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/raid1/www/Hosts/bankrupt/TCR_Public/080725.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 25, 2008, Vol. 12, No. 176 Headlines 1027 RUE: Voluntary Chapter 11 Case Summary ADVANCED MICRO: Posts $1.2 Billion Net Loss in 2008 Second Quarter ADVANSTAR COMMUNICATIONS: Moody's B3 Rating Has Stable Outlook AIRPLANES PASS-THROUGH: Fitch Holds 'BB' Rating on Cl. A-8 Notes AMERICAN LAFRANCE: Exits Chapter 11 Bankruptcy, Moves Fire Biz AMPEX CORPORATION: Has Until October 26 to File Chapter 11 Plan ASARCO LLC: Union Leader Urges DOJ, State AGs to Choose Vedanta ATLANTIC WINE: Meyler & Co Expresses Going Concern Doubt ATOM ACQUISITION: Moody's Assigns (P)Ba1 Corporate Family Rating AVIATION CAPITAL: Fitch Puts Two Low-B Ratings Under Neg. Watch BBW ENTERPRISES: Voluntary Chapter 11 Case Summary BEAR STEARNS COMMERCIAL: Fitch Affirms 'BB+' Rating on Certs. BENTON COUNTY PROPERTY: Voluntary Chapter 11 Case Summary CALIFORNIA OIL: Posts $310,615 Net Loss in Quarter Ended May 31 CENTERLINE HOLDING: NYSE Routes Share Trade to NYSE Arca Exchange CHARLES MAK: Case Summary & 20 Largest Unsecured Creditors CHESAPEAKE CORP: UK Subsidiary Agrees on Amended Recovery Plan CIENA CORPORATION: Moody's Withdraws Ratings on Lack of Rated Debt CLEAR CHANNEL: Shareholders Approve Bain Capital-Led Merger COCHRAN CUSTOM: Case Summary & 20 Largest Unsecured Creditors COMMERCIAL MORTGAGE: Fitch Chips $14.7MM Certs Rating to 'C/DR5' D&C LOGISTICS: Voluntary Chapter 11 Case Summary DAVID FLETTRICH: Voluntary Chapter 11 Case Summary DEATH ROW: Global Music Wants Court to Postpone Sale Closing DELTA AIR: Extends Pinnacle Contract Through September 2008 DIANE SPREADBURY: Voluntary Chapter 11 Case Summary DLJ COMMERCIAL: Fitch Holds 'B-' Rating on $6.3MM Class B-7 Certs. DML LAND: Case Summary & 10 Largest Unsecured Creditors DOUBLE JJ: Judge Hughes Appoints Receiver in Bankruptcy Case DRIVETIME: Moody's Reviews Low-B Senior Debt Rating for Likely Cut DYNAMERICA MFG: Gets Initial OK to Use TRW Unit's $2MM Financing ENTERGY GULF: Company Split Cues Fitch to Take Rating Actions ENVIRONMENTAL TECTONICS: Has $10.4MM Equity Deficit at May 30 FEARLESS INT'L: Case Summary & 39 Largest Unsecured Creditors FIRST MAGNUS: Violated Real Estate Settlement Rules, HUD Says FIRST PROTECTION: Voluntary Chapter 11 Case Summary FIRST DARTMOUTH: Wants Ch. 11 Plan Confirmation Hearing Hold Off FOAMEX INTERNATIONAL: Elects Directors, Updates on Debt Reduction FORD MOTOR: Net Loss Slides to $8.7BB in Quarter Ended June 30 GAMMA PHARMA: LL Bradford & Co Expresses Going Concern Doubt GE COMMERCIAL: S&P Lowers Ratings on Three Classes of Certificates GLOBALIGN INC: Case Summary & 20 Largest Unsecured Creditors GMAC LLC: Jim Jones Resigns, Names Thomas Marano as ResCap CEO GTC BIOTHERAPEUTICS: Fails to Regain NASDAQ Minimum Price Bid HANCOCK FABRICS: Court Confirms Chapter 11 Plan of Reorganization HANFORD MONTECITO: Case Summary & 16 Largest Unsecured Creditors HEALTHSOUTH CORP: To Discuss Second Quarter Results on August 6 HECKLE'S EAGLE: Case Summary & 40 Largest Unsecured Creditors HOLDINGS GAMING: S&P Rates Proposed $445MM Credit Facilities 'BB-' HUNTINGTON POINTE: Voluntary Chapter 11 Case Summary IL PALAZZO I: Voluntary Chapter 11 Case Summary INVITROGEN CORP: S&P Rates Proposed $2.65BB Credit Facility 'BB+' INTERPUBLIC GROUP: Moody's Rates $335MM Debt Facility Due 2011 Ba3 ISCO INTERNATIONAL: Appoints J. Christie as Vice President - Sales JHT HOLDINGS: U.S. Trustee Forms Four-Member Creditors Committee JONATHAN SHIFF: Taps Smaha Law Group as Bankruptcy Counsel JPMORGAN CHASE: S&P Puts Default Rating on Class K Certificates JP MORGAN CHASE: Fitch Cuts Ratings on Certs.; Removes Neg. Watch KENDLE INTERNATIONAL: Moody's Withdraws Low-B and SGL-2 Rating LAKE LAS VEGAS: Obtains Court's Nod to Use $1.1MM Cash Collateral LEASE INVESTMENT: Fitch Downgrades Ratings on Five Note Classes LONGPORT FUNDING III: Moody's Junks Rating on Class A1-VF Notes LUBBOCK MEDICAL: Junks Sale Motion; Wants OK on Collins DIP Fund LUIS PENA: Voluntary Chapter 11 Case Summary LUMINENT MORTGAGE: Awards CIO 750,000 in Restricted Common Shares MAXXAM INC: Inks Agreement with PBGC on PALCO Pension Plan MEDICAL GASES: Case Summary & 20 Largest Unsecured Creditors MICHAEL GRAY: Case Summary & 20 Largest Unsecured Creditors MORTGAGES LTD: Wants to Hire Barry Monheit as Financial Advisor MRS HOMES: Voluntary Chapter 11 Case Summary NATIONAL DRY: Section 341(a) Meeting Scheduled for August 20 NATIONAL DRY: Wants to Hire Young Conaway as Attorney NETWOLVES CORP: Seeks Another Exit Financing After Axiom's Failure NEW AMSTERDAM: Case Summary & 11 Largest Unsecured Creditors NEW MOUNT OLIVE: Case Summary & Two Largest Unsecured Creditors OMNI FINANCIAL: Decides to Delist Common Stock from Nasdaq ORIENTAL FIN'L: S&P Holds 'BB+' Rating; Changes Outlook to Stable PACIFIC LIFE: Fitch Lifts FS Rating to A from BB After PLC Deal PEGASUS AVIATION: Fitch Cuts Ratings on Two Classes to 'CCC/DR2' PFF BANCORP: To Move Share Trading to Over the Counter Market PLASTECH ENGINEERED: No Admin. Treatment to Reclamation Claims PLAYMORE INC: Case Summary & 20 Largest Unsecured Creditors PLASTECH ENGINEERED: Plant in Elwood, Indiana Damaged by Fire PORTOLA PACKAGING: May 31 Balance Sheet Upside-Down by $106.8MM PORTOLA PACKAGING: Plans to Restructure by Pre-Package Chapter 11 PRIME 2004-CL1A: S&P Junks Ratings on Two Classes of Certificates QUEBECOR WORLD: Catalyst Slashes Reclamation Claim to $1,852,016 QUEBECOR WORLD: Inks Two Master Lease Pacts with National City QUEBECOR WORLD: Mulls $19.7 Mil. Expansion of Dubuque, Iowa Plant QUEBECOR WORLD: Signs $55 Mil. Printing Deal with Reader's Digest RESIDENTIAL CAPITAL: Appoints Thomas Marano as Chairman and CEO REVE SPC: Moody's Cuts EUR10MM Notes Series 2007-3F2 Rating to Ba2 REVE SPC: Moody's Cuts Rating on $3MM Dryden XVII Notes to B2 RICHFX INC: Bought by ChannelAdvisor for $3 Million ROCK 2001-C1: Moody's Affirms Junk Rating on $4.5MM Class N Cert. ROSEWIND PROPERTY: Voluntary Chapter 11 Case Summary RUSSELL BOTTOMS: Voluntary Chapter 11 Case Summary SANDISK CORP: Severe 2Q Operating Losses Cue S&P to Cut Ratings SCOTTISH RE: A.M. Best Cuts FS Rating to C(Weak) from C(Marginal) SEDONA 2005-1: Moody's Junks Rating on $9MM Class B3-LEK Notes SEDONA 2005-2: Moody's Junks Ratings on Notes with A3 Prior Rating SEDONA 2005-1: Moody's Cuts Rating on $2MM Class A3-LK Notes SEDONA 2005-1: Moody's Cuts Class A3-F Notes Rating by 9 Notches SEMGROUP LP: Court OKs Use of Cash Collateral, First Day Motions SEMGROUP LP: Fitch Cuts, Withdraws Ratings After Bankruptcy Filing SEMGROUP LP: Voluntary Ch. 11 Filing Cues Moody's to Junk Ratings SEMGROUP LP: Bankruptcy Filing Cues Fitch to Put Default Ratings SERVICEMASTER CO: Moody's Assigns B3 Rating to $1.15BB Notes SHEFFIELD CDO II: Moody's Junks Rating on Class C Notes Due 2051 SHORELAND DEVELOPMENT: Voluntary Chapter 11 Case Summary STEVE & BARRY'S: Sears, GAP Interested in Buying Assets, WSJ Says SPRINT NEXTEL: Selling Towers to TowerCo LLC for $670 Million Cash STEVE & BARRY'S: Trustee Appoints Unsecured Creditors Committee SUMMA LLC: Chapter 11 Case Summary and Largest Unsecured Creditor TEMPLE BETH: Case Summary & 11 Largest Unsecured Creditors TOLLIVER SWALLOW: Case Summary & Seven Largest Unsecured Creditors TOUSA INC: Wants Court to Pool Appeals on Cash Collateral Order TRIPLE S: Voluntary Chapter 11 Case Summary TRITON AVIATION: Fitch Keeps 'C/DR6' Ratings on Four Note Classes TULLY'S COFFEE: Says 10-K Filing with the SEC Will be Delayed US XPRESS: Moody's Cuts Ratings to B3 with Negative Outlook UAL CORP: United Agrees with IAM on Voluntary Early Out Program UAL CORP: JPMorgan Analyst Sees Disclosure of $1 Billion Cash Call UAL CORP: Faces Illegal Profiting Charges by Immigrant Workers UNIBLEND MANUFACTURING: Case Summary & 20 Largest Unsec. Creditors VERASUN ENERGY: S&P's Rating Unaffected by Ethanol Plant Start-Up VERENIUM CORP: Receives $40MM Grant to Develop Small-Scale Plant VILLA CORTEZ: Voluntary Chapter 11 Case Summary VONAGE HOLDINGS: Secures $215MM Debt Financing from Silver Point WINERY DISPOSITION: Case Summary & Four Largest Unsec. Creditors WR GRACE: Court Sets October 21 as ZAI Proof of Claims Bar Date XM SATELLITE: June 30 Balance Sheet Upside-Down by $1.2 Billion XM SATELLITE: S&P Junks Rating on Proposed $400MM Rule 144A Notes * Delay in TRUP Payments by Banks Cues Moody's to Review Ratings * Fitch Says Negative Rating Trend in Global Bank to Continue * Fitch: Copper, Aluminum Prices on New Peaks on US Dollar Slump * Fitch: New Econ. Stress in US Banking Takes a Toll on Investors * Moody's Sees Stability in Global Non-Durable Products Industry * Moody's: Issuers with Weakest Liquidity Rating Hit Record High * Moody's Shows How its New Risk Measures Work for ABS Sector * S&P Cuts Ratings on 1,317 Classes from 270 US Subprime RMBS * S&P Expands 'C' Rating Definition; Revises Ratings on Six Issues * Summary of Key Issues on Amendments to BIA and CCAA * Raymond Chabot Expands Service Offering with Synerma Acquisition * BOOK REVIEW: Corporate Players: Designs for Working and Winning Together ********* 1027 RUE: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: 1027 Rue Chartres, LLC 1027 Rue Chartres New Orleans, LA 70116 Bankruptcy Case No.: 08-11714 Chapter 11 Petition Date: July 22, 2008 Court: Eastern District of Louisiana (New Orleans) Judge: Elizabeth W. Magner Debtor's Counsel: Darryl T. Landwehr, Esq. Email: dtlandwehr@aol.com 1010 Common Street, Suite 1710 New Orleans, LA 70112 Tel: (504) 561-8086 Fax: (504) 561-8089 Total Assets: $2,333,050 Total Debts: $1,629,089 The Debtor does not have any creditors who are not insiders. ADVANCED MICRO: Posts $1.2 Billion Net Loss in 2008 Second Quarter ------------------------------------------------------------------ Advanced Micro Devices Inc. disclosed on July 17, 2008 its financial position and results of operations as of and for its second fiscal quarter ended June 28, 2008. In the second quarter of 2008, the company reported a net loss of $1.2 billion. For continuing operations, the second quarter loss was $269 million and the operating loss was $143 million. Loss from discontinued operations was $920 million, including asset impairment charges of $876 million. The results for continuing operations for the second quarter of 2008 include a net favorable impact of $97 million, which consists of a $193 million gain on sale of 200mm equipment, reduced by $36 million in marketable securities impairment charges, $30 million in amortization of acquired intangibles, integration and other charges, and $30 million in restructuring charges. The company reported second quarter 2008 revenue from continuing operations of $1.3 billion, a seven percent decrease compared to the first quarter of 2008 and a three percent increase compared to the second quarter of 2007. As part of its previously communicated review of its non-core businesses, the company decided to divest its Handheld and DTV product businesses, and therefore is classifying them as discontinued operations for financial reporting. In the first quarter of 2008 the company had revenue from continuing operations of $1.5 billion, a net loss of $358 million, a loss from continuing operations of $308 million and an operating loss of $214 million. In the second quarter of 2007 the company had revenue from continuing operations of $1.3 billion, a net loss of $600 million, a loss from continuing operations of $531 million and an operating loss of $396 million. "While we had a disappointing quarter financially, customer adoption of our recently introduced microprocessor and graphics products and platform offerings is strong, and we see increasing momentum across our businesses," said Robert J. Rivet, the company's chief financial officer. "In the face of challenging macroeconomic conditions, we remain committed to achieving operating profitability in the second half of the year based on the continued ramp of new products, increased market penetration of our differentiated solutions, and continued actions designed to reduce our breakeven point." Second quarter 2008 gross margin was 52 percent. Excluding the positive impact associated with the sale of 200mm manufacturing equipment, second quarter 2008 gross margin was 37 percent, compared to 41 percent in the first quarter of 2008 and 34 percent in the second quarter of 2007. Balance Sheet At June 28, 2008, the company's consolidated balance sheet showed $9.8 billion in total assets, $8.1 billion in total liabilities, $189 million in minority interest in consolidated subsidiaries, and $1.5 billion in total stockholders' equity. About Advanced Micro Headquartered in Sunnyvale, California, Advanced Micro Devices Inc. (NYSE: AMD) -- http://www.amd.com/-- provides innovative processing solutions in the computing, graphics and consumer electronics markets. * * * As reported in the Troubled Company Reporter on Jan. 28, 2008, Fitch downgraded these ratings on Advanced Micro Devices Inc., including its Issuer Default Rating to 'B-' from 'B'; and its Senior unsecured debt to 'CCC'/RR6 from 'CCC+/RR6'. The Rating Outlook is Negative. ADVANSTAR COMMUNICATIONS: Moody's B3 Rating Has Stable Outlook -------------------------------------------------------------- Moody's Investors Service has changed Advanstar Communications, Inc.'s rating outlook to stable from positive, while affirming its B3 Corporate Family and Probability of Default rating. The change in outlook reflects operating performance and debt reduction which have fallen short of expectations and a liquidity profile which could be constrained in the near term. Details of the rating action are: Ratings affirmed: Advanstar Communications, Inc -- $75 million senior secured first lien revolving credit facility due 2013 - B1, LGD2, 28% -- $515 million senior secured first lien term loan due 2014 - B1, LGD2, 28% -- $260 million senior secured second lien term loan due 2014 - Caa2, LGD5, 79% -- Corporate Family Rating -- B3 -- Probability of default rating -- B3 -- The rating outlook is changed to stable from positive. Moody's does not rate $86 million of senior unsecured notes issued by Advanstar's parent--Advanstar, Inc. Advanstar's previous positive rating outlook reflected an expectation that growth in the company's sales and free cash flow (assisted by its 2007 recapitalization) would result in a significant reduction of debt and improvement in leverage. However, for the quarter ended March 31, 2008, the company recorded sales which were lower than the prior year period and total debt (approximately $878 million through the holdco), which exceeded the level of debt incurred at the time of the May 2007 LBO. While the company has succeeded in reducing costs to stabilize EBITDA, the change in rating outlook incorporates Moody's view that the company's near-term free cash flow generation will be insufficient to reduce leverage below 7.0 times debt to EBITDA over the next 12 months. Moody's considers that Advanstar's tightening financial covenants could place pressure on the company's liquidity profile over the next 12 months. At the end of March 2008, Advanstar recorded cash on hand of $7 million and approximately $57 million undrawn under its $75 million first lien revolving credit facility. Advanstar's financial covenants (currently 8.4 times debt to EBITDA) effectively limit revolver availability to around $63 million at present. Moody's estimates that covenant compliant revolver availability could be reduced to de-minimus levels by 1Q09 as the total leverage covenant tightens to 7.25 times. The B3 CFR reflects Advanstar's high leverage, its vulnerability to B-2-B advertising spending, the competition faced by most of its product offerings and the acquisitiveness of its management team. Ratings are supported by the longevity and barriers to entry enjoyed by Advanstar's niche trade shows and publications, the leading market position and reputation of its leading trade show (MAGIC), its predictable revenues, the attractive margins of its portfolio of assets (especially those of its trade shows) and the significant amount of cash common equity contributed by its new owners. Headquartered in New York City, Advanstar Holdings Corp. is a leading provider of integrated marketing solutions for the fashion and licensing, power sports and automotive and life sciences segments. The company recorded sales of approximately $318 million for the LTM period ended March 31, 2008. AIRPLANES PASS-THROUGH: Fitch Holds 'BB' Rating on Cl. A-8 Notes ---------------------------------------------------------------- Fitch Ratings has taken these rating actions for Airplanes Pass- Through Trust as outlined below: -- Class A-8 notes affirmed at 'BB'; -- Class A-9 notes downgraded to 'CCC/DR3' from 'B+'; -- Class B notes remain at 'C/DR6'; -- Class C notes remain at 'C/DR6'; -- Class D notes remain at 'C/DR6'. Cash flow available to service debt in the Airplanes transaction has declined over the past year, driven by a significant increase in monthly expenses, which has further stressed the transaction structure. While the class A notes are receiving current interest payments and partial minimum principal, the reliability of full principal payment on the class A-9 notes has declined. The rating differential between the A-8 and A-9 notes accounts for the fact that the A-8 is currently receiving the full benefit of class A principal payments. In addition, the Airplanes portfolio contains significant concentrations in older generation, less fuel efficient aircraft types such as 737 Classics and MD-80s. These aircraft types are exposed to potential value and lease rate deterioration resulting from increased fuel prices, airline capacity reductions, and bankruptcies in the current environment. Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft given the aviation market volatility and significantly elevated fuel prices. Airplanes originally issued $4.048 billion of notes in March 1996 followed by two refinancing trusts, one in March 1998 and the other in March 2001. Airplanes is a trust formed to conduct limited activities, including the buying, owning, leasing and selling of commercial jet aircraft. As of March 31, 2008 Airplanes' portfolio consisted of 121 aircraft compared to 193 at the time of the 2001 refinancing trust due to continuing asset sales. Primary servicing is being performed by General Electric Capital Aviation Services, GECAS (a wholly owned subsidiary of General Electric Capital Corp.), while the administrative agent role is being performed by AerCap Aviation Solutions (formerly Debis AirFinance) AMERICAN LAFRANCE: Exits Chapter 11 Bankruptcy, Moves Fire Biz -------------------------------------------------------------- Patriarch Partners, the parent company, disclosed that, effective July 24, 2008, American LaFrance LLC emerged from its Chapter 11 bankruptcy. Concurrent with its emergence from bankruptcy, American LaFrance has disclosed a significant restructure of its business and a transformation of organization, processes and a segregation of facilities to better serve its product lines in domestic and worldwide markets. American LaFrance stated that in a major effort to improve profitability, timely delivery and to create room for soon to be disclosed new ventures, the fire business will be moved from Summerville, South Carolina to the American LaFrance facilities in Ephrata, Pennsylvania and Hamburg, New York. Summerville will remain the center for commercial cab and chassis models including chassis manufactured for the fire, refuse and construction markets as street sweepers, refuse haulers, concrete pumpers etc. "American LaFrance management is completing documentation for exciting new business ventures," Lynn Tilton, Patriarch chief executive, said. "These initiatives are instrumental to the decision to rationalize facilities and processes for anticipated ramp of new lines of production. The company also plans to significantly broaden its focus beyond domestic borders into the global market." Headquartered in Summerville, South Carolina, American LaFrance LLC -- http://www.americanlafrance.com/-- is one of the oldest fire apparatus manufacturers and one of the top six suppliers of emergency vehicles in North America. The company filed for Chapter 11 protection on Jan. 28, 2008 (Bankr. D. Del. Case No. 08-10178). Ian T. Peck, Esq., and Abigail W. Ottmers, Esq., at Haynes and Boone LLP, are the Debtor's proposed Lead Counsel. Christopher A. Ward, Esq., at Klehr, Harrison, Harvey, Branzburg & Ellers LLP, are the Debtor's proposed local counsel. Pepper Hamilton, LLP is the proposed counsel of the Official Committee of Unsecured Creditors. In its schedules of assets and debts filed Feb. 4, 2008, the Debtor disclosed $188,990,680 in total assets and $89,065,038 in total debts. AMPEX CORPORATION: Has Until October 26 to File Chapter 11 Plan --------------------------------------------------------------- The Hon. Arthur J. Gonzalez of the United States Bankruptcy Court for the Southern District of New York extended the exclusive periods of Ampex Corporation and its debtor-affiliates to: a) file a Chapter 11 plan until Oct. 26, 2008, and b) solicit acceptances of that plan until Dec. 25, 2008. As reported in the Troubled Company Reporter on July 4, 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. 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 Plan provides for the restructuring of the Debtors' liabilities to maximize recovery to all stakeholders and to improve financial viability of the reorganized Debtors. All of the Debtors' existing common stock will have no value and will be canceled. Upon emergence, at least 80% of the reorganized Debtors' new common stock will be owned by Hillside Capital Incorporated and its affiliates. The new common stock will not be registered and will not be traded on any public exchange. Under the Plan, holders of Class 5 general unsecured creditors will receive their pro rata share of the unsecured claim distribution. Distributions of new common stock will be made after the Plan's effective date. Hillside unsecured deficiency claims, if any, will be deemed an allowed unsecured claim in the amount of at least $41.7 million. Estimated Estimated Type of Claims Treatment Amount Recovery -------------- --------- ----------- -------- Hillside impaired $11,000,000 100% Secured Claims General Unsecured Claims impaired $51,000,000 100% A full-text copy of the Third Amended Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?2d9b A full-text copy of the Amended Joint Chapter 11 Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?2d9c 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. ASARCO LLC: Union Leader Urges DOJ, State AGs to Choose Vedanta --------------------------------------------------------------- John J. Sweeney, president for the American Federation of Labor and Congress of Industrial Organizations, urges the U.S. Justice Department and Attorneys General from various states to support Vedanta Resources plc in purchasing ASARCO LLC, rather than Grupo Mexico S.A. de C.V. In an open statement, Mr. Sweeney related, "There are two competing business plans to bring copper company ASARCO out of bankruptcy, but only one of them serves the interests of the company's many employees and their families. "The decision is now in the hands of the U.S. Justice Department and the Attorneys General from 22 states, the company's largest creditors due to large environmental liabilities. "The new company that controls ASARCO will retain responsibility for significant liabilities. And as creditors, the Attorneys General have a critical stake in assuring that the reorganized ASARCO will make good on its commitments. "We urge those decision makers to support the bid by Vedanta Resources PLC to assure a future for the workers and their families at ASARCO and to reject the competing inferior offer by the other bidder, Grupo Mexico. The 1,500 copper miners of the United Steelworkers employed at ASARCO mines and smelters in Arizona and Texas know first hand what it's like to work for Grupo Mexico, a Mexico City-based conglomerate that owns industrial operations throughout the Western Hemisphere. "When ASARCO was controlled by Grupo Mexico from 1999 to 2005, labor relations were marked by constant strife. The company unilaterally cut health care benefits for hundreds of retirees and halted disability benefits for other employees. Grupo Mexico has stripped ASARCO of its most valuable assets. ASARCO was then starved of essential equipment for its U.S. operations. Despite rising copper prices, Grupo Mexico demanded harsh cuts to wages and benefits in 2004 contract negotiations. The copper miners had no choice but to strike in July 2005. Shortly after the strike began, Grupo Mexico caused ASARCO to file for Chapter 11 bankruptcy protection. Only after the court removed Grupo Mexico from control, did USW members then return to work with a new agreement. "As a matter of public policy, Grupo Mexico's behavior while it was in control of ASARCO should not be rewarded. Just one week after Grupo Mexico put ASARCO in bankruptcy, the Government Accountability Office issued a report saying some companies transfer their most lucrative assets to parent corporations or subsidiaries to limit their exposure in bankruptcy proceedings -- exactly the strategy that Grupo is currently being accused of pursing. "There are vast differences between Vedanta and Grupo Mexico. In light of our careful investigation of both companies' records in the United States and abroad, the AFL-CIO and the unions at ASARCO -- the USW, Boilermakers, IBT, IBEW, IAM, IUOE, Millwrights, and Pipefitters -- all believe the choice is clear. Every factor, including the environmental and worker rights records, show Vedanta is the superior choice. "We urge the Justice Department and state Attorneys General to make their choice Vedanta Resources PLC in order to assure a future for the workers and their families at ASARCO." About ASARCO LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/ -- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. The Company filed for chapter 11 protection on Aug. 9, 2005 (Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq., and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth, P.C., represent the Debtor in its restructuring efforts. Lehman Brothers Inc. provides the ASARCO with financial advisory services And investment banking services. Paul M. Singer, Esq., James C. McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give legal advice to the Official Committee of Unsecured Creditors and David J. Beckman at FTI Consulting, Inc., gives financial advisory services to the Committee. When the Debtor filed for protection from its creditors, it listed $600 million in total assets and $1 billion in total debts. The Debtor has five affiliates that filed for chapter 11 protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos. 05-20521 through 05-20525). They are Lac d'Amiante Du Quebec Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company, Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Details about their asbestos-driven chapter 11 filings have appeared in the Troubled Company Reporter since April 18, 2005. Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle, Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No. 05- 21346) also filed for chapter 11 protection, and ASARCO has asked that the three subsidiary cases be jointly administered with its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was converted to a Chapter 7 liquidation proceeding. The Court appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7 Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee. ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC, and ASARCO Exploration Company Inc., filed for Chapter 11 protection on Dec. 12, 2006 (Bankr. S.D. Tex. Case No. 06-20774 to 06-20776). ASARCO and its debtor-affiliates have until Aug. 1, 2008 to file a plan of reorganization. ATLANTIC WINE: Meyler & Co Expresses Going Concern Doubt -------------------------------------------------------- Meyler & Company, LLC, in Middletown, N.J., raised substantial doubt about the ability of Atlantic Wine Agencies, Inc., to continue as a going concern after it audited the company's financial statements for the year ended March 31, 2008. The auditor disclosed that the company has incurred cumulative losses of $8,511,289 since inception, has negative working capital of $2,013,073, and has existing uncertain conditions the company faces relative to its ability to obtain capital and operate successfully. Management's plans include the raising of capital through the equity markets to fund future operations and the generating of revenue through its business. Failure to raise adequate capital and generate adequate sales revenues could result in the company having to curtail or cease operations. The company is also seeking a viable merger candidate. Additionally, even if the company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. The company reported a net loss of $762,059 on net sales of $149,507 for the year ended March 31, 2008, as compared with a net loss of $1,565,216 on net sales of $196,920 in the prior year. At March 31, 2008, the company's balance sheet showed $2,473,149 in total assets, $2,255,425 in total liabilities, and $217,724 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, showed strained liquidity with $242,352 in total current assets available to pay $2,255,425 in total current liabilities. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2ff3 About Atlantic Wine Based in Somerset West, South Africa, Atlantic Wine Agencies Inc. (OTC BB: AWNA.OB) -- http://www.atlanticwineagencies.com/-- was incorporated in the State of Florida as New England Acquisitions, Inc., on April 8, 2001. On Jan. 13, 2004, the company changed its name to Atlantic Wine Agencies. The company, through its two wholly owned subsidiaries, Mount Rozier Estates (Pty) Limited and Mount Rozier Properties (Pty) Limited, owns a vineyard in the Stellenbosch region of Western Cape, South Africa. The vineyard and surrounding properties consist of 80.9 hectares of arable land for viticultural as well as residential and commercial purposes. ATOM ACQUISITION: Moody's Assigns (P)Ba1 Corporate Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned (P)Baa3 ratings to the proposed senior secured credit facilities of Atom Acquisition, LLC, an acquisition vehicle intended to facilitate the purchase of Applied Biosystems, Inc. (ABI) by Invitrogen Corporation. Concurrently, Moody's assigned a (P)Ba1 Corporate Family and Probability of Default ratings to Atom Acquisition. The outlook for the ratings is stable. The proposed transaction remains subject to stockholder and regulatory approvals and will be financed through a combination of equity and debt. The ratings are provisional and definitive ratings will be assigned once full details of the debt financing, including security and guarantee package, are finalized. Proceeds from the proposed (P)Baa3-rated $1.5 billion secured term loan A and the $900 million secured term loan B, along with about $3.8 billion in equity and cash on hand will be used to purchase 100% of the equity of ABI, refinance a small amount of existing ABI debt and pay expenses associated with the transaction. The (P)Baa3-rated $250 million revolver includes a sub-facility for letters of credit. At closing, the revolver is expected to be undrawn. The ratings are supported by the combined company's significant revenue base, leading market positions in several classes of bioreagents (including cell cultures and related products), bioanalytical systems (including mass spectrometers, genetic sequencers, and liquid chromatography), biochemical assays (including RT-PCR) and related services, combined with Moody's expectation of solid trends in investments by biotechnology and pharmaceutical companies in biologics over the medium term. The company benefits from geographical and product diversification, technological and branding advantages across several product categories, some degree of customer stickiness, the relatively low percentage of research costs that are attributable to consumables (70% of the combined company's revenues) and the resulting steady, solid cash flow generation. Moody's notes that there have been ongoing pressures on research and development/capital budgets of academic institutions and government laboratories, and political developments as well as fiscal priorities could have negative implications on a significant portion of the company's revenues. Nonetheless, we believe that an increased focus in the areas of genotyping, gene expression, stem cell research, proteomics and cellular biochemistry to understand disease and develop solutions (whether preventive or therapeutic) is likely to be positive for biotech firms and their suppliers. The ratings are constrained by a relatively high level of pro forma initial financial leverage in light of significant integration risks, which are exacerbated by the size of the target in relation to the acquirer, and the differences in focus between the two businesses. Moody's believes that the company has put together an experienced integration team spanning both Invitrogen and ABI in recognition of the risks inherent in a large project with the potential to negatively impact customer relationships, current R&D initiatives, and key employee segments, including research personnel and sales and marketing staff. The business model of both companies incorporates significant technological risks and relies on the ability to innovate or otherwise acquire technologies in order to continue to exhibit substantive growth. Moody's assigned these ratings: -- Corporate Family Rating, rated (P)Ba1; -- Probability of Default Rating, rated (P)Ba1; -- $250 million senior secured revolving credit facility due 2013, rated (P)Baa3 (LGD 3, 32%); -- $1.5 billion senior secured term loan A due 2013, rated (P)Baa3 (LGD 3, 32%); -- $900 million senior secured term loan B due 2015, rated (P)Baa3 (LGD 3, 32%). -- The ratings outlook is stable. The corporate and instrument ratings of Atom Acquisition will be transferred to the continuing entity, which will be Invitrogen Corporation, and will be renamed to Applied Biosystems, Inc. Headquartered in Carlsbad, California, Invitrogen Corporation is a provider of life science technologies for disease research, drug discovery, and commercial bioproduction. Its customers include academic and government research institutions and pharmaceutical and biotech companies worldwide. Products and services are used in research in the fields of genomics, proteomics, stem cells, cell therapy and cell biology as well as drug manufacturing. Invitrogen conducts business in more than 70 countries around the world and had revenues of approximately $1.3 billion in 2007. Headquartered in Foster City, California, Applied Biosystems is a provider of instrument-based systems, consumables, software, and services to the life science research markets described above as well as customers in forensic and paternity testing, biosecurity, and quality and safety testing. Systems include mass spectroscopes and other tools to analyze nucleic acids, small molecules, and proteins. Applied Biosystems, Inc. reported sales of approximately $2.1 billion during fiscal 2007. AVIATION CAPITAL: Fitch Puts Two Low-B Ratings Under Neg. Watch --------------------------------------------------------------- Fitch Ratings takes these rating actions on notes issued by the Aviation Capital Group Trusts as outlined below: Aviation Capital Group Trust (ACG I) These classes are place on Rating Watch Negative: -- Class A-1 notes 'BBB+'; -- Class B-1 notes 'BB+'; -- Class C-1 notes 'B+'. This class remains unchanged: -- Class D-1 notes 'C/DR6'. Aviation Capital Group Trust II (ACG II) This class is placed on Rating Watch Negative: -- Class B-1 notes 'A'. Aviation Capital Group Trust III (ACG III) -- Class G-1 notes are affirmed at 'AA-'; -- Class B-1 notes are affirmed at 'A'; -- Class C-1 notes are affirmed at 'BBB'. The Rating Watch Negative designations to ACG I and II reflect Fitch's view of potential cash flow deterioration in the future. While cash flow should remain relatively stable in the near term, Fitch's expectation for future lease revenue generation on certain portfolio assets has worsened in light of recent aviation market turmoil. This is particularly true for older generation, less fuel efficient aircraft types which are expected to be under significant pressure in coming years. Fitch will review available lease data and updated appraisals when made available in order to better project expected trust cash flow before resolving the rating watches. Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft types given recent aviation market volatility. BBW ENTERPRISES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: BBW Enterprises, Inc. 1061 South Cameron Street Harrisburg, PA 17104 Bankruptcy Case No.: 08-02576 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Capitol Bus Company 08-02577 Rohrer Tour & Charter Company, Inc. 08-02578 Dauphcor, Inc. 08-02579 B. B. and W. Associates 08-02580 Type of Business: BBW Enterprises owns and operates several bus terminal management options. See http://www.rohrertravel.com/ Chapter 11 Petition Date: July 22, 2008 Court: Middle District of Pennsylvania (Harrisburg) Judge: Mary D. France Debtors' Counsel: Robert E. Chernicoff, Esq. (rec@cclawpc.com) Cunningham and Chernicoff P.C. 2320 North Second Street Harrisburg, PA 17110 Tel: (717) 238-6570 Fax: (717) 238-4809 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtors do not have any unsecured creditors who are not insiders. BEAR STEARNS COMMERCIAL: Fitch Affirms 'BB+' Rating on Certs. ------------------------------------------------------------- Fitch Ratings upgrades two classes of Bear Stearns Commercial Mortgage Securities Corporation's commercial mortgage pass-through certificates, series 1998-C1, as: -- $8.9 million class E to 'AAA' from 'AA-'; -- $12.5 million class F to 'A' from 'A-'. In addition, Fitch affirmed these classes: -- $21.4 million class A-2 at 'AAA'; -- Interest-only class X at 'AAA'; -- $35.7 million class B at 'AAA'; -- $32.2 million class C at 'AAA'; -- $32.2 million class D at 'AAA'; -- $5.4 million class H at 'BB+'. Fitch does not rate classes G or I. Classes J and K have been reduced to zero due to realized losses. Class A-1 has paid in full. The upgrades reflect increased credit enhancement levels due to the repayment of 58 loans, the liquidation of two loans, and scheduled amortization that have occurred since the last Fitch rating action (43.2%). As of the July 2008 distribution date, the pool has been reduced by 75% to $177.9 million from $714.7 million at issuance. Of the remaining loans, nine (26.4%) have defeased. Currently, four loans (9.9%) are in special servicing. The largest specially serviced loan (5.3%) was transferred in February 2008 due to payment default. The loan is secured by a 295,974 square foot retail center located in Lincoln Park, Michigan, a suburb of Detroit. The center is currently 60% occupied, and the special servicer is pursuing foreclosure. Fitch expects that losses corresponding to this loan will be absorbed by the unrated class I. The remaining three loans (4.6%) were transferred to special servicing at their maturity dates, due to the inability to their respective borrowers to pay off each loan. Fitch does not expect losses at this time. Excluding the specially serviced loans, no additional loans are scheduled to mature in 2008. One loan, representing 1.3% of the pool, has a scheduled maturity in 2009; its interest rate is 7.62%, and it has a servicer-reported year-end 2007 debt service coverage ratio of 1.29 times. No additional maturities are scheduled to occur until 2012. Fitch notes that of the remaining non-defeased loans, nine (59%) are secured by properties located in California. For loans in the California concentration, the weighted average servicer-reported DSCR is 2.36x, and the weighted average Fitch loan-to-value ratio is 47.0%. The current ratings reflect the risk associated with the geographic concentration. BENTON COUNTY PROPERTY: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Benton County Property Owners' Improvement District No. 6 - Sunset Bay Division c/o John T. Lee, Esq. P.O. Box 1348 Siloam Springs, AR 72761 Bankruptcy Case No.: 08-72841 Chapter 11 Petition Date: July 22, 2008 Court: Western District of Arkansas (Fayetteville) Debtor's Counsel: John T. Lee, Esq. (jtlee.atty@cox-internet.com) P.O. Box 1348 Siloam Springs, AR 72761-1348 Tel: (479) 524-2337 Fax: (479) 524-3693 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtor did not file a list of its 20 largest unsecured creditors. CALIFORNIA OIL: Posts $310,615 Net Loss in Quarter Ended May 31 --------------------------------------------------------------- California Oil & Gas Corp. reported a net loss of $310,615 on gas sales, net of royalty of $64,603 for the second quarter ended May 31, 2008, compared with a net loss of $341,094 on gas sales, net of royalty of $10,789 in the same period ended May 31, 2007. At May 31, 2008, the company's balance sheet showed $1,054,097 in total assets, $857,364 in total liabilities, and $196,733 in total shareholders' equity. The company's balance sheet at May 31, 2008, also showed strained liquidity with $181,527 in total current assets available to pay $857,364 in total current liabilities. Full-text copies of the company's financial statements for the quarter ended May 31, 2008, are available for free at: http://researcharchives.com/t/s?2ff8 Going Concern Doubt LBB & Associates Ltd., LLP in Houston, Texas, expressed substantial doubt about California Oil & Gas Corp.