T R O U B L E D C O M P A N Y R E P O R T E R Thursday, May 15, 2008, Vol. 12, No. 115 Headlines 1ST FINANCIAL: Moody's Confirms Ratings on Three Note Classes AGRIUM INC: Moody's Withdraws United Agri Product's Low-B Ratings ALOHA AIRLINES: Court OKs Asset Sale to Saltchuk for $10.5 Mil. AMBAC FINANCIAL: Has No Material Exposure to Subprime Borrowers AMP'D MOBILE: To Sell Accounts Receivable to Afni for $2,560,000 AMP'D MOBILE: To Sell Remaining "Hard" Assets to Great American AMPEX CORP: Files Amended Disclosure Statement and Chapter 11 Plan ATARI INC: Infogrames Entertainment Declares 51.6% Equity Stake BANK OF AMERICA MORTGAGE: Fitch Affirms BB Rating on Two Classes BARR LABORATORIES: Moody's Affirms Ba1 Ratings & Revises Outlook BEXAR FINANCE: Moody's Holds Ba2 Rating on Subordinate Bonds BOSTON GENERATING: S&P Holds 'B+' Rating on $1.13 Billion Loan BRESNAN COMMUNICATIONS: Moody's Affirms B2 Corp. Family Rating BROADWAY GEN: S&P Holds 'BB-' Preliminary Rating on $800MM Loan CANADIAN TRUSTS: Ontario Court Defers Ruling on ABCP Amended Plan CANADIAN TRUSTS: ABCP Panel Responds to Demand for Plan Changes CANADIAN TRUSTS: Ernst & Young Delivers 7th Status Report CANADIAN TRUSTS: Creditors Assert Claims Against CCAA Parties CENTURY CASINOS: Lender Grants Waiver in Exchange for Cash Payment CENTURY CASINOS: Inks Credit Facility Amendment with Lenders CHECKSMART FINANCIAL: Moody's Reviewing Caa2 Rating for Downgrade CHRYSLER LLC: Issues Gas Price Policy to Ease Customer Concerns CONSTELLATION COPPER: Cure Period for C$69MM Debentures Expires CONSTELLATION COPPER: March 31 Balance Sheet Upside-Down by $39MM CONSTELLATION COPPER: Has Until June 2 to Comply with TSX's Rule COPANO ENERGY: Moody's Assigns B1 Rating to Proposed $250MM Notes COPANO ENERGY: S&P Puts 'B+' Rating on $250MM Sr. Unsecured Notes COUNTRYWIDE FINANCIAL: BofA Assures $4BB Acquisition will Continue CUMULUS MEDIA: Terminates $1.3BB Merger Deal with Investor Group CUMULUS MEDIA: Terminated Merger Won't Affect S&P's 'B' Rating DANA HOLDING: Appoints James Yost as EVP and CFO Effective May 22 DAVIS SQUARE FUNDING I: Moody's Junks Class B Participating Notes DAVIS SQUARE FUNDING II: Moody's Cuts Class B Notes' Rating to B3 DELTA AIR: Grants 3% Salary Raise to Front-Line Workers DELTA AIR: Employees First to Benefit from Merger with Northwest DRS TECHNOLOGIES: Sold to Italys Finmeccanica for $5.2 Billion DRS TECHNOLOGIES: Fitch Places Sr. Sub. Notes' B Rating on Watch DRS TECHNOLOGIES: Finmeccanica Deal Cues Moody's Rating Review DRS TECHNOLOGIES: Finmeccanica Acquisition Cues S&P's Pos. Watch EOS AIRLINES: U.S. Trustee Selects Five-Member Creditors' Panel ESTERLINE TECHNOLOGIES: Moody's Upgrades Sr. Notes' Rating to Ba2 FIRST NLC TRUST: Moody's Cuts Rating on Class M-9 Bonds to B2 FORTUNA MANAGED: Fitch Likely to Cut Rating of 2 Classes to BB FRONTIER AIRLINES: Union Says Golden Parachute Will Break Deal FRONTIER DRILLING: Liquidity Pressures Cue Moody's to Junk Ratings GABRIEL RESOURCES: Earns C$11 Million in 2008 First Quarter HEADWATERS INC: S&P Puts Ratings Under Neg. Watch on Weak Earnings HILEX POLY: Sec. 341 Meeting of Creditors Scheduled for June 11 HILEX POLY: Can File Schedules and Statements Until July 20 HILEX POLY: Gets Authority to Hire Epiq as Claims & Notice Agent HOLLINGER INC: Inks Term Sheet with Secured Creditor & Sun-Times HOME INTERIORS: Taps Richards Partners as Communications Expert HOME INTERIORS: Can Hire Kurtzman Carson as Notice & Claims Agent IDLEAIRE TECHNOLOGIES: Says Board Requires Special Counsel IDLEAIRE TECHNOLOGIES: Wants to Hire Holland & Knight as Counsel INDEPENDENCE VII: Expected Losses Cue Moody's to Cut Ratings INDYMAC BANCORP: Fitch Junks Short-Term Issuer Default Rating INFINITY ENERGY: Execs Stay Optimistic as 1Q Loss Narrows INTERPHARM HOLDINGS: Perry Sutaria et al. Declare 65.4% Stake JEFFERSON COUNTY: $53MM Debt Payment Deadline Extended to June 1 JOE PACHECO: Case Summary & 16 Largest Unsecured Creditors JOHN CLARKE: Case Summary & 13 Largest Unsecured Creditors KLEROS REAL: Moody's Reviewing Caa3 Rating on Class A-2 Notes LEVITT AND SONS: Pact Between Wachovia Debtors & Cananwill Okayed M FABRIKANT: Court Confirms Modified Chapter 11 Liquidation Plan MADACY ENT: Has until May 31 to Comply with Coverage Covenant MARATHON HEALTHCARE: May Access Webster Bank's DIP Facility MARATHON HEALTHCARE: May Use Webster Bank's Cash Collateral MASHANTUCKET PEQUOT: Moody's Cuts $500MM Notes Rating to Ba2 MATRIA HEALTHCARE: $144M Acquisition by Inverness Now Complete MATRIA HEALTHCARE: Inverness Sale Cues Moody's to Withdraw Ratings MATRIA HEALTHCARE: S&P Withdraws Ratings After Completed Merger MBIA INC: Securitizations Differ from Moody's Second Lien RMBS MESA AIR: Shuts Down Air Midwest Operations Due to Fuel Costs NATCHEZ HOSPITAL: To be Sold Following Privatization NORTEK INC: S&P Rates Proposed $750MM Senior Secured Notes B NORTHWEST AIRLINES: Employees First to Benefit from Merger NORTHWEST AIRLINES: EVP Neal Cohen to Leave on June 16 NTK HOLDINGS: Moody's Affirms Caa2 Rating on $403MM Senior Notes ORCHID STRUCTURED: Moody's Chips Ratings on Two Note Classes to Ca PACIFIC LUMBER: BoNY, et al., Challenge Global Settlement PACIFIC LUMBER: BoNY Asserts Claim for Drop in Scopac Collateral PAMPELONNE CDO II: Moody's Junks $1.6 Billion Class S Senior Notes PAMPELONNE CDO I: Moody's Junks Rating on $1.06 Bil. Class S Notes PAPPAS TELECASTING: Seeks Leave to Hire Kaye Scholer as Counsel PAPPAS TELECASTING: Wants to Hire Pachulski Stang as Co-Counsel PARCS-R MASTER: S&P Slashes AA Rating to BB on S. 2007-16 Trust PORTA SYSTEMS: Signs Debt Restructuring Agreement With Cheyne POWERMATE HOLDING: Sues Home Depot for $3.6M Contract Breach POWERMATE CORP: Taps RAS Management as Interim Managers POWERMATE CORP: Taps Windham to Collect $1.3M in Receivables RADNOR HOLDINGS: Expects $57 Mil. Gross Preference Transfers RAFFLES PLACE: Moody's Junks Ratings on $20 Million Notes RATHGIBSON INC: Moody's Cuts Corporate Family Rating to B3 RELIANT CHANNELVIEW: Dispute with Equistar Placed Under Mediation RESIDENTIAL ASSET: Fitch Rates 23 Classes Below Investment Grade RURAL/METRO CORP: Improved Liquidity Cues S&P to Revise Outlook SALOMON BROS TRUST: S&P Junks Rating on Class K Certificates SALT CREEK: Fitch Affirms Class B-6$L Notes' B+ Rating SATURNS TRUST: S&P Lowers Ratings on Two Classes of Trust to 'BB' SCIENTIFIC GAMES: Moody's Puts Ba1 Rating on Proposed $850MM Loans SCIENTIFIC GAMES: S&P Holds 'BB' Credit Rating with Stable Outlook SENTINEL MANAGEMENT: CFTC Files Suit Over Fund Misappropriation SHAPES/ARCH HOLDINGS: Unsecured Creditors to Get 14% Under Plan SHAPES/ARCH HOLDINGS: Wants Bid Procedures for Sale of Equity OK'd SHAPES/ARCH HOLDINGS: Disclosure Statement Hearing Set for May 23 SHIPPING PARTNERS: Moody's Junks Senior Secured Debt Rating SILVERWING ENERGY: In Breach of Demand Loan Facility Covenant SIX FLAGS: March 31 Balance Sheet Upside-Down by $410.6 Million SIX FLAGS: Commences Exchange Offer for $400MM New Senior Notes SKYBUS AIRLINES: Sec. 341 Creditors Meeting Set Today SKYBUS AIRLINES: Seeks to Employ Smith Gambrell as Lead Counsel SKYBUS AIRLINES: Can Employ Landis Roth as Local Counsel SOLUTIA INC: Earns $1.4 Billion in First Quarter 2008 STANDARD PACIFIC: Barclays Global et al. Declares 10.87% Stake STANDARD PACIFIC: Elevated Debt Prompts Moody's to Chip Ratings TEKNI-PLEX INC: March 28 Balance Sheet Upside-Down by $427 Million THERMAL NORTH: S&P Withdraws 'BB-' Corporate Credit Rating TRIGEM COMPUTER: US Court Dismisses Claims Against Toshiba TRONOX WORLDWIDE: Fitch Downgrades Senior Unsec. Notes to 'B/RR4' TROPICANA ENTERTAINMENT: Gets $100MM Funding Offer from Onex Corp. TROPICANA ENTERTAINMENT: Taps Richards Layton as Bankr. Co-Counsel TRUMP ENTERTAINMENT: Posts $18.6 Million Net Loss in 2008 1st Qtr. UAP HOLDING: Completes Acquisition Agreement with Agrium Inc. UAP HOLDING: Completed Agrium Deal Cues S&P to Lift Rtng. from BB- WARNACO GROUP: S&P Puts 'BB' Corp. Credit Rating Under Pos. Watch WARNEX INC: Reports Progress in Restructuring C$11.3M Debentures WARNEX INC: Enters $4M Financing Agreement with Desjardins Group WESTMORELAND COAL: March 31 Balance Sheet Upside-Down by $177.8 MM WILSONS LEATHER: Gets Nasdaq Deficiency Notice for Noncompliance X-RITE INC: Sustainability Concerns Prompt Moody's to Junk Ratings * Moody's Says Regional Casinos Can Profit Despite Weak Economy * Moody's Sees Higher Demand for Biz-Oriented Trustees in Schools * Moody's Changes the Outlook for US Restaurant Sector to Negative * Moody's Takes Negative Rating Actions on 839 Second Lien RMBS * Moody's Says Consumer Finance Industry's Outlook is Negative * Moody's Sees Tighter Underwriting Standards for Loans in CMBS * S&P Says Retail Sales for April Drops 0.2% Month Over Month * S&P Comments on Credit Quality of Not-for-Profit Hospitals * S&P Says Falling Home Prices Create a Wide Swath of Problems * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* 1ST FINANCIAL: Moody's Confirms Ratings on Three Note Classes ------------------------------------------------------------- Moody's Investors Service has confirmed the Ba3 ratings on three classes of subordinated notes issued from the 1st Financial Credit Card Master Note Trust and 1st Financial Credit Card Master Note Trust II. These securities were placed under review for possible downgrade on Feb. 14, 2008. The confirmation of the ratings concludes Moody's review of the outstanding securities. These ratings were confirmed: Issuer: 1st Financial Credit Card Master Note Trust -- $7,500,000 Fixed Rate Asset-Backed Notes, Series 2005-1, Class B, rated Ba3 Issuer: 1st Financial Credit Card Master Note Trust II -- $7,500,000 Fixed Rate Asset-Backed Notes, Series 2005-A, Class B, rated Ba3 -- $7,500,000 Fixed Rate Asset-Backed Notes, Series 2005-B, Class B, rated Ba3 Rationale The affected notes were placed under review for possible downgrade in February 2008 following rating actions on a number of monoline financial guarantors that insure some of the Trust's senior notes. In Moody's view, early amortization triggers tied to the rating downgrade of one or more of these financial guarantors make it more likely that a significant portion of 1st Financial's securitized transactions would begin to amortize before their scheduled maturity. Moody's review assessed 1st Financial's ability to finance cardholders' new purchases on their credit cards as well as its ability to execute on its contingency funding plans. Since the initiation of the review, the company has refinanced and restructured a significant portion of its securitized debt so as to reduce, but not eliminate, its susceptibility to liquidity constraints caused by the potential for further downgrades of the financial guarantors, which continue to insure several of the Trusts' outstanding transactions. Moody's will continue to monitor 1st Financial's liquidity position and ability to finance card receivables, including those through the securitization market. The performance of the collateral backing these transactions is within Moody's expectations and was not a factor in placing the ratings under review. Background The Trusts consist of approximately $433 million of credit card receivables originated and serviced