T R O U B L E D C O M P A N Y R E P O R T E R Friday, May 9, 2008, Vol. 12, No. 110 Headlines ACANDS INC: Bankruptcy Court Confirms Reorganization Plan ADVANCED MARKETING: Demands $1.8MM From 'Hooked on Phonics' Maker ADVANCED MARKETING: Settles Mascot Books Claim for $266,000 AEGIS MORTGAGE: Seeks to Terminate 401(k) Plan for Employees AIRTRAN HOLDINGS: Shareholder ComVest Has 5.3% Equity Ownership ALESCO FINANCIAL: Earns $84.9 Million in First Quarter ALPHA MEZZ: Moody's Junks Ratings on Five Note Classes AMERICAN CAPITAL: Moody's Holds Ratings After $813MM Asset Decline AMERICAN LAFRANCE: Court Approves Sale Agreement with ArvinMeritor AMERICAN LAFRANCE: Assumption of Contracts Under Plan Opposed AMERICAN AXLE: Gets $200 Mil. Aid from GM to Resolve Labor Dispute ATLANTIC EXPRESS: Constrained Liquidity Cues S&P to Chip Ratings ARVINMERITOR INC: Gets Go-Signal to Buy American LaFrance Assets BANC OF AMERICA: Moody's Holds Ba3 Rating on $10.228MM Cl. N Cert. BLOCKBUSTER INC: State Street Bank Reports 5.1% Stake Ownership BLOUNT INTERNATIONAL: Shareholders Declare 5% Equity Ownership BMB MARKETPLACE: Files Schedules of Assets and Liabilities BNG HOLDINGS: Case Summary & 43 Largest Unsecured Creditors BOMBARDIER INC: Moody's Holds Ba2 Ratings; Changes Outlook to Pos. BON-TON STORES: State Street Owns 5.3% of Outstanding Stake BRUCE ROSEMAN: Voluntary Chapter 11 Case Summary CABLEVISION SYSTEMS: Unit Buying Sundance Channel for $496 Million CABLEVISION SYSTEMS: Sundance Buyout Won't Affect S&P's 'BB' Rtng. CABLEVISION SYSTEMS: Newsday Bid Gets Thumbs Down from Consumers CBA COMMERCIAL: Realized Losses Prompt Moody's to Lower Ratings CENTEX CORP: S&P Chips Ratings to BB from BB+ with Neg. Outlook CHALLENGER POWERBOATS: Jaspers Hall Expresses Going Concern Doubt CHARMING SHOPPES: Reaches Agreement to End Board Appointees Battle CHEMTURA CORP: S&P Cuts Ratings to BB; Retains Developing Watch CHRYSLER LLC: Revenue Decline Cues Fitch to Cut IDR to B from B+ CHURCH OF GOD: Case Summary & Eight Largest Unsecured Creditors CLEAR CHANNEL: Judge Allows Breach of Contract Suit Against Banks CLEBURNE & TM: Sunrise Mall Auction Halted by Bankruptcy Filing COMM 2006-C8: Moody's Junks Rating on $9.439MM Class Q Certs. CONSUMER ACCEPTANCE: Case Summary & Largest Unsecured Creditor COREY LANDINGS: Files Schedules of Assets and Liabilities COUNTRYWIDE FINANCIAL: Vows to Keep Watch Over Mistakes in Lending COUNTRYWIDE FIN'L: S&P Cuts Ratings on Deals, Outlook Developing DAN RIVER: Board Names John Hedge of Scouler & Company as CRO DAVIS SQUARE: Fitch Downgrades Ratings on Five Note Classes DIRECTV HOLDINGS: Moody's Rates Proposed $1.35BB Sr. Notes Ba3 DIRECTV HOLDINGS: S&P Lifts Ratings on Two Note Classes to 'BB' DOLE FOOD: Credit Protection Remains Weak for Fitch's 'B-' Rating ENCAP GOLF: Files Chapter 11 After State Stops $1 Billion Project ENCAP GOLF: Case Summary & 20 Largest Unsecured Creditors EOS AIRLINES: Wants Management Incentive Plan for Employees OK'd FANNIE MAE: Posts $2.2BB Net Loss; Plans to Raise $6BB New Capital FIRST HORIZON: Moody's Downgrades Ratings on 11 ALT-A Tranches FRED LEIGHTON: Says Merrill Lynch and Christie's Violated Stay FRONTIER AIRLINES: Gets Court Authority to Assume Airbus Sale LOI FTS GROUP: R.E. Bassie Expresses Going Concern Doubt GENERAL MOTORS: Liquidity Negatively Impacted by $2.1 Billion GENERAL MOTORS: To Provide $200 Million to Axle to End Strike GENERAL MOTORS: In Talks on $750 Million Pledge for ResCap Bailout GMAC LLC: Parents In Talks on $750 Mil. Bailout for ResCap GRENADIER FINDING: Fitch Junks Ratings on Three Note Classes HCA INC: Earns $170 Million in First Quarter Ended March 31 HEALTHSOUTH CORP: March 31 Balance Sheet Upside-Down by $1.5BB HOME INTERIORS: Gets Initial OK to Use NexBank's Cash Collateral HOME INTERIORS: Wants to Access $5.1 Million Facility of NexBank HOVNANIAN ENTERPRISES: Reports Prelim. Results for Second Quarter HSI ASSET: S&P Places 13 Ratings Under Negative CreditWatch ICEBOX ADVERTISING: Case Summary & 20 Largest Unsecured Creditors IMAGEKING VISUAL: Case Summary & 25 Largest Unsecured Creditors JP MORGAN MORTGAGE: Moody's Affirms Ratings on Stable Performance JUPITER HIGH-GRADE: Fitch Junks Rating on $39.957MM Class C Notes KRONOS: S&P Cuts Rating on $400MM Senior Secured Notes to 'B' LB-UBS: Fitch Affirms Low-B Ratings on Three Certificate Classes LINENS N THINGS: To Pay $8,000,000 for Sales and Use Taxes LINENS N THINGS: To Pay $26.5MM for Warehouse Obligations LOMBARDO'S RAVIOLI: Case Summary & 20 Largest Unsecured Creditors MAGUIRE PROPERTIES: Moody's Cuts Corp. Family Rtng. to B1 from Ba2 MASTR ASSET: S&P Junks Ratings on Two Certificate Classes MAXXAM INC: Deloitte & Touche Raises Going Concern Doubt MERCURY GROUP: Case Summary & 19 Largest Unsecured Creditors MGM MIRAGE: S&P Holds 'BB' Rating and Revises Outlook to Stable MILLSTONE FUNDING: Fitch Puts 'B' Rating on $879.961MM Notes MORGAN STANLEY: Fitch Cuts Certificate Rating to C/DR4 from CC/DR2 NEFF CORP: Weak Performance Prompts S&P to Cut Corp. Credit to B NETWOLVES CORP: Bankruptcy Court Approves Disclosure Statement NETWOLVES CORP: Court Sets Plan Confirmation Hearing June 24 OCONEE CLUB: Voluntary Chapter 11 Case Summary ONLINE INSURANCE: Case Summary & 20 Largest Unsecured Creditors ON SEMICONDUCTOR: Moody's Lifts Corp. Family Rating to Ba3 from B1 OP1-CRH III: Case Summary & Nine Largest Unsecured Creditors ORLANDO POU: Case Summary & 8 Largest Unsecured Creditors PACIFIC BAY: Fitch Slashes Rating on $6.317MM Notes to 'CCC' PEOPLES COMMUNITY BANKCORP: BKD LLP Expresses Going Concern Doubt PETROHAWK ENERGY: Announces $500 Million Offering of Senior Notes PETROHAWK ENERGY: $1BB Add'l Capital Cues S&P to Hold 'B' Ratings PETROHAWK ENERGY: Moody's Assigns B3 Rating on $500MM Sr. Notes PSEG ENERGY: Fitch Won't Take Rating Actions on IRS Disallowance QUAIL LAKE: Files Schedules of Assets and Liabilities QUAKER FABRIC: Court Moves Exclusive Plan Filing Period to May 19 QUEBECOR WORLD: Seeks Extension of the CCAA Stay Until July 25 QUEBECOR WORLD: Ernst & Young Reports Updates on CCAA Proceedings RECYCLED PAPER: Payment Default Cues Moody's to Cut Rating to Caa3 REFCO INC: TH Lee Partners, et al., Want Access to Secret Docs REFCO INC: Claim Transfers Between Feb. 13 and May 2, 2008 RESIDENTIAL CAPITAL: To Get $750 Mil. Bailout from GM & Cerberus RF MICRO DEVICES: Begins Restructuring; Lays Off 350 Employees ROYALTY PHARMA: S&P Rates Proposed $300MM Unsecured Loan BB+ SECURITY CAPITAL: Posts $96.1 Million Net Loss in 2008 1st Quarter SHERMAG INC: Files for Creditor Protection Under the CCAA SIRVA INC: Court Sets June 16 as Class 5-A Claims Bar Date SOLO CUP: Moody's Holds B2 CF Rating, Revises Outlook to Stable SOUTH COAST: Collateral Deterioration Cues Fitch to Lower Ratings SOUTH COAST: Fitch Chips Rating on $30MM Cl. B Notes to B from AA SPANSION INC: Fitch Holds $207MM Sr. Debentures Rating at CCC-/RR6 SPRINT NEXTEL: Forges Wireless Communications Biz with Clearwire SPRINT NEXTEL: Combines Applications & Services with Google Inc. TRIBUNE CO: News Corp. Close to Clinching Newsday Deal TRIBUNE CO: Says Consumers are Wary about Cablevision's Bid TRICOM SA: Bancredito Panama Sends Subpoena to BDO Seidman, et al TRICOM SA: Asks Court to Fix July 8 As Claims Bar Date TROPICANA ENTERTAINMENT: Taps Kirkland & Ellis as Bankr. Counsel TROPICANA ENT: Noteholders Want Court to Appoint Ch. 11 Trustee TROPICANA ENT: Can Hire Kurtzman Carson as Notice and Claims Agent TWEETER HOME: Opens First Store Since Schultze Acquisition TWEETER HOME: Wants to Extend Removal Period to October 31 TWEETER HOME: Wants to Employ Ask Financial as Special Counsel UPPER BEAR CREEK: Case Summary & Largest Unsecured Creditors U.S. ANTIMONY: DeCoria Maichel Expresses Going Concern Doubt U.S. ENERGY: Court Sets July 1 as Claims Bar Date U.S. ENERGY: Has Until July 8 to File Chapter 11 Plan VALHI INC: S&P Lowers Corporate Credit Rating to B from B+ VALLEJO CITY: S&P Cuts Improvement Project Rating to B from A VALLEJO PUBLIC: S&P Slashes Revenue Bonds Rating to B from A- VION PHARMACEUTICALS: Receives Nasdaq Delisting Notice WACHOVIA BANK: Fall of Property Value Cues Moody's to Cut Ratings WELLMAN INC: Panel Seeks Inquiry on $375 Mil. Refinancing Deal WS PARK: Case Summary & Largest Unsecured Creditor * Fitch Performs Analysis on 2002 Through 2004 Vintages in US CMBS * Student Loan Market Disruptions Pressure Lenders, Fitch Says * CREL CDO Delinquency Rate Down in April, Fitch's Index Show * Fitch Says ANLs On Auto Loan Securities Rise Higher in April * Fitch Comments on Ford and GM Outlook After 1st Quarter Earnings * Fitch Says Bonds Affected by Cuts in '08 Stays High at $88.4BB * Fitch Says Auction-Rate Closed-End Fund Refinancing Increase * S&P's Outlook for Media Ent. Industry Calls For Boost in Ads * S&P Says Most CMBS Borrowers Were Able to Refinance Loans * Consumer Products Cos. Will Face Tougher Test in '08, S&P Says * S&P Says Mounting Default in 2008 Come As Hardly Surprising * Moody's Says Measures of Liquidity Strains U.S. SG Companies * Moody's Says Global SG Default Rate Rises to 1.7% in April * Roberta DeAngelis Appointed as Acting U.S. Trustee for Region 3 * BOOK REVIEW: Long-Term Care in Transition: The Regulation of Nursing Homes ********* ACANDS INC: Bankruptcy Court Confirms Reorganization Plan --------------------------------------------------------- The Honorable Judith K. Fitzgerald at the United States District Court for the District of Delaware confirmed on Tuesday the chapter 11 reorganization plan of ACandS Inc., Bankruptcylaw360.com says, citing the Debtor's lead counsel. ACandS still needs to get a stamp of approval from the Court before it can exit bankruptcy. As reported by the Troubled Company Reporter, ACandS' bankruptcy plan, as amended, provides for the issuance of injunctions under Section 524(g) of the U.S. Bankruptcy Code that result in channeling