 M-1 BB AA+/Watch Neg 2007-6 M-2 B AA/Watch Neg RASC Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-KS3 A-I-4 AA AAA/Watch Neg 2007-KS3 A-II AA AAA/Watch Neg 2007-KS3 M-1S B AA+/Watch Neg 2007-KS3 M-2S B- AA/Watch Neg 2007-KS4 M-2S A AA/Watch Neg Saxon Asset Securities Trust 2007-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 M-2 BB AA/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-HE1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 A-1 A AA+/Watch Neg 2007-HE1 A-2C AA AA+/Watch Neg 2007-HE1 A-2D BBB AA+/Watch Neg 2007-HE1 M-1 B AA-/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-NC1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-NC1 M-1 A AA+/Watch Neg 2007-NC1 M-2 B AA/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-NC2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-NC2 M-2 BB AA/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-BR4 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-BR4 A-1 AA AAA/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-BR3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-BR3 A-1 AA AAA/Watch Neg 2007-BR3 A-2B AA AAA/Watch Neg 2007-BR3 A-2C AA AAA/Watch Neg 2007-BR3 M-1 BB AA+/Watch Neg 2007-BR3 M-2 B+ AA+/Watch Neg 2007-BR3 M-3 B AA/Watch Neg 2007-BR3 M-4 B- AA/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-BR4 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-BR4 A-2B AA AAA/Watch Neg 2007-BR4 A-2C AA AAA/Watch Neg 2007-BR4 M-1 BB AA+/Watch Neg 2007-BR4 M-2 B AA/Watch Neg 2007-BR4 M-3 B- AA-/Watch Neg 2007-BR4 M-4 CCC BB/Watch Neg Soundview Home Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-WMC1 I-A-1 BB AAA/Watch Neg 2007-WMC1 II-A-1 BB AA-/Watch Neg 2007-WMC1 III-A-3 BB AA-/Watch Neg 2007-WMC1 III-A-4 BB AA-/Watch Neg 2007-WMC1 M-1 CCC B/Watch Neg Specialty Underwriting and Residential Finance Trust 2007-AB1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-AB1 M-1 AA AA+/Watch Neg 2007-AB1 M-2 A AA+/Watch Neg 2007-AB1 M-3 BBB AA/Watch Neg 2007-AB1 M-4 BB AA-/Watch Neg Structured Asset Securities Corporation Mortgage Loan Trust 2007-BC1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-BC1 M1 A AA+/Watch Neg 2007-BC1 M2 BB AA/Watch Neg Structured Asset Securities Corporation Mortgage Loan Trust 2007-MLN1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-MLN1 A1 A AAA/Watch Neg 2007-MLN1 A5 A AAA/Watch Neg 2007-MLN1 M1 B AA+/Watch Neg WaMu Asset-Backed Certificates WaMu Trust 2007-HE1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 I-A BBB AAA/Watch Neg 2007-HE1 II-A3 A AAA/Watch Neg 2007-HE1 II-A4 BBB AAA/Watch Neg 2007-HE1 M-1 BB AA+/Watch Neg 2007-HE1 M-2 B AA/Watch Neg 2007-HE4 M-1 AA AA+/Watch Neg 2007-HE4 M-2 BBB AA/Watch Neg Washington Mutual Asset Backed Certificates WMABS Trust 2007-HE2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE2 I-A A AAA/Watch Neg 2007-HE2 II-A-2 A AAA/Watch Neg 2007-HE2 II-A-3 BBB AAA/Watch Neg 2007-HE2 M-1 BB AA+/Watch Neg 2007-HE2 M-2 B AA/Watch Neg Washington Mutual Asset-Backed Certificates WMABS Trust WMABS 2007-HE1 Rating ------ Transaction Class To From ----------- ----- -- ---- WMABS 2007-HE1 I-A AA AAA/Watch Neg WMABS 2007-HE1 II-A-2 AA AAA/Watch Neg WMABS 2007-HE1 II-A-3 AA AAA/Watch Neg WMABS 2007-HE1 M-1 B AA/Watch Neg WMABS 2007-HE1 M-2 B- AA-/Watch Neg Ratings Affirmed and Removed From CreditWatch Negative ACE Securities Corp Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE2 A-1 AAA AAA/Watch Neg 2007-HE2 A-2A AAA AAA/Watch Neg 2007-HE2 A-2B AAA AAA/Watch Neg 2007-HE2 A-2C AAA AAA/Watch Neg 2007-HE2 A-2D AAA AAA/Watch Neg ACE Securities Corp. Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-WM1 A-2A AAA AAA/Watch Neg 2007-WM1 A-2B AAA AAA/Watch Neg 2007-WM1 A-2C AAA AAA/Watch Neg 2007-ASAP1 A-2A AAA AAA/Watch Neg 2007-ASAP1 A-2B AAA AAA/Watch Neg 2007-ASAP1 A-2C AAA AAA/Watch Neg 2007-HE3 A-2A AA+ AA+/Watch Neg Asset Backed Securities Corporation Home Equity Loan Trust RFC 2007-HE1 Rating ------ Transaction Class To From ----------- ----- -- ---- RFC 2007-HE1 A1A AAA AAA/Watch Neg RFC 2007-HE1 A1B AAA AAA/Watch Neg RFC 2007-HE1 A2 AAA AAA/Watch Neg RFC 2007-HE1 A3 AAA AAA/Watch Neg RFC 2007-HE1 A4 AAA AAA/Watch Neg RFC 2007-HE1 A5 AAA AAA/Watch Neg RFC 2007-HE1 M1 AA+ AA+/Watch Neg RFC 2007-HE1 M4 B B/Watch Neg Bear Stearns Asset Backed Securities I Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-FS1 I-A-1 AAA AAA/Watch Neg 2007-FS1 I-A-2 AAA AAA/Watch Neg 2007-FS1 I-A-3 AAA AAA/Watch Neg 2007-FS1 I-A-4 AAA AAA/Watch Neg 2007-FS1 II-A AAA AAA/Watch Neg 2007-HE3 I-A-1 AAA AAA/Watch Neg 2007-HE3 I-A-2 AAA AAA/Watch Neg 2007-HE3 I-A-3 AAA AAA/Watch Neg 2007-HE3 I-A-4 AAA AAA/Watch Neg 2007-HE3 II-A AAA AAA/Watch Neg 2007-HE3 III-A AAA AAA/Watch Neg 2007-HE3 M-3 B B/Watch Neg BNC Mortgage Loan Trust 2007-1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 A2 AAA AAA/Watch Neg 2007-1 A3 AAA AAA/Watch Neg 2007-1 A4 AAA AAA/Watch Neg 2007-1 M3 B B/Watch Neg C-Bass Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-CB2 A-1 AAA AAA/Watch Neg 2007-CB2 A2-A AAA AAA/Watch Neg 2007-CB2 A2-B AAA AAA/Watch Neg 2007-CB2 A2-C AAA AAA/Watch Neg 2007-CB2 A2-D AAA AAA/Watch Neg 2007-CB2 A2-E AAA AAA/Watch Neg 2007-CB2 M-1 AA+ AA+/Watch Neg 2007-CB2 M-2 AA+ AA+/Watch Neg 2007-CB3 M-1 AA+ AA+/Watch Neg 2007-CB3 M-2 AA AA/Watch