/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/081008.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 8, 2008, Vol. 12, No. 240 Headlines ACCEPTANCE INSURANCE: Appealing Ruling Against Asset Sale ACCURIDE CORP: S&P Cuts Rating to 'B-' on Very Weak Truck Industry ALASKA AIR: Weakening Company Profile Cues S&P to Cut Ratings to B ALLEN SYSTEMS: S&P Cuts Corp. Credit to 'B-'; Keeps Dev. Watch AMERICAN FIBERS: Wants Until October 23 to File Schedules AMERICAN INT'L: $85BB Gov't Loan Is Bad Deal, Says Former CEO AMERICAN INT'L: S&P Revises CreditWatch to Neg. from Developing AMPEX CORP: Consummates Plan of Reorganization APP PHARMACEUTICALS: Wants Share Offerings Deregistered APRIA HEALTHCARE: S&P Rates Proposed $1.01 Bil. Secured Notes 'BB' ARTISTDIRECT INC: May Sell Media Ops to Coghill for $2.86 Million ASCENDIA BRANDS: Terminates COO's Employment for Cause BALLY TECHNOLOGIES: Fitch Assigns 'BB+' Rating on $300MM Facility BANK OF AMERICA: Fails to Find Buyers for $10BB Stock Offering BEARD COMPANY: Completes Forced Conversion of Subordinated Notes BILL HEARD: Former Employees File Suit Seeking Back Wages BIOVEST INTERNATIONAL: Laurus et al. Discloses 6.98% Equity Stake BRIGGS RANCH: Case Summary & Five Largest Unsecured Creditors BROOKSIDE TECHNOLOGY: Acquires Standard Tel Networks CAPITOL HEALTH: Case Summary & 31 Largest Unsecured Creditors CHARTER COMMUNICATIONS: Jonathan Dolgen Resigns as Board Member CHARTER COMMUNICATIONS: Restates CEO Neil Smit's Employment Pact CHESAPEAKE CORP: Delisted from NYSE, to Trade on OTC Bulletin CIENA CAPITAL: US Trustee to Hold Meeting to Form Panel on Oct. 8 CLUB AT WATERFORD: Case Summary & 20 Largest Unsecured Creditors COMM 2006-C7: S&P Affirms Ratings on 22 Classes of Certificates CONSTAR INT'L: Highly Leveraged Capital Cues S&P to Junk Ratings CREDIT SUISSE: S&P Trims Ratings on Six Classes of Certificates CREDIT SUISSE: S&P Junks Rating on Class O Certificates CRYSTAL RIVER: S&P Lowers Ratings on Four Classes of Trusts DANIEL HALL: Voluntary Chapter 11 Case Summary D'ESPRIT INC: Files Schedules of Assets and Liabilities EXAERIS INC: Wants Controlling Shareholder Held in Contempt FOCUS ENHANCEMENTS: To Cut Workforce by 45 Employees FRED LEIGHTON: Sues Merrill to Void Security Interest FREESCALE SEMICONDUCTOR: Adopts 2008 Incentive Performance Plan FREESCALE SEMICONDUCTOR: S&P Puts 'B+' Rating Under Negative Watch G&G/PENINSULA LP: Case Summary & Six Largest Unsecured Creditors GATEWAY ETHANOL: Files for Bankruptcy Protection GATEWAY ETHANOL: Case Summary & 20 Largest Unsecured Creditors GENERAL GROWTH: S&P Downgrades Ratings to 'B+'; On Watch Neg GENERAL MOTORS: Opel to Cut Production in Europe by 40,000 Cars GENERAL MOTORS: Seeks to Refinance Detroit Headquarters GENERAL MOTORS: High Demand Cues Share Trading Blackout on Workers HAMIL CORPORATION: Voluntary Chapter 11 Case Summary INTERSTATE BAKERIES: Plan Funding Commitments Pacts Approved INTERSTATE BAKERIES: Files New Plan & Disclosure Statement INTERSTATE BAKERIES: Treatment of Claims Under New Plan INTERSTATE BAKERIES: Unions Recommend Proposed Modification Deal IPOFA WEST: Auctions Mall After Failing to Find Buyer ITSA INTERCONTINENTAL: Chapter 15 Case Summary JEFFERSON COUNTY: Governor Meets With Legislators on Sewer Debt JOHNSTON-SHIELD: Wildcat Mitsubishi Closes Shop in Tucson KIMBALL HILL: Seeks 90-day Extension to Remove Actions LABRANCHE & CO: S&P Holds & Withdraws Ratings at Company's Request LEHMAN BROTHERS: U.S. Trustee Forms 7-Member Creditors' Committee LEHMAN BROTHERS: Panel Wants Probe on JPMC for Freezing $17 Bil. LEINER HEALTH: Wants Until November 20 to File Chapter 11 Plan LINK REC: Case Summary & 20 Largest Unsecured Creditors LLOYD MELVIN: Case Summary & Seven Largest Unsecured Creditors MACEDONIA MISSIONARY: Case Summary & 13 Largest Unsec. Creditors MARCAL PAPER: PBGC Takes Responsibility for Pension Plan Shortfall MARK IV: S&P Chips Corp. Credit Rating to 'B-'; Outlook Negative MATTRESS DISCOUNTERS: Court Approves DLA Piper as Bankr. Counsel MBD INC: Case Summary & 20 Largest Unsecured Creditors MERVYNS LLC: Gets Panel's Support on Initial Strategic Plan MERVYN'S LLC: Panel Can Hire Cooley Godward as Lead Counsel MERVYN'S LLC: Court Extends Lease Decision Period to February 23 MERVYN'S LLC: Panel Can Hire Ashby & Geddes as Delaware Counsel MERVYN'S LLC: Can Hire Bayard P.A. as Special Conflicts Counsel METALDYNE CORP: S&P Cuts Credit Rating to 'CCC+'; Outlook Negative MGM MIRAGE: Amends Terms of $7,000,000,000 BofA Credit Facility MGM MIRAGE: Amends Operating Agreement with Kerzner Istithmar MICHAEL VICK: Proposes to Use Up to 1/3 of Income to Settle Debts MIDNIGHT PROPERTIES: Will Auction Bon Secour to Pay Wachovia MOHAMMED HAYAT: Case Summary & 20 Largest Unsecured Creditors MONROE CENTER: US Trustee to Hold Meeting to Form Panel on Oct. 8 MONTAGE II: Bankruptcy Cancels Foreclosure Sale of Land MPF CORP: Cosco Shipyard Sues to Recover Balance Due on MPF-01 NAMWEST-PALMS LLC: Files for Chapter 11 Bankruptcy in Arizona ON SEMICONDUCTOR: Joint Bid with MTI Cues S&P to Put Neg. Watch PATRIOT HOMES: Given Until Nov. 7 to File Schedules, Creditor List PATRIOT HOMES: Taps Bell Boyd as Bankruptcy Counsel PATRIOT HOMES: Section 341(a) Meeting Set for November 7 PENN TREATY: S&P Junks Rating on Announced Policy Recapturing PENN TREATY: Best Puts 'D' FSR After Announced Policy Recapturing PERKINS & MARIE: S&P Rates $132MM Sr. Secured Notes Rating 'B-' PHARMED GROUP: Court Approves Joseph Myers as Plan Administrator PHILADELPHIA MEDIA: Misses Payments to Creditors POMARE LTD: Blames Tourism Decline, Economy for Chapter 11 Filing PROGRESSIVE ALLIANCE: Jim Clark Guarantees Investors of Payment PROGRESSIVE MOLDED: CCAA Monitor Reports Status of Liquidation PROGRESSIVE MOLDED: Court Dismisses Bankruptcy Cases PROPEX INC: Committee Sued BNP Paribas, et al., Over Demise PROPEX INC: Wants to Hire PricewaterhouseCoopers as Accountants QUECHAN TRIBE: Fitch Junk Rtngs on Inability to Secure $25MM Fund RADIANT ENERGY: Completes $1MM Settlement with Innovations Norway RADIANT ENERGY: July 31 Balance Sheet Upside-Down by $3 Million RELIANT ENERGY: Retail Biz Losses Prompt S&P to Cut Rating to B+ RITE AID: Has $549MM Additional Borrowing Capacity Under Revolver ROBERT PIERSON: Case Summary & 15 Largest Unsecured Creditors ROY MONROE: Case Summary & 20 Largest Unsecured Creditors SAFECO CORPORATION: Best Cuts Rtngs, Removes Watch After LMGI Deal SANTA ANA PUEBLO: Fitch Holds $45MM Revenue Bonds Rating at 'BB+' SEQUOIA COMMUNITY: To Complete Sale to Clinica by October 15 SHERMAN LOOP: Voluntary Chapter 11 Case Summary SIMDAG-ROBEL: Settles Suit Over Use of Trump's Name in Condo SIMPLON BALLPARK: Court OKs $33MM Loan for Cosmopolitan Square SIX FLAGS: Restates Options to Pref. Shares Mandatory Redemption SKYVIEW PROPERTIES: Voluntary Chapter 11 Case Summary SOUTHHILLS PLAZA: Voluntary Chapter 11 Case Summary SPORT LAND: Voluntary Chapter 11 Case Summary STEVE & BARRY'S: Wants Until May 5, 2009 to File Chapter 11 Plan STEVE & BARRY'S: Panel Compels Insiders to Produce Documents STEVE & BARRY'S: Court Set January 26 to Remove Civil Actions SUN PRODUCTS: S&P Lifts Ratings After $1.2BB Unilever NA Buyout SYNTAX-BRILLIAN: Vivitar's UK and Paris Offices Cease Trading SYNTAX-BRILLIAN: Plans to Close Industry Distribution Center TAMARACK RESORT: Fights Credit Suisse's Foreclosure of Assets TCGC LLC: Court Lets Hobart Enforce Restrictive Covenants TOWERS OF CHANNELSIDE: Emerges from Chapter 11 Bankruptcy TRICOM SA: Court to Plane Hold Status Conference on October 16 TRIESTE INVESTMENTS: Case Summary & Nine Largest Unsec. Creditors USA BABY: Has Until Oct. 8 to Respond to Creditors' Ch. 11 Filing USA SPRINGS: No Auction for Bottled-Water Facility, Report Says VALLAMBROSA HOLDINGS: Has Until October 23 to File Chapter 11 Plan VONAGE HOLDINGS: Revises Terms for $215MM Private Debt Financing WACHOVIA CORP: Citigroup & Wells Suit Standstill Ends Today WACHOVIA CORP: Fitch Lifts Issuer Default Rtng to 'A+' from 'BB-' WARWICK PROPERTIES: Case Summary & Largest Unsecured Creditors WHITE DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors WILLIAM DEL BIAGGIO: Nashville Predators Files Claim for Damages * S&P Downgrades Ratings on 93 Classes from 10 US ALT-A RMBS * S&P Chips Ratings on 136 Classes of 28 RMBS Transactions * S&P Puts 18 LBHI-Related US RMBS Transaction Under Neg. Watch * Bruce de'Medici Joins SmithAmundsen LLC as Partner * 15 Corporate and Technology Partners Join Cooley Godward * Computershare Integrates Communications Center for Administar * Garden City Gets Jeffrey R. Miller for Reorganization Division * Daniel Wiggins Joins MorrisAnderson as Consulting Manager * Former U.S. Trustee Joins Traxi as Senior Managing Director * Upcoming Meetings, Conferences and Seminars ********* ACCEPTANCE INSURANCE: Appealing Ruling Against Asset Sale --------------------------------------------------------- Acceptance Insurance Companies, Inc., with the approval of the Official Committee of Unsecured Creditors, has decided to appeal the dismissal of the company's complaint. On Sept. 25, 2008, the United States Court of Federal Claims granted the motion of the United States to dismiss, with prejudice, the company's complaint for failure to state a claim upon which relief may be granted. On Dec. 9, 2003, Acceptance Insurance filed a complaint against the United States of America in the United States Court of Federal Claims. In that complaint the company alleged that by not approving the proposed sale of certain insurance assets of one of the company's subsidiaries, American Growers Insurance Company, to Rain and Hail L.L.C. the Risk Management Agency rendered valueless the insurance business of American Growers. The company also alleged that in rejecting the proposed transaction between the company and Rain and Hail, the RMA effected a taking of the company's property, i.e., the American Growers insurance assets for public use without just compensation in violation of the Fifth Amendment to the United States Constitution. Headquartered in Council Bluffs, Iowa, Acceptance Insurance Companies, Inc. -- http://www.aicins.com/-- owns, either directly or indirectly, several companies, one of which is an insurance company that accounts for substantially all of the business operations and assets of the corporate groups. The company filed for chapter 11 protection on Jan. 7, 2005 (Bankr. D. Nebr. Case No. 05-80059). The Debtor's affiliates -- Acceptance Insurance Services, Inc. and American Agrisurance, Inc. -- each filed chapter 7 petitions (Bankr. D. Nebr. Case Nos. 05-80056 and 05-80058) on Jan. 7, 2005. John J. Jolley, Esq., at Kutak Rock LLP, represents the Debtor in its restructuring efforts. Lawyers at McGrath North Mullin & Kratz PC, LLO represent the Official Committee of Unsecured Creditors in Acceptance Insurance's case. ACCURIDE CORP: S&P Cuts Rating to 'B-' on Very Weak Truck Industry ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Accuride Corp. to 'B-' from 'B' because of further erosion of demand in the already very weak North American commercial truck industry. S&P also lowered the ratings on the company's debt issues. The outlook is negative. "We expect production to remain stagnant for the rest of 2008 and into 2009," said Standard & Poor's credit analyst Gregg Lemos Stein, "increasing the risk that Accuride could violate a covenant under its secured credit facilities early next year." Preliminary net orders for class 8 heavy-duty trucks in North America plummeted to 10,800 units in September, according to A.C.T. Research Co. LLC. This was the weakest month for orders in more than a decade, and down from a monthly average of about 17,500 so far in 2008. Production of commercial trucks and trailers in the U.S. has been very weak this year because of sharply higher diesel fuel prices and the weak economy, which have reduced freight volumes and deterred trucking companies from ordering new equipment. But S&P believes the latest declines also reflect the credit market dislocation that is making it more difficult to finance purchases of new trucks. All of these factors are extending an industry downturn that began in early 2007, originally caused by tougher emissions standards. S&P believes demand will remain sluggish for truck manufacturers and suppliers for much, if not all, of 2009. The weak U.S. market accounts for more than 80% of Accuride's total revenues. Evansville, Indiana-based Accuride, North America's largest manufacturer of heavy steel wheels and other commercial truck components, has total debt of nearly $640 million, including S&P's adjustments that add the present value of operating leases and unfunded postretirement benefit liabilities to debt. The company's adjusted EBITDA has declined precipitously since 2006, reflecting the low industry production rather than any market share losses or operating problems. Leverage climbed to 8x at the end of the second quarter of 2008, including S&P's adjustments. Although S&P had expected leverage to rise steadily in 2007 and peak in early 2008, S&P now believes a muted industry rebound in 2009 will keep leverage well above its previous expectations. In response to these challenges, Accuride announced in late September a restructuring plan that includes the elimination of approximately 11% of the company's workforce. The company plans to take a third-quarter charge of $14.3 million, of which $10 million represents cash outlays in 2008 and 2009. Estimated annual cost savings will be $27.5 million, with $6 million in cost savings to be achieved by the end of 2008. Accuride also announced the departure of chief executive officer John Murphy, who was replaced on an interim basis by William Lasky, a member of Accuride's board of directors. S&P does not believe the CEO change represents a departure from Accuride's long-term strategy, nor does it believes it will complicate or delay more immediate efforts to reduce costs in light of persistently weak industry demand. The ratings on Accuride reflect the company's highly leveraged financial risk profile, which has been increasingly pressured by the severe downturn in the U.S. commercial truck industry. Accuride's business risk profile is slightly more positive, but financial risk increasingly determines the company's rating. Accuride has fair EBITDA margins, especially at strong points in the demand cycle. Still, its markets are extremely cyclical, and even well-anticipated downturns caused by regulatory changes often last longer than expected because of the economy. The company is also exposed to high raw material costs, which it has been able to recover from customers. Recent price increases for steel and other raw materials, however, may be recovered only after a lag. The outlook is negative. The ratings reflect S&P's assumptions that Accuride's sales and profitability will remain weak through at least the first half of 2009, and that the company will receive some benefit from cost-saving efforts rather than a pronounced rebound in demand. S&P could lower the rating if Accuride's liquidity becomes further pressured by a failure to negotiate new financial covenants with adequate availability, or if cash flow remains negative or turns only slightly positive in the second half of 2008. This could occur if class 8 truck orders remain at weak levels of just over 10,000 units monthly through the remaining three months of the year. An upgrade is unlikely in the next year but would be driven by a combination of factors, including Accuride's eliminating the covenant concerns and improving profitability such that leverage returns to 5x or better, including S&P's adjustments. S&P would also need to see some signs of renewed demand in North American truck markets before the next engine emissions change in early 2010. ALASKA AIR: Weakening Company Profile Cues S&P to Cut Ratings to B ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on Alaska Air Group Inc. and its major operating subsidiary, Alaska Airlines Inc., including lowering the long-term corporate credit ratings on both entities to 'B' from 'B+'. The ratings have been removed from CreditWatch, where they were placed with negative implications May 22, 2008. The outlook is stable. The downgrade reflects a weakening in the companies' financial profile due to expected substantial losses caused by high and volatile fuel prices, and pressure on revenues due to reduced demand in a weaker economy. "We expect the company's financial profile to continue to weaken into 2009, due to fuel prices that remain high by historical standards, and weaker demand in the second half of 2008 and into 2009 caused by the slowing economy," said Standard & Poor's credit analyst Betsy Snyder. "While the company's earnings performance has been and will continue to be aided by its fuel-hedging program over the next few quarters, we still expect the company to report losses in both 2008 and 2009." The company has approximately 50% of its fuel needs hedged at approximately $78 a barrel in the second half of 2008 and approximately 41% of its fuel needs hedged at approximately $108 a barrel in 2009. Still, S&P expects the company to report operating losses in 2008 and 2009, compared with a 6.1% operating margin in 2007. The ratings on Alaska Air Group Inc. and its major operating subsidiary, Alaska Airlines Inc., reflect a medium-sized route network serving competitive markets, and the inherent riskiness of the airline industry, offset somewhat by its strong position in its major markets and relatively good liquidity for its size. Alaska Air Group is the holding company for Alaska Airlines Inc. and Horizon Air Industries Inc. Alaska Airlines, the eighth-largest U.S. airline, accounts for approximately 88% of consolidated revenues, and operates hubs at Seattle; Portland, Oregon; Anchorage, Alaska; and Los Angeles. It primarily serves destinations in Alaska from the lower 48 states, as well as destinations along the West Coast of the U.S., Canada, and Mexico. Ratings incorporate losses in the second half of 2008 and full-year 2009, resulting in weaker credit metrics. However, the company's cash, funds from operations, and equipment financings should enable it to meet debt maturities and capital spending through the end of that period. S&P could revise the outlook to negative if revenues are weaker than expected and oil prices remain at S&P's projected levels, resulting in either EBITDA interest coverage declining to below 1x, funds from operations to debt declining to about 5%, or cash declining to below $800 million. S&P considers an outlook revision to positive unlikely over the next year. ALLEN SYSTEMS: S&P Cuts Corp. Credit to 'B-'; Keeps Dev. Watch -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Naples, Florida-based Allen Systems Group Inc. to 'B-' from 'B'. The ratings remain on CreditWatch, where S&P placed them on June 5, 2008. However, S&P revised the CreditWatch implications to developing from negative, which means that it could raise, lower, or affirm the ratings following the completion of its review. At the same time, S&P lowered the ratings on the company's $340 million senior secured credit facility to 'B-' from 'B'. Standard & Poor's placed the ratings on CreditWatch following ASG's announcement that it would not be in compliance with certain covenants in its secured credit facilities due to the revised treatment of several refinanced operating leases as capital leases, and the resultant delay in issuing its compliance documentation. ASG is currently negotiating with its lenders to address its noncompliance and has agreed to pay down a portion of its senior secured credit facility through a subordinated note issuance, in exchange for a waiver of its December 2007 and March 2008 covenant violations. The downgrade reflects currently volatile capital market conditions and uncertainty as to the ultimate timing of the potential financing necessary to fulfill the waiver terms. Standard & Poor's will monitor discussions between ASG and its lenders. "We would expect to raise the rating to 'B' and assign a stable outlook, if ASG satisfies the terms and conditions of its amendment and waiver agreements with its lenders," said Standard & Poor's credit analyst Joseph Spence. "Conversely, we could lower the ratings in the absence of a waiver or satisfaction of such amendment term being completed in the near term," he continued. AMERICAN FIBERS: Wants Until October 23 to File Schedules --------------------------------------------------------- American Fibers and Yarns Company and AFY Holdings Company ask the United States Bankruptcy Court for the District of Delaware to extend, until Nov. 22, 2008, the time within which they may file their schedules of assets and liabilities, and statement of financial affairs. The Debtors' current deadline is Oct. 23, 2008. A hearing is set for Oct. 14, 2008, at 9:30 p.m., (ET) to consider approval of the request for extension. Objections, if any, were due Oct. 6, 2008, at 4:00 p.m. (ET). The Debtors tell the Court that they cannot file their schedules and statement by October 23. The Debtors together with their professionals are now working out to market their assets to maximize the value of their assets, Nathan D. Grow, Esq., at Young Conaway Stargatt & Taylor, LLP, in Wilmington, Delaware. The Debtors need sufficient time to gather information from books, records and documents, Mr. Grow said. The collection of the necessary information to complete the schedules and statements will require substantial time and effort, he continued. About American Fibers Headquartered in Chapel Hill, North Carolina, American Fibers and Yarns Company -- http://www.afyarns.com/-- is a supplier of dyed yarns to the automotive and apparel industries. The company and its affiliates, AFY Holding Company, filed for Chapter 11 protection on Sept. 22, 2008 (Bankr. D. Del. lead case no. 08-12176). Edward J. Kosmowski, Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors selected RAS Management Advisors LLC as proposed financial advisor. Epiq Bankruptcy Solution will serve as the Debtors' claims agent. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million. AMERICAN INT'L: $85BB Gov't Loan Is Bad Deal, Says Former CEO ------------------------------------------------------------- Judith Burns at Dow Jones Newswires reports that Maurice Greenberg, American International Group Inc.'s former chairperson and chief executive officer, claimed that the $85 billion federal loan to the company is a bad deal for workers and shareholders, who might have been better off had the firm gone bankrupt. Liam Pleven at The Wall Street Journal relates that former AIG executives were invited to testify in a hearing at Capital Hill on Oct. 7 on how the company's financial problems worsened until the government had to lend the company some $85 billion in September. Investigations were launched after AIG said in February that its outside auditors had found a "material weakness" in its accounting. Federal prosecutors and the Securities and Exchange Commission have been investigating whether individuals at AIG intentionally overstated the value of credit-default-swaps linked to subprime mortgages, WSJ says, citing sources. AIG said it is cooperating in regulatory and governmental reviews on all matters, WSJ relates. Dow Jones relates that Mr. Greenberg wasn't present at the hearing, but he sent prepared remarks on Tuesday to the House Government Oversight Committee. Dow Jones quoted the committee's chairperson Henry Waxman as saying, "Regrettably, Mr. Greenberg has told the committee that he is too ill to appear here today [Oct. 7]." Dow Jones reports that Mr. Greenberg said that under the agreement on the $85 billion loan, AIG must pay interest on the entire amount even if it doesn't borrow the rest of the amount, encouraging the company to draw down all of the funds even if it does not need it. Dow Jones relates that Mr. Greeberg said in his testimony, "AIG will have no choice but to engage in a fire sale of profitable assets." According to Dow Jones, New York Insurance Department Superintendent Eric Dinallo told the House panel that AIG's collapse was due to a "liquidity problem." Dow Jones relates that AIG's problems started from its financial-products unit, which sold credit-default swaps, a kind of protection against bond issuers defaulting, which Mr. Greenberg claimed worked well under his watch but collapsed after he left the company in March 2005. Martin Sullivan, Mr. Greenberg's successor who left AIG in June, blamed the firm's downfall on a "global financial tsunami" that caused credit markets to freeze and required AIG to take unexpected write-downs on unrealized losses on credit-default swaps, Dow Jones says. Dow Jones relates that Robert Willumstad, who replaced Mr. Sullivan and led AIG until the $85 billion loan, said that accounting rules and credit rating downgrades worsened AIG's problems. The Office of Thrift Supervision sent a letter to AIG's general counsel in March cited concerns about "corporate oversight" of the company's financial products unit, which PricewaterhouseCoopers, AIG's auditor, also reported, Dow Jones says, citing Mr. Waxman. According to Dow Jones, Mr. Waxman said that AIG had a weeklong retreat for executives at the St. Regis Resort in Monarch Beach, California, where rooms can cost more than $1,000 a night, less than a week after the federal bailout. Copies of invoices distributed by the House committee indicated that AIG paid more than $440,000, including almost $7,000 for golf and $23,000 in spa charges, Dow Jones says. AIG spokesperson Joseph Norton explained that the meeting was a recognition event planned last year to reward high-performing independent insurance agents who sell AIG products, a "standard practice" to motivate sales personnel, Dow Jones relates. Dow Jones reports that Lynn Turner, the Securitities and Exchange Commission's former chief accountant, told the House panel that he doesn't believe AIG was honest with its investors about its exposure to the credit-default swaps market. AIG's CEO Edward Liddy and other current executives in the company were not on a list of witnesses invited to testify at the hearing, WSJ states. About American International Group Based in New York City, American International Group Inc. -- http://www.aig.com/-- (NYSE: AIG) is an international insurance and financial services organization, with operations in more than 130 countries and jurisdictions. The company is engaged through subsidiaries in General Insurance, Life Insurance & Retirement Services, Financial Services and Asset Management. The company's British headquarters are located on Fenchurch Street in London, continental Europe operations are based in La Defense, Paris, and its Asian HQ is in Hong Kong. AIG owns Ocean Finance, a United Kingdom based company providing home owner loans, mortgages and remortgages. AIG operates in the UK with the brands AIG UK, AIG Life and AIG Direct. It has about 3,000 employees, and sponsors the Manchester United football club. In response to redemption demands, AIG Life (UK) suspended redemptions of its AIG Premier Bond money market fund on Sept. 19, 2008, in order to provide an orderly withdrawal of assets. $85,000,000,000 Federal Reserve Loan The Federal Reserve Bank of New York extended to AIG a revolving credit facility up to $85 billion. AIG's borrowings under the revolving credit facility will bear interest, for each day, at a rate per annum equal to three-month Libor plus 8.50%. The revolving credit facility will have a 24-month term and will be secured by a pledge of assets of AIG and various subsidiaries. The Credit Facility provides for a 79.9% equity interest in AIG. The Credit Facility provides for an initial gross commitment fee of 2% of the total Credit Facility on the closing date. AIG, in a regulatory filing with the Securities and Exchange Commission, said it will pay a commitment fee on undrawn amounts at the rate of 8.5% per annum. Interest and the commitment fees are generally payable through an increase in the outstanding balance under the Credit Facility. Borrowings under the Credit Facility are conditioned on the NY Fed being reasonably satisfied with, among other things, AIG's corporate governance. AIG is required to repay the Credit Facility from, among other things, the proceeds of certain asset sales and issuances of debt or equity securities. These mandatory repayments permanently reduce the amount available to be borrowed under the Credit Facility. In a statement, the company said "AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues." Standard & Poor's Ratings Services has revised the CreditWatch status of most of its ratings on the AIG group of companies -- including its 'A-' long-term counterparty credit ratings on American International Group Inc. and International Lease Finance Corp. and the 'A+' counterparty credit and financial strength ratings on most of AIG's insurance operating subsidiaries -- to CreditWatch developing from CreditWatch negative. Fitch Ratings revised its Rating Watch on American International Group, Inc. to Evolving from Negative. Fitch viewed this transaction as a favorable development that alleviates significant near-term liquidity concerns. The Troubled Company Reporter reported on Sept. 19, 2008 that that Edward Liddy replaced Robert Willumstad as AIG's CEO. * * * In a U.S. Securities and Exchange Commission filing dated Aug. 6, 2008, AIG reported a net loss for the second quarter of 2008 of $5.36 billion compared to 2007 second quarter net income of $4.28 billion. Second quarter 2008 adjusted net loss was $1.32 billion, compared to adjusted net income of $4.63 billion for the second quarter of 2007. The continuation of the weak U.S. housing market and disruption in the credit markets, as well as global equity market volatility, had a substantial adverse effect on AIG's results in the second quarter. Net loss for the first six months of 2008 was $13.16 billion, compared to net income of $8.41 billion in the first six months of 2007. Adjusted net loss for the first six months of 2008 was $4.88 billion, compared to adjusted net income of $9.02 billion in the first six months of 2007. AMERICAN INT'L: S&P Revises CreditWatch to Neg. from Developing --------------------------------------------------------------- Standard & Poor's Ratings Services revised the CreditWatch status of its ratings on American International Group Inc. (NYSE:AIG; A-/Watch Neg/A-1) and AIG's guaranteed subsidiaries to negative from developing. Standard & Poor's also said that the ratings on most of AIG's insurance operating subsidiaries remain on CreditWatch with developing implications. The 'A-/A-1' counterparty credit rating on AIG relies on the significant support from the $85 billion borrowing facility provided by the Federal Reserve Bank of New York. The facility provides liquidity, allowing the company and its subsidiaries to meet debt and other obligations while it implements its plan to sell various businesses. "The $61 billion draw to date on the facility is much larger than we had previously anticipated," noted Standard & Poor's credit analyst Rodney A. Clark. "This has caused the scope of the planned business sales to exceed our expectations." The ratings on AIG and its guaranteed subsidiaries are on CreditWatch negative to indicate that there could be downward pressure because of S&P's view of the risks around the execution of the plan as well as the heavy debt-service requirements of a much smaller and less-diversified AIG. The current disruption in the credit markets could make it difficult to sell businesses at attractive valuations. Over the longer term, S&P expects that the effects of the disposition--coupled with broader market-support actions, including the proposed Troubled Asset Relief Program, changes in mark-to-market accounting rules, and AIG's efforts to stem residential mortgage-based securities-related losses--will improve the available funds under the Fed borrowing facility. The 'A+' financial strength ratings on most of AIG's insurance operating subsidiaries reflect S&P's view of the strong competitive positions, earnings, and capital of those companies, somewhat offset by investment risk in their portfolios. Those ratings are on CreditWatch developing to indicate that they could be raised or lowered, depending on whether or not AIG sells them and, if it does, who the buyer is. "We will analyze the capital structure and business prospects of each potential subsidiary sale and make rating changes as necessary when those sales materialize," Mr. Clark added. "For the subsidiaries that are likely to remain part of AIG, the ratings will depend on the ongoing ability to attract and retain profitable business and on the capital structure of AIG once the corporate restructuring is completed." AMPEX CORP: Consummates Plan of Reorganization ---------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York entered an order consummating the plan of reorganization filed by Ampex Corp. and some of its U.S. subsidiaries under Chapter 11 of the U.S. Bankruptcy Code. In July 2008, all creditors voted in favor of the Plan. All remaining conditions to Plan consummation have now been satisfied, permitting Ampex to emerge from bankruptcy as a going concern. Ampex has received $5 million of new funding from Hillside Capital Incorporated that will be used for, among other things, general working capital purposes and to repay a portion of its outstanding Senior Notes. In addition, Hillside has provided Ampex with financing, if needed, to satisfy future pension contributions to its defined benefit plans. Upon emergence, Hillside holds approximately 95% of Ampex's New Common Stock. Ampex's CEO D. Gordon Strickland commented, "Ampex has substantially delivered its capital structure through the reorganization process and now has a capital structure and the resources in place to continue to serve its customers as it has for more than 60 years." Ampex Data Systems' President Larry Chiarella stated, "We greatly appreciate the loyalty of our suppliers, customers and employees during the reorganization process, and we look forward to being able to continue to supply the market with the state-of-the art products and services for which Ampex has always been known." About Ampex Corp. Headquartered in Redwood City, California, Ampex Corp. -- http://www.ampex.com/-- (Nasdaq:AMPX) is a licensor of visual information technology. The company has two business segments: Recorders segment and Licensing segment. The Recorders segment primarily includes the sale and service of data acquisition and instrumentation recorders (which record data and images rather than computer information), and to a lesser extent mass data storage products. The Licensing segment involves the licensing of intellectual property to manufacturers of consumer digital video products through their corporate licensing division. On March 30, 2008, Ampex Corp. and six affiliates filed for protection under Chapter 11 of the Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of New York (Case Nos. 08-11094 through 08-11100). Matthew Allen Feldman, Esq., and Rachel C. Strickland, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors in their restructuring efforts. The Debtors have also retained Conway Mackenzie & Dunleavy as their financial advisors. In its schedules of assets and liabilities filed with the Court, Ampex Corp. disclosed total assets of $9,770,089 and total debts of $82,488,054. The Debtors have nine foreign affiliates that are incorporated in seven countries -- one each in the United Kingdom, Japan, Belgium, Colombia and Brazil and two each in Germany and Mexico. With the exception of the affiliates located in the U.K. and Japan, none of the other foreign affiliates conduct meaningful business activity. As of March 30, 2008, none of the foreign affiliates have commenced insolvency proceedings. On July 9, 2008, the Court confirmed the Debtors' first modified third amended joint Chapter 11 plan of reorganization. APP PHARMACEUTICALS: Wants Share Offerings Deregistered ------------------------------------------------------- APP Pharmaceuticals, Inc. filed with the Securities and Exchange Commission post-effective amendments to registration statement nos. 333-135383, 333-103894, 333-84280, 333-141034, 333-133364, and 333-75606 to deregister any registered securities that remain unsold at the termination of the offerings of the related securities on Sept. 22, 2008. On Sept. 10, 2008, Fresenius Kabi Pharmaceuticals Holding, Inc. completed the acquisition of APP Pharmaceuticals pursuant to the merger contemplated by the Agreement and Plan of Merger, dated July 6, 2008, with Fresenius SE, FK Holdings, and Fresenius Kabi Pharmaceuticals, LLC. As a result of the Merger, each outstanding share of common stock of the APP Pharmaceuticals and certain stock options and restricted stock units of the Company were converted into the right to receive $23.00 in cash, without interest, and one Contingent Value Right, issued by FK Holdings, and the Common Stock ceased to trade on The NASDAQ Stock Market LLC and a Form 25 was filed with the Securities and Exchange Commission to delist the Common Stock from The NASDAQ Stock Market LLC. As of Sept. 30, 2008, the Common Stock has been canceled and delisted from The NASDAQ Stock Market LLC. About APP Pharmaceuticals Headquartered in Schaumburg, Illinois, APP Pharmaceuticals Inc. is a hospital-based injectable pharmaceutical company, focusing on oncology, anti-infective, anesthetic/analgesic and critical care markets. The company develops, produces and markets a comprehensive portfolio of over 100 hospital-based injectable products and operates three manufacturing facilities producing a comprehensive range of dosage formulations, including lyophilization. At June 30, 2008, the company's balance sheet showed total assets of $1,105,063,000 and total liabilities of $1,146,750,000, resulting in a total stockholders' deficit of $41,687,000. The Troubled Company Reporter reported on July 11, 2008, that Standard & Poor's Ratings Services affirmed APP Pharmaceuticals Inc.'s 'BB' long-term corporate ratings. The outlook on APP is stable. APRIA HEALTHCARE: S&P Rates Proposed $1.01 Bil. Secured Notes 'BB' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' issue-level rating to Apria Healthcare Group Inc.'s (BB+/Watch Neg/--) proposed $1.01 billion senior secured notes due 2014, and assigned a recovery rating of '2' to the proposed notes, indicating the expectation of substantial recovery in the event of default. "The notes are being issued to finance the acquisition of the company by financial sponsor The Blackstone Group in a transaction expected to close in the fourth quarter of 2008," said Standard & Poor's credit analyst Alain Pelanne. If the transaction closes as currently structured, the corporate credit rating on Apria will be lowered to 'BB-' with a stable outlook, from 'BB+'. "The ratings on the proposed notes issuance are also predicated upon the transaction closing as currently planned," added Mr. Pelanne. "Until that time, the ratings on Apria will remain on CreditWatch with negative implications, where they were placed in June 2008 after the leveraged buyout was announced." The ratings on Lake Forest, California-based Apria reflect the company's aggressive leverage, its exposure to third-party reimbursement and pricing decisions, and the challenges of managing the integration of Coram Inc. and implementing a number of strategic initiatives. These risks are partially outweighed by Apria's leading position in providing specialized home health care services and equipment, its history of generating significant cash flows, and its increasingly diverse business and payor mix. While Medicare reimbursement is expected to present numerous challenges, including the implementation of oxygen rental caps and a 9.5% nationwide cut in reimbursement for various items of durable medical equipment, the company has a demonstrated history of cutting costs and it has identified several strategic initiatives which should help mitigate the effect of some of these reimbursement cuts. As currently structured, immediately after the proposed LBO, Standard & Poor's expects the company to be levered at about 4.0x on a lease-adjusted basis, and after giving some credit to cost savings already achieved. ARTISTDIRECT INC: May Sell Media Ops to Coghill for $2.86 Million ----------------------------------------------------------------- ARTISTdirect Inc., disclosed in a Securities and Exchange Commission filing that it entered into a non-binding letter of intent with Coghill Capital Management, LLC, dated Sept. 25, 2008. The Letter of Intent contemplates a possible sale of all of the media and e-commerce business operations of the company, including, but not limited to, all of the business and assets of ARTISTdirect Internet Group, Inc. to an entity controlled by Coghill for a purchase price preliminarily expected to be $2,860,000. The contemplated Transaction would not include the business and assets of MediaDefender Inc. The Transaction is subject to the negotiation and execution of a mutually acceptable asset purchase agreement containing representations and warranties, covenants, conditions, indemnities, and other provisions customary for transactions of the nature of the Transaction. The Transaction is also subject to the satisfactory completion of a due diligence review by Coghill of the business, financial and legal affairs of the Company, and receipt of necessary consents and approvals of regulatory agencies and third parties. No Definitive Agreement has been reached with respect to consummation of the Transaction, and no assurances can be given that a definitive agreement will be reached. To the extent that a Definitive Agreement is reached, no assurances can be given that any such agreement will be entered into on the price or other terms presently contemplated by Coghill and the Company. The parties propose that the closing of the Transaction will take place on the earliest practicable date after: -- satisfactory completion of Coghill's due diligence; and -- execution of a Definitive Agreement. As an inducement to each of the Company and Coghill to continue to discuss and negotiate the Transaction, the parties have agreed in the Letter of Intent to work in good faith with each other to negotiate the Transaction on an exclusive basis through the earliest of: -- Oct. 8, 2008, -- the date on which the parties execute a definitive agreement for a Transaction; or -- the date, if any, that Coghill advises the Company in writing that it no longer has an interest in pursuing the Transaction. The Letter of Intent also provides for the payment of a break-up fee of $140,000 payable by the Company to Coghill in specified circumstances involving the failure to consummate the Transaction. Headquartered in Santa Monica, California, ARTISTdirect Inc. (OTC.BB: ARTD) -- http://artistdirect.com/-- is a digital media entertainment company that is home to an online music network and, through its MediaDefender subsidiary, is a provider of anti-piracy solutions in the Internet-piracy-protection industry. The Troubled Company Reporter reported on Sept. 11, 2008, that ARTISTdirect Inc.'s consolidated balance sheet at June 30, 2008, showed $17,588,000 in total assets and $47,417,000 in total liabilities, resulting in a $29,829,000 stockholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $9,184,000 in total current assets available to pay $47,244,000 in total current liabilities. The company reported a net loss of $29,916,000 on total net revenue of $2,720,000 for the second quarter ended June 30, 2008, as compared to a net loss of $3,486,000 on total net revenue of $6,593,000 in the corresponding period a year ago. On Feb. 7, 2008, the company retained the services of Salem Partners, LLC, to serve as a financial advisor to the company in connection with the sale, merger, consolidation, reorganization or other business combination and the restructuring of the material terms of the company's senior notes and subordinated convertible notes. The company said that if the company is unable to complete a sale or merger or restructure its senior and subordinated debt obligations in a satisfactory manner and the lenders begin to exercise additional remedies to enforce their rights, the company will not have sufficient cash resources to maintain its operations. In such event, the company may be required to consider a formal or informal restructuring or reorganization, including a filing under Chapter 11 of the United States Bankruptcy Code. ASCENDIA BRANDS: Terminates COO's Employment for Cause ------------------------------------------------------ Ascendia Brands, Inc., terminated for cause the employment of Robert W. Bailey, its executive vice president and chief operating officer. Headquartered in Hamilton, New Jersey, Ascendia Brands, Inc. -- http://www.ascendiabrands.com/-- makes and sells branded consumer products primarily in North America and over 80 countries as well. The company's customers include Walmart, Walgreens, Kmart, Meijer Stores, Target, and CVS. The company and six of its affiliates filed for Chapter 11 protection on Aug. 5, 2008 (Bankr. D. Del. Lead Case No.08-11787). Kenneth H. Eckstein, Esq., and Robert T. Schmidt, Esq., at Kramer Levin Naftalis & Frankel LLP, represent the Debtors in their restructuring efforts. M. Blake Cleary, Esq., Edward J. Kosmoswki, Esq., and Patrick A. Jackson, Esq., at Young, Conaway, Stargatt & Taylor, LLP, serve as the Debtors' Delaware counsel. The Debtors selected Epiq Bankruptcy Solutions LLC as their claims agent. When the Debtors filed for protection from their creditors, they listed total assets of $194,800,000 and total debts of $279,000,000. BALLY TECHNOLOGIES: Fitch Assigns 'BB+' Rating on $300MM Facility ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Bally Technologies, Inc.'s new $300 million credit facility. The credit facility rating is two notches above Bally's 'BB-' Issuer Default Rating due to Fitch's view of strong over-collateralization of that debt. The Rating Outlook is Positive. The four-year credit facility consists of a $75 million revolver and a $225 million term loan, which continue to be secured by all domestic subsidiaries except the entity that holds Bally's interest in the Rainbow Casino in Vicksburg, Mississippi. The credit facility was initially priced at LIBOR+325 basis points and was used primarily to refinance its previous term loan that had $290 million outstanding as of June 30, 2008. At closing of the transaction, Bally maintained $25 million of undrawn availability on the new revolver. Notable financial covenants include: -- Leverage ratio: 2.5 times (x) through March 31, 2009, which drops to 2.25x through March 31, 2010 before hitting the floor at 2.0x through June 30, 2010; -- Fixed charge coverage ratio of 2.0x; -- Additional indebtedness: Bally is permitted to issue $150 million of senior unsecured debt; -- Dividends: Bally is permitted to pay up to $50 million annually in dividends if leverage is above 1.0x and up to $70 million if leverage is below 1.0x. BANK OF AMERICA: Fails to Find Buyers for $10BB Stock Offering -------------------------------------------------------------- Dan Fitzpatrick at The Wall Street Journal reports that Bank of America Corp. failed to attract buyers to a $10 billion stock offering on Tuesday. BofA disclosed the pricing of its offering of $10 billion, or 455 million shares, of common stock on Oct. 7. The transaction includes an option to the underwriters to purchase up to 68.25 million additional shares of common stock. BofA expects to deliver the shares of common stock on Oct. 10, 2008. The offering, priced at $22 per share, would have generated net proceeds of $9.76 billion, after deducting underwriting expenses -- approximately $11.22 billion if the underwriters exercise their option to purchase additional shares of common stock in full. BofA planned to use the proceeds from the sale for general corporate purposes. The transaction is being conducted as a public offering registered under the Securities Act of 1933. Banc of America Securities LLC and Merrill Lynch & Co. are serving as joint bookrunners. The offering is being made under BofA's shelf registration statement filed with the Securities and Exchange Commission. WSJ relates that many analysts expected the deal to be priced by the time BofA shares opened for regular trading on Tuesday, but that didn't happen. "That probably did scare people," WSJ quoted Sandler O'Neill & Partners LP banking analyst Jeffery Harte as saying. BofA had trouble finding enough investors who will buy shares at the price it was seeking, WSJ says, citing NAB Research LLC analyst Nancy Bush. The report states that Ms. Bush said, "They were trying to price at $28, and everybody just laughed at them." According to WSJ, BofA disclosed on Monday a worse-than-expected 68% decline in its third-quarter profit this year, which dropped to $1.18 billion, and a 50% dividend cut. WSJ relates that RBC Capital Markets banking analyst Joe Morford said that when investors saw that BofA has to bolster its capital even though it remains profitable overall and is raking in deposits from rivals, "they are driving a hard bargain" on the stock offering. Despite this, analysts said there is no doubt that BofA will complete the $10 billion offering, according to WSJ. About Bank of America Bank of America Corporation -- https://www.bankofamerica.com/ -- is a bank holding company in North Carolina. Through its banking subsidiaries and various non-banking subsidiaries throughout the United States and in selected international markets, Bank of America provides a diversified range of banking and non-banking financial services and products through three business segments: Global Consumer and Small Business Banking, Global Corporate and Investment Banking, and Global Wealth and Investment Management. The company operates in 32 states, the District of Columbia and 30 foreign countries. In the United States, it serves 59 million consumer and small business relationships with 6,100 retail banking offices, 18,500 automated teller machines and 24 million active online users. It offers services in 13 states. In October 2007, it acquired ABN AMRO North America Holding Company. In July 2007, it acquired U.S. Trust Corporation. In July 2008, Bank of America acquired Countrywide Financial Corp. BEARD COMPANY: Completes Forced Conversion of Subordinated Notes ---------------------------------------------------------------- The Beard Company disclosed in a Securities and Exchange Commission filing that it has completed the Forced Conversion of $46,332 in outstanding Series A 12% Convertible Subordinated Notes due Aug. 30, 2008; $511,995 in outstanding Series B 12% Convertible Subordinated Notes due Nov. 30, 2008; and $2,205,300 in outstanding 12% Convertible Subordinated Notes due Feb. 15, 2010. All of the Notes were converted at their Conversion Price of $1.00 per share. As a result of the conversions our total outstanding common shares have increased to 9,374,869. Herb Mee, Jr., President, stated, "The conversions have added $2,764,000 to our equity without the expenditure of any cash to retire the Notes. $2,205,300 of long-term debt and $558,300 of short-term debt have been eliminated. Our annual interest expense has been reduced by more than $264,000. All of this improvement will be reflected in our September 30 balance sheet and financial ratios." About The Beard Company Based in Oklahoma City, The Beard Company (OTC BB: BRCO) http://www.beardco.com/-- through its subsidiaries, is principally engaged in coal reclamation in the United States. It operates in four segments: Coal Reclamation, Carbon Dioxide, e-Commerce, and Oil and Gas. Going Concern Doubt As reported in the Troubled Company Reporter on April 23, 2008, Cole & Reed, P.C., in Oklahoma City, expressed substantial doubt about The Beard Company's ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Dec. 31, 2007, and 2006. Cole & Reed pointed to the company's recurring losses and negative cash flows from operations. The Beard Company's consolidated balance sheet at June 30, 2008, showed $2,301,000 in total assets and $9,106,000 in total liabilities, resulting in a $6,805,000 total shareholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $1,300,000 in total current assets available to pay $3,154,000 in total current liabilities. The company reported a net loss of $516,000 on revenues of $373,000 for the second quarter ended June 30, 2008, compared with a net loss of $611,000 on revenues of $330,000 in the same period last year. Continuing operations posted a net loss of $283,000 compared to $333,000 for the same period in 2007. Financial results also included losses of $233,000 from discontinued operations for the second quarter of 2008 compared to $278,000 for the same period in 2007, as a result of the discontinuance of three of the company's segments. BILL HEARD: Former Employees File Suit Seeking Back Wages --------------------------------------------------------- Two former employees of Bill Heard Enterprises Inc.'s store in Huntsville, Alabama, have filed a lawsuit against the company, in the Northern Alabama U.S. District Court, claiming that they were not informed that the Heard car dealerships would be closed, the Workforce Management Magazine reported Thursday. The magazine is a twice monthly publication for workforce management and human resource professionals. The suit, which seeks class-action status, was filed on Sept. 25, a day after the Chevrolet dealer group closed its remaining stores. Under the federal Worker Adjustment and Retraining Notification Act, qualifying employees must receive 60 days' notice prior to the closure of their workplace. The employees seek back pay and reimbursement of legal fees. Bill Heard Enterprises filed for Chapter 11 bankruptcy protection on September 28. About Bill Heard Headquartered in Huntsville, Alabama, Bill Heard Enterprises Inc. -- http://www.billheardhuntsville.com/-- is one of the largest dealers of Chevrolet in the United States. The company and 17 of its affiliates filed for Chapter 11 protection on Sept. 28, 2008 (Bankr. N.D. Ala. Lead Case No. 08-83028). Derek F. Meek, Esq., at Burr & Forman, LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $500 million and $1 billion each. BIOVEST INTERNATIONAL: Laurus et al. Discloses 6.98% Equity Stake ----------------------------------------------------------------- Laurus Master Fund, Ltd., PSource Structured Debt Limited, Laurus Capital Management, LLC, Valens U.S. SPV I, LLC, Valens Offshore SPV I, Ltd., Valens Offshore SPV II, Corp., Valens Capital Management, LLC, David Grin, Eugene Grin disclosed in a Securities and Exchange Commission filing that they may be deemed to beneficially own 6,849,022 shares of Biovest International, Inc.'s common stock, representing 9.8% of the shares issued and outstanding. About Biovest International Based in Tampa, Florida, Biovest International Inc. (OTC BB: BVTI) -- http://www.biovest.com/-- is a pioneer in the development of advanced individualized immunotherapies for life-threatening cancers of the blood system. Biovest is a majority-owned subsidiary of Accentia Biopharmaceuticals Inc., with its remaining shares publicly traded. Biovest International Inc.'s consolidated balance sheet at June 30, 2008, showed $5.9 million in total assets, $36.8 million in total liabilities, and $4.6 million in non-controlling interests in variable interest entities, resulting in a $35.5 million total stockholders' deficit. Going Concern Doubt Aidman Piser & Company P.A., in Tampa, Florida, expressed substantial doubt about Biovest International Inc.