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Nov. 30, 2007. The auditing firm pointed to the company's absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2008. Through May 31, 2008, the company has incurred losses of $4,111,173 since inception. About California Oil Headquartered in Calgary, Alberta, California Oil & Gas Corp. (OTC BB: COGC) -- http://www.caloilandgas.com/-- is a publicly traded oil and gas company with assets in the San Joaquin Basin of California and in Louisiana. The company is focussed on exploring high yield oil and gas prospects both domestically and internationally. The company is a gas producer and is targeting the acquisition of late stage exploration or early stage development projects around the globe. CENTERLINE HOLDING: NYSE Routes Share Trade to NYSE Arca Exchange ----------------------------------------------------------------- The parent company of Centerline Capital Group (CCG), Centerline Holding Company, provided this update to investors regarding the trading of its shares. On July 15, 2008, the New York Stock Exchange (NYSE) implemented a non-regulatory trading halt of the company's shares on the NYSE. Trading is now being executed on NYSE's Arca Exchange (previously known as the Archipelago Exchange), the second largest electronic exchange in the United States, because of a NYSE rule that automatically suspends the trading of shares that trade below $1.05 during intraday trading. The company's shares remain listed on the NYSE during such trading halt. Under NYSE rules, trading of the company's shares may not be resumed on the NYSE until the company's shares have traded on NYSE Arca Exchange or another exchange above $1.10 per share at all times during an entire trading day. In the meantime, any orders received by the NYSE for trading of Centerline shares will be routed to NYSE Arca Exchange, thereby providing a means for continued active trading of the company's shares. NYSE rules also state that a company will be considered to be below its compliance standards if the average closing price of a security as reported is less than $1.00 over a consecutive 30-day trading period. Should the company be notified of non-compliance by the NYSE, the company must bring its share price and average share price back above $1.00 over a six-month "cure period" following receipt of such notice. The price condition automatically will be deemed cured if the price per share exceeds $1.00 per share during a six-month cure period and remains above that level for at least the following 30 trading days. In the event that at the expiration of the six-month cure period, both a $1.00 share price and a $1.00 average share price over the preceding 30 trading days are not attained, the New York Stock Exchange will commence suspension and delisting procedures. The Company's shares closed yesterday at $1.16 per share. Through CCG, the company's principal operating subsidiary, the company continues to operate and is conducting business in the normal course. "In the midst of highly volatile capital market conditions, we are pleased to have substantially stabilized our balance sheet through deleveraging as a result of the December 2007 Freddie Mac securitization and continued repayments of our corporate term loan over the past six months," Robert Levy, Centerline's chief financial officer noted. "In addition, Centerline continues to write new loan business through agency executions and raise equity capital in our affordable housing business. We have also increased our assets under management in our commercial real estate business through our recently announced transaction with Nomura Credit & Capital, Inc." About Centerline Capital Group Headquartered in New York, New York, Centerline Capital Group -- http://www.centerline.com-- a subsidiary of Centerline Holding Company (NYSE:CHC), is an alternative asset manager focused on real estate funds and financing. As of March 31, 2008, Centerline had more than $12 billion of assets under management. It sponsors funds of low-income housing tax credits on behalf of institutional and retail investors. It has raised more than $8 billion used to finance and develop affordable housing properties throughout the U.S. It also provides management and advisory services to its parent company and some of its other subsidiaries, as well as to publicly traded real estate investment trust American Mortgage Acceptance Company. Centerline has nine offices throughout the United States. CHARLES MAK: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Charles Mak LLC dba Chisholm Mall P.O. Box 2032 Duncan, OK 73534 Bankruptcy Case No.: 08-13096 Type of Business: The Debtor is engaged in real estate business. Chapter 11 Petition Date: July 23, 2008 Court: Western District of Oklahoma (Oklahoma City) Judge: T. M. Weaver Debtor's Counsel: G. Rudy Hiersche, Jr., Esq. Email: rudylaw@sbcglobal.net 105 N. Hudson Hightower Building, Suite 300 Oklahoma City, OK 73102 Tel: (405) 235-3123 Total Assets: $3,845,982 Total Debts: $2,365,432 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/okwb08-13096.pdf CHESAPEAKE CORP: UK Subsidiary Agrees on Amended Recovery Plan -------------------------------------------------------------- One of Chesapeake Corp.'s U.K. subsidiaries, on July 15, 2008, agreed with the Trustee of the Field Group Pension Plan on an amended recovery plan. As disclosed on April 17, 2008, the previous recovery plan required that the U.K. subsidiary make supplementary annual cash contributions to the Plan of at least GBP6 million over and above those needed to cover benefits and expenses and, if an interim funding level for the Plan of 90% was not achieved by April 5, 2008, an additional supplementary contribution to achieve an interim funding level of 90% to be paid on or before July 15, 2008. An interim valuation of the Plan as of April 5, 2008, determined that the supplementary payment necessary, in addition to the GBP6 million annual payment due on or before July 15, 2008, to achieve an interim funding level of 90% was GBP29.6 million. Under the terms of the Amended Recovery Plan, the Plan Trustee agreed to accept annual supplemental payments of GBP6 million over and above those needed to cover benefits and expenses until the earlier of (a) 2021 or (b) the Plan attaining 100% funding on an on-going basis after 2014, and has waived the requirement for the additional cash payment due on or before July 15, 2008, to achieve an interim funding level of 90%. The company's U.K. subsidiary has agreed, subject to certain terms and conditions, to grant fixed equitable and floating charges on assets of the U.K. subsidiary and its subsidiaries in the United Kingdom and the Republic of Ireland securing an amount not to exceed the Plan funding deficit on a scheme-specific basis. The security being granted to the Plan Trustee would be subordinated to the security given to the lenders under the Senior Revolving Credit Facility in Amendment No. 6, dated as of March 5, 2008, to the Second Amended and Restated Credit Agreement, dated as of Feb. 23, 2004, by and among Chesapeake and various subsidiary borrowers, the banks and other institutional lenders and Wachovia Bank, National Association, as administrative agent for the lenders. The subsidiary's agreement with the Plan Trustee also includes provisions for releases of the Plan Trustee's security interest under certain conditions in the event of the sale, transfer or other disposal of assets over which the Plan Trustee holds a security interest or upon the Plan Trustee's receipt of agreed cash payments to the Plan in addition to those described above. The U.K. subsidiary has made the GBP6 million supplemental payment to the Plan due for 2008. Also on July 15, 2008, the company agreed with its lenders on an amendment of certain provisions of its Credit Facility in Amendment No. 7, dated July 15, 2008, to the Credit Facility. The Seventh Amendment increases the total leverage ratio to 7.00:1 for the second fiscal quarter of 2008 and the senior leverage ratio to 3.40:1 for the second fiscal quarter. The Seventh Amendment also provides for agreement on the Amended Recovery Plan, including providing for an intercreditor agreement among the Credit Facility lenders, Chesapeake and the Trustee, places a limit on the future borrowing of the U.S. borrower under the Credit Facility, and provides for a new Event of Default if The Pensions Regulator in the U.K. issues a Contribution Notice or Financial Support Direction. Based on the company's current projections, it expects that it may not be in compliance with the financial covenants set forth in the Seventh Amendment as of the end of the third fiscal quarter of 2008. Failure to comply would be an event of default under the Credit Facility. If such an event were to occur, the lenders under the Credit Facility could require immediate payment of all amounts outstanding under the Credit Facility and terminate their commitments to lend under the Credit Facility and, pursuant to cross-default provisions in many of the instruments that govern other outstanding indebtedness, immediate payment of the company's other outstanding indebtedness could be required, all of which would likely have a material adverse effect on the company's business, results of operations and financial condition. About Chesapeake Corp. Headquartered in Richmond, Virginia, Chesapeake Corporation (NYSE: CSK) -- http://www.cskcorp.com/-- is a supplier of specialty paperboard packaging products in Europe and an international supplier of plastic packaging products to niche end-use markets. Chesapeake has 47 locations in France, Ireland, United Kingdom, North America, China, HongKong, among others and employs approximately 5,500 people. For the quarter ended March 30, 2008, the company reported $1,225,100,000 in total assets and $948,100,000 in total liabilities. * * * As disclosed in the Troubled Company Reporter on July 2, 2008, Moody's Investors Service placed all the credit ratings of Chesapeake Corp. on review for possible downgrade. This rating action follows Chesapeake's statement on June 27, 2008 that the completion of a proposed new credit facility will not be completed prior to the expiration of the commitment letter on July 1, 2008. Chesapeake further disclosed it is reviewing its balance sheet and exploring other alternatives for reducing leverage and improving its capital structure, in addition to the continued pursuit of asset sales to reduce debt. The existing credit facility matures in February 2009 and had an outstanding balance of $185 million as of March 30, 2008. Moody's review for possible downgrade will primarily focus on the company's near-term liquidity pressures. Despite a recent amendment to the existing credit agreement that relaxed financial covenant levels through the end of 2008, Moody's is concerned that Chesapeake may breach its financial covenants at June 30, 2008. Regardless, Moody's estimate that effective availability under the revolver has been significantly diminished due to covenant constraints. Moody's placed these ratings of Chesapeake Corporation on review for possible downgrade: $18.75 million 6.375% senior unsecured revenue bonds due 2019, B3 / LGD3 (48%); $31.25 million 6.25% senior unsecured revenue bonds due 2019, B3 / LGD3 (48%); GBP67.1 million 10.375% senior subordinated notes due 2011, Caa1 / LGD5 (72%); EUR100 million 7% senior subordinated eurobonds due 2014, Caa1 / LGD5 (72%); Corporate Family Rating, B2; and Probability of Default Rating, B3. CIENA CORPORATION: Moody's Withdraws Ratings on Lack of Rated Debt ------------------------------------------------------------------ Moody's has withdrawn all ratings for Ciena Corporation. The ratings were withdrawn because the issuer has no rated debt outstanding. These ratings were withdrawn: -- Corporate Family Rating -- B2 -- Probability of Default Rating -- B1 Headquartered in Linthicum, Maryland, Ciena Corporation is a leading provider of network solutions to telecommunications service providers. The company had revenues of approximately $891 million for last 12 months as of April 30, 2008. CLEAR CHANNEL: Shareholders Approve Bain Capital-Led Merger ----------------------------------------------------------- Based on a preliminary vote count, Clear Channel Communications, Inc. shareholders approved the adoption of a merger agreement with a group led by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. The number of shares voted in favor of the transaction represented more than 74% of the total shares outstanding and entitled to vote at the meeting. The preliminary tabulation indicates that approximately 97% of the shares voted were cast in favor of the transaction. The parties intend to consummate the merger on Wednesday, July 30, 2008. "We are pleased with the outcome of [Thursday']s vote," said Mark Mays, Chief Executive Officer of Clear Channel. "On behalf of Clear Channel's Board of Directors, I want to thank our shareholders and hard-working employees for their support throughout this process." On May 13, 2008, Clear Channel Communications entered into a third amendment to its previously announced merger agreement with a private equity group co-led by Thomas H. Lee Partners, L.P. and Bain Capital Partners, LLC. Under the terms of the merger agreement, as amended, Clear Channel shareholders will receive $36.00 in cash for each share they own. As an alternative to receiving the $36.00 per share cash consideration, Clear Channel's shareholders were offered the opportunity on a purely voluntary basis to exchange some or all of their shares of Clear Channel common stock on a one-for-one basis for shares of Class A common stock of CC Media Holdings, Inc., the new corporation formed by the private equity group to acquire Clear Channel (subject to aggregate and individual caps). The private equity group reserved the right to require that a portion (up to 1/36th) of the consideration payable to Clear Channel shareholders be paid in the form of additional shares of Class A common stock of CC Media. Clear Channel shareholders have elected, on a voluntary basis, to exchange a total of approximately 23,200,000 shares of Clear Channel common stock for an equivalent number of shares of Class A common stock of CC Media. The private equity group has informed Clear Channel that they do not expect to cause CC Media to issue any shares of additional equity consideration in exchange for shares of Clear Channel that have elected to receive the cash consideration. It is anticipated that the Class A common stock of CC Media will be quoted on the Over-the-Counter Bulletin Board under the ticker symbol CCMOV. At the meeting, all proxy cards and ballots were turned over to the independent inspector of elections, Mellon Investor Services, LLC, for final tabulation and certification. The tender offer for AMFM Operating Inc.'s outstanding 8% Senior Notes due 2008 (CUSIP No. 158916AL0) is scheduled to expire at 8:00 a.m., New York City time, on July 30, 2008, concurrent with the closing of the merger. Accordingly, the price determination date and time with respect to the tender offer will be 2:00 p.m., New York City time, on July 28, 2008, assuming the merger and the offer expiration date occur as contemplated on July 30, 2008. Payment for the Notes will occur on or before July 31, 2008, and the total consideration paid to validly tendering holders will reflect the actual date of payment. The completion of the tender offer is conditioned upon the satisfaction or waiver of all of the conditions precedent to the merger and is subject to extension by AMFM Operating Inc. in its sole discretion. 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. COCHRAN CUSTOM: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Cochran Custom Home Builders, Inc. 11191 U.S. Highway 31, Suite F Spanish Fort, AL 36527 Bankruptcy Case No.: 08-12581 Chapter 11 Petition Date: July 22, 2008 Court: Southern District of Alabama (Mobile) Debtor's Counsel: Michael B. Smith, Esq. Email: smi067@aol.com P.O. Box 40127 Mobile, AL 36640 Tel: (251)441-8077 Total Assets: $1,313,352 Total Debts: $3,243,982 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/alsb08-12581.pdf COMMERCIAL MORTGAGE: Fitch Chips $14.7MM Certs Rating to 'C/DR5' ---------------------------------------------------------------- Fitch Ratings upgraded one class of Commercial Mortgage Acceptance Corp., commercial mortgage pass-through certificates, series 1998-C2, as: -- $36.1 million class H to 'AA-' from 'A+'; In addition, Fitch downgraded one class as: -- $14.7 million class L to 'C/DR5' from 'CC/DR4'; Fitch also affirmed these classes: -- Interest-only class X at 'AAA'; -- $120.8 million class C at 'AAA'; -- $173.5 million class D at 'AAA'; -- $43.4 million class E at 'AAA'; -- $21.7 million class G at 'AAA'; -- $65.1 million class J at 'BB'; -- $21.7 million class K at 'B+'. Fitch does not rate the $122.9 million class F certificates. Class M has been reduced to zero due to realized losses. Classes A-1, A-2, A-3, and B have paid in full. The upgrade reflects increased credit enhancement levels due to the repayment of 111 loans, the liquidation of three loans, and scheduled amortization that have occurred since the last Fitch rating action (15.0%). As of the July 2008 distribution date, the pool's aggregate balance has been reduced 78.6% to $619.7 million from $2.89 billion at issuance. Of the original 512 loans, 142 remain in the pool. Twenty-four loans (30.7%) have defeased, including five of the top 10 loans (20.3%). The downgrade is due to potential losses on three loans recently transferred to special servicing (3.0%). In total, four assets (3.4%) are in special servicing, including one real estate owned (0.4%). The largest specially serviced loan (2.2%) was transferred May 7, 2008, due to imminent default. The loan is collateralized by a 245,010 square foot grocery-anchored retail center located in Lafayette, Indiana. As of Dec. 31, 2007, the center was 76% occupied, and had a servicer-reported debt service coverage ratio of 0.66 times. The special servicer has ordered an appraisal, and is considering workout options. Losses are possible. The second largest specially serviced loan (0.4%) is secured by a 78,000 sf industrial property located in San Jose, Califronia. The property was 100% occupied and had a servicer-reported DSCR of 0.63x as of June 30, 2007. The loan was transferred to special servicing April 1, 2008, due to maturity default. The borrower is reportedly in the process of refinancing the loan. The third largest specially serviced asset (0.4%) is a retail center located in Greenwood, South Carolina that became real estate owned REO in June 2006. The special servicer recently leased a majority of space, and is currently soliciting bids for the build-out. Losses are possible. The smallest specially serviced loan (0.4%) was transferred May 20, 2008. The loan is secured by a 150,965 sf grocery- anchored retail center in Dayton, Ohio. As of May 2008, the property is 47% leased; and the year-end 2007 servicer-reported DSCR was 0.35x. The special servicer has ordered third party reports as well as note sale proposals, which are not yet available. Fitch Loans of Concern total 10.5%, and include the four specially serviced loans. D&C LOGISTICS: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: D&C Logistics, Inc. 1999 West Walnut Street Compton, CA 90220 Bankruptcy Case No.: 08-21118 Related Information: Danny Kim, president and CEO, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 23, 2008 Court: Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: Joon M. Khang, Esq. (joon@khanglaw.com) Khang & Khang LLP 1901 Avenue of the Stars 2nd Floor Los Angeles, CA 90067 Tel: (310) 461-1342 Fax: (310) 461-1343 Estimated Assets: $0 to $50,000 Estimted Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/CAcb08-21118.pdf DAVID FLETTRICH: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: David C. Flettrich 956 Topaz Street New Orleans, LA 70124 Bankruptcy Case No.: 08-11713 Chapter 11 Petition Date: July 22, 2008 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Darryl T. Landwehr, Esq. (dtlandwehr@aol.com) 1010 Common Street, Suite 1710 New Orleans, LA 70112 Tel: (504) 561-8086 Fax: (504) 561-8089 Total Assets: $1,688,170 Total Debts: $1,685,797 A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/LAeb08-11713.pdf DEATH ROW: Global Music Wants Court to Postpone Sale Closing ------------------------------------------------------------ Global Music Group Inc., the winning bidder of Death Row Records Inc.'s music assets, asks the U.S. Bankruptcy Court the Central District of California to defer the closing of the $24 million sale, Bloomberg News reports. Global Music's partners have traded accusations of criminal behavior, including falsifying documents and extortion, the report relates. According to Bloomberg, Ronald Goldberg told Judge Vincent Zurzolo his partners in Global Music Group Delaware stole inside information and altered the company name on bidding documents to fraudulently claim they won the auction. Anthony Marotta asserted that he won the auction and he told Judge Zurzolo that he received death threats from Mr. Goldberg, Bloomberg says. Mr. Marotta said the sale needs to be delayed because threats against him by Mr. Goldberg scared away lenders, the report relates. "Ronald Goldberg has been attempting to extort Global New York, including by making threats against Marotta, Davi and Ronald Bush of Global New York, and against Global New York's lender, and death threats against Anthony Marotta," Bloomberg quoted Kathleen March, a lawyer representing Marotta, as saying. "Due to these threats Global New York's lender contracted by binding contract to lend has backed out of lending, forcing Global New York to go to new lenders." "My client strongly denies making any threats," Mr. Goldberg's attorney, Michael Collesano, told Bloomberg in a phone interview. As reported in the Troubled Company Reporter on June 27, 2008, the sale hearing was held on June 24, 2008, right after the auction. During the auction, Global Music won over the $23 million offer of stalking-horse bidder, Entertainment One Ltd., The Deal said. Parties intend to close the sale as soon as possible, the report added. Included in the assets sold are the Debtor's trademarks, copyrights, inventory and accounts receivable, videos, master recordings, compositions, digital and merchandise rights, artist agreements and certain liabilities, The Deal said. Rapper Tupac Shakur's $100,000 worth of unreleased music material is also part of the deal, The Deal noted. About Death Row Headquartered in Compton, California, Death Row Records Inc. -- http://www.deathrowrecords.net/-- is an independent record producer. The company and its owner, Marion Knight, Jr., filed for chapter 11 protection on April 4, 2006 (Bankr. C.D. Calif. Case No. 06-11205 and 06-11187). Daniel J. McCarthy, Esq., at Hill, Farrer & Burrill, LLP, and Robert S. Altagen, Esq., represent the Debtors in their restructuring efforts. R. Todd Neilson serves as chapter 11 Trustee for the Debtors' estate. When the Debtors filed for protection from their creditors, they listed total assets of $1,500,000 and total debts of $119,794,000. DELTA AIR: Extends Pinnacle Contract Through September 2008 ----------------------------------------------------------- Pinnacle Airlines Corp. disclosed in a regulatory filing with the U.S. Securities and Exchange Commission that it will continue to operate nine aircraft for Delta Air Lines, Inc., through September 2008, pursuant to the parties' agreement reached last July 17. Delta notified Pinnacle of its intent to terminate as of July 31, 2008, the parties' Delta Connection Agreement, because Pinnacle failed to meet the minimum arrival-time flight performance requirements in late 2007. Pinnacle called Delta's decision "wrongful," as Delta assigned "unrealistic" flight schedules for Pinnacle since December 2007. The parties' agreement resolves the issues relating to Delta's intent to terminate the DCA. In connection with their agreement, both parties affirmed and ratified the DCA in its entirety, with certain adjustments to in-service dates. According to the filing, Pinnacle has already taken delivery of nine of the 16 CRJ-900 aircraft to be operated under the DCA, and is operating these aircraft as a Delta Connection carrier in accordance with the terms of the DCA. The parties have agreed to amend the DCA to defer the in-service dates for the remaining seven aircraft to be operated under the DCA. The in-service dates have been revised as: Aircraft No. Original In-Service Date Revised In-Service Date ------------ ------------------------ ----------------------- 10 July 2008 January 2009 11 July 2008 January 2009 12 October 2008 January 2009 13 October 2008 February 2009 14 November 2008 February 2009 15 December 2008 May 2009 16 January 2009 May 2009 As a result of the delayed in-service dates, Pinnacle and the aircraft manufacturer have also agreed to defer delivery of certain of these aircraft to Pinnacle. In some instances, Pinnacle will acquire aircraft from the aircraft manufacturer prior to their scheduled in-service date under the DCA. Pinnacle will use these aircraft as spare aircraft to support its Delta Connection operations until the aircraft enter service under the DCA. Pinnacle will incur interest, depreciation expense, and related aircraft ownership costs of approximately $2,000,000 during the third and fourth quarters of 2008 prior to the related aircraft entering into service under the DCA. All other terms of the DCA remain unchanged. About Delta Air Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE:DAL) -- http://www.delta.com/-- is the world's second-largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 328 destinations in 56 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta flies to Argentina, Australia and the United Kingdom, among others. The company and 18 affiliates filed for chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors in their restructuring efforts. Timothy R. Coleman at The Blackstone Group L.P. provides the Debtors with financial advice. Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump Strauss Hauer & Feld LLP, provide the Official Committee of Unsecured Creditors with legal advice. John McKenna, Jr., at Houlihan Lokey Howard & Zukin Capital and James S. Feltman at Mesirow Financial Consulting, LLC, serve as the Committee's financial advisors. The Debtors filed a chapter 11 plan of reorganization and disclosure statement explaining that plan on Dec. 19, 2007. On Jan. 19, 2007, they filed revisions to the plan and disclosure statement, and submitted further revisions to the plan on Feb. 2, 2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure statement. In April 25, 2007, the Court confirmed the Debtors' plan. That plan became effective on April 30, 2007. The Court entered a final decree closing 17 cases on Sept. 26, 2007. (Delta Air Lines Bankruptcy News, Issue No. 104; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DIANE SPREADBURY: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Diane Cheryl Spreadbury 1749 Atoka Road Marshall, VA 20115 Bankruptcy Case No.: 08-14288 Chapter 11 Petition Date: July 21, 2008 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: John W. Bevis, Esq. Email: johnbevis@bevislawoffices.com John W. Bevis, P.C. 10521 Judicial Drive, Suite 204 Fairfax, VA 22030 Tel: (703) 691-1334 Fax: (703) 385-4353 http://bevislawoffices.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. DLJ COMMERCIAL: Fitch Holds 'B-' Rating on $6.3MM Class B-7 Certs. ------------------------------------------------------------------ Fitch affirmed DLJ Commercial Mortgage Corp.'s commercial mortgage pass-through certificates, series 1998-CF1 as: -- Interest-only classes CP and S at 'AAA'; -- $6.0 million class B-1 at 'AAA'; -- $10.0 million class B-3 at 'AAA'; -- $27.1 million class B-4 at 'AA+'; -- $6.3 million class B-7 at 'B-'. Fitch does not rate the $14.7 million class B-2, $15 million class B-5, $15 million class B-6 or $10.2 million class C certificates. Class A-1A, A-1B, A-2, and A-3 are paid in full. Affirmations are due to the stable performance of the pool. As of the July distribution date, the pool's aggregate certificate balance has been reduced 87.6% to $104.3 million from $838.8 million at issuance. Of the remaining 29 loans, three (8.5%) are fully defeased. The pool has 72.8% exposure to 21 retail properties. The third largest asset is currently in special servicing (8.5%) and is real estate owned. The asset is secured by a retail property located in Decatur, Georgia. The center is anchored by a Kroger grocery store which exercised their five year renewal option until 2013. The Kmart and Hardees space remains vacant. The property is currently 51% occupied and the leasing broker continues to market the vacant space. Losses are expected upon disposition of the asset and should be absorbed by the non-rated class C. DML LAND: Case Summary & 10 Largest Unsecured Creditors ------------------------------------------------------- Debtor: DML Land Development, L.C. P.O. Box 1733 Des Moines, IA 50305 Bankruptcy Case No.: 08-02803 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: July 23, 2008 Court: Southern District of Iowa (Des Moines) Judge: Lee M. Jackwig Debtor's Counsel: Jeffrey D. Goetz, Esq. Email: bankruptcyefile@bradshawlaw.com 801 Grand Ave., Ste. 3700 Des Moines, IA 50309-8004 Tel: (515) 246-5817 Fax: (515) 246-5808 http://www.bradshawlaw.com/ Total Assets: $10,288,001 Total Debts: $9,096,767 Debtor's 10 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Eco-Tech Construction, L.L.C. Partially satisfied $1,400,000 5600 Enterprise Drive mechanic's liens for Grimes, IA 50111 construction services City of Ankeny Sanitary trunk sewer $193,000 Attn: Dennis or Jolee 210 S. Ankeny Blvd. Ankeny, IA 50021-3117 Tel: (515) 963-3550 A.J. Garrett and Associates Seed, mulch, and silt $111,006 Attn: Credit Manager fence 32533 Wendover Rd., Ste. 100 Waukee, IA 50263 Tel: (515) 202-2763 Cooper Crawford & Associates Engineering services $66,980 Quick Supply Co. Partially secured $7,250 mechanic's lien Marks Nursery Nursery stock $6,503 Team Services Concrete testing $6,500 Geotech Engineering & Engineering services $3,560 Observation Allender Butzke Engineers, Engineering services $1,081 Inc. CMT Coring for depth $887 check DOUBLE JJ: Judge Hughes Appoints Receiver in Bankruptcy Case ------------------------------------------------------------ The Hon. Jeffrey Hughes of the U.S. Bankruptcy Court for the Western District of Michigan on Wednesday, July 23, 2008, named a receiver to manage the assets of Carpenter Lake Development, Inc., dba Double JJ Realty, Bob Brenzing of WZZM13.Com relates. The Debtor's bank lenders called an emergency meeting Tuesday, July 22, 2008, to discuss the receiver appointment in the Debtor's bankruptcy case, WZZM13.Com says. Owner Robert Lipsitz, according to the report, wants to retain control over the company. Judge Hughes is concerned that the Debtor failed to follow his order to deposit funds in escrow, according to WZZM13.Com. The judge, the report relates, said that a receiver "will help work out an orderly transition" so the Debtor may continue its operations. The appointed receiver will be disclosed within the week, WZZM13.Com quotes Debtor's counsel, Steve Raymond, Esq., as saying. Mr. Raymond also said that workers will be informed about the status of their salaries this week, the report notes. WZZM13.Com says that much of the Debtor's debt funded a construction of a water park. Mr. Lipsitz informed the court that he had hoped to get more funds by hosting a Rothbury Music Festival over the July 4th weekend, based on the report. However, WZZM13.Com says that revenues from the festival were down despite having 40,000 visitors. Mr. Lipsitz said he intends to host another festival in 2009, WZZM13.Com notes. Oceana County, Michigan-based Carpenter Lake Development, Inc., dba Double JJ Realty, filed its chapter 11 petition on July 18, 2008 (Bankr. W.D. Mich. Case No. 08-06294). Steve Raymond, Esq., represents the Debtor in its restructuring efforts. DRIVETIME: Moody's Reviews Low-B Senior Debt Rating for Likely Cut ------------------------------------------------------------------ Moody's Investors Service placed the B2 senior unsecured rating of DriveTime under review for possible downgrade. The rating action mainly reflects the significant funding pressure being experienced by the company, predominantly as the result of the credit crunch which began last summer. During the review Moody's will evaluate DriveTime's progress in completing a planned capital raise, as well as the upcoming renewal of the company's inventory facility, and the effects of such developments on the company's liquidity and financial flexibility. Moody's will also evaluate the effects on core profitability of the company's shrinking store base, increased funding costs, and rising credit loss experience stemming from the overall weakened U.S. economy and the company's geographic concentrations in particularly hard-hit areas including California, Florida, Arizona, and Nevada. Headquartered in Phoenix, ArizonaDriveTime Automotive Group and DT Acceptance Corp. reported combined assets of $1.58 billion as of March 31, 2008. DYNAMERICA MFG: Gets Initial OK to Use TRW Unit's $2MM Financing ---------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized DynAmerica Manufacturing LLC to obtain, on an interim, basis, up to $2 million in financing from lenders including units of TRW Automotive Holdings Corp., Bill Rochelle of Bloomberg News reports. As reported in the Troubled Company Reporter on July 23, 2008, the financing will be provided by DynAmerica's customers TRW Vehicle Safety Systems Inc., Autoliv ASP Inc. and Quality Safety Systems Co., The Deal said. The lenders has told the Court it consents to DynAmerica accessing up to $2.6 million in financing, on a final basis, Mr. Rochelle says. A hearing is set for Aug. 15, 2008, to consider final approval, he notes. On April 7, DynAmerica missed a payment on its $5.25 million prepetition debt owed to Comerica. The Debtor owes $2.8 million to Comerica, the report noted. According to Bloomberg, secured lender Comerica refused to provide monies for the DynAmerica's Chapter 11 case. About DynAmerica Manufacturing Headquartered in Muncie, Indiana, DynAmerica Manufacturing LLC -- http://www.dynamericamfg.com/-- has been providing safety components, such as seat belt buckles, motor housings and brake parts, to the automotive industry for more than 20 years. Its customers include Delphi Corp. and Visteon Corp. DynAmerica also produces electrical parts. DynAmerica also operates a warehouse in West Milton, Ohio, and a manufacturing facility in Monterrey, Mexico. TMB Industries LLC -- http://www.tmbindustries.com/partners.html-- has been investing in the company since 2005. DynAmerica filed its chapter 11 petition on July 18, 2008 (Bankr. D. Del. Case No. 08-11515). Marc S. Casarino, Esq., and James S. Yoder, Esq., Robert A. Kargen, Esq., and Amy E. Vulpio, Esq., at White and Williams LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed assets and debts between $1 million to $10 million each. ENTERGY GULF: Company Split Cues Fitch to Take Rating Actions ------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating and outstanding debt ratings for Entergy Gulf States - Louisiana, LLC, and has assigned Issuer Default Ratings to Entergy Texas, Inc. as: Entergy Gulf States - Louisiana LLC -- IDR at 'BB+'; -- Senior secured at 'BBB'; -- Senior unsecured at 'BBB-'; -- Preferred stock at 'BB+'. Entergy Texas, Inc. -- IDR 'BB+'. Approximately $2.2 billion of debt is affected. The Rating Outlook is Stable. The rating action reflects the legal separation of Entergy Gulf States, Inc. into two separate jurisdictional entities. Entergy Gulf States - Louisiana, LLC is the successor entity and new name of Entergy Gulf States, Inc. while Entergy Texas, Inc. is the spin-off of the Texas service area. The ratings of both entities are linked by a debt assumption agreement and the integration of operations. This linkage will decrease over the next several years as ETI replaces its pro-rata assumed debt with new debt but remain moderate because of the integrated operations. EGS-LA's ratings reflect an improving regulatory environment, a limited capital spending plan, and adequate credit metrics for its current rating category. Credit concerns include lower expected volume growth, and the liability for all debt of predecessor company Entergy Gulf States, Inc. ETI's ratings reflect a limited capital spending program, adequate credit metrics for its current rating category, and steady volume growth driven by the oil and gas sector. The primary credit concern is the Texas regulatory environment; ETI expects to conclude its current base rate case by October 2008, and a less constructive outcome could pressure the ratings of both ETI and EGS-LA. Fitch will assess the credit impact when an order is issued or a settlement is reached. The Stable Rating Outlook is based on Fitch's expectation that ETI's and EGS-LA's credit metrics will remain consistent with their rating category. For 2008-2009, Fitch projects that ETI's and EGS-LA's FFO-to-interest will range from 4 times to 5x, while debt-to-FFO will range from 4x to 5x. The ratings of both companies are also linked to the credit profile of Entergy Corp. (ETR; IDR rated 'BBB-' with an Evolving Rating Outlook by Fitch) and affiliate utilities through participation in the Entergy system money pool and through a variety of contractual arrangements. This linkage is partially weakened by separate credit facilities for both EGS-LA and ETI. Together, EGS-LA and ETI serve 765,000 utility customers in eastern Texas and western Louisiana. ENVIRONMENTAL TECTONICS: Has $10.4MM Equity Deficit at May 30 ------------------------------------------------------------- Environmental Tectonics Corporation disclosed financial results for its fiscal first quarter ended May 30, 2008. At May 30, 2008, the company's consolidated balance sheet showed $35.2 million in total assets, $36.2 million in total liabilities, $6.0 million in Series B cumulative convertible preferred stock, and $3.3 million in Series C cumulative convertible participating preferred stock, resulting in a $10.4 million stockholders' deficit. The company had a net loss of $1.5 million during the first quarter of fiscal 2009 compared to a net loss of $5.7 million for the first quarter of fiscal 2008. The company attributed the decrease in net loss to a significant increase in sales and corresponding gross profit and reduced claim settlement costs, attributable to claims costs associated with a U.S. Navy settlement. Acting as partial offsets were higher research and development expenses and interest expenses. Sales for the first quarter of fiscal 2009 were $10.0 million as compared to $4.3 million for the first quarter of fiscal 2008, an increase of $5.6 million. Most product areas showed significantly improved performance, most notably environmental and pilot training systems. Acting as partial offsets were decreased simulation and entertainment sales. Geographically, domestic sales in the first quarter of fiscal 2009 were $5.3 million as compared to $2.4 million in the first quarter of fiscal 2008, reflecting significant increases in all Control Systems Group product areas. Domestic sales represented 53.4% of the company's total sales in the first quarter of fiscal 2009, as compared to 56.2% for the first quarter of fiscal 2008. U.S. Government sales in the first quarter of fiscal 2009 were $991,000 as compared to $569,000 in the first quarter of fiscal 2008 and represented 10.2% of total sales in the first quarter of fiscal 2009 versus 13.1% for the first quarter of fiscal 2008. International sales for the first quarter of fiscal 2009 were $3.7 million as compared to $1.3 million in the first quarter of fiscal 2008, and represented 36.4% of total sales, as compared to 30.7% in the first quarter of fiscal 2008. The current reporting period benefited from significant percentage of completion revenue recognition for contracts in the Middle East. Gross profit for the first quarter of fiscal 2009 was $2.5 million as compared to $895,000 in the first quarter of fiscal 2008, an increase of $1.6 million, or 178.8%. Selling and administrative expenses for the first quarter of fiscal 2009 were $3.3 million as compared to $2.8 million in the first quarter of fiscal 2008, an increase of $514,000, or 18.4%. Increased spending for legal costs, a reserve for a potential legal settlement, higher commissions on the higher sales level, bid and proposal costs on increased bid activity and higher consulting expenses related to the company's Authentic Tactical Fighting Systems (ATFS) marketing efforts were partially offset by reduced claims expenses. Claims settlement costs in the prior period consist of a write off of an accounts receivable of $89,000 and a reserve for a payment under a settlement to the U.S. Government of $3.3 million. There were no claim settlement costs in the current quarter. Research and development expenses were $295,000 for the first quarter of fiscal 2009 as compared to $54,000, which is net of monies due under a NASA grant of $232,000, for the first quarter of fiscal 2008. When adjusted for the NASA grant offset, net spending between the two periods was approximately equal. Interest expense for the first quarter of fiscal 2009 was $436,000 as compared to $354,000 for the first quarter of fiscal 2008. The increase reflected higher interest expense on a higher average loan balance partially offset by lower amortization expense related to the beneficial feature of the company's subordinated debt and the value assigned to warrants which were issued with the subordinated debt as part of the company's February 2003 refinancing. Other income/expense, net, provided net income of $61,000 for the first quarter of fiscal 2009 versus a net expense of $30,000 for the first quarter of fiscal 2008. The current period reflected proceeds from a property damage claim. Liquidity and Capital Resources On May 20, 2008, H.F. Lenfest, a member of the company's Board of Directors and a significant shareholder of the company's stock, agreed to fund all requests by the company for funds to support its operations through June 30, 2009, on terms and conditions to be mutually agreed upon by Lenfest and the company, provided that the company shall not request more than $10 million in the aggregate. The company believes that existing cash balances at May 30, 2008, cash generated from operating activities, and potential funding under the agreement with H. F. Lenfest or other arrangements with other lenders or investors will be adequate to meet the company's future obligations through at least May 29, 2009. The company's sales backlog at May 30, 2008, and Feb. 29, 2008, for work to be performed and revenue to be recognized under written agreements after such dates, was $31.8 million and $38.3 million, respectively. In addition, the company's training, maintenance and upgrade contracts backlog at May 30, 2008, and Feb. 29, 2008, for work to be performed and revenue to be recognized after such dates under written agreements was $2.9 million and $1.0 million, respectively. Of the May 30, 2008 sales backlog, the company has contracts totaling approximately $20.3 million for pilot training systems including $17.6 million for two customers in the Middle East. At May 30, 2008, the company had long-term obligations of $19.1 million, as compared with long-term obligations of $18.2 million at Feb. 29, 2008. Full-text copies of the company's consolidated financial statements for the quarter ended May 30, 2008, are available for free at http://researcharchives.com/t/s?2ff9 About Environmental Tectonics Southampton, Pennsylvania-based Environmental Tectonics Corporation (AMEX: ETC) -- http://www.etcusa.com/-- designs, develops, installs and maintains aircrew training systems (aeromedical, tactical combat and general), disaster management training systems and services, entertainment products, sterilizers (steam and gas), environmental testing products, hyperbaric chambers and related products for domestic and international customers. FEARLESS INT'L: Case Summary & 39 Largest Unsecured Creditors ------------------------------------------------------------- Lead Debtor: Fearless International, Inc. (NV) 13499 Biscayne Blvd., T-3 North Miami, FL 31811 Bankruptcy Case No.: 08-20162 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Fearless Yachts LLC (MO) 08-20163 Type of Business: The Debtors manufacture yachts. Chapter 11 Petition Date: July 23, 2008 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtors' Counsel: Joel M. Aresty, Esq. (aresty@mac.com) Joel M. Aresty, P.A. 13499 Biscayne Blvd #T-3 No. Miami, FL 33181 Tel: (305) 899-9876 Fax: (305) 723.7893 Total Assets: $5,597,827 Total Debts: $8,271,000 A. A list of Fearless International's largest unsecured creditors is available for free at: http://bankrupt.com/misc/flasb08-20162.pdf B. A list of Fearless Yachts' largest unsecured creditors is available for free at: http://bankrupt.com/misc/flasb08-20163.pdf FIRST MAGNUS: Violated Real Estate Settlement Rules, HUD Says ------------------------------------------------------------- The U.S. Department of Housing and Urban Development issued an audit on First Magnus Financial Corporation dated July 14, 2008. The HUD found out that First Magnus violated the Real Estate Settlement Procedures Act, or RESPA, when paying incentives to brokers for generating Federal Housing Administration mortgages. The HUD audited the mortgage origination and business practices of First Magnus' corporate office in Tucson, Arizona. The HUD determined that First Magnus violated the RESPA when it paid quality incentives, also known as volume-based incentives, to brokers for originating and processing FHA mortgages. As a result, First Magnus paid brokers $58,571 in quality incentives, also known as volume-based incentives, to originate and process 169 FHA mortgages totaling more than $24 million. The HUD recommended that its assistant secretary for housing require First Magnus, for any current or future FHA mortgage operations for which the company may exercise management control, to ensure that the practice of issuing incentive payments to brokers for originating and processing FHA mortgages is discontinued. In addition, the HUD recommended that First Magnus have their active status and approval to perform FHA business removed. Finally, the HUD recommended that its acting director for the Departmental Enforcement Center pursue administrative actions against the principal owners and management of First Magnus for allowing the improper practice of issuing incentive payments to brokers for originating and processing FHA mortgages. About First Magnus Based in Tucson, Arizona, First Magnus Financial Corporation -- http://www.firstmagnus.com/-- purchases and sells prime and Alt-A mortgage loans secured by one-to-four unit residences. The company filed for chapter 11 protection on Aug. 21, 2007 (Bankr. D. Ariz. Case No. 07-01578). John R. Clemency, Esq., at Greenberg Traurig LLP serves as the counsel for the Debtor. The Official Committee of Unsecured Creditors has selected the firm Warner Stevens LLP as its counsel. When the Debtor filed for bankruptcy, it listed total assets of $942,109,860 and total debts of $812,533,046. As of Dec. 31, 2007, the Debtor had total assets of $178,737,936 and total liabilities of $142,241,111. The Debtor's chapter 11 liquidation plan was approved in February 2008. FIRST PROTECTION: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: First Protection, Inc. 23623 North Scottsdale Road #D-3275 Scottsdale, AZ 85255 Bankruptcy Case No.: 08-08964 Related Information: David Fursman, president, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 18, 2008 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Sr. Debtor's Counsel: Daniel E. Garrison, Esq. Shugart Thomson & Kilroy 3636 North Central Avenue, Suite 1200 Phoenix, AZ 85012 Tel: (602) 650-2085 Fax: (602) 296-0138 (dgarrison@stklaw.com) Estimated Assets: $1 million to $10 million Estimated Debts: $100,000 to $500,000 A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/AZb08-08964.pdf FIRST DARTMOUTH: Wants Ch. 11 Plan Confirmation Hearing Hold Off ---------------------------------------------------------------- First Dartmouth Homes asks the U.S. Bankruptcy Court for the Middle District of Florida to postpone the hearing on Aug. 21, 2008, to consider confirmation of its Chapter 11 plan of reorganization, Dawn McCarty of Bloomberg News reports. The additional time will enable First Dartmouth to resolve personal-injury lawsuit filed by John and Diane Foster, Mrs. McCarty says. The lawsuit is seeking to recover up to $4 million in claim, she notes. The Court gave the Fosters authority to pursue the case in state court in Florida, the report relates. According to Bloomberg, First Dartmouth said "The inclusion of the Fosters' disputed, unliquidated $4 million claim effectively delays distribution to any general unsecured creditor." As reported in the Troubled Company Reporter on June 25, 2008, a hearing was set for Aug. 21, 2008, to consider confirmation of the Debtor's Chapter 11 plan. The hearing was originally set on June 4, 2008. On April 30, 2008, the Court conditionally approved the Debtor's disclosure statement explaining its Chapter 11 plan. The Court found that the disclosure statement contains adequate information within the meaning Section 1125 of the Bankruptcy Code. The Court also extended the Debtor's exclusive period to file a Chapter 11 plan until Aug. 21, 2008. On May 28, 2008, the Debtor received positive votes from its creditors on its Chapter 11 plan. Chapter 11 Plan The plan is premised on the use of cash accumulated during the Debtor's Chapter 11 case, the release of certain on the cash proceeds from certain collateral and a new equity investment. The plan classified claims against and liens in the Debtor in eight classes. All administrative and tax claims will treated as unclassified claims under the plan. Holders of class 1 Regions Bank secured claim will conclude the foreclosure of its lien on the Debtor's two lost in Pinellas County, Florida, in full satisfaction of its allowed secured claim or receive other treatment as may be mutually agreed upon by the Debtor and the bank provided that distribution does not affect any other creditor. In a later filing, the Debtor say that the proceeds of the foreclosure sale will not be sufficient to satisfy the bank's claims therefore, it will have a deficiency claims against the Debtor. But the bank agreed not to receive any distribution. Holders of class 2 Frank S. Maggio Secured claim will release its lien on the cash proceeds of their collateral in the amount of $37,500, pursuant to the plan as part of its new equity contribution to the Debtor. On the distribution date, each holder of Class 3 other secured claims will be entitled to receive, either: a) the payment of its allowed secured claims in cash in full; b) the sale of the property securing any allowed secured claims to the extent of the value of their respective interests in the property; c) the surrender to the holder of any allowed secure claims of the property securing its claim; or d) other distribution as will be necessary to satisfy the requirement of Chapter 11 of the Bankruptcy Code. Holders of class 4 priority claims will get cash in full satisfaction of it allowed priority claims or other treatment as may be agreed upon in writing by the holder on the distribution date. Each holder of class 5 insured claims will be paid solely from the proceeds of the insurance policy(s) and will get no distribution from the Debtor, its estate, or the reorganized Debtor. Holders of class 6 guaranty claims of Regions Bank and Colonial Bank will not receive any distribution but will retain any claims they may have against third parties under the plan. Each holder of class 7 general unsecured claims will receive a pro rata distribution of the general unsecured fund in full satisfaction of its allowed general unsecured claim. Class 8 equity interests will be canceled under the plan. All classes of claims against and equity interest in the Debtor, except class 3 and 4, are impaired under the plan. A full-text copy of the Chapter 11 Plan of Reorganization is available for free at http://ResearchArchives.com/t/s?2e6f About First Dartmouth Headquartered in St. Petersburg, Florida, First Dartmouth Homes is a homebuilder that focuses on developing luxury residential and mixed-use communities and yacht clubs. The company filed for Chapter 11 protection on Dec. 28, 2007 (Bankr. M.D. Fla. Case No. 07-12927). John D. Emmanuel, Esq., at Fowler, White, Boggs, Banker, P.A., in Tampa, Florida, represent the Debtor. The U.S. Trustee for Region 21 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. The Debtor's Chapter 11 petition listed assets of $1.5 million and debt of $55.3 million. FOAMEX INTERNATIONAL: Elects Directors, Updates on Debt Reduction ---------------------------------------------------------------- Foamex International Inc. elected Eugene I. Davis, Robert B. Burke, Seth Charnow, Thomas M. Hudgins, John G. Johnson, Jr., David J. Lyon, and Gregory E. Poling, as directors for a term of one year. The company also discloses that total debt as of June 29, 2008, was approximately $417.6 million, after giving effect to the $100 million put option to certain stockholders. The company has already received assignments of second lien term loans in the amount of $13 million in connection with its second lien term loan offering, which expires July 24, 2008. The second term lien loan offering and rights offering are anticipated to close on July 30, 2008. At the annual meeting of stockholders on July 18, 2008, Jack Johnson, president and chief executive officer of Foamex reviewed the company's growth plans for the future. Highlighted in the discussion was the further expansion of the company's footprint in Asia. Mr. Johnson also discussed the establishment of retail sales for its new sleep accessories product lines, including memory foam pillows and mattress toppers. He noted that the company has expanded its Auburn, Indiana, fabrication and packaging operations to handle this downstream big box market. In addition, he commented on the launch of several sustainable specialty foam products for home furnishings, explaining that the company is leveraging its patented VPF technology and proprietary formulations utilizing renewable plant-based ingredients. Finally, he outlined several current and upcoming key product launches for the electronics, medical, and industrial markets. Mr. Johnson concluded by stating that: "All of these growth initiatives will enhance shareholder value." About Foamex International Inc. Headquartered in Linwood, Pennsylvania, Foamex International Inc. (FMXIQ.PK) -- http://www.foamex.com/-- produces cushioning for bedding, furniture, carpet cushion and automotive markets. The company also manufactures polymers for the industrial, aerospace, defense, electronics and computer industries. The company and eight affiliates filed for chapter 11 protection on Sept. 19, 2005 (Bankr. Del. Case Nos. 05-12685 through 05- 12693). On Feb. 2, 2007, the Court confirmed the Debtors' Second Amended Joint Plan of Reorganization. The Plan of Reorganization of Foamex International Inc. became effective and the company emerged from chapter 11 bankruptcy protection on Feb. 12, 2007. * * * As reported in the Troubled Company Reporter on April 8, 2008, Foamex International Inc.'s consolidated balance sheet at Dec. 30, 2007, showed $430.6 million in total assets and $728.7 million in total liabilities, resulting in a $298.1 million total stockholders' deficit. FORD MOTOR: Net Loss Slides to $8.7BB in Quarter Ended June 30 -------------------------------------------------------------- Ford Motor Co. reported net loss of $8.7 billion including pre-tax special items totaling $8 billion for the second quarter ended June 30, 2008. This compares with a net profit of $750 million in the second quarter of 2007. According to the Wall Street Journal, Ford's loss was its largest quarterly setback ever. In a press statement, Ford said that its second quarter revenue, excluding special items, was $38.6 billion, down from $44.2 billion a year ago. Adjusted to exclude Jaguar Land Rover and Aston Martin from 2007 results, revenue would have been down slightly, with lower volume, adverse product mix and lower net pricing, partly offset by favorable exchange. Special items reduced pre-tax results by $8 billion in the second quarter, reflecting charges associated with asset impairments of $5.3 billion for Ford North America and $2.1 billion for Ford Credit. Because of deteriorating economic conditions, demand has declined substantially, particularly in North America. At the same time, fuel and commodity prices have increased substantially. As a result, there has been a significant shift away from large pickup trucks and traditional SUVs in North America. This prompted a review of the company's North American assets and Ford Credit operating lease portfolio, which led to the pre-tax non- cash impairment charges. Automotive gross cash, which includes cash and cash equivalents, net marketable securities, and loaned securities, was $26.6 billion at June 30, 2008, a decrease of $2.1 billion from the end of the first quarter. The decrease reflects working capital increases, upfront subvention payments to Ford Credit, and Automotive operating losses, offset partly by the proceeds of the Jaguar Land Rover sale. WSJ indicated that most of Ford's loss was related to $5.3 billion non-cash charges which reflected the drop in value of plants and equipment for making trucks. Ford, WSJ added, also took an additional write-down of $2.1 billion to cover unprofitable auto leases made by its credit arm. WSJ said, at July 23 composite trading on the New York Stock Exchange, Ford was down 15% at $5.11. A selloff in the stock, WSJ stated, showed worries about losses in the next quarters and its impact on Ford's cash levels. About Ford Motor Co. 