T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 21, 2008, Vol. 12, No. 120 Headlines ALOHA AIRLINES: GMAC Agrees to Pay Cargo Workers' Salaries AMERICAN HOME: In Dispute with CDA, M&T Bank Over Chandler Loan AMPEX CORP: March 31 Balance Sheet Upside-Down by $109.5 Million ASARCO LLC: Wants to Extend Action Removal Deadline to October 10 ASARCO LLC: Gets Court Nod to Borrow $5 Million from JPMorgan ASARCO LLC: Seeks to Disallow $89MM in American Limestone Claims ATA AIRLINES: Gets Final OK to Use Lenders' Cash Collateral ATA AIRLINES: Panel Wants Ottenbourg Steindler as Lead Counsel ATA AIRLINES: Panel Taps FTI Consulting as Financial Advisors ATA AIRLINES: Hires Pyramid to Handle Auction of Personal Assets ATLANTIC EXPRESS: March 31 Balance Sheet Upside-Down by $52.8 Mil. AMERICAN ACHIEVEMENT: S&P Puts B Corporate Credit Rating on Watch AMERICAN AXLE: S&P Ratings Still on CreditWatch Pending Union Vote BAG'N BAGGAGE: Wants to Hire Cox Smith as Attorney BASELINE OIL: S&P Affirms CCC+ Corporate Credit Rating BCE INC: Banks Propose Tougher Terms for $33 Billion Buyout BCE INC: Satisfies CRTC Conditions on Disposal to Investor Group BEACH HOUSE: Files Disclosure Statement and Chapter 11 Plan BERKSHIRE INCOME: March 31 Balance Sheet Upside-down by $7 Million BHM TECHNOLOGIES: Files for Chapter 11 Protection; Seeks Financing BHM TECHNOLOGIES: Case Summary & 50 Largest Unsecured Creditors BRANTLEY CAPITAL: Cash Distribution in Liquidation Plan Okayed CARGO CONNECTION: Assets Foreclosed on YA Global Loan Default CASTLE REALTY: Case Summary & 20 Largest Unsecured Creditors CEDAR MANAGEMENT: Case Summary & 18 Largest Unsecured Creditors CENTERPLATE INC: Obtains Amendment to Senior Credit Facility CHRYSLER LLC: Aims to Reduce Supplier Cost, Not Profits CLAIRE'S STORES: Uses PIK Toggles Option to Pay Interest in Bonds COMPOSITE TECH: Posts $11.4 Mil. Net Loss in Qtr. Ended March 31 CONTINENTAL AIRLINES: Moody's Affirms B2 Corporate Family Rating CREDIT SUISSE: S&P Affirms BB+ Rating on Class CSP-K Certificates DELTA AIR: S&P Comments on the Effect of Northwest Merger DESTINATOR TECHNOLOGIES: Chapter 15 Petition Summary DOMINION HOMES: Posts $21.7 Million Net Loss in 2008 First Quarter DORADO BECKVILLE: Cox Smith Approved as Affiliate's Counsel DORADO BECKVILLE: Seeks Court OK on Gardere Wynne as Counsel DORADO BECKVILLE: Files Schedules of Assets and Liabilities DUNMORE HOMES: Disclosure Statement Hearing Adjourned to June 10 DUNMORE HOMES: Sidney Dunmore Seeks Protective Order DECRANE AIRCRAFT: Moody's Reviewing Caa1 Rating on $150MM Loan ENERSYS: Moody's Puts B2 Rating on Proposed Sr. Convertible Notes EOS AIRLINES: Court Approves Kurztman Carson as Claims Agent EPICEPT CORP: To Hold Annual Stockholders' Meeting on May 21 EQUISTAR CHEMICALS: March 31 Balance Sheet Upside-Down by $9.8BB IRIDIUM LLC: Motorola Will Pay Nothing, Judge Rules ETELOS INC: March 31 Balance Sheet Upside-Down by $6,645,000 FINANCIALCONTENT INC: Settles Jade Dispute to Avoid Bankruptcy FORD MOTOR: Plans to Cut Truck Production in Michigan & Louisville FOREST OIL: Moody's Rates $250MM Sr. Notes B1, Outlook Positive FOREST OIL: S&P Lowers Senior Unsecured Notes Rating to B+ GAINEY CORP: S&P Cuts Long-Term Corporate Credit Rating to CC GENERAL DATACOMM: March 31 Balance Sheet Upside-Down by $30.6 Mil. GENERAL MOTORS: S&P Ratings Still on CreditWatch Pending UAW Vote GMAC COMMERCIAL: S&P Cuts Rating on Class N Certificates at D GMAC LLC: Agrees to Pay Salaries of Aloha Air's Cargo Employees GO FIG: Judge Rendlen Converts Case to Chapter 7 Liquidation HERBST GAMING: S&P Cuts Corporate Credit Rating to D HOLMES BIOPHARMA: Capital Deficiency Disrupts Neb. Operation HOME INTERIORS: Names Robin Crossman as New CEO HOVNANIAN ENTERPRISES: Fitch Holds Junk Rating on Preferred Stock HOVNANIAN ENTERPRISES: S&P Junks Rating on $1.5BB Sr. Unsec. Notes IDLEAIRE TECH: Had Set Up Acquisition Firm; May Have Named Buyers INVERNESS MEDICAL: S&P Puts CCC+ Rating on $780MM Series B Stock JETBLUE AIRWAYS: Moody's Junks Corporate Family Rating to Caa1 JEVIC TRANSPORTATION: Files for Bankruptcy Due to Economic Slump JEVIC TRANSPORTATION: Case Summary & 20 Largest Unsec. Creditors KANSAS CITY SOUTHERN: Moody's Raises Corporate Family Rating to B1 KB HOME: S&P Cuts Corp. Credit & Senior Note Ratings to BB KENNETH GOOD: Gets Court Ok to Hire Wright Ginsberg as Counsel KENNETH GOOD: Files Schedules of Assets and Liabilities KIMBALL HILL: Gets Court Nod to Use Lenders' Cash Collateral KIMBALL HILL: Can Employ Kirkland & Ellis as Bankruptcy Counsel KIMBALL HILL: Wants Action Removal Period Stretched to October 20 LAUREATE EDUCATION: S&P Puts CCC+ Rating on $310 Million Sr. Notes LEAR CORP: S&P Ratings Still on CreditWatch Pending Union Vote LEVITT AND SONS: Receiver Helps Homebuyers Recoup Lost Deposits LEXINGTON PRECISION: Taps W.Y. Campbell as Financial Advisor LID LTD: Sells Assets to Bidz.com et al. For $32,850,000 LIBERTY MUTUAL: S&P Rates $1.25 Billion Series C Jr. Notes BB+ LINENS N THINGS: Court Approves Auction Procedures for 120 Stores LINENS N THINGS: Wants To Employ Protiviti as Advisors LINENS N THINGS: Wants to Employ Asset Disposition Advisors LINENS N THINGS: Wants to Hire Financo as Investment Banker MACKLOWE PROPERTIES: Investor Group to Buy GM Building for $3.6BB MANITOWOC CO: Enodis PLC Accepts $2.1 Billion Takeover Bid MANITOWOC CO: Moody's Affirms Low-B Ratings; Outlook Stable MERRILL LYNCH TRUST: S&P Assigns Low-B Ratings on Certificates MERITAGE HOMES: Headed Towards Bankruptcy, Wall Street Paper Says METALS USA: S&P Puts B- Corporate Credit Rating on CreditWatch MOHEGAN TRIBAL: Moody's Lowers Corporate Family Rating to Ba2 MORTGAGE LENDERS: Seeks Aug. 6 Extension of Plan-Filing Period MORTGAGE LENDERS: To Sell Loan Origination Management Software MORTGAGE LENDERS: Confirms No Stake in Assets for Foreclosure MOVIE GALLERY: Emerges From Chapter 11 Protection MOVIE GALLERY: Has Court Nod to Assume 3,055 Real Property Leases MOVIE GALLERY: Wants to Assume Inventec License Agreement MOVIE GALLERY: Wants to Sell MovieBeam Assets to Dar Capital M. VANINI: Section 341(a) Meeting Scheduled for Thursday M. VANINI: May Hire Kluger Peretz as Bankruptcy Counsel M. VANINI: Delivers Schedules of Assets and Liabilities M. VANINI: Owes $6,900,000 to VirtualBank in Florida MXENERGY HOLDINGS: S&P Affirms B Corporate Credit Rating NEXCEN BRANDS: Delays 1Q 2008 10-Q & Expects to Amend 2007 10-K NORCROSS SAFETY: S&P Withdraws B+ Corporate Credit Ratings NORTHWEST AIRLINES: S&P Comments on Effect of Delta Merger NOVASTAR MORTGAGE: S&P Junks Ratings on Five Classes of Certs. OFI INCOME: Affirms Covenant Violations Possible in Future Periods PLASTECH ENGINEERED: Wants to Auction Off Business & Other Assets PLASTECH ENGINEERED: Epic Wants Adequate Protection for Equipment PLASTECH ENGINEERED: Wants Claims Bar Date Fixed at June 30 PLASTECH ENGINEERED: Court Sets Admin. Claims Bar Date to May 30 PROPEX INC: Can Reject Chattanooga Office Leases with Raines Group PROPEX INC: Court Extends Lease Decision Period Until August 15 R&B CONSTRUCTION: Wants to File Chapter 11 Plan Until October 1 RESTRUCTURED ASSET: S&P Junks Rating on $87.5 Million Certificates SABINE PASS: Moody's Cuts Sr. Secured Notes Rating to B2 SCO GROUP: Wants Plan-Filing Exclusivity Date Extended SHARPER IMAGE: Seeks Authority to Hire KPMG as Tax Consultant SHARPER IMAGE: Allowed to Employ Conway Del Genio as Manager SHARPER IMAGE: Can Retain Loughlin Meghji as Financial Advisor SHARPER IMAGE: To Delay Filing of 2007 Annual Report SHINDARA TAN: Case Summary & Eight Largest Unsecured Creditors SMURFIT-STONE: Moody's Affirms Corporate Family Rating at B2 STEAKHOUSE PARTNERS: Sells Restaurants in Order to Pay Creditors SUNNY DELIGHT: S&P Withdraws B- Rating TARRAGON CORP: Candidate for Bankruptcy, Traders Newsletter Says TENNECO INC: S&P Ratings Still on CreditWatch Pending Union Vote TOUSA INC: To Receive $240 Million Income Taxes Refund TOUSA INC: Falcone Group Eyes Possible Acquisition UNITED RENTALS: Fitch Affirms B Rating on Unit's Subordinated Debt UTSTARCOM INC: Earns $25.4 Million in 2008 First Quarter VESTA INSURANCE: J. Gaines Settle with Texas Receivership Entities VESTA INSURANCE: J. Gains Plan Trustee Seeks to Transfer Claims VESTA INSURANCE: Court Allows XL Specialty to Pay Defense Expenses WATERFORD GAMING: Moody's Cuts Corporate Family Rating to B1 WCI COMMUNITIES: Candidate for Bankruptcy, Traders Newsletter Says WCI STEEL: Bought by OAO Severstal for $140 Million WHX CORP: March 31 Balance Sheet Upside-Down by $74.9 Million * S&P Says Lack of Savings Will Make it Tough for Old Americans * Upcoming Meetings, Conferences and Seminars ********* ALOHA AIRLINES: GMAC Agrees to Pay Cargo Workers' Salaries ---------------------------------------------------------- GMAC LLC, secured lender for Aloha Airlines Inc. and its debtor- affiliates, will pay the salaries of the Debtors' cargo division employees, CNNMoney.com reported. The payment will cover the workers' salaries for services done within the last two weeks of April. GMAC said that it will cover employee wages for that period, but added the employees will have to wait for their back pay, CNNMoney.com related. The Debtors converted their bankruptcy case to Chapter 7 liquidation proceedings after those two weeks. According to GMAC, funds for the back pay will be drawn from the proceeds of the Debtors' sale of its cargo business to Saltchuk Resources Inc. There is still uncertainty as to whether GMAC will cover the employees' other benefits, CNNMoney.com said. GMAC is willing to pay the cargo workers despite it not being legally obligated, according to CNNMoney.com. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. Cerberus Capital Management LP bought 51% GMAC LLC stake from General Motors Corp. on December 2006. * * * As reported in the Troubled Company Reporter on May 8, 2008, Fitch Ratings downgraded the long-term Issuer Default Rating of GMAC LLC and related subsidiaries to 'BB-' from 'BB'. Fitch has also downgraded GMAC's unsecured long-term ratings to 'B+' from 'BB-', reflecting the potential for reduced recovery in a default scenario should the company encumber assets. Additionally, Fitch has affirmed the 'B' short-term ratings. The Rating Outlook remains Negative. As reported in the Troubled Company Reporter on April 25, 2008, Moody's Investors Service downgraded GMAC LLC's senior rating to B2 from B1; the rating remains on review for further possible downgrade. This action follows Moody's rating downgrade of ResCap LLC, GMAC's wholly owned residential mortgage unit, to Caa1 from B2. 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. AMERICAN HOME: In Dispute with CDA, M&T Bank Over Chandler Loan --------------------------------------------------------------- The Community Development Administration, a governmental unit of the U.S. Department of Housing and Community Development, and American Home Mortgage Investment Corp. and its debtor-affiliates entered into a mortgage purchase agreement that allows the Debtors to originate loans for the Maryland Mortgage Program. Brett D. Fallon, Esq., at Morris James LLP, in Wilmington, Delaware, relates that pursuant to the MPA, the Debtors are required to deliver to CDA any mortgage loans free and clear of all liens and encumbrances. CDA purchased 292 mortgage loans from the Debtors. On September 26, 2007, M&T Bank, acting as trustee for the CDA, sent a wire transfer for $400,325 to the Debtors' bank account as purchase price of a loan the Debtors previously made to Shawn Chandler and Lisa Estes. Because proceeds from any sale and certain other funds are frozen due to the Final Cash Collateral Order, the Debtors have not paid the Sale Proceeds to the Debtors' warehouse lenders. Natixis Real Estate Capital Inc., a warehouse lender to the Debtors, has alleged that it holds a lien against the Chandler Loan and has received no payment from the Debtors in connection with the Chandler Loan. As the Debtors were parties to a credit facility with Bank of America, it also asserted it has a lien on all of the prepetition funds in the Bank Account. Mr. Fallon relates that the CDA sent a letter dated October 29, 2007, asking the Debtors to file a motion to approve the sale of the Loans by the Debtors to CDA or immediately return the funds that were transferred into the Bank Account back to M&T Bank. As of May 8, 2008, the Debtors have failed to either file the requested motion or return the funds and Natixis continues to claim that it holds a lien on the Chandler Loan, whereas it is the CDA's position, pursuant to the MPA, it is the owner of the Chandler Loan free and clear of all liens, Mr. Fallon says. Accordingly, CDA and M&T Bank ask the Court to: (a) declare that the CDA is the owner of the Loans and Notes free and clear of any liens or other encumbrances by any party, other than M&T Bank; (b) declare (1) that the sale proceeds that were wired into the Bank Account to purchase the Loans are being held in a constructive trust for the CDA and M&T Bank, as trustee under the Bond Resolution Trust Indenture, and (2) that the CDA and M&T Bank hold an equitable priority lien against the Sale Proceeds; (c) direct the Debtors to making payments to Natixis or Bank of America to terminate any liens and encumbrances that may exist against the Loans and the Notes and require the Debtors to repurchase the Loans from CDA and M&T Bank in the event the Court finds that either the Chandler Loan or the Estes Loan are encumbered by a lien in favor of Natixis, BofA or any third party; (d) declare that the Debtors were unjustly enriched by the retention of the Sale Proceeds in the Bank Account; (e) allow an administrative priority claim against the Debtors in the amount of the Sale Proceeds; (f) award compensatory damages to the CDA and M&T Bank, including before and after judgment interest; and (g) pay CDA's attorney's fees and expenses against the Debtors retained in the adversary proceeding. About American Home Based in Melville, New York, American Home Mortgage Investment Corp. (NYSE: AHM) -- http://www.americanhm.com/-- is a mortgage real estate investment trust engaged in the business of investing in mortgage-backed securities and mortgage loans resulting from the securitization of residential mortgage loans originated and serviced by its subsidiaries. American Home Mortgage and seven affiliates filed for chapter 11 protection on Aug. 6, 2007 (Bankr. D. Del. Case Nos. 07-11047 through 07-11054). James L. Patton, Jr., Esq., Joel A. Waite, Esq., and Pauline K. Morgan, Esq. at Young, Conaway, Stargatt & Taylor LLP represent the Debtors. Epiq Bankruptcy Solutions LLC acts as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors selected Hahn & Hessen LLP as its counsel. As of March 31, 2007, American Home Mortgage's balance sheet showed total assets of $20,553,935,000, total liabilities of $19,330,191,000. The U.S. Bankruptcy Court for the District of Delaware extended the exclusive periods for American Home Mortgage Investors Corp. and its debtor-affiliates to file a plan of reorganization through June 2, 2008; and solicit and obtain acceptances for that plan through July 31, 2008. (American Home Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AMPEX CORP: March 31 Balance Sheet Upside-Down by $109.5 Million ---------------------------------------------------------------- Ampex Corp.'s consolidated balance sheet at March 31, 2008, showed $22.8 million in total assets and $132.3 million in total liabilities, resulting in a $109.5 million total stockholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $22.0 million in total current assets available to pay $67.1 million in total current liabilities. The company reported a net loss of $3.8 million, on total revenue of $7.0 million, for the first quarter ended March 31, 2008, compared with net income of $2.5 million, on total revenue of $12.4 million, in the corresponding period last year. Licensing revenue in the three months ended March 31, 2008, totaled $2.5 million and in the three months ended March 31, 2007, totaled $4.7 million, of which $1.9 million related to negotiated settlements covering a prepayment of royalty obligations through 2011. Product revenue generated by the company's Recorders segment decreased to $3.0 million in the three months ended March 31, 2008, from $5.9 million in the three months ended March 31, 2007. Total service revenue generated by the Recorders segment in the three months ended March 31, 2008, was $1.5 million compared to $1.8 million for the three months ended March 31, 2007. As of May 15, 2008, the company has incurred legal costs of $1.8 million in connection with the restructuring of its liabilities, of which $1.2 million was incurred during the three months ended March 31, 2008. The company expects to incur significant additional reorganization costs during the remainder of 2008 while the company is in chapter 11 which will be funded in part by additional financing supplied by Hillside Capital Inc. upon emergence. The company reported an operating loss of $2.4 million in the three months ended March 31, 2008, compared to an operating income of $3.4 million for the three months ended March 31, 2007. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2c2d About Ampex Corp. Headquartered in Redwood City, Calif., Ampex Corp. -- http://www.ampex.com/-- is a licensor of visual information technology. The company has two business segments: Recorders segment and Licensing segment. 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. ASARCO LLC: Wants to Extend Action Removal Deadline to October 10 ----------------------------------------------------------------- ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Texas to further extend the deadline within which they may remove pending civil actions, through and including Oct. 10, 2008. The Debtors say they need additional time to review their myriad of lawsuits in various state and federal courts, many of which are complex and may require individual analysis on each case, in order for them to determine whether those lawsuits should be removed. The Debtors add that an extension of the deadline would aid in the economical administration of their estates. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Gets Court Nod to Borrow $5 Million from JPMorgan ------------------------------------------------------------- ASARCO LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the Southern District of Texas to enter into a $5,000,000 letter of credit facility with JPMorgan Chase Bank, N.A., and pay a $15,000 up-front deposit to JPMorgan for due diligence and documentation fees and expenses. As reported in the Troubled Company Reporter on Apr. 16, 2008, the salient terms of the JPMorgan Credit Facility are, among others: Credit Facility: $5,000,000 twelve-month credit facility for the issuance of letters of credit Closing Date: On or before May 15, 2008 Collateral: Each letter of credit issued under the Credit Facility and all fees and associated expenses and all interests on any unreimbursed draws will be secured by cash collateral, to be provided in advance of the issuance, in the amount of 110% of the face amount of the Letter of Credit Deposit: A $15,000 deposit will be used to cover JPMorgan's reasonable, documented out-of- pocket expenses, including reasonable fees, time charges and expenses of its attorneys, due diligence expenses, syndication expenses, if any, consultants' fees and expenses, if any, and travel expenses. Additional deposits may be required. If the Credit Facility is not consummated for whatever reason, the unused portion of the deposit will be returned to ASARCO. Default Rate: After default, the Letter of Credit Fee will be increased by 2% per annum. In December 2005, the Court authorized ASARCO to signed a $75,000,000 DIP loan facility with The CIT Group/Business Credit. The CIT DIP Facility, which included a letter of credit sub- facility for ASARCO's ongoing business needs, expired on its own terms on Dec. 15, 2007. In light of ASARCO's cash reserves, the CIT DIP Facility was not renewed, the Debtors said. In this light, the CIT DIP Facility must be replaced by a new stand-alone letter of credit facility, ASARCO asserted. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Seeks to Disallow $89MM in American Limestone Claims ---------------------------------------------------------------- ASARCO LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to disallow Claim Nos. 18220, 18224 and 18225 filed by Rinker Materials South Central, Inc., seeking an aggregate of $89,856,298, for breaches under a contract with American Limestone Company. Shelby A. Jordan, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., in Corpus Christi, Texas, asserts that Contract names ASARCO and American Limestone Company as parties and includes strict no-assignment clauses. Rinker was unable to prove that it is the assignee of the contract, Mr. Jordan says. Rinker asserted that ASARCO breached the contract during the force majeure period when ASARCO rejected the contract. Mr. Jordan explains that on the date of bankruptcy, the Tennessee Mines Division, which produced the ore products subject to the contract, was shut down and ASARCO was in the midst of a four- month-long labor strike. He says that under the force majeure clause in the contract, ASARCO had no responsibilities to American Limestone thus ASARCO is not liable to Rinker for breach of contract. He adds that Rinker did not suffer any damages as a result of the rejection of the contract. The Official Committee of Unsecured Creditors of the Asbestos Subsidiary Debtors and the Official Committee of Unsecured Creditors of ASARCO join in ASARCO's objection. Ready Mix Opposes Claims Objection Ready Mix USA, LLC, asks the Court to overrule ASARCO's objections to Claim Nos. 18220, 18224 and 18225. Ready Mix is the transferee of the Claims after having purchased certain assets from Rinker, including Rinker's pending claims against ASARCO. Arthur J. Spector, Esq., at Berger Singerman, P.A., in Fort Lauderdale, Florida, argues that ASARCO's rejection of the contract resulted in damages to Ready Mix. It is the contract rejection that is the event of the breach, and damages naturally flow thereafter, he maintains. Contrary to ASARCO's argument that Rinker did not mitigate its damages, Mr. Spector says Rinker did mitigate its damages by investing about $3,000,000 in the Midway Quarry and Forks of the River Quarry to cover the production shortfalls caused by the Tennessee Mines Division. About ASARCO Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor affiliates are scheduled to file a plan of reorganization on June 10, 2008. (ASARCO Bankruptcy News, Issue No. 72; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATA AIRLINES: Gets Final OK to Use Lenders' Cash Collateral ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Indiana approved, on a final basis, the request of ATA Airlines, Inc., to use secured lenders' cash collateral from the Petition Date to September 30, 2008. ATA Airlines intends to use the cash collateral for the payment of the costs and expenses associated with the wind-down operations of its business, the orderly liquidation of its assets, and the conduct of its Chapter 11 case as provided in its four-week budget for the period April 26 to May 23, 2008. No later than 10 days before the last day covered by the budget then in effect, ATA Airlines will deliver to the secured lenders, JPMorgan Chase Bank, N.A., and the Official Committee of Unsecured Creditors a proposed budget covering the subsequent four-week period. As adequate protection, ATA Airlines will grant the secured lenders and JPMorgan, valid and perfected, replacement security interests in and liens on all of its prepetition and postpetition assets, excluding: (1) the deposit accounts used exclusively for paying union dues, payroll, payroll taxes, and other employee wage and benefits; (2) tax payments that are held in trust accounts maintained by M&I Bank in the name of ATA Airlines; and (3) equipment, excluding those that constitute prepetition collateral, and the proceeds of any insurance for the equipment; and (4) causes of action arising under Chapter 5 of the Bankruptcy Code against non-affiliates of ATA Airlines, and its proceeds. As further adequate protection, ATA Airlines will also provide the secured lenders, JP Morgan and the Creditors Committee (i) a 13-week rolling cash flow projection, and (ii) a comparison between the actual cash flows for the week immediately preceding the week when the comparison is being delivered, and the projected cash flows for that week. The Creditors Committee previously objected to the proposed final order submitted by ATA Airlines, saying it would permit the secured lenders to obtain liens on ATA Airlines' postpetition assets which were not subject to their prepetition liens, and which might otherwise constitute the sole source for distribution to unsecured creditors. The postpetition assets include: (1) causes of action arising under Chapter 5 of the Bankruptcy Code; (2) the cause of action that ATA Airlines has asserted against FedEx Corporation, which the airlines believes may be one of the most valuable estate assets as well as other causes of action that are not part of the prepetition collateral; (3) the return by third parties to ATA Airlines of about $2,800,000 in cash deposits or prepaids; (4) the return by third parties to ATA Airlines of about $4,100,000, which they hold as cash collateral for letters of credit; and (5) ATA Airlines' Operating Certificate that may have significant value. The Creditors Committee also argued that the proposed final order would compel ATA Airlines to use cash that is not subject to the secured lenders' lien to pay the expenses provided in the cash collateral budget. The panel was concerned that the unencumbered funds that would be available for general unsecured creditors would be used to fund the expenses of the secured lenders' liquidation. As part of the resolution of the objection filed by the Creditors Committee, the Court ruled that the secured lenders will not have any unsecured deficiency claim as to the first proceeds of those causes of action against the non-affiliates of ATA Airlines up to the lesser of (i) $7,500,000 and (ii) 10% of all allowed prepetition unsecured claims other than the deficiency claim. All other objections have been withdrawn or resolved. A full-text copy of the Cash Collateral Order is available for free at http://bankrupt.com/misc/ATAFinalCashCollateralOrder About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. (ATA Airlines Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ATA AIRLINES: Panel Wants Ottenbourg Steindler as Lead Counsel -------------------------------------------------------------- The Official Committee of Unsecured Creditors seeks the authority of the U.S. Bankruptcy Court for the Southern District of Indiana to retain Otterbourg, Steindler, Houston & Rosen, P.C., as its counsel effective as of April 21, 2008. The Committee believes that OSH&R is qualified to serve as its counsel with its extensive experience in, and knowledge of, business reorganizations, including liquidations and sales of businesses under Chapter 11. As lead counsel to the Committee, OSH&R is expected to: * assist and advise the Committee in its consultation with the Debtor relative to the Chapter 11 cases; * attend meetings and negotiate with the representatives of the Debtors and other parties-in-interest; * assist and advise the Committee in its examination and analysis of the conduct of the Debtor's affairs; * assist the Committee in the review, analysis and negotiation of any plan of reorganization or liquidation, asset disposition proposals and disclosure statement accompanying any plan that may be filed; * assist the Committee in the review and analysis of any financing agreements; * take necessary and appropriate action to protect and preserve the interests of the Committee, including: -- possible prosecution of actions on its behalf; -- negotiations in litigation in which the Debtor is, or may be, involved; and -- review and analysis of claims filed against the Debtor; * prepare on behalf on the Committee all necessary and related documents in support of positions taken by the Committee; * appear before the Bankruptcy Court, the appellate courts and the U.S. Trustee, and to protect the interests of the Committee; and * perform other legal services. OSH&R will be paid based on its hourly rates: Partner or Counsel $530 - $795 Associate $245 - $575 Paralegal $175 - $205 The Committee will also reimburse OSH&R of its actual and necessary expenses incurred in the course of rendering services to the Committee. Scott L. Hazan, Esq., a member at OSH&R, assures the Court that OSH&R does not represent or hold an interest adverse to the Debtor's estate and is a "disinterested person" within the meaning of that term in Section 101(14) of the Bankruptcy Code. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. (ATA Airlines Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ATA AIRLINES: Panel Taps FTI Consulting as Financial Advisors ------------------------------------------------------------- Pursuant to Section 1103 of the Bankruptcy Code and Rule 2014(a) of the Federal Rules of Bankruptcy Procedure, the Official Committee of Unsecured Creditors in the bankruptcy case of ATA Airlines, Inc. and its debtor-affiliates, seeks authority from the U.S. Bankruptcy Court for the Southern District of Indiana to retain FTI Consulting, Inc., as its financial advisor, nunc pro tunc to the Debtors' bankruptcy filing. The Committee asserts that the services of FTI are deemed necessary to assess and monitor the efforts of the Debtors and their professional advisors to maximize the value of their estates. As financial advisor, FTI will provide consulting and advisory services to the Committee with respect to the Debtor's Chapter 11 case, including assistance in the review, evaluation and analysis of: * financial disclosures required by the Court, which include schedules of assets and liabilities, statements of financial affairs and monthly operating reports; * the Debtor's short-term cash management procedures; * financial information distributed by the Debtor to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement, asset and liability accounts and proposed related transactions; * avoidance actions, including fraudulent conveyances and preferential transfers; and * accounting and tax matters, along with expert witness testimony on case-related issues, as required by the Committee. FTI is also expected to attend meetings and assist in discussions with the Debtor, potential investors, banks, other secured lenders, the Committee and other official committees, the U.S. Trustee and other parties-in-interest and professionals. FTI will be paid based on its hourly rates: Senior Managing Directors $650 - $715 Directors/Managing Directors $475 - $620 Associates/Consultants $235 - $440 Administration/Paraprofessionals $100 - $190 FTI's senior managing director, Michael Eisenband, discloses that his firm is not a creditor of the Debtor and does not hold outstanding debt shares of the Debtor's stock. According to Mr. Eisenband, FTI has neither provided services to other parties which are adverse to the rights of the Committee nor compromised its ability to continue consulting services; hence, his firm is eligible to represent the Committee under Section 1103(b) of the Bankruptcy Code. About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. (ATA Airlines Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ATA AIRLINES: Hires Pyramid to Handle Auction of Personal Assets ---------------------------------------------------------------- ATA Airlines, Inc., seeks permission from the U.S. Bankruptcy Court for the Southern District of Indiana to employ Pyramid Auction Services, Inc., as its auctioneer for the purpose of marketing and auctioning its personal properties. ATA Airlines selected Pyramid Auction because of its extensive experience in analyzing, marketing and liquidating assets. The firm is also familiar with ATA Airlines and its assets since it was previously employed by the airlines to conduct auctions of its property. The airlines is vacating its leased facilities at various airports around the world, and is shipping its personal properties to three centralized locations in Dallas, Chicago and Indianapolis, to facilitate the sale of those properties. If the proposed employment is approved, Pyramid Auction would conduct an auction in Indianapolis and subsequent auctions may be held in the two other locations. In exchange for Pyramid Auction's services, ATA Airlines will pay the firm a 4% commission of the net proceeds of any sale. It will also reimburse the firm a processing fee of 2.88% for any purchase made by credit card, and up to $5,200 per auction for the costs of advertising the auctions. In addition, Pyramid Auction will separately charge buyers a 10% buyer's premium on the gross proceeds of any sale, and will be indemnified for any loss, casualty or liability in connection with its employment. James Pike, president of Pyramid Auction, in Avon, Indianapolis, assures the Court that his firm does not hold or represent any interest adverse to ATA Airlines' estate. He adds that the firm is a disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). About ATA Airlines Headquartered in Indianapolis, Indiana, ATA Airlines, Inc., is a diversified passenger airline operating in two principal business lines -- a low cost carrier providing scheduled passenger service that leverages a code share agreement with Southwest Airlines; and a charter operator that focused primarily on providing charter service to the U.S. government and military. ATA is a wholly owned subsidiary of New ATA Acquisition, Inc. -- a wholly owned subsidiary of New ATA Investment, Inc., which in turn, is a wholly owned subsidiary of Global Aero Logistics Inc. ATA Acquisition also owns another holding company subsidiary, World Air Holdings, Inc., which it acquired through merger on August 14, 2007. World Air Holdings owns and operates two other airlines, North American Airlines and World Airways. ATA Airlines and its affiliates filed for chapter 11 protection on Oct. 26, 2004 (Bankr. S.D. Ind. Case Nos. 04-19866, 04-19868 through 04-19874). The Honorable Basil H. Lorch III confirmed the Debtors' plan of reorganization on Jan. 31, 2006. The Debtors' emerged from bankruptcy on Feb. 28, 2006. Global Aero Logistics acquired certain of ATA's operations after its first bankruptcy. The remaining ATA affiliates that were not substantively consolidated in the company's first bankruptcy case were sold or otherwise liquidated. ATA Airlines filed for Chapter 22 on April 2 (Bankr. S.D. Ind. Case No. 08-03675), citing the unexpected cancellation of a key contract for ATA's military charter business, which made it impossible for ATA to obtain additional capital to sustain its operations or restructure the business. ATA discontinued all operations subsequent to the bankruptcy filing. ATA's Chapter 22 bankruptcy petition lists assets and liabilities each in the range of $100 million to $500 million. The Debtor is represented in its Chapter 22 case by Haynes and Boone, LLP, and Baker & Daniels, LLP, as bankruptcy counsel. The United States Trustee for Region 10 appointed five members to the Official Committee of Unsecured Creditors. (ATA Airlines Bankruptcy News, Issue No. 81; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000). ATLANTIC EXPRESS: March 31 Balance Sheet Upside-Down by $52.8 Mil. ------------------------------------------------------------------ Atlantic Express Transportation Corp.'s consolidated balance sheet at March 31, 2008, showed $194.7 million in total assets and $247.5 million in total liabilities, resulting in a $52.8 million total stockholders' deficit. The company reported a net loss of $10.0 million for the third quarter ended March 31, 2008, compared with a net loss of $713,897 in the same period in 2007. Revenues from school bus operations were $110.9 million for the three months ended March 31, 2008, compared to $111.3 million for the three months ended March 31, 2007, a decrease of $400,000, or 0.4%. Revenues from paratransit and transit operations were $11.1 million for the three months ended March 31, 2008, compared to $11.2 million for the three months ended March 31, 2007, a decrease of 0.2%. Cost of operations of school bus operations was $100.8 million for the three months ended March 31, 2008, compared to $96.8 million for the three months ended March 31, 2007, an increase of $4.0 million or 4.1%. Cost of operations of paratransit and transit operations were $10.1 million for the three months ended March 31, 2008, and 2007, respectively. Operating income from school bus operations