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/raid1/www/Hosts/bankrupt/TCR_Public/080904.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, September 4, 2008, Vol. 12, No. 211 Headlines ALLIED HOLDING: 11th Cir. Junks Appeal on Plan Confirmation ALOHA AIRLINES: GMAC Balks at Imperial Capital's $1.3 Mil. Fee AMNEX: Court Approves Disclosure Statement ASARCO LLC: Court Finds Grupo Mexico, AMC Guilty of Fraud ASARCO LLC: Grupo Mexico to Appeal District Court Ruling ATHERTON-NEWPORT: Voluntary Chapter 11 Case Summary ATLANTIS PLASTICS: Stalking Horse Bidders Named for Oct. 2 Sale ATLANTIS PLASTICS: Gets OK to Tap GE's $26.5 Million DIP Fund AZALEA GARDENS: Voluntary Chapter 11 Case Summary BARRINGTON BROADCASTING: S&P Rates Corporate Credit to 'B-' BAUGHER CHEVROLET: Court Approves Use of Cash Collateral BDB MANAGEMENT: Ch. 11 Trustee Wants Pachulski as Counsel BEAR STEARNS: Moody's Cuts Ratings on 142 Tranches of ARM Deals BUFFETS HOLDINGS: Unit Files for Chapter 11 in Delaware BURGER KING: S&P Affirms 'BB-' Ratings on Good Performance CADENCE INNOVATION: U.S. Trustee Sets Sept 8 Meeting to Form Panel CBRL GROUP: Moody's Pares Sr. Secured Ratings to Ba2 COMMISSARY OPERATIONS: Dismissed Employees to Get Gov't Aid CUPERTINO SQUARE: Files for Bankruptcy to Stave Off Foreclosure CUPERTINO SQUARE: Voluntary Chapter 11 Case Summary CUPERTINO SQUARE: Section 341(a) Meeting Slated for October 8 DELPHI CORP: Reaches Agreement with Panel & WTC to Stay Process DELPHI CORP: In Talks to Modify Bankruptcy Exit Plan DURA AUTOMOTIVE: SEC Filing Reveals CEO Compensation Package FAIR OAKS: Case Summary & Three Largest Unsecured Creditors FIRSTLIGHT POWER: Suez Pact Cues S&P to Put Ratings on Watch FORD MOTOR: Names Stephen Odell as Volvo Car's President and CEO FORD MOTOR: Michigan Plant Gets $75MM Infusion to Build Small Cars FORT POINT: Collateral Slide Cues Fitch to Junk Four Note Ratings FORT POINT: Fitch Slashes 'A' Rating to 'CCC' on $60 Million Notes GALLAHANS OF FREDERICKSBURG: Fails to Meet Goals; Will Close GENERAL MOTORS: Offering Retirement Incentives to Workers GSC ABS: Fitch Junks Ratings on Three Classes of Notes HIGHGATE LTC: Court Approves Asset Sale to Oasis HC for $22 Mil. HSPI DIVERSIFIED: Moody's Further Junks Ratings on Senior Notes INOVA TECHNOLOGY: Malone & Bailey Expresses Going Concern Doubt INTEGRATED MEDIA: March 31 Balance Sheet Upside-Down by $10.4 MM INTERSTATE BAKERIES: In Final Stages of Negotiating Ch. 11 Plan JOHN HURLEY: Case Summary & 20 Largest Unsecured Creditors KAMAYAN HOLDINGS: Case Summary & 20 Largest Unsecured Creditors KENT FUNDING: Moody's Further Junks Ratings on Three Senior Notes KRIS INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors LANDSOURCE COMMUNITIES: Sec. 341 Meeting Rescheduled to Sept. 9 LEHMAN BROTHERS: KDB Proposes to Acquire 25% Stake, Report Says LE JARDIN: Files for Chapter 11 Bankruptcy in Georgia L.I.D. LTD: U.S. Trustee Wants Counsel's Compensation Held Back LINEAR TECHNOLOGY: June 29 Balance Sheet Upside-Down by $433.9MM LINENS N THINGS: Wants Exclusive Period to File Plan to Nov. 28 LINENS N THINGS: Court OKs Closure of 11 Stores Instead of 28 LINENS N THINGS: Court Extends Deadline to Remove Civil Actions LINENS N THINGS: Court Approves $20MM Severance Plan LINENS 'N THINGS: To Close Surprise Bedding & Housewares Store LONGHORN CDO: Moody's Rates $11 Million Secured Notes at Caa1 MICHAEL EDWARDS: Case Summary & 20 Largest Unsecured Creditors MIDWEST AIR: Has Fallen Behind Payments for Airport Gate Space NATIONAL R.V.: Files Joint Chapter 11 Plan & Disclosure Statement NETEFFECT INC: U.S. Trustee Sets Sept. 8 Organizational Meeting NETWOLVES CORPORATION: Court Confirms Third Amended Plan NEW LIFE OF PERRY: Case Summary & 20 Largest Unsecured Creditors NEWPORT WAVES: Fitch Cuts Ratings for Sub-Classes of CDO Series 3 NICHOLAS-APPLEGATE: S&P Cuts Low-B Ratings on 2 Class Notes to CCC NORMA CDO: Fitch Cuts Ratings on Eight Classes of Notes to 'C/DR6' NORTH OAKLAND: Will Be Sold to Oakland Physicians Medical OPEN DOOR: Voluntary Chapter 11 Case Summary OSPRAIE MANEGMENT: To Shut Down Hedge Fund Due to Losses PHOENIX CDO: Moody's Further Junks Ratings on $61 Million Notes PIERRE FOODS: Sued by J.M. Smucker for Infringing Food Trademark PIERRE FOODS: Court Okays Richards Layton as Bankruptcy Co-Counsel PIERRE FOODS: Hires Alvarez & Marsal as Restructuring Consultants POINT PLEASANT: Moody's Further Junks Ratings on Three Notes PORTOLA PACKAGING: U.S. Trustee Sets Sept. 8 Org. Meeting PORTOLA PACKAGING: Moody's Lowers POD Rating to D from Ca QUAKER FABRIC: Court Confirms Joint Liquidating Plan QUANTA SERVICES: S&P Withdraws 'BB' Rating on Corporate Credit REFCO INC: Allied World to Resume Payment of Grant's Defense Costs REFCO INC: Trustee Fights Motions to Dismiss Fraud Lawsuit RIVER ROCK: Commences Cash Tender Offer for 9-3/4% Senior Notes SABABA GROUP: To Auction Off Assets; Omni Is Lead Bidder SAGECREST FINANCIAL: Unit Owes Deutsche Bank More than $100MM SEACOAST COMMUNITIES: Files for Chapter 11 to Avoid Foreclosure SEA CONTAINERS: PBGC Says Disclosure Statement Lacks Information SEA CONTAINERS: Recovery Under Chapter 11 Plan Beats Liquidation SEA CONTAINERS: PBGC & SPCP Objects to Disclosure Statement SEA CONTAINERS: Balks at $500 Million Securities Fraud Claim SEA CONTAINERS: Files Notice of Bermuda Scheme of Arrangement SEMGROUP LP: Seeks Court Approval to Reject Contracts SEQUOIA COMM: Sells Asset to Clinica for $8.27MM; Gets $2MM Loan SHEAFE HARBOR: Owner Turns Up with $190,000 Bid at Auction SHELLS SEAFOOD: Blames Bankruptcy Filing on Economic Collapse SILICON GRAPHICS: June 27 Balance Sheet Upside-Down by $56.4MM SHARPER IMAGE: Vornado Air Slams $1 Million Legal Fee Requests SOLUTIA INC: Addresses "Last Few" Bankruptcy Claims SONORAN ENERGY: UHY LLP Expresses Going Concern Doubt SOUTH COAST: Fitch Cuts 'BBB' Rating on $193 Mil. Notes to 'CCC' STRAITS GLOBAL: Poor Collateral Prompts Fitch to Downgrade Ratings ST. STEPHEN: Petition Calls for Durham Cathedral to Take Control STEVE & BARRY'S: Creditors Balk at $5 Mil. Payout to Founders SUNRISE ENERGY: $2.1MM Working Capital Deficit Cues GLO Doubt TERRAPIN INDUSTRIES: Case Summary & 20 Largest Unsec. Creditors TERWIN ASSET: Collateral for $55MM Debt to be Auctioned Sept. 8 TERWIN EMPLOYEES: Collateral for $55MM Debt for Auction Sept. 8 THORNBURG MORTGAGE: Further Extends Exchange Offer Until Sept. 9 TRICOM SA: Court Denies Summary Judgment Motion TRICOM SA: Produce Special Committee Report, Says Court Ruling TROPICANA ENT: Board Taps Paul Hastings as Litigation Counsel TROPICANA ENT: Court Appoints WHS as Professional Fees Auditor TROPICANA ENT: Wants to Broaden Employment Scope of Ernst & Young US AIRWAYS: PBGC Asks Court to Thrash 2 Claims by Retired Pilots US FARMS: June 30 Balance Sheet Upside-Down by $2,300,627 VALLEJO CITY: Loses More Police Officers as Crime Grows Rampant VICORP RESTAURANTS: Roster's, Bakers Square Outlets Closed VISION REAL: Voluntary Chapter 11 Case Summary WESTAFF INC: Banks Waive Covenant Default Until September 30 WESTERN NONWOVENS: Sells Manufacturing Plant to HarVest WHATELY CDO: Fitch Lowers 'BB+' Rating on $27 Mil. Notes to 'CCC' WHITEHALL JEWELLERS: May Use Up to $80MM DIP Fund Until Sept. 23 WICKES FURNITURE: Wants Until November 30 to File Chapter 11 Plan WHITEHALL JEWELERS: Court Okays Sale of Stores to Michael Hill WOODSIDE GROUP: To File for Bankruptcy by Sept. 16 XIOM CORP: June 30 Balance Sheet Upside-Down by $427,982 * S&P Puts Ratings on 169 ABS Classes on Watch Negative * Arizona Discloses List of Homebuilders in Financial Trouble * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ********* ALLIED HOLDING: 11th Cir. Junks Appeal on Plan Confirmation ----------------------------------------------------------- Bankruptcy Law360 reports that two private equity shareholders of Allied Holding Inc. lost their fight to stay the implementation of the company's Chapter 11 reorganization plan. According to Bankruptcy Law360, the U.S. Court of Appeals for the Eleventh Circuit last week upheld the ruling of a federal court that found that granting the shareholders' request would be unfair to other investors. On October 19, 2007, Virtus Capital LP and Hawk Opportunity Fund, L.P., took an appeal to the Eleventh Circuit from an opinion and order by the U.S. District Court for the Northern District of Georgia granting Allied Holdings' motion to dismiss as moot the appeals filed by Virtus Capital and Hawk Opportunity Fund from certain orders by the U.S. Bankruptcy Court for the Northern District of Georgia: (1) approving a settlement agreement between the Debtors and majority of its shareholders; (2) approving the plan of reorganization; (3) approving an asset purchase and financing proposal designed to assist the Debtors in its exit from bankruptcy as a viable entity; and (4) denying Virtus and Hawk's request to continue the hearing date for considering the plan of reorganization. District Court Judge William S. Duffy, Jr., held that Virtus and Hawk did not contest the mootness of their appeals of the orders approving the Settlement Agreement and the Rig Financing, or denying the continuance. They contested the mootness of their appeal of the May 18, 2007, Order approving the Second Amended Joint Reorganizational Plan. Judge Duffey held that although many of the parties had notice of the appeals, Virtus and Hawk did not seek a stay for nearly a month. When they finally did, the Bankruptcy Court held that the Plan should go forward and that the appeals were unlikely to succeed on the merits. "[A]t this point the Court cannot grant relief without materially impacting the transactions that have already occurred and the Plan's future liability," Judge Duffey said. "The fact that many of the concerned parties knew that appeals were pending does not change this conclusion," he added. "The parties in this proceeding and the third parties have relied on the Confirmation Order to implement the Plan. Promises, cash, and securities have changed hands in a manner that simply cannot be undone and certainly cannot be done fairly," Judge Duffey said. "Despite the fact that many of the potentially affected parties were aware of the appeals, their conduct in reliance on the Confirmation Order was not subject to a stay." About Allied Holdings Based in Decatur, Georgia, Allied Holdings Inc. (AMEX: AHI, other OTC: AHIZQ.PK) -- http://www.alliedholdings.com/-- and its affiliates provide short-haul services for original equipment manufacturers and provide logistical services. The company and 22 of its affiliates filed for chapter 11 protection on July 31, 2005 (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537). Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in their restructuring efforts. Henry S. Miller at Miller Buckfire & Co., LLC, served as the Debtors' financial advisor. Anthony J. Smits, Esq., at Bingham McCutchen LLP, provided the Official Committee of Unsecured Creditors with legal advice and Russell A. Belinsky at Chanin Capital Partners, LLC, provided financial advisory services to the Committee. When the Debtors filed for protection from their creditors, they estimated more than $100 million in assets and debts. On May 11, 2007, the Court confirmed Allied's Second Amended Chapter 11 Plan of Reorganization. Allied emerged from bankruptcy on May 29, 2007. (Allied Holdings Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc. http://bankrupt.com/newsstand/or 215/945-7000) * * * As of April 30, 2007, Allied Holdings Inc.'s consolidated balance sheet showed $217,379,000 in total stockholders' deficit resulting from total assets of $309,931,000 and total liabilities of $527,310,000. ALOHA AIRLINES: GMAC Balks at Imperial Capital's $1.3 Mil. Fee -------------------------------------------------------------- Bankruptcy Law 360 reports that GMAC Commercial Finance LLC is back to protesting more of the professional fees that have been requested in Aloha Airlines Inc.'s Chapter 7 case. This time, the report says, GMAC is opposing a $1.3 million bid presented by Imperial Capital. Based in Honolulu, Hawaii, Aloha Airgroup Inc., Aloha Airlines Inc. -- http://www.alohaairlines.com/-- and its affiliates are carriers that fly passengers and freight to Hawaii's five major airports, as well as to half a dozen destinations in the western U.S. They operate a fleet of about 20 aircraft, all Boeing 737s, including three configured as freighters. Aloha filed for Chapter 11 protection on Dec. 30, 2004 (Bankr. D. Hawaii Case No. 04-03063), and emerged from Chapter 11 bankruptcy protection in February 2006. The company and its affiliates filed again for Chapter 11 protection on March 18, 2008 (Bankr. D. Hawaii Lead Case No. 08- 00337). Brian G. Rich, Esq., Jordi Guso, Esq., and Paul Steven Singerman, Esq., at Berger Singerman P.A., and David C. Farmer, Esq., represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors was represented by Sonnenschein Nath & Rosenthal LLP and Bronster Hoshibata, A Law Corporation. The Debtors' schedules reflected total assets of $74,600,000 against total liabilities of $197,100,000. On April 29, 2008, the Court converted the Debtors' cases into chapter 7 liquidation proceedings. The next day, the U.S. Trustee appointed Dane S. Field to serve as chapter 7 trustee for the cases. James Wagner, Esq., at Wagner Choi & Verbrugge, represents Mr. Field. AMNEX: Court Approves Disclosure Statement ------------------------------------------ According to Bankruptcy Data, the U.S. Bankruptcy Court has approved AMNEX's Disclosure Statement explaining the company's Plan of Liquidation. Bankruptcy Data relates that the Plan provides for the liquidation and conversion of all of the Debtor's assets to cash and the distribution of the proceeds, net of fees, and expenses to holders of claims in accordance with their relative priority. Generally, unsecured creditors will be paid a pro rata share of their claims while holders of equity interests won't receive distribution, the report says. The Court set a hearing for Nov. 5, 2008, to consider confirming the Plan, Bankruptcy Data states. AMNEX, Inc. and American Network Exchange, Inc., dba AMNEX, aka AMNEX Acquisition Corp., filed for chapter 11 protection on May 5, 1999 (Bankr. S.D.N.Y. Case Nos. 99-21110 and 99-21111). On May 19, 1999, the cases where transferred to Manhattan from White Plains and consolidated the cases under Case No. 09-43019. On May 10, 1999, a subsidiary, Crescent Public Communications, Inc. also filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 99-10183). Crescent's case however wasn't consolidated with AMNEX's. Attorneys at Traiger & Hinckley LLP, Rosenman & Colin, LLP, and Otterbourg, Steindler, Houston & Rosen, represent the Debtors. Ravin, Sarasohn, Cook, Baumgarten, Fisch & Rosen, P.C., represented the Official Committee of Unsecured Creditors. On April 27, 2000, the Court approved Lowenstein Sandler, P.C., as substitute counsel. ASARCO LLC: Court Finds Grupo Mexico, AMC Guilty of Fraud --------------------------------------------------------- Judge Andrew Hanen of the U.S. District Court for the Southern District of Texas found ASARCO LLC's parent companies, Americas Mining Corporation and Grupo Mexico, S.A.B. de C.V., guilty of intentionally defrauding ASARCO LLC and its creditors when they transferred ASARCO's 54.18% ownership interest in Southern Peru Copper Corporation, now known as Southern Copper Corporation. Judge Hanen, in a 190-page opinion, said AMC and Grupo were aware that the transaction, as it was structured, would leave ASARCO with less cash and less ability to pay its creditors. The transaction, Judge Hanen noted, was structured in a way that benefited AMC and Grupo and other "key creditors" -- those creditors who needed to be paid to close the transaction -- but evidence, he said, did not show that AMC and Grupo targeted any specific creditors that it wanted to hinder, delay, or defraud. The District Court found that the transfer was a legitimate means by which to restructure ASARCO, thus Judge Hanen denied ASARCO's constructive fraudulent transfer claim, saying that ASARCO received reasonably equivalent value for its SPCC Stake. The District Court ruled that the transfer was not actuated with "actual malice." AMC and Grupo's decision to close the transaction despite knowing that the transaction would leave ASARCO deeper into debt can be best characterized as apathy or indifference, not malice or wantonness, Judge Hanen said. Judge Hanen noted from the evidence and testimonies presented during the trial in mid-May 2008 that ASARCO was "insolvent" at the time of the transfer, which was completed on March 31, 2003. He noted that ASARCO's reasonable projected cash flows made by competent experts prior to the transaction indicated there were insufficient operating funds to meet the company's capital needs. He also noted that ASARCO was unable to pay its debts prior to the transaction and had extensive "hold lists" during that time. He cited that from 2001 until the day of the transfer, ASARCO was unable to make any payments to AMC on the $41,750,000 intercompany loan provided by the Larrea family through AMC. Likewise, he noted that there are numerous creditors in ASARCO's bankruptcy case who filed proofs of claim based on non-payment of debts incurred prior to March 31, 2003. The structure of the transaction demonstrates that AMC and Grupo and the "inside" directors did not engage in fair dealing with ASARCO's creditors, and that the directors breached their fiduciary duties to ASARCO and all of its creditors, Judge Hanen ruled. AMC and Grupo and the inside directors forced the closing of the transaction at a time when ASARCO was insolvent and suffering from a severe liquidity crisis. The key terms of the transaction was negotiated with the U.S. Department of Justice, which had numerous environmental claims against ASARCO, but did not include other unsecured creditors of ASARCO. Also, Judge Hanen noted that the transaction closed despite the disapproval and resignation of the two only independent directors on ASARCO's board of directors. Judge Hanen ruled that the damages ASARCO suffered as a result of the transaction was a "proximate result of conspiracy between AMC and the ASARCO directors. "AMC/Grupo concealed and manipulated information, broke promises, and ultimately closed the transfer of the SPCC stocks over the objections and contrary to the advice of the independent directors, Ernst & Young, Squire Sanders, and members of ASARCO's management," Judge Hanen said. The District Court, however, said that AMC and Grupo, as parent corporations, do not owe fiduciary duties to ASARCO or its creditors. ASARCO Received "Reasonably Equivalent" Value for its SPCC Stake Judge Hanen found that the $727,790,000 ASARCO received for its SPCC Stake was not "unreasonably less" than the value of the SPCC shares during the time the transaction was completed on March 31, 2003. On the day the transfer closed, SPCC's price per share was $14.60. ASARCO and SPHC transferred 43,348,949 shares to AMC on that day, valuing the stocks at $632,984,655. Taking into consideration several stock pricing methodologies, the Court said ASARCO's stake in SPCC at that time would be worth between $811,400,000 and $853,000,000. Although the difference in price is at least $83,000,000, ASARCO received 85% to 90% of the value of the SPCC stock. Judge Hanen said "the law does not demand that a plaintiff receive an amount equal to the fair market value of the asset it transfers; the consideration must only be reasonably equivalent." As of September 3, 2008, SCC shares are trading at $24.69 per share. As of July 31, 2008, there were outstanding 883,410,150 shares of SCC common stock. According to Bloomberg News, the disputed shares would be worth $6.64 billion on the last closing price. The Olympian said the disputed shares could be valued between $8 billion to $10 billion. No Ruling on Punitive Damages Issue Judge Hanen deferred ruling on the punitive damages issue and directed the parties to file any additional briefing they find necessary on the issues of damages, including kinds and amounts, and the propriety and amount of attorney's fees and costs. The briefs are due September 15. ASARCO's directors, according to The Wall Street Journal, are seeking $8,000,000,000 in damages following the ruling. ASARCO is seeking to recover its ownership interest in SCC and $1.8 billion in dividends and interest. Grupo Mexico's lawyers, the Journal reported, dispute the damages claim, arguing that ASARCO should not recover more than its parent corporation already has guaranteed ASARCO's creditors under the plan of reorganization it filed with the U.S. Bankruptcy Court for the Southern District of Texas on August 26, 2008. Ruling Confused Investors Bloomberg said analysts and stock traders who sell Grupo Mexico shares said that the District Court's ruling confused investors because Grupo Mexico already claimed victory. "If [Grupo Mexico] lost in terms of [the District Court] saying it was a fraudulent transaction, I think it will hurt," Inigo Cossio, an analyst at Actinver SA, told Bloomberg. 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. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, also submitted a competing Chapter 11 plan to retain its equity interest in ASARCO LLC, its wholly owned indirect subsidiary. ASARCO LLC: Grupo Mexico to Appeal District Court Ruling -------------------------------------------------------- Americas Mining Corporation and Grupo Mexico, S.A.B. de C.V., said that they are pleased the U.S. District Court for the Southern District of Texas found that "AMC paid reasonably equivalent value for the Southern Copper Corporation shares in 2003 and that the transfer was executed for the legitimate business purpose of preserving ASARCO." However, AMC said it is surprised by and intends to appeal that part of the decision adverse to AMC's interests. Grupo said it believes that the use of the consideration received by ASARCO to pay substantial debts which were due, like the $450 million revolving credit facility, the $100 million in Yankee Bonds, and the $100 million used for an environmental trust under the agreement with the Department of Justice, benefited all major creditors at that time, and was essential to help put ASARCO in a better position to generate enough cash to pay all creditors. Today's Troubled Company Reporter relates that Judge Andrew Hanen of the U.S. District Court for the Southern District of Texas found ASARCO LLC's parent companies guilty of intentionally defrauding ASARCO LLC and its creditors when they transferred ASARCO's 54.18% ownership interest in Southern Peru Copper Corporation, now known as Southern Copper Corporation. Judge Hanen, in a 190-page opinion, said AMC and Grupo were aware that the transaction, as it was structured, would leave ASARCO with less cash and less ability to pay its creditors. The transaction, Judge Hanen noted, was structured in a way that benefited AMC and Grupo and other "key creditors" -- those creditors who needed to be paid to close the transaction -- but evidence, he said, did not show that AMC and Grupo targeted any specific creditors that it wanted to hinder, delay, or defraud. AMC and Grupo reiterated that because they have already proposed a plan of reorganization that pays ASARCO's creditors in full and because creditors are not entitled to recover under the Bankruptcy Code more than the amount of their claims, they believe that the District Court's decision should not have a material impact on AMC. "We remain committed to retaining our ownership of ASARCO and believe that the certainty and superior value offered by our reorganization plan should accord us that right," Grupo told the Journal. 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. Americas Mining Corporation, an affiliate of Grupo Mexico SAB de CV, also submitted a competing Chapter 11 plan to retain its equity interest in ASARCO LLC, its wholly owned indirect subsidiary. ATHERTON-NEWPORT: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Atherton-Newport Fund 121, LLC 23792 Rockfield Blvd., Suite 200 Lake Forest, CA 92630 Bankruptcy Case No.: 08-15398 Chapter 11 Petition Date: Sept. 2, 2008 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: David W. Meadows, Esq. (david@davidwmeadowslaw.com) Law Offices of David W. Meadows 1801 Century Park East, Suite 1250 Los Angeles, CA 90067 Tel: (310) 557-8490 Estimated Assets: Less than $50,000 Estimated Debts: $$10 million to $50 million The Debtor did not file a list of 20 largest unsecured creditors. ATLANTIS PLASTICS: Stalking Horse Bidders Named for Oct. 2 Sale --------------------------------------------------------------- Atlantis Plastics, Inc. said that on Aug. 28, 2008, the United States Bankruptcy Court for the Northern District of Georgia appointed AEP Industries Inc. and Custom Plastic Solutions, LLC, a subsidiary of Monomoy Capital Partners, L.P., as the "stalking horse" bidders for the company's Plastics Films and Molded Products businesses, respectively. AEP Industries reached a definitive agreement to acquire substantially all of the assets of the Plastic Films segment of Atlantis Plastics in a cash transaction valued at approximately $87 million. The transaction was unanimously approved by the Boards of Directors of both companies. The "stalking horse" bids are subject to higher and better offers at a Court sponsored auction, scheduled to be held on October 2, 2008. About Atlantis Plastics Atlanta, Georgia-based Atlantis Plastics, Inc. (OTC:ATPL.PK) 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. As of September 2007, Atlantis Plastics had $214 million in total assets, $255 million in total liabilities, and $41 million in stockholders' deficit. ATLANTIS PLASTICS: Gets OK to Tap GE's $26.5 Million DIP Fund ------------------------------------------------------------- The United States Bankruptcy Court for the Northern District of Georgia approved the $26.5 million post petition financing facility provided by a consortium of lenders led by GE Financial Services Inc. to Atlantic Plastics, Inc. Bud Philbrook, President and Chief Executive Officer, said, "We are very pleased with the Court's action. Atlantis Plastics remains committed to continued support of its customers, suppliers, employees and other constituents to the fullest extent possible and work toward a seamless transition of the company's operating facilities in Elkhart, Indiana, Cartersville, Georgia, Mankato, Minnesota, Tulsa, Oklahoma, Fontana, California, Nicholasville, Kentucky, Henderson, Kentucky, Ft. Smith, Arkansas, Jackson, Tennessee, LaVergne, Tennessee, and Alamo, Texas, to the new owners of the businesses. We anticipate no disruption in our ability to continue to service the needs of our customer base as we work through the sale process and we fully expect our high level of customer support to continue under the new owners." About Atlantis Plastics Atlanta, Georgia-based Atlantis Plastics, Inc. (OTC:ATPL.PK) 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. As of September 2007, Atlantis Plastics had $214 million in total assets, $255 million in total liabilities, and $41 million in stockholders' deficit. AZALEA GARDENS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Azalea Gardens, Inc. 1102 Simpson Road Atlanta, GA 30314 Bankruptcy Case No.: 08-77368 Type of Business: The Debtor operates a plant and garden nursery. Chapter 11 Petition Date: September 2, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Dorna Jenkins Taylor (dorna.taylor@taylorattorneys.com) Taylor & Associates, LLC 1401 Peachtree Street, Suite 500 Atlanta, GA 30309 Tel: (404) 870-3560 Fax: (404) 745-0136 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of its largest unsecured creditors. BARRINGTON BROADCASTING: S&P Rates Corporate Credit to 'B-' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit and issue-level ratings on Hoffman Estates, Ill.-based Barrington Broadcasting LLC; the corporate credit rating was lowered to 'B-' from 'B'. These ratings remain on CreditWatch with negative implications, where they were placed on June 13, 2008. "The downgrade and continued CreditWatch listing reflect the difficulty that we believe the company faces in the intermediate term to significantly reduce debt and increase EBITDA--both of which will be essential to complying with an aggressive schedule of tightening leverage covenants," said Standard & Poor's credit analyst Jeanne Mathewson. Revenue in the quarter ended June 30, 2008 was up 1.5%, while EBITDA was down 4.4% in the same period, mainly because of an increase in expenses related to the acquisition of the WGTU and WGTQ stations. The company was in compliance with all covenants as of June 30, 2008, with just under 0.4x of cushion against the leverage covenant, the tightest of its covenants. The leverage covenant will step down an additional 1.25x at the end of this year, and the company will need to increase EBITDA and meaningfully reduce debt to maintain compliance. In resolving the CreditWatch listing, Standard & Poor's will monitor the company's operating trends and prospects for reducing debt to two-year average EBITDA, or else amend its credit facility covenants. S&P will lower the rating again if it believes that the company will be unable to comply with the leverage covenant when it steps down at the end of the year, and have difficulty in absorbing a potential increase in its borrowing margin in connection with a waiver or amendment. Assuming the company is able to pay down roughly $10 million in debt using cash on hand and political revenue, EBITDA in the second half of 2008 would need to increase by roughly 23% over the same period in 2006, the last major election year, or 33% over 2007, to achieve this leverage target. S&P currently view this scenario as extremely challenging given prevailing economic conditions. BAUGHER CHEVROLET: Court Approves Use of Cash Collateral -------------------------------------------------------- Baugher Chevrolet-Buick Inc. obtained permission from the United States Bankruptcy Court for the Central District of California to use cash collateral, The Deal reports. As of its bankruptcy filing, the Debtor owes at least $1,708,460 in claims to Branch Banking and Trust, secured by substantially all of the Debtor's assets. BB&T's collateral includes automobile inventory, machinery equipment and proceeds from its operations. The Debtor has not determined whether BB&T's lien is properly perfected. According to the Debtor, the proceeds of the cash collateral will be used, among other things: -- to pay expenses in accordance with the budget; -- to maintain adequate property, casualty and liability insurance; -- to pay reasonable postpetition and prepetition payroll, employee benefits, and related employment taxes payable in the ordinary course of business; -- to secure its facilities; -- to pay postpetition expenses, including postpetition utility deposits. As adequate protection, BB&T will be granted a valid, perfected and enforceable replacement lien in and upon the cash collateral. The replacement lien is subject to a $25,000 carve- out for payment of professional advisors retained by the Debtor. A full-text copy of the Debtor's budget is available for free at: http://ResearchArchives.com/t/s?3198 Headquartered in Waynesboro, Virginia, Baugher Chevrolet Buick, Inc. -- http://www.baugherautos.com/-- sells new and used cars, trucks and SUVs. The company filed for Chapter 11 protection on Aug. 22, 2008 (Bankr. W.D. Va. Case No.08-50862). A. Carter Magee, Jr., Esq., at Magee Foster Goldstein & Sayers, represents the Debtor in its restructuring efforts. The U.S. Trustee for Region 4 has yet to appointed creditors to serve on an Official Committee of Unsecured Creditors. When the Debtor filed for protection from its creditors, it listed total assets of $2,931,782 and total debts of $4,432,601. BDB MANAGEMENT: Ch. 11 Trustee Wants Pachulski as Counsel --------------------------------------------------------- R. Todd Neilson, the chapter 11 trustee appointed in the bankruptcy cases of BDB Management LLC and its debtor-affiliates, seeks permission from the United States Bankruptcy Court for the Northern District of California to employ Pachulski Stang Ziehl & Jones, LLP, as counsel. The Firm is expected to, among others, assists, advise and represent the Trustee in his administration of the cases. John D. Fiero, Esq., a partner at the Firm, assures the Court that the it does not have any interest adverse to the Debtors and their creditors. He also said that the Firm does not employ any person who is related to Judge Thomas E. Carlson or to an employee of the Trustee. Menlo Park, California-based BDB Management LLC and its affiliates filed for Chapter 11 protection on June 7, 2008 (Bankr. N.D. Calif. Lead Case No. 08-31001). William J. del Biaggio, III, an interest holder of the companies, filed for personal chapter 11 bankruptcy on June 6, 2008. Judith Whitman, Esq., at Diemer Whitman and Cardosi LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $50 million to $100 million in estimated assets and $50 million to $100 million in estimated debts. The TCR said on July 9, 2008, that Sara L. Kistler, acting U.S. Trustee for Region 17, appointed R. Todd Nelson as the chapter 11 trustee in BDB Management LLC and its debtor- affiliates' bankruptcy cases. Sand Hill Capital Partners III, the investment fund Mr. Del Biaggio co-founded, filed for chapter 7 bankruptcy. Sand Hill disclosed $10.6 million in debts. Established in 1996, Sand Hill Capital has four debt funds under management, of which two are actively investing. Sand Hill has provided debt financing and equity co-investing in multiple portfolio companies of top-tier venture capital firms, including Broadcom, a semiconductor company specializing in VoIP, wireless networking, and broadband communications solutions; Commerce One, a provider of On-Demand Supplier Relationship Management solutions and The Open Supplier Network; IBahn, a provider of secure broadband-to-go at premium hospitality locations; and Odwalla, maker of fruit drinks and snacks. BEAR STEARNS: Moody's Cuts Ratings on 142 Tranches of ARM Deals --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of 142 tranches from 10 Option ARM transactions issued by Bear Stearns Mortgage Funding Trust. Some 24 tranches that were downgraded remain on review for possible further downgrade. Additionally, 9 senior tranches were confirmed at Aaa. The collateral backing these transactions consists primarily of first-lien, adjustable- rate, negatively amortizing Alt-A mortgage loans. Ratings were downgraded, in general, based on higher than anticipated rates of delinquency, foreclosure, and REO in the underlying collateral relative to credit enhancement levels. The actions described below are a result of Moody's on-going review process. Moody's Investors Service also takes action on certain insured notes as identified below. The ratings on securities that are guaranteed or "wrapped" by a financial guarantor is the higher of a) the rating of the guarantor or b) the published underlying rating. The underlying ratings reflect the intrinsic credit quality of the notes in the absence of the guarantee. The current ratings on the below notes are consistent with Moody's practice of rating insured securities at the higher of the guarantor's insurance financial strength rating and any underlying rating that is public. A list of the rating actions is available for free at: http://bankrupt.com/misc/Moodys_BearStearnsMFT.pdf BUFFETS HOLDINGS: Unit Files for Chapter 11 in Delaware ------------------------------------------------------- Buffets Restaurants Holdings Inc. filed for Chapter 11 protection with the U.S. Bankruptcy Court for the District of Delaware. According to Bankruptcy Data, the Debtor filed with the Court a motion seeking to have the case jointly-administered with the existing Buffets Holdings' bankruptcy case. Documents filed with the Court states that BRHI owns 100% of the equity of BHI and is an affiliate of the joint Debtors within the meaning of Section 101(2) of the Bankruptcy Code. Buffet Restaurants disclosed in its petition less than $50,000 in total assets and in total debts. About Buffets Holdings Headquartered in Eagan, Minnesota, Buffets Holdings Inc. -- http://www.buffet.com/-- is the parent company of Buffets, Inc., which operates 626 restaurants in 39 states, comprised of 615 steak-buffet restaurants and eleven Tahoe Joe's Famous Steakhouse restaurants, and franchises sixteen steak-buffet restaurants in six states. The restaurants are principally operated under the Old Country Buffet, HomeTown Buffet, Ryan's and Fire Mountain brands. Buffets, Inc. employs approximately 37,000 team members and serves approximately 200 million customers annually. The company and all of its subsidiaries filed Chapter 11 protection on Jan. 22, 2008 (Bankr. D. Del. Case Nos. 08-10141 to 08-10158). Joseph M. Barry, Esq., and Pauline K. Morgan, Esq., at Young Conaway Stargatt & Taylor LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims and balloting agent. The U.S Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. The Committee selected Otterbourg Steindler Houston & Rosen PC as counsel. The Debtors' balance sheet as of Sept. 19, 2007, showed total assets of $963,538,000 and total liabilities of $1,156,262,000. As reported in the Troubled Company Reporter on Feb. 26, 2008, the Court granted on February 22, 2008, final approval of the Debtors' debtor-in-possession credit facility, consisting of $85 million of new funding and $200 million carried over from the company's prepetition credit facility. (Buffets Holdings Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * As reported in the Troubled Company Reporter on June 16, 2008, the Court further extended exclusive periods of the Debtors to (a) file a Chapter 11 Plan through and including Sept. 30, 2008, and (b) solicit acceptances of a plan through and including Dec. 1, 2008. BURGER KING: S&P Affirms 'BB-' Ratings on Good Performance ---------------------------------------------------------- Standard & Poor's Ratings Services revised the rating outlook on Miami-based Burger King Holdings Inc. to positive from stable. S&P also affirmed the ratings on the company, including the 'BB-' corporate credit rating. "The outlook revision is based on Burger King's improving operating performance over the past three years," said Standard & Poor's credit analyst Diane Shand, "and strengthening of credit measures." New products, greater use of day parts, and increased operating efficiencies have resulted in the operating margin increasing to 25.2% in fiscal 2008 ended June 30, 2008, from 19.2% in fiscal 2005. Leverage has declined to 3.7x from 7.5x over the same period due to rising profitability and debt repayment. CADENCE INNOVATION: U.S. Trustee Sets Sept 8 Meeting to Form Panel ------------------------------------------------------------------ Roberta A. DeAngelis, the acting United States Trustee for Region 3, will hold an organizational meeting in the Chapter 11 case of Cadence Innovation LLC on Sept. 8, 2008, at 11:00 a.m. at The DoubleTree Hotel at 700 King Street, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. About Cadence Innovation Headquartered in Troy, Michigan, Cadence Innovation LLC -- http://www.cadenceinnovation.com/-- manufactures and sells auto parts to its customers GM and Chrysler. The company has at least 4,200 employees in the United States and Europe, including Hungary and Czech Republic. The company and its debtor-affiliate, New Venture Real Estate Holdings, LLC, filed for Chapter 11 reorganization on Aug. 26, 2008 (Bankr. D. Del. Lead Case No. 08-11973). Norman L. Pernick, Esq. and Patrick J. Reilley, Esq., at