by 1st Financial Bank (unrated), a South Dakota Bank. AGRIUM INC: Moody's Withdraws United Agri Product's Low-B Ratings ----------------------------------------------------------------- Moody's Investors Service confirmed Agrium Inc's Baa2 ratings with a stable outlook. The ratings for United Agri Products were withdrawn as all of its existing bank facilities have been repaid. This concludes the review of Agrium and UAP that was initiated Dec. 3, 2007 when it was announced that the two companies had entered into a definitive agreement, whereby a wholly-owned subsidiary of Agrium would acquire all of the outstanding shares of UAP. This transaction was completed on May 7, 2008. The following factors were considered by Moody's in reaching its decision to confirm Agrium's ratings. The transaction will improve Agrium's business profile by adding scale, broader diversification, purchasing power, and stability to earnings. Despite the initial rise in debt to fund the acquisition, offset by a material amount of equity issuance of $1.4 billion, Moody's expects that management will maintain its historically conservative financial policies and investment discipline. Moody's notes the increased reliance on retail sales that results from the acquisition of UAP will likely weaken EBITDA margins but this is likely to be more than offset by the current strength of Agrium's wholesale business. Moody's, however, still favorably views the company's selling price advantage in the Pacific Northwest relative to the vast majority of North American ammonia producers. In addition, the transaction is consistent with Agrium's operating strategy and will create the largest North American agricultural retailer while enhancing margin stability. Conversely, the transaction involves some execution risk and a reduction in financial flexibility when other recent acquisitions are considered on a combined basis. Specifically, Moody's believes the company will be challenged with blending different retail business philosophies together. Agrium operates a value added services business model whereas UAP manages a low service, high volume model. Furthermore, Moody's expects equity capital contributions for the joint venture nitrogen facility in Egypt to remain a call on cash. The company will not achieve returns on the non-recourse financing project until after the completion of the facility in 2010. The rating outlook is stable in light of robust industry conditions and anticipated positive free cash flow generation. It is also Moody's belief that Agrium will maintain its historically conservative financial policies and investment discipline. Moody's expects management to lower its debt position and work to integrate and leverage the acquisitions that have been made in recent periods. Confirmations Issuer: Agrium, Inc. -- Senior Unsecured Shelf, Baa2 -- Senior unsecured notes and debentures at Baa2; Withdrawals Issuer: United Agri Products, Inc. Ba3 - corporate family rating -- PDR: Ba3 -- Gtd Sr Sec Revolving Credit Facility due 2011, Ba1 (LGD2, 17%) -- Gtd Sr Sec Term Loan due 2012, Ba3 (LGD3, 45%) Agrium Inc., headquartered in Calgary, Alberta, Canada, is a leading global producer and marketer of agricultural nutrients and industrial products and a major retail supplier of agricultural products and services in both North and South America. Agrium produces and markets three primary groups of nutrients: nitrogen, phosphate and potash as well as controlled release fertilizers and micronutrients. Agrium reported net sales of US$5.6 billion for the last 12 months ending March 31, 2008. ALOHA AIRLINES: Court OKs Asset Sale to Saltchuk for $10.5 Mil. --------------------------------------------------------------- The Hon. Lloyd King of the United States Bankruptcy Court for the District of Hawaii authorized Dane S. Field, interim Chapter 7 Trustee for Aloha Airlines Inc. and its debtor-affiliates to sell the Debtors' "Air Cargo Assets" to Saltchuk Resources Inc. for $10.5 million free and clear of all liens and encumbrances. At closing, the Chapter 7 Trustee is expected to: -- pay all usual and customary closing costs paid by Saltchuk, -- pay all accrued and unpaid employee wages and salaries for the period April 16, 2008, until April 29, 2008, -- establish an interest bearing escrow account to be used to pay the transaction fee due to Imperial Capital LLC under the engagement letter dated March 19, 2008, and -- set aside in an interest bearing account 5% of the proceeds, net of fees and expenses incurred in the sale. Furthermore, the Chapter 7 Trustee will set aside $270,000 from the proceeds of the sale, which represent the estimated fees and cost of special counsel retained by the Trustee. The Trustee will dole out of the $270,000 as: i) $90,000 to Berger Singerman P.A, counsel ii) $105,000 to Char Sakamoto ISII Lum & Ching, special corporate counsel, iii) $60,000 to Shepard Mullin Richter & Hampton LLP, special counsel, and iv) $15,000 Squire Sanders & Dempsey LLP, regulatory counsel. As reported in the Troubled Company Reporter on May 6, 2008, Saltchuk and GMAC Commercial Finance LLC, the Debtors' senior secured lender, entered into a letter of intent for Saltchuk's purchase of the "Air Cargo Assets" from the Debtors' bankruptcy estates. The Air Cargo Assets handles 85% of the cargo traffic in the state of Hawaii, including a contract with the U.S. Postal Services. The salient terms of the letter of intent include, among other things: i) a $10.5 million purchase price; ii) a $1,000,000 earnest money deposit, including $500,000 previously deposited; iii) the assumption of aircraft and facility leases and other executory contracts, as selected by Saltchuk; and iv) a closing on or before May 14, 2008. Furthermore, the letter of intent requires GMAC Financial to finance the operation of the "Air Cargo Assets" pending the sale, which GMAC Financial is only willing to fund until May 14, 2008. GMAC Financial agrees to carve-out a portion of the proceeds of the sale for the benefit of the Debtors' estates, wherein 5% of the proceeds, net of fees and expenses incurred in the sale, will be paid to th Chapter 7 Trustee to pay expenses and fees. A full-text copy of the Letter of Intent is available for free at: http://ResearchArchives.com/t/s?2b70 As reported in the Troubled Company Reporter on April 25, 2008, Saltchuk Resources lost the bid for Aloha Airlines Inc.'s contract services operations to Pacific Air Cargo, which offered $2 million for those assets. As reported in the Troubled Company Reporter on April 30, 2008, Judge King converted the Debtors' jointly administered Chapter 11 cases to liquidation proceedings under Chapter 7. On May 1, 2008, Judge King authorized the Chapter 7 Trustee to operate the Debtors' "Air Cargo Assets" under Section 721 of the Bankruptcy Code until the closing date. About Aloha Airlines Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates are carriers that fly passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operate a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. This is the airline's second bankruptcy filing. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in February 2006. The company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed estimated assets and debts of $100 million to $500 million. AMBAC FINANCIAL: Has No Material Exposure to Subprime Borrowers --------------------------------------------------------------- Ambac Financial Group, Inc. responded to Moody's Investors Services May 13, 2008 press release about the poor performance of certain second lien RMBS and its impact on financial guarantor ratings. In a Special Report titled "U.S. Subprime Second Lien RMBS Rating Actions Update" dated May 12, 2008, Moody's discussed its rating actions to date related to subprime second lien residential mortgage-backed securities issued between 2005 and 2007. Additionally, it discussed subprime second lien loan performance to date and its cumulative loss projections for the asset class within those vintages. As reported in the Troubled Company Reporter on May 14, 2008, 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 agencys 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 response to the reports, Ambac, in a press release, states that (all amounts as of March 31, 2008): * As reported on its Web site, Ambac has closed end second lien exposure amounting to approximately $0.1 billion, $3.5 billion and $1.0 billion in vintage years 2005, 2006 and 2007, respectively. * Ambac has home equity line of credit exposure amounting to approximately $2.0 billion, $2.7 billion and $4.1 billion in vintage years 2005, 2006 and 2007, respectively. * Ambac has no material exposure to subprime borrowers in either asset class. The estimated range of average FICO scores for borrowers within pools Ambac insured in these asset classes is 695 - 745. * Ambac analyzes these portfolios on a transaction by transaction basis using the most recent actual performance data and projecting future performance using "roll rate" analysis. * Within the CES portfolio, Ambac has downgraded seven transactions (amounting to $2.1 billion) to below investment grade. The seven transactions are represented by three issuers, all were originated in 2005 to 2007 and all have reserves estimated. While Ambac has not paid claims on any of its CES transactions to date, Ambac has established reserves based on estimates of cumulative losses over the lives of the stressed transactions. * The vast majority of the remaining CES portfolio from this time period comprises three 2006 Countrywide transactions that are performing satisfactorily, with cumulative losses to date ranging from 0% to 0.5%. * Within the HELOC portfolio, Ambac has downgraded seven transactions amounting to $2.2 billion) to below investment grade. The seven transactions are represented by five issuers, all were originated in 2005 to 2007 and all have reserves estimated. * Ambac has observed clear performance differences within these portfolios, particularly earlier versus later vintages and bank versus non-bank originators. Moody's commented in its Special Report, "Moody's expectations on individual transactions can vary significantly around those numbers (Moody's expected cumulative loss estimates by vintage), based on the quarter of origination as well as deal- and issuer-specific characteristics." Ambac fully agrees that performance varies greatly and has appropriately reserved for its underperforming transactions. The stress Ambac is experiencing within each of these portfolios is limited to a relatively few transactions. The remaining transactions in both asset classes are performing within expectations and are internally rated investment grade. * Ambac is in the process of aggressively remediating this portfolio. Several transactions within these two portfolios are the subject of diagnostic, forensic and legal scrutiny. Ambac has begun the process of putting back loans that it believes do not fit the various criteria represented by the originators. While the bond insurer believes that these remediation efforts may have a material impact on the ultimate losses in these transactions, it have not factored in any potential recovery into its loss estimates at