was $1.3 million for the three months ended March 31, 2008, compared to $6.1 million for the three months ended March 31, 2007, a decrease of $4.8 million, or 78.1%. Operating loss from paratransit and transit operations was minimal for the three months ended March 31, 2008, compared to a $100,000 operating loss for the three months ended March 31, 2007. Interest expense was $11.3 million for the three months ended March 31, 2008, compared to $6.8 million for the three months ended March 31, 2007, an increase of $4.5 million, or 66.9%. The increase was primarily due to a $4.6 million non-cash change in fair market value of interest rate swap expense, $800,000 increase in interest expense on the $185.0 million aggregate principal amount of Senior Secured Floating Rate Notes due 2012 compared to previous long-term borrowings, offset partially by a $200,000 decrease in senior credit facility interest and a $600,000 decrease in deferred financing expense. Loss before provision for income taxes and discontinued operations was $10.0 million for the three months ended March 31, 2008, compared to a loss of $713,897 for the three months ended March 31, 2007. Liquidity and Capital Resources At March 31, 2008, the company had long-term debt outstanding, net of current portion, of $184.6 million, as compared to $187.6 million at June 30, 2007. At March 31, 2008, the company had a credit balance under its $35.0 million senior credit facility of $3.4 million, and it had $22.3 million of borrowing availability after $9.8 million of reserves, based on the company's borrowing base calculations. Approximately $9.3 million of the company's $10.0 million letter of credit facility was used as of the same date. On May 7, 2008, the company had a credit balance under its senior credit facility of $3.1 million, and it had $17.8 million in borrowing availability after $7.7 million of reserves, based upon the company's borrowing base calculations. The company believes that borrowings under its senior credit facility, retrospective insurance credits received from its insurance company together with its existing cash and cash flow from operations may not be sufficient to fund the company's anticipated liquidity requirements for the next twelve months and the company would have to pursue additional funding alternatives, including the sale of certain assets or operations, in order to improve its liquidity position. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2c2f About Atlantic Express Headquartered in New York City, Atlantic Express Transportation Corp. -- http://www.atlanticexpress.com/-- is a provider of school bus transportation in the United States and the leading provider in New York City. The company has contracts with approximately 104 school districts in New York, Missouri, Massachusetts, California, Pennsylvania, New Jersey, and Illinois. For fiscal 2008, the company has a contract to provide paratransit services in New York to physically and mentally challenged passengers who are unable to use standard public transportation. The company also provides other transportation services, including fixed route transit, express commuter line and charter and tour buses through its coach services. As of March 31, 2008, the company had a fleet of approximately 5,600 vehicles operating from approximately 50 facilities. * * * As reported in the Troubled Company Reporter on May 9, 2008, Standard & Poor's Ratings Services lowered its ratings on Atlantic Express Transportation Corp., including the long-term corporate credit rating to 'CCC' from 'CCC+'. All ratings were removed from CreditWatch, where they had been placed with negative implications on Feb. 19, 2008. The outlook is now negative. At the same time, S&P lowered the rating on the senior secured debt rating to 'CCC', the same as the new corporate credit rating, from 'CCC+'. S&P assigned a '4' recovery rating to this debt, indicating expectations of average (30%-50%) recovery in the event of a payment default. AMERICAN ACHIEVEMENT: S&P Puts B Corporate Credit Rating on Watch ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings for American Achievement Corp., including the 'B' corporate credit rating, on CreditWatch with developing implications. "Developing" indications mean that the ratings may be raised, lowered, or affirmed upon resolution of the CreditWatch placement. "The CreditWatch listing follows the company's announcement on May 16, 2008 that the holders of the equity securities of American Achievement Group Holding Corp., the parent company of American Achievement Corp., have agreed to sell all of their equity interests to privately owned Herff Jones Inc.," explained Standard & Poor's credit analyst Michael Listner. The transaction is subject to regulatory approval and customary closing conditions. American Achievement Group Holding Corp. has received consent from the holders of a majority of the company's 12.75% senior PIK notes due 2012 to redeem the notes at a price of 101%, and to remove substantially all of the restrictive and reporting covenants under the indenture upon consummation of the transaction. The company did not explicitly state its intentions regarding the 10.25% senior discount notes at the intermediate holding level and the 8.25% senior subordinated notes at the operating company levels. Both indentures, however, contain change of control provisions, providing for the redemption of the notes at a price of 101%. If the notes are repaid, we will withdraw our corporate credit rating and all issue ratings for American Achievement. Rating downside potential exists if for some reason the transaction does not move forward. AMERICAN AXLE: S&P Ratings Still on CreditWatch Pending Union Vote ------------------------------------------------------------------ Standard & Poor's Ratings Services said its ratings on General Motors Corp. (GM), American Axle & Manufacturing Holdings Inc. (Axle), Lear Corp., and Tenneco Inc. remain on CreditWatch with negative implications, pending the outcome of a vote on the tentative labor agreement between the United Auto Workers (UAW) and Axle, and its review of the four companies' financial profiles. The ratings on all four companies were placed on CreditWatch negative on March 17, sparked by a work stoppage at many of Axle's UAW-represented plants in New York and Ohio. Axle and the UAW announced the tentative agreement on a new labor contract, but did not disclose details. Local unions were scheduled to vote on the agreement beginning Monday and continuing through this week. If ratified, the new four-year contract will end the strike, which began Feb. 25 and led to reduced production of light trucks by GM over the past few months. According to media reports, under the tentative agreement, the UAW has accepted a lower all-in wage and benefit package competitive with that offered by the UAW at other U.S. auto supplier competitors of Axle. In exchange, Axle is reportedly offering buy- outs of up to $140,000 to reduce headcount and buy-downs of up to $105,000 to ease the transition for remaining UAW workers to the new wage level. (GM previously announced it had agreed to fund $200 million of the amount needed for the wage transition and buyouts.) Axle also reportedly will close two forging plants under the agreement. "We intend to resolve each company's CreditWatch listing within the next two weeks," said Standard & Poor's credit analyst Lawrence Orlowski. "We'll focus on the strike's direct effect on liquidity, as well as the prospective performance of each company for the remainder of 2008 and into 2009. We expect to resolve the CreditWatch listings on Lear and Tenneco first because their first-quarter results indicate that they have been less affected by the strike," he continued. BAG'N BAGGAGE: Wants to Hire Cox Smith as Attorney -------------------------------------------------- Bag'n Baggage Ltd. and 900 Corp. ask the United States Bankruptcy Court for the Northern District of Texas for permission to employ Cox Smith Matthews Incorporated as attorney. Cox Smith will: a) take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any action commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' assets; b) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, and papers in connection with the administration and prosecution of the Debtors' cases; c) assist the Debtors in connection with any proposed sale of assets pursuant to Section 363 of the Bankruptcy Code; d) advise the Debtors in respect of bankruptcy, real estate, regulatory, labor law, intellectual property, licensing, an tax matters or other such services as requested; and e) perform all other legal services in connection with cases. The firm's professionals and their compensation rates are: Professionals Designations Hourly Rates ------------- ------------ ------------ Mark E. Andrews, Esq. Shareholder $475 Carol E. Jendrzey, Esq. Shareholder $375 Lindsey D. Graham, Esq. Associate $235 Allison Seifert Paralegal $135 Mark E. Andrews, Esq., an attorney of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Headquartered in Dallas, Texas, Bag'n Baggage Ltd. -- http://www.bagnbaggage.com/-- sells traveling luggage and carry- on bags. The company and its affiliate, 900 