/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080704.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, July 4, 2008, Vol. 12, No. 158 Headlines 329 GREENE: Voluntary Chapter 11 Case Summary ABACUS 2006-10: Moody's Affirms Ba2 Rating of Class L Notes ADVANTA CORP: Moody's Affirms Ba3 Senior Unsecured Debt Rating AGA MEDICAL: S&P Affirms 'B+' Credit Rating with Positive Outlook AHAVA FOOD: Secured Lender to Sell Collateral at July 9 Auction AMERICAN MEDIA: March 31 Balance Sheet Upside-Down by $399.1 MM AMPEX CORPORATION: Wants Bankruptcy Control Until October 26 AMSCAN HOLDINGS: Selling 4 Retail Stores to Zurchers Merchandise ANALYTICAL SURVEYS: March 31 Balance Sheet Upside-Down by $20,006 ANGIOTECH PHARMA: Moody's to Review B3 & B2 Ratings for Likely Cut ARTHUR'S GARAGE: Voluntary Chapter 11 Case Summary ARVINMERITOR INC: S&P's 'B+' Rating Unaffected by Falling Sales AVENSYS CORP: Posts $273,779 Net Loss in Third Qtr. Ended March 31 AVIS BUDGET: S&P Chips Corporate Credit Rating to BB from BB+ B&B RESTAURANT: Case Summary & 40 Largest Unsecured Creditors BALLYROCK ABS: Moody's Cuts Rating of $56.2MM Notes to Caa3 BAYOU GROUP: Fugitive Executive Surrenders to Authorities BEAR STEARNS: Value of Collateral for Fed Bailout Loan Drops BEARD COMPANY: March 31 Balance Sheet Upside-Down by $6.3 MM BELDEN & BLAKE: Posts $11.6 Million in 2008 First Quarter BROTMAN MEDICAL: Has Until July 21 to File Chapter 11 Plan CABLEVISION SYSTEMS: Fitch Holds 'B+' Rating on Series of Buyout CENTRE SQUARE: S&P Trims Three CDO Ratings to CC from CCC CHARTER COMMS: Moody's Affirms Caa1 Corporate Family Rating CHESAPEAKE CORP: EBITDA Decline Prompts S&P to Cut Rating to B CHRYSLER LLC: Appoints Rae as EVP, Combines HR & Employee Depts. CIMARRON CDO: Moody's Junks Rating of Class C Notes Due 2040 CLAYTON HOLDINGS: S&P Withdraws Ratings After Greenfield Merger CLEAR CHANNEL: Rush Limbaugh Renews Radio Contract, Gets $400 Mil. CORPORATE BACKED: S&P Puts 'B' Rating Under Negative CreditWatch CROSSWINDS AT LONE STAR: Disclosure Statement Hearing Rescheduled CROSSWINDS AT LONE: Wants Additional 90-Days To Solicit Votes CROSSWINDS AT LONE STAR: To Request Permission to Use DIP Fund DANA CORP: Wants Court to Disallow Visteon Corp.'s $9.8 Mil. Claim DAVID FHIMA: Files for Bankruptcy Following String of Setbacks DAWAHARES LEXINGTON: To Liquidate Remaining 22 Outlets DENTAL PROFILE: Case Summary & 28 Largest Unsecured Creditors DOLLAR THRIFTY: S&P Cuts Rating to 'B' and Keeps Negative Watch DUNE ENERGY: March 31 Balance Sheet Upside-Down by 42 Million DUNE ENERGY: Zazove Associates Discloses 21.03% Equity Stake EDMUND ANDERSON: Case Summary & 20 Largest Unsecured Creditors EDUCATION RESOURCES: Fixes Panel's Protests to PR Advisor Request EDUCATION RESOURCES: Panel Can Hire Duane Morris Bankr. Counsel EDUCATION RESOURCES: Panel Can Hire Posternak as Special Counsel ELECTRIC BREW: Foreclosure Action Moved Due to Chapter 11 Filing ELECTRONIC DATA: $14BB Merger Gets No More Question from FTC, DOJ EL PASO: S&P Holds 'BB' Credit Rating, Changes Outlook to Stable EL POLLO: S&P Revises Outlook to Negative from Stable ESTATE FINANCIAL: Case Summary & 20 Largest Unsecured Creditors FEDDERS CORP: Committee et al. Protest Chapter 11 Liquidation Plan FIDELITY NATIONAL: Spin-off Cues Moody's to Affirm Ba1 CF Rating FIDELITY NATIONAL: S&P Lifts Ratings on Good Operating Performance FORD CREDIT: Fitch Affirms 'BB' Rating on Class D Notes FORD MOTOR: Overall June 2008 Sales in Canada Decrease 13.7% FORD MOTOR: Offers Buyout Options to 300 Louisville Plant Workers FOXCO ACQUISITION: S&P Assigns 'B' Corporate Credit Rating FREEDOM CERTIFICATES: S&P Places 'B' Cert. Rating Under Neg. Watch FREMONT GENERAL: Taps FTI Consulting as Financial Advisor GERDAU AMERISTEEL: Strong Performance Cues S&P's Stable Outlook GENERAL MOTORS: Bankruptcy Fears Overblown, JPMorgan Analyst Says GENERAL STORE: Voluntary Chapter 11 Case Summary GEORGETTE LIGHTPIPE: Voluntary Chapter 11 Case Summary GLOBAL LAND: Voluntary Chapter 11 Case Summary GREEN VALLEY: S&P Holds 'B' Rating and Revises Outlook to Negative GREENWICH CAPITAL: S&P Puts Low-B Ratings on Eight Cert. Classes HANCOCK FABRICS: Plan Confirmation Hearing Set for July 22 HAVEN HEALTHCARE: To Sell Nursing Homes for $93 Mil. Credit Bid HOLMES FAMILY: Voluntary Chapter 11 Case Summary IMMUNICON CORP: Court Approves Bid Procedures for Sale of Assets INTELSAT JACKSON: S&P Assigns 'BB-' Rating on $811MM Credit Deal ITG VEGAS: Sells Ship for $15 Mil. Under 4-Day Closing Guarantee JAMIE MILOS: Case Summary & 20 Largest Unsecured Creditors JASON ROGGENSEE: Case Summary & 16 Largest Unsecured Creditors LAKESIDE CDO I: Moody's Cuts FR Notes Rating by 4 Notches to B2 LEAR CORP: S&P's 'B+' Rating Unmoved by Proposed Credit Amendment LEINER HEALTH: Has Until July 31 to File Chapter 11 Plan LEONARD BURNS: Case Summary & 2Largest Unsecured Creditors LEVITT AND SONS: Files Chapter 11 Plan; Liquidates Assets LINENS N THINGS: Asks Court to Approve $100MM Trade Vendor Program LITHIUM TECHNOLOGY: Bakhuizen et al. Disclose 30.3% Equity Stake MACKINAW POWER: S&P Holds 'BB-' Rating on $147MM Secured Term Loan MASTR: Moody's Junks Ratings of Four Classes of NIM Securities MIDWEST AIR: 40% Pay Cut for CEO, Other Employees Not Spared MOTHERS WORK: Restructuring Won't Affect S&P's 'B-' Rating Yet NAYAN LLC: Case Summary & 2 Largest Unsecured Creditors NEBRASKA BEEF: Recalls 5.3 Mil. Pounds of Beef After E. Coli Rise NEXSTAR BROADCASTING: $35.6MM PIK Notes Cue S&P's Rating Cuts NORTH OAKLAND: Sale Requires Chapter 11 Bankruptcy Filing OSIE COMBS: Case Summary & 20 Largest Unsecured Creditors PARKER EXCAVATING: Case Summary & 20 Largest Unsecured Creditors PENN NATIONAL: Ends $8.9BB Merger Deal with Fortress Investment PENN NATIONAL: S&P Holds 'BB-' Rating on Terminated Fortress Deal PENN OCTANE: Standard General et al. Own 23.38% Equity Stake PENSKE AUTOMOTIVE: S&P Revises Outlook to Neg. on Increased Debt PIONEER VALLEY: Moody's Cuts Rating of Class C Notes to Caa3 PLAINS EXPLORATION: Chesapeake Deal Cues Moody's Negative Outlook PLAINS EXPLORATION: Chesapeake Deal Won't Affect S&P's 'BB' Rating PLASTECH ENGINEERED: Wants Customers' Bar Date Moved to July 31 PLASTECH ENGINEERED: Geo-Tech Wants Stay Lifted to Sell Plastic POWER RECEIVABLE: S&P Puts $22.2MM Notes' BB+ Rating on Neg. Watch PRC LLC: Emerges From Chapter 11 After Five Months PRC LLC: Keeps Call Center Customer Services Deal with Verizon PRC LLC: Sets July 28 as Admin. and Rejection Claims Bar Date PRINTERS ROW: Case Summary & Largest Unsecured Creditor QUICK SERVICE: Bids for 17 Church's Chicken Stores Due July 25 RANGE RESOURCES: S&P Holds BB Rating, Changes Outlook to Positive RG SUMMIT: Case Summary & Six Largest Unsecured Creditors RGIS INVENTORY: S&P Changes Outlook to Stable on Losing Sales RIVER OAKS: Case Summary & 30 Largest Unsecured Creditors SAIL: Moody's Junks Ratings of Net Interest Margin Securities SAM SELTZER'S: Wants to Walk Away from Publix, Ocala Site Leases SMITHFIELD FOODS: Sells 4.95% of Shares to COFCO to Pay Debts SMITHFIELD FOODS: Mulls Offering $350MM Convertible Senior Notes SMITHFIELD FOODS: Joint Venture Unit Merges with Spain's Campofrio SMITHFIELD FOODS: Amends U.S. and European Credit Facilities SOLOMON TRANSPORT: Case Summary & Largest Unsecured Creditor SUPERIOR ESSEX: S&P Retains 'BB' Rating Under Developing Watch SUPERIOR ESSEX: S&P Retains 'BB' Rating Under Developing Watch TEXAS PETROCHEMICALS: To Distribute Reserve Shares on September 15 TOUGHER INDUSTRIES: Ch. 11 Ongoing; Former Owner to be Sentenced TRIBUNE CO: LA Times Unit Cuts 17% of Editorial Workforce TRONOX WORLDWIDE: Moody's to Review B3 Rating for Likely Cut TROPICANA ENT: Wants to Set September 26 as Claims Filing Deadline TROPICANA ENT: Sec. 341(a) Meeting Adjourned, Schedules Due July 7 TROPICANA ENT: Conservator Has Until October 16 to Sell NJ Casino TW TELECOM: S&P Revises Outlook to Positive from Stable UNIFI INC: Sells Polyester Plant to Reliance Industries for $12MM VICTORY MEMORIAL: SUNY Takes Over Operations in 11th Hour Deal VISUAL IMAGE: Case Summary & 20 Largest Unsecured Creditors WACHOVIA BANK: S&P Places Six Low-B Ratings Under Negative Watch WACHOVIA BANK: S&P Places Six Low-B Ratings Under Negative Watch WALLACE ROBERTSON: Case Summary & 20 Largest Unsecured Creditors WATER PIK: Reduced Leverage Cues S&P to Revise Outlook to Stable WCI STEEL: Shareholders Injunction Plea vs Severstal Bid Denied WHITEHALL JEWELERS: Taps Proskauer Rose as Bankruptcy Counsel * Moody's: Rising Prices Affect American Chemicals Manufacturers * Moody's Sees Unfavorable Credit State for Automotive Makers * Moody's Sees Stable Liquidity in Nondurable-Products Industry * Moody's Says Private Colleges and Universities Fared Well * Moody's Says Many States Fail to Adopt Budgets on Schedule * S&P Puts Negative Watch on Nine Ford Motor-Related Transactions * BOOK REVIEW: Cardozo and Frontiers of Legal Thinking ********* 329 GREENE: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: 329 Greene Street, LLC 339 Greene Street New Haven, CT 06511 Bankruptcy Case No.: 08-32148 Chapter 11 Petition Date: July 1, 2008 Court: District of Connecticut (New Haven) Judge: Albert S. Dabrowski Debtor's Counsel: Peter L. Ressler, Esq. Groob Ressler & Mulqueen 123 York Street, Suite 1B New Haven, CT 06511-0001 Phone: (203) 777-5741 Fax: 203-777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition with a list of its largest unsecured creditors is available for free at http://bankrupt.com/misc/c-08-32148.pdf ABACUS 2006-10: Moody's Affirms Ba2 Rating of Class L Notes ----------------------------------------------------------- Moody's Investors Service affirmed the ratings of 11 tranches of Notes issued by Abacus 2006-10, Ltd. as follows: -- $300,000,000 Class A Floating Rate Notes, Due 2045, affirmed at Aaa -- $37,500,000 Class B Floating Rate Notes, Due 2045, affirmed at Aa1 -- $37,500,000 Class C Floating Rate Notes, Due 2045, affirmed at Aa2 -- $28,125,000 Class D Floating Rate Notes, Due 2045, affirmed at Aa3 -- $18,750,000 Class E Floating Rate Notes, Due 2045, affirmed at A1 -- $18,750,000 Class F Floating Rate Notes, Due 2045, affirmed at A2 -- $14,062,500 Class G Floating Rate Notes, Due 2045, affirmed at A3 -- $14,062,500 Class H Floating Rate Notes, Due 2045, affirmed at Baa1 -- $12,500,000 Class J Floating Rate Notes, Due 2045, affirmed at Baa2 -- $12,500,000 Class K Floating Rate Notes, Due 2045, affirmed at Baa3 -- $35,000,000 Class L Floating Rate Notes, Due 2045, affirmed at Ba2 Moody's is affirming the notes due to overall stable performance of the underlying reference obligations. Abacus 2006-10, Ltd. is a collateralized debt obligation referencing a portfolio of synthetic CMBS Securities. Currently, the transaction has an aggregate reference obligation notional amount of $3,750.0 million, the same as that at issuance. The collateral put provider is Goldman Sachs International. The obligations of Goldman Sachs International are guaranteed by Goldman Sachs Group, Inc. (senior unsecured rating of Aa3, and short term rating of P-1, stable outlook). The reference obligations are from CMBS pools securitized in 2004 (28.0%) and 2005 (72%). The rating action reflects Moody's evaluation of the expected loss associated with the notes based on the current credit quality on the underlying reference obligations considering the reduced time to maturity and the senior unsecured and short term ratings of the put provider. ADVANTA CORP: Moody's Affirms Ba3 Senior Unsecured Debt Rating -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Advanta Corp., including its senior unsecured rating of Ba3, and changed the outlook to negative from stable. The change in outlook mainly reflects Moody's concerns regarding the company's asset quality, core profitability, and funding/liquidity, as the company navigates a challenging environment for credit card lenders. Regarding asset quality, Advanta has been experiencing deteriorating net charge-off and delinquency measures since approximately mid-year 2007 attributable to: underwriting risk expansion in prior periods; relatively high exposure to geographic trouble spots, in particular California and Florida; a ramp-down in originations volume beginning in the second half of 2007 in response to the ongoing credit crunch and signs of weakening credit quality; and general U.S. economic deterioration. Although the company has embarked on a number of financial, credit underwriting and collections initiatives to mitigate credit losses, Moody's expects credit quality will continue to decline at least through year end 2008. As to profitability, the significant drop-off in margins since mid-year 2007 is attributable to declining credit quality and increased credit loss provisioning. Moody's expects profitability to remain under pressure at least through the end of the year as the company -- and the industry in general -- deal with the effect of reduced asset quality. The potential for funding costs to move higher in relation to asset yields is an additional risk factor to the firm's profitability metrics. Regarding funding and liquidity, as with other frequent securitization issuers, Advanta's access to capital markets has been challenged by the contraction of the ABS markets brought on by the credit crunch. Access has been further constrained by Advanta's declining credit quality and the markets' differentiation of the firm from stronger competitors. With Advanta's last two Aaa deals, in May and June 2008, respectively, the company retained all or a significant portion of the issuances for its own account. Although Advanta has no plans to do so, the securities could be pledged with the Fed at 98% of market value. Moody's expects Advanta to maintain adequate liquidity over the near term. However, Moody's will closely monitor the company's access to securitization markets and third party investors, a key funding source, as well as the strength and certainty of its other sources of cash in relation to its operational and financial obligations. In terms of business position, historically Advanta has maintained a solid franchise in the business cards segment (estimated #6 small business credit card issuer per Dec. 31, 2007, unchanged from its 2006 position). As noted, however, Advanta has been ramping back originations and receivables balances in reaction to asset quality and funding issues. Although reduced originations volume takes pressure off liquidity and funding in the short term, Moody's is concerned that the curtailment of volumes may reduce the company's franchise value if sustained over the long term. Governance concerns also continue to be an issue, in particular the control exerted over Advanta by its principal shareholder, CEO Dennis Alter. In Moody's view this introduces corporate governance concerns commonly found with this type of closely held ownership structure. In order to change its rating outlook to stable from negative, Moody's will need to observe tangible evidence of stabilization and improvement in asset quality, core profitability, and funding/liquidity. Ratings affirmed included: Advanta Corporation -- -- Senior unsecured debt Ba3 -- Senior unsecured shelf (P)Ba3 -- Subordinated debt B2 -- Subordinated shelf (P)B2 -- Preferred Stock shelf (P)B3 Advanta Corporation, headquartered in Spring House, PA, reported approximately $8.3 billion in managed assets as of March 31, 2008. AGA MEDICAL: S&P Affirms 'B+' Credit Rating with Positive Outlook ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Plymouth, Minnesota-based AGA Medical Corp. to positive from stable. Per the company's Form S-1 registration statement, it will issue up to $200 million of common stock, and the class A common stock, class B common stock, and series A preferred stock will convert to the company's common stock immediately prior to the consummation of the offering. In addition to this deleveraging event, positive results from the company's RESPECT and PREMIUM trials, which will evaluate the safety and efficacy of the company's Amplatzer patent foramen ovale occluder to prevent recurrent cryptogenic stroke and migraine headaches, respectively, could significantly expand sales of this product. The 'B+' corporate credit rating is affirmed. "Our ratings on AGA reflect the company's narrow product line of medical devices, which largely treat structural heart defects, and its modest revenue base," said Standard & Poor's credit analyst Cheryl Richer. Although AGA has developed a pipeline of products that capitalize on a core expertise (nitinol wire braiding), the development of these products largely is attributable to their sole inventor, Dr. Kurt Amplatz. These risks more than offset the company's leadership position in which AGA's products have set the gold standard for treatment, replacing surgery with an effective and minimally invasive alternative. AGA designs, develops, and manufactures closure devices to treat congenital heart defects: They are percutaneously introduced into the heart using the company's ancillary products, such as delivery systems, sizing balloons, and guidewires. AGA is focused on the four most common congenital heart defects, which represent more than 50% of all congenital heart deficiencies: atrial septal defect, patent ductus arteriosus, ventricular septal defect, and PFO. Although there are a handful of competitors in this market, they have made negligible inroads because of the well-documented superior safety and efficacy of AGA's devices. AGA commands a dominant position in U.S. and international markets. The company has strengthened its product portfolio with the introduction of the vascular plug, to close abnormal blood vessels, and recently received approval for a next-generation product. AGA expanded this diversification strategy with the introduction of a vascular graft in Europe in the first half of 2008. The company continues to develop next-generation iterations of its key SHD products as well as extend the expertise in braided nitinol to new therapeutic indications. AHAVA FOOD: Secured Lender to Sell Collateral at July 9 Auction --------------------------------------------------------------- Signature Bank will sell its collateral under its security agreements with Ahava Food Corp., St. Lawrence Food Corp., Lewis County Dairy Corp. and Schwartz & Sons Quality Distributors, subject to bigger and better offers. The auction will be held on July 9, 2008, 10:00 a.m., at the offices of: Herrick Feinstein LLP No. 2 Park Avenue New York, NY 10016 The Debtors' default in their obligations under the security agreements has prompted the lender to sell the property deemed as the collateral for the loan. The collateral is subject to a pledge and security agreement dated as of Aug. 22, 2005, executed and delivered by the Debtors to the lender. The collateral will be sold on an "as is, where is" basis. There is no warranty relating to the title, possession, quiet enjoyment or the like in this sale. The sale will be made in whole or parcels, lots or groups as the lender in its sole and absolute discretion may determine. Signature Bank can be reached at: Attn: Robert A Bloch Senior Vice President and Group Director No. 565 Fifth Avenue New York, NY 10017 Tel (646) 822-1827 Ahava Food Corp. produces kosher milk and dairy products. Ahava is the sole kosher cholov Yisroel company outside Israel that owns its own plants and farms. Ahava Food was founded in 1984. AMERICAN MEDIA: March 31 Balance Sheet Upside-Down by $399.1 MM --------------------------------------------------------------- American Media Inc. disclosed Monday financial results of its subsidiary American Media Operations Inc. for the fourth quarter and full fiscal year ended March 31, 2008. At March 31, 2008, the company's consolidated balance sheet showed $941.2 million in total assets and $1.3 billion in total liabilities, resulting in a $399.1 million total stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $164.1 million in total current assets available to pay $186.3 million in total current liabilities. The company reported a net loss of $61.9 million on total operating revenues of $490.8 million for the year ended March 31, 2008, compared with a net loss of $343.8 million on total operating revenues of $470.9 million for the year ended March 31, 2007. The company attributed the increase in revenue in fiscal 2008 to favorable results in advertising revenue. The company's Shape, Star and Men's Fitness magazines all delivered strong performances in fiscal year 2008 versus fiscal year 2007. Shape ad pages increased by 10.5%, Star ad pages by 21.5% and Men's Fitness ad pages by 13.2% in fiscal year 2008 versus fiscal year 2007. For the 12 months ended March 31, 2008, operating income was $67.1 million, as compared to a loss of $253.7 million in the prior-year period. During fiscal years 2008 and 2007, the company recorded non-cash provisions for the impairment of intangible assets and goodwill of $31.1 million and $305.4 million, respectively. For the 12 months ended March 31, 2008, EBITDA was $123.2 million, as compared to $85.0 million in the prior-year period, representing a 45% increase. For the 12 months ended March 31, 2008, Bank EBITDA was $132.1 million, as compared to $102.0 million in the prior-year period, representing a 30% increase. Fourth Quarter Results Revenue for the fourth quarter of fiscal year 2008 was $123.2 million, compared to $124.5 million in the fourth quarter of fiscal year 2007, representing a 1% decrease. Operating loss for the fourth quarter of fiscal year 2008 was $7.8 million, as compared to operating income of $21.7 million in the fourth quarter of fiscal year 2007. Net loss was $30.1 million for the fourth quarter of fiscal year 2008, as compared to a net loss of $5.1 million in the fourth quarter of fiscal year 2007. EBITDA for the fourth quarter of fiscal year 2008 was $28.6 million, essentially unchanged compared to the fourth quarter of fiscal year 2007. Bank EBITDA for the fourth quarter of fiscal year 2008 was $30.7 million, as compared to $30.0 million in the fourth quarter of fiscal year 2007. As of March 31, 2008, the company had cash and cash equivalents of $64.2 million, $60.0 million outstanding on the revolving credit facility under the 2006 Credit Agreement (which represents the full amount available to be borrowed under the revolving credit facility), and a working capital deficit of $22.2 million. Comments by Senior Management AMOI chairman and chief executive officer David Pecker said, "In fiscal year 2008, AMOI saw strong revenue growth driven by our major titles Shape, Star and Men's Fitness, each of which experienced a record advertising year. We expect that these leading titles in two of the strongest publishing categories today - health & fitness and celebrity - will continue to generate solid performance for the company in fiscal 2009." AMOI executive vice president and chief financial officer Dean Durbin said, "Over the course of fiscal year 2008, the company generated $19.0 million of cost savings and $16.0 million of revenue enhancements, nearly reaching the goals outlined in our management action plan in February 2007. This contributed to a 6% decrease in expenses in fiscal year 2008, when the non-cash provision for impairment is excluded." "Going forward, we will continue to operate the business in a disciplined fashion," continued Mr. Durbin. "During the first quarter of fiscal year 2009, we implemented additional initiatives related to cost savings and revenue enhancements that are expected to result in increases in EBITDA of approximately $19 million and $4 million, respectively, during fiscal year 2009." Full-text copies of the company's consolidated financial statements for the year ended March 31, 2008, are available for free at http://researcharchives.com/t/s?2f04 About American Media Inc. Headquartered in Boca Raton, Florida, American Media Inc. -- http://www.americanmediainc.com/-- is a publisher of celebrity journalism and health and fitness magazines in the U.S. These include Star, Shape, Men's Fitness, Fit Pregnancy, Natural Health, and National Enquirer. In addition to print properties, AMI owns Distribution Services Inc., an in-store magazine merchandising company. AMPEX CORPORATION: Wants Bankruptcy Control Until October 26 ------------------------------------------------------------ Ampex Corporation and its debtor-affiliates ask the Hon. Arthur J. Gonzalez of the United States Bankruptcy Court for the Southern District of New York to extend their exclusive periods to: a) file a Chapter 11 plan until Oct. 26, 2008, and b) solicit acceptances of that plan until Dec. 25, 2008. The requested extension of time will permit the Debtors to obtain confirmation of their proposed Chapter 11 plan of reorganization, without any disruption of their restructuring operation of their businesses. As reported in the Troubled Company Reporter on June 12, 2008, the Court approved pursuant to Section 1125 of the Bankruptcy Code the adequacy of the Debtors' disclosure statement dated June 8, 2008, explaining an amended Chapter 11 plan. The Court set a hearing on July 31, 2008, at 10:00 a.m., to consider confirmation of the Debtors' amended plan. The Debtors' exclusive period to file a Chapter 11 plan currently expires on July 28, 2008. A hearing is set for July 23, 2008, at 10:00 a.m., to consider the Debtors' extension request. Objections, if any, are due July 21, 2008, at 4:00 p.m. 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. AMSCAN HOLDINGS: Selling 4 Retail Stores to Zurchers Merchandise ---------------------------------------------------------------- Amscan Holdings Inc. disclosed the sale of two Party City and two Party America stores in the Salt Lake City, Utah market to Zurchers Merchandise Company. Zurchers operates seven retail party stores under the names of Zurchers in the markets of Salt Lake City, well as Boise and Twin Falls, Idaho. The Party City and Party America stores being acquired by Zurchers will be renamed under the Zurchers trade name and result in their independent ownership of eleven retail party stores in the states of Utah and Idaho. In a related, but separate transaction AHI also entered into a seven-year supply agreement with Zurcher's Merchandise Company. In exchange, the Supply Agreement obligates Zurchers to purchase increased levels of merchandise from Amscan through the length of its term. "This Supply Agreement with Zurchers, which extends to 2015, affords us the opportunity to strengthen our support with a long standing, independently-owned trade customer," James Harrison, President of AHI, commented. About Zurchers Merchandise Company Headquartered in Midvale, Utah, Zurchers Merchandise Company -- http://www.zurchers.com/-- offers wedding invitations, wedding supplies and services, party supplies, party rentals, invitations and announcements, balloons. About Amscan Holdings Headquartered in Elmsford, New York, Amscan Holdings Inc. -- http://www.amscan.com/-- designs, manufactures, contracts for manufacture and distributes party goods, including paper and plastic tableware, metallic balloons, accessories, novelties, gifts and stationery. The company also operates specialty retail party supply stores in the United States, and franchises both individual stores and franchise areas throughout the United States and Puerto Rico, under the names Party City, Party America, The Paper Factory and Halloween USA. With the acquisition of Factory Card & Party Outlet Corporation on Nov. 16, 2007, the company also operates specialty retail party and social expressions supply stores under the name Factory Card & Party Outlet. * * * Moody's Investors Service placed Amscan Holdings Inc.'s senior subordinate ratings at 'Caa1' in December 2007. The rating still holds to date. ANALYTICAL SURVEYS: March 31 Balance Sheet Upside-Down by $20,006 ----------------------------------------------------------------- Analytical Surveys Inc.'s consolidated balance sheet at March 31, 2008, showed $1,135,100 in total assets and $1,155,116 in total liabilities, resulting in a $20,006 total stockholders' deficit. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $941,291 in total current assets available to pay $1,155,116 in total current liabilities. The company reported a net loss of approximately $455,000 and $524,000 in the three months ended and the period from inception through March 31, 2008. The company has not begun to generate revenue. In March 2008, the company completed the acquisition of Axion International Inc., through a merger of the company's subsidiary into Axion. Axion International Inc. is a Delaware corporation which incorporated on Aug. 6, 2006, with operations commencing in November 2007. The merger has been accounted for as a reverse merger in the form of a recapitalization with Axion as the successor. The recapitalization has been given retroactive effect in the accompanying financial statements. The accompanying consolidated financial statements represent those of Axion for all periods prior to the consummation of the merger. 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?2f05 Going Concern Doubt As reported in the Troubled Company Reporter on Jan. 17, 2008, Houston-based Malone & Bailey PC expressed substantial doubt about Analytical Surveys Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Sept. 30, 2007. The auditing firm reported that the company has suffered significant operating losses in 2007 and prior years and does not currently have external financing in place to fund working capital requirements. The company has changed its business plan and recapitalized the company, but it still has to generate revenues. As of March 31, 2008, the amount of the company's accumulated deficit is approximately $524,000. About Analytical Surveys Based in Basking Ridge, N.J., Analytical Surveys Inc. (OTC BB: ANLT) -- http://www.anlt.com/-- was formed in 1981 to provide data conversion and digital mapping services to users of customized geographic information systems. In March 2008, the company completed the acquisition of Axion International Inc., through a merger of the company's subsidiary into Axion. Axion International Inc. -- http://www.axionintl.com/-- is the exclusive licensee of revolutionary patented technologies developed for the production of structural plastic products such as railroad crossties, bridge infrastructure, marine pilings and bulk heading. ANGIOTECH PHARMA: Moody's to Review B3 & B2 Ratings for Likely Cut ------------------------------------------------------------------ Moody's Investors Service placed the B3 Corporate Family Rating and B2 Probability of Default Rating of Angiotech Pharmaceuticals, Inc. under review for possible downgrade. At the same time, Moody's changed the company's Speculative Grade Liquidity assessment to SGL-4 from SGL-3, reflecting Angiotech's weak liquidity profile. The rating review is driven primarily by concerns regarding Angiotech's ongoing negative cash flow generation, which has resulted in lower cash balances and impaired liquidity. Although the company is taking steps to lower its R&D expenses, a reduction in TAXUS royalty revenues is expected to occur later this year. Moody's review will consider: (1) progress in reducing R&D and SG&A spend; (2) the extent to which these remedies can offset expected declines in TAXUS royalty revenues once the Xience stent is approved in the US; and (3) actions the company may take to improve its capital structure. If the company's capital structure changes, Moody's would reassess the Corporate Family as well as the Probability of Default Ratings. As part of the review, LGD assessments and point estimates are also subject to change. Ratings placed under review for possible downgrade: Angiotech Pharmaceuticals, Inc. -- Corporate Family Rating at B3 -- $325 Million Senior Unsecured Notes at B2, LGD3, 46% -- $250 Million Senior Subordinated Notes at Caa1, LGD6, 91% -- Probability of Default Rating at B2 Rating changed: -- Speculative Grade Liquidity Rating to SGL-4 from SGL-3. Angiotech Pharmaceuticals, Inc., founded in 1992, based in Vancouver, Canada, is a specialty pharmaceutical company that focuses on drug-device combinations and drug-loaded surgical biomaterial implants. ARTHUR'S GARAGE: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Arthur's Garage, Inc. 2536 Dickerson Parkway Carrollton, TX 75006 dba Arthur's Mercedes-Benz Service Bankruptcy Case No.: 08-33246 Type of Business: The Debtor repairs automobiles. Chapter 11 Petition Date: July 1, 2008 Court: Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Michael Wiss, Esq. 11882 Greenville Ave. Suite 111, Box 11 Dallas, TX 75243 972-889-9050 Fax: 972-889-1175 E-mail: mjwiss@xspediusmail.net Estimated Assets: $50,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition with a list of its largest unsecured creditors is available for free at http://bankrupt.com/misc/tnd-08-33246.pdf ARVINMERITOR INC: S&P's 'B+' Rating Unaffected by Falling Sales --------------------------------------------------------------- Standard & Poor's Ratings Services said that ArvinMeritor Inc.'s affirmation of full-year 2008 earnings guidance--despite falling sales in North America and volume declines in Europe--has no current effect on the company's rating (B+/Negative/--). The company expects earnings per share to fall at the high end of the previous guidance, in part because of strong sales growth in South America and Asia-Pacific and solid demand for military and off- highway products. S&P's rating and outlook reflect the challenging operating environment for auto suppliers in 2008. Although credit measures will be weak during most of fiscal 2008, it expect an eventual rebound in heavy truck demand in North America could lead to sustainable improvements in cash profitability and cash generation in the following year. In the meantime, S&P view the company's liquidity as acceptable. AVENSYS CORP: Posts $273,779 Net Loss in Third Qtr. Ended March 31 ------------------------------------------------------------------ Avensys Corp. reported a net loss of $273,779 on revenues of $5,780,795 for the third quarter ended March 31, 2008, compared with net income of $32,067 on revenues of $4,428,989 in the same period ended March 31, 2007. The gross margin of $2,005,940 for the quarter was 34.7% of the compaany's consolidated revenues compared to $1,595,707 and 36.0%, respectively, for the same period the previous year. The reduction in the gross margin over the previous year occurred because of substantial increases in sales of lower margin products at the Avensys Tech division. The company's operating loss of $535,911 for the quarter compares to $263,302 for the previous year. This can be attributed to the continued increase in R&D expenses. R&D expenses have increased by 59.4% for the three months ended March 31, 2008, as compared to the previous year. Other expenses for the three month period ended March 31, 2008, increased by $251,063 to $358,846 compared with the same period in the previous year. There was a significant reduction in debenture and preferred shares accretion for the three month period of $353,663, which was partially offset by a large decrease of $772,771 in income from the change in fair value of derivative financial instruments. Termination of Technology License Agreement with iMetrik On Feb. 6, 2008, the Technology License Agreement between the company's subsidiary C-Chip Technologies (North America) and its business partner iMetrik Inc. was terminated. Subsequent to Dec. 31, 2007, no further royalties are payable to C-Chip and the outstanding balance of the C-Chip loan from iMetrik was forgiven as of the same date. As a result, the company has recognized a gain of $351,059 (included in discontinued operations) during the third quarter, on the forgiveness of the loan. This amount represented the outstanding balance of the loan at Dec. 31, 2007. In terminating the Technology License Agreement, the company ceased to operate C-Chip, and ceased to derive any cash flows from the prior C-Chip activities which, starting in the third quarter of fiscal 2008, were classified as discontinued operations. Liquidity and Capital Resources Historically, operations of the company have been financed primarily from cash on hand, from the sale of common shares or the sale of convertible debentures. As of March 31, 2008, the company had working capital surplus of $1,333,996 compared to a working capital surplus of $1,610,635 at Dec. 31, 2007, and $596,801 at June 30, 2007, a decrease of $276,639 from Dec. 31, 2007, and an increase of $737,195 from June 30, 2007. Net cash used in operating activities of continuing operations during the three month period totaled $614,591, as compared with net cash used of $1,008,508 for the same period last year. This improvement is primarily attributable to the growth in sales. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $20,747,874 in total assets, $12,839,832 in total liabilities, $8,038 in non-controlling interest, and $7,900,004 in total stockholders' equity. 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?2f06 Going Concern Doubt As reported in the Troubled Company Reporter on Oct. 4, 2007, Montreal, Canada-based Raymond Chabot Grant Thornton LLP expressed substantial doubt about Manaris Corp. nka. Avensys Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended June 30, 2007. The auditor pointed to the company's significant losses since inception and reliance on non-operational sources of financing to fund operations. About Avensys Corp. Headquartered in Montreal, Canada, Avensys Corp. fka. Manaris Corp. (OTC BB: AVNY) -- http://www.avensyscorporation.com/-- operates Avensys Inc., its wholly-owned core subsidiary. Avensys Inc., through its manufacturing division Avensys Technologies, designs, manufactures, distributes, and markets high reliability optical components and modules as well as FBGs for the telecom market and high power devices and sub-assemblies for the industrial market. Avensys Technologies also develops packaged fiber-based sensors. Avensys Environmental Solutions, also a division of Avensys Inc., provides environmental monitoring solutions for air, water and soil in the Canadian marketplace. AVIS BUDGET: S&P Chips Corporate Credit Rating to BB from BB+ ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Avis Budget Group Inc., including lowering the corporate credit rating to 'BB' from 'BB+'. All ratings remain on CreditWatch with negative implications, where they were originally placed on Jan. 25, 2008. "The rating actions are based on the company's reduced earnings guidance," said Standard & Poor's credit analyst Betsy Snyder. "Ratings remain on CreditWatch because weaker demand caused by reduced domestic airline capacity and passengers beginning in September 2008 could result in sustained earnings pressure." At the same time, our concerns pertaining to refinancing risk have been alleviated somewhat by a financing the company completed earlier this year. Parsippany, New Jersey-based Avis Budget, the parent of the Avis and Budget car rental brands, is one of three large participants in the U.S. on-airport car rental segment. The company said that its second-quarter earnings will be below those of the prior-year period because of weaker-than-expected passenger enplanements, lower commercial travel business, and lower pricing. This follows a first-quarter loss of $12 million, compared with a profit of $12 million in the prior-year period. In addition, U.S. airlines have announced domestic capacity reductions of at least 10% beginning in September. As a result, the company now expects full-year 2008 pretax earnings of about $140 million, which is below the $203 million (excluding a $1.2 billion noncash pretax charge taken for goodwill impairment) reported in 2007. In addition, while the company has not yet experienced a decline in proceeds from disposition of vehicles, it could if the weak used-car market is sustained. As a result, consolidated debt to EBITDA, now in the mid-4x area, is likely to increase. S&P's earlier concerns regarding liquidity and access to financings have been alleviated somewhat. At March 31, 2008, the company had $219 million of cash and $1 billion available under its $1.5 billion revolving credit facility that matures in 2011 ($454 million was utilized for letters of credit). In February 2008, the company entered into a new $800 million vehicle-backed facility that it used to fund its peak vehicle spending needs. In addition, the company has a $1.5 billion vehicle-backed bank conduit facility. Standard & Poor's will assess the company's expected financial performance from a reduced level of domestic airline capacity and enplanements, the weaker economy, and the outlook for proceeds from vehicle sales to resolve the CreditWatch. B&B RESTAURANT: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: B&B Restaurant Ventures, LLC dba Fox Sports Grill 4195 E. Thousand Oaks Blvd., Ste. 101 Westlake Village, CA 91362 Bankruptcy Case No.: 08-14525 Debtor-affiliate filing a separate Chapter 11 petition: Entity Case No. ------ -------- B&B Restaurant Holdings, LLC 08-14527 aka Fox Sports Grill Type of Business: The Debtors develop and operate the FOX Sports Grill chain, which offers a menu of appetizers, sandwiches, burgers, and steaks in an atmosphere showing sporting events through televisions. See http://www.foxsportsgrill.com/ Chapter 11 Petition Date: July 2, 2008 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtors' Counsel: Garrick A Hollander, Esq. Email: jmartinez@winthropcouchot.com Tel: (949) 720-4150 Marc J. Winthrop, Esq. Tel: (949) 720-4100 Email: pj@winthropcouchot.com Winthrop Couchot 660 Newport Center Dr., Ste. 400 Newport Beach, CA 92660 Fax: (949) 720-4111 http://winthropcouchot.com/ B&B Restaurant Ventures, LLC's Financial Condition: Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million A copy of B&B Restaurant Ventures, LLC's petition is available for free at http://bankrupt.com/misc/cacb08-14525.pdf A copy of B&B Restaurant Holdings, LLC's petition is available for free at http://bankrupt.com/misc/cacb08-14527.pdf BALLYROCK ABS: Moody's Cuts Rating of $56.2MM Notes to Caa3 ----------------------------------------------------------- Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings of these notes issued by Ballyrock ABS CDO 2007-1, Limited: Class Description: $17,000,000 Class S Senior Secured Notes Due 2014 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: $150,000,000 Class A-1a Variable Funding Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Baa3, on review for possible downgrade Class Description: $150,000,000 Class A-1b Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: $56,250,000 Class A-2 Senior Secured Floating Rate Notes Due 2047 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade Moody's explained that the rating actions reflect the deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities, as well as the negative action taken by Moody's on the Insurance Financial Strength rating of Ambac Assurance Corporation, which acts as GIC provider in the transaction. On June 19, 2008 Moody's downgraded its rating of Ambac Assurance Corporation to Aa3. Ballyrock ABS CDO 2007-1, Limited is a managed synthetic transaction referencing a pool of structured finance securities. It was originated in July, 2007. BAYOU GROUP: Fugitive Executive Surrenders to Authorities --------------------------------------------------------- Samuel Israel III, convicted Bayou Group LLC executive, turned himself in to authorities yesterday after almost a month of going fugitive and hiding from federal investigators to avoid going to prison, various reports relate. Mr. Israel was to serve his 20-year prison sentence and scheduled to report to a Massachusetts penitentiary on June 9. He was sentenced last month by a New York federal judge and was ordered to pay restitution of $300 million for duping investors of more than $450 million through false misrepresentation of Bayou Group's financial condition. As reported in the Troubled Company Reporter on June 25, 2008, on the surrender date, authorities found his sports utility vehicle abandoned on a bridge over the Hudson River in New York, with the words "Suicide is Painless" on the hood of the vehicle. Police scoured the area, but no signs of his body were found, leading police to suspect that the suicide attempt was a hoax and that Mr. Israel was on the run. Mr. Israel's girlfriend Debra Ryan was also arrested by investigators for helping him escape. According to Bloomberg News, the Bayou Group founder rode in his Yamaha scooter and turned himself in to police at Southwick, Massachusetts. He was denied permission by the U.S. District Judge Michael Ponsor to be sent directly to Fort Devens, where medical treatment was available for him. He said he needed daily medical attention, says Bloomberg. Federal prosecutors were not exactly sure why he surrendered. Bloomberg relates that Mr. Israel had been staying in nearby campgrounds and apparently decided to surrender while talking with his mother on the phone, Southwick police testified. Mr. Israel's prison term could be extended after being charged with bail-jumping, Bloomberg notes. About Bayou Group Based in Chicago, Illinois, Bayou Group LLC operates and manages hedge funds. The company and its affiliates filed for chapter 11 protection on May 30, 2006 (Bankr. S.D.N.Y. Lead Case No. 06- 22306) in order to pursue recoveries for the benefit of defrauded investors. Elise Scherr Frejka, Esq., at Dechert LLP, represents the Debtors in their restructuring efforts. Joseph A. Gershman, Esq., and Robert M. Novick, Esq., at Kasowitz, Benson, Torres & Friedman, LLP, represent the Official Committee of Unsecured Creditors. Kasowitz, Benson, Torres & Friedman LLP is counsel to the Unofficial Committee of the Bayou Onshore Funds. Sonnenschein Nath & Rosenthal LLP represents certain investors. When the Debtors filed for protection from their creditors, they reported estimated assets and debts of more than $100 million. Bayou also filed lawsuits against former investors who allegedly received fictitious profits and an inequitably large return of their principal investments. Jeff J. Marwil, Esq., at Jenner & Block, was appointed on April 28, 2006, as the federal equity receiver. As reported in the Troubled Company Reporter on April 16, 2008, Bayou Group and its debtor-affiliates delivered 47 adversary complaints to the Honorable Adlai S. Hardin Jr. of the U.S. Bankruptcy Court for the Southern District of New York, seeking to recover certain fraudulent transfers made by investors against the Debtors. The Bayou entities include Bayou Management LLC, Bayou Advisors LLC, Bayou Equities LLC, Bayou Fund LLC, Bayou Superfund, Bayou No Leverage Fund LLC, Bayou Affiliates Fund LLC, and Bayou Accredited Fund LLC. The Debtors related that these adversary proceedings arose from a massive fraudulent investment scheme committed by the Bayou entities, which controlled private pooled investment hedge funds. BEAR STEARNS: Value of Collateral for Fed Bailout Loan Drops ------------------------------------------------------------ The Wall Street Journal's Sudeep Reddy reports that the value of the Bear Stearns Cos. assets the Federal Reserve Bank of New York agreed to accept to facilitate the investment bank's sale to J.P. Morgan Chase in March 2008 has dropped by $1,000,000,000 from the estimated value at the time of the deal. The assets declined to $28,900,000,000 from $30,000,000,000 in mid-March, Mr. Reddy reports, but the decline is not yet enough to put U.S. taxpayers on the hook for any losses. As part of the deal, JPMorgan committed $1,150,000,000, which would cover the first losses from any decline in the assets' value, the Journal says. The Journal relates that the Fed late in June contributed $28,800,000,000 to a newly created firm, Maiden Lane LLC, to finance the deal. According to the Journal, Fed Chairman Ben Bernanke has said that the Fed's adviser, BlackRock Inc., is "reasonably confident that we will be able to recover the full amount if we dispose of these assets on a measured basis, rather than to sell them all at once." Mr. Bernanke even added that the Fed may even turn a profit, the Journal continues. The Fed plans to release an updated value of the portfolio quarterly, the Journal notes. The Journal notes that direct borrowing by investment banks under the Fed's primary dealer credit facility dropped to an average of $1,740,000,000 a day in the week ending July 2, down from $6,100,000,000 in the prior week. Total borrowing outstanding as of July 2 had dropped to zero, the Journal adds. The Journal also relates that borrowing by commercial banks averaged $14,860,000,000 a day during the week under the Fed's primary credit program, up slightly from $14,700,000,000 a day in the prior week. Bear stockholders approved the investment bank's merger with JPMorgan at a special meeting held May 29, 2008, the Troubled Company Reporter has said. The Journal valued the transaction to about $1,400,000,000. Bear's market capitalization was $25,000,000,000 in early 2007 before its demise. The TCR said JPMorgan and Bear scheduled the merger to close at the end of the day on May 30, 2008. Upon completion of the merger, each outstanding share of common stock of Bear was converted into the right to receive 0.21753 shares of JPMorgan common stock, and Bear would become a direct subsidiary of JPMorgan. As disclosed in the Troubled Company Reporter on March 25, 2008, JPMorgan and Bear amended the terms of the merger agreement, increasing the bid from $2 per share to $10 per share. A week before the amended pact, JPMorgan agreed to buy Bear for $2 per share totaling $236,000,000 based on the number of shares outstanding as of Feb. 16, 2008. At March 14's close, Bear Stearns' stock-market value was about $3,500,000,000, and the company finished at $30 a share in 4 p.m. New York Stock Exchange composite trading March 14, 2008. Between April 11 and April 14, JPMorgan acquired 3,298,600 shares of Bear Stearns common stock in the open market for an aggregate purchase price of $33,154,017. As of April 14, 2008, JPMorgan Chase beneficially owned 119,855,914 shares of common stock, or approximately 49.78% of the outstanding shares of common stock of Bear Stearns. About JPMorgan JPMorgan Chase & Co. (NYSE: JPM) -- http://www.jpmorganchase.com/ -- is a global financial services firm with assets of $1.6 trillion and operations in more than 60 countries. The firm focuses in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its JPMorgan and Chase brands. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- is a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The company's core business lines include institutional equities, fixed income, investment banking, global clearing services, asset management, and private client services. The company has approximately 14,000 employees worldwide. * * * As reported in the Troubled Company Reporter on Dec. 28, 2007, Fitch Ratings' affirmed its Negative Outlook for The Bear Stearns Companies Inc. following the announcement of the company's fiscal year earnings for 2007. On Nov. 14, 2007, Fitch affirmed Bear Stearns' long-term credit ratings, along with its subsidiaries. Fitch also downgraded the short-term rating to 'F1' from 'F1+', and Individual rating to 'B/C' from 'B'. BEARD COMPANY: March 31 Balance Sheet Upside-Down by $6.3 MM ------------------------------------------------------------ The Beard Company's consolidated balance sheet at March 31, 2008, showed $2,664,000 in total assets and $9,001,000 in total liabilities, resulting in a $6,337,000 total shareholders' deficit. At March 31, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,694,000 in total current assets available to pay $3,044,000 in total current liabilities. The company reported net earnings of $2,768,000 on revenues of $378,000 for the first quarter ended March 31, 2008, compared with a net loss of $573,000 on revenues of $318,000 in the same period last year. The primary reason for the improvement in results is the sale, effective Feb. 1, 2008, of 35% of the company's interest in the McElmo Dome CO2 field resulting in a gain of $3,344,000. 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?2f07 Going Concern Doubt As reported in the Troubled Company Reporter on April 23, 2008, Cole & Reed, P.C., in Oklahoma City, expressed substantial doubt about The Beard Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. Cole & Reed pointed to the company's recurring losses and negative cash flows from operations. About The Beard Company Based in Oklahoma City, The Beard Company (OTC BB: BRCO) http://www.beardco.com/-- through its subsidiaries, is principally engaged in coal reclamiation in the United States. It operates in four segments: Coal Reclamation, Carbon Dioxide, e-Commerce, and Oil and Gas. BELDEN & BLAKE: Posts $11.6 Million in 2008 First Quarter --------------------------------------------------------- Belden & Blake Corp. reported a net loss of $11.6 million for the first quarter ended March 31, 2008, compared with a net loss of $23.3 million in the same period last year. Net operating revenues increased from $29.5 million in the first quarter of 2007 to $34.3 million in the first quarter of 2008. The increase was primarily due to higher oil and gas sales revenues of $4.6 million. For the three months ended March 31, 2008, total cost and expenses were $47.8 million, as compared to $62.2 million during the same period last year. Derivative fair value loss was $42.2 million in the first quarter of 2007 compared to a loss of $26.8 million in the first quarter of 2008, which is net of a $31.7 million gain associated with the adoption of SFAS 157 in 2008. The derivative fair value loss reflects the changes in fair value of certain derivative instruments that are not designated or do not qualify as cash flow hedges. Interest expense decreased $51,000 from $5.9 million in the first quarter of 2007 to $5.8 million in the first quarter of 2008. This decrease was due to lower blended interest rates partially offset by an increase in outstanding debt. Income tax benefit decreased from a benefit of $15.2 million in the first quarter of 2007 to a benefit of $7.6 million in the first quarter of 2008. The decrease was primarily due to a decrease in the loss before income taxes. Liquidity and Capital Resources During the first quarter of 2008, the company's working capital decreased $8.3 million from a deficit of $14.2 million at Dec. 31, 2007, to a deficit of $22.5 million at March 31, 2008. The decrease was primarily due to an increase in the current liability related to the fair value of derivatives of $21.5 million. The company currently expects to spend approximately $36.7 million during 2008 on drilling activities and other capital expenditures. The company intends to finance these planned capital expenditures through cash on hand, available operating cash flow and borrowings under its revolving credit facility. At March 31, 2008, the company had cash of $12.8 million and approximately $12.6 million available under its revolving facility. Balance Sheet At March 31, 2008, the company's consolidated balance sheet showed $780.8 million in total assets, $687.8 million in total liabilities, and $93.0 million in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, also showed strained liquidity with $62.9 million in total current assets available to pay $85.4 million in total current liabilities. 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?2f08 About Belden & Blake Headquartered in Houston, Texas, Belden & Blake Corporation -- http://www.beldenblake.com/-- is an independent energy company engaged in producing oil and natural gas; exploring for and developing oil and gas reserves; acquiring and enhancing the economic performance of producing oil and gas properties; and marketing and gathering natural gas for delivery to intrastate and interstate gas transmission pipelines. Operations are conducted entirely in the United States. * * * To date,Belden & Blake Corp. still carries Moody's Caa2 senior secured debt and Caa1 corporate family ratings assigned on April 5, 2005. Outlook is stable. BROTMAN MEDICAL: Has Until July 21 to File Chapter 11 Plan ---------------------------------------------------------- The Hon. Sheri Bluebond of the United States Bankruptcy Court for the Central District of California further extended the exclusive periods of Brotman Medical Center Inc. to: a) file a Chapter 11 plan until July 21, 2008, and b) solicit acceptances of that plan until Sept. 19, 2008. The Debtor told the Court that it was not in a position to file a proposed Chapter 11 plan before the initial exclusivity period expired pursuant to Section 1121 of the Bankruptcy Code. The Debtor said it needs more time to consider and explore available alternatives that would lead to a consensual resolution of its case. The Debtor has entered into a letter of intent with a potential purchaser to acquire certain of the Debtor's assets. Moreover, the Debtor reached agreement with a lender to provide financing the Debtor's existing debtor-in-possession financing. The Debtor is poised to move forward with these transactions. About Brotman Medical Headquartered in Culver City, California, Brotman Medical Center Inc. -- http://www.brotmanmedicalcenter.com/-- provides range of inpatient and outpatient services, as well as rehabilitation, psychiatric care and chemical dependency. The company filed for Chapter 11 protection on Oct. 25, 2007 (Bankr. C.D. Calif. Case No. 07-19705). Courtney E. Pozmantier, Esq., and Stacia A. Neeley, Esq., at Klee, Tuchin, Bogdanoff & Stern, L.L.P., serve as the Debtor's counsel. The Debtor selected Kurztman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 16 appointed nine creditors to serve on a Official Committee of Unsecured Creditors in this case. Buchalter Nemer represents the Creditors Committee. When the Debtor filed for protection against its creditors, it listed assets and debts between $1 million and $100 million. CABLEVISION SYSTEMS: Fitch Holds 'B+' Rating on Series of Buyout ---------------------------------------------------------------- Fitch Ratings has affirmed the 'B+' Issuer Default Rating assigned to Cablevision Systems Corporation and its wholly owned subsidiary CSC Holdings, Inc. and has revised its Rating Outlook to Stable from Negative. In addition, Fitch has affirmed specific issue ratings and recovery ratings assigned to CVC and CSC as outlined below. Approximately $11.6 billion of debt as of March 31, 2008 is affected by Fitch's action. Fitch's rating action was precipitated by a series of acquisitions, investments and financing transactions announced by CVC including the acquisition of Sundance Channel LLC, acquiring a 97% interest in Newsday LLC, and incremental capital investments related to the construction of a wireless data network and the renovation of Madison Square Garden. With the acquisition of Newsday, CVC capitalizes on the relatively unique opportunity to purchase a newspaper whose circulation is within its cable service territory. The Newsday acquisition positions CVC to grow its advertising business by adding a print advertising platform to its business model, which provides opportunities to create revenue synergies by cross selling print, television, and online advertising to its local advertiser base. Moreover integrating more local content can further distinguish Cablevision's service offering from its competition. However Fitch continues to be concerned with secular issues within the Newspaper sector namely declining circulation trends and negative pricing environment of newspaper advertising brought on by the continuing migration of readers and advertisers to online sources. Fitch believes that stabilizing the operating trends at Newsday and realizing meaningful synergies with CVC's existing business may prove difficult and the incremental free cash flow generation prospect is limited. The capital requirement associated with the WI - FI mesh network and the renovation of Madison Square Garden is expected to be approximately $850 million and will certainly pressure near term free cash flow generation. From Fitch's perspective the WI - FI service is a defensive strategy aimed at retaining customers in light of increasing competitive pressures principally from Verizon Communications, Inc. The WI - FI network will be capable of producing speeds of up to 1.5 Mbps, which is comparable to current wireless data network speeds, however the service will have limited applications primarily due to the lack of mobility. Fitch believes event risk surrounding CVC's acquisition and investment strategy, as well as its financial policies related to the allocation of capital to CVC shareholders is expected to remain a key rating consideration as CVC's management is on record stating that the company will continue to explore ways to increase and retain shareholder value through acquisitions and or shareholder friendly activities. However, the Stable Rating Outlook reflects the overall strengthening of CVC's credit profile as consolidated leverage has improved from approximately 7.4 times to approximately 5.5x as of the LTM period ended Mar. 31, 2008. In Fitch's opinion CVC's credit profile has sufficient financial flexibility relative to the current rating category to potentially accommodate such strategies and management decisions in a credit neutral manner. Fitch points out that from an operational perspective, CVC's cable segment ranks amongst the highest in the industry and is expected to drive further improvement in CVC's credit profile. Overall, Fitch's ratings for CVC continue to reflect the company's strong competitive position and the operating and cost efficiencies derived from CVC's tightly clustered subscriber base, as well as the company's growing revenue diversity owing to the success of CVC's triple play service offering. Fitch does expect, however that revenue generating unit growth rates will decline, as growth prospects within the company's traditional triple play service offering diminish due to industry leading service penetration rates. Outside of the risks related to the company's financial and investment strategies, ratings concerns center on CVC's ability to maintain its relative competitive position given the changing competitive and economic environment, growing retail revenues beyond its core "Triple Play" service offering, and the company's high leverage profile relative to its peer group. Fitch expects competitive pressures to escalate as Verizon Communications, Inc. application to provide video service to all five boroughs of the city has received approval from New York City's Franchise and Concession Review Committee. In addition the refinancing risk attributable to CVC's credit profile is elevated as approximately $2.3 billion of debt is scheduled to mature before year end 2009. CVC maintains bank facilities at CSC Holdings for the restricted group and at Rainbow National Services within the unrestricted group. However Fitch believes that available liquidity from the respective revolvers coupled with free cash flow generation may not be sufficient to meet scheduled debt repayment obligations. Fitch notes that this risk is mitigated somewhat by the company's historical strong access to capital and bank markets. Factors that would lead to an upgrade of CVC's IDR include further strengthening of the company's credit profile and continued demonstration that the company's operating profile will not materially decline during the near term in the face of competition and slowing economic conditions. Moreover, key considerations also include accommodating non core acquisitions, and investments in a credit neutral manner, the absence of other leveraging transactions, and meaningful progress on refinancing near term scheduled maturities. Fitch has affirmed the following ratings for CVC: -- IDR 'B+'; -- Sr. Unsecured Debt 'CCC+/RR6' Fitch has affirmed these ratings for CSC: -- IDR 'B+'; -- CSC Sr. Secured Bank Facility - 'BB/RR1'; -- Sr. Unsecured Debt 'BB-/RR3'. The Rating Outlook is revised to Stable from Negative. CENTRE SQUARE: S&P Trims Three CDO Ratings to CC from CCC --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes from Centre Square CDO Ltd., a cash flow collateralized debt obligation of CDO transaction that was collateralized at origination primarily by notes from other CDOs, as well as by tranches from residential mortgage-backed securities and other structured finance transactions. S&P also placed one of the lowered ratings on CreditWatch negative. The 'CC' ratings on the class B, C, and D notes are unaffected by these actions. The rating actions reflect continued deterioration in the credit quality of the RMBS backing the rated notes. Ratings Lowered Centre Square CDO Ltd. Rating ------ Class To From ----- -- ---- A-2A CC CCC A-2B CC CCC A-3 CC CCC- Rating Lowered and Placed on Creditwatch Negative Centre Square CDO Ltd. Rating ------ Class To From ----- -- ---- A-1 CCC/Watch Neg BBB- Other Outstanding Ratings Centre Square CDO Ltd. Class Rating ----- ------ B CC C CC D CC CHARTER COMMS: Moody's Affirms Caa1 Corporate Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed Charter Communications Inc.'s Caa1 corporate family rating and its Caa2 probability of default rating, and assigned a Caa2 rating to $364 million of 10.25% senior unsecured notes due 2013 being issued by Charter's indirect subsidiaries, CCH II, LLC and CCH II Capital Corp, in exchange for $338 million of 10.25% senior unsecured CCH II notes due 2010. Moody's also upgraded the CCO Holdings, LLC senior secured term loan credit facility to B3 from Caa1, and affirmed all other ratings. The rating outlook remains stable. Moody's has taken these rating actions: Charter Communications, Inc. -- Corporate Family Rating -- Affirmed, Caa1 -- Probability-of-default Rating -- Affirmed, Caa2 -- Senior unsecured notes -- Affirmed, Ca (LGD5 -- 87%) Charter Communications Holdings, LLC -- Senior unsecured notes -- Affirmed, Ca (LGD5 -- 85%, changed from LGD5 -- 84%) CCH I Holdings, LLC -- Senior unsecured notes -- Affirmed, Caa3 (LGD5 -- 77%) CCH I, LLC -- Senior secured notes -- Affirmed, Caa3 (LGD4 -- 60%, changed from LGD4 -- 59%) CCH II, LLC -- New Senior notes due 2013 -- Assigned Caa2 (LGD3 -- 42%) -- Senior notes -- Affirmed, Caa2 (LGD3 -- 42%) CCO Holdings, LLC -- Senior notes -- Affirmed, Caa1 (LGD3 -- 34%, changed from LGD3 -- 33%) -- Senior secured (1st lien - stock only) Term Loan -- Upgraded to B3 (LGD2 -- 29%), from Caa1 (LGD3 -- 33%) Charter Communications Operating, LLC -- Senior secured (2nd lien - all assets) notes -- Affirmed, B3 (LGD2 -- 23%) -- Senior secured (1st lien - all assets) Revolver & Term Loan -- Affirmed, B1 (LGD1 -- 6%) -- Rating Outlook -- Stable -- Speculative Grade Liquidity Rating -- Affirmed, SGL-3 Moody's perceives the just completed debt exchange offer to have no meaningful impact on the company's credit profile, although Charter Communication has modestly enhanced its medium-term liquidity in the process by extending maturities for a small portion of the $2.2 billion of debt coming due in 2010. "A fundamental mismatch between Charter Communication's liability structure and its business model continues to persist and drive the company's credit risk profile," Russell Solomon, Moody's senior vice president, noted. Charter Communication's ratings continue to reflect a high probability of default, as evidenced by the Caa2 probability of default rating, albeit with an above-average recovery expectation for the corporate family as a whole. Notwithstanding Charter Communication's balance sheet challenges, the debt exchange and the new debt issuances completed in March 2008 continue to provide evidence of the company's access to the debt capital markets, albeit on a more limited basis than anticipated. The company has been able to opportunistically enhance near-to- intermediate term liquidity over the past few years by effecting various debt exchanges, refinancings and asset sales, mitigating the risk of what might otherwise have been a larger requisite restructuring following an actual payment default in the absence thereof. In recent periods, such liquidity-enhancing transactions benefited from noteworthy improvements in operating performance, albeit off of a historically depressed base. Moody's believes that the inevitable right-sizing of the company's balance sheet liabilities may finally be precipitated by the large scale refinancing need which still looms in 2010, particularly in consideration of the increasingly limited options available for the company to introduce structurally senior replacement obligations as has been done in the past. The upgrade of CCO Holdings' credit facility reflects Moody's revised loss-given default estimates, primarily due to the elimination of the previously assigned deficiency claim related to the pledged stock of subsidiary Charter Communications Operating, LLC. Moody's believes that residual value from Charter Operating would likely benefit creditors in the CCO Holdings' credit facility, resulting in slightly higher recovery estimates than senior unsecured creditors at the same entity, and correspondingly lower expected loss of a sufficient magnitude to warrant a higher rating at this time. Headquartered in St. Louis, Missouri, Charter Communications is a domestic multiple system cable operator serving approximately 5.2 million basic video subscribers and 5.6 million customers. CHESAPEAKE CORP: EBITDA Decline Prompts S&P to Cut Rating to B -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Chesapeake Corp. and placed these ratings on CreditWatch with negative implications. The corporate credit rating was lowered to 'B' from 'B+'. "The downgrade and CreditWatch listing reflect EBITDA declines during the past several quarters and our expectations that challenging market conditions could further weaken the company's ability to achieve targeted earnings during the next few quarters, which could pressure the company's ability to comply with financial covenants under its credit agreement," said Standard & Poor's credit analyst Andy Sookram. In addition, the company's plan to refinance its $250 million revolving credit facility due February 2009 has been delayed because of certain issues relating to the Fox River environmental matter, which has created refinancing risk. The company's credit agreement stipulates a leverage ratio of 6.25x for the quarter ended June 30, 2008, which steps down to 5.5x for the quarter ending Dec. 31, 2008. In addition, S&P expect the company to face limited cushion in its interest coverage covenant, which steps up to 1.75x for the quarter ending Sept. 30, 2008. In resolving the CreditWatch listing, S&P will consider the near- term operating prospects for the company, including its refinancing plans, the impact on its credit profile of potential asset sales, and overall liquidity position. CHRYSLER LLC: Appoints Rae as EVP, Combines HR & Employee Depts. ---------------------------------------------------------------- Chrysler LLC disclosed the appointment of Nancy Rae, Executive Vice President -� Human Resources and Communications, to lead the integration of the company's Human Resources, Employee Relations and Communications functions into one organizational structure. Ms. Rae was formerly Senior Vice President �- Human Resources and Corporate Communications. "In alignment with Chrysler LLC's long-term strategy, to create organizational synergies and to provide a greater focus on our strategic levers of Leadership Development, Operational Excellence, Labor Cost Management and the Management of Human Capital, we are pleased to appoint Nancy to lead this important effort," Bob Nardelli, Chairman and CEO, Chrysler LLC, said. "With more than 30 years of Company experience, she is a true leader in transformational change." To facilitate the acceleration of the organizational realignment of Human Resources and Employee Relations, John Franciosi announced his intention to retire Sept. 30, 2008. "John has made significant contributions to this company during some of its most challenging times," Mr. Nardelli said. "We appreciate the leadership he has demonstrated during his 31 years of dedicated service." "During times of great change, we have appreciated our working relationship with John and his contributions to Chrysler," General Holiefield, Vice President, United Auto Workers, responsible for Chrysler LLC, said. "We look forward to a productive relationship with the company in the future." With Mr. Franciosi's departure, Al Iacobelli - Vice President of Employee Relations, is realigned to report to Ms. Rae. The position of Senior Vice President - Employee Relations will be eliminated. Reporting to Mr. lacobelli are: * James Fenton who is appointed Director � Labor Economics & Benefit Finance; * Fred Martino-DiCicco, Director � Employee Relations Operations; * Glenn Shagena, Director � Manufacturing HR/ER; * Angel Munoz, Director � Chrysler de Mexico HR/ER; * Michael Brown, Director � UAW / Chrysler National Training Center; and * Michael Jessamy, Director � Health and Safety. In addition, Lori McTavish is appointed Executive Director � Communications, and continues to report to Ms. Rae. Ms. McTavish was formerly Director - Corporate and Internal Communications. In this position, Ms. McTavish will be responsible for developing and executing Chrysler LLC's communications strategy and initiatives for all internal and external audiences for all aspects of the Company�s corporate, product and brand, design, advanced technologies, and sales and marketing messages. Reporting to Ms. McTavish are: * Richard Deneau, Director � Product and Brand Communications; * William Dawson, Senior Manager � Executive Communications; * Shawn Morgan, Senior Manager � Corporate Business Affairs Communications; and * Stuart Schorr, Senior Manager � Sales, Dealer and Mopar Communications. About Chrysler 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 June 24, 2008, Moody's Investors Service affirmed the B3 Corporate Family Rating and Probability of Default Rating of Chrysler LLC, but changed the outlook to negative from stable. The change in outlook reflects the increasingly challenging environment faced by Chrysler as the outlook for US vehicle demand falls, and as high fuel costs drive US consumers away from light trucks and SUVs, and toward more fuel efficient vehicles. Standard & Poor's Ratings Services is placing its corporate credit ratings on the three U.S. automakers, General Motors Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with negative implications, citing the need to evaluate the financial damage being inflicted by deteriorating U.S. industry conditions--largely as a result of high gasoline prices. Included in the CreditWatch placement are the finance units Ford Motor Credit Co. and DaimlerChrysler Financial Services Americas LLC, as well as GM's 49%-owned finance affiliate GMAC LLC. 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. CIMARRON CDO: Moody's Junks Rating of Class C Notes Due 2040 ------------------------------------------------------------ Moody's Investors Service has downgraded and left on review for possible further downgrade the ratings on these notes issued by Cimarron CDO, Ltd.: Class Description: Class A-2 Second Priority Senior Secured Floating Rate Notes due 2040 -- Prior Rating: Aa1, on review for possible downgrade -- Current Rating: A2, on review for possible downgrade Class Description: Class A-3 Third Priority Senior Secured Floating Rate Notes due 2040 -- Prior Rating: Aa3, on review for possible downgrade -- Current Rating: Baa1, on review for possible downgrade Class Description: Class B Senior Secured Deferrable Fixed Rate Notes due 2040 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: B3, on review for possible downgrade Class Description: Class C Junior Secured Deferrable Fixed Rate Notes due 2040 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: Caa2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. CLAYTON HOLDINGS: S&P Withdraws Ratings After Greenfield Merger --------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B' corporate credit and senior secured ratings on Shelton, Connecticut-based Clayton Holdings Inc. after the company completed its merger with an affiliate of a fund managed by Greenfield Partners LLC. All amounts outstanding under its existing credit agreement were repaid. CLEAR CHANNEL: Rush Limbaugh Renews Radio Contract, Gets $400 Mil. ------------------------------------------------------------------ Radio talk show host Rush Limbaugh renewed his contract with Clear Channel Communications Inc.'s Premiere Radio Networks and Clear Channel Radio, continuing the syndication of The Rush Limbaugh Show many years into the future. The Wall Street Journal's Sarah McBride reports that Mr. Limbaugh's $400 million 8-year contract is a far cry from his 2001 contract, which paid him $285 million. According to a press release, the deal also includes continued syndication of The Rush Limbaugh Morning Update, a 90-second commentary that airs Monday through Friday. Furthermore, Premiere Radio, in partnership with Mr. Limbaugh, will continue to oversee The Limbaugh Letter, a monthly newsletter with a subscriber base in the hundreds of thousands, and RushLimbaugh.com, one of the most popular broadcast media websites that incorporates Rush247.com, a subscription service. "This is exactly where I want to be, doing what I was born to do, with an amazing audience and phenomenal support from affiliate stations and sponsors," Mr. Limbaugh stated. "I'm having more fun than a human being should be allowed to have. There's a relationship between the audience and the host here that is second to none. We're going to continue to provide Broadcast Excellence and have a lot of fun along the way." WSJ relates that radio networks are scrambling to keep indispensable radio personalities amid the battle for a greater margin in a fragmented entertainment market. National radio star Ryan Seacrest recently signed a pact with Premiere giving him control over advertising on one of his shows. The press release recounts that advertiser and affiliate demand is at an all-time high for Mr. Limbaugh. "The Rush Limbaugh Show enjoys an unprecedented platform of radio affiliates," President of Premiere Radio Networks Charlie Rahilly stated. "Plus, advertisers harness the intensity of listener engagement -- no one's 'word of mouth' about a product or service delivers more impact than Mr. Limbaugh's. The Premiere team is proud to partner with Mr. Limbaugh deep into the next decade." "Broadcasters of Rush's quality come along once in a lifetime," Clear Channel Radio President and CEO John Hogan commented. "We're privileged to continue our relationship which is unprecedented in the history of our industry." In addition, The Rush Limbaugh Show will reach a radio milestone this August -- the 20th anniversary of America's most-listened-to radio program. The Rush Limbaugh Show is the highest rated national radio talk show in America. Known as the media pundit who reshaped the political landscape with his entertaining and informative brand of conservatism, Mr. Limbaugh is also widely credited with resuscitating AM radio by many industry experts. He has been recognized for his achievements with Marconi Awards for "Syndicated Radio Personality of the Year" in 1992, 1995, 2000 and 2005 from the National Association of Broadcasters. In 1993, he was inducted into the Radio Hall of Fame and in 1998, into the National Association of Broadcasters Hall of Fame. WSJ, citing Arbitron Inc., observes that radio has roughly 93% listeners of the population each week, who tune in an average of about 18.5 hours, a decline from just over 22 hours per week 10 years ago. Radio advertising, including on radio Internet sites, reached $21.3 billion in 2007, a decrease from $21.7 billion in 2006. About Clear Channel Communications San Antonio, Texas-based Clear Channel Communications Inc. (NYSE: CCU) -- http://www.clearchannel.com/-- is a diversified media company operating in three business segments: radio broadcasting, Americas outdoor advertising, international outdoor advertising, which contributed to 50%, 21%, and 26%, respectively, during the year ended Dec. 31, 2007. The company owns 717 core radio stations, 288 non-core radio stations operating in the United States. It also owns about 209,000 Americas outdoor advertising display faces and approximately 687,000 international outdoor advertising display faces. In addition, it had equity interests in various international radio broadcasting companies. As of Feb. 13, 2008, the company sold 217 non-core radio stations. In March 2008, the company announced that it has completed the sale of its Television Group to Newport Television LLC. * * * As reported by the Troubled Company Reporter on June 20, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on San Antonio, Texas-based Clear Channel Communications Inc. to 'B' from 'B+' based on the proposed financing of the company's pending leveraged buyout by the private equity group co-led by Thomas H. Lee Partners L.P. and Bain Capital Partners LLC. At the same time, S&P removed all the ratings from CreditWatch, where they had been placed with negative implications on Oct. 26, 2006, following the company's announcement that it was exploring strategic alternatives to enhance shareholder value, including a possible sale of the company. The outlook is stable. At the same time, Standard & Poor's assigned its 'B' bank loan rating and '3' recovery rating on Clear Channel's $16.1 billion of new senior secured credit facilities. The '3' recovery rating indicates S&P's expectation for meaningful (50% to 70%) recovery of principal and pre-petition interest in the event of a payment default. S&P also assigned its 'CCC+' rating on the company's $2.3 billion of new senior unsecured notes, with a recovery rating of '6', indicating its expectation for negligible (0% to 10%) recovery in the event of a payment default. At the same time, S&P lowered its rating on the company's $5.1 billion of existing senior unsecured notes to 'CCC+' from 'B-' and assigned a recovery rating of '6' on these issues. The 'B-' rating on the company's existing 8% senior notes due November 2008 at its AMFM Operating Inc. subsidiary remains on CreditWatch with negative implications pending the completion of the company's tender offer for these notes. S&P lowered the rating on Clear Channel's existing $750 million of 7.65% senior notes due 2010 to 'CCC+' from 'B-' and assigned a recovery rating of '6', reflecting the potential for this issue to remain outstanding until maturity. CORPORATE BACKED: S&P Puts 'B' Rating Under Negative CreditWatch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' ratings on class A-1 and A-2 certificates from Corporate Backed Trust Certificates Series 2001-8 on CreditWatch with negative implications. The rating actions follow the June 20, 2008, placement of the long-term corporate credit and other ratings on General Motors Corp. (GM; B/Watch Neg/NR) on CreditWatch negative. Corporate Backed Trust Certificates Series 2001-8 Trust is a pass- through transaction, and the ratings on the certificates are based solely on the rating assigned to the underlying securities, GM's 8.10% debentures due June 15, 2024. The placement of the corporate credit rating and other ratings on GM on CreditWatch negative has no immediate rating impact on the GM-related asset-backed securities supported by collateral pools of consumer auto loans, auto leases, or auto wholesale loans. CROSSWINDS AT LONE STAR: Disclosure Statement Hearing Rescheduled ----------------------------------------------------------------- The Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas postponed the issuance of a ruling on Crosswinds at Lone Star Ranch 1000 Ltd.'s disclosure statement describing its reorganization plan, The Deal's Carolyn Okomo writes. Judge Rhoades, during a July 1, 2008 hearing explained that creditor, AmTrust Bank, had sold the Debtor's largest secured debt for $66.6 million in June 27, The Deal says. The Court moved the disclosure statement hearing to July 30, 2008, The Deal reports. AmTrust counsel, Lynette R. Warman, Esq., at Hunton & Williams LLP, was quoted as saying that the loan was acquired by PCR Land Co., The Deal notes. PCR and Crosswinds, The Deal says, agreed to the postponement of the disclosure statement hearing to allow the new claim holder to get familiar with the bankruptcy case. PCR intends to continue AmTrust's request for relief from stay at the July 30 hearing, court documents revealed, The Deal notes. AmTrust alleged on an April 29 motion that the Debtor had failed to pay postpetition interest payments on its loan, The Deal says. AmTrust also alleged that the Debtor does not have enough equity. AmTrust extended a $44 million first-lien debt to the Debtor for the acquisition of a Frisco 1000 Ltd. property in 2005, The Deal quotes court documents as stating. The Debtor also used $19 million fund from Residential Funding, The Deal adds. Provisions of the Plan The Troubled Company Reporter said on June 12, 2008, that all allowed secured, administrative and priority claims will be paid in full under the plan. General unsecured claims will be paid on a pro rata basis, after satisfaction of all allowed secured claims. Unsecured claims of Residential Funding Company, LLC, will be paid after satisfaction of general unsecured claims. Unsecured subordinated claims will be paid after satisfaction of all other allowed unsecured claims. Interests of equity security will get whatever's left of the fund for distribution to creditors. The Plan will be funded by a $525,000 loan from Lontray Enterprises LLC. Among others, the funds will be used to employ a real estate broker, market the Property for sale, and carry out the orderly sale of the Property and all assets of the Debtor for the highest and best price. Net proceeds will be distributed to Lontray and to the Debtor's creditors. A full-text copy of the disclosure statement and the plan of reorganization is available for free at: http://bankrupt.com/misc/crosswinds_disclosure_plan.pdf About Crosswinds at Lone Star Headquartered in Novi, Michigan, Crosswinds at Lone Star Ranch 1000, Ltd., owns and develops real estate. The company filed for chapter 11 protection on Feb. 4, 2008 (Bankr. E.D. Texas Case No. 08-40262). Frank J. Wright, Esq., at Wright, Ginsberg & Brusilow P.C., represents the Debtor in its restructuring efforts. The U.S. Trustee appointed an Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Debtor disclosed $115,910,022 in total assets and $80,169,235 in total liabilities. CROSSWINDS AT LONE: Wants Additional 90-Days To Solicit Votes ------------------------------------------------------------- Crosswinds at Lone Star Ranch 1000 Ltd. asks the Hon. Brenda T. Rhoades of the United States Bankruptcy Court for the Eastern District of Texas for a 90-day extension of its exclusive period to solicit acceptances of a proposed Chapter 11 plan of reorganization. The Debtor's initial exclusive right to solicit acceptances is set to expire on Aug. 2, 2008. The extension will enable the Debtor to continue its attempt to obtain the highest and best offer for the sale of its property and to resolve any opposition to the confirmation of the plan. As reported in the Troubled Company Reporter on June 12, 2008, the Debtor delivered to the Court a Chapter 11 plan and a disclosure statement describing that plan. Under the plan, Lontray Enterprises will provide at least $525,000 in loan to the Debtor for payment of professional fees and cost to market the Debtor's assets. Several parties have filed objections to the Debtor's plan, including AmTrust Bank, fka Ohio Savings Bank, noting that the disclosure statement failed to provide sufficient information as set forth in Section 1225(a) of the Bankruptcy Code. Among other things, AmTrust Bank pointed out that the disclosure statement did not explain why the Debtor needs to spend at least $430,000 in administrative fees. Thus, AmTrust Bank argued the proposed plan is unconfirmable. The Court has deferred to July 30, 2008, the hearing to consider the adequacy of the Debtor's disclosure statement. The hearing was originally set for July 1. About Crosswinds at Lone Star Headquartered in Novi, Michigan, Crosswinds at Lone Star Ranch 1000, Ltd., owns and develops real estate. The company filed for Chapter 11 protection on February 4, 2008. Frank J. Wright, Esq., at Wright, Ginsberg & Brusilow P.C., represents the Debtor in its restructuring efforts. The U.S. Trustee appointed an Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Debtor disclosed $115,910,022 in total assets and $80,169,235 in total liabilities. CROSSWINDS AT LONE STAR: To Request Permission to Use DIP Fund -------------------------------------------------------------- Crosswinds at Lone Star Ranch 1000, Ltd., intends to ask the Hon. Brenda T. Rhoades of the U.S. Bankruptcy Court for the Eastern District of Texas for permission to access Lontray Enterprises LLC's $525,000 debtor-in-possession fund on a July 30, 2008 hearing, The Deal's Carolyn Okomo says. The Debtor plans to use the DIP facility to finance its reorganization plan, according to The Deal. The Lontray DIP facility matures on either the closing date of the sale of the Debtor's assets or the effective date of the Debtor's reorganization plan, The Deal writes. The DIP facility grants Lontray security on a superpriority basis and holds a 12% interest rate and 15% default rate, The Deal notes. About Crosswinds at Lone Star Headquartered in Novi, Michigan, Crosswinds at Lone Star Ranch 1000, Ltd., owns and develops real estate. The company filed for chapter 11 protection on Feb. 4, 2008 (Bankr. E.D. Texas Case No. 08-40262). Frank J. Wright, Esq., at Wright, Ginsberg & Brusilow P.C., represents the Debtor in its restructuring efforts. The U.S. Trustee appointed an Official Committee of Unsecured Creditors. In its schedules of assets and liabilities, the Debtor disclosed $115,910,022 in total assets and $80,169,235 in total liabilities. DANA CORP: Wants Court to Disallow Visteon Corp.'s $9.8 Mil. Claim ------------------------------------------------------------------ Dana Corp. and it debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to disallow Visteon Corporation's Claim No. 15037, asserting $9,800,000. The Claim seeks reimbursement for Visteon's purported losses related to a vehicle recall by Ford Motor Company. Corinne Ball, Esq., at Jones Day, in New York, states that the purpose of the recall was to repair air induction systems that Visteon sold to Ford, which air induction systems contained component parts that Visteon purchased from Dana. She relates that the Reorganized Debtors believe that Visteon based its reimbursement claim on the Debtors' alleged breaches of contract and warranty and on purported contractual indemnification obligation. However, Ms. Ball says the Reorganized Debtors intend to demonstrate that they did not breach any contractual obligation or warranty to Visteon and do not have indemnification obligations to Visteon under the facts and law at issue. She adds that Visteon's alleged damages were resolved through a private settlement and mutual release of claims between Ford and Visteon that included other unrelated claims and resulted in a net payment to Visteon. Against this backdrop, the Reorganized Debtors assert that the Visteon Claim should be disallowed. Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. Dana is focused on being an essential partner to automotive, commercial, and off-highway vehicle customers, which collectively produce more than 60 million vehicles annually. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Nov. 30, 2007, the Debtors listed $7,131,000,000 in total assets and $7,665,000,000 in total debts resulting in a total shareholders' deficit of $534,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners served as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represens the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP served as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC served as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. Judge Burton Lifland of the U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Third Amended Joint Plan of Reorganization of the Debtors on Dec. 26, 2007. The Debtors' Third Amended Joint Plan of Reorganization was deemed effective as of Jan. 31, 2008. Dana Corp., starting on the Plan Effective Date, operated as Dana Holding Corporation. (Dana Corporation Bankruptcy News, Issue No. 78; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * As reported in the Troubled Company Reporter on Feb. 12, 2008, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Dana Holding Corp. following the company's emergence from Chapter 11 on Feb. 1, 2008. The outlook is negative. At the same time, Standard & Poor's assigned Dana's $650 million asset-based loan revolving credit facility due 2013 a 'BB+' rating (two notches higher than the corporate credit rating) with a recovery rating of '1', indicating an expectation of very high recovery in the event of a payment default. In addition, S&P assigned a 'BB' bank loan rating to Dana's $1.43 billion senior secured term loan with a recovery rating of '2', indicating an expectation of average recovery. The TCR reported on Feb. 18, 2008, that Moody's Investors Service affirmed the ratings of the reorganized Dana Holding Corporation as: Corporate Family Rating, B1; Probability of Default Rating, B1. In a related action, Moody's affirmed the Ba3 rating on the senior secured term loan and raised the rating on the senior secured asset based revolving credit facility to Ba2 from Ba3. The outlook is stable. The financing for the company's emergence from Chapter 11 bankruptcy protection has been funded in line with the structure originally rated by Moody's in a press release dated Jan. 7, 2008. DAVID FHIMA: Files for Bankruptcy Following String of Setbacks -------------------------------------------------------------- The Star Tribune in Minneapolis, Minnesota, reports that entrepreneur David J. Fhima has filed for Chapter 11 bankruptcy to reorganize more than $2,000,000 in debts. Star Tribune's Steve Alexander relates that Mr. Fhima, 47, has a string of failed Twin Cities restaurants that include Fhima's, Mpls. Cafe and Louis XIII. The report says two of Mr. Fhima's eateries -- Zahtar and LoTo -- remain open. Star Tribune also discloses Mr. Fhima's financial setbacks: -- In 2007, a Fhima's restaurant in St. Paul, Minnesota, was closed after the city spent $700,000 to upgrade its leased location in the city-owned Lawson Commons retail space downtown; -- In May 2007, the Minnesota Court of Appeals held that Mr. Fhima must pay a $352,612 judgment from a wrongful- termination lawsuit against him filed 13 years earlier in Los Angeles County Superior Court, in California; -- Two of Mr. Fhima's restaurants is the subject of liens filed by the Internal Revenue Service on account of $180,000 in unpaid federal taxes; -- In early May 2008, a seafood supplier sued Mr. Fhima to collect on a $39,000 bill, and that Mr. Fhima closed his LoTo restaurant in St. Paul for six days in late May. DAWAHARES LEXINGTON: To Liquidate Remaining 22 Outlets ------------------------------------------------------ Dawahare's of Lexington LLC informed the U.S. Bankruptcy Court for the Eastern District of Kentucky that it will shutter and pursue a liquidation of its 22 remaining Dawahare's and Cat Bird Seat stores, Lexington Herald-Leader reports. Dawahares expects the liquidation to begin July 14 and end by Sept. 30, the report says. About 400 employees are affected, the report adds. The Troubled Company Reporter said on June 3, 2008, that Dawahares intended to close nine of its 31 retail outlets after filing for chapter 11. The company would scrap seven positions at its headquarters, and about 100 jobs related to the store closings. Dawahares, according to Herald-Leader, told the Court it has been unable to get loans "from shareholders and third parties to support its effort to complete the restructuring." Dawahares said it expects to run out of money by October, the report adds. The company's president, Harding Dawahare, said in a written statement the original goal was to keep the 22 stores open, according to Herald-Leader. "Unfortunately, after a month of trying to make this plan work to the satisfaction of our bank (Fifth Third) and other creditors, we realized our only option was to take this action," Herald-Leader quotes Mr. Dawahare as saying. Dawahares, Herald-Leader continues, advised the Court that a sale of the 22 stores as "going concerns will not bring enough cash to come near paying the bank in full." Dawahares, according to Herald-Leader, pointed out: -- its inventory of clothing is "not correct" for continued business; -- it would need "substantial cash" from Fifth Third "with no reasonable chance of recovering such cash" to fix the problem, and -- the value of the stores would be "impaired" if they are sold without the necessary merchandise for the upcoming Christmas season. About Dawahare's of Lexington Lexington, Kentucky-based Dawahare's of Lexington LLC, dba Dawahares and Catbird Seat -- http://www.dawahares.com/-- sells family clothing in retail. It filed its chapter 11 petition on May 30, 2008 (Bankr. E.D. Ky. Case No. 08-51381). Judge Joseph M. Scott, Jr., presides over the case. Thomas Bunch, II, Esq., and W. Thomas Bunch, Sr., Esq., at Bunch & Brock, represent the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed total assets of $10,023,124 and total debts of $9,280,821. DENTAL PROFILE: Case Summary & 28 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Dental Profile. Inc. dba Dental Profile 120 East Lake St. Addison, IL 60101 Bankruptcy Case No.: 08-17148 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Dentist, P.C. 08-17149 dba Perla Dental Type of Business: The Debtors are engaged in health care business particularly in dentistry. Chapter 11 Petition Date: July 2, 2008 Court: Northern District of Illinois (Chicago) Debtors' Counsel: Paul M Bach, Esq. Email: paul@bachoffices.com 1955 Shermer Road, Ste. 150 Northbrook, IL 60062 Tel: (847) 564-0808 Fax: (847) 564-0985 Dental Profile. Inc.'s Financial Condition: Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of Dental Profile. Inc. 's petition is available for free at http://bankrupt.com/misc/ilnb08-17148.pdf A copy of Dentist, P.C.'s petition is available for free at http://bankrupt.com/misc/ilnb08-17149.pdf DOLLAR THRIFTY: S&P Cuts Rating to 'B' and Keeps Negative Watch --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Dollar Thrifty Automotive Group Inc., including lowering the corporate credit rating to 'B' from 'B+'. All ratings remain on CreditWatch with negative implications, where they were originally placed on Feb. 12, 2008. "The rating action is based on the reduced earnings guidance that the company released, reflecting pressure on pricing and vehicle depreciation costs," said Standard & Poor's credit analyst Betsy Snyder. "Ratings remain on CreditWatch because a sustained decline in the leisure travel market that the company has significant exposure to, as well as continuing weak used car prices, could result in ongoing earnings pressure." At the same time, S&P's concerns pertaining to refinancing risk have been alleviated somewhat by financings the company completed earlier this year. Tulsa, Oklahoma-based Dollar Thrifty, the parent of the Dollar and Thrifty car rental brands, currently has about 13% of the U.S. on- airport car rental market, significantly smaller than the approximate 30% share of each of its major competitors Hertz Corp., Avis Budget Group Inc. (parent of the Avis and Budget brands), and Enterprise Rent-A-Car Co. (parent of the Enterprise, Alamo, and National brands). Dollar Thrifty indicated its second- quarter and full-year 2008 earnings will be below expectations because of lower pricing and higher vehicle depreciation costs (an adjustment that reflects reduced proceeds from disposal of vehicles in a weak used car market). This follows a first-quarter loss of $16 million compared with a profit of $5 million in the prior-year period (excluding a $350 million noncash pretax charge taken for goodwill impairment). In addition, U.S. airlines have announced domestic capacity reductions of at least 10% beginning in September. As a result, the company is now expecting full-year 2008 earnings substantially below those reported in 2007. Dollar Thrifty derives most of its revenues from the leisure travel market, which is expected to be harder hit by economic weakness. As a result, debt to EBITDA, now in the mid-4x area, is likely to increase. S&P's earlier concerns regarding liquidity and access to financings have been alleviated somewhat. At March 31, 2008, the company had $136 million of cash and $204 million available under its $350 million revolving credit facility that matures in 2013 ($146 million was utilized for letters of credit). In May 2008, the company renewed its $215 million vehicle-backed conduit facility and $800 million vehicle-backed commercial paper program and liquidity facility. Standard & Poor's will assess the company's expected financial performance from a reduced level of domestic airline capacity and enplanements, the weaker economy, and the outlook for proceeds from vehicle sales to resolve the CreditWatch. DUNE ENERGY: March 31 Balance Sheet Upside-Down by 42 Million ------------------------------------------------------------- Dune Energy Inc. reported its quarterly financial information ended March 31, 2008. At March 31, 2008, the company's balance sheet showed total assets of $621,145,247 and total liabilities of $441,087,901, resulting in a $42,024,799 stockholders' deficit. For the quarter ended March 31, 2008, the company reported a net loss of $8,676,606, over $40,839,858 revenues, compared to a net loss of $8,511,274, over $2,957,561 revenues for the quarter ended March 31, 2007. Operating income for the quarter was $6.4 million, compared with a $5.1 million loss in the first quarter of 2007. Included in the results for the first quarter of 2008 was $11.9 million of realized and unrealized losses associated with hedging activities. Of this amount, $1.8 million was realized during the quarter. In addition, there was a $5.3 million income tax benefit recorded during the first quarter of 2008. Preferred stock dividends, paid in the form of a PIK interest totaled $5.7 million in the first quarter 2008. Field level lease operating expenses, severance, ad valorem taxes, and transportation for the first quarter totaled $14.1 million. This compares with $2.8 million for the first quarter of 2007. This change reflects significantly higher production volumes related to a major property acquisition in May of 2007. A copy of the company's March 31, 2008 quarterly financials is available for free at http://ResearchArchives.com/t/s?2f09 Headquartered in Houston, Dune Energy Inc. (Amex: DNE) -- http://www.duneenergy.com/ -- is an independent exploration and development company, with operations focused along the Louisiana/Texas Gulf Coast and the North Texas Fort Worth Basin Barnett Shale. The company's total proved reserves as of Dec. 31, 2007 were 175.4 Bcfe, consisting of 117.6 Bcf of natural gas and 9.6 MMbbls of oil. The PV-10 of the company's proved reserves at year end was $728.6 million. * * * Moody's Investor Service placed Dune Energy Inc.'s senior secured debt, probability of default and long term corporate family ratings at 'Caa2' in April 2007. The ratings still hold to date with a stable outlook. DUNE ENERGY: Zazove Associates Discloses 21.03% Equity Stake ------------------------------------------------------------ Zazove Associates LLC declares ownership of 21,417,692 shares of common stock in Dune Energy Inc., representing 21.03% of the company's 101,829,278 outstanding shares. Headquartered in Houston, Dune Energy Inc. (Amex: DNE) -- http://www.duneenergy.com/ -- is an independent exploration and development company, with operations focused along the Louisiana/Texas Gulf Coast and the North Texas Fort Worth Basin Barnett Shale. The company's total proved reserves as of Dec. 31, 2007 were 175.4 Bcfe, consisting of 117.6 Bcf of natural gas and 9.6 MMbbls of oil. The PV-10 of the company's proved reserves at year end was $728.6 million. * * * Moody's Investor Service placed Dune Energy Inc.'s senior secured debt, probability of default and long term corporate family ratings at 'Caa2' in April 2007. The ratings still hold to date with a stable outlook. EDMUND ANDERSON: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Edmund Lincoln Anderson 1964 Saxon Valley Circle Atlanta, GA 30319 Bankruptcy Case No.: 08-72350 Chapter 11 Petition Date: June 30, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Dorna Jenkins Taylor (dorna.taylor@taylorattorneys.com) Taylor & Associates, LLC 1401 Peachtree Street, Suite 500 Atlanta, GA 30309 Telephone: (404) 870-3560 Fax: (404) 745-0136 Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million A copy of the debtor's petition and a list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ganb08-72350.pdf EDUCATION RESOURCES: Fixes Panel's Protests to PR Advisor Request ----------------------------------------------------------------- The Education Resources Institute Inc. resolved objections by the Official Committee of Unsecured Creditors to its request to employ Rasky Baerlein Strategic Communications Inc. as its public relations advisor. The U.S. Trustee and the Committee in the Debtor's Chapter 11 case objected the Debtor's request to employ Rasky Baerlein. To address the Committee's concerns, the Debtor and the Committee agreed that: (a) Rasky's engagement will only be from April 7, 2008, through Sept. 11, 2008, subject to the Debtor's right to request a further extension of Rasky's engagement; and (b) the monthly cap on fees will be $20,000 per month. On June 11, 2008, Judge Henry J. Boroff of the U.S. Bankruptcy Court for the District of Massachusetts denied, without prejudice, the Debtor's employment application for Rasky, and directed that certain information be provided to the Court if a renewed application was filed. In response to the concerns expressed by the Court, Rasky agreed to amend certain terms of its engagement agreement with the Debtor and waive the 3% flat fee for expenses for which Rasky is unable to allocate the actual costs of those expenses to the Debtor. Further, the Debtor and Rasky agreed to amend the indemnification provision under the Engagement Agreement to state that the Debtor indemnifies Rasky and its officers "from all injuries, losses, claims and damages, and all costs and expenses, including attorneys' fees incurred by Rasky as a result of any action of omission by Rasky, subject only to the waiver by Rasky of the indemnification if Rasky is subsequently found by a court of competent jurisdiction to have acted with gross negligence or willful misconduct." According to Willis J. Hulings III, the Debtor's president and chief executive officer, the U.S. Trustee's objections remain unresolved. About The Education Resources Institute Inc. Headquartered in Boston, Massachusetts, The Education Resources Institute Inc. -- http://www.teri.org/-- aka Boston Systems Resources Inc., Brockton Education Opportunity Center, TERI, TERI College Access, TERI College Access Centers and TERI Marketing Services Inc., is a nonprofit organization that promotes educational opportunities for all through its college access and loan guarantee activities. Founded in 1985, TERI is a guarantor of private or non-government student loans with more than $17 billion in outstanding guarantees. The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr. D. Mass. Case No.: 08-12540.) Daniel Glosband, Esq., and Gina L. Martin, Esq., at Goodwin Procter LLP, represent the Debtor in its restructuring efforts. The Debtor's conflicts counsel is Craig and Macauley PC. Grant Thornton LLP serves as its financial advisor and Epiq Bankruptcy Solutions LLC as its claims agent. The Debtor's investment banker is Citigroup Global Markets Inc., and its public relations & public affairs advisor is Rasky Baerlein Strategic Communications Inc. When the Debtor filed for protection from its creditors, it listed estimated assets of more that $1 billion and estimated debts of $500,000 to $1 billion. (TERI Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) EDUCATION RESOURCES: Panel Can Hire Duane Morris Bankr. Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in The Education Resources Institute Inc.'s Chapter 11 case obtained authority from the U.S. Bankruptcy Court for the District of Massachusetts to retain Duane Morris LLP, as its bankruptcy counsel, nunc pro tunc to the Debtor's bankruptcy filing date. As reported in the Troubled Company Reporter on May 22, 2008, Duane Morris is expected to: (a) provide legal services to the Committee with respect to the Committee's powers, duties and role in the Debtor's Chapter 11 case; (b) assist the Committee in evaluating the various pleadings that will be filed by the Debtor and other parties-in- interest; (c) investigate the acts, conduct, assets, liabilities, and financial condition of the Debtor; (d) assist the Committee in evaluating the Debtor's monthly operating reports and evaluate and negotiate the Debtor's or any other party's plan of reorganization and any associated disclosure statement; (e) consult with the Debtor and its professionals concerning administration of the case and development of exit strategy, disclosure statement and plan; (f) commence and prosecute any and all necessary and appropriate actions and proceedings on behalf of the Committee; (g) appear in Court in all appropriate matters to advance the interests of the Committee; and (h) perform all other legal services for the Committee which may be necessary and proper in the Debtor's Chapter 11 proceeding. Duane Morris will be paid according to its customary hourly rates: Partners $340 to $831 Counsel $295 to $775 Associates $220 to $510 Legal Assistants $125 to $225 Jeffrey D. Sternklar, Esq., a partner at Duane Morris, will be the lead attorney. His current hourly billing rate is $570. Duane Morris will also be reimbursed for any necessary out-of-pocket expenses. Mr. Sternklar assured the Court that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). He added that Duane Morris does not hold any interest adverse to the Debtor's estate and does not represent any party having an adverse interest in connection with the Debtor's Chapter 11 case. About The Education Resources Institute Inc. Headquartered in Boston, Massachusetts, The Education Resources Institute Inc. -- http://www.teri.org/-- aka Boston Systems Resources Inc., Brockton Education Opportunity Center, TERI, TERI College Access, TERI College Access Centers and TERI Marketing Services Inc., is a nonprofit organization that promotes educational opportunities for all through its college access and loan guarantee activities. Founded in 1985, TERI is a guarantor of private or non-government student loans with more than $17 billion in outstanding guarantees. The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr. D. Mass. Case No.: 08-12540.) Daniel Glosband, Esq., and Gina L. Martin, Esq., at Goodwin Procter LLP, represent the Debtor in its restructuring efforts. The Debtor's conflicts counsel is Craig and Macauley PC. Grant Thornton LLP serves as its financial advisor and Epiq Bankruptcy Solutions LLC as its claims agent. The Debtor's investment banker is Citigroup Global Markets Inc., and its public relations & public affairs advisor is Rasky Baerlein Strategic Communications Inc. When the Debtor filed for protection from its creditors, it listed estimated assets of more that $1 billion and estimated debts of $500,000 to $1 billion. (TERI Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) EDUCATION RESOURCES: Panel Can Hire Posternak as Special Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in The Education Resources Institute Inc. obtained authority from the U.S. Bankruptcy Court for the District of Massachusetts to retain David J. Reier and the law firm of Posternak Blankstein & Lund LLP as its special conflicts counsel. As reported in the Troubled Company Reporter on June 16, 2008, Posternak will represent the Committee in matters identified by Duane Morris as potentially presenting a conflict of interest for Duane Morris. Posternak will be compensated for its services on an hourly basis in accordance with its customary hourly "Default Business" rates: Professional Hourly Rates ------------ ------------ Partners $325 to $480 Associates $220 to $260 Paralegals $155 to $195 Mr. Reier, who will take the lead role as the Committee's special conflicts counsel, will be paid $410 per hour. David J. Reier, Esq., a member at Posternak, assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). He adds that Posternak has no connections with the Debtor, any creditor, or other party-in-interest, their respective attorneys and accountants, except: a. Mr. Reier and Posternak were given a written proxy and authorized as an attorney-in-fact to act on behalf of U.S. Bank, N.A., in connection with formation of the Committee and selection of Committee Counsel and a financial consultant. Mr. Reier's activities were limited to those that occurred on April 30, 2008 when the Committee was formed and professionals engaged. b. Posternak has in the past represented Citizens Bank of Massachusetts, a closely related affiliate to RBS Citizens, N.A., in connection with certain loan transactions, all of which originated several years ago, and none of which has any connection with these proceedings or the Debtor. Posternak has not performed any services for Citizens since approximately October 31, 2007, when Posternak last performed legal services for Citizens in connection with the final payoff of one loan. Posternak is not presently engaged to perform any legal services for Citizens and has not been so engaged since on or about October 31, 2007. The total fees generated from services performed for Citizens during 2007 comprised 0.1436%) of the total fees earned in 2007 for Posternak. c. Posternak has certain business banking relationships with Citizens and Bank of America, including maintaining checking, credit card and client trust funds accounts with the banks and a letter of credit relationship with BofA in connection with Posternak's obligations. d. Mr. Reier has a personal banking relationship with BofA and one or more employees or partners of Posternak may have personal banking relationships with certain banks that are creditors of the Debtor. About The Education Resources Institute Inc. Headquartered in Boston, Massachusetts, The Education Resources Institute Inc. -- http://www.teri.org/-- aka Boston Systems Resources Inc., Brockton Education Opportunity Center, TERI, TERI College Access, TERI College Access Centers and TERI Marketing Services Inc., is a nonprofit organization that promotes educational opportunities for all through its college access and loan guarantee activities. Founded in 1985, TERI is a guarantor of private or non-government student loans with more than $17 billion in outstanding guarantees. The Debtor filed for Chapter 11 petition on April 7, 2008 (Bankr. D. Mass. Case No.: 08-12540.) Daniel Glosband, Esq., and Gina L. Martin, Esq., at Goodwin Procter LLP, represent the Debtor in its restructuring efforts. The Debtor's conflicts counsel is Craig and Macauley PC. Grant Thornton LLP serves as its financial advisor and Epiq Bankruptcy Solutions LLC as its claims agent. The Debtor's investment banker is Citigroup Global Markets Inc., and its public relations & public affairs advisor is Rasky Baerlein Strategic Communications Inc. When the Debtor filed for protection from its creditors, it listed estimated assets of more that $1 billion and estimated debts of $500,000 to $1 billion. (TERI Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ELECTRIC BREW: Foreclosure Action Moved Due to Chapter 11 Filing ---------------------------------------------------------------- The Business Review (Albany) reports that Wednesday's foreclosure auction of the Van Dyck Restaurant & Brewery was postponed after Electric Brew Pubs Inc. filed for chapter 11 bankruptcy protection late Tuesday. The Van Dyck restaurant and club, the report relates, closed in January 2007, after Berkshire Bank and the Metroplex Development Authority foreclosed on the property. The report, citing documents filed in court, owner Niels Peter Olsen defaulted on a $250,000 loan from Berkshire Bank and a $200,000 loan and $75,000 line of credit from the Schenectady Metroplex Development Authority. As reported by the Troubled Company Reporter on March 4, 2008, the Hon. Robert Littlefield of the U.S. Bankruptcy Court for the Northern District of New York in Albany dismissed the chapter 11 bankruptcy case filed by N. Peter Olsen. Creditors at that time bombarded the Court with complaints contesting that Mr. Olsen doesn't have enough funds for restructuring and calling his restaurant "non-existent." James Schlett at The Daily Gazette in Schenectady, New York, said the case dismissal further exposed Mr. Olsen to foreclosure as his creditors as eyeing on his properties in Schenectady, Saratoga and Washington counties. According to Business Review, Roland Faulkner, Esq., the court- appointed attorney overseeing the auction, said he and other involved parties didn't learn of the postponement until they showed up at the Schenectady County Courthouse. Mr. Faulkner, Business Review relates, said it's possible that the Bankruptcy Court will release the property so the auction can move forward. Van Dyck Restaurant & Brewery is a a famed jazz club on Union Street in Schenectady, New York. Its owner, N. Peter Olsen, filed for chapter 11 bankruptcy in March 2007 and marketed Van Dycke for $1,600,000, which was subsequently lowered to $1,480,000. Electric Brew Pubs, Inc., dba Van Dyck Restaurant and Brewery, filed for chapter 11 bankruptcy on July 1, 2008, before the U.S. Bankruptcy Court for the Northern District of New York (Case No. 08-12171). Francis J. Brennan, Esq., at Nolan and Heller in Albany, represents the Debtor. When it filed for bankruptcy, the Debtor disclosed $1,000,000 to $10,000,000 in estimated assets and debts. ELECTRONIC DATA: $14BB Merger Gets No More Question from FTC, DOJ ----------------------------------------------------------------- Hewlett-Packard Company disclosed that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 relating to HP's proposed acquisition of Electronic Data Systems Corporation has expired without a request for additional information by the U.S. Department of Justice or the Federal Trade Commission. As reported in the Troubled Company Reporter on May 14, 2008, Electronic Data System Corp. signed a definitive agreement with Hewlett-Packard Company under which HP will purchase EDS at roughly $13.9 billion. The terms of the transaction have been unanimously approved by the board of directors of both companies. The transaction still requires EDS stockholder approval and regulatory clearance from the European Commission and other non- U.S. jurisdictions and is subject to the satisfaction or waiver of the other closing conditions specified in the merger agreement. About Hewlett-Packard Company Headquartered in Palo Alto, California, Hewlett-Packard Company (NYSE:HPQ) -- http://www.hp.com/-- is a provider of products, technologies, software, solutions and services to individual consumers, small- and medium-sized businesses and large enterprises, including in the public and education sectors. About EDS Corp. Based in Plano, Texas, Electronic Data System Corp. (NYSE: EDS) -- http://www.eds.com/-- is a global technology services company delivering business solutions to its clients. EDS founded the information technology outsourcing industry more than 40 years ago. EDS delivers a broad portfolio of information technology and business process outsourcing services to clients in the manufacturing, financial services, healthcare, communications, energy, transportation, and consumer and retail industries and to governments around the world. * * * As reported in the Troubled Company Reporter on March 25, 2008, Moody's Investors Service raised the subordinated shelf registration rating to (P) Ba1 from (P) Ba2 and confirmed the preferred shelf registration rating at (P) Ba2. EL PASO: S&P Holds 'BB' Credit Rating, Changes Outlook to Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on El Paso Corp. to stable from positive. At the same time, S&P affirmed the ratings on the company and its subsidiaries, including the 'BB' corporate credit rating. As of March 31, 2008, El Paso had $12.7 billion of total debt. The outlook change reflects S&P's expectation that there will not be an upgrade in the near term. While El Paso is benefiting from a high commodity price environment, the incremental cash flow is being directed at equity holders and is unlikely to produce a notable near-term improvement in key credit metrics to warrant a higher rating. This focus is demonstrated by the company's decision to move forward with the Ruby pipeline project (El Paso does not plan to issue equity for the project) and the May announcement of $300 million share repurchase program and 25% increase in the dividend. These announcements follow El Paso's April 2008 analyst presentation in which it indicated that it does not intend to take sizable steps to improve the rating following the upgrade that resulted from the ANR pipeline disposal and subsequent debt reduction. The company will seek to grow its way to a higher rating, which is certainly possible in the long term, but unlikely over the next 12 to 18 months. The Ruby pipeline project is now expected to cost $3 billion, up from the original $2 billion estimate, and when combined with the dividend increase and share repurchase program, will exacerbate the company's already significantly negative free cash position for the foreseeable future. The ratings on El Paso reflect a satisfactory overall business risk profile, which includes the stability of the company's interstate natural gas pipeline systems, and partly offset by the risks associated with its exploration and production segment and a significantly improved, although still aggressive, financial profile. EL POLLO: S&P Revises Outlook to Negative from Stable ----------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on Irvine, California-based El Pollo Loco Inc. to negative from stable. "The outlook revision reflects our analysis that the company will have a difficult time complying with financial covenants of its senior secured credit facility in the coming quarters as they become more restrictive," said Standard & Poor's credit analyst Charles Pinson-Rose. Although Standard & Poor's expects that the company will have to improve profitability, or at least maintain profitability at approximately current levels, S&P have serious doubts about the company's ability to do so considering the weak results from the first quarter and the significant challenges facing the restaurant industry. ESTATE FINANCIAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Estate Financial Mortgage Fund, LLC 806 9th St., Suite 1A Paso Robles, CA 93446 Bankruptcy Case No.: 08-11535 Debtor-affiliate subjected to a separate, involuntary Chapter 11 petition: Entity Case No. ------ -------- Estate Financial, Inc. 08-11457 Chapter 11 Petition Date: July 1, 2008 Court: Central District Of California (Santa Barbara) Judge: Robin Riblet Debtors' Counsel: Lewis R. Landau, Esq. Email: lew@landaunet.com 23564 Calabasas Rd. Ste. 104 Calabasas, CA 91302 Tel: (888) 822-4340 Fax: (888) 822-4340 http://www.landaunet.com/ Estimated Assets: More than $100,000,000 Estimated Debts: $100,000 to $1,000,000 A. Estate Financial Mortgage Fund, LLC's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bryan Cave, LLP Legal $91,182 P.O. Box 503089 St. Louis, MO 63150-3089 Farella Braun & Martel Legal $87,274 Russ Bldg., 235 Montgomery St. San Francisco, CA 94104 David G. Ure Legal $37,643 P.O. Box 1930 Paso Robles, CA 93447 FCI Lender Services, Inc. Miscellaneous $24,634 Foreclosure Fees Jeffrey S. Benice Legal $12,368 Diehl & Rodewald Legal $8,817 Donald D. Harmata Legal $6,965 Doss Law, A Law Corp. Legal $6,192 Hastings Enterprises Office rent $3,977 McCormick Barstow, LLP Legal $3,490 Simon & Associates Legal $3,469 S.&S. Rent-A-Fence Fence rental $2,531 Seid & Zucker, CPA Accounting fees $2,075 Stein & Lubin Legal $2,061 Bandz Services Inc Security Service $1,130 SLOCO Data Printing $1,021 Crawford & Bangs, LLP Legal $834 Ventura Printing Envelopes $833 Chapparral Copier Maintenance $809 Andrew W. Hayes Legal $775 FEDDERS CORP: Committee et al. Protest Chapter 11 Liquidation Plan ------------------------------------------------------------------ The Official Committee of Unsecured Creditors opposed a disclosure statement explaining the Chapter 11 plan of liquidation Fedders Corp. and its debtor-affiliates filed on June 6, 2008, before the United States Bankruptcy Court for the District Delaware. The Committee complains that unsecured creditors will receive virtually nothing from the Debtors' estates. The Debtors' plan prohibits the Committee from (i) spending any funds to prosecute a lawsuit except those obtained directly from litigation proceeds and (ii) using the proceeds of settlements to fund any litigation, according to the Committee. In addition, the plan compels the Committee to settle some of its strongest claims to recover monies the Debtors used to cover the collateral of the their term lenders -- Sachs Credit Partners L.P. and Highland Capital Management L.P. Bank of America, N.A., General Electric Capital Corporation and U.S. Bank National Association also objected to the Debtors' Chapter 11 plan. As reported in the Troubled Company Reporter June 12, 2008, the plan contemplates the wind-down of the all of the Debtors' assets. Under the plan, among other things, term lenders Goldman Sachs Credit and Highland Capital are expected to recover $55.9% of their claims, while unsecured creditors will receive distribution from the proceeds of the prosecution of a lawsuit and any avoidance actions. On Oct. 5, 2007, the Debtors obtained up to $33 million in loan under a revolving credit facility due July 31, 2008, from Goldman Sachs. The proceeds of the loan will be used, among other things, to refinance in full all indebtedness under the revolving facility. About Fedders Corporation Based in Liberty Corner, New Jersey, Fedders Corporation -- http://www.fedders.com/-- manufactures and markets air treatment products, including air conditioners, air cleaners, dehumidifiers, and humidifiers. The company has production facilities in the United States in Illinois, North Carolina, New Mexico, and Texas and international production facilities in the Philippines, China and India. The company and several affiliates filed for Chapter 11 protection on Aug. 22, 2007, (Bankr. D. Del. Lead Case No. 07-11182). The law firm of Cole, Schotz, Meisel, Forman & Leonard P.A.; and Norman L. Pernick, Esq., Irving E. Walker, Esq., and Adam H. Isenberg, Esq., at Saul Ewing LLP, represent the Debtors in their restructuring efforts. The Debtors have selected Logan & Company Inc. as claims and noticing agent. The Official Committee of Unsecured Creditors is represented by Brown Rudnick Berlack Israels LLP. When the Debtors filed for protection from its creditors, it listed total assets of $186,300,000 and total debts of $322,000,000. FIDELITY NATIONAL: Spin-off Cues Moody's to Affirm Ba1 CF Rating ---------------------------------------------------------------- Moody's Investors Service has confirmed Fidelity National Information Services' Ba1 corporate family rating and assigned a stable rating outlook. This rating confirmation concludes the review for further possible downgrade initiated on Oct. 25, 2007, which was prompted by the company's statement that it planned to spin-off its Lender Processing Services division into a separate publicly traded company. The LPS spin-off was completed on July 2, 2008. Concurrently, Moody's confirmed the Ba1 ratings to FIS' $2.1 billion Term Loan A, $900 million revolving credit facility, and $200 million Senior secured notes due September 2008. In addition, Moody's withdrew its Ba1 rating on the $1.6 billion Term Loan B which has been assigned to LPS and will be subsequently refinanced upon the spin-off. The ratings reflect the company's probability of default rating of Ba1 and loss given default assessments as reflected below. FIS' Ba1 corporate family rating reflects the company's leading market position within the core bank processing market, its diversity of financial institution clients including top tier banks, and its substantial size in terms of pretax income compared to similarly ranked peers. At the same time, the rating is constrained by the company's leverage as measured by free cash flow to debt, reduced business line diversity after the spin-off of LPS, lower return on assets than similarly rated peers, and propensity to grow through acquisitions. The factors cited in Moody's Global Business Services Industry Rating Methodology map to an overall Ba1 rating, which is consistent with the Ba1 CFR. The short term liquidity rating of SGL-2 reflects FIS' good internal and external liquidity following the spin-off of LPS, which includes a cash balance of over $200 million and expected free cash flow of more than $200 million for 2008. The company's cash flow should be sufficient to fund necessary capital expenditures, working capital requirements, and mandatory debt amortization over the next 12 months. The company has adequate external liquidity in the form of its $900 million revolving credit facility (expires 2012), of which approximately $500 million was drawn at March 31, 2008. Moody's expects the company to fund the repayment of its $200 million Certegy senior unsecured notes using cash and its revolver. Moody's expects the company to maintain compliance with its two financial covenants, a debt-to-EBITDA leverage test and an interest coverage ratio. The stable outlook reflects Moody's expectation the company will continue to generate mid-single digit organic revenue growth, supporting its free cash flow which will be used for debt reduction. Despite the challenging economic environment facing U.S. financial institutions, we expect the company's performance to remain steady over the intermediate term given its recurring revenue model secured by long-term customer contracts and ongoing customer demand for its core processing services in a cost-cutting environment. The Ba1 CFR could experience upward rating pressure if the company were to continue to demonstrate organic revenue growth and profitability such that its financial leverage, as measured by debt to EBITDA were less than 3x on a sustained basis. Additional financial leverage or a decline in profitability, such that debt to EBITDA were to exceed 4x on a sustained basis, would put downward pressure on the ratings. FIS ratings confirmed/assessments revised: -- Corporate Family Rating - Ba1 -- Probability of Default Rating -- Ba1 -- $2.1 billion First Lien Senior Secured Term Loan A - Ba1, LGD 3, (47% from 48%) -- $900 million First Lien Senior Revolving Credit Facility - Ba1, LGD 3, (47% from 48%) -- $200 million 4.75% (Certegy) notes due September 2008 - Ba1, LGD 3, (47% from 48%) -- Speculative Grade Liquidity Rating -- SGL-2 FIS rating withdrawn: -- $1.6 billion First Lien Senior Secured Term Loan B - Ba1, LGD 3, 48% Headquartered in Jacksonville, Florida, Fidelity National Information Services, Inc. provides card issuing, core bank processing, and online bill payment services to financial institutions. FIDELITY NATIONAL: S&P Lifts Ratings on Good Operating Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Jacksonville, Florida-based Fidelity National Information Services Inc. to 'BB+' from 'BB'. At the same time, S&P removed the ratings from CreditWatch, where they had been placed with developing implications on April 28, 2008. The outlook is stable. Standard & Poor's withdrew its bank loan and recovery ratings on FIS' $1.6 billion secured term loan B facility. That debt is being retired by FIS in conjunction with the spin-off of its Lender Processing Services segment, now a public company known as Lender Processing Services Inc. S&P also raised the issue-level rating on FIS' outstanding $200 million 4.75% secured notes due 2008 to 'BBB' from 'BB+'. S&P revised the recovery rating on these notes to '1', indicating the expectation for very high (90% to 100%) recovery in the event of a payment default, from '2'. S&P raised the issue-level rating and revised the recovery rating because FIS eliminated a substantial amount of secured debt by retiring its term loan B. "The upgrade reflects FIS' good operating performance in its transaction processing services, which includes the recently acquired eFunds," said Standard & Poor's credit analyst Philip Schrank. Despite a reduction in business diversity and cash flow after the spin-off of its LPS unit (which accounted for about 40% of consolidated EBITDA), pro forma debt leverage will decline to about 3x from the mid-3x area following the transaction. Although the company has expanded aggressively through acquisitions in the past five years, Standard & Poor's expects a more modest pace going forward, with an emphasis placed on organic growth and debt reduction in the near term. FORD CREDIT: Fitch Affirms 'BB' Rating on Class D Notes ------------------------------------------------------- Fitch Ratings has upgraded two classes and affirmed 12 classes of notes from two Ford Credit Auto Owner Trusts as part of its ongoing surveillance process. The rating actions are: Series 2006-A -- Class A-3 affirmed at 'AAA'; -- Class A-4 affirmed at 'AAA'; -- Class B affirmed at 'AAA'; -- Class C upgraded to 'AAA' from 'AA'; -- Class D upgraded to 'AA' from 'A'. Series 2007-A -- Class A-2a affirmed at 'AAA'; -- Class A-2b affirmed at 'AAA'; -- Class A-3a affirmed at 'AAA'; -- Class A-3b affirmed at 'AAA'; -- Class A-4a affirmed at 'AAA'; -- Class A-4b affirmed at 'AAA'; -- Class B affirmed at 'A'; -- Class C affirmed at 'BBB'; -- Class D affirmed at 'BB'. The upgrades are a result of continued available credit enhancement in excess of stressed remaining losses. The collateral continues to perform within Fitch's base case expectations. Currently, under the credit enhancement structure, the securities can withstand stress scenarios consistent with the upgraded rating categories and still make full payments of interest and principal in accordance with the terms of the documents. As before, the ratings reflect the quality of Ford Motor Credit Co.'s retail auto loan originations, the sound financial and legal structure of the transactions, and servicing provided by Ford Motor Credit Co. FORD MOTOR: Overall June 2008 Sales in Canada Decrease 13.7% ------------------------------------------------------------ In June, Ford of Canada's overall sales decreased 13.7% to 22,001 units. Total truck sales were down 17.7% at 15,251 units and total car sales of 6,750 units mark a 2.9% decrease compared to last June. Ford Focus, the peppy, fuel-efficient small car from Ford Motor Company of Canada, Limited delivered a double-digit sales increase this month over sales last June. Crossover Utility Vehicles remain strong performers for Ford of Canada as well, Ford Edge achieved record sales with an increase of 2.6% over last June's previous record results, Ford Taurus X increased sales by 31.9%, and all-new Ford Flex came out of the gate strong with only a few days' sales under its belt. In trucks, Ford Ranger, the winner of Natural Resources Canada's ecoEnergy for Personal Vehicles Award for the most fuel-efficient vehicles for six years running, brought home solid sales results in June with a 6.2% increase over last year. "Fuel efficiency is especially important to Canadian consumers today," Mike Herniak, vice-president, sales and customer service, Ford of Canada, said. "Many Ford vehicles offer fuel economy that customers can take to the bank -� from the fuel-efficient line-up of crossovers, to the award-winning Ford Ranger, to the fuel- sipping Ford Focus which consumes a mere 5.7 L/100 km on the highway. July 1st also marked the launch of Ford of Canada's best prices of the year with "Ford Family Pricing." Until September 2nd, customers across Canada can take advantage of Ford family prices on most Ford and Lincoln vehicles. Purchase price adjustments of up to $11,872 with combined Family Pricing Discount and Canadian Delivery Allowance and 0 per cent APR purchase financing up to 60 months are available on selected vehicles. "Summer brings holiday travel, outdoor barbecues and Ford Family Pricing," Mr. Herniak said. "Again this year, we are offering the best prices of the year to extended members of the Ford family across Canada. In 2008, there has never been a better time to visit your local Ford or Ford Lincoln dealership." June 2008 Vehicle Sales 2008 2007 % Change ---- ---- -------- Total Vehicles -------------- June 22,001 25,485 -13.7% January � June 113,531 118,201 -4.0% Total Cars ---------- June 6,750 6,950 -2.9% January � June 28,946 30,184 -4.1% Total Trucks ------------ June 15,251 18,535 -17.7% January � June 84,585 88,017 -3.9% Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said that the ratings and outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated B/Stable/B-3) were not affected by Ford's announcement of an agreement to sell its Jaguar and Land Rover units to Tata Motors Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of pension contributions by Ford for Jaguar-Land Rover). As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. FORD MOTOR: Offers Buyout Options to 300 Louisville Plant Workers ----------------------------------------------------------------- Ford Motor Company has offered buyout packages for 300 employees at its Louisville Truck Plant, which produces the F-Series Super Duty pickup in Kentucky, John D. Stoll of The Wall Street Journal reports. The automaker informed the workers that it has to cut tha plant's workforce later this summer due to the drop of consumer demand for heavier vehicles. As disclosed in the Troubled Company Reporter on July 2, 2008, total Ford Motor sales in June 2008 was down 28% to 174,091 units, compared to last year's June sales of 242,029. Gasoline prices increased a dollar (from $3 to $4 a gallon) during the first half and this accelerated the decline in SUV and truck sales. In the first half, retail sales for the company's SUVs declined 40% versus a year ago and retail sales for trucks and vans declined 31%. Mr. Stoll adds that Ford is paring that shift number in the stamping, body and paint operations at the plant, which has been one of the most lucrative plants in its vast production footprint. On June 30, 2008, the Troubled Company Reporter related that Ford Motor initiated hourly employee buyouts to cut costs at U.S. plants that produce sports utility vehicles and pickup trucks as sales of these products drop. The automaker has started offering incentive packages to workers at Louisville Assembly Plant, Kentucky Truck Plant, and transmission plants in Batavia and Sharonville in Ohio. The company had targeted around 8,000 employees to be bought out plant-by-plant, with around 4,200 people accepting the buyouts earlier