/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080514.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 14, 2008, Vol. 12, No. 114 Headlines ALLIANT TECHSYSTEMS: S&P Holds BB Ratings on Failed Acquisition ALLIANT TECHSYSTEMS: Fitch Holds Ratings on Terminated Deal AMBAC FINANCIAL: May Be Hit by Sinking 2nd Lien RMBS, Moody's Says AMERICAN MORTGAGE: March 31 Balance Sheet Upside-Down by $23MM ALBERS MFG: Case Summary & 19 Largest Unsecured Creditors ALEXANDER VISTA: Case Summary & Nine Known Creditors AMY ARBUCKLE: Case Summary & 13 Largest Unsecured Creditors BCE INC: Quebec Court of Appeal Order on Privatization Forthcoming BEAZER HOMES: Files Fiscal Year 2007 Financial Statements BELL CP: Voluntary Chapter 11 Case Summary BIG ROC TOOLS: Case Summary & 20 Largest Unsecured Creditors BLUE WATER: Files Chapter 11 Plan, Mulls Sale of Business BLUE WATER: Classification and Treatment of Claims Under Plan BLUE WATER: Court Sets Plan Confirmation Hearing on June 18 BLUE WATER: Clarifies Objections to Proposed Incentive Payments BUILDING MATERIALS: To Consolidate BMC West and SelectBuild BARBARA K ENT: Case Summary & 20 Largest Unsecured Creditors CABLEVISION SYSTEMS: Gets 97% Stake in Newsday for $650 Million CARRINGTON LABORATORIES: Auditing Firm Raises Substantial Doubt CENTERPLATE INC: In Talks with Lenders to Amend Credit Facility CENTURY INDEMNITY: Fitch Holds 'B-' IFS Rating with Neg. Outlook CENTURY REINSURANCE: Fitch Holds 'CCC+' IFS Rating; Outlook Neg. CHAMP CAR: Gallivan Auctioneers Set Asset Auction for June 3 CHARMING SHOPPES: Posts $83.4 Million Net Loss in Fiscal 2008 CHARTER COMMS: Posts $8.4BB Deficit in Q1; Warns of Bankruptcy CLEAR CHANNEL: Buyer & Banks Settle Financing Dispute, Report Says COLLINS SIGNS: Awarded $13.8 Million in Nissan Lawsuit COUDERT BROS: Unsecured Creditors to Get 39% Under Amended Plan COLEGIO CORAZON: Case Summary & Nine Largest Unsecured Creditors DANKA BUSINESS: Waiting Period of U.S. Antitrust Review Terminated DEVCON INT'L: Receives Listing Non-compliance Warning from Nasdaq DEVCON INT'L: Incurs $600K Stockholder's Deficit in 2008 1st Qtr. DR HORTON: S&P Lowers Corporate Credit Rating to BB from BB+ DURA AUTOMOTIVE: Voting Creditors Supports Chapter 11 Plan DURA AUTOMOTIVE: Court Confirms Chapter 11 Plan of Reorganization DUTCH HILL: Moody's Cut Ratings on Credit Quality Deterioration ECOMARES INC: Shareholder Sues After Ch. 15 Case Dismissal ELECTRONIC DATA: Inks $14 Billion Merger Deal with Hewlett-Packard ENERGY TRANSFER: March 31 Balance Sheet Upside Down by $43.7 Mil. FEDDERS CORP: Wants to Liquidate All Assets Under Trust Pact FOCUS ENHANCEMENTS: Posts $6 Million Net Loss in 1st Quarter 2008 FORD MOTOR: Urges Shareholders to Take No Action on Tracinda Offer FRONTIER AIRLINES: Allowed to Hire Epiq Bankr. as Claims Agent FRONTIER AIRLINES: Can Hire Faegre & Benson as Special Counsel GENERAL MOTORS: May Use $7BB Undrawn Loans Upon Industry Downturn GLOBAL BEVERAGE: Turner Stone Expresses Going Concern Doubt GRAHAM PACKAGING: March 31 Balance Sheet Upside-Down by $771.5MM GRAN TIERRA: To Restate Financial Statements in 10-K Form Filing GREATER BIBLE WAY: Voluntary Chapter 11 Case Summary HALCYON SECURITIZED: Moody's Lowers Ratings on Four Classes to Ca HANESBRANDS INC: S&P Lifts Corporate Credit Rating to BB- from B+ HIGH ARCTIC: Gets May 30 Extension to Meet Loan Covenants HILEX POLY: Files Joint Prepackaged Chapter 11 Plan HILEX POLY: Disclosure Statement Hearing Set for June 12 HOME INTERIORS: Taps Hunton & Williams as Lead Counsel HOME INTERIORS: Wants to Hire Rochelle Hutcheson as Counsel HOME INTERIORS: Wants to Hire Boulder as Biz Consultant & CRO IAC/INTERACTIVECORP: Ends Spin-off Squabble with Liberty Media IDLEAIRE TECHNOLOGIES: Files Chapter 11 Protection in Delaware IDLEAIRE TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors IMAX CORPORATION: March 31 Balance Sheet Upside-Down by $95MM INDYMAC BANCORP: Posts First Quarter Loss of $184.2 Million INDYMAC BANCORP: S&P Puts Rating at D on Dividend Suspension INFINITY ENERGY: Has Until May 31 to Cure Loan Agreement Defaults INTERPHARM HOLDINGS: Tullis-Dickerson Declares 18% Equity Stake INTERPHARM HOLDINGS: Aisling Capital Declares 18.5% Equity Stake JO-ANN STORES: Improved Credit Metrics Cue S&P to Lift Ratings KIWA BIO-TECH: Mao & Company Expresses Going Concern Doubt KOPPERS HOLDINGS: March 31 Balance Sheet Upside-Down by $7.6MM LEVITT AND SONS: Wachovia Disputes Homebuyers' Senior Lien Claims LEVITT AND SONS: Wants to Extend Plan-Filing Deadline to June 27 LEVITT AND SONS: Wants Claims Bar Date Extended to Sept. 30 LEVITT AND SONS: Depositors Panel Wants Expanded Responsibilities LIBERTY MEDIA: Ends Spin-off Squabble with IAC/InterActiveCorp LINENS N THINGS: Wants to Set Auction Procedures for 120 Stores LINENS N THINGS: Interested Parties Balk at Proposed Store Sales LINENS N THINGS: U.S. Trustee Appoints 7-Member Creditors Panel MARATHON HEALTHCARE: U.S. Trustee Forms Seven-Member Committee MARATHON HEALTHCARE: Committee Wants Zeisler & Zeisler as Counsel MARSHALL HOLDINGS: Madsen Expresses Going Concern Doubt MBIA INC: Posts Third Consecutive Quarterly Loss at $2.4 Billion MBIA INC: Could Be Affected by Sinking 2nd Lien RMBS, Moody's Says MEDICAL SOLUTIONS: Wolf & Company Expresses Going Concern Doubt MKP CBO: Moody's Downgrades Ratings on Credit Quality Erosion ML CAPITAL: Fitch Affirms 'BB' Preferred Stock Rating MORTGAGE ASSISTANCE: Sutton Robinson Expresses Going Concern Doubt NORTH COVE: Fitch Junks Five Ratings, Removes Negative Watch NPS PHARMA: Reports Errors in Financial Results Ended Dec. 31 OMNOVA SOLUTIONS: S&P Holds 'B+' Rating; Revises Outlook to Neg. OPTIMUM INSURANCE: A.M. Best Lifts IC Rating to bb+ from bb- ORLEANS HOMEBUILDERS: Gets Temporary Waiver for Credit Facility PINE MOUNTAIN: Moody's Downgrades Ratings on Two Classes to Caa2 PINNACLE FOODS: Debt Reduction Efforts Cue S&P's Positive Outlook POPE & TALBOT: Court Converts Case to Chapter 7 Liquidation POPE & TALBOT: PwC Requests Appointment as CCAA Receiver PRC LLC: Committee Can Employ Halperin Battaglia as Counsel PROSPECT MEDICAL: Continues Covenant Waiver Talks with Lenders PRIMEDIA INC: March 31 Balance Sheet Upside-Down by $136.8 Million PRIMEDIA INC: Taps Barber as Chief Accounting Officer, Treasurer PRECISION PRODUCTS: Case Summary & 20 Largest Unsecured Creditors QCA HEALTH: A.M. Best Affirms 'bb+' Issuer Credit Rating REFCO INC: Refco Commodity Management Files Liquidation Plan REFCO INC: June 12 Confirmation Hearing on Refco Commodity Plan REFCO INC: RCMI to Assign Partnership Stake to IDS Futures REFCO INC: Credit Suisse et al. Also Want Classified Documents RH DONNELLEY: Unit Launches Exchange Offers to Refinance Sr. Notes SADLER HOMES: Case Summary & Six Largest Unsecured Creditors SANDRIDGE ENERGY: S&P Rates Proposed $500MM Unsecured Notes B- SEA CONTAINERS: Wants Court to Approve SCL and GECC Global Pact SEAENA INC: Weaver & Martin Expresses Going Concern Doubt SECURITIZED ASSET: Fitch Affirms Junked Ratings on Six Classes SIRIUS SATELLITE: March 31 Balance Sheet Upside-Down by $839.4MM SIRVA INC: Emerges from Chapter 11 Protection in New York SIRVA INC: Will No Longer Proceed with Public Offering Plan SIRVA INC: 360networks Panel May Get $1.5MM in Preference Action SOCIAL ENRICHMENT: Case Summary & 12 Largest Unsecured Creditors SOLAR COSMETIC: Court OKs Interim Use of KeyBank's DIP Fund SONA MOBILE: Losses Prompt Going Concern Opinion SOUTH COAST: Moody's Lowers Ratings on Two Note Classes to Ca SOVEREIGN CAPITAL: Fitch Affirms 'BB' Rating on Preferred Stock SOVEREIGN REAL: Fitch Holds 'BB+' Rating on Preferred Stock SPEEDEMISSIONS INC: Tauber & Balser Expresses Going Concern Doubt SPORTS AUTHORITY: S&P Cuts Rating to B- on Performance Downturn SPRINT NEXTEL: Posts $505 Million Net Loss in 1st Quarter 2008 SPRINT NEXTEL: iPCS Files Lawsuit Over Clearwire Transaction STANDARD PACIFIC: 1st Qtr. 2008 Net Loss Grows to $216.4 Million STANDARD PACIFIC: Bank Group Agrees to Extend Waiver to August 14 STANDARD PACIFIC: Sudden Capital Needs Prompt Sale Plan STRIKEFORCE TECH: Li & Company Expresses Going Concern Doubt SUN-TIMES MEDIA: Will Not Cure NYSE Listing Non-Compliance TAHITI GARDENS: Case Summary & 12 Largest Unsecured Creditors TIDELANDS OIL: Malone & Bailey Expresses Going Concern Doubt TOLL BROTHERS: Says 2nd Qtr. Home Building Revenues Down 30% TOPANGA CDO: Moody's Junks $26MM Note; To Review Rating TORO ABS: Moody's Downgrades Ratings on Seven Note Classes TRANSMERIDIAN INC: Sale Efforts Collapse; Seeks Capital Infusion TRIBUNE CO: Sells 97% Stake of Newsday to Cablevision for $650MM TRIBUNE CO: $650MM Newsday Sale Won't Affect S&P's 'B-' Rating TROPICANA ENT: Parties Have Until May 23 to Object to DIP Funding TTM TECHNOLOGIES: S&P Rates $155MM Senior Notes 'BB-' TTSF LP5: Voluntary Chapter 11 Case Summary TOUSA INC: Wants Exclusivity Periods Stretched to October 25 TOUSA INC: Termination Date Further Extended to May 23 TOUSA INC: Seeks Permission to Continue Using Cash Collateral VALLEJO CITY: Unions Agree to $10,000,000 in Wage Concessions VARICK STRUCTURED: Moody's Chips Ratings on Two Note Classes to B3 VERTICAL ABS: Moody's Cuts Rating on $5MM Notes to C from Caa1 VERTICAL COMPUTER: Malone & Bailey Raises Substantial Doubt VICORP RESTAURANTS: Panel Wants to Hire Milbank Tweed as Counsel VICORP RESTAURANTS: Can Hire Wells Fargo Trumbull as Claims Agent WASHINGTON MUTUAL: Moody's Holds 'BB+' Rating on Class B-5 Certs. WEST PANOLA: Case Summary & Two Largest Unsecured Creditors WORLD HEART: TSE Reviews Eligibility for Continued Listing XM SATELLITE: March 31 Balance Sheet Upside-Down by $1.1 Billion ZAIS INVESTMENT: Moody's Junks Baa1 Rating on $21MM Class C Notes ZIEGLER ENTERPRISES: Voluntary Chapter 11 Case Summary * S&P Downgrades Ratings on 59 Classes from 15 RMBS Transactions * S&P's Current Non-Default Ratings of US Corporates Falls by 23 * S&P Says Sharpened Top-Down Focus on Risk Mngt. is Essential * Massachusetts Q1 2008 Foreclosures Break Another Record * Kilpatrick Stockton and Muldoon Murphy Join Forces * Upcoming Meetings, Conferences and Seminars ********* ALLIANT TECHSYSTEMS: S&P Holds BB Ratings on Failed Acquisition --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'BB' corporate credit rating and 'BBB-' senior secured debt rating, on Alliant Techsystems Inc. The ratings are removed from CreditWatch, where they were placed with negative implications on Jan. 9, 2008. The outlook is stable. At the same time, Standard & Poor's raised its ratings on ATK's senior subordinated debt to 'BB-' from 'B+', one notch lower than the corporate credit rating. S&P assigned a '5' recovery rating, indicating that lenders can expect modest (10%-30%) recovery in the event of a payment default. "The affirmation follows the announcement that the Canadian regulatory authorities denied ATK's proposed acquisition of two divisions of MacDonald, Dettwiler and Associates Ltd.," said Standard & Poor's credit analyst Christopher DeNicolo. The proposed $1.3 billion acquisition would have been financed largely with debt, resulting in a significant deterioration in credit protection measures. However, the acquired units would have improved ATK's position in the satellite and space exploration markets. The acquisition was, by far, the largest attempted by ATK. The failure of the transaction to close will require a $6.6 million pretax charge to be taken in the fiscal 2008 fourth quarter (ended March 31, 2008). The ratings on ATK reflect a somewhat aggressively leveraged balance sheet, limited program diversity, and an active acquisition program, but benefit from leading market positions, satisfactory profitability, and a generally favorable environment for defense spending. ATK is the leading manufacturer of solid rocket motors for space-launch vehicles and strategic missiles and is second in the market for tactical missiles. In addition, the company is the largest provider of small-caliber ammunition to the U.S. military (14% of fiscal 2007 sales) and has strong positions in tank and other types of ammunition. Edina, Minnesota-based ATK's revenues have more than tripled since 2000 mostly as a result of a series of acquisitions that have improved product and program diversity, but also because of good organic growth. Acquisitions in the high-priority precision- guided munitions area have enabled the company to win key contracts for advanced guided missiles and mortars. Other acquisitions have bolstered ATK's R&D and hypersonic propulsion capabilities, and added new products such as satellite components and propellant tanks. S&P expect satisfactory profitability and cash flows, along with some debt reduction, to result in a steadily strengthening credit profile, despite possible share repurchases and likely small to moderate-size debt-financed acquisitions. S&P could revise the outlook to negative if leverage increases materially to fund a major acquisition. Although less likely, the outlook could be revised to positive if the company uses excess cash flows to materially reduce debt, resulting in a sustainable improvement in credit protection measures. ALLIANT TECHSYSTEMS: Fitch Holds Ratings on Terminated Deal ----------------------------------------------------------- Fitch has affirmed and removed the ratings of Alliant Techsystems from Rating Watch Negative following the announced termination of the acquisition of the Information Systems and Geospatial Services divisions of MacDonald, Dettwiler and Associates, Ltd. The ratings had been placed on Rating Watch Negative on Jan. 9, 2008. -- Issuer Default Rating at 'BB'; -- Senior secured term loan at 'BBB-'; -- Senior secured revolver at 'BBB-'; -- Convertible senior subordinated notes at 'BB-'; -- Senior subordinated notes at 'BB-'. Approximately $1.5 billion of debt outstanding is affected by the ratings. The Rating Outlook is Stable. On May 8, 2008, the Canadian Investment Review authorities provided their final decision on ATK's proposed acquisition of the Information Systems and Geospatial Services divisions of MDA for C$1.325 billion. The Canadian Minister of Industry denied permission for the sale to proceed and ATK has terminated the transaction. The company will take a $6.6 million pre-tax charge to earnings for transaction related expenses in 4FQ08. There are no substantial credit implications as a result of the sale not going through. The company's operating and financial profile remains within Fitch's expectations. ATK's ratings are supported by solid free cash flow and adequate credit metrics for the rating; high levels of spending for munitions and missile defense; ATK's position in the NASA budget; ATK's role as a sole source provider for over two-thirds of its sales to the US Government; and pension plan funding status. Concerns focus on leverage; potential budgetary pressures going forward, particularly for missile defense and NASA; a lack of diversity compared to other large and medium sized defense contractors; the amount of revenue generated by operations in Iraq and Afghanistan; and commodities exposure. The Stable Rating Outlook reflects the current strong defense spending environment, U.S. Army training requirements that should result in continued high usage of munitions, and the general level of the company's credit metrics for the rating category. AMBAC FINANCIAL: May Be Hit by Sinking 2nd Lien RMBS, Moody's Says ------------------------------------------------------------------ Moody's Investors Service published a special comment entitled "U.S. Subprime Second Lien RMBS Rating Actions Update", which highlights the persistent poor performance and continued downward rating migration among 2005-2007 vintage second lien mortgage securities. Moody's notes that financial guarantors have significant exposure to second lien RMBS, primarily through guaranties on direct RMBS transactions, and to a lesser extent, through exposure to ABS CDOs, where second lien RMBS securities typically constitute less than 5% of collateral within such CDOs. Moody's loss expectations for this asset class are higher than previously anticipated, owing to worse-than-expected performance trends. This could have material implications for the estimated capital adequacy of financial guarantors most exposed to this risk. In recent announcements of first-quarter 2008 earnings, MBIA and Ambac both reported material credit impairment losses on ABS CDOs and loss reserve charges on direct RMBS exposures, including second lien securitizations. Moody's said that incurred losses within both firms' direct RMBS and ABS CDO portfolios are now meaningfully higher than the rating agency's prior expected-case loss estimates, elevating existing concerns about capitalization levels relative to the Aaa benchmark. Moody's intends, in the short term, to assess whether worsening performance in this sector is likely to be material for exposed financial guarantors, and will update the market as appropriate. In its report published earlier, Moody's notes that based on losses to date, the level of serious delinquency, and the remaining unpaid pool balances on rated second lien transactions, the rating agency has increased its loss projections on loan pools backing subprime second lien RMBS. Moody's now expects 2005 vintage subprime second lien pools to lose 17% on average, 2006 vintage pools to lose 42% on average, and 2007 pools to lose 45% on average. However, Moody's expectations on individual transactions can vary significantly around these average loss estimates, based on the quarter of origination and deal- and issuer specific characteristics, with the worst performing deals issued in 2006/2007 now expected to lose more than 60% of their original pool balance. AMERICAN MORTGAGE: March 31 Balance Sheet Upside-Down by $23MM -------------------------------------------------------------- American Mortgage Acceptance Company reported on Friday financial results for the first quarter ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $576.4 million in total assets and $599.4 million in total liabilities, resulting in a $23.0 million total stockholders' deficit. The company reported a net loss of $29.0 million on interest income and other revenues of $10.7 million for the first quarter ended March 31, 2008, compared with net income of $5.2 million on interest income and other revenues of $12.5 million in the same period last year. Results for the first quarter of 2007 includes income from discontinued operations of $3.5 million associated with the company's economic interest in the Concord portfolio which was sold to an affiliated party in 2007. The decline in revenues during the three months ended March 31, 2008, as compared to the same period in 2007, resulted primarily from the sale of assets during the latter half of 2007 and the beginning of 2008 as a result of current market conditions and short-term liquidity issues. AMAC's net loss for the three months ended March 31, 2008, were impacted by impairments recorded for certain of the company's mortgage loans and the declines in the fair value of the company's Commercial Mortgage-Backed Securities (CMBS) investments totaling $26.5 million, as well as losses incurred upon the termination of certain interest rate swaps totaling $2.6 million. During 2008, the company terminated certain swap contracts resulting in $7.5 million of termination costs, of which $2.6 million are recorded in "other losses" in 2008. The balance in 2007 relates to the change in the fair value of free-standing derivatives. "With the continued market volatility, AMAC incurred further losses from mark-to-market adjustments of certain investments this quarter," said J. Larry Duggins, chief executive officer and president of AMAC. "We continue to focus on stabilizing AMAC's balance sheet, de-leveraging and exploring all strategic options to preserve the value of our company." 2007 Audit Report of Deloitte & Touche As reported in the Troubled Company Reporter on April 9, 2008, Deloitte & Touche LLP, in New York, said that developments in the credit markets have reduced the company's liquidity. Declining interest rates coupled with widening credit spreads have led to reduced asset values. In order to meet margin calls on the company's leveraged assets, the company has been required to sell assets and record losses. Further reductions in asset values or further margin calls may require the company to continue to sell assets and realize further losses. As a result, the company has suspended investment activity in order to manage liquidity until market conditions improve. Sources of Funds As of March 31, 2008, the company's credit facilities consisted of repurchase facilities and a related party line of credit. The company had $1.2 million available to borrow from its related party line of credit, subject to approval of Centerline Holding Company. A) Repurchase Facilities At March 31, 2008, the company had total outstanding borrowings of $79.5 million under its repurchase facilities with Citigroup and Bear Stearns. For the quarter ended March 31, 2008, there were net cash payments of $12.5 million due to margin calls/margin receipts on the company's repurchase facilities. Should market interest rates and/or prepayment speeds on the company's investments continue to increase, margin calls on its repurchase agreements could substantially increase, causing an adverse change in the company's liquidity position and strategy. B) Related Party Line of Credit The company finances its remaining investing and operating activity primarily through borrowings from its $80.0 million with Centerline Holding Company. As of March 31, 2008, the amount outstanding was $78.8 million with an interest rate of 5.70%. As of March 31, 2008, the company failed to meet certain of its covenant compliance requirments on its related party line of credit, causing it to be in default of the loan agreement. While the company has not been called upon to repay this facility, there can be no assurance that the company will not be, nor whether the company will be able to extend the facility upon expiration. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2bd9 About American Mortgage Headquartered in New York, American Mortgage Acceptance Company (AMEX: AMAC) -- http://www.americanmortgageco.com/-- is a real estate investment trust that specializes in originating and acquiring mortgage loans and other debt instruments secured by multifamily and commercial properties throughout the United States. The company invests in mezzanine, construction and first mortgage loans, subordinated interests in first mortgage loans, bridge loans, subordinate commercial mortgage backed securities, and other real estate assets. ALBERS MFG: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Albers Manufacturing Company, Inc. 85 North Central Drive O'Fallon, MO 63366 Bankruptcy Case No.: 08-43324 Type of Business: The Debtor manufactures customized electrical enclosures and cooling towers. See http://www.albers-mfg.com/ Chapter 11 Petition Date: May 8, 2008 Court: Eastern District of Missouri (St. Louis) Debtor's Counsel: Peter D. Kerth, Esq. Gallop, Johnson & Neuman, L.C. 101 S. Hanley, Suite 1600 St. Louis, MO 63105 Tel: (314) 615-6000 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Wesco Distribution, Inc. $338,228 2820 Market Street Saint Louis, MO 63103 Joseph T. Ryerson & Son, Inc. $248,667 #5 Clinton Street Box 527 Saint Louis, MO 63102 Rockwell Automation $210,069 3196 Riverport Tech Center Drive Maryland Heights, MO 63043 French Gerleman $207,712 2446 Schuetz Road Maryland Heights, MO 63043 Copper & Brass Sales, Inc. $126,880 P.O. Box 77040 Detroit, MI 48277 Central Steel & Wire Co. $71,090 3000 West 51st Street Chicago, IL 60632-2122 Exact Softward-ERP-NA, Inc. $56,755 7701 York Avenue, South Suite 350 Minneapolis, MN 55435-5832 Performance Powder Coating, LLC $56,644 8838 Frost Avenue Saint Louis, MO 63134 Cincinnati Fan & Ventilator Co. $54,410 P.O. Box 640338 Cincinnati, OH 45264-0338 ITRON, Inc. $51,652 Attn: Shawnee Carroll/Logistics 313 N. Highway 11 West Union, SC 29696 States Division of Megger $49,456 4271 Bronze Way Dallas, TX 75237 Finn-Power International, Inc. $44,994 555 W. Algonquin Rd. Arlington Heights, IL 60005 US Metals & Supply, Inc. $42,186 311 S. Sarah St. Saint Louis, MO 63110 Tecumseh Compressor Company $40,913 100 East Patterson Street Tecumseh, MI 49286 Metals USA Carbon Flat Rolled $40,218 1070 West Liberty Street P.O. Box 999 Wooster, OH 44691-0999 BKD, LLP $37,330 120 West 12th Street, Suite 1200 Twelve Wyandotte Plaza Kansas City, MO 64105-1936 Eaton Electrical $35,465 1000 Cherrington Parkway Coraopolis, PA 15108 Cooper B-Line, Inc. $30,300 509 West Monroe Street Highland, IL 62249 ANTHEM $23,609 1831 Chestnut St. Saint Louis, MO 63103 ALEXANDER VISTA: Case Summary & Nine Known Creditors ---------------------------------------------------- Debtor: Alexander Sales Vista 2181 Caraway Court Corona, CA 92879 Bankruptcy Case No.: 08-15261 Type of Business: The Debtor previously filed for chapter 11 protection on July 6, 2006 (Bankr. C.D. Calif. Case No. 06-11700) and April 9, 2008 (Bankr. C.D. Calif. 08-13815). Chapter 11 Petition Date: May 7, 2008 Court: Central District of California (Riverside) Judge: Meredith A. Jury Debtor's Counsel: Todd B. Becker, Esq. Law Offices of Todd B. Becker 3750 E. Anaheim Street, Suite 100 Long Beach, CA 90804 Tel: (562) 495-1500 Fax: (562) 494-8904 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Nine Known Creditors: Entity Claim Amount ------ ------------ ADP Unknown 7000 Village Drive Buena Park, CA 90621 EDD Unknown 1180 Palmyrita Avenue B P.O. Box 5 Riverside, CA 92517 Franchise Tax Board Unknown P.O. Box 942867 Sacramento, CA 94267-0001 Internal Revenue Service Unknown P.O. Box 21126 Philadelphia, PA 19114 Jennifer Roberts Unknown 12103 Sylvan Street North Hollywood, CA 91626 Knapp Petersen & Clarke Unknown 500 N. Brand Blvd., 20th Floor Glendale, CA 91203-1904 Schaeffer Funds, LLC Unknown c/o Hogan, Rosen, Beckham & Coren, LLP 23975 Park Sorrento, Ste 200 Calabasas, CA 91302-4001 United States Attorney's Office Unknown Tax Division Room 2315 Federal Building 300 N. Los Angeles St. Los Angeles, CA 90012 United States Department of Justice Unknown Tax Division Civil Trial Section, Western Region P.O. Box 683, Ben Frankllin Station Washington D.C. 20044 AMY ARBUCKLE: Case Summary & 13 Largest Unsecured Creditors ----------------------------------------------------------- Debtors: Amy F. Arbuckle and Gary Arbuckle, Jr. 908 Linden Avenue Oak Park, IL 60302 Bankruptcy Case No.: 08-09778 Type of Business: Amy F. Arbuckle is a meteorologist working for WFLD TV while Gary Arbuckle, Jr., owns Arbuckle Chiropractic, P.C. Chapter 11 Petition Date: April 21, 2008 Court: Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Forrest L. Ingram, Esq. Forrest L. Ingram, P.C. 79 W. Monroe Street, Suite 900 Chicago, IL 60603 Tel: (312) 759-2838 Fax: (312) 759-0298 Total Assets: $1,555,050 Total Debts: $1,866,159 Debtor's 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Sallie Mae 3rd Party Lease Educational $53,102 Attn: Claims Department P.O. Box 9400 Wilkes Barre, PA 18773 Countrywide Home Lending 306 Penbree Circle, $48,735 Attention: Bankruptcy SV-314B Bala Cynwyd, Pa. P.O. Box 5170 (single family Simi Valley, CA 93062 home) Value of security: $470,000 Value of Senior Lien: $468,982 Chase Credit Card $33,286 Attn: Bankruptcy Department P.O. Box 100018 Kennesaw, GA 30156 Wells Fargo Bank Line of Credit $17,765 Credit Card $12,013 GE Healthcare Financial Personal guarantee $23,953 Services of equipment lease for Arbuckle Chiropractic, P.C. American Express Credit Card $20,140 AES/University of Pennsylvania Educational $19,393 PNC Bank Personal guarantee $13,579 of line of credit for Arbuckle Chiropractic, P.C. Bank of America Credit Card $10,313 CBC/AES/Keystone Best Educational $10,000 THD/CBSD Credit Card $8,565 U.S. Small Business Personal loan $7,494 Administration Citibank Credit Card $4,853 BCE INC: Quebec Court of Appeal Order on Privatization Forthcoming ------------------------------------------------------------------ Revenue growth and disciplined cost control at Bell led to steady financial performance as BCE Inc. (TSX, NYSE: BCE), Canada's largest communications company, reported last week results for the first quarter of 2008. "During the quarter, we made good progress on the completion of the privatization transaction and delivered solid financial results, consistent with our plan for the year," said Michael Sabia, Chief Executive Officer of Bell Canada. "With respect to the privatization transaction, the Quebec Superior Court approved the plan of arrangement and dismissed the debentureholders' lawsuits. The Quebec Court of Appeal hearing has concluded and the court has indicated that it expects to render a decision expeditiously. Subject to meeting certain conditions, we will have received CRTC and Industry Canada approvals and expect the closing of this transaction before the end of Q2 2008." The Troubled Company Reporter reported on April 11, 2008, that Industry Minister Jim Prentice approved the proposed acquisition of BCE Inc. by an investor group led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners Inc., Madison Dearborn Partners LLC, and Merrill Lynch Global Private Equity. On March 31, the TCR disclosed that the Canadian Radio-television and Telecommunications Commission also approved the proposed acquisition, subject to certain conditions being met. "In addition, Bell had its best operating revenue growth in over two years along with steady EBITDA growth. BCE's earning per share before special items grew by 9.6%," Mr. Sabia said. Bell's operating revenues grew 2.3% this quarter to $3,663 million as growth in wireless, video, data and equipment and other revenues more than offset declines in local and access and long distance revenues. Bell's EBITDA grew by 2.8% to $1,421 million due to a focus on profitability, cost containment, ARPU growth and lower pension costs. Bell's operating income was $471 million, or 34% lower than last year due to higher restructuring and other charges which included a $236 million charge related to the CRTC's approval of the use of deferral account funds for the uneconomic expansion of broadband service to an additional 86 communities. "In our wireline business, this is the first quarter in over two years that operating revenues have held steady," said George Cope, President and Chief Operating Officer of Bell Canada. "Wireline EBITDA also showed strength with growth of 3.3% based on a strong performance from our Enterprise and Video units along with lower labour and pension costs. In addition, significant growth in winbacks led to fewer residential line losses." Growth in customer winbacks and the success of The Bell Better Home(TM) marketing program led to another quarter of year-over- year improvement in the rate of residential line (NAS) losses. Total NAS declined by 10.4% over the last twelve months. However, normalized for the previously announced loss of a major wholesale customer, and an adjustment to our residential NAS base following a review of historical records total NAS declined by 6.6%. "We continued to make operating progress this quarter with a record Q1 for wireless gross activations. We were pleased that the momentum we built in the second half of 2007 in acquiring wireless subscribers continued this quarter and that 82% of our net activations were on postpaid rate plans. Customers responded to our offers and our wide array of new full-function smartphones. However, the high level of these activations and increased spending on customer retention and handset upgrades had an impact on our wireless EBITDA growth this quarter," Mr. Cope said. The Bell Wireless segment had 351,000 gross activations, or 18.6% more than last year. Net activations this quarter were 34,000, significantly higher than the 13,000 net activations experienced in Q1 2007. Total Bell Wireless operating revenues increased by 8.7% and blended ARPU increased by $0.74 to $52.32. Bell invested $456 million of capital this quarter, or $85 million less than last year, with a continued focus on key priorities including improving the customer experience, enhancing the wireless network, and continuing the expansion of the Fibre-to- the-node (FTTN) program. Financial Highlights -------------------------------------------------------------- Q1 2008 Q1 2007 % change ($ millions except per share amounts) (unaudited) -------------------------------------------------------------- Bell(i) Operating Revenues $3,663 $3,579 2.3% -------------------------------------------------------------- BCE(ii) Operating Revenues $4,391 $4,385 0.1% -------------------------------------------------------------- Bell EBITDA $1,421 $1,382 2.8% -------------------------------------------------------------- BCE EBITDA $1,750 $1,743 0.4% -------------------------------------------------------------- Bell Operating Income(iii) $471 $714 (34.0%) -------------------------------------------------------------- BCE Operating Income $647 $921 (29.8%) -------------------------------------------------------------- BCE Cash From Operating Activities $894 $968 (7.6%) -------------------------------------------------------------- BCE Free Cash Flow(3) ($75) ($157) 52.2% -------------------------------------------------------------- BCE EPS $0.32 $0.62 (48.4%) -------------------------------------------------------------- BCE EPS before restructuring and other and net gains on investments $0.57 $0.52 9.6% -------------------------------------------------------------- (i) Bell includes the Bell Wireless and Bell Wireline segments. (ii) BCE's results for Q1 2007 include Bell, Bell Aliant and Telesat while BCE's results for Q1 2008 include only Bell and Bell Aliant. (iii) Bell operating income for Q1 2008 includes a $236 million charge related to the CRTC's approval of the use of deferral account funds for the uneconomic expansion of broadband service to an additional 86 communities. On October 31, 2007, BCE completed the sale of Telesat. Accordingly, BCE's results for Q1 2008 no longer reflect Telesat's financial results while BCE's results for Q1 2007 include Telesat's results for the full quarter. BCE's operating revenue grew to $4,391 million this quarter, or 0.1% higher than last year as revenue growth at Bell and Bell Aliant was offset by the loss of Telesat's contribution to revenue. Similarly, BCE's EBITDA grew 0.4% to $1,750 million as Bell's and Bell Aliant's EBITDA growth this quarter was offset by the loss of Telesat's contribution to EBITDA. BCE's operating income decreased by 29.8% to $647 million due to higher restructuring and other charges at Bell and the loss of Telesat's contribution to operating income. BCE's cash from operating activities decreased by 7.6% to $894 million this quarter due mainly to a decrease of $55 million in the securitization of accounts receivable at Bell Aliant. BCE's free cash flow improved to negative $75 million this quarter from negative $157 million in Q1 2007 due primarily to lower capital spending. BCE's net earnings per share (EPS) was $0.32 for the quarter compared to $0.62 for the same period last year. The decrease relates to higher restructuring and other charges, mainly due to a $236 million charge related to the CRTC's approval of the use of deferral account funds for the uneconomic expansion of broadband service to an additional 86 communities, and higher depreciation and amortization expense. EPS before restructuring and other and net gains on investments was $0.57 in the quarter, or 9.6% higher than $0.52 in Q1 of 2007 as higher EBITDA and lower tax and interest expense more than offset higher depreciation and amortization expense. * Bell Wireline Segment The Bell Wireline segment had stable revenues and continued to reduce the number of residential NAS losses this quarter. -- Bell Wireline operating revenues increased by 0.1% to $2,639 million this quarter as gains in video, data and equipment and other revenues offset decreases in local and access and long distance revenues. This is the first quarter in over two years that Bell Wireline operating revenues have not declined. -- Bell Wireline EBITDA increased by 3.3% to $1,011 million as cost savings, lower net benefit plans costs and pricing initiatives more than offset the ongoing erosion of our NAS customer base. Bell WirelineEBITDA margin improved by 1.2 percentage points to 38.3%. -- Bell Wireline operating income was $178 million this quarter, a decrease of 58% due to higher restructuring and other charges, related mainly to the CRTC's approval of deferral accounts funds to be used for the uneconomic expansion of broadband service, and higher depreciation and amortization expense. -- Local and access revenues declined by 6.8% to $848 million due to ongoing NAS erosion. -- After an adjustment of 44,000 lines following a review of historical records, residential NAS declined by 106,000 this quarter, an improvement over the decline of 131,000 experienced last year reflecting the continued growth in customer winbacks and the effectiveness of The Bell Better Home(TM) marketing campaign. -- Total NAS declined by 10.4% over the last twelve months. However, when normalized for the loss of a major wholesale customer and the adjustment to residential NAS, total NAS line losses were 119,000 this quarter compared with 153,000 in the same period last year, representing a year-over-year decline of 6.6%. -- Long distance revenues declined by 3.9% to $298 million this quarter due mainly to ongoing NAS erosion partly offset by pricing initiatives. This is the ninth consecutive quarter that long distance revenue erosion rates have improved. -- Data revenues increased 3.1% to $921 million this quarter due to growth in Internet revenues and higher IP Broadband revenues partly offset by the further erosion of legacy data services. -- High-speed Internet subscribers grew by 4.2% to 2,014,000 with 10,000 net activations during the quarter. -- Video revenues increased by 13.4% to $356 million this quarter due largely to an ARPU increase of $8 to $65. -- Video EBITDA increased by 40% to $77 million this quarter due to higher ARPU and cost containment. -- Total video subscribers increased by 1,000 this quarter to reach 1,823,000, or 0.1% lower than last year. -- Video subscriber churn was stable at 1.1%. * Bell Wireless Segment The Bell Wireless segment had its best ever Q1 for gross activations. -- Total gross activations were 351,000 this quarter, or 18.6% higher than last year. -- Total net activations were 34,000 this quarter, a significant improvement compared to the 13,000 net activations in Q1 last year. Approximately 82% of the net activations this quarter were postpaid. -- The Bell Wireless client base reached 6,250,000, up 7.4% over last year. -- Blended churn of 1.6% was unchanged from Q1 2007. Postpaid churn increased by 0.1 percentage points to 1.3% while prepaid churn decreased by 0.1 percentage points to 2.8%. -- Total Bell Wireless operating revenues grew 8.7% to $1.04 billion due to a larger subscriber base and stronger equipment sales. Wireless network revenues increased by 7.4% to $955 million and wireless equipment revenues grew by 29.8% to $74 million due to higher gross activations and customer upgrades. -- Bell Wireless EBITDA grew by 1.7% to $410 million this quarter as higher revenues were partly offset by the costs associated with higher levels of gross activations and customer upgrades. -- EBITDA margins on network revenues this quarter decreased by 2.4 percentage points to 42.9% this quarter. -- Bell Wireless operating income increased by 0.7% to $293 million this quarter. -- Blended and postpaid ARPU remained relatively stable at $52 and $64 respectively while prepaid ARPU increased $2 to $17. -- Cost of acquisition decreased by 5.7% to $396 per gross activation, reflecting lower marketing expenses and higher gross activations. * Bell Aliant Regional Communications Bell Aliant's revenues increased 1.6% this quarter to $865 million due to growth in Internet, data and IT services offsetting declines in local and access and long distance services. Operating income was $176 million, or 1.1% lower than the previous year due to higher depreciation and amortization expense. * Telesat With the sale of Telesat on October 31, 2007, BCE's results for Q1 2008 no longer include Telesat's financial results. In Q1 2007, Telesat had revenues of $122 million and operating income of $38 million. About BCE Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) -- http://www.bce.ca/-- is a communications company, providing comprehensive and innovative suite of communication services to residential and business customers in Canada. Under the Bell brand, the company's services include local, long distance and wireless phone services, high-speed and wireless Internet access, IP-broadband services, information and communications technology services (or value-added services) and direct-to-home satellite and VDSL television services. Other BCE holdings include Telesat Canada and an interest in CTVglobemedia. Bell Canada -- http://www.bell.ca/-- is a wholly owned subsidiary of BCE Inc. Bell offers integrated information and communications technology services to businesses and governments, and is the Virtual Chief Information Officer to small and medium businesses. * * * As reported in the Troubled Company Reporter on Dec. 14, 2007, Standard & Poor's Ratings Services kept its ratings on BCE Inc. and its related entities on CreditWatch with negative implications, pending the completion of the company's leveraged buyout by a consortium of private equity investors led by Teachers Private Capital as announced on June 30, 2007. As a result of the proposed LBO, S&P expect reported debt to increase to about CDN$37 billion from about CDN$10 billion at Sept. 30, 2007. As reported in the Troubled Company Reporter on Sept. 26, 2007, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on BCE Inc. and wholly owned subsidiary Bell Canada to 'BB-' from 'A-'. BEAZER HOMES: Files Fiscal Year 2007 Financial Statements --------------------------------------------------------- Beazer Homes USA, Inc. (NYSE: BZH) filed its annual report on Form 10-K for the year ended September 30, 2007, quarterly report on Form 10-Q for the quarter ended June 30, 2007 and amended quarterly reports on Forms 10-Q/A for the quarters ended December 31, 2006 and March 31, 2007. These reports reflect the completed restatement of certain prior periods' financial statements resulting from the findings of the previously announced independent investigation by the Audit Committee of the Board of Directors. In conjunction with these filings, the Company released its financial results for the quarter and year ended September 30, 2007. The Company currently expects to report financial results and file quarterly reports on Forms 10-Q for the quarters ended December 31, 2007 and March 31, 2008 on, or prior to, May 15, 2008. At that time, the Company also expects to schedule a conference call to discuss its financial results for the first half of fiscal 2008. Restatement As previously announced, during the course of its independent investigation, the Audit Committee determined that the Company's mortgage origination practices related to certain loans in prior periods violated certain applicable federal and/or state origination requirements. The Audit Committee also discovered accounting errors and/or irregularities that required restatement resulting primarily from (1) inappropriate accumulation of reserves and/or accrued liabilities associated with land development and house costs ("inventory reserves") and the subsequent improper release of such reserves and accrued liabilities and (2) inaccurate revenue recognition with respect to certain model home sale lease-back transactions. During the course of the investigation, a continuing interest in the potential appreciation of model homes sold in these model home sale lease- back transactions was identified. Due to this continuing interest, these transactions did not qualify for sale-leaseback accounting and, instead should have been accounted for as financing transactions. The restatement of these transactions will relate primarily to timing differences that have had and will have the effect of shifting revenue and income from the date of the original transaction to the future period in which the 'leases' are terminated. In conjunction with the restatement of the items above, corresponding capitalized interest, capitalized indirect costs, and income tax adjustments were made to the consolidated financial statements as these balances were impacted by the aforementioned adjustments. Other adjustments were made to the consolidated financial statements and condensed consolidated financial statements relating to corrections of errors, some previously identified but historically not considered to be material to require correction and some discovered as part of the restatement process. Further detail on these other adjustments is available in the reports filed with the Securities and Exchange Commission. As a result of these errors and irregularities, the fiscal 2007 Form 10-K includes restated consolidated financial statements for fiscal 2005 and 2006 and restated Selected Financial Data for fiscal years 2003 and 2004. In addition, the cumulative effect of errors and irregularities attributed to periods prior to October 1, 2002 has been reflected in Selected Financial Data as an increase to retained earnings at September 30, 2002 of $24.8 million for fiscal years 1998 -- 2002. The table reconciles net income "as previously reported" to net income "as restated" for fiscal years 2003 - 2006 (in thousands): Net Income, As Net Income, Previously Reported As Restated ------------------- ----------- Fiscal Year Adjustments ----------- ----------- 2003 $172,745 $(971) $171,774 2004 235,811 10,365 246,176 2005 262,524 13,375 275,899 2006 388,761 (19,925) 368,836 Taking into account the entire restatement period through fiscal year 2006, the cumulative effect of the matters arising from the restatement is a $27.6 million increase in retained earnings, shown below (in thousands): Cumulative Fiscal Year(s) Restatement Impacts Impact -------------- ----------- Retained Earnings at September 30, 2006, as reported $1,362,958 Restatement adjustments: Inventory Reserves 1998-2006 40,183 Model Home Sale-Leaseback 2001-2006 (21,950) Other 1998-2006 7,895 Benefit From Income Taxes 1998-2006 1,466 Cumulative Impact of Restatement Adjustments 27,594 Retained Earnings at September 30, 2006, as restated $1,390,552 The fiscal 2007 quarterly reports include restated condensed consolidated financial statements for the comparative periods of fiscal 2007 and 2006. Fiscal 2007 is not included in the table above because the Company has not previously filed audited financial statements for fiscal 2007 and therefore fiscal 2007 is not included as an annual restatement period. The restatement process did, however, lead to the restatement of the financial results previously reported for the quarters ended December 31, 2006 and March 31, 2007. These changes resulted in part from the inventory reserves, model home sale-leaseback transactions and other adjustments discussed above. More significantly, however, there were increases in pre-tax inventory impairment charges of $20.4 million and $25.4 million for the quarters ended December 31, 2006 and March 31, 2007, respectively. These increases to inventory impairment charges resulted from both the impact on inventory balances as a result of the aforementioned inventory adjustments and the correction of certain capitalized interest and indirect cost inputs into the cash flow models used to assess and calculate inventory impairments. Total adjustments to net income for the first two quarters of fiscal 2007 are shown below (in thousands): Net Loss, As Net Loss, Previously Reported As Restated ------------------- ----------- Quarter Adjustments ------- ----------- Q1 2007 ($59,006) ($20,897) ($79,903) Q2 2007 ($43,089) ($14,102) ($57,191) Identification of Control Deficiencies and Remediation Steps The Company's management performed an assessment of the effectiveness of the Company's internal control over financial reporting as of September 30, 2007. Management concluded that, as of September 30, 2007, the Company did not maintain effective internal control over financial reporting because of the identification of material weaknesses in its internal control over financial reporting. Further details including control deficiencies which constituted material weaknesses as of September 30, 2007, are available in Item 9A. Controls and Procedures of the 2007 Form 10-K filed. The Company's management is committed to achieving and maintaining a strong control environment and an overall tone within the organization that empowers all employees to act with the highest standards of ethical conduct. In addition, management remains committed to the process of developing and implementing improved corporate governance and compliance initiatives. The current management team has been actively working on remediation efforts to address the material weaknesses, as well as other identified areas of risk. Key elements of the remediation efforts include, but are not limited to: * Appointment of a Compliance Officer in November 2007 responsible for implementing and overseeing the Company's enhanced Compliance Program. * Revision, adoption, disclosure and distribution of an amended Code of Business Conduct and Ethics in March 2008; launching of comprehensive training program in April 2008 that emphasizes adherence to and the vital importance of the Code of Business Conduct and Ethics in which all employees are required to participate. * Transfer of administration of Ethics Hotline from officers of the Company to an independent third party company in March 2008. * Withdrawal from the mortgage business in February 2008. * Termination of the former Chief Accounting Officer and appropriate action, including termination of employment, against other business unit employees who violated the Code of Business Conduct and Ethics, the hiring of a new, experienced Chief Accounting Officer in February 2008, creation of Regional CFO positions, and changes in role of business unit financial controllers. * Reorganization of field operations to concentrate certain financial functions into Regional Accounting Centers in order to allow a greater degree of control and consistency in financial reporting practices. * Taking or planning to take in the near term the following actions by the new Chief Accounting Officer and Regional CFOs: -- conducting reviews of accounting processes to incorporate technology improvements; -- formalizing the process, analytics, and documentation around the monthly analysis of actual results against budgets and forecasts; -- improving quality control reviews within the accounting function; and -- formalizing and expanding the documentation of the Company's procedures for review and oversight of financial reporting. * Development and/or clarification of existing accounting policies related to estimates involving significant management judgments, as well as other financial reporting areas. * Allocation of additional resources within the Audit and Controls department to the review of financial reporting policies, process, controls, and risks. Ongoing External Investigations As previously disclosed, the Company and its subsidiary, Beazer Mortgage Corporation are under investigations by the United States Attorney's Office in the Western District of North Carolina, as well as and other state and federal agencies, concerning the matters that have been the subject of the Audit Committee's independent investigation. In addition, the Company received from the Securities and Exchange Commission a formal order of private investigation to determine whether Beazer Homes and/or other persons or entities involved with Beazer Homes have violated federal securities laws, including, among others, the anti-fraud, books and records, internal accounting controls, periodic reporting and certification provisions thereof. The Company is fully cooperating with these investigations which are ongoing. The Company cannot predict or determine the timing or final outcome of the investigations or the effect that any adverse findings in the investigations may have on it. The Company intends to attempt to negotiate a settlement with prosecutors and regulatory authorities with respect to the mortgage origination issues that would allow us to quantify our exposure associated with reimbursement of losses and payment of regulatory and/or criminal fines, if they are imposed. However, no settlement has been reached with any regulatory authority and the Company believes that although it is probable that a liability exists related to this exposure, it is not reasonably estimable at this time. Fiscal Fourth Quarter and Full Year 2007 Financial Results The Company also announced its financial results for the quarter and year ended September 30, 2007. These results reflect the aforementioned restatement for applicable periods. Summary results of the quarter and year, some of which had been previously disclosed on a preliminary basis, are: * Quarter Ended September 30, 2007 Reported net loss of ($155.2) million, or ($4.03) per share, including pre-tax charges related to inventory impairments and abandonment of land option contracts of $212.0 million, goodwill impairments of $23.0 million, and impairments in joint ventures of $25.5 million. For the fourth quarter of the prior fiscal year, net income totaled $83.7 million, or $1.99 per diluted share. Home closings: 3,949 homes, compared to 6,268 in the fourth quarter of the prior year. Total revenues: $1.10 billion, compared to $1.83 billion in the fourth quarter of the prior year. New orders: 982 homes, compared to 1,921 in the fourth quarter of the prior year. Net cash provided by operating activities: $387.3 million, compared to $237.7 million in the fourth quarter of the prior year. * Year Ended September 30, 2007 Reported net loss of $(411.1) million, or $(10.70) per share, including pre-tax charges related to inventory impairments and abandonment of land option contracts of $611.9 million, goodwill impairments of $52.8 million and impairments in joint ventures of $28.6 million. For the prior fiscal year, net income totaled $368.8 million, or $8.44 per diluted share. Home closings: 12,020 homes, compared to 18,361 in the prior year. Total revenues: $3.49 billion, compared to $5.36 billion in the prior year. New orders: 9,903 homes, compared to 14,191 in the prior year. Net cash provided by operating activities: $509.4 million, compared to net cash used in operating activities of $378.0 million in the prior year. * As of September 30, 2007 Cash and cash equivalents: $459.5 million (including $5.2 million of restricted cash) Net debt to capitalization: 51.4% Backlog: 2,985 homes with a sales value of $838.8 million compared to 5,102 homes with a sales value of $1.56 billion as of September 30, 2006. Subsequent to September 30, 2007, the Company has repaid approximately $95 million in secured notes, pledged $107.0 million to collateralize its outstanding letters of credit and paid a consent fee to holders of its Senior Notes and Senior Convertible Notes and related expenses totaling $21.0 million. As of February 2008, cash pledged to collateralize letters of credit was released and replaced with real estate assets. About Beazer Homes Headquartered in Atlanta, Beazer Homes USA Inc., (NYSE: BZH) -- http://www.beazer.com/-- is a single-family homebuilder with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and West Virginia. The company also provides mortgage origination and title services to its homebuyers. * * * As reported in the Troubled Company Reporter on March 7, 2008, Fitch Ratings downgraded Beazer Homes USA Inc.'s Issuer Default Rating and other outstanding debt ratings as, including IDR to 'B+' from 'BB-'; Senior notes to 'B/RR5' from 'BB-'; Convertible senior notes to 'B/RR5' from 'BB-'; and Junior subordinated debt to 'CCC+/RR6' from 'B'. Fitch has assigned a Recovery Rating to Beazer's Secured revolving credit facility of 'BB/RR1' . The TCR said on Feb. 19, 2008, that Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured note ratings on Beazer Homes USA Inc. to 'B' from 'B+'. The ratings remain on CreditWatch, where they were placed with negative implications on Aug. 14, 2007. The TCR reported on May 8, 2008, that Beazer Homes USA Inc. stated in a filing with the Securities and Exchange Commission that it received a default notice from The Bank of New York Trust Company National Association, the trustee under the indenture governing the company's outstanding $103.1 million unsecured junior subordinated notes due July 2036. The notice alleges that the company is in default under the indenture because the company has not provided certain required information, including its annual audited and quarterly unaudited financial statements. BELL CP: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: Bell CP, Ltd. 900 RR 620 S., Ste. C101-183 Lakeway, TX 78734 Bankruptcy Case No.: 08-32210 Chapter 11 Petition Date: May 5, 2008 Court: Northern District of Texas (Dallas) Debtor's Counsel: Marvin E. Sprouse, III Jackson Walker, LLP 100 Congress Ave., Ste. 1100 Austin, TX 78701 Tel: (512) 236-2088 Email: msprouse@jw.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor does not have any creditors who are not insiders. BIG ROC TOOLS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Big Roc Tools, Inc. 1050 W. Katella Ave. Unit C Orange, CA 92867 Bankruptcy Case No.: 08-12407 Type of Business: The Debtor manufactures automotive tools & power tools. Chapter 11 Petition Date: May 5, 2008 Court: Central District Of California (Santa Ana) Judge: Theodor Albert Debtor's Counsel: Michael B. Reynolds, Esq. Snell & Wilmer, LLP 600 Anton Blvd. Ste. 1400 Costa Mesa, CA 92626 Tel: (714) 427-7000 Email: mreynolds@swlaw.com http://www.swlaw.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DBS Bank loan $2,953,746 445 S. Figueroa St. Ste. 3550 Los Angeles, CA 90071 John & Shirley Tsai loan $800,000 1612 Holly Ave. Arcadia, CA 91007 Xiaoshan I/E Trading Co., Ltd. trade debt $425,366 Flat 4 No. 398 Huiyuan Building South Tonghui Rd. Xiaoshan Hangzhou Zhejiang China 311200 Mansion Tools trade debt $300,000 3870 Delta Ave. Rosemead, CA 91770 Hsin Tsai Trust loan $140,000 Hangzhou Yuhang Foreign trade debt $172,927 Trading, Inc. Anhul Guangde Zhongding trade debt $98,632 Automobile Rico Tools Co., Ltd. trade debt $82,093 Jiaxing Datong Machinery Plant trade debt $73,825 Changzhou Leader Tools Co., trade debt $69,362 Ltd. Yongkang Xieheng Industry trade debt $61,231 Qingdao Ligon Machine Co., trade debt $50,798 Ltd. Sino-American Jiaxeng Golden trade debt $57,763 Roc Zhejiang Ruian Yinhong Lock trade debt $50,510 Tools Co. Zhejiang Second Light Industry trade debt $37,271 I/E Zhejiang Dinsi Electronic Co., trade debt $34,032 Ltd. C&S International Trading Co., trade debt $33,560 Ltd. New Mansion Enterprise Co., trade debt $31,910 Ltd. Quanzhou Hongfan Craft Co., trade debt $31,433 Ltd. Xian Brightway International trade debt $26,184 Trading, Inc. BLUE WATER: Files Chapter 11 Plan, Mulls Sale of Business --------------------------------------------------------- Blue Water Automotive Systems, Inc., BWAS Holdings, Inc., Blue Water Plastics Mexico, Ltd., BWAS Mexico, LLC, and Blue Water Automotive Systems Properties, LLC, filed with the United States Bankruptcy Court Eastern District of Michigan on May 9, 2008, a Joint Plan of Liquidation, which contemplates the going concern sale of the business to pay off claims from the proceeds of the sale. The Debtors have yet to file their liquidation analysis. The Debtors, however, have compared their prospects as an ongoing business enterprise with the estimated recoveries to creditors in a liquidation scenario and concluded that the recovery for holders of allowed claims would be maximized in a sale and liquidation. To avoid the dissipation of value that would come through the threatened resourcing of product by some customers, the Debtors negotiated non-resourcing agreements with participating customers General Motors Corp., Chrysler LLC and certain affiliates, and Ford Motor Company. The proceeds of the sale will be distributed to Citizens Bank, the lender of the $35,000,000 DIP Loan; holders of allowed secured claims to the extent of the collateral value; allowed priority claims; and holders of other allowed claims in order of priority. Holders of equity interests in the Debtors will receive no recovery, but holders of equity interest in BWAS Mexico and Blue Water Plastics Mexico may receive distributions if the two entities are included in the sale. The Liquidation Plan will be effective when: 1. The Court approves the sale of the Business; 2. The Court enters an order confirming the Plan; and 3. The purchaser closes on the sale. A full-text copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/bw_disclosurestat.pdf A full-text copy of the Plan of Liquidation is available for free at http://bankrupt.com/misc/bw_planofliquidation.pdf Participating Customers Set June 30 Deadline In the disclosure statement explaining the terms of the Liquidation Plan, the Debtors disclosed that the Participating Customers have agreed not to resource, provided that Blue Water meets these milestones in pursuit of a sale of substantially all its assets to a qualified buyer: April 15, 2008 Debtors must obtain a letter of intent for a Sale. May 28, 2008 Debtors must obtain a definitive asset purchase agreement and file motion to approve the Sale. June 20, 2008 Debtors must obtain an order approving the Sale. June 30, 2008 Sale closing. The Debtors note that if the Participating Customers re-source their production, their estates will suffer a substantial decrease in value, because the value of the production contracts will not be captured in the Sale. BWASI has engaged Miller Buckfire & Co., LLC, in connection with the sale process. Miller Buckfire has assisted the Debtors in, among other things, identifying potential bidders and soliciting bids and managing the bidders' due diligence process. Miller Buckfire is expected to assist the Debtors in negotiating and finalizing the terms of an APA. The final APA will be filed and served for approval of the Court if and when consummated. The Debtors intend to work toward execution of an APA with at least one of the interested parties on or about May 28, 2008. "Numerous expressions of interest/preliminary letters of intent were received and reviewed by the Debtors, and a number of parties are in the process of conducting due diligence towards a potential purchase," the Debtors said in the Disclosure Statement. The Debtors anticipate filing a motion to prohibit any credit bidding by CIT Equipment Financing and CIT Capital USA, who have liens on only the Debtors' fixed assets. The Debtors believe that permitting CIT Equipment Financing and CIT Capital USA to credit bid could reduce the value of the Sale by chilling bidding among parties interested in purchasing all of the Debtors' assets. The Debtors also have a non-Debtor Mexican affiliate, Blue Water Automotive Systems Mexico, S. de R.L. de C.V., which is not a party to the Chapter 11 cases but which is expected to be part of the Sale. Blue Water Sees Value in Mexico Facilities The Debtors design, manufacture and supply injection molded thermoplastic components and assemblies for top automotive original equipment manufacturers, including the Detroit Three -- Ford, General Motors, Chrysler, which represented 50% of their business in 2007. The company's strongest OEM relationship is with Ford, for whom it is currently launching three major programs with two additional programs in the development stage. The company continues to expand existing relationships with Mercedes-Benz, Valeo, Denso, Volkswagen and other "new domestic" OEMs and Tier 1 suppliers to diversify revenues and capitalize on the growth of these customers in the North American market. Over the past 15 years, the automotive components suppliers have consolidated and globalized as OEMs have reduced their supplier base. In response to this trend, Blue Water's growth strategy has focused on leveraging relationships with OEMs to further penetrate its existing customer base and winning business from "new domestic" OEMs and Tier 1 suppliers. Blue Water cites its low cost manufacturing facility in Mexico City an important piece of its growth plan. The facility has available capacity and room for expansion to significantly grow its existing production capabilities. BWASI believes it is well positioned to win business in areas where its design and engineering expertise and advanced manufacturing equipment and process provide value to OEMs. Means of Implementing Plan On the effective date of the Plan, any proceeds generated by the Sale, after satisfaction of all allowed secured claims and administrative claims, will be transferred to a Creditors' Trustee. The Creditors Trustee will be appointed by the Bankruptcy Court prior to the Effective Date. The Creditors Trustee will, as representative of the Debtors' estate, retain and may enforce the rights to commence causes of action include avoidance actions. The Creditors Trustee will also be responsible for: (i) preparation and filing of tax returns, on behalf of the Debtors, the Estates, and the Creditors' Trust, including the right to request a determination of tax liability as set forth in Section 505 of the Bankruptcy Code; (ii) requesting and receiving of W-9 federal tax forms for any party who is entitled to receive distribution on account of a claim or equity interest; (iii) final administration of employee benefits if any, and effecting the final administration and termination of all Compensation and Benefit Plans; (iv) payment of post-confirmation fees due to the Office of the United States Trustee; (v) filing of status reports with the Court or other parties- in-interest on a quarterly basis including a summary of any disbursements or receipts; (vi) any duty of care, loyalty or other duty imposed or imputed by law; (vii) responding to inquiries of creditors; and (viii) collecting and liquidating assets not included in the Sale. The Creditor's Trustee may retain attorneys, accountants, advisors, expert witnesses, and other professionals as he/she will consider advisable without necessity of approval of the Bankruptcy Court. Persons who served as professionals to the Official Committee of Unsecured Creditors or the Debtors prior to the Effective Date may serve the Creditors' Trustee and professionals retained by him or her will be paid by him or her in the ordinary course from amounts held in the Creditors' Trust. The Creditors Committee will be dissolved on the Effective Date. The Debtors, other than, possibly, Blue Water Plastics Mexico and BWAS Mexico will also be deemed dissolved. