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 12, 2008, Vol. 12, No. 112 Headlines AEQUICAP INSURANCE: A.M Best Cuts IC Rating to 'b' from 'bb-' ALON USA: Agrees to Buy Valero's Krotz Springs Refinery for $333MM ALON USA: Valero Energy Deal Prompts S&P to Retain Negative Watch AMERICAN AXLE: UAW Chief Balks at GM's $200 Million Aid to Axle AMERICAN HOME: Banks Assert $56,000,000 in Transfer Claims ATARI INC: Asks Nasdaq to Review Panel's Move to Delist Securities ATARI INC: Gets $20 Million Loan from Infogrames Entertainment AVENTINE RENEWABLE: Moody's Affirms B2 Corporate Family Rating BLOCKBUSTER INC: Obtains Authority to Review Circuit City Books BP METALS: S&P Revises Outlook to Negative; Holds 'B+' Rating BUCKINGHAM CDO: Moody's Slashes Ratings to Ca on Two Note Classes BUFFETS HOLDINGS: Court Approves Sale Bonus to Tahoe Joe's Pres. BUFFETS HOLDINGS: Court Approves Quinn Emanuel as Counsel BUFFETS HOLDINGS: Taps Assessment Technologies as Tax Consultants CAPITAL RESERVE: Fitch Withdraws 'Bq' Q-IFS Rating CARINA CDO: Moody's Lowers Rating on $1.05BB Notes to C from B3 CASH TECHNOLOGIES: AMEX Accepts Plan to Meet Listing Compliance CENTRO NP: Moody's Keeps Rtng on Review on Parent's Debt Extension CHL MORTGAGE: S&P Puts Default Rating on Class B-4 Certificates CITIZENS COMMS: S&P Cuts Rating to BB from BB+ with Stable Outlook CLASS 2006-12: Moody's Puts Ba2 Rating on $5MM Notes Under Review COLLECTIVE BRANDS: Gets S&P Neg. Outlook on Adidas Suit Verdict COLLECTIVE BRANDS: Gets Moody's Neg Outlook on Adidas Suit Ruling COUDERT BROTHERS: Retirees' Suit Transferred to Bankruptcy Court COMFORCE CORP: March 30 Balance Sheet Upside-Down by $8.3 Million COMMODORE CDO: Poor Credit Quality Cues Moody's to Cut Ratings COREL CORP: Appoints Kris Hagerman as Interim Chief Executive COUNTRYWIDE FINANCIAL: Court Junks Settlement with Homeowner COUNTRYWIDE MORTGAGE: Fitch Takes Actions on Various Classes DANA CORP: Ad Hoc Panel Wants Court Nod on $3.5 Mil. Legal Fee DANA CORP: Appaloosa Wants Court Nod on $2.5MM Legal Fees Payment DELPHI CORP: March 31 Balance Sheet Upside-Down by $14 Billion DELTA FINANCIAL: Trims Board & Management; CEO, CFO Give up Posts DRS TECHNOLOGIES: Strategic Discussions Won't Affect S&P's Rating DUN & BRADSTREET: March 31 Balance Sheet Upside-Down by $482.5 MM ELECTRICAL COMPONENTS: Filing Delay Prompts Moody's to Junk Rtngs. EMISPHERE TECH: March 31 Balance Sheet Upside-Down by $17.2MM FREESCALE SEMICONDUCTOR: Buys Back Ex-CEO's Interests for $5.4MM GCI INC: Execution Risks Cue Moody's to Chip CF Rating to B1 GENERAL MOTORS: $200MM Aid to Axle Sparks Criticism from UAW Chief GEORGIA GULF: Weak Performance Cues S&P to Junk Corp. Credit Rtng. GRENADIER FUNDING: Moody's Reviews B2 Rating on $15MM Notes HARBORVIEW MORTGAGE: S&P Puts 'D' Rtng. on S. 2005-6 Cl. B-4 Cert. IMAC CDO: Moody's Junks Ratings on $300MM Floating Rate Notes IMAX CORP: Moody's Changes Outlook to Pos. on Improved Liquidity INDYMAC RESIDENTIAL: S&P Chips Ratings on Four Certificate Classes JP MORGAN: Fitch Rates $4.372MM Class T Certificates B- JWM PARTNERS: Allows Investors to Get Money Ahead of Schedule KGEN LLC: S&P's 'BB' Rating Unaffected by Changes in Board KINGSWAY FINANCIAL: Gets Waiver Over Compliance with Credit Deal MAGELLAN HEALTH: Moody's Withdraws Rtngs After Full Loan Repayment MARCAL PAPER: Group Objects to Environmental Settlements MASTR ADJUSTABLE: S&P Downgrades Ratings on 13 Certificate Classes MASTR ALTERNATIVE: S&P Junks Ratings on Seven Certificate Classes MCKINLEY II: Moody's Slashes Rating on $16.5MM Notes to Ca MOHEGAN TRIBAL: S&P Holds 'BB-' Rating; Revises Outlook to Neg. NCI BUILDING: S&P Changes 'BB' Rating on $125MM Credit to 'BB+' ORAGENICS INC: Posts $791,636 Net Loss in 2008 First Quarter ORCHARD PARK: Moody's Chips Aa3 Rating on $51.8MM Notes to Ba3 PAPPAS TELECASTING: Files Chapter 11 Protection in Delaware PAPPAS TELECASTING: Case Summary & 20 Largest Unsecured Creditors PHARMANET DEVELOPMENT: S&P Holds Rating; Revises Outlook to Neg. PIONEER VALLEY: Moody's Junks Rating on $29.5MM Class C Notes POINTS INTERNATIONAL: March 31 Balance Sheet Upside-down by $6MM PUBLIC SERVICE: S&P Assigns 'BB+' Rating on $350MM Senior Notes RACE POINT: S&P Lifts Rating on Three Note Classes to BB from BB- REMINGTON ARMS: S&P Lifts Corporate Credit Rating to B from B- RH DONNELLEY: S&P Chips Corporate Credit Rating to B+ from BB- SHARPER IMAGE: Court Approves Financing Agreement with AICCO SHARPER IMAGE: Stay Lifted to Let American Express End Promo SHARPER IMAGE: Hearing on Bid to Restrict Equity Trades Set May 14 SIRVA INC: Discloses New Directors After Plan Confirmation SIRVA INC: DIP Deal Amendment Allows Share Sale to Picot, Irving SIRVA INC: Files Motion to Extend Removal Period to Sept. 5 SPECTRUM BRANDS: March 30 Balance Sheet Upside-Down by $232.9MM TEXAS INTERNATIONAL: Fitch Withdraws 'Bq' Q-IFS Rating TOM'S FOODS: PBGC to Meet With Members of Company's Pension Plan TRIBECA PARK: Moody's Assigns Ba2 Rating on $10MM Class D Notes TRIBUNE CO: Cablevision Likely Winner; News Corp. Withdraws Bid TRIBUNE CO: March 30 Balance Sheet Upside-Down By $2 Billion TROPICANA ENT: Obtains Interim OK to Use LandCo's Cash Collateral TROPICANA ENT: Wants Access to OpCo Lenders' Cash Collateral TROPICANA ENT: Wants Statements & Schedules Filing Moved to July 4 TTM TECH: Moody's Says Ratings Unmoved by $143.75MM Notes Offer VICORP RESTAURANTS: Can Hire Reed Smith as Bankruptcy Counsel VICORP RESTAURANTS: Can Hire Grubb & Ellis as Real Estate Advisor VICORP RESTAURANTS: Wants to Hire Clifton Gunderson as Accountant VONAGE HOLDINGS: March 31 Balance Sheet Upside-Down by $82 Million WESTERLY HOSPITAL: Moody's Cuts Rating to B2 on Poor Liquidity WINDSOR QUALITY: Moody's Puts Ba3 Corp. Family Rating Under Review WILLIAMS PARTNERS: Fitch Lifts Issuer Default Rtng. to BB+ from BB X-RITE INC: Posts $16.8 Million Net Loss in 2008 First Quarter ZIFF DAVIS: Allowed to Sign New Contracts with CRO, Ex-CEO ZIFF DAVIS: Peter Weedfald is Named New President * S&P Lowers Ratings on 23 Classes from Four CDO Transactions * Moody's Says State Housing Delinquencies Rise in 2007 * Moody's Says Apparel Industry's Outlook Remains Negative * BOND PRICING: For the Week of May 5 - May 9, 2008 ********* AEQUICAP INSURANCE: A.M Best Cuts IC Rating to 'b' from 'bb-' ------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to C++(Marginal) from B-(Fair) and issuer credit rating to "b" from "bb-" of AequiCap Insurance Company. The outlook for both ratings is negative. The ratings reflect AIC's vulnerable risk-adjusted capitalization, significantly elevated underwriting leverage, unfavorable loss reserve development trends and dependence on reinsurance. Risk- adjusted capitalization in 2007 and 2006 was negatively impacted by substantial adverse loss reserve development from accident years 2002 through 2005 in the commercial automobile line of business. This adverse development resulted in a precipitous decline in surplus, partially offset by a capital contribution. A significant portion of the unfavorable development that occurred in 2007 was due to the commutation of a reinsurance contract in early 2006. Although AIC has taken substantial corrective actions to improve and track claims handling, the outlook reflects the execution risk associated with management's corrective actions to improve earnings and risk-adjusted capitalization. The negative rating factors are modestly offset by the advantage AIC receives from its affiliated managing general underwriter, AequiCap Program Administrators, through which management has the flexibility to shift business to and from AIC, depending on market conditions. In addition, demonstrated financial support from the parent organization is evidenced by significant capital contributions over the last five years. However, debt at the parent organization has increased in recent years, resulting in high financial leverage. ALON USA: Agrees to Buy Valero's Krotz Springs Refinery for $333MM ------------------------------------------------------------------ Alon USA Energy, Inc. disclosed on May 8, 2008 that it has executed a definitive purchase agreement to acquire the Krotz Springs refinery from Valero Energy Corporation. The purchase price of this transaction consists of $333 million in cash plus an amount for working capital, including inventories, to be determined at closing. Also, both parties have agreed to a five year off-take agreement along with a service agreement for one year. Valero is eligible to receive potential "earn-out" payments for three years following closing. The transaction is expected to close during the latter portion of the second quarter or early in the third quarter of 2008, following satisfaction of customary closing conditions, including regulatory approvals. The Krotz Springs refinery, with a nameplate crude capacity of approximately 83,100 barrels per day (bpd), services multiple demand centers in the Southeast and East Coast markets through the low-cost Colonial pipeline. The 2007 refined product mix from the Krotz Springs refinery, with a current 6.5 complexity rating, consists of approximately 96% light products, with the following yields: 44% gasoline, 44% distillates and light cycle oils, 8% petrochemicals and 4% of heavy products. David Wiessman, Executive Chairman of the Board for Alon USA, commented, "Krotz Springs refinery, which is being acquired at an attractive price, increases our refining capacity by 50%, reduces our risk profile and enhances our strategic objective to grow the Company and provides a new platform for our integrated business model. I want to thank Credit Suisse, Wachovia and Bank of America for their support of this transaction and to Alon Israel and its shareholders for the trust they have shown in the management of Alon USA by providing cash to support this deal." "This refinery ranks among the lowest operating cost US refineries and placed in the first quartile for lowest maintenance costs, refinery utilization and liquid volume recovery in the latest Solomon survey," said Jeff Morris, Alon's President and CEO. "We believe we can further improve operations at the refinery with minimal costs and we plan to upgrade the refinery to produce low sulfur diesel and to process a Mars-like crude slate. We are also signing a 5-year off-take agreement