/raid1/www/Hosts/bankrupt/TCR_Public/081016.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 16, 2008, Vol. 12, No. 247
Headlines
AFFINITY HEALTH: Case Summary & 40 Largest Unsecured Creditors
AKEENA SOLAR: Has Until March 30 to Cure Nasdaq Non-Compliance
AMERICAN INT'L: Maurice Greenberg Wants to Change Gov't Loan Terms
AMERICAN INT'L: N.Y. AG Urges Recovery of "Unreasonable" Payments
AMR CORPORATION: Earns $45 Million in Quarter Ended September 30
ARCHWAY COOKIES: Lays off 374 Employees; Outten & Golden Probing
ASARCO LLC: Sterlite Bargains for $2.6 Billion Assets Acquisition
ASCALADE COMMS: Reports Status Update on Default Announcement
AURASOUND INC: Deficit, $26.5MM Net Loss Cue Substantial Doubt
BANK OF AMERICA: Fitch Holds Low-B Ratings; Outlook Negative
BANC OF AMERICA: Moody's Downgrades Ratings of 99 Loan Tranches
BAYHILL CAPITAL: Ehrhardt Keefe Expresses Going Concern Doubt
BEAR STEARNS: Moody's Chips Ratings of 97 Loan Tranches
BELDEN & BLAKE: S&P Withdraws Ratings at Company's Request
BILL HEARD: Faces Lawsuit by Wells Fargo; GMAC Faces Same Case
BOYD GAMING: Moody's Lowers CF and PD Ratings to Ba3 From Ba2
BRITISH AMERICAN: Ch. 7 Trustee Sells Osceola Property for $3.5MM
C54-1 SKYGARDEN: Court Okays Marc Stern as Bankruptcy Counsel
CALIFORNIA STATE: Boosts Note Sale by $500 Million as Demand Soars
CARBIZ INC: Debenture Holders Convert Securities to Shares
CHESAPEAKE ENERGY: CEO Sells Shares to Meet Margin Calls
CLOVERIE: Moody's Junks Rating on EUR20MM Tranche Notes
COMMERCE PARK: Case Summary & 20 Largest Unsecured Creditors
COPPERFIELD INVESTMENT: Confirmation Hearing Scheduled on Jan. 26
COUNTRYWIDE: Moody's Trims Ratings of 56 Loan Tranches
CREDIT SUISSE: S&P Cuts Ratings to Low-B on Two Cert. Classes
DELTA AIR: Posts $26 Million Net Loss for Quarter Ended Sept. 30
DIOMED INC: Court Approves Hirsch & Westheimer as Special Counsel
DOMINO'S PIZZA: September 7 Balance Sheet Upside-Down by $1.4BB
EPIX PHARMA: Has Until November 10 to Comply with Nasdaq Criteria
EQUAN REALTH: Case Summary & Three Largest Unsecured Creditors
FREMONT GENERAL: Creditors Support Extension of Exclusive Periods
FRONTIER AIRLINES: Wants to Perform Extension Agreement with FAPA
FRONTIER AIRLINES: Turns Down Teamsters' Idea of Cost Cutting
GATEHOUSE MEDIA: Submits Business Plan to Cure NYSE Non-Compliance
GATEWAY ETHANOL: Court Approves $5.2MM Loan from 1st Lien Lenders
GC GOODYEAR: Voluntary Chapter 11 Case Summary
GENERAL GROWTH: Liquidity Shortfall Cues Fitch's Negative Watch
GENERAL MOTORS: To Launch Auto Loan Initiative on Friday
GENERAL MOTORS: Appoints James Taylor as Hummer CEO
GMAC COMMERCIAL: Fitch Revises $1.5MM Certs. Rating to 'C/DR6'
GMAC LLC: Sued for "Interfering" in Car Leases Sold to Wells Fargo
GREEN VALLEY: Weak Consumer Spending Cues Moody's to Junk Ratings
HCA GENESIS: City Officials Expect Dismissal of Ch. 11 in November
HERITAGE WORLD: 2008 Balance Sheet Upside Down
HERTZ CORP: S&P Cuts Sr. Unsecured Debt Rating to 'B+' From 'BB-'
HOOP HOLDINGS: Files Plan With Up to 36% for Unsecured Creditors
IDEAEDGE INC: Taps BDO Seidman LLC as Independent Accountant
INTERMET CORP: May Employ Broadpoint Capital as Financial Advisor
IRVINGTON SCDO: Moody's Junks Ratings on Four Classes of Notes
JOROM COMPANY: Voluntary Chapter 11 Case Summary
JPMORGAN CHASE: S&P Junks Rating on Class T Certificates
JP MORGAN: Fitch Assigns 'BB' Rating on $26MM Class G Certificates
KIRK PIGFORD: Case Summary & 20 Largest Unsecured Creditors
KMART CORPORATION: Wants to Amend Schedules of Assets and Debts
LB-UBS COMMERCIAL: S&P Affirms Ratings on 25 Certificate Classes
LEAR CORPORATION: Moody's Holds 'B2' Corp. Family Rating
LIFEQUEST WORLD: Carver Moquist Expresses Going Concern Doubt
LIQUIDMETAL TECH: Defaults on Convertible Subor. Notes Due 2010
LIQUOR BARN: Voluntary Chapter 11 Case Summary
MAJESTIC HOLDCO: Moody's Cuts Corp. Family Rating to Ca from Caa2
MAJESTIC STAR: Warns of Inability to Pay Interest on Senior Notes
MCCLATCHY COMPANY: Bestinver Gestion Discloses 17.12% Equity Stake
MERRILL LYNCH: Fitch Holds Low-B Ratings & Assigns Stable Outlooks
MICRON TECHNOLOGY: S&P Cuts Ratings to 'B+' After Qimonda Deal
ML-CFC COMMERCIAL: S&P Trims Ratings on Three Certificate Classes
MORGAN STANLEY: Fitch Holds 'B-/DR1' Rating on Class L Certs.
MORGAN STANLEY: Moody's Trims EUR20MM Notes Rating to 'Ba3'
MORGAN STANLEY: Moody's Cuts Notes Ratings on Poor Credit Quality
MORGAN STANLEY: Moody's Trims $5MM Notes Rating to Caa1 From B1
MORTGAGE SECURITIES: Fitch Holds 'B-' Rating; Assigns Neg. Outlook
MOTOR COACH: Wants to Retain ABC-AMEGA, KPMG (US)
MPF CORP: Court Extends Schedules Filing Deadline to November 6
MS CDS: Moody's Slashes $5MM Credit Swap Default Rating to 'Caa1'
MS CDS: Moody's Cuts $7.5MM Credit Default Swap Rating to 'Caa1'
NELLSON NUTRACEUTICAL: Management Incentive Plan Appeal Proceeds
NEXTWAVE WIRELESS: Has Until April 6 to Comply with Nasdaq Rule
NORTH HOLLYWOOD HAMLIN: Case Summary & Largest Unsecured Creditors
NORTHSTAR ELECTRONICS: Cinnamon Jang Expresses Going Concern Doubt
NORTHWEST AIRLINES: Aviation Consultants Holds 27,528 Shares
PALATIN TECH: Net Losses Raises KPMG's Going Concern Doubt
PARCS MASTER: Moody's Junks Rating on Class 2006-4 Trust Units
PAUL REINHART: Files Seeks Chapter 11 Bankruptcy Protection
PAUL REINHART: Case Summary & 20 Largest Unsecured Creditors
PHS GROUP: Court Approves $2.4MM Asset Sale to Grunberg Oil
PORTOLA PACKAGING: Court Confirms Pre-packaged Plan
PRIMARIS AIRLINES: Case Summary & 20 Largest Unsecured Creditors
QUEBECOR WORLD: Posts $11.6MM Net Loss in Period Ended August 30
RED MOUNTAIN: Case Summary & Largest Unsecured Creditor
RENFRO CORPORATION: Weak Performance Cues Moody's to Cut Ratings
REVLON CONSUMER: S&P Lifts Ratings on Improved Financial Profile
SAINT PETER'S COLLEGE: Moody's Withdraws Rating on Bond Redemption
SANKATY HIGH: Poor Credit Market Value Cues Moody's to Cut Ratings
SANLUIS CORPORACION: Fitch Junks Foreign & Local Currency IDRs
SCOTTISH RE: S&P Retains Ratings Under Negative CreditWatch
SEA CONTAINER: To Forgive $3 Million in Intercompany Receivables
SFD@HOLLYWOOD: Case Summary & 11 Largest Unsecured Creditors
SOLIDUS NETWORKS: Court Converts Cases to Chapter 7 Liquidation
SOVEREIGN BANCORP: Santander Deal Prompts Fitch's Positive Watch
SPACEHAB INC: Bid Price Non-Compliance Cues Delisting Notice
SPANISH BROADCASTING: Moody's Junks Corporate Family Rating
SPARTON CORP: Gets Equity Value Non-Compliance Notice from NYSE
STRATA 2006-34: Moody's Chips Rating on $9MM Notes to Ba2 from A2
SVSS INC: Voluntary Chapter 11 Case Summary
TIERS(R) CALIFORNIA: Moody's Cuts $41MM Credit Trusts Rating to B1
TIERS FLORIDA: Moody's Junks Rating on $15MM Floating Rate Certs.
TIERS FLOATING: Credit Quality Slide Cues Moody's to Cut Rating
TOUSA INC: Files Joint Chapter 11 Plan & Disclosure Statement
TOUSA INC: Classification & Treatment of Claims Under the Plan
TOUSA INC: Plan of Reorganization Includes Litigation Trust
TOUSA INC: Wants Court to Approve Disclosure Statement
TOWER PARK: Files Chapter 11 Plan & Disclosure Statement
U SAFE: Voluntary Chapter 11 Case Summary
VALLEY CLUB: Court Approves Thomas & Johnston as Accountant
VICORP RESTAURANTS: Gets $7MM Financing from Wells Fargo, Ableco
WILLIAMS COMPANIES: Fitch Holds 'BB' Rating on Conv. Debentures
WOODCOCK ESTATES: Mary McClellan Complex for Auction on Oct. 23
WOODSIDE GROUP: Objects to Appointment of Chapter 11 Trustee
WOODSIDE GROUP: AMR 107 & Portofino Units Seek Longer Exclusivity
X-RITE INC: S&P Keeps Ratings Under Pos. Watch on Pending ReCap
YRC WORLDWIDE: Fitch Slashes Sr. Unsecured Rating to 'CCC+/RR6'
* Proskauer Rose Adds Nancy Cohen and Rene Siemens as Partners
* Seyfarth Shaw Creates Strategic Economic Response Team
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
*********
AFFINITY HEALTH: Case Summary & 40 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Affinity Health Care Management, Inc.
221 East 33rd Street, Suite 1H
New York, NY 10016
Bankruptcy Case No.: 08-14018
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
Health Care Investors, Inc. 08-14019
dba Alexandria Manor
Health Care Alliance, Inc. 08-14020
Health Care Assurance, LLC 08-14023
Health Care Reliance, LLC 08-14024
Type of Business: The Debtors operates a hospital.
See: http://www.affinityhealth.org/
Chapter 11 Petition Date: October 14, 2008
Court: Southern District of New York (Manhattan)
Debtor's Counsel: Gary B. Sachs, Esq.
gsachs@hgg.com
Hofheimer Gartlier & Gross, LLP
530 Fifth Avenue
New York, NY 10036
Tel: (212) 818-9000
Fax: (212) 869-4930
Estimated Assets: $1 million to $10 million
Estimated Debts: $1 million to $10 million
A. Affinity Health's list of largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/nysb08-14018.pdf
B. Health Care's list of largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/nysb08-14019.pdf
C. Health Care Alliance's list of largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/nysb08-14020.pdf
D. Health Care Assurance's list of largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/nysb08-14023.pdf
E. Health Care Reliance's list of largest unsecured creditors is
available for free at:
http://bankrupt.com/misc/nysb08-14024.pdf
AKEENA SOLAR: Has Until March 30 to Cure Nasdaq Non-Compliance
--------------------------------------------------------------
Akeena Solar, Inc., received notice from The Nasdaq Stock Market
on Oct. 7, 2008, indicating that due to the resignation of
George Lauro from its board of directors on Oct. 1, the company
no longer complies with Nasdaq's audit committee composition
requirements as set forth in Marketplace Rule 4350.
Consistent with Marketplace Rule 4350(d)(4), the notice from
NASDAQ confirmed that Akeena will have a cure period in order to
regain compliance as:
* Until the earlier of Akeena's next annual shareholders'
meeting or Oct 1, 2009; or,
* By March 30, 2009, if the next annual shareholders' meeting
is held before March 30, 2009.
Akeena must submit to NASDAQ documentation, including biographies
of any new directors, evidencing compliance with these rules no
later than these grace period dates. The company does not
anticipate difficulty in regaining compliance within the grace
period, and has begun the process of identifying a replacement
independent director to join its board and audit committee. In
the event Akeena does not regain compliance by the required date,
NASDAQ will provide written notification that the company's
securities will be delisted. At that time, the Akeena could
appeal the decision to a Listing Qualifications Panel.
Akeena Solar Inc. (Nasdaq: AKNS) -- http://www.akeena.com/-- is a
national integrator of residential and small commercial solar
power systems in the United States, serving customers directly in
California, New Jersey, New York, Connecticut, Colorado and
Pennsylvania. The company was founded in 2001.
AMERICAN INT'L: Maurice Greenberg Wants to Change Gov't Loan Terms
------------------------------------------------------------------
Jay Miller at The Wall Street Journal reports that Maurice
Greenberg, shareholder and former CEO of American International
Group, proposed changes to the terms of the $85 billion loan the
company secured from the government, in exchange for an almost 80%
stake in the firm.
In addition to the loan, WSJ relates that AIG was also cleared to
borrow another $37.8 billion to ease strains from a program that
involves AIG's lending securities to third parties.
According to WSJ, Mr. Greenberg claimed that the terms of the
government loan would result in the liquidation of AIG. WSJ
relates that the interest charges of the loan add up to
$1 billion per month. AIG entered into an agreement with the
Federal Reserve Bank of New York to obtain the loan through a two-
year credit facility that requires the company to pay:
-- 2% one-time commitment fee,
-- 8.5% interest on undrawn capital, and
-- on drawn capital, the London interbank offered rate
plus 8.5%.
WSJ states that Mr. Greenberg wanted the government would change
the terms so that the government would get nonvoting preferred
stock with a 5% to 6% dividend and a 10-year right of redemption
at a 10% premium.
Mr. Greenberg, says WSJ, said that the government's $700 billion
bailout fund and changes to market-to-market accounting could
allow AIG to redeem the preferred stock in less than 10 years.
According to WSJ, Mr. Greenberg said in a letter filed with the
Securities and Exchange Commission, "At a minimum, AIG should be
afforded the same borrowing terms as other companies. Since the
time the credit facility was entered into, the Federal Reserve has
stepped up direct lending to scores of financial institutions and,
for the first time last week, to nonfinancial institutions. They
are able to borrow on terms far less onerous than those imposed on
AIG."
AIG said in a statement that it is "open to all serious proposals
that can benefit taxpayers and AIG shareholders. We continue to
focus on maximizing the value of our businesses and servicing our
customers so we can pay the Fed loan and emerge as a vital ongoing
business."
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.
The company has locations in Argentina, Aruba, Bahamas, Bermuda,
Brazil, Cayman Islands, Chile, Colombia, Dominica, Ecuador, El
Salvador, Grenada, Guatemala, Haiti, Honduras, Jamaica, Mexico,
Panama, Peru, Puerto Rico, Trinidad, Uruguay, Venezuela and Virgin
Islands.
US$85,000,000,000 Federal Reserve Loan
The Federal Reserve Bank of New York extended to AIG a revolving
credit facility up to US$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
US$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 US$5.36 billion compared to 2007 second quarter net income
of US$4.28 billion. Second quarter 2008 adjusted net loss was
US$1.32 billion, compared to adjusted net income of US$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 US$13.16 billion,
compared to net income of US$8.41 billion in the first six months
of 2007. Adjusted net loss for the first six months of 2008 was
US$4.88 billion, compared to adjusted net income of
US$9.02 billion in the first six months of 2007.
AMERICAN INT'L: N.Y. AG Urges Recovery of "Unreasonable" Payments
-----------------------------------------------------------------
Amir Efrati and Chad Bray at The Wall Street Journal report that
New York Attorney General Andrew Cuomo has asked American
International Group Inc. to recover millions of dollars worth of
"unreasonable" and "outrageous" payments it made to executives or
face legal action for violating state law.
According to WSJ, Mr. Cuomo is investigating an alleged
"unwarranted and outrageous expenditures" at AIG. The report
states that lawmakers in Washington raised concerns about AIG's
expenditures, including the spending of more than $440,000 for a
gathering at a California resort a week after the government
granted a bailout loan to the company. AIG explained that the
meeting was held to reward well-performing agents in its life-
insurance business, the report says.
Under the state law, a creditor of an undercapitalized company can
object to expenditures and payments "made in the absence of fair
consideration." An official in the Office of the Attorney General
said that New York State could be considered a creditor because
AIG pays taxes to the state, WSJ relates. The report says that
Mr. Cuomo considered the expenditures as "fraudulent conveyances."
WSJ relates that Mr. Cuomo said in a letter to AIG's board of
directors on Wednesday that as the company "was teetering toward
bankruptcy, and operating with unreasonably small capital, AIG
nevertheless made numerous extraordinary expenditures in the form
of executive compensation payments, junkets, and perks for its
executives." WSJ states that Mr. Cuomo called on AIG's directors
to cease and desist from those expenditures and revoke past
unreasonable expenditures.
Mr. Cuomo, according to WSJ, said that expenditures considered
extraordinary include:
-- a March 2008 cash bonus of more than $5 million and a
"golden parachute" of $15 million to former AIG CEO
Martin Sullivan;
-- $34 million in bonuses and monthly payment of
$1 million to a top-ranking executive largely
responsible for AIG's collapse, even though he was
already terminated; and
-- $1 million monthly payment to former AIG Financial
Products head Joseph Cassano, after he left the company.
WSJ relates that the monthly payments ended recently. AIG, says
the report, confirmed that the deal with Mr. Cassano ended
on Oct. 6.
WSJ quoted Mr. Cuomo as saying, "Moreover, even after the
taxpayer-funded bailout of AIG, the company paid hundreds of
thousands of dollars for luxurious retreats for its executives,
including an overseas hunting party and a golf outing."
AIG said it will cooperate with Mr. Cuomo. On Oct. 10, AIG issued
a clear directive ending all activities that are not essential to
the conduct of our business. The company will continue to take
all measures necessary to ensure that these activities cease
immediately. AIG said that its priority is to continue focusing
on actions necessary to repay the Federal Reserve loan and emerge
as a vital, ongoing business.
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.
The Federal Reserve Bank of New York has 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 revolving credit facility will contain affirmative and
negative covenants, including a covenant to pay down the facility
with the proceeds of asset sales.
The summary of terms also provides for a 79.9% equity interest in
AIG. The corporate approvals and formalities necessary to create
this equity interest will depend upon its form.
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 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 the 'A+' counterparty credit
and financial strength ratings on most of AIG's insurance
operating subsidiaries -- to CreditWatch developing from
CreditWatch negative.
S&P raised its ratings on preferred stock of International Lease
Finance Corp. (ILFC; A-/Watch Dev/A-1) to 'BBB' from 'B', and
revised the CreditWatch implications to developing from negative.
All other ILFC ratings remain on CreditWatch with developing
implications.
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.
AMR CORPORATION: Earns $45 Million in Quarter Ended September 30
----------------------------------------------------------------
AMR Corporation, the parent company of American Airlines, Inc.,
reported a net profit of $45 million for the third quarter ended
Sept. 30, 2008.
The results for the third quarter of 2008 include the impact of
several special items. The company recorded a $432 million gain
from the sale of American Beacon Advisors. The company also
recorded $27 million in one-time severance and aircraft charges
related to its fall 2008 capacity reduction. Going forward, the
company expects remaining special charges of approximately
$121 million for this event, representing the present value of
remaining lease payments on A300 aircraft at the time these
aircraft are permanently retired, as previously announced by the
company.
Excluding the special items, the company reported a loss of
$360 million in the third quarter.
Balance Sheet Update
AMR took numerous steps to bolster its liquidity in the third
quarter. It raised approximately $300 million through the sale
of equity, raised approximately $500 million from aircraft
mortgage transactions, closed the sale of American Beacon
Advisors for total consideration of $480 million, and drew its
$255 million revolving credit facility.
AMR ended the third quarter of 2008 with $5.1 billion in cash and
short-term investments, including a restricted balance of
$456 million. At the end of the third quarter of 2007 AMR had
$5.8 billion in cash and short-term investments, including a
restricted balance of $447 million.
AMR's total debt, which it defines as the aggregate of its long-
term debt, capital lease obligations, the principal amount of
airport facility tax-exempt bonds, and the present value of
aircraft operating lease obligations, was $15.4 billion at the
end of the third quarter of 2008, compared to $16.6 billion at
the end of the third quarter of 2007. AMR's net debt, which it
defines as total debt less unrestricted cash and short-term
investments, was $10.7 billion at the end of the third quarter
of 2008, compared to $11.2 billion at the end of the third
quarter of 2007.
As of July 15, AMR had contributed $78 million to its employees'
defined benefit pension plans in 2008. Since the beginning of
2002 AMR has contributed more than $2 billion to its employee
defined benefit pension plans.
About AMR Corporation
Headquartered in Forth Worth, Texas, AMR Corporation (NYSE:
AMR) operates with its principal subsidiary, American Airlines
Inc. -- http://www.aa.com/-- a worldwide scheduled passenger
airline. At the end of 2006, American provided scheduled jet
service to about 150 destinations throughout North America, the
Caribbean, Latin America, including Brazil, Europe and Asia.
American is also a scheduled airfreight carrier, providing
freight and mail services to shippers throughout its system.
Its wholly owned subsidiary, AMR Eagle Holding Corp., owns two
regional airlines, American Eagle Airlines Inc. and Executive
Airlines Inc., and does business as "American Eagle." American
Beacon Advisors Inc., a wholly owned subsidiary of AMR, is
responsible for the investment and oversight of assets of AMR's
U.S. employee benefit plans, as well as AMR's short-term
investments.
* * *
As reported in the Troubled company Reporter on August 5, 2008,
the TCR said that Moody's Investors Service downgraded the
Corporate Family and Probability of Default Ratings of AMR Corp.
and its subsidiaries to Caa1 from B2, and lowered the ratings of
its outstanding corporate debt instruments and certain equipment
trust certificates and Enhanced Equipment Trust Certificates of
American Airlines Inc. The company still carries Moody's Negative
Outlook.
ARCHWAY COOKIES: Lays off 374 Employees; Outten & Golden Probing
----------------------------------------------------------------
Ginger Christ at Ashland Times-Gazette.com reports that Archway
Cookies, LLC, and affiliate Mother's Cake & Cookie Co. have laid
off about 274 full and part-time employees and about 100 temporary
workers.
Ashland Times relates that New York-based law firm Outten & Golden
LLP started investigating whether the companies breached the
Worker Adjustment and Retraining Notification Act, which requires
firms to give workers 60 days notice before a plant closing.
According to Ashland Times, Outten & Golden sent letters to some
former Archway Cookies workers on Wednesday, informing them of
potential legal claims. Included in the letters is a
questionnaire that requested specific information about the plant
shutdown, the report says. Rene Roupinian, Esq., of Outten &
Golden said that the firm is looking for information from Archway
Cookies employees to determine if there is a claim, according to
the report. Outten & Golden could help workers file a class
action against Archway Cookies, the report says.
Ashland Times reports that Archway Cookies disclosed its closure
on Oct. 3 and informed employees via letters that their jobs would
be terminated on Monday, without any advance notice. The report
states that Archway Cookies cited "unforseeable business
circumstances" as its reason for closing.
Under the WARN Act, companies could be exempted from the 60-day
advance notice requirement if:
-- the company is faltering,
-- unforseeable business circumstances, and
-- natural disasters.
Archway Cookies said in a press release on Oct. 6, "Archway and
Mother's has been operating at a loss due largely to the
significant increases in raw material costs, such as flour,
butter, sugar and dairy, and the record high fuel costs across the
country."
Ashland Times quoted Mr. Roupinian as saying, "Rising fuel costs
would not meet the unforseeable business circumstances defense."
A Worker's Guide to the WARN Act published by the U.S. Department
of Labor's Employment and Training Administration says that
unforseeable business circumstances include circumstances "caused
by some sudden, dramatic and unexpected action or conditions
outside the employer's control."
Archway Cookies employee Tonya VanDriest said that the company's
business circumstance wasn't unforeseen, Ashland Times says.
According to the report, Ms. VanDriest said, "We knew they were
going to close. We thought they'd give us notice."
About Archway Cookies
Battle Creek, Michigan-based Archway Cookies, LLC,--
http://www.archwaycookies.com/-- makes soft-baked cookies. and
crackers. In 1998, Specialty Foods Corp. acquired the Debtors'
for about $100 million.
Parmalat Finanziaria of Italy acquired Mother's Cake and Cookie
Company and Archway Cookies from The Specialty Foods Acquisition
Corporation for $250 million in 2000. Parmalat later sold its
North American Bakery Group, which includes the Archway brands,
Mother's brands and the U.S. and Canadian private label cookie
businesses, to the private equity firm Catterton Partners and
their operating partner Insight Holdings in 2005.
Archway Cookies filed for Chapter 11 protection on Oct. 6, 2008
(Bankr. D. Del. Case No. 08-12323). Its affiliate, Mother's Cake
& Cookie Co. also filed for bankruptcy (Bankr. D. Del. Case No.
08-12326). Michael R. Lastowski, Esq., at Duane Morris, LLP,
represent the Debtors in their restructuring efforts. In their
filing, the Debtors listed estimated assets of between $50 million
and $100 million and estimated debts of between $500 million and
$1 billion.
ASARCO LLC: Sterlite Bargains for $2.6 Billion Assets Acquisition
-----------------------------------------------------------------
ASARCO LLC lawyers disclosed at a status conference with the U.S.
Bankruptcy Court in Corpus Christi, Texas, that the company's
plan sponsor, Sterlite (USA), Inc., has stated that it cannot
and will not close the sale transaction under the parties'
existing purchase and sale agreement without a reduction in the
$2.6 billion purchase price that it contracted to pay for
ASARCO's operating assets.
Sterlite told ASARCO that world economic events affecting credit
markets have impacted its anticipated financing for operations,
capital requirements and acquisitions. Consequently, Sterlite
is prioritizing use of its available liquidity for operations
and capital rather than acquisition at this time. Sterlite also
advised ASARCO that the decline in copper prices has negatively
impacted Sterlite's willingness to close the transaction at the
contract price. Sterlite has not alleged that the purchase
contract is unenforceable or that it lacks the cash to close the
transaction.
"ASARCO advised Sterlite and told the court that it is reserving
all of its rights under the contract," Joseph F. Lapinsky,
president and chief operating officer of ASARCO, said.
The bankruptcy court suspended all pending discovery regarding
confirmation of both ASARCO's plan and the plan submitted by
ASARCO's indirect parent, Americas Mining Corporation, until
after conclusion of mediation scheduled for October 30-31 among
ASARCO, AMC and representatives of key creditor constituents in
the bankruptcy case. U.S. District Judge Andrew Hanen ordered
this mediation to address confirmation issues and resolution of
the fraudulent conveyance suit brought by ASARCO against AMC.
In August, Judge Hanen ruled that AMC had committed actual fraud
in transferring ASARCO's ownership interest in Southern Peru
Copper Corporation to AMC in 2003. Judge Hanen has appointed
U.S. Bankruptcy Judge Marvin Isgur to serve as a mediator in
this matter.
Sterlite has agreed to attend the mediation on October 30-31.
Judge Richard Schmidt has scheduled a status conference for
November 4 to discuss the results of the mediation and next steps
in the reorganization case.
About ASARCO LLC
Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/--
is an integrated copper mining, smelting and refining company.
Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent.
The company filed for Chapter 11 protection on Aug. 9, 2005
(Bankr. S.D. Tex. Case No. 05-21207). James R. Prince, Esq., Jack
L. Kinzie, Esq., and Eric A. Soderlund, Esq., at Baker Botts
L.L.P., and Nathaniel Peter Holzer, Esq., Shelby A. Jordan, Esq.,
and Harlin C. Womble, Esq., at Jordan, Hyden, Womble & Culbreth,
P.C., represent the Debtor in its restructuring efforts. Lehman
Brothers Inc. provides the ASARCO with financial advisory services
and investment banking services. Paul M. Singer, Esq., James C.
McCarroll, Esq., and Derek J. Baker, Esq., at Reed Smith LLP give
legal advice to the Official Committee of Unsecured Creditors and
David J. Beckman at FTI Consulting, Inc., gives financial advisory
services to the Committee.
When the Debtor filed for protection from its creditors, it listed
$600 million in total assets and $1 billion in total debts.
The Debtor has five affiliates that filed for chapter 11
protection on April 11, 2005 (Bankr. S.D. Tex. Case Nos.
05-20521 through 05-20525). They are Lac d'Amiante Du Quebec
Ltee, CAPCO Pipe Company, Inc., Cement Asbestos Products Company,
Lake Asbestos of Quebec, Ltd., and LAQ Canada, Ltd. Sander L.
Esserman, Esq., at Stutzman, Bromberg, Esserman & Plifka, APC, in
Dallas, Texas, represents the Official Committee of Unsecured
Creditors for the Asbestos Debtors. Former Judge Robert C. Pate
has been appointed as the future claims representative. Details
about their asbestos-driven Chapter 11 filings have appeared in
the Troubled Company Reporter since April 18, 2005.
Encycle/Texas, Inc. (Bankr. S.D. Tex. Case No. 05-21304), Encycle,
Inc., and ASARCO Consulting, Inc. (Bankr. S.D. Tex. Case No.
05-21346) also filed for chapter 11 protection, and ASARCO has
asked that the three subsidiary cases be jointly administered with
its chapter 11 case. On Oct. 24, 2005, Encycle/Texas' case was
converted to a Chapter 7 liquidation proceeding. The Court
appointed Michael Boudloche as Encycle/Texas, Inc.'s Chapter 7
Trustee. Michael B. Schmidt, Esq., and John Vardeman, Esq., at
Law Offices of Michael B. Schmidt represent the Chapter 7 Trustee.
ASARCO's affiliates, AR Sacaton LLC, Southern Peru Holdings LLC,
and ASARCO Exploration Company Inc., filed for Chapter 11
protection on Dec. 12, 2006. (Bankr. S.D. Tex. Case No. 06-20774
to 06-20776).
Six of ASARCO's affiliates, Wyoming Mining & Milling Co., Alta
Mining & Development Co., Tulipan Co., Inc., Blackhawk Mining &
Development Co., Ltd., Peru Mining Exploration & Development Co.,
and Green Hill Cleveland Mining Co. filed for Chapter 11
protection on April 21, 2008. (Bank. S.D. Tex. Case No. 08-20197
to 08-20202).
The Debtors submitted to the Court a joint plan of reorganization
and disclosure statement on July 31, 2008. The plan incorporates
the sale of substantially all of the Debtors' assets to Sterlite
Industries, Ltd., for US$2,600,000,000.
Americas Mining Corporation, an affiliate of Grupo Mexico SAB de
CV, submitted a reorganization plan to retain its equity interest
in ASARCO LLC, by offering full payment to ASARCO's creditors in
connection with ASARCO's Chapter 11 case. AMC would provide up to
US$2.7 billion in cash as well as a US$440 million guarantee to
assure payment of all allowed creditor claims, including payment
of liabilities relating to asbestos and environmental claims.
AMC's plan is premised on the estimation of the approximate
allowed amount of the claims against ASARCO.
Amended versions of the competing plans have been filed with the
Court.
Asarco Inc. and AMC are represented by Luc A. Despins, Esq., at
Milbank, Tweed, Hadley & McCloy LLP, in New York.
(ASARCO Bankruptcy News; Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
ASCALADE COMMS: Reports Status Update on Default Announcement
-------------------------------------------------------------
Ascalade Communications, Inc., has provided an update by reporting
issuers in compliance with financial statement filing requirements
in accordance with Ontario Securities Commission Policy 57-603
Defaults.
In accordance with the OSC Policy, the company confirms that
there is no (i) material change to the information set out in its
initial default announcement filed pursuant to the OSC Policy,
(ii) failure by the Company to adhere to the "Alternative
Information Guidelines" set out in the OSC Policy with respect to
the financial statement filing default, and (iii) other material
information concerning the affairs of the Company that has not
been generally disclosed.
Any recovery in the Companies' Creditors Arrangement Act
proceedings for creditors and other stakeholders of the company,
including shareholders, is uncertain and is highly dependent upon
a number of factors, including the recovery from the sale of the
factory, equipment and inventory in the PRC and the outcome of the
Scheme in Hong Kong.
About Ascalade Communications Inc.
Based in Richmond, British Columbia, Ascalade Communications Inc.
(TSE:ACG) -- http://www.ascalade.com/-- is an innovative product
company that designs, develops and manufactures digital wireless
and communication products. The company deliver products by
offering its partners and customers complete vertical integration,
from product design and development to final production. The
company's products include digital cordless phones, Voice over
Internet Protocol phones, digital wireless baby monitors and
digital wireless conference phones. Ascalade products have been
distributed in more than 35 countries and under 80 regional
brands. Ascalade also has facilities in Qingyuan, China, Hong
Kong and a sales office in Hertfordshire, United Kingdom.
On April 29, 2008, Jervis Rodrigues, senior vice-president of
Deloitte & Touche Inc., filed separate petitions for protection
under Chapter 15 of the U.S. Bankruptcy Code on behalf of Ascalade
Communications Inc. and its debtor-affiliate (Bankr. N.D. Ill.
Case Nos. 08-10612 and 08-10616). Jeffrey G. Close, Esq. at
Chapman and Cutler LLP represents the Petitioner in the Chapter 15
case. Ascalade's financial condition as of September 2007 showed
total assets of $99,630,000 and total debts of $40,410,000.
AURASOUND INC: Deficit, $26.5MM Net Loss Cue Substantial Doubt
--------------------------------------------------------------
Los Angeles-based Kabani & Company, Inc., raised substantial doubt
about the ability of AuraSound, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended June 30, 2008. In a letter dated Sept. 25, 2008,
the auditing firm reported that during the year ended June 30,
2008, the company incurred net losses. In addition, the company
had negative cash flow from operating activities amounting to
$3,258,289 for the year ended June 30, 2008.
The company posted a net loss of $26,458,932 on total revenues of
$1,888,692 for the year ended June 30, 2008, as compared with a
net loss of $3,809,260 on total revenues of $208,988 in the prior
year.
Management Statement
The company had an accumulated deficit of $33,029,040 as of June
30, 2008. The increased loss from operations resulted primarily
from the amortization of the intangible assets, which totaled
$2,181,314 and the $20,395,215 non-cash charge relating to the
impairment of the intangible assets at June 30, 2008. $3,066,477
of the loss incurred during the fiscal year ended June 30, 2007,
and $341,406 of the loss incurred during the fiscal year ended
June 30, 2008, related to expenses incurred in connection with
advances to Grandford Holdings. In light of the problems
experienced by the company in establishing a primary supplier,
there is no certainty that the company will be able to provide the
quality and timely deliveries required by our customers.
If the company is unable to generate profits and unable to
continue to obtain financing for its working capital requirements,
it may have to curtail its business sharply or cease business
altogether.
In June 2007, the company completed a $12.9 million private
placement aimed at providing sufficient funds to establish
AuraSound as a significant source for speakers designed for
notebook computers and cell phones in addition to its already
established home entertainment line of speakers. Immediately
following the closing, around $1,800,000 was used to pay the
expenses related to the offering, around $4,400,000 was used to
pay-off certain bridge loans, including interest, and $2,000,000
was deposited into an account with the company's primary bank, in
accordance with the terms of a lending agreement.
In addition, in order to ramp-up production at the manufacturer in
China, the company established a prepayment policy with Grandford
Holdings, Ltd., then the company's long-term supplier, and sent
$4,200,000 to Grandford Holdings, Ltd., during June and July 2007
for the purchase of inventory, engineering services, tools, jigs,
dies and special equipment. The remaining $500,000, $2,000,000
drawn on the deposit credit facility and an additional $635,000
loaned to the company by Arthur Liu, the company's chief executive
officer, chairman of the board of directors, and largest
stockholder, has been used to fund the establishment of offices in
Hong Kong, Taiwan, Shanghai and Japan and to cover overhead at the
corporate offices in Santa Fe Springs, Calif., through July 2008.
The company continues to depend on Mr. Liu for additional support.
Balance Sheet
At June 30, 2008, the company's balance sheet showed $2,940,069 in
total assets and $4,643,913 in total liabilities, resulting in a
$1,703,844 stockholders' deficit.
The company's consolidated balance sheet at June 30, 2008, also
showed strained liquidity with $2,839,237 in total current assets
available to pay $4,643,913 in total current liabilities.
A full-text copy of the company's 2008 annual report is available
for free at http://ResearchArchives.com/t/s?33de
Covenant Problems
Effective June 7, 2007, the company entered into a one-year
$12,000,000 credit facility with Bank SinoPac pursuant to which a
$10,000,000 revolving accounts receivable facility and a
$2,000,000 fixed deposit credit facility were available to the
company. Obligations under the agreement are secured by
substantially all the assets of the company. The accounts
receivable facility, which may be used for working capital and
other general corporate purposes bears interest at the rate of
prime minus .5%. The letter of credit facility bears interest at
the rate of TCD plus 1%. The credit facility is also subject to
certain covenants and conditions and contains standard
representations, covenants and events of default for facilities of
this type. Occurrence of an event of default allows the lenders
to accelerate the payment of the loans and/or terminate the
commitments to lend, in addition to the exercise of other legal
remedies, including foreclosing on collateral. The company was
not in compliance of certain covenants as of June 30, 2008. As of
June 30, 2008, $2,000,000 had been drawn from this facility.
Pursuant to the credit facility, the company has also pledged and
assigned a time certificate of deposit account for one year having
an initial deposit balance of $2,000,000 to be held and maintained
at all times with the bank.
About AuraSound, Inc.
AuraSound, Inc. (OTC BB: ARAU.OB) -- http://www.aurasound.com--
engages in the development, commercialization, and sales of audio
products, sound systems, and audio components using its patented
and proprietary electromagnetic technology. Its products include
micro-audio speakers; speaker component products, such as
loudspeaker transducers; and home and pro audio products,
including home audio systems, home theater systems, and
subwoofers. It markets and sells its products to the
manufacturers of high end speakers and sound systems through a
network of sales representatives in Taiwan, Japan, the People's
Republic of China, and the United States. The company was
formerly known as Hemcure, Inc., and changed its name to
AuraSound, Inc., in February 2008. The company is based in Santa
Fe Springs, California.
BANK OF AMERICA: Fitch Holds Low-B Ratings; Outlook Negative
------------------------------------------------------------
Fitch Ratings has affirmed the ratings and assigned Outlooks for
all classes for Bank of America Commercial Mortgage Inc. pass-
through certificates, Series 2007-4 as:
-- $25.1 million class A-1 at 'AAA', Outlook Stable;
-- $77.3 million class A-2 at 'AAA', Outlook Stable;
-- $287.5 million class A-3 at 'AAA', Outlook Stable;
-- $73.7 million class A-SB at 'AAA', Outlook Stable;
-- $817.6 million class A-4 at 'AAA', Outlook Stable;
-- $277.3 million class A-1A at 'AAA', Outlook Stable;
-- $223.1 million class A-M at 'AAA', Outlook Stable;
-- $178.5 million class A-J at 'AAA', Outlook Stable;
-- Interest only class XW at 'AAA', Outlook Stable;
-- $22.3 million class B at 'AA+', Outlook Stable;
-- $19.5 million class C at 'AA', Outlook Stable;
-- $22.3 million class D at 'AA-', Outlook Stable;
-- $22.3 million class E at 'A+, Outlook Stable;
-- $13.9 million class F at 'A', Outlook Stable;
-- $16.7 million class G at 'A-', Outlook Stable;
-- $27.9 million class H at 'BBB+', Outlook Negative;
-- $22.3 million class J at 'BBB', Outlook Negative;
-- $19.5 million class K at 'BBB-', Outlook Negative;
-- $13.9 million class L at 'BB+', Outlook Negative;
-- $5.6 million class M at 'BB', Outlook Negative;
-- $5.6 million class N at 'BB-', Outlook Negative;
-- $5.6 million class O at 'B+', Outlook Negative;
-- $5.6 million class P at 'B', Outlook Negative;
-- $5.6 million class Q at 'B-', Outlook Negative.
Fitch does not rate the $39 million class S.
The rating affirmations are the result of stable performance and
minimal pay down since issuance in November 2007. Classes H
through Q have been assigned Negative Outlooks due to the high
concentration of Fitch Loans of Concern. Outlooks reflect likely
rating changes over the next one to two years. As of the
September 2008 distribution date, the pool's aggregate certificate
balance has decreased 0.2% to $2.22 billion from $2.23 billion at
issuance. In addition, approximately 97% of the pool has reported
year-end 2007 financial statements with the servicer.
Fitch has identified 16 loans of concern (10.2% of the pool), one
of which is a specially serviced loan (0.30%). Potential losses
would be absorbed by the non-rated class S. The specially
serviced loan is a 44,700 square foot unanchored, retail center
located in South Fort Meyers, Florida. The loan is 90+ days
delinquent and the borrower has been unresponsive to servicer
requests.
At issuance there was one loan in the top 10, La Jolla Executive
Center (4.8%) that was in the process of stabilizing. The
property has a March 31, 2008 servicer reported debt service
coverage ratio and occupancy of approximately 0.65 times and 78%,
respectively. Fitch has reviewed the updated occupancy, reserve
balances and cash flow information for this loan. The remaining
debt service reserve contains approximately six months of
payments. Given the timing of the upcoming lease rollover, it is
unlikely the performance will break even before the debt service
reserve is depleted. The sponsor for the loan is the Irvine
Company, LLC. Fitch considers the loan a loan of concern, and
will monitor the status of the reserve and leasing activity.
The Lakeside Mall (4.3%) maintains its investment-grade shadow
rating. Servicer reported occupancy as of June 30, 2008 was 97.5%
with a DSCR of 2.35x.
BANC OF AMERICA: Moody's Downgrades Ratings of 99 Loan Tranches
---------------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 99
tranches and placed 14 senior tranches on review for possible
downgrades from 15 transactions issued by Banc of America. The
collateral backing these transactions consists primarily of first-
lien, fixed and adjustable-rate, Alt-A and option arm mortgage
loans.
Ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels.
Also, for certain seasoned deals, step-down, or the possibility
thereof, is likely to cause further erosion of credit support from
subordination.
Moody's Investors Service has also published the underlying rating
on one insured note as identified below. The ratings of the
insured notes were previously derived from public ratings on non-
sequential pari passu or more junior uninsured tranches of the
same deals.
The underlying ratings reflect the intrinsic credit quality of the
notes in the absence of the guarantee. The ratings on securities
that are guaranteed or "wrapped" by a financial guarantor is the
higher of a) the rating of the guarantor or b) the published
underlying rating. The -- Current Ratings on the below notes
are consistent with Moody's practice of rating insured securities
at the higher of the guarantor's insurance financial strength
rating and any underlying rating that is public.