this year. About Ford Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said that the ratings and outlook on Ford Motor Co. and Ford Motor Credit Co. (both rated B/Stable/B-3) were not affected by Ford's announcement of an agreement to sell its Jaguar and Land Rover units to Tata Motors Ltd. (BB+/Watch Neg/--) for $2.3 billion (before $600 million of pension contributions by Ford for Jaguar-Land Rover). As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings affirmed the Issuer Default Ratings of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. As reported in the Troubled Company Reporter on Nov. 19, 2007, Moody's Investors Service affirmed the long-term ratings of Ford Motor Company (B3 Corporate Family Rating, Ba3 senior secured, Caa1 senior unsecured, and B3 probability of default), but changed the rating outlook to Stable from Negative and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-3. Moody's also affirmed Ford Motor Credit Company's B1 senior unsecured rating, and changed the outlook to Stable from Negative. These rating actions follow Ford's announcement of the details of the newly ratified four-year labor agreement with the United Auto Workers. FOXCO ACQUISITION: S&P Assigns 'B' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to FoxCo Acquisition LLC and its operating subsidiary, FoxCo Acquisition Sub LLC, which S&P analyze on a consolidated basis. The rating outlook is stable. At the same time, Standard & Poor's assigned its bank loan and recovery ratings to FoxCo Acquisitions Sub LLC's proposed $535 million senior secured credit facilities, consisting of a $50 million revolving credit facility due 2014 and a $485 million term loan due 2015. The credit facilities are rated 'BB-' with a recovery rating of '1', indicating our expectation for very high (90%-100%) recovery of principal in the event of a payment default. S&P also assigned a 'B-' rating to the company's proposed $230 million offering of senior unsecured notes due 2016. The notes were also assigned a recovery rating of '5', indicating S&P's expectation for modest (10%-30%) recovery in the event of a payment default. Proceeds from the transaction will be used to finance the acquisition of eight Fox television stations from News Corp. by FoxCo Acquisition LLC, an investment of Oak Hill Capital Partners. Pro forma for the proposed transaction, total debt outstanding was $734.6 million as of March 31, 2008. "The 'B' rating reflects FoxCo's high debt leverage, a longer-term concern regarding covenant compliance, weak conversion of EBITDA into discretionary cash flow because of increased interest expense, high sensitivity to election cycles, and TV broadcasting's mature revenue growth prospects," said Standard & Poor's credit analyst Jeanne Mathewson. "These factors are only partially offset by a moderate degree of cash flow diversity among the company's TV stations in top-50 markets, its good local news position in most of its markets, broadcasting's good margin and discretionary cash flow potential, and strong top-50 market station asset values." FoxCo's pro forma EBITDA margin was about 34% for the 12 months ended March 31, 2008, which compares favorably with peers'. Pro forma EBITDA coverage of interest was low, at 1.5x for the 12 months ended March 31, 2008, and S&P expect it to decline to around 1.3x in 2009 due to continued economic pressures, despite expected cost actions by the company. Pro forma total debt to EBITDA was high, at 7.0x, for the 12 months ended March 31, 2008, and S&P expect this metric to increase to roughly 8.0x in 2009. Although FoxCo has low working capital and maintenance capital spending needs, S&P expect the company to generate minimal discretionary cash flow in 2009 because of its increased debt burden and capital spending related to high definition and digital conversion processes. FREEDOM CERTIFICATES: S&P Places 'B' Cert. Rating Under Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B' ratings on classes A and X from Freedom Certificates US Autos Series 2004-1 Trust on CreditWatch with negative implications. The rating actions reflect the June 20, 2008, placements of the long-term corporate credit and senior unsecured debt ratings on Ford Motor Credit Co. (Ford Credit; B/Watch Neg/B-3), a subsidiary of Ford Motor Co. (Ford; B/Watch Neg/NR), and GMAC LLC (GMAC; B/Watch Neg/C), a subsidiary of General Motor Corp. (GM; B/Watch Neg/NR), on CreditWatch with negative implications. The corporate rating actions on Ford and GM and their affiliates have no immediate rating impact on the Ford and GM-related asset- backed securities supported by collateral pools of consumer auto loans or auto wholesale loans. Freedom Certificates US Autos Series 2004-1 Trust is a pass- through transaction, and the ratings on class A and X are based solely on the lower of the ratings assigned to the underlying securities, the 7.375% bonds due Feb. 1, 2011, issued by Ford Credit and the 7.25% notes due March 2, 2011, issued by GMAC. FREMONT GENERAL: Taps FTI Consulting as Financial Advisor --------------------------------------------------------- Fremont General Corporation asks the United States Bankruptcy Court for the Central District of California for permission to employ FTI Consulting Inc. as its financial advisor. FTI Consulting will: a) assist in developing and implementing cash management strategies, tactics and processes; work with the Debtor's treasury department and other professionals; and coordinate the activities of the representatives of other constituencies in the cash management process, b) assist with the development of the Debtor's business plan, including analysis of potential cost-saving opportunities, including overhead and operating expense reductions and efficiency improvement, and other related forecasts as may be required in the bankruptcy process or by the Debtor for other corporate purposes, c) assist in negotiations with stakeholders and their representatives, d) assist and advice the Debtor with respect to the identification of core business assets and the disposition of assets, e) assist with the identification of executory contracts and leases and performance of costs evaluations with respect to the affirmation or rejection of each, f) assist in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow objections and budgets, cash receipts and disbursement analysis, and analysis of proposed transactions for which the Court approval is sought. g) attend meetings and assist in discussions with potential investors, banks, and other secured lenders, any committee appointed in the Chapter 11 case, the U.S. Trustee, and other parties in interest and professionals hired by the same, as requested, h) analysis of creditor claims and working with the noticing agent, if any, i) assist in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfer, j) assist in communication and negotiation with outside constituents and their advisors, k) assist the board in evaluating operational and strategic options for the Debtor's obligations, l) assist the board in evaluating various strategic options which may be contemplated by the Debtor and the board, m) assist in the development and implementation of a value recovery maximization program for the Debtor and its various stakeholders including the coordination of assets sale, proceeds recovery, and business wind down activities. Manage and coordinate the working group's efforts in operating the business and developing these recovery programs, n) assist in the development of the Debtor's schedules of financial affairs and ongoing reporting obligations and other Chapter 11 administrative type of functions, and o) assist other matters as may be requested that fall within the firm's expertise and that are mutually agreeable with the Debtor including serving in other officer positions, if requested. The firm will appoint other officers as necessary and appropriate. The firm's professionals and their compensation rates are: Designations Hourly Rates ------------ ------------ senior managing director $650-$715 directors/managing director $475-$620 consultants/senior consultant $235-$415 administration/paraprofessionals $95-$190 Albert S. Conly, a senior managing director of the firm, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Fremont General Headquartered in Brea, California, Fremont General Corp. (OTC: FMNT) -- http://www.fremontgeneral.com/-- is a financial services holding company. The company is engaged in deposit gathering through a retail branch network located in the coastal and Central Valley regions of Southern California through Fremont Investment & Loan. Fremont Investment & Loan funds its operations through deposit accounts sourced through its 22 retail banking branches which are insured up to the maximum legal limit by the FDIC. Fremont General Corp. owns 100% of the common stock of Fremon General Credit Corporation, which in turn owns 100% of the common stock of Fremont Investment & Loan Bank. The bank has 22 retail banking branches offering a variety of savings and money market products well as certificates of deposits across its 22 branch network. Customer deposits remain fully insured by the FDIC up to at least $100,000 and retirement accounts remain insured separately up to an additional $250,000. Fremont General Corp. filed for Chapter 11 protection on June 18, 2008, (Bankr. C.D. Calif. Case No.: 08-13421) Scott H. Yun, Esq. and Whitman L. Holt, Esq. represent the Debtor in its restructuring efforts. The Debtor selected Kurtzman Carson Consultants LLC as its claims agent. The U.S. Trustee for Region 16 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, its listed total assets of $643,197,000 and total debts of $320,630,000. GERDAU AMERISTEEL: Strong Performance Cues S&P's Stable Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Tampa, Florida-based Gerdau Ameristeel Corp., to stable from negative. All ratings are affirmed, including the 'BB+' corporate credit rating. "The outlook revision reflects Gerdau's strong recent operating performance, partly as a result of the significant contribution from the Chaparral acquisition; solid credit metrics; and currently favorable industry conditions, characterized by low import competition that has allowed steel producers to realize high prices despite slowing demand in some markets," said Standard & Poor's credit analyst Marie Shmaruk. Although debt levels remain somewhat high at this point in the cycle, the company has minimal near-term debt maturities and adequate free cash flow generation. Moreover, S&P expect Gerdau Ameristeel will have sufficient cash on hand and generate sufficient cash flow in the next several quarters to fund capital expenditures and smaller bolt-on acquisitions without meaningfully increasing leverage. Total debt, adjusted for pension and other postretirement benefits and operating leases, was about $3.3 billion on March 31, 2008, and debt to EBITDA was about 2.7x, with debt to capitalization at 46%. The company has historically targeted debt to EBITDA below 2.5x and debt to capital of less than 35%. The rating reflects the company's highly cyclical and intensely competitive product mix, predominantly composed of commodity steel products; industrywide cost pressures; aggressive growth strategy, and currently high financial leverage. The rating also reflects its good market share in long products, the enhanced product offering gained from Chaparral, its historically conservative financial policy, and the support of Gerdau S.A., which guarantees the debt incurred to acquire Chaparral. Gerdau Ameristeel is the second-largest minimill steel producer in North America with total annual melt capacity of approximately 12 million tons of mill-finished steel product. The company is also somewhat vertically integrated and operates a total of 19 minimills; 19 scrap recycling facilities, which meet more that 30% of its internal scrap needs; and 65 downstream manufacturing facilities. The company owns 50% of a joint venture (Gallatin) that produces flat-rolled steel. The Gallatin venture is a low- cost operation and has been a consistent and meaningful contributor to earnings and cash flow. GENERAL MOTORS: Bankruptcy Fears Overblown, JPMorgan Analyst Says ----------------------------------------------------------------- JPMorgan analyst Himanshu Patel said in a conference call Thursday that General Motors Corp. is not "in danger of an imminent bankruptcy" and that bankruptcy fears have been overblown, the Associated Press reports. Mr. Patel, however, said GM will need to raise about $10,000,000,000 to weather the downturn in U.S. auto sales, AP continues. As reported by the Troubled Company Reporter yesterday, Merrill Lynch analyst John Murphy said a bankruptcy filing for GM is not impossible "if the market continues to deteriorate and significant incremental capital is not raised." Mr. Murphy, in a research note, said GM will need to raise $15,000,000,000 in capital to fund its operations for the next two years. Mr. Murphy, according to the reports, warned GM is burning through cash faster than investors realize. In his post at MLive.com, Rick Haglund, citing an industry expert, said GM could file for Chapter 11 for its North American operations, similar to what Delphi Corp. did in 2005. Mr. Haglund said GM is profitable and growing in every other region of the world in which it operates. According to Dow Jones, Shelly Lombard, an auto analyst at Gimme Credit, said while GM may need additional liquidity, some of the money required may just be cash for an "emotional security blanket" to assuage investors' anxiety. David Welch, in his post at BusinessWeek, noted that GM's stock is trading at under $10 a share and that the company's market capitalization is roughly $5,700,000,000. Mr. Welch said certain investors could buy control of GM for less than $3,000,000,000, pointing out that billionaire investor Kirk Kerkorian could come up with that money, since he tabled a $4,500,000,000 bid for Chrysler LLC last year. Mr. Kerkorian is already invested in Ford, and hence not a candidate for a run at GM, Mr. Welch added. GM's shares slid to a 54-year low Wednesday due to bankruptcy fears. GM shares are up 3.6% to $10.34 Thursday, AP notes. Mr. Patel believes GM doesn't need cash immediately, since it has enough to fund what Mr. Patel expects will be an $18,000,000,000 cash burn through 2009, AP relates. Mr. Patel also believes GM will attempt to raise funds and announce further restructuring in the third quarter of 2008, AP adds. About General Motors Based in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. At March 31, 2008, GM's balance sheet showed total assets of $145,741,000,000 and total debts of $186,784,000,000, resulting in a stockholders' deficit of $41,043,000,000. Deficit, at Dec. 31, 2007, and March 31, 2007, was $37,094,000,000 and $4,558,000,000, respectively. * * * As reported in the Troubled Company Reporter on June 24, 2008, DBRS has placed the ratings of General Motors Corporation and General Motors of Canada Limited Under Review with Negative Implications. The rating action reflects the structural deterioration of the company's operations in North America brought on by high oil prices and a slowing U.S. economy. Standard & Poor's Ratings Services is placing its corporate credit ratings on the three U.S. automakers, General Motors Corp., Ford Motor Co., and Chrysler LLC, on CreditWatch with negative implications, citing the need to evaluate the financial damage being inflicted by deteriorating U.S. industry conditions--largely as a result of high gasoline prices. Included in the CreditWatch placement are the finance units Ford Motor Credit Co. and DaimlerChrysler Financial Services Americas LLC, as well as GM's 49%-owned finance affiliate GMAC LLC. As related in the Troubled Company Reporter on June 5, 2008, Standard & Poor's Ratings Services said that its ratings on General Motors Corp. (B/Negative/B-3) are not immediately affected by the company's announcement that it will cease production at four North American truck plants over the next two years. These closures are in response to the re-energized shift in consumer demand away from light trucks. GM previously said only one shift was being eliminated at each of the four truck plants. Production is being increased at plants producing small and midsize cars, but the cash contribution margin from these smaller vehicles is far less than that of light trucks. GENERAL STORE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: General Store Properties LLC dba Canton Feed and Supply LLC 465 Albany Turnpike Canton, CT 06019 Bankruptcy Case No.: 08-20843 Type of Business: Dana Mathes is the sole member of the Debtor. Chapter 11 Petition Date: May 9, 2008 Court: District of Connecticut (Hartford) Judge: Robert L. Krechevsky Debtor's Counsel: Anthony s. Novak, Esq. (anthonysnovak@aol.com) Lobo & Novak LLP 1331 Silas Deane Highway #202 Weatherford, CT 06109 Tel: (860) 257-1980 Fax: (860) 257-1988 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/ctb08-20843.pdf GEORGETTE LIGHTPIPE: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Georgette Lightpipe fka Georgette Abeyta fka Georgette Wahl 20132 Cove Circle Huntington Beach, CA 92646 Bankruptcy Case No.: 08-12797 Description: The Debtor's estranged spouse, Thomas Lightpipe, filed separate voluntary chapter 11 petition on April 14, 2008 (Bankr. C.D. Calif. Case No. 08-14009). Chapter 11 Petition Date: May 21, 2008 Court: Central District of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Robert B. Rosenstein, Esq. (robert@rosenhitz.com) Rosenstein & Hitzeman, AAPLC 28600 Mercedes St Ste 100 Temecula, CA 92590 Tel: (951) 296-3888 Fax: (951) 296-3889 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/cacb08-12797_pet.pdf A copy of the Debtor's creditors list is available for free at: http://bankrupt.com/misc/cacb08-12797_cred.pdf GLOBAL LAND: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Global Land Development Inc. 27305 West Live Oak Road A-1403 Castaic, CA 91384 Bankruptcy Case No.: 08-13384 Description: The Debtor filed chapter 11 petition on Feb. 1, 2007 (Case No. 07-10358). Its affiliate, USA SB Homes Inc., filed chapter 11 petition on July 5, 2007 (Bankr. Los Angeles Case No. 07-14074). Both cases were subsequently dismissed. Chapter 11 Petition Date: May 23, 2008 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Andrew Kim, Esq. 3701 Wilshire Boulevard, #1050 Los Angeles, CA 90010 Tel: (213) 386-4497 Estimated Assets: $1,00,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 The Debtor did not file a list of unsecured creditors. GREEN VALLEY: S&P Holds 'B' Rating and Revises Outlook to Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based Green Valley Ranch Gaming LLC to negative from stable. At the same time, S&P affirmed the ratings on the company, including the 'B' corporate credit rating. "The outlook revision reflects our concern that ongoing softness in the Las Vegas locals market will continue to drive earnings declines, leading to weaker credit measures," said Standard & Poor's credit analyst Ben Bubeck. In addition, operating softness may pressure GVR's ability to maintain compliance with its bank covenants, despite the fact that covenant levels under its bank facility were recently amended. GVR has only a small amount outstanding under its revolving credit facility, but it is currently generating a modest amount of free cash flow, which, along with cash balances, could be used to pay down the revolver balance to avoid a covenant violation. However, S&P view the potential loss of access to this facility negatively. The rating on GVR reflects the company's reliance on a single source of cash flow, highly competitive market conditions, and a tough operating environment given weak economic conditions. It also reflects weak credit metrics following a special dividend to owners in early 2007, with leverage of more than 7x and EBITDAM interest coverage of less than 2x as of March 31, 2008. These factors are offset partially by the property's high quality and good location, as well as solid market demographics. GVR, the owner of Green Valley Ranch Resort Spa Casino, is 50% owned by Station Casinos Inc., which also manages the facility. GREENWICH CAPITAL: S&P Puts Low-B Ratings on Eight Cert. Classes ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes of commercial mortgage pass-through certificates from Greenwich Capital Commercial Funding Corp.'s series 2006-FL4 and removed them from CreditWatch with negative implications, where they were placed on March 19, 2008. Concurrently, S&P lowered its ratings on seven other classes, including the "GSM," "MON," and "WSC" raked certificates, from this transaction that were not previously on CreditWatch. S&P also raised its ratings on the "TRU" raked certificates and affirmed our ratings on 12 other classes from this series. The downgrades reflect Standard & Poor's analysis of the Mondrian-Scottsdale, Galleria Sheraton-Metairie, Westchester Shopping Center, and Scripps Center loans, as well as the previously specially serviced Greenwich Residential loan. Together, these loans represent 16% of the pooled balance. Current operating performance for the five properties is not meeting Standard & Poor's initial expectations and is discussed in further detail below. The other 15 loans representing 84% of the pooled balance are secured by collateral that is performing at or close to S&P's initial expectations. The raised and affirmed ratings reflect Standard & Poor's analysis of the remaining loans in the pool, as well as increased credit enhancement levels resulting from loan payoffs. As of the June 6, 2008, remittance report, the pooled trust collateral consisted of the senior participation interests in 17 floating-rate interest-only mortgage loans, two floating-rate interest-only whole-mortgage loans, and one pari passu interest- only mortgage loan. All of the loans are indexed to one-month LIBOR. The pool balance has declined 41% to $585.7 million since issuance. Details on the five underperforming loans are: -- Greenwich Residential, the sixth-largest loan in the pool, has a whole-loan balance of $43.8 million that is split into three participation pieces: a $27.4 million senior interest that makes up 5% of the pooled trust balance and two nontrust subordinate interests totaling $16.4 million. This loan was originally secured by a 34-unit condominium conversion project in Greenwich, Connecticut. Based on discussions with the special servicer, the unit pricing may have been too high reflecting a softening market, and only two units have sold to date. Following the transfer of the loan to the special servicer on Feb. 6, 2008, due to a monetary default, the loan was cured and made current. The preferred equity holder has taken control of the borrower and has infused additional capital into the project. In addition, the terms of the loan have been modified. The modifications include providing four six-month extension options instead of the previous one one-year extension option, reducing the minimum release prices, and changing the maturity date to February 2009. The borrower is currently marketing a few units at a time for sale while renting out the other vacant units. A $11.7 million appraisal reduction amount was in effect against the loan based on an updated March 2008 appraisal, which indicates a valuation decline to $38.9 million from $55.2 million at issuance. Standard & Poor's incorporated the revised appraisal assumptions to derive a valuation that is significantly below its level at issuance. -- Mondrian - Scottsdale, the ninth-largest loan in the pool, has a whole-loan balance of $26.0 million that is divided into two pieces: a $23.4 million senior pooled component that makes up 4% of the pooled trust balance and a $2.6 million subordinate nonpooled component that provides the sole source of cash flow for the "MON" raked certificates. In addition, the borrower's equity interests in the property secure a $14.0 million mezzanine loan. A 194-room full-service boutique hotel in Scottsdale, Arizona, secures this loan. The loan appears on the servicer's watchlist because it reported a negative cash flow for the nine months ended September 2007 and because of its June 2008 maturity date. The borrower has since exercised one of its three one-year extension options. Year-end 2007 occupancy was 56%. Based on Standard & Poor's review of the borrower's 2007 operating statements and 2008 budget, its current valuation is significantly below its level at issuance. The property is currently performing below its expectations due to a substantial increase in operating expenses and a low occupancy rate, which S&P attribute to a weakened local economic market and delayed renovation work. -- Galleria Sheraton Metairie, the 19th-largest loan into the pool, has a whole-loan balance of $17.0 million that is comprised of a $8.5 million senior pooled component that makes up 1% of the pooled trust balance, a $2.0 million subordinate nonpooled component that supports the "GSM" raked certificate classes, and a $6.5 million nontrust junior participation interest. This loan, secured by a seven-story, 182-room hotel in Metairie, Louisiana, is on the servicer's watchlist because it reported a low debt service coverage of 0.29x as of September 2007. Occupancy was 65% as of December 2007. Standard & Poor's adjusted net cash flow is significantly below its level at issuance. Operating performance has been affected by depressed average room rates at the hotel coupled with weak local market conditions that has driven down occupancy. The loan matures in June 2009, and has two one-year extension options remaining. -- Westchester Shopping Center, the 12th-largest loan in the pool, has a whole-loan balance of $38.0 million. The loan, secured by a 157,350-sq.-ft. neighborhood shopping center in Los Angeles, California, consists of a $18.6 million senior pooled component that makes up 3% of the pooled trust balance, a $3.2 million subordinate nonpooled component that is raked to the "WSC" certificates, and a $16.2 million nontrust junior participation interest, $13.2 million of which has been funded to date. Wachovia reported a DSC of 1.09x as of June 2007 and 100% occupancy as of May 2008. Standard & Poor's NCF has declined 11% since issuance because of lower than expected rental income. The loan matures in February 2009 and has two one-year extension options remaining. -- Scripps Center, the 13th-largest loan in the pool, has a whole-loan balance of $36.6 million. The loan, collateralized by three class B office/research and development buildings totaling 229,100 sq. ft. in Costa Mesa, California, consists of a $17.7 million senior pooled component that makes up 3% of the pooled trust balance, a $2.3 million subordinate nonpooled component that supports the "SCR" raked certificates (not rated by Standard & Poor's), and a $16.6 million nontrust junior participation interest. The master servicer, Wachovia Bank N.A., reported a 0.52x DSC as of September 2007 and 48% occupancy as of May 2008, compared with a 2.91x DSC and 64% occupancy at issuance. Standard & Poor's current valuation is 21% below its level at issuance. The loan matures in December 2008 and has two one-year extension options remaining. In addition to the aforementioned loans, Wachovia reported eight additional loans on its watchlist; details of these loans are: -- The largest loan on the servicer's watchlist and second- largest loan in the pool, Metropolitan Tower, has a $145.5 million whole-loan balance. This loan consists of a $72.8 million senior pooled component that makes up 12% of the pooled trust balance, a $8.7 million subordinate nonpooled component that is raked to the "MET" certificates (not rated by Standard & Poor's), and two nontrust junior participation interests totaling $63.9 million, of which $54.0 million has been funded to date. A 259,800-sq.-ft. class A office building that represents a condominium interest in the first 18 stories of a 66-story building in midtown Manhattan secures this loan. The loan is on the watchlist due to a low DSC of 0.17x as of September 2007. The property underwent a $1.7 million lobby renovation that was completed in October 2007. The collateral was 40% occupied one and a half years ago and is currently 72% occupied as of March 2008. Standard & Poor's current valuation is comparable to its level at issuance. The loan matures in November 2009 and has two one-year extension options remaining. -- CityWest, the fourth-largest loan in the pool, has a whole-loan balance of $92.4 million that is split into three participation pieces: a $52.3 million senior interest that makes up 9% of the pooled balance and two nontrust junior interests totaling $40.1 million, of which $38.3 million has been funded to date. The loan, collateralized by two class A office buildings totaling 723,650 sq. ft. in Houston, Texas, was placed on Wachovia's watchlist due to a low DSC of 0.96x as of June 2007 and its July 2008 maturity date. The borrower has since exercised one of its three one-year extension options. Occupancy was 89% as of November 2007. Standard & Poor's adjusted NCF is comparable to its level at issuance. -- Sheraton Gateway LAX, the fifth-largest loan in the pool, has a whole-loan balance of $80.0 million. The loan, secured by an 802-key full-service hotel adjacent to the LAX International Airport in Los Angeles, California, consists of a $42.4 million senior pooled component that makes up 7% of the pooled trust balance, a $1.0 million subordinate nonpooled component raked to the "N-LAX" certificate (not rated by Standard & Poor's), and a $36.6 million nontrust junior participation interest. In January 2007, a $5.3 million ballroom renovation project was completed at the hotel. The loan is on the servicer's watchlist because it reported a low DSC of 0.91x as of June 2007. Occupancy was 82% as of year-end 2007. Standard & Poor's adjusted NCF declined 7% since issuance. The loan matures November 2008, and has three one-year extension options remaining. -- Northwest Plaza Shopping Center, the eighth-largest loan in the pool, has a whole-loan balance of $30.0 million that is split into a $25.4 million senior pooled component that makes up 4% of the pooled trust balance and a $4.6 million subordinate nonpooled component that provides the sole source of cash flow for the "NW" raked certificates (not rated by Standard & Poor's). The loan, secured by a 1.7 million-sq.-ft. regional retail mall and a 12-story, 152,600-sq.-ft. class B office building in St. Ann, Mo., appears on the servicer's watchlist due to a drop in DSC to 1.50x as of September 2007 from 3.29x at issuance. Occupancy was 64% as of December 2007, compared with 80% at issuance. The sponsors, after refinancing this loan, plan to shut down the mall for one to two years to completely redevelop and reposition the mall. The sponsor's redevelopment plans are progressing in line with S&P's expectations at issuance. The loan matures in June 2009 and has two one-year extension options remaining. -- Trumbull Data Center, the 10th-largest loan in the pool, has a $31.2 million whole-loan balance that consists of a $21.9 million senior pooled component that makes up 4% of the pooled trust balance, a $5.3 million subordinate nonpooled component that supports the "TRU" raked certificates, and a $4.0 million nontrust junior participation interest. The loan, secured by a two-story, 45,000-sq.-ft. office building and a three-story, 59,600- sq.-ft. data center building in Trumbull, Connecticut, is on Wachovia's watchlist due to its upcoming August 2008 maturity date. The borrower intends to exercise one of its three one-year extension options. Occupancy was 87% as of January 2008. Standard & Poor's valuation increased 36% since issuance. -- 260 East 161st Street, the 11th-largest loan in the pool, has a whole-loan balance of $30.0 million. The loan, collateralized by a 10-story, 223,600-sq.-ft. class B office building in Bronx, N.Y., consists of a $20.2 million senior pooled component that makes up 3% of the pooled trust balance, a $0.8 million subordinate nonpooled component that is raked to the "N-E161" certificate (not rated by Standard & Poor's), and a $9.0 million nontrust junior participation interest. The loan is on the servicer's watchlist due to drop in occupancy from 100% at issuance to 88% as of December 2007. Reported DSC was 1.43x as of June 2007. Standard & Poor's NCF was comparable to its level at issuance. The loan matures in April 2009 and has two one-year extension options remaining. -- Plaza Del Sol, the 15th-largest loan in the pool, has a whole-loan balance of $24.2 million and is collateralized by a 196-unit multifamily complex with 12,250-sq.-ft. of retail space in Santa Ana, California. The loan consists of a $15.9 million senior pooled component that makes up 3% of the pooled trust balance and a $2.2 million subordinate nonpooled component that provides the sole source of cash flow for the "PDS" raked certificates, and a $6.1 million nontrust junior participation interest. Wachovia placed this loan on its watchlist because it reported a low DSC of 0.36x as of September 2007. Occupancy was 93% as of March 2008. Standard & Poor's adjusted NCF was comparable to its level at issuance. The loan matures in March 2009 and has two 12-month extension options remaining. -- 2600 West Olive Avenue, the 18th-largest loan in the pool, has a $38.6 million whole-loan balance. The loan, secured by a class A, 148,300-sq.-ft. office building in Burbank, California, consists of a $15.7 million senior pooled component that makes up 3% of the pooled trust balance and a $6.4 million subordinate nonpooled component that supports the "2600" rake certificates (not rated by Standard & Poor's), and a $16.6 million nontrust junior participation interest. This loan is on Wachovia's watchlist because it reported a low DSC of 0.13x as of September 2007 and a low occupancy of 58% as of May 2008. Standard & Poor's current evaluation arrived at a NCF that is 7% higher than its level at issuance. The loan matures in December 2008 and has two one-year extension options remaining. Ratings Lowered and Removed from Creditwatch Negative Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2006-FL4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ J BB BBB/Watch Neg 4.27% K BB- BBB/Watch Neg 3.03% L B BBB-/Watch Neg N/A Ratings Lowered Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2006-FL4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ G BBB A- 9.69% H BBB- BBB+ 6.69% N-GSM B BBB+ N/A O-GSM B- BBB- N/A N-MON B BBB N/A O-MON B- BBB- N/A P-WSC BB+ BBB- N/A Ratings Raised Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2006-FL4 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ N-TRU AA+ AA- N/A O-TRU A+ A- N/A P-TRU A- BBB N/A Q-TRU BBB+ BBB- N/A S-TRU BBB- BB+ N/A Ratings Affirmed Greenwich Capital Commercial Funding Corp. Commercial mortgage pass-through certificates series 2006-FL4 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 70.73% A-2 AAA 31.39% B AA+ 25.35% C AA 20.11% D AA- 17.04% E A+ 14.18% F A 12.26% X-2 AAA N/A N-WSC A- N/A O-WSC BBB N/A N-PDS BBB+ N/A O-PDS BBB- N/A N/A -- Not applicable. HANCOCK FABRICS: Plan Confirmation Hearing Set for July 22 ---------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware scheduled a hearing to consider confirmation of the Joint Consolidated Plan of Reorganization of Hancock Fabrics Inc. and its debtor-affiliates for July 22, 2008, at 10:00 a.m., Eastern Time. Parties have until July 15, 4:00 p.m., Eastern Time, to file objections to the Plan. The Court approved the form, manner and sufficiency of the notice of confirmation hearing and disclosures regarding the Plan, to be transmitted to all creditors, stockholders, and parties-in- interest in the Chapter 11 cases. The Court also approved the terms of, and authorized the Debtors to enter into, the commitment letter and fee letter for the backstop of the Debtors' offering of $20,000,000 of secured notes and warrants to purchase 8,000,000 shares of Hancock Fabrics, Inc. common stock pursuant to a rights offering. As reported in the Troubled Company Reporter on June 12, 2008, the Debtors delivered on June 10, 2008, to the Court a joint consolidated Chapter 11 plan of reorganization. Under the plan, among other things, general unsecured creditors will receive cash equal to 104.93% of their claims. The Debtors' Plan is financed in part by a rights offering to raise $20,000,000. The offering to current shareholders is for five year floating rate notes to be secured by a lien on assets junior to the bank financing. Hancock will have the right for the first year to pay interest with more notes. The sale of the $20,000,000 in notes is being backstopped by Sopris Capital Partners LP, Berg & Berg Enterprises, LLC, and Trellus Management who are obligated to purchase any of the notes not bought by shareholders. The Debtors have also secured a $100,000,000 commitment for a exit revolving credit from General Electric Capital Corp. The commitment will expire if Hancock won't have the Chapter 11 plan confirmed and won't emerged from reorganization by August 29, 2008. A full-text copy of the Debtors' Plan is available for free at: http://bankrupt.com/misc/HancockReorgPlan.pdf About Hancock Fabrics Headquartered in Baldwyn, Mississippi, Hancock Fabrics Inc. (OTC: HKFIQ) -- http://www.hancockfabrics.com/-- is a specialty retailer of a wide selection of fashion and home decorating textiles, sewing accessories, needlecraft supplies and sewing machines. Hancock Fabrics is one of the largest fabric retailers in the United States, currently operating approximately 400 retail stores in approximately 40 states. The company employs approximately 7,500 people on a full-time and part-time basis. Most of the company's employees work in its retail stores, or in field management to support its retail stores. The company and six of its debtor-affiliates filed for chapter 11 protection on March 21, 2007 (Bankr. D. Del. Lead Case No. 07-10353). Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell, represent the Debtors. The U.S. Trustee for Region 3 appointed five creditors to serve on an Official Committee of Unsecured Creditors. As of Sept. 1, 2007, Hancock Fabrics disclosed total assets of $159,673,000 and total liabilities of 122,316,000. (Hancock Fabric Bankruptcy News, Issue No. 36, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). HAVEN HEALTHCARE: To Sell Nursing Homes for $93 Mil. Credit Bid --------------------------------------------------------------- The Hon. Albert Dabrowski of the U.S. Bankruptcy Court for the District of Connecticut considered on Wednesday, July 2, 2008, a request by Haven Healthcare Management LLC and its debtor- affiliates to sell their nursing homes to secured creditors for a $93 million credit bid, Jamie Mason of The Deal says. Judge Dabrowski has not decided on the matter, Debtors' counsel, Andrew P. Lederman, Esq., of Moses & Singer LLP said, according to The Deal. Mr. Lederman added that given the urgency of the matter, the Judge will hopefully issue a ruling soon, The Deal says. Court documents show that after two failed attempts to sell the nursing homes, there is no other option for the Debtors besides the credit bid, The Deal notes. Haven related that the credit bid sale is in the best interest of the estate, court documents show, The Deal says. Haven said that it has no cash or financing to continue after July 7, 2008, the operation of the assets whose value is deteriorating, court filings also show, The Deal adds. CapitalSource Finance LLC, Nationwide Health Properties Inc., and Omega Healthcare Investors Inc. have agreed to provide $50 million debtor-in-possession fund for the Debtors until Monday, July 7. Haven also asserted court documents that selling the assets to secured creditors won't disrupt nursing homes residents and won't threaten workers' jobs, The Deal notes. Formation Capital's $85MM Buyout Deal Fails The Troubled Company Reporter related on July 1, 2008, that a deal to sell the Haven's nursing homes has collapsed two weeks after it was disclosed, forcing state officials to devise a new plan to operate the chain. State Attorney General Richard Blumenthal, said that Formation Capital LLC of Alpharetta, Georgia, notified the state that it was pulling out of the $85 million deal to take over 15 of Haven's homes in Connecticut and 10 in other New England states. Prior to the sale deal with Formation Capital, the nursing homes were markted to LifeHouse Retirement Properties Inc. for $105 million, The Deal relates. However, LifeHouse withdrew from the sale set for May 19, 2008, when the state said that its new Medicaid reimbursement rates for Haven residents were lowered, The Deal reports. Omega to Operate Chain A back-up plan is to turn over the homes to three secured creditors who provided financing for Haven, the TCR said. CapitalSource, Nationwide, and Omega would oversee the homes using operators approved by the state. In a press statement, Omega stated that, together with an experienced nursing home management team, it has formed a new company to operate the 15 Haven facilities located on real estate it owns. This was due to the termination of a third party's agreement to acquire substantially all of the assets of its subsidiary, Haven Eldercare LLC, out of bankruptcy. Omega expected the Court to approve the new management team taking control based on Omega's rights as a lessor and a secured creditor under existing agreements. Committee Balks at Credit Bid Offer The Official Committee of Unsecured Creditors said that the Debtor has the alternative to abandon the assets to its lenders and the state outside of bankruptcy if it deems the assets are burdensome or has no benefit to the estate, The Deal relates. The sale of Haven, the Committee said, may effectively end the case but leaves no fund for the unsecured, administrative, and priority creditors, The Deal notes. About Omega HealthCare Investors Inc. Based in Timonium, Maryland, Omega HealthCare Investors, Inc. (NYSE:OHI) -- http://www.omegahealthcare.com/-- is a real estate investment trust investing in and providing financing to the long-term care industry. At Sept. 30, 2007, the company owned or held mortgages on 238 SNFs and assisted living facilities with approximately 27,465 beds located in 27 states and operated by 29 third-party healthcare operating companies. About Haven Healthcare Headquartered in Middletown, Connecticut, Haven Healthcare Management LLC -- http://www.havenhealthcare.com/-- provide nursing care to the elderly in New England, Connecticut. The company operates health centers and assisted living facilities. In addition, the company specializes in short-term rehabilitative care and long-term care. The company and 46 of its affiliates filed for chapter 11 protection on Nov. 22, 2007 (Bankr. D. Conn. Lead Case No. 07- 32719). Moses and Singer LLP serves as the Debtors' counsel. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors to serve on an Official Committee of Unsecured Creditors in this case. Pepper Hamilton LLP is counsel and Neubert Pepe & Monteith P.C. as its co-counsel to the Creditors Committee. When the Debtors sought protection from their creditors, they listed assets and debts between $1 million to $100 million. The Debtors' consolidated list of 50 largest unsecured creditors showed total claims of more than $20 million. * * * As of Feb. 29, 2008, the Debtors' balance sheet showed total assets of $25,965,631 and total liabilities of $38,597,720 resulting in a $12,632,089 stockholders' deficit. HOLMES FAMILY: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: The Holmes Family Interests, Inc. 2616 Thomas Ave. Dallas, TX 75204 Bankruptcy Case No.: 08-41744 Chapter 11 Petition Date: July 2, 2008 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Joyce W. Lindauer, Esq. Email: courts@joycelindauer.com 8140 Walnut Hill Lane, Ste. 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 http://joycelindauer.