of certain asbestos-related liabilities of the Debtor into a trust. The Debtor said the Trust will (i) possess the status and features of a "qualified settlement fund" for the purposes of Section 468B of the Internal Revenue Code, (ii) assume the Debtor's liabilities with respect to all Asbestos Personal Injury Claims, and (iii) use Trust Assets and income to pay Asbestos Personal Injury Claims, as provided in the Plan and Trust Documents. When it sought Chapter 11 protection in September 2002, ACandS had already settled 247,000 asbestos claims, but had 300,000 left to deal with, according to an Associated Press report. The Debtor said that its $449,000,000 insurance claim against Travelers Casualty and Surety Company is its most valuable asset, and will be used to fund the trust. The TCR also noted that the Trust will be funded with various assets, which includes, among other things: a) an $11,600,000 cash contribution by Irex Corporation; b) 100% of common stock of the Reorganized Debtor and 100% of the common stock of the Debtor; c) Pre-Petition trust assets and remaining collateral in the Pre-Petition trust as of the effective date; and d) the ACandS QSF Trust, which had a value of $2,665,336 as of July 31, 2007. Under the Debtor's Amended Plan, all Administrative and Priority Tax Claims will be receive cash in full satisfaction of the claim. Priority Claims against the Debtor will receive, either: a) cash in the allowed amount of its priority claim; or b) other, lesser treatment as agreed in writing by the holder and the Debtor. Holders of this claim is expected to receive 100% of the allowed amount of their claims. Holders of Non-Asbestos Secured Claims will retain, unlatered, legal, equitable and contractual rights, including any liens that secure the allowed claim. The Debtor further says that holders of this claim will also receive 100% of the allowed amount of their claims. All holders of Asbestos Personal Injury Claims will be assumed by the Trust without further act and will be channeled to and resolved in accordance with the asbestos personal injury claim treatment. The Debtor estimates Asbestos PI Claims to aggregate $3,000,000,000. Associated Press said Asbestos PI Claimants would receive roughly 6% recovery under the Plan. Holders of General Unsecured Claims will receive cash equal to 10% of their claims. The Debtor estimates general unsecured claims to total $1,116,000. Holders of Non-Asbestos Unsecured Insured Litigation Claims will be allowed to liquidate their claims. The recovery of these claims depends on the amount of any available applicable insurance coverage for each claim. If these holders have not received 10% of the principal amount of their allowed claim, the Debtor said that it will distribute cash to these holders in the sum of 10% of the principal amount plus 6% interest rate. Holders of Equity Interests will retain their interest under the Amended Plan. The Amended Plan has been met with criticisms by the United States Trustee for Region 3, who insisted that the Debtor justify the proposed release of claims belonging to certain third-party claimants. The U.S. Trustee said in court documents that with respect to proposed claims release, there appears to be no evidence or basis for releasing widespread claims against certain parties and other entities including, as defined in the Debtor's Plan, officers, counsel, bankers, advisors, or agents of the Debtor. Creditor Owens-Illinois Inc., also noted that the trust to be created under the plan has "overly broad powers". About AcandS Inc. Based in Lancaster, Pennsylvania, ACandS Inc. was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The company filed for chapter 11 protection on Sept. 16, 2002 (Bankr. Del. Case No. 02- 12687). Laura Davis Jones, Esq., Curtis A. Hehn, Esq., James E. O'Neill, Esq., and Michael Paul Migliore, Esq., at Pachulski Stang Ziehl & Jones, P.C., represent the Debtor in its restructuring efforts. Kathleen Campbell Davis, Esq., Aileen F. Maguire, Esq., Mark T Hurford, Esq., and Marla Rosoff Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. At Dec. 31, 2006, the Debtor disclosed that it had book assets of approximately $11.78 million and book liabilities, including liabilities for the payment of asbestos-related and other claims of $11.78 million. At June 30, 2007, net book assets before liabilities for asbestos-related and other claims was approximately $9,010,000. The Court set April 21, 2008 to consider confirmation of the Debtor's Second Amended Chapter 11 Plan of Reorganization. ADVANCED MARKETING: Demands $1.8MM From 'Hooked on Phonics' Maker ----------------------------------------------------------------- Bankruptcylaw360.com reports that Advanced Marketing Services Inc. filed a complaint against the producers of "Hooked on Phonics" for wrongfully withholding funds. Advanced Marketing has asserted a claim for $1,860,000 against the defendants, Bankruptcylaw360 relates. The Debtor is hoping to recoup money for customer returns on several educational book products, Bankruptcylaw360 notes. Hooked on Phonics creates educational products that help teach English, Math and other skills to children. Educate, Inc. acquired the company, now known as Smarterville Productions LLC., in 2005. About Advanced Marketing Based in San Diego, Calif., Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. In schedules filed with the Court, Advanced Marketing disclosed total assets of $213,384,791 and total debts of $216,608,357. Publishers Group West disclosed total assets of $39,699,451 and total debts of $83,272,493. Publishers Group Inc. disclosed zero assets but $41,514,348 in liabilities. On Aug. 24, 2007, the Debtors' exclusive period to file a chapter 11 plan expired. On the same date, the Debtors and Creditors Committee filed a Plan & Disclosure Statement. On September 26, the Court approved the adequacy of the Disclosure Statement explaining the Second Amended Plan. On Nov. 13, 2007, the Debtors filed a Third Amended Plan and that plan was confirmed by the Court on November 15. The Plan became effective December 4 and Curtis R. Smith was appointed Plan Administrator. ADVANCED MARKETING: Settles Mascot Books Claim for $266,000 ----------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware approved a stipulation settling reclamation and all other claims asserted by Mascot Books, Inc. against the bankruptcy estates of Advanced Marketing Services Inc., Publishers Group Incorporated and Publishers Group West Incorporated. The Debtors agreed that Mascot Books has a $266,293 general unsecured claim against Advanced Marketing Services. The allowed claim will be paid pursuant to the Debtors' confirmed Third Amended Joint Chapter 11 Plan of Liquidation. The parties executed mutual releases. About Advanced Marketing Based in San Diego, Calif., Advanced Marketing Services, Inc. -- http://www.advmkt.com/-- provides customized merchandising, wholesaling, distribution and publishing services, currently primarily to the book industry. The company has operations in the U.S., Mexico, the United Kingdom and Australia and employs approximately 1,200 people Worldwide. The company and its two affiliates, Publishers Group Incorporated and Publishers Group West Incorporated filed for chapter 11 protection on Dec. 29, 2006 (Bankr. D. Del. Case Nos. 06-11480 through 06-11482). Suzzanne S. Uhland, Esq., Austin K. Barron, Esq., Alexandra B. Feldman, Esq., O'Melveny & Myers, LLP, represent the Debtors as Lead Counsel. Chun I. Jang, Esq., Mark D. Collins, Esq., and Paul Noble Heath, Esq., at Richards, Layton & Finger, P.A., represent the Debtors as Local Counsel. Lowenstein Sandler PC represents the Official Committee of Unsecured Creditors. In schedules filed with the Court, Advanced Marketing disclosed total assets of $213,384,791 and total debts of $216,608,357. Publishers Group West disclosed total assets of $39,699,451 and total debts of $83,272,493. Publishers Group Inc. disclosed zero assets but $41,514,348 in liabilities. On Aug. 24, 2007, the Debtors' exclusive period to file a chapter 11 plan expired. On the same date, the Debtors and Creditors Committee filed a Plan & Disclosure Statement. On September 26, the Court approved the adequacy of the Disclosure Statement explaining the Second Amended Plan. On Nov. 13, 2007, the Debtors filed a Third Amended Plan and that plan was confirmed by the Court on November 15. The Plan became effective December 4 and Curtis R. Smith was appointed Plan Administrator. AEGIS MORTGAGE: Seeks to Terminate 401(k) Plan for Employees ------------------------------------------------------------ Aegis Mortgage Corp. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to terminate their 401(k) plan effective no earlier than May 31, 2008, and no later than July 31, 2008. The Debtors offered the 410(k) plan to their eligible employees through Transamerica Retirement Services, under which the employees contribute a portion of their pre-tax compensation to the plan. The Debtors administratively maintained the 410(k) plan postpetition pending its termination. As of the Petition Date, the Debtors were current on any amounts owed on account of the plan. James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones, LLP, in Wilmington, Delaware, says the Debtors have no need for the 410(k) plan and its termination will help them reduce their administrative expenses. "The Debtors' prompt termination of their 410(k) plan will benefit both current and former employees by helping ensure a smooth transition of employee funds as the Debtors' management will serve as a liaison between the employees and Transamerica," Mr. O'Neill further says. The Debtors will inform former employees with an interest in the 401(k) plan about the transfer of their funds, and will file all Internal Revenue Service forms and returns necessary to effect the termination and maintain tax qualification of the plan. Headquartered in Houston, Texas, Aegis Mortgage Corporation -- http://www.aegismtg.com/-- offers a variety of mortgage loan products to brokers through its subsidiaries. The company together with 10 affiliates filed for chapter 11 protection on Aug. 13, 2007 (Bankr. D. Del. Case No. 07-11119). Curtis A. Hehn, Esq., James E. O'Neill, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski, Stang, Ziehl, & Jones, L.L.P., serve as counsel to the Debtors. The Official Committee of Unsecured Creditors is represented by Landis Rath & Cobb LLP. In schedules filed with the Court, Aegis disclosed total assets of $138,265,342 and total debts of $4,125,470. (Aegis Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AIRTRAN HOLDINGS: Shareholder ComVest Has 5.3% Equity Ownership --------------------------------------------------------------- ComVest Investment Partners III, L.P., Comvest III Partners, LLC, Robert L. Priddy and Michael S. Falk have declared that they beneficially own 6,931,458 shares, representing 5.3% in Airtran Holdings Inc. common stock. Robert L. Priddy owns an additional 800,000 shares, bringing his total common stock stake at 5.99%. Headquartered in Orlando Florida, AirTran Holdings Inc. (NYSE: AAI) -- http://www.airtran.com/-- a Fortune 1000 company, is the parent company of AirTran Airways Inc., which offers more than 700 daily flights to 56 U.S. destinations. * * * To date, AirTran Holdings Inc. carries Moody's Investors Service 'B3' long-term corporate family and 'Caa2' senior unsecured debt ratings. Outlook is Stable. ALESCO FINANCIAL: Earns $84.9 Million in First Quarter ------------------------------------------------------ Alesco Financial Inc. disclosed Tuesday financial results for its first quarter ended ended March 31, 2008. The company reported GAAP net income for the three-months ended March 31, 2008, of $84.9 million, as compared to net income of $11.8 million for the three-months ended March 31, 2007. GAAP net income for the three-months ended March 31, 2008, includes $72.7 million of non-cash net gains resulting from fair value adjustments on financial instruments, net of minority interest allocations. The company reported Adjusted Earnings for the three-months ended March 31, 2008, of $20.2 million, as compared to Adjusted Earnings of $17.2 million, for the three-months ended March 31, 2007. Adjusted Earnings, a non-GAAP measure of performance, excludes the effects of certain adjustments in accordance with GAAP that management believes may not have a direct financial impact on distributable earnings. Net Investment Income Net investment income for the three month period ended March 31, 2008, was $26.5 million, compared with net investment income of $16.8 million during the same three month period of 2007. Investment in Debt Securities At March 31, 2008, the estimated fair value of the company's investments in debt securities was $5.7 billion. As previously disclosed, the Kleros Real Estate CDOs have all failed overcollateralization tests as a result of significant ratings agency downgrade activity and are no longer making cash distributions to the company. The net cash flows of the Kleros Real Estate CDOs are currently being used to pay down the controlling class debtholders in each of the Kleros Real Estate CDOs. Despite the fact that each Kleros Real Estate CDO has failed overcollateralization tests, the net interest earnings of these CDOs continue to be reflected in the company's net investment income and taxable income. In addition, the company received written notice from the trustees of Kleros Real Estate I, II, and III that each CDO has experienced an event of default. These events of default resulted from the failure of certain additional overcollateralization tests primarily due to credit rating agency downgrades. The events of default provide the controlling class debtholder in each CDO with the option to liquidate all of the MBS assets collateralizing the particular CDO. The proceeds of any such liquidation would be used to repay the controlling class debtholder. On May 1, 2008, the company received written notice from the trustee of Kleros Real Estate III that the controlling class debtholder has submitted a notice of liquidation. Although liquidation of the underlying collateral has not yet occurred, once the liquidation process commences the company will no longer able to include the liquidated assets and the related income as a component of its REIT qualifying assets and income. As of the current date, the controlling class debtholders of Kleros Real Estate I and II have not exercised their rights to liquidate either CDO. Since the company is not receiving any cash flow from its investments in any of the Kleros Real Estate CDOs, the events of default and liquidation notices do not have any further impact on the company's cash flows. However, the assets of the Kleros Real Estate I, II and III CDOs and the income they generate for tax purposes are a component of the company's REIT qualifying assets and income. If more than one of the Kleros Real Estate CDOs is liquidated the company may have to deploy additional capital into REIT qualifying assets in order to continue to qualify as a REIT. If the company is not able to invest in sufficient other REIT qualifying assets, its ability to qualify as a REIT could be materially adversely affected. Investments in Loans At March 31, 2008, the company's total investments in loans, net was $1.8 billion. Liquidity As of March 31, 2008, the company's consolidated financial statements include $135.2 million of available, unrestricted cash and cash equivalents. This amount includes $15.1 million of cash dividends that were paid to company shareholders on April 10, 2008. As of March 31, 2008, the company's consolidated financial statements include $87.8 million of restricted cash. The $87.8 million is primarily restricted for the following purposes: $43.7 million at consolidated CDO entities to be used to acquire additional assets and $44.1 million of undistributed cash flows from operations at consolidated CDO entities. Share Repurchase On Aug. 3, 2007, the company's Board of Directors approved a share repurchase plan that authorizes the company to purchase up to $50.0 million of company common shares. Under the plan, the company may make purchases from time to time through open market or privately negotiated transactions. The timing and exact number of shares purchased will be determined at AFN's discretion and will depend on market conditions. This plan may be modified or discontinued at any time. During the three-months ended March 31, 2008, the company did not repurchase shares of its common stock. Dividend Summary On Mar. 10, 2008, the company announced a cash dividend for the quarter ended March 31, 2008, of $0.25 per common share. The dividend was paid on April 10, 2008, to shareholders of record as of the close of business on March 20, 2008. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $7.9 billion in total assets, $7.5 billion in total liabilities, $80.4 million in minority interests, and $258.1 million in total stockholders' equity. About Alesco Financial Headquartered in Philadelphia, Alesco Financial Inc. (NYSE: AFN) -- http://www.alescofinancial.com/-- is a specialty finance real estate investment trust (REIT). The company is externally managed by Cohen & Company Management LLC, a subsidiary of Cohen Brothers LLC (which does business as Cohen & Company), an alternative investment management firm, which, since 2001, has provided financing to small and mid-sized companies in financial services, real estate and other sectors. * * * The Kleros Real Estate CDOs have all failed overcollateralization tests as a result of significant ratings agency downgrade activity and are no longer making cash distributions to the company. The disruption in the credit markets, which has been particularly severe in the residential mortgage lending sector, directly impacts the company's business as its investment portfolio includes investments in MBS financed through its on-balance sheet Kleros Real Estate CDO subsidiaries and other CDO investments. There can be no assurance that the company will not experience further declines in fair value given market conditions. Temporary declines, if any, would be recorded as losses within accumulated other comprehensive loss in the company's balance sheet and would have a negative impact on book value, which the company experienced during the twelve-months ended Dec. 31, 2007. Other-than-temporary declines, if any, would be recorded as an impairment charge in the company's consolidated statement of income and would have a negative impact on the company's net income, which the company also experienced during the twelve- months ended Dec. 31, 2007. ALPHA MEZZ: Moody's Junks Ratings on Five Note Classes ------------------------------------------------------ Moody's Investors Service has downgraded the ratings it has assigned to a swap transaction entered into by and to six classes of notes issued by Alpha Mezz CDO 2007-I, Ltd. and left on review for possible further downgrade two of the ratings. The rating actions are: Class Description: $325,000,000 Supersenior Swap -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: $70,000,000 Class II Senior Floating Rate Notes Due 2047 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Class Description: $30,000,000 Class III Senior Floating Rate Notes Due 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $5,000,000 Class IV Senior Floating Rate Notes Due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ca Class Description: $23,000,000 Class V Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: C Class Description: $22,500,000 Class VI Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $7,000,00 Class VII Mezzanine Floating Rate Deferrable Notes Due 2047 -- Prior Rating: Caa2 -- Current