this time. In summary, Ambac has already taken substantial reserves against its CES and HELOC portfolios (48% and 33%, respectively, against below investment grade exposure). Moreover, Ambac has not assumed any recoveries related to its active remediation efforts. Despite very stressful loss estimates of its portfolio, Ambac believes it has already exceeded Moody's stressed Aaa ratings target as of April 30, 2008 and it continues to build excess capital. Maintaining its Aaa Moody's rating is an important business objective. As such, Ambac has scheduled to have detailed discussions with Moody's to present an updated drill down analysis on its second lien exposures. As previously reported in the TCR, Ambac disclosed a first quarter 2008 net loss of $1.6 billion. This compares to first quarter 2007 net income of $213.3 million. The first-quarter result was primarily affected by non-cash, mark-to-market losses on credit derivative exposures amounting to $1.7 billion in the first quarter 2008 driven by the continued disruption in the global credit markets impacting the fair value of Ambacs derivatives exposures during the quarter. The decrease was also caused in part by the current quarters loss provision on Ambacs financial guarantee direct exposures to mortgage-related securities which amounted to $1.0 billion, as well as by other than temporary impairment charges on certain investment securities within the financial services investment portfolio. About Ambac Financial Based in New York City, Ambac Financial Group, Inc. is a holding company that provides financial guarantees and financial services to clients in both the public and private sectors around the world through its principal operating subsidiary, Ambac Assurance Corporation. As an alternative to financial guarantee insurance credit protection is provided by Ambac Credit Products, a subsidiary of Ambac Assurance, in credit derivative format. * * * As reported in the Troubled Company Reporter on March 7, 2008, Moody's Investors Service said in a news statement that Ambac Financial Group Inc., if successful with its equity offering of $1.5 billion, will likely retain its "Aaa" rating. Moody's said that it will evaluate Ambacs ability to raise capital at reasonable terms as an indication of the companys financial flexibility and overall level of support from investors. In Moody's view, Ambacs new equity and equity linked capital through a public offering represents an important component of its overall plan to strengthen the credit profile of its financial guaranty insurance subsidiary, Ambac Assurance Corporation. On Jan. 18, Fitch Ratings downgraded Ambac to double-A after the insurer put off plans to raise equity capital. Moody's, the TCR said Jan. 17, 2008, placed the Aaa insurance financial strength ratings of Ambac Assurance Corporation and Ambac Assurance UK Limited on review for possible downgrade. In the same rating action, Moody's also placed the ratings of the holding company, Ambac Financial Group, Inc. (senior debt at Aa2), and related financing trusts on review for possible downgrade. Moody's stated that this rating action follows Ambacs announcement of record losses, a capital raising plan, and the retirement of its CEO. AMP'D MOBILE: To Sell Accounts Receivable to Afni for $2,560,000 ---------------------------------------------------------------- Amp'd Mobile, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of Delaware to sell its accounts receivable and all causes of actions relating solely to those accounts receivable to Afni, Inc., for $2,560,000, free and clear of all liens, claims, encumbrances, and interests. Upon analysis of its ongoing collection efforts, the Debtor's management concluded that the sale of the AR Portfolio in its entirety was the best method to maximize the recovery to the estate, Steven M. Yoder, Esq., at Potter, Anderson & Corroon LLP in Wilmington, Delaware, relates. The bid submitted by Afni is the highest and the best bid that the Debtor has received for the AR Portfolio Assets after a prolonged marketing period, Mr. Yoder says. The Debtor thus determined that the sale of the AR Portfolio to Afni will provide a significant influx of cash to the estate and will alleviate the need to continue to employ collection agencies who attempt to collect the accounts receivable in a piecemeal fashion over a prolonged period of time. The Debtor notes that a copy of the the account receivables to be sold to Afni is voluminous and is available upon request. Concurrent with the execution of the Purchase Agreement, Afni will deposit into escrow with Potter Anderson & Corroon LLP $256,000 in good funds. The Deposit will be non-refundable except if (i) the Agreement is terminated for any other reason other than Afni's default or breach, or (ii) the Debtor is unable to consummate the transaction. The Debtor asserts that any liens, claims, encumbrances, and interest on the AR Portfolio are capable of being satisfied by cash payment. Furthermore, the Debtor's Secured Lender has indicated its support for the Sale, according to Mr. Yoder. Stewart's Commission The Debtor also sought and obtained the Court's authority to pay a 2% commission fee to Shannon Stewart as compensation for his efforts in assisting with the negotiations of the terms of Afni sale. The Debtor notes that Mr. Stewart is its former employee who possessed the most knowledge of the AR portfolio. Following the cessation of the Debtor's operations in late July 2007, Mr. Stewart remained with the Debtor for a period of time to help assist with the disposition of the AR Portfolio. Those efforts proved unsuccessful, but Mr. Stewart assisted the Debtor in making arrangements with the various collection agencies that have since been attempting to maximize the recovery of the AR Portfolio. Recently, the Debtor was approached by Mr. Stewart and was informed that he had identified some potential new prospects interested in purchasing the AR Portfolio, Mr. Yoder tells the Court. "With no guarantee of payment, Mr. Stewart worked diligently and expeditiously to identify the level of interest and willingness of a potential buyer to proceed with a transaction," he cites. Without Mr. Stewart's efforts, the Debtor does not believe it would be in a position to sell the AR Portfolio and would instead be plodding along with its continued collection efforts. As a result, the Debtor, with the consent of the Secured Lender, believes that awarding Mr. Stewart the Commission Fee in connection with the Afni Transaction is fair and a good use of the estate assets under the circumstances. About Amp'd Mobile Headquartered in Los Angeles, California, Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm, represent the Debtor in its restructuring efforts. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C. and Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor listed total assets of $47,603,629 and total debts of $164, 569,842. The Debtor's exclusive period to file a plan expired on Sept. 29, 2007. The Debtor is in the process of selling various assets. (Amp'd Mobile Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). AMP'D MOBILE: To Sell Remaining "Hard" Assets to Great American --------------------------------------------------------------- Amp'd Mobile, Inc., seeks permission from the U.S. Bankruptcy Court for the District of Delaware to sell certain of its furniture and studio equipment to Great American Group LLC, for $170,000, free and clear of all liens, claims, encumbrances, and interests. Steven M. Yoder, Esq., at Potter Anderson & Corroon LLP in Wilmington Delaware, relates that since late July 2007, the Debtor's management has continued to market and solicit interest in the Debtor's remaining assets. The Debtor has sold furniture, equipment, and computers; completed a sale of its handset and handset accessories inventory; assigned its assets and rights related to certain intellectual property rights; sold its accounts receivable portfolio; marketed its remaining intellectual property assets; and commenced a large volume of avoidance actions all in an effort to maximize value for all its creditors. "[The latest proposed] sale [to Great American] represents the last remaining of the remaining 'hard' assets of the Debtor," Mr. Yoder tells the Court. Mr. Yoder notes that after eight months of marketing the Remaining Assets, the Debtor's management have concluded that the bid submitted by Great American is the highest and best bid the Debtor has received for the remaining assets. The Debtor also assert that the proposed sale will maximize recovery into its estate and prevent further deterioration of the value of the Assets. The Remaining Hard Assets will be sold on an "as is, where is" basis. A full-text copy to the Afni Asset Purchase Agreement is available for free at http://bankrupt.com/misc/AMPD_AFNIAPA.pdf About Amp'd Mobile Headquartered in Los Angeles, California, Amp'd Mobile Inc. aka Amp'D Mobile LLC -- http://www.ampd.com/-- is a mobile virtual network operator that provides voice, text and entertainment content to subscribers who contract for cellular telephone service. The company filed for chapter 11 protection on June 1, 2007 (Bankr. D. Del. Case No. 07-10739). Steven M. Yoder, Esq., Eric M. Sutty, Esq. and Mary E. Augustine, Esq. at The Bayard Firm, represent the Debtor in its restructuring efforts. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C. and Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor listed total assets of $47,603,629 and total debts of $164, 569,842. The Debtor's exclusive period to file a plan expired on Sept. 29, 2007. The Debtor is in the process of selling various assets. (Amp'd Mobile Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). AMPEX CORP: Files Amended Disclosure Statement and Chapter 11 Plan ------------------------------------------------------------------ Ampex Corporation and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the Southern District of New York an Amended Disclosure Statement dated May 9, 2008, explaining their Amended Joint Chapter 11 Plan of Reorganization. Overview of the Plan The Plan will enable the Debtors to continue their business operations without the possibility of a subsequent liquidation or further financial reorganization. Financial advisor Conway Mackenzie & Dunleavy estimates the Debtors' total enterprise value at at least $79 million by June 30, 2008. The enterprise value is based upon an aggregation of individual identifiable assets providing cash flow streams. Under the Plan, the Debtors' pension plans -- employees' retirement plan and Quantegy Media Corporation retirement plan -- will not be terminated. The Debtor will continue to fund the plans in accordance with the minimum financing standards under the Internal Revenue Code and ERISA. The Debtors have estimated contributions of at least $52,900,000 by 2013. Credit Agreement Hillside Capital Incorporated and its affiliates will provide $25 million in loan to the Debtors. The loan will bear interest at 10% per annum. To secure the loan obligation, Hillside is entitled to a second priority and subordinate lien on substantially all assets of the Debtors. Treatment of Claims and Interests Type of Estimated Estimated