Complete rating actions are:
Issuer: Banc of America Funding 2004-B Trust
-- Cl. 6-A-1, Downgraded to Aa3 from Aaa
-- Cl. 6-X-1, Downgraded to Aa3 from Aaa
-- Cl. 6-B-1, Downgraded to Baa1 from Aa3
-- Cl. 6-B-2, Downgraded to B3 from Baa2
-- Cl. 6-B-3, Downgraded to Ca from B1
-- Cl. 7-M-2, Downgraded to A3 from A2
-- Cl. 7-M-3, Downgraded to Ba1 from Baa3
Issuer: Banc of America Funding 2004-C Trust
-- Cl. 4-M-1, Downgraded to Baa1 from Aa2
-- Cl. 4-M-2, Downgraded to Ba3 from A2
-- Cl. 4-B-1, Downgraded to B3 from Baa2
-- Cl. 4-B-2, Downgraded to Caa1 from Baa3
Issuer: Banc of America Funding Corporation, Mortgage Pass-Through
Certificates, Series 2005-4
-- Cl. A-1, Currently Aaa
Financial Guarantor: Assured Guaranty Corp (Aaa on review for
possible downgrade)
-- Underlying Rating: Aaa
Issuer: Banc of America Funding 2005-A Trust
-- Cl. 1-A-1, Downgraded to Aa1 from Aaa
-- Cl. 2-A-1, Downgraded to Aa3 from Aaa
-- Cl. 2-A-3, Downgraded to A1 from Aa1
-- Cl. 3-A-1, Downgraded to Aa2 from Aaa
-- Cl. 5-B-1, Downgraded to Ba3 from Baa2
-- Cl. 5-B-2, Downgraded to B3 from Baa3
-- Cl. CB-1, Downgraded to Baa1 from Aa2
-- Cl. CB-2, Downgraded to B2 from A2
-- Cl. CB-3, Downgraded to Caa3 from Baa2
Issuer: Banc of America Funding 2005-B Trust
-- Cl. 2-A-1, Downgraded to Aa1 from Aaa
-- Cl. 3-B-1, Downgraded to B3 from Baa2
-- Cl. 3-B-2, Downgraded to Caa3 from Baa3
-- Cl. 3-B-3, Downgraded to Ca from Ba2
-- Cl. 3-M-1, Downgraded to Aa3 from Aa2
-- Cl. 3-M-2, Downgraded to Baa1 from A2
-- Cl. CB-1, Downgraded to A1 from Aa2
-- Cl. CB-2, Downgraded to Baa3 from A2
-- Cl. CB-3, Downgraded to Caa1 from Baa2
-- Cl. CB-4, Downgraded to Ca from Ba2
-- Cl. CB-5, Downgraded to C from B2
Issuer: Banc of America Funding 2005-C Trust
-- Cl. A-3A, Downgraded to Aa3 from Aaa
-- Cl. A-3B, Downgraded to Aa3 from Aaa
-- Cl. M-1, Downgraded to Baa1 from Aa2
-- Cl. M-2, Downgraded to Ba3 from A2
-- Cl. B-1, Downgraded to Caa2 from Baa2
-- Cl. B-2, Downgraded to Caa3 from Baa3
-- Cl. B-3, Downgraded to Ca from Ba2
Issuer: Banc of America Funding 2006-G Trust
-- Cl. M-3, Downgraded to A1 from Aa3
-- Cl. M-4, Downgraded to A3 from A1
-- Cl. M-5, Downgraded to B1 from A3
-- Cl. M-6, Downgraded to Caa1 from Ba1
Issuer: Banc of America Funding 2006-I Trust
-- Cl. 6-A-2, Downgraded to Aa3 from Aaa
-- Cl. M-1, Downgraded to Baa1 from Aa1
-- Cl. M-2, Downgraded to Ba1 from Aa2
-- Cl. M-3, Downgraded to B1 from Aa3
-- Cl. M-4, Downgraded to B2 from A1
-- Cl. M-5, Downgraded to Caa1 from A2
-- Cl. M-6, Downgraded to Ca from Baa1
Issuer: Banc of America Funding 2007-A Trust
-- Cl. 1-A-1, Downgraded to Aa1 from Aaa
-- Cl. 2-A-2, Downgraded to Aa1 from Aaa
-- Cl. M-1, Downgraded to A2 from Aa1
-- Cl. M-2, Downgraded to Ba1 from Aa3
-- Cl. M-3, Downgraded to B1 from A1
-- Cl. M-4, Downgraded to B2 from Baa1
-- Cl. M-5, Downgraded to Caa1 from Ba1
-- Cl. M-6, Downgraded to Caa2 from B1
-- Cl. M-7, Downgraded to Ca from B2
Issuer: Banc of America Funding 2007-B Trust
-- Cl. A-2, Downgraded to A2 from Aaa
-- Cl. M-1, Downgraded to Ba1 from Aa1
-- Cl. M-2, Downgraded to B1 from Aa2
-- Cl. M-3, Downgraded to B2 from Aa3
-- Cl. M-4, Downgraded to B3 from A1
-- Cl. M-5, Downgraded to Caa1 from A2
-- Cl. M-6, Downgraded to Caa2 from Baa1
-- Cl. M-7, Downgraded to Ca from Ba3
Issuer: Banc of America Funding 2007-C Trust
-- Cl. 5-B-1, Downgraded to Ba3 from Aa2
-- Cl. 5-B-2, Downgraded to B3 from Baa2
-- Cl. 5-B-3, Downgraded to Ca from Ba2
-- Cl. 5-B-4, Downgraded to Ca from B3
-- Cl. 6-A-2, Downgraded to Aa1 from Aaa
-- Cl. 7-A-2, Downgraded to Aa1 from Aaa
-- Cl. M-1, Downgraded to A1 from Aa1
-- Cl. M-2, Downgraded to A3 from Aa2
-- Cl. M-3, Downgraded to Baa1 from Aa3
-- Cl. M-4, Downgraded to Ba2 from A1
-- Cl. M-5, Downgraded to B2 from Baa1
-- Cl. M-7, Downgraded to Caa3 from Ba3
Issuer: Banc of America Funding 2007-D Trust
-- Cl. 1-A-2, Downgraded to Aa1 from Aaa
-- Cl. M-1, Downgraded to A2 from Aa1
-- Cl. M-2, Downgraded to Baa2 from Aa2
-- Cl. M-3, Downgraded to Baa3 from Aa3
-- Cl. M-4, Downgraded to Ba2 from A1
-- Cl. M-5, Downgraded to B2 from A2
-- Cl. M-6, Downgraded to B3 from Baa1
-- Cl. M-7, Downgraded to Caa1 from Ba3
Issuer: Banc of America Funding 2007--5 Trust
-- Cl. 1-A-1, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 2-A-1, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 2-A-3, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 2-A-4, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 3-A-2, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 4-A-1, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 4-A-2, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 4-A-5, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 5-A-1, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. 6-A-1, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. C-A-1, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. C-A-4, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. C-A-5, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. C-A-11, Placed on Review for Possible Downgrade,
currently Aaa
Issuer: Banc of America Funding Corporation 2007-6
-- Cl. A-3, Downgraded to Baa1 from Aaa
-- Cl. M-1, Downgraded to B2 from Aa3
-- Cl. M-2, Downgraded to Caa1 from Baa2
-- Cl. M-3, Downgraded to Ca from Ba1
-- Cl. M-4, Downgraded to Ca from Ba3
-- Cl. M-5, Downgraded to Ca from B1
Issuer: Banc of America Funding Corporation, Mortgage Pass-Through
Certificates, Series 2005-E
-- Cl. 1-A-2, Downgraded to A3 from Aaa
-- Cl. 2-A-1, Downgraded to Aa3 from Aaa
-- Cl. 2-A-2, Downgraded to A3 from Aa1
-- Cl. 3-A-1, Downgraded to A2 from Aaa
-- Cl. 4-A-1, Downgraded to A2 from Aaa
-- Cl. 5-A-1, Downgraded to A2 from Aaa
-- Cl. 6-A-1, Downgraded to A2 from Aaa
BAYHILL CAPITAL: Ehrhardt Keefe Expresses Going Concern Doubt
-------------------------------------------------------------
In a letter dated Sept. 10, 2008, Denver-based Ehrhardt Keefe
Steiner & Hottman PC raised substantial doubt about the ability of
BayHill Capital Corporation to continue as a going concern after
it audited the company's financial statements for the year ended
June 30, 2008. The auditor said, "the company has experienced
circumstances which raise substantial doubt about its ability to
continue as a going concern."
Management Statement
Cash flows generated from operations, advances pursuant to the
company's financing arrangements and cash from the issuance of
notes payable to BayHill Capital, LLC, were sufficient to meet the
company's working capital requirements for the year ended June 30,
2008, but will not likely be sufficient to meet its working
capital requirements for the foreseeable future or provide for
expansion opportunities. The company has a working capital
deficit of $895,782 as of June 30, 2008, incurred $2,337,301 in
losses from continuing operations, losses of $44,590 from
discontinued operations, and used $186,621 in cash flows from
operations for the year ended June 30, 2008. These conditions
raise substantial doubt about the company's ability to continue as
a going concern.
Throughout the fiscal year ended June 30, 2008, BayHill Capital,
LC and Vector Capital LLC extended a series of loans in the form
of short-term and convertible notes in the amount of $695,000.
All of these notes, together with $250,000 of notes outstanding as
of June 30, 2007, and accrued interest, were converted into
744,330 shares of the company's common stock in multiple
transactions during the fiscal year ended June 30, 2008.
Subsequent to June 30, 2008, the company obtained an advance of
$100,000 in cash funds for use as working capital from Little
Hollow Farms, Inc., a company that is affiliated with BayHill
Capital's Chief Executive Officer. Management intends to include
the full amount of the advance as a portion of the company's next
roundof equity funding. Currently, management has not reached an
agreement with the lender regarding the repayment or conversion of
the advances.
In order to continue as a going concern, the management plans to
obtain additional debt or equity financing, increase revenues, and
increase cash flows from operations. There can be no assurance
that the company will be able to secure additional debt or equity
financing, be able to reduce its operating costs and expenses, or
that cash flows from operations will produce adequate cash flow to
enable the company to meet all its future obligations or to be
able to expand. If the company is unable to obtain additional
debt or equity financing, the company may be required to
significantly reduce or cease operations.
Financials
The company posted a net loss of $2,381,891 on total revenues of
$4,122,517 for the year ended June 30, 2008, as compared with a
net loss of $680,228 on total revenues of $5,619,892 in the prior
year.
At June 30, 2008, the company's balance sheet showed $1,098,205 in
total assets and $1,340,734 in total liabilities, resulting in a
$242,529 stockholders' deficit.
The company's consolidated balance sheet at June 30, 2008, also
showed strained liquidity with $444,952 in total current assets
available to pay $1,340,734 in total current liabilities.
A full-text copy of the company's 2008 annual report is available
for free at http://ResearchArchives.com/t/s?33dc
About BayHill Capital
BayHill Capital Corporation (BYHL.OB) --
http://www.bayhillcapital.com-- through its subsidiary, operates
as an online marketing and distribution platform company. It
offers various telecommunications and technology-based products
and services, including long distance services and commercial
telecommunications services, wireless communications, residential
broadband services, voice-over-Internet protocol services, prepaid
calling cards/pins, and other products. The company, formerly
known as Cognigen Networks, Inc., was incorporated in 1983 and is
based in South Jordan, Utah.
BEAR STEARNS: Moody's Chips Ratings of 97 Loan Tranches
-------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 97
tranches from 17 transactions issued by Bear Stearns Alt-A Trust.
Of these, one remains on review for further possible downgrade.
Additionally, 60 senior tranches were placed on review for further
possible downgrade. The collateral backing these transactions
consists primarily of first-lien, fixed and adjustable-rate, Alt-A
mortgage loans.
Ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels.
Also, for certain seasoned deals, step-down, or the possibility
thereof, is likely to cause further erosion of credit support from
subordination.
Complete rating actions are:
Issuer: Bear Stearns ALT-A Trust 2004-1
-- Cl. B-1, Downgraded to Aa3 from Aa2
-- Cl. B-2, Downgraded to Baa1 from A2
-- Cl. B-3, Downgraded to B3 from Baa2
Issuer: Bear Stearns ALT-A Trust 2004-10
-- Cl. M-1, Downgraded to Aa3 from Aa2
-- Cl. M-2, Downgraded to Baa1 from A2
-- Cl. B-1, Downgraded to Baa3 from Baa2
-- Cl. B-2, Downgraded to Ba3 from Baa3
Issuer: Bear Stearns ALT-A Trust 2004-11
-- Cl. II-A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-6b, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. I-M-1, Downgraded to A3 from Aa2
-- Cl. I-M-2, Downgraded to Baa3 from A2
-- Cl. I-B-1, Downgraded to B3 from Baa2
-- Cl. I-B-2, Downgraded to C from Baa3
-- Cl. II-B-1, Downgraded to Baa1 from Aa2
-- Cl. II-B-2, Downgraded to B3 from A2
-- Cl. II-B-3, Downgraded to Ca from Baa2
Issuer: Bear Stearns ALT-A Trust 2004-12
-- Cl. II-A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-4, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. II-A-5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-6, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. II-X-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-X-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-M-1, Downgraded to Aa3 from Aa2
-- Cl. I-M-2, Downgraded to Baa1 from A2
-- Cl. II-M-1, Downgraded to A2 from Aa1
-- Cl. I-B-1, Downgraded to Baa2 from Baa1
-- Cl. I-B-2, Downgraded to Ba1 from Baa2
-- Cl. II-B-1, Downgraded to Baa1 from Aa2
-- Cl. II-B-2, Downgraded to B3 from A2
-- Cl. II-B-3, Downgraded to Ca from Baa2
Issuer: Bear Stearns ALT-A Trust 2004-13
-- Cl. M-1, Downgraded to A1 from Aa2
-- Cl. M-2, Downgraded to B2 from A2
-- Cl. B-1, Downgraded to Ca from Baa2
-- Cl. B-2, Downgraded to Ca from Baa3
Issuer: Bear Stearns ALT-A Trust 2004-2
-- Cl. B-3, Downgraded to Ba1 from Baa2
Issuer: Bear Stearns ALT-A Trust 2004-5
-- Cl. B-2, Downgraded to A3 from A2
-- Cl. B-3, Downgraded to B3 from Baa2
Issuer: Bear Stearns ALT-A Trust 2004-6
-- Cl. I-A, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. II-A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. III-A, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. M-1, Downgraded to A1 from Aa2
-- Cl. M-2, Downgraded to Baa2 from A2
-- Cl. B-1, Downgraded to Ba1 from Baa2
-- Cl. B-2, Downgraded to B2 from Baa3
Issuer: Bear Stearns ALT-A Trust 2004-7
-- Cl. B-2, Downgraded to A3 from A2
-- Cl. B-3, Downgraded to Ba3 from Baa2
Issuer: Bear Stearns ALT-A Trust 2004-8
-- Cl. M-2, Downgraded to Baa1 from A2
-- Cl. B-1, Downgraded to Ba1 from Baa2
-- Cl. B-2, Downgraded to B2 from Baa3
Issuer: Bear Stearns ALT-A Trust 2004-9
-- Cl. B-1, Downgraded to A1 from Aa2
-- Cl. B-2, Downgraded to Baa2 from A2
-- Cl. B-3, Downgraded to Caa3 from Baa2
Issuer: Bear Stearns ALT-A Trust 2005-1
-- Cl. M-2, Downgraded to Baa1 from A2
-- Cl. B-1, Downgraded to Ba1 from Baa2
-- Cl. B-2, Downgraded to B3 from Baa3
-- Cl. B-3, Downgraded to C from Ba2
Issuer: Bear Stearns ALT-A Trust 2005-2
-- Cl. II-A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-2a, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-2b, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. II-A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-6, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-X-4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-X-5, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-M-2, Downgraded to Baa3 from A2
-- Cl. I-B-1, Downgraded to B2 from Baa2
-- Cl. I-B-2, Downgraded to Ca from Baa3
-- Cl. I-B-3, Downgraded to C from Ba2
-- Cl. II-B-1, Downgraded to A1 from Aa1
-- Cl. II-B-2, Downgraded to A3 from Aa2
-- Cl. II-B-3, Downgraded to Ba2 from A2
-- Cl. II-B-4, Downgraded to Caa3 from Baa2
Issuer: Bear Stearns ALT-A Trust 2005-3
-- Cl. I-A-1, Placed on Review for Possible Downgrade, currently
Aaa
-- Cl. II-A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-A-2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. II-A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. III-A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. III-A-2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. III-A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. IV-A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. IV-A-2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. IV-A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. B-1, Downgraded to Baa2 from Aa1
-- Cl. B-2, Downgraded to Ba2 from Aa2
-- Cl. B-3, Downgraded to Caa3 from A2
-- Cl. B-4, Downgraded to Ca from Baa2
Issuer: Bear Stearns ALT-A Trust 2005-4
-- Cl. I-A-2, Downgraded to Aa3 from Aaa
-- Cl. II-1A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-2A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-2A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-2A-3, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. II-3A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-3A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-3A-3, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-3A-4, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-4A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-4A-2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. II-5A-2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. I-M-1, Downgraded to Baa2 from Aa2
-- Cl. I-M-2, Downgraded to B3 from A2
-- Cl. II-M-1, Downgraded to Baa2 from Aa1
-- Cl. II-M-2, Downgraded to Ba2 from Aa2
-- Cl. II-M-3, Downgraded to B2 from Aa3
-- Cl. II-M-4, Downgraded to B3 from A1
-- Cl. I-B-1, Downgraded to Ca from Baa2
-- Cl. I-B-2, Downgraded to C from Baa3
-- Cl. I-B-3, Downgraded to C from Ba2
-- Cl. II-B-1, Downgraded to Caa2 from A2
-- Cl. II-B-2, Downgraded to Ca from A3
-- Cl. II-B-3, Downgraded to C from Baa3
Issuer: Bear Stearns ALT-A Trust 2005-5
-- Cl. II-1A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-1A-2, Placed on Review for Possible Downgrade,
currently Aa1
-- Cl. II-2A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-3A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-4A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-5A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-6A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-M-1, Downgraded to A2 from Aa2
-- Cl. I-M-2, Downgraded to Ba1 from A2
-- Cl. II-M-1, Downgraded to A3 from Aa1
-- Cl. II-M-2, Downgraded to Baa1 from Aa2
-- Cl. II-M-3, Downgraded to Baa3 from Aa3
-- Cl. II-M-4, Downgraded to Ba3 from A1
-- Cl. II-M-5, Downgraded to B2 from A2
-- Cl. II-M-6, Downgraded to B3 from A3
-- Cl. I-B-1, Downgraded to Caa3 from Baa2
-- Cl. I-B-2, Downgraded to Ca from Baa3
-- Cl. I-B-3, Downgraded to C from Ba2
-- Cl. II-B-1, Downgraded to Ca from Baa1
-- Cl. II-B-2, Downgraded to C from Baa2
Issuer: Bear Stearns ALT-A Trust 2005-7
-- Cl. II-1A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-2A-2, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-3A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-4A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-5A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. II-6A-1, Placed on Review for Possible Downgrade,
currently Aaa
-- Cl. I-M-1, Downgraded to Baa2 from A1
-- Cl. I-M-2, Downgraded to Caa1 from Ba1
-- Cl. I-B-1, Downgraded to Ca from B3
-- Cl. I-B-2, Downgraded to Ca from Caa1
-- Cl. I-B-3, Downgraded to C from Ca
-- Cl. II-B-1, Downgraded to Baa3 from Aa1
-- Cl. II-B-2, Downgraded to B1 from A2
-- Cl. II-B-3, Downgraded to B2 from A3; Placed Under Review for
further Possible Downgrade
-- Cl. II-B-4, Downgraded to Caa1 from Baa2
-- Cl. II-B-5, Downgraded to Caa2 from Ba1
-- Cl. II-B-6, Downgraded to Ca from Ba3
-- Cl. II-B-7, Downgraded to Ca from B3
-- Cl. II-B-8, Downgraded to Ca from B3
-- Cl. II-B-9, Downgraded to Ca from B3
BELDEN & BLAKE: S&P Withdraws Ratings at Company's Request
----------------------------------------------------------
Standard & Poor's Ratings Services withdrew its 'B-' corporate
credit rating on Belden & Blake Corp. S&P also withdrew its 'B'
issue-level rating and '2' recovery rating on the company's 8.75%
$192.5 million senior secured notes due 2012. S&P withdrew the
ratings at the company's request. Of the $192.5 million of public
rated notes, $164 million remained outstanding as of June 30,
2008.
BILL HEARD: Faces Lawsuit by Wells Fargo; GMAC Faces Same Case
--------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that Wells Fargo Bank, NA,
asked the U.S. Bankruptcy Court for the Northern District of
Alabama to enjoin Bill Heard Enterprises, Inc., and its debtor-
affiliates Heard and GMAC, LLC, from encouraging their customers
to repudiate installment contracts and leases on purchasing new
cars because they were now Wells Fargo's customers.
Wells Fargo, according to the report, bought from the Debtors such
contracts and leases. When the Debtors filed for bankruptcy,
Wells Fargo, according to the report, withheld payment on the
contracts it had accepted but not yet paid for, because it
intended to to deduct what it owes the Debtors against what they
owe Wells Fargo.
Wells Fargo told the Court that the Debtors and GMAC started
calling customers and telling them to return cars where Wells
Fargo wasn't paying.
About GMAC LLC
GMAC LLC -- http://www.gmacfs.com/-- formerly General
Motors Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses. GMAC was established in 1919 and employs
approximately 26,700 people worldwide.
GMAC Financial Services is in turn wholly owned by GMAC LLC.
Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.
About ResCap
Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.
* * *
As disclosed in the Troubled Company Reporter on June 18, 2008,
Moody's Investors Service assigned ratings of Caa2 and Caa3 to
Residential Capital LLC (ResCap)'s senior secured and junior
secured bonds, respectively. These bonds were issued as part of
ResCap's bond exchange which was completed on June 4, 2008. The
ratings of ResCap's unsecured senior debt and unsecured
subordinate debt were affirmed at Ca and C, respectively. Ratings
are under review for downgrade. Separately the senior unsecured
rating of GMAC LLC was downgraded to B3 from B2 with a negative
outlook.
As disclosed in the Troubled Company Reporter on June 9, 2008,
Fitch Ratings has downgraded Residential Capital LLC's long- and
short-term Issuer Default Ratings to 'D' from 'C' following
completion of the company's distressed debt exchange. Fitch has
also removed ResCap from Rating Watch Negative, where it was
originally placed on May 2.
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.
BOYD GAMING: Moody's Lowers CF and PD Ratings to Ba3 From Ba2
-------------------------------------------------------------
Moody's Investors Service lowered Boyd Gaming Corporation's
corporate family and probability of default ratings to Ba3 from
Ba2, and senior subordinated note ratings to B2 from B1. The
downgrade is based on Moody's expectation that the weak economy
will continue to negatively impact gaming revenue in all of the
markets in which Boyd operates. As a direct consequence, the
company is not expected to achieve and sustain the credit metrics
needed to maintain a Ba2 corporate family rating. The company's
SGL-2 speculative grade liquidity rating is affirmed. The rating
outlook is negative. This rating action concludes the review
process that was initiated on July 18, 2008.
"Although several recent decisions by Boyd -- including the delay
of its Echelon development project in Las Vegas and suspension of
annual cash common dividends -- will positively impact the
company's free cash flow, lower consumer spending and gaming
revenue trends will make it difficult for the company to
significantly reduce leverage to a level appropriate for its --
Prior Rating", stated Keith Foley, Senior Vice President.
The negative outlook acknowledges the lack of earnings visibility
in the gaming sector, particularly with respect to the Las Vegas
locals gaming market. The "locals" market, which has experienced
substantial comparable month declines in gaming revenue through
August 2008, accounts for over 50% of Boyd's wholly-owned property
level EBITDA. Despite the expected free cash flow improvement
from the Echelon delay and dividend suspension, a long-term
continuation of negative gaming revenue trends through the end of
this year and first half of 2009 could pressure ratings further.
Boyd's SGL-2 speculative grade liquidity rating anticipates that
the Echelon delay and suspension of dividend will more than offset
possible further EBITDA declines over next 12-month period. It
also considers that during that same period, Boyd will not have to
draw on its revolver as much as previously expected, and will not
have difficulty meeting its financial covenants.
These ratings were lowered:
-- Corporate family rating to Ba3 from Ba2
-- Probability of default rating to Ba3 from Ba2
-- $250 million senior subordinated notes 2016 to B2 (LGD5, 89%)
from B1 (LGD5, 89%)
-- $269 million senior subordinated notes due 2012 to B2
(LGD5, 89%) from B1 (LGD5, 89%)
-- $350 million senior subordinated notes due 2014 to B2
(LGD5, 89%) from B1 (LGD5, 89%)
Boyd Gaming Corporation wholly owns and operates gaming and
entertainment facilities located in Nevada, Mississippi, Illinois,
Louisiana, and Indiana. The company is also 50% partner in a
joint venture that owns and operates the Borgata Hotel Casino in
Atlantic City, New Jersey. Net revenue for the 12-month period
ended June 30, 2008 was about $1.9 billion.
BRITISH AMERICAN: Ch. 7 Trustee Sells Osceola Property for $3.5MM
-----------------------------------------------------------------
Lake Mary-based Dewan Properties LLC has purchased 122.6 acres of
vacant land in northwest Osceola County, for $3.5 million from
British American Homes LLC's bankruptcy estate, the Orlando
Business Journal reported Monday.
Robert Ewald of Ewald Enterprises Inc. represented the seller,
Leigh Meininger, the court-appointed Chapter 7 trustee, while Boyd
Arp at Brown Harris Stephens in Winter Park was the broker for the
buyer.
The property had been for sale since December of last year, soon
after seven homebuyers forced British American Homes into
involuntary Chapter 11 bankruptcy. The case was subsequently
converted to a Chapter 7 liquidation.
Citing court documents filed with the U.S. Bankruptcy Court for
the Middle District of Florida, the report says the developer
collected about $1 million in deposits for homes in Osceola and
Polk counties but failed to build them.
Based in Orlando, Florida, British American Homes, LLC, develops
commercial and residential properties. Three creditors filed an
involuntary Chapter 11 petition against the developer on Nov. 8,
2007 (Bankr. M.D. Fla. Case No. 07-05628). Asher Rabinowitz,
Esq., at Anderson & Badgley, P.L., represented the petitioners as
counsel. The case was converted to Chapter 7 in December 2007.
C54-1 SKYGARDEN: Court Okays Marc Stern as Bankruptcy Counsel
-------------------------------------------------------------
The Hon. Karen A. Overstreet gave C54-1 Skygarden, LLC, permission
to employ Marc S. Stern as bankruptcy counsel.
Mr. Stern will advise the Debtor with respect to the legal
requirements of the Debtor's duties, represent the Debtor in
matters necessary to formulate a plan pursuant to Chapter 11, and
implement that plan.
The Debtor asked the Court to let the counsel's fees, other than
the initial retainer, be subject to approval by order of the
Court. An initial retainer of $10,000 was paid from funds not
belonging to the Debtor.
Mr. Stern said that he will charge the Debtor $300 per hour.
The Court ruled the Mr. Stern's compensation be set by furhter
court order.
Mr. Stern assured the Court that he doesn't represent any interest
adverse to the trustee, and that he doesn't represent any interest
adverse to the estate.
Snohomish, Washington-based C54-1 Skygarden, LLC, filed for
Chapter 11 protection on Sept. 12, 2008 (Bankr. W. D. D.C. Case
No. 08-15895). Marc S. Stern, Esq., who has an office at Seattle,
Washington, represents the company in its restructuring effort.
The company listed assets of $13,200,000 and debts of $13,211,000.
CALIFORNIA STATE: Boosts Note Sale by $500 Million as Demand Soars
------------------------------------------------------------------
Michael B. Marois of Bloomberg News reports that the State of
California increased to $4.5 billion the amount of short-term
notes it is selling this week to avert a cash shortage after
meeting strong demand for the debt.
State Treasurer Bill Lockyer, according to the report, said
$500 million was added to the $4 billion planned initial sale
after orders were received for almost 95 percent, or $3.8 billion,
of the original amount during two days of the so-called retail
order period. According to the report, that's when the securities
are offered to individual investors; the notes will be marketed to
institutions such as money-market funds tomorrow.
Mr. Lockyer, according to the report, also said he was eliminating
the top yield range of 4.5 percent on notes maturing on June 22.
According to the report, those notes now may pay 4.25 percent,
while notes due May 20, 2009, may offer a yield of 3.75 percent to
4 percent. The final yields will be determined once the
institutional portion of the sale is completed, according to the
report.
The State, according to the report, will use the proceeds to pay
bills until tax revenue arrives later in the year. The sale comes
after the municipal bond market was paralyzed amid a global
financial crisis, according to the report. The State has offered
record high yields to entice buyers, according to the report.
Without the sale, the government might run out of cash by
November, according to the report.
As reported by the Troubled Company Reporter on Oct. 9,
California's Governor Arnold Schwarzenegger told the U.S. federal
government that his state might seek a $7 billion emergency loan
to maintain the state government's day-to-day operations. The
TCR, citing Xinhua News, reports that California State Treasurer
Bill Lockyer had warned that unless the current credit crunch is
solved, the state might exhaust its reserves for public spendings
within a month.
CARBIZ INC: Debenture Holders Convert Securities to Shares
----------------------------------------------------------
CarBiz Inc. disclosed in a Securities and Exchange Commission
filing that on Oct. 3, 2008, holders of certain of its convertible
debentures issued on Oct. 1, 2007, converted an aggregate of
$256,000 of principal and $29,619 of accrued interest due under
the debentures into 5,600,371 shares of the common stock of the
Company.:
-- On Oct. 3, 2008, Brandon Quigley converted the entire
$100,000 of principal and $11,570 of accrued interest due
under the debenture issued to him on Oct. 1, 2007 into
2,187,647 shares.
-- On Oct. 3, 2008, Christopher Bradbury converted the entire
$100,000 of principal and $11,570 of accrued interest due
under the debenture issued to him on Oct. 1, 2007 into
2,187,647 shares.
-- On Oct. 3, 2008, Patricia Clyke converted the entire $2,500
of principal and $289.00 of accrued interest due under the
debenture issued to her on Oct. 1, 2007 into 54,686 shares.
-- On Oct. 3, 2008, Mr. Quigley in Trust converted the entire
$50,000 of principal and $5,785 of accrued interest due
under the debenture issued to him on Oct. 1, 2007 into
1,093,823 shares.
-- On Oct. 3, 2008, Daniel MacNeil converted the entire $3,500
of principal and $405 of accrued interest due under the
debenture issued to him on Oct. 1, 2007 into 76,568 shares.
-- On Oct. 3, 2008, Mr. Quigley exercised two warrants issued
to him on Oct. 1, 2007, one for 33,333 shares for an
exercise price of $333.33 in the aggregate and the other for
333,333 shares for an exercise price of $3,333.33 in the
aggregate.
All holders are members of the board of directors or senior
management of the Company or members of their immediate families.
The shares were issued pursuant to the exemption from registration
provided by the Securities Act.
About CarBiz Inc.
Headquartered in Sarasota, Florida, CarBiz Inc. (OTC BB: CBZFF)
-- http://www.carbiz.com/-- owns and operates a chain of buy-here
pay-here dealerships through its CarBiz Auto Credit division. The
company is also a provider of software, training and consulting
solutions to the buy-here pay-here auto dealers in the United
States. CarBiz's suite of business solutions includes dealer
software products focused on the buy-here pay-here, sub-prime
finance and automotive accounting markets.
Capitalizing on expertise developed over 10 years of providing
software and consulting services to buy-here pay-here businesses
across the United States, CarBiz entered the buy-here pay-here
business in 2004 with a location in Palmetto, Florida. CarBiz has
added two more credit centers since - in Tampa and St. Petersburg
- and recently acquired a large regional chain in the Midwest,
bringing the total number of dealerships to 26 in eight states.
Going Concern Doubt
Aidman, Piser & Company P.A., in Tampa, Florida, expressed
substantial doubt about Carbiz Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Jan. 31, 2008.
CarBiz Inc.'s balance sheet at July 31, 2008, showed total assets
of $31,330,980 and total liabilities of $46,978,021, resulting in
a shareholders' deficit of $15,647,041.
CHESAPEAKE ENERGY: CEO Sells Shares to Meet Margin Calls
--------------------------------------------------------
Ben Casselman at The Wall Street Journal reports that Chesapeake
Energy Corp. said last week that its co-founder and CEO Aubrey
McClendon had been forced to sell his shares to meet margin calls.
According to WSJ, Mr. McClendon had been a major holder in
Chesapeake Energy, owning 33.5 million shares as of Sept. 30,
2008, a stake of more than 5%. In July, those shares were worth
$2.32 billion, but had declined in value to below $888 million
before he started selling them last week.
Mr. McClendon said in a statement that he had frequently purchased
shares of stock using margin loans from brokerages, purchases he
said showed his "complete confidence" in Chesapeake Energy. He
said in the statement, "These involuntary and unexpected sales
were precipitated by the extraordinary circumstances of the world-
wide financial crisis."
WSJ relates that Chesapeake shares have collapsed this year. They
closed at $16.52 on the New York Stock Exchange on Friday, down
43% for the week and well off their 52-week high of $69.40 that
was reached in July. The report says that Chesapeake Energy said
in September that it would reduce its spending and sell assets to
conserve cash. On Friday, says the report, Chesapeake Energy said
it will sell $2.5 billion to $3 billion in assets in the fourth
quarter and will cut spending beyond what was announced in
September. Chesapeake Energy has also drawn down its revolving
line of credit, according to the report. Chesapeake Energy said
it would cut $1.5 billion from its 2009 and 2010 capital budget
and was also making additional cuts to its 2008 spending, after
saying that it would cut $3.2 billion from its capital budget over
the same time and after Mr. McClendon said that the company
wouldn't further reduce capital spending, the report states.
WSJ reports that as of Sept. 30, 2008, Chesapeake Energy had $1.5
billion in cash and said it would have $2.5 billion to
$3 billion by year-end, which is less than the $5 billion to
$6 billion Mr. McClendon predicted.
About Chesapeake Energy Corporation
Based in Oklahoma City, Oklahoma, Chesapeake Energy Corporation
(NYSE: CHK) -- http://www.chkenergy.com/-- produces natural gas
in the U.S. The company's operations are focused on exploratory
and developmental drilling and corporate and property acquisitions
in the Mid-Continent, Fort Worth Barnett Shale, Fayetteville
Shale, Permian Basin, Delaware Basin, South Texas, Texas Gulf
Coast, Ark-La-Tex and Appalachian Basin regions of the United
States.
* * *
As disclosed in the Troubled Company Reporter on May 22, 2008,
Moody's Investors Service assigned Ba3 (LGD 4; 62%) ratings to
Chesapeake Energy's pending $800 million offering of ten year
senior unsecured notes and $1 billion or more offering of thirty
year contingent convertible senior notes. Moody's also moved the
rating outlook up to stable from negative. Moody's also affirmed
CHK's Ba2 corporate family, Baa3 hedge facility, Ba2 probability
of default, SGL-3 liquidity ratings, and existing Ba3 note ratings
but changed the LGD statistics from LGD 4; 61% to LGD 4; 62%.
Standard & Poor's Ratings Services assigned its 'BB' rating to
Chesapeake Energy Corp.'s proposed $800 million senior notes due
2018 and $500 million in contingent senior notes due 2038. The
recovery rating is '4', indicating our expectation of average
(30%-50%) recovery in the event of a payment default. The outlook
remains positive.
CLOVERIE: Moody's Junks Rating on EUR20MM Tranche Notes
-------------------------------------------------------
Moody's Investors Service has downgraded its rating on the notes
issued by Cloverie, Series 2006-008:
Class Description: Euro 20,000,000 Tranche Notes due June 20, 2016
-- Prior Rating: Ba2
-- Prior Rating Date: 8/20/2008
-- Current Rating: Caa1
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc. which filed for protection under Chapter 11
of the U.S. Bankruptcy Code on September 15, 2008 and Fannie Mae
and Freddie Mac, which were placed into the conservatorship of the
U.S. government on September 8, 2008.
COMMERCE PARK: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Commerce Park II, LLC
908 Rolling Hills Drive, Ste. 201
Fayetteville, AR 72703
Tel: (479)251-0707
Bankruptcy Case No.: 08-74138
Type of Business: The Debtor is a real estate leasing company.
Chapter 11 Petition Date: October 14, 2008
Court: Western District of Arkansas (Fayetteville)
Debtor's Counsel: Laurie W. Harrison, Esq.
lwharrison@hotmail.com
Laurie W. Harrison, Attorney At Law
2229 E. Lensfield Pl.
Fayetteville, AR 72701
Tel: (479) 841-9001
Fax: (479) 856-6168
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Built-Well Construction trade debt $280,548
Company
13754 Hwy. 279
Bentonville, AR 72712
Tel: (479) 251-0800
Campbell Electric, Inc. trade debt $261,924
2301 S. School St.
Fayettevile, AR 72701
Tel: (479) 251-0800
Johnson Mechanical trade debt $251,076
Contractors Inc.
513 Prairie Street
Fayetville, AR 72703
Vitro America Inc. trade debt $115,276
Mobley Architects Inc. trade debt $93,839
Benchmark Electric trade debt $66,201
William A. Harrison Company trade debt $48,012
Hutchens Construction trade debt $44,262
National Home Centers trade debt $41,670
Kitchen Distributors Inc. trade debt $39,516
Schwob Building trade debt $28,861
Stone Panels Inc. trade debt $26,319
Mid-West Materials Company trade debt $24,363
Wesche Company trade debt $13,818
Dunk Fire & Security trade debt $12,129
United Rentals trade debt $9,360
Otis Elevator trade debt $9,009
C&C Industrial & Cleaning trade debt $7,709
Services
Flake & Kelley Commercial trade debt $2,861
COPPERFIELD INVESTMENT: Confirmation Hearing Scheduled on Jan. 26
-----------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that the U.S. Bankruptcy
Court for the Eastern District of New York scheduled on a hearing
to consider confirming the Chapter 11 Plan of Copperfield
Investments, LLC, on Jan. 26, 2009. The Court also approved the
Debtor's disclosure statement.
According to the report, David Pauker, the Debtor's Chapter 11
trustee, says the Plan classifies creditors into essentially two
groups:
-- The Ficus and PCG claimants made settlement where together
they will have an approved claim for $92 million, according
to the report. Before the compromise, they each asserts
$140 million in claims, according to the report.
-- The Kiley Entities assert they, and not the Debtor, are the
owners of 83 mortgages, according to the report.
Alternatively, they claim $14.4 million, according to the
report. The Plan says that if the Kiley group ultimately
convinces the Court that their claims are valid, they will
be treated the same as the Ficus and PCG claimants,
according to the report. The Kiley group is contending that
the classification and treatment of their claims is
improper, according to the report.
There are another 30 creditors whose claims together are less than
$200,000, according to the report. These claims are grouped into
a convenience class.
Mr. Pauker took over as trustee nine days after the Debtor filed
for bankruptcy. Ficus (USA), Inc., sought dismissal of the case
or appointment of a trustee, according to the report.
The disclosure statement, according to the report, says total
assets held by the trustee are $91.9 million, leaving $74.8
million available for the two large creditor groups. Assuming the
Kiley creditors have a claim for $14.4 million, they and the other
group would recover 69.8%, according to the report.
Jericho, New York-based Copperfield Investments, LLC, services
real estate mortgages.
The Company filed for Chapter 11 bankruptcy protection on
April 17, 2007 (Bankr. E.D. N.Y. Case No. 07-71327). Roy J.
Lester, Esq., at Lester & Associates, P.C., represents the Debtor
in its restructuring efforts. When it filed for bankruptcy, the
Debtor listed $140,047,500 in total assets and $95,000,000 in
total debts.
COUNTRYWIDE: Moody's Trims Ratings of 56 Loan Tranches
------------------------------------------------------
Moody's Investors Service has downgraded the ratings of 56
tranches from 7 transactions issued by Countrywide. The
collateral backing these transactions consists primarily of first-
lien, adjustable-rate, Alt-A mortgage loans.
Ratings were downgraded, in general, based on higher than
anticipated rates of delinquency, foreclosure, and REO in the
underlying collateral relative to credit enhancement levels.
Also, for certain seasoned deals, step-down, or the possibility
thereof, is likely to cause further erosion of credit support from
subordination.
Complete rating actions are:
Issuer: Alternative Loan Trust 2004-J9
-- Cl. M-2, Downgraded to Baa2 from A2
-- Cl. B, Downgraded to Caa1 from Baa2
Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series
2005-2
-- Cl. 1-A-1, Downgraded to A1 from Aaa
-- Cl. 2-A-1, Downgraded to A1 from Aaa
-- Cl. 3-A-1, Downgraded to A1 from Aaa
Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series
2005-4
-- Cl. 1-A-1, Downgraded to Aa3 from Aaa
-- Cl. 1-A-2, Downgraded to Aa3 from Aaa
-- Cl. 1-A-3, Downgraded to Aa3 from Aaa
-- Cl. 1-A-4, Downgraded to Aa3 from Aaa
-- Cl. 1-A-5, Downgraded to Aa3 from Aaa
-- Cl. 1-A-6, Downgraded to Aa2 from Aaa
-- Cl. 2-A-1, Downgraded to Aa3 from Aaa
-- Cl. 2-A-2, Downgraded to Aa3 from Aaa
-- Cl. 2-A-3, Downgraded to Aa1 from Aaa
-- Cl. 2-A-5, Downgraded to Aa3 from Aaa
-- Cl. 2-A-6, Downgraded to Aa3 from Aaa
-- Cl. 2-A-7, Downgraded to Aa3 from Aaa
-- Cl. 2-A-8, Downgraded to Aa3 from Aaa
-- Cl. PO, Downgraded to Aa3 from Aaa
-- Cl. 1-A-7, Downgraded to A1 from Aa1
-- Cl. 2-A-4, Downgraded to A1 from Aa1
Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series
2006-34
-- Cl. A-1, Downgraded to Baa3 from Aaa
-- Cl. A-2, Downgraded to Baa3 from Aaa
-- Cl. A-3, Downgraded to Baa3 from Aaa
-- Cl. A-4, Downgraded to Baa3 from Aaa
-- Cl. A-6, Downgraded to Baa3 from Aaa
-- Cl. PO, Downgraded to Baa3 from Aaa
-- Cl. A-8, Downgraded to Ba1 from Aa1
-- Cl. A-9, Downgraded to Ba1 from Aa1
Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series
2006-46
-- Cl. A-1, Downgraded to Baa3 from Aaa
-- Cl. A-2, Downgraded to Baa3 from Aaa
-- Cl. A-3, Downgraded to Baa3 from Aaa
-- Cl. A-4, Downgraded to A3 from Aaa
-- Cl. A-5, Downgraded to A3 from Aaa
-- Cl. A-6, Downgraded to A3 from Aaa
-- Cl. A-7, Downgraded to A3 from Aaa
-- Cl. A-8, Downgraded to A3 from Aaa
-- Cl. A-9, Downgraded to Ba1 from Aaa
-- Cl. A-10, Downgraded to Ba1 from Aaa
-- Cl. PO, Downgraded to Ba1 from Aaa
-- Cl. X, Downgraded to A3 from Aaa
Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series
2007-13
-- Cl. A-5, Downgraded to Baa2 from Aaa
-- Cl. A-6, Downgraded to Baa2 from Aaa
-- Cl. A-7, Downgraded to Baa2 from Aaa
-- Cl. PO, Downgraded to Baa2 from Aaa
-- Cl. A-8, Downgraded to Baa3 from Aa1
-- Cl. B-1, Downgraded to Caa1 from B1
-- Cl. B-2, Downgraded to Ca from B2
Issuer: CWALT, Inc. Mortgage Pass-Through Certificates, Series
2007-19
-- Cl. 1-A-3, Downgraded to A2 from Aaa
-- Cl. 1-A-4, Downgraded to A3 from Aaa
-- Cl. 1-A-7, Downgraded to A2 from Aaa
-- Cl. 1-A-8, Downgraded to A1 from Aaa
-- Cl. 1-A-11, Downgraded to A2 from Aaa
-- Cl. 1-A-15, Downgraded to A2 from Aaa
-- Cl. 1-A-22, Downgraded to A1 from Aaa
-- Cl. 1-A-26, Downgraded to A1 from Aaa
CREDIT SUISSE: S&P Cuts Ratings to Low-B on Two Cert. Classes
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes of commercial mortgage pass-through certificates from
Credit Suisse First Boston Mortgage Securities Corp.'s series
2007-TFL1. Concurrently, S&P affirmed its ratings on 12 other
classes from this series.
The downgrades reflect the deteriorating performance of two
assets. The affirmations follow S&P's analysis of the remaining
collateral in this transaction, which, based on its adjusted
property valuations, adequately supports the ratings at their
current credit enhancement levels.
The downgrades are due to these factors:
-- Two of the loans, the JW Marriott Las Vegas Resort & Spa
and the Central Research Park loans (16% of trust balance;
discussed in further detail below) are currently
performing below S&P's initial expectations, while the
remaining eight loans are performing at or above our
expectations.
-- The JW Marriott Las Vegas Resort & Spa loan, the third-
largest loan in the pool, matures on Nov. 9, 2008. This
loan appears on the master servicer's, KeyBank Real Estate
Capital's, watchlist due to its upcoming maturity. The
borrower is working to satisfy the conditions to
exercise
one of its three one-year extension options. The loan,
secured by a 548-room full-service hotel in Las Vegas, has
a trust balance of $150.0 million (12%) and a
$10.0 million nontrust junior participation interest.
This loan has a reported debt service coverage of 1.39x
for the 12 months ended March 31, 2008, and 73% occupancy
as of May 2008. Based on Standard & Poor's review of the
borrower's operating statements for the trailing 12 months
ended May 31, 2008, and its 2008 budget, S&P's adjusted
valuation has declined 30% since issuance. The property
is currently performing below its expectations due to
depressed local market conditions. There has been a
significant decline in local and business-group travelers
at the hotel, which has driven down occupancy, spa income,
and casino revenue.
-- The Central Research Park loan, the ninth-largest loan in
the pool, matures on Jan. 9, 2009, and has three one-year
extension options available. The loan has a trust balance
of $47.9 million (4%) and a $44.1 million nontrust
subordinate B participation interest. In addition, the
borrower's equity interests in the property secure a
$20.0 million mezzanine loan. The loan is secured by
eight suburban office buildings totaling 468,300 sq. ft.,
68,000 sq. ft. of which is datacenter space in Sunnyvale,
California. The loan is on KeyBank's watchlist due to a
low occupancy of 59% as of May 2008. KeyBank reported a
low DSC of 0.81x for the 12 months ended Dec. 31, 2007.
Based on Standard & Poor's review of the borrower's
operating statements for the trailing 12 months
ended
June 30, 2008, and its 2008 budget, our adjusted value has
declined by 33% since issuance. The property is currently
performing below S&P's initial expectations due to lower-
than-expected occupancy. Standard & Poor's will continue
to monitor the progress of the property's leasing
activity.
As of the Sept. 15, 2008, remittance report, pool statistics were:
-- There were 10 loans remaining in the pool, including
senior participation interests in eight floating-rate
interest-only mortgage loans and two floating-rate IO
whole-mortgage loans;
-- There were mortgages on seven full-service and two
boutique hotels, 17 class B+ office/industrial properties,
eight suburban office buildings, and one mixed-use
building in various locations;
-- The payoff of one loan (Renaissance M Street Hotel) has
reduced the principal trust balance by 5% to $1.2 billion
since issuance; and
-- All of the loans are indexed to one-month LIBOR.
Nine loans, including the two aforementioned loans, have near-term
maturities or have matured and extended their maturity
dates; details of these loans are:
-- The Park Central Hotel loan, the second-largest loan in
the pool, matures on Nov. 9, 2008. This loan is on the
master servicer's watchlist due to its pending maturity.