Rating: C The rating actions reflect deterioration in the credit quality of the underlying portfolio, as well as the occurrence as reported by the Trustee on April 30, 2008, of an event of default described in Section 5.1(d) of the Indenture dated March 1, 2007. Alpha Mezz CDO 2007-I, Ltd. is a collateralized debt obligation backed primarily by a portfolio of structured finance securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. The severity of losses of certain tranches may be different, however, depending on the timing and choice of further remedies to be pursued following the default event. Because of this uncertainty, the ratings assigned to the Supersenior Swap and the Class II Notes remain on review for possible further action. AMERICAN CAPITAL: Moody's Holds Ratings After $813MM Asset Decline ------------------------------------------------------------------ Moody's Investors Service affirmed the Senior Unsecured Baa2 rating of American Capital Strategies, Ltd. The affirmation follows the company's announcement of a first quarter 2008 decline in net assets of $813 million. The composition of the loss includes net operating income of $151 million, net realized gains of $33 million and net unrealized depreciation of $997 million. The outlook remains stable. While the amount of unrealized depreciation on the portfolio is significant, the majority of losses are non-cash and relate to accounting rules to value the investment portfolio at current market values. Furthermore, ACAS's loss in the quarter does not result in any non-compliance with mandated leverage and asset coverage requirements. The depreciation of ACAS's investment portfolio includes both market-related devaluations (spread widening, market price declines in the case of European Capital, comparable trading multiple declines) and SFAS 157 adjustments. These losses reflect the difficult market at March 31, 2008. ACAS's conservative capital structure gives it the ability to hold these impaired investments to maturity, thus allowing for future realized gains. Should material losses occur in future quarters, ACAS's ability to comply with required capital ratios, in particular the BDC asset coverage restriction of 200%, could be affected. Moody's views long-term compliance with the asset coverage covenant as important for the investment grade rating for BDCs. However, Moody's believes that ACAS is adequately positioned relative to its capital and liquidity positions, in the context of the potential for further valuation charges. "The ability of ACAS to recognize significant portfolio realizations during the first quarter and raise $317 million from an equity offering supports Moody's view that ACAS will be able to generate sufficient capital to remain in compliance with the BDC covenants," said Andrew Forsyth, Moody's Senior Analyst. "The company's strong liquidity profile with limited near-term maturities provides additional protection in the event that economic conditions worsen," he added. Moody's said that expanding economic weakness could result in credit-related challenges to ACAS's financial performance. ACAS has invested significant resources in its Finance Accounting Compliance Team that executes both pre and post deal due diligence along with its internal Operations Teams, which should provide support should credit issues arise. For the first quarter, non- accrual loans at face value as a percentage of total loans increased to 8.2% from 7.9% at year-end. Moody's will continue to monitor credit quality at the firm, given its potential to affect the firm's financial performance and access to confidence-sensitive investors. This is particularly important given the growth of the investment portfolio the last few years. The maintenance of market confidence is critical for BDCs, due to their limited capital retention and consequent need to frequently access the market for growth capital. Moody's noted that the stable outlook reflects the expectation that future portfolio depreciation will be contained. These ratings were affirmed: -- Long-Term Issuer RatingBaa2 -- Senior Unsecured RatingBaa2 -- Senior Unsecured Shelf Rating(P)Baa2 -- Preferred Stock Shelf Rating(P)Ba1 Outlook: Stable American Capital Strategies, Ltd. is headquartered in Bethesda, Maryland, and reported assets of approximately $10.2 billion at March 31, 2008. AMERICAN LAFRANCE: Court Approves Sale Agreement with ArvinMeritor ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware approved the Bill of Sale and Repurchase Agreement that American LaFrance LLC entered into with ArvinMeritor, Inc. pursuant to Section 363(f) of the Bankruptcy Code. The Debtor filed a request to approve its agreement with ArvinMeritor on February 14, 2008, but withdrew it days later for unstated reasons. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, related that the proposed agreement contemplates ArvinMeritor's repurchase of axles, free and clear of liens, claims, and interests that ArvinMeritor previously sold to the Debtor. In exchange for the repurchase: (i) ArvinMeritor will reduce the Debtor's outstanding balance to ArvinMeritor; (ii) The axles will remain at the Debtor's facilities; (iii) The Debtor will repurchase the axles from ArvinMeritor as needed for the Debtor's production during the next 12 months; (iv) ArvinMeritor will continue to supply new products to the Debtor on a cash-on-order basis; and (v) The Debtor will also waive the Chapter 5 cause of action against ArvinMeritor. Mr. Ward notes that ArvinMeritor will repurchase the axles for 92% of their original purchase price or $1,044,723. "This price exceeds the value that the Debtor can obtain if it were to sell these axles in a piecemeal fashion. About ArvinMeritor Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. ArvinMeritor employs about 19,000 people at more than 120 manufacturing facilities in 24 countries which includes China, India, Japan, Singapore, Thailand, Australia, Venezuela, Brazil, Argentina, Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Spain, Sweden, Switzerland, United Kingdom, among others. * * * As reported by the Troubled Company Reporter on May 8, 2008, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating and other ratings on ArvinMeritor Inc., with negative outlook. The affirmations followed ArvinMeritor's announcement of its plan to spin off its light vehicle systems business to shareholders. S&P is concerned about how profitability and cash flow will unfold before the legal separation, given uncertainty about production among many automotive and heavy-truck customers. Fitch also placed on the same day the company's ratings on Rating Watch Negative: -- Issuer Default Rating 'B'; -- Senior Unsecured 'B/RR4' -- Bank Credit Facility 'BB/RR1'. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN LAFRANCE: Assumption of Contracts Under Plan Opposed ------------------------------------------------------------- Several parties-in-interest object to American LaFrance LLC's proposed assumption of executory contracts under its Third Amended Plan of Reorganization, including: * Town of Shadeland, Indiana, * Village of Larchmont, New York, * Borough of Downingtown, PA and Minquas Fire Company No. 2, * Fire Service, Inc., and * RT Jedburg Commerce Park, LLC. American LaFrance asked the U.S. Bankruptcy Court for the District of Delaware on April 14, 2008, for authority to assume more than 1,000 executory contracts pursuant to its Third Amended Plan. On March 19, 2008, pursuant to its Asset Sale Motion, the Debtor filed a Notice of its intent to assume approximately 1,100 contracts. The Debtor subsequently filed a supplement to its Notice of Intent for the purpose of excluding certain contracts from the Contract List. A list of Contracts to be Assumed under the Plan is available for free at http://bankrupt.com/misc/ALF_ContractstobeAssumed.pdf Jeff Findlay, president of Shadeland Town Council, relates that the Council entered into a contract with the Debtor, which has expired 10 months prepetition and has incurred multiple defaults. Fire Service shares the same sentiment with the Council as its manufacturer's representative agreement has expired prepetition and thus, Fire Service believes that there is nothing left in the Agreement for the Debtor to assume or assign. Mary E. Augustine, Esq., at Bayard, P.A., in Wilmington, Delaware, counsel to Larchmont, explains that Larchmont and the Debtor entered into an equipment contract in which the Debtor agreed to pay $100 Larchmont for every day past the delivery date. She asserts that the Debtor's Assumption Motion attempts to circumvent the liquidated damages provision in the Larchmont Contract. Downingtown and the Debtor have an agreement with a surety bond issued by DaimlerChrysler, and Downingtown asserts a secured claim for $756,931. Downingtown reiterates that does not object to the Plan or to Assumption Motion under the Plan, however, it opposes the insufficient information provided by the Debtor on the treatment and assumption of the DaimlerChrysler bonds. David W. Carickhoff, Esq., at Blank Rome LLP, in Wilmington, Delaware, representing RT Jedburg, relates that pursuant to Section 365(d)(4)(A) of the Bankruptcy Code, leases of nonresidential real property are "deemed rejected" unless assumed "by the date of the entry of an order confirming a plan." Accordingly, RT Jedburg contends that unless the Debtor assumes the Summerville Property Lease at or prior to confirmation of its Plan, the Lease is rejected and Debtor must immediately surrender the Property to RT Jedburg, unless it can cure all defaults to the Lease. Among others, the Objecting Parties ask the Court to: -- prohibit the Debtor from assuming and assigning Contracts that have expired, been terminated and accrued multiple defaults prepetition; -- direct the Debtor to provide adequate assurance of future performance, in the case of defaults, like