Cole, Schotz, Meisel, Forman & Leonard, represent the Debtors as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $100 million to $500 million. CBRL GROUP: Moody's Pares Sr. Secured Ratings to Ba2 ---------------------------------------------------- Moody's Investors Service downgraded the ratings of CBRL Group, Inc., including the company's corporate family rating to Ba3 from Ba2, probability of default rating to Ba3 from Ba2, and senior secured ratings to Ba3 from Ba2. The outlook is negative. This concludes Moody's review for possible downgrade initiated on Aug. 4, 2008. The ratings downgrade was prompted by Moody's view that CBRL's debt protection metrics, which are more representative of a Ba3 rating, would not materially improve over the intermediate term as weak consumer demand and escalating cost inflation continues to pressure operating performance and margins. For the 12 month period ending May 2008, leverage on a debt to EBITDA basis was approximately 4.45 times, EBITA coverage of interest was 2.4 times, and retained cash flow to debt was about 9.7%. The negative outlook reflects Moody's view that CBRL's operating performance will continue to be negatively impacted by weak consumer spending, declining traffic patterns, and escalating cost inflation over the intermediate term. The outlook also reflects Moody's concern that the cushion under financial covenants in the company's bank facility will likely deteriorate as operating performance is pressured and as covenant levels tighten over the next several quarters. This could require the company to seek covenant relief from its banks in order to retain access to the facilities. Moody's most recent rating action for CBRL resulted in our affirming all ratings and changing the outlook to negative from stable on June 18, 2007. CBRL Group Inc. (CBRL), headquartered in Tennessee, is a publicly traded holding company that is engaged in the operation and development of the Cracker Barrel Old Country Store restaurant and retail concept. CBRL had total revenues of about $2.4 billion for the 12 month period ending May 2008. COMMISSARY OPERATIONS: Dismissed Employees to Get Gov't Aid ----------------------------------------------------------- The 90 workers that Commissary Operations Inc. will lay off due to the shutdown of the firm's Jackson County food distribution center should receive some government assistance, Kellen Henry at The Charleston Gazette reports, citing the West Virginia Development Office. As reported Troubled Company Reporter on Aug. 28, 2008, a facility of Commissary Operations Inc., dba COI Foodservice Distribution and Manufacturing in Tifton, Georgia, will be closing by October. The unit of COI Acquisition Co. filed a voluntary petition under Chapter 11 of the Bankruptcy Code before the U.S. Bankruptcy Court in Nashville, Tennessee, blaming declining demand and rising fuel costs. Papers filed with the Court says the company lost money in May when Roadhouse Grill Inc. started winding down in bankruptcy court. The company stated that six other distribution agreements were also terminated. Protection from creditors in bankruptcy was not enough to support the company, it had to pare off costs, Human Resource VP Randolph Wilkerson said. The Gazette relates that Commissary Operations will terminate all employees between Oct. 6 and 20, while some of them may be fired earlier as existing clients find new distributors for their products. According to The Gazette, Fred Mixer of the Dislocated Workers' Service Unit at the development office said that the state Workforce Rapid Response team will meet with the COI Foodservice human resource officials on Sept. 18 to discuss what resources are available for those workers. Mr. Mixer said that local and state agencies will offer things like credit counseling, debt management, resume workshops, children's health-care assistance, and other job services to displaced employees, The Gazette states. The Gazette states that agencies, including the Workforce Investment Board, the Jackson County Development Authority, Consumer Credit Counseling Service, and the Children's Health Insurance Program will help support employees as they try to re- enter the work force. The Rapid Response team will support workers for six months after they become unemployed, the same report states, citing Mr. Mixer. Headquartered in Nashville, Tennessee, Commissary Operations Inc. dba COI Foodservice Distribution and Manufacturing -- http://www.coifoodservice.com/-- is a multi-facility food service distribution operation and supplier which delivers to more than 1,200 restaurants in 29 U.S. states. For more than 40 years, the company's full-service operation has supplied products to well- known national restaurant chains such as Shoney's, Ryan's and Applebee's. It also provides food or agriculture organization services, common fund for commodities services, international fund for agricultural development services, food distribution services and food supply services. The company has two more centers in West Virginia, and Georgia, other than the one in Tennessee. The company filed for Chapter 11 protection on July 22, 2008 (Bankr. M.D. Tenn. Case No. 08-06279). Barbara Dale Holmes, Esq., David Phillip Canas, Esq., Glenn Benton Rose, Esq., Tracy M. Lujan, Esq., at Harwell Howard Hyne Gabbert & Manner, PC, in Nashville, Tennessee, represent the Debtor. When the Debtor filed for protection from its creditors, it listed both assets and debts between $50 million and $100 million. CUPERTINO SQUARE: Files for Bankruptcy to Stave Off Foreclosure --------------------------------------------------------------- Cupertino Square LLC and its affiliate, Vallco International Shopping Center LLC, filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of California to evade a September 10 foreclosure by their lender Gramercy Capital Corp., Bloomberg News reports. The company listed assets and debts between $100 million and $500 million, Bloomberg relates. "The bankruptcy is to protect the creditors of the estate other than Gramercy," Bloomberg quoted the company counsel, James Evans, Esq., at Fulbright & Jaworski LLP, as saying. Mr. Evans said the Chapter 11 filing will enable the company to maintain its business operation to continue as it restructures debt, report adds. Bloomberg relates that the company and Gramercy's affiliate, Gramercy Warehouse Funding I LLC, improperly declared a default on a loan for the property. Cupertino Square is involved in litigation with its lender over loans to fund renovations for new tenants, the report notes. According to a company official with knowledge of the litigation, the lingering effect of all the legal challenges has hamstrung our effort to revitalize Cupertino Square, Bloomberg says. The company is now seeking a loan to fund operations, says Bloomberg. Headquartered in Cupertino, California, Cupertino Square LLC -- http://www.cupertinosquare.com/-- owns a shopping center. CUPERTINO SQUARE: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Cupertino Square, LLC 19330 Stevens Creek Boulevard, Suite 200 Cupertino, CA 95014 Bankruptcy Case No.: 08-54897 Debtor-affiliate filing separate Chapter 11 petitions: Entity Case No. ------ -------- Vallco International Shopping Center, LLC 08-54901 Type of Business: The Debtors operate a shopping center. Chapter 11 Petition Date: September 2, 2008 Court: Northern District of California (San Jose) Judge: Marilyn Morgan Debtors' Counsel: Richard A. Lapping, Esq. Thelen, Reid and Priest 101 2nd Street, Suite 1800 San Francisco, CA 94105-3601 Tel: (415) 371-1200 Email: rlapping@thelenreid.com Cupertino Square's Financial Condition: Estimated Assets: $100 million to $500 million Estimated Debts: $100 million to $500 million The Debtors did not file lists of their 20 Largest Unsecured Creditors. CUPERTINO SQUARE: Section 341(a) Meeting Slated for October 8 ------------------------------------------------------------- The United States Trustee for Region 17 will convene a meeting of creditors of Cupertino Square, LLC at 10:30 a.m., on Oct. 8, 2008, at San Jose Room 130. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Cupertino, California-based Cupertino Square, LLC operates a shopping center. It filed its chapter 11 petition on Sept. 2, 2008 (Bankr. N.D. Calif. Case No. 08-54897). Judge Marilyn Morgan presides over the case. Richard A. Lapping, Esq., at Thelen, Reid and Priest, represents the Debtor in its restructuring efforts. The Debtor estimated both its assets and debts to be between $100 million and $500 million. DELPHI CORP: Reaches Agreement with Panel & WTC to Stay Process --------------------------------------------------------------- In light of the ongoing negotiations surrounding the Debtors' Chapter 11 cases, Delphi Corp. and its debtor-affiliates, the Official Committee of Unsecured Creditors, and Wilmington Trust Company all agree to stay all further proceedings with respect to the calls for revocation of Delphi's Plan of Reorganization, subject to these terms: * All activity in either the WTC or Committee's complaint under Section 1144 of the Bankruptcy Code will be stayed until the earlier of (i) the service by the Committee or WTC of a written notice terminating the stay with respect to the Revocation Complaint or (ii) further order of the U.S. Bankruptcy Court for the Southern District of New York; * Upon receipt of a notice of termination of stay, the Debtors will have 30, or other period of time as the parties may agree or may be ordered by the Bankruptcy Court, to answer or otherwise file a responsive pleading as to each particular Revocation Complaint. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed $9,162,000,000 in total assets and $23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide $2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News, Issue No. 142; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DELPHI CORP: In Talks to Modify Bankruptcy Exit Plan ---------------------------------------------------- According to Bankruptcy Law360, Delphi Corp. said it is plotting changes to its reorganization plan to try to better position itself to successfully emerge from Chapter 11. Bankruptcy Law360 relates that Delphi's spokesperson, Lindsey Williams, said on Friday the firm is discussing with stakeholders on making the necessary revisions. Delphi has yet to emerge from bankruptcy despite obtaining confirmation of its reorganization plan from the Bankruptcy Court in January 2008, after Appaloosa Management, L.P. and other investors withdrew funding of $2,550,000,000 in exit financing. Delphi has sued Appaloosa, which asserts that its liabilities, if any, is only up to $250,000,000 pursuant to the terms of their deal. Last week, The Wall Street Journal reported that people involved with Delphi's bankruptcy process said that odds are increasing that Delphi will be liquidated, with some U.S. plants being taken over by its former parent, General Motors Corp. Even if a liquidation does not happen, General Motors' financial obligation could grow by billions, WSJ said, citing people familiar with the matter. The Pension Benefit Guaranty Corp. has already asked GM to assume Delphi's pension plan liabilities by Sept. 30, 2008. GM has already agreed to assume $1,500,000,000 of Delphi's pension liabilities but Delphi's pension debts have reached $3,300,000,000 as of the end of 2007. GM also recently agreed to provide additional $300,000,000 loan to Delphi to help address its former unit's liquidity needs. The $300,000,000 loan is in addition to the up to $650,000,000 in extensions of credit which GM had advanced in anticipation of the effectiveness of their Master Restructuring Agreement and Global Settlement Agreement, which is tied up to Delphi's plan of reorganization. GM said in its second quarter 2008 results that its Delphi-related charges have now reached approximately $11,000,000,000. Delphi's $4,100,000,000 debtor-in-possession facility expires Dec. 31, 2008. Delphi refinanced its existing DIP facility in late April to extend the July 1 maturity date to be able to have time to consummate its restructuring. Delphi in May 2008 increased the size of the facility by $254,000,000 following an oversubscription of its three-tranche loans, and unexpected market support. However, according to WSJ, there are indications that its current lenders may balk at renewing the bankruptcy loans. "We've not thrown that word around," Delphi spokesman Lindsey Williams, told WSJ, "If that were our intent, we would not be working as feverishly as we are. We've been going down a lot of avenues to emerge from bankruptcy." Delphi's competitors in the U.S. have been facing similar problems. Progressive Moulded Products, Intermet Corp., Blue Water Automotive Systems, and Plastech Engineered Products, which all have exposure to the Big-3 Michigan automakers -- GM, Corp., Ford Motor Company, and Chrysler LLC -- have filed for bankruptcy protection. Blue Water and Plastech are selling their key assets. Progressive has ceased operations. According to WSJ, Ray Young, the chief financial officer of General Motors, said this month that U.S.' largest auto maker was having a "constructive dialogue" with Delphi, but "they have to understand there is only so much that we can do. They're going to have to do their own form of self help here." According to filings with the U.S. Securities and Exchange Commission, Delphi's pension plan covers about 85,000 and had obligations of $14.05 billion at year-end, but was underfunded by $3.3 billion. WSJ noted that Delphi's DIP financing trades in the secondary market at about 82 cents on the dollar, a discount that indicates doubts about Delphi's solvency. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation (PINKSHEETS: DPHIQ) -- http://www.delphi.com/-- is the single supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology. The company's technology and products are present in more than 75 million vehicles on the road worldwide. Delphi has regional headquarters in Japan, Brazil and France. The company filed for Chapter 11 protection on Oct. 8, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-44481). John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represent the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed $9,162,000,000 in total assets and $23,742,000,000 in total debts. The Court approved Delphi's First Amended Joint Disclosure Statement and related solicitation procedures for the solicitation of votes on the First Amended Plan on Dec. 20, 2007. The Court confirmed the Debtors' First Amended Plan on Jan. 25, 2008. The Plan has not been consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide $2,550,000,000 in equity financing to Delphi. (Delphi Bankruptcy News, Issue No. 142; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) DURA AUTOMOTIVE: SEC Filing Reveals CEO Compensation Package ------------------------------------------------------------ Dura Automotives Systems, Inc. entered into separate executive employment term sheet agreements, on Aug. 29, 2008, with Timothy D. Leuliette, the President and Chief Executive Officer of the Company, and Theresa L. Skotak, the company's Executive Vice President and Chief Administrative Officer, a Securities and Exchange Commission filing disclosed. According to The Detroit Free Press, the agreement provides Mr. Leuliette a $1 million salary, a $44,000 expense account for country club memberships and vehicles, and a $1.5 million bonus depending on company performance. The regulatory filing relates that the executive employment term sheet agreements detailed for the job position and employment and compensation arrangements for each of Mr. Leuliette and Ms. Skotak. The agreements provide for the participation of each executive in the company's Annual Performance Bonus Plan for each calendar year commencing Jan. 1, 2009. The agreements also provide for an at will employment arrangement between the company and each executive, subject to certain severance obligations in the event the company terminates the employment of the executive without cause. Rochester Hills, Michigan-based DURA Automotive Systems Inc. (Nasdaq: DRRA) -- http://www.DURAauto.com/-- is an independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a supplier of similar products to the recreation vehicle and specialty vehicle industries. DURA sells its automotive products to North American, Japanese and European original equipment manufacturers and other automotive suppliers. The company has three locations in Asia -- China, Japan and Korea. It has locations in Europe and Latin-America, particularly in Mexico, Germany and the United Kingdom. The Debtors filed for chapter 11 petition on Oct. 30, 2006, (Bankr. D. Del. Case No. 06-11202). Marc Kieselstein, P.C., Esq., Roger James Higgins, Esq., and Ryan Blaine Bennett, Esq., at Kirkland & Ellis LLP are lead counsels for the Debtors' bankruptcy proceedings. Daniel J. DeFranseschi, Esq., and Jason M. Madron, Esq., at Richards Layton & Finger, P.A. Attorneys are the Debtors' co-counsels. Baker & McKenzie acts as the Debtors' special counsel. Togut, Segal & Segal LLP is the Debtors' conflicts counsel. Miller Buckfire & Co., LLC is the Debtors' investment banker. Glass & Associates Inc., gives financial advice to the Debtor. Kurtzman Carson Consultants LLC handles the notice, claims and balloting for the Debtors and Brunswick Group LLC acts as their Corporate Communications Consultants for the Debtors. As of Jan. 31, 2008, the Debtor had $1,503,682,000 in total assets and $1,623,632,000 in total liabilities. On April 3, 2008, the Court approved the Debtors' revised Disclosure Statement explaining their revised Chapter 11 plan of reorganization. On June 27, 2008, the Debtors emerged from Chapter 11 bankruptcy protection. FAIR OAKS: Case Summary & Three Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Fair Oaks Holdings c/o David Epstein P.O. Box 4858 Laguna Beach, CA 92652 Bankruptcy Case No.: 8-15380 Chapter 11 Petition Date: September 2, 2008 Court: Central District Of California (Santa Ana) Judge: Erithe A. Smith Debtor's Counsel: David G. Epstein, Esq. The David Epstein Law Firm P.O. Box 4858 Laguna Beach, CA 92651 Tel: (949) 715-1500 Total Assets: $1,100,000 Total Debts: $946,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/califcb8-15380.pdf FIRSTLIGHT POWER: Suez Pact Cues S&P to Put Ratings on Watch ------------------------------------------------------------ Standard & Poor's Ratings Services placed FirstLight Power Resources Inc.'s. senior secured $550 million first-lien term loan, $65 million letter of credit facility, and $70 million revolving facility -- all rated 'BB-' -- on CreditWatch with developing implications; S&P took the same action for the 'B-' rated $170 million second-lien facility. The action follows publication of an agreement signed by Suez Energy N.A., a U.S. subsidiary of the French energy company GDF SUEZ S.A. (A/Positive/A-1), to acquire FirstLight Power Enterprises, owner of FirstLight Power and FirstLight Hydro Generating Co. (BB-/Watch Dev) (FirstLight Hydro). "While we view the strong credit quality of the French parent company as potentially credit positive to the FirstLight portfolio, we expect the debt at the FirstLight entities to remain nonrecourse to GDF SUEZ; any change to the business profile (in management, strategy, or execution) could negatively impact the ratings," said Standard & Poor's credit analyst Justin Martin. GDF SUEZ is the recently merged company of Gaz de France S.A. and Suez S.A.; it is one of Europe's largest utilities and currently consists of six business units, including its "Energy Europe and International" business line that wholly owns Suez Energy North America Inc. Among its business lines, SEMNA manages commodity price risk for roughly 3,000 megawatts of merchant energy assets in the U.S. "Although the FirstLight assets are not structurally separated per Standard & Poor's criteria, the nonrecourse nature of the debt at both FirstLight Hydro and FirstLight Power prevents any improvement in the credit quality of these debt issues because project lenders will not be able to benefit from the new parent company's balance sheet. Although GDF SUEZ may voluntarily provide support to the FirstLight portfolio, it would do so at its own discretion. Given the size of FirstLight Power's 2007 EBITDA of roughly $130 million (including FirstLight Hydro), compared with GDF SUEZ's total 2007 EBITDA of $1.9 billion, we recognize the possibility that the acquisition will not viewed as a core asset to the latter and therefore may not receive significant parent support in the event of distress," S&P says. "We will resolve the CreditWatch when we have enough details to form a view on the structural, financial, and operational impact of the acquisition on the FirstLight assets." FORD MOTOR: Names Stephen Odell as Volvo Car's President and CEO ---------------------------------------------------------------- Ford Motor Company disclosed the appointment of Stephen Odell as president and chief executive officer of Volvo Car Corporation, replacing Fredrik Arp, who has decided to leave the company. Effective Oct. 1, Mr. Odell will be responsible for Volvo's global operations out of its headquarters in Gothenburg, Sweden, and lead the company's drive toward sustained profitability through continued restructuring and the accelerated development of high- quality, fuel-efficient and safe vehicles in the premium end of the market. Mr. Odell, who has played a key role in Ford of Europe's resurgence as its chief operating officer, will report to Lewis Booth, executive vice president of Ford Motor Company and chairman of Volvo Car Corporation, who will continue to oversee the strategic direction of Volvo. "Stephen Odell brings to Volvo a wealth of experience of strong leadership in the automotive industry," Alan Mulally, president and CEO, Ford Motor Company, said. "Given his strong track record at Ford, Jaguar and Mazda, the time is now right for Stephen to take up this new challenge at Volvo. I believe that Stephen is the right person -- together with Lewis Booth and the Volvo Cars Management Team -- to take Volvo forward and to return the business to sustainable profitability." Mr. Booth thanked Fredrik Arp for his leadership of Volvo over the past three years, a period in which Volvo reduced costs and strengthened its product lineup despite a difficult business environment and challenges presented by adverse currency exchange rates and other external factors. "Fredrik has steered the Volvo team through some difficult times since joining the company three years ago. His wide experience in business has been a strong asset in helping to develop and implement Volvo's plan to improve its business results. "Fredrik has decided that now is the right time to hand over to a new president and CEO, Stephen Odell, who will lead the Volvo team through the next stage of its recovery." Mr. Odell said he is excited to lead Volvo at an important time in the company's history. "Volvo is one of the great iconic automotive brands," Mr. Odell said. "The very attributes that make Volvo distinctively Swedish -- its heritage of safety, environmental concern and its Scandinavian design -- appeal to customers around the globe. Our strategy is to enhance the premium nature of Volvo by further strengthening these attributes. Volvo really is the auto brand for today's customers. "We have a restructuring plan in place that will help to deliver a more competitive business and that enables Volvo to continue to build upon its core strengths. Volvo will adopt a more stand- alone approach within Ford Motor Company, while still leveraging product development and purchasing synergies with other Ford operations." Before he was appointed chief operating officer of Ford of Europe in April 2008 responsible for product development, manufacturing, purchasing, and marketing, sales and service operations, Odell served as Ford of Europe's vice president of marketing, sales and service for nearly three years. Prior to that, he held several senior level positions at Mazda Motor Corporation from 2000 to 2005. From 1997 to 2000, Odell was vice president, marketing and sales, Jaguar North America. Stephen Odell joined Ford of Britain in 1980 as a graduate trainee. A native of London, he is married with two children. About Ford Motor Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Aug. 5, 2008, Fitch Ratings has downgraded the issuer default rating of Ford Motor Company and Ford Motor Credit Company LLC to 'B-' from 'B'. The Rating Outlook remains Negative. The downgrade reflects: the further deterioration in Ford's U.S. sales as a result of economic conditions, an adverse product mix and the most recent jump in gas prices; portfolio deterioration at Ford Credit and heightened concern regarding economic access to capital to support financing requirements; and escalating commodity costs that will remain a significant offset to cost reduction efforts. FORD MOTOR: Michigan Plant Gets $75MM Infusion to Build Small Cars ------------------------------------------------------------------ Ford Motor Company will invest $75 million in Michigan Truck Plant's body shop to prepare for small-vehicle production. The plant will begin converting its body shop in November when the tooling and equipment specific to the Ford Expedition and Lincoln Navigator will be disassembled and transferred to Kentucky Truck Plant, which begins producing the large SUVs in the second quarter of 2009. The move paves the way for Michigan Truck to convert to a car plant that will begin producing global C-car based vehicles in 2010. In the interim, the plant's 1,000 employees will be transferred next door to Wayne Assembly Plant where a third crew will be added in January to accommodate increased production of the hot-selling Ford Focus. When completed, Michigan Truck's flexibility will allow it to augment current Ford Focus production if necessary. "This is the best plan to meet consumer demand and utilize our assets at Michigan Truck and other facilities, both in the near term and long term," Joe Hinrichs, Ford group vice president, Global Manufacturing and Labor Affairs, said. "Consumers will benefit through increased production of the strong-selling Focus at Wayne, the continuation of the popular Expedition and Navigator for those who need a large SUV at Kentucky Truck, and more world- class C-cars at Michigan Truck." Michigan Truck is one of three truck and SUV plants in North America that will be converted to build small fuel-efficient compact and subcompact vehicles. In 2010, Cuautitlan Assembly, which currently produces F-Series pickups, will begin building the new Fiesta subcompact car for North America. Louisville Assembly, home of the Ford Explorer mid-size SUV, is slated to start production of yet more unique small vehicles from the automaker�s global C-car platform the following year. At the heart of this manufacturing transformation is a flexible operation, which uses reprogrammable tooling in the body shop, standardized equipment in the paint shop and common-build sequence in final assembly, enabling production of multiple models in the same plant. Aiding the implementation of flexible manufacturing is Ford's industry-leading virtual manufacturing technology. In the virtual world, engineers and plant operators evaluate tooling and product interfaces before costly installations are made on the plant floor. This method of collaboration improves launch quality and enables speed of execution. In a flexible body shop, at least 80% of the robotic equipment can be reprogrammed to weld various sized vehicles. This "non-product specific" equipment gives the body shop its flexibility and provides more efficient use of the facility. In 2005, Ford invested $300 million in Michigan Truck to build a new, flexible body shop. That investment will help streamline the conversion to small vehicles and will require an additional body shop investment of approximately $75 million. This is part of a larger investment planned for the plant. Meanwhile, Ford continues to work with state and local governments on the scope of incentive support. Today, nearly 87% of Ford's assembly plants around the world have flexible body shops. By 2012, the number will grow to 100%. * Michigan Truck Plant Facts Location: Wayne, Michigan Number of Employees: 1,000 Year Opened: 1957 Plant Size (Sq. Ft.): 2,866,000 Current Products: Ford Expedition, Lincoln Navigator Future Products: Small vehicles based on Ford's global C-car platform About Ford Motor Co Headquartered in Dearborn, Michigan, Ford Motor Co. (NYSE: F) -- http://www.ford.com/-- manufactures or distributes automobiles in 200 markets across six continents. With about 260,000 employees and about 100 plants worldwide, the company's core and affiliated automotive brands include Ford, Jaguar, Land Rover, Lincoln, Mercury, Volvo, Aston Martin, and Mazda. The company provides financial services through Ford Motor Credit Company. The company has operations in Japan in the Asia Pacific region. In Europe, the company maintains a presence in Sweden, and the United Kingdom. The company also distributes its brands in various Latin-American regions, including Argentina and Brazil. * * * As reported in the Troubled Company Reporter on Aug. 5, 2008, Fitch Ratings has downgraded the issuer default rating of Ford Motor Company and Ford Motor Credit Company LLC to 'B-' from 'B'. The Rating Outlook remains Negative. The downgrade reflects these: (i) the further deterioration in Ford's U.S. sales as a result of economic conditions, an adverse product mix and the most recent jump in gas prices; (ii) portfolio deterioration at Ford Credit and heightened concern regarding economic access to capital to support financing requirements; and (iii) escalating commodity costs that will remain a significant offset to cost reduction efforts. FORT POINT: Collateral Slide Cues Fitch to Junk Four Note Ratings ----------------------------------------------------------------- Fitch has downgraded and removed from Rating Watch Negative seven classes of notes issued by Fort Point Funding CDO I Ltd. and Fort Point Funding CDO I Corp. These rating actions are the result of Fitch's review process and are effective immediately: -- $169,283,182 class A-1 notes to 'A' from 'AAA'; -- $33,000,000 class A-2a notes to 'B' from 'A+'; -- $12,000,000 class A-2b notes to 'B' from 'A+'; -- $14,000,000 class A-3a notes to 'CCC' from 'BBB'; -- $12,000,000 class A-3b notes to 'CCC' from 'BBB'; -- $12,127,144 class B notes to 'C' from 'BB+'; -- $12,334,000 class C notes to 'C' from 'B-'. Fitch's rating actions reflect the collateral deterioration within the portfolio, specifically subprime residential mortgage backed securities and structured finance collateralized debt obligations with underlying exposure to subprime RMBS. Fort Point I is a cash flow CDO, which closed in October 2002 and has a portfolio that was initially selected by State Street Research and is now managed by BlackRock Financial Management. The transaction's revolving period ended in October 2006. Presently, 24.7% of the portfolio is comprised of 2005, 2006 and 2007 vintage U.S. subprime RMBS, 9.1% is comprised of 2005, 2006, and 2007 vintage U.S. Alternative-A RMBS, and 1.6% consists of pre-2005 and 2005 vintage U.S. SF CDOs. Since the last rating action in November 2007, 37.8% of the portfolio has been downgraded with an additional 12.3% of the portfolio currently on Rating Watch Negative. Approximately 42.1% of the portfolio is now rated below investment grade, of which 22.2% is rated 'CCC+' and below. As per the latest Trustee report dated Aug. 19, 2008, defaulted and deferred interest PIK securities constitute 4.6%, or $13.12 million, of the portfolio total. The negative credit migration experienced since the last review has resulted in the Weighted Average Rating Factor deteriorating to 'B/B-' from 'BB+/BB' during the last review, breaching its covenant of 'BB/BB-', as of the latest trustee report. The collateral deterioration has caused each of the overcollateralization ratios to fall below their respective tests. As of the latest trustee report, the class A OC ratio was 103.5%, the class B OC ratio was 99.8%, and the class C OC ratio was 95.5% versus triggers of 105.0%, 103.50%, and 101.3%, respectively. Class A-1, A-2, and A-3 are receiving interest payments and all other interest and principal proceeds are then used to redeem class A-1 principal due to coverage test failures. On the last payment date of Aug. 25, 2008, the class A OC test was not cured in the waterfall thus all remaining proceeds were distributed as principal to class A-1 in an attempt to cure the test. Classes B and C are currently receiving their interest paid in kind whereby the principal amount is written up by the amount of interest owed. Fitch expects the class B and C notes to have very little prospect of any principal recovery. The ratings of the class A-1, A-2a, A-2b, A-3a, and A-3b notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the class B and class C notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings are based upon the capital structure of the transaction, the quality of the collateral, and the protections incorporated within the structure. FORT POINT: Fitch Slashes 'A' Rating to 'CCC' on $60 Million Notes ------------------------------------------------------------------ Fitch has downgraded and removed from Rating Watch Negative five classes of notes issued by Fort Point Funding CDO II Ltd. and Fort Point Funding CDO II Corp. These rating actions are the result of Fitch's review process and are effective immediately: -- $320,015,455 Class A-1 Notes downgraded to 'BB' from 'AAA'; -- $60,000,000 Class A-2 Notes downgraded to 'CCC' from 'A'; -- $38,750,000 Class A-3 Notes downgraded to 'CC' from 'BBB'; -- $12,883,697 Class B Notes downgraded to 'C' from 'BB+'; -- $12,954,756 Class C Notes downgraded to 'C' from 'BB'. Fitch's rating actions reflect the collateral deterioration within the portfolio, specifically subprime residential mortgage backed securities and structured finance collateralized debt obligations with underlying exposure to subprime RMBS. Fort Point II is a cash flow CDO, which closed in October 2003 and has a portfolio that was initially selected by State Street Research and is now managed by BlackRock Financial Management. The transaction's revolving period ended in November 2007. Presently, 32.9% of the portfolio is comprised of 2005, 2006 and 2007 vintage U.S. subprime RMBS, 9.6% is comprised of 2005, 2006, and 2007 vintage U.S. Alternative-A RMBS, and 23.5% consists of 1.5% consists of pre-2005 and 2005 vintage U.S. SF CDOs. Since the last rating action in November 2007, 46.3% of the portfolio has been downgraded with an additional 15.7% of the portfolio currently on Rating Watch Negative. Approximately 41.7% of the portfolio is now rated below investment grade, of which 23.6% is rated 'CCC+' and below. As per the latest Trustee report dated July 30th, 2008, defaulted and deferred interest PIK securities constitute 10.2%, or $47. 86 million, of the portfolio total. The negative credit migration experienced since the last review has resulted in the Weighted Average Rating Factor deteriorating to 'BB+/BB' from 'BBB/BBB-' during the last review, breaching its covenant of 'BBB/BBB-', as of the latest trustee report. The collateral deterioration has caused each of the overcollateralization ratios to fall below 100% and fail their respective tests. As of the latest trustee report, the class A OC ratio was 97.0%, the class B OC ratio was 94.2%, and the class C OC ratio was 91.4% versus triggers of 106.0%, 104.0%, and 100.2%, respectively. Class A-1, A-2, and A-3 are receiving interest payments and all other interest and principal proceeds are then used to redeem class A-1 principal due to coverage test failures. Classes B and C are receiving interest payments in kind whereby the principal balance is written up by the amount of interest owed. Fitch sees little prospect of any principal recovery for class B and class C. The ratings of the class A-1 notes, class A-2 notes, and class A-3 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings of the class B notes and class C notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the legal final maturity date. The ratings are based upon the capital structure of the transaction, the quality of the collateral, and the protections incorporated within the structure. GALLAHANS OF FREDERICKSBURG: Fails to Meet Goals; Will Close ------------------------------------------------------------ Gallahans of Fredericksburg didn't meet its goals and will be closing after a going-out-of-business sale expected to run through October, Clint Engel at Furniture Today reports, citing James Shrawder, president and majority stakeholder of the firm's owner, Severegn Furniture Management. Furniture Today relates that Gallahans escaped bankruptcy in 2007 under a slightly different name and different owner. In January that year, Severegn Furniture acquired some of the assets of Gallahans Home Furnishings and acquired the lease on the store from Stone-Lee, the report says. Mr. Shrawder said in a press release, "Our business plan called for a 12- to 18-month turnaround effort and although expenses were reduced and sales are up 8% this year over last year, Gallahans just simply fell short of our performance requirements." According to Furniture Today, Mr. Shrawder had projected that sales from the Gallahans showroom could reach $20 million in 2007. Furniture Today states that Mr. Shrawder indicated that current economic climate might have been a factor in closing Gallahans. "We believe that it is financially irresponsible to continue business as usual based on the hope that the economy will turn any time soon," the report quoted Mr. Shrawder as saying. Mr. Shrawder said that Severegn Furniture will keep supporting Gallahans until all orders are delivered and all customer service issues are resolved, Furniture Today reports. Gallahans of Fredericksburg sells furniture in Fredericksbrg, Vancouver. GENERAL MOTORS: Offering Retirement Incentives to Workers --------------------------------------------------------- Reuters reports that General Motors Corp. is offering early retirement incentives to about 28% of its 32,000 U.S. work force, as part of its effort to reduce payroll expenses and conserve cash. GM spokesperson Dan Flores said on Friday that the offers would be made to workers in areas where the firm wants to reduce work force, KansasCity.com relates. According to Reuters, a person familiar with the plan said that the incentives were offered to about 9,000 workers, who are given 45 days to consider the package. GM spokesperson Tom Wilkinson said that workers eligible for the incentives will receive sealed, individualized offers based on age, years of service and work history, Free Press states. The retirement incentives GM is offering includes an option to roll over lump-sum severance payments into employees' 401(k) plans or Individual Retirement Accounts, Jeff Green at Bloomberg News relates, citing Mainstay Capital Management, LLC's Chief Executive Officer and Chief Investment Strategist, David Kudla. GM said on July 15 it would cut 20% of its salaried-worker costs in the U.S. and Canada by Nov. 1, according Edomonton Journal. GM aims to boost liquidity by $15 billion through the end of 2009, Bloomberg states. About General Motors Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/-- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. At March 31, 2008, GM's balance sheet showed total assets of $145,741,000,000 and total debts of $186,784,000,000, resulting in a stockholders' deficit of $41,043,000,000. Deficit, at Dec. 31, 2007, and March 31, 2007, was $37,094,000,000 and $4,558,000,000, respectively. General Motors Latin America, Africa and Middle East, with headquarters in Miramar, Florida, is one of GM's four regional business units. GM LAAM employs approximately 37,000 people in 18 countries and has manufacturing facilities in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa and Venezuela. GM LAAM markets vehicles under the Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Opel, Saab and Suzuki brands. GSC ABS: Fitch Junks Ratings on Three Classes of Notes ------------------------------------------------------ Fitch Ratings has downgraded, assigned Distressed Recovery ratings, and removed from Rating Watch Negative six classes of notes issued by GSC ABS CDO 2006-4u Ltd. These rating actions are effective immediately: --$470,328,757 class A-S1VF notes to 'CC/DR5' from 'BBB-'; --$85,000,000 class A1 notes to 'C/DR6' from 'BB-'; --$45,000,000 class A2 notes to 'C/DR6' from 'B-'; --$45,000,000 class A3 notes to 'C/DR6' from 'CC'; --$33,000,000 class B notes to 'C/DR6' from 'CC'; --$10,000,000 class C notes to 'C/DR6' from 'CC'. Fitch's rating actions reflect the collateral deterioration within the portfolio, specifically from subprime residential mortgage backed securities (RMBS). GSC ABS CDO 2006-4u, Ltd. is a hybrid cash and synthetic arbitrage collateralized debt obligation (CDO) which closed Oct. 6, 2006, and is managed by GSC Group. The portfolio is composed primarily of subprime RMBS (94.4%) and 2006 vintage Structured Finance (SF) CDOs with exposure to subprime RMBS (4.8%). Subprime RMBS of the pre-2005, 2005, 2006, and 2007 vintages account for approximately 0.3%, 40.8%, 51.6%, and 1.7% of the portfolio, respectively. Since the last review conducted in November 2007, approximately 81.3% of the portfolio has been downgraded. The portion of the portfolio rated below investment grade is now 94.8% while 4.1% of the portfolio is currently on Rating Watch Negative. As of Oct. 31, 2007 the deal entered an Event of Default as a result of the sum of the net outstanding portfolio collateral balance and the balance of the short synthetic security reserve account totaling less then the sum of the commitment amount pus the aggregate outstanding amount of the class A-A1VF notes plus the aggregate outstanding amount of the class A1 notes. On Nov. 5, 2007, the Majority of the controlling class notified the trustee of an acceleration of maturity. Consequently, interest proceeds that would otherwise be payable to the classes A-1, A-2, A-3, B, and C are being diverted to the guaranteed investment contract (GIC) account in reduction of class A-S1VF as the remaining unfunded notional amount. Fitch expects classes A1, A2, A3, B, and C notes to receive no future interest or principal. The ratings of the class A-S1VF, A1 and A2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. The ratings of the class A3, B and C notes address the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the aggregate outstanding amount of principal by the stated maturity date. Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. Fitch will continue to monitor and review this transaction for future rating adjustments. HIGHGATE LTC: Court Approves Asset Sale to Oasis HC for $22 Mil. ---------------------------------------------------------------- The Hon. Robert E. Littlefield, Jr. of the United States Bankruptcy Court for the Northern District of New York approved the sale of substantially all of the assets of Highgate LTC Management LLC and its debtor-affiliate to Oasis HC LLC, under an asset purchase agreement dated Aug. 12, 2008, proposed by Marck I. Fishman, the appointed Chapter 11 Trustee of the Debtors' cases. Oasis HC will pay $22 million, subject to any adjustments, to the Chapter 11 Trustee. The closing will be held at the offices of Moritt Hock Hamroff & Horowitz LLP at 400 Garden City Plaza in Garden City, New York. According to Bloomberg News, secured lender General Electric Capital Corp. will use $1.6 million from the purchase price to complete a settlement with the New York State Department of Health. The Debtors owe $23 million in claims to GECC. The Debtors, Bloomberg relates, valued the assets between $32 million and $40 million. The Chapter 11 Trustee will be paid $750,000 from the purchase price as part of the transaction. Marcus and Millichap was retained by the Chapter 11 Trustee to market the Debtors' assets. A full-text copy of the Debtors' asset purchase agreement dated Aug. 12, 2008, is available in two parts for free at: http://ResearchArchives.com/t/s?3193 http://ResearchArchives.com/t/s?3194 About Highgate LTC Headquartered in Niskayuna, New York, Highgate LTC Management LLC operates nursing homes. The company and its affiliate, Highgate Manor Group, LLC, filed for Chapter 11 protection on April 16, 2007 (Bankr. N.D.N.Y. Lead Case No.07-11068). J. Ted Donovan, Esq., at Finkel Goldstein Rosenbloom & Nash, LLP, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 2 appointed creditors to serve on an Official Committee of Unsecured Creditors. Robert C. Yan, Esq., at Farrel Fritz P.C., represents the Committee. The Court appointed Mark I. Fishman, Esq., at Neubert, Pepe & Monteith, P.C., as Chapter 11 Trustee following allegations that the Debtors violated several health laws and falsified records. When the Debtors filed for protection from their creditors, they listed assets of less than $50,000 and debts between $1 million and $100 million. HSPI DIVERSIFIED: Moody's Further Junks Ratings on Senior Notes --------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of four classes of notes issued by HSPI Diversified CDO Fund I, Ltd., and left on review for possible further downgrade rating of one of these classes of notes as: Class Description: U.S. $22,900,000 Class S Senior Secured Floating Rate Notes due 2014 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: U.S. $384,000,000 Class A-1 Advance Swap Agreement, dated December 12, 2006 -- Prior Rating: Caa2, on review for possible downgrade -- Current Rating: Ca Class Description: U.S. $52,000,000 Class A-2 Senior Secured Floating Rate Notes due 2052 -- Prior Rating: Ca -- Current Rating: C Class Description: U.S. $77,000,000 Class A-3 Senior Secured Floating Rate Notes due 2052 -- Prior Rating: Ca -- Current Rating: C HSPI Diversified CDO Fund I, Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. The transaction experienced, as reported by the Trustee on May 12, 2008, an event of default caused by a failure of the Class A-2 Par Value Ratio to be greater than or equal to 90%, as described in Section 5.1(g) of the Indenture dated Dec. 12, 2006. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken with regards to the Class A-1 Advance Swap Agreement, the Class A-2 Notes and the Class A-3 Notes reflect continuing deterioration in the credit quality of the underlying portfolio and the increased expected loss associated with the transaction. Losses are attributed to diminished credit quality on the underlying portfolio. Moody's decision to downgrade the rating of the Class S Notes reflects the risk that liquidation of the Collateral may be selected as the post-Event of Default remedy by the controlling parties. The liquidation of the CDO collateral may result in a probability of repayment and a severity of loss that are inconsistent with an investment-grade rating. INOVA TECHNOLOGY: Malone & Bailey Expresses Going Concern Doubt --------------------------------------------------------------- Malone & Bailey, PC, raised substantial doubt about the ability of Inova Technology, Inc., to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2008. According to the auditing firm, Inova requires significant amount of cash in its operations and does not have sufficient cash to fund its operations for the next 12 months, which raises substantial doubt about its ability to continue as a going concern. Inova incurred recurring losses from continuing operations of $651,752 and $540,649 in 2008 and 2007, respectively, has a working capital deficit of $2,719,959 and has an accumulated deficit of $1,653,351. These conditions raise substantial doubt as to Inova's ability to continue as a going concern. To address these concerns, Inova's management is trying to raise additional funds and continue to increase revenues from its current businesses. The company posted a net loss of $976,062 on total revenues of $5,442,402 for the year ended April 30, 2008, as compared with a net loss of $1,692,123 on total revenues of $1,615,187 in the prior year. Result of Operations Total revenues net sales increased from $1,615,187 for the 12 months ended April 30, 2007, to $5,442,402 for the 12-month period ended April 30, 2008. This is primarily the result of revenues produced from the acquisition of Desert Communications. Desert was acquired on Dec. 21, 2007; therefore the revenue for Inova for the 12 months ended April 30, 2008, only includes revenue from Desert for the period from Dec. 21, 2007, to April 30, 2008. The company's selling, general and administrative expenses increased from $1,546,551 for the 12 months ended April 30, 2007, to $2,195,557 for the same period in 2008. This is primarily the result of the expenses from Desert. Last fiscal year, the company reported a net loss from continuing operations in the amount of $540,649; this loss increased to $976,062 for the fiscal year ended April 30, 2008. Much larger interest expenses caused the increased operating losses based on the significant borrowings associated with acquisitions. The company expects revenues to continue to increase as a result of the acquisition of Desert. In addition, once the company pays off the debt incurred to acquire Desert, cash flow should improve considerably. Liquidity and Capital Resources The company's operating activities for the 12 months ended April 30, 2008, did not generate adequate cash to meet its operating needs and was partly funded by borrowing of cash from related parties. As of April 30, 2008, the company had cash and cash equivalents totaling $12,167. Management believes existing cash together with any cash generated from operations will be not be sufficient to meet normal operating requirements including capital expenditures for the next 12 months. The company may need to sell additional equity or debt securities or obtain credit facilities to further enhance its liquidity position and finance acquisitions, and the sale of additional equity securities could result in additional dilution to its stockholders. Balance Sheet At April 30, 2008, the company's balance sheet showed $10,484,356 in total assets, $9,082,408 in total liabilities, and $1,401,948 in total stockholders' equity. The company's consolidated balance sheet at April 30, 2008, showed strained liquidity with $3,550,316 in total current assets available to pay $6,270,275 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?319a About Inova Technology Based in Santa Monica, Calif., Inova Technology, Inc. (Other OTC: IVTH) -- http://www.inovatechnology.com/-- develops and sells radio frequency identification products and services. Inova is focused on developing solutions that prevent counterfeit of luxury goods and pharmaceuticals. INTEGRATED MEDIA: March 31 Balance Sheet Upside-Down by $10.4 MM ---------------------------------------------------------------- Integrated Media Holdings Inc. filed on Aug. 25, 2008, an amendment to its Quarterly Report on Form 10-QSB for the period ended March 31, 2008. The quarterly report was originally filed with the Securities and Exchange Commission on May 20, 2008. In connection with the company's audit of TeleChem International Inc. for the years ended Dec. 31, 2007 and 2006, management uncovered that: a) The Pediatrix legal suit continued to remain in mediation and therefore management determined it was no- longer appropriate to defer legal costs associated with the defence of the legal suit. b) On May 19, 2008, the company incurred a default judgment for outstanding invoices including interest thereon, relating to prior periods. c) Warrants issued on Jan. 19, 2008, were not reflected in the financial statements for the three months ended March 31, 2008. d) Reverse merger accounting was refined. At March 31, 2008, the company's restated balance sheet showed consolidated assets of $1,457,742, consolidated liabilities of $11,898,487, resulting in a consolidated stockholders' deficit of $10,440,745. The company's restated balance at March 31, 2008, also showed strained liquidity with $1,145,892 in total current assets available to pay $10,124,657 in total current liabilities. The company reported a restated net loss of $400,176 on total revenues of $852,372 for the first quarter ended March 31, 2008, compared with a restated net loss of $729,287 on total revenues of $1,020,749 in the same period of 2007. Cost of sales were $762,842 and $614,273 and gross profits were $89,530 and $406,476 for the three months ended March 31, 2008, and 2007, respectively. During the first quarter of 2008 management of the company continued to be distracted by the Pediatrix legal suit resulting in less than anticipated results. With the conclusion of the legal action, the company anticipates a return to higher sales and the improved gross margins experienced in former years. Legal expenses of $22,953 were incurred during the three months ended March 31, 2008, which were significantly less than the $726,553 incurred during the three months ended March 31, 2007. The conclusion of the trial stage of the Pediatrix law suit during 2007 accounts for most of the reduction. The three months ended March 31, 2007, include income from discontinued operations of $441,154 resulting from the Endavo, Bidchaser and WV Fiber subsidiaries. Full-text copies of the company's consolidated financial statements for the quarter ended March 31, 2008 (as restated), are available for free at http://researcharchives.com/t/s?3199 Going Concern Doubt IMHI has a working capital deficit of $8,978,765, a stockholders' deficit, and recurring net losses. These factors create substantial doubt about IMHI's ability to continue as a going concern. About Integrated Media Headquartered in Sunnyvale, Calif., Integrated Media Holdings Inc. (OTC BB: IMHI) -- http://www.arrayit.com/-- is a holding company. Through its merger with TeleChem International Inc., the company has undertaken a new strategic and business direction to become primarily a biotechnology company. TeleChem's business activities are in the life sciences, chemical trading and disease diagnostics areas. TeleChem's chemicals division provides customers with the raw materials required for plastics, water soluble fertilizers, and alternative fuels. TeleChem entered the biotechnology sector with the creation of the Arrayit(R) Life Sciences Division in 1996. Because of the public interest in the Human Genome Project and microarray technology, TeleChem focused on micro-array products and services for the research, pharmaceutical and diagnostics markets. INTERSTATE BAKERIES: In Final Stages of Negotiating Ch. 11 Plan --------------------------------------------------------------- In a regulatory filing with the Securities and Exchange Commission dated Sept. 2, 2008, Interstate Bakeries Corporation disclosed that is "in the final stages" of negotiating with certain parties, a plan of reorganization and the terms of their debtor-in-possession financing, which will enable the company to emerge from Chapter 11 as a stand-alone entity rather than having to liquidate. Kent B. Magill, IBC's executive vice president, general counsel and corporate secretary, disclosed that, pursuant to the agreements, lenders under IBC's DIP credit facility would agree to extend the term and increase the amounts available for the company under the DIP Facility, upon reaching an agreement-in- principle with a proposed equity sponsor of the reorganization plan. Mr. Magill, however, noted that while recent negotiations have narrowed issues among parties with respect to terms of a final reorganization plan of IBC, it is possible that a final agreement may not be realized, absent compromises reached from many of the plan's constituencies. Similarly, with certain issues that remain unresolved, final terms and implementation of the agreements cannot be assured, Mr. Magill said. To recall, IBC closed on its amended and restated DIP revolving credit agreement in May 2008, with, among other lender parties, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent. Under the terms of the Amended and Restated DIP Agreement, the amount available for borrowing has been increased from $200,000,000 to $249,700,000. The Agreement will mature on Sept. 30, 2008. In August 2008, the International Brotherhood of Teamsters said it had successfully negotiated a "new financial plan" between third-party investor, Ripplewood Holdings, a New York-based hedge fund, and creditors of IBC, to save the company from liquidation. The Teamsters said the deal is critical to IBC's recovery from bankruptcy, and to the job security of the company's 9,500 Union- represented employees. 2008 Annual Report Will be Delayed IBC's Board of Directors is hopeful that the required parties will reach agreement within the next few days, so that the company can file its annual financial report for the year ended May 31, 2008. Failure to increase the amounts available and extend the term of the company's DIP Facility would have a material impact on, among other things, IBC's liquidity and the valuation of its assets, which would need to be reflected in the Annual Report so as to ensure it is not misleading, Mr. Magill said. "[W]e expect to report significant adverse changes to our results of operations for the fiscal year ended May 31, 2008 compared to the fiscal year ended June 2, 2007," Mr. Magill further explained. "Our fiscal 2008 financial results continued to decline significantly as a result of challenges associated with, among other things: (i) operating our business under the restrictions imposed by the Chapter 11 process and in compliance with the limitations contained in the DIP Facility; (ii) reduced demand for our products; (iii) declining revenue; (iv) significant upward cost pressure, including with respect to commodity prices; (v) intense price competition; (vi) substantial and largely fixed costs associated with our production and distribution facilities; and (vii) rising labor costs." Because any failure to extend the maturity date and increase the amounts available to IBC under the DIP Facility as contemplated would have a material impact on the going concern nature of the company's financial statements, we are unable to provide a reasonable estimate of results at this time, Mr. Magill disclosed. The company expects to file its Annual Report on Form 10-K on Sept. 15, 2008. About IBC 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. (Interstate Bakeries Bankruptcy News, Issue No. 106; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000). JOHN HURLEY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Lead Debtor: John A. Hurley Janice L. Hurley 332 South Peralta Hills Drive Anaheim Hills, CA 92807 Bankruptcy Case No.: 08-15285 Chapter 11 Petition Date: August 29, 2008 Court: Central District of California Judge: Theodor Albert Debtors' Counsel: Paul V. Reza, Esq. (pvr@apcx.net) 30131 Town Center Drive, Suite 247 Laguna Niguel, CA 92677 Tel: (949) 496-0718 Fax: (949) 496-7654 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 A copy of the Debtor's petition is available for free at: http://bankrupt.com/misc/cacb08-15285.pdf KAMAYAN HOLDINGS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Kamayan Holdings, LLC 2105 Sidney Baker Kerrville, TX 78028 Bankruptcy Case No.: 08-52518 Chapter 11 Petition Date: August 29, 2008 Court: Western District of Texas (San Antonio) Judge: Ronald B. King Debtor's Counsel: William R. Davis, Jr., Esq. Langley & Banack, Inc. 745 E. Mulberry Ave., Ste. 900 San Antonio, TX 78212 Tel: (210) 736-6600 Fax: (210) 735-6889 Email: wrdavis@langleybanack.com Estimated Assets: $2,989,262 Estimated Debts: $2,509,937 A copy of Kamayan Holdings, LLC's petition is available for free at: http://bankrupt.com/misc/txwb08-52518.pdf KENT FUNDING: Moody's Further Junks Ratings on Three Senior Notes ----------------------------------------------------------------- Moody's Investors Service has downgraded the ratings of four classes of notes issued by Kent Funding II, Ltd. and left on review for possible further downgrade the ratings of two of these classes of notes as: Class Description: U.S. $8,000,000 Class X Senior Secured Interest Only Notes due 2011 -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: Ba1, on review for possible downgrade Class Description: U.S. $1,100,000,000 Class A-IA Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Ba1, on review for possible downgrade -- Current Rating: Caa1, on review for possible downgrade Class Description: U.S. $63,000,000 Class A-2 Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Ca -- Current Rating: C Class Description: U.S. $51,700,000 Class B Senior Secured Floating Rate Notes due 2046 -- Prior Rating: Ca -- Current Rating: C Kent Funding II, Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. The transaction experienced, as reported by the Trustee on June 11, 2008, an event of default as described in Section 5.1(i) of the Indenture dated May 9, 2006. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. The rating actions taken with regards to the Class A-1A Notes, the Class A-2 Notes and the Class B Notes reflect continuing deterioration in the credit quality of the underlying portfolio and the increased expected loss associated with the transaction. Losses are attributed to diminished credit quality on the underlying portfolio. Moody's decision to downgrade the rating of the Class X Notes reflects the risk that liquidation of the Collateral may be selected as the post-Event of Default remedy by the controlling parties. The liquidation of the CDO collateral may result in a probability of repayment and a severity of loss that are inconsistent with an investment-grade rating. The remaining rating downgrades taken reflect the increased expected loss associated with each tranche. KRIS INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Kris International, LLC 5193 Peachtree Industrial Blvd Atlanta, GA 30341 Bankruptcy Case No.: 08-77267 Type of Business: The Debtor operates a wholesale market offering imported and organic fruits and vegetables. Fresh seafood, wines, beer and other beverages from around the world are also available, as well as unique food items from practically every country and culture around the globe. Chapter 11 Petition Date: September 1, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: William L. Rothschild, Esq. (br@eorlaw.com) Ellenberg, Ogier, Rothschild & Rosenfeld 170 Mitchell Street, S.W. Atlanta, GA 30303-3424 Tel: (404) 525-4000 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of the Debtor's petition, which includes a list of its 20 largest unsecured creditors, is available for free at: http://bankrupt.com/misc/ganb08-77267.pdf LANDSOURCE COMMUNITIES: Sec. 341 Meeting Rescheduled to Sept. 9 --------------------------------------------------------------- The first meeting of creditors of LandSource Communities Development LLC and its debtor affiliates pursuant to Section 341 of the Bankruptcy Code, has been rescheduled to September 9, 2008, at 2:00 p.m. The Meeting will be held at the U.S. Federal Building; 844 King Street, Room 2112, in Wilmington, Delaware. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About 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. 11; http://bankrupt.com/newsstand/or 215/945-7000). LEHMAN BROTHERS: KDB Proposes to Acquire 25% Stake, Report Says --------------------------------------------------------------- Korea Development Bank has proposed to acquire a 25% stake in U.S. investment bank Lehman Brothers Holdings Inc., reports citing Chosun Ilbo, South Korea's largest mass-circulation daily, say. Dow Jones reports that KDB is prepared to pay at least $4.4 billion for the stake. Associate Press say KDB could offer as much as $5.3 billion. Korea Development Bank is in talks to buy a stake in the securities firm, Chief Executive Officer Min Euoo Sung said, according to Bloomberg News. He refused to comment further. According to Dow Jones KDB has proposed to ask for the right to subsequently increase its stake in Lehman Brothers to 40% to 50% and for the separation of Lehman's bad assets. The segregation will be done by creating a "bad bank" and write down as much as possible on non-risk assets through due diligence before investing, Dow Jones reports citing Chosun Ilbo. Observers are advising KDB to bid with caution. As reported by the TCR on Aug. 28, 2008, analyst told the Wall Street Journal that Lehman Brother may incur at least $2 billion in net loss and more than $3 billion in write-downs in the present quarter that would subject Richard Fuld Jr., chairman and chief executive officer of Lehman Brothers, under pressure to improve the firm's financial health by mid-September. KDB could bid against one of the top three major U.S.-based hedge funds, HSBC and a Chinese bank to acquire a stake in Lehman, the report said. Lehman has been struggling to keep up with the losses it had to take in marking to market its mortgage assets, and is exploring options to raise capital. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private investment management, asset management and private equity. The firm is headquartered in New York, with regional headquarters in London and Tokyo, and operates in a network of offices around the world. LE JARDIN: Files for Chapter 11 Bankruptcy in Georgia ----------------------------------------------------- Le Jardin LLC and four of its affiliates filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Georgia to stave off a foreclosure, Bloomberg News reports. In August, secured lender Fairfield Financial Services Inc. initiated a foreclosure on the company's project, Bloomberg says. Its secured lender set to foreclose the project on Sept. 2, 2008, the report notes. The company listed assets and debts between $10 million and $50 million each, Bloomberg says. The company owes $7 million to unsecured creditors including Ruppert Nurseries Inc. owed $1.5 million in claims, the report adds. Bloomberg, citing papers filed with the Court, says the company filed to protect their interest in the project and to use the provisions available under Chapter 11. Based in Atlanta, Le Jardin LLC, is a property developer. L.I.D. LTD: U.S. Trustee Wants Counsel's Compensation Held Back --------------------------------------------------------------- Diana Adams, the U.S. Trustee for Region 2, objects to the final fee application by Avrum J. Rosen PLLC in L.I.D. Ltd.'s Chapter 11 case. The Law Offices of Avrum Rosen, the counsel for the Debtor, had asked the U.S. Bankruptcy Court for the Southern District of New York for approval of its final fee application, for services it rendered to the Debtor during the period between Aug. 1, 2007 to July 23, 2008. The total fees amounted to $519,500, plus expenses of $31,823. Ms. Adams asks the Court to reduce any fees awarded to Avrum Rosen by a percent reduction pending the final resolution of the Debtor's case. She says that the firm's results achieved in this case are still unknown, and that the Debtor's Chapter 11 plan has not yet been confirmed. Thus, a reduction of the said amounts would be currently proper, pending final fee applications for all professionals. Based in New York, L.I.D. Ltd., a jeweler, filed for Chapter 11 protection on March 17, 2007 (Bankr. S.D. N.Y. Case No. 07-10725). Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen and Rochelle R. Weisburg, Esq., at Shiboleth, Yisraeli, Roberts & Zisman LLP represent the Debtor in its restructuring efforts. No case trustee, examiner, or official committee of unsecured creditors has been appointed in the case. When the Debtor sought protection from its creditors, it listed total assets of $157,784,935 and total debts of $143,867,465. LINEAR TECHNOLOGY: June 29 Balance Sheet Upside-Down by $433.9MM ---------------------------------------------------------------- Linear Technology Corp.'s consolidated balance sheet at June 29, 2008, showed $1.58 billion in total assets and $2.02 billion in total liabilities, resulting in a $433.9 million stockholders' deficit. The company reported net income of $387.6 million on revenues of $1.17 billion for the year ended June 29, 2008, compared with net income of $411.7 million on revenues of $1.08 billion for the year ended July 1, 2007. The increase in revenue was primarily due to the company selling more units into the industrial, communication, automotive, military and computer end-markets while the high-end consumer end- market decreased slightly. The average selling price ("ASP") for fiscal year 2008 decreased slightly to $1.56 per unit compared to $1.60 per unit in fiscal year 2007. Gross profit for the fiscal year ended June 29, 2008 was $908.1 million, an increase of $66.6 million or 8% over gross profit of $841.6 million in fiscal year 2007. Gross profit as a percentage of revenues was 77.3% of revenues in fiscal year 2008 as compared to 77.7% of revenues in fiscal year 2007. The decrease in gross profit as a percentage of revenues in fiscal year 2008 was primarily due to increases in profit sharing, a decrease in ASP and an increase in raw material costs such as gold. These increases were partially offset by lower stock-based compensation of $3.6 million and improved factory efficiency on higher sales volumes. Research and development expense for the fiscal year ended June 29, 2008, was $197.1 million, an increase of $13.5 million or 7% over R&D expense of $183.6 million in fiscal year 2007. The increase in R&D was due to an $11.4 million increase in compensation costs related to new employees, primarily circuit designers and support engineers, and annual salary increases. The increase in R&D expense was also due to higher costs related to profit sharing, which increased $5.0 million. In addition, the company had a $1.7 million increase in other R&D related expenses such as legal costs, mask costs and small tool charges. Offsetting these increases was a $4.6 million decrease in stock- based compensation. Selling general and administrative expense for the fiscal year ended June 29, 2008, was $142.4 million, an increase of $8.7 million or 7% over SG&A expense of $133.7 million in fiscal year 2007. The increase in SG&A was due to a $7.5 million increase in compensation costs related to new employees, primarily field sales engineers and annual salary increases. In addition to compensation costs the company had a $3.7 million increase in profit sharing, a $1.3 million increase in legal expenses and a $700,000 increase in other SG&A costs. Offsetting these increases was a $4.5 million decrease in stock-based compensation. Interest expense for the 12 months ended June 29, 2008, was $57.8 million, an increase of $45.7 million over interest expense of $12.1 million in fiscal year 2007. The increase in interest expense was due to the company's issuance of $1.7 billion Convertible Senior Notes during the fourth quarter of fiscal year 2007 bearing interest at 3.0% and 3.125%. Interest expense for fiscal year 2008 is primarily comprised of convertible debt interest, amortization of the convertible debt discount and amortization of issuance costs. Interest income for the 12 months ended June 29, 2008, was $30.1 million, a decrease of $27.6 million or 48% from interest income of $57.7 million in fiscal year 2007. Interest income decreased due to the company's lower average cash and cash equivalents and marketable securities balances as the company used $1.3 billion of its cash to fund a portion of its $3.0 billion accelerated share repurchase transaction during the fourth quarter of fiscal year 2007. The company's effective tax rate was 28.3% in fiscal year 2008 and 27.8% in fiscal year 2007. The increase in the effective tax rate was primarily due to lower R&D tax credits as the related tax benefit expired as of Dec. 31, 2007. In addition, the effective tax rate is higher due to lower tax-exempt interest income and the expiration of the ETI export tax benefit when compared to fiscal year 2007. Offsetting these increases to the effective tax rate was an increase in foreign earnings in lower tax jurisdictions, higher domestic production tax benefits and the impact of quarterly discrete adjustments. Liquidity and Capital Resources At June 29, 2008, cash, cash equivalents and marketable securities totaled $966.7 million and working capital was $1.07 billion. During fiscal year 2008, the company generated $530.3 million of cash from operating activities, $15.5 million net proceeds from the sale of a strategic investment in a privately held company, $82.4 million in proceeds from common stock issued under employee stock plans, and $12.7 million from excess tax benefits received on the exercise of stock awards. During fiscal year 2008, significant cash expenditures included $337.4 million of net purchase of short-term investments, $99.0 million for repurchases of common stock, payments of $176.7 million for cash dividends to stockholders, and purchases of $35.3 million for capital assets. Historically, the company has satisfied its quarterly liquidity needs through cash generated from operations. The company said that given its strong financial condition and performance, it believes that current capital resources and cash generated from operating activities will be sufficient to meet its liquidity, capital expenditures requirements, and debt retirement for the foreseeable future. Full-text copies of the company's consolidated financial statements for the year ended June 29, 2008, are available for free at http://researcharchives.com/t/s?3197 About Linear Technology Headquartered in Milpitas, California, Linear Technology Corporation (NasdaqGS: LLTC) -- http://www.linear.com/-- is a manufacturer of linear integrated circuits. Linear Technology products include high performance amplifiers, comparators, voltage references, monolithic filters, linear regulators, DC-DC converters, battery chargers, data converters, communications interface circuits, RF signal conditioning circuits, uModule(TM) products, and many other analog functions. Applications for Linear Technology' high performance circuits include telecommunications, cellular telephones, networking products such as optical switches, notebook and desktop computers, computer peripherals, video/multimedia, industrial instrumentation, security monitoring devices, high-end consumer products such as digital cameras and MP3 players, complex medical devices, automotive electronics, factory automation, process control, and military and space systems. LINENS N THINGS: Wants Exclusive Period to File Plan to Nov. 28 --------------------------------------------------------------- Linens 'n Things, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend their exclusive periods to: (a) file a plan through November 28, 2008; and (b) solicit and obtain acceptances of that plan through January 27, 2009. The exclusive periods within which Chapter 11 debtors may file a plan and solicit acceptances of the plan are intended to afford debtors a full and fair opportunity to rehabilitate their business and to negotiate and propose a reorganization plan without the deterioration and disruption of their business that might be caused by the filing of competing plans by non-debtor parties. Section 1121(c)(3) of the Bankruptcy Code provides that, if a debtor proposes a plan within the exclusive filing period, it has a period of 180 days after the Petition Date to obtain acceptances of the plan. Section 1121(d) further grants the Court authority to extend the exclusive periods "for cause" after notice and a hearing. Mark D. Collins, Esq., at Richards Layton & Finger, P.A., in Wilmington, Delaware, contends that the sought extension is warranted because the Debtors' business operations are exceedingly large and complex. He adds that the Debtors have been busy negotiating the terms of their recently-filed plan of reorganization with creditors and parties-in-interest. The Debtors believe that their postpetition lenders, the ad hoc committee of senior secured noteholders, and the Official Committee of Unsecured Creditors fully support the Debtors' plan process. The facts present in the Chapter 11 cases demonstrate ample "cause" to grant the requested extensions of the exclusive periods, Mr. Collins says. He points out that in addition to the Plan process, the Debtors have expended tremendous efforts over the past 120 days to stabilize their businesses, implement a $700,000,000 DIP Credit Facility, prepare a detailed go-forward business plan and conduct store closing sales at unprofitable locations. Mr. Collins further asserts that the Debtors have made a great deal of progress in their cases with respect to other tasks, including the approval of a postpetition trade vendor program to promote normalized credit terms with the Debtors' trade vendor community, and the marketing of the leases at their retail locations subject to ongoing store closing sales to maximize value to the bankruptcy estates. Judge Sontchi will convene a hearing on September 23, 2008, at 10:00 a.m., to consider the Debtors' request. Pursuant to Del.Bankr.LR 9006-2, the Debtors' exclusive plan filing period is automatically extended until the conclusion of that hearing. 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., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS N THINGS: Court OKs Closure of 11 Stores Instead of 28 ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware authorized Linens 'n Things, Inc., and its debtor-affiliates to: (i) close 11 stores, which is 17 stores less than the original request of 28, (ii) conduct store closing sales at the Closing Stores starting on August 29, 2008, and (iii) put the liquidation assets to the agent in accordance with the parties' Agency Agreement. Prior to its approval, the Debtors notified the Court and parties- in-interest that 17 stores were taken off the list as a result of their discussions with landlords. The remaining 11 Closing Stores are: Store No. Location --------- -------- 121 Orlando 300 Galleria Parkway, 12th Floor Atlanta, Georgia 30339 208 Norcross 45 Ansley Drive Newnan, Georgia 30263 252 Matairie 3301 Veterans Memorial Boulevard Matairie, Louisiana 70002 387 Sterling 7200 Wisconsin Avenue - Suite 400 Bethesda, Maryland 20814 422 Cincinnati One Independent Drive - Suite 520 Jacksonville, Florida 32202 424 Towson 3333 New Hyde Park Road - Suite 100 New Hyde Park, New York 11042-0020 439 Scottsdale 1901 Avenue of the Stars - Suite 855 Los Angeles, California 900067 470 Portland 1405 Jantzen Beach Supercenter Portland, Oregon 97217 524 Issaquah 251 Oceano Drive Los Angeles, California 90049 1174 Chicago 300 Campus Drive, 3rd Floor Florham Park, New Jersey 7932 1195 El Segundo 321 12th Street, Suite 200 Manhattan Beach, California 90266 The Court noted that all objections to the request are overruled, to the extent they were not previously withdrawn or resolved. The Court also authorized the Debtors to exercise the "put option" manner, upon which the Debtors intend to auction off their inventory and owned furniture, fixtures and equipment with respect to the Closing Stores. 