KeyBank stated that the borrower is working to satisfy the
conditions to exercise one of its three one-year extension
options. The loan is secured by a 934-room single hotel
condominium unit, representing 69% of the common interest
in a full-service hotel building in Manhattan. The loan
has a trust balance of $203.0 million (17%) and a whole-
loan balance of $407.0 million. In addition, the
borrower's equity interests in the property secure
$58.0 million in mezzanine financing. KeyBank reported a
1.47x DSC and 97% occupancy for the 12 months ended
June 30, 2008. Standard & Poor's adjusted valuation has
increased 11% since issuance.
-- The Doubletree Guest Suites Times Square loan, the fourth-
largest loan in the pool, matures on Jan. 9, 2009, and has
three one-year extension options available. The loan,
secured by a 43-story, 460-room, full-service hotel in
Manhattan, has a trust and whole-loan balance of
$140.0 million (12%). The borrower's equity interests in
the property secure two mezzanine loans totaling
$130.0 million. DSC was 3.14x for the 12 months ended
March 31, 2008, and occupancy was 95% as of June 2008.
Standard & Poor's adjusted valuation has increased 15%
since issuance.
-- The Renaissance Aruba Beach Resort & Casino loan, the
fifth-largest loan in the pool, matures on Jan. 9, 2009.
KeyBank indicated that the borrower is working to satisfy
the conditions to exercise one of its three one-year
extension options. The loan, secured by a 558-room
(including 131 timeshare rooms), full-service hotel in
Oranjestad, Aruba, has a trust balance of $128.0 million
(11%) and a whole-loan balance of $200.0 million. The
master servicer reported a 1.53x DSC for the 12 months
ended March 31, 2008, and 77% occupancy as of August 2008.
Standard & Poor's adjusted valuation is comparable to its
level at issuance.
-- The Hines Portfolio loan, the sixth-largest loan in the
pool, matures on Nov. 9, 2008. KeyBank placed this loan
on its watchlist due to its impending maturity. The
master servicer indicated that the borrower is working to
satisfy the conditions to exercise one of its three one-
year extension options. The loan is secured by 17 class
B+ office/research and development/industrial properties
totaling 1.6 million sq. ft. in Northern California. The
loan has a trust balance of $125.0 million (10%) and
nontrust junior participation interests totaling
$145.0 million, including a $20.0 million future funding
obligation for renovations and rollover expenses;
$2.4 million has been funded to date. KeyBank reported a
0.87x DSC for the 12 months ended Dec. 31, 2007, and 75%
occupancy as of June 2008. Standard & Poor's adjusted
valuation has declined 6% since issuance due to lower-
than-expected occupancy and higher-than-expected operating
expenses.
-- The SLS at Beverly Hills loan, the seventh-largest loan in
the pool, matures Nov. 9, 2008. This loan is on the
master servicer's watchlist due to its upcoming maturity.
The loan has since been extended one year to Nov. 9, 2009,
and has two one-year extension options remaining. The
loan, secured by a 297-room full-service hotel in Los
Angeles, has a trust balance of $70.0 million (6%) and a
whole-loan balance of $114.1 million. In addition, the
borrower's equity interests in the property secure $24.9
million in mezzanine financing. The property is currently
undergoing a substantial renovation project, and all of
the rooms have been taken offline. The borrower changed
the scope of the renovation budget in mid-2008 to
$116.8 million from $46.9 million. The renovation work is
scheduled to be completed by Nov. 1, 2008.
-- The RECP Hardin Hotel Portfolio loan, the eighth-largest
loan in the pool, matured on Oct. 9, 2008. This loan was
placed on KeyBank's watchlist due to its pending maturity.
The loan has since been extended one year to Oct. 9, 2009,
and has two one-year extension options remaining. The
loan, secured by a 307-room full-service hotel in
Nashville, Tennessee, and two boutique hotels totaling 260
rooms in Manhattan and San Francisco, has a trust balance
of $67.4 million (6%) and a whole-loan balance of
$120.0 million. KeyBank reported a 1.54x DSC and 74%
occupancy as of May 31, 2008. Standard & Poor's adjusted
valuation is comparable to its level at issuance.
-- The Allerton Hotel of Chicago loan, the 10th-largest loan
in the pool, matures Nov. 9, 2008. The loan is on the
master servicer's watchlist due to its upcoming maturity.
KeyBank indicated that the borrower is working to satisfy
the conditions to exercise one of its three one-year
extension options. The loan, secured by a 443-room full-
service hotel in Chicago, has a trust balance of
$40.0 million (3%) and a whole-loan balance of
$69.0 million. In addition, the borrower's equity
interests in the property secured a $10.0 mezzanine loan.
The property underwent a $10.0 million renovation project
that was substantially completed in the second quarter of
2008. DSC and occupancy were 1.16x and 69%, respectively,
as of April 2008. S&P's valuation is comparable to its
level at issuance.
KeyBank reported seven loans totaling $703.3 million (58% of trust
balance) on its watchlist. All of these loans have been discussed
above.
Standard & Poor's will continue to monitor the performance of the
loans in this pool and take rating actions as appropriate.
Ratings Lowered
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certificates series 2007-TFL1
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
K BB+ BBB- 2.63%
L BB BBB- N/A
Ratings Affirmed
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certificates series 2007-TFL1
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 45.40%
A-2 AAA 25.47%
B AA+ 22.13%
C AA 18.97%
D AA- 16.84%
E A+ 14.73%
F A 12.37%
G A- 10.16%
H BBB+ 7.89%
J BBB 5.68%
A-X-1 AAA N/A
A-X-2 AAA N/A
N/A -- Not applicable.
DELTA AIR: Posts $26 Million Net Loss for Quarter Ended Sept. 30
----------------------------------------------------------------
Delta Air Lines reported results for the quarter ended Sept. 30,
2008. Key points include:
* Excluding special items, Delta's net loss for the Sept. 2008,
quarter was $26 million despite a more than $800 million
year-over-year increase in fuel costs related to higher
prices.
* Delta's reported GAAP net loss for the Sept. 2008, quarter
was $50 million.
* Delta and Northwest remain on track to close their merger
during the fourth quarter of 2008.
* As of Sept. 30, 2008, Delta had $3.1 billion in unrestricted
cash, cash equivalents and short-term investments.
Delta reported a pre-tax loss of $50 million for the Sept. 2008,
quarter. Excluding special items, Delta reported a pre-tax loss
of $26 million in the third quarter of 2008 compared to pre-tax
income of $363 million in the third quarter of 2007. The year-
over-year decrease in pre-tax income was driven by higher fuel
prices, partially offset by a 9% increase in operating revenue.
"As the industry deals with turbulent times in the financial
markets and an uncertain demand environment, Delta holds a
strong hand that will allow us to manage through the current
crisis -- strong revenue growth, best-in-class cost structure and
a solid liquidity position," Richard Anderson, Delta's chief
executive officer, said. "In addition, our game-changing merger
with Northwest significantly improves our ability to deal with
the economic problems facing the industry and clearly
differentiates Delta from its peers by creating a premier global
carrier with a more durable financial future. Throughout these
challenging times, the persistence and dedication of Delta
people never wavers. We are committed to building a world class
global airline that provides our customers with safe, reliable
operations and exceptional customer service."
Merger with Northwest
During the Sept. 2008, quarter, Delta and Northwest achieved
many significant milestones on the path toward closing the merger
and completing a seamless integration of the airlines, including:
* Ratification of a joint collective bargaining agreement by
Delta and Northwest pilots. The contract will apply to both
pilot groups upon closing of the Delta-Northwest merger and
run through 2012;
* Acceptance by the Federal Aviation Administration of the
plans the airlines submitted for the transition to a Single
Operating Certificate. This significant milestone lays the
groundwork for a smooth integration of the companies'
operations over the next 18 months;
* Overwhelming approval by both Delta and Northwest
stockholders of the pending merger. Delta stockholders
approved (1) the issuance of 1.25 shares of Delta common
stock
for each outstanding share of Northwest stock to be
distributed upon closing of the merger, and (2) an amendment
to Delta's broad-based employee compensation program that
will allow the company to distribute equity to U.S.-based
employees of the combined company shortly after the merger
closes;
* Amendment of the terms of the Northwest exit facility to
allow both the Delta and Northwest exit facilities to remain
outstanding until the companies are fully integrated; and
* Unconditional clearance from the European Commission of the
proposed merger, with the Commission noting the transaction
would not impede effective competition in Europe or trans-
Atlantic markets.
Liquidity Position
At Sept. 30, 2008, Delta had $3.1 billion in unrestricted cash,
cash equivalents and short-term investments. During the quarter,
Delta borrowed the entire amount of its $1 billion revolving
credit facility to increase financial flexibility as the company
moves toward closing the merger with Northwest.
At the end of the third quarter, the company's unrestricted
liquidity balance included an $818 million investment in the
Primary Fund, after giving effect to the impairment charge
discussed above, which is classified as short-term investments at
Sept. 30. Based on information received from the Primary Fund,
the company expects to receive approximately $300 million in the
initial distribution this month.
In July, Delta amended its Visa/MasterCard credit card processing
agreement to extend the contract period through Dec. 31, 2011.
There continues to be no cash holdback, or reserve, required under
the amended agreement.
Capital expenditures during the Sept. 2008 quarter were
$288 million, including $246 million for investments in aircraft,
parts and modifications.
Selected Balance sheet data at Sept. 30, 2008, showed total
assets of $25.5 billion, total debt and capital leases, including
current maturities of$10.1 billion and total shareowners' equity
of $2.3 billion.
About Delta Air
Based in Atlanta, Georgia, Delta Air Lines Inc. (NYSE: DAL) --
http://www.delta.com/-- is the world's second-largest airline
in terms of passengers carried and the leading U.S. carrier
across the Atlantic, offering daily flights to 328 destinations
in 56 countries on Delta, Song, Delta Shuttle, the Delta
Connection carriers and its worldwide partners. Delta flies to
Argentina, Australia and the United Kingdom, among others.
The company and 18 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall
S. Huebner, Esq., at Davis Polk & Wardwell, represents the Debtors
in their restructuring efforts. Timothy R. Coleman at The
Blackstone Group L.P. provides the Debtors with financial advice.
Daniel H. Golden, Esq., and Lisa G. Beckerman, Esq., at Akin Gump
Strauss Hauer & Feld LLP, provide the Official Committee of
Unsecured Creditors with legal advice. John McKenna, Jr., at
Houlihan Lokey Howard & Zukin Capital and James S. Feltman at
Mesirow Financial Consulting, LLC, serve as the Committee's
financial advisors.
The Debtors filed a chapter 11 plan of reorganization and
disclosure statement explaining that plan on Dec. 19, 2007.
On Jan. 19, 2007, they filed revisions to the plan and disclosure
statement, and submitted further revisions to the plan on Feb. 2,
2007. On Feb. 7, 2007, the Court approved the Debtors' disclosure
statement. In April 25, 2007, the Court confirmed the Debtors'
plan. That plan became effective on April 30, 2007. The Court
entered a final decree closing 17 cases on Sept. 26, 2007.
DIOMED INC: Court Approves Hirsch & Westheimer as Special Counsel
-----------------------------------------------------------------
Diomed Inc. and its debtor-affiliate Diomed Holdings Inc. sought
and obtained permission from the U.S. Bankruptcy Court for the
District of Massachusetts to employ Hirsch & Westheimer PC as
their special counsel.
The professional services that Hirsch will render to the Debtors
will be limited to the serving as local counsel in representing
the Debtors' interests in relation to the bankruptcy proceedings
of Total Vein Solutions, Inc., in the U.S. Bankruptcy Court for
the Southern District of Texas. The TVS bankruptcy was filed on
Jan. 17, 2008, on the eve of a federal district court injunction
hearing where Diomed sought to preliminarily enjoin TVS from
continued infringement of Diomed's asserted patents. Diomed
has asserted a general unsecured claim of $7.8 million against
TVS' bankruptcy estate.
Hirsch and McGuireWoods LLP, the Debtors' general bankruptcy
counsel, will coordinate and allocate the legal services to be
rendered to the Debtors in order to avoid any duplication of
services.
Hirsch's current customary hourly rates for the individuals
expected to participate in these cases range from $190 to $375 for
attorneys and $125 for paralegals. Subject to Court approval,
Hirsch will also receive a retainer of $2,500 that Hirsch will
hold during the pendency of these cases and will apply the
retainer against the Firm's final fee application.
Based in Andover, Massachussetts, Diomed Holdings Inc. (AMEX:
DIO) -- http://www.evlt.com/and http://www.diomedinc.com/--
develops and commercializes minimal and micro-invasive medical
procedures that use its proprietary laser technologies and
disposable products. Diomed's EVLT(R) laser vein ablation
procedure is used in varicose vein treatments. Diomed also
provides photodynamic therapy for use in cancer treatments, and
dental and general surgical applications. Diomed Holdings has
no assets other than its 100% ownership in Diomed Inc., its
operating unit. Diomed Inc. owns 100% of Diomed Ltd. in the
United Kingdom and Diolaser Mexico SA de CV in Mexico. The
company also has an affiliate in Asia through Diomed Hong Kong.
The company and its affiliate, Diomed Inc., filed for Chapter 11
protection on March 14, 2008 (Bankr. D. Mass. Case Nos. 08-40750
and 08-40749). Douglas R. Gooding, Esq., at Choate Hall &
Stewart LLP, is the Debtors local counsel and McGuireWoods LLP
is its general counsel. Goulston & Storrs P.C. is counsel to
the Official Committee of Unsecured Creditors. The company's
schedules show total assets of $19,936,479 and total liabilities
of $14,743,485.
In connection with the Chapter 11 filings, Diomed Ltd. filed for
Administration under the laws of the United Kingdom in the
Cambridge County Court. Steven Mark Law of Ensors was named as
administrator.
DOMINO'S PIZZA: September 7 Balance Sheet Upside-Down by $1.4BB
---------------------------------------------------------------
Domino's Pizza, Inc.'s balance sheet at Sept. 7, 2008, showed
total assets of $440.8 million and total liabilities of
$1.8 billion, resulting in a stockholders' deficit of
$1.4 billion.
Domino's Pizza reported net income for the third quarter ended
Sept. 7, 2008, of $10.1 million compared to net income of
$11.0 million for the same period in the previous year.
The company related that net income was negatively impacted
versus the prior year quarter by continued challenges in the
domestic environment and resulting decreases in domestic same
store sales and supply chain volumes. The International division
continued its strong performance, posting its 59th consecutive
quarter of same store sales growth, up 5.4% during the third
quarter of 2008.
Liquidity
As of Sept. 7, 2008, the company had:
-- $1.7 billion in total debt;
-- $20.1 million of unrestricted cash and cash equivalents;
-- no borrowings under its available variable funding notes;
and
-- letters of credit issued under the VFN of $36.8 million.
About Domino's Pizza
Founded in 1960, Domino's Pizza -- http://www.dominos.com-- is
the recognized world leader in pizza delivery. Domino's is listed
on the NYSE under the symbol "DPZ." Through its primarily
franchised system, Domino's operates a network of 8,671 franchised
and Company-owned stores in the United States and 60 international
markets. The Domino's Pizza brand, named a Megabrand by
Advertising Age magazine, had global retail sales of over
$5.4 billion in 2007, comprised of $3.2 billion domestically and
$2.2 billion internationally.
EPIX PHARMA: Has Until November 10 to Comply with Nasdaq Criteria
-----------------------------------------------------------------
EPIX Pharmaceuticals, Inc. received notice from The NASDAQ Stock
Market dated Oct. 10, 2008, that it is not in compliance with
NASDAQ Marketplace Rule 4450(b)(1)(A), which requires a listed
security to maintain a minimum $50 million market capitalization
for continued listing on The NASDAQ Global Market. This notice
has no immediate effect on the company's listing and its common
stock will continue to trade on The NASDAQ Global Market.
In accordance with NASDAQ Marketplace Rule 4450(e)(4), EPIX will
be provided a period of 30 calendar days, or until Nov. 10, 2008,
to regain compliance with the Rule. If the company maintains a
minimum $50 million market value of its common stock for at
least 10 consecutive business days before Nov. 10, 2008, the
NASDAQ staff will determine if the company complies with the
Rule. If EPIX has not regained compliance with the Rule by
November 10, 2008, the NASDAQ staff will issue a letter
notifying the company that its common stock will be delisted.
At that time, the company may appeal the determination to delist
its common stock to a Listings Qualifications Panel.
Based in Lexington, Massachusetts, EPIX Pharmaceuticals Inc.
(NasdaqGM: EPIX) -- http://www.epixmed.com/-- is a
biopharmaceutical company focused on discovering and developing
novel therapeutics through the use of its proprietary and highly
efficient in silico drug discovery platform. The company has a
pipeline of internally-discovered drug candidates currently in
clinical development to treat diseases of the central nervous
system and lung conditions. EPIX also has collaborations with
leading organizations, including GlaxoSmithKline, Amgen, Cystic
Fibrosis Foundation Therapeutics, and Bayer Schering Pharma AG,
Germany.
The Troubled Company Reporter reported on Aug. 27, 2008, that at
June 30, 2008, the company's balance sheet showed total assets of
$63.6 million and total liabilities of $139.2 million, resulting
in a stockholders' deficit of $75.6 million. Net loss for the
second quarter ended June 30, 2008 was $2.3 million, compared with
$18.0 million for the quarter ended June 30, 2007.
EQUAN REALTH: Case Summary & Three Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Equan Realty Corporation
2209 Adam Clayton Powell, Jr. Boulevard
New York, NY 10027
Bankruptcy Case No.: 08-14017
Chapter 11 Petition Date: October 14, 2008
Court: Southern District of New York (Manhattan)
Judge: Robert D. Drain
Debtor's Counsel: Michael H. Schwartz, Esq.
mhs@mhspc.com
Michael H. Schwartz & Associates, P.C.
One Water Street
White Plains, NY 10601
Tel: (914) 997-0071
Fax: (914) 997-0536
Total Assets: $10,755,997
Total Debts: $5,884,523
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
JPMorgan Chase Legal Dept. overdraft $20,000.00
100 Duffy Avenue, 3H2 balance
Hicksville, NY 11801
IRS Unknown
Holtsville, NY 00501
Michael Heitmann legal services Unknown
1673 Richmond Road, Suite 400
Staten Island, NY 10304
FREMONT GENERAL: Creditors Support Extension of Exclusive Periods
-----------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that the Official
Committee of Unsecured Creditors of Fremont General Corp. told the
U.S. Bankruptcy Court for the Central District of California it
supports an extension of the Debtor's exclusive right to propose a
Chapter 11 plan until Jan. 30, 2009.
The Creditors' Committee opposes more exclusivity, according to
the report, and indicates any payment to stockholder is unlikely.
The Debtor's Official Committee of Equity Security Holders,
according to the report, says there is a potential for some
recovery by shareholders even in a liquidation. The Equity
Committee accusses the Creditors' Committee of simply wanting "a
quick liquidation to ensure a prompt payment," without regard for
protecting the interests of subordinated debt holders and equity,
according to the report.
The Equity committee says at least one party, Kelly Capital, is
talking about sponsoring a reorganization plan, according to the
report.
The Equity Committee, according to the report, wants time to
negotiate a plan and explore whether the Emergency Economic
Stabilization Act of 2008, enacted in October 2008 amid market
turmoil, might ultimately give the Debtor an opportunity to
enhance the value of its portfolio of securities.
About Fremont General
Based in Santa Monica, Calif., Fremont General Corp. (OTC: FMNTQ)
-- http://www.fremontgeneral.com/-- was a financial services
holding company with $8.8 billion in total assets at Sept. 30,
2007. Fremont General ceased being a financial services holding
company on July 25, 2008, when its wholly owned bank subsidiary,
Fremont Reorganizing Corporation (f/k/a Fremont Investment & Loan)
completed the sale of its assets, including all of its 22
branches, and 100% of its $5.2 billion of deposits to
CapitalSource Bank.
Fremont General filed for Chapter 11 protection on June 18, 2008,
(Bankr. C.D. Calif. Case No. 08-13421), after selling subsidiary
Fremont Investment & Loan to CapitalSource Inc. Robert W. Jones,
Esq., and J. Maxwell Tucker, Esq., at Patton Boggs LLP, serve as
counsel to the Debtor. Theodore Stolman, Esq., and Scott H. Yun,
at Stutman Treister & Glatt, are the co-counsel to the Debtor.
The Debtor selected Kurtzman Carson Consultants LLC as its claims
agent.
Lee R. Bogdanoff, Esq., Jonathan S. Shenson, Esq., and Jonathan D.
Petrus, Esq., at Klee, Tuchin, Bogdanoff & Stern LLP, represent
the Official Committee of Unsecured Creditors as counsel.
In its schedules, Fremont General reported $362,227,537 in total
assets and $326,529,372 in total debts. When the Debtor filed for
protection from its creditors, it listed total assets of
$643,197,000 and total debts of $320,630,000.
FRONTIER AIRLINES: Wants to Perform Extension Agreement with FAPA
-----------------------------------------------------------------
Frontier Airlines Holdings, Inc., and Frontier Airline Pilots
Association are parties to a collective bargaining agreement,
which sets forth the rates of pay, benefits and working
conditions for Frontier's pilots.
In June 2008, members of the FAPA ratified certain tentative
agreements, under which they agreed to take temporary wage and
benefit concessions to help the airline as it attempted to, among
other things, secure debtor-in-possession financing. FAPA's
support was particularly overwhelming, with approximately 88% of
the 700 Union-represented pilots voting in favor of the proposal.
The interim concessions granted to Frontier by the pilots under
the Pilot Interim Agreement was set to expire last September 30,
2008.
Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New York
relates that subsequent to reaching the Pilot Interim Agreement,
Frontier and FAPA conducted negotiations toward a final
restructuring agreement to support and facilitate the Debtors'
successful restructuring.
Pending a final agreement, Mr. Schaible notes, FAPA has agreed to
enter into a Pilot Extension Agreement, which, among other
things, extends the wage concessions agreed to under the Pilot
Interim Agreement through December 1, 2008.
On Oct. 10, 2008, the pilots represented by FAPA ratified
Letter of Agreement 20, or the Pilot Extension Agreement.
Subject to the approval of the U.S. Bankruptcy Court for the
Southern District of New York, the Pilot Extension Agreement
will take effect as of Oct. 1, he adds.
Terms of the Pilot Extension Agreement
Specifically, the major terms of the Pilot Extension Agreement
includes:
-- continued wage reductions pursuant to the Pilot Interim
Agreement, under which the rates provided in the Pilot CBA
will, unless otherwise agreed, be reinstated upon the
expiration of the Pilot Extension Agreement.
-- continued suspension of Frontier's matching contributions
to Frontier s 401(k) retirement savings plan as initially
provided for in the Pilot Interim Agreement; and
-- allowance of FAPA's general unsecured non-priority claim
under Section 502 of the Bankruptcy Code for $7,100,000;
-- FAPA's agreement not to file any other claim or cause of
action on account of the Pilot Extension Agreement or the
Pilot Interim Agreement; and
-- FAPA's sole authority and responsibility for determining
the manner of allocation among pilots on account of the
FAPA Claim.
Mr. Schaible clarifies that in their intent to enter into the
Pilot Extension Agreement, the Debtors are not seeking to assume
the Pilot CBA.
Moreover, neither the Court's approval of the Pilot Extension
Agreement will alter the order or priority of any claim under the
Bankruptcy Code, or convert any prepetition or unsecured claim
into a priority claim, secured claim, postpetition claim or
administrative claim, he says.
According to Mr. Schaible, the Pilot Extension Agreement
continues reductions in pay and benefits that will result in
significant labor cost savings to the Debtors over the duration
of the Pilot Extension Agreement.
Importantly, he continues, the Pilot Extension Agreement will
also provide Frontier and FAPA with the time necessary to
continue negotiations to reach a final restructuring agreement.
For these reasons, the Debtors seek the Court's authority to
perform under the Pilot Extension Agreement with FAPA.
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight. It operates jet service carriers
linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, as well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.:
08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts. Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.
(Frontier Airlines Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
FRONTIER AIRLINES: Turns Down Teamsters' Idea of Cost Cutting
-------------------------------------------------------------
Frontier Airlines Holdings, Inc., contends that it cannot accept
the suggestion of the International Brotherhood of Teamsters
Airline Division to reduce the amount of labor and other non-fuel
cost savings that the company seeks, because those savings keep
Frontier's actual performance in line with its business plan.
The Teamsters said that Frontier's proposed rejection of three of
their collective bargaining agreements with the Union eliminates
their Union-represented workers' jobs and pensions, and cuts their
wages.
The Teamsters also argued that the Debtors' proposal to modify
their CBAs violates Section 1113 of the Bankruptcy Code, because
it fails to, among other things:
* disclose "the most complete and reliable" information on
their business plan on the basis of fuel price data;
* consider actual in-house or contractor work performed in
estimating its savings; and
* tackle the Seniority Clause, which governs the elimination
of employees based on seniority and wage scales.
Frontier's Revised 1113 Proposal
Christopher Collins, executive vice president and chief
operations officer at Frontier, relates that, in an effort to
reach a non-litigated settlement with the Teamsters, the Debtors
presented the Union with a revised 1113 Proposal on September 24,
2008:
The Revised 1113 Proposal provides for:
* no withdrawal from the Western Conference of Teamsters
pension fund;
* wage and premium reductions of 10% -- down from 11% -- for
Mechanics and Material Specialists, resulting in annual
cost savings of $1,200,000;
* wage and premium reductions of 6% -- down from 6.3% -- for
Appearance Agents, resulting in annual cost savings of
$132,000; and
* participation in a profit sharing pool of 10% of pre-tax
earnings up to $10,000,000, and 15% on the portion of Pre-
Tax Earnings above $10,000,000 earned during each fiscal
year.
On an annualized basis, the Revised 1113 Proposal saves Frontier
$5,100,000, which is $515,000 less than the original 1113
Proposal, Mr. Collins submits.
The wage and benefit reductions that Frontier seeks in the
Revised Proposal are effectively at, or below, what the Teamsters
already agreed to, in the Interim Agreement dated May 24, 2008,
which expired on Sept. 27, he notes.
Additionally, Mr. Collins admits that Frontier's plan to
outsource its heavy "C" Check maintenance has remained in the
company's Revised 1113 Proposal, because Frontier cannot continue
to pay its heavy maintenance employees their full-time wages and
benefits when it cannot use their services on a consistent basis.
Furthermore, Frontier cannot adjust its business plan every time
the price of oil changes significantly, given its volatility,
Benjamin S. Kaminetzky, Esq., at Davis Polk and Wardwell, in New
York, notes, on behalf of the Debtors.
"[W]hen the price of oil comes down, it makes it more difficult
for Frontier to hit the revenue targets in its business plan,
because other airlines do not raise prices or reduce capacity as
much as predicted, which, in turn, limits Frontier's ability to
raise its own prices," Michael Cox, a managing director and head
of the corporate advisory practice for the Aerospace and Aviation
Division of Seabury Group, explains, in support of the Debtors'
request.
Mr. Kaminetzky adds that the centerpiece of Frontier's 1113
Proposal permits it to outsource heavy maintenance of its
airplanes, which operational flexibility is necessary in light of
the airline's ongoing reduction of its fleet size.
Moreover, the cost savings and efficiencies from outsourcing are
essential for Frontier to right-size the company and achieve its
labor savings targets, says Ronald L. McClellan, vice president
of Maintenance and Engineering at Frontier.
In contrast to Frontier's efforts to reach settlement, however,
the Teamsters has made no meaningful effort to reach any
compromise with the company, Brian M. Mumaugh, Esq., at Holland
and Hart LLP, in Greenwood Village, Colorado, said in a
declaration filed with the Court.
Frontier: Teamsters' Counterproposal
"Will Not Cause Savings"
Subsequent to receiving Frontier's Revised 1113 Proposal, the
Teamsters submitted a counterproposal, which contained no
analysis to show what cost savings, if any, it will provide to
the company, according to Mr. McClellan.
"On its face, the Counterproposal, which permits no outsourcing
and offers extremely limited relief from the furlough rules
contained in the Teamsters' agreements, would essentially allow
Frontier to do something it already has the right to do under the
current CBAs -- furlough Union-represented employees," Mr.
McClellan says.
Mr. McClellan also asserts that under the Teamsters'
Counterproposal, Frontier would be left with a senior work force
composed of the most expensive employees that would prevent the
company from achieving any of the cost-savings associated with
outsourcing.
Kevin Stocker, a senior director at Frontier, also notes that
their Union-represented workers received, under the Teamsters'
Interim Agreement with the Debtors, yearly step increases in wage
rates, contrary to the Union's assertion that they were unfairly
treated historically.
For these reasons, Frontier asks Judge Drain to authorize the
rejection of the CBAs with the Teamsters, and implement the
Revised 1113 Proposal.
Teamsters File Declarations to Support Objection
Matthew Fazakas, president and principal officer of Teamsters
Local Union No. 961, said in a statement filed with the Court
that the Union is "willing to work with [Frontier] to achieve
efficiencies if it downsizes."
"However, [when] we tried to address efficiencies, such as
scheduling vendor work during gaps in C-check, the company's
response was an all inclusive cost proposal to set up an entire
shop which did not take into account that they already have some
of the equipment on site, and there was no cost comparison
analysis presented or discussed by the company," Mr. Fazakas
specifies.
Moreover, James M. Craun, a senior airline analyst for the
Teamsters, avers that the Debtors' C-check analysis exaggerates
an average annual savings of approximately $4,000,000 per year,
which, when adjusted for accurate assumptions, should be minimal.
Parties Stipulate to File Documents Under Seal
In accordance with the Stipulated Protective Order dated
August 21, 2008, the Debtors and the Teamsters agreed that
certain materials -- with respect to the Debtors' motion to
reject its CBAs with the Teamsters -- will be placed under seal,
to govern the disclosures of confidential information.
The Stipulation provides that these documents will be placed
under seal:
(a) the "designated material," consisting of these documents
from Frontier in support of the Motion:
-- portions of the Debtors' reply memorandum;
-- portions of the declaration of Edward M. Christie III,
senior vice president for Finance at Frontier; and
-- portions of the declaration of Michael B. Cox, a
managing director at Seabury Group, which Frontier
retained as its financial advisor and investment
banker; and
(b) any materials reflecting, summarizing, quoting or
referring to the Designated Material submitted by the
Teamsters.
The Teamsters reserves the right to challenge the confidentiality
of the Designated Materials. In addition, the Teamsters will
provide Frontier with other potentially confidential material
before they are publicly filed to avoid their disclosure.
In accordance with the Stipulation, portions of the declarations
submitted to the Court by these parties have been filed under
seal:
* Messrs. Christie and Cox;
* Mr. Fazakas;
* William Wilder, Esq., at Baptiste & Wilder, P.C., in
Washington, D.C., as the Teamsters' counsel; and
* Damian S. Schaible, Esq., at Davis Polk & Wardwell, in New
York, as the Debtors' counsel.
About Frontier Airlines Inc.
Headquartered in Denver, Colorado, Frontier Airlines Inc. --
http://www.frontierairlines.com/-- provides air transportation
for passengers and freight. It operates jet service carriers
linking Denver, Colorado hub to 46 cities coast-to-coast, 8 cities
in Mexico, and 1 city in Canada, as well as provide service from
other non-hub cities, including service from 10 non-hub cities to
Mexico.
The Debtor and its debtor-affiliates filed for Chapter 11
protection on April 10, 2008, (Bankr. S.D. N.Y. Case No.:
08-11297 thru 08-11299.) Benjamin S. Kaminetzky, Esq., and Hugh
R. McCullough, Esq., at Davis Polk & Wardwell, represent the
Debtors in their restructuring efforts. Togul, Segal & Segal
LLP is the Debtors' Conflicts Counsel, Faegre & Benson LLP is
the Debtors' Special Counsel, and Kekst and Company is the
Debtors' Communications Advisors.
(Frontier Airlines Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000)
GATEHOUSE MEDIA: Submits Business Plan to Cure NYSE Non-Compliance
------------------------------------------------------------------
GateHouse Media, Inc. was notified by the New York Stock
Exchange that it is not in compliance with the NYSE's continued
listing standards. The NYSE's notice dated Aug. 21, 2008,
indicated that on Aug. 15, 2008, the company's 30 trading-day
market capitalization of its common stock was approximately
$57.3 million and its 30 trading-day average share price was
$0.99, both of which are below the NYSE's quantitative listing
standards.
The standards require NYSE listed companies to maintain an average
market capitalization of at least $75 million over any consecutive
30 trading-day period and to have an average closing price of any
listed security not fall below $1.00 per share for any consecutive
30 trading-day period.
On Aug. 22, 2008, the company notified the NYSE of its intent to
cure these deficiencies and on Oct. 6, 2008, the company submitted
a business plan demonstrating its ability to achieve compliance
with the continued listing standards. The business plan includes,
but is not limited to, the continued suspension of the company's
dividend, the repayment of amounts outstanding under the company's
revolving credit facility, which was paid in full as of Sept. 30,
2008, building cash for greater liquidity and utilization of
future free cash flow for de-levering. If the NYSE does not
accept such plan, the NYSE will commence suspension and delisting
procedures and will work with the company on an orderly transition
to an alternative market.
If the plan is accepted, under applicable rules and regulations of
the NYSE regarding the Market Capitalization Deficiency and the
Share Price Deficiency, the company must achieve compliance with
the market capitalization listing standard and the share price
standard within 18 months and 6 months from the receipt of the
Notice.
If the company is not compliant by these dates, its common stock
will be subject to suspension and delisting by the NYSE. The
company's common stock remains listed on the NYSE under the
symbol GHS, but has been assigned a ".BC" indicator by the NYSE
to signify that the company is "below compliance" with the NYSE's
continued quantitative listing standards. Although the company
intends to cure the deficiencies and to return to compliance with
the NYSE continued listing requirements, there can be no assurance
that it will be able to do so.
About GateHouse Media Inc.
Headquartered in Fairport, New York, GateHouse Media Inc.
(NYSE:GHS) -- http://www.gatehousemedia.com/-- is a publisher of
locally based print and online media in the United States. The
company\u2019s products include 101 daily newspapers with total
paid circulation of approximately 906,000; 282 weekly newspapers
(published up to three times per week) with total paid circulation
of approximately 606,000 and total free circulation of
approximately 905,000; 132 shoppers (generally advertising-only
publications) with total circulation of approximately 2.3 million;
more than 250 locally focused Websites, which extend its
franchises onto the Internet, and seven yellow page directories
with a distribution of approximately 810,000 that covers a
population of approximately two million people. The company also
produces publications that address specific local market
interests, as recreation, sports, healthcare and real estate.
GateHouse operates in five geographic regions: Northeast, Western,
Northern Midwest, Southern Midwest and Atlantic.
GATEWAY ETHANOL: Court Approves $5.2MM Loan from 1st Lien Lenders
-----------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that U.S. Bankruptcy Court
for the District of Kansas authorized Gateway Ethanol, LLC, to
borrow $5.2 million from its first-lien lender. The Debtor owes
its first-lien lenders $53 million.
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. The Company filed for bankruptcy
protection on October 5, 2008 (Bankr. D. Ks. Case No. 08-22579).
Laurence M. Frazen, Esq., Megan J. Redmond, Esq., and Tammee E.
McVey, Esq., at Bryan Cave, LLP, represent the Debtor 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.
GC GOODYEAR: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: GC Goodyear, L.L.C.
3049 W. Ina Road, Suite 111
Tucson, AZ 85741
Bankruptcy Case No.: 08-14136
Debtor-affiliates filing separate Chapter 11 petitions:
Entity Case No.
------ --------
GC Cooper Road, L.L.C. 08-14139
Type of Business: The Debtors operate a restaurant.
Chapter 11 Petition Date: October 14, 2008
Court: District of Arizona (Tucson)
Judge: Eileen W. Hollowell
Debtor's Counsel: Scott D. Gibson, Esq.
SGibson@gnglaw.com
Gibson, Nakamura & Green, PLLC
2329 N. Tucson Blvd.
Tucson, AZ 85716
Tel: (520) 722-2600
Fax: (520) 722-0400
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.
GENERAL GROWTH: Liquidity Shortfall Cues Fitch's Negative Watch
---------------------------------------------------------------
Fitch Ratings has downgraded and placed on Rating Watch Negative
the Issuer Default Ratings and outstanding debt ratings of General
Growth Properties and its subsidiaries as:
General Growth Properties, Inc.
-- IDR to 'B+' from 'BB'.
GGP Limited Partnership
-- IDR to 'B+' from 'BB';
-- Revolving credit facility to 'B/RR5' from 'BB';
-- Term loan to 'B/RR5' from 'BB';
-- Exchangeable senior notes to 'B/RR5' from 'BB';
-- Perpetual preferred stock (indicative) to 'CCC+/RR6' from
'B+'.
The Rouse Company LP
-- IDR to 'B+' from 'BB';
-- Senior unsecured notes to 'B/RR5' from 'BB'.
Fitch has also downgraded and withdrawn these ratings:
Price Development Company, L.P.:
-- IDR to 'B+' from 'BB+'
-- Senior unsecured notes to 'B' from 'BB+'.
Fitch's actions affect approximately $6.3 billion of outstanding
indebtedness.
The rating actions are reflective of concerns surrounding GGP's
significant liquidity shortfall due to near-term debt maturities.
GGP has over $1 billion and $3 billion of debt maturing in 2008
and 2009, respectively, the majority of which is secured
indebtedness.
Given the current weak state of the commercial real estate debt
capital markets, GGP's ability to refinance this indebtedness is
in doubt, and alternatives to raise capital to repay this
indebtedness will likely be dilutive or reduce the company's
earnings power, negatively affecting coverage metrics. GGP has
limited unencumbered assets as a source of contingent liquidity
and will likely need to sell assets or enter into joint ventures
to generate adequate liquidity to meet these near-term debt
maturities.
The use of secured debt in GGP's consolidated capital structure,
which has resulted in the company encumbering substantially all of
its assets, is limiting flexibility in a more difficult capital
raising environment. Given the ongoing liquidity stress in the
commercial mortgage-backed securities market, Fitch remains
concerned that GGP may face challenges in accessing the secured
debt markets.
Fitch's credit concerns also revolve around certain of GGP's
financial metrics. Due primarily to its utilization of
substantial leverage in acquiring the Rouse Company LP in 2004,
GGP's fixed charge coverage is low and book value-based leverage
is high, but consistent with the 'B' rating category. GGP's
leverage, defined as debt plus preferred stock divided by
undepreciated book capital, stood at 79.1% as of June 30, 2008.
In addition, GGP's risk-adjusted capitalization ratio is only 0.5
times as of June 30, 2008, due to the company's high leverage and
the presence of significant development and joint venture assets.
GGP's operational credit metrics have declined from 2004 levels
largely due to the Rouse acquisition, but have stabilized. For
the 12 months ended June 30, 2008, on a risk-adjusted basis, Fitch
calculates GGP's fixed charge coverage ratio at 1.3x, compared
with 1.4x and 1.5x for calendar years 2007 and 2006, respectively.
The Rouse IDR ranks pari passu with that of GGP due to strong
legal, operational and strategic ties between GGP and Rouse and a
stronger Rouse standalone credit profile relative to that of GGP.
The 'RR5' Recovery Ratings, given default for GGP Limited
Partnership and Rouse's rated securities, are based on Fitch's
continued belief that substantive consolidation of GGP and Rouse
is likely in a liquidation scenario, resulting in Rouse
bondholders being equal in seniority with other GGP unsecured
creditors. Fitch's Recovery Rating analysis assumes a 9%
capitalization rate on unstressed consolidated annualized second
quarter-2008 cash net operating income, 100% recovery of the book
value of investment land, 50% recovery of the book value of
developments in progress, 50% recovery of the book value of
investment in unconsolidated real estate affiliates and modest
recoveries of remaining tangible assets.
This analysis results in estimated recoveries for rated debt
securities in the 11%-to-30% range, or 'RR5' per Fitch's recovery
methodology and a one-notch downgrade relative to GGP and Rouse's
respective IDRs.
In the event substantive consolidation does not occur, Fitch
believes recoveries given default of Rouse's unsecured bonds would
be in excess of 91%, emblematic of an 'RR1' Recovery Rating.
Fitch's rating actions reflect the solid, albeit slowing,
operating performance of GGP's portfolio of over 200 regional
shopping malls in 44 states. The portfolio is diversified by
geographic location and tenant, and also features a smooth, long-
term lease maturity schedule. GGP has generated consistent
comparable property net operating income growth, demonstrated
recently by a 4.5% increase for the six months ended June 30, 2008
over the comparable period ended June 30, 2007. Overall portfolio
occupancy, which was 93.2% as of June 30, 2008, has been above 92%
since GGP's acquisition of Rouse in late 2004.
Resolution of the Negative Rating Watch will be driven by GGP's
ability to refinance, extend or otherwise amend the terms of its
near-term indebtedness to provide the company with additional
liquidity and financial flexibility. Fitch would consider further
downgrades if fixed charge coverage metrics weaken from current
levels or if the earnings power of the company were reduced due to
asset sales. Fitch would consider a Stable Outlook if GGP
successfully addressed its near-term unsecured and secured debt
maturities while maintaining solid fundamentals for its operating
properties.
GGP is a Chicago-based real estate investment trust engaged in
acquiring, developing, renovating and managing regional malls in
major and middle markets throughout the United States. GGP also
has investments in commercial office buildings and community
development projects purchased in connection with the Rouse
acquisition in 2004. As of June 30, 2008, the company owned
interests in over 200 million square feet of properties and had
$33.4 billion in total undepreciated book assets.
GENERAL MOTORS: To Launch Auto Loan Initiative on Friday
--------------------------------------------------------
John D. Stoll at The Wall Street Journal reports that General
Motors Corp. will launch on Friday an initiative dubbed "Financing
that Fits," aimed at letting consumers know they can still secure
credit for a new GM car or truck.
WSJ relates that auto lenders like GMAC LLC have decided to
tighten lending terms. As reported in the Troubled Company
Reporter on Oct. 15, 2008, GMAC's CEO Al de Molina said in an e-
mail to workers that the company has "limited if any access to
funding" for its mortgage and auto-lending units. Mr. de Molina
said that the company may cut auto lending in some international
markets and that it is considering "strategic initiatives." GMAC
said that it is restricting auto lending to buyers with credit
scores of at least 700, who are about 58% of U.S. consumers.
According to WSJ, GM spokesperson John McDonald said that the
campaign will show buyers that there are hundreds of banks, credit
unions, and other lenders who are willing to do auto loans and
leases. The report says that GM will try to do a sizeable chunk
of its lower-cost lending programs through GMAC.
Mr. McDonald read off a list of banks, lenders, and credit unions
participating in the program, although he acknowleged that buyers
may not be doing business "with the lender your used to," WSJ
reports.
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: Appoints James Taylor as Hummer CEO
---------------------------------------------------
General Motors Corp., as part of the ongoing business and
strategic review of its Hummer brand, appointed James E. Taylor as
Hummer's CEO.
Mr. Taylor, formerly a Cadillac general manager, is responsible
for the future strategy and current business of Hummer worldwide.
This move marks a progression in the ongoing strategic review
process and establishes the lead management structure for Hummer
going forward. Martin Walsh, currently general manager of Hummer,
will team with Mr. Taylor on the transition and ongoing dealer
relations, and then will move to another assignment that will be
announced soon.
Mr. Taylor has been Cadillac general manager since 2004, and even
prior to that he was a key architect in Cadillac's design and
technology resurgence. As the global Vehicle Line Executive for
Cadillac, Mr. Taylor led the development of a series of new models
-- beginning with the Cadillac CTS -- that ushered in a new and
distinctive generation of dramatically designed, high performing
vehicles. Mr. Taylor joined GM in 1980 and since has held a
number of business and marketing leadership roles, including those
at Saturn, Adam Opel, Worldwide Purchasing and GM Truck.
Mr. Taylor reports to Mark C. McNabb, North America vice
president, Cadillac/Premium Channel. Mr. McNabb joined GM in 2008
to assume leadership of GM's premium brands, Cadillac, Hummer and
Saab USA.
"By creating a new and more comprehensive leadership position for
Hummer with Jim Taylor as the top executive, we are bolstering the
strategic review process and the brand," said Mark LaNeve, GMNA
vice president of Vehicle Sales, Service and Marketing. "At the
same time, we're sharpening our focus on Cadillac as GM's flagship
brand in the global luxury marketplace under Mark McNabb's
leadership," Mr. LaNeve added.
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.
GMAC COMMERCIAL: Fitch Revises $1.5MM Certs. Rating to 'C/DR6'
--------------------------------------------------------------
Fitch Ratings has revised the Distressed Recovery rating on the
following class of GMAC Commercial Mortgage Securities, Inc.'s
mortgage pass-through certificates, series 2000-C2:
-- $1.5 million class M to 'C/DR6' from 'C/DR5'.
In addition, Fitch has upgraded this class:
-- $19.3 million class E to 'AAA' from 'AA+'; Outlook Stable.
Fitch has also affirmed these classes, and assigned them a Stable
Outlook:
-- $420.4 million class A-2 at 'AAA';
-- Interest only classes X at 'AAA';
-- $31 million class B at 'AAA';
-- $28 million class C at 'AAA';
-- $10.6 million class D at 'AAA';
-- $9.7 million class F at 'AA-'.
Fitch does not rate classes G, H, J, K, L, and O certificates.
Class N has been depleted due to realized losses. Class A-1 has
been paid in full.
Fitch has lowered the DR on class M due to additional expected
losses on the real estate owned asset, a 143,120-square foot
retail property in Champaign, Illinois. Fitch expects that losses
upon liquidation of the asset will have a significant impact on
class M, based on recent property valuation.
