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/raid1/www/Hosts/bankrupt/TCR_Public/081027.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 27, 2008, Vol. 12, No. 256 Headlines ALPHA BANK: 16th FDIC-Insured Bank to Fail This Year AMERICAN FIBERS: Committee Taps Lowenstein Sandler as Counsel BANC OF AMERICA: Fitch Affirms $6.8MM Certificate Rating at 'B' BEAR CREEK: Case Summary & 19 Largest Unsecured Creditors BEATRICE BIODIESEL: Court Converts Case to Chapter 7 Liquidation BUILDING MATERIALS: Transfers Common Stock Listing to OTCBB CAPCO AMERICA: Fitch Chips $24.9MM Class B-4 Certs. to 'CC/DR4' CATALYST ENERGY: Competitors Paid at Least $2MM of CEG Gas Sold CELL GENESYS: Mulls Liquidation After Cancer Drug Failed in Trial CHESAPEAKE ENERGY: Fitch Holds Ratings After Planned Capital Cut CHRYSLER LLC: Gov't May Step in GM Merger Talks CIFG GUARANTY: Fitch Withdraws 'CCC' Insurer Fin'l Strength Rating COMMONWEALTH PORTS: Fitch Cuts $34.3MM Revenue Bonds Rating to BB- COMMONWEALTH PORTS: Fitch Puts 'CCC' Rated Bonds Under Neg. Watch CUPERTINO SQUARE: $7 Mil.-DIP Loan Hearing Moved to November 7 DIVERSIFIED REIT: Fitch Cuts Ratings on Three Note Classes to 'B+' GAINEY CORP: May Continue Using Cash Collateral Until January 16 GE COMMERCIAL: Fitch Affirms Low-B Ratings on Five Cert. Classes GENERAL MOTORS: $15BB Asset Sale Proceeds May be Insufficient GENERAL MOTORS: Might Sell ACDelco Business, Bloomberg Report Says GENERAL MOTORS: GMAC Tells Dealers to Pay Off Older Inventory GENERAL MOTORS: Gov't May Step in Chrysler Merger Talks GMAC LLC: Tells GM Dealers to Pay Off Older Inventory GOODY'S FAMILY: Will Close Unprofitable Albany Outlet in December GWLS HOLDINGS: Seeks Dec. 19 Auction, Lenders as Lead Bidder HARBOUR WALK: Receives Bid for 53-Acre Property From Stuart City HERTZ CORPORATION: Fitch Affirms Ratings on Stable Market Position HEXION SPECIALTY: Nimbus Unit Prices Offering of Senior Notes HILANDER BOWL: Kelso Center Closed for Non-Payment of Back Taxes HOLIDAY ISLE: Case Summary & 20 Largest Unsecured Creditors INTEREP NATIONAL: Wants Case Converted to Chapter 7 Liquidation INTERSTATE BAKERIES: Court OKs $600-Mil. Bankruptcy Exit Loan JAMES SANDERSON: Files for Chapter 11 Protection JESUS MALAVET: Case Summary & 20 Largest Unsecured Creditors JOHNSTON SHIELD: Gets $1,000 Fine for 22 State Violations MARCIA TURNER: Case Summary & Largest Unsecured Creditor MCCLATCHY CO: Fitch Cuts Sr. Notes/Debentures Rating to 'CCC/RR6' MGM MIRAGE: Weakened Economic Trend Cues Fitch to Trim Ratings MICHAEL VICK: Will Plead Guilty, Anticipates Early Prison Release MIDNIGHT PROPERTIES: To Auction 880-Acre Bon Secour Lot Nov. 19. MRS FIELDS: Emerges from Chapter 11 with New Owners NATIONAL CITY: To be Acquired by PNC for $5.2 Billion NORTHLAKE FOODS: Closes 2 Waffle House Restaurants NORTHLAKE FOODS: Wants to Employ Ford Harrison as Special Counsel NORTHWEST AIRLINES: Posts $317MM Net Loss 3Q ended September 30 OSWALD RANCHES: Case Summary & 20 Largest Unsecured Creditors PAPER INT'L: Seeks 30-Day Extension for Filing of Schedules PAUL SCHAEFER: Case Summary & List of Largest Unsecured Creditors PETTERS CO: Court to Consolidate 10 Bankruptcy Petitions PHYSICIANS MEDICAL: Shinsegai Wants to Buy Alabama Hospital RCS-CHANDLER: Court Orders Auction of Unfinished High-Rise Project RICHARD JAMES: Blames Bankruptcy on Criminal Acts v. Restaurant SALOMON BROTHERS: Fitch Cuts $7.3MM Class L Certs. to 'C/DR5' SECURITY BENEFIT: Fitch Trims IFS Rating to 'BB' from 'BBB-' SEMGROUP LP: Hiland Partners' Exposure Down to $300,000 SHOE PAVILION: To Close 64 Remaining Stores After Liquidation Sale SIMPLON BALLPARK: Loses Cosmopolitan Square Project to Foreclosure SONICBLUE INC: Liquidating Plan Confirmed; Distributions in Nov. STEVE & BARRY'S: Names Harold Kahn as Chief Executive Officer TIAA SEASONED: Stable Pool Performance Cues Fitch to Hold Ratings TOMMY WHITE: Case Summary & 20 Largest Unsecured Creditors TROPICANA ENT: Seeks to Resume Casino Operations w/o Ex-CEO UAL CORP: CFO Jake Brace to Retire Oct. 31, Signs Separation Deal UAL CORP: Reports $779MM Net Loss for Quarter Ended Sept. 30 VICORP RESTAURANTS: Closes Three Bakers Square Restaurants W.R. GRACE: Sept. 30 Balance Sheet Upside-Down by $250 Million WASHINGTON MUTUAL: Fitch Holds 'B-' Rating; Puts Stable Outlook WEST MEEKER: Case Summary & 15 Largest Unsecured Creditors WORLDSPACE INC: Indian Creditors Mull Legal Move to Recover Money * Fitch Takes Out PIT Ratings on 26 Tradeable Credit Baskets * Donlin Recano Names Bankruptcy Lawyer Scott Stuart as Partner * Hunton & Williams Creates Financial Industry Recovery Group * IASB & FASB Say Suspending Mark-To-Market Accounting a Mistake * McDonald Hopkins Adds Owen P. Quinn as Litigation Associate * Resilience Capital Partners Promotes Ki Mixon to Principal * BOND PRICING: For the Week of Oct. 19 - Oct. 27, 2008 ********* ALPHA BANK: 16th FDIC-Insured Bank to Fail This Year ---------------------------------------------------- Alpha Bank and Trust, Alpharetta, Georgia, was closed Friday by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume the insured deposits of Alpha Bank & Trust. Alpha Bank & Trust is the sixteenth FDIC-insured institution to be closed this year. The last bank to fail in Georgia was Integrity Bank, Alpharetta, on August 29, 2008. The two branches of Alpha Bank & Trust will open on Monday, October 27, 2008 as Stearns Bank, N.A. Depositors of the failed bank will automatically become depositors of Stearns Bank, N.A. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Over the weekend, customers of Alpha Bank & Trust can access their insured deposits by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual. As of September 30, 2008, Alpha Bank & Trust had total assets of $354.1 million and total deposits of $346.2 million. Stearns Bank did not pay the FDIC a premium for the right to assume the failed bank's insured deposits. At the time of closing, there were approximately $3.1 million in uninsured deposits held in approximately 59 accounts that potentially exceeded the insurance limits. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers. Alpha Bank & Trust also had approximately $16.8 million in brokered deposits that are not part of today's transaction. The FDIC will pay the brokers directly for the amount of their insured funds. Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-800-591-2912 to set up an appointment to discuss their deposits. This phone number will be operational this evening until 9:00 p.m. EST; on Saturday from 9:00 a.m. to 5:00 p.m. EST; and Sunday 12:00 EST to 5:00 EST and thereafter from 8:00 a.m. to 8:00 p.m. EST. Customers who would like more information on the transaction should visit the FDIC's Web site at: http://www.fdic.gov/bank/individual/failed/alpha.html Beginning Monday, depositors of Alpha Bank & Trust with more than $250,000 at the bank may visit the FDIC's Web page, "Is My Account Fully Insured?" at: http://www2.fdic.gov/dip/Index.asp to determine their insurance coverage. In addition to assuming the failed bank's insured deposits, Stearns Bank, N.A. will purchase approximately $38.9 million of Alpha's assets. The FDIC will retain the remaining assets for later disposition. The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund will be $158.1 million. Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,451banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations. AMERICAN FIBERS: Committee Taps Lowenstein Sandler as Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of American Fibers and Yarns Company, and AFY Holding Company asks the United States Bankruptcy Court for the District of Delaware for permission to employ Lowenstein Sandler PC as its counsel. In a separate filing, the Committee asks the Court for authority to retain Ashby & Geddes, P.A, as its Delaware counsel. Lowenstein Sandler is expected to: a) provide legal advice as necessary with respect to the Committee's powers and duties; b) assist the Committee in investigation the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operations of the Debtors' business, potential claims, and any other matters relevant to the cases, to the sale of assets, financing or to the formulation of a plan of reorganization; c) provide legal advice as necessary with respect to any disclosure statement and plan filed in the case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation plan; d) prepare on behalf of the Committee, as necessary, applications, motions, complaints, answers, orders, agreements, and other legal papers; e) appear in Court to present necessary motions, applications, and pleadings, and otherwise protecting the interests of those represented by the Committee; f) assist the Committee in requesting the appointment of a trustee or examiner; and g) perform other legal services as may be required and that are in the best interest of the Committee and creditors. The firm's professionals will be paid at these rates: Designations Hourly Rates ------------ ------------ Partners $400 - $765 Counsel $335 - $405 Associates $220 - $340 Legal Assistants $120 - $210 Sharon L. Levine, Esq., a member at the firm, assures the Court that the firm does not hold any interest adverse to the Debtors' estate and their creditors, and is "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Ms. Levine can be reached at: Sharon L. Levine, Esq. Lowenstein Sandler PC 65 Livington Avenue Roseland, New Jersey 07068 Tel: (973) 597-2500 Fax: (973) 597-2400 http://www.lowenstein.com/ Headquartered in Chapel Hill, North Carolina, American Fibers and Yarns Company -- http://www.afyarns.com/-- is a supplier of dyed yarns to the automotive and apparel industries. The company and its affiliate, AFY Holding Company, filed for Chapter 11 protection on Sept. 22, 2008 (Bankr. D. Del. lead case no. 08- 12176). Edward J. Kosmowski, Esq., and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors in their restructuring efforts. The Debtors selected RAS Management Advisors LLC as proposed financial advisor. Epiq Bankruptcy Solution will serve as the Debtors' claims agent. The U.S. Trustee for Region 3 appointed creditors to serve on an Official Committee of Unsecured Creditors. When the Debtors sought bankruptcy protection from their creditors, they listed assets and debts between $10 million and $50 million. BANC OF AMERICA: Fitch Affirms $6.8MM Certificate Rating at 'B' --------------------------------------------------------------- Fitch affirmed Commercial Mortgage Inc.'s commercial mortgage pass-through certificates, series 2002-2, and assigns Outlooks as: -- $179.4 million class A-2 at 'AAA'; Outlook Stable; -- $975.2 million class A-3 at 'AAA'; Outlook Stable; -- $1.5 billion class XC at 'AAA'; Outlook Stable; -- $1 billion class XP at 'AAA'; Outlook Stable; -- $64.7 million class B at 'AAA'; Outlook Stable; -- $17.2 million class C at 'AAA'; Outlook Stable; -- $12.9 million class D at 'AAA'; Outlook Stable; -- $17.2 million class E at 'AAA'; Outlook Stable; -- $21.6 million class F at 'AAA'; Outlook Stable; -- $21.6 million class G at 'AAA'; Outlook Stable; -- $19.4 million class H at 'AAA'; Outlook Stable; -- $21.6 million class J at 'AA'; Outlook Stable; -- $36.6 million class K at 'A'; Outlook Stable; -- $12.9 million class L at 'BBB+'; Outlook Stable; -- $12.9 million class M at 'BB+'; Outlook Stable; -- $16.9 million class N at 'BB-'; Outlook Stable; -- $6.8 million class O at 'B'; Outlook Stable. The $34.8 million class P is not rated by Fitch. Class A-1 has been paid in full. The affirmations are the result of stable performance since Fitch's last rating action. As of the October 2008 distribution report, the transaction has paid down 14.5% to $1.49 billion from $1.74 billion at issuance. Currently, 54 loans (46.7%) are defeased, including two shadow rated loans, Bank of America Plaza - Atlanta (8.8%) and The Center at Preston Ridge (4.4%). The Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. There are five loans in special servicing (2.9%). The largest specially serviced loan (1.6%) is secured by a 201-unit multifamily property located in West Bloomfield, Michigan, which is 90+ days delinquent. The servicer and borrower have tentatively agreed on a discounted payoff which is anticipated to close before the end of the year. Losses are expected. The second largest specially serviced loan (0.7%) is secured by a 131,702 square foot office property located in Wayne, New Jersey. The loan transferred to the special servicer in July 2008 after the borrower indicated they would no longer be able to pay debt service. The servicer is moving forward with foreclosure and based on the latest available appraisal, losses are expected. The final three specially serviced assets (0.6%) are collateralized by multifamily properties located in the Gulf Coast and had the same borrower. Two of these loans transferred to the special servicer after the borrower refused to reimburse the master servicer for the force- placed windstorm insurance policy on the properties. The conflict went through litigation and the trust has prevailed on all claims related to the force-placed insurance. The issue is expected to be resolved before year-end 2008 with no losses. The third asset was transferred in January 2008 for imminent default. The asset is secured by a 166-unit multifamily property located in Galveston, Texas. The property is real estate owned and is under contract for sale. Additionally, the property suffered significant damage from Hurricane Ike and the servicer's insurance adjuster is working on the property damage claim. Despite the damage sustained to the property, the prospective purchaser has indicated that they intend to move forward with the sale. Losses are expected. Fitch reviewed the transaction's one non-defeased shadow rated loan, the Crabtree Valley Mall, (10.5%). The mall has 998,486 sf and is located in Raleigh, North Carolina. The loan maintains its investment grade shadow rating based on stable performance. Occupancy as of December 2007 improved to 95% from 93% in August 2007. BEAR CREEK: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Bear Creek Grading, Inc. P.O. Box 190 Carnesville, GA 30521 Bankruptcy Case No.: 08-31315 Type of Business: The Debtor operates a construction company. Chapter 11 Petition Date: October 23, 2008 Court: Middle District of Georgia (Athens) Debtor's Counsel: Ernest V. Harris, Esq. ehlaw@bellsouth.net Harris & Liken, LLP P.O. Box 1586 Athens, GA 30603 Tel: (706) 613-1953 Fax: (706) 613-0053 Estimated Assets: $1 million to $10 million Estimated Debts: $100,000 to $500,000 A list of the Debtor's largest unsecured creditors is available for free at: http://bankrupt.com/misc/gamd08-31315.pdf BEATRICE BIODIESEL: Court Converts Case to Chapter 7 Liquidation ---------------------------------------------------------------- Carolyn Okomo at the Deal.com reports that the Hon. Thomas L. Saladino of the United States Bankruptcy Court for the District of Nevada converted the Chapter 11 reorganization case of Beatrice Biodiesal LLC to a Chapter 7 liquidation proceeding. Several creditors including Lottman & Carpenter Construction and Rasmussen Mechanical Services protested the conversion request arguing that the Debtor failed to file financial disclosure documents including amounts owed to its unsecured creditors, the report says. According to the Troubled Company Reporter on Sept. 15, 2008, the Debtor asked the Court to convert the case because it was out of money. The Debtor struggled to secure financing amid rising cost of soybeans, which it planned to convert to fuel at a plan in Nebraska. As a result of the conversion, present management will lose its opportunity to file a plan of reorganization or liquidation of the Debtor's estate. A Chapter 7 trustee will be appointed and will administer the liquidation of the Debtor's estate. About Beatrice Biodiesel Headquartered in Beatrice, Nebraska, Beatrice Biodiesel LLC -- http://www.beatricebiodieselcam.com/-- produces biofuels from vegetable oil and animal fats as well as ethanol from sugar and grains. The company filed for Chapter 11 bankruptcy protection on Aug. 21, 2008 (Bankr. D. Nebraska Lead Case No. 08-41927). John L. Horan, Esq., at Cline, Williams, Wright, Johnson & Oldfather, L.L.P. represents the Debtor in its bankruptcy proceedings. The Debtor disclosed assets between $50 million and $100 million, and debts between $10 million and $50 million. BUILDING MATERIALS: Transfers Common Stock Listing to OTCBB ---------------------------------------------------------- Building Materials Holding Corporation is moving the trading of its common stock to the OTC Bulletin Board. The anticipated move to over-the-counter trading is the result of the company no longer meeting the minimum market capitalization standard of the New York Stock Exchange. The NYSE disclosed that it will suspend trading of the company's common stock on Oct. 29, 2008, and that the stock will no longer be listed on its exchange. BMHC will disclose further details of its planned move to OTC trading prior to the delisting date. Robert E. Mellor, chairman and chief executive officer, stated, "The dramatic downturn in the homebuilding sector has had a direct impact on our stock price and market capitalization. Throughout this cyclical downturn, however, we remain dedicated to achieving continued improvement in our financial results through the significant operational restructuring we have undertaken. We expect a number of market participants to make a market in our stock in the OTC system and that our investors will be able to continue trading BMHC shares." The company noted that the anticipated move to OTC trading would not constitute a default under the company's credit agreement. In addition, the company noted that this change would not affect the company's business operations and would not change its reporting requirements with the Securities and Exchange Commission. About Building Materials Holding Corporation Based in San Francisco, California, Building Materials Holding Corporation (NYSE:BLG) -- http://www.bmhc.com-- provides residential construction services and building products to professional homebuilders and contractors in western and southern regions of the United States. It operates through two business segments: SelectBuild and BMC West. SelectBuild provides framing and other construction services to high-volume homebuilders in key markets. BMC West markets and sells building materials, manufactures building components and provides construction services to professional builders and contractors through a network of 41 distribution facilities and 60 manufacturing facilities. It provides construction services and building products in 16 single-family residential construction markets. In November 2006, SelectBuild acquired the remaining 49% interest in BBP companies. In March 2007, BMHC's subsidiary, SelectBuild Construction Inc., acquired the remaining 27% of Riggs Plumbing LLC. * * * As reported in the Troubled Company Reporter on Aug. 13, 2008, Standard & Poor's Ratings Services lowered its ratings on San Francisco, Ca.-based Building Materials Holding Corp., including the corporate credit rating, to 'CCC+' from 'B-'. The ratings remain on CreditWatch with negative implications, where S&P placed them on July 30, 2008. CAPCO AMERICA: Fitch Chips $24.9MM Class B-4 Certs. to 'CC/DR4' --------------------------------------------------------------- Fitch Ratings downgraded two classes of CAPCO America Securitization Corp.'s commercial mortgage pass-through certificates, series 1998-D7 as: -- $15.6 million class B-3 to 'BB-' from 'BB+'; Outlook Stable; -- $24.9 million class B-4 to 'CC/DR4' from 'B-'. In addition, Fitch affirmed and assigned outlooks to these classes: -- Interest-only class PS-1 at 'AAA'; Outlook Stable; -- $16.6 million class A-3 at 'AAA'; Outlook Stable; -- $59.2 million class A-4 at 'AAA'; Outlook Stable; -- $21.8 million class A-5 at 'AAA'; Outlook Stable; -- $31.1 million class B-1 at 'AA-'; Outlook Stable; -- $28 million class B-2 at 'BBB+'; Outlook Stable. Fitch maintains the rating of the $10.9 million class B-5 at 'C/DR6'. Fitch does not rate the class B-6 and B-6H certificates which have been reduced to zero based on realized losses. Classes A1-A, A1-B, and A-2 have been paid in full. The downgrades of classes B-3 and B-4 are due to expected losses on the largest non-defeased loan, Eastland Mall (20.3%), as well as possible losses on the other specially serviced loans in the pool. Eastland Mall is collateralized by 371,512 square feet of in-line space in a 1.1 million SF enclosed mall located in Charlotte, North Carolina. The loan transferred to special servicing in March 2008 due to imminent default. The borrower, an entity controlled by Glimcher Realty Trust, and the special servicer continue to discuss workout options. Updated appraised values have not become available. The property has seen significant occupancy declines since issuance and the anchor owned JC Penney and Belk's spaces are currently dark. Losses are expected. The second largest specially serviced loan (4%) is secured by a 227-key hotel located in Padre Island, Texas. The property suffered extensive damage from Hurricane Dolly in July 2008. The borrower is working with the insurance adjuster and a final estimate of damages is expected by the end of October. The third specially serviced loan (3%) is collateralized by a manufactured housing community in Greenwood, Indiana. The loan transferred to special servicing in March 2008 due to imminent default. Occupancy at the property as of December 2007 was 45%. The borrower has agreed to receivership and will cooperate in preparing the subject for marketing. Losses are expected. The fourth largest specially serviced loan (2.7%) is an industrial/mixed-use property located in Baltimore, Maryland and is real estate owned. The property is listed for sale and the special servicer is currently evaluating purchase offers. Losses are expected. The fifth specially serviced loan (1.2%) is secured by a 258,000 SF warehouse in Lima, Ohio. The loan was transferred to the special servicer after the borrower indicated they do not have refinancing capital available. Based on current cash flow and the low loan per square foot ($10), losses are not expected at this time. The final specially serviced loan (0.6%) is collateralized by a 50,150 SF apartment complex located in Kansas City, Kansas. The property has been REO since July 2008 and the new property manager is working on transferring all files and records from the previous management to set up the new operation. Recent valuation indicated that losses are possible. The affirmations are due to increased credit enhancement as a result of paydown and defeasance. As of the September 2008 distribution date, the pool's aggregate balance has decreased 83% to $208.1 million from $1.246 billion at issuance. Sixteen loans (10%) remain defeased, including two (8.2%) of the top ten loans. Of the loans that remain in the pool, 31 (94.8%) have anticipated repayment dates in 2008, and two (5.2%) have an ARD of 2009. The Rating Outlooks reflect the likely direction of any rating changes over the next one or two years. CATALYST ENERGY: Competitors Paid at Least $2MM of CEG Gas Sold --------------------------------------------------------------- Catalyst Energy Group, Inc., (CEG) competitors Gas South and Walton EMC Natural Gas said that they paid at least $2 million of the gas CEG sold over the past five months, Margaret Newkirk of The Atlanta Journal Constitution reports. According to the report, the company owed $5 million to Atlanta Gas Light, the pipeline distribution company, when it filed for bankruptcy this month. Under the state's gas market rules, which Georgia marketers helped to develop, money owed by CEG to the state's natural gas system must be paid by its competitors. Under those rules, AGL tells marketers daily how much gas they need to bring into the system. The goal is for each marketer's customers to use roughly the same amount of gas that the company pays to bring in, but Catalyst "consistently sold more gas than Atlanta Gas Light and its formula told it to bring in." The company's debt is calculated by substracting what was paid to bring its AGL-ordered allotment of gas to Georgia between May and October, from what was actually sold to customers. As reported in the Troubled Company Reporter on Oct. 10, 2008, the Georgia Public Service Commission conditionally approved a request by the company to transfer its customers to MX Energy in the wake of its Chapter 11 bankruptcy filing. The transfer is subject to bankruptcy court approval. Under the terms of the agreement, MX Energy would honor fixed-rate contracts of CEG's customers and send each written notice of the transfer, and provide a copy of rights, terms and conditions. Based in Atlanta, Georgia, Catalyst Energy Group, Inc. -- http://www.catalystenergy.com/-- and its affiliates, Catalyst Natural Gas, LLC, and Catalyst Supply Services, Inc, are energy providers. The company and its affiliates filed for Chapter 11 protection on Oct. 1, 2008 (Bankr. N. D. Ga. Lead Case No. 08-79392). Leon S. Jones, Esq., at Jones & Walden, LLC, represents the Debtors in their restructuring efforts. Catalyst Energy listed assets of less than $50,000. According to The Atlanta Journal-Constitution, the company said that it has $20 million in liabilities. CELL GENESYS: Mulls Liquidation After Cancer Drug Failed in Trial ----------------------------------------------------------------- Toni Clarke at Reuters reports that Cell Genesys, Inc., said it is considering alternatives, including liquidating the company, after its experimental prostate cancer drug failed a late stage trial. Datamonitor relates that Cell Genesys terminated the Vital-1 Phase III clinical trial of Gvax immunotherapy in patients with asymptomatic metastatic hormone-refractory prostate cancer. The test was fully enrolled in 2007 with 626 patients. According to Datamonitor, Cell Genesys suspended the trial based on the results of a previously unplanned futility analysis conducted by the study's independent data monitoring committee. The committee, says Datamonitor, indicated that the trial had less than a 30% chance of meeting its predefined primary endpoint of an improvement in survival. Bernadette Tansey at the San Francisco Chronicle reported last week that Cell Genesys said that it will lay off most of its workers and that it is considering a sale or merger after canceling work on its lead product. Nasdaq Notice Cell Genesys has received a letter from The Nasdaq Stock Market dated Oct. 21, 2008, indicating that the company had become non- compliant with the minimum $1.00 bid price requirement for continued listing on The Nasdaq Global Market as set forth in Nasdaq Marketplace Rule 4450(a)(5) because the price of the company's stock closed below the minimum closing bid price of $1.00 per share for a period of 30 consecutive business days. The Nasdaq Letter indicates that in light of extraordinary market conditions, Nasdaq has determined to suspend enforcement of the minimum bid price and market value of publicly held shares requirements through Jan. 16, 2009. In accordance with Nasdaq Marketplace Rule 4450(e)(2), Cell Genesys has 180 calendar days from Jan. 20, 2009, or until July 20, 2009, to regain compliance with the requirements of the Minimum Bid Price Rule. If Cell Genesys does not regain compliance with this rule within the required timeframe, the Nasdaq Staff Deficiency Letter provides that the company may consider applying to transfer to the Nasdaq Capital Market, which would allow the company to take advantage of the additional 180 day compliance period provided on that Nasdaq Capital Market, if the company meets all requirements for initial listing on the Nasdaq Capital Market except for the bid price requirement. If compliance is not demonstrated within the compliance period, the Nasdaq Staff Deficiency Letter indicates that the Nasdaq Staff will provide written notification that Cell Genesys' common stock will be delisted, after which Cell Genesys may appeal the staff determination to the Nasdaq Listing Qualifications Panel if it so chooses. About Cell Genesys South San Francisco, California-based Cell Genesys, Inc. -- http://www.cellgenesys.com-- is a biotechnology company focused on the development and commercialization of biological therapies for patients with cancer. Its clinical stage cancer programs involve cell- or viral-based products that have been modified to impart disease-fighting characteristics that are not found in conventional chemotherapeutic agents. Cell Genesys' program is GVAX cancer immunotherapy program. CHESAPEAKE ENERGY: Fitch Holds Ratings After Planned Capital Cut ---------------------------------------------------------------- Fitch Ratings has affirmed Chesapeake Energy Corporation's Issuer Default Rating at 'BB' following the company's recently announced updated financial position and plans to cut capital expenditures. The Rating Outlook remains Negative. Fitch rates Chesapeake's debt as: -- IDR at 'BB'; -- Senior unsecured debt at 'BB'; -- Senior secured revolving credit facility and hedge facilities at 'BBB-'; -- Convertible preferred stock at 'B+'. Following recent announcements from Chesapeake and the more detailed presentation made by management, Fitch continues to have both short and long-term concerns about Chesapeake. Short-term concerns focus primarily on liquidity issues and the company's need to execute on planned asset sales in the fourth quarter. On Oct. 10, Chesapeake announced that as a result of the current credit market conditions, the company had fully drawn all remaining capacity on its $3.5 billion secured credit facility. As a result, Chesapeake ended the quarter with approximately $1.5 billion of cash on hand (estimated at $1.1 billion as of Oct. 9, 2008). Because of continued high levels of capital expenditures and leasehold acquisitions, Chesapeake needs to execute approximately $2.5-3.0 billion of asset sales to increase liquidity, continue to pursue growth objectives and to reduce debt levels. Fitch estimates that as a result of the substantial intra-month swings in working capital for the company, Chesapeake's minimum liquidity required to sustain the company is estimated to be as high as $1.0-$1.5 billion. As a result, the company's ability to fund acquisitions of leaseholds and capital expenditures, even at reduced levels, will be dependent on the company's ability to complete the approximately $2.5-3.0 billion in divestitures announced for the fourth quarter. Additional concerns impacting near-term liquidity for the company focus on Chesapeake's historical use of "knockout" hedges which have the ability to significantly reduce operating cash flows for the company if natural gas prices fall into the low $6.00/mcf range. Chesapeake has taken action to mitigate concerns of short-term liquidity by working with its counterparties to reduce the number of hedges subject to "knockout" provisions and working to increase liquidity for its midstream business with the initiation of a bank credit facility to support these operations. The facility closed October 16th with total commitments of approximately $460 million and Chesapeake has the potential to expand the facility to $750 million subject to additional bank participation. Additionally, Chesapeake has announced plans to significantly reduce leasehold acquisition activity and cut capital expenditures both in 2008 and beyond. Additional factors supporting liquidity for the company stem from the lack of near-term debt maturities. The company's next long- term debt maturity is in 2013 and the company's $3.5 billion credit facility matures in 2012. As of September 30, 2008, Chesapeake announced it was in full compliance with all debt covenants. The company's revolver contains both a debt-to-total cap test and a debt-to-EBITDA test. Chesapeake was also in compliance with the incurrence covenant test in its senior bonds. Unrealized hedging gains and losses are excluded from the covenant calculations and the company also has carve-outs in the credit facility for ceiling-test write-down impacts on the capitalization calculation. Despite efforts to mitigate near-term concerns of liquidity issues, Fitch believes Chesapeake needs to execute on its planned asset sales to ensure robust liquidity, maintain market confidence and to maintain continued robust production levels as the company faces a steep decline curve from existing production and the need to drill on recently acquired leaseholds. Failure to execute on the planned sales and/or weaker debt covenant compliance metrics could result in ratings downgrades. Of greater importance are Fitch's longer-term concerns about the company's credit profile. Fitch's primary concerns relate to Chesapeake's aggressive growth strategy, high leverage as measured by debt/barrel of oil equivalent, the significant use of off- balance sheet financings, the potential for weaker production levels stemming from reduced capital expenditures and the company's strategy to monetize producing properties and reinvest proceeds into leaseholds which require significant capital expenditures before production materializes. Additionally, as Chesapeake has focused growth efforts on the newly discovered Haynesville shale, Fitch believes the company faces higher levels of operational risk as this strategy carries with it increased risk of weaker than expected drilling results. Chesapeake's next debt maturity isn't until 2013 ($364 million of 7.5% senior notes) which limits the company's ability to significantly reduce debt near-term. As a result, S&P would expect the company to reduce revolver borrowings as the credit environment improves and to hold higher levels of cash balances prior to this debt repayment. Ultimately, Fitch would expect Chesapeake to use free cash flow to fund the continued development of its asset base. Because of the lack of debt maturities, "debt reduction" is more likely to stem from growth in the proven reserve base which will extend over a multi-year period. In addition to high levels of on-balance sheet debt levels, Chesapeake has also accelerated its use of off-balance sheet financings to continue to fund the company's aggressive growth. These off-balance sheet financing sources have come in the form of volumetric production payments and sale-leaseback transactions. As Chesapeake moves forward, it expects to continue to utilize VPPs as a source of financing. During Q4 2008, Chesapeake expects proceeds from VPP sales to total $400-$500 million and then range between $1.0-$1.25 billion in 2009 and 2010. Because these sales result in a continued obligation to produce by Chesapeake, Fitch continues to consider this structure to have some "debt-like" features. In addition, these sales are typically arranged with financial players whose balance sheets have recently come under pressure which could limit their ability to participate in future transactions with Chesapeake. Chesapeake's ratings continue to be supported by the size and low risk profile of its oil and gas reserves which now approximate 12.1 trillion cubic feet equivalent. In addition, Chesapeake continues to post very robust results operationally. Both organic reserve replacement and production growth remain strong and support the company's ability to support higher leverage levels. Chesapeake's three-year organic reserve replacement rate at year- end 2007 was 276% at costs of $13.83/boe (however, three-year FD&A is estimated at $17.51/boe). Both the strong operational metrics and the onshore location of the company's reserves highlight the low risk nature of the company's reserves. Chesapeake is an Oklahoma City-based company focused on the exploration, production and development of natural gas. The company's proved reserves remain predominantly natural gas and are based 100% in the U.S. Chesapeake's operations are concentrated primarily in the Mid-Continent, South Texas, the Permian Basin and the Appalachia Basin. The company's reserve growth in recent years reflects the company's aggressive acquisition strategy and consistent success through the drill-bit. CHRYSLER LLC: Gov't May Step in GM Merger Talks ----------------------------------------------- Negotiations between General Motors Corp. and Chrysler LLC might necessitate going to the U.S. Congress for cash, The Economic Times reports, citing a source involved in the financing discussions. According to The Economic Times, GM is reportedly interested in Chrysler first for its $11 billion in cash. The report says that the cash may not be enough for GM to take on Chrysler. GM, according to the report, may be unwilling to acquire Chrysler without additional money. The acquisition of Chrysler would bring in factories, brands, models, dealers, and employees to GM, the report states. The Congress may be interested in "kicking in" cash because if Chrysler goes into bankruptcy, the government could be forced to take on the pension costs for the company's 124,924 retirees and spouses, The Economic Times relates, citing industry analysts. According to the report, the Congress may also want to keep as many of Chrysler's 49,000 US jobs as possible. The Economic Times states that Sen. Carl Levin said in a debate on Monday that the government may need to get involved in the GM- Chrysler deal. Ron Gettelfinger, the United Auto Workers union's president, is worried that a GM-Chrysler merger would result in massive job losses, The Economic Times says. 