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years ended Sept. 30, 2007, and 2006. The auditing firm pointed to the company's cumulative net losses since inception, cash used in operating activities, and working capital deficiency. At June, 2008, the company had an accumulated deficit of approximately $108.1 million. BRIGGS RANCH: Case Summary & Five Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Briggs Ranch Grand Vacation Club LP 480 Bogert Trail Palm Springs, CA 92264 Bankruptcy Case No.: 08-23655 Type of Business: The Debtor owns and operates a resort park. See: http://www.briggsranch.com/ Chapter 11 Petition Date: October 6, 2008 Court: Central District Of California (Riverside) Judge: Meredith A. Jury Debtor's Counsel: William G. Barrett, Esq. 419 N Larchmont #91 Los Angeles, CA 90004 Tel: (914) 522-8540 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $50 million Debtor's Five Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ BFT loans $1,948,519 6360 La Punta Los Angeles, CA 90058 Tel: (760) 325-1877 Guido Brothers Const. construction $288,465 Attn: Tom Guido 8526 Vidor Avenue San Antonio, Texas 78216 Tel: (210) 344-8321 Yantis Construction construction $107,943 Attn: Mike Yantis P.O. Box 17045 Tel: (210) 544-3780 CalTex Builders construction $50,840 IMM Inc. interior design $41,760 BROOKSIDE TECHNOLOGY: Acquires Standard Tel Networks ---------------------------------------------------- Brookside Technology Holdings Corp. disclosed in a Securities and Exchange Commission filing that, through its wholly owned subsidiary, Standard Tel Acquisitions, LLC, it has acquired Standard Tel Networks, LLC, an independent distributor of high quality, turnkey converged voice and data business communications products and services with California offices in the San Francisco Bay Area, Sacramento, San Diego and headquartered in Huntington Beach. The acquisition was conducted pursuant to a Stock and Membership Interest Purchase Agreement dated July 17, 2008, and was structured as the acquisition of: -- all of the stock of Trans-West Network Solutions, Inc. from the its shareholders; and -- all of the membership interest of STN owned by ProLogic Communication, Inc. Trans-West, a holding company with no operations, owns 80% of the membership interest of STN and ProLogic owned the other 20%, and, accordingly, the Company now owns (directly, in part, and indirectly through Trans West, in other part) 100% of STN. At the closing of the STN Acquisition, the Company issued to the Seller Parties 40,843,376 shares of the Company's common stock and paid to the Seller Parties $3,209,262.70 in cash. However, pursuant to the Purchase Agreement, one-half of such shares and $500,000 of the cash payment are being held in escrow subject to certain post-closing purchase price adjustments and indemnification obligations. In connection with the STN acquisition, the Company entered into Restrictive Covenant Agreements with the Seller Parties, pursuant to which the Seller Parties, subject to certain limited exceptions, agree not to use or disclose confidential information belonging to the Company or STN and not to compete with the Company nor to solicit its customers or employees. Additionally, the Company caused STN to enter into an Employment Agreement with Michael Promotico, with an initial term of three years, pursuant to which he will serve as STN's Chief Executive Officer. The Employment Agreement contains standard terms and provisions, including non-competition and confidentiality provisions and provisions relating to early termination and constructive termination, and provides for an annual base salary, performance incentives, certain standard benefits and stock options at an exercise price equal to the fair market value of the shares on the closing date. Financing With the closing of the STN Acquisition, the company and its five subsidiaries -- U.S. Voice and Data, LLC, Brookside Technology Partners, Inc., Acquisition Sub, Trans-West and STN entered into a Credit Agreement with Chatham Investment Fund III, LLC, Chatham Investment Fund III QP, LLC and Chatham Credit Management III, LLC, under which they agreed to provide a $7,000,000 term loan and a $2,000,000 revolving line of credit. The Loans are evidenced by a Term Note and a Revolving Note. As a condition precedent to the extension of the Loans: -- the Company entered into a Pledge Agreement, dated Sept. 23, 2008, pursuant to which the Company pledged the stock of each subsidiary owned by it as collateral to secure payment of the Loans; -- the Company granted to Chatham a Warrant to purchase an aggregated of 140,930,835 shares of Company's Common Stock; and -- the Company entered into a Warrant Purchase and Registration Rights Agreement, dated Sept. 23, 2008, pursuant to which, among other things, the Company agreed to register the resale of the shares underlying the Chatham Warrants upon demand by Chatham. The Loans have a term of three years and bear interest, at these rates: (i) with respect to the Revolving Note, LIBOR plus 4.00% per annum; and (ii) with respect to the Term Loan, LIBOR Rate plus 9.00% per annum. The Chatham Credit Agreement contains standard representations, warranties and covenants that require the Company, on a consolidated basis, to maintain at the end of each month: (1) a fixed charge coverage ratio for the 12 months then ended of at least 1.75:1; and (2) a leverage ratio as of the last day of such fiscal month and for the 12 months then ended of not more than 3:1, in each case calculated as set forth in the Credit Agreement. The transactions were consummated on September 23, 2008. Prior to the closing of the Chatham Financing, the Company did not have any relationship with Chatham. Prior Credit Documents Termination As of July 3, 2008, Vicis Capital Master Fund, a sub-trust of Vicis Capital Series Master Trust, and the Company's largest preferred stockholder, purchased and assumed from Hilco Financial, LLC, the Company's prior senior lender, and from Dynamic Decisions Growth Premium Fund, the Company's prior mezzanine lender, all their credit agreements, loans and promissory notes under which Hilco and DD had loaned to the Company representing an aggregate of $8,100,000. In connection with the closing of the STN Acquisition and the Chatham Financing, Vicis and the Company entered into, and closed upon, a Securities Purchase and Loan Conversion Agreement, dated Sept. 23, 2008, pursuant to which the Company, in full satisfaction of the Vicis Debt: (i) paid $2,250,000 in cash to Vicis; (ii) delivered to Vicis a subordinated note in the principal amount of $1,500,000, bearing interest at 10% and maturing on April 15, 2010; and (iii) converted the balance of the Vicis Debt, including all accrued interest of $676,384, in the combined aggregate amount of $5,026,384, into 5,026,384 shares of the Company's Series A Convertible Preferred Stock. Vicis entered into a subordination agreement with Chatham, wherein Vicis agreed to subordinate the Vicis Subordinated Note to the Loans. As a result, all Prior Credit Documents have been terminated effective September 23, 2008. About Brookside Technology Based in Clearwater, Florida, Brookside Technology Holdings Corp. (OTC BB: BKSD) -- http://www.brooksideus.com/-- is a holding company for Brookside Technology Partners Inc., a Texas corporation, and US Voice & Data LLC, an Indiana limited liability company, and all operations are conducted through those two wholly owned subsidiaries. Headquartered in Austin, Texas, Brookside Technology Partners is a provider and global managed service company specializing in selling, designing, analyzing and implementing converged Voice over IP (VoIP), data and wireless business communications systems and solutions for commercial and state/government organizations of all types and sizes in the United States. Headquartered in Louisville, Kentucky, USVD is a regional provider of telecommunication services including planning, design, installation and maintenance for the converged voice and data systems. USVD serves the Kentucky and southern Indiana markets, operating out of offices in Louisville, Lexington and Indianapolis. Going Concern Doubt Brookside Technology Holdings Corp. says its current and past losses raise doubt about the company's ability to continue as a going concern. The company's balance sheet as of June 30, 2008, showed $18,239,142 in total assets, $18,243,852 in total liabilities, resulting to $4,710 in shareholders' deficit. At June 30, 2008, the company's consolidated balance sheet also showed strained liquidity with $4,420,853 in total current assets available to pay $17,199,245 in total current liabilities. The Company has incurred net losses during the first six months of 2008, and the years ended Dece. 31, 2007 and 2006. As of June 30, 2008 the Company has a retained deficit of $13,304,403. As of June 30, 2008 the Company was in default on its debt to Hilco of $6,649,423 and the Series B Preferred Stock, which is classified as a liability on the balance sheet, as discussed in Note 3, has matured in the amount of $3,000,000. Vicis has agreed to waive the default on the Hilco note, and to reduce the interest rate from 15% to 10%. CAPITOL HEALTH: Case Summary & 31 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Capitol Health Management, Inc. 2202 Steinway Street Astoria, NY 11105 Bankruptcy Case No.: 08-13934 Debtor-affiliates filing separate Chapter 11 petitions: Entity Case No. ------ -------- Boro Healthcare of Union 08-13935 Boro Medical, P.C. 08-13936 Boro Medical of New York, Inc. 08-13937 Boro Medical of Westchester 08-13938 Boulevard Surgical Center, Inc. 08-13939 Lifeco Medical, P.C. 08-13940 Type of Business: The Debtors provide health care management and medical placement services. Parkway Hospital Inc., which operates a 251-bed propriety community hospital, is an affiliate of the Debtors. Parkway Hospital filed for Chapter 11 protection from its creditors on July 1, 2005 (Bankr. S.D. N.Y. Case No. 05-14876). Timothy W. Walsh, Esq., at DLA Piper Rudnick Gray Cary US LLP, represented the Parkway Hospital. The case was also assigned to Prudence Carter Beatty. As reported in the Troubled Company Reporter on Aug. 9, 2007, the Court confirmed Parkway Hospital's amended plan of reorganization and exited from bankruptcy on Feb. 28, 2008, ending its three-year term in bankruptcy. See: http://www.boromedical.com/ Chapter 11 Petition Date: October 7, 2008 Court: Southern District of New York (Manhattan) Judge: Prudence Carter Beatty Debtor's Counsel: Kevin J. Nash, Esq. FinkGold@aol.com Finkel Goldstein Rosenbloom Nash, LLP 26 Broadway, Suite 711 New York, NY 10004 Tel: (212) 344-2929 Fax: (212) 422-6836 Estimated Assets: $1 million to $10 million Estimated Debts: $50 million to $100 million Debtor's 31 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Arent Fox LLP $2,750,000 1675 Broadway New York, NY 10019 Centers For Medicare & $1,800,000 Medicaid Services 7500 Security Boulevard Baltimore, MD 21244 Smith & Nephew $65,904 150 Minuteman Road Andover, MA 01810 Daily Mirror Associates $42,760 Modern Medical Systems Co. $39,976 Caligor Physicians $32,484 Cross County Shopping Ctr. $28,150 Comprehensive Anesthesia $27,650 Associates GEM Medical Supply Inc. $27,138 PSS World Medical $20,110 J. Prevuedello Services $19,929 Unitex $15,379 EPIC Mechanical Contractors LLC $13,781 ArthroCare $10,969 Stryker Endoscopy $10,746 Boston Scientific $10,347 Marshall M. Miller $10,000 Associates Inc. Accountemps $8,911 Hydrocision Inc. $7,605 ConMed Linvatec $6,957 Northeast Advertising $6,482 Corporation Pentax $5,582 Osteomed LP $5,431 Medline Industries Inc. $5,357 Complete Systems Care Inc. $5,208 Office Depot $3,992 Complete Systems Care Inc. $3,663 Gazette News Printing $3,160 Creative Plan Designs, Ltd. $2,660 Abbate DeMarinis, LLP $2,333 Aflac $1,326 CHARTER COMMUNICATIONS: Jonathan Dolgen Resigns as Board Member --------------------------------------------------------------- Charter Communications Holdings LLC disclosed in a Securities and Exchange Commission filing that on Sept. 29, 2008, Jonathan L. Dolgen resigned as a member of the Board of Directors of Charter Communications, Inc. Based on St. Louis, Missouri, Charter Communications Holdings LLC -- http://www.charter.com/-- is a holding company whose principal assets at June 30, 2008, are the equity interests in its subsidiaries, which include CCH II, LLC and CCO Holdings, LLC. Charter Communications Holdings LLC, CCH II, and CCO Holdings are indirect subsidiaries of Charter Communications Holding Company, LLC, which is a subsidiary of Charter Communications Inc. The companies, through their operating subsidiary, Charter Communications Operating, LLC, operate broadband communications businesses in the United States offering to residential and commercial customers traditional cable video programming (basic and digital video), high-speed Internet services, and telephone services, as well as advanced broadband services such as high definition television, Charter OnDemand(TM), and digital video recorder service. Cable video programming, high-speed Internet, telephone, and advanced broadband services are sold primarily on a subscription basis. The companies also sell local advertising on cable networks. Charter Communications Holdings LLC's consolidated balance sheet at June 30, 2008, showed $14.65 billion in total assets, $22.15 billion in total liabilities, and $203.0 million in minority interest, resulting in a $7.70 billion members' deficit. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $340.0 million in total current assets available to pay $1.36 billion in total current liabilities. The company reported a net loss of $199.0 million on revenues of $1.62 billion for the second quarter ended June 30, 2008, compared with a net loss of $281.0 million on revenues of $1.50 billion in the same period last year. CHARTER COMMUNICATIONS: Restates CEO Neil Smit's Employment Pact ---------------------------------------------------------------- Charter Communications Holdings LLC discloses that on Sept. 26, 2008, Neil Smit, President and Chief Executive Officer, and the Company agreed to a restatement and amendment of his employment agreement, effective as of July 1, 2008. Terms of the restated and amended employment agreement include: -- extension of the term of the agreement to June 30, 2010; -- an increase in his salary to $1,500,000 from $1,200,000; -- an increase in his target bonus from 150% of annual base salary to 200% of annual base salary; and -- an increase in the maximum bonus payout to 125% of the target bonus in 2008, but not less than 125% and not more than 200% of the target bonus in 2009 and 2010. He will receive a signing bonus of $2,000,000, payable upon signing of the restated and amended agreement, provided that in the event Mr. Smit terminates his employment prior to Dec. 31, 2009, the Company will be entitled to full repayment of the signing bonus; and in the event that Mr. Smit terminates prior to June 30, 2010, but after Dec. 31, 2009, then 50% of the signing bonus is repayable. He will continue to participate in the Company's Executive Cash Award Plan. The vesting of Mr. Smit's incentive awards from 2007 and 2008 are accelerated to vest at June 30, 2010, the termination date of the restated and amended employment agreement, and the incentive awards to be granted in 2009 and 2010 will vest at various times partially depending upon the achievement of financial targets, all as set forth in the restated and amended employment agreement. Each annual equity award in 2009 and 2010 will have the aggregate fair value on the grant date of $6,000,000. He is eligible to participate in other employee benefit plans, programs and arrangements available generally to other senior executives. In the event that Mr. Smit is terminated without "Cause" or "Good Reason," he will be entitled to a lump sum payment equal to 3 times the sum of (a) his annualized salary plus (b) 200% of his annualized salary; accelerated vesting of his equity awards under the Company's Stock Incentive Plan; and, a lump sum payment equal to 36 months of COBRA payments. About Charter Communications Based on St. Louis, Missouri, Charter Communications Holdings LLC -- http://www.charter.com/-- is a holding company whose principal assets at June 30, 2008, are the equity interests in its subsidiaries, which include CCH II, LLC and CCO Holdings, LLC. Charter Communications Holdings LLC, CCH II, and CCO Holdings are indirect subsidiaries of Charter Communications Holding Company, LLC, which is a subsidiary of Charter Communications Inc. The companies, through their operating subsidiary, Charter Communications Operating, LLC, operate broadband communications businesses in the United States offering to residential and commercial customers traditional cable video programming (basic and digital video), high-speed Internet services, and telephone services, as well as advanced broadband services such as high definition television, Charter OnDemand(TM), and digital video recorder service. Cable video programming, high-speed Internet, telephone, and advanced broadband services are sold primarily on a subscription basis. The companies also sell local advertising on cable networks. Charter Communications Holdings LLC's consolidated balance sheet at June 30, 2008, showed $14.65 billion in total assets, $22.15 billion in total liabilities, and $203.0 million in minority interest, resulting in a $7.70 billion members' deficit. The company's consolidated balance sheet at June 30, 2008, also showed strained liquidity with $340.0 million in total current assets available to pay $1.36 billion in total current liabilities. The company reported a net loss of $199.0 million on revenues of $1.62 billion for the second quarter ended June 30, 2008, compared with a net loss of $281.0 million on revenues of $1.50 billion in the same period last year. CHESAPEAKE CORP: Delisted from NYSE, to Trade on OTC Bulletin ------------------------------------------------------------- NYSE Regulation, Inc., determined that the common stock of Chesapeake Corp. -- ticker symbol CSK -– should be suspended prior to the market opening on Oct. 8, 2008. The company expects to commence trading on the OTC Bulletin Board on the same day. The decision to suspend Chesapeake's common stock was reached in view of the fact that the company has fallen below the New York Stock Exchange's continued listing standard regarding average global market capitalization over a consecutive 30 trading day period of not less than $25 million, which is the minimum threshold for continued listing. The total average market capitalization was approximately $21.2 million on Sept. 29, 2008. Chesapeake had previously fallen below the NYSE's continued listing standards for average global market capitalization over a consecutive 30 trading day period of not less than $75 million and latest reported stockholders' equity of not less than $75 million and NYSE Regulation was reviewing business plan materials. However, in light of the subsequent non-compliance with the aforementioned market capitalization standard, this plan process is no longer available to the company. Chesapeake has a right to a review of this determination by a Committee of the Board of Directors of NYSE Regulation. Application to the Securities and Exchange Commission to delist the issue is pending the completion of applicable procedures, including any appeal by the Company of the NYSE Regulation staff's decision. The NYSE noted that it may, at any time, suspend a security if it believes that continued dealings in the security on the NYSE are not advisable. About Chesapeake Corporation Headquartered in Richmond, Virginia, Chesapeake Corporation (NYSE: CSK) -- http://www.cskcorp.com/-- is a supplier of specialty paperboard packaging products in Europe and an international supplier of plastic packaging products to niche end-use markets. Chesapeake has 47 locations in France, Ireland, United Kingdom, North America, China, HongKong, among others and employs approximately 5,500 people. * * * As disclosed in the Troubled Company Reporter on Aug. 11, 2008, Moody's Investors Service downgraded Chesapeake Corporation's Corporate Family Rating to Caa2 from B2 and its Probability of Default Rating to Caa2 from B3. Concurrently, Moody's downgraded the company's senior unsecured revenue bonds to Caa3 from B3 and senior subordinated notes to Caa3 from Caa1. All credit ratings remain on review for possible downgrade. Standard & Poor's Ratings Services lowered its ratings on Chesapeake Corp. The corporate credit rating was lowered to 'CCC+' from 'B'. The ratings remain on CreditWatch, where they were placed on July 2, 2008, with negative implications. CIENA CAPITAL: US Trustee to Hold Meeting to Form Panel on Oct. 8 ----------------------------------------------------------------- The United States Trustee for Region 2, will hold an organizational meeting in the Chapter 11 cases of Ciena Capital LLC on October 8, 2008 at 11:00 a.m. at U.S. Trustee Meeting Room, 80 Broad Street, 4th Floor in New York. 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 Ciena Capital LLC New York, New York-based Ciena Capital, LLC -- http://www.cienacapital.com/-- offers commercial real estate finance services including loans and long term investment property financing. The company and its 11 affiliates filed for Chapter 11 protection on September 30, 2008 (Bankr. S. D. N.Y. Lead Case No. 08-13783). Peter S. Partee, Esq., at Hunton & Williams LLP, represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors they listed assets and debts at $100 million to $500 million. CLUB AT WATERFORD: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: The Club at Waterford, LP 10516 FM 1431 East Marble Falls, TX 78654 Bankruptcy Case No.: 08-11925 Chapter 11 Petition Date: October 6, 2008 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Joseph D. Martinec, Esq. martinec@mwvmlaw.com Martinec, Winn, Vickers & McElroy, P.C. 600 Congress Avenue, Suite 500 Austin, TX 78701 Tel: (512) 476-0750 Fax: (512) 476-0753 Estimated Assets: $50 million to $100 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Wells Fargo Financial Leasing $759,812 P.O. Box 6434 Carol Stream, IL 60197-6434 Willis Environmental Engineering $695,247 310 Main Marble Falls, TX 78654 Sema Golf, LLC $145,554 7353 S. Eagle Street Centennial, CO 80112 Russell, Randy $100,000 Bechtol, Roy $100,000 Bladerunner Runner Farms $94,329 Greenberg Traurig $71,104 B & B Electric $50,500 Woodside Partners $50,000 LCRA $50,000 Plant It, Inc. $39,116 Textron Financial Corp./E-Z-Go $34,880 Lone Star Geo Products, LLC $25,088 Planned Environment $22,734 Freeman & Corbett LLP $22,234 Odessa Pumps & Equipment $20,684 Willis-Sherman Associates, Inc. $19,204 Triple S. Petroleum $17,591 Apex Drilling $16,329 Contech Bridge Solutions Inc. $16,063 COMM 2006-C7: S&P Affirms Ratings on 22 Classes of Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its rating on 22 classes of commercial mortgage pass-through certificates from COMM 2006-C7. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. As of the Sept. 10, 2008, remittance report, the trust collateral consisted of 155 loans with an aggregate principal balance of $2.40 billion, compared with 156 loans with a $2.45 billion aggregate balance. The master servicer, Midland Loan Services Inc., reported financial information for 90% of the loans in the pool. Eighty-seven percent of the servicer-reported information was full-year 2007 data. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.58x, up from 1.37x at issuance. All of the loans in the pool are current, and no loans are with the special servicer. To date, the trust has not experienced any losses. Nine loans ($116.4 million, 5%) in the pool have reported low debt service coverage, two of which are credit concerns. The properties securing these two loans have experienced a combination of declining occupancy and higher operating expenses, and S&P stressed these loans in its analysis. The nine loans with low DSC are secured by a variety of retail, multifamily, and office properties, have an average balance of $12.9 million, and have experienced a weighted average decline in DSC of 33% since issuance. The seven loans that are not credit concerns have mitigating factors that offset S&P's concern with the low DSC; some of the collateral properties have seen improvements in occupancy and some have structural features that mitigate the low coverage. The top 10 exposures secured by real estate have an aggregate principal balance of $881.9 million (37%) and a weighted average DSC of 1.43x, up from 1.28x at issuance. This calculation includes additional debt service for six of the top 10 exposures that have initial interest-only periods and did not begin to fully amortize in 2007. One of the top 10 exposures is on the master servicer's watchlist. Standard & Poor's reviewed the property inspection reports provided by Midland for the assets underlying the top 10 exposures. Four were characterized as "excellent" and the rest were characterized as "good." The credit characteristics of Decoration & Design Building, Sandalwood Crossed Portfolio, Valley Forge Convention Plaza, Marriott Resort Clearwater Beach on Sand Key, and 4 Park Avenue are consistent with those of investment-grade obligations. Standard & Poor's adjusted values for these loans are comparable to their levels at issuance. Midland reported a watchlist of 21 loans totaling $291.1 million (12%). The largest loan on the watchlist, and the seventh-largest loan in the pool, Decoration & Design Building ($100 million, 4%), is secured by the leasehold interest in a 589,387-sq.-ft. design center located at 979 Third Avenue in Manhattan. The loan is on the watchlist because the borrower failed to submit quarterly financial statements, which violated the reporting covenant in the loan agreement. At year-end 2007, the loan reported a DSC of 2.89x and occupancy was 97%. The third-largest loan, the Bon-Ton Department Stores Portfolio ($124.7 million, 5%), is not on Midland's watchlist but has not submitted financial information since securitization. The loan is secured by 11 single-tenant retail properties and one warehouse facility encompassing a total of 2,003,186 sq. ft. located throughout Illinois, Wisconsin, North Minnesota, Indiana, Michigan, and Ohio. The retail stores are operated as Boston Stores, Herberger's, Carson Pirie Scott, Elder-Beerman, and Younker's, which are all operated by the sponsor of the loan, Bon-Ton stores. The remaining loans are on the watchlist primarily because of low occupancy or a decline in DSC since issuance. Standard & Poor's identified six collateral properties in areas affected by Hurricane Ike with a total balance of $47.5 million (2%). Midland notified S&P that two properties ($23.7 million) experienced minimal damages but could not confirm whether the other four properties were damaged. Three ($18.1 million) of the four properties appear to have sufficient insurance coverage. Standard & Poor's stressed the loans on the watchlist and the other loans with credit issues as part of its analysis. The resultant credit enhancement levels adequately support the lowered and affirmed ratings. Ratings Affirmed COMM 2006-C7 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.58 A-2 AAA 30.58 A-3 AAA 30.58 A-AB AAA 30.58 A-4 AAA 30.58 A-1A AAA 30.58 A-M AAA 20.38 A-J AAA 12.49 B AA 10.32 C AA- 9.30 D A 7.77 E A- 6.88 F BBB+ 5.61 G BBB 4.59 H BBB- 3.31 J BB+ 2.80 K BB 2.55 L BB- 2.16 M B+ 2.04 N B 1.78 O B- 1.40 X AAA N/A N/A -- Not applicable. CONSTAR INT'L: Highly Leveraged Capital Cues S&P to Junk Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Constar International Inc. to 'CCC+' from 'B-'. The outlook is negative. At the same time, Standard & Poor's lowered its rating on the company's $220 million senior secured notes to 'CCC+' from 'B-' and its rating on the $175 million senior subordinated notes to 'CCC-' from 'CCC'. The recovery ratings remain unchanged. "The downgrade reflects the company's highly leveraged capital structure; our expectation for weak operating results in the next few quarters, which will forestall improvement to key credit metrics; somewhat reduced liquidity; and the uncertainty related to the new contract with PepsiCo Inc.," said Standard & Poor's credit analyst Henry Fukuchi. Philadelphia-based Constar anticipates renewing the Pepsi contract in the near future, but the timing and exact terms are uncertain. S&P believes that even with the renewal Constar's financial profile will remain weak. The new contract will require Constar to make significant restructurings, but it will position the company for improved operating results in 2009. S&P expects that Pepsi will renew its contract with the company. Under Constar's revolving credit agreement, if the cold fill Pepsi contract is not renewed, the material adverse change would constitute a default and the lenders could accelerate payment of this debt. An acceleration of the revolving credit facility would permit the acceleration of the secured notes and the subordinated notes. Operating results for the first half of 2008 were subpar because of rising energy and material costs coupled with lower conventional volume. A significant portion of the volume decline was due to lost business, and further losses related to the continuing trend of water customers producing their own bottles. Moreover, Constar's single-serve polyethylene terephthalate packages continued to experience weaker demand because of lower sales to its beverage customers. Many of Constar's beverage customers, particularly distributors to convenience stores and gas stations, have experienced lower demand owing to high gas prices, higher PET prices, and the impact the economy is having on discretionary spending. The rating on Constar reflects the company's highly leveraged financial profile, low cash flow generation, weak margins, and vulnerable business profile. Constar manufactures blow-molded containers, mainly PET containers for carbonated beverages and water. The company operates in the fragmented and highly competitive rigid plastic packaging industry. CREDIT SUISSE: S&P Trims Ratings on Six Classes of Certificates --------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on six classes of commercial mortgage pass-through certificates from Credit Suisse Commercial Mortgage Trust Series 2006-C1 and removed them from CreditWatch with negative implications, where they were placed on Sept. 29, 2008. In addition, S&P affirmed its ratings on two classes and removed them from CreditWatch with negative implications. Concurrently, S&P affirmed its ratings on the remaining classes from this transaction. The lowered ratings reflect credit concerns with 30 of the 39 loans in the pool that reported debt service coverage below 1.0x. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. There are 39 loans in the pool, totaling $153.3 million (5.2%), that have a reported DSC lower than 1.0x. The loans are secured primarily by a variety of office, multifamily, and retail properties. The loans experienced an average decline in DSC of 45.8% since issuance. Of the 39 loans, Standard & Poor's has credit concerns with 30 (4.0%), most of which have experienced occupancy declines. The other nine loans had relatively low amounts of debt per sq. ft. or unit compared with other properties in the market. As of the Sept. 15, 2008, remittance report, the collateral pool consisted of 413 loans with an aggregate balance of $2.94 billion, compared with 417 loans with a balance of $3.00 billion at issuance. Loans secured by cooperative apartment properties secure 4.8% of the pool. As of the most current remittance report and excluding the specially serviced loans, Capmark Finance Inc. serviced 59.5% of the pool, KeyCorp Real Estate Capital Markets Inc. serviced 33.5% of the pool, and NCB FSB serviced 6.8% of the pool. Excluding the co-op loans, combined financial reporting for the pool is 89.6%. Seventy-eight percent of the servicer-provided information was full-year 2007 data. Based on this data and excluding co-op loans, Standard & Poor's calculated a weighted average DSC of 1.60x for the pool, up from 1.44x at issuance. To date, the trust has not experienced any losses. The top 10 loans have an aggregate outstanding pooled trust balance of $1.00 billion (34.0%) and a weighted average DSC of 1.58x, up from 1.53x at issuance. Standard & Poor's reviewed property inspections provided by the master servicer for all of the assets underlying the top 10 exposures. Five of the properties contained in the CWA and NEI portfolios were characterized as "fair," one property in the Lane portfolio was characterized as "excellent," and the remaining properties were characterized as "good." The credit characteristics of the 230 Park Avenue, St. Louis Galleria, and NEI Portfolio loans are consistent with those of investment-grade obligations. Details of these loans are: -- The largest loan in the pool, the 230 Park Avenue loan, has a balance of $280.0 million (9.5%). In addition, there is $285.0 million of mezzanine debt secured by a pledge of partnership interests in the borrowing entity. The loan is secured by The Helmsley Building, a 34-story office building totaling 1.24 million sq. ft. located on Park Avenue at 46th Street in New York City. The reported DSC was 1.72x as of year-end 2007, and occupancy was 90.1% as of June 2008, compared with a DSC of 1.40x and occupancy of 88.7% at issuance. Standard & Poor's adjusted net cash flow for this loan is comparable to its level at issuance. -- The second-largest loan in the pool, the St. Louis Galleria loan, has a trust balance of $171.4 million (5.8%) and a whole-loan balance of $242.6 million. The loan is collateralized by 447,231 sq. ft. of a 1.16 million-sq.-ft. regional mall in St. Louis, Missuori. Collateral occupancy was 96.3% as of the June 2008 rent roll, and the year-end 2007 DSC was 2.06x. Standard & Poor's adjusted NCF has increased 12.1% since issuance. -- The fifth-largest exposure in the pool, the NEI Portfolio loan, has a balance of $70.0 million (2.4%). The loan is collateralized by a portfolio of 26 cross-collateralized and cross-defaulted properties consisting of office (39.4% of the allocated loan balance, nine properties), retail (26.4%, five), truck parking (15.6%, three), multifamily (10.3%, six), and industrial (8.3%, three) located in California (13 properties), Virginia (two), Florida (three), Connecticut (four), Arizona (two), Ohio (one), and Texas (one). Collateral occupancy was 91.3% as of May 2008, and the year-end 2007 DSC was 2.60x, compared with a DSC of 2.61x and occupancy of 94.5% at issuance. Standard & Poor's adjusted value for this loan is comparable to its level at issuance. The three servicers reported a watchlist of 69 loans with an aggregate outstanding balance of $325.3 million (11.1%). The largest loan on the watchlist and the eighth-largest loan in the pool is the Lane Portfolio loan. The loan is secured by three hotels: a 219-room Doubletree in Annapolis, Maryland; a 224-room Hilton in Kentwood, Michigan; and a 146-room Courtyard by Marriott in Durham, North Carolina. The loan appears on the watchlist due to a decline in DSC. As of Dec. 31, 2007, the property reported a DSC of 1.10x, compared to a DSC of 1.43x at issuance. The remaining loans are on the watchlist primarily because of low occupancy or a decline in DSC since issuance. As of the Sept. 15, 2008, remittance report, there were two loans totaling $4.7 million (0.2%) with the special servicer, Helios AMC LLC. Subsequent to the reporting date, 116-118 North York ($2.8 million, 0.1%) was transferred to Helios. The property is a 17,608-sq.-ft. mixed-use office and retail building in Elmhurst, Illinois. Per a recent conversation with Helios, the loan was transferred to special servicing after the Securities and Exchange Commission filed charges against the principal of the borrower and others. A federal court subsequently ordered the appointment of a receiver over the principal's assets, including the collateral property. Given that the loan was newly transferred to special servicing, Standard & Poor's will continue to monitor the loan. Details of the other two specially serviced loans are: -- The Las Villas Apartments loan ($2.8 million) is secured by a 140-unit multifamily property built in 1968 in Houston, Texas. The loan was transferred to the special servicer in April 2008 due to the borrower's failure to maintain the property. In June 2006, there was a flood in Houston and half the units sustained damage. The borrower received some insurance proceeds from a federal flood program, but the borrower's private insurer did not pay on the claim. The borrower and the private insurer are currently in litigation concerning the claim. After the flood, the borrower was able to repair the units, and occupancy had risen to 87.7% as of June 2008. However, about 30 units at the property were damaged as a result of Hurricane Ike. The property had windstorm and flood insurance coverage at the time of the event, and the borrower is in the process of making an insurance claim. In the meantime, he plans to bring the damaged units back on line by paying out-of-pocket while waiting for the insurance proceeds. The borrower is current on payments. The most recent appraisal, from April 2008, valued the property at $2.6 million. As Ike was a recent event, Standard & Poor's is continuing to monitor this loan. S&P does not expect a loss at this time. The Leschi Park Professional Building loan ($1.9 million) is secured by a 10,000-sq.-ft. office building built in 1998 in Seattle, Washington. The loan was transferred to the special servicer in December 2007 due to nonpayment. The loan experienced an additional default when the borrower filed for Chapter 11 bankruptcy protection. After the Chapter 11 filing, the principal of the borrower diverted rents from the property. The bankruptcy court appointed a trustee to deal with the disposition of the property. The most recent appraisal, from May 2008, valued the property at $3.17 million. Standard & Poor's expects a loss upon the liquidation of this asset. Standard & Poor's identified 14 properties (2.2%) in areas affected by Hurricane Ike. All 14 properties had windstorm and flood insurance coverage at the time of the event. Four properties (0.46%) did not sustain damage. One property (0.04%) experienced minor damage, which has already been repaired. The Las Villas Apartments property (0.10%), which is in special servicing, suffered damage as a result of the storm. S&P is still awaiting information on the remaining eight properties (1.6%). Standard & Poor's stressed the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered and Removed from Creditwatch Negative Credit Suisse Commercial Mortgage Trust Series 2006-C1 Commercial mortgage pass-through certificates Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ L BB BB+/Watch Neg 2.43% M BB- BB/Watch Neg 2.04% N B BB-/Watch Neg 1.66% O B- B+/Watch Neg 1.53% P CCC+ B/Watch Neg 1.40% Q CCC B-/Watch Neg 1.15$ Ratings Affirmed and Removed from Creditwatch Negative Credit Suisse Commercial Mortgage Trust Series 2006-C1 Commercial mortgage pass-through certificates Class To From Credit enhancement ----- -- ---- ------------------ J BBB BBB/Watch Neg 4.21% K BBB- BBB-/Watch Neg 2.94% Ratings Affirmed Credit Suisse Commercial Mortgage Trust Series 2006-C1 Commercial mortgage pass-through certificates Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.64% A-2 AAA 30.64% A-3 AAA 30.64% A-AB AAA 30.64% A-4 AAA 30.64% A-1-A AAA 30.64% A-M AAA 20.42% A-J AAA 12.38% B AA+ 11.74% C AA 10.47% D AA- 9.32% E A+ 8.55% F A 7.40% G A- 6.38% H BBB+ 5.23% A-X AAA N/A A-Y AAA N/A N/A -- Not applicable. CREDIT SUISSE: S&P Junks Rating on Class O Certificates ------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on two classes of commercial mortgage pass-through certificates from Credit Suisse Commercial Mortgage Trust Series 2006-C2. Concurrently, S&P affirmed its ratings on 18 other classes from this transaction. The downgrades reflect credit concerns with nine ($33.1 million, 2%) of the 14 loans ($271.4 million, 19%) that have reported debt service coverage of less than 1.0x. The affirmed ratings reflect credit enhancement levels that provide adequate support through various stress scenarios. The 14 loans are secured by a variety of multifamily, retail, hotel, office, manufactured housing, and self-storage properties, have an average balance of $19.4 million, and have experienced an average decline in DSC of 36% since issuance. Of these, five loans were not credit concerns because of improved occupancies and relatively low leverage. The nine loans that are credit concerns are secured by retail, hotel, multifamily, office, manufacturing housing, and self-storage properties. These properties have experienced a combination of declining occupancies, deteriorating market conditions, and higher operating expenses. As of the Sept. 17, 2008, remittance report, the collateral pool consisted of 193 loans with an aggregate balance of $1.419 billion, compared with the same number of loans with a balance of $1.439 billion at issuance. The master servicer, Wachovia Bank N.A., reported financial information for 97% of the pool. Ninety percent of the servicer-provided information was full-year 2007 data. Standard & Poor's calculated a weighted average DSC of 1.28x for the pool, compared with 1.33x at issuance. There are no delinquent loans and the trust has not experienced losses to date. The top 10 loan exposures secured by real estate have an aggregate outstanding balance of $475.8 million (34%) and a weighted average DSC of 1.08x, compared with 1.35x at issuance. The largest, third-largest, and eighth-largest loans are on the master servicer's watchlist. Standard & Poor's reviewed property inspections provided by Wachovia for all of the assets underlying the top 10 exposures. All of the properties were characterized as "good." One loan has credit characteristics consistent with investment-grade rated obligations. The Andover House loan ($25 million, 2%) is the seventh-largest loan in the pool and is secured by a leasehold interest in a 171-unit, 12-story multifamily building built in 2004 and located in Washington, D.C. For the year ended Dec. 31, 2007, DSC for this loan was 1.99x and occupancy was 96.5%. Standard & Poor's adjusted value for this loan is down 5% since issuance. Wachovia reported a watch list of 28 loans with an aggregate outstanding balance of $341.4 million (24%). --- The Babcock & Brown FX1 loan ($157.4 million, 11%) is the largest loan on the watch list and the largest loan in the pool. The loan is secured by 13 multifamily properties totaling 4,990 units located in three states, Texas, South Carolina, and Alabama. The master servicer placed this loan on the watch list because of deferred maintenance. -- The Fortunoff Portfolio loan ($71.5 million, 5%) is the second-largest loan on the watchlist and the second-largest loan in the pool. The loan is secured by a fee and leasehold interest in a single-tenant retail property in Westbury, New York, and the leasehold interest in a single-tenant property in Woodbridge, New Jersey. The master servicer placed this loan on the watchlist because the DSC fell below 1.10x. For the six months ended June 30, 2008, the servicer reported a DSC of 0.84x. -- The Parc at Duluth loan ($24.5 million; 2%) is the third- largest loan on the watchlist and the eighth-largest loan in the pool. The loan is secured by a senior living facility built in 2003 and consisting of 165 units situated on approximately 8.43 acres in Duluth, Georgia. The master servicer placed this loan on the watchlist because the DSC fell below 1.10x. For the six months ended June 30, 2008, the servicer reported a DSC of 0.97x. Standard & Poor's identified 13 collateral properties ($147.1 million; 10%) in areas affected by Hurricane Ike. Of the 13 properties, 11 are covered by flood insurance, and all 13 are covered by wind/hail insurance. Wachovia could not confirm if the properties were damaged. Standard & Poor's stressed some of the loans on the watchlist, along with other loans with credit issues, as part of its pool analysis. The resultant credit enhancement levels support the lowered and affirmed ratings. Ratings Lowered Credit Suisse Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2006-C2 Rating ------ Class To From Credit enhancement ----- -- ---- ------------------ N B- B 1.78% O CCC+ B- 1.39% Ratings Affirmed Credit Suisse Commercial Mortgage Trust Commercial mortgage pass-through certificates series 2006-C2 Class Rating Credit enhancement ----- ------ ------------------ A-1 AAA 30.43% A-2 AAA 30.43% A-3 AAA 30.43% A-1A AAA 30.43% A-M AAA 20.29% A-J AAA 13.19% B AA 11.03% C AA- 10.14% D A 8.49% E A- 7.23% F BBB+ 6.09% G BBB 4.69% H BBB- 3.55% J BB+ 3.17% K BB 2.79% L BB- 2.41% M B+ 2.28% A-X AAA N/A N/A -- Not applicable. CRYSTAL RIVER: S&P Lowers Ratings on Four Classes of Trusts ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on four classes and affirmed its ratings on six classes from Crystal River Resecuritization 2006-1 Ltd. Concurrently, S&P removed its ratings on nine of these classes from CreditWatch with negative implications, where they were placed on Sept. 29, 2008. The lowered ratings follow the downgrades of six classes of commercial mortgage-backed securities from Credit Suisse Commercial Mortgage Trust Series 2006-C1. Five of these downgraded classes ($33.1 million, 8.5%) and one affirmed class from CSCMT 2006-C1 serve as collateral in Crystal River 2006-1. According to the trustee report dated Sept. 22, 2008, the transaction's current assets include 71 classes ($390.5 million, 100%) of CMBS pass-through certificates from 32 distinct transactions issued between 2002 and 2007. While none of the CMBS assets have sustained any losses to date, first-loss positions currently represent $37.7 million of the asset pool. The following CMBS transactions represent asset concentrations of 10% or more of total assets: -- Classes K, L, M, N, O, P, and Q ($51.8 million, 13%) from Credit Suisse Commercial Mortgage Trust Series 2006-C4; -- Classes K, L, M, N, O, and Q ($47.2 million, 12%) from CSCMT 2006-C1; and -- Classes H, J, K, L, M, N, O, and P ($46.7 million, 12%) from Bear Stearns Commercial Mortgage Securities Trust 2006-PWR13. S&P's analysis indicates that the current asset pool for Crystal River 2006-1 exhibits weighted average credit characteristics consistent with 'BB-' rated obligations. Excluding the first-loss CMBS assets, S&P's analysis indicates that the current asset pool exhibits credit characteristics consistent with 'BB' rated obligations. Standard & Poor's rates $338.3 million (87%) of the assets. S&P's analysis also considers the interest reserve account, which serves to protect the interest payments to class A and has a current balance of $1 million. Standard & Poor's analysis of the transaction supports the lowered and affirmed ratings. Ratings Lowered and Removed from Creditwatch Negative Crystal River Resecuritization 2006-1 Ltd. Commercial mortgage-related securities Rating ------ Class To From ----- -- ---- D BB+ BBB-/Watch Neg F BB- BB/Watch Neg G B+ BB-/Watch Neg J CCC+ B-/Watch Neg Ratings Affirmed and Removed from Creditwatch Negative Crystal River Resecuritization 2006-1 Ltd. Commercial mortgage-related securities Rating ------ Class To From ----- -- ---- A AA AA/Watch Neg B A- A-/Watch Neg C BBB BBB/Watch Neg E BB+ BB+/Watch Neg H B+ B+/Watch Neg Rating Affirmed Crystal River Resecuritization 2006-1 Ltd. Commercial mortgage-related securities Class Rating ----- ------ K CCC- DANIEL HALL: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: Daniel Wayne Hall 7044 Royal Lane Dallas, TX 75230 Bankruptcy Case No.: 08-35130 Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Texas (Dallas) Debtor's Counsel: Michelle E. Shriro, Esq. mshriro@singerlevick.com Singer & Levick, P.C. 16200 Addison Rd., Suite 140 Addison, TX 75001 Tel: (972) 380-5533 Fax: (972)380-5748 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. D'ESPRIT INC: Files Schedules of Assets and Liabilities ------------------------------------------------------- D'Esprit Inc. delivered to the United States Bankruptcy Court for the District of Arizona its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ------- ----------- A. Real Property $2,600,000 B. Personal Property $411,543 C. Property Claimed as Exempt D. Creditors Holding $2,180,000 Secured Claims E. Creditors Holding $4,978 Unsecured Priority Claims F. Creditors Holding $659,391 Unsecured Nonpriority Claims ------- ------------ TOTAL $3,011,543 $2,844,370 Headquartered in Tucson, Arizona, D'Esprit Inc. operates a real estate business. The company filed for Chapter 11 protection on Sept. 3, 2008 (Bankr. D. Ariz. Case No. 08-1161). EXAERIS INC: Wants Controlling Shareholder Held in Contempt ----------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Exaeris, Inc., and affiliate Inyx USA, Ltd., asked the U.S. Bankruptcy Court for the District of Delaware on Oct. 6, 2008, to hold controlling shareholder Jack Kachkar in contempt for not completing the acquisition of the Debtors' assets by Sept. 3. As reported in the Troubled Company Reporter on March 7, 2008, under the proposed plan, the Debtors' assets were to be sold to Mr. Kachkar in exchange for a waiver of the $2.1 million postpetition financing the Debtors' owe him. Mr. Kachkar, according to the report, filed papers saying he is having trouble with the "funding source." The U.S. Trustee wants the Debtors' cases converted to Chapter 7 liquidation, according to the report. About Inyx USA and Exaeris Headquartered in Exton, Pennsylvania, Exaeris Inc. -- http://www.exaeris.com/-- focuses on the strategic commercialization of niche or enhanced pharmaceutical products, marketing and promotion activities. Inyx USA Ltd. and Exaeris are wholly owned subsidiaries of Inyx, Inc. (OTC:IYXI) -- http://www.inyxinc.com/-- a specialty pharmaceutical company. Exaeris Inc. filed for chapter 11 protection on July 2, 2007 (Bankr. D. Del. Case Nos. 07-10887). Anthony M. Saccullo, Esq., at Fox Rothschild, L.L.P., in Wilmington, Delaware, represents the Debtor. When Exaeris filed for protection from its creditors, Exaeris estimated its assets were less than $10,000 but debts were between $1 million and $100 million. In Court documents filed by Jack Kachkar, CEO of Inyx, Inc., Inyx USA is indebted to Westernbank Puerto Rico in the approximate amount of $35 million and secured by a first-priority lien in substantially all of Inyx USA's assets. Exaeris has in excess of $5 million in prepetition unsecured obligations outstanding to various creditors. Ashton Pharmaceuticals and Inyx Pharma, the Debtors' UK affiliates, were placed into an involuntary administration on June 29, 2007. Ernst & Young was appointed by the UK court as administrators. FOCUS ENHANCEMENTS: To Cut Workforce by 45 Employees ---------------------------------------------------- Focus Enhancements Inc. disclosed in a Securities and Exchange Commission filing that it has taken action to reduce its worldwide workforce by