setting new delivery dates and stipulation to the accrual of liquidated damages if the Equipment is delivered after the new delivery date; and -- compel the Debtor to clarify the treatment of surety bonds under the Assumption Motion. Debtor Respond to Objections The Debtor acknowledges that the Assumption Motion under the Plan has received responses. The Debtor has advised the counterparties that if they already filed an objection to the previous assumption motions and notices, the Debtor will treat the objections as filed to the current Assumption motion. "In an attempt to alleviate the concerns raised in certain of the Objections and to better frame the issues remaining for the Court at the confirmation hearing, the Debtor has prepared a comprehensive response detailing the proposed treatment or resolutions of the objections," Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, explains. The adequate assurance of future performance issue will be addressed at the confirmation hearing, the Debtor maintains. If the cure amount is unresolved prior to the confirmation hearing, the Debtor will seek a hearing regarding the cure amount at a later date. The Debtor informs the Court that it is continuing negotiations with these Objecting Parties: * South Carolina Electric & Gas Co. * RT Jedburg Commerce Park, LLC * Southwest Emergency Response Team * Clay Volunteer Fire Department, Inc. * GGS Information Services, Inc. * Village of Larchmont, New York * City of Camilla, Georgia * Clayton County, Georgia * Hi-Tech Emergency Vehicle Service, Inc. Meanwhile, the Debtor has identified that the Children's Hospital of Akron's, City of Strongville's, and the City of Plantation, Florida's cure amount objections do not constitute a confirmation issue. However, the Debtor will seek the Court for a hearing at a later date regarding the assumption or rejection of these parties' Contracts. According to the Debtor, the cure amount objections, separately filed by Vogelpohl Fire Equipment, Inc., of nine parties have been resolved and the underlying contract belonging to each Party has not been completed and therefore commissions, if due, have not been earned: * USEC * City of Winchester * City of Columbus, Ohio Fire Truck A * City of Columbus, Ohio Fire Truck B * The Southwest Council of Governments * The Village of Pomeroy * City of West Carrollton * Harrison County Fire Protection District * Tri-Community Joint Fire District If the cure amount objection of Vogelpohl for its Dealer Sales and Service Agreement is unresolved prior to the confirmation hearing, the Debtor will ask the Court to schedule a hearing at a later date and continue negotiating with Vogelpohl. The Debtor and Apple Rock Advertising & Promotion, Inc., have agreed to the cure amount of $24,500. The Debtor maintains that the objections of the Parties concerning the production of a vehicle do not constitute a cure objection under Section 365. However, the Debtor relates that it intends to pay penalties, if owing, when the vehicles are delivered to these parties: * City of Phoenix, Arizona * Town of Buckeye, Arizona * Augusta County, Virginia * City of Columbus, Indiana * Village of Larchmont, New York Furthermore, the Debtor reiterates that the objections of these five parties are moot since their contracts are already rejected pursuant to the Plan Supplement and the Assumption Motion under the Plan: * Town of Buckeye, Arizona * United Telephone Company of the Carolinas, d/b/a Embarq * International Business Machines * Diehl and Sons, Inc. * Kootenay Boundary Regional Fire Rescue Though the Debtor rejects the IBM Agreement, the Debtor agrees to IBM's asserted cure amount of $5,600 under the IBM Lease. The Debtor is also assuming the Diehl and Sons' dealership agreement, which is not the subject of the objection. The Debtor and Oracle USA, Inc., have agreed to $563,851 as cure amount. However, the Debtor clarifies, the objection related to costs owed April 30, 2008, is not a cure objection, but will be paid in the ordinary course of business by the Debtor. The Debtor is seeking to assume the Asset Purchase Agreement of Daimler Trucks North America LLC formerly known as Freightliner LLC and terminate the "TSA." At the confirmation hearing, the Debtor and Daimler Trucks will present a stipulation asking the Court that the matter be set for a hearing at a later date. The Debtor and Freightliner of Vancouver Ltd. will also follow the same procedures. The objection of the City of Cambridge, Ontario, Canada is resolved since the Claimant does not object to the assumption but to the assignment of the contract by any third party, the Debtor note. On the other hand, CCS Holdings, Inc., agrees to the Debtor's proposed treatment of CCS Holdings' sublease and the Objection will be resolved at a later date. For the Town of Shadeland and Fire Service, Inc., the Debtor does not believe that each Party's contract has expired or was terminated. Accordingly, the Debtor will ask the Court for a hearing regarding both parties' objections at a later date. In addition, pursuant to the Plan, any executory contracts or unexpired leases of non-residential real property that are not included in the Assumption Motion are deemed rejected, Mr. Ward reminds the Court. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AXLE: Gets $200 Mil. Aid from GM to Resolve Labor Dispute ------------------------------------------------------------------ American Axle & Manufacturing Holdings Inc. will receive upfront financial support from General Motors Corp. capped at $200 million to help fund employee buyouts, early retirements and buydowns to facilitate a settlement of the work stoppage, according to GM filing with the Securities and Exchange Commission. As reported in the Troubled Company Reporter on April 24, 2008, the strike called by the UAW union at Axle's original U.S. locations continues into its 57th day on Tuesday. Approximately 3,650 associates are represented by the UAW at these five facilities in Michigan and New York. AAM and the UAW worked effectively last week with the objective of reaching a new collective bargaining agreement for the original U.S. locations. Tentative agreements were achieved on many issues and AAM was encouraged by the progress. Although AAM has made several economic proposals to the UAW with "all-in" hourly wage and benefit packages that were considerably higher than the market rate of AAM's UAW-represented competitors in the U.S., the UAW has repeatedly rejected these economic proposals. AAM needs a U.S. market competitive labor agreement for the original U.S. locations. This is necessary because the UAW previously negotiated market competitive labor agreements with many of AAM's U.S. competitors in the driveline market segment. This includes Dana, FormTech, Chinese-owned Neapco and Indian- owned Bharat Forge. The "all-in" wage and benefit package granted by the UAW to these companies averages approximately $30 per hour. In order for AAM to be able to compete for new business and sustain employment at the original U.S. locations, the UAW must offer AAM economic terms and conditions that are comparable to those it has already granted to AAM's competitors. The UAW's latest economic proposal to AAM dated April 14, 2008, included an "all-in" wage and benefit package that is almost double the market rate established by the UAW with AAM's competitors. The TCR reported in March 2008 that GM president and chief operating officer Frederick A. Henderson said that although many of its assembly plants have been partially or fully shut down by the strike of United Auto Workers union members at Axle, GM won't interfere with the parties' labor dispute. Mr. Henderson added that GM were not losing sales because of the strike, which started on Feb. 26, 2008, following expiration of a four-year master labor agreement. However, he said, if GM was struggling because of the union protest, the company would be one of those sitting on the negotiation table. According GM's quarterly results filing, Axle's work stoppage unfavorably impacted GM North America earnings by $800 million. GM has about 30 facilities affected by the strike as the supplier attempts to negotiate with the union. 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. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/-- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on April 4, 2008, Moody's Investors Service placed American Axle & Manufacturing Holdings, Inc.'s Ba3 Corporate Family Rating under review for downgrade. ATLANTIC EXPRESS: Constrained Liquidity Cues S&P to Chip Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Atlantic Express Transportation Corp., including the long-term corporate credit rating to 'CCC' from 'CCC+'. All ratings were removed from CreditWatch, where they had been placed with negative implications on Feb. 19, 2008. The outlook is now negative. At the same time, S&P lowered the rating on the senior secured debt rating to 'CCC', the same as the new corporate credit rating, from 'CCC+'. S&P assigned a '4' recovery rating to this debt, indicating expectations of average (30%-50%) recovery in the event of a payment default. "The downgrade reflects our expectations that the bus transportation provider's liquidity will remain tightly constrained, given the $11 million interest payment due Oct. 15, 2008, on the senior secured notes and required interest-rate swap reserves that occur during its peak borrowing season in October through December," said Standard & Poor's credit analyst Funmi Afonja. S&P also expect that rising fuel prices and increasing labor costs will constrain earnings and cash flow over the next year. The ratings reflect Atlantic Express's highly leveraged financial profile, significant customer concentration, and vulnerability to unanticipated cost increases. Positive credit factors include the company's leading market share in