with Valero for High Sulfur Diesel and Light Cycle Oil that should provide Alon with significant flexibility in terms of the timing of the anticipated refinery upgrades. "We are very pleased to have joined ranks with a strong management team and group of employees that have achieved one of the best track records in the industry. We anticipate the existing management team to remain at the refinery following closing of the transaction, which we believe will facilitate the integration of Krotz Springs into our refinery portfolio under our current corporate infrastructure." The Krotz refinery is strategically located with the majority of its crude supply originating from two major pipelines and has a crude storage capacity of 665,000 barrels. Financing for the transaction is expected to include a $245 million term loan arranged by Credit Suisse, which was also the M&A advisor for Alon in this deal. In addition, Wachovia has provided a commitment for a $425 million revolver facility with an accordion feature of an additional $75 million to support ongoing working capital needs and Alon has arranged for a $50 million letter of credit facility to support substantial hedging. This transaction is expected to generate strong free cash flow that should enable substantial delevering of the aforementioned debt in three years. Headquartered in Dallas, Texas, Alon USA Energy, Inc. -- http://www.alonusa.com-- is an independent refiner and marketer of petroleum products, operating primarily in the South Central, Southwestern and Western regions of the United States. The Company owns and operates four sour and heavy crude oil refineries in Texas, California and Oregon, with an aggregate crude oil throughput capacity of approximately 170,000 barrels per day. Alon markets gasoline and diesel products under the FINA brand name and is a leading producer of asphalt. Alon also operates more than 300 convenience stores in West Texas and New Mexico under the 7-Eleven and FINA brand names and supplies motor fuels to these stores from its Big Spring refinery. In addition, Alon supplies approximately 800 additional FINA branded locations. ALON USA: Valero Energy Deal Prompts S&P to Retain Negative Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Alon USA Energy Inc. (B+/Watch Neg/--) will remain on CreditWatch with negative implications following the company's announcement that it has agreed to purchase Valero Energy Corp.'s refinery at Krotz Springs, Louisiana. S&P initially placed the ratings on CreditWatch with negative implications on Feb. 20, 2008, following the fire at and subsequent closure of Alon's Big Spring, Texas, refinery. Alon, an independent refining and marketing company, will pay cash of $333 million and an as yet undetermined amount for working capital, including inventories, for the 85,000-barrel- per-day refinery. "While the Krotz Springs refinery will add diversity to Alon's asset portfolio and product mix," said Standard & Poor's credit analyst Paul Harvey, "we are concerned about the impact of the purchase on debt leverage at this time of weak refining margins and limited throughput capacity at the Big Spring refinery." In addition, S&P remain concerned about Alon's ability to meet its July 2008 target for the Big Spring refinery's return to full capacity. If Big Spring faces material delays, Alon's currently adequate liquidity could erode, resulting in higher debt leverage at the same time it finances the Krotz Springs acquisition. AMERICAN AXLE: UAW Chief Balks at GM's $200 Million Aid to Axle --------------------------------------------------------------- United Auto Workers union president Ron Gettelfinger criticized General Motors Corp.'s $200 million aid to American Axle & Manufacturing Holdings Inc., saying that instead of resolving the labor dispute, GM's action will make the talks more difficult, John D. Stoll of The Wall Street Journal, citing a radio interview, reports. As reported in the Troubled Company Reporter on May 9, 2008, GM agreed to provide Axle with upfront financial support capped at $200 million to help fund employee buyouts, early retirements and buydowns to facilitate a settlement of the work stoppage. WSJ relates that the UAW chief predicts that Axle will make firm demands following GM's move. The auto supplier now intends to close a factory in Cheektowaga, New York. Axle believes that the labor protest will be settled either if the UAW eases off or GM intervenes, WSJ quotes people familiar with the matter. The TCR disclosed on April 24, 2008, that approximately 3,650 associates are represented by the UAW at five facilities in Michigan and New York affected by the strike. AAM and the UAW are working to reach a new collective bargaining agreement for the original U.S. locations. 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. 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. AMERICAN HOME: Banks Assert $56,000,000 in Transfer Claims ---------------------------------------------------------- American Home Mortgage Investment Corp. and its debtor-affiliates sent parties-in-interest in their cases a notice regarding the deadline for filing proofs of claim in connection with any assumed contracts sold together with the the Debtors' mortgage loan servicing business. In response, Deutsche Bank National Trust Company, Citibank, N.A., U.S. Bank, National Association, Wells Fargo Bank, N.A., and The Bank of New York, separately asserted claims on account of transfer costs: Bank/Claimant Claim Amount ------------- ------------ Deutsche Bank $54,882,588 Citibank, N.A. 935,662 U.S. Bank, N.A. 764,560 Wells Fargo Bank 61,810 Bank of New York 51,772 Deutsche Bank, et al., assert rights to payment for transfer costs under certain mortgage loan agreements with the Debtors, and other parties. Their claims also account for legal fees, necessary costs and bank default administration fees. 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. 36; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATARI INC: Asks Nasdaq to Review Panel's Move to Delist Securities ------------------------------------------------------------------ Atari Inc. plans to request a review from the Nasdaq Listing and Hearing Review Council, which could alter or dismiss the Nasdaq Listing Qualifications Panel's determination to delist Atari Inc.'s securities from the Nasdaq Global Market and to suspend trading of Atari Inc.'s shares effective May 9, 2008. On May 7, 2008, Atari Inc. received a letter from The Nasdaq Stock Market stating the Panel's action on Atari Inc.'s securities. The request for review will not delay the suspension of trading. Atari Inc. expects to be quoted on the Pink Sheets, an electronic quotation service maintained by Pink Sheets LLC. The Pink Sheets allow continued trading of securities of delisted companies. Atari Inc. expects its common stock to be traded on the Pink Sheets under the symbol "ATAR" or "ATAR.PK". Atari Inc.'s common stock may also be quoted on the OTC Bulletin Board(R), a regulated quotation service for over-the-counter securities, provided one or more market makers apply to quote Atari Inc.'s securities. On Dec. 21, 2007, the Nasdaq Listing Qualifications Department notified Atari Inc. that, pursuant to Nasdaq Marketplace Rule 4450(e)(1), unless the market value of Atari Inc.'s publicly held shares maintained an aggregate market value of $15 million or more for a minimum of 10 consecutive business days prior to March 20, 2008, Atari Inc.'s securities would be subject to delisting. The value of Atari Inc.'s publicly held shares did not reach that level within the required period, and on March 24, 2008, the Nasdaq Listing notified Atari Inc. that the Nasdaq Staff had determined that Atari Inc.'s securities were subject to delisting unless Atari Inc. requested a hearing before a Nasdaq Listing Qualifications Panel. Atari Inc. requested a hearing on March 27, 2008, which stayed the delisting process until the hearing was held and the hearings panel delivered a decision. The hearing was held on May 1, 2008. The Nasdaq hearings panel thereafter ruled to proceed with the delisting process and, effective May 9, 2008, Atari Inc.'s common stock will no longer trade on The Nasdaq Global Market. Atari Inc. plans to request that the Nasdaq Listing and Hearing Review Council review the Nasdaq hearings panel decision. Atari Inc. relates that its delisting from The Nasdaq Stock Market will not affect the pending merger transaction with its majority shareholder Infogrames Entertainment S.A. Infogrames holds approximately 51.4% of Atari Inc.'s common shares. About Atari Inc. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -- http://www.atari.com/-- publishes and distributes interactive entertainment software in the U.S. The company's 1,000+ published titles distributed by the company include hard-core, genre- defining franchises such as Test Drive(R); and mass-market and children's franchises such Dragon Ball Z(R). Atari Inc. is a majority-owned subsidiary of France- based Infogrames Entertainment SA, an interactive games publisher in Europe. As reported in the Troubled Company Reporter on Feb. 20, 2008, Atari Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $43.5 million in total assets and $60.3 million in total liabilities, resulting in a $16.8 million total stockholders' deficit. Going Concern Doubt New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. As disclosed on March 21, 2008, the forbearance period granted by BlueBay High Yield Investments (Luxembourg) S.A.R.L., the lender under Atari's senior secured credit facility, has expired and Atari is currently in discussions with BlueBay with respect to, among other things, an extension of the forbearance period. ATARI INC: Gets $20 Million Loan from Infogrames Entertainment -------------------------------------------------------------- Atari Inc. and Infogrames Entertainment, S.A. entered into a credit agreement, under which IESA committed to provide up to $20 million in loan availability at an interest rate equal to the applicable LIBOR rate plus 7% per year, subject to the terms and conditions of the IESA Credit Agreement, in connection with both parties' proposed $11 billion merger agreement reported in the Troubled Company Reporter on May 6, 2008. Atari will use borrowings under the New Financing Facility to