/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/080820.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, August 20, 2008, Vol. 12, No. 198 Headlines ADELPHIA COMMS: Reports on Status of Distributions Under Plan ADELPHIA COMMS: Delivers Plan Status Reports for 2nd Qtr. 2008 ADELPHIA COMMS: Court Finds Insufficient Basis for $44 Mil. Claim AFFINITY TECHNOLOGY: Files for Ch. 11 Bankruptcy in South Carolina ASARCO LLC: Asbestos Debtors Want to Obtain $10 Mil. DIP Loan ASARCO LLC: Court Extends Lease Decision Period to January 1 ASARCO LLC: To Pay $143 Million for Cleanup of Montana Sites ATHENA CDO: Moody's Withdraws Ba2 Priority Rating of Senior Notes ATLANTIC WIRE: Case Summary & 20 Largest Unsecured Creditors ATLANTIS PLASTICS: Selling Plastic Films to AEP Industries ATLANTIS PLASTICS: Moody's Cuts Default Rating to D from Ca/LD BARBEQUES GALORE: Files for Chapter 11 Bankruptcy in California BARBEQUES GALORE: Case Summary & 20 Largest Unsecured Creditors BCBG MAX: S&P Hikes Rating to 'B-' on Covenant Changes BEAR STEARNS TRUST: S&P Affirms BB, B Ratings on 6 Classes BEAR STEARNS TRUST: S&P Cuts Rating on Class Q Securities to CCC+ BLOUNT INTERNATIONAL: June 30 Balance Sheet Upside-Down by $33.3MM BLUEPOINT RE: S&P Cuts Rating to 'R' After Liquidator Named BOB'S STORES: Versa & Crystal Capital Complete Acquisition CENTRAL GARDEN: 10-Q Results to be Delayed Due to Employee Issues CHARITY CHRISTIAN: Voluntary Chapter 11 Case Summary CHRYSLER LLC: In Talks With Mahindra Over Infringement Issue CLOROX COMPANY: June 30 Balance Sheet Upside-Down by $350 Million CROSS CREEK: Voluntary Chapter 11 Case Summary CWCAPITAL COBALT: S&P Lowers Ratings on Class G Notes to B DAYTON SUPERIOR: S&P Puts 'B' Credit Rating on Watch Negative DIABLO GRANDE: R.W. Hertel Faces Civil Liability Complaint DUNE ENERGY: June 30 Balance Sheet Upside-Down by $66.1 Million DUNMORE HOMES: Panel Wants S. Dunmore's Objection to Plan Rejected DUNMORE HOMES: Wants Settlement with Travelers, et al. Approved DUNMORE HOMES: Seeks to Junk Interests in Non-Debtor Subsidiaries DUNMORE HOMES: Sidney Dunmore Held from Disposing 2007 Tax Refund EDWARD ZIMBRICK: Case Summary & 10 Largest Unsecured Creditors FORD MOTOR: S&P Holds Rating on Plan to Buy Back Ford Credit Debt FORD MOTOR: Auto Owner Trust Class D Notes Get S&P's BB+ Rating FOREST OIL: S&P Says BB- Ratings Not Affected by Acquisitions FREEDOM COMMS: Lowered to 'CCC+'; S&P Sees Likely Covenant Breach GEMINI AIR: Sells Air Cargo Biz to Laurus for $15 Million GLEN ROSE: Hein & Associates Expresses Going Concern Doubt GOLD CREEK: Case Summary & 19 Largest Unsecured Creditors HARRY QUADRACCI: Files for Chapter 11 Bankruptcy HENRY WILLIAMS: Voluntary Chapter 11 Case Summary ICE OASIS: Voluntary Chapter 11 Case Summary IGNACIO VALDIVIA: Case Summary & Four Largest Unsec. Creditors IMPAC CMB: Foreclosures Cue Moody's to Junk Class M-4's Rating INTERSTATE BAKERIES: Union Asks Ripplewood to Protect IBC Jobs ISLAND DEVELOPERS: Case Summary & 20 Largest Unsecured Creditors JPMORGAN TRUST: S&P Affirms BB, B Ratings on Six Classes KIMBALL HILL: Has Until October 20 to File Chapter 11 Plan KIMBALL HILL: Has Until November 19 to Decide on Pacts and Leases KIMBALL HILL: Seeks to Exit From Chapter 11 in Late 2008 LANDSOURCE COMMUNITIES: Panel Wants Data on Prepetition Loan LANDSOURCE COMMUNITIES: Panel Objects to Employment of CROs LANDSOURCE COMMUNITIES: Panel Wants Deadline on Lien Motions Moved LBI MEDIA: Moody's Lowers $270 Senior Loans' Rating to Ba2 LETTUCE FIELDS: Case Summary & 20 Largest Unsecured Creditors LINENS 'N THINGS: Gets Vendors OK on Trade Vendor Payment Program LONGHORN CDO: Moody's Lowers Ba1 $6.6MM Sec. Notes' Rating to B1 MAGNA ENTERTAINMENT: Selling Ocala, Florida Asset for $16.5MM Cash MEGA BRANDS: Amends Credit Deal, Closes C$75MM Debentures Offering MFS INVESTMENT: Reports Redemption Dates for Percentage of ARPS NCOAT INC: Hansen Barnett Expresses Going Concern Doubt NORTH FOREST ISD: S&P Cuts Gen. Obligation Debt Ratings to 'B' NUVEEN INVESTMENTS: S&P Revises Outlook to Negative; B+ Affirmed PACIFIC LUMBER: S&P Lowers Ratings on Scopac Timber Notes to 'D' PRC LLC: Inks Stipulation Resolving Sprint Communications Dispute PRC LLC: Names Steve K. Richards as Chief Executive Officer PROTECTION ONE: June 30 Balance Sheet Upside-Down by $51.8 Million QUEBECOR WORLD: Long-Term Partnership With PARADE Extended REDDY ICE: Poor Credit Cues Moody's to Junk $151MM Notes' Rating REDDY ICE: S&P Holds 'B+' Ratings; Outlook Revised to Negative ROBERT LESLIE: Case Summary & Three Largest Unsecured Creditors SABINES PASS: Moody's Holds Senior Secured Notes' Rating at B2 SAGECREST FINANCE: Files for Bankruptcy to Stave Off Foreclosure SAGECREST FINANCIAL: Voluntary Chapter 11 Case Summary SAVE OUR SPRINGS: Presses for Delay of Chapter 11 Case Dismissal SEMCANADA ENERGY: Pays C$1.8MM for B.C. Natural Gas Customers SEMGROUP LP: Section 341(a) Meeting Scheduled for September 9 SEMGROUP LP: U.S. Trustee Wants Chapter 11 Examiner Appointed SEMGROUP LP: Bankruptcy Cues Unit to Delay Quarterly Filing SEMGROUP LP: More Parties Oppose $250,000,000 DIP Financing SPECIALIZED TRAINING: Voluntary Chapter 11 Case Summary STRONGCO INCOME: Gets Waiver for Covenant Violation, Amends Deal SUNWEST MANAGEMENT: Files Chapter 11 Petition After Loan Default STEVE & BARRY'S: WSJ Says Bay Harbour Leads Bidding SYNTAX-BRILLIAN: Insists that Sale of Assets is Best Alternative TAHOE RENO: Case Summary & Three Largest Unsecured Creditors TILE & STONES: Files for Chapter 11 Protection in Florida TILES & STONES: Case Summary & 41 Largest Unsecured Creditors THOMAS INDUSTRIES: To Hold Auction of Assets on September 26 TRIBUNE CO: Negative Earnings Broaden Possibility of Default TRIBUNE CO: LA Times Unit Appoints Eddy Hartenstein as Publisher TROPICANA ENT: Court OKs Capstone Advisory as Panel's Fin. Advisor TROPICANA ENT: Nevada Gaming Permits New Board to Manage Biz UAL CORP: Names Kathryn Mikells as Senior Vice President and CFO UNO RESTAURANT: Cut to 'D'; S&P Doesn't Expect Interest Payment US WEB: Files for Chapter 11 Bankruptcy in New York US WEB: Case Summary & 19 Largest Unsecured Creditors VALCOM INC: Court Confirms Second Amended Chapter 11 Plan VERASUN ENERGY: Moody's Confirms Rating on $450MM Sr. Notes at B3 VION PHARMACEUTICALS: Nasdaq to Delist Securities on August 15 WACHOVIA CORP: Inks Deal to Settle Auction Rate Securities Probe WACHOVIA TRUST: S&P Cuts Ratings of Six Classes to CCC, D WELLMAN INC: Panel Wants to Cut Financial Advisor's Monthly Rate WEST GALENA: Plan Turns Over Condo to Secured Lender Owed $53MM WILD EDIBLES: Tavern Cuts Biz Ties, Says Employee Rights Group WILLIAM HEROLD: Case Summary & 20 Largest Unsecured Creditors * S&P Cuts 97 Ratings on US Synthetic CDOs at July Month-End Run * S&P Cuts 31 Ratings on 4 CDO Deals to 'D' After Liquidations * S&P Cuts Ratings on 64 Classes from 57 US RMBS to 'D' * S&P Cuts 248 Ratings on 20 1st-Half 2007 Prime Jumbo RMBS Deals * S&P Says US Auto Makers Driving Weakest Links' Debt Volume * S&P Says CMBS Delinquency Rate Slightly Better Thus Far * Loan Covenants Snag Retailers' & Restaurants' Credit, S&P Says * Speculative-Grade Firms Fall as Defaults Rise, S&P Article Says * Bankruptcy Filings Up Two-Folds in July and August * Bankruptcy Filings in W.D. North Carolina Up More than 11% in H2 * Weil Gotshal Appoints Michael J. Lyle as Managing Partner * Thompson Hine Adds Associates for BL and C&P Finance Practice * Upcoming Meetings, Conferences and Seminars ********* ADELPHIA COMMS: Reports on Status of Distributions Under Plan ------------------------------------------------------------- Pursuant to (i) the confirmed First Modified Fifth Amended Joint Chapter 11 Plan of Adelphia Communications Corporation and its affiliates, and (ii) the confirmed Third Modified Fourth Amended Joint Chapter 11 Plan of the Century-TCI Debtors and Parnassos Debtors, the Reorganized Debtors relate that they have sent distributions to holders of allowed claims under the Plan. The Reorganized Debtors, however, notify the U.S. Bankruptcy Court for the Southern District of New York that since the Plan effective date: (a) The distribution of cash and shares of Time Warner Cable Inc. was returned by 36 holders of allowed claims for one or more reasons. A list of Refused Funds is available for free at: http://researcharchives.com/t/s?30e7 (b) The distribution of cash and shares of Time Warner Cable to 460+ holders of allowed claims were returned to the Debtors as undeliverable to the claim holders. A list of the Undeliverable Funds is available for free at http://researcharchives.com/t/s?30e8 (c) Checks intended for cash distributions to 500 allowed claims remain uncashed since the Checks were neither negotiated within 120 days after the date of the issuance, nor did the Plan Administrator receive request for reissuance within 300 days after the Checks were issued. A list of the Uncashed Funds is available for free at: http://researcharchives.com/t/s?30e9 (d) The cash distribution in the form of a check to 66 allowed claim holders was either returned to the Century-TCI Debtors and Parnassos Debtors or the Joint Venture Debtors as undeliverable to the claimholder or remains uncashed. A list of the JV Unclaimed or Undelivered Funds is available for free at: http://researcharchives.com/t/s?30ea The Reorganized Debtors assert that as the distributions of the Undeliverable Funds were sent six months ago, the Plan Administrator can now utilize those distributions for other holders of allowed claims. The Uncashed Funds, the Reorganized Debtors add, are now available for distribution by the Plan Administrator to other holders of allowed claims. As the JV Checks have been unclaimed for over one year, the Reorganized Debtors maintain those checks are available for distribution to other holders of allowed claims. Objections to the Claim Satisfaction Notice were due by August 11, 2008. If no party objects, the Reorganized Debtors will pronounce the claims to have been satisfied and that they will have no further obligation to make distributions under the JV Plan. Responses In separate filings, BellSouth Telecommunications, Inc., doing business as AT&T Southeast and Park Stanton Place, Ltd., and Park Stanton Place, LP, dispute the Claim Satisfaction Notice. AT&T Southeast notes the Debtors has sought to void these distributions: Entity Amount Reason ------ ------ ------ AT&T Language Line $875 & Returned as Services 2 shares undeliverable & no valid address provided BellSouth $31 Uncashed for more than 120 days BellSouth $422 Uncashed for more than 120 days BellSouth $805 Uncashed for more than 120 days BellSouth Professional $144 Uncashed for Services more than 120 days AT&T explains that the Debtors made the distribution for AT&T Language Line to a company that is no longer affiliated with AT&T. Furthermore, AT&T avers, the other distributions were either mailed by the Debtors to AT&T payment lockboxes or directed to a non-existent entity. AT&T asserts the Debtors has known AT&T's address since January 2003, but instead of being alerted that the distributions remained uncashed, the Debtors made no attempt to determine the correct address of AT&T. Hence, AT&T asks the Court to allow the AT&T distributions, and direct the Debtors to make the payments to it without delay. George Morrison, controller of Park Stanton, complains that the delivery address for the distributions for the Undeliverable and Uncashed Funds to Park Stanton are erroneous. He avers that the correct address is 8383 Wilshire Blvd., Suite 630, in Beverly Hills, California 90211. Accordingly, Park Stanton asks the Court to: -- compel the Debtors to use the correct address on its records; and -- direct the Debtors to reissue the funds and shares to Park Stanton using the correct address. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 189; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Delivers Plan Status Reports for 2nd Qtr. 2008 -------------------------------------------------------------- Adelphia Communications Corporation and its affiliates have delivered to the U.S. Bankruptcy Court for the Southern District of New York post-confirmation status reports to apprise the Honorable Robert E. Gerber of their consummation of the confirmed First Modified Fifth Amended Joint Chapter 11 Plan. The Reorganized Debtors filed their latest post-confirmation reports on July 18, 2008, covering developments in their Chapter 11 cases for the period from March 31, 2008, through June 30, 2008. The Reorganized Debtors relate they have taken these steps in connection with the consummation of the Plan: * Completed the fifth newly Allowed Claims Distribution on May 6, 2008, distributing $900,000 in cash and 782 shares of Time Warner Cable Class A Common Stock to holders of the Newly Allowed Claims. * Obtained Bankruptcy Court approval for supplemental claim orders, stipulations and settlements resolving 45 Disputed Claims, including the claims of General Dynamics and QVC totaling $53.7 million. The Debtors aver they yet have to resolve 130 Disputed Claims. * Distributed $2 million in principal and pre-effective date interest to the Allowed Bank Claim holders, which complied with the submission of Section 5.2(c)(v) certificates. About $68.8 million in principal and pre-effective date interest, including $5,100,000 under the JV Plan, remains undistributed. * Released $5.7 million of holdbacks of certain professionals retained in the Debtors' Chapter 11 cases, including the final fee applications of 45 professionals. Remaining holdbacks to be released total $4.4 million for 12 professionals. * Closed sale of the Adelphia headquarters building for $3.6 million on April 3, 2008. * Relocated administrative offices in Denver reducing square footage by 30,000 square feet and operating expenses by $57,000 per month. Jeffrey A. Brodsky of Quest Turnaround Advisors, LLC, as Plan Administrator of the Reorganized Debtors, reports these activity for the period from March 31, 2008, through June 30, 2008. Cash Stock Total ------------ ------------ ------------ Balance at 3/31/08 $736,504,899 $138,088,549 $874,593,448 Additions 5,919,314 0 5,919,314 Interest Income 4,684,800 0 4,684,800 Plan Disbursements (18,109,849) (23,329,444) (41,439,293) Operating Costs (7,592,167) 0 (7,592,167) ------------ ----------- ------------ Balance at 06/30/08 $721,406,997 $114,759,105 836,166,102 The amounts listed under the column "Stock" reflect the New Deemed Value of the TWC Class A Common Stock for $37 and its closing price for $26 at June 30, 2008, Mr. Brodsky explains. Thus, the fair market value of the remaining stock on June 30, 2008 was $80.4 million. The "Additions" included net cash receipts for $3.4 million from the Headquarters Sale, Hurricane Wilma insurance refund for $1.8 million, QVC receivable settlement for $500,000 and other miscellaneous cash receipts for $200,000. "Operating Costs" include professional expenses for $4.4 million, payroll, benefits and bonus payments for $2.1 million, professional expenses related to pre-emergence periods of $700,000 and other overhead expenses for $400,000. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 189; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ADELPHIA COMMS: Court Finds Insufficient Basis for $44 Mil. Claim ----------------------------------------------------------------- The Honorable Cecelia Morris of the U.S. Bankruptcy Court for the Southern District of New York denied a $44 million claim asserted by Lucent Technologies Inc. and sustained Adelphia Communications Corp.'s objection to that claim. The matter before the Court is Adelphia Communication Corp.'s objection to the proof of claim of Lucent for $44,721,519. The Lucent Claim is primarily based on Delaware's Revised Uniform Limited Partnership, where under the DLPA, Lucent seeks to hold ACOM liable for the debt of Devon Mobile Communications, L.P., under an agreement between Lucent and Devon. The Lucent-Devon Contract was inked in October 2000, where Lucent provided a wireless network or sold wireless equipment to Devon. Devon was formed by ACOM and Devon G.P. as a Delaware limited partnership in 1995. Lucent had the burden of proof. If Lucent was to prevail on its claim under the DLPA, it had to: -- prove the threshold issue of "control" under the DLPA; and -- show reasonable belief that ACOM is a general partner of Devon. Through a five-day trial in June 2008, Judge Morris listened to live testimony from several witnesses and reviewed numerous exhibits. Upon deliberation, Judge Morris opined that Lucent has failed to establish a prima facie case under the DLPA. The Court found that majority of the evidence offered by Lucent at the trial failed to differentiate as to conduct of ACOM or Adelphia Business Solutions, Inc., an ACOM affiliate. Much of the remaining evidence revealed that Lucent's confusion as to which entity was responsible for the debts of Devon was due to its own internal miscommunication or misplaced priorities, Judge Morris held. "Still other documents suggest," Judge Morris said, "Lucent knew perfectly well that AC[OM] was a limited partner of Devon; in other words, these documents suggest that Lucent had no belief, reasonable or otherwise, that AC[OM] was the general partner of Devon or that AC[OM] would be liable for the debts of Devon." Further undermining Lucent's "reasonable belief" claim is its conduct, Judge Morris asserted. The Court noted that after the signing of the Lucent-Devon Contract, during the time that Lucent was required to fulfill Devon purchase orders but prior to the time when Lucent could begin issuing invoices under that contract, ABIZ announced the cancellation of about $110 million of orders. "This circumstance caused Lucent to begin re- evaluating ABIZ's credit-worthiness and ultimately its exposure under the Lucent-Devon Contract. Lucent then devised a series of 'strategies' to obtain payment from ABIZ and/or AC[OM]," Judge Morris pointed out. Evidence at trial, the Court held, suggests that Lucent did not transact business based on a belief that ACOM would be liable as a general partner of Devon. "Rather Lucent's decisions appear to have been motivated by its aggressive sales department that ignored or strong-armed its billing and credit department, and did not involve the legal department until it was too late," Judge Morris said. A full-text copy of the 71-page Memo Decision on Lucent's "Prima Facie Case" argument of its claim is available for free at: http://researcharchives.com/t/s?30e6 Lucent subsequently informed the Court of its withdrawal of the DLPA Claim to the extent that it was based on the other theories of liability. Against these backdrop, the Court granted summary judgment of the Lucent's DLPA Claim in ACOM's favor. Judge Morris denied the Lucent Claim in its entirety and sustains ACOM's objection to the Claim. About Adelphia Comms Based in Coudersport, Pennsylvania, Adelphia Communications Corporation (OTC: ADELQ) -- http://www.adelphia.com/-- is a cable television company. Adelphia serves customers in 30 states and Puerto Rico, and offers analog and digital video services, Internet access and other advanced services over its broadband networks. The company and its more than 200 affiliates filed for Chapter 11 protection in the Southern District of New York on June 25, 2002. Those cases are jointly administered under case number 02-41729. Willkie Farr & Gallagher represents the Debtors in their restructuring efforts. PricewaterhouseCoopers serves as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman, LLP, and Klee, Tuchin, Bogdanoff & Stern LLP represent the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas Manged Entities, are entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for chapter 11 protection on March 31, 2006 (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642). Their cases are jointly administered under Adelphia Communications and its debtor-affiliates' chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Modified Fifth Amended Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. (Adelphia Bankruptcy News, Issue No. 189; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). AFFINITY TECHNOLOGY: Files for Ch. 11 Bankruptcy in South Carolina ------------------------------------------------------------------ Affinity Technology Group, Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of South Carolina after failing to pay a judgment to Temple Ligon from a lawsuit dated Nov. 30, 1996. The lawsuit alleged that the company breached an agreement to give Mr. Ligon a 1% equity interest in the company in consideration of services he claims to have performed in 1993 and 1994 in conjunction with the formation of the company. Mr. Ligon sought monetary damages of $5,463,000. According to the company's regulatory filing with the Securities and Exchange Commission, it incurred substantial operating losses and needs to use enough amount of cash to fund its operations. At June 30, 2008, the company had cash and cash equivalents of $16,861 and a working capital deficit of $4,909,628. "We are obviously disappointed that we have had to file for bankruptcy," said Joe Boyle, Chairman, president and chief executive officer of Affinity. "However, as we have previously announced, our financial resources are nearing exhaustion, and due to the limitations placed on our patents in May by the United States Court of Appeals for the Federal Circuit, we believe the further pursuit of our patent licensing program and the raising of additional capital necessary to continue such pursuit is not a realistic alternative." "Accordingly, our plan is to offer our patents for sale in an orderly process while we are in Chapter 11 and to avoid a Chapter 7 liquidation, in which a court-appointed trustee would execute the sales process," Mr. Boyle said. "It is possible, however, that our limited resources or other factors could later force us to convert our Chapter 11 case to a Chapter 7." Financial Results The company reported $8,000 in revenues with a net loss of $514,000 for the second quarter and six months ended June 30, 2008. Second quarter 2007 revenues were $8,000 and the Company reported a net loss of $476,000. The weighted average number of shares outstanding during the three months ended June 30, 2008 was 47,100,000, compared to 45,300,000 for the same period in 2007. For the first six months of 2008, revenues were $17,000,000, with a net loss of $742,000,000. Revenues for the comparable period in 2007 were $17 thousand, with a net loss of $919,000. The weighted average number of shares outstanding during the six months ended June 30, 2008, was 47,100,000, compared to 45,300,000 for the same period in 2007. A full-text copy of the company's consolidated balance sheets for the quarter ended June 30, 2008 is available for free at: http://ResearchArchives.com/t/s?30f1 Through its subsidiary, decisioning.com, Inc., Affinity Technology Group, Inc. (OTCBB:AFFI) -- http://www.affi.net/-- owns a portfolio of patents that covers the automated processing and establishment of loans, financial accounts and credit accounts through an applicant-directed remote interface, such as a personal computer or terminal touch screen. Affinity's patent portfolio includes U.S. Patent No. 5,870,721C1, No. 5,940,811, and No. 6,105,007. ASARCO LLC: Asbestos Debtors Want to Obtain $10 Mil. DIP Loan ------------------------------------------------------------- Lac d' Amiante du Quebec Ltee, Lake Asbestos of Quebec, Ltd., LAQ Canada, Ltd., CAPCO Pipe Company, Inc., and Cement Asbestos Products Company -- the Asbestos Subsidiary Debtors -- seek permission from the U.S. Bankruptcy Court for the Southern District of Texas to obtain up to $10,000,000 of senior secured intercompany debtor-in-possession term loan from ASARCO LLC. The Asbestos Debtors, according to their counsel, Kevin J. Franta, Esq., at Jordan, Hyden, Womble, Culbreth & Holzer, P.C., in Corpus Christi, Texas, have no operations and are not generating any income, and thus are unable to obtain unsecured credit to continue to fund their reorganization fees, costs, and expenses. The Asbestos Debtors believe that it is reasonable to borrow the necessary funds to continue to meet their Chapter 11 obligations and maintain the administrative solvency of their estates. Specifically, Mr. Franta says the DIP Loans will be used by the Asbestos Debtors to provide working capital to fund (a) professional fees and expenses, (b) taxes and other statutory fees and costs, (c) fees of the Office of the U.S. Trustee as required by law, and (d)administrative expenses incurred in the ordinary course of business. ASARCO believes that under the circumstances an intercompany loan is a sound exercise of its business judgment. ASARCO, according to its counsel, James R. Prince, Esq., at Baker Botts L.L.P., in Dallas, Texas, has an interest in ensuring that the Asbestos Debtors continue to meet their obligations in the Reorganization Cases. The salient terms of the DIP Agreement are: Closing Date: Later of three business days after entry of a final DIP order Termination Date: All commitments under the DIP Facility will terminate at the earliest of (a) April 1, 2009, or (b) the effective date of any plan of reorganization of the Borrowers or ASARCO. Interest Rate: The interest rate for advances under the line of credit will be at a rate equal to 5.00% Interest Payments: Interest on the outstanding principal of the DIP Facility will accrue each month and will be due and payable on the Commitment Termination Date. Interest will be computed on a 365/366-day basis. Advances: Advances will be in principal amounts equal to invoices for professional services and other approved expenses of the Borrowers. Advances will be limited to twice each calendar month following the Lender's receipt of the Monthly Statements. All Advances, once paid, may not be re-borrowed. Repayment: The Borrowers will repay each Advance, together with all accrued but unpaid interest, no later than on the Commitment Termination Date. Lender reserves the right to credit all amounts due under the DIP Facility as a portion of Lender's contribution to a 524(g) trust under a confirmed Chapter 11 plan. Collateral: To secure all obligations under the DIP Facility, Borrowers will grant to Lender, pursuant to Section 364(c)(2) of the Bankruptcy Code, a first priority lien on all of Borrowers' properties and their proceeds. Conditions Precedent to Closing: Customary conditions, including, but not limited to, appropriate Board and bankruptcy court approvals. Conditions Precedent to all Advances: Customary conditions, including, but not limited to (a) delivery of the Monthly Statements that is satisfactory to Lender, and (b) no Default or Event of Default has occurred and is continuing, or would result from the Advance. Representations and Warranties; Covenants: Customary covenants, including but not limited to, (a) preservation and maintenance of corporate existence; (b) compliance with laws; and (c) payment of taxes and statutory fees and costs due and payable. Events of Default: Customary events of default, including, but not limited to (a) failure to pay principal and interest when due, (b) material breach of a covenant that is not cured within 30-day notice period, or (c) a material adverse change. Set-off Rights: Lender will be entitled to normal set-off rights and recoupment rights, including with respect to any fundings made by Lender to a Section 524(g) trust under a confirmed Chapter 11 plan. Superpriority Claims: All obligations of Borrowers under the DIP Finance Agreement will constitute allowed super-priority administrative expense claims under Section 364(c)(1) on behalf of Lender. Governing Law: State of Texas Expenses: Each party will bear its own costs and expenses. 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. Stutzman, Bromberg, Esserman & Plifka, APC, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate was appointed as the future claims representative. 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). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for $2,600,000,000. (ASARCO Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: Court Extends Lease Decision Period to January 1 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Texas to further extend the time by which ASARCO LLC and its debtor- affiliates must decide on whether to assume or reject unexpired non-residential real property leases until Jan. 1, 2009. Judith W. Ross, Esq., at Baker Botts L.L.P., in Dallas, Texas, said the extension of the lease decision deadline is necessary to give the Debtors adequate time to evaluate the Leases in anticipation of a Court-approved exit from bankruptcy. Ms. Ross related that the Debtors are in the final stages of formulating their plan of reorganization, which must be filed by July 31, 2008. The Debtors, she said, anticipate that confirmation hearings and their successful exit from bankruptcy will occur in December 2008. 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. Stutzman, Bromberg, Esserman & Plifka, APC, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate was appointed as the future claims representative. 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). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for $2,600,000,000. (ASARCO Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ASARCO LLC: To Pay $143 Million for Cleanup of Montana Sites ------------------------------------------------------------ The state of Montana, in a press release, said it has entered into a settlement with ASARCO LLC, under which ASARCO will provide an additional $143,000,000 to the state to clean up industrial and mining sites owned by ASARCO. The agreement provides funding for cleanup of groundwater and soils contaminated by decades of lead smelting in East Helena, as well as additional cleanup of ASARCO-owned property at the Upper Blackfoot River, Iron Mountain, and the Black Pine/Combination Mining District sites. "This is good news and means more money for our booming restoration economy," Montana Governor Brian Schweitzer said. "We are going to put these new dollars to work on the ground creating more, good-paying jobs and cleaning up the mistakes of the past to make East Helena and Montana a better place for future generations." The $143,000,000 will be placed into a fund managed by a trustee. In turn, the trustee will restore the property as directed by the Montana Departments of Environmental Quality and Justice, and the federal Environmental Protection Agency, Department of Interior, Forest Service and Department of Justice. "ASARCO has agreed to pay $100 million for remediation at the East Helena site," Montana Attorney General Mike McGrath said. "It is part of the plan that we believe will ultimately restore the contaminated groundwater in East Helena." The settlement is part of ASARCO's joint plan of reorganization filed on July 31, 2008. "We are pleased that the new ASARCO -- unlike its predecessor - has been willing to recognize its responsibilities and negotiate in good faith to reach this settlement," McGrath said. "This time, Montanans won't be left holding the bag." In April 2008, ASARCO agreed to pay $37,000,000 to the State for the removal of the Mike Horse Dam on the Upper Blackfoot River and restore contaminated streams near the dam, and $8,100,000 to fund the cleanup of the Barker Hughesville mine site in Judith Basin and Cascade Counties. ASARCO also agreed to pay $2,200,000 for portions of the Iron Mountain site not owned by ASARCO. ASARCO Stipulates with PRPs to Resolve Several Issues ASARCO seeks approval from the U.S. Bankruptcy Court for the Southern District of New York of a stipulation it entered into with Atlantic Richfield Company, BP America, Inc., Amoco Oil, Amoco Production Company, Amoco Research Center and BP Amoco PLC, and Colorado School of Mines, to tackle the withdrawal under which the potentially responsible third parties agree to withdraw of the School's PRP Claim, and BP Amoco's Claim Nos. 10885, 10886, 10887 and 10888. The parties agree that the School and BP Claims will be withdrawn. The claims withdrawal is without adjudication or any determination of the validity of the PRP Claims. The PRPs are barred from asserting the same or any further claims at against the Debtors. Union Pacific & ASARCO Preserve Section 502 Disputes ASARCO and Union Pacific Railroad Company, in a stipulation, agree that their rights to raise, brief, and argue all issues related to Union Pacific's claims, including the applicability of Section 502(e)(1)(B) of the Bankruptcy Code, are preserved and not waived. Hecla Limited, a PRP, informed the Court that it will not submit a brief concerning the applicability of Section 502(e) to the sites where the settlements have been approved by the Court. * * * Judge Richard S. Schmidt approves the settlement agreement entered into among ASARCO, the U.S. Government, and the state of Idaho regarding the Coeur D'Alene Site. 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. Stutzman, Bromberg, Esserman & Plifka, APC, represents the Official Committee of Unsecured Creditors for the Asbestos Debtors. Former judge Robert C. Pate was appointed as the future claims representative. 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). Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining & Development Co., Ltd., Peru Mining Exploration & Development Co., and Green Hill Cleveland Mining Co. filed for Chapter 11 protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197 to 08-20202). The Debtors submitted to the Court a joint plan of reorganization and disclosure statement on July 31, 2008. The plan incorporates the sale of substantially all of the Debtors' assets to Sterlite Industries, Ltd., for $2,600,000,000. (ASARCO Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). ATHENA CDO: Moody's Withdraws Ba2 Priority Rating of Senior Notes ----------------------------------------------------------------- Moody's Investors Service withdrawn the rating on this note issued by Athena CDO Limited: Class Description: Second Priority Senior Notes -- Prior Rating: Ba2 -- Current Rating: WR According to Moody's, the rating action is a result of the notes being redeemed in full. ATLANTIC WIRE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Atlantic Wire Company, LLC 1 Church Street Branford, CT 06405 Bankruptcy Case No.: 08-32631 Type of Business: The Debtor manufactures low to medium carbon and alloy steel cold-heading wire and processed rod. It also provides custom coatings, soaps, and lubricants for the entire range of the fastener and wire-forming industries. See http://www.atlanticwireco.com/ Chapter 11 Petition Date: August 12, 2008 Court: District of Connecticut (New Haven) Judge: Lorraine Murphy Weil Debtor's Counsel: Elizabeth Theresa Arana, Esq. Brown Rudnick Berlack Israels LLP CityPlace I 185 Asylum Avenue Hartford, CT 06103 Tel: (860) 509-6513 Fax: (860) 509-6501 Email: EArana@brownrudnick.com Estimated Assets: $1 million to $10 million Estimated Debts: $10 million to $50 million Debtor's list of its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gerdau Ameristeel Trade Debt $1,194,280 P.O. Box 116660 Atlanta, GA 30368-6660 Arcelormittal Montreal, Inc Trade Debt $330,061 P.O. Box 1116 Detroit, MI 48231 NUCOR Trade Debt $179,476 P.O. Box 822361 Philadelphia, PA 19182-2631 Collins & Jewell Co. Inc. Trade Debt $122,999 Brasco Technologies Trade Debt $39,865 H.Krevit & Company Trade Debt $26,030 Tax Collector - Town of Branford Tax $22,513 Heatbath Corporation Trade Debt $17,863 McVAC Trade Debt $17,536 Linde, Inc. Trade Debt $12,822 Securitas Security Trade Debt $10,525 Ramco Recovery, Inc. Trade Debt $9,613 Summit Handling Systems Trade Debt $9,610 Abtrex Industries Trade Debt $9,236 Alpine Environmental Trade Debt $7,922 Services, LLC Streamline Press Trade Debt $5,929 Valley Container, Inc. Trade Debt $4,986 FLS Transportation Trade Debt $4,932 Air Compressor Trade Debt $4,837 Yellow Transportation, Inc. Trade Debt $4,647 ATLANTIS PLASTICS: Selling Plastic Films to AEP Industries ---------------------------------------------------------- Converting Magazine reports on Aug. 17, 2008, that Atlantis Plastics, Inc., has agreed, as part of its reorganization, to sell substantially all of the assets of its debtor-affiliate, Atlantis Plastic Films, Inc., to AEP Industries, Inc., of The Netherlands. According to Converting Magazine, Atlantis Plastics said that the proposed sale is subject to higher and better offers, bankruptcy court approval and other conditions. Atlantis anticipates closing on the deal in October 2008, says Converting Magazine. Converting Magazine added that Atlantis Plastics also announced that it has reached an agreement with a consortium of lenders led by GE Business Financial Services, Inc., for a $26.5 million post- petition financing facility, which will provide Atlantis with sufficient working capital and financial resources to continue normal business operations at all of its facilities. About Atlantis Plastics Atlanta, Georgia-based Atlantis Plastics Inc. manufactures specialty polyethylene films and molded and extruded plastic components used in a variety of industrial and consumer applications. It filed its chapter 11 petition on Aug. 10, 2008 (Bankr. N.D. Ga. Case Nos. 08-75473 through 08-75481) together with Atlantis Plastics, Inc., Atlantis Plastic Films, Inc., Atlantis Films, Inc., Atlantis Molded Plastics, Inc., Atlantis Plastics Injection Molding, Inc., Extrusion Masters, Inc., Linear Films, Inc., Pierce Plastics, Inc., and Rigal Plastics, Inc. David B. Kurzweil, Esq., at Greenberg Traurig, LLP, represents the Debtors in their restructuring efforts. They listed assets between of $100 million and $500 million and debts of between $100 million and $500 million. The Debtors owe The Bank of New York $75 million in unsecured loan and Equistar $1 million in unsecured trade debt. ATLANTIS PLASTICS: Moody's Cuts Default Rating to D from Ca/LD -------------------------------------------------------------- Moody's Investors Service revised the Probability of Default Rating of Atlantis Plastics, Inc. to D after the company's announcement it filed voluntary petitions for Chapter 11 reorganizations for itself and its subsidiaries. Moody's will withdraw the ratings within several days. Moody's took this rating actions: -- Revised, Probability of Default Rating, to D from Ca/LD Moody's previously downgraded the Probability of Default Rating to Ca/LD to reflect the company's failure to pay the interest on its $75 million junior term loan due 2012. Atlantis filed for Chapter 11 on August 10, 2008 to facilitate the sale of its Plastic Films and Molded Plastic Products businesses. The company said that it had reached definitive agreements to sell substantially all of the assets of its Plastic Films business to AEP Industries Inc. and substantially all of the assets of its Molded Plastics Products business to a subsidiary of Monomoy Capital Partners L.P., a New York based private equity fund. The proposed sales will be subject to higher and better offers, bankruptcy court approval and other conditions customary in transactions of this type. The company anticipates closing the sales in October 2008. The company also announced that it has reached an agreement with a consortium of lenders for a $26.5 million post-petition financing facility which will provide sufficient working capital and financial resources to continue normal business operations. Atlantis Plastics, Inc., headquartered in Atlanta, Georgia, is a manufacturer of specialty polyethylene films and molded and extruded plastic components used in a variety of industrial and consumer applications. Revenues for the twelve months ended March 30, 2008 were $404 million. BARBEQUES GALORE: Files for Chapter 11 Bankruptcy in California --------------------------------------------------------------- Barbeques Galore Inc. filed voluntary petition under Chapter 11 of the U.S. Bankruptcy Code before the U.S. Bankruptcy Court for the Central District of California, blaming slowdown in home sales, Bloomberg News reports. According to Bloomberg, a company official said the general collapse of the market from home sales and its inability to borrow from its bank lender compelled it to seek bankruptcy protection. The company listed assets and debts of between $10 million and $50 million each, the report says. The company said it intends to sell itself or come up with a plan of liquidation with its lenders, the report adds. The company has at most 5,000 creditors including Sakura Bath & Kitchen Products of Guanodong, China, which is asserting a $1.6 million claim against the company, the report says. In March 2008, the company borrowed $22 million from a line of credit with Wells Fargo Retail. The loan is secured by all of the assets of the company and that of its affiliates, Bloomberg says. As of July 30, 2008, the company had $12.6 million outstanding under the line of credit, the report notes. The company owes $38 million in unsecured debt to Ironbridge, which is subordinated to the credit line, the report relates. The company had $16 million in unsecured debts and $1.4 million in taxes, the report says. The company's affiliate Barbeques Galore Ltd. from Auburn, Australia, was excluded in the bankruptcy filing, the report says. Headquartered in Carlsbad, California, Barbeques Galore Inc., sells barbecues and accessories in its 65 stores in the United States. The company has at least 400 employees. BARBEQUES GALORE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Barbeques Galore, Inc. 2173 Salk Avenue, Suite 200 Carlsbad, CA 92008 Bankruptcy Case No.: 08-16036 Type of Business: The Debtor is a specialty retailer of barbeque and barbeque accessories. Chapter 11 Petition Date: August 15, 2008 Court: Central District Of California (San Fernando Valley) Judge: Hon. Maureen Tighe Debtor's Counsel: Jeffrey W. Dulberg, Esq. Pachulski Stang Ziehl & Jones LLP 10100 Santa Monica Blvd Ste 1100 Los Angeles, CA 90067 Tel: (310) 277-6910 Email: jdulberg@pszjlaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Grand Hall Enterprse Co. Ltd. Trade Debt $3,999,792 9th Floor No. 298 Rueigang Road Neihu, Taipei Taiwan Sakura Bath & Kitchen Products Trade Debt $1,639,805 No. 2 Ronggui South Road Ronggui Town, Shunde City Guanodong, China Nexgrill Industries, Inc. Trade Debt $834,833 280 Machlin Court City of Industry, CA 91789 Lynx Grills, Inc. Trade Debt $755,305 6023 East Bandini Blvd. Commerce City, CA 90040 Weber-Stephens Products Trade Debt $792,561 10571 Calle Lee, Suite 167 Los Alamitos, CA 90720 C.H. Robinson Company Inc. Credit Debt $697,336 14701 Charleson Road Suite 2400 Eden Prairie, MN 55347-5093 Young & Rubicam Credit Debt $640,053 7537 Irvine Center Drive Irvine, CA 92715 Twin Eagles, Inc. Trade Debt $612,910 13231 East 166 Street Cerritos, CA 90703 Cali-America, Inc. Credit Debt $588,414 161 W. Victoris Street Suite 220 Long Beach, CA 90805 Honfield Limited Trade Debt $537,576 Room 1305, Honour Industrial 6 Sun Yip Street, Chaiwan Hong Kong, China Paragon Distributors Trade Debt $535,865 2011 South Town East Blvd. Mesquite, TX 75149-1122 KSL Media, Inc. Credit Debt $223,710 16255 Ventura Boulevard Suite 1212 Encino, CA 91436 Vallassis Credit Debt $272,984 P.O. Box 3245 Boston, MA 02241-3245 Charter Enterprise, LLC Trade Debt $173,940 1255 Corporate Center Drive Suite 402 Monterey Park, CA 91754 Marsh Risk & Insurance Service Credit Debt $89,024 Newport Beach Office Dept. #68051 Los Angeles, CA 90088 Masterbuilt Manufacturing, Inc. Trade Debt $139,806 450 Brown Avenue Columbus, GA 31906 Sues, Young & Brown, Inc. Trade Debt $143,783 515'l Commerce Drive Baldwin Park, CA 91706 Robert H. Peterson Co. Trade Debt $130,787 14724 East Proctor Ave. La Puente, CA 91746 Pricewaterhouse Coopers LLP Credit Debt $81,093 P.O. Box 31001-0068 Pasadena, CA 91110-0068 SC Staffing Solutions, Inc. Credit Debt $96,460 233 S. Azusa Avenue West Covina C491792 BCBG MAX: S&P Hikes Rating to 'B-' on Covenant Changes ------------------------------------------------------ Standard & Poor's Ratings Services raised its ratings on Los Angeles-based BCBG Max Azria Group Inc. (BCBG) to 'B-' from 'CCC'. "At the same time, we raised the rating on BCBG's amended $200 million term loan due 2011 to 'B' from 'B-', one notch higher than the corporate rating on the company. We also lowered the recovery rating on this debt to '2' from '1', indicating the expectation for substantial (70%-90%) recovery of principal in the event of a payment default. The outlook remains negative," S&P says. The upgrade reflects BCBG's attainment of amendments on its credit facility that revise the company's financial covenants. BCBG has also attained waivers both to give the company through the end of August 2008 to provide financial statements to lenders and for its failure to meet financial covenants in the fourth quarter of 2007 and first quarter of 2008. The revised financial covenants include financial ratios for the BCBG concept stand-alone and a minimum EBITDA covenant for Max Rave. "Currently, there is adequate cushion of about 20% of EBITDA on BCBG's financial covenants," said Standard & Poor's credit analyst Jackie E. Oberoi, "but we remain concerned that Max Rave may not meet its minimum EBITDA covenant for the year." BEAR STEARNS TRUST: S&P Affirms BB, B Ratings on 6 Classes ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 22 classes of commercial mortgage pass-through certificates from Bear Stearns Commercial Mortgage Securities Trust 2006-PWR11. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Aug. 11, 2008, remittance report, the collateral pool consisted of 180 loans with an aggregate trust balance of $1.826 billion, compared with 181 loans totaling $1.859 billion at issuance. The master servicer, Wells Fargo Commercial Mortgage Servicing (Wells), reported financial information for 99% of the pool, all of which was full-year 2007 data. Standard & Poor's calculated a weighted average debt service coverage (DSC) of 1.80x for the pool, up from 1.66x at issuance. There are no delinquent loans in the pool, and there is one asset with the special servicer, Centerline Servicing Inc. (Centerline). The trust has not experienced any losses to date. There are six loans in the pool totaling $31.1 million (2%) that reported DSC of less than 1.0x; however, only one loan ($7.6 million) is currently a credit concern. A variety of property types with an average balance of $5.2 million secure the six loans. These loans have experienced a weighted average decline in DSC of 47% since issuance. The top 10 loans have an aggregate outstanding balance of $786.7 million (43%) and a weighted average DSC of 2.15x, up from 1.87x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for four of the assets underlying the top 10 exposures. One of the properties was characterized as "fair," while the remaining properties were characterized as "good." The credit characteristics of the SBC Hoffman Estates, De Anza Shopping Center, King's Plaza, OSU Building, and Shaw's Stratham loans are consistent with those of investment-grade obligations. Standard & Poor's adjusted values for these loans are comparable to the valuations at issuance. The Shops at Breckinridge loan has a total exposure of $4.0 million (0.2%) and is the only asset with the special servicer. The loan is secured by the fee interest in a 21,220-sq.