Neg 2007-CB3 M-3 AA- AA-/Watch Neg C-BASS Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-CB4 A-1A AAA AAA/Watch Neg 2007-CB4 A-1B AAA AAA/Watch Neg 2007-CB4 A-1C AAA AAA/Watch Neg 2007-CB4 A-2A AAA AAA/Watch Neg 2007-CB4 A-2B AAA AAA/Watch Neg 2007-CB4 A-2C AAA AAA/Watch Neg 2007-CB4 A-2D AAA AAA/Watch Neg 2007-CB4 M-1 AA+ AA+/Watch Neg 2007-CB4 M-2 AA AA/Watch Neg 2007-CB4 M-3 AA AA/Watch Neg Citigroup Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-AHL1 A-1 AAA AAA/Watch Neg 2007-AHL1 A-2A AAA AAA/Watch Neg 2007-AHL1 A-2B AAA AAA/Watch Neg 2007-AHL1 A-2C AAA AAA/Watch Neg 2007-AMC1 A-1 AAA AAA/Watch Neg 2007-AMC1 A-2A AAA AAA/Watch Neg 2007-AMC1 A-2B AAA AAA/Watch Neg 2007-AMC1 A-2C AAA AAA/Watch Neg 2007-AMC2 A-3A AAA AAA/Watch Neg 2007-AHL2 M-1 AA+ AA+/Watch Neg 2007-AHL2 M-2 AA AA/Watch Neg CWABS Asset Backed Certificates Trust 2007-9 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-9 M-2 AA AA/Watch Neg CWABS Asset-Backed Certificates Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 1-A AAA AAA/Watch Neg 2007-1 2-A-1 AAA AAA/Watch Neg 2007-1 2-A-2 AAA AAA/Watch Neg 2007-1 2-A-3 AAA AAA/Watch Neg 2007-1 2-A-4 AAA AAA/Watch Neg 2007-1 A-R AAA AAA/Watch Neg 2007-1 M-1 AA+ AA+/Watch Neg 2007-1 M-2 AA+ AA+/Watch Neg First Franklin Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-FF1 A-2A AAA AAA/Watch Neg 2007-FF1 A-2B AAA AAA/Watch Neg GSAMP Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-FM1 A-1 AAA AAA/Watch Neg 2007-FM1 A-2A AAA AAA/Watch Neg 2007-FM1 A-2B AAA AAA/Watch Neg 2007-FM1 A-2C AAA AAA/Watch Neg 2007-FM1 A-2D AAA AAA/Watch Neg 2007-FM1 R AAA AAA/Watch Neg 2007-FM1 R-C AAA AAA/Watch Neg 2007-FM1 R-X AAA AAA/Watch Neg 2007-FM1 M-3 B B/Watch Neg Home Equity Mortgage Loan Asset Backed Trust 2007-B Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-B 2A-1 AAA AAA/Watch Neg 2007-B 2A-2 AAA AAA/Watch Neg 2007-B 2A-3 AAA AAA/Watch Neg Home Equity Mortgage Loan Asset-Backed Trust Rating ------ Transaction Class To From ----------- ----- -- ---- INABS 2007-A 2A-1 AAA AAA/Watch Neg INABS 2007-A 2A-2 AAA AAA/Watch Neg INABS 2007-A 2A-3 AAA AAA/Watch Neg HSI Asset Securitization Corporation Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-OPT1 I-A AAA AAA/Watch Neg 2007-OPT1 II-A-1 AAA AAA/Watch Neg 2007-OPT1 II-A-2 AAA AAA/Watch Neg 2007-OPT1 II-A-3 AAA AAA/Watch Neg 2007-OPT1 II-A-4 AAA AAA/Watch Neg IXIS Real Estate Capital Trust 2007-HE1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 A1 AAA AAA/Watch Neg 2007-HE1 A2 AAA AAA/Watch Neg JPMorgan Mortgage Acquisition Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-CH4 A-1 AAA AAA/Watch Neg 2007-CH4 A-2 AAA AAA/Watch Neg 2007-CH4 A-3 AAA AAA/Watch Neg 2007-CH4 A-4 AAA AAA/Watch Neg 2007-CH4 A-5 AAA AAA/Watch Neg MASTR Asset Backed Securities Trust 2007-WMC1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-WMC1 A-2 AAA AAA/Watch Neg Merrill Lynch First Franklin Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 A-2A AAA AAA/Watch Neg 2007-1 A-2B AAA AAA/Watch Neg Merrill Lynch Mortgage Investors Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 A-1 AAA AAA/Watch Neg 2007-HE1 A-2A AAA AAA/Watch Neg 2007-HE1 A-2B AAA AAA/Watch Neg 2007-HE1 A-2C AAA AAA/Watch Neg 2007-HE1 M-2 B B/Watch Neg 2007-HE2 A-2A AAA AAA/Watch Neg 2007-HE2 A-2B AAA AAA/Watch Neg Merrill Lynch Mortgage Investors Trust 2007-HE3 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE3 A-1 AAA AAA/Watch Neg 2007-HE3 A-2 AAA AAA/Watch Neg 2007-HE3 A-3 AAA AAA/Watch Neg 2007-HE3 A-4 AAA AAA/Watch Neg Morgan Stanley ABS Capital I Inc. Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-NC1 A-1 AAA AAA/Watch Neg 2007-NC1 A-2a AAA AAA/Watch Neg 2007-NC1 A-2b AAA AAA/Watch Neg 2007-NC1 A-2c AAA AAA/Watch Neg 2007-NC1 A-2d AAA AAA/Watch Neg 2007-HE1 A-1 AAA AAA/Watch Neg 2007-HE1 A-2fpt AAA AAA/Watch Neg 2007-HE1 A-2a AAA AAA/Watch Neg 2007-HE1 A-2b AAA AAA/Watch Neg 2007-HE1 A-2c AAA AAA/Watch Neg 2007-HE1 A-2d AAA AAA/Watch Neg 2007-HE3 A-2a AAA AAA/Watch Neg 2007-HE3 A-2b AAA AAA/Watch Neg 2007-HE3 A-2c AAA AAA/Watch Neg 2007-HE2 A-2a AAA AAA/Watch Neg 2007-HE2 A-2b AAA AAA/Watch Neg 2007-HE2 A-2c AAA AAA/Watch Neg 2007-NC4 A-2a AA AA/Watch Neg Morgan Stanley ABS Capital I Inc. Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE4 A-2a AAA AAA/Watch Neg 2007-HE4 A-2b AAA AAA/Watch Neg 2007-HE4 A-2c AAA AAA/Watch Neg 2007-NC3 A-1 AAA AAA/Watch Neg 2007-NC3 A-2a AAA AAA/Watch Neg 2007-NC3 A-2b AAA AAA/Watch Neg 2007-NC3 A-2c AAA AAA/Watch Neg 2007-NC3 A-2d AAA AAA/Watch Neg 2007-NC3 M-1 AA+ AA+/Watch Neg Morgan Stanley Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 A-1 AAA AAA/Watch Neg 2007-1 A-2 AAA AAA/Watch Neg 2007-1 A-3 AAA AAA/Watch Neg Nationstar Home Equity Loan Trust 2007-C Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-C M-1 AA+ AA+/Watch Neg 2007-C M-2 AA AA/Watch Neg Nomura Home Equity Loan Inc Home Equity Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-2 I-A-1 AAA AAA/Watch Neg 2007-2 II-A-1 AAA AAA/Watch Neg 2007-2 II-A-2 AAA AAA/Watch Neg 2007-2 II-A-3 AAA AAA/Watch Neg 2007-2 II-A-4 AAA AAA/Watch Neg NovaStar Mortgage Funding Trust 2007-2 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-2 M-1 AA+ AA+/Watch Neg 2007-2 M-2 AA AA/Watch Neg Option One Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 