The upgrade of class E is due to increased credit enhancement
level as a result of additional defeasance of three loans (8.6%)
and principal paydown of 1.7% since Fitch's last rating action.
The Outlooks reflect the likely directions of the rating changes
over the next one to two years.
As of the September 2008 distribution date, the pool's aggregate
certificate balance has been reduced 27.7% to $569.9 million from
$773.7 million at issuance. There are 106 mortgage loans remaining
in the transaction, 38 (40.1%) of which are defeased.
Fitch has identified 16 loans of concern (11.4%) due to declining
performance, including the REO asset (0.6%). The largest Fitch
loan of concern (1.7%) is secured by five retail centers with a
total of 239,324 SF in various locations in Virginia. The
servicer reported combined year-end 2007 debt service coverage
ratio was 0.91 times, compared to 1.25x at issuance. Per
servicer, the decrease in DSCR was primarily due to the low
occupancy rate at the River Park Shopping Center (66%) in Vinton,
VA as a result of Winn-Dixie vacating its space after its
bankruptcy filing.
The second largest Fitch loan of concern (1.5%) is secured by a
247-unit multifamily property in Parsippany, New Jersey. The
property has historically low DSCR while occupancy has been stable
in the low- to mid-90% range. Per servicer, the DSCR has remained
low since 2001 due to an increase in operating expenses. Servicer
reported YE2007 DSCR was 0.85x, compared to 1.21x at issuance.
Eight non-defeased loans (5.32%) are scheduled to mature in 2009,
including six retail loans (4.3%), one multifamily loan (0.5%) and
one industrial loan (0.5%). The weighted average coupon for these
loans is 8.43%. The weighted average YE2007 DSCR was 1.56x with a
range of 0.05x to 3.04x. The loan with the low DSCR represents
only 0.1% of the pool and is still performing.
GMAC LLC: Sued for "Interfering" in Car Leases Sold to Wells Fargo
------------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that Wells Fargo Bank, NA,
asked the U.S. Bankruptcy Court for the Northern District of
Alabama to enjoin Bill Heard Enterprises, Inc., and its debtor-
affiliates Heard and GMAC, LLC, from encouraging their customers
to repudiate installment contracts and leases on purchasing new
cars because they were now Wells Fargo's customers.
Wells Fargo, according to the report, bought from the Debtors such
contracts and leases. When the Debtors filed for bankruptcy,
Wells Fargo, according to the report, withheld payment on the
contracts it had accepted but not yet paid for, because it
intended to to deduct what it owes the Debtors against what they
owe Wells Fargo.
Wells Fargo told the Court that the Debtors and GMAC started
calling customers and telling them to return cars where Wells
Fargo wasn't paying.
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.
About GMAC LLC
GMAC LLC -- http://www.gmacfs.com/-- formerly General
Motors Acceptance Corporation, is a global, diversified financial
services company that operates in approximately 40 countries in
automotive finance, real estate finance, insurance and other
commercial businesses. GMAC was established in 1919 and employs
approximately 26,700 people worldwide.
GMAC Financial Services is in turn wholly owned by GMAC LLC.
Cerberus Capital Management LP led a group of investors that
bought a 51% stake in GMAC LLC from General Motors Corp. in
December 2006 for $14 billion.
About ResCap
Headquartered in Minneapolis, Minnesota, Residential Capital LLC
-- http://www.rescapholdings.com/-- is the home mortgage unit
of GMAC Financial Services, which is in turn wholly owned by GMAC
LLC.
* * *
As disclosed in the Troubled Company Reporter on June 18, 2008,
Moody's Investors Service assigned ratings of Caa2 and Caa3 to
Residential Capital LLC (ResCap)'s senior secured and junior
secured bonds, respectively. These bonds were issued as part of
ResCap's bond exchange which was completed on June 4, 2008. The
ratings of ResCap's unsecured senior debt and unsecured
subordinate debt were affirmed at Ca and C, respectively. Ratings
are under review for downgrade. Separately the senior unsecured
rating of GMAC LLC was downgraded to B3 from B2 with a negative
outlook.
As disclosed in the Troubled Company Reporter on June 9, 2008,
Fitch Ratings has downgraded Residential Capital LLC's long- and
short-term Issuer Default Ratings to 'D' from 'C' following
completion of the company's distressed debt exchange. Fitch has
also removed ResCap from Rating Watch Negative, where it was
originally placed on May 2.
GREEN VALLEY: Weak Consumer Spending Cues Moody's to Junk Ratings
-----------------------------------------------------------------
Moody's Investors Service lowered Green Valley Ranch, LLC's
corporate family rating and probability default rating to Caa1
from B3. Moody's also lowered the company's first lien term loan
to B3 from B2, and second lien term loan to Caa3 from Caa2. A
negative rating outlook was assigned. This rating action
concludes the review process that was initiated on July 17, 2008.
"The downgrade of GVR's ratings considers that weak consumer
spending trends will continue to negatively impact gaming revenue
in the Las Vegas locals market", stated Keith Foley, Senior Vice
President. As a direct consequence, GVR's revenues and EBITDA
will likely continue their decline, and the company's
debt/EBITDAM, already high at about 7.7 times, will increase
accordingly.
The negative outlook acknowledges the lack of earnings visibility
in the gaming sector, particularly with respect to the Las Vegas
locals gaming market which has experienced substantial comparable
month declines in gaming revenue through August 2008. Although
GVR has no material debt maturities until 2014, no meaningful
financial covenants, and is expected to generate a modest amount
of positive free cash flow, a continuation of double-digit
declines in revenue and EBITDA during the next few quarters could
pressure the company's financial flexibility.
Other than cash flow generated from operations, the company does
not have a meaningful amount of cash in excess of day-to-day
operating requirements, and no longer has access to a committed
bank credit facility to provide alternate liquidity if necessary.
These ratings were lowered:
-- Corporate family rating to Caa1 from B3
-- Probability of default rating to Caa1 from B3
-- $523 million first lien term loan due 2014 to B3 (LGD3, 33%)
from B2 (LGD3, 34%)
-- $250 million second lien term loan due 2014 to Caa3
(LGD5, 86%) from Caa2 (LGD5, 87%)
Green Valley Ranch Gaming, LLC owns and operates the Green Valley
Ranch Resort Spa Casino in Henderson, Nevada. Net revenues for
the 12-month period ended June 30, 2008 were approximately
$264 million.
HCA GENESIS: City Officials Expect Dismissal of Ch. 11 in November
------------------------------------------------------------------
Robert Brauchle of the Watertown Daily Times (New York) reported
that Watertown, N.Y. city officials believe that the U.S.
Bankruptcy Court for the Southern District of New York plans to
dismiss the Mercy of Northern New York's Chapter 11 bankruptcy
petition at a hearing to be held in mid-November, after the
company failed to comply with a 2005 ruling for reorganization.
"The debtor acknowledged that it is in default of plan payments,"
Richard L. Weisz, an Albany attorney for the Unsecured Creditors'
Committee, said in a position paper to the Court. "The amount,
according to my calculation, is almost $4 million to all groups
(the debtor has yet to agree)...the debtor believes that it will
be able to pay at least $850,000 against this debt once the
rebasing money is released."
Under the 2005 reorganization plan, payments for taxes were to be
made in equal weekly installments to an escrow account held by
General Electric Capital Corp., Mercy's major lender. The plan
also provides that general unsecured creditors be paid 20 cents on
the dollar.
"It seems clear that the debtor will not be able to fund its plan
and has stopped making payments as required under the confirmed
plan," Mr. Weisz wrote.
Mimi C. Satter, a Syracuse attorney who represents the Service
Employees International Union Local 1199 Upstate, said Thursday
that the union prefers that the case be dismissed, rather than
converted to liquidation under Chapter 7.
The facility is owned by MGNH Inc., whose sole shareholder is
Anthony Salerno.
Watertown Mayor Jeffrey E. Graham and City Manager Mary M.
Corriveau said that a dismissal of Mercy's Chapter 11 bankruptcy
will permit creditors to recoup funds owed to them by the company.
General Electric Capital Corp., however, wants the Court to
liquidate the facility's assets.
The state Department of Health is also pushing to have the case
dismissed. DOH representative Nancy Hershey Lord wrote to Judge
Cecelia G. Morris, saying than it would prefer to have two nursing
homes "built in the country that can provide 120 to 160 beds
each".
"Continued long term usage of the Mercy of Northern New York
facility, which is an older hospital building, is inconsistent
with the model which would provide the best long term care
services in the area," Ms. Lord wrote.
Suzanne B. Steinau, Mercy's chief executive officer, said that
"Mercy is not going to close any time soon, but its restructuring
has already begun."
Headquartered in Watertown, New York, HCA Genesis, Inc. dba Mercy
of Northern New York operates Health Care complexes. The company
and parent MGNH, Inc. filed separate petitions for chapter 11
protection on Sept. 5, 2003 (Bankr. S.D. N.Y. Lead Case No.
03-37132). When the company filed for protection from its
creditors, it listed $11,547,733 in assets and $14,837,290 in
debts.
HERITAGE WORLD: 2008 Balance Sheet Upside Down
----------------------------------------------
New York-based Sherb & Co., LLP, raised substantial doubt about
the ability of Heritage Worldwide, Inc., to continue as a going
concern after it audited the company's financial statements for
the year ended June 30, 2008. The auditor pointed to the
company's significant losses and working capital deficit.
The company posted a net loss of $5.07 million on total revenues
of $17.40 million for the year ended June 30, 2008, as compared
with a net loss of $2.17 million on total revenues of $15.42
million in the prior year.
At June 30, 2008, the company's cash amounted to $0.28 million and
its working deficit amounted to $3.38 million.
Management Statement
The company had a net loss during fiscal 2008. Furthermore, the
company have two convertible promissory notes amounting to $4.00
million maturing within one year. One of the note holders has
indicated that they are not going to convert their promissory note
of $3.00 million into shares of the company's stock. Such
promissory note matures in March 2009. These conditions raise
substantial doubt about its ability to continue as a going
concern. In October 2008, the company expects to issue 750,000
shares of common stock to satisfy its obligations under
convertible debentures amounting to $1.00 million.
As a result, the company's current operations are not an adequate
source of cash to fund future operations. The company's ability
to continue as a going concern is dependent upon its ability to
obtain the necessary financing to meet its obligations and repay
its liabilities when they become due and to generate profitable
operations in the future. The company plans to continue to
increase its revenues and provide for its capital requirements
through lines of credit, however, there are no firm commitments
from any third party to provide such revenues or financing and the
company cannot assure that it will be successful in obtaining such
commitments as needed. Additionally, the company intend to
negotiate with certain creditors to extend the payment terms
and/or reduce the amount of its obligations to them. There are no
assurances that the company will have sufficient funds to execute
its business plan, pay its obligations as they become due or
generate positive operating results.
Liquidity and Capital Resources
During fiscal 2008, the company provided $0.31 million in cash
flows from operating activities. The company's cash provided by
operating activities was comprised of a net loss amounting to
$5.00 million adjusted for:
-- debt discount of $0.44 million;
-- depreciation and amortization of $0.78 million;
-- fair value of options of $0.09 million;
-- increased provision for doubtful accounts of $0.70
million; and
-- increased provision for returns of $0.11 million.
Additionally, the following variations in operating assets and
liabilities impacted the company's cash used in operating
activity:
-- Decrease in accounts receivable of $1.65 million due to
larger collection efforts implemented in the second
quarter of fiscal 2008; and
-- Increase in inventory of $0.21 million to meet the
anticipated increase in demand of the company's products;
-- Increase in prepaid assets and other current assets of
$0.31 million resulting from increased research tax
credit receivable;
-- Increase in accounts payable and accrued expenses of
$2.13 million due to higher provisions resulting from
adverse adjustments from U.K. litigations.
During fiscal 2008, the company purchased property and equipment
in the amount of $0.38 million. During fiscal 2008, the company
financed its operations, investing activities and the principal
repayment of long-term debt of $0.23 million and capitalized lease
obligations of $0.29 million by securing financing of around $0.74
million in long-term debt and by increasing the use of its lines
of credit by $0.11 milion.
Balance Sheet
At June 30, 2008, the company's balance sheet showed $17.19
million in total assets and $17.46 in total liabilities, resulting
in a $0.83 million stockholders' deficit.
The company's consolidated balance sheet at June 30, 2008, also
showed strained liquidity with $12.78 million in total current
assets available to pay $16.16 in total current liabilities.
A full-text copy of the company's 2008 annual report is available
for free at http://ResearchArchives.com/t/s?33db
About Heritage Worldwide
Heritage Worldwide, Inc. (OTC BB: HWWI) manufactures and
distributes cosmetic implants including pre-filled breast and
other body implants, as well as body support products. HWWI was
incorporated in the State of Delaware in 2001 with headquarters
and a production facility in the Toulon metropolitan area of
southern France, and a distribution facility in Spain.
HWWI products are sold directly and indirectly through independent
distributors and sales representatives to surgeons and clinics
outside the United States. More than 68% of sales are derived
from international operations outside France, where main
operations are conducted.
HERTZ CORP: S&P Cuts Sr. Unsecured Debt Rating to 'B+' From 'BB-'
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior unsecured
debt rating on Hertz Corp. (BB-/Stable/--) to 'B+' from 'BB-'.
The recovery rating on this debt has been revised to '5' from '4',
indicating that lenders can expect modest recovery in the event of
a payment default.
"The revised recovery ratings reflect our expectation that the
current credit markets will result in higher collateralization
requirements for the secured vehicle facilities, leaving less
available for the unsecured lenders," said Standard & Poor's
credit analyst Betsy Snyder. "This increase in collateralization
at a time when Hertz has shifted to a higher percentage of risk
vehicles and the automotive retail market is softening also
suggests that unsecured recoveries would be lower in the event of
a payment default."
The 'BB-' corporate credit rating on Hertz reflects an aggressive
financial profile following its $14 billion leveraged acquisition
in December 2005, and the price-competitive and cyclical nature of
on-airport car rentals and equipment rentals. Ratings also
incorporate the company's position as the largest global car
rental company and the strong cash flow its businesses generate.
Ratings List
Hertz Corp.
Corporate Credit Rating BB-/Stable/--
Ratings Lowered/Revised
To From
-- ----
Hertz Corp.
Senior Unsecured B+ BB-
Recovery Rtg 5 4
HOOP HOLDINGS: Files Plan With Up to 36% for Unsecured Creditors
----------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that the U.S. Bankruptcy
Court for the District of Delaware has scheduled a Nov. 4, 2008
hearing to consider approving a disclosure statement explaining
the Chapter 11 plan of Hoop Retail Stores, LLC, and its debtor-
affiliates. The plan, the report says, proposes to give unsecured
creditors a 25% to 36% return on claims totaling between
$85 million and $91 million.
As reported by the Troubled Company Reporter on May 2, 2008, Hoop
Holdings LLC, a subsidiary of The Children's Place Retail Stores,
Inc., completed the transition of the Disney Store North America
business and related assets to affiliates of Walt Disney. Walt
Disney took back control of 220 store outlets in North America
from Hoop Holdings.
As reported in the TCR on April 9, under the asset purchase
agreement filed with the U.S. Bankruptcy Court in Delaware, the
purchase price for the Disney Store business and assets will be
roughly $50 million to $55 million, payable to Hoop, for the USA
Acquired Assets, subject to adjustment based on inventory levels
and $4 million, payable to accounts to be specified by TCP
Services, for the assignment of its Pasadena, California
headquarters office lease.
The proposed disclosure statement, according to the report, says
that secured creditor Wells Fargo Retail Finance was paid its
$9.3 million claim by the sale. The price, according to the
report, paid by Walt Disney Co. was as much as $65 million,
depending on inventory levels.
About Hoop Holdings
Headquartered in Secausus, New Jersey, Hoop Holdings LLC owns and
operates gift, novelty, and souvenir shops. The company and two
of its affiliates (Hoop Retail Stores, LLC and Hoop Canada
Holdings, Inc.) filed for Chapter 11 protection on March 27, 2008
(Bankr. D. Del. Lead Case No. 08-10544). Daniel J. DeFranceschi,
Esq., at Richards, Layton & Finger, represents the Debtors in
their restructuring efforts. Gibson Dunn & Crutcher LLP serves as
the Debtors' as special counsel. Traxi LLC provides crisis
management services to the Debtors.
The U.S. Trustee for Region 3 has appointed seven members to the
official committee of unsecured creditors. Pepper Hamilton LLP
serves as the Committee's Delaware counsel.
When the Debtors' filed for protection against their creditors,
they listed assets and debts between $100 million to $500 million.
IDEAEDGE INC: Taps BDO Seidman LLC as Independent Accountant
------------------------------------------------------------
IdeaEdge Inc. disclosed in a Securities and Exchange Commission
filing that it has engaged BDO Seidman, LLC as its independent
registered public accounting firm effective Oct. 8, 2008. The
decision to engage BDO was approved by the Company's Board of
Directors which also functions as the audit committee.
The company has not consulted BDO during its two most recent
fiscal years and the interim period prior to engaging BDO.
About IdeaEdge Inc.
Headquartered in San Diego, IdeaEdge Inc. (OTC BB: IDED) develops
gift card programs. The company distributes its gift cards
primarily through major retail channels and online. The company's
flagship gift card program is based on American Idol(TM), a
leading entertainment and consumer merchandise brand in the U.S.
The company will offer a wide range of consumer merchandise with
American Idol(TM) and future brand partners
Going Concern Doubt
Cordovano and Honeck LLP, in Englewood, Colorado, expressed
substantial doubt about IdeaEdge Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the year ended Sept. 30, 2007. The auditing firm
reported that the company has incurred net losses since inception
and has a net capital deficit at Sept. 30, 2007.
The company said that these factors, among others, create a
substantial doubt about the company's ability to continue as a
going concern. The company is dependent upon sufficient future
revenues, additional sales of its securities or obtaining debt
financing to meet its cash requirements. Barring its generation
of revenues in excess of its costs and expenses or the company's
obtaining additional funds from equity or debt financing, it will
not have sufficient cash to continue to fund its operations
through June 30, 2009.
The company posted $748,025 in net losses on $1,817 in revenues
for the three months ended June 30, 2008.
INTERMET CORP: May Employ Broadpoint Capital as Financial Advisor
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has granted
Intermet Corp. and its debtor-affiliates authority to employ
Broadpoint Capital Inc. as their financial advisor, nunc pro tunc
to Aug. 12, 2008.
As the Debtors' financial advisor, Broadpoint will provide
necessary financial advisory services in connection with the
Debtors' Chapter 11 cases, including a restructuring of their
existing obligations or the sale, merger, or other disposition of
all or a portion of the Debtors or their assets.
In support of the Debtors' employment of Broadpoint as their
financial advisors, the Debtors told the Court that Broadpoint's
restructuring group has significant experience in recapitalization
and restructguring transactions, including engagements involving
in- and out-of-court restrcturings, chapter 11 reorganizations,
company, creditor and board advisory services, distressed asset
sales and exchange offers.
Specifically, Broadpoint Capital Inc. will:
a) provide advice and assistance to the Debtors in connection
with analyzing, structuring, negotiating and effecting any
potential or proposed strategy for a restructuring of the
Debtors' existing liabilities, including:
i. solicitation of votes, approvals, or consents giving
effect thereto;
ii. execution of any agreements relating to an offer by any
party to restructure, recapitalize, exchange or acquire
any Existing Obligations;
iii. any change in interest rates, repurchase, settlement or
forgiveness of the Existing Obligations;
iv. conversion of Existing Obligations into equity; and
v. sale or disposition of assets resulting from the direct
purchase, a credit bid, or exchange of debt obligations
for assets by holder(s) of any Existing Obligations or
any similar restructuring involving the Debtors;
b) assist and advise the Debtors in connection with analyzing,
structuring, negotiating and effectuating, and identifying
potential acquirers in connection with the potential sale of
the Debtors or all the Debtors' assets or securities, through
any or substantially all of structure or form of transaction
or series of transactions, including, but not limited to, any
direct or indirect acquisition, sale of assets, merger,
consolidation, joint venture, restructuring, transfer of
securities, or any similar or related transaction or series
of transactions or any combination thereof;
c) Perform additional financial advisory services including,
among others:
i. to the extent the Debtors request and Broadpoint agrees,
or deems appropriate, becoming familiar with, and
analyzing, the business, operations, properties,
financial condition and prospects of the Debtors;
ii. advise the Debtors on the current state of the financial
markets and industries in which the Debtors do business;
iii. assist and advise the Debtors in developing a general
strategy for accomplishing any proposed Transaction(s);
iv. assist and advise the Debtors and its other advisors in
advising the Debtors in evaluating and analyzing any
Transaction(s) on behalf of the Debtors; and
v. render such other services as may from time to time be
agreed upon by the Debtors and Broadpoint, including,
but not limited to, providing expert testimony at
the request of counsel (other than at a plan
confirmation hearing), and other expert and financial
advisory support to any threatened, expected, or
initiated litigation.
As compensation to Broadpoint for its financial advisory services,
the firm will charge the Debtors:
a. A monthly fee of $135,000, payable on execution of the
Letter Agreement and on the first day of each month
thereafter until the earlier of the completion of a
Transaction and the termination of Broadpoint's engagement
pursuant to Section 7 of the Letter Agreement. The
following amounts shall be credited (without duplication)
against any Sale Transaction Fee or Minority Sale
Transaction Fee payable under the Letter Agreement: (i)
$35,000 of each Monthly Fee and (ii) fifty percent (50%) of
the $100,000 balance of each Monthly Fee paid after the
third monthly payment;
b. With respect to advice and assistance in connection with a
possible Sale Transaction:
i. If, whether in connection with the consummation of a
Debt Restrcturing or otherwise, the Debtors consummate
any Sale Transaction involving greater than 40% of the
assets or greater than a 40% interest in the equity
securities of the Debtors, Broadpoint shall be paid a
Sale Transaction Fee based on the Aggregate Transaction
Value as set forth in Schedule B to the Letter
Agreement; provided, however, that the Debtors shall
not be obligated to pay, and Broadpoint shall not earn
or be entitled to receive, a Sale Transaction Fee in
the event the Debtors consummate a Sale Transaction
with (a) any existing equity holder owning greater than
15% of shares or any of such holder's affiiated,
related or associated entities or (b) one or more
secured creditors of the Debtors that credit bid the
value of their secured claim as consideration for the
Sale Transaction;
ii. If, whether in connection with the consummation of a
Debt Restructuring or otherwise, the Debtors consummate
any sale transaction not falling within the definition
of Sale Transaction, and involving less than 40% of the
assets or less than a 40% interest in the equity
securities of the Debtors, the Debtors shall pay
Broadpoint a fee equal to an amount equal to the
percentage ownership of the new investor multiplied by
an amount based on the Aggregate Transaction Value
calculated as set forth in Schedule B to the Letter
Agreement; provided, however, that the Debtors shall
not be obligated to pay, and Broadpoint shall not earn
or be entitled to receive, a Minority Sale Transaction
Fee in the event the Debtors consummate a Minority Sale
Transaction with (a) any existing equity holder owning
greater than 15% of the Debtors' common shares or any of
such holder's affiliated, related or associated entities
or (b) one or more secured creditors of the Debtors that
credit bid the value of their secured claim as
consideration for the Minority Sale Transaction;
iii. Any Sale Transaction Fee or Minority Sale Transaction
Fee shall be payable upon consummation of the
applicable Sale Transaction or Minority Sale
Transaction out of the proceeds of such transaction;
c. Upon consummation of a Debt Restructuring involving the
Debtors' Existing Obligations, Broadpoint shall be entitled
to the Letter Agreement by either the (i) the assumption of
reorganized debtor(s) or the successor entity owning
substantially all of the assets of the Debtors (provided
that the terms of any such assumption are acceptable to
Broadpoint in its sole discretion), or (ii) a cash fee in
the amount of $500,000 (the "Debt Restructuring Fee"). Any
Debt Restructuring Fee earned and paid shall be fully
credited against any Sale Transaction Fee or Minority Sale
Transaction Fee earned in Section 2(b )(i) or Section 2(b)
(ii) of the Letter Agreement, respectively. For the
avoidance of any doubt, if the Letter Agreement is assumed
following the consummation of a Debt Restrcturing
transaction by the reorganized debtor(s) or the Debtors'
successor entity(ies), no Debt Restructuring Fee shall be
payable by the Debtors to Broadpoint.
d. A non-refundable expense deposit (the "Expense Deposit")
equal to $10,000 shall be payable upon execution of
Agreement;
e. In the event that the Debtors request that Broadpoint advise
the Debtors with respect to a consent solicitation that is
not related to or pursued in connection with a Debt
Restructuring, the Debtors and Broadpoint shall mutually
agree upon a reasonable fee for such services;
f. In the event that the Debtors request that Broadpoint advise
the Debtors in connection with analyzing, structuring,
negotiating and effectuating, and identifying potential
investors in, any financing transaction involving the
Debtors pursuant to a rights offering or public or private
offering of securities (whether in the form of debt, equity,
equity-linked or convertible securities), or any other
similar transaction or series of transactions, or any
combination thereof (any such transaction considered in this
paragraph is hereinafter referred to as a "Financing
Transaction"), the Debtors and Broadpoint shall mutually
agree upon a reasonable fee for such services; provided,
however, that analyzing, structuring, negotiating and
effectuating, and identifying potential investors or
lenders, with respect to debtor-in-possession financing or
use of Cash Collateral in connection with any potential
bankruptcy case of the company shall be covered by the scope
of services and fees already agreed to in the Letter
Agreement; and
g. In addition to the fees to be paid to Broadpoint as
provided in Section 2 of the Letter Agreement, without
regard to whether a Transaction is consummated or the
Letter Agreement expires or is terminated, the Debtors
shall pay to, or on behalf of, Broadpoint, promptly as
billed, all reasonable fees, disbursements and out-of-
pocket expenses incurred by Broadpoint in connection with
its services under the Letter Agreement (including, without
limitation, the reasonable fees and disbursements of
Broadpoint's outside legal counsel, travel and lodging
expenses, word processing charges, research expenses,
communication expenses, messenger and duplicating services,
facsimile expenses and other customary expenditures.
Richard F. NeJame, a managing director at Broadpoint Capital, Inc.
assured the Court that the firm does not hold or represent any
interest adverse to the Debtors or their estates, and that the
firm is a "disinterested person" as that term is defined in Sec.
101(14) of the Bankruptcy Code.
About Intermet Corp.
Based in Fort Worth, Texas, Intermet Corp. designs and
manufactures machine precision iron and aluminum castings for the
automotive and industrial markets. The company and its debtor-
affiliates filed for chapter 11 protection on Aug. 12, 2008
(D. Del. Case Nos. 08-11859 to 08-11866 and 08-11868 to 08-11878).
Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Michael E.
Comerford, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New
York, serve as the Debtors' counsel. James E. O'Neill, Esq.,
Laura Davis Jones, Esq. and Timothy P. Cairns, Esq., at Pachulski
Stang Ziehl & Jones LLP, in Wilmington, Delaware, serve as the
Debtors' co-counsel. Kurtzman Carson Consultants LLC serves as
the Debtors' claims, notice and balloting agent. An Official
Committee of Unsecured Creditors has been formed in this case.
When the Debtors filed for protection from their creditors, they
listed assets of between $50 million and $100 million and debts of
between $100 million and $500 million.
This is the Debtors' second bankruptcy filing. Intermet Corp.,
along with its debtor-affiliates, filed for Chapter 11 protection
on Sept. 29, 2004 (Bankr. E.D. Mich. Case Nos. 04-67597 through
04-67614). Salvatore A. Barbatano, Esq., at Foley & Lardner LLP,
represents the Debtors. In their previous bankruptcy filing, they
listed $735,821,000 in total assets and $592,816,000 in total
debts. Intermet Corporation emerged from this first bankruptcy
filing in November 2005.
IRVINGTON SCDO: Moody's Junks Ratings on Four Classes of Notes
--------------------------------------------------------------
Moody's Investors Service has downgraded its ratings of the notes
issued by Irvington SCDO 2004-1 Ltd.:
Class Description: Class A-3L Notes Due March 11, 2010
-- Prior Rating: Ba2
-- Prior Rating Date: August 8, 2008
-- Current Rating: Caa2
Class Description: Class A-3L-1 Notes Due March 11, 2010
-- Prior Rating: Ba2
-- Prior Rating Date: August 8, 2008
-- Current Rating: Caa2
Class Description: Class B-1F Notes Due March 11, 2010
-- Prior Rating: B3
-- Prior Rating Date: August 8, 2008
-- Current Rating: Ca
Class Description: Class B-1L-1 Notes Due March 11, 2010
-- Prior Rating: B3
-- Prior Rating Date: August 8, 2008
-- Current Rating: Ca
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on Sept. 25,
2008 and subsequently virtually all of its assets were sold to
JPMorgan Chase, and Fannie Mae and Freddie Mac, which were placed
into the conservatorship of the U.S. government on September 8,
2008.
JOROM COMPANY: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Jorom Company
P.O. Box 5405
Rockford, IL 61125-0405
Bankruptcy Case No.: 08-73294
Chapter 11 Petition Date: October 14, 2008
Court: Northern District of Illinois (Rockford)
Judge: Manuel Barbosa
Debtor's Counsel: George P. Hampilos, Esq.
georgehamp@aol.com
Schirger, Monteleone, Hampilos
308 West State Street, Suite 210
Rockford, IL 61101
Tel: (815) 962-0044
Fax: (815) 962-6250
Estimated Assets: $1 million to $50 million
Estimated Debts: $500,000 to $1 million
The Debtor did not file a list of 20 largest unsecured creditors.
JPMORGAN CHASE: S&P Junks Rating on Class T Certificates
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of commercial mortgage pass-through certificates from
JPMorgan Chase Commercial Mortgage Securities Trust 2007-LDP12.
Concurrently, S&P affirmed its ratings on 21 other classes from
this series.
The downgrades reflect credit concerns with six of the 22 loans in
the pool that have debt service coverage of less than 1.0x. In
addition, the downgrades reflect anticipated credit support
erosion upon the eventual resolution of one asset with the special
servicer, J.E. Robert Co. Inc.
The affirmations reflect credit enhancement levels that provide
adequate support through various stress scenarios.
Twenty-two loans in the pool, totaling $508.5 million (20%), have
DSCs lower than 1.0x. These loans have an average balance of
$23.1 million and have experienced a weighted average decline in
DSC of 67% since issuance. The loans are secured by a variety of
hotel, retail, office, multifamily, and industrial properties.
Standard & Poor's has credit concerns with six of the 22 loans
(2%). Most of the properties securing the six loans have
experienced a decline in net cash flow due to low occupancies.
The remaining 16 loans have debt service reserves in place or are
secured by properties that have experienced improved occupancy, or
that are undergoing renovation. S&P expects their DSCs to improve
in the future.
The only loan with the special servicer, Baymont Inn, was
transferred on May 15, 2008, due to payment default. The
$5.4 million loan is currently 60-plus days delinquent and is
secured by a two-story, 129-room limited-service hotel in Oxford,
Alabama. JER is currently waiting for approval on a motion of
summary judgment to put a receiver in place at the property and
proceed with foreclosure. The borrower reported a 1.96x DSC and
66% occupancy for the year ended Dec. 31, 2007. At this time, S&P
expect moderate losses upon the eventual resolution of the asset.
As of the Sept. 15, 2008, remittance report, the trust collateral
consisted of 163 loans with an aggregate principal balance of
$2.5 billion, the same as at issuance. The master servicer, Wells
Fargo Bank N.A., reported financial information for 98% of the
loans in the pool. Ninety-seven percent of the servicer-reported
information was full-year 2007 or second-quarter 2008 data. Based
on this information, Standard & Poor's calculated a weighted
average DSC of 1.25x, down from 1.40x at issuance. The current
weighted average DSC includes amortization for loans totaling 29%
of the trust balance that originally had partial interest-only
periods ranging from six to 60 months. With the exception of one
60-plus-day delinquent loan with JER, all of the loans in the
trust are current. To date, the trust has not experienced any
losses.
The top 10 loans have an aggregate principal balance of
$868.5 million (35%). Year-to-date June 30, 2008, financial
information was available for nine of the top 10 loans. Based on
this information, Standard & Poor's calculated a weighted average
DSC of 1.29x, down from 1.49x at issuance. The calculation
includes additional debt service for one of the top 10 loans that
have initial IO periods but did not begin to fully amortize in
2008. Three of the top 10 loans are on the master servicer's
watchlist and are discussed below. Standard & Poor's reviewed the
property inspection reports provided by Wells Fargo for the assets
underlying nine of the top 10 loans. All of the properties were
characterized as "good."
The credit characteristics of the Summit Mall and AT&T-Cleveland
Ohio loans are consistent with those of investment-grade
obligations. S&P's adjusted values for these loans are comparable
to their levels at issuance.
Wells Fargo reported a watchlist of nine loans totaling
$396.5 million (16%), including three of the top 10 loans, which
constitute 56% ($224.0 million) of the loans on the watchlist.
Details are:
-- The largest loan on the watchlist and the third-largest
loan in the pool is the 111 Massachusetts Avenue loan
($90.0 million, 4%), which is secured by a 254,900-sq.-ft.
class A office building in Washington, D.C. Wells Fargo
placed this loan on the watchlist due to a low DSC of
1.07x for the year ended Dec. 31, 2007. Wells Fargo will
remove this loan from its October 2008 watchlist because
the DSC and occupancy for the six months ended June 30,
2008, were 1.27x and 98%, respectively.
-- The fifth-largest loan, Ten Penn Center, has a trust
balance of $69.0 million (3%) and a whole-loan balance of
$87.5 million. The loan, secured by a 27-story, 670,850-
sq.-ft. class A office building in Philadelphia, appears
on the servicer's watchlist because of a low reported DSC
of 0.58x and occupancy of 68% for the six months ended
June 30, 2008. The borrower is actively marketing the
vacant space. A $6.0 million letter of credit is
currently in place to mitigate debt service shortfalls.
-- The eighth-largest loan, 7000 Central Park
($65.0 million, 3%), is secured by an 18-story, 415,300-
sq.-ft. class A office building in Atlanta. This loan
appears on Wells Fargo's watchlist due to a low DSC of
0.86x and 80% occupancy for the six months ended June 30,
2008. The sponsor has provided a master lease for the
term of the loan at a rental rate of $25 per sq. ft. to
bring the occupancy up to 95%. The obligation under the
master lease becomes effective in the event of a default.
The remaining loans are on the watchlist due to declines in DSC
since issuance and/or low occupancy.
Standard & Poor's identified the following six loans secured by
properties that are in areas affected by Hurricane Ike: Waterford
Place Apartments ($16.5 million), Woodwind Village
($12.6 million), Windsong Village ($7.3 million), St. Gregory's
Beach Apartments ($5.0 million), Applewood Village ($4.3 million),
and Plaza Shopping Center ($3.8 million). Wells Fargo indicated
that none of the properties incurred any major damage. Standard &
Poor's was able to confirm that all of the loans have windstorm
insurance.
Standard & Poor's stressed the loans on the watchlist and other
loans with credit issues as part of its analysis. The resultant
credit enhancement levels adequately support the lowered and
affirmed ratings.
Ratings Lowered
JPMorgan Chase Commercial Mortgage Securities Trust 2007-LDP12
Commercial mortgage pass-through certificates
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
P B B+ 2.00%
Q B- B 1.75%
T CCC+ B- 1.63%
Ratings Affirmed
JPMorgan Chase Commercial Mortgage Securities Trust 2007-LDP12
Commercial mortgage pass-through certificates
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 30.05%
A-2 AAA 30.05%
A-3 AAA 30.05%
A-4 AAA 30.05%
A-SB AAA 30.05%
A-1A AAA 30.05%
A-M AAA 20.03%
A-J AAA 12.14%
B AA+ 11.27%
C AA 10.14%
D AA- 9.26%
E A+ 8.76%
F A 7.76%
G A- 6.64%
H BBB+ 5.51%
J BBB 4.38%
K BBB- 3.26%
L BB+ 2.88%
M BB 2.50%
N BB- 2.25%
X AAA N/A
N/A -- Not applicable.
JP MORGAN: Fitch Assigns 'BB' Rating on $26MM Class G Certificates
------------------------------------------------------------------
Fitch Ratings upgraded and assigned Ratings Outlooks to J.P.
Morgan Commercial Mortgage Finance Corp.'s mortgage pass-through
certificates, series 1999-C7, as:
-- $38.1 million class F to 'AA+' from 'AA'; Outlook Positive.
Additionally, Fitch affirmed and assigned Ratings Outlooks to
these classes:
-- Interest-only class X at 'AAA'; Outlook Stable;
-- $0.6 million class C at 'AAA'; Outlook Stable;
-- $52.1 million class D at 'AAA'; Outlook Stable;
-- $12.0 million class E at 'AAA'; Outlook Stable;
-- $26.0 million class G at 'BB'; Outlook Positive;
-- $4.0 million class H at 'BB-'; Outlook Stable.
The $23.4 million class NR certificates are not rated by Fitch.
The class A-1, A-2, and B certificates have paid in full.
The upgrade reflects increased credit enhancement due to scheduled
amortization and loan payoffs since last review of 7.8%. Classes
F and G have been assigned Positive Outlooks due to anticipated
future paydown and increased credit enhancement. The outlooks
reflect likely direction of any rating changes over the next one
to two years.
As of the September 2008 distribution date, the pool's aggregate
balance has been reduced 80.5%, to $156.3 million from $801.4
million at issuance. Three loans (37.4%), including the largest
loan in the pool, have defeased.
There are currently three loans (11.5%) in special servicing. One
asset (4.7%) has been in special servicing since 2003 and real
estate-owned since 2004. The loan is secured by 107,052 square
feet of office space in Ridgeland, MS, a Jackson-area suburb. The
properties consist of two office buildings; one of the buildings
has recently undergone significant repairs. The special servicer
is working to lease up vacant space and is marketing the
properties for sale. Recent valuations of the asset indicate
losses upon liquidation.
The second largest specially serviced asset (4.5%) is secured by a
multifamily property located in Okemos, Michigan. The property is
currently 91% occupied, but has suffered from declining market
rents and an increase in concessions. The property is currently
for sale with losses expected upon liquidation.
Eighteen (79.5%) of the remaining 38 loans in the transaction have
an anticipated repayment date in either 2008 or 2009. These
include the three defeased loans (37.4%). The 35 non-defeased
loans have a year-end 2007 weighted average debt service coverage
ratio of 1.42x and a weighted average interest rate of 7.33%.
KIRK PIGFORD: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Kirk Pigford Construction, Inc.
P.O. Box 599
Wrightsville Beach, NC 28480
Bankruptcy Case No.: 08-07139
Type of Business: The Debtor builds houses.
See: http://www.kirkpigfordconstruction.com/
Chapter 11 Petition Date: October 14, 2008
Court: Eastern District of North Carolina (Wilson)
Judge: J. Rich Leonard
Debtor's Counsel: Trawick H Stubbs, Jr., Esq.
efile@stubbsperdue.com
Stubbs & Perdue, P.A.
P.O. Drawer 1654
New Bern, NC 28563
Tel: (252) 633-2700
Fax: (252) 633-9600
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Probuild East, LLC 230,288
Attn: Manager or Agent
PO Box 3705
Wilmington, NC 28406
Markraft Cabinets, Inc. $145,831
Attn: Manager or Agent
2210 Mercantile Drive
Leland, NC 28451
Norandex $119,426
Attn: Manager or Agent
3000 N. Kerr Ave
Wilmington, NC 28405
Ready Mixed Concrete Co. $101,777
Port City Plumbing Service $92,637
L & B Roofing $41,820
General Shale Brick $38,033
Home Depot $32,619
BB&T Financial, FSB $25,023
Regional Services, Inc. $24,847
S.T. Wooten Corp. $21,473
W.K. Hobbs, Inc. $21,096
Ford Credit Deficiency Claim $19,129
the 2008 Ford
F250
Atlantic Distributers $18,497
Sellers Tile Co., Inc. $17,765
R.W. Moore Equipment $16,177
Company
GMAC 2006 GMC Sierra $30,036
truck VIN#
1GTHK23D16F147778;
secured: $15,000
Welch Drywall & Repair, Inc. $13,967
Gogas $13,846
Godwin Pumps of America $13,556
KMART CORPORATION: Wants to Amend Schedules of Assets and Debts
---------------------------------------------------------------
Kmart Corporation seeks an order (a) in aid of confirmation of
its Plan of Reorganization, and (b) authorizing an amendment to
previously filed schedules.
Within four months of the commencement of its Chapter 11 cases,
Kmart filed with the U.S. Bankruptcy Court for the Northern
District of Illinois their consolidated schedules of assets and
liabilities and statement of financial affairs and their attendant
global notes and statement of limitations, methodology, and
disclaimer regarding the Schedules.
In February 2003, the Court approved the Debtors' Disclosure
Statement with respect to the First Amended Joint Plan of
Reorganization. The Court later confirmed the First Amended Joint
Plan. The Plan became effective on May 6, 2003.
In the midst of its Plan confirmation process, Kmart filed a
lawsuit asserting malpractice against the law firm of Lewis
Brisbois Bisgaard & Smith LLP and certain attorneys of the firm in
a California state court.
Kmart alleged in the Malpractice Action that Lewis Brisbois, which
has been handling a prepetition litigation for Kmart, had breached
its professional, fiduciary and contractual duties and obligations
in the firm's handling of certain insurance-related issues.
Beginning in June 2003, Kmart and Lewis Brisbois entered into a
series of agreements that tolled the statute of limitations period
for Kmart's claims against Lewis Brisbois through November 2007.
Because of the entry into the agreements, Kmart voluntarily
dismissed the original Malpractice Action complaint.
On Jan. 16, 2008, Kmart re-filed the Malpractice Action, alleging
the same causes of action. Kmart amended the complaint and Lewis
Brisbois moved to dismiss the Re-filed Malpractice Action seeking
"demurrers" with the State Court.
Lewis Brisbois argued that Kmart was judicially estopped from
pursuing the Re-filed Malpractice Action because Kmart had never
listed the Malpractice Action on its bankruptcy Schedules. Kmart
responded that the Plan and Confirmation Order clearly provided
for Kmart to retain all "Retained Actions," which unquestionably
included the Re-Filed Malpractice Action.
However, the State Court granted on July 14, 2008, Lewis Brisbois'
demurrer, effectively dismissing the Re-Filed Malpractice Action.
The State Court ruling appeared to denounce an absolute rule: a
petitioner in Chapter 7, 11, or 13 bankruptcy proceedings must
list all of its potential claims on its schedules, or it will be
judicially estopped from bringing the claims in a future action,
says William J. Barrett, Esq., at Barack Ferrazzano Kirschbaum &
Nagelberg LLP, in Chicago, Illinois.
Mr. Barrett says that while the State Court acknowledged that
judicial estoppel might not be appropriate in instances where a
debtor does not act intentionally to defraud a bankruptcy trustee,
it nevertheless imposed the burden upon Kmart to show that
judicial estoppel would not apply. He notes that the State Court
then concluded that Kmart's pleading failed to allege any facts
that would avoid judicial estoppel.
Mr. Barrett notes that the State Court went on to consider whether
a certain paragraph of Kmart's Global Notes to the Schedules and
Statements impacted its conclusion that judicial estoppel would
preclude Kmart from pursuing the Re-Filed Malpractice Action. He
says that while the State Court acknowledged that the Global Notes
had clearly stated that Kmart possessed causes of action against
third parties that it wished to retain and subsequently pursue, it
nevertheless concluded that Kmart should have provided a specific
list of claims/causes of action it wished to pursue, and its
failure to provide a detailed list precluded it post-confirmation
pursuit of those claims/causes of action.
Mr. Barrett contends that the State Court's analysis as it
pertains to the bankruptcy issues is incorrect and Kmart will seek
reconsideration of the issues by the California State Court,
failing the grant of which, it will appeal.
Mr. Barrett points out that the State Court based its reasoning on
what it believed to be a lack of specificity in the Debtors
Schedules and Statements as they pertained to causes of action.
He adds that the State Court apparently did not appreciate that
under the Bankruptcy Rules, Kmart retains the ability to amend its
Schedules and Statements as a matter of course at any time before
the case is closed.
Accordingly, and in an effort to resolve the issue without the
drain on Kmart's estate attendant to future prosecution of Kmart's
appellate rights in the State Court, Kmart amends Schedule B to
its Schedules and Statements to include the Re-Filed Malpractice
Action.
Mr. Barrett tells the Court that while no court authority is
technically required for the amendment, out of an abundance of
caution, Kmart seeks the imprimatur of the Court to effectuate an
amendment. He further contends that because Kmart filed the
original Malpractice Action on the eve of confirmation, it would
have been practically impossible to submit a meaningfully
amendment in the midst of the confirmation process.
"Given that the Malpractice Action was tolled for over four years
beginning shortly after the Confirmation Hearing, amendment of
Schedule B at this time is not untimely," Mr. Barrett says.
About Kmart Corp.
Kmart Corporation is a predecessor operating company of Kmart
Holding. In January 2002, Kmart Corp. and 37 of its U.S.
subsidiaries filed voluntary petitions for reorganization under
Chapter 11 of the federal bankruptcy laws. The Debtors emerged
from bankruptcy on May 6, 2003, pursuant to the terms of an
Amended Joint Plan of Reorganization.
Kmart completed its merger with Sears, Roebuck and Co. on
March 24, 2005.