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 Dec. 12, 2006, Standard & Poor's Ratings Services affirmed its 'B' bank loan and '2' recovery ratings on Ford Motor Co. As reported in the Troubled Company Reporter on Dec. 7, 2006, Fitch Ratings downgraded Ford Motor Company's senior unsecured ratings to 'B-/RR5' from 'B/RR4'. As reported in the Troubled Company Reporter on Dec. 6, 2006, Moody's Investors Service assigned a Caa1, LGD4, 62% rating to Ford Motor Company's $3-billion of senior convertible notes due 2036. GAMMA PHARMA: LL Bradford & Co Expresses Going Concern Doubt ------------------------------------------------------------ Las Vegas-based L.L. Bradford & Company, LLC, raised substantial doubt about the ability of Gamma Pharmaceuticals, Inc., to continue as a going concern after auditing the company's financial statements for the year ended March 31, 2008. The auditor said that the company's current liabilities exceed current assets and has incurred significant losses during the development stage. Gamma Pharmaceuticals reported a net loss of $3,795,571 on total revenues of $197,840 for the year ended March 31, 2008, as compared with a net loss of $2,353,884 on zero revenue in the prior year. At March 31, 2008, the company has an accumulated loss of around $6,404,224. The company's current liabilities exceed its current assets by $660,028 as of March 31, 2008. Management Statement Management related that the company's continuation as a going concern is dependent upon its ability to obtain additional financing or sale of its common stock as may be required and ultimately to attain profitability. As of March 31, 2008, the company had $71,209 in cash. Management plans to raise additional equity capital to begin executing its business plan, but there can be no assurance that the company will be able to raise such funds. Even if the company is able to raise additional capital, as it continues to implement its plan to expand into additional markets, the company will experience increased capital needs and it will not have enough capital to fund its future operations without additional capital investments. "If we cannot obtain initial or additional funding, we may be required to limit our marketing efforts; and decrease or eliminate capital expenditures. Such reductions could materially adversely affect our business and our ability to compete," management said. Balance Sheet At March 31, 2008, the company's balance sheet showed $6,907,378 in total assets, $1,524,942 in total liabilities, and $5,382,436 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, showed strained liquidity with $284,564 in total current assets available to pay $944,592 in total current liabilities. A full-text copy of the company's 2008 annual report is available for free at http://ResearchArchives.com/t/s?2ff2 About Gamma Pharmaceuticals Gamma Pharmaceuticals, Inc. (OTC BB: GMPM.OB) -- http://www.gamma- pharma.com/ -- operates as a marketing, brand management, and product formulation company. The company focuses on the formulation, marketing and sale of vitamins and nutriceuticals, over the counter pharmaceutical products, and personal care products in the Peoples Republic of China, Hong Kong, Taiwan, and the United States. Its product formulations are based on its proprietary Gel Delivery Technology' and are marketed and sold as wellness products. The company offers products under the BrilliantChoice, Savvy, Jugular Energy Products, and IceDrops. It also manufactures house brands for retail accounts. The company, formerly known as Sunburst Pharmaceuticals, Inc., was founded in 1993 and is headquartered in Las Vegas. GE COMMERCIAL: S&P Lowers Ratings on Three Classes of Certificates ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on three classes of commercial mortgage pass-through certificates from GE Commercial Mortgage Corp.'s series 2005-C3. Concurrently, S&P affirmed its ratings on the remaining classes from this transaction. The downgrades reflect the credit deterioration of the pool; specifically, five loans in the pool have a debt service coverage below 1.0x. In addition, S&P expect the DSCs of four interest- only loans to fall below 1.0x once the loans enter their amortization periods. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the July 12, 2008, remittance report, the collateral pool consisted of 132 loans with an aggregate trust balance of $2.086 billion, down from $2.116 billion at issuance. The master servicer, Midland Loan Services Inc., reported financial information for 98.5% of the pool. Seventy-eight percent of the servicer-provided information was full-year 2007 data, and 17.3% was interim-2007 data. Excluding defeased loans totaling $72.7 million (3.5%), Standard & Poor's calculated a weighted average DSC of 1.78x for the pool, up from 1.73x at issuance. There are five loans in the pool totaling $25.5 million (1.22%) that have reported DSCs lower than 1.0x. The loans are secured primarily by a variety of multifamily, office, and industrial properties, with an average balance of $5.1 million and an average decline in DSC of 49.8% since issuance. There are also four interest-only loans (1.7%) that will begin amortizing in 15 to 26 months. When their amortization periods begin, S&P expect they will have DSCs of less than 1.0x based on current cash flows. All of the loans in the pool are current. There are no loans in special servicing. The trust has experienced no losses to date. The top 10 loan exposures secured by real estate have an aggregate outstanding balance of $906.0 million (43.4%) and a weighted average DSC of 2.08x for year-end 2007, up from 2.07x at issuance. Two of the top 10 loans appear on the watchlist and are discussed below. Standard & Poor's reviewed property inspections provided by Midland for all of the assets underlying the top 10 exposures, and all were characterized as "good" except for one that was characterized as "excellent." Midland reported a watchlist of 11 loans with an aggregate outstanding balance of $237.4 million (11.3%). The largest loan on the watchlist and the third-largest loan in the pool is the Garden City Plaza loan ($94.5 million, 6.2%). The loan is secured by a 583,017-sq.-ft. suburban office complex consisting of four five-story buildings in Garden City, New York, which is 10 miles east of New York City. The loan appears on the watchlist due to a declining DSC caused by a decrease in occupancy. As of Dec. 31, 2007, the DSC was 1.02x, down from 1.14x at year-end 2006. The most recent property inspection characterized the property as "good." The eighth-largest loan, the 1301 Fannin loan ($70.7 million, 3.3%), is secured by a 795,155-sq.-ft., 25-story, class A office building in the central business district of Houston, Texas, built in 1983. The master servicer placed this loan on the watchlist due to declining DSC resulting from increased operating expenses. As of Dec. 31, 2007, the DSC was 1.27x, down from 1.63x at year- end 2006. The most recent property inspection characterized the property as "good." Five loans had credit characteristics consistent with those of investment-grade obligations at issuance and continue to do so. Three are included in the top 10; details are: -- The largest exposure in the pool, the Oakland City Center loan, has a trust balance of $150.0 million (7.1%). The interest-only loan is secured by a seven-building, 1,551,224-sq.-ft., class A office and retail complex in downtown Oakland, California. The property was built between 1984 and 2002 and is part of a larger 17-acre, 12-block area in downtown Oakland that offers retail, dining, and entertainment. The subject property is located two blocks from Interstate 580 and is a focal point for commercial and government activity in downtown Oakland. It is also directly above the 12th street BART station. DSC was 3.48x for the year ended Dec. 31, 2007, and Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The second-largest exposure in the pool, the Inland Hewitt Office Portfolio loan, has a trust balance of $129.7 million (6.2%). The loan is secured by two office complexes with an aggregate of 1,144,564 sq. ft. The properties are fully leased on a long-term basis to Hewitt Associates LLC (not rated), which has credit characteristics consistent with those of an investment- grade company. One complex, Overlook Point, consists of four interconnected class A buildings constructed between 1998 and 1999 with an aggregate 818,686 sq. ft. The second complex, Half Day Road, consists of three class B buildings constructed in 1970, 1977, and 1986, with an aggregate of 325,878 sq. ft. Both complexes are located in Lincolnshire, Illinois, a suburb approximately 35 miles north of Chicago. DSC was 2.18x for the year ended Dec. 31, 2007, and Standard & Poor's adjusted value for this loan is comparable to its level at issuance. -- The sixth-largest exposure in the pool, the Loews Universal Hotel Portfolio, has a trust balance of $71.7 (3.4%) million and a whole-loan balance of $450.0 million. The whole loan consists of five pari passu senior participations totaling $400.0 million and two securitized pari passu junior participations totaling $50.0 million. The loan is collateralized by three full- service resort properties totaling 2,400 rooms, located near Universal Studios in Orlando, Florida. For the year ended Dec. 31, 2007, DSC was 3.20x, and the portfolio's weighted average daily rate was $222, up from $202 at issuance. Standard & Poor's adjusted net cash flow for this loan is comparable to its level at issuance. The remaining two loans are South View Apartments (0.91%) and Stone Gate Apartments (0.68%). Standard & Poor's adjusted values for these loans have increased 40.3% and 41.9% since issuance, respectively. Standard & Poor's stressed the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered GE Commercial Mortgage Corp. Commercial mortgage pass-through certificates series 2005-C3 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ N B B+ 1.90% O B- B 1.52% P CCC+ B- 1.14% Ratings Affirmed GE Commercial Mortgage Corp. Commercial mortgage pass-through certificates series 2005-C3 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 20.29% A-2 AAA 20.29% A-3FX AAA 20.29% A-3FL AAA 20.29% A-4 AAA 20.29% A-5 AAA 20.29% A-6 AAA 20.29% A-AB AAA 20.29% A-7A AAA 30.25% A-7B AAA 20.29% A-1A AAA 20.29% A-J AAA 12.55% B AA+ 11.92% C AA 10.52% D AA- 9.51% E A 7.86% F A- 6.97% G BBB+ 5.83% H BBB 4.82% J BBB- 3.30% K BB+ 2.92% L BB 2.54% M BB- 2.03% X-P AAA N/A X-C AAA N/A N/A -- Not applicable. GLOBALIGN INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Globalign, Inc. aka Magic Staff Corp. 203 Redwood Shores Parkway, Suite 460 Redwood City, CA 94065 Bankruptcy Case No.: 08-31329 Type of Business: The Debtor provides technology-enable resource recruiting, workforce transformation, and talent alignment solution. The company specializes in the global sourcing and distributed delivery of certified IT services professionals. See http://www.globalign.com/ Chapter 11 Petition Date: July 22, 2008 Court: Northern District of California (San Francisco) Judge: Dennis Montali Debtor's Counsel: Marianne Dickson, Esq. Email: mdickson@ml-sf.com Scott H. McNutt, Esq. Email: SMcNutt@ml-sf.com McNutt Law Group 188 The Embarcadero, Suite 800 San Francisco, CA 94105 Tel: (415) 995-8475 http://ml-sf.com/ Estimated Assets: $500,000 to $1 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/canb08-31329.pdf GMAC LLC: Jim Jones Resigns, Names Thomas Marano as ResCap CEO --------------------------------------------------------------- GMAC Financial Services disclosed that Thomas Marano, non- executive chairman of Residential Capital LLC is named ResCap chairman and chief executive officer, effective immediately. He succeeds ResCap's CEO Jim Jones, who has elected to leave the company. Mr. Marano will remain a Cerberus Capital Management L.P. employee and be dedicated to ResCap to fulfill this role. He will report to GMAC CEO Alvaro de Molina. "[Mr. Marano] brings extensive experience in the mortgage and capital markets to ResCap at this critically important time for the company," Mr. de Molina said. "Under [Mr. Marano's] leadership, ResCap will continue to execute our ongoing plan to streamline the business and focus on core mortgage lending and servicing businesses in the U.S. and select international markets." Mr. Marano was appointed to the ResCap board as non-executive chairman in April 2008, at which time he also joined Cerberus as a managing director. Prior to this, Mr. Marano spent more than 25 years at Bear Stearns & Co., Inc., recently heading the worldwide operations of mortgage trading and originations and serving on the company's board of directors. Additional management changes were disclosed and effective immediately to further strengthen the ResCap leadership team. -- Joshua Weintraub, Cerberus employee and executive committee member of the ResCap board, will assume the role of ResCap vice chairman. -- Tony Renzi, chief operating officer of ResCap's U.S. Residential Funding Group, is named to the newly created position of ResCap chief operating officer. -- Jerry Lombardo, a Cerberus Operations employee, will join the company and lead the management of the Treasury function as treasury executive, succeeding Treasurer Bill Casey who has left the company. -- Thomas W. Neary has joined ResCap from Wells Fargo & Company as executive vice president and senior managing director of Capital Markets. "These management moves will further bolster the leadership team at ResCap and provide a diverse set of talents and skill sets as we work to stabilize the company and weather the near-term market challenges," Mr. de Molina said. "As we make this transition, we thank [Mr. Jones] for his leadership at ResCap in executing a major restructuring of the business and managing efforts to reduce risk and preserve liquidity." In June, ResCap disclosed a comprehensive series of transactions, which included extending unsecured debt maturities, renewing critical funding lines and gaining additional liquidity support from GMAC and its shareholders. About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. GMAC Financial Services is in turn wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. * * * As reported by the Troubled Company Reporter on June 4, 2008, Fitch Ratings has downgraded the long-term Issuer Default Rating of GMAC LLC and related subsidiaries to 'BB-' from 'BB'. Fitch has also downgraded GMAC's unsecured long-term ratings to 'B+' from 'BB-', reflecting the potential for reduced recovery in a default scenario should the company encumber assets. Additionally, Fitch has affirmed the 'B' short-term ratings. The Rating Outlook remains Negative. As reported in the Troubled Company Reporter on April 25, 2008, Moody's Investors Service downgraded GMAC LLC's senior rating to B2 from B1; the rating remains on review for further possible downgrade. This action follows Moody's rating downgrade of ResCap LLC, GMAC's wholly owned residential mortgage unit, to Caa1 from B2. GTC BIOTHERAPEUTICS: Fails to Regain NASDAQ Minimum Price Bid ------------------------------------------------------------- GTC Biotherapeutics, Inc. received on July 16, 2008, a notice of non-compliance from the NASDAQ Staff indicating that the company had not regained compliance with the minimum $1.00 bid price requirement for continued listing on The NASDAQ Global Market, as set forth in NASDAQ Marketplace Rule 4450(a)(5). The company's common stock is subject to delisting unless the company requests a hearing before a NASDAQ Listing Qualifications Panel. The company intends to request a hearing, which will stay any delisting action pending issuance of the Panel's decision subsequent to the hearing. There can be no assurance that the Panel will grant the company's request for continued listing. As previously reported, the company was initially notified on Jan. 17, 2008, that the bid price of its common stock had closed below $1.00 for 30 consecutive business days. In accordance with NASDAQ Marketplace Rule 4450(e)(2), the company was granted 180 calendar days, or until July 15, 2008, to regain compliance with the Minimum Bid Price Rule. As also previously reported, the company was notified by the NASDAQ Staff that the company is not in compliance with the minimum $50 million market value of listed securities requirement set forth in NASDAQ Marketplace Rule 4450(b)(1). In accordance with NASDAQ rules, the company was granted 30 calendar days, or until July 31, 2008, to regain compliance with that requirement. If the company does not regain compliance with the Market Value Requirement by July 31, 2008, the company plans to address this issue at the Panel hearing as well. About GTC Biotherapeutics, Inc. Headquartered in Framingham, Massachusetts, GTC Biotherapeutics, Inc. (NASDAQ: GTCB) -- http://www.gtc-bio.com-- develops, supplies, and commercializes therapeutic proteins produced through transgenic animal technology. The company is also developing a portfolio of recombinant human plasma proteins with known therapeutic properties. The company also has a monoclonal antibody portfolio focused on follow-on biologics, including a CD20 monoclonal antibody. The intellectual property of the company includes a patent in the United States through 2021 for the production of any therapeutic protein in the milk of any transgenic mammal. It's transgenic production platform is particularly well suited to enabling cost effective development of proteins that are difficult to express in traditional recombinant production systems as well as proteins that are required in large volumes. HANCOCK FABRICS: Court Confirms Chapter 11 Plan of Reorganization ----------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware confirmed the Joint Consolidated Plan of Reorganization filed by Hancock Fabrics, Inc., and its debtor affiliates on June 10, 2008. The Court held that the plan complies with the statutory requirements under Section 1129 of the Bankruptcy Code. All objections to the confirmation of the Plan that have not been withdrawn, waived or settled are overruled on their merits. Among those who filed confirmation objections were the U.S. Trustee for Region 3 and more than 40 Texan taxing authorities and a Memphis, Tennessee, taxing authority. Accordingly, the Debtors worked to resolve the Taxing Authorities' confirmation objections. The Debtors and the Taxing Authorities agree on these terms: -- Lien Retention. The liens asserted by the Taxing Authorities for taxes on the Debtors' assets will continue in the order of their priority, with the same validity, force and effect. -- Taxing Authorities' Claims. The Debtors will either allow, subject to Court approval or pursuant to a settlement, or object to the claims filed by the Taxing Authorities no later than 120 days after the Effective Date. -- Interest Rate. The secured claims of the Taxing Authorities on account of unpaid tax will receive interest at the rate prescribed in Section 511 of the Bankruptcy Code and applicable law. -- Postpetition Taxes. The Debtors will pay the postpetition taxes owed to the Taxing Authorities as billed in the ordinary course of business. A full-text copy of the 37-page Hancock Fabrics' Confirmation Order is available at no charge at: http://bankrupt.com/misc/HancockPlanConfirmationOrder.pdf As reported in the Troubled Company Reporter on June 12, 2008, the Plan provides for the payment in full of all allowed claims against the Debtors, regardless of category. "Payment in full" includes the payment of postpetition interest from the Petition Date for holders of secured claims, priority claims, general unsecured claims and certain, but not all, administrative claims until the effective date of the Plan or another time as specified by the Plan. The Plan also provides that holders of stock interests in Hancock Fabrics retain their interest after the Debtors exit from bankruptcy pursuant to the Plan. Therefore, the existing stockholders will continue to own Hancock Fabrics after it emerges from bankruptcy. In addition, the Plan contemplates the consolidation of the Debtors only for the purpose of distributions under the Plan on account of Claims against the Debtors. Classification and Treatment of Claims Under the Plan, all Claims against Hancock, other than Administrative Claims and Priority Tax Claims, are classified into six classes. Hancock believes this complies with the requirements of the Bankruptcy Code. Class Description ----- ----------- 1 Secured Claims 2 Priority Non-Tax Claims 3 General Unsecured Claims 4 Intercompany Claims 5 Stock Interests in Subsidiary Debtors 6 Stock Interests in Hancock Fabrics, Inc. All six Classes are unimpaired. Since no claim or interest is impaired, all of the Debtors' creditors and stockholders are deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Each holder of an Allowed Secured Claim in Class 1 will receive either an Option A or Option B treatment, at the option of the applicable Debtor or Reorganized Debtor either (a) on the Effective Date or (b) if the Secured Claim is not allowed as of the Effective Date, on the next applicable Quarterly Distribution Date. Any Allowed Deficiency Claim of a holder of an Allowed Secured Claim will be entitled to treatment as an Allowed Class 3 Claim. Option A -- Secured Claims in Class 1 that are Allowed Secured Claims and with respect to which the applicable Debtor or Reorganized Debtor elects Option A will be paid the full unpaid amount of the claim plus postpetition interest in cash by the Reorganized Debtor, unless the holder of the Claim agrees to less favorable treatment. Option B -- Secured Claims in Class 1 that are Allowed Secured Claims and with respect to which the applicable Debtor or Reorganized Debtor elects Option B will be reinstated. Each holder of an Allowed Priority Non-Tax Claim in Class 2 will be paid the full unpaid amount of the Claim plus postpetition interest in cash by the appropriate Reorganized Debtor, unless the holder of the Claim agrees to less favorable treatment either (a) on the Effective Date or (b) if the Priority Non-Tax Claim is not allowed as of the Effective Date, on the next applicable Quarterly Distribution Date. Each holder of an Allowed General Unsecured Claim that is not a Litigation Claim in Class 3 will be paid the full unpaid amount of the Claim plus postpetition interest in cash by the appropriate Reorganized Debtor, unless the holder of the Claim agrees to less favorable treatment, either (a) on the Effective Date or (b) if the General Unsecured Claim is not allowed as of the Effective Date, on the next applicable Quarterly Distribution Date. On the Effective Date, any General Unsecured Claim that is a Litigation Claim and is a timely Claim will be Reinstated in accordance with the Plan, provided that any Litigation Claim that has been liquidated by agreement of the applicable Debtor or Reorganized Debtor and the holder of the Litigation Claim will be paid as provided in the agreement. Class 4 Intercompany Claims that are not Administrative Claims will be Reinstated on the Effective Date. Class 5 Stock Interests in Subsidiary Debtors will be Reinstated on the Effective Date, and the holders of Stock Interests in Subsidiary Debtors will retain the Interests. Class 6 Stock Interests in Hancock Fabrics, Inc. will be Reinstated on the Effective Date, and the holders of Stock Interests in Hancock Fabrics will retain the Interests. Certain holders of Class 6 Interests will also have the right to participate in the Rights Offering. Holders of Allowed Claims against one Debtor will receive the same treatment as holders of similarly classified Allowed Claims against any other Debtor. Additionally, holders of Allowed Claims against multiple Debtors on account of guarantees and co-obligations of multiple Debtors will be entitled to only one Distribution from the Debtors' Estates. Because the Plan contemplates payment in full to all holders of Allowed Claims, this "deemed consolidation" is for administrative convenience only and no substantive rights of any holder of a Claim will be prejudiced. Administrative Claims Each holder of an Allowed Administrative Claim will be paid the full unpaid amount of the Claim in cash by the appropriate Reorganized Debtor either (i) on the Effective Date or (ii) if the Administrative Claim is not allowed as of the Effective Date, on the next applicable Quarterly Distribution Date. Requests for payment of Administrative Claims, except for Fee Claims, for the period of June 5, 2007, through the Effective Date, must be filed before the Effective Date. Holders of Administrative Claims that are required to file a request for payment of the Administrative Claims and do not file the Request by the applicable Bar Date will be forever barred from asserting the Administrative Claims against the Debtors and the Reorganized Debtors. Priority Tax Claims Each holder of an Allowed Priority Tax Claim will be paid the full unpaid amount of the Claim plus postpetition interest (i) in cash by the appropriate Reorganized Debtor either (a) on the Effective Date or (b) if the Priority Tax Claim is not allowed as of the Effective Date, on the next applicable Quarterly Distribution Date; or (ii) if agreed by the applicable Debtor or Reorganized Debtor and the holder of the Priority Tax Claim, payment over a period ending not later than five years after the Petition Date with a total cash value equal to the allowed amount of the Priority Tax Claim plus Postpetition Interest as of the Effective Date. Any Claim on account of any penalty arising with respect to an Allowed Priority Tax Claim that does not compensate the holder for actual pecuniary loss will be treated as a Class 3 Claim, and the holder, other than as the holder of a Class 3 Claim, may not assess or attempt to collect the penalty from the Reorganized Debtors or their respective property. Corporate Existence Each Debtor will, as a Reorganized Debtor, continue to exist after the Effective Date as a separate corporate or other business Entity, with all the powers of a corporation or company under applicable law and without prejudice to any right to alter or terminate the existence under applicable state law. Directors and Officer The initial members of the board of directors of each of the Reorganized Debtors will consist of: (a) Jane Aggers, and (b) four directors selected by the Equity Committee in its sole discretion. The initial officers of each of the Reorganized Debtors will consist of the officers of each of the Debtors immediately prior to the Effective Date. Each director and officer will serve from and after the Effective Date until his or her successor is duly elected or appointed and qualified or until the earlier of his or her death, resignation or removal in accordance with the terms of the Certificate of Incorporation and By-Laws of the Reorganized Debtor and state law. On the Effective Date, a certain number of shares of Common Stock will be authorized for issuance to members of the boards of directors and officers of the Reorganized Debtors as part of the directors' and officers' compensation, in a manner and in amounts as are determined by the boards of directors of the Reorganized Debtors. Also on the Effective Date, 3,150,000 shares of authorized but unissued Common Stock will be authorized to be issued under the Hancock Fabrics, Inc. 2001 Stock Incentive Plan, in a manner and in amounts as are determined by the boards of directors of the Reorganized Debtors. The Rights Offering In connection with the Plan, holders of Class 6 Interests, who owned at least 970 shares of common stock of Hancock Fabrics, Inc. on the record date, will be offered the right to participate pro rata in a Rights Offering for the sale of $20,000,000 in face amount of Secured Notes. The Rights Offering will be fully backstopped by Sopris Capital Partners, LP, Berg & Berg Enterprises, LLC and Trellus Partners, LP -- the Backstop Parties -- in accordance with the terms of a backstop agreement. Holders of Class 6 Interests who elect to participate in the Rights Offering will also receive Warrants to purchase 400 shares of Common Stock for each $1,000 worth of Secured Notes purchased. In return for their agreement to Backstop the proceeds of the Rights Offering, the Backstop Parties will receive the Backstop Fee, in the form of additional Warrants to purchase 1,500,000 shares of Common Stock. Holders of Class 6 Interests will indicate their election to participate in the Rights Offering. Distributions Reorganized Hancock Fabrics or Third Party Disbursing Agents as Reorganized Hancock may employ in its sole discretion will make all Distributions of Cash and other instruments or documents required under the Plan. Each Disbursing Agent will serve without bond, and any Disbursing Agent may employ or contract with other Entities to assist in or make the Distributions required by the Plan. Each Third Party Disbursing Agent providing services related to Distributions pursuant to the Plan will receive from Reorganized Hancock Fabrics, without further Court approval, reasonable compensation for its services and reimbursement of reasonable out-of-pocket expenses incurred. These payments will be made on terms agreed to with Reorganized Hancock and will not be deducted from Distributions to be made pursuant to the Plan to holders of Allowed Claims receiving Distributions from a Third Party Disbursing Agent. Treatment of Disputed Claims No payments or Distributions will be made on account of a disputed Claim until that Claim becomes an Allowed Claim. Where only a portion of a Claim is disputed by the Debtor, (i) then the undisputed portion of the Claim will be treated as an Allowed Claim under the Plan, and (ii) the disputed portion of the Claim will be treated as a Disputed Claim. Disputed Claim Reserve If, 180 days after the Effective Date, the Disputed Claims Amount is $200,000 or greater, then the Reorganized Debtors will establish a Disputed Claims Reserve in an amount equal to 100% of the Disputed Claims Amount, provided that the Disputed Claims Reserve Amount will not exceed $750,000. The Disputed Claims Reserve will be terminated on the earlier of: (a) the distribution or disbursement of all Disputed Claims Reserve Funds, and (b) the Disallowance or Allowance of each DCR Disputed Claim covered by the Disputed Claims Reserve. If Disputed Claims Reserve Funds remain in the Disputed Claim Reserve at the time of the occurrence of the DCR Disputed Claim Disallowance or Allowance, upon request of the Reorganized Debtors, the Clerk of the Bankruptcy Court will be authorized and directed to transfer to the Reorganized Debtors without further motion or Order of the Court the remaining Disputed Claims Reserve Funds and any interest as soon as reasonably practicable after the filing by the Reorganized Debtors of a notice of termination of the Disputed Claims Reserve with the Bankruptcy Court. The remaining Disputed Claims Reserve Funds will revest in the Reorganized Debtors. Dissolution of the Committees On the Effective Date, the Committees will be dissolved and their members will be deemed released of any continuing duties, responsibilities and obligations in connection with the Debtors' bankruptcy cases or the Plan and its implementation, and the retention and employment of the Committees' attorneys, accountants and other agents will terminate, except with respect to: (i) any matters concerning the Distributions to be made under the Plan through the date upon which the first Distributions are made after the Effective Date; (ii) all Fee Claims through a final hearing on Fee Claims for Professionals; or (iii) any appeals of the Confirmation Order through the date the appeals are finally decided, settled, withdrawn or otherwise resolved. Counsel to the Committees will be entitled to reasonable compensation and reimbursement of actual, necessary expenses for post-Effective Date activities authorized upon the submission of invoices to be paid by the Reorganized Debtors. Copies of the invoices will be sent to the Reorganized Debtors and the other Committee. The Reorganized Debtors are authorized to pay the invoices without further Court order. Ad Hoc Equity Committee's Fees and Expenses The reasonable fees and expenses of the Professionals for the Ad Hoc Equity Committee will be considered to be Fee Claims that may be paid after compliance with certain procedures. The Fee Claim may not be objected to by any party on the grounds that the Ad Hoc Equity Committee or its Professionals did not make a substantial contribution to the Reorganization Cases. Restructuring Transactions On or after the Plan is confirmed by the Court, the applicable Debtors or Reorganized Debtors, after consultation with the Committees prior to the Effective Date, may enter into Restructuring Transactions and may take actions as they may determine to be necessary or appropriate to effect a corporate restructuring of their businesses or simplify their overall corporate structure, to the extent not inconsistent with any other terms of the Plan. The Restructuring Transactions may include one or more mergers, consolidations, restructurings, dispositions, liquidations or dissolutions, as may be determined by the Debtors or the Reorganized Debtors to be necessary or appropriate without further Court order. Plan Supplements The Debtors will file Plan exhibits with the Court no later than 10 days before the deadline to object to the Plan. 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. 39, Bankruptcy Creditors' Service Inc.; http://bankrupt.com/newsstand/or 215/945-7000). HANFORD MONTECITO: Case Summary & 16 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Hanford Montecito Ranch LLC 6360 la Punta Drive Los Angeles, Ca 90068 Bankruptcy Case No.: 08-21017 Chapter 11 Petition Date: July 22, 2008 Court: Central District Of California (Los Angeles) Judge: Victoria S. Kaufman Debtor's Counsel: William G Barrett, Esq. Chang & Cote, LLP 19138 Walnut Drive, Suite 100 Rowland Heights, CA 91748 Tel: (626) 854-2112 http://www.changcote.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/cacb08-21017.pdf HEALTHSOUTH CORP: To Discuss Second Quarter Results on August 6 --------------------------------------------------------------- HealthSouth Corporation will host an investor conference call at 8:30 a.m. Eastern Time on Wednesday, Aug. 6, 2008, to discuss its results for the second quarter of 2008. The conference call may be accessed by dialing 866-406-5369 and giving the pass code 56207351. International callers should dial 973-582-2847 and give the same pass code. Please call approximately 10 minutes before the start of the call to ensure you are connected. The conference call will also be webcast live and will be available at http://www.healthsouth.com A replay of the conference call will be available, beginning approximately two hours after the completion of the conference call, from Aug. 6 until Aug. 27, 2008. To access the replay, please dial 800-642-1687. International callers should dial 706- 645-9291. The webcast will also be archived for replay purposes for two weeks after the live broadcast on http://www.healthsouth.com About HealthSouth Headquartered in Birmingham, Alabama, HealthSouth Corp. (NYSE: HLS) -- http://www.healthsouth.com/-- provides inpatient rehabilitation services. Operating in 26 states across the country and in Puerto Rico, HealthSouth serves more than 250,000 patients annually through its network of inpatient rehabilitation hospitals, long-term acute care hospitals, outpatient rehabilitation satellites, and home health agencies. * * * As reported in the Troubled company Reporter on May 9, 2008, that HealthSouth Corporation's consolidated balance sheet at March 31, 2008, showed $2.0 billion in total assets, $3.1 billion in total liabilities, $85.7 million in minority interest in equity of consolidated affiliates, and $387.4 million in convertible perpetual preferred stock, resulting in a $1.5 billion stockholders' deficit. HECKLE'S EAGLE: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Heckel's Eagle River Marina, Inc. 47 West Division Street Eagle River, WI 54521 Bankruptcy Case No.: 08-13774 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- RDH Rental Properties, LLC 08-13775 Heckel's Outlet Stores, Inc. 08-13777 Heckel's Madison Marina, Inc. 08-13778 Heckel's DuBay Marina, Inc. 08-13779 Type of Business: The Debtor rents out marine crafts and vehicles, and accessories for touring, fishing, and other water activities. See http://www.heckels.com/ Chapter 11 Petition Date: July 23, 2008 Court: Western District of Wisconsin (Eau Claire) Judge: Thomas S. Utschig Debtors' Counsel: Mark S. Schmitt, Esq. Maynard Schmitt & Associates, LLP W62 N248 Washington Avenue, Suite 205 Cedarburg, WI 53012 Tel: (262) 387-4980 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $10,000,000 to $50,000,000 A. Heckel's Eagle River Marina, Inc., Heckel's DuBay Marina, Inc., and Heckel's Outlet Stores, Inc.'s consolidate list of their 20 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gayla Heckel Stock Repurchase $262,740 670 Spring View Drive Eagle River, WI 54521 GE Commercial Distribution Financing $214,205 Finance Corp. P.O. Box 74666 Chicago, IL 60675-4666 GE Commercial Distribution Financing $68,096 Finance Corp. (2) 75 Remittance Drive, Suite 6995 Chicago, IL 60675-6995 Bassler & Company Services $63,696 Brunswick Acceptance Co. Financing $58,942 Wisconsin Dept. of Revenue Taxes $43,330 SM Advisors LLC Services $34,851 Uphill & Uphill S.C. Accounting $34,598 Land 'N Sea Distributing Boats $31,575 Citizen's Automobile Finance Inc. Auto Finance $24,387 The Lamar Companies Merchandise $21,169 Vilas County Treasurer Taxes $15,951 Northwoods Community Financing $13,952 Credit Union Cardmember Services Credit Card $12,731 Citibusiness Card Credit Card $11,930 Anthem Blue Cross Blue Shield Insurance $10,912 Clrilli Law Offices, S.C. Legal Services $10,614 American National Insurance $5,178 Insurance Company Liquid Force Merchandise $5,115 Arctic Cat Sales Inc. Unknown B. Heckel's Madison Marina, Inc.'s list of its 19 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ GE Commercial Distribution Financing $131,592 Finance Corp. P.O. Box 74666 Chicago, IL 60675-4666 Brunswick Acceptance Co. Financing $13,787 75 Remittance Drive, Suite 1902 Chicago, IL 60675-1902 Land 'N Sea Distributing Boats $9,754 P.O. Box 951905 Dallas, TX 75395-1905 Dave Desrochers Merchandise $9,731 Northern Battery Batteries $6,327 Credit Card Processing Credit Card $4,185 American Honda Motor Co., Inc. Auto Financing $2,923 American National Insurance Co. Insurance $2,876 Sun Prairie Water and Utilities $2,418 Light Commission Bell Industries Merchandise $1,708 Arctic Cat Sales Inc. Merchandise $1,362 Uphill & Uphill, S.C. Accounting $1,160 G&K Services Services $949 Bennington Marine LLC Merchandise $750 WE Energies Utilities $706 Mercury Marine Parts $642 Safeguard Products International Merchandise $620 Interstate Diversified Insurance $590 Profits Inc. Anthony Antonelli Wages $500 C. RDH Rental Properties, LLC's list of its largest unsecured creditor: Entity Nature of Claim Claim Amount ------ --------------- ------------ Associated Bank Loan $300,000 401 Kilbourn Avenue Milwaukee, WI 53202 HOLDINGS GAMING: S&P Rates Proposed $445MM Credit Facilities 'BB-' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Holdings Gaming Borrower L.P. The rating outlook is negative. At the same time, Standard & Poor's assigned its issue-level and recovery ratings to Holdings Gaming Borrower L.P.'s proposed $445 million senior secured first-lien credit facilities, consisting of a $10 million revolving credit facility, a $305 million "first-out" term loan, and a $130 million "first- loss" term loan. The revolving credit facility and the first-out term loan are rated 'BB-' with a recovery rating of '1', indicating that lenders can expect very high (90% to 100%) recovery in the event of a payment default. The first-loss term loan is rated 'CCC+' with a recovery rating of '6', indicating that lenders can expect negligible (0% to 10%) recovery in the event of a payment default. (These ratings are based on preliminary terms and conditions.) Proceeds from the proposed first-lien credit facilities, combined with a $150 million second-lien term loan (unrated) and $170 million of preferred equity will be used to refinance an existing bridge loan, pay transaction costs, establish reserve accounts, and fund the construction of the company's casino in Pittsburgh, Pennsylvania. Total project costs, including the purchase of land, construction, licensing fees, and financing costs, are approximately $760 million. The 'B' corporate credit rating reflects: -- The company's narrow business position as an operator of a single casino; -- The significant fixed-charge burden for the property; -- Construction and start-up risks associated with the planned facility; -- Currently weak economic conditions, which are expected to impact consumer discretionary spending at least into the first half of 2009. These factors are somewhat tempered by: -- A sizable population base from which to draw from in the greater Pittsburgh metropolitan area; -- Relatively limited existing and anticipated gaming competition; -- Solid slot machine revenue metrics generated by the company's closest competitor, The Meadows, located about 25 miles south of the proposed site, which suggests good demand characteristics in the region; -- Six months of construction on the project is already completed, with approximately $44 million of hard costs already spent; -- A liquidity reserve account which allows for a slower-than-a nticipated ramp-up period; and -- An improved financing structure from that which was originally proposed, due to the contribution of $170 million in cash by the owners. HUNTINGTON POINTE: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Huntington Pointe Surgery Center LLC P.O. Box 10490 Westminster, CA 92685 Bankruptcy Case No.: 08-14237 Related Information: John Bohm, president, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 22, 2008 Court: Central District Of California (Santa Ana) Judge: Robert N. Kwan Debtor's Counsel: Andrew S. Bisom, Esq. (abisom@bisomlaw.com) Law Offices of Andrew S. Bisom 695 Town Center Drive Suite 700 Costa Mesa, CA 92626 Tel: (714) 384-6440 Estimated Assets: $1 million to $10 million Estimted Debts: $100,000 to $500,000 A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/CAcb08-14237.pdf IL PALAZZO I: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Il Palazzo I at Arrowhead Ranch, L.L.C. 6685 W. Beardsley Rd., Ste. 255 Glendale, AZ 85308 Bankruptcy Case No.: 08-09187 Chapter 11 Petition Date: July 23, 2008 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Sr. Debtor's Counsel: Steven N. Berger, Esq. Email: snb@engelmanberger.com Engelman Berger, P.C. One Columbus Plaza, Ste. 700 3636 N. Central Ave. Phoenix, AZ 85012-1985 Tel: (602) 271-9090 Fax: (602) 222-4999 http://www.engelmanberger.com/ Estimated Assets: $10,000,000 to $50,000,000 Estimated Debts: $10,000,000 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors. INVITROGEN CORP: S&P Rates Proposed $2.65BB Credit Facility 'BB+' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BBB-' corporate credit rating to Invitrogen Corp. The rating outlook is stable. At the same time, S&P assigned a 'BBB-' rating to Invitrogen's proposed $2.65 billion senior secured credit facility, consisting of a $250 million revolving credit facility due 2013, a $1.5 billion term loan A facility due 2013, and a $900 million term loan B facility also due 2015. In addition, S&P assigned a 'BB+' rating to Invitrogen's $1.15 billion of convertible senior notes, which consists of a $350 million 2% issue due 2023, a $450 million 1.5% issue due 2024, and a $350 million 3.25% issue due 2025. The senior secured credit facility will be guaranteed by all existing Invitrogen and Applied Biosystems Inc. subsidiaries, whereas the convertible notes will not. Invitrogen is using the proceeds from the facility to partially fund its $6.7 billion acquisition of life sciences research instrument maker ABI. "The low investment-grade rating on Carlsbad, California-based Invitrogen reflects the company's satisfactory position in the life sciences research tools business, highlighted by its well- established position, the steady customer demand for its products, as well as the company's expected significant free cash flow generation," said Standard & Poor's credit analyst Arthur Wong. High initial pro forma leverage of 3.6x and management's challenge to effectively integrate such a large acquisition offset these strengths somewhat. Invitrogen is a leading developer and manufacturer of research tools for life sciences research, drug development, diagnostics, and biologicals manufacturing. Products include reagents, antibodies, labeling and detection technologies, and cell and tissue cultures. INTERPUBLIC GROUP: Moody's Rates $335MM Debt Facility Due 2011 Ba3 ------------------------------------------------------------------ Moody's assigned a Ba3 rating to The Interpublic Group of Companies, Inc.'s (IPG) new $335 million senior unsecured revolving credit facility expiring on July 18, 2011. The facility allows IPG to increase the aggregate commitment to a maximum amount of $485 million if lenders agree to the additional commitments. In Moody's opinion the bank credit facility enhances IPG's already solid liquidity position, which as of March 31, 2008 was supported by (1) a large cash balance of $1.5 billion (2) free cash flow of $212 million generated over the LTM period ended 03/31/2008 (3) $750 million mostly unused Enhanced Liquidity Facility (ELF) maturing