fund its operational cash requirements during the period between the date of the Merger Agreement and the closing of the merger. The obligations under the New Financing Facility are secured by liens on substantially all of our present and future assets, including accounts receivable, inventory, general intangibles, fixtures, and equipment. Atari has agreed that it will make monthly prepayments on amounts borrowed under the New Financing Facility of its excess cash. Atari will not be able to reborrow any loan amounts paid back under the New Financing Facility other than loan amounts prepaid from excess cash. Also, the Company is required to deliver to IESA a budget, which is subject to approval by IESA in its commercially reasonable discretion, and which shall be supplemented from time to time. A full-text copy of the IESA Credit Agreement is available for free at http://ResearchArchives.com/t/s?2bb6 Intercreditor Agreement Under an intercreditor agreement among IESA, BlueBay High Yield Investments (Luxembourg) S.A.R.L. and Atari, IESA has agreed that for so long as obligations under the Existing Credit Facility are not discharged, it will: (i) not seek to exercise any rights or remedies with respect to the shared collateral for a period of 270 days (provided that, in any event, IESA may not exercise such rights or remedies while BlueBay is exercising its rights and remedies as to the collateral), (ii) not take action to hinder the exercise of remedies under the BlueBay Credit Facility, and (iii) waive any rights as a junior lien creditor to object to the manner in which BlueBay may enforce or collect obligations under the BlueBay Credit Facility. A full-text copy of the Intercreditor Agreement is available for free at http://ResearchArchives.com/t/s?2bb7 Waiver, Consent and Fourth Amendment The company is party to a credit agreement, dated as of Nov. 3, 2006, and amended on Oct. 23, 2007, further amended on Nov. 6, 2007, and further amended on Dec. 4, 2007, with its lenders, relating to an asset-based secured credit facility consisting of a revolving line of credit in an amount up to $14 million. In order to permit the signing of the merger agreement and the establishment of the new financing facility with IESA, the company entered into a waiver, consent and fourth amendment to the existing credit facility under which, among other things: (i) BlueBay agreed to waive the company's non-compliance with certain representations and covenants under the credit agreement, (ii) BlueBay agreed to consent to the company's entering into the new credit facility with IESA, (iii) BlueBay agreed to consent to the Company's entering into the Merger Agreement with IESA, and (iv) BlueBay and the company agreed to certain amendments to the existing credit facility with respect to the intercreditor agreement referenced above regarding the parties' respective security interests in the company's assets, the company's operational covenants and events of default. A full-text copy of the Waiver, Consent and Fourth Amendment to credit Agreement is available for free at http://ResearchArchives.com/t/s?2bb8 About Atari Inc. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -- http://www.atari.com/-- publishes and distributes interactive entertainment software in the U.S. The company's 1,000+ published titles distributed by the company include hard-core, genre- defining franchises such as Test Drive(R); and mass-market and children's franchises such Dragon Ball Z(R). Atari Inc. is a majority-owned subsidiary of France- based Infogrames Entertainment SA, an interactive games publisher in Europe. As reported in the Troubled Company Reporter on Feb. 20, 2008, Atari Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $43.5 million in total assets and $60.3 million in total liabilities, resulting in a $16.8 million total stockholders' deficit. Going Concern Doubt New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. As reported in the Troubled Company Reporter on March 28, 2008, Atari Inc. received a Staff Determination Letter from the Nasdaq Listing Qualifications Department stating that Atari Inc. has not gained compliance with the requirements of Nasdaq Marketplace Rule 4450(b)(3), and that its securities are therefore subject to delisting from The Nasdaq Global Market. On Dec. 21, 2007, the Nasdaq Listing Qualifications Department notified Atari Inc. that, pursuant to Nasdaq Marketplace Rule 4450(e)(1), unless the market value of Atari Inc.'s publicly held shares, which is calculated by reference to Atari Inc.'s total shares outstanding, less any shares held by officers, directors or beneficial owners of 10% or more, maintains an aggregate market value of $15 million or more for a minimum of 10 consecutive business days prior to March 20, 2008, Atari Inc.'s securities would be subject to delisting. AVENTINE RENEWABLE: Moody's Affirms B2 Corporate Family Rating -------------------------------------------------------------- Moody's Investors Service downgraded the speculative grade liquidity rating of Aventine Renewable Energy Holdings, Inc.'s to SGL-4 (weak liquidity) and affirmed the company's B2 corporate family rating and B3 rating on its senior unsecured notes due 2017. The outlook remains negative. These summarizes the ratings. Aventine Renewable Energy Holdings, Inc. Ratings changes: -- Speculative grade liquidity rating - SGL-4 from SGL-3 Ratings affirmed: -- Corporate family rating - B2 -- Probability of default rating -- B2 -- $300mm Sr unsec notes due 2017 -- B3, LGD5, 76% The downgrade in Aventine's speculative grade liquidity rating follows the disclosure that the company's auction rate securities remain illiquid and that it recorded an unrealized $21.6 million charge to income in the first quarter of 2008 to reduce the carrying value of the $127.2 million of the ARS on its balance sheet as of March 31, 2008, to $105.6 million. Previously, the company was able to sell approximately $84 million of auction rate securities prior to the failed February 8th auction, which resulted in a loss of $1.5 million. However, regular ARS auctions have not resumed and Aventine believes it is unable to liquidate its ARS without incurring significant losses. The SGL-4 liquidity rating reflects cash balances that are expected to be exhausted during 2008 (to fund an estimated $250 million of construction costs for two new ethanol plants slated for completion in the first quarter of 2009 and an addition $10 - $15 million for maintenance capital expenditures), the current unattractive commodity pricing environment, the expectation that cash balances ($74 million as of March 31, 2008) and availability under Aventine's revolver ($132 million as of March 31, 2008) are not sufficient to cover the company's projected capital expenditures over the remainder of 2008, and the general difficult liquidity environment that might preclude the company from raising significant funds from uncommitted sources. There is currently downward pressure on Aventine's corporate family rating due to its liquidity situation. If the company is not able to resolve its liquidity needs in the second quarter of 2008 or if its cash flow from operations falls below levels achieved in the first quarter of 2008, then the corporate family rating could be lowered. Aventine is a producer and marketer in the United States of ethanol used as a blending component for gasoline. It produces ethanol and co-products at its wholly-owned Pekin, Illinois wet milling and dry milling plants, and its 78.4% owned dry milling Aurora, Nebraska plant. Additionally, the firm operates a marketing alliance that pools ethanol from multiple third party producers and sells it nationwide for which it receives a commission. Revenues for the LTM ended March 31, 2008 were approximately $1.6 billion. BLOCKBUSTER INC: Obtains Authority to Review Circuit City Books --------------------------------------------------------------- Circuit City Stores Inc. has let Blockbuster Inc. review its records in connection with the video-rental chain's bid to buy the consumer electronics retailer, various reports say. Circuit City also received a letter from Blockbuster indicating that the company's largest shareholder, Carl Icahn, is willing to buy Circuit City if Blockbuster can't get financing or secure necessary shareholder approval, several reports add. According to the reports, Circuit City Stores hired Goldman Sachs & Co. to explore strategic alternatives, which may include a sale of the company. The Wall Street Journal states that Circuit City's board of directors has not determined to pursue the sale option. WSJ quotes Philip J. Schoonover, chairman, president and chief executive officer of Circuit City as saying: "The decision to allow Blockbuster and Carl Icahn to conduct due diligence should not be taken as an indication that the board has completed its review of the Blockbuster proposal, that the board has taken a position on the company's value or that it has settled upon a particular strategic course of action." WSJ says that recent trading of Circuit City shares suggests investors are skeptical that a deal would happen. Circuit City stock has been trading at less than the offer of $6 to $8 a share, and, despite a 5.9% gain on May 9, it was at $5.07 in 4 p.m. New York Stock Exchange composite trading, WSJ notes. Even inside Blockbuster, there is some skepticism that a deal will materialize, WSJ states citing people familiar with the situation. Blockbuster's bid is based on a multitude of assumptions, and it isn't clear what the company will find when it starts delving into Circuit City's numbers, WSJ indicates. WSJ relates that questions also remain about how well Blockbuster could execute a merger. About Circuit City Stores Inc. Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- is a specialty retailer of consumer electronics, home office products, entertainment software and related services. The company has two segments: domestic and international. About Blockbuster Inc. 