About Sears Holdings Corporation
Based in Hoffman Estates, Illinois, Sears Holdings Corporation
(NASDAQ: SHLD) -- http://www.searsholdings.com/-- parent of Kmart
Holding Corp. and Sears, Roebuck and Co., is a broadline retailer
with 2,317 full-line and 1,150 specialty retail stores in the
United States operating through Kmart and Sears and 380 full-line
and specialty retail stores in Canada operating through Sears
Canada Inc., a 70%-owned subsidiary. Key proprietary brands
include Kenmore, Craftsman and DieHard, and a broad apparel
offering, including such well-known labels as Lands' End, Jaclyn
Smith and Joe Boxer, as well as the Apostrophe and Covington
brands. It also has Martha Stewart Everyday products, which are
offered exclusively in the U.S. by Kmart and in Canada by Sears
Canada.
* * *
Moody's Investor Service placed Sears Holdings Corporation's
probability of default rating at 'Ba1' in September 2006. The
rating still hold to date with a stable outlook.
LB-UBS COMMERCIAL: S&P Affirms Ratings on 25 Certificate Classes
----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings on 25
classes of commercial mortgage pass-through certificates from LB-
UBS Commercial Mortgage Trust 2007-C7.
The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.
As of the Sept. 17, 2008, remittance report, the collateral pool
consisted of 100 loans with an aggregate trust balance of
$3.169 billion, compared with 100 loans with a balance of
$3.170 billion at issuance. The master servicer, Wachovia Bank
N.A., reported financial information for 73% of the pool. The
terms of the transaction, which closed in November 2007, require
the borrowers to submit annual financial reporting beginning with
the year-end 2008 statements. All of the reported information was
either interim-2008 or year-end 2007 data. Based on this
information, Standard & Poor's calculated a weighted average debt
service coverage of 1.39x, compared with 1.44x at issuance. No
loans in the pool are delinquent or with the special servicer. The
trust has experienced no losses to date.
The top 10 loans have an aggregate outstanding balance of
$2.135 billion and a weighted average DSC of 1.39x, compared with
1.46x at issuance. Wachovia provided an inspection report for one
of the properties securing the top 10 loans. The Miami Center
property, which secures the sixth-largest loan ($170 million, 5%),
was characterized as "good" in the property inspection. Wachovia
indicated that because the transaction closed less than a year
ago, only a limited number of property inspections were available.
The credit characteristics of the following loans were consistent
with those of investment-grade obligations at issuance: Aventura
Mall ($430 million, 14%), Carnegie Hall Tower ($190 million, 6%),
Sears Tower ($50 million, 2%), Walgreens Pueblo ($2.6 million),
Walgreens Tryon ($2.6 million), Walgreens Amity ($2.2 million),
Walgreens Taylor ($2.2 million), and Arvada Office Max
($1.4 million). Standard & Poor's adjusted values for the
underlying properties are comparable to our valuations at
issuance.
The only loan ($16 million) in the pool with a low reported DSC is
also the only loan with an expected low DSC once its initial
interest-only period ends in 11 months. The loan, which S&P views
as a credit concern, is secured by a multifamily property in
Jacksonville, Florida. The reported DSC had declined to 0.89x as
of year-end 2007, and the projected DSC is expected to decline
further, to 0.66x, once the loan's IO period ends. The decline in
operating performance is primarily due to increased expenses at
the property. There are debt service reserves in place to
mitigate the low DSC.
Wachovia reported a watchlist of four loans ($452 million, 14%).
The Innkeepers Portfolio loan ($412.7 million, 13%) is the largest
exposure on the watchlist and the second-largest exposure in the
pool. The exposure consists of 45 cross-collateralized and cross-
defaulted extended-stay and limited-service hotels in 13 states
totaling 5,683 rooms. The loan is on the watchlist because of a
low reported DSC of 1.13x for year-end 2007. The properties'
current performance is consistent with S&P's expectations at
issuance.
Standard & Poor's identified five properties in areas affected by
Hurricane Ike: Meyerland Plaza in Houston, Texas ($92.7 million,
3%); Rosenberg Shopping Center in Rosenberg, Texas
($10.1 million); The Villas Apartments in Houston, Texas
($5.8 million); Meyerland Commons in Houston, Texas
($2.8 million); and Cedar Bluff Apartments in Pasadena, Texas
($2.6 million). The master servicer notified S&P that Meyerland
Plaza and Cedar Bluff Apartments sustained some minor damage,
while Rosenberg Shopping Center and Meyerland Commons sustained no
damage. Wachovia could not confirm whether The Villas Apartments
sustained any damage. Standard & Poor's will continue to
evaluate information on these loans as it becomes available.
Standard & Poor's stressed the loans on the watchlist and the
other loans with credit issues as part of its analysis. The
resultant credit enhancement levels support the affirmed ratings.
Ratings Affirmed
LB-UBS Commercial Mortgage Trust 2007-C7
Commercial mortgage pass-through certificates
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 30.01%
A-2 AAA 30.01%
A-AB AAA 30.01%
A-3 AAA 30.01%
A-1A AAA 30.01%
A-M AAA 20.01%
A-J AAA 11.50%
B AA+ 10.00%
C AA 8.88%
D AA- 8.13%
E A+ 7.25%
F A 6.75%
G A- 5.75%
H BBB+ 4.88%
J BBB 4.13%
K BBB- 3.25%
L BB+ 2.63%
M BB 2.25%
N BB- 1.88%
P B+ 1.75%
Q B 1.63%
S B- 1.50%
X-W AAA N/A
X-CP AAA N/A
X-CL AAA N/A
N/A -- Not applicable.
LEAR CORPORATION: Moody's Holds 'B2' Corp. Family Rating
--------------------------------------------------------
Moody's Investors Service affirmed the B2 corporate family and
probability of default ratings of Lear Corporation, but lowered
the company's Speculative Grade Liquidity Rating to SGL-3 from
SGL-2. In a related action, Lear's outlook was changed to
negative.
The rating action is based on the company's recent announcement
that it has further lowered its 2008 earnings guidance as a result
of deteriorating and volatile industry and general economic
conditions. Lear reduced its full-year 2008 sales outlook from
$15 billion to approximately $14 billion and now sees its core
operating earnings down approximately 20% from its previous
guidance of $550 million to $600 million issued on July 29, 2008.
While Lear continues to anticipate free cash flow to be positive,
Moody's believes it will be meaningfully lower than the
$150 million expectation in the company's previous guidance.
Moody's expects the weakening automotive production environment to
adversely impact Lear's operating metrics and could constrain the
magnitude of cushion under the financial covenants in the
company's bank credit facility over the next twelve months.
The negative outlook considers that while the company currently
maintains good credit metrics for the assigned rating, these
metrics will likely moderate due to the severe erosion in industry
fundamentals over the near-term. Lear's revised guidance reflects
declining North American vehicle sales and production, the shift
in product mix to smaller passenger vehicles in the U.S., and the
lower automotive OEM production in Europe.
The outlook also considers that while Lear has successfully
implemented restructuring programs in the past, the current
industry environment continues to evolve, posing additional
execution risk.
Developments that could lead to a stabilized outlook include
stabilization of industry conditions, OEM market shares in North
America, and restructuring actions at Lear, resulting in margins
which would result in debt/EBITDA sustained below 4.5 times, or
EBIT/Interest coverage sustained at 2 times.
Developments that could lead to lower ratings include recurring
negative free cash flow, deterioration in margins leading to
debt/EBITDA sustained above 6 times, or EBIT/Interest coverage
sustained below 1.3 times.
Lear's Speculative Grade Liquidity rating of SGL-3 indicates
adequate liquidity over the next twelve months. At June 30, 2008,
Lear's principal liquidity sources included cash balances of
approximately $624 million, with about one-third of this is
located domestically, and about another one-third is available
internationally. Moody's expects Lear's ability to generate
positive free cash flow over the next twelve months to be
challenged by the current industry environment.
The company's liquidity profile includes a Euro 315 million
factoring facility which expires in April 2011 and a $1.29 billion
revolving credit facility. Approximately $822 million of the
revolving credit facility matures in January 2012; while
approximately $468 million is due in March 2010. These facilities
were undrawn at June 30, 2008 with $61 million of letters of
credit outstanding. Lear currently has ample room under the
credit facility's covenants with leverage and interest ratios of
2.1 times and 4.8 times compared to the covenant thresholds of 3.5
times and 2.75 times, respectively.
However, the combination of current industry OEM production
pressures, which are expected to continue into 2009, and the
tightening of these covenants over the near-term are expected to
reduce the company's current covenant cushions. The bank debt is
secured by the capital stock of all the company's domestic
subsidiaries and a portion of the first tier foreign subsidiaries,
and certain domestic assets subject to the 10% lien limitation
within the company's bond indentures, above these levels
collateral must be shared with the bonds. Alternate liquidity is
further limited by the terms of the bank debt.
Ratings Lowered:
-- Speculative Grade Liquidity Rating, to SGL-3 from SGL-2
Ratings Affirmed:
-- Corporate Family Rating, B2
-- Probability of Default, B2
-- Senior Secured Term Loan, B1 (LGD3, 42%)
-- Senior Unsecured Notes, B3 (LGD4, 58%)
Lear Corporation, headquartered in Southfield, Michigan, is
focused on providing complete seat systems, electrical
distribution systems and various electronic products to major
automotive manufacturers across the world. The company had
revenue of $16.0 billion in 2007 and employed approximately 91,000
employees in 34 countries. Following the disposition of its
interior business, Lear expects its ongoing revenues to
approximate $14.0 billion.
LIFEQUEST WORLD: Carver Moquist Expresses Going Concern Doubt
-------------------------------------------------------------
Minneapolis, Minn.-based Carver Moquist & O'Connor, LLC, raised
substantial doubt about the ability of LifeQuest World Corporation
to continue as a going concern after it audited the company's
financial statements for the year ended May 31, 2008. The auditor
pointed to the company's recurring losses from operations and its
working capital deficit.
The company has sustained substantial losses and has a significant
working capital deficit. The company intends to generate positive
cash flows from operations through increased sales utilizing the
network of distributors in place, from financing activities such
as issuing additional stock through private placement, and
obtaining necessary capital through additional advances from the
company's principal stockholder. However, there can be no
assurance the company will be able to obtain additional capital
from private placements or advances from stockholders in the
future. The company has no other committed sources or
arrangements for additional financing.
The company posted a net loss of $1,457,068 on total revenues of
$977,469 for the year ended May 31, 2008, as compared with a net
loss of $1,375,970 on total revenues of $1,046,299 in the prior
year.
At May 31, 2008, the company's balance sheet showed $2,718,249 in
total assets, $1,586,187 in total liabilities, and $1,132,062 in
total stockholders' equity.
The company's consolidated balance sheet at May 31, 2008, showed
strained liquidity with $316,781 in total current assets available
to pay $1,586,187 in total current liabilities.
A full-text copy of the company's 2008 annual report is available
for free at http://ResearchArchives.com/t/s?33da
About LifeQuest World
Las Vegas, Nev.-based Lifequest World Corp. (LQWC:OTC BB) --
http://www.jurak.com-- develops and distributes dietary herbal
supplement products. Its primary product includes the 'JC Tonic,
The Youth Solution', which is an herbal supplement blend of 31
ingredients comprising 18 medicinal tonic herbs and 6 vital
minerals. The company distributes its dietary herbal supplement
products through a network of independent distributors. Lifequest
World Corporation was founded in 1997. It was formerly known as
Jurak Corporation World Wide, Inc., and changed its name to
PhytoLabs, Inc., in March 2007. Further, the company changed its
name to Lifequest World Corporation in August 2007.
LIQUIDMETAL TECH: Defaults on Convertible Subor. Notes Due 2010
---------------------------------------------------------------
Larry Buffington, president and chief executive officer of
Liquidmetal Technologies Inc., said the company defaulted on its
obligations under the 8% convertible subordinated notes due
January 2010, when it failed to pay the aggregate amount of
$582,603 on Sept. 30, 2008, from the commencement of monthly
amortization payments equal to 1/32 of its original amount under
the notes.
Mr. Buffirngto said that the company did not have sufficient fund
to make the payment.
Accordingly, the noteholders are entitled to accelerate all
principal and interest under the notes. As of October 4, 2008,
there is an aggregate amount of $19,081,407 outstanding principal
and accrued but unpaid interest under the notes. Holders of
$2,264,244 in the aggregate principal amount of notes have
delivered default notices to the company accelerating the notes.
The company plans to respond by seeking to amend the terms of
certain notes and sell certain of its assets to fund payments
under the notes, Mr. Buffington said.
The company's condensed consolidated balance sheets at June 30,
2008, showed $18,148,000 in total assets and $32,688,000 in total
liabilities resulting in a $15,149,000 stockholders' deficit. The
company reported $428,000 net income on revenue of $5,5669 for the
three months ended June 30, 2008, compared to $3,016,000 net loss
on revenue of $8,331,000 for the same period a year ago.
A full-text copy of the company's regulatory filing is available
for free at http://ResearchArchives.com/t/s?33e1
Going Concern Doubt
As reported in the Troubled Company Reporter on May 5, 2008,
Choi, Kim & Park LLP, in Los Angeles, expressed substantial doubt
about Liquidmetal Technologies Inc.'s ability to continue as a
going concern after auditing the company's consolidated financial
statements for the years ended Dec. 31, 2007, and 2006. The
auditing firm pointed to the company's significant operating
losses and working capital deficit.
About Liquidmetal
Based in Rancho Santa Margarita, Calif., Liquidmetal Technologies
Inc. (OTC BB: LQMT) -- http://www.liquidmetal.com/-- together
with its subsidiaries, develops, manufactures, and sells products
and components made from bulk amorphous alloys worldwide. It
operates in two segments, Liquidmetal Alloy Industrial Coatings
and Bulk Liquidmetal Alloys.
LIQUOR BARN: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Liquor Barn, Inc.
2627 Bechelli Lane
Redding, CA 96002
Bankruptcy Case No.: 08-34725
Type of Business: The Debtor sells alcoholic drinks.
Chapter 11 Petition Date: October 14, 2008
Court: Eastern District of California (Sacramento)
Judge: Robert S. Bardwil
Debtor's Counsel: Thomas P. Griffin, Jr., Esq.
Hefner Stark & Marois, LLP
2150 River Plaza Dr #450
Sacramento, CA 95833-3883
Tel: (916) 925-6620
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/califeb08-34725.pdf
MAJESTIC HOLDCO: Moody's Cuts Corp. Family Rating to Ca from Caa2
-----------------------------------------------------------------
Moody's Investors Service lowered Majestic HoldCo, LLC and The
Majestic Star Casino, LLC's ratings in response to the company's
announcement that it does not intend to make the October 15, 2008
interest payments on its 9-1/2% senior secured notes and 9-3/4%
senior unsecured notes. The indentures governing the notes
provide for a 30-day grace period to cure such payment defaults.
This rating action concludes the review process that was initiated
on April 29, 2008. The rating outlook is negative.
Ratings lowered:
Majestic HoldCo, LLC:
-- Corporate family rating to Ca from Caa2
-- Probability of default rating to Ca from Caa2
-- Senior Secured Discount Notes to C (LGD6, 95%) from Ca
(LGD6, 95%)
The Majestic Star Casino, LLC:
-- Senior Secured Notes due 2010 to Caa3 (LGD3, 36%) from Caa1
(LGD3, 36%)
-- Senior Unsecured Notes due 2011 to C (LGD5, 81%) from Caa3
(LGD5, 81%)
The negative rating outlook considers that although Majestic has a
30-day grace period in which to make interest payments on its
senior secured and senior unsecured notes before an event of
default would occur under the indentures, the company has stated
that it does not intend to make the October 15, 2008 interest
payments. The negative outlook also recognizes that while
Majestic is actively working with an outside consulting firm in
evaluating financial and strategic alternatives aimed at
addressing the company's deteriorating operating results and
financial position, there is no assurance that it will
successfully achieve any such alternative in the near term.
The Majestic Star Casino, LLC directly and indirectly owns and
operates riverboat casinos in Gary, Indiana; Tunica, Mississippi;
and Black Hawk, Colorado. Majestic HoldCo, LLC owns 100% of The
Majestic Star Casino, LLC. Consolidated net revenue for the
period ended June 30, 2008 was about $348 million.
MAJESTIC STAR: Warns of Inability to Pay Interest on Senior Notes
-----------------------------------------------------------------
The Majestic Star Casino, LLC disclosed in a regulatory filing on
Oct. 14 that it does not intend to make the October 15, 2008
interest payments of $24.0 million in aggregate with respect to
the Companyÿs 9 1/2 % senior secured notes and 9 3/4 % senior
unsecured notes and, together with the Secured Notes. The
indentures governing the Notes provide for a 30-day grace period
to cure such payment defaults. The company said if the interest
payments are not made by the end of the grace period, the trustee
or a specified percentage of holders of the Notes have the right
to accelerate the maturity date of the respective Notes, which
would cause the respective Notes to be immediately due and payable
and could result in all of the Companyÿs indebtedness becoming
immediately due and payable. As of June 30, 2008, the Company had
$572.8 million of long-term indebtedness outstanding. Further,
any such acceleration would permit the lenders under the Company's
senior secured credit facility and the holders of the Secured
Notes to foreclose on substantially all of the Company's current
and future assets, which secure such indebtedness.
In addition, until such time as no interest payment default
exists, the Company is (i) required to pay an additional 1% per
annum in excess of the applicable interest rates on the Notes on
the overdue installments of interest and (ii) restricted from
taking certain actions as specified in the covenants in the
indentures governing the respective Notes, including making
certain payments and investments and incurring certain
indebtedness.
Engagement of Financial Advisor
On August 7, 2008, the Company engaged XRoads Solutions Group, LLC
as its financial advisor to assist in the evaluation of a broad
range of financial and strategic alternatives aimed at addressing
trends in the Companyÿs operating results and financial position.
There can be no assurance that this process will result in any
specific transaction that achieves the aforementioned objectives,
or as to the timing or terms of any such transaction. The Company
does not expect to disclose further developments regarding its
exploration of financial and strategic alternatives until such
review has been terminated or the Board has approved a specific
transaction or alternative.
Standard & Poor's had said there may have been a loan-covenant
violation in the September quarter resulting from a 20 percent
revenue decline at the Indiana property that represents 70 percent
of revenue. Standard & Poor's said liquidity is "extremely
limited."
About Majestic Star
Headquartered in Las Vegas, Nevada, Majestic Star Casino LLC --
http://www.majesticstar.com/-- and its separate and distinct
subsidiary limited liability companies and one corporation own and
operate two riverboat gaming facilities and a dockside pavilion
known as the Buffington Harbor complex located in Gary, Ind., and
two Fitzgeralds brand casino-hotels located in Tunica County,
Miss. and Black Hawk, Colorado (casino only).
The Majestic Star Casino LLC's balance sheets at June 30, 2008,
showed total assets of $505.3 million and total liabilities of
$690.1 million, resulting in a member's deficit of roughly
$184.7 million.
The company released financial results for the three and six
months ended June 30, 2008.
The company incurred a net loss of $8.2 million for the three
months ended June 30, 2008 compared to a net loss of $3.9 million
for 2007.
* * *
As reported in the Troubled Company Reporter on May 1, 2008,
Moody's Investors Service placed the ratings of Majestic Star
Casino LLC on review for possible downgrade.
Ratings placed on review for possible downgrade include Majestic
Star Casino LLC's $300 million senior secured notes due 2010
currently rated at 'B2', and its $200 million senior secured notes
due 2011 currently rated at 'Caa1'.
MCCLATCHY COMPANY: Bestinver Gestion Discloses 17.12% Equity Stake
------------------------------------------------------------------
Bestinver Gestion S.A., SGIIC disclosed in a Securities and
Exchange Commission filing that it may be deemed to beneficially
own 9,776,396 shares of The McClatchy Company's common stock,
representing 17.12% of the shares issued and outstanding.
Headquartered in Sacramento, California, The McClatchy Company
(NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest
newspaper company in the United States, with 30 daily newspapers,
approximately 50 non-dailies, and direct marketing and direct mail
operations. McClatchy also operates leading local websites in
each of its markets. McClatchy-owned newspapers include The Miami
Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The
Kansas City Star, the Charlotte Observer, and The (Raleigh) News &
Observer.
McClatchy also owns a portfolio of premium digital assets,
including 14.4% of CareerBuilder, an online job site, and 25.6% of
Classified Ventures, a newspaper industry partnership that offers
the auto website, cars.com, and the rental site, apartments.com.
At June 29, 2008, the company's consolidated balance sheet showed
$3.7 billion in total assets, $3.3 billion in total liabilities,
and $382.1 million in total stockholders' equity.
* * *
As reported by the Troubled Company Reporter on Sept. 19, Moody's
Investors Service downgraded The McClatchy Company's Corporate
Family and Probability of Default ratings to B2 from Ba3, the
ratings on the senior unsecured notes to Caa1 from B1, and the
rating on the guaranteed bank facility to Ba2 from Ba1. The
rating outlook is negative. The downgrade reflects Moody's
expectation that ongoing significant declines in advertising
revenue will continue to pressure EBITDA -- leading to an increase
in leverage and heightened risk of a credit facility covenant
violation. Moody's anticipates McClatchy's free cash flow
generation and the modest bank leverage will allow the company to
obtain an amendment if necessary, but an increase in the interest
rate spread and tighter non-financial covenants are likely to
result, which would reduce financial flexibility.
The TCR also said The McClatchy Co. will be laying off about 1,150
employees or 10% of its workforce; and cutting its dividend by
50%.
The TCR, citing a Dow Jones report, said McClatchy previously
fired about 1,400 workers to save $70 million yearly and had cut
about 13% of its workforce between the end of 2006 and April 2007.
On July 16, 2008, the TCR reported that Douglas McIntyre of 24/7
Wall Street said McClatchy could hit debt service problems that
could force the company to sell properties or file for Chapter 11
protection. According to the report, McClatchy is one of the
companies that are at high risk of not making it another year due
to the big debt loads it took in buying newspaper properties and
seeing operating income chopped by falling sales.
MERRILL LYNCH: Fitch Holds Low-B Ratings & Assigns Stable Outlooks
------------------------------------------------------------------
Fitch Ratings has upgraded and assigned Outlooks to four classes
of Merrill Lynch Mortgage Trust commercial mortgage securities,
series 2004-MKB1 as:
-- $11.0 million class C to 'AAA' from 'AA'; Outlook Stable;
-- $25.7 million class D to 'AA' from 'A'; Outlook Stable;
-- $11.0 million class E to 'A+' from 'A-'; Outlook Stable;
-- $13.5 million class F to 'A-' from 'BBB+'; Outlook Stable.
In addition, Fitch affirmed and assigns Outlooks to these classes:
-- $240.6 million class A-2 at 'AAA'; Outlook Stable;
-- $65 million class A-3 at 'AAA'; Outlook Stable;
-- $169.7 million class A-4 at 'AAA'; Outlook Stable;
-- $147.0 million class A-1A at 'AAA'; Outlook Stable;
-- Interest only class XC at 'AAA'; Outlook Stable;
-- Interest only class XP at 'AAA'; Outlook Stable;
-- $27.0 million class B at 'AAA'; Outlook Stable;
-- $12.3 million class G at 'BBB'; Outlook Stable;
-- $11.0 million class H at 'BBB-'; Outlook Stable;
-- $3.7 million class J at 'BB+'; Outlook Stable;
-- $4.9 million class K at 'BB'; Outlook Stable;
-- $4.9 million class L at 'BB-'; Outlook Stable;
-- $4.9 million class M at 'B+'; Outlook Stable;
-- $2.5 million class N at 'B'; Outlook Stable;
-- $3.7 million class P at 'B-'; Outlook Stable.
Fitch does not rate the $11.1 million class Q. Class A-1 has been
paid in full.
The rating upgrades are the result of approximately 17.5% pay down
since Fitch's last rating action. All classes have been assigned
a Stable Outlook due to expected stable performance of the
remaining pool. Rating outlooks reflect the likely direction of
any rating changes over the next one to two years.
As of the September 2008 distribution date, the pool's aggregate
principal balance has decreased 21.5% to $769.3 million from
$980 million at issuance. Twelve loans (29.2%) have defeased,
including five of the top 10 loans (21.2%).
The Galileo Pool No. 1 loan portfolio, the largest loan in the
pool, is secured by a portfolio of 11 retail properties located
throughout various states. The loan is scheduled to mature in
November 2008. The servicer reported June 2008 weighted average
debt service cover ratio was 2.62 times with a weighted average
occupancy of approximately 93%. The sponsor, Centro Retail Trust,
is currently working to extend the maturity date.
The Galileo Pool No. 2 loan portfolio (7.0%), maintains its
investment grade shadow rating. The loan is secured by a
portfolio of nine retail centers located in eight states. Since
issuance, seven properties have been released and replaced with
the expansion of one property and addition of two properties.
Servicer reported June 2008 weighted average DSCR and occupancy
was 3.16x and 95.4%. The loan is schedule to mature in November
2010.
MICRON TECHNOLOGY: S&P Cuts Ratings to 'B+' After Qimonda Deal
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
and senior unsecured ratings on Boise, Idaho-based Micron
Technology Inc. to 'B+' from 'BB-' and also placed them on
CreditWatch with negative implications.
The issue-level recovery ratings (currently '3', indicating
meaningful (50%-70%) prospects of recovery on senior unsecured
debt) were not affected at this time. However, if the company
takes on significant additional debt, the recovery ratings could
be revised.
These actions follow the company's announcement that it has
entered into an agreement to acquire Qimonda AG's 35.6% stake in
Inotera Memories Inc. for $400 million in cash. About $285
million of the transaction cost will be debt-financed.
The downgrade and CreditWatch placement reflect Micron and the
industry's weak operating performance and the impact of the
incremental debt to finance the Inotera equity stake. The
transaction provides Micron access to half of Inotera's wafer
production, with the expectation that operating expenses per wafer
will be reduced, improving Micron's cost competitiveness, and that
Micron can avoid the capital burden of sourcing wafers internally.
Still, industry conditions in Micron's key DRAM market segment are
extremely challenging, characterized by excess capacity, falling
average selling prices and potentially weaker demand in the near
term. For the company's fourth-quarter ended August 2008,
revenues were flat, but gross profit margin was negative for the
second quarter in the last four. Cash flow from operations was
maintained at prior levels--about $250 million--but capital
spending continues to outpace internally generated cash flow. As
a result, cash balances have declined to $1.3 billion from
$1.8 billion as of February 2008.
Standard & Poor's will meet with management to review the benefits
of the transaction to determine the final impact on the rating.
Specifically, S&P will assess:
-- The probability of cash neutrality over the next two to
three quarters, given some of the restructuring plans and
reduced capital spending that has recently been announced;
-- The extent to which Micron's cost competitiveness is
enhanced and the impact on profitability; and
-- The extent that the new source of supply reduces Micron's
longer term capital commitments and allows the company to
restore liquidity.
It is likely that any downgrade would be limited to one notch.
ML-CFC COMMERCIAL: S&P Trims Ratings on Three Certificate Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on three
classes of commercial mortgage pass-through certificates from ML-
CFC Commercial Mortgage Trust 2007-9. Concurrently, S&P affirmed
its ratings on the remaining 24 classes from this transaction.
The downgrades reflect credit concerns with four loans
($17.8 million) with reported debt service coverage of less than
1.0x and anticipated credit support erosion upon the eventual
resolution of two ($6 million) of the three specially serviced
assets.
The affirmed ratings reflect credit enhancement levels that
provide adequate support through various stress scenarios.
S&P has credit concerns with four of the 33 loans
($414.7 million, 15%) in the pool that have reported DSC of less
than 1.0x. The four loans are secured by multifamily, retail, and
self-storage properties, have an average balance of $4.5 million,
and have experienced a weighted average decline in DSC of 50%
since issuance. The 33 loans with low DSCs are secured by a
variety of property types, have an average balance of $12.6
million, and have experienced an average decline in DSC of 42%
since issuance. The 29 loans that are not credit concerns have
in-place reserves or relatively low leverage, or are secured by
properties with improving occupancy levels.
Three assets ($12.6 million) are with the special servicer, LNR
Partners Inc. A fourth loan ($6.8 million) was returned to the
master servicers, Midland Loan Services Inc. and Wells Fargo Bank
N.A., in early September. Details of the three specially serviced
assets are:
-- The 1611 West Peachtree loan ($6.6 million) is secured by
a 60,000-sq.-ft. single-tenant office property in Midtown
Atlanta. The property was built in 1950 and renovated in
1996. The loan is current and was transferred to the
special servicer in August 2008 due to imminent default.
The special servicer has indicated that the property is
100% occupied. At this time, Standard & Poor's does not
expect a loss upon the resolution of this asset.
-- The Forum Plaza loan ($4.6 million total exposure) is a
real estate owned asset with 42,876 sq. ft. of unanchored
retail space in Sunrise, Florida. The property was built
in 1985 and was expanded in 2003. Performance at the
property has deteriorated significantly since issuance.
The most recent occupancy was 73% as of March 2008, down
from 91% at issuance. The property became REO in July
2008, and a receiver is in place to run the property. LNR
received an as-is appraisal of $4.2 million in April 2008.
An appraisal reduction amount totaling $766,712 is in
effect for this loan.
-- The Hamilton Pointe Centre loan ($1.8 million total
exposure) is secured by an 18,000-sq.-ft. unanchored
retail center located in Byron, Georgia. The property was
built in 2006 and is 8.3% occupied as of October 2008,
compared with 83% occupancy at issuance. The loan was
transferred to the special servicer due to payment default
and is currently in foreclosure. LNR received an as-is
appraisal of $1.3 million in July 2008. An ARA totaling
$562,173 is in effect for this loan.
As of the Sept. 12, 2008, remittance report, the collateral pool
consisted of 246 assets with an aggregate balance of
$2.804 billion, compared with 246 loans with a balance of
$2.810 billion at issuance. Midland and Wells Fargo reported
financial information for 68% of the pool, all of which was at
least interim-2007 data. Standard & Poor's calculated a weighted
average DSC of 1.22x for the pool, down from 1.33x at issuance,
excluding the sixth-largest loan; S&P didn't include this loan due
to a lack of financial reporting information. All of the loans in
the pool are current except for the Forum Plaza loan and the
Hamilton Pointe Centre loan, which were referenced above; there
are two ARAs in effect totaling $1.3 million for these loans. To
date, the trust has not experienced any losses.
The top 10 loans have an aggregate outstanding balance of
$1.1 billion (39%) and a weighted average DSC of 1.27x, compared
with 1.31x at issuance, excluding the sixth-largest loan. Midland
and Wells Fargo provided property inspections for seven of the top
10 loan exposures. Two were characterized as "excellent," and the
remaining properties were characterized as "good."
Wells Fargo and Midland reported a watchlist of 19 loans
($504.1 million, 18%). Six ($367.0 million, 13%) of the 10-
largest loans in the pool are on the servicers' watchlist for a
low reported DSC. Five ($307.0 million, 11%) of these six loans
are performing within S&P's expectations and are not credit
concerns at this time. However, based on discussions with Wells
Fargo and LNR, the fourth-largest loan ($60.0 million, 2%), Janss
Marketplace, will be transferred to the special servicer in the
near future for imminent default. While the loan is current,
there are concerns with the pending closure of one large tenant
(Mervyns) and the potential closure of a second large tenant
(Linens-N-Things) at the property.
Together, the two tenants comprise 27% of the total net rentable
area. The reported DSC was 0.70x as of year-end 2007, which
includes the rent from both tenants. A $6.2 million letter of
credit is available to reduce the loan amount. Although the loan
did not contribute to the downgrades, Standard & Poor's will
evaluate information on this loan as it becomes available and take
rating actions as appropriate.
Standard & Poor's identified 16 collateral properties
($565.1 million, 20%) in areas affected by Hurricane Ike. Midland
and Wells Fargo reported that 14 of properties ($556.0 million,
20%) did not sustain significant damange, but could not confirm if
the other two properties were damaged. Standard & Poor's will
continue to evaluate information on the loans as it becomes
available.
Standard & Poor's stressed the loans on the master servicers'
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
ML-CFC Commercial Mortgage Trust 2007-9
Commercial mortgage pass-through certificates
Rating
------
Class To From Credit enhancement
----- -- ---- ------------------
P B B+ 1.75%
Q B- B 1.63%
S CCC+ B- 1.25%
Ratings Affirmed
ML-CFC Commercial Mortgage Trust 2007-9
Commercial mortgage pass-through certificates
Class Rating Credit enhancement
----- ------ ------------------
A-1 AAA 30.06
A-2 AAA 30.06
A-3 AAA 30.06
A-SB AAA 30.06
A-4 AAA 30.06
A-1A AAA 30.06
AM AAA 20.04
AM-A AAA 20.04
AJ AAA 12.02
AJ-A AAA 12.02
B AA+ 10.90
C AA 10.15
D AA- 9.14
E A+ 8.27
F A 7.39
G A- 6.39
H BBB+ 5.39
J BBB 4.51
K BBB- 3.38
L BB+ 2.88
M BB 2.51
N BB- 2.25
XP AAA N/A
XC AAA N/A
N/A -- Not applicable.
MORGAN STANLEY: Fitch Holds 'B-/DR1' Rating on Class L Certs.
-------------------------------------------------------------
Fitch Ratings upgraded and assigned Outlooks to Morgan Stanley
Dean Witter Capital I Inc., commercial mortgage pass-through
certificates, series 2000-LIFE1, as:
-- $17.2 million class E to 'AAA'; Outlook Stable from 'AA';
-- $6.9 million class F to 'AA'; Outlook Stable from 'A+';
-- $13.8 million class H to 'BBB+'; Outlook Stable from 'BBB'.
Fitch also affirmed these classes:
-- $333.6 million class A-2 at 'AAA'; Outlook Stable;
-- Interest-only class X at 'AAA'; Outlook Stable;
-- $22.4 million class B at 'AAA'; Outlook Stable;
-- $25.9 million class C at 'AAA'; Outlook Stable;
-- $8.6 million class D at 'AAA'; Outlook Stable;
-- $6.9 million class J at 'BBB-'; Outlook Stable;
-- $5.2 million class K at 'BB-'; Outlook Stable;
-- $13.8 million class L at 'B-/DR1'.
The $1.7 million class G and the $2 million class M are not rated
by Fitch. Class A-1 has been paid in full.
The upgrades are a result of an additional 8.3% paydown and 3.6%
defeasance since Fitch's last rating action. Rating Outlooks
reflect likely direction of any rating changes over the next one
to two years.
As of the September 2008 distribution date, the pool's aggregate
certificate balance has been reduced by approximately 33.5% to
$458 million from $689 million at issuance. To date, 25 loans
(27.6%) have been defeased. There are currently no delinquent or
specially serviced loans. Of the remaining non-defeased loans in
the pool, 70 (67.4%) mature within the next two years and the
weighted average coupon is 8.03%. 69 of the 70 non-defeased
maturing loans reported year-end 2007 financials and the weighted
average debt service coverage ratio was 1.78 times.
Eight loans (7.6%) have been identified as Fitch loans of concern
due to decline in performance. The largest loan of concern (1.4%)
is secured by a healthcare facility located in Bakersfield,
California. The property has struggled with declines in occupancy
since 2000. Management is currently addressing marketing in the
community in order to increase occupancy and revenue and the
borrower expects performance to improve.
MORGAN STANLEY: Moody's Trims EUR20MM Notes Rating to 'Ba3'
-----------------------------------------------------------
Moody's Investors Service has downgraded its rating on the notes
issued by Morgan Stanley Managed ACES SPC, Series 2006-2:
Class Description: EUR20,000,000 Class III Secured Fixed Rate
Notes due 2013
-- Prior Rating: Baa3
-- Prior Rating Date: August 5, 2008
-- Current Rating: Ba3
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on Sept. 25,
2008 and subsequently virtually all of its assets were sold to
JPMorgan Chase, and Fannie Mae and Freddie Mac, which were placed
into the conservatorship of the U.S. government on September 8,
2008.
MORGAN STANLEY: Moody's Cuts Notes Ratings on Poor Credit Quality
-----------------------------------------------------------------
Moody's Investors Service has downgraded its ratings on the notes
issued by Morgan Stanley Managed ACES SPC, Series 2005-1:
Class Description: $125,000,000 Junior Super Senior Secured
Floating Rate Notes due 2013
-- Prior Rating: Aaa
-- Prior Rating Date: March 29, 2006
-- Current Rating: Aa2
Class Description: $100,000,000 Class I-A Secured Floating Rate
Notes due 2013
-- Prior Rating: Aa1
-- Prior Rating Date: August 5, 2008
-- Current Rating: Aa3
Class Description: $96,000,000 Class II-A Secured Floating Rate
Notes due 2013
-- Prior Rating: A1
-- Prior Rating Date: August 5, 2008
-- Current Rating: Baa2
Class Description: EUR38,000,000 Class II-B Secured Floating Rate
Notes due 2013
-- Prior Rating: A1
-- Prior Rating Date: August 5, 2008
-- Current Rating: Baa2
Class Description: $3,000,000 Class III-A Secured Fixed Rate Notes
due 2013
-- Prior Rating: Baa3
-- Prior Rating Date: August 5, 2008
-- Current Rating: Ba3
Class Description: Yen 500,000,000 Class III-B Secured Floating
Rate Notes due 2013
-- Prior Rating: Baa3
-- Prior Rating Date: August 5, 2008
-- Current Rating: Ba3
Class Description: EUR20,000,000 Class III-C Secured Floating Rate
Notes due 2013
-- Prior Rating: Baa3
-- Prior Rating Date: August 5, 2008
-- Current Rating: Ba3
Class Description: $10,000,000 Class III-D Secured Floating Rate
Notes due 2013
-- Prior Rating: Baa3
-- Prior Rating Date: August 5, 2008
-- Current Rating: Ba3
Class Description: Yen 500,000,000 Class IV-A Secured Floating
Rate Notes due 2013
-- Prior Rating: Ba2
-- Prior Rating Date: August 5, 2008
-- Current Rating: B3
Class Description: $11,000,000 Class IV-B Secured Floating Rate
Notes due 2013
-- Prior Rating: Ba2
-- Prior Rating Date: August 5, 2008
-- Current Rating: B3
Class Description: Yen 200,000,000 Class V-B Secured Floating Rate
Notes due 2013
-- Prior Rating: B3
-- Prior Rating Date: August 5, 2008
-- Current Rating: Caa3
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on Sept. 25,
2008 and subsequently virtually all of its assets were sold to
JPMorgan Chase, and Fannie Mae and Freddie Mac, which were placed
into the conservatorship of the U.S. government on September 8,
2008.
MORGAN STANLEY: Moody's Trims $5MM Notes Rating to Caa1 From B1
---------------------------------------------------------------
Moody's Investors Service has downgraded its rating on the notes
issued by Morgan Stanley ACES SPC - Series 2007-11:
Class Description: $5,000,000 Secured Floating Rate Notes due 2014
-- Prior Rating: B1
-- Prior Rating Date: August 6, 2008
-- Current Rating: Caa1
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under
Chapter 11 of the U.S. Bankruptcy Code on September 15, 2008, and
Fannie Mae, which was placed into the conservatorship of the U.S.
government on September 8, 2008.
MORTGAGE SECURITIES: Fitch Holds 'B-' Rating; Assigns Neg. Outlook
------------------------------------------------------------------
Fitch Ratings has affirmed and assigned outlooks to Sovereign
Commercial Mortgage Securities Trust's commercial mortgage pass-
through certificates, series 2007-C1, as:
-- $21.4 million class A-1 at 'AAA'; Outlook Stable;
-- $499.9 million class A-1A at 'AAA'; Outlook Stable;
-- $231.5 million class A-2 at 'AAA'; Outlook Stable;
-- $105.2 million class AJ at 'AAA'; Outlook Stable;
-- Interest-only class X at 'AAA'; Outlook Stable;
-- $15.2 million class B at 'AA'; Outlook Stable;
-- $17.7 million class C at 'A'; Outlook Stable;
-- $20.3 million class D at 'BBB+'; Outlook Stable;
-- $10.1 million class E at 'BBB'; Outlook Stable;
-- $7.6 million class F at 'BBB-'; Outlook Stable;
-- $2.5 million class G at 'BB+'; Outlook Stable;
-- $2.5 million class H at 'BB'; Outlook Stable;
-- $3.8 million class J at 'BB-'; Outlook Stable;
-- $2.5 million class K at 'B+'; Outlook Stable;
-- $3.8 million class L at 'B'; Outlook Stable;
-- $2.5 million class M at 'B-'; Outlook Negative.
Fitch does not rate the $8.9 million class N certificates. The
affirmations reflect stable performance and minimal pay down since
issuance. Class M has been assigned a negative outlook due to a
potential decline in credit enhancement. Rating outlooks reflect
the likely direction of any rating changes over the next one to
two years.
As of the September 2008 distribution date, the pool's aggregate
certificate balance has decreased 5.8% to $955.6 million from
$1.014 billion at issuance.
Fitch has identified 18 Loans of Concern (5.22%), including two
assets in special servicing (0.47%). The largest specially
serviced asset (0.34%) is a multifamily property in Fort Myers,
Florida. The special servicer is pursuing foreclosure. The
second specially serviced asset (0.13%) is a multifamily property
located in Waterbury, Connecticut. Fitch expects losses on the
specially serviced assets to be absorbed by the non-rated class N.
The largest loan (3.98%) is secured by a portfolio of 34 multi-
family and mixed-use properties located throughout New Jersey.
Reported occupancy was 92% for the portfolio as of year-end 2007
with a debt service cover ratio of 1.48 times.
MOTOR COACH: Wants to Retain ABC-AMEGA, KPMG (US)
-------------------------------------------------
Bill Rochelle of Bloomberg News reports that Motor Coach
Industries International, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to retain ABC-AMEGA as commercial debt collection agent
for contingent fee rates, based on these criteria:
1. domestic in-house and attorney amicable fees
2. domestic attorney suit fees
3. international schedule
4. attorney fees
5. judgment interest
6. escheatable and abandoned property and
7. miscellaneous fees.
The Debtors, according to the report, also asked authority from
the Court to retain KPMG (US) as auditor and tax consultant.
KPMG will be compensated according to these hourly rates:
Professional Rates
------------ -----
Paraprofessional $160
Associate $320
Senior associate $420
Manager $480-$560
Senior manager $660-$680
Partner $720
Wilmington, Delaware-based Motor Coach Industries International,
Inc.-- http://www.mcicoach.com/-- and its subsidiaries
manufacture intercity coaches for the tour, charter, line-haul,
scheduled service, and commuter transit sectors in the U.S. and
Canada. They also operate seven sales centers and nine service
centers in the U.S. and Canada and is the industry's supplier of
aftermarket parts for most makes and models.
The Company and its debtor-affiliates filed for separate Chapter
bankrupty protection with the United States Bankruptcy Court for
the District of Delaware on September 15, 2008 (Lead Case No. 08-
12136), to implement a pre-negotiated restructuring plan to be
funded by Franklin Mutual Advisors, LLC and certain of its
affiliates. The Company's Canadian operations are not included in
the filing.
Kenneth S. Ziman, Esq., and Elisha D. Graff, Esq., at Simpson
Thacher & Bartlett LLP, in New York; and Jason M. Madron, Esq.,
and Lee E. Kaufman, Esq., at Richards Layton & Finger, P.A., in
Wilmington, Delaware, represent the Debtors in their restructuring
efforts. Kurtzman Carson Consultants LLC serves as claims and
notice agent. Rothschild Inc. and AlixPartners LLP also provide
restructuring advice. At the time of filing, the Debtors listed
assets of between $500,000,000 and $1,000,000,000 and liabilities
of between $100,000,000 and $500,000,000.
MPF CORP: Court Extends Schedules Filing Deadline to November 6
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
extended, at the behest of MPF Corp. Ltd. and its affiliates, the
deadline for the filing of the Debtors' assets and liabilities,
current income and expenditures, executory contracts and unexpired
leases, and statements of financial affairs to Nov. 6, 2008.
Section 521 of the Bankruptcy Code and Rule 1007 of the Federal
Rules of Bankruptcy Procedure require the filing of the Schedules
and Statements on or within 15 days from the date of the
commencement of a bankruptcy case. The court may extend the time
for filing the Schedules and Statements for cause shown.
On Sept. 24, 2008, MPF Corp. and MPF-01, which are incorporated in
Bermuda, commenced proceedings in the Supreme Court of Bermuda
known under Bermuda Law as "winding up" proceedings. The Bermuda
Debtors also issued a summons seeking the appointment of Joint
Provisional Liquidators. On Sept. 24, 2008, the Supreme Court of
Bermuda entered orders appointing the Joint Provisional
Liquidators.
The Joint Provisional Liquidators, on behalf of the Bermuda
Debtors, are specifically empowered by the Supreme Court of
Bermuda to oversee and liaise with the Bermuda Debtors' Boards of
Directors in determining the most appropriate manner of effecting
a reorganization, and refinancing of the Bermuda Debtors in
conjunction with proceedings commenced under Chapter 11 of the
Bankruptcy Code.
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). MPF-01 followed on Sept. 25, 2008.
D. Bobbitt Noel, Jr., Esq. at Vinson & Elkins LLP, represents the
Debtors as counsel. When the Debtors filed for protection from
creditors, they listed assets of $100 million to $500 million, and
the same range of debts.
The Bermuda Proceedings and the Chapter 11 cases in the U.S. run
as parallel proceedings, which is coordinated to effectuate the
Debtors' goal of providing for a restructuring of their businesses
or sale of assets as may be in the best interests of their estates
and creditors.
The Debtors are in possession of their properties and continue to
operate and manage their businesses as debtors-in-possession.
Due to the size and complexity of the Debtors' businesses, and
their prepetition focus on restructuring their financial affairs
to avoid Chapter 11 filings, the Debtors failed to complete the
drafting of the Schedules and Statements, and do not anticipate
having the Schedules and Statements ready for filing within the
15-day period.
MS CDS: Moody's Slashes $5MM Credit Swap Default Rating to 'Caa1'
-----------------------------------------------------------------
Moody's Investors Service has downgraded the rating on MS CDS Ref.