in June 2009 (4) modest near-term debt maturities and a largely unencumbered balance sheet. The new facility effectively replaces the ELF when it matures in 2009. IPG has an SGL-1 speculative grade liquidity rating. The rating outlook is positive. The new facility is not guaranteed by IPG's subsidiaries and ranks pari passu with other senior unsecured indebtedness of the company. The credit agreement possesses more stringent covenants as compared to the ELF, which had no covenants. It has a minimum interest coverage covenant of 4.5x and a maximum leverage covenant of 3.5x at Sept. 30, 2008, stepping down to 3.25x at March 31, 2009. Additionally, IPG is required to maintain minimum consolidated LTM EBITDA of $600 million commencing with the first fiscal quarter ended Sept. 30, 2008. The company has the ability to add back $75 million of non-cash charges to EBITDA in any period of four fiscal quarters. Further, cash acquisitions, capital expenditures and restricted payments (dividends, share repurchases and distribution of assets or securities to stockholders) together cannot exceed $600 million in any fiscal year. IPG can carry forward $200 million of the unused amount to the succeeding year if leverage is below 2.75x. Moody's notes that covenants under the facility (particularly interest coverage) may be tight over the next twelve months but should ease as the company expands its operating margins. The tightness of the covenant will likely result in the company maintaining its significant cash balance as interest income is netted against interest expense under the calculation. Based on the company's positive momentum in the last twelve months and prospects for improving margins over the coming year, we expect IPG to grow EBITDA and be covenant compliant over the next 12 months. Besides the substandard margins, economic pressure is the only anticipated near term challenge facing the company. Headquartered in New York, The Interpublic Group of Companies, Inc. is among the world's largest advertising, marketing and corporate communications holding companies in the world. Revenues and EBITDA (Moody's adjusted) for the LTM period ended March 31, 2008 were $6.7 billion and $1 billion respectively. ISCO INTERNATIONAL: Appoints J. Christie as Vice President - Sales ------------------------------------------------------------------ ISCO International Inc. disclosed last week the appointment of Jack Christie as ISCO vice president of sales. "[Mr. Christie] will be a tremendous asset to the company," said Gordon Reichard, Jr., ISCO president and chief executive officer. "We are pleased to have Jack as part of the ISCO management team. His broad range of experience in the telecommunications � and specifically the wireless � marketplace make him well-equipped for this pivotal role at ISCO," Mr. Reichard, Jr. added. Previous to ISCO, Christie served as director of business partners channels and was regional and national account sales director at Sprint. The company said that in that role, Mr. Christie led a team that supported more than a hundred strategic business partnerships for Sprint, including relationships with Sony, Dell, CDW and Motorola. Prior to that, Christie held leadership posts at SBC/Pacific Bell Mobile/Cellular One, and Ameritech Mobile. On July 3, 2008, ISCO International Inc. entered into an offer letter and compensatory arrangement with Mr. John G. Christie whereby Mr. Christie will became Vice President of Sales of the Company effective as of July 14, 2008. The company's offer letter and compensatory arrangement with Mr. Christie has no set term, and his employment is at will. Mr. Christie will receive an annual base salary of $150,000. In addition, Mr. Christie is eligible to receive a performance-based annual bonus of $75,000 if certain quarterly revenue recognition milestones are reached, with an additional performance-based bonus of $10,000 if certain product-mix objectives are reached in the third and fourth fiscal quarters of 2008. It has been recommended to the Board of Directors that Mr. Christie receive 250,000 restricted shares of the company's common stock, to fully vest in two years, with six month partial vesting increments. After four months of employment, Mr. Christie will be entitled to three months of severance if he is terminated for any reason other than good cause, contingent upon his execution of a release and non-disparagement agreement. Mr. Christie will be entitled to receive his base salary during such severance period, and any bonus earned as well as vested equity awards as of his termination date. About ISCO International Headquartered in Elk Grove Village, Ill., ISCO International Inc. (AMEX: ISO) -- http://www.iscointl.com/-- is a supplier of radio frequency management and interference-control solutions for the wireless telecommunications industry. At March 31, 2008, the company's consolidated balance sheet showed $29.4 million in total assets, $20.7 million in total liabilities, and $8.6 million in total shareholders' equity. Going Concern Doubt As reported in the Troubled Company Reporter on April 18, 2008, Grant Thornton LLP, in Chicago, expressed substantial doubt about ISCO International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. The auditing firm reported that the company incurred a net loss of approximately $6.4 million during the year ended Dec. 31, 2007, and, as of that date, the company's accumulated deficit was approximately $171.0 million. The auditing firm also said that the company has consistently used, rather than provided, cash in its operations. JHT HOLDINGS: U.S. Trustee Forms Four-Member Creditors Committee ---------------------------------------------------------------- Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed four creditors to serve on an Official Committee of Unsecured Creditors of JHT Holdings Inc. and its debtor-affiliates. The creditors committee members are: 1. Central States, Southeast and Southwest Areas Pension and Health and Welfare Fund. Attn; Brad R. Berliner 9377 W. Higgins Road, 10th Floor Rosemont, IL 60018. Tel: (847) 518-9800, ext. 3443 Fax: (847) 518-9797 2. International Association of Machinists and Aerospace Workers Attn: Christopher Corson 9000 Machinists Place Upper Marlboro, MD 20772 Tel: (301) 967-4510 3. Teamsters National Automobile Transporters Industry Neg. Comm. Attn: Fred Zuckerman 25 Louisiana Avenue, N. W. Washington, D.C. 20001 Tel: (202) 624-8786 Fax: (202) 624-7457 4. J & J Drive-Away, Inc. Attn: John O' Dwyer 16244 Foster Street Stillwell, KS 66085 Tel: (913) 851-2638, ext. 224 Fax: (913) 851-4013 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual Chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtor is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Kenosha, Wisconsin, JHT Holdings Inc. -- http://www.jhtholdings.com/-- provide over-the-road transportation of various types of motor vehicles, including commercial trucks and cars. The company and 16 of its affiliates filed for Chapter 11 protection on June 24, 2008 (Bankr. D. Del. Lead Case No.08-11267). David B. Stratton, Esq., and Evelyn J. Meltzer, Esq., at Pepper Hamilton, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection against their creditors, they listed assets and debts between $100 million to $500 million. JONATHAN SHIFF: Taps Smaha Law Group as Bankruptcy Counsel ---------------------------------------------------------- Jonathan Mitchell Shiff asks permission from the U.S. Bankruptcy Court for the Southern District of California to employ Smaha Law Group APC as his general bankruptcy counsel. The Smaha Law Group is currently making every effort to analyze Mr. Shiff's financial condition and eliminate expenses where necessary. the firm will assist the Debtor in formulating a plan of reorganization and disclosure statement. John L. Smaha, Esq., a principal at the firm, says that the firm's professionals will bill at these hourly rates: John L. Smaha $345 Other Attorneys $150 - $210 Mr. Smaha assures the Court that the firm does not represent any interest materially adverse to Mr. Shiff or his estates. Jonathan Mitchell Shiff filed for Chapter 11 protection on June 12, 2008 (Bankr. S.D. Calif. Case No. 08-05226). John L. Smaha, Esq., at Smaha Law Group APC, represents the Debtor in his restructuring efforts. When Mr. Shiff filed for protection from his creditors, he listed estimated assets of $50 million to $100 million, and estimated debts of $10 million to $50 million. JPMORGAN CHASE: S&P Puts Default Rating on Class K Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class K commercial mortgage pass-through certificate from JPMorgan Chase Commercial Mortgage Securities Corp.'s series 2001-CIBC1 to 'D' from 'CCC'. The downgrade of the class K certificate reflects the accumulated interest shortfall of $254,240 reported as of the July 15, 2008, trustee remittance report. The July remittance report reflected a realized loss of $2.1 million to the trust due to the liquidation of one asset that was with the special servicer, CW Capital Asset Management LLC. The asset, Hunter's Ridge Apartments, had a total exposure of $3.3 million and was secured by a 141-unit multifamily asset in Memphis, Tennessee. The loss was borne by the class L certificate, which S&P downgraded to 'D' on May 3, 2007. Class L has a remaining balance of $155,883, leaving the class K certificate with minimal credit enhancement. S&P expects that class K will continue to be susceptible to future liquidity interruptions. Rating Lowered JPMorgan Chase Commercial Mortgage Securities Corp. Commercial mortgage pass-through certificates series 2001-CIBC1 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ K D CCC 0.20% JP MORGAN CHASE: Fitch Cuts Ratings on Certs.; Removes Neg. Watch ----------------------------------------------------------------- Fitch Ratings removed from Rating Watch Negative and downgrades 7 classes of J.P. Morgan Chase Commercial Mortgage Securities Corp., pass-through certificates, Series 2007-FL1, as: -- $11.9 million class RS-1 to 'BB+ from 'AA-'; -- $12.8 million class RS-2 to 'BB' from 'A+'; -- $15.6 million class RS-3 to 'BB-' from 'A'; -- $11.1 million class RS-4 to 'B+' from 'A-'; -- $15.4 million class RS-5 to 'B' from 'BBB+'; -- $13.2 million class RS-6 to 'B-' from 'BBB'; -- $7.6 million class RS-7 to 'B-' from 'BBB-'; In addition, Fitch affirmed these classes: -- $873.6 million class A-1 at 'AAA'; -- $243.1 million class A-2 at 'AAA' -- Interest-only class X-1 at 'AAA'; -- Interest-only class X-2 at 'AAA'; -- $53.7 million class B at 'AA+'; -- $38.4 million class C at 'AA'; -- $36.4 million class D at 'AA-' -- $44.1 million class E at 'A+', -- $30.7 million class F at 'A'; -- $30.7 million class G at 'A-; -- $42.2 million class H at 'BBB+'; -- $38.4 million class J at 'BBB'; -- $34.5 million class K at 'BBB-'; -- $38.4 million class L at 'BBB-'; The downgrade of the Resorts International rake classes is as a result of Fitch's review of updated financial information, in addition to an analysis of the overall Atlantic City gaming market fundamentals and performance. As of year-end 2007, the Resorts International portfolio's net cash flow declined approximately 32% from Fitch's stressed net cash flow at issuance. The decrease in cash flow is attributed to multiple factors: increased competition, a smoking ban introduced throughout the entire Atlantic City gaming market, and the overall negative performance of the gaming industry due to general macro- economic conditions throughout the U.S. For the first three months ended March 31, 2008, the Atlantic City gaming market recorded a 17.7% decrease in gross operating profit from the same period in 2007. Fitch does not expect the cash flow to reach the same levels as at issuance. Resorts International, the fourth largest loan, consists of a $120.2 million senior trust component and $87.7 million in subordinate rake classes. The loan is secured by one casino/hotel property located in Atlantic City, NJ and two casino/hotel properties located in Tunica, Mississippi. The total debt on the portfolio, including the trust portion, totals $506.3 million. In September 2007, the Resorts East Chicago property was released from the portfolio, paying down the senior trust component by approximately 47%. The loan matures on November 9, 2008 and has three one-year extension options. The affirmations are due to expected performance and continued stabilization of the remaining loans since issuance. As of the July 2008 remittance report, the transaction has paid down by approximately 12.3%. All of the original 22 loans remain in the trust. In addition to the Resorts International loan, the PHOV Portfolio (11.3%) has exercised a partial release, and as a result has paid down by 17.6%. There are no specially serviced loans, and all loans are current. All of the senior pooled notes that remain in the transaction maintain investment grade shadow ratings. The transaction consists of loans collateralized by hotel properties (72.1%), retail (19.6%), office (5.6%) multifamily (1.6%) and industrial/warehouse (1.1%). The largest loan is secured by the Walden Galleria (15.4% of the senior trust components), a mall located in Buffalo, New York. The property completed the addition of the 300,000 sf ThEATery in the fall of 2007, adding national retailers such as Barnes & Noble, Urban Outfitters and the Cheesecake Factory. As of YE 2007, the mall was approximately 97% occupied. The sponsor is Pyramid. The loan matures on May 9, 2009 and has three one-year extension options. The second largest loan is secured by the Marriott Waikiki (12.9%), a full service hotel located along Kalakaua Avenue, across from Waikiki Beach in Honolulu, Hawaii. The property began a $28 million renovation in January 2008 that is expected to be completed in the fall of 2008. The sponsor, Whitehall, has provided a renovation guaranty. As of April 2008, the trailing twelve month occupancy, average daily rate and revenue per available room were 83.6%, $193 and $161, respectively. The loan matures in May 9, 2009, and has three one-year extension options. KENDLE INTERNATIONAL: Moody's Withdraws Low-B and SGL-2 Rating -------------------------------------------------------------- Moody's Investors Service withdrew the ratings of Kendle International Inc., including the B1 Corporate Family Rating and the existing senior secured revolving credit facility. The ratings were withdrawn for business reasons. These ratings have been withdrawn: -- $53.5 million senior secured revolving credit facility due 2011, Ba1 (LGD 1, 4%); -- Corporate Family Rating, B1; -- Probability of Default Rating, B1; and -- Speculative Grade Liquidity Rating, SGL-2. Kendle (Nasdaq: KNDL) is a leading global clinical research organization providing the full range of early- to late-stage clinical development services for the world's biopharmaceutical industry. The company's focus is on innovative solutions that reduce cycle times for its customers and accelerate the delivery of life-enhancing drugs to market for the benefit of patients worldwide. Kendle reported net service revenues of approximately $416 million for the 12 months ended March 31, 2008. LAKE LAS VEGAS: Obtains Court's Nod to Use $1.1MM Cash Collateral ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada in Las Vegas granted Lake Las Vegas use of up to approximately $1.1 million of cash collateral to continue day-to-day operations, including funding of payroll and critical repairs to the Las Vegas Wash bypass conduit. In addition, the Court approved the continuance of customer programs, including unexpired pre-petition gift certificates, gift cards and golf coupons; deposits return policies for golf, catering and related services; pro shop merchandise refunds and exchanges. At the same time, the Court set Aug. 4, 2008, as the date to hear motions regarding the company's request for up to $127 million in debtor-in-possession financing. Lake Las Vegas Resort -- http://www.lakelasvegas.com/-- is a 3,592-acre master-planned residential and resort community adjacent to Lake Mead National Recreational Area and 20 miles east of the center of Las Vegas. It includes a 320-acre man-made lake, three signature golf course, two luxury hotels, a casino and retail shops and more than 1,600 completed residential units. LLV and it subsidiaries employ approximately 260 people, most associated with its golf course operations. The filing occurred in U.S. Bankruptcy Court for the District of Nevada in Las Vegas. Debtor LLV VHI L.L.C. is the managing member, and owns a 46.43% membership interest, in Village Hotel Holdings, LLC which, in turn, is the sole member of Village Hotel Investors, LLC -- the owner of the Lake Las Vegas Ritz Carlton Hotel. Village Hotel Holdings LLC and Village Hotel Investors, LLC are debtors and debtors-in-possession in separate chapter 11 cases pending before the Nevada Bankruptcy Court. LEASE INVESTMENT: Fitch Downgrades Ratings on Five Note Classes --------------------------------------------------------------- Fitch Ratings has taken these rating actions for Lease Investment Flight Trust aircraft securitization as outlined below: -- Class A-1 notes downgraded to 'B' from 'BB'; -- Class A-2 notes downgraded to 'B' from 'BB'; -- Class A-3 notes downgraded to 'BB' from 'BBB-'; -- Class B-1 notes downgraded to 'C/DR6' from 'CC/DR5'; -- Class B-2 notes downgraded to 'C/DR6' from 'CC/DR5'; -- Class C-1 notes remain at 'C/DR6'; -- Class C-2 notes remain at 'C/DR6'; -- Class D-1 notes remain at 'C/DR6'; -- Class D-2 notes remain at 'C/DR6'. Cash flow available to service debt in the LIFT transaction has declined steadily over the past three years. Due to the combination of reductions in available collections and periodic spikes in expenses, cash liquidity for classes B, C, and D have been completely exhausted, resulting in interest shortfalls for each of those classes. Given the reductions in cash flow, it appears unlikely that class B notes will receive future interest payments. Furthermore, the class A cash liquidity was drawn upon for the first time on the January 2008 payment date in order to pay scheduled class A interest. However, class A liquidity was restored on the March 2008 payment date. Class A continues to pay partial minimum principal payments; however, as available cash flow continues to decline, the reliability of full principal payment on the class A notes also declines. Compounding these concerns is the LIFT portfolio's concentrations in older generation, less fuel efficient aircraft types such as the Boeing 737-300 and -400 (Classics) and McDonnell Douglas MD-80 series aircraft. These and other aircraft types are exposed to potential value and lease rate deterioration stemming from fuel price volatility and the resulting airline capacity reductions and bankruptcies. Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft types given recent aviation market volatility. LIFT is a Delaware business trust formed to conduct limited activities, including the issuance of debt, and the buying, owning, leasing and selling of commercial jet aircraft. LIFT originally issued $1.4 billion of rated notes in June 2001. Primary servicing on LIFT's aircraft is being performed by GE Capital Aviation Services, wholly owned by General Electric Corporation while the administrative agent role is being performed by Phoenix American Financial Services, Inc. LONGPORT FUNDING III: Moody's Junks Rating on Class A1-VF Notes --------------------------------------------------------------- Moody's Investors Service downgraded the rating of one class of notes issued by Longport Funding III, Ltd. The notes affected by the rating action are: -- Class Description: $450,000,000 Class A1-VF Senior Secured Floating Rate Notes Due 2051 -- Prior Rating: B1, on review for possible downgrade -- Current Rating: C The transaction experienced, as reported by the Trustee on Feb. 11, 2008, an event of default caused by a failure of the Class A1- VF Overcollateralization Ratio to be greater than or equal to 100 per cent, as described in Section 5.1(i) of the Indenture dated April 4, 2007. This event of default is still continuing. Longport Funding III, Ltd. is a hybrid collateralized debt obligation backed primarily by a portfolio of RMBS securities CDO securities and synthetic securities in the form of credit default swaps. Reference obligations for the credit default swaps are RMBS and CDO securities. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. In this regard the Trustee reports that at the direction of a majority of the Controlling Class the outstanding Class A1-VF Funded Amount and the Secured Notes were accelerated. Furthermore, according to the Trustee, the Controlling Class, the Credit Default Swap Counterparty and the Hedge Counterparty directed the Trustee to commence the sale or liquidation of the Collateral in accordance with relevant provisions of the transaction documents. The rating downgrades taken today reflect the increased expected loss associated with each tranche. Losses are attributed to diminished credit quality on the underlying portfolio. LUBBOCK MEDICAL: Junks Sale Motion; Wants OK on Collins DIP Fund ---------------------------------------------------------------- Lubbock, Texas-Highland Medical Center LP, doing business as Highland Community Hospital and Highland Medical Center, withdrew its request for approval on its proposed bidding procedures involving a $6 million sale after it obtained a postpetititon funding commitment, The Deal's Terry Brennan writes. The Troubled Company Reporter on July 22, 2008, said that the Debtor was seeking debtor-in-possession financing to fund its a reorganization. The Debtor's effort to find DIP funds was intended to sidestep a $6 million sale. Judge Robert Jones of the U.S. Bankruptcy Court for the Northern District of Texas was set to conduct a bid procedures hearing on July 23, 2008. The Debtor had asked the Court for authority to publicly sell the hospital for at least $6 million. Bids were supposedly due on July 30, 2008. Currently, the Debtor intends to ask the Court's authority to access the $500,000 DIP financing of the Collins Group of Dimmitt, The Deal quotes court documents as stating. Collins Group's DIP fund is priced at 8%, and is due in six months, The Deal adds, citing court documents. Under the DIP financing agreement, Collins Group will have priority over the liens of U.S. Government and the State of Texas but not over the liens of the U.S. Department of Health and Human Services and the Texas Department of Health Services, The Deal notes. Judge Jones will hear the Debtor's DIP motion on July 31, 2008, according to the report. About Lubbock Medical Lubbock, Texas-Highland Medical Center LP, doing business as Highland Community Hospital and Highland Medical Center -- http://www.highlandcommunityhospital.com/-- is a 123-bed hospital that provides general medical and surgical care for inpatient, outpatient, and emergency room patients, and participates in the Medicare and Medicaid programs. Highland employs about 100 workers. The Debtor filed for chapter 11 bankruptcy protection on May 31, 2008 (Bankr. N.D. Texas Case No. 08-50202) in order to find a buyer that will continue the hospital's operations. Max R. Tarbox, Esq., at McWhorter, Cobb & Johnson, LLP, represents the Debtor as its bankruptcy counsel. When it filed for bankruptcy, the Debtor disclosed between $10 million to $50 million in estimated assets and between $10 million to $50 million in debts. Judge Robert Jones appointed a patient ombudsman on July 8 to assure adequate patient care at the behest of the U.S. Trustee, William Neary. LUIS PENA: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Luis Pena, Jr. dba New Horizon Demolition Inc. dba New Horizon Demolition 13254 Maclay Avenue Sylmar, CA 91342 Bankruptcy Case No.: 08-15146 Chapter 11 Petition Date: July 22, 2008 Court: Central District Of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Shirlee L. Bliss, Esq. (shirleebliss@yahoo.com) 290 East Verdugo Avenue #108 Burbank, CA 91502 Tel: (818) 842-0997 Estimated Assets: $1 million to $10 million Estimted Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/CAcb08-15146.pdf LUMINENT MORTGAGE: Awards CIO 750,000 in Restricted Common Shares ----------------------------------------------------------------- Effective as of June 30, 2008, Luminent Mortgage Capital Inc. granted a restricted stock award of 750,000 shares of its common stock to Barry Weiss in connection with Mr. Weiss entering into an employment agreement with the company and as an inducement for him to agree to serve as the company's chief investment officer. The company issued these shares in a privately negotiated transaction that was exempt from registration under Section 4(2) of the Securities Act of 1933. The terms of Mr. Weiss' employment agreement with the company, which was executed on July 10, 2008, are: -- Base Salary. Mr. Weiss' employment agreement provides for a base salary at the annual rate of $240,000. -- Annual Bonus. Mr. Weiss' employment agreement provides that he shall be eligible to receive an annual bonus, in accordance with Luminent's applicable policies relating to incentive compensation for its executive officers, in an amount as may be determined in the sole discretion of the company's board based upon its senior management bonus plan. -- Restricted Stock Awards. Mr. Weiss' employment agreement provides that he shall receive annual restricted stock awards of a number of shares of the company's common stock as may be fixed in the discretion of the board of directors. Each annual award vests over three years at the rate of one-third each year on the anniversary date of each award. The company granted Mr. Weiss a restricted stock award of 750,000 shares of its common stock that will vest in equal annual installments of one-third each on June 30, 2009, 2010 and 2011, respectively. -- Change of Control. The company's employment agreement with Mr. Weiss provides that, upon a change of control, any then unvested restricted stock awards held by Mr. Weiss automatically become fully vested. -- Employment Term; Severance. The employment agreement with Mr. Weiss provides for a term that expires on June 30, 2009. If the company terminates Mr. Weiss' employment other than for cause, it will: pay him an amount equal to his annual base salary and any incentive bonus accrued through the effective date of termination and any amount in respect of excise taxes required to be paid under the agreement; pay him an amount equal to the aggregate premiums that would be payable by him to maintain in effect for the severance period, the same medical, health, disability and life insurance coverage that the company provided to him immediately prior to the date of termination; as a severance payment, pay him an amount equal to his annual base salary as of the effective date of termination that would have been paid to him during the severance period had he remained employed during the severance period. For purposes of the agreement, the severance period means the period from the effective date of the termination through the last day of the term of his employment under the agreement. A full text copy of the Employment Agreement dated as of June 30, 2008, executed on July 10, 2008, between Luminent Mortgage Capital Inc. and Barry Weiss, is available for free at: http://researcharchives.com/t/s?2ff1 About Luminent Mortgage Headquartered in San Francisco, Luminent Mortgage Capital Inc. (OTC: LUMC) -- http://www.luminentcapital.com/-- is a real estate investment trust or REIT, which, together with its subsidiaries, has invested in two core mortgage investment strategies. Under its Residential Mortgage Credit strategy, the company invests in mortgage loans purchased from selected high-quality providers within certain established criteria as well as subordinated mortgage-backed securities and other asset-backed securities that have credit ratings below AAA. Under its Spread strategy, the company invests primarily in U.S. agency and other highly-rated single-family, adjustable-rate and hybrid adjustable-rate mortgage-backed securities. On March 28, 2008, the company disclosed its intention, subject to shareholder approval, to restructure the company from a REIT to a publicly-traded partnership or PTP. Going Concern Doubt Grant Thornton LLP, in Philadelphia, expressed substantial doubt about Luminent Mortgage Capital Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. Grant Thornton said Luminent Mortgage has lost $721.0 million for the year ended Dec. 31, 2007, which included $481.7 million in impairment losses on mortgage-backed securities. The company also recorded $21.3 million in corporate, state and U.S. federal income taxes due to its inability to meet the threshold for tax benefit recognition as it related to its qualification as a REIT. As reported in the Troubled Company Reporter on June 5, 2008, Luminent Mortgage's consolidated balance sheet at March 31, 2008, showed $3.8 billion in total assets, $4.0 billion in total liabilities, and $148,000 in minority interest, resulting in a $223.2 million stockholders' deficit. MAXXAM INC: Inks Agreement with PBGC on PALCO Pension Plan ---------------------------------------------------------- On July 10, 2008, Maxxam Inc. and The Pension Benefit Guaranty Corporation entered into an agreement pursuant to which the company essentially agreed, among other things, that should the PBGC elect to terminate The Pacific Lumber Company (Palco) Pension Plan in the future, the company would continue to be liable for any unfunded obligations then outstanding with respect to the Plan. If such a termination was to be initiated, the company expects it would first take actions to assume sponsorship of the Palco Pension Plan in order to avoid such termination. Palco is an an indirect wholly owned subsidiary of the company. On Jan. 18, 2007, Palco and its subsidiaries, including Scotia Pacific Company LLC (Scopac), filed separate voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The PBGC Agreement terminates on the earliest of (i) the fifth anniversary of the effective date of the agreement, (ii) the date the Palco Pension Plan is assumed by the company, (iii) the date the Palco Pension Plan is terminated under certain standard termination procedures set forth in the Employee Retirement Income Security Act of 1974 (ERISA), or (iv) the date the Palco Pension Plan is properly merged into another plan in accordance with ERISA and the Internal Revenue Code. The company has previously disclosed that, under ERISA, if Palco's pension plan were to be terminated under certain circumstances, the company would be jointly and severally liable for any unfunded obligations with respect to the Palco Pension Plan. The plan of reorganization proposed by Mendocino Redwood Company and Palco's principal creditor, Marathon Structured Finance Fund L.P., in Palco, Scopac and Palco's other subsidiaries' bankruptcy cases, includes a provision pursuant to which the Palco Pension Plan would be assumed by the entity that would succeed the Debtors under the MRC/Marathon Plan. The MRC/Marathon Plan, the first of two plans of reorganization filed on the Jan. 30, 2008 deadline, would reorganize and continue the businesses of the Debtors. The second, which was a plan proposed on behalf of the holders of Scopac's $713.8 million principal amount (as of Dec. 31, 2006) of Timber Collateralized Notes, provides for an auction of Scopac's timberlands to the highest bidder. A full-text copy of the Agreement dated July 10, 2008, between The Pension Benefit Guaranty Corporation and the company, is available for free at http://researcharchives.com/t/s?2ff6 About MAXXAM Inc. Headquartered in Houston, MAXXAM Inc. (AMEX: MXM) is a publicly- traded company, with business interests in three industries: forest products, real estate investment and development and racing operations. As reported in the Troubled Company Reporter on May 19, 2008, MAXXAM Inc.'s consolidated balance sheet at March 31, 2008, showed $483.5 million in total assets and $779.6 million in total liabilities, resulting in a $296.1 million total stockholders' deficit. Going Concern Doubt As reported in the Troubled Company Reporter on May 9, 2008, Deloitte & Touche LLP, in Houston, expressed substantial doubt about MAXXAM Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the uncertainty surrounding the ultimate outcome of the separate voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code filed by certain of the company's wholly owned subsidiaries, and its effect on the company, as well as the company's operating losses at its remaining subsidiaries. MEDICAL GASES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Medical Gases, Inc. 30 Hopper Street Westbury, NY 11590 Bankruptcy Case No.: 08-73912 Type of Business: The Debtor's affiliate, New York Home Care Equipment LLC, filed for Chapter 11 protection on July 21, 2008 (Bankr. E.D. N.Y. Case No. 08-73867). Chapter 11 Petition Date: July 23, 2008 Court: Eastern District of New York (Central Islip) Judge: Robert E. Grossman Debtor's Counsel: Anthony F. Giuliano, Esq. (afg@pryormandelup.com) Pryor & Mandelup 675 Old Country Road Westbury, NY 11590 Tel: (516) 997-0999 Fax: (516) 333-7333 Estimated Assets: Less than $50,000 Estimated Debts: $10,000,000 to $50,000,000 A copy of Medical Gases, Inc.'s petition is available for free at: http://bankrupt.com/misc/nyeb08-73912.pdf MICHAEL GRAY: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Michael A. Gray 106 Steep Point Beaufort, NC 28516 Bankruptcy Case No.: 08-04915 Chapter 11 Petition Date: July 23, 2008 Court: Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: David J. Haidt, Esq. Email: davidhaidt@embarqmail.com Ayers, Haidt & Trabucco, P.A. P.O. Box 1544 New Bern, NC 28563 Tel: (252) 638-2955 Fax: (252) 638-3293 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/nceb08-04915.pdf MORTGAGES LTD: Wants to Hire Barry Monheit as Financial Advisor --------------------------------------------------------------- Mortgages Ltd. asks authority from the U.S. Bankruptcy Court for the District of Arizona to employ Barry Monheit as its business and financial advisor. Barry Monheit will, among others, advise the Debtor with respect to investor relation issues, assist in the evaluation of the Debtor's loan portfolio, and assist with the preparation of a reorganization strategy and in the preparation of a plan and disclosure statement. Mr. Monheit tells the Court that he will charge the Debtors an hourly rate of $525. Mr. Monheit further assures the Court that he is disinterested as that term is defined in Section 101(14) of the U.S. Bankruptcy Code. Phoenix, Arizona-based Mortgages Ltd. -- http://www.mtgltd.com/-- originates, invests in, sells and services its own short-term real-estate secured loans on properties within the state of Arizona in the US. It underwrites loans for commercial, industrial and residential properties for acquisition, entitlement, development, construction and investment. Mortgages Ltd. was the subject of an involuntary chapter 7 petition dated June 20, 2008, filed by KGM Builders Inc. -- a contractor for Grace Communities, a borrower of the company -- before the U.S. Bankruptcy Court for the District of Arizona. Central & Monroe LLC and Osborn III Partners LLC, divisions of Grace Communities, sought the appointment of an interim trustee for Mortgages Ltd. in the chapter 7 proceeding. Mortgages Ltd. is also facing lawsuits filed by Grace Communities and Rightpath Limited Development Group for its alleged failure to fully fund loans. Mortgages Ltd. denied the charges. It has filed a motion to dismiss the Rightpath suit. The Debtor's case was converted to a Chapter 11 proceeding on June 24, 2008 (Bankr. Ariz. Case No. 08-07465). Judge Sarah Sharer Curley presides over the case. As of Dec. 31, 2007, the Debtor had total assets of $358,416,681 and total debts of $350,169,423. MRS HOMES: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: MRS Homes Corp. 644 Flatbush Ave. Brooklyn, NY 11225 Bankruptcy Case No.: 08-44662 Chapter 11 Petition Date: July 23, 2008 Court: Eastern District of New York (Brooklyn) Judge: Dennis E. Milton Debtors' Counsel: Brian M Goldberg, Esq. (briangoldberg@dandslaw.com) Deutsch & Schneider LLP 79-37 Myrtle Avenue Glendale, NY 11385 Tel: (718) 417-1700 Fax: (718) 417-3095 http://dandslaw.com/ Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. NATIONAL DRY: Section 341(a) Meeting Scheduled for August 20 ------------------------------------------------------------ Roberta A. DeAngelis, the U.S. Trustee for Region 3, will convene a meeting of creditors of National Dry Cleaners, Inc. on Aug. 20, 2008, at 10:00 a.m., at J. Caleb Boggs Federal Building, 2nd Floor, Room 2112. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About National Dry Cleaners Inc. Headquartered in Phoenix, Arizona, National Dry Cleaners Inc. -- http://www.alphillips.com/and http://www.pridecleaners.com/-- aka Delia's Cleaners Inc. operates more than 300 dry cleaning stores across the nation. The enterprise employs over 1,500 people. As of June 30, 2008, NDCI operated 231 dry cleaning stores and 6 central dry cleaning and laundry plants in nine states. Of the dry cleaning stores, 164 are drop stores, meaning that the stores do not have dry cleaning or laundry equipment on site, and 67 dry cleaning stores have the necessary equipment to perform dry cleaning and laundry services on-site. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on July 7, 2008, (Bankr. D. Del. Case No.: 08-11382 to 08-11393) Joel A. Waite, Esq., Joseph M. Barry, Esq., Matthew Barry Lunn, Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. NATIONAL DRY: Wants to Hire Young Conaway as Attorney ----------------------------------------------------- National Dry Cleaners Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware for permission to employ Young Conaway Stargatt & Taylor, LLP, as their attorneys. Young Conaway will: a) provide legal advice with respect to the Debtors' powers and duties as debtor-in-possession in the continued operation of their business management of their properties and sale of their assets; b) prepare and pursue confirmation of a plan and approval of a disclosure statement; c) prepare on behalf of the Debtors necessary applications, motions, answers, orders, reports and other legal papers; d) appear in the Court and protect the interests of the Debtors before the Court; and e) perform all other legal services for the Debtors which may be necessary and proper in these proceedings. The firm's professionals will bill at these rates: Professionals Hourly Rates ------------- ------------ Joel A. Waite, Esq. $560 Matthew B. Lunn, Esq. $355 Nathan D. Grow, Esq. $260 Ryan M. Bartley, Esq. $240 Kimberly A. Beck $175 Designations Hourly Rates ------------ ------------ Attorneys $240-$750 Paralegals $115-$215 Joel A. Waite, Esq., a partner at 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. Mr. Waite can be reached at: Joel A. Waite, Esq. (jwait@ycst.com) Young Conaway Stargatt & Taylor, LLP The Brandywine Building, 17th Floor 1000 West Street Wilmington, Delaware 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 http://www.youngconaway.com/ About National Dry Cleaners Inc. Headquartered in Phoenix, Arizona, National Dry Cleaners Inc. -- http://www.alphillips.com/and http://www.pridecleaners.com/-- aka Delia's Cleaners Inc. operates more than 300 dry cleaning stores across the nation. The enterprise employs over 1,500 people. As of June 30, 2008, NDCI operated 231 dry cleaning stores and 6 central dry cleaning and laundry plants in nine states. Of the dry cleaning stores, 164 are drop stores, meaning that the stores do not have dry cleaning or laundry equipment on site, and 67 dry cleaning stores have the necessary equipment to perform dry cleaning and laundry services on-site. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on July 7, 2008, (Bankr. D. Del. Case No.: 08-11382 to 08-11393). The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, notice and balloting agent. The Debtors listed estimated assets of $10 million to $50 million and estimated debts of $10 million to $50 million. NETWOLVES CORP: Seeks Another Exit Financing After Axiom's Failure ------------------------------------------------------------------ The Hon. Paul Glenn of the U.S. Bankruptcy Court for the Middle District of Florida in Tampa will hold a hearing Monday, July 28, 2008, to approve a second attempt of NetWolves Corporation and its debtor-affiliates to obtain debtor-in-possession financing, John Blakely of The Deal says. According to The Deal, the Debtors twice delayed confirmation hearing of their proposed reorganization plan after Axiom Capital Management failed to provide $4 million exit funding pursuant to the plan. The Debtors told the Court that Axiom's "last-minute failure" forced them to seek another exit financing, The Deal notes. As reported by the Troubled Company Reporter on July 24, 2008, the Debtors said they will obtain exit financing to support payments required to be made under the plan, repay any DIP financing, pay transaction costs, and fund working capital and general corporate purposes following their emergence from bankruptcy. The Debtors' initial DIP fund request was a $600,000 secured convertible promissory note due July 31, 2008, to be provided by various lenders, The Deal relates. The Debtors said they need to tap another $600,000 DIP fund, also a promissory note, saying that about $300,000 of the previous promissory note will become due and payable by month's end, The Deal continues. Judge Glenn reminded the Debtors that their amended reorganization plan is due today, July 25, 2008, according to The Deal. The plan confirmation hearing, which commenced on June 24, is set to continue on August 20. About NetWolves Based in Tampa, Florida, NetWolves Corporation (Pink Sheets: WOLV) -- http://www.netwolves.com/-- provides telecommunications and Internet-managed services to more than 1,000 customers through its neutral FCC-licensed carrier. Some of NetWolves' customers include General Electric, University of Florida, McLane Company, JoAnn Stores and Marchon Eyewear. The company and three of its affiliates filed for Chapter 11 protection on May 21, 2007 (Bankr. M.D. Fla. Case Nos. 07-04186 through 07-04196). David S. Jennis, Esq., at Jennis Bowen & Brundage, P.L., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, it listed total assets of $8,847,572 and total liabilities of $7,637,029. The hearing on the Debtors' reorganization plan commenced on June 24, 2008, and will continue on August 20. NEW AMSTERDAM: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The New Amsterdam, LLC 820 Pearl Street Boulder, CO 80302 Bankruptcy Case No.: 08-20645 Type of Business: The Debtor is engaged in real estate business. Chapter 11 Petition Date: July 22, 2008 Court: District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Jeffrey Weinman, Esq. Email: jweinman@epitrustee.com 730 17th Street, Suite 240 Denver, CO 80202 Tel: (303) 572-1010 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's 11 largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob08-20645.pdf NEW MOUNT OLIVE: Case Summary & Two Largest Unsecured Creditors --------------------------------------------------------------- Debtor: New Mount Olive Church of God in Christ 220 Monee Road Park Forest, IL 60466 Bankruptcy Case No.: 08-18742 Type of Business: The Debtor runs a church. Chapter 11 Petition Date: July 21, 2008 Court: Northern District of Illinois (Chicago) Judge: Jack B. Schmetterer Debtor's Counsel: Angie S. Lee, Esq. Email: angielesq@yahoo.com Law Office of Angie S. Lee, LLC 16335 S. Harlem Ave., Suite 415 Tinley Park, Il 60477 Tel: (708) 845-2555 Fax: (708) 633-6419 http://www.aleelaw.com/ Total Assets: $1,370,500 Total Debts: $588,677 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/ilnb08-18742.pdf OMNI FINANCIAL: Decides to Delist Common Stock from Nasdaq ---------------------------------------------------------- Omni Financial Services, Inc., the bank holding company for Omni National Bank, received a letter on July 18, 2008, from the Hearings Panel of The Nasdaq Stock Market acknowledging the company's decision to delist its common stock from Nasdaq and stating that the Panel has determined to delist the company's common stock, with trading being suspended effective at the open of trading on Tuesday, July 22, 2008. Delisting will be effective 10 days after Nasdaq files a Form 25 with the SEC. As reported by The Troubled Company Reporter on July 15, 2008, Omni Financial Services Inc. received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market notifying the company that it failed to comply with Nasdaq's minimum market value of publicly held shares requirement for continued listing set forth in Nasdaq Marketplace Rule 4450(a)(2), which requires companies to maintain a MVPHS of $5,000,000. On July 7, 2008, The Troubled Company Reporter also reported that Omni Financial Services Inc. received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market notifying that the company failed to comply with Nasdaq's minimum bid price requirement for continued listing set forth in Nasdaq Marketplace Rule 4450(a)(5). Omni Financial Services, the bank holding company for Omni National Bank failed to meet the Marketplace Rule 4450(e)(2), which requires companies to maintain a minimum closing bid price of $1.00 per share. About Omni Financial Services Inc. Headquartered in Atlanta, Georgia, Omni Financial Services Inc. (NASDAQ:OFSY) -- http://www.onb.com.