II-A-1 AAA AAA/Watch Neg 2007-1 II-A-2 AAA AAA/Watch Neg 2007-1 II-A-3 AAA AAA/Watch Neg 2007-2 III-A-1 AAA AAA/Watch Neg 2007-2 III-A-2 AAA AAA/Watch Neg Option One Mortgage Loan Trust 2007-5 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-5 I-A-1 AAA AAA/Watch Neg 2007-5 II-A-1 AAA AAA/Watch Neg 2007-5 II-A-2 AAA AAA/Watch Neg 2007-5 II-A-3 AAA AAA/Watch Neg 2007-5 II-A-4 AAA AAA/Watch Neg Option One Mortgage Loan Trust 2007-6 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-6 II-A-1 AAA AAA/Watch Neg 2007-6 II-A-2 AAA AAA/Watch Neg 2007-6 II-A-3 AAA AAA/Watch Neg RASC Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-KS3 A-I-1 AAA AAA/Watch Neg 2007-KS3 A-I-2 AAA AAA/Watch Neg 2007-KS3 A-I-3 AAA AAA/Watch Neg 2007-KS4 A-1 AAA AAA/Watch Neg 2007-KS4 A-2 AAA AAA/Watch Neg 2007-KS4 A-3 AAA AAA/Watch Neg 2007-KS4 A-4 AAA AAA/Watch Neg 2007-KS4 M-1S AA+ AA+/Watch Neg Saxon Asset Securities Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 A-1 AAA AAA/Watch Neg 2007-1 A-2a AAA AAA/Watch Neg 2007-1 A-2b AAA AAA/Watch Neg 2007-1 A-2c AAA AAA/Watch Neg 2007-1 A-2d AAA AAA/Watch Neg 2007-1 M-1 AA+ AA+/Watch Neg 2007-1 M-3 B B/Watch Neg Securitized Asset Backed Receivables LLC Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 A-2A AA+ AA+/Watch Neg 2007-HE1 A-2B AA+ AA+/Watch Neg 2007-NC1 A-1 AAA AAA/Watch Neg 2007-NC1 A-2A AAA AAA/Watch Neg 2007-NC1 A-2B AAA AAA/Watch Neg 2007-NC1 A-2C AAA AAA/Watch Neg 2007-NC2 A-1 AAA AAA/Watch Neg 2007-NC2 A-2A AAA AAA/Watch Neg 2007-NC2 A-2B AAA AAA/Watch Neg 2007-NC2 A-2C AAA AAA/Watch Neg 2007-NC2 M-1 AA+ AA+/Watch Neg 2007-BR4 A-2A AAA AAA/Watch Neg 2007-BR3 A-2A AAA AAA/Watch Neg Soundview Home Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-1 I-A-1 AAA AAA/Watch Neg 2007-1 II-A-1 AAA AAA/Watch Neg 2007-1 II-A-2 AAA AAA/Watch Neg 2007-1 II-A-3 AAA AAA/Watch Neg 2007-1 II-A-4 AAA AAA/Watch Neg 2007-1 M-1 AA+ AA+/Watch Neg 2007-1 M-2 AA AA/Watch Neg 2007-1 M-3 AA- AA-/Watch Neg 2007-WMC1 III-A-1 AA- AA-/Watch Neg 2007-WMC1 III-A-2 AA- AA-/Watch Neg Specialty Underwriting and Residential Finance Trust 2007-BC1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-BC1 M-1 AA+ AA+/Watch Neg 2007-BC1 M-2 AA- AA-/Watch Neg Specialty Underwriting and Residential Finance Trust 2007-AB1 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-AB1 A-1 AAA AAA/Watch Neg 2007-AB1 A-2A AAA AAA/Watch Neg 2007-AB1 A-2B AAA AAA/Watch Neg 2007-AB1 A-2C AAA AAA/Watch Neg 2007-AB1 A-2D AAA AAA/Watch Neg Structured Asset Securities Corporation Mortgage Loan Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-BC1 A1 AAA AAA/Watch Neg 2007-BC1 A2 AAA AAA/Watch Neg 2007-BC1 A3 AAA AAA/Watch Neg 2007-BC1 A4 AAA AAA/Watch Neg 2007-BC1 A5 AAA AAA/Watch Neg 2007-BC1 A6 AAA AAA/Watch Neg 2007-BC1 M3 B B/Watch Neg 2007-MLN1 A2 AAA AAA/Watch Neg 2007-MLN1 A3 AAA AAA/Watch Neg 2007-MLN1 A4 AAA AAA/Watch Neg WaMu Asset-Backed Certificates WaMu Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE1 II-A1 AAA AAA/Watch Neg 2007-HE1 II-A2 AAA AAA/Watch Neg WaMu Asset-Backed Certificates WaMu Trust 2007-HE4 Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE4 I-A AAA AAA/Watch Neg 2007-HE4 II-A1 AAA AAA/Watch Neg 2007-HE4 II-A2 AAA AAA/Watch Neg 2007-HE4 II-A3 AAA AAA/Watch Neg 2007-HE4 II-A4 AAA AAA/Watch Neg Washington Mutual Asset Backed Certificates WMABS Trust Rating ------ Transaction Class To From ----------- ----- -- ---- 2007-HE2 II-A-1 AAA AAA/Watch Neg Washington Mutual Asset-Backed Certificates WMABS Trust Rating ------ Transaction Class To From ----------- ----- -- ---- WMABS 2007-HE1 II-A-1 AAA AAA/Watch Neg * S&P Reports Upgrade Potential Stalls In Rough Credit Environment ------------------------------------------------------------------ The number of entities positioned for upgrades in April was 306, just one more than the low of 305 in September 2004, according to an article published by Standard & Poor's. The report says that the current count is 24 fewer than the number in February and 85 fewer than 12 months ago. "We expect that the deceleration in potential bond upgrades this month will likely diminish further as factors that support upward momentum weaken in response to the credit environment's decisive turn for the worse," said Diane Vazza, head of Standard & Poor's Global Fixed Income Group. "The credit deterioration in the U.S. compared with 12 months ago is largely the reason for the drop in issuers poised for upgrades." Within nonfinancials, the metals, mining, and steel and telecommunications sectors are especially well placed for upgrades. Issuers in these sectors have a positive bias that exceeds the historical average, highlighting the likelihood that companies within these sectors will be upgraded in the relatively near future. Ms. Vazza added, "On a comparative scale, potential bond upgrades no longer outpace potential bond downgrades, as the credit market dislocation that began last July clearly applied downward pressure on credit ratings." * S&P Halts Rating Process for Closed-End Second-Lien Loans ------------------------------------------------------------ After reviewing and analyzing the performance data available for U.S. closed-end second-lien mortgage loans and the related residential mortgage-backed securities, Standard & Poor's