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Issue No. 14, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Classification and Treatment of Claims Under Plan ------------------------------------------------------------- The significant debt obligations of Blue Water Automotive Systems, Inc., and its four debtor-affiliates as of their bankruptcy filing date are: A. Creditors Holding Secured Claims: CIT Capital USA, Inc. $14,981,372 CIT Group/Business Credit $17,560,464 CIT Group/Equipment Financing Inc. $14,460,230 KPS Special Situations Fund II L.P. $5,000,000 KPS Special Situations Fund II(a) L.P. Microsoft Financing $216,049 ----------- Total $52,218,115 B. Creditors Holding Specific Equipment Secured Claims (Lease Payments) $452,757 C. Creditors Holding Unsecured Priority Claims $770,441 D. Creditors Holding Non-Priority Unsecured Claims (Trade Claims) $33,572,242 The Debtors' debt to CIT Group/Business Credit has been paid off in connection with an order approving a $35,000,000 of DIP financing from Citizens Bank. The $770,441 listed for unsecured priority claims include some filed claims the Debtors expect to be reclassified as non- priority claims. The $33,572,242 listed for trade claims may be increased by certain filed claims. On May 9, 2008, the Debtors filed with the United States Bankruptcy Court Eastern District of Michigan a chapter 11 plan of liquidation, which contemplates the sale of the Debtors' business by June 30, 2008. The Debtors estimate that as of the effective date of the Liquidation Plan, these administrative expense claims will be outstanding: Total Amount ------------ Section 503(b)(9) Claims $3,053,674 Accrued Professional Compensation $1,137,900 Other Administrative Expense Claims $1,600,000 In February 2008, the Participating Customers made advances to Blue Water Automotive Systems, Inc., totaling $3,884,981, which are deemed to constitute secured advances: Participating Customer Total Amount ---------------------- ------------ Ford Motor Company $3,884,981 General Motors Corp. 1,011,000 Chrysler 708,000 Ford paid on an accelerated basis $2,889,288 of engineering, design and testing payment, also in connection with the Court's order approving cash collateral. BWASI has also borrowed funds from Citizens Bunk under a Court- approved $35,000,000 DIP Facility. Certain of the advances were supported by a guaranty of Ford. The borrowing is secured on a superpriority basis by a first lien on substantially all of the Debtors' postpetition assets, excluding tooling, avoidance actions and the Debtors' claims against Sama Automotive, and a second lien of the Debtors' prepetition assets, except for certain excluded collateral. The Debtors propose to treat interests and allowed claims in this manner: Class Description Status Treatment ----- ------------ ------ --------- N/A Administrative 100% Each Holder of an allowed Clams Recovery administrative claims will be paid in full in cash. N/A DIP Facility 100% The claims will be paid in full Claims & Cash Recovery in accordance with the Final Collateral DIP Order. Lien Claims N/A Priority Tax 100% Holders of priority tax claims Claims Recovery will receive either (a) installment payments in cash of a total value, as of the Effective Date, equal to the allowed amount of the claim, plus interest, commencing on the Effective Date, if the obligation is assumed by purchaser of the Debtors' assets; or (b) cash on the Effective Date of a total value equal to the allowed amount of the claim. N/A Other 100% Holders of Other Priority claims Priority Recovery will receive (a) installment Claims payments, to the extent deferred cash payments are permitted pursuant to Section 1129(a)(9)(B) of the Bankruptcy Code, or (b) full payment in cash of the allowed claims. 1 Secured May Be As of the Effective Date, the Claims of Impaired holder of the claim will CIT Capital receive, at the election of Against Properties (after consulting Proper with the Purchaser), either: (i) Provided that CIT Capital does not credit bid at the Sale, Cash in an amount equal to the Collateral Value; (ii) the retention of the holder's lien on its collateral and deferred equal monthly payments, the present value of which monthly payments will equal the Collateral Value, commencing on the first Business Day of the month following the Effective Date and continuing for 10 years from the Effective Date, based on a 20-year amortization of the allowed amount, with the deferred payments calculated at the lowest market rate of interest, and further provided that the unpaid allowed amount of the allowed secured claim may be prepaid at any time without penalty, or (iii) transfer of title to all or a portion of the collateral securing the allowed claim to the holder thereof, subject to any preexisting leasehold rights as may be readjusted to account for any property (a) sold by Properties and for which the liens of CIT Capital were transferred to the proceeds of the sale or (b) not utilized by the Debtors or Purchaser after the transfer of such property back to the holder of the Allowed Claim. 2 Real Estate 100% Claims holders will be paid the Tax Claims Recovery; full amount of the claim, Against Impaired without interest. Properties 3 Specific May Be Each holder of an allowed claim Equipment Impaired in Class 3 is deemed to be in a Secured separate subclass. Claim Claims holders will receive, except to the extent the holder agrees to a different treatment, at the election of the Debtors (after consultation with the Purchaser), either: (i) upon the sale of the collateral securing such Allowed Secured Claim, cash in an amount equal to the Collateral Value; or (ii) the transfer of title to the collateral securing the claim to the holder thereof. 4 Other May Be Each claim holder is deemed to Secured Impaired be placed in a separate subclass Claims Each holder will receive, either: (i) upon the sale of the collateral securing the allowed claim, cash in an amount equal to the Collateral Value; or (ii) the retention of the holder's lien on its collateral and deferred monthly payments, the present value of which monthly payments will equal the Collateral Value commencing on the first Business Day of the month following the Effective Date and continuing for 5 years from the Effective Date, with the deferred payments calculated at the lowest market rate of interest, and further provided that the unpaid Allowed Amount of the allowed secured claim may be prepaid at any time without penalty, or, to the extent the collateral is real property, the retention of the holder's lien on its collateral and deferred equal monthly payments, the present value of which monthly payments will equal the Collateral Value, commencing on the first Business Day of the month following the Effective Date and continuing for 10 years from the Effective Date, based on a 20-year amortization of the Allowed Amount, with the deferred payments calculated at the lowest market rate of interest, and further provided that the unpaid Allowed Amount of the Allowed Secured Claim may be prepaid at any time without penalty; or (iii) transfer of the title to the collateral securing the Allowed Secured Claim to the holder thereof; or (iv) other treatment as will provide the holder with the indubitable equivalent of the holder's Allowed Secured Claim. 5 General Impaired Each holder will receive its pro Unsecured rata share of the subtrust Claims under Creditors' Trust established for allowed claims Payments will be made by the Creditors' Trustee as soon as practicable after the Effective Date as cash becomes available for substantial distributions, in accordance with the Creditors' Trust. 6 Unsecured Impaired Each holder of an allowed claims Deficiency that prior to the Petition Date Claims was secured by liens on property of a Debtor but which are no longer secured, whether in whole or in part, because the collateral value is less than the total amount of the Allowed claim, will receive its pro rata share of the subtrust under the Creditors' Trust established for allowed claims. 7 Unsecured Up to 10% Each holder will receive 10% of Construction Recovery; the Allowed Amount of the Claim, Claims Impaired provided, however, that in no Against event will the total amount Properties payable to the holders of payable to the holders of the claims in Class 7 exceed $100,000 and if 10% to the holders would result in an aggregate total of payments in excess of $100,000, then each holder will receive its pro rata share of $100,000. 8 Convenience Up to 50% Holders of allowed unsecured Recovery; Claims of (a) $2,000 or less, or Impaired (b) an amount greater than $2,000, provided that a holder may elect to reduce the allowed amount of the claim to $2,000 by election on its ballot, will receive 50% of the Allowed Amount of the claim, provided, however, that in no event will the total amount payable to the holders of Allowed Claims in Class 8 exceed $400,000 and if payment of 50% to the holders would result in an aggregate of payments in excess of $400,000, then each holder of an Allowed Claim in Class 8 will receive its Pro Rata Share of $400,000. 9 Equity 0% Holders will neither receive Interests Recovery; nor retain any property under (Other than Impaired the Plan. Mexico Equity Interests) 10 Mexico Equity 0 or 100% In the event that the Mexico Interests Recovery, Equity Interests are sold in depending the Sale, the Holders of Mexico on Equity Interests will receive the proceeds of the Mexico Equity Interests to the extent they exceed the Collateral Value. In the event the Mexico Equity Interests are not sold in the Sale, the Holders of Mexico Equity Interests will not receive anything on account of the interests. Holders of claims in Classes 5, 6, 7, and 8 are impaired and thus entitled to vote on the Plan. To the extent claim holders in classes 1, 2, 3 and 4 are impaired, they may be entitled to vote on the Plan. Holders of Equity Interests in Class 9 are conclusively deemed to reject the Plan. Holders of Mexico Equity Interests will, depending upon the election by the Purchaser either be conclusively deemed to reject the Plan or are unimpaired in the event the Mexico Equity Interests are sold in the Sale. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Issue No. 14, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Court Sets Plan Confirmation Hearing on June 18 ----------------------------------------------------------- The United States Bankruptcy Court Eastern District of Michigan will convene a hearing June 18, 2008, to consider confirmation of the Joint Plan of Liquidation of Blue Water Automotive Systems, Inc., BWAS Holdings, Inc., Blue Water Plastics Mexico, Ltd., BWAS Mexico, LLC, and Blue Water Automotive Systems Properties, LLC. The Debtors filed their Liquidation Plan on May 9, 2008. The Court outlined a Plan Confirmation Schedule that will allow the Debtors to consummate and close a sale of substantially all of their assets by June 30. The Court also set this Plan Confirmation Schedule: May 21, 2008 -- Deadline to file objections to final approval of the Disclosure Statement May 23, 3008 -- Hearing on the final approval of the Disclosure Statement June 10, 2008 -- Deadline to return ballots on the Plan, as well as objections to confirmation of the Plan About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. (Blue Water Automotive Bankruptcy News, Issue No. 14, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BLUE WATER: Clarifies Objections to Proposed Incentive Payments --------------------------------------------------------------- Representing Blue Water Automotive Systems, Inc., and its four debtor-affiliates, Nicole Y. Lamb-Hale, Esq., at Foley & Lardner, LLP, in Detroit, Michigan, contends that the Official Committee of Unsecured Creditors' response to the Debtors' request to pay incentives to critical employees does not raise issues with respect to the substance and structure of the incentive payments. She notes that the Committee seeks only to prevent preferential payment of the Incentive Payments over other administrative expense claims. The Incentive Payments, if any, will be paid only upon consummation of a sale of the Debtors' assets, Ms. Lamb-Hale says. Pursuant to the Accommodation Agreements with the Major Customers, a sale must close no later than June 30, 2008. A sale is subsequent to the hearing to consider confirmation of the Debtors' Joint Plan of Reorganization scheduled on June 18, 2008. Therefore, because all administrative expenses must be satisfied upon plan confirmation, which will occur prior to a sale of the Debtors' assets, the Incentive Payments will not receive preferential treatment, thus alleviating the concerns of the Committee, Ms. Lamb-Hale concludes. In support of their request, the Debtors submitted to the Court a chart containing supplemental information regarding the Critical Employees, including (a) the name of the Critical Employee; (b) present position and responsibilities of the Employee; (c) the Critical Employee' work experience, with an explanation of how his experience qualifies or impacts the employee in the present position; and (d) the length of service with the Debtors. The chart is available for free at: http://bankrupt.com/misc/Bluewater_CriticalEmployees.pdf Moreover, the Debtors submitted an affidavit of Michael Lord, their president and chief executive officer, attesting that the Critical Employees are not insiders; and that the incentive payments are not retention payments as they will only be paid upon the Critical Employees (i) perform their duties in a manner that maximizes the value of the Debtors' estates as determined by the management team of the Debtors, and (b) are in the employ of the Debtors' estates as on the successful consummation of a sale of the Debtors' assets. The Lord Affidavit also attests to the fact that none of the Employees are equity holders, creditors, debtors or guarantors of the Debtors. In a separate filing, the International Brotherhood of Teamsters Local Union No. 339, representing 450 people at the Debtors' Port Huron and Haas Drive Plants, withdrew its objection to the Motion. The Teamsters did not cite any reason for its withdrawal. As previously reported by the Troubled Company Reporter on April 21, the Debtors proposed to make incentive payments totaling US$497,812 to a limited number of critical, non-insider employees. The Critical Employees are mid-level employees who are critical to the day-to-day operations of the Debtors. The Debtors argued that the Incentive Payments are necessary to appropriately compensate the Critical Employees, given the enormous additional burdens placed on them by these bankruptcy proceedings, and to ensure that the Employees remain motivated to perform the important tasks necessary to maintain the value of the Debtors' businesses. About Blue Water Automotive Blue Water Automotive Systems, Inc. designs and manufactures engineered thermoplastic components and assemblies for the automotive industry. The company's product categories include airflow management, full interior trim/sub-systems, functional plastic components, and value-added assemblies. They are supported by full-service design, program management, manufacturing and tooling capabilities. With more than 1,400 employees, Blue Water operates eight manufacturing and product development facilities and has annual revenues of approximately US$200 million. The company's headquarters and technology center is located in Marysville, Mich. The company has operations in Mexico. In 2005, KPS Special Situations Fund II, L.P., and KPS Special Situations Fund II(A), L.P., acquired Blue Water Automotive through a stock purchase transaction. In 2006, the company acquired the automotive assets and operations of Injectronics, Inc., a manufacturer of thermoplastic injection molded components and assemblies. KPS then set about reorganizing the company. The company implemented a program to improve operating performance and address its liquidity issues. During 2007, the company replaced senior management, closed two facilities, and reduced overhead spending by one third. Blue Water Automotive and four affiliates filed for chapter 11 bankruptcy protection Feb. 12, 2008, before the United States Bankruptcy Court Eastern District of Michigan (Detroit) (Case No. 08-43196). Judy O'Neill, Esq., and Frank DiCastri, Esq., at Foley & Lardner, LLP, serves as the Debtors' bankruptcy counsel. Administar Services Group LLC acts as the Debtors' claims, noticing, and balloting agent. Blue Water's bankruptcy petition lists assets and liabilities each in the range of US$100 million to US$500 million. The Debtors filed their Liquidation Plan on May 9, 2008. The Court will convene a hearing May 23 to consider approval of the Disclosure Statement explaining the Plan, for voting purposes. The Court will hold a hearing June 18, 2008, to consider confirmation of the Plan. (Blue Water Automotive Bankruptcy News, Issue No. 14, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) BUILDING MATERIALS: To Consolidate BMC West and SelectBuild ----------------------------------------------------------- Building Materials Holding Corporation plans to unify and streamline its BMC West and SelectBuild operations and position the company for future growth and value generation. The aggregate annual SG&A expense reductions from the plan are estimated to be in the range of $20 million to $25 million. "We are conducting a comprehensive analysis of our business and developing an initial plan for improved profitability and cash flow to right-size the organization to reflect the current homebuilding market," Robert E. Mellor, chairman and chief executive officer, said. "While there are considerable external pressures on the markets we serve, our board and management team are committed to making internal changes designed to minimize the impact of the downturn while positioning our company for growth as the market improves," Mr. Mellor stated. "We expect to see significant improvements in our cash flow as we execute this plan, which will bring the company's two major business units into much closer alignment," Stanley M. Wilson, president and chief operating officer, said. "BMC West and SelectBuild have traditionally maintained their independence not only in terms of branding, but also with regard to strategy, purchasing, administration and leadership." "While maintaining the unique brand identities of BMC West and SelectBuild, we intend to flatten our management structure and reduce our operational organization from 13 regions into 7 regions," Mr. Wilson, continued. "We expect to take advantage of the new synergies created by this realignment, while also working to grow the bottom line by leveraging our purchasing power to improve margins and by streamlining our back-office support functions to reduce expenses." The primary components of the plan are: A) Organizational Realignment -- The realignment flattens BMHC's organizational structure by reducing its existing 13 regions into 7 regions: * Intermountain (Colorado, Idaho, Montana, Utah), * Midwest (Illinois), * Northwest (Oregon, Washington), * Pacific (California, Northern Nevada), * Southeast (Florida), * Southwest (Arizona, Southern Nevada), * Texas B) Business Unit Closings and Consolidations -- Upon completion of thorough evaluation, the company expects a number of under performing business units to be shut down. These units were determined to be performing below expectations and, in aggregate, have incurred losses both for the full year 2007 and the first quarter of 2008. The units identified to date for potential shutdown represent approximately $120 million of 2007 sales, $19 million of 2007 SG&A expense, $12 million of 2007 operating loss and have approximately 700 employees. In addition, another group of business units have been identified to date for potential consolidation into other operations. In 2007, these units had sales of approximately $435 million, SG&A expense of $36 million, operating income of $11 million, and they have approximately 1,300 employees. C) Consolidation of Administrative Functions -- SelectBuild's accounting, accounts payable, purchasing, payroll and information technology support will be absorbed into the existing corporate support operations. Centralization of these functions allows operations employees to focus on customer service without needing to dedicate time to administration. The company relates that this plan would create opportunities to better serve national homebuilders and large contractors with its full range of bundled products, services and pricing options. BMHC expects to realize improved operating margins through utilization of distribution and cross-selling synergies between BMC West and SelectBuild, well as from its consolidated administrative functions and unified purchasing power. "With the centralization of administrative functions, the regional realignment and the closure or consolidation of certain business units we expect to be better positioned to focus our unified vision on maximizing operating efficiencies and growth opportunities for our core businesses, Mr. Mellor added. "This plan places a priority on efficient use of capital and higher returns and should continue to position us for the recovery of the homebuilding industry," Mr. Mellor said. The dedication and creativity of our employees will be key to the success of this project and to the long-term benefits to our shareholders, customers and employees." About Building Materials Holding Corporation Based in San Francisco, California, Building Materials Holding Corporation (NYSE:BLG) -- http://www.bmhc.com-- provides residential construction services and building products to professional homebuilders and contractors in western and southern regions of the United States. It operates through two business segments: SelectBuild and BMC West. SelectBuild provides framing and other construction services to high-volume homebuilders in key markets. BMC West markets and sells building materials, manufactures building components and provides construction services to professional builders and contractors through a network of 41 distribution facilities and 60 manufacturing facilities. It provides construction services and building products in 16 single-family residential construction markets. In November 2006, SelectBuild acquired the remaining 49% interest in BBP companies. In March 2007, BMHC's subsidiary, SelectBuild Construction Inc., acquired the remaining 27% of Riggs Plumbing LLC. Lenders Reduces Amount and Maturity of Credit Facility As reported in the Troubled Company Reporter on March 5, 2008, Building Materials reached an agreement to amend its senior secured credit facility as: (1) the company's revolving line of credit was reduced to $200,000,000 -- from $500,000,000, the revolver matures on Nov. 10, 2011; and (2) the maturity of the company's term loan was shortened to Nov. 10, 2011 -- from Nov. 10, 2013. Wells Fargo Bank and J.P. Morgan Securities acted as Joint Lead Arrangers and Joint Book Managers and Wells Fargo Bank served as Administrative Agent for the transaction. * * * As reported by the TCR on March 18, 2008, Fitch Ratings downgraded and removed from Rating Watch Negative Building Materials Holding Corporation's issuer default rating to 'B' from 'B+'; and senior secured debt to 'B+/RR3' from 'BB-/RR3'. The rating outlook is negative. The TCR said on March 17 that Standard & Poor's Ratings Services lowered its corporate credit rating on BMHC to 'B-' from 'B'. S&P also lowered the senior secured bank loan rating to 'B-' from 'B+' and revised the recovery rating to '4' from '2' -- indicating that lenders can expect an average (30%-50%) recovery in the event of a payment default. S&P also assigned a 'B-' senior secured rating to the company's amended and restated revolving credit facility, with a recovery rating of '4'. Moody's Investors Service, the TCR said March 10, lowered the ratings of BMHC, including its corporate family rating, to B2 from B1, its probability-of-default rating to B3 from B2, and its first-lien bank credit facility rating to B2 (LGD3, 39%) from B1 (LGD3, 38%), concluding Moody's review which commenced Feb. 13. The ratings outlook is negative. BARBARA K ENT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Barbara K Enterprises, Inc. 440 West 24th Street No. 16EF New York, NY 10011 Bankruptcy Case No.: 08-11474 Type of Business: The Debtor sells power tools for women. It also licenses its "Barbara K" trademark. See http://www.barbarak.com/ Chapter 11 Petition Date: April 23, 2008 Court: Southern District of New York (Manhattan) Judge: Martin Glenn Debtor's Counsel: Scott K. Levine, Esq. Sherri D. Lydell, Esq. Teresa Sadutto-Carley, Esq. Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP 1065 Avenue of the Americas, 18th Floor New York, NY 10018 Tel: (212) 593-3000 Fax: (212) 593-0353 Total Assets: $60,500 (excluding intellectual property) Total Debts: $2,646,489 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Pryor Cashman $600,000 410 Park Avenue, 10th Floor New York, NY 10022 Hughes Hubbard & Reed, LLP $278,000 David Wiltenberg, Esq. One Battery Park Plaza New York, NY 10004 Wachovia $52,714 P.O. Box 96074 Charlotte, NC 28296 West 45 APF LLC $45,000 c/o Newark & Co. Real Estate 125 Park Avenue, 11th Floor New York, NY 10017 Westin Rinehart $33,749 c/o Morris Reid 2001 Pennsylvania Avenue NW, Suite 250 Washington, DC 20006 TMI Association/S. Miyamoto 23 $27,267 The New York Times $26,825 LDI Color Toolbox $21,806 Finkelstein & Newman LLP $21,020 Osler Hoskin & Harcourt $18,841 Law Firm of Barry Bordetsky $16,857 McCaffery Ratner Gottleib Lane $16,667 Kim Choi & Lim $16,315 Hamptons Magazine $15,000 Susan Blond, Inc. $15,000 American Express $14,807 Donaldson & Burkinshaw $12,744 Tilleke & Gibbins $12,691 Schweitzer Gomman Gross & Bond $8,857 Gowlings $8,694 CABLEVISION SYSTEMS: Gets 97% Stake in Newsday for $650 Million --------------------------------------------------------------- Cablevision Systems Corporation and Tribune Company disclosed a definitive agreement to form a new partnership through which Cablevision will acquire approximately 97% of Newsday Media Group. Newsday was valued at $632 million in the transaction, and Tribune Company will also receive $18 million at closing as prepaid rent under certain leases of property used in the business, bringing the total transaction value to $650 million. The partnership will add a complementary print and online media group with diverse, quality local content to Cablevision that generates substantial operating cash flow and that creates opportunities to grow Cablevision's advertising, subscription and content-based businesses. Newsday is one of the nation's daily newspapers, serving Long Island and New York City. In addition to the newspaper and Newsday.com, Newsday Media Group includes amNY, plus the Star Community Publishing Group of weekly shoppers and Island Publications' portfolio of lifestyle magazines. "Newsday is one of the great names in the history of American journalism and it is both an honor and privilege to return Newsday back to Long Island-based ownership after nearly 40 years," Cablevision chairman Charles F. Dolan said. "We admire Newsday's strong editorial voice and reputation for quality well as its leadership in print and online journalism. We are committed to maintaining Newsday's journalistic integrity and important position in the marketplace." "This agreement enables us to maximize the value of Newsday and still retain an interest in this valuable asset," Tribune chairman and CEO Sam Zell said. The newspaper has a unique circulation base and a tremendously strong local brand -- I expect them to grow and flourish as a result of this new partnership." "Both Cablevision and Newsday are in the content, customer relationship and advertising business and we see this as a wonderful fit," Cablevision president and CEO James L. Dolan continued. Mr. Dolan said adding Newsday Media Group's superb assets to Cablevision's portfolio presents a multitude of opportunities: -- to provide consumers with additional quality content on multiple platforms; -- expand advertising opportunities for both entities; and -- attract a larger audience than either company could on its own. "We strongly believe Newsday Media Group and Cablevision share the same consumer-focused values, and we look forward to building on our mutual history in the New York area with these wonderful assets under the same umbrella," Mr. Dolan said. For Cablevision, the Newsday partnership adds a complementary print and online media group with diverse, quality local content in the New York area. The combined company will gain significant opportunities in its advertising-based businesses and subscription-based businesses, while also adding to its content portfolio and enhancing its commitment to the local community. These opportunities include: * marketing Newsday more effectively with the ability to reach directly hundreds of thousands of Long Island households served by Cablevision -- the majority of whom do not subscribe to Newsday; * providing enhanced news gathering resources and expertise to better serve the New York metro area; * offering Cablevision's 2.3 million Optimum Online high-speed Internet subscribers new interactive and homepage opportunities; * promoting Cablevision's live sports and entertainment assets through Newsday's publications, particularly amNewYork, with its New York City circulation of more than 300,000; * offering advertisers a selection among various media outlets that enables each advertiser to most efficiently and effectively target its audience; * using Newsday's expertise in developing innovative solutions for advertisers with its newspapers, magazines and Web sites to ensure the best approach to promoting ad insertions on Cablevision's 70 most popular cable channels; and * increasing classified advertising reach through Newsday, Cablevision's Optimum Homes and Optimum Autos interactive television classified services, and Newsday's Star. Under the terms of the transaction, Cablevision will have approximately 97% and Tribune will have approximately 3% of the equity in a partnership that owns Newsday. To form the new partnership, Tribune will contribute the Newsday assets, and Cablevision will contribute newly issued parent company bonds with a fair market value of $650 million on the contribution date. Bank of America has provided a firm commitment to provide $650 million of senior debt financing, guaranteed by CSC Holdings, Inc., to the new partnership. Of that amount, Tribune will receive $612 million in cash, an equity stake in the partnership valued at $20 million and another $18 million in prepaid rent under leases for certain facilities used in the business. In addition, Cablevision will provide additional funds to pay certain transaction costs. Mr. Dolan indicated that the Newsday businesses will report to Cablevision chief operating officer Thomas Rutledge. Banc of America Securities LLC acted as lead financial advisor to Cablevision and Merrill Lynch & Co. also provided financial advisory services on the transaction. Both Hughes Hubbard & Reed LLP and Sullivan & Cromwell LLP acted as legal counsel to Cablevision. Citi acted as the financial advisor to Tribune, and McDermott Will & Emery Sidley Austin and Paul Hastings acted as legal counsel to Tribune. The completion of this transaction is subject to certain customary closing conditions, including regulatory approval. The Newsday Media Group Assets are: * Newsday -- provides award-winning news and information, reaching 1.5 million Long Island adults each week * amNY -- launched in 2003, has quickly become the largest free daily newspaper in NYC with an average weekday circulation of 335,000 * Newsday Interactive -- includes Newsday.com and other local information sites such as ExploreLI.com and Newsday.com/NZone, the popular high school sports destination. In March 2008, Newsday.com reached 3.2 million monthly unique visitors and delivered over 66 million page views * Star Community Publishing -- the Northeast's weekly shopper group with 181 editions and circulation of more than 2.6 million * Island Publications -- produces targeted lifestyle magazines including Distinction, Wellness, Parents & Children, LI Weddings and This Month on Long Island Cablevision Systems Corporation About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. About Cablevision Systems Cablevision Systems Corporation (NYSE: CVC) -- is a cable operator in the United States that operates cable programming networks, entertainment businesses and telecommunications companies. As of Dec. 31, 2006, the company served approximately 3.1 million basic video subscribers in and around the New York City metropolitan area. Through its wholly owned subsidiary, Rainbow Media Holdings LLC, Cablevision owns interests in and manages numerous national and regional programming networks, the Madison Square Garden sports and entertainment businesses, and cable television advertising sales companies. Through Cablevision Lightpath Inc., its wholly owned subsidiary, the company provides telephone services and Internet access to the business market. The company operates in three segments: Telecommunications Services, Rainbow and Madison Square Garden. As reported in the Troubled Company Reporter on March 11, 2008, Cablevision Systems Corporation balance sheet at Dec. 31, 2007, showed total assets of $9.1 billion and total debts of $14.2 billion, resulting in a $5.0 billion stockholders' deficit. * * * As reported in the Troubled Company Reporter on Feb. 11, 2008, Moody's Investors Service upgraded to Ba3, from B1, the corporate family ratings for Cablevision System Corporation and its wholly- owned indirect subsidiary Rainbow National Services LLC. The rating outlooks for both companies were also changed to stable from developing. CARRINGTON LABORATORIES: Auditing Firm Raises Substantial Doubt --------------------------------------------------------------- Weaver and Tidwell, LLP, in Dallas raised substantial doubt on Carrington Laboratories, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm said that the company has reported significant losses from operations and requires additional financing to fund future operations. For the year ended Dec. 31, 2007, the company posted a $9,769,000 net loss on $21,799,000 of total net revenues compared with a $7,607,000 net loss on $27,406,000 of total net revenues in 2006. At Dec. 31, 2007, the company's balance sheet showed $14,165,000 in total assets and $15,933,000 in total liabilities, resulting in a $1,768,000 shareholders' deficit. The company's balance sheet at Dec. 31, 2007, also showed strained liquidity with $7,436,000 in total current assets available to pay $11,041,000 in total current liabilities. The company's accumulated deficit at Dec. 31, 2007, increased to $63,158,000 from $53,389,000 at Dec. 31, 2006. Subsequent Events 1. DelSite In November 2007, Carrington's board of directors decided to shift its long-term strategic focus solely to the development and promotion of DelSite's technologies and utilization of the manufacturing facilities in Costa Rica, which support DelSite. DelSite is one of the company's business segments. Key components of this strategy going forward are to: -- develop and market the proprietary GelSite(R) polymer technology for delivery of vaccines and therapeutics; -- enter into strategic partnerships and collaboration arrangements related to the GelSite(R) technology; -- continue to develop the knowledge of polymers and their relationship to vaccines and bioactive protein and peptide therapeutics; -- enlarge and diversify the customer base for bulk raw materials and products produced in Costa Rica to increase the profitability of that facility. As a result of this shift in strategic focus, Carrington Laboratories' packaged product manufacturing operations in the United States, which have experienced operating losses in recent years and are not anticipated to provide sufficient revenues to support its development of DelSite's technology as the Company moves forward, no longer fit within the Company's strategy and it is in the process of selling the assets supporting its U.S. packaged product manufacturing operations. In January 2008, the company engaged the investment-banking firm of Milkie/Ferguson Investments, Inc. to represent it in the sale process. This proposed sale would likely include all of the Medical Services Division and products manufactured in the U.S. from the specialty manufacturing services portion of the Consumer Services Division. 2. Glamourpuss Lawsuit On Feb. 1, 2007, a lawsuit styled Glamourpuss, Inc. v. Carrington Laboratories, Inc., was filed in Dallas County, Texas. Plaintiff alleged that Carrington sold it defective product and sought damages in excess of $200,000 for its alleged loss of sales, in addition to attorney's fees and expenses. Carrington denies Glamourpuss' claims and believes its allegations are without merit. On Jan. 31, 2008, Carrington settled this suit and obtained a full release by payment to Glamourpuss in the amount of $60,000. 3. Los Mangos Farm On Feb. 29, 2007, Carrington's subsidiary, Finca Sabila S.A. entered into an agreement with Santa Luisa Catalana SLCAT, S.A., with respect to the potential sale of Finca Sabila's Los Mangos farm, an unused parcel of land separate from the company's main farm and operations located in Liberia, Guanacaste, Costa Rica, to SLCAT, S.A. Under the agreement, SLCAT, S.A., had the option to buy the Property for $1,641,346 to be paid: -- $50,000 on March 3, 2008; -- $450,000 on March 15, 2008; and -- the remaining purchase price of $1,141,346 on March 25, 2008 (approximately $480,000 of which will be used to repay the mortgage on the Property). On March 14, 2008, SLCAT exercised its option to purchase the land and paid the company $450,000. On March 24, 2008, the remaining $1,141,346 was transferred to Carrington and will be available for general corporate use upon completion of final legal processing of the transaction, which is expected on or before April 15, 2008. 4. Senior Secured Convertible Debentures Default As a result of the sale of Finca Sabila's Los Mangos farm, Carrington is in default under the documents governing its senior secured convertible debentures. As a result, the holders of the debentures are entitled, upon notice to Carrington, to accelerate all of the indebtedness underlying the debentures. On March 5, 2008, the debentures outstanding as a result of the $8 million debt financing transaction entered into on April 27, 2007, were amended by an amendment agreement, dated effective as of March 1, 2008, by and among Carrington and the purchasers. In the Amendment Agreement, the purchasers agreed to: -- defer the principal payments of $266,667 under the debentures due March 1, 2008, until April 1, 2008; and -- eliminate the requirement that Carrington comply with the financial covenants in the debentures during the period from Dec. 31, 2007, through April 30, 2008. 5. Banco Nacional Default On March 25, 2008, Carrington failed to make a required payment of $2,000,000 under its revolving credit facility with Banco Nacional. As a result, we were in default under the terms of this facility. The bank's practice is to extend a grace period to the end of the calendar month in which the payment was due to its customers who fail to make a timely payment. The bank granted such a grace period to us and required us to make the required payment on or before March 31, 2008. Carrington paid the required $2,000,000 to the bank on March 28, 2008, and thus cured the default. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b1e About Carrington Laboratories Based in Irving, Tex., Carrington Laboratories, Inc. (OTCBB: CARN) -- http://www.carringtonlabs.com/-- is a research-based biopharmaceutical, medical device, raw materials and nutraceutical company that develops, manufactures and sells naturally-derived complex carbohydrates and other natural product therapeutics for the treatment of major illnesses, the dressing and management of wounds, and nutritional supplements. CENTERPLATE INC: In Talks with Lenders to Amend Credit Facility --------------------------------------------------------------- The Board of Directors of Centerplate, Inc. initiated a process to evaluate a range of capital structure and other alternatives and has engaged UBS Investment Bank as the company's financial advisor to assist in this process. The company believes its current Income Deposit Security structure may limit its ability to invest to strengthen and grow its business. It expects the evaluation process to take up to six months. Separately, the company has been negotiating an amendment to its senior credit facility to modify, among other things, certain restrictive financial covenants and obtain increased flexibility on capital expenditures and acquisitions. Based on discussions to date, the company believes it will obtain a permanent amendment and expects to communicate the terms of that amendment in the next few weeks. Additionally, in order to provide enhanced financial flexibility, the Board is likely to determine that it is in the company's best interest to eliminate monthly dividend payments beginning in June 2008. Janet L. Steinmayer, President and Chief Executive Officer of Centerplate, said, "Our goal is to have a capital structure that enhances our ability to invest in compelling projects, drive innovation for customers and support the company's long-term growth objectives. "Centerplate is a strong franchise with an outstanding team and we just need to find the best way to finance our growth. We plan to work expeditiously with UBS and to communicate the outcome of that process within the next six months." Ms. Steinmayer continued, "Although we have experienced very strong new business flows so far in 2008, we believe that - given the current competitive and economic environment - it may be prudent to eliminate the dividend beginning in June and to focus appropriate economic resources on deepening our existing client relationships, pursuing new ones and strengthening our company through strategic acquisitions. We are also looking very closely at costs, in order to protect margins." First Quarter Financial Results The company also reported financial results for the first quarter ended April 1, 2008. Net sales of $133.2 million increased $7.9 million, or 6.3%, compared to net sales of $125.3 million for the first quarter of 2007. The net sales increase for the first quarter of 2008 was partly driven by new accounts, primarily the Prudential Center in Newark, New Jersey, home of the New Jersey Devils. The sales increase was also driven by the Super Bowl, which was held at the University of Phoenix Stadium in Glendale, Arizona and the BCS Championship Game and NBA All-Star Game in New Orleans. Partially offsetting these improvements was a decline in sales at the company's convention centers. Adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) declined in the first quarter to a loss of $2.0 million, compared to a gain of $2.4 million in the first quarter of 2007, due to softness in the convention center business, increased workers compensation costs, the timing of new sales expenses and higher legal fees associated with obtaining a short-term amendment to the company's senior credit facility. "Our first quarter's results were impacted by the challenging economic environment which contributed to fewer events in our convention center venues," commented Ms. Steinmayer. She added, "We are sharply focusing on managing our labor costs and working on improving adjusted EBITDA through improved efficiencies across the business while driving growth through new accounts, acquisitions and joint ventures." Centerplate reported a net loss of $11.2 million, or $0.53 per share, compared to a net loss of $8.0 million, or $0.36 per share, in the first quarter of 2007. The increased loss was due to the decline in operating income and increased interest expense. Delay of Form 10-Q Filing The company said that the process to evaluate a range of capital structure and other alternatives for the company, as well as the negotiations it undertook to amend its senior credit facility, have absorbed a significant portion of management's time and resources and depends in part on responses from the Company's senior lenders. As a result, the Company is unable to complete its Form 10-Q for the first fiscal quarter ended April 1, 2008 within the prescribed time period; however, the Company expects to file its Form 10-Q on or before May 19, 2008. Credit Facility On April 1, 2005, the Company entered into a credit agreement pursuant to which General Electric Capital Corporation agreed to provide up to $215 million of senior secured financing. The financing is comprised of a $107.5 million term loan and a $107.5 million revolving credit facility. The Credit Agreement bears interest at a floating rate equal to a margin over a defined prime rate of 1.25% for the term loan and 1.5% for the revolving credit facility or a percentage over the London Interbank Borrowing Rate of 3.25% for the term loan and 3.5% for the revolving credit facility. The applicable margins for the revolving credit facility are subject to adjustment from 1.0% to 1.75% for loans based on a defined prime rate and from 3.0% to 3.75% for LIBOR loans based on our total leverage ratio. The proceeds of the term loan were used to repay the prior $65 million term loan, outstanding revolving loans of $23.25 million, as well as interest, related fees and expenses, including a prepayment premium of approximately $4.6 million on the term loan facility. The revolving portion of the Credit Agreement has a $35 million letter of credit sub-limit and a $10 million swing line loan sub-limit. At January 1, 2008, approximately $22,746,000 of letters of credit were outstanding but undrawn and the Company had $29,500,000 in short-term revolving loans outstanding. The term loan matures in October 2010 and requires quarterly principal payments of $269,000. The availability of funding under the revolving credit facility depends on the satisfaction of various financial and other conditions, including restrictions in the indenture governing the subordinated notes. The revolving credit facility matures in April 2010 and is subject to an annual thirty-day pay down requirement, exclusive of letters of credit and certain specified levels of permitted acquisition and service contract-related revolving credit advances. Borrowings under the Credit Agreement are secured by substantially all of the Company's assets and rank senior to the subordinated notes. The Credit Agreement contains customary events of default. In March 2008, the Company obtained a waiver and amendment of certain provisions of the Credit Agreement temporarily affecting the calculation of the senior leverage ratio that must be achieved in order to pay dividends. The waiver and amendment was necessitated in part by an unexpected decline in cash flow from operations, driven primarily by a decrease in revenues generated at the Company's convention center contracts that the Company began to experience in January 2008, as well as a more stringent senior leverage ratio requirement for the payment of dividends under the Credit Agreement effective in January 2008. If the Company is unable to obtain this amendment, it will need to suspend dividend payments beginning in April 2008 until it can meet the ratio requirements for the payment of dividends under the Credit Agreement. The Company must also maintain cash in an amount equal to at least 5 months of interest on the subordinated notes, plus $2.5 million, that is restricted from use. Aggregate annual maturities of long-term debt at January 1, 2008 are: 2008 $1,075,000 2009 1,075,000 2010 102,663,000 2011 -- 2012 -- Thereafter 119,596,000 ---------------- Total $224,409,000 About Centerplate, Inc. Headquartered in Stanford, Connecticut, Centerplate, Inc. -- http://www.centerplate.com-- crafts and delivers extraordinary entertainment experiences in over 130 prominent sports, entertainment and convention center venues across North America. CENTURY INDEMNITY: Fitch Holds 'B-' IFS Rating with Neg. Outlook ---------------------------------------------------------------- Fitch Ratings expects to assign an 'A' rating to the $450 million senior note issuance planned by ACE INA Holdings Inc., a subsidiary of ACE Limited. The new notes will be fully and unconditionally guaranteed by ACE and are therefore based on ACE's 'A+' Issuer Default Rating. On Dec. 17, 2007, Fitch affirmed all of its ratings on ACE and ACE's subsidiaries following the announcement by ACE that it would acquire Combined Insurance Company of America and its subsidiaries from Aon Corp. ACE completed the purchase for $2.56 billion in April 2008. The Outlook is Stable. Fitch expects that the net proceeds from this new senior debt issuance will help redeem the company's existing $575 million of perpetual preferred shares in June 2008. Fitch believes that, following the completion of ACE's financing plans, ACE's pro forma March 31, 2008 total debt to capital ratio increase of roughly two points, to approximately 19%, is still well within an acceptable level for ACE's current rating category. Fitch notes that ACE reported year-end 2007 earnings of $2.6 billion and stockholders' equity of $16.7 billion, an equity increase of 17% since year-end 2006. Fitch also notes that ACE, unlike many of its peers, has not repurchased shares during the current soft market. Fitch has assigned these rating: ACE INA Holdings Inc. -- $450 million senior notes 'A'. Fitch rates ACE Limited companies as: ACE Limited -- IDR at 'A+'; -- $575 million preferred stock at 'A-'. ACE INA Holdings Inc. -- IDR at 'A+'; -- $100 million senior debentures due 2029 at 'A'; -- $500 million senior notes due 2014 at 'A'; -- $500 million senior notes due 2017 at 'A'; -- $300 million senior notes due 2036 at 'A'; -- $300 million senior notes due 2018 at 'A'. ACE Capital Trust II -- $300 Capital Securities due 2030 at 'A-'. ACE American Insurance Company ACE Bermuda Insurance Limited ACE Fire Underwriters Ins. Company ACE Indemnity Insurance Company ACE Insurance Company of the Midwest ACE Property and Casualty Insurance Company ACE Tempest Reinsurance Limited Atlantic Employers Insurance Company Bankers Standard Fire & Marine Company Bankers Standard Insurance Company Combined Insurance Company of America Combined Life Insurance Company of New York Illinois Union Insurance Company Indemnity Insurance Company of North America Insurance Company of North America Pacific Employers Insurance Company Westchester Fire Insurance Company Westchester Surplus Lines Insurance Company -- Insurer Financial Strength Ratings at 'AA-'. The Rating Outlook is Stable. These ACE Limited companies ratings have a Negative Outlook: Century Indemnity Company -- IFS at 'B-'. Century Reinsurance Company -- IFS at 'CCC+'. CENTURY REINSURANCE: Fitch Holds 'CCC+' IFS Rating; Outlook Neg. ---------------------------------------------------------------- Fitch Ratings expects to assign an 'A' rating to the $450 million senior note issuance planned by ACE INA Holdings Inc., a subsidiary of ACE Limited. The new notes will be fully and unconditionally guaranteed by ACE and are therefore based on ACE's 'A+' Issuer Default Rating. On Dec. 17, 2007, Fitch affirmed all of its ratings on ACE and ACE's subsidiaries following the announcement by ACE that it would acquire Combined Insurance Company of America and its subsidiaries from Aon Corp. ACE completed the purchase for $2.56 billion in April 2008. The Outlook is Stable. Fitch expects that the net proceeds from this new senior debt issuance will help redeem the company's existing $575 million of perpetual preferred shares in June 2008. Fitch believes that, following the completion of ACE's financing plans, ACE's pro forma March 31, 2008 total debt to capital ratio increase of roughly two points, to approximately 19%, is still well within an acceptable level for ACE's current rating category. Fitch notes that ACE reported year-end 2007 earnings of $2.6 billion and stockholders' equity of $16.7 billion, an equity increase of 17% since year-end 2006. Fitch also notes that ACE, unlike many of its peers, has not repurchased shares during the current soft market. Fitch has assigned these rating: ACE INA Holdings Inc. -- $450 million senior notes 'A'. Fitch rates ACE Limited companies as: ACE Limited -- IDR at 'A+'; -- $575 million preferred stock at 'A-'. ACE INA Holdings Inc. -- IDR at 'A+'; -- $100 million senior debentures due 2029 at 'A'; -- $500 million senior notes due 2014 at 'A'; -- $500 million senior notes due 2017 at 'A'; -- $300 million senior notes due 2036 at 'A'; -- $300 million senior notes due 2018 at 'A'. ACE Capital Trust II -- $300 Capital Securities due 2030 at 'A-'. ACE American Insurance Company ACE Bermuda Insurance Limited ACE Fire Underwriters Ins. Company ACE Indemnity Insurance Company ACE Insurance Company of the Midwest ACE Property and Casualty Insurance Company ACE Tempest Reinsurance Limited Atlantic Employers Insurance Company Bankers Standard Fire & Marine Company Bankers Standard Insurance Company Combined Insurance Company of America Combined Life Insurance Company of New York Illinois Union Insurance Company Indemnity Insurance Company of North America Insurance Company of North America Pacific Employers Insurance Company Westchester Fire Insurance Company Westchester Surplus Lines Insurance Company -- Insurer Financial Strength Ratings at 'AA-'. The Rating Outlook is Stable. These ACE Limited companies ratings have a Negative Outlook: Century Indemnity Company -- IFS at 'B-'. Century Reinsurance Company -- IFS at 'CCC+'. CHAMP CAR: Gallivan Auctioneers Set Asset Auction for June 3 ------------------------------------------------------------ After years of two competing open wheel champ car racing series in the U.S., only one Indy-type series remains standing: the Indy Racing League. The assets of Champ Car World Series, LLC, which filed bankruptcy earlier this year, will sell to the highest bidders at auction early next month. Gallivan Auctioneers, of Speedway, Indiana, have been approved by the U.S. Bankruptcy Court to liquidate all remaining assets of Champ Car. The sale will include pace cars, race car transporters, race cars, shop equipment, scoring and timing equipment, memorabilia, and much more. This auction promises to attract interest from race teams, racing organizations and enthusiasts across the U.S. and around the globe. It will be conducted on-site, plus feature a live online webcast of the sale, allowing bidders to bid online, in real time, from anywhere in the world. The auction will be held at the Champ Car headquarters, 5350 W. Lakeview Parkway, South Drive, Indianapolis, Indiana 46268 on Tuesday, June 3 at 10:00 a.m. EDT. Several Champ Car teams have already joined the Indy Racing League, promising to increase competition and bring more excitement to open wheel racing. Champ Car World Series, LLC was formerly known as CART & CART/PPG SERIES. WHAT: Auction of Champ Car World Series, LLC Assets WHEN: Tuesday, June 3, at 10:00 a.m. EDT WHERE: 5350 W. Lakeview Parkway, South Drive, Indianapolis, Indiana 46268 Gallivan is a provider of asset and collateral services to the banking and legal communities, serving the Midwest U.S. Gallivan appraises and sells personal property and real estate of all types, specializing in asset & collateral retention and recovery. For more information, visit http://www.njgallivan.com. Indianapolis-based Champ Car World Series LLC, fdba Open Wheel Racing Series LLC and Corkscrew Acquisition LLC, -- http://www.champcarworldseries.com/-- organizes and operates a racing circuit that features about 20 drivers competing in single- seat, open-wheeled race cars. The circuit includes more than a dozen race tracks and road courses in the US, Canada, Mexico, and Australia. It regulates the sport and promotes the races; it generates revenue from sponsorships and broadcasting rights. It filed for chapter 11 protection on March 5, 2008 (Bankr. S.D. Ind. Case No. 08-02172). Gary Lynn Hostetler, Esq., and Jeffrey A. Hokanson, Esq., at Hostetler & Kowalik PC represent the Debtor in its restructuring efforts. The Debtor had assets of between $10 million to $50 million and debts between $1 million to $10 million when it filed for bankruptcy. Its largest unsecured creditor, Cosworth Inc., is owed $1,825,000. CHARMING SHOPPES: Posts $83.4 Million Net Loss in Fiscal 2008 ------------------------------------------------------------- Charming Shoppes Inc. reported a net loss of $83.4 million on net sales of $3.0 billion for the 52 weeks ended ended Feb. 2, 2008, compared with net income of $108.9 million on net sales of $3.1 billion for the fifty-three weeks ended Feb. 3, 2007. The decrease in consolidated net sales for fiscal 2008 as compared to fiscal 2007 was driven primarily by an extra week of sales in fiscal 2007 as compared to fiscal 2008, as well as by decreases in comparable Retail Stores segment sales and net sales from the company's Direct-to-Consumer segment. Consolidated cost of goods sold, buying, and occupancy expenses increased to $2.2 billion in fiscal 2008 as compared to $2.1 billion in fiscal 2007. Consolidated cost of goods sold, buying, and occupancy expenses as a percentage of consolidated net sales increased to 73.1% in fiscal 2008 as compared to 69.8% in fiscal 2007 primarily as a result of reduced merchandise margins for both the company's Retail Stores and Direct-to-Consumer segments and negative leverage on occupancy expenses from the decrease in comparable store sales. Consolidated selling, general, and administrative expenses increased to $777.5 million in fiscal 2008 as compared to $753.1 million in fiscal 2007. Impairment of Goodwill and Trademarks During the fourth quarter of fiscal 2008 the company performed its annual goodwill impairment test and determined that the carrying value of its Crosstown Traders goodwill exceeded the implied fair values of those assets. Accordingly, the company recognized a non-cash impairment charge of $86.8 million related to the Crosstown Traders goodwill. Additionally, the company recognized $11.4 million of non-cash impairment charges related to its Crosstown Traders non-amortizable trademarks during the fiscal 2008 fourth quarter. Restructuring Charges In November 2007 the company announced its plan to relocate its CATHERINES operations located in Memphis, Tennessee to its corporate headquarters in Bensalem, Pa. in conjunction with the consolidation of a number of its operating functions and in February 2008 the company announced additional cost-saving and streamlining initiatives. During fiscal 2008 the company recognized one-time pre-tax charges of approximately $3.0 million of severance, retention, and relocation costs related to these programs and approximately $11.4 million of non-cash pre-tax charges for write-downs of assets related to under-performing stores the company expects to close and accelerated depreciation related to the closing of the Memphis facility. The company anticipates that the execution of the new organizational structure and cost-saving initiatives will result in approximately $28.0 million of annualized expense savings, primarily in the areas of non-store payroll, elimination of losses from under-performing stores, and occupancy costs. Income Tax Provision Income tax provision for fiscal 2008 was $3.6 million on a loss before income taxes and extraordinary item of $80.7 million, as compared to a tax provision of $57.2 million on income before income taxes of $166.1 million for fiscal 2007. The primary reason for the provision on a pre-tax loss for fiscal 2008 was the non-deductibility for income tax purposes of the impairment of goodwill. Extraordinary Item During the fourth quarter of fiscal 2008 the company recognized an extraordinary gain of $912,000, net of income taxes of $582,000, as the result of proceeds received from an eminent domain settlement related to a portion of the land at the company's White Marsh, Maryland distribution center. Balance Sheet At Feb. 2, 2008, the company's consolidated balance sheet showed $1.6 billion in total assets, $882.9 million in total liabilities, and $730.4 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the fiscal year ended Feb. 2, 2008, are available for free at http://researcharchives.com/t/s?2bcd About Charming Shoppes Headquartered in Bensalem, Pa., Charming Shoppes Inc. (Nasdaq: CHRS) -- http://www.charmingshoppes.com/-- is a multi- brand, multi-channel specialty apparel retailer specializing in women's plus-size apparel. At Feb. 2, 2008, Charming Shoppes, Inc. operated 2,409 retail stores in 48 states. Apparel, accessories, footwear and gift catalogs, including these titles, are operated by Charming Shoppes' Crosstown Traders: Old Pueblo Traders, Bedford Fair, Willow Ridge, Lew Magram, Brownstone Studio, Intimate Appeal, Monterey Bay Clothing Company, Coward Shoe and Figi's. * * * As reported in the Troubled Company Reporter on March 25, 2008, Standard & Poor's Ratings Services lowered the corporate credit rating on Charming Shoppes Inc. to 'B+' from 'BB-.' The outlook remains negative. CHARTER COMMS: Posts $8.4BB Deficit in Q1; Warns of Bankruptcy -------------------------------------------------------------- Charter Communications Inc. reported on Monday financial results for the first quarter ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $15.2 billion in total assets, $23.3 billion in total liabilities, $201.0 million in minority interest, and $5.0 million in redeemable preferred stock, resulting in a $8.4 billion total stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $786.0 million in total current assets available to pay $1.4 billion in total current liabilities. Net loss for the first quarter of 2008 was $358.0 million. For the first quarter of 2007, Charter reported a net loss of $381.0 million. The decrease in reported net loss was primarily related to higher adjusted EBITDA resulting from higher revenue generating units and increased average revenue per basic customer. First quarter revenues increased 9.8% to $1.6 billion and operating costs and expenses increased 9.7% to $1.4 billion compared to year-ago results. Adjusted EBITDA for the first quarter of 2008 grew 9.9% to $545.0 million versus the actual results in the year-ago period. Income from operations was $205.0 million in the first quarter of 2008, compared to $156.0 million in the first quarter of 2007. Net cash flows from operating activities for the first quarter of 2008 were $204.0 million, compared to $266.0 million for the first quarter of 2007. Expenditures for property, plant, and equipment for the first quarter of 2008 were $334.0 million, compared to first quarter 2007 expenditures of $298.0 million. The increase in capital expenditures primarily reflects year-over-year increases in scalable infrastructure related to network upgrades to support higher HSI (high speed Internet) speeds and other advanced services. Sees Insufficient Liquidity in 2010 The company has a significant amount of debt. As of March 31, 2008, Charter had $20.6 billion in long-term debt and $467.0 million of cash on hand. Availability under the company's revolving credit facility was approximately $1.4 billion at March 31, 2008, none of which was limited by covenant restrictions. Charter expects that cash on hand, cash flows from operating activities, and amounts available under its credit facilities will not be sufficient to fund projected cash needs in 2010 (primarily as a result of the CCH II, LLC $2.2 billion of senior notes maturing in September 2010) and thereafter. Possible Bankruptcy The company said that if, at any time, additional capital or borrowing capacity is required beyond amounts internally generated or available under the company's credit facilities, it would consider issuing equity, issuing convertible debt or some other securities, further reducing the company's expenses and capital expenditures, selling assets, or requesting waivers or amendments with respect to the company's credit facilities. If the above strategies were not successful, the company says it could be forced to restructure its obligations or seek protection under the bankruptcy laws. Full-text copies of the company's consolidated finanacial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2bd7 About Charter Communications Headquartered in St. Louis, Missouri, Charter Communications Inc. (Nasdaq: CHTR) -- http://www.charter.com/-- is a broadband communications company and the third-largest publicly traded cable operator in the United States. Charter provides a full range of advanced broadband services, including advanced Charter Digital Cable(R) video entertainment programming, Charter High-Speed(R) Internet access, and Charter Telephone(R). Charter Business(TM) similarly provides broadband communications solutions to business organizations, such as business-to-business Internet access, data networking, video and music entertainment services, and business telephone. Charter's advertising sales and production services are sold under the Charter Media(R) brand. * * * As reported in the Troubled Company Reporter on March 14, 2008, Moody's Investors Service affirmed these ratings for Charter Communications Inc.: (i) corporate family rating: Caa1; (ii) probability-of-default rating: Caa2; and (iii) senior unsecured notes: Ca (LGD5 -- 87%). CLEAR CHANNEL: Buyer & Banks Settle Financing Dispute, Report Says ------------------------------------------------------------------ CC Media Holdings, Inc., and a consortium of financial backers that have pledged to finance CC Media's proposed acquisition of Clear Channel Communications, Inc., have resolved their financing dispute yesterday, according to a report from the CNBC Website. The report, citing unnamed sources, recounts that pursuant to the revised terms of the deal, Clear Channel will be bought for $36 per share; however, shareholders will have to vote again before closing the deal, which is expected in another three months. The pact also provides for a new election for the stub- equity portion of the deal. Clear Channel confirmed in a press statement, that a court proceeding pending in San Antonio, Texas, initiated by it and CC Media against the banks was postponed to allow the parties to continue settlement discussions. As reported in the Troubled Company Reporter on May 9, 2008, Justice Helen Freedman of the New York Supreme Court allowed the litigation of the breach of contract claim of CC Media against the bank consortium to continue. Justice Freedman, however, rejected CC Media's claims of fraud and civil conspiracy against them. CC Media, a corporation formed by private-equity funds Thomas H. Lee Partners LP and Bain Capital LLC to buy Clear Channel, sued various banks to compel them to fulfill their promise to finance the Clear Channel acquisition. On May 5, 2008, the banks, namely Citigroup Inc., Morgan Stanley, Credit Suisse Group , Royal Bank of Scotland Group PLC, Deutsche Bank AG and Wachovia Corp., sought authority from a Texas Court to dismiss a lawsuit alleging their interference in the buyout deal's completion, Kevin Kingsbury of The Wall Street Journal relates. The banks have insisted that the lawsuit is immature since the deadline for the closure of the deal is on June 12, and the deal may still be completed. Shareholder Seeks Damages The New York Post reported that Pentwater Capital Management LP, a hedge fund owning more than $100 million worth of shares in Clear Channel, sought damages from the banks for interfering in the buyout transaction and for initiating rumors. In addition, shareholder Highfields Capital Management is also likely to seek the same claims, the Post predicted. About Clear Channel Based in San Antonio, Texas, Clear Channel Communications Inc. (NYSE:CCU) -- http://www.clearchannel.com/-- is a media and entertainment company specializing in "gone from home" entertainment and information services for local communities and premiere opportunities for advertisers. The company's businesses include radio, television and outdoor displays. Outside U.S., the company operates in 11 countries -- Norway, Denmark, the United Kingdom, Singapore, China, the Czech Republic, Switzerland, the Netherlands, Australia, Mexico and New Zealand. As of Dec. 31, 2007, it owned 717 core radio stations, 288 non-core radio stations which are being marketed for sale and a leading national radio network operating in the United States. * * * In March 2008, Standard & Poor's Ratings Services said its ratings on Clear Channel Communications Inc., including the 'B+' corporate credit rating, remain on CreditWatch with negative implications. Fitch Ratings stated that in line with previous guidance, Clear Channel Communications' 'BB-' Issuer Default Rating and Senior Unsecured Ratings would remain in place if the going-private transaction is not completed. Moody's stated that assuming the transaction is completed as currently contemplated, Clear Channel will likely be assigned a Corporate Family Rating of B2 and the rating on the existing senior notes is likely to be notched down to Caa1 based on their expected subordination to the new senior secured debt facilities and the new senior notes. COLLINS SIGNS: Awarded $13.8 Million in Nissan Lawsuit ------------------------------------------------------ Collins Signs won a lawsuit it filed against Nissan North America, WTVYNews4.com reported. The company, which is in Chapter 7 liquidation, was awarded $13.8 million, said WTVYNews4. Collins Signs filed for bankruptcy during 2002, after a business contract with Nissan fell through. "We entered into that contract with Nissan expecting to go through with it and we found out they never intended to do so," WTVYNews4 quoted Collins vice president David Hughs as saying. According to the counsel for the Chapter 7 trustee, Nissan terminated the agreement it had with Collins and didn't pay finished installations for $3.5 million. The counsel said that Collins will pay its creditors with judgment award, WTVYNews4 related. Collins Signs made signs for commercial companies in Alabama. COUDERT BROS: Unsecured Creditors to Get 39% Under Amended Plan --------------------------------------------------------------- Coudert Brothers LLP submitted to the U.S. Bankruptcy Court for the Southern District of New York an amended chapter 11 plan of liquidation and an amended disclosure statement describing that plan on May 9, 2008. Under the amended plan, secured creditors with claims of about $1 million will get 100% recovery. Holders of $1.5 million priority non-tax claims will get 100% recovery. Holders of malpractice claims will get 100% recovery. Holders of unsecured claims will get recovery of up to 39%, if total allowed claims equals $26 million. Holders of $102,000 non-profit claims, $3.3 million partner profit claims, and interest claims, won't be repaid. Participating Partner Contributions The cash realized from the contributions by participating partners, receivables collected, collection of special contingency fees, and causes of actions pursued by the plan administrator will be the principal source of repayment of creditor claims under the plan. The Debtor is soliciting contributions from partners in accordance with the findings and settlement proposal of Harrison J. Goldin, appointed examiner, contained in a partner contribution report. Confirmation of the plan is contingent upon, among other things, the Debtor's estate possessing cash on hand or in escrow of at least $5 million. The Debtor believes that partners are properly incentivized to participate in the plan in meaningful numbers since, among other things, effectiveness of releases and injunctive relief in favor of Participating Partners is contingent upon those same thresholds being achieved prior to confirmation. The Debtor proposed that Aug. 1, 2008, be the deadline for contribution by partners. After the contribution deadline, any partner that has not delivered his participating settlement agreement and participating settlement amount will no longer be permitted to participate in the plan. In the event that the requisite participation of partners is obtained, the plan provides the plan administrator with full authority to commence litigation against the partners for the full amount of their obligations or causes of action without limitations on account of the examiner's reports. Disclosure Statement Hearing The Court will consider approval of the Debtor's amended disclosure statement on June 3, 2008, at 10:00 a.m., and objections must be submitted by 4:00 p.m. on May 29, 2008. The Debtor proposes a plan confirmation hearing to be held on Aug. 15, 2008, at 10:00 a.m. A full-text copy of the Debtor's first amended disclosure statement can be obtained for free at http://www.kccllc.net/impDateDocs.asp?D=2315 A full-text copy of the Debtor's first amended plan can be obtained for free at http://www.kccllc.net/impDateDocs.asp?D=2316 About Coudert Brothers Coudert Brothers LLP was an international law firm specializing in complex cross border transactions and dispute resolution. The firm had operations in Australia and China. The Debtor filed for Chapter 11 protection on Sept. 22, 2006 (Bankr. S.D.N.Y. Case No. 06-12226). 