approximately 45 employees, primarily associated with its Ultra Wideband development. The Company expects its worldwide workforce to be approximately 100 employees by Oct. 31, 2008. Headquartered in Campbell, California, Focus Enhancements, Inc. (NASDAQ:FCSE) -- http://www.videonics.com/-- designs video and wireless AV technologies. Its semiconductor group develops wireless IC chip sets based on WiMedia UWB and 802.11a standards, and design as well as markets portable ICs to the video convergence, portable media, navigation systems and smartphone markets. The company's system group develops video products for the digital media markets, with customers in the broadcast, video production, digital signage and digital asset management markets. Focus Enhancements, Inc. filed for chapter 11 protection on Sept. 16, 2008, (Bankr. N.D. C. Case No. 08-55216) Gregory A. Rougeau, Esq. at Law Offices of Manasian and Rougeau represents the Debtor. The Debtor has total assets of $9,695,000 and total debts of $37,429,000. FRED LEIGHTON: Sues Merrill to Void Security Interest --------------------------------------------------------- Bill Rochelle of Bloomberg News reports that Fred Leighton Holding, Inc., and its debtor-affiliates and secured creditor Merrill Lynch & Co. sued each other on Oct. 1 and 2, 2008, respectively. The Debtors, according to the report, argue that Merrill Lynch's security interests were given in a fraudulent transfer and are void. Other alleged misdeeds the Debtors claimed, according to the report, include breach of contract, negligence and libel, and justifying subordinating Merrill's claims to the interests of stockholders. Merrill Lynch then responded with its own complaint, giving its version of the facts, and asking the U.S. Bankruptcy Court for the Southern District of New York to declare that its liens are valid and enforceable, according to the report. The papers together total more than 120 pages. Last month, the Debtors' Official Committee of Unsecured Creditors sought more time to negotiate with Merrill Lynch before filing what it called "compelling challenges" to its claims. About Fred Leighton Fred Leighton Holding, Inc. -- http://www.fredleighton.com/-- is a New York-based jewelry retailer owned by Ralph O. Emerian. Fred Leighton has decked countless red-carpet-dwellers in diamonds, including Sarah Jessica Parker, Nicole Kidman, and Catherine Zeta- Jones. It specializes in vintage jewelry from the 18th and 20th centuries, including antique cushion-cut diamonds and antique and estate brooches. It also produces Fred Leighton signature collection that combines past aura and the present materials and craftmanship. The Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on April 15, 2008 (Bankr. S.D.N.Y., Case No. 08-11363). Joshua Joseph Angel, Esq., and Frederick E. Schmidt, Esq., at Herrick, Feinstein LLP, in New York, represent the Debtors. An Official Committee of Unsecured Creditors has been appointed in these cases. The Committee's counsels are Michael Z. Brownstein, Esq., and Rocco A. Cavaliere, Esq., at Blank Rome LLP. No trustee or examiner has been appointed in the cases. The Debtors listed total assets of $128,551,467 and total liabilities of $134,814,367 in their schedules. FREESCALE SEMICONDUCTOR: Adopts 2008 Incentive Performance Plan --------------------------------------------------------------- Freescale Semiconductor, Inc. disclosed in a Securities and Exchange Commission filing that the Compensation and Leadership Committee of its Board of Directors has adopted the Freescale Semiconductor, Inc. 2008 Incentive Performance Plan. The purpose of the Plan is to reinforce corporate, organizational and business-development goals, to promote the achievement of short-term and long-term financial and other business objectives, and to reward the performance of individual employees in fulfilling their personal responsibilities for long-range achievements. The Plan will be administered by the Committee. Subject to the terms of the Plan, the Committee determines in its sole discretion the persons who are to receive awards, the terms and conditions of each award and the amount payable under each award. Awards may be granted to officers and other employees of the Company. Performance periods, performance factors and performance goals for awards are determined by the Committee. Award levels for any performance period may be expressed as a dollar amount or as a percentage of the participant's earnings or other measure as determined by the Committee. Except as otherwise determined by the Committee, upon a change in control, all performance goals will be deemed achieved at target levels and all other terms and conditions met; all performance cash awards will be paid out as promptly as practicable; all annual management incentive awards will be paid out based on the consolidated operating earnings of the immediately preceding year or any other method of payment as determined by the Committee. The Board or the Committee may alter, amend, suspend or terminate the Plan. However, an amendment that affects adversely the rights of a participant under an award granted under the Plan requires the consent of the participant. A copy of the 2008 Incentive Performance Plan is available for free at http://researcharchives.com/t/s?3374 About Freescale Semiconductor Headquartered in Austin, Texas, Freescale Semiconductor Inc. (NYSE: FSL) -- http://www.freescale.com/ -- designs and manufactures embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The company has design, research and development, manufacturing or sales operations in more than 30 countries. * * * As reported in the Troubled Company Reporter on Feb. 15, 2008, Fitch Ratings revised the rating outlook on Freescale Semiconductor Inc. to negative from stable and affirmed these ratings: (i) issuer default rating at 'B+'; (ii) senior secured bank revolving credit facility at 'BB+/RR1'; (iii) senior secured term loan at 'BB+/RR1'; (iv) senior unsecured notes at 'B/RR5'; and (v) senior subordinated notes at 'CCC+/RR6'. FREESCALE SEMICONDUCTOR: S&P Puts 'B+' Rating Under Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B+' corporate credit and other ratings on Austin, Texas-based Freescale Semiconductor Inc. on CreditWatch with negative implications. "The CreditWatch follows the company's announcement that it is exploring options to divest all or part of its cellular handset chipset products business," noted Standard & Poor's credit analyst Lucy Patricola. In addition, the company announced that it has updated its arrangement with Motorola Inc., eliminating their remaining minimum purchase commitments in exchange for unspecified consideration. "Freescale's cellular business has been under significant pressure, characterized by declining volumes, reflecting the shrinking market share of key customer Motorola, and consolidation of competitors," added Ms. Patricola. "The company has been challenged to grow its market presence to attain sufficient scale to defray research and development investments that are necessary to remain competitive." Further, the elimination of Motorola's remaining minimum purchase commitments is likely to dampen wireless revenue in the near to mid term. Standard & Poor's will meet with management to review the details of the plans to divest the business, the impact of the modification of the Motorola arrangement and future prospects for the balance of Freescale's portfolio to determine the final impact on the rating. G&G/PENINSULA LP: Case Summary & Six Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: G&G/Peninsula, LP 3101 Welton Cliff Cedar Park, TX 78613 Bankruptcy Case No.: 08-11913 Chapter 11 Petition Date: October 6, 2008 Court: Western District of Texas (Austin) Debtor's Counsel: Mark Curtis Taylor, Esq. markt@hts-law.com Hohmann & Taube LLP 100 Congress Ave., Suite 1800 Austin, TX 78701 Tel: (512) 472-5997 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $50 million Debtor's Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Loomis Partners, Inc. Engineering $16,581 Attn: Amy Cantu 3101 Bee Cave Road #100 Austin, Texas 78746 Pedernales Electric Co-op Utilities $5,206 Attn: Accounting P.O. Box 1 Johnson City, Texas 78636 City of Lago Vista Utilities $1,122 Attn: Accounting P.O. Box 4727 Lago Vista, Texas 78645 Armbrust & Brown, LLP Legal $401 Visser, Shidlofsky, LLP Legal $250 D.B. Consulting, Inc. Accounting $78 GATEWAY ETHANOL: Files for Bankruptcy Protection ------------------------------------------------ Tiffany Kary of Bloomberg News reports that Gateway Ethanol, LLC, which is owned by Orion Ethanol, Inc., filed for Chapter 11 bankruptcy protection with U.S. Bankruptcy Court for the District of Kansas (Case No. 08-2579) on Oct. 5, 2008, without giving a reason. The Debtor also asked for permission from the Court to pay a total of 11 employees, according to the report. The Debtor's largest unsecured creditors include Cargill Inc., with a claim of $7.5 million, Noble Americas Corp., with a claim of $4 million, and Indeck Power Equipment Co., with a claim of almost $1 million. In March, the Debtor's plant was operating at less than full capacity because of equipment damage caused by a December ice storm, the Hutchinson News in Kansas reported. The Pratt Tribune reported separately that the same plant was temporarily shut down on high corn costs. Pratt, Kansas-based Gateway Ethanol, LLC, operates an ethanol plant that has a capacity of 55 million gallons a year, according to Orion Ethanol's web site. Laurence M. Frazen, Esq., Megan J. Redmond, Esq., and Tammee E. McVey, Esq., at Bryan Cave, LLP, represent the Debtors in its restructuring efforts. In its filing, the Debtor listed estimated assets between $50 million to $100 million and estimated debts between $50 million to $100 million. GATEWAY ETHANOL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Gateway Ethanol, L.L.C. 10333 NE 30th Street Pratt, KS 67124 Bankruptcy Case No.: 08-22579 Type of Business: The Debtor operates an ethanol plant. Chapter 11 Petition Date: October 5, 2008 Court: District of Kansas (Kansas City) Judge: Dale L. Somers Debtor's Counsel: Laurence M. Frazen, Esq. lmfrazen@bryancave.com Megan J Redmond, Esq. megan.redmond@bryancave.com Tammee E McVey, Esq. temcvey@bryancave.com Bryan Cave, LLP 3500 One Kansas City Place 1200 Main Street Kansas City, MO 64105 Tel: (816) 374-3200 Estimated Assets: $50 million to $100 million Estimated Debts: $50 million to $100 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cargill Inc Trade Debt $7,379,326 P O Box 9300 MS 19 Minneapolis, MN 55440-9300 Attn: Dennis Inman - Grain Tel: (952) 742-2501 Fax: (952) 742-7313 -- or -- Rob Robuck - Dry Division Tel: (952) 742-4457 Fax: (952) 249-4361 Noble Americas Corp. Loan and $3,981,282 333 Ludlow Street, Suite 1230 Trade Debt Stamford, CT 06902 Attn: Richard Allen DiDonna Tel: (203) 363-7928 Fax: (203) 324-8565 Indeck Power Equipment Co. Trade Debt $954,228 1111 S Willis Ave Wheeling, IL 60090 Attn: Diane Tinetti Tel: (847) 541-8300 Fax: (847) 541-9984 Trinity Industries Leasing Trade Debt $709,305 2525 Stemmons Freeway Dallas, TX 75207 Attn: Tom Jardine Tel: (800) 227-8844 Fax: (214) 589-8501 Fax Victory Energy Trade Debt $281,957 1070 E 126 St North Collinsville, OK 74021 Attn: John Viskup Tel: (918) 274-0023 Fax: (918) 274-0059 Union Pacific Railroad Trade Debt $64,390 Jeff Spencer & Associates Trade Debt $50,049 LLC John Deere Credit Trade Debt $37,013 Indeck Keystone Energy Trade Debt $31,950 City of Pratt, Kansas Trade Debt $28,761 Trace Environmental Trade Debt $27,087 RC Holdings-Pratt, LLC Real Property $20,800 Lease R & J Material Handling Trade Debt $20,715 Ascendant Partners, Inc. Professional $10,383 Services White Barron, LLC Trade Debt $8,100 Lawson Products Trade Debt $7,616 Stull Law Office, P.A. Professional $6,778 Services Stanion Wholesale Electric Trade Debt $5,416 Co. IBM Corporation Trade Debt $4,644 Hammel Scale Co, Inc. Trade Debt $3,567 GENERAL GROWTH: S&P Downgrades Ratings to 'B+'; On Watch Neg ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on General Growth Properties Inc. to 'B+' from 'BB'. At the same time, it lowered the rating on the company's unsecured debt to 'B' from 'BB-', affecting roughly $5 billion of securities. The recovery rating assigned to the company's unsecured debt remains unchanged at '5'. All of S&P's General Growth-related ratings remain on CreditWatch with negative implications. General Growth has roughly $1.2 billion of debt that comes due through the end of 2008, and the company lacks a clearly articulated plan to address these debt maturities. In light of the recent departure of the company's chief financial officer and volatility in the capital markets, S&P believes that refinancing will be a challenge. In S&P's view, the company may need to be meaningfully recapitalized in the medium term, given its current high leverage levels and roughly $7 billion of additional maturities in 2009 and 2010. Chicago-based General Growth is one of the nation's largest owners and operators of regional malls, with a portfolio of over 200 shopping centers in 44 states. On June 30, 2008, the company's portfolio was 93% occupied and same-property net operating income had increased a healthy 3.9% during the first half of the year. However, the company is highly leveraged with debt and preferred stock totaling 91% of capital on a book-value basis. The REIT recently announced that its chief financial officer had stepped down and that it would suspend its common dividend, a move that will conserve approximately $160 million of cash in the fourth quarter. However, ongoing volatility in the debt and equity capital markets exacerbates the potential difficulty that the company may have in raising capital, particularly equity capital, in the near term. General Growth is reviewing alternative capital strategies. It should be noted that a significant component of the company's maturing debt is collateralized by assets such as the Fashion Show Mall on the Las Vegas Strip. The high-quality and stable cash flow generated by several of these properties should make them attractive to lenders; however, S&P believes the cost to refinance these properties will be higher in the current environment. S&P's ratings on General Growth will remain on CreditWatch until the company articulates a strategy to permanently address pressing capital needs. S&P would remove its ratings from CreditWatch and consider a stable outlook if the company repays or successfully refinances near-term maturities. Alternatively, it may lower our ratings further if the company does not implement a refinancing strategy in a timely fashion or if the REIT elects to relinquish core assets. RATINGS LOWERED AND REMAINING ON CREDITWATCH NEGATIVE General Growth Properties Inc./The Rouse Co. Rating To From Corporate credit B+/Watch Neg/-- BB/Watch Neg/-- Unsecured debt B/Watch Neg/-- BB-/Watch Neg/-- RECOVERY RATING UNCHANGED General Growth Properties Inc./The Rouse Co. Recovery rating 5 GENERAL MOTORS: Opel to Cut Production in Europe by 40,000 Cars --------------------------------------------------------------- Dow Jones Newswires reports that General Motors Corp.'s Opel brand will cut production in Europe by 40,000 cars by year-end due to declining demand. Dow Jones relates that an Opel spokesperson said that the company will lessen production at its German plants in Bochum and Eisenach to not build up inventory, which would hurt prices for new cars. According to Business.techwhack.com, GM already shut down the Bochum factory, which would remain down until Oct. 13. GM said that production at their plant in Eisenach would stop from Oct. 13 for three weeks, Business.techwhack.com states. The spokesperson, according to Dow Jones, said that GM Europe is also discussing about reducing production at its U.K. and Spain plants. The Opel plant in Gliwice, Poland, will stop production for 20 days, reducing production by 15,000 cars at the Gliwice plant, Przemyslaw Byszewski told TVN CNBC television. Dow Jones quoted Mr. Byszewski as saying, "Our daily output has recently averaged 700 units a day and we're talking about a 20-day shutdown." 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. 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. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. GENERAL MOTORS: Seeks to Refinance Detroit Headquarters ------------------------------------------------------- Reuters reports that General Motors Corp. is asking the Detroit city pension officials' support to refinance its Detroit headquarters in Renaissance Center. GM had been leasing the Renaissance Center since 1996. In May 2008, GM bought the building for $625 million. GM took out a $626 million mortgage to purchase the building and pay for millions worth of improvements, the Associated Press relates. GM paid off the initial mortgage when it expired in May, and since then has been looking to raise cash with another financing deal, the AP says, citing John Blanchard, executive director of GM worldwide real estate. Reuters relates that GM spokesperson Tom Wilkinson said on Tuesday that the company is meeting with Detroit's police and fire pension board this week to seek financial assistance. Reuters quoted Mr. Wilkinson as saying, "We have been looking for options to monetize the asset. This particular deal is probably a long shot because the deal we'd like to do on the building is way more than they would typically have to invest." GM would consider a sale of the building, Reuters says, citing Mr. Wilkinson. According to the report, Mr. Wilkinson said, "We might do a sale and lease back," but GM won't leave the building. Tom Krisher at The Associated Press reports that GM said it is looking to take out a mortgage on the headquarters as it continues efforts to raise cash. Reuters states that GM wants to cut $10 billion in costs to shore up cash and is readying asset sales. According to The AP, GM's top real estate executive said that GM will make a presentation on Thursday to the Detroit police and fire pension board to see if it might be interested in investing in the Renaissance Center, and will talk with the general employees' pension board. The AP says that John Blanchard, executive director of GM worldwide real estate, said in an interview, "We have equity that's built up in our global headquarters. We're just looking to tap into that. This is pretty normal financial management for an asset the size of a building like this." GM would try to borrow about $500 million with the Renaissance Center as collateral, The Detroit News relates. Mr. Blanchard said that GM will try to get the maximum amount of money out of the Renaissance Center as it can, but would prefer to retain ownership, The AP states. Mr. Blanchard that if the pension board deals don't work, GM will go to the credit markets, according to The AP. The AP reports that Paul Stewart, the police and fire pension board trustee, said he will decide on GM's proposal until he hears "GM's sales pitch." According to the report, Mr. Stewart said that the pension fund has $3.8 billion in assets, and pays out about $26 million each month in benefits. Mr. Stewart said that the fund must have a 7.8% return on its investments to pay its bills, the report 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. 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. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. GENERAL MOTORS: High Demand Cues Share Trading Blackout on Workers ------------------------------------------------------------------ General Motors Corporation disclosed in a Securities and Exchange Commission filing that on Sept. 30, 2008, it had suspended purchases of its common stock, par value $1-2/3 per share, by employees in GM's Savings-Stock Purchase Plan and the Personal Savings Plan. All purchases of Common Stock under the Plans have been suspended because the Plans have now issued all of their registered shares of Common Stock. This suspension is the result of recent unexpectedly high demand among the Plans' participants due to increased employee interest and a lower market price for the Common Stock. The demand significantly exceeded the usual volume and exhausted the supply of registered stock more quickly than the administrators of the Plans foresaw. Because of this, GM was not able to provide advance notice of the suspension of purchases of Common Stock under the Plans or of the trading blackout. This trading blackout begins immediately and will end when GM files with the Securities and Exchange Commission a registration statement registering additional shares. GM expects to file a registration statement with the SEC during the week of Nov. 9, 2008. Plan participants, other than directors and officers, are not prevented from selling Common Stock through the Plans, or buying or selling Common Stock outside the Plans, during the blackout period. Based on the provisions of the Plans, these participants may also at any time exchange shares in the Common Stock Fund for other investment options or change their contribution election. The contributions of participants currently directed to the GM Common Stock Fund, will be invested in the default fund for the Plan in which they participate, unless they provide new instructions. This means that, until the temporary suspension for Common Stock purchases is removed, that contributions to the S-SPP will be invested in the Pyramis Strategic Balanced Commingled Pool investment option and that contributions to the PSP will be Invested In the Pyramis Active Lifecycle Commingled Pool Investment option closest to the year that the participant will attain the age of 65. On Sept. 30, 2008, GM sent a notice to its directors and executive officers informing them that a blackout period had commenced. During the blackout period, GM's directors and executive officers will be prohibited from directly acquiring, disposing of or transferring any equity securities of GM acquired by them in connection with their service or employment with GM in those capacities. 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. 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. At June 30, 2008, the company's balance sheet showed total assets of $136.0 billion, total liabilities of $191.6 billion, and total stockholders' deficit of $56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of $15.4 billion over net sales and revenue of $38.1 billion, compared to a net income of $891.0 million over net sales and revenue of $46.6 billion for the same period last year. HAMIL CORPORATION: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: The Hamil Corporation 2128 Jackson Road Griffin, GA 30223 Bankruptcy Case No.: 08-12916 Type of Business: The Debtor offers industrial construction services. Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Georgia (Newnan) Debtor's Counsel: Scott B. Riddle, Esq. sbriddle@mindspring.com 945 East Paces Ferry Road Suite 2250 Resurgens Plaza Atlanta, GA 30326 Tel: (404) 815-0164 Fax: (404) 815-0165 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor did not file a list of 20 largest unsecured creditors. INTERSTATE BAKERIES: Plan Funding Commitments Pacts Approved ------------------------------------------------------------ The United States Bankruptcy Court for the Western District of Missouri authorized Interstate Bakeries Corporation and eight of its subsidiaries and affiliates to execute, deliver and implement: (1) the Equity Commitment Letter with IBC Investors I, LLC, under which, among other things: -- IBC Investors commits to purchase, on the effective date of a plan of reorganization, (i) 4,420,000 shares of New Common Stock for a purchase price of $44,200,000, and (ii) New Convertible Debt in the principal amount of $85,800,000 for a purchase price of $85,800,000; -- IBC will issue (i) shares of New Common Stock of the Reorganized Company, (ii) New Senior Secured Convertible Debt in the aggregate principal amount of $171,600,000, and (iii) warrants to purchase New Common Stock. -- not later than November 21, 2008, IBC's disclosure statement -- in form and substance satisfactory to IBC Investors -- will be approved by the Court; and -- not later than January 15, 2009, IBC's Plan -- in form and substance satisfactory to IBC Investors -- will be confirmed by the Court; -- IBC will be reorganized pursuant to the Plan, which will be endorsed by the prepetition investors, consisting of Silver Point Finance, LLC, Monarch Alternative Capital L.P., and McDonnell Investment Management LLC, which collectively hold not less than 53.8% of the aggregate prepetition debt outstanding under the Amended and Restated Credit Agreement, dated April 24, 2002, among IBC, Interstate Brands Corporation, a host of lenders, and JPMorgan Chase Bank, N.A., as administrative agent; and -- IBC agrees to pay IBC Investors, among other things, commitment fees for (i) $2,210,000 for the purchase of New Common Stock; and (ii) $4,290,000 for the purchase of New Convertible Debt, pursuant to the Equity Commitment Fee Letter, a copy of which is available for free at http://ResearchArchives.com/t/s?338c A full text copy of the Equity Commitment Letter is available at no charge at http://ResearchArchives.com/t/s?338c (2) the Revolving Loan or ABL Facility Commitment Letter with General Electric Capital Corporation, as administrative and collateral agent, and GE Capital Markets, Inc., as lead arranger, pursuant to which GE Capital and GECM will provide IBC with a $125,000,000 senior secured revolving credit facility, under which borrowings may be made and letters of credit may be issued in connection with the consummation of a Plan. IBC will pay or reimburse GE Capital and GECM for all reasonable out-of-pocket costs and expenses, in connection with (i) the preparation, negotiation and execution of the Revolving Credit Facility documentation, (ii) the syndication and funding of the Credit Facility, (iii) the creation, perfection and protection of the liens on the collateral, and (iv) the on-going administration of Credit Facility Documentation. A full-text copy of the ABL Facility Commitment Letter is available for free at http://ResearchArchives.com/t/s?338a (3) the Term Loan Commitment Letter with Silver Point Finance, LLC and Monarch Master Funding Ltd, which provides for a for a five-year term loan facility in the amount of $339,000,000. The investment will be made in the Reorganized Debtors, in connection with the confirmation and consummation of a Plan, with terms that are consistent with the Plan Term Sheet, a copy of which is available at no charge at http://ResearchArchives.com/t/s?3389. Under the Term Loan Commitment Letter, IBC agrees to pay the Commitment Parties, among other things, a backstop fee of $16,800,000, pursuant to certain payment terms outlined in the Fee Letter, a copy of which is available for free at http://ResearchArchives.com/t/s?3388. A full-text copy of the Term Loan Commitment Letter is available for free at http://ResearchArchives.com/t/s?3387 According to TradingMarkets.com, lawyers for IBC said the Company and third-party investor, Ripplewood Holdings L.L.C., a New York- based hedge fund, "agreed to give the unsecured creditors some cash and pay up to $890,000 in their expenses, plus other considerations." In exchange, the unsecured creditors withdrew their objection to the Plan Funding Commitment Agreements, and agreed to support the Debtors' Plan, says the report. The entry into the Equity Commitment Letter does not constitute the solicitation of a vote on a Plan, and does not give rise to any claim or remedy against, among other parties, the Debtors and IBC Investors, alleging otherwise. The Court authorized the Debtors to pay all Commitment and Transaction fees without further Court order. Payments under the Equity Commitment Fee Letter and the ABL Facility Commitment Fee Letter will be entitled to priority under Sections 105(a), 364(c)(1), 503(b)(1) and 507(a)(2) of the Bankruptcy Code, as administrative expense claims. The Term Loan Facility Commitment fee and transaction expenses will be granted super-priority administrative status pursuant to section 364(c)(1) of the Bankruptcy Code, provided, however, the Claims will be junior to the superpriority claims accorded to the Debtor-in-possession lenders and the DIP agent, and pari passu with the IBC Investors Commitment fees and transaction expenses. All objections to the request are overruled. A full-text copy of the Court's approval order is available at no charge at http://ResearchArchives.com/t/s?3386 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, 2007. 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 did 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; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Files New Plan & Disclosure Statement ---------------------------------------------------------- Interstate Bakeries Corporation and eight of its subsidiaries and affiliates filed with the U.S. Bankruptcy Court for the Western District of Missouri, on October 4, 2008, their Joint Plan of Reorganization and accompanying Disclosure Statement in connection with their Court-approved Plan funding agreements reached with various lender parties. Essentially, the Plan contemplates the resolution of outstanding claims against, and interests in, the Debtors pursuant to Sections 1123, 1129 and 1141 of the Bankruptcy Code. Holders of prepetition lender claims will receive a distribution consisting of a New Third Lien Term Loan and $85,800,000 in aggregate principal amount of New Convertible Secured Notes. Holders of general unsecured claims against the Debtors, and the Debtors' equity interest holders will not receive any distribution under the Plan. The existing common stock of the Company will be canceled. However, TradingMarkets.com reported that lawyers for IBC said the Company and third-party investor, Ripplewood Holdings L.L.C., "agreed to give the unsecured creditors some cash and pay up to $890,000 in their expenses, plus other considerations." In exchange, the unsecured creditors withdrew their objection to the Plan Funding Commitment Agreements, and agreed to support the Plan. Reorganized Capital Structure Under Plan Craig D. Jung, chief executive officer of IBC, discloses that the Debtors engaged in extensive negotiations with Ripplewood and certain of the prepetition lenders, including Silver Point Finance Capital LLC, Monarch Alternative Capital L.P., and McDonnell Investment Management LLC, among other parties, to develop the proposal for an equity investment by Ripplewood, which will fund the Debtors' emergence from bankruptcy. Subsequently, the Debtors entered into, among other agreements, a commitment letter with IBC Investors I, LLC, an affiliate of Ripplewood, which the Court approved on October 3, 2008, and would provide the basis for the Debtors' Reorganization Plan. Pursuant to the Equity Commitment Letter, IBC Investors agrees to (i) invest $44,200,000 in cash in the Reorganized Company in exchange for 4,420,000 shares of common stock of the Reorganized Company, and (ii) purchase $85,800,000 in New Convertible Secured Notes, which will be issued by the Reorganized Company and be convertible into New Common Stock. A full-text copy of the terms of the New Convertible Notes under the Equity Commitment Letter is available for free at: http://ResearchArchives.com/t/s?338d According to Mr. Jung, the Plan sets forth the capital structure for the Reorganized Debtors upon their emergence from Chapter 11, consisting of: * the ABL Facility -- a $125,000,000 asset-based senior secured revolving credit facility to be structured, arranged and syndicated by General Electric Capital Corporation and GE Capital Markets; * the Term Loan Facility -- a $339,000,000 term loan credit facility, by Silver Point and Monarch Master Funding, Ltd.; and * the New Third Lien Term Loan Facility -- a $147,300,000 third priority secured term loan financing facility, under which Prepetition Lender Claimholders will receive Pro Rata share of the New Third Lien Term Loan in exchange for the Claims. A full-text copy of the terms under the Third Lien Term Loan is available for free at http://ResearchArchives.com/t/s?338e New Convertible Secured Notes The Reorganized Debtors will issue 5% fourth priority secured convertible notes, in the original principal amount of $171,600,000. Aggregate principal amounts of (i) $85,000,000 of the New Convertible Secured Notes will be distributed to Prepetition Lender Claimholders, and (ii) $85,800,000 of the New Convertible Secured Notes will be distributed to Equity Investors pursuant to an Investment Agreement. The Debtors note that the transactions contemplated by the Agreements are contingent upon ratification of amendments to collective bargaining agreements between them and their unionized workforce necessary to implement their business plan. Issuance of Warrants Moreover, Reorganized IBC will issue warrants to IBC Investors and the Term Loan Facility lenders. Pursuant to the Investment Agreement, IBC Investors will also receive Series A Warrants with a strike price of $12.50, and representing 15% of the New Common Stock on a fully-diluted basis. The lenders under the Term Loan Facility will be issued Series B Warrants with a strike price of $12.50 and representing 1.917% of the New Common Stock on a fully-diluted basis, and Series C Warrants with a strike price of $10.00 and representing 2.837% of the New Common Stock on a fully-diluted basis. Stock Appreciation Rights The Reorganized IBC will enter into collective bargaining agreements with certain of its unions which will establish employee equity sharing plans that will provide for the issuance of stock appreciation rights to certain employees of the Reorganized Company. Equity Ownership in Reorganized IBC On the Plan Effective Date, Reorganized IBC will issue 8,840,000 shares of the New Common Stock with (i) 4,420,000 shares of New Common Stock to be issued to Equity Investors for $44,200,000 in cash, and (ii) 4,420,000 shares of New Common Stock to be issued to the Term Loan Facility lenders on pro rata in accordance with the relative amounts of their loans funded under the Term Loan Facility. The New Common Stock issued under the Plan will be subject to: * legal or economic dilution from conversions of New Convertible Debt; * future issuances of New Convertible Debt as "pay-in-kind" interest on the existing New Convertible Debt; * exercises of Warrants and stock options; * restricted stock and stock appreciation rights issued to directors, officers and employees of Reorganized IBC under the Long Term Incentive Plan; and * the employee equity sharing plans to be established in accordance with the collective bargaining agreements to be entered into in connection with the Transaction. A full-text copy of the terms of the New Common Stock is available for free at: http://ResearchArchives.com/t/s?338e Holders of New Common Stock will grant proxies to Equity Investors to vote the holder's New Common Stock as Equity Investors, in its sole discretion, will determine. On the Plan Effective Date, Reorganized IBC will be eligible to deregister under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC. Cancellation of Existing Securities and Agreements The Plan provides that as of the Effective Date, the Reorganized Debtors will assume all existing indemnification obligations arising under (i) the Prepetition Credit Agreement -- including the Loan Documents, in favor of JPMCB, J.P. Morgan Securities Inc. and any of the Plan Supporters, (ii) the DIP Credit Agreement, (iii) the exit facility commitment letter by and among Silver Point, IBC and Brands dated October 18, 2007, as amended and restated as of November 6, 2007, (iv) the Term Loan Facility Commitment Papers and (v) Annex I to the Commitment Letter, and all indemnification obligations will not be cancelled, terminated or otherwise modified and will remain in full force and effect, provided that the assumption of certain indemnification rights as set forth in the Plan will not be deemed an assumption, continuation or extension of the indemnification rights against the Reorganized Debtors that arise under Old Convertible Note Indenture or the issuance of the Old Convertible Notes and any indemnification rights against the Reorganized Debtors that arise under the Old Convertible Note Indenture or the issuance of the Old Convertible Notes will be discharged in accordance with the Plan. Directors and Officers The existing officers or managing members of the Debtors will remain in their current capacities as officers of the Reorganized Debtors, subject to the ordinary rights and powers of the board of directors or equityholders, as the case may be, to replace them. However, on the Plan Effective Date, the term of the current members of the board of directors of IBC will expire. The initial board of directors of Reorganized IBC will consist of eight directors. Mr. Jung -- or in the event of his death, incapacity, or resignation, the chief executive officer of IBC -- will serve as a director. Equity Investors will designate five directors. The Prepetition Investors will designate two directors reasonably satisfactory to Equity Investors. The Persons designating board members will file with the Bankruptcy Court and give to the Debtors written notice of the identities of the members on a date that is not less than 10 days prior to the Voting Deadline. Employment Agreement and Compensation Programs The Debtors propose the terms of employment of certain key employees of the Reorganized Debtors, to be effective on the Effective Date. The form of, and the Debtors' entry into, the Executive Employment Agreements will be subject to the consent of the IBC Investors. With the exception of the requirement that the Debtors assume the Executive Employment Agreement with Mr. Jung, entry into, or assumption of, any Executive Employment Agreement or other employment agreement will not be a condition precedent to the confirmation or consummation of the Plan. On the Effective Date, the Reorganized Debtors will implement a Long Term Incentive Plan, to promote the growth and general prosperity of the Reorganized Company by offering incentives to key employees who are primarily responsible for the growth of the Reorganized Debtors. The Long Term Incentive Plan is to be in form and substance satisfactory to Equity Investors, and its establishment will be subject to the consent of Equity Investors. Immediately prior to the Effective Date, the Supplemental Executive Retirement Plan will be deemed terminated, and the Reorganized Debtors' obligations thereunder will cease, and on the Effective Date, the Trustee of the SERP will remit all assets of the SERP to the Reorganized Debtors. Post-Effective Date Financing On the Plan Effective Date, Reorganized IBC will issue the New Third Lien Term Loan, the New Convertible Secured Notes, the New Common Stock and the Warrants for distribution in accordance with the terms of the Transaction. In the Confirmation Order, the Bankruptcy Court will approve the New Third Lien Term Loan and the New Convertible Secured Notes, in substantially the form disclosed to the Bankruptcy Court, and authorize the Reorganized Debtors to issue the New Third Lien Term Loan and New Convertible Secured Notes pursuant to the New Third Lien Term Loan Credit Facility and the New Convertible Secured Note Indenture and execute these together with other documents as the agent under the New Third Lien Term Loan and the trustee under the New Convertible Secured Note Indenture may reasonably require. On the Plan Effective Date, (i) the Reorganized Debtors are authorized to execute and deliver the New Credit Facility documents, the New Third Lien Term Loan Credit Facility, the New Convertible Secured Note Indenture, all mortgages, intercreditor agreements, security documents and all other related agreements. Under the Agreements, the Debtors will, among other things, pay or reimburse any fees, expenses, losses, damages or indemnities. The Liens granted to secure the obligations under each Exit Facility Document will be, and will remain legal, valid, perfected, non-voidable, non-avoidable and binding liens on, and security interests in, all property and assets of the Reorganized Debtors. No obligation, payment, transfer or grant of security under the Exit Facility Documents will be stayed, restrained, voidable, avoidable or recoverable under the Bankruptcy Code. Dissolution of Committee Effective on the Effective Date, the Creditors Committee will dissolve automatically, whereupon its members, professionals, and agents will be released from any further duties and responsibilities in the Chapter 11 Cases and under the Bankruptcy Code, except with respect to applications for Professional Claims. The professionals retained by the Creditors Committee, and the members thereof will not be entitled to compensation and reimbursement of expenses for services rendered after the Effective Date, except for services rendered in connection with (i) the implementation of the transactions contemplated to occur on the Effective Date under the Plan and (ii) applications for allowance of compensation and reimbursement of expenses pending on the Effective Date or filed after the Effective Date pursuant to the Plan. The Equity Committee was disbanded by the United States Trustee on October 1, 2008, due to the resignation of certain members. Workers' Compensation Obligations The Plan discloses that the Debtors' outstanding obligations -- which relate to workers' compensation arise from (i) incurred, but not yet paid, and (ii) incurred, but not reported claims -- consist of 2,600 Claims as of September 15, 2008. The Debtors expect that the cash payments related to Workers' Compensation Claims for the 12 months after the Effective Date will be approximately $48,500,000. Settlement of Litigations The Debtors further disclosed in the Plan that they have have reached settlements with respect to the parties in the putative class cases captioned Ruzicka, et al. v. Interstate Brands Corp., and McCourt, et al v. Interstate Brands Corp. The parties have agreed in principle to settle the Cases through an allowed, prepetition general unsecured claim for $2,000,000. The Settlement is subject to the approval of the Bankruptcy Court and New Jersey Federal Court. Similarly, the Debtors have reached settlement with the claims of the Environmental Protection Agency and the Department of Justice with respect to the Debtors' management of regulated refrigerants. The Debtors have agreed to allow the Claim for $1,000,000, pending the Court's approval. The Debtors and South Coast Air Quality Management District in California have also agreed to allow SCQAMD's claim for $150,000, on account of the Debtors' violations in their operation of catalytic oxiders on bakery emissions at their facility in Pomona, California. ABA Plans Mr. Jung says that the Debtors' inability to completely eliminate their obligation to participate in the American Bakers Association Retirement Plan -- which covers about 259 IBC employees -- while operating under Chapter 11, could jeopardize their ability to emerge from bankruptcy and threaten their viability. Based upon the actuarial estimates using statutory termination discount rates, the Debtors' portion of the underfunding of the ABA Plan could be approximately $15,000,000 to $20,000,000 assuming the ABA Plan was characterized as a multiple employer plan. Conversely, he continues, if the ABA Plan was characterized as an aggregate of single employer plans, it is likely that the single employer plan attributable to the Debtors would have to be terminated, in which event, the Debtors' portion of the underfunding could be approximately $65,000,000 to $80,000,000. Oct. 4 Plan Must be Approved The Debtors assert that the Plan provides for an equitable and early distribution to their creditors, preserves the value of the business as a going concern, and preserves the jobs of employees. The Debtors believe that any alternative to confirmation of the Plan, like a liquidation or attempts by another party-in-interest to file a plan, could result in significant delays, litigation, and costs, as well as the loss of jobs by the employees. Moreover, the Debtors believe that their creditors will receive greater and earlier recoveries under the Plan than those that would be achieved in liquidation or under an alternative plan. For these reasons, the debtors urge parties entitled to vote to accept the plan. A full-text copy of the Debtors' Disclosure Statement is available for free at: http://ResearchArchives.com/t/s?3383 A full-text copy of the Debtors' New Plan of Reorganization is available for free at: http://ResearchArchives.com/t/s?3384 A redlined copy of their New Disclosure Statement and Reorganization Plan, in comparison with their First Amended Plan, filed in January 2008 is also available for free at: http://ResearchArchives.com/t/s?3385 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, 2007. 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 did 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; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Treatment of Claims Under New Plan ------------------------------------------------------- The Plan of Reorganization of Interstate Bakeries Corporation and eight of its subsidiaries and affiliates divides claims and interests -- other than Administrative Claims and Priority Tax Claims -- into 12 classes and sets forth the treatment for each Class. The Debtors' Plan, though proposed jointly, constitutes a separate Plan proposed by each Debtor, and thus contains separate classes for holders of Claims against, and Interest in each of the Debtors. The Debtors note that the claims consist of estimated amounts that will ultimately become allowed in each class on a consolidated basis, as reviewed by the Debtors and modified by the Court through omnibus hearings. In addition, the portion of estimated percentage recoveries -- which are based upon the value of the New Common Stock issuable upon conversion of New Convertible Secured Notes -- were calculated pursuant to certain valuation ranges. Class Description Treatment ----- ------------ --------- Class 1 Secured Tax Includes any secured prepetition Claims claim for taxes owed to governmental unit secured by a lien in which the Debtors have an interest. Estimated claim amount: $276,119 Estimated recovery : 100% Class 2 Secured Includes any claim in any separate Claims subclass of claims; each subclass which is deemed to be a separate class, secured by lien on property in which the Debtors have an interest. Under the Plan, the rights of each holder of a Secured Claim will be reinstated. The Liens will survive the Chapter 11 Cases and will continue in accordance with the contractual terms of the parties' agreements until the Claims are paid in full. As alternatives, the Reorganized IBC may, under the Plan, (i) pay off a Lien in Cash, with the amount of the payment equal to the value of the collateral, (ii) surrender the collateral to the Claimholder, or (iii) agree to other arrangements with the holder of the Lien. Estimated claim amount: $310,367 Estimated recovery : 100% Class 3 Other Priority Are held by current and former Claims employees for unpaid wages, salaries, bonuses, severance pay and other unpaid employee benefits. The Reorganized IBC will either pay the Claims in full in cash or, if necessary, agree with the Claimholder to a compensation arrangement. Estimated claim amount: $493,327 Estimated recovery : 100% Class 4 Intercompany A claim by one or more of IBC and Claims its affiliates against any other IBC affiliates on account of management services obligations, employee leasing obligations, royalty obligations and obligations on account of purchased inventory. All claims between and among the Debtors will be (i) released, waived and discharged as of the Effective Date, (ii) contributed to the capital of the obligor corporation, (iii) dividended or (iv) remain unimpaired. Class 5 Workers' Comprised of Claims held by an Compensation employee or former employee of the Claims Debtors for workers' compensation coverage under the workers' compensation program. Workers' Compensation Claims are Unimpaired under the Plan, and will be in the approximate aggregate amount of $[62,000,000]. The Debtors' liabilities under the Compensation Programs are generally secured by letters of credit and bonds posted with the Company's insurers and with the state authorities that govern the Company's self-insurance programs. If the Workers' Compensation Claims were Impaired under the Plan, the L/Cs and bonds related to the Claims would likely be called, thereby increasing the secured, funded debt under the Prepetition Credit Facility. Estimated claim amount: $[62,000,000] Estimated recovery : 100% Class 6 Subsidiary Will be unaffected by the Plan, Interests except to the extent required by the restructuring transactions entered into by the Debtors and certain parties. Class 7 Prepetition Are comprised of all claims of the Lender Claims prepetition Agent and the prepetition lenders arising under or pursuant to the prepetition credit facility, including, claims for postpetition interest, pursuant to the Amended and Restated Credit Agreement dated as of April 25, 2002m among IBC and its subsidiaries, JPMorgan Chase Bank as administrative agent, and certain banks and financial institutions. Each Prepetition Lender will receive its pro rata share of each component of the Prepetition Lenders Plan Distribution Property. For the sole purpose of the Plan, the Prepetition Lenders are waiving claims for default interest but reserve the right to collect default interest in all other circumstances. Estimated claim amount: $[451,412,000], not including L/Cs or default interest Estimated recovery : % of principal interest at non- default rates Class 8 Capital Lease Are claims arising under or pursuant Claims to capital leases under the Plan, and consist of the secured portion of the Capital Lease Claims. The unsecured portion of all Capital Lease Claims will be classified and treated as Class 9 General Unsecured Claims. Holders of Class 8 Capital Lease Claims will (i) receive deferred Cash payments totaling at least the allowed amount of the Allowed Capital Lease Claim; (ii) upon abandonment by the Debtors, receive the collateral with respect to the Capital Lease Claim; (iii) have their Capital Lease Claims Reinstated; or (iv) receive other treatment as agreed with the Debtors, to be announced at or prior to the scheduled hearing for the confirmation of the Debtors' Plan. Estimated claim amount: $[2,575,478] Estimated recovery : 100% Class 9 General Holders of general unsecured claims Unsecured will not be entitled to any recovery Claims under the Plan. Estimated claim amount: $[322,586,327] Estimated recovery : 0% Class 10 Subordinated Will be canceled, released and Securities extinguished; claimholders will Claims will not be entitled to any recovery under the Plan. (a) Class 10a- Subordinated Estimated claim amount: $3,000,000 Debt Estimated recovery : 0% Securities Claims (b) Class 10b- Subordinated Equity Securities Claims Class 11 Interests Will be cancelled; claimholders in Brands will receive no distribution. Preferred Stock Class 12 Interests Will be cancelled; claimholders in IBC will receive no distribution. Class 7 and Class 8 are are impaired and are entitled to vote to accept or reject, the Plan. Class 1, Class 2, Class 3, Class 4, Class 5 and Class 6 are unimpaired and deemed under Section 1126(f) of the Bankruptcy Code to have accepted the Plan. Their votes to accept or reject the Plan will not be solicited. Holders of Claims and Interests in Classes 9, Class 10 -- including Classes 10a and 10b, 11 and 12 are not entitled to receive any distribution under the Plan on account of their Claims and Interests. Pursuant to Section 1126(g) of the Bankruptcy Code, Classes 9, 10, 11 and 12 are conclusively presumed to have rejected the Plan, and the votes of Claimholders and Interestholders in these Classes will not be solicited. In view of the deemed rejection by Classes 9, 10a, 10b, 11 and 12, the Debtors will seek confirmation of the Plan pursuant to the "cramdown" provisions of the Bankruptcy Code. The Debtors have estimated that the amount of Allowed Administrative Claims expected to have been accrued up to the Effective Date will be approximately $[10,158,706], consisting primarily of Reclamation Claims and excluding Professional Fee Claims and Administrative Claims that will be paid in the ordinary course subsequent to the Effective Date. The Debtors have also estimated that the aggregate amount of Priority Tax Claims payable under the Plan will be approximately $[1,363,120] million. 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, 2007. 