Ratings Services believes that this market segment does not allow for a meaningful analysis of new issuance and securitization. The magnitude of S&P's recent rating actions and projected losses on the 2007 U.S. CES vintage transactions reflect an unprecedented level of loan performance deterioration. As a result, S&P will not rate any new U.S. RMBS CES transactions or any transactions that contain CES mortgage loans. Standard & Poor's surveillance methodology and assumptions for U.S. RMBS CES transactions are based on transaction-specific credit performance in terms of actual cumulative losses and delinquencies, together with projected losses for outstanding issues. S&P will continue to apply its current performance-based surveillance methodology to outstanding U.S. RMBS CES. S&P will evaluate any proposed re-REMIC transactions that may consist partly of CES on a case-by-case basis. * BOND PRICING: For the Week of Apr. 28 - May 2, 2008 ----------------------------------------------------- Issuer Coupon Maturity Bid Price ------ ------ -------- --------- ADVANTA CAP TR 8.99% 12/17/2026 69 AIRTRAN HOLDINGS 7.00% 7/1/2023 72 ALERIS INTL INC 10.00% 12/15/2016 64 ALESCO FINANCIAL 7.63% 5/15/2027 53 ALION SCIENCE 10.25% 2/1/2015 64 ALLEGIANCE TEL 11.75% 2/15/2008 7 ALLEGIANCE TEL 12.88% 5/15/2008 7 ALLTEL CORP 6.50% 11/1/2013 78 ALLTEL CORP 7.00% 3/15/2016 74 ALLTEL CORP 6.80% 5/1/2029 67 ALLTEL CORP 7.88% 7/1/2032 67 AM AIRLN EQ TRST 10.68% 3/4/2013 65 AMBAC INC 7.50% 5/1/2023 71 AMBAC INC 5.95% 12/5/2035 61 AMBAC INC 6.15% 2/7/2087 36 AMBASSADORS INTL 3.75% 4/15/2027 46 AMD 5.75% 8/15/2012 76 AMD 6.00% 5/1/2015 63 AMD 6.00% 5/1/2015 68 AMER & FORGN PWR 5.00% 3/1/2030 52 AMER MEDIA OPER 10.25% 5/1/2009 74 AMER TISSUE INC 12.50% 7/15/2006 0 AMERICAN AIRLINE 9.73% 9/29/2014 72 AMERICAN AIRLINE 8.39% 1/2/2017 68 AMERICREDIT CORP 0.75% 9/15/2011 70 AMERICREDIT CORP 2.13% 9/15/2013 65 AMES TRUE TEMPER 10.00% 7/15/2012 55 AMR CORP 9.20% 1/30/2012 70 AMR CORP 9.00% 9/15/2016 73 AMR CORP 9.88% 6/15/2020 69 AMR CORP 10.00% 4/15/2021 67 ANTIGENICS 5.25% 2/1/2025 45 ASHTON WOODS USA 9.50% 10/1/2015 54 ASPECT MEDICAL 2.50% 6/15/2014 54 ASPECT MEDICAL 2.50% 6/15/2014 57 ASSURED GUARANTY 6.40% 12/15/2066 74 AT HOME CORP 4.75% 12/15/2006 0 ATHEROGENICS INC 4.50% 9/1/2008 52 ATHEROGENICS INC 4.50% 3/1/2011 11 ATHEROGENICS INC 1.50% 2/1/2012 10 AVENTINE RENEW 10.00% 4/1/2017 64 BALLY TOTAL FITN 13.00% 7/15/2011 66 BANK NEW ENGLAND 8.75% 4/1/1999 8 BANK NEW ENGLAND 9.88% 9/15/1999 7 BANK OF AMER CRP 4.50% 6/15/2028 78 BANKUNITED CAP 3.13% 3/1/2034 46 BEAR STEARNS CO 6.00% 5/15/2037 84 BEARINGPOINT INC 3.10% 12/15/2024 43 BEARINGPOINT INC 4.10% 12/15/2024 41 BEAZER HOMES USA 6.88% 7/15/2015 80 BELL MICROPRODUC 3.75% 3/5/2024 70 BON-TON DEPT STR 10.25% 3/15/2014 83 BORDEN INC 8.38% 4/15/2016 70 BORDEN INC 9.20% 3/15/2021 56 BORDEN INC 7.88% 2/15/2023 57 BORLAND SOFTWARE 2.75% 2/15/2012 68 BOWATER INC 9.50% 10/15/2012 62 BOWATER INC 6.50% 6/15/2013 60 BOWATER INC 9.38% 12/15/2021 58 BRODER BROS CO 11.25% 10/15/2010 71 BUDGET GROUP INC 9.13% 4/1/2006 0 BUFFETS INC 12.50% 11/1/2014 3 BURLINGTON NORTH 3.20% 1/1/2045 54 CAPITALSOURCE 3.50% 7/15/2034 70 CARAUSTAR INDS 7.38% 6/1/2009 71 CCH I LLC 11.13% 1/15/2014 57 CCH I LLC 9.92% 4/1/2014 58 CCH I LLC 10.00% 5/15/2014 57 CELL GENESYS INC 3.13% 11/1/2011 74 CHARMING SHOPPES 1.13% 5/1/2014 62 CHARTER COMM HLD 11.13% 1/15/2011 66 CHARTER COMM HLD 10.00% 5/15/2011 63 CHARTER COMM HLD 11.75% 5/15/2011 63 CHARTER COMM LP 5.88% 11/16/2009 67 CHARTER COMM LP 6.50% 10/1/2027 55 CHEMED CORP 1.88% 5/15/2014 73 CHENIERE ENERGY 2.25% 8/1/2012 62 CHIC EAST ILL RR 5.00% 1/1/2054 61 CHS ELECTRONICS 9.88% 4/15/2005 100 CIT GROUP INC 5.00% 11/15/2009 71 CIT GROUP INC 4.70% 12/15/2009 75 CIT GROUP INC 6.50% 3/15/2011 72 CIT GROUP INC 5.20% 9/15/2011 69 CIT GROUP INC 5.25% 11/15/2011 69 CIT GROUP INC 5.38% 8/15/2015 73 CIT GROUP INC 5.95% 9/15/2016 70 CIT GROUP INC 6.05% 9/15/2016 69 CIT GROUP INC 6.00% 11/15/2016 72 CIT GROUP INC 5.80% 12/15/2016 69 CIT GROUP INC 6.25% 11/15/2017 64 CIT GROUP INC 6.15% 9/15/2021 73 CIT GROUP INC 6.25% 9/15/2021 70 CIT GROUP INC 6.10% 11/15/2021 73 CIT GROUP INC 6.25% 11/15/2021 68 CIT GROUP INC 6.10% 3/15/2067 58 CITIZENS UTIL CO 7.05% 10/1/2046 68 CLAIRE'S STORES 9.25% 6/1/2015 70 CLAIRE'S STORES 9.63% 6/1/2015 61 CLAIRE'S STORES 10.50% 6/1/2017 56 CLEAR CHANNEL 5.50% 9/15/2014 65 CLEAR CHANNEL 4.90% 5/15/2015 67 CLEAR CHANNEL 5.50% 12/15/2016 62 CLEAR CHANNEL 6.88% 6/15/2018 65 CLEAR CHANNEL 7.25% 10/15/2027 64 CMP SUSQUEHANNA 9.88% 5/15/2014 72 COLOR TILE INC 10.75% 12/15/2001 100 COLUMBIA/HCA 7.50% 11/15/2095 74 COMERICA CAP TR 6.58% 2/20/2037 69 COMPLETE MGMT 8.00% 8/15/2003 100 COMPUCREDIT 3.63% 5/30/2025 41 COMPUCREDIT 5.88% 11/30/2035 39 CONEXANT SYSTEMS 4.00% 3/1/2026 70 CONSTAR INTL 11.00% 12/1/2012 61 COUNTRYWIDE FINL 5.00% 5/11/2015 75 COUNTRYWIDE FINL 5.25% 5/11/2020 64 COUNTRYWIDE FINL 5.25% 5/27/2020 71 COUNTRYWIDE FINL 6.03% 8/25/2020 N.A. COUNTRYWIDE FINL 6.00% 3/23/2021 73 COUNTRYWIDE FINL 6.00% 4/6/2021 N.A. COUNTRYWIDE FINL 6.00% 4/13/2021 64 COUNTRYWIDE FINL 6.13% 4/26/2021 68 COUNTRYWIDE FINL 6.00% 3/16/2026 65 COUNTRYWIDE FINL 6.00% 11/22/2030 68 COUNTRYWIDE FINL 5.75% 1/24/2031 66 COUNTRYWIDE FINL 5.80% 1/27/2031 64 COUNTRYWIDE FINL 6.00% 