-- is a bank holding company that provides a full range of banking and related services through its wholly owned subsidiary, Omni National Bank, a national bank headquartered in Atlanta, Georgia. Omni has one full service banking location in Atlanta, one in Dalton, Georgia, four in North Carolina, one in Chicago, Illinois, one in Dallas, Texas, one in Houston, Texas and one in Tampa, Florida. In addition, Omni has loan production offices in Charlotte, North Carolina, Birmingham, Alabama, and Philadelphia, Pennsylvania. Omni provides traditional lending and deposit gathering capabilities, well as an array of financial products and services, including specialized services such as community redevelopment lending, small business lending and equipment leasing, warehouse lending, and asset-based lending. ORIENTAL FIN'L: S&P Holds 'BB+' Rating; Changes Outlook to Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB+' long-term counterparty credit rating on Puerto Rico-based Oriental Financial Group. At the same time, Standard & Poor's revised the outlook to stable from negative. The rating on Oriental Financial Group reflects its heavy reliance on wholesale funding to support its significant concentration in investment securities and modest ALM modeling capabilities for the high level of interest rate risk, and geographically concentrated business in Puerto Rico. The rating also takes into account Oriental's low credit risk profile in the loan book, good cost discipline, and robust capital metrics. Oriental's performance turned around in 2007 after sustaining a loss of $10 million in 2006 and has continued on a positive trajectory in 2008 in part helped by the repositioning of the large available-for-sale securities portfolio (late 2006). Also, Oriental's restructuring of the funding profile in early 2007 resulted in improving net interest margins to date, helped by the easing of interest rates although financial performance remains below historical levels. Oriental's profitability is largely a function of the spread income it earns on its oversized investment portfolio (80% of earnings assets), which is repo funded and sensitivity to interest rate movements. Profitability also reflects the bank's strong fee income business that helps diversify the revenue stream and a low-risk residential mortgage portfolio. "We view Oriental's credit risk profile as moderately low and well contained, given the small size and good quality of the residential mortgage portfolio," said Standard & Poor's credit analyst Lidia Parfeniuk. "Meanwhile, the credit sensitive exposures in the investment portfolio are high in relation to Oriental's earnings," she added. Interest rate risk remains Oriental's largest risk. Moreover, through structured repo transactions, the company has taken on highly leveraged interest rate risk. S&P also note that the company's net unrealized securities losses have grown to $46 million, which is large in relation to earnings and limits financial flexibility. The robust capital position supports the rating and is able to withstand material contingent risk. S&P believe that Oriental is well positioned to continue to improve profitability in 2008 given the current interest rate environment. Furthermore, S&P expect loan losses to remain manageable. S&P also expect revenues from the mortgage business to continue to grow, including fee income, and costs to remain well managed. The risks include a slowing U.S. economy, which could exacerbate the recession in Puerto Rico, reduce loan origination volumes, and aggravate credit issues. The stable outlook reflects the turnaround in performance and expectation of continued expansion in profitability in the near to medium term. The stable outlook also reflects our expectation of manageable credit quality metrics despite the weak Puerto Rico economy. S&P could revise the outlook to positive if loan losses remain stable, the business benefits from further revenue diversification, and sensitivities to interest rates are further reduced. Conversely, S&P could revise the outlook to negative if credit quality deteriorates beyond our expectations and earnings continue to display substantial volatility. PACIFIC LIFE: Fitch Lifts FS Rating to A from BB After PLC Deal --------------------------------------------------------------- Fitch Ratings has upgraded the insurer financial strength rating of Pacific Life Re Limited, formerly known as Scottish Re Limited, to 'A' from 'BB' following the close of its recent acquisition by Pacific LifeCorp. The Rating Outlook is Stable. The upgrade of PLR's rating is based on a guarantee agreement in place between PLR and PLC. In the agreement, obligations of PLR align with senior unsecured obligations of PLC. Fitch rates the senior debt issued by PLC at 'A'. The acquisition and near-term earnings contribution of PLR within the overall Pacific Life organization is relatively small. PLC maintains a very strong balance sheet, including modest financial leverage and very strong operating capital quality. Further, the company continues to maintain a high-quality asset portfolio, extensive liquidity and good asset/liability management. The company's asset portfolio has not been meaningfully affected by the subprime mortgage market. Fitch's ratings concerns for PLC include the increase in variable annuity assets under management which create equity market exposures related to various benefit guarantees, interest rate exposure, and the company's ability to continue stable growth in earnings in its aircraft leasing operation. PLC is the intermediate holding company of Pacific Mutual Holding company, a mutual insurance holding company formed in 1997. In addition to PLR, PLC's other major subsidiaries include Pacific Life Insurance Company, Pacific Life and Annuity Insurance Company, and Aviation Capital Group. This rating is upgraded with a Stable Outlook: Pacific Life Re Limited (previously known as Scottish Re Limited) -- IFS to 'A' from 'BB'. PEGASUS AVIATION: Fitch Cuts Ratings on Two Classes to 'CCC/DR2' ---------------------------------------------------------------- Fitch Ratings has taken these rating actions on the three Pegasus Aviation Lease Securitization Trusts: Pegasus Aviation Lease Securitization (PALS I) -- Class A-1 notes remain at 'CC/DR4'; -- Class A-2 notes remain at 'CC/DR4'; -- Class B notes remain at 'C/DR6'; -- Class C notes remain at 'C/DR6'; -- Class D notes remain at 'C/DR6'. Pegasus Aviation Lease Securitization II (PALS II) -- Class A-1 notes downgraded to 'CCC/DR2' from 'B-/DR2'; -- Class A-2 notes downgraded to 'CCC/DR3' from 'B-/DR2'; -- Class B notes remain at 'C/DR6'; -- Class C notes remain at 'C/DR6'; -- Class D notes remain at 'C/DR6'. Pegasus Aviation Lease Securitization III (PALS III) -- Class A-1 notes affirmed at 'B/DR2'; -- Class A-2 notes affirmed at 'B/DR2'; -- Class A-3 notes affirmed at 'B/DR2'; -- Class B-1 notes remain at 'C/DR6'; -- Class B-2 notes remain at 'C/DR6'; -- Class C-1 notes remain at 'C/DR6'; -- Class C-2 notes remain at 'C/DR6'; -- Class D-1 notes remain at 'C/DR6'. Cash flow available to service debt in the PALS II transaction has continued to steadily decline over the past two years. The decline in monthly collections combined with increased expenses in recent months has further stressed the transaction structure. While the class A notes are receiving current interest payments, total monthly collections were insufficient to pay minimum principal to the class A notes on the March, May, and June 2008 payment dates. As available cash flow continues to decrease, the reliability of full principal payment on the class A notes also declines. The DR-Rating differential between the A-1 and A-2 notes reflects the differing amortization schedules between the two classes. Class A-1 is currently receiving the full benefit of class A principal payments. In addition, the PALS II portfolio contains significant concentrations in older generation, less fuel efficient aircraft types such as 757-200s and MD-80s. These aircraft types are exposed to potential value and lease rate deterioration resulting from increased fuel prices, airline capacity reductions, and bankruptcies in the current environment. Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft given the aviation market volatility and significantly elevated fuel prices. PALS I and PALS III were affirmed as they were found to have credit support consistent with their current ratings. PFF BANCORP: To Move Share Trading to Over the Counter Market ------------------------------------------------------------- PFF Bancorp Inc., the holding company of PFF Bank & Trust, Glencrest Investment Advisors Inc., and Diversified Builder Services Inc., disclosed that the company's Board of Directors has determined to move the trading of its common stock from the New York Stock Exchange to the OTC Bulletin Board. The company will announce the effective date of the transfer and the new ticker symbol when advised by the OTCBB. The company's stock will continue to trade on the NYSE until the transition is complete. The company said the change was made in anticipation of the likelihood that, as a result of recent declines in the price of the stock, the company will not meet, in the near-term, the NYSE's listing standards regarding the total market value of the common stock. The transition to the over-the-counter market will have no effect on PFF Bancorp's previously announced agreement to be acquired by FBOP Corporation. The company has also filed its preliminary proxy materials for the merger with the Securities and Exchange Commission. President and chief executive officer Kevin McCarthy commented, "Our Board of Directors believes that the recent decline in our stock price is reflective of overall conditions in the stock market, particularly for financial companies. The company expects that its stock will be actively traded on the OTCBB and that there will be minimal impact on stockholders' ability to trade shares of stock from this transfer." PFF Bancorp. Inc. shares closed at $1.15 on Wednesday. Previous close was at $1.08. The highest close this year was at $13.08 on Feb. 1, 2008 (Source: Yahoo! Finance). About PFF Bancorp Hedaquartered in Rancho Cucamonga, California, PFF Bancorp, Inc., (NYSE:PFB) -- http://www.pffbancorp.com/-- is a diversified financial services company. It conducts its business through its wholly owned subsidiary, PFF Bank & Trust. The company's business also includes Glencrest Investment Advisors Inc., a registered investment advisor. Its market areas include eastern Los Angeles, San Bernardino, Riverside and northern Orange counties. At March 31, 2008, the company's consolidated balance sheet showed $4.1 billion in total assets, $4.0 billion in total liabilities, and $124.4 million in total stockholders' equity. Going Concern Doubt As reported in the Troubled Company Reporter on July 3, 2008, KPMG LLP in Los Angeles, Calif., expressed substantial doubt about PFF Bancorp Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended March 31, 2008. The auditing firm reported that the company has experienced a significant net loss in 2008, which has resulted in a reduction in the company's available liquidity and regulatory capital. The company would be unable to meet its outstanding obligations as they become due if the proposed acquisition by FBOP Corporation is not consummated or another significant capital raising transaction does not occur. PLASTECH ENGINEERED: No Admin. Treatment to Reclamation Claims -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan rules to deem reclamation claims against Plastech Engineered Products Inc. and its debtor-affiliates as general unsecured non- priority claim not entitled to administrative treatment or replacement liens under Section 546 of the U.S. Bankruptcy Code. As reported in the Troubled Company Reporter on June 5, 2008, the Debtors previously sought to reject 75 reclamation demands from certain vendors and suppliers. The Debtor said that the reclamation claimants will presumably seek administrative expense treatment pursuant to Section 546 of the U.S. Bankruptcy Code on account of their Reclamation Claims, which aggregate $17,800,000. The Debtors are authorized under Section 546(h) -- subject to the limitations imposed by any Court order and the prior rights of holders of security interests in the goods or the proceeds of the goods under (a) the Debtors' proposed DIP financing, and (b) the prepetition secured financing agreements to return to vendors goods that were delivered prepetition -- for an offset of the purchase price of the goods against the vendors' prepetition claims. Pursuant to the ruling, Reclamation Claimants are prohibited from claiming more than once on goods which are the subject of a Reclamation Demand, provided however that the Claimants may exercise their rights to claim for administrative expense under Section 503(b)(9) under the Bankruptcy Code, or a secured claim that may be inclusive of those amounts in the Reclamation Claim. A list of the reclamation claims is available for free at: http://researcharchives.com/t/s?2d52 * * * The Order, however, is without prejudice to Owens Corning's Claim No. 1462 for $81,405. 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. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PLAYMORE INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Playmore, Inc. aka Playmore, Inc., Publishers 58 Main Street Hackensack, NJ 07601 Tel: (201) 678-2990 Bankruptcy Case No.: 08-23720 Type of Business: The Debtor is a publisher of value priced children's books, readily available in most mass market retailers throughout the U.S. and Canada, as well as through many exclusive distributors throughout the world. See http://www.playmorebooks.com Chapter 11 Petition Date: July 23, 2008 Court: District of New Jersey (Newark) Debtor's Counsel: Bruce Gordon, Esq. Email: bgordon@bgordonlaw.com Bruce D. Gordon LLC Polygon Plaza 2050 Center Ave., Suite 560 Fort Lee, NJ 07024 Tel: (201) 585-2600 Fax: (201) 461-2633 http://bgordonlaw.com/ Total Assets: $6,815,087 Total Debts: $5,268,509 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb08-23720.pdf PLASTECH ENGINEERED: Plant in Elwood, Indiana Damaged by Fire ------------------------------------------------------------- At least one-third of Plastech Engineered Products, Inc.'s facility in Elwood, Indiana, was damaged by fire that lasted for four hours, a report by WISHTV8.com disclosed. Though there were no reported injuries, Todd Harmeson of the Madison County Emergency Management told reporters that his team checked if the smoke coming from the fire pose a hazard, as the fire reportedly started in the facility's paint room. The team, however, did not find a cause to declare evacuation in the nearby area. The Indiana Department of Environmental Management also checked the area's water supply, which they later found safe for drinking. While fire investigators are still uncovering the cause of the incident, a report by Herald Bulletin.com disclosed the facility's violations to safety regulations during inspections conducted by the Indiana Department of Environmental Management in 2004 and 2005. The company was initially penalized for $5,800, and $30,000 on the second offense for labeling negligence on health-hazards, Barry Sneed of the IDEM told the news source. Results of the recently concluded June inspection are yet to be obtained. The Elwood facility, which employs approximately 290 people, reportedly will close following Plastech's exit from the exteriors business. 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. 28; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PORTOLA PACKAGING: May 31 Balance Sheet Upside-Down by $106.8MM --------------------------------------------------------------- Portola Packaging Inc. reported last week preliminary results for its fiscal 2008 third quarter ended May 31, 2008. At May 31, 2008, the company's consolidated balance sheet, preliminary and subject to change as described in "Notification of Late Filing," showed $170.0 million in total assets and $276.8 million in total liabilities, resulting in a $106.8 million stockholders' deficit. Portola reported a net loss of $3.4 million for the third quarter of fiscal year 2008 compared to a net loss of $1.3 million for the third quarter of fiscal year 2007. The company reported sales of $75.1 million for the third quarter of fiscal year 2008 compared to $68.7 million for the third quarter of fiscal year 2007, an increase of 9.3%. Portola reported operating income of $2.0 million for the third quarter of fiscal year 2008, compared to operating income of $3.8 million reported in the third quarter of fiscal year 2007, a decrease of $1.8 million. The decrease quarter over quarter was primarily due to a $1.1 million decrease in gross margins, higher human resource related costs, bad debt expenses as well as increased restructuring costs. Gross margins were substantially impacted by the time lag in passing higher resin costs to customers as well as higher utility, lease, freight and labor related costs. The increase in selling expense relates to costs of new product introductions that are being made over the next two quarters. EBITDA decreased $1.7 million to $6.6 million in the third quarter of fiscal year 2008 compared to $8.3 million in the third quarter of fiscal year 2007. Adjusted EBITDA, which excludes the effect of restructuring charges, (gains) or losses on the sale of assets and other non-recurring expenses, decreased $1.3 million to $7.0 million in the third quarter of fiscal year 2008 compared to $8.3 million reported in the third quarter of fiscal year 2007. Lower quarter over quarter Adjusted EBITDA was primarily due to decreased operating income. The company said that although the third quarter was extremely challenging principally due to resin and other energy related cost increases, there were some positives. Throughout the third quarter, the company continued to implement several improvement initiatives aimed at reducing cost and enhancing margins in the upcoming quarters, most notably was the announcement to discontinue operations at the Clifton Park, New York facility. The volume currently produced in the New York facility will transfer to other Portola facilities in the U.S. These restructuring efforts are expected to result in an annualized reduction in compensation, utility and other expenses of approximately $3.2 million. In response to rising energy and non- resin related cost increases that have been encountered in recent months, the company has begun implementing price increases. Notification of Late Filing The company will not be able to file its Quarterly Report on Form 10-Q for the third quarter ended May 31, 2008, because it has not completed the investigation of the accounting irregularities at the company's China subsidiaries, Portola (Asia Pacific) Holding Limited and Shanghai Portola Packaging Company Limited and the restatement process, if necessary, which could impact the financial statements for the fiscal 2008 third quarter. The company currently expects to file the restatements, if necessary, as soon as possible following completion of the investigation and expects to file its Quarterly Report on Form 10-Q for the Third Quarter of fiscal 2008 at that time or shortly thereafter. On June 27, 2008, the company determined that its previously issued financial statements for the fiscal year ended Aug. 31, 2007 (including restating the quarterly interim periods within that year) and its quarterly financial statements for the quarters ended Nov. 30, 2007, and Feb. 29, 2008, should no longer be relied upon as a result of the accounting irregularities discovered at the company's China subsidiaries. These irregularities primarily consisted of errors in the accounts receivable, accounts payable, inventory and cost of sales accounts and totaled up to approximately $2.5 million net over the periods indicated. About Portola Packaging Headquartered in Batavia, Illinois, Portola Packaging Inc. -- http://www.portpack.com/-- designs, manufactures and markets tamper-evident plastic closures used in dairy, fruit juice, bottled water, sports drinks, institutional food and other non- carbonated beverage markets. The company also produces a wide variety of plastic bottles for use in dairy, water and juice markets, including various high density bottles, as well as five- gallon polycarbonate water bottles. In addition, the company designs, manufactures and markets capping equipment for use in high speed bottling, filling and packaging production lines. Portola is also engaged in the manufacture and sale of tooling and molds used for blow molding. * * * As reported in the Troubled Company Reporter on July 21, 2008, Portola Packaging Inc. received a notice of default under its $60.0 million revolving credit agreement dated Jan. 16, 2004, with General Electric Capital Corporation. The notice was prompted by the company's filing stating that the company was investigating accounting irregularities at certain subsidiaries in China that may require restatement of these financial statements for approximately $2.5 million net over these periods, in total. While reserving its rights and remedies under the credit agreement, GECC has been continuing to fund under the credit agreement. The company has retained Peter J. Solomon company and Gibson & Rechan LLC to assist the company in evaluating its alternatives, including potentially a restructuring of its funded debt obligations. As reported in the Troubled Company Reporter on June 10, 2008, Standard & Poor's Ratings Services lowered its issue-level rating on Portola Packaging Inc.'s $180 million 8.25% senior unsecured notes to 'CC' (two notches lower than the 'CCC' corporate credit rating) from 'CCC-' and revised the recovery rating to '6' from '5', indicating the expectation for negligible (0% to 10%) recovery in the event of a payment default. At the same time, S&P affirmed the 'CCC' corporate credit rating on Portola. The outlook is negative. PORTOLA PACKAGING: Plans to Restructure by Pre-Package Chapter 11 ----------------------------------------------------------------- Portola Packaging Inc. entered into a restructuring support agreement with its principal secured lenders and holders in excess of 80% in amount of its 8-1/4% Senior Notes due 2012 which will enable the company to significantly reduce its outstanding indebtedness. The company plans to implement the proposed restructuring through a pre-packaged Chapter 11 bankruptcy filing. In connection with the restructuring, the company also has reached agreement with Wayzata Investment Partners LLC, a Minnesota-based investment firm with more than $6 billion in assets under management, which will provide the company with access to a $10 million bridge facility to fund the restructuring process. Pursuant to the restructuring, holders of the senior notes will receive 100% of the common stock of reorganized Portola in exchange for their claims. Wayzata is expected to be the company's controlling shareholder upon emergence from chapter 11. Importantly, the restructuring contemplates that all obligations owed to trade creditors, suppliers, customers and employees in the ordinary course of business will be unimpaired and unaffected by the restructuring. The company expects to commence the formal process of vote solicitation in early August. When the necessary votes are received, the restructuring will be finalized through a voluntary pre-packaged bankruptcy filing under chapter 11 of the U.S. Bankruptcy Code to be commenced in early September 2008. The company anticipates that the restructuring process will be completed by the end of October 2008 at the latest. "We are pleased to have achieved such strong support for a consensual restructuring that dramatically improves our balance sheet, reduces our annual cash interest obligations by approximately $15 million, and enables continued reinvestment in our products and future growth," Brian J. Bauerbach, Portola's President and CEO, stated. "We are thrilled to have the continued support of Wayzata and look forward to its long term commitment to the business." Notice of Default As reported in the Troubled Company Reporter on July 21, 2008, Portola Packaging received a notice of default under its $60.0 million revolving credit agreement dated Jan. 16, 2004, with General Electric Capital Corporation. The notice was prompted by the company's filing stating that the company was investigating accounting irregularities at certain subsidiaries in China that may require restatement of these financial statements for approximately $2.5 million net over these periods, in total. S&P Cuts Corporate Credit Rating to 'CCC-' Standard & Poor's Ratings Services said on July 23, 2008, it lowered its ratings on Portola Packaging Inc. by one notch, including its corporate credit rating to 'CCC-' from 'CCC'. The outlook remains negative. The downgrade reflects a potential debt restructuring that S&P could view as tantamount to a default, heightened liquidity concerns, and continued poor operating results. The company recently disclosed that it is evaluating alternatives that could include a restructuring of its funded debt obligations. On June 30, 2008, Portola received a notice of default and reservation of rights from General Electric Capital Corp. in accordance with the credit agreement governing its $60 million senior secured revolving credit facility. The notice was prompted by Portola's earlier filing stating that it was investigating accounting irregularities at certain subsidiaries in China that may require an unfavorable restatement of financial statements. Portola reported on July 7, 2008, that GECC continued to make funds available under the credit agreement. "However, we are becoming increasingly concerned about its continuing access to the facility in light of the accounting investigation and ongoing discussions with GECC and Wayzata Investment Partners LLC regarding forbearance arrangements that would allow the company to pursue a balance sheet restructuring," credit analyst Henry Fukuchi said. "In addition, recent operating results have been weaker than expected due to ongoing challenges related to resin and energy- related cost increases," Mr. Fukuchi said. With annual sales of about $284 million, Batavia, Illinois-based Portola produces tamper-evident plastic closures on packaging applications for noncarbonated beverages such as dairy drinks, fruit juices, and water; cosmetics; and food products. About Portola Packaging Headquartered in Batavia, Illinois, Portola Packaging Inc. -- http://www.portpack.com/-- designs, manufactures and markets tamper-evident plastic closures used in dairy, fruit juice, bottled water, sports drinks, institutional food and other non- carbonated beverage markets. The company also produces a wide variety of plastic bottles for use in dairy, water and juice markets, including various high density bottles, as well as five- gallon polycarbonate water bottles. In addition, the company designs, manufactures and markets capping equipment for use in high speed bottling, filling and packaging production lines. Portola is also engaged in the manufacture and sale of tooling and molds used for blow molding. PRIME 2004-CL1A: S&P Junks Ratings on Two Classes of Certificates ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on three classes of PRIME 2004-CL1A's pass-through certificates. At the same time, S&P removed class B-3 from CreditWatch with negative implications. Additionally, S&P affirmed its 'AA' rating on class B-1 from the same transaction. These four classes had an original total principal balance of approximately $30.336 million. PRIME 2004-CL1A is a resecuritization of underlying class B-1, B- 2, and B-3 mortgage pass-through certificates from Prime Mortgage Trust 2004-CL1, which Structured Asset Mortgage Investments II Inc. issued in January 2004. Each class in the resecuritization trust, with the exception of class XB, is collateralized by the corresponding underlying class of the same name. Each class will receive interest and all principal generated by its corresponding underlying class. Class XB is interest-only and receives interest from all three underlying classes. S&P reviewed the underlying transaction and affirmed or adjusted its ratings on the underlying classes based on that review. The rating on each class issued by PRIME 2004-CL1A (except class XB) is based on the current rating of the corresponding underlying class. The rating on class XB is based on the lowest of the ratings on each of the underlying certificates. Ratings Lowered PRIME 2004-CL1A Pass-through certificates series 2004-CL1A Rating ------ Class To From ----- -- ---- B-2 BBB- A XB CCC BBB Rating Lowered and Removed from Creditwatch Negative PRIME 2004-CL1A Pass-through certificates series 2004-CL1A Rating ------ Class To From ----- -- ---- B-3 CCC B/Watch Neg Rating Affirmed PRIME 2004-CL1A Pass-through certificates series 2004-CL1A Class Rating ----- ------ B-1 AA QUEBECOR WORLD: Catalyst Slashes Reclamation Claim to $1,852,016 ---------------------------------------------------------------- Catalyst Paper (USA), Inc., informed the U.S. Bankruptcy Court for the Southern District of New York that it has amended the amount of its reclamation claim to $1,852,016 against Quebecor World Inc. and its debtor-affiliates. Catalyst formerly demanded a $8,388,821, reclamation claim on goods it sold to the Debtors 20 days before the bankruptcy filing. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Inks Two Master Lease Pacts with National City -------------------------------------------------------------- Quebecor World (USA) Inc., entered into two prepetition master lease agreements with National City Commercial Capital Company, LLC. National City asserts that the Debtor has defaulted under the terms of the Master Lease Agreements. Accordingly, National City asks the Court to compel the Debtor to decide whether to assume or reject the Lease Agreement, and compel the Debtor to pay $20,273 per month. If the Debtor fails to deliver the amounts, National City asks the Court to direct the Debtor to immediately deliver the equipment subject to the Lease Agreement, or lift the automatic stay, or award National City with an administrative claim for all monies coming due postpetition. Frank Peretore, Esq., at Peretore & Peretore, P.C., in Sparta, New Jersey, tells the Court that National City has demanded payments from the Debtor but the Debtor has not paid the demanded amounts. He asserts that if the Debtor does not decide whether to assume or reject the Leases, National City will continue to be irreparably harmed since the Debtor is using the leased equipment yet not making the required monthly payments. Aside from the $20,273 monthly payment, National City also seeks payment of the rental for the use of the leased equipment, plus counsel fees, taxes and late charges. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Mulls $19.7 Mil. Expansion of Dubuque, Iowa Plant ----------------------------------------------------------------- Quebecor World Dubuque Inc., proposed an approximately $19,700,000 growth plan, including a 40,000-square foot addition at its Kerper Boulevard plant, in Dubuque, Iowa, the Telegraph Herald reported. However, Dan McDonald at Greater Dubuque Development Corp., told the newspaper that the expansion of the Quebecor Plant is not expected to create jobs due to the modernization of printing equipment. The report related that the Iowa Department of Economic Development Board agreed to provide a $400,000, forgivable loan and a $100,000, loan as state economic development assistance for the project. QWI Dubuque also received $249,483, in tax credits, the report said. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUEBECOR WORLD: Signs $55 Mil. Printing Deal with Reader's Digest ----------------------------------------------------------------- Quebecor World Inc. has reached a new multi-year agreement valued at approximately $55 million with Reader's Digest Association to print magazines and books for the New York-based publisher. The agreement includes renewal work on titles like Family Handyman, Reader's Digest Large Print, Weekly Reader, QVC books and Select Editions books. The agreement also includes significant new work for Quebecor World, including Weekly Reader Current Events and Reader's Digest Milwaukee magazine. "Our partnership with the Reader's Digest Association dates back more than 30 years," said Jacques Mallette, President and CEO, Quebecor World Inc. "We are pleased that this agreement not only continues our partnership but will further expand the scope and scale of the services we provide to the Reader's Digest Association." "Our ability to serve the Reader's Digest Association through our integrated Publishing Services Group allows us to deliver the value and quality an industry publishing leader such as the Reader's Digest Association demands," said Kevin J. Clarke, President of Quebecor World's Publishing Services Group. "This successful partnership also shows the value of our strategy to integrate our magazine, book and directory operations into a single operating structure. Innovative publishers like Reader's Digest Association are increasingly serving their readers and advertisers across these multiple media platforms." Quebecor World's continental platform and full-service offering provides added value to Reader's Digest. The work will be produced at Quebecor World's facilities in the United States and Canada and Reader's Digest will benefit from Quebecor World's leading Logistics Services to improve delivery and reduce postal costs. Al Perruzza, Senior Vice President of Global Operations at Reader's Digest Association, said: "Quebecor World has demonstrated continuing high levels of service, quality and value over the many years we have been able to work with the company. We are pleased to renew and expand on this relationship, and look forward to Quebecor World being a valued partner to us in the years ahead." About Reader's Digest The Reader's Digest Association, Inc. (RDA) is a global publisher and direct marketer of books, magazines and home entertainment products that inform, entertain and inspire people of all ages and cultures around the world. The company publishes 92 magazines, including its flagship magazine -- Reader's Digest. RDA's corporate headquarters are located near Pleasantville, New York. About Quebecor World Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE: IQW), -- http://www.quebecorworldinc.com/-- provides market solutions, including marketing and advertising activities, well as print solutions to retailers, branded goods companies, catalogers and to publishers of magazines, books and other printed media. It has 127 printing and related facilities located in North America, Europe, Latin America and Asia. In the United States, it has 82 facilities in 30 states, and is engaged in the printing of books, magazines, directories, retail inserts, catalogs and direct mail. The company has operations in Mexico, Brazil, Colombia, Chile, Peru, Argentina and the British Virgin Islands. Quebecor World and 53 of its subsidiaries, including those in Canada, filed a petition under the Companies' Creditors Arrangement Act before the Superior Court of Quebec, Commercial Division, in Montreal, Canada, on Jan. 20, 2008. The Honorable Justice Robert Mongeon oversees the CCAA case. Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the Company in the CCAA case. Ernst & Young Inc. was appointed as Monitor. On Jan. 21, 2008, Quebecor World (USA) Inc., its U.S. subsidiary, along with other U.S. affiliates, filed for chapter 11 bankruptcy on Jan. 21, 2008 (Bankr. S.D.N.Y Lead Case No. 08- 10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter LLP represents the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors is represented by Akin Gump Strauss Hauer & Feld LLP. Based in Corby, Northamptonshire, Quebecor World PLC -- http://www.quebecorworldplc.com/-- is the U.K. subsidiary of Quebecor World Inc. that specializes in web offset magazines, catalogues and specialty print products for marketing and advertising campaigns. The company employs around 290 people. Quebecor PLC was placed into administration with Ian Best and David Duggins of Ernst & Young LLP appointed as joint administrators effective Jan. 28, 2008. As of Sept. 30, 2007, Quebecor World's unaudited consolidated balance sheet showed total assets of $5,554,900,000, total liabilities of $3,964,800,000, preferred shares of $175,900,000, and total shareholders' equity of $1,414,200,000. The Debtors have until Sept. 30, 2008, to file a plan of reorganization in the chapter 11 case. The Debtors' CCAA stay has been extended to July 25, 2008. (Quebecor World Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) RESIDENTIAL CAPITAL: Appoints Thomas Marano as Chairman and CEO --------------------------------------------------------------- GMAC Financial Services disclosed that Thomas Marano, non- executive chairman of Residential Capital LLC is named ResCap chairman and chief executive officer, effective immediately. He succeeds ResCap's CEO Jim Jones, who has elected to leave the company. Mr. Marano will remain a Cerberus Capital Management L.P. employee and be dedicated to ResCap to fulfill this role. He will report to GMAC CEO Alvaro de Molina. "[Mr. Marano] brings extensive experience in the mortgage and capital markets to ResCap at this critically important time for the company," Mr. de Molina said. "Under [Mr. Marano's] leadership, ResCap will continue to execute our ongoing plan to streamline the business and focus on core mortgage lending and servicing businesses in the U.S. and select international markets." Mr. Marano was appointed to the ResCap board as non-executive chairman in April 2008, at which time he also joined Cerberus as a managing director. Prior to this, Mr. Marano spent more than 25 years at Bear Stearns & Co., Inc., recently heading the worldwide operations of mortgage trading and originations and serving on the company's board of directors. Additional management changes were disclosed and effective immediately to further strengthen the ResCap leadership team. -- Joshua Weintraub, Cerberus employee and executive committee member of the ResCap board, will assume the role of ResCap vice chairman. -- Tony Renzi, chief operating officer of ResCap's U.S. Residential Funding Group, is named to the newly created position of ResCap chief operating officer. -- Jerry Lombardo, a Cerberus Operations employee, will join the company and lead the management of the Treasury function as treasury executive, succeeding Treasurer Bill Casey who has left the company. -- Thomas W. Neary has joined ResCap from Wells Fargo & Company as executive vice president and senior managing director of Capital Markets. "These management moves will further bolster the leadership team at ResCap and provide a diverse set of talents and skill sets as we work to stabilize the company and weather the near-term market challenges," Mr. de Molina said. "As we make this transition, we thank [Mr. Jones] for his leadership at ResCap in executing a major restructuring of the business and managing efforts to reduce risk and preserve liquidity." In June, ResCap disclosed a comprehensive series of transactions, which included extending unsecured debt maturities, renewing critical funding lines and gaining additional liquidity support from GMAC and its shareholders. About GMAC LLC GMAC LLC -- http://www.gmacfs.com/-- formerly General Motors Acceptance Corporation, is a global, diversified financial services company that operates in approximately 40 countries in automotive finance, real estate finance, insurance and other commercial businesses. GMAC was established in 1919 and employs approximately 26,700 people worldwide. GMAC Financial Services is in turn wholly owned by GMAC LLC. Cerberus Capital Management LP led a group of investors that bought a 51% stake in GMAC LLC from General Motors Corp. in December 2006 for $14 billion. About ResCap Headquartered in Minneapolis, Minnesota, Residential Capital LLC -- http://www.rescapholdings.com/-- is the home mortgage unit of GMAC Financial Services, which is in turn wholly owned by GMAC LLC. * * * As disclosed in the Troubled Company Reporter on June 18, 2008, Moody's Investors Service assigned ratings of Caa2 and Caa3 to Residential Capital LLC (ResCap)'s senior secured and junior secured bonds, respectively. These bonds were issued as part of ResCap's bond exchange which was completed on June 4, 2008. The ratings of ResCap's unsecured senior debt and unsecured subordinate debt were affirmed at Ca and C, respectively. Ratings are under review for downgrade. Separately the senior unsecured rating of GMAC LLC was downgraded to B3 from B2 with a negative outlook. As disclosed in the Troubled Company Reporter on June 9, 2008, Fitch Ratings has downgraded Residential Capital LLC's long- and short-term Issuer Default Ratings to 'D' from 'C' following completion of the company's distressed debt exchange. Fitch has also removed ResCap from Rating Watch Negative, where it was originally placed on May 2. REVE SPC: Moody's Cuts EUR10MM Notes Series 2007-3F2 Rating to Ba2 ------------------------------------------------------------------ Moody's Investors Service downgraded the rating on these two notes issued by REVE SPC Dryden: Class Description: $8,000,000 Dryden XVII Rated Equity Notes, Series 2007-3F1 (Segregated Portfolio Series 31) due 2017 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Baa3 Class Description: EUR10,000,000 Dryden XVII Rated Equity Notes, Series 2007-3F2 (Segragated Portfolio Series 32) due 2017 -- Prior Rating: Baa2, on review for possible downgrade -- Current Rating: Ba2 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 corporate securities. REVE SPC: Moody's Cuts Rating on $3MM Dryden XVII Notes to B2 ------------------------------------------------------------- Moody's Investors Service downgraded the rating on this note issued by REVE SPC Dryden: -- Class Description: $3,000,000 Dryden XVII Variable Spread Notes of Series 2007-2, Class E due March 20, 2017 -- Prior Rating: Ba2, on review for possible downgrade -- Current Rating: B2 According to Moody's, the rating action is the result of deterioration in the credit quality of the transaction's underlying collateral pool, which consists primarily of corporate securities. RICHFX INC: Bought by ChannelAdvisor for $3 Million --------------------------------------------------- E-commerce platform provider ChannelAdvisor disclosed that it has won the bid to purchase RichFX Inc. for approximately $3 million, the Triangle Business Journal reports. RichFX filed for bankruptcy last March. As reported in the Troubled Company Reporter on March 27, 2008, RichFX's parent, RichFX Ltd., was in receivership in Israel, and could not fund its operations. Stephen Smith, RichFX's chief executive officer, stated that the Debtor was trying to sell its business for more than a year. However, buyers were discouraged by an ongoing patent infringement litigation. According to the Journal, ChannelAdvisor also revealed that it had been negotiating with RichFX before the latter's bankruptcy. Most of the Debtor's 40 employees have already joined ChannelAdvisor, including former CEO Eoin Townsend, who joined the online commerce firm as general manager, the Journal relates, citing documents filed with the U.S. Bankruptcy Court for the Southern District of New York. ChannelAdvisor CEO Scot Wingo told the Journal that RichFX's addition will provide ChannelAdvisor with new customers. About ChannelAdvisor Based in Morrisville, North Carolina, ChannelAdvisor -- http://www.channeladvisor.com/-- and its online E-commerce platforms combine best practices, innovative software and integrated technology to help retailers maximize their profits across multiple E-commerce channels -- including marketplaces like eBay, Amazon.com and Overstock.com; comparison shopping sites like Shopping.com, Shopzilla and Pricegrabber.com; and across all the major search engines. About RichFX Based in New York City, RichFx Inc. -- http://www.richfx.com/-- develops software to make online catalogs. The company filed for Chapter 11 bankruptcy on March 18, 2008 (Bankr. S.D.N.Y. Case No. 08-10942). Joseph Thomas Moldovan, Esq., at Morrison Cohen LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets of $1 million to $10 million, and estimated liabilities of $1 million to $10 million. ROCK 2001-C1: Moody's Affirms Junk Rating on $4.5MM Class N Cert. ----------------------------------------------------------------- Moody's Investors Service upgraded the ratings of four classes and affirmed the ratings of 11 classes of ROCK 2001-C1, Series 2001-C1 Commercial Mortgage Pass-Through Certificates as: -- Class A-2, $531,771,423, affirmed at Aaa -- Class X-1, Notional, affirmed at Aaa -- Class X-2, Notional, affirmed at Aaa -- Class B, $27,247,000, affirmed at Aaa -- Class C, $38,600,000, affirmed at Aaa -- Class D, $9,083,000, affirmed at Aaa -- Class E, $11,353,000, upgraded to Aaa from Aa1 -- Class F, $15,894,000, upgraded to Aaa from Aa3 -- Class G, $13,624,000, upgraded to Aa3 from A3 -- Class H, $13,623,000, upgraded to A3 from Baa2 -- Class J, $22,706,000, affirmed at Ba2 -- Class K, $6,812,000, affirmed at Ba3 -- Class L, $4,541,000, affirmed at B1 -- Class M, $9,083,000, affirmed at B3 -- Class N, $4,541,000, affirmed at Caa2 Moody's upgraded Classes E, F, G and H due to increased defeasance and credit enhancement levels. As of the July 10, 2008 distribution date, the transaction's aggregate certificate balance has decreased by approximately 21.1% to $716.5 million from $908.2 million at securitization. The Certificates are collateralized by 97 mortgage loans ranging in size from less than 1.0% to 12.7% of the pool, with the top 10 loans representing 46.2% of the pool. The largest loan in the pool has an investment grade underlying rating. Thirty-seven loans, representing 45.6% of the pool, have defeased and are secured by U.S. Government securities. Three loans have been liquidated from the trust resulting in an aggregate realized loss of approximately $3.8 million. Currently there is one loan, representing 1.0% of the pool, in special servicing. Moody's estimates a loss of approximately $500,000 from this loan. Thirteen loans, representing 9.8% of the pool, are on the master servicer's watchlist. The master servicer's watchlist includes loans which meet certain portfolio review guidelines established as part of the Commercial Mortgage Securities Association's monthly reporting package. As part of our ongoing monitoring of a transaction, Moody's reviews the watchlist to assess which loans have material issues that could impact performance. Not all loans on the watchlist are delinquent or have significant issues. Moody's was provided with full year 2007 operating results for 92.3% of the pool. Moody's loan to value ratio (LTV) for the conduit component is 84.9% compared to 80.0% at Moody's last full review in February 2007 and 84.9% at securitization. The loan with the underlying rating is the RREEF Portfolio Loan ($91.0 million -- 12.7%), which is secured by nine properties totaling 3.7 million square feet. The properties include industrial (5), retail (2), multifamily (1) and office (1) and are located in six states. The portfolio was 90.7% occupied as of December 2007, essentially the same as at last review. The loan is interest only for the full term. Moody's current underlying rating is Aaa, the same as at last review. The three largest conduit loans represent 9.3% of the pool. The largest conduit loan is the IDT Building Loan ($26.6 million-- 3.7%), which is secured by a 444,000 square foot Class B office building located in downtown Newark, New Jersey. The property is 100.0% leased to IDT Corporation through March 2020. The loan is coterminus with the lease. Moody's LTV is 83.1% compared to 85.9% at last review. The second largest conduit loan is the Gables Stonebridge Apartments Loan ($20.8 million--2.9%), which is secured by a 500- unit Class A garden-style multifamily property located in Cordova, Tennessee, a suburb of Memphis. The property was 94.2% occupied as of December 2007 compared to 97.8% occupied at last review. Performance has improved due to increased revenues. Moody's LTV is 88.2% compared to 108.8% at last review. The third largest conduit loan is the Anchorage Business Park and Distribution Center Loan ($19.5 million - 2.7%), which is secured by two cross-collateralized and cross-defaulted industrial/office properties located in Anchorage, Alaska. The total complex consists of 14 office buildings and three industrial buildings totaling 477,000 square feet. The overall occupancy was 96.1% as of December 2007 compared to 85.3% at last review. Moody's LTV is 53.7% compared to 56.5% at last review. ROSEWIND PROPERTY: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Rosewind Property Inc. 114 Old Country Road, Suite 544 Mineola, NY 11501 Bankruptcy Case No.: 08-73850 Chapter 11 Petition Date: July 18, 2008 Court: Eastern District of New York (Central Islip) Judge: Dorothy Eisenberg Debtor's Counsel: Sheldon M. Krupnick, Esq. 114 Old Country Road Mineola, NY 11501 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. RUSSELL BOTTOMS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Russell P. Bottoms, Jr. 254 Scottie Henson Lane Benton, KY 42025 Bankruptcy Case No.: 08-50681 Chapter 11 Petition Date: July 22, 2008 Court: Western District of Kentucky (Paducah) Judge: Thomas H. Fulton Debtor's Counsel: Mark C. Whitlow, Esq. Whitlow, Roberts, Houston & Straub, PLLC P.O. Box 995, 300 Broadway Paducah, KY 42002-0995 Tel: (270) -443-4516 Fax: (270) 443-4571 (lhuff@whitlow-law.com) Total Assets: $2,309,545 Total Debts: $1,424,174 A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/KYwb08-50681.pdf SANDISK CORP: Severe 2Q Operating Losses Cue S&P to Cut Ratings --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured ratings on Milpitas, California-based SanDisk Corp. to 'B+' from 'BB-', based on the unexpected severity of second-quarter operating losses and the company's expectation that industry conditions will worsen in the near term. Standard & Poor's also revised the outlook to negative from stable. The ratings reflect significant business risk stemming from a narrow business profile, price volatility in the NAND flash memory industry, and the substantial investment required to maintain technology and cost leadership. Substantial liquidity, stable royalty income streams, and the risk and cost-sharing benefits of the company's manufacturing joint ventures with Toshiba Corp. offset company business risks. SanDisk's market for flash-based memory cards and other consumer- oriented applications continues to expand rapidly, although growth decelerated in the June quarter. Despite the growth, excess supply of flash memory has caused annual megabyte price declines of about 60% for the last three years. The outlook on SanDisk is negative. While adequate liquidity and a good market position provide ratings support, the company's excess inventories and weakened demand will sharply depress earnings and cash flow for the near term. "If the company cannot equalize demand and supply, it is likely to continue to operate with negative discretionary cash flow," said Standard & Poor's credit analyst Lucy Patricola. If liquidity is depleted to below $2 billion over the next two to three quarters, we could lower the rating. "Once the company's operating trends return to historical averages, and