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. BP METALS: S&P Revises Outlook to Negative; Holds 'B+' Rating ------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cleveland-based BP Metals LLC to negative from stable. All ratings were affirmed, including the 'B+' corporate credit rating. The company had total debt of roughly $122 million as of Dec. 31, 2007. "The outlook revision reflects the company's limited headroom under its senior leverage covenant, which renders a violation possible as the hurdle becomes steeper in subsequent quarters," said Standard & Poor's credit analyst James Siahaan. BP Metals has seen its profitability reduced as of late, and continued erosion through the end of September could result in a covenant breach, thus placing pressure on liquidity. The speculative-grade ratings on BP Metals reflect the company's leveraged capital structure and exposure to cyclical end markets. Partially offsetting these factors are the company's relatively broad end-market diversity and its competitive position as a supplier of custom-made components in niche markets. S&P could lower the ratings if it becomes apparent that BP Metals cannot generate adequate profitability to remain compliant with its financial covenants. S&P could also lower the ratings if a weaker economic environment and/or continued volatility in the price of scrap steel and other raw materials causes credit measures to deteriorate more than S&P expect. S&P could revise the outlook back to stable if profitability in certain segments is strong enough to improve headroom under financial covenants, or if the company amends its credit agreement to provide adequate headroom. BUCKINGHAM CDO: Moody's Slashes Ratings to Ca on Two Note Classes ----------------------------------------------------------------- Moody's Investors Service has downgraded these notes issued by Buckingham CDO III Ltd. Class Description: Up to $1,350,000,000 Class A ST Notes Due 2051 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: Up to $1,350,000,000 Class A LT Notes Due 2051 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $67,500,000 Class B Secured Floating Rate Notes Due 2051 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ca Class Description: $37,500,000 Class C Secured Floating Rate Notes Due 2051 -- Prior Rating: B2, 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. BUFFETS HOLDINGS: Court Approves Sale Bonus to Tahoe Joe's Pres. ---------------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates obtained authority from the United States Bankruptcy Court for the District of Delaware to pay a sale-related incentive bonus to Greg Graber, Tahoe Joe's, Inc.'s president and chief operating officer. As reported in the Troubled Company Reporter on March 31, 2008, Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, related that before the Petition Date, the Debtors determined that the Tahoe Joe's branded restaurant operations do not fit within their core buffet restaurant chain concept and accordingly commenced a process to sell Tahoe Joe's. Ms. Morgan told the Court that Mr. Graber is uniquely positioned to interface with potential buyers. Along with J.H. Chapman Group LLC, who is being employed by the Debtors to assist in the sale, Mr. Graber will meet with at least two parties who expressed interest in serving as stalking horse bidders for Tahoe Joe's assets. "Chapman will undoubtedly rely on [Mr.] Graber to provide assistance and cooperation in its efforts and to be the primary business contact and conduit through whom all due diligence and negotiations with interested parties will flow," Ms. Morgan said. In addition, Ms. Morgan notes that to maintain Tahoe Joe's as a valuable brand and asset, Mr. Graber will be required to continue to maintain Tahoe Joe's high operational levels and standards on a day-to-day basis while simultaneously spearheading marketing efforts between Tahoe Joe's and interested bidders. To align Mr. Graber's interest with those of Tahoe Joe's estate, the Debtors proposed to implement a sale-based incentive bonus. Ms. Morgan said that the Incentive Plan is designed to provide incentives to Mr. Graber based on the need for Mr. Graber's efforts and expertise to facilitate the entry into and consummation of a transfer event that maximizes the value of Tahoe Joe's assets, and in turn, the net recovery available to Tahoe Joe's estate and creditors. Pursuant to the Incentive Plan, Mr. Graber will be eligible to be awarded a bonus, over and above his base compensation at prepetition levels. In the event of a successful transfer, Mr. Graber would be eligible for a bonus equal to one percent of up to $17,000,000 of the net proceeds and two percent of the net proceeds above $17,000,000. To be eligible for a bonus, Mr. Graber must remain continuously employed by Tahoe Joe's as its chief operating officer or in a capacity superior to that position, from the date of entry into the Incentive Plan through the date of a Transfer Event. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BUFFETS HOLDINGS: Court Approves Quinn Emanuel as Counsel --------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware allowed Buffets Holdings Inc. and its debtor-affiliates to employ Quinn Emanuel Urquhart Oliver & Hedges, LLP, as their special bankruptcy litigation counsel, nunc pro tunc to March 28, 2008, pursuant to Section 327(a) of the Bankruptcy Code and and Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure, As reported in the Troubled Company Reporter on April 16, 2008, Mike Andrews, chief executive officer of Buffets Holdings, Inc., said, the Debtors seek to employ Quinn Emanuel to represent them as special bankruptcy litigation counsel based on the firm's: (a) vast experience in matters concerning bankruptcy litigation, including financing disputes, valuation litigation, and contested confirmations, among others; and (b) extensive experience in handling complex litigation, which makes it especially suited to deal effectively with many of the potential contested issues that may arise in the Debtors' bankruptcy case. Quinn Emanuel has been employed by the Debtors since March 28, 2008, Mr. Andrews relates. As the Debtors' special bankruptcy litigation counsel, Quinn Emanuel will work closely with (i) Young Conaway Stargatt & Taylor, LLP, the Debtors' general bankruptcy and reorganization counsel, (ii) Paul, Weiss, Refkind, Wharton & Garrison LLP, the Debtors' special corporate counsel, and (iii) other professionals as may be retained by the Debtors. Quinn Emanuel's duties is limited to these issues: 1. issues relating to sale-lease back transactions and any related litigation; 2. significant litigation with the Debtors' principal constituencies; 3. issues relating to any anticipated or actual contest in connection with disclosure or confirmation of one or more Chapter 11 plans in the Debtors' cases; and 4. issues relating any anticipated or actual contest in the Debtors' valuation of assets, and any related litigation. Susheel Kirpalani, Esq., a partner at Quinn Emanuel and chairman of the firm's Bankruptcy and Restructuring group, is in charge of the engagement. Quinn Emanuel's professionals will be paid based on the firm's hourly rates: Partners $660 to $950 Other attorneys $380 to $950 Legal Assistants $250 to $280 The firm will be reimbursed for reasonable expenses incurred. Quinn Emanuel has received no fees from the Debtors and holds no retainer fee. Mr. Kirpalani assured the Court that Quinn Emanuel is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). BUFFETS HOLDINGS: Taps Assessment Technologies as Tax Consultants ----------------------------------------------------------------- Buffets Holdings Inc. and its debtor-affiliates ask the United States Bankruptcy Court fort the District of Delaware for authority to employ Assessment Technologies, Ltd., as their property tax consultants under the terms of a service agreement, nunc pro tunc to March 1, 2008. Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, tells the Court that ATL's primary role will be to provide the Debtors with property tax consulting services with respect to appealing tax assessments or challenging tax claim amounts for certain property owned or leased by the Debtors, and for which the Debtors are liable for tax assessments or tax claim amounts. According to Ms. Morgan, ATL is qualified to serve as the Debtors' property tax consultants because the firm has the background and expertise to help the Debtors achieve tax savings which will inure to the benefit of the Debtors' estates, creditors and other parties-in-interest. ALT is also one of the largest ad valorem tax consulting firms in the Southwest and has a good track record of producing tax savings for companies. As the Debtors' property tax consultants, ATL is expected to: * review targeted tax assessments on the property including supporting data, calculations and assumptions produced by the appropriate assessing authority together with the information provided by the Debtors; * analyze economic feasibility of attaining a reduced assessment or tax; * represent the Debtors before the appropriate tax assessing/collecting, or court authorities using all reasonable, appropriate and available means provided by statute or within the Bankruptcy Code to adjust assessment, unclaimed or claimed tax amount; and * upon approval of the Debtors, take any commercially reasonable and lawful action in furtherance of ATL's plan without additional approval requirements including, but not limited to, utilizing any and all local, state or federal remedies ATL deems necessary and appropriate. ATL will be compensated 50% of all the tax savings received by the Debtors as a result of ATL's efforts for each tax year. Tax savings is the aggregate of: (a) the positive difference between the proposed assessed valuation and the final assessed valuation for the property for each tax year's tax rate, multiplied by that year's tax rate. In the event a tax is reduced without adjustment of the corresponding assessed valuation, the positive difference between the beginning tax and the reduced tax will constitute tax savings; (b) refunds, credits, interest, reductions in claims and other tax offsets not otherwise claimed by the client in the ordinary course independent of consultant's advice; (c) reduction in taxes arising from correction of errors in the tax roll for prior tax years; and (d) reduction of statutory penalties, interest or collection fees payable and not otherwise statutorily barred by Bankruptcy code provisions. In the event a final assessed valuation is negotiated in advance of the formal posting of a proposed assessed valuation, the proposed valuation for purposes of determining tax savings will be calculated by adding net capital additions to the property tax account's original assessed value for the prior tax year, subject to reduction for depreciation ordinarily available on account of the taxing jurisdiction's applicable depreciation schedule. ATL is responsible for all expenses incurred in the pursuit of tax savings, including the cost of special property tax counsel legal fees, third party appraisal fees and travel expenses, provided, however, that ATL will provide the Debtors with up to 50 hours of data input for the Debtors' tax input. Any time expended for inputting of the Debtors' tax data that exceeds 50 hours will be compensable directly from the Debtors as general compliance work, at the rate set forth in the Service Agreement. ATL's hourly rates are: Partners $550 Managers 425 Senior Consultants 350 Consultants 250 Professional/Admin. 