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., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS N THINGS: Court Extends Deadline to Remove Civil Actions --------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware extend the time by which Linens 'n Things and its debtor- affiliates may file notices of removal of civil actions and proceedings through and including October 29, 2008, pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy Procedure. The Debtors are parties to numerous lawsuits, and are still assessing the lawsuits to determine whether removal is warranted, relates Mark D. Collins, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware. He notes that the key management personnel conducting the review are also actively involved in the Debtors' reorganization, and have yet to finish the analysis as to whether or not any of the pending suits should be removed. As a result, the Debtors require additional time to consider filing notices of removal of the Civil Actions. 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., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS N THINGS: Court Approves $20MM Severance Plan ---------------------------------------------------- The United States Bankruptcy Court for the District of Delaware approved the Severance Plan of Linens 'n Things, Inc., and its debtor-affiliates, in part, and authorized the Debtors to implement the plan solely for the requested non-insider employees supporting their remaining stores. The Court held that no payments will be made pursuant to the Severance Plan to employees above the level of district manager absent further Court order. The Court ruled that an employee will not be considered "terminated," and will not be entitled to receive payment under the Severance Plan if substantially all of the Debtors' assets are sold, and the employee is not employed by the purchaser in a position earning compensation equal to at least 90% of that employee's compensation immediately prior to the sale. Payments made to any specific employee on account of the Severance Plan will be reduced dollar-for-dollar by any "store line" bonus payments, including "shrinkage" related bonus beginning August 28, 2008, and going forward, Judge Sontchi noted. The Court will consider all other relief requested by the Debtors, including consideration of the Severance Plan with respect to the 546 employees at the Debtors' home office, on the hearing scheduled for September 10, 2008 at 10:00 a.m. 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., J7ohn H. Knight, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LINENS 'N THINGS: To Close Surprise Bedding & Housewares Store -------------------------------------------------------------- Erin Zlomek at The Arizona Republic reports that Linens 'n Things, Inc. will close its bedding and housewares store at the Surprise Towne Center plaza by year-end. According to The Republic, the store, which was opened in 2002, was one of the 177 underperforming locations Linens 'n Things will close. The Republic relates that Linens 'n Things had disclosed that it would be closing 120 stores as part of its financial reorganization. To cut costs further, the company announced that it would close 57 more stores, according to the report. Linens 'n Things, says The Republic, is auctioning off to a third- party company the rights to the store's final liquidation sale. The Republic states that Linens 'n Things will close six more stores at these shopping centers: -- Broadway Parc in Tucson, -- Prescott Gateway, -- Chandler Crossing, -- Crossroads Towne Center in Gilbert, and -- Tempe Marketplace. "We expect an orderly wind down of business over the next few months. As for employees, where possible, we will try to accommodate (them) at other stores," East Valley Tribune quoted Linens 'n Things spokesperson, Susan Kenney, as saying. 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., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., provide Linens 'n Things with bankruptcy counsel. The Debtors' special corporate counsel are Holland N. O'Neil, Esq., Ronald M. Gaswirth, Esq., Stephen A. McCaretin, Esq., Randall G. Ray, Esq., and Michael S. Haynes, Esq., at Morgan, Lewis & Bockius, LLP. The Debtors' restructuring management services provider is Conway Del Genio Gries & Co., LLC. The Debtors' CRO and Interim CEO is Michael F. Gries, co-founder of Conways Del Genio Gries & Co., LLC. The Debtors' claims agent is Kurtzman Carson Consultants, LLC. The Debtors' consultants are Asset Disposition Advisors, LLC, and Protivit, Inc. The Debtors' investment bankers are Financo, Inc., and Genuity Capital Markets. (Bankruptcy News About Linens 'n Things; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) LONGHORN CDO: Moody's Rates $11 Million Secured Notes at Caa1 ------------------------------------------------------------- Moody's Investors Service has withdrawn the rating on these notes issued by Longhorn CDO (Cayman) Ltd.: Class Description: U.S. $323,000,000 Class A-1 Floating Rate Senior Secured Notes Due 2012 -- Prior Rating: Aaa -- Current Rating: WR According to Moody's, the rating action is a result of the notes being redeemed in full. In addition, Moody's downgraded and left on review for possible downgrade these notes: Class Description: U.S. $11,000,000 Class C Floating Rate Secured Notes due 2012 -- Prior Rating: B3 -- Current Rating: Caa1, on review for possible downgrade According to Moody's, this rating action is a result of the deterioration in the credit quality of the transaction's underlying collateral pool consisting primarily of senior secured loans and bonds. MICHAEL EDWARDS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Michael Charles Edwards 7523 Old Bridge Ct. Sugar Land, TX 77479 Bankruptcy Case No.: 08-35819 Chapter 11 Petition Date: September 1, 2008 Court: Southern District of Texas (Houston) Judge: Jeff Bohm Debtor's Counsel: Jason Starks (jstarks@starksgonzales.com) Starks & Gonzales, P.C. 4141 Southwest Freeway, Suite 440 Houston, TX 77027 Tel: (713) 961-3555 Fax: (713) 961-3561 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A copy of Debtor's petition, which includes a list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/txsb08-35819.pdf MIDWEST AIR: Has Fallen Behind Payments for Airport Gate Space -------------------------------------------------------------- Midwest Air Group, Inc., has fallen behind in payments for gate space at its hometown Milwaukee Mitchell International Airport, says Lou Whiteman of The Deal. Mr. Whiteman says that Midwest Air, according to a story in Milwaukee's Journal Sentinel newspaper, has made partial payments but is 30 days overdue on more than $1 million in fees. According to Mr. Whiteman, the report says Midwest, which was purchased by a consortium led by TPG Capital for $450 million last August, continues to contemplate a Chapter 11 reorganization as it attempts to deal with high fuel prices. Midwest Air's fate is likely tied to its success or failure in reaching an agreement with its unions on pay cuts, Mr. Whiteman reports. Both sides have been quiet in recent weeks, but the pilots say Midwest Air has asked to eliminate half of its 400 aviator jobs and wishes to reduce some wages by more than 50%, according to Mr. Whiteman. Oak Creek, Wisconsin-based Midwest Air Group Inc. -- http://www.midwestairlines.com/-- is a holding company of Midwest Airlines, Inc. Midwest Airlines operates a passenger jet airline that serves destinations throughout the United States from Milwaukee, Wisconsin and Kansas City, Missouri. Skyway Airlines, Inc., dba Midwest Connect, is a wholly owned subsidiary of Midwest Airlines and serves as the regional airline for the company. Midwest Airlines and Midwest Connect constitute the company's segments. It has three principal product offerings: Midwest Airlines Signature Service, Midwest Airlines Saver Service and Midwest Connect regional service. As of Dec. 31, 2006, Midwest Airlines Signature Service operated in 20 cities in the United States, and Midwest Airlines Saver Service operated in 10 cities. Midwest Connect builds feeder traffic and provides regional scheduled passenger service to cities primarily in the Midwest. Its subsidiaries provide aircraft charter services, transport air freight and mail. The company has a total of more than 3,000 workers. As of Sept. 30, 2007, Midwest Air Group listed total assets of $395,615,000, total liabilities of $331,810,000, and total stockholders' equity of $63,805,000. NATIONAL R.V.: Files Joint Chapter 11 Plan & Disclosure Statement ----------------------------------------------------------------- According to Bankruptcy Data, National R.V. Holdings filed with the U.S. Bankruptcy Court its Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. Included in the documents filed are the terms of an inter-company settlement that generally provides for the substantive consolidation of the Debtors' estates, Bankruptcy Data relates. The report states that proposed global settlement and compromise also provides for distributions to holders of preferred and common stock. About National R.V. Headquartered in Perris, California, National R.V. Holdings Inc. (Pink Sheets: NRVH) -- http://www.nrvh.com/-- through its wholly owned subsidiary, National RV Inc., produces motorized recreational vehicles. National RV designs, manufactures and markets Class A gas and diesel motorhomes under model names Surf Side, Sea Breeze, Dolphin, Tropi-Cal, Pacifica and Tradewinds. The Companies filed for Chapter 11 protection on Nov. 30, 2007 (Bankr. C.D. Calif. Lead Case No. 07-17937). David Guess, Esq., at Klee Tuchin Bogdanoff & Stern LLP, represents the Debtors in their restructuring efforts. The Debtors selected OMNI Management Group LLC as their claim, notice and balloting agent. The U.S. Trustee of Region 16 appointed seven creditors to serve on an Official Committee of Unsecured Creditors in this case. Pachulski Stang Ziehl & Jones LLP represents the Committee. When the Debtors filed for protection against their creditors, it listed total assets of $54,442,000 and total debts of $30,128,000. NETEFFECT INC: U.S. Trustee Sets Sept. 8 Organizational Meeting --------------------------------------------------------------- Roberta A. DeAngelis, the acting United States Trustee for Region 3, will hold an organizational meeting in the Chapter 11 case of NetEffect Inc. on Sept. 8, 2008, at 2:00 p.m. at J. Caleb Boggs Federal Building at 844 King Street, Room 2112, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. About NetEffect Inc. Based in Austin, Texas, NetEffect Inc. is engaged in the Data Network Solutions business. The company filed for Chapter 11 reorganization on Aug. 27, 2008 (Bankr. D. Del. 08-12008). Curtis A. Hehn, Esq., Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachulski Stang Ziehl & Jones LLP, represent the Debtors as counsel. When the Debtor filed for protection from its creditors, it listed assets of between $500,000 and $1,000,000, and debts of between $10,000,000 to $50,000,000. NETWOLVES CORPORATION: Court Confirms Third Amended Plan -------------------------------------------------------- The United States Bankruptcy Court for the Middle District of Florida signed on Aug. 30, 2008, an order confirming NetWolves Corporation's Third Amended Joint Disclosure Statement in Connection with Third Amended Joint Plan of Reorganization. Pursuant to the Plan, all outstanding shares of NetWolves' Common Stock, Series A, Series B and Series C Preferred Stock will be cancelled, effective Sept. 1, 2008. Accordingly, all shares of Common Stock, Series A, Series B and Series C Preferred Stock are no longer in effect. About NetWolves Based in Tampa, Florida, NetWolves Corporation (Pink Sheets: WOLV) -- http://www.netwolves.com/-- provides telecommunications and Internet-managed services to more than 1,000 customers through its neutral FCC-licensed carrier. Some of NetWolves' customers include General Electric, University of Florida, McLane Company, JoAnn Stores and Marchon Eyewear. The company and three of its affiliates filed for Chapter 11 protection on May 21, 2007 (Bankr. M.D. Fla. Case Nos. 07-04186 through 07-04196). David S. Jennis, Esq., at Jennis Bowen & Brundage, P.L., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, it listed total assets of $8,847,572 and total liabilities of $7,637,029. NEW LIFE OF PERRY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: New Life of Perry, Inc. P.O. Box 1981 Perry, GA 31069 Bankruptcy Case No.: 08-52417 Type of Business: The Debtor is a religious organization. See http:www.newlifeofperry.com Chapter 11 Petition Date: September 1, 2008 Court: Middle District of Georgia (Macon) Debtor's Counsel: David Judah, Esq. P.O. Box 86 Gordon, GA 31031 Tel: (478) 628-2144 Fax: (478) 628-5216 Email: judahlaw@bellsouth.net Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $100,000 to $1,000,000 A copy of 's petition is available for free at: http://bankrupt.com/misc/gamb08-52417.pdf NEWPORT WAVES: Fitch Cuts Ratings for Sub-Classes of CDO Series 3 ----------------------------------------------------------------- Fitch Ratings has downgraded these sub-classes of Newport Waves CDO Series 3 and removed the notes from Rating Watch Negative. These rating actions are effective immediately: -- CLP2,589,500,000 sub-class A6-CLP credit-linked notes due 2017, to 'BBB-' from 'A'; -- CLP5,401,000,000 sub-class A7-CLP credit-linked notes due 2017, to 'BB+' from 'A-'. The actions reflect Fitch's view on the credit risk of the rated notes after the release of its new corporate CDO rating criteria. Key drivers of this transaction's credit risk include portfolio migration risk, with 5% of the portfolio currently on Rating Watch Negative and 21% of the portfolio with a Negative Outlook. Fitch also notes the industry concentration of 34.5% in the underperforming sector of banking & finance. The portfolio has experienced negative rating migration, resulting in an average portfolio quality of 'BBB' compared to 'A-/BBB+' at the closing date in April 2007. Since the notes were placed on Rating Watch Negative in May 2008, 12.3% of the portfolio has experienced further downgrades. In addition, 7.8% of the portfolio carries a rating below investment grade. This compares to current credit enhancement levels of 5.2% and 4.9% for sub- classes A6-CLP and A7-CLP, respectively. As per Fitch's May 14 press release, the Rating Watch Negative status indicated a possible downgrade to the 'BBB' category for sub-class A6-CLP and the 'BB' category for sub-class A7-CLP if there were no significant changes prior to a resolution of the Watch status. Since then, Pacific Investment Management Company LLC, as portfolio manager, executed substitutions on the reference portfolio, replacing 12 obligors with 11 obligors (approximately 8% of the portfolio) of higher credit quality. However, key drivers of credit risk remained relatively unchanged, as the portfolio has experienced further downgrades, causing the overall credit profile of the sub-classes to be maintained. Newport Waves CDO (the issuer) is a managed synthetic collateralized debt obligation referencing a portfolio of primarily investment grade corporate obligations. At close, proceeds from the issuance of the notes were used to enter into a guaranteed investment contract with MBIA Inc., which is insured by MBIA Insurance Corp., to collateralize the credit default swap between the issuer and Bear Stearns Credit Products Inc., whose obligations are guaranteed by Bear Stearns Companies, LLC (rated 'AA-/F1+' by Fitch). Additional collateral has been posted and is marked to market on at least a weekly basis to maintain collateral levels required by the investment agreement. The portfolio is managed by PIMCO (investment grade corporate CDO asset manager rating of 'CAM1-' by Fitch). Fitch released updated criteria on April 30 for corporate CDOs and, at that time, noted it would be reviewing its ratings accordingly to establish consistency for existing and new transactions. As part of this review, Fitch makes standard adjustments for any names on Rating Watch Negative or with a Negative Outlook, downgrading such ratings for default analysis purposes by two and one notches, respectively. Fitch has previously noted that its review will be focused first on ratings most exposed to risks it has highlighted in its updated criteria. Consequently, Fitch placed the notes on Rating Watch Negative on May 14. As indicated, resolution of the Rating Watch Negative status depends on any plans managers/arrangers may choose to modify either the structure or the portfolio. In this case, the manager executed trades in the portfolio. NICHOLAS-APPLEGATE: S&P Cuts Low-B Ratings on 2 Class Notes to CCC ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on the class B, C, and D notes issued by Nicholas-Applegate CBO II Ltd., a high-yield arbitrage collateralized bond obligation (CBO) transaction and removed them from CreditWatch with negative implications, where they were placed on Aug. 1, 2008. At the same time, S&P affirmed our 'AAA' rating on the class A notes. Ratings lowered and removed from creditwatch negative Nicholas-Applegate CBO II Ltd. Rating Class To From Current bal. (mil. $) ----- -- ---- -------------------- B B BBB/Watch Neg 32.40 C CCC BB/Watch Neg 14.24 D CCC- B/Watch Neg 10.59 Rating affirmed Nicholas-Applegate CBO II Ltd. Class To From Current bal. (mil. $) ----- -- ---- -------------------- A AAA 109.47 Transaction Information Issuer: Nicholas-Applegate CBO II Ltd. Co-issuer: Nicholas-Applegate CBO II Corp. Collateral manager: Nicholas Applegate Capital Management Underwriter: Goldman Sachs & Co. Indenture trustee: JPMorgan Chase Bank N.A. The lowered ratings reflect factors that have negatively affected the credit enhancement available to support the rated notes since the transaction was last downgraded in June 2006. These factors include par erosion of the collateral pool and negative migration of the credit quality of the performing assets within the pool. Standard & Poor's also noted that the overcollateralization ratios for the transaction have deteriorated slightly since the transaction was last downgraded. NORMA CDO: Fitch Cuts Ratings on Eight Classes of Notes to 'C/DR6' ------------------------------------------------------------------ Fitch Ratings has downgraded, assigned Distressed Recovery ratings, and removed from Rating Watch Negative nine classes of notes issued by Norma CDO I Ltd. These rating actions are effective immediately: -- $950,119,046 class A-1 notes to 'CCC/DR5' from 'B'; -- $150,000,000 class A-2 notes to 'C/DR6' from 'B-'; -- $86,000,000 class B notes to 'C/DR6' from 'CCC+'; -- $50,000,000 class C notes to 'C/DR6' from 'CCC'; -- $74,000,000 class D notes to 'C/DR6' from 'CCC-'; -- $63,758,133 class E notes to 'C/DR6' from 'CC'; -- $11,770,732 class F notes to 'C/DR6' from 'CC'; -- $14,713,415 class G notes to 'C/DR6' from 'CC'; -- $22,560,570 class H notes to 'C/DR6' from 'CC'. Fitch's rating actions reflect the collateral deterioration within the portfolio, specifically from subprime residential mortgage backed securities. Norma CDO I is a hybrid cash and synthetic arbitrage collateralized debt obligation which closed March 1, 2007, and is managed by NIR Capital Management, LLC. The portfolio is composed primarily of subprime RMBS (96.4%) and vintage Structured Finance CDOs with exposure to subprime RMBS (3.6%). Subprime RMBS of the 2005, 2006, and 2007 vintages account for approximately 40.5%, 52.7%, and 3.2% of the portfolio, respectively. SF CDOs of the 2006 and 2007 vintages account for approximately 2.5% and 1.1%, respectively. Since the last review conducted in November 2007, approximately 79.8% of the portfolio has been downgraded. The portion of the portfolio rated below investment grade is now 98.5% while 8.2% of the portfolio is currently on Rating Watch Negative. On March 10, 2008, the class A overcollateralization ratio fell below 100%, which resulted in an event of default. Fitch received a notice dated Aug. 4, 2008 stating that as a remedy to the Event of Default, the majority of holders of the class A notes directed the sale and liquidation of the collateral. Fitch expects that the proceeds from the liquidation of the collateral will not be enough to pay the class A-1, and the subordinate classes are expected to receive no future interest and principal. The ratings of the class A-1, A-2, B, and C notes address the likelihood that investors will receive full and timely payments of interest, as well as the stated balance of principal by the stated maturity date, pursuant to the governing documents. The ratings of the class D, E, and F notes address the likelihood that investors will receive ultimate interest payments and the stated balance of principal by the stated maturity date. The ratings of the class G and H notes address only the likelihood that investors will receive the stated balance of principal by the stated maturity date, pursuant to the governing documents. NORTH OAKLAND: Will Be Sold to Oakland Physicians Medical --------------------------------------------------------- Gary Gosselin at Oakland Business Review reports that North Oakland Medical Centers will be sold to Oakland Physicians Medical Center LLC, which will operate it as Oakland's first for-profit hospital. NOMC, according to Oakland Business, filed for Chapter 11 bankruptcy reorganization on Aug. 26 in the U.S. Bankruptcy Court in Detroit, a move that was necessary to proceed with the sale. NOMC said in the court filing, "In 2006, as part of an out-of- court restructuring (plan) to return to profitability, (NOMC) hired . . . (CEO John Graham and Chief Financial Officer Mike) DeRubeis. Although Graham and DeRubeis were able to create substantial cost savings, revenues continued to decline and the out-of-court restructuring was not successful." Chad Halcom at Crain's Detroit relates that under a 1993 lease agreement, the city of Pontiac is owed $17 million -- including at least $2.3 million in past-due lease payments from NOMC, which hasn't made a payment since September 2006. The report adds that the city council agreed to forgive the debt in May. NOMC also defaulted on $38.5 million in bonds issued by the Finance Authority. According to Oakland Business, bondholders will get an estimated $3 million as part of the bankruptcy agreement. According to Crain's Detroit, OPMC's chief, Dr. Anil Kumar, said that under the terms of the sale, the company will pay: -- $2 million to the City of Pontiac, -- at least $3.7 million to its Pontiac Hospital Finance Authority to satisfy bondholders on bonds where NOMC has defaulted in repayment, and -- $3 million to NOMC itself for �soft assets� like licenses. Crain's Detroit notes that OPMC will acquire NOMC's main campus in Pontiac and the nearby Waterford Ambulatory Care Center. OPMC member physicians, who have been buying shares at $10,000 each for a stake in NOMC, will hold a 60% share of the new company after the bankruptcy and transition period, Crain's Detroit says, citing Dr. Kumar. The report adds that McLaren Health Care and any other institutional investors who buy in will hold a 30% stake. Oakland Business relates that McLaren Health will help OPMC in the transaction as adviser. According to that report, hospital employees will also be offered to purchase a 5% share. Pontiac will collect 5% of all profits from any year that OPMC makes money, "in perpetuity," Crain's Detroit says, citing Dr. Kumar. Catherine Jun at The Detroit News relates that NOMC's President and CEO John Graham said Thursday that over half of the hospital's current staff will be rehired, once the hospital changes ownership in October. About NOMC Headquartered in in Pontiac, Michigan, North Oakland Medical Centers (NOMC) -- http://www.nomc.org/-- f.k.a. Pontiac General Hospital, is a non-profit community hospital. It is licensed for 366 beds and it offers: Acute Medical Surgery, Physical Medicine and Rehabilitation, Intensive Pediatric Physical Therapy, Radiation Oncology, Emergency Centers (Pontiac and Waterford), several out-patient clinics, and Community Services. OPEN DOOR: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Open Door Community Church P.O. Box 1338 Manvel, TX 77578-1338 Bankruptcy Case No.: 08-35666 Type of Business: The Debtor is a religious organization. Chapter 11 Petition Date: August 29, 2008 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Margaret Maxwell McClure, Esq. Email: mccluremar@aol.com 909 Fannin, Ste. 3810 Houston, TX 77010 Tel: (713) 659-1333 Fax: (713) 658-0334 Estimated Assets: Unknown Estimated Debts: Unknown The Debtor did not file a list of its largest unsecured creditors. OSPRAIE MANEGMENT: To Shut Down Hedge Fund Due to Losses -------------------------------------------------------- Ospraie Management LLC said that its closing down its hedge fund after losing 38.6% this year from wrong bets on commodity stocks, various reports says. According to BusinessWeek, the losses were caused by significant sell-off in several number of the company's energy, mining and resource equity holdings. Due to the deteriorating performance, the company initiated a plan to reduce risk and de-lever the portfolio in order to avoid further losses, the report says. On the one hand, the company intends to transfer 40% of the fund's assets to investors by the end of September and, on the other hand, another 40% by the year-end, Bloomberg News reports. The remaining funds held in illiquid investments could take three year to transfer, the report says. Reuters reports that the company said in a letter on Tuesday to investors including Lehman Brothers and Credit Suisse "after nine year of striving to be good steward of your capital, [it is] very sorry for this outcome." The closing of the hedge fund leaves the firm with three remaining funds with at least $4 billion in assets, down from $9 billion in March, TransWorldNews reports. Headquartered in New York, Ospraie Management LLC -- http://www.ospraie.com/-- focuses on commodities and basic industries from a fundamental investment perspective. PHOENIX CDO: Moody's Further Junks Ratings on $61 Million Notes --------------------------------------------------------------- Moody's Investors Service has upgraded the rating on these notes issued by Phoenix CDO, Limited: Class Description: U.S. $31,000,000 Class II Senior Secured Fixed Rate Notes, Due 2011 -- Prior Rating: B2 -- Current Rating: Ba2 According to Moody's, this rating action is as a result of the delevering of the transaction. The transaction's underlying collateral pool consists of bonds. In addition, Moody's downgraded the ratings on these notes: Class Description: U.S. $30,000,000 Class III Mezzanine Secured Fixed Rate Notes, Due 2011 -- Prior Rating: Ca -- Current Rating: C Class Description: U.S. $31,000,000 Senior Subordinated Notes, Due 2011 -- Prior Rating: Ca -- Current Rating: C According to Moody's, these rating actions are the result of the increased expectations for higher expected losses on the Class III Mezzanine and Senior Subordinated Notes. PIERRE FOODS: Sued by J.M. Smucker for Infringing Food Trademark ---------------------------------------------------------------- Jam maker J.M. Smucker Co. has filed a lawsuit in the U.S. District Court for the Northern District of Ohio against Pierre Foods Inc. The lawsuit alleges that Pierre Foods' crustless peanut butter and jelly sandwiches infringed the trademark for Smucker's Uncrustables sandwiches, reports Bankruptcy Law 360. A summary of the intellectual property case can be found at http://researcharchives.com/t/s?319c About Pierre Foods Headquartered in Cincinnati, Ohio, Pierre Foods, Inc. -- http://www.pierrefoods.com-- manufactures and sells ready-to-cook and pre-cook products. The company and and 13 of its affiliates filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del. Lead Case No. 08-11469). Paul Noble Heath, Esq., at Richards, Layton & Finger P.A., represents the Debtors in their restucturing efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. When the Debtors filed for protection against their creditors, they listed estimated assets between $500 million and $1 billion, and estimated debts between $100 million and $500 million. PIERRE FOODS: Court Okays Richards Layton as Bankruptcy Co-Counsel ------------------------------------------------------------------ Pierre Foods Inc. and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court for the District of Delaware to employ Richards, Layton & Finger, P.A. as their bankruptcy co- counsel. The Firm is expected to advise the Debtors of their rights, powers and duties as debtors and debtors-in-possession, protect and preserve their estates and other legal services in connection to their bankruptcy cases. John H. Knight, Esq., a director at Richards Layton, told the Court that the professionals who will render services to the Debtors and their hourly rates are: Daniel J. DeFranceschi $550 Chun I. Jang $300 L. Katherine Good $275 Barbara J. Witters $185 Mr. Knight assured the Court that the firm does not represent any interest adverse to the Debtors' estates. About Pierre Foods Based in Cincinnati, Ohio, Pierre Foods, Inc. -- http://www.pierrefoods.com-- manufactures and sells ready-to-cook and pre-cook products. The company and and 13 of its affiliates filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del. Lead Case No. 08-11469). Jonathan S. Henes, Esq., a partner at Kirkland & Ellis, represent the Debtors. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. When the Debtors filed for protection against their creditors, they listed estimated assets between $500 million and $1 billion, and estimated debts between $100 million and $500 million. PIERRE FOODS: Hires Alvarez & Marsal as Restructuring Consultants ----------------------------------------------------------------- Pierre Foods Inc. and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Alvarez & Marsal North America, LLC as their restructuring consultants. Alvarez & Marsal is expected to, among others, perform a financial review of the Debtors, and assist in cost reduction and operational improvement, development of restructuring plans and strategic alternatives for maximizing the enterprise value of the Debtor's business lines, preparation of the schedules of assets and liabilities and statements of financial affairs, identification of executory contracts and leases and performance of cost-benefit evaluations, and the preparation of financial information for distribution to creditors and others. John K. Suckow, a managing director at the firm, told the Court that the firm will bill the Debtors at these hourly rates: Managing Directors $550 - $750 Directors $400 - $600 Associates $300 - $450 Analysts/Staff $173 - $350 M. Suckow assured the Court that the firm does not represent any interest adverse to the Debtors' estates. About Pierre Foods Based in Cincinnati, Ohio, Pierre Foods, Inc. -- http://www.pierrefoods.com-- manufactures and sells ready-to-cook and pre-cook products. The company and and 13 of its affiliates filed for Chapter 11 protection on July 15, 2008 (Bankr. D. Del. Lead Case No. 08-11469). Jonathan S. Henes, Esq., a partner at Kirkland & Ellis, and Paul Noble Heath, Esq., at Richards, Layton & Finger P.A., represent the Debtors in their restructuring efforts. The Debtors selected Kurtzman Carson Consultants LLC as their claims agent. When the Debtors filed for protection against their creditors, they listed estimated assets between $500 million and $1 billion, and estimated debts between $100 million and $500 million. POINT PLEASANT: Moody's Further Junks Ratings on Three Notes ------------------------------------------------------------ Moody's Investors Service has downgraded the ratings assigned to four classes of notes issued by Point Pleasant Funding 2007-1, Ltd., and left one of these ratings on review for further possible downgrade. The rating actions are: Class Description: U.S. $6,000,000 Class S Floating Rate Notes due 2012; -- Prior Rating: Aaa, on review for possible downgrade -- Current Rating: B1, on review for possible downgrade Class Description: U.S. $254,930,000 Class A-1 Floating Rate Notes due September 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: U.S. $170,000,000 Class A-2 Floating Rate Notes due September 2047 -- Prior Rating: Ca -- Current Rating: C Class Description: U.S. $100,000,000 Class B Floating Rate Notes due September 2047 -- Prior Rating: Ca -- Current Rating: C Point Pleasant Funding 2007-1, Ltd. is a collateralized debt obligation backed primarily by a portfolio of Structured Finance securities. The transaction experienced on June 10, 2008, an event of default caused by a default in the payment, when due and payable, of accrued interest on the Class A-2 Notes and Class B Notes, which default continued for a period of seven days, as described in Section 5.1(a) of the Indenture dated April 18, 2007. As provided in Article V of the Indenture during the occurrence and continuance of an Event of Default, certain parties to the transaction may be entitled to direct the Trustee to take particular actions with respect to the Collateral Debt Securities and the Notes. Moody's decision to downgrade the ratings of the Class S Notes reflects the risk that liquidation of the Collateral may be selected as the post-Event of Default remedy by the controlling parties. The liquidation of the CDO collateral may result in a probability of repayment and a severity of loss that are inconsistent with an investment-grade rating. PORTOLA PACKAGING: U.S. Trustee Sets Sept. 8 Org. Meeting --------------------------------------------------------- Roberta A. DeAngelis, the acting United States Trustee for Region 3, will hold an organizational meeting in the Chapter 11 case of Portola Packaging Inc. on Sept. 8, 2008, at 11:00 a.m. at J. Caleb Boggs Federal Building at 844 King Street, Room 2112, in Wilmington, Delaware. The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. About Portola Packaging Portola Packaging Inc. -- http://www.portpack.com/-- designs, manufactures, and markets a full line of tamper-evident plastic closures, bottles, and equipment for the beverage and food industries, as well as plastic closures and containers for the cosmetics industry. The company and 6 of its debtor-affiliates filed for Chapter 11 reorganization on Aug. 27, 2008 (Bankr. D. Del. Lead Case No. 08-12001). Edmon L. Morton, Esq., Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors as counsel. When the Debtors filed for protection from their creditors, they listed assets of between $50 million and $100 million, and debts of between $100 million and $500 million. PORTOLA PACKAGING: Moody's Lowers POD Rating to D from Ca --------------------------------------------------------- Moody's Investors Service lowered the Probability of Default Rating for Portola Packaging, Inc. to D following the company's announcement that it filed a voluntary petition for Chapter 11 reorganization. Moody's will withdraw all the company's ratings within several days. Moody's took these rating actions: -- Downgraded, Probability of Default Rating, to D from Ca The company announced that holders of approximately 90% of the principal amount of its 8-1/4% Senior Notes due 2012 agreed to a restructuring of the company as outlined in the previously announced restructuring agreement dated July 24, 2008. According to the plan, holders of the Senior Notes will receive 100% of the common stock of reorganized Portola in exchange for their claims. Wayzata Investment Partners LLC is expected to be Portola's controlling shareholder upon its emergence from bankruptcy. The company anticipates completing its pre-packaged reorganization and emerging from Chapter 11 in mid-October 2008. Portola also announced that it has reached agreement with its existing secured lenders to provide a $79 million debtor-in- possession facility to pay off the outstanding indebtedness under the existing secured facilities and finance its ongoing operations. Moody's had previously downgraded the Corporate Family Rating and other ratings of Portola on July 25, 2008, following the company's announcement that it intended to file for bankruptcy. Portola Packaging, Inc. designs, manufactures, and markets a broad range of products and services including tamper evident plastic closures, bottles, and related equipment and services for the dairy, fruit juice, bottled water, sports drinks, and other non- carbonated beverage markets. Headquartered in Batavia, Illinois, Portola had consolidated revenue of approximately $280 million for the 12 months ended Feb. 29, 2008. QUAKER FABRIC: Court Confirms Joint Liquidating Plan ---------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware confirmed a second amended joint liquidating plan of Quaker Fabric Corporation and Quaker Fabric Corporation of Fall River. As reported in the Troubled Company Reporter July 18, 2008, the amended Plan contemplates the liquidation of assets of the Debtors for the benefit of their creditors and the appointment of a liquidating agent. Initial Distribution On the plan's effective date, the liquidating agent, on behalf of the Debtors, will pay in cash in full all (i) administrative expense claims, (ii) priority tax claims, and (iii) secured claims. Holders of unsecured claims will receive their pro rata share of available cash, if any. The amended plan classifies interests against and liens in the Debtors in five classes. The classification of interests and claims are: Treatment of Claims and Interests Types of Estimated Estimated Class Claims Treatment Amount Recovery ----- -------- --------- ---------- --------- unclassified administrative $1,600,000 100% claims unclassified priority tax $200,000 100% claims 1 priority unimpaired $155,386 100% claims 2 secured unimpaired $0 N/A claims 3 WARN Act impaired $6,000,000 5%-15% claims 4 unsecured impaired $25,000,000 6% claims 5 equity impaired Not Estimated 0% interest Holders of Class 1 allowed priority claims will receive in full satisfaction of and exchange for their claim (i) the amount of the allowed priority claim, without interest, in cash after the Plan's effective date, or (ii) other treatment as may be agreed upon in writing by the holder, the Debtors and the Committee. About Quaker Fabric Based in Fall River, Mass., Quaker Fabric Corp. (NASDAQ: QFAB) -- http://www.quakerfabric.com/-- designs, manufactures, and markets woven upholstery fabrics primarily for residential furniture manufacturers and jobbers. It also develops and manufactures specialty yarns, including chenille, taslan, and spun products for use in the production of its fabrics, as well as for sale to distributors of craft yarns, and manufacturers of homefurnishings and other products. The company is one of the largest producers of Jacquard upholstery fabrics. Quaker Fabric sells its products through sales representatives andindependent commissioned sales agents in the United States, Canada, Mexico, and internationally. The company and its affiliate, Quaker Fabric Corporation of Fall River, filed for chapter 11 protection on Aug. 16, 2007 (Bankr. D. Del. Case No. 07-11146). John D. Sigel, Esq. at Wilmer Cutler Pickering Hale and Dorr LLP and Joel A. Waite, Esq. at Young Conaway Stargatt & Taylor LLP are co-counsels to the Debtors. Epiq Bankruptcy Solutions is the Debtors' claims agent. The Official Committee of Unsecured Creditors has selected Shumaker, Loop & Kendrick, LLP, as its bankruptcy counsel and Benesch, Friedlander, Coplan & Aronoff, LLP, as co-counsel. The Debtors' schedules reflect total assets of $41,375,191 and total liabilities of $54,435,354. QUANTA SERVICES: S&P Withdraws 'BB' Rating on Corporate Credit -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Quanta Services Inc., including the 'BB' long-term corporate credit rating, at the company's request. REFCO INC: Allied World to Resume Payment of Grant's Defense Costs ------------------------------------------------------------------ Bankruptcy Law360 reports that the Hon. Gerard E. Lynch of the U.S. District Court for the Southern District of New York upheld a ruling by the U.S. Bankruptcy Court in Manhattan that directed Allied World Assurance Co. Inc. to continue paying Refco Inc. President Tone N. Grant's defense costs. According to Bankruptcy Law360, Refco had suspended coverage for Mr. Grant in the wake of his criminal conviction for securities fraud. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. (Refco Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) REFCO INC: Trustee Fights Motions to Dismiss Fraud Lawsuit ---------------------------------------------------------- Bankruptcy Law360 reports that Marc S. Kirschner, the Plan Administrator for Refco Capital Markets, Ltd., filed on Friday a response in the U.S. District Court for the Southern District of New York on several motions to dismiss a lawsuit alleging that outside auditors, legal counsel, and investment banks knew that a multimillion-dollar fraud was taking place at Refco Inc. that would eventually lead to the firm's collapse. According to Bankruptcy Law360, Mr. Kirschner "pushed back hard" against the motions. In August, Bankruptcy Law 360 said the District Court once again tossed complaints by the shareholders of now-defunct futures brokerage Refco Inc. against three of the world's largest investment banks, marking the second time that the plaintiffs in the case have been denied. Headquartered in New York, Refco Inc. -- http://www.refco.com/ -- is a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries are members of principal U.S. and international exchanges, and are among the most active members of futures exchanges in Chicago, New York, London and Singapore. In addition to its futures brokerage activities, Refco is a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco is one of the largest global clearing firms for derivatives. The company has operations in Bermuda. The company and 23 of its affiliates filed for chapter 11 protection on Oct. 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represents the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on Dec. 15, 2006. That Plan became effective on Dec. 26, 2006. (Refco Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) RIVER ROCK: Commences Cash Tender Offer for 9-3/4% Senior Notes --------------------------------------------------------------- River Rock Entertainment Authority has commenced a tender offer to purchase for cash up to $30 million principal amount of its outstanding 9-3/4% Senior Notes due 2011, upon the terms and subject to the conditions set forth in an Offer to Purchase dated Aug. 27, 2008. The Offer to Purchase will expire on Sept. 24, 2008, unless extended or earlier terminated. The total consideration for each $1,000 principal amount of Notes validly tendered and not withdrawn pursuant to the Offer to Purchase will be $1,051.25, which amount includes an early tender premium of $30.00 per $1,000 principal amount of Notes. The Total Consideration minus the Early Tender Premium will be $1,021.25 per $1,000 principal amount of Notes. The Total Consideration will be payable in respect of Notes validly tendered and not withdrawn on or prior to 5:00 p.m., New York City time, on Sept. 10, 2008. Holders of Notes who validly tender their Notes after the Early Tender Date but on or prior to the Expiration Date will be eligible to receive only the Tender Offer Consideration. The date of payment for tendered Notes is expected to occur promptly following the Expiration Date, provided all conditions to the Offer to Purchase have been satisfied or waived. The scheduled Settlement Date is Sept. 25, 2008, unless extended by the company. Holders whose Notes are accepted for payment in the Offer to Purchase will receive accrued and unpaid interest in respect of such purchased Notes from the last interest payment date up to, but not including, the Settlement Date. If the principal amount of the Notes tendered pursuant to the Offer to Purchase is greater than $30 million, the Authority will accept Notes for purchase and pay Holders thereof on a pro rata basis. There is no condition that any minimum amount of Notes must be tendered in the Offer to Purchase for the Authority to accept the Notes for payment. Tenders of Notes may be withdrawn at any time on or prior to Sept. 10, 2008. Tendered Notes may not be subsequently withdrawn, except if the Offer to Purchase is terminated without any Notes being purchased. The Authority's obligation to accept and pay for tendered Notes is conditioned upon the satisfaction or waiver of various conditions described in the Offer to Purchase, which may be waived by the Authority at any time prior to the Settlement Date. The Authority also reserve the right to terminate, withdraw or amend the Offer to Purchase at any time and from time to time. The Offer to Purchase is made only by the Offer to Purchase and the Letter of Transmittal. The Authority has retained Merrill Lynch & Co. to serve as the Dealer Manager for the Offer to Purchase. Questions regarding the Offer to Purchase may be directed to Merrill Lynch & Co at (888) 654-8637. Global Bondholder Services Corporation serves as both Depositary and Information Agent for the Offer. Requests for the Offer to Purchase, the Letter of Transmittal and related documents may be directed to Global Bondholder Services Corporation by telephone at (866) 794-2200. Funding for Tribe's Projects The Offer to Purchase is part of several transactions designed to provide funds for all or a portion of the costs of certain capital improvements projects on the Tribe's trust and adjacent lands that serve essential governmental purposes, including, without limitation, various road, drainage and landscaping infrastructure projects, design and engineering services, land purchase and the repurchase, through the Offer to Purchase, of outstanding Notes that were previously issued to finance such projects. The majority of the components of the projects are required to make the current operations more efficient and improve services to the Tribe's reservation and its gaming and entertainment facility. The Authority expects that these transactions will enable us to complete a portion of the preparatory site work necessary for the Authority's proposed resort development project, including a new and expanded "Tuscan-themed" casino and hotel with luxury resort amenities. The total estimated cost of the projects (excluding debt service) is approximately $84.8 million, which the Authority and the Tribe expect to finance from cash on hand, a new term loan and other indebtedness. The Offer to Purchase will enable the Authority to reduce outstanding senior indebtedness and give it additional flexibility to finance the projects. Concurrently with the consummation of the Offer to Purchase, the Authority intends to borrow $20.0 million pursuant to a term loan agreement with an affiliate of the Dealer Manager, and the Authority will contribute the net proceeds of the Term Loan to the Tribe. The Term Loan will be unsecured. Amounts outstanding under the Term Loan are expected to bear interest at a rate of 9.75% per annum and mature on Nov. 1, 2011. The Term Loan Agreement would not contain any financial maintenance covenants but would include restrictions on additional indebtedness and other covenants and events of default customarily included in loan agreements for similar transactions. The Term Loan Agreement would give the Authority the ability to incur up to an additional $5.0 million, on the same terms as the initial $20 million, upon satisfaction of certain conditions, including that the additional borrowing be permitted indebtedness under the Indenture governing the Notes. Term Loan Exchange Other proposed terms would include that all or part of the Term Loan may be exchanged, at the lender's election, for additional Notes to be issued under the Indenture. For every $1,000 principal amount of Term Loan exchanged, the lender would be entitled to receive new Notes, the terms of which would be substantially identical to the outstanding Notes, in a principal amount of $1,000 plus any applicable premium, which premium, if any, would be computed by a formula based on an average bid price for the Senior Notes at or about the date of exchange. The Term Loan could be prepaid at any time without penalty. Although the Authority intends to consummate the Term Loan on the terms described above, there can be no assurance that the Authority will be successful in obtaining financing on these or other terms or conditions. Master Utilities Ordinance In connection with these transactions on July 19, 2008, the Tribe adopted a master utilities ordinance that provides for the assessment against the Authority's gaming operations of certain fees for municipal services, products or benefits rendered by the Tribe which are reasonably necessary or desirable to the operation of the Authority's gaming and entertainment facility. At closing, the Authority intends to distribute to the Tribe (i) infrastructure assets previously financed with the proceeds of the Notes aggregating approximately $28.7 million and (ii) an additional amount permitted to be distributed under the Indenture of approximately $34.7 million. The Authority expects to pay about $11.5 million in master utilities fees for the 2009 fiscal year based on projections provided to the Authority from the Tribe. A number of factors may result in adjustments to the projected amount, including increases or decreases in operating expenses of the utilities and actual debt service relating to the Tribe's indebtedness. About River Rock Headquartered in Geyserville, California, River Rock Entertainment Authority is a governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized Indian tribe. River Rock Casino is a governmental development project of the Authority. The Casino offers Class III slot and video poker gaming machines, house banked table games, including Blackjack, Three card poker, Mini-baccarat and Pai Gow poker, Poker, featuring Texas Hold' em, comprehensive food and non-alcoholic beverage offerings, and goods for sale on tribal land located in Geyserville, California. The company' balance sheet as of June 30, 2008, showed total assets of $189,838,595, total liabilities of $210,337,970, and total fund deficit of $20,499,375. SABABA GROUP: To Auction Off Assets; Omni Is Lead Bidder -------------------------------------------------------- Sababa Group Inc. will sell its assets to Omni Commercial, LLC, or a rival bidder at a Sept. 13, 2008 auction, Jamie Mason of The Deal reports. Through the sale, Omni Commercial plans to make a credit bid -- apply what it's owed in the price it offers -- and position itself as the stalking horse for the Debtor's assets, says Mr. Mason. According to Mr. Mason, while the specific bid is not disclosed, Omni is owed $1.77 million, court documents said. Once the sale is completed, Omni will flip the company, minus its accounts receivables, in a follow-up transaction to University Games Corp., for close to $2 million, Mr. Mason says. Based New York City, New York, Sababa Group, Inc., sells its toys through retailers such as KB Toys, Target, Toys-R-Us and Wal-Mart. It also owns licenses for versions of the card game UNO, the board game Scrabble, and the Rubik's cube. On August 13, 2008, the company filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the Southern District of New York (Case No. 08-13174). Christopher M. Desiderio, Esq., at Nixon Peabody LLP represented the Debtor in its restructuring efforts. When it filed for bankruptcy, the Debtor listed between $1,000,000 to $10,000,00 in estimated assets and between $10,000,000 to $50,000,000 in estimated debts. SAGECREST FINANCIAL: Unit Owes Deutsche Bank More than $100MM ------------------------------------------------------------- Linda Sandler of Bloomberg News reports that according to court documents, Deutsche Bank AG has been trying to collect $107 million loaned to bankrupt units of the SageCrest LLC hedge fund. SageCrest Holdings Ltd., a Bermuda-based unit, admitted it had about $100 million outstanding under a credit facility with Deutsche Bank, the report says. Ms. Sandler, citing court documents, reports that SageCrest Holdings Ltd., a Bermuda-based unit of SageCrest LLC hedge fund, said it had about $100 million outstanding under a credit facility with Deutsche Bank AG. Deutsche Bank had extended a $400 million credit facility to SageCrest, according to the report. As reported by the Troubled Company Reporter on Aug. 20, 2008, SageCrest Finance LLC filed a chapter 11 petition on Aug. 17, 2008. The Debtors' lawyer said that SageCrest sought bankruptcy protection in order to avoid a foreclosure sale initiated by Deutsche Bank AG. Greenwich, Connecticut-based SageCrest Financial, LLC is managed by Windmill Management LLC. The company provides short-term financing. SageCrest Financial and SageCrest II, LLC filed their chapter 11 petition on Aug. 17, 2008 (Bankr. Conn. Case Nos. 08- 50755 and 08-50754). James Berman, Esq., at Zeisler and Zeisler P.C., represents the Debtors in their restructuring efforts. The Debtors listed assets between $100 million and $500 million and debts between $1 million and $10 million. SEACOAST COMMUNITIES: Files for Chapter 11 to Avoid Foreclosure --------------------------------------------------------------- Jessica Foster of MyrtleBeachOnline.com reports that Myrtle Beach-based custom home builder Seacoast Communities Inc. filed for Chapter 11 bankruptcy, to avoid foreclosure on its properties. According to Ms. Foster, Seacoast Communities president Guy Collins said that the company has been struggling to pay its bills since investors pulled out of deals on seven upscale homes in Grande Dunes and Plantation Heights. "They just walked away from the deposits rather than close on them because of the market slowdown," Collins said. "The houses were 100 percent complete, and we were ready to go to closing, and they said they weren't willing to close on the properties." "We filed for bankruptcy to preserve our assets so we could pay our bills," Collins said. Ms. Foster said the company's assets include about $12.1 million worth of homes and lots, including the three Grande Dunes homes totalling about $4.7 million. Seacoast also has land or houses in Cypress River, Plantation Point and Plantation Lakes. About Seacoast Communities Based in Myrtle Beach, S.C., Seacoast Communities Inc. operates as a home builder. On August 6, 2008, Seacoast Communities, Inc. filed a voluntary petition for reorganization under Chapter 11 (Bankr. D. S.C. Case No. 08-04735). Daniel J. Reynolds, Jr., Esq., at McCarthy Law Firm, LLC, represents the Debtor as counsel. When the company filed for protection from its creditors, it listed assets of between $10 million to $50 million, and debts of between $10 million to $50 million. SEA CONTAINERS: PBGC Says Disclosure Statement Lacks Information ---------------------------------------------------------------- The Pension Benefit Guaranty Corporation complains that the disclosure statement explaining the joint plan of reorganization filed by Sea Containers Ltd. and two subsidiaries violates Section 1125(a)(1) of the Bankruptcy Code. The PBGC says the disclosure statement fails to adequately disclose the Debtors' responsibilities and liabilities under the Employee Retirement Income Security Act and Internal Revenue Code with regard to the currently underfunded Sea Containers America Pension Plan. "In particular, the Disclosure Statement fails to fully account for the Debtors' statutory liabilities under ERISA and IRC that continue to accrue should the Pension Plan remain ongoing or liabilities that arise should the Pension Plan terminate in a distress termination or PBGC-initiated termination," Charles L. Finke, Esq., PBGC's deputy chief counsel, tells the U.S. Bankruptcy Court for the District of Delaware. He notes that PBGC has contacted the Debtors' counsel to resolve the issues consensually, but files the objection as a protective measure. ERISA provides the exclusive means for a plan sponsor to terminate a pension plan by a standard termination, a distress termination, or a PBGC-initiated termination. PBGC is a U.S. Government agency that administers pension plan termination insurance program under ERISA. Non-Debtor Sea Containers America, Inc., is the Pension Plan's contributing sponsor, Mr. Finke relates. As a subsidiary of Debtor Sea Containers, Ltd., however, SCA and all of the Debtors are under common control for purposes of ERISA and IRC, and thus, are members of the same controlled group that are jointly and severally liable for certain statutory obligations in relation to the Pension Plan, including contributions necessary to satisfy the Pension Plan's minimum funding standards under the IRC and ERISA, and variable-rate and flat-rate premiums owed to PBGC. If the Pension Plan terminates in a Distress or PBGC Termination, Mr. Finke explains, SCA, the Debtors, and their controlled group members would be jointly and severally liable for all unpaid minimum funding contributions, which would become immediately due and payable upon termination and are typically owed to PBGC, who would become the Pension Plan's statutory trustee upon termination. He says that SCA, et al., would also incur joint and several liability to PBGC for the total amount of the Pension Plan's unfunded benefit liabilities, which is the excess of a pension plan's "benefit liabilities" over the value of the pension plan's assets. Mr. Finke discloses that after the Debtors filed for bankruptcy protection, PBGC timely filed proofs of claims, on its own behalf and on behalf of the Pension Plan, for (i) the Pension Plan's unfunded benefit liabilities, (ii) unpaid minimum funding contributions, and (iii) unpaid premiums owed to PBGC. However, he notes, the Disclosure Statement does not provide that SCA, et al., are jointly and severally liable for certain liabilities and contributions with respect to the Pension Plan. PBGC, therefore, suggests that certain language should be added to the Disclosure Statement regarding the Pension Plan, including the fact that the Pension Plan is underfunded on a termination basis for $2,047,651, and that $10,469 in unpaid minimum funding contributions are due. If the Debtors include the suggested language, PBGC would withdraw its objection, Mr. Finke assures the Court. PBGC expects its concerns will be reflected in the Debtors' Chapter 11 Plan. PBGC also objects to the Disclosure Statement because it fails to disclose ERISA's effect on the Chapter 11 Plan's provision titled "Employee Benefits." Mr. Finke contends that the provision clearly violates ERISA, which provides the exclusive means to terminate a defined benefit pension plan. Thus, the Pension Plan cannot be summarily terminated "pursuant to the [Debtors' Plan of Reorganization]" without satisfying ERISA's statutory requirements and corresponding regulations, he adds. PBGC further complains that the Disclosure Statement and the Chapter 11 Plan provide for broad releases of non-debtor liability. Mr. Finke notes that the Disclosure Statement does not even mention the claims that are being released, and does not discuss whether the proposed release applies to PBGC's claims and any claims of the Pension Plan's participants. He adds that the Disclosure Statement does not even discuss why the releases are appropriate. The Debtors have failed to provide "adequate information" as defined in Section 1125, Mr. Finke points out. Mr. Finke says PBGC is willing to withdraw its objections if its suggested language were included in the Disclosure Statement and the Chapter 11 Plan. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for Chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt and Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Debtors delivered a joint plan of reorganization and disclosure statement to the Bankruptcy Court on July 31, 2008. The Plan contemplates the transfer of the Debtors' direct and indirect interests in their marine and land container leasing business to Newco, the entity to which SCL will transfer its remaining container interests, and certain additional consideration, in exchange for Newco (i) equity, and (ii) cash, which will be funded from an exit facility, that will be used for, among other things, repayment of the Debtors' DIP Facility. SCL's Container Interests include equity interests in SPC Holdings, Ltd., and SCL's indirect ownership of Classes A and B Quotas in GE SeaCo SRL, the joint-venture entity between SCL and General Electric Capital Corporation. (Sea Containers Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Recovery Under Chapter 11 Plan Beats Liquidation ---------------------------------------------------------------- Sea Containers Ltd. and its debtor-affiliates delivered to the U.S. Bankruptcy Court for the District of Delaware a liquidation analysis in support of their Chapter 11 plan of reorganization. Under the "best interests of creditors" test set forth under Section 1129(a)(7) of the U.S. Bankruptcy Code, the U.S. Bankruptcy Court for the District of Delaware may not confirm a Chapter 11 plan of reorganization unless it provides each holder of a claim or interest that does not accept the plan with property of a value, as of the effective date of the plan, that is not less than the amount that the holder would receive or retain if the debtor was liquidated under Chapter 7 of the Bankruptcy Code. To demonstrate that their Joint Plan of Reorganization satisfies the "best interests of creditors" test, the Debtors -- with the assistance of their advisors, including PricewaterhouseCoopers LLP and Kirkland & Ellis LLP -- prepared and delivered to the Court a hypothetical liquidation analysis, which is based upon certain assumptions. The Liquidation Analysis assumes conversion of the Debtors' Chapter 11 cases to Chapter 7 liquidation cases on November 30, 2008. Due to the potentially competing interests between Sea Containers Ltd. and Sea Containers Services Ltd., it is possible that upon conversion to Chapter 7, separate trustees would be appointed to the SCL and SCSL estates. In addition to the costs associated with both Chapter 7 trustees familiarizing themselves with the cases, it could be assumed that each trustee would appoint a separate set of legal and professional advisors. This would lead to a further increase in administrative costs. Administration of the Chapter 7 estates would be expected to continue for a period of at least two years and possibly longer. During this time, the Liquidation Analysis assumes that the Chapter 7 trustees would conduct a liquidation of the assets under the Chapter 7 trustees' control and endeavor to repatriate cash from the Non-Debtor Subsidiaries. However, the majority of the NonContainer Leasing Businesses and assets are held by Non-Debtor Subsidiaries over which the Chapter 7 trustees are unlikely to have direct control. Furthermore, it is possible that certain creditors may seek the appointment of a Bermudian liquidator for SCL, resulting in a cross-border competition for control of SCL, implicating complex issues of jurisdiction and comity that could drain remaining resources rapidly through litigation, and otherwise delay any residual distributions to creditors. Sea Containers Ltd. Liquidation Analysis As of November 30, 2008 Value -------------------------- Ch. 7 High Ch. 7 Low ---------- --------- Cash $30,100,000 $30,100,000 Net receivables - group companies 100,700,000 75,300,000 Investment in GESeaCo 315,800,000 228,800,000 Containers 104,000,000 85,300,000 Other assets 5,400,000 5,400,000 ----------- ----------- Est. gross liquidation proceeds 556,000,000 424,900,000 DIP claims (145,500,000) (145,500,000) Other administrative claims (84,200,000) (92,700,000) Est. Chapter 7 trustee fee (8,800,000) (4,300,000) Est. Chapter 7 costs and fees (21,800,000) (39,500,000) ----------- ----------- (260,300,000) (282,000,000) Estimated proceeds available ----------- ----------- to 3rd party unsecured claims 295,700,000 142,900,000 3rd party unsecured claims: Noteholder claims 420,900,000 420,900,000 Pension fund claims 261,200,000 245,800,000 Guarantee claims 21,900,000 28,000,000 Other claims 18,400,000 63,400,000 ----------- ----------- $722,400,000 $758,100,000 Est. % recovery to 3rd party unsecured claims 41% 19% Estimated proceeds available to interests - - Sea Containers Services Ltd. Liquidation Analysis As of November 30, 2008 Value -------------------------- Ch. 7 High Ch. 7 Low ---------- --------- Net receivables - group companies $21,000,000 $42,500,000 Other assets 1,700,000 1,700,000 ----------- ----------- Est. gross liquidation proceeds 22,700,000 44,200,000 Other administrative claims (16,300,000) (1,100,000) Est. Chapter 7 trustee fee (100,000) (700,000) Est. Chapter 7 costs and fees (4,000,000) (18,000,000) ----------- ----------- (20,400,000) (19,800,000) Estimated proceeds available ----------- ----------- to 3rd party unsecured claims 2,300,000 24,400,000 3rd party unsecured claims: Pension claims - 207,400,000 Other claims 6,400,000 6,400,000 ----------- ----------- $6,400,000 $213,800,000 Est. % recovery to 3rd party unsecured claims 36% 11% Est. proceeds available to interests - - Sea Containers Caribbean Inc. Liquidation Analysis As of November 30, 2008 Value -------------------------- Ch. 7 High Ch. 7 Low ---------- --------- Cash - - Net receivables - group companies - - Other assets - - ----------- ----------- Est. gross liquidation proceeds - - Other administrative claims - - Est. Chapter 7 trustee fee - - Est. Chapter 7 costs and fees - - ----------- ----------- - - Estimated proceeds available ----------- ----------- to 3rd party unsecured claims - - 3rd party unsecured claims: Pension claims - - Other claims - - ----------- ----------- - - Est. % recovery to 3rd party unsecured claims - - Est. proceeds available to interests - - According to the Analysis, the Plan assumes that Intercompany Claims will pass through the Debtors' Chapter 11 cases, pursuant to an agreed-to standstill with the Non-Debtor Subsidiaries, to be resolved post-Confirmation. In a Chapter 7 liquidation, however, it is possible that Claims otherwise settled under the Plan may be asserted against the Non-Debtor Subsidiaries, leading to those companies to set aside the Intercompany Standstill and, instead, assert Claims against the Debtors or other Non-Debtor Subsidiaries, resulting in a cascading call on Intercompany Claims across the SCL group. These Intercompany Claims could be asserted and pursued through contested legal proceedings, including competing proceedings in non-U.S. jurisdictions. Within a contested environment, asset values and costs discussed in the Liquidation Analysis may differ materially from estimates referred to in the Plan and Disclosure Statement. A full-text copy of the Debtors' Liquidation Analysis is available at no charge at http://researcharchives.com/t/s?3190 About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt and Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement on July 31, 2008. (Sea Containers Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: PBGC & SPCP Objects to Disclosure Statement ----------------------------------------------------------- Two parties-in-interest have objected to Sea Containers Ltd. and its debtor-affiliates' disclosure statement explaining their joint plan of reorganization. 1) Pension Benefit Guaranty Corporation The Pension Benefit Guaranty Corporation complains that the disclosure statement violates Section 1125(a)(1) of the U.S. Bankruptcy Code by failing to adequately disclose the Debtors' responsibilities and liabilities under the Employee Retirement Income Security Act and Internal Revenue Code with regard to the currently underfunded Sea Containers America Pension Plan. "In particular, the Disclosure Statement fails to fully account for the Debtors' statutory liabilities under ERISA and IRC that continue to accrue should the Pension Plan remain ongoing or liabilities that arise should the Pension Plan terminate in a distress termination or PBGC-initiated termination," Charles L. Finke, Esq., PBGC's deputy chief counsel, tells the Court. He notes that PBGC has contacted the Debtors' counsel to resolve the issues consensually, but files the objection as a protective measure. ERISA provides the exclusive means for a plan sponsor to terminate a pension plan by a standard termination, a distress termination, or a PBGC-initiated termination. PBGC is a U.S. Government agency that administers pension plan termination insurance program under ERISA. Non-Debtor Sea Containers America, Inc., is the Pension Plan's contributing sponsor, Mr. Finke relates. As a subsidiary of Debtor Sea Containers, Ltd., however, SCA and all of the Debtors are under common control for purposes of ERISA and IRC, and thus, are members of the same controlled group that are jointly and severally liable for certain statutory obligations in relation to the Pension Plan, including contributions necessary to satisfy the Pension Plan's minimum funding standards under the IRC and ERISA, and variable-rate and flat-rate premiums owed to PBGC. If the Pension Plan terminates in a Distress or PBGC Termination, Mr. Finke explains, SCA, the Debtors, and their controlled group members would be jointly and severally liable for all unpaid minimum funding contributions, which would become immediately due and payable upon termination and are typically owed to PBGC, who would become the Pension Plan's statutory trustee upon termination. He says that SCA, et al., would also incur joint and several liability to PBGC for the total amount of the Pension Plan's unfunded benefit liabilities, which is the excess of a pension plan's "benefit liabilities" over the value of the pension plan's assets. Mr. Finke discloses that after the Debtors filed for bankruptcy protection, PBGC timely filed proofs of claims, on its own behalf and on behalf of the Pension Plan, for (i) the Pension Plan's unfunded benefit liabilities, (ii) unpaid minimum funding contributions, and (iii) unpaid premiums owed to PBGC. However, he notes, the Disclosure Statement does not provide that SCA, et al., are jointly and severally liable for certain liabilities and contributions with respect to the Pension Plan. PBGC, therefore, suggests that certain language should be added to the Disclosure Statement regarding the Pension Plan, including the fact that the Pension Plan is underfunded on a termination basis for $2,047,651, and that $10,469 in unpaid minimum funding contributions are due. If the Debtors include the suggested language, PBGC would withdraw its objection, Mr. Finke assures the Court. PBGC expects its concerns will be reflected in the Debtors' Chapter 11 Plan. PBGC also objects to the Disclosure Statement because it fails to disclose ERISA's effect on the Chapter 11 Plan's provision titled "Employee Benefits." Mr. Finke contends that the provision clearly violates ERISA, which provides the exclusive means to terminate a defined benefit pension plan. Thus, the Pension Plan cannot be summarily terminated "pursuant to the [Debtors' Plan of Reorganization]" without satisfying ERISA's statutory requirements and corresponding regulations, he adds. PBGC further complains that the Disclosure Statement and the Chapter 11 Plan provide for broad releases of non-debtor liability. Mr. Finke notes that the Disclosure Statement does not even mention the claims that are being released, and does not discuss whether the proposed release applies to PBGC's claims and any claims of the Pension Plan's participants. He adds that the Disclosure Statement does not even discuss why the releases are appropriate. The Debtors have failed to provide "adequate information" as defined in Section 1125, Mr. Finke points out. Mr. Finke says PBGC is willing to withdraw its objections if its suggested language were included in the Disclosure Statement and the Chapter 11 Plan. 2) SPCP Group, et al. Pursuant to an assignment of claim agreement, Papenburger Fahrschiffsreederei GMBH & Co., transferred and assigned to SPCP Group, L.L.C, all of its right, title and interest in and to a claim against Sea Containers Ltd. The claim relates to a certain sale and purchase agreement, Paul Traub, Es q., at Dreier LL, in New York, relates. SPCP Group subsequently sold 75% of the Papenburger Claim to various third parties, with SPCP Group retaining 25% of the claim for its own account. In April 2007, SPCP Group filed a proof of claim, designated as Claim No. 25, evidencing its portion of the Papenburger Claim, against SCL, Mr. Traub informs the Court. On August 21, 2008, SPCP Group amended Claim No. 25 to correct the claim amount, which was listed in U.S. dollars, as opposed to Euros. He declares that the correct claim amount should be EUR3,951,335. The Debtors' proposed plan of reorganization contains the definition "Allowed SPCP Group Claim" with a proposed allowed claim amount erroneously listed as $3,951,335, Mr. Traub relates. He contends that the claim amount should be in Euros and not in dollars. Mr. Traub further relates the that the "Allowed JMB Capital Claim" and "Allowed Trilogy Claim" defined in the Plan represent two 25% portions of the Papenburger Claim, which have been converted from EUR3,951,335 to $4,951,813. Since Claim No. 25 is identical to the JMB and Trilogy claims, the definition of "Allowed SPCP Group Claim" in the Plan should match the two claims' definitions, so that the "Allowed SPCP Group Claim" should be listed in the aggregate allowed amount of $4,951 ,813, or the Euro equivalent of EUR3,951,335, Mr. Traub points out. Accordingly SPCP Group, as agent for Silver Point Capital Fund, L.P., and Silver Point Capital Offshore Fund, Ltd., as assignee of Papenburger, ask Judge Carey to: (a) direct the Debtors to amend the Plan and Disclosure Statement to define the "Allowed SPCP Group Claim" as EUR3,951,335, or the identical definition used to define "Allowed JMB Capital Claim" and "Allowed Trilogy Claim"; or (b) deny the approval of the Disclosure Statement based on the incorrect and inadequate information it contained with respect to the "Allowed SPCP Group Claim". About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt and Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement on July 31, 2008. (Sea Containers Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Balks at $500 Million Securities Fraud Claim ------------------------------------------------------------ Sea Containers Ltd. and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to disallow Claim No. 116, which was asserted in amounts "in excess of $500 million," and filed on behalf of a putative plaintiff class, whose consolidated action at the U.S. District Court for the Southern District of New York was dismissed with prejudice by the Honorable Richard Berman. Robert S. Brady, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware, relates that the Claim is based entirely on allegations of securities law violations that Judge Berman has twice dismissed. Accordingly, he says, the long-standing principles of res judicata and collateral estoppel mandate that the Claim be disallowed. In the alternative, the Claim should be disallowed for the same carefully considered reasons that the New York District Court has repeatedly found the Plaintiffs' allegations to be deficient, Mr. Brady tells the Bankruptcy Court. Any contrary result not only would be legally inconsistent, but also would place a needless burden on the bankruptcy estates, he continues. The putative class action complaint named Sea Containers Ltd., its former chief executive officer and chairman, and two of its former chief financial officers as defendants. The complaint asserts that the defendants made false and misleading statements in violation of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The principles of res judicata bar the assertions set out in the Claim because it is based entirely on allegations that the New York District Court twice rejected for failure to state any claim upon which relief can be granted, Mr. Brady contends. He notes that the Plaintiffs have had two full and fair opportunities to state a cognizable basis for liability under the federal securities laws, and have failed to do so. Thus, Mr. Brady states, permitting the Plaintiffs to relitigate the issues in the Bankruptcy Court would constitute an end run of the New York District Court's opinions, and result in the Plaintiffs receiving an unjustified third "bite at the apple." Mr. Brady further argues that the allegations set out in the Claim are barred under the principles of collateral estoppel because the claims at issue are identical to those involved in the District Court action. Accordingly, the Debtors submit that the elements for issue preclusion have clearly been satisfied, and thus, the Claim must be disallowed. The Debtors reserve all of their rights to file any request, pleading or brief with respect to any further consideration the Bankruptcy Court may give to the Claim. To the extent the Bankruptcy Court allows any portion of the Claim, the Debtors reserve the right to file an adversary proceeding to subordinate the allowed portion of the Claim pursuant to Section 510(b) of the U.S. Bankruptcy Code. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt and Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement on July 31, 2008. (Sea Containers Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SEA CONTAINERS: Files Notice of Bermuda Scheme of Arrangement ------------------------------------------------------------- Sea Containers Limited has notified parties-in-interest that in line with its Plan of Reorganization filed with the United States Bankruptcy Court for the District of Delaware, and its winding up proceedings in Bermuda, it anticipates entering into a Scheme of Arrangement with certain of its creditors, pursuant to Section 99 of the Companies Act 1981 of Bermuda, for the purpose of implementing the Plan in Bermuda. According to SCL, it is likely that an application to the Supreme Court of Bermuda will be made during this month to convene one or more meetings of creditors, as applicable. SCL proposes that, if approved, the Scheme will become effective in or around mid to late November this year and have a Scheme bar date in or around mid to late December. The Scheme Bar Date is the date by which any claims against SCL not currently filed in the Chapter 11 proceedings must be submitted by creditors to be taken into account for distribution purposes. SCL says that notwithstanding the substantial efforts made to date to identify all creditors, SCL is keen to identify any remaining person or persons who believe they have a claim against SCL and who have not already submitted claims in respect of the Chapter 11 proceedings. These person or persons may be eligible to submit a claim in respect of the Scheme if their failure to participate in the Chapter 11 Proceedings is not a result of willful default or lack of reasonable diligence, according to the notice. Accordingly, SCL urges creditors who have not previously filed a claim in the Chapter 11 proceedings to contact its claims and solicitation agent: BMC Group, Inc. 31 Southampton Row, 4th Floor Holborn WC1B 5HJ, England Tel. No.: +44-20-7000-1214 or at: 444 Nash Street El Segundo, California 90245 Tel. No.: 001-888-909-0100 or at: http://www.bmcgroup.com/scl The bar date for filing claims against SCL under the Chapter 11 Proceedings was set at July 16, 20, 2007, and a subsequent bar date for claims by employees was set at August 28, 2008. About Sea Containers Based in Hamilton, Bermuda, Sea Containers Ltd. -- http://www.seacontainers.com/-- provides passenger and freight transport and marine container leasing. Registered in Bermuda, the company has regional operating offices in London, Genoa, New York, Rio de Janeiro, Sydney, and Singapore. The company is owned almost entirely by United States shareholders and its primary listing is on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct. 3, the company's common shares and senior notes were suspended from trading on the NYSE and NYSE Arca after the company's failure to file its 2005 annual report on Form 10-K and its quarterly reports on Form 10-Q during 2006 with the U.S. Securities and Exchange Commission. Through its GNER subsidiary, Sea Containers Passenger Transport operates Britain's fastest railway, the Great North Eastern Railway, linking England and Scotland. It also conducts ferry operations, serving Finland and Estonia as well as a commuter service between New York and New Jersey in the U.S. Sea Containers Ltd. and two subsidiaries filed for chapter 11 protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156). Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway, Stargatt and Taylor, represent the Debtors in their restructuring efforts. The Official Committee of Unsecured Creditors and the Financial Members Sub-Committee of the Official Committee of Unsecured Creditors of Sea Containers Ltd. is represented by William H. Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris, Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s Official Committee of Unsecured Creditors is represented by attorneys at Willkie Farr & Gallagher LLP. In its schedules filed with the Court, Sea Containers disclosed total assets of $62,400,718 and total liabilities of $1,545,384,083. The Debtors filed their joint Chapter 11 plan of reorganization and disclosure statement on July 31, 2008. SEMGROUP LP: Seeks Court Approval to Reject Contracts ----------------------------------------------------- Marie Price at The Journal Record reports that SemGroup, L.P., and its debtor-affiliates are asking the permission of the U.S. Bankruptcy Court for the District of Delaware to reject certain executory contracts. The Journal Record states that the contracts involve several SemGroup companies and are grouped into consulting and service, employment, and sales agreements. With court approval and within certain limitations, debtors can assume or reject executory contracts or unexpired leases, as stated in the federal bankruptcy code. The Debtors said in a court filing that they have started a comprehensive review of its contracts to determine which to assume and which to reject. According to The Journal, the Debtors decided to reject contracts that involve: -- SemMaterials LP, -- SemGas LP, -- SemManagement LLC, and -- SemGroupLP. The Debtors, says The Journal, claim that those agreements don't benefit the their estates. The Journal relates that the Debtors entered into the agreements before the commencement of their bankruptcy case. The contracts include several sales, employment, and separation agreements, according to the report. Debtors said in the court filing, "As the debtors continue their review, they anticipate rejecting additional executory contracts pursuant to rejection procedures to be approved by the court." The Journal states that the Debtors also asked the Court to approve expedited procedures for rejection of contracts and unexpired leases and abandonment of related property. According to the report, the Debtors explained that the procedures would streamline their ability to reject burdensome contracts that provide no benefit to the bankruptcy estate, minimizing unnecessary post-petition obligations. The Journal adds that the procedures would provide affected parties with adequate notice of rejection and an opportunity to object within a reasonable time period. 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. 9; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SEQUOIA COMM: Sells Asset to Clinica for $8.27MM; Gets $2MM Loan ---------------------------------------------------------------- The Deal's Terry Brennan reports that the Hon. Whitney Rimel of the United States Bankruptcy Court for the Eastern District of California approved sale of assets of Sequoia Community Health Foundation, Inc., dba Sequoia Community Health Clinic, to Clinica Sierra Vista for $8.27 million. As reported in the Troubled Company Reporter on Aug. 27, 2008, under an asset purchase agreement dated Aug. 15, 2008, an $850,000 cash must be submitted to the Debtor during the closing date or within 24 hours after an entry of a sale order. Clinica Sierra offered to buy the Debtor's assets for $850,000 cash, $5.92 million in assumed debt and $2 million credit bid. The Sale will allow Bakersfield, California-based Clinica to become one the largest non-profit healthcare clinic operator in the U.S. Clinica is currently the 15th largest clinic operator in the U.S. Based on court documents, the Debtor plans to either request the Court to convert its chapter 11 case to a chapter 7 liquidation proceeding, or to proceed with filing a chapter 11 plan within 30 to 45 days after the sale closing. $2 Million DIP Facility According to The Deal, the Court authorized the Debtor to obtain, on a final basis, up to $2 million in postpetition financing from Cinica Sierra, as lender. The Court also authorized the Debtor to use at least $1.05 million cash collateral securing repayment of loans to Wells Fargo Bank NA and Cal- Mortgage, The Deal says. The $2 million loan will incur interest rate at10%, The Deal says. The Debtor will pay $30,000 to cover lender's closing costs and expenses, the report adds. About Sequoia Community Fresno, California-based Sequoia Community Health Foundation, Inc., dba Sequoia Community Health Clinic, runs eight clinics. The health care provider filed its chapter 11 petition on June 24, 2008 (Bankr. E.D. Calif. Case No. 08-13653). Judge Whitney Rimel presides over the case. Riley C. Walter, Esq., at Walter Wilhelm Law Group represents the Debtor in its restructuring efforts. No Official Committee of Unsecured Creditors has been formed in this case. The Debtor has assets of between $1 million and $10 million and debts of between $1 million and $10 million. SHEAFE HARBOR: Owner Turns Up with $190,000 Bid at Auction ---------------------------------------------------------- Marion Hurley of Saugus, Mass., the owner of the Victorian-era structure Sheafe Harbor House, is the only bidder of the property with a $190,000 bid at an auction on Friday, Geoff Cunningham Jr. of The Citizen of Laconia (N.H.) reports. Robert Hundertmark, Esq., of Woburn, Massachusetts, represents the Hurley family. An agreement that Mr. Hurley, as mortgagor, reached with the town in Belknap County Superior Court earlier this year allowed him to foreclose on the property. Under the agreement, the town would have a warrant article making $60,000 available for the removal of dilapidated buildings in town through a loan. The article was approved at the March town meeting, according to the report. Sheafe Harbor House Inc., the nonprofit organization formed to benefit the Sheafe Harbor House, filed for Chapter 7 bankruptcy in April. Later, the Chapter 7 bankruptcy changed to a filing for Chapter 11 bankruptcy, according to Center Harbor Selectman Charley Hanson, the report said. Sheafe House's filed a motion for relief, but was denied on failure to do certain actions according to requirements. The auction was conducted by McGlauflin Group Auctioneers of Plymoth. About Sheafe Harbor House Sheafe Harbor House is a large home which is located next to the Center Harbor Congregational Church. The house was built by Portsmouth merchant William Sheafe in 1877 as a summer home and for years was a landmark property in the town. It became the Twin Gates Manor Nursing Home in 1949 and later was an apartment building with the original carriage sheds renovated to become the Dybros House of Jewelry and Gift Shop. SHELLS SEAFOOD: Blames Bankruptcy Filing on Economic Collapse ------------------------------------------------------------- Shells Seafood Restaurants, Inc. has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing was made in the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division. Shells owns 18 restaurants with a partial interest in two additional restaurants, but today closed operations at eight locations. The eight closed restaurants are located in Ocala, Winter Park, Orlando, Kissimmee, Winter Haven, St Petersburg, Holmes Beach and Ft Myers. Some four other "Shells" locations managed and operated by the company, as well as the partially owned and managed "Rock Beach Grill" restaurant, are not included in this petition. The core group of the remaining 10 restaurants owned by Shells are expected to conduct business as usual without interruption, providing their many loyal customers with the same high level of service and quality to which they have become accustomed. Chief Executive Officer Marc Bernstein said, "The restaurant industry has been negatively affected by the economic downturn, as recently reflected by the closings of Bennigan's and Steak and Ale restaurant chains. This downturn has affected some of the marginal stores operated by Shells and necessitated the Chapter 11 filings and store closings. The 10 remaining restaurants have the strongest historical performance or the greatest potential for the future. It is our goal to emerge from Chapter 11 as soon as we can with a capital structure and a balance sheet that will allow us to continue to operate." Shells is currently pursuing various sources of post-petition financing but has not received any financing commitments. There is no assurance that Shells will obtain any additional financing. About Shells Seafood Tampa, Florida-based Shells Seafood Restaurants, Inc. (OTC:SHLL) -- http://www.shellsseafood.com/-- manages and operates 14 full- service, neighborhood seafood restaurants in Florida under the name "Shells." Additionally, the company partially owns and manages a full-service restaurant named "Rock Beach Grill" in Pembroke Pines, Florida. The company's restaurants feature a wide selection of seafood items, including shrimp, oysters, clams, mussels, scallops, lobster, crab and daily fresh fish specials, cooked to order in a variety of ways: steamed, sauteed, grilled, blackened and fried. The company's restaurants also offer a wide selection of pasta dishes, ribs, chicken, steaks, appetizers, salads, desserts, full bar service and sushi, in select locations. SILICON GRAPHICS: June 27 Balance Sheet Upside-Down by $56.4MM -------------------------------------------------------------- Silicon Graphics Inc.'s balance sheet at June 27, 2008, showed total assets of $415.1 million and total liabilities of $471.5 million, resulting in a shareholders' deficit of $56.4 million. SGI reported financial results for the fourth quarter and fiscal year 2008 ended June 27, 2008. The company stated that it has achieved its stated objectives for the fiscal year of strong growth in bookings, a strengthened leadership team, an array of new products and services, and penetration into new customer accounts. The company reported net loss of $35.1 million for the three months ended June 27, 2008, compared to net loss of $36.9 million for the same period in the previous year. For nine months ended June 27, 2008, the company incurred net loss of $153.2 million compared to net loss of $103.6 million for the same period in the previous year. Revenue for the fourth quarter was $93.9 million, compared to $79.1 million in the third quarter and $122.3 million in the fourth quarter of the prior year, representing an increase of 19% and a decline of 23%. Revenue for fiscal 2008 was $354.1 million, a decline of 24% from the prior fiscal year. The fiscal 2008 operating loss was $127.2 million, compared to a loss of $101.2 million for the prior fiscal year. The fourth quarter operating loss was $28.6 million, compared to $40.6 million in the third quarter and $24.8 million in the fourth quarter of the prior year. Operating expenses for fiscal 2008 were $230.7 million, a decrease of $4.6 million, or 2% year-over- year. Operating expenses were $58.1 million for the fourth quarter of fiscal 2008, compared to $59.2 million for the third quarter and $56.9 million in the fourth quarter of the prior year. Chairman of SGI Board of Directors SGI also disclosed that Anthony Grillo has been named the chairman of its board of directors. Mr. Grillo has served on the SGI board of directors since October 2006. "I look forward to continuing to work closely with management and my fellow board members," Mr. Grillo, who is founder and CEO of American Securities Advisors LLC, said. About Silicon Graphics Inc. Headquartered in Sunnyvale, California, Silicon Graphics Inc. -- http://www.sgi.com/-- (NASDAQ:SGIC) is a provider of products and services for use in high-performance computing and data management. The company sell solutions based on a range of scalable servers and storage products from entry-level to high- end, together with associated software products. It also offers a range of services, including professional services, customer support and education that enable fast installation and implementation of the solutions. SGI server systems are based on the Linux operating system and the Intel Itanium 2 and Xeon microprocessor families. It also offers Microsoft Windows Compute Cluster Server on the Altix XE servers and Microprocessr without Interlocked Pipeline Stages RISC microprocessors. The company sells system products and solutions through both a direct sales force and indirect channel partners. On May 8, 2006, Silicon Graphics and 13 subsidiaries filed for chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 06-10977). Gary Holtzer, Esq., and Shai Y. Waisman, Esq., at Weil Gotshal & Manges LLP, in New York, represented the Debtors. The Hon. Allan L. Gropper confirmed a Modified First Amended Plan of Reorganization Sept. 19, 2006, allowing the Debtors to emerge from bankruptcy a month later. On the plan effective date, SGI announced completion of its exit financing facility with Morgan Stanley Senior Funding Inc. and General Electric Capital Corporation, as lending agents. The facility provided $115 million in financing consisting of an $85 million term loan and a $30 million revolving line of credit. The facility is secured by substantially all of the assets of SGI and its domestic subsidiaries. The exit facility, combined with $57 million in proceeds from SGI's rights offering and sale of overallotment shares, were used to pay off $113 million in existing DIP financing, make distributions pursuant to the Reorganization Plan, and provide working capital for the company's ongoing operations. The exit financing facility matures in five years. Pursuant to the Plan, the company issued 11,125,000 shares of new SGI common stock to certain SGI creditors in satisfaction of claims and upon exercise of stock purchase rights and overallotment options. SGI's prior common stock was canceled with no distribution made to holders of the old stock. SHARPER IMAGE: Vornado Air Slams $1 Million Legal Fee Requests -------------------------------------------------------------- According to Bankruptcy Law360, Vornado Air LLC told the U.S. Bankruptcy Court for the District of Delaware that it is opposing the $1 million in fee requests by lawyers and advisers to Sharper Image Corp. Bankruptcy Law360 relates that Vornado told the court that its $50,000 claim on the Debtor takes precedence. About Sharper Image Based in San Francisco, California, Sharper Image Corp. -- http://www.sharperimage.com/-- is a multi-channel specialty retailer. It operates in three principal selling channels: the Sharper Image specialty stores throughout the U.S., the Sharper Image catalog and the Internet. The company has operations in Australia, Brazil and Mexico. In addition, through its Brand Licensing Division, it is also licensing the Sharper Image brand to select third parties to allow them to sell Sharper Image branded products in other channels of distribution. The company filed for Chapter 11 protection on Feb. 19, 2008 (Bankr. D.D., Case No. 08-10322). Judge Kevin Gross presides over the case. Harvey R. Miller, Esq., Lori R. Fife, Esq., and Christopher J. Marcus, Esq., at Weil, Gotshal & Manges, LLP, serve as the Debtor's lead counsel. Steven K. Kortanek, Esq., and John H. Strock, Esq., at Womble, Carlyle, Sandridge & Rice, P.L.L.C., serve as the Debtor's local Delaware counsel. An Official Committee of Unsecured Creditors has been appointed in the case. Cooley Godward Kronish LLP is the Committee's lead bankruptcy counsel. Whiteford Taylor Preston LLC is the Committee's Delaware counsel. When the Debtor filed for bankruptcy, it listed total assets of $251,500,000 and total debts of $199,000,000. As of June 30, 2008, the Debtor listed $52,962,174 in total assets and $39,302,455 in total debts. The Court extended the exclusive period during which the Debtor may file a Plan through and including Sept. 16, 2008. Sharper Image sought and obtained the Court's approval to change its name to "TSIC, Inc." in relation to an an Asset Purchase Agreement by the Debtor with Gordon Brothers Retail Partners, LLC, GB Brands, LLC, Hilco Merchant Resources, LLC, and Hilco Consumer Capital, LLC. (Sharper Image Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) SOLUTIA INC: Addresses "Last Few" Bankruptcy Claims --------------------------------------------------- Michael A. Cohen, Esq., at Kirkland & Ellis LLP, told Judge Prudence C. Beatty of the U.S. Bankruptcy Court for the Southern District Court of New York that Solutia Inc. is working towards getting the "last few claims resolved" in order to seek a final decree closing its Chapter 11 cases. Mr. Cohen told the Court that aside from their agreement with E.I. DuPont de Nemours and Company, the Debtors have reached a settlement agreement with the Dickerson claim, and will present the settlement to Judge Beatty upon the district court's approval of the settlement. "And we do have a few claims that are left out there, but we are working to get those resolved in as efficient a manner as possible with regard to the estate, and we're working with our claim's monitor in that regard," Mr. Cohen stated. "And it really is a very small number of claims, especially for a case of Solutia's size." Judge Beatty said that she'd be extremely gratified if the entire case could be closed by Dec. 31, 2008, about 13 months since the confirmation of Solutia's Reorganization Plan on Nov. 29, 2008. Judge Beatty noted that NRG Energy, Inc., which were represented by Kirkland & Ellis, and Mr. Cohen in their bankruptcy cases, was able to quickly close its Chapter 11 cases. Mr. Cohen agreed to a Dec. 31 target for closing of Solutia's Chapter 11 case. Judge Beatty noted that Solutia won't continue paying fees to the U.S. Trustee once it closes its Chapter 11 cases. In a discussion with Mr. Cohen about how Solutia is doing post- emergence, Judge Beatty said at the hearing that she'd expect Solutia to continue to do well, notwithstanding the difficult economic times in the United States., noting that some of its products are not U.S. dependent, and the company could increase prices because its products are not easily produced by other firms. About Solutia Inc. Based in St. Louis, Missouri, Solutia Inc. (OTCBB: SOLUQ) (NYSE: SOA-WI) -- http://www.solutia.com/-- and its subsidiaries, manufactures and sells chemical-based materials, which are used in consumer and industrial applications worldwide. The company and 15 debtor-affiliates filed for chapter 11 protection on Dec. 17, 2003 (Bankr. S.D.N.Y. Lead Case No. 03- 17949). When the Debtors filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. Solutia is represented by Richard M. Cieri, Esq., Jonathan S. Henes, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, as lead bankruptcy counsel, and David A. Warfield, Esq., and Laura Toledo, Esq., at Blackwell Sanders LLP, in St. Louis Missouri, as special counsel. Trumbull Group LLC is the Debtor's claims and noticing agent. Daniel H. Golden, Esq., Ira S. Dizengoff, Esq., and Russel J. Reid, Esq., at Akin Gump Strauss Hauer & Feld LLP represent the Official Committee of Unsecured Creditors, and Derron S. Slonecker at Houlihan Lokey Howard & Zukin Capital provides the Creditors' Committee with financial advice. The Official Committee of Retirees of Solutia, Inc., et al., is represented by Daniel D. Doyle, Esq., Nicholas A. Franke, Esq., and David M. Brown, Esq., at Spencer Fane Britt & Browne, LLP, in St. Louis, Missouri, and Frank M. Young, Esq., Thomas E. Reynolds, Esq., R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, in Birmingham, Alabama. On Feb. 14, 2006, the Debtors filed their Reorganization Plan & Disclosure Statement. On May 15, 2007, they filed an Amended Reorganization Plan and on July 9, 2007, filed a 2nd Amended Reorganization Plan. The Bankruptcy Court approved the Debtors' amended Disclosure Statement on Oct. 19, 2007. On Oct. 22, 2007, the Debtor re-filed a Consensual Plan & Disclosure Statement and on Nov. 29, 2007, the Court confirmed the Debtors' Consensual Plan. Solutia emerged from chapter 11 protection Feb. 28, 2008. Solutia's $2.05 billion exit financing facility was funded by Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P., and Deutsche Bank Securities Inc. The exit financing is being used to pay certain creditors, and for ongoing operations. (Solutia Bankruptcy News, Issue No. 130; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). * * * Standard & Poor's Ratings Services said its ratings on Solutia Inc. (B+/Stable/--) will not change as a result of the company's recent announcement of a public offering of common shares. SONORAN ENERGY: UHY LLP Expresses Going Concern Doubt ----------------------------------------------------- UHY LLP in Dallas, Texas, raised substantial doubt about the ability of Sonoran Energy, Inc., to continue as a going concern after auditing the company's financial statements for the year ended April 30, 2008. The auditor reported that the company had a net working capital deficit and accumulated deficit, has continuing operating losses and is not in compliance with its restrictive debt covenants associated with the Senior Secured Credit Facility. Management Statement The company has a working capital deficit of around $20,500,000, accumulated deficit of $55,400,000, has incurred continued operating losses, and requires additional capital to fund development activities, meet its obligations and maintain its operations. These conditions raise significant doubt about the company's ability to continue as a going concern. Doubts are also raised by the fact that the company is not in compliance with negative covenants of its $15,000,000 credit facility with Standard Bank, which closed on Nov. 29, 2007. The company is currently negotiating a restructuring of the facility. However, due to the uncertainty regarding the company's ability to restructure the facility, the full amount outstanding is reported as a current obligation. The company will continue to seek equity investments, restructure its facility, and work on programs to develop its oil and gas property. There can be no assurance, however, that these efforts will generate sufficient cash flow to meet its obligations or to continue its development program. Given the current commodity price environment, the company's ability to obtain financial support from its key shareholders, and the progress on development of its assets over the past few months, management expects to reach an acceptable resolution to remedy the expected default of the facility's covenants. If an agreement is not reached, the company could be forced to seek protection from creditors. Subsequent to the year ended April 30, 2008, the company has received continued support of key shareholders as evidenced by investments totaling $1,500,000 during June and July 2008. Results of Operation The company posted a net loss of $7,112,554 on total revenues of $2,344,580 for the year ended April 30, 2008, as compared with a net loss of $9,062,713 on total revenues of $2,512,037 in the prior year. Revenues decreased to $2,344,580 for the year ended April 30, 2008, from the $2,512,037 for the year ended April 30, 2007, due primarily to the lack of Scottsdale Oilfield Services consulting contracts, which amounted to $411,192 in 2007 offset by an increase in revenue from Oil and Gas operations of $225,867 due primarily the increased Oil and Gas prices. The last of the consulting contracts ended in the last quarter of 2007, and the company has not actively sought any further contracts. Revenues increased to $2,512,037 for the year ended April 30, 2007, from the $1,938,234 for the year ended April 30, 2006, due primarily to increased production from its Louisiana properties. Interest expense of $2,133,430 in the year ended April 30, 2008, increased $789,423 when compared with $1,344,007 incurred in the year ended April 30, 2007. The company increased its interest- bearing debt by $4,900,000 during the year ended April 30, 2008, through the entering into a new financing for $12,000,000 offset by the repayment of $6,900,000 of the old senior secured credit facility debt and conversion of $200,000 of convertible debt to common shares. The early payout of the NGP loans resulted in a charge to loss on debt extinguishments of $344,163, which represents deferred costs that would have been amortized over the life of the loan. The new financing carried fees and set-up costs totaling $1,042,579. The costs are being amortized over the 36-month term of the loan resulting in a charge to interest expense of $120,647 for the year ended April 30, 2008. In addition, the new financing carried warrants that were valued at $643,076 that are being amortized over the 36-month term of the loan resulting in a charge to interest expense of $89,316 for the year ended April 30,2008. The increase in interest expense is attributed to the cost of NGP loan and the convertible debt for a longer period in 2008 plus the costs associated with the increased debt level in 2008. Liquidity and Capital Resources The company had cash and cash equivalents of $612,998 at April 30, 2008, for a decrease of $90,510 when compared with April 30, 2007. During the third quarter of 2008, the company obtained additional funding from Standard Bank under a new credit facility, which closed on Nov. 29, 2007. The company borrowed a total of $12,000,000 under this facility during the quarter, which was used to repay the NGPC facility, repurchase an override from NGPC, and to partially fund its Louisiana work over program. The remaining $3,000,000 is not currently available, as the company is expected to be in default of several covenants of the facility by July 31, 2008. The funds raised under this facility were primarily used to conduct re- completions on two high impact Louisiana wells. However, the operations were suspended without achieving production. During March 2008 and June 2008, the company obtained funds from two large shareholders to support its planned operations in West Texas. These operations have a lower risk profile, but take longer to provide the desired increase in production. The company has seen some successes in its West Texas operations, and higher oil prices have increased the feasibility of certain low cost well interventions in East Texas. While the two large shareholders have provided funds for developments over the past year, there is no assurance that they will continue to support the company's activities. The company projects that production levels in August will be sufficient to cover operating expenses and provide sufficient funding for operating and debt service requirements. However, the company will need to seek additional debt or equity funds to continue to develop its assets including seeking a partner for its Louisiana project. The company believes that it will be able to obtain additional funding as needed to continue to meet the anticipated liquidity and capital resource needs of the company for the fiscal year ending April 30, 2009. Probability of Bankruptcy Compliance with the negative covenants in the facility is not required until after April 30, 2008. However, the company is not currently in compliance and must make significant improvements to achieve compliance. The company is currently negotiating a restructuring of the facility. Accordingly, the full amount outstanding under the facility is reported as a current liability. If an agreement is not reached, the company could be forced to seek protection from creditors. The company expects to reach an agreement that will reduce cash requirements to an acceptable level. Balance Sheet At April 30, 2008, the company's balance sheet showed $46,632,725 in total assets, $23,738,964 in total liabilities, and $22,893,761 in total stockholders' equity. The company's consolidated balance sheet at April 30, 2008, showed strained liquidity with $1,783,120 in total current assets available to pay $22,252,610 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?3191 About Sonoran Energy Dallas-based Sonoran Energy, Inc., (Other OTC: SNRN) -- http://www.sonoranenergy.com/-- is an independent oil and gas company that acquires, develops, produces and explores oil and gas properties primarily in North America. Its principal property consists of proved and unproved oil and gas property in Louisiana and Texas. The company, formerly known as Showstar Online.com, Inc., was founded in 1995. SOUTH COAST: Fitch Cuts 'BBB' Rating on $193 Mil. Notes to 'CCC' ---------------------------------------------------------------- Fitch downgrades and removes from Rating Watch Negative three classes of notes issued by South Coast Funding I Ltd. (South Coast I). These rating actions are effective immediately: -- $193,366,908 Class A-1 Notes downgraded to 'CCC' from 'BBB-' and removed from Rating Watch Negative; -- $38,000,000 Class A-2 Notes downgraded to 'CC' from 'BB' and removed from Rating Watch Negative; and -- $28,082,879 Class B Notes downgraded to 'C' from 'CC' and removed from Rating Watch Negative. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically in subprime residential mortgage backed securities (RMBS). South Coast I is a cash flow structured finance (SF) collateralized debt obligation (CDO) that closed on December 21, 2001 and is managed by TCW Investment Management Company. Presently, 31.7% of the portfolio is comprised of 2005 through 2007 vintage U.S. subprime RMBS, 21.8% pre-2005 vintage subprime RMBS, 9.3% 2005 through 2007 vintage U.S. Alternative (Alt)-A RMBS, 8.4% pre-2005 vintage Alt-A RMBS, and 1.8% U.S. SF CDOs. Since Fitch's last review in November 2007, approximately 42.1% of the portfolio has been further downgraded and 4.4% of the portfolio is currently on Rating Watch Negative. 53.8% of the portfolio is now rated below investment grade, with 38.3% of the portfolio rated 'CCC+' or below. The negative credit migration experienced since the last review has resulted in the weighted average rating factor deteriorating to 'BB-/B+' as of the July 11, 2008 trustee report from 'BBB-' at Fitch's last review, breaching its covenant of 'BBB/BBB-'. The collateral deterioration has caused each of the overcollateralization (OC) ratios to fall below their triggers. As of the trustee report dated July 11, 2008, the class A OC ratio was 91.4% and the class B OC ratio was 81.1%, both falling below their triggers of 105.0% and 101.5%, respectively. As a result of the class A OC test failure, interest proceeds remaining after paying class A-2 interest are being diverted to redeem the class A-1 notes. Additionally, payment of interest on the class B notes has been made in kind by writing up the principal balance of the class by the amount of interest owed. Fitch does not expect the class B notes to receive any interest or principal payments going forward. Further, all interest coverage ratios are failing. The downgrades to the rated notes reflect Fitch's updated view of the default risk associated with each of the notes. The ratings on the class A-1 and A-2 notes address the likelihood that investors will receive full and timely payments of interest, as per the governing documents, as well as the stated balance of principal by the maturity date. The rating on the class B notes addresses the likelihood that investors will receive ultimate and compensating interest payments, as per the governing documents, as well as the stated balance of principal by the maturity date. Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. Fitch will continue to monitor and review this transaction for future rating adjustments. STRAITS GLOBAL: Poor Collateral Prompts Fitch to Downgrade Ratings ------------------------------------------------------------------ Fitch Ratings downgraded six classes and removed from Rating Watch Negative five classes of notes issued by Straits Global ABS CDO I, Ltd. (Straits CDO I). These rating actions are effective immediately: -- $94,150,454 class A-1 notes downgraded to 'A' from 'AA-' and removed from Rating Watch Negative; -- $72,000,000 class A-2 notes downgraded to 'BB' from 'BBB'; remains on Rating Watch Negative; -- $41,000,000 class B-1 notes downgraded to 'CCC' from 'BB+' and removed from Rating Watch Negative; -- $7,000,000 class B-2 notes downgraded to 'CCC' from 'BB+' and removed from Rating Watch Negative; -- $10,685,114 class C-1 notes downgraded to 'C' from 'CCC' and removed from Rating Watch Negative; -- $3,116,902 class C-2 notes downgraded to 'C' from 'CCC' and removed from Rating Watch Negative. Fitch's rating actions reflect the significant collateral deterioration within the portfolio, specifically in subprime residential mortgage-backed securities (RMBS) and Alternative-A (Alt-A) RMBS. Straits CDO I is a cash flow structured finance (SF) collateralized debt obligation (CDO) that closed on Oct. 28, 2004 and is managed by Declaration Management & Research LLC. Presently 55.7% of the portfolio is comprised of U.S. subprime RMBS, with 14.7% from the 2005 through 2007 vintages, and 14.2% consists of Alt-A RMBS, with 4.2% from the 2005 through 2007 vintages. Straits CDO I declared an event of default on May 7, 2008 due to the A/B overcollateralization (OC) ratio dropping below 100%. The class A-1 noteholders have the right to accelerate the transaction, however, based on the May and August 2008 payment date reports, they have not elected to do so. Acceleration would benefit the class A-1 notes to the detriment of more junior notes because it would direct all interest and principal proceeds to pay class A-1 interest and redeem class A-1 principal. The class A-2 notes remain on Rating Watch Negative as a vote for acceleration by the class A-1 noteholders would prevent the class A-2 notes from receiving their timely interest distributions. Since Nov. 21, 2007, approximately 49.5% of the portfolio has been downgraded with 7.8% of the portfolio currently on Rating Watch Negative. 42.9% of the portfolio is now rated below investment grade, of which 24.4% of the portfolio is rated 'CCC+' or below. The collateral deterioration has caused each of the OC ratios to fall below 100% and to fail their respective covenants. According to the trustee report dated Aug. 4, 2008, the class A/B and C OC ratios are 92.8% and 87.6%, respectively, relative to their covenants of 103.7% and 102.0%, respectively. The class C-1 and C-2 notes have been paying in kind (PIKing), whereby the principal balance of the notes is written up by the amount of missed interest, since May 2008. Based on the projected performance of the portfolio, Fitch does not expect the classes C-1 and C-2 notes to receive any interest or principal proceeds going forward. The ratings on the classes A-1, A-2, B-1 and B-2 notes address the timely receipt of scheduled interest payments and the ultimate receipt of principal as per the transaction's governing documents. The ratings on the classes C-1 and C-2 notes address the ultimate receipt of interest payments and ultimate receipt of principal as per the transaction's governing documents. Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. Fitch will continue to monitor and review this transaction for future rating adjustments. ST. STEPHEN: Petition Calls for Durham Cathedral to Take Control ---------------------------------------------------------------- Graeme Neill of The Bookseller reports that a petition calling for the Dean of Durham Cathedral to take control of the cathedral's St. Stephen the Great, LLC, bookshop from its owners Mark and Phil Brewer has received more than 100 signatures. The petition, which has been addressed to the Very Reverend Michael Sadgrove, calls for him to "rescue this once outstanding bookshop from the hands of those who have ravaged it", says Mr. Neill. The petition states: "Surely enough is enough: we urge you to take decisive action now to rescue the shop from further decimation," the petition reads, quotes Mr. Neill. "Durham Cathedral is a World Heritage Site and an iconic northern shrine, a popular tourist destination and a centre of Britain's spiritual life -- yet it is now marred by association and ill-equipped to serve those who come to it seeking spiritual refreshment and theological enlightenment", quotes Mr. Neill further. "We therefore call upon you to step in, as Jesus once stepped in at the Temple in Jerusalem, and to drive out these men who are bringing this unique part of Britain's Christian Heritage into disrepute. We urge you, please: take back control of your bookshop, of our bookshop, without further delay", Mr. Neill even more quotes. Based in Houston, Texas, the Debtor -- http://ststephentrust.org.uk/-- is an Orthodox lay charity company, which was established in 2004 to acquire redundant churches in order to put them into use for Orthodox Christian worship. Its objects also include spreading the Gospel message through distribution of the printed word and supporting Orthodox Christian mission in the U.K. It filed for bankruptcy with the U.S. Bankruptcy Court for the Southern District of Texas (Houston), Case No.: 08-33689. It listed estimated assets of $100,001 to $500,000 and estimated debts of $1,000,001 to $10 million in its court filing. STEVE & BARRY'S: Creditors Balk at $5 Mil. Payout to Founders ------------------------------------------------------------- According to Bankruptcy Law 360, creditors of bankrupt discount clothing outlet Steve & Barry's LLC have asked the U.S. Bankruptcy Court for the Southern District of New York to stop a $5 million payment to the company's founders. Based 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. SUNRISE ENERGY: $2.1MM Working Capital Deficit Cues GLO Doubt ------------------------------------------------------------- Houston, Texas-based GLO CPA's LLLP raised substantial doubt about the ability of Sunrise Energy Resources, Inc., to continue as a going concern after auditing the company's financial statements for the year ended Dec. 31, 2007. The auditor pointed to the company's net losses during the year ended Dec. 31, 2007, and working capital deficit as of Dec. 31, 2007. The company posted a net loss of $2,002,817 on total revenues of $2,767,432 for the year ended Dec. 31, 2007, as compared with a net loss of $339,042 on total revenues of $1,874,207 in the prior year. Management Statement Since inception, the company has financed its operations from private sources. Management anticipates continuing losses in the near future while its wholly owned Ukrainian subsidiaries, TOV Energy-Servicing Company Esko Pivnich and Pari, Ltd., establish steady production of hydrocarbons in Ukraine. As at Dec. 31, 2007, the company has cash balances of $11,915 and a working capital deficit of $2,172,224. Management is currently discussing various financing options with private investors that include company shareholders. However, no assurance can be provided as to if, when, and in what amount the new financing may be received by the company. Failure to timely receive a financing may cause the company to significantly curtail or altogether suspend its capital expenditure program. This may, in turn, have material adverse effect on its production activities. Management anticipates it will require around $10,000,000 to implement its capital expenditure program for 2008. Management believes that it will be able to raise the funds through equity and debt financing. To fully develop the area covered by its licenses, the company needs substantial additional funding. Additionally, recoverability of a major portion of its assets is dependent upon continued operations of the company, which in turn is dependent upon its ability to meet its financing requirements on a continuing basis, primarily by its ability to raise additional funds in equity markets, and to succeed in its future operations. Management has taken steps to revise its operating and financial requirements, which it believes are sufficient to provide the company with the ability to continue in existence. The company plans to continue to raise additional capital in the equity markets as significant source of funding the development of the Licenses. Based on its expected production capabilities from the expenditures that will be made as a result of equity and debt financing, the company believes that it could generate adequate cash flow. Additional funding requirements may also be necessary before the company is able to rely solely on the production from the licensed properties for the cash flow of the company. Oil & Gas Production and Revenue During the year ended Dec. 31, 2007, Esko Pivnich had gross production of 21,321 barrels of crude oil, 201,414 thousands of cubic feet of natural gas, and 7,068 barrels of condensate respectively. As at Dec. 31, 2007, the company carried inventory of oil of 104 BBLS and 635 BBLS of condensate while as at Dec. 31, 2006, the company carried 6,252 BBLS of oil in inventory. The company recognizes revenue from the sale of oil and condensate when the purchaser takes delivery of the oil at the field. The revenue from the sale of natural gas is recognized at the metering node installed at the point of connection of the Bogodukhov- Stepove gas pipeline with the gas flow line from the storage and separation facility at the Karaikozovsk property lease in Eastern Ukraine. During the year ended Dec. 31, 2007, the company sold on the gross basis 27,229 BBLS of its internally produced crude oil at an average price of $51.78 per BBL translating into net revenues from sales of internally produced oil of $1,409,783. In addition, the company sold on a gross basis 201,414 MCF of gas at an average price of $3.06 per MCF translating into net revenues from sales of produced gas of $617,239. Also, the company generated $350,621 from the sales of produced condensate at an average price of $54.70. Balance Sheet At Dec. 31, 2007, the company's balance sheet showed $12,793,914 in total assets, $11,684,607 in total liabilities, and $1,109,307 in total stockholders' equity. The company's consolidated balance sheet at Dec. 31, 2007, showed strained liquidity with $2,942,614 in total current assets available to pay $5,114,835 in total current liabilities. These information are included in Sunrise Energy's amendment to its Form 10-KSB with the Securities and Exchange Commission to disclose the result of management's assessment of internal controls. A full-text copy of the company's 2007 annual report is available for free at http://ResearchArchives.com/t/s?3195 About Sunrise Energy Sunrise Energy Resources, Inc., (OTC BB: SEYR) -- http://www.sunriseenergy.us/-- through its subsidiaries, explores, distributes and produces oil and gas in Ukraine. It holds interests primarily in the Karaikozovsk, Rakitnyansk, and Rogan fields in eastern Ukraine, as well as in the Peremyshlyansk, Niklovitsk, Chukvinsk, Pilipivsk, and Sheremetyevsk properties in the western Ukraine. The company was founded in 2000 and is headquartered in New York. TERRAPIN INDUSTRIES: Case Summary & 20 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: Terrapin Industries LLC 121 West 15th Street New York, NY 10011 Bankruptcy Case No.: 08-13409 Chapter 11 Petition Date: September 2, 2008 Court: Southern District of New York (Manhattan) Judge: Burton R. Lifland Debtor's Counsel: Kevin J. Nash, Esq. Finkel Goldstein Rosenbloom Nash, LLP 26 Broadway, Suite 711 New York, NY 10004 Tel: (212) 344-2929 Fax: (212) 422-6836 Email: FinkGold@aol.com Total Assets: $6,294,267 Total Debts: $12,264,616 Debtor's list of its 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Solar Innov. Solarium $280,440 234 East Rosebud Road Myerstown, PA 17067 Consolidated Elevator 5-48 50th Avenue Long Island, City, NY 11101 Gendell Architecture $101,352 1031 Bloomfield Street Hoboken, NJ 07030 Solar Innov. Doors $93,486 Superior Concrete-Foundation $87,745 Classic Iron Works $71,130 Mueser Rutledge Consulting Engineers $62,195 Orange City Iron - Fabricate $42,860 Metropolis Group $25,204 American Express $23,830 Bank of America - New York $19,250 Capital one Loan Services $19,099 Grey Design Studio $18,680 Aniphase $17,000 Gilsanz Murray Steficek $16,952 Bruce Collier $14,000 Bank of America - Illinois $12,181 Impact Concrete & Control $7,955 Island Elevator Service $7,500 Norfast Consulting $4,123 TERWIN ASSET: Collateral for $55MM Debt to be Auctioned Sept. 8 --------------------------------------------------------------- Shinsei Bank, Limited and Merrill Lynch Mortgage Capital Inc., the Secured Parties under an Oct. 27, 2003 Pledge Agreement with Terwin Asset Management LLC, Terwin Employees LLC, is selling at a public sale on Sept. 8, 2008, at 10:00 a.m. (Eastern Time), a collateral pledged to them by the Debtors. The auction will be held at the offices of Vinson & Elkins LLP, 666 Fifth Avenue, 26th Floor in New York, NY 10103. The collateral consists of the Debtor's ownership interests in Specialized Loan Servicing LLC pledged to Secured Parties, which, based on information provided by the Debtors, Secured Parties understand (without making any representation or warranty) represents 82.35% of the total outstanding ownership of SLS. The Debtors pledged the collateral as security for certain indebtedness, including $55,000,000 in principal of secured debt. The Debtors are in default under the Loan Documents. The total amount due under the Loan Documents is $58,232,746.73 for principal and accrued interest as of Aug. 1, 2008, plus additional accrued interest after that date and certain other fees and charges. All prospective bidders are required to present a $5.0 million deposit, in cashier's check, to Secured Parties prior to September 5, 2008 at 5:00 p.m. (Eastern Time). The deposit will be held in escrow pending the closing of the sale. TERWIN EMPLOYEES: Collateral for $55MM Debt for Auction Sept. 8 --------------------------------------------------------------- Shinsei Bank, Limited and Merrill Lynch Mortgage Capital Inc., the Secured Parties under an Oct. 27, 2003 Pledge Agreement with Terwin Asset Management LLC, Terwin Employees LLC, is selling at a public sale on Sept. 8, 2008, at 10:00 a.m. (Eastern Time), a collateral pledged to them by the Debtors. The auction will be held at the offices of Vinson & Elkins LLP, 666 Fifth Avenue, 26th Floor in New York, NY 10103. The collateral consists of the Debtor's ownership interests in Specialized Loan Servicing LLC pledged to Secured Parties, which, based on information provided by the Debtors, Secured Parties understand (without making any representation or warranty) represents 82.35% of the total outstanding ownership of SLS. The Debtors pledged the collateral as security for certain indebtedness, including $55,000,000 in principal of secured debt. The Debtors are in default under the Loan Documents. The total amount due under the Loan Documents is $58,232,746.73 for principal and accrued interest as of Aug. 1, 2008, plus additional accrued interest after that date and certain other fees and charges. All prospective bidders are required to present a $5.0 million deposit, in cashier's check, to Secured Parties prior to September 5, 2008 at 5:00 p.m. (Eastern Time). The deposit will be held in escrow pending the closing of the sale. THORNBURG MORTGAGE: Further Extends Exchange Offer Until Sept. 9 ---------------------------------------------------------------- Thornburg Mortgage, Inc. extended until Sept. 9, 2008, at 12:01 a.m. EDT, the expiration of its exchange offer and consent solicitation for all outstanding shares of its 8.00% Series C Cumulative Redeemable Preferred Stock, Series D Adjusting Rate Cumulative Redeemable Preferred Stock, 7.50% Series E Cumulative Convertible Redeemable Preferred Stock and 10% Series F Cumulative Convertible Redeemable Preferred Stock. The exchange offer for all outstanding shares expired yesterday. The company and the parties to the Override Agreement continue to negotiate clarifications with respect to the amount, timing, calculation methodology, limits of margin calls and agreed upon uses for the Liquidity Fund. The company continues to negotiate a resolution to these ambiguities with the parties to the Override Agreement and currently anticipates that a successful clarification of the Agreement would allow the Company to complete the Exchange Offer by 12:01 a.m. EDT, on Sept. 9, 2008, unless further extended or terminated by the company. On Sept. 2, 2008, holders of Preferred Stock had tendered approximately: -- 89.9% (5,866,768 shares) of the Series C Preferred Stock; -- 88.8% (3,553,548 shares) of the Series D Preferred Stock; -- 94.0% (2,973,076 shares) of the Series E Preferred Stock and -- 94.5% (28,649,913 shares) of the Series F Preferred Stock. Holders of the Preferred Stock who participate in the Exchange Offer will receive $5.00 in cash and 3.5 shares of the company's common stock for each share of preferred stock validly tendered. Holders who have previously tendered their shares of Preferred Stock continue to have the right to revoke such tenders at any time prior to the new expiration date by complying with the revocation procedures set forth in the Offering Circular relating to the Exchange Offer. Following the announcement, Thornburg Mortgage shares increase 3 cents to 45 cents in extended trading, Bloomberg reports. At 4:00 p.m., stock dropped 1 cent to 42 cents, the report says. About Thornburg Mortgage Inc. Based in Santa Fe, New Mexico, Thornburg Mortgage Inc. (NYSE: TMA) -- http://www.thornburgmortgage.com/-- is a single-family residential mortgage lender focused principally on prime and super-prime borrowers seeking jumbo and super-jumbo adjustable- rate mortgages. It originates, acquires, and retains investments in adjustable and variable rate mortgage assets. Its ARM assets comprise of purchased ARM assets and ARM loans, including traditional ARM assets and hybrid ARM assets. * * * As reported in the Troubled Company Reporter on June 27, 2008, Moody's Investors Service affirmed Ca and C senior debt and preferred stock ratings, respectively of Thornburg Mortgage Inc. Thornburg's Ca debt rating remains under review for possible downgrade. Moody's said that Thornburg's efforts to raise capital to avoid default under its repo agreements have resulted in the reconfiguration of its balance sheet with adverse impact on its debt and preferred equity holders. As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's said that the completion of Thornburg Mortgage Inc.'s tender offer for its preferred shares will have an impact on the rating once complete. If Thornburg is successful in the tender offer, S&P would view this as a positive sign. TRICOM SA: Court Denies Summary Judgment Motion ----------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York denied Tricom S.A., and its U.S. affiliates' summary judgment on the proposed estimation of the claims filed by Bancredit Cayman Limited and Bancredito (Panama), S.A. The Debtors asked the Court to (i) estimate the claims at zero, and (ii) determine that no reserve should be set aside for those claims. The Court clarified that the order does not constitute a ruling on the merits regarding the nature, validity or amount of Claim Nos. 8 filed by Bancredito (Panama) S.A., and Claim No. 10 filed by Bancredit Cayman Limited against Tricom, S.A. The Debtors filed their summary judgment motion to resolve the proposed estimation of claims of Bancredit Cayman and Bancredito Panama. The claims, aggregating $178,000,000, allegedly resulted from Tricom's issuance in December 2002 of more than 21,000,000 shares of stock to investors. Bancredito Panama seeks to recover $92,000,339 while Bancredit Cayman asserts $86,525,273. Both banks allege that the transaction was part of a fraudulent scheme to enrich Tricom at their expense while Tricom argues the stock issuance was made to inject "badly needed equity" into the company. Prior to the Court's decision, Bancredito Panama questioned the provision concerning the validity or nature of Claim Nos. 8 and 10. The bank described the provision as "surplusage" that was never discussed during the August 13, 2008 hearing. In response, the Debtors through a letter dated August 27, 2008, said the provision is necessary to clarify the effect of the denial of the proposed summary judgment. "This language is appropriate in order to fully preserve Tricom's right to object to the claims filed by Bancredito Panama and Bancredit Cayman," the Debtors stated in the letter. According to the letter, the Debtors have received comments from counsel for Bancredito Panama in the proposed summary judgment and incorporated those comments in the proposed order. The Debtors said they have not received any objection from Bancredit Cayman to the proposed summary judgment order. The Official Liquidator of Bancredito Panama filed under seal a memorandum of law in opposition to Tricom's summary judgment motion. Richard Smolev, Esq., at Kaye Scholer LLP, in New York, Bancredito Panama's counsel, also filed under seal a declaration in support of the Liquidator's memorandum of law. On behalf of Bancredit Cayman Limited, its counsel Glenn C. Edwards, Glenn Edwards, Esq., at Satterlee Stephens Burke & Burke LLP, in New York; Nigel K. Meeson, Esq.; Amauri A. Castillo, secretary general of the Panamian Superintendency of Banks; Carlos Enrique Munoz, Esq.; Luis Guinard; Richard L. Fogerty; and Peter Haviland filed declarations supporting Bancredit Cayman's opposition to the summary judgment request. Mr. Meeson, in his expert testimony, said that, as a matter of Cayman Islands law, Bancredit would have restitutionary claim against Tricom to recover the $70,000,000 transferred. Kelvin D. Chen, Esq., and Robert J. McMillan, Esq., at Morrison & Foerster LLP, filed declarations in support of Tricom's summary judgment motion. About Tricom S.A. Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. As of June 30, 2008, Tricom had US$316,325,466 in assets and US$771,970,349 in liabilities. (Tricom Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) TRICOM SA: Produce Special Committee Report, Says Court Ruling -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has issued a ruling approving Bancredito (Panama) S.A.'s request for a special committee report. The Court directed Tricom SA, and its U.S. debtor-affiliates to deliver the draft and the final special committee reports and their accompanying exhibits to Bancredito Panama and Bancredit Cayman Limited. The Court authorized the banks to use the draft and the final reports but only for purposes of the estimation proceedings and other proceedings in the Debtors' bankruptcy cases. The reports contain the findings of the Special Committee appointed by Tricom S.A.'s Board of Directors to investigate into a private placement of shares of the company's common stock in December 2002, wherein Bancredito Panama allegedly loaned off $70,000,000 to investors to purchase the stock. During the August 13, 2008 hearing, the Court ruled that Tricom failed to sustain the burden of proof that the privilege ever attached. The Court noted that there is no evidence in record to support that conclusion that the special report was prepared in contemplation of any litigation. The report, he said, was prepared to address an accounting issue. There's no evidence that anybody would have done anything differently if they thought about, for instance, the claims estimation litigation. The Debtors, in a letter dated August 27, 2008, told the Court that after the August 13 hearing, Bancredito Panama circulated a proposed order granting the motion to compel and engaged in discussions with the Debtors regarding the terms of the proposed order. The Debtors said the parties were able to reach an agreement regarding the majority of the provisions in the proposed order, but there were two unresolved issues: (1) The Tricom Proposed Order specifically identifies what documents must be produced, while the Panama Proposed Order simply refers to the production of "Special Committee Report, all drafts and accompanying exhibits." (2) The Tricom Proposed Order includes language limiting the uses to which the Draft Report and the Final Report can be put in accord with the protective order, which provides that all information and documents produced in connection with Tricom's bankruptcy case "shall be used for no purpose other than the Estimation Proceedings . . ." As reported in the Troubled Company Reporter on Aug. 27, 2008, Bancredit Cayman Limited said that Tricom S.A. failed to prove that the attorney-client and work-product privileges had not been waived when it disclosed the special committee report to the counsel for the Ad Hoc Committee of Unsecured Creditors and Sotomayor & Associates LLP. Tricom previously urged the Court to deny the proposed production of the special committee report because it is protected from disclosure by attorney-client and work product privileges. About Tricom S.A. Tricom, S.A., was incorporated in the Dominican Republic on January 25, 1988, as a Sociedad Anonima. Tricom is one of the pre-eminent full service communications services providers in the Dominican Republic. Headquartered in Santo Domingo, Tricom offers local, long distance, and mobile telephone services, cable television and broadband data transmission and Internet services, which are provided to more than 729,000 customers. Tricom's wireless network covers about 90% of the Dominican Republic's population. Tricom's local service network is 100% digital. The Company also owns interests in undersea fiber- optic cable networks that connect and transmit telecommunications signals between Central America, the Caribbean, the United States and Europe. Tricom USA, Inc., a wholly owned subsidiary of Tricom, was incorporated in Delaware in 1992, and at that time was known as Domtel Communications. A name change was effected in 1997 and Domtel Communications formally became Tricom USA, Inc. Tricom USA originates, transports and terminates international long-distance traffic using switching stations and other telecommunications equipment located in New York and Florida. Tricom S.A. and its U.S. affiliates filed for Chapter 11 protection on Feb. 29, 2008 (Bankr. S.D. N.Y. Case No. 08- 10720). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, in New York City, represent the Debtors. When the Debtors' filed for protection from their creditors, they listed total assets of US$327,600,000 and total debts of US$764,600,000. As of June 30, 2008, Tricom had US$316,325,466 in assets and US$771,970,349 in liabilities. (Tricom Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Board Taps Paul Hastings as Litigation Counsel ------------------------------------------------------------- The litigation committee of the board of directors of Tropicana Entertainment Holdings LLC, seeks permission from the the U.S. Bankruptcy Court for the District of Delaware to employ Paul Hastings Janofsky & Walker LLP as its special litigation counsel. TEH Litigation Committee chairman Thomas M. Benninger relates that on June 6, 2008, the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases filed a request to conduct examinations of the Debtors, William J. Yung III, and Columbia Sussex Corp. pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. The TEH board seeks to employ Paul Hastings for the limited purposes of working with the Creditors Committee in the ongoing Rule 2004 proceedings, and conducting an independent investigation and evaluation of any litigation claims TEH may have against any other entity or individual, including the Yung- related entities. The TEH board notes that Paul Hastings has extensive experience in conducting investigations of the type contemplated by the Committee. Paul Hastings' White Collar, Internal Investigations and Corporate Governance Group has successfully represented corporate officers, directors and employees, as well as government contractors, financial institutions and health care providers in a wide range of proceedings and investigations, Mr. Benninger points out. He adds that Paul Hastings' Finance and Restructuring Group provides an array of services to assist financially distressed businesses and their creditors in maximizing values and ultimate recoveries in a broad range of circumstances. Specifically, as special litigation counsel to the TEH Board, Paul Hastings will: (a) investigate potential litigation claims the Board may wish to pursue against any entity or individual; (b) coordinate the Board's investigative efforts with those of the Debtors, the Creditors Committee, and the Ad Hoc Consortium of Holders of Senior Subordinated Debt issued by the Debtors, pursuant to a term sheet agreement to avoid duplication of efforts; (c) analyze potential claims and submit a report to the Board summarizing and recommending potential causes of action; and (d) potentially prosecute any causes of action brought by the Debtors. The Debtors will pay Paul Hastings for its legal services on an hourly basis and will reimburse the firm for actual and necessary out-of-pocket expenses it incurs. The firm's hourly rates may change from time to time in accordance with Paul Hastings' established billing practices and procedures. The current hourly rates of Paul Hastings professionals are: Professional Position Hourly Rate ------------ -------- ----------- James D. Wareham Partner, Litigation $895 Richard A. Chesley Partner, Corporate $825 Gregory S. Otsuka Associate, Corporate $615 Christian M. Auty Associate, Litigation $495 Kaycee M. Sullivan Associate, Litigation $455 Ruth P. Rosen Paralegal, Corporate $305 Richard A. Chesley, Esq., a partner at Paul Hastings, informs the Court that his firm: (i) represents or has represented certain interested parties in matters unrelated to the Debtors' Chapter 11 cases. Paul Hastings will not represent these entitles in the Debtors' bankruptcy cases; (ii) may have worked with certain professionals in matters unrelated to the Debtors' Chapter 11 cases; (iii) may have several of its attorneys having professional, working or social relationships with firms or professionals that may be adverse to the Board. Paul Hastings has strict policies against disclosing confidential information to anyone outside of the firm, including spouses, parents, children, siblings, fiances and fiancees; and (iv) certain Paul Hastings attorneys or employees may hold interests in mutual funds or other investment vehicles that may own interests in the Debtors. Nevertheless, Mr. Chesley assures the Court that Paul Hastings does not represent or hold any interest adverse to the Board with respect to matters to which it will be employed. 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 Court has extended the Debtors' exclusive period to file a plan through and including January 12, 2009, and to solicit votes on the plan through and including March 13, 2009. (Tropicana Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Court Appoints WHS as Professional Fees Auditor -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware appointed Warren H. Smith & Associates P.C., as fee auditor of the Tropicana Entertainment LLC and its debtor-affiliates pursuant to Rule 9017 of the Federal Rules of Bankruptcy Procedure, Rule 706 of the Federal Rules of Evidence, Rule 2016-2(i) of the Local Rules of Bankruptcy Practice and Procedure of the Court. WHS & Associates will act as special consultant to the Court for the review and analysis of fees of professionals retained in the Debtors' bankruptcy cases. The terms of the Court's June 5, 2008, Compensation Order will not be modified, except that the Applicant will also send to WHS & Associates a copy of its fee application, including relevant fee details, in hard copy via first class mail and via e-mail in a searchable electronic format except Adobe Acrobat. If any Applicant cannot reasonably convert its Fee Detail to one of the accepted electronic formats, the Fee Auditor will work with the Applicant to find an appropriate electronic format. Duties of Fee Auditor and Related Procedures To the extent reasonably practicable, WHS & Associates will avoid duplicative review of final fee applications and quarterly interim fee application requests. During the course of its review, the Fee Auditor may review any filed documents in the Debtors' Chapter 11 cases and will be responsible for general familiarity with the docket in these bankruptcy cases. WHS & Associates will be deemed to have filed a request for notice of papers under Rule 2002 of the Federal Rules of Bankruptcy Procedure. If the Fee Auditor has any questions, issues or disputes regarding a quarterly Interim Fee Application Request, it will communicate those concerns in writing to the Applicant within 30 days after the latter of the due date of, or service upon the Fee Auditor of, a quarterly Interim Fee Application Request. An Applicant who has received an Initial Report may respond within 10 days after the date of the Initial Report. That response can be contained in the e-mail itself, or, if it is contained in an attachment to the e-mail, must be in a searchable electronic format, but not Adobe Acrobat. WHS & Associates will file with the Court a final report with respect to each quarterly Interim Fee Application Request within the latter of (i) 30 days after the date of the Initial Report, or (ii) 20 days after the receipt of a response to the Initial Report. The Final Report will also be served on the affected Applicant and the Notice Parties. An Applicant may file with the Court a response to a Final Report, which response will be served upon Notice Parties. Any of the set periods may be extended by the mutual consent of the Fee Auditor and the Applicant. WHS & Associates will be available for deposition and cross- examination by the Debtors, the Official Committee of Unsecured Creditors, the U.S. Trustee, and other interested parties consistent with Rule 7006 of the Federal Rules of Evidence. Fees and Expenses WHS & Associates' fees and expenses will be subject to application and review and will be paid from the Debtors' estates as an administrative expense under Section 503(b)(2) of the Bankruptcy Code. The principal attorney designated to serve as Fee Auditor is Warren H. Smith, with a current hourly rate of $275. The firm's hourly rate for paraprofessional services range from $40 to $155 per hour. Other attorneys and paralegals may from time to time assist in the fee auditing process. 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 Court has extended the Debtors' exclusive period to file a plan through and including January 12, 2009, and to solicit votes on the plan through and including March 13, 2009. (Tropicana Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) TROPICANA ENT: Wants to Broaden Employment Scope of Ernst & Young ----------------------------------------------------------------- Tropicana Entertainment LLC and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to expand the scope of employment of their independent auditor and accounting advisor, Ernst & Young LLP, to include tax advisory services. Pursuant to two Statement of Works the parties agreed on, Ernst & Young will provide these tax-related services: (a) Routine Tax SOW * E&Y will provide assistance to the Debtors' tax department for routine small projects when these are not covered in a separate SOW to the agreement; and * E&Y will provide specific tasks that may include participating in meetings and telephone calls with the Debtors' personnel; participating in meetings and telephone calls with taxing authorities and other third parties; and reviewing transactional documentation. (b) Bankruptcy Tax SOW * E&Y will analyze reorganization or restructuring alternatives the Debtors are evaluating that may result in a change in the equity, capitalization or ownership of the company shares or assets; * E&Y will assist and advise the Debtors in developing an understanding of the tax implications of their bankruptcy restructuring alternatives and post- bankruptcy operations; * E&Y will provide tax advisory services regarding availability, limitations and preservation of tax attributes, and the validity of tax claims in order to determine if the tax amount claimed correctly reflects the true tax liability pursuant to applicable tax law; * E&Y will analyze legal and other professional fees incurred during the bankruptcy period for purposes of determining future deductibility of those costs for U.S. federal, state and local tax purposes; * E&Y will prepare documentation of tax analysis, opinions, recommendations, conclusions and correspondence for any proposed restructuring alternative, bankruptcy tax issue or other tax matters; and * E&Y will provide advisory services regarding tax analysis and research related to acquisitions and divestitures, and to tax-efficient domestic restructurings. Ernst & Young will be paid according to its hourly rates and will be reimbursed for reasonable and necessary expenses. The firm's hourly rates are: National Executive Director/Principal/Partner $850 Executive Director/Principal/Partner $750 Manager/Senior Manager $480 - $600 Staff/Senior $150 - $290 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 Court has extended the Debtors' exclusive period to file a plan through and including January 12, 2009, and to solicit votes on the plan through and including March 13, 2009. (Tropicana Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) US AIRWAYS: PBGC Asks Court to Thrash 2 Claims by Retired Pilots ---------------------------------------------------------------- Bankruptcy Law360 reports that the Pension Benefit Guaranty Corp. has asked the U.S. District Court for the District of Columbia on Friday to dismiss two of the 11 claims by US Airways Inc. retired pilots. The pilots filed a lawsuit against PBGC accusing it of depriving 1,000 retired US Airways pilots of payments due under the benefits plan the company took over when the airline filed for bankruptcy, Bankruptcy Law360 relates. About US Airways Based in Tempe, Arizona, US Airways Group Inc.'s (NYSE: LCC) - http://www.usairways.com/-- primary business activity is the ownership of the common stock of US Airways, Inc., Allegheny Airlines, Inc., Piedmont Airlines, Inc., PSA Airlines, Inc., MidAtlantic Airways, Inc., US Airways Leasing and Sales, Inc., Material Services company, Inc., and Airways Assurance Limited, LLC. Under a Chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital. US Airways and its subsidiaries filed another chapter 11 petition on Sept. 12, 2004 (Bankr. E.D. Va. Case No. 04-13820). Brian P. Leitch, Esq., Daniel M. Lewis, Esq., and Michael J. Canning, Esq., at Arnold & Porter LLP, and Lawrence E. Rifken, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, represent the Debtors in their restructuring efforts. In the company's second bankruptcy filing, it lists $8,805,972,000 in total assets and $8,702,437,000 in total debts. The Debtors' Chapter 11 plan for its second bankruptcy filing became effective on Sept. 27, 2005. The Debtors completed their merger with America West on the same date. * * * As reported in the Troubled company Reporter on July 24, 2008, Moody's Investors Service downgraded the Corporate Family and Probability of Default Ratings of US Airways Group Inc. to Caa1 from B3 and lowered the ratings of its outstanding corporate debt instruments and certain Enhanced Equipment Trust Certificates (EETC). Moody's lowered the Speculative Grade Liquidity Assessment to SGL-4 from SGL-3. The rating outlook is negative. US FARMS: June 30 Balance Sheet Upside-Down by $2,300,627 --------------------------------------------------------- US Farms Inc.'s consolidated balance sheet at June 30, 2008, showed $2,494,244 in total assets and $4,794,871 in total liabilities, resulting in a $2,300,627 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,549,226 in total current assets available to pay $4,794,871 in total current liabilities. The company reported a net loss of $104,372 on net sales of $218,126 for the second quarter ended June 30, 2008, compared with a net loss of $2,146,394 on net sales of $235,094 in the corresponding period a year ago. Revenues for the three months ended June 30, 2008, excluding the discontinued operations of California Produce Exchange Inc., when compared to 2007, decreased by $16,968, or 7%, due primarily to a decrease in Aloe Vera sales, partially offset by an increase in Palms and cycads sales. Total operating expenses were $565,040 for the three months ended June 30, 2008, versus $2,162,652 for the same period in 2007, which is a decrease of $1,596,612 or 74%. The decrease in total operating expenses primarily reflects reduced stock compensation expense paid to its consultants and employees. Other expenses decreased $928,053, due primarily to the reversal of the derivative expense of $936,031 associated with the issuance of warrants due to the decrease in the company's stock price. Discontinued Operations On June 10, 2008, the company disclosed that it was divesting itself of non-performing segments of its produce brokerage segment which includes tomatoes, asparagus and garlic operations. The loss from discontinued operations for the three months ended June 30, 2008, was $486,289 versus a restated net loss of $55,434 for the same period in 2007. 