11/14/2035 71 COUNTRYWIDE FINL 6.00% 12/14/2035 70 COUNTRYWIDE FINL 6.00% 2/8/2036 65 COUNTRYWIDE FINL 6.30% 4/28/2036 64 COUNTRYWIDE HOME 5.90% 1/24/2018 66 COUNTRYWIDE HOME 6.00% 1/24/2018 85 COUNTRYWIDE HOME 5.50% 5/16/2018 73 COUNTRYWIDE HOME 6.00% 5/16/2023 80 COUNTRYWIDE HOME 6.15% 6/25/2029 72 COUNTRYWIDE HOME 6.20% 7/16/2029 72 COUNTRYWIDE HOME 6.00% 7/23/2029 74 CV THERAPEUTICS 3.25% 8/16/2013 74 DECODE GENETICS 3.50% 4/15/2011 40 DECODE GENETICS 3.50% 4/15/2011 53 DELPHI CORP 6.50% 8/15/2013 35 DELPHI CORP 8.25% 10/15/2033 25 DELPHI CORP 6.20% 11/15/2033 20 DELTA AIR LINES 9.88% 4/30/2008 49 DELTA AIR LINES 8.00% 12/1/2015 58 DELTA AIR LINES 10.50% 4/30/2016 49 DELTA MILLS INC 9.63% 9/1/2007 10 DILLARDS INC 7.00% 12/1/2028 71 DURA OPERATING 9.00% 5/1/2009 0 DURA OPERATING 8.63% 4/15/2012 10 EMPIRE GAS CORP 9.00% 12/31/2007 0 ENCORE CAPITAL 3.38% 9/19/2010 69 EQUISTAR CHEMICA 7.55% 2/15/2026 68 FEDDERS NORTH AM 9.88% 3/1/2014 5 FGIC CORP 6.00% 1/15/2034 N.A. FIBERTOWER CORP 9.00% 11/15/2012 71 FIFTH THIRD CAP 6.50% 4/15/2037 70 FINLAY FINE JWLY 8.38% 6/1/2012 40 FINOVA GROUP 7.50% 11/15/2009 13 FIRST DATA CORP 5.63% 11/1/2011 63 FIRST DATA CORP 4.70% 8/1/2013 55 FIRST DATA CORP 4.85% 10/1/2014 45 FIRST DATA CORP 4.95% 6/15/2015 55 FIVE STAR QUALIT 3.75% 10/15/2026 72 FIVE STAR QUALIT 3.75% 10/15/2026 70 FONTAINEBLEAU LA 10.25% 6/15/2015 73 FORD HOLDINGS 9.38% 3/1/2020 84 FORD MOTOR CO 6.50% 8/1/2018 75 FORD MOTOR CO 7.13% 11/15/2025 67 FORD MOTOR CO 7.50% 8/1/2026 70 FORD MOTOR CO 6.63% 2/15/2028 67 FORD MOTOR CO 6.63% 10/1/2028 66 FORD MOTOR CO 6.38% 2/1/2029 63 FORD MOTOR CO 7.45% 7/16/2031 76 FORD MOTOR CO 7.75% 6/15/2043 67 FORD MOTOR CO 7.40% 11/1/2046 66 FORD MOTOR CO 7.70% 5/15/2097 66 FORD MOTOR CRED 5.55% 9/20/2011 73 FORD MOTOR CRED 5.40% 10/20/2011 69 FORD MOTOR CRED 5.65% 11/21/2011 72 FORD MOTOR CRED 5.65% 12/20/2011 75 FORD MOTOR CRED 5.70% 1/20/2012 74 FORD MOTOR CRED 5.85% 1/20/2012 72 FORD MOTOR CRED 6.75% 10/21/2013 78 FORD MOTOR CRED 6.55% 12/20/2013 75 FORD MOTOR CRED 5.65% 1/21/2014 69 FORD MOTOR CRED 5.75% 1/21/2014 74 FORD MOTOR CRED 5.75% 2/20/2014 67 FORD MOTOR CRED 5.75% 2/20/2014 75 FORD MOTOR CRED 5.90% 2/20/2014 74 FORD MOTOR CRED 6.05% 2/20/2014 68 FORD MOTOR CRED 6.00% 3/20/2014 73 FORD MOTOR CRED 6.00% 3/20/2014 75 FORD MOTOR CRED 6.05% 3/20/2014 74 FORD MOTOR CRED 6.30% 5/20/2014 72 FORD MOTOR CRED 6.65% 6/20/2014 75 FORD MOTOR CRED 6.80% 6/20/2014 74 FORD MOTOR CRED 6.55% 7/21/2014 74 FORD MOTOR CRED 6.00% 11/20/2014 76 FORD MOTOR CRED 6.00% 11/20/2014 76 FORD MOTOR CRED 6.00% 11/20/2014 73 FORD MOTOR CRED 6.05% 12/22/2014 66 FORD MOTOR CRED 6.05% 12/22/2014 74 FORD MOTOR CRED 6.15% 12/22/2014 74 FORD MOTOR CRED 6.15% 1/20/2015 74 FORD MOTOR CRED 6.25% 1/20/2015 68 FORD MOTOR CRED 6.00% 2/20/2015 70 FORD MOTOR CRED 6.05% 2/20/2015 75 FORD MOTOR CRED 6.10% 2/20/2015 70 FORD MOTOR CRED 6.50% 2/20/2015 75 FORD MOTOR CRED 6.20% 3/20/2015 69 FORD MOTOR CRED 6.25% 3/20/2015 66 FORD MOTOR CRED 6.50% 3/20/2015 66 FORD MOTOR CRED 6.80% 3/20/2015 72 FORD MOTOR CRED 7.35% 3/20/2015 68 FORD MOTOR CRED 7.30% 4/20/2015 79 FORD MOTOR CRED 7.35% 9/15/2015 72 FORD MOTOR CRED 7.25% 7/20/2017 69 FORD MOTOR CRED 7.25% 7/20/2017 75 FORD MOTOR CRED 7.40% 8/21/2017 71 FORD MOTOR CRED 7.50% 8/20/2032 71 FRANKLIN BANK 4.00% 5/1/2027 37 FRONTIER AIRLINE 5.00% 12/15/2025 41 FULTON CAP TRUST 6.29% 2/1/2036 72 GENERAL MOTORS 8.25% 7/15/2023 77 GENERAL MOTORS 8.10% 6/15/2024 72 GENERAL MOTORS 7.40% 9/1/2025 70 GENERAL MOTORS 6.75% 5/1/2028 62 GENERAL MOTORS 7.38% 5/23/2048 63 GEORGIA GULF CRP 10.75% 10/15/2016 73 GLOBAL HEALTH SC 11.00% 5/1/2008 0 GLOBAL INDUS LTD 2.75% 8/1/2027 76 GLOBAL INDUS LTD 2.75% 8/1/2027 75 GMAC 7.00% 1/15/2013 75 GMAC 6.25% 3/15/2013 72 GMAC 6.50% 4/15/2013 69 GMAC 5.85% 5/15/2013 57 GMAC 6.10% 5/15/2013 72 GMAC 6.35% 5/15/2013 74 GMAC 6.50% 5/15/2013 75 GMAC 5.70% 6/15/2013 69 GMAC 5.85% 6/15/2013 71 GMAC 5.85% 6/15/2013 71 GMAC 5.85% 6/15/2013 69 GMAC 6.50% 6/15/2013 72 GMAC 6.00% 7/15/2013 71 GMAC 6.25% 7/15/2013 67 GMAC 6.38% 8/1/2013 77 GMAC 6.50% 8/15/2013 63 GMAC 6.15% 9/15/2013 66 GMAC 5.70% 10/15/2013 70 GMAC 6.25% 10/15/2013 66 GMAC 6.30% 10/15/2013 75 GMAC 6.00% 11/15/2013 69 GMAC 6.10% 11/15/2013 70 GMAC 6.15% 11/15/2013 72 GMAC 6.20% 11/15/2013 70 GMAC 6.25% 11/15/2013 71 GMAC 6.30% 11/15/2013 73 GMAC 6.50% 11/15/2013 72 GMAC 5.70% 12/15/2013 67 GMAC 5.90% 12/15/2013 65 GMAC 5.90% 12/15/2013 71 GMAC 6.00% 12/15/2013 71 GMAC 6.15% 12/15/2013 69 GMAC 5.25% 1/15/2014 69 GMAC 5.35% 1/15/2014 70 GMAC 5.75% 1/15/2014 68 GMAC 6.70% 5/15/2014 70 GMAC 6.70% 5/15/2014 65 GMAC 6.70% 6/15/2014 68 GMAC 6.75% 6/15/2014 74 GMAC 8.40% 8/15/2015 71 GMAC 8.50% 8/15/2015 69 GMAC 6.75% 7/15/2016 72 GMAC 6.60% 8/15/2016 63 GMAC 6.70% 8/15/2016 67 GMAC 6.75% 8/15/2016 69 GMAC 6.88% 8/15/2016 67 GMAC 6.75% 9/15/2016 71 GMAC 7.38% 11/15/2016 68 GMAC 7.50% 11/15/2016 70 GMAC 6.75% 6/15/2017 66 GMAC 6.90% 6/15/2017 70 GMAC 6.95% 6/15/2017 68 GMAC 7.00% 6/15/2017 64 GMAC 7.00% 7/15/2017 68 GMAC 7.50% 8/15/2017 72 GMAC 7.25% 9/15/2017 71 GMAC 7.25% 9/15/2017 68 GMAC 7.25% 9/15/2017 71 GMAC 7.25% 9/15/2017 68 GMAC 7.13% 10/15/2017 71 GMAC 7.20% 10/15/2017 67 GMAC 7.20% 10/15/2017 72 GMAC 7.75% 10/15/2017 71 GMAC 8.00% 10/15/2017 73 GMAC 7.50% 11/15/2017 74 GMAC 7.50% 11/15/2017 74 