Class Claims Treatment Amount recovery ----- ------- --------- --------- --------- unclassified Administrative $100,000 100% Expense Claims unclassified Fee Claims $2,900,000 100% unclassified Priority Tax $200,000 100% Claims 1 Priority Non- unimpaired $0 100% Tax Claims 2 Senior Secured impaired $6,900,000 100% Note Claims 3 Other Secured unimpaired $0 100% Claims 4 Hillside impaired $11,000,000 100% Secured Claims 5 General impaired $51,600,000 100% Unsecured Claims 6 Existing Common impaired $0 0% Stock 7 Existing impaired $0 0% Securities Laws Claims 8 Other Existing impaired $0 0% Interests A full-text copy of the Amended Joint Chapter 11 Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?2be6 A full-text copy of the Amended Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2be8 About Ampex Headquartered in Redwood City, California, Ampex Corp. -- http://www.ampex.com/-- (Nasdaq:AMPX) is a licensor of visual information technology. The company has two business segments: Recorders segment and Licensing segment. The Recorders segment primarily includes the sale and service of data acquisition and instrumentation recorders (which record data and images rather than computer information), and to a lesser extent mass data storage products. The Licensing segment involves the licensing of intellectual property to manufacturers of consumer digital video products through their corporate licensing division. On March 30, 2008, Ampex Corp. and six affiliates filed for protection under Chapter 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York (Case Nos. 08-11094 through 08-11100). Matthew Allen Feldman, Esq., and Rachel C. Strickland, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors in their restructuring efforts. The Debtors have also retained Conway Mackenzie & Dunleavy as their financial advisors. In its schedules of assets and liabilities filed with the Court, Ampex Corp. disclosed total assets of $9,770,089 and total debts of $82,488,054. The Debtors have nine foreign affiliates that are incorporated in seven countries -- one each in the United Kingdom, Japan, Belgium, Colombia and Brazil and two each in Germany and Mexico. With the exception of the affiliates located in the U.K. and Japan, none of the other foreign affiliates conduct meaningful business activity. As of March 30, 2008, none of the foreign affiliates have commenced insolvency proceedings. ATARI INC: Infogrames Entertainment Declares 51.6% Equity Stake --------------------------------------------------------------- Infrogames Entertainment S.A. and California U.S. Holdings, Inc. declare beneficial ownership of 6,926,245 shares of Atari Inc. common stock, representing 51.6% of the company's outstanding common stock. Headquartered in New York, Atari Incorporated, (NASDAQ: ATAR) -- http://www.atari.com/-- publishes and distributes interactive entertainment software in the U.S. The company's 1,000+ published titles distributed by the company include hard-core, genre- defining franchises such as Test Drive(R); and mass-market and children's franchises such Dragon Ball Z(R). Atari Inc. is a majority-owned subsidiary of France- based Infogrames Entertainment SA, an interactive games publisher in Europe. As reported in the Troubled Company Reporter on Feb. 20, 2008, Atari Inc.'s consolidated balance sheet at Dec. 31, 2007, showed $43.5 million in total assets and $60.3 million in total liabilities, resulting in a $16.8 million total stockholders' deficit. * * * New York-based Deloitte & Touche LLP expressed substantial doubt about Atari's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2007. The auditing firm pointed to the company's significant operating losses. As reported in the Troubled Company Reporter on March 28, 2008, Atari Inc. received a Staff Determination Letter from the Nasdaq Listing Qualifications Department stating that Atari Inc. has not gained compliance with the requirements of Nasdaq Marketplace Rule 4450(b)(3), and that its securities are therefore subject to delisting from The Nasdaq Global Market. On Dec. 21, 2007, the Nasdaq Listing Qualifications Department notified Atari Inc. that, pursuant to Nasdaq Marketplace Rule 4450(e)(1), unless the market value of Atari Inc.'s publicly held shares, which is calculated by reference to Atari Inc.'s total shares outstanding, less any shares held by officers, directors or beneficial owners of 10% or more, maintains an aggregate market value of $15 million or more for a minimum of 10 consecutive business days prior to March 20, 2008, Atari Inc.'s securities would be subject to delisting. BANK OF AMERICA MORTGAGE: Fitch Affirms BB Rating on Two Classes ---------------------------------------------------------------- Fitch Ratings has taken rating action on these Bank of America (BOAM) mortgage pass-through certificates: Series 2003-6 Group 1; -- Class 1A-1 affirmed at 'AAA', removed from Rating Watch Negative; -- Class 1A-2 affirmed at 'AAA' -- Class 1A-3 affirmed at 'AAA' -- Classes 1A-5 through 1A-27 affirmed at 'AAA'; -- Classes 1A-29 through 1A-41 affirmed at 'AAA'; -- Class 1A-PO affirmed at 'AAA'; Series 2004-4 Group 1; -- Classes 1A-1 through 1A-11 affirmed at 'AAA'; -- Class 1A-12 affirmed at 'AAA', removed from Rating Watch Negative; -- Class 1A-PO affirmed at 'AAA'; -- Class 130-IO affirmed at 'AAA'; -- Class 30B-2 affirmed at 'A'; -- Class 30B-3 affirmed at 'BBB'; -- Class 30B-4 affirmed at 'BB'. Series 2004-7 Groups 1 & 5; -- Class 1A-1 affirmed at 'AAA' -- Class 1A-2 affirmed at 'AAA' -- Classes 1A-5 through 1A-19 affirmed at 'AAA'; -- Classes 5A-1 through 5A-15 affirmed at 'AAA'; -- Class 5A-16 affirmed at 'AAA', removed from Rating Watch Negative; -- Class 1X-PO affirmed at 'AAA'; -- Class 130-IO affirmed at 'AAA'; -- Class 5X-PO affirmed at 'AAA'; -- Class 530-IO affirmed at 'AAA'; -- Class 30B-1 affirmed at 'AA'; -- Class 30B-2 affirmed at 'A'; -- Class 30B-3 affirmed at 'BBB'; -- Class 30B-4 affirmed at 'BB'; -- Class 30B-5 rated 'B', placed on Rating Watch Negative. The collateral on the aforementioned transactions consists of mixed term fixed-rated mortgages extended to prime borrowers. Bank of America deposited the loans into the trust, and acts as the servicer for the collateral. Bank of America Mortgage has a servicer rating of 'RPS1' provided by Fitch. Class 1A1 from series 2003-6, Class 1-A-12 from series 2004-4, and Class 5-A-16 from series 2004-7 are insured by MBIA. For more information please refer to 'Fitch Moves to Underlying Ratings for MBIA-Insured Bonds' dated Apr. 4, 2008, available on the Fitch Ratings Web site at http://www.fitchratings.com/ BARR LABORATORIES: Moody's Affirms Ba1 Ratings & Revises Outlook ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Barr Laboratories, Inc. including the Ba1 Corporate Family rating and the SGL-2 Speculative Grade Liquidity Rating. At the same time, Moody's revised the rating outlook to stable from positive. The rating outlook had been positive since the initial rating assignment of Barr on Aug. 25, 2006. The outlook revision to stable reflects Moody's belief that Barr appears increasingly unlikely in the near term to comfortably sustain the cash flow to debt ratios appropriate for Moody's "Baa" range outlined in Moody's Global Pharmaceutical Rating Methodology. These ratios include cash flow from operations to debt of 25% to 40% and free cash flow to debt of 15% to 25%. For the twelve months ended March 31, 2008, Moody's estimates that Barr's CFO/Debt was 17% and FCF/Debt was 10%, reflecting Moody's standard adjustments. Moody's anticipates improvement in these ratios during 2008, but at a slower pace than prior expectations. "Barr's cash flow to debt ratios should solidly sustain the current Ba1 rating, but appear unlikely to support an upgrade to investment grade in the near term," stated Moody's Senior Vice President Michael Levesque. Barr's U.S. generic sales and contraceptives sales experienced softness during the first quarter of 2008, declining 15% and 18% respectively because of increasing competition and pricing pressure. Moody's believes that these factors are unlikely to be fully offset by new generic launches in 2008 along with rising sales in Barr's proprietary business. Barr's Ba1 continues to reflect the criteria outlined in Moody's Global Pharmaceutical Rating Methodology, with consideration given to Barr's large presence as a generic drug manufacturer. Positive factors on size/scale ("Baa"), EBITA margin ("Aa") and return on equity ("A") are offset by lower scores on CFO/Debt ("Ba"), FCF/Debt ("Ba") and cash coverage of debt ("B"). Over time, factors that would support positive rating pressure include healthier growth rates in Barr's generics business, cash flow to debt ratios to levels solidly within the "Baa" ranges, and a disciplined approach to any future business development with clearly defined capital structure targets or credit ratio metrics. Conversely, factors that would create negative pressure include inability to sustain cash flow to debt ratios near the high end of Moody's "Ba" ranges, faster than expected price erosion combined with few launches of new products, or debt-financed acquisitions. Ratings affirmed: Barr Laboratories, Inc.: -- Ba1 Corporate Family Rating -- Ba1 Probability of Default Rating -- Ba1 (LGD4, 50%) senior unsecured Term Loan A due 2011 -- Ba1 (LGD4, 50%) senior unsecured Revolving Credit Facility of $300 million due 2011 -- SGL-2 Speculative Grade Liquidity rating Outlook change: to stable from positive Headquartered in Montvale, New Jersey, Barr Pharmaceuticals, Inc. [NYSE: BRL] is one of the five largest companies specializing in the U.S. generic pharmaceutical market. The company reported $2.5 billion of net revenues during 2007. Barr Laboratories, Inc. is a wholly-owned subsidiary of Barr Pharmaceuticals, Inc. BEXAR FINANCE: Moody's Holds Ba2 Rating on Subordinate Bonds ------------------------------------------------------------ Moody's Investors Service has affirmed the Bexar County Housing Finance Corporation Multifamily Revenue Refunding Bonds (Doral Club and Sutton House Apartments Project), Series 2001 A at Baa2 and Subordinate Series 2001C at Ba2. The Series A Bonds will continue to maintain MBIA bond insurance. The rating affirmations are reflective of debt service coverage levels that are consistent with Moody's benchmarking standards. The outlook remains negative. Doral Club, which is a 297 unit multi-family property, was built in 1985 and is composed of 11, three story buildings located in the northwest section of San Antonio. Sutton House Apartments, which was also built in 1985, is a 265 unit multi-family garden style complex comprised of 18 three story buildings located in the north central section of San Antonio. Legal Security: All bonds are secured by revenues of the project as well as by funds and investments pledged to the trustee as security for the bonds. Strengths: -- Revenues continue to generate enough funds for all expenses and debt service payments. -- The properties are located near major employment centers. Challenges: -- Debt service coverage of senior and subordinate debt have both declined but remain above 2005 levels. -- A substantial number of multi-family units are currently in the pipeline within the northwest and north central San Antonio submarket which will likely reduce occupancies at existing properties. Recent Developments: Interim financial statements indicate coverage declined slightly in 2007 with projected senior debt coverage of 1.47x and subordinate coverage projected at 1.18x. Occupancy at the Doral and Sutton developments were 92% and 96.23% respectively in 2007, which is consistent with the 94.7% average in each submarket reported by Torto Wheaton Research. Vacancy in the submarket is forecasted to decrease to 93.5% and 93.4%, respectively, in 2008 and 92.60% and 92.40%, respectively, in 2009 by TWR. In 2007, a total of 1,228 units of new multi-family housing were completed in the North Central and Northwest San Antonio submarkets. Both developments will likely be negatively impacted as the new product will provide strong competition. The local economy has improved with approximately 16,000 jobs added to the local work force in 2007. Over the past five years, employment has grown at an average annual rate of 2.0%, while in the U.S., the employment has grown at a slower 1.2% annually. Although the overall economy has strengthened, competition continues to increase as the market remains overbuilt. The market has seen 5,933 new units added during the prior 12 months. There are over 3,818 units planned for 2008. 