150 The Service Agreement provides that ATL's fees will be paid by the Debtors within 30 days of the Debtors' actual receipt date of the Tax Savings. James Hausman, Jr., senior vice president of ATL, assures the Court that ATL is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, and it holds no interest adverse as to the matters with respect to which it is to be employed by the Debtors in their Chapter 11 cases. Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). CAPITAL RESERVE: Fitch Withdraws 'Bq' Q-IFS Rating -------------------------------------------------- Fitch Ratings has withdrawn its quantitative insurer financial strength ratings on various life insurance companies that no longer meet Fitch's criteria to be eligible to receive a Q-IFS rating. These ratings are withdrawn by Fitch: Capital Reserve Life Insurance Company (NAIC Code 61573) -- Q-IFS 'Bq'. Texas International Life Insurance Company (NAIC Code 86169) -- Q-IFS 'Bq'. CARINA CDO: Moody's Lowers Rating on $1.05BB Notes to C from B3 --------------------------------------------------------------- Moody's Investors Service has downgraded the rating of one class of notes issued by Carina CDO Ltd. The notes affected by the rating action are: US$1,050,000,000 Class A-1 Floating Rate Notes Due November, 2046; -- Prior Rating: B3 on review direction uncertain -- Current rating: C Carina CDO Ltd. is a collateralized debt obligation backed primarily by a portfolio of RMBS securities and CDO securities. The transaction experienced an event of default under the Indenture . As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, holders of certain Notes may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard, the majority of the Controlling Class directed the Trustee to proceed with the disposition of the Collateral in accordance with the Indenture. The Trustee notified Moody's that it sold all of the Collateral and made a final distribution and applied the proceeds of the liquidation in accordance with applicable provisions of the Indenture on March 5, 2008. In that distribution, according to the trustee, the only noteholders to receive a distribution of liquidation proceeds were holders of Class A-1 Notes. Available funds were not sufficient to pay the Class A-1 Notes in full. The rating actions taken reflect the changes in severity of loss associated with certain tranches and reflect the final liquidation distribution. CASH TECHNOLOGIES: AMEX Accepts Plan to Meet Listing Compliance --------------------------------------------------------------- Cash Technologies, Inc. disclosed that the American Stock Exchange has notified the Company that its revised plan to regain compliance with the continued listing standards of the Exchange has been approved. In November 2007, following the bankruptcy of Champion Parts, Inc., which resulted in the Company writing off the approximate $8 million balance of a promissory note owed by Champion to a Company subsidiary, the Company disclosed that it had been notified by the Exchange that it had fallen out of compliance with the continued listing standards of the Exchange. The Company's plan to regain compliance, which included a requirement to acquire certain assets of Champion, was initially approved by the Exchange in January 2008. Management believes that the acquisition of the Champion assets which the Company announced on May 6, 2008, combined with other anticipated events and balance sheet adjustments, will accomplish the objectives of the Plan, but Plan approval is subject to a determination by the Exchange that will not be finally made until the Company's Form 10KSB is filed for the fiscal year ending May 31, 2008. Until and unless such determination is made, the Company is considered to be out of compliance with the continued listing standards, however the Exchange will permit the Company to remain listed pursuant to an extension ending September 15, 2008. As reported by the Troubled Company Reporter, Cash Technologies' subsidiary, CPI Holdings LLC, completed its acquisition of certain assets of Champion Parts Inc. from PNC Business Credit Inc. for $2.97 million. The assets have a book value of approximately $12.1 million. PNC is the primary lender of Champion Parts. About Cash Technologies Headquartered in Los Angeles, Cash Technologies Inc. (AMEX: TQ) -- http://www.cashtechnologies.com/-- develops and markets innovative data processing solutions in the healthcare and financial services industries. As reported in the Troubled Company Reporter on April 23, 2008, Cash Technologies Inc.'s consolidated balance sheet at Feb. 29, 2008, showed $5,952,493 in total assets, $11,331,245 in total liabilities, and ($116,987) in minority interest, resulting in a $5,261,765 total stockholders' deficit. At Feb. 29. 2008, the company's consolidated balance sheet also showed $1,371,405 in total current assets available to pay $9,883,025 in total current liabilities. Going Concern Doubt Vasquez & Company LLP expressed substantial doubt about Cash Technologies Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended May 31, 2007. The auditing firm noted that the company has suffered significant recurring losses and is in immediate need of substantial working capital to continue its business and operations. At Feb, 29, 2008, the company had a working capital deficit of $8,511,620 compared to working capital deficit of $6,662,505 at May 31, 2007. The large change is a direct result of a write off of the Champion note receivable. To date, the company has been funding its operations primarily through the issuance of equity in private placement transactions with existing stockholders or affiliates of stockholders. CENTRO NP: Moody's Keeps Rtng on Review on Parent's Debt Extension ------------------------------------------------------------------ Moody's Investors Service stated that it will maintain Centro NP LLC's (formerly New Plan Excel Realty Trust, Inc.) B3 senior unsecured debt ratings under review direction uncertain reflecting the company's announcement that its parent, Centro Properties Group (not rated), was granted an extension until Dec. 15, 2008 on its Australian debt previously scheduled to expire May 7, 2008. This extension is subject to certain conditions being met by May 30 for finalizing an additional liquidity facility totaling $155 million and covers Centro's interests in certain managed funds. Centro's U.S. debt is still subject to a Sept. 30, 2008 deadline. The review continues to reflect the financial difficulties and uncertainty regarding the final capital structure and strategic profile of the company in light of Centro NP's and Centro Properties Group's short-term pressure to refinance debt. Moody's will continue to monitor Centro NP's compliance with its bond covenants and the quality and composition of its portfolio as it works though these financings. Moody's stated that upwards rating movement would be contingent upon implementing a viable plan to refinance/restructure Centro Property Group's debt, in addition to Centro NP refinancing the bridge facility and line of credit on or before its Sept. 30, 2008 extension date without materially pressuring their leverage, secured debt, the value of their portfolio, and other credit metrics, while complying with bond covenants. A confirmation of the B3 rating would result from Centro NP reaching a financing plan to which the debt holders agree, with a strategic plan in place to restructure Centro Properties Group's debt. A downgrade to the Caa range or lower would most likely reflect Centro NP's continued issues refinancing its line and/or Centro Properties Group's inability to refinance its debt by the extension dates, noncompliance with bond covenants at the Centro NP level, acceleration of bond payments, a firesale of assets or a bankruptcy filing. These ratings are at B3, with review direction uncertain: * Centro NP LLC -- Senior unsecured debt at B3; medium-term notes at B3. Centro NP LLC, headquartered in New York City, owns and operates 496 community and neighborhood shopping centers in 39 states. The company had assets of $5.7 billion and equity of $3.2 billion at Dec. 31, 2007. Centro Properties Group (AXP: CNP), headquartered in Melbourne, Victoria, Australia, is an Australian Listed Property Trust that specializes in the ownership, management and development of retail shopping centers in Australia, New Zealand and the USA with A$26.6 billion in assets under management. CHL MORTGAGE: S&P Puts Default Rating on Class B-4 Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three class B certificates from CHL Mortgage Pass-Through Trust 2003- HYB2. At the same time, S&P placed its rating on class D-B-3 from Credit Suisse First Boston Mortgage Securities Corp.'s series 2002-30 on CreditWatch with negative implications. Additionally, S&P affirmed its ratings on the remaining classes from these two transactions. S&P downgraded class B-4 from CHL Mortgage Pass-Through Trust 2003-HYB2 to 'D' because it suffered a write-down. S&P also lowered its ratings on the class B-2 and B-3 notes because actual losses have eroded credit support. S&P downgraded class B-3 to 'CCC' from 'BB' and downgraded class B-2 to 'B' from 'BBB'. This transaction has severe delinquencies of approximately 1.80% of its current balance and cumulative losses of 0.12% of its original balance. Based on these delinquency and loss