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 did 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; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) INTERSTATE BAKERIES: Unions Recommend Proposed Modification Deal ---------------------------------------------------------------- Leaders of Interstate Bakeries Corporation's local unions from across the country unanimously recommended the proposed modification agreement to the collective bargaining agreement on October 1, 2008, the International Brotherhood of Teamsters National Bakery and Laundry Conference, said on its Web site. In a letter addressed to Teamsters members employed by IBC, Richard Volpe, director for Bakery and Laundry Conference, said that representatives from each of the local unions with members at IBC conducted a two-person contract review conference call, during which they unanimously recommended a Proposed Modification Agreement. According to Mr. Volpe, the Proposed Modification Agreement was negotiated, and the financial plan created, between the private equity firm Ripplewood Holdings, L.L.C., and Silver Point Capital. As reported in yesterday's Troubled Company Reporter, the Debtors filed an amended Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Western District of Missouri on October 4, 2008. The filing of the Plan and Disclosure Statement was made in connection with the plan funding commitments, on September 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. The funding commitments form a basis for IBC to emerge from Chapter 11 as a stand-alone company, under the Plan of Reorganization filed with the Bankruptcy Court. The Plan and Disclosure Statement reflect a substantially impaired recovery for prepetition senior secured creditors. For general unsecured creditors and equity security holders, the amended Plan and Disclosure Statement reflect no recovery, although on October 3, 2008, the Company and its pre-petition secured creditors reached a compromise with the Official Committee of Unsecured Creditors appointed in the cases. As a result of the compromise, the Official Committee of Unsecured Creditors withdrew its previously filed objection to the Company's efforts to obtain Bankruptcy Court approval of the plan funding commitments and agreed to support the Company's Plan of Reorganization as it will be subsequently amended to reflect the compromise. The Plan of Reorganization has the support of approximately 53.8% of the prepetition secured debt holders. "Although the proposed Agreement does not contain all we would have wanted, it does provide stability, wage increases and the best plan for the company's long term viability . . . [and] the best route to take in order for Interstate Bakeries to exit bankruptcy," Mr. Volpe noted. On October 22, balloting materials for the Proposed Modification Agreement will be mailed to each of the Teamster-represented IBC workers, and are due back by no later than November 12, 2008. Proposed IBC-IBT Modification Agreement Highlights Mr. Volpe disclosed that the proposed Agreement with IBC has already received approval from other parties involved in the bankruptcy, including the creditor and lending banks, IBC management, as well as new investors, including Ripplewood, and is subject to approval by the Bankruptcy Court. The Modification's highlights include, among other things: * In exchange for certain pay reductions, all employees will share in a Teamsters Equity Sharing Plan and receive 7% of the Company's total equity. * IBC will establish a Profit Sharing Program for all union- represented, hourly paid or non-exempt employees, of 10% of its net income. * IBC may adopt a Large format, Direct Store Delivery and "drop and go" delivery system for bread and cake no earlier than August 1, 2010, only after a successful test in an area not represented by the Teamsters. * On transport operations, IBC has the right to convert Transport hourly rates to trip rates, provided that the trip rates are equal to, or better than, the hourly rates for that year. * IBC will consider re-entry into southern California, Northern Washington and Michigan markets, where all work formerly performed by Teamsters will be assigned to Teamsters. * IBC will agree to a Neutrality and Protection of Jurisdiction Agreement. * Any disputes regarding the Modification Agreement will be subject to binding arbitration. The effective date of the Modification Agreement will be the first Sunday after the Company exits bankruptcy. As soon as practical after the ratification vote, the Director of the IBT Bakery Conference will provide in writing to IBC the results of the national mail referendum. The expiration date of the Modification Agreement will be July 31, 2014, and all Long-Term Agreement will fold into the Modification Agreement at their Long-Term Agreements expiration dates and will continue all terms and conditions of the agreements, except as modified by the Modification Agreement. The period between the expiration of the Long-Term Agreements and the expiration of the Modification Agreement will be called the Master Extension Agreement. A full-text copy of Mr. Volpe's letter to the Union-represented IBC workers, with a summary of the Modification Agreement highlights, is available at no charge at: http://bankrupt.com/misc/Teamsters_CBAModificationHighlights.pdf A full text copy of the Modification Agreement is available for free at: http://bankrupt.com/misc/IBCTeamsters_CBAModificationAgreement.pdf 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, 2007. 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 did 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. (Interstate Bakeries Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) IPOFA WEST: Auctions Mall After Failing to Find Buyer ----------------------------------------------------- Jennifer Dawson at Houston Business Journal reports that IPofA West Oaks Mall, L.P., is selling its West Oaks Mall in State Highway 6 at Westheimer in West Houston in an auction, after failing find a buyer for the property. IPOFA West filed for bankruptcy to prevent its lender from foreclosing on the property, Houston Business says, citing Joseph Luzinski, the federally appointed bankruptcy trustee for the mall. As reported in the Troubled Company Reporter on Sept. 19, 2008, federal trustees put on the block two large shopping malls caught up in an allegedly fraudulent investment scheme of investor Edward H. Okun. The larger of the two malls, West Oaks Mall in Houston, has $81.3 million in unpaid debt in the form of commercial mortgage-backed securities. Mr. Luzinski said he hopes to sell the mall before the end of 2008. West Oaks Mall, which was built in 1984 and renovated in 2004, is about 80% occupied. Based in Richmond, Virginia, IPofA West Oaks Mall, L.P., and its two affiliates, IPofA West Oaks LeaseCo, and IPofA WOM Master LeaseCo, L.P., own a regional shopping mall commonly known as West Oaks Mall and located at 1000 West Oaks Mall, Houston in Harris County, Texas. The Property contains total gross leaseable area of 1,078,829 square feet, situated on approximately 100 acres and is currently occupied by approximately 100 retail tenants. The Debtors filed for Chapter 11 protection on Oct. 2, 2007 (Bankr. E.D. Va. Lead Case No. 07-336490. Richard D. Scott, Esq., at LeClair Ryan represents the Debtors. When the Debtors filed for bankruptcy, they disclosed assets and debts of between $1 million and $100 million. Edward H. Okun, the Debtors' appointed managing representative, is also the owner of The 1031 Tax Group LLC and its affiliates. Headquartered in Richmond, Virginia, The 1031 Tax Group LLC -- http://www.ixg1031.com/-- is a privately held consolidated group of qualified intermediaries created to serve real property exchanges under Section 1031 of the Internal Revenue Code. The company and 15 of its affiliates filed for Chapter 11 protection on May 14, 2007 (Bankr. S.D.N.Y. Case No. 07-11447 through 07-11462). Paul Traub, Esq., Norman N. Kinel, Esq., and Steven E. Fox, Esq., at Dreier LLP, represent the Debtors in their restructuring efforts. Thomas J. Weber, Esq., Melanie L. Cyganowski, Esq., and Allen G. Kadish, Esq., at Greenberg Traurig, LLP, represent the Official Committee of Unsecured Creditors. As of Sept. 30, 2007, the Debtors had total assets of $164,231,012 and total liabilities of $168,126,294, resulting in a total stockholders' deficit of $3,895,282. As disclosed in the Troubled Company Reporter on Sept. 11, 2008, William Rochelle of Bloomberg News and Bankruptcy Law360 reported that Gerard A. McHale, the Chapter 11 trustee for The 1031 Tax Group LLC, lodged an adversary case against several defendants including former chief executive officer Edward H. Okun, who is currently incarcerated and awaiting trial after being accused of misappropriating more than $130 million to fund a lavish lifestyle. According to the reports, the complaint centers on a home that Mr. Okun allegedly bought using company funds. ITSA INTERCONTINENTAL: Chapter 15 Case Summary ---------------------------------------------- Chapter 15 Debtor: ITSA Intercontinental Telecomunicacoes Ltda. SIA SUL Trecho 06, Lotes 85/95 2 e 3 Andares, Parte "C" Brasilia, DF Brazil CEP 71205-060 Bankruptcy Case No.: 08-13927 Type of Business: The Debtor provides and develops broadband telecommunication services. See: http://www.itsa.com.br/ Chapter 11 Petition Date: October 7, 2008 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Paul N. Silverstein, Esq. paulsilverstein@andrewskurth.com Andrews Kurth LLP 450 Lexington Avenue New York, NY 10017 Tel: (212) 850-2819 Fax: (212) 850-2929 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million JEFFERSON COUNTY: Governor Meets With Legislators on Sewer Debt --------------------------------------------------------------- Martin Z. Braun of Bloomberg News reports that Alabama Governor Bob Riley met with Jefferson County's state legislative delegation to brief them on negotiations to restructure $3.2 billion of the county's sewer debt allowing it to avoid bankruptcy. Creditors, according to the report, have agreed to contribute $650 million in cash to support refinancing the debt, Mr. Riley wrote in a letter to Neel Kashkari, who is overseeing the U.S. Treasury's $700 million Wall Street rescue program. The governor is asking Treasury to guarantee a $2.7 billion refinancing of the debt, according to the report. A Treasury guarantee, according to the report, would allow the county to refinance the sewer debt at interest rates residents could afford, Mr. Riley said in the letter. The plan calls for the county to issue 50-year bonds backed by a pledge of sewer revenue, according to the report. Sewer rates would increase at 2.85 percent per year, according to the report. About Jefferson County Jefferson County has its seat in Birmingham. It has a population of 660,000. It ended its 2006 fiscal year with a $42.6 million general fund balance, according to Standard & Poor's. The Birmingham firm of Bradley Arant Rose & White, represents Jefferson County. Porter, White & Co. in Birmingham is the county's financial adviser. A bankruptcy by Jefferson County stands to be the largest municipal bankruptcy in U.S. history. It could beat the record of $1.7 billion, set by Orange County, California in 1994. * * * As reported by the Troubled Company Reporter on June 10, 2008, Standard & Poor's Ratings Services' ratings on Jefferson County, Ala.'s series 1997A, series 2001A, series 2003 B-1-A through 2003 B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue bonds ('CCC' underlying rating [SPUR]) remain on CreditWatch with developing implications. As reported by the TCR on July 22, 2008, Moody's Investors Service's continues to review the Caa3 rating on Jefferson County's (AL) $3.2 billion in outstanding sewer revenue warrants for possible downgrade. JOHNSTON-SHIELD: Wildcat Mitsubishi Closes Shop in Tucson --------------------------------------------------------- Shelley Shelton at Arizona Daily Star reports that Johnston Shield Inc.'s auto dealer Wildcat Mitsubishi has closed up shop in Tucson. Arizona Daily relates that Wildcat Mitsubishi was the target of consumer complaints and investigations over questionable deals before it filed for Chapter 11 protection with Johnston Shield. Arizona Daily relates that in September, Johnston Shield sought the U.S. Bankruptcy Court for the District of Arizona's permission to enter into a contract with Mitsubishi Motors North America Inc. that set guidelines for the company to sell or return new cars to the manufacturer, effectively breaking its franchise agreement. Johnston Shield asked the Court's permission to break its lease at 5200 E. Speedway, citing a plan to close a Tucson unit and consolidate all business at the company's Sierra Vista operations, the report says. According to Arizona Daily, the Court, when no objections were filed, granted the motion to break the Mitsubishi franchise agreement. Phoenix, Arizona-based Johnston Shield Inc., and debtor- affiliate, Johnston-Shield Properties, LLC, operated Wildcat Mitsubishi and Ideal Automotive Group in Sierra Vista. The Debtors filed for Chapter 11 protection on July 10, 2008 (Bankr. D. Ariz. Case No. 08-08474). Franklin D. Dodge, Esq., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of both $1 million to $100 million. According to Arizona Daily Star, the Debtors listed more than $7 million in unsecured debt, including nearly $1.3 million in unpaid state and federal taxes. KIMBALL HILL: Seeks 90-day Extension to Remove Actions ------------------------------------------------------ Kimball Hill Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the Northern District of Illinois to extend the time by which they may file notices to remove actions through the effective date of a confirmed Chapter 11 plan in their bankruptcy cases, pursuant to Rule 9006(b) of the Federal Rules of Bankruptcy Procedure. Rule 9006 (b)(1) provides that the court, for cause, may at any time in its discretion, with or without a motion or notice, order the period enlarged if the request therefore is made before the expiration of the period originally prescribed or as extended by a previous order. The Debtors relate that they are involved in more than 70 actions throughout the United States in about 30 state and federal venues. The Actions involve a variety of types of cases, including employment-related litigation and administrative proceedings, contract disputes, product liability, and personal injury cases. The Debtors and their advisors have focused on activities that are critically important to their reorganization, Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, says. Because the Debtors have been addressing time-critical matters, and because their management and professional advisors must balance assessment of the Actions with active involvement in their reorganization efforts, the Debtors have not had sufficient time to analyze the Actions and will not be able to make appropriate determinations concerning their removal prior to the October 2008 deadline, he explains. Citing In re Wickes Inc., where the Court granted a 90-day extension of the removal period until the date of a confirmation of a chapter 11 plan, he asserts that courts have frequently granted removal extensions that last through a date of a confirmed Chapter 11 Plan. He further asserts, citing In re Kmart Corp., that courts even granted extension of the removal period past a chapter 11 plan effective date. Mr. Schrock adds that cause exists to extend the removal period. He also assures the Court that the rights of parties to the Actions will not be prejudiced by granting the Debtors' request. The Court will consider the Debtors' request in a hearing set for October 14, 2008. Objections to the extension request must be filed no later than October 9. Based in Rolling Meadow, Illinois, Kimball Hill Inc. -- http://www.kimballhillhomes.com/-- is one of the largest privately-owned homebuilders and one of the 30 largest homebuilders in the United States, as measured by home deliveries and revenues. The company designs, builds and markets single- family detached, single-family attached and multi-family homes. The company currently operate within 12 markets, including, among others, Chicago, Dallas, Fort Worth, Houston, Las Vegas, Sacramento and Tampa, in five regions: Florida, the Midwest, Nevada, the Pacific Coast and Texas. Kimball Hill, Inc. and 29 of its affiliates filed for Chapter 11 protection on April 23, 2008 (Bankr. N.D. Ill. Lead Case No. 08- 10095). Ray C. Schrock, Esq., at Kirkland & Ellis LLP, represents the Debtors in their restructuring efforts. The Debtors' consolidated financial condition as of Dec. 31, 2007 reflected total assets of $795,473,000 and total debts $631,867,000. The Debtors have until Oct. 20, 2008, to exclusively file a bankruptcy plan. (Kimball Hill Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). LABRANCHE & CO: S&P Holds & Withdraws Ratings at Company's Request ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings, including the 'B' corporate credit rating, on LaBranche & Co. Inc. At the same time, S&P withdrew all of its ratings on LaBranche, at the company's request. LEHMAN BROTHERS: U.S. Trustee Forms 7-Member Creditors' Committee ----------------------------------------------------------------- Diana Adams, the United States Trustee for Region 2, appointed two new members of the Official Committee of Unsecured Creditors in Lehman Brothers Holdings Inc.'s Chapter 11 cases. The two new members The Vanguard Group and Aegon USA replaced R.R. Donnelley & Sons Company and The Royal Bank of Scotland. R.R. Donnelley, which had less than $1 million exposure to Lehman, abruptly resigned from the Creditors Committee following its appointment. The Creditors Committee now consists of: (1) Wilmington Trust Company, as Indenture Trustee 520 Madison Avenue, 33d Floor New York, New York 10022 Attn: James J. McGiniey, Managing Debtor Phone Number (212) 415-0522 Fax Number (212) 415-0513 (2) The Bank of NY Mellon 101 Barclay - 8 W New York, New York 10286 Attn: Gerard Facendola, Vice President Corporate Trust Phone Number (212) 815-5373 (3) Shinsei Bank, Limited 1-8, Uchisaiwaicho 2- Chome Chiyoda-Ku, Tokyo 100-8501 Japan Attn: Edward P. Gilbert Phone Number 81-3-5510-6614 Fax Number 81-3-4560-2846 (4) Mizuho Corporate Bank, Ltd. as Agent 1251 Avenue of the Americas New York, New York 10020-1104 Attn: Noel P. Purcell, Senior Vice President Phone Number (212) 282-3486 Fax Number (212) 282-4490 (5) Metlife 10 Park Avenue, P.O. Box 1902 Morristown, New Jersey 07962-1902 Attn: David Yu, Director Phone Number (973) 355-4581 Fax Number (973) 355-4230 (6) The Vanguard Group Inc. P.O. Box 2600, V31 Valley Forge, Pennsylvania 19482 Attn: Stewart Hosansky, Principal/Senior Analyst Phone Number (800) 523-1036 x13346 Fax Number (610) 407-2875 (7) Aegon USA Investment Management 4333 Edgewood Road NE Cedar Rapids, Iowa 52499 Attn: James K. Schaeffer, Director of Distressed Debt Phone Number (312) 596-3920 Fax Number (800) 454-2664 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. The September 15 Chapter 11 filing by Lehman Brothers Holdings, Inc., does not include any of its subsidiaries. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Luc A. Despins, Esq., and Wilbur F. Foster, Jr., Esq., at MILBANK, TWEED, HADLEY & McCLOY LLP, in New York, and Paul Aronzon, Esq., and Gregory A. Bray, Esq., at MILBANK in Los Angeles, California, represent the official unsecured creditors committee. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which have filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion (US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. LEHMAN BROTHERS: Panel Wants Probe on JPMC for Freezing $17 Bil. ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Lehman Brothers Holding Inc. and its debtor-affiliates seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to investigate JPMorgan Chase Bank, N.A., pursuant to Rule 2004(d) of the Federal Rules of Bankruptcy Procedures. The Creditors Committee wants to investigate JPMorgan for withholding Lehman Brothers Holdings Inc.'s excess assets held at the bank, a move which the panel said could have contributed to the company's liquidity constraints, and bankruptcy filing on Sept. 15. Despite the decline in share prices, LBHI appears to have had adequate assets to meet its current obligations as of Friday, September 12, 2008. The book value of its equity was $28 billion, the Creditors Committee points out. In addition, the Creditors Committee emphasizes that LBHI had at least $17 billion in excess assets which were held at JPMC on the Friday going into the weekend before its bankruptcy filing. On September 12, 2008, JPMC, however, refused to allow LBHI to access its excess assets and instead "froze" LBHI's account. In freezing LBHI's assets, JPMC was purportedly holding all of LBHI's assets as a potential offset against any claims JPMC may have had against LBHI, although the Creditors Committee is unaware of how the alleged claims exceeded the assets on hand. "The Creditors Committee believes that as a result of JPMC's actions, LBHI suffered an immediate liquidity crisis that could have been averted by any number of events, none of which transpired," relates its counsel Susheel Kirpalani, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP, in New York, "The Creditors Committee is best positioned to investigate, for the benefit of all creditors, the conduct and activities that devastated the Debtors' financial health and precipitated their bankruptcy filings," the panel said in a court filing. The Creditors Committee said it needs the information "to assess fully and investigate potential claims against third parties." In connection with the proposed investigation, the Creditors Committee asks the Court to compel JPMorgan to produce a set of documents containing information that would put light on the issue, and to designate a representative who would be put under examination. The Creditors Committee also asks the Court to compel JPMorgan to restore Lehman Brothers' on-line access to its various accounts so that it could review the location and value of its collateral. The accounts were terminated by the bank following the filing of Lehman Brothers' bankruptcy case. If the Court grants its request, the Committee anticipates that it will serve deposition notices after it has received and reviewed any documents produced in response to its discovery requests. The Committee reserves the right to seek authority to conduct additional examinations of individuals at JPMC based on a review of the documents provided. * * * In a statement to the Sunday Times, JPMorgan described the allegations as "unfounded conjecture." The Court will convene a hearing to consider the Committee's proposal on October 16, 2008 at 10:00 a.m. (Prevailing Eastern Time). Objections are due October 13, 2008 at 4:00 p.m. (Prevailing Eastern Time). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com-- is the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Through its team of more than 25,000 employees, Lehman Brothers offers a full array of financial services in equity and fixed income sales, trading and research, investment banking, asset management, private investment management and private equity. Its worldwide headquarters in New York and regional headquarters in London and Tokyo are complemented by a network of offices in North America, Europe, the Middle East, Latin America and the Asia Pacific region. The firm, through predecessor entities, was founded in 1850. Lehman filed for chapter 11 bankruptcy September 15, 2008 (Bankr. S.D.N.Y. Case No.: 08-13555). Lehman's bankruptcy petition listed $639 billion in assets and $613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. The September 15 Chapter 11 filing by Lehman Brothers Holdings, Inc., does not include any of its subsidiaries. Subsidiary LB 745 LLC, submitted a Chapter 11 petition on Sept. 16 (Case No. 08-13600). The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Luc A. Despins, Esq., and Wilbur F. Foster, Jr., Esq., at MILBANK, TWEED, HADLEY & McCLOY LLP, in New York, and Paul Aronzon, Esq., and Gregory A. Bray, Esq., at MILBANK in Los Angeles, California, represent the official unsecured creditors committee. International Operations Collapse Lehman Brothers International (Europe), the principal UK trading company in the Lehman group, was placed into administration, together with Lehman Brothers Ltd., LB Holdings PLC and LB UK RE Holdings Ltd. These are currently the only UK incorporated companies in administration. Tony Lomas, Steven Pearson, Dan Schwarzmann and Mike Jervis, partners at PricewaterhouseCoopers LLP, have been appointed as joint administrators to Lehman Brothers International (Europe) on September 15, 2008. The joint administrators have been appointed to wind down the business. Lehman Brothers Japan Inc. and Lehman Brothers Holdings Japan Inc. filed for bankruptcy in the Tokyo District Court on September 16. The two units of Lehman Brothers Holdings, Inc., which have filed for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, have combined liabilities of JPY4 trillion (US$38 billion). Lehman Brothers Japan Inc. reported about JPY3.4 trillion ($33 billion) in liabilities in its petition. Akio Katsuragi, a former Morgan Stanley executive, runs Lehman's Japan units. Lehman Brothers Asia Limited, Lehman Brothers Securities Asia Limited and Lehman Brothers Futures Asia Limited have suspended its operations with immediate effect, including ceasing to trade on the Hong Kong Securities Exchange and Hong Kong Futures Exchange, until further notice. The Asian units' asset management company, Lehman Brothers Asset Management Limited, will continue to operate on a business as usual basis. A further notice concerning the retail structured products issued by or arranged by any Lehman Brothers group company will be issued as soon as possible, a press statement said. LEINER HEALTH: Wants Until November 20 to File Chapter 11 Plan -------------------------------------------------------------- Leiner Health Products Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to further extend their exclusive periods to: a) file a Chapter 11 plan until Nov. 30, 2008; and b) solicit acceptances of that plan until Dec. 31, 2008. The Debtors remind the Court that they submitted a joint Chapter 11 plan of liquidation and a disclosure statement explaining the plan on July 18, 2008. The plan contemplates the liquidation of their estate, and the distribution of the sale proceeds and any other remaining assets to their creditors, the Debtors says. They filed an amended version of the plan on Aug. 22, 2008, the Debtor notes. The Court, the Debtors says, approved the adequacy of their disclosure statement on Aug. 21, 2008. A plan confirmation was set for Oct. 7, 2008, but was adjourned for Oct. 15, 2008, at 3:30 p.m. The Debtors say they need sufficient time to allow the plan confirmation process to continue unhindered by competing plans. This is the Debtors' third request for extension. The Debtors were expected to file their Chapter 11 plan on Aug. 10, 2008. About Leiner Health Based in Carson, California, Leiner Health Products Inc. -- http://www.leiner.com/-- manufactures and supplies store brand vitamins, minerals and nutritional supplements products, and over- the-counter pharmaceuticals in the US food, drug and mass merchant and warehouse club retail market. In addition to its primary VMS and OTC products, they provide contract manufacturing services. During the fiscal year ended March 31, 2007, the VMS business comprised approximately 61% of net sales. On March 20, 2007, they voluntarily suspended the production and distribution of all OTC products manufactured, packaged or tested at its facilities in the US. The company filed for Chapter 11 protection on March 10, 2008 (Bankr. D. Del. Lead Case No.08-10446). Jason M. Madron, Esq., and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A., represent the Debtors. The Debtors selected Garden City Group Inc. as noticing, claims and balloting agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors in these cases. The Committee selects Saul Ewing LLP as its counsel. As reported in the Troubled Company Reporter on April 10, 2008, the Debtors' schedules of assets and liabilities showed total assets of $133,412,547 and total debts of $477,961,526. LINK REC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Link Rec, Inc. aka Link Recreational Inc. 641 Shell Creek Road Minong, WI 54859 Bankruptcy Case No.: 08-35195 Type of Business: The Debtor is a boat dealer. Chapter 11 Petition Date: October 6, 2008 Court: District of Minnesota (St Paul) Judge: Dennis D O'Brien Debtor's Counsel: Steven B. Nosek, Esq. snosek@visi.com Law Offices of Steven Nosek 701 4th Avenue S., Suite 700 Minneapolis, MN 55415 Tel: (612) 335-9171 Fax: (612) 339-9545 Estimated Assets: Less than $50,000 Estimated Debts: $1,000,000 to $10,000,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/mnb08-35195.pdf LLOYD MELVIN: Case Summary & Seven Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Lloyd Melvin Wright 885 Woodstock Road Suite 430-397 Roswell, GA 30075 Bankruptcy Case No.: 08-79888 Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Georgia (Atlanta) Judge: Margaret Murphy Debtor's Counsel: Beth E. Rogers, Esq. brogers@berlawoffice.com Rogers Law Offices, Suite 201 4047 Holcomb Bridge Road Norcross, GA 30092 Tel: (678) 516-4965 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Debtor's Seven Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ American Express Credit card $5,420 P.O. Box 981537 purchases El Paso, TX 79998 American Express Credit card $2,867 P.O. Box 981537 purchases El Paso, TX 79998 Citi Bank $69,000 P.O. Box 6615 Fort Worth, TX 76161 Fulton County Tax $5,396 Commissioner 141 Pryor Street Atlanta, GA 30303 Household Bank $551 P.O. Box 80084 Salinas, CA 93912 Sallie Mae disputed $714 P.O. Box 9500 Wilkes Barre, PA 18773 Verizon Delaware disputed $301 500 Technology Drive Saint Charles, MO 63304 MACEDONIA MISSIONARY: Case Summary & 13 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Macedonia Missionary Baptist Church Ft. Worth Texas 2712 S. Freeway Fort Worth, TX 76104 Bankruptcy Case No.: 08-44614 Type of Business: The Debtor operates a church. Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: Rogena J. Atkinson, Esq. Law Offices of R. J. Atkinson, L.L.C. 3617 White Oak Drive Houston, TX 77007 Tel: (713) 862-1700 Fax: (713) 862-1745 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb08-44614.pdf MARCAL PAPER: PBGC Takes Responsibility for Pension Plan Shortfall ------------------------------------------------------------------ Jennifer Byrd of Pension & Investments (Ill.) reports that the Pension Benefit Guarantee Corporation has taken over the pension plan of Marcal Paper Mills, Inc. According to the report, PBGC estimates that the plan is 73% funded, with $18.7 million in assets to cover $25.7 million in benefit liabilities. The agency expects to be responsible for $5.4 million of the $7 million shortfall, the report said. After Marcal Paper's bankruptcy filing, it sold substantially all of its assets to NexBank SSB, an affiliate of Highland Capital Management, on Jan. 29, 2008, Pension & Investments reports, citing a news release from the PBGC. That transaction closed May 30 and did not include the pension plan. About Marcal Paper Mills Based in Elmwood Park, New Jersey, Marcal Paper Mills Inc. -- http://www.marcalpaper.com/-- is a privately-held, fourth generation family business. Founded in 1932, it employs more than 900 people in its Elmwood Park, New Jersey and Chicago, Illinois manufacturing operations. The company produces more than 160,000 tons of finished paper products, including bath tissue, kitchen towels, napkins and facial tissue, distributed to retail outlets for home consumption and to distributors for away-from- home use in hotels, restaurants, hospitals, offices and factories. The Debtor filed for chapter 11 protection on Nov. 30, 2006 (Bankr. D. N.J. Case No. 06-21886). Gerald H. Gline, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A. represent the Debtor. The Debtors selected Logan and Company Inc. as claims agent. Kenneth Rosen, Esq., and Mary E. Seymour, Esq., at Lowenstein Sandler PC represent the Official Committee of Unsecured Creditors. In its schedules filed with the Court, the Debtor disclosed total assets of $178,626,436 and total debts of $178,890,725. MARK IV: S&P Chips Corp. Credit Rating to 'B-'; Outlook Negative ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Mark IV Industries Inc. to 'B-' from 'B'. S&P also lowered its ratings on the company's debt issues. The outlook is negative. "The downgrades reflect Mark IV's high leverage and thin cash flow ratios, which remain weaker than our expectations for the previous ratings," said Standard & Poor's credit analyst Gregg Lemos Stein. With auto industry production declining sharply in North America and certain key European markets because of weak economic conditions, which may persist throughout 2009, S&P sees little room for improvement to these ratios. The ratings on Amherst, New York-based Mark IV reflect primarily the firm's highly leveraged financial risk profile. The company was sold to a different private equity sponsor last year, and Mark IV's debt was reduced slightly in the process. Still, free cash flow has been negative in recent years, reflecting declining automotive production volumes, and this has prevented the company from significantly reducing leverage or bolstering liquidity. Mark IV's business risk profile is constrained by its participation in cyclical and highly competitive automotive markets, although it has good geographic diversity, solid market positions in niche segments, and fair EBITDA margins. Mark IV's products include power transmission, air admission and cooling, information display and lighting products, and electronic toll equipment. About half of Mark IV's sales comes from automotive manufacturers, while 35% comes from the aftermarket, heavy-duty truck, and off-highway segments. Electronic toll equipment and information displays account for the remaining 15%. The company has relatively little exposure to the North American production of the struggling Michigan-based automakers, which represents just 5% of sales. The European automotive business of Mark IV was a relative bright spot until recently, but the company is now facing the prospect of declining production in that region because demand has eroded in Italy, France, and Spain. S&P expects Mark IV's free operating cash flow to be negative for the full fiscal year ending Feb. 28, 2009, which will prevent the company from improving leverage to 6x, which S&P expected for the previous rating. For the new rating, S&P expects leverage to remain under 7x and the company to maintain at least $75 million of total liquidity. Liquidity is adequate for now but could be stretched in future quarters if free operating cash flow remains persistently negative. S&P expects the company to generate some cash in its seasonally stronger third and fourth fiscal quarters, but an unabated decline in auto demand in Mark IV's key markets could overcome this seasonal pattern. The outlook is negative. Leverage remains high, and S&P expects free operating cash flow to remain negative, limiting potential for further deleveraging. S&P could lower the ratings if total liquidity, including cash and revolving credit facility availability, diminishes below $75 million. This could result from continued erosion of auto demand in Europe such that free operating cash flow remains negative in the fiscal third and fourth quarters. On the other hand, S&P could revise the outlook to stable or positive if Mark IV exceeds S&P's expectations for EBITDA improvement or produces positive free operating cash flow for several consecutive quarters, leading to a decline in leverage to about 6x and adequate room under bank covenants. S&P could raise the ratings if there is a substantial deleveraging to 5x or better, including its adjustments. However, S&P considers this highly unlikely in the next year, given the difficult operating conditions in the automotive industry and Mark IV's other end markets. MATTRESS DISCOUNTERS: Court Approves DLA Piper as Bankr. Counsel ---------------------------------------------------------------- Mattress Discounters Corporation and its debtor-affiliate Mattress Discounters Corporation East sought and obtained authority from the U.S. Bankruptcy Court for the District of Maryland to employ DLA Piper LLP as their bankruptcy counsel. DLA Piper is expected to: (a) advise the Debtors with respect to their rights, powers and duties as debtors and debtors in possession in the continued management and operation of their businesses and assets; (b) represente the Debtors in meetings and negotiations with representatives of creditors and other parties in interest; (c) advise and consult with the Debtors regarding the conduct of these cases, including all of the legal and administrative requirements of operating in Chapter 11; (d) advise the Debtors on matters relating to the evaluation of the assumption, rejection or assignment of unexpired leases and executory contracts; (e) take all necessary action to protect and preserve the Debtors' estates, including the prosecution of actions on their behalf, the defense of any actions commenced against the estates, negotiations concerning all litigation in which the Debtors may be involved and objections to claims filed against the estates; (f) assist the Debtors in formulating and proposing a plan of reorganization and disclosure statement and all related agreements and documents, and taking any necessary action on behalf of the Debtors to obtain confirmation of such plan; (g) appear in proceedings before this and other courts and the Office of the United States Trustee; and (h) provide other necessary and appropriate legal services and advice to the Debtors in connection with these Chapter 11 cases. C. Kevin Kobbe, a partner at DLA Piper, discloses that the firm's professionals bill: Professional Designation Hourly Rate ------------ ----------- ----------- C. Kevin Kobbe Partner $630 Ann Marie Bredin Associate $550 Nicholas M. Miller Associate $465 Shaan S. Chima Associate $310 William L. Countryman Legal Assistant $215 To the best of the debtors' knowledge, DLA Piper does not hold or represent any interest materially adverse to the Debtors' estates. the Debtors submit that DLA Piper is a "disinterested person" as defined in the U.S. Bankruptcy Code. Based in Upper Marlboro, Maryland, Mattress Discounters Corp. is a specialty mattress retailer. The company and Mattress Discounters Corporation East filed separate petitions for Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos. 08-21642 and 08-21644). When Mattress Discounters Corp. filed for protection from its creditors, it listed assets of between $10 million and $50 million, and debts of between $10 million and $50 million. This is the second bankruptcy filing for Mattress Discounters Corp. The Debtor first filed for Chapter 11 protection on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330). Mary Joanne Dowd, Esq., at Arent Fox LLP, represented the Debtor as counsel. The Debtor emerged from its first bankruptcy filing on March 14, 2003. MBD INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: MBD, Inc. aka Meghdadi Builder Developer 3211 Cohasset Rd #100 Chico, CA 95973 Bankruptcy Case No.: 08-34347 Type of Business: The Debtor operates a construction company. Chapter 11 Petition Date: October 6, 2008 Court: Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: William C. Lewis, Esq. 510 Waverley Street Palo Alto, CA 94301 Tel: (650) 322-3300 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Chico mortgage fee $125,000 411 Main Street PO Box 3420 Chico, CA 95927 Thomas and Nancy Richardson deposit $40,162 1367 E. Lassen Avenue, Suite A2 Chico, CA 95928 Charles Crabtree Painting painting $30,052 PO Box 1291 Chico, CA 95927 Boys and Girls Club capital pledge $30,000 Community Construction $26,757 Thomas Smith and Company accounting fees $23,225 William A. Ward, Esq. legal fees $18,793 The Carpet Store flooring $12,531 Edkelbarger and Son Inc. stucco $9,608 McClelland Air Conditioning HVAC $8,188 Otis Elevator Company $8,029 Ginno's Kitchen and Appliance appliances $7,601 Northern Lights and Accents lightning $7,477 Longfellow Lumber Co. Inc. trusses $5,750 Steve Munjar Inc. plumbing $5,680 AICCO Inc. liability insurance $4,397 Matthews Redimix LLC concrete $3,963 Pita Management Inc. security deposit $3,463 Mooney Farms security deposit $3,017 BCHM Corporation security deposit $2,875 MERVYNS LLC: Gets Panel's Support on Initial Strategic Plan ----------------------------------------------------------- Mervyns LLC disclosed in a company statement dated Sept. 19, 2008, that it has presented a preliminary strategic plan to the Official Committee of Unsecured Creditors. According to the statement, the Creditors Committee, which comprises certain major vendors, landlords and other creditors of Mervyns, discussed with the Company its operational initiatives, cost savings, liquidity position and funding needs in order to emerge as a reorganized company. The Creditors Committee supports the Company's restructuring efforts, the company said. "We are pleased to be working constructively with the Creditors Committee and to have received this positive response to our preliminary strategic initiatives," said John Goodman, chief executive officer of Mervyns. "Additionally, on the operational side, the Committee is supportive of the progress we have made to date in realigning our business operations," Mr. Goodman said. "Our stores are performing above plan and we have strengthened our relationships with vendors. Mervyns has made great strides in a short time, and we are confident that our restructuring efforts will position the Company to compete successfully in the future." About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provides a mix of top national brands and exclusive private labels. Mervyns has 176 locations in seven states. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors' financial advisor is Miller Buckfire & Co. LLC. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. (Mervyn's Bankruptcy News, Issue 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) MERVYN'S LLC: Panel Can Hire Cooley Godward as Lead Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors in Mervyn's LLC and its debtor-affiliates' Chapter 11 cases obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain Cooley Godward Kronish LLP as lead counsel. Cooley Godward is expected to: (a) attend meetings of the Committee; (b) review financial information furnished by the Debtors to the Committee; (c) negotiate the budget and the use of cash collateral; (d) review and investigate the liens of purported secured parties; (e) confer with the Debtors' management and counsel; (f) coordinate efforts to sell or reorganize assets of the of the Debtors in a manner that maximizes the value for unsecured creditors; (g) review the Debtors' schedules, statements of affairs and business plan; (h) advise the Committee as to the ramifications regarding all of the Debtors' activities and motions before the Court; (i) file appropriate pleadings on behalf of the Committee; (j) review and analyze the Debtors' financial advisor's work product and report to the Committee; (k) provide the Committee with legal advice in relation to the case; (l) prepare various applications and memoranda of law submitted to the Court for consideration and handle all other matters relating to the representation of the Committee that may arise; (m) assist the Committee in negotiations with the Debtors and other parties-in-interest on an exit strategy for the Debtors' cases; and (n) perform other legal services for the Committee as may be necessary or proper. According to the Committee, Cooley Godward has coordinated with Ashby & Geddes, P.A. regarding responsibilities in connection with their representation and will make make every effort to avoid duplication of services. The Committee says Cooley Godward's attorneys have extensive experience in representing creditors committees in sophisticated Chapter 11 retail proceedings. The professionals who will provide services to the Committee and their customary rates are: Attorney Status Hourly Rate -------- ------ ----------- Jay R. Indyke Partner $760 Cathy R. Hershcopf Partner $680 Ronald R. Sussman Partner $735 Gregory G. Plotko Associate $535 Gustavo Ordonez Associate $535 Seth Van Aalten Associate $470 Richelle Kalnit Associate $375 Jay R. Indyke, attorney of Cooley Godward assured the Court that his firm is a "disinterested person", as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1103(b). Prior to the approval, Karen B. Skomorucha, Esq., at Ashby & Geddes, PA, in Wilmington, Delaware, filed a certificate of no objection regarding the application. About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provides a mix of top national brands and exclusive private labels. Mervyns has 176 locations in seven states. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The Debtors' financial advisor is Miller Buckfire & Co. LLC. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. (Mervyn's Bankruptcy News, Issue 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) MERVYN'S LLC: Court Extends Lease Decision Period to February 23 ---------------------------------------------------------------- Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware extended the deadline within which Mervyn's LLC and its debtor-affiliates may assume or reject real property leases to Feb. 23, 2009. At the hearing on the Motion, Judge Gross said he was satisfied that the Debtors have demonstrated "cause" for the requested extension. Judge Gross overruled C.E. Bassett 1, LP's objection saying, "There are significant financial risks that the [D]ebtor faces without the extension at this time, namely the loss of $4 million of liquidity which is clearly significant." Prior to the Court's approval of the extension, Neil Herman, Esq., at Morgan Lewis & Bockius, counsel for the Debtors, informed Judge Gross that the Debtors have settled the objections of North 3 Holdings, LLC, Byer Properties, and The Macerich Company. Mr. Herman withdrew DeRito Pavilions 140, LLC's lease from the Motion. Mr. Herman said the Debtors will evaluate the potential range of value the lease may have. Both parties agreed to reserve their rights to assume or seek extension at a later time. Accordingly, the Court held that the Extension Order will not be applicable to the real property leases between the Debtors and: * The Macerich Company; * DeRito Pavilions 140, LLC; * North 3 Holdings, LLC; and * Byer Properties. About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provides a mix of top national brands and exclusive private labels. Mervyns has 176 locations in seven states. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. (Mervyn's Bankruptcy News, Issue 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) MERVYN'S LLC: Panel Can Hire Ashby & Geddes as Delaware Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in Mervyn's LLC and its debtor-affiliates' Chapter 11 cases obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain Ashby & Geddes, PA as its Delaware counsel. Prior to the approval, Karen B. Skomorucha, Esq., at Ashby & Geddes, PA, in Wilmington, Delaware, filed a certificate of no objection regarding the application. As the Committee's counsel, Ashby & Geddes is expected to: (a) provide legal advice regarding the rules and practices of the Court applicable to the Committee's powers and duties as an official committee appointed under Section 1102 of the Bankruptcy Code; (b) provide legal advise regarding any disclosure statement and plan filed in the Debtors' cases with respect to the process for approving or disapproving a disclosure statement and confirming or denying confirmation of a plan; (c) prepare and review applications, motions, complaints, answers, orders, agreements and other legal papers filed on behalf of the Committee for compliance with the rules and practices of the Court; (d) appear in Court to present necessary motions, applications and pleadings and otherwise protect the interests of the Committee and unsecured creditors of the Debtors; and (e) perform other legal services for the Committee as it believe may be necessary and proper in the Chapter 11 cases. Ashby & Geddes will be paid based on the firm's current hourly rates: Professional Profession Hourly Rate ------------ ---------- ----------- William P. Bowden Member $525 Amanda M. Winfree Associate $265 Karen B. Skomorucha Associate $265 Anthony Dellose Paralegal $175 Ashy & Geddes will also be reimbursed for its expenses incurred. William P. Bowden, Esq., a member of Ashby & Geddes, P.A. tells the Court that his firm is "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code and does not hold or represent an interest adverse to the Committee or the Debtors' unsecured creditors. According to Mr. Bowden, a list of the potential parties-in- interest that Ashby & Geddes has represented, currently represents, or may in the future represent in matters unrelated to the Debtors is available for free at: http://ResearchArchives.com/t/s?3365 About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provides a mix of top national brands and exclusive private labels. Mervyns has 176 locations in seven states. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. (Mervyn's Bankruptcy News, Issue 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) MERVYN'S LLC: Can Hire Bayard P.A. as Special Conflicts Counsel --------------------------------------------------------------- Mervyn's LLC and its debtor-affiliates obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Bayard, P.A., as their special conflicts counsel, in connection with the investigation -- and if appropriate, prosecution -- of potential claims and causes of action arising out of certain transactions which took place in 2004. Bayard is expected to perform these services: (i) Represent the Debtors in the investigation of the Claims and, if appropriate, commence litigation with respect to the Claims, including, without limitation actions to recover fraudulent conveyances; and (ii) Perform additional services within the area of corporate, litigation and related matters that may arise in connection with the litigation as the Debtors and Bayard may agree from time to time. Bayard will be paid based on the firm's current hourly rates: Professional Hourly Rate ------------ ------------ Directors $845-$765 Associates and Counsel $210-$395 Paralegals and Case Management Assistants $125-$230 Neil B. Glassman, a director and shareholder of Bayard, P.A., assures the Court that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Nevertheless, Mr. Glassman discloses that these parties are current or past clients of the firm in matters unrelated to the Debtors' cases: (a) LaSalle Bank, N.A. (b) Target, Limited, Inc. In addition, Mr. Glassman says, his firm may be currently representing, or in the past represented, these parties which may have been adverse to the Debtors, but in matters unrelated to the Debtors' Chapter 11 cases: (1) Cerberus (2) Goldman Sachs (3) LaSalle Bank, N.A. (4) Target, Inc. About Mervyn's LLC Headquartered in the San Francisco Bay Area, Mervyn's LLC -- http://www.mervyns.com/-- provides a mix of top national brands and exclusive private labels. Mervyns has 176 locations in seven states. Mervyns stores have an average of 80,000 retail square feet, smaller than most other mid-tier retailers and easier to shop, and are located primarily in regional malls, community shopping centers, and freestanding sites. The company and its affiliates filed for Chapter 11 protection on July 29, 2008, (Bankr. D. Del. Lead Case No.: 08-11586). Howard S. Beltzer, Esq., and Wendy S. Walker, Esq., at Morgan Lewis & Bockius LLP, and Mark D. Collins, Esq., Daniel J. DeFranceschi, Esq., Christopher M. Samis, Esq. and L. Katherine Good, Esq., at Richards Layton & Finger P.A., represent the Debtors in their restructuring efforts. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Mervyn's LLC's balance sheet at Aug. 30, 2008, showed $665,493,000 in total assets and $717,160,000 in total liabilities resulting in a $51,667,000 total stockholders' deficit. (Mervyn's Bankruptcy News, Issue 7; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) METALDYNE CORP: S&P Cuts Credit Rating to 'CCC+'; Outlook Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Metaldyne Corp. to 'CCC+' from 'B-'. S&P also lowered the ratings on the company's senior secured and subordinated debt. The outlook is negative. "The downgrade reflects our view that sharply lower production by several automaker customers during the next several quarters, if not longer, will pressure the company's liquidity further," said Standard & Poor's credit analyst Robert Schulz. This will test the commitment of unrated parent company Asahi Tec Corp. The ratings reflect the company's vulnerable business risk profile as a supplier heavily exposed to the Michigan-based automakers, and its highly leveraged financial profile characterized by negative cash flow and limited liquidity. Metaldyne is one of the largest independent manufacturers of engineered metal components for the global automotive market and has revenues of nearly $2 billion. Lower automaker production levels have pressured Metaldyne's sales and margins despite the company's leadership position in certain niche market segments, good engineering capabilities, and fair customer and platform diversity. Revenues declined 8.6% year over year in the fiscal first quarter ended June 30, 2008, because of lower volumes. S&P is more concerned, however, about the effect on credit ratios over the next few quarters because lower customer production will continue to hurt performance. The company has been relatively successful in recovering raw material prices, but these efforts will need to remain fruitful even as volume declines hurt certain customers' ability to absorb higher costs. Metaldyne's liquidity is constrained. The company was cash-flow-negative for the quarter ended June 29, 2008, and S&P expects negative free operating cash flow in the fiscal year ending March 31, 2009. Capital spending should begin to moderate after several years of significant spending, but cash from operating activities less capital spending could be negative in the current fiscal year. The outlook is negative. S&P is concerned about Metaldyne's ability to maintain near-term liquidity amidst challenging industry conditions. Cash flow will likely be negative in the current fiscal year. Therefore, although S&P expects the need for parent support to grow, Metaldyne would need to have two consecutive quarters in any four-quarter period when it does not cure a covenant violation with parent equity contributions. Otherwise, lender consent would be required. S&P could lower the ratings if availability under the revolving facility appears headed below $40 million, compared to $71 million at June 30, 2008, or if the company is unable to comply with financial covenants for the remainder of the fiscal year. S&P could raise the ratings if the company had enough cash flow to eliminate the need for parent support, along with improved liquidity, but it does not expect this to occur in the next several quarters. MGM MIRAGE: Amends Terms of $7,000,000,000 BofA Credit Facility --------------------------------------------------------------- MGM MIRAGE disclosed in a Securities and Exchange Commission filing that it has entered into Amendment No. 1 to the Amended and Restated Loan Agreement dated as of October 3, 2006, by and among: -- MGM MIRAGE, as borrower, and MGM Grand Detroit, LLC, as co-borrower; -- the Lenders and Co-Documentation Agents; -- Bank of America, N.A., as Administrative Agent; -- the Royal Bank of Scotland PLC, as Syndication Agent; -- Bank of America Securities LLC and The Royal Bank of Scotland PLC, as Joint Lead Arrangers; and -- Bank of America Securities LLC, The Royal Bank of Scotland PLC, J.P. Morgan Securities Inc., Citibank North America, Inc. and Deutsche Bank Securities Inc. as Joint Book Managers. In August 2008, the senior credit facility has a total capacity of $7 billion, which matures in 2011. The Company has the ability to solicit additional lender commitments to increase the capacity to $8 billion. The components of the senior credit facility include a term loan facility of $2.5 billion and a revolving credit facility of $4.5 billion. At June 30, 2008, the Company had approximately $1.7 billion of available borrowing capacity under the senior credit facility. In February 2008, the Company repaid the $180.4 million of 6.75% senior notes at maturity using borrowings under the senior credit facility. In May 2007, the Company issued $750 million of 7.5% senior notes due 2016. In June 2007, the Company repaid the $710 million of 9.75% senior subordinated notes at maturity. In August 2007, the Company repaid the $200 million of 6.75% senior notes and the $492.2 million of 10.25% senior subordinated notes at maturity using borrowings under the senior credit facility. The Company's long-term debt obligations contain customary covenants requiring the Company to maintain certain financial ratios. At June 30, 2008, the Company was required to maintain a maximum leverage ratio (debt to EBITDA, as defined) of 6.5:1 and a minimum coverage ratio (EBITDA to interest charges, as defined) of 2.0:1. At June 30, 2008, the Company's leverage and interest coverage ratios were 3.7:1 and 4.3:1, respectively. The Amendment increases the maximum total leverage ratio, modifies drawn and undrawn pricing levels as well as revises certain definitions and limitations on secured indebtedness. A copy of the amended loan agreement is available free of charge at http://researcharchives.com/t/s?3373 "We are pleased by the overwhelming support our financial partners have shown in our Company," said Dan D'Arrigo, Executive Vice President and CFO of MGM MIRAGE. "MGM enjoys one of the strongest balance sheets in our industry and although we have remained comfortably within all of our financial requirements, we believe it is a prudent course of action to maintain greater financial flexibility in these uncertain credit markets." About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled Company Reporter on Sept. 5, 2008, Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based MGM MIRAGE to negative from stable. Ratings on the company, including the 'BB' corporate credit rating, were affirmed. As reported in the Troubled Company Reporter on Aug. 12, 2008, Fitch Ratings has affirmed MGM MIRAGE's ratings and revised its Outlook to Negative from Stable as: Issuer Default Rating 'BB'; Senior credit facility 'BB'; Senior notes 'BB'; and Senior subordinated notes 'B+'. MGM MIRAGE: Amends Operating Agreement with Kerzner Istithmar ------------------------------------------------------------- MGM Mirage disclosed in a Securities and Exchange Commission filing that on Sept. 30, 2008, through IKM MGM, LLC, its wholly owned subsidiary, entered into Amendment No. 1 to certain operating agreement dated Sept. 10, 2007, with Kerzner Istithmar Las Vegas LLC as members, and IKM MGM Management, LLC and Kerzner Concepts Limited as managers. The parties are continuing their comprehensive review of the casino resort project and accordingly have entered into Amendment No. 1 to extend the design and planning stage of such project to March 10, 2010. A copy of the amendment to the operating agreement is available free of charge at: http://researcharchives.com/t/s?3370 About MGM Mirage Headquartered in Las Vegas, Nevada, MGM Mirage (NYSE: MGM) -- http://www.mgmmirage.com/-- is a hotel and gaming company. It owns and operates 17 properties located in Nevada, Mississippi and Michigan, and has investments in three other properties in Nevada, New Jersey and Illinois. * * * As reported in the Troubled Company Reporter on Sept. 5, 2008, Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based MGM MIRAGE to negative from stable. Ratings on the company, including the 'BB' corporate credit rating, were affirmed. As reported in the Troubled Company Reporter on Aug. 12, 2008, Fitch Ratings has affirmed MGM MIRAGE's ratings and revised its Outlook to Negative from Stable as: Issuer Default Rating 'BB'; Senior credit facility 'BB'; Senior notes 'BB'; and Senior subordinated notes 'B+'. MICHAEL VICK: Proposes to Use Up to 1/3 of Income to Settle Debts ----------------------------------------------------------------- Dave Forster at The Virginian-Pilot reports that Michael Vick proposed in his reorganization plan that he would hand over up to one-third of his income, including signing bonuses, to settle his debts, if he made it back to pro football. According to The Virginian-Pilot, Mr. Vick and his lawyers already submitted the Plan to the U.S. Bankruptcy Court for the Eastern District of Virginia on Thursday. The Virginian-Pilot relates that under the Plan, Mr. Vick would retain the first $750,000 of his adjusted gross income from the years 2010 to 2015. He would then give an increasingly higher percentage of his income over to his creditors, the report says. Three of Mr. Vick's properties -- except his $1.5 million house in northern Suffolk -- would be liquidated for creditors, the report states. Court documents say that Mr. Vick's lawyers asked the Hon. Frank Santoro last Friday to appoint a mediator to help resolve the case, and the judge will issue a ruling on the request after the creditors discuss it. Michael Dwayne Vick, born June 26, 1980 in Newport News, Virginia, is a suspended National Football League quarterback under contract with the Atlanta Falcons team. In 2007, a U.S. federal district court convicted him and several co-defendants of criminal conspiracy resulting from felonious dog fighting and sentenced him to serve a 23 months in prison. He is being held in the United States Penitentiary at Leavenworth, Kansas. Mr. Vick is also under indictment for two related Virginia state felony charges for his role in the dogfighting ring and related gambling activity. His state trial has been delayed until he is released from federal prison. He faces a maximum 10-year state prison term if convicted on both counts. The Federal Bureau of Prisons posted on its Web site that Mr. Vick's projected release date is July 20, 2009. Mr. Vick filed chapter 11 petition on July 7, 2008 (Bankr. E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent the Debtor in his restructuring efforts. Mr. Vick listed assets of $16.1 million and debts of $20.4 million in his bankruptcy filing. MIDNIGHT PROPERTIES: Will Auction Bon Secour to Pay Wachovia ------------------------------------------------------------ Derek Price at The Cullman (Alabama) Times reports that the Hon. Kristi K. DuBose of the U.S. Bankruptcy Court for the Northern District of Alabama ruled that Midnight Properties LLC and its affiliates must auction Bon Secour Village, its $500 million, 880-acre coastal development, by year-end to pay their more than $20 million debt to Wachovia Bank, their largest creditor. According to The Cullman Times, Bon Secour Village was originally designed to be a "town within a town" with parks, residential areas, shops, restaurants, and courtyards. The Cullman Times relates that Eddie Canaday, one of the village's developers, said, "We're also working with our creditors so they can get everything they can out of the assets. We're cooperating 100 percent with all of them." The Cullman Times states that Midnight Properties' other creditors are: -- People's Bank, which is owed more than $5.8 million from three loans; -- Cullman Savings Bank, which is owed almost $1.5 million; -- Steamboat Alabama, owed $17.9 million; -- Florida Mercantile Bank, owed $17.9 million; -- Fairfield Financial Service, owed $10.5 million; -- First National Bank of Florida, owed $6.9 million; -- AB&T National Bank, owed $3.3 million; -- FirstBank Florida, owed $2.8 million; -- Ventana Tampa LLC, owed $2.8 million; -- Regions Bank, owed $2.7 million; -- Pinnacle Bank, owed $2.4 million; -- Brasfield & Gorrie, owed $2.2 million; and -- Roy Hockman, owed $2 million. Mr. Canaday, according to The Cullman Times, said he will rebuild his business once the economy rebounds. Cullman, Alabama-based Midnight Properties LLC and its affiliates -- http://www.midnightproperties.com/-- are property investment companies that specialize in beach front condominiums and homes located throughout the Alabama Gulf Coast and Florida panhandle. The company and three affiliates, Joseph H. Canaday, Jr. aka Josh Canaday, Edward A. Canaday, and Michael M. Knight, filed for chapter 11 protection on April 15, 2008 (Bankr. N.D. Ala. Case Nos. 08-81143 through 08-81146). Judge Jack Caddell presides in the case. Garland C. Hall, III, Esq., at Chenault, Hammond & Hall represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets and debts of between $10 million and $50 million. MOHAMMED HAYAT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Mohammed Fayyaz Hayat 4949 Rockwood Dr. San Angelo, TX 76905 Bankruptcy Case No.: 08-60155 Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Texas (San Angelo) Judge: Robert L. Jones Debtor's Counsel: Ronald M. Mapel, Esq. mapat@wtxcoxmail.com Law Offices of Ronald M. Mapel 40 West Twohig, Suite 213 San Angelo, TX 76903 Tel: (325) 658-8579 Total Assets: $1,777,150 Total Debts: $2,520,978 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb08-60155.pdf MONROE CENTER: US Trustee to Hold Meeting to Form Panel on Oct. 8 ----------------------------------------------------------------- The United States Trustee for Region 3, will hold an organizational meeting in the joint administered Chapter 11 cases of Monroe Center Management, LLC and Monroe Center, LLC on October 8, 2008 at 11:00 a.m. at U.S. Trustee's Office, One Newark Center, 14th Floor, Room 1401 in Newark, New Jersey. 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 Monroe Center Based in Hoboken, New Jersey -- Monroe Center LLC filed for Chapter 11 protection on September 10, 2008 (Bankr. D. N.J. Case No. 08-27203). Joseph Markowitz, Esq. at Markowitz, Gravelle & Schwimmer represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated debts of $10 million to $50 million. MONTAGE II: Bankruptcy Cancels Foreclosure Sale of Land ------------------------------------------------------- The bankruptcy filings of Montage II LLC, Lindsay and Chandler Heights LLC and Southern Views @ South Mountain LLC, on Sept. 29, has caused the cancellation of a foreclosure sale of land that Charlevoix Homes LLC and its successor, Copperleaf Communities Inc., was developing in Chandler, according to a report by Peter Corbett of The Arizona Republic. The auction was scheduled Sept. 30. The three entities that filed for bankruptcy were affiliated with failed Scottsdale builder Michael Roberts, founder of Charlevoix Homes. Charlevoix filed for Chapter 7 bankruptcy liquidation in August. Mr. Roberts filed a Chapter 7 bankruptcy petition in July, reporting $118 million in debt. Scottsdale, Arizona-based Montage II, LLC, filed for Chapter 11 bankruptcy on Sept. 29, 2008 (Bankr. D.Ariz., Case No.: 08-13221). The Debtor listed assets of $10 million to $50 million and debts of $10 million to $50 million when it filed for bankruptcy. MPF CORP: Cosco Shipyard Sues to Recover Balance Due on MPF-01 -------------------------------------------------------------- China's Cosco Shipyard is pursuing legal action to recover the balance of the payment due from the work done by it on MPF Corp. Ltd.'s floating production and drilling unit MPF-01, EnergyCurrent New Digest's Hwee Hwee Tan reported. According to the report, Cosco has received 80 percent payment for completing the contracted work on the hull construction. The vessel is now sitting at the shipbuilder's Dalian shipyard in China, according to a Cosco spokesman. EnergyCurrent reports that MPF Corp. Ltd. was forced to file for Chapter 11 under the provisions of the U.S. Bankruptcy Code and provisional liquidation in Bermuda after exhausting its financial resources. The Bermuda-based company has reportedly began a process of selling or refinaning the MPF-01 project after experiencing substantial project cost overruns in June 2008. The project has been funded by its bondholders since mid-2008. MPF is now seeking a suitable buyer for the hull and the equipment purchased for the project. MPF-01 was previously contracted to start work on a three- to five-year charter with Petrobras. Headquartered in Bermuda, MPF Corp. Ltd. -- http://www.mpf- corp.com/ -- engages in deep water oil and gas exploration. The company was established on April 25, 2006. The company and debtor-affiliate MPF Holding US LLC filed separate petitions for Chapter 11 relief on Sept. 24, 2008 (Bankr. S.D. Tex. Case Nos. 08-36086 and 08-36084). D. Bobbitt Noel, Jr., Esq. at Vinson & Elkins LLP represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $100 million to $500 million, and the same range of debts. NAMWEST-PALMS LLC: Files for Chapter 11 Bankruptcy in Arizona ------------------------------------------------------------- Namwest-Palms, LLC, a limited liability corporation formed by Cave Creek-based developer Namwest Communities, has filed for bankruptcy, Erin Zlomek of The Arizona Republic reports. The report says that in 2005, the company opened model homes at the 3 J's Country Estates, a housing development also known as Montecito Estates, located east of El Mirage Boulevard and north of Thompson Ranch and Greenway roads, according to El Mirage (Arizona) planning and zoning records. The Arizona Republic says the company had not completed the project at the time of the bankruptcy filing. Namwest Communities also has housing developments in Sun City and Tempe, Florida. Only the El Mirage project is affected by the bankruptcy case. Based in Phoenix, Arizona, Namwest-Palms, LLC was formed to develop the Montecito Estates' housing project in El Mirage, Arizona. The company filed for Chapter 11 relief on Sept. 22, 2008 (Bankr. D. Ariz. Case No. 08-12744). Carolyn J. Johnsen, Esq., at Jennings, Strouss & Salmon, P.L.C. represents the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $1 million to $10 million, and debts of $1 million to $10 million. ON SEMICONDUCTOR: Joint Bid with MTI Cues S&P to Put Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit and other ratings on Phoenix, Arizona-based ON Semiconductor Corp. on CreditWatch with negative implications following the company's announcement that it is joining San Jose, California-based Microchip Technology Inc.'s bid to purchase Atmel Corp. for $2.3 billion in cash. Microchip is leading the deal and intends to sell Atmel's non-volatile memory as well as RF (Radio Frequency) and automobile assets to ON semiconductor. ON estimates these assets generated a combined $650 million in revenues and could cost ON up to $1 billion to purchase. These assets would both compliment and bolster's ON's strengths in these end markets. As of Sept. 30, 2008, ON had more than $400 million in total cash and equivalents and $260 million of additional availability under its existing credit facilities. The company expects to finance the deal through some combination of cash, existing facility borrowings and additional financings. ON's current operating lease adjusted leverage is in the low 3x area. S&P plans to meet with ON's management to review the company's proposed financing for the transaction, ultimate capital structure, cost synergies, and its strategy to merge the units into ON's operations, in order to resolve the rating. PATRIOT HOMES: Given Until Nov. 7 to File Schedules, Creditor List ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Indiana has granted Patriot Homes Inc. and its debtor-affiliates until Nov. 7, 2008, to file a list of creditors together with a Schedule of Assets and Liabilities, Schedules of Current Income and Expenditures, and a Statement of Financial Affairs, without prejudice to their right to seek further extensions from the Court, or to seek a waiver of specific filing requirements. Pursuant to section 521(a)(1) of the Bankruptcy Code, a debtor must file with the applicable court the List of Creditors and the Schedules and Statements. Bankruptcy Rule 1007(a)(1) provides that the List of Creditors should generally be filed with the petition, while Bankruptcy Rule 1007(c) allows a debtor to file its Schedules and Statements within 15 days of the commencement date of its bankruptcy case. The Debtors told the Court that because of the complex nature of their businesses, the large number of creditors, the timing of the bankruptcy filings, limited staff available to perform the required internal review of the debtors' business and affairs, and numerous other matters incident to their bankruptcy filings, it was impossible to prepare and file an accurate and comprehensive list of creditors along with their petition, and that the 15-day automatic extension of time to file the Schedules and Statements allowed under Bankruptcy Rule 1007(c) will not be sufficient. Headquartered in Middlebury, Indiana, Patriot Homes, Inc. -- http://www.patriothomes.com/-- makes modular houses. The Debtor and 7 of its debtor-affiliates filed separate motions for Chapter 11 relief on Sept. 28, 2008 (Lead Case No. 08-33347). Bell Boyd & Lloyd, LLP, is the Debtors' proposed counsel. In its filing, Patriot homes listed between $10 million and $50 million in assets and between $10 million and $50 million in debts. PATRIOT HOMES: Taps Bell Boyd as Bankruptcy Counsel --------------------------------------------------- Patriot Homes, Inc., and its debtor-affiliates ask the U.S. Bankruptcy Court for the Northern District of Indiana for permission to employ Bell, Boyd & Lloyd LLP as their attorneys, nunc pro tunc to the petition date. As the Debtors' counsel, Bell Boyd will mainly advise the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of thier business and properties as well as perform legal services that will be necessary during the pendency of their Chapter 11 cases, including, without limitation, (i) the analysis of the Debtors' leases and executory contracts and the assumption, rejection or assignment thereof, (ii) the analysis of the validity of liens against the Debtors, and (iii) advice on corporate, litigation, and other matters. Bell Boyd's professionals who will be primarily responsible for providing services to the Debtors and their hourly rates are: Professional Designation Hourly Rate ------------ ----------- ----------- Harry J. Goldstein, Esq. Partner $505 Sven T. Nylen, Esq. Senior Associate $325 Legal Assistants $180-$225 To the best of the Debtors' knowledge, Bell Boyd does not hold or represent any interest adverse to the Debtors' estates, and the firm is a "disinterested person", as that term is defined in Sec. 101(14), as modified by Section 1107)b) of the Bankruptcy Code. Headquartered in Middlebury, Indiana, Patriot Homes, Inc. -- http://www.patriothomes.com/-- makes modular houses. The Debtor and seven of its debtor-affiliates filed separate motions for Chapter 11 relief on Sept. 28, 2008 (Lead Case No. 08-33347). In its filing, Patriot Homes, Inc., listed between $10 million and $50 million in assets and between $10 million and $50 million in debts. PATRIOT HOMES: Section 341(a) Meeting Set for November 7 -------------------------------------------------------- The United States Trustee for Region 10 will convene a meeting of Patriot Homes, Inc.'s creditors at 3:00 p.m., on Nov. 7, 2008, at Michiana Square, 5th Floor, South Bend, in South Bend, Indiana. 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 officer of the Debtor under oath about his financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Middlebury, Indiana, Patriot Homes, Inc. -- http://www.patriothomes.com/-- makes modular houses. The Debtor and 7 of its debtor-affiliates filed separate motions for Chapter 11 relief on Sept. 28, 2008 (Lead Case No. 08-33347). Bell Boyd & Lloyd, LLP, is the Debtors proposed counsel. In its filing, Patriot Homes listed between $10 million and $50 million in assets and between $10 million and $50 million in debts. PENN TREATY: S&P Junks Rating on Announced Policy Recapturing ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit and financial strength ratings on Penn Treaty Network America Insurance Co. to 'CC' from 'B-' and placed the ratings on CreditWatch with negative implications. The downgrade reflects the announcement by PTNA's parent company, Penn Treaty American Corp., that on Jan. 1, 2009, it will voluntarily recapture all reinusured policies under several agreements with Imagine International Reinsurance Ltd. PTNA will then be considered insolvent on a statutory basis. When this happens, PTNA would be placed under voluntary rehabilitation under the Pennsylvania Insurance Department unless a strategic alternative that provides for adequate statutory surplus is in place prior to Jan. 1, 2009. "These events place PTNA in an extremely weak financial condition," noted Standard & Poor's credit analyst Neal Freedman. If the Pennsylvania Insurance Department places PTNA in rehabilitation, S&P will revise the ratings to 'R', indicating the company is under regulatory supervision owing to its financial condition. If any binding agreement occurs that would provide enough statutory capital or commitment prior to Jan. 1, 2009, to prevent statutory insolvency, S&P will likely revise the CreditWatch status of the ratings to developing. PENN TREATY: Best Puts 'D' FSR After Announced Policy Recapturing ----------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to D(Poor) from B-(Fair) and issuer credit ratings to "c" from "bb-" of Penn Treaty American Corporation's (Allentown, PA) insurance subsidiaries. Penn Treaty's insurance subsidiaries include Penn Treaty Network America Insurance Company, American Network Insurance Company (both of Allentown, PA) and American Independent Network Insurance Company of New York (New York). Concurrently, A.M. Best has downgraded the ICR to "c" from "ccc" of Penn Treaty. The outlook for all ratings is negative. These rating actions are in response to Penn Treaty's announcement that it has notified Imagine International Reinsurance Limited (Ireland) of its intention to recapture on January 1, 2009, all long-term care insurance policies reinsured by Imagine. In August 2008, Imagine stated it was not willing to provide additional collateral in the form of letters of credit associated with business issued prior to 2002. Until 2008, Imagine had been providing increasing LOCs as part of the "old co" reinsurance agreement, which had enhanced Penn Treaty's statutory surplus position. Penn Treaty does not have enough statutory capital and surplus to recapture this business. Additionally, Penn Treaty's insurance entities recently have reported weakened statutory surplus due to large operating losses. This position has been further eroded by the recent failure of Washington Mutual, which represented a sizeable portion of Penn Treaty's June 30, 2008 statutory surplus position. While Penn Treaty recently announced plans to sell its wholly owned subsidiary, United Insurance Group Agency, Inc., unless a major strategic capital alternative is in place prior to Jan. 1, 2009, Penn Treaty's primary insurance subsidiary would be considered insolvent under Pennsylvania statute. Given the current turmoil in the capital markets and the extremely poor performance of its "old co" business, A.M. Best believes Penn Treaty will be extremely challenged to raise enough capital to offset the estimated over $100 million statutory surplus deficit, which will be reported in early 2009, upon recapture of the reinsurance agreements. In light of its weak capital position, Penn Treaty immediately ceased writing new business. Penn Treaty plans to release its 2007 GAAP financials sometime over the next four to six weeks. When they are released, A.M. Best expects there will be a large loss and decline in shareholders' equity. Effective immediately, the New York Stock Exchange has suspended trading in Penn Treaty. If Penn Treaty is not successful in finding a buyer or raising significant capital and the company voluntarily enters a rehabilitation plan, A.M. Best will downgrade the company's FSR to E (Under Regulatory Supervision). PERKINS & MARIE: S&P Rates $132MM Sr. Secured Notes Rating 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Memphis, Tennessee-based Perkins & Marie Callender's Inc.'s to 'B-' from 'CCC+.' The outlook is negative. At the same time, S&P assigned a 'B-' rating to Perkins' $132 million senior secured notes due 2013. The issue was sold as 144A private placement without registration rights. S&P assigned a recovery rating of '4' to the debt, indicating the expectation for average (30%-50%) recovery in the event of payment default. The 'CCC' rating on Perkins' $190 million senior notes remains unchanged; S&P lowered the recovery rating on the $190 million senior notes to '6' from '5', indicating the expectation for negligible (0%-10%) recovery in the event of payment default. "The upgrade reflects Perkins' increased financial flexibility, as the company has refinanced its existing $40 million revolver and $98 million term loan," said Standard & Poor's credit analyst Jackie E. Oberoi, "and has far less restrictive financial covenants as a result." PHARMED GROUP: Court Approves Joseph Myers as Plan Administrator --------------------------------------------------------------- Joseph E. Myers, a partner and managing director in national advisory firm Clear Thinking Group, LLC, has been appointed Plan Administrator in the bankruptcy case of Pharmed Group Holdings, Inc. The appointment of the Hillsborough, New Jersey-based firm follows the confirmation of Pharmed's second amended plan of liquidation on September 17 by Judge Robert A. Mark of the U.S. Bankruptcy Court, Southern District of Florida, in Miami. Under terms of the engagement agreement, Mr. Myers and staff from Clear Thinking Group's Creditors Rights Practice will assist the debtor in meeting obligations set forth in its Plan of Liquidation, including administering the disbursement of funds contained in a creditors trust from which Pharmed will pay its administrative and general unsecured claims. Headquartered in Miami, Florida, Pharmed Group Holdings Inc. -- http://www.pharmed.com/-- and its affiliates send drugs and medical supplies on Caribbean cruises. They distribute medical, rehabilitative, and surgical supplies throughout the southeastern U.S., as well as Caribbean, and Central and South American countries. They deliver products made by Dynatronics, Welch Allyn, and Smith & Nephew. In addition to their distribution businesses, they make and distribute vitamins, minerals, nutraceuticals, and dietary supplements. The company and four debtor-affiliates filed for chapter 11 protection on Oct. 26, 2007 (Bankr. S.D. Fl. Case Nos. 07-19187 through 07-19191). Paul Steven Singerman, Esq., and Brian Rich, Esq., at Berger Singerman PA, represent the Debtors. Trumbull Group LLC serves as the Debtors' claims and noticing agent. According to Bloomberg News, the Debtor listed assets of $50 million and debts of $72 million when it filed for bankruptcy. PHILADELPHIA MEDIA: Misses Payments to Creditors ------------------------------------------------ Bill Rochelle of Bloomberg News reports that Philadelphia Media Holdings, LLC, didn't make payments due last week to creditors, blaming "chaos, volatility and uncertainty in today's financial and credit markets." The Company has been negotiating with senior and junior creditors for six months and in August 2008 gave them a workout proposal to be supported by an additional $20 million investment from the equity sponsor, according to the report. Philadelphia Media Holdings, LLC -- http://www.pnionline.com/default.asp --is a group of local Philadelphia, Pennsylvania investors who formed to buy The Philadelphia Inquirer, the Philadelphia Daily News and the internet portal for both called Philly.com-- http://www.philly.com/ In June 2006, The McClatchy Company had bought Knight Ridder and The Philadelphia Inquirer and the Philadelphia Daily News were among the twelve less-profitable Knight Ridder newspapers that McClatchy put up for sale when the deal was announced in March. The Company bought the newspapers on June 29, 2006 in a $562 million transaction. POMARE LTD: Blames Tourism Decline, Economy for Chapter 11 Filing ----------------------------------------------------------------- Pomare, Ltd., doing business as Hilo Hattie, one of Hawaii's largest retailers, said that the decline in tourism and other economic factors forced it to file for bankruptcy Thursday, three months after California investors bought the company from its founder, Andrew Gomes of The Honolulu Advertiser reported Friday. "It's sad, but I'm not surprised," said local retail industry analyst Stephany Sofos, who predicts that a worsening Hawaii economy will force other retailers with shaky finances to seek bankruptcy protection. The Chapter 11 filing allows Hilo Hattie to continue operating its seven stores in Hawaii and two in California without interruption. None of the 256 employees will lose their jobs, according to the report. CEO Ted Nelson said he expects that the Chapter 11 filing will allow plans to open a new flagship store in Waikiki at the Royal Hawaiian Center. Hilo Hattie would close its Nimitz store and sell the property. To reassure suppliers, Hilo Hattie has arranged a $5 million line of credit the company may use if necessary. The report says that the retailer will seek to erase some significant outstanding debt it said is between $10 million and $15 million. Among some of its largest unsecured creditors are Maui Divers of Hawaii, which is owed about $1.3 million; aloha wear manufacturer Royal Hawaiian Creations, $793,434; Roberts Hawaii Tours, $173,190; and Hamakua Macadamia Nut Co., $107,329. Hilo Hattie also owes money to several present or former executives in the form of promissory notes totaling at least $1.5 million issued before the sale of the company in July. The notes include $723,141 to Paul deVille, former president and CEO of Pomare Ltd. "While this is an extremely difficult step to take, we're confident that this reorganization will provide the fresh start we need to rebuild and strengthen the company, and to lead Hilo Hattie into an exciting new era," Mr. Nelson said in a statement. "The rapidly deteriorating economy, historic oil price levels, and the weakening of Hawaii's tourist-driven economy has hit all local companies - including Hilo Hattie - hard," said Mr. Nelson. Hilo Hattie's founder Jim Romig sold the company to an investor group led by Mr. Nelson in July. Based in Honolulu, Hawaii, Pomare Ltd. dba. Hilo Hattie, makes and sells men's clothing. The company filed for Chapter 11 relief on Oct. 2, 2008 (Bankr. D. Hawaii Case No. 08-01448). Chuck C. Choi, Esq. and James A. Wagner, Esq., at Wagner Choi & Evers represent the Debtor as counsel. When the Debtor filed for protection from its creditors, it listed assets of $10 million to $50 million, and debts of $10 million to $50 million. PROGRESSIVE ALLIANCE: Jim Clark Guarantees Investors of Payment --------------------------------------------------------------- Jim Clark, founder, chairperson and chief executive of retirement planning firm Jim Clark and Associates, assured Progressive Alliance, Inc.'s investors that they will be compensated. Progressive Alliance, dba Progressive Alliance of Retirement Planners, was forced into Chapter 11 bankruptcy in 2001. Mr. Clark told investors that should the company's attempt to reorganize fail, he would personally guarantee each investor's investment. Jim Clark and Associates -- http://www.jimclarkandassociates.com-- is a retirment planning firm in Idianapolis. PROGRESSIVE MOLDED: CCAA Monitor Reports Status of Liquidation -------------------------------------------------------------- Alex Morrison, senior vice president of Ernst & Young Inc., in its capacity as the CCAA Court-appointed Monitor of THL-PMPL Holding Corp., Progressive Moulded Products Limited, Progressive Molded Products Inc., and Progressive Marketing, Inc., submitted reports to the Ontario Superior Court of Justice, Commercial List, with respect to, among other things: (a) the status of the orderly liquidation of Progressive's Canadian assets; (b) PMPL's proposed independent contractor agreements; and (c) the review of the First Lien Lenders' security registered in Canada. The Monitor previously endorsed the appointment of Donald s. MacKenzie as CRO of the Canadian Applicants and and his firm Conway MacKenzie, Inc., in connection with the management and operation of the Applicants during the wind-down of their Canadian assets and businesses. Status of the Orderly Liquidation According to Mr. Morrison, in his Sept. 25 report, Progressive is working diligently to complete the orderly liquidation and wind down of its business. Progressive is continuing to invoice General Motors Corp., Ford Motor Company and Chrysler, LLC for raw materials, packaging, finished inventory, secondary tooling and machinery and equipment purchased pursuant to the OEM Term Sheets and to collect the related receivables, Mr. Morrison adds. Mr. Morrison says the liquidation of the remaining assets, including machinery and equipment, in Canada is ongoing. In accordance with the Auction Services Agreement, the Auctioneer held an auction on September 23, 24 and 25, 2008. PMPL hopes to be in a position to vacate most if not all of the Canadian leased facilities before the winter, Mr. Morrison tells the Ontario Superior Court of Justice Commercial List. In his Aug. 31 report, the Monitor reported that the process of removing tooling, equipment and inventory by the OEMs in accordance with the GM, Ford, and Chrysler Tooling Orders have been completed. Production by Progressive in Canada and in Texas ceased of June 30, 2008. Production for Ford in Missouri ceased July 25, 2008. According to the Monitor, Progressive is currently assessing how to dispose and realize upon the remaining property and assets owned by PMPI and located in the United States. He notes that the Chapter 7 trustee who was appointed in the U.S. to administer the Chapter 7 cases has filed a motion to dismiss the cases citing the inability to obtain an appropriate funding for professional fees that would be incurred. In his prior report, the Monitor, however, noted that the assets remaining in PMPI's Texas and Missouri plants represent only a small portion of the Applicants' remaining assets. Collection of Receivables The Monitor in its Aug. 25 report said that the OEM Term Shets provided a process pursuant to which the OEMs were to settle pre- and post- filing amounts owing to Progressive. Progressive, under the direction of the CRO, has been working with the OEMs to settle these amounts. The Monitor added that it continues to collect pre-filing accounts receivables from other customers. It said that less than $2,000,000 remain to be collected. It added that Progressive continues to negotiate sales of small quantities of remaining raw material, work-in-process and finished goods inventory to certain of these customers on an "as is, where is" basis. Lease Reviews Shortly after the commencement of the CCAA Proceedings, a number of leasing companies contacted the Applicants and/or the Monitor to assert interests in various pieces of equipment they claim are subject to lease agreements with Progressive. These leasing companies included CIT Financial Ltd., HSBC Bank Canada and Relational Funding Canada Corp. The Monitor and its counsel have reviewed these lease agreements and determined that the leases are proper leases and have priority over other secured lenders with respect to the pieces of equipment subject to the leases. The Applicants do not disagree with the Monitor's assessment of these leases and the First Lien Lenders have now confirmed that they do not claim priority over these parties to the equipment that is subject to these leases. As a result, each of these leasing companies have been contacted and asked to remove their equipment from Progressive's premises immediately. CIT has advised the Applicants and the Monitor that it has entered into an agreement to sell its equipment to a third party. This third party has contacted the CRO and the Monitor and arrangements have been made to permit the third party to remove the equipment from Progressive's premises over the next several days. The Monitor expects that similar arrangements will be made with the other leasing companies in the near future. Independent Contractor Agreements The liquidation and other activities are ongoing and continue to require staff to complete the work. On July 15, 2008, the Ontario Court made an order approving an employment retention program for certain employees whose continuing assistance was required. However, this program ends on September 30, 2008. Progressive and the CRO believe that it would be beneficial to retain the expertise of certain existing employees of Progressive who have knowledge of historical transactions, and Progressive’s products and understand the accounting systems, invoicing process and customer agreements. According to the Monitor, PMPL proposes to engage 13 individuals who are presently employees, as independent contractors in order to decrease the administrative responsibilities of PMPL associated with the retention of employees, while at the same time increasing its flexibility to contract required services on an "as needed" basis only. According to Mr. Morrison, PMPL will not be responsible for payment of any federal or provincial taxes, employee-related withholdings, pension plan, medical benefits or other employment related expenses or benefits for these Independent Contractors. The hourly rates for services provided were set at the equivalent of 2.5 times the hourly rate calculated by assuming the person's previous annual salary from PMPL was for a 40-hour week. Mr. Morrison relates he reviewed the list of existing employees and believes that they are the appropriate people who have specific expertise that would be beneficial to retain as independent contractors. The hourly rate proposed by PMPL is also reasonable, he adds. Review of First Lien Lenders' Security According to Mr. Morrison, his counsel has already completed the review of certain security documents relating to the debts and other obligations of each of PMPL and THL-PMPL to the First Lien Lenders pursuant to a credit agreement dated as of August 16, 2008 between THL-PMPL, PMPL, PMPI, and each subsidiary party thereto as a guarantor. Mr. Morrison says he has received an opinion from his counsel which states that, subject to the assumptions and qualifications, the Canadian Guarantee and Collateral Agreement made as of August 16, 2004, by THL-PMPL Acquisition Corp., now PMPL and THL- PMPL and the leasehold debentures dated August 16, 2004 by PMPL in favor of JPMorgan Chase Bank, Toronto Branch in relation to the leased facilities on Keele St., 21 Graniteridge Road, both in Vaughan, and 125 Villarboit Crescent in Concord, are properly perfected in respect of PMPL and THL-PMPL's assets located in Ontario. As a result of the opinion with respect to the validity of the First Lien Lenders’ security, Progressive and the Chief Restructuring Officer, in coordination with the Monitor, are in the process of preparing an estimate of an interim distribution to the First Lien Lenders for which Progressive will seek approval from the Court in the near future, Mr. Morrison maintains. The Monitor, accordingly, recommended to the Ontario Superior Court of Justice, Commercial List, to approve PMPL entering into the independent contractor arrangements on the terms as substantially set out in the Independent Contractor Agreement. * * * Copies of the Monitor's reports are available at no charge at: http://bankrupt.com/misc/PMPI_Monitor_1stReport.pdf http://bankrupt.com/misc/PMPI_Monitor_2ndReport.pdf http://bankrupt.com/misc/PMPI_Monitor_3rdReport.pdf http://bankrupt.com/misc/PMPI_Monitor_4thReport.pdf http://bankrupt.com/misc/PMPI_Monitor_5thReport.pdf http://bankrupt.com/misc/PMPI_Monitor_6thReport.pdf About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. The bankruptcy cases were later converted to chapter 7 proceedings in August. Jeoffrey L. Burtch was appointed as the Interim Trustee to take charge of the Debtors' estates. (Progressive Molded Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) PROGRESSIVE MOLDED: Court Dismisses Bankruptcy Cases ---------------------------------------------------- The Hon. Kevin Carey of the United States Bankruptcy Court for the District of Delaware dismissed the Chapter 7 cases of Progressive Molded Products Inc., Progressive Marketing, Inc., THL-PMPL Holding Corp., and Progressive Moulded Products Limited, effective October 1, 2008. In that light, the Court discharged Jeoffrey L. Burtch, as interim Chapter 7 Trustee, from any obligation arising under the United States Bankruptcy Code. He also discharged Cooch and Taylor, Mr. Burtch's counsel, from any further responsibility in connection with future hearings that may be scheduled. However, Judge Carey ordered that he will retain jurisdiction for the purpose of hearing and adjudicating final applications for compensation and reimbursement of expenses brought by representatives of the Debtors and the Official Committee of Unsecured Creditors pursuant to Sections 330 and 331 of the United States Bankruptcy Code. Mr. Burtch had told the Court it is impossible to administer the Debtors' cases due to lack of funds. Mr. Burtch related that without appropriate funding, he will be unable to properly perform his obligations, perform due diligence, and perform any of the reasonable tasks imposed on him. On June 20, 2008, the Debtors sought bankruptcy protection under Chapter 11 in the United States and and under The Companies' Creditors Arrangement Act in Canada, in hopes of delevering its balance sheet and maintaining its business with General Motors Corp., Ford Motor Company and Chrysler, LLC. However, after its OEM customers elected to resource their orders for component parts with other suppliers, Progressive commenced the wind-down of their operations and agreed to calls to convert their Chapter 11 cases to Chapter 7 liquidation. However, Mr. Burtch, who was appointed as Chapter 7 trustee, sought the dismissal of the cases, citing that there is no available funding to administer the cases, and pay professionals in connection with the liquidation of Progressive's assets. Mr. Burtch said that all of the Debtors' assets are encumbered and subject to liens of JP Morgan Chase Bank, Wells Fargo Bank, and other secured institutional lenders. JPMorgan Called for Immediate Dismissal Prior to Judge Carey's Dismissal Order, JPMorgan Chase Bank, N.A., the administrative and collateral agent under the Credit Agreement dated August 16, 2004, related it is appropriate and most efficient for the liquidation of the Debtors' estates to be administered through the ongoing Companies' Creditors Arrangement Act proceedings, in which a Monitor appointed by the Canadian Court serves the estates as an independent fiduciary. "As this Court is aware, the overwhelming majority of the Debtors' assets are located in Canada and are associated with the Debtors' Canadian operations.", Mark D. Collins, Esq., at Richards, Layton & Finger, PA, in Wilmington, Delaware tells the Court. JPMorgan requested that the proposed order dismissing the Debtors' cases be modified to provide that: -- dismissal be effective immediately in order to avoid unnecessary administrative expenses and delay; and -- the Court retains jurisdiction to hear and adjudicate final fee applications of Chapter 11 estate professionals. Mr. Burtch previously sought that the dismissal be effective on October 30, 2008, in order to accommodate the final fee hearings for the Chapter 11 estate professionals scheduled for October 15, 2008. According to JPMorgan, the same result sought by Mr. Burtch may be accomplished without extending the Debtors' cases for a month -- which extension would result in the accrual of further significant, unnecessary administrative expenses and more importantly delay -- to the detriment estates. Subsequently, Adam Singer, Esq., at Cooch and Taylor, in Wilmington, Delaware, who represents the Ch. 7 trustee, asked the Court to sign a revised proposed order, which provided for the immediate dismissal of the Debtors' cases. * * * The Debtors previously employed 2,800 people and carried on business designing, manufacturing and marketing interior plastic systems and subsystems for the automotive industry from 14 locations in Ontario, Texas, Michigan and Missouri. The company expanded its operations to include 13 plants in Canada and the At present, Donald s. MacKenzie as CRO of the Canadian Applicants and and his firm Conway MacKenzie, Inc., along with 13 remaining employees, have been retained to manage the wind-down of the Debtors' assets. They have tapped Danbury Industrial and Infinity Asset Solutions Inc. to auction off the Debtors' Canadian assets. About Progressive Molded Ontario, Canada-based Progressive Molded Products Inc. designs and manufactures component parts for General Motors Corp., Ford Motor Company and Chrysler, LLC. Its interior automotive subsystems are used for the "Big Three" automakers' top-selling platforms, including lightweight trucks, SUVs, mini-vans, cross- over vehicles, and passenger cars. The company and three of its affiliates filed for creditor protection under Chapter 11 of the U.S. Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware on June 20, 2008 (Lead Case No. 08-11253). Kelley A. Cornish, Esq. and Brian S. Hermann, Esq. at Paul, Weiss, Rifkind Wharton & Garrison LLP and Pauline K. Morgan, Esq., Joseph M. Barry, Esq., and Donald J. Bowman, Jr., Esq. at Young, Conaway, Stargatt & Taylor represent the Debtors in their restructuring efforts. The Progressive Molded Products entities also commenced parallel restructuring proceedings under the Companies' Creditors Arrangement Act before the Ontario Superior Court of Justice (Commercial List) on June 20. Sheryl E. Seigel, Esq. and Alex A. Ilchenko, Esq. at Lang Michener LLP are their solicitors. Alex F. Morrison at Ernst & Young, Inc., has been appointed CCAA monitor and Kevin J. Zych, Esq. at Bennett Jones LLP serves as his solicitor. The bankruptcy cases were later converted to chapter 7 proceedings in August. Jeoffrey L. Burtch was appointed as the Interim Trustee to take charge of the Debtors' estates. (Progressive Molded Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Committee Sued BNP Paribas, et al., Over Demise ----------------------------------------------------------- The Official Committee of Unsecured Creditors initiated a complaint against BNP Paribas, as administrative agent under a 2006 credit agreement Propex Inc. and its debtor-affiliates entered into with certain lenders, for allegedly engaging in a scheme designed to deplete the Debtors' resources and ultimately force a bankruptcy proceeding in which the lenders could wrest control of the Debtor companies. BNP Paribas Credit Agreement Propex Inc. acquired all of the outstanding capital stock of its largest competitors, SI Concrete Systems Corporation and SI Geosolutions Corporation, for $232.6 million. About $28.1 million of the purchase price was paid out of the Debtors' cash on hand. To raise additional funds, Propex entered into a $360 million Credit Agreement in January 2006 with BNP Paribas. By June 2006, the Debtors changed their corporate names. That event triggered a statutory requirement under Section 9-507(c) of the Uniform Commercial Code for the Lenders to re-perfect their liens on the Debtors' pledged assets by filing amended UCC statements. The Lenders, however, failed to re-perfect their liens on certain of the Debtors' property by the statutory deadline and instead perfected those liens by filing amended UCC statements in December 2006, Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, points out, on the Committee's behalf. The late UCC filings, Mr. Dizengoff contends, constituted a new transfer by the Debtors for which the Lenders provided no value to the Debtors. He adds that the late filings occurred at a time when the Debtors were insolvent. The Lenders also failed to file any amended UCC statement reflecting Propex's name change with respect to a lien on Propex's personal property located in Berrien County, Georgia, Mr. Dizengoff tells the Court. A list of the BNP Paribas unperfected liens is available for free at http://ResearchArchives.com/t/s?336e Insolvency and Default by December 2006 According to Mr. Dizengoff, the anticipated benefits from the SI Acquisition failed to materialize. The Debtors suffered from the continued loss of business from their customers and a liquidity squeeze due in part to their $28.1 million cash payment made in connection with the SI Acquisition, monthly payments on the Credit Agreement, and rising propylene prices. By December 2006, the Debtors were insolvent, Mr. Dizengoff maintains. By the fourth quarter of 2006, the Debtors' total EBITDA fell to $16.1 million, and the Debtors' net income fell from $14 million to $1.8 million during the same timeframe. At that juncture, it would have been in the best interest of the Debtors to seek Chapter 11 protection or seek more financing, Mr. Dizengoff says. The Lenders, however, Mr. Dizengoff argues, engaged in a course of conduct designed to artificially prolong the Debtors' operations, deepen their insolvency, and further deplete their liquid assets, while the Lenders strengthened their own stake in the Debtors in anticipation of an eventual bankruptcy proceeding. Specifically, he cites, the Lenders induced the Debtors to enter into the a Second Amendment of the Credit Agreement when they knew or should have known that the Debtors would likely not satisfy its terms. In exchange for the Second Amendments' limited waiver and relaxed covenants, the Lenders demanded that the Debtors pay down principal on the debt by $20 million and pay an increased interest rate of 75 basis points going forward. The Debtors agreed to "such inequitable terms" relying on the representation that the Lenders would readily negotiate further relief or refinancing if a default occurred, Mr. Dizengoff relates. The payment obligations that the Lenders imposed pursuant to the Second Amendment left the Debtors undercapitalized and ensured that they would slip further into insolvency and financial distress, Mr. Dizengoff insists. "[T]he Debtors lost over $60,000,000 in the first nine months of 2007 alone." By September 2007, the Debtors triggered multiple covenant defaults. The Committee notes that the Debtors' situation further deteriorated in December 2007 as their vendors began demanding payment in advance of shipments. The Debtors purportedly approached the Lenders in October 2007 about negotiating another amendment. By November 2007, however, it became apparent to the Debtors that the Lenders did not intend to negotiate, according to Mr. Digenzoff. Subsequently, with no prospects of alternative financing, the Debtors were forced to file for Chapter 11 protection. Furthermore, Mr. Dizengoff points out, as a result of the undercapitalization caused by the Second Amendment, the Debtors were in a far weaker state and thus had no viable alternative but to accept the DIP Financing underwritten by the Lenders. Purported Liens on Propex's Hungarian Subsidiaries Mr. Dizengoff adds the Lenders purport to have prepetition liens on 66% of the capital stock of two of the Debtors' subsidiaries in Hungary. He objects to the Lenders' contention and asserts that a valid pledge with respect to the stock was never registered. Accordingly, under its Complaint, the Committee brought charges against the Lenders pertaining to claims for fraudulent conveyance, claims for equitable subordination, claims for deepening insolvency, and claims for avoidance of improperly filed security interest, among others. Mr. Dizengoff asserts, among others, that: -- the Debtors did not receive reasonably equivalent value for the $20 million cash payment and associated fees they paid in exchange for the Second Amendment terms; -- the Lenders breached their duties to the Debtors by proposing the Second Amendment; Specifically, under the Complaint, the Committee seeks: (a) an avoidance of recover certain fraudulently conveyed liens on the Debtors' collateral. The liens refer to liens the Lenders untimely perfected outside the UCC statutory four-month window; (b) equitable subordination of all or some of the Lenders' claims; (c) a judgment for all damages caused by acts of the Lenders that deepened the Debtors' insolvency; (d) an avoidance of any purported lien claimed by the Lenders on certain properties; (e) an avoidance of the Lenders' lien relating to Propex's property in Berrien County, Georgia; (f) an avoidance of the Lenders' liens with respect to the Debtors' environmental permits because the regulations that govern the permits provide that it do not convey a property interest that can be pledged as collateral; (g) a declaratory judgment that: * the Lenders' pendency interest should be calculated at the non-default rate set forth in the Credit Agreement; * the Debtors are entitled to choose between the Adjusted LIBOR Rate or Base Rate as defined in the Credit Agreement; and * the Debtors are entitled to recovery of all overpayments of adequate protection payments calculated at the Base Rate on principal that is increasing at a compounded 2% Default Rate; (h) a declaratory judgment that the Lenders do not have any security interest in the capital stock of the Hungarian subsidiaries; and (i) a declaratory judgment that the Lenders have adequate protection liens and Section 507(b) "superpriority" claim only to the extent they can demonstrate that there has been a diminution in value of their prepetition collateral during the pendency of the Debtors' Chapter 11 cases, and that there has been no diminution in value demonstrated by the Lenders as of September 23, 2008. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08- 10249). The Debtors have selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. The Court extended the exclusive plan filing period of the Debtors through Oct. 20, 2008, and their exclusive solicitation period through Dec. 19, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of $562,700,000, and total debts of $551,700,000. (Propex Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) PROPEX INC: Wants to Hire PricewaterhouseCoopers as Accountants --------------------------------------------------------------- Propex, Inc., and its debtor-affiliates ask the United States Bankruptcy Court for the Eastern District of Tennessee for authority to employ PricewaterhouseCoopers LLP as their accountants. The Debtors have selected PwC because of the company's extensive experience, knowledge and recognized expertise in tax issues and other financial matters. The Debtors believe that PwC is both well-qualified and uniquely able to represent them in their Chapter 11 cases and in other matters in an efficient timely manner. As the Debtors' accountants, PwC is expected to: (a) develop a model to determine the impact of Cancellation of Debt Income, which will also include: -- considerations regarding the benefit of electing to invert attribute reduction; and -- assessing and planning regarding proposed exchanges of and modifications of debt; (b) assess the potential impact of a Section 382 limitation, which will also include: -- an evaluation of status of creditors as "qualified" creditors for purposes of Section 382(1)(5) and a consideration of whether Section 382(1)(5) or Section 382(1)(6) is more advantageous; and -- a quantification of net unrealized built-in-gain or NUBIG and net unrealized built-in-loss or NUBIL and an assessment of the impact flowing from potential ownership change; (c) develop a model to project future cash taxes; (d) provide input and feedback to counsel and the Official Committee of Unsecured Creditors' attorneys concerning the bankruptcy plan and disclosure statement; (e) plan concerning post-emergence corporate structure; and (f) develop a state tax model to identify opportunities to preserve tax attributes in key states. In addition, PwC will conduct an "Earnings and Profits" study. The Debtors propose to pay PwC for its services at these hourly rates: Professional Hourly Rate ------------ ----------- Partner $600 - $700 Director $400 - $510 Manager $320 - $400 Sr. Associate $210 - $265 Associate $150 - $180 James D. Callihan, a partner of PricewaterhouseCoopers LLP, assures the Court that his firm does not hold any interest adverse to the Debtors or their estates with respect to the matters for which the firm is retained. He further informs the Court that his firm was engaged as independent auditors to audit the consolidated financial statements of the Debtors for the year ending December 30, 2007. Headquartered in Chattanooga, Tennessee, Propex Inc. -- http://www.propexinc.com/-- produces geosynthetic, concrete, furnishing, and industrial fabrics and fiber. It also produces primary and secondary carpet backing. Propex operates in North America, Europe, and Brazil. The company and its debtor-affiliates filed for Chapter 11 protection on Jan. 18, 2008 (Bankr. E.D. Tenn. Case No. 08-10249). The Debtors have selected Edward L. Ripley, Esq., Henry J. Kaim, Esq., and Mark W. Wege, Esq. at King & Spalding, in Houston, Texas, to represent them. The Official Committee of Unsecured Creditors have tapped Ira S. Dizengoff, Esq., at Akin Gump Strauss Hauer & Feld, LLP, in New York, to be its counsel. The Court extended the exclusive plan filing period of the Debtors through Oct. 20, 2008, and their exclusive solicitation period through Dec. 19, 2008. As of June 29, 2008, the Debtors' balance sheet showed total assets of $562,700,000, and total debts of $551,700,000. (Propex Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) QUECHAN TRIBE: Fitch Junk Rtngs on Inability to Secure $25MM Fund ----------------------------------------------------------------- Fitch Ratings has downgraded and placed the ratings of The Quechan Tribe of the Fort Yuma Indian Reservation on Rating Watch Negative: -- Issuer Rating to 'CCC' from 'B+'; -- $110 million Gaming Enterprise revenue bonds series 2008 to 'CCC+' from 'BB-'; -- $45 million Governmental Project bonds series 2007 (Tax-Exempt) to 'CCC' from 'B+'. Quechan is currently constructing a replacement facility for its current California casino. The downgrade and the placement of the ratings on Watch Negative reflects the inability of the tribe to secure $25 million in external completion financing to fund the remainder of the $214 million total project cost. The gaming enterprise bond indenture requires the tribe to secure $25 million in completion financing for the project, to be funded either from an external source or by an equity contribution from the tribe. Due to adverse market conditions, the tribe has not been able to secure the financing externally. As a result, a project fund deficiency is occurring under the gaming enterprise bond indenture, which has triggered the occurrence of a project fund funding event. In order to cure the project fund funding event, the tribe must either deposit $25 million in the project fund, or must fund the deficiency amount of $25 million in six equal monthly installments of $4.2 million. The tribe has elected to begin to fund the deficiency over six months while continuing to attempt to secure external financing. The first monthly installment of $4.2 million was contributed last week using the funds of the tribal government. If the project fund deficiency does not continue to be remedied on a timely basis, there is the potential for disruption of project construction as distributions from the project fund to the contractor could be delayed. In addition, in the event the tribe must continue to fund the project fund deficiency from cash on hand, Fitch is concerned the tribe will violate covenants of the governmental project bond indenture, which requires the maintenance of an unrestricted net asset balance at the tribal government equal to at least 125% of the principal amount of long-term indebtedness outstanding that does not have a security interest in the cash flows of the casino operation. The unrestricted net asset balance is required to be certified to the governmental project bond trustee by the tribe within 45 days after the end of each fiscal quarter. If this covenant is violated, the tribe will be required to fund the contingent reserve account in an amount equal to 100% of the outstanding par amount of the 2007 bonds. At present, Quechan is meeting its financial commitments in that it is covering debt service charges from the cash flows of its existing casino operations and funding the project fund deficiency from cash on hand at the tribal government. However, in the event external funding cannot be secured for the completion financing, the tribe likely will become unable to meet its financial commitments in that it will not have sufficient cash on hand to fund both the project fund deficiency and the contingent reserve account requirement. Failure to fund the contingent reserve within 90 days after violation of the unrestricted net asset test will result in an event of default on both series of bonds, as cross default provisions exist. In an event of default, bondholders would have the ability to declare all outstanding principal immediately due and payable. If an event of acceleration were to occur, Fitch believes it is likely that a payment default would result. The downgrade of the ratings to the 'CCC' category reflects Fitch's view that a real possibility of payment default exists at this time. If the tribe faces a liquidity crisis due to its inability to secure external financing to complete the casino project, maintenance of the ratings in the 'CCC' category may depend upon the ability of the tribe to negotiate with bondholders to avoid the occurrence of an event of acceleration, possibly by obtaining covenant waivers. A downgrade to the 'CC' category would reflect Fitch's view that a payment default has become probable. RADIANT ENERGY: Completes $1MM Settlement with Innovations Norway ----------------------------------------------------------------- Radiant Energy Corporation completed a settlement agreement with Innovations Norway regarding an outstanding principal and interest payment of $1,063,268 or NOK6,357,763 on behalf of its Norwegian subsidiary, Radiant Aviation Services Europe AS, which was in default on loans owing to Innovations Norway and for which repayment had been demanded. The loans were settled by a payment of $44,318 or NOK265,000 in cash and the issuance of 3,658,987 common shares of the company. Innovations Norway will also receive the proceeds from the disposal of the company's deicing facility in Oslo, estimated to be $167,239 or NOK1,000,000. The common shares issued as a result of this agreement are subject to a four-month hold period expiring Feb. 3, 2009. Based in Port Colborne, Ontario, Radiant Energy Corp. (TSX: RDT) - - http://www.radiantenergycorp.com/-- through its wholly owned subsidiary Radiant Aviation Services developed and sells the only infrared alternative to traditional glycol-based aircraft deicing. Its fully patented InfraTek(R) systems are approved for use by the FAA. Before the introduction of InfraTek, spraying with glycol was the only feasible method to satisfy FAA safety guidelines for ensuring that aircraft are properly deiced before take-off. At April 30, 2008, the company's balance sheet showed total assets of $3.5 million and total liabilities of $6.0 million resulting in a total shareholders' deficit of approximately $2.5 million. RADIANT ENERGY: July 31 Balance Sheet Upside-Down by $3 Million --------------------------------------------------------------- Radiant Energy Corporation's balance sheet at July 31, 2008, showed total assets of $1,992,937 and total liabilities of $5,210,793, resulting in a shareholders' deficit of $3,217,856. The company disclosed its results for the third quarter and nine-months ended July 31, 2008. For the three-month period ended July 31, 2008, the company reported a loss of $769,758, a reduction of $1,794,832 from a loss of $2,564,590 reported for the comparable three-month period ended July 31, 2007, which was impacted by the writeoff of a deicing facility. The operation is seasonal and there was no revenue in the third quarter. For the nine-month period ended July 31, 2008, the company reported a loss of $4,590,299, an increase of $396,684 from a loss of $4,193,615 for the nine-months ended July 31, 2007. Revenue of $270,760 for the nine-month period was higher than the prior year period. Based in Port Colborne, Ontario, Radiant Energy Corp. (TSX: RDT) - - http://www.radiantenergycorp.com/-- through its wholly owned subsidiary Radiant Aviation Services developed and sells the only infrared alternative to traditional glycol-based aircraft deicing. Its fully patented InfraTek(R) systems are approved for use by the FAA. Before the introduction of InfraTek, spraying with glycol was the only feasible method to satisfy FAA safety guidelines for ensuring that aircraft are properly deiced before take-off. At April 30, 2008, the company's balance sheet showed total assets of $3.5 million and total liabilities of $6.0 million resulting in a total shareholders' deficit of approximately $2.5 million. RELIANT ENERGY: Retail Biz Losses Prompt S&P to Cut Rating to B+ ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Reliant Energy Inc. and its subsidiaries to 'B+' from 'BB-'. The outlook is stable. "The rating revision reflects the one-time impact of large losses in the retail business and lowered future cash flow expectations resulting from a changed business strategy for the company's retail business," said Standard & Poor's credit analyst Swami Venkataraman. "Maintaining adequate liquidity and sustaining confidence with trading counterparties is a key driver of risk in the near term while the details of the revamped strategy, risk management policies, and earnings power for the retail business will be important over the longer term," Mr. Venkataraman added. While the company also lowered its expectations for cash flows from the wholesale business following sharply lower natural gas prices, this was less of a factor in S&P's decision. S&P's 'BB-' rating incorporated stress scenarios that included lower gas prices. Reliant did not need to achieve its original financial forecast to maintain a 'BB-' rating and there was significant financial cushion there. However, a likely negative contribution margin for 2008 from the retail business, as opposed to the original forecast of about $450 million, a one-third increase in total funded debt to support ongoing liquidity requirements, plus expectations for lower profitability, poorer earnings visibility, and higher liquidity risk for the retail business are key issues driving the rating downgrade. Reliant's poor performance in the retail business in 2008 is mainly due to two one-time events--the congestion-related price spikes and Hurricane Ike. However, a substantial rethink on the retail strategy is underway, which will see Reliant move toward lowering collateral requirements and stabilizing future earnings, albeit at lower levels. This will likely entail moving away from longer-term, fixed-price contracts, especially with commercial and industrial customers, resulting in lower liquidity demand as contracts are more index-based rather than fixed-price. While this business model will result in lower margins, the C&I segment provides only 30% of margins while accounting for more than 70% of collateral needs. Specifically, Reliant aims to significantly reduce the "bcf-equivalent" of its retail power positions, which currently stands at about 450 bcfe. Much of this existing position is expected to roll-off by 2009 and the change is strategy is expected to result in a lower ongoing bcfe position, and result in lower liquidity needs. The new term loan from Goldman Sachs has covenanted a level of 280 bcfe after the first two months. Risk management policies are key, especially for a company like Reliant that does not own generation to support the retail business. In this context, while Reliant fundamentally manages to a balanced book for the retail business, without material long or short positions, and tries to keep its market exposure to a minimum, such exposures are managed somewhat unconventionally, through a system consisting purely of volumetric limits. The stable outlook reflects S&P's assumption that Reliant will articulate a new business plan for the retail segment that is not significantly below its rough assessment above and its ability to sustain confidence with its trading counterparties in the near term. The company is back to trading the way it used to before December 2006 and has confirmed that it has not so far had problems procuring day-to-day supply for its retail operations. Given Reliant's open wholesale strategy, any rating improvement is contingent upon improving wholesale prices for power, coupled with stable retail earnings and absence of large one-time losses such as those in 2008. Downside risks in the very near term could arise from a loss of confidence among trading counterparties. Longer term, a sustained downturn in merchant power prices or large losses in the retail business constitute the major downside risks. RITE AID: Has $549MM Additional Borrowing Capacity Under Revolver ----------------------------------------------------------------- Rite Aid Corporation disclosed in a Securities and Exchange Commission filing that as of Aug. 30, 2008, $1.013 billion was outstanding under the Company's senior secured revolving credit facility, and as of such date, the Company had additional available borrowing capacity of approximately $549 million under the revolving credit facility. As of Aug. 30, 2008, the Company had lease financing obligations outstanding of $225.7 million. The Company had capital expenditures of approximately $178.5 million and proceeds from sale and leaseback transactions of approximately $94.1 million in the thirteen weeks ended Aug. 30, 2008. These capital expenditures included $56.1 million of integration-related capital expenditures and $25.3 million of prescription file buys. For the 13 weeks ended Aug. 30, 2008, the Company had private label penetration of 11.6% of front-end sales and generic drug penetration of 66.9% of prescription sales at its Brooks Eckerd stores. About Rite Aid Corporation Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- is a drugstore chain with more than 5,000 stores in 31 states and the District of Columbia. * * * As reported in the Troubled Company Reporter on Sept. 29, 2008, Moody's Investors Service downgraded Rite Aid Corporation's long term ratings, including its probability of default rating, to Caa1 from B3 and affirmed its speculative grade liquidity rating at SGL-4. In addition, Rite Aid's long term ratings were placed on review for further possible downgrade. The downgrade to Caa1 reflects Rite Aid's very weak operating performance for the second quarter ended August 30, 2008 (EBIT fell to negative $62 million versus positive $29 million in the prior period) which has resulted in a weakening in credit metrics. The review for further possible downgrade reflects Rite Aid's continued difficulties at its Eckert subsidiary, management's downward earnings revision, as well as the high likelihood that EBIT will be unable to cover interest for the full year ended March 2009 and that many of Rite Aid's debt protection measures will deteriorate further. These ratings are downgraded and placed on review for further possible downgrade: -- Corporate family rating to Caa1 from B3; -- Probability of default rating to Caa1 from B3; -- First-lien bank facilities to B2 from Ba3; -- Second-lien secured notes to Caa1 from B3; -- Guaranteed senior notes to Caa2 from Caa1; -- Senior notes and debentures to Caa3 from Caa2. This rating is affirmed: -- Speculative grade liquidity rating at SGL-4. The current LGD assessments remain subject to change. ROBERT PIERSON: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Robert J. Pierson 5810 Park Lane Dallas, Tx 75225 Bankruptcy Case No.: 08-35142 Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Texas (Dallas) Debtor's Counsel: Eric A. Liepins, Esq. eric@ealpc.com Eric A. Liepins, P.C. 12770 Coit Rd., Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/txnb08-35142.pdf ROY MONROE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Roy Sanford Monroe dba Monroe Real Estate, Inc. dba Monroe Residential Properties of Maryland, LLC 8205 Waterside Court Fort Washington, MD 20744 Bankruptcy Case No.: 08-22873 Chapter 11 Petition Date: October 6, 2008 Court: District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Richard M. McGill, Esq. mcgillrm@aol.com Law Offices of Richard M. McGill P.O. Box 358 5303 West Court Drive Upper Marlboro, MD 20773 Tel: (301) 627-5222 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Roy Sanford Monroe's chapter 11 petition with list of 20 largest unsecured creditors is available for free at: http://researcharchives.com/t/s?337e SAFECO CORPORATION: Best Cuts Rtngs, Removes Watch After LMGI Deal ------------------------------------------------------------------ Following the recent acquisition of Safeco Corporation (Seattle, WA) by Liberty Mutual Group Inc. (Boston, MA), A.M. Best Co. has removed from under review with negative implications and downgraded the issuer credit rating to "bbb" from "bbb+" and the existing debt and shelf ratings of Safeco. A.M. Best also has removed from under review with negative implications and downgraded the ICRs to "a" from "a+" of Safeco Insurance Companies and its members. Concurrently, A.M. Best has affirmed the financial strength rating of A(Excellent) of Safeco and its members. The outlook for all ratings is stable. Currently, LMGI's subsidiaries have an FSR of A (Excellent) and ICRs of "a" with a stable outlook. The acquired entities will be integrated into the Liberty Insurance Holdings (Keene, NH) pool over the near term. LMGI has integrated a number of similar transactions over the years, and as in the past, A.M. Best will monitor the progress of this integration going forward. The FSR of A(Excellent) has been affirmed and the ICRs have been removed from under review with negative implications and downgraded to "a" from "a+" for Safeco Insurance Companies and its following members: -- American Economy Insurance Company -- American States Insurance Company -- American States Insurance Company of Texas -- American States Lloyds Insurance Company -- American States Preferred Insurance Company -- First National Insurance Company of America -- General Insurance Company of America -- Safeco Insurance Company of America -- Safeco Insurance Company of Illinois -- Safeco Insurance Company of Indiana -- Safeco Insurance Company of Oregon -- Safeco National Insurance Company -- Safeco Lloyds Insurance Company -- Safeco Surplus Lines Insurance Company These debt ratings have been removed from under review with negative implications and downgraded: Safeco Corporation: -- to "bbb" from "bbb+" on $300 million 4.875% senior unsecured notes, due 2010 -- to "bbb" from "bbb+" on $204.0 million 7.25% senior unsecured notes, due 2012 These indicative ratings have been removed from under review with negative implications and downgraded: Safeco Corporation: -- to "bbb" from "bbb+" on senior unsecured -- to "bbb-" from "bbb" on subordinated debt -- to "bb+" from "bbb-" on preferred stock SANTA ANA PUEBLO: Fitch Holds $45MM Revenue Bonds Rating at 'BB+' ----------------------------------------------------------------- Fitch Ratings has affirmed Santa Ana Pueblo's credit ratings as: -- Issuer rating at 'BB'; -- $45 million enterprise revenue bonds, series 2006, at 'BB+'. The Rating Outlook is Stable. Santa Ana's 'BB' issuer rating is supported by its relatively diverse operating profile within the Fitch-rated Native American universe. Although the primary economic driver of the Pueblo, and therefore the primary credit driver, is its casino gaming operation, diversification is provided by two other enterprises owned by the Pueblo, including a Hyatt resort property and a golf course operation. The Albuquerque gaming market is highly competitive, with five other Native American gaming entities operating seven properties in the area. However, the Santa Ana Star casino occupies an attractive niche position, serving the Rio Rancho locals market. Rio Rancho is a northern suburb of Albuquerque that has enjoyed strong growth in recent years due to the built out nature of the city. The Stable Rating Outlook reflects Fitch's expectation that the casino will continue stable operations despite recent changes in the senior management team and additional competitive pressure in the Albuquerque market. Although the Santa Ana Star has a proven strong position, the recent opening of casino hotel properties at Isleta and Route 66 could pressure its market share. In addition, there is the potential that the newly opened Buffalo Thunder casino and hotel property, which is located north of Santa Fe, will have a negative impact on the operations on the Santa Ana Star casino and Hyatt Tamaya hotel property. Credit metrics, including leverage and debt service coverage ratios, are strong relative to other credits in the 'BB' rating category. However, the low level of financial risk is offset by business risk inherit in the somewhat limited operating profile of the entity. For the fiscal year ended Sept. 30, 2007, the casino contributed 83.3% of the combined entity's EBITDA, with the Hyatt resort and golf operation contributed 14.4% and 2.7%, respectively. While the hotel and golf operation provide some diversification to the operation's cash flow, it is anticipated that the casino will continue to be the primary revenue generator going forward. For the latest twelve months ended June 30, 2008, the Santa Ana Star casino captured 15.7% of the Albuquerque market net slot win, up from 14.7% for the prior year period. Compared to the other five Native American gaming operators in the region, Santa Ana has historically ranked fourth in market share behind Sandia, Isleta and Laguna Pueblos. EBITDA for the combined enterprises for the LTM ended June 30, 2008 rose 4.1% compared to the prior year period. Operating margins, while remaining healthy, compressed from 30.6% to 27.6%, primarily due to increased labor, promotional and marketing costs at the casino operation. LTM leverage and debt service coverage ratios were 1.25 times and 5.4x, respectively. The 2006 enterprise revenue bonds are term bonds maturing in 2015. The bonds are subject to mandatory monthly sinking fund payments of principal in an amount sufficient to fully amortize by maturity, resulting in a level debt service schedule through maturity. The subordinate bank loan is outstanding in the amount of $15 million and matures in 2024. A 'BB+' transaction rating is assigned to debt secured by a lien on the combined gaming, hotel and golf enterprise cash flows. The transactions are rated one notch above the issuer rating due to credit enhancement provided by security covenants included in the legal documents associated with the transactions. SEQUOIA COMMUNITY: To Complete Sale to Clinica by October 15 ------------------------------------------------------------ Tracy Correa at The Fresno (California) Bee reports that the sale of Sequoia Community Health Centers to Clinica Sierra Vista would be completed by Oct. 15. Clinica Sierra has submitted an offer to acquire Sequoia for $9.8 million, The Fresno Bee relates. According to The Fresno Bee, Scott Belden, the attorney for Clinica Sierra, said that the comopany has reached a tentative repayment plan with the state. The plan would ease some of the financial concerns that threatened to derail the sale of the Sequoia Community, the report says, citing Mr. Belden. The Fresno Bee quoted Mr. Belden as saying, "We will repay them an amount...they assert was overpaid to Sequoia." According to the report, Mr. Belden explained that Clinica would repay the state an amount lower than what the California Department of Health Care Services claims it overpaid Sequoia Community in Medi-Cal funds. The report states that Mr. Belden said that the settlement amount will be revealed until a final agreement with the state was signed. Mr. Belden said that additional any amount that the state believes it is owed would be levied against Sequoia Community's bankruptcy estate, the reort says. The Fresno Bee reports that Laurie Primavera -- the court-appointed patient-care ombudsman, the associate director with the Central Valley Health Policy Institute at California State University -- submitted a report that suggested clinic services have remained intact and patients unharmed. Two of Sequoia's clinic sites, Easton and West Fresno, have closed since the bankruptcy filing, although Clinica Sierra retains licensing and could reopen the clinics, the report says, citing Ms. Primavera. According to the report, patients from the two sites have been referred to other Sequoia Community clinics. Mr. Primavera also said that Sequoia Community currently has 52 fewer workers, compared to the time of the bankruptcy filing in June 2008, due to the uncertainty over the future of Sequoia Community, the report says. By year-end, Sequoia Community would lose a dozen hands-on providers -- from pediatricians and family practice doctors to nurse practitioners -- the report states, citing Ms. Primavera. "The loss of providers poses the greatest inconvenience to patients, but does not compromise the quality of patient care at this time," and the increased wait times "are the only notable difference in quality," The Fresno Bee quoted Ms. Primavera as saying. Mr. Belden said he expects workers to feel more secure when the sale is final, The Fresno Bee reports. 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. SHERMAN LOOP: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Sherman/ Loop 288 Joint Venture 8474 Rector Road Sanger, TX 76266 Bankruptcy Case No.: 08-42678 Chapter 11 Petition Date: October 6, 2008 Court: Eastern District of Texas (Sherman) Debtor's Counsel: Arthur I. Ungerman, Esq. arthur@arthurungerman.com 8140 Walnut Hill Lane, Suite 301 Dallas, TX 75231 Tel: (972)239-9055 Fax: (972)239-9886 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Sherman/ Loop 288 Joint Venture did not file its list of 20 largest unsecured creditors. SIMDAG-ROBEL: Settles Suit Over Use of Trump's Name in Condo ------------------------------------------------------------ James Thorner of St. Petersburg Times reports that Donald Trump and SimDag-Robel LLC, the developers of the Trump Tower Tampa luxury condo project, have reached a settlement in a suit over licensing fees for the right to use Trump's name on the skyscraper. The mediation left neither side with everything it wanted, SimDag attorney Jeffrey Warren said, according to the report. Trump filed the more than $2 million suit in May 2007. SimDag launched a countersuit accusing Mr. Trump of breaching a confidentiality agreement by going public with his complaints, the report said. The settlement still needs ratification by a bankruptcy judge. Christopher Griffin, Esq. at Foley & Lardner represented Trump in the case. About SimDag-Robel Tampa, Florida-based SimDag/Robel, LLC, owns and operates a real estate business. The Debtor filed its Chapter 11 petition on June 17, 2008 (Bankr. M.D. Fla. Case No. 08-08804). Judge K. Rodney May presides over the case. Adam L. Alpert, Esq., and Jeffrey W. Warren, Esq., at Bush Ross, P.A., represent the Debtor in its restructuring efforts. The Debtor listed assets of $21,672,801 and debts of $37,047,540. SIMPLON BALLPARK: Court OKs $33MM Loan for Cosmopolitan Square -------------------------------------------------------------- Mike Freeman at The Union-Tribune reports that the Hon. James W. Meyers of the U.S. Bankruptcy Court for the Southern District of California granted Simplon Ballpark LLC permission to pursue a $33 million loan for Cosmopolitan Square, a proposed 39-story hotel/condo tower in the East Village. According to The Union-Tribune, Simplon Ballpark is trying to secure the loan before the full-block site downtown will be put on sale at a foreclosure auction, which the court didn't postpone. The report says that Simplon Ballpark must complete the new loan to fend off its largest creditor, SDG-Left Field, which had more than $20 million in claims. Other creditors claimed $19 million in debts, the report states. The Union-Tribune relates that over the past seven months, Judge Meyers has delayed foreclosure several times as Simplon Ballpark attempted to refinance the project. Simplon Ballpark, says The Union-Tribune, has been working on details of the loan with National Investors Mortgage of Valley Center. The Union-Tribune relates that with credit so tight, the terms of the proposed bridge loan are severe. According to the report, the terms include 12% in upfront points and fees to lenders, which would be financed from the loan proceeds. The one-year loan also has a 15% annual interest rate and personal guarantees from developers should they default, the report states. About Simplon Ballpark Headquartered in San Diego, California, Simplon Ballpark, LLC is a real estate developer. The company filed for Chapter 11 protection on March 4, 2008 (Bankr. S.D. Calif. Case No. 08-01803). Hanno T. Powell, Esq. at Powell & Pool represents the Debtor. The U.S. Trustee for Region 16 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When it filed for protection from its creditors, the company listed assets and debts of both between $100 million and $500 million. SIX FLAGS: Restates Options to Pref. Shares Mandatory Redemption ---------------------------------------------------------------- Six Flags Inc. reiterated the alternatives it has to address the Aug. 15, 2009, mandatory redemption of the Preferred Income Equity Redeemable Shares. Subject to potential Delaware law restrictions on dividends and redemptions, these alternatives include a refinancing, exchange or extension of the PIERS, well as the use of an uncommitted optional term loan, asset sale proceeds and New Orleans insurance claim proceeds. The company continues to have discussions with PIERS holders regarding potential PIERS restructuring alternatives. "Many companies are facing challenges in today's volatile economic climate and Six Flags is no exception," Mark Shapiro, president and chief executive officer said. As we move closer to the redemption date of our preferred stock instruments in August of next year, uncertainty about the company's ability to refinance these obligations in light of the overall market conditions has put negative pressure on our stock. We believe that our improved performance and cash flows will be key to repositioning the company for long-term growth." The company disclosed that revenues for its third quarter through Aug. 12, 2008, had increased approximately 7.6%, or $23.5 million, over the prior-year period on fewer park operating days. The revenue increase was attributable to attendance growth of 5.1%, or 407,000, to 8.43 million guests and a 2.4%, or $0.92, increase in total revenue per capita to $39.55. However, the company's full third quarter results will reflect the loss of operating days compared to the prior-year quarter. The company expects to recover lost attendance from those days in the fourth quarter, including the benefit of a favorable Halloween season calendar with the holiday falling on a Friday this year compared to a Wednesday in 2007. The company also disclosed that, as of Sept. 30, 2008, no amounts were drawn under its $275 million working capital revolving facility, excluding approximately $28.8 million in letters of credit. The company believes that based on amounts available under this facility, together with available cash, it has ample liquidity to fund its off-season capital expenditures and operating expenses for the 2009 season. The company further disclosed that it is not in compliance with the continued listing standards of the New York Stock Exchange because the thirty-day average closing price of the company's common stock was less than $1.00. Under applicable NYSE rules, the company generally has six months to cure the deficiency. The company's common stock will remain listed on the NYSE in the interim. If the trading average does not sufficiently improve, the company intends to consider all available alternatives, including, among other things, a reverse stock split. If the company decides to cure the deficiency by seeking stockholder approval of a reverse stock split, it must do so no later than the 2009 annual meeting, which is scheduled for May 2009. Failure to be listed on the NYSE does not constitute a default under any of the company's debt instruments. About Six Flags Inc. Headquartered in New York City, Six Flags Inc. (NYSE: SIX) -- http://www.sixflags.com/-- is the world's largest regional theme park company with 21 parks across the United States, Mexico and Canada. Founded in 1961, Six Flags has provided world class entertainment for millions of families with cutting edge, record- shattering roller coasters and appointment programming with events like the popular Thursday and Sunday Night Concert Series. Now 47 years strong, Six Flags is recognized as the preeminent thrill innovator while reaching to all demographics -- families, teens, tweens and thrill seekers alike -- with themed attractions based on the Looney Tunes characters, the Justice League of America, skateboarding legend Tony Hawk, The Wiggles and Thomas the Tank Engine. * * * As reported in the Troubled Company Reporter on Sept. 30, 2008, Moody's Investors Service downgraded Six Flags, Inc.'s Corporate Family rating to Caa2 from Caa1, the Probability of Default rating to Caa2 from Caa1 and associated instrument ratings as detailed below. The rating actions reflect heightened risk of default because of the approach of the Aug. 15, 2009 mandatory redemption date for the $287.5 million Preferred Income Redeemable Securities and the February 1, 2010 maturity of the remaining $131 million 8.875% senior unsecured notes. Moody's does not expect Six Flags to generate sufficient free cash flow or have sufficient unused revolver capacity to fund these obligations -- creating reliance on asset sales or refinancing options. SKYVIEW PROPERTIES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Skyview Properties, LLC 2128 Jackson Road Griffin, GA 30223 Bankruptcy Case No.: 08-12919 Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Georgia (Newnan) Debtor's Counsel: Scott B. Riddle, Esq. sbriddle@mindspring.com Suite 2250 Resurgens Plaza 945 East Paces Ferry Road Atlanta, GA 30326 Tel: (404) 815-0164 Fax: 404-815-0165 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Skyview Properties, LLC did not file its list of 20 largest unsecured creditors. SOUTHHILLS PLAZA: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Southhills Plaza, LLC 2701 W. Sam Houston Parkway N. Houston, TX 77043 Bankruptcy Case No.: 08-36398 Chapter 11 Petition Date: October 6, 2008 Court: Southern District of Texas (Houston) Judge: Wesley W. Steen Debtor's Counsel: Edward L Rothberg, Esq. erothberg@wkpz.com Weycer Kaplan Pulaski & Zuber 11 Greenway Plaza, Suite 1400 Houston, TX 77046 Tel: (713) 961-9045 Fax: (713) 961-5341 Jessica L Hickford, Esq. jhickford@wkpz.com Weycer Kaplan Pulaski Zuber 11 Greenway Plaza, Suite 1400 Houston, TX 77046 Tel: (713) 961-9045 Estimated Assets: $1 million to $10 million Estimated Debts: $1 million to $10 million Southhills Plaza, LLC did not file its list of 20 largest unsecured creditors. SPORT LAND: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Sport Land, Inc. P.O. Box 1538 Lolo, MT 59847 Bankruptcy Case No.: 08-61395 Chapter 11 Petition Date: October 6, 2008 Court: District of Montana (Butte) Judge: Ralph B. Kirscher Debtor's Counsel: Harold V. Dye, Esq. firm@dyemoelaw.com PO BOX 9198 MISSOULA, MT 59807-9198 Tel: (406) 542-5205 Estimated Assets: $1,000,000 to $10,000,000 Estimated Debts: $100,000 to $1,000,000 Sport Land, Inc., did not a list of 20 largest unsecured creditors. STEVE & BARRY'S: Wants Until May 5, 2009 to File Chapter 11 Plan ---------------------------------------------------------------- Steve and Barry's LLC and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York to extend through and including March 6, 2009, the period within which they can exclusively file a Chapter 11 plan, and through and including May 5, 2009, the period within which they may solicit and obtain acceptances for that plan. The Debtors assert that they need additional time to develop and negotiate a plan of liquidation and prepare a disclosure statement that contains adequate information under Section 1125 of the Bankruptcy Code. Counsel for the Debtors, Shai Y. Waisman, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that although the sale of substantially all of the Debtors' assets to BH S&B Holdings, LLC closed on August 26, 2008, a number of important actions are still being, or have yet to be, performed pursuant to the Asset Purchase Agreement with respect to the Sale. "Some of the tasks left to be performed include the reconciliation of the escrowed purchase price and the analysis and designation by the Purchaser of unexpired leases and executory contracts that have not yet been assumed or rejected by the Debtors," he says. Mr. Waisman further informs the Court that the Purchaser, who has until January 31, 2009, to designate leases and contracts, is still in the process of evaluating and analyzing dozens of the remaining leases and many of the remaining executory contracts. In that light, the Debtors may not be in a position to finalize which leases and contracts to assume or reject until after the designation deadline, he says. He adds that the affected parties will have 30 days after rejection to file proofs of claim with respect to executory contracts and unexpired leases the Purchaser may designate for rejection, so that the Debtors may not be able to assess the impact of all of the rejection damages claims until the end of February 2009. Also, pursuant to the Asset Purchase Agreement, the Purchaser and the Debtors agreed to conduct an inventory count and adjust the purchase price based on the results of that count. The inventory count has not been completed, and the Debtors cannot formulate a Chapter 11 plan until the Inventory Adjustment Process is completed, he explains. According to Mr. Waisman, the Debtors have likewise not yet completed the process of quantifying their potential exposure to administrative, priority, and unsecured claims. The Debtors have yet to file a motion for a general claims bar date and an administrative claims bar date in their cases, he says. Section 1121(b) of the Bankruptcy Code provides for an initial period of 120 days after the Petition Date during which a debtor has the exclusive right to propose a Chapter 11 plan, and 180 days from the Petition Date within which that debtor may solicit acceptances for that plan. Where the initial 120 days and 180 days exclusive periods prove to be an unrealistic time frame, the Court may extend a debtor's exclusive period for cause, Mr. Waisman reminds Judge Gropper. He adds that courts may consider factors as the size and complexity of the debtor's case, the existence of good-faith progress towards reorganization; the fact that the debtor is paying its bills as they come due, among others, in determining whether cause exists to extend that debtor's Exclusive Periods. Mr. Waisman points out that the Debtors have made substantial progress advancing their Chapter 11 cases and maximizing value for the benefit of their estates and creditors. "In the less than three months, the Debtors have commenced these chapter 11 cases and, among other things, negotiated, obtained approval for and consummated the Sale," he says. Moreover, since the Petition Date, the Debtors have worked on a number of tasks necessary for the administration of the Chapter 11 cases, including: -- stabilizing their business operations; -- addressing their liquidity needs; -- marketing their business and negotiating with various parties-in-interest through an arduous auction and sale process; -- closing the sale of substantially all of their assets within two months of the Petition Date; -- transitioning their operations to the Purchaser; -- preparing schedules of assets and liabilities and statements of financial affairs; -- addressing numerous issues raised by employees, vendors, taxing authorities, utility companies, landlords, and other parties-in-interest; and -- working with the Office of the U.S. Trustee to provide requested financial information and comply with reporting requirements under the Bankruptcy Code. "Indeed, extension of the Exclusive Periods will increase the likelihood of a greater distribution to the Debtors' stakeholders by facilitating an orderly, efficient and cost-effective plan process for the benefit of all creditors," Mr. Waisman avers. On the contrary, he says, termination of the Exclusive Periods could give rise to the threat of multiple plans and a contentious confirmation process resulting in increased administrative expenses and consequently diminishing returns to the Debtors' creditors. Mr. Waisman assures the Court that granting the request will not harm or prejudice creditors or other parties-in-interest in the Chapter 11 cases. The Debtors also intend to wind down the remainder of the estates as soon as practicable, he adds. In light of the request, the Court will convene a hearing on October 16, 2008. Parties-in-interest must file their objections with the Court by October 13. About Steve & Barry's Headquartered in Port Washington, New York, Steve and Barry's 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. The discount clothing chain's brands include 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. On Aug. 22, 2008, the Debtors obtained permission from the Court to sell substantially all of their assets for $168 million to a joint venture by Bay Harbour Management and York Capital, BHY S&B Holdings, LLC. Under the terms of the purchase agreement, majority of the Debtors' 276 stores will remain open. Pursuant to the Purchase Agreement, the Court authorized 51 Debtors to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) has been changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) is now known as Steel Bolt LLC. When the Debtors filed for bankruptcy, they listed $693,492,000 in total assets and $638,086,000 in total debts. STEVE & BARRY'S: Panel Compels Insiders to Produce Documents ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Steve & Barry's asks the United States Bankruptcy Court for the Southern District of New York to direct the production of documents and the examination of (a) individuals, corporate designees or representatives of the Debtors, and (b) Steven Shore and Barry Prevor, in both their representative and individual capacities. The Creditors Committee also seeks the Court's authority to issue subpoenas for testimony and the production of documents as it deems appropriate in its investigation. The Creditors Committee relates that it has a fiduciary responsibility to ensure that the Debtors' assets are used in a manner, which will maximize the recovery for general unsecured creditors. According to Cathy Hershcopf, Esq., at Cooley Godward Kronish LLP, in New York, in order for the Creditors Committee to carry out its duties, it is appropriate and necessary to investigate all areas, which could increase the recovery to unsecured creditors, including: * the Debtors' October 2006 transaction with TA Associates, Inc., pursuant to which Messrs. Shore and Prevor -- the Insiders -- received approximately $152,000,000 on account of certain notes and a portion of their common equity interests in the Debtors; * the Insiders' purchase of a junior participation interest in the GE Revolver Agreement, entered into by the Debtors, on one hand, and General Electric Capital Corporation, as agent, letter of credit issuer and lender; National City Bank, as letter of credit issuer; National City Business Credit, Inc., as co-agent; GE Capital Markets, Inc., as lead arranger; and certain other lenders, on the other hand, less than one month before the Petition Date. The GE Revolver Agreement provided for a revolving credit facility in the maximum aggregate of $197,000,000, with a sub-limit for letters of credit of $35,000,000. The Insiders purchased the Junior Participation in the Revolving Credit Facility in the aggregate of $5,000,000; and * issues related to the Debtors' accounting methods, systems and calculations. According to the Debtors, as of the Petition Date, the outstanding principal amount of all loans under the GE Revolver Agreement was approximately $135,000,000. Ms. Hershcopf says that questions exist as to whether the TA Transaction left the Debtors solvent and able to pay their debts as they became due. Moreover, the funds provided by the Insiders through the Junior Participation were provided less than one month before the Petition Date at the insistence of the Debtors' secured lenders. Given the Debtors' financial distress at that time, questions arise as to the true characterization of the Junior Participation, Ms. Hershcopf avers. Furthermore, while the Creditors Committee's due diligence is only in its initial stages, the financial press has widely reported potential improprieties relative to the Debtors' accounting, which must be carefully scrutinized, Ms. Hershcopf tells the Court. Included in the sale of substantially all of the Debtors assets are the Debtors' claims and causes of action against the Insiders, BDO Seidman LLP, and senior management -- Insider Claims. The Creditors Committee has eventually acceded to the demands of purchaser BH S&B Holdings, LLC, and consented to a sale of the Insider Claims. After the Sale was approved, counsel for the Insiders asked the Creditors Committee to support a "9019 motion," requesting approval of the sale of the Insider Claims to BH S&B Holdings. The Creditors Committee told the Debtors and counsel for the Insiders that some investigation of the causes of action was necessary before it could make an informed decision about the Draft 9019 Motion, according to Ms. Hershcopf. Counsel for the Insiders indicated that it was amendable to providing the Creditors Committee with certain documents to alleviate its concerns about the sale of the Insider Claims. However, since the Creditors Committee's counsel sent a document demand on September 25, 2008, neither the Debtors nor the Insiders have agreed to fully cooperate in responding to the document demand, Ms. Hershcopf relates. The Creditors Committee files this motion, in an abundance of caution, to ensure that the investigation is not unduly delayed and to avoid the further passage of time without a reliable and enforceable order that insures discovery, Ms. Hershcopf explains. This matter is scheduled to be heard on October 16, 2008. The deadline for objections is October 13. About Steve & Barry's Headquartered in Port Washington, New York, Steve and Barry's 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. The discount clothing chain's brands include 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. On Aug. 22, 2008, the Debtors obtained permission from the Court to sell substantially all of their assets for $168 million to a joint venture by Bay Harbour Management and York Capital, BHY S&B Holdings, LLC. Under the terms of the purchase agreement, majority of the Debtors' 276 stores will remain open. Pursuant to the Purchase Agreement, the Court authorized 51 Debtors to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) has been changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) is now known as Steel Bolt LLC. When the Debtors filed for bankruptcy, they listed $693,492,000 in total assets and $638,086,000 in total debts. (Steve & Barry's Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) STEVE & BARRY'S: Court Set January 26 to Remove Civil Actions ------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York extended deadline of Steve and Barry's LLC and its debtor-affiliates to file notices of removal of civil actions and proceedings until January 26, 2009, subject to the Debtors' right to seek a further extension. Headquartered in Port Washington, New York, Steve and Barry's 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. The discount clothing chain's brands include 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. On Aug. 22, 2008, the Debtors obtained permission from the Court to sell substantially all of their assets for $168 million to a joint venture by Bay Harbour Management and York Capital, BHY S&B Holdings, LLC. Under the terms of the purchase agreement, majority of the Debtors' 276 stores will remain open. Pursuant to the Purchase Agreement, the Court authorized 51 Debtors to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) has been changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) is now known as Steel Bolt LLC. When the Debtors filed for bankruptcy, they listed $693,492,000 in total assets and $638,086,000 in total debts. (Steve & Barry's Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Services Inc. http://bankrupt.com/newsstand/or 215/945-7000) SUN PRODUCTS: S&P Lifts Ratings After $1.2BB Unilever NA Buyout --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Westport, Connecitcut-based The Sun Products Corp. (Formerly Huish Detergents Inc.) to 'B+' from 'B'. In addition, S&P raised the company's senior secured first-lien bank loan rating to 'BB' from 'B+' and revised its recovery rating to '1' from '2', indicating the expectation of very high recovery of principal in the event of a payment default. S&P also assigned a 'BB' senior secured first-lien bank loan and '1' recovery rating to the company's $175 million term loan C add-on facility. S&P also raised Sun Products' senior secured second-lien bank loan rating to 'BB' from 'CCC+' and revised its recovery rating to '1' from '6'. In addition, S&P removed the company's ratings from CreditWatch with positive implications where it placed them on July 29, 2008. The outlook is stable. These actions affect about $1.2 billion of rated debt. The ratings upgrade is based on the company's enhanced business risk profile and material pro forma deleveraging as a result of its acquisition of Unilever's North American Fabric Care business for $1.45 billion. Sun Products is the second-largest detergent manufacturer in North America and has leading market positions in private-label and branded products. While Procter & Gamble Co. has the leading market position in the overall category, the company is the leader in the private-label segment which should continue to perform well in the weak economic environment. The outlook is stable. While pro forma leverage is high for the rating in the mid-5x area, S&P believes the company's enhanced business risk profile from the Unilever transaction, as well as its good free cash flow generation, should result in debt leverage improving to the low-5x area. "We would consider a negative outlook if the company faces operating challenges or demonstrates a more aggressive financial policy that results in increased debt leverage from current pro forma levels," noted Standard & Poor's credit analyst Patrick Jeffrey. This could result from flat to negative sales growth and a material decline in EBITDA over the outlook period. "Although unlikely over the near term, we would consider a positive outlook if the company reduces debt leverage approaching the low-4x area and maintains a financial policy consistent with a higher rating," he continued. SYNTAX-BRILLIAN: Vivitar's UK and Paris Offices Cease Trading ------------------------------------------------------------- Vivitar Corp.'s offices in the United Kingdom and France have closed with the loss of 26 staff, 14 in Leicester and 12 in Paris, as the firm, known as Vivitar SA France, ceases trading, Chris Cheesman of the Amateur Photographer Magazine reports. Amateur Photography Magazine is a British photography magazine. According to the report, the firm has gone into administration owing more than GBP4 million to creditors. Syntax-Brillian Corporation, which ran into financial difficulties and filed for bankruptcy under Chapter 11 in Delaware on July 8, is the parent company of photographic equipment maker Vivitar Corporation. The Vivitar worldwide brandname and associated intellectual property was recently sold to U.S. consumer electronics firm Sakar Internatinal. Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC) -- http://www.syntaxbrillian.com/-- manufactures and markets LCD HDTVs, digital cameras, and consumer electronics products include Olevia(TM) brand high-definition widescreen LCD televisions and Vivitar brand digital still and video cameras. Syntax-Brillian is the sole shareholder of California-based Vivitar Corporation. The company and two of its affiliates -- Syntax-Brillian SPE, Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection on July 8, 2008 (Bankr. D. Delaware Lead Case No.08-11409 to 08-11409. Dennis A. Meloro, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig LLP, represent the Debtors in their restructuring efforts. Five members compose the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions, LLC is the Debtors' balloting, notice, and claims agent. When the Debtors filed for protection from their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. SYNTAX-BRILLIAN: Plans to Close Industry Distribution Center ------------------------------------------------------------ Syntax-Brillian Corp. plans to close its 100,000-square-foot warehouse and distribution center and lay off employees, Ryan Carter of the Pasadena Star-News (California) reported Monday. The firm was expected to shutter its industry location on Sept. 15. But as of Monday, the plant on Business Parkway, in Walnut, California, was still in operation, with several of its 84 employees still on the grounds. Olevia International, which provides the plastic injection molded parts for Olevia-branded LCD televisions, is reportedly planning to buy Syntax's assets for $60 million. "Following a careful review of all of our alternatives, Syntax-Brillian's management and board of directors - working in close consultation with outside legal and financial advisors - unanimously determined that a sale, expedited through the Chapter 11 process, represents the best long-term for our retail partners, suppliers, employees and consumers," the company's interim CEO Gregory F. Rayburn said in a July statement. The sale, he said, would allow the firm to iron out liquidity issues over the past year. Those issues included 30 straight days of the firm's stock closing below Nasdaq's minimum $1-a-share requirement, leading to a delisting of its stock from the exchange, according to a company news release. Based in Tempe, Arizona, Syntax-Brillian Corporation (Nasdaq:BRLC) -- http://www.syntaxbrillian.com/-- manufactures and markets LCD HDTVs, digital cameras, and consumer electronics products include Olevia(TM) brand high-definition widescreen LCD televisions and Vivitar brand digital still and video cameras. Syntax-Brillian is the sole shareholder of California-based Vivitar Corporation. The company and two of its affiliates -- Syntax-Brillian SPE, Inc., and Syntax Groups Corp. -- filed for Chapter 11 protection on July 8, 2008 (Bankr. D. Delaware Lead Case No.08-11409 through 08-11409. Dennis A. Meloro, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig LLP, represent the Debtors in their restructuring efforts. Five members compose the Official Committee of Unsecured Creditors. Epiq Bankruptcy Solutions, LLC is the Debtors' balloting, notice, and claims agent. When the Debtors filed for protection from their creditors, they listed total assets of $175,714,000 and total debts of $259,389,000. TAMARACK RESORT: Fights Credit Suisse's Foreclosure of Assets ------------------------------------------------------------- John Miller at Fort Mill (South Carolina) Times reports that Tamarack Resort CEO Jean-Pierre Boespflug appeared before the U.S. Bankruptcy Court for the District of Idaho to object Credit Suisse Cayman Islands' efforts to start foreclosure on the Debtor's ski, golf, and lake resort in Donnelly. As reported in the Troubled Company Reporter on Feb. 25, 2008, Mr. Boespflug said that the bankruptcy filings of VPG Investments Inc. and Cross Atlantic Real Estate LLC, major stakeholders of Tamarack Resort, wouldn't interfere with the daily operations of the resort. VPG Investments holds a 27% stake and Cross Atlantic has 48% stake in the resort. According to Mr. Boespflug, Tamarack Resort failed to secure a loan from Societe Generale worth $118 million by Feb. 15, 2008, after the bank suffered a $7 billion loss related to fraud. VPG Investments and Cross Atlantic tried to stave off a foreclosure by Credit Suisse through filing separate bankruptcy petitions, Miami Herald reports. VPG Investments owes $262 million and Cross Atlantic owes an undisclosed amount to Credit Suisse, both loans are secured by their stakes at Tamarack Resort. Court documents say that Mr. Boespflug will open skiing in December but won't commit to keeping Tamarack Resort afloat without additional investors or a new buyer. According to the documents, Mr. Boespflug has made more than $11 million in loans -- largely from personal funds -- to the resort since April. Tamarack Resort posted a loss of $28.9 million through early August. Fort Mill Times relates that Mr. Boespflug wouldn't promise to keep the money flowing unless negotiations with a buyer or investor are successful. Fort Mill Times quoted Mr. Boespflug as saying, "As the conversation with the buyers are positive, which they are now, we anticipate to fund. We are predicting a positive outcome to this conversation by the end of October and if not, we are prepared to underwrite funding until after Christmas." Fort Mill Times reports that Mr. Boespflug is trying to convince the Court that he's still capable of finding new investors, but several efforts have failed, including a proposed $118 million construction loan from French bank Societe Generale that collapsed this year. According to Fort Mill Times, construction on Tamarack Resort's Village Plaza centerpiece is at a standstill. At least $56 million is needed to complete Village Plaza, the report says, citing Mr. Boespflug. About Credit Suisse Credit Suisse -- http://www.credit-suisse.com/-- provides its clients with investment banking, private banking and asset management services worldwide. Credit Suisse offers advisory services, comprehensive solutions and innovative products to companies, institutional clients and high-net-worth private clients globally, as well as retail clients in Switzerland. Credit Suisse is active in over 50 countries and employs approximately 40,000 people. Credit Suisse's parent company, Credit Suisse Group, is a leading global financial services company headquartered in Zurich. Credit Suisse Group's registered shares are listed in Switzerland and, in the form of American Depositary Shares, in New York. About Cross Atlantic Tamarack, Idaho-based Cross Atlantic Real Estate LLC owns 48% stake in and manages ski resort and land developer, Tamarack Resorts LLC. It filed for chapter 11 protection on Feb. 15, 2008 (Bankr. D. Idaho Case No. 08-00249). Thomas James Angstman, Esq., represents the Debtor in its restructuring efforts. It disclosed total assets of $44,190,000 and total debts of $0 when it filed for bankruptcy. Jean-Pierre Boespflug owns Cross Atlantic Real Estate. About VPG Investments Beverly Hills, California-based VPG Investments Inc. owns 27% of Tamarach Resorts LLC. It filed for chapter 11 protection on Feb. 15, 2008 (Bankr. D. Idaho Case No. 08-00253). Joseph M. Meier, Esq., at Cosho Humphrey LLP serves as the Debtor's counsel. It listed assets of $29,214,653 and debts of $301,407,518 when it filed for bankruptcy. Alfredo Miguel Afif, a Mexican businessman, owns VP Investments. About Tamarack Resort Tamarack Resort LLC -- http://www.tamarackidaho.com/-- is the first all-season resort to open in the U.S. in 24 years and has received national attention for its world-class mountain for skiing, hiking and mountain biking; Osprey Meadows, a Robert Trent Jones, Jr., signature golf course; and beautiful Lake Cascade, suitable for swimming, sailing, fishing, sea kayaking, and boating. A key element of the Tamarack community is The Club at Tamarack for homeowners, their families and guests. Nestled in Idaho's Payette River Mountains, Tamarack is a luxury boutique resort with a variety of lodging options all within walking distance of the four-season amenities. It opened in 2004 after Alfredo Miguel Afif and Jean-Pierre Boespflug took over a controversial and long-stalled ski resort project. TCGC LLC: Court Lets Hobart Enforce Restrictive Covenants --------------------------------------------------------- Malavika Jagannathan at Greenbaypressgazette.com reports that the Hon. William Griesbach of the U.S. District Court for the Eastern District of Wisconsin granted the village of Hobart permission to enforce a number of restrictive covenants on TCGC LLC's Thornberry Creek Golf Course. Greenbaypressgazette.com relates that the restictive covenants indicate that a buyer must keep the property a golf course, continue to pay taxes on the property, or receive written consent from the village if they plan to take the property off the tax rolls. According to Greenbaypressgazette.com, the Court's ruling made the Oneida Tribe of Indians re-evaluate its intention to purchase the golf course for $12 million. The report says that the tribe disclosed in June its intention to acquire the property. The tribe wanted to buy the property without any covenants attached to it, the report states. Greenbaypressgazette.com states that the price for the golf course would drop below $10 million if the covenants remained and the property would go to auction. The Oneida Tribe's chairperson Rick Hill said that the tribe was still interested to see the golf course operate but would "assess the impacts of moving forward," Greenbaypressgazette.com relates. Greenbaypressgazette.com reports that Judge Griesbach said that the covenants are conditions on the terms of the sale to the buyer. According to the report, Judge Griesbach stated, "The covenant is no more a restriction...than any other conditions (such as price or quality) that might influence any other potential buyer's decision." About TGCC, LLC TGCC, LLC -- http://www.thornberrycreekcc.net/-- owns and operates the Thornberry Creek Golf Course. The company filed for voluntary Chapter 11 bankruptcy protection in the Eastern District of Wisconsin on July 16, 2007. Paul G. Swanson, Esq., at Steinhilber Swanson Mares Marone & McDermott, represents the Debtor in its restructuring efforts. When it filed for bankruptcy, the Debtor listed $17,792,813 in assets and $16,879,672 in liabilities. TOWERS OF CHANNELSIDE: Emerges from Chapter 11 Bankruptcy --------------------------------------------------------- The Towers of Channelside LLC emerged from Chapter 11 bankruptcy protection on Wednesday evening, with a new plan to pay back creditors over a five-year period, Michael Hinman of the Tampa Bay Business Journal, reports. As reported in the Troubled Company Reporter on Oct. 3, 2008, the Hon. K. Rodney May of the United States Bankruptcy Court for the Middle District of Florida confirmed a second amended Chapter 11 plan of reorganization which was filed by company on Aug. 29, 2008. "We're officially out," said Richard Sacchi, one of the development partners for the project that was completed last year. Based in Plant City, Florida, the Towers of Channelside, LLC -- http://www.towersatchannelside.com/-- operates a 29-story twin tower condominium overlooking the Tampa Bay area. The developer filed for Chapter 11 protection on Jan. 25, 2008 (Bankr. M.D. Fla. Case No. 08-00939). Edward J. Peterson, III, Esq. and Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser P.A., represented the Debtor in its restructuring efforts. The Official Committee of Unsecured Creditors appointed in this bankruptcy case selected Forizs & Dogali, P.L. as its counsel. As reported in the Troubled Company Reporter on March 4, 2008, the Debtor's schedules showed total assets of $109,783,667 and total debts of $94,258,253. TRICOM SA: Court to Plane Hold Status Conference on October 16 -------------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York will convene on October 16, 2008, a status conference to consider issues related to confirmation of Tricom, S.A., and its debtor-affiliates' Prepackaged Chapter 11 Plan of Reorganization. During the September 11, 2008 omnibus hearing in the Debtors' Chapter 11 cases, Larren Nashelsky, Esq., at Morrison & Foerster, LLP, in New York, updated Judge Stuart Bernstein on the developments of the Debtors' cases. Mr. Nashelsky related that 122 claims have been filed as of the July 8, 2008 Claims Bar Date. The claims are composed of: -- 73 filed by parties who are parties to the Plan Support Agreement; -- three filed by General Electric Credit Corporation as secured creditor; -- 15 filed by trade creditors seeking amounts ranging from $3 to $150,000, which the Debtors believe have been paid or in the process of working with those trade creditors -- five filed by taxing authorities, which the Debtors believe have been resolved; -- seven filed by directors and officers seeking indemnity; -- six filed by the liquidators of Bancredit Cayman, Bancredito Panama and Banco de Leon; -- two were filed by the bankruptcy trustee of an entity called The Silicon, who had a preference litigation with Tricom in their bankruptcy case pending in Arizona; -- three shareholder claims; and -- about eight miscellaneous claims. Mr. Nashelsky stated that the Debtors believed the only significant claims that need to be resolved or dealt with are the claims of Bancredit Cayman, Bancredito Panama and Banco de Leon. Following the Court's summary judgment decision, Mr. Nashelsky related that the Debtors reached out to the two main creditors, the Ad Hoc Committee and the Affiliated Creditors, and the two liquidators, Bancredit Cayman and Bancredito Panama to discuss a possible resolution of their claims. There have been follow-up in-person meetings and telephone discussions between the parties in various combinations; everybody, different groups together, talking, he said. There have been in-person meetings in New York and Miami in an attempt to resolve those claims, and those discussions are ongoing. While there's currently no settlement agreed to by the parties, the Debtor believes that the discussions are important and are actually going very well; and is pushing the parties to continue to talk, Mr. Nashelsky told the Court. The Debtors, he said, believe the parties have all met in good faith and everybody has been very serious about the discussions and are working hard to see if a settlement is possible. The Debtors, Mr. Nashelsky further related, have about $13 million in cash as of the end of August. Major disbursements during the first six months of the Debtors' cases have been the Court-approved repayment of the Banco Progresso loan, interest to Credit Suisse and GECC, the two other major secured creditors, and the professional fees. The rest of the disbursements are due in every course variety, capital expenditures and operation of the business. There is about $5 million in accrued and unpaid professional fees; $2 million of which are the Debtors' professionals; and about $3 million of which are the fees and expenses of the advisors to parties of the PSA, which requires the Debtors to pay the fees and expenses of the advisors to the Ad Hoc Committee and Affiliated Creditors. Mr. Nashelsky admitted that the Debtors believed that their bankruptcy cases would be relatively short cases, and did not go to assume the PSA right off the bat hoping the bankruptcy cases moved quickly. The PSA parties have now requested the Debtors to put forth a motion to the PSA to pay up to 80% of the PSA fees. Mr. Nashelsky said the drain of the Debtors' bankruptcy cases is wearing on the Debtors' liquidity. In light of this, he said, the Debtors believe they need to have a confirmation by about the end of November. The Debtors, he added, are in discussions with their two largest creditors, and is on the process of commencing discussions with Banco de Leon, their third largest creditor. Banco de leon's counsel, John Howard Drucker, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in New York, during the hearing, informed Judge Bernstein that Banco de Leon has been excluded from the discussions between the Debtors and Bancredit Cayman and Bancredito Panama, but that he was happy that Banco de Leon will be included in the discussions. Banco de Leon, Mr. Nashelsky said, is successor to Bancredito Dominican Republic. 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. 14; Bankruptcy Creditors' Services Inc.; http://bankrupt.com/newsstand/or 215/945-7000) TRIESTE INVESTMENTS: Case Summary & Nine Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Trieste Investments, LLLP 7835 E. Redfield Road, Suite 102 Scottsdale, AZ 85260 Bankruptcy Case No.: 08-13674 Chapter 11 Petition Date: October 6, 2008 Court: District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Franklin D. Dodge, Esq. tdodge@rwrplc.com Ryan Rapp & Underwood, P.L.C. 3101 N. Central Avenue #1500 Phoenix, AZ 85012 Tel: (602) 280-1000 Fax: (602) 728-0422 Estimated Assets: $10 million to $50 million Estimated Debts: $10 million to $50 million Debtor's Nine Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ North Forth Worth loan $4,843,028 Management 7835 E. Redfield Road, Suite 102 Greenplex Investments LLC loan $3,596,546 7835 E. Redfield Road, Suite 102 Scottsdale, AZ 85260 Tel: (480) 991-2288 Liberty County Tax Office real estate taxes $14,732 PO Box 10288 Libert, TX 77575 Gordon, Arata, McCollam legal fees $3,093 Duplants & Eagan, LLP Tina Hart note payable $3,000 Womack McClish Wall & Foster PC Todd Russo note payable $2,000 Burch & Cracciolo legal fees $500 Verizon Wireless data plan $92 USA BABY: Has Until Oct. 8 to Respond to Creditors' Ch. 11 Filing ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern division, has given USA Baby, Inc. until Oct. 8 to respond to the involuntary Chapter 11 bankruptcy petition filed by Wallis Kraham of Binghamton, N.Y., Jack B. Whisler of Arlington Heights, Ill., and Leslie Ruess of San Diego, Kids Today reports. Kids Today is a news magazine for the infant and juvenile industry. The petitioning creditors are claiming breach of subscription agreement and seeking a combined total of $122,875. Based in Lombard, Illinois, USA Baby Inc. sells infant & children's furniture. On Sept. 5, 2008, three creditors, Wallis Kraham of Binghamton, N.Y., Jack B. Whisler of Arlington Heights, Ill., and Leslie Ruess of San Diego, filed an involuntary petition under Chapter 11 against the company (Bankr. N.D. Ill. Case No. 08-23564). Abraham Brustein, Esq., at Dimonte & Lizak, LLC, represents Wallis Kraham, one of the petitioning creditors. When the creditors filed an involuntary Chapter 11 petition against the Debtor, they listed total claims of $122,875. USA SPRINGS: No Auction for Bottled-Water Facility, Report Says --------------------------------------------------------------- John Quinn of Fosters (N.H.) Daily Democrat reports that a Sept. 29 scheduled auction of USA Spring Inc.'s unfinished bottled-water facility did not push through. James St. James Auctioneers continued to post on its Web site -- http://www.jsjauctions.com-- that the auction is ongoing even as late as an hour before the scheduled time, Mr. Quinn said. According to the report, James St. James Auctioneers referred inquiries about the proceedings to the business or the courts. An earlier June 30 sale of the company's property, buildings and equipment was postponed after USA Springs filed for Chapter 11 bankruptcy on June 27. The property, buildings and equipment, are estimated to be valued at $8.4 million overall, according to the legal foreclosure notice originally printed on June 9, the report said. There are no scheduled hearings in the USA Springs case, according to case managers at the U.S. Bankruptcy Court in Manchester, the report said. USA Springs has $335.17 in its checking account, but the business and real estate is worth more than $127 million, the report said, citing bankruptcy papers filed in court. Based in Nottingham, New Hampshire, USA Springs Inc. filed for Chapter 11 bankruptcy protection on June 27, 2008 (D. N.H. Case No. 08-11816). Armand M. Hyatt, Esq., at Hyatt & Flynn, PLLC, and Earl D. Munroe, Esq., at Muroe & Chew, represent the Debtor in its restructuring efforts. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee's counsel is Terrie Harman, Esq., at Harman Law Offices. In its schedules, the Debtor disclosed $127,000,335 in assets and $13,913,901 in liabilities. VALLAMBROSA HOLDINGS: Has Until October 23 to File Chapter 11 Plan ------------------------------------------------------------------ The United States Bankruptcy Court for the Southern District of Georgia extended the exclusive periods of Vallambrosa Holdings LLC and its debtor-affiliate, Jewett W. Tucker, Jr. to: a) file a Chapter 11 plan until Oct. 23, 2008, and b) solicit acceptances of that plan until Dec. 22, 2008. John K. Rezac, Esq., at Chamberlain, Hrdlicka, White, Williams & Martin in Atlanta, Georgia, told the Court that the Debtors were unable to complete a Chapter 11 plan and disclosure statement before their initial exclusive right to file a plan expired on Oct. 3, 2008, citing Mr. Tucker's health condition. Mr. Rezac related that Mr. Tucker was diagnosed with Crohn's disease and an upper respiratory illness earlier this year. Mr. Tucker has congestive heart failure and a leaking aortic valve, Mr. Rezac noted. Headquartered in Colbert, Georgia, Vallambrosa Holdings, LLC fka Vallambrosa Development Co., LLC, and its affiliate, Jewett W. Tucker, Jr., filed for Chapter 11 protection on May 6, 2008 (Bankr. S.D. Ga. Lead Case No. 08-40791). James L. Drake, Jr., Esq., represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of between $10 million and $50 million. VONAGE HOLDINGS: Revises Terms for $215MM Private Debt Financing ---------------------------------------------------------------- Vonage Holdings Corp. revised the terms for its proposed debt financing with Silver Point Finance, LLC. The Company previously announced the terms and conditions for up to $215 million in private debt financing consisting of: -- a $95.0 million senior secured first lien credit facility; and -- the sale of $90.0 million of convertible secured second lien notes due 2015. The proposed debt financing also contemplated assembling a syndicate of other lenders to provide up to $30 million of an incremental senior secured first lien credit facility. Vonage's management and board of directors, along with Silver Point have determined that it was in the best interest of all parties to further negotiate the terms of the contemplated financing. As a result, management and the board agreed that the new structure better meets the needs of the Company and the lenders. The private debt financing led by Silver Point is now expected to consist of: -- a $130.3 million senior secured first lien credit facility; -- a $72 million senior secured second lien credit facility; and -- the sale of $18 million of convertible secured third lien notes due 2015 with an initial conversion price of approximately $0.29 per share of common stock. Some of the other terms of the financing have changed, including the interest rates under the facilities and the convertible notes. The availability of the Silver Point financing continues to be subject to the negotiation and execution of definitive documentation. Once documentation is signed, closing for the full $220.3 million financing is expected to occur in November of 2008. The Company intends to use the net proceeds from the financing, plus cash on hand, to repurchase its existing convertible notes in a tender offer that the Company commenced on July 30, 2008. The existing convertible notes can be put to the Company on December 16, 2008, and have a principal amount outstanding of approximately $253 million. John Rego, the Company's Chief Financial Officer, said, "We continue to work diligently to complete the refinancing of our convertible notes and are encouraged by our progress to date. We believe the updated structure we are announcing today will provide the necessary funding to operate our business for the foreseeable future." About Vonage Holdings Corp. Headquartered in Holmdel, New Jersey, Vonage Holdings Corp. (NYSE:VG) -- http://www.vonage.com/-- provides broadband telephone services with nearly 2.6 million subscriber lines. The company's Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and features like call waiting, call forwarding and voicemail for a flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. Going Concern Doubt BDO Seidman, LLP, in Woodbridge, New Jersey, raised substantial doubt as to Vonage Holdings Corp.'s ability to continue as a going concern after auditing the company's consolidated financial statements for the years Dec. 31, 2007, and 2006. Vonage Holdings's balance sheet at June 30, 2008, showed $466.1 million in total assets and $551.9 million in total liabilities, resulting in an $85.8 million stockholders' deficit. WACHOVIA CORP: Citigroup & Wells Suit Standstill Ends Today ----------------------------------------------------------- Wachovia Corporation agreed with Citigroup Inc. and Wells Fargo & Co. to a standstill of all formal litigation activity effective immediately. The standstill agreement will terminate at noon on Oct. 8, 2008, unless extended. Wachovia, Citigroup, and Wells Fargo, in consultation with the Federal Reserve, agreed to cease any formal discovery activities, and cooperate in good faith to agree among themselves to secure orders necessary in all applicable cases in all jurisdictions tolling any schedules for the filing of litigation papers or court appearances or any other formal litigation deadlines, with the goal of preserving the status quo during the litigation standstill period. Citigroup said it filed a complaint in the Supreme Court of the State of New York against Wachovia, Wells Fargo, and the directors of the two companies on Oct. 4, seeking more than $20 billion in compensatory damages and more than $40 billion in punitive damages from Wells Fargo for tortious interference with Citigroup's contract with Wachovia. On Sept. 29, Citigroup and Wachovia disclosed an agreement-in principle for Citigroup to acquire all of the banking subsidiaries of Wachovia. At the time the Wachovia-Wells Fargo transaction was announced, Citigroup was finalizing the agreements required to consummate its FDIC-assisted open bank transaction with Wachovia. Citigroup said, "The Citi-Wachovia transaction would have been signed and announced on Friday, October 3rd if it had not been subverted by the unlawful conduct of Wachovia, Wells Fargo, and their officers and directors and outside advisors." Citigroup is seeking relief from Wachovia for its bad faith breach of that contract. As reported in the Troubled Company Reporter on Oct. 6, 2008, the Hon. Charles Ramos of the Supreme Court of the State of New York granted Citigroup an emergency injunctive relief extending the company's Exclusivity Agreement with Wachovia until further order of the court. This relief was granted over the objection of Wachovia. "The appellate court has entered an order vacating Judge Ramos's order of [Oct. 5]," Wells Fargo said. The Wall Street Journal reports that talks to resolve the dispute are ongoing. Citigroup will most likely acquire branches from Wachovia in the Northeast and mid-Atlantic region, while sources said that Wells Fargo would get Wachovia branches in the Southeast and California as well as the asset-management and brokerage arms, sending the bulk of Wachovia's balance sheet to Wells Fargo, WSJ states. Sources told WSJ that Citigroup, aiming for a bigger share of Wachovia's deposits, is seeking partners to join its bid for the bank. According to the report, the sources said that a quick resolution on the dispute appears increasingly unlikely. The report states that Citigroup and Wells Fargo want the greatest-possible share of Wachovia's $448 billion in low-cost deposits and the bank's assets, many of which are in the form of troubled real-estate loans. About Citigroup Inc. Headquartered on New York City, Citigroup Inc., a.k.a. Citi (NYSE: C) -- http://www.citigroup.com/citigroup/-- a leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. The company's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. About Wells Fargo Wells Fargo & Company -- http://wellsfargo.com-- is a diversified financial services company with $609 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and the internet across North America and elsewhere internationally. About Wachovia Corporation Based in Charlotte, North Carolina, Wachovia Corporation (NYSE:WB) -- http://www.wachovia.com/-- is one of the nation's diversified financial services companies, with assets of $812.4 billion at June 30, 2008. Wachovia provides a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services to customers through 3,300 retail financial centers in 21 states from Connecticut to Florida and west to Texas and California, and nationwide retail brokerage, mortgage lending and auto finance businesses. Clients are served in selected corporate and institutional sectors and through more than 40 international offices. Its retail brokerage operations under the Wachovia Securities brand name manage more than $1.1 trillion in client assets through 18,600 registered representatives in 1,500 offices nationwide. Online banking is available at wachovia.com; online brokerage products and services at wachoviasec.com; and investment products and services at evergreeninvestments.com. Wachovia is exposed to large mortgage losses as a result of its 2006 purchase of mortgage lender Golden West Financial Corp., according to The Wall Street Journal. The company, WSJ stated, now believes total losses for Golden West's payment option loan portfolio could eventually reach 12%, up from previous forecasts. Wachovia has lowered its second-quarter results to account for a possible legal settlement. Wachovia said its second-quarter net loss will be $9.11 billion instead of $8.86 billion. It has disclosed a $500 million pretax increase to legal reserves. Wachovia has also disclosed plans to lay off 6,950 people to reduce expenses. As reported in the Troubled Company Reporter on Oct. 2, 2008, Moody's Investors Service lowered Wachovia Corporation's preferred stock rating to Ba3 from A3 and placed it under review with direction uncertain. As reported in the Troubled Company Reporter on Oct. 1, 2008, Standard & Poor's Ratings Services placed all its ratings on Wachovia Corp. and Wachovia Bank on CreditWatch with negative implications. S&P also lowered its DRD Series J and K and convertible preferred stock Series L ratings on Wachovia Corporation to 'BB' from 'A-', as these securities will not be acquired and will continue to reside with the new Wachovia. WACHOVIA CORP: Fitch Lifts Issuer Default Rtng to 'A+' from 'BB-' ----------------------------------------------------------------- Wells Fargo & Company's definitive agreement to acquire Wachovia Corporation and subsidiaries is a vastly improved deal for bondholders (from the Citigroup deal) that more than doubles WFC's balance sheet and branch network and offers WFC the opportunity to transform itself into a coast to coast banking operation, according to Fitch Ratings, which has affirmed WFC's Issuer Default Rating at 'AA' on the announcement. Separately, Fitch has upgraded Wachovia's IDR to 'A+' from 'BB-' and placed it on Rating Watch Positive, along with the 'A+' senior debt of Wachovia and subsidiaries. While not immune from the pressures on consumer and residential real estate loans, WFC has fared relatively better than many others operating in this space. Additionally, while every merger has integration risks, WFC's track record with large acquisitions has been excellent, which bodes well for its whole company transaction of Wachovia. Fitch's upgrade of Wachovia's ratings reflects the reduced uncertainty regarding the creditworthiness of the Wachovia holding company post closing. In the transaction with Citigroup, the holding company was to remain independent. Fitch had taken numerous actions on Wachovia's ratings following the previously announced deal with Citigroup. The Positive Rating Watch reflects Fitch's expectation that Wachovia's ratings will be aligned with those of WFC's at closing. Wells Fargo will offer in a fixed exchange ratio 0.1991 Wells Fargo shares for each Wachovia share, valuing Wachovia Corporation at approximately $15.1 billion. Wells Fargo plans to raise up to $20 billion in equity which is expected to be mostly in the form of common stock. However, due to the size of the transaction WFC's capital levels will fall below current levels. Through previous preferred issuances, WFC had been building its capital levels in anticipation of acquisition opportunities. WFC's historically strong earnings and equity generation rates should enable the combined company to rebuild capital over time. The transaction is expected to close on or before Dec. 31, 2008 and is subject to approval by Wachovia shareholders and regulators. While regulators have yet to opine on this transaction, Fitch does not currently see any reason why this transaction would not receive regulatory approval. WFC expects to record $10 billion in merger and integration charges and expects to record $5 billion annual expense reduction through synergies. Fitch has affirmed these ratings: Wells Fargo & Co. -- Long-term IDR at 'AA'; -- Senior debt at 'AA'; -- Short-term IDR at 'F1+'; -- Short-term debt at 'F1+'. -- Subordinated debt at 'AA-'; -- Preferred at 'AA-'; -- Individual at 'A/B'; -- Support at '5'; -- Support Floor at 'NF'. Wells Fargo Bank, NA -- Long-term IDR at 'AA'; -- Long-term deposits at 'AA+'; -- Short-term IDR at 'F1+'; -- Short-term deposits at 'F1+'; -- Short-term debt at 'F1+'. -- Subordinated debt at 'AA-'; -- Individual at 'A/B'; -- Support at '2'; -- Support Floor at 'BBB-'. Wells Fargo Bank Northwest, NA -- Long-term IDR at 'AA'; -- Long-term deposits at 'AA+'; -- Senior debt at 'AA'. -- Short-term IDR at 'F1+'; -- Short-term deposits at 'F1+'; -- Individual at 'A/B'; -- Support at '2'; -- Support Floor at 'BBB-'. Wells Fargo Financial, Inc. -- Long-term IDR at 'AA'; -- Senior debt at 'AA'. Wells Fargo Capital II Wells Fargo Capital Trust IV, VII, VIII, X, XI, XIV InterWest Capital Trust I -- Preferred at 'AA-'. Wells Fargo Financial Canada Corp. -- Long-term IDR at 'AA'; -- Short-term IDR at 'F1+'; -- Senior debt at 'AA'; -- Short-term debt at 'F1+'. WFC Holdings Corp. -- Subordinated debt at 'AA-'. Greater Bay Bank, NA -- Individual Rating at 'A/B'; -- Long-term IDR at 'AA'; -- Short-term IDR at 'F1+'; -- Support at '2'; -- Support Floor at 'BBB-'; -- Long-term deposits at 'AA+'; -- Short-term deposits at 'F1+'. Greater Bay Bancorp, Inc. -- Senior debt at 'AA'. Fitch has also taken these rating actions on Wachovia and subsidiaries: Wachovia Corporation -- Long-term IDR upgraded to 'A+' from 'BB-' and placed on Rating Watch Positive; -- Short-term IDR upgraded to 'F2' from 'B' and placed on Rating Watch Positive; -- Short-term debt upgraded to 'F2' from 'B' and placed on Rating Watch Positive; -- Senior long-term debt, rated 'A+', placed on Rating Watch Positive; -- Subordinated debt, rated 'A', placed on Rating Watch Positive; -- Preferred stock upgraded to 'A-' from 'B+' from and placed on Rating Watch Positive; -- Individual upgraded to 'C' from 'D' and placed on Rating Watch Positive; -- Support remains at '5'; -- Support Floor remains at 'NF'. Wachovia Bank, NA -- Long-term IDR, rated 'A+', placed on Rating Watch Positive; -- Short-term IDR affirmed at 'F1+' and removed from Rating Watch Negative; -- Short-term deposits affirmed at 'F1+' and removed from Rating Watch Negative; -- Long-term deposits, rated 'AA-', placed on Rating Watch Positive; -- Senior long-term debt, rated 'A+', placed on Rating Watch Positive; -- Subordinated debt, rated 'A', placed on Rating Watch Positive; -- Individual, rated 'B', placed on Rating Watch Positive; -- Support remains at '2'; -- Support Floor remains at 'BBB-'. Wachovia Bank of Delaware, NA -- Long-term IDR 'A+', placed on Rating Watch Positive; -- Short-term IDR affirmed at 'F1+' and removed from Rating Watch Negative; -- Individual, rated 'B', placed on Rating Watch Positive; -- Support remains at '2'; -- Support Floor remains at 'BBB-'. Wachovia Mortgage, FSB -- Long-term IDR, rated 'A+', placed on Rating Watch Positive; -- Short-term IDR affirmed at 'F1+' and removed from Rating Watch Negative; -- Short-term deposits affirmed at 'F1+' and removed Rating Watch Negative; -- Long-term deposits, rated 'AA-', placed on Rating Watch Positive; -- Senior long-term debt, rated 'A+', placed on Rating Watch Positive; -- Individual, rated 'B', placed on Rating Watch Positive; -- Support remains at '2'; -- Support Floor remains at 'BBB-'. Wachovia Bank, FSB (Texas) -- Long-term IDR, rated 'A+', placed on Rating Watch Positive; -- Short-term IDR affirmed at 'F1+' and removed from Rating Watch Negative; -- Short-term deposits affirmed at 'F1+' and removed from Rating Watch Negative; -- Long-term deposits, rated 'AA-', placed on Rating Watch Positive; -- Individual, rated 'B', placed on Rating Watch Positive; -- Support remains at '2'; -- Support Floor remains at 'BBB-'. Wachovia Capital Finance Corporation (Canada) (guaranteed by Wachovia Bank, NA) -- Short-term IDR affirmed at 'F1+' and removed from Rating Watch Negative. Congress Financial Capital Company (guaranteed by Wachovia Corporation) -- Long-term IDR, rated 'A+', placed on Rating Watch Positive; -- Senior long-term debt, rated 'A+', placed on Rating Watch Positive. Golden West Financial Corporation -- Senior long-term debt, rated 'A+', placed on Rating Watch Positive. SouthTrust Bank -- Senior long-term debt, rated 'A+', placed on Rating Watch Positive; -- Subordinated debt, rated 'A', placed on Rating Watch Positive. First Union National - Florida SouthTrust Corporation Western Financial Bank -- Subordinated debt, rated 'A', placed on Rating Watch Positive. Wachovia Capital Trust I, II, III, IV, V, IX Central Fidelity Capital Trust I Corestates Capital I, II, III First Union Capital I, II First Union Institutional Capital I, II -- Preferred, rated 'A', placed on Rating Watch Positive. WARWICK PROPERTIES: Case Summary & Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Warwick Properties, LLC 7683 SE 27th Street, St 241 Mercer Island, WA 98040 Bankruptcy Case No.: 08-16620 Type of Business: The Debtor engages in real estate transaction including merger and acquisitions. See: http://www.warwickproperties.com/ Chapter 11 Petition Date: October 6, 2008 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Jeffrey B. Wells, Esq. eajbwellaw@aol.com Attorney at Law Jeffrey B. Wells 500 Union St., Suite 927 Seattle, WA 98101 Tel: (206) 624-0088 Total Assets: $6,000,000 Total Debts: $20,809,717 Debtor's Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Federal Trade Commission trade debt $17,775,369 915 Second Avenue, Ste. 2896 Seattle, WA 98174 WHITE DEVELOPMENT: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: White Development Corporation 206 Stable Run Oxford, MS 38655 Bankruptcy Case No.: 08-14067 Type of Business: The Debtor develops real estate and builds houses in Desoto, Tate and Lafayette Counties in North Mississippi. See: http://www.whitedevelopmentcorp.com/ Chapter 11 Petition Date: October 6, 2008 Court: Northern District of Mississippi (Aberdeen) Debtor's Counsel: Derek A. Henderson, Esq. d_henderson@bellsouth.net 111 East Capitol Street, Suite 455 Jackson, MS 39201 Tel: (601) 948-3167 Estimated Assets: Less than $50,000 Estimated Debts: $1,000,000 to $50,000,000 A list of the Debtor's largest unsecured creditors is available for free at http://bankrupt.com/misc/msnb08-14067.pdf WILLIAM DEL BIAGGIO: Nashville Predators Files Claim for Damages ---------------------------------------------------------------- The Nashville Predators filed a claim Wednesday with the United States Bankruptcy Court for the Northern District of California, claiming damages caused by former team co-owner William Del Biaggio, the National Post (Ontario) reported Thursday. Del Biaggio's 27% share of the National Hockey League team has been under the control of the Bankruptcy Court since Mr. Del Biaggio filed for bankruptcy in June. The report says that Mr. Del Biaggio is under investigation by U.S. federal authorities, and is facing several lawsuits which claim that he defrauded lenders when he was obtaining financing to purchase his share of the team last winter. The newspaper adds that the Nashville-based ownership group is claiming potential lost revenue in sponsorships, ticket sales and other revenue. The Tennessean also reports that the ownership group is itself in default of a loan with an investment bank as a result of Mr. Del Biaggio's business dealings. According to the National Post, Jim Balsillie, the CEO and co-founder of Research In Motion Ltd., is interested in purchasing Mr. Del Biaggio's share. 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 assets and $50 million to $100 million in debts. The TCR reported 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 that Mr. Del Biaggio co-founded, also 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. * S&P Downgrades Ratings on 93 Classes from 10 US ALT-A RMBS ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on 93 classes from 10 U.S. Alternative-A residential mortgage-backed securities transactions issued in 2005-2007. S&P removed 53 of the lowered ratings from CreditWatch with negative implications. The affected issuer shelves include Adjustable Rate Mortgage Trust, Citigroup Mortgage Loan Trust, Harborview Mortgage Loan Trust, IndyMac INDB Mortgage Loan, IndyMac INDX Mortgage Loan Trust, and Terwin Mortgage Trust. In addition, S&P affirmed 28 ratings on these transactions, one of which it removed from CreditWatch with negative implications. The downgrades, affirmations, and CreditWatch resolutions reflect the transactions' current and projected losses based on the dollar amounts of loans currently in the delinquency, foreclosure, and real estate owned pipelines, as well as S&P's projection of future defaults. S&P also incorporated cumulative losses to date in it analysis when determining rating outcomes. The lowered ratings also reflect S&P's belief that the amount of available credit enhancement for the downgraded classes is not sufficient to cover losses at the previous rating levels. Severe delinquencies amounted to approximately 20% of the current pool balances for most of the transactions, and cumulative losses to date were generally between 0.3% and 4.0% of the original pool balances. However, due to the deteriorating performance of most of the transactions reviewed, along with the current condition of the housing market, S&P is projecting cumulative losses to increase significantly. The rating affirmations reflect sufficient credit enhancement to support the ratings at their current levels. Certain senior classes also benefit from senior support provided by classes that would bear any applicable losses before they could affect the super-senior certificates. The subordination of more-junior classes within each structure provides credit support for the affected transactions. Additionally, some structures feature overcollateralization and excess spread, which can absorb losses and accelerate payments to certain securityholders. The collateral backing the affected trusts originally consisted predominantly of Alt-A fixed- or adjustable-rate first-lien mortgage loans on one- to four-family residential properties. As S&P monitors these transactions over time, it incorporate updated losses and delinquency pipeline performance to determine whether the applicable credit enhancement features are sufficient to support the current ratings. S&P will continue to monitor these deals and take additional rating actions as appropriate. Rating Actions Adjustable Rate Mortgage Trust 2005-11 Series 2005-11 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A-2 007036UY0 BB AAA 2-A-1-1 007036UZ7 BBB- AAA 2-A-1-2 007036VA1 BB+ AAA 2-A-2 007036VB9 BB AAA 2-A-3 007036VC7 BB AAA 2-A-4-1 007036VD5 BB+ AAA 2-A-4-2 007036VE3 BB AAA 3-A-1 007036VF0 BB AAA 4-A-2 007036VH6 BB AAA C-B-1 007036VJ2 CCC AA/Watch Neg C-B-2 007036VK9 CCC A/Watch Neg C-B-3 007036VL7 CC BBB-/Watch Neg C-B-4 007036VP8 CC BB/Watch Neg C-B-5 007036VQ6 D B/Watch Neg 5-A-2 007036UR5 A AAA 5-M-1 007036US3 B AA/Watch Neg 5-M-2 007036UT1 CCC A/Watch Neg 5-M-3 007036UU8 CCC BBB/Watch Neg 5-M-4 007036UV6 CC BB+/Watch Neg 5-M-5 007036UW4 CC B/Watch Neg Adjustable Rate Mortgage Trust 2005-6A Series 2005-6A Rating ------ Class CUSIP To From ----- ----- -- ---- 1-B-1 007036PL4 BB AA/Watch Neg 2-B-1 007036PP5 BB- AA/Watch Neg 2-B-2 007036PQ3 CCC A+/Watch Neg 1-B-2 007036PM2 CCC A/Watch Neg 2-B-3 007036PR1 CC BBB/Watch Neg 1-B-3 007036PN0 CCC BBB-/Watch Neg 1-B-4 007036PU4 CC BB/Watch Neg 2-B-4 007036PX8 CC BB/Watch Neg 2-B-5 007036PY6 D B/Watch Neg Citigroup Mortgage Loan Trust 2007-AR1 Series 2007-AR1 Rating ------ Class CUSIP To From ----- ----- -- ---- A2 17310UAB8 BBB- AAA A3 17310UAC6 BBB- AAA A4 17310UAD4 B AAA/Watch Neg M1 17310UAE2 CCC BBB-/Watch Neg M2 17310UAF9 CC CCC Harborview Mortgage Loan Trust 2005-14 Series 2005-14 Rating ------ Class CUSIP To From ----- ----- -- ---- 2-A-1B 41161PYR8 AA AAA 3-A-1B 41161PYS6 BB+ AAA 4-A-1B 41161PYT4 BB+ AAA 5-A-1B 41161PYU1 BB+ AAA B-1 41161PWZ2 B AA/Watch Neg B-2 41161PXA6 CCC BBB/Watch Neg B-3 41161PXB4 CCC B/Watch Neg B-5 41161PXD0 D CC HarborView Mortgage Loan Trust 2005-6 Series 2005-6 Rating ------ Class CUSIP To From ----- ----- -- ---- B-1 41161PPD9 A+ AA+ B-2 41161PPE7 B- A/Watch Neg B-3 41161PPF4 CCC B/Watch Neg Harborview Mortgage Loan Trust 2006-6 Series 2006-6 Rating ------ Class CUSIP To From ----- ----- -- ---- 1A-1B 41161UAB8 B+ AAA/Watch Neg 2A-1A 41161UAC6 AA- AAA 2A-1B 41161UAD4 B AAA/Watch Neg 3A-1B 41161UAF9 B+ AAA 4A-1A 41161UAG7 AA AAA/Watch Neg 4B-1B 41161UAH5 B AAA X-4 41161UAT9 AA AAA 5A-1A 41161UAJ1 AA- AAA/Watch Neg 5A-1B 41161UAK8 B AAA B-1 41161UAL6 CCC AA/Watch Neg B-2 41161UAM4 CC BB/Watch Neg B-3 41161UAN2 CC CCC B-4 41161UAP7 D CC IndyMac INDB Mortgage Loan Trust 2006-1 Series 2006-1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 45661JAA1 AAA AAA/Watch Neg A-2 45661JAB9 BBB- AAA/Watch Neg A-3A 45661JAC7 AA AAA A-3B 45661JAD5 BB AAA/Watch Neg M-1 45661JAE3 B AA+/Watch Neg M-2 45661JAF0 CCC BBB/Watch Neg M-3 45661JAG8 CCC BB/Watch Neg IndyMac INDX Mortgage Loan Trust 2005-AR31 Series 2005-AR31 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A-2 45660LW21 B+ AAA 2-A-2 45660LW47 B AAA 3-A-1 45660LW54 B AAA 4-A-2 45660LW88 B AAA 5-A-2 45660LX20 B+ AAA B-1 45660LX46 CCC A/Watch Neg B-2 45660LX53 CC BB/Watch Neg B-3 45660LX61 CC B/Watch Neg B-4 45660LX79 D CCC IndyMac INDX Mortgage Loan Trust 2005-AR33 Series 2005-AR33 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A-1 45660L4W6 BBB- AAA 1-A-2 45660L4X4 B AAA/Watch Neg 2-A-1 45660L4Y2 BBB- AAA 2-A-2 45660L4Z9 B AAA/Watch Neg 3-A-1 45660L5A3 BBB- AAA 3-A-2 45660L5B1 B AAA/Watch Neg 4-A-1 45660L5C9 BBB- AAA 4-A-2 45660L5D7 B AAA/Watch Neg B-1 45660L5F2 CCC A/Watch Neg B-2 45660L5G0 CC BB/Watch Neg B-3 45660L5H8 CC B/Watch Neg B-4 45660L5K1 D CCC Terwin Mortgage Trust 2006-17HE Series 2006-17HE Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 88156EAD8 B AAA/Watch Neg A-2A 88156EAA4 B AAA/Watch Neg A-2B1 88156EAB2 BBB AAA A-2B2 88156EAN6 B AAA/Watch Neg A-2C 88156EAC0 B AAA/Watch Neg M-1 88156EAE6 CC BBB/Watch Neg M-2 88156EAF3 CC BB/Watch Neg M-3 88156EAG1 D CC Ratings Affirmed Adjustable Rate Mortgage Trust 2005-11 Series 2005-11 Class CUSIP Rating ----- ----- ------ 1-A-1 007036UX2 AAA 4-A-1 007036VG8 AAA 5-A-1 007036UQ7 AAA Adjustable Rate Mortgage Trust 2005-6A Series 2005-6A Class CUSIP Rating ----- ----- ------ 1-A-1 007036PA8 AAA 1-A-2-1 007036PB6 AAA 1-A-2-2 007036PC4 AAA 1-A-3-1 007036PD2 AAA 1-A-3-2 007036PE0 AAA 1-X 007036PF7 AAA 2-A-1 007036PG5 AAA 2-A-2 007036PH3 AAA 2-X 007036PJ9 AAA Citigroup Mortgage Loan Trust 2007-AR1 Series 2007-AR1 Class CUSIP Rating ----- ----- ------ A1 17310UAA0 AAA Harborview Mortgage Loan Trust 2005-14 Series 2005-14 Class CUSIP Rating ----- ----- ------ 2-A-1A 41161PWT6 AAA 3-A-1A 41161PWU3 AAA 4-A-1A 41161PWV1 AAA 5-A-1A 41161PWW9 AAA HarborView Mortgage Loan Trust 2005-6 Series 2005-6 Class CUSIP Rating ----- ----- ------ 1-A-1A 41161PPB3 AAA 1-A-1B 41161PQR7 AAA X 41161PPC1 AAA Harborview Mortgage Loan Trust 2006-6 Series 2006-6 Class CUSIP Rating ----- ----- ------ 1A-1A 41161UAA0 AAA 3A-1A 41161UAE2 AAA IndyMac INDX Mortgage Loan Trust 2005-AR31 Series 2005-AR31 Class CUSIP Rating ----- ----- ------ 1-A-1 45660LV97 AAA 2-A-1 45660LW39 AAA 4-A-1 45660LW70 AAA 5-A-1 45660LW96 AAA A-X 45660LX38 AAA * S&P Chips Ratings on 136 Classes of 28 RMBS Transactions ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 136 classes from 28 residential mortgage-backed securities transactions backed by U.S. subprime mortgage loan collateral issued in 2005 and 2006. At the same time, S&P removed 88 of the lowered ratings from CreditWatch with negative implications. In addition, S&P affirmed its ratings on 196 classes from the