925 of these units are directly in the Sutton sub-market and 759 units are in the Doral sub-market. What could change the rating -UP Stabilization of occupancy and increase in debt service coverage. What could change the rating -DOWN A decline in occupancy and/or a decrease in debt service coverage. Outlook The outlook remains negative. BOSTON GENERATING: S&P Holds 'B+' Rating on $1.13 Billion Loan -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' issue-level rating on Boston Generating LLC's $1.13 billion first-lien term loan B due in 2013, its $70 million revolving facility, and its $250 million LOC facility. The '1' recovery rating on these issues remains unchanged. Standard & Poor's also affirmed its 'B-' rating on the issuer's second-lien $350 million term loan C. The '4' recovery rating on this loan remains unchanged. The outlook is negative. The $300 million of holding company notes outstanding at parent EBG Holdings are not rated. The affirmation follows the project's commitment to improve credit quality by taking remedial steps to improve financial performance after lower-than-expected financial performance for 2007. The project has entered into a new hedge agreement with Sempra Energy for the Fore River facility, and restructured its existing hedge agreement on Mystic 8 and 9 with Credit Suisse. It also resolved the dispute and restructured its fuel supply agreement with Distrigas. While Standard & Poor's views these actions positively, no immediate improvement in financial performance is expected until second half of 2009, when higher capacity prices, improved margins due to lower basis risk, and benefits of restructured fuel supply agreement are expected to become visible. The negative outlook on Boston Gen reflects S&P's concern that financial performance has fallen short of anticipated levels. The rating may be lowered if the project is forced to use a significant proportion of its restricted cash to meet its 2008 covenants as described earlier, or if it's unable to demonstrate sustainable improvement in its financial performance thereafter. Prospects for an upgrade or outlook revision to positive in the near term are unlikely given the increase in refinancing risk when the debt matures in 2013, and the expectation of tight covenant ratios through most of 2008. BRESNAN COMMUNICATIONS: Moody's Affirms B2 Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service affirmed its ratings for Bresnan Communications, LLC, as outlined below. At the same time, Moody's changed the rating outlook to positive from stable based on the Company's strong operating performance and de-leveraging, coupled with expectations of similar industry outperformance over the forward rating horizon. Moody's has taken these rating actions: Bresnan Communications, LLC -- Corporate Family Rating -- Affirmed B2 -- Probability-of-Default Rating -- Affirmed B2 -- $125 million senior 1st lien secured revolving credit facility due 2012 -- Affirmed B2, LGD3 -- 44% -- $75 million senior 1st lien secured term loan A due 2012 -- Affirmed B2, LGD3 -- 44% -- $540 million senior 1st lien secured term loan B due 2013 -- Affirmed B2, LGD3 -- 44% -- $100 million senior 2nd lien secured term loan due 2014 -- Affirmed Caa1, LGD6 -- 94% -- Outlook -- Changed to Positive from stable The B2 corporate family rating reflects the company's high financial risk, as evidenced by moderately high leverage, weak coverage and negative free cash flow. These risks are exacerbated by the company's relatively small scale and the likelihood of heightened business risks in future periods as the competitive environment intensifies. The rating is also constrained by the predominantly financial sponsor-driven ownership structure, which has historically demonstrated a propensity for effecting shareholder distributions through debt-financed transactions. These risks are mitigated, however, by the company's good liquidity profile and strong historical operating performance since 2005, as well as expectations of similar results going forward. The business environment in Bresnan's markets has also been somewhat benign from a competitive perspective, with only a relatively limited threat posed by incumbent phone service providers contributing to above average penetration rates for ancillary products and service offerings to date. The rating is also supported by the continuing relationship with Comcast Corporation, a minority owner of the company, the benefits of affiliation with which support margin enhancement through savings under programming procurement contracts as well as other cash flow benefits via equipment purchase discounts, and which Moody's believes afford additional flexibility to compete more aggressively for customers. The positive outlook specifically incorporates Moody's expectation of continued deleveraging of the company's balance sheet and the achievement of modestly positive free cash flow driven by ongoing above-average operating performance over the next 12-to-18 months, which could prompt a rating upgrade during this period. Bresnan Communications, LLC is a multiple cable television system operator serving more than 300,000 subscribers in the states of Colorado, Montana, Wyoming, and Utah. Headquartered in Purchase, New York, the company's revenue was $354 million for the twelve- month period ended March 31, 2008. BROADWAY GEN: S&P Holds 'BB-' Preliminary Rating on $800MM Loan --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its preliminary 'BB-' credit rating on merchant power generator Broadway Gen Funding LLC's $800 million first-lien term loan due 2014, $150 million first-lien revolving credit facility due 2013, and $165 million first-lien LOC facility due 2014. Standard & Poor's also affirmed its '1' recovery rating on the combined $1.115 billion first-lien debt obligations, reflecting the expectation of very high (90%- 100%) recovery of principal in the event of a default. Standard & Poor's also affirmed its preliminary 'B' debt rating and '3' recovery rating on the $250 million second-lien term loan. The '3' recovery rating indicates the expectation of meaningful (50% to 80%) recovery of principal under an assumed default scenario. Standard & Poor's also revised the outlook on all the loans to positive from stable, reflecting its expectation that all or nearly all debt will be repaid in the near term. The project sponsor expects all debt principal to be repaid about May 2008 as a result of the following four asset sales: Shady Hills Power Co. LLC (sale date June 21, 2007), Zeeland Power Co. LLC (sale date Dec. 21, 2007), Bosque Power Co. LLC (sale date Jan. 15, 2008) and Sugar Creek Power Co. LLC (expected sale date May 2008). Broadway Gen used the debt issuance to finance its acquisition of six gas-fired power-generation facilities that Mirant Corp. (B+/Stable/--) previously owned and operated. The asset sale followed Mirant's announced intention to focus on its core markets in the Mid-Atlantic and Northeast regions and in California. "The positive outlook on Broadway Gen reflects our view that all or nearly all debt will be repaid in the near term by means of a fourth asset sale (Sugar Creek Power Co. LLC ), expected to close about May 2008," said Standard & Poor's credit analyst Matthew Hobby. "Although we expect the Sugar Creek sale to be completed, if it is not completed, the outlook could be revised to stable," he continued. CANADIAN TRUSTS: Ontario Court Defers Ruling on ABCP Amended Plan ----------------------------------------------------------------- Ontario Superior Court Justice Colin Campbell convened a sanction hearing on May 12 and 13, 2008, to consider the Amended Plan of Compromise and Arrangement proposed by the Pan-Canadian Investors Committee for Third Party Structured Asset Backed Commercial Paper. No official ruling has been issued as of press time. Mr. Justice Campbell has said he plans to enter a decision on the matter very soon, according to Reuters. "I will try to do my part in a relatively short period of time," Reuters quoted Mr. Justice Campbell as saying. Mr. Justice Campbell has noted during the May 12 hearing that he has a problem with the ABCP Plan provision that provides certain ABCP participants immunity from lawsuits, according to John Greenwood of Canwest News Service. At the hearing, investors represented by the Pan-Canadian Investors Committee for Third Party Structured Asset Backed Commercial Paper appeared before the Ontario Superior Court to convince the Court to sanction the Plan for these reasons: -- The requisite majorities of the Applicants' creditors overwhelmingly approved the Amended Plan; -- There has been compliance with all statutory requirements and adherence to previous orders of the Court; -- Nothing has been done or purported to be done that is not authorized by the Companies' Creditors Arrangement Act, R.S.C. 1985, C. C-36, as amended; -- The Amended Plan is fair and reasonable; and -- The Applicants rely upon Rules 1.04 and 3.02 of the Rules of Civil Procedure and Section 6 of the Companies' Creditors Arrangement Act, R.S.C. 1985, c., C-36, as amended. The Applicants have proposed that upon the sanction of the Amended ABCP Plan, Ernst & Young Inc., as Monitor; the CCAA Parties; the Issuing and Paying Agents; the New Issuer Trustee; the issuing and paying agents in respect of the Plan Notes; the Depositary and CDS Clearing & Depository Services Inc., and the participants will be authorized to complete the distributions contemplated under the Amended Plan. Any distributions under the Amended Plan will not constitute a "distribution" for the purposes of Section 159 of the Income Tax Act (Canada), Section 270 of the Excise Tax Act (Canada) and Section 107 of the Corporations Tax Act (Ontario). In making any payments under the Amended Plan, any party is not considered "distributing", nor will it be considered to have "distributed", the