GMAC 8.00% 11/15/2017 74 GMAC 7.30% 12/15/2017 65 GMAC 7.40% 12/15/2017 67 GMAC 7.50% 12/15/2017 68 GMAC 7.50% 12/15/2017 70 GMAC 7.25% 1/15/2018 63 GMAC 7.30% 1/15/2018 66 GMAC 7.30% 1/15/2018 71 GMAC 7.00% 2/15/2018 61 GMAC 7.00% 2/15/2018 70 GMAC 7.00% 2/15/2018 70 GMAC 6.75% 3/15/2018 64 GMAC 7.00% 3/15/2018 67 GMAC 7.05% 3/15/2018 65 GMAC 7.05% 3/15/2018 69 GMAC 7.05% 4/15/2018 68 GMAC 7.25% 4/15/2018 67 GMAC 7.25% 4/15/2018 65 GMAC 7.35% 4/15/2018 67 GMAC 7.38% 4/15/2018 73 GMAC 6.60% 5/15/2018 63 GMAC 6.85% 5/15/2018 65 GMAC 7.00% 5/15/2018 65 GMAC 6.50% 6/15/2018 65 GMAC 6.65% 6/15/2018 66 GMAC 6.70% 6/15/2018 63 GMAC 6.75% 7/15/2018 72 GMAC 6.70% 6/15/2018 67 GMAC 6.88% 7/15/2018 65 GMAC 6.90% 7/15/2018 68 GMAC 6.90% 8/15/2018 67 GMAC 7.00% 8/15/2018 67 GMAC 7.25% 8/15/2018 67 GMAC 7.25% 8/15/2018 67 GMAC 6.75% 9/15/2018 67 GMAC 6.80% 9/15/2018 67 GMAC 7.00% 9/15/2018 64 GMAC 7.15% 9/15/2018 65 GMAC 7.25% 9/15/2018 64 GMAC 6.65% 10/15/2018 63 GMAC 6.65% 10/15/2018 64 GMAC 6.75% 10/15/2018 64 GMAC 6.80% 10/15/2018 65 GMAC 6.50% 11/15/2018 62 GMAC 6.70% 11/15/2018 64 GMAC 6.75% 11/15/2018 64 GMAC 6.25% 12/15/2018 64 GMAC 6.40% 12/15/2018 65 GMAC 6.50% 12/15/2018 62 GMAC 6.50% 12/15/2018 66 GMAC 5.90% 1/15/2019 60 GMAC 5.90% 1/15/2019 63 GMAC 6.25% 1/15/2019 61 GMAC 5.90% 2/15/2019 60 GMAC 6.00% 2/15/2019 61 GMAC 6.00% 2/15/2019 62 GMAC 6.00% 2/15/2019 64 GMAC 6.00% 3/15/2019 61 GMAC 6.00% 3/15/2019 61 GMAC 6.00% 3/15/2019 60 GMAC 6.00% 3/15/2019 64 GMAC 6.00% 3/15/2019 65 GMAC 6.00% 4/15/2019 61 GMAC 6.20% 4/15/2019 63 GMAC 6.25% 4/15/2019 62 GMAC 6.35% 4/15/2019 63 GMAC 6.25% 5/15/2019 59 GMAC 6.50% 5/15/2019 62 GMAC 6.75% 5/15/2019 67 GMAC 6.75% 5/15/2019 65 GMAC 6.60% 6/15/2019 63 GMAC 6.60% 6/15/2019 61 GMAC 6.70% 6/15/2019 64 GMAC 6.75% 6/15/2019 60 GMAC 6.75% 6/15/2019 62 GMAC 6.25% 7/15/2019 63 GMAC 6.35% 7/15/2019 63 GMAC 6.35% 7/15/2019 61 GMAC 6.05% 8/15/2019 59 GMAC 6.05% 8/15/2019 61 GMAC 6.15% 8/15/2019 61 GMAC 6.30% 8/15/2019 59 GMAC 6.30% 8/15/2019 61 GMAC 6.00% 9/15/2019 59 GMAC 6.00% 9/15/2019 63 GMAC 6.10% 9/15/2019 67 GMAC 6.15% 9/15/2019 60 GMAC 5.90% 10/15/2019 59 GMAC 6.05% 10/15/2019 58 GMAC 6.13% 10/15/2019 62 GMAC 6.15% 10/15/2019 60 GMAC 6.40% 11/15/2019 65 GMAC 6.40% 11/15/2019 64 GMAC 6.55% 12/15/2019 66 GMAC 6.70% 12/15/2019 63 GMAC 6.50% 1/15/2020 59 GMAC 6.50% 2/15/2020 68 GMAC 6.65% 2/15/2020 61 GMAC 6.75% 3/15/2020 64 GMAC 7.00% 2/15/2021 66 GMAC 7.00% 9/15/2021 68 GMAC 7.00% 9/15/2021 69 GMAC 7.00% 6/15/2022 66 GMAC 7.00% 11/15/2023 66 GMAC 7.00% 11/15/2024 66 GMAC 7.00% 11/15/2024 69 GMAC 7.00% 11/15/2024 66 GMAC 7.15% 1/15/2025 63 GMAC 7.25% 1/15/2025 66 GMAC 7.25% 2/15/2025 75 GMAC 7.15% 3/15/2025 54 GMAC 7.25% 3/15/2025 64 GMAC 7.50% 3/15/2025 72 GMAC 8.00% 3/15/2025 71 GOLDEN BOOKS PUB 10.75% 12/31/2004 0 GRANCARE INC 9.38% 9/15/2005 0 HARRAHS OPER CO 5.38% 12/15/2013 64 HARRAHS OPER CO 5.63% 6/1/2015 58 HARRAHS OPER CO 6.50% 6/1/2016 61 HARRAHS OPER CO 5.75% 10/1/2017 57 HAWAIIAN TELCOM 9.75% 5/1/2013 47 HAWAIIAN TELCOM 12.50% 5/1/2015 27 HEADWATERS INC 2.50% 2/1/2014 70 HERBST GAMING 8.13% 6/1/2012 23 HERBST GAMING 7.00% 11/15/2014 22 HERCULES INC 6.50% 6/30/2029 75 HERTZ CORP 7.00% 1/15/2028 78 HILTON HOTELS 7.50% 12/15/2017 74 HINES NURSERIES 10.25% 10/1/2011 56 HUMAN GENOME 2.25% 8/15/2012 73 HUNTINGTON CAPIT 6.65% 5/15/2037 68 HUNTINGTON NATL 5.38% 2/28/2019 62 IDEARC INC 8.00% 11/15/2016 65 IKON OFFICE 6.75% 12/1/2025 78 IMPERIAL CREDIT 9.88% 1/15/2007 0 ION MEDIA 11.00% 7/31/2013 22 IRIDIUM LLC/CAP 10.88% 7/15/2005 1 IRIDIUM LLC/CAP 11.25% 7/15/2005 1 IRIDIUM LLC/CAP 13.00% 7/15/2005 1 IRIDIUM LLC/CAP 14.00% 7/15/2005 2 ISOLAGEN INC 3.50% 11/1/2024 15 IT GROUP INC 11.25% 4/1/2009 0 JB POINDEXTER 8.75% 3/15/2014 74 JETBLUE AIRWAYS 3.75% 3/15/2035 76 JONES APPAREL 6.13% 11/15/2034 71 JP MORGAN CHASE 10.00% 7/31/2008 70 JP MORGAN CHASE 9.50% 9/29/2008 70 K HOVNANIAN ENTR 8.88% 4/1/2012 71 K HOVNANIAN ENTR 7.75% 5/15/2013 57 K HOVNANIAN ENTR 6.50% 1/15/2014 70 K HOVNANIAN ENTR 6.38% 12/15/2014 70 K HOVNANIAN ENTR 6.25% 1/15/2015 71 K HOVNANIAN ENTR 6.25% 1/15/2016 71 K HOVNANIAN ENTR 7.50% 5/15/2016 71 K MART FUNDING 8.80% 7/1/2010 1 KAISER ALUMINUM 9.88% 2/15/2002 0 KAISER ALUMINUM 12.75% 2/1/2003 7 KELLSTROM INDS 5.75% 10/15/2002 0 KELLWOOD CO 7.63% 10/15/2017 66 KEMET CORP 2.25% 11/15/2026 68 KEMET CORP 2.25% 11/15/2026 70 KEYSTONE AUTO OP 9.75% 11/1/2013 58 KIMBALL HILL INC 10.50% 12/15/2012 4 KMART 95-K1 PT 8.99% 7/5/2010 0 KMART 95-K2 PT 9.78% 1/5/2020 0 KMART 95-K3 PT 8.54% 1/2/2015 0 KN CAP TRUST III 7.63% 4/15/2028 71 KNIGHT RIDDER 4.63% 11/1/2014 69 KNIGHT RIDDER 5.75% 9/1/2017 70 KNIGHT RIDDER 7.15% 11/1/2027 68 KNIGHT RIDDER 6.88% 3/15/2029 66 KRATON POLYMERS 8.13% 1/15/2014 64 LANDRY'S RESTAUR 7.50% 12/15/2014 82 LAZYDAYS RV 11.75% 5/15/2012 74 LEHMAN BROS HLDG 5.25% 9/14/2019 72 LEHMAN BROS HLDG 5.40% 3/6/2020 71 LEHMAN BROS HLDG 4.80% 6/24/2023 80 LEHMAN BROS HLDG 6.00% 10/23/2028 83 LEHMAN BROS HLDG 5.60% 5/3/2030 68 LEHMAN CAP VII 5.86% 5/3/2030 72 LEINER HEALTH 11.00% 6/1/2012 0 LIBERTY MEDIA 4.00% 11/15/2029 54 LIBERTY MEDIA 3.75% 2/15/2030 52 LIBERTY MEDIA 3.50% 1/15/2031 55 LIBERTY MEDIA 3.25% 3/15/2031 71 LIFECARE HOLDING 9.25% 8/15/2013 46 LIFETIME BRANDS 4.75% 7/15/2011 72 LTV CORP 8.20% 9/15/2007 100 LUCENT TECH 6.50% 1/15/2028 