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?318b Going Concern Doubt The company has working capital and accumulated deficits of $3,245,645 and $25,197,785, respectively, at June 30, 2008. For the six months ended June 30, 2008, the company had a net loss totaling $1,800,864. In addition, the company is in default on certain of its promissory notes, is in litigation with a Convertible Debenture holder and a secured note holder, and is in default and in the litigation process with multiple vendors with respect to the Perishable Agricultural Commodities Act (PACA). In addition, on June 10, 2008, the company announced that it was divesting itself of non-performing segments of its CPE Produce Brokerage Segment which includes tomatoes, asparagus and garlic operations. About US Farms Inc. US Farms Inc. (OTC BB: USFI.OB) -- http://www.usfarmsinc.com/-- is a diversified commercial Farming, Nursery and Brokerage company based in Southern California. The company�s principal operations are located in Southern California in the Imperial Valley, North County San Diego and Los Angeles. US Farms Inc. grows, markets and distributes horticultural products through a number of wholly owned subsidiaries which include: American Nursery Exchange Inc. (ANE); California Management Solutions Inc. (CMS); California Produce Exchange Inc. (CPE); American Aloe Vera Growers Inc. (AAVG); Imperial Ethanol Inc. (IE); Sammy's Produce Inc. (SPI); US Ag Transportation Inc (USAT); US Produce Inc. (USPI); Texas Garlic & Spice Inc. (TGS); US Trading Group, Inc. (USTG); and World Garlic & Spice Inc. (WGS). VALLEJO CITY: Loses More Police Officers as Crime Grows Rampant --------------------------------------------------------------- Three months after it became the largest California city to declare bankruptcy, the city of Vallejo is facing an exodus of police officers as residents grow anxious about a surge in robberies and other crimes, ABI World says, citing a report from the Sacramento Bee. Vallejo filed for Chapter 9 protection in May blaming its fiscal woes on shrinking tax revenue and escalating costs for police and firefighters. According to the report, a growing number of officers are helping to reduce the city's payroll expenses -- by leaving the police department. About 25 of its 150 officers have retired or left for other law enforcement agencies over the past year, and at least 18 more are in the process of applying for jobs elsewhere in Northern California, where cops are in high demand, according to Lt. Richard Nichelman, a department spokesman. About the City of Vallejo Vallejo -- http://www.ci.vallejo.ca.us/GovSite-- is a city in Solano County. As of the 2000 census, the city had a total population of 116,760. It is located in the San Francisco Bay Area on the northern shore of San Pablo Bay. The City is a charter city organized and exercising governmental functions under its charter and the laws and constitution of the state. Its governing body is its City Council. The City filed for protection under Chapter 9 of the U.S. Bankruptcy Code on May 23, 2008 (Bankr. E.D. Calif. Case No. 08-26813). Marc A. Levinson, Esq., and Norman C. Hile, Esq., at Orrick, Herrington & Sutcliffe LLP in Sacramento, California, represent the City. According to Vallejo's comprehensive annual report for the year ended June 30, 2007, the city has $983 million in assets and $358 million in debts. (Vallejo Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). VICORP RESTAURANTS: Roster's, Bakers Square Outlets Closed ---------------------------------------------------------- Britt Johnsen of Two St. Cloud (Minn.) reports that VICORP Restaurants Inc. outlets Roster's Sports Bar and Grill and Bakers Square in St. Cloud, Minnesota, closed almost four months after its parent company filed for Chapter 11 bankruptcy. As of March, Roster's had 65 employees, according to the report. Peoria Jounal Star reports that VICORP's Bakers Square Restaurant at The Shoppes of Grand Prairie and another Bakers Square outlet in Normal have closed due to financial problems. WREX.com relates that VICORP Restaurants had disclosed plans of closing dozens of its restaurants. VICORP Restaurants operates about 343 Bakers Square and Village Inn restaurants in 25 states. Based in Denver, Colorado, VICORP Restaurants Inc. -- http://www.vicorpinc.com/-- operates two restaurant concepts under proven and well-recognized brands, Village Inn and Bakers Square. Founded in 1958, VICORP has 343 restaurants in 25 states, consisting of 250 company-operated restaurants and 93 franchised restaurants. Known for its strong breakfast heritage, Village Inn has been serving its signature breakfast items like one-of-a-kind skillet dishes and made-from-scratch pancakes for 50 years. In addition, Village Inn offers traditional American fare for lunch and dinner. The company and its affiliates filed for Chapter 11 protection on April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Kimberly Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A. Robinson, Esq., at Reed Smith LLP, and Donna L. Culver, Esq., at Morris Nichols Arsht & Tunnell, represent the Debtors in their restructuring efforts. The Debtors selected The Garden City Group, Inc. as their claims agent. Abhilash M. Raval, Esq., Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP, represent the Committee in these case. When the Debtors filed for protection from their creditors, they listed estimated assets of $100 million to $500 million and debts of $100 million to $500 million. VISION REAL: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Vision Real Estate Management, Inc. 1681 Fernleaf Circle Atlanta, GA 30318 Bankruptcy Case No.: 08-77208 Type of Business: Operative Builders Chapter 11 Petition Date: Sept. 1, 2008 Court: Northern District of Georgia (Atlanta) Debtor's Counsel: Scott B. Riddle, Esq. Resurgens Plaza, Suite 2250 945 East Paces Ferry Road Atlanta, GA 30326 Tel: (404) 815-0164 Fax: (404) 815-0165 Email: sbriddle@mindspring.com Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $1,000,000 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors. WESTAFF INC: Banks Waive Covenant Default Until September 30 ------------------------------------------------------------ Westaff Inc. entered into a Forbearance Agreement with U.S. Bank National Association and Wells Fargo Bank, National Association, effective Aug. 27, 2008. The agreement relates to bank covenant defaults which occurred on April 19, 2008, under the Financing Agreement dated Feb. 14, 2008. Under the terms of this Forbearance Agreement, the banks have agreed to forebear from exercising any remedies that they may have against the company as a result of such events of default through Sept. 30, 2008. The Troubled Company Reporter reported on Aug. 12, 2008, the terms of the initial Forbearance Agreement: (i) the Lenders and the Agent agreed to forbear from exercising any of their default rights and remedies in response to the occurrence and continuance of the Event of Default commencing on the date of the Forbearance Agreement and ending on August 26, 2008, (ii) the Borrower agreed to a reduction in the aggregate amount of the commitments under the Financing Agreement from $50 million to $33 million effective as of June 23, 2008, (iii) the Agent agreed to maintain a reserve against the revolving credit availability to cover Borrower's payroll and payroll tax obligations, (iv) the Borrower agreed to pay to the Agent for the ratable benefit of the Lenders a one-time forbearance fee in the amount of $50,000. The interest rate applicable to loans made pursuant to the Financing Agreement will continue at the default rate through the Forbearance Period. "We agreed to this short-term forbearance while we continue to work with our banks to develop a longer-term arrangement," Westaff SVP and CFO Christa Leonard, commented. "This agreement provides us additional time while we continue to focus our improving our financial performance." Westaff Inc. (NASDAQ:WSTF) -- http://www.westaff.com-- provides staffing services and employment opportunities for businesses in worldwide markets. Westaff annually employs in excess of 125,000 people and services more than 20,000 client accounts from 204 offices located throughout the United States, Australia and New Zealand. WESTERN NONWOVENS: Sells Manufacturing Plant to HarVest ------------------------------------------------------- Liz Engel of Knoxville News Sentinel (Tenn) reports that the Climashield and the Clinton manufacturing facility of Western Nonwovens Inc. was purchased by private company HarVest, CI. The sale is good news for about 35 workers in Clinton. Climashield President CEO Ken Hardin and Chicago-based private investor Jon Vesely purchased the facility to build and expand the Climashield product, a high-tech insulation used in outdoor recreation apparel and gear. Western Nonwovens' other larger division, which made nonwoven products for auto headliners, upholstery and mattresses, was sold to Milliken & Co. About Western Nonwovens Headquartered in Carson, California, Western Nonwovens, Inc. -- http://www.westernnonwovens.com-- manufactures nonwoven materials and provides services to industries, including mattress, automotive, retail apparel, filtration and furniture manufacturers. Western Nonwovens Inc. and seven of its affiliates filed voluntary petitions under Chapter 11 on July 14, 2008 (Bankr. D. Del., Case No. 08-11435). Representing the Debtors is Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. Hahn & Hessen LLP and Montgomery McCraken Walker & Rhoads LLP represent the Committee in this cases. The Debtor selected Epiq Bankruptcy Services LLC as its claims agent. When the Debtor filed for protection against its creditors, it listed assets of $28.4 million and debts of $106.9 million. WHATELY CDO: Fitch Lowers 'BB+' Rating on $27 Mil. Notes to 'CCC' ----------------------------------------------------------------- Fitch Ratings downgraded and removed from Rating Watch Negative seven classes of notes issued by Whately CDO I, Ltd (Whately). The rating actions are effective immediately: -- $160,500,625 class A-1A downgraded to 'A-' from 'AA-'; -- $6,000,000 class A-1BF downgraded to 'B-' from 'BBB-'; -- $63,000,000 class A-1BV downgraded to 'B-' from 'BBB-'; -- $27,000,000 class A-2 downgraded to 'CCC' from 'BB+'; -- $12,588,892 class A-3 downgraded to 'C' from 'B+'; -- $4,248,672 class BF downgraded to 'C' from 'CC'; -- $10,608,624 class BV downgraded to 'C' from 'CC'. Fitch's rating actions reflect the collateral deterioration within the portfolio, specifically from subprime residential mortgage backed securities (RMBS). Whately is a cashflow collateralized debt obligation (CDO) which closed June 9, 2004, and is managed by Babson Capital Management LLC. The reinvestment period ended in June 2007. The portfolio is composed of primarily of subprime RMBS (38.4%), Alternative-A (Alt-A) RMBS (20.4%), and Prime RMBS (20.7%). Subprime RMBS of the pre-2005, 2005, 2006, and 2007 vintages account for approximately 13.1%, 4.8%, 17.5%, and 3.0% of the portfolio, respectively. Alt-A RMBS of the pre-2005, 2005, 2006 and 2007 vintages account for approximately 11.9%, 2.9%, 2.6%, and 2.9% of the portfolio, respectively. Since the last review conducted in November 2007, approximately 34.6% of the portfolio has been downgraded. The portion of the portfolio rated below investment grade is now 34.1% while 9.2% of the portfolio is currently on Rating Watch Negative. The collateral deterioration has caused each of the class A and B OC tests to fail their respective triggers. The failures of these tests are diverting interest proceeds that would otherwise be payable to the class A-3, BF and BV notes, to pay down the class A-1A notes. Consistent with the current ratings, Fitch expects the class A-3, BF and BV notes to receive only capitalized interest payments in the future with no ultimate principal recovery. The expected ratings on the class A-1 and A-2 notes address the timely receipt of scheduled interest payments and the ultimate receipt of principal per the deal's governing documents. The ratings on the class A-3 and B notes address the ultimate receipt of interest payments and the ultimate receipt of principal per the deal's governing documents. Fitch is reviewing its SF CDO approach and will comment separately on any changes and potential rating impact at a later date. Fitch will continue to monitor and review this transaction for future rating adjustments. WHITEHALL JEWELLERS: May Use Up to $80MM DIP Fund Until Sept. 23 ---------------------------------------------------------------- The Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware issued a fourt agreed order extending and modifying debtor-in-possession interim financing order in the bankruptcy case of Whitehall Jewelers Holdings, Inc. and Whitehall Jewelers Inc. The interim order on the DIP fund is extended through Sept. 23, 2008. A hearing is set for Sept. 12, 2008, at 10:00 a.m., to consider final approval of the DIP motion. The time for filing an objection has expired as to all parties in interest. As reported in the Troubled Company Reporter on Aug. 14, 2008, the Court issued a third agreed order extending and modifying debtor-in-possession interim financing order in the Debtors' bankruptcy case. The interim order on the DIP fund is extended through Aug. 28, 2008. The limitation on extensions of credit under the DIP facility contained in the interim order is increased to $80,000,000. The Court also directed the Debtors to set aside $352,190 from the proceeds of a sale of any of the Debtors' assets located in the State of Texas or the City of Memphis for the secured claims of the Texas and Memphis Tax Authorities. First and Second Agreed Orders On June 24, 2008, the Court signed off the DIP Financing Order. On July 18, 2008, the Court entered the agreed order scheduling a final hearing and extending DIP financing order through July 24. A second extension order allowed the Debtors to access the DIP fund through Aug. 8, 2008. The Debtors, prepetition secured parties, term lenders, DIP agent, term loan agent, and counsel to the Official Committee of Unsecured Creditors have represented to the Court that they have agreed to (i) further extend the interim order, (ii) enter certain relief on a final basis, (iii) modify the interim order, and (iv) reschedule the final hearing in accordance with the terms of the third agreed order. About Whitehall Jewelers Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings, Inc. -- http://www.whitehalljewellers.com/-- owns and operates 375 stores jewelry stores in 39 states. Whitehall is owned by hedge funds Prentice Capital Management and Millennium Partners LP, both of New York, and Holtzman Opportunity Fund LP of Wilkes- Barre, Pa. The company operates stores in regional and regional shopping malls under the names Whitehall and Lundstrom. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers. The company and its affiliate, Whitehall Jewelers Inc., filed for Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, and Scott K. Rutsky, Esq., at Proskauer Rose LLP, represent the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Moses & Singer LLP and Bayard, P.A., represent the Committee. When the Debtors' filed for protection against their creditors, they listed total assets of total assets of $207,100,000 and total debts of $185,400,000. WICKES FURNITURE: Wants Until November 30 to File Chapter 11 Plan ----------------------------------------------------------------- Wickes Furniture Company Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to extend their exclusive periods to: -- file a Chapter 11 plan until Nov. 30, 2008, and -- solicit acceptances of that plan until Jan. 29, 2009. A hearing is set for Oct. 14, 2008, at 2:30 p.m., to consider the motion. Objections, if any, are due Oct. 7, 2008. The Debtors relate that they focused most of their attention on disposing of their inventory and other assets by going-out-of- business sale as well as the assumption and assignment, termination and rejection of about 48 leases -- in order to maximize the value of these assets. The Debtors say they no longer have any ongoing retail operations. Through a real estate broker, the Debtors are now selling a property in Wheeling, Illinois. As of April 30, 2008, the Debtors closed 42 of their 54 stores, clearance and distribution centers. The Debtors have now rejected about 37 of their leases of non-residential real property, assumed and assigned two leases, and terminated one lease. The Debtors' exclusive period to file a plan expired on Sept. 1, 2008. Based in Wheeling, Illinois, Wickes Furniture Company, Inc. -- http://www.wickesfurniture.com/-- is a furniture retailers in the U.S. with 43 retail stores serving greater Chicago, Los Angeles, Las Vegas, and Portland. Founded in 1971, Wickes offers attractive room packages featuring complete living rooms, dining rooms, bedrooms as well as bedding, home entertainment, accessories and accent furniture. Wickes employs over 1,700 employees and offers products from leading furniture and bedding manufacturers. The company and two of its debtor-affiliates filed for Chapter 11 protection on Feb. 3, 2008 (Bankr. D. Del. Lead Case No. 08- 10213). Donald J. Detweiler, Esq., at Greenberg Traurig LLP, represents the Debtors in their restructuring efforts. The Debtors selected Epiq Bankruptcy Solutions LLC as claims, noticing and balloting agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Margaret M. Manning, Esq., at Whiteford Taylor & Preston in Wilmington, Delaware, represents the Committee in these cases. The Debtors' balance sheet showed total assets of $12,050,311 and total debts of $130,357,703 for the month ended June 28, 2008. WHITEHALL JEWELERS: Court Okays Sale of Stores to Michael Hill -------------------------------------------------------------- According to Bankruptcy Law360, the Hon. Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware granted permission to Whitehall Jewelers Inc. to sell its stores to New Zealand-based jeweler Michael Hill International Ltd. As reported in the Troubled Company Reporter, Whitehall Jewelers reached a conditional deal with Michael Hill to sell 17 stores in the Midwest for $5 million. The 17 stores are mostly around Chicago, Illinois, with two stores in St. Louis, Missouri. About Whitehall Jewelers Headquartered in Chicago, Illinois, Whitehall Jewelers Holdings, Inc. -- http://www.whitehalljewellers.com/-- owns and operates 375 stores jewelry stores in 39 states. The company operates stores in regional and regional shopping malls under the names Whitehall and Lundstrom. The Debtors' retail stores operate under the names Whitehall (271 locations), Lundstrom (24 locations), Friedman's (56 locations, and Crescent (22 locations). As of June 23, 2008, the Debtors have about 2,852 workers. The company and its affiliates, Whitehall Jewelers Inc., filed for Chapter 11 protection on June 23, 2008 (Bankr. D. Del. Lead Case No. 08-11261). James E. O'Neill, Esq., Kathleen P. Makowski, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. Epiq Bankruptcy Solutions LLC as their claims, noticing and balloting agent. When the Debtors' filed for protection against their creditors, they listed total assets of total assets of $207,100,000 and total debts of $185,400,000. WOODSIDE GROUP: To File for Bankruptcy by Sept. 16 -------------------------------------------------- Woodside Homes has announced it will file for Chapter 11 bankruptcy reorganization by Sept. 16, Jackonsville Business Journal reports, citing Big Builder Magazine. Jackonsville Business Journal relates that representatives at the company could not be reached for immediate comment. As reported by the Troubled Company Reporter on August 29, 2008, several noteholders of Woodside Homes LLC and its affiliates brought the homebuilder group to involuntary Chapter 11 proceedings before the U.S. Bankruptcy Court for the Central District of California. "First and foremost, Woodside continues to operate in the normal course of business -- paying employees, vendors and subcontractors, and building and selling homes," assured a representative of Woodside Homes. The spokesperson added that the group is still in negotiations with the noteholders and banks, TheStreet.com relates. Five noteholders, with John Hancock Life Insurance Company posting the highest claim amount, asserted a total of $155.9 million in claims against Woodside Homes. According to Jackonsville Business Journal, the petitioners were led by Metropolitan Life Insurance Co. and John Hancock, and were joined a day later by JP Morgan Chase, which represents a group of lenders to the company. Woodside Group LLC and its debtor-affiliates -- http://www.woodside-homes.com/-- are homebuilders. The Debtor group, together with several other homebuilders, is continuing to develop the Inspirada master-planned community in Henderson, Nevada. Jackonsville Business Journal said Woodside is Northeast Florida's 22nd largest builder in 2008 based on homes built. Woodside was ranked seventh in revenue among private builders with $1 billion in sales during 2007 and eighth in closings with 2,703, Jackonsville Business Journal said, citing Big Builder Magazine. Woodside has built homes in nine different communities in Northeast Florida, including Emilys Walk in Jacksonville and Palencia in St. Augustine. The company and its affiliates were forced into involuntary Chapter 11 protection by certain of their noteholders on Aug. 20, 2008 (Bankr. C.D. Calif. Lead Case No. 08-20682). Susy Li, Esq., at Bingham McCutchen LLP, represents the Debtors in their restructuring efforts. XIOM CORP: June 30 Balance Sheet Upside-Down by $427,982 -------------------------------------------------------- XIOM Corp.'s consolidated balance sheet at June 30, 2008, showed $2,529,769 in total assets, $2,287,352 in total liabilities, and $670,399 in common stock, subject to recission rights, resulting in a $427,982 stockholders' deficit. For the third quarter ended June 30, 2008, the company had sales of $903,327 and cost of sales of $458,027. This is in comparison to total sales of $256,211 and cost of sales of $174,245 for the corresponding three month period last year. The increase in sales and cost of sales for the third quarter of fiscal 2008 results primarily from an increase in sales of the XIOM 5000 thermal spray system and related powders compared to the third quarter of fiscal 2007, which sold only the XIOM 1000 thermal spray system and related powders. Net loss decreased to $422,311 for the three months ended June 30, 2008, compared to a net loss of $472,710 during the three months ended June 30, 2007. 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?318c Going Concern Doubt As of June 30, 2008, the company has a total stockholders' deficit of approximately $428,000 and incurred a net loss of approximately $1,944,000 for the nine months ended June 30, 2008. These factors raise substantial doubt about the company's ability to continue as a going concern. About Xiom Corp. Headquartered in West Babylon, N.Y., Xiom Corp. (OTC BB: XMCP) -- http://xiom-corp.com/-- manufactures industrial based thermal spray coating systems in the United States. It offers XIOM 1000 Thermal Spray system, which is used to apply plastic powder coatings on steel, aluminum, and non-ferrous substrates, as well as on wood, plastic, masonry, and fiberglass. The company also offers plastic powders designed specifically for thermal spraying. XIOM Corp. sells its spray systems directly to commercial customers and coating contractors. The company has introduced a new high production rate spray gun, the XIOM 5000, which sprays up to five times as fast as the current Xiom 1000 gun and has many benefits over the present technology. * S&P Puts Ratings on 169 ABS Classes on Watch Negative ------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 169 classes from 74 U.S. cash flow and hybrid collateralized debt obligation of asset-backed securities (CDO of ABS) and CDO of CDO transactions on CreditWatch with negative implications. The affected classes represent an aggregate original issuance amount of approximately $19.75 billion. The CreditWatch placements reflect continued deterioration in the credit quality of the residential mortgage-backed securities (RMBS) backing these CDO transactions, as well as a decline in the credit quality of the CDO transactions that are held or referenced by the transactions affected by today's actions. Of the 74 CDO transactions: -- 30 are mezzanine structured finance CDOs, generally defined as CDOs of ABS collateralized at origination primarily by 'A' and 'BBB' rated tranches of RMBS and other structured finance securities; -- 36 are high-grade CDOs of ABS, generally defined as CDOs of ABS typically collateralized at origination primarily by 'AAA' through 'A' rated tranches of RMBS and other structured finance securities; and -- Eight are CDOs of CDOs collateralized predominantly by tranches from other CDO transactions. S&P said "We have previously lowered our ratings on 61 of the affected classes with ratings placed on CreditWatch negative today one or more times. Standard & Poor's expects to resolve the CreditWatch placements on the affected transactions within the next few weeks." Ratings placed on creditwatch negative Rating Transaction Class To From Acacia CDO 8 Ltd. D A-/Watch Neg A- Acacia CDO 8 Ltd. E BBB/Watch Neg BBB Acacia CDO 9 Ltd. A AAA/Watch Neg AAA Acacia CDO 9 Ltd. B AA-/Watch Neg AA- Adirondack 2005-1 Ltd. B AA/Watch Neg AA Adirondack 2005-1 Ltd. C A/Watch Neg A Adirondack 2005-1 Ltd. D BBB/Watch Neg BBB Adirondack 2005-1 Ltd. E BB+/Watch Neg BB+ Adirondack 2005-2 Ltd. C A/Watch Neg A Adirondack 2005-2 Ltd. D BBB/Watch Neg BBB Adirondack 2005-2 Ltd. E BB+/Watch Neg BB+ Altius I Funding Ltd. C A/Watch Neg A Altius I Funding Ltd. D BBB/Watch Neg BBB Altius I Funding Ltd. E BB+/Watch Neg BB+ Ambassador Structured Finance A-1 AAA/Watch Neg AAA CDO Ltd. Belle Haven ABS CDO 2005-1 Ltd. A-1 AAA/Watch Neg AAA Belle Haven ABS CDO Ltd. A1J A+/Watch Neg A+ Belle Haven ABS CDO Ltd. A1SB-1 AAA/Watch Neg AAA Belle Haven ABS CDO Ltd. A1SB-2 AAA/Watch Neg AAA Belle Haven ABS CDO Ltd. A1ST AAA/Watch Neg AAA Belle Haven ABS CDO Ltd. A2 B/Watch Neg B Blue Bell Funding Ltd. ABCP AAA/A-1+/WtchNeg AAA Bluegrass ABS CDO II Ltd. A-1MT-a AAA/Watch Neg AAA Bluegrass ABS CDO II Ltd. A-1MT-b AAA/Watch Neg AAA Broderick CDO 2 Ltd. A-1AD AA/Watch Neg AA Broderick CDO 2 Ltd. A-1AT AA/Watch Neg AA Buckingham CDO Ltd. ABCP AAA/A-1+/WtchNeg AAA Cascade Funding CDO I Ltd. A-2 AAA/Watch Neg AAA Cheyne High Grade ABS CDO I Ltd. A-2 AA+/Watch Neg AA+ Cheyne High Grade ABS CDO I Ltd. B A+/Watch Neg A+ Cheyne High Grade ABS CDO I Ltd. C B/Watch Neg B CMO Holdings III Ltd. A-1 AAA/Watch Neg AAA Coolidge Funding Ltd. D BBB/Watch Neg BBB Coolidge Funding Ltd. E BB-/Watch Neg BB- Crystal River CDO 2005-1 Ltd. B AAA/Watch Neg AAA Crystal River CDO 2005-1 Ltd. C AA/Watch Neg AA Crystal River CDO 2005-1 Ltd. D-1 BBB+/Watch Neg BBB+ Crystal River CDO 2005-1 Ltd. D-2 BBB+/Watch Neg BBB+ Davis Square Funding III Ltd. A-1LT-a AAA/Watch Neg AAA Davis Square Funding III Ltd. A-1LT-b-1 AAA/Watch Neg AAA Davis Square Funding III Ltd. A-2 AA-/Watch Neg AA- Davis Square Funding III Ltd. B BB/Watch Neg BB Davis Square Funding IV Ltd. A-1LT-a AAA/Watch Neg AAA Davis Square Funding IV Ltd. A-1LT-b-1 AAA/Watch Neg AAA Davis Square Funding IV Ltd. A-2 AA+/Watch Neg AA+ Davis Square Funding IV Ltd. B BBB+/Watch Neg BBB+ Davis Square Funding IV Ltd. E AAA/Watch Neg AAA Davis Square Funding V Ltd. B A+/Watch Neg A+ Duke Funding VIII Ltd. A-1J AAA/Watch Neg AAA Duke Funding VIII Ltd. A-2 AA/Watch Neg AA Duke Funding VIII Ltd. A-3F BBB-/Watch Neg BBB- Duke Funding VIII Ltd. A-3V BBB-/Watch Neg BBB- Duke Funding VIII Ltd. Comb Sec 1 BBB-/Watch Neg BBB- Duke Funding VIII Ltd. Comb Sec 2 BBB-/Watch Neg BBB- E*Trade ABS CDO III Ltd. B AA-/Watch Neg AA- Fort Dearborn CDO I Ltd. A-1LA Inv AAA/Watch Neg AAA Fort Sheridan ABS CDO Ltd. B AA/Watch Neg AA G Street Finance Ltd. D BBB/Watch Neg BBB G Street Finance Ltd. E BB+/Watch Neg BB+ Gemstone CDO II Ltd. C A/Watch Neg A Gemstone CDO II Ltd. D A-/Watch Neg A- Gemstone CDO Ltd. D-1 BBB/Watch Neg BBB Gemstone CDO Ltd. D-2 BBB/Watch Neg BBB Gemstone CDO Ltd. E BB/Watch Neg BB Glacier Funding CDO I Ltd. C BBB/Watch Neg BBB Glacier Funding CDO I Ltd. Pref Shrs BB-/Watch Neg BB- Glacier Funding CDO III Ltd. A-2 AA-/Watch Neg AA- G-Star 2004-4 Ltd. A-2-A AA/Watch Neg AA G-Star 2004-4 Ltd. A-2-B AA/Watch Neg AA G-Star 2004-4 Ltd. B A-/Watch Neg A- G-Star 2004-4 Ltd. C-1-A BBB/Watch Neg BBB G-Star 2004-4 Ltd. C-1-B BBB/Watch Neg BBB G-Star 2004-4 Ltd. Pref Share BB/Watch Neg BB Hereford Street ABS CDO I Ltd. A-1 AAA/Watch Neg AAA High Grade Structured Credit CDO C A/Watch Neg A 2005-1 Ltd. Hillcrest CDO I Ltd. A-1a AAA/Watch Neg AAA Hillcrest CDO I Ltd. A-1b AAA/Watch Neg AAA Huntington CDO Ltd. A-2 AAA/Watch Neg AAA Huntington CDO Ltd. B A/Watch Neg A Huntington CDO Ltd. C-1 BBB-/Watch Neg BBB- Huntington CDO Ltd. C-2 BBB-/Watch Neg BBB- Ischus CDO I Ltd. C-1 BBB/Watch Neg BBB Ischus CDO I Ltd. C-2 BBB/Watch Neg BBB Ischus CDO I Ltd. Combo Secs BBB/Watch Neg BBB Jupiter High Grade CDO Ltd. C BBB/Watch Neg BBB Jupiter High-Grade CDO II Ltd. C-1C BBB/Watch Neg BBB Jupiter High-Grade CDO III Ltd. B AA/Watch Neg AA Jupiter High-Grade CDO III Ltd. C BBB/Watch Neg BBB Kent Funding Ltd. A-1 AA+/Watch Neg AA+ Kent Funding Ltd. A-2 BBB/Watch Neg BBB Kent Funding Ltd. ABCP AA+/A-1+/Watch AA+ Neg Kent Funding Ltd. B B-/Watch Neg B- Kleros Preferred Funding II Ltd. A1 AAA/Watch Neg AAA Kleros Preferred Funding Ltd. C A-/Watch Neg A- Kleros Preferred Funding Ltd. D BBB/Watch Neg BBB Klio II Funding Ltd. B A/Watch Neg A Klio II Funding Ltd. C BBB+/Watch Neg BBB+ Klio II Funding Ltd. Pref Shrs BB+/Watch Neg BB+ Laguna ABS CDO Ltd. A1J AAA/Watch Neg AAA Laguna ABS CDO Ltd. A2 AA/Watch Neg AA Laguna ABS CDO Ltd. A3 BBB-/Watch Neg BBB- Laguna ABS CDO Ltd. Class 1 Co BBB-/Watch Neg BBB- Laguna ABS CDO Ltd. Pref Share CCC/Watch Neg CCC Lakeside CDO II Ltd. C BBB/Watch Neg BBB Lexington Capital Funding Ltd. A-1ANV AAA/Watch Neg AAA Lexington Capital Funding Ltd. A-1AV AAA/Watch Neg AAA Lexington Capital Funding Ltd. A-1B AAA/Watch Neg AAA Marathon Structured Finance CDO A-2 AAA/Watch Neg AAA I Ltd. Marathon Structured Finance CDO B AA/Watch Neg AA I Ltd. Marathon Structured Finance CDO C A/Watch Neg A I Ltd. McKinley Funding Ltd. A-1 AA+/Watch Neg AA+ McKinley Funding Ltd. ABCP AAA/A-1+/WatchNeg AAA/ A-1+ Millerton ABS CDO Ltd. A-2 AAA/Watch Neg AAA Monroe Harbor CDO 2005-1 Ltd. A-1A AAA/Watch Neg AAA Monroe Harbor CDO 2005-1 Ltd. A-1B AAA/Watch Neg AAA Monroe Harbor CDO 2005-1 Ltd. A-2 AA-/Watch Neg AA- Monroe Harbor CDO 2005-1 Ltd. B A+/Watch Neg A+ Nautilus RMBS CDO I Ltd. CF BB/Watch Neg BB Nautilus RMBS CDO I Ltd. CV BB/Watch Neg BB Nautilus RMBS CDO II Ltd. A-1J AAA/Watch Neg AAA Nautilus RMBS CDO II Ltd. A-2 AA/Watch Neg AA Neptune CDO 2004-1 Ltd. A-1LB AA/Watch Neg AA Neptune CDO 2004-1 Ltd. A-2L BBB-/Watch Neg BBB- Neptune CDO 2004-1 Ltd. A-3L BB/Watch Neg BB Paragon CDO Ltd. A AAA/Watch Neg AAA Paragon CDO Ltd. B AA-/Watch Neg AA- Paragon CDO Ltd. C BBB/Watch Neg BBB Parkridge Lane Structured E BB/Watch Neg BB Finance Special Opportunities CDO I Ltd. Pioneer Valley Structured Credit C A-/Watch Neg A- CDO I Ltd. Pioneer Valley Structured Credit D BBB/Watch Neg BBB CDO I Ltd. Reservoir Funding Ltd. A-2 AAA/Watch Neg AAA Reservoir Funding Ltd. B A/Watch Neg A Reservoir Funding Ltd. C BBB/Watch Neg BBB Reservoir Funding Ltd. D BB-/Watch Neg BB- Revelstoke CDO I Ltd. A-3 A/Watch Neg A Saturn Ventures II Ltd. A-2 AA+/Watch Neg AA+ Saturn Ventures II Ltd. A-3 AA-/Watch Neg AA- Saturn Ventures II Ltd. B BBB-/Watch Neg BBB- South Coast Funding V Ltd. C-1 BBB-/Watch Neg BBB- South Coast Funding V Ltd. C-2 BBB-/Watch Neg BBB- South Coast Funding VI Ltd. B AA/Watch Neg AA South Coast Funding VI Ltd. C BBB/Watch Neg BBB STAtic ResidenTial CDO 2005-A A-2 AAA/Watch Neg AAA Ltd. Stone Tower CDO II Ltd. A-3L A/Watch Neg A Stone Tower CDO Ltd. A-3L A/Watch Neg A Stone Tower CDO Ltd. B-1L BBB/Watch Neg BBB Streeterville ABS CDO Ltd. C-1 A-/Watch Neg A- Streeterville ABS CDO Ltd. C-2 A-/Watch Neg A- Summer Street 2004-1 Ltd. A-2 AA/Watch Neg AA Summer Street 2005-HG1 Ltd. A-2 AA+/Watch Neg AA+ TABS 2004-1 Ltd. A-2 AAA/Watch Neg AAA Toro ABS CDO I Ltd. B BBB+/Watch Neg BBB+ Toro ABS CDO I Ltd. C BB+/Watch Neg BB+ Tricadia CDO 2005-3 Ltd. A-3L A/Watch Neg A Tricadia CDO 2005-3 Ltd. B-1L BBB/Watch Neg BBB Trinity CDO Ltd. A-2 AAA/Watch Neg AAA Trinity CDO Ltd. A-3 A+/Watch Neg A+ Trinity CDO Ltd. B BBB+/Watch Neg BBB+ Trinity CDO Ltd. C-1 BB+/Watch Neg BB+ Trinity CDO Ltd. C-2 BB+/Watch Neg BB+ Vermeer Funding II Ltd. C-1 BBB/Watch Neg BBB Vermeer Funding II Ltd. C-2 BBB/Watch Neg BBB Vermeer Funding II Ltd. Combo Secs BBB-/Watch Neg BBB- Witherspoon CDO Funding Ltd. C BBB-/Watch Neg BBB- Witherspoon CDO Funding Ltd. Combo Secs BBB+/Watch Neg BBB+ Witherspoon CDO Funding Ltd. D B+/Watch Neg B+ Zais Investment Grade Ltd. IX A-2 AAA/Watch Neg AAA Zais Investment Grade Ltd. VI B-1 A-/Watch Neg A- Zais Investment Grade Ltd. VI B-2 A-/Watch Neg A- * Arizona Discloses List of Homebuilders in Financial Trouble ------------------------------------------------------------- The Arizona Department of Real Estate said these home builders are in financial trouble: Cachet-Brisas LLC Jackson Properties Element Homes Element Homes Randall Martin Homes Empire Residential Sales, L.P. Silverbel Vistas,Inc. Verde Highlands LLC Crestview 48 LLC Premiere Acquistions LLC Empire Residential Sales L.P. Lighthouse Land & Development LLC Sunwest/Stratland Zacher Homes Elite Homes Randall Martin Homes Sun River Mesa Condo Suntide West, LLC Cachet-Caletas, LLC Cachet-North Vistancia LLC 47 Maryland Development, LLC Cambria Homes Classic Communities Empire Land/KB Homes Ponticello,LLC V & M Homes, LLC Village at Surrey Hills, LLC Zacher Homes Zacher Homes Sierra Pacific Homes LLC Sierra Pacific Homes LLC Sierra Pacific Homes LLC Quantum at Troon North American Partnership, LLC/Keystone Elite Homes Randall Martin Homes Ducati Homes Ducati Homes River Elks, LLC Santa Rita Townhomes LLC Tucson Copper Hills Estates LLC Enchanted Canyon LLC Sierra Pacific Homes LLC Tousa/Engle Homes To view the complete details of the list, visit: http://ResearchArchives.com/t/s?318d * Chapter 11 Cases with Assets & Liabilities Below $1,000,000 ------------------------------------------------------------- Recent Chapter 11 cases filed with assets and liabilities below $1,000,000: In Re Ziegler Enterprises III, LLC Bankr. S.D. Tex. Case No. 08-35663 Chapter 11 Petition filed August 29, 200 Filed as Pro Se In Re Ralf Horn Bankr. N.D. Calif. Case No. 08-54753 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/canb08-54753.pdf In Re Sherman & Boone Associates, Inc. dba Sherman & Boone Real Estate Bankr. N.D. Calif. Case No. 08-54762 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/canb08-54762.pdf In Re Home Escapes, LLC Bankr. D. Conn. Case No. 08-32786 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/ctb08-32786.pdf In Re Arm, LLC Bankr. D.C. Case No. 08-00577 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/dbc08-00577.pdf In Re Lemma's Group, LLC Bankr. D.C. Case No. 08-00578 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/dcb08-00578.pdf In Re Adolfo L. Narvaez Bankr. M.D. Fla. Case No. 08-13006 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/flmb08-13006.pdf In Re Pain Management Center of Southern Indiana, P.C. Bankr. S.D. Ind. Case No. 08-10555 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/insb08-10555.pdf In Re Comprehensive Spine Care, P.C. Bankr. S.D. Ind. Case No. 08-10557 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/insb08-10557.pdf In Re Pain Management & Surgery Center of Southern Indiana, Inc. Bankr. S.D. Ind. Case No. 08-10560 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/insb08-10560.pdf In Re DW Group, LLC Bankr. E.D. Mich. Case No. 08-60822 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/mieb08-60822.pdf In Re Sinking Springs Outparcel, LP Bankr. D. N.J. Case No. 08-26159 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/njb08-26159.pdf In Re Jesal Patwari Bankr. D. N.J. Case No. 08-26178 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/njb08-26178.pdf In Re Shapat, Inc. dba Subway Bankr. D. N.J. Case No. 08-26181 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/njb08-26181.pdf In Re Patwari, LLC dba Subway Bankr. D. N.J. Case No. 08-26184 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/njb08-26184.pdf In Re Shapat 2, LLC dba Subway Bankr. D. N.J. Case No. 08-26186 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/njb08-26186.pdf In Re Shapat 3, LLC dba Subway Bankr. D. N.J. Case No. 08-26188 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/njb08-26188.pdf In Re Deal Road Land Holdings, LLC Bankr. D. N.J. Case No. 08-26200 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/njb08-26200.pdf In Re John Michael Heizer aka Mike Heizer dba Animas River RV Park Bankr. D. N.M. Case No. 08-12810 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/nmb08-12810.pdf In Re Scott Kessler Bankr. M.D. Penn. Case No. 08-52396 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/pamb08-52396.pdf In Re Jay R. Stuck & Janet C. Stuck Bankr. W.D. Penn. Case No. 08-25643 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/pawb08-25643.pdf In Re Sycamore Property Investments, LLC Bankr. E.D. Virginia Case No. 08-34117 Chapter 11 Petition filed August 27, 2008 Filed as Pro Se In Re Balstar Management, LLC Bankr. E.D. Va. Case No. 08-34116 Chapter 11 Petition filed August 27, 2008 Filed as Pro Se In Re Desert Valley Developments, LLC Bankr. D. Ariz. Case No. 08-11222 Chapter 11 Petition filed August 27, 2008 Filed as Pro Se In Re Greenz Restaurants, LLC fdba Grenz Salads for z'adventurous dba Greenz Salads Bankr. N.D. Tex. Case No. 08-34242 Chapter 11 Petition filed August 27, 2008 See http://bankrupt.com/misc/txnb08-34242.pdf In Re International Chariot Co., LLC Bankr. C.D. Calif. Case No. 08-16436 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/cacb08-16436.pdf In Re David V. Thomas Bankr. C.D. Calif. Case No. 08-23764 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/cacb08-23764.pdf In Re Diana K. Saunders Bankr. S.D. Fla. Case No. 08-22409 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/flsb08-22409.pdf In Re LDI Landscaping, Inc. aka LDI Cos. Bankr. M.D. Ga. Case No. 08-52352 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/gamb08-52352.pdf In Re Delta-Tech, Inc. Bankr. N.D. Ohio Case No. 08-16666 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/ohnb08-16666.pdf In Re John K. Moorhead aka Webworks Bankr. E.D. Calif. Case No. 08-32176 Chapter 11 Petition filed August 28, 2008 Filed as Pro Se In Re Carolina Barabad Cruz Bankr. S.D. Calif. Case No. 08-08310 Chapter 11 Petition filed August 28, 2008 Filed as Pro Se In Re Chad Duncan Lance Bankr. D. S.C. Case No. 08-05260 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/scb08-05260.pdf In Re decisioning.com, Inc. Bankr. D. S.C. Case No. 08-05263 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/scb08-05263.pdf In Re John C. Smith dba Smith Truck Salvage & Wrecker Bankr. M.D. Tenn. Case No. 08-07732 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/tnmb08-07732.pdf In Re Roy Daniel Webb aka R. Dan Webb aka Dan Webb aka Roy D. Webb Bankr. M.D. Tenn. Case No. 08-07741 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/tnmb08-07741.pdf In Re Las Rosas Mexican Grill, L.L.C. Bankr. S.D. Tex. Case No. 08-35576 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/txsb08-35576.pdf In Re Las Rosas Mexican Grill II, LLC aka Las Rosas Mexican Restaurant II, LLC Bankr. S.D. Tex. Case No. 08-35579 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/txsb08-35579.pdf In Re Mid Atlantic Construction Services, Inc. Bankr. E.D. Va. Case No. 08-15208 Chapter 11 Petition filed August 28, 2008 See http://bankrupt.com/misc/vaeb08-15208.pdf In Re Sunset Bay Villas, LLC Bankr. S.D. Ala. Case No. 08-13224 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/alsb08-13224.pdf In Re Inland Pacific Investments, LLC Bankr. C.D. Calif. Case No. 08-21431 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/cacb08-21431.pdf In Re Buffets Restaurants Holdings, Inc. aka Old Country Buffet aka Country Buffet aka Ryan's Family Steakhouse aka HomeTown Buffet aka Ryan's Bankr. D. Del. Case No. 08-12023 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/deb08-12023.pdf In Re Victor Enahoro & Chidi M. Enahor Bankr. S.D. Fla. Case No. 08-22513 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/flsb08-22513.pdf In Re Total Entertainment Group USA, Inc. Bankr. D. Ks. Case No. 08-12210 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/ksb08-12210.pdf In Re Michigan Head & Neck Institute, P.C. Bankr. E.D. Mich. Case No. 08-61075 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/miewb08-61075.pdf In Re Arthur M. Drakulic & Denise M. Drakulic dba AMD Paper Salvage Bankr. W.D. Penn. Case No. 08-25740 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/pawb08-25740.pdf In Re Cynthia L. Porter aka Cynthia L. Johnson aka Cynthia P. Johnson Bankr. W.D. Penn. Case No. 08-25763 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/pawb08-25763.pdf In Re St. James Church Home of Fresh Start dba St. James Home of Fresh Start dba St. James HOFS dba St. James Holy Church dba St. James United Holy Church Bankr. M.D. N.C. Case No. 08-11380 Chapter 11 Petition filed August 29, 2008 Filed as Pro Se In Re Ralph Edward Harris aka R.E. Harris Bankr. N.D. Ga. Case No. 08-76914 Chapter 11 Petition filed August 29, 2008 Filed as Pro Se In Re Ralph Edward Harris aka R.E. Harris Bankr. N.D. Ga. Case No. 08-76914 Chapter 11 Petition filed August 29, 2008 Filed as Pro Se In Re I&M, LLC Trustee of Alicia's Glass dba Alicia's Glass, A California Business Trust dba Jose Islas Granados Bankr. C.D. Calif. Case No. 08-16466 Chapter 11 Petition filed August 29, 2008 Filed as Pro Se In Re Belle Cachet, Ltd. Bankr. S.D. Tex. Case No. 08-35671 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/txsb08-35671.pdf In Re William K. Lennon, Sr. & Doris M. Lennon Bankr. E.D. Va. Case No. 08-50999 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/vaeb08-50999.pdf In Re James Alfred Bredlau & Brenda Lee Bredlau Bankr. W.D. Wis. Case No. 08-14527 Chapter 11 Petition filed August 29, 2008 See http://bankrupt.com/misc/wiwb08-14527.pdf In Re VAL Holdings, LLC Bankr. S.D. Tex. Case No. 08-35785 Chapter 11 Petition filed September 1, 2008 See http://bankrupt.com/misc/txsb08-35785.pdf In Re Edward R. Gilliam Bankr. C.D. Calif. Case No. 08-21633 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/cacb08-21633.pdf In Re Heritage Point, Inc. Bankr. N.D. Ga. Case No. 08-77374 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/ganb08-77374.pdf In Re Oak Valley Court, Inc. Bankr. N.D. Ga. Case No. 08-77375 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/ganb08-77375.pdf In Re Page-Bilt Construction & Development, LLC Bankr. N.D. Ga. Case No. 08-77450 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/ganb08-77450.pdf In Re Harris & Cahoon Enterprise, LLC Bankr. S.D. Ga. Case No. 08-20882 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/gasb08-20882.pdf In Re Barriga Cheia, Inc. dba Brazzille Bankr. D. Mass. Case No. 08-16595 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/mab08-16595.pdf In Re Community Comprehensive Lerning Center, Inc. Bankr. E.D. Penn. Case No. 08-15581 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/paeb08-15581.pdf In Re Jermaine Aaron Davis Bankr. C.D. Calif. Case No. 08-16547 Chapter 11 Petition filed September 2, 2008 Filed as Pro Se In Re Jay Jack Dana Bankr. D. Nevada Case No. 08-20079 Chapter 11 Petition filed September 2, 2008 Filed as Pro Se In Re Vernon Lestagez dba V.L. Enterprise dba Lestage Management dba LTManagement Bankr. N.D. Ga. Case No. 08-77390 Chapter 11 Petition filed September 2, 2008 Filed as Pro Se In Re Eric James Nicoll Bankr. N.D. Ga. Case No. 08-77342 Chapter 11 Petition filed September 2, 2008 Filed as Pro Se In Re Victoria Bruder, Inc. dba Scorpio's Steak House Bankr. D. N.J. Case No. 08-26604 Chapter 11 Petition filed September 2, 2008 Filed as Pro Se In Re Unlimited Investments, Inc. Bankr. N.D. Ga. Case No. 08-77344 Chapter 11 Petition filed September 2, 2008 Filed as Pro Se In Re Johnson Chapel Community Church, Inc. Bankr. N.D. Tex. Case No. 08-34462 Chapter 11 Petition filed September 2, 2008 Filed as Pro Se In Re CityNap, Ltd. fka SA-Nap, Ltd. Bankr. W.D. Tex. Case No. 08-52606 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/txwb08-52606.pdf In Re TV Bellevue, LLC fdba Trader Vic's Bankr. W.D. Wash. Case No. 08-15649 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/wawb08-15649.pdf In Re Mills Enterprises, Inc. dba Spencers Abbey Carpet Bankr. W.D. Wash. Case No. 08-15650 Chapter 11 Petition filed September 2, 2008 See http://bankrupt.com/misc/wawb08-15650.pdf ********* 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 ***