same 28 RMBS deals and removed 32 of the affirmed ratings from CreditWatch negative. The downgraded classes represent an original par amount of approximately $4.33 billion, or about 1% of the par amount of U.S. RMBS backed by first-lien subprime mortgage loans rated by Standard & Poor's in 2005 and 2006. S&P previously took rating actions on approximately $0.59 billion of the total amount of affected securities. In addition, the classes with affirmed ratings represent an original par amount of approximately $17.89 billion subprime RMBS certificates issued in 2005 and 2006. The downgrades reflect S&P's opinion that projected credit support for the affected classes is insufficient to maintain the previous ratings, given S&P's current projected losses. As announced in "S&P Provides Projected Losses For U.S. Subprime RMBS Issued In 2005," published July 23, 2008, and "S&P Revises Deal-Specific Projected Losses For U.S. Subprime RMBS Issued In 2006, 2007," published Aug. 19, 2008, on RatingsDirect, its default curve for U.S. subprime RMBS is a key component of S&P's loss projection analysis of U.S. RMBS transactions, which is discussed in "Standard & Poor's Revised Default And Loss Curves For U.S. Subprime RMBS," published Oct. 19, 2007. With the recent continued deterioration in U.S. RMBS performance, however, S&P is adjusting its loss curve forecasting methodology to more explicitly incorporate each transaction's current delinquency, default, and loss trends. Some transactions are experiencing foreclosures and delinquencies at rates greater than S&P's initial projections. S&P believes that adjusting its projected losses, which it derived from its default curve analysis, is appropriate in cases where the amount of current delinquencies indicates a different timing or level of loss. In addition, S&P recently revised its loss severity assumption for transactions issued in 2006 and the first half of 2007, as described in "Standard & Poor's Revises U.S. Subprime, Prime, And Alternative-A RMBS Loss Assumptions," published July 30, 2008. S&P based the revised assumptions on its belief that continued foreclosures, distressed sales, increased carrying costs, and a further decline in home sales will continue to depress prices and push loss severities higher than it previously anticipated. The lowered ratings reflect S&P's assessment of credit support under three constant prepayment rate scenarios. The first scenario utilizes the lower of the lifetime or 12-month CPR, while the second utilizes a 6% CPR, which is very slow by historical standards. The third scenario uses a prepayment rate that is equal to two times the lower of the lifetime or 12-month CPR. S&P incorporated a third CPR scenario into its cash flow analysis to account for potential increases in prepayments, which may occur from normal increases typically found in the seasoning of pools combined with a chance that governmental proposals, if adopted, may lead to increased CPRs. S&P assumed a constant default rate for each pool. Because the analysis focused on each individual class with varying maturities, prepayment scenarios may cause an individual class or the transaction itself to prepay in full before it incurs the entire loss projection. Slower prepayment assumptions lengthen the average life of the mortgage pool, which increases the likelihood that total projected losses will be realized. The longer a class remains outstanding, however, the more excess spread it generates. To assess the creditworthiness of each class, S&P reviewed the individual delinquency and loss trends of each transaction for changes, if any, in risk characteristics, servicing, and the ability to withstand additional credit deterioration. For mortgage pools that are continuing to show increasing delinquencies, S&P increased its cash flow stresses to account for potential increases in monthly losses. In order to maintain a rating higher than 'B', a class had to absorb losses in excess of the base-case assumptions S&P assumed in its analysis. For example, one class may have to withstand 115% of its base-case loss assumptions in order to maintain a 'BB' rating, while a different class may have to withstand 125% of S&P's base-case loss assumptions to maintain a 'BBB' rating. Each class that has an affirmed 'AAA' rating can withstand approximately 150% of its base-case loss assumptions under its analysis, subject to individual caps assumed on specific transactions. S&P determined the caps by limiting the amount of remaining defaults to 90% of the current pool balances. A combination of subordination, excess spread, and overcollateralization provide credit support for the affected transactions. The underlying collateral for these deals consists of fixed- and adjustable-rate U.S. subprime mortgage loans that are secured by first and second liens on one- to four-family residential properties. To date, including the classes listed and actions on both publicly and confidentially rated classes, S&P has resolved the CreditWatch placements of the ratings on 2,385 classes from 327 U.S. subprime RMBS transactions from the 2005, 2006, and 2007 vintages. Currently, S&P's ratings on 900 classes from 189 U.S. subprime RMBS transactions from the 2005, 2006, and 2007 vintages are on CreditWatch negative. Standard & Poor's will continue to monitor the RMBS transactions it rates and take rating actions, including CreditWatch placements, when appropriate. Rating Actions Accredited Mortgage Loan Trust 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 004375EL1 BBB AA+/Watch Neg M-3 004375EM9 B AA+/Watch Neg M-4 004375EN7 B- AA/Watch Neg M-5 004375EP2 CCC AA-/Watch Neg M-7 004375ER8 CC CCC M-8 004375ES6 CC CCC M-9 004375ET4 CC CCC Aegis Asset Backed Securities Trust Series 2005-5 Rating ------ Class CUSIP To From ----- ----- -- ---- M2 00764MHF7 A AA+/Watch Neg M-3 00764MHG5 BB AA+/Watch Neg M4 00764MHH3 B- AA/Watch Neg B2 00764MHM2 CC CCC B3 00764MHN0 CC CCC FBR Securitization Trust 2005-3 Series 2005-3 Rating ------ Class CUSIP To From ----- ----- -- ---- AV1 30246QAX1 AAA AAA/Watch Neg AV2-3 30246QBA0 AAA AAA/Watch Neg AV2-4 30246QBB8 AAA AAA/Watch Neg M-1 30246QBC6 A AA-/Watch Neg M-10 30246QBM4 D CC FBR Securitization Trust 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- AV1 30246QBQ5 AAA AAA/Watch Neg AV2-2 30246QBS1 AAA AAA/Watch Neg AV2-3 30246QBT9 AAA AAA/Watch Neg AV2-4 30246QBU6 AAA AAA/Watch Neg M-1 30246QBV4 A AA+/Watch Neg M-9 30246QCD3 D CC FBR Securitization Trust 2005-5 Series 2005-5 Rating ------ Class CUSIP To From ----- ----- -- ---- M1 30246QCP6 AA+ AA+/Watch Neg M2 30246QCQ4 AA AA+/Watch Neg M3 30246QCR2 BBB AA+/Watch Neg M4 30246QCS0 BB AA/Watch Neg M5 30246QCT8 B AA/Watch Neg M6 30246QCU5 B- AA/Watch Neg M8 30246QCW1 CC CCC Fieldstone Mortgage Investment Trust Series 2006-2 Series 2006-2 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A 31659EAA6 BBB AAA/Watch Neg 2-A1 31659EAB4 AAA AAA/Watch Neg 2-A2 31659EAC2 BBB AAA/Watch Neg 2-A3 31659EAD0 BBB AAA/Watch Neg M1 31659EAE8 B AA+/Watch Neg M2 31659EAF5 B- A/Watch Neg M3 31659EAG3 CCC BBB/Watch Neg Fieldstone Mortgage Investment Trust, Series 2006-1 Series 2006-1 Rating ------ Class CUSIP To From ----- ----- -- ---- A-2 31659TEY7 AA AAA/Watch Neg A-3 31659TEZ4 AA AAA/Watch Neg M-1 31659TFA8 BBB AA+/Watch Neg M-2 31659TFB6 B AA+/Watch Neg M-3 31659TFC4 B- BBB/Watch Neg M-4 31659TFD2 CCC BB/Watch Neg M-5 31659TFE0 CCC B/Watch Neg First NLC Trust 2005-3 Series 2005-3 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 32113JBU8 AA AA/Watch Neg M-6 32113JBZ7 CC CCC First NLC Trust 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- A-2 32113JCE3 AAA AAA/Watch Neg A-3 32113JCF0 AAA AAA/Watch Neg A-4 32113JCG8 AAA AAA/Watch Neg M-1 32113JCH6 AA AA+/Watch Neg M-2 32113JCJ2 BBB AA+/Watch Neg M-3 32113JCK9 B AA+/Watch Neg M-4 32113JCL7 B- AA+/Watch Neg M-5 32113JCM5 CCC AA/Watch Neg M-6 32113JCN3 CCC AA-/Watch Neg M-8 32113JCQ6 CC CCC GE-WMC Asset Backed Pass Through Certificates, Series 2005-2 Series 2005-2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 367910BD7 A AA/Watch Neg M-3 367910AX4 BBB AA/Watch Neg M-4 367910AY2 B AA/Watch Neg B-2 367910BC9 CC CCC B-3 367910BE5 CC CCC GSAMP Trust 2005-AHL2 Series 2005-AHL2 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 362341C64 BBB- AA/Watch Neg M-2 362341C72 B AA-/Watch Neg B-1 362341D30 CC CCC B-2 362341J59 CC CCC B-3 362341J67 CC CCC Home Equity Asset Trust 2005-8 Series 2005-8 Rating ------ Class CUSIP To From ----- ----- -- ---- P 437084QP4 AAA AAA/Watch Neg M-1 437084PZ3 AA AA+/Watch Neg M-2 437084QA7 A AA+/Watch Neg M-3 437084QB5 BB AA/Watch Neg M-4 437084QC3 B AA/Watch Neg M-7 437084QF6 CC CCC M-8 437084QG4 CC CCC Home Equity Asset Trust 2005-9 Series 2005-9 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A-1 437084QR0 AAA AAA/Watch Neg 2-A-2 437084QT6 AAA AAA/Watch Neg 2-A-3 437084QU3 AAA AAA/Watch Neg 2-A-4 437084QV1 AAA AAA/Watch Neg P 437084RM0 AAA AAA/Watch Neg M-1 437084QY5 AA AA+/Watch Neg M-2 437084QZ2 A AA+/Watch Neg M-3 437084RA6 BB AA/Watch Neg M-4 437084RB4 B AA/Watch Neg M-5 437084RC2 B- AA/Watch Neg M-8 437084RF5 CC CCC Home Equity Asset Trust 2006-5 Series 2006-5 Rating ------ Class CUSIP To From ----- ----- -- ---- 1-A-1 437096AA8 AA AAA HSI Asset Securitization Corporation Trust 2005-I1 Series 2005-I1 Rating ------ Class CUSIP To From ----- ----- -- ---- I-A 40430HCV8 BB AAA/Watch Neg II-A-2 40430HCL0 AAA AAA/Watch Neg II-A-3 40430HCM8 BBB AAA/Watch Neg II-A-4 40430HCN6 BB AAA/Watch Neg M-1 40430HCP1 B- AA+/Watch Neg M-2 40430HCQ9 CCC AA/Watch Neg M-3 40430HCR7 CCC AA-/Watch Neg Meritage Mortgage Loan Trust 2005-3 Series 2005-3 Rating ------ Class CUSIP To From ----- ----- -- ---- A-2 59001FDH1 AAA AAA/Watch Neg A-3 59001FDJ7 AAA AAA/Watch Neg A-4 59001FDK4 AAA AAA/Watch Neg A-5 59001FDL2 AAA AAA/Watch Neg M-1 59001FDM0 A AA/Watch Neg M-6 59001FDS7 CC CCC M-8 59001FDU2 D CC Morgan Stanley Home Equity Loan Trust 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 61744CVJ2 AA AA+/Watch Neg M-2 61744CVK9 A AA+/Watch Neg M-3 61744CVL7 BBB AA/Watch Neg M-4 61744CVM5 B AA-/Watch Neg B-1 61744CVQ6 CC CCC B-2 61744CVR4 CC CCC NovaStar Mortgage Funding Trust, Series 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 66987WDE4 AA AA+ M-2 66987WDF1 A AA+ M-3 66987WDG9 BBB AA M-4 66987WDH7 B AA M-5 66987WDJ3 B- AA- M-6 66987WDK0 CCC AA-/Watch Neg M-7 66987WDL8 CCC BB M-8 66987WDM6 CCC B Option One Mortgage Loan Trust 2005-5 Series 2005-05 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 68389FJZ8 A AA/Watch Neg M-3 68389FKA1 BBB AA-/Watch Neg M-10 68389FKH6 CC CCC Ownit Mortgage Loan Trust Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- A-1 69121PAT0 AAA AAA/Watch Neg A-2A2 69121PAV5 AAA AAA/Watch Neg A-2B 69121PAW3 AAA AAA/Watch Neg A-3 69121PAX1 AA AAA/Watch Neg M-1 69121PAY9 B AA+/Watch Neg M-2 69121PAZ6 B- AA/Watch Neg M-4 69121PBB8 CC CCC M-5 69121PBC6 CC CCC B-2A 69121PBJ1 D CC B-2B 69121PBN2 D CC B-3A 69121PBK8 D CC B-3B 69121PBP7 D CC B-4A 69121PBL6 D CC B-4B 69121PBQ5 D CC Popular ABS Mortgage Pass-Through Trust 2005-6 Series 2005-6 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 73316PJG6 A AA/Watch Neg Saxon Asset Securities Trust 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 805564TK7 AA AA+/Watch Neg M-3 805564TL5 A AA/Watch Neg M-4 805564TM3 BBB AA/Watch Neg M-5 805564TN1 B AA-/Watch Neg Soundview Home Loan Trust 2005-4 Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-2 83611MKF4 A AA/Watch Neg M-3 83611MKG2 BBB AA/Watch Neg M-9 83611MKN7 CC CCC M-10 83611MKP2 CC CCC Specialty Underwriting and Residential Finance Trust, Series 2005-AB3 Series 2005-AB3 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 84751PJH3 A AA+ M-2 84751PJJ9 BB AA/Watch Neg M-3 84751PJK6 B AA-/Watch Neg M-4 84751PJL4 B- BB M-5 84751PJM2 CCC B Structured Asset Investment Loan Trust 2005-10 Series 2005-10 Rating ------ Class CUSIP To From ----- ----- -- ---- A1 86358EYT7 AA AAA/Watch Neg A2 86358EYU4 AA AAA/Watch Neg A4 86358EYW0 AAA AAA/Watch Neg A-5 86358EYX8 AAA AAA/Watch Neg A6 86358EZJ8 AA AAA/Watch Neg M1 86358EYY6 BB AA+/Watch Neg M2 86358EYZ3 B AA/Watch Neg M3 86358EZA7 B- AA-/Watch Neg Structured Asset Investment Loan Trust 2005-11 Series 2005-11 Rating ------ Class CUSIP To From ----- ----- -- ---- A1 86358EZM1 BBB AAA/Watch Neg A2 86358EZN9 AAA AAA/Watch Neg A3 86358EZP4 A AAA/Watch Neg A5 86358EZR0 AAA AAA/Watch Neg A6 86358EZS8 AAA AAA/Watch Neg A7 86358EZT6 BBB AAA/Watch Neg M1 86358EZU3 B AA/Watch Neg M2 86358EZV1 CCC AA-/Watch Neg M3 86358EZW9 CC CCC M7 86358EA22 D CC Wells Fargo Home Equity Asset-Backed Securities 2005-3 Trust Series 2005-3 Rating ------ Class CUSIP To From ----- ----- -- ---- M-5 9497ENAE3 A AA/Watch Neg M-6 9497ENAF0 BB AA-/Watch Neg Wells Fargo Home Equity Asset-Backed Securities 2005-4 Trust Series 2005-4 Rating ------ Class CUSIP To From ----- ----- -- ---- M-1 9497EMAG0 AA AA+ M-2 9497EMAH8 A AA/Watch Neg M-3 9497EMAJ4 BB AA-/Watch Neg M-8 9497EMAP0 CC CCC Ratings Affirmed Accredited Mortgage Loan Trust 2005-4 Series 2005-4 Class CUSIP Rating ----- ----- ------ A-1A 004375EE7 AAA A-2B 004375EG2 AAA A-2C 004375EH0 AAA A-2D 004375EJ6 AAA M-1 004375EK3 AA+ M-6 004375EQ0 CCC Aegis Asset Backed Securities Trust Series 2005-5 Class CUSIP Rating ----- ----- ------ IA2 00764MHA8 AAA IA3 00764MHB6 AAA IA4 00764MHC4 AAA IIA 00764MHD2 AAA M1 00764MHE0 AAA M5 00764MHJ9 CCC M6 00764MHK6 CCC B1 00764MHL4 CCC FBR Securitization Trust 2005-3 Series 2005-3 Class CUSIP Rating ----- ----- ------ M-2 30246QBD4 CCC M-3 30246QBE2 CCC M-4 30246QBF9 CCC M-5 30246QBG7 CCC FBR Securitization Trust 2005-4 Series 2005-4 Class CUSIP Rating ----- ----- ------ M-2 30246QBW2 CCC M-3 30246QBX0 CCC M-4 30246QBY8 CCC M-5 30246QBZ5 CCC M-6 30246QCA9 CCC FBR Securitization Trust 2005-5 Series 2005-5 Class CUSIP Rating ----- ----- ------ AV1 30246QDB6 AAA AV2-3 30246QCM3 AAA AV2-4 30246QCN1 AAA M7 30246QCV3 CCC Fieldstone Mortgage Investment Trust Series 2006-2 Series 2006-2 Class CUSIP Rating ----- ----- ------ M4 31659EAH1 CCC M5 31659EAJ7 CCC M6 31659EAK4 CCC M7 31659EAL2 CCC M8 31659EAM0 CCC M9 31659EAN8 CCC M10 31659EAP3 CCC Fieldstone Mortgage Investment Trust, Series 2006-1 Series 2006-1 Class CUSIP Rating ----- ----- ------ M-6 31659TFF7 CCC M-7 31659TFG5 CCC M-8 31659TFH3 CCC M-9 31659TFJ9 CCC M-10 31659TFK6 CCC First NLC Trust 2005-3 Series 2005-3 Class CUSIP Rating ----- ----- ------ AV-2 32113JBR5 AAA AV-3 32113JBS3 AAA AV-4 32113JBT1 AAA M-2 32113JBV6 CCC M-3 32113JBW4 CCC M-4 32113JBX2 CCC M-5 32113JBY0 CCC First NLC Trust 2005-4 Series 2005-4 Class CUSIP Rating ----- ----- ------ M-7 32113JCP8 CCC GE-WMC Asset Backed Pass Through Certificates, Series 2005-2 Series 2005-2 Class CUSIP Rating ----- ----- ------ A-1 367910AR7 AAA A-2b 367910AT3 AAA A-2c 367910AU0 AAA A-2d 367910AV8 AAA M-1 367910AW6 AA+ M-5 367910AZ9 CCC M-6 367910BA3 CCC B-1 367910BB1 CCC GSAMP Trust 2005-AHL2 Series 2005-AHL2 Class CUSIP Rating ----- ----- ------ A-1A 362341B81 AAA A-1B 362341B99 AAA A-2B 362341C31 AAA A-2C 362341C49 AAA A-2D 362341C56 AAA M-3 362341C80 CCC M-4 362341C98 CCC M-5 362341D22 CCC Home Equity Asset Trust 2005-8 Series 2005-8 Class CUSIP Rating ----- ----- ------ 1-A-1 437084PS9 AAA 2-A-3 437084PV2 AAA 2-A-4 437084PW0 AAA M-5 437084QD1 CCC M-6 437084QE9 CCC Home Equity Asset Trust 2005-9 Series 2005-9 Class CUSIP Rating ----- ----- ------ M-6 437084RD0 CCC M-7 437084RE8 CCC Home Equity Asset Trust 2006-5 Series 2006-5 Class CUSIP Rating ----- ----- ------ 2-A-1 437096AB6 AAA 2-A-2 437096AC4 AAA 2-A-3 437096AD2 AA 2-A-4 437096AE0 A P 437096AU4 AAA M-1 437096AH3 BB M-2 437096AJ9 B M-3 437096AK6 B- M-4 437096AL4 CCC M-5 437096AM2 CCC M-6 437096AN0 CCC Meritage Mortgage Loan Trust 2005-3 Series 2005-3 Class CUSIP Rating ----- ----- ------ M-2 59001FDN8 CCC M-3 59001FDP3 CCC M-4 59001FDQ1 CCC M-5 59001FDR9 CCC Morgan Stanley Home Equity Loan Trust 2005-4 Series 2005-4 Class CUSIP Rating ----- ----- ------ A-1 61744CVE3 AAA A-2b 61744CVG8 AAA A-2c 61744CVH6 AAA M-5 61744CVN3 CCC M-6 61744CVP8 CCC NovaStar Mortgage Funding Trust, Series 2005-4 Series 2005-4 Class CUSIP Rating ----- ----- ------ A-1A 66987WDQ7 AAA A-2C 66987WDC8 AAA A-2D 66987WDD6 AAA M-9 66987WDN4 CCC M-10 66987WDP9 CCC M-11 66987WDR5 CCC Option One Mortgage Loan Trust 2005-5 Series 2005-05 Class CUSIP Rating ----- ----- ------ A-1 68389FKK9 AAA A-3 68389FJW5 AAA A-4 68389FJX3 AAA M-1 68389FJY1 AA+ M-4 68389FKB9 B M-5 68389FKC7 CCC M-6 68389FKD5 CCC M-7 68389FKE3 CCC M-8 68389FKF0 CCC M-9 68389FKG8 CCC Ownit Mortgage Loan Trust Series 2005-4 Class CUSIP Rating ----- ----- ------ M-3 69121PBA0 CCC Popular ABS Mortgage Pass-Through Trust 2005-6 Series 2005-6 Class CUSIP Rating ----- ----- ------ A-2 73316PJC5 AAA A-3 73316PJD3 AAA A-4 73316PJE1 AAA A-5 73316PJF8 AAA A-6 73316PJR2 AAA M-2 73316PJH4 CCC M-3 73316PJJ0 CCC M-4 73316PJK7 CCC M-5 73316PJL5 CCC M-6 73316PJM3 CCC Saxon Asset Securities Trust 2005-4 Series 2005-4 Class CUSIP Rating ----- ----- ------ A-1A 805564TC5 AAA A-1B 805564TD3 AAA A-2C 805564TG6 AAA A-2D 805564TH4 AAA M-1 805564TJ0 AA+ M-6 805564TP6 CCC B-1 805564TQ4 CCC B-2 805564TR2 CCC B-3 805564TS0 CCC Soundview Home Loan Trust 2005-4 Series 2005-4 Class CUSIP Rating ----- ----- ------ I-A1 83611MJY5 AAA II-A3 83611MKB3 AAA M-1A 83611MKD9 AA+ M-1B 83611MKE7 AA+ M-4 83611MKH0 B M-5 83611MKJ6 CCC M-6 83611MKK3 CCC M-7 83611MKL1 CCC M-8 83611MKM9 CCC II-A4 83611MKC1 AAA Specialty Underwriting and Residential Finance Trust, Series 2005-AB3 Series 2005-AB3 Class CUSIP Rating ----- ----- ------ A-1A 84751PJD2 AAA A-2B 84751PJF7 AAA A-2C 84751PJG5 AAA M-6 84751PJN0 CCC B-1 84751PJP5 CCC Structured Asset Investment Loan Trust 2005-10 Series 2005-10 Class CUSIP Rating ----- ----- ------ M4 86358EZB5 CCC M5 86358EZC3 CCC Wells Fargo Home Equity Asset-Backed Securities 2005-3 Trust Series 2005-3 Class CUSIP Rating ----- ----- ------ AI-1A 9497ENAM5 AAA AI-1B 9497ENAN3 AAA AII-2 9497ENAQ6 AAA AII-3 9497ENAR4 AAA M-1 9497ENAA1 AAA M-2 9497ENAB9 AA+ M-3 9497ENAC7 AA+ M-4 9497ENAD5 AA M-7 9497ENAG8 CCC M-8 9497ENAH6 CCC M-9 9497ENAJ2 CCC M-10 9497ENAK9 CCC M-11 9497ENAL7 CCC Wells Fargo Home Equity Asset-Backed Securities 2005-4 Trust Series 2005-4 Class CUSIP Rating ----- ----- ------ AI-2 9497EMAB1 AAA AI-3 9497EMAC9 AAA AII-2 9497EMAE5 AAA AII-3 9497EMAF2 AAA M-4 9497EMAK1 CCC M-5 9497EMAL9 CCC M-6 9497EMAM7 CCC M-7 9497EMAN5 CCC * S&P Puts 18 LBHI-Related US RMBS Transaction Under Neg. Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on 18 classes from eight Lehman Bros.-related U.S. residential mortgage-backed securities transactions on CreditWatch with negative implications. The CreditWatch placements follow the recent rating actions on various Lehman Bros. entities, as detailed in "Lehman Bros. Holdings Downgraded To "Selective Default"; Other Lehman Entities To 'BB-' or 'R'," published Sept. 15, 2008, "Lehman Brothers Holdings Inc. Rating Lowered To 'D'," published Sept. 16, 2008," and "Ratings On Lehman Brothers Holdings Inc. And All Related Entities Withdrawn," dated Sept. 25, 2008. Lehman Bros. Holdings Inc. (LBHI; NR/--/NR) is the guarantor of Lehman Bros. Special Financing (LBSF; not rated), which acts as the derivative counterparty for the affected transactions. The CreditWatch placements reflect Standard & Poor's belief that these classes are at a greater cash flow risk because of LBHI's recent bankruptcy filing. Specifically, in S&P's opinion, it incorporated the likelihood of the counterparty making payments to the trusts over the duration of the contract for the affected transactions. In S&P's view, given the uncertainty of events that surrounds LBHI and its ability to meet its obligations under the derivative documents for the affected deals, the ratings on the affected U.S. RMBS transactions will remain on CreditWatch until S&P further assess the impact the applicable derivative payments will have on the deals and take rating actions as appropriate. Standard & Poor's considered the recent rating actions on LBHI when analyzing all Lehman-related U.S. RMBS transactions. In most cases, LBHI is the guarantor for the derivative counterparty, LBSF. However, for those transactions, which were not affected by the recent rating change of LBHI, the derivatives guaranteed by LBHI fell under one or more of the following categories: -- The derivative is used to specifically cover basis risk shortfalls; -- The relationship between the strike rate and the forward curve used in S&P's projections generally placed the trust in a position of making payments to the counterparty for the duration of the contract; and -- The expiration of the derivative was within several months. Therefore, the applicable cash flows from derivatives affected only the Lehman Bros.-related U.S. RMBS ratings. Ratings Placed on Creditwatch Negative Greenpoint Mortgage Funding Grantor Trust 1-A1A Series 2006-AR6 Rating ------ Class To From ----- -- ---- 1-A1A AAA/Watch Neg AAA Greenpoint Mortgage Funding Grantor Trust 1-A2A2 Series 2006-AR6 Rating ------ Class To From ----- -- ---- 1-A2A2 AAA/Watch Neg AAA Greenpoint Mortgage Funding Grantor Trust 1-A2B Series 2006-AR6 Rating ------ Class To From ----- -- ---- 1-A2B AAA/Watch Neg AAA Greenpoint Mortgage Funding Grantor Trust 1-A3B Series 2006-AR6 Rating ------ Class To From ----- -- ---- 1-A3B AAA/Watch Neg AAA RALI Grantor Trust I-A Series 2006-QO9 Rating ------ Class To From ----- -- ---- I-A1B, I-A2A, I-A3A, I-A3B, I-A4A AAA/Watch Neg AAA RALI Series 2006-QO9 Trust Rating ------ Class To From ----- -- ---- I-A1A, I-A2AU, I-A3AU, I-A4AU AAA/Watch Neg AAA AXP AAA/Watch Neg AAA Thornburg Mortgage Securities Trust 2003-6 Rating ------ Class To From ----- -- ---- A1, A-2 AAA/Watch Neg AAA M AA/Watch Neg AA SASCO ARC Co. Series 2005-1 Rating ------ Class To From B B-/Watch Neg B- * Bruce de'Medici Joins SmithAmundsen LLC as Partner ------------------------------------------------------ SmithAmundsen LLC disclosed in a statement that Bruce E. de'Medici has joined the firm's Chicago office as a partner in its Bankruptcy & Creditors' Rights Practice Group. Prior to joining SmithAmundsen, Mr. de'Medici was of counsel at Mendell Menkes & Surdyk, LLC in Chicago. Mr. de'Medici has more than 20 years experience representing clients in commercial transactions in state and federal courts, including the bankruptcy court, as well as in non-judicial insolvency settings. "We are excited to have Bruce join our growing practice," said Brian Graham, chair of SmithAmundsen's Bankruptcy & Creditors' Rights Practice Group. "His experience substantially broadens the array and depth of services available to our clients." Mr. de'Medici received a B.A. from University of Michigan and a J.D. from Wayne State University and he is admitted to practice in Illinois and Michigan. About SmithAmundsen LLC Headquartered in Chicago, Illinois, SmithAmundsen LLC -- http://www.salawus.com/-- has grown to more than 115 attorneys with offices in Chicago, Rockford, St. Charles, Waukegan, and Woodstock, Illinois and Milwaukee, Wisconsin. SmithAmundsen's attorneys offer expertise in a broad range of practice areas. As one of Chicago's premier litigation firms, SmithAmundsen's success is built upon a foundation of integrity, professionalism, and a commitment to exceeding client expectations. * 15 Corporate and Technology Partners Join Cooley Godward ---------------------------------------------------------- Cooley Godward Kronish LLP disclosed that 15 partners from Heller Ehrman will join the firm. Ten partners will join Cooley in Silicon Valley, four in Seattle, where Cooley will open an office, and one in Washington, DC. In addition to comprising the core of Heller's Venture Law Group in these offices, the partners joining Cooley include the heads of Heller's firm-wide business and intellectual property transactions practices, the co-heads of its energy and clean technology practice, the co-chair of its life sciences practice and two VLG co-founders. "It is a testament to Cooley's momentum and our platform as the national leader in venture capital, technology, life sciences and clean technology that these talented practitioners have chosen to join the firm," Joe Conroy, Cooley's chief executive officer, said. "It is rare that a group of such experienced and highly respected corporate and IP transactions partners, many of whom we have known for years, would suddenly become available. We are delighted to have them join us and are highly confident that they will be a great fit strategically and culturally." Partners joining Cooley in Palo Alto include corporate partner Mark Weeks, previously the head of Heller's firm-wide business department, Mark Medearis, a co-founder of VLG, corporate partner Elias Blawie, a co-founder of VLG and co-chair of Heller's energy and clean technologies practice, corporate partner Jon Gavenman, head of Heller's Silicon Valley office, corporate partner John Sellers, compensation and benefits partner Renee Deming, tax partner Mark Windfeld-Hansen and corporate partners Keith Miller, Amy Paye and Mavis Yee. For more than two decades, these attorneys have advised leading technology, life sciences and clean technology companies, venture capital firms and investment banks in Silicon Valley and across the country in financings, mergers, public offerings, collaboration and licensing agreements and other transactions. During this period they have counseled many notable venture-backed companies such as Hotmail, IronPort Systems and OnStream Networks, and more recently, companies such as Atom Entertainment, Inc., Macrovision Solutions, Seattle Genetics, Inc., SonoSite, Inc., LookSmart, Phoenix Technologies, Ltd., Airespace and Xunlight Corporation. "Cooley's emerging company leadership and current team of 41 business partners in Silicon Valley will be broadly enhanced by the addition of our 10 new partners," Eric Jensen, partner and head of Cooley's firm-wide business department, said. "Together with our new Seattle partners, the group further strengthens our preeminent national life sciences practice and adds significant industry expertise in areas such as semiconductors, software and the rapidly growing clean technology sector." The firm's new Seattle office will be led by corporate partner John Robertson, recently chair of the business department for Heller's Northwest offices. He is joined by corporate partners Sonya Erickson, co-chair of Heller's national life sciences practice; and IP transactions partners Alison Freeman-Gleason, co-chair of Heller's energy and clean technologies practice, and Kevin Kelly, chair of Heller's intellectual property transactions group. The group has significant Pacific Rim and Pacific Northwest-based life sciences, clean technology and technology practices, representing emerging growth companies, established technology businesses and venture capital firms. In Cooley's Washington, DC office, the firm will bring on board Natasha Leskovsek, an experienced FDA practitioner, adding FDA expertise to the Firm's preeminent life sciences practice. The addition of these highly sought-after partners enhances Cooley's position as the preeminent law firm for entrepreneurs, companies and investors in the technology, life sciences and clean technology sectors. About Cooley Godward Kronish LLP Cooley Godward Kronish -- http://www.cooley.com/-- has 725 attorneys nationwide and offers corporate transactional capabilities, expertise in tax, real estate and bankruptcy and litigation practice, representing an array of clients in complex commercial and securities litigation, antitrust and intellectual property matters. The firm has full-service offices in major business and technology centers nationwide: Palo Alto, California, New York City, San Diego, California, San Francisco, California, Reston, Virginia, Broomfield, Colorado, Washington, DC, Boston, Massachusetts, and Seattle, Washington. * Computershare Integrates Communications Center for Administar --------------------------------------------------------------- Computershare Limited has completed the integration of the communications (call) center for its Administar business with its core U.S. communications centers. Administar Services Group LLC, a Computershare company, provides complementary class action and bankruptcy administration solutions. The integration marks a notable expansion to Administar's communications center service capabilities -- providing the business with the flexibility, size and scope to support any segment of the class action and bankruptcy administration market. Computershare's North America Communications Centers Regional Director Paul Santamaria said, "Administar's clients are now supported by 1,600 communications center seats in the US. In addition to the increased in-house servicing capabilities, Administar's clients will have the peace of mind associated with our local expertise in every region." Computershare's communications center representatives, as well as its client data and processing centers, are based and managed in the U.S. for its local clients. This in-sourcing philosophy provides for greater data security and enhanced oversight of all operations. In addition, unlike other providers, Computershare has the scale and skills in-house to effectively manage international requirements through its other global facilities, as needed. "For Computershare's clients, the acquisition and integration of Administar into the core business further extends our service portfolio provided under one roof. Should any company find themselves in a class action or bankruptcy situation, they can trust us to effectively manage sensitive information and data as a neutral third party and with the service excellence they have come to know," said Computershare's Executive Vice President Joseph McFadden. About Administar Administar Administar Services Group LLC is an experienced, versatile provider of solutions for companies, their attorneys and law firms involved in Chapter 11 bankruptcy or class action litigation proceedings. Administar leverages parent company Computershare's immense capabilities and expanded global reach. Administar's engagements are staffed by teams of legal, financial and technology professionals with extensive hands-on experience in bankruptcy and class action administration. About Computershare Computershare (ASX:CPU) -- http://www.computershare.com-- is a global leader in share registration, employee equity plans, proxy solicitation and other specialized financial, governance, and communication services. Many of the world's largest companies use the company's innovative services to maximize the value of their relationships with investors, employees, customers and members. Computershare has over 10,000 employees across the world and serves 14,000 corporations and 100 million shareholder and employee accounts in 17 countries across five continents. * Garden City Gets Jeffrey R. Miller for Reorganization Division ---------------------------------------------------------------- Jeffrey R. Miller has joined The Garden City Group, Inc.'s business reorganization development team as a senior consultant. Mr. Miller has a wide range of experience in managing multiple bankruptcy case administrations nationwide. Before joining GCG, Mr. Miller was a senior manager at BMC Group. His responsibilities included working directly with company executives on their needs during a Chapter 11 case, as well as oversight of the consulting team and technology necessary for all aspects of case administration, including noticing, schedule and sofa preparation, claims reconciliation, solicitation and tabulation, distribution and post-effective date work. Matters in which he was involved include W.R. Grace, USA Capital Mortgage, American Commercial Lines and Wickes Inc., among others. Additionally, Mr. Miller has managed virtual data rooms to support creditor committees, 363 sales and exit financing. Mr. Miller received his MBA from Pepperdine University, and he received his Bachelor of Science degree from the University of Southern California. He is a member of the American Bankruptcy Institute (ABI) and the Turnaround Management Association (TMA). "I am proud to be part of the GCG team and look forward to contributing to the growth of our Business Reorganization Division as we continue to expand our presence in the Midwest," said Miller. GCG Executive Vice President and General Counsel, Karen Shaer commented, "Adding Jeff to our business reorganization team is another example of GCG's strong commitment to provide premier services nationwide to meet our clients' needs." The Garden City Group, Inc. -- http://www.gardencitygroup.com-- a subsidiary of Crawford & Company, administers class action settlements, designs legal notice programs, manages Chapter 11 administrations, and provides expert consultation services. Based in Atlanta, Georgia, Crawford & Company -- http://www.crawfordandcompany.com-- is the world's largest independent provider of claims management and related solutions to the risk management and insurance industry as well as self-insured entities, with a global network of more than 700 locations in 63 countries. Major service lines include property and casualty claims management; warranty inspections; integrated claims and medical management for workers' compensation; legal settlement administration, including class action and bankruptcy claims administration; and risk management information services. The Company's shares are traded on the NYSE under the symbols CRDA and CRDB. * Daniel Wiggins Joins MorrisAnderson as Consulting Manager ----------------------------------------------------------- Daniel Wiggins has joined MorrisAnderson & Associates, Ltd.'s St. Louis office as a consulting manager. Larry Hennessy, MorrisAnderson principal, CFO, and head of the St. Louis office, said, "I am very excited that Daniel has agreed to come on board to help market our services to clients in St. Louis, Kansas City and the surrounding areas. Daniel has worked with MorrisAnderson for several years and we are excited that he will now be working out of our St. Louis office. Daniel, with his extensive executive-level experience in domestic and international companies, will be a great asset to us." Throughout his career, Mr. Wiggins' primary responsibilities have involved cash flow management, financing, strategy, business development and information systems implementations, and he has led business transaction processes. As a consultant with MorrisAnderson, Mr. Wiggins uses a pragmatic approach to forge stakeholder relationships that optimize business continuity. He has advised companies, equity investors and banks on financing, performance enhancement, executive mentoring, recapitalization transactions, divestitures and acquisitions, and insolvency proceedings and out-of-court restructuring. Mr. Wiggins has worked with private equity groups to advise established and startup companies on their business planning and placement of equity and debt positions. Most recently, Mr. Wiggins engineered an international manufacturing company's restructuring that successfully concluded with an equity sale. He also evaluated and advised the restructuring of the debt and equity position of a private equity firm's investment in a technology company, organized the financial forecast for a medical device manufacturer, was sell-side adviser for a building materials manufacturer and distributor, and was buy-side adviser for an international manufacturer's transaction in North America. He advised an automotive parts supplier's Chapter 11 bankruptcy and its ensuing 363 sale, and has evaluated and monitored the collateral for a bank's distressed clients. He also provides ongoing performance and compliance advice for various companies. Mr. Wiggins holds an MBA and a Bachelor of Science degree from the University of Southern Mississippi. He is a member of the Turnaround Management Association and a Certified Treasury Professional alumnus. More about MorrisAnderson Chicago-based MorrisAnderson has offices in New York, Atlanta, Milwaukee, Los Angeles, Cleveland and St. Louis. The firm's service offerings include performance improvement, financial advisory, investment banking, interim management, lender services, turnarounds, workouts, litigation support, valuation, information technology services, and insolvency services and wind-downs. MorrisAnderson emphasizes hands-on involvement for companies with $20 million to $200 million in annual sales. * Former U.S. Trustee Joins Traxi as Senior Managing Director ------------------------------------------------------------- Former United States Trustee Kelly Beaudin Stapleton has joined Traxi, LLC, as a Senior Managing Director in the firm's Corporate Restructuring and Advisory Group. Ms. Stapleton will be responsible for providing financial and business advice to the firm's clients, building on Traxi's successful track record. She will also lead Traxi's office in the Wilmington, Philadelphia, corridor. Traxi Senior Managing Director Perry M. Mandarino said, "Kelly brings invaluable insight into the bankruptcy and restructuring process and the critical issues facing distressed companies, creditors and lenders in a range of industries. She will play a key role in the growth of our Corporate Restructuring and Advisory Group. Our success stems from the senior-level attention that we provide our clients and Kelly's experience adds a new dimension to our skill set." As U.S. Trustee for Region 3, Ms. Stapleton was responsible for the management of five federal agency offices and oversight of all bankruptcies filed in Pennsylvania, New Jersey and Delaware. She supervised all of the Chapter 7 and 13 trustees, as well as Justice Department staff, managing all aspects of the bankruptcy process including first day motions, formation of creditors' committees, review of professional retentions and fees, and appellate review. Additionally, she was responsible for the engagement of outside professionals in the appointments of trustees and examiners in Chapter 11 cases. Ms. Stapleton was appointed the Trustee by Attorney General John Ashcroft in 2005 and during her tenure oversaw significant restructurings in the areas of: -- asbestos, -- consumer protection, -- corporate fraud, -- disclosure and professional fees, -- employee retention and bonus plans, -- subprime lending, -- retail, -- restaurant chains, and -- airlines. Ms. Stapleton oversaw some of the largest cases ever filed in Region 3, including W.R. Grace & Co., Armstrong World Industries, Congoleum Corporation, Owens Corning, New Century Financial, Dura Automotive Systems, Nellson Neutraceutical, American Business Financial Services, e-Toys, Sharper Image Corporation, Lillian Vernon, Buffets and Independence Air. Ms. Stapleton said, "Traxi's client base and deep experience in advising companies and creditors in distressed situations provides me with a national platform to help companies and executives navigate the challenging landscape of corporate restructuring." The addition of Ms. Stapleton follows the recent hire of several professionals to the firm's New York office including Rich Mgrdechian as a Managing Director; Peter Hoberman as a Director; Kelly Sickles as a Vice President and Rich Saltzman and Patricia Chernego as Associates. Traxi's founding partner, Anthony Pacchia, said, "The addition of these talented professionals to our team broadens the depth and breadth of our capabilities and areas of expertise and will help us serve an expanding national client roster." About Traxi New York City-based Traxi, LLC, -- http://www.traxi.com-- is a premier special situation advisory firm and provider of value-enhancing business solutions to companies, financial institutions, creditors' committees, investors and government agencies. Areas of expertise include: Corporate Restructuring and Advisory; Corporate Finance; Asset Recovery and Portfolio Management; Dispute & Forensic Analysis and Fiduciary Positions. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Oct. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Luncheon - Chapter 11 University Club, Jacksonville, Florida Contact: http://www.turnaround.org/ Oct. 13, 2008 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference Standard Club, Chicago, Illinois Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 14, 2008 TURNAROUND MANAGEMENT ASSOCIATION Annual Charity Golf Event Forest Park Golf Course, St. Louis, Missouri Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Billiards Networking Night Herbert's Billiards, Secaucus, New Jersey Contact: 908-575-7333 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Member Social Davenport Press, Mineola, New York Contact: 631-251-6296 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION Breakfast Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION View from the Bench - Bankruptcy Update Summit Club, Birmingham, Alabama Contact: www.turnaround.org Oct. 16, 2008 TURNAROUND MANAGEMENT ASSOCIATION How to Contract with a Turnaround Manager University Club, Portland, Oregon Contact: www.turnaround.org Oct. 22, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Nevada Award Night McCormick & Schmick's, Las Vegas, Nevada Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Election Oriented TBD, Phoenix, Arizona Contact: www.turnaround.org Oct. 23, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds: A Panel of Professionals TBA, Rochester, New York Contact: www.turnaround.org Oct. 23-24, 2008 AMERICAN CONFERENCE INSTITUTE Distressed Assets Boot Camp TBD, London, United Kingdom Contact: www.americanconference.com Oct. 28, 2008 TURNAROUND MANAGEMENT ASSOCIATION State of the Capital Markets Citrus Club, Orlando, Florida Contact: www.turnaround.org/ Oct. 28-31, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott New Orleans, Louisiana Contact: 312-578-6900; http://www.turnaround.org/ Oct. 29-30, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Corporate Governance Meetings Marriott, New Orleans, Louisiana Contact: www.turnaround.org Oct. 30 & 31, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Physicians Agreements and Ventures Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Oct. 31, 2008 AMERICAN BANKRUPTCY INSTITUTE International Insolvency Symposium Hilton, Frankfurt, Germany Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 6, 2008 TURNAROUND MANAGEMENT ASSOCIATION Networking Breakfast Coach House Diner & Restaurant, Hackensack, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 11, 2008 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference Marriott, Troy, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Turnaround Case Study Summit Club, Birmingham, Alabama Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Effective Turnarounds:A View From Workout Consultants TBA, Buffalo, New York Contact: www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION LI-TMA Social TBD, Melville, New York Contact: 631-251-6296 or www.turnaround.org Nov. 13, 2008 TURNAROUND MANAGEMENT ASSOCIATION Dinner Meeting TBD, Calgary, Alberta Contact: 503-768-4299 or www.turnaround.org Nov. 17-18, 2008 BEARD GROUP & RENAISSANCE AMERICAN CONFERENCES Distressed Investing Contact: 800-726-2524; 903-595-3800; www.renaissanceamerican.com Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Special Program Tournament Players Club at Jasna Polana, New Jersey Contact: 908-575-7333 or www.turnaround.org Nov. 19, 2008 TURNAROUND MANAGEMENT ASSOCIATION Interaction Between Professionals in a Restructuring/Bankruptcy Bankers Club, Miami, Florida Contact: 312-578-6900; http://www.turnaround.org/ Nov. 20, 2008 TURNAROUND MANAGEMENT ASSOCIATION Senior Housing & Long Term Care Washington Athletic Club,Seattle, Washington Contact: www.turnaround.org Nov. 27, 2008 TURNAROUND MANAGEMENT ASSOCIATION TMA Arizona Chapter Meeting - Chris Kaup TBD, Phoenix, Arizona Contact: www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Party McCormick & Schmick's, Las Vegas, Nevada Contact: 702-952-2480 or www.turnaround.org Dec. 3, 2008 TURNAROUND MANAGEMENT ASSOCIATION Christmas Function Terminal City Club, Vancouver, British Columbia Contact: 503-768-4299 or www.turnaround.org Dec. 3-5, 2008 AMERICAN BANKRUPTCY INSTITUTE 20th Annual Winter Leadership Conference Westin La Paloma Resort & Spa Tucson, Arizona Contact: http://www.abiworld.org/ Dec. 8, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday Gathering TBD, Long Island, New York Contact: 631-251-6296 or www.turnaround.org Dec. 9, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer Washington Athletic Club, Seattle, Washington Contact: 503-768-4299 or www.turnaround.org Dec. 11, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer University Club, Portland, Oregon Contact: 503-768-4299 or www.turnaround.org Dec. 18, 2008 TURNAROUND MANAGEMENT ASSOCIATION Holiday MIxer TBD, Phoenix, Arizona Contact: 623-581-3597 or www.turnaround.org Dec. 31, 2008 TURNAROUND MANAGEMENT ASSOCIATION Sponsorships - Annual Golf Outing, Various Events TBA, New Jersey Contact: 908-575-7333 or www.turnaround.org Jan. 21-22, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 TURNAROUND MANAGEMENT ASSOCIATION Distressed Investing Conference Bellagio, Las Vegas, Nevada Contact: www.turnaround.org Jan. 22-23, 2009 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, Colorado Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 5-7, 2009 AMERICAN BANKRUPTCY INSTITUTE Caribbean Insolvency Symposium Westin Casurina, Grand Cayman Island, AL Contact: 1-703-739-0800; http://www.abiworld.org/ Feb. 25-27, 2009 AMERICAN BANKRUPTCY INSTITUTE Valcon Four Seasons, Las Vegas, Nevada Contact: 1-703-739-0800; http://www.abiworld.org/ Mar. 13, 2009 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West Beverly Wilshire, Beverly Hills, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 17-18, 2009 NATIONAL ASSOCIATION OFBANKRUPTCY TRUSTEES NABT Spring Seminar The Peabody, Orlando, Florida Contact: http://www.nabt.com/ Apr. 20, 2009 AMERICAN BANKRUPTCY INSTITUTE Consumer Bankruptcy Conference John Adams Courthouse, Boston, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 27-28, 2009 TURNAROUND MANAGEMENT ASSOCIATION Corporate Governance Meetings Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org Apr. 28-30, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference Intercontinental Hotel, Chicago, Illinois Contact: www.turnaround.org May 7-10, 2009 AMERICAN BANKRUPTCY INSTITUTE 27th Annual Spring Meeting Gaylord National Resort & Convention Center National Harbor, Maryland Contact: http://www.abiworld.org/ May 14-16, 2009 ALI-ABA Chapter 11 Business Reorganizations Langham Hotel, Boston, Massachusetts Contact: http://www.ali-aba.org June 11-13, 2009 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa Traverse City, Michigan Contact: http://www.abiworld.org/ June 21-24, 2009 INTERNATIONAL ASSOCIATION OF RESTRUCTURING, INSOLVENCY & BANKRUPTCY PROFESSIONALS 8th International World Congress TBA Contact: http://www.insol.org/ July 16-19, 2009 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Mt. Washington Inn Bretton Woods, New Hampshire Contact: http://www.abiworld.org/ Sept. 10-12, 2009 AMERICAN BANKRUPTCY INSTITUTE 17th Annual Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nevada Contact: http://www.abiworld.org/ Oct. 5-9, 2009 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Desert Ridge, Phoenix, Arizona Contact: 312-578-6900; http://www.turnaround.org/ Dec. 3-5, 2009 AMERICAN BANKRUPTCY INSTITUTE 21st Annual Winter Leadership Conference La Quinta Resort & Spa, La Quinta, California Contact: 1-703-739-0800; http://www.abiworld.org/ Apr. 15-18, 2010 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ June 17-20, 2010 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort and Spa, Traverse City, Michigan Contact: 1-703-739-0800; http://www.abiworld.org/ July 7-10, 2010 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Ocean Edge Resort, Brewster, Massachusetts Contact: 1-703-739-0800; http://www.abiworld.org/ Aug. 5-7, 2010 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hyatt Regency Chesapeake Bay, Cambridge, Maryland Contact: 1-703-739-0800; http://www.abiworld.org/ Oct. 4-8, 2010 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention JW Marriott Grande Lakes, Orlando, Florida Contact: http://www.turnaround.org/ Dec. 2-4, 2010 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Camelback Inn, Scottsdale, Arizona Contact: 1-703-739-0800; http://www.abiworld.org/ BEARD AUDIO CONFERENCES 2006 BACPA Library Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES BAPCPA One Year On: Lessons Learned and Outlook Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Calpine's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Carve-Out Agreements for Unsecured Creditors Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changes to Cross-Border Insolvencies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Changing Roles & Responsibilities of Creditors' Committees Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Chinas New Enterprise Bankruptcy Law Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Clash of the Titans -- Bankruptcy vs. IP Rights Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Coming Changes in Small Business Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Corporate Bankruptcy Bootcamp: A Nuts & Bolts Primer for Navigating the Restructuring Process Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Dana's Chapter 11 Filing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Deepening Insolvency Widening Controversy: Current Risks, Latest Decisions Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Diagnosing Problems in Troubled Companies Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Claims Trading Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Market Opportunities Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Distressed Real Estate under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Employee Benefits and Executive Compensation under the New Code Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Equitable Subordination and Recharacterization Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Examining the Examiners: Pros and Cons of Using Examiners in Chapter 11 Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Fundamentals of Corporate Bankruptcy and Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Handling Complex Chapter 11 Restructuring Issues Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Healthcare Bankruptcy Reforms Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES High-Yield Opportunities in Distressed Investing Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Homestead Exemptions under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Hospitals in Crisis: The Insolvency Crisis Plaguing Hospitals Across the U.S. Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES IP Rights In Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES KERPs and Bonuses under BAPCPA Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES New 'Red Flag' Identity Theft Rules Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Non-Traditional Lenders and the Impact of Loan-to-Own Strategies on the Restructuring Process Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Partnerships in Bankruptcy: Unwinding The Deal Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Privacy Rights, Protections & Pitfalls in Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Real Estate Bankruptcy Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Reverse Mergersthe New IPO? Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Second Lien Financings and Intercreditor Agreements Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Surviving the Digital Deluge: Best Practices in E-Discovery and Records Management for Bankruptcy Practitioners and Litigators Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Technology as a Competitive Advantage For Todays Legal Processes Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Battle of Green & Red: Effect of Bankruptcy on Obligations to Clean Up Contaminated Property Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES The Subprime Sector Meltdown: Legal Developments and Latest Opportunities Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Twenty-Day Claims Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite Corporate Restructuring Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com BEARD AUDIO CONFERENCES Using Virtual Data Rooms to Expedite M&A and Insolvency Proceedings Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES Validating Distressed Security Portfolios: Year-End Price Validation and Risk Assessment Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ BEARD AUDIO CONFERENCES When Tenants File -- A Landlord's BAPCPA Survival Guide Audio Conference Recording Contact: 240-629-3300; http://www.beardaudioconferences.com/ * * * Featured Conferences Renaissance American Management and Beard Conferences presents Oct. 30-31, 2008 Physician Agreements & Ventures The Millennium Knickerbocker Hotel - Chicago Brochure will be available soon! Nov. 17-18, 2008 Distressed Investing The Helmsley Park Lane - New York Brochure will be available soon! * * * Beard Audio Conferences presents Bankruptcy and Restructuring Audio Conference CDs More information and list of available titles at: http://beardaudioconferences.com/bin/topics?category_id=BAR * * * The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Julybien D. Atadero, Sheryl Joy P. Olano, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, 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 ***