NFDKY:
Class Description: $5,000,000 Credit Default Swap
-- Prior Rating: B1
-- Prior Rating Date: August 6, 2008
-- Current Rating: Caa1
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, and Fannie
Mae, which was placed into the conservatorship of the U.S.
government on September 8, 2008.
MS CDS: Moody's Cuts $7.5MM Credit Default Swap Rating to 'Caa1'
----------------------------------------------------------------
Moody's Investors Service has downgraded the rating on MS CDS Ref.
NFDKW:
Class Description: $7,500,000 Credit Default Swap
-- Prior Rating: B1
-- Prior Rating Date: August 6, 2008
-- Current Rating: Caa1
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under
Chapter 11 of the U.S. Bankruptcy Code on September 15, 2008, and
Fannie Mae, which was placed into the conservatorship of the U.S.
government on September 8, 2008.
NELLSON NUTRACEUTICAL: Management Incentive Plan Appeal Proceeds
----------------------------------------------------------------
BankruptcyLaw360.com reports that the United States Bankruptcy
Court for the District of Tennessee rejected an attempt of Nellson
Nutraceutical, Inc., and its debtor-affiliates to quash an appeal
by the U.S. Trustee and the Official Committee of Unsecured
Creditors over the Debtors' proposed management incentive plan.
About Nellson Nutraceutical
Headquartered in Irwindale, California, Nellson Nutraceutical,
Inc., aka Nellson Candies, Inc., formulates, makes and sells bars
and powders for the nutrition supplement industry. The Debtor and
its affiliates filed for chapter 11 protection on Jan. 28, 2006
(Bankr. D. Del. Case No. 06-10072). Laura Davis Jones, Esq.,
Rachel Lowy Werkheiser, Esq., Richard M. Pachulski, Esq., Brad R.
Godshall, Esq., and Maxim B. Litvak, Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, P.C. represent the Debtors in
their restructuring efforts. AlixPartners LLC is the Debtors'
noticing, claims and balloting agent. The U.S. Trustee for Region
3 appointed creditors to serve on an Official Committee of
Unsecured Creditors. Gaston Plantiff Loomis, II, Esq., Kurt F.
Gwynne, Esq., and Thomas Joseph Francella, Jr., Esq., at Reed
Smith LLP represent the Committee in these cases. The Debtors'
schedules show $312,334,898 in assets and $345,227,725 in debts.
NEXTWAVE WIRELESS: Has Until April 6 to Comply with Nasdaq Rule
---------------------------------------------------------------
NextWave Wireless Inc. received a Nasdaq Staff Deficiency Letter
indicating that because the company's common stock has closed
below the minimum $1.00 per share for the last 30 consecutive
business days, the company fails to comply with the requirement
for continued listing as set forth in Marketplace Rule 4450(a)(5).
In accordance with Marketplace Rule 4450(e)(2), if, at anytime
before April 6, 2009, the bid price of NextWave's common stock
closes at $1.00 per share or more for a minimum of 10 consecutive
business days, Nasdaq will provide NextWave with written
notification that it has achieved compliance with the Rule. If
NextWave does not regain compliance with the Rule by April 6,
2009, Nasdaq will provide written notification to the company
that its securities will be delisted.
NextWave Wireless Inc. (Nasdaq: WAVE) -- http://www.nextwave.com/
-- provides next-generation mobile multimedia and wireless
broadband technologies to the world's mobile handset
manufacturers, consumer electronics manufacturers and wireless
service providers. Device-embedded mobile multimedia software from
NextWave's PacketVideo subsidiary can be found in more than 250
million handsets around the globe.
NORTH HOLLYWOOD HAMLIN: Case Summary & Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: North Hollywood Hamlin Street Development Developer LLC
115 W California Bl Ste 224
Pasadena, CA 91105
Bankruptcy Case No.: 08-18009
Chapter 11 Petition Date: October 14, 2008
Court: Central District Of California (San Fernando Valley)
Judge: Kathleen Thompson
Debtor's Counsel: Jerome Zamos, Esq.
Law Offices of Jerome Zamos
5228 Campo Road
Woodland Hills, CA 91364
Tel: (818) 348-7151
Total Assets: $2,523,583
Total Debts: $1,738,867
A list of the Debtor's largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/califcb08-18009.pdf
NORTHSTAR ELECTRONICS: Cinnamon Jang Expresses Going Concern Doubt
------------------------------------------------------------------
Cinnamon Jang Willoughby & Company in Burnaby, Canada, raised
substantial doubt about the ability of Northstar Electronics, Inc.,
to continue as a going concern after it audited the company's
financial statements for the year ended Dec. 31, 2007. According to
the auditor, "the company contemplates the realization of assets
and satisfaction of liabilities in the normal course of business
operations."
The company has never earned substantial operating revenue and have
been dependent on equity and debt financing to help pay operating
costs and to help cover operating losses. Additionally, because
the company has limited sales history and is substantially
dependent on one major contractor to generate future sales, the
company's future is uncertain if its relationship with that major
contractor fails.
Further, the company has a net loss from operations of $778,818 for
the year ended Dec. 31, 2007, and has accumulated losses of
$6,828,100 from inception. These factors raise a risk of
insolvency.
The company posted a comprehensive loss of $1,055,756 on total
revenues of $1,611,203 for the year ended Dec. 31, 2007, as
compared with a comprehensive loss of $973,643 on total revenues of
$1,460,508 in the prior year.
At Dec. 31, 2007, the company's balance sheet showed $1,136,785 in
total assets and $3,731,614 in total liabilities, resulting in a
$2,594,829 stockholders' deficit.
The company's consolidated balance sheet at Dec. 31, 2007, also
showed strained liquidity with $783,476 in total current assets
available to pay $1,557,875 in total current liabilities.
A full-text copy of the company's 2007 annual report is available
for free at http://ResearchArchives.com/t/s?33d8
About Northstar Electronics
Northstar Electronics, Inc. (OTCBB: NEIK) --
www.northstarelectronics.com/ -- develops, designs and manufactures
advanced sonar technology for Homeland Security and Defense.
NORTHWEST AIRLINES: Aviation Consultants Holds 27,528 Shares
------------------------------------------------------------
In a regulatory filing with the United States Securities and
Exchange Commission, Mickey Foret, a director of Northwest
Airlines, Corp., reported that on Oct. 1, 2008, he acquired
464 shares of Northwest common stock on behalf of Aviation
Consultants, LLC, at $0.01 per share. Mr. Foret, who is the
sole member of Aviation Consultants, beneficially owned 27,528
shares of common stock after the transaction.
Mr. Foret's 27,528 shares of common stock, were distributed by
Northwest in accordance with its Amended Plan of Reorganization,
on account of a prepetition unsecured claim held Mr. Foret
against the company.
Mr. Foret may in the future receive additional shares of common
stock on account of the same Claim, as all unsecured claims held
by creditors of the Debtors continue to be reconciled.
Northwest Airlines Corp. (NYSE: NWA) -- http://www.nwa.com/--
is the world's fourth largest airline with hubs at Detroit,
Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and about
1,400 daily departures. Northwest is a member of SkyTeam, an
airline alliance that offers customers one of the world's most
extensive global networks. Northwest and its travel partners
serve more than 1000 cities in excess of 160 countries on six
continents. Northwest and its travel partners serve more than
1000 cities in excess of 160 countries on six continents,
including Italy, Spain, Japan, China, Venezuela and Argentina.
The company and 12 affiliates filed for chapter 11 protection on
Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). Bruce
R. Zirinsky, Esq., and Gregory M. Petrick, Esq., at Cadwalader,
Wickersham & Taft LLP in New York, and Mark C. Ellenberg, Esq.,
at Cadwalader, Wickersham & Taft LLP in Washington, represent the
Debtors in their restructuring efforts. The Official Committee
of Unsecured Creditors has retained Scott L. Hazan, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. as its bankruptcy
counsel in the Debtors' chapter 11 cases. When the Debtors filed
for bankruptcy, they listed $14.4 billion in total assets and
$17.9 billion in total debts. On Jan. 12, 2007, the Debtors filed
with the Court their chapter 11 plan. On Feb. 15, 2007, the
Debtors filed an amended plan and disclosure statement. The Court
approved the adequacy of the Debtors' amended disclosure statement
on March 26, 2007. On May 21, 2007, the Court confirmed the
Debtors' amended plan. That amended plan took effect May 31,
2007.
(Northwest Airlines Bankruptcy News, Issue No. 101; Bankruptcy
Creditors' Service, Inc., http://bankrupt.com/newsstand/or
215/945-7000).
* * *
As reported in the Troubled Company Reporter on July 29, 2008,
Standard & Poor's Ratings Services lowered its ratings on
Northwest Airlines Corp. and subsidiary Northwest Airlines Inc.
(both rated B/Negative/--), including lowering the long-term
corporate credit ratings on both entities to 'B' from 'B+', and
removed the ratings from CreditWatch, where they had been placed
with negative implications April 15, 2008. The outlook is
negative.
The downgrade reflects expected losses and reduced or negative
operating cash flow caused by high fuel prices. S&P also lowered
our ratings on enhanced equipment trust certificates, in some
cases by more than one notch.
PALATIN TECH: Net Losses Raises KPMG's Going Concern Doubt
----------------------------------------------------------
Philadelphia-based KPMG LLP expressed substantial doubt about
Palatin Technologies, Inc.'s ability to continue as a going concern
after it audited the company's financial statements for the year
ended June 30, 2008. KPMG pointed to the company's recurring net
losses and negative cash flows from operations. The auditing firm
also reported that Palatin would require substantial additional
financing to continue to fund its development activities.
The company posted a net loss of $14,384,369 on total revenues of
$11,483,287 for the year ended June 30, 2008, as compared with a
net loss of $27,751,525 on total revenues of $14,405,665 in the
prior year.
Management Statement
"The company has incurred negative cash flows from operations since
its inception, and has expended, and expects to continue to expend
in the future, substantial funds to complete its planned product
development efforts. The company has an accumulated deficit of
$202,579,438 as of June 30, 2008, and incurred a net loss for
fiscal 2008. The company anticipates incurring additional losses
in the future as a result of spending on its development programs.
To achieve profitability, the company, alone or with others, must
successfully develop and commercialize its technologies and
proposed products, conduct successful preclinical studies and
clinical trials, obtain required regulatory approvals and
successfully manufacture and market such technologies and proposed
products. The time required to reach profitability is highly
uncertain, and there can be no assurance that the company will be
able to achieve profitability on a sustained basis, if at all.
"As of June 30, 2008, the company's cash and cash equivalents were
$9,421,770 and its available-for-sale investments were $3,352,771.
Palatin does not believe that its capital resources, together with
expected receipts from collaboration and license agreements and
other income, will be adequate to fund the company's operations for
the next 12 months.
"The company is exploring sources of additional capital through
public or private financing or collaborative agreements with the
intent to raise additional capital. There is no assurance that
required additional capital will be obtained. These matters raise
substantial doubt over the company's ability to continue as a going
concern.
"The nature and timing of the company's development activities are
highly dependent on its financing activities. Management plans to
continue to refine its operations, control expenses, evaluate
alternative methods to conduct its business, and seek available
sources of public or private financing and sharing of development
costs through collaborative agreements or other arrangements.
Should appropriate sources of financing not be available,
management will curtail operations and delay clinical trials and
research activities until such time, if ever, as appropriate
financing is available. There can be no assurance that the company
will be able to obtain financing when required, or that financing
efforts will be successful.
"Further, failure to obtain timely regulatory approval for our
product candidates and indications would impact our ability to
increase revenues and could make it more difficult to attract
investment capital for funding our operations. Any of these
possibilities could materially and adversely affect our operations
and require us to curtail or cease certain programs."
Liquidity and Capital Resources
During fiscal 2008, the company used $20,600,000 of cash for its
operating activities, compared with $22,100,000 used in fiscal 2007
and $23,400,000 used in fiscal 2006. Net cash outflows from
operations in fiscal 2007 were favorably impacted by the receipt of
an up-front license payment of $10,000,000 from AstraZeneca in
January 2007. The company's periodic accounts receivable balances
will continue to be highly dependent on the timing of receipts from
collaboration partners and the division of development
responsibilities between the company and its collaboration
partners.
In fiscal 2008, net cash used in investing activities amounted to
$1,300,000, consisting of $300,000 used for the acquisition of
capital equipment and $1,000,000 used to purchase available-for-
sale investments, compared with $900,000 and $800,000,
respectively, used for the acquisition of capital equipment during
fiscal 2007 and fiscal 2006.
For fiscal 2008, net cash used in financing activities amounted to
$200,000, consisting of $300,000 in payments on capital lease
obligations partially offset by $100,000 in proceeds from the
exercise of common stock warrants. During fiscal 2007, net cash
provided by financing activities amounted to $26,000,000, primarily
reflecting proceeds from the sale of common stock in a registered
offering in February 2007.
Balance Sheet
At June 30, 2008, the company's balance sheet showed $19,124,924 in
total assets, $12,572,760 in total liabilities, and $6,552,164 in
total stockholders' equity.
The company's consolidated balance sheet at June 30, 2008, also
showed liquidity with $13,264,650 in total current assets available
to pay $4,999,117 in total current liabilities.
A full-text copy of the company's 2008 annual report is available
for free at http://ResearchArchives.com/t/s?33dd
About Palatin Technologies
Palatin Technologies, Inc. (AMEX: PTN) -- http://www.palatin.com--
a biopharmaceutical company, engages in the discovery and
development of receptor-specific small molecule and peptide
therapeutics, including melanocortin (MC)-based therapeutics in the
United States. The company's products include Bremelanotide, a
nasally-administered peptide in clinical development for the
treatment of both male and female sexual dysfunction; and
NeutroSpec, a radiolabeled monoclonal antibody product for imaging
and diagnosing infection. The company was founded in 1986 and is
headquartered in Cranbury, New Jersey.
PARCS MASTER: Moody's Junks Rating on Class 2006-4 Trust Units
--------------------------------------------------------------
Moody's Investors Service has downgraded its rating of the Class
2006-4 Montaigne (Floating Recovery) Units issued by PARCS Master
Trust:
Class Description: Units due September 2014
-- Prior Rating: Ba3
-- Prior Rating Date: 10/2/2008
-- Current Rating: Caa3
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter 11
of the U.S. Bankruptcy Code on September 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on Sept. 25,
2008 and subsequently virtually all of its assets were sold to
JPMorgan Chase, Fannie Mae and Freddie Mac, which were placed into
the conservatorship of the U.S. government on September 8, 2008 and
three Icelandic banks, specifically Kaupthing Bank hf, Landsbanki
Islands hf, and Glitnir Banki hf.
PAUL REINHART: Files Seeks Chapter 11 Bankruptcy Protection
-----------------------------------------------------------
Jef Feeley and Michael Bathon of Bloomberg News report that Paul
Reinhart, Inc., sought Chapter 11 bankruptcy protection from the
U.S. Bankruptcy Court for the Northern District of Texas (Case No.
08-35283) on Oct. 15, 2008, after announcing last month that it
faced a "severe liquidity crisis" tied to losses on futures
contracts.
The Debtor's officials, according to the report, told farmers last
month that it faced a cash crunch after suffering an $80 million
loss when cotton-futures prices jumped to a 12-year high in March.
In the six days ended March 5, cotton jumped 15 percent, prompting
a government probe of potential market manipulation, according to
the report.
The report, citing one of the farmers who asked not to be
identified, stated that the Debtor had been considering selling
its assets to competitor Allenberg Cotton Co..
Lawyers for cotton growers sued the Debtor and its lenders on the
same day as part of the bankruptcy case, according to the report.
They allege that the lenders, including units of Wells Fargo & Co.
and Bank of America Corp., used what amounted to naked short-sales
of hedged positions in cotton-futures contracts to recoup at least
$70 million that should have gone to cotton producers in Arkansas,
Mississippi, Missouri, Texas and Tennessee, according to the
report. The Debtor serves as a middleman between cotton growers
and manufacturers, according to the report.
Disgruntled Farmers
"There are quite a few disgruntled farmers who thought they had
cotton sold in excess of 70 cents that don't have it sold," Ron
Lawson, a managing director at Lawson O'Neill Global Institutional
Commodity Advisors LLC in Sonoma, California, said according to
the report. "These farmers are going to shy away from growing
cotton ever again," Mr. Lawson added.
U.S. farmers, according to the report, planted cotton on 9.41
million acres this year, down 13 percent from 10.83 million in
2007, according to the U.S. Agriculture Department.
Richardson, Texas-based Paul Reinhart, Inc.,--
http://www.reinhart.com/--is the North American subsidiary of
Switzerland-based Paul Reinhart AG that purchases cotton from
growers and distributes to textile manufacturers worldwide.
Deborah M. Perry, Esq., and E. Lee Morris, Esq., at Munsch Hardt
Kopf & Harr, P.C., represent the Debtor in its restructuring
efforts. The Debtor listed assets of between $100 million and $500
million and estimated debts of between $100 million and $500
million in its filing.
PAUL REINHART: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Paul Reinhart, Inc.
2280 Campbell Creek Blvd., Suite 350
Richardson, TX 75082
Bankruptcy Case No.: 08-35283
Type of Business: The Debtor is a cotton merchant serving organic
and traditional growers and textile mills.
See: http://www.reinhart.com/
Chapter 11 Petition Date: October 15, 2008
Court: Northern District of Texas (Dallas)
Judge: Harlin DeWayne Hale
Debtor's Counsel: Deborah M. Perry, Esq.
dperry@munsch.com
E. Lee Morris, Esq.
lmorris@munsch.com
Munsch Hardt Kopf & Harr, P.C.
3800 Lincoln Plaza
500 North Akard Street
Dallas, TX 75201-6659
Tel: (214) 855-7565
Fax: (214) 978-5335
Financial and Restructuring Advisor: Grant Thornton LLP
Estimated Assets: $100 million to $500 million
Estimated Debts: $100 million to $500 million
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
CoMark contracts $18,863,582
c/o Charlie Lowrance
1533 Buncimbe Road
Greenville, SC 296099
Tel: (901) 543-9494 ext. 12
Heaton Cotton, Co. contracts $13,485,134
c/o Erma Heaton
1321 W. Broadway
Corpus Christi, TX 78410
Tel: (361) 882-6352
Richardson Gin contracts $12,398,231
c/o Barry Richardson
112 W. Main Streat
Marston, MO 63866
Tel: (573) 643-2921
GPS Gin Co. contracts $10,775,349
c/0 George Pugh
P.O. Box 190
Portland, AR 71663
Tel: (870) 737-4372
Caney Valley Cotton, Co. contracts $10,305,153
c/o Stormy Starks
P.O. Box 470
Wharton, TX 77488
Tel: (979) 532-5210
Jim Moore contracts $4,961,291
P.O. Box 519
Bay, AR 72411
Tel: (870) 781-3293
Algondonera Nueva Holanda contracts $4,455,000
c/o Abraham Wall
Km. 175 Carretera Camargo
a Ojinaga
Col. Oasis, Cd. Ojinaga,
Chihuahua, Mexico
Tel: 0-11-52-626-100-7006
White Oak Gin Co. contracts $4,012,614
c/o Scott Morgan
P.O. Box 116
2311 State Hwy. 25
White Oak, MO 63880
Tel: (573) 888-4776
Stephens Gin contracts $3,930,821
c/o John Stephens
2701 St. Hwy. Y
P.O. Box 229
Kenneth, MO 63857
Tel: (573) 888-2050
Langston Ent. contracts $3,798,670
c/o John Langston
5267 East State Hwy. 150
Blytheville, AR 72315
Tel: (870) 763-6670
John Shoaf Cotton contracts $3,045,763
c/o Vance Shoaf
P.O. Box 11
Milan, TN 38358
Tel: (731) 686-3383
Taylor Stuckey contracts $2,953,131
c/o John Stuckey
10415 Stuckey Lane
Trumann, AR 72472
Tel: (870) 483-7625
Campbell Farms contracts $2,730,591
c/o Kevin Still
P.O. Box B
Holland, MO 63853
Tel: (573) 695-4461
Starnes & McFerrin contracts $2,414,280
c/o Joe McFerrin
P.O. Box 331
Cotton Center, TX 79021
Tel: (806) 879-2181
Farmers Farms contracts $2,162,852
c/o Fran Speck
P.O. Box 127
Osceola, AR 72370
Tel: (870) 563-5824
T&P Farms contracts $2,037,996
c/o Kevin Still
110 Michie Street
Steele, MO 63877
Tel: (573) 695-4461
Noel & Sons contracts $1,928,530
c/o Jeffrey Noel
1340 FM 400
Plainview, TX 79072
Tel: (806) 895-4625
Purvis Farms contracts $1,874,760
14501 St. Hwy. T
Senath, MO 63876
Tel: (573) 738-3141
Carl Clifton contracts $1,838,739
c/o Kevin Still
P.O. Box B
Holland, MO 63853
Tel: (573) 695-4461
Jessie Carter contracts $1,819,371
c/o Kevin Still
P.O. Box B
Holland, MO 63853
Tel: (573) 695-4461
PHS GROUP: Court Approves $2.4MM Asset Sale to Grunberg Oil
-----------------------------------------------------------
Bill Rochelle of Bloomberg News reports that the U.S. Bankruptcy
Court for the Eastern District of Kentucky approved a $2.4 million
sale of the assets of PHS Group, Inc., and its debtor-affiliates to
Grunberg Oil, LLC.
Headquartered in Lexington, Kentucky, PHS Group, Inc.'s primary
business is the operation of affiliate Somerset Refinery, Inc.,
which has a processing capability of 5,500 barrels of oil per day.
The refinery primarily produces gasoline at octanes of 87, 89, 91,
diesel fuel and heavy fuel oils for homes and industry furnaces.
The company filed for Chapter 11 protection on May 8, 2007,
(Bankr. Kentucky Case No. 07-60407). Gregory R. Schaaf, Esq., at
Greenebaum Doll & MacDonald, P.L.L.C., represents the Debtor in
its restructuring efforts. The Debtor disclosed estimated assets
of $10,000 to $1,000,000 and estimated debts of $100,000 to
$100,000,000 in its bankruptcy filing.
The Debtor's affiliates -- Phoenix Holdings of Somerset, Inc., The
Somerset Refinery, Inc., South Kentucky Purchasing Company,
Somerset Environmental Services, Inc., and Somerset Oil, Inc. --
filed separate chapter 11 petitions.
PORTOLA PACKAGING: Court Confirms Pre-packaged Plan
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware found that
Portola Packaging, Inc.'s second amended prepackaged plan of
reorganization had met the statutory requisites. Accordingly, the
Court confirmed the Plan.
Confirmation of the pre-packaged plan followed Portola obtaining
an exit financing commitment from Wells Fargo Foothill, LLC and
Regiment Capital Special Situations Fund IV, LP for a $66 million
senior secured credit facility. Concurrently, Wayzata Investment
Partners LLC committed to provide up to $30 million in second-lien
financing to refinance the existing second-lien debt. Having
obtained confirmation of its plan, Portola remains on track with
its current timetable to emerge from chapter 11 by the end of
October.
John LaBahn, Senior Vice President and Chief Financial Officer
said, "We continue to be very proud of what we have been able to
accomplish as we work to emerge with a significantly improved
capital structure. This will allow us to complete our
restructuring and exit bankruptcy by the end of October."
Pursuant to the confirmed plan of reorganization, holders of
Portolaÿs existing senior unsecured notes will receive 100% of the
common stock of reorganized Portola, and Wayzata will become
Portolaÿs controlling shareholder upon Portolaÿs emergence from
bankruptcy. Through the court-assisted restructuring process,
Portola will have eliminated $180 million in funded debt from its
balance sheet. The plan of reorganization specifically provides
that Portolaÿs relationships with customers and trade creditors
are not impaired. Portola is pleased that it was able to
restructure its balance sheet without any impact upon its
relationships with its vendors and customers.
Portola President and CEO Brian Bauerbach added, "Our improved
balance sheet and reduced interest costs will enable us to better
serve our customers and improve our competitive position in the
packaging industry."
Portola filed the second amended plan and accompanying disclosure
statement on Oct. 10. Since the filing of the original prepack
plan, Portola has filed plan supplements and amended exhibits to
plan supplements.
BankruptcyData says the amendments relate to the Debtors' second
lien term loan with Wayzata Investment Partners, rejected executor
contracts, unexpired leases and non-exclusive list of retained
causes of action and Debtors' officers and directors.
About Portola Packaging
Portola Packaging Inc. -- http://www.portpack.com/-- designs,
manufactures, and markets a full line of tamper-evident plastic
closures, bottles, and equipment for the beverage and food
industries, as well as plastic closures and containers for the
cosmetics industry. The company and 6 of its debtor-affiliates
filed for Chapter 11 reorganization on Aug. 27, 2008 (Bankr. D.
Del. Lead Case No. 08-12001). Edmon L. Morton, Esq., Robert S.
Brady, Esq., and Sean T. Greecher, Esq., at Young, Conaway,
Stargatt & Taylor, represent the Debtors as counsel. When the
Debtors filed for protection from their creditors, they listed
assets of between US$50 million and US$100 million, and debts of
between US$100 million and US$500 million. The company has
locations in China, Mexico and Belgium.
PRIMARIS AIRLINES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Primaris Airlines, Inc.
15300 North 90th Street, Suite 400
Scottsdale, AZ 85260
Bankruptcy Case No.: 08-14060
Type of Business: The Debtor is an airline company. It offers
domestic and international flight services.
See: http://www.primarisairlines.com/
Chapter 11 Petition Date: October 10, 2008
Court: District of Arizona (Phoenix)
Judge: Randolph J. Haines
Debtor's Counsel: Joel F. Newell
j.newell@cplawfirm.com
Carmichael & Powell, P.C.
7301 N. 16th Street
Phoenix, AZ 85020
Tel: (602) 861-0777
Fax: (602) 870-0296
Total Assets: $0
Total Debts: $11,090,796
The Debtor's Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
Sky Holdings Company LLC $6,166,715
2 Jackson Street, Suite 100
San Francisco, CA 9411
Iberia $1,602,215
c/o Akerman Senterfit
One Southeast Third Avenue
25th floor
Miami, FL 33131
A.J. Walter Aviation $400,523
Partridge Green
Susses RH138RA
England
Trans-Pacific Aviation $335,371
Services
60 98th Avenue, Suite
Oakland, CA 94621
International Air $335,371
Transport Assoc.
800 Place Victoria
P.O. Box 113
Montreal Quebec
H4Z1M1 Canada
Tracer $229,814
North American $222,065
Boeing Commercial $221,209
Airplanes
American Airlines Inc. $174,602
Swissport $165,515
Delta Air Lines Inc. $160,870
Honeywell-Aerospace $156,860
Electronic Systems
Nordham Group $144,830
Global Parts Support Inc. $127,000
Swiss Teknik, LLC $124,294
World Courier Inc. $121,574
World Fuel Services Ltd. $115,141
Worldwide Charters Int'l Inc. $108,432
375 East Warm Springs LLC $100,204
Willis Global Aviation $78,182
QUEBECOR WORLD: Posts $11.6MM Net Loss in Period Ended August 30
----------------------------------------------------------------
Quebecor World (USA), Inc., et al.
Combined Balance Sheet
As of August 30, 2008
ASSETS
Current Assets:
Cash and Cash equivalents $152,400,000
Accounts receivables 531,900,000
Trade and receivables 51,600,000
Inventories 151,700,000
Future income taxes and tax receivable 18,700,000
Prepaid Expenses 30,300,000
-------------
Total current expenses 936,600,000
Property, plant and equipment 1,165,000,000
Goodwill 336,400,000
Restricted cash 32,300,000
Future income taxes 900,000
Other assets 302,800,000
--------------
TOTAL ASSETS $2,774,000,000
==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities not subject to compromise:
Bank indebtedness $16,000,000
Trade payables and accrued liabilities 246,900,000
Payables to related parties 3,100,000
Income and other taxes payable 15,000,000
Current portion long-term debt 491,800,000
Combined Statement of Operations 2,866,200,000
-------------
Total current liabilities 3,639,000,000
Other liabilities not subject to compromise:
Long-term debt 7,400,000
Other liabilities 132,200,000
Future income taxes 113,100,000
Shareholders equity:
Capital stock 1,031,200,000
Contributed surplus 470,000,000
Retained earnings (2,619,800,000)
Accumulated other comprehensive loss (900,000)
--------------
Total Equity (1,117,700,000)
--------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,774,000,000
==============
Quebecor World (USA), Inc., et al.
Combined Statement of Operations
For the month ended August 30, 2008
Operating Revenues $244,300,000
Operating expenses:
Cost of sales 200,600,000
Selling, general and administrative 13,500,000
Depreciation and amortization 14,000,000
-----------
Total operating expenses 228,100,000
-----------
Operating income 16,200,000
Financial expenses 25,200,000
Reorganization items 4,200,000
Income taxes (1,600,000)
----------
27,800,000
-----------
Net loss and comprehensive loss ($11,600,000)
===========
Quebecor World (USA), Inc., et al.
Combined Statement of Cash Flows
For Month Ended August 30, 2008
Cash flows from operating activities:
Net loss ($11,600,000)
Adjustments for:
Depreciation of property, plant and equipment 14,000,000
Future income taxes (1,600,000)
Amortization of other assets 700,000
Other (800,000)
-----------
700,000
-----------
Net changes in non-cash balances to operations:
Accounts receivable (27,800,000)
Inventories (11,900,000)
Trade payables and accrued liabilities 30,400,000
Other current assets and liabilities 15,700,000
Other non-current assets and liabilities (24,300,000)
----------
5,900,000
----------
Cash flows provided by (used in)
operating activities 6,600,000
----------
Cash flows from financing activities:
Net change in bank indebtedness 2,600,000
Repayment of long-term debt obligations
under capital lease 1,000,000
----------
Cash flows provided by (used in)
operating activities 3,600,000
----------
Cash flows from investing activities:
Additions to property, plant and equipment (4,300,000)
Restricted cash related to insolvency
proceedings 0
----------
Cash flows provided by (used in)
operating activities (4,300,000)
----------
Net changes in cash and cash equivalents 5,900,000
Cash and cash equivalents, beginning of period 146,500,000
------------
Cash and cash equivalents, end of period $152,400,000
============
About Quebecor World
Based in Montreal, Quebec, Quebecor World Inc. (TSX: IQW) (NYSE:
IQW) -- http://www.quebecorworldinc.com/-- provides market
solutions, including marketing and advertising activities, well
as print solutions to retailers, branded goods companies,
catalogers and to publishers of magazines, books and other
printed media. It has 127 printing and related facilities
located in North America, Europe, Latin America and Asia. In
the United States, it has 82 facilities in 30 states, and is
engaged in the printing of books, magazines, directories, retail
inserts, catalogs and direct mail.
The company has operations in Mexico, Brazil, Colombia, Chile,
Peru, Argentina and the British Virgin Islands.
Ernst & Young, Inc., the monitor of Quebecor World Inc., and its
affiliates' reorganization proceedings under the Canadian
Companies' Creditors Arrangement Act, filed a petition under
Chapter 15 of the Bankruptcy Code before the U.S. Bankruptcy Court
for the Southern District of New York on September 30, 2008, on
behalf of QWI (Bankr. S.D.N.Y. Case No. 08-13814). The chapter 15
case is before Judge James M. Peck. Kenneth P. Coleman, Esq., at
Allen & Overy LLP, in New York, serves as counsel to the chapter
15 petitioner.
QWI and certain of its subsidiaries commenced the CCAA proceedings
before the Quebec Superior Court (Commercial Division) on
January 20, 2008. The following day, 53 of QWI's U.S.
subsidiaries, including Quebecor World (USA), Inc., filed
petitions under Chapter 11 of the U.S. Bankruptcy Code.
The Honorable Justice Robert Mongeon oversees the CCAA case.
Francois-David Pare, Esq., at Ogilvy Renault, LLP, represents the
Company in the CCAA case. Ernst & Young Inc. was appointed as
Monitor.
Quebecor World (USA) Inc., its U.S. subsidiary, along with other
U.S. affiliates, filed for chapter 11 bankruptcy before the U.S.
Bankruptcy Court for the Southern District of New York (Lead Case
No. 08-10152). Anthony D. Boccanfuso, Esq., at Arnold & Porter
LLP, represents the Debtors in their restructuring efforts. The
Official Committee of Unsecured Creditors is represented by Akin
Gump Strauss Hauer & Feld LLP.
Based in Corby, Northamptonshire, Quebecor World PLC --
http://www.quebecorworldplc.com/-- is the U.K. subsidiary of
Quebecor World Inc. that specializes in web offset magazines,
catalogues and specialty print products for marketing and
advertising campaigns. The company employs around 290 people.
Quebecor PLC was placed into administration with Ian Best and
David Duggins of Ernst & Young LLP appointed as joint
administrators effective Jan. 28, 2008.
QWI is the only entity involved in the CCAA proceedings that is
not a Debtor in the Chapter 11 Cases.
As of June 30, 2008, Quebecor World's unaudited consolidated
balance sheet showed total assets of $3,412,100,000 total
liabilities of $4,326,500,000 preferred shares of $62,000,000
and total shareholders' deficit of $976,400,000.
The Hon. Robert Mongeon of the Quebec Superior Court has extended
until Dec. 14, 2008, the stay under the Canadian Companies'
Creditors Arrangement Act.
(Quebecor World Bankruptcy News, Issue No. 28; Bankruptcy
Creditors' Service Inc., http://bankrupt.com/newsstand/or
215/945-7000)
RED MOUNTAIN: Case Summary & Largest Unsecured Creditor
-------------------------------------------------------
Debtor: Red Mountain Farming, LLC
13415 Bridges Avenue
Yuma, Arizona 85365
Bankruptcy Case No.: 08-14184
Chapter 11 Petition Date: October 14, 2008
Court: District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: John R. Worth, Esq.
jrw@fwlawaz.com
Forrester & Worth, PLLC
3636 N. Central Avenue, Suite 700
Phoenix, AZ 85012
Tel: (602) 258-2728
Fax: (602) 271-4300
Total Assets: $3,500,152
Total Debts: $5,016,207
A list of the Debtor's largest unsecured creditors is available
for free at:
http://bankrupt.com/misc/azb08-14184.pdf
RENFRO CORPORATION: Weak Performance Cues Moody's to Cut Ratings
----------------------------------------------------------------
Moody's Investors Service downgraded Renfro Corporation's
corporate family rating to B3 from B2 and the probability of
default rating to Caa1 from B3. The rating on the company's
$134 million senior secured term loan was affirmed at B2. The
rating outlook is negative.
The downgrades reflect the company's weaker than expected
operating performance and credit metrics, which stem mainly from
continued inventory and order reductions at retail customers in
light of disappointing retail sales, as well as increased costs
and a less favorable sales mix. As a result, credit metrics are
weaker than anticipated and covenant compliance is tight. Average
debt/EBITDA exceeded 6.5 times for the latest twelve month period
ended July 26, 2008; exceeding the level that Moody's previously
stated would result in a downgrade.
The negative ratings outlook reflects the expectation that
operating challenges throughout the retail industry are likely to
continue to pressure results. Also, given upcoming contractual
tightening of its financial covenants, compliance could become
tenuous should operating performance not materially improve in the
near-term.
These ratings were downgraded:
-- Corporate family rating to B3 from B2
-- Probability of Default Rating to Caa1 from B3
These rating was affirmed:
--Senior secured term loan facility at B2 (LGD3, 31%)
The Prior Rating action on Renfro was in September 2006, when
Moody's assigned a B2 first time CFR in conjunction with its
acquisition by Kelso & Company.
Renfro Corporation is a manufacturer and distributor of socks with
estimated revenue near $400 million. The company primarily
designs and distributes socks under license from third parties
including "Fruit of the Loom", "Levi", "Starter", "Dr Scholl's"
and "Polo Ralph Lauren".
REVLON CONSUMER: S&P Lifts Ratings on Improved Financial Profile
----------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on New York City-based Revlon Consumer Products Corp. to
'B-' from 'CCC+'. S&P also raised the ratings on Revlon's
$840 million senior secured term loan due 2012 to 'B' from 'B-'.
The recovery rating on this loan remains '2', indicating the
expectation for substantial recovery in the event of a payment
default. In addition, S&P raised the ratings on Revlon's 9.5%
senior unsecured notes to 'CCC+' from 'CCC', although the '5'
recovery rating on these notes is also unchanged, indicating the
expectation for modest recovery in the event of a payment default.
S&P removed all debt ratings from CreditWatch with positive
implications, where they were placed on Aug. 7, 2008, following
the company's continued sales and EBITDA improvement despite
challenging economic conditions, primarily due to higher global
shipments of Revlon color cosmetics and improved operating
efficiency. The outlook is stable. About $1.4 billion of total
reported debt was outstanding at June 30, 2008.
"The upgrade reflects Revlon's enhanced financial profile,
primarily attributed to sustained improvement in the company's
profitability, recent positive cash flow generation, and stronger
credit protection measures," said Standard & Poor's credit analyst
Mark Salierno.
SAINT PETER'S COLLEGE: Moody's Withdraws Rating on Bond Redemption
------------------------------------------------------------------
Moody's Investors Service has withdrawn its Ba1 long-term rating
assigned to Saint Peter's College's Revenue Bonds, 1998 Series B
issued through the New Jersey Educational Facilities Authority.
The rating has been withdrawn due to the full redemption of the
College's 1998 Series B bonds. The College has no outstanding
debt with a Moody's underlying rating based on its own credit
quality.
SANKATY HIGH: Poor Credit Market Value Cues Moody's to Cut Ratings
------------------------------------------------------------------
Moody's Investors Service has downgraded its ratings of the
classes of notes issued by Sankaty High Yield Partners II, L.P.,
and left them on review for possible further downgrade:
Class Description: $26,000,000 Class B Fixed Rate Notes
-- Prior Rating: A2, on review for possible downgrade
-- Prior Rating Date: 10/10/2008
-- Current Rating: Baa2, on review for possible downgrade
Class Description: $31,000,000 Class B Floating Rate Notes
-- Prior Rating: A2, on review for possible downgrade
-- Prior Rating Date: 10/10/2008
-- Current Rating: Baa2, on review for possible downgrade
Class Description: $43,000,000 Class C Fixed Rate Notes
-- Prior Rating: Baa2, on review for possible downgrade
-- Prior Rating Date: 10/10/2008
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $34,000,000 Class C Floating Rate Notes
-- Prior Rating: Baa2, on review for possible downgrade
-- Prior Rating Date: 10/10/2008
-- Current Rating: Ba2, on review for possible downgrade
Class Description: $16,500,000 Class D Fixed Rate Notes
-- Prior Rating: Ba2, on review for possible downgrade
-- Prior Rating Date: 10/10/2008
-- Current Rating: B2, on review for possible downgrade
Class Description: $21,000,000 Class D Floating Rate Notes
-- Prior Rating: Ba2, on review for possible downgrade
-- Prior Rating Date: 10/10/2008
-- Current Rating: B2, on review for possible downgrade
Class Description: $22,500,000 Class E Floating Rate Notes
-- Prior Rating: B2, on review for possible downgrade
-- Prior Rating Date: 10/10/2008
-- Current Rating: Caa2, on review for possible downgrade
The rating actions reflect deterioration in the market value of
the underlying collateral pool and the increased volatility and
decreased liquidity in the bank loan market, as well as the
violation of over-collateralization tests on October 8, 2008, as
reported by Sankaty High Yield Partners II, L.P.
Sankaty High Yield Partners II, L.P. is a market value
collateralized loan obligation transaction backed primarily by
bank loans.
SANLUIS CORPORACION: Fitch Junks Foreign & Local Currency IDRs
--------------------------------------------------------------
Fitch Ratings has downgraded SANLUIS Corporacion, S.A. de C.V.
ratings as:
-- Foreign and local currency Issuer Default Rating to 'CC' from
'B-';
-- Senior secured restructured credit facility rating to
'CC/RR5' from 'B-/RR4';
-- Mandatory convertible notes and debenture notes ratings to
'CC/RR6' from 'CCC+/RR5'.
Fitch has also downgraded the rating of SANLUIS Rassini
Autopartes, S.A. de C.V.
-- Foreign and local currency IDR to 'CC' from 'B-'.
The ratings remain on Rating Watch Negative.
The ratings of SANLUIS were placed on Rating Watch Negative on
June 16, 2008, reflecting the company's weak liquidity position
and the growing concern that cash-on-hand plus cash flow
generation throughout the year would not be sufficient to amortize
scheduled debt in 2008 assuming a downside case. At that time,
the agency had expected that a continuing performance
deterioration in 2008 due to American Axle strike coupled with
further announcements of future production cuts by OEMs and change
in consumer preference would complicate the company's ability to
refinance its debt.
Management had expected 2008 full year EBITDA to come in at around
US$60 million versus last 12 months EBITDA at the end of March of
US$70 million and US$76.7 million at the end of December 2007.
However, further deterioration has caused the company to revise
its full year EBITDA projections to between US$40 million and
US$45 million.
In order to address the deterioration in the company's cash flow
generation, SANLUIS began negotiating with its senior secured
lenders to reschedule all remaining amortization payments but not
the final maturity, which is likely to remain June 2010. On
Sept. 15, 2008, the company announced that it had entered into a
30 day Standstill period with its lenders, which froze the
September amortization payment. During the 30-day Standstill, the
company expects to reach an agreement with its lenders to amend
the scheduled amortization payments in order to reduce cash flow
pressures and allow the company to weather the current difficult
market situation.
Fitch views the Standstill agreement as a positive sign that
SANLUIS lenders are willing to negotiate and that a final
agreement to be reached within the 30 day period is probable. The
finalization of the rescheduling agreement would also be viewed as
a positive step in order for SANLUIS to remain a going concern and
to allow management to concentrate on addressing the changes in
its industry.
However, the much lower revised EBITDA expectation for 2008, the
probability of higher interest rate costs and Fitch's expectation
of further deterioration in North America auto industry has caused
SANLUIS risk profile to worsen. Consequently, Fitch believes
refinancing risk in 2010 remains high.
The Rating Watch Negative reflects the pending negotiations
between SANLUIS and its senior secured restructured credit
facility lenders. Further downgrades are possible if the company
is unable to achieve a viable payment rescheduling amendment of
its facility or depending on the structure of the rescheduling.
The Rating Watch Negative could be removed if the company is able
to reach a viable agreement with its lenders.
SANLUIS is the world's largest producer of leaf springs, where it
is the predominant or sole supplier for the top-selling brands and
produce substantially all of GM's, Ford's and Chrysler's leaf
spring requirements. The company operates manufacturing
facilities in the United States, Mexico, and Brazil.
SCOTTISH RE: S&P Retains Ratings Under Negative CreditWatch
-----------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on
Scottish Re Group Ltd. (CCC-/Watch Neg/--; Scottish Re) and
Scottish Re's core operating companies--Scottish Annuity & Life
Insurance Co. (Cayman) Ltd., Scottish Re (U.S.) Inc., and Scottish
Re Life Corp. (CCC+/Watch Neg/--)--remain on CreditWatch with
negative implications. The ratings on all these companies'
dependent unwrapped securitized deals also remain on CreditWatch
negative.
Standard & Poor's placed these ratings on CreditWatch on Jan. 31,
2008, and subsequently lowered them to the current level because
of greater-than-expected deterioration in the group's already
severely limited financial flexibility and liquidity. This
primarily resulted from higher-than-expected asset impairments
leading to additional collateral posting requirements.
"It is our opinion that the only strong option available to the
company for preserving longer-term solvency is the sale of its
North American segment, which constitutes the bulk of its
remaining operations," noted Standard & Poor's credit analyst
Robert A. Hafner.
SEA CONTAINER: To Forgive $3 Million in Intercompany Receivables
----------------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
granted the request of Sea Containers Ltd. to forgive $3,000,000
in intercompany receivables owed by subsidiary Charleston Marine
Containers, Inc. The release was sought in connection with the
sale of Charleston to Gichner Systems Group, Inc.
For the avoidance of doubt, Judge Carey said, nothing in the order
will be deemed to result in the forgiveness of any obligations
owing from Charleston to any party, including SCL, Sea Containers
America, Inc., or Sea Containers Treasury Limited.
Judge Carey further ruled that all rights and defenses are
reserved with respect to (i) the Services Agreement, (ii) the
appropriate allocation of costs, intercompany or other
obligations, and (iii) the appropriate allocation of proceeds
realized from the sale of the Charleston stock.
Prior to the Court's ruling, Laura Barlow, the Debtors' interim
chief financial officer and chief restructuring officer, submitted
to the Court a declaration supporting the request.
Ms. Barlow said that based on her knowledge of the contemplated
transactions, she believes that it is in the best interests of the
bankruptcy estates to forgive the Intercompany Receivable to
facilitate the sale of the Charleston stock, and as a result,
would enable the estates to avoid approximately $2,300,000 in
potential liability to Pension Benefit Guaranty Corporation.
"Forgiving the Intercompany Receivable also advances the Debtors'
overall strategy in these chapter 11 cases and the Plan [of
Reorganization], which is the winddown and sale of non-core assets
and the possible repatriation of proceeds to SCL for distribution
to its creditors," Ms. Barlow told the Court.
Gichner System's Statement
Gichner Systems Group, Inc., the leading supplier of tactical
military shelters to the US Armed Forces, announced that it has
cquired Charleston Marine Containers, Inc. ("CMCI"), located in
Charleston, South Carolina. CMCI is the leading domestic
manufacturer of intermodal, modular intermodal, and specialty
container systems for the US Armed Forces.
CMCI's products are in use worldwide and include numerous patented
containers and container systems including the Quadcon, Tricon,
Bicon, Tricold(R) and Quadcold TM containers. The operations of
CMCI are to remain based in Charleston, and the company will
continue to operate and trade using the CMCI name.