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. IMMUNICON CORP: Court Approves Bid Procedures for Sale of Assets ---------------------------------------------------------------- The United States Bankruptcy Court in Wilmington, Delaware, approved bidding procedures for the sale of the assets of Immunicon Corp., Bill Rochelle of Bloomberg News reports. Immunicon reached an agreement with Veridex LLC, a subsidiary of Johnson & Johnson, to sell its assets for at least $31 million, Mr. Rochelle says. An auction will take place on July 29, 2008, followed by a sale hearing on July 30, 2008, the report relates. According to Bloomberg, in the event Immunicon consummates the sale of its assets with another party, Veridex will be paid a $1 million break-up fee plus $300,000 in expense reimbursement. Headquartered in Huntington Valley, Pennsylvania, Immunicon Corporation -- http://www.immunicon.com/-- offers products and services for cell analysis and molecular research. The company filed for Chapter 11 protection on June 11, 2008 (Bankr. D. Del. Case No.08-11178). Sheldon K. Rennie, Esq., at Fox Rothschild LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed total assets of $9,231,264 and total debts of $24,309,838. INTELSAT JACKSON: S&P Assigns 'BB-' Rating on $811MM Credit Deal ---------------------------------------------------------------- On July 2, 2008, Standard & Poor's Ratings Services assigned a 'BB-' issue-level rating and a '1' recovery rating to Intelsat Jackson Holdings Ltd.'s $811 million senior unsecured credit agreement due 2014. The '1' recovery rating indicates the expectation for very high (90%-100%) recovery in the event of a payment default. IJH is an indirect subsidiary of Bermuda-based Intelsat Ltd. (B/Stable/--). The 'B' corporate credit rating on parent Intelsat Ltd. remains unchanged and the outlook is stable. Intelsat is the largest provider of fixed satellite communications services worldwide, supplying voice, data, and video connectivity globally through its fleet of 53 owned satellites. Proceeds from the new debt will be used to finance the repurchase of debt tendered as a result of change of control offers triggered by the Feb. 4, 2008, acquisition of the company by an investor group led by BC Partners and Silver Lake. The ratings are based on preliminary terms and conditions and are subject to review of final documentation. The ratings on Intelsat reflect a highly leveraged financial profile that allows for limited financial flexibility in the medium term and overwhelms very attractive business characteristics. A strong business risk profile reflects the company's global scale, strong geographic diversification, and strong revenue backlog that provides for significant cash flow visibility. This fundamentally sound business profile enables the company to support such high levels of leverage at this rating. ITG VEGAS: Sells Ship for $15 Mil. Under 4-Day Closing Guarantee ---------------------------------------------------------------- ITG Vegas Inc., dba Palm Beach Princess Inc. and Palm Beach Casino Line, sold its sole ship, Palm Beach Princess, for $15 million to International Casinos SA and IKO Cruise Lines LLC under a quick sale, Terry Brennan of The Deal relates. The two buyers outbid Shipping & Leisure Holdings LLC, which also offered $15 million, by guaranteeing sale closing within four days, the report says. However, the sale, according to an undisclosed attorney, will close either July 10 or July 11 due to some technical filing problems with the U.S. Bankruptcy Court for the Southern District of Florida, The Deal says. Should the two buyers fail to close the sale, Shipping & Leisure will stand as back-up bidder, court documents disclose, The Deal notes. Mark Calvert, chapter 11 trustee, conducted an auction on Tuesday, July 1, 2008, without a stalking horse bidder, The Deal relates. Mr. Calvert was appointed as the chapter 11 trustee on July 23, 2007, The Deal adds. The Troubled Company Reporter said on Dec. 11, 2006, that Palm Beach Princess, which is the Debtor's main operation, suffered a $12 million net loss on $24.7 million of revenue for the first nine months of 2006, in contrast to a $7.6 million loss on $26.3 million of revenue in 2005. PDS Gaming Corp., one of the Debtors' creditors, has filed suit in Palm Beach County Circuit Court last month, alleging a $38.6 million unpaid claim in loans or the foreclosure on the boats and equipment under a financing agreement with the companies. The Debtors, which are facing state tax liens, also own two vessels not in service, the Royal Star and the Big Easy. The vessels and equipment were valued at $39.6 million and listed $51.9 million in current debts as of Sept. 30, 2006. The Debtors plans to ask Monday, July 7, 2008, approval from Judge Judge Paul Hyman, Jr., to transfer licenses and leases to the new owners, The Deal quotes court documents as stating. About ITG Vegas Riviera Beach, Florida-based ITG Vegas Inc., dba Palm Beach Princess Inc. and Palm Beach Casino Line, -- http://www.pbcasino.com/-- operates coastal entertainment cruises. The Palm Beach Princess vessel operates 14 scheduled five- to six-hour coastal gambling cruises per week from the Port of Palm Beach. ITG Vegas and its seven affiliates filed their chapter 11 petition on Dec. 4, 2006 (Bankr. S.D. Fla. Lead Case Nos. 06-16350 through 06-16357). Judge Steven H. Friedman presides over the case. John W. Kozyak, Esq., represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy they listed (assets: debts) of: ITG Vegas Inc. ($28,738,364:$38,833,865); ITG Palm Beach LLC ($20,679,047:$36,419,042); Cruise Holdings I LLC ($21,802,340:$41,248,221); Cruise Holdings II LLC ($9,578,942:$35,250,366); Royal Star Entertainment LLC ($3,199,344:$32,979,703); Riviera Beach Entertainment LLC ($0:$37,083,631); Orion Casino Corporation $4,278,668:$34,006,597); and International Thoroughbred Gaming Development Corp. ($289,374:$33,606,651). JAMIE MILOS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Jamie L. Milos, DDS aka Jamie L. Lung Jamie L. Milos-Lung Jamie L. Milos DDS PC 3402 N Trainer Rd Rockford, IL 61114 Bankruptcy Case No.: 08-71984 Chapter 11 Petition Date: June 24, 2008 Court: Northern District of Illinois (Rockford) Debtor's Counsel: Bernard J. Natale Bernard J. Natale Ltd. Suite 201, 6833 Stalter Drive Rockford, IL 61108 Tel (815) 964-4700 Fax (815) 227-5532 Email natalelaw@bjnatalelaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/ilnb08-71984.pdf JASON ROGGENSEE: Case Summary & 16 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Jason Ronald Roggensee 2721 East Tamarisk St. Gilbert, AZ 85296 Bankruptcy Case No.: 08-07826 Chapter 11 Petition Date: June 27, 2008 Court: District of Arizona (Phoenix) Judge: Hon. Randolph J. Haines Debtor's Counsel: Allan D. Newdelman (anewdelman@qwestoffice.net) Allan D. Newdelman PC 80 E. Columbus Ave. Phoenix, AZ 85012 Telephone (602) 264-4550 Fax (602) 277-0144 Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million A copy of the debtor's petition and a list of its 16 largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb08-07826.pdf LAKESIDE CDO I: Moody's Cuts FR Notes Rating by 4 Notches to B2 --------------------------------------------------------------- Moody's Investors Service has downgraded and placed on review for possible further downgrade the ratings on these notes issued by Lakeside CDO I, LTD. Class Description: Class A-1 First Priority Senior Secured Floating Rate Notes -- Prior Rating: Aaa -- Current Rating: Aa2, on review for possible downgrade Class Description: Class A-2 Second Priority Senior Secured Floating Rate Notes -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: B2, on review for possible downgrade According to Moody's, the rating actions reflect increased deterioration in the credit quality of the underlying portfolio. LEAR CORP: S&P's 'B+' Rating Unmoved by Proposed Credit Amendment ----------------------------------------------------------------- Standard & Poor's Ratings Services said that Lear Corp.'s proposed amendment to its senior credit facility to extend the revolving credit commitments from March 23, 2010, to Jan. 31, 2012, and to reduce the lender's level of commitment by at least one-third will have no effect on the company's corporate credit rating (B+/Stable/--). Moreover, new pricing will apply to the extended revolving commitments, whereby current interest rate margins increase by 100 basis points, and the current facility fee goes up by 25 bps. S&P expect Lear's revolving credit facility to remain of sufficient size after the extension. S&P will evaluate the effect, if any, on the existing recovery ratings on Lear's secured term loan and unsecured debt issues once the sizes of the old and new revolving credit commitments are known. LEINER HEALTH: Has Until July 31 to File Chapter 11 Plan -------------------------------------------------------- The Hon. Kevin J. Carey of the United States Bankruptcy Court for the District of Delaware extended the exclusive periods of Leiner Health Products Inc. and its debtor-affiliates to: a) file a Chapter 11 plan until July 31, 2008, and b) solicit acceptances of that plan until Oct. 11, 2008. As reported in the Troubled Company Reporter on June 25, 2008, the Debtors intend to present a Chapter 11 plan of liquidation and are working out to consummate the sale of all their assets for $371 million to NBTY Acquisition LLC, the designated stalking- horse bidder. The Debtors are also faced with several tasks in connection with the closing of the sale including the ongoing investigation by the Department of Justice into over-the-counter pharmaceutical manufacturing practices at the Debtors' facility in Fort Mill, South Carolina. On May 9, 2008, the Debtors sought the Court's permission to enter into a plea agreement with the DOJ and pay judgment of at least $10 million. About Leiner Health Based in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com/-- manufacture and supply store brand vitamins, minerals and nutritional supplements products, and over- the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to their primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. Houlihan Lokey Howard & Zukin Capital, Inc., provides investment banking and financial advisory services to the Debtors. Garden City Group Inc. serves as the Debtors' noticing, claims and balloting agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors in these cases. The Committee is represented by Saul Ewing LLP as bankruptcy counsel, and FTI Consulting Inc., as financial advisors. As reported in the Troubled Company Reporter on April 10, 2008, the Debtors' schedules of assets and liabilities showed total assets of $133,412,547 and total debts of $477,961,526. LEONARD BURNS: Case Summary & 2Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Leonard Joseph Burns 3135 Piute Ave. Phoenix, AZ 85050 Bankruptcy Case No.: 08-07550 Chapter 11 Petition Date: June 24, 2008 Court: District of Arizona (Phoenix) Debtor's Counsel: Blake D. Gunn P.O. Box 22146 Mesa, AZ 85277-2146 Tel (480) 710-8677 Email bgunn@gunnfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: 100,001 to $500,000 Debtor's 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Kristin Roossin Personal Loan $9,500 8863 E. Ann Way Scottsdale, AZ 85260 Capital One $5,000 P.O. Box 30281 Salt Lake City, UT 84130 LEVITT AND SONS: Files Chapter 11 Plan; Liquidates Assets --------------------------------------------------------- Levitt and Sons LLC and its debtor-affiliates, together with the Official Committee of Unsecured Creditors, delivered to the U.S. Bankruptcy Court for the Southern District of Florida a joint plan of liquidation on June 27, 2008. Levitt and Sons seeks to wind down its homebuilding operations. The plan filing came right as the company's exclusive right to file a Chapter 11 plan expired on Friday, June 27. "It's abundantly clear and fair to say that Levitt and Sons will not reorganize," The South Florida Sun-Sentinel quotes Paul Singerman, Esq., at Berger Singerman P.A., the company's counsel as saying. "It's just an awful market for residential developers." The Liquidation Plan designates claims of the company's creditors into specific classes and provides for the corresponding treatment for each claim class. A Plan Administrator will be appointed to oversee the contemplated winding down process of the Levitt and Sons business. Classification & Treatment of Claims Under the Debtors' Joint Liquidating Chapter 11 Plan, all claims against and equity interests: * for the LAS Consolidated Debtor are classified into 11 classes: Class Description ----- ----------- 1 Allowed Priority Claims 2 Allowed Secured Claims of Woodbridge 3 Allowed Secured Claims of Bank of America, N.A. 4 Allowed Secured Claims of KeyBank, N.A. 5 Allowed Secured Claim of AmTrust Bank (Hartwood Reserve) 6 Allowed Secured Claims of Wachovia Bank, N.A. 7 Allowed Post Petition DIP Financing Secured Claim of Wachovia Bank, N.A. 8 Allowed Other Secured Claims 9 Allowed General Unsecured Claims 10 Allowed Subordinated Claims 11 Allowed Equity Interests * for the Tennessee Consolidated Debtor are classified into eight classes: Class Description ----- ----------- 1 Allowed Priority Claims 2 Allowed Secured Claims of Regions Bank, N.A. 3 Allowed Secured Claim of Wachovia Bank, N.A. 4 Allowed Secured Claim of Financial Federal Savings Bank 5 Allowed Other Secured Claims 6 Allowed General Unsecured Claims 7 Allowed Subordinated Claims 8 Allowed Equity Interests Claims in Classes LAS-2, LAS-3, LAS-4, LAS-5, LAS-6, LAS-7, LAS- 8, LAS-9, LAS-10, LAS-11, TENN-2, TENN-3, TENN-4, TENN-5 AND TENN-6, TENN-7 AND TENN-8 are or may be Impaired. Holders of Claims in Classes LAS-10 and Tenn-7 and Equity Interests in LAS-11 and Tenn-8 are not expected to receive any distribution under the Plan, and accordingly, these Holders are deemed to reject the Plan, and their votes are not being solicited. Classes LAS-1 and Tenn-1 are Unimpaired and are, therefore, conclusively deemed to have accepted the Plan. The Administrative Expense Claims, Professional Claims and Priority Tax Claims have not been classified and are deemed not to be Impaired. Accordingly, a ballot for acceptance or rejection of the Plan is being provided only to holders of claims in classes LAS-2, LAS-3, LAS-4, LAS-5, LAS-6, LAS-7, LAS-8, LAS-9, TENN-2, TENN-3, TENN-4, TENN-5 AND TENN-6. A. LAS Consolidated Debtor Estimated Class Recovery ----- --------- LAS 1 100% LAS 2 Woodbridge settlement LAS 3 Based on Collateral LAS 4 Based on Collateral LAS 5 Up to 100% LAS 6 Pursuant to DIP Agreement LAS 7 Pursuant to DIP Agreement LAS 8 Based on Collateral LAS 9 Pro rata LAS 10 Pro rata LAS 11 None B. Tennessee Consolidated Debtor Estimated Class Recovery ----- --------- TENN 1 100% TENN 2 Regions Bank Sale Order TENN 3 Regions Bank Sale Order TENN 4 Regions Bank Sale Order TENN 5 Based on Collateral TENN 6 Pro rata TENN 7 Pro rata TENN 8 None John A. Dischner, the Debtors' executive vice president, relates that at this time, the Debtors cannot estimate the total amount of unpaid Allowed Administrative Expense Claims that will exist as of the Effective Date, including unpaid fees and expenses of professionals, as well as administrative expenses of vendors under Section 503(b)(9) of the U.S. Bankruptcy Code. Ordinary course postpetition liabilities will be paid pursuant to their terms. Compensation or reimbursement of expenses to Professionals will be paid to the extent allowed as an Allowed Administrative Expense by the Court. Notwithstanding anything to the contrary, the Allowed Administrative Expense Claims incurred in respect of the Wachovia Collateral under the Wachovia DIP Loan Agreement, including the professional fees of the Wachovia Collateral Administrator and his professionals during the Chapter 11 cases, will be paid solely from the loan provided by Wachovia Bank, National Association, pursuant to the Wachovia DIP Loan Agreement or from proceeds of the Wachovia Collateral or upon other terms acceptable to Wachovia. Therefore, neither the LAS Consolidated Debtor, the Tennessee Consolidated Debtor, nor the Plan Administrator will have any liability, Mr. Dischner says. Under the Plan, each Holder of an Allowed Priority Tax Claim will receive Cash equal to the amount of the allowed claim, without postpetition interest or penalty. At this time, the Debtors cannot estimate the total amount of unpaid Allowed Priority Tax claims as of the Effective Date, Mr. Dischner informs the Court. In addition, the Debtors will pay the United States Trustee the appropriate sum required pursuant to 28 U.S.C. Section 1930(a)(6) on the Effective Date, and provide an appropriate affidavit indicating Cash disbursements for all relevant periods. Notwithstanding anything to the contrary, the Plan Administrator and the Wachovia Collateral Administrator will also pay the U.S. Trustee the appropriate sum for post-confirmation periods within the time periods set forth in Section 1930(a)(6) until the earlier of the closing or upon dismissal of the applicable Chapter 11 case, or conversion of the Chapter 11 case to another chapter under the Bankruptcy Code. Upon payment of each post- confirmation payment, the Plan Administrator and Wachovia Collateral Administrator will provide the U.S. Trustee with a quarterly report and appropriate affidavit indicating income and disbursements for the relevant periods. Mr. Dischner says that, as of June 27, 2008, the Debtors have paid all fees due and owing the U.S. Trustee. The Plan Administrator and Wachovia Collateral Administrator, as applicable, anticipate paying all fees through confirmation of the Plan and thereafter, as provided. If, and to the extent, Wachovia has an Allowed General Unsecured Claim under and pursuant to the Wachovia DIP Loan Agreement, Wachovia will not participate in any Distribution in Class LAS 9 in respect of the $1,000,000 Admin Cap and the $3,000,000 cash Guaranteed Amount pursuant to the DIP Agreement. Disputed Claims No Distribution will be made with respect to any Disputed Claim unless and until that claim becomes an Allowed Claim. The Plan Administrator will establish a Disputed Claims Reserve for each Disputed Claim. The reserve will be funded with Cash representing the Pro Rata Share of the Cash that would otherwise be distributed to the Holders of each Disputed Claim, if that claim was allowed. If and when a Disputed Claim or any portion of that claim becomes a Disallowed Claim, the Pro Rata Share of the distributions to which each Holder of an Allowed Claim in the Class of Claims to which the Disputed Claim belongs, will increase commensurately. A full-text copy of the Levitt and Sons Chapter 11 Plan is available for free at http://ResearchArchives.com/t/s?2ed9 About Levitt and Sons Based in Fort Lauderdale, Florida, Levitt and Sons LLC -- http://www.levittandsons.com/-- is the homebuilding subsidiary of Levitt Corporation (NYSE:LEV). Levitt Corp. -- http://www.levittcorporation.com/-- together with its subsidiaries, operates as a homebuilding and real estate development company in the southeastern United States. The company operates in two divisions, homebuilding and land. The homebuilding division primarily develops single and multi-family homes for adults and families in Florida, Georgia, Tennessee, and South Carolina. The land division engages in the development of master-planned communities in Florida and South Carolina. Levitt and Sons LLC and 38 of its homebuilding affiliates filed for Chapter 11 protection on Nov. 9, 2007 (Bankr. S.D. Fla. Lead Case No. 07-19845). Paul Singerman, Esq. and Jordi Guso, Esq., at Berger Singerman, P.A., represent the Debtors in their restructuring efforts. The Debtors chose AP Services, LLC as their crisis managers, and Kurtzman Carson Consultants, LLC as their claims and noticing agent. Levitt Corp., the parent company, is not included in the bankruptcy filing. The Debtors' latest consolidated financial condition as of Sept. 30, 2007 reflect total assets of $900,392,000, and total liabilities of $780,969,000. The Debtors have until June 27, 2008, to file a plan. (Levitt and Sons Bankruptcy News, Issue No. 23 and 24; Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000) LINENS N THINGS: Asks Court to Approve $100MM Trade Vendor Program ------------------------------------------------------------------ Linens 'n Things, Inc., Linens Holding Co., and their affiliated entities are currently obtaining trade credit terms from their suppliers. To induce their suppliers to further extend trade credit terms, the Debtors have created a trade vendor payment program, which they believe will heighten vendors' confidence and provide significant benefits to their organization. Mark D. Collins, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware, says the Trade Vendor Payment Program utilizes the Debtors' ability in the $700,000,000 DIP Facility to obtain letters of credit to fund postpetition obligations to, inter alia, postpetition vendors. Pursuant to the program, the Debtors will obtain a $100,000,000 letter of credit for the benefit of postpetition suppliers, he adds. The Trade Vendor Program will provide the Debtors' suppliers with the credit support required to enhance the flow of goods to the Debtors on trade credit terms of at least 45 days which will significantly benefit the Debtors' reorganization efforts. Pursuant to Sections 105(a) and 363 of the Bankruptcy Code, the Debtors ask the U.S. Bankruptcy Court for the District of Delaware to approve the Trade Vendor Program. The Debtors and trade creditors who join the Program will be bound by certain terms and conditions. These include: -- The Letter of Credit will support all amounts owed with respect to the goods received from Vendor by Linens 'n Things, Inc., on or after the first business day after the Trade Credit Program Letter Agreement. -- The Aggregate Approved Trade Creditors Account Balance will at no time exceed twice the amount of the Letter of Credit. -- A Vendor must continue to supply and ship goods to Linens on normal and customary trade practices. -- When a Vendor, among other things, fails to meet normal industry standards for performance regarding timing and completion levels, Linens may disqualify the Vendor from the Program. -- The trustee under the Collateral Trust Agreement may declare a "Program Default" upon the occurrence and the continuance of, among other things, a payment default under the DIP Credit Facility. In connection with the Program, the Debtors propose to enter into a trust agreement with the Collateral Trustee to establish a trust to be held by the trustee for the benefit of Approved Trade Creditor Accountholders. If necessary, Approved Trade Creditors will be paid from this trust. The Debtors note that certain trade vendors accepted money from the Debtors prepetition or postpetition for goods and services and then failed to supply those goods and services. The Debtors request that the subject creditors be required to return all payments before being being able to apply to the Program. The Court will commence a hearing on June 27, 2008, at 2:00 p.m., to consider the request. Objections are due June 24. Linens 'N Things and 11 affiliates filed separate voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on May 2, 2008 (Lead Case No. 08-10832). The Canadian operations are not included in the filings. Linens 'N Things has secured a $700 million debtor-in-possession financing from General Electric Capital Corp. The company plans to be out of chapter 11 by the end of the year, on this timetable: 09/14/2008 DIP Facility Deadline for Filing a Chapter 11 Plan 10/14/2008 DIP Facility Deadline for Disclosure Statement Approval 11/18/2008 DIP Facility Deadline for Soliciting Votes on Plan 11/28/2008 DIP Facility Deadline for Entry of a Confirmation Order Linens 'N Things is represented by Richards, Layton & Finger, P.A., and Morgan, Lewis & Bockius LLP. Conway, Del Genio, Gries & Co., LLC will serve as the retailer's restructuring advisor until substantial consummation of a chapter 11 plan. Conway Del Genio's Michael F. Gries acts as the Debtors' chief restructuring officer and interim CEO. Kurtzman Carson Consultants LLC acts as the Debtors' claims agent. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. (Linens 'n Things Bankruptcy News, Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LITHIUM TECHNOLOGY: Bakhuizen et al. Disclose 30.3% Equity Stake ---------------------------------------------------------------- Bauke Bakhuizen, Cornelis J.M. Borst, Bover B.V., Benno J.G. de Leeuw, Benno de Leeuw Holding B.V., Robert L.O. du Chatenier, Chadmin B.V., J.F.G.M. Heerschap, Cornelis L.M. Meeuwis, Dreamweaver B.V., Johannes C.L. Mol, Green Desert N.V., Walter J.M. van der Mee beneficially own an aggregate of 276,260,400 shares of Common Stock in Lithium Technology Corp., representing approximately 30.3% of the then outstanding Common Stock. All computations of the percentage of outstanding Common Stock are based on 670,924,782 shares of Common Stock outstanding as of May 8, 2008. As of April 28, 2008, Bakhuizen beneficially owned 36,214,000 shares of Common Stock issuable upon conversion of 14,485.6 shares of Series C Convertible Preferred Stock, par value $0.01 per share, representing approximately 5.1% of the then outstanding Common Stock. Borst beneficially owned 33,500,000 shares of Common Stock, consisting of (i) 20,750,000 shares of Common Stock, (ii) 11,250,000 shares of Common Stock issuable upon conversion of 4,500 shares of Series C Preferred Stock and (iii) the right to receive 1,500,000 shares of Common Stock from the Foundation, collectively representing approximately 4.9% of the then outstanding Common Stock. Borst disclaims beneficial ownership of any securities of the Issuer owned, or held in accounts managed, by Fidessa Asset Management S.A. or any of its affiliates. De Leeuw beneficially owned 5,329,700 shares of Common Stock, consisting of (i) 105,000 shares of Common Stock (these shares are held by De Leeuw Holding) and (ii) 5,224,700 shares of Common Stock issuable upon conversion of 2089.88 shares of Series C Preferred Stock, collectively representing approximately 0.8% of the then outstanding Common Stock. De Leeuw Holding beneficially owned 105,000 shares of Common Stock, representing approximately 0.0% of the then outstanding Common Stock. Du Chatenier beneficially owned 34,193,350 shares of Common Stock, consisting of (i) 610,000 shares of Common Stock, (ii) 250,000 shares of Common Stock (these shares are held by Chadmin), (iii) 11,983,525 shares of Common Stock issuable upon conversion of 4,793.41 shares of Series C Preferred Stock, (iv) 4,683,150 shares of Common Stock issuable upon conversion of 1,873.26 shares of Series C Preferred Stock (these shares are registered in the name of Du Chatenier and beneficially owned by the minor children of Du Chatenier) and (v) 16,666,675 shares of Common Stock issuable upon conversion of 6,666.67 shares of Series C Preferred Stock (these shares are held by Chadmin), collectively representing 4.9% of the then outstanding Common Stock. Chadmin beneficially owned 16,916,675 shares of Common Stock, consisting of (i) 250,000 shares of Common Stock and (ii) 16,666,675 shares of Common Stock issuable upon conversion of 6,666.67 shares of Series C Preferred Stock, collectively representing approximately 2.5% of the then outstanding Common Stock. Heerschap beneficially owned 61,250,000 shares of Common Stock issuable upon conversion of 11,068.99 shares of Series C Preferred Stock, representing approximately 8.4% of the then outstanding Common Stock. Meeuwis beneficially owned 36,306,675 shares of Common Stock, consisting of (i) 2,390,000 shares of Common Stock, (ii) 27,672,475 shares of Common Stock issuable upon conversion of 11,068.99 shares of Series C Preferred Stock (these shares are held by Dreamweaver) and (iii) 6,244,200 shares of Common Stock issuable upon conversion of 2,497.68 shares of Series C Preferred Stock (these shares are registered in the name of Dreamweaver and beneficially owned by the minor children of Meeuwis), collectively representing approximately 5.2% of the then outstanding Common Stock. Dreamweaver beneficially owned 33,916,675 shares of Common Stock, consisting of (i) 27,672,475 shares of Common Stock issuable upon conversion of 11,068.99 shares of Series C Preferred Stock and (ii) 6,244,200 shares of Common Stock issuable upon conversion of 2497.68 shares of Series C Preferred Stock, collectively representing approximately 4.8% of the then outstanding Common Stock. Mol beneficially owned 50,591,675 shares of Common Stock, consisting of (i) 8,925,000 shares of Common Stock (these shares are held by Green Desert) and (ii) 41,666,675 shares of Common Stock issuable upon conversion of 16,666.67 shares of Series C Preferred Stock (these shares are held by Green Desert), collectively representing approximately 7.1% of the then outstanding Common Stock. Green Desert beneficially owned 50,591,675 shares of Common Stock, consisting of (i) 8,925,000 shares of Common Stock and (ii) 41,666,675 shares of Common Stock issuable upon conversion of 16,666.67 shares of Series C Preferred Stock, collectively representing approximately 7.1% of the then outstanding Common Stock. Van der Mee beneficially owned 4,875,000 shares of Common Stock, consisting of (i) 1,500,000 shares of Common Stock and (ii) 3,375,000 shares of Common Stock issuable upon conversion of 1,350 shares of Series C Preferred Stock, collectively representing approximately 0.7% of the then outstanding Common Stock. On May 8, 2008, Bover acquired from Fidessa 5,600 shares of Series C Preferred Stock (convertible into 14,000,000 shares of Common Stock) for a purchase price of EURO 959,627.12 ($1,478,689.43 based on the average noon buying rate in New York City for cable transfers payable in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York for May 8, 2008). As a result, on May 8, 2008, Borst beneficially owned 47,500,000 shares of Common Stock, consisting of (i) 20,750,000 shares of Common Stock, (ii) 11,250,000 shares of Common Stock issuable upon conversion of 4,500 shares of Series C Preferred Stock, (iii) 14,000,000 shares of Common Stock issuable upon conversion of 5,600 shares of Series C Preferred Stock (these shares are held by Bover) and (iv) the right to receive 1,500,000 shares of Common Stock from the Foundation, collectively representing approximately 6.8% of the then outstanding Common Stock. Bover beneficially owned 14,000,000 shares of Common Stock issuable upon conversion of 5,600 shares of Series C Preferred Stock, collectively representing approximately 2.0% of the then outstanding Common Stock. About Lithium Technology Lithium Technology Corporation (OTC: LTHU) -- http://www.lithiumtech.com/-- produces unique large-format rechargeable batteries under the GAIA brand name and trademark. The company supplies a variety of military, transportation and back-up power customers in the U.S. and Europe from its two operating locations in Plymouth Meeting, Pennsylvania and Nordhausen, Germany. Going Concern Doubt In a letter dated May 13, 2008, Amper, Politziner & Mattia, P.C., raised substantial doubt on the ability of Lithium Technology Corporation to continue as a going concern after it audited the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's recurring losses from operations since inception and working capital deficiency. The company's operating plan seeks to minimize its capital requirements, but the expansion of its production capacity to meet increasing sales and refinement of its manufacturing process and equipment will require additional capital. The company expects that operating and production expenses will increase significantly. The company has recently entered into a number of financing transactions and is continuing to seek other financing initiatives. The company needs to raise additional capital to meet its working capital needs, for the repayment of debt and for capital expenditures. Such capital is expected to come from the sale of securities. The company believes that if it raises approximately $14,000,000 to $20,000,000 in debt and equity financings it would have sufficient funds to meet its needs for working capital, repayment of debt and for capital expenditures over the next 12 months to meet expansion plans. Bankruptcy Warning Management warned that if the company is unsuccessful in completing these financings, it will not be able to meet its working capital, debt repayment or capital equipment needs or execute its business plan. In such case, the company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. MACKINAW POWER: S&P Holds 'BB-' Rating on $147MM Secured Term Loan ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BBB-' rating on Mackinaw Power LLC's $277.2 million (as of March 31, 2008) senior secured bonds maturing 2023 and its 'BB-' rating on Mackinaw Power Holdings LLC's $147 million senior secured term loan due 2015. The recovery rating on the term loan is '2', indicating the expectation for substantial (70%-90%) recovery of principal if a payment default occurs. The outlook is stable. Mackinaw Power is a special-purpose, bankruptcy-remote operating company formed to own and operate power plants. Mackinaw Power is 100% indirectly owned by Holdings, which is 100% indirectly owned by ArcLight Energy Partners Fund III L.P., a $2.1 billion fund that is the third of four private equity funds managed by ArcLight Capital Partners LLC. Proceeds from the issue were used to purchase five contracted natural gas-fired electricity generation assets from Progress Ventures Inc. and Progress Genco Ventures LLC, subsidiaries of Progress Energy Inc. The portfolio consists of one combined-cycle unit (500 MW) and four peaking units (1,370 MW), aggregating 1,870 MW. All assets are located in Georgia with long-term tolling agreements that expire in 2015 for two assets, and 2024 for the remaining assets. Mackinaw Power's secured bonds will be insulated from market risks as the financing structure provides for debt servicing from fully contracted cash flow through 2023 and leaves merchant risks with the Holdings lenders after 2015. A $365 million senior secured bank credit facility at Mackinaw Power, mainly for tolling related letter of credit LOC requirements, is unrated. There is no individual plant project- level debt. During the contracted period, predictable cash flow from the projects supports a stable outlook for Mackinaw Power. S&P could lower the rating or revise the outlook to negative if any asset significantly contributing to cash flow experiences a sustained operating issue that precludes execution under the tolls or results in significantly high maintenance expenditure. There is little potential for an upgrade in the medium term given the contracted cash flow position. In the long term, under a low gas price scenario. "Holdings will suffer without the benefit of contracted revenues and loan pay-down could lag expectations. However, the ratings could improve if market conditions get better, allowing Mackinaw Power to enter longer-term contracts, and continuing good operating performance allows the company to repay sufficient debt" said Standard & Poor's credit analyst Trevor D'Olier-Lees. MASTR: Moody's Junks Ratings of Four Classes of NIM Securities -------------------------------------------------------------- Moody's Investors Service has downgraded the ratings on nine net interest margin securities issued by MASTR. Three of these are on review for further downgrade, while five are on review for a possible downgrade. These NIM transactions rely on excess spread and prepayment penalties generated by the underlying residential mortgage backed securities. These residual cashflows are sensitive to a number of factors including prepayment speeds, cumulative losses incurred on the underlying deal's collateral, impact of a stepdown date, breach of triggers and level of interest rate modifications. These securities have been downgraded based upon performance on the underlying transactions that has negatively impacted future residual payments to the NIM holders. The complete list of rating actions is: Issuer: MASTR Alternative Loan NIM 2006-1 -- Cl. N-2, Placed on Review for Possible Downgrade, currently Ba3 Issuer: MASTR Alternative Loan NIM 2006-3 -- Cl. N-3, Downgraded to Caa1 from B2 -- Cl. N-2, Placed on Review for Possible Downgrade, currently Ba3 -- Cl. N-1, Placed on Review for Possible Downgrade, currently Baa2 Issuer: MASTR Alternative Loan NIM 2006-4 -- Cl. N-2, Downgraded to B3 from Ba3 -- Cl. N-3, Downgraded to Caa1 from B2 -- Cl. N-1A, Downgraded to Ba1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. N-1B, Downgraded to Ba1 from Baa2; Placed Under Review for further Possible Downgrade -- Cl. N-1C, Downgraded to Ba3 from Baa3; Placed Under Review for further Possible Downgrade Issuer: MASTR Alternative Loan NIM 2006-5 -- Cl. N-3, Downgraded to Caa1 from B2 -- Cl. N-2, Placed on Review for Possible Downgrade, currently Ba3 -- Cl. N-1, Placed on Review for Possible Downgrade, currently Baa2 Issuer: MASTR CI-CW1 NIM -- Cl. N-1, Downgraded to Ba2 from Baa3 -- Cl. N-2, Downgraded to Caa1 from Ba2 MIDWEST AIR: 40% Pay Cut for CEO, Other Employees Not Spared ------------------------------------------------------------ The Business Journal of Milwaukee's Rich Rovito reports that Midwest Air Group Inc. CEO Timothy Hoeksema's salary will be slashed by 40% as part of a restructuring aimed at keeping the airline in business and out of bankruptcy. The Business Journal also notes that other employees will also take a pay cut: -- 25% for senior vice presidents; -- 17% for corporate officers; -- 11% for directors and senior managers; -- 10% for nonunion maintenance technicians; and -- 5% for higher-grade professional staff. Lower-grade professional staff and Skyway employees, who provide commissary and ramp service for Midwest, are not subject to pay cuts at this time, Business Journal says. "Our cost structure today, in advance of this restructuring, resembles that of airlines much larger than we are, with national and even global networks, flying larger aircraft," Mr. Hoeksema said in a memo sent Wednesday to employees, the Business Journal relates. The memo, Business Journal relates, also indicated that the top- of-scale pay rate for Midwest pilots is currently 32% higher than the average hourly pay for pilots who fly aircraft of similar capacity for other airlines and the cost of pension, health and other benefits for the pilots is 45% higher than the average at comparably sized airlines. Meanwhile, productivity per pilot is less than at comparably sized airlines, Mr. Hoeksema said, according to the report. The memo also notes that Midwest flight attendants' salary is 23% higher than the average hourly pay for flight attendants at airlines with aircraft of similar capacity. The Business Journal says Midwest is proposing pay reductions, benefit adjustments and productivity improvements to the Air Line Pilots Association and the Association of Flight Attendants to align pay and benefits with comparably sized airlines. The pay cuts for Mr. Hoeksema and senior vice presidents at Midwest will be effective July 15, Business Journal says. Salary reductions for other members of senior management will be effective upon ratification of agreements with the unions representing Midwest pilots and flight attendants, the report adds. Business Journal notes that Mr. Hoeksema's 2006 salary was about $405,000 according to a proxy statement filed in 2007, when Midwest was publicly traded. He also was paid a bonus of about $446,000 in 2006. As reported by the Troubled Company Reporter on June 27, 2008, Jay Schnedorf, chairman of the Air Line Pilots Association's Midwest chapter, has said Midwest's plans to reduce its fleet and workforce under a 30-day restructuring plan to stave off a bankruptcy filing. The Milwaukee Journal Sentinel and The Wall Street Journal relate that the airline is scrambling to raise funds as profits dwindle due to rising fuel prices. Midwest chairman and chief executive officer Timothy E. Hoeksema, has informed workers that the airline's major shareholder, TPG Capital, will provide additional liquidity. However, TPG requires other parties-in-interest like vendors, workers, and other investors to contribute and make sacrifices. Sentinel estimated that 50% of the company's fleet will be cut considering the Boeing 717 and MD-80 reductions. Mr. Schnedorf said that about 200 of the 400 Midwest pilots will lose their jobs under the currently announced restructuring, Sentinel said. About 35 pilots are due for retrenchment in July under a previously disclosed restructuring, Sentinel noted. Midwest will also slash half of its 400 flight attendants, Sentinel said, citing Dory Klein, head of of Midwest Association of Flight Attendants. About Midwest Air Oak Creek, Wisconsin-based Midwest Air Group Inc. -- http://www.midwestairlines.com/-- is a holding company of Midwest Airlines, Inc. Midwest Airlines operates a passenger jet airline that serves destinations throughout the United States from Milwaukee, Wisconsin and Kansas City, Missouri. Skyway Airlines, Inc., dba Midwest Connect, is a wholly owned subsidiary of Midwest Airlines and serves as the regional airline for the company. Midwest Airlines and Midwest Connect constitute the company's segments. It has three principal product offerings: Midwest Airlines Signature Service, Midwest Airlines Saver Service and Midwest Connect regional service. As of Dec. 31, 2006, Midwest Airlines Signature Service operated in 20 cities in the United States, and Midwest Airlines Saver Service operated in 10 cities. Midwest Connect builds feeder traffic and provides regional scheduled passenger service to cities primarily in the Midwest. Its subsidiaries provide aircraft charter services, transport air freight and mail. The company has a total of more than 3,000 workers. On Jan 31, 2008, TPG Capital LP, fka Texas Pacific Group, -- http://www.texaspacificgroup.com/-- a global private investment firm with over $50 billion of managed assets, acquired 53% equity in Midwest Air Group. Northwest Airlines Corp. owns the remaining 47% Midwest equity. As of Sept. 30, 2007, Midwest Air Group listed total assets of $395,615,000, total liabilities of $331,810,000, and total stockholders' equity of $63,805,000. MOTHERS WORK: Restructuring Won't Affect S&P's 'B-' Rating Yet -------------------------------------------------------------- Standard & Poor's Ratings Services said that Philadelphia-based Mothers Work Inc.'s (B-/Negative/--) strategic restructuring will not have an immediate effect on the ratings or outlook. The company announced a strategic restructuring that will reduce corporate overhead and simplify its merchandise offering. As part of the company's initiatives to improve its cost structure, it will reduce corporate headcount, decrease stock-keeping units counts, and lower inventory levels. The merchandising changes will include the rebranding of the Mimi Maternity product line under the A Pea in the Pod brand and rename its multibrand Mimi Maternity stores as Destination Maternity. S&P remain concerned regarding the company's ongoing merchandise issues and the challenge of effecting a moderate improvement in operations given the difficult economic environment. NAYAN LLC: Case Summary & 2 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Nayan LLC 7960 N. Shadeland Avenue Indianapolis, IN 46250 County: Marion Bankruptcy Case No.: 08-07357 Type of Business: The Debtor is a single asset real estate company. Chapter 11 Petition Date: June 23, 2008 Court: Southern District of Indiana (Indianapolis) Judge: Frank J. Otte Debtor's Counsel: Robert D Cheesebourough 543 E Market St., Ste. 1 Indianapolis, IN 46204 Tel (317) 637-7000 Fax 317-638-2707 Email mah@home-saver.org Total Assets: $5,500,500 Total Debts: $3,420,000 Debtor's 2 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ IDR RST, Inkeepers Tax $100,000 100N Senate Ave, Rm N203-Bankruptcy Indiapolis, IN 46204 IRS Withholding tax $40,000 P.O. Box 21126 Philadephia, PA 19114 NEBRASKA BEEF: Recalls 5.3 Mil. Pounds of Beef After E. Coli Rise ----------------------------------------------------------------- Nebraska Beef Ltd. is recalling a total of 5.3 million pounds of beef in response to E. coli outbreaks that resulted in the illness of 41 people in Michigan and Ohio, the Associated Press reports. The U.S. Department of Agriculture traced Nebraska Beef as the source of the infected meat after it found "unacceptable high levels of E. coli" on two samples of beef at certain processing plants, says the AP. It also labeled Nebraska Beef's processing practices as unsanitary and insufficient to control the spread of E. coli bacteria. Beef to be recalled were those produced between May 16 and June 26, the AP relates. The company disclosed that the meat in a previous recall were sold to outlets in Nebraska, Michigan, Pennsylvania, Texas, Illinois, New York, and Colorado. Previously, other companies had had their operations cut back or permanently shut down after meat recalls on E. coli scare. As reported in the Troubled Company Reporter on Feb. 25, 2008, one of the hardest hit casualties of these E. coli outbreaks was Hallmark/Westland Meat Packing Co. which closed down for good after the USDA ordered the company to recall 143 million pounds of beef. The recall was largely caused by complaints about workers kicking sick cows and using forklifts to force them to walk, which was revealed through a video released by the U.S. Humane Society. The incident raised questions about the safety of the meat because cows that can't walk, called downer cows, are strongly linked to mad cow disease. The federal government has banned downer cows from the United States' food supply. According to the Center for Disease Control and Prevention, more than 20 people were hospitalized since the first case of E. coli sickness appeared on May 30. Slapped With Lawsuit by E. coli Infected Patient Pritzker Ruohonen & Associates P.A. filed a lawsuit in an Ohio state court against Nebraska Beef Ltd. and beef retailer Kroger Co., on behalf of 20-year-old Zachary Everhart, who became ill with an E. coli infection after eating Kroger ground beef. Mr. Everhart's illness was confirmed by genetic testing. The strain of E. coli found in his stool sample matched the outbreak strain found in stool samples from other victims in Ohio and Michigan, in samples of Kroger brand ground beef purchased at Kroger stores in Ohio and Michigan, in samples of Kroger brand ground beef found in patients' residences and two federally- inspected meat plants, according to a June 30, 2008 release notice from the U.S. Department of Agriculture Food Safety and Inspection Service. In response to this outbreak, Kroger Co. recalled an "undetermined amount" of ground beef products. Nebraska Beef Ltd. is now trying to recall around 5.3 million pounds of ground beef components. According to the most recent information from the CDC, health officials have confirmed 40 E. coli cases connected to this outbreak. Based in Minneapolis, Minnesota, Pritzker Ruohonen & Associates P.A. -- http://www.pritzkerlaw.com/-- has been involved in most of the major foodborne illness outbreak involving E. coli and other dangerous pathogens and has collected millions on behalf of foodborne illness survivors and the families of people killed by foodborne illness. Nebraska Beef Ltd. is based in Omaha, Nebraska. NEXSTAR BROADCASTING: $35.6MM PIK Notes Cue S&P's Rating Cuts ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Nexstar Broadcasting Group Inc. to 'B-' from 'B' and removed the ratings from CreditWatch, where they were placed with negative implications on April 11, 2008. At the same time, S&P lowered the ratings on the Irving, Texas-based company's senior secured credit facilities to 'B+' from 'BB-', and the rating on its unsecured debt to 'CCC' from 'CCC+'. The outlook is stable. The downgrade reflects the company's announcement that it issued $35.6 million of senior subordinated pay-in-kind notes and will use the net proceeds to repay borrowings under its senior secured credit facility. Interest on the PIK notes will accrue and be payable in kind at 12.0% per year until Jan. 15, 2010. After Jan. 15, 2010, the interest on the PIK notes will be payable entirely in cash, beginning at 13.0% per year and increasing by 0.50% every six months thereafter up to a maximum rate of 15.0% per year. During the PIK-paying period, the PIK notes will be excluded from Nexstar's total leverage calculation under its senior secured credit facility. "We expect that, regardless of the repayment of bank debt with the proceeds of the PIK notes, Nexstar's margin of compliance with its total leverage ratio covenant as of June 30, 2008, will remain very thin," said Standard & Poor's credit analyst Deborah Kinzer, "because of higher debt balances from the first-time inclusion of $83.1 million of Nexstar Finance Holdings Inc.'s 11.375% notes into the covenant calculation." NORTH OAKLAND: Sale Requires