-ft. retail property in Duluth, Ga. The loan was transferred to Centerline on March 11, 2008, after the borrower requested a moratorium on principal payments. Centerline has begun the foreclosure process and, based on an April 2008 appraisal, Standard & Poor's expects a moderate loss upon the liquidation of the asset. Wells reported a watchlist of 18 loans ($138.7 million, 8%). The Brentwood Towne Square loan ($20.9 million, 1%) is the largest loan on the watchlist. The loan is secured by a 196,757-sq.-ft. retail property in Brentwood, Pa. The loan appears on the watchlist because it reported a DSC of 1.12x for the year-ended Dec. 31, 2006. The loan's DSC for the year-ended Dec. 31, 2007, was 1.40x due to higher occupancy at the property. The loan will be removed from the watchlist next month. The Troy Medical Office Building loan ($7.7 million, 0.4%) is secured by a 49,846-sq.-ft. medical office property in Troy, Mich. The loan appears on the watchlist because it reported a 0.75x DSC for the year-ended Dec. 31, 2007. The property is 45% occupied and there are currently no leasing prospects. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the affirmed ratings. RATINGS AFFIRMED Bear Stearns Commercial Mortgage Securities Trust 2006-PWR11 Commercial mortgage pass-through certificates series 2006-PWR11 Class Rating Credit enhancement (%) A-1 AAA 30.53 A-1-A AAA 30.53 A-2 AAA 30.53 A-3 AAA 30.53 A-4 AAA 30.53 A-AB AAA 30.53 A-M AAA 20.35 A-J AAA 12.34 B AA 10.30 C AA- 9.03 D A 7.51 E A- 6.49 F BBB+ 5.34 G BBB 4.33 H BBB- 3.05 J BB+ 2.67 K BB 2.29 L BB- 1.91 M B+ 1.78 N B 1.53 O B- 1.27 X AAA N/A N/A-Not applicable. BEAR STEARNS TRUST: S&P Cuts Rating on Class Q Securities to CCC+ ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class Q commercial mortgage pass-through certificates from Bear Stearns Commercial Mortgage Securities Trust 2005-PWR10. Concurrently, S&P affirmed its ratings on 24 pooled certificates from this series. "The downgrade reflects our credit concerns with four of the 16 loans in the pool that have reported debt service coverage (DSC) below 1.0x. The downgrade also reflects anticipated credit support erosion upon the eventual resolution of the specially serviced asset," S&P explains. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. "There are 16 loans ($217.6 million) in the pool that have reported low DSC, four ($47.9 million) of which are credit concerns. The 16 loans are secured by a variety of property types, have an average balance of $13.6 million, and have experienced a weighted average decline in DSC of 45% since issuance. The four loans that we are concerned with are secured by retail, office, and multifamily properties and have experienced a combination of declining occupancy and higher operating expenses," S&P relates. The Commerce Crossing Business Center loan is the only asset with the special servicer, Centerline Servicing Inc. (Centerline). The loan ($10.1 million, 0.4%) is 90-plus-days delinquent and is secured by the fee interest in a 110,428-sq.-ft. office property in Louisville, Ky. The loan was transferred to Centerline on June 6, 2008, for monetary default. Centerline has begun the foreclosure process, and based on a July 2008 appraisal, Standard & Poor's expects a moderate loss upon the liquidation of the asset. As of the Aug. 11, 2008, remittance report, the collateral pool consisted of 209 loans with an aggregate trust balance of $2.569 billion, compared with 212 loans totaling $2.634 billion at issuance. The master servicer, Wells Fargo Commercial Mortgage Servicing (Wells), reported financial information for 99% of the pool, all of which was full-year 2007 data. Standard & Poor's calculated a weighted average DSC of 1.58x for the pool, up from 1.45x at issuance. The trust has not experienced any losses to date. The top 10 loans have an aggregate outstanding balance of $1.047 billion (43%) and a weighted average DSC of 1.47x, down from 1.52x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures, and all the properties were characterized as "good." "The credit characteristics of The Promenade - AZ, Sully Place Shopping Center, Muirwood Apartments, Tennant Station, Pacheco Pass Shopping Center, Sand Canyon Medical Office, Todd Center, Eastgate Village, Quakertown Shopping Center, and Spring Creek Apartments loans are consistent with those of investment-grade obligations. Standard & Poor's adjusted values for these loans are comparable to our valuations at issuance," S&P says. Wells reported a watchlist of 26 loans ($309.1 million, 12%). The Crocker Park loan ($99.2 million, 4%) is the largest loan on the watchlist and the fifth-largest loan in the pool. The loan is secured by a 618,817-sq.-ft. master planned mixed-use property in Westlake, Ohio. The loan appears on the watchlist because it reported a DSC of 0.96x during the loan's interest-only basis for the year-ended Dec. 31, 2007. The interest-only period for the loan has expired, and the loan will amortize on a 30-year schedule going forward. Wells has control of $3.0 million in cash and a $4.4 million letter of credit, both of which can be used for debt service shortfalls and have not been drawn down to date. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. RATING LOWERED Bear Stearns Commercial Mortgage Securities Trust 2005-PWR10 Commercial mortgage pass-through certificates Rating Class To From Credit enhancement (%) ----- -- ---- ---------------------- Q CCC+ B- 1.28 RATINGS AFFIRMED Bear Stearns Commercial Mortgage Securities Trust 2005-PWR10 Commercial mortgage pass-through certificates Class To From Credit enhancement (%) ----- -- ---- ---------------------- A-1 AAA 30.75 A-1-A AAA 30.75 A-2 AAA 30.75 A-3 AAA 30.75 A-4 AAA 30.75 A-AB AAA 30.75 A-M AAA 20.50 A-J AAA 12.30 B AA+ 11.53 C AA 10.38 D AA- 9.48 E A+ 8.84 F A 7.82 G A- 6.79 H BBB+ 5.64 J BBB 4.61 K BBB- 3.20 L BB+ 3.08 M BB 2.69 N BB- 2.18 O B+ 1.92 P B 1.67 X-1 AAA N/A X-2 AAA N/A N/A-Not applicable. BLOUNT INTERNATIONAL: June 30 Balance Sheet Upside-Down by $33.3MM ------------------------------------------------------------------ Blount International Inc.'s consolidated balance sheet at June 30, 2008, showed $482.3 million in total assets and $515.6 million in total liabilities, resulting in a $33.3 million stockholders' deficit. Including discontinued operations, the company reported net income of $10.1 million for the second quarter ended June 30, 2008, compared with net income of $11.2 million in the same period last year. Second quarter income from continuing operations was $10.2 million, an increase from $9.9 million in the second quarter of 2007. The company's sales in the second quarter were $155.1 million, compared to $135.6 million in 2007, a 14.4% increase. This year's second quarter includes $10.3 million of sales from Carlton Holdings Inc., beginning on the date of acquisition, which was May 2 of this year. Operating income in this year's second quarter was $21.6 million compared to $22.7 million last year. This year's second quarter operating income was adversely impacted by $2.0 million in acquisition-related charges as a result of the Carlton purchase and approximately $1.9 million from changes in foreign currency exchange rates compared to last year. Debt at the end of the second quarter was $340.4 million, a decrease of $19.7 million from last year's second quarter and an increase of $43.4 million from Dec. 31, 2007. The net increase in debt during this year was related to the financing of the Carlton acquisition. Commenting on the second quarter results, James S. Osterman, chairman and chief executive officer, stated: "The second quarter performance of our company was good. Healthy demand in most geographic markets enabled the Outdoor Products segment to achieve record sales for one quarter. The strong sales performance in international markets was aided somewhat by the relatively weak US dollar, as well as the acquisition of Carlton, with over 80% of its sales taking place overseas. Our significant order backlog indicates solid top line growth in the second half of the year, although operating margins will be pressured by higher raw material costs." Outdoor Products Segment The Outdoor Products segment's second quarter sales of $146.4 million represent an increase of 14.2% from last year. Segment international sales were up 15.1% versus last year, excluding Carlton. Comparable domestic sales were down 10.4% versus last year. Increased volumes and selling prices drove the comparable year-over-year improvement. Foreign exchange rates and a better sales mix also contributed to the increased sales. Sales order backlog for the segment was $121.6 million at the end the second quarter compared to $71.8 million in the comparable period last year and $63.3 million as of Dec. 31, 2007. June 30, 2008 backlog includes $24.6 million related to Carlton. Segment contribution to operating income was $24.6 million in the second quarter compared to $26.7 million in the comparable period of 2007. The decline in contribution includes acquisition-related charges of $2.0 million relating to the Carlton purchase and $1.9 million of adverse foreign currency exchange rate impacts compared to last year, partially offset by higher unit volumes. The effects of the stronger year-over-year Canadian dollar (+11%) and Brazilian real (+18%) on the segment's manufacturing costs more than offset the positive impact on revenue caused by a weaker US dollar. Additionally, in the second quarter, the segment experienced approximately $600,000 of steel cost increases and continued to experience increases to logistics costs consistent with the higher prices of fuel worldwide. Segment operating margins as a percentage of sales declined in this year's second quarter to 16.8%, from 20.8% in 2007. Other and Corporate Expense The corporate and other category includes centralized administrative functions and a gear components manufacturing business. In the second quarter, contribution from other and corporate expense totaled a loss of $3.0 million compared to a loss of $4.0 million last year. These results include year-over- year improvement in profit from the sales of gear components of $500,000 and a reduction in overhead expenses of $500,000. 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?30e3 About Blount International Blount International Inc. (NYSE: BLT) -- http://www.blount.com/-- is an international company operating one principal business segment, the Outdoor Products segment. Blount sells its products in more than 100 countries around the world. The Outdoor Products segment manufactures and markets cutting chain, bars, sprockets and accessories for chainsaw use, concrete- cutting equipment, lawnmower blades and accessories for yard care equipment. BLUEPOINT RE: S&P Cuts Rating to 'R' After Liquidator Named ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its financial strength and financial enhancement ratings on BluePoint Re Ltd. to 'R' from 'A'. An insurer rated 'R' is under regulatory supervision because of its financial condition. "The rating action follows the Supreme Court of Bermuda's order on Aug. 7 appointing a provisional liquidator for the company," said Standard & Poor's credit analyst Dick Smith. BluePoint Re had petitioned for the appointment of a provisional liquidator. The provisional liquidator will assess the operations and finances of the company in anticipation of liquidating the company. BluePoint Re has also filed for Chapter 15 Bankruptcy protection in New York. Chapter 15 is used in circumstances where a bankruptcy filing has taken place in another country and the entity is seeking to have those actions recognized in the U.S. During the regulatory supervision, the regulators may have the power to favor one class of obligors over others or pay some obligations and not others. BluePoint Re is wholly owned by BluePoint Holdings Ltd., which in turn is wholly owned by Wachovia Corp. (A+/Stable/A-1). BOB'S STORES: Versa & Crystal Capital Complete Acquisition ---------------------------------------------------------- Versa Capital Management and Crystal Capital have acquired Bob's Stores from The TJX Companies, Inc. (NYSE: TJX). Terms of the sale were not disclosed. Following the sale, the management team of Bob's Stores will remain with the company. "Bob's Stores has a long tradition of providing great values in name-branded apparel, footwear, workwear, and sportswear for all ages," stated Greg Segall, Managing Partner of Versa Capital Management. "The company has undergone significant change and improvement under the ownership of TJX, and now moves forward as a well-capitalized independent retailer that will continue to serve its long-standing base of loyal customers in the Northeast and New England. We look forward to working with the management team and employees to help Bob's continue to grow as an organization and fully deliver on its potential in terms of sales and earnings." Dechert LLP provided legal counsel to Versa Capital Management and Crystal Capital during the transaction. About Versa Capital Management Versa Capital Management, Inc. -- http://www.versafund.com/-- (formerly known as Chrysalis Capital Partners, Inc.), is private equity investment firm with over $900 million of committed capital focused on control investments in special situations involving middle market companies in a wide variety of industries throughout the United States. About Crystal Capital Established by a team of experienced financial professionals, Crystal Capital -- http://www.crystalcapital.com/-- is an investment firm that provides capital for middle market companies across all industries. The founding principals each have over 25 years of experience and have provided in excess of $15 billion in creative capital commitments for buyouts, recapitalizations, refinancings and growth opportunities. About Bob's Stores Bob's Stores, based in Meriden, Conn., is a value-oriented retailer of name-branded casual clothing and footwear for the entire family with more than $300 million in revenues through 34 store locations in the Northeastern U.S. Bob's Stores, Inc., filed for chapter 11 protection on October 22, 2003 (Bankr. Del. Case No. 03-13254). TJX purchased substantially all of the assets of Bob's Stores and its subsidiaries and assumed leases for 31 of Bob's Stores' locations, its Meriden, Connecticut, office and warehouse lease, along with specified operating contracts, and customer, vendor and employee obligations, for something between $59 million and $100 million (after numerous adjustments) in Dec. 2003. A liquidation trust was established under a Modified Consolidated Joint Plan of Liquidation (confirmed Aug. 17, 2004, and declared effective on Sept. 15, 2004) to reconcile all remaining claims and liquidate the retailer's estate. Joseph Myers, a partner and managing director of Clear Thinking Group LLC and Liquidating Trustee for BSI Holding Co., Inc., fka Bob's Stores, made a final distribution to BSI's general unsecured creditors in Jan. 2006. Unsecured creditors recovered 98.5% on account of their claims in that chapter 11 liquidation. Adam Hiller, Esq., at Pepper Hamilton and Michael J. Pappone, Esq., at Goodwin Procter, LLP represented the Debtors in their restructuring efforts. Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman LLP, and Charlene Davis, Esq., and Deirdre Richards, Esq., at The Bayard Firm represented the Creditors' Committee. CENTRAL GARDEN: 10-Q Results to be Delayed Due to Employee Issues ----------------------------------------------------------------- Central Garden & Pet Company disclosed in a regulatory SEC filing that the Audit Committee of its Board of Directors is reviewing issues raised in a letter from an employee. Because the Audit Committee's review has not been completed, the company's Quarterly Report on Form 10-Q for its third fiscal quarter ended June 28, 2008, will be delayed. The Audit Committee's review is primarily related to whether a loss reserve should have been established for the end of fiscal 2005 relating to a customer dispute that was settled in early fiscal 2006. About Central Garden Based in Walnut Creek, Calif. Central Garden & Pet Company (Nasdaq: CENT/CENTA) -- http://www.central.com/-- markets and produces branded products for the lawn & garden and pet supplies markets. The company's products are sold to specialty independent and mass retailers. Central Garden & Pet Company has approximately 5,000 employees, primarily in North America and Europe. At June 30, 2008, the company's consolidated balance sheet showed $1.33 billion in total assets, $809.1 million in total liabilities, $2.7 million in minority interest, and $522.7 million in total shareholders' equity. Balance sheet information is preliminary. * * * As reported in the Troubled Company Reporter on Feb. 25, 2008, Standard & Poor's Ratings Service affirmed its 'CCC+' senior subordinated debt ratings on Central Garden & Pet Co. The outlook is negative. CHARITY CHRISTIAN: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Charity Christian Center Church, Inc. 650 W. McKinley Street Baton Rouge, LA 70802 Bankruptcy Case No.: 08-11177 Type of Business: The Debtor is a religious organization. Chapter 11 Petition Date: August 15, 2008 Court: Middle District of Louisiana (Baton Rouge) Judge: Douglas D. Dodd Debtor's Counsel: Pamela G. Magee, Esq. 7922 Wrenwood Boulevard, Suite B Baton Rouge, LA 70809 Tel: (225) 925-8770 Fax: (225) 924-2469 Email: p.magee@att.net Estimated Assets: $1 million to $10 million Estimated Debts: $500,000 to $1 million The Debtor does not have any creditors who are not insiders. CHRYSLER LLC: In Talks With Mahindra Over Infringement Issue ------------------------------------------------------------ Mahindra & Mahindra Limited said the company was in dialog with Chrysler LLC after the US auto company accused it of design infringement, The Times of India reports. According to the report, Mr. Anand Mahindra, Managing Director and Vice Chairman, Mahindra & Mahindra, insisted there was "no infringement" on the part of the Mahindras, though the companies were sorting out an issue related to the design of Mahindra Scorpio's front grill design. "We have some issues with Chrysler over the grill design of Scorpio, but we are confident that there is absolutely no infringement of any intellectual property," Mahindra was cited by The Times of India as saying, adding that "dialog is on to resolve the issue." The Economic Times relates that Chrysler alleges M&M copied the design from its automobile marquee, Jeep. According to the Economic Times, when M&M founders, brothers JC Mahindra and KC Mahindra, started out in 1945 just after the war, they began by assembling completely knocked-down (CKD) Willys Jeeps imported from the US. Chrysler pointed out that until 1994, M&M could use the word, Jeep, but after 1994, it belonged only to Chrysler. Auto experts, the Economic Times says, indicate that M&M will have to redesign the grill, as the US auto maker Chrysler is keen to make its presence in emerging markets like India and China. There is even speculation that Chrysler could initiate legal action against the Indian utility vehicle major, The Times of India adds. The Hindu Business Line also reports that sources familiar with the issue indicated that there was no question of legal battle over the design dispute although there were a few e-mail correspondence between Mahindra and Chrysler at the middle management level. A Chrysler official, when contacted by the Economic Times, declined to comment. About Mahindra & Mahindra Limited Headquartered in Mumbai, India, Mahindra & Mahindra Limited manufactures a range of automotive vehicles, agricultural tractors, implements and industrial engines, and is also engaged in dealing in property development/construction activities. Its farm equipment sector designs, develops, manufactures and markets tractors for Indian and overseas markets. Its automotive sector makes a range of vehicles, including multi-utility vehicles (MUVs), light commercial vehicles (LCVs) and three wheelers. During the fiscal year ended March 31, 2007, the Company produced 1,44,090 vehicles, which included MUVs, cars and LCVs, including 8,811 LCVs produced for Mahindra International Limited, a subsidiary of the Company and 614 cars produced for Mahindra Renault Private Limited, another subsidiary of the Company, and 34,892 three wheelers. In April 2008, it launched the After Market Sector, comprising of various business units, including Mahindra First Choice Services Ltd., Mahindra First Choice Ltd. and Mahindra Spares Business. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services said lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings has downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. CLOROX COMPANY: June 30 Balance Sheet Upside-Down by $350 Million ----------------------------------------------------------------- The Clorox Company's balance sheet at June 30, 2008, showed total assets of $4.73 billion and total liabilities of $5.08 billion, resulting in a stockholders' deficit of $350 million. Clorox reported fourth-quarter net earnings of $158 million. Current quarter earnings were reduced by $10 million in pretax charges associated with the restructuring-related charges, including consolidation of the company's manufacturing network and other charges, and $3 million associated with the Burt's Bees acquisition. In the year-ago quarter, Clorox reported net earnings of $164 million. For fiscal year 2008, Clorox reported net earnings of $461 million. Earnings for the fiscal year were reduced by $59 million in pretax charges associated with the restructuring- related charges, including consolidation of the company's manufacturing network and other charges; and $20 million associated with the Burt's Bees acquisition. In fiscal year 2007, the company reported net earnings of $501 million. For the fourth quarter, other income results reflected $9 million in net foreign exchange transaction gains in the current quarter versus a $3 million net loss in the year ago period. For fiscal year 2008, net foreign exchange transaction losses reflected in other income were $2 million versus a net loss of $4 million in fiscal 2007. "I'm pleased with our performance for the quarter," Don Knauss, chairman and CEO, said. "We delivered strong total company and base business top-line growth. Our market shares held steady overall, despite continued economic pressure on consumers. Cost savings and the benefit of recent price increases helped lessen the impact of intense pressure from commodity and energy cost increases." "I feel very good about our overall performance for the year, particularly given unprecedented cost pressures," Mr. Knauss said. Importantly, we made very good progress against our Centennial Strategy. We drove growth on core businesses, including the new Green Works(TM) line of natural cleaners and the Brita(R) brand. We also continued to position our portfolio for faster growth through the Burt's Bees(R) acquisition, which has done extremely well to date. I'm very proud of the hard work and dedication of Clorox employees around the world." Fourth-quarter highlights Fourth-quarter sales grew 11% to $1.50 billion, compared with $1.34 billion in the year-ago quarter. Excluding the Burt's Bees acquisition, sales in the current quarter grew 8%. Fourth quarter total volume increased 6%. Excluding Burt's Bees(R) products, volume was up 4%. Sales growth outpaced volume growth primarily due to price increases and favorable foreign exchange rates. Gross margin in the fourth quarter decreased 210 basis points to 42.1% from 44.2%. Excluding the impact of $8 million of the restructuring-related charges reflected in cost of goods sold, gross margin was 42.7%. The year-over-year decrease was primarily due to the impact of higher costs for commodities, manufacturing and logistics, including diesel fuel. These factors were partially offset by the benefits of cost savings and price increases. During the quarter, Clorox generated cost savings of $29 million, of which $25 million was included in gross profit and the remaining $4 million in other lines of the income statement. Net cash provided by operations was $254 million, compared to $282 million in the year-ago quarter. The year-over-year decrease was primarily due to the timing of tax payments, partially offset by improvements in working capital. Fiscal year 2008 results Fiscal year 2008 sales grew 9% to $5.27 billion. Excluding the Burt's Bees and bleach business acquisitions, sales grew 6%. Volume for the fiscal year increased 6% compared with the prior year. Excluding Burt's Bees(R) products and the bleach acquisition, shipments were up 3% due to growth in core brands including Fresh Step(R) scoopable cat litter, Green Works(TM) natural cleaners, Brita(R) products, Hidden Valley(R) salad dressings and Clorox(R) disinfecting wipes. Sales growth outpaced volume growth primarily due to the benefit of favorable foreign exchange rates and price increases. Gross margin for the fiscal year decreased 190 basis points to 41.2% from 43.1%. Excluding the impact of the previously announced restructuring-related charges and Burt's Bees purchase accounting step-up in inventory values, gross margin was 42.1%. The decrease was primarily due to the impact of unfavorable commodity and energy-related costs, partially offset by cost savings and price increases. For the fiscal year, Clorox generated cost savings of $93 million, of which $81 million was included in gross profit and the remaining $12 million in other lines of the income statement. Net cash provided by operations in fiscal year 2008 was $730 million, compared to $709 million in the prior fiscal year. The increase was due to improvements in working capital, offset by the timing of tax payments. During the year, Clorox repurchased 2 million shares of the company's common stock at a cost of $118 million under its ongoing program to offset stock option dilution. In addition, under the ASR agreement, the company repurchased 12 million of its shares at a cost of $750 million. About The Clorox Company Headquartered in Oakland, California, The Clorox Company (NYSE: CLX) -- http://www.thecloroxcompany.com/-- manufactures and markets household cleaning products with fiscal year 2007 revenues of US$4.8 billion. Clorox markets some of consumers' most trusted and recognized brand names, including its namesake bleach and cleaning products, Green Works(TM) natural cleaners, Armor All(R) and STP(R) auto-care products, Fresh Step(R) and Scoop Away(R) cat litter, Kingsford(R) charcoal, Hidden Valley(R) and K C Masterpiece(R) dressings and sauces, Brita(R) water-filtration systems, Glad(R) bags, wraps and containers, and Burt's Bees(R) natural personal care products. Clorox has manufacturing facilities in China, Costa Rica, Dominican Republic, Malaysia, Panama, Peru, United Kingdom, among others. CROSS CREEK: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Cross Creek Lake Estates, LLC 1786 Wilmington Pike Suite 200 Glen Mills, PA 19342 Bankruptcy Case No.: 08-15229 Type of Business: The Debtor operates a real estate business. Chapter 11 Petition Date: August 15, 2008 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Judge Stephen Raslavich Debtor's Counsel: Jeffrey S. Cianciulli, Esq. Weir & Partners LLP 1339 Chestnut Street Suite 500 Philadelphia, PA 19107 Tel: (215) 665-8181 Email: jcianciulli@weirpartners.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its 20 Largest Unsecured Creditors. CWCAPITAL COBALT: S&P Lowers Ratings on Class G Notes to B ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on seven classes of notes issued by CWCapital COBALT III Synthetic CDO Ltd., a hybrid cash flow/synthetic collateralized debt obligation (CDO) transaction, and removed them from CreditWatch with negative implications, where they were placed on May 28, 2008. The rating actions reflect credit deterioration as well as the incorporation of Standard & Poor's revised recovery rate assumptions for commercial mortgage-backed securities (CMBS). As of the July 28, 2008, trustee report, approximately 29% of the collateral's ratings (as of Aug. 13, 2008) were below investment- grade, compared with approximately 22% as of the first trustee report issued in January 2007. Standard & Poor's will continue to monitor the performance of the transaction to ensure that the ratings continue to reflect the credit quality of the obligors within the collateral pool and that the credit enhancement available is sufficient to support the rated notes. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE CWCapital COBALT III Synthetic CDO Ltd. Rating Class To From Balance (mil. $) ----- -- ---- ---------------- A AA AAA/Watch Neg 64.50 B A+ AA/Watch Neg 42.50 C BBB+ A/Watch Neg 22.00 D BBB A-/Watch Neg 6.00 E BBB- BBB+/Watch Neg 5.50 F BB+ BBB-/Watch Neg 6.25 G B BB/Watch Neg 15.25 TRANSACTION INFORMATION Issuer: CWCapital COBALT III Synthetic CDO Ltd. Co-issuer: CWCapital COBALT III Synthetic CDO LLC Trustee: Wells Fargo Bank Transaction type: CDO hybrid cash flow/synthetic CDO DAYTON SUPERIOR: S&P Puts 'B' Credit Rating on Watch Negative ------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Dayton, Ohio-based Dayton Superior Corp., including its 'B' corporate credit rating, on CreditWatch with negative implications. The CreditWatch listing reflects the company's announcement that it had extended the exchange expiration date to Sept. 5, 2008 for its previously announced private exchange offer with respect to its 13% senior subordinated notes due 2009 and concurrent consent solicitation. As of Aug. 7, 2008, about $51 million in aggregate principal amount of the notes had been tendered. If the company does not repay, refinance, or extend the maturity of its existing 13% notes, its $100 million term loan will mature in March 2009. "As a result, the recent extension decreases the time frame relative to the term loan maturity, thus heightening near-term refinancing risk," said Standard & Poor's credit analyst Michael Scerbo. Still, the company was in compliance with covenants under its existing credit facility at June 30, 2008 and expects to remain in compliance. In addition, liquidity is currently adequate, with about $21 million available on its $150 million revolver (reflecting $10.3 million of letters of credit outstanding) at June 27, 2008. Although Dayton expects operating income to improve in 2008, the company continues to face a difficult operating environment that includes higher costs, such as for fuel and raw materials, in addition to lower volumes. In resolving its CreditWatch, S&P will review the company's capital structure and financing proposals when and if they occur. DIABLO GRANDE: R.W. Hertel Faces Civil Liability Complaint ---------------------------------------------------------- A $250,000 civil liability complaint has been filed against R.W. Hertel & Sons Inc. in Stanislaus County, for storm water violations at its RWHS Diablo Grande Legends subdivision, Stephanie Hoops of Ventura County Star reports. The Central Valley Regional Water Quality Control Board has extended the time by which the company must respond to the complaint from Aug. 8 to Sept. 5, according to the agency's Environmental Program Manager Wendy Wyels. She stressed that the matter would not be up for any more extensions, the report said. The request for an extension was filed by R.W. Hertel's lender, East West Bank, which wrote the board expressing concern about the development potential of the subdivision. In an Aug. 6 letter to the water board, East West Bank Senior Vice President Steven Butcher wrote that a sale is pending for the Diablo Grande, "and the outcome will substantially affect the ongoing development of the area and the community." East West had wanted more time to asses the situation. The Legends is part of a resort and residential area called the "Diablo Grande" community, which is in Chapter 11 bankruptcy. The bank indicated it ceased disbursing funds to the Legends in June as a result of the hardships the company is facing mostly arising from complaints about defective homes it constructed. The company had operated without a license. About Diable Grande Patterson, California-based Diablo Grande LP owns 33,000-acre real property and runs a resort hotel with golf courses and convention center. Diablo Grande LP's general partner is Diablo Grande Inc. with Donald Panoz as president. It filed for chapter 11 protection on March 10, 2008 (Bankr. E.D. Calif. Case No. 08- 90365). Judge Robert S. Bardwil is presiding the case. Ori Katz, Esq., and Michael H. Ahrens, Esq., at Sheppard Mullin Richter & Hampton LLP, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets of between $50 million and $100 million and debts of between $50 million and $100 million. DUNE ENERGY: June 30 Balance Sheet Upside-Down by $66.1 Million --------------------------------------------------------------- Dune Energy Inc.'s consolidated balance sheet at June 30, 2008, showed $567.0 million in total assets, $418.9 million in total liabilities, and $214.2 million in redeemable preferred stock, resulting in a $66.1 million stockholders' deficit. Including the net loss from discontinued operations (after tax benefit) of $24.5 million, Dune Energy company reported a $33.1 million net loss for the second quarter of 2008. This compares to a net loss of $22.2 million for the second quarter of 2007, which includes income from discontinued operations of $578,844. Operating income for the quarter was $19.6 million, compared with an $8.3 million loss in the second quarter of 2007. Included in the results for the second quarter of 2008 was $24.8 million of realized and unrealized losses associated with hedging activities. Of this amount, $3.7 million was realized during the quarter. In addition, there was a $5.3 million income tax benefit recorded during the second quarter of 2008. EBITDAX (Earnings Before Interest, Taxes, Depreciation, Amortization and Exploration), a non-GAAP supplemental performance measure, totaled $52.1 million for the first half of 2008, of which approximately $32.9 million or 63% was attributable to the second quarter. This represented an increase of $11.7 million or 55% over the first quarter of the year and almost equaled the $33.1 million reached during the last six months of 2007. The company disclosed that while higher commodity prices contributed significantly to these results, improving operating efficiency also added to the improvement. Revenue and Production Revenue for the second quarter totaled $51.5 million from continuing operations as compared with revenue of $11.0 million for the second quarter of 2007. The Barnett Shale properties were classified as a discontinued operation. Production volumes for the second quarter totaled 263 Mbbls of oil and 1.6 Bcf of natural gas, or 3.2 Bcfe, as compared with 94 Mbbls of oil and 0.62 Bcf of natural gas, or 1.18 Bcfe for the second quarter of 2007. Second quarter of 2008 average sales price per barrel of oil was $118.87 and $12.43 per Mcf for natural gas, versus $64.77 per barrel and $7.88 per Mcf, respectively in the second quarter of 2007. The primary reasons behind the increase in revenue were higher volumes in 2008 versus 2007, primarily associated with the company's major acquisition in May of 2007, along with higher commodity prices. Costs and Expenses For the second quarter of 2008, field level lease operating expense (LOE) was $5.24 million or $1.63/Mcfe. Severance and Ad Valorem taxes were $4.02 million or $1.26/Mcfe. Transportation and gathering was $390,000 or $0.12/Mcfe and workover expense was $1.64 million or $0.51/Mcfe. Total expenses were $11.29 million or $3.52/Mcfe. In the first quarter of 2008, field level LOE was $2.20/Mcfe, while severance and Ad Valorem taxes were $1.01/Mcfe, and transportation and gathering expense was $0.17/Mcfe, while workover expense was $0.67/Mcfe. Total operating expenses were $12.0 million or $4.06/Mcfe. Second quarter operating costs were 13% below the levels of the first quarter on an Mcfe basis. The company said these operating cost improvements are reflective of the Company�s ongoing efforts at streamlining field operations. Depletion, depreciation and amortization (DD&A) expense was $15.1 million for the second quarter of 2008 while cash G&A expense totaled $3.9 million. Stock based compensation was $1.3 million in the quarter. Interest and financing expense was $8.8 million for the second quarter. The company said it expects that cash G&A and interest and financing expenses will remain at or near these levels for the remainder of 2008. DD&A is expected to increase quarterly with increased production. Discontinued Operations � Barnett Shale The company signed a Purchase and Sale Agreement to dispose of its Barnett Shale properties in Denton and Wise Counties, Texas for $41.5 million. The effective date of the sale is May 1, 2008, with a closing anticipated during the third quarter of 2008. The company recognized a non cash $40.9 million writedown of these assets to reflect fair value. Dune has decided to focus its exploration and development activities in its higher margin Gulf Coast operations. Operational Highlights Production for the quarter, including the Barnett Shale properties, was 40 Mmcfe/day, in line with previously provided guidance. The company anticipates a slight dip in production in the third quarter to between 35 and 37 Mmcfe/day as a result of the sale of the Barnett Shale properties. Management anticipates fourth quarter production will ramp up to between 40 and 44 Mmcfe/day based on planned drilling and workover activity. Dune anticipates a capital program of between $45.0 million and $50.0 million in the second half of the year. This will allow for drilling and completing 3-4 new wells at Garden Island Bay along with numerous workovers and recompletions in several other fields. At both the company's Chocolate Bayou Field in Brazoria County, Texas and Bayou Couba Field in St. Charles Parish, Louisiana, Dune is working with its partners in order to commence drilling late in the calendar year. James A. Watt, Dune's president and chief executive officer stated, "Our operating results for the quarter were positive. Our cost structure is improving, and our focus will now center on developing the numerous high potential opportunities for deeper drilling within our existing Gulf Coast fields." 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?30eb About Dune Energy Headquartered in Houston, Texas, Dune Energy Inc. (Amex: DNE) -- http://www.duneenergy.com/-- is an independent exploration and development company, with operations focused along the Louisiana/Texas Gulf Coast and the North Texas Fort Worth Basin Barnett Shale. Proved reserves as of Jan. 1, 2008, totaled 175 Bcfe. * * * Moody's Investor Service placed Dune Energy Inc.'s senior secured debt, probability of default and long term corporate family ratings at 'Caa2' in April 2007. The ratings still hold to date with a stable outlook. DUNMORE HOMES: Panel Wants S. Dunmore's Objection to Plan Rejected ------------------------------------------------------------------ The Official Committee of Unsecured Creditors of Dunmore Homes, Inc., asks the United States Bankruptcy Court for the Southern District of New York to reject Sidney Dunmore's objection to the confirmation of the Second Amended Plan of Liquidation. Adam A. Lewis, Esq., at Morrison & Foerster LLP, in San Francisco, California, contends that there are a variety of infirmities in Mr. Dunmore's objection that the Committee is confident the Debtor will address. Among them is the untimeliness of Mr. Dunmore's Objection, which was filed six days after the deadline for confirmation objections. With regard to Mr. Dunmore's issue with Section 14.4 of the Plan, Mr. Lewis says Mr. Dunmore's objection is "absolute nonsense." Mr. Dunmore originally complained that Section 14.4 might cause him problems if he ever files for bankruptcy protection. "Indeed, what would Mr. Dunmore have the Plan do to address his 'issue'?" Mr. Lewis asks. "The only conceivable 'remedy' for Mr. Dunmore would be to have the Plan provide for future claims his estate might have some day if there ever is such an estate." Mr. Lewis argues that Mr. Dunmore is trying to manipulate the Plan for his own exclusive benefit. "If Mr. Dunmore wants special rights under the Plan, he must give something significant of value to the Debtor's estate in return," Mr. Lewis says. "That he has neither done nor offered to do on this issue." Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor filed its plan of liquidation and an accompanying disclosure statement on March 21, 2008. The company amended the Plan on April 24. In a hearing held on August 12, 2008, the Court confirmed the Plan. The California Bankruptcy Court approved Dunmore's Disclosure Statement on June 12, 2008 as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. DUNMORE HOMES: Wants Settlement with Travelers, et al. Approved --------------------------------------------------------------- Dunmore Homes, Inc., asks the United States Bankruptcy Court for the Southern District of New York to approve a settlement agreement it entered into with Travelers Casualty & Surety Company of America, Cal Sierra Construction, Inc., DeSilva Construction, Inc., and Hemington Landscape Services, Inc., pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure. Travelers issued performance and payment bonds in favor of certain subsidiaries of Dunmore Homes California, the Debtor's predecessor company, for the benefit of contractors and subcontractors who performed work for the Dunmore Companies. Contractor Claims Certain parties, including contractors, have asserted claims against some of the Bonds, according to Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, in San Francisco, California. Travelers noted that in February 2008, it paid an aggregate of $2,668,273 to three contractors -- the Included Payments: Payee Amount Project ----- ---------- ------- Cal Sierra Construction $1,966,571 Croftwood Project DeSilva Construction 671,200 Croftwood Project Hemington Landscape 30,502 Monterey Village/ Marina Court Projects Cal Sierra also asserted the right to be paid the additional sums of $224,499 and $28,650. The Debtor disputed Cal Sierra's request to recover additional payments. Instead, the Debtor acknowledge that Hemington Landscape may assert its right to recover additional payments from Travelers for work performed at the Monterey Village Projects. Travelers said it paid Cal Sierra on February 20, 2008, about $30,502 on Bond Claims relating to work performed at the Monterey Village/Marine Court Projects. Cal Sierra also asserted against Travelers the right to be paid an additional $688,422 on a Bond Claim relating to work performed at the Monterey Village Projects. Cal Sierra noted it has an unbonded stop notice. These Cal Sierra Payments, totaling roughly $720,000, are referred to as "Excluded Payments." Sources of Recovery Travelers maintained that it is entitled to seek recovery against the Debtor's secured lenders: (i) pursuant to a letter agreement it entered into with certain Lenders entered into letter -- the Set Aside Letters -- pursuant to which the Lenders agreed to indemnify Travelers for payments on the Bonds; and (ii) by obtaining, after paying on a Bond, the assignment of and is subrogated to certain claims that the Contractor Claimants hold against the Lenders with respect to work performed for the Debtor or its subsidiaries. The Contractor Claimants have each commenced litigation -- the Bonded Stop Notice Litigation -- to recover on their Bonded Stop Notice Claims, Ms. Grassgreen avers. Pursuant to Section 3159 of the California Civil Code, the Debtor believes that there are sufficient undisbursed loan proceeds to reimburse Travelers for payments on Bond Claims where a Bonded Stop Notice Claim has been asserted. Travelers has also asserted that it is entitled to seek recovery against Sidney Dunmore and the Debtor pursuant to a December 2005 indemnity agreement Dunmore California and Sidney Dunmore executed. Pursuant to the Debtor's acquisition of the Dunmore California assets, the Debtor assumed Dunmore California and Mr. Dunmore's obligations under the Indemnity Agreement. Under that Agreement, the Debtor is obligated to indemnify Travelers with respect to the Bonds. Ms. Grassgreen clarifies that although the Debtor and Mr. Dunmore are co-indemnitors, Travelers' indemnity claims against the Debtor have a much different impact on the estate than Travelers' indemnity claims against Mr. Dunmore. "Travelers' indemnity claims against the Debtor result in a general unsecured claim against the estate. In contrast, Travelers' indemnity claims against Mr. Dunmore result in a secured claim against the estate because Mr Dunmore asserts that to the extent he makes a payment to Travelers, he is entitled to contribution from the Debtor and he intends to enforce that contribution claim by offsetting that claim against the Dunmore Note -- [a $20 million line of credit Dunmore California made available to Mr. Dunmore in a June 2005 Loan Agreement]." Mr. Dunmore has asserted the right to reduce the estate's recovery on the Dunmore Note by between 50% and 100% of any payment he makes to Travelers, Ms. Grassgreen points out. In the alternative, Mr. Dunmore has claimed he is entitled to a 50% offset as a contribution claim of amounts paid to Travelers up to $1,500,000 and 100% offset of the balance. Dispute on Claim Subrogation Against this backdrop, the Debtor asserted that when Travelers paid any portion of a Bond Claim, it became subrogated to the Contractor Claimants' Bonded Stop Notice Claim to the extent of the payment. The Debtor further asserted that Travelers should intervene in the Bonded Stop Notice Litigation in order to recover on its subrogated claims. Both the Contractor Claimants and Travelers dispute that Travelers obtained subrogation right on partial payments. Moreover, the Contractor Claimants refuse to grant express assignments of their Bonded Stop Notice Claims to Travelers. It also remained unclear whether Travelers would intervene in the Bonded Stop Notice Litigation after obtaining assignments. By March 31, 2008, the Debtor commenced an adversary proceeding against Travelers and the Claimants, seeking an injunction that would prevent Travelers from making any payment on Bond Claims unless either (i) Travelers first received an assignment of the Bonded Stop Notice Claim or (ii) the Bonded Stop Notice Claim was resolved. The Debtor also sought a dispute resolution protocol on any payment on a disputed Bond Claim. Accordingly, the Court entered a preliminary injunction on the subject matter. Ms. Grassgreen reveals that despite entry of the Preliminary Injunction, no Contractor Claimant gave any assignments to Travelers. With respect to a proposed payment by Travelers worth $688,422, Cal Sierra produced evidence that it filed a stop notice, but did not file a Bonded Stop Notice with respect to its Bond Claim for the amount. Cal Sierra argued that because the Bond Claim did not have an associated Bonded Stop Notice Claim, there were no bonded stop notice rights to Travelers and an assignment would not benefit the Debtor's estate. Before entry of the Preliminary Injunction, Travelers issued a series of checks to Cal Sierra for approximately $688,422. After the entry of the Preliminary Injunction, however, Travelers withheld the $688,422 payments. "It does appeared arguable that Cal Sierra bonded only a portion of its claim so that it could receive the anticipated payment from Travelers of $688,422 without having to give an assignment to Travelers," Ms. Grassgreen points out. In addition to the ongoing problem with respect to future payments, Travelers has paid roughly $2,700,000 on Bond Claims that were not subject to the Preliminary Injunction, Ms. Grassgreen relates. She reasons that given Travelers' position that it was not subrogated with respect to the payments until the Claimants were made whole, the estate faced the risk that Travelers would never recover the payments from the Lenders and would instead limit its recovery options to either the Set Aside Letters, which are disputed, or Mr. Dunmore, thus leading to offset claims that threatened to significantly reduce the Debtor's recovery on the Dunmore Note. The Debtor subsequently filed in May 2008 a request for mandatory injunction in the Adversary Proceeding pursuant to which the Contractor Claimants are required to assign their Bonded Stop Notice Claims to Travelers to the extent of the payments already received. Parties Settle In an effort to avoid costly litigation, Cal Sierra commenced settlement negotiations. The parties ultimately agreed on a consensual resolution of their disputes. The salient terms of the Settlement Agreement are: (a) The Contractor Claimants will assign to Travelers their Bonded Stop Notice Claims to the extent of the Included Payments, the Additional Cal Sierra Payments, and the Additional Hemington Payments. The payments total approximately $3,000,000, and include both past and future payments. (b) If the Claimants receive any additional payments not referred to in the Settlement Agreement that relate to a project owned or commenced by the Debtor or a subsidiary and are associated with a Bonded Stop Notice Claim, the Claimants agree to assign the associated bonded stop notice rights to Travelers. (c) Travelers agree to intervene in the Bonded Stop Notice Litigation to enforce the rights that are assigned pursuant to the Settlement Agreement. (d) In exchange for the concessions by the Contractor Claimants and Travelers, the Debtor agree that the Excluded Payments do not require assignments. The Debtor, however, maintains that the Excluded Payments, when made, will give rise to subrogation claims in favor of Travelers. (e) The Debtor will not dispute either the Additional Cal Sierra Payments totaling $250,000, or the Excluded Payments. (f) The Preliminary Injunction will remain in full force, although the Debtor will dismiss without prejudice all parties, except Travelers, from the Adversary Proceeding. Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor filed its plan of liquidation and an accompanying disclosure statement on March 21, 2008. The company amended the Plan on April 24. In a hearing held on August 12, 2008, the Court confirmed the Plan. The California Bankruptcy Court approved Dunmore's Disclosure Statement on June 12, 2008 as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. DUNMORE HOMES: Seeks to Junk Interests in Non-Debtor Subsidiaries ----------------------------------------------------------------- Dunmore Homes, Inc., seeks authority from the Southern District of New York to abandon its interests in its Non-Debtor Subsidiaries pursuant to Section 554(a) of the Bankruptcy Code. Rule 6007 of the Federal Rules of Bankruptcy Procedure, which implements Section 554 of the Bankruptcy Code, provides that all creditors be given 15 days' notice of a debtor's request for abandonment of estate property and that a court order is not required absent an objection within the time period. As of the Petition Date, the Debtor had 26 communities that were organized into certain of its subsidiaries, which included: 1. Dunmore Canterbury LLC, 2. Dunmore Country Villas LLC, 3. Dunmore Fullerton Ranch LLC, 4. Dunmore-Highlands LLC, 5. Dunmore Laguna Reserve LLC, 6. Dunmore-Orchard LLC, 7. Dunmore Providence LLC, 8. Dunmore Stone Creek LLC, 9. Fahrens Park LP, 10. Dunmore Viscaya LLC, 11. Dunmore Diamond Ridge LLC, 12. Dunmore Croftwood LLC, 13. Dunmore Westport LLC, 14. Dunmore Sycamore Ranch LLC, and 15. Dunmore Montecito LLC. The Debtor also has interest in these inactive subsidiaries: 1. Dunmore Brown Estates LLC 2. Dunmore Reflections II, LLC 3. Dunmore Wildhawk, LLC 4. The Fairways, LLC 5. Dunmore Siena, LLC 6. Dunmore Delano, LLC 7. Dunmore-Wildhawk North, L.P. 8. Dunmore Homes Statutory Trust 1 The Debtor wholly owns all of the Subsidiaries except: -- Croftwood, Diamond Ridge, Highlands and Viscaya, all of which are operated as a joint venture with Weyerhauser Realty Investors; -- Brown Estates, which was operated as a joint venture with Universal Finance LLC; -- Fairways, which was operated as a joint venture with Granite Bay Capital Group; and -- Reflections II, Wildhawk, Wildhawk North, and Fahrens Park, each of which are owned 99% by the Debtor and 1% by Dunmore Investments LLC, an unrelated entity. The Debtor's Subsidiaries have not filed for bankruptcy protection, and the Debtor, as managing member, does not intend to commence bankruptcy proceedings on their behalf. The Debtor and its Subsidiaries have ceased operations in August 2007. Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, in San Francisco, California, notes that the Subsidiaries have no equity in any of their properties and an overwhelming majority of the properties have been foreclosed upon by the secured lenders to the Subsidiaries. In addition, the Subsidiaries have various trade debt and other unpaid obligations. Against these backdrop, the Debtor has determined that its interests in its Non-Debtor Subsidiaries are of inconsequential value and of no benefit to its estate. Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor filed its plan of liquidation and an accompanying disclosure statement on March 21, 2008. The company amended the Plan on April 24. In a hearing held on August 12, 2008, the Court confirmed the Plan. The California Bankruptcy Court approved Dunmore's Disclosure Statement on June 12, 2008 as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. DUNMORE HOMES: Sidney Dunmore Held from Disposing 2007 Tax Refund ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California Sacramento Division ordered Mr. Sidney Dunmore restrained from disposing his 2007 Tax Refund should the Tax Refund come into his possession. Travelers Casualty and Surety Company of America initiated a complaint on June 13, 2008, in the U.S. Bankruptcy Court for the Eastern District of California Sacramento Division, seeking to enjoin Sidney B. Dunmore and his representatives from spending, diverting or encumbering an anticipated 2007 Tax Refund. To note, Mr. Dunmore filed an individual tax return for the year 2007 and anticipates receiving a refund worth $12,900,000. Travelers and various parties, including the Debtor, claim a perfected security interest in the Dunmore Refund. In December 2005, Travelers; Dunmore Homes California, the Debtor's predecessor; and Mr. Dunmore, as principal, entered into an indemnity agreement, as partial consideration for Travelers' agreement to issue any bonds on behalf of the Debtor. After execution of the Indemnity Agreement, the Indemnitors entered into various contracts and subdivision agreements. The contracts required the Debtor to furnish the respective project owners with certain bonds. Travelers executed the bonds on behalf of the Indemnitors. However, certain obligees and claimants alleged that the Indemnitors subsequently defaulted on certain performance and payment obligations under various contracts and bonds. As a result of the alleged defaults, Travelers incurred significant loss. Travelers says it anticipates incurring additional losses. Despite indemnity provisions in the Indemnity Agreement and despite written requests from Travelers, the Indemnitors failed to exonerate, indemnify and save Travelers from all losses, Donald J. Colucci, Esq., at Wolkin Curran LLP, in San Francisco, California informs the Court. Pursuant to "collateral security" provisions under the Indemnity Agreement, Travelers asked the Indemnitors to deposit an amount it determined is sufficient to discharge its losses. The Indemnitors again failed to deposit the requested amount with Travelers, Mr. Colucci notes. Mr. Colucci discloses that the claims, which provide the bases for Travelers' current Collateral Security demand, aggregating $13,287,411, a list of which is available for free at: http://bankrupt.com/misc/Summary.pdf Of the $13,287,411 in claims, Travelers seek collateral security in the amount of $11,615,306. Travelers says it has reviewed the claims as of March 12, 2008, and made adjustments for duplicative claims. Mr. Colucci adds that on February 5, 2008, the Bankruptcy Court issued orders for writs of attachment on two parcels of real property owned by Mr. Dunmore and Karen M. Dunmore amounting to $7,800,000. Travelers appraised the properties to be worth $8,667,000. Mr. Colucci contends that Travelers' present security is in the form of the Writs on the two properties. However, there is only $2,242,000 in combined equity available. He explains that the parcels are encumbered with voluntary liens and a homestead exemption totaling $6,425,000. Subtracting the $6,425,000 in liens and homestead exemption from the $8,667,000 combined market value of the properties leaves available equity amounting to $2,242,000. "Travelers is under-secured by $9,373,306," Mr. Colucci says. "Travelers seeks to increase its collateral security to $11,615,306." Travelers maintains that it is entitled to receive "Collateral Security" as its protection from losses pursuant to the Indemnity Agreement. Accordingly, Travelers ask the Court to restrain and bar Mr. Dunmore, his officers, agents, servants, employees and attorneys from: -- transferring and encumbering the 2007 Tax Refund if it does come into their possession; -- executing IRS forms which will have the effect of directing Mr. Dunmore's 2007 Tax Refund into a segregated bank account with U.S. Bank, until a court determines the priority of the various claims to the Refund; and -- executing a U.S. Bank "Cash Escrow Agreement" which will have the effect of creating a segregated bank account with U.S. Bank, until a court of competent jurisdiction determines the priority of the various claims to the 2007 Tax Refund. In the alternative, if the Tax Refund is delivered to Mr. Dunmore, Travelers asks the Bankruptcy Court to require Mr. Dunmore to endorse the check to the same segregated account. Debtor Objects The Debtor says it does not oppose the Tax Refund being segregated. However, it opposes the Tax Refund being set aside with no procedure, timeline, or process for release of the funds. The Debtor has a first priority security interest in the Tax Refund which secures a note receivable from Mr. Dunmore, Pamela E. Singer, Esq. at Pachulski Stang Ziehl & Jones LLP, in San Francisco, California, asserts. "The Debtor believes and has informed Travelers and Mr. Dunmore that the balance due under the note receivable exceeds the Tax Refund." Ms. Singer notes that pursuant to a modification of an agreement between the Debtor and Mr. Dunmore, Mr. Dunmore is required to deposit the Tax Refund into an escrow account for the Debtor's benefit. "The agreements governing the escrow account provide a mechanism for resolving the disputes between the Debtor and Mr. Dunmore regarding claims for offset and provide a mechanism for the release of the funds. Thus, the Debtor has both a security interest in the Tax Refund and an equitable interest in the escrow account which will hold the Tax Refund," Ms. Singer contends. Ms. Singer says that any order to sequester the Tax Refund must protect the Debtor's interests. She argues that Travelers is trying to avoid the jurisdiction of the Court by not addressing the real issue, which is the priority of the multiple security interests asserted in the Tax Refund. Moreover, Ms. Singer notes, the Bankruptcy Court lacks the power to decide the parties' rights to the Tax Refund or to release the Tax Refund. She says "[t]he problem with this completely open- ended approach is that it subjects the Debtor to being sued in other courts to have the priority dispute determined," Ms. Singer points out. For these reasons, the Debtor asks the Court to deny Travelers' request to the extent it does not specifically provide for the Bankruptcy Court to retain jurisdiction over the Tax Refund after it is sequestered. Sidney Dunmore Objects Mr. Dunmore says there are no exigent circumstances which warrant extreme relief. He cites that Travelers has failed to meet the stringent standards for a mandatory injunction. Beth Ann R. Young, Esq., at Levene Neale Bender Rankin & Brill LLP, in Los Angeles, California, notes that the 2007 Tax Refund has not come into Mr. Dunmore's possession. Ms. Young also argues that the net amounts Travelers noted it will pay in claims is grossly inflated by at least $6,905,988. She explains that in essence, Travelers has reflected claims in excess of the amounts already paid by Travelers and in excess of the bond amounts. "Which means that the $11,615,306 is a grossly inflated number and should not be more than the substantially lesser sum of $6,381,422," she says. In addition to the inflated amounts, Ms. Young contends that Travelers has failed to disclose in its complaint that it has commenced three lawsuits to recover funds totaling more than $7,000,000 from three banks based on set-aside letters issued by banks in favor of Travelers, which recoveries would reduce the sums owing, if any, by Mr. Dunmore. The payment of certain claims amounting to $2,682,419, Travelers has obtained certain subrogation rights which permit it to pursue further recoveries of any amounts paid to claimant from banks in connection with a bonded-stop notice litigation also already in progress, Ms. Young adds. "The recoveries would further reduce the sums owing, if any, by Mr. Dunmore and the Debtor even further." Based on these reasons, Mr. Dunmore asks the Court to deny Travelers' request. Travelers Talks Back Mr. Colucci says that since Travelers seeks only the sequestration of funds by the only methods recognized by the United States Treasury and because the Debtor does not oppose segregation of the funds, no further comment on the Debtor's opposition is warranted. Mr. Colucci adds that Mr. Dunmore's objection is odd as he has already admitted that he signed an agreement with the Debtor agreeing that the Tax Refund proceeds should be segregated in an escrow account. "What is most significant in Mr. Dunmore's opposition is that nowhere in the opposition does [Mr. Dunmore] deny that Travelers has a perfected Uniform Commercial Code security interest in his 2007 tax refund." Mr. Colucci argues that Travelers' rights as a secured creditor holding a perfected security interest are sufficient to support the Court's order requiring the segregation of Travelers collateral, without any further legal or factual basis. If the Court does not grant the injunction requested, Travelers and other parties may be prejudiced if their collateral is converted to an asset in which they have no security interest or otherwise used by Mr. Dunmore in a manner inconsistent with the parties' security interest, Mr. Colucci maintains. For these reasons, Travelers asks the Court to grant its request for a temporary restraining order and mandatory preliminary injunction for the segregation of Mr. Dunmore's Tax Refund in Escrow Account. If the Tax Refund is delivered to Mr. Dunmore, the Court directs Mr. Dunmore to immediately deposit the refund into the Court's registry, where the amount will remain subject to further Court order. Based in Granite Bay, California, Dunmore Homes Inc. is a privately-owned homebuilder. The company filed for Chapter 11 protection on Nov. 8, 2007 (Bankr. S.D.N.Y. Case No. 07-13533). Maria A. Bove, Esq., and Debra I. Grassgreen, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors has selected Morrison & Foerster LLP as its counsel in this bankruptcy proceeding. In January 2008, the U.S. Bankruptcy Court for the Southern District of New York ordered the transfer of Debtor's Chapter 11 case to the U.S. Bankruptcy Court for the Eastern District of California, Sacramento Division. The Debtor filed its plan of liquidation and an accompanying disclosure statement on March 21, 2008. The company amended the Plan on April 24. In a hearing held on August 12, 2008, the Court confirmed the Plan. The California Bankruptcy Court approved Dunmore's Disclosure Statement on June 12, 2008 as containing "adequate information" within the meaning of Section 1125 of the Bankruptcy Code. The Debtor disclosed $20,743,147 in total assets and $250,252,312 in total debts in its schedules of assets and liabilities filed with the Court. EDWARD ZIMBRICK: Case Summary & 10 Largest Unsecured Creditors -------------------------------------------------------------- Debtors: Edward V. Zimbrick Daija Zimbrick 1450 Lake View Court San Martin, CA 95046 Bankruptcy Case No.: 08-54477 Chapter 11 Petition Date: August 15, 2008 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtors' Counsel: William C. Lewis, Esq. Law Offices of William C. Lewis 510 Waverly Street Palo Alto, CA 94301 Tel: (650)322-3300 Email: ecf@williamclewis.com Total Assets: $3,247,902 Total Debts: $3,231,491 A copy of the Debtors' list of their 10 Largest Unsecured Creditors is available at: http://bankrupt.com/misc/canb08-54477.pdf FORD MOTOR: S&P Holds Rating on Plan to Buy Back Ford Credit Debt ----------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Ford Motor Co. (B-/Negative/--) and related entities are not affected by Ford's intention to use up to $500 million of new common equity issuance to make purchases of Ford Motor Credit Co.'s debt. Debt due before 2012 will be the focus of the repurchases. Any such purchases in the open market or in private transactions will likely be at a discount from par, given current prices. S&P views such purchases as a modest positive for Ford's consolidated credit quality. FORD MOTOR: Auto Owner Trust Class D Notes Get S&P's BB+ Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to Ford Credit Auto Owner Trust 2008-3's $1.057 billion asset-backed notes series 2008-3. The ratings reflect: -- The characteristics of the pool being securitized; -- The credit enhancement in the form of subordination, cash, and excess spread, which is augmented through yield supplement overcollateralization; -- Ford Motor Credit Co.'s extensive securitization performance history; -- The timely interest and principal payments made under stressed cash flow modeling scenarios appropriate to the rating category; and -- The sound legal structure. RATINGS ASSIGNED Ford Credit Auto Owner Trust 2008-3 Class Rating Amount (mil. $) ----- ------ --------------- A AAA 984.4 B AA+ 15.6 C BBB+ 36.3 D BB+ 20.7 FOREST OIL: S&P Says BB- Ratings Not Affected by Acquisitions ------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on Forest Oil Corp. (BB-/Positive/--) were unaffected by the company's announcement that it is buying certain Texas properties for $892 million. Payment will consist of $708 million in cash plus 3.5 million shares of common stock. While financial leverage will temporarily increase, Forest is looking to sell two packages of non-core properties, collectively expected to be worth between $800 million and $1.1 billion. As such, S&P does not expect credit measures to change materially from current levels. FREEDOM COMMS: Lowered to 'CCC+'; S&P Sees Likely Covenant Breach ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Irvine, Calif.-based Freedom Communications Inc. to 'CCC+' from 'B-'. The rating outlook is negative. Standard & Poor's also lowered its issue-level rating on the company's $950 million secured loan to 'CCC+' (the same level as the 'CCC+' corporate credit rating) from 'B-'. The recovery rating on this secured debt remains at '3', indicating the expectation for meaningful (50% to 70%) recovery in the event of a payment default. "The rating downgrade reflects our concern around the current pace of revenue and EBITDA declines at Freedom's newspaper publishing assets, and the challenges Freedom faces in rightsizing its cost structure to meaningfully stem near-term EBITDA declines," said Standard & Poor's credit analyst Liz Fairbanks. Given the pace of declines and in the absence of an amendment, we believe that the company will violate its 5x total leverage covenant measured for the 12 months ending Sept. 30, 2008. "The 'CCC+' rating reflects our concern that if lenders grant an amendment to ease covenant levels, uncertainty exists whether it would provide sufficient headroom to address expected declines in EBITDA and stepped-up amortization payments in 2009," she continued. The rating outlook reflects our expectation for continued revenue and EBITDA declines in 2008. It also reflects our belief that Freedom is unlikely to remain under its total leverage covenant for the 12 months ending Sept. 30, 2008. We would lower the rating further if Freedom fails to negotiate an amendment to covenants that addresses the expected near-term violation. If the company successfully negotiates an amendment that provides sufficient covenant relief to accommodate what we believe will be EBITDA declines in the 20% area or more over the intermediate term, and we are confident that Freedom can stabilize its cash flow generation, we may consider higher ratings. GEMINI AIR: Sells Air Cargo Biz to Laurus for $15 Million --------------------------------------------------------- The U.S. Bankruptcy Court, Southern District of Florida (Miami) gave Gemini Air Cargo Inc. authority to sell its remaining air cargo business assets to Laurus Master Fund Ltd. for $15 million credit bid, William Rochelle of Bloomberg News says. Laurus is owed $23.5 million in term loan and revolving credit. According to the report, the Debtor failed to find a buyer for its air cargo business with four leased MD-80 aircraft. Based on the Troubled Company Reporter's publication dated July 29, 2008, Gemini Air Cargo was set to sell a portion of or substantially all of its assets, subject to bigger and better offers on Aug. 12, 2008. About Gemini Air Cargo Based in Dulles Virginia, Gemini Air Cargo, Inc. -- http://www.geminiaircargo.com/-- provides airfreight services. It operates cargo schedules and charters on a wet-lease basis. The Debtor and a debtor-affiliate first filed for chapter 11 protection on March 15, 2006, (Bankr. S.D. Florida Case Nos. 06- 10870 and 06-10872). Kourtney P. Lyda, Esq., at Haynes and Boone, LLP, represents the Debtor. The Debtors emerged from bankruptcy five months later in August 2006. The Debtor filed for chapter 22 protection together with its three debtor-affiliates on June 18, 2008 (Bankruptcy S.D. Fla. Lead Case No. 08-18175). Paul Steven Singerman, Esq., at Berger Singerman P.A., represents the Debtors in their restructuring efforts. The Debtor's financial condition as of the petition date showed estimated assets of between $100 million and $500 million and debts of between $100 million and $500 million. GLEN ROSE: Hein & Associates Expresses Going Concern Doubt ---------------------------------------------------------- Dallas-based Hein & Associates LLP raised substantial doubt about Glen Rose Petroleum Corporation's ability 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 has limited capital resources and no significant revenue producing assets, which combine to raise substantial doubt about its ability to continue as a going concern. The company posted a net loss of $3,251,650 on total operating revenues of $62,025 for the year ended March 31, 2008, as compared with a net loss of $11,435,134 on total operating revenues of $1,014,734 in 2007. The company had a working capital deficit of $2,714,405 at March 31, 2008. The company is currently looking for financing to provide the needed funds for operations. The company, however, can provide no assurance that it will be able to obtain the financing it needs to develop its properties and alleviate doubt about its ability to continue as a going concern. Balance Sheet At March 31, 2008, the company's balance sheet showed $6,074,484 in total assets, $2,957,989 in total liabilities, and $3,116,495 in total stockholders' equity. The company's consolidated balance sheet at March 31, 2008, showed strained liquidity with $155,666 in total current assets available to pay $2,870,071 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?30a3 At March 31, 2007, the company owned 404,204 shares of restricted common stock in Cano Petroleum, Inc., of $1,827,000. The shares secured a loan from Lothian Oil, Inc., and were delivered to Lothian Oil, Inc., effective June 30, 2007, in satisfaction of the loan. The company currently does not hold equity or debt securities issued by other companies. Subsequent Events On May 27, 2008, the company signed a letter of intent to sell for $2.5 million a 50% working interest in 2,560 acres of its Wardlaw Field to Wind Hydrogen Limited, a publicly listed company on the Australian Stock Exchange. The Wardlaw lease is a 10,502-gross-acre field located in Edwards County, Tex. In addition, WHL has purchased two options for $150,000 each to expand the venture for Phase 2 for 2,560 for $3 million for a 50% interest, and for Phase 3 for an additional 2,560 acres for $4 million for a 50% working interest. The WHL joint venture has received approval from WHL's shareholders, has completed preliminary due diligence, and is contemplated signing of a definitive Participation Agreements by mid July. On June 30, 2008, the board of directors approved the WindHydro Participation agreement in which the company has received $250,000 in May 2008 as the down payment for Phase 1, as well as $270,000 in late June as a PIPE financing. The company's shareholders have approved the letter of intent, and they are expected to sign the Participation Agreement over the next few weeks. On June 30, 2008, the board also approved the offer by Richardson Patel to convert Blackwood Capital Limited's May 2008 billing into common stock, subject to the Blackwood's approval. On June 30, 2008, the board approved a 1 for 200 reverse split of the stock, then an immediate purchase of the fractional shares at the then market price, and then on the same day a 200 for 1 forward split. The result (based on shareholders of record as of April 28, 2008, would be the repurchase of around 18,000 shares, which would eliminate 1,385 shareholders, which hold an average of 13 shares. This would leave about 93 shareholders of record. About Glen Rose Petroleum Dallas-based Glen Rose Petroleum Corp. (NasdaqCM: GLRP) -- http://www.glenrosepetroleum.com/-- is an independent producer of natural gas and crude oil. The Company operates its business through its wholly owned subsidiaries, UHC Petroleum Corporation (Petroleum) and UHC Petroleum Services Corporation (Services). Its non-operating subsidiaries are UHC New Mexico Corporation and National Heritage Sales Corporation, which formerly sold food products. GOLD CREEK: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Gold Creek S.L., L.L.C. c/o Burton & Armstrong, LLP 2 Ravinia Drive, Suite 1750 Atlanta, GA 30346 Bankruptcy Case No.: 08-22232 Type of Business: The Debtor owns a real estate business. Chapter 11 Petition Date: August 13, 2008 Court: Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: Joseph J. Burton, Jr., Esq. Burton & Armstrong Suite 1750 Two Ravinia Drive Atlanta, GA 30346 Tel: (404) 892-4144 Fax: (404) 892-0390 Email: jayburton@ballp.com Estimated Assets: $1 million to $100 million Estimated Debts: $1 million to $100 million Debtor's list of its 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dawson Co. Tax Commissioner $110,000 Linda Townley, Tax Commissioner 78 Howard Avenue East Suite 140 Dawsonville, GA 30350 Cumberland Hospitality Services $82,000 Attn: Glenridge Connector NE Suite 925 Atlanta, GA 30534 Edwin Watts Golf $33,152 1645 Pleasant Hill Road Duluth, GA 30096 Winfred Tullis $26,840 Tunnell Spangler Walsh & Associates $22,078 Georgia Department of Revenue $15,353 Scratch Inc. $11,700 Harell's Fertilizer $11,157 Amicalola EMC $11,100 Development Planning & Engineering $9,798 Olympic Oil Co. $7,379 Wallace Landscaping Group $7,626 Georgia State Golf Association $3,246 Southern Catholic College $3,200 Georgia Turf & Tractor, Inc. $3,155 Office Depot $2,798 Windstream $2,506 Resort Clubs International $2,000 Mason Tractor $1,878 HARRY QUADRACCI: Files for Chapter 11 Bankruptcy ------------------------------------------------ Harry Richard Quadracci, heir to the third-largest printing company in the nation, Milwaukee-based Quad/Graphics, filed a personal Chapter 11 bankruptcy on August 11 in federal bankruptcy court in West Palm Beach, according to a report by Paul Brinkmann of South Florida Business Journal. Harry Richard Quadracci is the son of the late Harry V. Quadracci, founder of Quad/Graphics. His petition list 3920 Parks Corp., of New York as sole creditor. Sam Firer, a New York-based spokesman for Mr. Quadracci, said 3920 Parks refers to Mr. Quadracci's residence in New York, according to the report. Mr. Firer said Mr. Quadracci's inheritance is tied up in probate. Mr. Quadracci's disagreements with the rest of the Quadracci family have been publicized. He was quoted in the report as saying "I just want to sell my shares [in Quad/Graphics]..." Mr. Quadracci listed assets of between $10 million and $50 million in its bankruptcy petition. He filed the petition without the help of a lawyer. HENRY WILLIAMS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Henry Williams, Jr. 18137 Sunset Cove Lane Cornelius, NC 28031 Bankruptcy Case No.: 08-31737 Chapter 11 Petition Date: August 18, 2008 Court: Western District of North Carolina (Charlotte) Judge: J. Craig Whitley Debtor's Counsel: David R. Badger, Esq. David R. Badger, P.A. Suite 118, Atherton Lofts 2108 South Boulevard Charlotte, NC 28203 Tel: (704) 375-8875 Fax: (704)375-8835 Email: davebadger@carolina.rr.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its 20 Largest Unsecured Creditors. ICE OASIS: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Ice Oasis, LLC 3140 Bay Road Redwood City, CA 94063 Bankruptcy Case No.: 08-31522 Type of Business: The Debtor operates a skating rink. Chapter 11 Petition Date: August 18, 2008 Court: Northern District of California (San Francisco) Judge: Thomas E. Carlson Debtor's Counsel: James M. Sullivan, Esq. Law Offices of James M. Sullivan 225 N Santa Cruz Ave. Los Gatos, CA 95030 Tel: (408) 395-3837 Total Assets: $8,719,718 Total Debts: $4,684,678 The Debtor did not file a list of 20 largest unsecured creditors. IGNACIO VALDIVIA: Case Summary & Four Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Ignacio Valdivia 13233 Fellows Avenue Sylmar, CA 91342 Bankruptcy Case No.: 08-15843 Chapter 11 Petition Date: August 11, 2008 Court: Central District Of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Steven Earl Smith, Esq. 20969 Ventura Boulevard, Suite 230 Woodland Hills, CA 91364 Tel: (818) 430-7770 Email: sesmithesq@aol.com Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of the Debtor's list of Four Largest Unsecured Creditors is available at: http://bankrupt.com/misc/cacb08-15843.pdf IMPAC CMB: Foreclosures Cue Moody's to Junk Class M-4's Rating -------------------------------------------------------------- Moody's Investors Service downgraded the ratings of two tranches issued in one transaction from the Impac CMB Trust shelf. The collateral backing this transaction consists primarily of first lien adjustable-rate and fixed-rate seasoned mortgage loans. The actions are part of an ongoing, wider review of all RMBS transactions, in light of the deteriorating housing market and rising delinquencies and foreclosures. Many "scratch and dent" pools originated since 2004 are exhibiting higher than expected rates of delinquency, foreclosure, and REO. The rating adjustments will vary based on level of credit enhancement, collateral characteristics, pool-specific historical performance, quarter of origination, and other qualitative factors. Complete rating actions are: Issuer: Impac CMB Trust Series 2007-A -- Cl. M-3, downgraded from Baa2 to B3 -- Cl. M-4, downgraded from Baa3 to Ca INTERSTATE BAKERIES: Union Asks Ripplewood to Protect IBC Jobs -------------------------------------------------------------- The Teamsters Union called on the secured creditors of Interstate Bakeries Corp., led by hedge fund Monarch Alternative Capital and JPMorgan, to work with investor Ripplewood Holdings to help the company emerge from bankruptcy with its thousands of good-paying jobs protected. Several months ago, the Teamsters and Ripplewood reached an agreement that balances the needs to help bring IBC out of bankruptcy with the needs of workers who have made so many sacrifices over IBC's long bankruptcy proceedings. For three subsequent months Ripplewood has been working with the secured creditors on finalizing an exit plan but now, at the 11th hour, they are balking at the proposal and large hedge funds and banks are toying with the livelihoods of thousands of IBC workers. "Our goal has been the preservation of our members jobs at IBC," said Richard Volpe, Director of the Teamsters Bakery Conference. "Through countless meetings and an enormous amount of effort, we have now gotten close to a proposal that could ensure, as best we can, the long-term viability of IBC. Throughout this bankruptcy we've indicated our willingness to work with financial partners that value all of the prior and prospective sacrifices of Teamster members, and the Ripplewood proposal meets those objectives." "We are holding out little hope that this proposal will be approved," Mr. Volpe said. "These banks and hedge funds are once again going to disappoint all of the 23,000 employees of Interstate, just like they have disappointed the nation with the mortgage debacle." The Teamsters Union represents more than 9,500 IBC workers at facilities throughout the United States. IBC is based in Kansas City. "It is shameful that Monarch and JPMorgan are unable to see the value of preserving IBC," Volpe said. "Without a reorganization plan in place soon, the company could face severe consequences, and these same institutions will likely recover far less than under the Ripplewood proposal." Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women throughout the United States , Canada and Puerto Rico. About Interstate Bakeries Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received Court approval of the First Amended Disclosure Statement. IBC confirmed that it has not received any qualifying alternative proposals for funding its plan of reorganization in accordance with the Court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The deadline for submission of alternative proposals was Jan. 15, 2008. A new plan filing deadline was set for June 30, 2008; no plan was filed as of that date. ISLAND DEVELOPERS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Island Developers Fruitland, LLC P.O. Box 4150 Ocean City, MD 21842 Bankruptcy Case No.: 08-20557 Chapter 11 Petition Date: August 18, 2008 Court: District of Maryland (Baltimore) Debtor's Counsel: Stephen M. Hearne, Esq. Email: smhearne@ezy.net 105 W. Main St., Second Fl. Salisbury, MD 21801 Tel: (410) 860-6606 Fax: (410) 742-7133 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of Island Developers Fruitland, LLC's petition is available for free at: http://bankrupt.com/misc/mdb08-20557 JPMORGAN TRUST: S&P Affirms BB, B Ratings on Six Classes -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on 24 classes of pooled commercial mortgage pass-through certificates from JPMorgan Chase Commercial Mortgage Securities Trust 2006- CIBC16. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the July 14, 2008, remittance report, the collateral pool consisted of 120 loans with an aggregate trust balance of $2.135 billion, compared with 120 loans totaling $2.147 billion at issuance. The master servicer, Capmark Finance Inc. (Capmark), reported financial information for 97.5% of the pool. Seventy-four percent of the servicer-provided information was full-year 2007 data. Based on this data, Standard & Poor's calculated a weighted average debt service coverage (DSC) of 1.58x, up from 1.34x at issuance. However, numerous loans are currently in their interest- only periods, and when DSC is calculated on an amortizing basis, the pool reflects a current DSC of 1.44x. There is one loan with the special servicer, Midland Loan Services Inc., totaling $5.3 million (0.25% of the pool balance). To date, the trust has not experienced any losses. The top 10 loans have an aggregate outstanding balance of $1.085 billion (50.8%) and a weighted average DSC of 1.38x, comparable to the level at issuance. With the exception of the Sequoia Plaza loan, none of the top 10 loans appear on the watchlist. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures, and the properties collateralizing nine of the loans were considered, on average, to be in "good" condition; the property securing the remaining loan was deemed to be in "excellent" condition. There are 15 loans in the pool, totaling $151.9 million (7.1%), that have reported DSCs of lower than 1.0x. These loans are secured primarily by a variety of multifamily, office, and retail properties. The loans range in size from $581,773 to $35 million and have experienced a weighted average decline in DSC of 40.6% since issuance. Many of these 15 loans are expected to have increasing net cash flow (NCF) in the future or have reasonable exposures per sq. ft. or unit; therefore, only four loans (representing 0.8% of the pool balance) represent credit concerns. These four loans are secured by multifamily, retail, and office property types and were stressed in S&P's analysis. Capmark reported a watchlist of 23 loans ($320.3 million, 15.0%). The Sequoia Plaza loan ($92.7 million, 4.3%) is the largest loan on the watchlist and the fourth-largest loan in the pool. The loan is secured by a 370,638-sq.-ft. office building built in 1988 and located in the central business district (CBD) of Arlington, Va., less than two miles from the Pentagon and less than five miles from Ronald Reagan Washington National Airport. The loan appears on the watchlist because the property's occupancy according to the July 9, 2008, rent roll had fallen to 62.2%. The largest tenant, Northrop Grummon, vacated 101,760 sq. ft. (27% of net rentable area {NRA}) prior to its scheduled lease expiration of April 13, 2008. As of year-end 2007, the property reported 69.0% occupancy and a DSC of 1.31x. The remaining loans are on the watchlist primarily because of low occupancy or a decline in DSC since issuance. The Stone Plaza Office Building loan is the one specially serviced loan. The property is a 30,376-sq.-ft. suburban office building built in 2002 and located in Dallas. The loan has an unpaid principal balance of $5.32 million (0.25% of the pool balance) and a total exposure of $5.36 million, including advances and interest thereon. The loan was transferred to the special servicer due to payment default following the lease expiration of a major tenant (representing 27% of property NRA) on April 30, 2008. Currently, the loan is in the process of being assumed by a new owner, who is in contract to purchase the property for $5,490,000. The deal is anticipated to close in the next few weeks, at which time the loan will be returned to the master servicer. The loan is now current, and the new owner is due to make a payment on Sept. 1, 2008. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels support the affirmed ratings. RATINGS AFFIRMED JPMorgan Chase Commercial Mortgage Trust 2006-CIBC16 Commercial mortgage pass-through certificates series 2006-CIBC16 Class Rating Credit enhancement (%) ----- ------ ---------------------- A-1 AAA 30.17 A-2 AAA 30.17 A-3FL AAA 30.17 A-3B AAA 30.17 A-4 AAA 30.17 A-SB AAA 30.17 A-1A AAA 30.17 A-M AAA 20.12 A-J AAA 12.19 B AA 10.31 C AA- 9.55 D A 8.17 E A- 6.91 F BBB+ 5.53 G BBB 4.27 H BBB- 3.14 J BB+ 2.89 K BB 2.39 L BB- 2.01 M B+ 1.89 N B 1.63 P B- 1.38 X-1 AAA N/A X-2 AAA N/A N/A-Not applicable. KIMBALL HILL: Has Until October 20 to File Chapter 11 Plan ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois gave Kimball Hill Inc. and its debtor-affiliates until Oct. 20, 2008, the exclusive right to file a Chapter 11 plan, and until Dec. 19, 2008, the exclusive right to solicit acceptances for that plan. Pursuant to Section 1121(b) of the U.S. Bankruptcy Code, a Chapter 11 debtor has the exclusive right to file a plan of reorganization during the first 120 days following the filing of its chapter 11 petition, and thereafter to solicit acceptances to any plan so filed for a period of an additional 60 days. The current period within which the Debtors may exclusively file a plan of reorganization expires on Aug. 21, 2008, and the exclusive period within which they may solicit acceptances for that plan expires on Oct. 20, 2008. Kimball Hill Inc. Chief Financial Officer and Treasurer Edward J. Madell said that the Debtors' goal is to formulate and negotiate a consensual Chapter 11 Plan that would maximize recoveries for all parties-in-interest. Three months into their bankruptcy cases, Mr. Madell said the Debtors are exactly where they stated they would be -- they have made significant progress in implementing their restructuring strategy and have nearly completed their evaluation of plan alternatives while significantly outperforming their DIP financing forecast. He adds that the Debtors have continued to deliver homes that resulted in minimal disruption from their Chapter 11 filing. The Debtors have also worked closely with their major constituents both on the details of their restructuring and on plan alternatives. There, however, remains certain unresolved restructuring issues, which the parties are still working toward formulating and negotiating a consensual Chapter 11 Plan, Mr. Madell told the Court. Section 1121(d) provides that a Court may, for cause, extend or reduce a debtor's exclusive plan period up to 18 months, and the exclusive solicitation period up to 20 months, after the date of bankruptcy. The Debtors thus asked the Court to extend their Exclusive Plan Filing and Solicitation Period by an additional 90 days. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, informed the Court that the Debtors they have been conducting an extensive plan sponsor process, including: -- contacting close to 100 potential investors; -- signing up confidentiality agreements with more than 50 of those investors; and -- conducting more in-depth documentary and in-person due diligence, including meetings with management, with a smaller subset of those investors that elected to sign confidentiality agreements. The Debtors averred that the process is time-consuming, but assure the Court they have nearly completed that process. The Debtors added that they have distributed a revised business plan to their Prepetition Agent and the Official Committee of Unsecured Creditors on June 23, 2008. The Debtors have also met with the parties-in-interest to discuss the business plan. "The revised business plan is entwined with the Debtors' chapter 11 exit strategy and forms the basis for certain further discussions with their major constituencies regarding plan structures and alternatives," Mr. Schrock said. Without the requested exclusivity, the Debtors contended that their resources would no doubt be pulled in unproductive directions so that the value of their estates would quickly dissipate to the detriment of all creditors and parties in interest. Mr. Schrock added that the Debtors' request is warranted for these reasons: -- The Debtors' Chapter 11 cases are substantially large and complex. -- They continue to pay their bills as they become due. -- The proposed extension will not prejudice creditors as it will enable the Debtors to continue to negotiate a viable plan. About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Oct. 20, 2008, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Has Until November 19 to Decide on Pacts and Leases ----------------------------------------------------------------- At the behest of Kimball Hill Inc. and its debtor-affiliates, the U.S. Bankruptcy Court for the Northern District of Illinois extended the time by which they must assume or reject their unexpired real property leases and executory contracts until Nov. 19, 2008. As of the date of bankruptcy, the Debtors were party to several unexpired non-residential real property leases. The Debtors lease certain office locations that serve as the control centers for their regional operations. The Debtors also lease certain model homes as a result of model home sale-leaseback transactions. Although they have made dispositions of unexpired leases and executory contracts in July 2008, the Debtors relate that the decisions on whether to assume or reject the remaining unexpired leases are significant in their cases. They point out that these decisions are heavily dependent on their future business plans and the structure of their exit from Chapter 11, which they are currently formulating with assistance from their advisors, the Official Committee of Unsecured Creditors, and their prepetition senior secured lenders. As these disposition decisions are inextricably linked to their Chapter 11 exit plans, the Debtors aver they are not yet able to conclusively determine which offices and communities will continue operating, and consequently, which unexpired leases to assume or reject. Section 365(d)(4) of the U.S. Bankruptcy Code provides that a debtor's unexpired lease of nonresidential real property will be deemed rejected if the trustee does not assume or reject the unexpired lease by the earlier of (i) the date that is 120 days after the order for the relief, or (ii) the date of entry of an order confirming a plan. Section 365(d)(4) provides, however, that the court may extend the period prior to the expiration of the 120-day period for 90 days on the debtor's motion for cause. About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Oct. 20, 2008, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). KIMBALL HILL: Seeks to Exit From Chapter 11 in Late 2008 -------------------------------------------------------- Kenneth Love, Kimball Hill Inc.'s chief executive officer, predicts that the company will emerge from bankruptcy in the latter part of 2008, Chicagobusiness.com disclosed. Chicagobusiness.com quotes Mr. Love as saying the company has ample cash and is moving ahead with development areas that are not as hard-hit by the housing downturn. Mr. Love added that the company will also exit "nightmare markets" like Florida, and will favor building homes on existing subdivisions over acquiring raw land. About Kimball Hill Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Oct. 20, 2008, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Panel Wants Data on Prepetition Loan ------------------------------------------------------------ Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the Official Committee of Unsecured Creditors in LandSource Communities Development LLC and debtor-affiliates' bankruptcy cases, asks the U.S. Bankruptcy Court for the District of Delaware to direct the Debtors, the First Lien Lenders, and the Second Lien Lenders to produce these documents for examination and copying: (a) All communications between the Lenders and the Debtors since September 1, 2007, including: -- Documents regarding demands for payment of any amounts under the Prepetition Credit Facilities; -- Documents regarding default or acceleration of the Prepetition Credit Facilities; -- Documents regarding waivers or forbearance agreements relating to the Prepetition Credit Facilities; and -- Documents regarding the acknowledgment, release, admission or confirmation of claims or prospective claims of the Debtors as to the Lenders; (b) Documents listing all assets by Debtor with values ascribed and an indication of whether the value is based on book value, appraisal or another basis; (c) Documents regarding the appraisal of the Debtors' assets including formal appraisals and valuations, internal and informal appraisals and valuations, or any other documents or communications that reflect valuation of the Lenders' collateral; (d) Documents regarding the Debtors' efforts to refinance or restructure any of their obligations under the Prepetition Credit Facilities; (e) Documents regarding any offers or indications of interest with respect to the purchase of the Debtors' debt within one year of the Petition Date, including the indication of interest received prior to the Petition Date that served as the asserted basis to establish $750,000,000 as the minimum current value of the collateral securing the Lenders' obligations under the Prepetition Credit Facilities; (f) Documents regarding any payments made by any Debtor to the Lenders or any of the Lenders' professionals or advisors from or after December 11, 2007; (g) Documents regarding the date of delivery, amount, Lender and recipient of any advances from any Lender at any time; (i) Documents regarding the approval by the Lenders of the Debtors' budgets or the Debtors' expenditure of funds or incurrence of debt since September 1, 2007; (j) All loan agreements, notes, extensions, amendments and exhibits Regarding the Second Lien Lenders' business relationship with the Debtors, during the period January 1, 2005 to the present; and (k) All perfection documents regarding the Second Lien Lenders' loans to the Debtors: mortgages, trust deeds, title policies, opinions, recorded U.C.C.s, control/ pledge agreements, insurance declaration pages or other notifications. The Court's final order approving the Debtors' $1,185,000,000 DIP Loan provides that the Official Committee of Unsecured Creditors, inter alia, may file motions with the Court until the 90th day after the Petition Date seeking to: (i) determine the value of a collateral securing the Debtors' prepetition debt; and (ii) recharacterize any portion of the outstanding amount of the prepetition first lien term loan credit facility in excess of $750,000,000. The Final DIP Order also provides that the Committee may file a complaint with the Court no later than September 18 to challenge the extent, validity, priority, perfection and enforceability of the Debtors' obligations under their $1,306,000,000 first lien credit facility and $244,000,000 second lien credit facility. Laura D. Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates the Committee issued informal written document requests to the Debtors, the First Lien Lenders, and the Second Lien Lenders related to the Valuation Issues and the Lien Challenge. She relates: -- the Debtors have produced some documents but have not produced any e-mails, and said (i) they need additional time to produce those documents, and (ii) certain of the document requests were overbroad; and -- the First Lien Lenders and Second Lien Lenders have not produced any documents, arguing that it was irrelevant and overbroad. Ms. Jones asserts that good cause exists for the Committee to conduct the proposed discovery, as it is seeking information critical to its fulfillment of its fiduciary duties to its unsecured creditors. She adds the Committee is disadvantaged in investigating the Valuation Issues and Lien Challenge because the Debtors have not yet filed their schedules of assets and liabilities and statement of financial affairs and because relevant documents are solely within the possession of the Debtors and the Prepetition Lenders. The Committee reserves its rights to seek additional documents and oral examinations of the Debtors, the First Lien Lenders, or the Second Lien Lenders, based on any information that may be revealed as a result of the Document Requests. * * * Judge Kevin J. Carey grants the Committee's request to shorten the notice period and to convene an August 19, 2008 hearing. Objections were due August 18. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. The Debtors' exclusive plan filing period expires on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 9; http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Panel Objects to Employment of CROs ----------------------------------------------------------- Pursuant to Sections 105(a) and 363(b) of the Bankruptcy Code, LandSource Communities Development, LLC, and its affiliated debtors, previously sought the U.S. Bankruptcy Court for the District of Delaware's permission to employ Timothy P. Hogan and H. Lawrence Webb of HoganWebb LLC as their co-chief restructuring officers, nunc pro tunc to July 1, 2008. Committee: CROs Not Needed The Official Committee of Unsecured Creditors objects to the Debtors' request to hire chief restructuring officers. Laura D. Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, asserts there is no basis for the retention of Timothy P. Hogan and H. Lawrence Webb of HoganWebb LLC as CROs: (a) There is no allegation of fraud, mismanagement, or misconduct in the Debtors' Chapter 11 cases. In fact, the executives in charge of the Debtors are highly respected in the industry and by the trade creditors. The First Lien Lenders and the Debtors want the current management to stay in place. This is evident by the $6,700,000 in employee benefits and stay bonuses that are being proposed. Thus, the appointment of a CRO is unnecessary and the Application should be denied. (b) The terms of HoganWebb's retention is unreasonable because the firm will incur fees likely to exceed $2,500,000 as a floor and may be as high as $4,000,000 for a 12-month period. Even though the DIP Credit Agreement required the Debtors to try to employ a CRO, it did not state that the terms of the retention could be excessive. The compensation of all other executives in the Debtors' cases is a fraction of that proposed for the CROs. Moreover, the services proposed by the CROs are duplicative of the services being rendered by the Debtors' financial advisors, Lazard Freres & Co LLC. (c) The DIP Credit Agreement simply requires that the Debtors make a commercially reasonable effort to seek the employment of a CRO. However, if the Court denies the CRO Application, that does not constitute an event of default under the DIP Financing Order and the DIP Credit Agreement. In the absence of any evidence that the retention of HoganWebb will bring an actual benefit to the estates other than to pacify the First Lien Lenders, the Committee prays to the Court that the Application should be denied. BNY: $750MM Base for Bonuses Too Low The Bank of New York Mellon, the administrative agent for the Second Lien Lenders, does not object in principle to the employment of Messrs. Hogan and Webb but objects to certain provisions of the CROs' proposed bonuses. Andrew N. Rosenberg, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, notes that if the Debtors are valued at over $750,000,000, the CROs will receive a bonus of "20 basis points" of every dollar of additional value. The $750,000,000 value, according to Mr. Rosenberg, is an illusionary number with no economic basis. "The Debtors give no reasoning, economic or otherwise, behind the $750,000,000 value number." A value of $750,000,000 may only provide for recovery to the DIP/First Lien Lenders and none for the Second Lien Lenders, Mr. Rosenberg notes. Mr. Rosenberg asserts the bonuses should only become payable if the Debtors are valued above the amount necessary to pay the DIP/First Lien Lenders and all cash under the DIP/First Lien Credit Agreement. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. The Debtors' exclusive plan filing period expires on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 9; http://bankrupt.com/newsstand/or 215/945-7000). LANDSOURCE COMMUNITIES: Panel Wants Deadline on Lien Motions Moved ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in LandSource Communities and its debtor-affiliates' bankruptcy cases asks the U.S. Bankruptcy Court for the District of Delaware to extend the time within which they may file certain motions and complaints in connection with Valuation Issues and Liens Challenge. The Court's order granting final approval to the Debtors' $1,185,000,000 debtor-in-financing package, funded by the syndicate of Barclays Bank PLC-led lenders, provides for: -- a September 8, 2008 deadline by which the Official Committee of Unsecured Creditors may file a motion or application with the Court to determine the value of the collateral securing the Debtors' prepetition debt and to recharacterize outstanding any amounts as unsecured deficiency claims; and -- a September 18, 2008 deadline by which the Committee may file a complaint or motion challenging the extent, validity, priority, perfection and enforceability of certain liens. The DIP Lenders are the same lenders who granted Debtors' prepetition loans, backed by first priority liens on substantially all of the Debtors' property. The DIP Facility provides the Debtors with $135,000,000 additional credit and a roll-up of up to $1,050,000,000 of debt owed to the First Lien Lenders. Laura D. Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, relates that prior to the Final DIP Hearing, the Creditors Committee issued informal, written request for documents -- writings and recordings, including emails -- related to the valuation and liens-challenge issues to: * the Debtors, * the First Lien Lenders, and * lenders owed $244,000,000 as of the Petition Date, for loans issued to the Debtors, backed by second priority interests in the same collateral issued to the First Lien Lenders. Ms. Jones informs the Court that the Committee has not received documents that would allow it to determine whether it needs to bring certain claims in the Debtors' cases. Accordingly, it is rightful to grant the Committee the extension because the Debtors require additional time to produce additional documents and the First and Second Lien Lenders refuse to produce any documents, Ms. Jones asserts. "These realities have compromised the Committee's ability to assess the Valuation Issues and Lien Challenge questions." It is rightful to grant the Committee the extension because the Debtors require additional time to produce emails and the First and Second Lien Lenders refuse to produce any documents, Ms. Jones asserts. "These realities have compromised the Committee's ability to assess the Valuation Issues and Lien Challenge questions." * * * Judge Kevin J. Carey has granted the Committee's request for shortened notice and set a August 19, 2008 hearing. Objections were due August 18. About LandSource Communities LandSource Communities Development LLC, which operates in Arizona, California, Florida, New Jersey, Nevada and Texas, is involved in the planning and development of master planned communities and transforming undeveloped land into ready-to-build home sites and commercial properties. With the exception of one development project in Marina del Rey, California, LandSource does not build homes or commercial properties. LandSource and 20 of its affiliates filed for chapter 11 bankruptcy protection before the U.S. Bankruptcy Court for the District of Delaware on June 8, 2008 (Lead Case No. 08-11111). The Debtors are represented by Marcia Goldstein, Esq., at Weil Gotshal & Manges in New York, and Mark D. Collins, Esq., at Richards Layton & Finger in Wilmington, Delaware. Lazard Freres & Co. acts as the Debtors' financial advisors, and Kurtzmann Carson Consultants serves as the Debtors' notice and claims agent. According to the Troubled Company Reporter on May 22, 2008, LandSource sought help from its lender consortium to restructure $1.24 billion of its debt. LandSource engaged a 100-bank lender group led by Barclays Capital Inc., which syndicates LandSource's debt. LandSource had received a default notice on that debt from the lender group after it was not able to timely meet its payments during mid-April. However, LandSource failed to reach an agreement with its lenders on a plan to modify and restructure its debt, forcing it to seek protection from creditors. The Debtors' exclusive plan filing period expires on Oct. 6, 2008. (LandSource Bankruptcy News, Issue No. 9; http://bankrupt.com/newsstand/or 215/945-7000). LBI MEDIA: Moody's Lowers $270 Senior Loans' Rating to Ba2 ---------------------------------------------------------- Moody's Investors Service downgraded LBI Media, Inc.'s Corporate Family Rating and its Probability of Default Rating to B2 from B1. In addition, Moody's downgraded the company's $270 million senior secured credit facility to Ba2 from Ba1 and the company's $229 million Senior Subordinated Notes due 2017 to B3 from B2. The ratings outlook is stable. The ratings downgrade reflects the company's weaker than expected operating performance which has resulted in weaker than expected credit metrics. In addition, the company completed certain debt- financed acquisitions that were not incorporated in the prior rating and credit metric expectations. As a result, Moody's now believes that the company's debt to EBITDA leverage and other credit metrics will remain at levels commensurate with a B2 CFR over the rating horizon. Moody's subscribers can find further details in the LBI Credit Opinion published on Moodys.com Moody's has taken these ratings actions: LBI Media, Inc. -- Corporate Family Rating -- Downgraded to B2 from B1 -- Probability of Default Rating -- Downgraded to B2 from B1 -- $150 million Secured Revolver -- Downgraded to Ba2 from Ba1 (to LGD 2, 19% from LGD 2, 18%) -- $120 Million Secured Term Loan -- Downgraded to Ba2 from Ba1 (to LGD 2, 19% from LGD 2, 18%) -- $229 Million Senior Subordinated Notes due 2017 -- Downgraded to B3 from B2 (LGD 4, 69%) The outlook is stable. The B2 rating reflects the company's high debt to EBITDA leverage of 8.6x for the trailing twelve months ended June 30, 2008, lack of significant geographic diversification and revenue and cash flow concentration in the Los Angeles market. Additionally, LBI's ratings reflect weaker than expected operating performance and credit metrics, modest scale and our expectation that the company will remain acquisitive as it seeks to expand its current station portfolio in existing and new markets. The company's ratings are supported by its industry leading margins, clustering of radio and television stations in the top Hispanic markets and concentration of local advertising revenues. In addition, Moody's expects LBI to continue to benefit from the strong Hispanic demographic trends. LBI Media, Inc., headquartered in Burbank, California, is a Spanish-language broadcasting company that owns 22 radio stations and 5 television stations in Los Angeles, Houston, Dallas-Fort Worth, San Diego and Salt Lake City. LETTUCE FIELDS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lettuce Fields, LLC aka London Flats aka Valleyview P.O. Box 2309 Vancouver, WA 98668 Bankruptcy Case No.: 08-44010 Type of Business: The Debtor develops real estate. Chapter 11 Petition Date: August 14, 2008 Court: Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Neil T. Jorgenson, Esq. (ntj@jorlaw.com) 520 SW 6th Ave., #820 Portland, OR 97204-1514 Tel: (503) 224-2823 Total Assets: $16,165,526 Total Debts: $14,948,622 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Green Gables, LLC $150,000 7535 NE 25th Street Vancouver, WA 98662 Washington Dept. of Revenue $100,000 P.O. Box 47464 Olympia, WA 98504-7464 Allan Affleck $100,000 6363 Lake Washington Blvd. #20 Kirkland, WA 98033 Cosco Fire Protection $88,231 City of Vancouver $84,483 Lanz Cabinet Shop, Inc. $62,352 Internal Revenue Service $50,000 Action Paving $45,520 Urban Surfaces $43,327 Medallion Industries, Inc. $29,851 R.C.I.P. $28,088 Jones Landscape $26,631 Department of Labor & Industry $25,000 Sears Contract Sales $16,583 RH Insulation Co., LLC $14,279 Fireside Distributors $13,318 Universal Plumbing $9,900 GC- Construction $9,203 Yelchaninov Construction, Inc. $7,931 Acousti Level Floor $7,574 LINENS 'N THINGS: Gets Vendors OK on Trade Vendor Payment Program ----------------------------------------------------------------- Linens Holding Co. obtained the support of many key vendors for its Trade Vendor Payment Program, approved by the United States Bankruptcy Court for the District of Delaware last month. Springs Global US, the Yankee Candle Company, Croscill Home Fashions, and M. Block & Sons, four major suppliers of merchandise to the company, have now agreed to participate in the Trade Credit Program, which provides letters of credit of up to $100 million. The Company has agreed to limit participation in the Vendor Program to $100 million. At least 40 vendors have signed up for the program at present. "We are very appreciative of the widespread support shown by our vendors as we progress with our restructuring and head into the busy fall shopping season," said Michael Gries, Chief Restructuring Officer and Interim CEO. "The Trade Vendor Payment Program is critical to maintaining positive relationships with the trade community, as we provide our customers with the wide assortment and depth of quality merchandise they expect from Linens 'n Things." "LNT is a long-standing customer of Springs/Wamsutta and we are excited to be able to support their product needs for the fall season," added Tom O'Connor, Executive Vice President of Springs Global US, Inc. "We look forward to building on our partnership with LNT for years to come." About Linens 'n Things Clifton, New Jersey-based Linens 'n Things, Inc. -- http://www.lnt.com/-- is the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 589 stores in 47 U.S. states and seven Canadian provinces as of Dec. 29, 2007. The company is a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Linens 'n Things has some 585 superstores (33,000 sq. ft. and larger), emphasizing low-priced, brand-name merchandise, in more than 45 states and about seven Canadian provinces. Brands include Braun, Krups, Calphalon, Laura Ashley, Croscill, Waverly, and the company's own label. Linens 'n Things was acquired by private equity firm Apollo Management in 2006. On May 2, 2008, these Linens entities filed chapter 11 petition (Bankr. D. Del.): Linens Holding Co. (08-10832), Linens 'n Things, Inc. (08-10833), Linens 'n Things Center, Inc. (08-10834), Bloomington, MN., L.T., Inc. (08-10835), Vendor Finance, LLC (08- 10836), LNT, Inc. (08-10837), LNT Services, Inc. (08-10838), LNT Leasing II, LLC (08-10839), LNT West, Inc. (08-10840), LNT Virginia LLC (08-10841), LNT Merchandising Company LLC (08-10842), LNT Leasing III, LLC (08-10843), and Citadel LNT, LLC (08-10844). Judge Christopher S. Sontchi presides over the case. The Debtors' bankruptcy counsels are Mark D. Collins, Esq., John H. Knight, Esq., Michael J. Merchant, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A. The Debtor's special corporate counsels are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCartin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Gardere Wynne Sewell LLP; and Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan, Lewis & Bockius LLP. The Debtors' restructuring management services provider is Conway, Del Genio, Gries & Co., LLC. The Debtors' CRO/Interim CEO is Michael F. Gries, co-founder of Conway Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protiviti, Inc. Their investment bankers are Financo, Inc. and Genuity Capital Markets. The Official Committee of Unsecured Creditors is represented by Scott L. Hazan, Esq., and Glenn Rice, at Otterbourg Steindler Houston & Rosen P.C., as lead counsel. Norman L. Pernick, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Wilmington, Delaware, serves as local co-counsel. Carl Marks Advisory Group LLC serves as financial advisor to the Creditors' Committee. A Noteholder Committee has been formed and is represented by Kasowitz, Benson, Torres & Friedman LLP, and Pachulski Stang Ziehl & Jones. LONGHORN CDO: Moody's Lowers Ba1 $6.6MM Sec. Notes' Rating to B1 ---------------------------------------------------------------- Moody's Investors Service downgraded these notes issued by Longhorn CDO III, Ltd.: Class Description: $4,500,000 Class D-1 Notes Floating Rate Deferrable Interest Senior Secured Notes, due April 10, 2015 -- Prior Rating: Baa2 -- Current Rating: Baa3 Class Description: $5,900,000 Class D-2 Floating Rate Deferrable Interest Senior Secured Participating Notes, due April 10, 2015 -- Prior Rating: Baa2 -- Current Rating: Baa3 Class Description: $6,600,000 Class E Floating Rate Deferrable Interest Senior Secured Notes, due April 10, 2015 -- Prior Rating: Ba1 -- Current Rating: B1 According to Moody's, these rating actions are as a result of a few covenant failures, most notably the weighted average spread test, and in addition the weighted average Moody's rating factor test. The transaction's underlying collateral pool consists primarily of senior secured loans. MAGNA ENTERTAINMENT: Selling Ocala, Florida Asset for $16.5MM Cash ------------------------------------------------------------------ Magna Entertainment Corp. entered into an agreement to sell approximately 489 acres of excess real estate located in Ocala, Florida to Lincoln Property Company and Orion Investment Properties Inc. for a purchase price of $16.5 million cash, subject to a 90-day due diligence period in favor of the purchasers. If the purchasers determine that their due diligence review is satisfactory and do not terminate the agreement before the end of the 90-day due diligence period, then the transaction would close 60 days thereafter, subject to the satisfaction of customary closing conditions. The property forms part of the security for the company's bridge loan with a subsidiary of MI Developments Inc., the company's controlling shareholder, and the terms of the bridge loan require that any net proceeds received from the sale of the property must be used to make repayments under the bridge loan. About Lincoln Property Company and Orion Investment Headquartered in Dallas, Texas, Lincoln Property Company -- http://www.lincolnproperty.com/-- is a diversified real estate company. Lincoln Property began by building apartments in the Dallas area, then expanded into commercial and retail projects. It owns, leases, and manages around 290 residential communities throughout the US. Its commercial division provides management, development, and brokerage services for industrial, office, retail, and mixed-use real estate. Lincoln Property also develops and manages military housing. Based in Orlando, Florida, Orion Investment Properties Inc. is a real estate developer. About Magna Entertainment Corp. Headquartered in Aurora, Ontario, Magna Entertainment Corp. -- http://www.magnaentertainment.com/-- (Nasdaq: MECA)(TSX: MEC.A) acquires, develops, owns and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. The company also develops, owns and operates casinos in conjunction with its racetracks where permitted by law. Waiver As reported in the Troubled Company Reporter on Aug. 12, 2008, Two of Magna Entertainment Corp.'s subsidiaries that own and operate Pimlico Race Course and Laurel Park had borrowings of $9.0 million outstanding at June 30, 2008 under term loan credit facilities with a U.S. financial institution. At June 30, 2008, MEC was not in compliance with one of the financial covenants contained in those credit agreements. MEC obtained a waiver from the lender on Aug. 5, 2008, for this financial covenant breach at June 30, 2008, and the loan facilities were amended to temporarily modify this financial covenant as at Sept. 30, 2008. MEGA BRANDS: Amends Credit Deal, Closes C$75MM Debentures Offering ------------------------------------------------------------------ MEGA Brands Inc. received lender approval for certain amendments to its senior secured credit facilities maturing in 2012. On Aug. 18, 2008, the company executed a sixth amending agreement to its Credit Agreement dated July 26, 2005 providing for certain changes to the terms and conditions of its senior secured Credit Facilities maturing in 2012, including a waiver of the cumulative minimum EBIDTA ratio covenant for the period ended June 30, 2008. Additionally, the Sixth Amendment introduces the concept of a new definition of the calculation of EBIDTA allowing for the add-back of certain non-recurring and non-cash items. The covenant includes a minimum EBITDA at the end of each quarter up to and including June 30, 2010, at which point more stringent covenants previously in place under the Credit Agreement become effective. The revolving credit facility has been reduced to $100 million. Concurrently, the company has closed the private placement offering of senior unsecured convertible debentures with Fairfax Financial Holdings Ltd., Chiefswood Holdings Limited, The Owners Fund and Victor J. Bertrand Sr., the founder and chairman of the board of directors of the Corporation, reported on Aug. 11, 2008, which will generate gross proceeds of C$75 million and mature on Aug. 31, 2013. The debentures will bear interest at a rate of 8% payable semi- annually in arrears and will be convertible at the option of the holder at any time prior to the maturity date based on a conversion price equal to approximately C$3.19 per common share, subject to customary anti-dilution adjustments. The debentures will be convertible into 23,512,500 common shares, representing 39% of the common shares of the Corporation on an as converted basis. Assuming full conversion of the debentures to be issued to them, Fairfax would hold 20,064,000 common shares or 35.4% of the outstanding shares of the Corporation and such a conversion may have a material effect on control, Victor J. Bertrand Sr. would hold an additional 2,194,500 common shares which, with his current holding, will represent 11% of the outstanding shares of the Corporation and each of Chiefswood and The Owner Group would receive 627,000 common shares which represent approximately 1 % of the outstanding shares of the Corporation. BMO Capital Markets acted as exclusive placement agent and financial advisor to MEGA Brands in connection with the Offering. The proceeds of the offering, combined with the amendments to the Corporation's Credit Facility, provide the Corporation with the financial resources and flexibility to meet working capital requirements leading up to the peak toy selling season and to continue the implementation of its Value Enhancement Plan. MEGA Brands Inc. (CA:MB) -- http://www.megabrands.com-- makes toys, games & puzzles, arts & crafts and stationery. * * * As reported in the Troubled Company Reporter on Aug. 18, 2008, Standard & Poor's Ratings Services lowered its corporate credit and bank loan ratings on Montreal-based MEGA Brands Inc. and its subsidiaries to 'B-' from 'B'. The ratings remain on CreditWatch with negative implications, where they were placed Nov. 9, 2007. The '3' recovery rating on the bank loan is unchanged. MFS INVESTMENT: Reports Redemption Dates for Percentage of ARPS --------------------------------------------------------------- MFS Investment Management disclosed the redemption dates for a percentage of auction rate preferred shares issued by one of its closed-end funds that utilizes ARPs: MFS High Income Municipal Trust. As reported in the Troubled Company Reporter on July 1, 2008, MFS Investment Management intends to restructure, subject to market conditions, up to 20% of the leverage used by MFS California Insured Municipal Fund (AMEX: CCA); MFS Investment Grade Municipal Trust (NYSE: CXH); MFS Municipal Income Trust (NYSE: MFM); MFS High Income Municipal Trust (NYSE: CXE); and MFS High Yield Municipal Trust (NYSE: CMU). The company stated that this restructuring represents a step toward restoring liquidity for the funds' auction rate preferred shares in a manner consistent with the best interests of the funds' common and preferred shareholders. The Fund is expected to redeem these amounts of ARPs on these dates for its two series of ARPs, subject to satisfying certain notice and regulatory requirements: Series: T CUSIP: 195743307 Redemption Date: Sept. 15, 2008 Total Shares to be Redeemed: 450 Aggregate Principal Amount to be Redeemed: $11,250,000 % of Outstanding ARPs: 18.75% Series: W CUSIP: 195743406 Redemption Date: Sept. 16, 2008 Total Shares to be Redeemed: 450 Aggregate Principal Amount to be Redeemed: $11,250,000 % of Outstanding ARPs: 18.75% The redemption price will be equal to the liquidation preference of $25,000 per share, plus the amount of accumulated but unpaid dividends. The record holder of the ARPs is CEDE & Co., the nominee of the Depository Trust Company. DTC has well-established rules for allocating partial redemptions among participating broker-dealer accounts. Each broker-dealer is then responsible for allocating the redemption among its investors. Allocation procedures among different brokers may vary, but the Financial Industry Regulatory Authority issued Regulatory Notice 08-21 and related interpretive guidance, reminding its members, which include registered broker dealers, that they are obligated to follow an allocation process that complies with New York Stock Exchange Rule 402.30 unless they obtain a determination from FINRA that an alternate process is equally acceptable. The Fund is financing this redemption of ARPs through tender options bonds. In creating a TOB, typically a fund transfers a highly rated bond from its portfolio to a special purpose trust that issues two classes of securities: floating rate certificates, which pay an interest rate that will be reset weekly, and residual interest certificates, which pay an interest rate based on the difference between the interest rate earned on the underlying bonds and the interest rate paid on the floating rate certificates, after TOB program expenses. The fund holds the residual interest certificates and uses the proceeds from the sale of the floating rate certificates to redeem a portion of its outstanding ARPs. MFS has experience in creating TOBs and has invested in TOB residuals on behalf of other funds that it manages since 1991. The TOB structure is less permanent than ARPs since TOBs may be unwound upon the occurrence of certain events such as a failed remarketing of the TOB securities, a bankruptcy of the issuer of the underlying security or if the bonds are insured, the bankruptcy of the issuer and the bankruptcy of the insurer, as well as certain other credit events. There is no certainty that TOB financing will be available in the future. TOBs have been reasonably steady in recent markets but there is no certainty that they will be profitable in future interest rate environments. Due to the requirements of the TOB structure, a fund that utilizes TOBs may hold more concentrated positions in individual securities, leading to increased impact on fund performance if such securities experience a ratings downgrade. Based on market conditions that have persisted for several months, and including the fact that the dividend rate payable on the ARPs is determined by reference to the maximum applicable dividend rate, the total cost of financing through TOBs is expected to be lower than the total cost of financing through ARPs. Various limitations on the Fund's ability to hold bonds suitable for use in the creation of TOBs, along with certain other considerations, permit only a portion of the Fund's ARPs to be redeemed at this time. Under different market conditions, the cost of financing through TOBs may become disadvantageous and may become more expensive than financing through ARPs; in that circumstance, the Board of Trustees will evaluate alternatives that it considers to be in the best interests of the Fund's shareholders. Subject to market conditions, MFS expects that it will provide more specific information within the next 30 - 60 days regarding partial refinancing of the outstanding ARPs of MFS closed-end fund MFS Municipal Income Trust through the creation of TOBs. MFS announced on July 23, 2008, redemption dates for a percentage of ARPs issued by two other MFS closed-end funds: MFS Investment Grade Municipal Trust and MFS High Yield Municipal Trust At this time, MFS does not expect to be able to refinance through the creation of TOBs any of the outstanding ARPs of a fifth, smaller MFS closed-end fund, MFS California Insured Municipal Fund because it would be necessary to take concentration risk in CCA to create a TOB of sufficient size to be marketable. MFS believes this level of concentration risk is not advisable under current market conditions. MFS continues to participate in industry-wide efforts to restructure ARPs in a way to make them eligible for repurchase by money market funds. However, it is not certain when, or if, the MFS closed-end funds' remaining ARPs will be restructured or redeemed. MFS manages approximately $183 billion in assets on behalf of more than 5 million individual and institutional investors worldwide as of June 30, 2008. The company traces its origins to 1924 and the creation of America's first mutual fund. About MFS Investment Management MFS Investment Management manages $184 billion in assets on behalf of more than 5 million individual and institutional investors worldwide as of March 31, 2008. The company traces its origins to 1924 and the creation of America's first mutual fund. NCOAT INC: Hansen Barnett Expresses Going Concern Doubt ------------------------------------------------------- Hansen, Barnett & Maxwell, P.C., in Salt Lake City raised substantial doubt about nCoat, Inc.'s ability to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2007. The auditing firm pointed to the company's losses from operations, negative cash flows from operating activities, and working capital and stockholders' deficit. The company's working capital deficit as at Dec 31, 2007, was $5,593,301 with accumulated losses from the date of inception of $36,085,141 through Dec. 31, 2007. The company (i) entered into a share exchange agreement in February 2007; (ii) had engaged an investment banking firm to assist in raising new capital; (iii) had increased operating activities focused on the marketing of its products; and (iv) had been negotiating sales agreements all to enable it to generate sufficient cash flow for it to continue as a going concern. If the company does not receive sufficient funds to settle amounts owed to creditors and pay future expenses, there is the possibility that it would be unable to continue. The company reported a net loss of $27,699,407 on net sales of $7,765,309 for the year ended Dec. 31, 2007, as compared with a net loss of $6,718,955 on net sales of $5,572,621 in the prior year. At Dec. 31, 2007, the company's balance sheet showed $6,818,877 in total assets and $20,453,705in total liabilities, resulting in a $13,634,828 stockholders' deficit. The company's consolidated balance sheet at Dec. 31, 2007, also showed strained liquidity with $1,616,824 in total current assets available to pay $7,210,125 in total current liabilities. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?309f Management's Statement Since the initial shortfall in the expected financing occurring in June and July, the company is experiencing a significant liquidity crisis. A number of the company's vendors have turned the company's accounts over to collection agencies. At Dec. 31, 2007, the company had accounts payable in excess of $1,500,000 over 120 days past due. At Dec. 31, 2007, the company had cash of $295,961 and net trade receivables of $934,337. The company does not generate sufficient cash from its operations in any given month to meet its expenses and fund its operations. The company has an immediate need for financing to pay its overdue accounts and fund its operations. Because the company does not generate enough income to support its operations, it needs immediate financing of around $2,500,000. There can be no assurance such financing will be available, or available on terms acceptable to the company. If the company is unable to obtain financing, it will be unable to pay its liabilities, and the company may need to cease operations. Management's strategy includes, among other elements, the development of long-term strategic partnerships with well- established corporations. These companies include large original equipment manufacturers that build parts, engines, pistons, or other components in the automotive and marine fields with which the company could leverage its business using their book of business, or brand identification in the industry. The company cannot dictate to those companies their business activities regarding their partnership; however, management expects to enter into agreements that will allow the company to influence the partnership for mutual success. The company's growth in that area of the business plan may be limited if it is either unable to identify and partner with these larger companies, or in the course of the partnership, it is unable to execute its business plans. About nCoat nCoat, Inc. (Other OTC: NCOA) -- http://www.ncoat.com/-- and its subsidiaries researches, licenses, commercializes, distributes, and applies nano and multiple non-nano surface coatings. The company's coatings are used by automotive, diesel engine, trucking, recreational vehicle, motorcycle, aerospace, and oil and gas industries for heat management, corrosion resistance, friction reduction, bond strength, abrasion protection, and appearance applications. It also develops and holds proprietary intellectual property, and focuses on executing its distributed production and licensing strategy. The company was founded in 2004 and is headquartered in Whitsett, N.C. NORTH FOREST ISD: S&P Cuts Gen. Obligation Debt Ratings to 'B' -------------------------------------------------------------- Standard & Poor's Ratings Services has lowered its standard long- term rating, issuer credit rating (ICR), and underlying rating (SPUR) on North Forest Independent School District, Texas' general obligation (GO) debt to 'B' from 'BB'. Standard & Poor's also placed its ratings on CreditWatch with developing implications. The downgrades reflect a worsening of the district's financial position and the potential for the district to cease operations. The CreditWatch action reflects the potential for additional negative rating action should the financial stress worsen in the short term, but also reflects the potential for upward rating action depending on the results of actions taken by the Texas Education Agency. The 'AAA' rating, and stable outlook, on the bonds guaranteed by the Texas Permanent School Fund remains in place. The district's next debt service payment is scheduled for Friday, Aug. 15, 2008. Management has indicated that there are sufficient funds on hand, roughly $4.5 million, to cover the $3.9 million payment. Pending approval from the U.S. Department of Justice, the Texas Education Agency will implement a plan that will replace the school board and install a new superintendent this fall. Despite previous management actions designed to stabilize the district's financial condition, the district is facing a nearly $12 million budget shortfall. Earlier this year, the rating was lowered to 'BB' from 'BBB-' due to the district's significant financial deterioration and the potential for it to cease operations. Management has taken several actions designed to have a positive financial impact, including the reduction of 50 positions for the current fiscal year, the planned reduction of 90 positions for the following school year, along with the merging of four schools into two schools. The district ended fiscal 2007 with a severe decline in the unreserved general fund balance to a negative $6.7 million from a positive $14.8 million in fiscal 2006 based on a number of factors, including the recording of a $7.3 million liability to the state of Texas for the overpayment of per pupil funding in the previous year and deficit spending in instructional, school leadership, and administration areas. According to the auditor, the overpayment by the state was due to improper reporting of student enrollment while deficit spending was due to the finance department's understaffing and lack of monitoring. The independent auditor also expressed concern about the district's ability to continue to exist. Other problems include management's use of bond proceeds to cover a portion of operating expenses while waiting for additional tax revenues to be collected. These funds have not been fully repaid. NUVEEN INVESTMENTS: S&P Revises Outlook to Negative; B+ Affirmed ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Nuveen Investments Inc. (Nuveen) to negative from stable. At the same time, S&P affirmed its 'B+' long-term counterparty credit rating on Nuveen. "The outlook revision results from several factors, including reduced operating cash flows, net client outflows, and a decline in assets under management, hurt by notable market depreciation," said Standard & Poor's credit analyst Robert Hansen, CFA. "Furthermore, we expect revenue, earnings, and operating cash flows in 2008 to be meaningfully less than our original expectations, partly due to weakness in the capital markets and a generally more-challenging sales environment. We also see tepid demand for closed-end fund offerings this year given current discounts to net asset value on existing funds," S&P says. "However, Nuveen's liquidity appears adequate given cash balances and ample borrowing capacity under its $250 million revolving credit facility. Financial covenants are lenient other than a leverage covenant related to the incurrence of additional indebtedness. We expect the $250 million in senior notes, which comes due in September 2010, to be refinanced or paid with available cash balances. "The counterparty credit rating reflects Nuveen's high financial leverage, strong competitive niche position, solid reputation, and generally good investment performance. The company has a well- balanced product offering, which includes municipal bonds, equities, and taxable fixed-income products. We view revenue stability as strong, aided by the company's high proportion of closed-end fund offerings, which are nonredeemable. "The negative outlook reflects our opinion that the rating has come under pressure in the current market environment. If financial performance shows further deterioration, we could lower the rating. Alternatively, if revenues, net client flows, and operating cash flows improve significantly, which we view as less likely, we could raise the rating." PACIFIC LUMBER: S&P Lowers Ratings on Scopac Timber Notes to 'D' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on all classes of timber-collateralized notes issued by Scotia Pacific Co. LLC (ScoPac) to 'D'. The rating actions follow the acquisition of ScoPac's properties by Mendocino Redwood Co. and Marathon Structured Finance Fund for an approximate amount of $514 million. Although the funds have yet to be distributed, this amount is less than the $714 million of principal, not including interest, owed to noteholders. ScoPac, along with its parent company, the Pacific Lumber Co. (Palco), and other subsidiaries, previously filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code on Jan. 18, 2007. RATINGS LOWERED Scotia Pacific Co. LLC Timber-collateralized notes Rating Class To From Balance ($ mil.) ----- -- ---- ---------------- A-1 D CCC- 7.294 A-2 D CCC- 243.200 A-3 D CCC- 463.348 PRC LLC: Inks Stipulation Resolving Sprint Communications Dispute ----------------------------------------------------------------- PRC LLC and its debtor-affiliates, PRC LLC's former parent IAC/InterActive Corp., and Sprint Communications Company L.P. entered into a stipulation that resolves a service dispute between the parties. Before the date of bankruptcy, IAC/InterActive and Sprint were parties to a Master Services Agreement, under which the Debtors received and purchased wireline and wireless telecommunication services from Sprint. The Debtors paid Sprint $107,000 as adequate assurance deposit for future services pursuant to a Court order. Sprint filed amended Claim No. 403 -- superseding Claim Nos. 254, 204, 341, 108, and 105 -- for the Debtors' prepetition default amounting to $403,054 under the Master Services Agreement. The Debtors filed a motion seeking to reject the Sprint Master Services Agreement effective September 30, 2008, which motion was objected by Sprint. The Reorganized Debtors later informed Sprint that they want to continue receiving wireless telecommunication services, but want to stop receiving Sprint's wireline services. On July 28, 2008, the Reorganized Debtors and Sprint entered into a Master Service Agreement under which Sprint will supply the Reorganized Debtors wireless telecommunication services for three years. The parties later entered into a Court-approved stipulation providing that: (a) The Reorganized Debtors will pay $42,000 for unpaid prepetition wireless telecommunication services owing to Sprint. To effect payment, Sprint will subtract the $42,000 from the Utility Deposit and apply to the amount to the wireless account. (b) The Reorganized Debtors will provide Sprint a $35,000- deposit as adequate assurance of future payment under the Wireless Contract. Sprint will subtract the $35,000 deposit from the Utility Deposit and hold the $35,000 as the new deposit. Sprint will apply the remainder of the Utility Deposit to future invoices beginning with the September 2008 invoice until the remainder of the Utility Deposit has been applied. (c) Claim Nos. 254, 204, 341, 108, and 105, and all scheduled claims on behalf of Sprint are expunged. Claim No. 403 is reduced and allowed as a Class 6 General Unsecured Claim for $367,054 in full and final satisfaction of Sprint's Claim, and will be paid according to the Plan. (d) The Reorganized Debtors may reject the Master Services Agreement effective September 30, 2008. Until the rejection date, Sprint will continue to provide the Reorganized Debtors wireline telecommunication service,s and the Reorganized Debtors will pay Sprint for the services in the ordinary course of business. Sprint will not have any claim or right to early termination charges or similar charges relating to the wireline services or the termination or disconnection of the services. To avoid any doubt, Sprint will not have any claim against the Reorganized Debtors or the Debtors relating to the rejection of the Master Services Agreement. (e) Sprint will release and discharge the Reorganized Debtors, the Debtors, and their assigns from all actions, judgments, claims, and causes of action, with respect to the Master Services Agreement. (f) The Reorganized Debtors will release and discharge Sprint and their assigns from all actions, judgments, claims, and causes of action with respect to the Master Services Agreement. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. The Court confirmed that Plan mid-June 2008. (PRC LLC Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PRC LLC: Names Steve K. Richards as Chief Executive Officer ----------------------------------------------------------- PRC LLC has appointed Steven K. Richards as the company's chief executive officer effective August 5. He succeeds Jerry McElhatton, who served as PRC's chief executive officer during the company's recently-completed reorganization. Mr. McElhatton will remain with the company in an advisory capacity during a transitional period. Prior to joining PRC, Mr. Richards served as president of Transworld Systems, where he led an expansion of the business and delivered record revenues and earnings. He also served as chief operations officer at RMH Teleservices, a North American call center outsourcer. Additionally, he has held key positions with AT&T and with Excel Communications, a unit of BCE Inc. "I am delighted to join PRC as we embark on an exciting new stage in the Company's history," Mr. Richards said in the company's press release. "PRC has a well-deserved reputation for delivering superior customer satisfaction for its marquee clients and providing outstanding service to their customers. Our top priority will be to continue to deliver on PRC's commitment to 100%, across-the-board client satisfaction. PRC has an excellent team of talented, forward-thinking professionals, and I look forward to working closely with them as we grow the business together." Mr. McElhatton said of Mr. Richards, "Steve brings a wealth of experience in the BPO industry and outstanding leadership credentials to PRC. I am confident that Steve and his team will capitalize on PRC's financial stability and operational effectiveness to realize PRC's ambitious growth and profitability objectives." Mr. Richards earned a Business degree with honors at Penn State and has completed Executive Programs at Duke, UVA and Penn State. He will join the Board of PRC's parent company. About PRC LLC Founded in 1982 and based in Fort Lauderdale, Florida, PRC, LLC -- http://www.prcnet.com/-- is a leading provider of customer management solutions. PRC markets its services to brand-focused, Fortune 500 U.S. corporations and delivers these services through a global network of call centers in the U.S., Philippines, India, and the Dominican Republic. PRC is the sole member of each of PRC B2B, LLC, and Precision Response of Pennsylvania, LLC, and the sole shareholder of Access Direct Telemarketing, Inc., each of which is a debtor and debtor- in-possession in PRC's joint Chapter 11 cases. Panther/DCP Intermediate Holdings, LLC, is the sole member of PRC. PRC, together with its operating subsidiaries PRC B2B, Access Direct, and PRC PA, is a leading provider of complex, consultative, outsourced services in the Customer Care and Sales & Marketing segments of the business process outsourcing industry. Since 1982, the company has acquired and grown customer relationships for some of the world's largest and most brand-focused corporations in the financial services, media, telecommunications, transportation, and retail industries. The company and four of its affiliates filed for Chapter 11 protection on Jan. 23, 2008 (Bankr. S.D.N.Y. Lead Case No. 08- 10239). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP, represents the Debtors in their restructuring efforts. The Debtors chose Stephen Dube, at CXO LLC, as their restructuring and turnaround advisor. Additionally, Evercore Group LLC provides investment and financial counsel to the Debtors. The Debtors' consolidated financial condition as of Dec. 31, 2007 showed total assets of $354,000,000 and total debts of $261,000,000. The Debtors submitted to the Court a Chapter 11 Plan of Reorganization on Feb. 12, 2008. The Court confirmed that Plan mid-June 2008. (PRC LLC Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROTECTION ONE: June 30 Balance Sheet Upside-Down by $51.8 Million ------------------------------------------------------------------ Protection One Inc.'s consolidated balance sheet at June 30, 2008, showed $653.8 million in total assets and $705.7 million in total liabilities, resulting in a roughly $51.8 million stockholders' deficit. The company reported a net loss of $9.1 million for the second quarter ended June 30, 2008, compared with a net loss of $8.1 million in 2007. Adjusted EBITDA declined to $27.2 million from $29.5 million. This decrease was in part due to the company's significant planned investments in new marketing initiatives and higher service and legal expenses, offset by $2.3 million of G&A efficiencies. Consolidated second quarter revenue declined less than 1% to $92.4 million, from $93.1 million in 2007. Richard Ginsburg, Protection One's president and chief executive officer, commented, "In a period of economic uncertainty, I am pleased to report that our Retail segment lowered attrition while increasing RMR additions from a combination of new sales and price increases. In addition, our Wholesale segment generated exceptional growth in additions from its key dealer customers. With the assimilation of IASG largely complete, we continue to work on process changes to improve profitability of our monitoring and service operations across all segments." Retail Segment Total Retail segment revenue in the second quarter of 2008 decreased 1.2% to $72.9 million, driven by a decrease in monitoring and service revenue due to high attrition over the last 12 months on the acquired Integrated Alarm Services Group Inc. (IASG) base. Attrition on the IASG base has improved since peaking in the fourth quarter of 2007. The Retail segment's operating income declined by $200,000 to $1.8 million. Wholesale Segment Wholesale monitoring and service revenue in the second quarter of 2008 increased 5.2% to $11.7 million. Wholesale reported an operating loss of $249,000 compared to income of $783,000 in the second quarter of 2007 due to higher selling expenses and increased staffing costs to enhance service levels and to assist in upgrading its monitoring platform, the initial milestone of which was completed at the beginning of July. Multifamily Segment Total Multifamily revenue decreased 6.9% to $7.6 million in the second quarter of 2008 compared to 2007, and monitoring and related services revenue declined by 4.8%. Principally as a result of lower revenues and increased selling costs, Multifamily operating income declined to $1.2 million in the second quarter of 2008 from $1.6 million one year earlier. Net Debt The company's net debt decreased slightly to $484.1 million at June 30, 2008, from $485.0 million at Dec. 31, 2007, as free cash flow was mostly offset by fees and expenses associated with the first quarter refinancing. At current LIBOR, the company's annualized cash interest expense is approximately $48.0 million. 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?30ee About Protection One Headquartered in Lawrence, Kan., Protection One Inc. (Nasdaq: PONE) -- http://www.ProtectionOne.com/-- is a vertically integrated national provider of sales, installation, monitoring, and maintenance of electronic security systems to homes and businesses. Network Multifamily, Protection One's wholly owned subsidiary, is the largest security provider to the multifamily housing market. The company also owns the nation's largest provider of wholesale monitoring services, the combined operations of CMS and Criticom International. QUEBECOR WORLD: Long-Term Partnership With PARADE Extended ---------------------------------------------------------- Quebecor World Inc. has renewed and extended its long-term partnership with PARADE Publications, to print 100% of PARADE Magazine in the U.S. PARADE, a division of Advance Magazine Publishers, Inc. "We are very pleased to be able to extend this important and valued partnership with PARADE. The relationship between PARADE and Quebecor World spans 35 years and we are proud to continue to produce PARADE Magazine," said Jacques Mallette, President and CEO Quebecor World. "Quebecor World's commitment to customer service and quality were the key factors in our decision to renew with Quebecor World. In addition to consistent performance, Quebecor World provided us with capabilities unmatched in the marketplace," said John Beni, Vice Chairman PARADE Magazine. "Our coast-to-coast manufacturing platform creates significant value for national customers such as PARADE. Every week we are able to provide PARADE and its readers with a top-quality product that is produced closer to their readers thereby reducing cycle time and delivery costs. Our national platform and our commitment to customer service are what makes us the leader in the production of Sunday Magazines and retail inserts," said Brian Freschi, President Marketing Solutions Group. 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 Sept. 30, 2008. REDDY ICE: Poor Credit Cues Moody's to Junk $151MM Notes' Rating ---------------------------------------------------------------- Moody's Investors Service downgraded the Corporate Family Rating and Probability of Default Rating of Reddy Ice Holdings, Inc. to B2 from B1 and assigned an SGL-3 speculative grade liquidity rating. Moody's concurrently lowered the ratings on the $300 million senior secured credit facility and senior discount notes by one notch. The rating outlook is negative. Moody's took these rating actions: -- Downgraded Corporate Family Rating, to B2 from B1 -- Downgraded Probability of Default Rating, to B2 from B1 -- Downgraded $60MM, Sr. Secured Revolver due 2010, to B1 (LGD 3, 32%) from Ba3 (LGD 3, 33%) -- Downgraded $240MM, Sr. Secured Term Loan due 2012, to B1 (LGD 3, 32%) from Ba3 (LGD 3, 33%) -- Downgraded $151MM, 10.5% Sr. Disc. Notes due 2012, to Caa1 (LGD 5, 87%) from B3 (LGD 5, 87%) Assigned Speculative Grade Liquidity Rating, SGL-3 The downgrade reflects declining profitability, weakening credit metrics and concern that a weak economy and emerging competitive threats from ice vending machines could pressure sales volume. During the first half of 2008, profitability declined because of rising fuel costs and lower than expected consumer demand for the company's packaged ice products. The negative outlook incorporates the significant risks to the company from the ongoing antitrust investigation and related litigation, although the nature, timing and severity of any potential sanctions are unclear at this time. The company has incurred significant fees and expenses related to the antitrust investigation and related litigation and such costs could continue as the investigations progress. A large fine or judgment against the company could result in impaired liquidity absent new financing arrangements. The B2 Corporate Family Rating is supported by the company's leading market position in the packaged ice industry and a favorable geographic footprint and superior scale that affords it material barriers to entry. The SGL-3 rating reflects an adequate liquidity profile over the next four quarters. The liquidity rating is supported by $28.8 million of restricted and unrestricted cash balances and $36.9 million of availability under a $60 million revolver at June 30, 2008. Excluding any potential fines or judgments against the company from the antitrust investigations and related litigation, Moody's expects that free cash flow after capital expenditures, quarterly dividends and investigation costs will be negative over the next four quarters. Reddy Holdings, through its wholly-owned subsidiary, Reddy Ice Corporation, manufactures and distributes packaged ice products. Reddy Ice is the largest manufacturer of packaged ice products in the United States and serves approximately 82,000 customer locations in 31 states and the District of Columbia. Typical end markets include supermarkets, mass merchants, and convenience stores. Revenues for the twelve month period ending June 30, 2008 were about $336 million. REDDY ICE: S&P Holds 'B+' Ratings; Outlook Revised to Negative -------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Dallas, Texas-based Reddy Ice Holdings Inc. and its wholly owned operating subsidiary, Reddy Ice Corp. (Reddy Ice) to negative from stable. At the same time, S&P affirmed all of its ratings on the company, including the 'B+' corporate credit rating. As of June 30, 2008, Reddy Ice had about $438 million in adjusted debt. The outlook revision reflects Reddy Ice's weaker-than-expected operating performance because of lower sales volumes and higher input costs, resulting in overall weakened credit protection measures and concerns that credit measures could weaken further. The ratings on Reddy Ice reflect the company's narrow product focus, its participation in the highly fragmented and competitive packaged ice industry, seasonal demand for its products, and an aggressive financial policy. For analytical purposes, Standard & Poor's views both companies as one economic entity. "In March 2008, the Antitrust Division of the U.S. Department of Justice (DOJ) started an investigation into possible antitrust violations in the packaged ice industry, which resulted in search warrants and subpoenas for the company and its employees. Since then, the state of Florida has coordinated additional multistate investigations, but they are believed to be related to the ongoing DOJ investigation, as well as a number of lawsuits filed. At this point, the company cannot estimate how the investigations and lawsuits could affect the company's financial condition. Still, we expect the company to continue to incur additional legal costs over the near term," S&P relates. "The outlook on Reddy Ice Holdings is negative. We are concerned about the company's ability to improve credit measures, amid the weak economy and rising input costs," S&P says. "We could lower the ratings in the near term if the company's operating performance weakens further and/or if the financial policy becomes more aggressive," said Standard & Poor's credit analyst Bea Chiem. "Alternatively, we would consider an outlook revision to stable if the company can reduce leverage to under 5x and maintain adequate liquidity," she continued. ROBERT LESLIE: Case Summary & Three Largest Unsecured Creditors --------------------------------------------------------------- Debtors: Robert Leslie Marilyn Leslie 3739 Wheeler Canyon Road Santa Paula, CA 93060 Bankruptcy Case No.: 08-11949 Chapter 11 Petition Date: August 13, 2008 Court: Central District Of California (Santa Barbara) Judge: Robin Riblet Debtors' Counsel: Andrew A. Goodman, Esq. Law Offices of Andrew Goodman 200 N Westlake Boulevard, Suite 202 Westlake Village, CA 91362 Tel: (805) 379-2010 Fax: (805) 379-2020 Email: agoodman@andyglaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million Debtors' list of its Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Eric Kelly Services provided $2,400 4137 Wheeler Canyon Road for farm at Wheeler Santa Paula, CA 93060 Canyon Ranch Bank of America Visa Credit Card $1,000 P.O. Box 15714 Wilmington, DE 19886 Your Poolman Pool Maintenance $150 910 Mckevett Road Santa Paula, CA 93060 SABINES PASS: Moody's Holds Senior Secured Notes' Rating at B2 -------------------------------------------------------------- Moody's Investors Service affirmed Sabine Pass LNG, LP's B2 rating for its senior secured notes due 2013 and 2016 and changed the outlook to stable from negative. "The stable outlook reflects the recently completed convertible loan financing at an affiliate of Cheniere Energy, Inc., Sabine's parent, that should provide Cheniere sufficient liquidity for the next three years", said Clifford Kim, Analyst at Moody's. He added, "Cheniere's liquidity profile could again face significant pressure starting in the third quarter of 2011 if Cheniere's business prospects do not substantially improve over the next eighteen months." In the near term, Moody's expects Cheniere's liquidity profile to improve significantly since the proceeds of the convertible note financing will be used to repay the $95 million term loan maturing in November 2009, establish a reserve account for Cheniere Marketing's TUA obligations, and to maintain cash on hand. The financing averts a potential liquidity shortfall at Cheniere in early 2009 that could have ultimately resulted in a potential bankruptcy of Sabine. Moody's notes that the convertible loan financing contains put options exercisable starting in the third quarter of 2011, which could create liquidity problems for Cheniere at that time. Cheniere had unrestricted cash totaling approximately $162 million at June 30, 2008 and $297 million at Dec. 31, 2007. In Moody's view, the market for LNG imports into the US remains very weak and the growth in domestic natural gas production could limit the potential for LNG imports over the next several years. However, Moody's also recognizes that global LNG supply is expected to grow in 2009 and 2010 as several delayed LNG liquefaction plants come online. Moody's will continue to monitor these developments and their implications for Cheniere and the Project. The rating action also incorporates Cheniere's statement in its recently filed 10Q that lists additional financing at Sabine as a potential source of cash to fund remaining construction, commissioning and operating costs at the Project. As of June 30, 2008, Sabine completed the construction of the initial 2.6 Bcf/d of send out capacity and 10.1 Bcf of storage capacity subject to the completion of routine punch list items while the remaining 1.4 Bcf/d was approximately 79% complete. Sabine's rating could be positively affected by a substantial increase in Cheniere's credit quality such that Cheniere's marketing affiliate can comfortably make payments on a sustained basis to Sabine under its terminal use agreement without relying on distributions from the Project. Factors that could place negative rating pressure on Sabine include a lack of meaningful improvement in the US LNG regasification market over the next eighteen months or if Cheniere utilizes its liquidity faster than expected. Additionally, Sabine's rating could be downgraded if the Project requires additional financing beyond those allowed in the existing bond indenture or if the Project is unable to raise any funds needed for operations or construction. Sabine Pass LNG L.P. was formed in 2004 to construct, own and operate a liquefied natural gas receiving terminal with an aggregate regasification capacity of 4 Bcf/d. Sabine has signed three 20-year Terminal Use Agreements for 100% of its regasification capacity on a "take or pay" basis. Sabine is 90.6%, indirectly-owned by Cheniere Energy, Inc. SAGECREST FINANCE: Files for Bankruptcy to Stave Off Foreclosure ---------------------------------------------------------------- SageCrest Finance LLC filed its chapter 11 petition on Aug. 17, 2008, with the U.S. Bankruptcy Court, District of Connecticut (Bridgeport), case number 08-50755. The Debtor listed assets of up to $100 million and debts of less than $10 million owed to less than 49 creditors. The Debtor's counsel said that SageCrest sought bankruptcy protection in order to avoid a foreclosure sale initiated by Deutsche Bank AG, which is owed $7 million, William Rochelle of Bloomberg News says. Mr. Rochelle reports that no other documents were filed with the Court as of August 18, besides the Debtor's three-page petition and filing authorization. Greenwich, Connecticut-based SageCrest Finance LLC is a hedge fund managed by Windmill Management LLC that is operated by Alan and Philip Milton. Windmill has a pending case filed by its investor, Wood Creek Capital Management, with the Superior Court in Stamford, Connecticut. Wood Creek alleged that Windmill failed to repay its invested fund. SAGECREST FINANCIAL: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: SageCrest Financial, LLC Three Pickwick Plaza, Suite 400 Greenwich, CT 06830 Bankruptcy Case No.: 08-50755 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- SageCrest II, LLC 08-50754 Type of Business: The Debtors provide short-term financing. Chapter 11 Petition Date: August 17, 2008 Court: District of Connecticut (Bridgeport) Debtor's Counsel: James Berman, Esq. (jberman@zeislaw.com) Zeisler and Zeisler P.C. 558 Clinton Avenue P.O. Box 3186 Bridgeport, CT 06605 Tel: (203) 368-4234 http://zeislaw.com/ Estimated Assets: $100 million to $500 million Estimated Debts: $1 million to $10 million The Debtors did not file a list of 20 largest unsecured creditors. SAVE OUR SPRINGS: Presses for Delay of Chapter 11 Case Dismissal ---------------------------------------------------------------- Save Our Springs Alliance Inc. requested the U.S. Bankruptcy Court, Western District Texas (Austin) to postpone the dismissal of its chapter 11 case that was directed by Judge Craig Gargotta on Aug. 8, 2008, William Rochelle of Bloomberg News relates. Judge Gargotta ruled that the Debtor was a small business and failed to comply with the deadlines relating to the completion of its reorganization, Mr. Rochelle says. Mr. Rochelle notes that Sweetwater Austin Properties LLC sought the dismissal of the Debtor's case. The Debtor had attempted to stop Sweetwater's project near Barton Creek, Texas but lost in a legal dispute. A state court directed the Debtor to pay Sweetwater $295,000 to cover attorneys' fees. According to Sweetwater, the Debtor allegedly used certain settlement funds improperly and had them transferred to other environmental groups to minimize payment to creditors, the Troubled Company Reporter said on April 18, 2008. While the Court found out that the Debtor did not act out in bad faith, the Court also ruled that the Debtor did not effectively show that it was able to raise this money for the creditors' recovery. As reported by the TCR on April 23, 2008, the SOS Alliance said it remains confident that it will have a plan confirmed in the months ahead. SOS Alliance experienced a setback after Judge Gargotta denied confirmation of SOS Alliance's first amended chapter 11 plan of reorganization. The Court related that three creditor parties expressed opposition to the Debtor's plan during successive confirmation hearings in November 2007: Mak Foster Ranch, L.P., Cypress-Hays, L.P., and Sweetwater Austin Properties, LLC. Plan Overview The Debtor is allegedly notorious for lobbying against development in the Hill Country watershed in Texas in order to protect various aquifers and its surrounding tributaries. Since the Debtor relies on donors to fund ongoing operations, its plan is not premised on paying creditors from ongoing operations or from future general donations, but rather from a designated Creditor Settlement Fund of $60,000. The fund is specially created for the pro rata payment of unsecured creditors' claims, including Sweetwater's. The classification scheme and the amount of proposed payments to Sweetwater under the plan are the focal points of the dispute between it and the Debtor. About SOS Save Our Springs Alliance -- http://www.sosalliance.org/-- is a non-profit organization whose aim is to protect the Edwards Aquifer in Texas, its springs and contributing streams, and the natural and cultural heritage of its Hill Country watersheds, with special emphasis on the Barton Springs Edwards Aquifer. The Alliance filed for chapter 11 bankruptcy on April 10, 2007 (Bankr. W.D. Texas Case No. 07-10642). Weldon Ponder, Esq., represents the Debtor in its restructuring efforts. SOS Alliance filed for bankruptcy after the Texas Supreme Court upheld the Court of Appeals ruling and declined to review the case Save Our Springs Alliance v. Lazy Nine Municipal Utility District. In addition, SOS Alliance was directed to pay $500,000 in attorneys' fees. SEMCANADA ENERGY: Pays C$1.8MM for B.C. Natural Gas Customers ------------------------------------------------------------- Energy Savings Income Fund, the Toronto-based retailer of fixed price natural gas and electricity contracts, acquired substantially all of the commercial and residential customer contracts of CEG Energy Options Inc. in British Columbia. CEG is a Western Canadian marketer of natural gas wholly owned by SemCanada Energy Company, both of which filed for creditor protection under the CCAA on July 30, 2008. The acquisition is was expected to close August 14, 2008 and remains subject to court approval under the CCAA proceedings. Current annual gas volumes from the customers are 4.8 million GJs annually (16.9 million GJs total over the remaining term of the contracts). The average remaining life of the contracts is approximately 36 months. As the supply previously associated with the customers was jeopardized upon the CCAA filings, many of these customers would have lost favorable contracts had Energy Savings not agreed to this purchase. Upon completion of their existing term, Energy Savings will seek to renew these customers on standard Energy Savings contracts. As regards the purchase, CEO Ken Hartwick noted: "In both our Annual Report and our recent first quarter results, we mentioned that there would be the opportunity for accretive acquisitions during the coming year. The recent difficulties experienced by SemCanada and CEG have provided us with one of these opportunities." "This purchase fits with our strategy in two ways. First, in addition to residential customers, the CEG customers fit the profile of the stable but targeted larger commercial customers we have accumulated across all of our other markets. Second, we immediately enhance our strategic position in the B.C. commercial and residential markets where we are already currently active. This transaction, while not large, is immediately accretive to our unitholders." Chair Rebecca MacDonald added: "I am pleased that we are able to offer continuity of fixed price supply to these customers. The CCAA filings by SemCanada and CEG left many of them in a position where advantageously priced contracts would have been cancelled unless taken up by another supplier. We have agreed to honor the obligation to supply these contracts and we hope that this will aid us in renewing these customers at the end of their term. This transaction underscores the importance of committing to long term supply with proven, creditworthy suppliers like Energy Savings." The Fund Energy Savings' natural gas business, which is conducted in Ontario, Manitoba, Alberta, Quebec, British Columbia, Illinois, Indiana and New York, involves the sale of gas to residential, commercial and small industrial customers under long term, irrevocable fixed price contracts. Energy Savings also supplies electricity to Ontario, Alberta, New York and Texas customers. By fixing the price of natural gas or electricity under its fixed price contracts for a period of up to five years, Energy Savings' customers offset their exposure to changes in the price of these essential commodities. Energy Savings, which commenced business in 1997, derives its margin or gross profit from the difference between the fixed price at which it is able to sell the commodities to its customers and the fixed price at which it purchases the matching volumes from its suppliers. Non GAAP Measures Management believes the best basis for analyzing both the Fund's operating results and the amount available for distribution is to focus on amounts actually received ("seasonally adjusted"). Seasonally adjusted analysis applies solely to the Canadian gas market (excluding Alberta and B.C.). Energy Savings receives payment from the LDCs upon delivery of the commodity not when the customer actually consumes the gas. Seasonally adjusted analysis eliminates seasonal commodity consumption variances and recognizes amount available for distribution based on cash received from the LDCs. SEMGROUP LP: Section 341(a) Meeting Scheduled for September 9 ------------------------------------------------------------- Roberta A. DeAngelis, Acting United States Trustee for Region 3, will convene a meeting of creditors of SemGroup, L.P., and its 24 debtor affiliates on Sept. 9, 2008, at 1:00 p.m., at Room 5209, J. Caleb Boggs Federal Building, Fifth Floor, in Wilmington, Delaware. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in the Debtor's bankruptcy cases. Attendance by the Debtor's creditors at the meeting is welcome, but not required. The Sec. 341(a) meeting offers the creditors a one-time opportunity to examine the Debtor's representative under oath about the Debtor's financial affairs and operations that would be of interest to the general body of 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. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s 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. (SemGoup Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: U.S. Trustee Wants Chapter 11 Examiner Appointed ------------------------------------------------------------- Roberta A. DeAngelis, Acting U.S. Trustee for Region 3, asked the U.S. Bankruptcy Court for the District of Delaware to direct the appointment of a chapter 11 examiner to investigate the trading practices and the prepetition transactions of SemGroup LP and its debtor affiliates. "The dearth of information available regarding the Debtors' trading activities has caused significant unrest and concern among their customers, suppliers, lenders and investors," the U.S. Trustee told Judge Brendan L. Shannon. The U.S. Trustee noted that the Debtors have not addressed the allegations of fraudulent transactions in the two weeks since the Petition Date. The U.S. Trustee related that the Debtors' Chapter 11 filings were caused, in large part, by a severe liquidity crisis occasioned by massive margin calls related to large New York Mercantile Exchange and Over-the-Counter futures and options positions they held before the Petition Date. The Debtors sold their NYMEX trading account to Barclays approximately one week before the Petition Date. Parties-in-interest raised fraud and impropriety allegations against the Debtors with respect to their prepetition trading strategy, the transfer of their trading account to Barclays, and the propriety of the use of a trading firm owned by the Debtors' former chief executive officer in the trades. General Electric Capital Corporation alleged that the Debtors used $50,000,000 of the $120,000,000 loan to fund the transfer of the NYMEX trading account to Barclays. GECC said the loan was for the construction of a 580-mile pipeline. The Debtors' financial advisor acknowledged GECC's allegations; however, despite the acknowledgment, the $50,000,000 was not included in the cash budget submitted in connection with the DIP Financing and Cash Collateral Motions, the U.S. Trustee noted. The Debtors' non-debtor publicly trading affiliate, SemGroup Energy Partners, L.P., was also named in several lawsuits charging the company and its officers and directors of violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The lawsuits also alleged that Energy Partners engaged in a series of insider transactions -- which grossed more than $700,000,000 -- for the sole purpose of providing cash to cover margin calls related to the Debtors' trading strategy. The U.S. Trustee pointed out that: (a) In July 2007, SemGroup Holdings raised $275,000,000 through the public offering for the sale of 12,500,000 common stocks of Energy Partners. Prior to the public offering, SemGroup contributed its crude business to Energy Partners. In exchange, SemGroup Holdings was issued 12,570,504 subordinated units and 549,908 general partners units of Energy Partners and at least $137,000,000 in cash. (b) In January 2008, Energy Partners acquired the Debtors' asphalt assets for $378,800,000. (c) In May 2008, Energy Partners purchased SemCrude LP's interest in SemGroup Crude Storage, LLC, for $90,000,000. (d) In June 2008, hedge funds Manchester Securities Corp. and Alerian Finance Partners, LP, extended $150,000,000 to the Debtors. Under the loan agreement with Manchester and Alerian, the hedge funds would get the Debtors' interest in Energy Partners once the Debtors default on the debt. The Debtors' bankruptcy filing triggered an event of default under the loan; subsequently, the hedge funds took control over Energy Partners. The U.S. Trustee told Judge Shannon that it is in the best interests of creditors, equity holders, and other interested parties to have an examiner appointed given the allegations that the Debtors' liquidity problems were improperly hidden from their lenders and investors. The Debtors' bankruptcy filings, according to the U.S. Trustee, have had a significant effect on the energy futures market and the sale of crude oil domestically. The U.S. Trustee said appointment of an examiner to investigate the issues will shed light and produce a report that informs the Court and the public whether culpable conduct occurred. In seeking for the appointment of an examiner, the U.S. Trustee invoked Section 1104(c)(1) of the Bankruptcy Code, which provides that the court can direct the appointment of an examiner, at any time before the confirmation of a plan of reorganization, to investigate on any allegations of fraud or misconduct in the management of the affairs of the debtor of or by current or former management of the debtor, if (1) the appointment is in the interests of creditors, any equity security holders, and other interests of the estate; or (2) the debtor's fixed, liquidated, unsecured debts, other than debts for goods, services, or taxes, or owing to an insider, exceed $5,000,000. The U.S. Trustee said there is no dispute that the Unsecured Notes of the Debtors exceed $5,000,000. In November 2005, two of the Debtors, SemGroup LP and SemGroup Finance Corp. issued approximately $600,000,000 of unsecured notes that mature in 2015. SemGroup spokesman Lance Ignon told News OK.com that the company will assist any federal authority assigned to examine its activities. "If indeed an examiner is appointed, we would be happy to cooperate fully with any subsequent probe," he said. As previously reported, the Securities and Exchange Commission is also conducting an investigation regarding the allegations that Energy Partners did not properly disclose its parent's liquidity troubles to investors in mid-July. Several shareholders have filed lawsuits against Energy Partners and its officers and directors, most of which are also officers and directors of the Debtors, alleging that the non-disclosure of the parent's liquidity issues misled the investors into buying Energy Partners' securities. Energy Partners has also received Grand Jury subpoenas from the U.S. Attorney's Office in Oklahoma City, Oklahoma, directing the company to produce financial and other records. According to Bloomberg News, SemGroup's downfall is the biggest energy-trading collapse since hedge-fund manager Amaranth Advisors LLC of Greenwich, Connecticut folded under $6,600,000,000 of wrong-way natural-gas bets in 2006. 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. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s 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. (SemGoup Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: Bankruptcy Cues Unit to Delay Quarterly Filing ----------------------------------------------------------- SemGroup Energy Partners, L.P., U.S. told the the Securities and Exchange Commission that it is unable to timely file its Form 10-Q for the period ended June 30, 2008, due to its ongoing evaluation of the effect of SemGroup LP's bankruptcy filing to the company's financial statements. As a result of the parent's bankruptcy, events of default exist in Energy Partners' credit agreements. Alex Stallings, Energy Partners' chief accounting officer, said the company is in dialogs with its lenders regarding the events of default under the Credit Agreement, but no assurance can be given as to the outcome of these discussions. The existing events of default under the credit agreement, as well as the parent's bankruptcy, raise substantial doubt about Energy Partner's ability to continue as a going concern, Mr. Stallings said. Energy Partners, according to the SEC filing, derived about 82% of its revenues from the services it provided to its parent and the parent's subsidiaries. Energy Partners, according to the SEC filing, expects increased revenues and costs during the quarter ended June 30, 2008, as compared to the quarter ended June 30, 2007, because of the company's acquisition of properties, machinery, pipelines and facilities during the quarter. According to Mr. Stallings, Energy Partners is currently pursuing various strategic alternatives for its business and assets including the possibility of entering into storage contracts with third party customers and the sale of all or a portion of its assets. However, he said, the uncertainty relating to the parent's bankruptcy may make it more difficult to pursue merger opportunities or enter into storage contracts with third party customers. "Finding new customers to replacing its parent will be more difficult than investors once believed," Mark L. Reichman, an analyst with Sanders Morris Harris Group, Inc., told Bloomberg News in an interview relating to SemGroup. "[Bankruptcy] highlights the fact that [SemGroup and its affiliates] may be encountering some difficulty growing their third-party customer base, he added. Energy Partners, according to the SEC filing, said it did not make a distribution to its unitholders for the quarter ended June 30, 2008, due to the existing events of default under its credit agreement and the uncertainty of its future cash flows relating to the parent's bankruptcy. 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. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s 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. (SemGoup Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEMGROUP LP: More Parties Oppose $250,000,000 DIP Financing ----------------------------------------------------------- The Official Committee of Unsecured Creditors; SemGroup LP's non- debtor affiliate, SemGroup Energy Partners, L.P.; more than 20 suppliers of oil to the Debtors; and several taxing authorities filed objections to the SemGroup entities' request to obtain DIP financing and use of cash collateral. Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the District of Delaware previously granted interim authority for the Debtors to obtain $150,000,000 from the proposed $250,000,000 of DIP Loans from Bank of America. (1) Creditors' Committee The Creditors' Committee complainsed that it has not been given the opportunity to review the DIP Budget, and seeks assurance that the additional $100,000,000 of DIP Loans is provided to benefit all constituencies, not just the prepetition lenders. The Committee said it is uncertain what the additional $100,000,000 of DIP Loans will be used for. Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, in New York, related that, during the Aug. 6, 2008, hearing on the DIP Motion, the Debtors have indicated that the primary intended use of the additional funds beyond a letter of credit facility of $150,000,000 was to pay critical vendors. However, Mr. Kirpalani noted that the Debtors have only used approximately $8,000,000 for critical vendor payments. The Committee also tells the Court that it needs to understand whether the Debtors can comfortably comply with the Agreed Budget within the confines of the variance negotiated, which was a point left unclear at the August 6 Hearing. Mr. Kirpalani said the Court should not approve an Agreed Budget that will be violated out of the gate, and should ensure it is reasonable and appropriate. Accordingly, the Committee reserves the right to raise concerns with respect to upsizing of the DIP financing unless it is convinced that the proposed final facility is being used to maximize value and provides sufficient flexibility for the Debtors and their estates. The Committee's professionals, Mr. Kirpalani said, should be consulted by those employed by the Debtors and the agent for the DIP Lenders as they formulate and refine the final budget, to ensure that the DIP financing will be used to maximize value for all stakeholders, and will not foreclose any restructuring alternatives. (2) SemGroup Energy SemGroup Energy complained that certain provisions in the Interim DIP Order and the DIP Agreement conflict with the concept that prepetition liens are not being primed. Jack L. Kinzie, Esq., at Baker Botts L.L.P., in Dallas, Texas, on behalf of SemGroup, pointed out that: (a) the DIP Agreement provides that 100% of all proceeds from any sale must be applied to the outstanding balance of the DIP Loan; (b) the Interim DIP Order provides that, once the DIP Loan is repaid, all proceeds from any sale must be paid to the Prepetition Lenders; and (c) the Interim DIP Order provides that all payments made to either the DIP Lenders or the Prepetition Lenders will be "free and clear of any claim, charge, assessment or other liability . . ." Mr. Kinzie said these provisions conflict with the DIP Lenders' position that prepetition liens are not being primed by either the Cash Collateral Motion or the DIP Financing Motion. Repeated assurance that prepetition liens are not being primed offers little comfort to prepetition lien holders if the DIP Lenders' true intent is to take 100% of all sale proceeds, without first accounting for valid prepetition liens, Mr. Kinzie argued. Instead of applying 100% of sale proceeds to the DIP Lenders on a free and clear basis, Energy Partners suggests that the DIP Lenders should be required to escrow those proceeds pending a determination by the Court of relative lien priorities. Alternatively, Energy Partners asserted that the DIP Lenders should be required to first pay all known prepetition lien holders before applying the balance of the proceeds to the DIP Lenders' accounts and also provide a carve out in the "free and clear" language to account for unknown prepetition lien holders. (3) Suppliers More than 20 independent oil producers who supplied, or currently supplies, oil to the Debtors object to the adequate protection provision for suppliers included in the Interim DIP Order. The suppliers complain that the adequate protection included in the Interim DIP Order does not provide the protection required by Sections 361 and 364(d)(1)(B) of the Bankruptcy Code. The Objecting Suppliers are: * Clipper Energy, LLC * ConocoPhillips Company * Titan Energy, Inc. * Quinque Operating Company * Huntington Energy, L.L.C. * Commonwealth Edison Company * Wadi Exploration and Production, LLC * Alon USA, LP * Benson Mineral Group, Inc. * Prima Exploration, Inc. * Rosewood Resources, Inc. * New Dominion * TGT Petroleum Corporation * Mercuria Energy Canada, Inc. * JMA Energy Company, L.L.C. and LCS Production Co. * Copano Energy, L.L.C., DBGG, L.L.C., and River View Pipelines, L.L.C. * Samson Resources Company, Samson Lone Star LLC, and Samson Contour Energy E&P LLC * South Burbank Petroleum Corporation and Abraxas Petroleum Corporation * Altex Energy Corp., Blue Dolphin Production, LLC, and Lobar Oil Co., Inc. * Star Production, Inc., Southlake Exploration, Inc., Spalding Energy, Inc., BL Oil Company, Inc., Bell Energy, Tracker Mineral LLC, Holley Operating LLC, Sojourner Enterprises, Inc., Valley Operating, and P,B&B Operating, Inc. * Murfin Drilling Company, Inc., Vess Oil Corporation, LD Drilling, Inc., Davis Petroleum, Inc., RAMA Operating Co., Inc., Central Crude Corporation, Redwing Gas Systems, Inc. * Williams NGL Marketing, LLC; Williams Energy Canada, Inc.; Mid-Con Frac & Storage; Williams Field Services and Williams Production RMT Company * Veenker Resources, Inc., Statewide Crude, Inc., U.S. Oil & Gas Acquisition and Development L.P. I & II, MM Resources, Inc., Taylor Gas Liquids, Inc., and DCP NGL Services, L.P. * Triad Energy, Inc.; Q.T. Oil Ltd. Co.; Black Gold Oil Co., Inc.; Producers Crude Marketing, Inc.; Wildhorse Operating Company; Conner Production Co., L.L.C.; Bill Weems Oil Co., Inc.; J.M.G. Vacuum Trucks, Inc.; Tommy Taylor, Bonnie Taylor, Karlos Quillin, Bill Laird, Anita Laird, Dan Wallace Inc.; JKJ Oil & Gas, LLC; TLC Oil, Inc.; Venis Exploration Company; and Native American Marketing, LLC The suppliers asserted that they hold prepetition liens on the Debtors' Cash Collateral. The suppliers also asserted that they are entitled rights to reclaim the goods they delivered to the Debtors 45 days before the Petition Date. ConocoPhillips, in particular, said it believes that the Court still needs to evaluate and consider what adequate protection needs to be provided to prepetition lienholders in the event of a sale of the Debtors' assets. Conoco added that there are budgetary issues that need to be addressed. Conoco complained that it has not taken hold of the DIP Budget for it to review and evaluate the propriety of how the Debtors propose to utilize the DIP Loans. (4) Taxing Authorities Potter County, Moore County Tax Office, Carson County Tax Office, Carson County Appraisal District, Hutchinson County Tax Office, Hutchinson County Appraisal District, Gray County Tax Office, Ochiltree County Appraisal District, Canadian Independent School District, and Hemphill County Tax Office; and Fort Bend County, Gregg County, Harris County, Northeast Texas Community College District, Red River County Appraisal District, Talco, Wood County, Dallas County, Tarrant County, Archer County, Wise County Appraisal District, Wise County, Camp County Appraisal District, Hopkins County, Smith County, and Upshur County complained that the DIP Financing proponents have failed to demonstrate that their liens are adequately protected. The Taxing Authorities asserted that they have liens on the Debtors' property to the extent the Debtors have not paid the taxes on their properties. The Taxing Authorities have also filed secured claims for unpaid ad valorem property taxes. The Taxing Authorities suggested that a segregated account must be established from the sale of any of their collateral to comply with the requirements of Section 363(c)(4). (5) RZB Finance RZB Finance LLC, one of the lenders who extended to the Debtors certain prepetition loans, maintained that the Debtors have not demonstrated, and cannot demonstrate, adequate protection of its interest in the Collateral. RZB, thus, reserves its rights with respect to the DIP Motion. Judge Shannon convened a status conference with respect to scheduling on Aug. 18, 2008. The hearing to consider final approval of the request is adjourned to Sept. 10, 2008, SemGroup L.P.'s spokesperson, Lance Ignon, told The Journal Record. 