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. CIFG GUARANTY: Fitch Withdraws 'CCC' Insurer Fin'l Strength Rating ------------------------------------------------------------------ Fitch Ratings has withdrawn the ratings of CIFG Guaranty Ltd. and its affiliates. Fitch has withdrawn these ratings, which were on Rating Watch Evolving: CIFG Guaranty, Ltd. CIFG Assurance North America, Inc. CIFG Europe -- Insurer financial strength 'CCC'. Fitch believes CIFG's financial guaranty franchise is effectively in run-off at the present time and, as a result, that there is limited investor interest in continued coverage of this rating. CIFG Guaranty Ltd, CIFG Assurance North America, Inc. and CIFG Europe are subsidiaries of CIFG Holding Ltd. CIFG Holding Ltd. is directly owned by Banque Federale des Banques Populaires and Caisse Nationale des Caisses d'Epargne et de Prevoyance, two large French banking groups. COMMONWEALTH PORTS: Fitch Cuts $34.3MM Revenue Bonds Rating to BB- ------------------------------------------------------------------ Fitch Ratings downgrades Commonwealth Ports Authority's, Commonwealth of the Northern Mariana Islands, $34.3 million seaport revenue bonds to 'BB-' from 'BBB-'. The Rating Outlook is Stable. Fitch's 'BB' category rating indicates that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment. The bonds are secured by a pledge of net revenues. The CPA owns and operates three seaports in the CNMI, the largest of which is the Port of Saipan. The commonwealth consists of a chain of 14 islands located in the western Pacific Ocean, approximately 1,461 miles south of Tokyo, Japan and 5,690 miles west of San Francisco. The downgrade to 'BB-' reflects an approximately 40% decline in operating revenue. The decline has significantly weakened the seaport's financial position, producing 0.88 times debt service coverage in fiscal 2007, and an estimated break-even operation in fiscal 2008. The downgrade also reflects management's slow pace in acting to manage the revenue side of operations. Fitch expects CPA to continue to suffer operating losses in the near term that will require the use of internal liquidity to sustain operations and meet debt service needs. CPA's cash balances do provide for adequate credit protection at the current rating level and should be sufficient to support operating deficits through the medium term. If cash balances erode more quickly than expected, it could trigger negative rating action. Fitch does recognize that a new board is in place and that CPA is awaiting revenue and operating cost recommendations from its consultant. The seaport essentially functions as a throughput for goods to an island economy. This function, coupled with robust cash balances that provide nearly 2,500 days cash on hand, is reflected in the 'BB-' rating. However, the rating also reflects the weakening CNMI economy and CPA's exposure to operational and financial shocks that are outside of management's control, including the island's economic volatility, natural events, and U.S. federal government actions. Fitch views CPA's rate-making flexibility as low. The overall economy of the CNMI is in decline and producing less due to a reduction in tourism and the implementation of minimum wage laws, and it will likely take several years for seaport operations to be adequately sized for a more stabilized economy. As CNMI is a commonwealth of the United States, U.S. federal law and regulation, such as minimum wage law requirements, immigration restrictions, and environmental regulation all have an impact on the island's economy. While CPA has historically exhibited strong cash flows and a healthy balance sheet with unrestricted and restricted cash balances of approximately $19 million in fiscal 2007, the port's ability to increase rates will undoubtedly have a dampening effect on demand and will increase the cost of goods across the islands. Total revenue tonnage declined by 13% and 16%, respectively, from 767,407 revenue tons in 2005 to 562,089 in fiscal 2007. Historically, operating revenues improved in the face of overall traffic declines due to CPA's rate-making flexibility. However, given the magnitude of changes to the garment industry this may not be the case going forward. Operating revenues increased in 2006 as a result of CPA's 2005 implementation of fuel rates, increased lease revenues, parking revenues, and franchise fee revenues. Total operating revenues reached a high of $9 million in fiscal 2006, up 30% from fiscal 2005. However, revenues dropped by 40% in fiscal 2007 to $5.3 million due to lower traffic. Operating expenses grew by 20% in fiscal 2006 to $2.6 million and by 4% in 2007 to $2.7 million. For fiscal 2008, expenses are expected to drop by 15% to $2.3 million, reflecting cost cutting measures put in place by CPA. COMMONWEALTH PORTS: Fitch Puts 'CCC' Rated Bonds Under Neg. Watch ----------------------------------------------------------------- Fitch Ratings has placed $16.5 million in outstanding Commonwealth Ports Authority, Commonwealth of the Northern Mariana Islands, airport revenue bonds, 1998 senior series A, on Rating Watch Negative. The bonds are currently rated 'CCC'. Fitch's 'CCC' category rating indicates that default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic conditions. The series 1998 bonds are secured by a pledge of net revenues including approved passenger facility charge moneys. The authority owns and operates three airports in CNMI, the largest of which is Saipan International Airport. The commonwealth consists of a chain of 14 islands, four of which are inhabited, located in the western Pacific Ocean approximately 1,461 miles south of Tokyo, Japan, and 5,690 miles west of San Francisco. The Rating Watch Negative reflects further deterioration in the CPA's financial profile given the suspension of airline rates and charges put into place by the previous board at the beginning of fiscal 2008. Since that time the Governor has taken control of the CPA and established new board members. The CPA has applied for the PFC hardship program which would allow for greater use of PFC revenue to cover debt service, and may also receive a reimbursement of funds from the Commonwealth Utility Commission for work done on airport property. In addition, the CPA is also reviewing recommendations made by an airport consultant with respect to revising rates and charges. These are important developments for fiscal 2009. However, should these prospects fail to materialize, the depletion of cash balances could very well occur within two to three years. Revised airline rates and charges, careful management of expenses and approval of additional PFC allocation for debt service could preserve liquidity beyond the near term. The 'CCC' rating reflects Fitch's expectation that the CPA will continue to experience near break-even operations in the near term that will continue the use of internal liquidity to sustain operations and meet debt service needs. At the current rate, CPA's cash resources are sufficient to provide another two to three years of liquidity. With cash of approximately $1.2 million as of the beginning of fiscal 2008 and annual debt service of $1.4 million, CPA's cash could be depleted without a significant increase in revenue. The rating also reflects the deterioration of the underlying economy driven in large part by reduced tourism and the implementation of a minimum wage that has significantly reduced the size of the garment industry, which was a significant contributor to the economy. In addition, the CPA faces the challenge of balancing the need for certain essential capital improvements and covering all its expenses. The credit's main strength's include the essentiality of an airport system serving as a key transportation link to CNMI and CNMI's ability to continue to draw visitors. Absent an upswing in CNMI's economy and passenger volume and larger PFC offsets, CPA's options to decrease operating deficits in future years include downsizing operations and implementing a cost- recovery airline rate structure. The authority's deteriorating operating and financial profile has been impacted negatively by losses in CNMI's tourism and garment industries, resulting in rate covenant violations and the use of unrestricted cash to make debt service payments in fiscal years 2006, 2007 and 2008. Operating revenues and expenses were both down in fiscal 2007 from 2006 by negative 10.5% and negative 7%, respectively. Aviation and concession revenue continue to be challenged given the smaller base of traffic. CPA continues to make efforts to reduce operating expenses through the use of scheduled work reductions and the elimination of non-essential expenses. CPA will continue to be challenged to balance operating expense reductions with the need to provide a safe operating facility. Utility cost management will prove difficult as CNMI depends upon diesel imports for power generation. The rapid deterioration of CPA's finances also stems from the departure of Japan Air Lines (JAL; Issuer Default Rating 'BB-', Stable Outlook by Fitch), which ceased all scheduled service to CNMI on Oct. 20, 2005. At the time, JAL was the second leading carrier in the market, accounting for 26% of enplanements. Northwest Airlines quickly backfilled some of the lost service, resulting in a net enplanement decline of 9.5% in 2006. Traffic continued to decline across the three airports through fiscal 2007, representing an overall decrease of 10% in fiscal 2007. Traffic appears to be settling around this new lower base, with 2008 enplanements totaling 546,588, up from 529,002 in 2007 or 3%. Despite passenger traffic appearing to stabilize, 2008 traffic remains about 20% down from a high of 661,538 enplanements in 2004. Given the current state of the airline industry, service adjustments are likely to continue over the near term and have the potential to present additional challenges for CPA. CNMI's economy is tourism-based and faces increased competition with other leisure destinations in the Pacific. As a result, remaining cost-competitive is deemed necessary to securing a sustainable tourist market in CNMI. Since 2005, CNMI has been focusing on developing new routes and has shown some success with the development of new markets such as those in Korea, Russia, China, and the Philippines. Increased service by Asiana Airlines represented 132,233 enplanements at Saipan International Airport in 2008, up 19% over 2007. CNMI has also received increased Charter service to Russia and Japan, but on a much smaller scale than the signatory service lost. CUPERTINO SQUARE: $7 Mil.-DIP Loan Hearing Moved to November 7 ------------------------------------------------------------- The Hon. Marilyn Morgan of the United States Bankruptcy Court for The Northern District of California adjourned the hearing on Nov. 7, 2008, to consider Cupertino Square LLC and its debtor- affiliate's motion to obtain up to $7 million of debtor-in- possession financing under a secured loan and security agreement with Orbit Properties LLC. The committed $7-million financing consists of (i) $2 million to cover operating budget shortfalls, and (ii) $5 million for tenants' improvements and other construction costs. The Debtors ask the Court to use at least $1 million in financing pending final approval of the DIP Financing. The Court has authorized the Cupertino Square to access cash collateral, according to the Deal's Mike Schoeck. The Debtors said they have an urgent need of financing to cover all of the expenses on a monthly basis. Cupertino admitted that its shopping center operations were unable to generate sufficient revenues to cover operating expenses. The Debtors' shopping center is subject to a deed of trust held by Gramercy owed $120 million under the trust, secured by equity cushion of at least 28.1% in the encumbered property. On May 16, 2008, CB Richard Ellis issued an appraisal value of $229 million and an "as-is" value of $167 million. According to Richard A. Lapping, Esq., at Thelen LLP, in San Francisco, California, the Debtors plan to use proceeds of $917,650 from an insurance policy with affiliated FM Insurance Co. and $50,000 in connection with the settlement of a tenant dispute. The DIP facility will bear interest at 7%. The facility matures by April 10, 2009. The lender's rights to collateral superpriority administrative expenses are subject to cave-out for professional fees and expenses at $100,000 after an event of default, Chapter 7 trustee fees and expenses at $100,000, and Court and U.S. Trustee fees. Furthermore, the DIP facility contains customary and appropriate events of default including, among other things: (i) breach of warranty and covenant, (ii) failure to pay obligations when due, and (iii) default in other material postpetition date agreements. A full-text copy of the Debtors' cash collateral budget is available for free at http://ResearchArchives.com/t/s?342b About Cupertino Square Headquartered in Cupertino, California, Cupertino Square LLC operates shopping centers. The company and its affiliate, Vallco International Shopping Center LLC, filed for Chapter 11 protection on Sept. 2, 2008 (Bankr. N.D. Calif. Lead Case No.08-54897). Richard A. Lapping, Esq., at Thelen LLP, represents the Debtors in their restructuring efforts. The U.S. Trustee for Region 17 appointed creditor to serve on an Official Committee of Unsecured Creditors. Marianne Dickson, Esq., and Scott H. McNutt, Esq., at McNutt Law Group, represent the Committee. When the Debtors filed for protection from their creditors, they listed assets and debts between $100 million and $500 million each. DIVERSIFIED REIT: Fitch Cuts Ratings on Three Note Classes to 'B+' ------------------------------------------------------------------ Fitch Ratings has downgraded four and affirmed five classes of notes issued by Diversified REIT Trust 2000-1 Ltd./Corp. In addition, five classes were placed on Rating Watch Negative. These rating actions are effective immediately: -- $24,986,000 class A-2 notes affirmed at 'AAA'; -- $18,090,000 class B notes affirmed at 'AAA'; -- $26,992,000 class C notes affirmed at 'AAA'; -- $21,249,000 class D notes rated 'AA', placed on Rating Watch Negative; -- $11,343,000 class E notes downgraded to 'BB+' from 'A-' and placed on Rating Watch Negative; -- $4,307,000 class F notes downgraded to 'B+' from 'BBB-' and placed on Rating Watch Negative; -- $5,025,000 class G notes downgraded to 'B+' from 'BB+' and placed on Rating Watch Negative; -- $4,308,000 class H notes downgraded to 'B+' from 'BB-' and place on Rating Watch Negative; -- $116,300,000 class X notes (interest only) affirmed at 'AAA'. The actions are due to Fitch's Oct. 14 downgrade and subsequent Rating Watch Negative placement for Rouse Company LP's Issuer Default Rating to 'B+' from 'BB' and an assignment of an 'RR5' Recovery Rating to the rated security. The Rouse bond represents 18.7% of the pool. Classes were placed on Rating Watch Negative due to the uncertainty surrounding the amount of recovery anticipated in the event of a default. DREIT 2000-1 is a collateralized debt obligation that closed April 13, 2000 and is composed of a static pool of senior unsecured real estate investment trust securities. Since last review in December 2007, the overall credit quality of the portfolio has migrated to 'BB' from 'BBB/BBB-'. In addition, 54.8% of the pool will mature by April 30, 2009 and 100% by March 2010. The notes pay principal in sequential order and there are no overcollateralization or interest coverage tests. Since closing, approximately 43.8% of the original capital structure has been paid down, with A-1 being paid in full and only 17.1% of class A-2 remaining. The current collateral pool is concentrated with only eight assets remaining. 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 analysis resulted in estimated recoveries for rated debt securities in the 11%-30% range, or 'RR5' per Fitch's recovery methodology. Of the remaining assets, all but one have a Fitch derived rating that is investment grade. The credit quality of the entire pool is: -- 'A-' or better: 26.9%; -- 'BBB' category: 41.3%; -- 'BB+': 13%; -- 'B+'; Rating Watch Negative: 18.7%. Fitch applied a hypothetical loss to the capital structure of the transaction based on the Recovery Rating of the Rouse rated security to evaluate the impact on the rated classes in the event of a default. Those classes that would suffer losses in the event of a default were downgraded and placed on Watch Negative. In this scenario, class D would suffer significant impairment to its credit enhancement, but no principal loss. As such, this class was affirmed, but placed on Watch Negative. Classes D through H will remain on Watch Negative until more information is available on the likelihood of a Rouse bond default and the magnitude of an ensuing loss, if any. GAINEY CORP: May Continue Using Cash Collateral Until January 16 ---------------------------------------------------------------- Bankruptcy Court Judge James Gregg ruled that Gainey Corp. and its related subsidiaries could continue using cash collateral to pay operating costs and employee benefits through at least Jan. 16, 2009, but forbid the use of company cash to pay owner Harvey Gainey's salary, Chris Knape of The Grand Rapids Press (Michigan) reported Thursday. Wachovia Bank had earlier alleged that Mr. Gainey continued to draw a substantial salary despite failing to make payments on $230 million in bank debt. Judge Gregg also ordered Gainey Corp. to make weekly payments of $340,000 for the benefit of its lenders. According to the report, the bank sued Gainey Corp. and several related companies in Kent County Circuit Court in September, demanding full payment of the $230 million the companies owed as a result of loans it provided in 2006. Court records show Gainey stopped making regular loan payments earlier this year. The next hearing has been set for Jan. 6. Headquartered in Grand Rapids, Michigan, Gainey Corp. -- http://www.gaineycorp.com/-- provides trucking and freight- services in the U.S. and parts of Canada. It has 5,000 trucks and trailers, and employs more than 2,300 workers including 1,900 truck drivers. The company and its subsidiaries filed for Chapter 11 bankruptcy protection (Bankr. W.D. Mich. Lead Case No. 08-09092) on Oct. 14, 2008. Daniel F. Gosch, Esq., and John T. Schuring, Esq., at Dickinson Wright, PLLC, represent the Debtors in their restructuring efforts. The Lead Debtor listed between $50 million and $100 million in total assets and between $100 million and $500 million in total debts. GE COMMERCIAL: Fitch Affirms Low-B Ratings on Five Cert. Classes ---------------------------------------------------------------- Fitch Ratings affirmed and assigned Outlooks to GE Commercial Mortgage Corporation series 2003-C2 commercial mortgage pass- through certificates as: -- $56.2 million class A-2 at 'AAA'; Outlook Stable; -- $54.3 million class A-3 at 'AAA'; Outlook Stable; -- $406.1 million class A-4 at 'AAA'; Outlook Stable; -- $178.4 million class A-1A at 'AAA'; Outlook Stable; -- Interest-only class X-1 at 'AAA'; Outlook Stable; -- Interest-only class X-2 at 'AAA'; Outlook Stable; -- $35.5 million class B at 'AAA'; Outlook Stable; -- $14.8 million class C at 'AAA'; Outlook Stable; -- $26.6 million class D at 'AAA'; Outlook Stable; -- $14.8 million class E at 'AAA'; Outlook Stable; -- $14.8 million class F at 'AAA'; Outlook Stable; -- $14.8 million class G at 'AA'; Outlook Positive; -- $14.8 million class H at 'A'; Outlook Positive; -- $19.2 million class J at 'BBB'; Outlook Positive; -- $7.4 million class K at 'BB+'; Outlook Positive; -- $8.9 million class L at 'BB'; Outlook Stable; -- $4.4 million class M at 'B+'; Outlook Stable; -- $7.4 million class N at 'B'; Outlook Stable; -- $3 million class O at 'B-'; Outlook Stable; -- $1.9 million class BLVD-1 at 'A'; Outlook Stable; -- $2.5 million class BLVD-2 at 'A-'; Outlook Stable; -- $4.5 million class BLVD-3 at 'BBB+'; Outlook Stable; -- $3.5 million class BLVD-4 at 'BBB'; Outlook Stable; -- $8 million class BLVD-5 at 'BBB-'; Outlook Negative. Fitch does not rate $18.5 million class P certificates and class A-1 has paid in full. The affirmations are due to stable Fitch-expected credit enhancement levels since Fitch's last rating action. The pool paid down by 6.5% of the aggregate principal balance since the last Fitch rating action, due to the repayment of six loans (5.0%), the liquidation of one loan (0.8%), and scheduled amortization. However, a majority of the paydown (52.0%) came from defeased or liquidated loans already incorporated in the Fitch-expected credit enhancement levels. In addition, the transaction's concentration of Fitch loans of concerns increased slightly, to 6.0% from 4.4%. The Rating Outlooks reflect the likely direction of any rating changes over the next one to two years. As of the October 2008 distribution date, the pool's aggregate principal balance has decreased 23.7% to $920.3 million, from $1.21 billion at issuance. To date, 26 loans (29.3%) have defeased, including four of the top 10 loans (10.9%). Currently, there is one asset (0.4%) in special servicing, with expected losses that are anticipated to be absorbed by the non- rated class. The loan is secured by a 660-unit self-storage facility located in eastern New Orleans, Louisiana, which sustained damage from hurricanes Katrina and Rita. The property is 100% vacant, and is currently listed for sale. Fitch has identified nine Fitch loans of concern (6.0%). The largest Fitch loan of concern (2.6%) is secured by a 227,939 square foot retail property located in Central Valley, New York. A major tenant (13.6%), Linens 'n Things, rejected its lease at the property as part of its May 2008 bankruptcy protection filing. According to a rent roll dated June 30, 2008, additional rollover is limited to 0.6% and 0.9% of the net rentable area in 2009 and 2010, respectively; however, it is unclear if any co-tenancy provisions exist in the leases corresponding to other tenants at the property. Prior to the Linens 'n Things vacancy, the property was 100% occupied, compared to 99% occupancy at issuance. No other Fitch loan of concern represents more than 1% of the pool. Two shadow-rated loans remain, of which, one, the Wellbridge Portfolio (2.3%), has defeased. The Boulevard Mall loan (7.0%) is secured by a 1.2 million sf regional mall in Las Vegas, Nevada, of which 587,170 sf represents collateral. The A note has been divided into two pari-passu notes, one of which is included in the trust ($44.2 million). The B note, a $20.5 million non-pooled portion of the loan, is also included in the trust and collateralizes classes BLVD-1 through BLVD-5. Total occupancy was 98.7% as of December 2007, up from 92.6% at issuance. The loan, which matures in 2013, has a coupon of 4.27%. Though collateral performance has been stable to date, Fitch is concerned about weakening fundamentals in the Las Vegas retail market as well as the declining financial condition of the mall's operator and the loan sponsor, General Growth Properties. The Outlooks reflect the concern. The transaction has limited near-term maturity risk, with no loans scheduled to mature throughout the remainder of 2008 or in 2009. The next scheduled maturities occur in 2010, when five non- defeased loans (2.0%) mature. The transaction's weighted average coupon is 5.56% and interest rates range from 4.27% to 7.73%. GENERAL MOTORS: $15BB Asset Sale Proceeds May be Insufficient ------------------------------------------------------------- General Motors Corp.'s planned $15 billion in asset sales and savings won't be enough to maintain its liquidity as sales deteriorate, Jeff Green at Bloomberg News reports, citing people familiar with the matter. According to Bloomberg, the sources said that General Motors may implement another round of cost cuts. U.S. and Europe sales have declined more than GM expected, making the company reexamine its spending, the report says, citing the sources. Bloomberg quoted Comerica Bank's chief economist Dana Johnson as saying, "Virtually every economic forecast has been downgraded in the last several months because of the tremendous problems in the financial markets. It's only logical that GM is making adjustments to its own plans." Citing JPMorgan Chase & Co. analyst Himanshu Patel, Bloomberg relates that GM's reserves may fall below $12.5 billion by the second quarter, and it will need asset sales, federal loans, new debt or cash from its merger with Chrysler LLC to get through the rest of the year. A combined company might produce $6 billion in savings while still failing to assure long-term health, the report states, citing Deutsche Bank analyst Rod Lache, who assigns a "hold" recommendation on GM's shares. 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. GENERAL MOTORS: Might Sell ACDelco Business, Bloomberg Report Says ------------------------------------------------------------------ Bill Koenig and Alex Ortolani at Bloomberg News report that General Motors Corp. said it may sell its ACDelco replacement- parts business. ACDelco is located in Grand Blanc, Michigan. It makes parts like batteries, oil filters, and windshield wipers, and has about 600 workers. GM said in a statement that Merrill Lynch will assist in the possible sale. Bloomberg relates that GM is considering divesting ACDelco as part of its efforts to raise as much as $4 billion through asset sales. The report says that GM seeks to boost its available funding by $15 billion by the end of 2009. Bloomberg quoted Global Insight, Inc., auto analyst Aaron Bragman as saying, "GM needs the cash and this is another way to try and raise." GM, says Bloomberg, is raising cash after it reported $69.8 billion in losses since the end of 2004, and an 18% drop in its U.S. sales of cars and light trucks this year through September. Law firm Butzel Long's automotive practice chief W. Patrick Dreisig said that ACDelco may attract a private-equity buyer as the replacement-parts business can bring in cash even if new- vehicle sales are declining, Bloomberg states. "This business would produce a cash flow, which is particularly important to a private-equity buyer. There's a lot of private-equity money that is amassed and sitting on the sidelines right now," Bloomberg quoted Mr. Dreisig as saying. 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. GENERAL MOTORS: GMAC Tells Dealers to Pay Off Older Inventory ------------------------------------------------------------- Reuters reports that GMAC LLC told some General Motors Corp. dealers to start paying off older inventory. Citing California New Car Dealers Association President Peter Welch, Reuters states that many GM dealers in California were told to begin paying down the principal they owe on GM vehicles over 180 days old, and the new payments will require principal payments of five to 10 percent a month. Reuters relates that a major dealer group is protesting GMAC's decision, calling the move as an unfair tightening of credit that could prompt dealer bankruptcies. According to the report, California New Car Dealers Association President Peter Welch said in a letter of protest to GMAC, "Unless immediately stopped, GMAC's actions will directly lead to the insolvency of a number of our dealer members. At a time of their greatest need, our GM dealer members feel completely abandoned by GMAC's rogue actions." As reported in the Troubled Company Reporter on Oct. 15, 2008, GMAC's CEO Al de Molina said that the company has "limited if any access to funding" for its mortgage and auto-lending units. Mr. de Molina said that GMAC may cut auto lending in some international markets and that it is considering "strategic initiatives." GMAC, says Reuters, has limited financing for dealerships and for consumer purchases due to its own difficulty securing credit. According to Reuters, GMAC said that it had been forced to cut back on consumer loans due to the credit "market disruption." The company said that changes to inventory financing were being made on a case-by-case basis to lessen risk, the report states. GMAC spokesperson Gina Proia said in a statement, "We continue to implement prudent risk management that includes working with dealers, regularly assessing credit-worthiness and appropriately taking actions to reduce risk." The steps by GMAC threaten to compound sales difficulties for GM, Reuters states, citing analysts. 