leverage statistics recover to levels that are commensurate with the rating, we could revise the outlook to stable," she continued. SCOTTISH RE: A.M. Best Cuts FS Rating to C(Weak) from C(Marginal) ----------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to C- (Weak) from C+(Marginal) and issuer credit ratings to "cc" from "b-" of the primary operating insurance subsidiaries of Scottish Re Group Limited (Cayman Islands). Concurrently, A.M. Best has downgraded the ICR to "c" from "cc" and most debt ratings of Scottish Re. A.M. Best also has affirmed the remaining debt ratings of Scottish Re and Scottish Holdings Statutory Trust II and III. All ratings have been removed from under review with negative implications and assigned a negative outlook. These rating actions reflect A.M. Best's opinion that Scottish Re's financial position and liquidity have continued to deteriorate since A.M. Best's last review. The company's recently filed 10-K indicated severely strained liquidity and a further weakening in its capital position. The rating downgrades also reflect A.M. Best's concerns with the ongoing pricing, volatility, valuation and default risk in the mortgage-backed securities market, which have resulted in a substantial negative impact on Scottish Re's consolidated balance sheet. In its year-end 2007 10-K filing, Scottish Re reported significant impairments to its subprime and Alt-A asset portfolio valued at roughly $780 million, with an additional first quarter 2008 impairment estimated of about $752 million. The company indicated that a large portion of the impairment charges were in two of its three securitization structures, Ballantyne Re plc and Orkney Re II plc. While these securitization structures are without recourse to Scottish Re, they are consolidated in its financial statements under U.S. GAAP, and changes in the fair value of investments can negatively impact its reported financial results as well as the statutory reserve credit that Scottish Re (U.S.), Inc is able to recognize for these transactions. As a result of the fair value declines in the subprime and Alt-A securities, Scottish Re's statutory capital position and its ability to continue to take reserve credits for the reinsurance ceded to Ballantyne Re and Orkney Re II has been significantly reduced. At year-end 2007, reserves at Scottish Re (U.S.) Inc. were required to be strengthened by $208 million, which adversely impacted the group's liquidity position. A.M. Best notes that the recently completed sale of its life reinsurance international (U.K) segment affords additional short-term liquidity but believes that Scottish Re's liquidity position continues to be strained. A.M. Best believes Scottish Re would face significant challenges in raising additional capital or securing letters of credit at this time. While Scottish Re has documented a very comprehensive strategic plan to ensure longer-term financial flexibility, any variation from the stated timelines documented by the company may result in exhaustion of its liquidity by first quarter 2009 or sooner. This would result in a likely need for Scottish Re to file for bankruptcy protection and creates an elevated risk for insolvency. The outlook will remain negative while A.M. Best obtains further clarity on the performance of the company's subprime and Alt-A mortgage-backed portfolios and assesses the impact of the revised strategy on Scottish Re's balance sheet. In addition, A.M. Best will monitor the disposition of the company's wealth management segment, the disposition of other key life reinsurance segments and their overall impact to the financial strength of Scottish Re. A.M. Best believes that the sale of Scottish Re's North American life reinsurance segment is integral to the ability of the organization to remain as an ongoing viable entity. The FSR has been downgraded to C-(Weak) from C+(Marginal) and ICRs to "cc" from "b-" for the following primary operating subsidiaries of Scottish Re Group Limited: -- Scottish Annuity & Life Insurance Company (Cayman) Ltd. -- Scottish Re (U.S.), Inc. -- Scottish Re Life Corporation -- Orkney Re, Inc. The ICR has been downgraded to "c" from "cc" for Scottish Re Group Limited. This debt rating has been downgraded: Stingray Pass-Though Trust� -- to "c" from "b-" on $325 million 5.902% senior secured pass- through certificates, due 2012 These indicative ratings have been downgraded: Scottish Re Group Limited� -- to "c" from "cc" on senior unsecured debt -- to "c" from "cc" on subordinated debt This debt rating has been affirmed: Scottish Re Group Limited� -- "d" on $125 million non-cumulative preferred shares These indicative ratings have been affirmed: Scottish Re Group Limited� -- "c" on preferred stock Scottish Holdings Statutory Trust II and III� -- "c" on preferred securities SEDONA 2005-1: Moody's Junks Rating on $9MM Class B3-LEK Notes -------------------------------------------------------------- Moody's Investors Service downgraded this rating on Sedona 2005-1 Class B3-LEK Series 17: Class Description: $9,00,000 Class B3-LEK Secured Limited Recourse Floating Rate Credit-Linked Notes due Sept. 20, 2010 -- Prior Rating: Baa3, on review for possible downgrade -- Current Rating: Caa2 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 corporate securities. SEDONA 2005-2: Moody's Junks Ratings on Notes with A3 Prior Rating ------------------------------------------------------------------ Moody's Investors Service downgraded these notes issued by Sedona 2005-2 Series 18: -- Class Description: $4,00,000 Class A6-Fl Seceured Limited Recourse Floating Rate Credit Linked Notes due Dec. 20, 2012 -- Prior Rating: A2, on review for possible downgrade -- Current Rating: B3 -- Class Description: $20,00,000 Class A7-Fl Seceured Limited Recourse Floating Rate Credit Linked Notes due Dec. 20, 2012 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa1 -- Class Description: $3,500,000 Class A7-FCl Seceured Limited Recourse Floating Rate Credit Linked Notes due Dec. 20, 2012 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: Caa1 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 corporate securities. SEDONA 2005-1: Moody's Cuts Rating on $2MM Class A3-LK Notes ------------------------------------------------------------ Moody's Investors Service downgraded this rating on Sedona 2005-1 Class A3-LK Series 16: -- Class Description: $2,000,000 Class A3-LK Secured Limited Recourse Floating Rate Credit-Linked Notes due Sept. 20, 2010 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: B3 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 corporate securities. SEDONA 2005-1: Moody's Cuts Class A3-F Notes Rating by 9 Notches ---------------------------------------------------------------- Moody's Investors Service downgraded this rating on Sedona 2005-1 Class A3-F Series 15: Class Description: $10,000,000 Class A3-F Secured Limited Recourse Fixed Rate Credit-Linked Notes due Sept. 20, 2010 -- Prior Rating: A3, on review for possible downgrade -- Current Rating: B3 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 corporate securities. SEMGROUP LP: Court OKs Use of Cash Collateral, First Day Motions ---------------------------------------------------------------- SemGroup L.P. received approval from the U.S. Bankruptcy Court for the District of Delaware of its essential initial motions requesting relief, including authorization to use cash collateral. The use of cash collateral will enable SemGroup to utilize existing cash and cash generated through normal business operations to meet its obligations post-Chapter 11 filing, including trade payables and wages and benefits. SemGroup's bank lenders have also approved the use of cash collateral. Meanwhile, SemGroup is continuing its negotiations with lenders to secure sufficient debtor-in-possession financing. The company anticipates obtaining a DIP facility within a week of the Chapter 11 filing, which occurred on July 22, 2008. The Court also approved SemGroup's initial request for $50 million to support its Supplier Protection Program. Under the Program, certain suppliers who contractually commit to continue doing business with SemGroup, on the same terms as before the Chapter 11 filing, will be eligible to receive full payment, as due, for goods and services that were delivered before the filing, but for which the supplier has not yet been paid. In addition, the company received the following approvals to ensure business as usual during its restructuring. The ability for SemGroup to: -- manage its Supply Chain by continuing to pay trade vendors in the ordinary course of business; -- reimburse employees for business-related expenses; and -- pay certain shipping and related obligations without interruption. "The approval of these motions will provide critical relief to our employees, customers and suppliers," Terry Ronan, acting president and CEO of SemGroup, said. "They help ensure that we will be able to operate our business as usual as we undertake our reorganization to maximize value for our creditors." About SemGroup L.P. SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No.: 08- 11525) These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq. and Scott D. Talmadge, Esq. at Kaye Scholer LLP; and Laurie Selber Silverstein Esq. at Potter Anderson & Corroon LLP represent the Debtors' prepetition lenders. The Debtors' consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. SEMGROUP LP: Fitch Cuts, Withdraws Ratings After Bankruptcy Filing ------------------------------------------------------------------ Fitch Ratings has downgraded the ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. and simultaneously withdrawn all ratings. Ratings affected by this action are: These ratings are being withdrawn: SemGroup, L.P. SemCrude, L.P. SemCAMS Midstream Co. -- Issuer default Rating D Fitch Ratings has downgraded, removed from Rating Watch Negative, and simultaneously withdrawn these: SemGroup, L.P. -- Senior unsecured to 'C' from'B/RR3'. SemCrude L.P. -- Senior secured working capital facility to 'CCC' from 'BB-/RR1'; -- Senior secured revolving credit facility to 'CC' from 'B+/RR1'; -- Senior secured term loan B to 'CC' from 'B+/RR1'. SemCAMS Midstream Co. (SemCAMS) -- Senior secured working capital facility to 'CCC' from 'BB-/RR1'; -- Senior secured revolving credit facility to 'CC' from 'B+/RR1'; -- Senior secured term loan B to 'CC' from 'B+/RR1'. On July 22, 2008, SemGroup, LP and its major domestic wholly-owned subsidiaries filed a petition for bankruptcy under Chapter 11 reflecting severe liquidity strains following a spike in crude oil prices. The company is seeking buyers for its assets and does not appear likely to emerge from bankruptcy. Additional news disseminated from the company and media reports highlight large losses in trading positions which have subsequently been closed, sold, or transferred to other parties as well as previously undisclosed exposures to an affiliate of the company's co-founder and former chief executive officer. At this time, Fitch is unable to evaluate, with any precision, estimated recovery levels on the various facilities and instruments in the capital structure. Consequently, no recovery ratings are assigned. To date, the company has not obtained debtor-in-possession financing, restricting ongoing business activities and impairing realizable asset values from potential sales. Bank facility and debt instrument ratings reflect their relative ranking in the capital structure and/or their collateral position. Fitch believes recovery prospects for the SemGroup LP senior unsecured noteholders are extremely poor. A protracted bankruptcy proceeding appears likely. SemGroup is a privately held midstream energy partnership focused primarily on providing gathering, transportation, processing, and marketing services for crude oil and refined products in the U.S. Midcontinent region and Canada. Additionally, through its SemMaterials subsidiary, SemGroup stores, transport and markets asphalt and asphalt products in the United States and Mexico. SEMGROUP LP: Voluntary Ch. 11 Filing Cues Moody's to Junk Ratings ----------------------------------------------------------------- Moody's Investors Service downgraded SemGroup, L.P.'s Corporate Family Rating to Ca from Caa2, its Probability of Default Rating to D from Caa3, its senior unsecured rating to C (LGD 5; 86%) from Ca (LGD 4; 69%), and its first secured bank facilities to Caa3 (LGD 3; 38%) from B3 (LGD 2; 21%). These actions affect rated cross guaranteed debt at parent SemGroup and its subsidiaries SemCams Holding Company and SemCrude, L.P. The downgrades reflect that on July 22, 2008 SemGroup, L.P. filed, on behalf of itself and most of its subsidiaries, voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The ratings had been under review for downgrade, with the new ratings being Moody's final ratings for the company. These ratings will be withdrawn in the near future due to the bankruptcy. More specifically, the ratings affected include: At parent SemGroup, L.P.: -- Corporate Family rating: Ca -- Probability of Default Rating: D -- Guaranteed senior unsecured notes: C At wholly-owned SemCrude, L.P.: -- Senior secured working capital facility: Caa3 -- Senior secured bank revolver: Caa3 -- Senior secured term loan: Caa3 At wholly-owned SemCams Holding Company: -- Senior secured working capital facility: Caa3 -- Senior secured bank revolver: Caa3 -- Senior secured term loan: Caa3 Moody's first downgraded SemGroup's ratings on July 17, 2008 after receiving SemGroup's May 2008 consolidating financial statements on July 15, 2007. The ratings were downgraded again on July 21, 2008 to the most recent level. Subsequently, SemGroup filed for Chapter 11 bankruptcy protection. The bankruptcy filing documents brought to light additional hedging liabilities that had not been reflected in SemGroup's liability structure at the time of the July 21, 2008 downgrades, which had assumed a 35% loss for the consolidated liabilities. In light of the new information, the expected consolidated loss was increased to 50%. The large majority of the firm's assets include accounts receivable, inventories, cash margin deposits, and balance sheet cash, with a minority of assets being in the fixed asset category. The fixed assets consist of logistical assets that support the movement of crude oil and refined products from point of production to consuming regions. SemGroup, L.P. is headquartered in Tulsa, Oklahoma. SEMGROUP LP: Bankruptcy Filing Cues Fitch to Put Default Ratings ---------------------------------------------------------------- Fitch Ratings has lowered the Issuer Default Ratings of SemGroup, L.P., SemCrude L.P, and SemCAMS Midstream Co. to 'D' following the bankruptcy petition by SemGroup and most of units on July 22, 2008. These ratings are removed from Rating Watch where they were placed on July 17, 2008. The bank facility and securities ratings of SemGroup and units remain on Rating Watch Negative pending a review of the bankruptcy court petition. Ratings affected by this action are: SemGroup, L.P. SemCrude, L.P. SemCAMS Midstream Co. -- IDR lowered to 'D' from 'B-'. Ratings remaining on Rating Watch Negative SemGroup, L.P. -- Senior unsecured 'B/RR3'. SemCrude L.P. -- Senior secured working capital facility 'BB-/RR1'; -- Senior secured revolving credit facility 'B+/RR1'; -- Senior secured term loan B 'B+/RR1'. SemCAMS Midstream Co. (SemCAMS) -- Senior secured working capital facility 'BB-/RR1'; -- Senior secured revolving credit facility 'B+/RR1'; -- Senior secured term loan B 'B+/RR1'. SemGroup is a privately held midstream energy partnership focused primarily on providing gathering, transportation, processing, and marketing services for crude oil and refined products in the U.S. Midcontinent region and Canada. SemGroup Energy Partners, L.P., a publicly traded Master Limited Partnership affiliate, was not included in the bankruptcy petition and is not rated by Fitch. SERVICEMASTER CO: Moody's Assigns B3 Rating to $1.15BB Notes ------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to the $1.15 billion of senior toggle notes due 2015 of The ServiceMaster Company and affirmed the B2 Corporate Family Rating. The rating outlook is stable. In July 2007, ServiceMaster was acquired by an investment group led by Clayton, Dubilier & Rice, Inc. (CD&R) for a total enterprise value of approximately $5.2 billion, including the assumption of existing debt and related fees and expenses. The leveraged buyout financing package included a $2.65 billion senior secured term loan, a $1.15 billion senior unsecured bridge facility and an equity contribution of approximately $1.43 billion. The terms of the $1.15 billion bridge facility provided that if the facility was not refinanced within 365 days after the closing of the buyout, outstanding bridge loans will convert into senior notes. In July 2008, the $1.15 billion senior unsecured bridge facility converted into 10.75%/11.50% Senior Toggle Notes due 2015 in an equivalent aggregate principal amount. ServiceMaster's B2 Corporate Family Rating is constrained by weak financial strength metrics, a challenging environment for consumer spending, continued weakness in the residential real estate market and cost pressures from rising petroleum and health care costs. The ratings are supported by the company's leading market positions and brands in large end-markets, favorable geographic and service line diversification, moderate profitability improvements and good liquidity. Adjusted EBITDA improved during 2007 and the first quarter of 2008 as cost cutting, efficiency and customer retention initiatives as well as improved pricing offset pressure from declining new account growth and rising input costs. Moody's took this rating actions: -- Assigned $1.15 billion 10.75%/11.50% Senior Toggle Notes due 2015, B3 (LGD 5, 73%) -- Withdrew $1.15 billion senior unsecured interim term loan facility, B3 (LGD 5, 73%) -- Affirmed $2.65 billion senior secured term loan B due 2014, B1 (LGD 3, 34%) -- Affirmed $500 million senior secured revolving credit facility due 2013, B1 (LGD 3, 34%) -- Affirmed $150 million senior secured synthetic letter of credit facility due 2014, B1 (LGD 3, 34%) -- Affirmed $80 million senior unsecured notes due 2018, Caa1(LGD 6, 95%) -- Affirmed $195 million senior unsecured notes due 2027, Caa1(LGD 6, 95%) -- Affirmed $83 million senior unsecured notes due 2038, to Caa1(LGD 6, 95%) -- Affirmed Corporate Family Rating, B2 -- Affirmed Probability of Default Rating, B2 -- Affirmed Speculative Grade Liquidity Rating, SGL-2 Headquartered in Memphis, The ServiceMaster Company is a leading provider of outsourcing services to residential and commercial customers, primarily in the United States. Its services include lawn care, landscape maintenance, termite and pest control, home warranty, disaster response and reconstruction, cleaning and disaster restoration, house cleaning, furniture repair, and home inspection. For the 12 months ended March 31, 2008, the company reported revenue of approximately $3.3 billion. SHEFFIELD CDO II: Moody's Junks Rating on Class C Notes Due 2051 ---------------------------------------------------------------- Moody's Investors Service downgraded rating on this note issued by Sheffield CDO II, Ltd. -- Class Description: $19,500,000 Class C Deferrable Interest Secured Floating Rate Notes due 2051 -- Prior Rating: B3, on review for possible downgrade -- Current Rating: Ca 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. SHORELAND DEVELOPMENT: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Shoreland Development, LLC P.O. Box 1052 Portland, ME 04104 Tel: (207) 780-9994 Bankruptcy Case No.: 08-20844 Related Information: Bruce K. Brown, III, managing member, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 21, 2008 Court: Maine (Portland) Debtor's Counsel: D. Sam Anderson, Esq. (sanderson@bernsteinshur.com) Bernstein Shur Sawyer & Nelson 100 Middle St., West Tower Portland, ME 04101 Tel: (207) 774-1200 Fax: (207) 774-1127 Estimated Assets: $1 million to $10 million Estimted Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/MEb08-20844.pdf STEVE & BARRY'S: Sears, GAP Interested in Buying Assets, WSJ Says ----------------------------------------------------------------- Steve & Barry's, LLC, and its debtor-affiliates did not disclose potential buyers for all or substantially all of its assets in papers filed to the United States Bankruptcy Court for the Southern District of New York. However, The Wall Street Journal reported that Sears Holding Corp. and Gap Inc. have expressed interest in the Debtors, or at least some of its brands. "Steve & Barry's has discussed the sale of its operations with [Sears and Gap], but no deal has been made," reports Vicki M. Young of Footwear News. The company is continuing to talk with potential suitors, says newsday.com. Celebrity License Battle Could Ensue According to Ms. Young, a liquidation of the Debtors could initiate some high-profile jousting over the company's celebrity licenses, including Sarah Jessica Parker's "Bitten." "Most license agreements contain a bankruptcy clause in the contract that allows the licensor to opt out of the agreement if there is a bankruptcy filing," said Mort Gordon, a licensing agent and principal in TGL Licensing and MG Enterprises, says the report. "If that right isn't exercised, the license is typically treated as an asset for the benefit of creditors." But Lawrence Gottlieb, chair of the bankruptcy restructuring practice at the law firm of Cooley Godward Kronish, said, bankruptcy courts, in general, have ruled the opt-out clauses to be unenforceable and treat licenses as assets of the estate. Alan Behr, a partner at Alston & Bird specializing in intellectual property, said, "The licensor can try to make an issue if it is not satisfied with the proposed substitute licensee. They can claim it is hard to get the right licensee, as well as hardship to the brand if the wrong one is given the license." Aside from its license agreement with Ms. Parker, the Debtors have celebrity and media licensing arrangements with Amanda Bynes, Venus Williams and CBS Consumer Products. WSJ said the licensing payments cut into the company's profit margins. Headquartered in Port Washington, New York, Steve and Barry LLC -- http://www.steveandbarrys.com/-- is a national casual apparel retailer that offers high quality merchandise at low prices for men, women and children. Founded in 1985, the company operates 276 anchor and junior anchor shopping center and mall-based locations throughout the U.S. At STEVE & BARRY'S (R) stores, shoppers will find brands they can't find anywhere else, including the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with NBA (R) star Stephon Marbury. Steve & Barry's, LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, it listed $693,492,000 in total assets and $638,086,000 in total debts. (Steve & Barry's Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SPRINT NEXTEL: Selling Towers to TowerCo LLC for $670 Million Cash ------------------------------------------------------------------ Sprint Nextel disclosed an agreement to sell approximately 3,300 towers to TowerCo LLC for approximately $670 million in cash. The Wall Street Journal stated that Sprint will use the proceeds of the sale to pay down some of its $24 billion in debt. In a press statement, Sprint indicated that it has also entered into a long term leasing agreement where TowerCo will provide Sprint Nextel with wireless communications towers to support the company's CDMA, iDEN and WiMAX networks. "By leasing rather than owning these network facilities, we can better focus on our core business of providing communications services to consumers, businesses and government customers," said Bob Azzi, senior vice president, Field Engineering and Operations, Sprint Nextel. "Significantly, this transaction provides Sprint Nextel with additional liquidity which gives us greater flexibility in managing our company." "These are great towers concentrated in large metropolitan markets throughout the U.S. and will benefit as wireless communications continue to grow," said Richard Byrne, TowerCo's CEO. The specific number of towers and final purchase price will be determined at closing. The transaction, subject to customary closing conditions, is expected to close in 90 days. The company stated that equity financing for this transaction will be provided by Tailwind Capital, Soros Strategic Partners II LP, Stone Tower Equity Partners and Vulcan Capital. In this transaction, Sprint Nextel was advised by Wachovia Capital Markets LLC, Citi and the law firm of Jones Day. TowerCo was advised by UBS Investment Bank and the law firm of Paul Weiss Rifkind, Wharton and Garrison LLP. The Journal, citing people familiar with the situation, said that Sprint is also considering other alternatives such as a sale or spinoff of its Nextel unit, but hasn't determined whether to pursue the plan or not. WSJ, citing Stifel Nicolaus analyst Chris King, stressed that Sprint is looking at all of its assets and if something is deemed nonstrategic, it's on the short list for Sprint at this point. About TowerCo LLC Headquartered in based in Cary, North CArolina, TowerCo LLC -- http://www.towerco.com/-- was founded in 2004 by Tailwind Capital and industry veterans Richard Byrne, chief executive officer, and Scot Lloyd, chief operating officer, to meet the infrastructure needs of wireless service providers by developing, owning and leasing communication towers. Soros Strategic Partners invested in TowerCo in December 2005. TowerCo has exclusive contracts to build towers directly for carriers throughout the U.S. About Sprint Nextel Sprint Nextel Corp. -- http://www.sprint.com/-- offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two robust wireless networks serving about 54 million customers at the end of the fourth quarter 2007; industry-leading mobile data services; instant national and international walkie- talkie capabilities; and a global Tier 1 Internet backbone. * * * As reported in the Troubled Company Reporter on May 2, 2008, Standard & Poor's Rating Services lowered its corporate credit and senior unsecured ratings on Sprint Nextel Corp. to 'BB' from 'BBB-' and removed the ratings from CreditWatch with negative implications. The outlook is stable. STEVE & BARRY'S: Trustee Appoints Unsecured Creditors Committee --------------------------------------------------------------- Diana G. Adams, United States Trustee for Region 2, has appointed these seven members to the Official Committee of Unsecured Creditors of the Chapter 11 cases of Steve & Barry's, LLC, and its debtor-affiliates: (1) Simon Property Group, Inc. 225 West Washington St. Indianapolis, Indiana Attn: Ronald M. Tucker (312) 263-2346 (2) General Growth Properties, Inc. 110 N. Wacker Drive Chicago, Illinois Attn: Julie Minnick Bowden (312) 960-2707 (3) Texport Syndicate (India) Ltd. Plot No. 6, F-11/12 Western Ind. Co-Op Estate OPP. Speez, M.I.D.C. Andheri (E), Mumbai-400 093, India Attn: Anuj Goenka 91-22-30809500 (4) JJ Garment Room 801, No. 251 Xiaomuqiao Rd. Shanghai, China, PRC Attn: Joanna Wu 00-86-13817833271 (5) AGI Logistics Corporation World Headquarters 230-59 International Airport Ctr Blvd. Jamaica, New York Attn: Scott Ornstein, COO (718) 528-1200 (6) Gildan Active SRL Gildan House, #34 Warrens Industrial Park Warrens, St. Michael 22026, Barbados Attn: Gilles Leger (246) 367-4015 (7) American Express 200 Vessry St. New York, New York Attn: James Salvato (212) 640-7240 Headquartered in Port Washington, New York, Steve and Barry LLC -- http://www.steveandbarrys.com/-- is a national casual apparel retailer that offers high quality merchandise at low prices for men, women and children. Founded in 1985, the company operates 276 anchor and junior anchor shopping center and mall-based locations throughout the U.S. At STEVE & BARRY'S (R) stores, shoppers will find brands they can't find anywhere else, including the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with NBA (R) star Stephon Marbury. Steve & Barry's, LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, it listed $693,492,000 in total assets and $638,086,000 in total debts. (Steve & Barry's Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SUMMA LLC: Chapter 11 Case Summary and Largest Unsecured Creditor ----------------------------------------------------------------- Debtor: Summa, LLC 251 South Union Springfield, MO 65802 Bankruptcy Case No.: 08-61351 Related Information: Larry Welbern, manager and member, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 23, 2008 Court: Western District of Missouri (Springfield) Debtor's Counsel: M. Brent Hendrix, Esq. (brenthendrix@sbcglobal.net) P.O. Box 3373 Springfield, MO 65808 Tel: (417) 889-8820 Fax: (417) 889-3493 Estimated Assets: $0 to $50,000 Estimted Debts: $1 million to $10 million List of the Debtor's Largest Unsecured Creditor: Creditor Nature of Claim Claim Amount -------- --------------- ------------ Village Bank unliquidated $1,400,000 2360 E. Sunshine Springfield, MO 65804 TEMPLE BETH: Case Summary & 11 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Temple Beth Haverim 29900 Ladyface Court Agoura Hills, CA 91301 Bankruptcy Case No.: 08-15138 Type of Business: The Debtor is a conservative synagogue pledged to serving the spiritual, cultural, educational and social needs of its congregation and the community. See http://www.templebethhaverim.org/ Chapter 11 Petition Date: July 22, 2008 Court: Central District Of California (San Fernando Valley) Judge: Kathleen Thompson Debtor's Counsel: Craig M Rankin, Esq. Email: cmr@lnbrb.com 10250 Constellation Blvd., Suite 1700 Los Angeles, CA 90067 Total Assets: $4,651,525 Total Debts: $7,429,885 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/cacb08-15138.pdf TOLLIVER SWALLOW: Case Summary & Seven Largest Unsecured Creditors ------------------------------------------------------------------ Debtors: Tolliver Gene Swallow aka T.G. Swallow aka Tolly Swallow Sharon A. Swallow 1230 Red Ash Lane Boulder, CO 80303 Bankruptcy Case No.: 08-20641 Chapter 11 Petition Date: July 22, 2008 Court: District of Colorado (Denver) Judge: Howard R. Tallman Debtors' Counsel: Jeffrey Weinman, Esq. Email: jweinman@epitrustee.com 730 17th Street, Suite 240 Denver, CO 80202 Tel: (303) 572-1010 Estimated Assets: $1 million to $10 million Estimated Debts: $50,000 to $100,000 A list of the Debtors' seven largest unsecured creditors is available for free at: http://bankrupt.com/misc/cob08-20641.pdf TOUSA INC: Wants Court to Pool Appeals on Cash Collateral Order --------------------------------------------------------------- TOUSA Inc. and its debtor-affiliates ask the U.S. Bankruptcy Court for the Southern District of Florida to consolidate the appeals of Wells Fargo Bank N.A., and the Noteholders pursuant to Rule 7042 of the Federal Rules of Bankruptcy Procedure and Rule 42(a) of the Federal Rules of Civil Procedure. As reported in the Troubled Company Reporter on July 21, 2008, Wells Fargo Bank N.A., and certain noteholders took an appeal to the Court from Judge Olson's June 20, 2008, approval of a stipulated Final Cash Collateral Order. Aurelius Capital Master Ltd., Aurelius Capital Partners LP, GSO Special Situations Fund L.P., GSO Special Situations Overseas Master Fund Ltd., GSO Credit Opportunities Fund (Helios) L.P., and Carlyle Strategic Partner, filed with the Court their list of designated of items for inclusion in the record of appeal on July 18, 2008. Wells Fargo Bank, N.A., filed its own designation of items for appeal on July 21. The Designated Items List were in compliance with the Bankruptcy Court's directive. The Debtors maintain that the Appeals arise from the same contested matter -- the Cash Collateral Order and the Appellants' objections. The Debtors believe that keeping the Appeals separate will unnecessarily duplicate the appellate proceedings, increase costs and reduce efficiency for them, the Court, and other parties-in-interest. Paul Steven Singerman, Esq., at Berger Singerman, P.A., in Miami, Florida contends that the Designation of Items for Appeal and the Statement of Issues to be presented on appeal filed by the Appellants with the Bankruptcy Clerk are similar, and the resolution of the Appeals involves considerations and determinations of similar underlying issues. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA designs, builds, and markets high-quality detached single-family residences, town homes, and condominiums to a diverse group of homebuyers, such as "first-time" homebuyers, "move-up" homebuyers, homebuyers who are relocating to a new city or state, buyers of second or vacation homes, active-adult homebuyers, and homebuyers with grown children who want a smaller home. It also provides financial services to its homebuyers and to others through its subsidiaries, Preferred Home Mortgage Company and Universal Land Title Inc. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No.: 08-10928). The Debtors have selected M. Natasha Labovitz, Esq., Brian S. Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at Kirkland & Ellis LLP and Paul Steven Singerman, Esq., at Berger Singerman to represent them in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker and financial advisor. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. The Official Committee of Unsecured Creditors hired Patricia A. Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff & Sitterson, P.A., as its local counsel. TOUSA Inc.'s financial condition as of Sept. 30, 2007, showed total assets of $2,276,567,000 and total debts of $1,767,589,000. Its consolidated detailed balance sheet as of Feb. 29, 2008 showed total assets of $1,961,669,000 and total liabilities of $2,278,106,000. TOUSA's Exclusive Plan Filing Period expires October 25, 2008. (TOUSA Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TRIPLE S: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Triple S Forest Products Inc. 9416 Il Route 125 Beardstown, IL 62618 Bankruptcy Case No.: 08-71757 Type of Business: The Debtor is in the manufacturing and industrial supplies business. Chapter 11 Petition Date: July 22, 2008 Court: Central District of Illinois (Springfield) Judge: Mary P. Gorman Debtor's Counsel: Michael J. Logan, Esq. Email: mikeloganlaw@netzero.net 837 S. Fourth Street Springfield, IL 62703 Tel: (217) 522-8880 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. TRITON AVIATION: Fitch Keeps 'C/DR6' Ratings on Four Note Classes ----------------------------------------------------------------- Fitch Ratings has affirmed Triton Aviation Finance as: -- Class A-1 notes affirmed at 'BB-'; -- Class B-1 notes remain at 'C/DR6'; -- Class B-2 notes remain at 'C/DR6'; -- Class C-1 notes remain at 'C/DR6'; -- Class C-2 notes remain at 'C/DR6'. Fitch's analysis incorporated expected cash flow to be available to the trust over the remaining life of the transaction. This expectation is based on several factors including aircraft age, current portfolio value, potential lease rates, and perceived liquidity of the portfolio. Lease rate and portfolio value expectations have been updated to reflect Fitch's views on certain aircraft given the aviation market volatility and significantly elevated fuel prices. Triton was affirmed as it was found to have credit support consistent with its current ratings. TULLY'S COFFEE: Says 10-K Filing with the SEC Will be Delayed ------------------------------------------------------------- Tully's Coffee Corp. disclosed in a regulatory filing with the U.S. Securities and Exchange Commision that the company's annual report on Form 10-K could not be filed within the prescribed time period because information necessary for the filing of a complete and accurate report could not be gathered without unreasonable effort and expense. About Tully's Coffee Headquartered in Seattle, Tully's Coffee Corporation -- http://www.tullys.com/-- is a specialty retailer and wholesaler of fully handcrafted roasted, gourmet coffees. * * * As reported in the Troubled Company Reporter on April 29, 2008, Tully's Coffee Corp.'s consolidated balance sheet at Dec. 30, 2007, showed $19.3 million in total assets, and $29.6 million in total liabilities, resulting in a $10.3 million stockholders' deficit. US XPRESS: Moody's Cuts Ratings to B3 with Negative Outlook ----------------------------------------------------------- Moody's Investors Service downgraded the corporate family and probability of default ratings of U.S. Xpress Enterprises Inc. to B3 from B2 and changed the ratings outlook to negative from stable. The downgrades reflect a lower margin level than was originally expected when the company completed its going-private transaction in September 2007. The downgrades also reflect a reduced amount of liquidity than was anticipated when the B2 corporate family and probability of default ratings were assigned. Driving the margin under performance has been elevated fuel prices and higher purchased transportation expense, and driving the reduced liquidity level has been increased accounts receivables, due to rising fuel prices. The negative outlook reflects Moody's view that the U.S. economy will remain soft and fuel prices will continue to increase, albeit at a more moderated pace, in the second half of 2008, raising the risk that margins will remain pressured and that working capital increases will continue to be a drag on liquidity. Additionally, in the fourth quarter of 2008, the company's bank credit facility maximum leverage covenant ratio test level steps down to 4.5 times from 5.0 times; depending on the second half of 2008 performance, the amount of headroom under the maximum leverage ratio test could be tight. Should fuel price increases mitigate and prospective ability to comply with bank facility covenant tests improve, the negative outlook could stabilize. Conversely, should the amount of available liquidity materially diminish or the likelihood of a credit facility covenant breach grow, the ratings could be downgraded further. In addition to the aforementioned, these ratings changes have occurred: -- $50 million senior secured revolving credit facility due October 2012 to B2 LGD 3, 43% from B1 LGD 3, 43% -- $170 million senior secured term loan due October 2014 to B2 LGD 3, 43% from B1 LGD 3, 43% Headquartered in Chattanooga, Tennessee, U.S. Xpress Enterprises Inc., a Nevada Corporation, provides truckload transportation services in North America, including line-haul, dedicated and inter-modal freight services. The company had 2007 revenues of approximately $1.6 billion. UAL CORP: United Agrees with IAM on Voluntary Early Out Program --------------------------------------------------------------- UAL Corporation's unit, United Airlines Inc., and the International Association of Machinists (IAM) have come to an agreement on an opportunity for eligible customer service and ramp employees to voluntarily separate from the company. The program will be available for up to 400 customer service and ramp employees. Employees who are at least 45 years old and have at least 15 years of service with the company as of September 7, 2008 will be eligible to participate. Participants will be entitled to severance payments based on years of service and retiree travel benefits. "As we move forward with our previously announced capacity reductions, this agreement with the IAM will assist us in mitigating the impact of involuntary furloughs on our IAM employees," said Scott Dolan, senior vice president � Airport Operations and Cargo for United. United will continue to explore viable alternatives to furloughs as a result of capacity reductions with all unions representing its employees. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 161; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * The Troubled Company Reporter said on June 2, 2008, that Fitch Ratings has revised the Rating Outlook for UAL Corp. and its principal operating subsidiary United Airlines, Inc. to Negative from Stable. Debt ratings for both entities have been affirmed as: UAL & United Issuer Default Ratings at 'B-'; United's secured bank credit facility (Term Loan and Revolving Credit Facility) at 'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'. The TCR said on July 22, 2008, that Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of UAL Corp. (United) to Caa1 from B2, the secured bank debt rating to B3 from B1 and certain tranches of the Enhanced Equipment Trust Certificates (EETC) of United Airlines, Inc. (United Airlines). Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment. The rating outlook is negative. UAL CORP: JPMorgan Analyst Sees Disclosure of $1 Billion Cash Call ------------------------------------------------------------------ Jim Baker, an analyst for J.P. Morgan Securities, disclosed on July 18, 2008, that there were anticipated "significant" capital disclosures from UAL Corp., for as much as $1,000,000,000. UAL was expected to disclose a $1,000,000,000 "cash call", in the form of a large debt offering or emergency funding from banks to follow similar borrowings made by its competitors -- American Airlines, Airtran, Continental Airlines, JetBlue and Southwest Airlines, the Observer reports. "We have identified the need for United to do the same, the only question appears to be timing and magnitude,' Mr. Baker said. UAL, Chase Renew Credit Card Accord UAL released its second quarter 2008 financial results on July 22, and simultaneously, issued a press statement disclosing that it reached an agreement in principle with its Mileage Plus co-branded bank card partner, Chase Bank U.S.A., N.A., and Paymentech, L.L.C., to extend the term of their corresponding agreements. Paymentech is a subsidiary of Chase Paymentech Solutions, L.L.C. -- a joint venture that includes an affiliate of JPMorgan. As part of the transaction, United Air Lines, Inc. will receive a payment of $600 million from Chase Bank, which relates to the advance purchase of frequent flyer miles and the extension of the contract. The company also expects this transaction will improve cash flow by about $200 million in the next two years. In addition, the level of reserve or holdback that United is required to maintain under its credit card processing agreement with Chase and Paymentech has been reduced to $25 million. This reduction will result in the release of about $350 million in previously restricted cash. As a result of its agreement with Chase Bank, United expects to increase its cash position by approximately $1.2 billion, including $1 billion in the short term and an additional $200 million over the next two years. Combined with the previously announced approximately $550 million raised from new transactions in the second and third quarters, the company will have increased its total cash balance by $1.7 billion and continues to have more than $3 billion in unencumbered hard assets. "We got what we needed out of that contract," Frederic Brace, UAL's chief financial officer told Bloomberg. "We got a higher price per mile. That was important to us, and the liquidity." "We are very excited to renew our successful relationship with United Airlines, offering consumers and small businesses compelling travel rewards for many years to come," Bloomberg quotes Steve Fox, general manager of Chase Card Services, as saying. "This agreement will deepen and strengthen our relationship with regarding marketing and product offerings, enhancing the overall program." UAL, which posted a $2.73 billion net loss for the second quarter, originally entered into the credit card agreement with Chase Bank and Paymentech in October 2005. Chase Bank has exclusive rights in the United States to issue credit cards that accumulate frequent flyer miles under the loyalty program Mileage Plus. Chase Bank buys Mileage Plus miles from United. The miles are transferred to cardholders' Mileage Plus accounts when purchases are made using the cardholders' Chase Bank/United credit cards. Although the Credit Card Accord between the parties expired in 2007, United had been negotiating with Chase Bank to extend the agreement through 2012. Under its Plan of Reorganization, United grants Chase a lien upon, and security interest in, their assets. The security interest constitutes a "silent lien", and secures United's payment obligation to Chase Bank to repurchase the pre-purchased miles. As widely reported, U.S. airlines have been subscribing to different measures in their attempt to cope with escalating fuel prices, including implementing massive job cuts and drastic fleet reductions. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 162; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * The Troubled Company Reporter said on June 2, 2008, that Fitch Ratings has revised the Rating Outlook for UAL Corp. and its principal operating subsidiary United Airlines, Inc. to Negative from Stable. Debt ratings for both entities have been affirmed as: UAL & United Issuer Default Ratings at 'B-'; United's secured bank credit facility (Term Loan and Revolving Credit Facility) at 'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'. The TCR said on July 22, 2008, that Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of UAL Corp. (United) to Caa1 from B2, the secured bank debt rating to B3 from B1 and certain tranches of the Enhanced Equipment Trust Certificates (EETC) of United Airlines, Inc. (United Airlines). Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment. The rating outlook is negative. UAL CORP: Faces Illegal Profiting Charges by Immigrant Workers -------------------------------------------------------------- The Chicago Working Hands Legal Clinic on behalf of immigrant workers at O'Hare Airport, commenced a lawsuit against United Airlines for alleged illegal profiting from wholesale violations of state and federal law, Doug Cunningham of DemocracticUnderground.Com reports. "The companies profited from illegal exploitation of the workers by use of the temporary agency Ideal Staffing Solutions to bring workers in," Jed Untereker, Esq., states in an interview with the independent workers news. He asserts that the lawsuit sends a message to all employees that they have obligations even to temporary workers. Among the parties included in the lawsuit are Alitalia and Singapore Airlines. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News, Issue No. 162; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) * * * The Troubled Company Reporter said on June 2, 2008, that Fitch Ratings has revised the Rating Outlook for UAL Corp. and its principal operating subsidiary United Airlines, Inc. to Negative from Stable. Debt ratings for both entities have been affirmed as: UAL & United Issuer Default Ratings at 'B-'; United's secured bank credit facility (Term Loan and Revolving Credit Facility) at 'BB-/RR1'; and Senior unsecured rating for United at 'CCC/RR6'. The TCR said on July 22, 2008, that Moody's Investors Service lowered the Corporate Family and Probability of Default ratings of UAL Corp. (United) to Caa1 from B2, the secured bank debt rating to B3 from B1 and certain tranches of the Enhanced Equipment Trust Certificates (EETC) of United Airlines, Inc. (United Airlines). Moody's affirmed the SGL-3 Speculative Grade Liquidity Assessment. The rating outlook is negative. UNIBLEND MANUFACTURING: Case Summary & 20 Largest Unsec. Creditors ------------------------------------------------------------------ Debtor: Uniblend Manufacturing Corp. P.O. Box 1589 Guayama, PR 00785 Bankruptcy Case No.: 08-04745 Type of Business: The Debtor manufactures degreasers, coolants, car wash and protectant products. Chapter 11 Petition Date: July 23, 2008 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Alexis Fuentes Hernandez, Esq. (afuentes1@msn.com) P.O. Box 9022726 San Juan, PR 00902-2726 Tel: (787) 607-3436 Total Assets: $816,109 Total Debts: $1,913,454 A copy of Uniblend Manufacturing Corp.'s petition is available for free at: http://bankrupt.com/misc/prb08-04745.pdf VERASUN ENERGY: S&P's Rating Unaffected by Ethanol Plant Start-Up ----------------------------------------------------------------- Standard & Poor's Ratings Services said that the July 22 announcement of the start-up for VeraSun Energy Corp.'s 110 million gallon dry mill ethanol plant in Hankinson, North Dakota. will not immediately affect the company's 'B+' corporate credit rating. The rating remains on CreditWatch with negative implications. Due to the project-level financing of the Hankinson facility and the financial restrictions in place (100% cash sweep capped at $5 million per year and a 1.25x fixed-charge coverage covenant), the start-up of the facility at recent crush spreads does not represent any significant cash flow to VeraSun. The U.S. Dept. of Agriculture's estimate of the corn harvest for 2008 reflected minimal damage from the Midwest floods. The National Agricultural Statistics Service reported survey results from farmers expecting to harvest 79 million acres of corn from 86 million planted acres, preserving a 92% ratio similar to that of 2007 (though absolute volume has declined slightly). Partly in response, corn prices on the Chicago Board of Trade spot market have declined to $5 levels from more than $7 in June. Both of these factors alleviate short-term concerns on VeraSun's liquidity. At current interest rates, for example, a $1 per gallon spread sustained across 2009 could allow roughly $200 million in distributions from the acquired US Bioenergy plants. (The average crush spread for 2007 was $1.126 per gallon, and year-to-date 2008 has been $0.911 per gallon.) However, although crush spreads have improved from mid-June lows of roughly 60 cents per gallon to $1.36 in late July, we feel VeraSun still faces challenges of volatile commodity prices, increased political resistance to the ethanol industry, and continued delays in the start-up (Welcome, Minnesota and Hartley, Iowa) and construction (Reynolds, Indiana) of the facilities that were partly debt-financed at the corporate level. S&P view the increasing demand on corn resulting from the escalating ethanol mandate as a contributor to continued volatility in the corn market moving forward. "If crush spreads do not increase in amounts sufficient to allow start-up of the remaining two facilities, or VeraSun remains heavily exposed to markets that remain volatile, we may lower the ratings," said Standard & Poor's credit analyst Justin Martin. Conversely, a sustained improvement in crush spreads would allow rapid amortization of debt at the facilities acquired from ASAlliances and distributions to VeraSun from the acquired US Bioenergy facilities (after the $5 million prepayment at each of these acquired plants). VERENIUM CORP: Receives $40MM Grant to Develop Small-Scale Plant ---------------------------------------------------------------- Verenium Corporation disclosed that it has been awarded a grant from the U.S. Department of Energy under a $40 million program to support the development of small-scale cellulosic ethanol biorefinery plants. The company will now begin discussions with DOE to determine the amount of the award. Demonstration-scale facilities are a critical development step to scaling and validating cellulosic technology as the industry advances toward the commercialization of next-generation ethanol. Verenium said it is one of two companies that were selected for this round of DOE grants and will utilize the funds to support ongoing activities at its 1.4 million gallon per year demonstration-scale facility in Jennings, La. The grant was announced today by the Department of Energy. "This award supports a very important phase of our growth as we seek to validate cost and performance goals in our demonstration plant that will allow us to move to commercial scale. We are very pleased with this award, and with our continued progress on corporate partnership discussions. Both of these initiatives will help to accelerate our overall biofuels business, and we look forward to providing further updates as these important programs advance," said Carlos A. Riva, president and chief executive officer at Verenium. "Government support such as this is a great help in advancing the development of commercially viable biofuels, and supports the rapidly emerging cellulosic ethanol industry in addressing America's urgent need for alternative fuels." Cellulosic ethanol is a renewable fuel source produced from natural, plant waste products such as rice straw, sugarcane waste (bagasse), switchgrass and wood chips. About Verenium Corp. Based in Cambridge, Massachusetts, Verenium Corporation (Nasdaq: VRNM) -- http://www.verenium.com/-- is engaged in the development and commercialization of next-generation cellulosic ethanol, an environmentally-friendly and renewable transportation fuel, as well as high-performance specialty enzymes for applications within the alternative fuels, specialty industrial processes, and animal nutrition and health markets. At March 31, 2008, the company's consolidated balance sheet showed $296.5 million in total assets, $203.4 million in total liabilities, and $93.1 milion in total stockholders' equity. Going Concern/Possible Bankruptcy As reported in the Troubled Company Reporter on April 1, 2008, Ernst & Young LLP, in San diego, expressed substantial doubt about Verenium Corporation's ability to continue as a going concern after auditing the company's consolidated financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's recurring operating losses and accumulated deficit of $437.1 million at Dec. 31, 2007. Based on the company's operating plan, its existing working capital is not sufficient to meet the cash requirements to fund the company's planned operating expenses, capital expenditures, and working capital requirements through Dec. 31, 2008, without additional sources of cash or the deferral, reduction or elimination of significant planned expenditures. The company's plan to address the expected shortfall of working capital is to generate additional financing through a combination of corporate partnerships and collaborations, federal and state grant funding, incremental product sales, selling or financing assets, and, if necessary and available, the sale of equity or debt securities. If the company is unsuccessful in raising additional capital from any of these sources, it will defer, reduce, or eliminate certain planned expenditures. The company said it will continue to consider other financing alternatives including but not limited to, a divesture of all or part of its business. If the company cannot obtain sufficient additional financing in the short-term, it may be forced to restructure or significantly curtail its operations, file for bankruptcy or cease operations. VILLA CORTEZ: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Villa Cortez Apartments, LLC aka Villa Cortez aka Casa Cortez 625 East Tennessee Street, Suite 200 Tallahassee, FL 32308 Bankruptcy Case No.: 08-40504 Debtor-affiliates filing separate Chapter 11 petitions on March 2, 2008, and cases presided over by Judge Lewis M. Killian, Jr., of the Florida Northern Bankruptcy Court: Entity Case No. ------ -------- Boothco High Park, LLC 08-40129 DBS Holdings, LLC 08-40128 Osceola Ridge, LLC 08-40127 Related Information: Hurley H. Booth, Jr., manager, filed the petition on the Debtor's behalf. Chapter 11 Petition Date: July 21, 2008 Court: Northern District of Florida (Tallahassee) Debtor's Counsel: C. Edwin Rude, Jr. C. Edwin Rude, Jr. Attorney at Law 211 East Call Street Tallahassee, FL 32301-7607 Tel: (850) 222-2311 Fax: (850) 222-2120 (edrudelaw@earthlink.net) Estimated Assets: $1 million to $10 million Estimted Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/FLnb08-40504.pdf VONAGE HOLDINGS: Secures $215MM Debt Financing from Silver Point ---------------------------------------------------------------- Vonage Holdings Corp. entered into a commitment letter with Silver Point Finance LLC establishing the terms and conditions for up to $215 million in private debt financing of which Silver Point has committed to provide $125 million. The availability of the Silver Point financing is subject to the negotiation and execution of definitive documentation and the satisfaction of certain conditions including certain other lenders committing to provide $60 million of the private debt financing. If these conditions are met, an initial closing for between $185 million and $215 million of amounts under the financing is expected to occur in the third quarter of 2008. The company intends to use the net proceeds from the financing, plus cash on hand, to repurchase its existing convertible notes in a tender offer, which the company is required to commence promptly. The existing convertible notes can be put to the company on Dec. 16, 2008, and have a principal amount outstanding of approximately $253 million. "Refinancing our existing debt has been a key priority for the company, John S. Rego, executive vice president and chief financial officer, said. "We believe this new financing will provide Vonage with the solid financial foundation to continue to grow our business profitably." Miller Buckfire & Co. LLC and Shearman & Sterling LLP are acting as financial and legal advisors to the company and Paul Weiss Rifkind, Wharton & Garrison LLP is acting as legal advisor to Silver Point in connection with this transaction. New CEO The Wall Street Journal reported that Vonage Holdings will name a new chief executive early as next week. According to WSJ, Jeffrey Citron, Vonage's chairman and interim CEO, plans to let someone else manage Vonage's day-to-day operations, though he will remain involved with the company. About Vonage Holdings Corp. Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with nearly 2.6 million subscriber lines. The company's Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and features like call waiting, call forwarding and voicemail for a flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. Going Concern Doubt BDO Seidman, LLP, in Woodbridge, New Jersey, raised substantial doubt as to Vonage Holdings Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. As reported by the Troubled Company Reporter on May 12, 2008 that Vonage Holdings's balance sheet at March 31, 2008, showed $458.3 million in total assets and $540.5 million in total liabilities, resulting in an $82.2 million stockholders' deficit. WINERY DISPOSITION: Case Summary & Four Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Winery Disposition Group, LLC c/o George Green 7301 E. 3rd Ave., #319 Scottsdale, AZ 85251 Tel: (561) 702-0209 Bankruptcy Case No.: 08-11466 Chapter 11 Petition Date: July 23, 2008 Court: Northern District of California (Santa Rosa) Debtors' Counsel: Teresa A. Blasberg, Esq. (tablasberg@earthlink.net) Blasberg and Associates 526 N. Juanita Ave. Los Angeles, CA 90004 Tel: (213) 239-0364 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/califnb08-11466.pdf WR GRACE: Court Sets October 21 as ZAI Proof of Claims Bar Date --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware set a Bar Date for Zonolite Attic Insulation Claims to be filed in the W. R. Grace Bankruptcy. To preserve a claim against Grace, all persons and entities with ZAI Claims must file these claims on or before Oct. 31, 2008 ZAI claims are property-related claims that could include, among others, the cost of abatement or removal, the diminution of property value, economic loss, or other property-related claims caused by ZAI manufactured by Grace. ZAI is a loose-fill, non-roll vermiculite home attic insulation that may contain naturally occurring asbestos. It was sold from the 1920/1930s to 1984, and it was sold or manufactured by Grace under the brand name of Zonolite Attic Insulation and under other brand names, including: Attic Fill, House Fill, Home Insulation, Zonolite Insulating Fill, Econofil, Quiselle Insulating Fill, Sears Micro Fill, Ward's Mineral Fill, Wickes Attic Insulation, Attic Plus, Mica Pellets Attic Insulation, Unifil and Cashway Attic Insulation. ZAI may have a glittery granular appearance. The granules are shaped like small nuggets and expanded like an accordion and may have a silvery, gold translucent or brownish cast. After years in the attic, the granules may darken to black or gray. ZAI may be found underneath subsequently installed insulation of other types such as rolled fiberglass insulation. The Bar Date does not apply to Asbestos Property Damage Claims, Medical Monitoring Claims, Non-Asbestos Claims, Settled Pre- Petition Asbestos Personal Injury Claims, or Non-Settled Asbestos Personal Injury Claims. These bar dates have passed. For complete information, including a Bar Date Notice, ZAI Proof of Claim Form and instructions for filing a claim, call 1-877-465- 4817, or write to Claims Processing Agent, W. R. Grace & Co. Bankruptcy, P.O. Box 1620, Faribault, MN 55021-1620. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on January 14, 2008. At Dec. 31, 2006, the W.R. Grace's balance sheet showed total assets of $3,620,400,000 and total debts of $4,189,100,000. As of November 30, 2007, W.R. Grace's balance sheet showed total assets of $3,335,000,000, and total debts of $3,712,000,000. XM SATELLITE: June 30 Balance Sheet Upside-Down by $1.2 Billion --------------------------------------------------------------- XM Satellite Radio Holdings Inc. disclosed Tuesday financial results for its second quarter ended June 30, 2008. At June 30, 2008, the company's consolidated balance sheet showed $1.7 billion in total assets, $2.9 billion in total liabilities, and $60.2 million in minority interest, resulting in a roughly $1.2 billion stockholders' deficit. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $427.3 million in total current assets available to pay $1.1 billion in total current liabilities. The company reported a net loss of $119.6 million, compared with a net loss of $175.7 million in the second quarter of 2007. Second quarter 2008 adjusted operating loss narrowed to $37.3 million, compared to an adjusted operating loss of $47.4 million in the second quarter of 2007. Revenue for the second quarter of 2008 rose to $318.0 million, a nearly 15 percent increase over second quarter 2007 revenue of $277.3 million. XM ended second quarter 2008 with 9.65 million subscribers, a 17 percent increase, compared to 8.25 million subscribers at the end of second quarter 2007. The company said that this growth was driven, in part, by a 39 percent year-over-year increase in the number of gross additions through the automotive (OEM) channel. Second quarter 2008 OEM gross additions were 857,000, the company's fifth consecutive quarter of record OEM gross additions. This compared to 618,000 OEM gross additions in second quarter 2007. In second quarter 2008, XM reported total gross additions of 1.08 million, and 322 thousand net subscriber additions, compared to 942,000 gross additions and 338,000 net subscriber additions in second quarter 2007. Net OEM subscriber additions of 360,000 in the second quarter more than offset a loss of 38,000 net retail subscribers. In second quarter 2008, XM's subscriber acquisition costs, a component of cost per gross addition, improved year over year to $65, compared to $75 in second quarter 2007. CPGA in the second quarter was $100 and compares to $121 in the second quarter 2007. XM said it continued to maintain stability in the key operating metrics of conversion rate and churn, both of which improved year over year. Second quarter 2008 conversion was 53.4 percent, compared to second quarter 2007 conversion of 52.7 percent. Second quarter 2008 churn improved to 1.67 percent, compared to second quarter 2007 churn of 1.84 percent. Liquidity and Capital Resources For the six months ended June 30, 2008, net cash used in operating activities was $235.0 million, consisting of a net loss of $248.8 million adjusted for net non-cash expenses of $132.0 million and $118.2 million used in working capital as well as other operating activities. Included in cash used in working capital is a $120.0 million increase in Escrow deposit as a result of funding an escrow obligation under the company's agreement with Major League Baseball(R)(MLB), a $31.0 million decrease in Accounts payable, accrued expenses and other liabilities due primarily to the $32.0 million catch up payment to the Copyright Royalty Board and $26.6 million increase in Prepaid programming content due primarily to the $60.0 million prepayment of the company's obligation to MLB for the 2008 season; offset partially by a $32.5 million increase in Subscriber deferred revenue. The company's merger agreement with Sirius restricts the company's ability to incur additional debt financing beyond existing credit facilities (or equivalent funding) and limits the amount of new equity the company can issue, in each case without approval from Sirius. Sirius is under similar restrictions not to incur new debt or issue additional equity beyond agreed limits without the company's approval. In February 2008, the company borrowed $187.5 million or 75% of the amount available under its $250.0 million revolving credit facility with a group of banks. The proceeds were used for general corporate purposes, including the company's annual payment to MLB and the 2007 payment under the Copyright Royalty Board proceeding, both due in March, as well as the company's record label settlements. All amounts drawn under the revolving credit facility are due on May 5, 2009, and are secured by a lien on substantially all of the company's assets. As a result of drawing 75% of the amount available under the revolving credit facility, the company now has full access to the $150.0 million senior secured credit facility provided by General Motors, which may be used only for payments to GM, and matures in December 2009. In May 2008, the company borrowed $62.5 million, which equaled the remaining 25% of the amount available under its $250.0 million revolving credit facility. The proceeds were used for general corporate purposes, including the escrow deposit. In June 2008, the company drew on its $150.0 million senior secured credit facility with GM to satisfy payments in the amount of $29.0 million for commissions and revenue share due under the company's distribution agreement with GM. In June 2008, the company entered into a credit agreement with UBS AG relating to a $100.0 million senior secured term loan in which a portion of the proceeds were used to repay the $29.0 million drawn under the GM facility. At June 30, 2008, the company had total debt, including current maturities, of $1.8 billion, compared with total debt of $1.5 billion at Dec. 31, 2007. Future Operating Liquidity Provided that the company meets the revenue, expense and cash flow projections of the compay's current business plan, the company expects to be fully funded and not need additional liquidity to continue operations beyond its existing assets, credit facilities and cash generated by operations; the company's current business plan is based on estimates regarding expected future costs, expected future revenue and assumes the refinancing or renegotiating of certain of the company's obligations as they become due, including the maturity of its existing credit facilities, $100 million term loan and $400 million of convertible notes in 2009 and the replacement of the $120 million MLB escrow arrangement. Full-text copies of the company's consolidated financial statements for the quarter ended June 30, 2008, are available for free at http://researcharchives.com/t/s?2fef About XM Satellite Radio Headquartered in Washington, D.C., XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) -- http://www.xmradio.com/-- is a satellite radio company. The company broadcasts live daily from studios in Washington, DC, New York City, Chicago, Nashville, Toronto and Montreal. The company also provides satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota. * * * As reported in the Troubled Company Reporter on March 28, 2008, Standard & Poor's Ratings Services said its ratings on XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc. (CCC+/Watch Developing/--) remain on CreditWatch with developing implications, where S&P originally placed them on March 4, 2008, due to S&P's concerns over standalone refinancing risks XM might face if its merger with Sirius Satellite Radio Inc. (CCC+/Watch Developing/--) wasn't approved. XM SATELLITE: S&P Junks Rating on Proposed $400MM Rule 144A Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on Washington, D.C.-based XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc., including the 'CCC+' corporate credit rating, remain on CreditWatch with developing implications, where S&P placed them on March 4, 2008. CreditWatch developing indicates that ratings may be raised, lowered, or affirmed. The ratings could be raised if a merger takes place in the near future and is accompanied by significant refinancing and cost rationalization. Ratings could be lowered with or without a merger, if sizable maturities are not addressed and if the company cannot progress rapidly toward consistent positive discretionary cash flow. S&P initially placed the ratings on CreditWatch Feb. 20, 2007, then with positive implications, based on the company's definitive agreement to an all-stock "merger of equals" with Sirius Satellite Radio Inc. (CCC+/Watch Developing/--). Standard & Poor's also assigned its 'CCC' rating to XM Satellite Radio Inc.'s proposed $400 million Rule 144A senior notes due 2014, and placed the rating on CreditWatch along with the other ratings on the company. The proceeds of the $400 million notes due 2014, plus an additional $200 million of new senior unsecured notes to be issued by XM Satellite Radio Inc., will be used to refinance the company's existing $600 million 9.75% senior notes due 2014. The financing is pursuant to an exchange offer in which holders of the 9.75% have agreed to waive the change of control repurchase obligation. Cash proceeds of the new $400 million notes will be held in escrow until the consummation of the proposed merger between XM and Sirius. The notes are callable at any time, offering flexibility to the new company if and when the merger agreement is approved. Recovery ratings on both the new bonds and the recent $100 million incremental term loan will be assigned once additional information regarding the proposed post-merger financial and operating profile become available. Upon the examination of additional information, the issue-level ratings on XM, along with the corporate credit rating, could be raised, affirmed, or lowered. The company's proposed merger was cleared by the Department of Justice on March 21, 2008, but still awaits FCC approval. S&P believe a combined company could achieve significant initial operating cost savings. A merger would also entail much longer term capital investments to rationalize and consolidate the two satellite and terrestrial infrastructures before all expected cost savings could be realized. "We will continue to monitor developments pertaining to the final terms of the merger, if approved," said Standard & Poor's credit analyst Michael Altberg. "We will place particular emphasis on the liquidity position of both companies following a potential merger. If the merger is not approved, we could lower the ratings unless we become convinced that XM can address its standalone liquidity needs, as it has $750 million of maturities in 2009, including its $400 million of 1.75% convertible senior notes and its $350 million of secured bank debt, which will survive the proposed merger." * Delay in TRUP Payments by Banks Cues Moody's to Review Ratings ---------------------------------------------------------------- Moody's has placed under review 182 tranches across 72 Trust Preferred (TRUP) CDOs. The review was prompted by the substantial increase in the number of banks that are deferring on their TRUP coupon payments. Moody's notes that currently there are 31 banks deferring payments which represent 4% of the underlying collateral held in TRUP CDOs. In addition three of the 31 banks that are deferring payment have gone into receivership. Although banks that are deferring payments can defer such payments for a period of up to five years without being considered a default, each TRUP CDO treats deferring banks as defaulted securities for enhancement level test purposes. While historically most banks that deferred payment in these TRUP CDOs have come back to pay current, Moody's expects that in the current environment more banks deferring payments may eventually default. Furthermore in the current environment, Moody's anticipates the future number of banks deferring payments could increase in these TRUP CDOs. Moody's will continue to monitor the potential increase of banks deferring payments as well as the default rate of the banks. A tranche was placed on review if it met one or both of these criteria: 1. The subordination level of a rated TRUP CDO tranche is less than two times the current par amount of bank deferrals in the TRUP CDO; or. 2. The subordination level of a rated TRUP CDO tranche is less than the sum of a) par amount of TRUPS currently deferring, b) the par amount of TRUPS issued by banks that Moody's believes are likely to defer, c) TRUPs issued by Real Estate Investment Trusts and d) bonds or loans issued by homebuilders. In addition, all rated tranches of Regional Diversified Funding 2005-1 Ltd. were being placed on review for possible downgrade due to its substantial exposure, through resecuritization, to TRUP CDO tranches that are themselves under review for possible downgrade or may experience credit deterioration in the future. Moody's is in the process of evaluating the risk of deferral by the banks represented in these TRUP CDOs by examining their key financial ratios and other sources of information. Moody's review will also consider the extent that a TRUP CDO has concentrated exposure to banks in areas in which real estate prices have corrected the most. Since March of 2000, Moody's has rated 103 trust preferred (TRUP) CDOs, representing close to $55 billion, backed by small and medium sized US bank, insurance, and REIT issuers. Seventy percent of these TRUP CDOs are backed by US banks. Issuer: ALESCO Preferred Funding I, Ltd. Class Description: $56,700,000 Class B-1 Mezzanine Secured Floating Rate Notes Due 2033, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $45,000,000 Class B-2 Mezzanine Secured Fixed/Floating Rate Notes Due 2033, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding II, Ltd. Class Description: Class B-1 Mezzanine Secured Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class B-2 Mezzanine Secured Fixed/Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: ALESCO PREFERRED FUNDING III, LTD. Class Description: Class B-1 Mezzanine Secured Floating Rate Notes, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: Class B-2 Mezzanine Secured Fixed/Floating Rate Notes, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding IV, Ltd. Class Description: Class B-1 Mezzanine Secured Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class B-2 Mezzanine Secured Fixed/Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class B-3 Mezzanine Secured Fixed/Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: ALESCO Preferred Funding V, Ltd. Class Description: Class C-1 Deferrable Mezzanine Secured Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class C-2 Deferrable Mezzanine Secured Fixed/Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class C-3 Deferrable Mezzanine Secured Fixed/Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class D Deferrable Subordinate Secured Floating Rate Notes Due 2034, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: ALESCO Preferred Funding VI, Ltd. Class Description: Class C-1 Deferrable Mezzanine Secured Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class C-2 Deferrable Mezzanine Secured Fixed/Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class C-3 Deferrable Mezzanine Secured Fixed/Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class C-4 Deferrable Mezzanine Secured Fixed Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class D-1 Deferrable Subordinate Secured Floating Rate Notes Due 2035, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Class Description: Class D-2 Deferrable Subordinate Secured Fixed/Floating Rate Notes Due 2035, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Alesco Preferred Funding VII, Ltd. Class Description: $123,500,000 Class C-1 Deferrable Mezzanine Secured Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $13,000,000 Class C-2 Deferrable Mezzanine Secured Fixed/Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $5,000,000 Class C-3 Deferrable Mezzanine Secured Fixed/Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $5,500,000 Class C-4 Deferrable Mezzanine Secured Fixed/Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $10,000,000 Class C-5 Deferrable Mezzanine Secured Fixed Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: ALESCO PREFERRED FUNDING VIII, LTD. Class Description: Class C-1 Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class C-2 Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class C-3 Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class D-1 Notes, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Class Description: Class D-2 Notes, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Class Description: Class E Notes-1, -- Prior Rating: Baa3 -- Current Rating: Baa3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding IX, Ltd. Class Description: $54,000,000 Class C-1 Deferrable Fourth Priority Mezzanine Secured Floating Rate Notes Due 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $48,500,000 Class C-2 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $12,500,000 Class C-3 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $7,000,000 Class C-4 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Alesco Preferred Funding X, Ltd. Class Description: $99,800,000 Class C-1 Deferrable Fourth Priority Mezzanine Secured Floating Rate Notes Due 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $67,000,000 Class C-2 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding XI, Ltd. Class Description: $40,500,000 Class C-1 Deferrable Fourth Priority Mezzanine Secured Floating Rate Notes due Dec. 23, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $12,000,000 Class C-2 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes due Dec. 23, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $50,500,000 Class C-3 Deferrable Fourth Priority Mezzanine Secured Fixed Rate Notes due Dec. 23, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding XII, Ltd. Class Description: $60,000,000 Class C-1 Deferrable Fourth Priority Mezzanine Secured Floating Rate Notes Due 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $10,000,000 Class C-2 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding XIII, Ltd. Class Description: $27,000,000 Class C-1 Deferrable Fourth Priority Mezzanine Secured Floating Rate Notes Due 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $33,000,000 Class C-2 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding XIV, Ltd. Class Description: $103,000,000 Class B Deferrable Third Priority Secured Floating Rate Notes Due 2037, -- Prior Rating: Aa2 -- Current Rating: Aa2, Review for Possible Downgrade Class Description: $50,000,000 Class C-1 Deferrable Fourth Priority Mezzanine Secured Floating Rate Notes Due 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $32,000,000 Class C-2 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $21,000,000 Class C-3 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes Due 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Alesco Preferred Funding XV, LTD. Class Description: $35,000,000 Class B-1 Deferrable Third Priority Secured Floating Rate Notes due December 2037, -- Prior Rating: Aa2 -- Current Rating: Aa2, Review for Possible Downgrade Class Description: $35,000,000 Class B-2 Deferrable Third Priority Secured Monthly Pay Floating Rate Notes due December 2037, -- Prior Rating: Aa2 -- Current Rating: Aa2, Review for Possible Downgrade Class Description: $75,000,000 Class C-1 Deferrable Fourth Priority Mezzanine Secured Floating Rate Notes due December 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $7,000,000 Class C-2 Deferrable Fourth Priority Mezzanine Secured Fixed/Floating Rate Notes due December 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: ALESCO Preferred Funding� XVI, Ltd. Class Description: $85,250,000 Class C Deferrable Third Priority Mezzanine Secured Floating Rate Notes Due 2038, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: I-Preferred Term Securities IV, Ltd. Class Description: $6,200,000 Floating Rate Class D Subordinate Notes Due June 24, 2034, -- Prior Rating: Ba2 -- Current Rating: Ba2, Review for Possible Downgrade Issuer: MM Community Funding Ltd. Class Description: Class B Floating Rate Senior Notes Due 2031, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: MM Community Funding IX, Ltd. Class Description: $50,000,000 Class B-1 Floating Rate Senior Subordinate Notes due 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $60,000,000 Class B-2 Fixed/Floating Rate Senior Subordinate Notes due 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: MMCAPS Funding I, Ltd. Class Description: $77,000,000 Fixed Rate Mezzanine Notes, due 6/15/31, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: MMCAPS Funding XVII, Ltd. Class Description: $35,475,000 Class C-1 Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $35,475,000 Class C-2 Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: MMCapS Funding XVIII, Ltd. Class Description: $55,900,000 Class C-1 Floating Rate Deferrable Interest Notes Due 2039, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $12,000,000 Class C-2 Fixed/Floating Rate Deferrable Interest Notes Due 2039, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $4,000,000 Class C-3 Fixed Rate Deferrable Interest Notes Due 2039, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: MMCapS Funding XIX, Ltd. Class Description: $79,000,000 Class C Floating Rate Senior Subordinate Notes Due 2038, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Preferred Term Securities, Ltd. Class Description: $90,000,000 Fixed Rate Mezzanine Notes, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Preferred Term Securities II, Ltd Class Description: $93,000,000 Fixed Rate Mezzanine Notes, due March 1, 2031, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Preferred Term Securities VII Class Description: 177,900,000 Floating Rate Mezzanine Notes Due Oct. 3, 2032, -- Prior Rating: A1 -- Current Rating: A1, Review for Possible Downgrade Issuer: Preferred Term Securities VIII, Ltd Class Description: $58,700,000 Floating Rate Class B-1 Mezzanine Notes Due Jan. 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $30,700,000 Fixed/Floating Rate Class B-2 Mezzanine Notes Due Jan. 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $75,000,000 Fixed/Floating Rate Class B-3 Mezzanine Notes Due Jan. 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities IX, Ltd. Class Description: $86,000,000 Floating Rate Class B-1 Mezzanine Notes Due April 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $16,250,000 Fixed/Floating Rate Class B-2 Mezzanine Notes Due April 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $66,250,000 Fixed/Floating Rate Class B-3 Mezzanine Notes Due April 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities X, Ltd. Class Description: $88,000,000 Floating Rate Class B 1 Mezzanine Notes Due July 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $19,000,000 Fixed/Floating Rate Class B 2 Mezzanine Notes Due July 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $70,500,000 Fixed/Floating Rate Class B 3 Mezzanine Notes Due July 3, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XI, Ltd. Class Description: $124,500,000 Floating Rate Class B 1 Mezzanine Notes Due Sept. 24, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $13,000,000 Fixed/Floating Rate Class B 2 Mezzanine Notes Due Sept. 24, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $65,500,000 Fixed/Floating Rate Class B 3 Mezzanine Notes Due Sept. 24, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XII, Ltd. Class Description: $204,400,000 Floating Rate Class B-1 Mezzanine Notes Due Dec. 24, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $20,500,000 Fixed/Floating Rate Class B-2 Mezzanine Notes Due Dec. 24, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $37,700,000 Fixed/Floating Rate Class B-3 Mezzanine Notes Due December 24, 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XIII, LTD. Class Description: $98,350,000 Floating Rate Class B-1 Mezzanine Notes Due March 24, 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $21,450,000 Fixed/Floating Rate Class B-2 Mezzanine Notes Due March 24, 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $44,000,000 Fixed/Floating Rate Class B-3 Mezzanine Notes Due March 24, 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XIV, Ltd. Class Description: $117,000,000 Floating Rate Class B-1 Mezzanine Notes Due June 24, 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $10,800,000 Fixed/Floating Rate Class B-2 Mezzanine Notes Due June 24, 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $13,000,000 Fixed/Floating Rate Class B-3 Mezzanine Notes Due June 24, 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XV Class Description: $114.5 million Floating Rate Class B-1 Mezzanine Notes due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $22 million Fixed/Floating Rate Class B-2 Mezzanine Notes due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $36 million Fixed/Floating Rate Class B-3 Mezzanine Notes due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XVI, Ltd. Class Description: $77.65 million Floating Rate Class C Mezzanine Notes due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XVII, Ltd. Class Description: $65.6 million Floating Rate Class C Mezzanine Notes due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XVIII, Ltd. Class Description: $80.0 million Floating Rate Class C Mezzanine Notes due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XIX, Ltd. Class Description: $82,800,000 Floating Rate Class C Mezzanine Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Preferred Term Securities XXII, Ltd. Class Description: $77,250,000 Floating Rate Class C-1 Mezzanine Notes Due Sept. 22, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $71,650,000 Fixed/Floating Rate Class C-2 Mezzanine Notes Due Sept. 22, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Preferred Term Securities XXIII, Ltd. Class Description: $81,200,000 Floating Rate Class C-1 Mezzanine Notes Due Dec. 22, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $28,000,000 Fixed/Floating Rate Class C-2 Mezzanine Notes Due Dec. 22, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $52,800,000 Floating Rate Class C-FP Mezzanine Notes Due Dec. 22, 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Preferred Term Securities XXIV, Ltd. Class Description: $65,650,000 Floating Rate Class C-1 Mezzanine Notes Due March 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $54,250,000 Fixed/Floating Rate Class C-2 Mezzanine Notes Due March 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Preferred Term Securities XXV, Ltd. Class Description: $82,300,000 Floating Rate Class C-1 Mezzanine Notes Due June 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $18,500,000 Fixed/Floating Rate Class C-2 Mezzanine Notes Due June 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Preferred Term Securities XXVI, Ltd. Class Description: $71,500,000 Floating Rate Class C-1 Mezzanine Notes Due Sept. 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $39,500,000 Fixed/Floating Rate Class C-2 Mezzanine Notes Due Sept. 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Preferred Term Securities XXVII, Ltd. Class Description: $24,000,000 Floating Rate Class C-1 Mezzanine Notes Due Dec. 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $18,000,000 Fixed/Floating Rate Class C-2 Mezzanine Notes Due Dec. 22, 2037, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Preferred Term Securities XXVIII, Ltd. Class Description: $36,000,000 Floating Rate Class C-1 Mezzanine Notes Due March 22, 2038, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $8,000,000 Fixed/Floating Rate Class C-2 Mezzanine Notes Due March 22, 2038, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Regional Diversified Funding Ltd. Class Description: $225,000,000 Fixed Rate Senior Notes due March 15, 2030 -- Prior Rating: A1 -- Current Rating: A1, Review for Possible Downgrade Issuer: Regional Diversified Funding 2004-1LTD. Class Description: $22,000,000 Class B-1 Floating Rate Senior Subordinate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $95,000,000 Class B-2 Fixed/Floating Rate Senior Subordinate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: REGIONAL DIVERSIFIED FUNDING 2005-1 LTD. Class Description: $170,000,000 Class A-1a Floating Rate Senior Notes Due 2036, -- Prior Rating: Aaa -- Current Rating: Aaa, Review for Possible Downgrade Class Description: $10,000,000 Class A-1b Fixed Rate Senior Notes Due 2036, -- Prior Rating: Aaa -- Current Rating: Aaa, Review for Possible Downgrade Class Description: $70,000,000 Class A-2 Floating Rate Senior Notes Due 2036, -- Prior Rating: Aaa -- Current Rating: Aaa, Review for Possible Downgrade Class Description: $79,000,000 Class B-1 Floating Rate Senior Subordinate Notes Due 2036, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $10,000,000 Class B-2 Fixed Rate Senior Subordinate Notes Due 2036, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Soloso CDO 2005-1 Ltd. Class Description: $40.0 million Class A-3L Floating Rate Notes Due October 2035, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $19.0 million Class A-3A Fixed/Floating Rate Notes Due October 2035, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $19.0 million A-3B Fixed/Floating Rate Notes Due October 2035, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: Class $30.5 million Class B-1L Floating Rate Notes Due October 2035, -- Prior Rating: Baa3 -- Current Rating: Baa3, Review for Possible Downgrade Issuer: Soloso CDO 2007-1 Ltd. Class Description: $40,000,000 Class A-3L Floating Rate Notes Due October 2037, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $25,000,000 Class A-3F Fixed/Floating Rate Notes Due October 2037, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: TPREF FUNDING II Ltd. Class Description: $196.0 million of Class B Floating Rate Subordinate Notes due 2032, -- Prior Rating: A1 -- Current Rating: A1, Review for Possible Downgrade Issuer: TPREF Funding III, Ltd. Class Description: Class B-1 Floating Rate Senior Subordinated Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class B-2 Floating Rate Senior Subordinate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Trapeza CDO I, LLC Class Description: $29,600,000 Class C-1 Third Priority Secured Floating Rate Notes Due 2032, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $10,000,000 Class C-2 Third Priority Secured Fixed Rate Notes Due 2032, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $16,500,000 Class D Mezzanine Secured Floating Rate Notes Due 2032, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Trapeza CDO II, LLC Class Description: $43.5MM Class C-1 Fourth Priority Secured Floating Rate Notes due 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $54.8MM Class C-2 Fourth Priority Secured Fixed/Floating Rate Notes due 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $18.7MM Class D Mezzanine Secured Floating Rate Notes due 2033, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Trapeza CDO III, LLC Class Description: $31,2500,000 Class C-1 Third Priority Secured Fixed Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $31,250,000 Class C-2 Third Priority Senior Secured Fixed/Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $14,500,000 Class D Mezzanine Secured Floating Rate Notes, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Class Description: $8,000,000 Class E Secured Notes, -- Prior Rating: Ba2 -- Current Rating: Ba2, Review for Possible Downgrade Issuer: Trapeza CDO IV, LLC Class Description: $44,500,000 Class C-1 Fourth Priority Secured Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $44,500,000 Class C-2 Fourth Priority Secured Fixed/Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $14,000,000 Class D Mezzanine Secured Floating Rate Notes Due 2034, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Trapeza CDO V, Ltd. Class Description: $41,000,000 Class C-2 Fourth Priority Secured Fixed/Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $25,000,000 Class C-1 Fourth Priority Senior Secured Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $13,000,000 Class D Mezzanine Secured Floating Rate Notes Due 2034, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Trapeza CDO VI, Ltd. Class Description: $39,500,000 Class B-1 Fourth Priority Senior Secured Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $56,500,000 Class B-2 Fourth Priority Secured Fixed/Floating Rate Notes Due 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Trapeza CDO VII, Ltd. Class Description: Class B-1 Third Priority Secured Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: Class B-2 Third Priority Senior Secured Fixed/Floating Rate Notes, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Trapeza CDO IX, Ltd. Class Description: $23,000,000 Class B-1 Fourth Priority Secured Floating Rate Notes Due 2040, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $10,000,000 Class B-2 Fourth Priority Secured Fixed/Floating Rate Notes Due 2040, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $25,000,000 Class B-3 Fourth Priority Secured Fixed/Floating Rate Notes Due 2040, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: Trapeza CDO X, Ltd. Class Description: $268,000,000 Class A-1 First Priority Senior Secured Floating Rate Notes Due 2041, -- Prior Rating: Aa1 -- Current Rating: Aa1, Review for Possible Downgrade Class Description: $69,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2041, -- Prior Rating: Aa2 -- Current Rating: Aa2, Review for Possible Downgrade Class Description: $31,000,000 Class B Third Priority Secured Deferrable Floating Rate Notes Due 2041, -- Prior Rating: Baa3 -- Current Rating: Baa3, Review for Possible Downgrade Class Description: $21,000,000 Class C-1 Fourth Priority Secured Deferrable Floating Rate Notes Due 2041, -- Prior Rating: Caa1 -- Current Rating: Caa1, Review for Possible Downgrade Class Description: $35,000,000 Class C-2 Fourth Priority Secured Deferrable Fixed/Floating Rate Notes Due 2041, -- Prior Rating: Caa1 -- Current Rating: Caa1, Review for Possible Downgrade Issuer: Trapeza CDO XI, Ltd. Class Description: $53,000,000 Class A-2 Second Priority Senior Secured Floating Rate Notes Due 2041, -- Prior Rating: Aaa -- Current Rating: Aaa, Review for Possible Downgrade Issuer: TRAPEZA EDGE CDO, LTD. Class Description: $50,500,000 Class B-1 Fourth Priority Secured Floating Rate Notes Due 2035, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $22,500,000 Class B-2 Fourth Priority Secured Fixed Rate Notes Due 2035., -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Issuer: Tropic CDO I Ltd. Class Description: $32,000,000 Class A-4 Fixed/Floating Rate Notes Due October 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $48,000,000 Class A-4L Floating Rate Notes Due October 2033, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $25,000,000 Class B-1L Floating Rate Notes Due October 2033, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: Tropic CDO II, LTD Class Description: $30,000,000 Class A-4 Fixed/Floating Rate Notes Due April 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $38,000,000 Class A-4L Floating Rate Notes Due April 2034, -- Prior Rating: A2 -- Current Rating: A2, Review for Possible Downgrade Class Description: $15,000,000 Class B-1L Floating Rate Notes Due April 2034, -- Prior Rating: Baa2 -- Current Rating: Baa2, Review for Possible Downgrade Issuer: TROPIC CDO III LTD Class Description: $40,500,000 Class A-4A Fixed/Floating Rate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $20,000,000 Class A-4B Fixed/Floating Rate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $19,500,000 Class A-4L Floating Rate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: TROPIC CDO IV LTD. Class Description: $35,000,000 Class A-4 Fixed/Floating Rate Notes Due April 2035, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $26,000,000 Class A-4L Floating Rate Notes Due April 2035, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $20,000,000 Class B-1L Floating Rate Notes Due April 2035, -- Prior Rating: Baa3 -- Current Rating: Baa3, Review for Possible Downgrade Issuer: Tropic CDO V Ltd. Class Description: $51,000,000 Class A-2L Deferrable Floating Rate Notes Due July 2036, -- Prior Rating: Aa1 -- Current Rating: Aa1, Review for Possible Downgrade Class Description: $62,000,000 Class A-3L Floating Rate Notes Due July 