funds. A paying party will also not incur any liability for making any payments ordered by the Court, and will thus be forever released from any claims against it. The Applicants have contemplated that as of the Plan Implementation Date, the Amended Plan, including all compromises, arrangements, transactions, releases, discharges and injunctions related to it, will inure to the benefit of, and be binding and effective on the Noteholders, the Monitor, and all other persons affected. No Person who is a party to any obligation or agreement with the CCAA Parties will, following the Implementation Date, accelerate, terminate, rescind, refuse to perform or repudiate its obligations under the Plan, or enforce or exercise any right -- including any right of set-off, dilution or other remedy -- or make any demand in respect of any obligation or agreement. On the Implementation Date, the Monitor will be discharged and released and will have no further obligations or responsibilities, except only with respect to any remaining duties or powers required to implement and give effect to the terms of the Amended Plan. The CCAA Charges on the assets of the CCAA Parties provided for in the Initial CCAA Order and any subsequent Orders in the CCAA Proceedings will automatically be fully and finally terminated, discharged and released on the Plan Implementation Date. However, the Monitor will continue to hold the benefit of a CCAA Charge, as provided in the Initial CCAA Order, until the Monitor has completed its duties under the Plan and the fees and disbursements of the Monitor and its counsel have been fully paid. The provisions of the Initial CCAA Order will remain in full force and effect until the Implementation Date. Effective on the Implementation Date, all the compromises, arrangements, exculpations, releases, discharges and injunctions will be sanctioned because these are necessary for the success of the Plan, the Applicants noted. About the ABCP Trusts Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately $33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CANADIAN TRUSTS: ABCP Panel Responds to Demand for Plan Changes --------------------------------------------------------------- The Honourable Mr. Justice Colin Campbell of the Ontario Superior Court of Justice heard on April 22 and 23, 2008, a number of motions seeking amendments to the Plan of Compromise and Arrangement presented by the Pan-Canadian Investors Committee for Third Party Structured Asset Backed Commercial Paper. Representing the Applicants, Benjamin Zarnett, at Goodmans LLP, in Toronto, Ontario, notes that some creditors have argued that they required further information in order to cast their votes in an informed manner. Ernst & Young, Inc., has confirmed holdings of more than of C$31 billion in total ABCP and that, from that total, the holders of approximately $30.1 billion of ABCP -- representing approximately 97% of all of the Affected Canadian ABCPs -- cast votes at a creditors' meeting held on April 25, 2008. Of that amount, the holders of approximately $28.9 billion in ABCP, or 96%, voted in favour of the Plan, Mr. Zarnett points out. Logically, one would expect that people who felt they did not have enough information to vote would either abstain or vote against the Plan unless their information needs were satisfied, Mr. Zarnett contends. He notes that both the absence of any significant number of abstentions and the overwhelming support for the Plan establish that the holders of ABCP were able to and did vote as they wished. A concern has been raised that it is unreasonable to expect Noteholders to ratify the Plan when final definitive documents for all aspects of the Plan are not yet available, Mr. Zarnett says. The fact that Noteholders voted 96% in favour of the Plan answers this concern, he avers. In addition, he cites, the Plan, as approved by Noteholders, describes the material terms of certain "approved agreements" which will implement the Plan. Some parties question whether the need to provide global releases to the Asset Providers and certain Canadian banks has been fully established. "The Applicants submit that 96% of the Noteholders have expressed the view that they do not propose to play a high- stakes game of chicken to test the resolve of the parties whose contributions to this restructuring are essential," Mr. Zarnett says. Some Noteholders argue that they voted "yes" while reserving their rights to challenge the global releases, and that this qualifies the degree of support that can be drawn from the 96% approval. However, their vote must signify a willingness to accept the Plan even if modified releases are not available, Mr. Zarnett observes. If they were not prepared to accept the Plan at all, they would have voted "no", he concludes. CIBC Mellon and Paquette Entities Present Side A. CIBC Mellon, et al. Indenture Trustees CIBC Mellon Trust Company, Computershare Trust Company of Canada and BNY Trust Company of Canada assert that the Court has the jurisdiction and power to include them in the Plan Release Provisions. Jeffrey S. Leon, Esq., at Bennett Jones LLP, in Toronto, Ontario, relates that Mr. Justice Campbell advised on May 2, 2008, that if any party opposes the inclusion of the Indenture Trustees, in the Plan Releases, it should inform counsel of the Indenture Trustees prior to the Sanction Hearing. Mr. Leon discloses that as of May 9, no party has communicated its opposition to the inclusion of the Indenture Trustees to the Release Parties. "It is fair, reasonable, appropriate and necessary that the Indenture Trustees are included in the Release," Mr. Leon insists. "It would be unreasonable to expect the Indenture Trustees to incur liability when a debtor becomes insolvent." According to Mr. Leon, a restructuring that involves the property of the trust necessitates that any potential claims against the Indenture Trustees be compromised and released as part of the Plan so that the assets of the trusts can be dealt with in the restructuring for the benefit of the Noteholders. B. Paquette Entities Paquette & Associes Huissers en Justice, s.e.n.c. and Andre Perron, Francois Taillefer, Jean-Guy LaChance, Jean-Marc Paquette, Pierre LaMarche, Francois Cantin and Charles Pacquette objects to a request made by Cinar Corporation, Cinar Productions (2004) Inc. and Cookie Jar Animation Inc., to exclude the Paquette Entities from the Plan Release provisions. According to Cinar, the Paquette Entities have obligations to distribute proceeds from a judicial sale of certain "Weinberg Properties." Murray Stieber, Esq., at Stieber Berlach LLP, in Toronto, Ontario, relates that the Paquette Entities sold the Weinberg Properties in December 2006, and placed the proceeds into Paquette's general trust account at National Bank of Canada. The Paquette Entities named Cinar as a creditor under a "scheme of collocation." Subsequently, the Paquette Entities transferred the proceeds to a special trust at National Bank Financial -- with the consent of Cinar -- to allow the money to earn interest. The Paquette Entities then invested the proceeds in the purchase of ABCP, which NBF depicted as a safe investment. According to Mr. Stieber, the Paquette Entities acted at all times, in accordance with its duties and obligations as a bailiff. It would be unfair if Mr. Justice Campbell granted Cinar's request and exclude the Paquette Entities from the Release Parties, without similarly denying NBC and NBF's inclusion in the Release Parties, Mr. Stieber argues. About the ABCP Trusts Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately $33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CANADIAN TRUSTS: Ernst & Young Delivers 7th Status Report --------------------------------------------------------- Ernst & Young, Inc., as monitor of the proceedings commenced by the Pan-Canadian Investors Committee for Third-Party Structured Asset-Backed Commercial Paper under Canada's Companies' Creditors Arrangement Act, delivered its seventh monitor report on May 6, 2008, to the Ontario Superior Court of Justice to inform Honorable Justice Colin Campbell of, among other things, additional information with respect to a summary of alleged claims that was provided to the Court by the Monitor in connection with a May 2 case conference. The Monitor reports that on May 1 and 2, 1008, Borden Ladner Gervais LLP, the Monitor's counsel, provided the Court with certain information regarding the May 2 case conference: -- a summary of alleged claims prepared by the Monitor based on information it has received from counsel to various moving parties; -- a copy of a submission from National Bank Financial in response to certain claims asserted against it based on the Summary of Alleged Claims; -- a letter from Coventree, Inc., Coventree Capital Inc., and Coventree Mortgage Finance Corp. to counsel of the Monitor, indicating the parties against which Coventree would assert counter-claims if certain of the litigation against Coventree were not released by the implementation of the Plan; and -- a summary chart of the types of parties against which claims and claims over might be asserted based on the Summary of Alleged Claims, the submission from National Bank Financial, and the letter from Coventree. According to the Monitor, the Summary of Alleged Claims indicates that various moving parties have asserted that their aggregate holdings of Affected ABCP are in the range of C$1.6 billion to C$3.4 billion. The broad range of dollar amounts arises primarily from the information provided by counsel to the Ad Hoc Committee of Holders of Non-Bank Sponsored Asset-Backed Commercial Paper, which has specified a range of dollar amounts for the quantum of holdings of Affected ABCP by each person represented on the Ad Hoc Committee, the Monitor states. The Monitor has reviewed the amounts of the holdings of Affected ABCP indicated to the Monitor by those parties that are listed in the Alleged Claim Summary who filed Voter Identification Forms or Voter Confirmation Forms with the Monitor. To preserve confidentiality, the Monitor has not indicated the dollar value holdings of Affected ABCP by party, but reports that: a) Not all of the parties listed in the Alleged Claim Summary filed VIFs or VCFs with the Monitor. It is not currently possible for the Monitor to report the aggregate holdings of Affected ABCP by those parties; b) The names of the persons included in the Summary of Alleged Claims in respect of the Ad Hoc Committee have not been provided to the Monitor and therefore, it is unable to definitively identify the holdings of Affected ABCP for those parties; and c) The aggregate holdings of Affected ABCP indicated by the parties listed in the Alleged Claim Summary (i) whose names were provided to the Monitor, and (ii) that did file VIFs or VCFs with the Monitor, aggregate approximately C$1.1 billion. About the ABCP Trusts Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately $33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CANADIAN TRUSTS: Creditors Assert Claims Against CCAA Parties ------------------------------------------------------------- In its Seventh Monitor Report, Ernst & Young Inc., as Monitor in the CCAA proceedings commenced by The