levels, the transaction does not have enough support to maintain the previous ratings on the affected classes. S&P placed its rating on class D-B-3 from Credit Suisse First Boston Mortgage Securities Corp.'s series 2002-30 on CreditWatch with negative implications because of the rising amount of severely delinquent loans in this transaction compared with the available credit support. Severe delinquencies are currently 9.49% of the current pool balance, and losses are 1.28% of the original pool balance. Credit support for class D-B-3 has been eroding steadily due to losses, and S&P will continue to monitor this transaction as more performance data becomes available. The collateral for these transactions consists primarily of prime fixed- and adjustable-rate, first-lien mortgage loans secured by one- to four-family residential properties. Ratings Lowered CHL Mortgage Pass-Through Trust 2003-HYB2 Rating ------ Class To From ----- -- ---- B-2 B BBB B-3 CCC BB B-4 D B Rating Placed on Creditwatch Negative Credit Suisse First Boston Mortgage Securities Corp. Series 2002-30 Rating ------ Class To From ----- -- ---- D-B-3 BBB-/Watch Neg BBB- Ratings Affirmed CHL Mortgage Pass-Through Trust 2003-HYB2 Class Rating ----- ------ 1-A-1 AAA 2-A-1 AAA 1-X AAA M AA+ B-1 A+ Credit Suisse First Boston Mortgage Securities Corp. Series 2002-30 Class Rating ----- ------ I-A-1 AAA I-P AAA I-X AAA II-A-3 AAA II-A-5 AAA II-P AAA II-X AAA D-B-1 AAA D-B-2 AA+ CITIZENS COMMS: S&P Cuts Rating to BB from BB+ with Stable Outlook ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Stamford, Connecticut-based Citizens Communications Co. to 'BB' from 'BB+'. The outlook is stable. Total debt outstanding was about $4.75 billion as of March 31, 2008. "The downgrade reflects credit measures that are weak for the previous rating," said Standard & Poor's credit analyst Allyn Arden. Total debt to EBITDA, including unfunded pension and post employment benefits, and adjusted for operating leases, was about 3.9x at year-end 2007. Funds from operations to adjusted debt was around 18%. "Moreover, we do not expect any material improvement in key credit measures over the next couple of years given our expectations for continued access line erosion and slower growth of digital subscriber line (DSL) services." A substantial dividend payout and ongoing share repurchases further limit the potential for debt reduction. The ratings on Citizens Communications reflect rising competition from cable telephony and wireless substitution, the lack of a facilities-based video strategy, longer-term risk to regulatory support, and an aggressive financial policy. Tempering factors include Citizens' solid position as an incumbent local exchange carrier, primarily in less-competitive rural areas, relatively stable cash flow and high margins; and growth in high-speed data services, which has helped mitigate revenue declines from line losses. Wireless substitution and cable telephony competition continue to pressure Citizens Communications' customer base. "We believe the company will face greater competition as cable operators continue to deploy less-expensive Internet Protocol telephony service in rural markets," said Mr. Arden. "As a result, access line losses will likely accelerate despite the company's promotional efforts to retain customers." In the first quarter of 2008, line losses were 6.5% on a pro forma basis, up from the 5.6% in the previous quarter. Given the mature nature of Citizens Communications' markets and increasing competition from the cable operators, acquisitions have become an integral part of its growth strategy. During 2007, Citizens Communications completed its purchase of rural local exchange carriers Commonwealth Telephone Enterprises and Global Valley Networks, thereby reducing its reliance on the highly competitive Rochester, New York, market. S&P expect that future acquisitions will likely be funded with new debt, potentially resulting in weaker credit measures. CLASS 2006-12: Moody's Puts Ba2 Rating on $5MM Notes Under Review ----------------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by Class 2006-12 TODI I. Class Description: $5,000,000 Class 2006-12 TODI I Units, due June 2016 -- Prior Rating: Ba2 -- Current Rating: Ba2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio, which consists primarily of corporate securities. COLLECTIVE BRANDS: Gets S&P Neg. Outlook on Adidas Suit Verdict --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Topeka, Kansas-based Collective Brands Inc. to negative from stable. At the same time, S&P affirmed all other ratings on the specialty footwear retailer, including the 'B+' corporate credit rating. "The outlook revision reflects the announcement that a jury verdict of $305 million has been reached in the adidas lawsuit against Collective Brands for trademark and trade dress infringement, unfair competition, deceptive trade practices, and breach of contract," explained Standard & Poor's credit analyst David Kuntz. Further, S&P remain concerned that two other pending trademark infringement suits by K-Swiss and Crocs could also result in meaningful judgments against the company. S&P expect Collective Brands to file motions with the federal court to set aside the verdict, and if that is not granted, the company intends to take all necessary steps to overturn the verdict or reduce the total amount of the judgment. COLLECTIVE BRANDS: Gets Moody's Neg Outlook on Adidas Suit Ruling ----------------------------------------------------------------- Moody's Investors Service revised its rating outlook for Collective Brands, Inc. to negative from stable. All other ratings of Collective Brands, Inc. and Collective Brands Finance Inc. were affirmed. "The negative outlook reflects uncertainties resulting from the announcement that a jury verdict of approximately $305 million was rendered against Collective Brands" said Moody's Senior Analyst Scott Tuhy. This jury verdict relates to a lawsuit filed by adidas Americas Inc. in connection with alleged trademark infringement amongst other items. The Company has stated it will ask the court to set aside the verdict and, if it is not granted, intends to take all necessary steps to overturn this decision. The negative outlook also reflects that this uncertainty is arising in a more challenging macro economic environment and follows after the recent increase in leverage to finance the acquisition of Stride Rite, which closed in August, 2007. These ratings were affirmed and LGD assessments amended Collective Brands Inc. * Corporate Family Rating and Probability of Default Rating -- B1 * $200 million senior subordinated notes due 2013 -- B3 (LGD 6, 94%) Collective Brands Finance Inc. * $725 million secured term loan B due 2014 - B1 (LGD 3, 43% from LGD 3, 42%) Headquartered in Topeka, Kansas, the company operated 4,552 retail stores in 15 countries and territories as of year end 2007 under the Payless Shoe Source brand. In August 2007 the company acquired Stride Rite, a marketer of children's footwear as well as casual and athletic footwear for adults through wholesale accounts and owned retail locations. The company reported revenue of approximately $3.0 billion in its fiscal year ending Feb. 2, 2008. COUDERT BROTHERS: Retirees' Suit Transferred to Bankruptcy Court ---------------------------------------------------------------- A lawsuit by 24 retirees from Coudert Brothers against former managing members and law firms that took over pieces of the bankrupt international law firm has been removed to the U.S. Bankruptcy Court for the Southern District of New York, Bankruptcylaw360.com reports. Under 28 U.S.C. Section 1452, a party may remove any claim or cause of action in a civil action -- other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce the governmental unit's police or regulatory power -- to the district court for the district where the civil action is pending, if the district court has jurisdiction of the claim or cause of action under 28 U.S.C. Section 1334. In July 2007, the Pension Benefit Guaranty Corporation assumed responsibility for the underfunded pension plan covering about 460 employees and retirees of Coudert Brothers LLP. The PBGC stepped in after Coudert Brothers missed $2.2 million in required pension contributions. The pension plan has been abandoned as a result of the firm's dissolution. Founded in 1853, Coudert Brothers LLP once featured an international practice with 28 offices in 15 countries, including Australia and China. Coudert Brothers specialized in complex cross border transactions and dispute resolution. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). The filing came a year after the firm lost two lawsuits, including a $2.5 million malpractice suit filed by a former client, Portfolio Media. Coudert Brothers voted to dissolve its partnership and discontinue its practice in August 2005, after a planned merger with global law firm Baker & McKenzie fell through. John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represent the Debtor in its restructuring efforts. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represent the Official Committee Of Unsecured Creditors. In its schedules of assets and debts, Coudert listed total assets of $29,968,033 and total debts of $18,261,380. A Chapter 11 Plan of Liquidation was filed for Coudert Brothers on March 15, 2007. A disclosure statement explaining that Plan was filed March 23, 2007. The Debtor has until May 22, 2008, to solicit acceptances for the Plan. COMFORCE CORP: March 30 Balance Sheet Upside-Down by $8.3 Million ----------------------------------------------------------------- COMFORCE Corporation reported on Tuesday results for its first quarter ended March 30, 2008. At March 30, 2008, the company's consolidated balance sheet showed $190.4 million in total assets and $198.7 million in total liabilities, resulting in a $8.3 million total stockholders' deficit. The company reported net income of $992,000 for the first quarter of 2008, compared to net income of $914,000 for the first quarter of 2007. Revenues for the quarter increased 6.1% to $150.2 million, compared to revenues of $141.6 million for the first quarter of 2007. Revenues from the company's Human Capital Management Services segment increased $9.0 million, or 10.4%, compared with the first quarter of 2007. Staff Augmentation revenue decreased by $316,000 due primarily to a decrease in services provided to Technical Services customers which was partially offset by an increase in services provided to Healthcare Support customers. Gross profit for the first quarter of 2008 was $23.8 million, or 15.8% of sales, compared to $22.1 million, or 15.6% of sales for the comparable period last year. COMFORCE's operating income for the first quarter was $3.5 million, compared to operating income of $3.6 million for the first quarter of 2007. Interest expense was $1.4 million for the first quarter of 2008, compared to $2.0 million for the first quarter of 2007. This decrease was due principally to the company's repurchase and redemption of $11.2 million of 12% Senior Notes during 2007. The company recorded income before income taxes of $1.8 million for the first quarter of 2008, compared to income before income taxes of $1.6 million for the same period last year. COMFORCE recognized a provision for income taxes of $800,000 in the first quarter of 2008, compared to $652,000 in the first quarter of 2007. Comments from Management John Fanning, chairman and chief executive officer of COMFORCE, commented, "We are very pleased to have reported record revenues for our first quarter, following the record revenues achieved for the full year of 2007. PRO Unlimited continues to contribute significantly to our results, having increased revenues by 10.4%, or $9.0 million in the quarter. At the same time, PRO's gross margin rose by $1.1 million to $12.5 million, compared to last year's first quarter. We were also pleased to have reported an increase in Healthcare Support services revenues. "Management remains committed to further reducing our public debt, and as previously announced on April 23, 2008, we repurchased approximately $6.5 million of our 12% Senior Notes. This latest repurchase is expected to reduce the company's interest expense by approximately $500,000 annually, based on current interest rates. Our public debt now stands at $5.2 million." Mr. Fanning concluded, "We remain optimistic about COMFORCE's prospects for the balance of 2008, especially as it relates to PRO." Liquidity and Capital Resources At April 27, 2008, the company had remaining availability, under its $110 million Revolving Credit Facility with PNC Bank, National Association, and other participating financial institutions, of up to $8.9 million. The obligations under the PNC Credit Facility are collateralized by a pledge of the capital stock of certain key operating subsidiaries of the company and by security interests in substantially all of the assets of the company. The PNC Credit Facility contains various financial and other covenants and conditions, including, but not limited to, a prohibition on paying cash dividends and limitations on engaging in affiliate transactions, making acquisitions and incurring additional indebtedness. The maturity date of the PNC Credit Facility is July 24, 2010. At March 30, 2008, the company also had outstanding (i) $11.7 million principal amount of Senior Notes bearing interest at 12% per annum and (ii) $1.6 million principal amount of Convertible Notes bearing interest at 8% per annum. Since June 2000, the company has reduced its public debt from $138.8 million to $5.2 million and its total long-term debt from $195.3 million to $85.4 million during the same period. Full-text copies of the company's consolidated financial statements for the quarter ended March 30, 2008, are available for free at http://researcharchives.com/t/s?2bad About COMFORCE Corp. Headquartered in Woodbury, New York, COMFORCE Corporation (AMEX: CFS) -- http://www.comforce.com/-- is a provider of outsourced staffing management services that enable Fortune 1000 companies and other large employers to consolidate, automate and manage staffing, compliance and oversight processes for their contingent workforces. The company also provides specialty staffing, consulting and other outsourcing services to Fortune 1000 companies and other large employers for their healthcare support, technical and engineering, information technology, telecommunications and other staffing needs. The company operates in three segments -- Human Capital Management Services, Staff Augmentation and Financial Outsourcing Services. The Human Capital Management Services segment provides consulting services for managing the contingent workforce through its PRO(R) Unlimited subsidiary. The Staff Augmentation segment provides healthcare support services, including RightSourcing(R) Vendor Management Services, Technical, Information Technology and Other Staffing Services. The Financial Outsourcing Services segment provides funding and back office support services to independent consulting and staffing companies. COMMODORE CDO: Poor Credit Quality Cues Moody's to Cut Ratings -------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on the following notes issued by Commodore CDO II Ltd.: Class Description: $37,800,000 Class A-2(a) Floating Rate Notes due December 2038 -- Prior Rating: Aaa -- Current Rating: Aa3, on review for possible downgrade Class Description: $1,200,000 Class A-2(b) 4.74% Fixed Rate Notes due December 2038 -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: $48,600,000 Class B Floating Rate Notes due December 2038 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade In addition Moody's also announced that it has downgraded these notes: Class Description: $12,750,000 Class C Floating Rate Notes due December 2038 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: Subordinated Interest -- Prior Rating: B2, 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. COREL CORP: Appoints Kris Hagerman as Interim Chief Executive ------------------------------------------------------------- Kris Hagerman, formerly Group President of Symantec's Data Center Management Group, has been appointed as Corel Corporation's interim Chief Executive Officer, effective May 8, 2008. Mr. Hagerman's appointment follows Corel's announcement on April 21, 2008, that current CEO David Dobson will be leaving the company in order to accept a senior executive position at a Fortune 500 company. During the transition period, Mr. Dobson will remain a Director on Corel's Board and assist in evaluating the strategic alternatives available to the Company, including the previously announced proposal by Vector Capital. An experienced industry executive, Mr. Hagerman most recently served as a Senior Advisor at Vector Capital. Prior to that, Hagerman was Group President of Symantec's Data Center Management group, which generated $1.7 billion in revenue or approximately 30% of Symantec's 2007 revenue. Prior to Symantec, Mr. Hagerman held senior positions with Veritas Software Corporation, including Executive Vice President and General Manager of the Storage and Server Management Group. Prior to Veritas, Mr. Hagerman was founder and CEO of two consumer Internet companies, and also served in positions at Silicon Graphics and McKinsey & Company, Inc. "We are very pleased to have a proven executive like Kris Hagerman join Corel," Alex Slusky, Chairman of Corel's Board of Directors and Managing Partner of Vector Capital, said. "[Mr. Hagerman's] deep experience and successful track record in software are a great fit for Corel. The Board is confident he will provide strong leadership for the company while we conduct a search for a permanent chief executive." "Corel is truly one of the world's leaders in consumer software," Mr. Hagerman said. "I look forward to working with Corel's management team and employees to continue the company's successful trajectory through this transition period." Corel Corp. (NASDAQ: CREL)(TSX: CRE) -- http://www.corel.com/-- is a developer of graphics, productivity and digital media software with more than 100 million users worldwide. The company's product portfolio includes some of CorelDRAW(R) Graphics Suite, Corel(R) Paint Shop Pro(R) Photo, Corel(R) Painter(TM), Corel DESIGNER(R), Corel(R) WordPerfect(R) Office, WinZip)R), WinDVD(R) and iGrafx(R). Corel's products are sold in more than 75 countries through a network of international resellers, retailers, original equipment manufacturers, online providers and Corel's global websites. The company's headquarters are located in Ottawa, Canada with major offices in the United States, United Kingdom, Germany, China, Taiwan and Japan. At Feb. 29, 2008, the company's balance sheet showed total assets of $255.9 million and total debts of $273.6 million, resulting in a $17.7 million total stockholders' deficit. COUNTRYWIDE FINANCIAL: Court Junks Settlement with Homeowner ------------------------------------------------------------ The Honorable Thomas Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania denied Countrywide Financial Corp.'s request to enter into a settlement agreement with Sharon Diane Hill, a homeowner who filed for Chapter 13 bankruptcy, The Wall Street Journal reports. The company and Ms. Hill tussled the past few months over Countrywide's alleged abuses committed during her bankruptcy proceeding. As reported in the Troubled Company Reporter on Feb. 18, 2008, Ms. Hill filed for Chapter 13 protection to help her submit payments to Countrywide on time. Despite her measures, the lender threatened to foreclose on her mortgage. According to court documents, Ms. Hill accused the mortgage lender of "recreating" letters to collect more money from her. In turn, the company accused Ms. Hill of forcing discovery on "broad- ranging issues", such as the lenders' procedures and policies. In a December 2007 hearing, the counsel for the lender admitted to recreating these noticing letters to Ms. Hill. Subsequently, the Court ordered Countrywide to release these loan documents. Still, Ms. Hill lamented that her credit record was messed up by Countrywide's attempt to foreclose, relates WSJ. Now, Countrywide wants to settle its issues with Ms. Hill by way of a settlement agreement. However, Judge Agresti did not approve the proposed settlement, saying that he wanted to "get to the bottom" of the company's "forgeries", WSJ says. He was also concerned of the influence a settlement decision might have on other Countrywide cases. 