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. The Debtor's exclusive period to file a plan expires on Sunday, May 20, 2007. COLEGIO CORAZON: Case Summary & Nine Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Colegio Corazon De Maria, Inc. P.O. Box 1776 Juncos, PR 00777 Bankruptcy Case No.: 08-02792 Type of Business: The Debtor is a Catholic school for students in pre-kinder to grade 12. The Debtor previously filed for chapter 11 protection on May 6, 2004 (Bankr. D. P.R. Case No. 04-04845) and on Oct. 15, 2004 (Bankr. D. P.R. Case No. 04-10644). See http://www3.planalfa.es/corazondemaria/ Chapter 11 Petition Date: May 1, 2008 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Carmen D. Conde Torres, Esq. C. Conde & Associates 254 San Jose Street, 5th Floor San Juan, PR 00901-1523 Tel: (787) 729-2900 Fax: (787) 729-2203 Total Assets: $3,429,178 Total Debts: $3,767,710 Debtor's Nine Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Internal Revenue Service $332,839 Mercantil Plaza Building 2 Ponce de Leon Avenue, Room 914 San Juan, PR 00918 Diosesis de Caguas $57,000 Superintendencia Escuelas Catolicas Apartado 8699 Caguas, PR 00725 Monge Robertin & Co., CPA, CSP $41,189 Acosta 97 Esquina Celso Barbosa Caguas, PR 00725 Lysette Morales Vidal $21,000 Dreyfous $17,530 Corporacion del Fondo del Seguro del Estado $17,074 Axesa Servicios de Informacion $3,099 Las Piedras Construction Corp. $986 Jose A. Dominguez Babora, et al. $1 DANKA BUSINESS: Waiting Period of U.S. Antitrust Review Terminated ------------------------------------------------------------------ In connection with the pending acquisition of Danka Business Systems PLC's wholly owned U.S. subsidiary, Danka Office Imaging Company, by Konica Minolta Business Solutions U.S.A., Inc., the waiting period for U.S. antitrust review under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, was terminated. As reported in the Troubled Company Reporter on April, 10, 2008, the company signed a definitive agreement with Konica, enabling Konica to acquire the company's wholly owned U.S. subsidiary, Danka Office at a transaction valued at $240 million. Danka Office is the company's remaining operating business. Last week, Danka Business disclosed in a regulatory filing that the company will undergo a voluntary liquidation under the laws of the United Kingdom. Danka Business Systems PLC (LON: DNK) -- http://www.danka.com/ -- offers document solutions, including office imaging equipment, software, support, and related services and supplies in the United States. It offers office imaging products, services, supplies and solutions, including digital and color copiers, digital and color multifunction peripherals printers, facsimile machines and software. It also provides a range of contract services, including professional and consulting services, maintenance, supplies, leasing arrangements, technical support and training, collectively referred to as Danka Document Services. The company's revenue is generated from two primary sources: new retail equipment, supplies and related sales, and service contracts. Danka sells Canon products, as well as Kodak, Toshiba and Hewlett-Packard. On Aug. 31, 2006, the company sold its subsidiary, Danka Australasia, PTY Limited, to Onesource Group Limited. In January 2007, the company disposed of its European businesses to Ricoh Europe B.V. The company's Dec. 31, 2007 balance sheet showed total assets of $233.5 million, total liabilities of $225.0 million, 6.5% senior convertible participating shares of $362.6 million, and total stockholders' deficit of $354.1 million. DEVCON INT'L: Receives Listing Non-compliance Warning from Nasdaq ----------------------------------------------------------------- Devcon International Corp. received a Nasdaq Staff Determination letter indicating that the company failed to comply with the stockholders' equity requirement for continued listing. Unless the company requests an appeal of Nasdaq's determination, trading of the company's common stock will be suspended at the opening of business on May 16, 2008. The letter indicated its non-compliance with the requirements of Marketplace Rule 4450(a)(3) for continued listing on the Nasdaq Global Market. The rule requires that Devcon maintain a minimum stockholders' equity of $10,000,000. The letter also indicated that Nasdaq will file a Form 25-NSE with the Securities and Exchange Commission, which will remove the company's common stock from listing and registration on The Nasdaq Stock Market. Due to the same concerns regarding stockholders' equity, the company has elected not to pursue listing on The Nasdaq Capital Market. The company is in the process of transferring the quotation of the company's common stock to the OTC Bulletin Board. Trading of Devcon's common stock on the OTCBB, which is maintained by the Financial Industry Regulatory Authority, is subject to a market maker's filing of a Form 211 with, and the clearance of such Form 211 by, FINRA. The company is working with a market maker that has filed a Form 211 with FINRA to seek clearance to quote the company's common stock on the OTCBB. In the event that FINRA has not cleared Devcon's common stock for quotation on the OTCBB prior to May 16, 2008, the date of its delisting from The Nasdaq Global Market, the company anticipates that its common stock will be quoted on the Pink Sheets, an electronic quotation service for securities traded over-the-counter, until such clearance is obtained. About Devcon International Corp. Headquartered in Bocaraton, Florida, Devcon International Corp. (NASDAQ:DEVC) -- http://devcon-security.com/-- is a regional provider of electronic security alarm monitoring services, including monitoring of burglary, fire, medical, environmental, video, and security access systems to residential (both single and multi-family homes), financial institutions, industrial and commercial businesses and complexes, warehouses, facilities of government departments and healthcare and educational facilities. Devcon also has wholesale customers, where the company monitors security systems on behalf of independent security companies. Devcon International Corp.'s selected balance sheet data at March 31, 2008, showed stockholder's deficit of $600,000 compared to stockholder's equity of $$5.2 million at Dec. 31, 2007. DEVCON INT'L: Incurs $600K Stockholder's Deficit in 2008 1st Qtr. ----------------------------------------------------------------- Devcon International Corp.'s selected balance sheet data at March 31, 2008, showed stockholder's deficit of $600,000 compared to stockholder's equity of $$5.2 million at Dec. 31, 2007. The company reported $4.7 million net loss from continuing operations for the first quarter ended March 31, 2008, compared to $6.1 million net loss from continuing operations for the quarter ended March 31, 2007. The $1.4 million improvement in net operating loss resulted from a reduction in SG&A expenses driven by continued consolidation of the company's acquired platforms. The company realized additional savings due to a reduction in depreciation and amortization and a benefit in other income driven by the changes in fair value of its derivative instrument. Headquartered in Bocaraton, Florida, Devcon International Corp. (NASDAQ:DEVC) -- http://devcon-security.com/-- is a regional provider of electronic security alarm monitoring services, including monitoring of burglary, fire, medical, environmental, video, and security access systems to residential (both single and multi-family homes), financial institutions, industrial and commercial businesses and complexes, warehouses, facilities of government departments and healthcare and educational facilities. Devcon also has wholesale customers, where the company monitors security systems on behalf of independent security companies. Devcon International Corp. disclosed that it was notified of its non-compliance with the requirements of Marketplace Rule 4450(a)(3) for continued listing on the Nasdaq Global Market. The rule requires that Devcon maintain a minimum stockholders' equity of $10,000,000. DR HORTON: S&P Lowers Corporate Credit Rating to BB from BB+ ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on D.R. Horton Inc. to 'BB' from 'BB+' and lowered its subordinated debt rating on Horton to 'B+' from 'BB-'. The outlook remains negative. The rating actions affect approximately $3.5 billion in rated securities. "The downgrades reflect our expectation that very weak housing market conditions will persist and continue to weigh on homebuyer demand and place downward pressure on pricing and earnings," said Standard & Poor's credit analyst George Skoufis. While Horton has appropriately reduced its total and speculative inventory levels, they remain high relative to its peers' and expose the company to additional pricing pressure and potential future impairments. Furthermore, Horton faces substantial debt maturities in early 2009. Mr. Skoufis noted, "The lower ratings also acknowledge the company's relatively moderate leverage and its success thus far in generating positive operating cash flow, along with a largely undrawn credit facility and very minimal exposure to joint ventures." Debt maturities in early 2009, however, could sap a significant amount of Horton's current liquidity if the company doesn't generate additional cash through the remainder of this year. Standard & Poor's expects Horton to face challenges through 2008 and into 2009 due to continued deterioration in its key markets, along with reduced availability of mortgages for the company's primary entry-level buyer base. S&P would lower the ratings further if liquidity becomes constrained or the company experiences a meaningful reversal of what have been, thus far, successful inventory liquidation outcomes. S&P would consider revising the outlook back to stable if management continues to maintain adequate liquidity after meeting its debt maturities, the company's profitability stabilizes, and its speculative inventory continues to decline. DURA AUTOMOTIVE: Voting Creditors Supports Chapter 11 Plan ---------------------------------------------------------- Kurtzman Carson Consultants LLC delivered to the U.S. Bankruptcy Court for the District of Delaware an affidavit regarding the solicitation and tabulation of votes to accept or reject the Revised Joint Plan of Reorganization filed by Dura Automotive Systems Inc. and its debtor-affiliates. KCC reported that it completed mailing solicitation materials to all parties entitled to vote on the Revised Plan and mailing certain notices to other creditors and parties-in-interest on April 11, 2008. Voting on the Plan ended May 7. Pursuant to the Disclosure Statement Order, holders of Class 2 Second Lien Facility Claims, Class 3 Senior Notes Claims, Class 5A U.S. Other General Unsecured Claims, and Class 5B Canadian General Unsecured Claims were entitled to vote to accept or reject the Plan. According to Allison M. Tearnen, a senior consultant at KCC, the Revised Plan has been overwhelmingly approved by all Classes of Creditors entitled to vote: _______________________________________________________________ | | | | | | Accepting | Rejecting | | Class |__________________________|________________________| | | No. of | Amount | No. of | Amount | | | Holders | Held | Holders | Held | |___________|_________|________________|_________|______________| | | | | | | | Class 2 | 23 | $132,787,000 | 0 | $0 | | Claim | | | | | | Holders | (100%) | (100%) | (0%) | (0%) | |___________|_________|________________|_________|______________| | | | | | | | Class 3 | 70 | $293,618,234 | 13 | $4,402,000 | | Claim | | | | | | Holders |(84.34%) | (98.52%) |(15.66%) | (1.48%) | |___________|_________|________________|_________|______________| | | | | | | | Class 5A | 600 | $5,325,705 | 41 | $902,804 | | Claim | | | | | | Holders |(93.60%) | (85.51%) | (6.40%) | (14.49%) | |___________|_________|________________|_________|______________| | | | | | | | Class 5B | 38 | $606,699 | 2 | $97,854 | | Claim | | | | | | Holders |(95.00%) | (86.11%) | (5.00%) | (13.89%) | |___________|_________|________________|_________|______________| An accounting of the tabulation of the Ballots is available for free at http://bankrupt.com/misc/dura_votingresultssummary.pdf Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006, (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsels for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsels. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total assets and $1,623,632,000 in total liabilities. On April 3, 2008, the Court approved the Debtors' revised Disclosure Statement explaining their revised Chapter 11 plan of reorganization. (Dura Automotive Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DURA AUTOMOTIVE: Court Confirms Chapter 11 Plan of Reorganization ----------------------------------------------------------------- The Hon. Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware has approved the Plan of Reorganization of DURA Automotive Systems, Inc. and its debtor-affiliates, clearing the way for the Debtors to promptly emerge from Chapter 11. Judge Carey ruled that the Debtors' Plan satisfied the requirements of the U.S. Bankruptcy Code and signed the order confirming their Plan. The Debtors also recently obtained commitments for financing required to fund its emergence from Chapter 11. "This is an exciting day for DURA and our stakeholders, as we have reached our goal of reorganizing as a stronger, more competitive company," Larry Denton, Chairman and Chief Executive Officer, said. "While there is still work to be completed in our revitalization strategy, we are already realizing favorable results from our operational restructuring initiatives and our financial results continue to exceed plan targets." "The global automotive industry continues to undergo a sweeping transformation, and DURA is now well positioned to participate in its growth," Mr. Denton continued. "We now have a much stronger balance sheet, enabling the Company to better compete as a global automotive supplier. Our financial restructuring complements the significant operational accomplishments achieved over the last two years to expand our presence in emerging regions while right- sizing our overall manufacturing capacity to ensure best-in-cost production, and continued high performance in product quality, delivery and innovation for our customers." Upon emergence, DIP claims, administrative expenses and certain priority claims will receive cash. Holders of second lien debt will receive new Convertible Preferred Stock on account of their claims. Senior Notes and Other General Unsecured Claims will receive 100% of New Common Stock. The Debtors' pre-bankruptcy subordinated notes, convertible preferred securities and existing equity will not receive recoveries under the Plan. Upon emergence, DURA expects to be a publicly reporting company under SEC rules. DURA was advised by AlixPartners, Kirkland & Ellis and Miller Buckfire in connection with its Chapter 11 reorganization. Rochester Hills, Mich.-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006, (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsels for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsels. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total assets and $1,623,632,000 in total liabilities. On April 3, 2008, the Court approved the Debtors' revised Disclosure Statement explaining their revised Chapter 11 plan of reorganization. (Dura Automotive Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). DUTCH HILL: Moody's Cut Ratings on Credit Quality Deterioration --------------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Dutch Hill Funding I. Class Description: $200,000,000 Class A-1A First Priority Senior Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: $50,400,000 Class A-1B Second Priority Senior Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $35,800,000 Class A-2L Third Priority Senior Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $3,000,000 Class A-2X Third Priority Senior Secured [Floating] Rate Notes Due December 12, 2045 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $44,000,000 Class B Fourth Priority Senior Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $23,200,000 Class C Mezzanine Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: $15,000,000 Class D-1L Mezzanine Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $5,000,000 Class D-1X Mezzanine Secured Fixed Rate Notes Due December 12, 2045 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $5,600,000 Class D-2 Mezzanine Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: Ca -- Current Rating: C Class Description: $2,000,000 Class E Mezzanine Secured Floating Rate Notes Due December 12, 2045 -- Prior Rating: Ca -- Current Rating: C Class Description: $12,500,000 Series 1 Combination Securities Due December 12, 2045 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ECOMARES INC: Shareholder Sues After Ch. 15 Case Dismissal ---------------------------------------------------------- Ecomares Inc. faces a class action filed by shareholder Colville Services Ltd. with a district court in Nevada following the dismissal of the Debtor's chapter 15 case, Terry Brennan of The Deal says. According to the report, the Hon. Gregg Zive of the U.S. Bankruptcy Court for the District of Nevada junked the Debtor's chapter 15 case last week. Colville, on behalf of holders of 30% Ecomares shares, sued the Debtor for purportedly disenfranchising its shareholders through canceling of stock and demanding $20,000 in damages under an April 9, 2007 legal filing. About Ecomares Inc. Ecomares Inc. - http://www.ecomares.de/-- is a holding company that was founded by a group of German scientists and developers and incorporated in Nevada in 2003. Its principal place of business is, however, Kiel, Germany. Its subsidiaries design, build and operate fish hatcheries located worldwide. On Dec. 1, 2007, an insolvency proceeding was commenced against the Debtor under the German insolvency act. In Nevada, the Debtor is a named party in two civil actions that are pending in separate courts, namely against U.K.-based Colville Services Ltd. and against Angelina Ovcharik. On behalf of Ecomares, Dieter Kloth filed a Chapter 15 petition on Jan. 18, 2008 (Bankr. D. Nev. Case No. 08-50074). Jeffrey L. Hartman, Esq., in Reno, Nevada represent Mr. Kloth. ELECTRONIC DATA: Inks $14 Billion Merger Deal with Hewlett-Packard ------------------------------------------------------------------ Electronic Data System Corp. signed a definitive agreement with Hewlett-Packard Company under which HP will purchase EDS at roughly $13.9 billion. The terms of the transaction have been unanimously approved by the board of directors of both companies. The transaction is expected to close in the second half of calendar year 2008. HP expects to more than double its services revenue, which amounted to $16.6 billion in fiscal 2007. The companies' collective services businesses, as of the end of each company's 2007 fiscal year, had annual revenues of more than $38 billion and 210,000 employees, doing business in more than 80 countries. HP intends to establish a new business group, to be branded EDS - an HP company, which will be headquartered at EDS's existing executive offices in Plano, Texas. HP plans that EDS will continue to be led after the deal closes by EDS chairman, president and chief executive officer Ronald A. Rittenmeyer, who will join HP's executive council and report to Mark Hurd, HP's chairman and chief executive officer. HP anticipates that the transaction will be accretive to fiscal 2009 non-GAAP earnings and accretive to 2010 GAAP earnings. Significant synergies are expected as a result of the combination. "The combination of HP and EDS will create a leading force in global IT services," Mr. Hurd said. "Together, we will be a stronger business partner, delivering customers the broadest, most competitive portfolio of products and services in the industry. This reinforces our commitment to help customers manage and transform their technology to achieve better results." "First and foremost, this is a great transaction for our stockholders, providing tremendous value in the form of a significant premium to our stock price," Mr. Rittenmeyer said. "It's also beneficial to our customers, as the combination of our two global companies and the collective skills of our employees will drive innovation and enhance value for them in a wide range of industries. In addition, our Agility Alliance will be significantly strengthened." HP said that acquiring EDS advances HP's stated objective of strengthening its services business. The specific service offerings delivered by the combined companies are: -- IT outsourcing, including data center services, workplace services, networking services and managed security; -- business process outsourcing, including health claims, financial processing, CRM and HR outsourcing; -- applications, including development, modernization and management; -- consulting and integration; and -- technology services. The combination will provide extensive experience in offering solutions to customers in the areas of government, healthcare, manufacturing, financial services, energy, transportation, communications, and consumer industries and retail. Under the terms of the merger agreement, EDS stockholders will receive $25.0 for each share of EDS common stock that they hold at the closing of the merger. The acquisition is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of EDS's stockholders. Leadership Style Some observers say that Mr. Rittenmeyer's determination to stay with the company under Mr. Hurd's leadership would be make a fascinating case study, The Wall Street Journal relates. According to WSJ, Mr. Rittenmeyer will have to deal with a potential culture clash between his gritty style at EDS and that of H-P. Mr. Rittenmeyer is an unusually aggressive manager known to fire underlings who don't toe the line while H-P's culture, is considered more of a consensus-building style, WSJ says. WSJ, citing Ben Trowbridge, a technology consultant, says that Mr. Rittenmeyer's leadership style of being high-control, results- oriented, very focused is exactly what is needed in a senior leader. WSJ cites Mr. Rittenmeyer as saying: "Mr. Hurd and I operate the same way. We don't waste a lot of time on stuff." About Hewlett-Packard Company Headquartered in Palo Alto, California, Hewlett-Packard Company (NYSE:HPQ) -- http://www.hp.com/-- is a provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses and large enterprises, including in the public and education sectors. About EDS Corp. Based in Plano, Texas, Electronic Data System Corp. (NYSE: EDS) -- http://www.eds.com/-- is a global technology services company delivering business solutions to its clients. EDS founded the information technology outsourcing industry more than 40 years ago. EDS delivers a broad portfolio of information technology and business process outsourcing services to clients in the manufacturing, financial services, healthcare, communications, energy, transportation, and consumer and retail industries and to governments around the world. * * * As reported in the Troubled Company Reporter on March 25, 2008, Moody's Investors Service raised the subordinated shelf registration rating to (P) Ba1 from (P) Ba2 and confirmed the preferred shelf registration rating at (P) Ba2. ENERGY TRANSFER: March 31 Balance Sheet Upside Down by $43.7 Mil. ----------------------------------------------------------------- Energy Transfer Equity, L.P. (NYSE:ETE) reported net income of $126.7 million and Distributable Cash of $99.3 million for the three months ended March 31, 2008. The Partnership's principal sources of cash flow are distributions it receives from its investments in the limited and general partner interests in Energy Transfer Partners, L.P. ETE currently has no other operating activities apart from those conducted by the operating subsidiaries within ETP. ETE's principal uses of cash are for expenses, debt service and distributions to its general and limited partners. ETE's net income decreased $20.7 million for the three months ended March 31, 2008 to $126.7 million as compared to $147.4 million for the three months ended February 28, 2007. The decrease is due primarily to the net unrealized losses on non-hedged interest rate derivatives of approximately $31.3 million held by ETE. The loss is attributable to the mark-to-market accounting of ETE's interest rate swaps and is principally a non-cash charge. As of March 31, 2008, Energy Transfer Equity LP and its subsidiaries reported total assets of $9.9 billion and total liabilities of $10 billion, resulting in total partners' deficit of $43.7 million. On March 31, 2007, total partners' deficit was $15.6 million. Energy Transfer Equity, L.P. (NYSE:ETE) owns the general partner of Energy Transfer Partners and approximately 62.5 million ETP limited partner units. Together ETP and ETE have a combined enterprise value approaching $20 billion. Energy Transfer Partners, L.P. (NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Colorado, Louisiana, New Mexico, and Utah, and owns the largest intrastate pipeline system in Texas. ETP's natural gas operations include intrastate natural gas gathering and transportation pipelines, natural gas treating and processing assets and three natural gas storage facilities located in Texas. These assets include approximately 14,000 miles of intrastate pipeline in service, with approximately 500 miles of intrastate pipeline under construction, and 2,400 miles of interstate pipeline. ETP is also one of the three largest retail marketers of propane in the United States, serving more than one million customers across the country. The Troubled Company Reporter on April 11, 2008, reported that Fitch Ratings affirmed the ratings for Energy Transfer Partners, L.P. and Energy Transfer Equity, L.P. The Rating Outlooks for ETP and ETE are Stable. Energy Transfer Partners, L.P. -- Issuer Default Rating at 'BBB-'; -- Senior unsecured debt at 'BBB-'. Energy Transfer Equity, L.P. -- IDR at 'BB-'; -- Senior secured term loan at 'BB'; -- Senior secured revolving credit facility at 'BB'. ETP's ratings and Stable Outlook reflect the increasing scale, scope, and diversity of its operations, strong quantitative credit measures, a conservative distribution policy, a favorable near- term regional natural gas supply position from expanding Barnett Shale and Bossier Sands development, and the expected benefits of ongoing contractually supported pipeline expansions. ETP's credit measures are consistent with its peer group of investment grade MLPs. However, a substantial capital spending program directed mostly toward pipeline expansion projects, estimated to approximate $1.8 billion for calendar 2008, will result in increased debt leverage until the new projects generate operating returns. FEDDERS CORP: Wants to Liquidate All Assets Under Trust Pact ------------------------------------------------------------ Fedders Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for authority to terminate the trust agreement dated Jan. 1, 1997, in connection with the Fedders supplemental retirement plan, as amended, and liquidate the investments held under the agreement. The Debtors also ask the Court to authorize Christiana Bank & Trust Company, the designated trustee under the trust agreement, to turn over all assets of the trust to the Debtors for the benefit of the estates. The trust was established by the Debtors to accumulate funds to assist the Debtors to meet their contractual obligations to pay participants of the retirement plan, without subjecting the participants to federal income taxes. As of Dec. 31, 2007, the trust has at least $5,242,000 in assets, which consists of $2,995,000 of money market funds and restricted funds, and unliquidated investments valued at $2,247,000. The Debtor will notify the debtor-in-possession lenders and prepetition term loan agent three-day prior notice before using the funds. The Debtors say that their interest in the retirement plan is subject to the DIP lenders' lien. HSBC Bank USA, National Association, was the previous trustee under the agreement. A hearing is set on June 18, 2008, at 2:00 p.m., to consider approval of the Debtors' request. Objections, if any, are due June 11, 2008, at 4:00 p.m. A full-text copy of the Trustee Agreement is available for free at http://ResearchArchives.com/t/s?2bd4 About Fedders Corporation Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. The company filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Case No. 07-11182). Its debtor-affiliates filed for separate Chapter 11 cases. Norman L. Pernick, Esq., Irving E. Walker, Esq., and Adam H. Isenberg, Esq., of Saul, Ewing, Remick & Saul LLP, represent the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The Official Committee of Unsecured Creditors is represented by Brown Rudnick Berlack Israels LLP. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. The Debtors have sought an extension of their exclusive plan filing period until May 31, 2008. FOCUS ENHANCEMENTS: Posts $6 Million Net Loss in 1st Quarter 2008 ----------------------------------------------------------------- Focus Enhancements, Inc. (NASDAQ:FCSE) disclosed its first quarter 2008 financial results. Revenue for the first quarter of 2008 was $3.9 million, compared to $7.1 million reported for the same quarter of 2007. The decrease is primarily attributable to lower Direct To Edit(TM) (DTE) disk recorder sales. Operating expenses were $6.8 million, compared with $7.3 million in the prior year period. Research and development (R&D) expenses were $3.6 million, compared to $3.9 million in 2007. Net loss for the first quarter was $6.0 million, or $0.07 per share, versus a net loss of $4.4 million, or $0.06 per share, in the same quarter of 2007. As of March 31, 2008, the company reported total current assets of $14.9 million and total current liabilities of $13.2 million. Total assets reached $29.7 million while total liabilities reached $30.4 million, resulting in a stockholders' deficit of $753,000. Brett Moyer, president and CEO of Focus Enhancements, stated "We are clearly disappointed with these first quarter results. Our DTE recorder sales were impacted by transitioning camcorder technology at the professional camcorder level. However, as the quarter ended, we believe our customer's inventory levels were back in line with current sales demand and initial second quarter orders indicate the sales situation is improving. With the successful launch of the new FS5 DTE recorder and new media asset management (MAM) products at 2008 NAB, we believe our System Business' sales will significantly increase in subsequent quarters this year when compared to the first quarter 2008. Our new System Business products concentrate on expanding file format and multi-platform support across our product families to establish a continuous workflow and seamless interoperability platform with popular non- linear editing systems and video camcorders. Most notably, this has led us to work together with SONY on developing a customized media server exclusively for the Sony XDCAM EX(TM) format, that supports Sony's powerful new PMW-EX1 camcorder. Additionally, in the Semiconductor Business, we believe 2008 demand for GPS and portable media player devices will drive year-over-year growth." "In February, we took measures to improve our financial position by aggressively reducing our costs. We also restructured our debt and raised $9.3 million in capital to fund UWB development and provide general working capital. At March 31, 2008, we had $7.7 million in cash and cash equivalents. We expect third and fourth quarter operating expenses to be approximately $6.2 million, down from the $6.7 million and $7.7 million reported in the third and fourth quarters of 2007, respectively." "The UWB market continues to develop. We expect performance to increase substantially as notebook manufactures begin to embed a native wireless host controller interface (WHCI) via a PCIe mini card option this fall. This would enable the desired file transfer speeds approaching 200Mbps versus the current industry performance averaging less than 40 Mbps in hub and dongles and validates our development plan to deliver a low cost single chip CMOS solution in the second quarter of 2009, at a projected volume price target of sub $7," concluded Moyer. The company hosted a shareholder conference call to discuss the first quarter 2008 results on May 12, 2008. The webcast will be available through August 12, 2008, at Focus Enhancements' web site: http://www.focusinfo.com/ A telephone replay will be available through May 14; dial 800-642-1687, and enter access code 46400426. About Focus Enhancements, Inc. Headquartered in Campbell, Calif., Focus Enhancements, Inc. (NASDAQ: FCSE) -- http://www.Focusinfo.com/-- designs world class-solutions in advanced, proprietary video and wireless video technologies. The company's Semiconductor Group develops wireless IC chip set based on WiMedia UWB standard and design as well as markets portable ICs to the video convergence, portable media, navigation systems and smartphone markets. The company's System Group develops video products for the digital media markets, with customers in the broadcast, video production, digital signage and digital asset management markets. The Troubled Company Reporter reported on April 8, 2008, that Burr, Pilger & Mayer LLP in San Jose raised substantial doubt about Focus Enhancements, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations, net capital deficiency and accumulated deficit. For the year ended Dec. 31, 2007, the company posted a $17,361,000 net loss on $29,971,000 of net revenues as compared with a $15,923,000 net loss on $37,478,000 of net revenues for the same period in 2006. At Dec. 31, 2007, the company's balance sheet showed $25,920,000 in total assets, $24,863,000 in total liabilities, and $1,057,000 in total stockholders' equity. The company's balance sheet at Dec. 31, 2007, showed strained liquidity with $11,336,000 in total current assets available to pay $13,370,000 in total current liabilities. FORD MOTOR: Urges Shareholders to Take No Action on Tracinda Offer ------------------------------------------------------------------ The Board of Directors of Ford Motor Company recommended that its stockholders take no action at this time in response to the announcement by Tracinda Corporation that it has commenced a tender offer to acquire up to 20 million shares of Ford's common stock at a price of $8.50 per share. As reported in the Troubled Company Reporter on April 29, 2008, Tracinda disclosed that it will make a cash tender offer for up to 20 million shares of common stock of Ford at a price of $8.50 per share. The offer price represents a 13.3% premium over Ford's closing stock price of $7.50 on April 25, 2008 and a 38.7% premium over Ford's closing stock price on April 2, 2008, the day upon which Tracinda began accumulating shares in the company. The shares to be purchased pursuant to the offer represent approximately 1% of the outstanding shares of Ford common stock. Tracinda Corporation, of which Kirk Kerkorian is the sole shareholder, currently owns 100 million shares of Ford common stock, which represents approximately 4.7% of the outstanding shares. Tracinda's average cost for such shares is approximately $6.91 per share. Upon completion of the offer, Tracinda would beneficially own 120 million shares of Ford common stock, or approximately 5.6% of the outstanding shares. The company's Board said it will review and consider Tracinda's offer and will advise stockholders of the Board's position regarding the offer by May 22, 2008, as required under applicable securities law. Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said that the ratings and outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated B/Stable/B-3) were not affected by Ford's announcement of an agreement to sell its Jaguar and Land Rover units to Tata Motors Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of pension contributions by Ford for Jaguar-Land Rover). As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. FRONTIER AIRLINES: Allowed to Hire Epiq Bankr. as Claims Agent -------------------------------------------------------------- Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York approved, on a final basis, an application by Frontier Airlines Holdings Inc. and its subsidiaries to retain Epiq Bankruptcy Solutions as their notice and claims agent, pursuant to Section 156 of the Bankruptcy Code, Rule 5075-1(a) of the Local Rules of the Bankruptcy Court for the Southern District of New York and the Claims Agent Protocol. As the Debtors' Notice Agent and Claims Agent, Epiq is expected to: (1) prepare and serve required notices in the Debtors' Chapter 11 cases: -- Notice of the commencement of the Chapter 11 cases and the initial meeting of creditors under Section 341(a) of the Bankruptcy Code; -- Notice of the claims bar date; -- Notice of objections to claims; -- Notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; and -- Other miscellaneous notices to any entities, as the Debtors or the Court may deem necessary or appropriate. (2) file with the Clerk's Office a certificate of service after the service of each particular notice, and an alphabetical list of persons on whom the notice was served and the date and manner of service. (3) maintain copies of all proofs of claim and proofs of interest filed. (4) maintain official claims registers with all necessary information relevant to the claim. (5) implement necessary security measures to ensure the completeness and integrity of the claims register. (6) maintain an up-to-date mailing list for all filers of proofs claim or interest, which list will be available upon request of a party-in-interest or the Clerk s Office. (7) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours. (8) record all transfers of claims and provide notice of the transfers pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure. (9) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders, and other requirements. (10) provide temporary employees to process claims, as necessary. (11) promptly comply with further conditions and requirements as the Court may at any time prescribe. Thirty days prior to the close of the Chapter 11 cases, an order dismissing Epiq will be submitted terminating its services. At the close of the Chapter 11 cases, Epiq will box and transport all original documents to the Federal Records Center, in proper format as specified by the Clerk's Office. In addition, the Debtors sought to employ Epiq to assist it with, among other things, certain data processing and ministerial administrative functions, including: (a) preparing its schedules, statement of financial affairs and master creditor list, and any amendments; (b) if necessary, reconciling and resolving claims; and (c) acting as solicitation and disbursing agent in connection with the Chapter 11 plan process. Epiq will be paid on a monthly basis for its (i) Case Management Services, (ii) Claims Management Services, (iii) Printing, Mailing and Noticing Services, (iv) Document Management/Imaging, (v) Confidential Document Management, and (vi) Voting Tabulation and Reports. For its Case Management Services, the firm's hourly rates are: Clerk $40 to $60 Case Manager $125 to $175 Programming Consultant $140 to $190 Case Manager(level2) $185 to $220 Sr. Case Manager $225 to $275 Sr. Consultant To be discussed The level of Senior Consultant activity will vary by engagement. The usual average rate for a Senior Consultant is $295 per hour. Any other additional professional services not specifically covered in the engagement will be charged at hourly rates including any outsourced data input services performed under the firm's supervision and control. Outside vendors will be paid a premium for weekend and overtime work. The Debtor also agreed to pay Epiq a $25,000 retainer to be applied against the firm's final invoice for their services provided. Ron Jacobs, president of Epiq's bankruptcy services division, assured the Court that Epiq is a "disinterested person" as that term is defined in Section 1107(b) and as modified by Section 1107(b) of the Bankruptcy Code. Epiq neither holds nor represents any interest adverse to the Debtors and their estates, Mr. Jacobs said. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297 thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) FRONTIER AIRLINES: Can Hire Faegre & Benson as Special Counsel -------------------------------------------------------------- Frontier Airlines Holdings Inc. and its subsidiaries obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Faegre & Benson LLP as special counsel, effective as of the Debtors' bankruptcy filing date, with respect to various corporate, securities, andlitigation matters and any claims or disputes of the Debtors made by or against First Data Corporation. Edward M. Christie, III, the Debtors' senior vice president for finance, said, Faegre & Benson is well-qualified to represent the Debtors in an efficient and effective manner as special counsel with respect to credit processor issues, corporate securities and litigation matters, and any claims or disputes of the Debtors made by or against First Data Corp. Mr. Christie said that the Debtors are separately seeking the Court's authorization to employ as their counsel in the Chapter 11 cases (i) Davis Polk & Waldwell as general restructuring counsel and (ii) Togut, Segal & Segal LLP as general conflicts counsel. According to Mr. Christie, DPW is unable to represent the Debtor in any litigation involving First Data Corp. due to conflict of interest. Faegre & Benson is expected to work closely with the Debtors, DPW, Togut, and each of the Debtors' other retained professionals to clearly delineate each professional's duties to prevent unnecessary duplication of work. Faegre & Benson will be paid based on its customary hourly rates and reimbursed for actual, reasonable and necessary out-of-pocket expenses. The firm's hourly rates are: Partners $375 to $695 Associates/Special Counsel $175 to $420 Paralegals and Clerks $140 to &285 The attorneys and paralegals who will primarily work on the Debtors' case, and their billing rates are: Professional Position Rate ------------ -------- ---- Douglas R. Wright Partner $550 Michael R. Stewart Partner $625 Dennis M. Ryan Partner $565 Jerome A. Miranowski Partner $565 Jeffrey Sherman Partner $500 Michael Krauss Partner $375 Heather Carson Perkins Partner $410 Jason Day Associate $385 Brandee L. Caswell Associate $380 Theresa H. Dykoschak Associate $265 Kristy M. Koeltzow Paralegal $255 Kristin L. Dunlop Paralegal $255 Debrah L. Wegler Paralegal $230 Within the one-year period prior to bankruptcy filing, Faegre & Benson received from the Debtors $440,000 for services rendered and related expenses. There are no outstanding amounts owed to the firm on account of services or expenses incurred prepetition. In addition, prior to the Petition Date, Faegre & Benson received $300,000 in retainer payments for services to be rendered and for expenses incurred in connection with the Debtors Chapter 11 cases. Mr. Ryan assured the Court that Faergre & Benson is not connected with the Debtors, their creditors, other parties-in-interest or the U.S. Trustee or any person employed by the Office of the U.S. Trustee, and does not hold any interest adverse to the Debtors or their estates with respect to the matters upon which it is to be engaged. About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297 thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) About Frontier Airlines Inc. Headquartered in Denver, Colorado, Frontier Airlines Inc. -- http://www.frontierairlines.com/-- provide air transportation for passengers and freight. They operate jet service carriers linking their Denver, Colorado hub to 46 cities coast-to-coast, 8 cities in Mexico, and 1 city in Canada, well as provide service from other non-hub cities, including service from 10 non-hub cities to Mexico. As of May 18, 2007 they operated 59 jets, including 49 Airbus A319s and 10 Airbus A318s. The Debtor and its debtor-affiliates filed for Chapter 11 protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.: 08-11297 thru 08-11299.) Hugh R. McCullough, Esq. at Davis Polk & Wardwell represent the Debtors in their restructuring efforts. Togul, Segal & Segal LLP is Debtors' Conflicts Counsel, Faegre & Benson LLP is the Debtors' Special Counsel, and Kekst and Company is the Debtors' Communications Advisors. At Dec. 31, 2007, Frontier Airlines Holdings Inc. and its subsidiaries' total assets was $1,126,748,000 and total debts was $933,176,000. (Frontier Airlines Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) GENERAL MOTORS: May Use $7BB Undrawn Loans Upon Industry Downturn ----------------------------------------------------------------- Although General Motors Corp. is confident of a liquidity cushion that would sustain global automotive operations in 2008, it intends to manage liquidity in a U.S. industry downturn by accessing roughly $7 billion of undrawn U.S. commited credit facilities, according to a Securities and Exchange Commission filing. If current adverse economic conditions persist or deteriorate further, GM would consider a wide range of possible actions to reduce its funding needs and to obtain additional liquidity. As reported in the Troubled Company Reporter on May 9, 2008, the work stoppage at supplier American Axle & Manufacturing Holdings Inc. has negatively impacted GM's liquidity by $2.1 billion for the three months ended March 31, 2008. Approximately 30 of GM's plants in North America have been fully or partially idled by the work stoppage. GM, however, said the work stoppage has not negatively impacted the company's ability to meet customer demand due to the high levels of inventory at its dealers. GM North America's results were negatively impacted by $800 million as a result of the loss of approximately 100,000 production units in the three months ended March 31, 2008. The automaker anticipates that this lost production will not be fully recovered after this work stoppage is resolved, due to the current economic environment in the United States and to the market shift away from the types of vehicles that have been most strongly affected by the action at American Axle. At March 31, 2008, GM's balance sheet showed total assets of $145,741,000,000 and total debts of $186,784,000,000, resulting in a stockholders' deficit of $41,043,000,000. Deficit, at Dec. 31, 2007, and March 31, 2007, was $37,094,000,000 and $4,558,000,000, respectively. For three months ended March 31, 2008, GM reported a net loss of $3,251,000,000 on $42,670,000,000 total net sales and revenue, compared to a net income of $62,000,000 on $43,387,000,000 total net sales and revenue for same period last year. According to the regulatory filing, the company has long-term plans to cut U.S. hourly people costs by $5 billion in 2010 or 2011. GM's mid-term outlook includes pricing for stronger brands, materil cost reductions, improved GMAC LLC performance, and further growth of emerging markets. Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. * * * As reported in the Troubled Company Reporter on April 28, 2008, Standard & Poor's Ratings Services said that its 'B' long-term and 'B-3' short-term corporate credit ratings on General Motors Corp. remain on CreditWatch with negative implications, where they were placed March 17, 2008. The CreditWatch update follows downgrades of 49%-owned subsidiaries GMAC LLC (B/Negative/C) and Residential Capital LLC (CCC+/Watch Neg/C). The rating actions on Residential Capital LLC and GMAC were triggered by the resignation of the only independent directors at Residential Capital LLC. GLOBAL BEVERAGE: Turner Stone Expresses Going Concern Doubt ----------------------------------------------------------- Turner, Stone & Company, LLP, raised substantial doubt on the ability of Global Beverage Solutions, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's limited revenues and incurred losses totaling $33,766,869 for the period from Aug. 26, 2002, (inception) through Dec. 31, 2007. The company posted a net loss of $1,553,934 on $0.00 income from operations for the year ended Dec. 31, 2007, as compared with a net loss of $1,200,178 on total income from operations of $124,698 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $2,904,201 in total assets and $6,076,990 in total liabilities, resulting in $3,172,789 stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b2d About Global Beverage Headquartered in Plantation, Fla., GlobaL Beverage Solutions Inc. (OTC BB: GBVS.OB) -- http://www.globalbeveragesolutions.com/-- is a business development company organized pursuant to applicable provisions of the Investment Company Act of 1940. The company primarily focuses on manufacturing, distribution and sales of unique beverages globally. GRAHAM PACKAGING: March 31 Balance Sheet Upside-Down by $771.5MM ---------------------------------------------------------------- Graham Packaging Holdings Company's consolidated balance sheet at March 31, 2008, showed $2.3 billion in total assets and $3.0 billion in total liabilities, resulting in a $771.5 million total partners' deficit. The company reported net income of $3.8 million for the first quarter ended March 31, 2008, compared with a net loss of $15.6 million in the corresponding period last year. Net sales for the three months ended March 31, 2008, increased $47.6 million, or 7.7%, to $669.4 million from $621.8 million for the three months ended March 31, 2007. The increase in sales was primarily due to an increase in resin costs which are passed through to customers and the positive impact of changes in exchange rates, offset by lower volume and price reductions in response to competitive pressure. Gross profit for the three months ended March 31, 2008, increased $12.9 million to $93.1 million from $80.2 million for the three months ended March 31, 2007. The increase in gross profit was primarily attributable to ongoing expense reduction initiatives, lower depreciation expense of $4.8 million, a weakening of the dollar against the euro and other currencies of $2.5 million and lower project startup costs of $600,000, partially offset by price reductions in response to competitive pressure. Selling, general and administrative expenses for the three months ended March 31, 2008, decreased $2.2 million to $33.0 mill ion from $35.2 million for the three months ended March 31, 2007. Interest expense decreased $5.1 million to $50.8 million for the three months ended March 31, 2008, from $55.9 million for the three months ended March 31, 2007. The decrease was primarily related to the write-off in 2007 of $4.5 million of deferred financing fees in connection with the March 30, 2007 amendment to the company's credit agreement. Income tax provision increased $3.2 million to $6.4 million for the three months ended March 31, 2008, from $3.2 million for the three months ended March 31, 2007. Liquidity and Capital Resources At March 31, 2008, the company's total indebtedness was $2.5 billion. At March 31, 2008, availability under the company's $250.0 million revolving credit, which expires on Oct. 7, 2010, was $239.1 million. As of March 31, 2008, the company was in compliance with the financial ratios and tests specified in the credit agreement with is lenders. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2bcc About Graham Packaging Based in York, Pa., Graham Packaging Holdings Company, the parent company of Graham Packaging Company L.P. -- http://www.grahampackaging.com/-- is engaged in the design, manufacture and sale of customized blow molded plastic containers for the branded food and beverage, household, automotive lubricants and personal care/specialty product categories. As of the end of March 2008, the company operated 83 manufacturing facilities throughout North America, Europe and South America. The Blackstone Group, an investment firm, is the majority owner of Graham Packaging Holdings Company. GRAN TIERRA: To Restate Financial Statements in 10-K Form Filing ---------------------------------------------------------------- Gran Tierra Energy Inc. will restate the company's financial statements for previously reported quarters ended March 31, 2007, June 30, 2007, and Sept. 30, 2007, and the years ended Dec. 31, 2007 and 2006. The company discovered a misclassification of accounts payable and accrued liabilities resulting in a misstatement of cash flows from operating activities, with a corresponding offset to cash flows from investing activities. The restatement will have no effect on the previously reported net change in cash and cash equivalents and no impact on previously reported consolidated balance sheets or consolidated statements of operations and accumulated deficit. The company will file an amendment to its annual report on Form 10-K for the year ended Dec. 31, 2007, to reflect the restatement. In the course of preparing its interim financial statements for its quarterly report on Form 10-Q to be filed with the Securities and Exchange Commission for the quarter ended March 31, 2008, the company discovered the misclassification in its 2007 interim financial statements for the previously reported quarters ended March 31, 2007, June 30, 2007, and Sept. 30, 2007, and annual financial statements for the years ended Dec. 31, 2007 and 2006. The company is in the process of completing its assessment of this matter. As a result, management and the audit committee have concluded that the company's previously-filed financial statements for the corresponding periods should not be relied upon. The company plans to file its Form 10-K/A containing its restated 2007 and 2006 financial statements, and reflecting the corrections to the financial statements for the interim periods in 2007, on May 12, 2008. About Gran Tierra Energy Headquartered in Calgary, Alberta, Canada, Gran Tierra Energy Inc. (OTC BB: GTRE.OB) -- http://www.grantierra.com/-- is an international oil and gas exploration and production company, incorporated and traded in the United States and operating in South America. The company holds interests in producing and prospective properties in Argentina, Colombia and Peru. At Dec. 31, 2007, the company's balance sheet showed total assets of US$112.79 million, total long term liabilities of US$36 million and total shareholders' equity of US$76.79 million. Successive Net Losses As reported in the Troubled Company Reporter on Jan. 4, 2008, the company disclosed in the regulatory filing that it "has a history of net losses." The company said it expects to incur substantial expenditures to further its capital investment programs and the company's existing cash balance and cash flow from operating activities may not be sufficient to satisfy its current obligations and meet its capital investment commitments. According to the company, its ability to continue as a going concern is dependent upon obtaining the necessary financing to acquire, explore and develop oil and natural gas interests and generate profitable operations from its oil and natural gas interests in the future. GREATER BIBLE WAY: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: The Greater Bible Way Miracle Temple International Fellowship, Inc. 3347 Hunters Pace Dr. Lithonia, GA 30038 Bankruptcy Case No.: 08-68542 Type of Business: The Debtor owns and leads a religious organization. Chapter 11 Petition Date: May 5, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Dorna Jenkins Taylor, Esq. Taylor & Associates, LLC 1401 Peachtree St., Ste. 500 Atlanta, GA 30309 Tel: (404) 870-3560 Fax: (404) 745-0136 Email: dorna.taylor@taylorattorneys.com http://www.taylorattorneys.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. HALCYON SECURITIZED: Moody's Lowers Ratings on Four Classes to Ca ----------------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Halcyon Securitized Products Investors ABS CDO II Ltd. Class Description: Up to $225,000,000 Class A-1(a) Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $75,000,000 Class A-1(b) Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $82,500,000 Class A-2 Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $36,000,000 Class B Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $27,500,000 Class C Senior Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $21,500,000 Class D-1 Senior Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca Class Description: $6,000,000 Class D-2 Senior Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca Class Description: $4,000,000 Class E Senior Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities. HANESBRANDS INC: S&P Lifts Corporate Credit Rating to BB- from B+ ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Winston-Salem, North Carolina-based intimate apparel and activewear maker Hanesbrands Inc. to 'BB-' from 'B+'. At the same time, S&P raised the bank loan and unsecured debt ratings, while leaving the existing recovery ratings on the company unchanged. Total debt outstanding at March 29, 2008, was $2.3 billion. The rating upgrade reflects the company's positive operating momentum as a stand-alone entity since its spin-off from Sara Lee Corp. in September 2006, and its modestly improving credit protection measures. "Management is on track in executing the company's strategies, is focusing on investing in key brands," said Standard & Poor's credit analyst Susan H. Ding, "and has benefited from its cost-saving initiatives." As a result, credit protection measures and operating results have improved and are in line with S&P's expectations. HIGH ARCTIC: Gets May 30 Extension to Meet Loan Covenants --------------------------------------------------------- High Arctic Energy Services Inc. signed a further amendment to its credit facilities, extending to May 30, 2008, the time by which the Corporation must reduce its debt to meet its financial covenant requirements under its senior credit facilities. On April 11, High Arctic obtained a May 11 extension of its deadline. Previous extensions were granted on February 8 and on March 11. In April, the Corporation appointed a Restructuring Committee with a mandate that includes negotiating with the lenders. The Committee has been engaged in constructive discussions with the Corporation's lenders for some time and, while further extensions are not certain, it believes that a longer extension may be forthcoming to allow the Corporation a reasonable time to reduce its debt. The terms and conditions or length of any extension are not known at this time but would likely require the Corporation to raise proceeds through the sale of assets or a new equity issue in a reasonable time frame. The amount and timing of any debt repayment are part of the negotiations. A number of assets have been identified that could be sold to both raise proceeds to repay debt and to rationalize the business operations with minimal impact on earnings going forward. High Arctic believes the May 30 extension will be adequate to finalize the terms of a longer extension. High Arctic -- (TSX: HWO) -- through its subsidiaries, provides specialized oilfield equipment and services, including drilling, completion and workover operations. Based in Red Deer, Alberta, High Arctic has domestic operations primarily in Alberta, British Columbia and the Northwest Territories in Canada. International operations are currently active in Mexico, the Middle East, Northern Africa and Asia. HILEX POLY: Files Joint Prepackaged Chapter 11 Plan --------------------------------------------------- Hilex Poly Co. LLC and Hilex Poly Holding Co. LLC delivered to the United States Bankruptcy Court for the District of Delaware a Chapter 11 Joint Prepackaged Plan of Reorganization dated May 2, 2008, and a Disclosure Statement explaining that plan. The Debtors have negotiated the terms of the plan with the first lien agent and certain of the first lien lenders, and the second lien agent and certain of the second lien lenders. The Debtors and the lenders have agreed to discuss the term sheet of consensual plan of reorganization -- including proposed distribution to be received by the creditors, funding of the restructuring under the plan, proposed post-reorganization capital structure and other key terms of the plan. In addition, the term sheet contemplates a new debtor-in- possession financing facility and an exit financing facility. $140,000,000 GECC DIP Financing A consortium of lenders headed by General Electric Capital Corporation agreed to provide up to $140 million in revolving loan and term loan under a debtor-in-possession credit agreement. The DIP facility is comprised of (i) a $90 million DIP revolving loan facility, and (ii) a $50 million DIP term loan facility, including a swingline subfacility of at least $15 million. The proceeds of the loan will be used to pay, among other things (i) the first lien revolving loan claim, (ii) postpetition operating expenses of the Debtors incurred in the ordinary course of business, (iii) transaction fees and expenses, and (iv) certain other costs of administration of the Chapter 11 cases. The contemplated exit facility will feature a revolving credit subfacility to be negotiated and a new term loan for $50 million. Overview of the Plan The Plan is based primarily upon a prepetition compromise with the first lien agents, the second lien agents, the holders of the revolving first lien loan claims, the holders of a majority of the first lien term B loan claims, and the holders of a majority of the second lien claims. The Plan provides that: a) all existing equity interests in Hilex Opco will be cancelled and 100% of the new membership interests in Hilex Opco will be issued to New Holdco; b) 85% of the New Common Stock of New Holdco will be distributed to the Holders of Second Lien Claims in exchange for the cancellation of their prepetition indebtedness; c) 15% of the New Common Stock of New Holdco will be distributed to Holders of First Lien Term B Loan Claims in exchange for the cancellation of their term loans; d) the Holders of First Lien Term B Loan Claims will also receive New Holdco Notes, which are due 2013, in an aggregate face amount of $115.1 million with, at the option of New Holdco, cash interest accruing at a rate of 12.75% per annum or payment in kind interest accruing at a rate of 13.5% per annum; e) the Holders of First Lien Revolving Loan Claims will be paid in full in Cash, subject and pursuant to the terms of the Final DIP Order; f) the claims of trade and other general unsecured creditors against Hilex Opco will remain unimpaired; and g) all existing claims against and equity interests in Hilex Holding will be extinguished and cancelled and Hilex Holding will be dissolved. Treatment of Claims And Interests Types of Estimated Estimated Class Claims Treatment Amount Recovery ----- -------- --------- --------- --------- N/A Administrative unimpaired $17,900,000 100% Claims N/A DIP Claims unimpaired $93,300,000 100% N/A Priority Tax unimpaired $400,000 100% Claims 1 Priority Non-Tax unimpaired $1,300,000 100% Claims 2 Other secured unimpaired $1,100,000 100% Claims 3 First Lien impaired $50,100,000 100% Revolving Loan Claims 4 First Lien Term impaired $115,100,000 100% B Claims 5 Second Lien impaired $105,900,000 106.5% Claims 6 Hilex Opco unimpaired $46,400,000 40% General Unsecured Claims 7 Hilex Holdings impaired $28,000,000 0% General Unsecured Claims 8 Intercompany unimpaired $500,000 100% Claims 9 Hilex Holding impaired N/A 0% Interests 10 Hilex Opco impaired N/A 0% Interests A full-text copy of the Joint Prepackaged Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?2ba8 A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2ba9 Headquartered in Hartsville, South Carolina, Hilex Poly Co. LLC -- http://www.hilexpoly.com/-- manufactures plastic bag and film products. The company has approximately 1,324 personnel and has 10 manufacturing facilities located in the United States. The company and its affiliates Hilex Poly Holding Co. LLC filed for Chapter 11 protection on May 6, 2008 (Bankr. D. Del. Lead Case No.08-10890). Hilex Poly is a majority-owned subsidairy of Hilex Poly Holding Co. LLC. Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor in Wilmington, Delaware, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors to date. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million. HILEX POLY: Disclosure Statement Hearing Set for June 12 -------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware will convene a hearing on June 12, 2008, at 10:00 a.m., to consider the adequacy of the Disclosure Statement explaining the proposed Chapter 11 Joint Prepackaged Plan of Reorganization of Hilex Poly Co. LLC and Hilex Poly Holding Co. LLC. Objections, if any, are due June 2, 2008, at 4:00 p.m. Headquartered in Hartsville, South Carolina, Hilex Poly Co. LLC -- http://www.hilexpoly.com/-- manufactures plastic bag and film products. The company has approximately 1,324 personnel and has 10 manufacturing facilities located in the United States. The company and its affiliates Hilex Poly Holding Co. LLC filed for Chapter 11 protection on May 6, 2008 (Bankr. D. Del. Lead Case No.08-10890). Hilex Poly is a majority-owned subsidairy of Hilex Poly Holding Co. LLC. Edmon L. Morton, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor in Wilmington, Delaware, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims agent. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors to date. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million and $500 million. HOME INTERIORS: Taps Hunton & Williams as Lead Counsel ------------------------------------------------------ Home Interiors & Gifts, Inc., and its debtor-affiliates selected Hunton & Williams LLP as their bankruptcy counsel. The Debtors are banking on the firm's extensive experience and knowledge of the areas of bankruptcy and general corporate law. As bankruptcy counsel, the Debtors need Hunton & Williams to advise them with respect to their powers and duties, assist them in negotiating with creditors and other interested parties in the cases, and take necessary actions to protect and preserve the Debtors' estates, including advising them on a potential sale of their assets. Andrew E. Jillson, Esq., Michael P. Massad, Jr., Esq., Lynnette R. Warman, Esq., Larry Chek, Esq., Steven T. Holmes, Esq., Cameron W. Kinvig, Esq., and Jesse Moore, Esq., at Hunton will primarily represent the Debtors. The Debtors propose to pay the firm at these hourly rates: Partners $470 -- $850 Counsel $400 Associates $220 -- $450 Paraprofessionals $90 -- $160 Mr. Jillson attests that his firm is a "disinterested person", within the meaning of Section 101(14) of the Bankruptcy Code and as required by Section 327(a). The Debtors ask the U.S. Bankruptcy Court for the Northern District of Texas to seek permission to employ Hunton & Williams as its bankruptcy counsel. The Debtors' lead counsel can be reached at: HUNTON & WILLIAMS LLP 1445 Ross Avenue, Suite 3700 Dallas, Texas 75202 Tel: (214) 979-3000 Fax: (214) 880-0011 About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has not appointed any creditors to serve on an Official Committee of Unsecured Creditors to date. When the Debtors file for protection against their creditors, they listed assets and debts between $100 million and $500 million. HOME INTERIORS: Wants to Hire Rochelle Hutcheson as Counsel ----------------------------------------------------------- Home Interiors & Gifts, Inc., and its debtor-subsidiaries received interim authority from the U.S. Bankruptcy Court for the Northern District of Texas to employ Rochelle Hutcheson & McCullough, LLP, as their special counsel. Rochelle Hutcheson will prosecute certain matters in which the Debtors' lead counsel, Hunton & Williams LLP, is precluded from representation because of potential conflicts of interest. Rochelle Hutcheson was retained by the Debtors as of the March 3, 2008. The Firm does not have or represent any interest adverse to the Debtors or their estates on the matters for which it is being retained as special counsel, Scott M. DeWolf, a member of the Firm, ascertains. The Firm will be paid its current standard hourly rates: Partners $350 -- $550 Counsel $450 Associates $220 -- $295 Paraprofessionals $140 Mr. DeWolf says his Firm received a $30,000 retainer from the Debtors. As of the bankruptcy filing date, the Firm has been paid $59,000 for services rendered prepetition. The Firm holds no prepetition claims against the Debtors' estates, Mr. DeWolf says. About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has not appointed any creditors to serve on an Official Committee of Unsecured Creditors to date. When the Debtors file for protection against their creditors, they listed assets and debts between $100 million and $500 million. HOME INTERIORS: Wants to Hire Boulder as Biz Consultant & CRO ------------------------------------------------------------- Home Interiors & Gifts, Inc., and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Boulder International LLC, as Business Consultant and Chief Restructuring Officer effective as of the Debtors' bankruptcy filing. Boulder professionals have advised on a wide variety of engagements including restructurings, turnarounds, acquisitions, the sale of assets and divisions and subsidiaries, plant closings, takeovers, start-ups and global expansions, including establishing manufacturing in China, India and other countries around the world. The Debtors initially retained Boulder as of February 19, 2008. Boulder assisted the Debtors as their business consultant in connection with identifying and executing, on various restructuring strategies, developing a business plan and guiding the Debtors through significant restructuring efforts. The Debtors note that Richard A. Lindenmuth, manager of Boulder, has developed a great deal of institutional knowledge regarding the Debtors' operations, assets, capital structure, and related matters and has worked closely with the Debtors' management team and their other advisors. The Debtors tell the Court that Boulder's employment at this point in the chapter 11 cases is necessary and appropriate to the timely preparation and confirmation of a plan of reorganization. Boulder may perform some or all of these services: -- Serve as Credit Restructuring Officer for Debtors; and -- Work with the Debtors' Board of Directors to preserve the value of Debtors' business. Boulder will be paid $50,000 per month and reimbursed of reasonable expenses. Upon execution of their employment agreement, the Debtors paid Boulder $25,000 for services rendered between the date the agreement was signed, and the end of May. Pursuant to the prepetition engagement, the Debtors paid Boulder an aggregate amount of $272,801 in fees and reimbursement of expenses. As of the Petition Date, Boulder has incurred and been paid for $175,000 in prepetition fees associated with assisting Debtors with their financial restructuring, attempting to sell Debtorsâ€™ assets, and helping Debtors prepare for their bankruptcy filings. Boulder also has incurred and been paid $97,801 in expenses associated with its prepetition representation of the Debtors and their restructuring efforts. Mr. Lindenmuth attests that Boulder and its professionals are disinterested persons, within the meaning of Section 101(14) of the Bankruptcy Code and as required by Section 327(a). Moreover, Mr. Lindenmuth says, Boulder does not hold or represent an interest adverse to the estate and does not have any connection with the Debtors, their creditors, or any other party-in-interest in the chapter 11 cases. Boulder International can be reached at: Boulder International LLC 10105 Old Warden Road Raleigh, North Carolina 27615 Attn: Richard Lindenmuth, Esq. Tel: (919) 870-1832 Fax: (919) 847-1783 About Home Interiors Headquartered in Carrollton, Texas, Home Interiors & Gifts, Inc. -- http://www.homeinteriors.com/-- manufactures, imports and distributes indoor and outdoor home decorative accessories. The company and six of its affiliates filed for Chapter 11 protection on April 29, 2008 (Bankr. N.D. Tex. Lead Case No.08-31961). Andrew E. Jillson, Esq., Cameron W. Kinvig, Esq., Lynnette R. Warman, Esq., and Michael P. Massad, Jr., Esq., at Hunton & Williams, LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 6 has not appointed any creditors to serve on an Official Committee of Unsecured Creditors to date. When the Debtors file for protection against their creditors, they listed assets and debts between $100 million and $500 million. IAC/INTERACTIVECORP: Ends Spin-off Squabble with Liberty Media -------------------------------------------------------------- IAC/InterActiveCorp will be able to complete the spinoffs of its business units now that it has resolved the legal dispute with Liberty Media Corporation, The Wall Street Journal reports. The dispute was related to IAC's proposed restructuring, which included the breakup of its businesses into new companies. In a press statement, Liberty Media stated that it has agreed to drop its appeal from the decision handed down by the Delaware Chancery Court on March 28, 2008. Liberty said it will not oppose the proposed single-tier spin-offs of HSN, Interval International, Ticketmaster and Lending Tree, which IAC advanced on May 13 by making its initial filings with the Securities and Exchange Commission. Additionally, the companies agreed on a number of arrangements regarding the governance of the spun off companies, including Liberty's right to board representation on each company and a standstill agreement that limits Liberty's ability to increase its ownership stakes and to take a variety of other actions with respect to the spun off companies. "Now it's really over and that's great for both of us," Barry Diller, IAC chairman and chief executive officer, stated. "I am pleased that we were able to amicably resolve our dispute with IAC. Liberty supports the proposed restructuring of IAC and looks forward to the ongoing success of each of the new entities and IAC," John Malone, Liberty chairman said. About Liberty Media Headquartered in Englewood, Colorado, Liberty Media Corporation (NasdaqGS: LINTA) -- http://www.libertymedia.com/-- owns interests in a broad range of electronic retailing, media, communications and entertainment businesses. Those interests are attributed to two tracking stock groups: the Liberty Interactive group, which includes Liberty's interests in QVC, Provide Commerce, IAC/InterActiveCorp, and Expedia, and the Liberty Capital group, which includes Liberty's interests in Starz Entertainment, News Corporation, and Time Warner. About IAC IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates a portfolio of specialized and global brands in the sectors: Retailing, which includes the United States and International segments; Services, which includes the Ticketing, Lending, Real Estate, Teleservices and Home Services reporting segments; Media & Advertising, and Membership & Subscriptions, which includes the Vacations, Personals and Discounts reporting segments. * * * As reported in the Troubled Company Reporter on Feb. 1, 2008, Standard & Poor's Rating Services said its ratings on IAC/InterActiveCorp, including the 'BB' corporate credit rating, remain on CreditWatch with negative implications, where they were initially placed on Nov. 5, 2007, following IAC's announcement that it plans to divide itself into five publicly traded companies. IDLEAIRE TECHNOLOGIES: Files Chapter 11 Protection in Delaware -------------------------------------------------------------- IdleAire Technologies Corp. filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the District of Delaware after it failed to raise new financing, Bloomberg News reports. The company listed total assets of $210,000,000 and total debts of $303,600,000, says Bloomberg citing papers filed with the court. Credit Agreement On April 24, 2008, the company entered into a credit agreement with certain lenders all of whom are holders of the company's 13% senior secured discount notes due 2012, and Wells Fargo Bank, N.A. as the administrative agent and collateral agent. Pursuant to the credit agreement, the company can borrow under a revolving credit facility of up to (i) $25 million, or (ii) approved disbursements less available cash at the time of each borrowing. All outstanding loans under the Credit Facility bear interest at 12% per annum, payable in kind monthly in arrears. The scheduled maturity date of all loans under the credit facility is May 2, 2008, according to documents filed with the Securities and Exchange Commission. Upon termination of the lenders' commitments under the credit facility, a commitment termination fee in an amount equal to (i) 10% of the aggregate principal amount of all outstanding loans under the Credit Facility at the time, and (ii) $1 million, will become payable. No commitment termination fee would be payable, however, in the event that the company were to commence a case under Chapter 11 of the Bankruptcy Code and either: i) the credit facility were to convert into a debtor-in- possession credit facility at the written consent of the lenders, or ii) the lenders holding at least 75% of the outstanding loans under the credit facility were to enter into a debtor-in- possession credit facility with the company. A full-text copy of the credit agreement dated April 24, 2008, is available for free at http://ResearchArchives.com/t/s?2bcf Security Agreement On April 24, 2008, the company also entered into a Security Agreement in favor of Wells Fargo Bank, N.A. in its capacity as the collateral agent for the lenders. Under the security agreement, all amounts owed under the credit facility are secured by perfected security interest in, and lien on, substantially all of the personal property assets of the Company. The liens securing the 13% Senior Secured Discount Notes due 2012 are junior to the liens granted in favor of the Lenders under the credit facility. As of April 30, 2008, the company has borrowed approximately $3.7 million under the credit facility, and the proceeds are being used for general corporate purposes of the company to pay disbursements approved by the lenders. To satisfy one of the closing conditions of the credit Facility, the company has retained CRG Partners Group LLC, a turn-around management and restructuring consulting firm. A full-text copy of the security agreement dated April 24, 2008, is available for free at http://ResearchArchives.com/t/s?2bd0 Going Concern Doubt Public accounting firm Ernst & Young reported that the company has a history of net losses, an accumulated deficit of $246,400,000 and working capital of $900,000 as of Dec. 31, 2007, which raise substantial doubt about the company's ability to continue as a going concern, according the company's regulatory filing with the Securities and Exchange Commission. The company's balance sheets showed total assets of $210,879,000 and total debts of $303,616,000 resulting in a $92,737,000 total stockholders' deficit during the fiscal year ended Dec. 31, 2007. The company posted a $93,442,000 net loss for the year ended Dec. 31, 2008, compared to a $60,285,000 net loss a year earlier. About IdleAire Technologies Headquartered in Knoxville, Tennessee, IdleAire Technologies Corp. -- http://www.idleaire.com/-- provides idle-reduction services to the trucking industry. The company also offers other safety and training course to drivers. IDLEAIRE TECHNOLOGIES: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: IdleAire Technologies Corp. 410 N. Cedar Bluff Road, Ste. 200 Knoxville, TN 37923 Bankruptcy Case No.: 08-10960 Type of Business: The Debtor manufactures and services an advanced travel center electrification system providing heating, ventilation & air conditioning, internet and other services to truck drivers parked at rest stops. See http://www.idleaire.com Chapter 11 Petition Date: May 12, 2008 Court: District of Delaware (Delaware) Judge: Kevin Gross Debtor's Counsel: Elihu Ezekiel Allinson, III, Esq. Email: ZAllinson@SHA-LLC.com William A. Hazeltine, Esq. Email: admin@whazeltinelaw.com William David Sullivan, Esq. Email: bill@williamdsullivanllc.com Sullivan Hazeltine Allinson, LLC 4 E. 8th St., Ste. 400 Wilmington, DE 19801 Tel: (302) 428-8191 Fax: (302) 428-8195 Debtor's Financial Condition as of December 31, 2007: Total Assets: $210,879,000 Total Debts: $303,616,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Bank NA as debt unknown Admin. Agent MAC-N9303-120 (IdleAire) 6th St. & Marquette Ave. Minneapolis, MN 55479 Fax: (612) 667-9825 PB Constructors, Inc. litigation $23,000,000 Attn: Parsons Brinkerhoff, Inc. One Penn Plaza New York, NY 10119 Fax: (212) 465-5096 Nancy Younger; Estate of litigation $18,000,000 William Younger Attn: Don A. Russo, Esq. 7990 Red Road Miami, FL 33143 Fax: (305) 665-7146 KPMG Corporate Finance, LLC services $400,000 345 Park Ave. New York, NY 10154 Fax: (212) 409-8340 Getzler Henrichg & Associates, trade debt $317,640 LLC Attn: Karen Dundas 295 Madison Ave. 20th Flr. New York, NY 10017 Fax: (212) 697-4812 BlueCross BlueShield of Tenn. trade debt $294,466 Receipts Dept. P.O. Box 180172 Chattanooga, TN 37401-7172 Fax: (423) 755-3178 Advantage IQ, Inc. trade debt $214,876 Verizon Business trade debt $146,465 Space Connections trade debt $131,395 Bowne trade debt $109,385 LodgeNet Entertainment Corp. trade debt $103,782 Communications Development trade debt $100,737 AT&T trade debt $59,872 Besco trade debt $53,038 Dimension Graphics trade debt $51,239 Grace Commercial Properties rent $46,412 United Rentals Northwest, Inc. trade debt $45,105 E.S. Contractor Services, LLC trade debt $37,086 United Parcel Service trade debt $36,596 Sparks Technology, Inc. trade debt $32,465 IMAX CORPORATION: March 31 Balance Sheet Upside-Down by $95MM ------------------------------------------------------------- IMAX Corporation's balance sheet at March 31, 2008, showed total assets of $203.7 million and total liabilities of $298.9 million, resulting in a total shareholders' deficit of $95.2 million. IMAX recorded a net loss of $10.2 million compared to a net loss of $4.7 million for the same period in the previous year. At the end of the first quarter, the company's cash position was $18.1 million, which represents an increase from the cash position at the end of the fourth quarter of fiscal 2007. Headquartered in Ontario, Canada, IMAX Corporation (Nasdaq: IMAX)(TSX: IMX) -- http://www.imax.com/-- is a digital entertainment and technology company. As of Dec. 31, 2007, there were 299 IMAX theatres operating in 39 countries. The company's groundbreaking IMAX DMR digital remastering technology allows it to digitally transform virtually any conventional motion picture into the unparalleled image and sound quality. INDYMAC BANCORP: Posts First Quarter Loss of $184.2 Million ----------------------------------------------------------- IndyMac Bancorp, Inc. (NYSE:IMB), the holding company for IndyMac Bank, F.S.B., reported a net loss of $184.2 million, or ($2.27) per share, for the first quarter of 2008, compared with net earnings of $52.4 million, or $0.70 per share, in the first quarter of 2007. The net loss and the loss per share for the first quarter of 2008 both represented improvements of 64 percent from the net loss and loss per share reported for the fourth quarter of 2007. Indymac has filed a Form 10-Q with the Securities and Exchange Commission, which is available on Indymac's Web site at http://www.imb.com/ "While many others in the mortgage finance industry saw worsening losses during the first quarter given the current state of the housing and credit markets, we achieved a 64 percent reduction in our net loss from last quarter as we took the appropriate steps in the second half of last year to get the bulk of our credit costs behind us," stated Michael W. Perry, Indymac's Chairman and CEO. "Last quarter, we took major write-downs and established significant credit reserves in the fourth quarter of 2007, absorbing $863 million in total pre-tax credit provisions/costs during that quarter and building our total credit reserves for future losses by 71 percent during the quarter to $2.4 billion at December 31, 2007, a four-fold increase from $619 million at December 31, 2006. With those reserves in place, we were able to reduce our total credit provisions/costs to $249 million in the first quarter of 2008, a 71 percent reduction from last quarter, allowing us to reduce our overall net loss this quarter. It is important to also understand that 24 percent of our first quarter loss is from staff reduction severance and office closing costs, and another 22 percent is from business activities that we have permanently closed and where losses are expected to diminish over time, such as homebuilder construction lending, home equity lending and our conduit channel. "We also continued to build our total credit reserves to $2.7 billion, a 13 percent increase over last quarter and more than a three-fold increase over $813 million in Q1-07. Actual realized credit losses during the first quarter totaled $334 million, such that the Company's total reserves at March 31, 2008 equate to 8.0 times current quarterly realized credit losses. Excluding non- investment grade and residual securities, total Q1-08 realized credit losses were $178 million, and the total related credit reserve at March 31 was $1.3 billion, or 7.2 times the realized credit losses in the first quarter. "As I have been saying for the past year," continued Mr. Perry, "safety and soundness remains our highest priority during these challenging times, and we finished the first quarter again in a solid overall financial position. Our capital levels continue to exceed the levels defined as 'well capitalized' by our regulators. To supplement the $676 million of equity capital we prudently raised in 2007, we recommenced raising equity capital through our Direct Stock Purchase Plan (DSPP) on February 26, 2008 and raised $39 million in new equity through March 31, 2008. We are continuing to raise capital nearly every business day through the DSPP and have raised $97 million through this program year to date through May 9. At March 31, 2008, Indymac Bank's Tier 1 'core' capital ratio was 5.74 percent, our Tier 1 risk-based ratio was 9.00 percent, and our total risk-based capital ratio was 10.26 percent, above the 'well-capitalized' regulatory levels of 5.00 percent, 6.00 percent and 10.00 percent, respectively. "With respect to profitability, we do not expect that Indymac will be able to return to overall profitability until the current decline in home prices decelerates. As it is uncertain that this will happen in 2008, we are not currently forecasting a return to profitability this year. With that said, we are forecasting continued improvement in our performance and declining quarterly losses for the remainder of 2008, with a $20 million loss projected for the fourth quarter, which would be a 96 percent reduction from Q4-07 and an 89 percent reduction from Q1-08. With respect to our key business segments, we are forecasting that our mortgage banking business (including mortgage production and servicing) will be profitable in the second quarter and thereafter. We are forecasting that our thrift segment (including our MBS, SFR whole loan and consumer construction portfolios) will become profitable in the third quarter and that our overall business, excluding discontinued activities, will be close to breakeven by the third quarter and have a small profit for the second half of 2008. The net loss from discontinued business activities is projected to decline from $40 million in Q1-08 to roughly $23 million in Q4-08. "Given our forecast for continued losses in 2008, we need to take all prudent measures to preserve our capital, improve our capital ratios and keep Indymac safe and sound. Therefore, we have made the decision to exercise our contractual rights and defer the interest on our trust preferred securities at the holding company and suspend the dividends on our non-cumulative, perpetual preferred stock at Indymac Bank, as this represents the most efficient and least dilutive means of generating capital in the current environment. The contractual provisions in these preferred securities that allow us to take these actions were clearly put in place for extraordinary times and events such as we are now experiencing, and the presence of these provisions is one reason why these preferred securities are considered 'core' capital for regulatory purposes. Taking these actions will improve our cash flow by $7.4 million per quarter at the holding company, enabling us to contribute more capital to the bank, and preserve capital of $10.6 million per quarter (which also flows directly to earnings) directly at the bank. We view the deferral/suspension of the interest/dividends on the preferred stock issues as temporary, and, once the market stabilizes and Indymac returns to solid profitability, we anticipate resuming the interest/dividend payments and paying the accumulated deferred interest on the holding company trust preferred. "We continued to maintain solid total operating liquidity in excess of $4 billion at the end of the first quarter, roughly the same as one year ago, but our liquidity needs are significantly lower now than last year, as last year we had roughly three times the mortgage production as we currently have and our current GSE/FHA/VA-dominated production is far more liquid, and we have no capital markets funding sources today (no commercial paper or reverse repurchase borrowings), while we had roughly $3 billion of such funding one year ago. Our solid liquidity is enabled by the fact that virtually all of Indymac's business is conducted and assets are held within Indymac Bank. As a result, we are 100 percent funded with deposits (over 95 percent of our deposits are fully insured by the FDIC), FHLB advances, long-term debt and equity. "While the housing and mortgage markets remain very challenging," continued Mr. Perry, "we continue to successfully convert our mortgage production to a GSE/FHA/VA model. We produced $9.6 billion in new mortgage loans in Q1-08 with 88 percent of this production being saleable to the GSEs or into Ginnie Mae securities. Importantly, the credit quality of our new production is the best we have ever generated. As calculated using Standard & Poor's (S&P) LEVELS model, the lifetime loss estimate for Q1-08's evaluated production of $8.2 billion is 0.23 percent (and is 0.17 percent and 0.18 percent for March and April, respectively), compared with 1.86 percent in Q1-07, an 88 percent year-over-year reduction.2 In addition, first payment defaults (FPDs) on our new production continue to improve. FPDs based on the first payment due date declined to 0.6 percent in April from 1.1 percent in March, 1.8 percent in February, 2.1 percent in January, 2.2 percent in December and 3.2 percent in Q3-07 (when we started tracking them). Generally 25 percent to 35 percent of FPDs cure in the subsequent month and 60 percent to 70 percent cure within six months. Although mortgage production volumes and profit margins continue to be a struggle in the current environment, we are improving the profit performance of our new production model. Mortgage production had a net loss of $17 million in the first quarter of 2008, which was a 66 percent improvement from the prior quarter. All of our 9 regional wholesale centers and 104 of our 152 retail lending branches were profitable in March, and we project that mortgage production will be close to breakeven in the second quarter and will be profitable in the second half of 2008. "We do not at this time forecast a return to overall profitability in 2008 given current market conditions, but we do forecast significantly declining losses each quarter for the balance of the year, as our restructuring charges abate, credit provisions/costs and losses from discontinued operations decline, and the profits from our new business model grow," concluded Mr. Perry. "In this respect, I believe that we have turned a corner and that our business is improving. But to reiterate, our highest priority is maintaining our safety and soundness, and we continue to raise capital and shrink our balance sheet to bolster our capital ratios. With these actions and with declining quarterly losses, we forecast that our capital ratios will improve throughout the remainder of the year and that we should remain well-capitalized throughout this crisis, although we can make no guarantees that that will be the case. The bottom line is that, while we have made a lot of progress in converting our business model, reducing our losses and keeping Indymac safe and sound despite being at the epicenter of this credit crisis, the housing and mortgage markets remain volatile and uncertain, forecasting remains very challenging, and our actual results could be materially different than our current forecast. However, I am confident that Indymac will be a survivor, and, in the long run, home lending, which is a basic business that is vital to our society and economy, will return to prosperity with many fewer competitors than there have been in the past. Indymac is the last remaining major independent home lender, and we will be a better company and stronger competitor for having survived the current crisis period, which should position us well to take advantage of the opportunities that will surely return." About Indymac Bancorp Headquartered in Pasadena, California, IndyMac Bancorp Inc. (NYSE:IMB) -- http://www.indymacbank.com/-- is the holding company for IndyMac Bank FSB, a hybrid thrift/mortgage bank that originates mortgages in all 50 states of the United States. Indymac Bank provides financing for the acquisition, development, and improvement of single-family homes. Indymac also provides financing secured by single-family homes and other banking products to facilitate consumers' personal financial goals. The company facilitates the acquisition, development, and improvement of single-family homes through the electronic mortgage information and transaction system platform that automates underwriting, risk- based pricing and rate locking via the internet at the point of sale. Indymac Bank offers mortgage products and services that are tailored to meet the needs of both consumers and mortgage professionals. Indymac operates through two segments: mortgage banking and thrift. * * * As reported by the Troubled Company Reporter on Jan. 28, 2008, Fitch Ratings downgraded the Long-term Issuer Default Ratings of Indymac Bancorp Inc. and Indymac Bank FSB to 'BB' from 'BBB-'. The Rating Outlook is Negative. INDYMAC BANCORP: S&P Puts Rating at D on Dividend Suspension ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating on Indymac Bancorp and its subsidiaries, including lowering the counterparty credit rating on Indymac to 'B/C' from 'BB+/B'. At the same time S&P lowered its ratings on the rated preferred stock of both Indymac and IndyMac Bank FSB to 'D' in light of the bank's announcement that its board had voted to suspend dividend payments on these rated issues. S&P placed the corporate credit ratings on both the bank and the holding company on CreditWatch with negative implications. "This action was taken in response to our growing concerns about Indymac's exposure to deteriorating housing markets, which has driven nonperforming assets to very high levels and resulted in continued credit-related losses that have eroded capital," said Standard & Poor's credit analyst Robert B. Hoban, Jr. As the company announced today, NPAs as of March 31, 2008, have risen to $2.1 billion, a level S&P estimate to be only slightly less than the company's adjusted total equity plus reserves. S&P are concerned that continued increases in problem assets and increasingly high charge-off levels will leave the company unable to get ahead of its asset quality problems. Because Indymac's profitability was already depressed by the cyclical decrease in mortgage finance activity and reduction in its gain-on-sale margin, S&P expect the company to continue to suffer quarterly losses for at least the rest of 2008. Indymac's ATE and regulatory capital already contained the maximum allowable amount of preferred stock that could be counted as equity, which means that every loss of $1 worth of common equity costs the company $1.35 of ATE. If management is unable to realize its ambitious asset reduction and capital preservation plans, Indymac may soon drop below the regulatory "well- capitalized" threshold. A large portion of Indymac's NPAs is in higher risk mortgage products that it discontinued in 2007. However, the core alt-A portfolio's credit performance has also deteriorated to much weaker-than-normal levels. Historically, Indymac would sell off most of its originations of higher risk products, but secondary loan and securitization markets remain shut down. Indymac's high percentage of the more at-risk 2006 and 2007 vintage loans and high exposure to the weakened California market will likely lead to higher-than-peer loss severity. Indymac's depository funding and access to Federal Home Loan Bank advances has provided it with continued access to readily available unsecured liquidity, allowing the company to maintain adequate liquidity despite the widespread tightening of credit available to the mortgage finance sector. Still, S&P are concerned that the bank's weakened financial position could affect its funding profile. Indymac continues to rely on the sale of loans to support the bulk of its origination activity, but management has shifted its production mix to mostly agency- eligible loans. This allows the vast majority of loans to be sold directly to the agencies, reducing Indymac's funding needs. S&P expect Indymac to continue to maintain prudent contingent liquidity. S&P placed the company on CreditWatch Negative pending its more thorough review of Indymac's financial position in light of its most current outlook for the housing and mortgage finance markets. Some or all of S&P's ratings on Indymac could again be lowered or its outlook changed depending on the outcome of this review. Given S&P's concerns about the housing and mortgage finance markets, there is little upward momentum to the ratings at this time. That said, if credit-loss levels abate to the point where the company returns to even a modest level of profitability, while maintaining adequate capitalization and liquidity levels, the outlook could return to stable. INFINITY ENERGY: Has Until May 31 to Cure Loan Agreement Defaults ----------------------------------------------------------------- Infinity Energy Resources Inc. entered into a Second Forbearance Agreement in relation to the company's several existing defaults. The agreement also provides that Amegy Bank N.A. will waive and forebear from exercising any remedies through May 31, 2008. On March 27, 2008, Infinity Energy entered the agreement with Infinity-Texas, Infinity-Wyoming and Amegy Bank N.A. Under the term of the agreement, the borrowing base under the loan agreement was reduced to $3.8 million, with a resulting borrowing base deficiency of $7.1 million. The deficiency is required to be cured by May 31, 2008, through the sale of assets, refinancing of the loan or some other means of raising capital. The agreement gives Amegy the right to require Infinity to proceed with the sale and marketing of the oil and gas properties and leasehold interests held by Infinity-Texas. The company may seek an extension to repay the borrowing base deficiency if it will be unable to sell assets or obtain alternative sources of funding to repay the deficiency by May 31, 2008. There can be no assurance that such an extension can be obtained at all or on satisfactory terms. Financial Results The company reported a net loss of $1,252,000 for the quarter ended March 31, 2008, versus a net loss of $3,780,000 in the quarter ended March 31, 2007. Approximately $2.5 million in net cash was used in operating activities during the three months ended March 31, 2008, compared with $4.3 million in net cash used in operating activities in the year-earlier quarter. Net cash provided by investing activities, including proceeds from the sale of certain producing properties in the Rocky Mountain region, totaled $16.7 million in the first quarter of 2008, versus $5.4 million of cash used in investing activities in the first quarter of 2007. At March 31, 2008, the company's balance sheet showed total assets of $25.8 million, total liabilities of $19.2 million and total stockholders' equity of $6.6 million. About Infinity Energy Headquartered in Denver, Infinity Energy Resources Inc. (NasdaqGM: IFNY) -- http://www.infinity-res.com/-- is an independent energy company engaged in the exploration, development production of natural gas and oil and the acquisition of natural gas and oil properties in Texas and the Rocky Mountain region of the United States. The company also has a 1.4 million-acre oil and gas concession offshore Nicaragua in the Caribbean Sea. INTERPHARM HOLDINGS: Tullis-Dickerson Declares 18% Equity Stake --------------------------------------------------------------- Tullis-Dickerson Capital Focus III, LP, Tullis-Dickerson Partners III, LLC, Joan P. Neuscheler, James L. L. Tullis, Thomas P. Dickerson, Lyle A. Hohnke and Timothy M. Buono, declare that they beneficially own 568,647 shares of Interpharm Holdings Inc. common stock, representing 18% of outstanding shares. Based in Hauppauge, New York, Interpharm Holdings Inc. (AMEX: IPA) -- http://www.interpharminc.com/ -- currently develops, manufactures and distributes generic prescription strength and over-the-counter pharmaceutical products. Interpharm Holdings Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $64.3 million in total assets, $53.1 million in total liabilities, and $16.5 million in redeemable convertible preferred stock, resulting in a $5.3 million total stockholders' deficit. Forbearance Agreement On Feb. 5, 2008, the company and Wells Fargo Business Credit entered into a Forbearance Agreement whereby Wells Fargo agreed to, among other things: (i) forbear from exercising its remedies arising from the company's default under its Credit Agreement until June 30, 2008, provided no further default occurs; (ii) provide a moratorium on certain principal payment; (iii) and advance the company up to $3,000,000 under a newly granted real estate line of credit mortgage on the company's real estate, which amounts will be due on June 30, 2008. The total amount outstanding with Wells Fargo at Dec. 31, 2007, was $30,590,000. INTERPHARM HOLDINGS: Aisling Capital Declares 18.5% Equity Stake ---------------------------------------------------------------- Aisling Capital II, LP, Aisling Capital Partners, LP, Aisling capital Partners, LLC, and managing members Dennis Purcell, Steve Elms, and Andrew Schiff, beneficially own 14,978,763 shares of Interpharm Holdings Inc. common stock, representing 18.5% of the outstanding shares of common stock. Based in Hauppauge, New York, Interpharm Holdings Inc. (AMEX: IPA) -- http://www.interpharminc.com/ -- currently develops, manufactures and distributes generic prescription strength and over-the-counter pharmaceutical products. Interpharm Holdings Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $64.3 million in total assets, $53.1 million in total liabilities, and $16.5 million in redeemable convertible preferred stock, resulting in a $5.3 million total stockholders' deficit. Forbearance Agreement On Feb. 5, 2008, the company and Wells Fargo Business Credit entered into a Forbearance Agreement whereby Wells Fargo agreed to, among other things: (i) forbear from exercising its remedies arising from the company's default under its Credit Agreement until June 30, 2008, provided no further default occurs; (ii) provide a moratorium on certain principal payment; (iii) and advance the company up to $3,000,000 under a newly granted real estate line of credit mortgage on the company's real estate, which amounts will be due on June 30, 2008. The total amount outstanding with Wells Fargo at Dec. 31, 2007, was $30,590,000. JO-ANN STORES: Improved Credit Metrics Cue S&P to Lift Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on Hudson, Ohio-based Jo-Ann Stores Inc. S&P raised the corporate credit rating to 'B' from 'B-' and the rating on the company's senior subordinated notes to 'CCC+' from 'CCC'. The recovery rating on those notes remains at '6', which indicates S&P's expectation of negligible recovery (0%-10%) of principal in the event of default. The outlook is positive. "The upgrade reflects Jo-Ann Stores having improved its credit metrics and cash flows extensively in the past six quarters," said Standard & Poor's credit analyst Charles Pinson-Rose, "primarily through better merchandise and inventory management but also from more efficient marketing and other cost controls." KIWA BIO-TECH: Mao & Company Expresses Going Concern Doubt ---------------------------------------------------------- New York-based Mao & Company CPAs, Inc., raised substantial doubt on the ability of Kiwa Bio-Tech Products Group Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring losses from operations, working capital deficit and net capital deficiency. The company posted a net loss of $3,307,868 on net sales of $9,129,779 for the year ended Dec. 31, 2007, as compared with a net loss of $2,284,099 on net sales of $2,506,715 in the prior year. At Dec. 31, 2007, the company's consolidated balance sheet showed $3,675,180 in total assets, $5,649,113 in total liabilities and $110,838 in minority interest, resulting in $2,084,771 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $1,487,532 in total current assets available to pay $2,854,458 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b37 About Kiwa Bio-Tech Headquartered in Claremont, Calif., Kiwa Bio-Tech Products Group Corporation (OTC BB: KWBT.OB) -- http://www.kiwabiotech.com/-- develops, manufactures, distributes and markets bio-technological products for agricultural and natural resources and environmental conservation. The company has established two subsidiaries in China: (1) Kiwa Shandong in 2002, a wholly owned subsidiary, and (2) Kiwa Tianjin in July 2006, of which the company holds 80% equity. KOPPERS HOLDINGS: March 31 Balance Sheet Upside-Down by $7.6MM --------------------------------------------------------------- Koppers Holdings Inc. announced on Thursday results for its fiscal 2008 first quarter. At March 31, 2008, the company's consolidated balance sheet showed $700.0 million in total assets, $697.6 million in total liabilities, and $10.0 million in minority interest, resulting in a $7.6 million total stockholders' deficit. Net income for the first quarter of 2008 increased to $13.2 million as compared to $10.5 million in the prior year quarter. Net income for the quarter benefited from higher volumes and prices for Carbon Materials & Chemicals, which more than offset lower volumes for crossties and utility poles. The company's sales for the quarter ended March 31, 2008, increased 13.0%, or $39.0 million, to $348.0 million, as compared to $30.09 million for the prior year quarter. This increase was a result of higher sales in the Carbon Materials & Chemicals segment, which increased 28.0%, or $52.0 million. The increase in this segment was due mainly to increased pricing for most product lines as a result of higher raw material costs, higher oil prices, higher foreign currency exchange rates, and higher carbon materials volumes due to strong product demand. Sales for Railroad & Utility Products decreased 10.0%, or $13.0 million, due primarily to lower volumes of railroad crossties and utility poles. Management believes the reduction in railroad crossties is due partly to an effort by some of the Class 1 railroads to reduce inventories, and expects demand to improve in the third quarter. EBITDA for the quarter ended March 31, 2008, was $39.2 million compared to EBITDA of $35.6 million in the prior year. T Commenting on the quarter, president and chief executive officer Walter W. Turner said, "The first quarter exceeded our expectations, reflecting strong pricing and product demand for the global carbon materials and chemicals business. The lower demand in our railroad business is expected to improve in the third quarter. "Looking ahead, we are optimistic about 2009 as we anticipate the completion of construction of our existing joint venture expansion project and our new joint venture in China, both of which we anticipate coming on-line by the end of 2008. We continue to benefit from strong demand within our key end markets for aluminum, rubber and concrete, as well as our focus on enhancing cash flow and our strict adherence to safety, health and environmental regulations." Guidance Mr. Turner continued, "I am very pleased that our first quarter's results exceeded expectations and fully expect that strength to continue through 2008 and into 2009; however, based on the seasonality of our business I would like to get further into the second quarter before we modify our annual guidance to more accurately reflect our expectations for 2008. Therefore, we are not adjusting our 2008 guidance for sales growth from between 5.0% and 8.0%, an increase in adjusted EBITDA from 6.0% to 9.0% and an improvement in earnings per share of between 10.0% and 13.0%." Liquidity As of March 31, 2008, the company had $82.9 million of unused revolving credit availability under the company's senior secured credit facility, which provides for a revolving credit facility of up to $125.0 million and term loans of $28.6 million at variable rates. The company's estimated liquidity was $108.1 million at March 31, 2008. The company's estimated liquidity was $116.3 million at Dec. 31, 2007. The decrease in estimated liquidity from that date is primarily due to a reduction in cash and cash equivalents. On Feb. 6, 2008, the company's board of directors approved a common stock repurchase program. This program allows for the repurchase of up to $75.0 million of common stock from time to time in the open market. The program is scheduled to expire in February 2010. As of March 31, 2008, no repurchases have been made under this program. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2bd1 About Koppers Holdings Koppers Holdings Inc. (NYSE: KOP) -- http://www.koppers.com/-- with corporate headquarters and a research center in Pittsburgh, Pa., is a global integrated producer of carbon compounds and treated wood products. Including its joint ventures, Koppers operates facilities in the United States, United Kingdom, Denmark, Australia, and China. LEVITT AND SONS: Wachovia Disputes Homebuyers' Senior Lien Claims ----------------------------------------------------------------- Wachovia Bank N.A. asks the U.S. Bankruptcy Court for the Southern District of Florida to deny certain lien claimants' requests to afford their claims more priority over that of Wachovia's DIP claims. As of the date of bankruptcy, Wachovia Bank was the primary financier for seven of the Debtors' developments. The Wachovia Projects were funded by three separate loans totaling approximately $122,000,000. The Prepetition Debt was secured by all assets -- Wachovia Prepetition Liens -- of the Wachovia Debtors. The Court's Feb. 13, 2008 final order on the Wachovia Debtors' DIP Financing Motion provided that "all liens, claims, interests, and encumbrances against any assets of the Borrower that are junior to Wachovia's interest are hereby stripped off the respective assets of Borrower in their entirety," Robert N. Gilbert, Esq., at Carlton Fields, P.A., in West Palm Beach, Florida, notes. The Court's Feb. 13, 2008 Memorandum Opinion also held that "[t]he lien granted to Wachovia in conjunction with the DIP Financing is junior to any lien that has seniority over Wachovia's prepetition lien and superior to any other lien." Wachovia contends that there are no liens with priority over it, Mr. Gilbert continues. The Final DIP Financing Order also set a deadline of March 10, 2008, for any party claiming a superior lien against a Wachovia Debtor to file a statement setting forth the nature of the Lien, and the legal basis for the assertion that the Lien is superior to Wachovia's position. Fourteen homebuyers have filed statements asking the Court to grant them a lien on the real property subject of a Purchase and Sale Agreement with the Wachovia Debtors: (a) Peter and Elena Belansky (b) Jay and Yvonne Cartman (c) Joseph and Margaret Crisci (d) Joseph and Jacqueline D'Allessandro (e) Robert and Kathleen Hillyard (f) Jacqueline Kateridge (g) Robert and Barbara Mackey (h) David and Gail Whalen The Cartmans, Criscis, D'Allessandros and Whalens also previously filed with the Court motions for the cancellation of their contracts and the return of their deposits. The D'Allessandros withdrew their Motion to Cancel Contract. The Court ordered the rejection of these homebuyers' contracts, but denied the return of deposits since those funds were not put into an escrow account or otherwise segregated. These homebuyers then filed their Homeowner Lien Motions. The Hillyards have stated that they plan to meet with Chief Administrator Soneet R. Kapila, and hope to reach an agreement for the construction of their home. None of the Purchase Lien Claimants have a lien against the assets of the Wachovia Debtors because any lien they assert under Section 365(j) of the Bankruptcy Code is inferior to Wachovia's DIP Lien and has been stripped pursuant to the Final DIP Financing Order, Mr. Gilbert asserts. Section 365(j) provides that a lien to all purchasers of real property whose contracts to purchase real property are rejected by a debtor for any deposit monies made by the purchaser, Mr. Gilbert notes. However, the lien created by Section 365(j) relates back to the Petition Date, and has the lowest priority of all security interest in the bankruptcy estate, he says. If the Hillyards and the D'Allessandros reach an agreement with the Chief Administrator for the completion of their homes under their contracts, they will be given credit for the full amount of their deposit. If the Hillyards and D'Allessandros decide not to go forward with the completion of their homes, their contracts will be rejected, according to Mr. Gilbert. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Wants to Extend Plan-Filing Deadline to June 27 ---------------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to further extend their exclusive periods to: (a) file a plan of reorganization through June 27, 2008; and (b) solicit acceptances of a plan through Sept. 30, 2008. The Debtors' current Exclusive Plan Filing Period is through May 12, 2008, and their current Exclusive Solicitation Period is through July 10, 2008. The Debtors have collaborated with the Official Committee of Unsecured Creditors and Home Purchase Deposit Creditors Committee with respect to all matters affecting the administration of their Chapter 11 cases. The Debtors and the Creditors Committee have been engaged in discussions regarding the terms of a joint liquidating plan of reorganization for sometime, Jordi Guso, Esq., at Berger Singerman, P.A., in Miami, Florida, informs the Court. The Debtors prepared a proposed plan, as to which the Creditors Committee has had substantial input, Mr. Guso says. The Creditors Committee is likely to be a co-proponent of the plan. The collaboration between the Debtors and the Creditors Committee with respect to the terms of a plan are ongoing, he relates. The Depositors Committee has also been provided a draft of the plan, according to Mr. Singerman. Following the Debtors' preparation of the draft plan, the Creditors Committee and Levitt Corporation initiated discussions regarding, among other things, the treatment of the claims of Levitt and the resolution of potential claims against it, according to Mr. Guso. At the conclusion of a conference held on April 29, 2008, the Creditors Committee and Levitt reached an agreement in principle, which may result in the resolution of the treatment of applicable claims. When fully documented, the settlement will be comprehensive and encompass a resolution of a number of difficult and potentially complex claims, Mr. Guso tells the Court. The Creditors Committee has also begun drafting the terms of a formal comprehensive settlement agreement, Mr. Singerman avers. The Debtors and the Creditors Committee intend to incorporate the terms of the settlement into the proposed plan as a significant aspect of the means for implementing the plan. No creditor or party-in-interest will be prejudiced by a further extension of the Exclusive Periods, Mr. Singerman maintains. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Wants Claims Bar Date Extended to Sept. 30 ----------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to further extend the bar date for the filing of proofs of claim relating to intercompany claims until Sept. 30, 2008. The Court previously extended the Intercompany Claims Bar Date to May 11, 2008. Because of the significant intercompany dealings among the Debtors and the numerous issues they have been dealing with in their Chapter 11 cases, the Debtors have not yet completed an analysis as to claims each Debtor may have against the other, Jordi Guso, Esq., at Berger Singerman, P.A., in Miami, Florida, tells the Court. Moreover, the Debtors and the Official Committee of Unsecured Creditor continue to evaluate whether some or all of the Debtors' estates should be substantively consolidated, according to Mr. Guso. "Substantive consolidation may result in the extinguishment of some or all of the Intercompany Claims," he continues. The Creditors Committee supports an extension of the Intercompany Claims Bar Date. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LEVITT AND SONS: Depositors Panel Wants Expanded Responsibilities ----------------------------------------------------------------- The Home Purchase Deposit Creditors Deposit Holders Committee in Levitt and Sons LLC and its debtor-affiliates' Chapter 11 cases asks the U.S. Bankruptcy Court for the Southern District of Florida to expand the scope of its responsibilities. The Depositors Committee relates that it filed on Feb. 21, 2008, a motion seeking limited relief from the automatic stay to allow Deposit Holders to pursue claims against the Florida Homeowners' Construction Recovery Fund and the validation of the claims of Deposit Holders solely for purpose of seeking recovery from the Recovery Fund. A hearing was held on April 29, 2008. The Court has yet to enter its order on the Recovery Fund Motion. In a separate filing, the Court approved the employment of Robert P. Charbonneau, Esq., and the law firm Ehrenstein Charbonneau Calderin, as counsel to the Depositors Committee. At the April 29, 2008 hearing, the Depositors Committee's counsel indicated that it would seek the Court's authorization to expand the scope of its engagement to represent a small group of Deposit Holders, who will make claims against the Recovery Fund. Based on the previous rejection of claims brought by several Deposit Holders seeking recovery from the Recovery Fund, the Depositors Committee anticipates that the claims of the Test Claimants will be rejected by the Recovery Fund either for lack of jurisdiction or on the merits of the Test Claims, Mr. Charbonneau relates. Accordingly, the Depositors Committee anticipates that its and ECC's representation of the Test Claimants will consist mostly of appeals from rejections of the Test Claims. Based on the largely appellate nature of the proposed representation, the Deposit Holders anticipate that the cost of ECC's continued representation will consist mostly of appellate brief writing and legal argument as opposed to administrative work in amassing the limited paperwork needed to bring the Test Claims, Mr. Charbonneau points outs. The Depositors Committee thus asks the Court to: (a) expand the scope of its responsibilities; and (b) expand the scope of employment of ECC to represent the Deposit Holders bringing claims against the Recovery Fund. About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. (Levitt and Sons Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LIBERTY MEDIA: Ends Spin-off Squabble with IAC/InterActiveCorp -------------------------------------------------------------- Liberty Media Corporation has agreed to drop its appeal from a decision handed down by the Delaware Chancery Court on March 28, 2008, thus resolving a legal dispute with IAC/InterActiveCorp regarding IAC's proposed restructuring. Liberty said it will not oppose the proposed single-tier spin-offs of HSN, Interval International, Ticketmaster and Lending Tree, which IAC advanced on May 13 by making its initial filings with the Securities and Exchange Commission. Additionally, the companies agreed on a number of arrangements regarding the governance of the spun off companies, including Liberty's right to board representation on each company and a standstill agreement that limits Liberty's ability to increase its ownership stakes and to take a variety of other actions with respect to the spun off companies. "Now it's really over and that's great for both of us," Barry Diller, IAC chairman and chief executive officer, stated. "I am pleased that we were able to amicably resolve our dispute with IAC. Liberty supports the proposed restructuring of IAC and looks forward to the ongoing success of each of the new entities and IAC," John Malone, Liberty chairman said. About IAC IAC/InterActiveCorp (Nasdaq: IACI) -- http://iac.com/-- operates a portfolio of specialized and global brands in the sectors: Retailing, which includes the United States and International segments; Services, which includes the Ticketing, Lending, Real Estate, Teleservices and Home Services reporting segments; Media & Advertising, and Membership & Subscriptions, which includes the Vacations, Personals and Discounts reporting segments. About Liberty Media Headquartered in Englewood, Colorado, Liberty Media Corporation (NasdaqGS: LINTA) -- http://www.libertymedia.com/-- owns interests in a broad range of electronic retailing, media, communications and entertainment businesses. Those interests are attributed to two tracking stock groups: the Liberty Interactive group, which includes Liberty's interests in QVC, Provide Commerce, IAC/InterActiveCorp, and Expedia, and the Liberty Capital group, which includes Liberty's interests in Starz Entertainment, News Corporation, and Time Warner. * * * As reported in the Troubled Company Reporter on March 14, 2008, Standard & Poor's Ratings Services said that Liberty Media Corp.'s (BB+/Negative/--) new share repurchase authorization of up to $1 billion of Liberty Entertainment common stock and up to $300 million of Liberty Capital common stock does not affect the ratings on the company. The $1.3 billion total authorization replaces a prior $1 billion purchase authorization of Liberty Capital common stock, but does not affect the existing Liberty Interactive repurchase authorization, which has $780 million remaining. LINENS N THINGS: Wants to Set Auction Procedures for 120 Stores --------------------------------------------------------------- Prior to their bankruptcy filing, Linens 'n Things and its debtor- affiliates engaged in an in-depth analysis to improve their overall financial performance, including the closing of unprofitable stores. As a result, the Debtors identified 120 stores as underperforming stores that should be closed at the outset of the Chapter 11 cases to aid in the reorganization efforts. The Debtors also want to ease certain of the liquidity restraints by similar themed sales at the Closing Stores by conducting an auction. Proposed counsel for the Debtors, Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, asserts that the proposed Store Closing Sales will dramatically reduce the administrative costs associated with the Closing Stores, are customary in Chapter 11 reorganizations, and are designed to provide the maximum value to the bankruptcy estates. He adds that the proceeds of the Store Closing Sales will benefit the estates by reducing the Debtors' secured debt. To maximize the value of the (i) inventory and merchandise to be included in the Store Closing Sales, and (ii) owned furniture, fixtures and equipment in the Closing Stores, the Debtors intend to obtain assistance from certain liquidation firms. Mr. Collins relates that prior to the Petition Date, the Debtors have obtained signed confidentiality agreements from, and provided substantial due diligence materials to, the Liquidation Firms. On the Petition Date, the Debtors circulated a "Summary Request for Proposal" to each of the Liquidation Firms, and requested the firms that initial bids to act as the Debtors' agent to conduct the Store Closing Sales, be submitted on May 8, 2008. The Debtors intend to select and negotiate a "stalking horse" bid from the initial bids submitted by the Liquidation Firms, and to execute a stalking horse agency agreement prior to the hearing to consider this request. By this motion, the Debtors seek the entry of two orders: (1) a procedures order, which: (a) approves proposed auction procedures, and a break-up fee and expense reimbursement for the Stalking Horse Bidder, if any; (b) sets the time, date, and place of the auction; and (c) approves the form of notice of the Auction, and notice of the Store Closing Sales; and (2) an approval order, which approves: (a) the Agency Agreement with the party submitting the highest or best bid at the Auction; and (b) the Store Closing Sales and waiving the Debtors' compliance with state and local laws, and lease provisions restricting the Store Closing Sales. At the Debtors' behest, the United States Bankruptcy Court for the District of Delaware will convene a hearing on May 13, 2008, at 11:00 a.m. to consider the request. Proposed Store Closing Sales The Debtors propose to commence the Store Closing Sales promptly after the Sale Hearing to stem the losses from continued operation of the Closing Stores. The Debtors also seek authority to enter into an Agency Agreement to allow the successful bidder at the Auction to serve as the Debtors' agent in conducting the Store Closing Sales. Delay in commencing the Store Closing Sales would diminish value for the estates because the Closing Stores lose money, and are a drain on liquidity, Mr. Collins contends. He adds that commencing the Store Closing Sales expeditiously avoids the risk of inventory "shrink." Proposed Auction Procedures The Debtors propose these Auction procedures: -- The Debtors will continue to cooperate and provide access to all previously contacted potential bidders, who seek to conduct diligence, and any other potentially interested bidder; -- Within two business days after Procedures Order's entry, the Debtors will serve the notice on the Auction and Store Closing Sales on certain notice parties, which include official committees, Office of the U.S. Trustee and all Potential Bidders; -- Prior to forming a joint venture between two or more Potential Bidders, the Potential Bidders must obtain prior written approval from the Debtors; -- The Debtors reserve the right at any time prior to the Auction to select a Stalking Horse Bidder; -- Bid deadline is on May 27, 2008, at 4:00 p.m., Eastern Time; -- Bids must be unconditional and not contingent upon any event. All Bids are irrevocable until seven days after the Sale Hearing; -- A proposed bid must be based on the terms and conditions of the form of Agency Agreement. To the extent the Debtors have entered into a Stalking Horse Agreement, all proposed bids will be based upon the terms and conditions of the Stalking Horse Agreement and will be, at a minimum, for an amount higher than or equal to the sum of the Guaranteed Amount, plus the minimum initial overbid, provided for under the Stalking Horse Agreement; and -- The Auction will be conducted on May 29, 2008 at 10:00 a.m., at the offices of the Debtors' counsel, Richards, Layton & Finger, P.A., at One Rodney Square, 920 North King Street, in Wilmington, Delaware 19801. The Debtors further ask the Court that the Sale Hearing be held on May 30, 2008, at 12:00 p.m. Objection deadline is on May 22. The Agency Agreement The use of a uniform Agency Agreement, upon which initial bids and bids at the Auction will be based, will enable the Debtors and other parties-in-interest to easily compare and contrast any differing terms of the bids made by the Liquidation Firms, both as part of the initial bid phase for purposes of selecting a Stalking Horse, and subsequently at the Auction. Mr. Collins says. The material terms of the Agency Agreement are: -- As a guaranty of Agent's performance under the Agency Agreement, the Agent will guarantee that the Debtors will recover a fixed percentage of the cost value of the merchandise included in the sale; -- From the commencement of the sale through its termination, Agent will be unconditionally responsible for all expenses incurred in conducting the sale, which expenses may be funded and paid from the sale proceeds; -- The Agent would receive a fee, calculated based upon a fixed percentage of the Merchandise cost value. The Agent would also be entitled to retain all Sale Proceeds after reimbursement of sale expenses, and payment to the Debtors of any recovery amount, which is the excess amounts from Sale Proceeds that will be shared by the Debtors and the Agent after taking out the Guaranteed Amount, Sale expenses, and the Agent's base fee; and -- On the commencement of the sale, the Agent will wire to the Debtors a substantial portion of the estimated Guaranteed Amount, and secure the remaining portion with a letter of credit. The Agent will also collateralize its obligation to reimburse the Debtors for Sale expenses by posting a letter of credit equal to three weeks estimated expenses to be incurred by the Debtors. The Debtors reserve the right to amend or otherwise change the terms of the Agency Agreement in a manner as the Debtors deem to be in their best interests after consultation with General Electric Capital Corporation, as agent for the prepeititon ldners and DIP lender. About Linens 'N Things Clifton, New Jersey-based Linens Holding Co., which does business through its operating subsidiary Linens 'N Things Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of December 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name well as private label home furnishings merchandise in the industry. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. (Linens 'n Things Bankruptcy News, Issue No. 4, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)7 LINENS N THINGS: Interested Parties Balk at Proposed Store Sales ---------------------------------------------------------------- Various parties-in-interest challenge the request of Linens 'n Things and its debtor-affiliates to dispose of unprofitable outlets and for approval of certain store closing procedures: A. Noteholders Committee The Ad Hoc Committee of Holders of Senior Secured Floating Rate Notes Due 2014, which were issued by certain of the Debtors, relates that pursuant to an Indenture dated February 14, 2006, the Debtors issued the Notes for a total principal amount of $650,000,000, which were secured by indenture liens on certain of the Debtors' assets. The Indenture Liens encumber certain collateral, which were junior to the liens securing the Debtors' DIP Facility obligations. The Noteholders Committee believes the sale of its merchandise collateral will be sufficient to pay the DIP Obligations, but not the Indenture Obligations. Hence, the Noteholders Committee says that the successful disposition of the Merchandise Collateral should "redound, first and foremost, to the Noteholders' recovery." The Noteholders Committee also points out that the Debtors fail to provide it with any review, consultation or consent rights with respect to the auction procedures, but gave the same valuable rights to the DIP Lender, General Electric Capital Corporation. Accordingly, the Noteholders Committee asks the U.S. Bankruptcy Court for the District of Delaware to: -- amend the proposed procedures, and direct the Debtors to amend the Agency Agreement to provide the committee with the same rights given to GECC; -- restrict any liens granted under the Agency Agreement to liens, which are junior to the Noteholders' liens; and -- direct the Debtors to begin diligently and expediently market the real property leases at the Closing Stores. The Bank of New York, as collateral agent and Indenture trustee, joins and supports the objection of the Noteholders Committee. B. States of Texas and Tennessee The Consumer Protection and Public Health Division of the Texas Attorney General's Office objects to the request on these bases: (1) The style of the request does not appear to be reasonably calculated to give regulatory authorities effective notice of the relief sought by the Debtors; (2) The Debtors request via the instant request, and not through a formal adversary proceeding, to enjoin, state regulatory authorities from enforcing valid state laws and regulations; (3) The request does not specify the state laws from which the Debtors seek to be excused from complying; and (4) The waiver of the stay of any order approving the request is wholly inappropriate in this case. The Division of Consumer Affairs of the Office of the Tennessee Attorney General joins in "substantial part" to Texas' objection to the request. C. Greenway and Legends Greenway Center, LLC, and Legends of KC, LP, lease non- residential real properties to the Debtors, which are affected by the proposed store closings. Their concerns are on hanging of exterior signs or banners on the leased properties, in which the exterior finish consists of the easily-damaged material known as the "exterior insulation and finish system." Alternatively, Greenway and Legends says that the Debtors should be required to make repairs. They assert that provisions for treatment of exterior are not included in the Debtors' proposed procedures. Accordingly, Greenway and Legends ask the Court to modify the proposed procedures with respect to Greenway Station and Legends Village, and direct the Debtors to coordinate with the landlords' property managers to ensure that any exterior signs are installed properly. D. Other Landlords Several other landlords object to the Debtors' request. The Landlords want the Court to amend the proposed procedures to provide that the Landlords' other tenants will not be disturbed by the proposed sales, and that the Debtors should pay their postpetition rental obligations, among other amendments. Among the objecting landlords are: (1) Centerpoint Development Company, L.L.C.; (2) RLV Winchester Center, LP; (3) Baldwin Commons, L.L.C. (4) RLV Troy Marketplace, LP; (5) RLV Millennium Park, LP; (6) Ramco Auburn Crossroads SPE, LLC; (7) Macon Mall, LLC; (8) Independence Center, LLC (9) Riverside Enterprises, L.L.C.; and (10) Lanesborough Enterprises Newco, LLC. About Linens 'N Things Clifton, New Jersey-based Linens Holding Co., which does business through its operating subsidiary Linens 'N Things Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of December 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name well as private label home furnishings merchandise in the industry. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. (Linens 'n Things Bankruptcy News, Issue No. 4, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)7 LINENS N THINGS: U.S. Trustee Appoints 7-Member Creditors Panel --------------------------------------------------------------- Roberta A. DeAngelis, acting United States Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Linens 'n Things and its debtor-affiliates.: (1) The CIT Group/Commercial Services Inc. Attn: Timothy E.Cropper Two Wachovia Center, 301 S. Tryon Street Charlotte, North Carolina 28282 Tel: (704) 339-2906 Fax: (704) 339-2250 (2) Croscill Inc. Attn: Daniel Frangis 2102 Fay Street Durham, North Carolina 27704 Tel: (919) 956-6333 Fax: (919) 683-6360 (3) CVS Pharmacy, Inc. Attn: Robert T. Marcello, vice president Attn: Michael B. Nulman, Sr., legal counsel 1 CVS Drive Woonsocket, Rhode Island 02895 Tel: (401) 770-2533 Fax: (401) 765-7887 (4) M. Block and Sons, Inc. Attn: Edward C. Roels 5020 W. 73rd Street Bedford Park, Illinois 60638 Tel: (708) 728-8400 Fax: (708) 924-4618 (5) Springs Global US, Inc. Attn: Flavio R. Barbosa 205 North White Street Fort Mill, South Carolina 29715 Tel: (803) 396-1103 Fax: (803) 547-1636 (6) The Yankee Candle Company, Inc. Attn: James A. Perley, Esq. 16 Yankee Candle Way - P.O. Box 110 South Deerfield, Massachusetts 01373 Tel: (413) 665-8306 Fax: (413) 665-4171 (7) Simon Property Group, Inc. Attn: Ronald M. Tucker 225 W. Washington Street Indianapolis, Indiana 46204 Tel: (317) 263-2346 Fax: (317) 263-7901 Majority of the Committee members are merchandise vendors or are in the home furnishings industry -- Croscill, which supplies beds and window treatments to Linens 'n Things; The Yankee Candle Company, which supplies home accessories; Spring Global, whose bedding components are sold at Linens 'n Things stores, and M. Block & Sons, which imports and distributes housewares, among other products. Home Furnishings News noted the Debtors' consolidated list of 30 largest unsecured creditors reads like a who's who of the home furnishings industry, with Yankee Candle ranking as the retailer's largest creditor. Yankee Candle has a $4,604,554 scheduled prepetition claim; Croscill, a $2,080,651 scheduled claim; M. Block & Sons, $2,094,348; and Spring Global, $1,627,835. Simon Property Group own malls, some of which house Linens 'n Things stores. These include Lake View Plaza, in Orland Park, Chicago, Illinois; Lakeline Plaza, in Austin, Texas; and The Plaza at Buckland Hills, in Manchester, Connecticut. CVS Pharmacy was a unit of Melville Corp., which previously owned Linens 'n Things. Pharmacy chain CVS is a guarantor of some of the leases Linens 'n Things signed with Kimco Realty. Linens 'n Things participates in CIT Group unit CIT Bank's Bill Me Later, a program which allows retailers to offer instant credit to consumers. In addition, CIT Group/Business Credit, Inc., was among the banks which provided the Debtors with the $700,000,000 secured loan provided in May 2007, under which CIT Group acted as co-syndication agent. According to Wall Street Journal's Jamie Heller, the Creditors Committee will be represented by Scott Hazan, Esq., and his team at Otterbourg, Steindler, Houston & Rosen, P.C., in New York. Mr. Hazan has also represented the Debtors' ad hoc committee of major merchandise vendors, which was formed prepetition for the negotiations of uninterrupted supply of products to the Debtors. About Linens 'N Things Clifton, New Jersey-based Linens Holding Co., which does business through its operating subsidiary Linens 'N Things Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of December 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name well as private label home furnishings merchandise in the industry. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. (Linens 'n Things Bankruptcy News, Issue No. 4, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000)7 MARATHON HEALTHCARE: U.S. Trustee Forms Seven-Member Committee -------------------------------------------------------------- The United States Trustee for Region 2 amended its appointment of members to the Offical Committee of Unsecured Creditors in the bankruptcy case of Marathon Healthcare Group LLC and its debtor- affiliates. The members of the Committee are: 1. Value Healthcare Services LLC JoAnn Billman, NFB/Legal Lead 1600 RiverCenter II 100 East RiverCenter Boulevard Covington, KY 41011 Telephone: (859) 392-7398 Facsimile: (859) 392-3692 2. Functional Pathways George W. Wyatt, CFO 614 Marby Hood Road, Suite 301 Knoxville, TN 37932 Telephone: (865) 531-2204 Facsimile: (865) 531-2697 3. Geriatric Medical & Surgical Supply Inc. Jeff Goldstein, Controller 404 3rd Street Everett, MA 02149 Telephone: (617) 387-5936 Facsimile: (617) 507-4655 4. Dart Chart Systems LLC Bernard Hoffman, CEO 3825 W. Green Tree Road Milwaukee, WI 53209 Telephone: (414) 247-3100 Facsimile: (414) 247-3188 5. Connecticut Light & Power Co. Honor Heath, Esq., Counsel 107 Selden Street Berlin, CT 06037 Telephone: (860) 665-4865 Facsimile: (860) 665-5504 6. New England Health Care Employees Benefit Funds Michael E. Passero, Esq., Counsel 92 Cherry Street, P.O. Box 170 Milford, CT 06460 Telephone: (203) 878-2419 Facsimile: (203) 878-6021 7. HPC FoodService Thomas Ward, Controller/CFO Post Office Box 1228 South Windsor, CT 06074 Telephone: (860) 760-3989 Facsimile: (860) 583-3369 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. East Hartford, Connecticut-based Marathon Healthcare Group, LLC -- http://www.marathonhealthcare.com/-- provides nursing and long term care. Together with seven affiliates, the healthcare provider filed for chapter 11 protection on April 3, 2008 (Bankr. D. Conn. Lead Case No. 08-20591). Barry S. Feigenbaum, Esq., at Rogin Nassau, LLC, represents the Debtors in their restructuring efforts. When the Debtors filed for chapter 11, they listed assets between $100,000 and $1 million and debts between $1 million and $10 million. MARATHON HEALTHCARE: Committee Wants Zeisler & Zeisler as Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Marathon Healthcare Group, LLC asks permission from the U.S. Bankruptcy Court for the District of Connecticut to engage Zeisler & Zeisler PC as its counsel, nunc pro tunc to April 18, 2008. In an April 18, 2008 meeting, the Committee voted to engage the firm to provide it with legal services, including participation in the bankruptcy-related meetings and assisting the Committee in maximizing the value for unsecured creditors from the Debtors' assets. The firm's partner, James Berman, Esq., charges $440 per hour for his services. Other partners of the firm charge $375 per hour for their services. The Committee maintained that the firm does not represent and hold any interest adverse to the Debtors or their estates. The firm can be reached at: Zeisler & Zeisler PC 558 Clinton Avenue, P.O. Box 3186 Bridgeport, CT 06605-0186 Tel: (203) 368-4234 East Hartford, Connecticut-based Marathon Healthcare Group, LLC -- http://www.marathonhealthcare.com/-- provides nursing and long term care. Together with seven affiliates, the healthcare provider filed for chapter 11 protection on April 3, 2008 (Bankr. D. Conn. Lead Case No. 08-20591). Barry S. Feigenbaum, Esq., at Rogin Nassau, LLC, represents the Debtors in their restructuring efforts. When the Debtors filed for chapter 11, they listed assets between $100,000 and $1 million and debts between $1 million and $10 million. MARSHALL HOLDINGS: Madsen Expresses Going Concern Doubt ------------------------------------------------------- Madsen & Associates CPA's, Inc., raised substantial doubt on the ability of Marshall Holdings International, Inc., formerly Gateway Distributors, Ltd., to continue as a going concern after the firm audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's need of additional working capital for its planned activity and to service its debt. Management reported that as of Sept.18, 2006, the company finalized negotiations, initiated in 2003, with the Internal Revenue Service to settle past taxes due. An agreement was reached that the compromise previously submitted to the IRS was withdrawn on July 24, 2006. The offer deposit of $250,000 was to be credited as the initial installment payment. A second installment payment of $75,000 was to be paid within 90 days of the agreement acceptance date, Sept. 18, 2006. Payments of $50,000 per month will begin in the fourth month after the acceptance date and will continue each month until the liability is paid in full, about 10 months. The payments were due by the 20th day of the month. The company has been unable to perform and make the payments as a result of operating cash deficiency and therefore the company has accrued a liability for the above in the amounts of $575,231 and $587,336 for the years ended Dec. 31, 2007, and 2006 respectively. The company is currently in renegotiations with the IRS to establish a payment plan that they can maintain. The company posted a net loss of $3,573,971 on total sales of $5,204,952 for the year ended Dec. 31, 2007, as compared with a net loss of $3,735,237 on total sales of $3,757,181 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $11,886,816 in total assets and $13,804,052 in total liabilities, resulting in $1,917,236 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $5,139,307 in total current assets available to pay $12,110,144 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b28 About Marshall Holdings Headquartered in Las Vegas, Nevada, Marshall Holdings International Inc. fka Gateway Distributors Ltd. (OTC BB: MHII.OB) -- http://www.mhii.net/-- distributes vitamins, nutritional supplements, whole health foods and skin care products mainly in the United States of America and Canada, with some sales in Russia and Indonesia. MBIA INC: Posts Third Consecutive Quarterly Loss at $2.4 Billion ---------------------------------------------------------------- MBIA Inc., the holding company for MBIA Insurance Corporation, reported a net loss for the first quarter of 2008 of $2.4 billion, compared with net income of $198.6 million during the same period in 2007. The Wall Street Journal discloses that it is the company's third consecutive quarterly loss. MBIA's insured portfolio, totaling $668 billion at quarter-end, continued to generate substantial revenue in the quarter, even though new business production was off substantially from the same period of the prior year. Total revenue was $741.7 million (before realized and unrealized gains and losses) compared to $738.3 million in last year's first quarter. MBIA generated operating cash flow of $257.4 million for the three months ended March 31, 2008 compared with $142.1 million for the three months ended March 31, 2007. The majority of the net loss in the quarter was the result of a pre-tax $3.6 billion unrealized loss on insured credit derivatives, which included $0.8 billion of credit impairments. "MBIA continues to be a sound financial institution," Jay Brown, MBIA Chairman and Chief Executive Officer, said. "We have ample liquidity, our balance sheet is built to withstand credit stress levels many multiples of what we're experiencing now, and our business model is proving that we are adequately capitalized to satisfy any potential claims on our insured portfolio. While our operating results this quarter were clearly disappointing, they are consistent with developments in the credit markets." Credit Impairment During the first quarter, MBIA conducted a thorough analysis of its housing-related exposures in order to update its estimates for impairments and loss reserves. As a result of this review, the Company recognized a total of $1.34 billion of pre-tax impairments and loss reserves on its housing-related insured portfolio in the quarter, bringing the cumulative total of incurred pre-tax credit losses for housing-related exposures to $2.15 billion over the past two quarters. The impairments and loss reserves are expressed on a net present value basis and are expected to be paid out over the next four years for direct and multi-sector CDO squared exposures, and up to 30 to 40 years for the company's insured multi-sector collateralized debt obligations. The company does not anticipate material additional impairment for these exposures in the foreseeable future, unless the U.S. housing and mortgage markets perform materially worse than MBIA is projecting. Capital Position and Liquidity MBIA successfully raised $2.6 billion in the quarter to support its Triple-A ratings, the most raised by any monoline insurer in the current troubled capital market. With the elimination of its shareholder dividend, the holding company, MBIA Inc., has enough cash on hand to cover a multiple of its required cash outflows in 2008, and the asset and liability management business has sufficient cash and assets to cover all of its maturing liabilities in 2008 and beyond. MBIA Insurance Corp.'s liquid assets and operating cash flow are expected to be more than sufficient to cover both current and anticipated future claims payments. Ratings Position In late February, Standard & Poor's and Moody's affirmed MBIA's Triple-A ratings with negative outlooks. At year-end 2007, the company exceeded Standard & Poor's target capital requirement by $400 million and met Moody's minimum requirements for a Triple-A rating but fell short of Moody's target capital requirement by $1.7 billion. MBIA expects to meet this target over the next two quarters. Investment Management Services MBIA's asset management business continued its new business activities in the quarter, growing its external fee-for-service advisory business by almost $1 billion in assets under management. It also continued to raise funds in the asset/liability management business at advantageous pricing levels, issuing approximately $700 million of investment agreements, signaling continuing strong demand for this product. Total average assets under management for the first quarter, including conduit assets, were $64.6 billion, down 1% from $65.4 billion for the first quarter of 2007. Unrealized Losses MBIA reported a pre-tax unrealized loss on insured credit derivatives (mark-to-market) of $3.6 billion in the first quarter, which includes $800 million of credit impairments and which reflects the net present value basis of the amount of the mark-to- market that MBIA expects to pay as actual losses. While attention-getting, the mark-to-market loss is far less reflective of MBIA's business than credit impairments, and does not accurately indicate actual or expected losses. In addition, mark-to-market losses, except for the impairment, do not affect the insurance company's statutory capital or rating agency capital requirements. Unlike financial institutions with tradable, liquid portfolios of derivative assets and liabilities, MBIA's contingent insurance liabilities are not typically tradable, and are not subject to acceleration or collateralization. Fair value accounting, however, results in some inappropriate comparisons of MBIA's position to those of other financial institutions who must transact or collateralize at current market values or who could be subject to accelerated payments. This causes confusion about the true impact of mark-to- market losses on the value of the company in the current environment. The company does not expect the full amount of cumulative mark-to-market losses to be realized, except to the extent of the $1.0 billion in impairments estimated to date. About MBIA Inc. Headquartered in Armonk, New York, MBIA Inc. (NYSE:MBI) -- http://www.mbia.com-- provides financial guarantee insurance, investment management services, and municipal and other servicesto public finance and structured finance clients on a globalbasis. The company conducts its financial guarantee business through its wholly owned subsidiary, MBIA Insurance Corporation and provides investment management products and financial services through its wholly owned subsidiary MBIA Asset Management, LLC. MBIA manages its activities primarily through two principal business operations: insurance and investment management services. In February 2007, MBIA Corp. formed a new subsidiary, MBIA Mexico, S.A. de C.V. During the year ended Dec. 31, 2006, MBIA discontinued its municipal services operations. These operations included MBIA MuniServices Company. On Dec. 5, 2006, the company completed the sale of MBIA MuniServices Company. * * * As reported in the Troubled Company Reporter on March 26, 2008, Fitch Ratings has decided to maintain its Insurer Financial Strength and debt ratings on MBIA Inc. and its subsidiaries for the foreseeable future. Fitch expects to maintain the MBIA ratings as long as Fitch believes that it can maintain a clear, well-supported credit view without access to certain non-public details concerning MBIA's insured portfolio, to which Fitch will no longer have access. As reported in the Troubled Company Reporter on Jan. 21, 2008, Moody's Investors Service placed the Aaa insurance financial strength ratings of MBIA Insurance Corporation and its affiliated insurance operating companies on review for possible downgrade. In the same rating action, Moody's also placed the surplus note rating of MBIA Insurance Corporation (Aa2-rated) and the ratings of the holding company, MBIA, Inc. (senior debt at Aa3), on review for possible downgrade. This rating action reflects Moody's growing concern about the potential volatility in ultimate performance of mortgage and mortgage-related CDO risks, and the corresponding implications for MBIA's risk-adjusted capital adequacy. Prior to this rating action, the rating outlook for MBIA was negative. MBIA INC: Could Be Affected by Sinking 2nd Lien RMBS, Moody's Says ------------------------------------------------------------------ Moody's Investors Service published a special comment entitled "U.S. Subprime Second Lien RMBS Rating Actions Update", which highlights the persistent poor performance and continued downward rating migration among 2005-2007 vintage second lien mortgage securities. Moody's notes that financial guarantors have significant exposure to second lien RMBS, primarily through guaranties on direct RMBS transactions, and to a lesser extent, through exposure to ABS CDOs, where second lien RMBS securities typically constitute less than 5% of collateral within such CDOs. Moody's loss expectations for this asset class are higher than previously anticipated, owing to worse-than-expected performance trends. This could have material implications for the estimated capital adequacy of financial guarantors most exposed to this risk. In recent announcements of first-quarter 2008 earnings, MBIA and Ambac both reported material credit impairment losses on ABS CDOs and loss reserve charges on direct RMBS exposures, including second lien securitizations. Moody's said that incurred losses within both firms' direct RMBS and ABS CDO portfolios are now meaningfully higher than the rating agency's prior expected-case loss estimates, elevating existing concerns about capitalization levels relative to the Aaa benchmark. Moody's intends, in the short term, to assess whether worsening performance in this sector is likely to be material for exposed financial guarantors, and will update the market as appropriate. In its report published earlier, Moody's notes that based on losses to date, the level of serious delinquency, and the remaining unpaid pool balances on rated second lien transactions, the rating agency has increased its loss projections on loan pools backing subprime second lien RMBS. Moody's now expects 2005 vintage subprime second lien pools to lose 17% on average, 2006 vintage pools to lose 42% on average, and 2007 pools to lose 45% on average. However, Moody's expectations on individual transactions can vary significantly around these average loss estimates, based on the quarter of origination and deal- and issuer specific characteristics, with the worst performing deals issued in 2006/2007 now expected to lose more than 60% of their original pool balance. MEDICAL SOLUTIONS: Wolf & Company Expresses Going Concern Doubt --------------------------------------------------------------- Boston-based Wolf & Company, P.C., raised substantial doubt about the ability of Medical Solutions Management, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm reported that the company's losses have resulted in an accumulated deficit of $153,000,000 as of Dec. 31, 2007, negative working capital of $2,100,000 and in 2007 operating activities consumed $7,800,000 of cash. The company posted a net loss of $148,729,936 on total revenues of $3,749,042 for the year ended Dec. 31, 2007, as compared with a net loss of $3,957,845 on total revenues of $1,013,500 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $6,375,354 in total assets and $9,161,707 in total liabilities, resulting in $2,786,353 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $6,105,572 in total current assets available to pay $8,211,768 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b2a About Medical Solutions Headquartered in Marlborough, Massachusetts, Medical Solutions Management, Inc., (OTC BB: MSMT.OB) -- markets and sells orthopedic and podiatric durable medical equipments in the United States. It enables orthopedic and podiatric practices to dispense an array of durable medical equipment directly to their patients during office visits through its turnkey programs. The company also provides billing services, inventory management, and insurance verifications, as well as offers related management services. MKP CBO: Moody's Downgrades Ratings on Credit Quality Erosion -------------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by MKP CBO IV Inc. Class Description: $40,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due 2040 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: A1, on review for possible downgrade Class Description: $18,000,000 Class C Mezzanine Secured Floating Rate Notes Due 2040 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $13,000,000 Combination Securities Due 2040 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. ML CAPITAL: Fitch Affirms 'BB' Preferred Stock Rating ----------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Ratings of Sovereign Bancorp, Inc. at 'BBB-' and Sovereign Bank at 'BBB'. These affirmations follow SOV's announcement of a sizable capital raising plan. This plan consists of $1 billion in new common equity and $500 million in subordinated debt and is expected to be completed in the next few days. The subordinated debt will be issued at the Sovereign Bank level. This action by SOV will greatly improve its capital ratios and its liquidity position, particularly at the holding company. In first-quarter 2008, SOV returned to profitability after recording large losses in fourth-quarter 2007. In the prior quarter, losses stemmed primarily from goodwill impairment charges associated with the consumer and New York Metro business segments. In 1Q08, SOV recorded net income of $100 million for an ROA of 0.50%. This ratio was moderately below the top-30 bank median and well below levels when credit conditions were benign. Loan loss provisions remained at an elevated level but were moderately lower compared to 4Q07. Overall, asset quality indicators appear to be at manageable levels. The NPA ratio continues to trend higher, but remains better than average among the top-30 U.S. banks. This favorable variance stems from: SOV dealt with its correspondent home equity portfolio much earlier than many; the bulk of its remaining real estate exposure is within its mid-Atlantic and New England footprint; exposure to homebuilders is a modest portion of the loan portfolio mix. The real estate markets in SOV's footprint have been under significantly less pressure when compared to the troubled markets of California and Florida. SOV's direct home equity portfolio has performed comparatively well. This portfolio was primarily branch originated with favorable average FICOs and combined LTVs. Loan loss reserves appear to provide solid coverage of existing non-performing loans. That said, further significant provisions could be in store for SOV, especially in a recessionary scenario. The Stable Outlook reflects expectations that asset quality problems will remain at manageable levels and capital ratios will be maintained at least at pro-forma levels. Maintenance over time of strong liquidity at the holding company combined with reduced holding company obligations could result in an alignment of holding company and bank level ratings. Fitch has affirmed these ratings, with a Stable Outlook: Sovereign Bancorp, Inc. -- Long-term IDR at 'BBB-'; -- Senior Debt at 'BBB-'; -- Short-term IDR at 'F3'; -- Individual at 'C'; -- Support at '3'. Sovereign Bank -- Long-term IDR at 'BBB'; -- Long-term Deposits at 'BBB+'; -- Subordinated Debt at 'BBB-'; -- Short-term IDR at 'F2'; -- Short-term Deposits at 'F2'; -- Individual at 'B/C'; -- Support at '3'. Sovereign Capital Trust I, IV-VI -- Preferred Stock at 'BB'. ML Capital Trust I -- Preferred Stock at 'BB'. Sovereign Real Estate Investment Trust -- Preferred Stock at 'BB+'. MORTGAGE ASSISTANCE: Sutton Robinson Expresses Going Concern Doubt ------------------------------------------------------------------ Sutton Robinson Freeman & Co., P.C., raised substantial doubt on the ability of Mortgage Assistance Center Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring losses from operations and accumulated stockholders' deficit at Dec. 31, 2007. "The company continues to actively pursue alternative financing plans to fund the company's requirements, and those plans include, but are not limited to, additional equity sales or debt financing under appropriate market conditions, allegiances or partnership agreements, or other business transactions, which could generate adequate working capital. In addition, the company continues to explore opportunities to secure additional sources of debt or other financings as a means of more cost effectively acquiring pools of mortgage notes and foreclosed properties. However, there is no guarantee that the company will receive sufficient funding to sustain operations or implement any future business plans," management related. The company posted a net loss of $3,622,706 on net revenues of $1,155,586 for the year ended Dec. 31, 2007, as compared with a net loss of $2,010,175 on net revenues of $1,282,259 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $8,410,084 in total assets, $8,337,971 in total liabilities and $3,612,087 in minority interest, resulting in $3,539,974 of stockholders' deficit. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b2e About Mortgage Assistance Mortgage Assistance Center Corporation (OTC BB: MTGC.OB) through its subsidiary, Mortgage Assistance Corporation, operates as a financial services company in the United States. The company purchases, manages, and resells pools of distressed real estate secured mortgages and promissory notes. It acquires both priority and subordinate mortgage loans or liens from banks and other lending institutions. Mortgage Assistance Center primarily purchases nonperforming, charged-off, and subprime mortgages, which are between 90 days and 2 years past due; and secured by residential real estate. The company was founded in 2003 and is based in Dallas, Texas. NORTH COVE: Fitch Junks Five Ratings, Removes Negative Watch ------------------------------------------------------------ Fitch downgraded and removed from Rating Watch Negative five classes of notes issued by North Cove CDO II, Ltd/LLC. These rating actions are effective immediately: -- $49,868,493 class A notes downgraded to 'CCC' from 'AAA', removed from Rating Watch Negative; -- $62,562,291 class B notes downgraded to 'CC' from 'AA', removed from Rating Watch Negative; -- $16,320,598 class C notes downgraded to 'CC' from 'AA-', removed from Rating Watch Negative; -- $18,861,691 class D notes downgraded to 'CC' from 'A-', removed from Rating Watch Negative; -- $20,501,838 class E notes downgraded to 'CC' from 'BBB', removed from Rating Watch Negative. North Cove II is a static synthetic collateralized debt obligation with cashflow waterfall features that closed on March 2, 2006 with 250 Capital LLC, acting as portfolio servicer. The liability structure of North Cove II includes an unrated super senior tranche with a current notional balance of approximately $445.5 million per the April 5, 2008 trustee report. North Cove II references an approximate $646 million portfolio comprised primarily of subprime residential mortgage-backed securities bonds (66.2%), Alternative-A RMBS (19.5%), prime RMBS (2.1%), and other structured finance assets. Subprime RMBS bonds of the pre-2005 and 2005 vintages account for approximately 11.2% and 55% of the portfolio, respectively. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically subprime RMBS, Alt-A RMBS, and SF CDOs with underlying exposure to subprime RMBS. Since the last review on June 21, 2007, approximately 66.7% of the portfolio has been downgraded, with 6.1% of the portfolio currently on Rating Watch Negative. As a result of the collateral downgrades, the class A/B/C and class E sequential pay ratios have declined to 106.4% and 99.6% respectively and are failing their respective triggers of 108.4% and 103.4%, as of the most recent trustee report dated April 5, 2008. The failing class A/B/C sequential pay test has caused the sequential pay period to commence. On each payment date during the sequential pay period, the notional amount of the super senior class will be reduced first until reduced to zero before any principal distributions are made to the rated notes as the assets in reference portfolio amortize. The class D and class E notes, however, will continue to benefit from a turbo feature in the interest waterfall where they will receive principal distributions from interest proceeds so long as such proceeds exist at that point in the waterfall. Though the class D and class E notes are expected to have a greater principal recovery, they face the same default risk as the class B and class C notes and therefore have the same credit rating. The Rating Watch Negative reflects the continued credit deterioration in subprime RMBS, as well as growing concerns with the performance of Alt-A RMBS. The classes rated 'CCC' and below are removed from Rating Watch as Fitch believes further negative migration in the portfolio will have a lesser impact on these classes. The ratings of the class A through E notes address the likelihood that investors will receive full and timely payments of interest, as per the transaction's governing documents, as well as the stated balance of principal by the legal final maturity date. NPS PHARMA: Reports Errors in Financial Results Ended Dec. 31 ------------------------------------------------------------- The Audit Committee of the Board of Directors of NPS Pharmaceuticals, Inc., concluded, after consultation with management of the company and a review of the pertinent facts, that the previously reported financial statements contained in the company's Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2007, should not be relied upon due to an error in the computation of the cash sweep premium interest expense associated with the Secured 8.0% Notes due on March 30, 2017. The company detected this error during the course of the preparation and review of the company's Quarterly Report on Form 10-Q for the period ended March 31, 2008. As a result of this error, the company understated accrued interest expense and retained deficit and overstated income taxes payable on the Consolidated Balance Sheet as of Dec. 31, 2007. Also, as a result of the error, the company understated interest expense and overstated income tax expense on the Consolidated Statement of Operations for the year ended Dec. 31, 2007. The company is currently working on restating the financial statements that were included in its Form 10-K for the year ended Dec. 31, 2007, and will file an amendment on Form 10-K/A to include the restated financial statements and related disclosures once they are completed. The company expects the corrections to result in: i) an increase of $3.8 million in accrued expenses and interest expense; ii) a reduction of $0.1 million in income tax expense and income taxes payable; and iii) an increase in retained deficit of $3.7 million. The Audit Committee of the company's Board of Directors has discussed this matter with KPMG LLP, the company's independent registered public accounting firm. Based in Bedminster, New Jersey, NPS Pharmaceuticals Inc. (Nasdaq: NPSP) -- http://www.npsp.com/-- is developing specialty therapeutics company for gastrointestinal and endocrine disorders with high unmet medical need. The company is currently advancing two late-stage programs. Teduglutide, a proprietary analog of GLP-2, is in Phase 3 clinical development for intestinal failure associated with short bowel syndrome as GATTEX(TM) and in preclinical development for gastrointestinal mucositis and necrotizing enterocolitis. * * * NPS Pharmaceuticals Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $231.8 million in total assets and $419.8 million in total liabilities, resulting in a $188.0 million total shareholders' deficit. OMNOVA SOLUTIONS: S&P Holds 'B+' Rating; Revises Outlook to Neg. ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on OMNOVA Solutions Inc. to negative from stable. At the same time, S&P affirmed all of its ratings on the company, including the 'B+' corporate credit rating. "The outlook revision reflects the continued weaker-than-expected operating performance because of elevated raw material costs in fiscal 2007 and the first quarter of 2008," said Standard & Poor's credit analyst Henry Fukuchi. "These conditions have resulted in some weakening of the financial profile against the level we consider appropriate for the current ratings." The negative outlook also incorporates S&P's view that raw material cost escalation will continue to create a difficult operating environment, especially in light of weak economic conditions and a housing slowdown. S&P expect this trend to continue throughout the remainder of 2008 and the first half of 2009. In fiscal 2007, operating results were weak primarily due to the lag in price increases relative to raw material cost inflation. In particular, the performance chemicals segment experienced considerable margin compression because of the run-up in butadiene and styrene prices. The company also incurred higher costs for polyvinyl chloride, which it uses in decorative products. OMNOVA has taken steps to offset this pressure, implementing an aggressive price increase plan to mitigate further deterioration in margins, but the uncertainty of butadiene pricing in an environment of short supply remains a significant concern. S&P anticipate that OMNOVA's price increases will have their full impact on margin improvement during the third and fourth quarters of 2008, because of the timing necessary to implement the higher prices across various product lines. While S&P expect styrene prices to stabilize in 2008, butadiene remains a significant concern because tight supply will dictate higher pricing. S&P expect OMNOVA will take the necessary steps, including additional price increases, to mitigate further margin erosion and maintain its financial profile and current ratings. S&P could lower the ratings within the next few quarters if the expected improvement in operating results does not materialize, leading to further deterioration in the financial profile or liquidity position. Specifically, S&P expect OMNOVA to maintain a funds from operations to total adjusted debt ratio averaging 15% over a business cycle to maintain its current rating. Any further deviation from this level will put downward pressure on the current ratings. The ratings could also come under pressure if OMNOVA's position weakens materially in key end markets, such as paper, carpet, and upholstery manufacturing, or in the event of a large, debt-financed acquisition that stretches the financial profile beyond our expectations. Effective management of price increases relative to raw material price inflation coupled with continued cost reduction efforts could lead to a modest improvement of the financial profile and would add support for the current ratings. OPTIMUM INSURANCE: A.M. Best Lifts IC Rating to bb+ from bb- ------------------------------------------------------------ A.M. Best Co. has upgraded the financial strength rating to B(Fair) from B-(Fair) and issuer credit ratings to "bb+" from "bb-" of Optimum Insurance Company Inc, its wholly owned subsidiary, Optimum Farm Insurance Inc (both of Montreal, Canada) and Optimum West Insurance Company (Vancouver, Canada). Together these members are known as Optimum General Insurance Group. All ratings have a stable outlook. Concurrently, A.M. Best has withdrawn the ICR of "ccc+" of Optimum General Inc (Canada), a holding company that is no longer a publicly traded entity. These rating actions reflect A.M. Best's view that the group maintains adequate capitalization, having reported improved operating results and consistently favorable reserve development on both an accident and calendar year basis. Partially offsetting these positive factors are conditions derived from older years where below average underwriting results strained overall profitability, although the group has experienced substantial improvement during the latest five year period. The group's results continue to improve as evidenced by favorable underwriting and investment income as well as improved pure loss ratios. This is reflected in its 2007 full year performance, which generated a combined ratio of 95.4 and operating ratio of 89.0. The group has benefited from management's implementation of corrective actions to improve performance, tighten underwriting guidelines and improve rate adequacy. Indications are favorable as improved performance has been reported in several key financial measures including operating earnings, net underwriting income, net investment income and reserve development. Optimum Insurance Company writes commercial and personal lines insurance business mainly in Ontario and Quebec, while Optimum Farm Insurance Company writes similar lines exclusively in Quebec. Optimum West Insurance Company provides residential and automobile insurance to individuals and property and liability insurance to commercial clients in British Columbia, Alberta and the Yukon Territory. ORLEANS HOMEBUILDERS: Gets Temporary Waiver for Credit Facility --------------------------------------------------------------- Orleans Homebuilders Inc. received a limited waiver to its Amended and Restated Credit Agreement on May 9, 2008. The waiver letter temporarily waives certain covenants generally through and including Sept. 15, 2008, and it replaces them with modified covenants which generally exclude the effects of recording the valuation allowance. Based on the company's financial results for the quarter ended March 31, 2008, in particular the valuation allowance recorded for the deferred tax asset, the company determined it was in default of certain of its covenants contained in its senior secured revolving credit facility . Absent the deferred tax asset valuation allowance of $43.5 million, the company would have been in compliance with all of its financial covenants for the fiscal quarter ended March 31, 2008. As a result of this deferred tax asset valuation allowance in the current fiscal quarter, absent the executed waiver letter, the company would have been in violation of its minimum tangible net worth, maximum leverage, and maximum land to adjusted net worth covenants. The waiver letter waives these covenant defaults from the fiscal quarter ending March 31, 2008, through and including Sept. 15, 2008, unless another event of default occurs or the company fails to meet the revised minimum tangible net worth and leverage ratios set forth in the waiver letter for the Amended and Restated Credit Agreement. During the third quarter of fiscal 2008, Orleans reduced its outstanding bank debt by $13.0 million. As of March 31, 2008, over the past five quarters, since Jan. 1, 2007, Orleans has reduced its outstanding bank debt by approximately $106.0 million. The reduction in bank debt is the result of the company's operations, including land sale transactions and income tax refunds. Financial Results For quarter ended March 31, 2008, the company reported net loss of $55.7 million compared to net loss of $51.8 million for the same period in the previous year. For the nine months ended March 31, 2008, the company incurred net loss of $109.1 million compared with net loss of $55.5 million in 2007. At March 31, 2008, the company's balance sheet showed total assets of $791.4 million, total liabilities of $676.1 million and total shareholders' equity of $115.3 million. About Orleans Homebuilders Inc. Based in Bensalem, Pennsylvania, Orleans Homebuilders Inc. and its subsidiaries (ASE: OHB) -- http://www.orleanshomes.com/-- market, develop and build high-quality, single-family homes, townhomes and condominiums to serve various types of homebuyers, including first-time, first move-up, second move-up, luxury, empty nester and active adult. The company believes this broad range of home designs gives it flexibility to address economic and demographic trends within its markets. Defaults Under Amended Revolving Credit Loan As reported in the Troubled company Reporter on Feb. 8, 2007, Orleans Homebuilders has determined that it is in violation of a financial covenant under its Amended and Restated Revolving Credit Loan Agreement in the course of preparing its quarterly financial statements for the second quarter of 2007. The Loan Agreement was entered into by the company as guarantor, certain of the company 's wholly owned subsidiaries, and various banks as lenders, dated Jan. 24, 2006, and amended by a First Amendment on Nov. 1, 2006. The Loan Agreement required the company to maintain a certain "Debt Service Ratio", which is the ratio of the company 's "Adjusted EBITDA" to "Debt Service". As of Dec. 31, 2006, the company 's Debt Service Ratio was 1.61 to 1.00. The Revolving Credit Facility required a Debt Service Ratio of 2.00 to 1.00. As of Feb. 1, 2007, approximately $501,950,000 of borrowings and approximately $40,724,000 of letters of credit and other assurances were outstanding under the Revolving Credit Facility. PINE MOUNTAIN: Moody's Downgrades Ratings on Two Classes to Caa2 ---------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Pine Mountain CDO III Ltd.: Class Description: Up to $230,000,000 Class A-1 Floating Rate Notes Due July 7, 2047 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $20,000,000 Class A-2 Floating Rate Notes Due July 7, 2047 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Class Description: $90,000,000 Class A-3 Floating Rate Notes Due July 7, 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $41,250,000 Class A-4 Floating Rate Notes Due July 7, 2047 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Class Description: $45,000,000 Class B Floating Rate Notes Due July 7, 2047 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $22,500,000 Class C Deferrable Interest Floating Rate Notes Due July 7, 2047 -- Prior Rating: B2, on review for possible downgrade -- Current Rating: Ca Class Description: $25,000,000 Class D Deferrable Interest Floating Rate Notes Due July 7, 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Ca Class Description: $3,750,000 Class E Deferrable Interest Floating Rate Notes Due July 7, 2047 -- Prior Rating: B3, 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. PINNACLE FOODS: Debt Reduction Efforts Cue S&P's Positive Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Service revised its outlook on Pinnacle Foods Group LLC to positive from stable. At the same time, S&P affirmed its ratings on the company, including the 'B-' corporate credit rating. Mountain Lakes, New Jersey- based Pinnacle Foods had about $1.77 billion in reported debt outstanding as of Dec. 31, 2007. "The outlook revision reflects the company's recent debt reduction efforts as well as our expectations that management will continue to improve the company's financial profile," said Standard & Poor's credit analyst Christopher Johnson. Pinnacle repaid about $55 million in debt during fiscal 2007 following its acquisition by Blackstone Group L.P. in April 2007. In addition, the company has improved its margins by selectively taking price increases, reducing trade fees, and enhancing its operating efficiencies, which more than offset higher raw material, packaging, and energy costs. Moreover, S&P expect the company's credit ratios to continue to improve as it applies a significant portion of its free cash flows toward further debt reduction in 2008, despite elevated raw material, packaging, and energy costs. The ratings reflect Pinnacle's still high debt levels, and its participation in the highly competitive, although somewhat recession-resistant, packaged food industry. Pinnacle manufactures and markets a portfolio of branded foods, including Swanson frozen foods, Vlasic pickles and condiments, Duncan Hines baking mixes, Log Cabin and Mrs. Butterworth's table syrups, and Lender's bagels. The company also has positions in the frozen pancakes, waffles, and pizza categories. Competition is strong within the packaged food industry, and Pinnacle competes against larger and financially stronger competitors, including ConAgra Foods Inc. and Kraft Foods Inc., in its key frozen foods segments. Pinnacle's management has been working to revitalize its brands through product innovation and greater brand focus via promotional spending and advertising. The company plans to continue to improve operating margins with ongoing manufacturing and supply chain improvements in addition to further reductions in trade fees. Although top-line growth remains a challenge for many of Pinnacle's brands, the vast majority are still leaders in their product categories, with solid underlying consumer demand despite rising food costs. As such, S&P view Pinnacle's brand portfolio as somewhat recession resistant. S&P expect the company's credit measures to continue to improve as it applies free cash flow to debt reduction. In addition, S&P expect Pinnacle to sustain its improved operating performance in 2008 despite a weakening economic environment and the impact of higher commodity costs. S&P could consider raising the ratings if the company reduces leverage to closer to 7x and maintains operating margins in the 15% area. Alternatively, if operating performance declines or if the company demonstrates a more aggressive financial policy, we could revise the outlook to stable. POPE & TALBOT: Court Converts Case to Chapter 7 Liquidation ----------------------------------------------------------- Pope & Talbot Inc. and its debtor-affiliates obtained an order from the U.S. Bankruptcy Court for the District of Delaware, converting their Chapter 11 cases to a Chapter 7 liquidation proceeding. James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, asserted that the facts and circumstances of the Debtors' bankruptcy cases require conversion to Chapter 7. The final maturity date of the Debtors' postpetition secured financing facility was May 5, 2008. "The Debtors' postpetition lenders have been unwilling to further extend the DIP Facility but have authorized the use of cash collateral until Friday, May 9," Mr. O'Neill informed Judge Sontchi. "Without financing under the DIP Facility and the use of cash collateral, the Debtors do not have sufficient sources of working capital to continue operating their business." The Court directed the Debtors to timely file all applicable statements, schedules and reports, pursuant to Rule 1019 of the Federal Rules of Bankruptcy Procedure. The Court initially extended the time within which the Debtors have the exclusive right to file a Chapter 11 plan, through and including June 2, 2008, as reported in the Troubled Company Reporter on March 17, 2008. Roberta DeAngelis, Acting United States Trustee for Region 3, appointed George L. Miller as Interim Trustee/Trustee of the Debtors' estate. The U.S. Trustee has fixed the amount of Mr. Miller's bond, and gave Mr. Miller five days to accept or reject the case. Mr. Miller is authorized by the Court to operate the Debtors' businesses in accordance with Section 721 of the Bankruptcy Court, pending further Court order. About Pope & Talbot Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products business. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim. The company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada on Oct. 28, 2007. The Debtors' CCAA Stay expired on Jan. 16, 2008. The company and fourteen of its debtor-affiliates filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-11738). Shearman & Sterling LLP is the Debtor's bankruptcy counsel, while Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl & Jones L.L.P. represents the Debtors as bankruptcy co-counsel. The Official Committee of Unsecured Creditors selected Fried, Frank, Harris, Shriver & Jacobson LLP as its bankruptcy counsel. When the Debtors filed for bankruptcy, they listed total assets of $681,960,000 and total debts of $601,090,000. Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants Pope & Talbot Europe's application, it is expected it will be liquidated through the bankruptcy proceeding. (Pope & Talbot Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). POPE & TALBOT: PwC Requests Appointment as CCAA Receiver -------------------------------------------------------- PricewaterhouseCoopers Inc., monitor of the proceedings commenced by Pope & Talbot Ltd. and its subsidiaries under the Companies' Creditors Arrangement Act, asks the British Columbia Supreme Court to appoint it as Interim Receiver and Receiver without security of certain assets of the Applicants, Pursuant to Section 47(1) of the Bankruptcy and Insolvency Act, RS.C. 1985, c. B-3. As Receiver, PwC will: (1) take possession and control of the Applicants' property under the CCAA proceedings -- on terms satisfactory to the Receiver -- and any and all proceeds, receipts and disbursements arising out of or from the Property; (2) receive, preserve, protect and maintain control of the Property, including, but not limited to, changing of locks and security codes, relocating of Property to safeguard it, engaging of independent security personnel, the taking of physical inventories and placement of insurance coverage as may be necessary or desirable; (3) receive and collect all monies and accounts now owed or hereafter owing to the Applicants, and to exercise all remedies of the Applicants in collecting the monies, including, without limitation, to enforce any security held by any of the Applicants; (4) settle, extend or compromise any indebtedness owing to or by any of the Applicants; (5) execute, assign, issue and endorse documents of whatever nature in respect of any of the Property, whether in the Receiver's name or in the name and on behalf of any of the Applicants; (6) market any or all the Property, including advertising and soliciting offers in respect of the Property, and negotiating the terms and conditions of sale as the Receiver in its discretion may deem appropriate; (7) sell, convey, transfer, lease, assign or otherwise dispose of the Property or any part or parts out of the ordinary course of business: * without the approval of the Canadian Court in respect of any transaction not exceeding $1,500,000, provided that the aggregate consideration for all the transactions does not exceed $10,000,000; and * with the approval of the Canadian Court in respect of any transaction in which the purchase price or the aggregate purchase price exceeds $1,5,000,000; (8) enter into agreements with any trustee in bankruptcy appointed in respect of any of the Petitioners, whether in Canada or the United Sates, including, without limitation, the ability to enter into occupation agreements for any real property owned or leased by any of the Applicants in Canada or the United States; and (9) exercise any shareholder, partnership, joint venture or other rights which any of the Applicants may have. The Receiver will not be authorized to take possession or control of either the Mackenzie or Harmac pulp mills before obtaining (i) an indemnity agreement and release from the British Columbia Ministry of Environment, and (ii) agreements from the employees at the applicable pulp mills and the applicable unions in respect of the terms of employment of the employees. PwC also proposes that the Receiver will not take possession or control of any of the Property that is located in the United States, until the Receiver has: (a) entered into an agreement with any Chapter 11 Trustee; (b) obtained a Chapter 15 recognition of the receivership proceedings as "foreign main" proceedings granting the Receiver the authority to realize on any Property in the U.S.; and (c) in the case of the Halsey pulp mill, entered into agreements with the mill's employees and any appropriate governmental bodies. Mike Vermette of PwC has confirmed to The Vancouver Sun that he will be administering the business of Pope & Talbot as interim receiver. "We will try to sell the remaining mills, and see if we can fund a buyer in short order," the newspaper quoted Mr. Vermette. Mr. Vermette added that the MacKenzie and Harmac mills will be shut down until a buyer can be found, The Vancouver Sun relates. As Receiver, PwC contemplates terminating the employment of all persons employed by the Applicants in Canada. However, the Receiver will be authorized to engage the former employees of the Applicants -- on a term and task basis -- who have entered into letter agreements with the Receiver and, in the case of union employees, in respect of whom the applicable union has entered into an agreement with the Receiver. The Receiver will not make any payments or contribution to any pension plan maintained or formerly maintained by any of the Petitioners. A full-text copy of PwC's Receivership Request is available for free at http://ResearchArchives.com/t/s?2bd8 About Pope & Talbot Based in Portland, Oregon, Pope & Talbot Inc. (Other OTC: PTBT.PK) -- http://www.poptal.com/-- is a pulp and wood products business. Pope & Talbot was founded in 1849 and produces market pulp and softwood lumber at mills in the US and Canada. Markets for the company's products include the US, Europe, Canada, South America and the Pacific Rim. The company and its U.S. and Canadian subsidiaries applied for protection under the Companies' Creditors Arrangement Act of Canada on Oct. 28, 2007. The Debtors' CCAA Stay expired on Jan. 16, 2008. The company and fourteen of its debtor-affiliates filed for Chapter 11 protection on Nov. 19, 2007 (Bankr. D. Del. Lead Case No. 07-11738). Shearman & Sterling LLP is the Debtor's bankruptcy counsel, while Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl & Jones L.L.P. represents the Debtors as bankruptcy co-counsel. The Official Committee of Unsecured Creditors selected Fried, Frank, Harris, Shriver & Jacobson LLP as its bankruptcy counsel. When the Debtors filed for bankruptcy, they listed total assets of $681,960,000 and total debts of $601,090,000. Pope & Talbot Pulp Sales Europe, LLC, a subsidiary, on Nov. 21, 2007, filed an application for relief under Belgian bankruptcy laws in the commercial court in Brussels. If the Belgian court grants Pope & Talbot Europe's application, it is expected it will be liquidated through the bankruptcy proceeding. (Pope & Talbot Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * The Court extended the time within which the Debtors have the exclusive right to file a Chapter 11 plan, through and including June 2, 2008, as reported in the Troubled Company Reporter on March 17, 2008. PRC LLC: Committee Can Employ Halperin Battaglia as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in PRC LLC and its debtor-affiliates' Chapter 11 cases obtained authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Halperin Battaglia Raicht, LLP, as its special conflicts counsel nunc pro tunc to March 26, 2008. According to Andrew B. Eckstein, Esq., at Blank Rome LLP, in New York, the Committee has selected HBR because of its experience and expertise in the field of creditors' and debtors' rights and business reorganizations under the Bankruptcy Code. HBR has been involved in numerous Chapter 11 cases throughout the United States, and has acted as conflicts counsel to committees in other significant Chapter 11 cases. The Committee sought to retain HBR to address matters as to which its primary counsel, Blank Rome, may have conflicts. As of April 9, 2008, Blank Rome has identified potential conflicts related to Royal Bank of Scotland, the Debtors' prepetition lenders, and the Verizon companies. HBR agreed to represent the interest of the Committee, except with respect to The CIT Group, which it has in the past and may in the future represent in matters not related to the Debtors and the Committee. The services of HBR's professionals will be paid according to the firm's standard hourly rates: Professional Hourly Rate ------------ ----------- Attorneys $175 - $435 Clerks $125 Paraprofessionals $75 - $100 HBR's actual and necessary expenses related to the contemplated services will also be reimbursed. Alan D. Halperin, a member of Halperin Battaglia Raicht, in New York, assured the Court that his firm does not represent nor hold interest adverse to the Committee, the Debtors, their creditors or any party-in-interest in matters for which the firm will be retained. He maintained that HBR is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. (PRC LLC Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROSPECT MEDICAL: Continues Covenant Waiver Talks with Lenders -------------------------------------------------------------- Prospect Medical Holdings, Inc. has substantially completed the work necessary to file its Form 10-K for the fiscal year ended September 30, 2007, and Form 10-Q for the fiscal quarter ended December 31, 2007. The Company anticipates filing both of these documents with the U.S. Securities and Exchange Commission by the end of May 2008, once the matters pertaining to the Company's lenders and independent auditors have been concluded. Discussions remain ongoing between the Company and its lenders with respect to covenant waivers and other amendments to the credit agreements. Agreed upon amendments to the credit agreements are required prior to the issuance of the Forms 10-K and 10-Q. Although no assurance can be given, the Company believes that the amendments will be completed by the middle of May, followed by final review of the completed credit agreement amendments by Prospect's independent auditors and, thereafter, filing of the 10-K and 10-Q. Assuming completion of the lender and independent auditor processes, Prospect expects to file its fiscal 2007 Form 10-K and its fiscal 2008 first quarter Form 10-Q by the end of May 2008, and its fiscal 2008 second quarter Form 10-Q by mid-June 2008. At that point, Prospect believes it will be compliant with the continued listing requirements of the AMEX and will qualify for its common stock to resume trading, as further discussed below. The Company and its lenders have agreed to revised forbearance agreements that extend the forbearance period through May 14, 2008. There was no additional cost to Prospect in connection with these latest extensions. If the credit agreement amendments have been satisfactorily completed by this date, no additional forbearance agreement extension will be necessary. If not, the Company expects that it and its lenders will negotiate another extension, or the Company will be in default under its existing credit agreements. In connection with the Company's revised time table, Prospect submitted a letter to the AMEX dated May 2, 2008, requesting that the AMEX extend until June 16, 2008, the deadline for Prospect to complete its late SEC filings and thereby regain compliance with the exchange's continued listing requirements. Prospect previously submitted a letter to the AMEX on February 28, 2008 setting forth the Company's Plan for regaining compliance with the exchange's continued listing requirements, including filing the Alta Healthcare System, Inc. 8-K/A, which was filed on April 1, 2008, and filing Prospect's fiscal 2007 Form 10-K and fiscal 2008 first quarter Form 10-Q not later than April 28, 2008. The AMEX is currently evaluating the Company's Plan. Assuming acceptance of the Plan by the AMEX, and Prospect's timely filing of all indicated SEC filings, the AMEX will consider restoring trading in Prospect's common stock. Prospect Medical Holdings, Inc. -- (AMEX: PZZ) -- operates four community-based hospitals in the greater Los Angeles area and manages the medical care of roughly 240,000 individuals enrolled in HMO plans in Southern California, through a network of more than 9,000 specialist and primary care physicians. On the Net: http://www.prospectmedical.com/ PRIMEDIA INC: March 31 Balance Sheet Upside-Down by $136.8 Million ------------------------------------------------------------------ PRIMEDIA Inc. reported on Thursday results for the first quarter ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $251.3 million in total assets and $388.1 million in total liabilities, resulting in a $136.8 million total stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $56.8 million in total current assets available to pay $62.4 million in total current liabilities. The company reported net income of $13.6 million for the quarter ended March 31, 2008, a decrease of $91.1 million as compared to net income of $104.7 million for the same period in 2007. The decrease in net income was primarily due to a $43.5 million gain on the sale of businesses, net of tax and a tax benefit of $61.0 million related to the Enthusiast Media discontinued operation, both recorded in 2007, partially offset by a reduction of $24.0 million in interest expense from the company's lower debt level. Total net revenue increased 0.8% to $77.5 million as compared to $76.9 million during the three months ended March 31, 2007, reflecting 2.5% growth in Apartments revenue and a 1.1% increase in DistribuTech revenue, partially offset by a 6.6% decline in New Homes revenue. Total Adjusted EBITDA declined 9.4% to $12.9 million versus $14.2 million during the comparable period last year due to several factors, including: -- $1.3 million of fees and expenses for an ongoing litigation matter, which are expected to be offset by an insurance recovery for the same matter in the second quarter; and -- Higher distribution costs as a result of the company's 2007 expansion of its retail distribution network and an increase in bad debt expense related to former customers of DistribuTech and New Homes; partially offset by: -- Higher revenue and a reduction in headcount and professional fees as part of the headquarters transition. Operating income declined 5.3% year-over-year to $8.3 million as compared to $8.7 million in 2007 due the same factors that affected the company's Adjusted EBITDA, as well as higher depreciation costs due to investments in internal-use software placed in service, partially offset by lower non-cash compensation expense and restructuring costs. Management's Comments "In the first quarter, we were pleased to see our largest business, Apartment Guide and ApartmentGuide.com, deliver its third consecutive quarter of year-over-year revenue growth," said Dean Nelson, chairman and interim chief executive officer of PRIMEDIA. "However, as we expected, the challenging environment in the residential housing sector impacted New Homes and some of our DistribuTech customers, a situation we anticipate will continue for the remainder of the year. "As we previously announced, we are quite enthusiastic that Charles Stubbs will be joining PRIMEDIA as its new chief executive officer later this month. Charles has a strong track record in generating value through the combination of businesses that integrate traditional and online media, like Consumer Source. We are confident that Charles will be able to strengthen our position as the premier print and online resource to advertise apartment and other rentals, as well as new homes, in key markets across the country." Free Cash Flow Free Cash Flow was negative $19.6 million in the first quarter 2008 compared to negative $2.4 million in the first quarter 2007. The decrease was primarily due to the absence of cash flow from businesses divested after the first quarter of 2007 and post- Enthusiast Media sale obligations. Liquidity As of March 31, 2008, the company's cash and cash equivalent balance declined to $7.2 million versus $66.8 million as of March 31, 2007, due to the proceeds remaining from the sale of the Outdoor Group, which is part of the Enthusiast Media segment. The company had debt, net of cash, of $244.9 million at March 31, 2008, compared to net debt of $1.3 billion at March 31, 2007. The company had approximately $91.8 million of unused bank commitments available at March 31, 2008. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2bd3 About Primedia Inc. Headquartered in Atlanta, PRIMEDIA Inc.(NYSE: PRM) -- http://www.primedia.com/-- through its Consumer Source Inc. operation, is an integrated media business that provides advertising supported print and online consumer guides for the apartment and new home industries. Consumer Source publishes and distributes more than 38 million guides – such as Apartment Guide and New Home Guide – to approximately 60,000 U.S. locations each year through its proprietary distribution network, DistribuTech. The company also distributes category-specific content on its leading websites, including ApartmentGuide.com, NewHomeGuide.com and Rentals.com, a comprehensive single unit real estate rental site. PRIMEDIA INC: Taps Barber as Chief Accounting Officer, Treasurer ---------------------------------------------------------------- J. Michael Barber was appointed senior vice president, chief accounting officer and treasurer of Primedia Inc., effective May 1, 2008, replacing Robert J. Sforzo in his capacity as chief accounting officer and Carl F. Salas in his capacity as treasurer. In addition, the company has been engaged in transitioning its headquarters from New York to Atlanta and, in connection therewith, anticipates that Messrs. Sforzo and Salas will separate from employment with the company on May 31, 2008. Prior to joining the company in October 2007, Mr. Barber served as executive vice president and chief accounting officer of HomeBanc Corp. from September 2004 through October 2007. From 2001 to August 2004, he served as senior vice president and manager of Accounting Policy and Reporting with Union Planters Corp., a bank holding company. From 1987 to 2001, Mr. Barber worked with PricewaterhouseCoopers LLP, where he was a senior manager in that organization's banking practice. Mr. Barber is a certified public accountant. The company has entered into a severance arrangement with Mr. Barber. Under the Agreement, if Mr. Barber's employment is terminated by the company without cause, Mr. Barber will receive as severance an aggregate amount equal to twelve months' base salary at the rate being paid on the date his employment is terminated, payable in equal bi-weekly installments on regularly scheduled payroll dates, less applicable withholding. Under the Agreement, no severance is payable upon a voluntary resignation or upon termination of employment for cause. Any severance payable under the Agreement is subject to compliance with Section 409A of the Internal Revenue Code of 1986, as amended. Headquartered in New York City, PRIMEDIA Inc. (NYSE: PRM) -- http://www.primedia.com/-- is the parent company of Consumer Source Inc., a publisher and distributor of free consumer guides in the U.S. with Apartment Guide, Auto Guide, and New Home Guide, distributing free consumer publications through its proprietary distribution network, DistribuTech, in more than 60,000 locations. * * * The company's 8% Senior Notes due 2013 carry Moody's Investors Service's B2 rating. PRECISION PRODUCTS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Precision Products of Tennessee, Inc. 724 Central Avenue, West Springfield, TN 37172 Bankruptcy Case No.: 08-03656 Type of Business: The Debtor manufactures dies and tools. Chapter 11 Petition Date: April 30, 2008 Court: Middle District of Tennessee (Nashville) Judge: Marian F. Harrison Debtor's Counsel: Linda W. Knight, Esq. Gullett Sanford Robinson & Martin P.O. BOX 198888 Nashville, TN 37219 Tel: (615) 244-4994 Fax: (615) 256-6339 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Vista Metals, Inc. Trade debt $86,346 P.O. Box 951659 Cleveland, OH 44193 Basic Carbide Corporation Trade debt $42,440 P.O. Box 228 Lowber, PA 15660 Wells Fargo Business Unsecured note $30,000 Direct Division converted from MAC U1851-014 credit card P. O. Box 7666 balance Boise, ID 83707-1666 Bluegrass Industrial Sales Co. Trade debt $25,746 Motion Industries Trade debt $25,175 Bohler Uddeholm Corporation Trade debt $20,850 Dynamic Ceramic Ltd. Trade debt $20,145 Bank of America Credit Card $14,328 Saint-Gobain Advanced Ceramics Trade debt $13,141 J & L Industrial Supply Trade debt $10,535 Roger Korte Trade debt $10,488 Advantage Tool Steel Trade debt $9,500 Springfield Dept. of Utilities Water, Gas, $8,677 Electricity Atlanta Precision Spindles, LLC Trade debt $8,657 U.S. Diamond Wheel Trade debt $6,944 Technology Sales Co., Inc. Trade debt $6,419 Porter-Walker Trade debt $5,416 J & J Machine & Tool Ind. Co. Trade debt $4,060 Methods Machine Tools, Inc. Trade debt $3,340 Kentametal, Inc. Trade debt $3,035 QCA HEALTH: A.M. Best Affirms 'bb+' Issuer Credit Rating -------------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of B(Good) and issuer credit rating of "bb+" of QCA Health Plans, Inc. The outlook for both ratings has been revised to positive from stable. The revised rating outlook reflects strong capitalization, consistent operating margins and reorganization of management functions that have led to significant cost savings for the health plan. QCA has continued to improve its risk-based capital. Conversion of surplus notes and interest to preferred stock in 2006, along with stable underwriting and investment returns have driven improved capitalization according to Best's Capital Adequacy Ratio. QCA finished 2007 with a strong operating margin consistent with prior years, despite a decline in membership. Earnings improvement also is due to the restructuring of management functions, which has led to administrative cost savings in excess of $2 million in 2007. QCA experienced another year of declining membership in 2007, adding pressure to premium growth; however, QCA is forecasting aggressive growth for 2008. A.M. Best is concerned with the risks associated with this growth, including double digit increases in medical and administrative costs, which could put additional pressure on margins over the medium term despite QCA's forecasted margin improvements. REFCO INC: Refco Commodity Management Files Liquidation Plan ------------------------------------------------------------ On May 9, 2008, Refco Commodity Management, Inc., delivered to the U.S. Bankruptcy Court for the Southern District of New York its Chapter 11 Plan of Liquidation. The RCMI Plan does not require the solicitation of votes from claimants, as the claims against it have been resolved pursuant to the terms of the already effective Chapter 11 Plan of Refco, Inc. RCMI is a wholly-owned subsidiary of Westminster-Refco Management, LLC, an indirect, wholly-owned subsidiary of Refco, Inc. RCMI, formerly known as CIS Investments, Inc., currently has no ongoing business operations and no employees, and does not lease or own real property. Its assets include cash on hand as of the RCMI Petition Date on October 16, 2006, and $4,300,000 cash received from the liquidation of its assets. It owns no other property and holds no other interests. RCMI was a commodity pool operator, registered with the the Commodity Futures Trading Commission under the Commodity Exchange Act, and was a member of the National Futures Association. RCMI's primary businesses as of the Petition Date were serving as the managing owner of the JWH Global Trust. It was also co- general partner of two public commodity pools, IDS Managed Futures, L.P. and IDS Managed Futures II, L.P., along with IDS Futures Corporation. After the Petition Date, RCMI reviewed and analyzed, among other things, (a) RCMI's equitable and financial interests in the Trust and the IDS Pools, (b) RCMI's rights, duties and obligations in connection with the Trust and the IDS Pools, (c) the potential outcomes in the Debtors' Chapter 11 cases, and (d) the best interests of the unit holders, the limited partners, the Trust, and the IDS Pools. RCMI determined it is its best interests to sell its interests in the Trust and the IDS Pools, and assign its duties and obligations as Managing Owner and as co-general partner, to a qualified third party. On October 12, 2006, RCMI, R.J. O'Brien & Associates and R.J. O'Brien Fund Management, Inc. entered into an Asset Purchase Agreement providing for the purchase of RCMI's interest as Managing Owner of the Trust. RCMI received approximately $2,520,964 in cash at the closing of the sale. After the sale was consummated, RCMI redeemed its remaining Units in the Trust and received approximately $416,510 as a result of the redemption. RCMI continues to hold interests in the IDS Pools, and currently holds 358.70 units in IDS I and 54.35 units in IDS II. The IDS Pools maintain a cash reserve with respect to the general partner units and are holding approximately $109,726 and $27,674 in cash with respect to RCMI's units IDS I and IDS II. RCMI previously acknowledged that it owed IDS I approximately $19,137 with respect to a redemption error made by RCMI in its capacity as general partner of IDS I. RCMI Plan Provisions On the effective date of RCMI's Plan, (a) RCMI will be merged with and into Refco Inc., with Refco Inc. as the surviving entity, and (b) RCMI's Chapter 11 Case will be closed. RCMI's Plan is based in large part on specific provisions set forth in the Modified Joint Chapter 11 Plan of Refco Inc. and Certain of its Direct and Indirect Subsidiaries, confirmed by the Court on December 15, 2006. There are four creditors that asserted five claims against RCMI. One creditor holds an Allowed Impaired Claim under the Refco Plan against RCM and has already received a Distribution under the Refco Plan with respect to the claim, and another creditor has settled and waived its claims in the Prior Debtors' and RCMI's Chapter 11 cases. The other two creditors do not have direct claims against RCMI, but have asserted: (a) direct claims against the Prior Debtors, which claims are subject to pending claims objections filed by the Prior Debtors, and (b) indirect claims against RCMI to the extent that RCMI could be jointly and severally liable for the direct claims asserted against the Prior Debtors. If any direct claim is ultimately allowed, however, the creditor holding that claim would receive a Distribution under the Refco Plan with respect to an Impaired Claim under the Refco Plan against the Prior Debtors. Accordingly, pursuant to the Refco Plan, each of the claims currently asserted against RCMI -- excluding the settled and waived claims -- either already is or would be deemed to be subordinated to all other claims against or equity interests in RCMI on the Contributing Non-Debtor Affiliate Trigger Date for RCMI. Moreover, all currently asserted claims could be deemed to be released pursuant to the Refco Plan on the Contributing Non-Debtor Affiliate Trigger Date for RCMI if the RCM Trustee, with the consent of the Plan Committee, deems any subordination to be a release. The RCM Plan Administrator has advised RCMI that, if the Bankruptcy Court approves the Disclosure Statement, the Plan Committee has previously consented and the RCM Plan Administrator would designate the Contributing Non-Debtor Affiliate Trigger Date for RCMI to be the Effective Date of the Plan and, to the extent necessary to ensure that RCMI winds up its affairs and distribute its remaining property to Reorganized Refco, deem the subordination of the claims currently asserted against RCMI to be a release of the claims. Classification and Treatment of Claims Robert I. Shapiro, RCMI's president, sole officer and director, relates that the RCMI Plan provides for the classification and treatment of claims and interests against RCMI: Estimated Estimated Class Amount Treatment Recovery ----- --------- --------- --------- Administrative Claims $0 Unimpaired 100% Priority Tax Claims $0 Unimpaired 100% Class 1 $0 Unimpaired 100% Non-Tax Priority Claims Class 2 $0 Unimpaired 100% Secured Claims Class 3 $0 Unimpaired 100% General Unsecured Claims Class 4 $4,300,000 Unimpaired 100% Old Equity Interests Class 5 $0 Unimpaired 0% Subordinated Claims On the Effective Date, each Holder of an Allowed Class 4 Old Equity Interest will receive its Pro Rata share of the Remaining Equity Distribution, in final satisfaction of that interest. Holders of Class 5 Subordinated Claim will not be entitled to any property or interest on account of their claims. On the Effective Date, all Subordinated Claims will be expunged. RCMI believes that there are no Allowed Administrative Claims, Allowed Priority Tax Claims, Allowed Non-Tax Priority Claims, Allowed Secured Claims, and Allowed General Unsecured Claims in their Chapter 11 cases. However, on the Effective Date, each holder of those claims, if any, will receive cash equal to the unpaid portion of their claims. No Solicitation and Presumed Acceptances RCMI is not soliciting acceptances of the Plan from any Holders of Claims or Interests because there are no Impaired classes of Claims or Interests in the Plan. All Classes of Claims and Interests are all Unimpaired by the Plan and, pursuant to Section 1126(f) of the Bankruptcy Code, are presumed to have accepted the Plan. Specifically, although the Holders of Class 5 Subordinated Claims will not receive any Distribution under the Plan, their treatment is dictated by the Refco Plan. Accordingly, the Holders of Class 5 Subordinated Claims are not Impaired by the Plan, and no solicitation of votes to accept or reject the Plan is necessary under the circumstances. Motion to Approve Disclosure Statement RCMI asks the Court to consider adequacy of the Disclosure Statement accompanying the Plan. Mr. Shapiro submits that the Disclosure Statement is extensive and comprehensive. It contains descriptions and summaries of: (a) the Plan, (b) key events preceding RCMI's Chapter 11 cases, (c) claims asserted against RCMI's estate, (d) risk factors affecting the Plan, (e) a liquidation analysis regarding returns under Chapter 7, (f) financial information relevant to the Plan, and (g) federal tax law consequences of the Plan. In addition, the Disclosure Statement was the subject of review and comment by counsel for the Refco Plan Administrator and the Plan Administrator for Refco Capital Markets, Ltd., and was revised in response to their comments. Accordingly, RCMI submits that the Disclosure Statement contains adequate information within the meaning of Section 1125, and should be approved. A full-text copy of RCMI's Plan of Liquidation is available at no charge at: http://bankrupt.com/misc/RCMILiquidationPlan.pdf A full-text copy of the Disclosure Statement to RCMI's Plan of Liquidation is available at no charge at: http://bankrupt.com/misc/RCMILiquidationPlanDS.pdf About Refco Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. (Refco Bankruptcy News, Issue No. 81, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: June 12 Confirmation Hearing on Refco Commodity Plan --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will hold a combined hearing on June 12, 2008, at 10:00 a.m., to consider the approval of the disclosure statement and the confirmation of the Chapter 11 Plan of Liquidation of Refco Commodity Management, Inc. Objections to the approval of the Disclosure Statement and the confirmation of the Plan, are due on June 7, 2008, at 4:00 p.m. Refco Commodity Management filed a Plan of Liquidation on May 9, 2008. The RCMI Plan does not require the solicitation of votes from claimants, as the claims against it have been resolved pursuant to the terms of the already effective Chapter 11 Plan of Refco, Inc. RCMI is a wholly-owned subsidiary of Westminster-Refco Management, LLC, an indirect, wholly-owned subsidiary of Refco, Inc. RCMI, formerly known as CIS Investments, Inc., currently has no ongoing business operations and no employees, and does not lease or own real property. Its assets include cash on hand as of the RCMI Petition Date on October 16, 2006, and $4,300,000 cash received from the liquidation of its assets. It owns no other property and holds no other interests. RCMI was a commodity pool operator, registered with the the Commodity Futures Trading Commission under the Commodity Exchange Act, and was a member of the National Futures Association. RCMI's primary businesses as of the Petition Date were serving as the managing owner of the JWH Global Trust. It was also co- general partner of two public commodity pools, IDS Managed Futures, L.P. and IDS Managed Futures II, L.P., along with IDS Futures Corporation. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. (Refco Bankruptcy News, Issue No. 81, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: RCMI to Assign Partnership Stake to IDS Futures ---------------------------------------------------------- The Chapter 11 Plan of Liquidation of Refco Commodity Management, Inc., incorporates a settlement agreement dated April 25, 2008, among IDS Managed Futures, L.P., IDS Managed Futures II, L.P., IDS Futures Corporation, Ameriprise Financial Services, Inc., and Refco Commodity Management, Inc. IDS Managed Futures, L.P. and IDS Managed Futures II, L.P., are Delaware limited partnerships formed to trade a wide range of U.S. and international futures and forward contracts and related options pursuant to the trading instructions of professional trading advisors. IDS Futures Corporation and RCMI acted as co-general partners of the IDS Partnerships through December 31, 2006, pursuant to certain partnership agreements. In their capacities as co- general partners, IDS Futures and RCMI managed and controlled all aspects of the business of the Partnerships under and pursuant to the terms of the Act and the Partnership Agreements. As a result of the Refco, Inc., et al., bankruptcy cases, on June 1, 2006, Gary L. Franzen, as trustee of the Gary L. Franzen Declaration of Trust, individually and on behalf of a putative class that included the Partnerships' limited partners, filed a complaint against IDS Futures and RCMI, as general partners, in the United States District Court for the Northern District of Illinois, Eastern Division, as amended on September 15, 2006. RCMI's bankruptcy petition on October 16, 2006 constituted a notice of withdrawal as a general partner of the Partnerships. As part of its bankruptcy case, RCMI sold and assigned substantially all of its assets to R.J. O'Brien Fund Management, Inc. The Partnership Agreements do not prescribe a process for winding down the activities of the Partnerships. Accordingly, on Sept. 27, 2006, IDS Futures filed applications for dissolution of the Partnerships, as amended and supplemented on Jan. 26, 2007, in the Court of Chancery of the State of Delaware in and for New Castle County. Pursuant to the Applications, IDS Futures sought an order and direction from the Court of Chancery to dissolve the Partnerships and to distribute the Partnerships' remaining assets for the benefit of its partners. Prior to the hearing on the Applications, and as an accommodation to its clients and to resolve the Franzen Litigation, Ameriprise Financial Services, Inc., the Partnerships' selling agent and introducing broker and an affiliate of IDS Futures, offered to purchase the remaining interests of limited partners in the Partnerships. Notwithstanding the fact that the Partnerships will not recover full payment from the Refco Debtors, the net asset value paid by Ameriprise Financial pursuant to the Ameriprise Purchase Offer assumed a 100% recovery from the Refco Debtors. The Court of Chancery approved the Applications on Feb. 20, 2007. Pursuant to the Orders, the Court of Chancery approved the Ameriprise Purchase Offer, and authorized and instructed IDS Futures to continue to act as sole general partner for the purpose of winding down the Partnerships' affairs. The Orders deem the Partnerships dissolved, effective as of Dec. 31, 2006. In March 2007, Ameriprise Financial began purchasing the remaining interests of limited partners pursuant to the Ameriprise Purchase Offer. A significant portion of the limited partners participated in the Ameriprise Purchase Offer, effectively resolving the Franzen Litigation and any alleged claims the Partnerships or their limited partners may have had as a result of the Refco Bankruptcy Cases, and settling the action as against IDS Futures. On November 13, 2007, IDS Futures filed final applications in the Court of Chancery. Pursuant to the Final Applications, IDS Futures sought an order and direction from the Court of Chancery to cancel the Partnerships' certificates of limited partnership and for certain other relief to complete the wind up process. The Court of Chancery approved the Final Applications on Dec. 4, 2007, under which Ameriprise Financial was authorized to pay the remaining, non-participating limited partners the purchase price under the Ameriprise Purchase Offer. Absent payment by Ameriprise Financial, the remaining limited partners would have received their pro rata share of the Partnerships' remaining net assets, which recovery would have been less than they received from Ameriprise Financial. RCMI continues to hold an interest in each of the Partnerships. These interests, which were not purchased by Ameriprise Financial pursuant to the Ameriprise Purchase Offer, are currently being held in a reserve account. Pursuant to the Final Orders, the Chancery Court authorized IDS Futures to withhold RCMI's interest in the General Partner Reserve until the Partnerships' and IDS Futures' claims against RCMI were resolved. The U.S. Bankruptcy Court for the Southern District of New York established May 11, 2007, as the deadline for creditors to file proofs of claim in RCMI's bankruptcy case. The deadline was extended by agreement of the Parties pending settlement discussions. None of the Partnerships, IDS Futures or Ameriprise Financial have filed proofs of claim against RCMI, but such parties assert that they would have filed proofs of claims against RCMI absent the settlement of claims set forth in this Agreement. The claims would have included, without limitation, claims for reimbursement as a result of a redemption error made by RCMI and for contribution in connection with the Ameriprise Purchase Offer. In recognition of the time and expense associated with resolving any claims or interests by and among themselves, the Parties have reached an agreement to settle their mutual claims or interests. Pursuant to the Settlement Agreement, the parties agree that: 1. In full and final settlement of any claims of the Partnerships, IDS Futures or Ameriprise Financial against RCMI, RCMI agrees to assign to IDS Futures all of its right, title and interest in and to the Partnerships, including, without limitation, those interests of RCMI currently held in the General Partner Reserve. 2. The Agreement will be subject to Bankruptcy Court approval and will not be effective until the date upon which the Bankruptcy Court enters an order approving the Agreement. 3. Within 30 days of the Agreement Effective Date, IDS Futures will pay $10,000 from the General Partner Reserve to RCMI, which payment will be in full and final satisfaction of RCMI's interest in the General Partner Reserve and its investment in the Partnerships. 4. Effective as of the Agreement Effective Date, (a) IDS Futures, Ameriprise Financial and the Partnerships and (b) RCMI, on behalf of itself and its estate, release and discharge each other from any and all claims and liabilities arising from or related to the Partnerships. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity Management, Inc., filed its Chapter 11 Plan of Liquidation on May 9, 2008. The Court will hold a combined hearing on June 12, 2008, at 10:00 a.m., to consider the approval of the disclosure statement and the confirmation of the Plan. The RCMI Plan does not require the solicitation of votes from claimants, as the claims against it have been resolved pursuant to the terms of the already effective Chapter 11 Plan of Refco, Inc. (Refco Bankruptcy News, Issue No. 81, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Credit Suisse et al. Also Want Classified Documents -------------------------------------------------------------- Several financial institutions join the request of Thomas H. Lee Partners L.P., Grant Thornton LLP, and Mayer Brown LLP, to the extent that they seek to obtain access to documents and transcripts that have been made available to Litigation Trustee, and that have been withheld by reason of the Protective Order. The financial institutions are: -- Credit Suisse Securities (USA) LLC, -- Banc of America Securities LLC, -- Deutsche Bank Securities Inc., -- Goldman, Sachs & Co., -- Merrill Lynch, Pierce, Fenner & Smith Incorporated, -- J.P. Morgan Securities Inc., -- Sandler O'Neill & Partners, L.P., -- HSBC Securities (USA) Inc., -- William Blair & Company, L.L.C., -- BMO Capital Markets Corp., -- CMG Institutional Trading LLC, -- Samuel A. Ramirez & Company, Inc., -- Muriel Siebert & Co., Inc., -- The Williams Capital Group, L.P., and -- Utendahl Capital Partners, L.P. Philip D. Anker, Esq., at Wilmer Cutler Pickering Hale and Dorr LLP, in New York, tells the U.S. Bankruptcy Court for the Southern District of New York that the documents should be made available to the Underwriters in connection with the pending litigation styled In re: Refco Securities Litigation, 07 MDL 1902 (S.D.N.Y) (Lynch, J.), and subject to the terms of the Confidentiality Order. Dennis A. Klejna also supports T.H. Lee, et al.'s motion, for the same reasons stated by the Underwriters. As reported by the Troubled Company Reporter on May 9, Thomas H. Lee Partners L.P., Grant Thornton LLP, and Mayer Brown LLP seek access to documents and transcripts that have been made available to Marc S. Kirschner, the Trustee for the Litigation Trust and Private Actions Trust of Refco, Inc., and its affiliates and subsidiaries. T.H. Lee, et al., asked the Bankruptcy Court for relief from the first amended protective order governing the production and use of confidential material, dated March 19, 2007. T.H. Lee, et al., are parties to several litigations commenced by the Litigation Trustee, that are presently pending before the Judge Gerard E. Lynch in the United States District Court for the Southern District of New York. BAWAG's Objects Bank fur Arbeit und Wirtschaft und Osterreichische Postsparkasse Aktiengesellschaf objects to the motion of T.H. Lee, et al., stating that there is no compelling need or extraordinary circumstance supporting the request. Furthermore, the Motion is all the more problematic to the extent that it implicates Austrian Bank Secrecy laws, potentially exposing BAWAG, a non- party, to severe prejudice. Nicolle L. Jacoby, Esq., at Dechert LP, in New York, maintains that BAWAG has reasonably relied on the Protective Order in producing materials to Refco's estate fiduciaries. The entry of the Protective Order was a necessary condition to BAWAG's production. The Protective Order provides that BAWAG's documents will be returned or destroyed upon final resolution of the Debtors' cases. BAWAG believed that the materials that it produced will be in accordance with the explicit terms of the Protective Order, which provides that all confidential materials will be used only by the Committee and the Litigation Trustee. The Protective Order does not provide for the wholesale production of all those documents to defendants in the related actions, Ms. Jacoby insists. Furthermore, BAWAG obtained waivers of Austrian Bank Secrecy laws from the Debtors and their non-Debtor affiliates, in connection with its prior production of documents, but those waivers arguably do not extend to any further dissemination of its documents to third parties, regardless of whether those third parties agree to be bound by the Protective Order. Ms. Jacoby states that T.H. Lee, et al., are required to show a compelling need or extraordinary circumstance for the documents, on the particular terms that they propose. At a minimum, they should be required to submit a more specific request to the Litigation Trustee, and BAWAG should have the opportunity to review those requests, and make objections if appropriate, he asserts. McDermott Will & Emery LLP joins BAWAG's opposition and asks the Court to deny T.H. Lee, et al.'s request. About Refco Inc. Based in New York, Refco Inc. -- http://www.refco.com/-- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The Company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its direct and indirect subsidiaries, including Refco Capital Markets Ltd. and Refco F/X Associates LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. Refco Commodity Management, Inc., filed its Chapter 11 Plan of Liquidation on May 9, 2008. The Court will hold a combined hearing on June 12, 2008, at 10:00 a.m., to consider the approval of the disclosure statement and the confirmation of the Plan. The RCMI Plan does not require the solicitation of votes from claimants, as the claims against it have been resolved pursuant to the terms of the already effective Chapter 11 Plan of Refco, Inc. (Refco Bankruptcy News, Issue No. 81, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) RH DONNELLEY: Unit Launches Exchange Offers to Refinance Sr. Notes ------------------------------------------------------------------ R.H. Donnelley Inc., a wholly owned subsidiary of R.H. Donnelley Corporation, has commenced concurrent exchange offers to refinance a portion of its parent's outstanding senior notes. The exchange offers will expire at 12:00 midnight, New York City time, on June 6, 2008, unless such deadline is extended by RHDI. In order to be eligible to receive the total exchange amount, holders of Old Notes must tender their Old Notes prior to 5:00 p.m., New York City time, on May 21, 2008, unless such deadline is extended by RHDI. RHDI is offering to exchange up to the maximum amount of the applicable Old Notes in exchange for 11.75% Senior Notes due May 15, 2015 of RHDI. The New Notes will be senior unsecured obligations of RHDI and will be fully and unconditionally guaranteed by the Company and each of RHDI's subsidiaries on a general, senior unsecured basis. Holders of Old Notes whose tenders are accepted by RHDI will receive, subject to proration, the applicable exchange amount: Principal Amount of New Notes for Each $1,000 Principal Amount of Applicable Old Notes Maximum Title of Amount Outstanding Offered Notes of the Principal Early Total for Company to be Exchange Participation Exchange Exchange Exchanged Amount Amount Amount -------- --------- ------ ------ ------ $35 million 6.875% Sr. Notes due 2013 $652.50 $30.00 $682.50 $50 million 6.875% Series A-1 Sr. Discount Notes due 2013 $652.50 $30.00 $682.50 $90 million 6.875% Series A-2 Sr. Discount Notes due 2013 $652.50 $30.00 $682.50 $300 million 8.875% Series A-3 Sr. Notes due 2016 $675.00 $30.00 $705.00 $225 million 8.875% Series A-4 Senior Notes due 2017 $670.00 $30.00 $700.00 The applicable total exchange amount will include an early participation amount payable only to holders of Old Notes that validly tender and do not validly withdraw their Old Notes prior to the Early Participation Deadline, and whose Old Notes are accepted for exchange. Holders of Old Notes that validly tender after the Early Participation Deadline, and whose notes are accepted for exchange, will receive the applicable principal exchange amount but not the early participation amount. Holders will not be entitled to withdraw their Old Notes after 5:00 p.m., New York City time, on May 21, 2008. Eligible Holders may request documents by contacting the information agent, MacKenzie Partners, Inc., at (toll-free) (800) 322-2885 or (collect) (212) 929-5500. Headquartered in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. -- http://www.rhdonnelley.com/ -- (NYSE: RHD) publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc. and Local Launch, Inc. are the company's only direct wholly owned subsidiaries. * * * As reported in yesterday's Troubled Company Reporter, Moody's Investors Service has assigned a B1 rating to R.H. Donnelley Inc.'s proposed $488 million senior unsecured notes and a Ba1 rating to Dex Media West LLC's proposed senior secured credit facilities, while affirming R.H. Donnelley Corporation's B1 Corporate Family rating, in connection with a proposed note exchange and refinancing. Fitch Ratings has affirmed the Issuer Default Ratings on R.H. Donnelley Corp, R.H. Donnelley, Inc., Dex Media, Inc., Dex Media East and Dex Media West at 'B+'. Fitch expects to rate the amended RHDI credit facility 'BB+/RR1' and the proposed DXW credit facility 'BB+/RR1'. The Rating Outlook has been changed to Negative from Stable. SADLER HOMES: Case Summary & Six Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Sadler Homes, Inc. 3102 Ashfield Dr. Houston, TX 77082 Bankruptcy Case No.: 08-32931 Type of Business: The Debtor builds and sells homes. See http://www.sadlerhomes.com/ Chapter 11 Petition Date: May 5, 2008 Court: Southern District of Texas (Houston) Judge: Karen K. Brown Debtor's Counsel: Peter Johnson, Esq. Email: pjlawecf@pjlaw.com Eleven Greenway Plaza Ste. 2820 Houston, TX 77046 Tel: (713) 961-1200 Fax: (713) 961-0941 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ TrustMark National Bank Prom Note $60,090 10497 Town & Country Way, Ste 380 Houston, TX 77024 JPMorgan Chase Bank NA Credit Line for $45,586 Southwest Houston LPO Operations 9531 Southwest Freeway Houston, TX 77074 Citibusiness Credit Card $12,172 Platinum Select Card P.O. Box 44180 Jacksonville, FL 32231-4180 Advanta Bank Corp. Credit Card $11,082 Hughes Supply Trade Debt $4,698 Capital One Credit Card $1,270 SANDRIDGE ENERGY: S&P Rates Proposed $500MM Unsecured Notes B- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to SandRidge Energy Inc.'s (B/Positive/--) proposed $500 million in senior unsecured notes, with a recovery rating of '5', indicating S&P's expectation of modest (10%-30%) recovery in the event of a payment default. At the same time, S&P affirmed SandRidge's 'B' corporate credit rating and lowered the issue rating on the company's $1 billion in existing senior unsecured notes to 'B-' from 'B' and revised the recovery rating to '5' from '3'. "The ratings action came as a result of the significant increase in SandRidge's borrowing capacity under its senior secured revolving credit facility, which leaves less residual value available for unsecured creditors in the event of a payment default," said Standard & Poor's credit analyst David Lundberg. The ratings on Oklahoma City-based SandRidge reflect its highly leveraged financial profile, geographic concentration in the Pinon Field in West Texas, and the exploration and production industry's highly cyclical and capital-intensive nature. These weaknesses are only partially offset by SandRidge's good internal growth prospects, competitive finding and development costs, and experienced management team. SEA CONTAINERS: Wants Court to Approve SCL and GECC Global Pact --------------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Dealware to authorize Sea Containers Ltd. to enter into a framework agreement with General Electric Capital Corporation to end a dispute between SCL and GECC relating to GE SeaCo SRL, so as to permit GE SeaCo's management to focus 100% of its efforts on managing and growing the GE SeaCo business. GE SeaCo is non-debtor and a joint-venture entity between SCL, and GECC -- through its subsidiaries GE Capital Container SRL and Genstar Container Corporation. GE SeaCo has asserted a number of claims against the Debtors, all of which arose under certain governing agreements. Subsequently, the Court has allowed the parties to pursue arbitration with respect to the claims. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, in Wilmington, Delaware, relates that the Framework Agreement is the result of substantial efforts made by the Debtors, GE SeaCo and GECC to resolve all disputes between them, establish a platform for a normalized business relationship, and maximize GE SeaCo's value for its stakeholders. Mr. Brady says the Framework Agreement provides for (i) the settlement and release of all existing and pending claims between the parties, (ii) a basis upon which to file and confirm a Chapter 11 plan, while eliminating the possibility that GECC would assert a plan that would constitute a change of control under the joint venture documents, and (iii) modifications of certain relevant GE SeaCo agreements to streamline and update the governance and operations of GE SeaCo. Under the terms of the proposed Framework Agreement, Mr. Brady continues, GECC and GE SeaCo would release significant claims asserted against the Debtors, which are estimated as having a face value of over $100 million, and which are the subject of the intensive and expensive ongoing arbitration proceedings. The other salient terms of the Framework Agreement include: -- facilitating confirmation of a Chapter 11 plan and emergence of the Debtors through waiver by GECC of the "right of first offer," change of control and other rights under the GE SeaCo governing agreements; -- clarifying and supplementing certain reporting and informational requirements relating to GE SeaCo to enhance the liquidity of the equity interests in a newly-formed company, Newco, that likely will own SCL's interests in GE SeaCo, and the equity interests of which are likely to be distributed to creditors of SCL; -- the creation of securities registration rights in GE SeaCo that would facilitate the disposition of Newco's interests in GE SeaCo at a later date; -- termination of two Master Lease Agreements, and placing containers in the MLAs under two Equipment Management Agreements. The agreements are for containers owned by SCL or GECC that were leased for GE SeaCo's benefit; -- amendments to the GE SeaCo governing agreements to update and streamline GE SeaCo's governance and operations; -- provision of a special dividend from GE SeaCo that should yield SCL in excess of $10,000,000, which otherwise would not be payable, without interest, until at least 2012; -- clarifications regarding Newco's post-emergence governance and ownership, all in light of the SCL's anticipated emergence from Chapter 11 and the distribution of equity in Newco; and -- a global settlement and release of outstanding claims among the Debtors, GECC and GE SeaCo. Mr. Brady says the settlement of litigation and the release of claims would have otherwise consumed significant bankruptcy estate resources. The waiver of GECC is also significant because it will enable the Debtors to formulate a path to exit in the near term without the specter of further disputes with GECC, avoid potentially mountainous additional administrative costs, and facilitate the distribution of value by the estates to creditors. "While the estates have agreed in exchange to forgo $18.9 million retained by GE SeaCo and the $7 million claim for attorneys' fees in the Change of Control Arbitration -- a portion of this consideration will redound to SCL's benefit through its 50% economic stake in GE SeaCo," Mr. Brady informs the Court. The Debtors believe that the Framework Agreement (i) provides significant benefits with no meaningful detriment to the estates, (ii) will mark a fresh start and facilitate a harmonious, profitable relationship for the Debtors, GECC and GE SeaCo, and (iii) is for the best interests of the Debtors and their creditors. A full-text copy of the Framework Agreement is available for free at http://researcharchives.com/t/s?2bc9 About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEAENA INC: Weaver & Martin Expresses Going Concern Doubt --------------------------------------------------------- Weaver & Martin, LLC, raised substantial doubt on the ability of Seaena, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses and negative cash flows from operations. The company posted a net loss of $3,420,400 on total revenues of $3,336,957 for the year ended Dec. 31, 2007, as compared with a net loss of $9,875,464 on total revenues of $4,272,495 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $4,601,656 in total assets and $5,779,145 in total liabilities, resulting in $1,177,490 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $1,259,057 in total current assets available to pay $5,779,145 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b29 About Seaena Inc. Seaena, Inc., (OTC BB: SEAI.OB) fka Crystalix Group International Inc. -- http://www.seaena.com/-- manufactures, distributes, and markets laser subsurface engraved optical-quality glass products. SECURITIZED ASSET: Fitch Affirms Junked Ratings on Six Classes -------------------------------------------------------------- Fitch Ratings has taken rating action on Securitized Asset Backed Receivables mortgage pass-through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. Securitized Asset Backed Receivables LLC Trust 2005-FR5 -- $105.4 million class A-1A affirmed at 'AAA'; -- $33.0 million class A-1B rated 'AAA', remains on Rating Watch Negative; -- $107.3 million class A-2B rated 'AAA', remains on Rating Watch Negative; -- $80.8 million class M-1 affirmed at 'BB'; -- $52.3 million class M-2 affirmed at 'CCC'; -- $10.5 million class M-3 affirmed at 'CCC'; -- $9.9 million class B-1 affirmed at 'CCC'; -- $9.9 million class B-2 affirmed at 'CC/DR5'; -- $9.3 million class B-3 affirmed at 'CC/DR5'; -- $11.6 million class B-4 affirmed at 'CC/DR6'; The collateral on the aforementioned transactions consists of 30 year fixed-rate and adjustable-rate mortgage loans secured by first- and second-lien deeds of trust on residential properties, all extended to sub-prime borrowers. As of the March 2008 remittance date, the pool has experienced 14.33% of loss. The deal has 38.4% in 90+ delinquency and the pool factor is approximately 40%. Countrywide Home Loan Servicing (rated 'RMS2+' by Fitch) is the master servicer for the deal. Class A-1B has a financial guaranty provided by MBIA. SIRIUS SATELLITE: March 31 Balance Sheet Upside-Down by $839.4MM ---------------------------------------------------------------- SIRIUS Satellite Radio Inc. reported on Monday financial results of its first quarter ended March 31, 2008, including a 33.0% increase in revenue to $270.4 million, total subscribers in excess of 8.6 million and a 55.0% decrease in the adjusted loss from operations. At March 31, 2008, the company's consolidated balance sheet showed $1.5 billion in total assets and $2.3 billion in total liabilities, resulting in a $839.4 million total stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $468.8 million in total current assets available to pay $1.2 billion in total current liabilities. SIRIUS reported a first quarter 2008 net loss of $104.1 million, compared with a net loss of $144.7 million in the same period last year. Adjusted loss from operations decreased to $39.5 million during the first quarter of 2008, as compared to an adjusted loss from operations of $84.0 million in the first quarter of 2007. Total revenue for the first quarter 2008 increased to $270.4 million, up 33.0% from first quarter 2007 total revenue of $204.0 million. Average monthly revenue per subscriber was $10.42 in the first quarter of 2008 as compared with $10.46 for the first quarter of 2007. Subscriber acquisition costs per gross subscriber addition was $91 in the first quarter 2008, an improvement over first quarter 2007's SAC per gross subscriber addition of $101. "SIRIUS continues to demonstrate robust subscriber and revenue growth, along with strong cost discipline and significant improvement in our bottom line," said Mel Karmazin, chief executive officer of SIRIUS. "Compared with a year ago, first quarter 2008 subscribers grew 31.0%, revenue grew 33.0%, while cash operating costs only grew 8.0%, leading to a 55.0% decline in our adjusted loss from operations." "We await the FCC decision on our pending merger with XM, and we are eager to deliver the strong benefits of the combined company to our subscribers and stockholders." SIRIUS ended the first quarter of 2008 with 8,644,319 subscribers, up 31.0% from 6,581,045 subscribers at the end of first quarter 2007. Retail subscribers increased 10.0% in the first quarter of 2008 to 4,643,215 from 4,234,804 at the end of first quarter 2007. OEM subscribers increased 72.0% in the first quarter 2008 to 3,986,818 from 2,323,683 at the end of first quarter 2007. During the first quarter of 2008, SIRIUS added 322,534 net subscribers and achieved a 52.0% share of satellite radio net subscriber additions. Total Debt At March 31, 2008, the company had total debt of $1,282,743,000 compared to total debt of $1,314,418,000 at Dec. 31, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2bd6 Merger Update On Feb. 19, 2007, Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. entered into an Agreement and Plan of Merger, pursuant to which Sirius and XM will combine their businesses through a merger of XM Radio and a newly formed, wholly owned subsidiary of Sirius. SIRIUS and XM each obtained stockholder approval for the deal in November 2007. On March 24, 2008, the U.S. Department of Justice informed Sirius and XM that it had ended its investigation into their pending merger without taking action to block the transaction. The pending merger is still subject to approval by the Federal Communications Commission. About SIRIUS Satellite Headquartered in New York, SIRIUS Satellite Radio Inc. (Nasdaq: SIRI) http://www.sirius.com/-- provides satellite radio services in the United States. The company offers over 130 channels to its subscribers — 69 channels of 100.0% commercial-free music and 65 channels of sports, news, talk, entertainment, data and weather. Subscribers receive the company's service through SIRIUS radios, which are sold by automakers, consumer electronics retailers, mobile audio dealers and through the company's website. As of March 31, 2008, SIRIUS radios were available as a factory and dealer-installed option in 125 vehicle models and as a dealer only-installed option in 29 vehicle models. * * * As reported in the Troubled Company Reporter on March 6, 2008, Standard & Poor's Ratings Services revised the CreditWatch implications of the ratings on Sirius Satellite Radio Inc. (CCC+/Watch Developing/--) to developing from positive. S&P originally placed the ratings on CreditWatch, with positive implications, on Feb. 20, 2007, based on the company's definitive agreement to an all-stock "merger of equals" with XM Satellite Radio Holdings Inc. (CCC+/Watch Developing/--). SIRVA INC: Emerges from Chapter 11 Protection in New York --------------------------------------------------------- Marc Kieselstein, P.C., at Kirkland and Ellis LLP, in Chicago, Illinois, notifies the U.S. Bankruptcy Court for the Southern District of New York that SIRVA, Inc., and its debtor- subsidiaries' First Amended Prepackaged Joint Plan of Reorganization became effective on May 12, 2008. Each of the conditions precedent to consummation of the Plan have been satisfied or waived, in accordance with the Plan, Mr. Kieselstein says. On May 9, 2008, by Eryk J. Spytek, senior vice-president, general counsel and secretary of SIRVA, Inc., disclosed in a regulatory filing with the Securities and Exchange Commission that SIRVA will emerge from bankruptcy as a private company controlled by the holders of Allowed Prepetition Facility Claims and the holders of DIP Facility Claims, who become New Credit Agreement Lenders via distribution of the New Common Stock. The DIP Facility will convert into the New Credit Facility, and up to 25% of the New Common Stock, subject to dilution for the Management Incentive Plan, will be made available as a fee to the DIP Lenders upon conversion, said Mr. Spytek. The remaining portion of the New Common Stock will be distributed on a pro rata basis to the holders of Prepetition Facility Claims. Moreover, the Reorganized Debtors will be authorized to assume all obligations in respect of the loans and all other monetary obligations under the DIP Credit Agreement. Each loan will be deemed to have been continued as a loan under the New Credit Agreement, and each DIP Lender will be deemed to be a New Credit Agreement Lender. The DIP Credit Agreement and related documents will be deemed to have been superseded and replaced by the New Credit Agreement, and the commitments under the DIP Credit Agreement will be deemed to have been terminated. Company's Statement SIRVA, Inc. disclosed that its Plan of Reorganization became effective, ending its Chapter 11 case and marking the Company's emergence from bankruptcy. SIRVA's Plan of Reorganization is the result of an agreement the Company reached in February with its lenders, who overwhelmingly supported its Plan of Reorganization. SIRVA's exit financing consists of a $215,000,000 senior secured credit facility, which will be used to fund ongoing operations and borrowings. Effective immediately, SIRVA will become a private company, and its stock will no longer be publicly traded. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The Court confirmed the Debtor's First Amended Prepackaged Plan on May 7, 2008. (Sirva Inc. Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: Will No Longer Proceed with Public Offering Plan ----------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission dated May 12, 2008, Eryk J. Spytek, senior vice- president, general counsel and secretary of SIRVA, Inc., disclosed that the company terminated its registration under Section 12(g) of the Securities Exchange Act of 1934. Registration Statement Withdrawn In a separate filing, Mr. Spytek disclosed that SIRVA seeks the withdrawal of its Registration Statement initially filed with the SEC on November 30, 2007. Mr. Spytek states that SIRVA no longer intends to proceed with a registered public offering of its securities, and it believes the withdrawal to be consistent with the public interest and the protection of investors. SIRVA confirms that the Registration Statement has not been declared effective, and no securities have previously been sold in connection with the proposed offering. Mr. Spytek also disclosed that SIRVA removes all shares that remain unissued pursuant to the Registration Statement dated October 5, 2007. The October 5 Registration Statement effected the registration of 7,400,000 shares of SIRVA's common stock, par value $0.01 per share, to be issued under the SIRVA, Inc. Amended and Restated Omnibus Stock Incentive Plan. Additionally, SIRVA removes all shares that remain unissued pursuant to the Registration Statement dated November 25, 2003. The October 5 Registration Statement effected the registration of: (a) 7,600,000 shares of SIRVA's common stock, par value $0.01 per share, to be issued under the SIRVA, Inc. Omnibus Stock Incentive Plan, and (b) 4,528,372 shares, to be issued under the SIRVA, Inc. Stock Incentive Plan. Mr. Spytek disclosed that 7,276,422 of the 7,600,000 shares under the Omnibus Plan, and 3,800,922 of the 4,528,372 shares under the Option Plan, remain unissued. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The Court confirmed the Debtor's First Amended Prepackaged Plan on May 7, 2008. (Sirva Inc. Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SIRVA INC: 360networks Panel May Get $1.5MM in Preference Action ---------------------------------------------------------------- Sirva Inc., its debtor-affiliates, the Official Committee of Unsecured Creditors in their Chapter 11 cases, and the Official Committee of Unsecured Creditors of 360networks (USA) Inc., ask the U.S. Bankruptcy Court for the Southern District of New York to approve a stipulation fully resolving the preference action pending before Judge Allan L. Gropper in the U.S. Bankruptcy Court. The parties have engaged in settlement discussions and negotiations, and have agreed to fix and liquidate the amount of 360networks Committee's claim, to avoid the uncertainty and expense of further litigation. Pursuant to the Stipulation, the parties agree that: (1) 360networks Committee will have an allowed, non- contingent, liquidated, unsecured claim for $1,500,000 against the Debtors; (2) 360networks Committee will not be required to file a proof of claim with respect to the Allowed Claim; (3) 360networks Committee will waive any right to assert an administrative expense claim against the Debtors for "substantial contribution" or compensation for professional services; and (4) provided that the Debtors' First Amended Prepackaged Joint Plan of Reorganization is confirmed: -- the Allowed Claim will be treated as a Class 5-A Claim, -- 360networks Committee will not oppose the confirmation of the Plan, -- upon the effective date of the Plan, the Debtors will pay $375,000 to 360networks Committee, in full and final satisfaction of the Allowed Claim, and -- within 10 days of receipt of the Payment Amount, 360networks Committee will seek the dismissal of the Preference Action, with prejudice. Headquartered in Westmont, Illinois, SIRVA Inc. (Pink Sheets : SIRV.PK) -- http://www.sirva.com/-- is a provider of relocation solutions to a well-established and diverse customer base. The company handles all aspects of relocation, including home purchase and home sale services, household goods moving, mortgage services and home closing and settlement services. SIRVA conducts more than 300,000 relocations per year, transferring corporate and government employees along with individual consumers. SIRVA's brands include Allied, Allied International, Allied Pickfords, Allied Special Products, DJK Residential, Global, northAmerican, northAmerican International, Pickfords, SIRVA Mortgage, SIRVA Relocation and SIRVA Settlement. The company has operations in Costa Rica. The company and 61 of its affiliates filed separate petitions for Chapter 11 protection on Feb. 5, 2008 (Bankr. S.D.N.Y. Case No. 08-10433). Marc Kieselstein, Esq. at Kirkland & Ellis, L.L.P. is representing the Debtor. When the Debtors filed for bankruptcy, it reported total assets of US$924,457,299 and total debts of US$1,232,566,813 for the quarter ended Sept. 30, 2007. The Court confirmed the Debtor's First Amended Prepackaged Plan on May 7, 2008. (Sirva Inc. Bankruptcy News; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). SOCIAL ENRICHMENT: Case Summary & 12 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Social Enrichment, Inc. 627 Masters Dr. Stone Mountain, GA 30087 Bankruptcy Case No.: 08-68426 Chapter 11 Petition Date: May 5, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Scott B. Riddle, Esq. Email: sbriddle@mindspring.com Ste. 2250 Resurgens Plaza 945 E. Paces Ferry Rd. Atlanta, GA 30326 Tel: (404) 815-0164 Fax: (404) 815-0165 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Roswell Holdings, LLC $3,220,000 Ste. 300A 200 Sandy Springs Place Atlanta, GA 30328 Margo King Loan $464,000 627 Masters Dr. Stone Mountain, GA 30087 King Psychological Loan $69,661 627 Masters Dr. Stone Mountain, GA 30087 Ellis Property Group, Inc. Contract $39,000 Maria Fontaine $39,000 Dr. Laura King-Dowling Contract $20,000 Roylyn LLC Loan $15,000 DeKalb County Tax Comm. $14,000 Business Accounting Services Accounting Services $9,000 Miller & Martin Legal Fees $5,000 Ganek, Wright & Dobkin Legal Fees $5,000 MH Michael Landscape Arch Contract $1,600 SOLAR COSMETIC: Court OKs Interim Use of KeyBank's DIP Fund ----------------------------------------------------------- The Hon. Laurel Isicoff of the U.S. Bankruptcy Court for the Southern District of Florida allowed Solar Cosmetic Labs Inc. to access $2.1 million of KeyBank NA's $2.4 million debtor-in- possession financing, The Deal's Terry Brennan relates. Judge Isicoff, The Deal adds, also allowed the Debtor to use KeyBank's cash collateral on interim basis. The DIP financing carries a base rate plus 3%, with a default rate of plus 3%, The Deal relates, citing court filings. The report adds that the DIP financing is set to mature in the earlier of Nov. 30, 2008, or upon liquidation of the Debtor's remaining properties. The Deal reveals that the Debtor defaulted on a $26.2 million debt owed to Keybank and defaulted on a $38.8 million senior subordinated note before it went bankrupt. Part of the KeyBank debt was repaid after the Debtor sold some of its assets, including a plant, bought by EGM Holdings Group LLC for $5.8 million, according to The Deal. The report says that Solar Cosmetic will have to outsource some orders once its right to use the plant expires by the end of May. Final hearing on the DIP financing and use of cash collateral is set for May 23, 2008, The Deal notes. As reported in the Troubled Company Reporter on May 7, 2008, The Debtors have obtained $1.9 million in revolving credit facility from KeyBank NA to fund the companies during their bankruptcy cases. Dornbusch Family Trust LP, New Capital Partners LP and Vigour Holdings SA Trust each holds 10% stake in Solar Cosmetic. Fujian Shuangfei of Fujian, China, holds a $1.43 million claim against Solar Cosmetic. About Solar Cosmetic Miami Gardens, Florida-based Solar Cosmetic Labs Inc. -- http://www.solarcosmetics.com/-- and -- http://www.bodyandearth.com/-- manufacture, markets and sells perfumes, cosmetics, and other toilet preparations. The company and Solar Packaging Corp. filed chapter 11 petition on May 6, 2008 (Bankr. S.D. Fla. Case Nos. 08-15793 and 08-15796). Judge Laurel Isicoff presides the case. Peter E. Shapiro, Esq., at Shutts & Bowen, LLP represents the Debtors in their restructuring efforts. As of Nov. 30, 2007, Solar Cosmetic listed $16.1 million in assets and $74.6 million in liabilities. SONA MOBILE: Losses Prompt Going Concern Opinion ------------------------------------------------ Horwath Orenstein LLP in Toronto, Canada, raised substantial doubt on Sona Mobile Holdings Corp. ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's recurring losses from operations. Sona Mobile's management said that since its inception in November 2003, the company has generated minimal revenue, has incurred substantial losses, and has not generated any positive cash flow from operations. The company has relied upon the sale of shares of equity securities and convertible debt to fund its operations. For the year ended Dec. 31, 2007, the company posted a $5,664,575 net loss on $980,649 of net revenues compared with a $8,485,894 net loss on $398,134 of net revenues in 2006. At Dec. 31, 2007, the company's balance sheet showed $3,585,237 in total assets, $3,218,223 in total liabilities, and $367,014 in total stockholders' equity. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b20 Based in New York, Sona Mobile Holdings Corp. (OTCBB: SNMB)-- http://www.sonamobile.com/-- is a software and service provider specializing in value-added services to data-intensive vertical and horizontal market segments including the gaming industry. The company develops, markets and sells data application software for gaming and mobile devices, which enables secure execution of real time transactions on a flexible platform over wired, cellular or WiFi networks. Its target customer base includes casinos, horse racing tracks and operators, cruise ship operators and casino game manufacturers and suppliers on the gaming side, and corporations that require secure transmissions of large amounts of data in the enterprise and financial services. SOUTH COAST: Moody's Lowers Ratings on Two Note Classes to Ca ------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings on these notes issued by South Coast Funding III Ltd. Class Description: $270,000,000 Class A-1A Floating Rate Senior Notes Due 2038 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $107,000,000 Class A-1B Floating Rate Senior Notes Due 2038 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $38,000,000 Class A-2 Floating Rate Senior Notes Due 2038 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $12,000,000 Class A-3A Floating Rate Senior Notes Due 2038 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: $9,000,000 Class A-3B Fixed Rate Senior Notes Due 2038 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca Class Description: $10,000,000 Class B Floating Rate Senior Subordinate Notes Due 2038 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C Class Description: $28,000,000 Class C Floating Rate Subordinate Notes Due 2038 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. SOVEREIGN CAPITAL: Fitch Affirms 'BB' Rating on Preferred Stock --------------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Ratings of Sovereign Bancorp, Inc. at 'BBB-' and Sovereign Bank at 'BBB'. These affirmations follow SOV's announcement of a sizable capital raising plan. This plan consists of $1 billion in new common equity and $500 million in subordinated debt and is expected to be completed in the next few days. The subordinated debt will be issued at the Sovereign Bank level. This action by SOV will greatly improve its capital ratios and its liquidity position, particularly at the holding company. In first-quarter 2008, SOV returned to profitability after recording large losses in fourth-quarter 2007. In the prior quarter, losses stemmed primarily from goodwill impairment charges associated with the consumer and New York Metro business segments. In 1Q08, SOV recorded net income of $100 million for an ROA of 0.50%. This ratio was moderately below the top-30 bank median and well below levels when credit conditions were benign. Loan loss provisions remained at an elevated level but were moderately lower compared to 4Q07. Overall, asset quality indicators appear to be at manageable levels. The NPA ratio continues to trend higher, but remains better than average among the top-30 U.S. banks. This favorable variance stems from: SOV dealt with its correspondent home equity portfolio much earlier than many; the bulk of its remaining real estate exposure is within its mid-Atlantic and New England footprint; exposure to homebuilders is a modest portion of the loan portfolio mix. The real estate markets in SOV's footprint have been under significantly less pressure when compared to the troubled markets of California and Florida. SOV's direct home equity portfolio has performed comparatively well. This portfolio was primarily branch originated with favorable average FICOs and combined LTVs. Loan loss reserves appear to provide solid coverage of existing non-performing loans. That said, further significant provisions could be in store for SOV, especially in a recessionary scenario. The Stable Outlook reflects expectations that asset quality problems will remain at manageable levels and capital ratios will be maintained at least at pro-forma levels. Maintenance over time of strong liquidity at the holding company combined with reduced holding company obligations could result in an alignment of holding company and bank level ratings. Fitch has affirmed these ratings, with a Stable Outlook: Sovereign Bancorp, Inc. -- Long-term IDR at 'BBB-'; -- Senior Debt at 'BBB-'; -- Short-term IDR at 'F3'; -- Individual at 'C'; -- Support at '3'. Sovereign Bank -- Long-term IDR at 'BBB'; -- Long-term Deposits at 'BBB+'; -- Subordinated Debt at 'BBB-'; -- Short-term IDR at 'F2'; -- Short-term Deposits at 'F2'; -- Individual at 'B/C'; -- Support at '3'. Sovereign Capital Trust I, IV-VI -- Preferred Stock at 'BB'. ML Capital Trust I -- Preferred Stock at 'BB'. Sovereign Real Estate Investment Trust -- Preferred Stock at 'BB+'. SOVEREIGN REAL: Fitch Holds 'BB+' Rating on Preferred Stock ----------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Ratings of Sovereign Bancorp, Inc. at 'BBB-' and Sovereign Bank at 'BBB'. These affirmations follow SOV's announcement of a sizable capital raising plan. This plan consists of $1 billion in new common equity and $500 million in subordinated debt and is expected to be completed in the next few days. The subordinated debt will be issued at the Sovereign Bank level. This action by SOV will greatly improve its capital ratios and its liquidity position, particularly at the holding company. In first-quarter 2008, SOV returned to profitability after recording large losses in fourth-quarter 2007. In the prior quarter, losses stemmed primarily from goodwill impairment charges associated with the consumer and New York Metro business segments. In 1Q08, SOV recorded net income of $100 million for an ROA of 0.50%. This ratio was moderately below the top-30 bank median and well below levels when credit conditions were benign. Loan loss provisions remained at an elevated level but were moderately lower compared to 4Q07. Overall, asset quality indicators appear to be at manageable levels. The NPA ratio continues to trend higher, but remains better than average among the top-30 U.S. banks. This favorable variance stems from: SOV dealt with its correspondent home equity portfolio much earlier than many; the bulk of its remaining real estate exposure is within its mid-Atlantic and New England footprint; exposure to homebuilders is a modest portion of the loan portfolio mix. The real estate markets in SOV's footprint have been under significantly less pressure when compared to the troubled markets of California and Florida. SOV's direct home equity portfolio has performed comparatively well. This portfolio was primarily branch originated with favorable average FICOs and combined LTVs. Loan loss reserves appear to provide solid coverage of existing non-performing loans. That said, further significant provisions could be in store for SOV, especially in a recessionary scenario. The Stable Outlook reflects expectations that asset quality problems will remain at manageable levels and capital ratios will be maintained at least at pro-forma levels. Maintenance over time of strong liquidity at the holding company combined with reduced holding company obligations could result in an alignment of holding company and bank level ratings. Fitch has affirmed these ratings, with a Stable Outlook: Sovereign Bancorp, Inc. -- Long-term IDR at 'BBB-'; -- Senior Debt at 'BBB-'; -- Short-term IDR at 'F3'; -- Individual at 'C'; -- Support at '3'. Sovereign Bank -- Long-term IDR at 'BBB'; -- Long-term Deposits at 'BBB+'; -- Subordinated Debt at 'BBB-'; -- Short-term IDR at 'F2'; -- Short-term Deposits at 'F2'; -- Individual at 'B/C'; -- Support at '3'. Sovereign Capital Trust I, IV-VI -- Preferred Stock at 'BB'. ML Capital Trust I -- Preferred Stock at 'BB'. Sovereign Real Estate Investment Trust -- Preferred Stock at 'BB+'. SPEEDEMISSIONS INC: Tauber & Balser Expresses Going Concern Doubt ----------------------------------------------------------------- Atlanta-based Tauber & Balser, P. C., raised substantial doubt about the ability of Speedemissions, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring losses from operations and its limited capital resources. According to the management, the company has taken certain steps to maintain its operating and financial requirements in an effort to enable it to continue as a going concern until such time that revenues are sufficient to cover expenses, including expanding its revenue opportunities through the acquisitions of Mr. Sticker and Just, Inc., in 2005, incorporating revisions to its processes and costs by seeking reduced operating costs through service agreements, redistributing labor to reduce overtime costs, and improving the appearance of its stores and personnel. As a result of these actions, the company has operated at a profit in several quarters during 2006 and 2007. However, the profits generated in these quarters were not enough to cover losses incurred in each year as a result of additional operating expenses from new stores that the company opened or was in the process of opening during 2006 and 2007. The company posted a net loss of $264,232 on total revenues of $9,662,245 for the year ended Dec. 31, 2007, as compared with a net loss of $1,332,206 on total revenues of $9,480,097 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $9,719,301 in total assets, $1,566,099 in total liabilities, $4,579,346 in convertible redeemable preferred stock and $3,573,856 in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $1,030,713 in total current assets available to pay $1,078,048 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b2b About Speedemissions Inc. Headquartered in Atlanta, Speedemissions Inc. (OTC BB: SPMI.OB) -- http://www.speedemissions.com/-- is a vehicle emissions (and safety inspection where required) testing company in the United States in areas where emissions testing is mandated by the Environmental Protection Agency. The focus of the company at the present time is the Atlanta, Houston, and Salt Lake City markets. SPORTS AUTHORITY: S&P Cuts Rating to B- on Performance Downturn --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Englewood, Colorado-based The Sports Authority, a full- line sporting goods retailer, to 'B-' from 'B'. At the same time, S&P lowered the ratings on subsidiary TSA Stores Inc.'s $225 million secured term loan to 'B-' from 'B'. The outlook is stable. "The downgrade reflects the recent downturn in performance and the deterioration of credit protection metrics," explained Standard & Poor's credit analyst David Kuntz. Additionally, S&P anticipate that there may be continued softness in operations and credit metrics could weaken further over the near term. SPRINT NEXTEL: Posts $505 Million Net Loss in 1st Quarter 2008 -------------------------------------------------------------- Sprint Nextel Corp. (NYSE: S) reported first quarter 2008 financial results. Consolidated net operating revenues for the quarter were $9.3 billion, an 8% decline compared to $10.1 billion reported in the first quarter of 2007 and a 5% decline compared to $9.8 billion in the fourth quarter. Reported diluted loss per share was 18 cents compared to a 7 cent loss in the year-ago period and a loss of $10.28 per share in the fourth quarter of 2007. The fourth quarter results include a loss of $10.32 per share from a pre-tax non-cash goodwill impairment charge of $29.5 billion. For the three months ended March 31, 2008, the company posted a net loss of $505 million, compared with a $211 million net loss in the same period in 2007. A copy of Sprint Nextel's disclosure is available for free at http://researcharchives.com/t/s?2bdf Adjusted EPS before Amortization, which removes the effects of special items and merger-related amortization expense, was 4 cents per share in the most recent quarter, compared to 18 cents in the first quarter of 2007 and 21 cents per share in the fourth quarter. The lower earnings in the current quarter are due to a reduced contribution from Wireless. For the quarter, total wireless subscribers declined by 1.09 million due to losses of 1.07 million post-paid subscribers and 543,000 traditional prepaid users, partially offset by gains of 343,000 Boost Unlimited and 183,000 wholesale and affiliate subscribers. Post-paid subscriber additions in the quarter were impacted by lower gross additions and higher churn. Post-paid churn in the quarter was 2.45% compared to 2.3% in both the first and fourth quarters of 2007. Wireless post-paid ARPU in the quarter was a little under $56, a 6% decline compared to the year- ago period and a 4% sequential decline. The ARPU trends reflect ongoing pressures on voice revenues partially offset by data growth. "As expected, our Wireless business delivered weak financial results. While the business will continue to face challenges in the short term, we are making progress in methodically attacking the sources of our performance issues. In the first quarter, we implemented a new, more focused brand campaign, we executed on our plans to take costs out of the business, and we made progress on the larger organizational and strategic decisions that we believe will lead to improved profitability in the long term," said Dan Hesse, Sprint Nextel CEO. "We have strengthened our hand with last week's 4G announcement, which captures and leverages the value of Sprint's sizable spectrum holdings, provides Sprint with additional financial flexibility, gives us a time-to-market advantage over our competitors in the important growth area of wireless broadband, and allows Sprint management to focus our resources and attention on improving the performance of our core business. "We continue to place the highest priority on reducing churn by improving the customer experience. Our "Simply EverythingSM" Plan, which provides our customers with unprecedented simplicity along with the immediacy of our "Now Network," has had a good response from existing and new customers," Hesse said. Segment Results * Wireless First quarter revenues of $8.0 billion declined 9% compared to the year-ago period and declined 6% from the fourth quarter of 2007. The declines are mainly due to lower average service revenue per customer and fewer post-paid subscribers. Adjusted Operating Income was a loss of $253 million compared to profits of $253 million in the first quarter of 2007 and $168 million in the fourth quarter. The decline in Adjusted Operating Income is due to lower service revenues that were partially offset by reduced operating expenses. Adjusted OIBDA was $1.8 billion in the current period compared to $2.4 billion in the 2007 first quarter and $2.2 billion in the 2007 fourth quarter. Adjusted OIBDA in the first quarter exceeded capital expenditures for the period by a little more than $900 million. * Wireline Revenues were $1.6 billion, a 2% increase from the first quarter of 2007 and a 1% increase from the fourth quarter. The growth is due to strong demand for IP services that more than offset declines in voice and data revenues. Adjusted Operating Income was $156 million versus $78 million in the same period a year ago, and $178 million in the fourth quarter of 2007. The first quarter Adjusted OIBDA was $287 million compared to $205 million a year ago, and $320 million in the fourth quarter of 2007. In the first quarter, Adjusted OIBDA exceeded capital expenditures by nearly $100 million. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. * * * As reported in the Troubled Company Reporter on May 2, 2008, Standard & Poor's Rating Services lowered its corporate credit and senior unsecured ratings on Sprint Nextel Corp. to 'BB' from 'BBB-' and removed the ratings from CreditWatch with negative implications. The outlook is stable. SPRINT NEXTEL: iPCS Files Lawsuit Over Clearwire Transaction ------------------------------------------------------------ iPCS, Inc. (Nasdaq: IPCS), the largest independent affiliate of Sprint Nextel, said that three of its subsidiaries filed a complaint in the Circuit Court of Cook County, Illinois against Sprint Nextel (NYSE: S) and certain of its related entities. In its complaint, iPCS claims that: * Sprint Nextel's recently announced WiMAX transaction with Clearwire Corporation (NASDAQ: CLWR) would breach the exclusivity provisions of IPCS's affiliation agreements with Sprint Nextel; and * Sprint Nextel is attempting to evade a judgment of the Circuit Court of Cook County, Illinois, relating to the Sprint-Nextel merger, which has been unanimously affirmed by the Illinois Appellate Court and which requires Sprint Nextel to cease owning, operating and managing the Nextel network in iPCS Wireless's territory. iPCS is seeking a declaratory judgment that Sprint Nextel's consummation of the recently announced Clearwire/WiMAX transaction, and its plan to compete against iPCS, will breach the iPCS agreements with Sprint Nextel. iPCS is asking the Court for a permanent injunction enjoining Sprint Nextel and those acting in concert with it from consummating the WiMAX transaction until such transaction has been modified to comply with the iPCS agreements with Sprint Nextel. iPCS noted that it has been involved in litigation with Sprint Nextel for nearly three years about the exclusivity provisions of its affiliation agreements, and has repeatedly won significant court victories. On September 20, 2006, the Circuit Court of Cook County, Illinois ruled that Sprint Nextel's ownership, operation and management of its Nextel wireless network in the iPCS Wireless territory violates the iPCS agreements with Sprint Nextel. That judgment was unanimously affirmed by the Illinois Appellate Court on March 31, 2008 and requires Sprint Nextel to cease owning, operating and managing the Nextel wireless network in the iPCS Wireless territory within 180 days, subject to Sprint Nextel's pending request that the Supreme Court of Illinois grant it leave to further appeal the earlier decisions. iPCS believes that Sprint Nextel's recently announced WiMAX transaction is yet another attempt by Sprint Nextel to breach the exclusivity provisions of the iPCS affiliation agreements. iPCS intends to fully and aggressively protect and defend its exclusivity rights. Background In January 1999, iPCS Wireless entered into agreements with Sprint with respect to, among other things, providing iPCS Wireless with the exclusive right to offer Sprint products and services in its territory. In December 2004, Sprint and Nextel Communications, Inc. announced that they had agreed to merge, at which time Sprint also announced its intent to pursue discussions with iPCS and the other Sprint Affiliates with respect to modifying the affiliates' agreements in light of the ramifications of the merger. Specifically, as iPCS (and other Sprint Affiliates at the time) claimed, competition with Sprint Nextel in the iPCS service territory would violate iPCS's exclusivity rights under its agreements. The iPCS claim that Sprint Nextel's proposed conduct following the merger would breach Sprint's agreements with iPCS has successfully been litigated. In March, 2008 the Illinois Appellate Court unanimously affirmed a 2006 Circuit Court decision requiring that, within 180 days of the date of the final order, Sprint Nextel and those acting in concert with it must cease owning, operating and managing the Nextel wireless network in iPCS Wireless's territory. On May 5, 2008, Sprint Nextel filed a petition with the Illinois Supreme Court requesting permission to pursue a further appeal of these decisions. Additionally, a Delaware court in September 2006 issued a final order in a separate lawsuit prohibiting Sprint Nextel from offering iDEN products and services in iPCS territories in Indiana, New York, Ohio, Pennsylvania and Tennessee using certain Sprint brands and marks. On May 7, 2008, Sprint Nextel and Clearwire announced their intention to combine their broadband wireless businesses to form a new company. Sprint Nextel would own approximately 51 percent of the new wireless communications company, which would be named Clearwire. As part of the proposed transaction, certain other parties, including Intel Corporation (NASDAQ: INTC) through Intel Capital, Google Inc. (NASDAQ: GOOG), Comcast Corporation (NASDAQ: CMSCA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC), have collectively agreed to invest $3.2 billion into the new company. According to the parties' press release, Clearwire and Sprint Nextel plan to offer a nationwide mobile WiMAX network that would compete with the iPCS wireless service offerings in the iPCS territories. On May 7, 2008, Sprint Nextel filed a complaint for declaratory judgment in the Court of Chancery of the State of Delaware seeking to have the Court rule that the proposed WiMAX transaction is not a violation of the Sprint Nextel agreements with iPCS. About iPCS, Inc. iPCS -- http://www.ipcswirelessinc.com/-- through its subsidiaries, is the Sprint Affiliate of Sprint Nextel with the exclusive right to sell wireless mobility communications network products and services under the Sprint brand in 81 markets including markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa, Ohio and Tennessee. The territory includes key markets such as Grand Rapids (MI), Fort Wayne (IN), Tri-Cities (TN), Scranton (PA), Saginaw-Bay City (MI) and the Quad Cities (IA/IL). As of March 31, 2008, iPCS's licensed territory had a total population of approximately 15.1 million residents, of which its wireless network covered approximately 12.0 million residents, and iPCS had approximately 640,600 subscribers. iPCS is headquartered in Schaumburg, Illinois. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. * * * As reported in the Troubled Company Reporter on May 2, 2008, Standard & Poor's Rating Services lowered its corporate credit and senior unsecured ratings on Sprint Nextel Corp. to 'BB' from 'BBB-' and removed the ratings from CreditWatch with negative implications. The outlook is stable. STANDARD PACIFIC: 1st Qtr. 2008 Net Loss Grows to $216.4 Million ---------------------------------------------------------------- Standard Pacific Corp. reported its unaudited 2008 first quarter operating results, that include: -- Cash flows from operating activities of $228.9 million; -- Homebuilding cash on balance sheet of $328.8 million compared to $219.1 million at Dec. 31, 2007; -- Homebuilding debt reduction of $22.0 million during the quarter; -- Loss per share of $3.34 vs. loss per share of $0.63 last year; -- Net loss of $216.4 million compared to a net loss of $40.8 million last year; -- Loss per share of $0.23, excluding after-tax impairment and tax valuation allowance charges totaling $3.11 per share; and -- $192.3 million of pretax charges related to inventory and joint venture impairments and land deposit write-offs and an $83.7 million noncash charge related to a valuation allowance for the company's deferred tax asset. -- Homebuilding revenues of $348.2 million vs. $651.1 million last year; -- New home deliveries of 1,036*, down 38% from 1,679 last year; -- 1,245 net new home orders, down 30% from 1,781 last year; -- Cancellation rate of 24%, flat as compared to the prior year period and down from 37% for the 2007 fourth quarter; -- 23% reduction in completed and unsold sold homes from 695 homes at Dec. 31, 2007, to 537 homes; and -- Quarter-end backlog of 1,488 homes, valued at $505.6 million compared to 2,545 homes valued at $950.9 million a year ago. "In the first quarter, the company's management team pursued, with a heightened sense of urgency, initiatives to reduce inventories, carefully manage cash and reduce debt," said Jeffrey V. Peterson, who in March 2008 was named Chairman, CEO and President of Standard Pacific Corp. "The company continued to make progress with these initiatives in the first quarter, increasing our cash position and improving net new home orders and quarter-end backlog from year end. We also paid down $22.5 million of the company's notes and $127 million of joint-venture debt." Mr. Peterson said, "The impairments reflect the general decline in the housing market. Although they do not materially change our cash position, we are mindful of their impact on the company's debt covenants. We have reached a preliminary agreement with our bank group to extend the waiver to our covenants associated with our bank facilities until Aug. 14, 2008. Going forward, our priorities are to continue aggressively reducing expenses and overhead; preserving cash by carefully managing starts, development costs and land purchases; and focusing on sales and delivering quality homes to our customers." Cash Generation and Debt Reduction Results Standard Pacific ended the 2008 first quarter with $328.8 million of homebuilding cash on its balance sheet, a $109.7 million increase from the 2007 year end balance. In addition, the company reduced its aggregate homebuilding debt balance by $22 million during the 2008 first quarter, primarily through the early retirement of $22.5 million of its 6-1/2% Senior Notes due Oct. 1, 2008 through open market purchases, bringing the total amount of open market purchases of these notes to $46.5 million. Inventory Reduction As a result of the continued focus on inventory reduction initiatives, Standard Pacific's owned or controlled lot position stood at approximately 32,602 lots (including discontinued operations) at March 31, 2008, a 43% reduction from the year ago level and a 56% decrease from the peak lot count at Dec. 31, 2005. Joint Venture Update The company continued to make progress with respect to its homebuilding and land development joint ventures during the 2008 first quarter as demonstrated by the $127 million reduction in the company's joint venture debt to $644 million. In addition, the company made a $15.7 million loan remargin payment during the quarter related to one joint venture. The company continues to evaluate its homebuilding joint ventures and may find it necessary to exit additional joint ventures, which may be accomplished by acquiring its partner's interest, disposing of its interest or other means. Credit Facilities The company was not in compliance with the consolidated tangible net worth and leverage covenants contained in its revolving credit facility, $100 million Term Loan A and $225 million Term Loan B as of March 31, 2008. During March 2008, the company reached an agreement with its bank group to extend the bank group's previous waiver of any default arising from its noncompliance with the financial covenants contained in the Credit Facilities to May 14, 2008. As part of the extension, the company agreed to reduce the revolving credit facility commitment from $900 million to $700 million. On May 9, 2008, the company obtained the preliminary consent of its bank group, subject to the group's receipt, review and execution of final documentation, to further extend the waiver until Aug. 14, 2008 and to expand the waiver's scope. A story on the waiver extension is reported in today's Troubled Company Reporter. Senior and Senior Subordinated Public Notes In addition to the Credit Facilities discussed above, the company had $1,302.3 million of senior and senior subordinated notes outstanding as of March 31, 2008. The Notes generally contain certain restrictive covenants, including a limitation on additional indebtedness and a limitation on restricted payments. Under the limitation on additional indebtedness, the company is permitted to incur specified categories of indebtedness but is prohibited, aside from those exceptions, from incurring further indebtedness if it does not satisfy either a leverage condition or an interest coverage condition. As of March 31, 2008, the company no longer satisfied either condition and as a result the company's ability to incur further indebtedness is currently limited. Exceptions to this limitation include new borrowings of up to $550 million (or $450 million if the company's leverage becomes 2.5 to 1 or higher) under bank credit facilities, subject to available borrowing sources, and indebtedness incurred for the purpose of refinancing or repaying existing indebtedness. Assuming that the company's bank group approves the Proposed Waiver Extension, the company believes that these exceptions and its cash balance of $328.8 million at March 31, 2008 provide it with substantial resources and alternatives to fund its short-term cash needs. Under the limitation on restricted payments covenant contained in the Notes, the company generally is prohibited from making restricted payments unless it satisfies certain conditions, including having the ability to incur further indebtedness under the leverage and interest coverage conditions of the additional indebtedness covenant and having availability under its restricted payments basket. Because the company no longer satisfies either of the conditions for incurring further indebtedness under the indebtedness covenant and, as of March 31, 2008, has no restricted payments basket capacity under the provisions of its most restrictive issuance of Notes, the company is currently prohibited from making restricted payments. Investments in joint ventures (and other restricted payments) may continue to be made, however, from funds held in the company's unrestricted subsidiaries. Based on current estimated funding requirements, and assuming that the company is successful in unwinding the joint ventures that it has targeted for termination and in extending certain joint venture loan maturities, the company believes that the funds in its unrestricted subsidiaries are sufficient to fund its joint venture investment obligations for the foreseeable future. The company's joint venture remargin obligations (which are a form of restricted payment) are cross-defaulted to its revolving credit facility to the extent the lenders in the company's joint ventures are also lenders under the revolving credit facility. This cross-default provision would be waived for the period of the Proposed Waiver Extension if this extension is obtained. To provide the company with a greater ability and flexibility to respond to unanticipated joint venture capital needs, it is currently evaluating and exploring a number of alternatives for reducing its joint venture investment obligations and enhancing its ability to make restricted payments. About Standard Pacific Headquartered in Irvine, California, Standard Pacific Corp. (NYSE:SPF) -- http://www.standardpacifichomes.com/-- operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The company also provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures, Standard Pacific Mortgage Inc., SPH Home Mortgage, Universal Land Title of South Florida and SPH Title. * * * As reported in the Troubled Company Reporter on Feb. 19, 2008, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Standard Pacific Corp. to 'B+' from 'BB-'. Additionally, S&P lowered its rating on the company's senior subordinated debt to 'B-' from 'B'. The outlook remains negative. STANDARD PACIFIC: Bank Group Agrees to Extend Waiver to August 14 ----------------------------------------------------------------- Standard Pacific Corp. obtained preliminary consent from its bank group, subject to the group's receipt, review and execution of final documentation, to further extend the waiver until Aug. 14, 2008, and to expand the waiver's scope. The company related that it was not in compliance with the consolidated tangible net worth and leverage covenants contained in its revolving credit facility, $100 million Term Loan A and $225 million Term Loan B as of March 31, 2008. During March 2008, the company reached an agreement with its bank group to extend the bank group's previous waiver of any default arising from its noncompliance with the financial covenants contained in the Credit Facilities to May 14, 2008. As part of the extension, the company agreed to reduce the revolving credit facility commitment from $900 million to $700 million. If completed, the Proposed Waiver Extension will expand the scope of the existing waiver to include, among other things, a broader waiver of defaults arising from non-compliance with financial covenants and a suspension of the application of the borrowing base, certain representations required to be made in connection with requests for additional borrowings, and a cross-default provision regarding defaults of other agreements between the company and members of the bank group. In exchange for the extension and expanded scope, the company will agree to collateralize new advances made under the revolving credit facility, reduce the revolving credit facility commitment from $700 million to $500 million and not borrow under the facility when its cash on hand exceeds $300 million. While the company expects that this waiver extension will be completed on or prior to May 14, 2008, there can be no assurance in this regard. Senior and Senior Subordinated Public Notes In addition, the company had $1,302.3 million of senior and senior subordinated notes outstanding as of March 31, 2008. The Notes generally contain certain restrictive covenants, including a limitation on additional indebtedness and a limitation on restricted payments. Under the limitation on additional indebtedness, the company is permitted to incur specified categories of indebtedness but is prohibited, aside from those exceptions, from incurring further indebtedness if it does not satisfy either a leverage condition or an interest coverage condition. As of March 31, 2008, the company no longer satisfied either condition and as a result the company's ability to incur further indebtedness is limited. Exceptions to this limitation include new borrowings of up to $550 million under bank credit facilities, subject to available borrowing sources, and indebtedness incurred for the purpose of refinancing or repaying existing indebtedness. Assuming that the company's bank group approves the Proposed Waiver Extension, the company believes that these exceptions and its cash balance of $328.8 million at March 31, 2008, provide it with substantial resources and alternatives to fund its short- term cash needs. Under the limitation on restricted payments covenant contained in the Notes, the company generally is prohibited from making restricted payments unless it satisfies certain conditions, including having the ability to incur further indebtedness under the leverage and/or interest coverage conditions of the additional indebtedness covenant and having availability under its restricted payments basket. Because the company no longer satisfies either of such conditions for incurring further indebtedness under the indebtedness covenant and, as of March 31, 2008, has no restricted payments basket capacity under the provisions of its most restrictive issuance of Notes, the company is prohibited from making restricted payments. Investments in joint ventures may continue to be made, however, from funds held in the company's unrestricted subsidiaries. Based on current estimated funding requirements, and assuming that the company is successful in unwinding the joint ventures that it has targeted for termination and in extending certain joint venture loan maturities, the company believes that the funds in its unrestricted subsidiaries are sufficient to fund its joint venture investment obligations for the foreseeable future. The company's joint venture remargin obligations are cross- defaulted to its revolving credit facility to the extent the lenders in the company's joint ventures are also lenders under the revolving credit facility. This cross-default provision would be waived for the period of the Proposed Waiver Extension if this extension is obtained. To provide the company with a greater ability and flexibility to respond to unanticipated joint venture capital needs, it is currently evaluating and exploring a number of alternatives for reducing its joint venture investment obligations and enhancing its ability to make restricted payments. These alternatives include: (i) modifying joint venture cash flows to reduce peak capital requirements; (ii) accelerating land purchases from land development joint ventures to reduce joint venture capital requirements; (iii) exiting joint ventures by buying out a partner's interest or selling our interest; (iv) increasing joint venture distributions; (v) obtaining noteholder consent to modify the restricted payments covenant in one or more series of Notes; and (vi) raising equity, whether through debt for equity exchanges, the issuance of equity for cash or other means, any of which could potentially increase the restricted payments basket and potentially allow the company to meet the leverage condition of the Notes debt incurrence test. Financial Results The company incurred net loss of $216.4 million compared to a net loss of $40.8 million last year. The company's results for the 2008 first quarter included pretax impairment charges of $192.3 million, or $117.9 million. The impairment charges are a result of challenging homebuilding market conditions, including the increased use of sales incentives and the further erosion of home prices. At March 31, 2008, the company's balance sheet showed total assets of $2.9 billion, total liabilities of $2.1 billion and total stockholders' equity of roughly $800 million. About Standard Pacific Headquartered in Irvine, California, Standard Pacific Corp. (NYSE:SPF) -- http://www.standardpacifichomes.com/-- operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The company also provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures, Standard Pacific Mortgage Inc., SPH Home Mortgage, Universal Land Title of South Florida and SPH Title. * * * As reported in the Troubled company Reporter on Feb. 19, 2008, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Standard Pacific Corp. to 'B+' from 'BB-'. Additionally, S&P lowered its rating on the company's senior subordinated debt to 'B-' from 'B'. The outlook remains negative. STANDARD PACIFIC: Sudden Capital Needs Prompt Sale Plan ------------------------------------------------------- Standard Pacific Corp. intends to sell itself following recurring losses in the last six consecutive quarters due to a slump in the market, Bloomberg News reports. In a filing with the Securities and Exchange Commission, the company disclosed that its net loss for the quarter ended March 31, 2008 was $216.4 million, or $3.34 per share, compared to a net loss of $40.8 million, or $0.63 per share, in the year earlier period. Homebuilding revenues from continuing operations for the 2008 first quarter were $348.2 million versus $651.1 million last year. A more comprehensive report on the company's results for the quarter ended March 31, 2008, is in today's Troubled Company Reporter. According to that SEC Filing, to provide the company with a greater ability and flexibility to respond to unanticipated joint venture capital needs, it is currently evaluating and exploring a number of alternatives for reducing its joint venture investment obligations and enhancing its ability to make restricted payments. These alternatives include: (i) modifying joint venture cash flows to reduce peak capital requirements, (ii) accelerating land purchases from land development joint ventures to reduce joint venture capital requirements, (iii) exiting joint ventures by buying out a partner's interest or selling the company's interest, (iv) increasing joint venture distributions, (v) obtaining noteholder consent to modify the restricted payments covenant in one or more series of Notes and (vi) raising equity, whether through debt for equity exchanges, the issuance of equity for cash or other means, any of which could potentially increase the restricted payments basket and potentially allow the company to meet the leverage condition of the Notes debt incurrence test. The company also signed with its lenders a waiver extending its debt maturity until Aug. 14, 2008. A separate story on the waiver is reported in today's copy of the TCR. KDP Investment Advisors Inc. analyst Matt Wilcox said that banks appear "willing" to help the company, although under a tighter rule, Bloomberg relates. About Standard Pacific Headquartered in Irvine, California, Standard Pacific Corp. (NYSE:SPF) -- http://www.standardpacifichomes.com/-- operates in many of the largest housing markets in the country with operations in major metropolitan areas in California, Florida, Arizona, the Carolinas, Texas, Colorado and Nevada. The company also provides mortgage financing and title services to its homebuyers through its subsidiaries and joint ventures, Standard Pacific Mortgage Inc., SPH Home Mortgage, Universal Land Title of South Florida and SPH Title. * * * As reported in the Troubled Company Reporter on Feb. 19, 2008, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Standard Pacific Corp. to 'B+' from 'BB-'. Additionally, S&P lowered its rating on the company's senior subordinated debt to 'B-' from 'B'. The outlook remains negative. STRIKEFORCE TECH: Li & Company Expresses Going Concern Doubt ------------------------------------------------------------ Skillman, N.J.-based Li & Company, PC, raised substantial doubt on the ability of StrikeForce Technologies, Inc., to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's accumulated deficit and a working capital deficiency at Dec. 31, 2007, and its net loss and cash used in operations for the year ended Dec. 31, 2007. The company posted a net loss of $3,998,402 on total revenues of $661,580 for the year ended Dec. 31, 2007, as compared with a net loss of $3,154,234 on total revenues of $338,445 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $1,841,627 in total assets and $7,457,345 in total liabilities, resulting in $5,615,718 of stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $382,400 in total current assets available to pay $5,828,075 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b25 About StrikeForce Technologies Headquartered in Edison, N.J., StrikeForce Technologies Inc. (OTC BB: SKFT) -- http://www.strikeforcetech.com/-- provides solutions that help prevent identity theft. Its total protection solution strengthens companies' defenses against the biggest points of fraud -- when the Internet is accessed, when accounts are opened, when they're accessed, when they're changed, and each time there's a new transaction. SUN-TIMES MEDIA: Will Not Cure NYSE Listing Non-Compliance ---------------------------------------------------------- Sun-Times Media Group, Inc. (NYSE: SVN), whose Class A Common Stock is listed on the New York Stock Exchange, said it has notified NYSE Regulation, Inc. that the Company does not intend to attempt to cure its previously announced non-compliance with the NYSE's continued listing standards relating to average closing share price and average market capitalization. The Company expects the NYSE to suspend trading of the Class A Common Stock and to commence procedures to delist the stock, which the Company does not intend to appeal. The Company expects to move trading of the Class A Common Stock to the OTC Bulletin Board, effective upon delisting from the NYSE. Cyrus F. Freidheim, Jr., President and Chief Executive Officer, stated: "It is important to note this decision will not impact the Company's financial status or organization, nor will it have any effect on the way we conduct our business, or on the nature of our existing and future customer and partner relationships. It will also have no impact on Sun-Times Media Group's previously announced plan to explore strategic alternatives for the Company." Mr. Freidheim emphasized that this decision will not affect the Company's reporting and other obligations under the federal securities laws and that the Company will continue to report to shareholders on the same basis it has been. "We remain committed to achieving the goals we've shared all along: improved operating performance, resolution of the Company's unique legacy issues, and exploration of strategic alternatives for the Company." As reported by the Troubled Company Reporter, on March 26, 2008, the company was notified by NYSE Regulation Inc. that it was not in compliance with the NYSE's continued listing standard related to maintaining a consecutive 30-day average closing price for its Class A common stock of at or above $1.00 per share. Under NYSE rules, the company has six months to bring its share price and 30-day average closing price above $1.00, during which time the company's Class A common stock will continue to be listed on the NYSE. On April 4, 2008, Sun-Times Media was notified by NYSE Regulation that it is not in compliance with the New York Stock Exchange's continued listing standards because over a consecutive 30 trading day period the company's average total market capitalization was less than $75 million and the company's most reported shareholders' equity was below $75 million. Under applicable NYSE procedures, the company had 45 days from the receipt of the notice to submit a plan to the NYSE to demonstrate its ability to achieve compliance with the continued listing standards within 18 months. The company said that time that intends to submit a plan that will demonstrate compliance with the listing standards within the required time frame. About Sun-Times Media Group Headquartered in Chicago, Sun-Times Media Group Inc. (NYSE: SVN) - - http://www.thesuntimesgroup.com/-- is dedicated to being the premier source of local news and information for the greater Chicago area. Its media properties include the Chicago Sun-Times and Suntimes.com as well as newspapers and Web sites serving more than 200 communities throughout the Chicago area. Hollinger Inc. (TSX: HLG.C)(TSX: HLG.PR.B) -- http://www.hollingerinc.com/-- which owns approximately 70.1% voting and 19.7% equity interest in Sun-Times Media Group Inc., along with two affiliates, 4322525 Canada Inc. and Sugra Limited, filed separate Chapter 15 petitions on Aug. 1, 2007 (Bankr. D. Del. Case Nos. 07-11029 through 07-11031). Hollinger also initiated Court-supervised restructuring under the Companies' Creditors Arrangement Act (Canada) on the same day. As reported in the Troubled Company Reporter on April 3, 2008, Sun-Times Media Group Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $791.6 million in total assets and $866.6 million in total liabilities, resulting in a total stockholders' deficit of $75.0 million. TAHITI GARDENS: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Tahiti Gardens Associates, LLC 3301 N. 37 St. Hollywood, FL 33021 Bankruptcy Case No.: 08-15709 Type of Business: The Debtor owns and manages real estate. Chapter 11 Petition Date: May 5, 2008 Court: Southern District of Florida (Fort Lauderdale) Judge: Raymond B. Ray Debtor's Counsel: Joel M. Aresty, Esq. Email: aresty@mac.com 13499 Biscayne Blvd. #T-3 No. Miami, FL 33181 Tel: (305) 899-9876 Fax: (305) 723-7893 Total Assets: $5,000,000 Total Debts: $5,199,461 Debtor's 12 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Tahiti Gardens Apartments, LC $600,000 Attn: IDM Management, Inc. 5900 Stirling Road Hollywood , FL 33021 Ronald Kaiser $300,000 3446 Laurel Oak Ln. Hollywood, FL 33021 IDM Management, Inc. $241,000 5900 Stirling Rd. Hollywood , FL 33021 MIL Architecture, Inc. $17,750 Ship Shape Enterprises $8,000 Gable and Heidt $5,000 Carpet Express Wholesale $1,113 Wilmar $1,096 Laser Supply $700 Jays Restoration Plus $330 A.A.C. United Fire & Safety $316 Southeast Pest Control $156 TIDELANDS OIL: Malone & Bailey Expresses Going Concern Doubt ------------------------------------------------------------ Houston-based Malone & Bailey, PC, raised substantial doubt about the ability of Tidelands Oil & Gas Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring losses from operations and net working capital deficit. The company posted a net loss of $11,834,333 on $0.00 revenues for the year ended Dec. 31, 2007, as compared with a net loss of $11,836,925 on $0.00 revenues in the prior year. At Dec. 31, 2007, the company's consolidated balance sheet showed $12,237,172 in total assets and $12,512,248 in total liabilities, resulting in $275,076 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $924,722 in total current assets available to pay $12,512,248 in total current liabilities. At Dec. 31, 2007, the company has an accumulated deficit of $56,251,401. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b36 Sale of Various Assets Tidelands Exploration Management reported that on Sept. 11, 2007, the company's wholly owned subsidiary, Tidelands Exploration and Production Corporation, sold its interests in a natural gas pipeline, working interests in gas wells and related leaseholds with a net book value of $480,590 to Bentley Energy Corporation for $280,000 and assumption of a $28,036 joint-interest billing owed to the project operator. The sale resulted in a loss on disposal of $172,554, which has been included in Net Loss from Discontinued Operations in the income statement. Sonterra and Int'l Pipeline Biz The company also disclosed that it explored alternatives regarding debt repayments of over $7,600,000 due during the first six months of 2008. A decision was reached to sell its wholly-owned propane distribution subsidiary, Sonterra Energy Corporation, and its International Pipeline assets owned by Reef Ventures, LP, a 98% owned subsidiary. The sale transaction relating to Sonterra was completed Jan. 9, 2008, and Reef on Mar. 25, 2008. Sonterra's sales reported in discontinued operations for the years ended Dec. 31, 2007, and Dec. 31, 2006, were $2,544,619 and $1,921,763, respectively while Reef's sales reported in discontinued operations for the years ended Dec. 31, 2007, and Dec. 31, 2006, were $119,652 and $285,088, respectively. The pretax income for Sonterra included in discontinued operation for the year ended Dec. 31, 2007, was $311,634 and for the year ended Dec. 31, 2006, was $259,411. The pretax loss for Reef included in discontinued operations for the year ended Dec. 31, 2007, was $2,860,457 and for 2006 was $92,667. The 2007 pretax loss for Reef included an impairment charge of $2,605,061 based upon the company's assessment of the fair value of this operation. About Tidelands Oil Based in San Antonio, Texas, Tidelands Oil & Gas Corporation (OTC BB: TIDE.OB) -- http://www.tidelandsoilandgas.com/-- develops and operates mid-stream oil and gas projects including natural gas pipeline infrastructure, retail natural gas liquids sales, and natural gas receiving and storage facilities. TOLL BROTHERS: Says 2nd Qtr. Home Building Revenues Down 30% ------------------------------------------------------------ Toll Brothers Inc. reported second-quarter and six-month figures for home building revenues, contracts and backlog for the periods ended April 30, 2008. These results are preliminary and unaudited. The company will announce final results when it releases second-quarter and six-month earnings on June 3, 2008. For FY 2008's second quarter, home building revenues of about $817.9 million were 30% lower than FY 2007's second-quarter total of $1.17 billion. For FY 2008's first six months, home building revenues of about $1.66 billion were 27% lower than FY 2007's same-period total of $2.26 billion. FY 2008's backlog at second-quarter-end of about $2.08 billion was 50% lower than FY 2007's second-quarter-end backlog of $4.15 billion and 13% lower than FY 2008's first-quarter-end backlog of $2.40 billion. FY 2008 second-quarter gross contracts of about $730.5 million and 1,237 homes were 49% and 39% lower, respectively, than FY 2007's second quarter totals of $1.44 billion and 2,031 homes. In FY 2008's second quarter, the company had 308 cancellations totaling about $234.1 million, compared to 384 cancellations totaling $274.7 million in FY 2007's second quarter. FY 2008 second-quarter net contracts (after cancellations) totaled 929 homes, or about $496.4 million, which were lower by 44% in units and 58% in dollars than FY 2007's second-quarter results of 1,647 net contracts, or $1.17 billion. The average price per unit of gross contracts signed in FY 2008's second quarter was $590,000, compared to $711,000 in FY 2007's second quarter, and $634,000 in FY 2008's first quarter. The lower average price was due to a combination of factors: higher incentives; a product mix which included a higher percentage of contracts from active adult and other lower priced communities; and fewer sales in high-priced markets such as California, and Manhattan where the company is temporarily sold out. The average price of the second-quarter FY 2008 cancellations was $760,000 per unit. The effect of these cancellations, coupled with the factors above, was to reduce the average price of net contracts in FY 2008's second quarter to $534,000 per unit. This compared to $580,000 and $557,000, respectively, in FY 2008's first quarter and FY 2007's fourth quarter and $710,000 in FY 2007's second quarter. FY 2008 six-month net contracts totaled 1,576 homes, or about $871.5 million, a decline of 41% in units and 55% in dollars, compared to FY 2007's same period results of 2,674 net contracts, or $1.92 billion. The company, which has continued to renegotiate and, in some cases, reduce its optioned land positions, ended FY 2008's second quarter with about 51,800 lots owned and optioned, compared to about 91,200 at its peak at the end of the second quarter of FY 2006. The company ended FY 2008's second quarter with 300 selling communities, compared to 315 at 2008's first-quarter-end and its peak of 325 at FY 2007's second-quarter-end. The company expects to be selling from about 290 communities by fiscal-year-end 2008. Toll Chairman Maintains Optimism Robert I. Toll, chairman and chief executive officer, stated: "The just-completed spring selling season was quite weak in most markets as buyers remained on the sidelines. We believe there is significant pent-up demand which is growing. When we have held promotions, buyers have come out to play and put down deposits. Often, however, a lack of confidence in the direction of home prices overcomes their enthusiasm and they don't take the next step of going to contract. They, like all of us, read the papers and watch TV, both of which keep advising them that home prices are declining. "Interest rates are still low, affordability has improved and there is an abundance of inventory for customers to choose from. It is clearly a buyers' market, but buyers can only take advantage of it if they buy; sooner or later they will but, unfortunately, we can't predict when. "In these tough times, we continue to focus on our balance sheet and liquidity. We ended 2008's second quarter with about $1.23 billion in cash and another $1.27 billion available under our bank credit facility, which matures in 2011. With over $2.5 billion of available capital we hope to be able to take advantage of opportunities that we expect will arise from today's distress. We are looking for deals in most markets but have yet to see any opportunities that fit our parameters of high-end communities at bargain prices. More offerings have come to market recently but nothing has excited us yet. "When the market recovers, we believe our playing field, which is the luxury market, will have fewer competitors. Currently, and for the foreseeable future, we believe banks and the public debt markets will continue to put constraints on the amount of capital available to most builders; this, logically, will favor those companies with the strongest balance sheets. "By developing incentive strategies on a community-by-community basis, we have been selling homes in a difficult market while maintaining the reputation of our communities. While our sales strategy results in slower sales paces, to-date it has helped us sustain (pre-write-off) profitability and, coupled with our reduced land and land development expenditures, enabled us to strengthen our cash position. Since we already own several years' supply of land in most markets, we do not have to keep buying land to maintain our operations at today's lower sales paces. With no major public debt due until 2011 we believe we can sustain this strategy for quite some time." Robert I. Toll continued: "Various branches of the federal government have proposed many programs to aid the housing market. We favor those initiatives that we believe will stabilize home prices by encouraging demand through a tax incentive for those who buy homes between now and Nov. 1, 2008. We believe that stimulating demand will help reduce inventories and stop the drop in home prices, which will likely stabilize many other components of the current housing and financial crisis. If demand picks up, the market can return to equilibrium. Homes collateralize huge amounts of debt; if people can sell their homes for more than their debt, they will do so rather than go into foreclosure. We believe escaping the current downward spiral of weak confidence and falling home prices is the key to righting the listing housing market and stemming the debt crisis." Toll CFO Expects Continued Challenging Times Joel H. Rassman, chief financial officer, stated: "With conditions still weak in most markets, we expect to continue to face challenging times ahead. We are still in the midst of finalizing our second-quarter impairment analysis; however, we currently estimate that pre-tax write-downs in FY 2008's second quarter will be between $225 million and $375 million." Default Notices to Joint Ventures On March 17, 2008, the TCR related that two default notices were sent to Inspirada and Kyle Canyon Gateway, two large housing projects in Las Vegas and joint ventures involving Focus Property Group, Toll Brothers Inc., KB Home, Beazer Homes USA Inc., Pulte Homes Inc., The Ryland Group Inc., and Lennar Corp., according to Reuters and Bloomberg News, citing Focus officers, John Ritter, CEO, and Thomas DeVore, COO. Kimball Hill Homes, one of Toll's partners, is part of the Inspirada development. The default notices were issued after an interest payment on a $765 million loan was left unpaid. Toll Warns of "Visible Financial Stress" As reported by the TCR on March 14, 2008, Toll Brothers has investments and commitments to certain joint ventures with unrelated parties to develop land. According to the company, these joint ventures usually borrow money to help finance their activities. With the continued downturn in the homebuilding industry, some of these joint ventures or their participants have become unable to fulfill their obligations, Toll said in a Securities and Exchange Commission filing. Toll warned that the joint if the joint ventures or their participants do not honor their obligations, the company it may be required to expend additional resources or suffer losses, which could be significant. Toll chief financial officer Joel Rassman said that the company has several partners who are in "visible financial stress" and added that he can not disclose further details. About Toll Brothers Toll Brothers Inc. (NYSE: TOL) -- http://www.tollbrothers.com/-- designs, builds, markets and arranges finance for single-family detached and attached homes in luxury residential communities. The company is also involved, directly and through joint ventures, in projects where it is building, or converting existing rental apartment buildings into high-, mid- and low-rise luxury homes. During the fiscal year ended Oct. 31, 2007 (fiscal 2007), the company delivered 7,023 homes from 385 communities. In fiscal 2007, the company has introduced 70 new single-family detached models, 28 new single-family attached models and 32 new condominium units. The four segments operated by the company includes the North, the Mid-Atlantic, the South and the West. * * * As reported by the Troubled company Reporter on March 31, 2008, Moody's Investors Service placed all of the ratings of Toll Brothers, Inc., Toll Brothers Finance Corp., and Toll Corporation under review for possible downgrade, including the company's Baa3 rating on existing senior unsecured note issues and Ba2 rating on the subordinated note issues. TOPANGA CDO: Moody's Junks $26MM Note; To Review Rating ------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by TOPANGA CDO, LTD. Class Description: $49,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2045 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $37,000,000 Class A-2 Floating Rate Senior Secured Notes Due 2045 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: $26,000,000 Class B Floating Rate Deferrable Subordinate Secured Notes Due 2045 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $20,000,000 Class C Floating Rate Deferrable Junior Subordinate Secured Notes Due 2045 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: Ca According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. TORO ABS: Moody's Downgrades Ratings on Seven Note Classes ---------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Toro ABS CDO II, Ltd. Class Description: $885,000,000 Class A-1 First Priority Senior Secured Floating Rate Delayed Draw Notes Due June 2043 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Aa1, on review for possible downgrade Class Description: $56,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due June 2043 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $24,000,000 Class B Third Priority Senior Secured Floating Rate Notes Due June 2043 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: Ca Class Description: $7,000,000 Class C Fourth Priority Senior Secured Floating Rate Notes Due June 2043 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ca Class Description: $9,000,000 Class D Fifth Priority Mezzanine Secured Deferrable Floating Rate Notes Due June 2043 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Ca Class Description: $10,500,000 Class E Sixth Priority Mezzanine Secured Deferrable Floating Rate Notes Due June 2043 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca Class Description: $4,000,000 Class F Seventh Priority Mezzanine Deferrable Floating Rate Notes Due June 2043 -- Prior Rating: Ca -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. TRANSMERIDIAN INC: Sale Efforts Collapse; Seeks Capital Infusion ---------------------------------------------------------------- Transmeridian Exploration Incorporated said that its previously disclosed efforts to seek a buyer have not produced a satisfactory transaction. As a result, while the company remains willing to entertain unsolicited proposals from qualified persons for an acquisition of the company, it is now seeking to raise additional capital with which to further develop its primary asset, the South Alibek field in western Kazakhstan. As part of this effort, the company is in preliminary discussions with interested parties regarding a substantial investment of equity capital into the company. Based on current field production levels of about 2,200 barrels of oil per day, management believes that the company can continue to generate sufficient cash flow to fund its ongoing operating costs, overhead and cash interest requirements. The company continues to have a working capital deficit and does not generate sufficient excess cash to re-activate a multi-rig drilling and workover program in order to increase field production. The company experienced production levels in excess of 4,000 bopd prior to field curtailments in 2007. If the company is successful in raising additional capital, management believes that by investing the net proceeds in an effort to restore field production to levels previously experienced, and to further develop the field, the company will be better positioned to maintain and expand its reserve base in South Alibek or complete a strategic transaction. Significant obstacles to raising additional capital include, among other factors, the company's high debt level relative to cash flow and potential dilution from existing convertible preferred securities, and there can be no assurance that current discussions will result in any agreement or transaction. Definitive Agreement With TMI As reported by the Troubled Company Reporter on April 29, 2008, Transmeridian said on Dec. 31, 2007, that it entered into a definitive agreement to be acquired by Trans Meridian International, Inc., a company formed by its Chairman and CEO Lorrie T. Oliver. Pursuant to the agreement, TMI would commence a tender offer to purchase all of Transmeridian's outstanding shares of common stock for $3.00 per share in cash. As TMI has not met the financing condition in the definitive agreement within the prescribed time period, which Transmeridian extended from Jan. 31, 2008, to Feb. 15, 2008, Transmeridian had the option to terminate the agreement at any time until the condition is satisfied. Transmeridian's board of directors had requested certain detailed information regarding TMI's financing be provided by March 21, 2008. According to the company's filing with the Securities and Exchange Commission, if Transmeridian's board is not satisfied with the information, then it intends to terminate the agreement if the financing condition is not satisfied by March 31, 2008. As of April 2008, Transmeridian's board was not satisfied with the information provided. Executive Resignation On April 14, 2008, Edward G. Brantley resigned as Vice President and Chief Accounting Officer of Transmeridian. Going Concern Doubt UHY LLP in Houston raised substantial doubt on Transmeridian's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm pointed to the company's negative working capital, stockholders' deficit, and operating losses since its inception. About Transmeridian Exploration Based in Houston, Transmeridian Exploration Inc. (AMEX: TMY) -- http://www.tmei.com/-- is an independent energy company that acquires, develops and produces oil and natural gas. The company's activities are primarily focused on the Caspian Sea region of the former Soviet Union. The company currently has projects in Kazakhstan and southern Russia. Its primary oil and gas property is the South Alibek Field in the Republic of Kazakhstan, covered by License 1557 and the related exploration and production contracts. The company conducts its operations in Kazakhstan through its wholly owned subsidiary, JSC Caspi Neft TME, a joint stock company organized under the laws of Kazakhstan. The company has a 100% interest in both Caspi Neft and the Field. TRIBUNE CO: Sells 97% Stake of Newsday to Cablevision for $650MM ---------------------------------------------------------------- Cablevision Systems Corporation and Tribune Company disclosed a definitive agreement to form a new partnership through which Cablevision will acquire approximately 97% of Newsday Media Group. Newsday was valued at $632 million in the transaction, and Tribune Company will also receive $18 million at closing as prepaid rent under certain leases of property used in the business, bringing the total transaction value to $650 million. The partnership will add a complementary print and online media group with diverse, quality local content to Cablevision that generates substantial operating cash flow and that creates opportunities to grow Cablevision's advertising, subscription and content-based businesses. Newsday is one of the nation's daily newspapers, serving Long Island and New York City. In addition to the newspaper and Newsday.com, Newsday Media Group includes amNY, plus the Star Community Publishing Group of weekly shoppers and Island Publications' portfolio of lifestyle magazines. "Newsday is one of the great names in the history of American journalism and it is both an honor and privilege to return Newsday back to Long Island-based ownership after nearly 40 years," Cablevision chairman Charles F. Dolan said. "We admire Newsday's strong editorial voice and reputation for quality well as its leadership in print and online journalism. We are committed to maintaining Newsday's journalistic integrity and important position in the marketplace." "This agreement enables us to maximize the value of Newsday and still retain an interest in this valuable asset," Tribune chairman and CEO Sam Zell said. The newspaper has a unique circulation base and a tremendously strong local brand -- I expect them to grow and flourish as a result of this new partnership." "Both Cablevision and Newsday are in the content, customer relationship and advertising business and we see this as a wonderful fit," Cablevision president and CEO James L. Dolan continued. Mr. Dolan said adding Newsday Media Group's superb assets to Cablevision's portfolio presents a multitude of opportunities: -- to provide consumers with additional quality content on multiple platforms; -- expand advertising opportunities for both entities; and -- attract a larger audience than either company could on its own. "We strongly believe Newsday Media Group and Cablevision share the same consumer-focused values, and we look forward to building on our mutual history in the New York area with these wonderful assets under the same umbrella," Mr. Dolan said. For Cablevision, the Newsday partnership adds a complementary print and online media group with diverse, quality local content in the New York area. The combined company will gain significant opportunities in its advertising-based businesses and subscription-based businesses, while also adding to its content portfolio and enhancing its commitment to the local community. These opportunities include: * marketing Newsday more effectively with the ability to reach directly hundreds of thousands of Long Island households served by Cablevision -- the majority of whom do not subscribe to Newsday; * providing enhanced news gathering resources and expertise to better serve the New York metro area; * offering Cablevision's 2.3 million Optimum Online high-speed Internet subscribers new interactive and homepage opportunities; * promoting Cablevision's live sports and entertainment assets through Newsday's publications, particularly amNewYork, with its New York City circulation of more than 300,000; * offering advertisers a selection among various media outlets that enables each advertiser to most efficiently and effectively target its audience; * using Newsday's expertise in developing innovative solutions for advertisers with its newspapers, magazines and Web sites to ensure the best approach to promoting ad insertions on Cablevision's 70 most popular cable channels; and * increasing classified advertising reach through Newsday, Cablevision's Optimum Homes and Optimum Autos interactive television classified services, and Newsday's Star. Under the terms of the transaction, Cablevision will have approximately 97% and Tribune will have approximately 3% of the equity in a partnership that owns Newsday. To form the new partnership, Tribune will contribute the Newsday assets, and Cablevision will contribute newly issued parent company bonds with a fair market value of $650 million on the contribution date. Bank of America has provided a firm commitment to provide $650 million of senior debt financing, guaranteed by CSC Holdings, Inc., to the new partnership. Of that amount, Tribune will receive $612 million in cash, an equity stake in the partnership valued at $20 million and another $18 million in prepaid rent under leases for certain facilities used in the business. In addition, Cablevision will provide additional funds to pay certain transaction costs. Mr. Dolan indicated that the Newsday businesses will report to Cablevision chief operating officer Thomas Rutledge. Banc of America Securities LLC acted as lead financial advisor to Cablevision and Merrill Lynch & Co. also provided financial advisory services on the transaction. Both Hughes Hubbard & Reed LLP and Sullivan & Cromwell LLP acted as legal counsel to Cablevision. Citi acted as the financial advisor to Tribune, and McDermott Will & Emery Sidley Austin and Paul Hastings acted as legal counsel to Tribune. The completion of this transaction is subject to certain customary closing conditions, including regulatory approval. The Newsday Media Group Assets are: * Newsday -- provides award-winning news and information, reaching 1.5 million Long Island adults each week * amNY -- launched in 2003, has quickly become the largest free daily newspaper in NYC with an average weekday circulation of 335,000 * Newsday Interactive -- includes Newsday.com and other local information sites such as ExploreLI.com and Newsday.com/NZone, the popular high school sports destination. In March 2008, Newsday.com reached 3.2 million monthly unique visitors and delivered over 66 million page views * Star Community Publishing -- the Northeast's weekly shopper group with 181 editions and circulation of more than 2.6 million * Island Publications -- produces targeted lifestyle magazines including Distinction, Wellness, Parents & Children, LI Weddings and This Month on Long Island Cablevision Systems Corporation About Cablevision Systems Cablevision Systems Corporation (NYSE: CVC) -- is a cable operator in the United States that operates cable programming networks, entertainment businesses and telecommunications companies. As of Dec. 31, 2006, the company served approximately 3.1 million basic video subscribers in and around the New York City metropolitan area. Through its wholly owned subsidiary, Rainbow Media Holdings LLC, Cablevision owns interests in and manages numerous national and regional programming networks, the Madison Square Garden sports and entertainment businesses, and cable television advertising sales companies. Through Cablevision Lightpath Inc., its wholly owned subsidiary, the company provides telephone services and Internet access to the business market. The company operates in three segments: Telecommunications Services, Rainbow and Madison Square Garden. About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. * * * As reported in the Troubled Company Reporter on March 20, 2008, Standard & Poor's Ratings Services lowered its ratings on the class A and B units from the $79.795 million Structured Asset Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1 to 'CCC' from 'CCC+' and removed them from CreditWatch with negative implications. TRIBUNE CO: $650MM Newsday Sale Won't Affect S&P's 'B-' Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that the sale of Newsday Media Group by Tribune Co. (B-/Negative/--) for $650 million has no immediate impact on the Tribune rating or outlook. S&P note, however, that its covenant analysis incorporates the expectation that the company will complete additional asset sales (including the disposition of the Chicago Cubs, Wrigley Field, the company's 25% interest in Comcast SportsNet Chicago, ancillary real estate around Wrigley Field, and other ancillary real estate assets) of up to approximately $1 billion or more over the near term. Since the close of the company's LBO in December 2007, S&P's rating on Tribune has reflected concerns that the company may violate covenants in its secured credit facility in early 2009 because of declining cash flow generation. Even after the application of more than $600 million in cash proceeds from the Newsday sale toward debt repayment, Tribune could still violate its leverage covenant, potentially as early as the December 2008 quarter, in the absence of additional asset sales. Newsday is being sold at a multiple that unfavorably impacts the pro forma covenant calculation after the deal closes (the anticipated closing date has not been announced, but for purposes of its analysis, S&P have assumed the sale closes in the September 2008 quarter). S&P believe that Tribune will use proceeds from additional asset sales to repay bank debt sooner than required to avoid potentially violating the company's guaranteed leverage covenant later this year. This scenario assumes declines in EBITDA in the 20% area in 2008, consistent with an EBITDA decline of about 20% in the March 2008 quarter. S&P's estimate of guaranteed leverage (as calculated by Tribune's credit agreement) was in the low 8x area at March 2008, compared to the 9x covenant. The covenant steps down to 8.75x in the March 2009 quarter. S&P could lower the rating if cash flow generation deteriorates over the near term at a rate faster than its current expectation, or if Tribune does not reach agreements to sell assets at the expected amounts or within the necessary time frame. TROPICANA ENT: Parties Have Until May 23 to Object to DIP Funding ----------------------------------------------------------------- Parties-in-interest in the Chapter 11 cases of Tropicana Entertainment LLC and its debtor-affiliates have until May 23, 2008, to file written objections to the Debtors' request to access credit of up to $67 million from a group of lenders, led by Silver Point Finance, LLC, as administrative agent. Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware permitted the Debtors to borrow, on an interim basis, up to $20 million in financing. The Debtors will use the money to meet their working capital needs, including making payments to employees, vendors and various governmental and taxing and licensing authorities. The Debtors proposed to access the remaining $37 million upon final approval of the DIP Facility. A final hearing with respect to the Debtors' request will be held on May 30, 2008. Before the bankruptcy filing, Tropicana Casinos and Resorts Inc., retained Lazard Freres & Company LLC, to explore strategic opportunities relating to its capital structure, including obtaining DIP financing for the Debtors. In February 2008, Daniel Aronson, managing director at Lazard's restructuring group, met with Credit Suisse, agent for the senior secured lenders under the $1.3 billion OpCo Credit Facility and $440,000,000 LandCo Credit Facility. Credit Suisse, however, said it was not interested in providing DIP financing. By March, Mr. Aronson solicited proposals from 12 parties, including the financial advisor to certain holders of the Debtors' unsecured notes. Only Silver Point Finance, who is also a substantial OpCo and LandCo lender, and one other unrelated party were willing to negotiate a DIP financing loan and secured by priming lien without the consent of the senior secured lenders. The Debtors did not proceed with the unrelated party's proposal because it entailed a high risk of distracting and costly priming and adequate protection disputes, as the potential lender was not a pre-existing senior secured lender, Mr. Aronson relates. In April, Mr. Aronson received proposals from the LandCo lenders and certain of the holders of notes, aggregating $960,000,000, issued by Tropicana Entertainment, LLC and Tropicana Finance Corp. The Debtors, however, did not proceed with the LandCo lenders' proposal due to pricing and structural concerns. The Debtors also declined the Noteholders' proposal because of numerous unacceptable operational restrictions and other control features. According to Mr. Aronson, Silver Point's loan proposal was selected on improved terms as a result of the marketing process. He informs the Court that Silver Point has agreed to provide loans of up to $67 million, but has only set very limited operational restrictions and control provisions that are more appropriate and more manageable from the company's perspective. A full-text copy of the DIP Credit Agreement is available for free at http://bankrupt.com/misc/Tropicana_DIPAgreement.pdf A full-text copy of the Interim DIP Order is available for free at http://bankrupt.com/misc/Tropicana_InterimDIPOrder.pdf About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856) Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq. at Richards Layton & Finger represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' consolidated financial condition as of Feb. 29, 2008, showed $2,845,847,596 in total assets and $2,429,890,642 in total debts. (Tropicana Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TTM TECHNOLOGIES: S&P Rates $155MM Senior Notes 'BB-' ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating on Santa Ana, California-based TTM Technologies Inc.'s $155 million senior unsecured convertible notes due 2015. The recovery rating on the notes is '4', indicating the expectation for average (30% to 50%) recovery in the event of a payment default. At the same time, S&P affirmed the 'BB-' corporate credit rating on the company. The outlook is positive. TTM will proceeds from the notes to fully repay its term loan and for general corporate purposes. S&P will withdraw the 'BB+' issue-level rating and '1' recovery rating on TTM's existing $240 million senior secured credit facilities following the close of the transaction. "The rating reflects challenges associated with difficult industry conditions in the electronic manufacturing service sector and a relatively short operating track record following the Tyco acquisition," said Standard & Poor's credit analyst Lucy Patricola. "These factors are offset partially by TTM's niche position as a manufacturer of both quick-turn and low-volume printed circuit boards, and light leverage for the rating." Following its acquisition of the Tyco business, TTM is the largest U.S.-based manufacturer of printed circuit boards. TTSF LP5: Voluntary Chapter 11 Case Summary ------------------------------------------- Lead Debtor: TTSF, LP#5 aka Texas Tomic Sharma Family Ltd 5 10110 Westview Houston, TX 77043 Bankruptcy Case No.: 08-32903 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- TTSF, LP#6 08-32907 aka Texas Tomic Sharma Family Ltd. 6 Chapter 11 Petition Date: May 5, 2008 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtors' Counsel: James R. Clark, Esq. 4545 Mt. Vernon Houston, TX 77006 Tel: (713) 532-1300 Fax: (713) 532-5505 Email: jamesrclark@swbell.net Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtors did not file a list of their largest unsecured creditors. TOUSA INC: Wants Exclusivity Periods Stretched to October 25 ------------------------------------------------------------ TOUSA Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to extend: (a) their Exclusive Filing Period through October 25, 2008; and (b) their Exclusive Solicitation Period through December 24, 2008. On a consolidated basis, the Debtors have more than $2,000,000,000 in funded debt, along with substantial unsecured claims spread among more than 50,000 potential creditors, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, relates. The Debtors also face industry-related challenges. Among other things, operating while reorganizing under Chapter 11 has proven to be difficult for other homebuilders, a fact that the Debtors noted and took seriously in planning for and implementing their own bankruptcy filing, Mr. Singerman says. Moreover, the homebuilding industry continues to face adverse market conditions with a variety of factors contributing to downward pressure on home prices, he continues. Adding to the complexity the Debtors are facing are certain unsecured creditors, who wish to sue the Debtors' bank lenders, seeking to avoid the banks' claims in litigation that has potential to be expensive, time-consuming and deeply factual in nature, Mr. Singerman tells the Court. "This litigation, if commenced during the Debtors' Chapter 11 cases and if fully successful, could have a profound impact on the Debtors' capital structure," he adds. Despite these challenges, Mr. Singerman states that the Debtors have made remarkable progress in their bankruptcy cases. They have: -- successfully negotiated and implemented a secured postpetition financing arrangement that, while never drawn upon, inspired confidence of their customers, vendors, employees and other key constituencies; -- completed and filed their tax return for the 2007 tax year, and received a tax refund of approximately $207,000,000; -- implemented and substantially completed a process for reviewing and, where authorized and appropriate, paying prepetition mechanic's and other statutory lien claims so as to allow sales of homes in the ordinary course of business free and clear of lien claims; and -- developed a detailed business plan, modeled on a "bottoms- up," community by community basis, that will form basis for discussions and negotiations regarding a plan of reorganization, and presented the Business Plan to key creditor constituencies, as part of an ongoing process of providing information and access to creditor groups in support of plan negotiations. The Debtors are still within the initial 120-day period set forth in Section 1121(b) of the Bankruptcy Code, in which the Debtors have the exclusive right to file a Chapter 11 plan, Mr. Singerman says. As set forth in Section 1121(c)(3), if the Debtors file a Chapter 11 plan within the Exclusive Filing Period, they then will have the exclusive right for a period of 180 days from the Petition Date to solicit and obtain creditor acceptances of any filed plan. The Debtors' current Exclusive Filing Period expires on May 28, 2008, and the Exclusive Solicitation Period expires on July 27, 2008. Mr. Singerman notes that Section 1121(d) provides, in part: On request of a party in interest made within the respective periods specified in subsections (b) and (c) of this section and after notice and a hearing, the court may for cause . . . increase the 120-day period or the 180-day period referred to in this section. Although the Debtors are pleased with their progress so far, they maintain that it would be impossible for them to bring the plan process to conclusion by May 28. Mr. Singerman relates that before a plan of reorganization could possibly be proposed, the Debtors and other parties-in-interest must, among other things: -- implement the Business Plan; -- reach a longer-term arrangement regarding the use of cash collateral so as to allow for business operations in accordance with the Business Plan; -- after the claims bar date passes and creditor claims are received, develop and implement a process for review and, ultimately, allowance or disallowance of claims; and -- develop an appropriate process and mechanisms for pursuing the Avoidance Litigation either during or after the Debtors' Chapter 11 cases. The Debtors and their advisors have commenced work in those areas, but need more time to reach a conclusion that a plan of reorganization can be documented, filed, voted upon and ultimately confirmed, Mr. Singerman says. The facts and circumstances of the Debtors' Chapter 11 cases demonstrate that more than sufficient cause exists to extend the Exclusive Periods, Mr. Singerman asserts. Thus, by this motion, the Debtors ask the Court to extend: (a) their Exclusive Filing Period through October 25, 2008; and (b) their Exclusive Solicitation Period through December 24, 2008. Mr. Singerman maintains that the Debtors have been paying their undisputed postpetition bills as they become due. Moreover, the Debtors aver that significant liquidity they generated from their better-than-projected sales performance and the receipt of the tax refund will enable them to continue to meet postpetition obligations as they come due. Thus, the extension will not jeopardize the rights of creditors and other parties who do business with the Debtors during their Chapter 11 cases, Mr. Singerman assures the Court. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. (TOUSA Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Termination Date Further Extended to May 23 ------------------------------------------------------ TOUSA Inc. and its debtor-affiliates inform the U.S. Bankruptcy Court for the Southern District of Florida that the Interim Termination Date for their DIP Credit and Security Agreement, dated January 29, 2008, as amended, has been extended from May 8, 2008, to May 23, 2008. As provided in the DIP Credit Agreement, the Interim Termination Date may be further extended by written consent of Citicorp North America, Inc., provided that no extension may be granted beyond May 30, 2008, without further amendment of the DIP Credit Agreement. As reported by the Troubled Company Reporter on Jan. 31, 2008, the Debtors sought permission from the Court to obtain up to $650 million of debtor-in-possession financing from financial institutions led by Citigroup Global Markets Inc. as sole lead arranger and bookrunner. Specifically, the DIP Credit Agreement provides for a first priority and priming secured revolving credit commitment of up to $130 million, which will be made available after entry of an interim DIP Order. As reported in the TCR on Feb. 1, the Court permitted the Debtors to borrow, on an interim basis, up to $134,574,000 from Citigroup Global Markets Inc. and a syndicate of lenders to pay for their normal operating expenses. As reported by the TCR on March 26, 2008,the Debtors notified the Court on March 16, 2008, that they amended their Senior Secured Super-Priority Debtor-in-Possession Credit and Security Agreement, with Citicorp North America, as administrative agent; Citibank, N.A., as issuer; and Citicorp North America, Inc., as lender. The recent DIP Amendments include new definition of certain terms; additional provisions to certain sections of the credit agreement; and restatements of certain sections. A full-text copy of the First DIP Facility Amendment is available for free at http://bankrupt.com/misc/TOUSA_DIPamendment.pdf About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. (TOUSA Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TOUSA INC: Seeks Permission to Continue Using Cash Collateral ------------------------------------------------------------- TOUSA Inc. and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the Southern District of Florida to continue using cash collateral of their Prepetition Secured Lenders. The Debtors had restated or entered into three prepetition secured credit agreements with various lenders. As of the bankruptcy date, these amounts were outstanding with respect to the Prepetition Credit Facilities: Loan Maturity Outstanding Credit Agreement Amount Date Amount ---------------- ------ -------- ----------- Second Amended and $700,000,000 03/09/10 $316,425,229 Restated First Lien Revolving Credit Agreement First Lien Term Loan $200,000,000 07/31/12 $199,000,000 Credit Agreement Second Lien term Loan $300,000,000 07/31/13 $317,101,998 Credit Agreement On January 31, 2008, the Court granted, on an interim basis, the Debtors authority to obtain secured postpetition financing on a super-priority and priming lien basis, and authority to use the Prepetition Lenders' cash collateral under the Prepetition Credit Facilities. Since the Petition Date, the Debtors have continued to sell and deliver homes in the ordinary course of business despite nationwide challenges in the real estate market. With respect to home sales, the Debtors have significantly exceeded their projections, signing 356 new net sales contracts in February 2008, and 448 new net sales contracts in March 2008, Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida, relates. Deliveries of homes to customers also exceeded prepetition projections, with delivery of 340 homes in February 2008, and 512 homes in March 2008. As a result of the Debtors' smooth transition to operating in Chapter 11, as of April 25, 2008, the Debtors have never borrowed under the Interim DIP Order. Mr. Singer discloses that the Debtors have utilized the Prepetition Lenders' cash collateral, but in fact have increased their total cash holdings since the Petition Date -- they currently hold approximately $316,000,000 in their operating bank accounts and certain segregated accounts. Moreover, on April 23, 2008, TOUSA, Inc., received from the Internal Revenue Service a federal tax refund of roughly $207,300,000 from the carryback of its 2007 losses, Mr. Singerman relates. At this time, it does not appear likely that the Debtors will seek final approval of the DIP Financing as their cash holdings appear to be sufficient to meet projected funding needs and authorization for use of the Prepetition Lenders' cash collateral is all that is needed, Mr. Singerman tells the Court. The Debtors are currently discussing with various constituencies, including the First Lien Lenders and the Official Committee of Unsecured Creditors, terms on which they may use the Prepetition Lenders' cash collateral upon expiration of the Interim DIP Order, Mr. Singerman says. In any event, absent any further extension of the Interim DIP Order, the Debtors seek authority to use their cash collateral sufficient to fund their business operations on appropriate terms, according to Mr. Singerman. Because negotiations are ongoing, the Debtors are not in a position at this time to set forth the proposed terms of cash collateral usage, he avers. The Debtors also ask the Court to waive the provisions of Rule 9075-1(B) of the Local Rules for the United States Bankruptcy Court for the Southern District of Florida, which require an affirmative statement that the Debtors made a bona fide effort to resolve the issues raised in the Cash Collateral Motion, as the Debtors are currently engaged in negotiations with relevant constituents and the relief requested is urgent in nature. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is selected as the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. (TOUSA Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). VALLEJO CITY: Unions Agree to $10,000,000 in Wage Concessions ------------------------------------------------------------- KCBS reports that unions representing police and firefighters have presented a proposal to keep the city of Vallejo out of bankruptcy. The unions have offered to reduce members' salaries by up to $10,000,000, KCBS says, citing Matt Mustard of the Vallejo Police Officers Association. Vallejo is facing a $16 million deficit. ABC7's Carolyn Tyler reports that the salaries and benefits of police officers and fire fighters make up nearly 75% of the city's general fund. KCBS relates that Vallejo city officials and the unions were unable to reach a pact to cut wages prior to a city council vote to file for Chapter 9 bankruptcy. According to KCBS, Mr. Mustard said the plan may win acceptance when the council meets on Tuesday. Ms. Tyler reports that the police officers and fire fighters groups have agreed would agree to a 6.5% salary cut until March 2009 and give up a current 1.7% raise and 11% in scheduled raises. Ms. Tyler says other city employees would contribute a 3% salary cut but get comp time in exchange. The public safety officers would also give up 10% in scheduled increases over the next two years, Ms. Tyler relates. City Councilwoman Joanne Shivley, however, told Ms. Tyler the city needs a long term solution. "[T]here is more that needs to be cut than simply salaries. There are benefits that are overly generous," Ms. Shivley said. The council was scheduled to review the police and firefighters' proposal at a closed door session Tuesday, Ms. Tyler says. As reported by the Troubled Company Reporter on May 8, 2008, top Vallejo officials unanimously voted for the city to file for Chapter 9 bankruptcy protection. The city is expected to file for bankruptcy this week, reports say. About the City of Vallejo Vallejo -- http://www.ci.vallejo.ca.us/GovSite/-- is a city in Solano County. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. VARICK STRUCTURED: Moody's Chips Ratings on Two Note Classes to B3 ------------------------------------------------------------------ Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Varick Structured Asset Fund, Ltd. Class Description: $50,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes due 2035 -- Prior Rating: Ba2 -- Current Rating: B3, on review for possible downgrade Class Description: $300,000,000 Class A-2 First Priority Senior Secured Floating Rate Notes due 2035 -- Prior Rating: Ba2 -- Current Rating: B3, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. VERTICAL ABS: Moody's Cuts Rating on $5MM Notes to C from Caa1 -------------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible downgrade the ratings on these notes issued by Vertical ABS CDO 2006-2, Ltd.: Class Description: $335,000,0001 Class A-S1VF Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $52,000,000 Class A1 Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: $41,000,000 Class A2 Senior Secured Floating Rate Notes Due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: $26,000,000 Class A3 Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Ba3, on review for possible downgrade -- Current Rating: Ca Class Description: $21,000,000 Class B Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: C Class Description: $5,000,000 Class C Mezzanine Secured Deferrable Interest Floating Rate Notes Due 2046 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: C According to Moody's, the rating actions reflect increased deterioration in the credit quality of the structured finance securities. VERTICAL COMPUTER: Malone & Bailey Raises Substantial Doubt ----------------------------------------------------------- Malone & Bailey, PC, in Houston raises substantial doubt on Vertical Computer Systems, Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's losses from operations and working capital deficiency. For the year ended Dec 31, 2007, the company posted a $1,566,345 net loss on $5,895,726 of total revenues compared with a $1,728,709 net loss on $6,229,944 of total revenues in 2006. The company's balance sheet at Dec 31, 2007, showed $1,236,169 in total assets and $16,444,488 in total liabilities, resulting in a $15,208,319 stockholders' deficit. The company's balance sheet at Dec 31, 2007, sowed strained liquidity with $1,145,045 in total current assets available to pay $14,222,769 in total current liabilities. The company's accumulated deficit at Dec. 31, 2007, stood at $43,855,590. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?2b24 Based in Richardson, Tex., Vertical Computer Systems, Inc. (OTCBB: VCSY) -- http://www.vcsy.com/-- is a multinational provider of administrative software services, Internet core technologies, and derivative software application products through its distribution network. VICORP RESTAURANTS: Panel Wants to Hire Milbank Tweed as Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in VICORP Restaurants Inc. and VI Acquisition Corp.'s Chapter 11 cases asks the authority of the U.S. Bankruptcy Court for the District of Delaware to employ Milbank Tweed Hadley & McCloy LLP as their counsel. Milbank Tweed will, among others, advise the Committee with respect to its rights, powers and duties in these cases, assist and advise the Committee with respect to its communications with the general creditor body regarding significant matters, assist the Committee in preparing pleadings and applications as may be necessary. Abhilash M. Raval, Esq., at member at Milbank Tweed, tells the Court that the firm's professionals will bill the Debtor these hourly rates: Partners $700 - $950 Other Counsel $650 - $850 Associates and Senior Attorneys $275 - $670 Legal Assistants $155 - $325 Mr. Raval assures the Court that the firm is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. About VICORP Restaurants Based in Denver, Colorado, VICORP Restaurants Inc. -- http://www.vicorpinc.com/-- operates two restaurant concepts under proven and well-recognized brands, Village Inn and Bakers Square. Founded in 1958, VICORP has 343 restaurants in 25 states, consisting of 250 company-operated restaurants and 93 franchised restaurants. Known for its strong breakfast heritage, Village Inn has been serving its signature breakfast items like one-of-a-kind skillet dishes and made-from-scratch pancakes for 50 years. In addition, Village Inn offers traditional American fare for lunch and dinner. The company and its affiliates filed for Chapter 11 protection on April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Donna L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Kimberly Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A. Robinson, Esq., at Reed Smith LLP, represents the Debtors in their restructuring efforts. The Debtors chose Wells Fargo Trumbull as their claims, noticing, and balloting agent. The U.S. Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' cases. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. VICORP RESTAURANTS: Can Hire Wells Fargo Trumbull as Claims Agent ----------------------------------------------------------------- VICORP Restaurants Inc. and VI Acquisition Corp. obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Wells Fargo Trumbull as their claims, noticing, and balloting agent. As agent for and custodian of the records of the bankruptcy clerk in these cases, Trumbull is expected to, among others, prepare and serve all notices required in these cases, maintain an official claims register, assist the Debtors with the reconciliation and resolution of claims, and mail and tabulate ballots for purposes of plan voting. Pursuant to an engagement agreement, Trumbull professionals will be paid at these rates: Designation Hourly Rate ----------- ----------- Consultant $225 - $295 Operations Manager $110 - $185 Automation Consultant $140 - $175 Case Manager $85 - $135 Data Specialist $65 - $80 Administrative Support $55 Kenneth L. Keymer, the CEO and president of the Debtors, told the Court in a consolidated affidavit that Trumbull is experienced and is well qualified to serve as agent in these Chapter 11 cases, and its employment will provide the Debtors with efficient management of the claims, noticing, and balloting processes in these cases. About VICORP Restaurants Based in Denver, Colorado, VICORP Restaurants Inc. -- http://www.vicorpinc.com/-- operates two restaurant concepts under proven and well-recognized brands, Village Inn and Bakers Square. Founded in 1958, VICORP has 343 restaurants in 25 states, consisting of 250 company-operated restaurants and 93 franchised restaurants. Known for its strong breakfast heritage, Village Inn has been serving its signature breakfast items like one-of-a-kind skillet dishes and made-from-scratch pancakes for 50 years. In addition, Village Inn offers traditional American fare for lunch and dinner. The company and its affiliates filed for Chapter 11 protection on April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Donna L. Culver, Esq., at Morris Nichols Arsht & Tunnell, and Kimberly Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A. Robinson, Esq., at Reed Smith LLP, represents the Debtors in their restructuring efforts. The Debtors chose Wells Fargo Trumbull as their claims, noticing, and balloting agent. The U.S. Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' cases. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. WASHINGTON MUTUAL: Moody's Holds 'BB+' Rating on Class B-5 Certs. ----------------------------------------------------------------- Fitch Ratings has affirmed these Washington Mutual mortgage pass- through certificates. Unless stated otherwise, any bonds that were previously placed on Rating Watch Negative are removed. WAMMS, series 2003-MS7 -- Class A-1 at 'AAA'; -- Class A-2 at 'AAA'; -- Class A-3 at 'AAA'; -- Class A-4 at 'AAA'; -- Class A-5 at 'AAA'; -- Class A-6 at 'AAA'; -- Class A-7 at 'AAA'; -- Class A-8 at 'AAA'; -- Class A-9 at 'AAA'; -- Class A-10 at 'AAA'; -- Class A-11 at 'AAA'; -- Class A-12 at 'AAA'; -- Class A-13 at 'AAA'; -- Class A-14 at 'AAA'; -- Class A-15 at 'AAA'; -- Class X at 'AAA'; -- Class P at 'AAA'; -- Class R at 'AAA'; -- Class B-1 at 'AAA'; -- Class B-2 at 'AA+'; -- Class B-3 at 'A+'; -- Class B-4 at 'A'; -- Class B-5 at 'BB+'. The collateral on the aforementioned transactions consists of 30- year fixed-rate mortgages extended to Prime borrowers. Washington Mutual Bank (rated 'RPS2+' by Fitch) is the master servicer for the deal. Class A-10 has a financial guaranty provided by MBIA. WEST PANOLA: Case Summary & Two Largest Unsecured Creditors ----------------------------------------------------------- Debtor: West Panola, LLC P.O. Box 1274 Stockbridge, GA 30281 Bankruptcy Case No.: 08-68551 Chapter 11 Petition Date: May 5, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: William Russell Patterson, Esq. Email: wrpjr@rbhs-llp.com Ragsdale Beals Seigler Patterson & Gray 229 Peachtree Street N.E. Ste. 2400 Atlanta, GA 30303-1629 Tel: (404) 588-0500 http://www.rbhs-llp.com/ Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million Debtor's Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Alpha Bank & Trust $4,123,104 Attn: Bryan E. Busch, Esq. 1600 Parkwood Cir., Ste. 200 Atlanta, GA 30339 Valleyfield Finance, LLC $650,000 Attn: Mark Connor 1430 E. Piedmont, Ste. 101 Tallahassee, FL 32308 WORLD HEART: TSE Reviews Eligibility for Continued Listing ---------------------------------------------------------- The Toronto Stock Exchange advised World Heart Corporation that TSE is reviewing the eligibility for continued listing on the TSX of the common shares of WorldHeart under sections 709 and 710(a) of the TSX Company Manual. This review relates to the company's financial condition and operating results, more specifically whether the company can continue as a going concern. Further to the TSX's Remedial Review Process, WorldHeart has been granted 30 days in which to demonstrate compliance with these requirements. The company is also permitted to make submissions regarding this matter at a hearing scheduled to be held on June 5, 2008. If the company cannot demonstrate that it meets all TSX requirements on or before June 11, 2008, the company's common shares will be delisted 30 days from such date. The notice also states that if at anytime, TSX becomes aware of additional negative developments such that the continued trading or listing of a company's securities is contrary to public interest, an expedited review will be initiated. WorldHeart also received a notice from the TSX that the company improperly disseminated material information by failing to issue a news release immediately. The news release was circulated on May 9, 2008, when it should have been circulated on May 8, 2008, at the same time the company filed its public disclosure with the US and Canadian securities commissions. The company's management has made policy changes to ensure timely disclosure of material events, as required under section 4(b) of the TSX Company Manual. About World Heart Corporation Headquartered in Oakland, California, World Heart Corporation (NASDAQ: WHRT, TSX: WHT) -- http://www.worldheart.com/-- develops mechanical circulatory support systems with broad-based next-generation technologies. The company has additional facilities in Salt Lake City, Utah and Herkenbosch, Netherlands. Going Concern As reported in the Troubled Company Reporter on April 4, 2008, Burr, Pilger & Mayer LLP raised substantial doubt about the ability of World Heart Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the corporation's recurring losses. XM SATELLITE: March 31 Balance Sheet Upside-Down by $1.1 Billion ---------------------------------------------------------------- XM Satellite Radio Holdings Inc. announced on Monday financial results for the quarter ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $1.7 billion in total assets, $2.7 billion in total liabilities, $60.2 million in minority interest, resulting in a $1.1 billion total stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $470.9 million in total current assets available to pay $764.0 million in total current liabilities. The company reported a first quarter 2008 net loss of $129.0 million, compared to a first quarter 2007 net loss of $122.0 million. First quarter 2008 adjusted operating loss was $30.7 million, compared to a loss of $27.0 million in the first quarter of 2007. The first quarter 2008 adjusted operating loss includes $3.5 million of merger related expenses, compared to $9.2 million in first quarter 2007. Revenue for the first quarter of 2008 rose to $308.0 million, a nearly 17.0% increase over first quarter 2007 revenue of $264.0 million. XM ended first quarter 2008 with 9.33 million subscribers, an 18.0% increase, compared to 7.91 million subscribers at the end of the first quarter of 2007. The company said this growth was driven by a 49.0% year-over-year increase in the number of gross additions through the automotive channel. First quarter 2008 automotive channel gross additions were 802,000, compared to 537,000 in the first quarter of 2007. "In first quarter 2008 we delivered the largest number of new customers from the automotive channel in XM's history, marking the fourth consecutive quarter of record OEM gross additions," said Nate Davis, president and chief executive officer of XM Satellite Radio. "XM's ongoing investment in the OEM channel is paying dividends in the form of record customer additions and continued revenue growth as our OEM partners further expand XM's reach to millions of consumers." In the first quarter of 2008, XM's subscriber acquisition costs, a component of cost per gross addition, were $73, compared to $65 in first quarter 2007. CPGA in first quarter 2008 fell below $100 to $99 for the first time since the third quarter of 2006 and compares to $103 in the first quarter of 2007. Available Liquidity As of March 31, 2008, the company had total available liquidity of nearly $425.0 million comprised of approximately $212.0 million in cash and cash equivalents, $62.5 million remaining on its $250.0 million secured credit facility and a $150.0 million credit facility with General Motors. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2bd5 Merger Update On Feb. 19, 2007, XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. entered into an Agreement and Plan of Merger, pursuant to which XM and Sirius will combine their businesses through a merger of XM and a newly formed, wholly owned subsidiary of Sirius. SIRIUS and XM each obtained stockholder approval for the deal in November 2007. On March 24, 2008, the U.S. Department of Justice informed XM and Sirius that it had ended its investigation into their pending merger without taking action to block the transaction. The pending merger is still subject to approval by the Federal Communications Commission. About XM Satellite Radio Headquartered in Washington, D.C., XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a satellite radio company. The company broadcasts live daily from studios in Washington, DC, New York City, Chicago, Nashville, Toronto and Montreal. The company also provides satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said its ratings on XM Satellite Radio Holdings Inc. and XM atellite Radio Inc. (CCC+/Watch Developing/--) remain on CreditWatch with developing implications, where S&P originally placed them on March 4, 2008, due to S&P's concerns over standalone refinancing risks XM might face if its merger with Sirius Satellite Radio Inc. (CCC+/Watch Developing/--) wasn't approved. ZAIS INVESTMENT: Moody's Junks Baa1 Rating on $21MM Class C Notes ----------------------------------------------------------------- Moody's Investors Service has placed on review for possible downgrade the ratings on these notes issued by ZAIS Investment Grade Limited VIII. Class Description: $258,900,000 Class A-1 Senior Secured Floating Rate Notes, Due 2046 -- Prior Rating: Aaa -- Current Rating: Aaa, on review for possible downgrade Moody's also downgraded and left on review for possible further downgrade the ratings on these notes: Class Description: $90,000,000 Class A-2 Senior Secured Floating Rate Notes, Due 2046 -- Prior Rating: Aa2, on review for possible downgrade -- Current Rating: Baa2, on review for possible downgrade Class Description: $33,800,000 Class B Senior Secured Secured Floating Rate Notes, Due 2046 -- Prior Rating: A1, on review for possible downgrade -- Current Rating: Ba2, on review for possible downgrade Class Description: $21,000,000 Class C Senior Secured Deferrable Interest Floating Rate Notes, Due 2046 -- Prior Rating: Baa1, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Additionally, Moody's downgraded these notes: Class Description: .S.$22,500,000 Class D Senior Secured Deferrable Interest Floating Rate Notes, Due 2046 -- Prior Rating: Ba1, 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. ZIEGLER ENTERPRISES: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Ziegler Enterprises III, LLC 14637 Pebble Bend Dr. Houston, TX 77068 Bankruptcy Case No.: 08-32932 Chapter 11 Petition Date: May 5, 2008 Court: Southern District of Texas (Houston) Judge: Letitia Z. Clark Debtor's Counsel: G. Michael Sharp, Esq. Email: michaelsharplaw@yahoo.com 1100 S. Friendswood Dr., Ste. B Friendswood, TX 77546 Tel: (281) 996-8997 Fax: (281) 996-1780 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. * S&P Downgrades Ratings on 59 Classes from 15 RMBS Transactions ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 59 classes from 15 residential mortgage-backed securities transactions backed by U.S. subprime mortgage loan collateral issued in 2007. At the same time, S&P removed 49 of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on 90 classes from 24 RMBS transactions backed by U.S. subprime loans and removed them from CreditWatch negative. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given its current projected losses. As announced in "Projected Losses For U.S. Subprime RMBS Issued In 2006 And First- Half 2007 As Of April 24, 2008," published April 24, 2008, on RatingsDirect, S&P calculated its projected deal-specific losses by reviewing the individual loan-level characteristics and most recent performance data, as described in "S&P Revises Projected Losses For U.S. Subprime RMBS Transactions Issued In First-Half 2007," which S&P published April 24, 2008, on RatingsDirect. Due to current market conditions, S&P are assuming that it will take approximately 15 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. In addition, S&P are assuming a loss severity of approximately 45% for U.S. subprime RMBS transactions issued in 2007. The lowered ratings reflect S&P's assessment of credit support under three constant prepayment rate scenarios. The first scenario utilizes the lower of the lifetime or 12-month CPR, while the second utilizes a 6% CPR, which is very slow by historical standards. The third scenario uses a prepayment rate that is equal to two times the lower of the lifetime or 12-month CPR. S&P incorporated a third CPR scenario into its cash flow analysis to account for potential increases in prepayments, which may occur from normal increases typically found in the seasoning of pools combined with a chance that governmental proposals, if adopted, may lead to increased CPRs. We assumed a constant default rate for each pool. Because the analysis focused on each individual class with varying maturities, prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates. Standard & Poor's has updated its projected excess spread to account for the recent cuts in U.S. interest rates. Standard & Poor's recently announced that it will discount a portion of excess spread to account for potential interest rate modifications in an upwardly sloping mortgage rate environment. An interest rate modification may extend the initial fixed-rate period of a mortgage loan to five years from two and three years. The reduction in interest rates has effectively extended the initial interest rates beyond the interest rate reset period. As a result of the reduction in excess spread, many loan modifications may no longer be needed. Standard & Poor's has updated its assumptions on excess spread to reflect the current environment. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. For mortgage pools that are continuing to show increasing delinquencies, S&P increased its cash flow stresses to account for potential increases in monthly losses. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base case assumption S&P assumed in its analysis. For example, a class may have to withstand 115% of its base case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand 125% of our base case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of its base case loss assumptions under its analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 90% of the current pool balances. A combination of subordination, excess spread, and overcollateralization provide credit support for the affected transactions. The underlying collateral for these deals consists of fixed- and adjustable-rate U.S. subprime mortgage loans that are secured by first and second liens on one- to four-family residential properties. To date, including the classes listed below and actions on both publicly and confidentially rated classes, S&P have resolved the CreditWatch placements of the ratings on 2,463 classes from 417 U.S. RMBS subprime transactions from the 2006 and 2007 vintages. Currently, S&P's ratings on 693 classes from 111 U.S. RMBS subprime transactions from the 2006 and 2007 vintages are on CreditWatch negative. Ratings Lowered ACE Securities Corp. Home Equity Loan Trust Series 2007-HE1 Series 2007-HE1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-9 00443LAP3 CC CCC ACE Securities Corp. Home Equity Loan Trust Series 2007-WM2 Series 2007-WM2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-8 00442KAN1 CC CCC M-9 00442KAP6 CC CCC First Franklin Mortgage Loan Trust Series 2007-FF2 Series 2007-FF2 Rating ------ Class CUSIP To From ----- ----- -- ---- B-2 32029GAN4 CC CCC B-3 32029GAP9 CC CCC B-4 32029GAQ7 CC CCC Home Equity Asset Trust 2007-2 Series 2007-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-8 43710KAN6 CC CCC M-9 43710KAP1 CC CCC RASC Series 2007-KS1 Trust Series 2007-KS1 Rating ------ Class CUSIP To From ----- ----- -- ---- B 74924SAP1 CC CCC Terwin Mortgage Trust 2007-4HE Series 2007-4HE Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 88157QAE8 CC CCC Ratings Lowered and Removed from Creditwatch Negative ACE Securities Corp. Home Equity Loan Trust Series 2007-HE1 Series 2007-HE1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 00443LAA6 AA AAA/Watch Neg A-2D 00443LAE8 AA AAA/Watch Neg M-1 00443LAF5 BB AA+/Watch Neg M-2 00443LAG3 B+ AA+/Watch Neg M-3 00443LAH1 B AA/Watch Neg M-4 00443LAJ7 B- AA-/Watch Neg ACE Securities Corp. Home Equity Loan Trust Series 2007-WM2 Series 2007-WM2 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 00442KAA9 BB AAA/Watch Neg A-2B 00442KAC5 A AAA/Watch Neg A-2C 00442KAD3 BBB AAA/Watch Neg A-2D 00442KAE1 BB AAA/Watch Neg M-1 00442KAF8 B AA+/Watch Neg M-2 00442KAG6 B- AA-/Watch Neg C-BASS 2007-CB1 Trust Series 2007-CB1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 1248MGAR5 A AA/Watch Neg M-3 1248MGAS3 BBB AA/Watch Neg CWABS Asset-Backed Certificates Trust 2007-2 Series 2007-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 12668NAG2 A AA-/Watch Neg CWABS Asset-Backed Certificates Trust 2007-5 Series 2007-5 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 12668KAG8 BBB AA/Watch Neg CWABS Asset-Backed Certificates Trust 2007-6 Series 2007-6 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 12669LAF7 AA AA+/Watch Neg M-2 12669LAG5 BBB AA/Watch Neg First Franklin Mortgage Loan Trust Series 2007-FF2 Series 2007-FF2 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 32029GAA2 BB AAA/Watch Neg A-2C 32029GAD6 BB AAA/Watch Neg A-2D 32029GAE4 BB AAA/Watch Neg M-1 32029GAF1 B AA+/Watch Neg M-2 32029GAG9 CCC AA-/Watch Neg M-3 32029GAH7 CCC B/Watch Neg Home Equity Asset Trust 2007-2 Series 2007-2 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A-1 43710KAA4 BBB AAA/Watch Neg 2-A-3 43710KAD8 AA AAA/Watch Neg 2-A-4 43710KAE6 BBB AAA/Watch Neg M-1 43710KAF3 BB AA+/Watch Neg M-2 43710KAG1 B AA/Watch Neg M-3 43710KAH9 CCC B/Watch Neg HSI Asset Securitization Corp. Trust 2007-HE1 Series 2007-HE1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 40430FAG7 BBB AA/Watch Neg M-3 40430FAH5 BB BBB/Watch Neg NovaStar Mortgage Funding Trust Series 2007-1 Series 2007-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 669971AG8 A AA/Watch Neg RASC Series 2007-KS1 Trust Series 2007-KS1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1S 74924SAE6 A+ AA+/Watch Neg M-2S 74924SAF3 BB AA/Watch Neg M-3S 74924SAG1 B+ AA-/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-BR1 Series 2007-BR1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 81378KAE9 BBB AA+/Watch Neg M-2 81378KAF6 B AA/Watch Neg Structured Asset Securities Corporation Mortgage Loan Trust 2007-BC2 Series 2007-BC2 Rating ------ Class CUSIP To From ----- ----- -- ---- M1 86362YAF3 AA AA+/Watch Neg M2 86362YAG1 BBB AA-/Watch Neg Terwin Mortgage Trust 2007-4HE Series 2007-4HE Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 88157QAA6 AA AAA/Watch Neg A-2 88157QAK4 BBB AAA/Watch Neg A-3 88157QAL2 BB AAA/Watch Neg M-1 88157QAB4 B AA/Watch Neg WaMu Asset-Backed Certificates WaMu Series 2007-HE2 Trust Series 2007-HE2 Rating ------ Class CUSIP To From ----- ----- -- ---- I-A 92926SAA4 A AAA/Watch Neg II-A3 92926SAD8 AA AAA/Watch Neg II-A4 92926SAE6 A AAA/Watch Neg M-1 92926SAF3 BB AA+/Watch Neg M-2 92926SAG1 B AA/Watch Neg Ratings Affirmed and Removed from Creditwatch Negative Accredited Mortgage Loan Trust 2007-1 Series 2007-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M3 00438QAG9 AA AA/Watch Neg ACE Securities Corp. Home Equity Loan Trust Series 2007-HE1 Series 2007-HE1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-2A 00443LAB4 AAA AAA/Watch Neg A-2B 00443LAC2 AAA AAA/Watch Neg A-2C 00443LAD0 AAA AAA/Watch Neg ACE Securities Corp. Home Equity Loan Trust Series 2007-WM2 Series 2007-WM2 Rating ------ Class CUSIP To From ----- ----- -- ---- A-2A 00442KAB7 AAA AAA/Watch Neg Carrington Mortgage Loan Trust Series 2007-FRE1 Series 2007-FRE1 Rating ------ Class CUSIP To From ----- ----- -- ---- M1 144527AE8 AA+ AA+/Watch Neg M2 144527AF5 AA AA/Watch Neg M3 144527AG3 B B/Watch Neg Carrington Mortgage Loan Trust Series 2007-RFC1 Series 2007-RFC1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 144526AE0 AA+ AA+/Watch Neg M-2 144526AF7 AA AA/Watch Neg C-BASS 2007-CB1 Trust Series 2007-CB1 Rating ------ Class CUSIP To From ----- ----- -- ---- AF-1a 1248MGAJ3 AAA AAA/Watch Neg AF-1b 1248MGAX2 AAA AAA/Watch Neg AF-2 1248MGAK0 AAA AAA/Watch Neg AF-3 1248MGAL8 AAA AAA/Watch Neg AF-4 1248MGAM6 AAA AAA/Watch Neg AF-5 1248MGAN4 AAA AAA/Watch Neg AF-6 1248MGAP9 AAA AAA/Watch Neg M-1 1248MGAQ7 AA+ AA+/Watch Neg C-BASS Mortgage Loan Asset-Backed Certificates Series 2007-SP1 Series 2007-SP1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 1248MAAA5 AAA AAA/Watch Neg A-2 1248MAAB3 AAA AAA/Watch Neg A-3 1248MAAC1 AAA AAA/Watch Neg A-4 1248MAAD9 AAA AAA/Watch Neg M-1 1248MAAE7 AA+ AA+/Watch Neg M-2 1248MAAF4 AA+ AA+/Watch Neg M-3 1248MAAG2 AA+ AA+/Watch Neg M-4 1248MAAJ6 AA+ AA+/Watch Neg M-5 1248MAAL1 AA+ AA+/Watch Neg M-6 1248MAAN7 AA+ AA+/Watch Neg M-7 1248MAAQ0 AA AA/Watch Neg M-8 1248MAAS6 AA- AA-/Watch Neg Citigroup Mortgage Loan Trust 2007-WFHE2 Series 2007-WFHE2 Rating ------ Class CUSIP To From ----- ----- -- ---- M1 17312BAE2 AA+ AA+/Watch Neg M2 17312BAF9 AA AA/Watch Neg CWABS Asset-Backed Certificates Trust 2007-2 Series 2007-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 12668NAF4 AA+ AA+/Watch Neg M-3 12668NAH0 B B/Watch Neg CWABS Asset-Backed Certificates Trust 2007-3 Series 2007-3 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A 12668UAD3 AAA AAA/Watch Neg 2-A-1 12668UAE1 AAA AAA/Watch Neg 2-A-2 12668UAF8 AAA AAA/Watch Neg 2-A-3 12668UAG6 AAA AAA/Watch Neg 2-A-4 12668UAH4 AAA AAA/Watch Neg M-1 12668UAJ0 AA+ AA+/Watch Neg M-2 12668UAK7 BB BB/Watch Neg M-3 12668UAL5 B B/Watch Neg CWABS Asset-Backed Certificates Trust 2007-5 Series 2007-5 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 12668KAF0 AA+ AA+/Watch Neg M-3 12668KAH6 B B/Watch Neg CWABS Asset-Backed Certificates Trust 2007-6 Series 2007-6 Rating ------ Class CUSIP To From ----- ----- -- ---- M-3 12669LAH3 B B/Watch Neg CWABS Asset-Backed Certificates Trust 2007-BC1 Series 2007-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-4 12668TAJ3 BB BB/Watch Neg M-5 12668TAK0 B B/Watch Neg First Franklin Mortgage Loan Trust Series 2007-FF2 Series 2007-FF2 Rating ------ Class CUSIP To From ----- ----- -- ---- A-2A 32029GAB0 AAA AAA/Watch Neg A-2B 32029GAC8 AAA AAA/Watch Neg Home Equity Asset Trust 2007-2 Series 2007-2 Rating ------ Class CUSIP To From ----- ----- -- ---- 2-A-1 43710KAB2 AAA AAA/Watch Neg 2-A-2 43710KAC0 AAA AAA/Watch Neg HSI Asset Securitization Corp. Trust 2007-HE1 Series 2007-HE1 Rating ------ Class CUSIP To From ----- ----- -- ---- I-A-1 40430FAA0 AAA AAA/Watch Neg II-A-1 40430FAB8 AAA AAA/Watch Neg II-A-2 40430FAC6 AAA AAA/Watch Neg II-A-3 40430FAD4 AAA AAA/Watch Neg II-A-4 40430FAE2 AAA AAA/Watch Neg M-1 40430FAF9 AA+ AA+/Watch Neg M-4 40430FAJ1 B B/Watch Neg Morgan Stanley Home Equity Loan Trust 2007-2 Series 2007-2 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 61752UAA3 AAA AAA/Watch Neg A-2 61752UAB1 AAA AAA/Watch Neg A-3 61752UAC9 AAA AAA/Watch Neg A-4 61752UAD7 AAA AAA/Watch Neg M-1 61752UAE5 AA+ AA+/Watch Neg M-2 61752UAF2 AA AA/Watch Neg M-3 61752UAG0 B B/Watch Neg Nationstar Home Equity Loan Trust 2007-A Series 2007-A Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 63860HAE9 AA+ AA+/Watch Neg M-2 63860HAF6 AA AA/Watch Neg M-3 63860HAG4 AA- AA-/Watch Neg NovaStar Mortgage Funding Trust Series 2007-1 Series 2007-1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 669971AF0 AA+ AA+/Watch Neg M-3 669971AH6 B B/Watch Neg RASC Series 2007-KS1 Trust Series 2007-KS1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 74924SAA4 AAA AAA/Watch Neg A-2 74924SAB2 AAA AAA/Watch Neg A-3 74924SAC0 AAA AAA/Watch Neg A-4 74924SAD8 AAA AAA/Watch Neg M-4 74924SAH9 B B/Watch Neg Securitized Asset Backed Receivables LLC Trust 2007-BR1 Series 2007-BR1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 81378KAA7 AAA AAA/Watch Neg A-2A 81378KAB5 AAA AAA/Watch Neg A-2B 81378KAC3 AAA AAA/Watch Neg A-2C 81378KAD1 AAA AAA/Watch Neg Soundview Home Loan Trust 2007-NS1 Series 2007-NS1 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 83612QAE8 AA+ AA+/Watch Neg M-2 83612QAF5 AA AA/Watch Neg M-3 83612QAG3 B B/Watch Neg Structured Asset Securities Corp. Mortgage Loan Trust 2007-BC2 Series 2007-BC2 Rating ------ Class CUSIP To From ----- ----- -- ---- A1 86362YAA4 AAA AAA/Watch Neg A2 86362YAB2 AAA AAA/Watch Neg A3 86362YAC0 AAA AAA/Watch Neg A4 86362YAD8 AAA AAA/Watch Neg A5 86362YAE6 AAA AAA/Watch Neg M3 86362YAH9 B B/Watch Neg WaMu Asset-Backed Certificates WaMu Series 2007-HE2 Trust Series 2007-HE2 Rating ------ Class CUSIP To From ----- ----- -- ---- II-A-1 92926SAB2 AAA AAA/Watch Neg II-A-2 92926SAC0 AAA AAA/Watch Neg * S&P's Current Non-Default Ratings of US Corporates Falls by 23 ---------------------------------------------------------------- S&P's current ratings universe of U.S. corporates that are not in default decreased by 23 to 3,174 at the end of the first quarter of 2008 from 3,197 at the end of 2007, according to an article published by Standard & Poor's. The report, titled, "U.S. Ratings Distribution: Glut Of Low-Rated Issuers Could Mean Escalating Default Rates," says that 35 speculative-grade rated firms either defaulted or had their ratings withdrawn, and 12 firms were assigned first-time investment-grade ratings. "Though credit conditions remain challenging, there have been some initial signs of improvement for corporate bond prices; both the high-yield and investment-grade markets have rallied since mid- March," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "Reported earnings for S&P 500 firms in the first quarter have also been relatively healthy for most corporate sectors, with financials the main exception." There has been a significant slowdown in the rate of new entrants, as the challenging credit environment has not been supportive of new issuers or new debt offerings. In the first quarter of 2008, there were only 29 new entrants to the rated population, down from 98 in the first quarter of 2007. This is the slowest first quarter by newly rated issuers since 1991. The tightening of lending standards in both the bond and bank lending markets may block smaller, speculative-grade firms from accessing capital. The number of high-yield firms decreased to 1,600 from 1,635, as firms defaulted or ratings were withdrawn, though the total share of high-yield issuance is still over 50%. Ms. Vazza added, "With profits still at risk within a weaker economic environment, we foresee a continued slide in credit quality, with downgrades outpacing upgrades in both investment grade and high yield, as well as an increase in the trailing-12 month speculative-grade default rate to 4.7% by the end of the first quarter of 2009." * S&P Says Sharpened Top-Down Focus on Risk Mngt. is Essential -------------------------------------------------------------- As markets slump and reports of new write-downs appear daily, a sharpened top-down focus on risk management and a commitment to integrate risk management vertically throughout an enterprise are essential, according to an article published by Standard & Poor's Ratings Services. The article, which is titled "Enterprise Risk Management: More Important, But Still No Panacea," says that in short, enterprise risk management--both as a philosophy and a discipline--is becoming a necessity, not an option. S&P believe that employing sound ERM practices will improve companies' financial profiles. For more than a decade, ERM's tools and skills and the structure ERM imparts have helped companies and their managements identify, select, and mitigate a range of cross-functional and aggregated risks. ERM has evolved into a valuable tool that helps inform and direct management decisions. It can help managements to evaluate financial performance, improve product design and pricing, and guide strategic decision-making. Sound ERM practices can also help firms optimize their returns for the level of risk they take. And over the past few years, ERM has even become an analytical tool that can help financial and ratings analysts better understand connections among a firm's various risks. However, having ERM in place is not a guarantee that a firm can predict or avoid losses, nor is it a method to eliminate all risks. For example, the recent record losses at a number of banks and at some insurers have required significant recapitalizations to preserve creditworthiness. These events have revealed limitations and potential shortcomings in these firms' risk- management function. Such losses also point to the need for improvements in measuring and monitoring risk and in the governance structure overseeing risk exposure and tolerance. ERM at its best has already sharply reduced the possibility that companies will have outsize losses. It also tries to maximize revenue given the associated level of risk. A tangible benefit of our ERM analysis is that it provides us with a more consistent framework to assess not just a rating but also how effectively companies can strategically mitigate their risks. * Massachusetts Q1 2008 Foreclosures Break Another Record --------------------------------------------------------- ForeclosuresMass.com released its latest Massachusetts Market Analysis Report, which analyzes data through the end of the first quarter of 2008 (March 31, 2008). The report revealed that Massachusetts foreclosure rates continue to hit new record levels with each passing month. Q1 2008 saw lenders initiate foreclosure action against the homeowners of 9,114 properties, a 37.59 percent increase over Q1 2007 and the 3rd consecutive record-breaking quarter. "Despite all of the attention being given to the foreclosure issue, nothing has changed. In fact, things have gotten worse," said Jeremy Shapiro, president and co-founder of ForeclosuresMass.com. "Homeowners facing foreclosure should not wait for a miracle cure to this problem; rather they should seek the help of qualified professionals to help them avoid foreclosure." ForeclosuresMass.coms educational programs help investors, real estate agents and mortgage brokers learn the ins and outs of dealing with foreclosure situations. ForeclosuresMass.com attributes the foreclosure increase to a "perfect storm" of factors. The pressures put on property owners include the effects of adjustable rate mortgages, sub-prime and other 'exotic' loans, the distressed lending market, decreased property values, substantially increased gasoline and home heating costs, and the slumping economy. The ForeclosuresMass.com Q1 2008 Market Analysis Report shows that foreclosures are up in 271 of the states 351 communities, with 73 communities experiencing at least a 75 percent jump in foreclosure filings in the past 12 months. Overall, 32,349 homeowners faced foreclosure in the past 12 months, a statewide increase of 44.78 percent. According to the ForeclosuresMass.com report, the 1st quarter of 2008 and the 3rd and 4th quarters of 2007 set three consecutive records for the number of foreclosure filings. Highlights of the ForeclosuresMass.com Q1 2008 Market Analysis Report: * Lenders initiated 32,349 foreclosures statewide against homeowners in the 12 months from April 1, 2007 to March 31, 2008, a year over year increase of 44.78%. * In the past 12 months foreclosures are up in 271 of the state's 351 communities, with 73 communities experiencing at least a 75 percent increase in filings. * Q1 2008 saw 9,114 filings, the single highest quarter on record (the previous high was Q4 2007 with 8,579), and 37.59 percent higher than Q1 2007. * In the past 12 months Dukes, Nantucket, Suffolk, Essex, and Middlesex Counties all experienced increases of at least 50%. Dukes County experienced a 129% increase (103 v. 45), Nantucket County saw a 113% increase (34 v. 16), Suffolk County had a 63% increase (3,974 v. 2,435), Essex County filings jumped by 59% (4,334 v. 2,725), and Middlesex County experienced a 52% increase (5,121 v. 3,366). * In the past 12 months 4 communities with at least 10 foreclosures have seen their rates triple: Nahant (240% increase, 17 v. 5), West Springfield (224% increase, 81 v. 25), Oak Bluffs (217% increase, 38 v. 12) and Belmont (200% increase, 36 v. 12). * In the past 12 months 25 communities with at least 10 foreclosures have seen their rates double: Framingham (168%), Berlin (150%), Tisbury (150%), Boxborough (144%), Chelsea (143%), Weston (138%), Hardwick (136%), Milford (136%), Douglas (130%), Eastham (123%), Dalton (114%), Freetown (114%), Medfield (114%), Nantucket (113%), Winthrop (113%), Ware (108%), Mendon (107%), North Brookfield (106%), Foxborough (106%), Medway (106%), Millis (105%), Everett (103%), Revere (102%), Edgartown (100%), Phillipston (100%). About ForeclosuresMass.com ForeclosuresMass.com provides Massachusetts foreclosure data for investors, real estate professionals and mortgage brokers. Through its Web site -- http://www.ForeclosuresMass.com/-- members gain immediate access to the most current and detailed foreclosure information available in the marketplace. Previously this data has been available only to brokers, investment professionals, or those able to do the time-consuming research. ForeclosuresMass.com was founded to take the "distress" out of purchasing distressed properties. Often, ForeclosuresMass.com members learn of properties weeks or months before public notices are issued and are able to purchase a property long before it reaches auction stage, providing a "win-win" outcome for both property owner and new buyer. * Kilpatrick Stockton and Muldoon Murphy Join Forces ---------------------------------------------------- Kilpatrick Stockton LLP and Muldoon Murphy & Aguggia jointly disclosed a merger of the two firms, which took effect on May 7, 2008. The combined firm will be known as Kilpatrick Stockton. According to the press release, the combination of the two firms brings together many of the nation's leading attorneys representing financial institutions and businesses across a broad spectrum of industries. Paul Aguggia, who served as Muldoon Murphy & Aguggia Chairman, will head Kilpatrick Stockton's Financial Institutions Team in its Corporate Department. Mr. Aguggia, along with all 22 attorneys and 13 staff at Muldoon Murphy & Aguggia, will join Kilpatrick Stockton's Washington, DC office located on 14th Street Northwest. "It is clear that both firms share a combined focus on delivering the high-quality service that our clients are accustomed to," said Paul Aguggia. "Clients joining Kilpatrick Stockton from Muldoon Murphy & Aguggia will have the benefit of extensive resources and nearly 500 attorneys, including over 100 corporate attorneys, offering services ranging from intellectual property, litigation, real estate, fund formation to employee benefits to name a few. We are thrilled to be joining one of the nation's leading, full- service law firms." Based on a leading trade publication's 2007 tables for the number of financial institution merger and acquisition transactions handled by law firms in the United States, the combined firm would be ranked seventh in number of deals nationwide. "Muldoon Murphy & Aguggia, a recognized leader in the marketplace for providing outstanding service to financial institutional clients across the country, will complement Kilpatrick Stockton's overall range of services," said Bill Dorris, Co-Managing Partner, Kilpatrick Stockton. "This joining of forces is a win-win for Kilpatrick Stockton clients who will now have access to enhanced expertise in the financial services arena including increased depth in corporate transactional and securities experience. Clients, attorneys and staff in the combined firm will benefit greatly from this strategic partnership." Kilpatrick Stockton's Washington, DC office, which opened in 1976, has approximately 60 attorneys following completion of the merger. "I am particularly excited about the positive impact this group of leading lawyers will have on our Washington, DC office," said Steve Baskin, Washington, DC Managing Partner. "Their outstanding practice not only strengthens the breadth of services the DC office provides but they bring a shared tradition of outstanding client service, giving back to the community and leadership in the legal arena." Barry Romm, of Klein, Landau & Romm, one of the oldest continually operating legal search firms in the United States, played a key role in bringing Kilpatrick Stockton and Muldoon Murphy & Aguggia together. About Muldoon Murphy & Aguggia The Washington, D.C. firm of Muldoon Murphy & Aguggia, which was founded in 1968, is a law firm that represents financial services companies. Over the last decade the firm's client base has expanded to include businesses of all sizes and characteristics in a variety of industries. The firm's specialization in the practice areas of corporate, finance and securities law provides a unique level of experience and depth of knowledge. About Kilpatrick Stockton Kilpatrick Stockton LLP -- http://www.kilpatrickstockton.com/-- is a full-service international law firm with nearly 500 attorneys in nine offices across the globe: Atlanta and Augusta, GA; Charlotte, Raleigh and Winston-Salem, NC; New York, NY; Washington, DC; London, England; and Stockholm, Sweden. Kilpatrick Stockton's delivery of innovative business solutions provides results-oriented counsel for corporations, from the challenging demands of financial transactions and securities to the disciplines of intellectual property management. Collaboration among Kilpatrick Stockton's corporate, litigation and intellectual property attorneys provides knowledgeable and proactive guidance for companies at every stage of the business life cycle. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- May 13-16, 2008 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Tulane University, New Orleans, Louisiana Contact: 1-703-739-0800; http://www.abiworld.org/ May 15-16, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ May 18-20, 2008 INTERNATIONAL BAR ASSOCIATION 14th Annual Global Insolvency & Restructuring Conference Stockholm, Sweden Contact: http://www.ibanet.org/ May 21, 2008 TURNAROUND MANAGEMENT ASSOCIATION What Happened to My Money - The Restructuring of a Loan Servicer Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// June 4-7, 2008 ASSOCIATION OF INSOLVENCY & RESTRUCTURING ADVISORS 24th Annual Bankruptcy & Restructuring Conference J.W. Marriott Spa and Resort, Las Vegas, Nevada Contact: http://www.airacira.org/ June 12-14, 2008 AMERICAN BANKRUPTCY INSTITUTE 15th Annual Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: http://www.abiworld.org/ June 19 & 20, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Corporate Reorganizations Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ June 24, 2008 TURNAROUND MANAGEMENT ASSOCIATION Fraud Panel Citrus Club, Orlando, Florida Contact: http://www.turnaround.org/ June 26-29, 2008 NORTON INSTITUTES ON BANKRUPTCY LAW Western Mountains Bankruptcy Law Seminar Jackson Hole, Wyoming Contact: http://www.nortoninstitutes.org/ July 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Cynthia Jackson of Smith Hulsey & Busey University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ July 10-13, 2008 AMERICAN BANKRUPTCY INSTITUTE 16th Annual Northeast Bankruptcy Conference Ocean Edge Resort Brewster, Massachussets Contact: http://www.abiworld.org/events July 29, 2008 TURNAROUND MANAGEMENT ASSOCIATION Employment Issues Following Hurricanes & Disasters Centre Club, Tampa, Florida Contact: http://www.turnaround.org/ July 31 - Aug. 2, 2008 AMERICAN BANKRUPTCY INSTITUTE 4th Annual Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay Cambridge, Maryland Contact: http://www.abiworld.org/ Aug. 16-19, 2008 AMERICAN BANKRUPTCY INSTITUTE 13th Annual Southeast Bankruptcy Workshop Ritz-Carlton, Amelia Island, Florida Contact: http://www.abiworld.org/ Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Aug. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Do's and Don'ts of Investing in a Turnaround Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 17, 2008 TURNAROUND MANAGEMENT ASSOCIATION Real Estate / Condo Restructuring Panel Marriott North, Fort Lauderdale, Florida Contact: http://www.turnaround.org// Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Sept. 30, 2008 TURNAROUND MANAGEMENT ASSOCIATION Private Equity Panel Centre Club, Tampa, Florida Contact: http://www.turnaround.org// Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: http://www.turnaround.org// Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; http://www.renaissanceamerican.com/ Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Beard Conferences presents: May 15-16, 2008 Fifth Annual Conference on Distressed Investing Europe Maximizing Profits in the European Distressed Debt Market Le Meridien Piccadilly Hotel - London Brochure available soon! * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Philline P. Reluya, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***