76 MAGNA ENTERTAINM 7.25% 12/15/2009 48 MAGNA ENTERTAINM 8.55% 6/15/2010 55 MAJESTIC STAR 9.75% 1/15/2011 36 MANNKIND CORP 3.75% 12/15/2013 44 MASONITE CORP 11.00% 4/6/2015 68 MBIA INC 7.00% 12/15/2025 79 MBIA INC 5.70% 12/1/2034 67 MEDIANEWS GROUP 6.88% 10/1/2013 48 MEDIANEWS GROUP 6.38% 4/1/2014 46 MERISANT CO 9.50% 7/15/2013 74 MERIX CORP 4.00% 5/15/2013 53 MERRILL LYNCH 10.00% 3/6/2009 N.A. MERRILL LYNCH 11.00% 4/28/2009 N.A. MERRILL LYNCH 12.00% 3/26/2010 N.A. METALDYNE CORP 11.00% 6/15/2012 39 METALDYNE CORP 10.00% 11/1/2013 64 MILACRON ESCROW 11.50% 5/15/2011 75 MILLENNIUM AMER 7.63% 11/15/2026 65 MISSOURI PAC RR 5.00% 1/1/2045 67 MOA HOSPITALITY 8.00% 10/15/2007 75 MOMENTIVE PERFOR 11.50% 12/1/2016 75 MORGAN STANLEY 10.00% 4/20/2009 N.A. MORGAN STANLEY 10.00% 5/20/2009 N.A. MORGAN STANLEY 8.00% 2/23/2037 74 MORRIS PUBLISH 7.00% 8/1/2013 61 MOTOROLA INC 5.22% 10/1/2097 62 MOVIE GALLERY 11.00% 5/1/2012 29 MRS FIELDS 9.00% 3/15/2011 74 NATL FINANCIAL 0.75% 2/1/2012 71 NATL STEEL CORP 8.38% 8/1/2006 0 NEENAH FOUNDRY 9.50% 1/1/2017 69 NEFF CORP 10.00% 6/1/2015 49 NEKTAR THERAPEUT 3.25% 9/28/2012 67 NELNET INC 7.40% 9/29/2036 66 NETWORK COMMUNIC 10.75% 12/1/2013 80 NEW ORL GRT N RR 5.00% 7/1/2032 55 NEW PLAN EXCEL 5.30% 1/15/2015 75 NEW PLAN EXCEL 7.50% 7/30/2029 67 NEW PLAN REALTY 7.97% 8/14/2026 68 NEW PLAN REALTY 7.65% 11/2/2026 66 NEW PLAN REALTY 7.68% 11/2/2026 68 NEW PLAN REALTY 6.90% 2/15/2028 68 NEW PLAN REALTY 6.90% 2/15/2028 68 NEXTEL COMMUNIC 6.88% 10/31/2013 71 NORTEK INC 8.50% 9/1/2014 74 NORTH ATL TRADNG 9.25% 3/1/2012 62 NORTHERN PAC RY 3.00% 1/1/2047 49 NORTHERN PAC RY 3.00% 1/1/2047 51 NORTHERN TEL CAP 7.88% 6/15/2026 69 NORTHWST STL&WIR 9.50% 6/15/2001 0 NTK HOLDINGS INC 0.00% 3/1/2014 44 NUTRITIONAL SRC 10.13% 8/1/2009 13 NUVEEN INVEST 5.50% 9/15/2015 70 OAKWOOD HOMES 7.88% 3/1/2004 4 OCWEN CAP TRST I 10.88% 8/1/2027 75 OMNICARE INC 3.25% 12/15/2035 66 OSCIENT PHARM 3.50% 4/15/2011 41 OUTBOARD MARINE 10.75% 6/1/2008 10 OUTBOARD MARINE 9.13% 4/15/2017 7 OVERSTOCK.COM 3.75% 12/1/2011 71 PAC-WEST TELECOM 13.50% 2/1/2009 0 PALM HARBOR 3.25% 5/15/2024 46 PANOLAM INDUSTRI 10.75% 10/1/2013 70 PANTRY INC 3.00% 11/15/2012 67 PCA LLC/PCA FIN 11.88% 8/1/2009 4 PEGASUS SATELLIT 9.75% 12/1/2006 0 PEGASUS SATELLIT 12.50% 8/1/2007 0 PIERRE FOODS INC 9.88% 7/15/2012 66 PIXELWORKS INC 1.75% 5/15/2024 70 PLY GEM INDS 9.00% 2/15/2012 78 PNC PREFERRED FD 6.11% 2/15/2012 74 POPE & TALBOT 8.38% 6/1/2013 14 PORTOLA PACKAGIN 8.25% 2/1/2012 63 POWERWAVE TECH 1.88% 11/15/2024 63 POWERWAVE TECH 3.88% 10/1/2027 65 PRIMUS TELECOM 5.00% 6/30/2009 56 PRIMUS TELECOM 3.75% 9/15/2010 33 PRIMUS TELECOM 8.00% 1/15/2014 38 PROPEX FABRICS 10.00% 12/1/2012 6 QUALITY DISTRIBU 9.00% 11/15/2010 71 RADIAN GROUP 5.63% 2/15/2013 80 RADIAN GROUP 5.38% 6/15/2015 67 RADNOR HOLDINGS 11.00% 3/15/2010 0 READER'S DIGEST 9.00% 2/15/2017 N.A. REALOGY CORP 10.50% 4/15/2014 76 REALOGY CORP 12.38% 4/15/2015 60 REALTY INCOME 5.88% 3/15/2035 70 REGIONS FIN TR 6.63% 5/15/2047 74 RENTECH INC 4.00% 4/15/2013 51 RESIDENTIAL CAP 8.38% 6/30/2010 58 RESIDENTIAL CAP 8.00% 2/22/2011 53 RESIDENTIAL CAP 8.50% 6/1/2012 55 RESIDENTIAL CAP 8.50% 4/17/2013 55 RESIDENTIAL CAP 8.88% 6/30/2015 55 RESTAURANT CO 10.00% 10/1/2013 66 RF MICRO DEVICES 0.75% 4/15/2012 75 RF MICRO DEVICES 1.00% 4/15/2014 69 RF MICRO DEVICES 1.00% 4/15/2014 69 RH DONNELLEY 6.88% 1/15/2013 65 RH DONNELLEY 6.88% 1/15/2013 63 RH DONNELLEY 6.88% 1/15/2013 63 RH DONNELLEY 8.88% 1/15/2016 64 RH DONNELLEY 8.88% 10/15/2017 64 RICKEL HOME CNTR 13.50% 12/15/2001 0 RITE AID CORP 6.88% 8/15/2013 72 RITE AID CORP 7.70% 2/15/2027 63 RITE AID CORP 6.88% 12/15/2028 N.A. RJ TOWER CORP 12.00% 6/1/2013 1 ROTECH HEALTHCA 9.50% 4/1/2012 78 SCOTIA PAC CO 7.11% 1/20/2014 77 SCOTIA PAC CO 7.71% 1/20/2014 77 SEARS ROEBUCK AC 7.50% 10/15/2027 78 SEARS ROEBUCK AC 6.75% 1/15/2028 71 SEARS ROEBUCK AC 6.50% 12/1/2028 60 SERVICEMASTER CO 7.10% 3/1/2018 60 SERVICEMASTER CO 7.45% 8/15/2027 46 SIX FLAGS INC 9.75% 4/15/2013 66 SIX FLAGS INC 9.63% 6/1/2014 68 SIX FLAGS INC 4.50% 5/15/2015 64 SLM CORP 5.00% 12/15/2013 68 SLM CORP 5.25% 9/15/2015 74 SLM CORP 5.55% 3/15/2018 69 SLM CORP 5.65% 3/15/2018 65 SLM CORP 5.60% 6/15/2018 70 SLM CORP 5.25% 3/15/2019 62 SLM CORP 5.40% 3/15/2019 63 SLM CORP 5.50% 3/15/2019 67 SLM CORP 5.19% 4/24/2019 68 SLM CORP 5.00% 6/15/2019 67 SLM CORP 5.15% 6/15/2019 68 SLM CORP 5.50% 6/15/2019 67 SLM CORP 6.00% 6/15/2019 71 SLM CORP 6.00% 6/15/2019 75 SLM CORP 6.00% 6/15/2019 64 SLM CORP 6.00% 9/15/2019 63 SLM CORP 6.00% 9/15/2019 67 SLM CORP 5.00% 9/15/2020 71 SLM CORP 5.20% 12/15/2020 68 SLM CORP 6.15% 3/10/2021 63 SLM CORP 6.00% 6/15/2021 71 SLM CORP 6.00% 6/15/2021 63 SLM CORP 6.10% 6/15/2021 74 SLM CORP 6.15% 6/15/2021 68 SLM CORP 5.60% 3/15/2022 68 SLM CORP 5.65% 6/15/2022 70 SLM CORP 5.65% 6/15/2022 69 SLM CORP 5.05% 3/15/2023 59 SLM CORP 5.40% 3/15/2023 73 SLM CORP 5.45% 3/15/2023 58 SLM CORP 5.63% 1/25/2025 65 SLM CORP 5.35% 6/15/2025 57 SLM CORP 5.55% 6/15/2025 66 SLM CORP 6.00% 6/15/2026 66 SLM CORP 6.00% 6/15/2026 63 SLM CORP 6.00% 12/15/2026 60 SLM CORP 6.00% 12/15/2026 67 SLM CORP 6.00% 12/15/2026 70 SLM CORP 6.00% 12/15/2026 62 SLM CORP 6.05% 12/15/2026 68 SLM CORP 6.00% 3/15/2027 68 SLM CORP 5.20% 3/15/2028 62 SLM CORP 5.25% 3/15/2028 62 SLM CORP 5.55% 3/15/2028 62 SLM CORP 