Chapter 11 Bankruptcy Filing --------------------------------------------------------- Gary Gosselin of Oakland Business Review reports that a deal to sell the North Oakland Medical Center forgives the hospital's $19.3 million city debt and requires NOMC to file Chapter 11 bankruptcy. The plan to sell NOMC is moving forward with the Oakland Physicians Medical Center LLC, a consortium of 72 physicians, winning approval from Pontiac City Council to proceed with the sale. A deal still has to be made on $35 million in outstanding bonds, according to the report. Under the proposed deal, Flint-based McLaren Health Care Corp. will provide an estimated $5 million investment and Rochester Hills-based Crittenton Hospital will give $3 million. They won't participate in operations of the hospital. The hospital saved $24 million through employee attrition and other measures last year, but still lost $13.4 million. Based in Pontiac, Mich., NOMC -- http://www.nomc.org/location.htm -- formerly Pontiac General Hospital and Oakland County�s first hospital, is a non-profit community hospital that delivers healthcare and health-related services in northern Oakland County. It is licensed for 366 beds. * * * As reported in the Troubled Company Reporter on April 3, 2008, Moody's Investors Service downgraded North Oakland Medical Center's long-term rating to C from B3. This action affects approximately $38 million of Series 1993 bonds outstanding. The downgrade action follows NOMC's failure to make its regularly scheduled debt service payment on Feb. 1, 2008. The total amount due to bondholders on Feb. 1, 2008 was $1,142,700 (representing an interest only payment). Payments to bondholders are due on February 1 and August 1 each year. The next payment to bondholders is due Aug. 1, 2008. The total payment due on Aug. 1, 2008 is $2,627,700 ($1,142,700 interest due, $1,485,000 principal due). OSIE COMBS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Osie V. Combs, Jr. 9743 Thorn Bush Drive Fairfax Station, VA 22039 Bankruptcy Case No.: 08-13599 Chapter 11 Petition Date: June 23, 2008 Court: Eastern District of Virginia (Alexandria) Judge: Robert G. Mayer Debtor's Counsel: Christopher R. Wampler The Wampler Law Firm LLC One Central Plaza Suite 1015, 11300 Rockville Pike Rockville, MD 20852 Tel (301) 881-8895 Fax 301-881-8896 Email cwampler@wamplaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/vaeb08-13599.pdf PARKER EXCAVATING: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Parker Excavating, Inc., a Colorado Corp. 1428 Stockyard Road Pueblo, CO 81001-4536 Bankruptcy Case No.: 08-19552 Type of Business: The Debtor provide construction services. Chapter 11 Petition Date: July 2, 2008 Court: District of Colorado (Denver) Judge: Michael E. Romero Debtors' Counsel: Lee M. Kutner, Esq. (lmk@kutnerlaw.com) 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 Estimated Assets: unknown Estimated Debts: $1 million to $10 million A copy of the Debtor's list of largest unsecured creditors is available for free at: http://bankrupt.com/misc/cold08-19552.pdf PENN NATIONAL: Ends $8.9BB Merger Deal with Fortress Investment --------------------------------------------------------------- Penn National Gaming Inc. entered into an agreement with PNG Acquisition Company Inc., an entity indirectly owned by certain funds managed by affiliates of Fortress Investment Group LLC and Centerbridge Partners L.P., to terminate the proposed merger agreement whereby Penn National Gaming was to be acquired by PNG Acquisition Company for $67.00 per share. As reported in the Troubled Company Reporter on June 19, 2007, Penn National Gaming Inc. entered into a definitive agreement to be acquired by certain funds managed by affiliates of Fortress Investment Group LLC and Centerbridge Partners LP in an all-cash transaction valued at $8.9 billion, including the planned repayment of $2.8 billion of Penn National's outstanding debt. In connection with the termination of the merger agreement, Penn National Gaming will receive $1.475 billion, which will consist of a $225 million cash termination fee and the purchase of $1.25 billion of Penn National Gaming's redeemable preferred equity due 2015, by affiliates of Fortress, affiliates of Centerbridge, affiliates of Wachovia, and affiliates of Deutsche Bank. Based on discussions between Penn National Gaming and PNG Acquisition Company, it became apparent to Penn National Gaming and its board of directors that the proposed merger transaction would not be completed without litigation which is unpredictable. Further, it also became apparent to the company and its board that a re-negotiated, reduced purchase price was not a viable option. The management and board of directors of penn National Gaming concluded that the likelihood of navigating the remaining regulatory approvals, credit facility conditions for funding and likely litigation required to complete these tasks was uncertain. Accordingly, Penn National Gaming, in consultation with external legal and financial advisors, determined that terminating the agreement under the aforementioned terms brings the most certain value to Penn National Gaming shareholders given economic conditions, the state of the capital markets and the gaming industry outlook. The economics for Penn National Gaming of the agreements relating to the termination of the merger agreement and the equity purchase are: -- the company receives a $225 million termination fee; and, -- the company receives an aggregate of $1.25 billion in connection with a sale of redeemable preferred stock to Fortress and Centerbridge, including $45 million of the amount to be purchased by Deutsche Bank and Wachovia, entities which had originally agreed to make indirect minority co-investments in the company if the merger had closed, under these terms: - the preferred equity does not have a yield associated with it; - to the extent the company pays a dividend, the preferred equity holders will also receive a dividend on a pro rata, fully converted basis; - the preferred equity will remain outstanding until its maturity in June 2015, unless there is a change in control transaction involving payments of cash or property to all holders of common stock; - at maturity, Penn National Gaming will redeem the outstanding redeemable preferred equity for, at the company's election, cash, common stock or any combination in an amount based on the trading price of the company's common stock at the time: * if the company elects to redeem the preferred equity with common shares at maturity, the company would issue between 18.7 million shares and 27.8 million shares of its common stock if Penn National Gaming shares are trading between $67 per share and $45 per share, with no further adjustments if the common shares are trading above or below such range. The company also has the option to pay cash based on the as converted value. - the preferred equity has no voting rights, other than in regard to adverse changes to the rights and privileges of the preferred equity or certain business combination transactions; - the Equity Purchasers have agreed to a broad standstill and voting agreement which expires in certain circumstances. -- Penn National Gaming has agreed to register the redeemable preferred equity with the Securities and Exchange Commission to allow the security to be publicly traded and has provided certain of the purchasers with preemptive rights. Penn National Gaming will receive, from a combination of PNG Acquisition Company, Deutsche Bank and Wachovia, the $1.475 billion payment as: -- $700 million as a non-refundable deposit to be wired to Penn National Gaming on July 3, 2008; -- $775 million to the escrow agent by July 18, 2008, with funds released to Penn National Gaming upon the issuance of the Series B Redeemable Preferred in accordance with the terms of the stock purchase agreement, including customary regulatory approvals. Upon receipt of the initial $700 million, all of the parties to the proposed merger transactions and equity and debt financing arrangements entered into mutual releases of liability with respect to these matters. In the event the conditions to this stock purchase agreement are not satisfied, the company is entitled to retain the initial $700 million payment and no equity will be issued to Equity Purchasers. Penn National Gaming intends to use the net proceeds from the investment and the after tax proceeds from the termination fee to repay existing debt, to acquire or develop pari-mutuel and gaming facilities and for such other uses as may be authorized from time to time by the board of directors, including repurchases of its common stock. As of May 31, 2008, Penn National Gaming had outstanding debt of approximately $2.97 billion. Penn National's board of directors has authorized the repurchase of up to $200 million of the company's common stock over the next 24 months. Purchases may be made from time to time in the open market or in privately negotiated transactions in accordance with applicable securities laws. The actual number of shares to be purchased will depend upon market conditions. All shares purchased will be held in the company's treasury for possible future use. As of June 30, 2008, the company had approximately 86.9 million shares issued and outstanding. "We are extremely disappointed that the company's shareholders will not receive the $67 per share merger consideration," Peter M. Carlino, chief executive officer of Penn National commented. "Our decision to enter into the agreements disclosed follows a thorough evaluation of a wide range of alternatives for consummating the transaction." "The prospect of employing litigation to enforce performance of the merger agreement would inherently expose the company to the significant risk related to a protracted legal process," added Mr. Carlino. "We may be in the gaming business, but we would never gamble the company's future and our shareholders' best interest in this or any other circumstance." "This transaction represents the company's best alternative to the uncertainty of litigation and delivers immediate tangible and material value to our stockholders," Mr. Carlino stated. "Importantly, we are confident that we can very effectively deploy this capital to generate significant value for our stockholders based on our well established track record of delivering long-term growth through a focus on return on investment and disciplined financial and risk management. In this regard, we believe the substantial capital infusion will enable Penn National to be aggressively opportunistic at a time when gaming industry valuations appear very attractive." "Our ability to structure and integrate accretive, strategic acquisitions has been an important driver of Penn National's long- term financial growth and any such future activity would complement our current operations -- including our recently opened facilities in Pennsylvania and Maine -- and staggered pipeline of announced development projects including those in Indiana and Kansas," Mr. Carlino continued. "Finally, we are initiating guidance for 2008 EBITDA of approximately $682 million and believe that this metric [must] be considered in conjunction with the considerable economic value of the settlement and our 14 year track record of creating value for shareholders to determine an appropriate value for Penn National Gaming's assets, operations and growth prospects." Board Appointment In connection with the investment, Fortress Investment Group's chairman and chief executive officer, Wesley Robert Edens will be appointed to Penn National Gaming's board of directors, subject to customary gaming approvals. As a result, Penn National Gaming's board of directors is expected to be expanded to seven members. About Fortress Investment Group LLC Headquartered in New York, Fortress Investment Group LLC (NYSE: FIG) is an alternative asset manager with approximately $36 billion in assets under management as of March 31, 2007. Fortress manages private equity funds, hedge funds and publicly traded alternative investment vehicles. Fortress was founded in 1998, is headquartered in New York and has affiliates with offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt and Sydney. About Centerbridge Partners LP Centerbridge is a $3.2 billion multi-strategy private investment fund. The firm is dedicated to partnering with world class management teams in a range of industry verticals. Centerbridge's investment style provides the flexibility to employ various structures to help companies achieve their operating and financial objectives. The limited partners of Centerbridge include many of the world's most prominent financial institutions, university endowments, pension funds, and charitable trusts. About Penn National Gaming Headquartered in Wyomissing, Pennsylvania, Penn National Gaming Inc. (PENN: Nasdaq) -- http://www.pngaming.com/-- owns and operates casino and horse racing facilities with a focus on slot machine entertainment. The company presently operates eighteen facilities in fourteen jurisdictions including Colorado, Illinois, Indiana, Iowa, Louisiana, Maine, Mississippi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia, and Ontario. In aggregate, Penn National's operated facilities feature nearly 23,000 slot machines, over 400 table games, approximately 1,731 hotel rooms and approximately 808,000 square feet of gaming floor space. PENN NATIONAL: S&P Holds 'BB-' Rating on Terminated Fortress Deal ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating on Penn National Gaming Inc., and removed the corporate credit rating from CreditWatch with negative implications where it was placed on June 15, 2007. The rating outlook is negative. "The company's issue level ratings remain on CreditWatch with negative implications pending our recovery review, which will determine how these issues are notched against the corporate credit rating. We expect the recovery review to be completed in the next several days," said Standard & Poor's credit analyst Ben Bubeck. The affirmation follows the company's announcement that the acquisition of Penn National by Fortress Investment Group LLC and Centerbridge Partners LP (jointly the "former buyers") has been terminated. In consideration of the termination, Penn National will receive from the former buyers $1.475 billion in cash, structured as a $225 million termination fee and $1.25 billion seven year, zero coupon, redeemable preferred equity investment. In calculating credit measures, S&P likely will view the preferred security as being debt-like because it has a relatively short maturity, and it would expect it ultimately to be refinanced with debt. Still, S&P will recognize the near-term structural benefit derived from this instrument in that it requires no fixed payments until maturity. S&P view the termination of the merger favorably from a credit perspective. Had it moved forward, Penn National would have been highly leveraged during a period of challenging operating conditions in the U.S. gaming industry. While leverage will still be somewhat high, with debt to EBITDA estimated to be just above 6x when the preferred stock is considered as debt, the company will benefit from having a substantial amount of cash available to make opportunistic gaming investments. S&P view management's historical track regard in this area favorably. S&P note that with the termination of the transaction, management will likely face pressure from shareholders to return some of this capital to them, or to quickly deploy it to generate value. S&P expect this will occur in a manner consistent with its current ratings. PENN OCTANE: Standard General et al. Own 23.38% Equity Stake ------------------------------------------------------------ Standard General L.P., Standard General Master Fund L.P., Soohyung Kim, and Nicholas J. Singer disclose that they beneficially own 3,601,618 shares of Common Stock in Penn Octane Corp., which represents 23.38% of Penn's 15,406,187 outstanding shares. Headquartered in Palm Desert, California, Penn Octane Corporation (NASDAQ:POCC) -- http://www.pennoctane.com/-- formerly known as International Energy Development Corporation buys, transports and sells liquefied petroleum gas for distribution in northeast Mexico, and resells gasoline and diesel fuel. The Company has a long-term lease agreement for approximately 132 miles of pipeline, which connects ExxonMobil Corporation's King Ranch Gas Plant in Kleberg County, Texas and Duke Energy's La Gloria Gas Plant in Jim Wells County, Texas, to the company's Brownsville Terminal Facility. Going Concern Doubt As reported in the Troubled Company Reporter on May 4, 2006, Burton McCumber & Cortez, L.L.P., Brownsville, Texas, raised substantial doubt about Penn Octane's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2005. Burton McCumber pointed to the Company's insufficient cash flow to pay its obligations when due, inability to obtain additional financing because substantially all of the Company's assets are pledged or committed to be pledged as collateral on existing debt, existing credit facility may be insufficient to finance its liquefied petroleum gas and Fuel Sales Business, and working capital deficiency. PENSKE AUTOMOTIVE: S&P Revises Outlook to Neg. on Increased Debt ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Penske Automotive Group Inc. to negative from stable. At the same time, S&P affirmed its 'BB-' corporate credit rating on the company. S&P also lowered its issue-level rating on the company's unsecured debt to 'B' from 'B+'. S&P revised the recovery rating on this debt to '6', indicating the expectation for negligible (0% to 10%) recovery in the event of a payment default, from '5'. The outlook revision and downgrade of the unsecured debt reflect the increase in secured debt that resulted from Penske Auto's purchase of a 9% stake in Penske Truck Leasing Co. LP from GE Capital for $219 million. Another entity owned by Bloomfield Hills, Michigan-based Penske Auto's controlling stockholder Roger S. Penske Sr. is the general partner and 40% owner of PTL. The debt-financed PTL investment comes at a time when the sales environment for North American auto retailers is increasingly difficult and as Penske Auto's important U.K. market becomes more vulnerable to economic weakness. As of March 31, 2008, Penske Auto's adjusted total debt to EBITDA was 5.6x--higher than our expectations for the current rating of 4.5x to 5.0x--and the PTL purchase will elevate further the company's adjusted debt to EBITDA. "The ratings on Penske Auto reflect the company's aggressive financial policy, highly leveraged balance sheet, and the challenges of its cyclical and competitive industry," said Standard & Poor's credit analyst Nancy Messer. "These risks more than offset Penske Auto's position as one of the largest automotive retailers in the U.S., its substantial international presence, and its rich mix of brands that show greater-than- average growth." PIONEER VALLEY: Moody's Cuts Rating of Class C Notes to Caa3 ------------------------------------------------------------ Moody's Investors Service has downgraded and left on review for possible downgrade these notes issued by Pioneer Valley Structured Credit CDO I Ltd.: Class Description: $46,500,000 Class A-2 Floating Rate Notes Due 2045 -- Prior Rating: Aaa -- Current Rating: A1, on review for possible downgrade Class Description: $29,000,000 Class B Floating Rate Notes Due 2045 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Ba3, on review for possible downgrade Class Description: $29,500,000 Class C Deferrable Floating Rate Notes Due 2045 -- Prior Rating: Caa1, on review for possible downgrade -- Current Rating: Caa3, on review for possible downgrade According to Moody's, the rating actions are the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of structured finance securities. PLAINS EXPLORATION: Chesapeake Deal Cues Moody's Negative Outlook ----------------------------------------------------------------- Moody's Investors Service changed Plains Exploration & Production Company's outlook to negative from stable in response to PXP's announcement that it is acquiring an interest in Haynesville acreage from Chesapeake Energy. Moody's also affirmed PXP's Ba3 corporate family rating, Ba3 Probability of Default Rating and, the B1 senior unsecured note ratings (LGD 4; 69%). PXP is going to enter into a partnership with CHK for the development of the Haynesville shale in Louisiana. Under the agreement, Plains Exploration is acquiring 20% interest in CHK's acreage for a total of $1.65 billion. In addition, the agreement calls for PXP to fund 50% of CHK's drilling and completion costs in adidtion to PXP's own 20% share of those costs up to a maximum of $1.65 bilion on a promote basis. Based on the upfront payment, Moody's estimates that PXP is paying $15,000 per acre before any future spending is funded. The negative outlook reflects the significant increase in leverage due to the initially fully debt funded acquisition, the execution risk associated with the prospective acreage and planned asset sales to help fund the purchase, and PXP's tighter pro forma liquidity. Consideration of a stable outlook will depend on the company's ability to complete its asset sales, which will help reduce leverage and improve liquidity in a reasonable timeframe, as well as to show continued operating performance from the core asset base. At close, Moody's estimates PXP's debt/proven developed reserves will jump to more than $12/boe from a current level of more than $6/boe. While PXP intends to reduce leverage in the near/term through asset sales in the area of $1.0 billion, the timing, and ultimate amount of leverage reduction is unclear. However, even if the asset sales occur as planned, PXP's leverage will still remain on the high end of our expectations for the Ba3 rating at least through the end of 2008. PXP has exercised the $400 million accordion option on its senior secured revolving credit facility, increasing the current $2.4 billion dollar borrowing base facility size from $1.9 billion to $2.3 billion. However, near term liquidity will be tighter with outstanding debt under the revolver at close, with estimated availability to be at approximately (net of L/C) $300 million. If this amount of secured debt remains in the capital structure, the ratings on the notes face a potential double notching from the CFR under Moody's Loss Given Default Methodology. However, Moody's notes that PXP intends to reduce leverage through an approximately $1 billion asset divestiture package in the near term with the added possibility of a refinancing in order to substantially pay down the revolver borrowings. Either one of these events, which are expected to be completed in the near term would remove the pressure on the note ratings. The previously assigned stable outlook considered potential leveraging acquisitions while the company completes its portfolio transformation. However, the Haynesville acquisition does offer some challenges to the current ratings due to the nature of acquisition and the potential future cost associated with this asset. While the Haynesville resource provides upside potential for the long-term growth of PXP, in the near-term, the very leveraging acquisition offers very little in terms of assets and cash flow relief due to the lack of booked reserves and current production. Plains Exploration & Production Company is headquartered in Houston, Texas. PLAINS EXPLORATION: Chesapeake Deal Won't Affect S&P's 'BB' Rating ------------------------------------------------------------------ Standard & Poor's Ratings Service said that independent oil and gas firm, Plains Exploration & Production Co.'s (BB/Stable/--) announcement that it had entered into a joint venture with Chesapeake Energy Corp. (BB/Positive/--) in the Haynesville Shale would not affect the rating on the company. PXP has agreed to acquire a 20% interest in Chesapeake's Haynesville Shale leasehold for $1.65 billion in cash and has agreed to fund 50% of Chesapeake's 80% share of drilling and completion costs over a several year period until an additional $1.65 billion has been paid. PXP expects to initially fund the transaction with availability under its credit facility, with debt levels to be reduced during the near to intermediate term through potential asset monetization and/or free cash flow. Credit metrics will weaken in the near term, but S&P expect measures to remain in line with its expectations for the current 'BB' rating. Specifically, S&P expect pro forma debt to EBITDAX to be 1.5x to 2x and debt per proved barrel of oil equivalent to be $5 to $6. S&P do not expect changes to PXP's unsecured and recovery ratings based on a higher net present value of PXP's oil and gas reserves and expectations that commitment levels under PXP's revolving credit facility will likely be reduced during the near to intermediate term. Nonetheless, if commitment levels remain elevated for a protracted period of time and/or other material capital structure changes were to occur, unsecured issue ratings and recovery ratings could be subject to change. PLASTECH ENGINEERED: Wants Customers' Bar Date Moved to July 31 --------------------------------------------------------------- At the behest of its major customers, Plastech Engineered Products Inc. and its debtor-affiliates and the Official Committee of Unsecured Creditors ask the U.S. Bankruptcy Court for the Eastern District of Michigan to set July 31, 2008 as the deadline for customers to file proofs of claim against the Debtors' estates, including for holders of administrative expense claims to file requests for payment of the claims. The Court previously set June 30, 2008 as the deadline to file proofs of claim against the Debtors' estates, including for holders of administrative expense claims to file requests for payment of the claims. Under the terms of a Funding Agreement, the Major Customers -- General Motors Corporation, Chrysler LLC, Chrysler Motors LLC, Chrysler Canada Inc., Johnson Controls, Inc. and Ford Motor Company -- will be waiving their administrative expense claims and limiting recourse of the DIP loans to the related collateral, as well as waiving other claims against the Debtors' estate if certain conditions are satisfied. Consequently, there will be no need for the Customers to file a request for payment of their administrative expense claims or other claims against the Debtors' estate. The Major Customers provide the Debtors DIP Financing, which is both secured by certain of Debtors' assets and has administrative expense priority status per the terms of orders entered by the Court. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represents the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLASTECH ENGINEERED: Geo-Tech Wants Stay Lifted to Sell Plastic --------------------------------------------------------------- Geo-Tech Polymers LLC, a creditor in Plastech Engineered Products Inc. and its debtor-affiliates' Chapter 11 cases, seeks authority from the U.S. Bankruptcy Court for the Eastern District of Michigan, on an expedited basis: (a) to sell approximately 973,000 pounds of the Debtors' generated plastic waste, which Geo-Tech has in its possession; and (b) for allowance and payment of $247,396 as administrative expense claim pursuant to Section 503(b) of the Bankruptcy Code, to prevent irreparable harm to its business arising from the cessation of the Debtors' business in these Chapter 11 cases. Geo-Tech wants the automatic stay lifted so it can proceed with its plans. Geo-Tech informs that it is attempting to continue discussion to resolve its concern with the Debtors. Geo-Tech, with only 10 employees, six of whom have been laid off due to the Debtors' bankruptcy proceedings, asserts that it needs to expedite the proposed sale, and accordingly asks the Court to shorten notice period, in order to stop incurring storage costs, and prevent irreparable harm to its business. Debtors Object The Debtors refute Geo-Tech's administrative expense claim, and ask the Court to deny Geo-Tech's motion, as they have already entered into a stipulation to resolve their dispute. The Debtors maintain, in response to Geo-Tech's request for an expedited hearing, that they have insufficient time to perform diligence necessary to finalize the negotiations with Geo-Tech, given the auction and impending sale of their businesses. Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher, & Flom LLP, in Wilmington, Delaware, asserts it is not in the best interest of the Debtors and their estate to have the Geo-Tech's request heard on a shortened notice and seeks to discuss the request no earlier than June 26, 2008, at the next omnibus hearing. Parties Stipulate To resolve their dispute, the Debtors and Geo-Tech agree that: (a) Geo-Tech will pay the Debtors $0.025 per pound for the recycled plastic, or an aggregate of $24,325 within 45 days from entry of the the Court order, pursuant to a purchase order Geo-Tech will issue to the Debtors. (b) Geo-Tech will be deemed, upon approval of the stipulation, to have purchased the recycled plastic free of the Debtors' interest, and will be authorized to sell or otherwise dispose of the recycled plastic as it sees fit. (c) Upon approval of the stipulation, Geo-Tech will be deemed to release the Debtors of and from the administrative claim it previously asserted. (d) Geo-Tech's motion will be deemed resolved. About Plastech Engineered Based in Dearborn, Michigan, Plastech Engineered Products, Inc. -- http://www.plastecheng.com/-- is full-service automotive supplier of interior, exterior and underhood components. It designs and manufactures blow-molded and injection-molded plastic products primarily for the automotive industry. Plastech's products include automotive interior trim, underhood components, bumper and other exterior components, and cockpit modules. Plastech's major customers are General Motors, Ford Motor Company, and Toyota, as well as Johnson Controls, Inc. Plastech is a privately held company and is the largest family- owned company in the state of Michigan. The company is certified as a Minority Business Enterprise by the state of Michigan. Plastech maintains more than 35 manufacturing facilities in the midwestern and southern United States. The company's products are sold through an in-house sales force. The company and eight of its affiliates filed for Chapter 11 protection on Feb. 1, 2008 (Bankr. E.D. Mich. Lead Case No. 08- 42417). Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Deborah L. Fish, Esq., at Allard & Fish, P.C., represent the Debtors in their restructuring efforts. The Debtors chose Jones Day as their special corporate and litigation counsel. Lazard Freres & Co. LLC serves as the Debtors' investment bankers, while Conway, MacKenzie & Dunleavy provide financial advisory services. The Debtors also employed Donlin, Recano & Company as their claims and noticing agent. Joel D. Applebaum, Esq., at Clark Hill PLC, represents the Official Committee of Unsecured Creditors. As of Dec. 31, 2006, the company's books and records reflected assets totaling $729,000,000 and total liabilities of $695,000,000. (Plastech Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) POWER RECEIVABLE: S&P Puts $22.2MM Notes' BB+ Rating on Neg. Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed the 'BBB' and 'BB+' ratings on Power Receivable Finance LLC's $432.45 million of senior secured notes and $22.2 million of subordinated notes on CreditWatch with negative implications. The action follows the U.S. Supreme Court ruling on long-term wholesale energy contracts in which it requests that the 9th U.S. Circuit Court of Appeals and the Federal Electric Regulatory Commission reexamine the terms of such contracts. The court's decision was rendered in Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County, Washington (case 06-1457) and American Electric Power Service Corporation v. Public Utility District No. 1 of Snohomish County, Washington (case 06-1462). "To the extent this ruling and any revisiting of the rates results in the potential for different terms in the power sales agreement between California Department of Water Resources and PRF, or the rates in the mirror power purchase agreement with J. Aron, we may downgrade the rating," said Standard & Poor's credit analyst Justin Martin. "We will resolve the CreditWatch when we have further determined the consequences of the ruling." PRC LLC: Emerges From Chapter 11 After Five Months -------------------------------------------------- After five months under Chapter 11 Chapter 11, PRC LLC and its debtor-affiliates now emerge from bankruptcy following the confirmation of their Joint Plan of Reorganization by the U.S. Bankruptcy Court for the Southern District of New York. The Plan provides for full payment to holders of administrative claims and priority claims. The holders of prepetition first lien claims, however, are set to receive 67 cents to 73.7 cents on the dollar on their claims while holders of prepetition second lien claims 0% to 3%. General unsecured claimants are expected to obtain a 4% to 8% recovery, depending on the total amount of allowed claims sharing the $1,350,000 available for the class. The Reorganized Debtors will obtain from Silver Point Finance, LLC, Babson Capital and Bayside Capital Lenders exit financing of up to $20,000,000 in secured revolving credit and additional amounts to repay indebtedness outstanding under PRC's existing DIP Credit Agreement dated as of March 4, 2008, provided by Royal Bank of Scotland, et al. The Debtors will also obtain a second lien facility of $40,000,000 which will be used to pay for the allowed claims under their Prepetition First Lien Facility. The Revolving Credit Facility matures on the third-anniversary of the closing date, when the first borrowing under the facility is made. The Second Lien Facility matures on the fourth anniversary of the closing date. Evercore Partners, the Debtors' financial advisors, gave an enterprise value of $74,000,000 to $109,000,000 to the Reorganized Debtors. On June 20, 2008, the Court held that the Debtors have met the statutory requisites for confirmation of the Plan. In connection with that, the Court has directed the Reorganized Debtors to submit and comply with these directives: (1) Submit Periodic Status Reports detailing actions taken, and the progress towards the consummation of the Plan. The Status Reports must be filed initially within 45 days after entry of the Postconfirmation Order, and thereafter on January 15, April 15, July 15, and October 15, until a final decree has been entered. (2) Mail a copy of the Confirmation Order and the Postconfirmation Order to: -- The Debtors, -- Counsel for the Debtors, -- The U.S. Trustee, -- Chadbourne & Park LLP, -- Bingham McCutchen LLP, -- Blank Rome LLP, -- Paul, Weiss, Rifkind, Wharton & Garrison LLP, and -- parties-in-interest entitled to notices. (3) File a Closing Report pursuant to Rule 3022-1 of the Local Rules of Bankruptcy Procedure, and an application for a Final Decree (x) within 45 days after the distribution of any deposit required by the Plan or, (y) if no deposit was required, upon the payment of the final distribution required by the Plan. (4) Submit the Closing Report and the application for a Final Decree within one year from the date of the Confirmation Order. If the Debtors fail to comply, the Clerk will advise the Court and an order to show cause may be issued. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. The Court confirmed that Plan mid-June 2008. (PRC LLC Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Keeps Call Center Customer Services Deal with Verizon -------------------------------------------------------------- PRC LLC and its debtor-affiliates, and Verizon Communications Inc. entered into a stipulation to continue the Debtors' services to Verizon pursuant to a master agreement. The stipulation was approved by the U.S. Bankruptcy Court for the Southern District of New York. Before the date of bankruptcy filing, the InteractiveCorp, the former parent of the Debtors, entered into a Global Services Agreement with MCI Worldcom Communications, Inc., an affiliate of Verizon Communications, Inc. Subsequently, the Debtors entered into a Communication Services Authorized User Participation Agreement, pursuant to which the Debtors purchased certain goods and services from Verizon pursuant to the GSA. The Debtors also entered into certain Statements of Work, Amendments, and other Ancillary Documents in connection with the GSA and the Participation Agreement. Additionally, prior to the bankruptcy filing, the Debtors entered into a (i) Master Agreement for Call Center Customer Services, (ii) PI Agreement, and (iii) Domestic Agreement. Pursuant to the PI Agreement and Domestic Agreement, the Debtors provide Verizon certain call center services in the Philippines and the United States. The Parties have rejected the Master Agreement for Call Center Customer Services, pursuant to a Court-approved stipulation, effective as of April 30, 2008. In connection with the reorganization and re-scaling of their businesses, the Debtors have determined that post-confirmation they will continue to require some, but not all, of the services currently purchased under the GSA. They also desire to continue to provide the services to Verizon currently being provided under the PI Agreement and the Domestic Agreement. The Debtors and Verizon, in a Court-approved stipulation, agree to these terms, among others: (1) On the later of the (x) Plan Effective Date, or (y) other agreed upon date within 30 days after the entry of the related Consent Order: -- the Parties will execute and enter into a "Master Agreement for Call Center Customer Services -- between Verizon Corporate Services Group, Inc. and PRC, LLC -- together with two Statements of Work with accompanying Authorization Letters; and -- the GSA Documents which have not been previously terminated or expired will be deemed assumed pursuant to Section 365(a) of the Bankruptcy Code, and the Parties will enter into a Global Services Agreement, which will be deemed an amendment and restatement of the GSA Documents in its entirety. (2) The New Agreements will be effective as of Aug. 1, 2008. After the New Agreement Effective Date, the PI Agreement and the Domestic Agreement will terminate, except to the extent that they will govern the rights and obligations of the parties prior to the New Agreement Effective Date, including the obligation of Verizon to pay the Debtors amounts due for postpetition services provided by the Debtors under the PI Agreement and the Domestic Agreement. After the New Agreement Effective Date, the GSA Documents will terminate except: -- with respect to certain terms agreed in the Stipulation, and -- that they will govern the rights and obligations of the parties prior to the New Agreement Effective Date for the amounts due for postpetition services provided by Verizon prior to the termination date of the related services, other than for related "early termination" or other "termination" liability charges. (3) Upon entry of the Consent Order, in order to cure prepetition default obligations related with the assumption of the GSA Documents, the Debtors will pay Verizon: (a) Cash Payment of $2,000,000 by the later of the Consent Order Effective Date, or Plan Effective Date. (b) Two Deferred Payments of $250,000 each on January 2, 2009, and July 2, 2009. (c) Set-off of all sums owed by Verizon to the Debtors prior to the Petition Date, against any sum owed by the Debtors to Verizon prepetition. (d) Year 1 Earned Credits and Payments at 6.5% of Verizon's monthly payments for services during the first year of the New MSA Documents up to $1,500,000, in the aggregate. Fifty percent of each Year 1 Monthly Credit/Payment Amount will be paid in the form of credits, and 50% of the amount will be in cash payments to "Verizon Business". For each invoice associated with services under the New MSA Documents during MSA Year 1, Verizon will be entitled to take a 3.25% credit, and the Debtors will deliver to Verizon credit memos reflecting the discount. Within five business days after the end of each month of MSA Year 1, the Debtors will deliver to Verizon cash payments totaling 3.25% of the gross amount paid by Verizon during that month, without deducting from the gross amount any sum paid by a credit memo issued pursuant to the Stipulation, for services under the New MSA Documents. Credit memos will be delivered to Verizon in the same manner in which invoices under the New MSA Documents are delivered to Verizon; cash payments will be delivered to Verizon's counsel. In no event will Verizon be entitled to receive, or will the Debtors be required to provide, payments or credits that, in excess of $1,500,000, in the aggregate, during MSA Year 1. If, however, the total all payments and credits Verizon has received during MSA Year 1 is less than $1,500,000, then the difference between $1,500,000 and the total payments and credits Verizon has received during MSA Year 1 will be deemed a "Carryover Credit/Payment Pool." (e) Year 2 Earned Credits and Payments at 6.5% of Verizon's monthly payments during MSA Year 2, up to the maximum aggregate amount of $1,500,000. Fifty percent of each Year 2 Monthly Credit/Payment Amount will be paid in the form of credits, and 50% will be in cash payments to "Verizon Business". Verizon will be entitled to take a 3.25% credit for each invoice on services under the New MSA Documents during the MSA Year 2, for which the Debtors will deliver to Verizon credit memos reflecting the discount. Within five business days after the end of each month of MSA Year 2, the Debtors will deliver to Verizon cash payments at 3.25% of the amount paid by Verizon during that month, gross of any sum paid by related credit memo. Credit memos will be delivered to Verizon in the same manner in which invoices under the New MSA Documents are delivered to Verizon; cash payments will be delivered to Verizon's counsel. In no event will Verizon be entitled to receive, or will the Debtors required to provide, payments or credits in excess of $1,500,000, in the aggregate, with respect to MSA Year 2 Services, provided, however, that Verizon may access the Carryover Payment/Credit Pool up to the amount in connection with any invoice paid by Verizon so long as, at the time of payment, (i) the total payments and credits required of the Debtors during MSA Year 2 has been sufficient to exhaust the Year 2 Credit/Payment Pool; and (ii) Verizon has not yet acted to terminate any of the New MSA Documents. (f) Verizon may access the Carryover Credit/Payment Pool at 6.5% of Verizon's payments -- in excess of those payments used to qualify for the Year 1 Credit/Payment Pool and the Year 2 Credit/Payment Pool -- for the Debtors' services under the New MSA Documents in MSA Year 2 up to the amount, if any, of the Carryover Payment/Credit Pool. The credits and cash payments associated with the Carryover Payment/Credit Pool will be divided in the same manner -- 3.25% in credits and 3.25% in cash payments -- and delivered in the same manner as the Year 2 Credit/Payment Pool. In no event will the aggregate amounts of credits and payments for MSA Year 1, MSA Year 2, and applications of the Carryover Credit Payment/Credit Pool, to Verizon exceed $3,000,000. (4) Verizon will continue to provide the Debtors, on a transitional basis, with the services provided under the GSA Documents through these termination dates: GSA Doc. Doc. Description Termination Date ------- ---------------- ---------------- SOW No. 1 1500 Seat Avaya 10/31/08 hosted services SOW NO. 3 1400 Seat Avaya 06/30/08 hosted services SOW No. 8 IP PBX Services 06/30/08 SOW No. 9 275 Seat Avaya hosted services 06/30/08 SOW No. 10 ACD Maintenance 06/30/08 1st Amendment to Schedules 1,2,3 Various dates Communications by 11/30/08 Services Authorized User Participation Agreement The parties purported to terminate an SOW No. 8 in the Rockwell Stipulation, based on the Debtors' numbering of SOWs, which is SOW No. 7 based on Verizon's reference. SOW No. 8, accordingly, is terminated pursuant to the Parties' stipulation, and the Rockwell Stipulation will be deemed amended to have terminated SOW No. 7, instead of SOW No. 8. All references to terminated SOWs in both the Rockwell Stipulation and the Parties' stipulation, will be deemed as pointing to the Verizon SOW number references. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. The Court confirmed that Plan mid-June 2008. (PRC LLC Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Sets July 28 as Admin. and Rejection Claims Bar Date ------------------------------------------------------------- Reorganized PRC LLC and its debtor-affiliates inform parties-in- interests in their Chapter 11 cases that: (b) All executory contracts and unexpired leases that (i) are not listed in their schedules of leases to be assumed pursuant to their Plan of Reorganization, (ii) was not previously assumed by order of the Bankruptcy Court, (iii) is not a contract pursuant to which the Debtors sell their services and which was assumed pursuant to Section 8.1(B) of the Plan, or (iv) does not have as its primary purpose the licensing of intellectual property rights by the Debtors, have or will be rejected by the Debtors as provided in the Plan or applicable Court order. (a) All proofs of claims for damages related to contracts or unexpired leases which have been rejected pursuant to the Plan, must be filed by July 28, 2008. (c) Each proof of claim must be an original, must substantially conform to Court-approved form or the Official Form No. 10, will be duly executed and written in the English language, must set forth the Debtors' names and the Chapter 11 case numbers, including the amounts claimed, and must be delivered to the claims agent, Epiq Bankruptcy Solutions, LLC. (d) Claims for administrative expenses, other than for compensation for professional services and reimbursement of expenses, that have not yet been paid, must be filed and served no later than 90 days after the effective date of the Plan. Otherwise, Claimants will forever be barred from asserting their Claims. (e) Final fee applications, together with the related proof of service, must be filed with the Bankruptcy Court and served on: -- The Debtors, -- Counsel for the Debtors, -- The U.S. Trustee, -- Chadbourne & Park LLP, -- Bingham McCutchen LLP, -- Blank Rome LLP, and -- Paul, Weiss, Rifkind, Wharton & Garrison LLP. (f) Objections to any final fee application must be filed with the Bankruptcy Court so as to be filed and actually received not later than 4:00 p.m. prevailing Eastern Time on the date that is five business days prior to the hearing on that application. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. The Court confirmed that Plan mid-June 2008. (PRC LLC Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRINTERS ROW: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: Printers Row, LLC 500 S. Dearborn St. Chicago, IL 60605 Bankruptcy Case No.: 08-17301 Chapter 11 Petition Date: July 3, 2008 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Morgan M. Smith, Esq. Email: msmith@schwartzcooper.com Schwartz Cooper Chartered 180 N. LaSalle St., Ste. 2700 Chicago, IL 60601 Tel: (312) 346-1300 Fax: (312) 264-2489 http://www.schwartzcooper.com/ Estimated Assets: $50,000,0000 to $100,000,000 Estimated Debts: $50,000,0000 to $100,000,000 Debtor's Largest Unsecured Creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Accelerated Assets, LLC loan $7,422,366 Attn: Paul Hastings Janofsky & Walker, LLP 191 N. Wacker Dr., 30th Fl. Brad Ritter, Esq. Tel: (312) 499-600 Fax: (312) 499-6100 QUICK SERVICE: Bids for 17 Church's Chicken Stores Due July 25 -------------------------------------------------------------- Sealed bid offers for 17 Church's Chicken fast food outlets of Quick Service Foods-Tampa Inc. are due on or before July 25, 2008. As reported by the Troubled Company Reporter on July 3, 2008, the Debtor sought and obtained authority from the U.S. Bankruptcy Court for the Middle District of Florida to sell the 17 stores, subject to competitive bidding and auction. The auction will be held on Aug. 4, 2008, at the offices of Fowler White Boggs Banker, P.A., at 501 E. Kennedy Blvd., Suite 1700, in Tampa, Florida, beginning at 10 a.m. About Quick Service Quick Service Foods-Tampa Inc. operates Church's Chicken restaurants in the Orlando and Tampa areas and employs 320 people. San Antonio, Texas-based Church's Chicken, founded in 1952, serves traditional southern and spicy fried chicken. As of January 2008, Church's Chicken had 1,600 worldwide locations and sales of more than $1 billion. The parent company of Church's Chicken, Cajun Operating Co., is owned by private equity firm Arcapita -- http://www.arcapita.com/-- is based in Atlanta. Quick Service filed for Chapter 11 bankruptcy on Feb. 29, 2008 (Bankr. M.D. Fla. Case No. 08-02797). Fowler White Boggs Banker PA represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed estimated assets of $10,000,000 to $50,000,000, and estimated debts of $1,000,000 to $10,000,000. RANGE RESOURCES: S&P Holds BB Rating, Changes Outlook to Positive ----------------------------------------------------------------- Standard and Poor's Ratings Services revised its outlook on Fort Worth, Texas-based Range Resources Corp. to positive from stable and affirmed the ratings on the company, including its 'BB' corporate credit rating. Pro forma for its recent $250 million of debt offering and $250 million of equity issuances, Range had $1.2 billion of reported debt as of March 31, 2008. "The rating action reflects the independent oil and gas exploration and production company's success in building its reserves and improving production while maintaining competitive costs, controlling leverage, and improving liquidity," said Standard & Poor's credit analyst Ben Tsocanos. S&P expect the company to continue spending aggressively to develop its assets in the Barnett Shale formation in Texas and its Nora and Devonian shale plays in Appalachia. Nevertheless, S&P could raise its ratings if the company achieves growth, specifically operating success from its higher risk/reward Appalachian projects, while controlling costs and maintaining a prudent capital structure. The rating on Range reflects the company's weak business risk profile, largely because of the cyclical and capital-intensive nature of the industry, and its aggressive financial risk profile. The company pursues an acquire-and-exploit strategy, although its use of equity to partially fund transactions has considerably softened the leverage effect of a series of purchases. RG SUMMIT: Case Summary & Six Largest Unsecured Creditors --------------------------------------------------------- Debtor: RG Summit Hill, LP 1771 International Parkway, Ste. 127 Richardson, TX 75081 Tel: (972) 989-5277 Bankruptcy Case No.: 08-41672 Chapter 11 Petition Date: June 30, 2008 Court: Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Gary Joseph Derer, Esq. 2155 Toole Dr. Lucas, TX 75002 Tel: (972) 989-5277 Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $1,000,000 to $10,000,000 Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Scott & Patricia Drescher personal loan $75,000 18111 Preston Rd., 9th Fl. Dallas, TX 75252 Roseanna McGill personal loan $50,000 18756 Wainsborough Dallas, TX 75287 Randolph (Randy) M. Wright personal loan $33,833 3109 Deep Valley Dr. Plano, TX 75075 Tel: (972) 596-7000 Fax: (972) 618-3800 Michael Inkman personal loan $25,000 Jack T. Cooper personal loan $12,500 Tim Lambert personal loan $10,000 RGIS INVENTORY: S&P Changes Outlook to Stable on Losing Sales ------------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings outlook on Auburn Hills, Michigan-based RGIS Inventory Specialists to stable from positive. "The outlook revision is based on the company losing considerable sales, which were down 5.4% in the first quarter, from increased competition," said Standard & Poor's credit analyst Charles Pinson-Rose. With the lower sales, the company's operating leverage worsened and overall margins were down 3.8%. Credit metrics weakened, with leverage falling to 7.6x, down from 6.9x at the end of 2007. RIVER OAKS: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------- Debtor: River Oaks Medical Center, L.P. 4200 Twelve Oaks Dr. Houston, TX 77027 Bankruptcy Case No.: 08-11354 Type of Business: The Debtor owns and operates a hospital. See http://www.riveroakshospitalhouston.com/ Chapter 11 Petition Date: July 2, 2008 Court: District of Delaware (Delaware) Judge: Brendan Linehan Shannon Debtor's Counsel: Derek C. Abbott, Esq. Email: dabbott@mnat.com Morris Nichols Arsht & Tunnell 1201 N. Market St. Wilmington, DE 19899 Tel: (302) 658-9200 Fax: (302) 658-3989 http://www.mnat.com/ Estimated Assets: $50,000,000 to $100,000,000 Estimated Debts: $10,000,000 to $50,000,000 Debtor's 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ MPT of Shasta, LP guarantee unknown Attn: Michael G. Stewart, Esq. 1000 Urban Center Dr., Ste. 501 Birmingham, AL 35242 Tel: (205) 969-3755 Fax: (205) 969-3756 MPT of Twelve Oaks, LP guarantee unknown Attn: Michael G. Stewart, Esq. 1000 Urban Center Dr., Ste. 501 Birmingham, AL 35242 Tel: (205) 969-3755 Fax: (205) 969-3756 Owens & Minor, Inc. general trade payable $405,001 Attn: Gilmer G. Minor, Chairman & CEO, & Craig R. Smith, President 9120 Lockwood Blvd. Mechanicsville, VA 23116 Tel: (804) 747-9794 Fax: (804) 723-7100 Crothall Healthcare, Inc. general trade payable $377,391 Attn: Robert Kutteh, President $ CEO 955 Chesterbrook Blvd. Wayne, PA 19087 Tel: (610) 249-0420 Fax: (610) 892-0500 Mckesson Drug Co. general trade payable $270,502 Attn: John Hammergren, Chairman & President One Post St. San Francisco, CA 9103 Tel: (415) 983-8300 Fax: (415) 983-8900 Biotronik, Inc. general trade payable $231,903 Seaspine, Inc. general trade payable $223,565 Mckesson Automation, Inc. general trade payable $214,879 Maxim Staffing Solutions, Inc. general trade payable $193,188 Bayou Anesthesia & Pain, PA general trade payable $181,763 Perot Systems general trade payable $181,528 Zimmer Spine general trade payable $158,904 Cohr general trade payable $157,774 T. Daniel Holloway, PC general trade payable $155,783 GE Medical Systems general trade payable $129,607 ELA Medical, Inc. general trade payable $127,500 Tornier, Inc. general trade payable $126,524 ITA Resources, Inc. general trade payable $120,175 SUEZ Energy Resources, NA general trade payable $118,979 American Sleep & general trade payable $116,600 Cardiopulmonary Services, Inc. Boston Scientific general trade payable $112,562 Neuromodulation Millenium Contractors & general trade payable $112,008 Operations, LP Medquist, Inc. general trade payable $111,632 Boston Scientific Corp. general trade payable $109,725 Osteotech Products Division general trade payable $107,385 Pioneer Surgical Technology general trade payable $104,225 Johnson & Johnson Health Care general trade payable $103,235 Health Information Management general trade payable $102,392 Accent Insurance Recovery general trade payable $97,709 Solutions Tarantino Properties, Inc. general trade payable $91,931 SAIL: Moody's Junks Ratings of Net Interest Margin Securities ------------------------------------------------------------- Moody's Investors Service has downgraded three net interest margin securities issued by SAIL. These NIM transactions rely on excess spread and prepayment penalties generated by the underlying residential mortgage backed securities. These residual cashflows are sensitive to a number of factors including prepayment speeds, cumulative losses incurred on the underlying deal's collateral, impact of a stepdown date, breach of triggers and level of interest rate modifications. These securities have been downgraded based upon performance on the underlying transactions that has negatively impacted future residual payments to the NIM holders. The complete list of rating actions is: Issuer: SAIL Net Interest Margin Notes, Series 2003-2 -- Cl. A Notes, Downgraded to Ca from Ba2 Issuer: SAIL Net Interest Margin Notes, Series 2003-3 -- Cl. A Notes, Downgraded to Caa2 from Baa3 Issuer: SAIL Net Interest Margin Notes, Series 2003-5 -- Cl. A Notes, Downgraded to Caa2 from Baa3 SAM SELTZER'S: Wants to Walk Away from Publix, Ocala Site Leases ---------------------------------------------------------------- Sam Seltzer's Steak Houses of America Inc. asks the U.S. Bankruptcy Court for the Middle District of Florida for authority to reject its lease with Publix Super Markets Inc. related to a restautrant location it closed in June 2008, The Ledger reports. Sam Seltzer's is required to pay $90,612 annually under the lease. The agreement is scheduled to expire in August. Sam Seltzer's also seeks permission to walk away from a lease for a site in Ocala, Florida. The Debtor is required to pay $150,000 in annual rent under the agreement. The report says the Ocala site never opened. Based in Tampa, Florida, Sam Seltzer's Steak Houses of America Inc. is a private no-frills restaurant chain, which has nine locations from Port Charlotte to Ocala. It opened its first location in 1995 on North Dale Mabry Highway in Tampa. Sam Seltzer's and 14 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the Middle District of Florida on June 27, 2008 (Lead Case No. 08- 09533). Amy Denton Harris, Esq., and Harley E. Riedel, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, represent the Debtor. When it filed for bankruptcy, the Debtor disclosed $10,000,000 to $50,000,000 in estimated assets and debts. For the fiscal year ending Oct. 28, 2007, the company had assets of roughly $18,000,000 and liabilities of $17,400,000, the Ledger reports. SMITHFIELD FOODS: Sells 4.95% of Shares to COFCO to Pay Debts ------------------------------------------------------------- Smithfield Foods Inc. has entered into an agreement with COFCO Limited, China's largest national agricultural trading and processing company, for the sale of 7,000,000 shares, or 4.95% of Smithfield's common stock. The purchase price per share will be equal to the closing price of Smithfield's common stock on the pricing date for the offering of the company's convertible senior notes. The company plans to use the proceeds of the sale to repay debts and for other general corporate purposes. "I am very pleased that COFCO has agreed to make this equity investment in Smithfield. We have been working closely together and this investment represents a significant step in cementing our relationship for the long term," stated C. Larry Pope, Smithfield's president and chief executive officer. "COFCO is a widely respected leader in China's food and agriculture industry," Mr. Pope said. "China is experiencing rapid growth in pork consumption and consumes more pork than the rest of the world combined. COFCO has introduced Smithfield to many opportunities in China and we look forward to continue working together." Mr. Gaoning Ning, the chairman of COFCO, said, "Smithfield is the world's largest producer and processor of pork. We look forward to building on our existing commercial relationship and exploring growth opportunities in China's food industry together." In connection with the sale, Smithfield has agreed to nominate Mr. Ning for election as a director at its 2008 annual shareholders' meeting. COFCO's investment in Smithfield is passive in nature and the purchase agreement contains standstill provisions. Smithfield expects to close on an initial $63.1 million of the shares promptly following the closing of Smithfield's convertible notes offering. Settlement on the remainder of the shares will be subject to completion of Hart-Scott-Rodino antitrust review. Hogan & Hartson LLP and McGuire Woods LLP are serving as legal advisors to Smithfield Foods. Morgan Stanley & Co. Incorporated is acting as financial advisor and Davis Polk & Wardwell is serving as legal advisor to COFCO. The sale was made pursuant to Regulation S under the Securities Act of 1933. About COFCO Limited COFCO Limited, -- http://www.cofco.com/-- a company owned by the government of the People's Republic of China, is the largest national agricultural trading and processing company in China. COFCO also has substantial business interests in food and beverage production, commercial and residential real estate, hotel operations, financial services and packaging. About Smithfield Foods With sales of $11 billion, Smithfield, Va.-based Smithfield Foods Inc. (NYSE: SFD) -- http://www.smithfieldfoods.com/-- processes and markets fresh pork and packaged meats in the United States, as well as produces hogs. The company conducts its business through five segments: Pork, International, Hog Production, Other and Corporate, each of which comprises a number of subsidiaries. The Pork segment produces a variety of fresh pork and packaged meats products in the United States and markets them nationwide and to a number of foreign markets, including China, Japan, Mexico, Russia and Canada. The Pork segment operates over 40 processing plants. The International segment includes its international meat processing operations that produce a variety of fresh and packaged meats products. The HP segment consists of hog production operations located in the United States, Poland and Romania, as well as its interests in hog production operations in Mexico. The Other segment comprises its turkey production operations and its interest in Butterball LLC. During the fiscal year ended April 27, 2008 it discontinued its Beef segment operations. * * * As reported in the Troubled Company Reporter on July 1, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Smithfield Foods Inc. to 'BB-' from 'BB+'. At the same time, S&P's assigned a '1' recovery rating to Smithfield Foods' senior secured notes, indicating expectations of very high (90%- 100%) recovery in the event of a payment default. The issue-level rating on the secured notes remains at 'BB+'. In addition, S&P's lowered the ratings on the company's senior unsecured notes to 'BB-' from 'BB' and assigned a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of a payment default. The ratings remain on CreditWatch with negative implications where they were placed on Dec. 3, 2007. Smithfield Foods had about $4.2 billion of debt at April 27, 2008. The TCR said on June 16, 2008, that Moody's Investors Service placed under review for possible downgrade the long-term ratings of Smithfield Foods Inc. Ratings placed under review for possible downgrade include Corporate family rating at Ba2; Probability of default rating at Ba2; and Senior unsecured debt at Ba3. This action was based Moody's expectation that credit metrics will remain inconsistent with the rating category, despite the anticipated receipt of proceeds from the pending sale of Smithfield's beef business, given worsening returns in the hog production business and higher than anticipated debt balances at fiscal year end April 27, 2008. The company's speculative grade liquidity rating was lowered to SGL-4 from SGL-3, reflecting Moody's concern that poor profitability will result in even heavier reliance on external sources of financing and that Smithfield will be challenged to meet its bank covenants. SMITHFIELD FOODS: Mulls Offering $350MM Convertible Senior Notes ---------------------------------------------------------------- Smithfield Foods Inc. intends to offer $350 million aggregate principal amount of its convertible senior notes due 2013 in a registered underwritten public offering. In connection with the offering, Smithfield intends to grant the underwriters a 30-day option to purchase up to $50 million aggregate principal amount of additional convertible notes solely to cover over-allotments, if any. The notes will be convertible subject to certain conditions into cash or a combination of cash and shares of Smithfield's common stock. The interest rate, conversion rate, offering price and other terms of the convertible notes will be determined by negotiations between the underwriters and Smithfield. Smithfield expects to use a portion of the proceeds from the offering to fund the net cost of convertible note hedge and warrant transactions that Smithfield expects to enter into with affiliates of certain underwriters of the convertible notes, representing the cost to us of the convertible note hedge transactions, partially offset by the proceeds to us of the warrant transactions. In addition, Smithfield expects to use the proceeds from the offering to pay down one of its short-term credit lines and its U.S. revolving credit agreement. Receipt of net proceeds from the offering would also result in termination of the commitments of the lenders under a bridge facility that Smithfield put in place pending the sale of its beef operations, a transaction it currently expects will close during the second quarter of its fiscal year 2009. Smithfield intends to enter into privately-negotiated warrant transactions relating to its common stock with the option counterparties, pursuant to which it may be obligated to issue shares of its common stock. The convertible note hedge transactions are expected to reduce the potential dilution to Smithfield's common stock upon any conversion of the convertible notes. However, the warrant transactions could separately have a dilutive effect to the extent that the price of Smithfield's common stock exceeds the applicable strike price of the warrants. If the underwriters exercise their over- allotment option to purchase additional convertible notes, the notional size of the convertible note hedge transactions and warrant transactions will be automatically increased so that they also relate to a number of shares of Smithfield's common stock initially issuable upon conversion of the additional convertible notes. In connection with establishing their initial hedge of these convertible note hedge and warrant transactions, Smithfield has been advised that the option counterparties and their respective affiliates expect to enter into various over-the-counter derivative transactions with respect to its common stock concurrently with or after the pricing of the convertible notes and, shortly after the completion of the underwriters' participation in the distribution of the convertible notes, purchase Smithfield's common stock or other securities, including the convertible notes, in secondary market transactions. These activities could have the effect of increasing or preventing a decline in the price of Smithfield's common stock concurrently with or following the pricing of the convertible notes. In addition, the option counterparties and their affiliates expect to modify their hedge position after the pricing of the convertible notes from time to time by entering into or unwinding various derivative transactions with respect to Smithfield's common stock and by purchasing or selling Smithfield's common stock or other securities, including the convertible notes, in secondary market transactions and are likely to do so during any observation period related to the conversion of the convertible notes. These activities could have the effect of increasing, preventing a decline in or adversely impacting the value of Smithfield's common stock and the value of the convertible notes. Citi Goldman Sachs & Co. and JPMorgan are serving as joint book- running managers for the offering. Copies of the preliminary prospectus supplement and related prospectus for the offering can be obtained from the joint-book running managers for the offering at these addresses or telephone numbers: a) Citi Citi-Brooklyn Army Terminal 140 58th St., 8th Floor Brooklyn, NY 11220 Tel (800) 831-9146 b) Goldman Sachs & Co. Prospectus Department 85 Broad St., New York, NY 10004 Fax (212) 902-9316 Email prospectus-ny@ny.email.gs.com c) JPMorgan Prospectus Library 4 Chase Metrotech Center, CS Level Brooklyn, NY 11245 Tel (718) 242-8002 About Smithfield Foods With sales of $11 billion, Smithfield, Va.-based Smithfield Foods Inc. (NYSE: SFD) -- http://www.smithfieldfoods.com/-- processes and markets fresh pork and packaged meats in the United States, as well as produces hogs. The company conducts its business through five segments: Pork, International, Hog Production, Other and Corporate, each of which comprises a number of subsidiaries. The Pork segment produces a variety of fresh pork and packaged meats products in the United States and markets them nationwide and to a number of foreign markets, including China, Japan, Mexico, Russia and Canada. The Pork segment operates over 40 processing plants. The International segment includes its international meat processing operations that produce a variety of fresh and packaged meats products. The HP segment consists of hog production operations located in the United States, Poland and Romania, as well as its interests in hog production operations in Mexico. The Other segment comprises its turkey production operations and its interest in Butterball LLC. During the fiscal year ended April 27, 2008 it discontinued its Beef segment operations. * * * As reported in the Troubled Company Reporter on July 1, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Smithfield Foods Inc. to 'BB-' from 'BB+'. At the same time, S&P's assigned a '1' recovery rating to Smithfield Foods' senior secured notes, indicating expectations of very high (90%- 100%) recovery in the event of a payment default. The issue-level rating on the secured notes remains at 'BB+'. In addition, S&P's lowered the ratings on the company's senior unsecured notes to 'BB-' from 'BB' and assigned a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of a payment default. The ratings remain on CreditWatch with negative implications where they were placed on Dec. 3, 2007. Smithfield Foods had about $4.2 billion of debt at April 27, 2008. The TCR said on June 16, 2008, that Moody's Investors Service placed under review for possible downgrade the long-term ratings of Smithfield Foods Inc. Ratings placed under review for possible downgrade include Corporate family rating at Ba2; Probability of default rating at Ba2; and Senior unsecured debt at Ba3. This action was based Moody's expectation that credit metrics will remain inconsistent with the rating category, despite the anticipated receipt of proceeds from the pending sale of Smithfield's beef business, given worsening returns in the hog production business and higher than anticipated debt balances at fiscal year end April 27, 2008. The company's speculative grade liquidity rating was lowered to SGL-4 from SGL-3, reflecting Moody's concern that poor profitability will result in even heavier reliance on external sources of financing and that Smithfield will be challenged to meet its bank covenants. SMITHFIELD FOODS: Joint Venture Unit Merges with Spain's Campofrio ------------------------------------------------------------------ Groupe Smithfield Holdings, S.L., a 50/50 joint venture between Smithfield Foods Inc. and funds controlled by Oaktree Capital Management LLC, on June 30, 2008, agreed to merge with Campofrio Alimentacion, S.A. Campofrio is a company organized and existing under the laws of Spain. Under the terms of the Merger, Campofrio, a publicly-traded company on the Spanish Stock Exchange, will issue shares to the Company and the Oaktree Funds in exchange for all of the membership interests in Groupe Smithfield. Smithfield Foods, which currently controls about 24% of the outstanding shares of Campofrio, will control about 36% of the outstanding shares of the combined company after giving effect to the merger. Following the Merger, Campofrio's board of directors will have a nine members that will include two representatives of Smithfield Foods and two representatives of the Oaktree Funds. In connection with the merger, Smithfield Foods agree that for a period of three years it will not (i) be entitled to exercise voting rights with respect to more than 30% of the outstanding shares of Campofrio, (ii) appoint more than one-half of the directors of Campofrio or (iii) acquire any additional shares of Campofrio. Following the three-year period, Smithfield Foods will continue to be prohibited from appointing more than one-half of the directors of or acquiring additional shares of Campofrio unless it offers to acquire all of the outstanding shares of Campofrio at a fair price determined in accordance with applicable Spanish law. The above restrictions and obligations are subject to limited exceptions. Smithfield Foods will also agree not to pursue any opportunity to acquire, finance or otherwise invest in any processed meats business within the member countries of the European Union, other than Poland and Romania, unless it has first offered such opportunity to Campofrio. The merger is subject to the approval of the stockholders of Campofrio and to customary closing conditions and regulatory approvals, including the grant of a takeover bid exemption by the Spanish securities regulator, CNMV. Smithfield Foods expects the merger to close in the company's third fiscal quarter. After the merger, the company would continue to account for its investment in Campofrio under the equity method of accounting. About Campofrio Campofrio Alimentacion SA (MCE: CPF) is a Spain-based company engaged in the food industry. The company specializes in the processing, commercialization and distribution of pork and beef meat derivatives, such as sausages, cooked ham or cured meat. Additionally, it produces and distributes poultry and fish products. It markets its products under the Campofrio, Finissimas, Vuelta y Vuelta, Sanissimo, Pavofrio and Pollofrio brands. Campofrio Alimentacion SA is a parent company of Grupo Campofrio. The company's main subsidiaries are: Campofrio Portugal SA, Tenki International Holding BV, Carnes Selectas 2000 SAU and Campofrio Internacional Finance SARL, among others. The company mainly operates in Spain, Portugal, France, Romania and Russia. Its production plants are located in Burgos, Madrid, Toledo, Soria, Valencia and Caceres. About Smithfield Foods With sales of $11 billion, Smithfield, Va.-based Smithfield Foods Inc. (NYSE: SFD) -- http://www.smithfieldfoods.com/-- processes and markets fresh pork and packaged meats in the United States, as well as produces hogs. The company conducts its business through five segments: Pork, International, Hog Production, Other and Corporate, each of which comprises a number of subsidiaries. The Pork segment produces a variety of fresh pork and packaged meats products in the United States and markets them nationwide and to a number of foreign markets, including China, Japan, Mexico, Russia and Canada. The Pork segment operates over 40 processing plants. The International segment includes its international meat processing operations that produce a variety of fresh and packaged meats products. The HP segment consists of hog production operations located in the United States, Poland and Romania, as well as its interests in hog production operations in Mexico. The Other segment comprises its turkey production operations and its interest in Butterball LLC. During the fiscal year ended April 27, 2008 it discontinued its Beef segment operations. * * * As reported in the Troubled Company Reporter on July 1, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Smithfield Foods Inc. to 'BB-' from 'BB+'. At the same time, S&P's assigned a '1' recovery rating to Smithfield Foods' senior secured notes, indicating expectations of very high (90%- 100%) recovery in the event of a payment default. The issue-level rating on the secured notes remains at 'BB+'. In addition, S&P's lowered the ratings on the company's senior unsecured notes to 'BB-' from 'BB' and assigned a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of a payment default. The ratings remain on CreditWatch with negative implications where they were placed on Dec. 3, 2007. Smithfield Foods had about $4.2 billion of debt at April 27, 2008. The TCR said on June 16, 2008, that Moody's Investors Service placed under review for possible downgrade the long-term ratings of Smithfield Foods Inc. Ratings placed under review for possible downgrade include Corporate family rating at Ba2; Probability of default rating at Ba2; and Senior unsecured debt at Ba3. This action was based Moody's expectation that credit metrics will remain inconsistent with the rating category, despite the anticipated receipt of proceeds from the pending sale of Smithfield's beef business, given worsening returns in the hog production business and higher than anticipated debt balances at fiscal year end April 27, 2008. The company's speculative grade liquidity rating was lowered to SGL-4 from SGL-3, reflecting Moody's concern that poor profitability will result in even heavier reliance on external sources of financing and that Smithfield will be challenged to meet its bank covenants. SMITHFIELD FOODS: Amends U.S. and European Credit Facilities ------------------------------------------------------------ Smithfield Foods Inc. executed amendments to its US$1,300,000,000 secured revolving credit facility and its EUR300,000,000 secured revolving credit facility on June 25, 2008, and June 26, 2008. The amendments reduce the interest ratio coverage covenants from 3.0 to 1 to 2.0 to 1 under the U.S Credit Facility and the Euro Credit Facility until the end of the company's fiscal 2009. The second amendment dated June 25, 2008, pertains to a revolving credit agreement dated as of Aug. 19, 2005, among the company, subsidiary guarantors, lenders, Calyon New York Branch, Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank International," New York Branch and SunTrust Bank, as co- documentation agents, Citicorp USA Inc., as syndication agent and JPMorgan Chase Bank, N.A., as administrative agent, relating to a US$1,300,000,000 secured revolving credit facility, as amended. A full-text copy of the second amendment to the revolving credit agreement is available for free at http://ResearchArchives.com/t/s?2f0a The amendment dated June 26, 2008, pertains to multi-currency revolving facility agreement dated Aug. 22, 2006, between Smithfield Foods, Smithfield Capital Europe B.V., subsidiary guarantors, lenders, BNP Paribas and Societe Generale Corporate & Investment Banking as lead arrangers, and Societe Generale as facility agent and security agent relating to a EUR300,000,000 secured revolving credit facility. A full-text copy of the multicurrency revolving facility agreement is available for free at http://ResearchArchives.com/t/s?2f0b About Smithfield Foods With sales of $11 billion, Smithfield, Va.-based Smithfield Foods Inc. (NYSE: SFD) -- http://www.smithfieldfoods.com/-- processes and markets fresh pork and packaged meats in the United States, as well as produces hogs. The company conducts its business through five segments: Pork, International, Hog Production, Other and Corporate, each of which comprises a number of subsidiaries. The Pork segment produces a variety of fresh pork and packaged meats products in the United States and markets them nationwide and to a number of foreign markets, including China, Japan, Mexico, Russia and Canada. The Pork segment operates over 40 processing plants. The International segment includes its international meat processing operations that produce a variety of fresh and packaged meats products. The HP segment consists of hog production operations located in the United States, Poland and Romania, as well as its interests in hog production operations in Mexico. The Other segment comprises its turkey production operations and its interest in Butterball LLC. During the fiscal year ended April 27, 2008 it discontinued its Beef segment operations. * * * As reported in the Troubled Company Reporter on July 1, 2008, Standard & Poor's Ratings Services lowered its corporate credit rating on Smithfield Foods Inc. to 'BB-' from 'BB+'. At the same time, S&P's assigned a '1' recovery rating to Smithfield Foods' senior secured notes, indicating expectations of very high (90%- 100%) recovery in the event of a payment default. The issue-level rating on the secured notes remains at 'BB+'. In addition, S&P's lowered the ratings on the company's senior unsecured notes to 'BB-' from 'BB' and assigned a '4' recovery rating, indicating the expectation of average (30%-50%) recovery in the event of a payment default. The ratings remain on CreditWatch with negative implications where they were placed on Dec. 3, 2007. Smithfield Foods had about $4.2 billion of debt at April 27, 2008. The TCR said on June 16, 2008, that Moody's Investors Service placed under review for possible downgrade the long-term ratings of Smithfield Foods Inc. Ratings placed under review for possible downgrade include Corporate family rating at Ba2; Probability of default rating at Ba2; and Senior unsecured debt at Ba3. This action was based Moody's expectation that credit metrics will remain inconsistent with the rating category, despite the anticipated receipt of proceeds from the pending sale of Smithfield's beef business, given worsening returns in the hog production business and higher than anticipated debt balances at fiscal year end April 27, 2008. The company's speculative grade liquidity rating was lowered to SGL-4 from SGL-3, reflecting Moody's concern that poor profitability will result in even heavier reliance on external sources of financing and that Smithfield will be challenged to meet its bank covenants. SOLOMON TRANSPORT: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Solomon Transport Service, Inc. 2081 Carolwood Dr. Arcadia, CA 91006 Tel: (888) 723-7241 Bankruptcy Case No.: 08-19794 Chapter 11 Petition Date: July 2, 2008 Court: Central District Of California (Los Angeles) Debtor's Counsel: Paul R. Shankman, Esq. Email: pshankman@jhindslaw.com 21515 Hawthorne Blvd., Ste. 1150 Torrance, CA 90503 Tel: (310) 316-0500 http://jhindslaw.com/ Total Assets: $3,000,000 Total Debts: $2,092,000 A copy of Solomon Transport Service, Inc.'s petition is available for free at: http://bankrupt.com/misc/cacb08-19794.pdf SUPERIOR ESSEX: S&P Retains 'BB' Rating Under Developing Watch -------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Superior Essex Inc., including the 'BB' corporate credit rating, remain on CreditWatch with developing implications. The ratings were placed on CreditWatch on June 11, 2008, following Superior Essex's announcement that it signed a definitive agreement to be acquired by Korean-based LS Cable Ltd. (unrated) for $900 million, or $45 per share in a cash tender offer. Developing implications means that S&P could raise or lower the ratings. Superior Essex, in its Schedule 14D-9 public filing dated July 1, 2008, indicated that LS Cable has received a debt commitment letter from its lenders that will provide up to $350 million of asset-backed senior secured credit facilities for the purpose of redeeming the outstanding $257 million 9% senior notes due 2012. "We will monitor the redemption and will withdraw the ratings on Superior Essex's senior notes if it is successful," said Standard & Poor's credit analyst David Tsui. SUPERIOR ESSEX: S&P Retains 'BB' Rating Under Developing Watch -------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Superior Essex Inc., including the 'BB' corporate credit rating, remain on CreditWatch with developing implications. The ratings were placed on CreditWatch on June 11, 2008, following Superior Essex's announcement that it signed a definitive agreement to be acquired by Korean-based LS Cable Ltd. (unrated) for $900 million, or $45 per share in a cash tender offer. Developing implications means that S&P could raise or lower the ratings. Superior Essex, in its Schedule 14D-9 public filing dated July 1, 2008, indicated that LS Cable has received a debt commitment letter from its lenders that will provide up to $350 million of asset-backed senior secured credit facilities for the purpose of redeeming the outstanding $257 million 9% senior notes due 2012. "We will monitor the redemption and will withdraw the ratings on Superior Essex's senior notes if it is successful," said Standard & Poor's credit analyst David Tsui. TEXAS PETROCHEMICALS: To Distribute Reserve Shares on September 15 ------------------------------------------------------------------ Texas Petrochemicals Inc.'s board of directors directed Texas Petrochemicals LP to make final distribution of the reserve shares held by TPLP in connection with its Chapter 11 proceeding. The distribution will be on or about Sept. 15, 2008. As a result, TPLP will distribute approximately 610,000 shares in the company to unsecured creditors pursuant to TPLP's Plan of Reorganization. The shares to be distributed have been issued and outstanding since May 6, 2004, and will not impact the calculation of earnings per share of the company. Headquartered in Houston, Texas, Texas Petrochemicals LP, (OTC Pink Sheets: TXPI) -- http://www.txpetrochem.com/-- is a premier chemical company with more than $1 billion in annual sales. The company provides quality C4 chemical products and services to both local and global industry companies. The company has manufacturing facilities in the industrial corridor adjacent to the Houston Ship Channel, Port Neches and Baytown, Texas and operates a product terminal in Lake Charles, Louisiana. After filing for chapter 11 protection on July 20, 2003 (Bankr. S.D. Tex. Case No. 03-40258), the parent company emerged from bankruptcy in May 2004. The Court confirmed the Plan filed by Huff Alternative Income Fund LP for Texas Petrochemical Holdings Inc., and TPC Holdings LLC on April 24, 2005. When the Debtors filed for protection from their creditors, they listed $512,417,000 in total assets and $448,866,000 in total debts on a consolidated basis. Mark W. Wege, Esq., at Bracewell & Patterson, LLP represents the Debtors. TOUGHER INDUSTRIES: Ch. 11 Ongoing; Former Owner to be Sentenced ---------------------------------------------------------------- Former Tougher Industries Inc. owner Steven Shaw is set to receive a prison sentence on Oct. 14, The Business Review (Albany) reports, citing court filings. On June 13, Mr. Shaw pleaded guilty to charges of tax evasion, embezzlement and other fraud to secure a $6.1 million loan from Berkshire Bank. He also pleaded guilty to embezzling from a company health benefit plan. Mr. Shaw faces up to 30 years in prison and a maximum of $1 million fine, the report said. He also admitted that he used $41,000 in company funds to buy a Sea Ray boat for his personal use, and that he used $100,000 of company funds to help purchase personal real estate on Lake George, according to the report. Tougher Industries, Inc. is based in Albany, NY. It is a mechanical contractor. The Debtor filed for Chapter 11 protection on Nov. 3, 2006. The Debtor was already purchased and given extra financing from its new owners, Massachusetts firm J. Norbert Properties LLC, but the bankruptcy case is ongoing, according to the report. The Debtor did not disclose the value of its assets when it filed for bankruptcy. It listed estimated debt of $1 million to $100 million. TRIBUNE CO: LA Times Unit Cuts 17% of Editorial Workforce --------------------------------------------------------- The Tribune Co.