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. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc. The CCAA stay expires on Aug. 20, 2008. SemGroup L.P.'s 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. (SemGoup Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SPECIALIZED TRAINING: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Specialized Training Facilities, LLC 1625 Hardeman Lane Cleveland, TN 37312 Bankruptcy Case No.: 08-14150 Chapter 11 Petition Date: August 18, 2008 Court: Eastern District of Tennessee (Chattanooga) Judge: John C. Cook Debtor's Counsel: Harry R. Cash, Esq. (hcash@gkhpc.com) Grant, Konvalinka and Harrison Republic Centre, Suite 900 633 Chestnut Street Chattanooga, TN 37450 Tel: (423) 756-8400 Fax: (423) 756-0643 Estimated Assets: Less than $50,000 Estimated Debts: $1 million to $10 million The Debtor does not have any creditors who are not insiders. STRONGCO INCOME: Gets Waiver for Covenant Violation, Amends Deal ---------------------------------------------------------------- Strongco Income Fund received on Aug. 11, 2008, a waiver of its requirement to comply with the debt to tangible net worth covenant as at June 30, 2008, subject to providing additional information no later than Aug. 30, 2008, in a form acceptable to the lender, and also entered into an amended credit facility agreement. As at June 30, 2008, the Fund did not meet its debt to tangible net worth covenant relating to its operating line of credit. As at June 30, 2008, the Fund had a debt to tangible net worth ratio of 3.33:1. Under the conditions of the amended credit facility, the Fund's lender has raised the Fund's borrowing rates by 0.25%, cancelled the Fund's $12 million term facility for real estate acquisition and construction, and restricted its operating line of credit to $20 million until such time as the Fund returns to full compliance with the covenants contained in the amended credit facility. Also under the amended credit facility, the debt to tangible net worth covenant was amended from 3.0:1 to 3.25:1, reducing to 3.0:1 for Sept. 30, 2008, and the lender's prior written consent is required for the Fund to declare or pay distributions on any class or kind of its units, repurchase or redeem any of its units or reduce its capital in any way whatsoever or repay any unitholders' advance. The Fund also disclosed that as at March 31, 2008, the Fund did not meet its consolidated debt service coverage and debt to tangible net worth covenants relating to the operating line of credit. On April 29, 2008, the Fund has received a waiver of its requirement to comply, as at March 31, 2008, with the consolidated debt service coverage ratio covenant under its operating line of credit. As at March 31, 2008, the Fund's consolidated debt service coverage ratio was 0.73:1, while the operating line of credit required a ratio of no less than 0.90:1. In connection with the foregoing, the Fund was required to and has provided additional information to its lender. In addition, the Fund obtained an amendment modifying its debt to tangible net worth ratio under its operating line of credit. The debt to tangible net worth covenant was amended from 3.0:1 to 3.25:1, reducing to 3.0:1 on July 1, 2008. As at March 31, 2008, the Fund had a debt to tangible net worth ratio of 3.16:1. As a result of non-compliance with the operating facility covenant requirements, through cross-default provisions, the Fund defaulted on certain equipment notes payable from two creditors in the amount of $106,285 and $109,648 as at June 30, 2008, and March 31, 2008. On Aug. 11, 2008, the Fund also received letters from each of the two creditors acknowledging the bank letters in respect of the first and second quarters, and as a result the two creditors waived the first and second quarter defaults. The Fund reported a net income of $2.9 million, compared to $2.5 million net income in 2007. However, the 2007 figure was affected by a one-time future tax expense adjustment of $1.8 million due to changes in federal tax rules governing income trusts. The Fund generated distributable cash of $2.4 million, compared to $4.8 million in the 2007 period. Unitholders received cash distributions totalling $1.5 million during the second quarter. The Fund disclosed that it has suspended the monthly distributions, beginning with the month ended Aug. 31, 2008. About Strongco Income Fund Based in Ontario, Canada, Strongco Income Fund (TSE:SQP.UN) -- http://www.strongco.com/-- is a trust established to hold multi- line industrial equipment distribution providers in Canada. Over 700 employees provide retail service at 30 branches located from Nova Scotia to Alberta. Strongco sells, rents and services mobile industrial equipment to sectors that include construction, road building, mining, forestry, utilities and municipalities. Strongco represents several equipment manufacturers including Volvo, Case, Manitowoc, Cedarapids and more. SUNWEST MANAGEMENT: Files Chapter 11 Petition After Loan Default ---------------------------------------------------------------- Sunwest Management Inc. placed eight of its properties under chapter 11 bankruptcy protection on Aug. 17, 2008, William Rochelle writes for Bloomberg News. The petition was filed with the U.S. Bankruptcy Court, Middle District of Tennessee (Nashville), case number 08-07261. Mr. Rochelle says that Sunwest defaulted on a loan from General Electric Co. Based on court documents, the Debtor listed assets of less than $10 million and liabilities of more than $10 million, Mr. Rochelle reports. Salem, Oregon-based Sunwest Management Inc. -- http://www.sunwestmanagement.com/-- manages 275 assisted-living facilities in 36 states. Sunwest Management was founded in 1991 with a portfolio of three properties: two retirement communities and one skilled nursing community. It has a network of regional managers that handles various services from accounting to operations. STEVE & BARRY'S: WSJ Says Bay Harbour Leads Bidding --------------------------------------------------- According to The Wall Street Journal, Bay Harbour Management, LC is the leading candidate at the auction for the sale of substantially all the assets of Steve & Barry's, LLC, and its debtor-affiliates. WSJ said people involved in the case noted that Bay Harbour plans to keep open about 125 to 200 stores. The auction commenced Monday and continued into the night, reports Keiko Morris of newsday.com. Mr. Morris said it was not known whether other bids were submitted and what issues were still being resolved as the auction stretched into the evening. There's no word that Bay Harbour was the winning bidder, Mr. Morris added. As of the Petition Date, the Debtors had 276 stores. According to people familiar with the matter, the auction was expected to wrap up Tuesday, reports WSJ. Brilliant Move Steven B. Greenberg, president of the Greenberg Group, retail real estate advisers in Hewlett, said Bay Harbour's purchase of Steve & Barry's may be a "very brilliant" move if it manages the company well and capitalizes on its reputation as a value retailer, reports newsday.com. "If they can step back, retrench, downsize and consolidate, they may, in two years, have a very successful company," Mr. Greenberg said, according to the report. Mr. Greenberg believes that the chain should shed 30 to 50% percent of its locations, keeping the stores that receive higher foot traffic, and raise its profits by finding suppliers who can provide a lower-cost product and still meet the company's standards. More Objections Filed More parties have filed or supplemented their objections to the Debtors' request to sell all or substantially all of their assets: -- The Official Committee of Unsecured Creditors, -- Glimcher Properties Limited Partnership, -- Westfield, LLC, and certain affiliates, -- General Electric Capital Corporation, -- Lakeland Bank, Equipment Leasing Division, -- The City of New York and its agencies, -- Constellation NewEnergy, Inc., -- Bergman Brothers Contractors, Inc.; B&B Constructors, Inc. d/b/a The Bergman Companies; B&B Contractors, Inc. d/b/a The Bergman Companies, -- Coyote Temple Mall LP, -- General Growth Management, Inc.; Developers Diversified Realty Corporation; Aronov Realty Management; Federal Realty Investment Trust; The Hutensky Group; FPA Hillcrest Associates; and Seldin Company, -- Pathfinder Logistics International d/b/a Olympic Freight, -- The Collegiate Licensing Company, -- Colonial Plaza CRP LLC, -- FOM Pigeon Forge, LLC, -- Woolbright Daytona Promenade LLC, -- Lamar Manager, Inc., -- Rose Valley Lake, LLC, -- United Garment Manufacturers Company, -- The Macerich Company, Gem Realty Capital, Inc., Vintage Capital Group, -- CBL & Associates Management, Inc., -- Coyote Temple Mall LP, -- Steamtown Mall Partners, L.P.; Carousel Center Company, L.P; Pyramid Mall of Glens Falls NewCo, L.L.C.; EklecCo NewCo, LLC; Riverside Enterprises, L.L.C.; Salmon Run Shopping Center, L.L.C.; Pyramid Mall of Ithaca, L.L.C.; Pyramid Walden Company, L.P.; Lanesborough Enterprises NewCo, LLC; Pyramid Mall of Hadley NewCo, L.L.C.; Independence Center, LLC; Brazos Outlets Center, LLC; West Manchester Mall LLC; and Almeda Mall, L.P., and -- Cabot Investment Properties, LLC, DBR & Associates, LLC, Feldman Mall Properties, Inc., Gregory Greenfield & Associates, Ltd., Jones Lang LaSalle, Inc., Radiant Partners, LLC, The Woodmont Company, and Triple Five Nevada Development Corporation The Objecting Parties argue, among other things, that: (a) the Debtors should strictly comply with Section 365(d)(3) of the Bankruptcy Code and pay postpetition rent, if they would like to continue their occupancy at leased premises. (b) the proposed Store Closing or Going-Out-of-Business Sale violate the terms and conditions of certain leases. In view of Section 363(e) of the Bankruptcy Code, at a minimum, the GOB Sales should be subject to slightly more restrictive guidelines, in addition to the restrictions of the sale guidelines. (c) the Debtors should be compelled to reject the leases and return possession of the leased premises to the landlords upon conclusion of the Store Closing Sales. If the Debtors desire to market the leases, they should be required to market these during the term of the Store Closing Sales so the landlords are not burdened with "dark stores." (d) among other things, the Debtors' August 8, 2008 notices of assumption of unexpired leases contain insufficient information on the proposed buyer's affiliate, Bay Harbour Management L.C., and do not constitute adequate protection of future performance. (e) the Objecting Parties are entitled to attorneys' fees in connection with the Debtors' obligation to cure all monetary defaults under the leases. The Objecting Parties reserve the right to supplement the amounts of attorneys' fees due at the time the cure amounts are resolved. The Creditors Committee objects to the use of the sale proceeds to pay $5,000,000 to the Debtors' co-founders and co-chief executive officers, Steven Shore and Barry Prevor, on account of their purchase of a junior participation interest in a GE Revolver Agreement dated June 20, 2008. The Committee is investigating the $5,000,000 loan the retailer's founders provided the company weeks before it filed for bankruptcy, saying the transaction raises "serious questions," reports The Wall Street Journal. According to the Committee, the loan requires "careful examination" and is asking the Court to set aside the $5,000,000 while it wraps up its investigation by Nov. 18. Otherwise it may not be able to recover the money "should the committee prevail on any cause of action against the insiders." The Committee said "serious questions" exist about whether the "purported loan" should be characterized as an equity investment and not as debt. Such a change would make Shore and Prevor among the last to be paid in the case, the Committee noted. Several parties filed joinders to the objections filed. Shore and Prevor Respond In response to the Creditors Committee's objection, counsel for Messrs. Shore and Prevor, Alan Kolod, Esq., at Moses & Singer LLP, in New York, points out that the Committee has not commenced any proceeding against Messrs. Shore and Prevor and has not served them with process. The Creditors Committee cannot obtain a pre-judgment attachment of $5,000,000 of the repayment that will be made to GECC upon sale of its collateral, by filing an objection to the Debtors' Sale Motion, he asserts. The Creditors Committee's request not only fails to set forth any legal basis for the relief demanded, but it also fails to set forth any factual basis for a pre-judgment garnishment, Mr. Kolod argues. He adds that the Creditors Committee does not contend that the estates have any defenses or claims with respect to the GE Loan that would justify refusal to repay it in full. The Creditors Committee's objection must be overruled and, to the extent it seeks affirmative relief, that relief must be denied as being unfounded in law or fact, Mr. Kolod asserts. Debtors Address Objections The Debtors' counsel, Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York, notes that many of the objections raised are to the assumption and assignment of the Debtors' unexpired leases and executory contracts. He relates that the Debtors intend to work with the Objecting Parties to reach consensual resolutions with respect to these objections, including objections to proposed cure amounts. With respect to the other objections: (a) the Debtors submit that the Court has the inherent authority to approve the conduct of Store Closing Sales, notwithstanding the applicability of "Liquidation Sale Laws." (b) to the extent landlords wish to compel payment of other postpetition obligations, they must do so by filing a motion on notice to compel the Debtors to make payment. (c) the Debtors have provided information to contract counter-parties with respect to adequate assurance of future performance. The Debtors will provide additional information as and when available. (d) the Debtors submit that granting the Agent a security interest in the collateral defined in the Agency Agreement is necessary because otherwise the Debtors would not be able to obtain credit. (e) the Debtors submit that the Sale Guidelines adequately protect the landlords. However, the Debtors will endeavor to work with landlords to include appropriate additions to the Sale Guidelines that do not, in the Debtors' judgment, adversely affect their ability to maximize the value of their estates and assets in any liquidation or Store Closing Sale. 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. Diana G. Adams, United States Trustee for Region 2, has appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. 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. 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) SYNTAX-BRILLIAN: Insists that Sale of Assets is Best Alternative ---------------------------------------------------------------- Syntax-Brillian Corporation and its debtor-affiliates submitted to the U.S. Bankruptcy Court for the District of Delaware their response to various parties' objections to a motion to: (a) sell some of the Debtors' assets free and clear of liens, and (b) assume, assign or sell some executory contracts and unexpired leases. The Court is set to hear the matter today, Aug. 20, 2008, at 11:30 a.m. The Troubled Company Reporter said on July 9, 2008, that the Debtors entered into an asset purchase agreement to sell certain of their assets to Olevia International Group, LLC, which is under common ownership with TCV Group. Under the terms of the agreement, Olevia International will assume $60 million of the Debtors' secured debt obligations to Silver Point Finance LLC in exchange for the purchased assets. Silver Point committed to provide up to $23 million in debtor-in-possession financing to the Debtors under a certain DIP credit and guaranty agreement. The Debtors were allowed to access at least $7.5 million in financing, on an interim basis. A full-text copy of the asset purchase agreement is available for free at http://ResearchArchives.com/t/s?2f40 Debtors' Response to Sale Objections The Debtors related that the proposed sale is the only option available for them to avoid a quick liquidation. The Debtors maintained that the proposed sale can maximize the value of their assets and allow them to maintain a going-concern business. If the sale is not approved or substantially delayed, the Debtors said that the value of their assets will erode quickly and a liquidation will be inevitable. Lenders have provided the financing necessary for the Debtors' operations pending the sale closing. The Committee has only provided certain limited objections to the sale, the Debtors noted. All these parties seem to recognize that the proposed sale is the only alternative, the Debtors asserted. A. Tanner DeWitt Sale Objection The Debtors said that an objection filed by Tanner DeWitt to the proposed bidding procedures is without merit. Tanner DeWitt said that the proposed sale offend all basic principles of insolvency law. Tanner DeWitt added that the terms of Tanner DeWitt's engagement with Syntax-Brillian are governed by Hong Kong law and therefore the U.S. Bankruptcy Court is not entitled to alter Tanner DeWitt's rights, whether against Syntax-Brillian or against Olevia. According to the Debtors, Tanner DeWitt, a Hong Kong law firm, presented no factual or legal information to enable the Debtors or the Court to evaluate the substance of its claims. Tanner DeWitt failed to provide any legal basis supporting its statement that the Court does not have jurisdiction to alter its rights, the Debtors said. The Debtors said that this statement may be incorrect but, in any case, it is irrelevant. If Tanner DeWitt were correct that its rights cannot be affected under Hong Kong law, this would not affect the sale. B. Shareholder Sale Objections Amr Mahmoud requested that the Debtors' financials be carefully scrutinized by the Court before any sale is allowed to go through. Amr, a purported shareholder of Syntax-Brillian, further requested that the proposed sale be blocked and a criminal investigation opened into the Debtors' operations. Various shareholders also want the sale blocked. W. David Klemperer, a purported shareholder of Syntax-Brillian, urged the Court to grant existing shareholders equity in the reorganized debtor. The Debtors asserted that while the shareholder sale objections, with the exception of the Klemperer letter, generally request that the sale be blocked, no legal or factual basis is given for doing so. The objections merely presented speculation and unsubstantiated allegations with regard to the existence of certain claims. To the extent that these claims exist, they are not being released as part of the sale, the Debtors said. Shareholders simply won't benefit from stopping the sale, the Debtors added. C. Cerny Sale Objections Charles M. Cerny requested that the Court hear shareholder arguments regarding alternatives to the proposed sale. The Court permitted Mr. Cerny to address these issues at a hearing on July 30, 2008. Mr. Cerny made a variety of unsubstantiated factual allegations and inquiries, the Debtors said. Further, Mr. Cerny proposed, as a contingency, that a second corporation be formed to take back the assets sold to Olevia should that transaction unravel. The Debtors invited Mr. Cerny to provide additional details to his proposal, but none came. D. Lead Plaintiff Sale Objection On Aug. 13, 2008, the city of St. Clair Shores Police and Fire Retirement System, as lead plaintiff in a class action lawsuit, filed a limited objection to the Debtors' proposed sale. The lead plaintiff said it does not object to the sale itself, but requested that the sale order provide for a protocol or other mechanism to preserve and protect the Debtors' books and records that may be transferred as part of the sale. The lead plaintiff also requested a notice and opportunity to object to any efforts to abandon or destroy the Debtors' books and records. The Debtors said that much of the relief sought by the lead plaintiff is already included in the purchase agreement. The lead plaintiff and the Debtors have reached a potential compromise acceptable to both of them. The proposed purchaser has not yet agreed to the compromise. E. Funai Sale Objection On Aug. 13, 2008, Funai Electric Co., Ltd. and Funai Corporation, Inc. filed limited objection to the the proposed sale. Funai said it does not object to the sale itself, but asked that its right to enforce any order issued by the International Trade Commission be clarified with regard to a prepetition investigation conducted. Funai also asked that language be inserted into the sale order stating that any order by the ITC be enforceable against Syntax- Brilian, the purchaser, and their successors and assigns. Any rights of Funai and the ITC should not constitute interests from which the purchased assets can be sold free and clear of liens. The purchaser be held as successor to the Debtors for the purpose of the investigation and any orders entered by the ITC. The Debtors said that the issues raised by Funai were not legitimate objections to the sale. Further, the language proposed by Funai is unnecessary and the Court does not need to decide the issued Funai raised in order to approve the sale. F. Committee Sale Objection On Aug. 15, 2008, the Official Committee of Unsecured Creditors filed limited objection to the sale. The Committee said it does not object to the sale, however, it does object to the sale structure. The Debtors said that the proposed application of proceeds is appropriate because the sale involved prepetition collateral and the lenders should be able to elect to have the proceeds applied to their prepetition claims. The Debtors said there was never any intent to circumvent the Committee's investigation rights, which are clearly reserved in the final DIP order, with respect to the prepetition lenders. The Debtors and the prepetition lenders have agreed to add language to the sale order that the Debtors believe will resolve the Committee's concern. The Committee's concerns regarding the lenders' receipt of proceeds is overboard, the Debtors asserted. The purchaser are paying value for the assets of a business enterprise, and in connection with that purchase, insisted on a clean break with the Debtors. The Committee appears to be concerned about certain receivables, intercompany claims and accounts receivable owing from Taiwan Kolin Company, Ltd. The Debtors said that the inclusion of the certain receivables as part of the sale was specifically negotiated for by the purchaser. The Debtors subscribe little value to those receivables. The Debtors do not believe that intercompany claims are included as purchased assets and those claims are of limited value. The Debtors are discussing with the purchaser some clarifying language regarding the purchase agreement. However, the Debtors do not believe a change is necessary for the amounts owing from Kolin to be excluded assets. As reported in the Troubled Company Reporter on July 30, 2008, Roberta A. DeAngelis, the U.S. Trustee for Region 3, and the Committee objected to a request to approve the proposed bidding procedures. G. Circuit City Sale Objection On Aug. 18, 2008, Circuit City Stores, Inc. filed amended objection to the Debtors' motion to sell assets. Circuit City objected to the sale to the extent that it sought to convey certain alleged receivables owed to the Debtors by Circuit City free and clear of liens under a prepetition contract between the two companies. In addition, Circuit City alleged that the Debtors have somehow anticipatorily breached that contract. The Debtors and Circuit City have reached resolution on language to be added to the sale order that resolves the objection. Response to Cure Objections On Aug. 15, 2008, Oracle USA, Inc. filed an objection to the cure amounts in connection with the assumption of unexpired leases and executory contracts. The purchaser and Oracle are currently attempting to resolve the issued raised in the objection. On August 15, Majestic Realty Co. and Fairway SUB C, LLC filed an objection to cure amounts in the bankruptcy case. Majestic/Fairway filed the objection as a precaution pending further evaluation of the cure amount proposed by the Debtors. The parties are currently attempting to resolve the issued raised in the objection. On August 15, Thomson Licensing LLC objected to the cure amounts. The purchaser determined that it does not desire to take assignment of the related contract with Thomson. Accordingly, the Debtor is no longer proposing to assume and assign this contract at this time. No further response to Thomson is requred. In a letter dated August 13, SRS Labs, Inc. raised various objections to the assumption and assignment of its contract with one or more of the Debtors. The purchaser determined that it does not desire to take assignment of the related contract with SRS. Further response to the objection is no longer required. About Syntax-Brillian Headquartered in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC) -- www.syntaxbrillian.com -- manufactures and markets LCD HDTVs, digital cameras, and consumer electronics products include Olevia(TM) brand high-definition widescreen LCD televisions and Vivitar brand digital still and video cameras. Syntax-Brillian is the sole shareholder of California-based Vivitar Corporation. The company and two of its affiliates -- Syntax-Brillian SPE, Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection on July 8, 2008 (Bankr. D. Delaware Lead Case No.08-11409 through 08-11409. Dennis A. Meloro, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig LLP, represent the Debtors in their restructuring efforts. The U.S. Trustee for Region 3 has yet to appoint creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors filed for protection against their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TAHOE RENO: Case Summary & Three Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Tahoe Reno Commercial Center, LLC 501 Hammill Lane Reno, NV 89511 Bankruptcy Case No.: 08-51437 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: August 18, 2008 Court: District of Nevada (Reno) Debtor's Counsel: Alan R. Smith, Esq. 505 Ridge Street Reno, NV 89501 Tel: 775) 786-4579 Email: mail@asmithlaw.com Total Assets: $49,975,752 Total Debts: $18,877,627 Debtor's list of its Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Washoe County Treasurer Real Property $49,625 P.O. Box 30039 Taxes Reno, NV 89520-3039 Robertson & Benevento Goods/Legal $15,000 50 West Liberty Street Services Suite, 600 Reno, NV 89501 CH2MHILL Engineering Services $13,002 322 East Front Street Suite 200 Boise, ID 83702 TILE & STONES: Files for Chapter 11 Protection in Florida --------------------------------------------------------- Tile & Stones Inc. and two of its subsidiaries, Tile and Stones Showroom and Tile and Stones of Stuart, filed for Chapter 11 protection with the U.S. Bankruptcy Court for the Southern District of Florida (Miami), case number 08-2164, the Bloomberg News reports. Bloomberg relates that the Debtors' filing for protection from its creditors was caused by a decline in its revenue. Bloomberg, citing Thomas Santoro, a principal of GlassRatner Advisory & Capital Group LLC, said in court documents that the Debtors suffered a slump in sales in the second half of calendar year 2007, due to the housing and development slowdown. The bankruptcy was filed by Robert Charbonneau, Esq. of Ehrenstein Charbonneau Calderin in Miami, Bloomberg adds. Headquartered in Miami, Florida, Tiles & Stones Inc. -- http://www.tilesandstones.com/-- retails, wholesells, and imports marble. It first opened its business in 1995. It distributes natural stones and marble in the United States, and carries a variety of products such as travertine, limestone, slate, marble, granite, onyx and semiprecious stones. Tile & Stones generated $71 million in sales in 2006. The Debtor listed assets of less than $50 million and debts of less than $50 million. TILES & STONES: Case Summary & 41 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Tiles & Stones, Inc. 1777 N.W. 72 Ave. Miami, FL 33126 Bankruptcy Case No.: 08-21644 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Tiles & Stones Showroom, Inc. 08-21646 Tiles & Stones of Stuart, Inc. 08-21647 Type of Business: The Debtors sell tiles and stones. See: http://www.tilesandstones.com Chapter 11 Petition Date: August 16, 2008 Court: Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Daniel L Gold, Esq. (dgold@ecccounsel.com) Jacqueline Calderin, Esq. (jc@ecccounsel.com) Robert P Charbonneau, Esq. (rpc@ecccounsel.com) 800 Brickell Ave., # 902 Miami, FL 33131 Tel: (305) 722-2002 http://ecccounsel.com/ Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million A. Tiles & Stones' 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Marmoles Novelda SA $1,569,917 Campet, 124 03660 Novelda Novelda Spain EPC $943,895 3356 N.W. 78th Avenue Miami, FL 33122 Tiles & Stone of Puerto Rico Inc. $739,265 Edificio #2, Victoria Indust. Park Carr. 887 Esq. Carretera #3 Carolina, PR 00987 Metamar Mermer Granit AS $603,411 Travertino Trading Co. $417,244 EPC America $382,325 Marmi La Precisa SAS $355,084 Byzantine Industries LLC $336,894 Decoexsa Mediterrano SA $311,396 Elle-Gi Ceramiche SRL $307,842 Armes. Madencilik Ve Ticaret Ltd. $307,591 Cristal Ceramicas SA $282,338 Azuvi SA $275,447 Sonmez Marble & Travertine $254,615 Marble & Granite Plus Inc. $247,443 Premier Airport Center LLP $212,632 Refin Ceramiche $212,347 Starlite SPA $195,992 Jamil Tiles & Stones $187,433 B. Tiles & Stones Showroom's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Tiles & Stone Inc. $1,437,617 1777 N.W. 72 Ave. Miami, FL 33126 Marmoles Novelda SA $545,289 Campet, 124 03660 Novelda Alicante SPAIN 03660 Byzantine Industries LLC $344,065 1333 West Loop South Houston, TX 77027 Marmoles Carmu SL $116,788 CAMPG $151,280 CRIM $114,130 Manchamar S/L $50,604 Metamar Mermer Granite $48,642 Victoria Stone Ind. E Com. SA $40,569 Levantina Natural Stone SA $32,611 Decoexsa Mediterrano SA $31,240 EPC America $30,504 Stoneexport SL $25,645 MS International Inc. $24,350 Milanezi $22,898 Novelda Marble Granito SL $22,589 Jacigua Marmores E. Granitos LTDA $20,977 Bergamo Stone SRL $20,926 Armes. Madencilik Ve Ticaret Ltd. $20,178 Elle-Gi Ceramiche SRL $19,303 A. Tiles & Stones' of Stuart's Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Carolina Air LLC $35,057 Clark Holding Company 850 NW Federal Hwy., Sutie 206 Stuart, FL 34994 THOMAS INDUSTRIES: To Hold Auction of Assets on September 26 ------------------------------------------------------------ Thomas Industries LLC obtained permission from the U.S. Bankruptcy Court, Northern District of Georgia (Rome) to publicly sell its assets on Sept. 26, 2008, William Rochelle of Bloomberg News reports. Milliken & Co. had offered to acquire the Debtor's assets for $24 million, Mr. Rochelle notes. Milliken and the Debtor negotiated the sale prior to the bankruptcy filing. The Court will conduct a sale hearing on Sept. 29, 2008, Mr. Rochelle adds. According to court documents, the Debtor owes secured creditor Bank of America NA at least $27.8 million, Mr. Rochelle relates. The Debtor partly blamed its financial demise on Propex Inc.'s chapter 11 bankruptcy filing in January, Mr. Rochelle notes. Propex is one of the Debtor's largest clients. About TI Acquisition Dalton, Georgia-based TI Acquisition, LLC, does business as Thomas Industries, Monticello Floors, Mattel, Superior Yarn Technology, Mattel Carpet & Rug, Thomas Industries, and Templeton Carpet Mills. It manufactures carpets and textiles. It filed its chapter 11 petition on July 27, 2008 (Bankr. N.D. Ga. Case No. 08- 42370). Richard T. Klingler, Esq., at Kennedy, Koontz & Farinash, represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets of $10 million to $50 million and debts of $50 million to $100 million. The Debtor listed $3,213,604 in unsecured debt owed to Honeywell Nylon, LLC and $1,326,415 owed to Southern Polymer, Inc. TRIBUNE CO: Negative Earnings Broaden Possibility of Default ------------------------------------------------------------ MediaDailyNews related that although Tribune Company has met all of its debt obligations to date, the possibility of default in 2009 becomes larger with each new negative earnings. As reported in the Troubled Company Reporter on Aug. 18, 2008, Tribune reported a net loss of $4.5 billion for the second quarter ended June 29, 2008, compared with net income of $36.3 million in the same period last year. Tribune's operating cash flow declined 2% to $221 million, succeeding a 16% decrease in first-quarter operating cash flow, to $200 million, MediaDailyNews stated. These figures are important because, per the terms of its debt agreements, Tribune must maintain a ratio of debt to operating cash flow of no more than 9-to-1, based on the present and three previous quarters, MediaDailyNews explained. If the ratio climbs above 9-to-1, the company could be declared to be in default by lenders, MediaDailyNews pointed out. Altogether, the company's operating cash flow in the first half of the year was $417.6 million, down 6% from $445.6 million in the first half of 2007. MediaDailyNews indicated that since the company's debt agreements are relatively new and there are only two quarters of data to consider, the trend is not promising. If the trend holds up with a 6% decline in the second half, operating cash flow for the full year will be around $932 million, MediaDailyNews pointed out. Tribune, according to MediaDailyNews, paid down $807 million on the principal $8.2 billion debt in the second quarter, bringing it to $7.4 billion. Thus, the ratio of cash flow to debt stands at about 8-to-1, within the bounds of the covenant, MediaDailyNews said. MediaDailyNews noted that Tribune, to make the payment this quarter, had to borrow a $218 million -- plus a $7 million fee -- under a financial arrangement called a trade receivables debt securitization facility, which has an upper limit of $300 million. That leaves $75 million for future emergency borrowing, MediaDailyNews added. MediaDailyNews stated that trends in the newspaper business are all pointed sharply downward, and some analysts expect losses to accelerate during the second half of the year. That means Tribune's cash flow could shrink much faster than the 6% rate of the first half, the report added. If it shrank at a 20% rate -- loser to the rate in the first quarter and 2007 -- its cash flow for the full year would be under $800 million, in violation of its covenant by about $200 million, MediaDailyNews stated. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN- AM and the Chicago Cubs baseball team. * * * As reported in the Troubled Company Reporter on July 24, 2008, Moody's Investors Service downgraded Tribune Company's Corporate Family rating to Caa2 from B3, the Probability of Default rating to Caa2 from B3, concluding the review for downgrade initiated on April 21, 2008. Moody's also assigned an SGL-4 speculative-grade liquidity rating. The LGD point estimates were updated to reflect the current mix of debt. Tribune Company disclosed Wednesday financial results for its second quarter ended June 29, 2008. At June 29, 2008, the company's consolidated balance sheet showed $8.2 billion in total assets, $14.4 billion in total liabilities, and $22.6 million in common shares held by ESOP, net of unearned compensation, resulting in a $6.2 billion stockholders' deficit. TRIBUNE CO: LA Times Unit Appoints Eddy Hartenstein as Publisher ---------------------------------------------------------------- Tribune Co.'s Los Angeles Times appointed Eddy Hartenstein, the former head of DirecTV Group Inc., as publisher, The Wall Street Journal reports. According to the Journal, the position hasn't been known for job security: Mr. Hartenstein is the fourth publisher since 2000. His predecessor, David Hiller, lasted less than two years before stepping down last month under pressure from Tribune's new management. Mr. Hartenstein was chairman and chief executive of HD Partners Acquisition Corp., a company that raised about $150 million to buy assets in the media, telecom and entertainment sectors, WSJ says. WSJ, citing James O'Shea, who was the Times' top editor until January, said Mr. Hartenstein's biggest challenge will be to bring in more revenue at a time when the staff and news pages are shrinking, and pushing for financial improvement to fuel investment in the paper rather than to service Tribune's debt. The Times, WSJ states, is suffering from declining revenue, and morale is low after waves of staff cuts. The recent reduction, trimmed about 250 employees, including nearly one-fifth of the newsroom, WSJ indicates. Mr. Hartenstein must fill key positions, including the head of advertising sales, a post vacant since February, WSJ notes. WSJ, citing Times insiders, say they are cautiously optimistic about Mr. Hartenstein, who has shown an intimate knowledge of the paper, built as a longtime reader and Los Angeles-area resident. His fundamental task, WSJ says, will be to rethink the paper's business model as the continued flight of readers and advertisers to the Internet puts serious financial strain on the industry. WSJ indicates that rehabilitating the Times is crucial to Tribune, which owns eight major daily newspapers and a string of television stations. The company is weighed down by $12.5 billion in debt, WSJ notes, largely related to real-estate mogul Sam Zell's deal in December to take Tribune private. The Times' relationship with its corporate overseers has deteriorated further since Mr. Zell took the helm at Tribune, WSJ adds. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Company (NYSE: TRB) -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting. It reaches more than 80% of U.S. households and is the only media organization with newspapers, television stations and websites in the nation's top three markets. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, Newsday (Long Island, New York), The Sun (Baltimore), South Florida Sun-Sentinel, Orlando Sentinel and Hartford Courant. The company's broadcasting group operates 23 television stations, Superstation WGN on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. Tribune Company's consolidated balance sheet at March 30, 2008, showed total assets of $12.97 billion, total liabilities of $14.63 billion, and common shares held by ESOP, net of unearned compensation, of $10.7 million, resulting in a shareholders' deficit of roughly $1.67 billion. * * * As reported in the Troubled Company Reporter on July 24, 2008, Moody's Investors Service downgraded Tribune Company's Corporate Family rating to Caa2 from B3, the Probability of Default rating to Caa2 from B3, concluding the review for downgrade initiated on April 21, 2008. Moody's also assigned an SGL-4 speculative-grade liquidity rating. The LGD point estimates were updated to reflect the current mix of debt. TROPICANA ENT: Court OKs Capstone Advisory as Panel's Fin. Advisor ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in Tropicana Entertainment LLC and its debtor-affiliates' Chapter 11 cases obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain Capstone Advisory Group LLC, as its financial advisor. As reported in the Troubled Company Reporter on July 7, 2008, Capstone is expected to: (a) advise and assist the Committee in its analysis and monitoring of the Debtors' historical, current and projected financial affairs; (b) analyze the Debtors' "Operative Business Plan;" (c) develop a monthly monitoring report to enable the committee to effectively evaluate the Debtors' performance on an ongoing basis; (d) assist and advise the Committee and its counsel in reviewing and evaluating any court motions filed to to be field by the Debtors or any parties-in-interest; and (e) analyze any debtor-in-possession financing arrangements. Capstone will be paid in accordance to its customary hourly rates and will be reimbursed for reasonable and actual out-of-pocket expenses. The firm's hourly rates are: Executive Directors $525 - $725 Staff $250 - 4510 Support Staff $100 - $160 According to Bradley Takahashi, vice president of Franklin Mutual Advisers LLC, the chair of Creditors Committee, these monthly caps on compensation will apply to payments made to Capstone by the Debtors for services to be rendered to the Creditors Committee: * maximum limitation of $275,000 for all months in which Capstone does not provide any forensic or valuation services; * maximum limitation of $400,000 for all months in which Capstone provides forensic or valuation services, and the combined hours of those services do not exceed 350 hours for the month; and * maximum limitation of $700,000 for all months in which Capstone provides forensic or valuation services, and the combined hours of those services exceed 350 hours for the month. Capstone does not represent any interest adverse to the Debtors and their estates with respect to the matters upon which the firm will be employed. Capstone is a disinterested party, as the term is defined in Section 101(14) of the Bankruptcy Code, Mr. Ordway attests. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The Debtors' exclusive plan filing period expires on Sept. 2, 2008. (Tropicana Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Nevada Gaming Permits New Board to Manage Biz ------------------------------------------------------------ The Nevada Gaming Control Board has allowed Tropicana Entertainment LLC's new board to take control of the company as it proceeds with its bankruptcy case, according to the Las Vegas Sun. The board, composed of chairman Thomas Benninger, Scott Butera, Bradford Smith, and Michael Corrigan, is currently seeking a license. The Nevada Gaming Commission is set to issue a final ruling on the extent of the board control on Tropicana on a scheduled meeting come Aug. 21, 2008. If the Commission enters a final approval on the matter, that ruling "would take the unprecedented step of giving an unlicensed board financial control over a Nevada casino," Richard N. Velotta of the Las Vegas Sun notes. Nevada Board Chairman Dennis Neilander told the Las Vegas Sun that the current status of Tropicana called for the "unusual management arrangement." He said the Nevada Board is not intent on allowing "similar arrangements to other companies." Mr. Neilander also told the San Francisco Chronicle that Mr. Butera "has shown regulators that he has a full grasp on the issues that are facing . . . [Tropicana] and what's needed to get it 'on track.'" About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in this case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The Debtors' exclusive plan filing period expires on Sept. 2, 2008. (Tropicana Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL CORP: Names Kathryn Mikells as Senior Vice President and CFO ---------------------------------------------------------------- UAL Corporation appointed Kathryn Mikells as senior vice president and chief financial officer, succeeding Jake Brace, executive vice president and chief financial officer, who is retiring November 1. In her new position, Ms. Mikells, who has held several leadership roles in the finance organization, will be responsible for treasury, tax, the controller function, budgets, financial planning and analysis, accounting, external financial reporting, and, for administrative purposes, internal audit. She also will be responsible for mergers and acquisitions, fleet planning, corporate development and investor relations. Mr. Brace has served since 2001 as CFO, well as in the role of chief restructuring officer, leading the company's $23 billion restructuring. Since joining United in 1988, Mr. Brace has held several leadership positions, including vice president -- Corporate Development, vice president -- Financial Analysis and controller and senior vice president -- Finance. Prior to joining United, Mr. Brace also held leadership positions with American Airlines. He will continue to serve in an advisory role to the chairman and the company's board of directors. "[Mr. Brace] has brought significant capability to the role of CFO, combining strong business acumen, a solid financial background and critical thinking at a time when the company was going through a complex restructuring," Glenn Tilton, United chairman, president and CEO, said. "We thank [Mr. Brace] for his unwavering commitment to United, and for leading the work that enabled this company to restructure and compete in a challenging competitive environment. We wish him well in the next phase of his career. [Ms. Mikells] is a demonstrated leader who successfully managed critical departments within the finance organization. She is well suited and well prepared to take on the role of chief financial officer." Ms. Mikells served as vice president of Investor Relations, representing United to the business and financial analyst community, and working closely with investors. Prior to that, Ms. Mikells held the role of vice president of Financial Planning and Analysis, responsible for business development and analytical support for business decisions and financial planning, including overseeing the company's operating and capital budgeting functions. She was vice president and treasurer for United, where she was responsible for United's treasury department, including corporate finance, risk management, cash management, insurance and corporate tax. "I have worked with [Ms. Mikells] for more than 10 years, and this is a role that she has prepared for, worked hard for, and that is well deserved," Mr. Brace said. Ms. Mikells joined United in 1994 as a financial analyst. She has held several leadership positions, including vice president of Corporate Real Estate, director of Corporate Planning, managing director of United NetVentures, chief financial officer of Mileage Plus, director of Financial Analysis, and manager of Operating Budgets and Treasury. Prior to joining United, Ms. Mikells spent six years in the financial services sector, including positions at GE Capital's Corporate Finance Group, Household International and Canadian Imperial Bank. She holds a master's of business administration from the University of Chicago and a bachelor's of science degree in finance from the University of Illinois at Urbana-Champaign. In her new role, Mikells will report to Tilton and will continue to be based at the company's corporate headquarters in Chicago. 