New York City school bus transportation and stable revenue base as a result of multiyear contracts and long-standing customer relationships. Atlantic Express derives just over half of its revenues from its contract with the New York City Department of Education. Under the terms of the current contract with the DOE, which expires on June 30, 2010, the company received price increases, the recapture of increases tied to changes in the CPI not given in prior years, full annual CPI increases, the full reimbursement of all costs related to escorts, plus a 5% administrative fee. The company received a CPI increase of 2.5% for the fiscal year ending June 30, 2008. However, a change in the configuration of routes for the current year effectively reduced the increase to less than 1.5%. The company remains exposed to increases in fuel prices beyond what is covered by the CPI increase and other unexpected cost increases. Although fuel represents a small proportion of total expenses, significant price changes can affect earnings. Atlantic Express is the leading provider (albeit in a very fragmented industry) of school bus transportation in New York City, the largest market in which it operates. School bus services account for about 88% of revenues. The company also provides paratransit services for disabled passengers, and other services, including express commuter lines and tour buses. At Dec 31, 2007, the company operated a fleet of approximately 5,700 vehicles with an average age of about 9 years (excluding vehicles provided by various transportation authorities). The company's financial profile has weakened as a result of rising fuel prices, higher labor costs, and liquidity constraints. S&P expect these trends to continue over the next year and cause Atlantic Express's credit measures to weaken somewhat from current levels. Further deterioration beyond what is expected or a financial covenant violation would result in a downgrade. S&P could revise the outlook to stable if the company meets obligations later this year and begins to builds more adequate liquidity. ARVINMERITOR INC: Gets Go-Signal to Buy American LaFrance Assets ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the Bill of Sale and Repurchase Agreement that American LaFrance LLC entered into with ArvinMeritor, Inc. pursuant to Section 363(f) of the Bankruptcy Code. The Debtor filed a request to approve its agreement with ArvinMeritor on February 14, 2008, but withdrew it days later for unstated reasons. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, in Wilmington, Delaware, related that the proposed agreement contemplates ArvinMeritor's repurchase of axles, free and clear of liens, claims, and interests that ArvinMeritor previously sold to the Debtor. In exchange for the repurchase: (i) ArvinMeritor will reduce the Debtor's outstanding balance to ArvinMeritor; (ii) The axles will remain at the Debtor's facilities; (iii) The Debtor will repurchase the axles from ArvinMeritor as needed for the Debtor's production during the next 12 months; (iv) ArvinMeritor will continue to supply new products to the Debtor on a cash-on-order basis; and (v) The Debtor will also waive the Chapter 5 cause of action against ArvinMeritor. Mr. Ward notes that ArvinMeritor will repurchase the axles for 92% of their original purchase price or $1,044,723. "This price exceeds the value that the Debtor can obtain if it were to sell these axles in a piecemeal fashion. About American LaFrance Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. The Debtor's exclusive period to file a plan expires on May 27, 2008. (American LaFrance Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). About ArvinMeritor Headquartered in Troy, Michigan, ArvinMeritor, Inc. (NYSE: ARM) -- http://www.arvinmeritor.com/-- supplies integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and certain aftermarkets. ArvinMeritor employs about 19,000 people at more than 120 manufacturing facilities in 24 countries which includes China, India, Japan, Singapore, Thailand, Australia, Venezuela, Brazil, Argentina, Belgium, Czech Republic, France, Germany, Hungary, Italy, Netherlands, Spain, Sweden, Switzerland, United Kingdom, among others. * * * As reported by the Troubled Company Reporter on May 8, 2008, Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating and other ratings on ArvinMeritor Inc., with negative outlook. The affirmations followed ArvinMeritor's announcement of its plan to spin off its light vehicle systems business to shareholders. S&P is concerned about how profitability and cash flow will unfold before the legal separation, given uncertainty about production among many automotive and heavy-truck customers. Fitch also placed on the same day the company's ratings on Rating Watch Negative: -- Issuer Default Rating 'B'; -- Senior Unsecured 'B/RR4' -- Bank Credit Facility 'BB/RR1'. BANC OF AMERICA: Moody's Holds Ba3 Rating on $10.228MM Cl. N Cert. ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of 23 classes of Banc of America Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-4 as: -- Class A -- 1, $38,093,757 affirmed at Aaa -- Class A -- 1A, $577,640,648 affirmed at Aaa -- Class A -- 2, $162,000,000 affirmed at Aaa -- Class A -- 3A, $132,000,000 affirmed at Aaa -- Class A -- 3B, $25,000,000 affirmed at Aaa -- Class A -- 4, $885,100,000 affirmed at Aaa -- Class A -- AB, $81,332,000 affirmed at Aaa -- Class A -- J, $201,152,000 affirmed at Aaa -- Class A -- M, $272,747,000 affirmed at Aaa -- Class XC, Notional, affirmed at Aaa -- Class XP, Notional, affirmed at Aaa -- Class B, $20,456,000 affirmed at Aa1 -- Class C, $34,093,000 affirmed at Aa2 -- Class D, $23,866,000 affirmed at Aa3 -- Class E, $17,046,000 affirmed at A1 -- Class F, $23,866,000 affirmed at A2 -- Class G, $34,093,000 affirmed at A3 -- Class H, $34,094,000 affirmed at Baa1 -- Class J, $27,274,000 affirmed at Baa2 -- Class K, $37,503,000 affirmed at Baa3 -- Class L, $10,228,000 affirmed at Ba1 -- Class M, $6,819,000 affirmed at Ba2 -- Class N, $10,228,000 affirmed at Ba3 Moody's is affirming the transaction due to overall stable pool performance. As of the April 10, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 0.3% to $2.72 billion from $2.73 billion at securitization. The Certificates are collateralized by 164 loans ranging in size from less than 1.0% to 7.0% of the pool with the top 10 loans representing 33.8% of the pool. The pool includes two loans (0.9% of the pool) with underlying ratings. Moody's was provided with year-end 2006 and 2007 operating results for 84.3% and 56.1% of the pool, respectively. Moody's weighted average loan to value ratio for the conduit component is 104.6% compared to 103.8% at securitization. The trust has not realized any losses since securitization and currently there are no loans in special servicing. Twenty-one loans, representing 9.3% of the pool, are on the master servicer's watchlist. The master servicer's watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association monthly reporting package. As part of Moody's ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Not all loans on the watchlist are delinquent or have significant issues. The largest loan with an underlying rating is the Glen Oaks Shopping Center Loan ($20.0 million -- 0.7%), which is secured by a 244,000 square foot retail center located in Nassau County, New York. Moody's current underlying rating is Aa2, the same as at securitization. The second loan with an underlying rating is the 345 86th Street Apartments Loan ($5.2 million -- 0.2%), which is secured by a 114 unit residential co-op building. Moody's current underlying rating is Aaa, the same as at securitization. The top three conduit loans represent 16.1% of the outstanding pool balance. The largest conduit loan is the Technology Corners at Moffett Park Loan ($190.0 million -- 7.0%), which is secured by a 716,000 square foot Class A office property located in Sunnyvale, California. The property is 100.0% occupied by Ariba, Inc. through January 2013. The loan matures in August 2016. Moody's LTV is 119.0%, the same as at securitization. The second largest conduit loan is the BlueLinx Holdings Portfolio Loan ($147.5 million -- 5.4%), which represents a 50.0% pari passu interest in a $295.0 million first mortgage. The loan is secured by 57 industrial properties and one office property located in 36 states and totaling 9 million square feet. The properties are 100.0% leased to BlueLinx Corporation through June 2021. The loan matures in July 2016. Moody's LTV is 105.0%, the same as at securitization. The third largest conduit loan is the Marriott Indianapolis Loan ($101.8 million -- 3.7%), which is secured by a 615-room full service hotel located in downtown Indianapolis, Indiana. Occupancy and RevPAR for calendar year 2006 was 72.6% and $113.69, respectively, compared to 72.5% and $108.03 at securitization. Moody's LTV is 105.4%, the same as at securitization. BLOCKBUSTER INC: State Street Bank Reports 5.1% Stake Ownership --------------------------------------------------------------- State Street Bank and Trust Company, as trustee, reported owning 6,183,214 shares in Blockbuster Inc. common stock, representing 5.1% of the company's outstanding stock. Based in Dallas, Texas, Blockbuster Inc. (NYSE: BBI, BBI.B) -- http://www.blockbuster.com/-- is a leading global provider of in-home movie and game entertainment, with over 7,800 stores throughout the Americas, Europe, Asia and Australia. At Jan. 6, 2008, the company's total debt, including capital lease obligations was $757.8 million compared with $984.2 million in Dec. 31, 2006. * * * As reported in the Troubled company Reporter on Dec. 28, 2007, Fitch Ratings affirmed Blockbuster Inc.'s long-term Issuer Default Rating at 'CCC' and the senior subordinated notes at 'CC/RR6'. The rating outlook is stable. BLOUNT INTERNATIONAL: Shareholders Declare 5% Equity