-owned Los Angeles Times intends to cut around 250 jobs, including 17% of its news staff, and cut back on its published pages by 15%, to reign in rising costs, various reports say. In a memo distributed by L.A. Times editor Russ Stanton, the paper said 150 editors will be laid off out of a total of 840 news staff. The Times nearly had 1,200 editors in 2000, Reuters notes. In addition, some 100 jobs from the paper's other divisions will be cut, The Wall Street Journal cites L.A. Times publisher David Hiller. Most of these jobs in the business departments are already gone, while editorial positions will be eliminated on Labor Day. L.A. Times is Tribune's largest paper, according to the Wall Street Journal. In the memo, Mr. Stanton told the staff that the "moves will be difficult and painful", Reuters relates. "But it is absolutely crucial that as we move through this process, we must maintain our ambition and our determination to produce the highest-quality journalism in print and online, every day," Mr. Stanton told the staff. Mr. Hiller also told the Times staff that the measures are for the paper's "long-term survival". Company officials have assumed that the economic downturn that has caused the paper's lowered profitability and declining revenues will bottom out by early next year, the Associated Press says. The paper's efforts to cut back on expenses are also influenced by pressure to pay off part of its $13 billion, which comes due this year and 2009. About Tribune Company Headquartered in Chicago, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. * * * As reported in the Troubled Company Reporter on March 20, 2008, Standard & Poor's Ratings Services lowered its ratings on the class A and B units from the $79.795 million Structured Asset Trust Unit Repackaging Tribune Co. Debenture Backed Series 2006-1 to 'CCC' from 'CCC+' and removed them from CreditWatch with negative implications. TRONOX WORLDWIDE: Moody's to Review B3 Rating for Likely Cut ------------------------------------------------------------ Moody's Investors Service placed the ratings of Tronox Worldwide LLC (corporate family rating of B3) under review for possible downgrade following the statement that management has been granted a waiver by its bank group to prevent any potential breach of its leverage covenant in the second quarter ended June 30, 2008. In the 8K filed with the SEC, Tronox has been given until July 31, 2008 to obtain an amendment that would relax its financial covenants through year-end. Moody's notes that Tronox successfully agreed with its bank group to a second amendment, on Feb. 8, 2008, to relax the debt covenants on its credit facilities. While the willingness of the banks to grant a waiver and work with management to provide further covenant relief is positive for Tronox's liquidity, the need for such relief, reflecting weakness in the ability to generate free cash flow, continues to be a concern. Furthermore, Moody's is concerned that Tronox will need to adjust covenants further to maintain access to the facility in 2009. Tronox's and the industry's pricing power has been adversely affected by a downturn in the North American housing industry, which Moody's feels may be prolonged combined with a substantial increase in ore and energy costs. Major end uses for Tronox's Ti02 include architectural paints and coatings and PVC. Moody's review will examine the company's ratings given the lack of improvement in financial metrics over the past six months, the potential impact of a slowdown in the US economy in 2008-2009, the success of recently initiated price increases, potential further weakness in the company's titanium dioxide (Ti02) businesses, understanding of other possible strategic options, and the likelihood of other options to generate cash. This review is expected to be resolved by the end of August 2008. Tronox's LGD assessments and point estimates are not under review but are subject to change at the conclusion of the review. On Review for Possible Downgrade: Issuer: Tronox Worldwide LLC -- Probability of Default Rating, B3 -- Corporate Family Rating, B3 -- Senior Secured Bank Credit Facility, Ba3 19% LGD-2 -- Senior Unsecured Regular Bond/Debenture, Caa1 73% LGD-5 Outlook Actions: Issuer: Tronox Worldwide LLC -- Outlook, Changed To Rating Under Review From Negative On June 4, 2008, Moody's Investors Service lowered Tronox's corporate family rating to B3 from B2 and assigned a negative outlook as Moody's expected continued weakness in Ti02 pricing, which would likely diminish free cash flow from operations over the next 12-18 months. Moody's also indicated that the prospect of weaker cash flows could create a need for further amendments to the credit facility over time. Tronox Worldwide LLC is the third-largest global producer of TiO2, a white pigment used in a wide range of products for its ability to impart whiteness, brightness and opacity. TiO2 is used in a variety of products including paints and coatings, plastics, paper and consumer products. The company commands a 12% global market share in TiO2, reporting sales of $1.4 billion for the 12 months ended March 31, 2008. TROPICANA ENT: Wants to Set September 26 as Claims Filing Deadline ------------------------------------------------------------------ Tropicana Entertainment LLC and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to establish: (a) Sept. 26, 2008, at 6:00 p.m., Pacific Time, as the deadline for all persons or entities, other than governmental units, holding a claim against any of the Debtors to file claims; (b) Nov. 2, 2008, at 6:00 p.m., Pacific Time, as the deadline for all governmental units to file claims against any of the Debtors; (c) except where a claim has been included in the Schedules of Assets and Liabilities as disputed, contingent or unliquidated,establish the later of (i) the General Bar Date or the Governmental Bar Date, as applicable to the claim; or (ii) 20 calendar days after the claim holder is served with notice that the Debtors have amended their Schedules, as the bar date for filing a proof of claim with respect to that amended claim; and (d) except as otherwise set forth in any order authorizing rejection of an executory contract or unexpired lease, establish the later of (i) the General Bar Date or the Governmental Bar Date, as applicable to the claim; or (ii) 30 days after the rejection order date, as the bar date by which a proof of claim relating to the Debtors' rejection of that contract or lease must be filed. Although Rule 2002(a)(7) of the Federal Rules of Bankruptcy Procedure generally provides that all parties-in-interest must receive, at a minimum, 20 days' notice of the time fixed for filing proofs of claim pursuant to Bankruptcy Rule 3003(c), neither the Bankruptcy Code, the Bankruptcy Rules, nor the Local Rules specify a time by which proofs of claim must be filed in Chapter 11 cases, other than Section 502(b)(9) of the Bankruptcy Code, which provides that governmental units will have a minimum 180 days after entry of the order for relief to file proofs of claim, Mark D. Collins, Esq., at Richards Layton & Finger P.A., in Wilmington, Delaware, notes. Here, the Debtors propose to give all creditors more than 60 days' notice of the Bar Dates. The Debtors intend to file their Schedules on or before July 7, 2008. Creditors will, therefore, have ample time to review the Schedules and their own records and file a claim, if necessary, Mr. Collins says. The Debtors propose to serve notice of the Bar Dates and a proof of claim form upon all known entities holding potential prepetition claims within 10 business days after the Bar Date order is entered. The Debtors anticipate to serve the notice no later than July 24, 2008. Entities Required to File Claims The Debtors propose that these persons or entities be required to file proofs of claim before the General Bar Date: (a) any party whose claim against a Debtor is not listed in the applicable Debtor's Schedules or is listed as disputed, contingent, or unliquidated; (b) any party who desires to participate in any of the Debtors' Chapter 11 cases or share in any distribution in any of the Debtors' cases; and (c) any party who believes that its claim is improperly classified in the Schedules or is listed in an incorrect amount and who desires to have its claim allowed in a classification or amount other than that identified in the Schedules. The Debtors propose to excuse these persons or entities from filing proofs of claim: (a) any Debtor having a claim against another Debtor; (b) a claim holder for which a specific deadline previously has been fixed by the Court; (c) any claim holder whose claim has been paid in full by any of the Debtors, pursuant to the Bankruptcy Code or in accordance with a Court order; (d) any holder of a claim allowable under Sections 503(b) and 507(a)(2) of the Bankruptcy Code as an expense of administration. (e) any person or entity whose claim is limited exclusively to the repayment of principal, interest or other applicable fees and charges on or under one of more of the 9-5/8% Senior Subordinated Notes due 2014, issued by Tropicana Entertainment, LLC, and Tropicana Finance Corp. under the Indenture, dated December 28, 2006. The Indenture Trustee is required to file a proof of claim on or before the General Bar Date with respect to all Note claims. Any holder of a Note wishing to assert a claim, other than a note claim, arising out of or relating to the Notes is required to file a proof of claim by the General Bar Date. According to Mr. Collins, failure to file a proof of claim pursuant to the Bankruptcy Code, the Bankruptcy Rules or the Bar Date order with respect to a particular claim against a Debtor would forever bar, estop, and enjoin any person or entity from: -- asserting any claim against the Debtors that is (i) in an amount that exceeds the amount, if any, identified in the Schedules on behalf of the entity as undisputed, non- contingent and liquidated, or (ii) of a different nature or classification than any claim identified in the Schedules; or -- voting upon, or receiving distributions, under any plan of reorganization in the Debtors' bankruptcy cases in respect of an Unscheduled Claim. Notice of Bar Dates The Debtors propose to mail notice of the Bar Dates only to their known creditors, and they propose to rely on publication to give notice to their unknown creditors. The Debtors seek authority to publish notice of the Bar Dates in The Wall Street Journal (national edition), the Press of Atlantic City, the Newark Star Ledger, the Las Vegas Review Journal, the Evansville Courier, the Baton Rouge Advocate, International Gaming and Wagering Business, and other local newspapers, trade journals or similar publications, at least 30 days before the General Bar Date. As soon as practicable, but no later than 10 business days after the Bar Date order, the Debtors intend to mail the Bar Date Notice Package, consisting of the notice and a proof of claim form, by first class United State mail, postage prepaid, to 11 notice groups, including: -- all known potential creditors and their counsel; -- counsel of the Official Committee of Unsecured Creditors; -- all parties that have requested notice of proceedings; -- all parties that have filed proofs of claim; -- the Securities and Exchange Commission; and -- the Indenture Trustee. For any claim to be validly and properly filed, a signed original of a completed proof of claim, together with any required accompanying documentation, must be delivered on or before the applicable Bar Date to the Debtors' Claims Agent Kurtzman Carson Consultants LLC at: Tropicana Claims Processing c/o Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, California 90245 The Debtors propose that proofs of claim be submitted in person, by courier service, by hand delivery or by mail. Proofs of claim will be deemed filed when actually received by KCC. Proofs of claim submitted by facsimile or electronic mail will not be accepted. The Debtors also propose that persons or entities asserting claims against multiple Debtors file a separate proof of claim with respect to each Debtor and identify on each proof of claim the particular Debtor against which their claim is asserted. The Debtors also propose that if more than one Debtor is listed on the proof of claim, they will treat the claim as filed against only the first listed Debtor. Any claim filed under the joint administration case number -- Tropicana Entertainment, LLC, Case No. 08-10856 (KJC) -- or otherwise without identifying a Debtor be deemed as filed only against Tropicana Entertainment. The Debtors also ask the Court to approve their proposed form and manner of notice of the Bar Dates. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856) Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP represents the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' consolidated financial condition as of Feb. 29, 2008, showed $2,845,847,596 in total assets and $2,429,890,642 in total debts. (Tropicana Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Sec. 341(a) Meeting Adjourned, Schedules Due July 7 ------------------------------------------------------------------ Tropicana Entertainment LLC and its debtor-affiliates intend to file their Schedules of Assets and Liabilities, Schedules of Income and Expenditures, Schedules of Executory Contracts and Unexpired Leases, and Statements of Financial Affairs on or before July 7, 2008. In this connection, Roberta A. DeAngelis, acting U.S. Trustee for Region 3, will adjourn the initial meeting of creditors the Debtors' Chapter 11 cases pursuant to Section 341(a) of the Bankruptcy Code commenced on June 13, 2008, to a future date, yet to be determined, pending the Debtors' filing of their Schedules. Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856) Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP represents the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' consolidated financial condition as of Feb. 29, 2008, showed $2,845,847,596 in total assets and $2,429,890,642 in total debts. (Tropicana Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Conservator Has Until October 16 to Sell NJ Casino ----------------------------------------------------------------- The New Jersey Commission has granted retired former Supreme Court Justice Gary Stein, Tropicana Atlantic City's state-appointed conservator, a 120-day extension, until Oct. 16, 2008, to sell the New Jersey casino at a price near or at fair market value. Justice Stein has engaged in discussions with advisors to lenders under Tropicana Entertainment's Senior Credit Facility and holders of its 9-5/8% Senior Subordinated Notes concerning the sale of Tropicana Atlantic City. On May 29, 2008, the conservator for the Tropicana Atlantic City asked for additional time to complete the sale of the casino hotel complex, stating that bids for the Atlantic Casino are unreasonably low. Mr. Stein declined to state the number of bids received for Tropicana Atlantic, but other news agencies related that bids received for the casino range from $800,000,000 and $950,000,000. Justice Stein said that all bids have been rejected, and the sale process will start over. According to PressofAtlanticCity.com, creditors and Justice Stein are "leaning toward a pre-planned sale under the auspices of the U.S. Bankruptcy Court to clear up a host of legal and financial issues that otherwise might not be resolved." The Online Casino Advisory said that New Jersey Commission chairman Linda Kassekert has assured potential bidders that a filing under Section 363 of the Bankruptcy Code "would guarantee a free an clear title, with a short period of time before the closing of the sale." Additionally, the Superior Court of New Jersey, Appellate Division, has affirmed the decision of the New Jersey Casino Control Commission to revoke the license of Tropicana Casino and Resort of Atlantic City. "The record strongly supports a finding that Tropicana's conduct was purposeful and characterized by a philosophy or desire to do things its way rather than in the manner required by the New Jersey regulatory scheme," said the ruling by the Superior Court of New Jersey Appellate Division. "The findings made by the commission that Tropicana lacked financial integrity and responsibility, as well as business ability, are amply supported by the record." According to The Philadelphia Inquirer, the Supreme Court sided with the five-member New Jersey Casino Control Commission on virtually every issue, including Tropicana Entertainment, LLC unit Adamar of New Jersey Inc.'s financial unsuitability and unsanitary conditions at the Casino because of mass layoffs ordered by Adamar. Tropicana Entertainment said the Commission's decision to deny renewal of its license "triggered a series of cascading events that have lead directly to Tropicana's bankruptcy petition. On behalf of a trust formed to handle the Casino's assets, Judge Stein has been authorized to sell Tropicana Atlantic City assets. Tropicana Atlantic City features more than 2,000 hotel rooms in three hotel towers, and a a casino occupying almost 150,000 square feet, among other things. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856) Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP represents the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. The Debtors' consolidated financial condition as of Feb. 29, 2008, showed $2,845,847,596 in total assets and $2,429,890,642 in total debts. (Tropicana Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TW TELECOM: S&P Revises Outlook to Positive from Stable ------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Denver- based competitive local exchange carrier tw telecom inc. (twt; formerly Time Warner Telecom Inc.) to positive from stable. At the same time, S&P affirmed all the company's existing ratings, including its 'B' corporate credit rating. As of March 31, 2008, the company had $1.4 billion of funded debt outstanding. "The outlook revision reflects the improvement in net free cash flow deficits over the past year since the acquisition of CLEC Xspedius," said Standard & Poor's credit analyst Allyn Arden. It also reflects S&P's view that it is well positioned to generate more meaningful levels of net free cash flow over the next several years. UNIFI INC: Sells Polyester Plant to Reliance Industries for $12MM ----------------------------------------------------------------- Unifi Kinston, LLC, a wholly owned subsidiary of Unifi, Inc., and Reliance Industries USA, Inc., entered into an Asset Purchase Agreement, which provides for the sale of all remaining assets and structures, located at the Unifi Kinston's polyester manufacturing facility in Kinston, North Carolina, to Reliance for $12,184,000. Out of the proceeds from the Sale, Unifi Kinston will pay E.I. DuPont de Nemours a $3,666,666 payment, to satisfy certain demolition and removal obligations created by the sale of these assets. Upon the closing of the sale, Unifi Inc. expects to record a gain of approximately $6,900,000. Unifi Inc. anticipates that the closing of the sale will occur during the first half of its fiscal 2009; however the closing is subject to customary due diligence and closing procedures and Unifi Inc. makes no assurance that the sale will close during this time period or at all. Headquartered in Greensboro, North Carolina, Unifi Inc. (NYSE: UFI) -- http://www.unifi.com/ -- is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. Key Unifi brands include, but are not limited to: aio(R) - all-in-one performance yarns, Sorbtek(R), A.M.Y.(R), Mynx(R) UV, Repreve(R), Reflexx(R), MicroVista(R), and Satura(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. * * * The company's 11-1/2% Senior Secured Notes due 2014 carry Moody's Investors Service's Caa2 rating and Standard & Poor's Rating Services' CCC+ rating. VICTORY MEMORIAL: SUNY Takes Over Operations in 11th Hour Deal -------------------------------------------------------------- Victory Memorial Hospital was scheduled to lose its license on July 1, 2008, per a 2006 NYSDOH report ordering its closure. At the eleventh hour, the hospital reached a backroom deal with the State University of New York Downstate Medical Center to keep the hospital's operations, The Bay Ridge Rover and The Brooklyn Paper report. Under the deal, the facility was renamed SUNY Downstate at Bay Ridge. The facility will continue to run its urgent care, and diagnostic and treatment centers. The facility will also continue to run the ambulatory surgery unit for another two weeks, until Downstate receives a state certification to run that unit, Brooklyn Paper says. The reports say SUNY Downstate Bay Ridge will rent the space from the Abe Leser Group, which bought the hospital for $44.9 million in May 2008. Brooklyn Paper says the parties had been in negotiations for several weeks. The deal, the report says, abated fears of many Victory employees and nearby residents who worried that the hospital's pending closure would leave the neighborhood underserved. As reported by the Troubled Company Reporter on May 20, 2008, Victory Memorial Hospital and its debtor-affiliates delivered to the United States Bankruptcy Court for the Eastern District of New York a disclosure statement explaining their Chapter 11 Plan of Reorganization. The Plan contemplates the liquidation of substantial assets of the Debtors and the payment in full of all allowed secured claims and allowed unsecured priority claims. On the Plan effective date, the Debtors will assign all account receivable valued at $9.5 million to the liquidating trust. The proceeds of the accounts receivables will be available for the liquidating trust for distribution under the Plan. The Plan enables the Debtors to pursue avoidance and other actions in an aggregate amount of at least $14 million. The Debtors have assigned to the liquidating trust the exclusive right to commence and to continue the prosecution of all pending avoidance and other actions. A full-text copy of the Disclosure Statement is available for free at http://ResearchArchives.com/t/s?2c24 A full-text copy of the Chapter 11 Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?2c25 About Victory Memorial Based in Brooklyn, New York, Victory Memorial Hospital is a non-profit, full service acute care voluntary hospital with approximately 241 beds and a skilled nursing unit with 150 beds. Victory Hospital provides a full range of medical services with a focus on community care and a program of community outreach to the Brooklyn community. Victory Ambulance Services, Inc. a for-profit subsidiary, provides Victory Hospital with ambulance services. Victory Pharmacy, Inc., a for-profit subsidiary, does not have any employees or assets. The company and its two-subsidiaries filed for chapter 11 protection on Nov. 15, 2006 (Bankr. S.D.N.Y. Case Nos. 06-44387 through 06-44389). Timothy W. Walsh, Esq., and Jeremy R. Johnson, Esq., at DLA Piper US LLP, represent the Debtors. Craig E. Freeman, Esq., and Martin G Bunin, Esq., at Alston & Bird LLP, represent the Official Committee of Unsecured Creditors. When the Debtors filed for protection from their creditors, they listed assets and debts between $1 million and $100 million. VISUAL IMAGE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Visual Image Concepts, Inc. fka Knit Heaven, Inc. dba VCI dba Johnson Industries dba Visual Concepts Image, Inc. dba Best American Brand dba LA Premium 1234 E. 58th St. Los Angeles, CA 90011 Bankruptcy Case No.: 08-19798 Chapter 11 Petition Date: July 2, 2008 Court: Central District Of California (Los Angeles) Judge: Ernest M. Robles Debtor's Counsel: Rosendo Gonzalez, Esq. Email: rossgonzalez@earthlink.net 515 S. Figueroa St., Ste. 1970 Los Angeles, CA 90071 Tel: (213) 452-0070 Fax: (213) 452-0080 Total Assets: $1,909,833 Total Debts: $7,130,961 A copy of Visual Image Concepts, Inc.'s petition is available for free at: http://bankrupt.com/misc/cacb08-19798.pdf WACHOVIA BANK: S&P Places Six Low-B Ratings Under Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on two classes of commercial mortgage pass-through certificates from Wachovia Bank Commercial Mortgage Trust's series 2005-C20 on CreditWatch with negative implications. The ratings on nine additional classes remain on CreditWatch negative, where they were placed on March 6, 2008. The additional CreditWatch placements follow Standard & Poor's updated analysis of the fifth-largest loan, the Macon & Burlington Mall pool, which incorporated data from a recent appraisal. The loan is secured by the fee and leasehold interests in two crossed- collateralized and cross-defaulted regional malls. The loan was transferred to the special servicer, CWCapital Asset Management LLC, on Feb. 28, 2008, due to imminent default. Anchor and in- line tenants at both properties have continued to vacate in recent months, causing the occupancy and projected net cash flow to drop significantly from previously reported levels. Standard & Poor's will resolve the CreditWatch negative placements as it complete our review of the workout process for the asset. The Burlington Mall is a 419,194-sq.-ft. mall in Burlington, North Carolina, and has an allocated loan balance of $30.1 million, and the Macon Mall is a 762,398-sq.-ft. mall in Macon, Georgia, with an allocated loan balance of $107.8 million. Additionally, the borrower's equity interest in the property secures a $17.4 million senior mezzanine loan and a $9.5 million junior mezzanine loan. Both properties face new competition, which has caused the occupancy at the properties to decline significantly. CWCapital expects a third-party receiver to be put in place at the properties in the near future. Standard & Poor's will resolve the CreditWatch negative placements as it complete its review of the workout process for the specially serviced asset and review the credit characteristics of the remaining loans in the pool. Ratings Placed on Creditwatch Negative Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2005-C20 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ D A/Watch Neg A 8.46% E A-/Watch Neg A- 7.24% Ratings Remaining on Creditwatch Negative Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2005-C20 Class Rating Credit enhancement ----- ------ ------------------ F BBB+/Watch Neg 6.01% G BBB/Watch Neg 5.05% H BBB-/Watch Neg 3.82% J BB+/Watch Neg 3.14% K BB/Watch Neg 2.73% L BB-/Watch Neg 2.32% M B+/Watch Neg 2.05% N B/Watch Neg 1.77% O B-/Watch Neg 1.50% WACHOVIA BANK: S&P Places Six Low-B Ratings Under Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on two classes of commercial mortgage pass-through certificates from Wachovia Bank Commercial Mortgage Trust's series 2005-C20 on CreditWatch with negative implications. The ratings on nine additional classes remain on CreditWatch negative, where they were placed on March 6, 2008. The additional CreditWatch placements follow Standard & Poor's updated analysis of the fifth-largest loan, the Macon & Burlington Mall pool, which incorporated data from a recent appraisal. The loan is secured by the fee and leasehold interests in two crossed- collateralized and cross-defaulted regional malls. The loan was transferred to the special servicer, CWCapital Asset Management LLC, on Feb. 28, 2008, due to imminent default. Anchor and in- line tenants at both properties have continued to vacate in recent months, causing the occupancy and projected net cash flow to drop significantly from previously reported levels. Standard & Poor's will resolve the CreditWatch negative placements as it complete our review of the workout process for the asset. The Burlington Mall is a 419,194-sq.-ft. mall in Burlington, North Carolina, and has an allocated loan balance of $30.1 million, and the Macon Mall is a 762,398-sq.-ft. mall in Macon, Georgia, with an allocated loan balance of $107.8 million. Additionally, the borrower's equity interest in the property secures a $17.4 million senior mezzanine loan and a $9.5 million junior mezzanine loan. Both properties face new competition, which has caused the occupancy at the properties to decline significantly. CWCapital expects a third-party receiver to be put in place at the properties in the near future. Standard & Poor's will resolve the CreditWatch negative placements as it complete its review of the workout process for the specially serviced asset and review the credit characteristics of the remaining loans in the pool. Ratings Placed on Creditwatch Negative Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2005-C20 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ D A/Watch Neg A 8.46% E A-/Watch Neg A- 7.24% Ratings Remaining on Creditwatch Negative Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2005-C20 Class Rating Credit enhancement ----- ------ ------------------ F BBB+/Watch Neg 6.01% G BBB/Watch Neg 5.05% H BBB-/Watch Neg 3.82% J BB+/Watch Neg 3.14% K BB/Watch Neg 2.73% L BB-/Watch Neg 2.32% M B+/Watch Neg 2.05% N B/Watch Neg 1.77% O B-/Watch Neg 1.50% WALLACE ROBERTSON: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Wallace Henry Robertson, Jr. aka Rob Robertson dba Sumner Skate Zone and Stephanie Jo Robertson 104 Tamaras Court Hendersonville, TN 37075 Bankruptcy Case No.: 08-05570 Chapter 11 Petition Date: June 30, 2008 Court: Middle District of Tennessee (Nashville) Judge: Hon. George C. Paine II Debtor's Counsel: Roy C. Desha, Jr. (bknotice@deshalaw.com) Law Office of Roy C. Desha, Jr. 1106 18th Ave S Nashville, TN 37212 Telephone (615) 369-9600 Fax (615) 369-9613 Estimated Assets: $1,000,001 to $10 million Estimated Debts: $1,000,001 to $10 million A copy of debtor's petition and a list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/azb08-07826.pdf WATER PIK: Reduced Leverage Cues S&P to Revise Outlook to Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Water Pik Inc. to stable from negative. At the same time, S&P affirmed its ratings on the company, including the 'B-' corporate credit rating. Fort Collins, Colo.-based Water Pik had about $96.5 billion in reported debt as of March 31, 2008. The outlook revision reflects the company's reduced leverage since its acquisition by EG Capital Group LLC from Water Pik Technologies Inc. for $124 million in June 2007. Water Pik has been steadily reducing leverage and has maintained adequate cushion on its financial covenants. Adjusted debt to EBITDA declined to about 4x as of March 31, 2008, from more than 5x pro forma for the 2007 acquisition. The ratings on Water Pik reflect its highly leveraged capital structure, small size, narrow product focus, and somewhat limited track record as a stand-alone business entity. The company's good brand recognition and market-leading positions in dental water jets partially mitigate these factors. The outlook on Water Pik is stable. S&P expect Water Pik to sustain leverage close to current levels and sufficient cushion on its financial covenants despite a challenging economic environment. Specifically, S&P expect the company would maintain an EBITDA cushion of greater than 20% on its leverage ratio through June 30, 2009, if sales over the next year decline by close to 5% and EBITDA declines to closer to $17 million. S&P could revise the outlook to negative if operating performance deteriorates or if the cushion on the company's financial covenants becomes tight. S&P are unlikely to revise the outlook to positive over the next year, as Water Pik continues to operate with modest scale generating an annual EBITDA of below $25 million. WCI STEEL: Shareholders Injunction Plea vs Severstal Bid Denied --------------------------------------------------------------- The Hon. Stephen P. Lamb of the Delaware Chancery Court in Wilmington has denied a request by shareholders of WCI Steel Inc. to issue an injunction order against OAO Severstal's $140 million offer for the Ohio-based firm, Phil Milford writes for Bloomberg News. WCI shareholders -- CVI GVF (Lux) Master S.a.R.L., Eagle Rock Master Fund LP and Wilfrid Aubrey International Ltd. -- had claimed that the firm's board of directors should have accepted a US$172 million offer from Optima International, Bloomberg News relates. Shareholders also claimed that WCI directors were influenced by a steelworkers union to prefer Severstal's offer. Judge Lamb said in his ruling that WCI was "under pressure to complete a deal or face the prospect of a second bankruptcy" and its board exercised a "very thorough judgment" in accepting Severstal's offer. As reported in the Troubled Company Reporter in May 2008, Severstal reached a binding agreement to acquire all outstanding equity of WCI Steel for a total cash consideration of $140 million, implying an enterprise value of $331 million based on outstanding net debt as of April 30, 2008. Parties expect to complete the deal in July 2008. Citi and Raymond James are acting as financial advisors to Severstal on this transaction. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Severstal. About Severstal Headquartered in Cherepovets, Russia, OAO Severstal -- http://www.severstal.com/-- is the country's largest steel producer, with steel production of 17.1 million tons in 2005. The Company owns Severstal North America, the fifth largest integrated steel maker in the U.S. with 2005 production of 2.7 million tons, and Lucchini, Italy's second largest steel group with 2005 production of 3.5 million tons. Severstal is one of the world's lowest cost and most profitable steel producers, with 2005 EBITDA per ton of around EUR150 per ton. About WCI Steel Headquartered in Warren, Ohio, WCI Steel Inc. (OTC: WCIS.PK) -- http://www.wcisteel.com/-- is an integrated steel maker producing 185 grades of flat-rolled custom and commodity steel products. Its products include high carbon, alloy, ultra high strength, and heavy-gauge galvanized steel. Major customers are steel converters, processors, service centers, construction product companies, and to a lesser extent, automobile manufacturers. WCI Steel filed for chapter 11 protection on Sept. 16, 2003 (Bankr. N.D. Ohio Case No. 03-44662) and emerged from Chapter 11 in May 2006, under a plan proposed by 17 Noteholders led by Harbinger Capital Partners Master Fund I, Ltd., that gave the Noteholders $100,000,000 in new 8% Secured Notes and more than 98% in equity of the reorganized steel company. * * * Moody's Investors Service placed WCI Steel Inc.'s senior secured debt rating at 'Ca' in May 2003. The ratings still hold to date with a negative outlook. WHITEHALL JEWELERS: Taps Proskauer Rose as Bankruptcy Counsel ------------------------------------------------------------- Whitehall Jewelers Holdings Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for permission to employ Proskauer Rose LLP as their bankruptcy counsel. Separately, the Debtors also ask the Court to employ (i) Pachulski Stang Ziehl & Jones LLP as their co-counsel, and (ii) FTI Consulting Inc. as their financial advisor. Proskauer Rose will: a) advise the Debtors with respect to their powers and duties as debtors-in-possession; b) assist the Debtors in the preparation of their financial statements, schedules of assets and liabilities, statements of financial affairs and other reports and documentation required under the Bankruptcy Code; c) representing the Debtors at all hearing on matters pertaining to their affairs as debtor-in-possession; d) prosecuting and defending litigated matters that may arise during these Chapter 11 cases; e) counsel and represent the Debtors in connection with the administration of claims and numerous other bankruptcy- related matters arising from these Chapter 11 cases; f) counsel the Debtor with respect to any general legal matters relating to these Chapter 11 cases; g) assist the Debtors in obtaining confirmation of a plan(s) of reorganization, approval of a disclosure statement and all matters related thereto; and h) perform all other legal services that are necessary and desirable for the efficient and economic administration of the Debtor's Chapter 11 cases. The firm's professionals and their compensation rates are: Designations Hourly Rates ------------ ------------ partners $490-$975 senior counsel $350-$725 associates $180-$650 paraprofessional $70-$275 Scott K. Rutsky, Esq., a member of the firm, assures the Court that the firm does not hold any interests adverse to the Debtors' estates and is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. About Whitehall Jewelers Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings, Inc. -- http://www.whitehalljewellers.com/-- own and operate 375 stores jewelry stores in 39 states. The company operates stores in regional and regional shopping malls under the names Whitehall and Lundstrom. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers. The company and its affiliates, Whitehall Jewelers Inc., filed for Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case No. 08-11261). Epiq Bankruptcy Solutions LLC as their claims, noticing and balloting agent. The U.S. Trustee for Region 3 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors' filed for protection against their creditors, they listed total assets of total assets of $207,100,000 and total debts of $185,400,000. * Moody's: Rising Prices Affect American Chemicals Manufacturers ---------------------------------------------------------------- Due to the rising cost of oil and energy and flagging consumer demand, the credit outlook is negative overall for chemicals manufacturers in the U.S. and Canada, according to the latest report on the sector from Moody's Investors Service. "The negative outlook for the industry reflects weak U.S. economic growth in the first half of 2008 and anticipation of elevated energy and commodity prices that will further slow demand in the second half of the year," John Rogers, Moody's senior vice president, said. In an exception to the general negative trend, chemicals companies in some segments, such as agriculture and industrial gases, will continue to exhibit stronger profitability despite feedstock cost increases and weaker US growth. "Surging prices of oil, energy and other commodities are reverberating through the North American chemicals industry," Mr. Rogers said. "Some companies are struggling to pass these higher costs through to their customers, while others are benefiting from dramatically higher prices for their products." Issuers directly exposed to certain feedstock and energy costs that have increased precipitously include VeraSun, Aventine, Reichhold, Tronox, Cristal, Solutia, Kraton Dow, LyondellBasell, FiberVisions, Huntsman, INVISTA, Hexion, Chevron Phillips, Lubrizol, NewMarket, Eastman, Rohm & Haas and DuPont. Some specialty companies will be affected to a greater degree in the third and fourth quarters as higher costs work their way through the supply chain, including Chemtura, PPG, Valspar, RPM, Nalco, OMNOVA, Rockwood, PolyOne, Gentek, Ashland, Cytec, Hercules, and Cabot. "If these feedstock and energy prices remain elevated for the remainder of the year, the fourth quarter of 2008 could be very weak for most companies in the industry, with the exception of those in the agricultural and industrial gas sectors," Mr. Rogers said. Exports are one bright spot for some companies. The weak U.S. dollar, combined with natural gas and related feedstock prices that are low relative to prices in other developed countries, are having a positive effect on exports in certain sectors of the industry. Strong demand in China, India and other Asian economies is driving significant capital investment in the chemicals industry. New production capacity expected in Asia and the Middle East starting in 2009 could pressure margins for North American chemicals producers for the next three to four years. Companies with greater exposure to international markets or lack of exposure to commodity increases will be more likely to outperform their peers, including Celanese, IFF, Sensient, Mafco, Compass, and American Rock Salt. * Moody's Sees Unfavorable Credit State for Automotive Makers ------------------------------------------------------------- Fundamental credit conditions for the global automotive manufacturing sector will be negative over the next 12 to 18 months, but demand will remain strong in emerging markets, according to a new report from Moody's Investors Service. Declining demand is expected in most of the major developed markets through 2008, including the US, Western Europe and Japan, offsetting the strong growth expected in Brazil, India, Russia and China. "The sharp decline in demand in the US and some other developed markets is driving the negative outlook, even though growth remains strong in key emerging markets like Brazil and China," Bruce Clark, Moody's senior vice president, said. Moody's expects 2008 sales to fall: -- 9% or more year over year in the US -- 15% in Spain -- 10% in Italy -- 0.4% in Japan In contrast, relatively robust rates of growth are anticipated in other markets: -- Brazil expected to be up 15% -- Russia up 20% -- India up 11% -- China up 14% -- Germany up 2.5% The big three US-based manufacturers face the biggest challenge, due to the rapid shift in consumer demand from trucks and SUVs to more fuel efficient vehicles. "The shift away from trucks and SUVs will pose a significant burden to the three US-based manufacturers, and could result in downgrades of their B3/Negative ratings," Mr. Clark said. The outlook is more stable for most non-US automakers. Of the 14 rated non-US-based automotive manufacturers, 11 have a degree of product strength, geographic diversification, operating efficiencies, and financial flexibility that will enable them to adequately contend with near-term market stress and to maintain their current rating levels, Mr. Clark said. The three non-US manufactures with a negative outlook are Renault (Baa1), Peugeot (Baa1) and Tata Motors (Ba2). The continued rise in fuel and commodity costs is putting downward pressure on the sector, as are the ongoing expenditures to comply with government-mandated emissions requirements, Moody's said. Manufacturers exporting vehicles into the historically profitable US market will be burdened by the weakening US dollar. Moody's expects US-based and European-based manufacturers will likely continue to reduce capacity in their home markets due to pressure on market share and high labor rates. This is particularly true for Ford, Chrysler and GM, Moody's said. In an effort to reduce their exposure to fluctuations in currency values or political backlash against imports, Moody's expects nearly all manufacturers will continue to pursue an aggressive strategy of locating assembly facilities in markets in which they sell. Consequently, capacity expansion will continue in China, Eastern Europe and Latin America, Moody's said. * Moody's Sees Stable Liquidity in Nondurable-Products Industry --------------------------------------------------------------- Credit fundamentals for the US consumer nondurable-products industry will remain stable over the next 12 to 18 months and liquidity for the sector is holding steady overall, according to new research from Moody's Investors Service. Despite the stable outlook, the potential for further economic weakness in the US and for a slowdown in demand overseas, could pressure revenues, and rising commodity costs are already starting to squeeze gross margins, Moody's said. "We think revenue growth will hold steady over the next year or so, because people are unlikely to stop buying most consumer products, even in a slowing economy," Christina Padgett, Moody's senior vice president, said. The consumer nondurable products sector includes companies selling everyday items like toothpaste, diapers and shampoo, as well as cosmetics, detergent, toys, greeting cards and other items. Prominent companies in the sector include Procter & Gamble, Colgate-Palmolive, Avon Products, Kimberly-Clark, Mattel, and Hasbro. Liquidity in the industry should hold up even as the economy weakens, though there are a few trouble spots. "Most of the companies we cover don't face near-term maturities or tightening financial covenants, and have access to financing under their committed bank facilities," Janice Hofferber, Moody's vice president and senior analyst, said. In May, the industry saw its first default in many years, with greeting-card company Recycled Paper's payment default. Some major companies, like Revlon and Prestige Brands, have significant maturities in the next 18 months. Companies that sell products in Brazil, Russia, India, China and other fast-growing emerging markets will enjoy an advantage Moody's said, while those focused on the US and European markets will likely show more modest revenue growth. US-dollar weakness should also boost the value of international sales. Brand strength will also be critical to issuers' relative strength, particularly as companies struggle to pass on rising input costs. "Strong brands are important because they allow companies to raise prices without meaningfully hurting demand," Ms. Padgett said. "Conversely, companies that primarily sell commodity-type products, like bleach, garbage bags or paper goods, will have a harder time passing on costs to consumers, who instead might switch to lower-cost brands." Top-tier brands likely will maintain market share, and within lower-priced products, higher-quality private-label offerings are likely to fare better than weaker brands, Moody's said. * Moody's Says Private Colleges and Universities Fared Well ----------------------------------------------------------- Private colleges and universities collectively fared well in the last fiscal year, but problems in the larger economy and elsewhere may dampen financial performance in fiscal 2008 and 2009, according to a new report from Moody's Investors Service. While strong balance sheets, strong philanthropic support, and rising student demand characterized fiscal 2007 and lifted nearly all key credit factors, the near future looks less sanguine, with pressure on investment returns, ambiguity in the student loan market, and a substantially weaker economic environment, the report said. Auction rate and other variable rate securities continue to pose problems. "We expect some institutions with a high allocation to auction rate securities to experience some pressure on operating performance in fiscal 2008, given higher interest costs associated with failed auctions and penalty rates," Margot Asher Kleinman, associate analyst at Moody's and author of the report "Moody's Fiscal Year 2007 Private College and University Medians" said. In addition, investment returns for the majority of the 281 private colleges and universities that Moody's rates have been negative for the fiscal year to date. "This implies that we are likely to see declines in endowment for the current fiscal year, a move away from the robust returns of the recent past," Ms. Kleinman said. The report includes charts and visual tools that highlight each of Moody's broad rating factors, including student demand, financial reserves, capital investment and debt, and operating performance. Moody's universe of 281 rated private higher education institutions comprises over $58 billion of debt outstanding. The median rating for the sector is A2 when calculated by the number of institutions and Aa3 when weighted by the amount of rated debt outstanding. * Moody's Says Many States Fail to Adopt Budgets on Schedule ------------------------------------------------------------ Several of the nation's most populous states have not yet enacted budgets for fiscal years that began July 1, said Moody's Investors Service, which is monitoring the situation. However, the rating agency also cautioned that many states with histories of delayed budgets also had long histories of providing for debt service and other expenses, even in the absence of adopted spending plans. New fiscal years began July 1 in 46 states. Four of them -- California, Illinois Massachusetts, and Pennsylvania -- failed to adopt budgets in time for the new fiscal year. New York missed its April 1 fiscal year start, but New York has since adopted a budget. Late budget adoption has the potential to disrupt the flow of a state's payments to vendors and employees, as well as to the cities, public universities and other municipalities that rely on state funds. "Moody's views repeated delays, or those causing government shutdowns, as signs of political polarization, and for those reasons, the timing of state budget enactment can affect the ratings Moody's assigns to state issued general obligation bonds and other debt," Ted Hampton, a Moody's assistant vice president and author of a report titled "Several U.S. State Budgets Are Late," said. * S&P Puts Negative Watch on Nine Ford Motor-Related Transactions ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on nine Ford Motor Co. (Ford; B/Watch Neg/NR)-related transactions on CreditWatch with negative implications. The rating actions reflect the June 20, 2008, placement of the long-term corporate credit and senior unsecured debt ratings on Ford and its related entities on CreditWatch with negative implications. The nine transactions are pass-through transactions, and the ratings on the trusts are based solely on the senior unsecured rating assigned to the underlying collateral. The underlying collateral consists of securities issued by Ford, as indicated in the list below. The corporate rating actions on Ford and its affiliates have no immediate rating impact on the Ford-related asset-backed securities supported by collateral pools of consumer auto loans or auto wholesale loans. Ratings Placed on Creditwatch Negative Corporate Backed Trust Certificates Ford Motor Co. Debenture- Backed Series 2001-36 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A-1 CCC+/Watch Neg CCC+ 7.7% deb due 05/15/2097 A-2 CCC+/Watch Neg CCC+ 7.7% deb due 05/15/2097 Corporate Backed Trust Certificates Ford Motor Co. Note-Backed Series 2003-6 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A-1 CCC+/Watch Neg CCC+ 7.45% Global Landmark Secs (GlobLS) notes due 07/16/2031 CorTS Trust for Ford Debentures Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Certs CCC+/Watch Neg CCC+ 7.4% deb due 11/01/2046 CorTS Trust II for Ford Notes Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Certs CCC+/Watch Neg CCC+ 7.45% Global Landmark Secs (GlobLS) notes due 07/16/2031 PPLUS Trust Series FMC-1 Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Certs CCC+/Watch Neg CCC+ 7.45% Global Landmark Secs GlobLS) notes due 07/16/2031 PreferredPLUS Trust Series FRD-1 Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Certs CCC+/Watch Neg CCC+ 7.4% deb due 11/01/2046 Public STEERS Series 1998 F-Z4 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A CCC+/Watch Neg CCC+ 7.7% deb due 05/15/2097 B CCC+/Watch Neg CCC+ 7.7% deb due 05/15/2097 SATURNS Trust No. 2003-5 Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- Units CCC+/Watch Neg CCC+ 7.45% Global Landmark Secs (GlobLS) notes due 07/16/2031 Trust Certificates (TRUCs) Series 2002-1 Trust Rating ------ Class To From Underlying collateral ----- -- ---- --------------------- A-1 CCC+/Watch Neg CCC+ 7.7% deb due 05/15/2097 * BOOK REVIEW: Cardozo and Frontiers of Legal Thinking ------------------------------------------------------ Author: Beryl H. Levy Publisher: Beard Books Paperback: 336 pages List Price: US$34.95 Order your personal copy at http://www.amazon.com/exec/obidos/ASIN/1893122689/internetbankrupt Cardozo and Frontiers of Legal Thinking, by Beryl H. Levy portrays Justice Cardozo, a lawyer and philosopher, as concerned with harmonizing legal rules with social values and the demands of stability with changes in the law. In this scholarly but eminently readable tome, Beryl H. Levy focuses on the law that is made by judges in the higher courts when an appeal is taken from the trial court. He specifically addresses closely contested cases where convincing briefs have been presented by both sides and where the judges on the appellate court are likely to be divided. The point of departure is the thinking of Justice Benjamin Cardozo, who recognized emerging trends and forces in the country and made public law more responsive to them. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Raphael M. Palomino, Shimero R. Jainga, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Melanie C. Pador, Ludivino Q. Climaco, Jr., Loyda I. Nartatez, Tara Marie A. Martin, Joseph Medel C. Martirez, Ma. Cristina I. Canson, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***