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 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. GENERAL MOTORS: Gov't May Step in Chrysler Merger Talks ------------------------------------------------------- Negotiations between General Motors Corp. and Chrysler LLC might necessitate going to the U.S. Congress for cash, The Economic Times reports, citing a source involved in the financing discussions. According to The Economic Times, GM is reportedly interested in Chrysler first for its $11 billion in cash. The report says that the cash may not be enough for GM to take on Chrysler. GM, according to the report, may be unwilling to acquire Chrysler without additional money. The acquisition of Chrysler would bring in factories, brands, models, dealers, and employees to GM, the report states. The Congress may be interested in "kicking in" cash because if Chrysler goes into bankruptcy, the government could be forced to take on the pension costs for the company's 124,924 retirees and spouses, The Economic Times relates, citing industry analysts. According to the report, the Congress may also want to keep as many of Chrysler's 49,000 US jobs as possible. The Economic Times states that Sen. Carl Levin said in a debate on Monday that the government may need to get involved in the GM- Chrysler deal. Ron Gettelfinger, the United Auto Workers union's president, is worried that a GM-Chrysler merger would result in massive job losses, The Economic Times says. About Chrysler LLC Headquartered in Auburn Hills, Michigan, Chrysler LLC -- http://www.chrysler.com/-- a unit of Cerberus Capital Management LP, produces Chrysler, Jeep(R), Dodge and Mopar(R) brand vehicles and products. The company has dealers worldwide, including Canada, Mexico, U.S., Germany, France, U.K., Argentina, Brazil, Venezuela, China, Japan and Australia. * * * As reported in the Troubled Company Reporter on Aug. 11, 2008, Standard & Poor's Ratings Services lowered its ratings on Chrysler LLC, including the corporate credit rating, to 'CCC+' from 'B-'. On July 31, 2008, TCR said that Fitch Ratings downgraded the Issuer Default Rating of Chrysler LLC to 'CCC' from 'B-'. The Rating Outlook is Negative. The downgrade reflects Chrysler's restricted access to economic retail financing for its vehicles, which is expected to result in a further step-down in retail volumes. Lack of competitive financing is also expected to result in more costly subvention payments and other forms of sales incentives. Fitch is also concerned with the state of the securitization market and the ability of the automakers to access this market on an economic basis over the near term, given the steep drop in residual values, higher default rates, higher loss severity being experienced and jittery capital market. 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. GMAC LLC: Tells GM Dealers to Pay Off Older Inventory ----------------------------------------------------- Reuters reports that GMAC LLC told some General Motors Corp. dealers to start paying off older inventory. Citing California New Car Dealers Association President Peter Welch, Reuters states that many GM dealers in California were told to begin paying down the principal they owe on GM vehicles over 180 days old, and the new payments will require principal payments of five to 10 percent a month. Reuters relates that a major dealer group is protesting GMAC's decision, calling the move as an unfair tightening of credit that could prompt dealer bankruptcies. According to the report, California New Car Dealers Association President Peter Welch said in a letter of protest to GMAC, "Unless immediately stopped, GMAC's actions will directly lead to the insolvency of a number of our dealer members. At a time of their greatest need, our GM dealer members feel completely abandoned by GMAC's rogue actions." As reported in the Troubled Company Reporter on Oct. 15, 2008, GMAC's CEO Al de Molina said that the company has "limited if any access to funding" for its mortgage and auto-lending units. Mr. de Molina said that GMAC may cut auto lending in some international markets and that it is considering "strategic initiatives." GMAC, says Reuters, has limited financing for dealerships and for consumer purchases due to its own difficulty securing credit. According to Reuters, GMAC said that it had been forced to cut back on consumer loans due to the credit "market disruption." The company said that changes to inventory financing were being made on a case-by-case basis to lessen risk, the report states. GMAC spokesperson Gina Proia said in a statement, "We continue to implement prudent risk management that includes working with dealers, regularly assessing credit-worthiness and appropriately taking actions to reduce risk." The steps by GMAC threaten to compound sales difficulties for GM, Reuters states, citing analysts. 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. GM Europe is based in Zurich, Switzerland, while General Motors Latin America, Africa and Middle East is headquartered in Miramar, Florida. At June 30, 2008, the company's balance sheet showed total assets of US$136.0 billion, total liabilities of US$191.6 billion, and total stockholders' deficit of US$56.9 billion. For the quarter ended June 30, 2008, the company reported a net loss of US$15.4 billion over net sales and revenue of US$38.1 billion, compared to a net income of US$891.0 million over net sales and revenue of US$46.6 billion for the same period last year. 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. GOODY'S FAMILY: Will Close Unprofitable Albany Outlet in December ----------------------------------------------------------------- Goody's Family Clothing, Inc., will be closing its Albany store in December, after 14 years in Cross Station Shopping Center on Old Dawson Road, The Albany Herald (Georgia) reported Saturday. According to the report, the store is one of five added Friday to a list of 69 stores Goody's is closing under a Chapter 11 bankruptcy restructuring plan, a company official said. "It's a difficult thing to do, to tell these employees that we care about so much that their stores are closing," Joanna Drake Gager, public relations coordinator with Goody's said. Goody's operated 355 stores in 20 states when it disclosed in June plans to restructure operations in order to reduce expenses and attempt to return to profitability. "It's a difficult decision," Ms. Gager said of Goody's choice of which stores to close, "but it is based on the performance of sales at the store. Those stores have not met our business expectations." Goody's opened the 35,000-square-foot Albany store in November 1994. "We anticipate that the store will close Dec. 20, and will be 100 percent vacated by Dec. 31," Ms. Gager said. As reported in the Troubled Company Reporter on Oct. 21, 2008, Goody's Family Clothing, Inc. disclosed that the company's Second Amended Plan of Reorganization proposed by Goody's Family Clothing, Inc., its Subsidiary Debtors and the Official Committee of Unsecured Creditors became effective on Oct. 20,2008, marking the company's emergence from Chapter 11 bankruptcy. The Plan was confirmed by order of the United States Bankruptcy Court for the District of Delaware on Oct. 7, 2008. During the Chapter 11 bankruptcy, Goody's streamlined and reorganized its operations to improve the business model, significantly reduced operating costs, and maximized the value of core assets. This included the closure and liquidation of 69 underperforming retail locations in 18 states, the closing of a distribution center in Arkansas and a corporate office in New York, and the elimination of excessive corporate spending. In addition, Goody's eliminated the company's e-commerce business, well as an associated distribution center in Tennessee. About Goody's Family Headquartered in Knoxville, Tennessee, Goody's Family Clothing Inc. -- http://www.shopgoodys.com/-- operates chains of clothing stores. The company is owned by Goody's Holdings Inc., a non- debtor entity. The company and 19 of its affiliates filed for Chapter 11 protection on June 9, 2008 (Bankr. D. Del. Lead Case No. 08-11133). Gregg M. Galardi, Esq., and Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom LLP, and Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, represent the Debtors. The Debtors selected Logan and Company Inc. as their claims agent. The U.S. Trustee for Region 3 appointed seven creditors to serve on an Official Committee of Unsecured Creditors. Frederick Brian Rosner, Esq., at Duane Morris LLP, and Lawrence C. Gottlieb, Esq., Cathy Herschopf, Esq., and Jeffrey L. Cohen, Esq., at Cooley Godward Kronish LLP, represent the Committee in these cases. When the Debtors filed for protection against their creditors, they listed assets and debts of between $100 million and $500 million. As of May 3, 2008, the Debtors' records reflected total assets of $313,000,000 -- book value -- and total debts of $443,000,000. GWLS HOLDINGS: Seeks Dec. 19 Auction, Lenders as Lead Bidder ------------------------------------------------------------ GWLS Holdings Inc. and its debtor-affiliates ask the United States Bankruptcy Court for the District of Delaware to approve proposed bidding procedures for the sale of substantially all of their assets, free and clear of liens, claims, encumbrances, and interests. The Debtors negotiated with their first lien lenders the terms and conditions of the asset purchase agreement, with NEWCO LLC, an acquisition vehicle to be formed by the lenders. The agreement involves a credit bid made by the lenders on account of 90% of the outstanding principal, interest and letters of credit issued under the first lien credit agreement. The Debtors entered into a first lien credit agreement dated Dec. 19, 2006, in the aggregate amount of $370 million, comprised of (i) a $300 million term loan; and $70 million revolving credit facility, secured by all of the Debtors' assets. The Debtors previously negotiated a restructuring plan with the First Lien Lenders and certain of the lenders who funded their $117-million secured second-lien credit facility. The Debtors, however, elected to pursue a sale process, given the inability of their lenders to agree on the terms of a consensual restructuring, and increasing concerns and rumors of the deterioration of their business. UBS AG, Stamford Branch, is the administrative agent for the First Lien Facility. UBS also previously represented, as administrative agent, the Second Lien Lenders but resigned. Bids along with a $7.5-million minimum good-faith deposit must be submitted by Dec. 15, 2008. All bids must exceed NEWCO's offer by $3.5 million. NEWCO will be entitled to seek reimbursement of up to $1.5 million in the event the Debtors select another bidder. An auction will take place on Dec. 19, 2008, at 10:00 a.m., at the Offices of Young Conaway Stargatt & Taylor, LLP, at 1000 West Street, 17th Floor in Wilmington, Delaware. The Debtors expect the sale hearing to occur by Dec. 31, 2008. NEWCO may terminate the Stalking Horse Agreement if closing of the sale is not consummated by January 31, 2009. The First Lien Lenders will be paid at least $7.5 million in fee in the event the sale agreement is terminated, and $1.5 million in expense reimbursement. A full-text copy of the Asset Purchase Agreement between the Debtors and NEWCO LLC is available for free at: http://ResearchArchives.com/t/s?3429 NEWCO LLC is represented by: Latham & Watkins LLP 885 Third Avenue New York, New York 10010 Attn: David Heller Attn: Howard Sobel Facsimile No.: 212-751-4864 - and - Paul, Hastings, Janofsky & Walker LLP 600 Peachtree Street, N.E. Twenty-Fourth Floor Atlanta, GA 30308 Attn: Frank Layson Facsimile NO.: 404-685-5206 Headquartered in Dallas, Texas, GWLS Holdings Inc. -- http://www.greatwide.com/-- operate trucking and logistics company. The company and 50 of its affiliates filed for Chapter 11 protection on Oct. 20, 2008 (Bankr. D. Del. Lead Case No. 08-12430). Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, as the Debtors' counsel. Willkie Farr Gallagher LLP, represents as the Debtors' co-counsel. Miller Buckfire & Co., LLC, is the Debtors' financial advisor. When the Debtors filed sought bankruptcy protection from their creditors, they listed assets and debts between $500 million and $1 billion each. HARBOUR WALK: Receives Bid for 53-Acre Property From Stuart City ---------------------------------------------------------------- The city of Stuart, Florida, has offered to purchase a 53-acre parcel in north Stuart from Harbour Walk Preserve, LLC, Jim Mayfield, correspondent for Stuart News, Fla. reported Tuesday. Mr. Mayfield said Stuart city commissioners last week authorized an offer of up to 60 percent of the property's appraised value. The exact amount of the offer was not disclosed. Payment for the purchase will come from the half-cent sales tax initiative referendum passed in 2006 that went into effect in 2007, Stuart City Manager Dan Hudson said. Harbour Walk sought bankruptcy protection after its lender Seacoast National Bank foreclosed on the developer, claiming it was owed $14 million on a $22 million line of credit. Palm Beach Gardens, Florida-based Harbour Walk Preserve LLC filed for Chapter 11 protection on May 23, 2008 (Bankr. S.D. Fla. Case No. 08-16789). Bradley S. Shraiberg, Esq., John E. Page, Esq., and Eyal Berger, Esq., at Kluger Peretz Kaplan & Berlin P.L., represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed estimated assets and debts of $10 million to $50 million. HERTZ CORPORATION: Fitch Affirms Ratings on Stable Market Position ------------------------------------------------------------------ Fitch Ratings has affirmed the Hertz Corporation's Issuer Default Rating and outstanding debt ratings as: -- IDR at 'BB'; -- Senior secured revolving facility at 'BBB'; -- Secured term facility at 'BBB-'; -- Letter of credit facility at 'BBB-'; -- Senior unsecured debt at 'BB-'; -- Subordinated Debt at 'B+'; Fitch has also revised Hertz's Rating Outlook to Stable from Positive. Hertz Global Holdings, Inc. (NYSE: HTZ) is the ultimate parent company of Hertz. Approximately $4.2 billion of debt is affected by this rating action. The affirmation of Hertz's ratings reflects the strength of the company's stable market position in the car rental and commercial equipment markets, positive free cash flow generation, and good collateral coverage for its debt. Fitch's rating also incorporates Hertz's secured funding profile, increasing vehicle costs and cyclical operating performance. Fitch's Outlook revision to Stable from Positive reflects the belief that weakening economic conditions in the United States and unprecedented capital market dislocations have hampered Hertz's near-term ability to sustain improvements in operating performance and free cash flow. Fitch expects weakening economic conditions will reduce demand for rental cars and rental equipment. Further, weakening of used car prices will generate additional downward pressure on operating results due to the increased percentage of at-risk vehicles in Hertz's rental fleet. Although liquidity remains sufficient to support funding and maturing debt requirements through 2009, Fitch believes that Hertz's ongoing efforts to develop funding alternatives to insured asset securitization also represent a meaningful near-term challenge. This effort is necessary given its exposure to monoline guarantors. Fitch notes that overall collateral coverage is substantial and supports full repayment of all debt classes, assuming an orderly liquidation. Full repayment of debt is substantially less reliant on the sale or liquidation of Hertz's trademark. Fitch will continue to assess the relative adequacy of collateral to support repayment of debt and may revise the current notching of security specific ratings from their current levels relative to Hertz's IDR, including equating the senior unsecured debt rating with the IDR. HEXION SPECIALTY: Nimbus Unit Prices Offering of Senior Notes ------------------------------------------------------------- Hexion Specialty Chemicals, Inc., disclosed the consideration to be paid in the cash tender offers and consent solicitations by Nimbus Merger Sub Inc., a subsidiary of Hexion, for any and all of the outstanding: (A) i) Second-Priority Senior Secured Floating Rate Notes due 2014 (CUSIP No. 428303AG6); and ii) 9-3/4% Second-Priority Senior Secured Notes due 2014 (CUSIP No. 428303AH6) issued by Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC; and (B) i) 11a...% Senior Secured Notes due 2010 (CUSIP No. 44701RAE0); ii) 11-1/2% Senior Notes due 2012 (CUSIP No. 44701RAG5); iii) 7a...oe% Senior Subordinated Notes due 2015 (CUSIP No. 44701QAK8); iv) 7-1/2% Senior Subordinated Notes due 2015 (CUSIP No. 44701QAL6); v) 7a...% Subordinated Notes due 2014 (CUSIP No. 44701QAP7); and vi) 6a...% Subordinated Notes due 2013 (Reg. S ISIN No. XS0274281186, Rule 144A ISIN No. XS0274281855), in each case issued by Huntsman International Inc. fka Huntsman International LLC. The total consideration for each $1,000 in principal amount of the Huntsman 11a...% Notes that was validly tendered and not withdrawn by 5:00 p.m., New York City time, on Oct. 22, 2008, will be $1,034.06. The Total Consideration for each $1,000 in principal amount of the Huntsman 11-1/2% Notes that was validly tendered and not withdrawn by the Consent Payment Deadline will be $1,062.50. The Total Consideration for each other series of the Hexion Notes and the Huntsman Notes was determined as of 10:00 a.m., New York City time, on Oct. 23, 2008, by reference to a fixed spread of 50.0 basis points above the yield to maturity of the applicable reference security as described in the respective Offers to Purchase and Consent Solicitation Statements, each dated Oct. 8, 2008. The reference yield for the Floating Rate Notes was 0.811%; the reference yield for the 9-3/4% Notes was 1.344%; the reference yield for the Huntsman 7a...oe% Notes was 1.526%; the reference yield for the Huntsman 7-1/2% Notes was 2.734%; the reference yield for the Huntsman 7a...% Notes was 1.344%; and the reference yield for the Huntsman 6a...% Notes was 2.734%. Assuming a payment date of Nov. 6, 2008, the Total Consideration for such Notes that were validly tendered and not withdrawn by the Consent Payment Deadline is $1,021.49 per $1,000 principal amount for the Floating Rate Notes; $1,203.40 per $1,000 principal amount for the 9 3/4% Notes; $1,096.64 per $1,000 principal amount for the Huntsman 7a...oe% Notes; 1,083.97 per 1,000 principal amount for the Huntsman 7-1/2% Notes; $1,157.27 per $1,000 principal amount for the Huntsman 7a...% Notes; and 1,086.30 per 1,000 principal amount for the Huntsman 6a...% Notes. In each case, the Total Consideration includes a cash consent payment of $15.00 per $1,000 principal amount, in the case of the dollar- denominated Notes, or 15.00 per 1,000 principal amount, in the case of euro-denominated Notes. Holders who tender their Notes and deliver their consents after the Consent Payment Deadline but prior to the Offer Expiration Date will receive the applicable tender offer consideration, which consists of the applicable Total Consideration less the cash consent payment. All holders of Notes validly tendered prior to the Offer Expiration Date will receive accrued and unpaid interest on their tendered Notes up to, but not including, the payment date for the tender offer and consent solicitation. As a result of the receipt of the requisite consents to adopt certain proposed amendments to the applicable indentures pursuant to which each series of the Notes was issued, each of (i) the First Supplemental Indenture by and among the Hexion Issuers, Hexion, each of the guarantors party thereto and Wilmington Trust Company, as trustee for the holders of the Floating Rate Notes and the 9-3/4% Notes; (ii) the Fourth Supplemental Indenture by and among Huntsman (as successor by merger to Huntsman LLC), each of the guarantors party thereto and HSBC Bank USA, as trustee for the holders of the Huntsman 11a...% Notes; (iii) the Fourth Supplemental Indenture by and among Huntsman (as successor by merger to Huntsman LLC), each of the guarantors party thereto and HSBC, as trustee for the holders of the Huntsman 11-1/2% Notes; (iv) the Third Supplemental Indenture by and among Huntsman, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee for the holders of the Huntsman 7a...oe% Notes and the Huntsman 7-1/2% Notes; and (v) the First Supplemental Indenture by and among Huntsman, the guarantors party thereto and Wells Fargo, as trustee for the holders of the Huntsman 7a...% Notes and the Huntsman 6a...% Notes, has been executed. The proposed amendments, which will eliminate substantially all of the restrictive covenants and eliminate or modify certain events of default and related provisions contained in each applicable indenture and will terminate the liens under the Hexion Notes indenture will become operative when the tendered Notes are accepted for purchase. In addition, if consents in respect of 100% of the outstanding Huntsman 11a...% Notes are received, the proposed amendments will effect a release of the liens securing the Huntsman 11a...% Notes when the tendered Notes are accepted for purchase. The tender offers and consent solicitations will expire at midnight, New York City time, on Nov. 5, 2008, unless extended or earlier terminated by Nimbus. Nimbus reserves the right, at any time or times prior to the Expiration Date, to accept for purchase Notes validly tendered. In the event of an early acceptance, the Total Consideration for the Floating Rate Notes, the 9 3/4% Notes, the Huntsman 7a...oe% Notes, the Huntsman 7-1/2% Notes, the Huntsman 7a...% Notes and the Huntsman 6a...% Notes will be adjusted in accordance with the Offer Documents. Nimbus's tender offers are subject to the conditions set forth in the Offer Documents including, among other things, obtaining the financing necessary to pay for the Notes and consents in accordance with the terms of the tender offers and consent solicitations and consummation of Hexion's Proposed acquisition of Huntsman Corporation. Nimbus has retained Oppenheimer & Co. Inc., to act as Dealer Manager in connection with the tender offers and consent solicitations. Questions about the tender offers and consent solicitations may be directed to Oppenheimer & Co. Inc., at (800)274-2746 (toll free) or (212)885-4646 (collect). Copies of the Offer Documents and other related documents may be obtained from D.F. King& Co., Inc., the information agent for the tender offers and consent solicitations, at (800)290-6426 (toll free) or (212)269-5550 (collect). Hexion has entered into a supplemental indenture dated as of October 23, 2008, to the Indenture dated as of November 3, 2006, in light of the tender offers and consent solicitations by Nimbus Merger. A copy of the Supplemental Indenture is available at: http://researcharchives.com/t/s?3435 About Hexion Specialty Based in Columbus, Ohio, Hexion Specialty Chemicals Inc. -- http://www.hexionchem.com/-- is a producer of thermosetting resins, or thermosets. Thermosets are a critical ingredient in virtually all paints, coatings, glues and other adhesives produced for consumer or industrial uses. Hexion Specialty Chemicals is controlled by an affiliate of Apollo Management L.P. Hexion Specialty Chemicals Inc.'s balance sheet at June 30, 2008, showed total assets of $3.9 billion and total liabilities of $5.4 billion, resulting in a shareholders' deficit of $1.5 billion. HILANDER BOWL: Kelso Center Closed for Non-Payment of Back Taxes ---------------------------------------------------------------- State Department of Revenue agents closed the Hilander Family Fun Center Wednesday morning in Kelso, Washington for failing to pay back taxes, The Daily News (Longview, Washington) reports. The closure of the Center came after the Hon. Paul B. Snyder of the U.S. Bankruptcy Court for the Western District of Washington revoked the bankruptcy protection for Hilander Bowl, Inc.'s Hilander Family Fun Center in Kelso. The dismissal of the Center's Chapter 11 case has allowed the state to pursue causes of auction in light of the Center's non-payment back taxes. The report says the Department of Revenue has issued seven warrants for $436,730 in unpaid sales taxes dating back to August 2005. The Center still owes the agency around $385,000. Jim Springer's, the Center's owner, has appealed the bankruptcy judge's ruling. According to the report, Hilander was shut down for five days in February after a 2007 bankruptcy filing was dismissed by the Court. It reopened after Springer put up a $100,000 bond and agreed to a payment plan for the back taxes. The state's Department of Revenue, however, moved to revoke the $100,000 bond that Mr. Jim Springer put up in March as a guarantee that he would pay delinquent taxes. About Hilander Bowl Kelso, Washington-based Hilander Bowl, Inc., has a 40,000 square- foot facility equiped with a fun center, 23 bowling lanes, full service restaurant, a 4,000 square-foot lounge, and two snackbars. Its Fun Centery has video games, a redemption area, a carousel, Rocket Ride, Human Habitrail, and LazerTag. The company filed for Chapter 11 protection on Sept. 5, 2008 (Bankr. W.D. Wa. Case No. 08-44430). Timothy J. Dack, Esq., at Horenstein & Duggan PS represents the Debtor as counsel. The company listed assets of $1 million to $10 million and debts of $1 million to $10 million. This is the company's second Chapter 11 filing. The earlier case (Bankr. W.D. Wa. 07-42403), which was filed on July 31, 2007, was also dismised. HOLIDAY ISLE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Holiday Isle, LLC 41 West I-65 Service Rd. N., Suite 300 Mobile, AL 36608 Bankruptcy Case No.: 08-14135 Chapter 11 Petition Date: October 23, 2008 Court: Southern District of Alabama (Mobile) Debtor's Counsel: Irvin Grodsky, Esq. igpc@irvingrodskypc.com P.O. BOX 3123 Mobile, AL 36652-3123 Tel: (251) 433-3657 Estimated Assets: $10 million to $50 million Estimated Debts: $1 million to $10 million The Debtor's Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Paul Thompson $150,000 P.O. Box 774 Orange Beach, AL 36561 Michael Nix $148,500 6036 Saddle Club Road Pace, FL 32571 Richard Murray, III $146,800 215 S. McGregor Ave. Mobile, AL 36608 Dr. Robert C. Nusbaum $145,200 Charles E. Campbell $145,200 Jay H. and Lisa T. Murray $136,800 Thomas and Lisa McKinley $134,600 Three M Properties, LLC $134,200 Timothy I. Warren $132,000 Quad D. Rentals, LLC $130,200 Fred Pace $130,200 Michael Combs $130,200 Jason R. Williams $129,400 Charles D. and Donna M. Steinau $129,400 Chris Golonka & Kazimierz Golonka $129,000 Greg Woodfin $129,000 Robert Downs $127,400 Mary Jo Rapetti $127,400 Carissa Carisse $127,400 Robert Tortagada, Sr. $127,400 INTEREP NATIONAL: Wants Case Converted to Chapter 7 Liquidation --------------------------------------------------------------- Interep National Radio Sales Inc. and its debtor-affiliates ask the Hon. Robert D. Drain of the United States Bankruptcy Court for the Southern District of New York to convert their Chapter 11 cases to a Chapter 7 liquidation proceeding. Erica M. Ryland, Esq., at Jones Day, listed two grounds that warrant the conversion: i) an event of default under the Debtors' postpetition financing facility will occur Oct. 24, 2008, wherein the Debtors may lose all access to liquidity; and ii) certain of the Debtors' key leases will be deemed rejected by operation of law under Section 365(d) of the Bankruptcy Code on Monday, Oct. 27, 2008. The conversion of the Debtors' cases is in the best interest of their estates and their creditors, Ms. Ryland said. About Interep National Headquartered in New York, Interep National Radio Sales, Inc. -- http://www.interep.com/-- are independent sales and marketing companies that specialize in radio, the Internet, television and complementary media. With 16 offices across the U.S., they serve radio and television station clients and advertisers in all 50 states and beyond. The company and 14 of its affiliates filed for Chapter 11 protection on March 30, 2008 (Bankr. S.D.N.Y. Lead Case No.08-11079). Erica M. Ryland, Esq., at Jones Day, represents the Debtors in their restructuring efforts. No Official Committee has been appointed in the cases to date. The Debtors selected Kurztman Carson Consultants LLC as claims, noticing and balloting agent. When the Debtor filed for protection from their creditors, it listed between $50 million and $100 million in asset and between $100 million and $500 million in debts. INTERSTATE BAKERIES: Court OKs $600-Mil. Bankruptcy Exit Loan ------------------------------------------------------------- The Hon. Jerry Venters of the United States Bankruptcy Court for the Western District of Missouri approved Oct. 22, 2008, a financing agreement that would provide Interstate Bakeries Corporation over $600 million in funds to emerge from Chapter 11 bankruptcy, Law360 reports. General Electric Capital Corporation, as administrative and collateral agent, and GE Capital Markets, Inc., as lead arranger, pursuant to which GE Capital and GECM will provide IBC with a $125,000,000 senior secured revolving credit facility. Silver Point Finance, LLC and Monarch Master Funding Ltd., meanwhile, will provide a five-year term loan facility in the amount of $339,000,000 in exchange for 4.42 million shares of new common stock. In addition, as disclosed in the Troubled Company Reporter, Ripplewood Holdings L.L.C. affiliate IBC Investors I, LLC, committed to acquire on IBC's effective date of reorganization 4,420,000 shares of IBC's new common stock for $44,200,000, and new convertible debt in the principal amount of $85,800,000 for a purchase price of $85,800,000. IBC Investors' commitment to purchase equity is contingent upon, among other things, (i) the endorsement of Silver Point, Monarch, and McDonnel Investment Management LLC, which collectively holder 53.8% of the aggregate prepetition debt outstanding under the Amended and Restated Credit Agreement, dated April 24, 2002, among IBC, Interstate Brands Corporation, a host of lenders, and JPMorgan Chase Bank, N.A., as administrative agent, and (ii) confirmation of IBC's reorganization plan by January 15, 2009. About IBC Headquartered in Kansas City, Missouri, Interstate Bakeries Corporation is a wholesale baker and distributor of fresh-baked bread and sweet goods, under various national brand names, including Wonder(R), Baker's Inn(R), Merita(R), Hostess(R) and Drake's(R). Currently, IBC employs more than 25,000 people and operates 45 bakeries, as well as approximately 800 distribution centers and approximately 800 bakery outlets throughout the country. The company and eight of its subsidiaries and affiliates filed for chapter 11 protection on Sept. 22, 2004 (Bankr. W.D. Mo. Case No. 04-45814). J. Eric Ivester, Esq., and Samuel S. Ory, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,626,425,000 in total assets and $1,321,713,000 (excluding the $100,000,000 issue of 6% senior subordinated convertible notes due Aug. 15, 2014) in total debts. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 5, 2007. Their exclusive period to file a chapter 11 plan expired on November 8, 2007. On Jan. 25, 2008, the Debtors filed their First Amended Plan and Disclosure Statement. On Jan. 30, 2008, the Debtors received court approval of the first amended Disclosure Statement. IBC did not receive any qualifying alternative proposals for funding its plan of reorganization in accordance with the court-approved alternative proposal procedures. As a result, no auction was held on Jan. 22, 2008, as would have been required under those procedures. The Debtors, on Oct. 4, 2008, filed another Plan of Reorganization, which contemplates IBC's emergence from Chapter 11 as a stand-alone company. The filing of the Plan was made in connection with the plan funding commitments, on September 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. and from Silver Point Finance, LLC, and Monarch Master Funding Ltd. (Interstate Bakeries Bankruptcy News; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) JAMES SANDERSON: Files for Chapter 11 Protection ------------------------------------------------ Janet Leiser at Tampa Bay (Florida) Business Journal reports that eye surgeon James C. Sanderson filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Middle District of Florida on Tuesday. Al Gomez Jr., Esq., at Morse & Gomez represents Dr. Sanderson, Tampa Bay Business states. Mr. Gomez, according to court documents, is seeking an emergency injunction to stop St. Luke's Cataract and Laser Institute PA -- Dr. Sanderson's former employer and his largest creditor -- from enforcing its judgment against Dr. Sanderson until a Chapter 11 plan is confirmed. Dr. Sanderson was the resident specialist at St. Luke's Cataract, in charge of facial and eye cosmetic surgery from 1995 to 2003. Dr. Sanderson resigned without notice to start his own practice in Oldsmar. St. Luke's sued Dr. Sanderson in February 2006, accusing the surgeon and the center's former Webmaster of cyber piracy, infringing on trademark rights, and unfair competition. According to court documents, St. Luke's Cataract claimed that the defendants stole a Web site and two Internet domain names after they left the clinic. The dispute started over a back pay issue, Tampa Bay Business states, citing Dr. Sanderson, who claimed that he owned the Laserspecialist.com domain name and the copyright in the Web site. Dr. Sanderson, according to court documents, said that he designed the site in 1998 and authored its content to promote his practice outside the scope of his employment. Tampa Bay Business relates that Dr. Sanderson's pay was a percentage of what he collected from cosmetic procedures he performed. According to the report, Dr. Sanderson alleged that Laserspecialist.com was registered under his own name from its inception, but St. Luke's Cataract argued that the work was within Dr. Sanderson's scope of employment and belonged to the clinic. Last year, the court ruled in favor of St. Luke's Catacract on four counts and one in favor of Dr. Sanderson. The federal court entered another judgment in March 2008 in favor of St. Luke's Cataract. Appeals have been filed by both parties and were still pending on Thursday, Tampa Bay Business states. Court records indicate that St. Luke's Cataract owes Dr. Sanderson some $348,714, almost half as much as the $682,755 the surgeon owes the center. About James Sanderson Florida-based James C. Sanderson, M.D., LLC, is a healthcare company. It filed for Chapter 11 protection on Oct. 21, 2008, listing assets of $100,001 to $1,000,000 and liabilities of $100,001 to $1,000,000. JESUS MALAVET: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Jesus Santiago Malavet dba San Maje Guest House dba Miss Navas Guest House 470 Sagrado Corazon St. Santurce, PR 00915 Bankruptcy Case No.: 08-07087 Chapter 11 Petition Date: October 23, 2008 Court: District of Puerto Rico (Old San Juan) Debtor's Counsel: Jesus Santiago Malavet, Esq. smslopsc@prtc.net Santiago Malavet and Santiago Law Office 470 Sagrado Ccorazon Street San Juan, PR 00915 Tel: (787) 727-3058 Fax: (787) 726-5906 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/prb08-07087.pdf JOHNSTON SHIELD: Gets $1,000 Fine for 22 State Violations --------------------------------------------------------- The Arizona Daily Star reports that Johnston Shield Inc. was fined $1,000 for breaching state law. The Arizona Daily states that the state of Arizona launched an investigation on the firm in May, after the U.S. Army banned troops at Fort Huachuca in Sierra Vista from purchasing cars from Johnston Shield's dealerships due to questionable business practices. The U.S. Army, says the report, agreed to lift the ban and put Johnston Shield on probation. According to The Arizona Daily, the Arizona Department of Transportation charged Johnston Shield of 22 violations of state law. The report states that the company changed vehicle identification numbers on records and issued temporary plates for previously wrecked cars, which shouldn't have been allowed to run. State reports indicate that investigators found evidence of wrongdoing at Wildcat Mitsubishi in 2007 and 2008, The Arizona Daily relates. Inspectors said in at least two cases that Wildcat issued temporary plates for vehicles previously declared "salvage," according to The Arizona Daily. The state, says the report, found six cases in which vehicle identification numbers were changed on applications Wildcat submitted to the state to secure the temporary plates. Wildcat faced similar accusations in July. The Arizona Daily states that the dealership had vehicles that were allegedly not part of legitimate sales deals, because no title changes were ever registered in the transactions. The Arizona Daily relates that Timothy Remick, Esq. -- an attorney for Johnston Shield -- disputed some of the state's findings but said he would not dispute the $1,000 civil penalty and the cancellation of Wildcat's license. The report says that state officials demanded that the license be revoked, instead of allowing the dealership owners to voluntarily surrender their license. The Transportation Department, according to The Arizona Daily, said that it is also investigating Johnston Shield's Ideal Automotive in Sierra Vista dealership, which remains open for business. According to The Arizona Daily, Donald L. Robinson, the administrative judge overseeing the case, said that it is yet unclear if the state will get paid $1,000 due to Johnston Shield's. State officials said that the fine must be put on record in case the companies try to operate in Tucson again, The Arizona Daily reports. Phoenix, Arizona-based Johnston Shield Inc. and debtor- affiliate, Johnston-Shield Properties, LLC, operated Wildcat Mitsubishi and Ideal Automotive Group in Sierra Vista. The Debtors filed for Chapter 11 protection on July 10, 2008 (Bankr. D. Ariz. Case No. 08-08474). Franklin D. Dodge, Esq., represents the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed assets and debts of both $1 million to $100 million. According to Arizona Daily Star, the Debtors listed more than $7 million in unsecured debt, including nearly $1.3 million in unpaid state and federal taxes. MARCIA TURNER: Case Summary & Largest Unsecured Creditor -------------------------------------------------------- Debtor: Marcia T. Turner LLC P.O. Box 5234 Twin Falls, ID 83303-5234 Bankruptcy Case No.: 08-41019 Chapter 11 Petition Date: October 23, 2008 Court: District of Idaho (Twin Falls) Judge: Jim D. Pappas Debtor's Counsel: Brent T. Robinson, Esq. btr@idlawfirm.com P.O. Box 396 Rupert, ID 83350 Tel: (208) 436-4717 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/idb08-41019.pdf MCCLATCHY CO: Fitch Cuts Sr. Notes/Debentures Rating to 'CCC/RR6' ----------------------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating and outstanding debt ratings of The McClatchy Company as: -- IDR to 'B-' from 'B+'; -- Senior secured credit facility to 'B+/RR2' from 'BB+/RR1'; -- Senior secured term loan to 'B+/RR2' from 'BB+/RR1'; -- Senior unsecured notes/debentures to 'CCC/RR6' from 'B/RR5'. The Rating Outlook remains Negative. Approximately $2.1 billion of debt is affected by this action. The downgrade and Negative Outlook reflect the continued significant top-line revenue pressure and resulting decline in EBITDA. As of the last twelve months ending Sept. 30, 2008, revenues have declined a total of 13.6% (15.3% on a year to date comparison), with significant declines in nearly all the print advertising categories. Real estate and employment classified revenues have had the sharpest declines down 38.7% and 39.8%, respectively. LTM Sept. 30, 2008 online growth of 9.5% has not been sufficient to make up for the accelerating declines in print advertising revenues. Over the longer term, Fitch continues to anticipate that MNI will be challenged to generate meaningful and consistent revenue growth and remains cautious regarding newspaper companies' prospects for capturing and monetizing the significant volume of advertising dollars that are migrating toward the internet. Fitch remains conscious that there is limited visibility regarding the likelihood, timeframe and magnitude of a potential reversal of these negative trends. MNI continues to be aggressive in reducing costs; announcing headcount reductions in June and September, totaling 2,550 (approximately 18% of the 2007 year-end employee headcount) and partnerships with other newspapers to reduce print cost. However, these cost reductions have not yet been able to compensate for the significant revenue declines. EBITDA margins (giving credit for one-time restructuring costs that may not be one-time going forward) continue to decline from 27% at year-end 2006 to 25.7% at YE 2007 and down to 22.6% for Sept. 30, 2008 LTM. MNI's liquidity was made up of $9.2 million in cash balances as of June 30, 2008 and revolver capacity of $159 million. Liquidity should be sufficient to satisfy its April 2009 $50 million maturity. The credit facility amendment MNI agreed to on Sept. 26, 2008 increased the banks' guarantee and security package. The banks now benefit from a guarantee from all subsidiaries and a security interest in certain intangible assets, inventory, accounts receivable and certain other assets. The amendment also provides financial covenant flexibility, as the coverage ratio steps down from 2.25 to 2.0x after December 2008, and the leverage ratio steps up from first quarter-2009 through 3Q'10 from 6.25x to 7.0x. However, the flexibility did come at a cost, as the capacity was reduced by $25 million (with an additional $25 million step down at year-end 2009 and a further step down if the Miami land sale is completed), the maximum spread increased to 425 basis points from 200 bps and a further restriction on dividends was implemented. Restriction on dividends include, a total of $16 million of dividends are permitted to be paid during the two fiscal quarters ending in March and June 2009; after the fiscal quarter ending in June 2009, dividends are not permitted if leverage is greater than 5.0x cash flow. The $2.1 billion in total debt is comprised of approximately $1 billion in bank term loans and revolver balances and $1.1 billion in notes/debentures. Leverage as measured by debt-to-EBITDA, was 5.0x (4.7x if the restructuring charges of $40 million are added back to calculate EBITDA). The Recovery Ratings and notching reflect Fitch recovery expectations under a distressed scenario. The 'RR2' rating for MNI's secured bank credit facility reflects Fitch's belief that 71%-90% recovery is realistic given that it benefits from a security interest in certain assets and a guarantee from materially all operating subsidiaries. The 'RR6' recovery rating for the senior unsecured notes and two notch differential from the IDR reflects that less than 10% recovery is reasonable due to its position in the capital structure. MGM MIRAGE: Weakened Economic Trend Cues Fitch to Trim Ratings -------------------------------------------------------------- Fitch Ratings has downgraded MGM MIRAGE's Issuer Default Rating and outstanding debt ratings as: -- IDR to 'BB-' from 'BB'; -- Senior credit facility to 'BB-' from 'BB'; -- Senior notes to 'BB-' from 'BB'; -- Senior subordinated notes to 'B' from 'B+'. The Rating Outlook remains Negative. The downgrade affects MGM's $7 billion credit facility, $6.9 billion of outstanding senior unsecured debt, and $864 million of outstanding senior subordinated debt as of June 30, 2008. The downgrade reflects the fact that broad economic trends have continued to weaken, along with Las Vegas operating trends. In addition, credit market turbulence has increased since Fitch revised MGM's Rating Outlook to Negative from Stable on Aug. 8. MGM's refinancing risk is substantial, as it is still trying to secure additional CityCenter funding, while also needing to refinance $1.28 billion of debt in the next 12 months. The deteriorating economy continues to affect gaming consumers' visitation levels and spending patterns, particularly in Las Vegas. Las Vegas visitor volume has declined 1.5% YTD through August, while year-to-date Strip revenues have declined 6.7%, and average daily room rates have declined 7.7%. The third quarter trends are notably worse than YTD figures and Fitch believes that Las Vegas operating trends are likely to remain weak in upcoming quarters. MGM reported a 12% comparable property EBITDA decline in second quarter-2008. If comparable property EBITDA continues to decline in the double- digit range in upcoming quarters, Fitch may downgrade MGM further, in the absence of any credit-positive events. On Oct. 6, MGM completed $1.8 billion of its anticipated $3 billion CityCenter financing package. It also received an additional $500 million of commitments that are expected to be added to the facility when it is completed. That leaves a funding shortfall of $700 million, which may need to be covered by the joint venture partners, as securing additional commitments is likely to be extremely challenging in the current credit environment. CityCenter's JV partners, MGM and Dubai World, have already committed to fund an additional $2 billion of costs to complete the project, which is expected to open in December 2009. The JV partners are currently each contributing $100 million per month to the project, but some of the JV partners' contribution may eventually be funded through an expected $2.7 billion of residential sales proceeds. However, the weak housing market, economic uncertainty, and financial market turmoil have impacted CityCenter's residential sales trends substantially. After residential units became available for sale in January 2007, roughly 50% of units were sold as of 3Q'07, representing $1.5 billion of expected sales proceeds. By the end of 2Q'08, the number of units sold increased to only 54% of units, representing about $1.75 billion. Fitch's downgrade and Negative Outlook also incorporates some concern regarding a potential impact from the weak economy and credit environment on MGM's ability to complete signed sale agreements and solicit new buyers, which could result in a meaningful amount of unsold units upon opening. On Oct. 21, Kirk Kerkorian, MGM's 54% majority owner through his Tracinda Corp. investment vehicle, noted that he intends to reduce or sell his stake in Ford Motor Co. and reallocate resources to other industries, including gaming and hospitality. In 2007, prior to MGM's transaction with Dubai World, Kerkorian announced that he intended to explore purchasing certain MGM assets, including the Bellagio and CityCenter properties. Given the CityCenter funding needs and upcoming debt maturities, and if the credit market environment remains weak, Fitch notes that there is potential for credit support from Kerkorian and Dubai World, which owns 9.4% of MGM stock as of August 2008, in addition to 50% of the CityCenter JV. MGM's refinancing risk remains high even following the recent amendment to its credit facility that loosened covenants, which was effective Sept. 30, 2008. Revisions included an increased leverage test to 7.5 times through Dec. 31, 2009 from 6.5x; a tightening of the lien test to 5% of consolidated net tangible assets from 10%; and a more unfavorable interest pricing grid at certain leverage levels. While these revisions give MGM some covenant relief in 2009, the company's interest costs are likely to increase substantially over the next few years as a significant amount of its debt is repriced. MGM has $226 million of 6.5% senior notes due July 31, 2009 and $1.05 billion of 6% senior notes due Oct. 1, 2009. If the 2009 notes were refinanced in the high yield bond market, assuming a range of 14-18%, Fitch estimates MGM's interest costs could increase roughly $100-$150 million. MGM's longer-dated paper currently reflects yields in the 15%-range. In 2010, MGM has $1.1 billion of bond debt maturities (coupons of 8.5% and 9.375%). In 2011, MGM has $532 million of bond maturities (coupons of 8.375% and 6.375%) in addition to the expiration of its $7 billion credit facility, which had $5.25 billion outstanding as of June 30, 2008. How various credit events unfold over the coming months will determine whether MGM is downgraded further or returns to a Stable Rating Outlook, including: -- The resolution of the CityCenter financing shortfall and its impact on MGM's balance sheet; -- The gaming operating environment and trends, particularly in Las Vegas; an additional downgrade could be considered if MGM continues to experience double-digit comparable EBITDA declines in upcoming quarters, in the absence of credit- positive events; -- Capital allocation decisions given free cash flow generation potential, asset sale potential, and debt maturities; -- The credit environment and the associated potential impact on the refinancing of upcoming debt maturities; -- Trends regarding CityCenter's residential sales proceeds including potential cancellations or increases in demand. MICHAEL VICK: Will Plead Guilty, Anticipates Early Prison Release ----------------------------------------------------------------- Michael Vick, who filed for Chapter 11 bankruptcy protection last July with debts of between $10 million and $50 million, will plead guilty to state dogfighting charges in hopes that it will help him secure an early release from federal prison, the Agence France- Presse reports. According to the AFP, attorneys have asked Virginia's Surry Circuit Court for permission for Mr. Vick to plead guilty in a video-teleconference from Leavenworth, Kansas, where he is serving a two-year prison sentence on federal dogfighting charges. The Surry Circuit Court next convenes on November 5. Mr. Vick, a former National Football League star quarterback for the Atlanta Falcons, is scheduled to be released July 20. He could enter a halfway house program in January to prepare his way for a return to society. Michael Vick filed for Chapter 11 protection on July 7, 2008 (Bankr. E.D. Va. Case No. 08-50775). Dennis T. Lewandowski, Esq., and Paul K. Campsen, Esq., at Kaufman & Canoles, P.C., represent Mr. Vick in his bankruptcy case. Mr. Vick listed assets of $16.1 million and debts of $20.4 million in his bankruptcy filing. MIDNIGHT PROPERTIES: To Auction 880-Acre Bon Secour Lot Nov. 19. ---------------------------------------------------------------- Amy Wolff Sorter at Globest.com reports that Midnight Properties LLC and its affiliates will auction on Nov. 19 an 880-acre site where $500 million Bon Secour Village would have been built. According to Globest, the auction will be held at 10 a.m. central time at Bon Secour Village's welcome center at 300 Waterway West Boulevard. Globest.com quoted Walter Driggers at Tranzon Driggers, who is marketing the property and who will oversee the auction, as saying, "A welcome center has been built and the marina has vertical pilings -- just no walks on it." Citing Mr. Driggers, Globest.com states that 5% of the bid is required to participate and "if there are competing bids, we'll have a best-and-final auction at 11 a.m." The report did not divulge the amount of the minimum bid, if there was any. An article in the Mobile Press-Register relates that the Hon. Kristi K. DuBose of the U.S. Bankruptcy Court for the Northern District of Alabama ruled that the land must be sold so that developer Bon Secour Village LLC could pay $20 million that it owes to Wachovia Bank, one of the banks that financed the project. The land has been divided into five parcels, the smallest measuring fives acres and the largest taking up more than 500 acres, Globest.com says, citing Mr. Driggers. According to the report, Mr. Driggers said that the land is being marketed this way to offer a variety of options to buyers. The report quoted Mr. Driggers as saying, "If someone has an original development plan for the entire parcel, he can buy it all. If someone just wants to develop the marina or high-density residential around the golf course near CR-4, they can do that. We're dividing it if different buyers have different concepts." Cullman, Alabama-based Midnight Properties LLC and its affiliates -- http://www.midnightproperties.com/-- are property investment companies that specialize in beach front condominiums and homes located throughout the Alabama Gulf Coast and Florida panhandle. The company and three affiliates, Joseph H. Canaday, Jr. aka Josh Canaday, Edward A. Canaday, and Michael M. Knight, filed for Chapter 11 protection on April 15, 2008 (Bankr. N.D. Ala. Case Nos. 08-81143 through 08-81146). Judge Jack Caddell presides in the case. Garland C. Hall, III, Esq., at Chenault, Hammond & Hall represents the Debtors in their restructuring efforts. When the Debtors filed for bankruptcy, they listed assets and debts of between $10 million and $50 million. MRS FIELDS: Emerges from Chapter 11 with New Owners --------------------------------------------------- Mrs. Fields' Original Cookies, Inc., said Oct. 24 that it has emerged from Chapter 11 bankruptcy with an improved balance sheet, a good working capital position, and new ownership. "The prepackaged bankruptcy filing was the perfect means to complete the Company’s reorganization," commented Michael Ward, Interim Co-Chief Executive Officer. "Within 60 days of filing the Chapter 11 petition, we were able to significantly de-lever the Company's balance sheet, establish a credit facility to support our working capital needs, and emerge from bankruptcy fully capable of meeting and exceeding customer expectations." Through the bankruptcy process, Mrs. Fields was effectively able to address both long and short-term financial challenges and create a solid foundation for the future success of its brands. The Company is now poised to generate profitable growth for its franchising, gifting, branded retail, and licensing businesses. In 2009, the Company expects to open more than 40 new franchised stores, grow its gifting and branded retail businesses by more than 15%, and grow its licensing business by approximately 30%. About Mrs. Fields' Mrs. Fields' Original Cookies, Inc., is a well established franchisor in the premium snack food industry, featuring Mrs. Fields(R) and TCBY(R) as its core brands. Through its franchisees' retail stores, it is one of the largest retailers of freshly baked, on-premises specialty cookies and brownies in the United States of America and the largest retailer of soft-serve frozen yogurt with live active cultures in the United States. In addition, it operates a gifts and a branded retail business and has entered into licensing arrangements that attempt to leverage awareness of its core brands among its retail customer base. Its franchise systems operate through a network of more than 1,200 franchised and licensed locations throughout the United States and in 22 foreign countries. NATIONAL CITY: To be Acquired by PNC for $5.2 Billion ----------------------------------------------------- The PNC Financial Services Group, Inc., and National City Corporation on Friday signed a definitive agreement for PNC to acquire National City for $2.23 per share, or an aggregate fixed amount of approximately $5.2 billion in PNC stock. Additionally $384 million of cash is payable to certain warrant holders. Total consideration approximates National City's market capitalization as of the close of business on October 23, 2008. National City shareholders will be entitled to 0.0392 share of PNC common stock for each share of National City. PNC plans to issue to the U.S. Treasury $7.7 billion of preferred stock and related warrants under the TARP Capital Purchase Program subject to standard closing requirements. The U.S. Treasury Department approval of PNC's participation enables PNC to further strengthen its capital position, resulting in an estimated pro forma Tier 1 capital ratio for the combined company of approximately 10 percent. Bankruptcy Law360 says PNC became the first bank to use a capital injection from the U.S. Treasury Department to bolster an acquisition. "The acquisition of National City will increase our core deposit base to $180 billion, making PNC the fifth largest U.S. bank by deposits. At a time when core funding is key, we see our deposit strength as an important success factor. Upon closing the transaction, we will implement our successful business model and execute our strategies for managing risk, achieving cost efficiencies and growing high-quality revenue streams," said James E. Rohr, chairman and chief executive officer of PNC. "We believe this strategic combination will continue PNC's efforts to build capital strength and shareholder value. We are also gratified that we have been selected to participate in Treasury's Capital Purchase Program, which has helped to put this transaction on a very solid footing." The transaction has an estimated internal rate of return to PNC of more than 15 percent and is expected to be accretive to PNC's earnings in the second year. PNC's fair value adjustments and provisions for future losses of National City's current loan portfolio will bring the cumulative impairment of these loans to approximately 17.5 percent. PNC will continue to liquidate non- core and impaired loans. "The combined company will have greater scale and scope, enhancing service to our customers and communities and providing greater opportunities for our employees. This transaction is about two companies that fit well together in terms of geography, products and services," said Peter E. Raskind, chairman, president and chief executive officer of National City. Upon closing the transaction, Raskind will be appointed a PNC vice chairman, and one National City director will join the board of the combined company. In addition to ranking fifth nationally in deposits, the combination with National City is expected to place PNC fourth among U.S. banks in number of branches. It will give PNC the No. 1 deposit share position in Pennsylvania, Ohio and Kentucky and will rank the company No. 2 in Indiana and Maryland. PNC expects to incur merger and integration costs of approximately $2.3 billion. The transaction is expected to result in the reduction of approximately $1.2 billion of noninterest expense through the elimination of operational and administrative redundancies. Under terms of the agreement, PNC will acquire all outstanding shares of common stock of National City in a stock- for-stock transaction, which has been approved by the Boards of Directors of both companies. In connection with the transaction, National City has issued to PNC an option to acquire 19.9 percent of National City's common stock that becomes exercisable under certain specified circumstances. Corsair Capital LLC, which owns approximately 7.8 percent of outstanding National City common shares, has agreed to vote all National City common shares it owns in favor of the deal and otherwise support the transaction. After closing, PNC intends to merge National City's banking affiliates into PNC Bank and they will assume the PNC Bank name. The merged entity will have its headquarters in Pittsburgh. Based on PNC's closing NYSE stock price of $56.88 on October 23, 2008, the transaction values each share of National City's common stock at $2.23. The aggregate consideration is composed of a fixed number of approximately 92 million shares of PNC common stock. Additionally $384 million of cash is payable to certain warrant holders. The transaction is currently anticipated to close by Dec. 31, 2008. The merger is subject to customary closing conditions, including both PNC and National City shareholders and regulatory approvals. Citigroup Global Markets Inc., JPMorgan Securities, Inc. and Sandler O'Neill + Partners, L.P. acted as financial advisers to PNC, and Wachtell, Lipton, Rosen & Katz acted as its legal adviser. Goldman Sachs acted as financial adviser to National City and Sullivan & Cromwell LLP acted as its legal adviser, and Cravath, Swaine & Moore LLP acted as legal adviser to the Board of Directors of National City. 2-Year Slide BusinessWeek's M.R. Kropko says National City was on a two-year slide prior to the deal. Mr. Kropko notes that on Oct. 17, 2006, National City reported net income of $551 million for the 2006 third quarter. David A. Daberko, National City's then chairman and CEO, according to Mr. Kropko, said corporate and retail banking businesses were strong, while the mortgage-related business was "performing well in a cyclically tough mortgage environment." But early signs of trouble were indicted in its provision for credit losses, posted at $73 million, up from $60 million in the preceding quarter, according to Mr. Kropko. The report says National City had tied its future largely to mortgages. On Nov. 9, 2006, National City revised its third-quarter 2006 earnings from 90 cents per share to 86 cents per share, in part to reflect a higher estimate of reserves for repurchased mortgage loans and a lower value of mortgage servicing rights, Mr. Kropko says. According to Mr. Kropko, in April National City secured a $7 billion capital infusion from equity investors. National City as recently as this week said its capital base was strong enough to allow it to function normally, Mr. Kropko adds. Last week, Mr. Kropko says, National City posted a loss of $729 million, or 85 cents per share, and unveiled plans to cut 4,000 jobs, or about 14% of its total work force, to reduce costs. Mr. Rohr and Chief Financial Officer Richard J. Johnson held a conference call for investors at 10:00 a.m. Eastern Time Friday regarding the announcement of the acquisition. A taped replay of the call will be available for one week at 800-642-1687 and 706- 645-9291 (international), conference ID 70844287. About PNC The PNC Financial Services Group, Inc. (NYSE: PNC) -- http://www.pnc.com/-- is one of the nation's largest diversified financial services organizations providing retail and business banking; specialized services for corporations and government, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services. About National City National City Corporation (NYSE: NCC) -- http://www.nationalcity.com/-- headquartered in Cleveland, Ohio, is one of the nation's largest financial holding companies. The company operates through an extensive banking network primarily in Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri, Pennsylvania, and Wisconsin and also serves customers in selected markets nationally. Its core businesses include commercial and retail banking, mortgage financing and servicing, consumer finance and asset management. NORTHLAKE FOODS: Closes 2 Waffle House Restaurants -------------------------------------------------- Northlake Foods Inc., the largest national franchisee of the Waffle House restaurant chain, has closed two of its 10 Waffle House restaurants in the Jacksonville area due to Chapter 11 bankruptcy, Kevin Turner of The Florida Times-Union reported Wednesday. An administrative assistant for Tampa-based Northlake said its president, Daryl Saylor, refused Tuesday to comment about the closing of the restaurants, at 2395 Mayport Road and 8243 Western Way near Baymeadows Road. Northlake, which has about 145 Waffle House restaurants in Georgia, Florida and Virginia, filed for Chapter 11 bankruptcy protection Sept. 15, a month after fellow Waffle House franchiser Nashville, Tenn.