Ownership -------------------------------------------------------------- Gates Capital Management, Inc., Gates Capital Partners, L.P., ECF Value Fund, L.P., ECF Value Fund II, L.P., ECF Value Fund International, Ltd., and Jeffrey L. Gates beneficially owns 2,372,686 shares of Blount International Inc. common stock, representing 5% of the company's outstanding shares. Blount International Inc. (NYSE: BLT) -- http://www.blount.com/-- is a diversified international company operating in two principal business segments: Outdoor Products and Industrial and Power Equipment. The company's Outdoor Products segment provides chain, bars and sprockets to the chainsaw industry, accessories to the lawn care industry and concrete cutting saws. As reported in the Troubled Company Reporter on April 29, 2008, Blount International Inc.'s balance sheet at Dec. 31, 2007, showed total assets of $411.9 million and total liabilities of $466.0 million, resulting in a total shareholders' deficit of $54.1 million. BMB MARKETPLACE: Files Schedules of Assets and Liabilities ---------------------------------------------------------- Corey Landings Development, LLC delivered to the United States Bankruptcy Court for the Middle District of Florida its schedules of assets and liabilities disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $35,000,000 B. Personal Property 26 C. Property Claimed as Exempt D. Creditors Holding $41,745,066 Secured Claims E. Creditors Holding 0 Unsecured Priority Claims F. Creditors Holding 1,690,473 Unsecured Nonpriority Claims ------------ ------------- TOTAL $10,389,852 $8,471,918 Based in Scottsdale, Arizona, BMB Marketplace, LLC filed for Chapter 11 protection on Mar. 21, 2008 (Bankr. D. Ariz. Case No. 08-02945). Lyndon B. Steimel, Esq. represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts both of $10 million to $50 million. BNG HOLDINGS: Case Summary & 43 Largest Unsecured Creditors ----------------------------------------------------------- Lead Debtor: BNG Holdings, LLC 1584 Parkside Avenue Trenton, NJ 08638 Bankruptcy Case No.: 08-11615 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Hamilton Memorial Home, Inc. 08-18132 Parkside Memorial Home, Inc. 08-18118 dba Parkside Brenna-Cellini Memorial Funeral Home Type of Business: The Debtors offer payment services. See: http://bngholdingsinc.com/ Chapter 11 Petition Date: January 30, 2008 Court: District of New Jersey (Trenton) Judge: Michael B. Kaplan Debtors' Counsel: Joseph Markowitz, Esq. Markowitz, Gravelle & Schwimmer 3131 Princeton Pike Lawrenceville, NJ 08648 Tel: (609) 896-2660 http://www.mgs-law.com/ Total Assets: $1,400,000 Total Debts: $1,156,055 A. BNG Holdings, LLC's List of Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Donald Cox personal loan $50,000 865 Lower Ferry Road Suite 120 Ewing, NJ 08638 Internal Revenue Service federal taxes unknown District Director Insolvency Function P.O. Box 724 Springfield, NJ 07081-0724 New Jersey Division of state taxes unknown Taxation Bankruptcy Section P.O. Box 269 Trenton, NJ 08695 B. Hamilton Memorial Home, Inc's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service Federal Taxes $54,837 District Director Insolvency Function Springfield, NJ 07081-0724 American Casket $16,228 1859 Stout Drive Warwick, PA 18974 Milso Industries, Inc. $12,604 The York Group P.O. Box 200557 Pittsburgh, PA 15212-0557 NJ Division of Labor $11,000 Proformance Insurance Co. $10,454 New Jersey Division of CBT, NJ 927, GIT, $10,281 Taxation State taxes Trentonian $8,945 Bartolomei Pucciarelli, LLC Accounting Services $8,805 Linowitz & Co. Accounting Services $6,100 Walker's Lawn Service $5,358 Oxford Health Plans $4,132 PSE&G Co. $3,969 Joe Carney Funeral Supplies, $2,170 LLC One Beacon Insurance $1,855 Empire Funeral Supply $1,742 Panfili Heating & Air $1,450 Conditioning Fiori's Flowers $1,239 Liturgical Publications $1,200 Bucks County Courier Times $874 Champion Co. $801 C. Parkside Memorial Home, Inc's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Yorktown Casket Co. $56,090 654 Lincoln St. York, PA 17401-3374 Internal Revenue Service Federal Taxes $54,837 District Director Insolvency Function Springfield, NJ 07081-0724 Campbell Vault Co. $50,000 219 Delaware Ave. Bordentown, NJ 08505 American Casket $16,228 Milso Industries, Inc. $12,604 Proformance Insurance Co. $10,454 New Jersey Division of CBT, GIT, NJ927, $10,281 Taxation State taxes Trentonian $8,945 Bartolomei Pucciarelli $8,805 Walker's Lawn Service $5,358 Oxford Health Plans $4,132 PSE&G Co. $3,969 Joe Carney Funeral Supplies, $2,170 LLC One Beacon Insurance $1,855 Empire Funeral Supply $1,742 Panfili Heating & Air $1,450 Conditiioning Fiori's Flowers $1,239 Liturgical Publications $1,200 Bucks County Courier Times $874 Champion Co. $801 BOMBARDIER INC: Moody's Holds Ba2 Ratings; Changes Outlook to Pos. ------------------------------------------------------------------ Moody's Investors Service changed the rating outlook for Bombardier Inc. to positive from stable and affirmed the company's Ba2 corporate family, Ba2 senior unsecured and SGL-2 liquidity ratings. The outlook change reflects Moody's belief that Bombardier's record backlog levels and strong demand from international end-markets positions the company for continued revenue growth, profitability improvements and cash flow generation into the medium term. Coupled with the meaningful reduction in debt levels that occurred towards the end of the company's last fiscal year, the balance of the company's key credit metrics are likely to evidence continuing improvement, bolstering support for upwards rating momentum. These ratings have been affirmed: -- Corporate family rating at Ba2 -- Probability of default rating at Ba2 -- Senior unsecured debt rating at Ba2 (to LGD4, 52% from LGD4, 54%) -- Speculative grade liquidity rating at SGL-2 Outlook Actions: -- Outlook, Changed To Positive From Stable Darren Kirk, lead analyst with Moody's, said that "Bombardier's sizeable backlog in each of its two business segments positions the company for further growth and margin improvement beyond the gains achieved in fiscal 2008". Bombardier's fiscal 2008 operating results evidenced continued improvement driven by strong demand for business jets, turboprops and Transportation segment products and services. A prolonged period of declining demand for regional jet products appears to have stabilized, which also contributed to the good results. Despite the poor financial condition of the airline industry and challenging economic backdrop in the U.S., reducing dependence on the U.S. market for cyclical aerospace activity and record backlog levels in each of Bombardier's business segments, provide the basis for continued operating momentum. Targeted operating margins of 8% in the Aerospace segment have essentially been attained while Transportation segment margins continue to improve toward the company's goal of 6% by fiscal 2010. The company's ability to further enhance current coverage and cash flow metrics through sustained margin improvement remains a key factor influencing the rating. Lower interest costs associated with recent debt reductions should amplify improvement to key credit metrics through fiscal 2009 from levels that have in recent history constrained the Ba2 rating. Bombardier's liquidity profile is good summarized by significant balance sheet cash with no near term debt maturities, and a positive free cash flow profile. Lack of committed bank operating lines for funded borrowing constrains the liquidity rating at SGL- 2. The Company's good liquidity profile and favorable cash flow trends may eventually be counterbalanced by incremental financial and operating risks associated with the potential investment in the CSeries mainline aircraft. Kirk added, "The company's improving credit profile should nonetheless provide the capacity to absorb these risks within context of its rating and outlook". Bombardier Inc., headquartered in Montreal, Quebec, is a diversified manufacturing company involved in the aerospace and transportation markets. BON-TON STORES: State Street Owns 5.3% of Outstanding Stake ----------------------------------------------------------- State Street Bank and Trust Company, as trustee, declares that it beneficially owns 784,929 shares of The Bon-Ton Stores, Inc. common stock, representing 5.3% of the company's outstanding common stock. York, Pennsylvania-based The Bon Ton Stores Inc. (Nasdaq: BONT) -- http://www.bonton.com/-- operates 280 department stores, which includes eleven furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, under the Parisian nameplate, three stores in the Detroit, Michigan area. The stores offer a broad assortment of brand-name fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. * * * As reported in the Troubled Company Reporter on March 17, 2008, Fitch Ratings affirmed The Bon-Ton Stores, Inc.'s 'B' issuer default rating. The rating outlook has been revised to negative from stable. As reported in the Troubled Company Reporter on Feb. 13, 2008, Moody's Investors Service downgraded the corporate family rating of Bon-Ton Stores Inc. to B2 from B1, downgraded the probability of default rating to B2 from B1, and downgraded the rating on the $510 million senior unsecured notes to Caa1 (LGD 5, 78%) from B3 (LGD 5, 83%). The company's speculative grade liquidity rating of SGL-3 was affirmed. The outlook on all ratings is stable. BRUCE ROSEMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Bruce Roseman 125 South Broadway White Plains, NY 10605 Bankruptcy Case No.: 08-22445 Chapter 11 Petition Date: April 3, 2008 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtor's Counsel: Wayne M. Greenwald Wayne M. Greenwald, P.C. 99 Park Avenue Suite 800 New York, NY 10016 Tel: (212) 983-1922 Fax: (212) 953-7755 E-mail: grimlawyers@aol.com Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million Debtor's 