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $45,000,000 Class A-3F Fixed/Floating Rate Notes Due July 2036, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $50,000,000 Class B-1L Floating Rate Notes Due July 2036, -- Prior Rating: Baa3 -- Current Rating: Baa3, Review for Possible Downgrade Class Description: $8,000,000 Class B-2L Floating Rate Notes Due July 2036, -- Prior Rating: Ba2 -- Current Rating: Ba2, Review for Possible Downgrade Issuer: US Capital Funding I LTD Class Description: $45,000,000 Class B-1 Floating Rate Senior Subordinate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $24,000,000 Class B-2 Fixed/Floating Rate Senior Subordinate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: US Capital Funding II LTD Class Description: $70,000,000 Class B-1 Floating Rate Senior Subordinate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $40,000,000 Class B-2 Fixed/Floating Rate Senior Subordinate Notes Due 2034, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: US Capital Funding III, Ltd. Class Description: $39,100,000 Class B-1 Floating Rate Senior Subordinate Notes Due 2035, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $48,000,000 Class B-2 Fixed/Floating Rate Senior Subordinate Notes Due 2035' -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Issuer: U.S. CAPITAL FUNDING IV, LTD. Class Description: $92,250,000 Class B-1 Floating Rate Senior Subordinate Notes Due 2039, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade Class Description: $12,500,000 Class B-2 Fixed/Floating Rate Senior Subordinate Notes Due 2039, -- Prior Rating: A3 -- Current Rating: A3, Review for Possible Downgrade * Fitch Says Negative Rating Trend in Global Bank to Continue ------------------------------------------------------------- Fitch Ratings expects further negative rating actions on banks in the coming months, as the operating environment remains tough and the global economy continues to slow. There were more than twice as many negative rating actions taken during Q208 than positive actions, intensifying the negative trend already experienced in the previous two quarters. In its latest quarterly report on "Global Bank Rating Trends", Fitch says the number of Positive Outlooks compared to Negative Outlooks assigned to bank ratings has steadily fallen over the past 15 months, with the number of Negative Outlooks surpassing that of Positive Outlooks at end-June 2008. Although the immediate liquidity risks in the global banking system have been partly alleviated by measures taken by central banks, wider concerns about the extent to which global credit market conditions are likely to feed through to the real economies of developed countries intensified in Q208. "Banks in developed markets now face the prospect of increased credit costs on top of higher funding costs," says Gerry Rawcliffe, Managing Director and Group Credit Officer in Fitch's Financial Institutions Group. "Furthermore, Fitch does not rule out further write-downs of structured products, including write-downs related to financial guarantors." During Q208 there were 69 negative rating actions on banks as opposed to 31 positive actions. Although there were still more positive actions in emerging markets than negative, there were significantly more negative actions than positive actions in developed markets. Rating downgrades during the quarter were predominantly in Europe, although there were some further downgrades in the developed Americas as well. Having peaked in Q107 at five to one, at end-Q208 the number of Positive Outlooks was surpassed by the number of Negative Outlooks for the first time since the Global Bank Rating Trends report series began in 2006. The increase in Negative Outlooks largely related to banks in developed Europe and developed Americas. Despite this negative shift in Outlooks, around 80% of Fitch's bank ratings still have Stable Outlooks. * Fitch: Copper, Aluminum Prices on New Peaks on US Dollar Slump ----------------------------------------------------------------- Fitch Ratings believes U.S. dollar declines, cost inflation, power shortages and other disruptions to production have resulted in copper and aluminum prices reaching new peaks in July, despite new supply and weakening demand from the United States and Europe. Demand from China and other developing nations continue to drive strong growth in consumption. Constraints to earnings include: declining ore grades; rising energy and fuel prices; capital costs, consumable and labor costs inflation; and increasing governmental and non-governmental public action to curtail production. Fitch does not expect cost pressures to ease in the medium term. The overall Rating Outlook on the industry is Stable. Fitch expects price volatility to persist over the short-to-medium turn given the size of the markets and increased speculative volumes. Reaction to unexpected disruptions or new supply surprises has been swift and dramatic albeit short term in nature. Key 2008 Themes/Events: -- Tighter credit generally appears to be affecting trading and stocking activity and may lead to market distortion. -- Declines in U.S. residential construction and automotive sales are translating to declines in U.S. demand for copper, aluminum, nickel and zinc. -- China accounts for 20%-35% of the world's consumption of base metals and continued fixed-asset investment underpins strong demand growth. Efforts to slow down the economy to rein in inflation may affect metals demand. -- China's production was hampered in February by extraordinarily heavy snows and again in May with the earthquake. Production cuts of 5%-10% for some metals are expected during August to cut pollution and conserve power. In all Fitch does not expect these disruptions to have a significant or lasting effect. * Fitch: New Econ. Stress in US Banking Takes a Toll on Investors ----------------------------------------------------------------- New economic worries and stress in the U.S. banking sector have taken a further toll on investor sentiment according to the latest Fitch Ratings/Fixed Income Forum Survey of senior fixed income money managers conducted in June. Approximately two-thirds of investors now expect the credit markets to stabilize no earlier than 2009, in contrast to the January 2008 survey when most expected stability to return in 2008. Nearly all investors place stability in the housing market as a 2009 or later event and half of investors surveyed believe a recession is highly likely in the U.S. over the coming year. When asked to comment on the degree of risk posed by a series of key macroeconomic factors, inflation and oil price volatility, not surprisingly, registered the biggest gains in terms of factors considered most detrimental to the credit outlook. Survey results confirm that the dramatic spike in oil prices in the first half of 2008 has further clouded the outlook for the U.S. economy, raising the spectre of a slow-growth, high-inflation environment. In the recent survey there was an interesting divide in opinions on the outlook for the financial sector, with investor expectations essentially split between deterioration and improvement in credit quality over the coming year. However, the failure of a financial institution received the most votes as a high risk factor going forward. This response, given prior to the recent troubles at IndyMac and Fannie Mae and Freddie Mac, held steady even after the first-quarter rescue of Bear Stearns, suggesting strong investor scepticism that the worst of the crisis at financial firms had passed, a concern that has proven more than justified. 'Taken together, the recent batch of survey responses suggests that risk tolerance, at least among more traditional fixed income investors, remains low, which in itself presents a problem for the credit outlook,' said Mariarosa Verde, Managing Director and Head of Fitch Credit Market Research. 'Investor confidence is the ultimate ingredient in getting the credit markets back on track.' Survey participants continued to be bearish on the direction of corporate default rates over the next 12 months, with nearly all participants expecting higher default rates. In addition, most investors expect an increase in corporate leverage over the coming year. 'Given the slowdown in the broader economy, it is not surprising that investors expressed the most concern about cyclical industries, the high yield corporate sector, as well as structured finance areas exposed to the housing market,' said James Batterman, Managing Director in Fitch's Credit Policy Group. Investors do not anticipate any near-term rebound in issuance in high yield corporate or structured finance. The Fitch Ratings/Fixed Income Forum Survey is designed to provide insight into the opinions of professional money managers on the state of the U.S. credit markets. In carrying out this survey, the fifth in the series, 72 senior investment professionals representing a wide range of institutions were queried on matters involving the economy, corporate strategies, fundamental credit conditions across various asset classes and industrial sectors, and other relevant topics. * Moody's Sees Stability in Global Non-Durable Products Industry ---------------------------------------------------------------- Moody's outlook for the global consumer non-durable products is stable. This outlook expresses our expectations for the fundamental credit conditions in the industry over the next 12 to 18 months. Moody's view is supported by expectations for modest revenue growth for the sector offset by the challenge associated with managing high raw material and distribution costs. Growth will be weakest in the developed economies of North America, Europe and Japan, strongest in the emerging markets, particularly the BRIC region. Companies with a diversified portfolio of strong branded products will weather the economic and cost pressures best. The second tier brands will struggle to push through price increases and may come under threat from private label operators who will have a good opportunity to capture market share in the current deteriorating economic environment. Should the economic environment worsen significantly, weaker positioned brands are likely to suffer disproportionately. Cosmetics and fragrance companies will feel more pressure in the weak economic environment as well. Strong brands may remain stable given the non- discretionary nature of a sizable portion of the consumer non- durable space. While in Moody's view the industry outlook over the next 12 to 18 months is stable, we believe the most significant challenges will include a company's ability to manage rising operating costs either through improving operating efficiencies and/or higher pricing. In the near term, the sector also faces the potential for a severe economic downturn as the problems in the U.S. impact other regions. * Moody's: Issuers with Weakest Liquidity Rating Hit Record High ---------------------------------------------------------------- The number of speculative-grade issuers with Moody's weakest liquidity rating hit a record level in June as several companies were swept up in the one-year-old liquidity crunch, Moody's Investors Service said. For the first time since February 2003, SGL-4s--the weakest composite rating--account for 11% of SGL-rated universe of 490 companies. That percentage has doubled since June 2007, before the onset of the credit crunch last summer. Seven downgrades during June brought the total of SGL-4s to 53 at the end of the month. With more companies struggling to maintain their liquidity positions amid a consumer-spending slowdown and commodity-cost increases, the ratings agency downgraded the liquidity ratings of 15 companies and upgraded just four during June. "The range of companies downgraded has expanded, as have the underlying catalysts," John Puchalla, Moody's vice-president said. "The four components that go into a composite SGL score�cash flow and internal sources of cash, liquidity availability and external sources of cash, covenants and alternative sources of liquidity� all came into play in June," Mr. Puchalla says. Overall, for companies with lower SGL ratings, the rate of Corporate Family Rating deterioration was higher than it was for companies with SGL-1 and SGL-2 ratings. In addition, the one-year default rate for SGL-4 issuers rose to 21.6% in June, from 17% in May, above the 18.7% average since Moody's first assigned SGL ratings in October 2002. The one-year default rate for all SGL issuers climbed to 2.6%, surpassing the historical average of 2.4%. * Moody's Shows How its New Risk Measures Work for ABS Sector ------------------------------------------------------------- Moody's Investors Service published a report that shows how its new supplemental risk measures for structured finance transactions will work in practice within the U.S. vehicle asset-backed securities (ABS) sector. The report, "Assumption Volatility Scores and Loss Sensitivities in the U.S. ABS Vehicle Sector", details the assignment of Assumption Volatility (V) Scores and Loss Sensitivities to prototypical transactions in each vehicle ABS sub-sector, illustrating the new forms of risk measurement introduced by Moody's in May. "These measures provide greater insight on potential factors that could lead to ratings volatility and the potential impact of changes in assumptions," Warren Kornfeld, Moody's managing director says. Moody's found that V Scores ranged from Low for prime auto loans to Medium for subprime auto loans, rental cars, dealer floorplan loans, and auto leases. Loss Sensitivities for the senior Aaa- rated tranches ranged from two to four notches; the Loss Sensitivities for subordinated tranches rated Aa and lower ranged from six to 11 notches. Moody's will begin reporting transaction-specific V Scores and Loss Sensitivities in pre-sale reports, new issue reports and press releases for all new transactions in the U.S. vehicle ABS sector marketed on or after July 28, 2008. Moody's will also begin the process of rolling out similar reporting for new transactions in other global structured finance sectors over the remainder of 2008, following the publication of similar sector reports for each new asset class. In May, Moody's proposed the two additional risk measures to enhance the transparency and information content of its structured finance ratings. Over the last two months, Moody's reached out to market participants and incorporated feedback received in the development and application of the newly introduced risk measures. "Market participants have responded quite favorably to the utility of these new measures and the greater transparency into our ratings that they provide," Mr. Kornfeld added. "We look forward to further market input as we continue to roll out, adjust and finalize our approach to these measures for the other structured finance asset classes globally." Moody's V Scores measure a transaction's exposure to factors that contribute to uncertainty in estimating credit risk and could give rise to ratings volatility. V Scores rank transactions on a five point scale by the potential for significant rating changes owing to uncertainty around the assumptions and the related modeling that underlie the ratings. Moody's Loss Sensitivities measure the number of notches that the rating on a Moody's-rated structured finance security would likely move downward if the loss expectations assumed for the transaction's underlying collateral pool were presumed to be substantially higher at issuance than those actually used to rate the transaction. * S&P Cuts Ratings on 1,317 Classes from 270 US Subprime RMBS ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 1,317 classes from 270 U.S. subprime residential mortgage-backed securities transactions issued in 2005. S&P removed 35 of the lowered ratings from CreditWatch with negative implications. At the same time, S&P placed an additional 390 ratings on CreditWatch negative. Furthermore, ratings on 123 classes remain on CreditWatch negative. Finally, S&P affirmed its ratings on 2,350 classes and removed 19 of the affirmed ratings from CreditWatch negative. All of the affected transactions have breached a cumulative loss or delinquency trigger. The classes affected by the negative rating actions have an outstanding balance of approximately $39.47 billion, or about 8.80% of the par amount of U.S. RMBS transactions backed by subprime mortgage loans rated by Standard & Poor's in 2005. 2005 Subprime Rating Actions The downgrades and CreditWatch placements reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the ratings at their previous levels, given its current projected losses. S&P calculated its projected losses using the subprime default curves described in "Standard & Poor's Revised Default And Loss Curves For U.S. Subprime RMBS," published Oct. 19, 2007, on RatingsDirect. Due to current market conditions, S&P expect it will take approximately 15 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned. In addition, S&P are assuming a loss severity of 40% for U.S. subprime RMBS transactions issued in the first half of 2005 and a 45% loss severity for transactions issued in the second half of 2005. S&P assume different loss severity assumptions for the first and second half of 2005 transactions to reflect the earlier vintage's additional housing price appreciation. In reviewing the 2005 subprime transactions, S&P employed the surveillance assumptions announced on Jan. 15, 2008, and described in "U.S. RMBS Surveillance, CDO Of ABS Assumptions Revised Amid Defaults, Negative Housing Outlook." S&P believe it's appropriate to apply its expected lifetime losses as the depth and duration of the housing downturn continues to increase. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. For mortgage pools that continue to show increasing delinquencies, S&P increased its stresses to account for potential increases in monthly losses. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base-case assumption S&P assumed in its analysis. For example, a class may have to withstand 115% of its base-case loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand 125% of our base-case loss assumption to maintain a 'BBB' rating. S&P affirmed a rating at 'AAA' if it can withstand approximately 150% of its base-case loss assumptions under its analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 90% of the current pool balances. In addition, S&P lowered its ratings on many of the 2005 vintage certificates previously rated 'B' and 'CCC' and other ratings from pools with extraordinarily high levels of severely delinquent loans (90-plus days, foreclosures, and REOs) to 'CC', as our analysis indicated that these classes have a greater likelihood of default in the near future. Factors Driving RMBS Rating Actions Mortgage Pool Performance Monthly performance data reveals that 2005 vintage transactions continue to accumulate delinquencies and foreclosures. As of the June 25, 2008, distribution date, serious delinquencies on U.S. subprime RMBS transactions issued during 2005 were 27.50% of the current pool balances, up 37% since December 2007. During the same time period, cumulative realized losses increased to 2.50% of the original principal balances from 1.29%. Given the continued pessimistic outlook for the U.S. housing market, the build up of residential inventory, and the rapid deterioration in collateral performance, Standard & Poor's expects that subprime transactions issued in 2005 will experience cumulative losses ranging from 8.50% to 12.50%. S&P are projecting cumulative losses for transactions issued in the first half of 2005 will range from 4.25% to 8.25%, while transactions issued in the second half of 2005 will experience cumulative losses of 11.75% to 15.75%. A list of deal-specific projected losses can be found in "S&P Provides Projected Losses For U.S. Subprime RMBS Issued In 2005," published July 23, 2008, on RatingsDirect. Transactions that are passing both cumulative loss and delinquency triggers were not part of this review. Due to the step-down feature of these transactions, S&P will be performing detailed cash flow analysis to assess the amount of credit support to be released. S&P expect to finalize ratings on all 2005 U.S. subprime RMBS transactions in the next few weeks. * S&P Expands 'C' Rating Definition; Revises Ratings on Six Issues ------------------------------------------------------------------ Standard & Poor's Ratings Services has expanded the definition of its 'C' rating to include issues on which cash coupon payments have been deferred, eliminated, or, in some cases, paid in kind (PIK), as permitted under the terms of the issue. As a result, S&P have revised its ratings on six hybrid capital issues to 'C' from 'D'. This change does not affect any issuer credit ratings. S&P will generally continue to assign a 'D' rating to issues that are in payment default or when the issuer has filed for bankruptcy or taken similar action. "We will now use the 'C' rating for types of nonpayment that are permitted under the terms of the instrument to more clearly distinguish these from cases that do constitute events of default, for which holders have specified remedies," said Standard & Poor's credit analyst Scott Sprinzen. Since 1999, S&P's rating approach had focused on whether cash payments were made. This change applies to all types of corporate and financial institution hybrid capital instruments, including trust preferred stock, perpetual preferred stock, deferrable debt instruments, mandatory convertible instruments, and PIK debt. Standard & Poor's will continue to assign the 'C' rating to subordinated debt, preferred stock, or other obligations that are currently highly vulnerable to nonpayment. S&P will also assign it to obligations that have payment arrearages allowed by the terms of the documents. When payments are made in-kind on PIK debt, Standard & Poor's may continue to assign a rating higher than 'C'. Moreover, S&P do not apply the 'C' rating to structured finance issues that defer or pay in kind in accordance with their terms. This change has led to rating revisions to 'C' from 'D' on six issues: -- Rural Cellular Corp.'s 12.25% junior exchangeable preferred stock. At the same time, Standard & Poor's placed this rating on CreditWatch with positive implications, reflecting S&P's expectation that the acquisition of Rural Cellular by Verizon Communications Inc. constitutes a change of control, requiring Rural Cellular to redeem the preferred stock and pay any accumulated dividends. -- Hovnanian Enterprises Inc.'s 7.625% Series A perpetual convertible preferred stock. -- Security Capital Assurance Ltd.'s perpetual preference noncumulative hybrid Series A. At the same time, Standard & Poor's placed this rating on CreditWatch with negative implications. This reflects S&P's view that there is execution risk in the restructuring plan and strategy for increasing claims-paying resources of SCA's financial guarantee subsidiaries: XL Capital Assurance Inc. and XL Financial Assurance Ltd. If the company were to prove unsuccessful in its restructuring and increasing claims- paying resources, S&P believe that XLCA and XLFA would effectively be in run-off, in which case it could lower all of the ratings. -- Six Flags Inc.'s 7.25% preferred income equity redeemable shares. -- Fleetwood Capital Trust's convertible trust preferred securities. -- Scottish Re Group Ltd.'s variable-rate noncumulative perpetual preferred stock. Standard & Poor's placed this rating on CreditWatch with negative implications; the 'CCC-' counterparty credit rating on the company is already on CreditWatch negative. * Summary of Key Issues on Amendments to BIA and CCAA ----------------------------------------------------- Both the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act were amended by Chapter 47 of the Statutes of Canada, 2005, and Chapter 36 of the Statutes of Canada, 2007. The Office of the Superintendent of Bankruptcy Canada released the legislative amendments to c. 47 and c. 36, which are broad ranging and significant. The legislative amendments are intended to achieve these main goals: 1. to encourage restructuring of viable businesses as an alternative to bankruptcy. In this regard, the CCAA will be significantly modified to provide increased predictability and consistency while preserving its flexibility. 2. to improve the protection for workers in bankruptcy. The amendments also create the legislative framework for the Wage Earner Protection Program (WEPP), which will ensure that workers receive compensation for their claims. 3. to make the insolvency system fairer and to reduce the potential for abuse. Inequities in the treatment of personal bankruptcies will be addressed and the scope for abuse will be curbed, while respecting the fundamental objective of providing a fresh start to the honest, but unfortunate, debtor. This is a summary of key issues that are addressed in c.47 and c.36. Commercial Issues Wage Earner Protection Program Act The Wage Earner Protection Program Act creates the Wage Earner Protection Program, which provides for the payment of outstanding wages (capped at $3,000) to individuals whose employment is terminated as a result of a bankruptcy or receivership. The term "wages" is defined to include salary and vacation pay, but does not include severance or termination pay. Employee claims are reduced by any amount paid to them by a receiver or trustee. The WEPP provisions allow the program to cover insolvency professionals' fees in certain cases and under certain conditions where there are insufficient assets to cover the costs of carrying out those duties related to the operation of the WEPP. Trustees and receivers are required to perform numerous duties to support the operation of the program. A due diligence defense has been included. Wage Claims The claims of workers under the WEPP are secured against current assets to the extent of $2,000. Division I proposals under the BIA and plans of compromise or arrangement under the CCAA must provide for payment of those claims immediately after court approval or sanction. Section 138 of the BIA, dealing with the postponement of wage claims of relatives, is repealed and new provisions have been added to preclude persons who were not dealing at arm's length with the bankrupt from having a secured claim for wages unless the trustee or receiver determines it is appropriate in the circumstances. Officers and directors are also precluded from having a secured claim for wages. Pension Protection Provisions are added to provide a priority over all assets for the payment of normal prefiling pension contributions, not including any unfunded pension liabilities, in bankruptcies and receiverships. As well, Division I proposals and CCAA plans that do not provide for these payments are not to be approved by the court unless the parties to the pension plan have entered into an agreement approved by the relevant pension regulator. Collective Agreements Any collective agreement between an employer and a union shall remain in force on its terms unless the agreement is amended by agreement of the parties. Upon application by an insolvent person, the court may make an order authorizing the insolvent person to serve a notice to bargain on the union pursuant to the labor legislation of the relevant jurisdiction. If the court- ordered bargaining fails, there is no provision for the court to disclaim, terminate or revise the collective agreement. If the collective agreement is amended by agreement of the parties, the union has a claim as an unsecured creditor for the value of concessions granted. Liability of Trustees Trustees and monitors who carry on the business will not be liable for any claims that existed prior to their appointment explicitly, including liability as a successor employer. Monitors Monitors under the CCAA must be licensed trustees and the company's auditor may not be the monitor. Interim Receivers Time limits regarding the duration of interim receiverships have been established and restrictions have been introduced relating to the powers that may be granted to interim receivers. The application for the appointment of an interim receiver is to be filed in the "locality of the debtor." National Receivers Judges exercising their powers under the BIA may appoint receivers under Section 243 of the BIA. The term "receiver" also refers to receivers appointed under provincial legislation and explicitly gives the court authority to appoint the receiver to take any action the court considers advisable. Receivers so appointed must be licensed trustees. The application for the appointment of a receiver is to be filed in the "locality of the debtor." If a notice to enforce security is to be sent under Section 244(1) of the BIA, the court may not appoint a receiver until the 10-day notice period has expired unless the debtor consents to an earlier enforcement or the court considers it appropriate to appoint a receiver before then. Regulatory Stay A regulatory body is not stayed in its function except to the extent that it is seeking to enforce rights as a creditor. Interim Financing The court may grant interim financing with priority over existing security interests as the court may specify. An application for interim financing must be made on notice to secured creditors who are likely to be affected by the order. The factors for the court to consider on an application for interim financing are modified, and it is made explicit that interim financing charges may not secure pre-existing debts. Disclaimers Agreements, or executory contracts, other than certain specified agreements, may be disclaimed in a Division I proposal or CCAA case. The co-party may seek a declaration that the disclaimer is invalid and a list of factors is set out for the court to consider in making its determination. If the agreement is disclaimed, the co-party will have a claim for damages as an unsecured creditor. Where the agreement relates to intellectual property, the disclaimer does not affect the co-party's right to use the intellectual property, nor the right to enforce an exclusive right to use the intellectual property, so long as the co-party continues to perform its obligations under the agreement. Assignments Agreements may be assigned, subject to the proposed assignee meeting certain requirements and provided any financial defaults under the agreement are to be remedied. The factors for the court to consider in determining whether to make an order assigning an agreement are specified and include whether the trustee or monitor approved the proposed assignment. Asset Sales The sale of assets in an ordinary administration bankruptcy to "related parties" requires court approval. In Division I proposals and CCAA cases, assets may not be sold out of the ordinary course of business unless the sale is approved by the court on notice to all secured creditors likely to be affected by the sale. Factors for the court to consider are specified. Where the proposed sale is to a "related party," the court must be satisfied that additional conditions are met. Ipso Facto Clauses The protection afforded to debtors under consumer proposals and Division I proposals against the impact of "ipso facto" clauses is extended to bankruptcies and CCAA files. Eligible financial contracts are excluded from the application of these provisions. Transfers at Undervalue Settlements and reviewable transactions are replaced with a single cause of action -- "transfer at undervalue" or "TUV". It will be a question of fact for the court to determine (1) whether the transfer was at undervalue, and (2) whether the parties were at arm's length or at non-arm's length. Persons who are related to each other are deemed not to deal at arm's length unless there is evidence to the contrary. If the court finds that the transaction was a transfer at undervalue and that the other party was at arm's length, the court may grant judgment for the difference between the actual consideration and the fair market value if the transfer took place within one year before the date of the initial bankruptcy event and the debtor was insolvent at the time of the transfer and the debtor intended to defeat the interests of creditors. If the court finds that the transaction was a transfer at undervalue and that the other party was not at arm's length, the court may grant judgment for the difference between the actual consideration and the fair market value if the transfer took place within one year before the date of the initial bankruptcy event or within one year to five years before the date of the initial bankruptcy event if the debtor was insolvent at the time of the transfer or intended to defeat the interests of creditors. Preferences If the preference was made to a non-arm's-length creditor within one year, no intention test is required. Instead, it is an effects-based test. The BIA's transfer at undervalue and preference provisions are incorporated into the CCAA by reference. Trustees and monitors will now have to report on the reasonableness of a decision to exclude the application of the TUV and preference provisions from a proposal or a compromise or arrangement. Directors The court may order that the director or person acting in the capacity be removed if the court is satisfied that the director may unreasonably impair the insolvent person's ability to complete a viable proposal or plan. The court may also grant a priority charge against the assets of the insolvent person in favor of the directors for an amount reasonably necessary to indemnify them against obligations and liabilities they may incur following the date of the filing and ending at the completion of the proceeding. The charge may be given priority over existing security. Notice is required to be given to secured creditors who are likely to be affected by the order granting the charge. Payment of Professional Costs In Division I proposals and CCAA cases, the court may make an order providing that the property of the debtor is subject to a charge to pay the expenses of professional advisers of any interested party if the court is satisfied that the order is necessary for the effective participation of the interested party. The charge may be given priority over existing security. Notice is required to be given to secured creditors who are likely to be affected by the order. Critical Suppliers In CCAA filings only, the court may make an order declaring a person to be a critical supplier and may make an order requiring continued supply on terms and conditions consistent with the supply relationship or on any basis the court considers appropriate. Critical suppliers must be given security by the court over the property of the debtor and such security may be given priority over any existing security. Notice is required to be given to secured creditors who are likely to be affected by the order. Unpaid Suppliers' Rights Unpaid suppliers have 15 days after bankruptcy or the appointment of a receiver to submit a written demand for goods delivered to the purchaser or the purchaser's agent (e.g., third-party warehouse) within 30 days before the bankruptcy or appointment of the receiver. Shareholder Approval The amending bill allows the court to order that the constating instrument of the debtor company be amended in accordance with the terms of the proposal or compromise or arrangement. The court may also order the sale of assets outside the ordinary course of business even if shareholder approval was not obtained. Plan Approval The court may establish a claims bar date in respect of voting rights for a plan and for inclusion in a class of creditors for the purpose of any distribution. Treatment of Equity Claims Claims arising from the purchase or sale of equity of the bankrupt or debtor company are subordinated to all other claims. The class of creditors having equity claims may not vote at any meeting unless the court orders otherwise. Creditors with equity claims are not entitled to a dividend until all other claims are satisfied. No proposal or compromise or arrangement that provides for payment of an equity claim is to be approved or sanctioned by the court unless all other claims are to be paid in full. Income Trusts Provisions have been added to deal with the insolvency of an income trust. Eligible Financial Contracts These changes were effected by the Budget Implementation Act, 2007 1. Definition of "eligible financial contract" is updated and moved to regulations to provide greater flexibility with respect to future updates. 2. Carve out for EFCs from the application of the stay provisions is clarified. 3. Ability of parties to terminate EFCs post insolvency filing (i.e., impact of the ipso facto provision) does not apply to EFCs. Aircraft Objects Provisions have been added regarding the treatment of aircraft objects in Division I proposals and CCAA cases. UNCITRAL The principles of the UNCITRAL Model Law, or the United Nations Commission on International Trade Law, on Cross-Border Insolvencies are adopted. CCAA Oversight The Office of the Superintendent of Bankruptcy will maintain a public registry of CCAA filings and will have supervisory powers in relation to the conduct of monitors under the CCAA. CCAA Process Provisions have been introduced with a view to making the process under the CCAA more transparent (i.e., notice provisions, cash- flow statements on a weekly basis, etc.). Consumer Issues Bankrupts with High Income Tax Debt Bankrupts with personal income tax debt in an amount exceeding $200,000, representing 75% or more of total unsecured proven claims, will not be eligible for an automatic discharge. Surplus Income First-time bankrupts who have surplus income are required to contribute the surplus to their estate for 21 months and second- time bankrupts are required to contribute for 36 months, subject in both cases to a change in circumstances that impacts on the surplus income obligation. Definition of Income The definition of "total income" has been amended to include amounts received by the bankrupt between the date of bankruptcy and the date of discharge, including amounts for wrongful dismissal, pay equity settlements or workers' compensation, but not including amounts received during the same time period as a gift, inheritance or other windfall. A requirement to pay surplus income is enforceable against income that would otherwise be exempt, and income earned but not yet received is included in the definition of "total income." Income Tax Refunds Income tax refunds for both the pre- and post-bankruptcy period will form part of the estate of the bankrupt. There is a carve out for the portion of the income tax refund that is garnishable money under a summons for child and spousal support. Post-Discharge Payment Agreements Agreements regarding the payment of trustee's fees and expenses are permissible and enforceable post-discharge provided: (1) the bankrupt's income is below the level where a surplus income obligation would arise; (2) the amount to be paid under the terms of the agreement does not exceed a prescribed amount; and (3) the payments do not extend beyond 12 months following discharge. RRSP Exemptions Amounts held in Registered Retirement Savings Plan, or RRSPs, are exempt from seizure in bankruptcy, subject to a possible clawback for contributions made in the 12 months preceding bankruptcy. Where provincial legislation exempts RRSPs from execution, the provincial legislation will apply. Where provincial legislation is silent regarding the treatment of RRSPs, they will be exempt subject to the clawback referred to above. Definition of Consumer Debtor A consumer proposal may be filed by someone with up to $250,000 in debts, excluding mortgages on their principal residence. Discharge of Second-Time Bankrupts Second-time bankrupts are eligible for an automatic discharge after 24 months (36 months if they have surplus income). Student Loans The waiting period before which a student loan may be discharged is reduced from 10 years to 7 years. The period before which an application may be made to court to request a discharge on the basis of hardship is reduced from 10 years to 5 years. The new time frame of 7 years will apply to all those who file for bankruptcy after the coming into force date and to undischarged bankrupts, i.e., student-loan borrowers who have become bankrupt but who have not yet been discharged. Section 178(1.1), or the "hardship provision," will be available to all bankrupts, including those who have been discharged prior to the coming into force of the provision. Consumer Proposal Default Administrators of consumer proposals are given discretion to "revive" a consumer proposal that would otherwise be deemed annulled. Creditors retain the right to object to the revival of the consumer proposal. Courts are given the power to make an order reviving the consumer proposal on any terms the court considers appropriate. An application to court for an order reviving a consumer proposal that has been deemed annulled may be made at any time. The amending bill has extended the time frames in which the administrator of the consumer proposal may send the notices to revive a consumer proposal. Inadvertent Discharge of Section 178 Claims Section 178 claims will not be discharged in a proposal except if the proposal explicitly provides for the compromise of the section 178 claims and the creditor votes in favor of the proposal. Debts not Released by Order of Discharge Debts for services obtained through false pretenses or fraudulent misrepresentations, together with debts for property obtained in such circumstances, will be included as undischargeable debts. Collection against Undischarged Bankrupts Where Trustee Discharged Creditors may realize against the property of a bankrupt without leave of the court if the trustee has been discharged and the bankrupt remains undischarged. Mandatory Counseling Debtors making a consumer proposal will have to undergo mandatory counseling in order to receive a certificate of full performance. Bankrupts who have refused to attend mandatory counseling will not be eligible for an automatic discharge. Statement of Affairs in Proposals A statement of affairs is required to be completed in all proposals. Other Issues Voting Issues or Non-Arm's-Length Voting Rights If the outcome of a vote at a meeting of creditors is determined by the vote of one or more persons who did not deal with the debtor at arm's length within the one-year period before bankruptcy, the chair redetermines the outcome not taking the vote of those creditors into account. This then becomes the outcome of the vote unless an application is made to court within 10 days and the court determines another outcome. In an application to revoke or vary a decision regarding the outcome of a vote, the court may suspend the effect of the vote. Professional Conduct Provisions Amendments were made to the professional conduct provisions that add clarity to issues that have arisen in various court proceedings. Legal Opinion In order for a trustee of an estate to act for a secured creditor in realizing on its security, the trustee must obtain an opinion that the security is valid from independent legal counsel. Orderly Payment of Debts Provinces that have chosen to "opt in" to the Orderly Payment of Debts provisions may also "opt out." A full-text copy of the summary of the legislative amendments is available for free at http://ResearchArchives.com/t/s?2ffa * Raymond Chabot Expands Service Offering with Synerma Acquisition ------------------------------------------------------------------ Raymond Chabot Grant Thornton acquired Synerma, a management consulting firm specializing in strategic cost management. "The firms have very complementary expertise, since Synerma is recognized for its strategic cost management and Raymond Chabot Grant Thornton has in-depth knowledge of its geographical and sector markets," Pierre Monette, vice-president, of Raymond Chabot Grant Thornton's Montreal region, declared. "Such an alliance creates a major competitive advantage in the strategy and organizational performance consulting services market." "We decided to accept Raymond Chabot Grant Thornton's offer to purchase since both of our firms are very successful primarily due to the quality of the services we provide," Daniel Dube, President and chief executive officer of Synerma, stated. "It is one of the fundamental aspects of our respective cultures and an integral part of the client approach of our firms' professionals." Headquartered in Quebec, Canada, Synerma -- http://www.synerma.com/-- is a consulting firm that specializes in corporate performance management. Synerma's professionals built their reputation through the completion of assignments, involving strategic cost management methodologies. Raymond Chabot Grant Thornton -- http://www.rcgt.com/-- is a firm specializing on assurance, taxation, consulting, turnaround and insolvency services. Founded in 1948, the firm has more than 2,000 employees, including over 240 partners, operating in more than 90 offices across Quebec, eastern Ontario and New Brunswick. * BOOK REVIEW: Corporate Players: Designs for Working and Winning Together ------------------------------------------------------- Author: Robert W. Keidel Publisher: Beard Books Paperback: 276 pages List Price: $34.95 Order your personal copy at http://amazon.com/exec/obidos/ASIN/1587982587/internetbankrupt In American business, the metaphor of the sports team is commonly used for business groups of all sizes -- from ad hoc teams of a few members that deal with temporary problems to groups of executive managers who are responsible for long-term corporate survival and the profitability of an entire organization. The sports team is a favored metaphor because sports bring individuals with different talents and different responsibilities together to perform a particular activity and pursue a common objective. Within its framework, sports also allow for the outstanding performance of particular individuals and recognition of that performance. The sports tem metaphor has become so common in business and so routinely applied to business teams of all sorts and sizes that little thought is usually given to its specifics. Corporate Players -- Designs for Working and Winning Together takes a close look at what makes a sports team function effectively and win. The author then applies these observations to develop a plan for those in the corporate world to be as successful as those in the sports world. While a reprint of a 1988 book, the lessons in this book are timeless. Keidel identifies three main types of teams found in business: autonomy, control and cooperation. The author relates each to a particular type of sports team: autonomy for baseball, control for football and cooperation for basketball. A chart compares differences among the three with respect to organizational strategy, organizational structure, and organizational style. For instance, the organizational strategy for autonomy in base ball is "adding value through star performers"; while the organizational strategy for cooperation in basketball is "innovating by combining resources in novel ways." With a sharp analytic eye and decades of experience in different aspects of business, including academic and government positions, Keidel delves into the specifics of business groups as sports teams. A fundamental point often overlooked by businesspersons is that teams in different sports are different in significant ways. An understanding of these differences is crucial for executives, managers, and consultants who are responsible for conceptualizing a team in relation to a particular business matter and then bringing together a team of individuals. As such, executives, managers and consultants have roles similar to a general manager and coach of a sports team. In some case, they may also have the role of a player on the team. This chart and other aids, together with the author's engaging commentary and enlightening analyses, will help business leaders select the right personnel, assemble a team capable of performing the task at hand, and then coordinate all of the players to accomplish the desired objective. Robert W. Keidel has a Ph.D. from Wharton, and has also been a Senior Fellow at this top business school. An author of three other books and many articles, he teaches courses in business strategy, technology, and organization at Drexel University's Lebow College of Business. Robert Keidel Associates is his business consulting firm. ********* 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 ***