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. * * * As reported in the Troubled Company Reporter on July 29, 2008, Standard & Poor's Ratings Services lowered its ratings on UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. UNO RESTAURANT: Cut to 'D'; S&P Doesn't Expect Interest Payment --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings, including the corporate credit rating, on Boston-based Uno Restaurant Holdings Corp. to 'D' from 'CC'. "The downgrade is based on the company's failure to pay the Aug. 15 interest payment on its 10% senior secured second-lien notes due 2011," explained Standard & Poor's credit analyst Jackie E. Oberoi. The indenture stipulates that the company has 30 days after the interest was due to make the payment before an "Event of Default" occurs. "However, given the company's weak liquidity and operating trends," added Ms. Oberoi, "we do not expect it to make the payment." US WEB: Files for Chapter 11 Bankruptcy in New York --------------------------------------------------- US Web Inc. filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of New York, citing losses and cash flow problems from slow demand, Bloomberg News reports. Bloomberg, citing papers filed with the Court, says the company listed assets of $10 million and debts of $50 million each. The company owes at least $3.4 million in claims to unsecured creditors including: -- Ris Paper Co., owed $574,901, -- Case Paper Co., owed $496,085, and -- Marquardt & Co., owed $288,531. The company owes roughly $11,725,068 to secured creditors including Milberg Factors Inc., All Points Capital Corp., Great Atlantic Capital, Siemans Bank, Citicorp Vender Financing, and Peoples Capital, the report says. Headquartered in Huntington, New York, US Web Inc. -- http://www.uswebinc.com/-- provides printing and mailing services. US WEB: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------- Debtor: US Web Inc. 780 Park Avenue Huntington, NY 11743 Tel: (631) 427-5200 Bankruptcy Case No.: 08-74421 Type of Business: The Debtor produces a variety of direct- response materials, including sheetfed and continuous forms, publication insert cards, postcards, mailers, brochures and more. See http://www.uswebinc.com/ Chapter 11 Petition Date: August 18, 2008 Court: Eastern District of New York (Central Islip) Judge: Alan S. Trust Debtor's Counsel: Lori K. Sapir, Esq. Silverberg Stonehill Goldsmith & Haber 1111 West 40th Street New York, NY 10018 Tel: (212) 730-1900 Fax: (212) 391-4556 Email: lsapir@ssghlaw.com Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's list of its 19 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ RIS Paper Company Inc. Trade Debt $574,901 P.O. Box 641617 Pittsburgh, PA 15264-1617 Marquadt & Company Trade Debt $533,535 Division Central Lewmar P.O. Box 822425 Philadelphia, PA 19182-2425 Case Paper Company Trade Debt $496,085 500 Mamaroneck Avenue Harrison, NY 10528 Infoprint Solutions Co. Trade Debt $269,027 P.O. Box 644225 Pittsburgh, PA 15264-4225 Sun Chemical Trade Debt $182,543 Joules Angstrom Trade Debt $147,701 Gould Paper Corp. Trade Debt $137,086 Roosevelt Paper Corp. Trade Debt $128,077 Lipa Trade Debt $127,423 NRA II, LLC Trade Debt $125,151 Lincoln Paper & Tissue LLC Trade Debt $113,966 Mystic Logistic Inc. Trade Debt $101,829 Quebecor World (USA) Inc. Trade Debt $100,221 Midwest Ink Company Trade Debt $99,955 United Health Care Trade Debt $97,844 Sperber Direct, Inc. Trade Debt $97,512 Pitman Company Trade Debt $95,322 MBO America Trade Debt $92,800 Zippy Blue Trade Debt $79,951 VALCOM INC: Court Confirms Second Amended Chapter 11 Plan --------------------------------------------------------- The Hon. Ernest M. Robles of the United States Bankruptcy Court for the Central District of California confirmed a second amended Chapter 11 plan of liquidation filed by Valcom Inc. on June 14, 2008. In conjunction with the confirmation, Carol Fusilier, the U.S. Trustee for Region 16, has withdrawn its motion to convert the Debtor's Chapter 11 case to a Chapter 7 liquidation proceeding. On July 2, 2008, Judge Robles approved the Debtor's second amended disclosure statement dated June 14, 2008. He held that the amended disclosure statement contain adequate information within the meaning of Section 1125 of the Bankruptcy Code. Plan Overview The plan will be funded by cash on hand to pay off the allowed priority unsecured tax claims of $191,164, administrative expense claims of $32,500, and the first month�s payment of $17,000 to its non-priority general unsecured creditors. The Debtor has $170,000 in cash. The Debtor estimates that it will have at lest $300,000 available for disbursement on the plan's effective date. The Debtor's president and chief executive officer, Vince Vellardita, will serve as disbursing agent to make all distributions provided for under the plan. In turn, he will serve without bond and will be paid $1,500 per week for services rendered. Furthermore, the Debtor will assume unexpired leases and executory contracts as obligations to the reorganized Debtor. Treatment of Interests and Claims Type Estimated Class of Class Treatment Amount ----- -------- --------- --------- unclassified administrative $32,558 claims unclassified priority tax $191,164 claims 1 secured claims a) Los Angeles N/A $10,211 County Treasurer b) Vincent and impaired $350,00 Teresa Vellardita c) Richard Shintaku/ impaired $650,000 ICAG Inc. 3 general unsecured impaired $205,000 claims 4 unsecured claim and deficiency claim of: a) the Vellarditas impaired $459,312 b) Richard Shintaku/ impaired $477,797 ICAG Inc. c) Bonnie Nelson impaired $80,000 d) John Fife impaired $144,673 e) Frank O'Donnell impaired $10,000 5 equity interest unimpaired retained Class 3 and 4 are entitled to vote for the plan. Under the Plan, the Debtor will issue 250 million shares of common stock and 25 million shares of preferred stock. At present, the Debtor has issued and outstanding at least $12 million shared. The prepetition equity interests and rights will be retained. Furthermore, the Debtor is planning to issue 38 million shares of common stock to insiders who have prepetiton right to receive equity for debt. A full-text copy of the Debtor's Second Amended Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?30e4 A full-text copy of the Debtor's Second Amended Chapter 11 Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?30e5 About ValCom Based in Los Angeles, California, ValCom Inc. (PNK: VLCO) -- http://www.valcom.com/-- leases sound and production stages and produce films and TV programs. It engages in studio rental; film, television, and animation production; and broadcast television businesses. The Debtor filed voluntary petitions for reorganization under Chapter 11 on July 16, 2007 (Bankr. C.D. Calif. Case No. 07- 15984). Joseph L. Pittera, Esq., represents the Debtor in its restructuring efforts. When the Debtor filed for bankruptcy, it listed assets and debts between $1 million and $100 million. VERASUN ENERGY: Moody's Confirms Rating on $450MM Sr. Notes at B3 ----------------------------------------------------------------- Moody's Investors Service moved the ratings outlook for VeraSun Energy Corporation to negative and downgraded the speculative grade liquidity rating to SGL-4 from SGL-3. T he change in the ratings outlook reflects the ethanol industry's unattractive commodity margins and a decline in VeraSun's liquidity. The company's B2 corporate family rating and ratings on VeraSun's two public debt issues were affirmed. These summarizes the ratings. VeraSun Energy Corporation Ratings change: -- Speculative grade liquidity rating -- SGL4 from SGL3 -- Ratings Outlook -- Negative from Stable Ratings affirmed: -- Corporate family rating -- B2 -- Probability of default rating -- B2 -- $210MM Sr. sec. notes due 2012 -- Ba3 (LGD2, 27%) from Ba3 (LGD2, 23%) -- $450MM Sr. unsec. notes due 2017 -- B3 (LGD5, 77%) from B3 (LGD5, 72%) The current ethanol industry environment is unattractive due to high corn and natural gas commodity input costs and unattractive ethanol pricing that has led to slim operating margins and elevated working capital requirements. Additionally, controversy about the impact the ethanol industry is having on food prices and water use, and the benefits provided by ethanol could erode support for the industry. In the next 12-18 months, Moody's sees the potential for volatility in ethanol producers' input costs and ethanol prices that could lead to a decline in profits and substantial volatility in liquidity, hence the ratings could be negatively impacted. Despite elevated corn and natural gas commodity prices during the second quarter, ethanol has traded at a significant discount to gasoline, limiting the profits of ethanol producers. Current ethanol industry production capacity of approximately 9.5 billion gallons per year exceeds the minimum mandated use of 9 BGPY for 2009, as required by federal legislation passed in December 2007, and capacity will likely continue to exceed mandated use as growth in new capacity more than offsets the increase in mandated use over the next couple years. Under such supply/demand conditions, ethanol prices may remain weak relative to gasoline. The excise tax credit of $0.51 for each gallon of ethanol blended into gasoline has benefited blenders during 2008 and has not supported the profitability of ethanol producers. The downgrade in the liquidity rating reflects the negative impact on VeraSun's internal cash flow from elevated working capital needs and continued capital expenditures for new plants. New ethanol plant start ups have increased working capital needs and current operating margins have not been sufficient to offset the negative cash flow impact on working capital of the significant rise in commodity prices for corn and natural gas. VeraSun's cash balances have declined steadily following several quarters of elevated capital expenditures for the construction of new ethanol plants and the acquisition of ASAlliances Biofuels LLC such that current cash balances no longer provide a large cushion against adverse industry conditions. VeraSun is currently reliant on its $125 million revolving credit facility to fund its working capital needs and may use the revolver to partially fund the completion of ethanol and corn oil extraction facilities under construction. VeraSun did improve its liquidity in the second quarter when it postponed the start of three completed ethanol facilities and replaced its $30 million revolver due December 2008 with a $125 million asset based revolving credit facility due May 2011. Headquartered in Brookings, South Dakota, VeraSun Energy Corporation produces ethanol in the United States with 13 facilities having a production capacity totaling 1,310 million gallons per year. It has three additional ethanol plants under construction due for start up in the second half of 2008, which will bring total capacity to 1,640 MGPY. The firm acquired US BioEnergy Corporation in April 2008. Revenues for the LTM ended June 30, 2008, which do not reflect the full year operations of all of VeraSun's plants, were approximately $2.1 billion. VION PHARMACEUTICALS: Nasdaq to Delist Securities on August 15 -------------------------------------------------------------- Vion Pharmaceuticals Inc. received a letter from NASDAQ informing the company that it would be delisted from the Nasdaq Stock Market and trading in its shares would be suspended effective on Aug. 15, 2008. The company expected that its common stock will be quoted on the OTC Bulletin Board in the near future. Quotes for OTC Bulletin Board stocks can be found at OTCBB.com. The company will maintain its status as a reporting company with the Securities and Exchange Commission and update its shareholders on material events and financial information as required. Vion Pharmaceuticals Inc. -- http://www.vionpharm.com-- develops and commercializes cancer therapeutics. Vion has two agents in clinical trials. Cloretazine(R) (VNP40101M), a unique alkylating agent, is being evaluated in a Phase II pivotal trial as a single agent in elderly patients with previously untreated de novo poor-risk acute myelogenous leukemia. Clinical trials of Cloretazine(R) (VNP40101M) with temozolomide in brain tumors, and with stem cell transplantation in advanced hematologic malignancies, are also being conducted. Triapine(R), a potent inhibitor of a key step in DNA synthesis, is being evaluated in clinical trials sponsored by the National Cancer Institute. WACHOVIA CORP: Inks Deal to Settle Auction Rate Securities Probe ---------------------------------------------------------------- Wachovia Corporation reached an agreement in principle for a global settlement with the Missouri Secretary of State as the lead State in the North American Securities Administrators Association task force investigating the marketing and sale of auction rate securities, or ARS, the Attorney General for the State of New York and the Securities and Exchange Commission regarding ARS. Wachovia stated that the settlement produces a liquidity solution for its clients who purchased ARS at Wachovia. "We understand that unprecedented market conditions have created difficulties for our clients, particularly those holding auction rate securities," Robert K. Steel, president and chief executive officer of Wachovia Corporation, said. "We are pleased to announce a comprehensive solution for the liquidity needs of clients who purchased auction rate securities at Wachovia and to resolve this matter with federal and state regulators." "Since this issue arose in February when auctions first started to fail, we have played a leading role in encouraging ARS issuers to restore liquidity to all of our clients, including those who have become part of our firm through the Oct. 1, 2007, merger of A.G. Edwards and Wachovia Securities," Daniel J. Ludeman, president and chief executive officer of Wachovia Securities, LLC, said. "The dollar value of ARS held by Wachovia Securities clients has been cut by more than 50 percent through redemptions and successful auctions. Today's agreement in principle underscores our desire to ensure that clients who purchased ARS at Wachovia receive the liquidity they need." Terms of the agreement in principle include: -- Wachovia will offer to purchase at par ARS held by all individuals, charities and religious organizations, well as ARS held by small and medium-sized businesses with account values and household values of $10 million or less, that were purchased at Wachovia on or before Feb. 13, 2008. These purchases will commence no later than Nov. 10, 2008, and conclude no later than Nov. 28, 2008, for clients who accept this offer. ARS that are the subject of functioning auctions will not be eligible for purchase. -- Wachovia will offer to purchase at par ARS held by all other clients that were purchased at Wachovia on or before Feb. 13, 2008. These purchases will commence no later than June 10, 2009, for clients who accept this offer and conclude no later than June 30, 2009. ARS that are the subject of functioning auctions will not be eligible for purchase. -- Wachovia will also reimburse investors who can reasonably be identified and who would have been covered by the offer but who sold their ARS below par, between Feb. 13, 2008, and the date of entry of the settlement, for the difference between par and the price at which the investor sold the ARS. The reimbursement will be made by Nov. 28, 2008. -- In addition to Wachovia's offer to purchase ARS from clients, Wachovia will offer loans to affected clients in need of liquidity until the ARS repurchases occur. -- Wachovia will refund refinancing fees to municipal ARS issuers who issued ARS in the initial primary market between Aug. 1, 2007, and Feb. 13, 2008, and refinanced those securities after Feb. 13, 2008. -- Wachovia will pay a total fine of $50 million to the state regulatory agencies, which will be distributed to the States as determined by the North American Securities Administrators Association and the State of New York. -- Wachovia neither admits nor denies allegations of wrongdoing. On Aug. 11, 2008, in connection with the expectation of a potential settlement of ARS matters, Wachovia recorded a $500 million pre-tax increase to legal reserves, including amounts reserved for estimated market valuation losses on affected ARS, for the second quarter of 2008, based on estimates and assumptions at the time of the filing. Based on the terms of the agreement in principle, the timing and currently estimated amounts of ARS to be purchased in the offer, current market conditions, expected future redemptions, and expected sales by Wachovia to third parties of a portion of ARS to be purchased in the offer, Wachovia expects to record a further $275 million pre-tax increase to legal reserves in the third quarter of 2008. Wachovia also expects that its Tier 1 capital ratio will decrease by approximately 8 basis points in the third quarter 2008, reflecting the additional increase in legal reserves and the capital impact of the offers. Wachovia does not currently expect that the purchase of ARS under the agreement in principle will have a material effect on capital, liquidity or overall financial results through expected maturities or redemptions of the ARS purchased, or alter Wachovia's previously announced focus on improving its Tier 1 capital ratio. Wachovia estimates that the par value of ARS currently outstanding and eligible for purchase under the above offers totals approximately $8.5 billion. After the purchases of ARS by Wachovia pursuant to the offers, and based on expected future redemptions and the expected sales of ARS to third parties described above, Wachovia currently estimates that the amount of ARS that it would hold on its balance sheet as of June 30, 2009, would be approximately $3.1 billion. About Wachovia Corporation Based in Charlotte, North Carolina, Wachovia Corporation (NYSE:WB) -- http://www.wachovia.com/-- is one of the nation's diversified financial services companies, with assets of $812.4 billion at June 30, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Clients are served in selected corporate and institutional sectors and through more than 40 international offices. Its retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 18,600 registered representatives in 1,500 offices nationwide. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com; and investment products and services at evergreeninvestments.com. As reported in the Troubled Company Reporter on July 22, 2008, reports say that a team of regulators from more than five states investigated the St. Louis headquarters of Wachovia Corp.'s securities division in relation to its auction-rate bonds sales, reports say. The regulators were from Missouri, Illinois, Massachusetts, Pennsylvania, New Jersey and other states. Missouri Secretary of State Robin Carnahan said in a statement the investigation was prompted because Wachovia hasn't "fully complied" with a Missouri probe on the matter. Investors have filed complaints after they were unable to access money frozen when firms in the auction-rate bonds market abandoned their operations in February. The team delivered more than a dozen subpoenas to the unit's executives and agents on July 17 as part of its probe into sales practices, internal evaluations of the auction-rate securities market and marketing strategies. Bloomberg News reports that up to $218 billion of auction-rate bonds sold by student-loan providers, municipalities and closed- end mutual funds remained frozen. WACHOVIA TRUST: S&P Cuts Ratings of Six Classes to CCC, D --------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes of commercial mortgage pass-through certificates from Wachovia Bank Commercial Mortgage Trust's series 2006-C26. At the same time, S&P affirmed its ratings on the other remaining classes from this series. The lowered ratings reflect ongoing interest shortfalls resulting from the reimbursement of advances from the master servicer, Wachovia Bank N.A. (Wachovia). The master servicer made advances on assets that are currently with the special servicer, CWCapital Management Inc. (CWCapital). S&P downgraded classes N and O to 'D' because it believes the classes are likely to have outstanding interest shortfalls for more then a year. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The two loans with the special servicer have an aggregate balance of $19.8 million. The master servicer intends to recover $2.0 million of outstanding advances from the trust in the coming months, which will cause recurring interest shortfalls on classes J through O. The shortfalls on classes J through M may occur for up to an additional eight months. Barring additional interest shortfalls that arise from other specially serviced assets, the classes should recover the accumulated shortfalls from subordinate certificate distributions within a year. Standard & Poor's expects the interest shortfalls on classes N and O to remain outstanding for an extended period of time. Details of the two loans with the special servicer are: -- The Westfield Apartments loan is secured by a 424-unit multifamily property in Houston, Texas, with an outstanding principal balance of $13.99. A $5.9 million appraisal reduction amount (ARA) went into effect against the loan in February 2008, when the loan was transferred to the special servicer due to monetary default. As of the July 17, 2008, remittance date, $1.4 million in advances remained outstanding for this loan. -- The Pines Point Apartments loan is secured by a 318-unit multifamily property in Dallas, Texas, and has an outstanding principal balance of $5.9 million. A $2.5 million ARA went into effect against the loan in February 2008, when the loan was transferred to the special servicer due to monetary default. As of the July 17, 2008, remittance date, $581,451 in advances remained outstanding for this loan. A new borrower has assumed the outstanding debt on both assets with the special servicer and has escrowed $3 million in reserve for property improvements, which will be controlled by Wachovia. S&P expects both assets to be transferred back to the master servicer after the assumption/workout has been completed. RATINGS LOWERED Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2006-C26 Rating Class To From Credit enhancement (%) J CCC BB 2.91 K CCC BB- 2.55 L CCC B+ 2.28 M CCC B 2.02 N D CCC+ 1.63 O D CCC 1.38 RATINGS AFFIRMED Wachovia Bank Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2006-C26 Class Rating Credit enhancement (%) A-1 AAA 30.66 A-1A AAA 30.66 A-PB AAA 30.66 A-2 AAA 30.66 A-3 AAA 30.66 A-3FL AAA 30.66 A-M AAA 20.42 A-J AAA 12.37 B AA 10.58 C AA- 9.56 D A 7.89 E A- 6.75 F BBB+ 5.60 G BBB 4.32 H BB+ 3.17 WM BBB- N/A X-P AAA N/A X-C AAA N/A N/A�Not applicable. WELLMAN INC: Panel Wants to Cut Financial Advisor's Monthly Rate ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the bankruptcy cases of Wellman Inc. and its debtor-affiliates proposes to the U.S. Bankruptcy Court for the Southern District of New York that the monthly allowance of FTI Consulting Inc., as financial advisor, be reduced from $125,000 to $75,000 for July 2008, and to $50,000 for the succeeding months. As disclosed in the Troubled Company Reporter on May 8, 2008, Creditors Committee appointed obtained approval from the Court to retain FTI Consulting, Inc., as its financial advisors nunc pro tunc to March 13, 2008. The Creditors Committee selected the firm because of its extensive experience in providing financial advisory services in large and complex Chapter 11 cases. In exchange for its services, FTI will receive a monthly fee of $125,000 and will be reimbursed for any expenses it may incur in connection with its employment. Headquartered in Fort Mill, South Carolina, Wellman Inc. ([OTC]: WMANQ.OB) -- http://www.wellmaninc.com/-- manufactures and markets packaging and engineering resins used in food and beverage packaging, apparel, home furnishings and automobiles. They manufacture resins and polyester staple fiber a three major production facilities. The company and its debtor-affiliates filed for Chapter 11 protection on Feb. 22, 2008 (Bankr. S.D. N.Y. Case No. 08-10595). Jonathan S. Henes, Esq., at Kirkland & Ellis, LLP, in New York City, represents the Debtors. Lazard Freres & Co., LLC, acts as the Debtors' financial advisors and investment bankers. Conway, Del Genio, Gries & Co., LLC, was also retained as the Debtors' chief restructuring advisor. The United States Trustee for Region 2 has appointed seven members to the Official Committee of Unsecured Creditors. Mark R. Somerstein, Esq., at Ropes & Gray LLP, serves as the Committee's bankruptcy counsel. FTI Consulting, Inc., acts as the panel's financial advisors. Wellman Inc., in its bankruptcy petition, listed total assets of $124,277,177 and total liabilities of $600,084,885, as of Dec. 31, 2007, on a stand-alone basis. Debtor-affiliate ALG, Inc., listed assets between $500 million and $1 billion on a stand-alone basis at the time of the bankruptcy filing. Debtor-affiliates Fiber Industries Inc., Prince Inc., and Wellman of Mississippi Inc., listed assets between $100 million and $500 million at the time of their bankruptcy filings. On a consolidated basis, Wellman Inc., and its debtor-affiliates listed $512,400,000 in total assets and $730,500,000 in liabilities as of June 30, 2008. Wellman filed a restructuring plan before the Bankruptcy Court on June 25, 2008. WEST GALENA: Plan Turns Over Condo to Secured Lender Owed $53MM --------------------------------------------------------------- West Galena Real Estate LLC on Aug. 18, 2008, submitted to the U.S. Bankruptcy Court, Eastern District of Michigan (Detroit) its chapter 11 reorganization plan and accompanying disclosure statement, William Rochelle of Bloomberg News relates. Under the plan, the Debtor will turn over six ultra luxury condominium units to its secured lender that is owed at least $53 million, Mr. Rochelle notes. The report continues that the turn-over is intended to cut the Debtor's debt by a court-approved amount that is equivalent to the condo units' price. The condo units' price is estimated to be about $25.35 million. The Debtor intends to pursue a litigation against its secured creditor and will use the proceeds of that case to pay unsecured creditors, Mr. Rochelle says. Lenders reportedly appeared before the bankruptcy court Aug. 19, 2008, to press for the transfer of the Debtor's case to Colorado, the report notes. Lenders alleged that the Debtor's operations and creditors are in Colorado. Rosewood Developer Sues Carval Investments The Troubled Company Reporter said on June 25, 2008, that the owners of the Rosewood Telluride Resort and Hotel have filed a lawsuit against Minneapolis-based CarVal Investments for allegedly failing to release prescheduled capital payments needed to begin construction of the 450,000-square-foot mixed-use development in Mountain Village. Rosewood's ownership group consists of West Galena Holdings LLC, West Galena Real Estate LLC, and Lot 129 LLC. Former Telluride resident Aaron B. Honigman serves as manager of the ownership group, which is based in Detroit. The parties negotiated but failed to reach an agreement on the release of a $50 million loan that was agreed with Ramsfield Hospitality Finance and CarVal Investments, an international private equity firm. The loan encompassed Rosewood Telluride as well as the Courcheval condominium project. The Mountain Village property was to be sold as a foreclosure at the San Miguel County Courthouse on June 4. The suit was filed June 3. About West Galena Based in Park City, Utah, West Galena Real Estate, LLC and affiliates West Galena Holdings, LLC and Lot 129, LLC are real estate developers. Their project involves the development of hotel and condominium units on prime lots near the Telluride, Colorado ski and golf resorts. Each of the Debtors is responsible for the development of a discrete portion of the overall project. The company and its affiliates filed for chapter 11 protection on May 10, 2008 (Bankr. E.D. Mich. Lead Case No. 08-54048) in order to prevent a foreclosure of its project in Telluride, Colorado. Judy B. Calton, Esq., at Honigman Miller Schwartz & Cohn, LLP, represents the Debtors. When West Galena Real Estate LLC filed its schedules, it listed total assets of $75,200,000 and total liabilities of $71,452,100. WILD EDIBLES: Tavern Cuts Biz Ties, Says Employee Rights Group -------------------------------------------------------------- Brandworkers International said in a statement that restaurant Tavern on the Green has stopped serving seafood from wholesaler and retailer, Wild Edibles, Inc., over concern for employee rights. Wild Edibles workers and their allies have been campaigning for almost a year to reclaim what they alleged as stolen overtime pay; to compel compliance with workplace laws including the right to support a labor union; and to win a more livable wage as well as a health care and retirement plan, according to Brandworkers. "A sustainable and responsible food system includes respect for workers' rights," said Daniel Gross, the founding director of Brandworkers, a non-profit organization providing legal and advocacy support to the Wild Edibles employees. "We are very pleased that a New York landmark like Tavern on the Green has disassociated itself from the labor rights violations at Wild Edibles," Mr. Gross said. Brandworkers International said that the Wild Edibles workers have vowed to continue the campaign until they win the respect they are seeking. When Wild Edibles workers demanded the overtime pay which had been illegally withheld from them and respect for the right to join a union, owner Richard Martin embarked on a campaign of retaliation including firing or forcing out eleven of the workers, according to Brandworkers International. Brandworkers International further noted that a federal judge ordered an injunction on Wild Edibles against further retaliation, which the company quickly proceeded to violate. The workers' lawyers have filed a motion asking the judge to find the company in contempt of court for not respecting the injunction, Brandworkers International said. In addition, Brandworkers International said that the National Labor Relations Board has issued two complaints against the company for interfering with the workers' efforts to form a union with the Industrial Workers of the World. According to Brandworkers International, Tavern on the Green joins a growing list of top restaurants that have dropped Wild Edibles over concern for workers' rights. Those restaurants include Pastis, Union Square Cafe, La Goulue, Mermaid Inn, Giorgione, Sushi Samba, One if by Land, Two if by Sea, China Grill, and Kittichai, Brandworkers International said. Brandworkers International is a non-profit organization that provides legal, advocacy, and organizing tools to retail and food employees. It claims that its Focus on the Food Chain initiative promotes worker justice along the food supply chain. It says that the initiative is providing support to twenty-four current and former Wild Edibles employees. Long Island City, New York-based Wild Edibles, Inc.-- http://www.wildedibles.com/-- sells seafood. On July 17, 2008, Wild Edibles filed for Chapter 11 bankruptcy protected with the United States Bankruptcy Court for the Southern District of New York (Bankr. S.D. N.Y. Case No. 08-12746). Marc A. Pergament, Esq., at Weinberg Gross & Pergament, LLP, represented the Debtor in its restructuring efforts. When it filed for protection, the Debtor listed $2,211,500 in total assets and $2,090,915 in total debts. WILLIAM HEROLD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: William W. Herold, III aka Billy Herold 2910 Hampton Place Court Plant City, FL 33566 Bankruptcy Case No.: 08-12177 Chapter 11 Petition Date: August 13, 2008 Court: Middle District of Florida (Tampa) Debtor's Counsel: David W. Steen, Esq. David W. Steen, PA 602 South Boulevard Tampa, FL 33606-2630 Tel: (813) 251-3000 Fax: (813) 251-3100 Email: dwslaw@yahoo.com Total Assets: $1,105,700 Total Debts: $3,382,310 A copy of the Debtor's list of its 20 Largest Unsecured Creditors is available at: http://bankrupt.com/misc/flmb08-12177.pdf * S&P Cuts 97 Ratings on US Synthetic CDOs at July Month-End Run ---------------------------------------------------------------- Standard & Poor's Ratings Services took rating actions on various U.S. synthetic collateralized debt obligation (CDO) transactions following the July month-end batch run: -- S&P placed 17 ratings on CreditWatch with negative implications; -- S&P lowered 97 ratings and removed 12 from CreditWatch negative and left one on CreditWatch negative; and -- S&P affirmed 40 ratings and removed them from CreditWatch negative. The CreditWatch negative placements reflect negative rating migration in the portfolios and the fact that the synthetic rated overcollateralization (SROC) ratios for the affected transactions had fallen below 100% as of the July month-end run; the downgrades affected classes that had SROC ratios below 100% as of the July month-end run and at a 90-day forward run; and the affirmations and CreditWatch negative removals affected classes that had SROC ratios at or over 100% at their current rating levels. RATINGS LIST ABACUS 2004-1 Ltd. Rating Class To From A AA AAA B A+ AA C BBB A- ABACUS 2004-2 Ltd. Rating Class To From A BBB+ AA B BB+ BBB+ C B+ BB+ D B- BB+ ABACUS 2005-1 CB1 Ltd. Rating Class To From B BBB+ A- C BB+ BBB D BB+ BBB- E-1 B+ BB+ E-2 B+ BB+ F CCC+ BB- G CCC- CCC+ ABACUS 2005-3 Ltd. Rating Class To From B AA- AA+/Watch Neg B Series 2 AA- AA+/Watch Neg C A+ AA-/Watch Neg C Series2 A+ AA-/Watch Neg D BBB- BBB+/Watch Neg D Series 2 BBB- BBB+/Watch Neg D Series 3 BBB- BBB+/Watch Neg E BB BBB-/Watch Neg ABACUS 2005-5 Ltd. Rating Class To From A-1 A+ AA+ ABACUS 2006-12 Ltd. Rating Class To From A-1 CCC+ BB- A-2 CCC B- B CCC- CCC+ ABACUS 2006-8 Ltd. Rating Class To From A-1 BB+ AA A-2 B+ A D CCC- B+ ABACUS 2006-NS1 Ltd. Rating Class To From D A+ AA-/Watch Neg F A- A/Watch Neg G BBB+ A-/Watch Neg H BBB BBB+/Watch Neg J BBB- BBB ABSpoke 2005-X Ltd. 2005-X Rating Class To From VFRN B+ BB- ABSpoke 2005-XA Ltd. 2005-XA Rating Class To From VFRN BBB BBB+ ABSpoke 2005-XII B Segregated Portfolio of SPGS SPC 2005-XII B Rating Class To From VFRN B+ BBB- AMP ABX 2006-1 Ltd. Rating Class To From Var Notes A- A-/Watch Neg ARLO VI Ltd. SABS 2006-5 Rating Class To From Notes CCC- CCC ARLO VI Ltd. SABS 2006-4 Rating Class To From Notes CCC- CCC+ ARLO VI Ltd. 2006 (Howell Park) Rating Class To From Notes CCC- CCC ARLO VI Ltd. 2006 (Hominy Hill) Rating Class To From Notes CCC- CCC ARLO VII Ltd. SABS 2007-1 Rating Class To From Notes CCC- CCC Buchanan SPC 2006-II Rating Class To From A2 CCC CCC+ Buchanan SPC 2006-III Rating Class To From A4 CCC- CCC+ Buchanan SPC 2006-I Rating Class To From A1J CCC+ B Calculus MABS Resecuritization Trust Series 2007-1 Rating Class To From Units CCC CCC+ Calculus MABS Resecuritization Trust Series 2007-2 Rating Class To From Units CCC CCC+ Calculus SCRE Trust Series 2006-11 Rating Class To From Trust Unit A- A Credit and Repackaged Securities Ltd. 2006-1 Rating Class To From Notes BB+/Watch Neg BB+ Credit Default Swap Swap Risk Rating - Protection Buyer, CDS Reference # Torino II Rating Class To From Tranche BBB+srb/Watch Neg BBB+srb Dallaglio CDO 2005-4 Ltd. Rating Class To From B CCC+ B+ Dunloe 2005-I Ltd Rating Class To From B B B+ C CCC CCC+ Eirles Two Ltd. 212 Rating Class To From 212 BBB- BBB Eirles Two Ltd. 208 Rating Class To From Series 208 A+ AA Eirles Two Ltd. 242-245 & 247 Rating Class To From Series 242 BB+ A Series 243 B- BB+ Series 244 CCC+ B+ Series 245 B+ BBB Series 247 B- BB+ ELM B.V. 98 Rating Class To From SecdCrLkd BBB/Watch Neg BBB Herald Ltd. 24 Rating Class To From 24 A- A-/Watch Neg Ixion PLC 4,5,6, & 7 Rating Class To From 4 CCC- CCC+ 5 CCC- B 6 CCC B+ 7 CCC- CCC+ Ixion PLC 9 & 11 Rating Class To From 9 CCC- CCC Ixion PLC SYRAH 2006-11 SERIES 16 Rating Class To From 16 CCC- CCC+ Ixion PLC SYRAH 2006-11 SERIES 17 Rating Class To From 17 CCC- CCC Ixion PLC SYRAH 2006-11 SERIES 18 Rating Class To From 18 CCC- CCC Ixion PLC Matrix 2007-1 Series 20 Rating Class To From A CCC- CCC H CCC- CCC Ixion PLC 33 Rating Class To From Notes BBB+ A Lakeview CDO SPC 2007-1 Rating Class To From A AAA AAA/Watch Neg B AA AA/Watch Neg C A A/Watch Neg Lakeview CDO SPC 2007-2 Rating Class To From Notes AA AA/Watch Neg Lakeview CDO SPC 2007-3 Rating Class To From Notes AA AA/Watch Neg Lakeview CDO SPC 2007-4 Rating Class To From Notes AA AA/Watch Neg Lehman Brothers Treasury Co. B.V. US$4,000,000 inflation-linked and credit-linked variable interest notes Rating Class To From Notes A/Watch Neg A+ Lunar Funding I Ltd. 12 Rating Class To From 12 A A/Watch Neg Magnolia Finance II PLC 2006-5A Rating Class To From A BB AA- Magnolia Finance II PLC 2006-5CG Rating Class To From CG CCC+ BBB- Magnolia Finance II PLC 2006-5CE Rating Class To From CE CCC+ BBB- Magnolia Finance II PLC 2006-5B Rating Class To From B CCC+ BBB+ Magnolia Finance II PLC 2006-5CU Rating Class To From CU CCC+ BBB- Magnolia Finance II PLC 2006-6B Rating Class To From Series B AA+/Watch Neg AA+ Magnolia Finance II PLC 2006-6C Rating Class To From Series C A+/Watch Neg A+ Magnolia Finance II PLC 2006-6D Rating Class To From Series D A/Watch Neg A Magnolia Finance II PLC 2006-5D2 Rating Class To From D2 CCC- CCC+ Magnolia Finance II PLC 2006-8C Rating Class To From Series C CCC- CCC Magnolia Finance II PLC 2006-8B Rating Class To From Series B CCC CCC+ Magnolia Finance II PLC 2006-9A Rating Class To From Notes CCC- CCC+ Magnolia Finance II PLC 2006-9B Rating Class To From Notes CCC- CCC Mill Reef SCDO 2005-1 Ltd. Rating Class To From A-2L CCC CCC+ Mistletoe ORSO Trust 3 Rating Class To From 5 Cr Link BBB+ BBB+/Watch Neg Morgan Stanley ACES SPC 2006-3 Rating Class To From IIA BBB+ BBB+/Watch Neg IIB BBB+ BBB+/Watch Neg IIC BBB+ BBB+/Watch Neg IID BBB+ BBB+/Watch Neg IIE BBB+ BBB+/Watch Neg IIF BBB+ BBB+/Watch Neg III B B/Watch Neg Morgan Stanley ACES SPC 2006-9 Rating Class To From IA A-/Watch Neg A- Morgan Stanley ACES SPC 2007-13 Rating Class To From IA AA- AA-/Watch Neg IIA AA- AA-/Watch Neg IIB AA- AA-/Watch Neg Morgan Stanley ACES SPC 2007-25 Rating Class To From IA AA AA/Watch Neg Morgan Stanley Managed ACES SPC 2005-1 Rating Class To From V B BB BB/Watch Neg Morgan Stanley Managed ACES SPC 2005-2 Rating Class To From V BB BB/Watch Neg Morgan Stanley Managed ACES SPC 2006-4 Rating Class To From II AA AA/Watch Neg Morgan Stanley Managed ACES SPC 2006-9 Rating Class To From SbJrSuprSr AAA AAA/Watch Neg North Street Referenced Linked Notes, 2005-7, Ltd. Rating Class To From A B+ BB B-1 B B+ C CCC- CCC PARCS Master Trust 2006-10 CARIBOU Rating Class To From TrustUnits AAA/Watch Neg AAA PARCS Master Trust 2007-3 CALVADOS Rating Class To From Trust Unit A/Watch Neg A PARCS Master Trust 2007-8 CALVADOS Rating Class To From Trust Unit AA-/Watch Neg AA- PARCS Master Trust 2007-10 CDX7 10Y 10-15 Rating Class To From Trust Unit AAA AAA/Watch Neg PARCS Master Trust 2007-18 Piedmont Rating Class To From Trust Unit AA-/Watch Neg AA- Primoris SPC Ltd F1-10 Rating Class To From Notes CCC/Watch Neg CCC Pyxis Master Trust 2007-28 POINT GREEN II Rating Class To From Units AA+/Watch Neg AA+ REVE SPC 45 Rating Class To From Notes A- A-/Watch Neg REVE SPC 2007-47 Rating Class To From Series 47 BBB BBB/Watch Neg Rutland Rated Investments LYNDEN 2006-1 (21) Rating Class To From A1-L A+ A+/Watch Neg Rutland Rated Investments BEDFORD 2006-1 (30) Rating Class To From A2-F A- A-/Watch Neg A3-F BBB+ BBB+/Watch Neg A3-L BBB+ BBB+/Watch Neg Rutland Rated Investments Millbrook 2006-4 (31) Rating Class To From A CCC- B- Rutland Rated Investments Millbrook 2006-4 (33) Rating Class To From C CCC- CCC Rutland Rated Investments Millbrook 2006-4 (32) Rating Class To From B CCC- CCC+ Seawall 2007-1 Ltd Rating Class To From E-2 BB-/Watch Neg BB- Series 2006-1 Segregated Portfolio of Stowe CDO SPC 2006-1 Rating Class To From A A- A-/Watch Neg SPGS SPC 2006-IA Rating Class To From Notes B BBB SPGS SPC 2006-IIC Rating Class To From Var Notes CCC- CCC+ SPGS SPC BALDWIN 2006-I Rating Class To From Notes B+ BBB SPGS SPC BALDWIN 2006-II Rating Class To From Notes B- BB SPGS SPC BALDWIN 2006-III Rating Class To From Notes CCC+ BB SPGS SPC BALDWIN 2006-IV Rating Class To From Notes CCC+ B+ SPGS SPC BALDWIN 2006-V Rating Class To From Notes CCC- B- SPGS SPC BALDWIN 2006-VI Rating Class To From A CCC- B- SPGS SPC BALDWIN 2006-VII Rating Class To From A-1 CCC+ BB A-2 CCC+ B+ STEERS Thayer Gate CDO Trust, Series 2006-6 Rating Class To From Trust Unit BB+ BB+/Watch Neg STRATA 2006-34 Ltd Rating Class To From Notes A-/Watch Neg A- Strata 2007-1 Ltd. Rating Class To From Notes AA-/Watch Neg AA- Strata Trust Series 2007-6 Rating Class To From Notes A- A-/Watch Neg TIERS Derby Synthetic CDO Floating Rate Credit Linked Trust 2007-13 Rating Class To From Certs AA- AA-/Watch Neg TIERS Derby Synthetic CDO Floating Rate Credit Linked Trust 2007-16 Rating Class To From 2007-16 AA- AA-/Watch Neg Toronto-Dominion Bank (The) Toronto-Dominion Bank CAD 263,860,000 Portfolio Credit Linked Notes due March 22, 2012 Rating Class To From PtflCdtLkd BBB- BBB-/Watch Neg Tribune Ltd. Series 46 Rating Class To From Series 46 AAA/Watch Neg AAA True North No. 2 (CDO) Ltd Rating Class To From A AA AA/Watch Neg True North No. 3 (CDO) Ltd Rating Class To From A AAA AAA/Watch Neg * S&P Cuts 31 Ratings on 4 CDO Deals to 'D' After Liquidations -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 31 classes of notes from four collateralized debt obligation (CDO) transactions, Octans II CDO Ltd., Preston CDO I Ltd., Neptune CDO IV Ltd., and Pinnacle Peak CDO I Ltd., to 'D' following the liquidation of their portfolio collateral. Preston CDO I Ltd., Neptune CDO IV Ltd., and Octans II CDO Ltd. are all hybrid CDOs backed predominantly by mezzanine residential mortgage-backed securities (RMBS), while Pinnacle Peak CDO I Ltd. is a cash flow CDO backed predominantly by high-grade RMBS. The four deals had previously experienced events of default (EODs) and, subsequently, the controlling noteholders had voted to accelerate the maturity of the notes and liquidate the collateral assets. The downgrades follow notice from the trustees for the deals that the liquidation of the portfolio assets is complete and that the available proceeds have been distributed to the noteholders. The trustees have indicated that the proceeds of the liquidation for all of the transactions were insufficient to pay down the balances of any of the notes in full. RATING ACTIONS Rating Transaction Class To From Neptune CDO IV Ltd. A-1 Dsrb CCsrb Neptune CDO IV Ltd. X D CC Neptune CDO IV Ltd. A-2 D CC Neptune CDO IV Ltd. B D CC Neptune CDO IV Ltd. C D CC Neptune CDO IV Ltd. D D CC Neptune CDO IV Ltd. E D CC Octans II CDO Ltd. A-1 Dsrp CCC+srp/Watch Neg Octans II CDO Ltd. A-2 D CCC-/Watch Neg Octans II CDO Ltd. A-3A D CCC-/Watch Neg Octans II CDO Ltd. A-3B D CCC-/Watch Neg Octans II CDO Ltd. B D CC Octans II CDO Ltd. C-1 D CC Octans II CDO Ltd. C-2 D CC Octans II CDO Ltd. D D CC Octans II CDO Ltd. X-1 D CC Octans II CDO Ltd. X-2 D CC Pinnacle Peak CDO I Ltd. A1M D CCC/Watch Neg Pinnacle Peak CDO I Ltd. A1Q D CCC/Watch Neg Pinnacle Peak CDO I Ltd. A2 D CC Pinnacle Peak CDO I Ltd. A3 D CC Pinnacle Peak CDO I Ltd. A4 D CC Pinnacle Peak CDO I Ltd. B D CC Pinnacle Peak CDO I Ltd. C D CC Preston CDO I Ltd. X D CCC-/Watch Neg Preston CDO I Ltd. A1S D CC Preston CDO I Ltd. A1J D CC Preston CDO I Ltd. A2 D CC Preston CDO I Ltd. A3 D CC Preston CDO I Ltd. B1 D CC Preston CDO I Ltd. B2 D CC * S&P Cuts Ratings on 64 Classes from 57 US RMBS to 'D' ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings to 'D' on 64 classes from 57 U.S. residential mortgage-backed securities (RMBS) transactions backed by closed-end second-lien mortgage collateral. "Specifically, we lowered our ratings on 14 classes to 'D' from 'CC', 44 classes to 'D' from 'CCC', and four classes to 'D' from 'B'. Additionally, we lowered our rating on class 2M-1 from Home Equity Mortgage Trust 2006-2 to 'D' from 'BB' and class B-3 from Terwin Mortgage Trust 2005-9HGS to 'D' from 'BB+'. Finally, we lowered our rating on one home equity line of credit (HELOC), class I-M-1 from Bear Stearns Second Lien Trust 2007-1's structure group 1, to 'D' from 'CCC'," S&P says. The downgrades reflect the deteriorating performance of the collateral pools as monthly net losses continue to significantly outpace monthly excess interest cash flows, resulting in the complete reduction of the overcollateralization (O/C) for these deals. Some of these transactions have already experienced a complete write-down to the principal balance of other subordinate classes over the past few months. The affected classes experienced principal write-downs during the July 2008 remittance period. As of the July 2008 distribution period, cumulative realized losses for the closed-end second-lien classes ranged from 3.89% (Terwin Mortgage Trust 2004-2SL) to 29.97% (Ace Securities Corp. Home Equity Loan Trust's series 2006-SL2) of the original principal balances, and total delinquencies for these classes ranged from 8.21% (Terwin Mortgage Trust 2004-2SL) to 44.80% (Ace Securities Corp. Home Equity Loan Trust's series 2006-SL2) of the current principal balances. Seasoning for these transactions ranged from 14 months (First Franklin Mortgage Loan Trust's series 2007-FFC) to 53 months (Terwin Mortgage Trust 2004-2SL). These transactions have outstanding pool factors ranging from approximately 5.14% (Terwin Mortgage Trust 2004-2SL) to 77.47% (American Home Mortgage Investment Trust 2006-3). As of the July 2008 distribution period, cumulative realized losses for structure group 1 (the HELOC class) from Bear Stearns Second Lien Trust 2007-1 were 17.33% of the original principal balance, and total delinquencies were 19.99% of the current principal balance. Seasoning for this transaction is 13 months, and structure group 1 has a current pool balance of 69.53%. "If delinquencies continue to translate into realized losses, we will likely take further negative rating actions on the outstanding classes from these transactions," S&P says. Subordination, O/C, and excess interest cash flow provide credit support for these transactions. The collateral for the closed-end second-lien transactions originally consisted of 30-year, fixed- rate, closed-end second-lien mortgage loans secured by one- to four-family residential properties. The collateral for the HELOC structure originally consisted of HELOC loans made under certain home equity revolving credit loan agreements secured by first- and second-lien mortgages on residential properties with initial draw periods of five, 10, or 15 years limited to interest-only payments, followed by a 10- or 15-year amortized repayment period. RATINGS LOWERED ACE Securities Corp. Home Equity Loan Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-SL1 M-4 004421RY1 D CCC 2006-ASL1 M-7 00442AAH6 D CCC 2006-SL1 M-4 004421VK6 D CCC 2006-SL2 M-2A 004421YD9 D CCC 2006-SL2 M-2B 004421YE7 D CCC 2006-SL3 M-2 004423AD1 D CCC 2006-SL4 M-4 00441WAG1 D CCC 2007-ASL1 M-5 00443MAG1 D CC 2007-SL1 M-3 00442FAE2 D CC Alliance Bancorp Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-S1 M-1 01853GAE0 D CC American Home Mortgage Investment Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-3 IV-M-4 026929BD0 D CC Bear Stearns Mortgage Funding Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-SL5 M-1 07401HAC6 D CCC 2007-SL1 M-2 07401PAD6 D CCC 2007-SL2 M-2 07401RAD2 D CCC Bear Stearns Second Lien Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-1 III-M-2 07401WAR0 D CC 2007-1 III-M-3 07401WBD0 D CC 2007-1 I-M-1 07401WAB5 D CCC 2007-SV1 B-4 07401UAM5 D CC C-BASS Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-SL1 B-2 1248MKAF2 D CC FFMLT Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2007-FFB-SS M-7 30248EAH1 D CC First Franklin Mortgage Loan Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-FFB M2 32028JAG4 D CCC 2007-FFA M-2 32027AAC3 D CC 2007-FFC M-3 32029HAF9 D CC GSAMP Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-S6 M-1 36245CAF9 D CCC Home Equity Mortgage Loan Asset-Backed Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-A M-5 43709UAF4 D CCC Home Equity Mortgage Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-1 B-1 225458DB1 D CCC 2005-5 M-5 225470RF2 D CCC 2006-1 M-5 225470XT5 D CCC 2006-1 M-6 225470XU2 D CCC 2006-2 1M-3 225470X40 D CCC 2006-2 2M-1 225470Y31 D BB 2006-3 M-2 436944AF9 D CCC Merrill Lynch Mortgage Investors Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-NCA B-3 59020UZX6 D CCC 2005-NCB B-2 59020UU45 D CCC 2005-SL3 B-1 59020UK61 D CCC 2006-SL1 B-1 59020U2R5 D CCC 2006-SL2 M-5 59021BAF3 D CCC 2007-SL1 M-5 59025AAF1 D CC 2007-SL1 M-6 59025AAG9 D CC Morgan Stanley Mortgage Loan Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-8SL M-6 61748HQQ7 D CCC 2006-10SL B-3 61749TAG9 D CCC 2006-14SL B-2 61749SAJ5 D CCC 2006-4SL M-3 61748HYF2 D CCC Nomura Asset Acceptance Corp. Alternative Loan Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2006-S4 M-3 65537DAE6 D CCC SACO I Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-10 II-M-5 785778NN7 D CCC 2005-10 I-M 785778NH0 D CCC 2006-2 I-M 785778PH8 D CCC 2006-3 M-3 785778QP9 D B 2006-9 M-4 78577RAE9 D CCC 2007-1 M-3 785814AE4 D CC 2007-2 M-3 78581NAE2 D CCC Structured Asset Securities Corp. Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2004-S3 M8 86359BC58 D CCC Structured Asset Securities Corp. Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-S1 M8 86359B4K4 D CCC Structured Asset Securities Corp. Mortgage Loan Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2005-S6 M7 86359DTX5 D CCC 2006-S1 M4 86359DXH5 D CCC 2006-S2 M4 86359FAG7 D CCC 2006-S3 M4 86359WAF2 D CCC 2006-S4 M6 86363AAG2 D CCC 2006-S4 M7 86363AAH0 D CCC Terwin Mortgage Trust Rating Transaction Class CUSIP To From ----------- ----- ----- -- ---- 2004-2SL B-3 881561DX9 D CCC 2005-11 II-M-3 881561A61 D B 2005-9HGS B-3 881561WX8 D BB+ 2006-4SL M-1 881561X33 D B 2006-6 I-M-1 8815612W3 D B 2006-HF-1 B-1 881561R97 D CCC * S&P Cuts 248 Ratings on 20 1st-Half 2007 Prime Jumbo RMBS Deals ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 248 classes from 20 residential mortgage-backed securities (RMBS) transactions backed by U.S. prime jumbo mortgage loan collateral issued in the first half of 2007. "We removed 150 of the lowered ratings from CreditWatch with negative implications, where they were placed primarily on May 22, 2008. In addition, we affirmed our ratings on 20 classes from these transactions and removed them from CreditWatch negative. Lastly, we affirmed our ratings on one series, RFMSI Series 2007- S2 Trust, that experienced no downgrades and removed them from CreditWatch negative," S&P says. "The downgrades reflect our opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given our current projected losses. We used the 1999 prime jumbo vintage as our benchmark default curve to forecast the performance of the 2007 vintage. The 1999 vintage experienced the most stress of any issuance year over the past 10 years (excluding recent years since 2005) in terms of foreclosures. We expect the losses in 2007 to significantly exceed those experienced in 1999; however, in our opinion, the timing of the losses, and therefore the shape of the loss curve, is more likely to be similar to that of 1999 than to any subsequent year. We calculated individual transaction projections by multiplying the current foreclosure amount (adjusted by delinquencies) by the rate of change that the foreclosure curve forecasted for the upcoming periods. In addition, we assumed that 100% of the 90-plus-day delinquent loans and 50% of the 60-day delinquent loans would be in foreclosure within five months and added this amount to the current foreclosure amount for transactions for which this form of analysis provided a forecast more consistent with the current delinquency performance trends. We calculated individual transaction projections by multiplying the current foreclosure amount by the rate of change that the foreclosure curve forecasted for the upcoming periods. Due to current market conditions, we are assuming that it will take approximately 18 months to liquidate loans in foreclosure and approximately eight months to liquidate loans categorized as real estate owned (REO). We are now assuming a loss severity of 30% for U.S. prime jumbo RMBS transactions. "Additionally, we assumed that the loans that are currently REO will be liquidated over the next eight months, and then we added the projected loss amounts from the REO liquidations to the projected losses from foreclosures. We estimated the lifetime projected losses by adding these projected losses to the actual losses that the transactions have experienced to date. "Our lifetime projected losses, as a percentage of the original pool balances, for these 20 U.S. RMBS transactions backed by prime jumbo collateral issued in 2007 are: Issuer Series Structure group Projected loss (%) ------ ------ --------------- ------------------ BofA 2007-C 5 1.18 BofA 2007-C M 5.86 BofA 2007-C X 0.65 BofA 2007-4 N 2.74 BofA 2007-4 S 0.63 Chase 2007-S1 one 2.28 Chase 2007-S4 one 2.36 Chase 2007-S5 one 2.11 CHL 2007-J1 one 4.28 CHL 2007-J3 one 4.65 CHL 2007-13 one 1.76 Citigroup 2007-2 one 2.24 CSMC 2007-4 one 1.90 First Horizon 2007-AR2 one 1.35 HSI 2007-AR1 one 3.03 HSI 2007-1 one 2.59 Merrill 2007-1 one 2.56 RFMSI 2007-SA3 one 2.60 RFMSI 2007-S2 one 0.99 RFMSI 2007-S6 I 1.42 RFMSI 2007-S6 II 1.11 Sequoia 2007-2 one 0.79 Sequoia 2007-2 two 2.03 WaMu 2007-HY1 3 0.28 WaMu 2007-HY1 L 2.68 WaMu 2007-HY1 M 2.01 WaMu 2007-HY2 3 1.96 WaMu 2007-HY2 L 2.06 WaMu 2007-HY3 3 1.03 WaMu 2007-HY3 4 1.07 WaMu 2007-HY3 L 4.03 To maintain a rating higher than 'B', a class had to absorb losses in excess of the base case assumption we used in our analysis. For example, one prime jumbo class may have to withstand 150% of our projected loss assumption in order to maintain a 'BB' rating, while a different class may have to withstand losses of approximately 200% of our base case loss assumption to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can generally withstand approximately 350% of our projected loss assumptions under our analysis. The rating affirmations reflect actual and projected credit enhancement percentages that we believe are sufficient to support the current ratings. Subordination provides credit support for the affected transactions. The underlying collateral for these deals consists of fixed- and adjustable-rate U.S. prime jumbo mortgage loans that are secured primarily by first liens on one- to four-family residential properties. To date, including the classes listed below and actions on both publicly and confidentially rated classes, we have resolved all but two (on two classes that were reclassified as Alternative-A collateral) of the CreditWatch placements affecting 170 classes of prime jumbo collateral from 21 U.S. RMBS prime jumbo transactions from the 2007 vintage. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. RATINGS LOWERED Banc of America Funding 2007-4 Trust Series 2007-4 Rating Class CUSIP To From ----- ----- -- ---- 4-A-1 05953YBR1 AA AAA 4-A-2 05953YBS9 AA AAA 5-A-1 05953YBT7 AA AAA 5-A-2 05953YBU4 AA AAA 5-A-3 05953YBV2 AA AAA 6-A-1 05953YBW0 AA AAA 7-A-1 05953YBX8 AA AAA 8-A-1 05953YBY6 AA AAA S-IO 05953YBZ3 AA AAA S-PO 05953YCA7 AA AAA S-B-1 05953YCF6 BBB AA S-B-2 05953YCG4 BB A S-B-3 05953YCH2 B BBB S-B-4 05953YCM1 CC BB S-B-5 05953YCN9 CC B+ Banc of America Funding 2007-C Trust Series 2007-C Rating Class CUSIP To From ----- ----- -- ---- X-B-1 059522BN1 AA- AA 5-B-5 059522BS0 CC B- Chase Mortgage Finance Trust Series 2007-S1 Series 2007-S1 Rating Class CUSIP To From ----- ----- -- ---- A-M 16163FAS4 B BB Chase Mortgage Finance Trust Series 2007-S5 Series 2007-S5 Rating Class CUSIP To From ----- ----- -- ---- 1-A4 161631AD8 BBB AAA 2-AX 161631BC9 BBB AAA CHL Mortgage Pass Through Trust 2007-J3 Series 2007-J3 Rating Class CUSIP To From ----- ----- -- ---- A-5 17025QAE7 A AAA A-6 17025QAF4 A AAA A-7 17025QAG2 A AAA X 17025QAL1 A AAA PO 17025QAM9 A AAA M 17025QAP2 CCC B B-1 17025QAQ0 CC CCC CHL Mortgage Pass-Through Trust 2007-13 Series 2007-13 Rating Class CUSIP To From ----- ----- -- ---- A-8 17025JAH6 BBB AAA Citigroup Mortgage Loan Trust 2007-2 Series 2007-2 Rating Class CUSIP To From ----- ----- -- ---- XS 17310SAG2 BBB AAA PO 17310SAH0 BBB AAA HSI Asset Loan Obligation Trust 2007-1 Series 2007-1 Rating Class CUSIP To From ----- ----- -- ---- I-IO 40431TAB7 BBB AAA II-A-2 40431TAD3 BBB AAA II-A-3 40431TAE1 BBB AAA II-A-5 40431TAG6 BBB AAA II-A-7 40431TAJ0 BBB AAA II-IO 40431TAR2 BBB AAA III-A-2 40431TAT8 BBB AAA III-A-3 40431TAU5 BBB AAA III-IO 40431TAZ4 BBB AAA A-PO 40431TBA8 BBB AAA A-X 40431TBB6 BBB AAA B-1 40431TBC4 B BB B-2 40431TBD2 CCC B B-3 40431TBE0 CC CCC HSI Asset Loan Obligation Trust 2007-AR1 Series 2007-AR1 Rating Class CUSIP To From ----- ----- -- ---- II-A-1 40431LAB4 A AAA III-A-1 40431LAD0 A AAA IV-A-1 40431LAF5 A AAA Merrill Lynch Mortgage Backed Securities Trust Series 2007-1 Series 2007-1 Rating Class CUSIP To From ----- ----- -- ---- I-A-1 59024NAA5 AA AAA II-A-1 59024NAC1 AA AAA RFMSI Series 2007-S6 Trust Series 2007-S6 Rating Class CUSIP To From ----- ----- -- ---- I-A-14 762009AP3 AA AAA II-A-1 762009AY4 AA AAA II-A-2 762009AZ1 AA AAA II-A-3 762009BA5 AA AAA II-A-6 762009BD9 AA AAA II-A-7 762009BE7 AA AAA II-A-8 762009BF4 AA AAA II-A-9 762009BG2 AA AAA II-A-11 762009BJ6 AA AAA II-A-13 762009BL1 AA AAA II-A-14 762009BM9 AA AAA II-A-15 762009BN7 AA AAA RFMSI Series 2007-SA3 Trust Series 2007-SA3 Rating Class CUSIP To From ----- ----- -- ---- IV-A 74958TAK9 BB AAA M-1 74958TAN3 CCC B M-3 74958TAQ6 CC CCC Sequoia Mortgage Trust 2007-2 Series 2007-2 Rating Class CUSIP To From ----- ----- -- ---- 2-B1 81744LAR5 B BB 2-B2 81744LAS3 CCC B WaMu Mortgage Pass-Through Certificates Series 2007-HY1 Trust Series 2007-HY1 Rating Class CUSIP To From ----- ----- -- ---- 1-A1 92925VAA8 AA AAA 2-A1 92925VAC4 AA AAA 2-A2B 92925VAE0 AA AAA 2-A3 92925VAF7 BB AAA L-B-1 92925VAR1 B BB L-B-2 92925VAS9 CCC B L-B-3 92925VAT7 CC CCC 3-B-4 92925VBE9 B BB 4-A2 92925VAN0 A AAA 5-A2 92925VAQ3 A AAA M-B-1 92925VAX8 BB A+ M-B-2 92925VAY6 B BBB- M-B-3 92925VAZ3 CCC B M-B-4 92925VBH2 CC CCC WaMu Mortgage Pass-Through Certificates Series 2007-HY2 Trust Series 2007-HY2 Rating Class CUSIP To From ----- ----- -- ---- 1-A2 92926UAB7 BBB AAA 2-A3 92926UAE1 BBB AAA L-B-1 92926UAH4 BB AA L-B-2 92926UAJ0 B BBB L-B-3 92926UAK7 CCC BB L-B-4 92926UAQ4 CC CCC WaMu Mortgage Pass-Through Certificates Series 2007-HY3 Series 2007-HY3 Rating Class CUSIP To From ----- ----- -- ---- 1-A1 933634AA5 BBB AAA 2-A1 933634AC1 AA AAA L-B-1 933634AL1 CCC B L-B-2 933634AM9 CC CCC 3-B-1 933634AP2 BBB AA 3-B-2 933634AQ0 B BBB- 3-B-3 933634AR8 CCC B 3-B-4 933634AZ0 CC CCC 4-B-1 933634AS6 BBB AA 4-B-2 933634AT4 BB BBB+ 4-B-3 933634AU1 B BB 4-B-4 933634BC0 CCC B RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE Banc of America Funding 2007-4 Trust Series 2007-4 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 05953YAU5 BBB AAA/Watch Neg 2-A-1 05953YAW1 BBB AAA/Watch Neg 2-A-2 05953YAX9 BBB AAA/Watch Neg 2-A-4 05953YAZ4 BBB AAA/Watch Neg 2-A-5 05953YBA8 BBB AAA/Watch Neg 2-A-6 05953YBB6 BBB AAA/Watch Neg 2-A-8 05953YBD2 BBB AAA/Watch Neg 2-A-9 05953YBE0 BBB AAA/Watch Neg 2-A-11 05953YBG5 BBB AAA/Watch Neg 2-A-13 05953YBJ9 BBB AAA/Watch Neg 2-A-14 05953YBK6 BBB AAA/Watch Neg 2-A-15 05953YBL4 BBB AAA/Watch Neg 3-A-2 05953YBN0 BBB AAA/Watch Neg 3-A-3 05953YBP5 BBB AAA/Watch Neg Chase Mortgage Finance Trust Series 2007-S1 Series 2007-S1 Rating Class CUSIP To From ----- ----- -- ---- A-2 16163FAB1 BBB AAA/Watch Neg A-3 16163FAC9 BBB AAA/Watch Neg A-5 16163FAE5 BBB AAA/Watch Neg A-6 16163FAF2 BBB AAA/Watch Neg A-7 16163FAG0 BBB AAA/Watch Neg A-9 16163FAJ4 BBB AAA/Watch Neg A-10 16163FAK1 BBB AAA/Watch Neg A-11 16163FAL9 BBB AAA/Watch Neg A-12 16163FAM7 BBB AAA/Watch Neg A-13 16163FAN5 BBB AAA/Watch Neg Chase Mortgage Finance Trust Series 2007-S4 Series 2007-S4 Rating Class CUSIP To From ----- ----- -- ---- A-9 161629AJ9 BBB AA+/Watch Neg Chase Mortgage Finance Trust Series 2007-S5 Series 2007-S5 Rating Class CUSIP To From ----- ----- -- ---- 1-A2 161631AB2 BBB AAA/Watch Neg 1-A3 161631AC0 BBB AAA/Watch Neg 1-A5 161631AE6 BBB AAA/Watch Neg 1-A6 161631AF3 BBB AAA/Watch Neg 1-A7 161631AG1 BBB AAA/Watch Neg 1-A9 161631AJ5 BBB AAA/Watch Neg 1-A10 161631AK2 BBB AAA/Watch Neg 1-A12 161631AM8 BBB AAA/Watch Neg 1-A16 161631AR7 BBB AAA/Watch Neg 1-A17 161631AS5 BBB AAA/Watch Neg 1-A18 161631AT3 BBB AAA/Watch Neg 1-A21 161631AW6 BBB AAA/Watch Neg 2-A1 161631AZ9 BBB AAA/Watch Neg 2-A2 161631BA3 BBB AAA/Watch Neg 2-A3 161631BB1 BBB AAA/Watch Neg CHL Mortgage Pass-Through Trust 2007-J1 Series 2007-J1 Rating Class CUSIP To From ----- ----- -- ---- 1-A-1 12669MAA6 BB AAA/Watch Neg 2-A-1 12669MAB4 BB AAA/Watch Neg X 12669MAC2 BB AAA/Watch Neg PO 12669MAD0 BB AAA/Watch Neg CHL Mortgage Pass Through Trust 2007-J3 Series 2007-J3 Rating Class CUSIP To From ----- ----- -- ---- A-1 17025QAA5 BB AAA/Watch Neg A-2 17025QAB3 BB AAA/Watch Neg A-3 17025QAC1 BB AAA/Watch Neg A-4 17025QAD9 BB AAA/Watch Neg A-8 17025QAH0 BB AAA/Watch Neg A-9 17025QAJ6 BB AAA/Watch Neg A-10 17025QAK3 BB AAA/Watch Neg A-11 17025QAW7 BB AAA/Watch Neg A-12 17025QAX5 BB AAA/Watch Neg A-13 17025QAY3 BB AAA/Watch Neg A-14 17025QAZ0 BB AAA/Watch Neg A-15 17025QBA4 BB AAA/Watch Neg A-16 17025QBB2 BB AAA/Watch Neg A-17 17025QBC0 BB AAA/Watch Neg CHL Mortgage Pass-Through Trust 2007-13 Series 2007-13 Rating Class CUSIP To From ----- ----- -- ---- A-1 17025JAA1 BBB AAA/Watch Neg A-3 17025JAC7 BBB AAA/Watch Neg A-4 17025JAD5 A AAA/Watch Neg A-5 17025JAE3 BBB AAA/Watch Neg A-6 17025JAF0 BBB AAA/Watch Neg A-9 17025JAJ2 BBB AAA/Watch Neg A-10 17025JAK9 BBB AAA/Watch Neg A-11 17025JAL7 BBB AAA/Watch Neg A-12 17025JAM5 BBB AAA/Watch Neg A-14 17025JAP8 BBB AAA/Watch Neg A-15 17025JAQ6 BBB AAA/Watch Neg Citigroup Mortgage Loan Trust 2007-2 Series 2007-2 Rating Class CUSIP To From ----- ----- -- ---- 1-A1 17310SAA5 BBB AAA/Watch Neg 1-A2 17310SAB3 BBB AAA/Watch Neg 1-A2A 17310SAC1 BBB AAA/Watch Neg 1-A3 17310SAD9 BBB AAA/Watch Neg 1-A4 17310SAE7 BBB AAA/Watch Neg 2-A 17310SAF4 BBB AAA/Watch Neg CSMC Mortgage Backed Trust 2007-4 Series 2007-4 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 126379AB2 A AAA/Watch Neg 1-A-4 126379AD8 A AAA/Watch Neg 1-A-6 126379BJ4 A AAA/Watch Neg 1-A-7 126379BK1 A AAA/Watch Neg 1-A-8 126379BL9 A AAA/Watch Neg 1-A-9 126379BM7 A AAA/Watch Neg 1-A-10 126379BN5 A AAA/Watch Neg 1-A-12 126379BU9 A AAA/Watch Neg 2-A-1 126379AF3 A AAA/Watch Neg 2-A-3 126379AH9 A AAA/Watch Neg 2-A-4 126379AJ5 A AAA/Watch Neg 2-A-5 126379AK2 A AAA/Watch Neg 3-A-2 126379AM8 A AAA/Watch Neg 3-A-3 126379AN6 A AAA/Watch Neg 3-A-4 126379AP1 A AAA/Watch Neg 3-A-5 126379AQ9 A AAA/Watch Neg 3-A-6 126379AR7 A AAA/Watch Neg 3-A-7 126379AS5 A AAA/Watch Neg 3-A-9 126379AU0 A AAA/Watch Neg 4-A-1 126379AV8 A AAA/Watch Neg 4-A-3 126379BR6 A AAA/Watch Neg 5-A-1 126379AW6 A AAA/Watch Neg 5-A-3 126379BT2 A AAA/Watch Neg First Horizon Mortgage Pass-Through Trust 2007-AR2 Series 2007-AR2 Rating Class CUSIP To From ----- ----- -- ---- I-A-1 32055GAA9 A AAA/Watch Neg I-A-3 32055GAC5 A AAA/Watch Neg II-A-1 32055GAE1 A AAA/Watch Neg III-A-1 32055GAF8 A AAA/Watch Neg III-A-3 32055GAH4 A AAA/Watch Neg HSI Asset Loan Obligation Trust 2007-1 Series 2007-1 Rating Class CUSIP To From ----- ----- -- ---- I-A-1 40431TAA9 BBB AAA/Watch Neg II-A-1 40431TAC5 BBB AAA/Watch Neg II-A-4 40431TAF8 BBB AAA/Watch Neg II-A-6 40431TAH4 BBB AAA/Watch Neg II-A-8 40431TAK7 BBB AAA/Watch Neg II-A-9 40431TAL5 BBB AAA/Watch Neg II-A-10 40431TAM3 BBB AAA/Watch Neg II-A-11 40431TAN1 BBB AAA/Watch Neg II-A-12 40431TAP6 BBB AAA/Watch Neg II-A-13 40431TAQ4 BBB AAA/Watch Neg III-A-1 40431TAS0 BBB AAA/Watch Neg III-A-4 40431TAV3 BBB AAA/Watch Neg III-A-5 40431TAW1 BBB AAA/Watch Neg III-A-6 40431TAX9 BBB AAA/Watch Neg III-A-7 40431TAY7 BBB AAA/Watch Neg HSI Asset Loan Obligation Trust 2007-AR1 Series 2007-AR1 Rating Class CUSIP To From ----- ----- -- ---- I-A-1 40431LAA6 BB AAA/Watch Neg II-A-2 40431LAC2 BB AAA/Watch Neg III-A-2 40431LAE8 BB AAA/Watch Neg IV-A-2 40431LAG3 BB AAA/Watch Neg Merrill Lynch Mortgage Backed Securities Trust Series 2007-1 Series 2007-1 Rating Class CUSIP To From ----- ----- -- ---- 1-A-2 59024NAB3 BB AAA/Watch Neg II-A-2 59024NAD9 BB AAA/Watch Neg RFMSI Series 2007-S6 Trust Series 2007-S6 Rating Class CUSIP To From ----- ----- -- ---- I-A-1 762009AA6 AA AAA/Watch Neg I-A-2 762009AB4 AA AAA/Watch Neg I-A-3 762009AC2 AA AAA/Watch Neg I-A-5 762009AE8 AA AAA/Watch Neg I-A-8 762009AH1 AA AAA/Watch Neg I-A-9 762009AJ7 AA AAA/Watch Neg I-A-10 762009AK4 AA AAA/Watch Neg I-A-11 762009AL2 AA AAA/Watch Neg I-A-12 762009AM0 AA AAA/Watch Neg I-A-13 762009AN8 AA AAA/Watch Neg I-A-15 762009AQ1 AA AAA/Watch Neg I-A-18 762009AT5 AA AAA/Watch Neg I-A-19 762009AU2 AA AAA/Watch Neg I-A-20 762009AV0 AA AAA/Watch Neg RFMSI Series 2007-SA3 Trust Series 2007-SA3 Rating Class CUSIP To From ----- ----- -- ---- I-A 74958TAA1 BB AAA/Watch Neg II-A-2 74958TAC7 BB AAA/Watch Neg III-A-3 74958TAH6 BB AAA/Watch Neg Sequoia Mortgage Trust 2007-2 Series 2007-2 Rating Class CUSIP To From ----- ----- -- ---- 1-A1 81744LAA2 AA AAA/Watch Neg 1-A3 81744LBA1 AA AAA/Watch Neg 2A-A1 81744LAL8 BBB AAA/Watch Neg 2B-A1 81744LAN4 BBB AAA/Watch Neg WaMu Mortgage Pass-Through Certificates Series 2007-HY1 Trust Series 2007-HY1 Rating Class CUSIP To From ----- ----- -- ---- 1-A2 92925VAB6 BB AAA/Watch Neg 2-A4 92925VAG5 BB AAA/Watch Neg WaMu Mortgage Pass-Through Certificates Series 2007-HY2 Trust Series 2007-HY2 Rating Class CUSIP To From ----- ----- -- ---- 3-A2 92926UAG6 A AAA/Watch Neg WaMu Mortgage Pass-Through Certificates Series 2007-HY3 Series 2007-HY3 Rating Class CUSIP To From ----- ----- -- ---- 1-A2 933634AB3 B AAA/Watch Neg 2-A2 933634AD9 B AAA/Watch Neg RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE Chase Mortgage Finance Trust Series 2007-S4 Series 2007-S4 Rating Class CUSIP To From ----- ----- -- ---- A-4 161629AD2 AAA AAA/Watch Neg A-8 161629AH3 AAA AAA/Watch Neg A-12 161629AM2 AAA AAA/Watch Neg Chase Mortgage Finance Trust Series 2007-S5 Series 2007-S5 Rating Class CUSIP To From ----- ----- -- ---- 1-A11 161631AL0 AAA AAA/Watch Neg CSMC Mortgage Backed Trust 2007-4 Series 2007-4 Rating Class CUSIP To From ----- ----- -- ---- 1-A-5 126379AE6 AAA AAA/Watch Neg 1-A-11 126379BP0 AAA AAA/Watch Neg 3-A-8 126379AT3 AAA AAA/Watch Neg RFMSI Series 2007-S2 Trust Series 2007-S2 Rating Class CUSIP To From ----- ----- -- ---- A-1 749583AA8 AAA AAA/Watch Neg A-2 749583AB6 AAA AAA/Watch Neg A-3 749583AC4 AAA AAA/Watch Neg A-4 749583AD2 AAA AAA/Watch Neg A-5 749583AE0 AAA AAA/Watch Neg A-8 749583AH3 AAA AAA/Watch Neg A-9 749583AJ9 AAA AAA/Watch Neg A-10 749583AK6 AAA AAA/Watch Neg A-11 749583AW0 AAA AAA/Watch Neg A-12 749583AX8 AAA AAA/Watch Neg A-13 749583AY6 AAA AAA/Watch Neg A-14 749583AZ3 AAA AAA/Watch Neg RFMSI Series 2007-SA3 Trust Series 2007-SA3 Rating Class CUSIP To From ----- ----- -- ---- III-A-4 74958TAJ2 AAA AAA/Watch Neg * S&P Says US Auto Makers Driving Weakest Links' Debt Volume ------------------------------------------------------------ Through Aug. 11, 2008, 52 companies have defaulted, affecting debt worth $41.26 billion, said an article published by Standard & Poor's. The article -- which is titled "Global Bond Markets� Weakest Links And Monthly Default Rates (Premium)" -- says that the rise in defaults in 2008 is in sharp contrast with trends in prior years, where only 22 defaults were recorded in all of 2007 and 30 in 2006. Through the first half of 2008, defaults have increased significantly in the U.S. but remain scarce elsewhere. The 12- month-trailing global corporate speculative-grade bond default rate increased to 1.79% in July from 1.44% in June, remaining below its long-term (1981-2007) average of 4.35% for 54 consecutive months. The U.S. speculative-grade default rate continued to increase, reaching 2.37% in July from 1.92% in June and a 25-year low of 0.97% at the end of 2007. The default rate in Europe increased to 0.49% from 0%, while the emerging markets default rate held steady at 0.17% for the fifth consecutive month. "Our most recent mean baseline 12-month-forward U.S. speculative- grade default rate forecast is 4.9%," noted Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. "This is a sharp increase from a 25-year low of 0.97% recorded at the end of 2007." Globally, weakest links have increased for the sixth consecutive month to 156 as of Aug. 11. By par amount, weakest links have combined rated debt worth $352.08 billion, a marked increase from last month's $125.75 billion, owing largely to the inclusion of the three large U.S. auto makers--Ford, GM, and Chrysler-- following their downgrades in July. Weakest links are defined as issuers rated 'B-' or lower with either a negative outlook or with ratings on CreditWatch with negative implications and are at a higher risk of default. * S&P Says CMBS Delinquency Rate Slightly Better Thus Far --------------------------------------------------------- Halfway through 2008, the delinquency rate for rated North American commercial mortgage-backed securities (CMBS) was slightly better than Standard & Poor's Ratings Services had anticipated at year-end 2007. According to a recent report, the delinquency rate, which stood at 0.47%, benefited from an increase in loan resolutions and a slowdown in new delinquencies during the quarter. "In addition, good maturity refinancing activity to date has positively influenced credit performance and mitigated a spike in delinquencies," said credit analyst Larry Kay, a director in Standard & Poor's CMBS Surveillance group, adding that 94% of the fixed-rate loans that were slated to mature in the second quarter paid off. Despite the favorable delinquency activity this quarter, the road ahead is not without challenges. In the recent CMBS Quarterly Insights report, "An Inside Look At Floating-Rate Loan Performance," net cash flow for more than 50% of floating-rate CMBS collateral evaluated on an "as-is" basis has declined since issuance. "We're keeping a watchful eye on the loans in our rated floating-rate deals after we noticed declines in net cash flow when reviewing year-end 2007 financial statements," said credit analyst Eric Thompson, head of Standard & Poor's CMBS Surveillance group. "Our concerns pertain primarily to the 2006 and 2007 vintage deals, and we have increased our scrutiny on loan performance in transactions issued in these two years." Even though the rate of growth of CMBS delinquencies slowed in second-quarter 2008, negative rating activity spiked, largely due to an increase in downgrades on conduit transactions issued in 2005 and 2006. The lowered ratings were prompted in part by S&P's observation of declining debt service coverage ratios and an increase in specially serviced loans. Much of the focus on these transactions stemmed from S&P's recent effort to supplement its ongoing surveillance process with comprehensive reviews of transactions issued between 2005 and 2007. S&P initiated this effort in conjunction with its "Scenario Analysis: Study Assesses The Resilience Of Standard & Poor's Rated U.S. CMBS" report, published May 7, 2008. * Loan Covenants Snag Retailers' & Restaurants' Credit, S&P Says ---------------------------------------------------------------- Covenant compliance is an increasingly important consideration in assessing the credit quality and liquidity positions of highly leveraged companies in the retail and restaurant sectors, says a report published by Standard & Poor's Ratings Services, titled "Restaurants And Retailers Face Difficulties In Complying With Lending Covenants." Brief case studies on 12 restaurants and retailers are provided in the article. "Borrowers' access to the credit markets has largely disappeared, and more than 70% of rated retail and restaurant issuers are subject to compliance with periodic financial covenants," said Standard & Poor's credit analyst Ana Lai. "Many of these issuers have onerous debt burdens and face increasing risk of covenant breaches brought on by worse-than-expected operating performance and increasingly restrictive covenants." Standard & Poor's has public ratings on 128 retail and restaurant issuers, with more than 40% rated in the 'B' category. The bulk of these ratings are the result of leveraged buyouts and aggressive debt-funded recapitalizations over the past few years. "As operating income declines and credit-protection measures weaken, headroom under many speculative-grade issuers' covenants has narrowed," Ms. Lai said. "In many cases, the capital structures of issuers in the 'B' category were put in place during a very debtor-friendly environment, when liquidity was abundant and credit terms were favorable." Case studies for VICORP Restaurants Inc., Perkins & Marie Callender's Inc., Caribbean Restaurants LLC., Real Mex Restaurants Inc., Uno Restaurant Holdings Corp., Sagittarius Restaurants LLC, MAPCO Express Inc., Oriental Trading Co. Inc., BCBG Max Azria Group Inc., Mothers Work Inc., Roundy's Supermarket Inc., and El Pollo Loco Inc. are included in the report. * Speculative-Grade Firms Fall as Defaults Rise, S&P Article Says ----------------------------------------------------------------- The U.S. rating population shifted back to an investment-grade majority in July, said an article published by Standard & Poor's. The article -- which is titled "U.S. Ratings Distribution: A Swing Back Toward Investment Grade (Premium)" -- says that currently, speculative-grade firms account for 49.8% of the rated population in the U.S., down from 50.1% in June and 51.2% at the end of 2007. "The shift stems from an increase in defaults and movements to 'NR' as well as a slowdown in the number of new entities with a speculative-grade rating," explained Diane Vazza, head of Standard & Poor's Global Fixed Income Research Group. The nonfinancial ratings distribution remains solidly speculative grade, with 63% of entities rated speculative grade and 42% rated below 'BB-'. Financials are predominantly investment grade at 87%. There are 54 (6.8%) financial entities rated below 'BB-'. "The economy is expected to weaken in the coming quarters," Ms. Vazza added, "so we expect rating actions and defaults to continue to rise. Indeed, forward-looking credit metrics based on outlooks and ratings on CreditWatch show that the percentage for firms with a negative bias is elevated, which foretells of future downgrade pressure." Currently, 35% of firms with a speculative-grade rating and 18% of firms with an investment-grade rating have a negative outlook or ratings on CreditWatch with negative implications. If profits fall with the weaker economic environment, S&P foresees a continued slide in credit quality, with downgrades outpacing upgrades in both investment grade and high yield as well as an increase in the trailing-12-month speculative-grade default rate to 4.9% over the next 12 months. * Bankruptcy Filings Up Two-Folds in July and August ---------------------------------------------------- The Deal indicates that bankruptcy filings of Debtors with $10 million in assets or debts have doubled compared to last years' figures. Data compiled by BankruptcyInsider.com has shown that at least 15 debtors with at least $10 million in assets or debts have filed for Chapter 11 in the first 13 days of August alone, Ben Fidler of The Deal reports. Mr. Fidler adds that in July, 64 debtors with $10 million assets or debts fell under the bankruptcy trap. According to The Wall Street Journal, July was the hottest month for bankruptcy filings since the new bankruptcy laws took effect nearly three years ago. The Journal, citing the Automated Access to Court Electronic Records, says that in July, 5,664 businesses sought to liquidate or restructure under bankruptcy protection, the highest monthly total since Congress' overhaul of the Bankruptcy Code took effect in October 2005. AACER's data show that this is only the third time in the past few years that the monthly total has topped 5,000, WSJ adds. The Deal, citing BankruptcyInsider.com, says that there were nine filings between Aug. 1 and Aug. 13 and a total of 21 during the month of July. The Deal relates that it was last summer that the first bankruptcies connected to the subprime mortgage crisis were seen. There was Alliance Bancorp. (July 13, 2007), American Home Mortgage Investment Corp. (Aug. 6, 2007), Homebanc Corp. (Aug. 9, 2007), Aegis Mortgage Corp. (Aug. 13, 2007), Sentinel Management Group Inc. (Aug. 17, 2007) and First Magnus Financial Corp. (Aug. 21, 2007), all mortgage lenders, The Deal points out. This summer, The Deal relates, the trouble has spread across all types of sectors, from auto parts to restaurant owners to homebuilders to retailers. The largest, The Deal notes, include Atlantis Plastics Inc. (Aug. 10), Ascendia Brands Inc. (Aug. 5), Boscov's Inc. (Aug. 4), WCI Communities Inc. (Aug. 4), S&A Restaurant Corp. (July 29), SemGroup LP (July 22), American Color Graphics Inc. (July 15), and Syntax-Brillian Corp. (July 8). July's new business bankruptcies marked a 57% increase from the 3,611 business filings in July 2007, WSJ points out. WSJ states that retail remains one of the hard-hit sectors, with such companies as Steve & Barry's and Mervyn's LLC grabbing headlines last month when they filed for bankruptcy. Smaller retailers such as CMT America a, WSJ adds. Chapter 11 filings, AACER's data show, continue to climb, WSJ adds. The 786 businesses and individuals who sought Chapter 11 protection last month is the highest monthly total so far this year, a 12% increase from the 699 Chapter 11 filings in January, WSJ indicates. Now, according to The Deal, credit crisis isn't the only reason that companies cite for their bankruptcy filings, other factors include high price of gas and a drop in consumer spending. * Bankruptcy Filings in W.D. North Carolina Up More than 11% in H2 ------------------------------------------------------------------ Kirsten Valle of News & Observer (N.C.) reports that basing on figures from the district bankruptcy administrator's office, there were 3,122 bankruptcy filings in the Western District of North Carolina from January through June, up more than 11 percent over the same period last year. Chapter 7 filings were up 17.5 percent the first six months of the year, the report said. Chapter 7 filings were up 34 percent the first quarter even after a 2005 law made filing for bankruptcy more difficult, according to the report. The American Bankruptcy Institute's figures on bankruptcy at the national level show filings were up more than 26 percent in the first quarter this year over the same period last year. Data from the American Bankruptcy Institute further revealed that business bankruptcies were up to 8,713 in the first quarter nationwide, up almost 39 percent from the first quarter of 2007 and more than double the number of filings in the first quarter of 2006, according to the report. Chip Ford, a partner in the bankruptcy practice at Parker Poe Adams & Bernstein, told News & Observer that in Charlotte, more and more recent cases have involved developers and homebuilders who have filed for bankruptcy protection to prevent or delay foreclosure. Experts predict a continued rise in personal and business filings this fall and into the next year or two, even if the economy starts to turn around before then. * Weil Gotshal Appoints Michael J. Lyle as Managing Partner ----------------------------------------------------------- Weil, Gotshal & Manges LLP appointed Michael J. Lyle as managing partner of its Washington, D.C. office. Mr. Lyle, who assumes the managing partner title on Oct. 1, 2008, will continue to co-head the firm's Products Liability and Mass Tort litigation practice. He is replacing David R. Berz, an authority on U.S. and international environmental law, who is returning to full-time duty as head of the firm's Environmental practice. Mr. Berz also will be devoting more time to his pro bono work and an expanding role as head of the firm's Green Initiative. "With [Mr.] Lyle, we have the ideal successor to [Mr.] Berz, who has played a remarkable role in the progress of the Washington office over many years," Stephen J. Dannhauser, Weil Gotshal chairman, said. "We are confident that Mike will be able to continue our efforts to build and diversify our practice in Washington." Mr. Lyle has represented clients in a broad spectrum of industries ranging from pharmaceuticals, genetic research, industrial chemicals and automotive products to high performance fiber, tires, electrical equipment and food products. "I look forward to the opportunity to build on what David has accomplished here, and to take Weil Gotshal's Washington presence to the next level, in terms of our practices, our recruiting, and our outstanding reputation for community service and commitment," Mr. Lyle commented. "With the growth we've seen over just the past couple of years, we believe this will be an exciting time for Weil Gotshal in Washington." In addition to his products liability and mass tort experience, Mr. Lyle has provided advice and counsel in areas such as congressional investigations, constitutional law, federal procurement and contracts, and appropriations law and ethics, well as corporate crisis management. Weil Gotshal opened its Washington, D.C. office in 1975 as its first domestic office outside of New York. In addition to Products Liability and Environmental attorneys, the office houses lawyers focused in practice areas ranging from Antitrust and Patent Litigation to International Trade, SEC Disclosure and Securities Regulation, Bankruptcy and Commercial Litigation and Tax. Resident in the office are 30 partners and 80 attorneys overall. The office is the firm's second largest domestically. About Weil Gotshal & Manges Headquartered in New York, Weil Gotshal & Manges LLP -- http://www.weil.com/-- is a law firm of 1,300 lawyers, including more than 300 partners. Weil Gotshal has offices in Austin, Beijing, Boston, Budapest, Dallas, Frankfurt, Hong Kong, Houston, London, Miami, Munich, Paris, Prague, Providence, Shanghai, Silicon Valley, Warsaw, Washington DC and Wilmington. * Thompson Hine Adds Associates for BL and C&P Finance Practice --------------------------------------------------------------- Catharine Zurbrugg and Nelson Crichton have joined the law firm Thompson Hine LLP as associates in the firm's Cleveland office. Mr. Zurbrugg joins the firm's Business Litigation practice group; Mr. Crichton joins the firm's Commercial & Public Finance practice. Prior to joining Thompson Hine, Ms. Zurbrugg worked as an associate at Orrick Herrington & Sutcliff LLP. Her legal experience includes auditor liability actions, bankruptcy litigation, government and internal investigations, counseling clients regarding electronic discovery issues and litigation of complex commercial disputes. She received her J.D. from New York University School of Law and her B.A. in political science, summa cum laude, from Mount Union College. Ms. Zurbrugg is not admitted to practice in Ohio and is currently admitted to practice only in New York. Mr. Crichton was an associate at Buchanan Ingersoll & Rooney. His legal experience includes syndicated loan transactions for both real estate and asset-based transactions, public financing and loan restructuring. He has also been involved in the negotiation of franchise agreements and the preparation of franchise disclosure documents. He received his J.D., cum laude, and his B.A., magna cum laude, from The Ohio State University. Mr. Crichton is not admitted to practice in Ohio and is admitted to practice only in Pennsylvania. Headquartered in Cleveland, Ohio, Thompson Hine LLP -- http://www.thompsonhine.com/-- is a business law firm dedicated to providing service in areas as antitrust and trade regulation, bankruptcy, securities, intellectual property, litigation, product liability, and taxation. With more than 400 lawyers, Thompson Hine serves premier businesses worldwide. Its clients include financial institutions, governments, individuals, multinational corporations, and not-for-profit organizations. The firm has offices in Atlanta, Brussels, Cincinnati, Cleveland, Columbus, Dayton, New York and Washington, D.C. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Aug. 20-24, 2008 NATIONAL ASSOCIATION OF BANKRUPTCY JUDGES NABT Convention Captain Cook, Anchorage, Alaska Contact: http://www.nabt.com/ Aug. 26, 2008 TURNAROUND MANAGEMENT ASSOCIATION Do's and Don'ts of Investing in a Turnaround Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Sept. 4-5, 2008 AMERICAN BANKRUPTCY INSTITUTE Complex Financial Restructuring Program Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Sept. 4-6, 2008 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Four Seasons, Las Vegas, Nevada Contact: http://www.abiworld.org/ Aug. 27-28, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA 4th Annual Northeast Regional Conference Gideon Putnam Resort & Spa, Saratoga Springs, New York Contact: www.turnaround.org Aug. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION Arizona Chapter Mixer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Sept. 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Marriott, Bridgewater, New Jersey Contact: 908-575-7333 or www.turnaround.org Sept. 10, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dallas / Fort Worth Restructuring Workshop Belo Mansion Dallas, Texas Contact: www.turnaround.org Sept. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Lenders Forum TBD, Long Island, New York Contact: www.turnaround.org Sept. 11-12, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Mid-America Regional Conference Oak Brook Hills Marriott Resort, Oak Brook, Illinois Contact: www.turnaround.org Sept. 11-14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Cross Border Conference Grand Okanagan Resort, Kelowna, British Columbia Contact: www.turnaround.org Sept. 12, 2008 AMERICAN BANKRUPTCY INSTITUTE ABI/GULC Views from the Bench Georgetown University Law Center, Washington, DC Contact: 1-703-739-0800; http://www.abiworld.org/ Sept. 16-18, 2008 ASSOCIATION OF INSOLVENCY &RESTRUCTURING ADVISORS 2nd Annual Restructuring & Investing Conference Shanghai, China Contact: http://www.airacira.org/ Sept. 17, 2008 TURNAROUND MANAGEMENT ASSOCIATION Real Estate / Condo Restructuring Panel Marriott North, Fort Lauderdale, Florida Contact: www.turnaround.org/ Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Joint Event - CFA/IWIRC/RMA/NJTMA/NYIC Maplewood Country Club, Maplewood, New Jersey Contact: 908-575-7333 or www.turnaround.org Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Chapter Lunch Program Nashville City Center, Nashville, Tennessee Contact: 615-850-8678 or www.turnaround.org Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Healthcare Industry Update - Panel Discussion Summit Club, Birmingham, Alabama Contact: www.turnaround.org Sept. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds: A View From US Trustees TBA, Syracuse, New York Contact: www.turnaround.org Sept. 18-19, 2008 AMERICAN CONFERENCE INSTITUTE Advanced Insolvency Law and Practice Conference Paris, France Contact: www.americanconference.com Sept. 24, 2008 TURNAROUND MANAGEMENT ASSOCIATION 13 Week Cash Flow Workshop: An Overview McCormick & Schmick's, Las Vegas, Nevada Contact: www.turnaround.org Sept. 24-25, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Florida Annual Golf Tournament Champions Gate Golf Club, Orlando, Florida Contact: 561-882-1331 or www.turnaround.org Sept. 24-26, 2008 INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION IWIRC 15th Annual Fall Conference Scottsdale, Arizona Contact: http://www.ncbj.org/ Sept. 24-27, 2008 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES National Conference of Bankruptcy Judges Desert Ridge Marriott, Scottsdale, Arizona Contact: http://www.iwirc.org/ Sept. 25, 2008 TURNAROUND MANAGEMENT ASSOCIATION Case Study with Tom Kim, TMA Small Business of the Year Turnaround Award - TMA Arizona Chapter Meeting TBD, Phoenix, Arizona Contact: www.turnaround.org Sept. 26, 2008 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Marriott Desert Ridge, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ Sept. 30, 2008 TURNAROUND MANAGEMENT ASSOCIATION Private Equity Panel Centre Club, Tampa, Florida Contact: www.turnaround.org/ Oct. 3, 2008 AMERICAN BANKRUPTCY INSTITUTE ABI/UMKC Midwestern Bankruptcy Institute H. Roe Bartle Hall Convention Center, Kansas City Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 13, 2008 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference Standard Club, Chicago, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Annual Charity Golf Event Forest Park Golf Course, St. Louis, Missouri Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Billiards Networking Night Herbert's Billiards, Secaucus, New Jersey Contact: 908-575-7333 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Member Social Davenport Press, Mineola, New York Contact: 631-251-6296 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION View from the Bench - Bankruptcy Update Summit Club, Birmingham, Alabama Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION How to Contract with a Turnaround Manager University Club, Portland, Oregon Contact: www.turnaround.org Oct. 22, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Nevada Award Night McCormick & Schmick's, Las Vegas, Nevada Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Election Oriented TBD, Phoenix, Arizona Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds: A Panel of Professionals TBA, Rochester, New York Contact: www.turnaround.org Oct. 23-24, 2008 AMERICAN CONFERENCE INSTITUTE Distressed Assets Boot Camp TBD, London, United Kingdom Contact: www.americanconference.com Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 29-30, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Corporate Governance Meetings Marriott, New Orleans, Louisiana Contact: www.turnaround.org Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Oct. 31, 2008 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Hilton, Frankfurt, Germany Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 6, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Coach House Diner & Restaurant, Hackensack, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 11, 2008 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Marriott, Troy, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Case Study Summit Club, Birmingham, Alabama Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds:A View From Workout Consultants TBA, Buffalo, New York Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Social TBD, Melville, New York Contact: 631-251-6296 or www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dinner Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Special Program Tournament Players Club at Jasna Polana, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Nov. 20, 2008 TURNAROUND MANAGEMENT ASSOCIATION Senior Housing & Long Term Care Washington Athletic Club,Seattle, Washington Contact: www.turnaround.org Nov. 27, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Chris Kaup TBD, Phoenix, Arizona Contact: www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Party McCormick & Schmick's, Las Vegas, Nevada Contact: 702-952-2480 or www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function Terminal City Club, Vancouver, British Columbia Contact: 503-768-4299 or www.turnaround.org Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ Dec. 8, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering TBD, Long Island, New York Contact: 631-251-6296 or www.turnaround.org Dec. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer Washington Athletic Club, Seattle, Washington Contact: 503-768-4299 or www.turnaround.org Dec. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer University Club, Portland, Oregon Contact: 503-768-4299 or www.turnaround.org Dec. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Dec. 31, 2008 TURNAROUND MANAGEMENT ASSOCIATION Sponsorships - Annual Golf Outing, Various Events TBA, New Jersey Contact: 908-575-7333 or www.turnaround.org Jan. 21-22, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 5-7, 2009 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casurina, Grand Cayman Island, AL Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OFBANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 15-18, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ Featured Conferences Renaissance American Management and Beard Conferences presents Oct. 30-31, 2008 Physician Agreements & Ventures The Millennium Knickerbocker Hotel - Chicago Brochure will be available soon! Nov. 17-18, 2008 Distressed Investing The Helmsley Park Lane - New York Brochure will be available soon! * * * Beard Audio Conferences presents Bankruptcy and Restructuring Audio Conference CDs More information and list of available titles at: http://beardaudioconferences.com/bin/topics?category_id=BAR * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Sheryl Joy P. Olano, 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 ***