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. The company is continuing to face a barrage of lawsuits coming from disgruntled homeowners that filed for bankruptcy protection. Countrywide has been accused by these homeowners and various federal agencies of dubious and questionable lending practices, and for abusing the bankruptcy system. COUNTRYWIDE MORTGAGE: Fitch Takes Actions on Various Classes ------------------------------------------------------------ Fitch Ratings has taken rating action on these Countrywide mortgage pass-through certificates: Series 2003-1 -- Class 1-A-1 affirmed at 'AAA'; -- Class 1-A-2 affirmed at 'AAA', removed from Rating Watch Negative; -- Class 1-A-5 affirmed at 'AAA'; -- Class 1-A-10 affirmed at 'AAA'; -- Class 1-A-11 affirmed at 'AAA'; -- Class 1-A-12 affirmed at 'AAA'; -- Class 1-A-14 affirmed at 'AAA'; -- Class 2-A-3 affirmed at 'AAA'; -- Class 2-A-4 affirmed at 'AAA'; -- Class 2-A-5 affirmed at 'AAA'; -- Class 2-A-10 affirmed at 'AAA'; -- Class PO affirmed at 'AAA'; -- Class M affirmed at 'AAA'; -- Class B-1 affirmed at 'AA'; -- Class B-2 affirmed at 'A'; -- Class B-3 affirmed at 'BB+'; -- Class B-4 affirmed at 'B'. Series 2003-44 -- Class A-1 affirmed at 'AAA'; -- Class A-2 affirmed at 'AAA'; -- Class A-3 affirmed at 'AAA', removed from Rating Watch Negative; -- Class A-4 affirmed at 'AAA'; -- Class A-5 affirmed at 'AAA'; -- Class A-6 affirmed at 'AAA'; -- Class A-7 affirmed at 'AAA'; -- Class A-8 affirmed at 'AAA'; -- Class A-9 affirmed at 'AAA'; -- Class A-10 affirmed at 'AAA'; -- Class A-11 affirmed at 'AAA'; -- Class PO affirmed at 'AAA'; -- Class M affirmed at 'AA'; -- Class B-1 affirmed at 'A'; -- Class B-2 affirmed at 'BBB'; -- Class B-3 rated 'BB', placed on Rating Watch Negative; -- Class B-4 rated at 'B', placed on Rating Watch Negative. The collateral on the aforementioned transactions consists of mixed term fixed-rated mortgages extended to prime borrowers. Countrywide deposited the loans into the trust, and acts as the servicer for the collateral. Countrywide Home Loans, Inc. has a servicer rating of 'RPS1-' provided by Fitch. Class 1-A-2 from series 2003-1, and A-3 from 2003-44 have a wrap provided by MBIA. DANA CORP: Ad Hoc Panel Wants Court Nod on $3.5 Mil. Legal Fee -------------------------------------------------------------- The Ad Hoc Committee of Dana Corp. noteholders asks the U.S. Bankruptcy Court for the Southern District of New York to allow as administrative expenses the $3,568,768 in professional fees and expenses of its counsel, Stroock & Stroock & Lavan LLP, for services rendered from March 3, 2006, through Feb. 29, 2008, pursuant to Section 503(b) of the Bankruptcy Code. The Ad Hoc Committee has been a guiding presence from start to finish, acting as the voice for creditors holding in excess of $1.4 billion of claims, representing more than two-thirds of the total allowed claims in the general unsecured class, Kristopher M. Hansen, Esq., at Stroock & Stroock & Lavan LLP, in New York, says. Additionally, Mr. Hansen says, the Ad Hoc Committee played an integral role in: * the consensual negotiation and approval of, the Interim and Final Orders Establishing Notice and Hearing Procedures for Trading in Claims and Equity Securities; * the consensual negotiation and resolution of the Debtors' executive compensation program; * negotiating and brokering significant aspects of the Global Settlement that served as the cornerstone of the Debtors' Plan of Reorganization; * the negotiation of the Disclosure Statement and Plan itself, as well as the Plan structure; * negotiating the B-2 Backstop Commitment Letter in connection with the Debtors' issuance of New Series B Preferred Stock; and * providing a substantial amount of the financing required to implement the Plan in the form of the subscription to and purchases by members of the Ad Hoc Committee of New Series B Preferred Stock. Absent the Ad Hoc Committee's efforts to build consensus and facilitate the progress of the Debtors' Chapter 11 Cases, the Debtors' reorganization would have faced significant delays and might have been jeopardized altogether, Mr. Hansen avers. Reorganized Debtors Support Request The Reorganized Debtors support the application of the Ad Hoc Committee for payment of $3,568,768 in fees and expenses to Stroock & Stroock, comprising: -- $3,431,673 in fees incurred, -- $112,094 in expenses incurred, and -- $25,000 in fees and expenses to be incurred in connection with the preparation and prosecution of the Application. Corinne Ball, Esq., at Jones Day, in New York, says the Ad Hoc Committee has made substantial contributions to the Debtors' estate and should be reimbursed of fees and costs, citing that: * Certain of the Ad Hoc Committee members made an actual and substantial cash contribution of a significant portion of the $540,000,000 invested for the purchase of New Series B Preferred Stock, without which the Debtors would have been unable to emerge from Chapter 11. * The Ad Hoc Committee served as a potential additional source of financing for the Debtors: -- The Ad Hoc Committee played a valuable role in helping to negotiate the Global Settlement with the Debtors' unions and other significant parties-in- interest, which helped pave the Debtors' path out of bankruptcy by allowing the Debtors to achieve savings with their unions while avoiding certain costs in claims and litigation. -- After the Global Settlement was approved by the Court, a subset of the Ad Hoc Committee agreed, on terms that were reasonably favorable to the Debtors, to commit to serve as the backstop for $250,000,000 in financing needed by the Debtors. The execution of the B-2 Backstop Commitment Letter gave the Debtors increased certainty that they would obtain the funding they needed to emerge from bankruptcy. * The Ad Hoc Committee took an active role in facilitating and negotiating the Plan by being actively involved in negotiations with the Debtors, the Official Committee of Unsecured Creditors and Centerbridge Capital Partners L.P. regarding the contents of the Disclosure Statement and the Plan; and participated in the drafting of the Disclosure Statement and Plan. Ms. Ball points out the contributions made by the Ad Hoc Committee were unique and were generally not duplicative of the efforts of any other Court-appointed official committee, including the Creditors Committee. Centerbridge also supports the Application. The Debtors ask the Court to cap all fees and expenses related to the application and its prosecution at $25,000. About Dana Corp. Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a total shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represented the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represented the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 74; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 12, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's $650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's $1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. DANA CORP: Appaloosa Wants Court Nod on $2.5MM Legal Fees Payment ----------------------------------------------------------------- Dana Corp. equity holder Appaloosa Management, L.P., seeks allowance of an administrative expense claim aggregating $2,507,657, for professional fees and expenses incurred by its counsel, White & Case LLP, and $454,017 in expert fees and expenses incurred by Blackstone Advisory Services, L.P., its financial advisor. J. Christopher Shore, Esq., at White & Case, LLP, in New York, says the application seeks recovery of the actual reasonable fees and expenses incurred by Appaloosa in making a substantial contribution in Dana Corp. and its debtor-affiliates' Chapter 11 cases. Mr. Shore says payment of the fees and expenses will compensate Appaloosa for its critical role in bringing about what were unquestionably material enhancements to the plan investment agreement, which ultimately became the cornerstone of the Debtors' now-confirmed Plan of Reorganization. He contends that without Appaloosa's willingness to incur the material costs of retaining attorneys and financial advisors who challenged the material shortcomings of the sequential proposals made by Centerbridge Capital Partners L.P., the creditors of the Debtors would have received significantly less in the Chapter 11 cases. Mr. Shore says that several judges in the U.S. Bankruptcy Court for the Southern District of New York noted that the success of large multi-faceted bankruptcy cases -- cases in which one set of management, attorneys and committees are representing divergent interests -- often depends on the willingness of individual stakeholders to step forward, thoroughly examine the issues, and, if warranted, press for relief, even when those contributions cause the incurrence of material fees and expenses. For that reason, Appaloosa should be reimbursed, he asserts. Objections (1) U.S. Trustee Diana G. Adams, the United States Trustee for Region 2, says Appaloosa has not met its burden of proof or persuasion for receipt of a "substantial contribution" award. "Appaloosa is, in essence, a losing bidder in an equity investment of the Debtors who stands in sharp contrast to Centerbridge," she says. After an openly protracted involvement, Appaloosa did not end up entering into an investment agreement with the Debtors, which the Debtors eventually entered into with Centerbridge. The U.S. Trustee adds that Appaloosa, which pursued membership on the Official Committee of Equity Security Holders only to resign six months later and then unsuccessfully pursue an investment opportunity in the Reorganized Debtors, has not overcome the presumption that it acted for its own interest. Furthermore, even if the Court were to find that Appaloosa has made a substantial contribution, Appaloosa cannot be reimbursed for the financial advisory fees and expenses incurred by Blackstone Advisory Services, L.P., its financial advisors, as there is no statutory basis under Sections 503(b)(3)(D) and (b)(4) of the Bankruptcy Code, which expressly limit their benefits to only "attorneys and accountants," Ms. Adams avers. (2) Ad Hoc Committee The Ad Hoc Committee of Noteholders opposes assertions by Appaloosa that it has made a substantial contribution to the Debtors' bankruptcy cases because: * Appaloosa's actions did not result in a direct monetary benefit to the Debtors' estate; * Appaloosa's actions di