-based SouthEast Waffles LLC, which has 113, did the same, according to the Nation's Restaurant News Web site. Tampa, Florida-based Northlake Foods, Inc., operates a restaurant chain. It filed for Chapter 11 protection on Sept. 15, 2008 (Bankr. M. D. Fla. Case No. 08-14131). Roberta A. Colton, Esq., at Trenam Kemker assists the Debtor in its restructuring efforts. The Debtor listed assets of $10 million to $50 million and debts of $10 million to $50 million when it filed for bankruptcy. NORTHLAKE FOODS: Wants to Employ Ford Harrison as Special Counsel ----------------------------------------------------------------- Northlake Foods Inc. asks the U.S. Bankruptcy Court for the Middle District of Florida for authority to employ Ford & Harrison, LLP as special counsel, nunc pro tune to Sept. 15, 2008. The Debtor selected Ford & Harrison due to its familiarity with the Debtor's business and its knowledge and experience in areas of labor and employment, and corporate law. The employment motion did provide details as to the specific scope of Ford & Harrison's engagement. As compensation for their services, the firm's professionals will bill the Debtor at these rates: Professional Title Hourly Rate ------------ ----- ----------- Thomas C. Garwood, Jr., Esq. Partner $405 John L. Monroe, Esq. Partner $375 Lori R. Benton, Esq. Partner $335 Travis Foust, Esq. Associate $260 Chelsie J. Roberts, Esq. Associate $255 Kathryn A. Terry, Esq. Associate $235 Sandra A. Ward Paralegal $175 Subject to approval of the Court, the Debtor will continue to employ Ford & Harrison and Thomas C. Garwood, Jr., Esq. as outside general counsel and as partner-in-charge for the continued defense of the Debtor in pending litigation as necessary as well as active labor and employment matters. Thomas C. Garwood, Jr., Esq., a partner at Ford & Harrison LLP, assures the Court that the firm does not represent or hold any interest adverse to the Debtor or its estate. Mr. Garwood also told the Court that as of the petition date, the firm was owed $12,2715 by the Debtor for legal services provided prior to the bankruptcy filing. Tampa, Florida-based Northlake Foods, Inc., operates a restaurant chain. The company filed for Chapter 11 relief on Sept. 15, 2008 (Bankr. M. D. Fla. Case No. 08-14131). Roberta A. Colton, Esq., at Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Millis, P.A., represents the Debtor as counsel. When the company filed for protection from its creditors, it listed assets of $10 million to $50 million, and debts of $10 million to $50 million. NORTHWEST AIRLINES: Posts $317MM Net Loss 3Q ended September 30 --------------------------------------------------------------- Northwest Airlines Corporation reported a net loss of $317 million for third quarter ended Sept. 30, 2008. The reported results include a $410 million non-cash charge associated with marking-to- market out-of-period fuel hedges as required by Statement of Financial Accounting Standard 133, Accounting for Derivative Instruments and Hedging Activities. Excluding this charge, Northwest reported an adjusted net income of $93 million for the quarter. These results compare to the third quarter of 2007 when Northwest reported an adjusted net income of $232 million, excluding charges related to SFAS 133. Northwest's operating revenues for the third quarter rose to $3.8 billion, up 12.4% from last year. Consolidated passenger revenue increased by 11.3% versus the third quarter of 2007 to $3.3 billion on 2.9% more available seat miles. Consolidated passenger revenue per available seat mile increased by 8.1%. Mainline passenger revenue increased by 6.0% versus the third quarter 2007 to $2.7 billion on 1.3% fewer mainline ASMs, resulting in a 7.4% improvement in PRASM and a 0.4%age point decrease in load factor. Domestic mainline PRASM was particularly strong during the quarter increasing by 10.7% versus 2007. The strong growth is the result of recent capacity reductions and fare actions in the industry. Northwest ended the quarter with $3.4 billion in unrestricted liquidity, including $261 million in a funded tax trust that was established in 2002. In addition, Northwest ended the quarter with $185 million in restricted cash. During the quarter, Northwest enhanced its liquidity position by completing a $183 million financing of unencumbered aircraft and engines and successfully amended its existing bank credit facility by making various changes to the agreement that will allow it to remain in place after the merger with Delta is closed. About Northwest Airlines 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. On April 14, 2008, Northwest reached a deal with Delta Air Lines Inc., in which the two carriers will combine in an all-stock transaction with a combined enterprise value of US$17,700,000,000. Delta agreed to buy Northwest in a US$3.63 billion stock deal that would create the world's largest carrier. The companies expect to incur integration charges of $1 billion. (Northwest Airlines Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). OSWALD RANCHES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Oswald Ranches, LLC 1600 Mosier Creek Road P.O. B 185 Mosier, OR 97040 Bankruptcy Case No.: 08-35722 Type of Business: The Debtor operates six cherry orchards in Oregon. See: http://www.oswaldranches.com Chapter 11 Petition Date: October 23, 2008 Court: District of Oregon Judge: Elizabeth L. Perris Debtor's Counsel: Albert N. Kennedy, Esq. al.kennedy@tonkon.com Tonkon Torp LLP 888 SW 5th Ave., #1600 Portland, OR 97204 Tel: (503) 802-2013 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/orb08-35722.pdf PAPER INT'L: Seeks 30-Day Extension for Filing of Schedules ----------------------------------------------------------- Paper International, Inc., and its affiliate, Fiber Management of Texas, Inc., ask the U.S. Bankruptcy Court for the Southern District of New York to extend the deadline to file their schedules of assets and liabilities, schedules of executory contracts and unexpired leases, and statements of financial affairs by 30 days, to November 20. Under Rule 1007(c) of the Federal Rules of Bankruptcy Procedure, the Debtors have 15 days from the filing for the bankruptcy petition to file their schedules and statements. On Oct. 6, 2008, the Debtors filed with the Court a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The Debtors anticipate that they will be unable to complete their schedules and statements within the current deadline due to the volume of material that must be compiled and reviewed in order to complete the documents during the early days of the Chapter 11 cases. The Debtors are holding companies and do not have any employees. AP Services, LLC is assisting the Debtors, and will need to work with and rely on non-debtor employees to obtain historical information. Significant burdens have been imposed on the Debtors' limited management by the commencement of these Chapter 11 cases, and their parent corporation's Chapter 15 case and insolvency proceedings in Mexico, making completion of the schedules and statements difficult. Paper International, a corporation organized under the laws of the State of New Mexico, is a wholly owned direct subsidiary of Durango, Mexico-based Corporacion Durango, S.A.B. de C.V. On Oct. 6, 2008, Corporacion Durango sought protection from the U.S. Court, pursuant to Chapter 15 of the Bankruptcy Code, in connection with its reorganization case in Mexico, which it also filed on the same date, under Mexico's Ley de Concursos Mercantiles, the Mexican Business Reorganization Act, in the District Court for Civil Matters for the District of Durango. Paper International is a holding company that owns 100% of the equity shares in Debtor FMT -- a corporation organized under the laws of Texas -- and 100% of the equity shares in non-debtor Durango McKinley Paper Company, a New Mexico corporation. Paper International has no employees and no operations, and its primary assets are its ownership interests in McKinley and FMT. Before August 2008, FMT's primary business was the procurement of fiber for use by McKinley and other paper manufacturing affiliates of Corporacion Durango located in Mexico. When either McKinley or one of the Mexican affiliates required fiber for their manufacturing facilities, FMT purchased fiber from third parties and then sorted and stored these materials at several depots in New Mexico, Texas, and Arizona, each of which were either owned or leased by McKinley or FMT. FMT then shipped the materials to McKinley's Prewitt, New Mexico facility or to the U.S.-Mexican border where the Mexican Affiliates accepted the fiber. In exchange for the procurement of these materials, McKinley and the Mexican affiliates paid FMT for the cost of purchasing and shipping the fiber, plus $3.00 per ton of materials delivered. To operate its fiber procurement operations, FMT did not engage or employ any of its own employees. Instead, McKinley designated employees to run FMT's operations at the Depots and coordinate and administer its fiber procurement business out of FMT's Arlington, Texas headquarters. FMT would then pay McKinley for the use of McKinley's employees via an intercompany allocation of those costs. In August 2008, FMT ceased procuring fiber and began winding up all of its business operations. In 2004, Corporacion Durango initiated reorganization proceedings under the Mexican Business Reorganization Act and a corresponding proceeding in the U.S. under section 304 of the Bankruptcy Code. As a result of transactions related to the 2004 Proceedings, each of the Debtors became guarantors of senior notes issued by Corporacion Durango pursuant to an indenture dated as of Oct. 5, 2007. The Law Debentures Trust Company of New York is the trustee under the Indenture. The rising cost of energy, the downturn in the U.S. economy, increased foreign competition in the paper industry, and the devaluation of the Mexican Peso, made it difficult for Corporacion Durango to transfer its rising costs to its customers. As a result, Corporacion Durango is facing a liquidity crisis that has led to its failure to make its scheduled interest payment of $26.5 million on the senior notes, which was due on Oct. 6, 2008. Corporacion Durango believed it was in the best interests of the company and its creditors to seek relief under the Mexican Business Reorganization Act in order to preserve its value as a going concern and maximize the value of its assets for the benefit of all creditors. Due to the obligations arising out of the Senior Notes Guarantees, it was similarly in the best interests of the Debtors, their creditors and equity holders to file the Chapter 11 cases. About Paper International Headquartered in Prewitt, New Mexico, Paper International, Inc. -- http://www.internationalpaper.com-- manufactures paper and packaging products with operations in North America, Europe, Latin America, Russia and North Africa. The Debtors have more than 50,000 employees in in 20 countries. The company and Fiber Management of Texas, Inc. filed for Chapter 11 protection on Oct. 6, 2008 (Bankr. S.D. N.Y. Lead Case No.08-13917). Larren M. Nashelsky, Esq., at Morrison & Foerster LLP, represents the Debtors. The Debtor selected Meade Monger as their chief restructuring officer. The Debtors also selected AP Services, LLC as their restructuring advisor. Corporacion Durango, S.A.B. de C.V. of Durango, Mexico, owns 100% of the Debtors' interests as of October 6, 2008. Corporacion Durango filed a voluntary Chapter 15 petition in the United States Bankruptcy Court for the District of New York, Case No. 08-13911. Paper International listed assets between US$100 million and US$500 million, and debts between US$500 million to US$1 billion, while Fiber Management listed assets between US$1 million to US$10 million and debts between US$500 million and US$1 billion. PAUL SCHAEFER: Case Summary & List of Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Paul Schaefer, Jr. P.O. Box 559 Brookline, NH 03033 Bankruptcy Case No.: 08-13065 Chapter 11 Petition Date: October 23, 2008 Court: District of New Hampshire (Manchester) Judge: J. Michael Deasy Debtor's Counsel: William S. Gannon, Esq. bgannon@gannonlawfirm.com William S. Gannon PLLC 889 Elm Street, 4th Floor Manchester, NH 03101 Tel: (603) 621-0833 Fax: (603) 621-0830 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/nhb08-13065.pdf PETTERS CO: Court to Consolidate 10 Bankruptcy Petitions -------------------------------------------------------- Jennifer Bjorhus and David Phelps at StarTribune.com report that the Hon. Gregory Kishel of the U.S. Bankruptcy Court for the District of Minnesota decided to consolidate 10 bankruptcy petitions from Petters Company, Inc. and its affiliated companies under a single case number. StarTribune.com relates that financing entity Petters Company Inc., and holding company Petters Group Worldwide were the first to file for Chapter 11 protection. According to the report, the latest to file is Palm Beach Finance Holdings Inc., which didn't list any assets but listed liabilities of $1.1 billion to Florida hedge fund Palm Beach Finance Partners LP. Petters' Sun Country Airlines, says StarTribune.com, filed for bankruptcy, along with several related entities this month. The report states that Sun Country isn't in receivership and airline bankruptcies will proceed separately from the others. StarTribune.com reports that James Lodoen, Esq., at Lindquist & Vennum, who represents Petters, presented before the Court an organization chart, attempting to clarify Petters Company's portfolio of 150 entities from Minnetonka to Malaysia. StarTribune relates that Mr. Lodoen said he expects more bankruptcy filings as attorneys sort through the collection. According to StarTribune.com, Judge Kishel granted Petters Company's legal team an extension of 60 days to file required documents. The companies could continue to pay current and terminated workers the salaries and benefits they were owed before the Chapter filings, the report says, citing Judge Kishel, who added that Petters Group's bank account of slightly more than $100,000 isn't quite enough to make payroll on Friday. Court-appointed receiver Doug Kelley has been shutting down offices, liquidating assets, trying to collect on the various receivables, interviewing forensic accounting law firms, and trying to unfreeze company bank accounts so that he can access the money as necessary, StarTribune.com relates, citing Mr. Lodoen. About Petters Group Worldwide Based in Minnetonka, Minn., Petters Group Worldwide LLC is named for founder and chairman Tom Petters. The group is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Petters formed the company in 1988. Petters Company, Inc. is the financing and capital-raising unit of Petters Group Worldwide, LLC. Petters Company, Inc. and Petters Group Worldwide, LLC, filed separate petitions for Chapter 11 relief on Oct. 11, 2008 (Bankr. D. Minn. Case No. 08-45257 and 08-45258, respectively). James A. Lodoen, Esq., at Lindquist & Vennum P.L.L.P., represents the Debtors as counsel. In its petition, Petters Company, Inc. listed debts of between $500 million and $1 billion, while its parent, Petters Group Worldwide, LLC listed debts of not more than $50,000. As reported in the Troubled Company Reporter on Oct. 7, 2008, Petters Aviation, LLC,, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of Minnesota on Oct. 6, 2008 (Lead Case No. 08-45136). Petters Aviation, LLC is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Inc., Sun Country's parent company. PHYSICIANS MEDICAL: Shinsegai Wants to Buy Alabama Hospital ----------------------------------------------------------- Shinsegae USA Vice President Greg Paik says the company wants to buy Physicians Medical Center along Carraway Blvd., Birmingham, Alabama, ABC News 33/40 News said Wednesday. Seoul, Korea-based Shinnsegae USA, part of the Shinsegae Emigration Service of Seoul, is the same company that said it would inject $15 million in equity this past summer, but later backed out. As reported in the Troubled Company Reporter on Oct. 21, 2008, Physicians Medical Center, LLC, filed for bankruptcy due to operating losses and inability to raise capital. The company plans to close its business. Based in Birmingham, Alabama, Physicians Medical Center, LLC, formerly Carraway Methodist Medical Center, owns and operates a 617-bed acute care hospital which also serves as a training site for residents in the University of Alabama School of Medicine's anesthesiology program. The company filed for Chapter 11 relief on Oct. 20, 2008 (Bankr. N.D. Ala. Case No. 08-0520). Christopher L. Hawkins, Esq., and M. Leesa Booth, Esq., at Bradley Arant Rose & White represent the Debtor in its restructuring efforts. The Debtor listed assets of between $10 million and $50 million, and debts of between $10 million and $50 million. The Debtors' 20 largest unsecured creditors are owed a total of $4.3 million. The three biggest unsecured creditors are McKesson Information Solutions, owed $649,397; Cardinal Health, owed $536,609; and Balch & Bingham LLP, owed $426,384. The Debtor has about $8 million in secured debt. RCS-CHANDLER: Court Orders Auction of Unfinished High-Rise Project ------------------------------------------------------------------ Elevation Chandler, RCS Chandler's unfinished high-rise development near the convergence of the Loop 202 San Tan Freeway and Loop 101, in Phoenix, will be auctioned off as part of a bankruptcy proceeding, Jan Bucholz of the Phoenix Business Journal reported Wednesday. The date of the auction has not yet been announced. Elevation Chandler's owner, Jeff Cline, has sought permission from the Court to tap Marcus & Millichap Real Estate Investment Services to provide information on the property and coordinate registration of prospective buyers. The property was scheduled for auction earlier this year, but the auction was postponed when the company filed for Chapter 11 bankruptcy in April. David Woodfill of the East Valley Tribune (Phoenix) reported Thursday that Marcus and Millichap's senior vice president, Richard Holway, said he expects the winning bid to be substantially less than the $66 million the developer owes to borrowers. "For me to put a price on it would be a guess," he said. "Each different buyer-developer that looks at the site is going to have a different use for it, and they're going to assess it differently, and they're going to put a different value on it." Mr. Holway anticipates that the total construction cost to complete the project would range between $250 million and $350 million. About RCS-Chandler Headquartered in Phoenix, Arizona, RCS-Chandler LLC, owned by Jeff Cline, constructs and develops hotels. The company filed for Chapter 11 protection on April 11, 2008 (Bankr. D. Ariz. Case No. 08-04021). The Debtor filed for bankrutpcy one business day before the property was to be sold at public auction. Michael R. Walker, Esq., at Schian Walker P.L.C. represents the Debtor in its restructuring efforts. When the Debtor filed for protection against its creditors, it listed assets and debts between $50 million and $100 million. The Deal reported that the Debtor had $40 million in assets and $61.6 million in debts. Construction at Elevation Chandler stopped in April 2006, leaving a partially built shell on prime real estate south of the mall at the Santan Freeway and Loop 101, Arizona Republic says. Prior to the bankruptcy filing, owner Jeffrey Cline had been marketing RCS-Chandler, The Deal quotes McClatchy-Tribune Regional News as reporting. Efforts to sell the property in the past did not succeed, relates Arizona Republic, citing Chandler officials, in part because Mr. Cline still wanted to be involved with the property. RICHARD JAMES: Blames Bankruptcy on Criminal Acts v. Restaurant --------------------------------------------------------------- Geoff Johnson at Redbluffdailynews.com reports that Richard James Lipari blamed his bankruptcy on a series of criminal activities against his restaurant. County and state documents indicate that Mr. Lipari sold his restaurant in August 2008. Redbluffdailynews.com states that as of Oct. 7, 2008, Mr. Lipari was still operating the restaurant. Redbluffdailynews.com relates that Mr. Lipari suggested that the least of the challenges are illegally parked taco trucks. Mr. Lipari said that he also had 37 break-ins to his house and business, Redbluffdailynews.com relates. According to the report, Mr. Lipari complained that the police still hasn't completed the investigation. Mr. Lipari, says Redbluffdailynews.com, claimed that he is the victim of three identity thefts, three embezzlements, and has had three ATM cards stolen. He complained that a neighboring liquor store tells customers that his business is closed, the report states. About Richard James Lipari Richard James Lipari is a mayoral candidate for the city of Corning, Tehama County California. Mr. Lipari filed for Chapter 11 protecion on Aug. 20, 2008 (Bankr. E.D. Ca. Case No. 08-31637), 12 days after signing his Statement of Economic Interests for the Fair Political Practices Commission. According to records from the Tehama County Clerk Recorder, Mr. Lipari received a Notice of Default on his mortgage payments on April 15, 2008. He had $13,376 debts at that time. Mr. Lipari sold his 3070 Highway 99W property, the location of his Grandma Rose's restaurant, through The Foreclosure Company, on the same day he filed for bankruptcy. SALOMON BROTHERS: Fitch Cuts $7.3MM Class L Certs. to 'C/DR5' ------------------------------------------------------------- Fitch Ratings downgraded and lowered the Distressed Recovery rating in Salomon Brothers Mortgage Securities VII, Inc.'s commercial mortgage pass-through certificates, series 1999-C1 as: -- $16.5 million class K to 'B-/DR1' from 'B'; -- $7.3 million class L to 'C/DR5' from 'CCC/DR2'. In addition, Fitch affirmed and assigns Rating Outlooks to these classes: -- $10.2 million class A-2 at 'AAA'; Outlook Stable; -- Interest-only class X at 'AAA'; Outlook Stable; -- $38.6 million class B at 'AAA'; Outlook Stable; -- $38.6 million class C at 'AAA'; Outlook Stable; -- $11 million class D at 'AAA'; Outlook Stable; -- $27.6 million class E at 'AAA'; Outlook Stable; -- $11 million class F at 'AAA'; Outlook Stable; -- $14.7 million class G at 'AAA'; Outlook Stable; -- $20.2 million class H at 'A'; Outlook Stable; -- $9.2 million class J at 'BBB-'; Outlook Negative. Fitch does not rate the $3.2 million class M certificates. Class A-1 has paid in full. The downgrades to classes K and L are due to anticipated losses on the four specially serviced assets (4.4%) which are expected to deplete the non-rated class M, and impact class L. Although the transaction has paid down 27.4% since the last rating action, there is upcoming maturity risk with 42.4% of the pool, 29% non-defeased, maturing or having an anticipated repayment date in 2008 or 2009. As of the September 2008 distribution date, the pool's collateral balance has been reduced 71.6% to $208.7 million from $734.9 million at issuance. In addition, 28 loans (15.8%) have defeased, including two of the top ten loans (8.3%). The Rating Outlooks reflect the likely direction of any rating changes over the next 12-24 months. The largest specially serviced asset (2.0%) is secured by two mobile home parks located in Wilkes Barre and Muncey, Pennsylvania with a reported combined occupancy of 76%. The assets became real estate-owned in September 2008. Recent values indicate losses upon liquidation. The second largest specially serviced loan (1.6%) is secured by a retail property in Grenada, Mississippi. The asset transferred to the special servicer in September 2008 due to maturity default. The borrower is currently attempting to refinance the loan. Twenty-one (20.3%) of the remaining 92 loans in the transaction have a maturity date in either 2008 or 2009. These include one defeased loan (5.5%). Additionally, 13 (22.1%) loans, 7 (14.4%) non-defeased loans, have an anticipated repayment date in either 2008 or 2009. The 27 non-defeased loans with an upcoming maturity or ARD have a year-end 2007 weighted average debt service coverage ratio of 1.90x and a weighted-average coupon of 7.33%. SECURITY BENEFIT: Fitch Trims IFS Rating to 'BB' from 'BBB-' ------------------------------------------------------------ Fitch Ratings has downgraded the Insurer Financial Strength ratings of Security Benefit Life Insurance Company and its affiliate, First Security Benefit Life Insurance and Annuity Company of New York, collectively referred to as Security Benefit, to 'BB' from 'BBB-'. Fitch has also SBLIC's short-term IFS to 'B' from 'F3'. Additionally, Fitch has removed the ratings from Rating Watch Negative. The Rating Outlook is Negative. The rating action reflects Fitch's heightened concerns regarding deterioration in SBLIC's risk-adjusted capital and liquidity position, which has been adversely affected by poor capital market conditions. Over the past year, SBLIC's risk-adjusted capital position has been negatively impacted by funding associated with the company's acquisition of an asset management company, Rydex Investments, and investment losses, which Fitch expects to continue into 2009. Fitch considers SBLIC's risk-adjusted capital position to be weak. Fitch continues to be concerned about SBLIC's investment exposure to asset-backed securities backed by subprime mortgages. Fitch expects SBLIC to report additional investment losses from these securities, driven by poorly performing collateral. Fitch originally downgraded SBLIC's IFS rating from 'A+' to 'A' in January 2008, upon the close of its acquisition of Rydex Investments. While the combination of Security Benefit and Rydex made sense from a strategic perspective, particularly in light of Security Benefit's focus on the variable annuity and asset management businesses, Fitch expressed concerns regarding financing of the transaction and the related adverse effect on Security Benefit's balance sheet fundamentals, the historical strength of which had provided substantial support for the company's ratings. In June 2008, Fitch downgraded SBLIC's IFS rating from 'A' to 'BBB-', reflecting concerns around the adverse affect on risk- adjusted capitalization caused by the company's method of funding follow up payments related to its acquisition of Rydex, as well as continued unrealized losses in the company's portfolio of structured securities backed by subprime collateral. Fitch's ratings on Security Benefit have historically been heavily supported by its strong capital position, the foundation of which was a diversified, highly liquid investment portfolio. In funding its acquisition of Rydex, Fitch believes that a large portion of these liquid investments were replaced by a highly illiquid investment in an asset management firm, with the company's remaining investment portfolio heavily exposed to worsening conditions in the market for structured securities backed by subprime collateral. Fitch believes that continued recent deterioration in capital market conditions have further weakened SBLIC's risk-adjusted capitalization and liquidity. Positively, SBLIC has no near-term refinance risk associated with its outstanding debt, which consists of $150 million of surplus notes. The Negative Outlook status of the ratings reflects Fitch's concerns regarding near-term operating performance and business persistency, as well as the potential for further deterioration in the company's exposure to subprime mortgages through its investments in securities backed by such assets. Topeka, Kansas-based Security Benefit Corporation is a financial services organization marketing fixed and variable annuities, mutual funds, various retirement programs and administrative services. The primary operating company, SBLIC, reported statutory admitted assets of $11.6 billion and capital and surplus of $520.9 million at June 30, 2008. Fitch has downgraded these ratings and removed them from Rating Watch Negative: Security Benefit Life Insurance Company -- IFS to 'BB' from 'BBB-'; -- Short-term IFS to 'B' from 'F3'. First Security Benefit Life Insurance and Annuity Company of New York -- IFS to 'BB' from 'BBB-'. The Rating Outlook is Negative. SEMGROUP LP: Hiland Partners' Exposure Down to $300,000 ------------------------------------------------------- Hiland Holdings GP, LP and Hiland Partners, LP updated the status of the Partnership's credit exposure to certain affiliates of SemGroup, L.P. that purchase natural gas liquids and condensate from the Partnership, primarily at its Bakken and Badlands plants and gathering systems. On July 22, 2008, SemGroup, L.P. and certain subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. On Aug. 7, 2008, the Partnership disclosed the establishment of an allowance for doubtful accounts and bad debt expense of $8.1 million related to product sales to SemGroup during June 2008. The Partnership also reported additional potential exposure estimates of approximately $5.0 million with SemGroup for uninvoiced product sales from July 1 through July 18, 2008. On Oct. 20, 2008, the United States Bankruptcy Court for the District of Delaware entered an order approving the assumption of a Natural Gas Liquids Marketing Agreement between the Partnership and SemStream, L.P., an affiliate of SemGroup, L.P., relating to the sale of natural gas liquids and condensate at the Partnership's Bakken and Badlands plants and gathering systems. As a result of the assumption, and in accordance with the order, on Oct. 21, 2008, SemStream paid $12.1 million to the Partnership, representing amounts owed to the Partnership from SemStream for June and July 2008 product sales under the Agreement. The assumption of the Agreement restores the Partnership and SemStream, L.P. to their pre-bankruptcy contractual relationship. The Partnership's third quarter results of operations will reflect a reversal of $7.9 million of the $8.1 million allowance for doubtful accounts and bad debt expense previously recorded on the Partnership's income statement in the second quarter of 2008. After receipt of the October 21 payment, the Partnership's total pre-petition credit exposure to SemGroup, related to condensate sales to SemCrude, LLC, and outside of the Agreement, is approximately $0.3 million. About the Hiland Companies Hiland Partners, LP is a publicly traded midstream energy partnership engaged in purchasing, gathering, compressing, dehydrating, treating, processing and marketing natural gas, and fractionating, or separating, and marketing of natural gas liquids, or NGLs. The Partnership also provides air compression and water injection services for use in oil and gas secondary recovery operations. The Partnership's operations are located in the Mid-Continent and Rocky Mountain regions of the United States. Hiland Partners, LP's midstream assets consist of fourteen natural gas gathering systems with approximately 2,079 miles of gathering pipelines, five natural gas processing plants, seven natural gas treating facilities and three NGL fractionation facilities. About SemGroup SemGroup L.P. -- http://www.semgrouplp.com/-- is a midstream service company providing the energy industry means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminaling and storing energy. SemGroup serves customers in the United States, Canada, Mexico, Wales, Switzerland and Vietnam. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection on July 22, 2008 (Bankr. D. Del. Lead Case No. 08-11525). These represent the Debtors' restructuring efforts: John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq. at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq. and Sherri L. Toub, Esq. at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq. and Sylvia A. Mayer, Esq. at Weil Gotshal & Manges LLP. Kurtzman Carson Consultants L.L.C. is the Debtors' claims agent. The Debtors' financial advisors are The Blackstone Group L.P. and A.P. Services LLC. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represent the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. The CCAA stay expires on Nov. 21, 2008. SemGroup L.P.'s consolidated, unaudited financial conditions as of June 30, 2007, showed $5,429,038,000 in total assets and $5,033,214,000 in total debts. In their petition, they showed more than $1,000,000,000 in estimated total assets and more than $1,000,000,000 in total debts. (SemGoup Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). SHOE PAVILION: To Close 64 Remaining Stores After Liquidation Sale ------------------------------------------------------------------ Shoe Pavilion Inc. said it will close its 64 remaining stores after a liquidation sale, the Phoenix Business Journal reported Tuesday. The Sherman Oaks, Calif.-based discount shoe store is the third major retailer after Mervyns LLC of Hayward, Calif., and Linens-N- Things Inc. of Clifton, N.J., to close, according to the report. The three retailers have filed for Chapter 11 protection. U.S. Bankruptcy Judge Maureen Tighe approved the liquidation sale of Shoe Pavilon Friday. The sale, which is expected to run over a 10 to 12 week period, will be conducted by a joint venture group of Great American Group LLC of Los Angeles, SB Capital Group LLC of Great Neck, N.Y., Tiger Capital Group LLC of Boston and Hudson Capital Partners LLC of Fort Lauderdale, Fla. The liquidation is expected to bring in $36.3 million. Shoe Pavilion was in business for 29 years and at one time had 117 stores. The company has stores in California, Arizona, Nevada, New Mexico, Oregon, Texas and Washington. "It is always tough to close down stores, but consumers will benefit from the extreme discounts on every item in the stores until all the merchandise is sold," Danny Kane, managing member of Tiger Capital Group, said in a news release Monday. Based in Sherman Oaks, Calif., Shoe Pavilion Inc. and Shoe Pavilion Corp. operate independent off-price footwear retail stores that offer a broad selection of women's and men's designer lablel and name brand merchandise. The Debtors filed separate petitions for Chapter 11 relief on July 15, 2008 (Bankr. C.D. Lead Case No. 08-14939). Ron Bender, Esq., at Levene, Neale, Bender, Rankin & Brill, represents the Debtors as counsel. When Shoe Pavilion Inc. filed for protection from its creditors, it listed total assets of $60,994,000 and total debts of $27,000,000. SIMPLON BALLPARK: Loses Cosmopolitan Square Project to Foreclosure ------------------------------------------------------------------ Simplon Ballpark LLC lost Cosmopolitan Square, a proposed 39-story hotel/condo tower in the East Village, to foreclosure, after it failed to secure new financing for the project, Mike Freeman of the Union-Tribune (San Diego, Calif.) reported. Senior lender SDG-Left Field purchased the undeveloped downtown block at J Street and Seventh, Eight and Island avenues, in downtown San Diego, at a foreclosure auction on Oct. 16, to satisfy $20.6 million in debt and penalties. According to the report, Simplon Ballpark bought the Cosmopolitan Square site for $25.5 million in 2005, incurring roughly $40 million in debt and later defaulting on loan payments, forcing it to file for Chapter 11 bankruptcy to avoid foreclosure. As reported in the Troubled Company Reporter on Oct. 8, 2008, the U.S. Bankruptcy Court for the Southern District of California granted Simplon Ballpark permission to pursue a $33 million loan for the project in Downtown San Diego, but did not postpone the foreclosure auction. Judge James W. Meyers had already delayed foreclosure several times as Simplon Ballpark attempted to refinance the project. When a deal for a bridge loan of $33 million with a lender fell apart, a junior debtor on the project filed for bankruptcy in hopes that it would prevent SDG-Left Field from foreclosing. The junior debtor, which the report did not name, lent $13.5 million to $13.5 million. The Union-Tribune said the junior debtor is an entity linked to Scripps Investment and Loan in La Jolla, San Diego. On Wednesday, the Court said SDG-Left Field could proceed with foreclosure despite the Scripps entity bankruptcy. About Simplon Ballpark Headquartered in San Diego, California, Simplon Ballpark, LLC is a real estate developer. The company filed for Chapter 11 protection on March 4, 2008 (Bankr. S.D. Calif. Case No. 08-01803). Hanno T. Powell, Esq. at Powell & Pool represents the Debtor. The U.S. Trustee for Region 16 has not appointed creditors to serve on an Official Committee of Unsecured Creditors. When it filed for protection from its creditors, the company listed assets and debts of both between $100 million and $500 million. SONICBLUE INC: Liquidating Plan Confirmed; Distributions in Nov. ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California confirmed Tuesday SonicBlue Inc.'s liquidating plan which was submitted by the Reorganized Committee of General Unsecured Creditors and the Chapter 11 trustee, Niraj Chokshi of The Recorder (Calif.) reported Wednesday. "The confirmation creates a post-confirmation committee, which will direct how the rest of the case moves forward," said Ron Oliner, a partner at Duane Morris partner, counsel to the Reorganized Committee of General Unsecured Creditors. Mr. Oliner said that distributions -- aggregating $77 million -- to creditors will be made by mid-November, while the remaining amount of nearly $10 million will be kept as a reserve to pay for ongoing administrative and litigation costs. "What's left to resolve are primarily the litigations among the law firms," Mr. Oliner added. In April, Dennis Connolly, a partner in Alston & Bird, in Atlanta, Georgia, and the Chapter 11 trustee in the case brought lawsuits against Pillsbury Winthrop Shaw Pittman and Levene, Neale, Bender, Rankin & Brill, seeking $15 million total from the two laws firms for alleged malpractice. A Nov. 17 hearing has been set in the suit against Pillsbury to decide on the firm's request for a jury trial for the $11 million suit it is facing. The trustee is also seeking disgorgement of fees from both firms -- $4.2 million for Pillsbury and $1.2 million for Levene, Neale. The Recorder said that the Court terminated Pillsbury from the case in March 2007 for failure to disclose a pre-bankruptcy promise to creditors, which Pillsbury attorneys later described as a "scrivener's error". That disclosure failure is also part of the April complaint. As reported by the Troubled Company Reporter on Sept. 9, 2008, Mr. Connolly made revisions to his plan of liquidation for the Debtor and accompanying disclosure statement. The first revision to the plan and disclosure statement was delivered to the Court on Aug. 22, 2008. The second revision to the plan documents was filed September 4. The Official Committee of Unsecured Creditors of SONICblue, as reconstituted, is a co-proponent to the liquidation plan. Plan Provisions Substantially all of the Debtors' assets other than certain estate litigation claims have already been reduced to cash. If any assets have not been liquidated by the effective date of the Plan, a plan administrator, in consultation with a post-confirmation committee, will liquidate those Assets in accordance with the terms of the First Amended Plan. The Plan Administrator will distribute the Cash and the proceeds of the Assets (net of expenses) to creditors in accordance with the Plan's terms. The Chapter 11 Trustee will initially serve as Plan Administrator. The Plan Proponents anticipate that roughly $77,000,000 will be available for distribution to Holders of Allowed Claims as part of an initial distribution. Holders of Allowed Administrative Claims, Priority Tax Claims, and Priority Claims, as well as Holders of Allowed Secured Claims, will be paid in full. Holders of 7-3/4% Secured Senior Subordinated Convertible Debentures issued by SONICblue in 2002 and due in 2005, in an aggregate principal amount not to exceed $75,000,000, will receive roughly 56% of the Allowed Amount of their Claims. Trade and other general unsecured creditors are expected to receive cash equal to roughly 38.0% of the Allowed Unsecured Claim. General Unsecured Creditors may receive payments as additional Assets become available for distribution. The principal source of those additional payments, if any, will be Estate Litigation Claims, including claims against counsel who formerly represented the Debtors and the initial creditors committee in the case. Holders of SONICblue's 5-3/4% Convertible Subordinated Notes issued in 1996 and due in 2003 are subordinated to the payment in full of the 2002 Noteholders. Because there are insufficient Assets in the Debtors' Estates to repay the 2002 Notes in full, the Plan Proponents believe that no Assets are available to repay the 1996 Notes. However, as part of as part of a settlement among the Chapter 11 Trustee, the Reconstituted Creditors Committee and the 2002 Noteholder, Holders of 1996 Notes may receive under the First Amended Plan roughly 0.9% of the Allowed Claim in the event: -- the Settlement is approved as part of the First Amended Plan, and the Plan is confirmed and becomes effective, -- Holders of 1996 Notes votes to accept the First Amended Plan, and -- no Holder of a 1996 Notes or the 1996 Notes Indenture Trustee objects to confirmation of the First Amended Plan. Pursuant to the Settlement, the 2002 Noteholders will contribute at least roughly $8.2 million in initial Cash distributions to Unsecured Creditors under the First Amended Plan, and more if additional distributions become available. Shareholders get nothing under the Plan. As of June 30, 2008, the Chapter 11 Trustee held approximately $85.8 million in Cash. About SONICblue Inc. SONICblue Inc. was a consumer electronics company. Prior to January 2001, SONICblue's primary business was to supply graphics and multimedia accelerator subsystems for personal computers. SONICblue completed the acquisition of ReplayTV, Inc., a developer of personal television technology, on August 1, 2001. SONICblue completed the acquisition of Sensory Science, a developer of consumer electronics products, including dual deck videocassette player/recorders and DVD players, on June 27, 2001. Debtor Diamond Multimedia Systems Inc. was an established PC original equipment manufacturer and retail provider of communications and home networking solutions, PC graphics and audio add-in boards and digital audio players. SONICblue Inc. and its debtor-affiliates filed for chapter 11 bankruptcy on March 21, 2003, before the U.S. Bankruptcy Court for the Northern District of California (Lead Case No. 03-51775). The Debtors employed Pillsbury Winthrop Shaw Pittman LLP formerly Pillsbury Winthrop LLP as their bankruptcy counsel. Houlihan Lokey Howard & Zukin Capital served as their financial advisors. Early into the case, the U.S. Trustee appointed an official creditors' committee in the case. On Oct. 4, 2007, the Bankruptcy Court directed the U.S. Trustee to reconstitute the Initial Creditors' Committee. The Initial Creditors' Committee retained Levene, Neale, Bender, Rankin & Brill LLP as bankruptcy counsel; and Alliant Partners, as financial advisors. On March 26, 2007, the Bankruptcy Court disqualified Pillsbury as the Debtors' bankruptcy counsel and ordered the appointment of a chapter 11 trustee for the Debtors. On April 17, 2007, the Court granted the U.S. Trustee's request to appoint Dennis J. Connolly, Esq., as the Chapter 11 Trustee. The U.S. Trustee filed a notice dissolving the Initial Creditors' Committee on Oct. 10, 2007. The U.S. Trustee appointed on Oct. 23, 2007, the Reconstituted Creditors' Committee -- Korea Export Insurance Corporation, Riverside Contracting LLC & Riverside Claims LLC, Synnex K.K., TLI Holdings, Inc., Michelle Miller, and York Capital Opportunity Fund. York Capital Opportunity Fund was later appointed Chair of the Reconstituted Creditors' Committee and Synnex K.K. subsequently resigned as a member. Grant T. Stein, Esq., at Alston & Bird LLP in Atlanta, Georgia; and Cecily A. Dumas, Esq., at Friedman Dumas & Springwater LLP in San Francisco, California, represent the Chapter 11 Trustee. Grobstein Horwath serves as accountants to the Chapter 11 Trustee. Aron M. Oliner, Esq., Mikel R. Bistrow, Esq., and Geoffrey A. Heaton, Esq., at Duane Morris LLP, in San Francisco, represent the Reconstituted Creditors' Committee. STEVE & BARRY'S: Names Harold Kahn as Chief Executive Officer ------------------------------------------------------------- Harold "Hal" Kahn has joined Steve & Barry's LLC as chief executive officer, effective immediately. Mr. Kahn has enjoyed a career in the retail business for 35 years, including 10 years as chairman and CEO of Macy's East, a division of Macy's, before leaving in 2004 to launch a retail consulting business. Prior to that, he was CEO of Abraham and Straus, president of Montgomery Ward, and CEO of Macy's South and Macy's West. He began his career in the training program at Macy's in 1970. "I am thrilled about the opportunity to help lead Steve & Barry's, a retailer I believe offers a value proposition that's second to none in the marketplace," Mr. Kahn said. "I've been watching the company closely since it began launching amazing celebrity collections with Sarah Jessica Parker, Venus Williams, Amanda Bynes, Laird Hamilton and others. I'm looking forward to helping guide the company to ensure it reaches its full potential." Douglas Teitelbaum, managing principal of investment fund Bay Harbour Management, which together with York Capital Management purchased Steve & Barry's out of bankruptcy this summer, said: "Hiring an extraordinary retail pro to lead Steve & Barry's was our top priority in the strategic business plan we put together for getting the company on track to meet our profitability goals over the long term. We're very fortunate that we were able to persuade Hal Kahn, one of the genuine greats in the field, to join the team. I think that's testament to how big an impact Steve & Barry's can make in retail over the next several years." About Steve & Barry's Headquartered in Port Washington, New York, Steve and Barry's LLC -- http://www.steveandbarrys.com/-- is a national casual apparel retailer that offers high quality merchandise at low prices for men, women and children. Founded in 1985, the company operates 276 anchor and junior anchor shopping center and mall- based locations throughout the U.S. The discount clothing chain's brands include the BITTEN(TM) collection, the first-ever apparel line created by actress and global fashion icon Sarah Jessica Parker, and the STARBURY(TM) collection of athletic and lifestyle apparel and sneakers created with NBA (R) star Stephon Marbury. Steve & Barry's LLC, and 63 affiliates filed separate voluntary petitions under Chapter 11 on July 9, 2008 (Bankr. S.D. N.Y. Lead Case No. 08-12579). Lori R. Fife, Esq., and Shai Waisman, Esq., at Weil, Gotshal & Manges, LLP, represent the Debtors in their restructuring efforts. Diana G. Adams, United States Trustee for Region 2, has appointed seven members to the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. On Aug. 22, 2008, the Debtors obtained permission from the Court to sell substantially all of their assets for $168 million to a joint venture by Bay Harbour Management and York Capital, BHY S&B Holdings, LLC. Under the terms of the purchase agreement, majority of the Debtors' 276 stores will remain open. Pursuant to the Purchase Agreement, the Court authorized 51 Debtors to change their corporate names. Lead Debtor Steve & Barry's Manhattan LLC (Case No. 08-12579) has been changed to Stone Barn Manhattan LLC. Parent company Steve & Barry's LLC (Case No. 08-12615) is now known as Steel Bolt LLC. When the Debtors filed for bankruptcy, they listed $693,492,000 in total assets and $638,086,000 in total debts. (Steve and Barry's Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). TIAA SEASONED: Stable Pool Performance Cues Fitch to Hold Ratings ----------------------------------------------------------------- Fitch Ratings has affirmed and assigned Outlooks to TIAA Seasoned Commercial Mortgage Pass-Through Certificates, series 2007-C4, as: -- $459 million class A-1 at 'AAA'; Outlook Stable; -- $324.7 million class A-2 at 'AAA'; Outlook Stable; -- $686 million class A-3 at 'AAA'; Outlook Stable; -- $109.5 million class A-1A at 'AAA'; Outlook Stable; -- $227.5 million class A-J at 'AAA'; Outlook Stable; -- Interest-only class X at 'AAA'; Outlook Stable; -- $10.5 million class B at 'AA+'; Outlook Stable; -- $28.8 million class C at 'AA'; Outlook Stable; -- $18.3 million class D at 'AA-'; Outlook Stable; -- $5.2 million class E at 'A+'; Outlook Stable; -- $15.7 million class F at 'A'; Outlook Stable; -- $20.9 million class G at 'A-'; Outlook Stable; -- $13.1 million class H at 'BBB+'; Outlook Stable; -- $23.5 million class J at 'BBB'; Outlook Stable; -- $7.8 million class K at 'BBB-'; Outlook Stable; -- $7.8 million class L at 'BB+'; Outlook Stable; -- $7.9 million class M at 'BB'; Outlook Stable; -- $2.6 million class N at 'BB-'; Outlook Stable; -- $7.9 million class P at 'B+'; Outlook Stable; -- $2.6 million class Q at 'B'; Outlook Stable; -- $2.6 million class S at 'B-'; Outlook Stable. Fitch does not rate the $15.7 million class T. The affirmations are due to the pool's stable performance and limited paydown since issuance. 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 4.5% to $1.998 billion from $2.09 billion at issuance. There have been no specially serviced or delinquent loans since issuance. There are 34 shadow rated loans that remain in the transaction (38.5%). Fitch reviewed the latest available financials, and all of the shadow rated loans are generally performing in line with expectations. Clayton Corporate Park (0.55%) has defeased. The 1000 Broadway/Fox Tower portfolio represents the largest loan in the transaction (5.1%) and is shadow rated as investment grade by Fitch. The loan is secured by two high-quality office towers located in Portland, Oregon. The properties have a diversified tenant mix of office and retail, with over 80 tenants, and no tenant represents more than 16% of the combined building's net rentable area. The properties have release provisions, which require that for either property to be released they must both have a minimum debt service coverage ratio of 1.50 times and a maximum loan-to-value of 65%. As of year-end 2007, occupancy improved to 99% from 95% at issuance, and the DSCR was in line with issuance at 1.58x. The second largest loan in the transaction, Sammamish Parkplace (4.26%), shadow rated, is secured by an office property in Issaquah, Washington. The collateral consists of three multilevel buildings situated in a campus-like setting on 20 acres of land in a picturesque landscaped setting. Located in the Eastside office market within the Seattle MSA, the current vacancy rate according to Torto Wheaton Research is 5.3%. The property is 100% occupied by Microsoft Systems with staggered lease maturities ranging from 2008-2011. As of YE2007, the DSCR was 1.94x, as compared to 2.11x at issuance. There is limited upcoming maturity risk: 3.5% of the pool matures in 2009 and 2.6% in 2010. TOMMY WHITE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Tommy L. White, Jr. 206 Stable Run Oxford, MS 38655 Bankruptcy Case No.: 08-14397 Chapter 11 Petition Date: October 23, 2008 Court: Northern District of Mississippi (Aberdeen) Debtor's Counsel: October 23, 2008 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 ------ --------------- ------------ Tommy L. White, Jr. $1,133,500 206 Stable Run Oxford, MS 38655 DeSoto Bank House - $544,408 Attn: William Renovick Steeplechase 6040 Hwy 51 N Horn Lake, MS 38637 Thrifty Building Supply Liens $70,837 PO Box 1883 Collierville, TN 38027 Smith Pickering Engineering Liens $70,019 American Express credit card $68,808 Fossett Paving $66,170 Consolidated Pipe & Supply $63,323 Hernando Redi Mix $57,000 Lafayette County Tax Steeplechase $53,900 Caterpillar Financial Cat D5G $52,750 Raymond W. Ferry $42,000 Donna D. Ferry MC Herrington Dist $37,832 General Shale Brick, Inc. Liens $37,040 B&B Electrical $34,138 Bank of America credit card $28,977 Quality Concrete Products $25,790 County Line Insulation & $25,182 Garage Door Roebuck Auctions $25,000 Tate County Tax Collector White Oak $25,000 TROPICANA ENT: Seeks to Resume Casino Operations w/o Ex-CEO ----------------------------------------------------------- Tropicana Entertainment, LLC, petitioned the New Jersey Casino Control Commission to regain operating authority over its casino and resort in Atlantic City. The action was aimed to make it clear that William J. Yung, former owner and chief executive, does not and will not have any influence or control over the company. According to company CEO Scott C. Butera, Tropicana wants to run the casino because it believes that there is a better chance of reversing the property's 48% decline in gross operating profits if it is integrated with a larger organization with the financial assets and human resources to invest in its future. The property has been under the control of a CCC-appointed conservator since last December. "We have assembled a strong, highly competent new management team that is experienced in the Atlantic City market," Mr. Butera said. "We want to immediately deploy our managerial and financial resources to serve the gaming public and provide tax and employment benefits to the community. "The need for this action has been made more urgent by the decision of the New Jersey Supreme Court to hear Tropicana's appeal to regain its status," Mr. Butera said. "The conservator's sale process for the property, which we continue to support as a way to determine the credibility of current indications of interest, could be delayed for several months, far too long for the casino to be without the benefit of well- financed, professional casino management." The petition asks the CCC to appoint a company co-conservator of the property and give him the authority to bring the casino under Tropicana Entertainment's corporate umbrella where it will have protections afforded under Chapter 11 of the Bankruptcy Code. Tropicana said it will then install a new management group at the property and make investments to improve the casino's business so that it can be either sold at a fair price or realize its longer term value as a going concern within Tropicana's corporate structure. If the CCC grants the petition, Tropicana will move to file the appropriate applications for a gaming license and ask the Commission to convene hearings -- "as soon as practicable" -- to establish that the newly constituted Tropicana is qualified to hold a casino license. The petition asserts that Tropicana qualifies for a New Jersey license by virtue of the fact that the company has been "utterly and completely re-formed." Mr. Yung is no longer involved and neither he nor the senior corporate team he had in place have any influence or control over the affairs of the company. The company anticipates that Mr. Yung's interests will be "cancelled and extinguished" upon consummation of the Chapter 11 reorganization plan. A CCC-appointed co-conservator can provide oversight and supervision to ensure that any CCC regulatory concerns with respect to Mr. Yung's interests are addressed. "Tropicana is a brand new company," Bradford Smith, independent board member and former CCC chairman, said. "We have a new, independent board. We have a new team of experienced professional gaming executives managing our operations. Most important, we live by a set of business and operating philosophies that are in keeping with the best practices of a modern day gaming enterprise." As evidence of the company's transformation, the petition notes a series of positive accomplishments on the part of the new management team. Among them are the separation from Columbia- Sussex Corporation, the establishment of headquarters in Las Vegas, arranging debtor in possession financing, and obtaining the approval of the Nevada Gaming Commission to operate the company's five casinos in Nevada. It also cites Butera's direct involvement in achieving a long-delayed labor agreement with the culinary union at the Tropicana Las Vegas. "The issue here obviously involves maximizing value for our constituents," Mr. Butera said. "But New Jersey and Atlantic City have a lot at stake, too. Selling the casino at the depressed prices could have the unintended consequence of lowering assessed values and drastically cutting city tax revenue. Faced with such a shortfall, lawmakers may be forced to increase individual property taxes to make ends meet. "Likewise, assuming the sale is delayed until the Supreme Court rules, the business cannot be allowed to falter," he said. "That, too, has consequences in terms of employment and overall returns to the City. "These are outcomes that we should all work to avert," Mr. Butera concluded. About Tropicana Entertainment Based in Crestview Hills, Kentucky, Tropicana Entertainment LLC -- http://www.tropicanacasinos.com/-- is an indirect subsidiary of Tropicana Casinos and Resorts. The company is one of the largest privately-held gaming entertainment providers in the United States. Tropicana Entertainment owns eleven casino properties in eight distinct gaming markets with premier properties in Las Vegas, Nevada and Atlantic City, New Jersey. Tropicana Entertainment LLC filed for Chapter 11 protection on May 5, 2008, (Bankr. D. Del. Case No. 08-10856). Its debtor- affiliates filed for separate Chapter 11 petitions but with no case numbers assigned yet. Kirkland & Ellis LLP and Mark D. Collins, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. Their financial advisor is Lazard Ltd. Their notice, claims, and balloting agent is Kurtzman Carson Consultants LLC. Epiq Bankruptcy Solutions LLC is the Debtors' Web site administration agent. AlixPartners LLP is the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represent the Official Committee of Unsecured Creditors in the case. Capstone Advisory Group LLC is financial advisor to the Creditors' Committee. The Court has extended the Debtors' exclusive period to file a plan through and including January 12, 2009, and to solicit votes on the plan through and including March 13, 2009. (Tropicana Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/or 215/945-7000) UAL CORP: CFO Jake Brace to Retire Oct. 31, Signs Separation Deal ----------------------------------------------------------------- UAL Corporation, in a regulatory filing with the U.S Securities and Exchange Commission dated Oct. 9, 2008, disclosed that in line with Jake Brace's retirement as executive vice-president and chief financial officer of UAL effective October 31, Mr. Brace and Human Resources Subcommittee of the UAL board entered into a separation agreement. Paul R. Lovejoy, senior vice president, general counsel and secretary of UAL, relates that Mr. Brace will receive the benefits provided under the UAL Corporation Executive Severance Plan, including severance pay equal to two times the sum of his base salary of $653,125 plus his target annual incentive amount 85% of base salary. One twelfth of the amount will be paid on Nov. 8, 2008, with the remainder to be paid in a lump sum amount in January 2009. Mr. Brace will also receive a prorated payment for 2008 under UAL's Success Sharing and Profit Sharing Plans and will be paid for his unused vacation for 2008 and his accrued vacation for 2009. Mr. Lovejoy adds that under the UAL Corporation 2006 Management Equity Incentive Plan and Separation Agreement, all equity awards previously granted to Mr. Brace will vest immediately and all stock options will remain exercisable through the original award term. Moreover, Mr. Brace will also receive outplacement consulting services and continuation of certain medical and travel benefits through Sept. 30, 2012, after which he will receive retiree medical coverage and retiree travel benefits. In turn, Mr. Brace has to agree to certain covenants including non-competition, non-solicitation, non-disparagement and confidentiality covenants for the benefit of UAL as well as a general release of claims. Mr. Brace has agreed to: * cooperate with UAL with respect to any matter through October 31, 2010, relating to matters he was involved with while employed by UAL; * not take a competitive position with certain air carriers, through October 31, 2010 without prior written consent of UAL, including any position as a director or providing services similar to a management-level employee as a consultant, independent contractor or otherwise; * not to solicit or hire any employee of UAL, attempt to persuade any employee to leave UAL or hire or solicit certain persons employed by UAL during the six-month period preceding November 1, 2008. About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. On Oct. 24, UAL Corp. reported a net loss of $779 million, on $5.57 billion of revenues for three months ended Sept. 30, 2008, compared with a net income of $334 million on $5.53 billion of revenues during the same period last year. The company has assets of $20,731,000,000 and debts of $22,013,000,000 as of Sept. 30, 2008. (United Airlines Bankruptcy News; 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 UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. UAL CORP: Reports $779MM Net Loss for Quarter Ended Sept. 30 ------------------------------------------------------------ UAL Corporation, the holding company whose primary subsidiary is United Airlines, reported a third quarter net loss of $779 million or $252 million, if non-cash, net mark-to-market losses on fuel hedge contracts and certain accounting charges are excluded, despite an increase of $946 million in consolidated fuel expense. For the third quarter ended Sept. 30, 2008, the company: * Reported basic and diluted loss per share of $1.99 excluding non-cash, net mark-to-market hedge losses and certain accounting charges outlined in note 5. United's reported GAAP loss per share was $6.13. * Recorded $519 million in non-cash, net mark-to-market losses on its fuel hedge contracts, as a result of the drop in oil prices at the end of the quarter. The company recorded a cash gain of $17 million on contracts that settled during the quarter bringing its consolidated cash fuel expense to $2.5 billion, $946 million higher than the prior year. * Reported a 6.1% increase year-over-year in mainline passenger unit revenue, excluding special items and Mileage Plus accounting impacts. Including these items, mainline PRASM increased 4.5% year-over-year. * Demonstrated good cost control while reducing capacity with mainline cost per available seat mile, excluding fuel and certain accounting charges, flat versus the same period in 2007, despite 4.0% lower capacity. Mainline CASM including fuel and certain accounting charges for the quarter was up 30.8% versus the third quarter of 2007, reflecting a 96.4% increase in mainline fuel price per gallon including non-cash, net mark-to-market hedge losses. * Raised $1.4 billion in cash through various activities including aircraft financings, asset sales and amending its credit card agreements. "While today's weak economic environment challenges our industry as demand softens, that same economic environment has caused oil prices to significantly decline from the unprecedented highs we witnessed earlier this year, suggesting significantly lower industry costs and improving operating margin," said Glenn Tilton, United chairman, president and CEO. "We are taking the action required to return to profitability and continue to strengthen our liquidity while simultaneously improving the operating fundamentals to deliver the results our shareholders and customers expect." Quarterly Net Loss Driven By High Fuel Prices and Non-Cash, Net Mark-to-Market Losses The company recorded a $519 million non-cash, net mark-to- market losses on its fuel hedge contracts during the quarter as a result of the recent drop in the price of oil. The non-cash loss reflects the change in book value of the hedges during the quarter. Should fuel prices stay at lower levels, over time the company will enjoy lower prices on its unhedged fuel purchases offsetting cash losses that might be incurred at contract settlement. On a cash basis, the hedges that settled during the quarter resulted in a gain of $17 million. At the end of the quarter, the fair value of the outstanding fuel hedge contracts was negative $230 million. Excluding the non-cash, net mark-to-market hedge loss and certain accounting charges outlined in note 5, in the third quarter of 2008 the company generated an operating loss of $150 million, versus operating income of $592 million last year as a result of the $946 million increase in consolidated cash fuel expense. The significant increase in average cash fuel price caused the company to generate a net loss, excluding the non-cash, net mark-to-market hedge losses and certain accounting charges, of $252 million in the third quarter of 2008. Including the non-cash, net mark-to-market hedge losses and certain accounting charges, the company reported an operating loss for the quarter of $491 million and a net loss of $779 million. Because of its net operating loss carry-forwards, the company expects to pay minimal cash taxes for the foreseeable future and is not recording incremental tax benefits at this time. Strengthened Cash Position The company received approximately $1.4 billion through various transactions it closed during the quarter. This includes approximately $1 billion from revising the Chase Bank U.S.A., N.A. and Paymentech L.L.C. contracts, $300 million in new aircraft financings, $50 million from the release of restricted cash, and $43 million in proceeds from asset sales. The agreements with Chase and Paymentech will improve United's liquidity by an additional $200 million over the next two years. During the fourth quarter, based on closed transactions and agreements in principle (subject to final documentation and other conditions), the company received approximately $65 million from aircraft financings and also expects to receive approximately $120 million through the sale of various assets. This includes the sale of a number of B737s that are being retired as part of our capacity reduction plan. This week the company signed an agreement in principle on an additional aircraft financing worth approximately $150 million. Higher fuel prices caused the company to have negative operating and free cash flow during the quarter. The company generated negative $387 million of operating cash flow and negative $490 million of free cash flow, defined as operating cash flow less capital expenditures. The company ended the quarter with an unrestricted cash balance of $2.9 billion, restricted cash balance of $248 million and $378 million in cash deposits held by its fuel hedge counterparties. "We are ensuring that United is well positioned in this difficult market: we have minimal capital obligations and we have been able to raise $1.4 billion, including a $125 million financing that closed just a few weeks ago in a very tough credit market," said Kathryn Mikells, United's incoming CFO. "We continue the work to further enhance liquidity and our $3.0 billion in unencumbered assets provide us with critical financial and operational flexibility." Accelerating Revenue Growth, Good Cost Control and Improving Operating Performance "We are pursuing an aggressive agenda to improve the fundamental performance of United," said John Tague, executive vice president and chief operating officer. "We are seeing results against that plan: we are delivering good cost control, even as we reduce capacity, and we continue to produce solid revenue growth by further honing our network, and putting more choice in the hands of customers with products they value and are willing to pay for." Mainline RASM, excluding special items and Mileage Plus accounting impacts, increased by 6.2% year-over-year from the third quarter of 2007 due to strong passenger and cargo yield performance which more than offset lower passenger load factors. Including special items and Mileage Plus accounting impacts, mainline RASM increased by 4.8% year-over-year. The company's cargo business continued its strong performance with a 10.6% year-over-year increase in revenue. Higher fuel surcharges, foreign exchange gains and strong yield improvements contributed to the cargo revenue increase. Total passenger revenues excluding special items increased by 1.4% in the third quarter compared to the prior year as a result of a 7.1% gain in consolidated yield, more than offsetting the 1.6 point decline in system load factor and 3.6% decline in consolidated capacity. Mainline domestic PRASM for the quarter excluding special items and Mileage Plus accounting impacts was up by 6.9%, aided by a 6.2% reduction in capacity; including these items, mainline domestic PRASM increased by 5.6%. In September mainline domestic PRASM, excluding special items and Mileage Plus accounting impacts was up 11% year over year driven by a 10.8% reduction in capacity; including these items mainline domestic PRASM increased by 7.0%. International PRASM excluding special items and Mileage Plus accounting impacts grew 5.0% in the third quarter