Investors represented the Pan-Canadian Investors Committee for Third Party Structured Asset Backed Commercial Paper, disclosed that several creditors have asserted claims against the CCAA Parties, certain banks, including National Bank of Canada, dealers and liquidity providers. The CCAA Parties include the Assets Backed Commercial Paper Trusts or the Conduits and the Issuer Trustees of the ABCP Trusts or the Respondents. The Creditors alleged causes of action which include: * breach of contract, * breach of fiduciary duty, * breach of statutory duty, * negligence, * failure to act as a prudent dealer and advisor, * misrepresentation, * acting in bad faith and in conflict of interest, and * failure to disclose. The Creditors who have asserted claims include: Estimated Claimant Damages Sought -------- -------------- Domtar Inc., as administrator C$352,644,706 for retirement plans Air Trans A.T. Inc. 143,501,000 Aeroports de Montreal 58,500,000 Agence Metropolitaine de 44,500,000 Transport The Jean Coutu Group (PJC) Inc. 34,288,000 Pomerleau Inc. 26,500,000 Hy Bloom Inc. and 12,258,000 Cardacian Mortgage Services, Inc. Giro Inc. 7,800,000 A full-text copy of the Alleged Claims is available for free at: http://bankrupt.com/misc/ABCP_AllegedClaims.pdf National Bank of Canada Responds National Bank of Canada and its affiliates, having been identified by certain creditors as likely targets of claims in the event that the Plan of Compromise and Arrangement proposed by the Pan-Canadian Committee's CCAA proceedings is not sanctioned by the Court, notes that Alleged Claims are generally in the nature of "broker-dealer" claims. According to the National Bank, the ABCP market operated on a continuous and uninterrupted basis for many years preceding the market freeze in August, 2007. National Bank noted that it was in the context of a fully functioning market that it participated and dealt with ABCPs as a broker-dealer. National Bank contends that if the Claimants' actions are allowed to proceed, it will be necessary for all market participants to become parties to the litigation in order to assess whether their conduct, acts or omissions were relevant to the failure of the ABCP market and if so, to determine whether that conduct, or those acts or omissions, give rise to liability to National Bank or to other parties who in turn may be liable to National Bank in the event that it is adjudged to have any liability to one or more of the Claimants. The National Bank prepared a chart which identifies for each conduit engaged by a claim, the party or parties that could be the target of a potential claim by National. A copy of the Summary Chart is available for free at: http://bankrupt.com/misc/ABCP_SummaryChart.pdf Redcorp & Jura Hold HSBC Responsible Redcorp Ventures Ltd. and Jura Energy Corporation, noteholders of affected ABCP, inform the Court that they Purchased ABCP on the advice of HSBC Bank Canada, and on the basis of HSBC's assurances that the investments were safe, short-term and liquid. Redcorp is holder of about C$91.4 million Affected ABCP in four Conduits -- Aurora Trust, Comet Trust, SIT III Trust and Rocket Trust. Jura invested C$14.9 million in Series A Notes. Redcorp and Jura assert that they was not aware of HSBC's involvement in the structuring of ABCP, nor that HSBC was an asset provider or liquidity provider. Redcorp and Jura also state that at the time they were seeking investment advice from HSBC, the Bank was fully aware that safety and liquidity were their primary concerns. Redcorp and Jura insist that because of the nature of their individual relationships with HSBC, the Bank had obligations to thoroughly investigate and recommend to the companies only those investments that were consistent with their objectives of safety and liquidity. At no time until the ABCP market froze on August 13, 2007, did anyone at HSBC disclose to Redcorp and Jura information about the deterioration in the non-bank ABCP market in Canada and globally, the companies insist. According to Jura and Redcorp, their companies need access to cash resources in the near future. They also said that long-term notes contemplated by the proposed ABCP Plan are of no use to them, since they need cash or highly liquid instruments to meet their companies' expenditures. Redcorp and Jura assert that bringing a claim against HSBC is very important to them, because they hold HSBC responsible for the situation they are currently in. About the ABCP Trusts Apollo Trust, Apsley Trust, Aria Trust, Aurora Trust, Comet Trust, Devonshire Trust, Encore Trust, Gemini Trust, Ironstone Trust, MMAI-1 Trust, Newshore Canadian Trust, Opus Trust, Planet Trust, Rocket Trust, Selkirk Funding Trust, Silverstone Trust, Slate Trust, Structured Asset Trust, Structured Investment Trust III, Symphony Trust, Whitehall Trust are entities based in Canada that issue securities called third-party structured finance asset- backed commercial paper. As of Sept. 14, 2007, these 21 Canadian Trusts had approximately $33 billion of outstanding ABCP. As reported by the Troubled Company Reporter on March 18, 2008, Justice Colin Campbell of the Ontario Superior Court of Justice granted an application filed on March 17 by The Pan-Canadian Investors Committee for Third-Party Structured ABCP under the provisions of the Companies' Creditors Arrangement Act. The Committee asked the Court to call a meeting of ABCP noteholders to vote on a plan to restructure 20 trusts affecting $32 billion of notes. The trusts were covered by the Montreal Accord, an agreement entered by international banks and institutional investors on Aug. 16, 2007 to work out a solution for the ABCP crisis in Canada. Justice Campbell appointed Ernst & Young, Inc., as the Applicants' monitor, on March 17, 2008. (Canadian ABCP Trusts Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). CENTURY CASINOS: Lender Grants Waiver in Exchange for Cash Payment ------------------------------------------------------------------ Century Casinos Inc. received in April 28, 2008, a written waiver from its lender in Central City, Colorado, for a covenant violation in adjusted fixed charge coverage. The waiver was granted in exchange for a cash payment of $162,500. The company's net earnings for the quarter ended March 31, 2008, was of $541,000. Net earnings for the 2007 first quarter were $1,542,000. At March 31, 2008, the company's balance sheet showed total assets of $186.2 million, total liabilities of $76.4 million and total shareholders' equity of $109.8 million. Headquartered in Colorado Springs, Colorado, Century Casinos Inc. (Nasdaq: CNTY) -- http://www.centurycasinos.com/-- is an international casino entertainment company that owns and operates the Womacks Casino and Hotel in Cripple Creek, Colorado, the Century Casino & Hotel in Central City, Colorado, the Century Casino & Hotel in Edmonton, Alberta, Canada, and the Century Casino Millennium in the Marriott Hotel in Prague, Czech Republic. The company also operates casinos aboard the Silver Cloud, The World of ResidenSea, and the vessels of Oceania Cruises. Through its subsidiary Century Casinos Africa (Pty) Limited, it owns and operates The Caledon Hotel, Spa & Casino near Cape Town, South Africa, as well as 60% of, and provides technical casino services to, Century Casino Newcastle, in Newcastle, South Africa. Furthermore, the company's Austrian subsidiary, Century Casinos Europe GmbH, holds a 33.3% ownership interest in Casinos Poland Ltd, the owner and operator of seven full casinos and one slot casino in Poland. CENTURY CASINOS: Inks Credit Facility Amendment with Lenders ------------------------------------------------------------ Century Casinos Inc. entered into an Eighth Amendment to its Amended and Restated Credit Agreement dated April 21, 2000, to: 1) extend the maturity date of the credit agreement from Dec. 31, 2008, to Dec. 31, 2009; 2) reduce the aggregate commitment and maximum permitted balance available to the Borrowers from $15.5 million to $10.0 million; 3) eliminates the requirements to make any Scheduled Reductions prior to Dec. 31, 2009 and the TFCC Ratio; 4) redefines and modifies the covenant requirements for the Interest Expense Coverage Ratio and the Restriction on Distributions Covenant; and 5) Adds a Minimum Make-Well Adjusted Quarterly EBITDA financial covenant. This financial covenant permits the Borrower to receive an Equity Contribution within 40 days after the end of the Fiscal Quarter which is subject to the Minimum Make-Well Adjusted Quarterly EBITDA financial covenant. This Equity Contribution will be added to the EBITDA realized by the Borrower for such fiscal quarter. The Equity Contribution will result in a permanent reduction in the amount available to the Borrower equal to the amount of the Equity Contribution. The Borrower Consolidation is required to maintain the Make-Well Adjusted Quarterly EBITDA: Fiscal Quarter Ended Minimum Make-Well Adjusted Quarterly EBITDA for such Quarter -------------------- --------------------------- March 31, 2008 N/A June 30, 2008 $1,410,000 Sept. 30, 2008 $1,130,000 Dec. 31, 2008 $753,000 March 31, 2009 $899,000 June 30, 2009 $902,000 Sept. 30, 2009 $1,425,000 Dec.31, 2009 Maturity The amendment was entered among WMCK Venture Corp., Century Casinos Cripple Creek, Inc., WMCK Acquisition Corp. , Century Casinos Inc. and Wells Fargo Bank, National Association, as agent. The TFCC Ratio is defined as: -- EBITDA, minus Distributions, minus Non-Financed Capital Expenditures incurred during the period under review divided by -- Interest Expense actually paid (excluding Subordinated Debt), plus current portion of Scheduled Reductions actually paid where required during the preceding four quarters to bring the Aggregate Outstandings down to the required Maximum Scheduled Balance and Capitalized Lease Liabilities required during the preceding four quarters, plus actual Interest Expense and principal paid (without duplication) on Subordinated Debt. About Century Casinos Inc. Headquartered in Colorado Springs, Colorado, Century Casinos Inc. (Nasdaq: CNTY) -- http://www.centurycasinos.com/-- is an international casino entertainment company that owns and operates the Womacks Casino and Hotel in Cripple Creek, Colorado, the Century Casino & Hotel in Central City, Colorado, the Century Casino & Hotel in Edmonton, Alberta, Canada, and the Century Casino Millennium in the Marriott Hotel in Prague, Czech Republic. The company also operates casinos aboard the Silver Cloud, The World of ResidenSea, and the vessels of Oceania Cruises. Through its subsidiary Century Casinos Africa (Pty) Limited, it owns and operates The Caledon Hotel, Spa & Casino near Cape Town, South Africa, as well as 60% of, and provides technical casino services to, Century Casino Newcastle, in Newcastle, South Africa. Furthermore, the company's Austrian subsidiary, Century Casinos Europe GmbH, holds a 33.3% ownership interest in Casinos Poland Ltd, the owner and operator of seven full casinos and one slot casino in Poland. CHECKSMART FINANCIAL: Moody's Reviewing Caa2 Rating for Downgrade ----------------------------------------------------------------- Moody's Investors Service placed the ratings of Checksmart Financial Company under review for possible downgrade. The rating action reflects recent legislative action in the Ohio state legislature related to the payday lending industry. If enacted into law, the proposed legislation would have a material negative effect on Checksmart's business. The proposed legislation would substantially alter the payday lending business in Ohio by capping the annual interest rate, lowering the maximum amount of a loan, extending the minimum life of a loan, capping the number of loans a consumer could obtain per year, and mandating that consumers who take more than three payday loans in a period of 90 days attend a financial literacy program. CheckSmart, in addition to other member companies of the Community Financial Services Association, is actively working to defeat the progress of the legislation. 