Corp., filed for Chapter 11 protection on May 4, 2008 (Bankr. N.D. Tex. Lead Case No.0832096). The U.S. Trustee for Region 7 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed assets and debts between $10 million and $50 million. BASELINE OIL: S&P Affirms CCC+ Corporate Credit Rating ------------------------------------------------------ Standard & Poor's Ratings Services revised the outlook on oil and gas exploration and production (E&P) company Baseline Oil & Gas Corp. to developing from positive and affirmed its ratings on the company, including the 'CCC+' corporate credit rating. The outlook revision is tied to the company's limited financial flexibility under its revolving line of credit, which is the result of mark-to-market adjustments for hedging obligations. As of March 31, 2008, the company's hedging obligations resulted in availability under the company's $20 million senior secured credit facility of approximately $2 million. After its recent interest payment, Baseline has a current cash and cash equivalents balance of approximately $14 million. "Although its liquidity position has eroded," said Standard & Poor's credit analyst Amy Eddy, "we believe Baseline is likely to enhance its liquidity in the near term either through an amended credit facility or through improved production and operating performance." As of March 31, 2008, Houston-based Baseline had approximately $165 million in total debt. BCE INC: Banks Propose Tougher Terms for $33 Billion Buyout ----------------------------------------------------------- Banks backing the $33 billion buyout of BCE Inc. attempted to renegotiate the financing for the transaction, Peter Lattman of the Wall Street Journal reports. On June 30, 2007, the company agreed to a leveraged buyout by a consortium of private equity investors led by Teachers Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners Inc., Madison Dearborn Partners LLC, and Merrill Lynch Global Private Equity. The buyout group agreed to pay C$42.75 ($42.62) a share for BCE. On Friday, the banks presented a new set of terms to the buyers, who viewed the new offer as an "evidence that the banks don't want to close the deal," people familiar with the situation said, according to the WSJ report. The new terms include higher interest rates, and tighter restrictions. The Quebec Superior Court has approved the plan of arrangement for the privatization. The Quebec Court of Appeal hearing has concluded and the court has indicated that it expects to render a decision expeditiously, the company has said. BCE told shareholders it expects the deal to close by June 30. About BCE Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) -- http://www.bce.ca/-- is a communications company, providing comprehensive and innovative suite of communication services to residential and business customers in Canada. Under the Bell brand, the company's services include local, long distance and wireless phone services, high-speed and wireless Internet access, IP-broadband services, information and communications technology services (or value-added services) and direct-to-home satellite and VDSL television services. Other BCE holdings include Telesat Canada and an interest in CTVglobemedia. Bell Canada -- http://www.bell.ca/-- is a wholly owned subsidiary of BCE Inc. Bell offers integrated information and communications technology services to businesses and governments, and is the Virtual Chief Information Officer to small and medium businesses. * * * As reported in the Troubled Company Reporter on Dec. 14, 2007, Standard & Poor's Ratings Services kept its ratings on BCE Inc. and its related entities on CreditWatch with negative implications, pending the completion of the company's leveraged buyout by a consortium of private equity investors led by Teachers Private Capital as announced on June 30, 2007. As a result of the proposed LBO, S&P expect reported debt to increase to about CDN$37 billion from about CDN$10 billion at Sept. 30, 2007. As reported in the Troubled Company Reporter on Sept. 26, 2007, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on BCE Inc. and wholly owned subsidiary Bell Canada to 'BB-' from 'A-'. BCE INC: Satisfies CRTC Conditions on Disposal to Investor Group ---------------------------------------------------------------- BCE Inc. received written confirmation from the Canadian Radio-television and Telecommunications Commission that the Commission's conditions set forth in its March 27, 2008 decision to approve the proposed acquisition of BCE Inc. by an investor group led by Teachers' Private Capital, the private investment arm of the Ontario Teachers' Pension Plan, Providence Equity Partners Inc., Madison Dearborn Partners, LLC, and Merrill Lynch Global Private Equity, have been fulfilled with two minor exceptions. In its letter of May 16, 2008, the CRTC requested that an amended Principal Investors Agreement be filed with the Commission within 30 days addressing the mechanics of the appointment of an independent member of the board of directors should certain circumstances arise in the future. The CRTC's letter also addresses an outstanding issue concerning the disposition of the balance of the tangible benefits payable by BCE as a result of the transaction, as a result of which BCE will now direct 10 per cent of those benefits to the BCE New Media Trust. BCE expects the transaction to close before the end of the second quarter of 2008. About BCE Headquartered in Montreal, Quebec, BCE Inc. (TSX/NYSE: BCE) -- http://www.bce.ca/-- is a communications company, providing comprehensive and innovative suite of communication services to residential and business customers in Canada. Under the Bell brand, the company's services include local, long distance and wireless phone services, high-speed and wireless Internet access, IP-broadband services, information and communications technology services (or value-added services) and direct-to-home satellite and VDSL television services. Other BCE holdings include Telesat Canada and an interest in CTVglobemedia. Bell Canada -- http://www.bell.ca/-- is a wholly owned subsidiary of BCE Inc. Bell offers integrated information and communications technology services to businesses and governments, and is the Virtual Chief Information Officer to small and medium businesses. * * * As reported in the Troubled Company Reporter on Dec. 14, 2007, Standard & Poor's Ratings Services kept its ratings on BCE Inc. and its related entities on CreditWatch with negative implications, pending the completion of the company's leveraged buyout by a consortium of private equity investors led by Teachers Private Capital as announced on June 30, 2007. As a result of the proposed LBO, S&P expect reported debt to increase to about CDN$37 billion from about CDN$10 billion at Sept. 30, 2007. As reported in the Troubled Company Reporter on Sept. 26, 2007, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on BCE Inc. and wholly owned subsidiary Bell Canada to 'BB-' from 'A-'. BEACH HOUSE: Files Disclosure Statement and Chapter 11 Plan ----------------------------------------------------------- Beach House Property LLC and Winners LLC delivered to the United States Bankruptcy Court for the Southern District of Florida a Joint Disclosure Statement dated May 15, 2008, explaining their Joint Chapter 11 Plan of Reorganization. Plan Overview The proponents' Plan contemplates the liquidation of either Beach House's real property or security interest in Winners. In the event the property and interest remain unsold and allowed claims are still unpaid 90 days after confirmation, the Debtors will hold an absolute auction of the assets. Alvin S. Goldstein, Esq., at Furr and Cohen, P.A., in Boca Raton, Florida, will serve as disbursing agent under the Plan. Indebtedness On Feb. 16, 2006, Beach House closed on a $40,630,000 loan with Marshall/BankFirst, of which the proceeds of the loan went to (i) pay off the existing land loan of $18 million, (ii) create a $3.6 million reserve for interest, and (iii) cover remaining development and site demolition cost. At present, the Debtors have drawn at least $39.5 million from the loan. Treatment of Claims All allowed administrative claims will be paid in full on the plan's effective date. Upon the sale of the property or the interest, creditors are expected to receive the allowed amount of their claim including: -- Marshall BankFirst, totaling $40,630,000; -- Florida Demolition Inc., totaling $182,387; -- Strotech Inc., totaling $311,361; -- Prodigy Int'l Development Sales LLC, totaling $432,796; and -- Gryphon Construction, totaling $100,000. General Unsecured Creditors of the Debtors will be paid their pro rata share from the remaining proceeds of the sale. Holders of Equity Interests will be paid from the remaining proceeds of the sale, if any, after all valid claims are satisfied. A full-text copy of the Joint Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2c31 A full-text copy of the Joint Chapter 11 Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?2c32 About Beach House Headquartered in Surfside, Florida, Beach House Property, L.L.C. owns various real estate properties. The Debtor commenced chapter 11 proceedings Feb. 15, 2008, before the