16 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John Murphy used to purchase $125,000.00 remaining interest in 125 S. Broadway personal loan $90,000.00 Personal Loan $45,000.00 Chase Bank Living expenses $125,000.00 Internal Revenue Service 2006 Taxes $65,000.00 11601 Roosevelt Blvd PO Box 21126 Philadelphia, PA 19114 American Express -- $32,000.00 Credit Line $17,000.00 Chase Manhattan 2007 Porche $42,375.00 Boxter ($34,000.00 secured) Chase Auto Finance -- $41,341.71 Denise Fuchs personal loan for $40,000.00 living expenses Jack Hughes, Esq. Prof. services for $31,000.00 dissolution of practice. Timothy Brennan, Esq. Legal services in $26,990.35 connection with matrimonial litigation. Eisner, LLP Accounting $23,000.00 Services for dissolution of business RSM McGladrey Personal and $21,500.00 business service in connection with dissolution of practice; personal tax service. New York State Dept Tax & 2007 taxes $15,000.00 New York State Dept Tax & 2006 taxes $15,000.00 Chubb Insurance -- $7,806.00 Mark A. Modano LLC $7,258.00 Chase Credit Card $5,240.00 Elaine Lieberman $5,000.00 CABLEVISION SYSTEMS: Unit Buying Sundance Channel for $496 Million ------------------------------------------------------------------ Rainbow Media Holdings LLC, a subsidiary of Cablevision Systems Corporation, reached an agreement to acquire Sundance Channel for $496 million. Sundance Channel is owned by General Electric Company's NBC Universal, CBS Corporation's Showtime Networks, and entities controlled by Robert Redford. Under the terms of the transaction, the total consideration will be paid through a tax-free exchange of approximately 12.7 million shares of common stock of General Electric Company held by Rainbow Media, with a cash adjustment at closing based upon the value of the General Electric shares in relation to the total purchase price. Under the transaction structure, General Electric Company will receive all of the GE Shares and the CBS and Redford entities will receive cash in exchange for their interests. In connection with the exchange of the GE shares, Cablevision will repay the monetization debt associated with such shares. Upon completion of the transaction, Rainbow Media will own a 100% interest in Sundance Channel. The completion of this transaction is subject to certain customary closing conditions. The company states that for Rainbow Media, the purchase expands and strengthens its entertainment presence with the addition of a recognizable and desirable brand that attracts loyal viewers. Sundance Channel will join AMC, IFC and WE tv as another network within Rainbow Media's portfolio of national services. The company relates that for NBC Universal, Showtime and Robert Redford, the sale of Sundance Channel highlights their success in developing this heralded programming service. After the transaction, Sundance Channel relates that it will benefit from its continuing relationship with Mr. Redford, one of the most respected, admired and successful people in entertainment. "We are always looking for strategic opportunities for our business and Sundance Channel adds another valuable asset to Rainbow's award-winning lineup of programming networks," said James L. Dolan, Cablevision president and CEO. "Programming that attracts a dedicated viewing audience has always been Rainbow's mission and we think that Sundance Channel is an excellent fit and consistent with that rich heritage," stated Tom Rutledge, Cablevision's chief operating officer. "We also believe that with Rainbow's resources we will have a tremendous opportunity to build upon Sundance Channel's success," "Robert Redford is a true visionary and, through everything he has accomplished with Sundance Channel, has made immeasurable contributions to the world of independent film," Joshua Sapan, Rainbow Media president and CEO, said. "Rainbow has experienced firsthand how impressive original programming like Mad Men and Breaking Bad can distinguish a network's brand. Sundance Channel has already established its own distinct voice through impressive programming like The Green and Iconoclasts and our vision is to build on this type of original content, further strengthening the uniqueness of the network." "The Sundance Channel team, led by CEO Larry Aidem, has exceeded every expectation I had for this venture," Robert Redford, Sundance Founder, said. "Innovation and integrity in both business and creative models have continually resulted in new ways of bringing dynamic programming to wider audiences." "We look forward to working with Rainbow to further distinguish Sundance Channel and to create even greater value for this important service," he continued. "The challenges facing an independent programmer are profound," Larry Aidem, Sundance Channel president and CEO, commented. "Rainbow unquestionably has the programming and distribution prowess necessary to run cable networks successfully over the long term. The opportunity to be a wholly owned, core asset in the Rainbow/Cablevision portfolio ensures a very bright future for Sundance Channel." About Sundance Channel Sundance Channel was launched in 1996 under the direction of Robert Redford. Sundance Channel reaches nearly 30 million subscribers and offers a diverse and engaging selection of films, documentaries and original programs. Along with films and documentaries, Sundance Channel's original programming provides a mix of series and specials that promote artistic freedom of expression and the impact that expression can have on the world. Rainbow Media Holdings LLC is a subsidiary of Cablevision Systems Corporation. Rainbow Media is a producer of multi-platform content for global distribution, creating and managing some of the world's most compelling and dynamic entertainment brands, including AMC, IFC, WE tv, Lifeskool, Sportskool, and VOOM HD Networks. About Cablevision Systems Cablevision Systems Corporation (NYSE: CVC) -- is a cable operator in the United States that operates cable programming networks, entertainment businesses and telecommunications companies. As of Dec. 31, 2006, the company served approximately 3.1 million basic video subscribers in and around the New York City metropolitan area. Through its wholly owned subsidiary, Rainbow Media Holdings LLC, Cablevision owns interests in and manages numerous national and regional programming networks, the Madison Square Garden sports and entertainment businesses, and cable television advertising sales companies. Through Cablevision Lightpath Inc., its wholly owned subsidiary, the company provides telephone services and Internet access to the business market. The company operates in three segments: Telecommunications Services, Rainbow and Madison Square Garden. As reported in the Troubled Company Reporter on March 11, 2008, Cablevision Systems Corporation balance sheet at Dec. 31, 2007, showed total assets of $9.1 billion and total debts of $14.2 billion, resulting in a $5.0 billion stockholders' deficit. * * * As reported in the Troubled Company Reporter on Feb. 11, 2008, Moody's Investors Service upgraded to Ba3, from B1, the corporate family ratings for Cablevision System Corporation and its wholly- owned indirect subsidiary Rainbow National Services LLC. The rating outlooks for both companies were also changed to stable from developing. CABLEVISION SYSTEMS: Sundance Buyout Won't Affect S&P's 'BB' Rtng. ------------------------------------------------------------------ Standard & Poor's Ratings Services said that Bethpage, N.Y.-based Cablevision Systems Corp.'s (BB/Negative/--) announcement that it has agreed to purchase the Sundance Channel does not affect the company's corporate credit rating or outlook. Approximately $11.5 billion of debt is outstanding. Under terms of the transaction, Cablevision subsidiary Rainbow Media Holding LLC will acquire 100% of Sundance Channel through a tax-free exchange of General Electric Co. common shares, plus cash for a total consideration of approximately $496 million. The Sundance Channel acquisition bolsters Rainbow Media's portfolio of cable networks. S&P anticipate that Cablevision will incur only a modest amount of debt to repay the monetization debt associated with the General Electric stock in order to free up those shares for the exchange. Coupled with S&P's expectation that Sundance Channel will be free cash flow accretive, the transaction does not meaningfully affect Cablevision's consolidated credit quality. S&P will, however, examine details of the acquisition's debt financing component to determine if any individual recovery ratings might be affected. Cablevision's ratings continue to recognize the well-above average operating metrics generated by the company's three million well-clustered, metropolitan New York cable subscribers. However, the rating does incorporate the increasing level of competition from Verizon Communications Inc.'s FiOS video service. Importantly, Cablevision's demonstrated willingness to undertake major shareholder-friendly actions is a significant rating constraint and the negative outlook recognizes that the company has little capacity for special dividends or stock repurchases at the current rating level. CABLEVISION SYSTEMS: Newsday Bid Gets Thumbs Down from Consumers ---------------------------------------------------------------- Consumer groups disfavor Cablevision Systems Corporation's leading bid for Tribune Company's Newsday, The Deal.com reported. As reported in the Troubled Company Reporter on May 1, 2008, Cablevision Systems offered to acquire Newsday for $650 million or $70 million more than the previous offers of News Corp. and Daily News owner Mortimer Zuckerman. According to The Deal, public interest advocates have expressed concern about a Cablevision purchase, but they admit that neither the Federal Communications Commission nor the Department of Justice would oppose it. The Deal quotes Andrew Schwartzman