100 of Checksmart's 256 stores are located in the state of Ohio, the company's home state. Therefore, as noted, if enacted the legislation would have a material negative effect on Checksmart's revenues, earnings, cash flow, and financial condition. During the review period Moody's will review the prospects for passage of the proposed legislation, in either its current or modified form, and the potential effects on the company's financial condition and debt service capability. Based in Dublin, Ohio, Checksmart is a provider of payday lending loans and offers check cashing services and other financial products. The company operates 256 stores in eleven states. These ratings were placed on review for possible downgrade: -- Corporate Family Rating -- B3 -- Senior Secured First Lien Revolving Credit Facility -- B3 -- Senior Secured First Lien Term Loan -- B3 -- Senior Secured Second Lien Term Loan -- Caa2 CHRYSLER LLC: Issues Gas Price Policy to Ease Customer Concerns --------------------------------------------------------------- In response to direct customer feedback citing the prospect of rising gas prices as a top concern, Chrysler LLC disclosed its own economic stimulus package: an exclusive gas price protection policy that eliminates the risk of further spikes in fuel prices. With the U.S. purchase of eligible Chrysler, Jeep and Dodge vehicles, customers can enroll in the "Let's Refuel America" program and receive a gas card that immediately lowers their gas price to $2.99 a gallon, and keeps it there for three years. The offer is available at 3,511 U.S. Chrysler, Jeep and Dodge dealerships through June 2, 2008, and is available on vehicles ranging from popular new compacts, crossovers and minivans to full-size diesel-powered pickup trucks. "We are proud to introduce an unprecedented program to help put customers' minds at ease and do something to help working people who are worried about the volatility of fuel prices and vehicle cost of ownership," Jim Press, Vice-Chairman and President, Chrysler LLC, said. "The Let's Refuel America Price Guarantee puts money in your pocket today, and allows our customers to better manage their fuel expenses. And you can't get it anywhere else besides a Chrysler, Jeep or Dodge dealership." The Let's Refuel America program offers consumers a combination of the fuel price protection program and additional bonus cash up to $3,000 on available vehicles, including Chrysler PT Cruiser, Dodge Charger, Jeep Grand Cherokee, Dodge Dakota and Dodge Ram. Consumer Economic Solutions Chrysler has a number of solutions to help our customers during these tough economic times. "Chrysler is committed to providing the best value, and the least worries, for our customers," Mr. Press said. Chrysler's lineup includes five models for under $20,000 that get 28 miles-per-gallon or better on the highway. To protect consumers from unexpected repair costs in the future, Chrysler models come with the industry's best powertrain warranty, covering the original owner for the life of the vehicle. And Chrysler has made a number of its most popular options standard on its New Day Package vehicles. Fuel Economy Solutions Chrysler currently offers six models that get better than 28 miles-per-gallon on the highway: Chrysler Sebring, Chrysler Sebring Convertible, Dodge Avenger, Jeep Compass, Jeep Patriot and Dodge Caliber. Through April, the six of these models combined have higher sales than in the first four months of 2007. The recently-launched 2009 Dodge Journey comes with an available 173-hp four cylinder engine, helping it achieve best in class fuel economy. The Jeep Grand Cherokee diesel 3.0-liter engine provides a class- leading driving range of approximately 450 miles and gets an estimated fuel economy of 18 miles/city and 23 miles/highway for 4x2 models and 17 miles/city and 22 miles/highway for 4x4 models. Outside of North America where fuel-saving diesel engines are in higher demand, Chrysler offers 17 models with diesel powertrains. This fall, Chrysler will launch in the United States, two new hybrid SUVs, the Dodge Durango Hybrid and Chrysler Aspen Hybrid, boasting a fuel economy improvement of more than 25% overall, and 40% in the city. In 2010, the Dodge Ram Hybrid will reach the market. Chrysler is currently in the midst of a $3 billion powertrain investment offensive to develop new fuel-efficient powertrains and axles for our next-generation models. Chrysler supports the federal government's new dramatically increased CAFE fuel economy standards, which will increase fuel efficiency by an average of 40% by 2020. Recently, Chrysler joined the US Climate Action Partnership, working to find solutions to global greenhouse gas emissions. Customer Advisory Board In February, Chrysler created the industry's first Customer Advisory Board to encourage a direct dialogue with customers and gather insight and feedback. A recent Advisory Board survey generated these results: -- 76% of the community is "very concerned" or "extremely concerned" about fuel prices. -- 83% of the community responded that fuel prices will affect their summer vacation plans. Program Description The Let's Refuel America gas card program works when a customer purchases a new and unused Chrysler, Jeep or Dodge vehicle and selects the program in lieu of other available incentives. The customer is provided with the registration process documentation and registers providing their required personal information via the dedicated web site or toll-free 800 number. Once registered, the customer receives their gas card and separately, their Personal Identification Number within 4 to 6 weeks of application. The customer then swipes their Let's Refuel America Gas Card at an eligible gas station, selecting up to 87 octane regular, E85 fuel or diesel fuel, and enters their PIN to begin the fueling process. After the fuel transaction occurs, the customer's personal credit card is charged $2.99 per gallon. Let's Refuel America Eligibility These vehicles are eligible for the Let's Refuel America program: 1) Small/Compact Car * Dodge Caliber, Chrysler PT Cruiser, Chrysler PT Cruiser Convertible 2) Mid-size Car * Dodge Avenger, Chrysler Sebring, Chrysler Sebring Convertible 3) Large Car * Dodge Charger, Chrysler 300, Dodge Magnum 4) Crossover * Dodge Journey 5) Minivan * Dodge Grand Caravan, Chrysler Town and Country 6) Compact SUV * Jeep Patriot, Jeep Compass 7) Mid-size SUV * Dodge Nitro, Jeep Liberty 8) Large SUV * Jeep Grand Cherokee, Jeep Commander, Dodge Durango, Chrysler Aspen 9) Pickup Truck * Dodge Dakota, Dodge Ram, Dodge Ram HD These vehicles are not eligible for the Let's Refuel America program: All SRT models, Dodge Viper, Dodge Challenger, Dodge Ram Chassis Cab, Chrysler Crossfire, Jeep Wrangler and Dodge Sprinter. Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on May 9, 2008, Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'B' from 'B+', with a Negative Rating Outlook. Fitch has also downgraded the senior secured bank facilities, including senior secured first-lien bank loan to 'BB/RR1' from 'BB+/RR1'; and senior secured second-lien bank loan to 'CCC+/RR6' from 'BB+/RR1'. The recovery rating on the second lien was also downgraded from 'BB+/RR1' to 'CCC+/RR6' based on lower asset value assumptions and associated recoveries in the event of a stress scenario. CONSTELLATION COPPER: Cure Period for C$69MM Debentures Expires --------------------------------------------------------------- Constellation Copper Corporation disclosed that the 30-day cure period in relation to the company's failure to pay C$1,897,500 on its convertible debentures due on March 31, 2008, expired on April 30, 2008. After a prescribed cure period, the non-payment of interests has been considered an event of default requiring the company to accrete the debentures up to their full C$69,000,000 face value or $67,503,000 at the March 31, 2008, exchange rate and classified the entire amount as a current liability. Accretion was charged to operations as interest expense. Headquartered in Lakewood, Colorado, Constellation Copper Corporation (CCU: TSX) -- http://www.constellationcopper.com/-- evaluates and develops mineral properties in the United States and Mexico. The company holds its properties primarily through three of its wholly owned subsidiaries, Lisbon Valley Mining Co. LLC, Minera Terrazas S.A. de C.V. and San Javier del Cobre S.A. de C.V. LVMC operates the Lisbon Valley copper mine, which comprises three main deposits: Sentinel, Centennial and GTO, plus the Cashin satellite deposit, with reserves and resources totalling +50 million tons and grading an average 0.48% copper. Minera Terrazas holds the company's interest in the Terrazas zinc-copper project located in north- central Mexico. The property has a total resource of 90 million tonnes grading 1.37% zinc and 0.32% copper in two adjacent deposits. San Javier del Cobre S.A. de C.V. holds the company's interest in the San Javier copper property located in northwestern Mexico. Constellation Copper Corporation's balance sheet at March 31, 2008, showed total assets of $65.6 million and total liabilities of $105.0 million, resulting in a total shareholders' deficit of $39.4 million. Going Concern As reported in the Troubled Company Reporter on Jan. 15, 2008, the company related that there is significant doubt about the its ability to continue as a going concern. The cash balance of $10.87 million at September 30, has been reduced further to approximately $3.20 million at Dec. 31, 2007, and in order to provide liquidity, the company is pursuing various near term financing alternatives, including bank financing, equity investment, mergers, and sale of certain assets or sale of the entire company. In late November 2007, as a result of a comprehensive management evaluation of Lisbon Valley operations, the company disclosed its decision to cease mining and crushing activities and convert the Lisbon Valley mine to a leach only operation in early 2008. The evaluation included analyses of various mining plans, waste stripping requirements, contract mining arrangements, available mining equipment, projected copper prices and extensive operating cost and cash flow projections. In connection with the evaluation and conversion to a leach only operation, the company recorded an asset impairment of $92.9 million. CONSTELLATION COPPER: March 31 Balance Sheet Upside-Down by $39MM ------------------------------------------