5.00% 6/15/2028 73 SLM CORP 5.25% 6/15/2028 57 SLM CORP 5.35% 6/15/2028 68 SLM CORP 5.45% 6/15/2028 61 SLM CORP 5.45% 6/15/2028 63 SLM CORP 5.50% 6/15/2028 62 SLM CORP 5.55% 6/15/2028 61 SLM CORP 4.80% 12/15/2028 65 SLM CORP 5.00% 12/15/2028 54 SLM CORP 5.15% 12/15/2028 64 SLM CORP 5.25% 12/15/2028 69 SLM CORP 5.30% 12/15/2028 66 SLM CORP 5.60% 12/15/2028 70 SLM CORP 5.80% 12/15/2028 63 SLM CORP 6.00% 12/15/2028 61 SLM CORP 6.10% 12/15/2028 66 SLM CORP 5.60% 3/15/2029 59 SLM CORP 5.60% 3/15/2029 69 SLM CORP 5.65% 3/15/2029 74 SLM CORP 5.65% 3/15/2029 59 SLM CORP 5.70% 3/15/2029 62 SLM CORP 5.70% 3/15/2029 64 SLM CORP 5.70% 3/15/2029 61 SLM CORP 5.70% 3/15/2029 65 SLM CORP 5.70% 3/15/2029 65 SLM CORP 5.75% 3/15/2029 64 SLM CORP 5.75% 3/15/2029 65 SLM CORP 5.75% 3/15/2029 72 SLM CORP 5.75% 3/15/2029 57 SLM CORP 6.00% 3/15/2029 65 SLM CORP 5.50% 6/15/2029 64 SLM CORP 5.50% 6/15/2029 63 SLM CORP 5.50% 6/15/2029 64 SLM CORP 5.75% 6/15/2029 58 SLM CORP 5.75% 6/15/2029 65 SLM CORP 6.00% 6/15/2029 62 SLM CORP 6.00% 6/15/2029 60 SLM CORP 6.00% 6/15/2029 62 SLM CORP 6.25% 6/15/2029 68 SLM CORP 6.25% 6/15/2029 68 SLM CORP 6.25% 6/15/2029 67 SLM CORP 5.75% 9/15/2029 67 SLM CORP 5.85% 9/15/2029 65 SLM CORP 5.85% 9/15/2029 64 SLM CORP 6.00% 9/15/2029 59 SLM CORP 6.00% 9/15/2029 65 SLM CORP 6.00% 9/15/2029 70 SLM CORP 6.00% 9/15/2029 65 SLM CORP 6.00% 9/15/2029 65 SLM CORP 6.15% 9/15/2029 66 SLM CORP 6.15% 9/15/2029 66 SLM CORP 6.25% 9/15/2029 67 SLM CORP 6.25% 9/15/2029 67 SLM CORP 6.25% 9/15/2029 73 SLM CORP 5.60% 12/15/2029 63 SLM CORP 5.65% 12/15/2029 66 SLM CORP 5.65% 12/15/2029 63 SLM CORP 5.70% 12/15/2029 62 SLM CORP 5.75% 12/15/2029 64 SLM CORP 5.75% 12/15/2029 65 SLM CORP 5.75% 12/15/2029 57 SLM CORP 5.75% 12/15/2029 64 SLM CORP 5.40% 3/15/2030 52 SLM CORP 5.50% 3/15/2030 62 SLM CORP 5.65% 3/15/2030 64 SLM CORP 5.70% 3/15/2030 64 SLM CORP 5.75% 3/15/2030 64 SLM CORP 5.75% 3/15/2030 67 SLM CORP 5.40% 6/15/2030 53 SLM CORP 5.65% 6/15/2030 59 SLM CORP 5.50% 12/15/2030 61 SLM CORP 5.50% 12/15/2030 60 SLM CORP 6.00% 6/15/2031 58 SLM CORP 6.25% 9/15/2031 67 SLM CORP 6.35% 9/15/2031 69 SLM CORP 6.35% 9/15/2031 67 SLM CORP 6.40% 9/15/2031 62 SLM CORP 6.45% 9/15/2031 68 SLM CORP 6.50% 9/15/2031 65 SLM CORP 5.85% 12/15/2031 63 SLM CORP 6.00% 12/15/2031 58 SLM CORP 6.00% 12/15/2031 64 SLM CORP 6.00% 12/15/2031 66 SLM CORP 6.05% 12/15/2031 65 SLM CORP 6.10% 12/15/2031 66 SLM CORP 6.20% 12/15/2031 66 SLM CORP 5.65% 3/15/2032 62 SLM CORP 5.70% 3/15/2032 58 SLM CORP 5.80% 3/15/2032 64 SLM CORP 5.80% 3/15/2032 62 SLM CORP 5.80% 3/15/2032 57 SLM CORP 5.85% 3/15/2032 58 SLM CORP 5.85% 3/15/2032 58 SLM CORP 5.85% 3/15/2032 59 SLM CORP 5.75% 6/15/2032 64 SLM CORP 5.75% 6/15/2032 64 SLM CORP 5.85% 6/15/2032 58 SLM CORP 5.85% 6/15/2032 58 SLM CORP 5.63% 8/1/2033 79 SLM CORP 6.85% 7/7/2036 64 SLM CORP 6.00% 3/15/2037 62 SLM CORP 6.00% 3/15/2037 61 SLM CORP 6.00% 3/15/2037 65 SPANSION LLC 11.25% 1/15/2016 66 SPANSION LLC 2.25% 6/15/2016 51 SPECIAL DEVICES 11.38% 12/15/2008 43 SPECTRUM BRANDS 7.38% 2/1/2015 66 STANDARD PACIFIC 9.25% 4/15/2012 66 STANDARD PACIFIC 7.00% 8/15/2015 76 STANDRD PAC CORP 6.00% 10/1/2012 61 STANDRD PAC CORP 6.25% 4/1/2014 73 STANLEY-MARTIN 9.75% 8/15/2015 45 STATION CASINOS 6.50% 2/1/2014 71 STATION CASINOS 6.88% 3/1/2016 66 STATION CASINOS 6.63% 3/15/2018 62 SURGICAL CARE AF 10.00% 7/15/2017 N.A. SWIFT TRANS CO 12.50% 5/15/2017 N.A. SYNOVUS FINL 5.13% 6/15/2017 92 TENET HEALTHCARE 6.88% 11/15/2031 71 TEXAS UTIL ELEC 8.18% 1/30/2037 75 TIMES MIRROR CO 7.25% 3/1/2013 37 TIMES MIRROR CO 7.50% 7/1/2023 36 TIMES MIRROR CO 6.61% 9/15/2027 35 TIMES MIRROR CO 7.25% 11/15/2096 41 TOM'S FOODS INC 10.50% 11/1/2004 0 TOUSA INC 9.00% 7/1/2010 58 TOUSA INC 9.00% 7/1/2010 55 TOUSA INC 7.50% 3/15/2011 8 TOUSA INC 10.38% 7/1/2012 8 TOUSA INC 7.50% 1/15/2015 9 TOYS R US 7.38% 10/15/2018 74 TRANSMERIDIAN EX 12.00% 12/15/2010 67 TREX CO INC 6.00% 7/1/2012 63 TRIBUNE CO 4.88% 8/15/2010 50 TRIBUNE CO 5.25% 8/15/2015 37 TRUE TEMPER 8.38% 9/15/2011 69 TRUMP ENTERTNMNT 8.50% 6/1/2015 63 UAL 1991 TRUST 10.02% 3/22/2014 48 UAL 1995 TRUST 9.56% 10/19/2018 45 UAL CORP 5.00% 2/1/2021 71 UAL CORP 4.50% 6/30/2021 73 UAL CORP 4.50% 6/30/2021 72 UNIVERSAL STAND 8.25% 2/1/2006 0 US AIR INC 10.90% 1/1/2049 0 US AIR INC 10.55% 1/15/2049 0 US AIR INC 10.70% 1/15/2049 0 USEC INC 3.00% 10/1/2014 63 VERASUN ENERGY 9.38% 6/1/2017 66 VERENIUM CORP 5.50% 4/1/2027 63 VERIFONE HOLDING 1.63% 6/15/2012 73 VERTIS INC 10.88% 6/15/2009 37 VESTA INSUR GRP 8.75% 7/15/2025 2 VICORP RESTAURNT 10.50% 4/15/2011 24 VIROPHARMA INC 2.00% 3/15/2017 72 VISKASE COS INC 11.50% 6/15/2011 75 VISTEON CORP 7.00% 3/10/2014 72 WASH MUTUAL PFD 6.53% 12/31/1949 58 WASH MUTUAL PFD 6.90% 12/31/1949 60 WASH MUTUAL PFD 6.67% 12/31/1949 64 WCI COMMUNITIES 9.13% 5/1/2012 50 WCI COMMUNITIES 7.88% 10/1/2013 51 WCI COMMUNITIES 6.63% 3/15/2015 46 WEBSTER CAPITAL 7.65% 6/15/2037 70 WERNER HOLDINGS 10.00% 11/15/2007 0 WILLIAM LYON 7.63% 12/15/2012 64 WILLIAM LYON 10.75% 4/1/2013 63 WILLIAM LYON 7.50% 2/15/2014 67 WIMAR OP LLC/FIN 9.63% 12/15/2014 51 WINSTAR COMM INC 10.00% 3/15/2008 0 WINSTAR COMM INC 14.75% 4/15/2010 0 WORNICK CO 10.88% 7/15/2011 66 YOUNG BROADCSTNG 10.00% 3/1/2011 65 YOUNG BROADCSTNG 8.75% 1/15/2014 59 ********* 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 ***