compared to the same period last year, on a 0.8% decrease in international capacity year- over-year; including these items, international PRASM increased 3.3%. Regional affiliate PRASM, excluding special items and Mileage Plus accounting impacts, was up 2.4% compared to last year, with a 4.9% increase in yield and flat capacity; including these items regional affiliate PRASM increased by 0.9%. Load factor for regional affiliates decreased 1.9 points in the third quarter of 2008 compared to the third quarter of 2007, while stage length for regional affiliates was up 4.2% for the same period. Comparison of 2008 Third Quarter Geographic Passenger Revenue 3Q 2008 Passenger Adjusted Passenger Revenue PRASM PRASM ASM Geographic Revenue %Increase %Increase %Increase Increase/ Area (millions) (Decrease) (Decrease) (Decrease)(Decrease) ---------- ---------- ---------- ---------- ---------- --------- Domestic $2,530 (0.1%) 6.9% 6.5% (6.2%) Pacific 866 (4.8%) 4.8% 4.2% (8.6%) Atlantic 759 14.2% 2.6% 1.9% 12.0% Latin America 125 5.7% 10.5% 9.7% (3.7%) ---------- ---------- ---------- ---------- --------- Total 4,280 1.3% 6.1% 5.4% (4.0%) Mainline ---------- ---------- ---------- ---------- --------- Regional 834 1.9% 2.4% 1.9% 0.0% Affiliates ---------- ---------- ---------- ---------- --------- Total 5,114 1.4% 5.7% 5.2% (3.6%) Consolidated Good Cost Performance Third quarter mainline CASM, excluding fuel and certain accounting charges, was flat versus last year at 7.71 cents, despite a 4.0% decrease in mainline capacity, demonstrating United's continued focus on controlling non-fuel costs. Mainline CASM, including fuel but excluding the non-cash, net mark-to-market losses and certain accounting charges, increased 21.6% to 13.78 cents. Including the mark-to- market losses and certain accounting charges, mainline CASM increased by 30.8% year-over-year to 14.75 cents, reflecting the steep increase in fuel price on average during the quarter as well as the large non-cash, net mark-to-market accounting loss driven by the sharp decline in the price of oil experienced at the end of the quarter. Third Quarter Increase/(Decrease) ------------------------------------- Mainline Consolidated ----------------- ------------------ % % 2008 2007 Chg. 2008 2007 Chg. ------ ---- ---- ----- ---- ----- CASM (cents) 14.75 11.28 30.8% 15.42 11.96 28.9% CASM excluding certain accounting charges and non-cash, net mark-to- market losses (cents) 13.78 11.33 21.6% 14.55 12.01 21.1% CASM excluding fuel and certain accounting charges (cents) 7.71 7.71 -- 8.17 8.19 (0.2%) The company has classified the majority of its various fuel hedging positions as economic hedges for accounting purposes. Gains and losses on economic hedges are included in the fuel expense line while gains and losses from hedges that do not qualify as economic hedges are recorded in the non-operating expense line. Three Months Ending Sept. 30, 2008 (in millions) ---------------------------- Included Included in In Fuel Non-Operating Expense Expense Total -------- ------------- ----- Non-cash, net mark-to-market loss ($336) ($183) ($519) Cash net gain/(loss) on settled contracts $39 ($22) $17 -------- ------------- ----- Total recognized net gains/(losses) ($297) ($205) ($502) Actions to Improve Operating Performance The company continues its efforts to improve operational performance, improving execution, increasing average scheduled ground time and adding spare aircraft. This, coupled with the reduction in ground delays resulting from the industry-wide cut in capacity, has begun to yield improvements in the company?s on- time performance. For the third quarter the company recorded its best on-time arrival performance since 2006. Business Highlights * United and Westin Hotels & Resorts launched a new level of comfort with the Westin Heavenly(R) Bed products and signature amenities for first and business class customers who fly United's p.s. service. * United and Aer Lingus announced the beginning of their codesharing agreement by enabling United customers to book connecting flights on Aer Lingus' network for travel starting Nov. 1, 2008. Beginning in April 2009, Aer Lingus will place its code on United Airlines domestic flights giving customers access to United?s entire North American network. * United filed an application, along with eight other Star Alliance members, with the U.S. Department of Transportation (DOT) for antitrust immunity with Continental. In addition the company requested DOT approval to establish a trans-Atlantic joint venture, with Continental, Lufthansa and Air Canada. Approval would allow the carriers to work closely together to deliver highly competitive flight schedules, fares and service. * United began its new premium service to Asia with its newly reconfigured Boeing 747. Customers in United First and United Business on newly reconfigured aircraft may enjoy more than 150 hours of movies and television shows on-demand; relax with fully lie-flat seats; and dine on appetizers and entrees designed by world-renowned chef Charlie Trotter on outbound U.S. flights. * United announced the availability of Award Accelerator, a new offering that allows customers to purchase redeemable Mileage Plus miles in addition to the miles they are already earning on a specific itinerary. Miles available for purchase in most cases are based on the actual flown mileage of each leg of the trip. * United announced policy changes to improve travel for active duty military personnel, including complimentary, space available access to United?s spacious Economy Plus? seating area and the ability to check up to three bags free of charge. * United increased the service fee to check a second bag of a domestic flight from $25 to $50 one way. Outlook The company's capacity outlook for the fourth quarter, full year 2008 and the full year 2009 is shown below. Capacity (Available 4th Quarter Full-year Full-year Seat Miles) 2008 2008 2009 vs. 2008 ----------- ---------------- -------------- ---------------- Domestic -15.5% to -14.5% -8.5% to -7.5% -13.5% to -12.5% International -9.0% to -8.0% +0.5% to +1.5% -8.0% to -7.0% ---------------- -------------- ---------------- Mainline -12.5% to -11.5% -5.0% to -4.0% -11.0% to -10.0% ---------------- -------------- ---------------- Express Consolidated -2.5% to -1.5% -1.5% to -0.5% +6.5% to +7.5% Domestic -13.0% to -12.0% -7.5% to -6.5% -10.0% to -9.0% ---------------- -------------- ---------------- Consolidated -11.5% to -10.5% -4.5% to -3.5% -9.0% to -8.0% ---------------- -------------- ---------------- For the fourth quarter, mainline CASM, excluding fuel and certain accounting charges, is anticipated to increase between 2.5 and 3.5%. The company is on track to fully achieve its $500 million cost reduction program by the end of 2008. The company expects CASM, excluding fuel and certain accounting charges to increase between 1.5 and 2.0% for the full year 2008. The company has also limited its non-aircraft capital budget to $450 million for 2008, $200 million less than originally planned. Hedge Positions as of Oct. 17, 2008 ------------------------------------------------------ Average Price Average Price % of % of where Payment where Expected Expected Obligations Protection Hedging Consolidated Mainline ------------ -------------- Instrument Consumption Consumption Stops Begin Begins Stops ---------- ------------ ----------- ----- ----- ------ ----- 4th Quarter 2008 Collars 16% 19% N/A $99bbl $109bbl N/A 3-Way Collars 33% 39% N/A $107bbl $113bbl $133bbl ------------ ----------- ----- ----- ------ ----- 4th Qtr 2008 Total 49% 58% N/A $104bbl $112bbl N/A Full Year 2009 Calls 6% 7% N/A N/A $106bbl N/A Collars 3% 4% N/A $109bbl $119bbl N/A 3-Way Collars 18% 22% N/A $102bbl $117bbl $145bbl 4-Way Collars 1% 2% $63bbl $78bbl $95bbl $135bbl ------------ ----------- ----- ----- ------ ----- Full Yr 2009 Total 28% 34% N/A $101bbl $114bbl N/A The company estimates the following fuel prices for the fourth quarter. Three Months Ending Mainline Fuel Price (Price per Gallon) Dec. 31, 2008 -------------------------------------- ------------------- Mainline Fuel price including taxes and excluding impact of hedges $2.88 Mainline Fuel price including taxes and cash net gains or losses on settled hedges $3.01 Mainline Fuel price including taxes and impact of mark-to-market net losses on settled and unsettled hedges $3.30 UAL Corporation and Subsidiary Companies Unaudited Statement of Consolidated Operations Three Months Ended September 30, 2008 (In Millions) Operating revenues: Passenger - United Airlines $4,208 Passenger - Regional Affiliates 834 Cargo 219 Special operating items - Other operating revenues 232 ------ Total Operating Expenses 5,493 Operating expenses: Aircraft fuel 2,461 Salaries and related costs 1,037 Regional affiliates 882 Purchased services 327 Aircraft maintenance materials and outside repairs 256 Depreciation and amortization 234 Landing fees and other rent 222 Distribution expenses 181 Aircraft rent 115 Cost of third party sales 75 Special operating items (9) Other operating expenses 275 ------ Total Operating Expenses 6,056 Earnings (loss) from operations (491) Other income (expense): Interest expense (131) Interest income 24 Interest capitalized 6 Miscellaneous, net (186) ------ (287) Loss before income taxes and equity in loss) of affiliates (778) Income tax benefit 2 ------ Loss before equity in loss of affiliates (780) Equity in earnings (loss) of affiliates, net of tax 1 ------ NET LOSS ($779) ====== UAL Corporation and Subsidiary Companies Statements of Consolidated Cash Flows Three Months Ended September 30, 2008 (In Millions) Cash flows from operating activities ($387) Cash flows from investing activities Net (purchases) sales of short-term investments - Additions to property and equipment (103) Purchases of EETC securities - Increase decrease in restricted cash 407 Proceeds from asset sale leaseback 59 Proceeds from litigation on advance deposits - Proceeds from the sale of property and equipment 29 Other, net (13) ------ Net cash used for investing activities 379 Cash flows provided (used) by financing activities: Repayment of Credit Facility (9) Repayment of other debt (187) Special distribution (2) Principal payments under capital lease deposits (9) Decrease in capital lease deposits - Increase in deferred financing costs (7) Proceeds from issuance of secured notes 253 Other, net 1 ------ Net cash used for financing activities 40 Increase (decrease) in cash and cash equivalents 32 Cash and cash equivalents at beginning of the period 2899 ------ Cash and cash equivalents at end of the period $2931 ====== About UAL Corporation Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. (United Airlines Bankruptcy News; 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 UAL Corp. and subsidiary United Air Lines Inc. (both rated B- /Negative/--), including lowering the long-term corporate credit ratings on both entities to 'B-' from 'B', and removed the ratings from CreditWatch, where they had been placed with negative implications May 22, 2008, as part of an industrywide review. The outlook is negative. VICORP RESTAURANTS: Closes Three Bakers Square Restaurants ---------------------------------------------------------- Bo Poertner at Santamariatimes.com (California) reports that VICORP Restaurants Inc. has closed three Bakers Square restaurants at Lompoc, Buellton, and Santa Maria, in California. According to Santamariatimes.com, the closings may have been planned for a few months. Each restaurant had about 30 employees, Santamariatimes.com states, citing a worker at one of the restaurants. VICORP previously said that it would shut down about 56 restaurants as part of its reorganization, Santamariatimes.com relates. 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 Official Committee of Unsecured Creditors of the Debtors. 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. W.R. GRACE: Sept. 30 Balance Sheet Upside-Down by $250 Million -------------------------------------------------------------- W. R. Grace & Co.'s balance sheet at Sept. 30, 2008, showed total assets of $3.75 billion and total liabilities of $4.00 billion, resulting in a shareholders' deficit of $250 million. The company reported financial results for the third quarter ended Sept. 30, 2008. Highlights included: -- Sales for the third quarter were $889.4 million compared with $783.1 million in the prior year quarter, a 13.6% increase or 9.0% before the effects of currency translation. The sales increase was attributable to higher selling prices in response to rising raw materials costs in both operating segments and currency translation. Price increases yielded approximately $50 million in the third quarter, increasing sales by 6.4% over the prior year quarter. Sales were up 13.4% in North America, 4.4% in Europe Africa, 36.1% in Asia Pacific and 18.8% in Latin America. -- Net income for the third quarter was $28.3 million compared with net income of $19.1 million in the prior year quarter. The 2008 and 2007 results were negatively affected by Chapter 11 expenses, litigation and other matters not related to core operations. Excluding Chapter 11 expenses, the loss on noncore activities, and their tax effects, net income would have been $46.9 million for the third quarter of 2008 compared with $40.5 million calculated on the same basis for the prior year quarter, a 15.8% increase. -- Pre-tax income from core operations was $82.4 million in the third quarter compared with $78.0 million in the prior year quarter, a 5.6% increase. Inflation on raw materials and energy costs totaled approximately $50 million in the third quarter, increasing costs approximately 18% when compared with the prior year quarter. -- Sales for the nine months ended Sept. 30, 2008, were $2.54 billion compared with $2.31 billion for the comparable prior year period, a 10.3% increase or 5.1% before the effects of currency translation. Net income for the nine months ended Sept. 30, 2008, was $78.1 million compared with $51.6 million for the comparable prior year period. Excluding Chapter 11 expenses, the loss on noncore activities, and their tax effects, net income would have been $142.4 million for the nine months ended Sept. 30, 2008, compared with $123.8 million calculated on the same basis for the comparable prior year period, a 15.0% increase. Pre-tax income from core operations was $252.3 million for the nine months ended Sept. 30, 2008, up 4.1% from the comparable prior year period. Price increases totaled approximately $100 million in the nine months ended Sept. 30, 2008, increasing sales approximately 4.3% when compared with the comparable prior year period. Inflation on raw materials and energy costs totaled approximately $110 million in the nine months ended Sept. 30, 2008, increasing costs approximately 13% when compared with the comparable prior year period. -- During the third quarter of 2008, Grace changed its accounting policy for inventories in the U.S. from LIFO to FIFO in order to provide a consistent, worldwide inventory accounting standard. Grace has applied the change retrospectively and restated all periods. Cash Flow and Liquidity Grace's net cash used for operating activities for the nine months ended Sept. 30, 2008, was $182.0 million compared with net cash provided by operating activities of $65.8 million for the prior year period. The change in net cash flow from operating activities was attributable to a payment of $250 million related to the settlement of environmental claims relating to Grace's former operations in Libby, Montana. Net cash used for investing activities was $23.9 million for the nine months ended Sept. 30, 2008. At Sept. 30, 2008, Grace had available liquidity of approximately $562.8 million, consisting of $325.2 million in cash and cash equivalents, $35.1 million in short-term investment securities, $30.8 million in net cash value of life insurance policies, approximately $73.3 million of available credit under various non- U.S. credit facilities and approximately $98.4 million of available credit under its $165.0 million debtor-in-possession facility. Grace stated that these sources and amounts of liquidity are sufficient to support its business operations, strategic initiatives and Chapter 11 proceedings until a plan of reorganization is confirmed and Grace emerges from bankruptcy. Grace is exploring sources of new financing of up to $1.5 billion to fund the Plan. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The Company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on January 14, 2008. WASHINGTON MUTUAL: Fitch Holds 'B-' Rating; Puts Stable Outlook --------------------------------------------------------------- Fitch Ratings has upgraded and assigned Outlooks to three classes of Washington Mutual Asset Securities Corporation commercial mortgage pass-through certificates, series 2003-C1, as: -- $5.7 million class G to 'AAA' from 'AA+'; Outlook Stable; -- $2.9 million class H to 'AA+' from 'AA'; Outlook Stable; -- $5.7 million class J to 'A' from 'A-'; Outlook Stable. In addition, Fitch has affirmed and assigned Outlooks to these classes: -- $99.7 million class A at 'AAA'; Outlook Stable; -- $11.4 million class B at 'AAA'; Outlook Stable; -- Interest-only class X-1 at 'AAA'; Outlook Stable; -- $2.9 million class C at 'AAA'; Outlook Stable; -- $12.9 million class D at 'AAA'; Outlook Stable; -- $2.9 million class E at 'AAA'; Outlook Stable; -- $4.3 million class F at 'AAA'; Outlook Stable; -- $4.3 million class K at 'BBB+'; Outlook Stable; -- $1.4 million class L at 'BBB-'; Outlook Stable; -- $2.9 million class M at 'BB+'; Outlook Stable; -- $2.9 million class N at 'B+'; Outlook Stable; -- $1.4 million class O at 'B-'; Outlook Stable. Fitch does not rate the $5.7 million class P certificates. The rating upgrades reflect the increased subordination due to scheduled amortization and pay down of 20.9% since Fitch's last rating action. 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 71% to $166.9 million from $574.8 million at issuance. Of the original 216 loans, 82 remain in the transaction and the average loan size is approximately $2 million. There are currently no delinquent or specially serviced loans. The accelerated pay down is due to the pool's composition of seasoned loans and shorter weighted average remaining amortization schedules than typical conduit transactions. Of the remaining 82 loans, Fitch has identified nine Loans of Concern (12.0%). Mortgage coupons for these loans range from 6.16% to 8.9%. The largest loan of concern (3.6%) is secured by a 70,200 square foot office building in Manhattan. Servicer reported occupancy as of June 2008 was 62% with a debt service coverage ratio of 1.34 times. In addition, two loans (1.0%) were scheduled to mature in September 2008 and October 2008, respectively, and have both paid in full. The largest remaining loan (10.3%), Center Pointe Plaza, is secured by an anchored retail center in Christiana, Delaware. The servicer reported DSCR as of year-end 2007 was 1.44x. The loan is scheduled to mature in 2014. The second largest loan (9.5%), Palmer Park Mall, is secured by a regional mall property in Easton, Pennsylvania, and is scheduled to mature in January 2009. Servicer reported DSCR as of March 2008 was 2.01x. The mall's largest tenant, Boscov's, is not scheduled for closing under the company's reorganization. WEST MEEKER: Case Summary & 15 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: West Meeker Condominiums, LLC 5252 17th Ave. SW Seattle, WA 98106 Bankruptcy Case No.: 08-17105 Chapter 11 Petition Date: October 23, 2008 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Ta Teasha M. Davis, Esq. tmdlaw@gmail.com Law Office of Ta Teasha M. Davis 500 Union St., Ste. 520 Seattle, WA 98101 Tel: (206) 623-0435 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/wab08-17105.pdf WORLDSPACE INC: Indian Creditors Mull Legal Move to Recover Money ----------------------------------------------------------------- WorldSpace Inc.'s providers in India are planning to take legal action against the company in an effort to recover their money, Televisionpoint.com reports. WordSpace's Indian creditors include Phonographic Performance Limited with unsecured claims of $657,894, BPL Techno Vision Pvt. Ltd., with unsecured claims of $506,046, Antrix Corporation Limited, with unsecured claims of $482,661, Epigon Media Technologies and Lepton Software Export & Research. A BPL official told Televisionpoint.com that WorldSpace's Indian creditors have sought legal advice in India and Washington DC on how to recover their money. WorldSpace has more 1.7 million subscribers in India. WorldSpace, Inc. (WSI) -- http://www.1worldspace.com/-- was organized on July 29, 1990, and incorporated in the State of Maryland on November 5, 1990. WorldSpace, Inc. and subsidiaries is engaged in the design, development, construction, deployment and financing of a satellite-based radio and data broadcasting service, which serve areas of the world where traditional broadcast media or internet services are limited. The Company, which operates in 10 countries, has one satellite in orbit over Africa, another over Asia and a completed third satellite currently in storage. This satellite, which can be used to replace either of the company's two operational satellites may also be modified and launched to provide DARS in Western Europe. The Debtor and two of its affiliates filed for Chapter 11 bankruptcy protection on Oct. 17, 2008 (Bankr. D.Del., Case No. 08-12412 - 08-12414). Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, and Shearman & Sterling LLP, are the Debtors' counsel. When the Debtors filed for bankruptcy, they listed total assets of $307,382,000 and total debts of $2,122,904,000. * Fitch Takes Out PIT Ratings on 26 Tradeable Credit Baskets ------------------------------------------------------------ Fitch Ratings has removed from its Web site the point-in-time ratings on 26 tradeable credit baskets. Tradeable Credit Baskets, which reference various credit derivative indices, are rated by Fitch applying its bond fund rating criteria. The removal of these ratings is consistent with Fitch's practice not to issue public point-in-time ratings, as point-in-time ratings are not subject to active surveillance and are only valid as of the date of issue. The list of ratings to be removed are: -- Dow Jones CDX.NA.HY.3 Trust 1 'B+/V3'; -- Dow Jones CDX NA.HY.3 Trust 2 'BB/V3'; -- Dow Jones CDX.NA.HY.3 Trust 3 'B/V3'; -- Dow Jones CDX.NA.HY.4 Trust 1 'B+/V3'; -- Dow Jones CDX.NA.HY.4 Trust 2 'BB/V3'; -- Dow Jones CDX.NA.HY.4 Trust 3 'B/V3'; -- Dow Jones CDX.NA.HY.5 Trust 1 'B+/V4'; -- Dow Jones CDX NA.HY.5 Trust 2 'BB/V4'; -- Dow Jones CDX NA.HY.5 Trust 3 'B/V4'; -- Dow Jones CDX NA.HY.6 Trust 1 'B+/V4'; -- Dow Jones CDX NA.HY.6 Trust 2 'BB/V4'; -- Dow Jones CDX.NA.HY.6 Trust 3 'B/V4'; -- Dow Jones CDX.NA.HY.7 Trust 1 'B+/V4'; -- Dow Jones CDX.NA.HY.7 Trust 2 'BB/V4'; -- Dow Jones CDX.NA.HY.7 Trust 3 'B/V4'; -- Dow Jones CDX.NA.HY.8 Trust 1 'B+/V4'; -- Dow Jones CDX.NA.HY.8 Trust 2 'BB/V4'; -- Dow Jones CDX.NA.HY.8 Trust 3 'B/V4'; -- Dow Jones CDX.NA.HY.9 Trust 1 'B/V4'; -- Dow Jones CDX.NA.HY.9 Trust 2 'B/V4'; -- INDEXPLUS Trust Series 2003-1 'BBB/V6'; -- Targeted Return Index Securities Trust Series 10-2002 'BBB+/V4'; -- TRACERS Series 2001-1 (10 Year) 'A/V4'; -- TRACERS Series 2002-2 (30-Year) 'A-/V7'; -- TRACERS Series 2002-5 (10- Year) 'A-/V4'; -- TRAC-X North America Series 2 March 2009 'BBB/V4'. * Donlin Recano Names Bankruptcy Lawyer Scott Stuart as Partner --------------------------------------------------------------- Donlin Recano and Company, Inc. disclosed that Scott Stuart has been named a partner of the firm. His years of expertise as an lawyer and entrepreneur in the turnaround world will boost the firm's growth and viability into the next-generation. Recognized as an "industry mover" by the Daily Bankruptcy Review, Scott Stuart focuses on catalyzing the efficiencies, technologies and service processes critical to the industry. "Driving simple and effective client services is essential to our success," Louis Recano, chief executive officer, said. "Donlin Recano takes this to an entirely new level by applying customized solutions on a case-by-case basis. [Mr. Stuart] has spearheaded a long-term business model uniquely separating Donlin Recano from its competitors." Mr. Stuart has extensive experience in all aspects of bankruptcy management processes and new business development with nearly two decades of highly regarded hands-on experience in planning, advising and managing the needs among the public and private- sector clients. As a thought leader among the law and bankruptcy trades and respected member of the bankruptcy community, Mr. Stuart has a substantial list of lectures along with dozens of published articles. "As partner, I look forward to securing the relationships established over the last 20 years to propel new beginnings one successful experience at a time," Mr. Stuart, said. About Donlin Recano Donlin Recano and Company, Inc. -- http://www.donlinrecano.com/-- is a claims management company that has served over 200 national clients across a broad range of industries and business sectors. Working with counsel, turnaround advisors and the affected company, Donlin Recano helps organize and guide Chapter 11 clients through administrative bankruptcy tasks, including provision of Web site-accessible information, formation of professional call centers, management of claims, balloting, distribution and other administrative services. The company also provides Web-based information services for creditors committees as required by The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. * Hunton & Williams Creates Financial Industry Recovery Group ------------------------------------------------------------- Hunton & Williams LLP formed a multidisciplinary Financial Industry Recovery Group to assist its clients in addressing the challenges and exploring the opportunities of the current financial crisis. The group is composed of lawyers with top-tier experience in the firm's practices involving financial institutions, regulation and capital formation, securitization, distressed assets, internal and governmental investigations, executive compensation and taxation, bankruptcy and business practice litigation. "In these turbulent times, companies are facing greater legal challenges now than ever before. They must have complete confidence that their legal team has a broad base of experience to guide them through it all," Wally Martinez, Hunton & Williams' managing partner, said. "At Hunton & Williams, we have assembled our leaders in these areas with depth of experience to help our clients address all of the issues they face in this difficult financial environment." The group brings together diverse experience within the firm to address issues such as capital formation, bankruptcy and insolvency matters, managing liquidity, mergers and asset purchases, and regulatory issues, including opportunities presented by the recently enacted Emergency Economic Stabilization Act of 2008 and the related Troubled Asset Relief Program. "For more than 25 years, our firm has been a market leader in mortgage finance, representing clients in thousands of mortgage loan securitizations transactions and sales of performing and nonperforming mortgage pools and other financial assets," said Kevin Buckley, partner and a leader on the new team. "Our group brings a broad perspective and a keen understanding of the pricing, structuring, and regulatory capital considerations required to represent our clients in these matters." The firm also has a strong internal and governmental investigations practice, which includes professionals with experience at the Federal Bureau of Investigations and other agencies, and a privacy and data security practice that has been ranked among the top in the United States and Europe. Hunton & Williams can address the full range of challenges its clients face in these turbulent financial markets. In addition, Hunton & Williams has created a Financial Industry Recovery Resource Center website where clients and visitors will find client alerts and other reference materials, text and analysis of relevant U.S. legislation, and breaking news related to industry and governmental developments. The website is -- http://www.huntonfinancialindustryrecovery.com/-- . About Hunton & Williams LLP Hunton & Williams LLP -- http://www.hunton.com/-- provides legal services to corporations, financial institutions, governments and individuals, well as to a broad array of other entities. Since its establishment more than a century ago, Hunton & Williams has grown to more than 1,000 lawyers serving clients in 100 countries from 19 offices around the world. While its practice has an industry focus on energy, financial services and life sciences, the depth and breadth of its experience extends to more than 100 separate practice areas, including bankruptcy and creditors rights, commercial litigation, corporate transactions and securities law, intellectual property, international and government relations, regulatory law, products liability, and privacy and information management. * IASB & FASB Say Suspending Mark-To-Market Accounting a Mistake ----------------------------------------------------------------- Suspending mark-to-market accounting and reverting to some other system would be a mistake, two top accounting rulemakers said on Wednesday, Reuters' Emily Chasan reported. The accounting rulemakers say that masking the impact of changes in their asset values may have worse consequences. Lawmakers have blamed mark-to-market, or fair value accounting, for the worsening financial crisis. This is because when troubled banks and financial institutions sell securities at prices well below their book values, other institutions are forced to write-down the value of their own comparable securities, eroding confidence in the financial markets, and making it harder for these firms to to raise capital. But supporters of mark-to-market accounting say that while the system may be imperfect, fair value accounting prevents financial institutions from arbitrarily setting asset values, sometimes at prices well over what similar assets would fetch in an open market. "It's a lousy system, but it's less lousy than any other system we've had so far," Tom Jones, vice chairman of the London-based International Accounting Standards Board, said of fair value accounting. "When there isn't an illiquid market I think fair value does capture reality," Mr. Jones said in comments to a New York Society of Securities analysts on Wednesday. "I can't think of any other system that does." Financial Accounting Standards Board Chairman Robert Herz, who agreed with Mr. Jones, said "fair value should not be so easily dismissed." "The idea that a down market's assets should be written down has been a fundamental concept in accounting for a century or more," Mr. Herz said. The report says that earlier this month the U.S. Securities and Exchange Commission and FASB "jointly agreed that banks could rely more on internal estimates, rather than fire-sale prices, to value assets trading in illiquid markets." A few days later the IASB also said European financial institutions "could take a less damaging option for valuing assets they intend to hold rather than sell." But bankers and politicians are pushing for further changes. As part of the $700 billion bailout bill, they have authorized the U.S. Securities and Exchange Commission to study fair value accounting and to suspend the rules if it so chooses. The American Bankers Association has also asked the SEC to override FASB's rules on mark-to-market accounting. * McDonald Hopkins Adds Owen P. Quinn as Litigation Associate ------------------------------------------------------------- Owen P. Quinn has joined the Chicago, Illinois office of McDonald Hopkins LLC as an associate in the firm's Litigation Department. Mr. Quinn focuses his practice in comprehensive commercial and construction litigation. He has counseled clients in matters involving contract disputes, fraud, civil conspiracy, restrictive covenants, improper solicitation, and misappropriation of trade secrets, and product and premises liability. His construction litigation experience includes representing general contractors, subcontractors and suppliers in litigation matters involving defective and incomplete work, construction delays, payment disputes, and mechanic liens. Mr. Quinn also represented decedents and individual estates concerning will contests, heirship determination and guardian appointments. Mr. Quinn graduated from the University of Illinois-Champaign- Urbana in 1998 with a Bachelor of Arts degree and received his J.D. in 2001 from the University Of Illinois School Of Law. Mr. Quinn can be reached at 312.642.4967 or oquinn@mcdonaldhopkins.com. About McDonald Hopkins LLC McDonald Hopkins LLC -- http://www.mcdonaldhopkins.com/-- is a full-service firm focused on business law, litigation, restructuring, and estate planning. The company has more than 130 