U.S. Bankruptcy Court for the Southern District of Florida in Miami (Case No. 08-11761). Robert C. Furr, Esq., at Furr and Cohen in Boca Raton, Florida, represents the Debtor. The U.S. Trustee for Region 21 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When it filed for bankruptcy, Beach House estimated assets between $50 million and $100 million, and debts between $10 million to $50 million. BERKSHIRE INCOME: March 31 Balance Sheet Upside-down by $7 Million ------------------------------------------------------------------ Berkshire Income Realty, Inc. reported its results for the quarter ended March 31, 2008. Financial highlights for the quarter ended March 31, 2008: * The Company's Funds From Operations for the quarter ended March 31, 2008 were $1,775,535 as compared to $1,282,587 for the quarter ended March 31, 2007. The increase of $492,948 relates principally to favorable increases in net operating income from property operations. NOI for the quarter ended March 31, 2008 was $9,923,637, an increase of $854,242, or 9.42%, from NOI of $9,069,395 for the quarter ended March 31, 2007. The increases in NOI were partially offset by increases in interest expense of $646,017 related to increased levels of first and second mortgage debt obtained to take advantage of favorable interest rates in the debt market. * For the quarter ended March 31, 2008, Berkshire reported net income, before depreciation, of $1,015,209 as compared to net income, before depreciation (including depreciation reported as part of discontinued operations), of $871,256 for the quarter ended March 31, 2007, an increase of $143,952. The increase in net income, before depreciation, was primarily due to increases in rental revenue, offset by smaller increases in expenses. Rental revenue increases can be attributed to increases in rental rates at properties which have undergone rehabilitation as well as general increases in market rates at a majority of the properties. Net loss for the quarter ended March 31, 2008 was $(7,441,991) as compared to a net loss of $(6,907,532) for the quarter ended March 31, 2007, an increase in loss of $(534,459). In addition to the changes in net income, before depreciation, the increase in net loss also reflects an increase in depreciation expense (including depreciation reported as part of discontinued operations) of $(678,411) related to increases in depreciable assets including two properties acquired during 2007 and capital improvements related to rehabilitation projects at a few properties. * The Company continues to implement an investment strategy centered on the renovation and rehabilitation of properties in its portfolio as well as identifying properties for acquisition which would realize increases in value from major renovation activities. Ongoing rehabilitation projects continue to generate improved operating results as evidenced by increased rent levels of newly renovated units placed back into service at the completion of the renovation. The Company continues to monitor the existing portfolio for rehabilitation opportunities as well as considering rehabilitation projects contemplated as part of the Company's acquisition strategy for new properties. Additionally, the Company considers ground up development projects as an important component of its investment strategy and is currently constructing a 143 unit garden style multifamily apartment community on land it had previously acquired for potential development purposes. President and CFO, David Quade comments, "The operating results for Berkshire Income Realty for the quarter ended March 31, 2008 were positive as evidenced by increased NOI. NOI benefited from favorable rental income and occupancy trends in the majority of our operating markets during the current quarter. We continue to create value in our portfolio through our property management and renovation and rehabilitation capabilities. Additionally, we are developing a new multifamily apartment community on land previously acquired by the Company. We believe this development will add significant value to the Arboretum residential complex when it comes online in late 2008 and management will continue to pursue other development opportunities as they are identified by the Company." Funds From Operations The Company has adopted the revised definition of FFO adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). FFO falls within the definition of a "non-GAAP financial measure" as stated in Item 10(e) of Regulation S-K promulgated by the SEC. Management considers FFO to be an appropriate measure of performance of an equity REIT. We calculate FFO by adjusting net income (loss) (computed in accordance with GAAP, including non-recurring items), for gains (or losses) from sales of properties, real estate related depreciation and amortization, and adjustment for unconsolidated partnerships and ventures. Management believes that in order to facilitate a clear understanding of the historical operating results of the Company; FFO should be considered in conjunction with net income as presented in the consolidated financial statements included elsewhere herein. Management considers FFO to be a useful measure for reviewing the comparative operating and financial performance of the Company because, by excluding gains and losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies. The Company's calculation of FFO may not be directly comparable to FFO reported by other REITs or similar real estate companies that have not adopted the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO is not a GAAP financial measure and should not be considered as an alternative to net income (loss), the most directly comparable financial measure of the company's performance calculated and presented in accordance with GAAP, as an indication of its performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator of the company's ability to make cash distributions. The company believes that to further understand its performance, FFO should be compared with its reported net income and considered in addition to cash flows in accordance with GAAP, as presented in its consolidated financial statements. FFO for the three months ended March 31, 2008 reflects an increase over FFO for the three-month period ended March 31, 2007. The increase is due mainly to increases in Net Operating Income of the properties, which was offset in part by increases in interest expense related to increased debt balances in the comparative three-month periods ended March 31, 2008 and 2007. The increased debt levels represent items of a variable nature during the comparative periods that are not adjusted to determine FFO. Due to the variable nature of items included in or excluded from net loss, past FFO results should not be considered indicative of future FFO results. Deficit As of March 31, 2008, the company had total assets of $511.6 million and total liabilities of $518.7 million, resulting in total stockholders deficit of $7 million. About Berkshire Income Realty Berkshire Income Realty (AMEX: BIR_pa), (AMEX: BIRPRA), (AMEX: BIR-A), (AMEX: BIR.PR.A) is a REIT whose objective is to acquire, own, operate, and rehabilitate multifamily apartment communities. The Company owns interests in twenty-five such multifamily apartment communities, of which eight are located in the Baltimore/Washington, D.C. metropolitan area, four are located in Virginia, four are located in Houston, Texas, two are located in Dallas, Texas, two are located in the Chicago, Illinois area and one is located in each of Austin, Texas, Charlotte, North Carolina, Atlanta, Georgia, Sherwood, Oregon and the Tampa, Florida area. BHM TECHNOLOGIES: Files for Chapter 11 Protection; Seeks Financing ------------------------------------------------------------------ BHM Technologies Holding Inc. and 14 of its affiliates filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code blaming poor liquidity coupled with automobile sales slump, Bloomberg News reports. BHM Technologies and an affiliate of Lehman Brothers Inc., negotiated the terms and conditions of a plan of reorganization, Bloomberg says. Lehman's affiliate is the agent for BHM Technologies first-lien lenders, the report adds. Financing is "crucial to maximizing the value for the debtors' estates," Bloomberg quotes company official with knowledge of the matter as saying. BHM Technologies is presently seeking court approval to obtain financing from its first-lien lender. Pursuant to court documents, BHM Technologies listed assets and debts of more than $500 million, and secured debt of at least $323.5 million. Two units of BHM Technologies in Mexico did not file for bankruptcy, Bloomberg notes. Headquartered in Ionia, Michigan, BHM Technologies Holdings Inc. manufactures and sells automobile parts including air bags and electrical systems. The company also operates under Brown Corp. -- http://www.browncorp.com/ BHM TECHNOLOGIES: Case Summary & 50 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: BHM Technologies Holdings, Inc. 401 South Steele St. Ionia, MI 48846 Bankruptcy Case No.: 08-04413 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- The Brown Corp. of America 08-04412 BHM Technologies, LLC 08-04415 The Brown