Altus Capital Partners LLC and Dunrath Capital, Inc., along with
Gichner management and other investors, provided the equity for
the acquisition. Altus Capital and Dunrath Capital, as co-equity
investors with Gichner management, acquired Gichner in August
2007.
Commenting on the acquisition, Thomas E. Mills IV, Gichner
President and CEO, stated, "The acquisition of CMCI is a key
element of Gichner's growth plan. The employees and operations in
Charleston are impressive. CMCI provides new products and new
markets for Gichner, in addition to over 240,000 square feet of
additional manufacturing capacity, bringing Gichner's total
manufacturing capacity to over 600,000 square feet. With the
addition of CMCI, Gichner's total annual revenues are approaching
$100 million with funded contract backlog of approximately
$70 million. Together with the additional talent of the CMCI
employees, Gichner and CMCI should continue to increase sales in
both businesses."
Mr. Mills continued, "The vast majority of the acquisition is
being funded with equity, which should provide Gichner and CMCI
with the financing required to generate increased sales.
CMCI's customers will continue to enjoy high-quality products
delivered in a timely manner and on schedule by CMCI's highly-
skilled and dedicated Charleston-based production and management
teams. Customers should continue to contact their appropriate CMCI
representative."
Elizabeth Burgess, a senior partner of Altus Capital Partners,
Inc., said, "This acquisition demonstrates Altus Capital's
commitment to helping Gichner and our other portfolio companies
make strategic acquisitions that expand market share and create
operating efficiencies, even during difficult financing periods.
Altus Capital helped both to initiate this important transaction
as well as to provide the majority of the capital required."
Steve Beitler, senior managing director of Dunrath Capital and a
retired Army officer, said, "The combination of Gichner and CMCI
provides significant potential for innovation in the field of
military containerization. We expect many new products to evolve
as a result of the combined research and engineering talent of the
newly merged companies."
About Gichner Systems Group
Gichner Systems Group is a leader in the development of solutions
for the transport and protection of mobile electronic systems.
Gichner products protect military personnel and electronic and
other systems from the environment during transport and operation
in some of the world's harshest environments. Gichner Shelter
Systems provides turn-key systems that are "rack ready" for the
installation of its customers' electronic systems and service,
maintenance, reset and repair of existing shelter systems. The
Commercial and Emergency Mobile Systems division designs and
manufactures specialized commercial products including high end
truck bodies, fire safety trainers, mobile command posts and first
responder systems for use by commercial, municipal and homeland
security customers. For more information about Gichner Systems
Group, call us at 717-246-5453 or visit us at www.gichner.us.
About Altus Capital Partners LLC
Based in Westport, CT, Altus Capital Partners --
http://www.altuscapitalpartners.com-- is a private equity firm
that creates value by purchasing and growing profitable small to
middle market manufacturing businesses with unrealized potential.
Altus is led by a proven, seasoned deal-making team of high
integrity that invests alongside management to help seize current
growth opportunities through due diligence and leadership in long-
term strategic thinking. With over 50 years of investment
experience, the Altus team utilizes its extensive knowledge of the
private equity cycle to optimize company value through structured
buyouts, recapitalizations, consolidations and divestitures.
Altus' investment strategy builds businesses, fosters company
loyalty and provides jobs.
About Dunrath Capital, Inc.
Based in Chicago, Dunrath Capital is a private equity firm that
leverages the partnership's collective experiences in private
equity investing, operations, government and entrepreneurship in
combination with a pro-active, research-based investment strategy
to create value for its portfolio companies and investors. While
the Dunrath partnership has investment experience and a portfolio
ranging from commercializations to leveraged buyouts, the firm has
a focus on growth stage or earlier companies. The firm's current
targeted investment sectors include safety, security, and defense.
On the Net: http://www.dunrath.com
Based in Hamilton, Bermuda, Sea Containers Ltd. --
http://www.seacontainers.com/-- provides passenger and freight
transport and marine container leasing. Registered in Bermuda, the
company has regional operating offices in London, Genoa, New York,
Rio de Janeiro, Sydney, and Singapore. The company is owned almost
entirely by United States shareholders and its primary listing is
on the New York Stock Exchange (SCRA and SCRB) since 1974. On Oct.
3, the company's common shares and senior notes were suspended
from trading on the NYSE and NYSE Arca after the company's failure
to file its 2005 annual report on Form 10-K and its quarterly
reports on Form 10-Q during 2006 with the U.S. Securities and
Exchange Commission.
Through its GNER subsidiary, Sea Containers Passenger Transport
operates Britain's fastest railway, the Great North Eastern
Railway, linking England and Scotland. It also conducts ferry
operations, serving Finland and Estonia as well as a commuter
service between New York and New Jersey in the U.S.
Sea Containers Ltd. and two subsidiaries filed for chapter 11
protection on Oct. 15, 2006 (Bankr. D. Del. Case No. 06-11156).
Edmon L. Morton, Esq., Edwin J. Harron, Esq., Robert S. Brady,
Esq., Sean Matthew Beach, Esq., and Sean T. Greecher, Esq., at
Young, Conaway, Stargatt & Taylor, represent the Debtors in their
restructuring efforts.
The Official Committee of Unsecured Creditors and the Financial
Members Sub-Committee of the Official Committee of Unsecured
Creditors of Sea Containers Ltd. is represented by William H.
Sudell, Jr., Esq., and Thomas F. Driscoll, Esq., at Morris,
Nichols, Arsht & Tunnell LLP. Sea Containers Services, Ltd.'s
Official Committee of Unsecured Creditors is represented by
attorneys at Willkie Farr & Gallagher LLP.
In its schedules filed with the Court, Sea Containers disclosed
total assets of US$62,400,718 and total liabilities of
US$1,545,384,083. (Sea Containers Bankruptcy News, Issue No. 53;
Bankruptcy Creditors' Service, Inc.,
http://bankrupt.com/newsstand/or 215/945-7000)
SFD@HOLLYWOOD: Case Summary & 11 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: SFD@Hollywood, LLC
1818 Hollywood Blvd.
Hollywood, FL 33020
Bankruptcy Case No.: 08-25185
Chapter 11 Petition Date: October 14, 2008
Court: Southern District of Florida (Fort Lauderdale)
Judge: Raymond B. Ray
Debtor's Counsel: Thomas M. Messana, Esq.
tmessana@mws-law.com
Messana Weinstein & Stern, P.A.
401 E Las Olas Blvd., # 1400
Fort Lauderdale, FL 33301
Tel: (954) 712-7400
Fax: (954) 712-7401
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/flsb08-25185.pdf
SOLIDUS NETWORKS: Court Converts Cases to Chapter 7 Liquidation
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
approved on Oct. 8, 2008, the conversion of Solidus Networks Inc.
dba Pay by Touch and its debtor affiliates' Chapter 11 cases to
cases under Chapter 7.
Prior to the request, the Debtors determined that the estates'
current cash is insufficient to pay future administrative
expenses, prior administrative expenses, all estimated allowed
"gap period" claims entitled to statutory priority under Sec.
507(a)(3) of the Bankruptcy Code, and the estimated allowed claims
of employees entitled to priority under Sec. 507(a)(4) of the
Bankruptcy Code.
In view of the foregoing, the Debtors determined, with the
concurrence of the Creditors' Committee, that confirmation of a
liquidating plan is not feasible and is not the most efficient use
of the estates' remaining resources. This determination led the
Debtors to ask the Court for the conversion of their cases to
Chapter 7.
Headquartered in Culver City, California, Solidus Networks Inc.,
dba Pay By Touch -- http://www.paybytouch.com/-- provides
biometric authentication, personalized marketing and payment
solutions.
Gregg Eyman, James C. Lee and Laura Schoep Lee filed an
involuntary Chapter 11 petition against the company on Oct. 31,
2007, (Bankr. C.D. Calif. Case Number. 07-20027) Robert M.
Yaspan, Esq. of the Law Offices of Yaspan & Thau, represented the
petitioners.
On Dec. 14, 2007, the Debtors gave their consent to the entry of
an order for chapter 11 bankruptcy relief. That order was entered
by the Hon. Thomas B. Donovan on Dec. 17, 2007. Bruce Bennett,
Esq., James O. Johnston, Esq., and Joshua M. Mester, Esq., at
Hennigan, Bennett & Dorman LLP, represent the Debtor in its
restructuring efforts. The Debtors' schedules show total assets
of $75,698,454 and total liabilities of $330,618,305.
The United States Trustee for Region 16 has established a four-
member official committee of unsecured creditors in the Debtors'
cases. Nathan A. Schultz, Esq. represents the Official
Committee of Creditors Holding Unsecured Claims.
SOVEREIGN BANCORP: Santander Deal Prompts Fitch's Positive Watch
----------------------------------------------------------------
Fitch Ratings has placed the long-term and short-term Issuer
Default Ratings of Sovereign Bancorp on Rating Watch Positive
following a definitive agreement to be acquired by Banco
Santander. Under the agreement, Santander, which currently owns
24.3% of Sovereign, will acquire the rest of Sovereign in a stock
swap transaction currently valued at $1.9 billion. The prospect
of being wholly-owned by highly rated Santander is a credit
positive event for Sovereign, in Fitch's view. This transaction
is expected to close in first-quarter 2009 and is subject to
regulatory and shareholder approvals.
Recognizing the financial performance pressures at Sovereign Bank,
its Individual Rating has been lowered to 'C', a level in line
with Sovereign Bancorp's Individual rating. In 3Q08, after-tax
losses at Sovereign resulted from charges on Freddie/Fannie
preferred stock and CDOs, combined with higher loan loss
provisions. Despite the negative asset quality trend, Sovereign's
non-performing loan ratio remains comparatively favorable, and
coverage of non-performers by loan loss reserves remains well
above 100%. Stemming from bottom line losses, capital ratios
declined yet remained above 'well-capitalized' regulatory levels.
Fitch placed Santander's long-term IDR of 'AA' on Rating Watch
Negative while its short-term IDR was affirmed at 'F1+'. While
the Sovereign transaction gives Santander a good opportunity to
diversify further its business mix and boost its banking business
in the U.S. market, it is currently in the process of integrating
franchises in the UK and in Brazil under complex operating
conditions.
Furthermore, Santander has tended to manage capital tightly and
Fitch would like to evaluate whether capital levels will remain
adequate following the integration of all these franchises.
Santander is the parent of one of the largest banking groups
globally.
Fitch has placed these ratings on Rating Watch Positive:
Sovereign Bancorp, Inc.
-- Long-term IDR 'BBB-';
-- Senior Debt 'BBB-';
-- Short-term IDR 'F3';
-- Support at '3'.
Sovereign Bank
-- Long-term IDR 'BBB';
-- Long-term Deposits 'BBB+';
-- Subordinated Debt 'BBB-';
-- Short-term IDR 'F2';
-- Short-term Deposits 'F2';
-- Support at '3'.
Sovereign Capital Trust I, IV-VI
-- Preferred Stock 'BB'.
ML Capital Trust I
-- Preferred Stock 'BB'.
Sovereign Real Estate Investment Trust
-- Preferred Stock 'BB+'.
In addition, Fitch has affirmed the following rating:
Sovereign Bancorp, Inc.
-- Individual 'C'.
Fitch has downgraded the following rating:
Sovereign Bank
-- Individual to 'C' from 'B/C'.
SPACEHAB INC: Bid Price Non-Compliance Cues Delisting Notice
------------------------------------------------------------
SPACEHAB, Incorporated, received a NASDAQ Staff Determination
letter on Oct. 7, 2008, indicating that the company has failed
to regain compliance with NASDAQ Marketplace Rule 4310(c)(4),
and that its securities are, therefore, subject to delisting
from The NASDAQ Capital Market.
Marketplace Rule 4310(c)(4) requires that the company maintain a
$1.00 bid price for its common stock traded on the NASDAQ Capitol
Market Exchange. After earlier notices of non-compliance with
the requirement, the company was granted a grace period, which
expired on Oct. 6, 2008.
The company plans to request a hearing before a NASDAQ Listing
Qualifications Panel to present its plan of compliance and
request continued listing pending the completion of the plan.
However, there can be no assurance the Panel will grant the
company's request for continued listing.
Headquartered in Webster, Texas, SPACEHAB Inc. (Nasdaq: SPAB) --
http://www.spacehab.com/-- offers space access and payload
integration services, production of valuable commercial products
in space, spacecraft pre-launch processing facilities and
services, development and extension of space-based products to the
consumer market, and program and engineering support ranging from
development and manufacturing of flight hardware to large scale
government project management.
SPANISH BROADCASTING: Moody's Junks Corporate Family Rating
-----------------------------------------------------------
Moody's Investors Service downgraded the ratings, including the
corporate family and probability of default ratings, for Spanish
Broadcasting System, Inc. to Caa1 from B3. The inability to draw
down its full $25 million revolver, combined with continued
deterioration of industry fundamentals, pressures the company's
already limited liquidity position.
Furthermore, Moody's believes leverage will likely remain above
the 10 times debt-to-EBITDA level necessary to sustain its B3
rating. All ratings are placed on review for further possible
downgrade, and the review will focus on management's strategy for
its startup television business, which continues to consume cash,
and its ability to improve its liquidity, either through cost
reductions or external sources.
On October 3, Spanish Broadcasting requested to draw down
$25 million from its $25 million revolving credit facility but
received an aggregate of only $15 million as a result of Lehman
Commercial Paper Inc.'s failing to fund its $10 million portion of
the facility due to its bankruptcy filing. Additional liquidity
consists of balance sheet cash of $39 million as of June 30, 2008.
Funding needs include an $18.5 million obligation maturing in
January 2009.
Furthermore, the company continues to consume cash at an
accelerating rate, with negative free cash flow of approximately
$20 million for the trailing twelve months ended June 30, 2008,
compared to negative $2 million in 2007 and positive $1 million in
2006.
Spanish Broadcasting System, Inc.
-- Probability of Default Rating, Downgraded to Caa1 from B3
-- Corporate Family Rating, Downgraded to Caa1 from B3
-- Senior Secured Bank Credit Facility, Downgraded to Caa1 from
B3, LGD3, 49%
-- Preferred Stock, Downgraded to Caa3 from Caa2, LGD6, 99%
-- All ratings are under review for possible downgrade.
On June 19, 2008, Moody's lowered Spanish Broadcasting's CFR to B3
from B2, reflecting ongoing deterioration since Moody's last
downgraded ratings in October 2007.
Spanish Broadcasting System, Inc., headquartered in Coconut Grove,
Florida, owns and operates 21 radio stations and two television
stations targeting the Hispanic audience. Its annual revenue is
approximately $175 million.
SPARTON CORP: Gets Equity Value Non-Compliance Notice from NYSE
--------------------------------------------------------------
Sparton Corporation was notified by the New York Stock Exchange
that it is no longer in compliance with the NYSE's continued
listing standards. Sparton is considered below the criteria since
the company's market capitalization was less than $75 million over
a 30 trading-day period and, at the same time, its shareowners'
equity was less than $75 million. As of Sept. 29, 2008, the
company's 30 trading-day average market capitalization was
$34.8 million, and in its Annual Report on Form 10-K as of
June 30, 2008, the company reported shareholders' equity of
$70.9 million.
Under applicable NYSE procedures, the company has 45 days from the
receipt of the notice to submit a plan to the NYSE to demonstrate
its ability to achieve compliance with the continued listing
standards within 18 months. Sparton intends to submit a plan,
which will likely include many of the elements regarding its focus
on returning to profitability and improving cash flow.
Headquartered in Jackson, Michigan, Sparton Corporation (NYSE:
SPA) is a provider for electronics to technology-driven companies
in diverse markets. The company provides its customers with
sophisticated electronic and electromechanical products through
prime contracts and through contract design and manufacturing
services. Sparton has six manufacturing locations world-wide.
STRATA 2006-34: Moody's Chips Rating on $9MM Notes to Ba2 from A2
-----------------------------------------------------------------
Moody's Investors Service has downgraded its rating of the notes
issued by Strata 2006-34 Ltd:
Class Description: $9,000,000 Floating Rate Notes due December 21,
2013
-- Prior Rating: A2
-- Prior Rating Date: 3/21/2007
-- Current Rating: Ba2
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on
September 25, 2008 and subsequently virtually all of its assets
were sold to JPMorgan Chase, and Fannie Mae and Freddie Mac, which
were placed into the conservatorship of the U.S. government on
September 8, 2008.
SVSS INC: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: SVSS, Inc.
658 N. King Road
San Jose, CA 95133
Bankruptcy Case No.: 08-55844
Type of Business: The Debtor owns a warehouse.
Chapter 11 Petition Date: October 14, 2008
Court: Northern District of California (San Jose)
Judge: Roger L. Efremsky
Debtor's Counsel: David A. Boone, Esq.
ecfdavidboone@aol.com
Law Offices of David A. Boone
1611 The Alameda
San Jose, CA 95126
Tel: (408) 291-6000
Estimated Assets: Less than $50,000
Estimated Debts: $10,000,000 to $50,000,000
The Debtor did not file a list of 20 largest unsecured creditors.
TIERS(R) CALIFORNIA: Moody's Cuts $41MM Credit Trusts Rating to B1
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Moody's Investors Service has downgraded its ratings of the notes
issued by TIERS(R) California Floating Rate Credit Linked Trust,
Series 2006-3:
Class Description: $41,000,000 TIERS(R) California Floating Rate
Credit Linked Trust, Series 2006-3
-- Prior Rating: Baa3
-- Prior Rating Date: July 7, 2008
-- Current Rating: B1
According to Moody's, the rating actions are the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, and Fannie
Mae and Freddie Mac, which were placed into the conservatorship of
the U.S. government on September 8, 2008.
TIERS FLORIDA: Moody's Junks Rating on $15MM Floating Rate Certs.
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Moody's Investors Service has downgraded its rating of the
certificates issued by TIERS Florida Floating Rate Credit Linked
Trust, Series 2005-15:
Class Description: $15,000,000 TIERS Florida Floating Rate Credit
Linked Trust Certificates, Series 2005-15
-- Prior Rating: Ba3
-- Prior Rating Date: 7/7/2008
-- Current Rating: Caa2
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on Sept. 25,
2008 and subsequently virtually all of its assets were sold to
JPMorgan Chase, and Fannie Mae and Freddie Mac, which were placed
into the conservatorship of the U.S. government on September 8,
2008.
TIERS FLOATING: Credit Quality Slide Cues Moody's to Cut Rating
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Moody's Investors Service has downgraded its rating of the
certificates issued by TIERS Floating Rate Credit Linked Trust,
Series 2005-12:
Class Description: $7,500,000 TIERS Floating Rate Credit Linked
Trust Certificates, Series 2005-12
-- Prior Rating: Caa1
-- Prior Rating Date: 7/7/2008
-- Current Rating: Ca
According to Moody's, the rating action is the result of
deterioration in the credit quality of the transaction's reference
portfolio, which includes but is not limited to exposure to Lehman
Brothers Holdings Inc., which filed for protection under Chapter
11 of the U.S. Bankruptcy Code on September 15, 2008, Washington
Mutual Inc., which was seized by federal regulators on Sept. 25,
2008 and subsequently virtually all of its assets were sold to
JPMorgan Chase, and Fannie Mae and Freddie Mac, which were placed
into the conservatorship of the U.S. government on September 8,
2008.
TOUSA INC: Files Joint Chapter 11 Plan & Disclosure Statement
-------------------------------------------------------------
TOUSA, Inc. and certain of its subsidiaries, filed a Plan of
Reorganization and related Disclosure Statement with the U.S.
Bankruptcy Court for the Southern District of Florida, Fort
Lauderdale Division.
"The filing of our Plan of Reorganization is an important
achievement and we are excited to announce this development. We
have made significant progress over the past nine months in
restructuring our operations and have transformed our business in
this very difficult market environment. Our 'stand-alone' Plan
of Reorganization includes a substantial reduction in our debt
obligations, allowing us to emerge from Chapter 11 with a
stronger balance sheet and greater financial flexibility that
will position TOUSA to compete effectively in the industry and to
continue to deliver quality homes to our customers," said TOUSA
CEO and President, John R. Boken.
Key provisions of the Company's Plan, as filed with the Bankruptcy
Court, include:
* The conversion of more than $300 million in Second Lien
debt to equity and full ownership of the restructured
enterprise, subject to the outcome of certain litigation.
* Use of the Company's significant cash balance at
emergence, which is expected to be in the range of $125
million to $145 million, to fund operations post-
emergence.
* The extinguishment of approximately $1 billion in bond
debt and approximately $600 million of other unsecured
obligations.
* The creation and funding of a litigation trust for the
purpose of continuing to pursue certain claims, including
the Creditors' Committee Action, challenging the liens of
certain secured creditors of TOUSA, and the distribution
of litigation trust interests to unsecured creditors,
while at the same time preserving the status quo of the
relative rights, claims and defenses of all parties to the
Committee Action, including the defendants named therein.
* Issuance of new first lien debt to the Company's first
lien bank creditors such that they will receive full
payment of their claims, subject to the outcome of certain
litigation.
* Issuance of $15 million in new second lien debt to the
Company's second lien bank creditors in partial
satisfaction of their claims, subject to the outcome of
certain litigation.
* Current holders of TOUSA common stock will receive no
distribution, and those securities will be canceled and
shall be of no further force or effect.
"The filing of our Plan of Reorganization represents the
culmination of an extensive effort to identify and pursue
numerous opportunities to restore TOUSA's financial health and
maximize recoveries for our creditors. As we move through the
next stages of this process, we will continue to work closely
with the holders of our second lien debt, and our other creditor
constituencies, to explore potential variations that may result
in modifications to certain aspects of the Plan of
Reorganization," added Mr. Boken.
Upon emergence from Chapter 11, the TOUSA enterprise will continue
to be a leading national homebuilder. Moreover, the Company's
non-debtor affiliates Universal Land Title, Inc., Preferred Home
Mortgage Company and Alliance Insurance and Information Services
will remain an integral part of Company operations and an
important element of TOUSA's service offering.
The Plan consists of separate Chapter 11 plans for each of the 39
Debtor entities. However, the plans for the majority of the
Debtors provide for identical treatment for similarly situated
classes of creditors.
The Disclosure Statement includes an overview of the Company's
restructuring progress and other information about the Company, a
description of distributions to creditors and an analysis of the
Plan's feasibility, as well as many of the technical matters
required prior to exiting from Chapter 11, such as descriptions of
who will be eligible to vote on the Plan and the voting process.
Copies of the Plan and Disclosure Statement materials can be
found at www.tousa.com/reorg. In addition, TOUSA will file a
Form 8-K with the Securities and Exchange Commission,
www.sec.gov.
Other Specific Plan Provisions
As noted in the company's statement, the TOUSA Plan consists of
separate Chapter 11 plans for each of the 39 Debtors. However,
as majority of the Plans provide for identical treatment of
similarly situated classes of creditors, the Plan groups the
Debtors as (1) TOUSA, Inc., (2) the Subsidiary Debtors, and (3)
Beacon Hill at Mountain's Edge, LLC.
TOUSA Inc. is the parent company of each of the 38 Debtors.
TOUSA Inc. will be liquidated under the Plan.
The Subsidiary Debtors include each of the other Debtors other
than TOUSA Inc. and Beacon Hill. The Plan provides that one
group of the Subsidiary Debtors, the "Reorganizing Subsidiary
Debtors," will continue to operate and exist after the Effective
Date as wholly owned subsidiaries of New TOUSA, an entity
established under the Plan. The second group of the Subsidiary
Debtors, the "Non-Operating Subsidiary Debtors," do not have
substantial assets and business operations. The Non-Operating
Subsidiary Debtors will merge with New TOUSA on the day after the
Plan Effective Date.
Beacon Hill was formerly a joint venture of TOUSA Homes that
became a wholly owned subsidiary of TOUSA Homes after the
Petition Date. It filed a voluntary petition under Chapter 11 on
August 4, 2008. Under the Plan, the equity interests in Beacon
Hill will re-vest in TOUSA Homes, Inc., a Reorganizing Subsidiary
Debtor. Thus, Beacon Hill will become a wholly owned indirect
subsidiary of New TOUSA through TOUSA Homes' ownership of Beacon
Hill's equity. Because the Reorganizing Subsidiary Debtors and
Beacon Hill will continue to exist and operate after the
Effective Date, the Plan refers to Beacon Hill and the
Reorganizing Subsidiary Debtors as they will exist after the
Effective Date as the "Reorganized Debtors."
A list of the Reorganizing Subsidiary Debtors and Non-Operating
Subsidiary Debtors can be accessed for free at:
http://bankrupt.com/misc/TOUSA_DebtorsList.pdf
Issuance of New Notes
The TOUSA Plan contemplates that New TOUSA will acquire all of
the equity interests of TOUSA Inc. and the Subsidiary Debtors.
As additional consideration for acquiring those assets, New TOUSA
will issue these secured notes to the Debtors:
1. New Revolver Note, which will be a five-year term loan
facility, in an aggregate amount of all "Original
Obligations," which amount will be set forth in the
Confirmation Order and will not exceed $184,430,158, all
subject to reduction in accordance with certain claims
adjustments.
2. New First Lien Note, which will be a five-year term loan
facility, in an aggregate amount of all "Original
Obligations," which amount will be set forth in the
Confirmation Order and will not exceed $128,106,376, all
subject to reduction in accordance with certain claims
adjustments
3. New Second Lien PIK Note, which will have a face amount of
$15 million.
Each of the Reorganizing Debtors will guarantee the repayment of
each of the new notes, and will secure the guarantee with a
pledge of substantially all of its assets.
New TOUSA Board
The board of directors of New TOUSA will consist of five
directors, comprised of the chief executive officer of New TOUSA
and four directors designated by the Second Lien Lenders in their
sole and absolute discretion.
The Debtors intend to file with the Court their Liquidation
Analysis and their Financial Projections in relation to the Plan
in the first week of November 2008.
The Debtors urge the Court to set hearing on January 21, 2008, to
consider confirmation of their Plan. Any objections to the Plan
must be filed no later than January 12.
A full-text copy of the TOUSA Joint Plan is available for free
at: http://bankrupt.com/misc/TOUSA_ReorgPlan.pdf
A full-text copy of the Disclosure Statement is available for
free at: http://bankrupt.com/misc/TOUSA_DiscStatement.pdf
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider. Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008.
(TOUSA Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TOUSA INC: Classification & Treatment of Claims Under the Plan
--------------------------------------------------------------
The Joint Plan of Reorganization of TOUSA Inc. and its debtor
affiliates designates claims and interests into these classes and
provides for the treatment of those claims and interests.
The claim classification are divided into those that pertain to
claims against all Debtors; claims against TOUSA Inc.; claims
against the Subsidiary Debtors other than TOUSA Inc. and Beacon
Hill at Mountain's Edge LLC; and claims against Beacon Hill.
Claim Claim Estimated
Debtor Class Designation Status Recovery
------ ------ -------------- ---------- -------------
All N/A Administrative Unimpaired 100% recovery
Claims $1.1 million
All -- Priority Tax Unimpaired 100% recovery
Claims $3 million
------ ------ -------------- ---------- -------------
TOUSA Inc. TOI-1A First Lien Impaired 100% recovery
Revolver Claims $184,430,158
TOUSA Inc. TOI-1B First Lien Term Impaired 100% recovery
Loan Claims $128,106,376
TOUSA Inc. TOI-2 Second Lien Impaired Subject to TOI
Claims Causes of
Action outcome
$348,207,718
TOUSA Inc. TOI-3 Other Secured Impaired 100% recovery
Claims $29.3 million
TOUSA Inc. TOI-4 Other Priority Unimpaired 100% recovery
Claims $496,834
TOUSA Inc. TOI-5A Senior Note Impaired Subject to TOI
Claims Causes of
Action outcome
$573,518,195
TOUSA Inc. TOI-5B General Impaired Subject to TOI
Unsecured Causes of
Claims Action outcome
$1,378,542
TOUSA Inc. TOI-5C Subordinated Impaired Subject to TOI
Note Claims Causes of
Action outcome
$554,371,093
TOUSA Inc. TOI-5D PIK Note Claims Impaired Subject to TOI
Causes of
Action outcome
$23,797,942
TOUSA Inc. TOI- 6 Equity Interests Impaired Extinguished
in Tousa, Inc.
------ ------ -------------- ---------- -------------
Subsidiary 1A First Lien Impaired 100% recovery
Debtors Revolver Claims $184,430,158
Subsidiary 1B First Lien Term Impaired 100% recovery
Debtors Loan Claims $128,106,376
Subsidiary 2 Second Lien Impaired 100% recovery,
Debtors Claims plus other
awards
$348,207,718
Subsidiary 3 Other Secured Impaired 100% recovery
Debtors Claims $53,539,034
Subsidiary 4 Other Priority Unimpaired 100% recovery
Debtors Claims $1.5 million
Subsidiary 5A Senior Note Impaired Subject to
Debtors Claims Litigation
Trust Causes
of Action
outcome
$573,518,195
Subsidiary 5B General Impaired Subject to
Debtors Unsecured Litigation
Claims Trust Causes
of Action
outcome
$1,872,224,684
Subsidiary 5C Subordinated Impaired Subject to
Debtors Note Claims Litigation
Trust Causes
of Action
outcome
$554,371,093
Subsidiary 5D PIK Election Impaired Subject to
Debtors Note Claims Litigation
Trust Causes
of Action
outcome
$23,797,942
Subsidiary 5E Subsidiary Impaired Subject to
Debtors Intercompany Litigation
Claims Trust Causes
of Action
outcome
------ ------ -------------- ---------- -------------
Beacon Hill 1 Other Secured Unimpaired 100% recovery
Claims
Beacon Hill 2 Other Priority Unimpaired 100% recovery
Claims
Beacon Hill 3 General Unimpaired 100% recovery
Unsecured $18,368
Claims
Beacon Hill 4 Equity Unimpaired --
Interests
------ ------ -------------- ---------- -------------
Treatment of Claims
Under the Plan, all Administrative and Priority Tax Claims will
be paid in full.
A. Claims asserted against TOUSA, Inc.
Class TOI-1A Claims will receive its pro rata share of the
portion of the New Revolver Note transferred to TOUSA from New
TOUSA as the TOI Transfer Consideration. TOI Transfer
Consideration refers to the portion of the New Revolver Note and
the New First Lien Note equal to the fair market value of the
Encumbered Assets transferred to TOUSA to New TOUSA.
Class TOI-IB will receive its pro rata share of the New First
Lien Note transferred to TOUSA from New TOUSA.
The recovery on Class TOI-2 Claims is dependent on the value of
the TOI Causes of Action against the holders.
Classes TOI-3 Claims and TOI-4 Claims will be paid in full.
Classes TOI-5A, TOI-5B, TOI-5C and TOI-6 Claims will receive pro
rata share of all assets available for distribution upon
liquidation of TOUSA's unencumbered assets, including the TOI
Causes of Action.
Class TOI-5C Claims will receive pro rata share of all assets
available for distribution upon liquidation of TOUSA's
unencumbered assets.
Class TOI-6 Claims will not receive or retain any interest or
property under the Plan.
On the Effective Date, all Equity Interests in TOUSA will be
canceled and extinguished.
B. Claims asserted against the Subsidiary Debtors
Class 1A Claims will receive pro rata share of the portion of the
New Revolver Note and will also be reimbursed of their litigation
fees with respect to the Litigation Trust Causes of Action.
Class 1B Claims will receive pro rata share of the portion of the
New First Lien Note transferred to the applicable Subsidiary
Debtor from New TOUSA; and reimbursement of litigation fees from
defense of Litigation Trust Causes of Action.
Class 2 Claims will receive pro rata share of the New TOUSA
common stock and Second Lien PIK Note allocated to the applicable
Subsidiary Debtor; and reimbursement of legal fees incurred
during Causes of Action litigation.
Class 3 Claims will either receive payment in full or the holder
of a claim will retain its lien on property to the extent the
property was not abandoned by the applicable Debtor.
Class 4 Claims will be paid in full.
Class 5A Claims will receive pro rata share of the Litigation
Trust interests for the applicable Subsidiary Debtor.
Class 5B Claims will receive pro rata share of Litigation Trust
Interests for the applicable Subsidiary Debtor.
Class 5C Claims will receive pro rata share of the series
Litigation Trust Interests for the applicable Subsidiary Debtor.
Class 5D Claims will receive pro rata share of the series of
Litigation Trust Interests for the applicable Subsidiary Debtor.
Class 5E Claims will be reinstated and reduced to the amount
according to Plan mechanisms.
C. Claims asserted against Beacon Hill
Beacon Hill's Class 1 Claims will either receive payment in full
or retention of liens on property not abandoned by the Debtors.
Beacon Hill's Class 2 Claims and Class 3 Claims will be paid in
full.
A summary of classes of claims entitled to vote on the Plan is
available for free at:
http://bankrupt.com/misc/TOUSA_ClaimsSummary.pdf
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider. Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008.
(TOUSA Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TOUSA INC: Plan of Reorganization Includes Litigation Trust
-----------------------------------------------------------
The Joint Plan of Reorganization of TOUSA Inc. and its debtor
subsidiaries provides that certain holders of unsecured
claims against the Subsidiary Debtors will receive beneficial
interests in a litigation trust established to pursue certain
causes of actions belonging to the Debtors.
The Litigation Trust will be governed by the terms of the Plan
and a trust agreement, which will filed as part of the Plan
Supplement and subject to approval of the Debtors and the
Second Lien Agent.
The Debtors will appoint the initial Litigation Trustee. The
Litigation Trust Committee will be responsible for designating
the Litigation Trustee as may be required thereafter.
The Plan provides that the Litigation Trust will primarily be
responsible for liquidating its assets, including the Litigation
Trust Causes of Action, and distributing those proceeds, if any,
to the Litigation Trust Beneficiaries. The Plan defines the
"Litigation Trust Causes of Action" as certain causes of action
raised by or on behalf of the Debtors, including Fraudulent
Transfer Actions, Preference Actions, and any claims or causes of
action that the Official Committee of Unsecured Creditors or the
Litigation Trustee is granted standing to pursue.
The Plan provides that, on the Effective Date, New TOUSA will
transfer cash in an amount of $3 million, to be loaned to the
Litigation Trust by New TOUSA on the terms to be specified in the
Litigation Trust Agreement.
Any Litigation Trust Recovery Proceeds received will be used to
repay the Litigation Trust Loan before any distribution to the
Litigation Trust Beneficiaries. In the event that the Litigation
Trust receives Litigation Trust Recovery Proceeds in a form other
than cash, the Litigation Trust will transfer Litigation Trust
Recovery Proceeds having a fair market value equal to all amounts
then due with respect to the Litigation Trust Loan to New TOUSA.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider. Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008.
(TOUSA Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TOUSA INC: Wants Court to Approve Disclosure Statement
------------------------------------------------------
TOUSA Inc. and its debtor-affiliates have submitted to the United
States Bankruptcy Court for the Southern District of Florida a
Joint Plan of Reorganization dated October 13, 2008. In line
with that, the Debtors relate that they prepared a lengthy and
detailed Disclosure Statement to accompany the Plan.
The Plan accomplishes the Debtors' two primary objectives --
facilitation of their emergence from Chapter 11 and preservation
of the fraudulent conveyance litigation for their unsecured
creditors, Paul Steven Singerman, Esq., at Berger Singerman,
P.A., in Miami, Florida, maintains.
By the motion, the Debtors ask the Court to approve the
Disclosure Statement pursuant to Section 1125 of the Bankruptcy
Code.
Section 1125 provides that a plan proponent must provide holders
of impaired claims and interests entitled to vote on the plan
"adequate information" regarding that plan.
Mr. Singerman asserts that the Disclosure Statement contains more
than sufficient information for a hypothetical reasonable
investor to make an informed judgment about the Plan and complies
with all aspects of Section 1125.
He emphasizes that the Disclosure Statement is the product of the
Debtors' extensive review and analysis of their business, the
circumstances leading to their Chapter 11 cases, and their
business initiatives. The Debtors sought and received the input
of their advisors and their major constituents in undertaking
that analyses, Mr. Singerman adds.
In addition, the Disclosure Statement reflects a summary of the
Plan and, in particular, the effect of the terms of the Plan on
holders of claims and equity interests and parties-in-interest
that would result if the Plan is confirmed and consummated, Mr.
Singerman says.
Solicitation Package
The Debtors propose to prepare and distribute a solicitation
package that will contain important information and required
voting material with respect to the Plan.
The Solicitation Package will contain copies of documents related
to the Plan and the Disclosure Statement, including:
(a) a cover letter, describing the contents of the
Solicitation Package;
(b) a cover letter from the Debtors' significant constituents
urging holders in each of the voting classes to vote to
accept the Plan;
(c) an appropriate form of Ballot and/or Master Note Ballot;
(d) the approved form of the Disclosure Statement;
(e) the Plan; and
(f) the Disclosure Statement Order.
The Disclosure Statement, the Plan and the Disclosure Statement
Order total more than 200 pages. Thus, the Debtors seek the
Court's authority to serve, in their discretion, copies of the
Disclosure Statement, the Plan or the Disclosure Statement Order
in CD-ROM format instead of paper format.
Any party, though that desires a paper copy of the Plan documents
may send a request to by:
- accessing http://www.tousadocket.com;
- writing to TOUSA Balloting Center, c/o Kurtzman Carson
Consultants LLC, at 2335 Alaska Avenue, in El Segundo,
California 90245;
- calling 866-381-9100; or
-- e-mailing KCC_TOUSA@kccllc.com
The Debtors intend to distribute the Solicitation Packages via
first class mail to the Voting Classes starting November 19,
2008, and no fewer than 30 days before the Voting Deadline.
Voting Record Date
The Debtors propose that November 12, 2008, be deemed as the date
on which they will determine which of their creditors are
entitled to receive the Disclosure Statement and to vote to
accept or reject the Plan.
The Voting Record Date will be for voting purposes only and will
have no impact on who is entitled to receive distributions under
the Plan.
On the Voting Record Date, the Debtors will determine:
(a) those holders of claims that are entitled to receive the
Solicitation Package;
(b) those holders of claims, including the identity of
beneficial holders, that are entitled to vote to accept or
reject the Plan; and
(c) whether transferred claims have been properly assigned or
transferred to an assignee pursuant to Rule 3001(e) of the
Federal Rules of Bankruptcy Procedure so that the assignee
can vote as the holder of a claim against the Debtors.
Voting Deadline
The Debtors also ask the Court to establish January 12, 2008, at
5:00 p.m. prevailing Pacific Time as the last date on which all
properly executed and completed votes to reject or accept the
Plan must be actually received:
* by Kurtzman Carson Consultants, LLC, the Debtors' voting and
claims agent, at:
TOUSA Balloting Center
c/o Kurtzman Carson Consultants LLC
2335 Alaska Avenue,
El Segundo, California 90245, or
* in the case of Master Note Ballots, by Financial Balloting
Group LLC, the Debtors' securities voting agent, at:
Financial Balloting Group LLC
757 Third Avenue, 3rd Floor,
New York, New York 10017
Attn: TOUSA Ballot Processing
In order for votes to be counted, all Ballots and Master Note
Ballots must be properly executed, completed and delivered by
first class mail, overnight courier or personal delivery, to KCC
or FBG, as appropriate.
The Debtors relate that they have prepared the forms of the
ballot, note ballots and master note ballots.
A ballot will not be counted as valid if, among other things, it
is illegible or contains insufficient information to identify the
claim holder; unsigned; and not clearly marked as accepting or
rejecting the Plan.
Notice to Non-Voting Class
Certain claimholders are not entitled to vote on the Plan as they
are impaired or are otherwise deemed to accept the plan under
Section 1126(f) of the Bankruptcy Code. The Debtors will not
mail Solicitation Packages to these creditors.
The Debtors, however, propose to provide an alternative notice of
the non-voting status to parties in the Non-Voting Classes.
Rule 3018(a) Motion
Consistent with Rule 3018(a) of the Federal Rules of Bankruptcy
Procedure, the Debtors have designed procedures with respect to
the temporary allowance of claims for voting purposes only for
claims that are not otherwise allowed. Generally, those
procedures provide that a Disputed Claim not be allowed to vote
unless at least one of certain "Resolution Events" has taken
place with respect to that claim at least five business days
before the Voting Deadline.
Disclosure Statement Hearing
The Debtors ask Judge Olson to set November 12, 2008, as the date
for the Disclosure Statement hearing. Any objections to the
Disclosure Statement hearing must be submitted no later than
November 8.
Confirmation Hearing
The Debtors expect to seek a date for the Confirmation Hearing at
the Disclosure Statement Hearing, but anticipate that the hearing
would occur during the Court's scheduled omnibus hearing on
January 21, 2008.
The Debtors seek the January 12, 2008, or some other date that is
seven days before the Confirmation Hearing be the last day on
which all properly completed objections to the Plan must be filed
with the Court. Any objection to the Plan must:
- be in writing;
- conform with the Bankruptcy Rules;
- state the name and address of the objecting party and the
amount and nature of the claim or equity interest of that
party; and
- state with particularity the basis and nature of any
objection to the Plan and, if practicable, a proposed
modification to the Plan that would resolve that objection.
If approved, the Debtors propose to send the Confirmation Hearing
Notice to parties-in-interest through mail. The Debtors also
intend to publish a the Confirmation Hearing Notice, at least 25
days before the Voting Deadline, in the national edition of The
Wall Street Journal and in certain local newspapers and trade
publications.
About TOUSA Inc.
Headquartered in Hollywood, Florida, TOUSA Inc. (Pink Sheets:
TOUS) -- http://www.tousa.com/-- fka Technical Olympic
U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark
Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading
homebuilder in the United States, operating in various
metropolitan markets in 10 states located in four major geographic
regions: Florida, the Mid-Atlantic, Texas, and the West. TOUSA
designs, builds, and markets high-quality detached single-family
residences, town homes, and condominiums to a diverse group of
homebuyers, such as "first-time" homebuyers, "move-up" homebuyers,
homebuyers who are relocating to a new city or state, buyers of
second or vacation homes, active-adult homebuyers, and homebuyers
with grown children who want a smaller home. It also provides
financial services to its homebuyers and to others through its
subsidiaries, Preferred Home Mortgage Company and Universal Land
Title Inc.
The Debtor and its debtor-affiliates filed for separate Chapter 11
protection on Jan. 29, 2008. (Bankr. S.D. Fla. Case No. 08-10928).
The Debtors have selected M. Natasha Labovitz, Esq., Brian S.
Lennon, Esq., Richard M. Cieri, Esq. and Paul M. Basta, Esq., at
Kirkland & Ellis LLP; and Paul Steven Singerman, Esq., at Berger
Singerman, to represent them in their restructuring efforts.
Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst
& Young LLP is the Debtors' independent auditor and tax services
provider. Kurtzman Carson Consultants LLC acts as the Debtors'
Notice, Claims & Balloting Agent.
TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba
Eagle Homes, filed for Chapter 11 Protection on July 30, 2008,
(Bankr. S.D. Fla. Case No.: 08-20746). It listed assets between
$1 million and $10 million, and debts between $1 million and
$10 million.
The Official Committee of Unsecured Creditors hired Patricia A.
Redmond, Esq., and the law firm Stearns Weaver Weissler Alhadeff &
Sitterson, P.A., as its local counsel.
TOUSA Inc.'s balance sheet at June 30, 2008, showed total assets
of $1,734,422,756 and total liabilities of $2,300,053,979.
TOUSA's Exclusive Plan Filing Period expires Oct. 25, 2008.
(TOUSA Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000).
TOWER PARK: Files Chapter 11 Plan & Disclosure Statement
--------------------------------------------------------
Bill Rochelle of Bloomberg News reports that Tower Park
Properties, LLC, filed with the U.S. Bankruptcy Court for the
Central District of California last week a Chapter 11 plan along
with an explanatory disclosure statement promising to pay all
creditors in full, although not right way.
Located in the 90210 zip code, the Debtor believes its property is
be worth $100 million, or more than enough to cover claims
totaling $70 million, according to the report. The Plan proposes
to give the two secured lenders new mortgages due in 18 months,
with interest accruing at the rate of 1% a month, or lower if the
bankruptcy court decides that's the market, according to the
report.
Interest and principal on the secured creditors' two new mortgages
evidently won't be paid until the property is sold, according to
the report. The Debtor, according to the report, says the secured
creditors are protected in the meantime by an "equity cushion" in
the property.
The Debtor say a sale, joint venture or refinancing "will not be
immediate", according to the report. The Plan, according to the
report, is designed to provide time to work out a transaction.
The Debtor promises not to sell the property unless the price is
enough to pay all creditors in full, according to the report. The
Debtor nevertheless goes on to say that if there hasn't been a
sale in 18 months to pay claims in full, it will be sold to the
higher bidder with the proceeds distributed according to the
priorities in bankruptcy law, according to the report.
Los Angeles, California-based Tower Park Properties, LLC, owns 157
acres on a mountaintop above Beverly Hills.
The Company filed for Chapter 11 bankruptcy protection on July 11,
2008 (Bankr. C.D. Calif. Case No. 08-20298). Craig M. Rankin,
Esq., at Levene, Neale, Bender, Rankin & Brill, L.L.P., represents
the Debtor in its restructuring effort. The Debtor in its
petition listed between $100 million and $500 million in estimated
assets and $50 million and $100 million in estimated debts.
U SAFE: Voluntary Chapter 11 Case Summary
-----------------------------------------
Debtor: U Safe Investments, LLC
1127 Webster Street
Oakland, CA 94607
Bankruptcy Case No.: 08-45880
Chapter 11 Petition Date: October 14, 2008
Court: Northern District of California (Oakland)
Debtor's Counsel: Fayedine Coulter, Esq.
coulterfayedine@yahoo.com
Law Offices of Fayedine Coulter
1425 Leimert Bl., #306
Oakland, CA 94602
Tel: (510)482-6700
Estimated Assets: $10 million to $50 million
Estimated Debts: $10 million to $50 million
The Debtor did not file a list of 20 largest unsecured creditors.