lawyers in Cleveland, Chicago, Columbus, Detroit, and West Palm Beach. * Resilience Capital Partners Promotes Ki Mixon to Principal ------------------------------------------------------------ Private equity firm Resilience Capital Partners promoted Ki Mixon to Principal. As Principal, Mr. Mixon is responsible for both the sourcing and execution of deals. In addition, Mr. Mixon serves as a Board member for four Resilience portfolio companies: Penda Corporation; ASC Signal Corporation; ChemDesign Products; and Midwest Machining Solutions. "Ki has proven to be adept at all aspects of the transaction process: due diligence; negotiating; raising of debt financing, as well as working with management on an ongoing basis. We welcome him into the firm's leadership. " explained Steve Rosen, Co-CEO and Managing Partner. Mr. Mixon joined Resilience in 2001 after serving in the Corporate Restructuring Group at McDonald Investments (KeyBank). At McDonald he was involved with a variety of assignments including chapter 11 and out-of-court restructurings, and troubled company advisory work on behalf of both the debtors and creditors. Mr. Mixon earned a MBA from Case Western Reserve University and a bachelor's degree from Wittenberg University. About Resilience Capital Partners Headquartered in Cleveland, Ohio, Resilience Capital Partners -- http://www.resiliencecapital.com/-- specializes in investing in lower middle market companies within a broad range of industries. Resilience's value oriented investment strategy is to acquire companies with solid business prospects in a wide variety of special situations including underperformers, corporate divestitures, turnarounds, and orphan public companies. Since its inception in 2001, Resilience has acquired 16 companies with total revenue in excess of $1.5 billion. * BOND PRICING: For the Week of Oct. 19 - Oct. 27, 2008 ------------------------------------------------------- Issuer Coupon Maturity Bid Price ------ ------ -------- --------- AIRTRAN HOLDINGS 7.000% 7/1/2023 51.25 ABITIBI-CONS FIN 7.875% 8/1/2009 75.00 BOWATER INC 9.000% 8/1/2009 55.00 BOWATER INC 6.500% 6/15/2013 27.50 ANTIGENICS 5.250% 2/1/2025 30.50 ATHEROGENICS INC 4.500% 9/1/2008 11.50 ATHEROGENICS INC 4.500% 3/1/2011 8.50 ATHEROGENICS INC 1.500% 2/1/2012 9.00 ASSURED GUARANTY 6.400% 12/15/2066 10.00 AHERN RENTALS 9.250% 8/15/2013 36.44 AMER GENL FIN 3.750% 11/15/2008 75.36 AMER GENL FIN 3.000% 12/15/2008 81.75 AMER GENL FIN 3.750% 12/15/2008 92.25 AMER GENL FIN 3.750% 12/15/2008 95.06 AMER GENL FIN 3.875% 12/15/2008 92.00 AMER GENL FIN 4.300% 3/15/2009 77.50 INTL LEASE FIN 6.375% 3/15/2009 90.74 AMER GENL FIN 3.800% 4/15/2009 72.00 AMER GENL FIN 3.350% 5/15/2009 36.00 AMER GENL FIN 4.625% 5/15/2009 67.00 INTL LEASE FIN 5.600% 5/15/2009 70.00 AMER GENL FIN 4.000% 6/15/2009 53.13 AMER GENL FIN 4.350% 6/15/2009 44.89 INTL LEASE FIN 4.750% 7/1/2009 77.04 AMER GENL FIN 3.100% 7/15/2009 44.00 AMER GENL FIN 4.400% 7/15/2009 41.00 AMER GENL FIN 4.500% 7/15/2009 80.00 AMER GENL FIN 4.000% 8/15/2009 63.00 AMER GENL FIN 4.200% 8/15/2009 45.00 INTL LEASE FIN 5.250% 8/15/2009 46.03 AMER GENL FIN 5.375% 9/1/2009 62.80 AMER GENL FIN 3.850% 9/15/2009 50.00 AMER GENL FIN 4.300% 9/15/2009 50.03 AMER GENL FIN 4.500% 9/15/2009 59.50 AMER GENL FIN 5.000% 9/15/2009 64.05 AMER GENL FIN 5.150% 9/15/2009 60.50 AMER GENL FIN 5.450% 9/15/2009 55.92 AMER GENL FIN 3.875% 10/1/2009 52.00 AMER GENL FIN 4.550% 10/15/2009 38.85 AMER GENL FIN 3.875% 11/15/2009 38.96 AMER GENL FIN 4.000% 11/15/2009 60.07 AMER GENL FIN 4.000% 11/15/2009 65.08 AMER GENL FIN 4.000% 11/15/2009 65.35 AMER GENL FIN 4.200% 11/15/2009 34.50 AMER GENL FIN 4.600% 11/15/2009 45.00 INTL LEASE FIN 4.950% 11/15/2009 70.75 AMER GENL FIN 4.000% 12/15/2009 52.21 INTL LEASE FIN 5.050% 3/15/2010 40.02 INTL LEASE FIN 5.150% 3/15/2010 60.26 AMER GENL FIN 4.750% 4/15/2010 47.50 AMER GENL FIN 4.050% 5/15/2010 26.10 AMER GENL FIN 4.100% 5/15/2010 40.00 AMER GENL FIN 4.875% 5/15/2010 36.00 AMER GENL FIN 3.300% 6/15/2010 50.78 AMER GENL FIN 4.300% 6/15/2010 55.00 AMER GENL FIN 4.750% 6/15/2010 52.70 AMER GENL FIN 4.875% 6/15/2010 30.08 AMER GENL FIN 5.200% 6/15/2010 51.50 AMER GENL FIN 4.300% 7/15/2010 42.88 AMER GENL FIN 5.350% 7/15/2010 36.50 AMER GENL FIN 6.250% 7/15/2010 50.15 AMER GENL CORP 7.500% 8/11/2010 67.50 AMER GENL FIN 4.500% 8/15/2010 38.25 AMER GENL FIN 4.750% 8/15/2010 30.00 AMER GENL FIN 8.000% 8/15/2010 55.00 INTL LEASE FIN 4.875% 9/1/2010 59.70 AMER GENL FIN 4.600% 9/15/2010 44.06 AMER GENL FIN 5.000% 9/15/2010 35.00 AMER GENL FIN 5.200% 9/15/2010 26.01 AMER GENL FIN 4.250% 10/15/2010 50.54 AMER GENL FIN 4.600% 10/15/2010 34.02 AMER GENL FIN 5.000% 10/15/2010 33.00 AMER GENL FIN 4.150% 11/15/2010 29.13 AMER GENL FIN 5.000% 11/15/2010 35.31 AMER GENL FIN 5.000% 11/15/2010 49.50 AMER GENL FIN 4.400% 12/15/2010 45.25 AMER GENL FIN 5.000% 12/15/2010 48.07 AMER GENL FIN 5.000% 12/15/2010 30.25 AMER GENL FIN 5.000% 12/15/2010 21.00 AMER GENL FIN 5.500% 12/15/2010 33.29 AMER GENL FIN 5.000% 1/15/2011 25.01 AMER GENL FIN 4.000% 3/15/2011 31.13 AMER GENL FIN 5.000% 3/15/2011 34.00 AMER GENL FIN 5.250% 4/15/2011 25.01 AMER GENL FIN 5.500% 4/15/2011 35.31 AMER GENL FIN 5.200% 5/15/2011 44.88 AMER GENL FIN 5.000% 6/15/2011 44.00 AMER GENL FIN 5.600% 6/15/2011 40.00 INTL LEASE FIN 5.650% 6/15/2011 35.00 AMER GENL FIN 6.000% 7/15/2011 25.01 AMER GENL FIN 6.250% 7/15/2011 43.00 AMER GENL FIN 6.250% 7/15/2011 12.05 AMER GENL FIN 8.150% 8/15/2011 20.10 AMER GENL FIN 5.625% 8/17/2011 36.56 AMER GENL FIN 4.300% 10/15/2011 21.40 AMER INTL GROUP 5.375% 10/18/2011 42.50 AMER GENL FIN 5.200% 12/15/2011 38.84 AMER GENL FIN 4.625% 3/15/2012 30.60 AMER GENL FIN 4.100% 7/15/2012 30.26 AMER GENL FIN 4.875% 7/15/2012 40.50 AMER GENL FIN 5.000% 8/15/2012 19.00 AMER GENL FIN 5.850% 9/15/2012 25.05 AMER GENL FIN 5.375% 10/1/2012 30.02 AMER GENL FIN 5.250% 12/15/2012 31.25 AMER GENL FIN 4.250% 3/15/2013 18.00 AMER GENL FIN 6.000% 4/15/2013 25.26 AMER GENL FIN 6.000% 4/15/2013 11.20 AMER GENL FIN 5.400% 5/15/2013 26.00 AMER GENL FIN 5.750% 5/15/2013 23.89 AMER GENL FIN 5.850% 6/1/2013 33.53 AMER GENL FIN 5.500% 5/15/2014 26.26 AMER GENL FIN 5.500% 6/15/2014 15.20 AMER GENL FIN 6.000% 10/15/2014 0.50 AMER GENL FIN 6.000% 12/15/2014 24.00 AMER GENL FIN 7.500% 7/15/2015 25.25 AMER INTL GROUP 5.750% 3/15/2067 9.47 AMES TRUE TEMPER 10.000% 7/15/2012 42.00 AMBASSADORS INTL 3.750% 4/15/2027 28.50 AMR CORP 4.500% 2/15/2024 93.00 AMER MEDIA OPER 10.250% 5/1/2009 68.50 AMER MEDIA OPER 8.875% 1/15/2011 52.50 ARVIN INDUSTRIES 7.125% 3/15/2009 88.78 METALDYNE CORP 11.000% 6/15/2012 6.00 METALDYNE CORP 10.000% 11/1/2013 14.00 AMER AXLE & MFG 5.250% 2/11/2014 29.00 BANK NEW ENGLAND 8.750% 4/1/1999 5.75 BANK NEW ENGLAND 9.875% 9/15/1999 3.00 BURLINGTON COAT 11.125% 4/15/2014 39.25 BANKUNITED CAP 3.125% 3/1/2034 15.29 BON-TON DEPT STR 10.250% 3/15/2014 14.50 BRODER BROS CO 11.250% 10/15/2010 39.25 COMPUCREDIT 3.625% 5/30/2025 21.25 CHANCELLOR MEDIA 8.000% 11/1/2008 97.00 CLEAR CHANNEL 6.250% 3/15/2011 42.55 CLEAR CHANNEL 5.000% 3/15/2012 56.50 CLEAR CHANNEL 5.750% 1/15/2013 25.00 CLEAR CHANNEL 5.500% 9/15/2014 21.50 CELL GENESYS INC 3.125% 11/1/2011 39.75 CHARTER COMM HLD 10.000% 4/1/2009 88.84 CHARTER COMM HLD 11.125% 1/15/2011 49.68 CHARTER COMM HLD 10.000% 5/15/2011 54.00 CCH I LLC 9.920% 4/1/2014 27.00 CCH I LLC 10.000% 5/15/2014 24.13 CHARTER COMM INC 6.500% 10/1/2027 18.04 CIT GROUP INC 5.125% 11/15/2008 93.50 CIT GROUP INC 5.000% 11/24/2008 96.00 CIT GROUP INC 3.375% 4/1/2009 88.02 CIT GROUP INC 6.250% 9/15/2009 63.00 CIT GROUP INC 6.875% 11/1/2009 75.00 CIT GROUP INC 4.125% 11/3/2009 69.01 CIT GROUP INC 4.250% 2/1/2010 70.00 CIT GROUP INC 5.150% 3/15/2010 56.90 CIT GROUP INC 6.500% 3/15/2010 64.88 CIT GROUP INC 5.250% 9/15/2010 55.00 CIT GROUP INC 5.200% 11/3/2010 56.14 CIT GROUP INC 5.250% 11/15/2010 40.10 CIT GROUP INC 6.750% 3/15/2011 43.50 CIT GROUP INC 5.200% 9/15/2011 42.02 CIT GROUP INC 5.250% 11/15/2011 39.01 CIT GROUP INC 7.250% 3/15/2012 34.00 CIT GROUP INC 7.250% 3/15/2013 32.90 CIT GROUP INC 7.750% 3/15/2013 35.02 CIT GROUP INC 7.900% 3/15/2013 35.50 CLAIRE'S STORES 9.250% 6/1/2015 30.50 CLAIRE'S STORES 10.500% 6/1/2017 24.00 CMP SUSQUEHANNA 9.875% 5/15/2014 27.00 NEW PLAN EXCEL 7.400% 9/15/2009 50.00 NEW PLAN REALTY 7.650% 11/2/2026 16.00 NEW PLAN REALTY 7.680% 11/2/2026 20.00 CONSTAR INTL 11.000% 12/1/2012 14.40 CONEXANT SYSTEMS 4.000% 3/1/2026 50.00 CARAUSTAR INDS 7.375% 6/1/2009 55.00 CELL THERAPEUTIC 5.750% 12/15/2011 1.00 DELTA MILLS INC 9.625% 9/1/2007 9.00 DOLE FOODS CO 8.625% 5/1/2009 87.38 DELPHI CORP 6.500% 8/15/2013 5.38 DAYTON SUPERIOR 13.000% 6/15/2009 55.75 FORD MOTOR CRED 6.375% 11/5/2008 98.54 FORD MOTOR CRED 5.000% 11/20/2008 87.50 FORD MOTOR CRED 5.100% 12/22/2008 90.00 FORD MOTOR CRED 5.800% 1/12/2009 92.23 FORD MOTOR CRED 4.250% 1/20/2009 78.00 FORD MOTOR CRED 4.400% 1/20/2009 89.25 FORD MOTOR CRED 4.600% 1/20/2009 83.00 FORD MOTOR CRED 4.350% 2/20/2009 87.62 FORD MOTOR CRED 4.350% 2/20/2009 87.34 FORD MOTOR CRED 4.500% 2/20/2009 84.26 FORD MOTOR CRED 4.300% 3/20/2009 80.50 FORD MOTOR CRED 4.500% 3/20/2009 75.28 FORD MOTOR CRED 4.500% 3/20/2009 79.99 FORD MOTOR CRED 4.450% 4/20/2009 74.41 FORD MOTOR CRED 4.650% 4/20/2009 75.00 FORD MOTOR CRED 4.700% 4/20/2009 81.19 FORD MOTOR CRED 4.900% 5/20/2009 73.31 FORD MOTOR CRED 5.350% 5/20/2009 74.74 FORD MOTOR CRED 5.250% 6/22/2009 70.13 FORD MOTOR CRED 5.400% 6/22/2009 68.92 FORD MOTOR CRED 5.500% 6/22/2009 70.57 FORD MOTOR CRED 5.500% 6/22/2009 67.50 FORD MOTOR CRED 4.800% 7/20/2009 70.00 FORD MOTOR CRED 5.100% 7/20/2009 59.66 FORD MOTOR CRED 5.200% 7/20/2009 77.13 FORD MOTOR CRED 5.000% 8/20/2009 57.00 FORD MOTOR CRED 5.000% 8/20/2009 61.36 FORD MOTOR CRED 4.900% 9/21/2009 62.19 FORD MOTOR CRED 5.000% 9/21/2009 59.43 FORD MOTOR CRED 5.000% 9/21/2009 57.22 FORD MOTOR CRED 5.050% 9/21/2009 60.27 FORD MOTOR CRED 4.900% 10/20/2009 62.80 FORD MOTOR CRED 4.900% 10/20/2009 65.30 FORD MOTOR CRED 4.950% 10/20/2009 54.10 FORD MOTOR CRED 5.000% 10/20/2009 59.05 FORD MOTOR CRED 7.375% 10/28/2009 71.21 FORD MOTOR CRED 5.100% 11/20/2009 64.58 FORD MOTOR CRED 5.150% 11/20/2009 60.00 FORD MOTOR CRED 5.150% 11/20/2009 67.87 FORD MOTOR CRED 5.150% 11/20/2009 52.00 FORD MOTOR CRED 5.250% 12/21/2009 45.00 FORD MOTOR CRED 5.250% 12/21/2009 63.98 FORD MOTOR CRED 5.350% 12/21/2009 66.32 FORD MOTOR CRED 5.400% 12/21/2009 45.50 FORD MOTOR CRED 5.700% 1/15/2010 64.47 FORD MOTOR CRED 5.250% 1/20/2010 51.95 FORD MOTOR CRED 5.500% 1/20/2010 52.00 FORD MOTOR CRED 5.500% 2/22/2010 55.00 FORD MOTOR CRED 5.500% 2/22/2010 51.23 FORD MOTOR CRED 5.500% 2/22/2010 50.00 FORD MOTOR CRED 6.000% 2/22/2010 51.60 FORD MOTOR CRED 5.700% 3/22/2010 57.19 FORD MOTOR CRED 5.750% 3/22/2010 42.08 FORD MOTOR CRED 6.300% 3/22/2010 49.45 FORD MOTOR CRED 7.250% 3/22/2010 36.68 FORD MOTOR CRED 6.950% 4/20/2010 44.50 FORD MOTOR CRED 5.850% 5/20/2010 31.21 FORD MOTOR CRED 5.950% 5/20/2010 60.06 FORD MOTOR CRED 6.300% 5/20/2010 56.49 FORD MOTOR CRED 7.875% 6/15/2010 55.00 FORD MOTOR CRED 5.550% 6/21/2010 47.52 FORD MOTOR CRED 5.750% 6/21/2010 42.17 FORD MOTOR CRED 5.850% 6/21/2010 48.25 FORD MOTOR CRED 6.000% 6/21/2010 48.90 FORD MOTOR CRED 5.850% 7/20/2010 35.75 FORD MOTOR CRED 6.050% 7/20/2010 55.11 FORD MOTOR CRED 6.150% 7/20/2010 43.34 FORD MOTOR CRED 7.000% 7/20/2010 46.50 FORD MOTOR CRED 6.400% 8/20/2010 39.73 FORD MOTOR CRED 6.500% 8/20/2010 45.15 FORD MOTOR CRED 6.550% 8/20/2010 42.00 FORD MOTOR CRED 7.150% 8/20/2010 41.65 FORD MOTOR CRED 7.150% 8/20/2010 43.00 FORD MOTOR CRED 9.750% 9/15/2010 56.50 FORD MOTOR CRED 6.050% 9/20/2010 52.00 FORD MOTOR CRED 6.150% 9/20/2010 46.00 FORD MOTOR CRED 6.350% 9/20/2010 50.81 FORD MOTOR CRED 6.350% 9/20/2010 36.25 FORD MOTOR CRED 5.750% 10/20/2010 46.00 FORD MOTOR CRED 6.000% 10/20/2010 45.00 FORD MOTOR CRED 8.625% 11/1/2010 54.00 FORD MOTOR CRED 5.800% 11/22/2010 45.00 FORD MOTOR CRED 5.600% 12/20/2010 53.31 FORD MOTOR CRED 5.650% 12/20/2010 37.00 FORD MOTOR CRED 6.000% 12/20/2010 46.98 FORD MOTOR CRED 5.150% 1/20/2011 24.00 FORD MOTOR CRED 7.375% 2/1/2011 50.00 FORD MOTOR CRED 5.100% 2/22/2011 39.86 FORD MOTOR CRED 5.250% 2/22/2011 44.66 FORD MOTOR CRED 5.200% 3/21/2011 35.00 FORD MOTOR CRED 5.250% 3/21/2011 34.00 FORD MOTOR CRED 5.250% 3/21/2011 37.61 FORD MOTOR CRED 5.300% 3/21/2011 35.10 FORD MOTOR CRED 5.600% 4/20/2011 19.31 FORD MOTOR CRED 5.700% 5/20/2011 42.00 FORD MOTOR CRED 6.150% 5/20/2011 31.50 FORD MOTOR CRED 6.200% 5/20/2011 38.00 FORD MOTOR CRED 6.050% 6/20/2011 37.86 FORD MOTOR CRED 6.200% 6/20/2011 42.76 FORD MOTOR CRED 6.250% 6/20/2011 37.92 FORD MOTOR CRED 6.250% 6/20/2011 24.79 FORD MOTOR CRED 5.650% 7/20/2011 32.00 FORD MOTOR CRED 5.900% 7/20/2011 17.03 FORD MOTOR CRED 9.875% 8/10/2011 44.25 FORD MOTOR CRED 5.550% 8/22/2011 26.50 FORD MOTOR CRED 5.600% 8/22/2011 16.24 FORD MOTOR CRED 5.750% 8/22/2011 41.04 FORD MOTOR CRED 5.800% 8/22/2011 36.12 US LEASING INTL 6.000% 9/6/2011 35.17 FORD MOTOR CO 9.500% 9/15/2011 42.00 FORD MOTOR CRED 5.500% 9/20/2011 36.00 FORD MOTOR CRED 5.600% 9/20/2011 29.17 FORD MOTOR CRED 5.400% 10/20/2011 43.00 FORD MOTOR CRED 5.400% 10/20/2011 27.00 FORD MOTOR CRED 5.450% 10/20/2011 34.83 FORD MOTOR CRED 5.500% 10/20/2011 35.01 FORD MOTOR CRED 7.250% 10/25/2011 45.22 FORD MOTOR CRED 5.600% 11/21/2011 12.98 FORD MOTOR CRED 5.600% 11/21/2011 31.41 FORD MOTOR CRED 5.650% 11/21/2011 32.00 FORD MOTOR CRED 5.750% 12/20/2011 36.00 FORD MOTOR CRED 5.850% 1/20/2012 33.00 FORD MOTOR CRED 6.000% 1/20/2012 36.83 FORD MOTOR CRED 5.750% 2/21/2012 30.28 FORD MOTOR CRED 7.350% 5/15/2012 26.53 FORD MOTOR CRED 7.800% 6/1/2012 49.00 FORD MOTOR CRED 7.000% 8/15/2012 25.00 FORD MOTOR CRED 7.050% 9/20/2013 31.00 FORD MOTOR CRED 7.100% 9/20/2013 25.44 FORD MOTOR CRED 7.100% 9/20/2013 24.17 FORD MOTOR CRED 6.600% 10/21/2013 30.10 FORD MOTOR CRED 6.650% 10/21/2013 12.00 FORD MOTOR CRED 6.750% 10/21/2013 24.90 FORD MOTOR CRED 6.500% 12/20/2013 29.00 FORD MOTOR CRED 6.000% 1/21/2014 21.50 FORD MOTOR CRED 5.750% 2/20/2014 19.68 FORD MOTOR CRED 6.000% 3/20/2014 19.62 FORD MOTOR CRED 6.000% 3/20/2014 22.69 FORD MOTOR CRED 6.000% 3/20/2014 21.88 FORD MOTOR CRED 6.050% 3/20/2014 25.63 FORD MOTOR CRED 6.200% 4/21/2014 25.22 FORD MOTOR CRED 6.350% 4/21/2014 21.00 FORD MOTOR CRED 6.850% 5/20/2014 22.79 FORD MOTOR CRED 6.950% 5/20/2014 24.00 FORD MOTOR CRED 6.650% 6/20/2014 26.00 FORD MOTOR CRED 6.750% 6/20/2014 27.00 FORD MOTOR CRED 6.800% 6/20/2014 24.75 FORD MOTOR CRED 6.550% 7/21/2014 25.30 FORD MOTOR CRED 6.000% 11/20/2014 21.10 FORD MOTOR CRED 6.000% 11/20/2014 19.95 FORD MOTOR CRED 6.050% 12/22/2014 21.50 FORD MOTOR CRED 6.250% 1/20/2015 24.00 FORD MOTOR CRED 6.500% 2/20/2015 14.36 FORD MOTOR CRED 6.800% 3/20/2015 23.47 FORD MOTOR CRED 7.350% 3/20/2015 18.76 FORD MOTOR CRED 7.250% 7/20/2017 16.78 FORD HOLDINGS 9.375% 3/1/2020 25.04 FORD MOTOR CO 9.215% 9/15/2021 28.48 FORD MOTOR CO 8.875% 1/15/2022 26.50 FEDDERS NORTH AM 9.875% 3/1/2014 1.25 FLEETWOOD ENTERP 5.000% 12/15/2023 89.20 FINLAY FINE JWLY 8.375% 6/1/2012 12.73 FRONTIER AIRLINE 5.000% 12/15/2025 25.00 FIBERTOWER CORP 9.000% 11/15/2012 34.81 ROUSE COMPANY 7.200% 9/15/2012 31.00 GENERAL MOTORS 7.200% 1/15/2011 39.97 GENERAL MOTORS 9.450% 11/1/2011 36.38 GENERAL MOTORS 7.125% 7/15/2013 24.83 GENERAL MOTORS 7.700% 4/15/2016 26.00 GENERAL MOTORS 8.800% 3/1/2021 22.00 GENERAL MOTORS 9.400% 7/15/2021 22.60 GENERAL MOTORS 8.250% 7/15/2023 25.25 GMAC 4.650% 11/15/2008 95.87 GMAC 4.700% 11/15/2008 92.97 GMAC 4.750% 11/15/2008 98.50 GMAC 6.250% 11/15/2008 95.50 GMAC 6.500% 11/15/2008 98.00 GMAC 4.250% 3/15/2009 80.11 GMAC 5.625% 5/15/2009 75.50 GMAC 5.500% 6/15/2009 70.44 GMAC 6.700% 6/15/2009 72.63 GMAC 5.050% 7/15/2009 67.29 GMAC 5.100% 7/15/2009 60.95 GMAC 5.250% 7/15/2009 67.00 GMAC 5.250% 7/15/2009 66.85 GMAC 6.800% 7/15/2009 70.11 GMAC 6.850% 7/15/2009 65.94 GMAC 7.000% 7/15/2009 67.94 GMAC 5.000% 8/15/2009 44.00 GMAC 5.000% 8/15/2009 63.00 GMAC 5.100% 8/15/2009 62.43 GMAC 5.250% 8/15/2009 61.77 GMAC 5.250% 8/15/2009 63.59 GMAC 7.000% 8/15/2009 66.35 GMAC 7.125% 8/15/2009 68.70 GMAC 7.150% 8/15/2009 61.00 GMAC 7.200% 8/15/2009 59.00 GMAC 5.000% 9/15/2009 60.00 GMAC 5.000% 9/15/2009 58.82 GMAC 5.000% 9/15/2009 58.81 GMAC 5.100% 9/15/2009 64.19 GMAC 7.000% 9/15/2009 60.00 GMAC 7.000% 9/15/2009 61.16 GMAC 4.900% 10/15/2009 52.00 GMAC 4.900% 10/15/2009 51.50 GMAC 4.950% 10/15/2009 59.25 GMAC 5.000% 10/15/2009 61.19 GMAC 6.850% 10/15/2009 44.00 GMAC 7.000% 10/15/2009 47.50 GMAC 7.000% 10/15/2009 51.00 GMAC 7.050% 10/15/2009 52.00 GMAC 5.200% 11/15/2009 58.40 GMAC 5.200% 11/15/2009 62.04 GMAC 5.250% 11/15/2009 48.27 GMAC 5.250% 11/15/2009 70.87 GMAC 5.350% 11/15/2009 50.00 GMAC 6.800% 11/15/2009 65.91 GMAC 7.000% 11/15/2009 65.00 GMAC 7.000% 11/15/2009 65.00 GMAC 7.250% 11/15/2009 66.91 GMAC 5.350% 12/15/2009 39.12 GMAC 5.350% 12/15/2009 58.50 GMAC 5.400% 12/15/2009 51.52 GMAC 5.400% 12/15/2009 57.14 GMAC 7.000% 12/15/2009 58.00 GMAC 5.300% 1/15/2010 46.00 GMAC 5.500% 1/15/2010 52.00 GMAC 5.750% 1/15/2010 49.00 GMAC 6.000% 1/15/2010 35.71 GMAC 7.000% 1/15/2010 55.68 GMAC 7.250% 1/15/2010 47.00 GMAC 5.850% 2/15/2010 59.05 GMAC 6.000% 2/15/2010 52.85 GMAC 6.000% 2/15/2010 46.00 GMAC 6.050% 3/15/2010 43.21 GMAC 6.150% 3/15/2010 56.79 GMAC 6.500% 3/15/2010 48.25 GMAC 7.000% 3/15/2010 40.00 GMAC 8.050% 4/15/2010 57.29 GMAC 8.400% 4/15/2010 55.00 GMAC 8.500% 5/15/2010 51.55 GMAC 8.000% 6/15/2010 35.16 GMAC 8.000% 6/15/2010 59.03 GMAC 8.000% 6/15/2010 59.20 GMAC 8.000% 7/15/2010 43.25 GMAC 8.000% 7/15/2010 34.42 GMAC 8.200% 7/15/2010 38.43 GMAC 8.000% 9/15/2010 57.50 GMAC 8.500% 10/15/2010 35.00 GMAC 8.500% 10/15/2010 40.50 GMAC LLC 6.000% 4/1/2011 44.50 GMAC 6.750% 9/15/2011 45.83 GMAC 6.625% 10/15/2011 33.00 GMAC 6.750% 10/15/2011 26.75 GMAC 6.750% 10/15/2011 28.73 GMAC 7.000% 10/15/2011 31.00 GMAC LLC 6.000% 12/15/2011 45.50 GMAC LLC 6.625% 5/15/2012 43.00 GMAC 6.500% 7/15/2012 32.82 GMAC LLC 6.750% 7/15/2012 14.15 GMAC 7.125% 8/15/2012 26.12 GMAC 7.250% 8/15/2012 26.64 GMAC 6.875% 8/28/2012 40.00 GMAC 6.750% 9/15/2012 32.00 GMAC 6.750% 9/15/2012 33.00 GMAC 7.000% 9/15/2012 37.96 GMAC 7.100% 9/15/2012 30.23 GMAC 6.750% 10/15/2012 22.74 GMAC 6.875% 10/15/2012 33.00 GMAC 7.000% 10/15/2012 26.35 GMAC 7.500% 10/15/2012 16.75 GMAC 7.750% 10/15/2012 15.65 GMAC 7.000% 11/15/2012 31.13 GMAC 7.150% 11/15/2012 30.00 GMAC 7.625% 11/15/2012 17.20 GMAC 7.875% 11/15/2012 26.50 GMAC 7.000% 12/15/2012 30.00 GMAC 7.125% 12/15/2012 29.00 GMAC 7.250% 12/15/2012 26.75 GMAC 7.250% 12/15/2012 34.00 GMAC 7.000% 1/15/2013 26.50 GMAC 7.100% 1/15/2013 29.10 GMAC 7.100% 1/15/2013 27.49 GMAC 6.450% 2/15/2013 30.00 GMAC 6.500% 2/15/2013 20.10 GMAC 6.800% 2/15/2013 21.00 GMAC 6.400% 3/15/2013 30.00 GMAC 6.500% 3/15/2013 24.24 GMAC 6.500% 4/15/2013 30.00 GMAC 6.750% 4/15/2013 24.15 GMAC 6.750% 4/15/2013 31.13 GMAC 6.800% 4/15/2013 22.50 GMAC 6.875% 4/15/2013 30.00 GMAC 5.850% 5/15/2013 25.00 GMAC 6.100% 5/15/2013 25.00 GMAC 6.350% 5/15/2013 22.50 GMAC 6.500% 5/15/2013 22.00 GMAC 5.700% 6/15/2013 10.00 GMAC 5.850% 6/15/2013 23.75 GMAC 5.850% 6/15/2013 26.00 GMAC 6.000% 7/15/2013 19.50 GMAC 6.250% 7/15/2013 17.50 GMAC 5.700% 10/15/2013 25.00 GMAC 6.250% 10/15/2013 26.00 GMAC 6.300% 10/15/2013 19.00 GMAC 6.000% 11/15/2013 27.95 GMAC 6.150% 11/15/2013 30.00 GMAC 6.200% 11/15/2013 26.00 GMAC 6.250% 11/15/2013 23.00 GMAC 5.700% 12/15/2013 20.10 GMAC 5.900% 12/15/2013 21.88 GMAC 5.250% 1/15/2014 21.00 GMAC 5.750% 1/15/2014 21.00 GMAC 6.700% 5/15/2014 27.82 GMAC 6.700% 6/15/2014 14.13 GMAC 6.750% 6/15/2014 23.88 GMAC 9.000% 7/15/2015 25.13 GMAC 8.000% 8/15/2015 16.00 GMAC 8.400% 8/15/2015 26.73 GMAC 6.750% 8/15/2016 20.22 GMAC 7.500% 11/15/2016 21.50 GMAC 7.000% 6/15/2017 20.33 GMAC 7.000% 7/15/2017 22.00 GMAC 7.250% 9/15/2017 20.50 GMAC 8.000% 10/15/2017 14.75 GMAC 8.000% 11/15/2017 21.86 GMAC 7.400% 12/15/2017 21.00 GMAC 7.300% 1/15/2018 19.38 GMAC 7.000% 2/15/2018 21.00 GMAC 7.000% 2/15/2018 10.50 GMAC 6.750% 3/15/2018 20.81 GMAC 6.700% 6/15/2018 20.20 GMAC 6.900% 7/15/2018 19.00 GMAC 6.750% 9/15/2018 18.13 GMAC 6.800% 9/15/2018 14.80 GMAC 7.250% 9/15/2018 19.50 GMAC 6.750% 10/15/2018 18.08 GMAC 6.500% 12/15/2018 16.00 GMAC 5.900% 1/15/2019 16.00 GMAC 6.000% 4/15/2019 17.40 GMAC 7.150% 3/15/2025 19.00 GENWORTH GLOBAL 6.050% 4/15/2033 14.75 GLOBALSTAR INC 5.750% 4/1/2028 16.00 REALOGY CORP 10.500% 4/15/2014 26.03 REALOGY CORP 12.375% 4/15/2015 20.00 HERBST GAMING 8.125% 6/1/2012 6.00 HERBST GAMING 7.000% 11/15/2014 5.00 PARK PLACE ENT 7.875% 3/15/2010 60.13 HARRAHS OPER CO 5.500% 7/1/2010 49.83 PARK PLACE ENT 8.125% 5/15/2011 39.50 HARRAHS OPER CO 5.375% 12/15/2013 22.00 HARRAHS OPER CO 5.625% 6/1/2015 18.00 HARRAHS OPER CO 6.500% 6/1/2016 18.85 HARRAHS OPER CO 5.750% 10/1/2017 15.63 HINES NURSERIES 10.250% 10/1/2011 12.00 K HOVNANIAN ENTR 6.000% 1/15/2010 70.25 HOUSEHOLD FIN CO 6.500% 11/15/2008 99.70 HOUSEHOLD FIN CO 4.125% 12/15/2008 99.80 HAWAIIAN TELCOM 9.750% 5/1/2013 16.05 HAWAIIAN TELCOM 12.500% 5/1/2015 5.00 BORDEN INC 8.375% 4/15/2016 22.63 IDEARC INC 8.000% 11/15/2016 18.75 INN OF THE MOUNT 12.000% 11/15/2010 45.50 KEMET CORP 2.250% 11/15/2026 28.00 KIMBALL HILL INC 10.500% 12/15/2012 2.55 KELLWOOD CO 7.875% 7/15/2009 50.10 LITHIA MOTORS 2.875% 5/1/2014 81.00 LAZYDAYS RV 11.750% 5/15/2012 38.00 US AIRWAYS GROUP 7.000% 9/30/2020 59.00 LEAR CORP 8.500% 12/1/2013 36.00 LEHMAN BROS HLDG 4.000% 8/3/2009 10.00 LEHMAN BROS HLDG 7.200% 8/15/2009 8.50 LEHMAN BROS HLDG 12.120% 9/11/2009 8.63 LEHMAN BROS HLDG 7.875% 11/1/2009 10.00 LEHMAN BROS HLDG 3.950% 11/10/2009 10.50 LEHMAN BROS HLDG 4.250% 1/27/2010 11.50 LEHMAN BROS HLDG 4.500% 7/26/2010 9.00 LEHMAN BROS HLDG 7.875% 8/15/2010 8.75 LEHMAN BROS HLDG 4.375% 11/30/2010 9.25 LEHMAN BROS HLDG 5.000% 1/14/2011 9.00 LEHMAN BROS HLDG 6.000% 4/1/2011 12.00 LEHMAN BROS HLDG 5.750% 4/25/2011 10.00 LEHMAN BROS HLDG 5.750% 7/18/2011 9.50 LEHMAN BROS HLDG 4.500% 8/3/2011 7.00 LEHMAN BROS HLDG 6.625% 1/18/2012 10.50 LEHMAN BROS HLDG 5.250% 2/6/2012 9.50 LEHMAN BROS HLDG 0.250% 6/29/2012 8.63 LEHMAN BROS HLDG 6.000% 7/19/2012 10.88 LEHMAN BROS HLDG 5.000% 1/22/2013 7.06 LEHMAN BROS HLDG 5.625% 1/24/2013 11.38 LEHMAN BROS HLDG 5.100% 1/28/2013 7.00 LEHMAN BROS HLDG 5.000% 2/11/2013 5.50 LEHMAN BROS HLDG 4.800% 2/27/2013 8.50 LEHMAN BROS HLDG 4.700% 3/6/2013 7.00 LEHMAN BROS HLDG 5.000% 3/27/2013 6.89 LEHMAN BROS HLDG 5.750% 5/17/2013 10.00 LEHMAN BROS HLDG 2.000% 8/1/2013 8.63 LEHMAN BROS HLDG 5.250% 1/30/2014 20.00 LEHMAN BROS HLDG 4.800% 3/13/2014 9.50 LEHMAN BROS HLDG 5.000% 8/3/2014 8.25 LEHMAN BROS HLDG 6.200% 9/26/2014 11.25 LEHMAN BROS HLDG 5.150% 2/4/2015 7.06 LEHMAN BROS HLDG 5.250% 2/11/2015 7.06 LEHMAN BROS HLDG 8.800% 3/1/2015 10.25 LEHMAN BROS HLDG 8.500% 8/1/2015 10.81 LEHMAN BROS HLDG 5.000% 8/5/2015 9.29 LEHMAN BROS HLDG 5.000% 12/18/2015 7.06 LEHMAN BROS HLDG 5.500% 4/4/2016 10.00 LEHMAN BROS HLDG 5.750% 1/3/2017 0.05 LEHMAN BROS HLDG 8.920% 2/16/2017 9.50 LEHMAN BROS HLDG 6.500% 7/19/2017 0.01 LEHMAN BROS HLDG 11.000% 10/25/2017 10.00 LEHMAN BROS HLDG 5.875% 11/15/2017 9.50 LEHMAN BROS HLDG 6.750% 12/28/2017 0.50 LEHMAN BROS HLDG 5.600% 1/22/2018 8.00 LEHMAN BROS HLDG 5.700% 1/28/2018 7.50 LEHMAN BROS HLDG 5.500% 2/4/2018 8.63 LEHMAN BROS HLDG 5.550% 2/11/2018 3.00 LEHMAN BROS HLDG 5.500% 2/19/2018 6.50 LEHMAN BROS HLDG 5.350% 2/25/2018 3.50 LEHMAN BROS HLDG 6.875% 5/2/2018 11.25 LEHMAN BROS HLDG 5.500% 11/4/2018 7.00 LEHMAN BROS HLDG 8.050% 1/15/2019 8.63 LEHMAN BROS HLDG 4.000% 4/16/2019 6.88 LEHMAN BROS HLDG 6.000% 1/22/2020 6.17 LEHMAN BROS HLDG 6.000% 2/12/2020 6.10 LEHMAN BROS HLDG 5.100% 2/15/2020 4.13 LEHMAN BROS HLDG 5.500% 2/27/2020 2.50 LEHMAN BROS HLDG 5.400% 3/6/2020 8.63 LEHMAN BROS HLDG 5.250% 3/8/2020 2.60 LEHMAN BROS HLDG 5.350% 3/13/2020 13.06 LEHMAN BROS HLDG 5.400% 3/20/2020 9.50 LEHMAN BROS HLDG 5.200% 5/13/2020 4.00 LEHMAN BROS HLDG 5.800% 9/3/2020 3.00 LEHMAN BROS HLDG 6.000% 1/29/2021 3.50 LEHMAN BROS HLDG 6.250% 2/5/2021 5.00 LEHMAN BROS HLDG 8.500% 6/15/2022 6.38 LEHMAN BROS HLDG 6.750% 7/1/2022 7.00 LEHMAN BROS HLDG 6.600% 10/3/2022 6.41 LEHMAN BROS HLDG 6.400% 10/11/2022 9.50 LEHMAN BROS HLDG 9.000% 12/28/2022 8.63 LEHMAN BROS HLDG 9.500% 1/30/2023 8.75 LEHMAN BROS HLDG 6.250% 2/22/2023 6.75 LEHMAN BROS HLDG 9.500% 2/27/2023 7.00 LEHMAN BROS HLDG 6.500% 2/28/2023 9.50 LEHMAN BROS HLDG 6.500% 3/6/2023 9.00 LEHMAN BROS HLDG 10.000% 3/13/2023 8.63 LEHMAN BROS HLDG 5.500% 3/14/2023 6.25 LEHMAN BROS HLDG 8.000% 3/17/2023 8.63 LEHMAN BROS HLDG 5.750% 3/27/2023 5.00 LEHMAN BROS HLDG 5.500% 4/8/2023 5.50 LEHMAN BROS HLDG 5.500% 4/15/2023 1.26 LEHMAN BROS HLDG 5.500% 4/23/2023 5.06 LEHMAN BROS HLDG 5.250% 5/20/2023 6.00 LEHMAN BROS HLDG 5.000% 5/30/2023 3.26 LEHMAN BROS HLDG 5.000% 6/10/2023 6.00 LEHMAN BROS HLDG 5.000% 6/17/2023 6.00 LEHMAN BROS HLDG 4.800% 6/24/2023 6.00 LEHMAN BROS HLDG 5.500% 8/5/2023 4.41 LEHMAN BROS HLDG 6.100% 8/12/2023 8.40 LEHMAN BROS HLDG 5.750% 9/16/2023 8.56 LEHMAN BROS HLDG 5.600% 9/23/2023 6.00 LEHMAN BROS HLDG 5.500% 10/7/2023 7.50 LEHMAN BROS HLDG 5.750% 10/15/2023 9.50 LEHMAN BROS HLDG 5.750% 10/21/2023 5.00 LEHMAN BROS HLDG 5.750% 11/12/2023 8.06 LEHMAN BROS HLDG 5.750% 11/25/2023 10.00 LEHMAN BROS HLDG 5.450% 3/15/2025 7.00 LEHMAN BROS INC 7.500% 8/1/2026 10.50 LEHMAN BROS HLDG 6.200% 6/15/2027 8.10 LEHMAN BROS HLDG 6.625% 7/27/2027 5.00 LEHMAN BROS HLDG 6.500% 9/20/2027 7.00 LEHMAN BROS HLDG 7.000% 9/27/2027 10.00 LEHMAN BROS HLDG 6.500% 10/18/2027 3.00 LEHMAN BROS HLDG 6.500% 10/25/2027 6.00 LEHMAN BROS HLDG 11.000% 3/17/2028 8.63 LEHMAN BROS HLDG 6.000% 10/23/2028 3.26 LEHMAN BROS HLDG 6.000% 11/18/2028 5.90 LEHMAN BROS HLDG 5.750% 12/16/2028 2.13 LEHMAN BROS HLDG 5.750% 12/23/2028 6.00 LEHMAN BROS HLDG 5.500% 1/27/2029 7.06 LEHMAN BROS HLDG 5.500% 2/3/2029 5.00 LEHMAN BROS HLDG 5.700% 2/10/2029 6.00 LEHMAN BROS HLDG 5.600% 2/17/2029 7.50 LEHMAN BROS HLDG 5.600% 2/24/2029 5.00 LEHMAN BROS HLDG 5.600% 3/2/2029 7.90 LEHMAN BROS HLDG 5.550% 3/9/2029 1.02 LEHMAN BROS HLDG 5.400% 3/30/2029 7.06 LEHMAN BROS HLDG 5.450% 4/6/2029 12.50 LEHMAN BROS HLDG 5.700% 4/13/2029 5.70 LEHMAN BROS HLDG 5.900% 5/4/2029 6.06 LEHMAN BROS HLDG 6.000% 5/11/2029 4.00 LEHMAN BROS HLDG 6.200% 5/25/2029 5.00 LEHMAN BROS HLDG 6.050% 6/29/2029 12.00 LEHMAN BROS HLDG 6.000% 7/20/2029 5.22 LEHMAN BROS HLDG 5.750% 8/24/2029 7.06 LEHMAN BROS HLDG 5.700% 9/7/2029 9.50 LEHMAN BROS HLDG 5.750% 9/14/2029 6.06 LEHMAN BROS HLDG 5.750% 10/12/2029 5.00 LEHMAN BROS HLDG 5.650% 11/23/2029 6.17 LEHMAN BROS HLDG 5.700% 12/14/2029 6.00 LEHMAN BROS HLDG 5.550% 1/25/2030 9.75 LEHMAN BROS HLDG 5.450% 2/22/2030 7.00 LEHMAN BROS HLDG 5.600% 2/25/2030 6.50 LEHMAN BROS HLDG 5.625% 3/15/2030 4.42 LEHMAN BROS HLDG 5.750% 3/29/2030 3.00 LEHMAN BROS HLDG 5.600% 5/3/2030 7.88 LEHMAN BROS HLDG 5.350% 6/14/2030 8.40 LEHMAN BROS HLDG 5.400% 6/21/2030 6.75 LEHMAN BROS HLDG 5.450% 7/19/2030 8.63 LEHMAN BROS HLDG 5.500% 8/2/2030 5.00 LEHMAN BROS HLDG 5.650% 8/16/2030 5.70 LEHMAN BROS HLDG 5.450% 9/20/2030 2.02 LEHMAN BROS HLDG 5.800% 10/25/2030 8.83 LEHMAN BROS HLDG 5.850% 11/8/2030 13.75 LEHMAN BROS HLDG 5.950% 12/20/2030 9.00 LEHMAN BROS HLDG 5.900% 2/7/2031 5.50 LEHMAN BROS HLDG 6.000% 3/21/2031 7.70 LEHMAN BROS HLDG 6.150% 4/11/2031 10.05 LEHMAN BROS HLDG 6.850% 8/16/2032 7.50 LEHMAN BROS HLDG 6.850% 8/23/2032 9.50 LEHMAN BROS HLDG 6.900% 9/1/2032 9.50 LEHMAN BROS HLDG 6.800% 9/7/2032 6.50 LEHMAN BROS HLDG 7.000% 10/4/2032 6.88 LEHMAN BROS HLDG 6.500% 11/15/2032 6.75 LEHMAN BROS HLDG 6.500% 1/17/2033 5.00 LEHMAN BROS HLDG 6.750% 3/11/2033 9.50 LEHMAN BROS HLDG 6.000% 4/30/2034 4.56 LEHMAN BROS HLDG 6.000% 7/30/2034 6.17 LEHMAN BROS HLDG 5.550% 12/31/2034 7.83 LEHMAN BROS HLDG 5.650% 12/31/2034 8.20 LEHMAN BROS HLDG 6.000% 2/21/2036 3.56 LEHMAN BROS HLDG 6.000% 2/24/2036 2.13 LEHMAN BROS HLDG 6.900% 6/20/2036 8.50 LEHMAN BROS HLDG 6.400% 12/19/2036 9.00 LEHMAN BROS HLDG 6.500% 12/22/2036 7.56 LEHMAN BROS HLDG 6.000% 2/12/2037 3.00 LEHMAN BROS HLDG 6.500% 2/13/2037 7.00 LEHMAN BROS HLDG 6.300% 3/27/2037 7.50 LEHMAN BROS HLDG 6.500% 6/21/2037 8.90 LEHMAN BROS HLDG 6.500% 7/13/2037 4.88 LEHMAN BROS HLDG 6.875% 7/17/2037 0.06 LEHMAN BROS HLDG 7.000% 7/27/2037 9.50 LEHMAN BROS HLDG 7.000% 9/28/2037 7.00 LEHMAN BROS HLDG 6.750% 10/26/2037 6.00 LEHMAN BROS HLDG 7.000% 11/16/2037 8.63 LEHMAN BROS HLDG 7.000% 12/28/2037 7.20 LEHMAN BROS HLDG 7.000% 1/31/2038 7.00 LEHMAN BROS HLDG 7.000% 2/1/2038 5.90 LEHMAN BROS HLDG 7.000% 2/8/2038 8.50 LEHMAN BROS HLDG 7.050% 2/27/2038 5.17 LEHMAN BROS HLDG 7.250% 2/27/2038 11.50 LEHMAN BROS HLDG 7.100% 3/25/2038 9.00 LEHMAN BROS HLDG 7.000% 4/22/2038 5.04 LEHMAN BROS HLDG 7.250% 4/29/2038 8.63 LEHMAN BROS HLDG 7.350% 5/6/2038 10.00 LIBERTY FINL 6.750% 11/15/2008 97.00 CHENIERE ENERGY 2.250% 8/1/2012 16.00 LANDRY'S RESTAUR 9.500% 12/15/2014 89.25 LIFECARE HOLDING 9.250% 8/15/2013 35.00 LEVEL 3 COMM INC 11.500% 3/1/2010 57.20 LEVEL 3 COMM INC 6.000% 3/15/2010 66.50 LEVEL 3 COMM INC 2.875% 7/15/2010 52.53 LEVEL 3 COMM INC 10.000% 5/1/2011 50.50 MAJESTIC STAR 9.500% 10/15/2010 39.00 MAJESTIC STAR 9.750% 1/15/2011 10.00 MAGNA ENTERTAINM 7.250% 12/15/2009 51.00 MAGNA ENTERTAINM 8.550% 6/15/2010 46.20 MERRILL LYNCH 8.400% 3/9/2011 90.50 MFCCN-CALL11/08 5.050% 11/15/2013 94.46 MFCCN-CALL11/08 5.100% 11/15/2013 96.81 MANDALAY RESORTS 9.375% 2/15/2010 77.50 MASONITE CORP 11.000% 4/6/2015 12.00 MORRIS PUBLISH 7.000% 8/1/2013 10.44 MRS FIELDS 11.500% 3/15/2011 51.00 MORGAN ST DEAN W 1.250% 12/30/2008 74.25 MUZAK LLC/FIN 10.000% 2/15/2009 85.00 NORTH ATL TRADNG 9.250% 3/1/2012 28.00 NATL CITY CORP 5.750% 2/1/2009 99.75 NATL CITY CORP 3.125% 4/30/2009 85.45 NEFF CORP 10.000% 6/1/2015 18.00 NEWARK GROUP INC 9.750% 3/15/2014 30.00 LEINER HEALTH 11.000% 6/1/2012 21.00 OSCIENT PHARM 3.500% 4/15/2011 25.75 OSCIENT PHARM 3.500% 4/15/2011 8.75 OSI RESTAURANT 10.000% 6/15/2015 25.25 PALM HARBOR 3.250% 5/15/2024 40.25 PLIANT CORP 11.125% 9/1/2009 42.00 PLY GEM INDS 9.000% 2/15/2012 31.00 PINNACLE AIRLINE 3.250% 2/15/2025 61.50 PILGRIM'S PRIDE 8.375% 5/1/2017 22.00 PRIMUS TELECOM 12.750% 10/15/2009 69.89 PRIMUS TELECOM 3.750% 9/15/2010 51.75 PRIMUS TELECOM 8.000% 1/15/2014 22.00 POPE & TALBOT 8.375% 6/1/2013 1.10 NUTRITIONAL SRC 10.125% 8/1/2009 21.50 QUALITY DISTRIBU 9.000% 11/15/2010 37.00 RITE AID CORP 6.875% 8/15/2013 36.84 RITE AID CORP 9.375% 12/15/2015 37.06 RAFAELLA APPAREL 11.250% 6/15/2011 38.75 RADIAN GROUP 7.750% 6/1/2011 47.75 RESIDENTIAL CAP 8.375% 6/30/2010 19.00 RESIDENTIAL CAP 8.000% 2/22/2011 17.00 RESIDENTIAL CAP 8.500% 6/1/2012 14.00 RESIDENTIAL CAP 8.500% 4/17/2013 10.00 RESIDENTIAL CAP 8.875% 6/30/2015 21.00 RH DONNELLEY 6.875% 1/15/2013 24.50 RH DONNELLEY 6.875% 1/15/2013 29.00 RH DONNELLEY 6.875% 1/15/2013 24.25 DEX MEDIA WEST 9.875% 8/15/2013 31.00 DEX MEDIA INC 8.000% 11/15/2013 25.00 RH DONNELLEY 8.875% 1/15/2016 21.00 RH DONNELLEY 8.875% 10/15/2017 24.08 ISTAR FINANCIAL 5.375% 4/15/2010 51.00 ISTAR FINANCIAL 6.000% 12/15/2010 48.50 ISTAR FINANCIAL 5.800% 3/15/2011 52.00 ISTAR FINANCIAL 5.125% 4/1/2011 47.00 SEARS ROEBUCK AC 5.750% 1/20/2009 90.00 SEARS ROEBUCK AC 6.050% 3/30/2009 88.00 SEARS ROEBUCK AC 7.500% 1/15/2013 32.25 SIRIUS SATELLITE 2.500% 2/15/2009 85.50 XM SATELLITE 10.000% 12/1/2009 44.63 SIRIUS SATELLITE 9.625% 8/1/2013 33.50 SIX FLAGS INC 8.875% 2/1/2010 49.00 SIX FLAGS INC 9.750% 4/15/2013 21.00 SIX FLAGS INC 9.625% 6/1/2014 28.50 STANDARD MTR 6.750% 7/15/2009 80.00 SPECTRUM BRANDS 7.375% 2/1/2015 38.00 STANLEY-MARTIN 9.750% 8/15/2015 25.00 STATION CASINOS 6.000% 4/1/2012 36.00 STATION CASINOS 6.500% 2/1/2014 11.50 STATION CASINOS 6.875% 3/1/2016 15.00 STATION CASINOS 6.625% 3/15/2018 13.25 SERVICEMASTER CO 7.100% 3/1/2018 21.00 TEKNI-PLEX INC 12.750% 6/15/2010 65.00 TOUSA INC 9.000% 7/1/2010 16.00 TOUSA INC 9.000% 7/1/2010 20.00 TOUSA INC 7.500% 3/15/2011 0.88 TOUSA INC 10.375% 7/1/2012 0.50 TOUSA INC 7.500% 1/15/2015 2.75 TOYOTA-CALL11/08 5.450% 11/20/2014 97.77 TOYOTA-CALL11/08 5.450% 11/21/2016 98.00 TRIBUNE CO 5.670% 12/8/2008 94.00 TRIBUNE CO 4.875% 8/15/2010 41.50 TIMES MIRROR CO 7.250% 3/1/2013 24.00 TRIBUNE CO 5.250% 8/15/2015 20.00 TRUMP ENTERTNMNT 8.500% 6/1/2015 24.50 WIMAR OP LLC/FIN 9.625% 12/15/2014 4.50 TRUE TEMPER 8.375% 9/15/2011 40.00 TRONOX WORLDWIDE 9.500% 12/1/2012 21.50 JAZZ TECHNOLOGIE 8.000% 12/31/2011 40.00 RJ TOWER CORP 12.000% 6/1/2013 2.00 UAL CORP 5.000% 2/1/2021 41.51 USEC INC 6.750% 1/20/2009 95.00 VISTEON CORP 8.250% 8/1/2010 52.00 VISTEON CORP 7.000% 3/10/2014 27.00 VISTEON CORP 12.250% 12/31/2016 34.83 VION PHARM INC 7.750% 2/15/2012 22.00 VICORP RESTAURNT 10.500% 4/15/2011 6.75 VERENIUM CORP 5.500% 4/1/2027 19.09 VESTA INSUR GRP 8.750% 7/15/2025 1.00 WCI COMMUNITIES 9.125% 5/1/2012 20.00 WCI COMMUNITIES 7.875% 10/1/2013 19.00 WCI COMMUNITIES 6.625% 3/15/2015 23.75 WILLIAM LYON 7.625% 12/15/2012 21.00 WILLIAM LYON 10.750% 4/1/2013 21.00 WILLIAM LYON 7.500% 2/15/2014 21.00 WOLVERINE TUBE 10.500% 4/1/2009 92.00 WASH MUTUAL INC 4.000% 1/15/2009 57.00 WASH MUTUAL INC 4.200% 1/15/2010 57.00 WASH MUTUAL INC 8.250% 4/1/2010 15.98 WASH MUT BANK NV 5.550% 6/16/2010 23.00 WASH MUTUAL INC 4.625% 4/1/2014 15.00 WASH MUTUAL INC 7.250% 11/1/2017 14.11 YOUNG BROADCSTNG 10.000% 3/1/2011 8.25 YOUNG BROADCSTNG 8.750% 1/15/2014 7.75 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. 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, Sheryl Joy P. Olano, Ma. Cristina I. Canson, Carlo Alejandro B. Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2008. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***