Co. International, LLC 08-04416 The Brown Co. of Ionia, LLC 08-04417 The Brown Co. of Moberly, LLC 08-04418 The Brown Co. of Waverly, LLC 08-04419 The Brown Corp. of Greenville, Inc. 08-04421 The Brown Realty Company, LLC 08-04422 Heckethorn Holdings, Inc. 08-04423 Heckethorn Manufacturing Co., Inc. 08-04425 Midwest Stamping, Inc. 08-04426 Midwest Stamping & Manufacturing Co. 08-04427 Morton Welding Holdings, Inc. 08-04428 Morton Welding Co., Inc. 08-04429 Type of Business: The Debtors are independent designers and manufacturers of welded assemblies and machined components for a customer base in a variety of end markets, including automotive, construction, agricultural, and lawn and garden. See http://www.browncorp.com/ Chapter 11 Petition Date: May 19, 2008 Court: Western District of Michigan (Grand Rapids) Judge: Scott W. Dales Debtors' Counsel: Hannah Mufson McCollum, Esq. Email: mccolluh@pepperlaw.com Kay Standridge Kress, Esq. Email: Kressk@pepperlaw.com Robert S. Hertzberg, Esq. Email: hertzbergr@pepperlaw.com Pepper Hamilton, LLP Ste. 3600, 100 Renaissance Ctr., 36th Fl. Detroit, MI 48243 Tel: (313) 393-7306, (313) 393-7365, (313) 393-7433 Fax: ((866) 738-9629 -- and -- Leon R. Barson, Esq. Email: barsonl@pepperlaw.com Pepper Hamilton LLP 3000 Two Logan Square 18th and Arch Streets Philadelphia, PA 19103 Tel: (215) 981-4424 Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million Debtors' Consolidated List of 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ SAC Domestic Investments, L.P. Debt $72,112,539 replacing Lehman Commercial Paper, Inc. as agent for the $65,000,000 second lien credit agreement dated as of July 21, 2006 Attn: SAC Capital Advisors, LLC 72 Cummings Point Rd. Stamford, CT 06902 Fax: ((203) 890-2295 Pyper Tool & Engineering Trade Vendor $8,578,065 3003 Wilson Dr. N.W. Grand Rapids, MI 49534-7565 Tel: (616) 791-9788 Fax: (616) 791-1040 Centerline Windsor, Ltd. Trade Vendor $5,507,127 415 Morton Dr. Lasalle, ON N9J 3T8 Canada Tel: (519) 734-8464 Fax: (519) 734-7408 Walker Tool & Die, Inc. Trade Vendor $4,034,978 2411 Walker Rd. N.W. Grand Rapids, MI 49504-1377 Tel: (616) 453-5471 Fax: (616) 453-3765 Honda Trading America Customer Resale $2,910,329 19900 ST RT 739 Payables Marysville, OH 43040 Tel: (937) 644-0125 Fax: (937) 644-8070 Kenwal Steel-Burns Harbor Trade Vendor $2,564,124 307 Tech Dr. Burns Harbor, IN 46304 Tel: (219) 764-5800 Fax: (219) 763-7566 US Engineering Corp. Trade Vendor $1,856,016 2530 Thornwood S.W. Grand Rapids, MI 49509-2149 Tel: (616) 530-9889 Fax: (616) 530-0523 Kenwal Steel Corp. Trade Vendor $1,534,880 8223 W. Warren Ave. Dearborn, MI 48126 Tel: (313) 739-1000 Fax: (313) 739-1001 Royal Plastics, Inc. Trade Vendor $968,358 3765 Quincy Hudsonville, MI 49426 Tel: (616) 667-4178 Fax: (616) 896-0290 Lincoln Electric Co. Trade Vendor $896,514 22801 Saint Clair Ave. Cleveland, OH 44117 Tel: (216) 383-8027 Fax: (216) 383-4727 Leggett & Platt, Inc. Trade Vendor $779,546 Number 1 Leggett Rd. Carthage, MO 64836 Tel: (417) 358-8131 Fax: (417) 358-8449 Trademark Die & Engineering Trade Vendor $765,460 8060 Graphic Dr. Belmont, MI 49306 Tel: (616) 863-6660 Fax: (616) 863-6665 P.C. Campana, Inc. Trade Vendor $715,557 1374 East 28 TH Lorain, OH 44055 Tel: (440) 246-6500 Fax: (440) 246-6609 Eclipse Tool & Die Trade Vendor $699,635 4713 Circuit CT Wayland, MI 49348 Tel: (616) 877-3717 Fax: (616) 877-3712 Dundee Products Inc. Trade Vendor $575,608 14490 Stowell Rd. Dundee, MI 48131 Tel: (734) 529-2441 Fax: (734) 529-5637 Modern Metal Products, Inc. Trade Vendor $554,990 35053 Eagle Way Chicago, IL 60678-1350 Tel: (815) 877-9571 Fax: (815) 877-1070 Superior Roll Forming, Inc. Trade Vendor $554,480 5535 Wegman Dr. Valley City, OH 44280 Tel: (330) 225-2500, 233 (ext.) Fax: (330) 225-0888 General Motors Corp. Customer Resale $503,195 4100 S. Saginaw St. Payables Flint, MI 48507-2605 Tel: (859) 243-7619 Fax: (602) 797-6596 Earle M. Jorgensen Co-Chicago Trade Vendor $488,476 75 Remittance Dr., Ste. 6477 Chicago, IL 60675-6477 Tel: (800) 323-4721 Fax: (800) 635-7629 Kenwal Steel-Tennessee, LLC Trade Vendor $476,221 8223 W. Warren Ave. Dearborn, MI 48126 Tel: (313) 739-1079 Fax: (313) 739-2379 Miller Welding Supply, Inc. Trade Vendor $471,299 505 Grandville S.W. Grand Rapids, MI 49503-4948 Tel: (616) 459-9461 Fax: (616) 459-4759 Bluff City Steel, LLC Trade Vendor $428,908 1175 Harbor Ave. Memphis, TN 38113 Tel: (901) 946-1005 Fax: (901) 948-6266 Ford Motor Co. Customer Resale $414,907 Office of the General Counsel Payables 1 American Rd. Ste. 323WHQ Dearborn, MI 48126 Tel: (313) 594-4032 Fax: (313) 337-3209 Ultimate Tooling, INC. Trade Vendor $383,575 2943 South Wilson Ct. Walker, MI 49525 Tel: (616) 791-6740 Fax: (616) 791-6750 Olympic Steel Lafayette Trade Vendor $292,531 3600 N. Military Street Detroit, MI 48210 Tel: (313) 584-6888, (313) 894-4552 Fax: (313) 894-7930 Hascall Steel Co. cor 4165 Trade Vendor $291,098 4165 Spartan Ind Dr. S.W. Grandville, MI 49418 Tel: (616) 531-8600 Fax: (616) 531-7555 EFC International, Inc. Trade Vendor $254,566 1940 Craigshire Blvd. St. Louis, MO 63146 Tel: (314) 434-2888 Fax: (630) 539-7070 Bend All Automotive, Inc. Trade Vendor $251,628 575 Waydom Dr. Ayr, ON NOB 1E0 Canada Tel: (519) 623-2002 Fax: (519) 623-1489 Jemison Demsey Metal Trade Vendor $239,345 Metals USA-Flat Rolled-SP Trade Vendor $233,216 Jackson Tube Service, Inc. Trade Vendor $230,667 Metal-matic, Inc. Trade Vendor $218,104 First National Bank of Waverly Debt $217,612 and Oak Hill Financial Services, Inc. Pro Weld, Inc. Steel Technologies Trade Vendor $209,510 Tomson Steel Co., Corp. Trade Vendor $198,045 Sika Corp. Trade Vendor $187,985 Marubeni-Itochu Steel Ame. Trade Vendor $183,715 Worthington Steel Co. Trade Vendor $177,802 Grenada Stamping/Assembly Trade Vendor $174,068 Decker Manufacturing, Inc. Trade Vendor $174,007 Pintura Estampado y Monta Trade Vendor $170,747 Carretera Celaya-Salamanca E&E Manufacturing Co. Inc. Trade Vendor $168,491 B&J Specialty, Inc. Trade Vendor $167,612 Delphi Thermal & Interor Trade Vendor $162,043 Airgas Great Lakes Trade Vendor $160,204 CHS Automation Trade Vendor $146,820 Parthenon Metal Works, Inc. Trade Vendor $144,547 Mid South Wire Co. Trade Vendor $142,239 Art Technologies Trade Vendor $138,644 BRANTLEY CAPITAL: Cash Distribution in Liquidation Plan Okayed -------------------------------------------------------------- Brantley Capital Corporation said that pursuant to the Plan of Liquidation and Dissolution previously approved by shareholders, the Board of Directors has approved a cash distribution of $.75 per share. The record date for the distribution is May 26, 2008. The payment date for the distribution is May 28, 2008 and the ex- dividend date is May 29, 2008. As of May 15, 2008, Brantley has approximately $6,000,000 in cash and does not hold any other material, non-cash assets. Subject to the resolution of certain remaining contingent liabilities, the Company's Board of Directors intends to approve one or more additional cash distributions. Brantley Capital Corporation (BBDC.PK) is a publicly-traded business development company that previously provided equity and long-term debt financing to small and medium-sized private companies located in the United States. In April 2007, Brantley Capital Corporation sold substantially all of its investment assets. It is no longer engaged in any business activities except for the purpose of winding up its business affairs. CARGO CONNECTION: Assets Foreclosed on YA Global Loan Default ------------------------------------------------------------- Cargo Connection Logistics Holding, Inc. achieved significant relief from its secured debt in connection with a foreclosure by a secured creditor. In April, the Company's largest secured creditor, YA Global Advisors, assigned its interest to Pacer Logistics, LLC, a subsidiary of Pacer Health Corporation. On April 29, 2008, Pacer Logistics informed the Company that it intended to foreclose on certain of the Company's assets. On May 13, 2008, the Company and Pacer Logistics entered into a Strict Foreclosure and Transfer Agreement, pursuant to which the Company acknowledged that it is in default of certain obligations, in the aggregate amount of $3,670,389 to Pacer, as assignee of all right, title and interest of YA Global Investments, LP, including as assignee of Montgomery Equity Partners Ltd., with respect to the Cargo Companies' obligations under the: -- Secured Convertible Debenture, dated December 28, 2005, issued to Montgomery in the principal amount of $1,750,000; -- Investor Rights Registration Agreement, dated December 28, 2005, by and between the Company and Montgomery; -- Secured Convertible Debenture, dated February 13, 2006, issued to Montgomery in the principal amount of $600,000; -- Security Agreements, dated December 28, 2005, whereby the Company and certain of its subsidiaries secured obligations to Montgomery in the amount of $2,350,000; and -- Secured Convertible Debenture, dated November 17, 2007, issued to YA Global, in the principal amount of $46,500. The Outstanding Obligations are secured by certain assets of the Cargo Companies. Pursuant to the Strict Foreclosure Agreement and a related assumption agreement, all of the Outstand