VALLEY CLUB: Court Approves Thomas & Johnston as Accountant
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Idaho gave Valley
Club Homes LLC authority to employ Thomas & Johnston, Chtd. as its
accountant.
The firm is expected to:
a) to prepare on behalf of the Debtor Tax Returns, including
2007 tax returns;
b) to perform all other accounting services for the Debtor and
Debtor-in-Possession, the exact nature of which are not
known at this time.
Tim Thomas discloses that as the primary accountant involved in
the services for the Debtor, he bills $235 per hour. He further
discloses that senior accountant may be required to provide some
services whose name is Ryan Still, who bills at $150 an hour.
Other junior accountants will provide services from time to time
in a range of $75 to $115 an hour.
Mr. Thomas declares that his firm represents no interest adverse
to the Debtor or the estate in the matters upon which it is to be
engaged for the Debtor as Debtor-in-Possession, and its employment
would be to the best interests of this estate.
Headquartered in Ketchum, Idaho, Valley Club Homes LLC owns and
operates a membership sports and recreation club. The company
filed for Chapter 11 protection on April 29, 2008 (Bankr. D. Idaho
Case No. 08-40339). Joseph M. Meier, Esq., at Cosho Humphrey,
LLP, in Boise, Idaho, represents the Debtor as counsel. When the
Debtor filed for protection from its creditors, it listed total
assets of $32,435,402 and total liabilities of $24,179,659.
VICORP RESTAURANTS: Gets $7MM Financing from Wells Fargo, Ableco
----------------------------------------------------------------
The Denver Business Journal reports that Vicorp Restaurants, Inc.,
reached an agreement with its lenders Wells Fargo Foothill Inc.
and Ableco Finance LLC regarding a $7 million infusion of capital
for short-term operations.
Under the agreement, Vicorp must expedite the sale of the company.
It has to have a new owner by Jan. 31. Piper Jaffrey & Co.,
Vicorp's financial adviser, is handling the sale process.
As reported by The Troubled Company Reporter on Oct. 14, 2008, the
U.S. Bankruptcy Court for the District of Delaware granted VI
Acquisition Corp. and VICORP Restaurants Inc.'s emergency request
for authority to enter into a Revised Second Amendment modifying
certain material terms in their post-petition financing to
increase availability under their current DIP Loan, pursuant to
Sec. 105(a), 361, 362, 363 and 364 of the Bankruptcy Code.
Specifically, the increased availability will be used to finance
the added liquidity requirements of VICORP'S VICOM division.
VICORP's VICOM division anticipates the demand for pies will
increase in the last quarter of 2008 due to the Thanksgiving,
Christmas and New Year holidays.
Headquartered in Denver, Colorado, VICORP Restaurants Inc.
-- http://www.vicorpinc.com/-- operates two restaurant concepts
under proven and well-recognized brands, Village Inn and Bakers
Square. Founded in 1958, VICORP has 343 restaurants in 25 states,
consisting of 250 company-operated restaurants and 93 franchised
restaurants. Known for its strong breakfast heritage, Village Inn
has been serving its signature breakfast items like one-of-a-kind
skillet dishes and made-from-scratch pancakes for 50 years. In
addition, Village Inn offers traditional American fare for lunch
and dinner.
The company and its affiliates filed for Chapter 11 protection on
April 3, 2008 (Bankr. D. Del. Lead Case No. 08-10623). Kimberly
Ellen Connolly Lawson, Esq., Kurt F. Gwynne, Esq., and Richard A.
Robinson, Esq., at Reed Smith LLP, and Donna L. Culver, Esq., at
Morris Nichols Arsht & Tunnell, represent the Debtors in their
restructuring efforts. The Debtors selected The Garden City
Group, Inc. as their claims agent. Abhilash M. Raval, Esq.,
Dennis Dunne, Esq., and Samuel Khalil, Esq., at Milbank Tweed
Hadley & McCloy LLP, represent the Committee in these case.
When the Debtors filed for protection from their creditors, they
listed estimated assets of $100 million to $500 million and debts
of $100 million to $500 million.
WILLIAMS COMPANIES: Fitch Holds 'BB' Rating on Conv. Debentures
---------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Ratings and
outstanding debt ratings for The Williams Companies, Inc. and its
two debt issuing pipeline company subsidiaries Transcontinental
Gas Pipe Line Corp. and Northwest Pipeline GP, as listed below.
The Rating Outlook is Stable. Approximately $6.76 billion of
outstanding long-term debt is affected.
The Williams Companies, Inc.
-- IDR at 'BBB-';
-- Senior unsecured at 'BBB-';
-- Junior subordinated convertible debentures at 'BB'.
Transcontinental Gas Pipe Line Corp.
-- IDR at 'BBB';
-- Senior unsecured at 'BBB'.
Northwest Pipeline GP
-- IDR at 'BBB';
-- Senior unsecured at 'BBB'.
WMB's ratings consider the strong operating performance from its
core exploration and production, pipeline and natural gas
midstream operations and an improving credit profile.
Consolidated credit measures including leverage ratios are
consistent with its rating category. Debt/EBITDA was 2.3 times for
the 12 months ended June 30, 2008 and is expected to strengthen by
calendar year-end 2008. WMB's liquidity including unrestricted
cash and available revolver capacity is adequate. WMB's liquidity
position benefits from an unsecured marginless hedge credit
facility that serves to reduce its use of cash and other credit
facilities for margin requirements related to hedging activities
for E&P. In addition, WMB has no material debt refinancings until
2011.
Credit concerns include the effect of volatile commodity prices
and the potential for a broad domestic economic downturn on WMB's
E&P and midstream operations. A sustained period of depressed
natural gas and natural gas liquids prices would likely put
downward pressure on drilling activity, reduce profits and weaken
credit measures. Under such circumstances, planned capital
expenditures could be pared back in future periods for the company
to be able to fund its capital spending entirely with cash flow
and available cash as is currently contemplated.
In addition, unsettled debt and equity capital markets currently
limit the company's financial flexibility and make the near-term
dropdown of midstream and pipeline assets to its two master
limited partnerships unlikely.
TGPL's and NWP's ratings reflect their strong individual operating
and financial profiles, offset by the structural and functional
ties between these entities and their ultimate parent WMB. Both
TGPL and NWP participate in WMB's daily cash management program
under which each subsidiary makes and/or receives advances from
WMB and each has access to $400 million under WMB's $1.5 billion
revolving credit facility. Operationally, TGPL and NWP are
considered as two of the premier pipeline systems in the U.S.
In particular, both systems boast competitive rate structures,
operate in relatively secure markets, a high percentage of their
capacity is subscribed under medium-term and long-term contracts
and expansion spending is manageable. In addition neither TGPL
nor NWP have any material outstanding regulatory issues with FERC.
Credit measures for TGPL and NWP on both and historical and
prospective basis are strong for their current ratings. Their
ratings also consider WMB's pipeline MLP Williams Pipeline
Partners L.P., currently a 35% owner of NWP. While there are no
near-term plans by WMB to drop down additional interests of NWP or
TGPL into WMZ, future dropdowns are likely to begin with a
stabilizing of MLP debt and equity markets. Should future
dropdowns occur, WMZ's credit profile would have greater influence
over the pipelines' ratings than it now has. Currently, WMZ has
no external debt and no credit rating.
WOODCOCK ESTATES: Mary McClellan Complex for Auction on Oct. 23
---------------------------------------------------------------
Keith Whitcomb Jr. at Bennington Banner reports that Woodcock
Estates, Inc.'s former Mary McClellan Hospital complex, which had
been renovated into an assisted-living center, is being foreclosed
on and will be auctioned for Oct. 23 at 9:30 a.m.
According to Bennington Banner, John Mannix Jr., Esq., the referee
for the auction, said that the auction will be held at the
Washington County Courthouse in Fort Edward.
Bennington Banner relates that Community Preservation Corp.'s
senior vice president Chris Betts said that the mortgage holder
wants to recover money owed on a $3 million loan. Citing Mr.
Betts, Bennington Banner states that the Woodcock family, which
took out the mortgage, defaulted on the loan. According to the
report, Mr. Betts said that an auction was initially set for Feb.
27, but the Woodcocks had filed for Chapter 11 bankruptcy
protection, delaying the auction. The court dismissed those
proceedings in July, the report states.
Mr. Betts, according to Bennington Banner, said that Community
Preservation provided a loan to the Woodcock family, who used the
Cambridge Adult Home and the Schuyler Guest Home for Adults as
collateral. The report says that Mr. Betts said that those
properties would be foreclosed on and that efforts were being made
to avoid foreclosure on those homes.
Citing Cambridge Village Mayor Dede Nash, Bennington Banner states
that the village had no jurisdiction over the property, but would
be willing to help.
Cambridge, New York-based Woodcock Estates, Inc., provides health
care services. It filed for Chapter 11 protection on Feb. 26,
2008 (Bankr. N. D. N.Y. Case No. 08-10502). Richard H. Weiskopf,
Esq., at O'Connell & Aronowitz represents the Debtor in its
restructuring effort. The Debtor listed assets of $2,709,100 and
debts of $1,225,959.
WOODSIDE GROUP: Objects to Appointment of Chapter 11 Trustee
------------------------------------------------------------
Woodside Group, LLC, and its affiliates ask the U.S. Bankruptcy
Court for the Central District of California to deny the Ad Hoc
Group of Noteholders' request for the appointment of a Chapter 11
Trustee or an Examiner for certain purposes, and the termination
of the Debtors' exclusivity periods in which to file and confirm a
reorganization plan.
As reported by the Troubled Company Reporter, on Sept. 18, 2008,
the Noteholders asked the Court to appoint a Chapter 11 Trustee,
or appoint an examiner pursuant to Sections 105 and 1104 of the
Bankruptcy Code and the termination of the Debtors' exclusive
periods in which to file and confirm a plan of reorganization
pursuant to Section 1121 of the Bankruptcy Code.
JP Morgan Chase Bank, as admnistrative agent for certain lenders
or the Bank Group, supports the Noteholders' request.
The Noteholders tell the Court that the Debtors' senior managers
couldn't operate the business of the Debtors in a manner
consistent with the fiduciary duties of a debtor-in-possession.
The Noteholders claim that the Debtors' senior managers, falling
prey to overwhelming conflicts of interest stemming from their
role as shareholders, have engaged in self dealing transactions,
solely for their own personal benefit and without regard for the
fair and equitable treatment of creditors. According to the
Noteholders, the managers engaged into those transactions in a
covert manner, without disclosure to the Court, to the Debtors'
own restructuring professionals, or to key creditor
constituencies. The Noteholders say that creditor confidence has
been lost.
The Noteholders ask the Court for an investigation of the managers
by an independent third party like a trustee.
The Debtors tell the Court that a debtor-in-possession is
permitted to operate and manage its business and reorganization
effort, subject to the numerous substantive and procedural
safeguards imposed by the Bankrptcy Code. According to the Debtor,
the appointment of a trstee is made only in extreme circumstances.
The Debtors say that they are 187 entities with over $1 billion in
assets and little secured debt. They have been and remain among
the best-managed companies in the industry. They consented to the
entry of orders for relief last month and immediately implemented
and obtained judicial approval for procedures for the proper and
orderly admnistration of the Debtors' bankruptcy cases. According
to the Debtors, there is no long history of stalled or failed
negotiations with creditors.
The Debtors claim that the Noteholders don't have sufficient
evidence on the alleged fraud, dishonesty, incompetence or gross
management of the Debtors' managers. According to the Debtors,
the appointment of a trustee would jeopardize the prospects for
successful reorganization, greatly impair the administration of
these cases, reduce asset values, and would be extraordinarily
costly.
The Debtors tell the Court that the appointment of an examiner
would be wasteful and unnecessary, as the Noteholders implicitly
recognizes by requesting that its scope be limited to
investigating claims against insiders. Facts relevant to the
alleged claims are already known by or readily available to the
Noteholders or the newly-appointed creditors' committee, and are
easily obtained without the appointment of an examiner.
A formal investigation, the Debtors say, is unnecessary and
premature, pending the proposal of a plan of reorganization.
The Debtors claim that the termination or reduction of exclusivity
period is unwaranted. According to the Debtors, their Chapter 11
cases are extraordinarly large cases that have just commenced and
that have great potential for reorganization. The Debtors have
been afforded no opportunity to propose a plan of reorganization.
The Debtors ask the Court to require the oral examination of the
Noteholder Group, and the Bank Group, along with Dewey Imoff and
George "Buzz" W. Welch.
Woodside Group LLC and its debtor-affiliates --
http://www.woodside-homes.com/-- are homebuilders. The Debtor
group, together with several other homebuilders, is continuing to
develop the Inspirada master-planned community in Henderson,
Nevada. During 2007, the Woodside Entities generated revenues
exceeding $1 billion on a consolidated basis. As of Dec. 31, 2007,
the Woodside Entities had consolidated assets and liabilities of
approximately $1.5 billion and $1.1 billion, respectively. As of
the Sept. 16, 2008 petition date, the Debtors have approximately
$70 million in cash. The Woodside Entities employ approximately
494 employees.
On March 31, 2008, Woodside AMR 107, Inc. and Woodside Portofino,
Inc., filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code. On Aug. 20, 2008, an Ad Hoc Group
of Noteholders commenced the filing of involuntary petitions
against the remaining 185 debtors. On Aug. 20, 2008, JPMorgan
Chase Bank, N.A., on behalf of the Bank Group, commenced the
filing of certain Joinders in the Involuntary Petition. On
September 16, 2008, the Debtors filed a "Consolidated Answer to
Involuntary Petitions and Consent to Order for Relief" and the
Court entered the "Order for Relief Under Chapter 11."
The 187 Debtors are jointly administered under Case No. 08-20682.
The Bankruptcy Cases are currently pending before the Honorable
Peter Carroll in the United States Bankruptcy Court for the
Central District of California (Riverside).
Jeremy V. Richards, Esq., Linda F. Cantor, Esq., Debra I.
Grassgreen, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Los Angeles, California, represent the
Debtors. Susy Li, Esq., and Michael A. Sherman, Esq., at Bingham
McCutchen LLP, in Los Angeles; and Michael J. Reilly, Esq.,
Jonathan B. Alter, Esq., and Mark W. Deveno, Esq., at Bingham
McCutchen in Hartford, Connecticut, act as counsel to the Ad Hoc
Group of Noteholders. Donald L. Gaffney, Esq., at Snell & Wilmer
LLP, in Phoenix, Arizona; and Michael B. Reynolds, Esq., and Eric
S. Pezold, Esq., at Snell & Wilmer in Costa Mesa, California,
serve as counsel for JPMorgan Chase Bank, N.A., as Administrative
Agent to Participant Lenders.
WOODSIDE GROUP: AMR 107 & Portofino Units Seek Longer Exclusivity
-----------------------------------------------------------------
Bill Rochelle of Bloomberg News reports that two of the debtor-
affiliates of Woodside Group, LLC -- Woodside AMR 107, Inc. and
Woodside Portofino, Inc. -- asked the U.S. Bankruptcy Court for
the Central District California to extend their exclusive right to
file a Chapter 11 plan until mid-January 2009, the same time the
exclusive periods would expire for the rest of the Debtors.
Exclusivity may terminate sooner, according to the report, if
creditors succeed at an Oct. 23 hearing and convince the Court to
appoint a Chapter 11 trustee. One of the consequences of having a
trustee is the automatic termination of a debtor's exclusive right
to propose a plan.
Absent a trustee, the creditors want an examiner to perform an
investigation and end the Debtors' exclusive right to propose a
Chapter 11 plan, according to the report.
The creditors, according to the report, accuse the Debtors'
managers of engaging "in self-dealing transactions, solely for
their own personal benefit and without regard for the fair and
equitable treatment of creditors." They say the managers put the
Debtors through a reorganization for income tax purposes that was
conducted "in a covert manner" without telling the Debtors' own
bankruptcy lawyers.
Woodside Group LLC and its debtor-affiliates --
http://www.woodside-homes.com/-- are homebuilders. The Debtor
group, together with several other homebuilders, is continuing to
develop the Inspirada master-planned community in Henderson,
Nevada.
On March 31, 2008, Woodside AMR 107, Inc. and Woodside Portofino,
Inc. filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code. On August 20, 2008, an Ad Hoc
Group of Noteholders commenced the filing of involuntary petitions
against the remaining 185 debtors. On August 20, 2008, JPMorgan
Chase Bank, N.A., on behalf of the Bank Group, commenced the
filing of certain Joinders in the Involuntary Petition. On
September 16, 2008, the Debtors filed a "Consolidated Answer to
Involuntary Petitions and Consent to Order for Relief" and the
Court entered the "Order for Relief Under Chapter 11."
The 187 Debtors are jointly administered under Case No. 08-20682.
The Bankruptcy Cases are currently pending before the Honorable
Peter Carroll in the United States Bankruptcy Court for the
Central District of California (Riverside).
Jeremy V. Richards, Esq., Linda F. Cantor, Esq., Debra I.
Grassgreen, Esq., and Maxim B. Litvak, Esq., at Pachulski Stang
Ziehl & Jones LLP, in Los Angeles, California, represent the
Debtors. Susy Li, Esq., and Michael A. Sherman, Esq., at Bingham
McCutchen LLP, in Los Angeles; and Michael J. Reilly, Esq.,
Jonathan B. Alter, Esq., and Mark W. Deveno, Esq., at Bingham
McCutchen in Hartford, Connecticut, act as counsel to the Ad Hoc
Group of Noteholders. Donald L. Gaffney, Esq., at Snell & Wilmer
LLP, in Phoenix, Arizona; and Michael B. Reynolds, Esq., and Eric
S. Pezold, Esq., at Snell & Wilmer in Costa Mesa, California,
serve as counsel for JPMorgan Chase Bank, N.A., as Administrative
Agent to Participant Lenders.
During 2007, the Woodside Entities generated revenues exceeding
$1 billion on a consolidated basis. As of December 31, 2007, the
Woodside Entities had consolidated assets and liabilities of
approximately $1.5 billion and $1.1 billion, respectively. As of
the September 16, 2008 petition date, the Debtors have
approximately $70 million in cash. The Woodside Entities employ
approximately 494 employees.
X-RITE INC: S&P Keeps Ratings Under Pos. Watch on Pending ReCap
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on X-Rite
Inc. would remain on CreditWatch with positive implications
pending the completion of an expected recapitalization.
"We will raise our corporate credit rating on X-Rite Inc. to 'B'
from 'CCC+' and remove the rating from CreditWatch following
completion of an equity infusion anticipated in the near term,"
said Standard & Poor's credit analyst Bruce Hyman. Proceeds of
the new common equity would be used primarily to repay existing
debt. "The recovery ratings on the secured debt issues are not
expected to change," Mr. Hyman added. The ratings outlook will be
stable.
The ratings had been placed on CreditWatch with negative
implications on April 3, 2008, following the company's announced
violation of certain covenants in its credit facilities; after
several intermediate actions the corporate credit rating was
lowered to 'CCC+'. The CreditWatch implications were revised to
positive from developing on Aug. 21, 2008, following the company's
announcement that a group of investors had agreed to buy about
$155 million in new common stock to repay outstanding debt.
The ratings on Grand Rapids, Michigan-based X-Rite Inc. continue
to reflect its relatively narrow business profile, somewhat high
cost structure, the limitations of its niche markets, and the
challenges of completing the integration of a late-2007
acquisition. These factors are partially offset by a leading
position in its markets and relatively high barriers to entry. X-
Rite has a major share of the $1 billion color management market,
which serves the graphic arts, textile manufacturing, and
automotive refinishing industries. X-Rite had acquired competitor
Amazys in mid-2006, and acquired Pantone, which provided color
reference standards, in late 2007.
Revenues had declined sequentially by 12% in the March 2008
quarter, leading to the covenant violation. Full-year 2008
revenues are likely to be flat-to-down versus 2007, below earlier
expectations. While new product introductions should contribute
to improved performance in 2009, the marketplace response remains
uncertain while economic conditions are problematic, and growth
rates could well be depressed over the near to intermediate term.
In the pending transaction, cash balances will increase by
$7.5 million, pro forma $38 million as of June 28, 2008, and the
company will regain access to about $35 million of its $40 million
revolving credit agreement. Given the company's modest capital
expenditure requirements and generally good working capital
performance, as well as expectations that the company will be able
to generate moderate levels of free cash flows, X-Rite should
maintain sufficient liquidity for operational purposes.
Standard & Poor's will monitor the transactions and implement the
rating changes when the refinancing closes.
YRC WORLDWIDE: Fitch Slashes Sr. Unsecured Rating to 'CCC+/RR6'
---------------------------------------------------------------
Fitch Ratings has downgraded the ratings of YRC Worldwide Inc. and
its Roadway LLC and YRC Regional Transportation, Inc.
subsidiaries, as:
YRC Worldwide Inc.
-- Issuer Default Rating downgraded to 'B' from 'BB';
-- Secured credit facilities downgraded to 'BB/RR1' from 'BB+';
-- Senior unsecured downgraded to 'CCC+/RR6' from 'BB-'.
Roadway LLC
-- IDR downgraded to 'B' from 'BB';
-- Senior secured notes downgraded to 'B-/RR5' from 'BB-'.
YRC Regional Transportation, Inc.
-- IDR downgraded to 'B' from 'BB';
-- Senior secured notes downgraded to 'CCC+/RR6' from 'BB'.
Fitch's ratings apply to approximately $1.0 billion in
consolidated debt and a $950 million revolving credit facility.
The Rating Outlook for YRCW remains Negative.
The ratings reflect the potential for continued deterioration in
less-than-truckload market conditions through at least the middle
of 2009, which has significantly increased the risk in YRCW's near
term credit profile. Over the past month, economic trends have
worsened materially, indicating a more rapid slowing of the global
economy than previously expected.
This slowdown in global economic growth likely will have a
negative effect on YRCW's primary retail and industrial customer
base, potentially driving the company's revenue and EBITDA in
upcoming quarters well below prior forecasts. Although Fitch
expects YRCW to maintain sufficient liquidity and remain in
compliance with its credit facility covenants through the end of
2008, the likelihood of a covenant breach and/or liquidity squeeze
in the second quarter of 2009 has increased materially.
Following a period of relatively stable, albeit weak, industry
demand through much of the summer, it appears that the LTL sector
experienced a further significant decline in demand beginning in
early September, and indications are that demand has remained
notably weaker through October. Expectations are that the pre-
Holiday shipping peak will be muted again this year and likely
weaker than the past two years, while the ongoing credit crisis
could prolong the difficult LTL market conditions through the next
year. Although diesel fuel prices have fallen sharply since mid-
July, much of the effect will be offset by a reduction in fuel
surcharges, while base LTL shipping rates have declined this fall
as price competition has risen.
YRCW's free cash flow tends to be seasonal, with relatively weak
free cash flow generation in the first half of the year, offset by
much stronger free cash flow in the second half. Despite the
weakening market conditions, Fitch expects YRCW to record positive
free cash flow in the in the third and fourth quarters of 2008;
however, the level of free cash flow is now expected to fall below
earlier forecasts.
In addition to a weaker 2008 than originally envisioned, concern
is growing that worsening economic conditions will result in a
very weak first half of 2009, as well. This could be especially
problematic for YRCW, as the debt/EBITDA leverage covenant in its
credit facility, which declines to 3.5 times in the fourth quarter
of 2008 from the current 3.75x level, will constrain the company's
ability to fully utilize the available liquidity on its revolving
credit facility and its receivables-based asset backed
securitization facility. With potentially weak EBITDA over the
next four quarters, the leverage measurement could come close to,
or breach, the covenant level by the second quarter of next year,
even with a modest reduction in outstanding debt.
With the credit markets essentially frozen, opportunities to tap
external sources for cash in the near term are limited. However,
by calling its $225 million December Roadway note maturity and its
$100 million May YRC Regional Transportation note maturity early
and using its revolver to fund the payments, the company has
improved its financial flexibility, as it now has no debt
maturities prior to 2010. Depending on the level of free cash
flow generated in the fourth quarter, YRCW may have an opportunity
to repay a modest portion of the revolver borrowings late this
year or early next year, although the effect on its calculated
leverage ratio may be minor.
Crucial to YRCW's liquidity position will be its ability to renew
the $600 million ABS facility when it comes due next May. An
inability to refinance the facility would severely impair the
company's access to cash. The opportunity could exist for YRCW to
engage in some equity-related transactions, although the effect of
any such transactions could be reduced by its low share price,
which has declined by 60% since mid-September.
YRCW has several initiatives underway to increase both revenue and
operating efficiency. The most significant of these is the
merging of the Yellow Transportation and Roadway Express
operations into a single subsidiary, which has the potential to
significantly improve asset utilization and network efficiency in
the YRC National Transportation segment. The company has
estimated that the initiative will generate annualized benefits of
$200 million once complete.
It could also result in cash proceeds from the sale of redundant
assets, primarily facilities, which could be used to further
reduce leverage. The timing of asset sales and level of proceeds
derived from such sales is currently unknown but both could be
negatively affected by the turmoil in the credit markets.
The recovery rating of 'RR1' on YRCW's credit facilities reflect
their hard asset collateral coverage and expectations for a full
recovery in the event of a bankruptcy. The 'RR5' recovery rating
on the Roadway senior secured notes reflects their hard-asset
collateral coverage, which is shared with the secured credit
facility. The recovery rating of 'RR6' on the remaining rated
issuances reflect expectations for a poor recovery in a bankruptcy
scenario, including the effect of weak collateral coverage on the
YRC Regional Transportation secured notes. The negative Rating
Outlook reflects Fitch's concerns that additional downgrades may
be necessary if LTL market fundamentals decline further,
increasing the stress on YRCW's near-term credit profile and
raising the likelihood of a covenant breach or liquidity squeeze
as soon as the second quarter of 2009.
* Proskauer Rose Adds Nancy Cohen and Rene Siemens as Partners
--------------------------------------------------------------
Proskauer Rose LLP expanded its national Insurance Coverage Group
with the addition of Nancy Sher Cohen and Rene Siemens, who join
the firm as partners in Los Angeles.
Two of California's prominent insurance litigators, Ms. Cohen and
Mr. Siemens come to Proskauer from Heller Ehrman, where Ms. Cohen
was managing shareholder of the firm's Los Angeles office and
Mr. Siemens was a shareholder and co-chair of the office's
Litigation Department as well as the firm's Ethnic Diversity
Committee.
Ms. Cohen and Mr. Siemens are the latest lawyers to join
Proskauer's Insurance Coverage Group, which disclose the
addition of partners Steven Gilford, Paul Langer and Marc
Rosenthal in the firm's Chicago office, and John Failla in New
York.
"As noted leaders with a diverse range of experience,
particularly in the area of insurance recovery, [Ms. Cohen and
Mr. Siemens] represent an exciting expansion of our litigation
capabilities," Allen I. Fagin, chairman of Proskauer, said.
"Their reputation and prominence on the West Coast add to our
already well-established presence in New York and Chicago, helping
us to continue the strategic growth of our national insurance
platform."
Ms. Cohen has been lead counsel in the prosecution of several
insurance coverage lawsuits related to environmental and product
liabilities, resulting in recoveries of over $1 billion. Her
extensive practice has also included first-party claims
involving business interruption, prosecution of claims by
Holocaust survivors against insurance carriers who failed to
pay life insurance benefits, and acting as lead counsel for
the lender on the World Trade Center towers in prosecuting
claims for insurance coverage of the towers.
In addition, Ms. Cohen has extensive experience: in state and
federal courts handling mass tort, complex multi-jurisdiction
tort actions and toxic tort cases; representing biotechnology
companies in product liability and insurance matters arising
from clinical trials; and representing talent in entertainment
litigation. She has been named one of the "Top 75 Women
Litigators in California" by the Daily Journal and is a
member and director of the International Academy of Trial
Lawyers. She received her J.D. from Loyola Law School and a
B.A. from the University of Texas.
Mr. Siemens specializes in insurance coverage litigation and
counseling on behalf of policyholders. In addition, he handles
product liability, mass tort and complex commercial litigation
for major manufacturers, defense contractors, financial
institutions, and health care, accounting, high technology,
pharmaceutical and medical services companies. Over the course
of his career, he has recovered hundreds of millions of dollars
on behalf of his clients in matters ranging from first-party
claims, third-party claims and claims under specialized coverages.
He received his J.D. from Harvard Law School, a B. Phil. and D.
Phil. from Oxford University and a B.A. from the University of
Winnipeg.
Led by John Gross and Seth Schafler, Proskauer's Insurance
Coverage Group represents policyholders in coverage disputes
with their insurance companies and advises clients on insurance
issues. The group's lawyers have advised a wide range of public
and privately owned corporations and entities in connection with
virtually all kinds of insurance products, including commercial
general liability, fiduciary liability, directors and officers
liability, fidelity, property insurance and marine insurance
policies.
About Proskauer Rose
Proskauer Rose LLP, -- http://www.proskauer.com/-- founded in
1875, is an international law firm providing a wide variety of
legal services to clients worldwide from offices in Boca Raton,
Boston, Chicago, London, Los Angeles, New Orleans, New York,
Newark, Paris, Sao Paulo, and Washington, D.C. The firm has wide
experience in all areas of practice important to businesses and
individuals including corporate finance, mergers and acquisitions,
general commercial litigation, corporate governance matters,
conducting internal corporate investigations, white collar
criminal defense, private equity and fund formation, patent and
intellectual property litigation and prosecution, labor and
employment law, real estate transactions, bankruptcy and
reorganizations, trusts and estates, and taxation. Its clients
span industries including chemicals, entertainment, financial
services, health care, information technology, insurance,
Internet, lodging and gaming, manufacturing, media and
communications, pharmaceuticals, real estate investment, sports,
and transportation.
* Seyfarth Shaw Creates Strategic Economic Response Team
--------------------------------------------------------
Seyfarth Shaw LLP formed a Strategic Economic Response Team to
assist clients in responding to regulatory and business
challenges posed by the current economic conditions. The multi-
disciplinary team consists of lawyers throughout the country
who bring a range of practice proficiencies and insights to help
businesses weather the rapidly changing economic climate.
"Our closely integrated national practice groups have enabled us
to formalize this team and align our service offerings with the
needs of our clients," Edward J. Karlin, chair of the firm's
Business Services Group, said. "Our firm is dedicated to our
clients and helping them meet the challenges they face. SERT
evolved as our greatest resources--our legal talent--came
together to tackle the complex challenges that the current
economic conditions are posing."
SERT is comprised of lawyers who specialize in securities
law, structured finance, secured lending, mergers, real estate,
asset sales, tax, private equity, litigation, bankruptcy and
workouts, restructuring and executive compensation. The lawyers
share their knowledge across practice areas to devise solutions
to clients' intricate challenges requiring a multi-disciplinary
approach. Together, SERT lawyers work to mitigate clients'
exposure to risks from market economic conditions, including
the subprime mortgage crisis, and also to assist clients in
pursuing opportunities that may arise from the Emergency
Economic Stabilization Act of 2008 and related government
actions.
"Our clients face a stressful, fast-changing environment, with
once secure deals at risk," Peter J. Korda, co-chair of the
firm's Structured & Real Estate Finance Practice Group, said.
"By partnering with our clients and drawing on the resources
available through SERT, our clients have access to a fully
integrated team of lawyers, capable of handling a wide range of
matters, from addressing executive compensation issues, to
advising directors and officers, to partnering with lenders on
workouts of stressed assets."
Seyfarth Shaw counts former SEC lawyers, federal prosecutors
and employee benefits and executive compensation consultants
among its legal practitioners throughout the country. In
addition to drawing on their collective regulatory and private
litigation experience and practice specialties, Seyfarth Shaw's
SERT lawyersare ideally positioned to address the evolving
structures created by the Emergency Economic Stabilization Act
of 2008 and other government measures.
"In this culture of dissecting key executives' earnings,
Seyfarth Shaw is partnering with clients to implement executive
compensation programs that are fully compliant and represent a
balanced approach to achieving value for shareholders and
allowing businesses the freedom to compete for top talent," said
Peter C. Miller, chair of the firm's Employee Benefits and
Executive Compensation Department. "We've also been counseling
clients concerning their fiduciary obligations under ERISA and
any changes to their retirement plans that they may be
considering given the turbulence of the markets and the
potential for litigation by plan participants."
About Seyfarth Shaw LLP
Headquartered in New York City, Seyfarth Shaw LLP --
http://www.seyfarth.com/-- is a full-service law firm with over
750 lawyers located in nine offices throughout the United States
including Chicago, New York, Boston, Washington D.C., Atlanta,
Houston, Los Angeles, San Francisco and Sacramento, well as
Brussels, Belgium. The firm provides a broad range of legal
services in the areas of real estate, labor and employment,
employee benefits, litigation and business services. Seyfarth
Shaw's practice reflects virtually every industry and segment of
the country's business and social fabric. Clients include over
200 of the Fortune 500 companies, financial institutions,
newspapers and other media, hotels, health care organizations,
airlines and railroads. The firm also represents a number of
federal, state, and local governmental and educational entities.
* Chapter 11 Cases with Assets & Liabilities Below $1,000,000
-------------------------------------------------------------
Recent Chapter 11 cases filed with assets and liabilities below
$1,000,000:
In Re At Home Simplicity, LLC
Bankr. D. Nev. Case No. 08-21699
Chapter 11 Petition filed October 6, 2008
Filed as Pro Se
In Re Jon-David DiMaggio
Bankr. S.D. Ala. Case No. 08-13841
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/alsb08-13841.pdf
In Re Letap Management, LLC
Bankr. N.D. Ga. Case No. 08-80235
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/ganb08-80235.pdf
In Re American Synthol, Inc.
dba Amerilube Limited
Bankr. N.D. Ga. Case No. 08-80248
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/ganb08-80248.pdf
In Re Pembroke Motors, Inc.
Bankr. S.D. Ga. Case No. 08-41909
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/gasb08-41909.pdf
In Re Alloy Architectural Products, Inc.
Bankr. S.D. Ind. Case No. 08-12418
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/insb08-12418.pdf
In Re Shane Fence Co., LLC
dba Wildcat Fence Company
dba Lannis Fence Company
Bankr. W.D. Ky. Case No. 08-34416
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/kywb08-34416.pdf
In Re William James McGuire, II & Susan B. McGuire
Bankr. W.D. La. Case No. 08-12893
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/lawb08-12893.pdf
In Re Otis W Cutler, Jr.
Bankr. D. Md. Case No. 08-22989
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/mdb08-22989.pdf
In Re Jordan Mirch
Bankr. E.D. Mich. Case No. 08-64473
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/mieb08-64473.pdf
In Re Emlenton Water Bottling Co.
Bankr. W.D. Penn. Case No. 08-26698
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/pawb08-26698.pdf
In Re Greens 126 LP
Bankr. S.D. Tex. Case No. 08-36470
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/txsb08-36470.pdf
In Re Karam C. Jain
aka KC Jain
Bankr. E.D. Va. Case No. 08-16163
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/vaeb08-16163.pdf
In Re Philadelphia Pizza & Grill, LLC
Bankr. E.D. Wis. Case No. 08-30962
Chapter 11 Petition filed October 7,
See http://bankrupt.com/misc/wieb08-30962.pdf
In Re Stephen Duane Mansfield
aka Steve Mansfield
aka S D Mansfield
Bankr. W.D. Ark. Case No. 08-74034
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/akwb08-74034.pdf
In Re Property Control Ground Maintenance, Inc.
Bankr. M.D. Ala. Case No. 08-11645
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/almb08-11645.pdf
In Re A&D Cabinetry, Inc., S Corp.
Bankr. D. Conn. Case No. 08-33283
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/ctb08-33283.pdf
In Re Kurt J. Markuson & Jennifer L. Markuson
Bankr. D. Idaho Case No. 08-02247
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/idb08-02247.pdf
In Re William Lamar Rohrbaugh & Nancy Joann Rohrbaugh
Bankr. D. Md. Case No. 08-23061
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/mdb08-23061.pdf
In Re Angelique Daschille Best
Bankr. D. Md. Case No. 08-23067
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/mdb08-23067.pdf
In Re TGH Ventures, Inc.
Bankr. E.D. Mich. Case No. 08-64600
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/mieb08-64600.pdf
In Re Rodenhouse Body Shop, Inc.
Bankr. W.D. Mich. Case No. 08-08931
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/miwb08-08931.pdf
In Re Independent Printing Services, Inc.
Bankr. E.D. Mo. Case No. 08-47868
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/moeb08-47868.pdf
In Re The Swiezynski Limited Partnership
Bankr. D. N.H. Case No. 08-12913
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/nhb08-12913.pdf
In Re Scampi, Inc.
aka Russell's Steakhouse
aka Russell Steak & Sea Food House
Bankr. N.D. N.Y. Case No. 08-62457
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/nynb08-62457.pdf
In Re Argonne Enterprises, LLC
Bankr. S.D. N.Y. Case No. 08-23456
Chapter 11 Petition filed October 8, 2008
Filed as Pro Se
In Re John Nicholas Sheets
aka Nicky Sheets
Bankr. N.D. Tex. Case No. 08-35206
Chapter 11 Petition filed October 8,
See http://bankrupt.com/misc/txnb08-35206.pdf
In Re Cornelius P. Pittman & Judith A. Pittman
Bankr. N.D. Ala. Case No. 08-83211
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/alnb08-83211.pdf
In Re Pittman Enterprises, Inc.
Bankr. N.D. Ala. Case No. 08-83212
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/alnb08-83212.pdf
In Re JL Wright Equipment Action & Sales LLC
aka JL Wright Equipment, Action & Sales, LLC
Bankr. E.D. Ky. Case No. 08-52605
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/kyeb08-52605.pdf
In Re David Whitehead & Terriann Whitehead
Bankr. D. N.J. Case No. 08-29623
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/njb08-29623.pdf
In Re Celeste C. Grubin
aka Cindy Grubin
Bankr. E.D. N.Y. Case No. 08-75614
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/nyeb08-75614.pdf
In Re White Hall Farms LLC
Bankr. D. Colo. Case No. 08-25845
Chapter 11 Petition filed October 9, 2008
Filed as Pro Se
In Re Bradley L. Ferguson & Virginia L. Ferguson
Bankr. N.D. Calif. Case No. 08-55756
Chapter 11 Petition filed October 9, 2008
Filed as Pro Se
In Re Jules Elliot Briskin
aka Jules Briskin
aka Brisk-Set
Bankr. S.D. Calif. Case No. 08-10018
Chapter 11 Petition filed October 9, 2008
Filed as Pro Se
In Re Wall Street Executive Real Estate, Inc.
Bankr. S.D. N.Y. Case No. 08-23468
Chapter 11 Petition filed October 9, 2008
Filed as Pro Se
In Re Kustom Kar Sound, Inc.
Bankr. D. Ariz. Case No. 08-13958
Chapter 11 Petition filed October 9, 2008
Filed as Pro Se
In Re Anderson Marketing Services, Inc.
aka VendMaxx
Bankr. W.D. Tenn. Case No. 08-30584
Chapter 11 Petition filed October 9, 2008
Filed as Pro Se
In Re Middle Tennessee RV, LLC
aka Middle Tennessee Airstream
Bankr. M.D. Tenn. Case No. 08-09283
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/tnmb08-09283.pdf
In Re Heritage Ford-Lincoln-Mercury, Inc.
Bankr. M.D. Tenn. Case No. 08-09286
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/tnmb08-09286.pdf
In Re APT Mechanical, Inc.
Bankr. W.D. Wash. Case No. 08-16703
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/wawb08-16703.pdf
In Re Steven J. Schmitt
dba SJS Trucking & Cheryl L. Schmitt
Bankr. E.D. Wis. Case No. 08-31063
Chapter 11 Petition filed October 9,
See http://bankrupt.com/misc/wieb08-31063.pdf
In Re Wylie E. Rodgers & Hilda J. Rodgers
Bankr. N.D. Ala. Case No. 08-83246
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/alnb08-83246.pdf
In Re Ellis Landworks,LLC
Bankr. S.D. Ala. Case No. 08-13942
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/alsb08-13942.pdf
In Re V. Sutton Rodney
Bankr. S.D. Ala. Case No. 08-13943
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/alsb08-13943.pdf
In Re Ronald Alan Clower
Bankr. N.D. Ga. Case No. 08-12982
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/ganb08-12982.pdf
In Re Quality Rentals III, LLC
Bankr. E.D. Mich. Case No. 08-34175
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/mieb08-34175.pdf
In Re Anile Corporate Center, Inc.
Bankr. E.D. N.Y. Case No. 08-75653
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/nyeb08-75653.pdf
In Re Spider Kelly on Locust Street, Ltd, Inc.
Bankr. E.D. Penn. Case No. 08-16657
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/paeb08-16657.pdf
In Re Fraternal Order of Eagles, Aerie #1747
Bankr. M.D. Penn. Case No. 08-52869
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/pamb08-52869.pdf
In Re VA Commonwealth Crooks-1 Trust
Bankr. E.D. Va. Case No. 08-35007
Chapter 11 Petition filed October 10, 2008
Filed as Pro Se
In Re Flex Trucking Company, LLC
Bankr. S.D. Tex. Case No. 08-36550
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/txsb08-36550.pdf
In Re Starlight, LLC
dba Starlight Lounge & Dining Room
Bankr. E.D. Wash. Case No. 08-04161
Chapter 11 Petition filed October 10,
See http://bankrupt.com/misc/waeb08-04161.pdf
In Re R & B Clarke Enterprises, Inc.
Bankr. W.D. Mich. Case No. 08-09033
Chapter 11 Petition filed October 11,
See http://bankrupt.com/misc/miwb08-09033.pdf
In Re 40% Plus, Inc
dba Jones Amoco
dba Thomas Jones Amoco
dba Jones Citgo
Bankr. N.D. Ill. Case No. 08-27408
Chapter 11 Petition filed October 13,
See http://bankrupt.com/misc/ilnb08-27408.pdf
In Re Sun Room Designs, Inc.
Bankr. W.D. Penn. Case No. 08-26819
Chapter 11 Petition filed October 13,
See http://bankrupt.com/misc/pawb08-26819.pdf
In Re Chadwick Doyle Steele
dba Dotson Buses
dba Chad Steele Bus Contractors & Krystle Sherry Steele
dba Starlite Skating Center
Bankr. E.D. Tenn. Case No. 08-15443
Chapter 11 Petition filed October 13,
See http://bankrupt.com/misc/tneb08-15443.pdf
In Re HJB Enterprises, Inc.
Bankr. E.D. Tex. Case No. 08-42728
Chapter 11 Petition filed October 13,
See http://bankrupt.com/misc/txeb08-42728.pdf
In Re Top Line Builders, Inc.
ta Louisa Wood Recycling
Bankr. W.D. Va. Case No. 08-62439
Chapter 11 Petition filed October 13,
See http://bankrupt.com/misc/vaeb08-62439.pdf
In Re Top Line Concrete of Virginia, Inc.
Bankr. W.D. Va. Case No. 08-62437
Chapter 11 Petition filed October 13,
See http://bankrupt.com/misc/vawb08-62437.pdf
In Re Top Line Concrete, Inc.
Bankr. W.D. Va. Case No. 08-62438
Chapter 11 Petition filed October 13,
See http://bankrupt.com/misc/vawb08-62438.pdf
In Re Albert Potter & Naomi Potter
Bankr. D. Ariz. Case No. 08-14143
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/azb08-14143.pdf
In Re Southeastern Facility Management, Inc.
Bankr. M.D. Ga. Case No. 08-41109
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/gamb08-41109.pdf
In Re Dennis L. Nord
Bankr. N.D. Ill. Case No. 08-73293
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/ilnb08-73293.pdf
In Re United Employment Services, LLC
Bankr. E.D. Mich. Case No. 08-65147
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/mieb08-65147.pdf
In Re Sherwood Fine Foods Ltd.
aka Sherwood Deli
Bankr. S.D. N.Y. Case No. 08-14014
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/nysb08-14014.pdf
In Re Barry Grant
Bankr. S.D. N.Y. Case No. 08-23484
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/nysb08-23484.pdf
In Re Roger D. Naugle
aka Roger Naugle
dba RDN Auction Sales
dba J.R. Baker Advertising
Bankr. M.D. Penn. Case No. 08-03768
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/pamb08-03768.pdf
In Re RTM Framingham, LLC
aka Danforth Green
aka Sudbury Landing
aka Villages at Danforth Farm
aka Danforth Green
Bankr. D. Mass. Case No. 08-17749
Chapter 11 Petition filed October 14, 2008
Filed as Pro Se
In Re Baxter's LLC
Bankr. D. Conn. Case No. 08-50989
Chapter 11 Petition filed October 14, 2008
Filed as Pro Se
In Re Croll Corp.
Bankr. D. Ariz. Case No. 08-14172
Chapter 11 Petition filed October 14, 2008
Filed as Pro Se
In Re Richard J. Stempel
Bankr. D. Mass. Case No. 08-17739
Chapter 11 Petition filed October 14, 2008
Filed as Pro Se
In Re Charles Emison
aka Charles Frederick Emison
Bankr. W.D. Tenn. Case No. 08-13957
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/tnwb08-13957.pdf
In Re Morteza Saki
aka Tony Saki & Mojgan Hateminejad
aka Morgan Hateminejad
Bankr. E.D. Tex. Case No. 08-42740
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/txeb08-42740.pdf
In Re Edward L. Etter
dba Etter Tree Care
Bankr. W.D. Tex. Case No. 08-53049
Chapter 11 Petition filed October 14,
See http://bankrupt.com/misc/txwb08-53049.pdf
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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.
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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.
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